2Q 2024 INVESTOR PRESENTATION August 2024 1 Safe Harbor Statement and Disclaimer This presentation contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to," and other similar expressions. Among other things, the bu ...

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 20,685,970, representing a 10.5% increase compared to RMB 18,723,563 for the same period in 2023[2] - Gross profit for the period was RMB 6,622,562, reflecting a 13.6% increase from RMB 5,827,833 in the previous year[2] - Net profit decreased by 3.2% to RMB 4,061,744 compared to RMB 4,195,034 in the same period last year[2] - Adjusted EBITDA for the six months was RMB 7,034,205, a 4.0% increase from RMB 6,761,106 in 2023[2] - Adjusted net profit was RMB 5,029,768, which is a 13.0% increase from RMB 4,450,774 in the previous year[2] - Basic and diluted earnings per American Depositary Share (ADS) were RMB 6.21 and RMB 6.06 respectively, representing increases of 12.5% and 12.2% year-over-year[2] Operating Costs and Efficiency - Operating costs increased by 9.1% to RMB 14,063,408 from RMB 12,895,730 year-over-year[2] - The total operating costs increased by 9.1% to RMB 14,063.41 million for the six months ended June 30, 2024, compared to RMB 12,895.73 million in the same period of 2023[19] - The sorting center operating cost was RMB 4,395.9 million, up 11.3% from RMB 3,948.0 million in the same period of 2023, primarily due to labor-related cost increases of RMB 223.4 million and depreciation costs related to automation upgrades increasing by RMB 155.0 million[20] - The company’s operating efficiency improvements have contributed to its robust financial performance despite intense industry competition[7] Revenue Streams - The core express business revenue increased by 10.7% to RMB 20,250 million for the six months ended June 30, 2024, driven by an 11.8% growth in package volume[16] - Express delivery services accounted for 92.9% of total revenue in 2023, with RMB 17,387,187, while freight forwarding services contributed 2.3% with RMB 431,597[59] - Material sales revenue increased by 27.4% for the six months ended June 30, 2024, compared to the same period in 2023[18] - Direct customer business revenue increased by 26.2% due to the expansion of higher-value platform customers[16] Cash Flow and Investments - Cash and cash equivalents, restricted cash, and short-term investments totaled RMB 10,542.1 million, RMB 22.3 million, and RMB 9,898.8 million, respectively, as of June 30, 2024[29] - The company incurred capital expenditures of approximately RMB 3 billion for the six months ended June 30, 2024, compared to RMB 4.5 billion for the same period in 2023[34] - The company has capital commitments as of June 30, 2024, amounting to RMB 4.4 billion, primarily related to the construction of office buildings, sorting centers, and warehouse facilities[34] - The company has maintained a strong cash position with total cash and cash equivalents of RMB 10,542,131 as of June 30, 2024, which supports future growth initiatives[52] Shareholder Returns - The company approved an interim dividend of $0.35 per American Depositary Share and ordinary share for the six months ended June 30, 2024, with a payout ratio of 40%[43] - The company plans to pay the interim dividend to shareholders on October 10, 2024, for ordinary shares and on October 17, 2024, for American Depositary Shares[43] - The company declared dividends amounting to RMB (3,600,516) for the six months ended June 30, 2024[50] Related Party Transactions - Revenue from transportation services provided to Zhongtong Cloud Warehouse Technology Co., Ltd. and its subsidiaries was RMB 281,841,000 for the six months ended June 30, 2024, compared to RMB 413,092,000 for the same period in 2023, representing a decrease of 31.8%[80] - Operating costs paid to Zhongtong Supply Chain Management Co., Ltd. and its subsidiaries amounted to RMB 539,484,000 for the six months ended June 30, 2024, compared to RMB 798,204,000 for the same period in 2023, a decrease of 32.5%[80] - The total amount payable to related parties as of June 30, 2024, was RMB 154,446,000, down from RMB 234,683,000 as of December 31, 2023, indicating a reduction of 34.2%[81] - The total receivables from related parties as of June 30, 2024, increased to RMB 170,038,000 from RMB 148,067,000 as of December 31, 2023, reflecting an increase of 14.8%[82] Audit and Compliance - The financial results were reviewed by the audit committee and are prepared in accordance with US GAAP[1] - The audit committee is responsible for overseeing the company's accounting and financial reporting processes, including the appointment of independent auditors and the review of financial statements[41] - The audit committee consists of two independent non-executive directors and one non-executive director, ensuring compliance with independence requirements[40] Employee and Labor Relations - The total employee count as of June 30, 2024, is 23,906, with sorting employees making up 31.8% of the total[35] - Employee compensation costs for the six months ended June 30, 2024, totaled RMB 1,717.8 million, an increase from RMB 1,576.4 million for the same period in 2023[35] - The company has not faced significant labor disputes during the reporting period[36] Market Strategy and Future Outlook - The company aims to expand its service offerings to create an ecosystem that includes express delivery, less-than-truckload logistics, cross-border services, warehousing, and cold chain solutions[9] - The company expects the total package volume for 2024 to be between 34.73 billion and 35.64 billion, reflecting a year-on-year growth of 15% to 18%[14] - The company is focused on expanding its market presence and enhancing its service offerings through strategic investments and partnerships[54]

Financial Performance - For Q2 2024, the company reported a revenue of RMB 10,726.0 million (USD 1,475.9 million), representing a 10.1% increase from RMB 9,740.3 million in Q2 2023[4] - Adjusted net profit grew by 10.9% to RMB 2,805.7 million (USD 386.1 million), compared to RMB 2,531.0 million in the same period last year[4] - Gross profit for Q2 2024 was RMB 3,620.5 million (USD 498.2 million), an increase of 9.6% from RMB 3,304.4 million in Q2 2023[4] - Basic and diluted earnings per American Depositary Share (ADS) were RMB 3.24 (USD 0.45) and RMB 3.16 (USD 0.43), reflecting increases of 3.2% and 2.9% respectively from the previous year[4] - Adjusted EBITDA for the quarter was RMB 4,339.7 million (USD 597.2 million), up 11.7% from RMB 3,883.9 million in Q2 2023[4] - Operating profit was RMB 3,215.2 million (USD 442.4 million), an increase of 11.7% from RMB 2,878.8 million year-on-year, with an operating profit margin rising from 29.6% to 30.0%[10] - Net profit was RMB 2,614.0 million (USD 359.7 million), a 3.3% increase from RMB 2,530.2 million in the same period last year[11] Operational Metrics - The company achieved a package volume growth of 10.1% year-over-year while maintaining high service quality and customer satisfaction[3] - The total package volume reached 8.452 billion, an increase of 10.1% compared to 7.677 billion in the same period of 2023[5] - Core express service revenue increased by 10.4%, driven by a 10.1% growth in package volume and stable unit pricing[7] - Operating costs totaled RMB 7,105.5 million (USD 977.7 million), reflecting a 10.4% increase from RMB 6,435.9 million in the previous year[8] - The average revenue per package remained stable at RMB 1.24, with a slight decrease in sorting and transportation costs by 2 cents due to improved fleet efficiency[6] Cash Flow and Dividends - Operating cash flow for the quarter was RMB 3,480.1 million (USD 478.9 million), down from RMB 3,761.6 million in Q2 2023[4] - The company declared an interim dividend of USD 0.35 per share[3] - The company reported a net cash flow from operating activities of RMB 3,480.1 million (USD 478.9 million), down from RMB 3,761.6 million year-on-year[11] Risks and Governance - The company continues to face risks related to the competitive landscape and reliance on third-party e-commerce platforms[2] - The board of directors includes various executive and independent directors, ensuring diverse oversight and governance[2] - The company warns that forward-looking statements involve inherent risks and uncertainties that could lead to significant differences from actual results[18] - The company is subject to risks related to the development of the e-commerce and express delivery industry in China, including competition and reliance on third-party platforms[18] Future Outlook - The company aims for a business volume growth guidance of 15% to 18% for 2024[6] - For 2024, the company expects package volume to be between 34.73 billion and 35.64 billion, representing a year-on-year growth of 15% to 18%[13] - The management team will provide insights into performance and future outlook during the earnings call[16] Non-GAAP Metrics - The company utilizes non-GAAP financial metrics such as EBITDA, adjusted EBITDA, and adjusted net income to assess operational performance and inform financial decisions[15] - The company emphasizes the importance of non-GAAP metrics in identifying fundamental business trends and enhancing understanding of past performance and future prospects[15] - The financial metrics discussed may not be directly comparable to similar metrics used by other companies due to different calculation methods[15] - The company encourages investors to review its financial data comprehensively rather than relying on a single financial metric[15] Assets and Liabilities - As of December 31, 2023, total assets amounted to RMB 88,465,221, a decrease from RMB 91,103,798 as of June 30, 2024[20] - Total liabilities stood at RMB 28,184,813, down from RMB 30,129,924, representing a reduction of approximately 6%[20] - The total equity of the company was RMB 60,280,408, a decrease from RMB 60,973,874, indicating a decline of about 1.1%[20] - The company’s inventory was reported at RMB 7,454,633, down from RMB 9,898,796, reflecting a decrease of approximately 25%[20] - The company’s long-term investments decreased to RMB 12,170,881 from RMB 14,034,434, a decline of about 13%[20]

Parcel Volume and Market Share - ZTO achieved a parcel volume of 5.8 billion in 2Q 2024, reflecting a market share increase to 20.4%[13] - The company reported a net profit share of approximately 63% among Tongdas, with a parcel volume share of around 34% in 2023[64] - ZTO plans to capture an incremental parcel volume of over 40 billion from 2021 to 2025, driven by stable economic growth and increased e-commerce penetration[35] - The parcel package volume decreased to 7.68 billion in Q2 2024, down 10.1% from 8.45 billion in Q2 2023, reflecting a 19.6% market share[161] - Parcel package volume decreased to 13.97 billion, a decline of 11.3% compared to 1H23, with a market share of 19.5%[166] Operational Efficiency and Technology - ZTO's operational efficiency is highlighted by a continuous decrease in cost per parcel, supported by a self-owned line-haul fleet of approximately 10,000 vehicles[57] - The company operates 90 self-operated sorting hubs and 6 partner-operated sorting hubs, enhancing its logistics capabilities[48] - ZTO's technological advancements include 515 automated sorting lines and ongoing collaborations with the Chinese Academy of Sciences for sorting technology development[59] - The company is testing next-generation automation technologies, including unmanned vehicles and hybrid drones, to optimize delivery efficiency[65] - The company operates 515 sets of automated sorting equipment, up from 460 sets in Q2 2023, enhancing operational efficiency[154] - Core express delivery unit cost decreased by 2.2%, benefiting from better economies of scale and improved load rates[169] Financial Performance - ZTO Express reported a net income of RMB 2,614 million for Q2 2024, representing a 3.3% increase compared to RMB 2,530 million in Q2 2023[161] - Adjusted EBITDA for Q2 2024 was RMB 4,340 million, up 11.7% from RMB 3,884 million in Q2 2023[161] - Total revenues reached RMB 10,726 million in Q2 2024, a 10.1% increase from RMB 9,740 million in Q2 2023, driven by a 10.4% rise in core express delivery business revenues[161] - Gross profit from core express delivery business increased by 13.6% to ¥6.59 billion, with a gross profit margin of 32.6%[166] - Net income for 1H24 was ¥4.195 billion, a decrease of 3.2% from 1H23, resulting in a net income margin of 19.6%[166] - Adjusted net income (Non GAAP) rose by 24.3% to ¥5.030 billion, with an adjusted net income margin of 23.8%[166] - The adjusted net income for Q2 2024 is projected to be 0.51, maintaining a consistent performance trend[136] - The adjusted net income margin for Q2 2024 was 26.2%, compared to 25.8% in Q2 2023[161] Customer Satisfaction and Employee Development - The company has achieved a 94% overall customer satisfaction rate, an increase of 3 percentage points year-over-year[111] - The company has implemented a comprehensive employee development program, including mentorship and on-the-job training[76] Environmental Goals - The company aims for a 20% reduction in GHG emissions intensity per parcel produced by 2028[105] Capital Expenditures and Cash Flow - Capital expenditures (CapEx) for Q2 2024 were RMB 1,277 million, significantly lower than RMB 2,201 million in Q2 2023[164] - Operating cash flow for Q2 2024 was RMB 3,480 million, a decrease of RMB 282 million compared to RMB 3,762 million in Q2 2023[164] - Cash and cash equivalents stood at ¥16.59 billion, excluding ¥14.03 billion in cash on deposits maturing in one year or longer[169] Strategic Initiatives - The company has established around 110,000 last-mile posts as of 2Q 2024, covering all provinces and approximately 300 cities in China[52] - The company has diversified its product offerings, including freight forwarding and international express delivery, enhancing its market presence[86] - The company has achieved a top 3 ranking in cargo volume among network partner model competitors in the Less-than-Truckload segment[87] - The company has established a strategic foothold in the cold chain market, with existing network coverage across approximately 300 cities[94] - ZTO's "shared-success" philosophy has led to the conversion of major network partners into shareholders, fostering loyalty and network stability[42] - The company maintains a stable partner network with a low churn rate of 5%, ensuring consistent service quality[48] Expenses - SG&A expenses increased by 17.5% to RMB 593 million, with SG&A excluding share-based compensation at 5.5% of revenues[161] - SG&A expenses, excluding stock-based compensation, accounted for 5.7% of revenues, slightly up from 5.5% in 1H23[166] - Gross profit margin for core express delivery business was 34.3% in Q2 2024, slightly down from 34.6% in Q2 2023[161] - Core express delivery average selling price (ASP) decreased by 1.0% to ¥1.30 per parcel[169] - ZTO Express maintained a stable average selling price (ASP) of RMB 1.24 per parcel in Q2 2024, unchanged from Q2 2023[164]

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Company Overview - ZTO Express (Cayman) Inc. is a leading and fast-growing express delivery company in China [2] - The company provides express delivery services and other value-added logistics services through a reliable nationwide network [2] - ZTO operates a scalable network partner model to support the growth of e-commerce in China [2] Financial Results Announcement - ZTO will release its unaudited financial results for Q2 and interim results for the half year ended June 30, 2024, after the U.S. market closes on August 20, 2024 [1] - An earnings conference call will be hosted by ZTO's management team at 8:30 P.M. U.S. Eastern Time on August 20, 2024 [1] - Dial-in details for the earnings conference call are provided for various regions including the U.S., Hong Kong, Singapore, and Mainland China [1]

ZTO Yunpei Signs Purchase Agreement with Nisun International, Driving Significant Expansion in China's Egg MarketSHANGHAI, July 23, 2024 /PRNewswire/ -- Nisun International Enterprise Development Group Co., Ltd ("Nisun International" or the "Company") (Nasdaq: NISN), a technology and industry driven integrated supply chain solutions provider, is pleased to announce a significant milestone in its partnership with Zhejiang ZTO Yunpei Food Co., Ltd. ("ZTO Yunpei"), the supply chain company under ZTO Express, a ...

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Core Insights - ZTO Express is experiencing robust growth in parcel volume, which is positively impacting its revenue, but elevated operating expenses are significantly affecting its profitability [1][2] Factors Favoring ZTO - In Q1 2024, parcel volume increased by 13.9% year over year, while the parcel unit price decreased by 2.5%, leading to an 11% revenue increase from core express delivery services [2] - The company anticipates a parcel volume growth of 15%-18% year over year for 2024 [2] - Overall unit costs for the core express delivery business decreased by 5.3% year over year, driven by a 7% reduction in line-haul transportation costs and a 5.4% decrease in unit sorting costs [2] Shareholder Commitment - ZTO Express has repurchased 42,501,325 ADS for $1.06 billion by the end of Q4 2023, with $437 million remaining in its share repurchase program [3] - The company has increased its repurchase value from $1.5 billion to $2 billion and extended the program to June 30, 2025 [3] Key Risks - Total operating expenses rose by 28.3% year over year in Q1 2024, adversely impacting ZTO's bottom line [4] - Selling, general, and administrative expenses increased by 14% year over year, amounting to RMB896.6 million (US$124.2 million), primarily due to rising labor costs and a provisional loss related to a supplier [4] - ZTO's shares have declined by 16.9% over the past year, compared to a 9.4% decline in the industry [4]

Core Insights - ZTO Express (Cayman) Inc. is a leading express delivery company in China, founded in 2009 and publicly traded since 2016 [7] - The company currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, indicating a solid position in the market [7] - ZTO's Value Style Score is also B, supported by a forward P/E ratio of 12.56, making it attractive for value investors [7] - Recent analyst activity shows two analysts have revised their earnings estimates higher for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.01 to $1.75 per share [7] - ZTO has an average earnings surprise of 8.2%, suggesting a positive trend in earnings performance [7]