ZTO Express (Cayman) (ZTO) Q1 2025 Earnings Call May 20, 2025 08:30 PM ET Company Participants Sophie Li - Director - Capital MarketsHuiping Yan - Chief Financial OfficerAmy Han - Director Conference Call Participants Ronald Keung - AnalystQianlei Fan - Analyst Operator Please note this event is being recorded. I would now like to turn the conference over to Sophie Li, Head of Capital Markets. Please go ahead. Sophie Li Thank you, operator. Hello, everyone, and thank you for joining us today. The company's ...

ZTO Express (Cayman) (ZTO) Q1 2025 Earnings Call May 20, 2025 08:30 PM ET Speaker0 Please note this event is being recorded. I would now like to turn the conference over to Sophie Li, Head of Capital Markets. Please go ahead. Speaker1 Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results and the Investor Relations presentation were released earlier today and are available on the company's IR website at ir.eq.com. On the call today from CTO are Mr. Mei Song Lai, Chai ...

1Q 2025 INVESTOR PRESENTATION May 2025 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 busines ...

Parcels Volume Increased 19.1% to 8.5 BillionAdjusted Net Income Grew 1.6% to RMB2.3 BillionAnnual Volume Guidance Reiterated to Grow 20%-24%SHANGHAI, May 20, 2025 /PRNewswire/ -- ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057), a leading and fast-growing express delivery company in China ("ZTO" or the "Company"), today announced its unaudited financial results for the first quarter ended March 31, 2025[1]. The Company grew parcel volume by 19.1% year over year while maintaining high quality of service ...

Exhibit 99.1 ZTO Reports First Quarter 2025 Unaudited Financial Results Parcels Volume Increased 19.1% to 8.5 Billion Adjusted Net Income Grew 1.6% to RMB2.3 Billion Annual Volume Guidance Reiterated to Grow 20%-24% SHANGHAI, May 21, 2025/PRNewswire/ - ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057), a leading and fast- growing express delivery company in China ("ZTO" or the "Company"), today announced its unaudited financial results for the first quarter ended March 31, 2025. The Company grew parcel v ...

ZTO Express (ZTO) is scheduled to report first-quarter 2025 results on May 20, after market close.The Zacks Consensus Estimate for ZTO’s earnings for the soon-to-be-reported quarter has remained flat at 47 cents per share over the past 60 days. Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $1.67 billion, which indicates a rise of 21% year over year.Given this backdrop, let’s see how things have shaped up for ZTO Express this earnings season.High operating expenses are likely to have hurt ...

Core Viewpoint - ZTO Express (Cayman) Inc. has experienced a decline of approximately 13.8% in its share price over the past month, underperforming compared to the S&P 500, raising questions about its future performance leading up to the next earnings release [1]. Group 1 - The last earnings report for ZTO Express was about a month ago, and the company has seen a significant drop in share value during this period [1]. - There has been no movement in earnings estimates from analysts in the last two months, indicating a lack of updates or revisions regarding the company's financial outlook [2].

Financial Performance - Total revenues for Q4 2024 were RMB12,919.7 million (US$1,770.0 million), an increase of 21.7% from RMB10,619.4 million in Q4 2023[8] - Adjusted net income for Q4 2024 reached RMB2,733.3 million (US$374.5 million), a 23.4% increase from RMB2,214.4 million in Q4 2023[5] - Adjusted net income was RMB10,150.4 million (US$1,390.6 million), up from RMB9,005.9 million last year[40] - Net income rose by 1.5% to RMB8,887.6 million (US$1,217.6 million) compared to RMB8,754.5 million last year[38] - Adjusted net income for the year ended December 31, 2024, was RMB8,816,835, reflecting a 0.8% increase from RMB8,749,004 in 2023[62] - Net income for the year ended December 31, 2024, was RMB8.89 billion, a slight increase of 1.5% from RMB8.75 billion in 2023[67] Revenue Growth - For the full year 2024, total revenues were RMB44,280.7 million (US$6,066.4 million), a 15.3% increase from RMB38,418.9 million in 2023[5] - Total revenues increased by 15.3% to RMB44,280.7 million (US$6,066.4 million) from RMB38,418.9 million last year[24] - Revenues for Q4 2024 reached RMB 12,919,702, representing a 21.7% increase from RMB 10,619,434 in Q4 2023[62] Parcel Volume - Parcel volume increased to 9,665 million in Q4 2024, representing an 11.0% growth from 8,705 million in Q4 2023[6] - The average daily retail parcel volume exceeded 7 million, nearly a 50% increase compared to the same quarter last year[7] - The company expects parcel volume for 2025 to be between 40.8 billion and 42.2 billion, representing a 20% to 24% year-over-year increase[46] Profitability Metrics - Adjusted EBITDA for Q4 2024 was RMB4,615.3 million (US$632.3 million), up 26.4% from RMB3,651.8 million in Q4 2023[5] - EBITDA increased to RMB15,094.3 million (US$2,067.9 million) from RMB13,857.8 million last year[41] - Adjusted EBITDA was RMB16,354.9 million (US$2,240.6 million), compared to RMB14,107.3 million last year[42] - Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB10.95 (US$1.50) and RMB10.70 (US$1.47), respectively[38] Costs and Expenses - Total cost of revenues increased by 14.2% to RMB30,563.6 million (US$4,187.2 million) from RMB26,756.4 million last year[25] - Total operating expenses for the year ended December 31, 2024, were RMB1,940,233, an increase from RMB1,654,602 in 2023[62] Cash Flow and Assets - Cash flow from operating activities for Q4 2024 was RMB2,806.3 million (US$384.5 million), compared to RMB3,923.3 million in Q4 2023[5] - Cash and cash equivalents rose from RMB 12.33 billion in 2023 to RMB 13.47 billion in 2024, an increase of 9.2%[66] - Net cash provided by operating activities decreased from RMB 13.36 billion in 2023 to RMB 11.43 billion in 2024, a decline of 14.4%[66] - Total assets increased from RMB 88.47 billion in 2023 to RMB 92.34 billion in 2024, representing a growth of 4.4%[64] Shareholder Returns and Equity - The company announced a semi-annual dividend of US$0.35 per share[1] - The company has a remaining US$778.0 million available under its share repurchase program[45] - The company’s total equity increased from RMB 60.28 billion in 2023 to RMB 62.67 billion in 2024, a growth of 4.0%[64] - The number of shares outstanding decreased slightly from 804.72 million in 2023 to 798.62 million in 2024[64] Future Outlook - The company estimates industry growth for 2025 to be around 15%[7] - The company expects continued growth driven by the expansion of e-commerce in China and its scalable network partner model[60] - The company plans to enhance its logistics services and expand its market presence through strategic partnerships and technology investments[60] Management Insights - ZTO's management emphasizes the importance of non-GAAP measures like adjusted EBITDA for understanding operational performance[51]

Core Viewpoint - ZTO Express (Cayman) Inc. has filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the SEC, highlighting its position as a leading express delivery company in China [1] Company Overview - ZTO is recognized as a leading and fast-growing express delivery company in China, providing express delivery services and value-added logistics services through a reliable nationwide network [4] - The company operates a scalable network partner model, which supports the growth of e-commerce in China by leveraging network partners for pickup and last-mile delivery while controlling the critical line-haul transportation and sorting network [5] Financial Reporting - The annual report on Form 20-F, which includes audited consolidated financial statements, is available on the company's investor relations website and the SEC's website [1][3] - The company offers a hard copy of its annual report free of charge to shareholders upon request [2]

Financial Performance - Revenues for 2023 reached RMB 38,418,915 thousand, a 8.6% increase from RMB 35,376,996 thousand in 2022[51] - Gross profit for 2023 was RMB 11,662,526 thousand, representing a 29.1% increase compared to RMB 9,039,275 thousand in 2022[51] - Net income attributable to ZTO Express (Cayman) Inc. for 2023 was RMB 8,749,004 thousand, up 28.5% from RMB 6,809,056 thousand in 2022[51] - Basic net earnings per share for 2023 were RMB 10.83, an increase from RMB 8.41 in 2022[51] - For the year ended December 31, 2024, consolidated revenue reached RMB 44,280,720, an increase from RMB 38,418,915 in 2023, reflecting a growth of approximately 15.5%[56] - Gross profit for the year ended December 31, 2024, was RMB 13,717,092, compared to RMB 11,662,526 in 2023, indicating a growth of about 18%[56] - Net income for the year ended December 31, 2024, was RMB 8,887,595, up from RMB 8,754,457 in 2023, representing a slight increase of approximately 1.5%[56] Assets and Liabilities - Total assets as of December 31, 2023, were RMB 88,465,221 thousand, up from RMB 78,523,586 thousand in 2022, reflecting a growth of 12.4%[52] - Total liabilities as of December 31, 2023, were RMB 28,184,813 thousand, an increase from RMB 24,051,116 thousand in 2022, reflecting a growth of 17.7%[52] - As of December 31, 2024, total assets for ZTO Express (Cayman) Inc. amounted to RMB 92,340,330 thousand, an increase from RMB 88,465,221 thousand as of December 31, 2023[53][54] - Total liabilities decreased to RMB 29,665,497 thousand in 2024 from RMB 28,184,813 thousand in 2023, indicating a slight increase of about 5.3%[53][54] - The company’s total liabilities and equity increased to RMB 92,340,330 thousand in 2024 from RMB 88,465,221 thousand in 2023, marking a growth of approximately 4.4%[53][54] Cash Flow - Cash and cash equivalents at the end of 2023 were RMB 12,333,884 thousand, compared to RMB 11,692,773 thousand at the end of 2022, indicating a 5.5% increase[52] - Net cash provided by operating activities for 2023 was RMB 13,360,967 thousand, a 16.4% increase from RMB 11,479,308 thousand in 2022[52] - For the year ended December 31, 2024, net cash provided by operating activities was RMB 11,429,436 thousand, an increase from RMB 13,360,967 thousand in 2023[58] - In 2024, net cash used in investing activities was RMB (5,980,724) thousand, compared to RMB (12,252,751) thousand in 2023, indicating a significant reduction in cash outflow[58] - The company reported net cash used in financing activities of RMB (4,995,180) thousand for 2024, a decrease from RMB (769,836) thousand in 2023[58] Market and Competition - The company faces intense competition from domestic express delivery companies, which may lead to downward pricing pressure and affect market share[76] - The company faces competition from major e-commerce platforms like Alibaba, Pinduoduo, and JD.com, which may affect market share and total parcel volume[77] - The company’s growth is highly dependent on the development of the e-commerce industry and the emergence of New Retail in China[67] - More than 90% of the total parcel volume in December 2024 was attributable to e-commerce platforms, highlighting the company's reliance on the e-commerce industry[67] Operational Challenges - The company has experienced a decline in delivery service market prices historically, which may continue to impact revenue and gross margin[76] - Any service disruptions experienced by the company's sorting hubs or network partners may adversely affect business operations and customer satisfaction[76] - The company has experienced significant operational disruptions in 2022 due to COVID-19, resulting in delays and a lower-than-expected parcel volume[80] - Heavy rainfalls and floods in Hebei province in July and August 2023 caused temporary closures of facilities, sorting hubs, and service outlets[80] Regulatory and Compliance Risks - The company is subject to various PRC laws and regulations, including the requirement to obtain and maintain Courier Service Operation Permits, which could impact operations if not complied with[99] - The Interim Regulations on Express Delivery impose requirements such as timely filing records with local postal administrations and maintaining service quality, with non-compliance potentially leading to fines or business suspension[100] - The company is subject to significant compliance costs and potential penalties due to unethical or anticompetitive conduct within its network[155] - The company may face significant challenges in enforcing contractual arrangements with ZTO Express, which could lead to material adverse effects on business operations[182] Strategic Initiatives - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service offerings[56] - The company intends to diversify its service offerings and expand its customer base to increase revenue sources, acknowledging potential risks and challenges associated with new initiatives[96] - The company plans to further expand its network in response to increasing customer needs, but may face challenges in integrating and optimizing a larger network[93] Human Resources - As of December 31, 2024, the company had a total of 24,471 employees, indicating a labor-intensive operational model[84] - Labor costs are expected to increase due to a competitive labor market, particularly during peak seasons[84] - The company may face challenges in attracting and retaining qualified personnel, which is critical for its operational success and expansion plans[120] Financial Instruments and Investments - The company has issued US$1 billion in convertible senior notes due 2027, bearing interest at 1.50% per year, with potential repurchase obligations starting September 2, 2025[150] - The company has made strategic investments, including a US$168 million investment for a 15% equity stake in Cainiao Post, aimed at enhancing delivery capacity[148] Currency and Economic Risks - Fluctuations in the Renminbi against the U.S. dollar could materially affect revenues and earnings, impacting the valuation of Class A ordinary shares and ADSs[209] - Limited hedging options in China may exacerbate currency exchange losses, affecting investment value[211] - Government controls on currency conversion may hinder the effective utilization of revenues and affect dividend payments to shareholders[212] Corporate Governance - Mr. Meisong Lai holds 206,100,000 Class B ordinary shares, representing 78.0% of the aggregate voting power, giving him decisive influence over corporate matters[239] - The company is classified as a "controlled company" under the NYSE Listed Company Manual, allowing it to rely on exemptions from certain corporate governance requirements[240] Legal and Taxation Issues - The company may face uncertainties regarding reporting obligations and potential taxation in past and future transactions involving PRC taxable assets[224] - The PRC Company Law was amended on December 29, 2023, with new requirements for companies established in China, effective July 1, 2024, which could materially affect corporate structure and operations if not met[187]