Core Viewpoint - ZTO Express reported robust financial performance in Q3 2024, with adjusted net income growing by 2.0% to RMB2.4 billion and parcel volume increasing by 15.9% to 8.7 billion, despite challenging macroeconomic conditions [1][2][5]. Financial Highlights - Total revenues reached RMB10,675.0 million (US$1,521.2 million), marking a 17.6% increase from RMB9,075.9 million in Q3 2023 [2]. - Gross profit was RMB3,334.8 million (US$475.2 million), up 23.2% from RMB2,706.4 million in the same period last year [11]. - Net income increased by 1.3% to RMB2,379.0 million (US$339.0 million) compared to RMB2,349.6 million in Q3 2023 [17]. - Adjusted EBITDA rose by 8.7% to RMB3,739.5 million (US$532.9 million) from RMB3,438.6 million in the previous year [2][21]. - Basic and diluted net earnings per American depositary share (ADS) were RMB2.98 (US$0.42) and RMB2.90 (US$0.41), reflecting increases of 2.4% and 2.1% respectively from the same period last year [18]. Operational Highlights - Parcel volume reached 8,723 million, a 15.9% increase from 7,523 million in Q3 2023 [3]. - The number of pickup/delivery outlets exceeded 31,000, and direct network partners surpassed 6,000 as of September 30, 2024 [3]. - The fleet included over 10,000 self-owned line-haul vehicles, with more than 9,700 being high-capacity models [3]. Cost and Efficiency - Total cost of revenues was RMB7,340.2 million (US$1,046.0 million), an increase of 15.2% from RMB6,369.5 million in the same period last year [7]. - Line-haul transportation costs increased by 4.7% to RMB3,398.0 million (US$484.2 million), while unit transportation costs decreased by 9.7% [8]. - Sorting hub operating costs rose by 8.6% to RMB2,224.2 million (US$316.9 million), with a decrease in cost per unit by 6.4% [9]. Strategic Outlook - The company anticipates parcel volume for 2024 to be between 33.7 billion and 33.9 billion, representing an 11.6% to 12.3% year-over-year increase [22]. - ZTO aims to maintain high service quality and customer satisfaction while regaining market share and expanding its leadership in parcel volume [5][6].

Core Viewpoint - ZTO Express Cayman Inc. is experiencing significant challenges due to escalating operating expenses and weak financial stability, making it an unattractive investment option for investors' portfolios [1] Financial Performance - The Zacks Consensus Estimate for current-year earnings has been revised downward by 1.7% over the past 60 days, with a 0.5% decrease for the next year, indicating a lack of confidence from brokers [2] - ZTO shares have declined by 5.7% over the past year, contrasting with a 5.9% rise in the industry [2] Industry Ranking - ZTO currently holds a Zacks Rank of 4 (Sell) and belongs to an industry with a Zacks Industry Rank of 191 out of 251, placing it in the bottom 24% of Zacks Industries [3] Operating Expenses - In Q2 2024, total operating expenses increased by 5% year over year, primarily due to a 17.5% rise in labor costs, totaling $683.7 million [4][5] - General supplies and expenses rose by 15% to $81.6 million, while interest expenses increased to $15.94 million during the same period [5] Competitive Landscape - The domestic express delivery market is highly competitive, with major players like SF Express and STO Express, which could further pressure ZTO's stock price if competition intensifies [6]

Core Viewpoint - ZTO Express (Cayman) Inc. is rated as a Hold, with expectations of mixed third-quarter performance characterized by top-line growth acceleration but weaker profitability [1] Company Summary - ZTO Express is expected to report an acceleration in top-line growth for the third quarter [1] - Profitability is anticipated to be weaker compared to previous periods [1] Industry Summary - The analysis focuses on value investing opportunities in Asia, particularly in the Hong Kong market, emphasizing deep value balance sheet bargains and wide moat stocks [1]

Core Insights - ZTO Express (Cayman) Inc. has seen a 5.2% increase in shares since the last earnings report, outperforming the S&P 500 [1] Financial Performance - For Q2 2024, ZTO Express reported earnings of 47 cents per share, an improvement year over year, with total revenues reaching $1.475 billion [2] - The core express delivery business revenues grew by 10.4% year over year, driven by a 10.1% increase in parcel volume and stable parcel unit prices [3] - KA revenues surged by 73.9%, reflecting a growing proportion of higher-value customers [3] - Revenues from freight forwarding services declined by 2.4% year over year [3] - Accessory sales, primarily thermal paper for digital waybills, increased by 24.1% year over year [3] - Gross profit rose by 9.6% compared to the previous year, although the gross margin rate slightly decreased to 33.8% from 33.9% [3] Operating Expenses and Cash Position - Total operating expenses were reported at RMB405.3 million ($55.8 million), down from RMB425.7 million in the previous year [4] - Cash and cash equivalents at the end of Q2 2024 stood at RMB10.54 billion, a decrease from RMB12.58 billion at the end of Q1 2024 [4] Future Guidance - ZTO Express anticipates parcel volumes for 2024 to be between 34.73 billion and 35.64 billion, indicating a year-over-year increase of 15-18% [5] Analyst Reactions - There have been no earnings estimate revisions from analysts in the past two months [6]

ZTO Express Cayman Inc.’s (ZTO) financial stability is challenged by escalated operating expenses. Elevated labor costs are further putting a strain on the company’s bottom line, thereby making it an unattractive choice for investors’ portfolios.Let’s delve deeper.Weak Zacks Rank: ZTO currently carries a Zacks Rank #4 (Sell).Unimpressive Price Performance: ZTO Express’ shares have plunged 15.6% in the past year compared with its industry’s 7.8% decline.Image Source: Zacks Investment ResearchBearish Industry ...

J Studios/DigitalVision via Getty Images I last wrote about ZTO Express in an article published in June of this year. Back then, I was concerned about ZTO's market share loss and the ongoing price war in China's express delivery industry. Unfortunately, the trend continued in Q2 of 2024 as evidenced by ZTO's earnings results, which were released on August 20th after the bell. Faced with another quarter of market share loss, ZTO's management is determined to fight back. At the same time, management is also c ...

ZTO Express' (ZTO) ) shares gained 6.1% since its second-quarter 2024 earnings release on Aug 20. Quarterly earnings of 47 cents per share improved year over year. Total revenues of $1.47 billion improved year over year. Detailed Operational Statistics Revenues from the core express delivery business improved 10.4% year over year, owing to 10.1% growth of parcel volume and stable parcel unit price. KA revenues, including delivery fees from direct sales organizations established to serve core express KA cust ...

ZTO Express (Cayman) Inc. 中通快遞(開曼)有限公司 (A company controlled through weighted voting rights and incorporated in the Cayman Islands with limited liability) (Stock Code: 2057) Exhibit 99.2 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any ...

ZTO Express (Cayman) Inc. (NYSE:ZTO) Q2 2024 Earnings Conference Call August 20, 2024 8:30 PM ET Company Participants Sophie Li - Corporate Secretary and Director of Capital Markets Meisong Lai - Chairman and CEO Huiping Yan - CFO Conference Call Participants Ronald Keung - Goldman Sachs Qianlei Fan - Morgan Stanley Lu Wei Jiang - Haitong Securities Operator Good day and welcome to the ZTO Express to announce Second Quarter and Half Year 2024 Financial Results Conference Call. All participants will be in a ...

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 ...