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. (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 ...

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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SHANGHAI, Aug. 2, 2024 /PRNewswire/ -- ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057) ("ZTO" or the "Company"), a leading and fast-growing express delivery company in China, today announced that it will release its unaudited financial results for the second quarter ended June 30, 2024 and its unaudited interim financial results for the half year ended June 30, 2024, after the U.S. market closes on August 20, 2024. ZTO's management team will host an earnings conference call at 8:30 P.M. U.S. Eastern Ti ...