ZTO EXPRESS(ZTO) - 2023 Q3 - Quarterly Report

Financial Performance - Adjusted net income increased by 25.0% year-over-year to RMB2.34 billion, with net income rising 24.0% to RMB2.35 billion[2][6] - Total revenues reached RMB9.08 billion (US$1.24 billion), marking a 1.5$332.2 million) from RMB2,174.8 million year-over-year[13] - Operating margin improved to 26.7%, up from 24.3% in the same period last year[13] - Net income rose by 24.0% to RMB2,349.6 million (US$322.0 million) compared to RMB1,895.5 million in the same period last year[15] - EBITDA increased to RMB3,449.5 million (US$472.8 million) from RMB3,031.8 million in the same period last year[15] - Comprehensive income attributable to ZTO Express (Cayman) Inc. for the three months ended September 2023 was RMB 2,312,326, compared to RMB 1,969,531 in the same period of 2022, indicating a growth of 17.4%[30] - Net income for the three months ended September 2023 was RMB 2,349,610 thousand, up from RMB 1,895,455 thousand in the same period of 2022, indicating a growth of 23.93%[36] Revenue and Cost Management - Total cost of revenues decreased by 2.0% to RMB6.37 billion, with combined unit sorting and transportation costs down over 11%[8][9] - Cash flow from operating activities was RMB2.94 billion, compared to RMB2.82 billion in the same period of 2022[2][6] - Other operating income was RMB150.9 million (US$20.7 million), a decrease from RMB171.8 million in the same period last year[13] - Total operating expenses for the nine months ended September 2023 were RMB 1,281,448, an increase of 29.3$0.40) and RMB2.84 (US$0.39), respectively, compared to RMB2.39 and RMB2.37 in the same period last year[15] - The company has repurchased 40,258,978 ADSs at an average price of US$25.16 as part of its share repurchase program[19] - Basic net earnings per share attributable to ordinary shareholders for the three months ended September 30, 2023, was RMB 2.91, a 21.8% increase from RMB 2.39 in the same period of 2022[38] - Diluted net earnings per share attributable to ordinary shareholders for the three months ended September 30, 2023, was RMB 2.84, compared to RMB 2.37 in the same period of 2022, reflecting a growth of 19.8%[38] Investments and Capital Expenditures - Capital spending for the quarter was RMB1.3 billion, reflecting ongoing investments in capacity upgrades and operational improvements[6][12] - Long-term investments increased significantly from RMB 7,322,545 thousand as of December 31, 2022, to RMB 14,239,247 thousand as of September 2023, a growth of 94.5%[31] - The company reported a net cash used in investing activities of RMB (4,025,760) thousand for the three months ended September 2023, a decrease from RMB (4,736,716) thousand in the same period of 2022, indicating improved cash flow management[33] Tax and Interest Income - Interest income was RMB246.4 million (US$33.8 million), up from RMB162.4 million in the same period last year[13] - Income tax expenses decreased to RMB271.4 million (US$37.2 million) from RMB439.4 million in the same period last year, with an overall income tax rate decrease of 8.3 percentage points[14] Operational Efficiency - The number of sorting hubs increased to 97, with 482 sets of automated sorting equipment enhancing operational efficiencies[3][10] - Core express average selling price (ASP) decreased by 13.5%, influenced by a decline in average parcel weight and increased volume incentives[6][7] Future Outlook - The company anticipates continued growth in net income and earnings per share for the upcoming quarters based on current market trends and operational strategies[38] - The company is focused on expanding its market presence and enhancing its product offerings through ongoing research and development initiatives[38]