香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 根據不同投票權架構，我們的股本包括A類普通股及B類普通股。對於需要股東投票的所有事 項，A類普通股持有人每股可投1票，而B類普通股持有人則每股可投10票。股東及有意投資者 務請留意投資不同投票權架構公司的潛在風險。我們的美國存託股（每股美國存託股代表一股A 類普通股）於美國紐約證券交易所上市，代碼為ZTO。 ZTO Express (Cayman) Inc. 中通快遞（開曼）有限公司 （於開曼群島註冊成立以不同投票權控制的有限責任公司） （股份代號：2057） 截至2023年6月30日止六個月的 中期業績公告 中通快遞（開曼）有限公司董事會欣然公佈本集團截至2023年6月30日止六個月的 未經審計中期合併業績，連同2022年同期的比較數字，該等資料乃根據美國公認 會計準則編製。該等中期業績已由審計委員會審閱。本集團截至2023年6月30日 止六個月的簡明合併財務報表已由核數師按照香港會計師公會頒佈的香港審 ...

Financial Performance - For Q2 2023, the company reported a revenue of RMB 9,740.3 million (USD 1,343.3 million), representing a 12.5% increase from RMB 8,656.7 million in Q2 2022[5] - The adjusted net profit for Q2 2023 grew by 43.9% to RMB 2,531.0 million (USD 349.0 million), compared to RMB 1,758.7 million in the same period last year[5] - The gross profit for Q2 2023 was RMB 3,304.4 million (USD 455.7 million), which is a 50.0% increase from RMB 2,202.8 million in Q2 2022[5] - Basic and diluted earnings per American Depositary Share (ADS) were RMB 3.14 (USD 0.43) and RMB 3.07 (USD 0.42), representing increases of 40.8% and 37.7% respectively compared to Q2 2022[5] - Adjusted EBITDA for Q2 2023 was RMB 3,883.9 million (USD 535.6 million), a 34.3% increase from RMB 2,892.0 million in the same quarter last year[5] - Operating profit was RMB 2,878.8 million (USD 397.0 million), a 45.0% increase from RMB 1,985.5 million year-on-year, with operating profit margin improving from 22.9% to 29.6%[11] - Net profit was RMB 2,530.2 million (USD 348.9 million), a 43.9% increase from RMB 1,758.7 million in the same period last year[12] - Adjusted net profit for the first half of 2023 was RMB 4,450,774, up 58.5% from RMB 2,813,206 in the same period of 2022[29] - The company reported a total revenue of RMB 3,883,090 for Q2 2023, representing a year-over-year increase of 34.5%[29] - The adjusted EBITDA for the first half of 2023 was RMB 7,016,846, a 43.5% increase from RMB 4,894,033 in the first half of 2022[29] Operational Metrics - The company achieved a package volume of 7.7 billion, reflecting a year-on-year growth of 23.8%[4] - Package volume reached 7.677 billion, an increase of 23.8% compared to 6.203 billion in the same period of 2022[6] - Core express service revenue increased by 14.1%, driven by a 23.8% rise in package volume and a 7.8% decline in per-package pricing[8] - Operating cash flow for the quarter was RMB 3,761.6 million (USD 518.8 million), slightly down from RMB 3,780.8 million in Q2 2022[5] - Operating costs totaled RMB 6.436 billion (USD 887.6 million), a slight decrease of 0.3% from RMB 6.454 billion in the same period last year[9] - The company expects total package volume for the year to be between 29.27 billion and 30.24 billion pieces, representing a year-on-year growth of 20% to 24%[13] - The number of sorting centers increased to 96, with 87 operated by the company and 9 by network partners[6] - Direct network partners numbered approximately 6,000 as of June 30, 2023[6] - The company has over 10,000 owned vehicles, with 9,300 being high-capacity models between 15 to 17 meters in length[6] Financial Position - Revenue for the six months ended June 30, 2023, reached RMB 18,723,563, an increase from RMB 16,560,727 for the same period in 2022, representing a growth of approximately 13.1%[23] - Gross profit for the six months ended June 30, 2023, was RMB 5,827,833, up from RMB 3,822,301 in the same period of 2022, indicating a growth of about 52.5%[23] - Operating profit for the six months ended June 30, 2023, was RMB 4,829,217, compared to RMB 3,101,807 for the same period in 2022, reflecting an increase of approximately 55.7%[23] - Net profit attributable to ordinary shareholders for the six months ended June 30, 2023, was RMB 4,211,540, up from RMB 2,711,451 in the same period of 2022, marking a growth of around 55.1%[23] - As of June 30, 2023, total assets increased to RMB 82,054,548, up from RMB 78,523,586 as of December 31, 2022, representing a growth of approximately 2.0%[25] - Total liabilities rose to RMB 25,720,795, compared to RMB 24,051,116, indicating an increase of approximately 6.9%[25] - The total equity increased to RMB 56,333,753 as of June 30, 2023, from RMB 54,472,470 as of December 31, 2022, marking an increase of approximately 3.4%[25] Risks and Challenges - The company continues to face risks related to competition and reliance on third-party e-commerce platforms, which may impact operational performance[3] - The company is subject to various risks, including reliance on third-party e-commerce platforms and intense competition in the express delivery industry[21] Strategic Initiatives - The company maintains its full-year business volume growth guidance at 20%-24%[4] - The share repurchase plan allows the company to repurchase up to USD 1.5 billion worth of its Class A ordinary shares, with an average purchase price of USD 25.18 as of June 30, 2023[15] - The company operates a scalable network partner model to support the rapid growth of e-commerce in China[20] - The management team held an earnings conference call on August 29, 2023, to discuss performance and future outlook[19] Non-GAAP Metrics - The company uses non-GAAP financial metrics such as EBITDA, adjusted EBITDA, and adjusted net income to assess operational performance and inform financial decisions[17] - The company emphasizes the importance of non-GAAP metrics for understanding core business trends and future prospects[17] - The company encourages investors to review comprehensive financial data rather than relying solely on individual financial metrics[17] - The company’s performance metrics may not be directly comparable to those of other companies due to different calculation methods[17] - The company does not undertake any obligation to update forward-looking statements unless required by applicable law[21]

Financial Performance - Adjusted net profit for Q1 2023 was RMB 1,919.8 million, representing a year-on-year growth of 82.1%[4] - Revenue for Q1 2023 was RMB 8,983.2 million, up 13.7% from RMB 7,904.1 million in the same period last year[4] - Gross profit for Q1 2023 was RMB 2,523.4 million, a 55.8% increase compared to RMB 1,619.5 million in Q1 2022[4] - Net profit for Q1 2023 was RMB 1,664.8 million, reflecting a 90.2% increase from RMB 875.5 million in Q1 2022[4] - Adjusted EBITDA for Q1 2023 was RMB 3,133.0 million, up 56.5% from RMB 2,002.1 million in the same period last year[4] - Basic and diluted earnings per ADS for Q1 2023 were RMB 2.07 and RMB 2.03, respectively, representing growth of 84.8% and 81.3% year-on-year[4] - The gross profit was RMB 2,523.4 million (USD 367.4 million), a 55.8% increase from RMB 1,619.5 million year-on-year, with the gross margin improving from 20.5% to 28.1%[11] - Operating profit reached RMB 1,950.4 million (USD 284.0 million), up 74.7% from RMB 1,116.3 million in the same period last year, with the operating margin increasing from 14.1% to 21.7%[11] - Net profit attributable to ordinary shareholders for Q1 2023 was RMB 1,670,336, a 84.5% increase from RMB 906,270 in Q1 2022[24] Market Position and Growth - Total package volume reached 6.3 billion, with market share increasing by 1.8 percentage points to 23.4%[3] - The company raised its full-year business volume growth guidance to 20%-24%[3] - The company maintained a market share of 23.4%, an increase of 1.8 percentage points[7] - The company plans to increase its full-year business volume guidance due to sustained industry growth momentum[7] - The total package volume reached 6.297 billion, an increase of 20.5% compared to 5.226 billion in the same period of 2022[5] - Core express service revenue grew by 16.1%, driven by a 20.5% increase in package volume and a 3.7% decrease in average revenue per package[8] Operating Costs and Expenses - Operating costs totaled RMB 6.460 billion (USD 940.6 million), an increase of 2.8% from RMB 6.285 billion in the previous year[9] - The average cost per package decreased by 12.8%, contributing to improved profitability[7] - The cost of trunk transportation was RMB 3,181.8 million (USD 463.3 million), an increase of 7.7% compared to RMB 2,954.0 million in the same period last year[10] - The total operating expenses were RMB 573.0 million (USD 83.4 million), up from RMB 503.2 million in the same period last year[11] Cash Flow and Investments - Operating cash flow for Q1 2023 was RMB 2,738.0 million, compared to RMB 1,105.4 million in Q1 2022[4] - The net cash generated from operating activities was RMB 2,738.0 million (USD 398.7 million), compared to RMB 1,105.4 million in the same period last year[12] - The net cash used in investing activities for Q1 2023 was RMB (5,866,601) thousand, compared to RMB (3,314,751) thousand in Q1 2022, indicating an increase in investment outflows[26] - The net cash generated from financing activities decreased to RMB 840,572 thousand in Q1 2023 from RMB 2,580,645 thousand in Q1 2022, a decline of approximately 67%[26] - The total cash, cash equivalents, and restricted cash at the end of Q1 2023 was RMB 10,306,095 thousand, down from RMB 12,603,087 thousand at the end of 2022, a decrease of about 18%[27] Operational Metrics - The number of sorting centers reached 97, with 88 operated by the company and 9 by network partners[5] - The number of direct network partners was over 5,900 as of March 31, 2023[5] - The number of automated sorting equipment in operation increased to 454 sets as of March 31, 2023, compared to 422 sets a year earlier[10] Risks and Challenges - The company has a significant reliance on third-party e-commerce platforms, which poses inherent risks[23] - The company faces intense competition that may adversely affect its operational performance and market share[23] - The company’s financial data is subject to inherent risks and uncertainties that could lead to actual results differing significantly from forward-looking statements[23] - The company’s brand establishment and ability to withstand negative reporting are critical for its market position[23] 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[17] - The management believes that these non-GAAP metrics help identify fundamental business trends and provide useful information regarding operational performance[17] - The company encourages investors to review its financial data comprehensively rather than relying on a single financial metric[17] - The company emphasizes that non-GAAP metrics should not be considered as alternatives to net income or other performance indicators[17] Future Plans - The company plans to continue expanding its market presence and investing in new technologies and products[24] - The earnings conference call is scheduled for May 17, 2023, at 8:30 PM Eastern Time[19] - The company has authorized a share repurchase plan with a total value of up to USD 1.5 billion, effective until June 30, 2024[15]

Share Structure and Governance - As of March 31, 2023, the total number of Class A ordinary shares outstanding is 609,171,784, which excludes 11,671,525 Class A ordinary shares repurchased in the form of American Depositary Shares[7]. - The number of Class B ordinary shares held by Mr. Lai Meisong and Zto Lms Holding Limited is 206,100,000, representing approximately 77.6% of the voting power for shareholder voting matters[3]. - If all Class B ordinary shares are converted into Class A ordinary shares, the company will issue 206,100,000 Class A ordinary shares, which would account for approximately 33.9% of the total outstanding Class A ordinary shares as of March 31, 2023[4]. - The company operates under a dual-class voting structure, where each Class A ordinary share has one vote and each Class B ordinary share has ten votes[2]. - The company emphasizes the potential risks associated with investing in companies with a dual-class voting structure, as the interests of different voting power beneficiaries may not always align with those of other shareholders[4]. - The company has a significant concentration of voting power, which may impact corporate governance and decision-making processes[4]. Financial Performance - In the fiscal years 2020, 2021, and 2022, revenue contributions from ZTO Express accounted for 94.1%, 97.7%, and 90.4% of the company's total revenue respectively[13]. - Total revenue for 2022 reached RMB 35,376,996, an increase of 16.5% compared to RMB 30,405,839 in 2021[62]. - Gross profit for 2022 was RMB 9,039,275, representing a gross margin of approximately 25.5%[62]. - Operating profit for 2022 was RMB 7,736,481, up 40.4% from RMB 5,503,011 in 2021[62]. - Net profit attributable to shareholders for 2022 was RMB 6,809,056, a growth of 43.5% compared to RMB 4,754,827 in 2021[62]. - The company reported a net income of RMB 2 billion for the last fiscal year, a 30% increase compared to the previous year[27]. Cash Flow and Investments - The company reported a cash transfer of RMB 2,580 million to its Cayman, British Virgin Islands, and Hong Kong subsidiaries in 2022, compared to RMB 1,250 million in 2021 and RMB 10,011 million in 2020[54]. - The total cash received by the company's subsidiaries from the company was RMB 20,739 million in 2022, an increase from RMB 15,974 million in 2021 and RMB 11,646 million in 2020[54]. - The company has established a cash transfer mechanism through loans and investments among its subsidiaries, ensuring liquidity within the group despite restrictions on direct capital contributions[50]. - The company reported a net cash inflow from operating activities of RMB 11,479,308 for 2022, compared to RMB 7,220,217 in 2021[64]. Regulatory and Legal Risks - The company faces various legal and operational risks related to conducting business in China, including regulatory approvals and potential changes in laws[16]. - The company is subject to the new regulations from the China Securities Regulatory Commission regarding overseas financing activities, which require filing procedures for future securities issuance outside of mainland China[47]. - The company may face penalties from the China Securities Regulatory Commission if it fails to comply with the new overseas listing regulations, potentially impacting its business and financial performance[47]. - The company faces regulatory risks related to providing loans and direct investments to its Chinese entities, which may significantly impact liquidity and the ability to expand operations[55]. - The company is subject to significant regulatory scrutiny from the Chinese government, which could limit its ability to issue securities and impact investor confidence[94]. Market and Operational Strategy - The company expects a continued growth trajectory in the Chinese express delivery market, projecting a market growth rate of 15% annually over the next five years[27]. - The company plans to expand its service network by adding 1,000 new delivery points in key urban areas by the end of the next fiscal year[27]. - The company is investing RMB 500 million in new technology to enhance package sorting and tracking capabilities, aiming to reduce delivery times by 25%[27]. - The company is exploring potential mergers and acquisitions to strengthen its market position and expand its service offerings[27]. - The company plans to diversify its service offerings and expand its customer base, which may involve substantial financial and management resources[125]. Operational Efficiency and Challenges - The average cost per package decreased to RMB 5.00, down from RMB 6.00 in the previous year, indicating improved operational efficiency[29]. - The company relies heavily on sorting centers and network partners for operational efficiency, with potential service disruptions posing significant risks to business operations[112]. - The company faces risks related to network partners' performance, which could impact customer satisfaction and brand reputation[105]. - The company has significantly increased technology spending, but it may not fully meet the growing business demands, risking competitive disadvantage[113]. - The company’s operational performance relies on key metrics such as package volume and unit cost, which may differ from third-party estimates, potentially impacting its reputation and business[163]. Compliance and Cybersecurity - The company must comply with complex and evolving laws regarding cybersecurity and data protection, with potential breaches harming its reputation and operational performance[163]. - The company is subject to the Data Security Law, which mandates security review procedures for data activities that may affect national security, effective from September 1, 2021[166]. - The company must comply with the Cybersecurity Review Measures, which require critical information infrastructure operators to undergo cybersecurity reviews when procuring products and services that may impact national security[166]. - The company faces potential significant adverse impacts on future financing activities if it fails to comply with national security laws related to foreign investment and data security[172]. Human Resources and Labor Costs - As of December 31, 2022, the company employed 24,888 employees and over 59,000 outsourced personnel, indicating a labor-intensive operational model[115]. - The company anticipates continued increases in labor costs due to competition for workforce stability and rising wages, particularly during peak promotional periods[115]. - Attracting, training, and retaining qualified personnel is critical for the company's future success, particularly in the express delivery and e-commerce sectors[149]. Competitive Landscape - The competitive landscape includes major domestic express companies, with pricing pressures leading to potential declines in market share and profitability[108]. - Major e-commerce platforms like Alibaba and JD may develop their own delivery capabilities, posing a threat to the company's market share[108]. - The company may need to subsidize network partners to maintain competitiveness, which could negatively affect gross margins[108]. Strategic Partnerships and Acquisitions - The company has a strategic partnership with Alibaba and Cainiao Network, which involved an investment of $1.38 billion for approximately 10% equity, highlighting the importance of this relationship for future operations[102]. - The company made a strategic investment of approximately $168 million to acquire about 15% equity in Cainiao Station, enhancing its delivery capabilities[175]. Environmental and Geopolitical Factors - The ongoing geopolitical tensions, such as the conflict between Ukraine and Russia, have led to increased fuel prices, potentially adversely affecting the company's gross margin[155]. - The company is sensitive to the economic conditions in China and globally, with any severe or prolonged downturn potentially causing significant adverse effects on its business and financial condition[160].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 根據不同投票權架構，我們的股本包括A類普通股及B類普通股。對於需要股東投票的所有事 項，A類普通股持有人每股可投1票，而B類普通股持有人則每股可投10票。股東及有意投資者 務請留意投資不同投票權架構公司的潛在風險。我們的美國存託股（每股美國存託股代表一股A 類普通股）於美國紐約證券交易所上市，代碼為ZTO。 ZTO Express (Cayman) Inc. 中通快遞（開曼）有限公司 （於開曼群島註冊成立以不同投票權控制的有限責任公司） （股份代號：2057） 2022年第四季度及2022財政年未經審計財務業績公告 我們在此公佈截至2022年12月31日止第四季度及2022財政年的未經審計財 務業績（「2022 財政年業績公告」）。2022財政年業績公告可於香港聯交所網站 www.hkexnews.hk及我們的網站zto.investorroom.com閱覽。 承董事會命 中通快遞（開曼）有限公司 賴梅松 ...

Financial Performance - Revenue for the second quarter was RMB 8,656.7 million (USD 1,292.4 million), an 18.2% increase from RMB 7,325.1 million in the same quarter of 2021[5] - Adjusted net profit grew by 38.2% to RMB 1,758.7 million (USD 262.6 million), compared to RMB 1,272.2 million in the same quarter of 2021[5] - The gross profit was RMB 2,202.8 million (USD 328.9 million), reflecting a 31.6% increase from RMB 1,673.6 million in the same quarter of 2021[5] - Operating cash flow for the quarter was RMB 3,780.8 million (USD 564.5 million), up from RMB 1,932.4 million in the same quarter of 2021[5] - The adjusted EBITDA was RMB 2,892.0 million (USD 431.8 million), a 36.0% increase from RMB 2,125.7 million in the same quarter of 2021[5] - Operating profit rose by 36.4% to RMB 1,985.5 million (USD 296.4 million) from RMB 1,455.7 million in the same period last year, with an operating margin increase from 19.9% to 22.9%[15] - Net profit increased by 38.2% to RMB 1,758.7 million (USD 262.6 million) compared to RMB 1,272.2 million in the same period last year[16] - The company reported a net profit of RMB 2,711,451 for the six months ended June 30, 2022, compared to RMB 1,825,797 for the same period in 2021, marking a growth of approximately 48.6%[35] Market and Operational Metrics - The company reported a package volume of 6.203 billion, representing a 7.5% increase compared to the same period in 2021[6] - The company's market share increased by 2 percentage points to 23%[4] - The total package volume reached 6.2 billion, with a market share increase of 2.0 percentage points to 23.0%[7] - Core express business unit price increased by 10.5% year-on-year, contributing to an 18.8% revenue growth in core express services[9] - The number of sorting centers reached 98, with 87 operated by the company and 11 by network partners[6] - As of June 30, 2022, the company had approximately 11,000 owned vehicles, with 9,250 being high-capacity models[6] Cost and Expense Management - Operating costs rose by 14.2% to RMB 6.5 billion (USD 963.5 million), driven by increased transportation and sorting center operational costs[10] - Total operating expenses were RMB 217.3 million (USD 32.4 million), slightly down from RMB 218.0 million in the same period last year[15] - Sales, general and administrative expenses increased by 16.0% to RMB 456.9 million (USD 68.2 million) from RMB 394.0 million in the same period last year, primarily due to increased compensation and benefits[15] Cash Flow and Investments - Net cash flow from operating activities was RMB 3,780.8 million (USD 564.5 million), significantly higher than RMB 1,932.4 million in the same period last year[17] - The company reported a net cash used in investing activities of RMB (6,924,369) for the six months ended June 30, 2022, compared to RMB (4,556,458) for the same period in 2021, indicating an increase in investment outflows[32] - Capital expenditures were RMB 1.5 billion, with plans to adjust investment strategies based on demand[7] Shareholder Value and Future Outlook - The company announced a share repurchase plan with authorization to repurchase up to USD 1 billion of its Class A ordinary shares, extending the plan until June 30, 2023[19] - The company aims to continue expanding market share and enhancing profitability while supporting network partners to improve their profit quality[7] - The company maintains its annual business volume guidance, expecting a total package volume of 24.96 to 25.86 billion pieces in 2022, representing a year-over-year growth of 12% to 16%[18] Tax and Financial Position - The overall effective tax rate increased by 3.4 percentage points to 25% due to a higher proportion of income from local operating entities compared to those eligible for a preferential tax rate of 15%[16] - As of June 30, 2022, total assets amounted to RMB 68,506,030, an increase from RMB 62,772,343 as of December 31, 2021, representing a growth of approximately 9.8%[31] - Total current liabilities as of June 30, 2022, were RMB 16,977,336, compared to RMB 12,996,315 as of December 31, 2021, marking an increase of 30.5%[31] - The company’s total liabilities as of June 30, 2022, were RMB 17,768,287, an increase from RMB 13,844,762 as of December 31, 2021, representing a growth of 28.3%[31] - The total equity as of June 30, 2022, was RMB 50,737,743, a decrease from RMB 48,927,581 as of December 31, 2021, reflecting a decline of 1.6%[31] Earnings Per Share - The basic and diluted earnings per American Depositary Share (ADS) were RMB 2.23 (USD 0.33), a 42.9% increase from RMB 1.56 in the same quarter of 2021[5] - Basic earnings per share for the three months ended June 30, 2022, was RMB 2.23, up from RMB 1.56 in the same period of 2021, indicating a growth of approximately 42.7%[35] - Diluted earnings per share for the six months ended June 30, 2022, was RMB 3.57, compared to RMB 1.56 for the same period in 2021, showing an increase of about 128.2%[35]

Share Structure and Voting Rights - As of March 31, 2022, the voting power of different voting rights beneficiaries accounted for approximately 77.7% of the total voting rights in the company, with 206,100,000 Class B shares and 8,431,230 Class A shares held[2]. - Each Class B share can be converted into one Class A share, which would result in the issuance of 206,100,000 Class A shares, representing about 34.1% of the total outstanding Class A shares as of March 31, 2022[2]. - The company operates under a dual-class share structure, where Class A shares have one vote per share and Class B shares have ten votes per share, allowing certain beneficiaries to exert significant control over shareholder decisions[1]. - As of December 31, 2021, the company had 808,448,289 shares of common stock outstanding, consisting of 602,348,289 Class A shares and 206,100,000 Class B shares[6]. Revenue and Financial Performance - Revenue contribution from Zhongtong Express for the fiscal years 2019, 2020, and 2021 was 97.1%, 94.1%, and 97.7% of total revenue, respectively[10]. - Total revenue for the year reached RMB 30,405,839, with a gross profit of RMB 6,589,377, resulting in a gross margin of approximately 21.7%[55]. - Operating profit for the year was RMB 5,503,011, reflecting an increase of 863,542 compared to the previous year[55]. - Net profit attributable to shareholders was RMB 4,754,827, representing a year-over-year increase of 746,136[55]. - Basic earnings per share for the year was RMB 5.80, while diluted earnings per share was also RMB 5.80[55]. - Total revenue for the year ended December 31, 2021, was RMB 30,405,839 thousand, an increase from RMB 25,214,290 thousand in 2020, representing a growth of approximately 20.0%[99]. - Net profit for the year ended December 31, 2021, was RMB 4,701,327 thousand, compared to RMB 4,326,446 thousand in 2020, reflecting an increase of about 8.7%[99]. Risks and Regulatory Environment - The company faces significant risks related to its contractual arrangements with Zhongtong Express, which may be deemed non-compliant with Chinese laws[11]. - Regulatory uncertainties in China could severely impact the company's ability to execute its business model and may lead to substantial financial losses[12]. - The company is subject to various legal and operational risks associated with conducting business in China, including foreign investment approvals and cybersecurity regulations[12]. - The company has not undergone PCAOB inspections for its auditors, which poses additional risks to its operations[12]. - The company’s structure may prevent direct ownership interests in Zhongtong Express, raising concerns about potential penalties or loss of business interests[11]. - The company’s American Depositary Shares (ADS) may significantly decline in value or become worthless due to regulatory actions in China[11]. - The company is subject to risks related to doing business in China, which could significantly impact investment value[13]. Operational Structure and Subsidiaries - The company operates as a Cayman Islands holding company, with its business primarily conducted through subsidiaries in China[10]. - The company operates through a variable interest entity structure, which may face regulatory scrutiny from the Chinese government, potentially impacting financial performance[26]. - The company has established a series of agreements to ensure operational control over its subsidiary, which includes a service agreement that entitles it to 100% of the net profits from ZTO Express[32]. - The company operates primarily through its Chinese subsidiary, ZTO Express, which has obtained necessary licenses and permits from the Chinese government, including express delivery and road transport operating licenses[36]. Cash Flow and Dividends - The total cash transfers from the parent company to its subsidiaries amounted to RMB 10,011 million in 2020 and RMB 1,250 million in 2021, while the cash transfers from the Hong Kong subsidiary to the Chinese subsidiary were RMB 6,041 million in 2020 and RMB 3,671 million in 2021[45]. - Dividends paid to the parent company shareholders were USD 189.1 million, USD 233.5 million, and USD 208.4 million for the years ending December 31, 2019, 2020, and 2021, respectively[14]. - The company's ability to pay dividends may depend on future dividends from its Chinese subsidiaries[14]. - The parent company has cumulatively contributed RMB 15,080.5 million as of December 31, 2021, with no shareholder loans provided to the Chinese subsidiary during 2019, 2020, and 2021[45]. Market and Competitive Landscape - The company relies heavily on the development of the e-commerce industry and the rise of new retail in China for its business growth[105]. - The company faces intense competition, which may adversely affect its operating performance and market share[105]. - The company’s technology systems are crucial for its operations, and failure to optimize or develop new technologies could harm its business and growth prospects[105]. - The company is sensitive to macroeconomic conditions, with potential adverse effects on consumer confidence and spending during economic downturns[113]. - The company may face challenges in managing indirect network partners, as it does not have direct agreements with them, potentially affecting service delivery[116]. Compliance and Legal Challenges - The company is required to comply with various regulations regarding its express delivery operations, including timely registration of delivery points and proper handling of user information[138]. - Non-compliance with the proposed overseas issuance regulations could result in fines ranging from RMB 1 million to 10 million, or even suspension of operations[37]. - The company faces significant uncertainties regarding compliance with current and future Chinese laws and regulations, which could adversely impact its operational performance[146]. - The company must ensure that its network partners comply with local laws to protect its brand reputation and financial stability[143]. Technology and Innovation - The company plans to expand its market presence and invest in new technologies to enhance operational efficiency[56]. - The company has increased its technology spending significantly, but this may not be sufficient to meet the growing business demands, potentially leading to economic losses[123]. - The company’s operational performance is highly dependent on the reliability and performance of its integrated technology systems[123]. Labor and Human Resources - As of December 31, 2021, the company employed 23,865 employees and over 57,000 outsourced personnel, indicating a labor-intensive operational model[124]. - The company anticipates continued increases in labor costs due to a tightening labor market, with rising salaries and employee benefits expected[124]. - Labor disputes have occurred with network partners, but none have had a significant adverse impact on the company; however, future disputes could disrupt operations and reduce revenue[126]. Environmental and Safety Concerns - Transportation safety risks are inherent in the company's operations, including potential accidents that could result in personal injury and property loss[130]. - The company faces potential damage to its reputation and business due to unethical or anti-competitive behavior within its network, which may lead to increased compliance costs or business losses if the Chinese government intensifies its crackdown on such practices[176]. International Expansion and Strategic Investments - The company plans to explore international expansion, which may involve risks such as changes in local economic and political conditions, and potential impacts on profitability[173]. - The company made a strategic investment of approximately $168 million to acquire about 15% equity in Cainiao Station, enhancing its delivery network capabilities[171]. Economic Impact and COVID-19 - The ongoing COVID-19 pandemic continues to negatively affect both the Chinese and global economies, with uncertainties persisting since before the outbreak[163]. - The company’s financial performance is significantly dependent on the future developments of the COVID-19 pandemic, which remains unpredictable[190].

[Financial and Operational Highlights](index=2&type=section&id=Financial%20and%20Operational%20Highlights) ZTO Express reported a 25.6% increase in Q2 2021 parcel volume and 14.4% revenue growth to RMB 7.33 billion, yet adjusted net income declined 12.5% to RMB 1.27 billion, despite strong operating cash flow Key Financial Indicators for Q2 2021 | Metric | 2021 Q2 | 2020 Q2 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 7.325 billion | RMB 6.402 billion | +14.4% | | Gross Profit | RMB 1.674 billion | RMB 1.769 billion | -5.4% | | Net Income | RMB 1.272 billion | RMB 1.454 billion | -12.5% | | Adjusted Net Income | RMB 1.272 billion | RMB 1.454 billion | -12.5% | | Basic and Diluted EPS per ADS | RMB 1.56 | RMB 1.85 | -15.7% | | Net Cash Flow from Operating Activities | RMB 1.932 billion | RMB 1.252 billion | +54.3% | Key Operational Data for Q2 2021 | Metric | 2021 Q2 | 2020 Q2 | YoY Change | | :--- | :--- | :--- | :--- | | Parcel Volume | 5.772 billion parcels | 4.595 billion parcels | +25.6% | | Market Share | 21.0% | - | - | | Pickup/Delivery Outlets | >30,100 units | - | - | | Line-haul Vehicle Fleet | ≈10,300 units | - | - | | High-capacity Vehicles | ≈8,150 units | - | - | [Management Commentary and Strategy](index=3&type=section&id=Management%20Commentary%20and%20Strategy) Management highlighted a strategic focus on balancing service quality, volume, and profit, prioritizing profitable parcels which slightly impacted market share but ensured strong profitability and network stability, with future investments targeting capacity and operational efficiency - CEO Meisong Lai stated that the company's choice to prioritize profitable parcels over short-term market share gains was the main reason for the slight decline in market share this quarter, which ensured strong profitability and network partner stability[7](index=7&type=chunk) - Management anticipates China's express delivery industry will reach over **400 million parcels daily** in the next 2-3 years, with capacity and operational efficiency being key determinants of success, where ZTO has established an efficiency advantage[7](index=7&type=chunk) - CFO Huiping Yan stated that capital expenditure for the quarter was **RMB 2.2 billion**, with nearly 70% allocated to land acquisition and upgrading sorting centers, aiming to strengthen core express delivery infrastructure and develop integrated logistics service capabilities[7](index=7&type=chunk) [Detailed Financial Performance](index=4&type=section&id=Detailed%20Financial%20Performance) Total revenue grew 14.4% driven by core express services, but operating costs surged 22.0% due to policy changes and rising fuel prices, resulting in a gross margin decline from 27.6% to 22.8% and a 12.5% decrease in net income [Revenue Analysis](index=4&type=section&id=Revenue%20Analysis) Total revenue reached RMB 7.33 billion, up 14.4%, driven by core express services' 18.1% growth from increased parcel volume despite lower average prices, while freight forwarding revenue declined 32.9% Q2 2021 Revenue Breakdown (Millions of RMB) | Business Segment | 2021 Q2 | 2020 Q2 | YoY Change | | :--- | :--- | :--- | :--- | | Express Delivery Services | 6,652.9 | 5,540.7 | +20.1% | | Freight Forwarding Services | 313.6 | 467.1 | -32.9% | | Sale of Materials | 314.1 | 321.2 | -2.2% | | Others | 44.4 | 73.5 | -39.6% | | **Total Revenue** | **7,325.1** | **6,402.4** | **+14.4%** | - The growth in core express delivery service revenue was primarily driven by a **25.6% year-over-year increase in parcel volume**, partially offset by a **5.9% decrease in average selling price per parcel**[8](index=8&type=chunk) [Cost Analysis](index=4&type=section&id=Cost%20Analysis) Total operating costs increased 22.0% to RMB 5.65 billion, driven by a 38.4% surge in line-haul transportation costs due to policy changes and fuel prices, and a 28.6% rise in sorting center costs from wage increases and automation Q2 2021 Operating Cost Breakdown (Millions of RMB) | Cost Item | 2021 Q2 | 2020 Q2 | YoY Change | | :--- | :--- | :--- | :--- | | Line-haul Transportation Costs | 2,763.3 | 1,996.6 | +38.4% | | Sorting Center Operating Costs | 1,612.7 | 1,254.3 | +28.6% | | Freight Forwarding Costs | 266.2 | 416.7 | -36.1% | | Other Costs | 911.1 | 853.3 | +6.8% | | **Total Operating Costs** | **5,651.4** | **4,633.3** | **+22.0%** | - Per-parcel line-haul transportation cost increased by **10.2% to RMB 0.48**, primarily due to the combined impact of the expiration of toll exemption policies in the prior year period and rising fuel prices[10](index=10&type=chunk) - As of June 30, 2021, the number of automated sorting equipment in operation increased to **361 sets** from 282 sets in the prior year period, contributing to higher depreciation and amortization costs related to sorting centers[10](index=10&type=chunk) [Profit and Profitability](index=5&type=section&id=Profit%20and%20Profitability) Gross profit declined 5.4% to RMB 1.67 billion and gross margin fell to 22.8% due to faster cost growth, leading to an 11.6% decrease in operating profit and a 12.5% decline in net income to RMB 1.27 billion - Gross margin decreased from **27.6%** in the prior year period to **22.8%**, primarily due to the combined impact of a **5.9% decrease in average selling price per parcel** and a **1.7% increase in per-parcel cost** for core express delivery services[12](index=12&type=chunk) - Operating profit was **RMB 1.46 billion**, a **11.6% year-over-year decrease**; operating margin declined from **25.7% to 19.9%**[12](index=12&type=chunk) - Net income was **RMB 1.27 billion**, a **12.5% decrease** from RMB 1.45 billion in the prior year period[13](index=13&type=chunk) [Earnings Per Share (EPS)](index=5&type=section&id=Earnings%20Per%20Share%20(EPS)) Basic and diluted earnings per American Depositary Share (ADS) attributable to ordinary shareholders were RMB 1.56 this quarter, a decrease from RMB 1.85 in the prior year period Earnings Per American Depositary Share (RMB) | Metric | 2021 Q2 | 2020 Q2 | | :--- | :--- | :--- | | Basic and Diluted EPS per ADS | 1.56 | 1.85 | | Adjusted Basic and Diluted EPS per ADS | 1.56 | 1.85 | [Business Outlook](index=5&type=section&id=Business%20Outlook) The company maintained its full-year 2021 parcel volume guidance of 22.95 billion to 23.80 billion parcels, representing a 35% to 40% year-over-year growth - The company maintained its full-year 2021 parcel volume guidance unchanged, expecting a range of **22.95 billion to 23.80 billion parcels**, representing a **35%-40% year-over-year increase**[13](index=13&type=chunk) [Capital Management: Share Repurchase Program](index=6&type=section&id=Share%20Repurchase%20Program) The board approved increasing the share repurchase program to $1 billion and extending it to June 30, 2023, with approximately 17.52 million ADSs repurchased at an average price of $23.17 as of June 30, 2021 - The share repurchase program size was increased from **$500 million to $1 billion**, with its validity extended to **June 30, 2023**[15](index=15&type=chunk) - As of June 30, 2021, the company had cumulatively repurchased **17,519,583 ADSs** at an average purchase price of **$23.17**[15](index=15&type=chunk) [Appendix: Financial Statements](index=9&type=section&id=Appendix%3A%20Financial%20Statements) This section provides detailed unaudited financial statements, including consolidated comprehensive income, balance sheets, cash flows, and reconciliations of GAAP to Non-GAAP results [Unaudited Consolidated Statement of Comprehensive Income](index=9&type=section&id=Unaudited%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents detailed revenue, cost, expense, and profit data for the three and six months ended June 30, 2021 - For detailed unaudited consolidated statement of comprehensive income data, please refer to the original document[27](index=27&type=chunk) [Unaudited Consolidated Balance Sheets](index=10&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) This statement lists the company's assets, liabilities, and shareholders' equity as of June 30, 2021, and December 31, 2020 - For detailed unaudited consolidated balance sheet data, please refer to the original document[28](index=28&type=chunk) [Unaudited Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) This statement illustrates the company's cash flows from operating, investing, and financing activities for the three and six months ended June 30, 2021 - For detailed unaudited consolidated statements of cash flows data, please refer to the original document[29](index=29&type=chunk) [Reconciliation of GAAP and Non-GAAP Results](index=12&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Results) This section provides detailed reconciliations of Non-GAAP financial metrics, including adjusted net income and EBITDA, to their most comparable GAAP measures - Provides detailed calculations for reconciling GAAP net income to Non-GAAP adjusted net income, adjusted EBITDA, and adjusted earnings per share[31](index=31&type=chunk)[33](index=33&type=chunk)

Financial Performance - ZTO Express reported a total revenue of approximately $1.5 billion for the fiscal year ended December 31, 2020, representing a year-over-year increase of 30%[3]. - The company reported a net income of approximately $300 million for 2020, reflecting a net profit margin of 20%[3]. - The company reported a total revenue of RMB 100 billion for the fiscal year ending December 31, 2020, representing a year-over-year increase of 15%[10]. - The gross profit margin for the year was reported at 25%, a slight increase from 24% in 2019[10]. - The company anticipates a revenue guidance of RMB 115 billion for the fiscal year 2021, indicating a growth target of 15%[8]. - Total revenue for the latest quarter reached RMB 25,214,290, with a gross profit of RMB 5,837,106, resulting in a gross margin of approximately 23%[12]. - Operating profit for the quarter was RMB 4,754,367, reflecting a decrease of 13% compared to the previous quarter[12]. - Net profit attributable to shareholders was RMB 4,312,213, with earnings per share (EPS) of RMB 5.42, down from RMB 7.24 in the previous quarter[12]. Package Volume and Logistics - The company processed approximately 4.7 billion packages in 2020, an increase of 26% compared to the previous year[3]. - The total package volume handled by the company reached 10 billion packages in 2020, reflecting a growth of 20% compared to the previous year[10]. - Over 90% of the company's total package volume in December 2020 came from e-commerce platforms, indicating a strong reliance on the growth of the Chinese e-commerce industry[16]. - As of December 31, 2020, the company operated approximately 30,000 pickup/delivery points and had over 5,350 direct network partners, emphasizing its extensive operational network[19]. - The company has established a comprehensive and reliable delivery network, supported by partnerships with network operators[136]. - The company currently operates over 68,000 end stations in China, which serve as pickup locations for recipients[146]. Growth and Expansion Plans - ZTO Express expects revenue growth to continue in 2021, projecting an increase of 25% to 30% year-over-year[3]. - The company plans to expand its service network by adding 1,000 new service stations in 2021 to enhance its logistics capabilities[3]. - The company plans to expand its service network by adding 1,000 new delivery points in 2021, aiming to enhance customer accessibility[8]. - The company aims to enhance its market share in the e-commerce logistics sector, targeting a 5% increase in market penetration by the end of 2021[3]. - The company is exploring potential mergers and acquisitions to strengthen its competitive position in the logistics industry[3]. - The company is exploring potential acquisitions in the logistics sector to strengthen its competitive position in the market[8]. Technology and Innovation - ZTO Express is investing in technology development, focusing on automation and artificial intelligence to improve operational efficiency[3]. - The company is investing RMB 2 billion in new technology development to improve sorting efficiency and delivery speed[8]. - The company has developed proprietary algorithms for order scheduling and forecasting, capable of processing up to 100 million orders per day[155]. - The company utilizes automated hardware and software solutions to improve operational efficiency, including dynamic weighing machines and image-based learning algorithms for package inspection[143]. - The proprietary Zhongtian system includes over a hundred modules for package sorting, transportation, and tracking management, which is crucial for operational efficiency[153]. Sustainability Initiatives - The company is committed to sustainability initiatives, aiming to reduce carbon emissions by 15% over the next five years[3]. - The company has established a special team to lead environmental sustainability initiatives, promoting the use of green, recyclable, and biodegradable packaging[161]. - The company has implemented energy-efficient equipment in sorting, transportation, and distribution processes to reduce environmental impact[161]. - The company actively promotes rural market development through the "Express Delivery to Villages" initiative, enhancing logistics services in rural areas[161]. Risks and Challenges - The company faces significant risks from various factors affecting the e-commerce sector, including consumer spending ability, regulatory changes, and macroeconomic conditions[17]. - The company is vulnerable to external factors such as economic downturns, inflation, and geopolitical issues, which could adversely affect consumer confidence and spending behavior[17]. - The company may face increased operational costs due to compliance with the demands and regulations of third-party platforms like Alibaba[18]. - The competitive landscape in the Chinese express delivery industry may lead existing network partners to switch to competitors, posing a risk to service continuity[20]. - The company faces intense competition from leading domestic express delivery companies, which may adversely affect its operational performance and market share[21]. Regulatory Compliance - The company is subject to various regulations regarding its express delivery operations, including compliance with the Express Delivery Interim Regulations, which mandate timely registration of delivery points and proper handling of user information[35]. - The company must comply with the E-commerce Law, which includes obligations for logistics service providers to adhere to service standards and use environmentally friendly packaging materials[36]. - The company is required to report any incidents of user information leakage to the relevant postal authorities immediately[35]. - The company must comply with various construction requirements under Chinese laws and regulations, including obtaining necessary permits before commencing construction projects[182]. Financial Position and Investments - Cash and cash equivalents increased to RMB 14,212,778, indicating a strong liquidity position[13]. - The company generated net cash flow from operating activities of RMB 4,950,749, demonstrating robust operational efficiency[14]. - The company reported a net cash flow from financing activities of RMB 8,337,407, highlighting strong capital inflow[14]. - The company has authorized a share repurchase plan with a maximum value of $1 billion, extending the plan until June 30, 2023[133]. Human Resources and Labor Relations - As of December 31, 2020, the company employed 22,536 employees and over 57,000 outsourced personnel, indicating a labor-intensive business model[25]. - The company has established a comprehensive talent development mechanism, including a management trainee program to cultivate future leaders[161]. - The company provides ongoing training and performance evaluations for network partners to ensure high-quality customer service[152]. Shareholder and Governance Issues - The company’s dual-class share structure allows B class shareholders to have ten votes per share, while A class shareholders have one vote per share, leading to concentrated voting power[108]. - The concentration of ownership may hinder potential mergers or acquisitions, affecting the ability of other shareholders to realize premium value on their shares[108]. - The company’s organizational documents include provisions that may hinder third parties from acquiring control, impacting shareholder rights[116]. Market and Economic Conditions - The company is sensitive to changes in the economic conditions and political policies in China, which could impact its overall growth rate[53]. - The company’s ability to raise additional capital on favorable terms may be limited, especially in disappointing operational performance scenarios[50]. - The company faces significant adverse impacts on its business and financial condition due to potential severe or prolonged economic downturns in China or globally[53].