Annual Volume Increased to 34.0 Billion Parcels
RMB10.2 Billion Full Year Adjusted Net Income Grew 12.7%
US$0.35 per Share Semi-Annual Dividend Announced
SHANGHAI, March 19, 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 fourth quarter and fiscal year ended December 31, 2024[1]. The Company grew parcel volume by 3.8 billion, or 12.6% year over year while maintaining high quality of service and customer satisfaction. Adjusted net income[2] increased 12.7% to reach RMB10.2 billion. Net cash generated from operating activities was RMB11,429.4 million.
Fourth Quarter 2024 Financial Highlights
- Revenues were RMB12,919.7 million (US$1,770.0 million), an increase of 21.7% from RMB10,619.4 million in the same period of 2023.
- Gross profit was RMB3,759.7 million (US$515.1 million), an increase of 20.2% from RMB3,128.2 million in the same period of 2023.
- Net income was RMB2,446.8 million (US$335.2 million), an increase of 10.7% from RMB2,209.8 million in the same period of 2023.
- Adjusted EBITDA[3] was RMB4,615.3 million (US$632.3 million), an increase of 26.4% from RMB3,651.8 million in the same period of 2023.
- Adjusted net income[2] was RMB2,733.3 million (US$374.5 million), an increase of 23.4% from RMB2,214.4 million in the same period of 2023.
- Basic and diluted net earnings per American depositary share ("ADS"[4]) were RMB2.97 (US$0.41) and RMB2.89 (US$0.40), an increase of 9.2% and 8.6% from RMB2.72 and RMB2.66 in the same period of 2023, respectively.
- Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders[5] were RMB3.32 (US$0.45) and RMB3.24 (US$0.44), an increase of 21.6% and 21.3% from RMB2.73 and RMB2.67 in the same period of 2023, respectively.
- Net cash provided by operating activities was RMB2,806.3 million (US$384.5 million), compared with RMB3,923.3 million in the same period of 2023.
- Revenues were RMB44,280.7 million (US$6,066.4 million), an increase of 15.3% from RMB38,418.9 million in 2023.
- Gross profit was RMB13,717.1 million (US$1,879.2 million), an increase of 17.6% from RMB11,662.5 million in 2023.
- Net income was RMB8,887.6 million (US$1,217.6 million), an increase of 1.5% from RMB8,754.5 million in 2023.
- Adjusted EBITDA[3] was RMB16,354.9 million (US$2,240.6 million), an increase of 15.9% from RMB14,107.3 million in 2023.
- Adjusted net income[2] was RMB10,150.4 million (US$1,390.6 million), an increase of 12.7% from RMB9,005.9 million in 2023.
- Basic and diluted net earnings per American depositary share ("ADS"[4]) were RMB10.95 (US$1.50) and RMB10.70 (US$1.47), an increase of 1.1% and 0.9% from RMB10.83 and RMB10.60 in 2023.
- Adjusted basic and diluted net earnings per American depositary share attributable to ordinary shareholders were RMB12.52 (US$1.72) and RMB12.20 (US$1.67), an increase of 12.4% and 11.9% from RMB11.14 and RMB10.90 in 2023.
- Net cash provided by operating activities was RMB11,429.4 million (US$1,565.8 million), compared with RMB13,361.0 million in 2023.
- Parcel volume was 9,665 million, an increase of 11.0% from 8,705 million in the same period of 2023.
- Number of pickup/delivery outlets was over 31,000 as of December 31, 2024.
- Number of direct network partners was over 6,000 as of December 31, 2024.
- Number of self-owned line-haul vehicles was over 10,000 as of December 31, 2024.
- Out of the over 10,000 self-owned trucks, over 9,400 were high capacity 15 to 17-meter-long models as of December 31, 2024, compared to over 9,200 as of December 31, 2023.
- Number of line-haul routes between sorting hubs was over 3,900 as of December 31, 2024, which is similar to the same period last year.
- Number of sorting hubs was 95 as of December 31, 2024, among which 91 are operated by the Company and 4 by the Company's network partners.
| (1) An investor relations presentation accompanies this earnings release and can be found at http://zto.investorroom.com. |
| (2) Adjusted net income is a non-GAAP financial measure, which is defined as net income before share-based compensation expense and non-recurring items such as impairment of investments in equity investees, gain/(loss) on disposal of equity investment and subsidiary and corresponding tax impact which management aims to better represent the underlying business operations.
|
| (3) Adjusted EBITDA is a non-GAAP financial measure, which is defined as net income before depreciation, amortization, interest expenses and income tax expenses, and further adjusted to exclude the shared-based compensation expense and non-recurring items such as impairment of investments in equity investees, gain/(loss) on disposal of equity investment and subsidiary which management aims to better represent the underlying business operations. |
| (4) One ADS represents one Class A ordinary share. |
| (5) Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders is a non-GAAP financial measure. It is defined as adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted American depositary shares, respectively. |
Mr. Lai added, "As domestic economy slowly moves towards recovery, growth of China's express delivery industry was relatively robust. Consumers are motivated by the value-preposition associated with on-line purchases and the trend of spending downgrade persisted where parcel unit pricing continued to be under pressure. We estimate that the industry growth for the year will likely be around 15% for the year of 2025. We have re-anchored among our priority focuses of quality, volume and net profit, and it is paramount for us to achieve volume growth target above industry average for 2025."
Ms. Huiping Yan, Chief Financial Officer of ZTO, commented, "For the fourth quarter of 2024, ZTO's core express ASP increased 13 cents driven by improvements in key accounts' mix offsetting negative impact from lower per parcel weight and volume incentive increases. Combined unit sorting and transportation costs decreased approximately 6 cents through productivity initiatives. Our SG&A excluding share-based compensation was 5% of revenue compared to 6.6% last year. Cash flow from operating activities was 2.8 billion, and capital spending was 1.2 billion."
Ms. Yan added, "Slow to recover economic conditions caused a greater proportion of ecommerce packages being low-value or unprofitable. Between strategic value and economic value, we are making conscientious trade-off decisions to ensure short-term and long-term impacts are properly balanced. Profits driven by our unique competitive advantages, such as quality of services, scale and reach, operating efficiency and partner network stability, will remain intact. Meanwhile，we are increasing our effort to support and enable network partners' sustainable growth and prosperity. By expanding our leadership in volume market share, everyone under the ZTO brand can work better together to address market pricing pressure, last-mile cost increases, and any other challenges in the future."
| Fourth Quarter 2024 Unaudited Financial Results | |||||||||
| Three Months Ended December 31, | |||||||||
| 2023 | 2024 | ||||||||
| RMB | % | RMB | US$ | % | |||||
| (in thousands, except percentages) | |||||||||
| Express delivery services | 9,759,253 | 91.9 | 12,024,132 | 1,647,299 | 93.1 | ||||
| Freight forwarding services | 236,640 | 2.2 | 208,931 | 28,623 | 1.6 | ||||
| Sale of accessories | 579,138 | 5.5 | 646,675 | 88,594 | 5.0 | ||||
| Others | 44,403 | 0.4 | 39,964 | 5,476 | 0.3 | ||||
| Total revenues | 10,619,434 | 100.0 | 12,919,702 | 1,769,992 | 100.0 | ||||
| Three Months Ended December 31, | |||||||||
| 2023 | 2024 | ||||||||
| % of | % of | ||||||||
| RMB | revenues | RMB | US$ | revenues | |||||
| (in thousands, except percentages) | |||||||||
| Line-haul transportation cost | 3,964,208 | 37.3 | 3,913,823 | 536,192 | 30.3 | ||||
| Sorting hub operating cost | 2,257,047 | 21.3 | 2,543,707 | 348,486 | 19.7 | ||||
| Freight forwarding cost | 227,547 | 2.1 | 197,053 | 26,996 | 1.5 | ||||
| Cost of accessories sold | 162,227 | 1.5 | 196,941 | 26,981 | 1.5 | ||||
| Other costs | 880,156 | 8.3 | 2,308,459 | 316,257 | 17.9 | ||||
| Total cost of revenues | 7,491,185 | 70.5 | 9,159,983 | 1,254,912 | 70.9 | ||||
Line haul transportation cost was RMB3,913.8 million (US$536.2 million), a decrease of 1.3% from RMB3,964.2 million in the same period last year. The unit transportation cost decreased 13.0% or 6 cents mainly attributable to better economies of scale, decreased fuel price and improved load rate through more effective route planning.
Sorting hub operating cost was RMB2,543.7 million (US$348.5 million), an increase of 12.7% from RMB2,257.0 million in the same period of last year. The increase primarily consisted of (i) RMB211.2 million (US$28.9 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvements and (ii) RMB58.4 million (US$8.0 million) increase in depreciation and amortization costs associated with expansion of automation equipment and facility upgrades to further improve transit efficiency. As of December 31, 2024, there were 596 sets of automated sorting equipment in service, compared to 464 sets as of December 31, 2023.
Cost of accessories sold was RMB196.9 million (US$27.0 million), increased by 21.4% compared with RMB162.2 million in the same period last year.
Other costs of RMB2,308.5 million (US$316.3 million) increased 162.3% from RMB880.2 million in the same period last year, which included costs for serving higher-valued enterprise customers that increased by RMB1,442.7 million (US$197.6 million).
Gross Profit was RMB3,759.7 million (US$515.1 million), increased by 20.2% from RMB3,128.2 million in the same period last year. Gross margin rate was 29.1% compared to 29.5% in the same period last year.
Total Operating Expenses were RMB306.5 million (US$42.0 million), compared to RMB373.2 million in the same period last year.
Selling, general and administrative expenses were RMB655.8 million (US$89.8 million), decreased by 6.4% from RMB700.4 million in the same period last year. There was a RMB85.6 million provision of losses from a credit loan provided to Shanghai Shuangcaiji Intelligent Technology Co., Ltd.(上海雙彩吉智能科技有限公司), an equipment supplier, in the same period last year.
Other operating income, net was RMB349.3 million (US$47.9 million), compared to RMB327.2 million in the same period last year. Other operating income mainly consisted of (i) RMB214.7 million (US$29.4 million) of government subsidies and tax rebates, (ii) RMB111.5 million (US$15.3 million) ADR fee rebate, and (iii) RMB23.1 million (US$3.2 million) of rental income and other income.
Income from operations was RMB3,453.2 million (US$473.1 million), an increase of 25.3% from RMB2,755.1 million for the same period last year. The operating margin rate increased to 26.7% from 25.9% in the same period last year.
Interest income was RMB221.9 million (US$30.4 million), compared with RMB201.4 million in the same period last year.
Interest expenses was RMB71.8 million (US$9.8 million), compared with RMB61.8 million in the same period last year.
Gain from fair value changes of financial instruments was RMB168.0 million (US$23.0 million), compared with a loss of RMB51.2 million in the same period last year. Such gain or loss from fair value changes of the financial instruments is quoted by commercial banks according to market-based estimation of future redemption prices.
Impairment of investment in equity investees was RMB258.6 million (US$35.4 million). Such provision for impairment was related to the Company's investment in Zhejiang Yizhan Network Technology Co., Ltd.(浙江驛棧網絡科技有限公司), a subsidiary of Cainiao Smart Logistics Network Ltd.(菜鳥智慧物流網絡有限公司).
Income tax expenses were RMB1,059.1 million (US$145.1 million) compared to RMB636.6 million in the same period last year. Overall income tax rate increased by 8.1 percentage points year over year, mainly due to a RMB372.3 million (US$51.0 million) accrual of withholding tax on dividend payable to ZTO Express (Hong Kong) Limited.
Net income was RMB2,446.8 million (US$335.2 million), which increased by 10.7% from RMB2,209.8 million in the same period last year.
Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB2.97 (US$0.41) and RMB2.89 (US$0.40), compared to basic and diluted earnings per ADS of RMB2.72 and RMB2.66 in the same period last year, respectively.
Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB3.32 (US$0.45) and RMB3.24 (US$0.44), compared with RMB2.73 and RMB2.67 in the same period last year, respectively.
Adjusted net income was RMB2,733.3 million (US$374.5 million), compared with RMB2,214.4 million during the same period last year.
EBITDA[1] was RMB4,328.8 million (US$593.0 million), compared with RMB3,647.2 million in the same period last year.
Adjusted EBITDA was RMB4,615.3 million (US$632.3 million), compared to RMB3,651.8 million in the same period last year.
Net cash provided by operating activities was RMB2,806.3 million (US$384.5 million), compared with RMB3,923.3 million in the same period last year.
| (1) EBITDA is a non-GAAP financial measure, which is defined as net income before depreciation, amortization, interest expenses and income tax expenses which management aims to better represent the underlying business operations. |
| Fiscal Year 2024 Financial Results | ||||||||||
| Year Ended December 31, | ||||||||||
| 2023 | 2024 | |||||||||
| RMB | % | RMB | US$ | % | ||||||
| (in thousands, except percentages) | ||||||||||
| Express delivery services | 35,488,060 | 92.4 | 40,953,034 | 5,610,543 | 92.5 | |||||
| Freight forwarding services | 906,802 | 2.4 | 885,410 | 121,301 | 2.0 | |||||
| Sale of accessories | 1,876,624 | 4.9 | 2,300,392 | 315,152 | 5.2 | |||||
| Others | 147,429 | 0.3 | 141,884 | 19,438 | 0.3 | |||||
| Total revenues | 38,418,915 | 100.0 | 44,280,720 | 6,066,434 | 100.0 | |||||
| Year Ended December 31, | |||||||||
| 2023 | 2024 | ||||||||
| % of | % of | ||||||||
| RMB | revenues | RMB | US$ | revenues | |||||
| (in thousands, except percentages) | |||||||||
| Line-haul transportation cost | 13,591,627 | 35.4 | 13,966,446 | 1,913,395 | 31.5 | ||||
| Sorting hub operating cost | 8,253,522 | 21.5 | 9,163,784 | 1,255,433 | 20.7 | ||||
| Freight forwarding cost | 854,533 | 2.2 | 828,270 | 113,473 | 1.9 | ||||
| Cost of accessories sold | 513,391 | 1.3 | 651,729 | 89,287 | 1.5 | ||||
| Other costs | 3,543,316 | 9.2 | 5,953,399 | 815,612 | 13.4 | ||||
| Total cost of revenues | 26,756,389 | 69.6 | 30,563,628 | 4,187,200 | 69.0 | ||||
Line haul transportation cost was RMB13,966.4 million (US$1,913.4 million), an increase of 2.8% from RMB13,591.6 million last year. The unit transportation cost decreased by 8.9% or 4 cents mainly attributable to better economies of scale and improved load rate through more effective route planning.
Sorting hub operating cost was RMB9,163.8 million (US$1,255.4 million), an increase of 11.0% from RMB8,253.5 million last year. The increase primarily consisted of (i) RMB542.6 million (US$74.3 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvement, and (ii)RMB288.3 million (US$39.5 million) increase in depreciation and amortization costs associated with automated equipment and facility upgrades to further improve transit efficiency.
Cost of accessories sold was RMB615.7 million (US$89.3 million), increased by 26.9% compared with RMB513.4 million last year.
Other costs of RMB5,953.4 million (US$815.6 million) increased 68.0% from RMB3,543.3 million in 2023, which included costs for serving higher-valued enterprise customers that increased by RMB2,452.0 million (US$335.9 million).
Gross Profit was RMB13,717.1 million (US$1,879.2 million), increased 17.6% from RMB11,662.5 million last year as a combined result of revenues growth and cost productivity gain. Gross margin rate improved to 31.0% from 30.4% last year.
Total Operating Expenses were RMB1,940.2 million (US$265.8 million), compared to RMB1,654.6 million last year.
Selling, general and administrative expenses were RMB2,690.0 million (US$368.5 million), increased by 10.9% from RMB2,425.3 million last year, mainly due to (i) RMB72.4 million(US$9.9 million) increase in headquarter facility expenses, (ii) RMB47.6 million (US$6.5 million) increase in depreciation and amortization costs associated with administrative equipment and facilities, and (iii) RMB47.6 million (US$6.5 million) increase in compensation and benefit expenses.
Other operating income, net was RMB749.8 million (US$102.7 million), compared to RMB770.7 million last year. Other operating income mainly consisted of (i) RMB488.9 million (US$67.0 million) of government subsidies and tax rebates, (ii) RMB171.3 million (US$23.5 million) of rental and other income, and (iii) RMB111.5 million (US$15.3 million) ADR fee rebate.
Income from operations was RMB11,776.9 million (US$1,613.4 million), an increase of 17.7% from RMB10,007.9 million last year. The operating margin rate increased to 26.6% from 26.0% last year.
Interest income was RMB993.5 million (US$136.1 million), compared with RMB706.8 million last year.
Interest expenses was RMB337.9 million (US$46.3 million), compared with RMB289.5 million last year.
Gain from fair value changes of financial instruments was RMB202.9 million (US$27.8 million), compared with a gain of RMB164.5 million last year. Such gain or loss from fair value changes of the financial instruments is quoted by commercial banks according to market-based estimation of future redemption prices.
Impairment of investment in equity investees was RMB931.4 million (US$127.6 million), included the provision for impairment of (i) RMB479.9 million (US$65.8 million) related to a tender offer initiated by Alibaba Group Holding Limited (阿里巴巴集團控股有限公司) to purchase all the outstanding shares of Cainiao Smart Logistics Network Limited (菜鳥智慧物流網絡有限公司), as the offer price was below the carrying amount, and (ii) RMB451.5 million (US$61.8 million) of the Company's investment in Zhejiang Yizhan Network Technology Co., Ltd.(浙江驛棧網絡科技有限公司), a subsidiary of Cainiao Smart Logistics Network Ltd.(菜鳥智慧物流網絡有限公司).
Foreign currency exchange Loss, before tax was RMB17.9 million (US$2.5 million), mainly due to the appreciation of the onshore U.S. dollar-denominated bank deposits against the Chinese Renminbi.
Income tax expenses were RMB2,845.4 million (US$389.8 million) compared to RMB1,938.6 million last year. Overall income tax rate increased by 6.3% percentage points year over year, mainly due to (i) the accrual of RMB 518.3 million (US$ 71.0 million) in withholding tax on dividend payable to ZTO Express (Hong Kong) Limited, and (ii) an income tax refund of RMB207.1 million (US$ 28.4 million) received in the third quarter of 2023 by Shanghai Zhongtongji Network Technology Co., Ltd.(上海中通吉網絡技術有限公司), a wholly-owned subsidiary of the Company, for being recognized as a "Key Software Enterprise" that was qualified for a preferential tax rate of 10% for tax year 2022.
Net income was RMB8,887.6 million (US$1,217.6 million), which increased by 1.5% from RMB8,754.5 million last year.
Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB10.95 (US$1.50) and RMB10.70 (US$1.47), compared to basic and diluted earnings per ADS of RMB10.83 and RMB10.60 last year, respectively.
Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB12.52 (US$1.72) and RMB12.20 (US$1.67), compared with RMB11.14 and RMB10.90 last year, respectively.
Adjusted net income was RMB10,150.4 million (US$1,390.6 million), compared with RMB9,005.9 million last year.
EBITDA[1] was RMB15,094.3 million (US$2,067.9 million), compared with RMB13,857.8 million last year.
Adjusted EBITDA was RMB16,354.9 million (US$2,240.6 million), compared to RMB14,107.3 million last year.
Net cash provided by operating activities was RMB11,429.4 million (US$1,565.8 million), compared with RMB13,361.0 million last year.
Recent Developments
Appointment of Nominating and Corporate Governance Committee Member
The board of directors (the "Board") has appointed Ms. Fang Xie, an independent non-executive director, as a member of the nominating and corporate governance committee of the Board, effective March 19, 2025. Following the appointment, the nominating and corporate governance committee consists of four independent non-executive directors, namely Mr. Frank Zhen Wei (as the chairman), Mr. Qin Charles Huang, Mr. Tsun-Ming Daniel Kao and Ms. Fang Xie.
Declaration of Semi-Annual Dividend
The board of directors (the "Board") has approved a cash dividend of US$0.35 per ADS and ordinary share for the six months ended December 31, 2024, to holders of its ordinary shares and ADSs as of the close of business on April 10, 2025. The dividend payment represents a 40% dividend payout ratio. For holders of Class A and Class B ordinary shares, in order to qualify for entitlement to the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on April 10, 2025