12.1 Billion Annual Parcels, Grew
42.2%
19.1% Market Share, Rose 2.3 points
RMB5.3 Billion
Adjusted Net Income, Increased 26.0%
US$0.30 per
Share Dividend Announced for 2019
SHANGHAI, March 16, 2020 /PRNewswire/ -- ZTO Express
(Cayman) Inc. (NYSE: ZTO), a leading and fast-growing express
delivery company in China ("ZTO"
or the "Company"), today announced its unaudited financial results
for the fourth quarter and fiscal year ended December 31, 2019[1]. The Company beat
expectations for parcel volume and adjusted net income for 2019 by
growing parcel volume 16.9 percentage points above the industry
average, and achieving adjusted net income of RMB5.3 billion. Net cash generated by operating
activities increased 43.1% to RMB6.3
billion for 2019.
Fourth Quarter 2019 Financial Highlights
- Revenues were RMB6,846.5 million
(US$ 983.4 million), an increase of
21.7% from RMB5,627.5 million in the
same period of 2018.
- Gross profit was RMB1,996.1
million (US$ 286.7 million),
an increase of 28.8% from RMB1,550.2
million in the same period of 2018.
- Net income was RMB2,316.8 million
(US$ 332.8 million), an increase of
81.2% from RMB1,278.9 million in the
same period of 2018.
- Adjusted EBITDA[2] was RMB2,343.9 million (US$
336.7 million), an increase of 32.7% from RMB1,766.0 million in the same period of
2018.
- Adjusted net income[3] was RMB1,631.5 million (US$
234.4 million), an increase of 26.5% from RMB1,289.7 million in the same period of
2018.
- Basic and diluted earnings per American depositary share
("ADS"[4]) were RMB2.98
(US$0.43) and RMB2.97 (US$0.43),
an increase of 84.0% and 83.3% from RMB1.62 in the same period of 2018,
respectively.
- Adjusted basic and diluted earnings per American depositary
share[5] attributable to ordinary shareholders were
RMB2.10 (US$0.30), an increase of 28.8% from RMB1.63 in the same period of 2018.
- Net cash provided by operating activities was RMB 2,260.4 million (US$
324.7 million), compared with RMB1,802.3 million in the same period of
2018.
Fiscal Year 2019 Financial Highlights
- Revenues were RMB22,109.9 million
(US$3,175.9 million), an increase of
25.6% from RMB17,604.5 million in
2018.
- Gross profit was RMB6,621.2
million (US$951.1 million), an
increase of 23.4% from RMB5,364.9
million in 2018.
- Net income was RMB5,671.3 million
(US$814.6 million), an increase of
29.2% from RMB4,387.9 million in
2018.
- Adjusted EBITDA[2] was RMB7,635.2 million (US$1,096.7 million), an increase of 30.3% from
RMB5,858.4 million in 2018.
- Adjusted net income[3] was RMB5,292.4 million (US$760.2 million), an increase of 26.0% from
RMB4,201.1 million in 2018.
- Basic and diluted earnings per American depositary share
("ADS"[4]) were RMB7.24
(US$1.04) and RMB7.23 (US$1.04),
an increase of 24.2% and 24.2% from RMB5.83 and RMB5.82
in 2018, respectively.
- Adjusted basic and diluted earnings per American depositary
share[5] attributable to ordinary shareholders were
RMB6.75 (US$0.97), an increase of 21.0% from RMB5.58 in 2018.
- Net cash provided by operating activities was RMB 6,304.2 million (US$
905.5 million), compared with RMB4,404.1 million in 2018.
Operational Highlights for Fourth Quarter 2019
- Parcel volume was 3,692 million, an increase of 36. 1% from
2,714 million in the same period of 2018.
- Number of pickup/delivery outlets was approximately 30,000 as
of December 31, 2019.
- Number of direct network partners was over 4,800 as of
December 31, 2019.
- Number of line-haul vehicles was over 7,350 as of December 31, 2019, which included over 6,450
self-owned vehicles and over 900 vehicles owned and operated by
Tonglu Tongze Logistics Ltd., a transportation operator that works
exclusively for ZTO.
- Number of self-owned trucks increased to around 6,450 as of
December 31, 2019 from 5,700 as of
September 30, 2019. Among the
self-owned trucks, over 4,650 were high capacity 15 or
17-meter-long models as of December 31,
2019, compared to over 3,950 as of September 30, 2019.
- Number of line-haul routes between sorting hubs was over 2,600
as of December 31, 2019, compared to
over 2,400 as of September 30,
2019.
- Number of sorting hubs was 91 as of December 31, 2019, among which 82 are operated by
the Company and 9 by the Company's network partners.
[1]
|
An investor relations
presentation accompanies this earnings release and can be found at
ir.zto.com
|
|
|
[2]
|
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 the gain on
disposal of equity investees and subsidiary which management aims
to better represent the underlying business operations
|
|
|
[3]
|
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 gain on disposal of equity investees and subsidiary in
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 divided by weighted average number
of basic and diluted shares, respectively.
|
Mr. Meisong Lai, Founder,
Chairman and Chief Executive Officer of ZTO, commented "2019 was a
monumental year for ZTO. Our market share reached 19.1% for the
year with 12.1 billion parcels, marking us, for the third
consecutive year, the world's largest express delivery company by
volume. Supported by industry-leading quality of services and
customer satisfaction, the ZTO brand has become ubiquitous among
Chinese customers, and our quality of earnings and cash generation
continue to lead the China express
delivery industry thanks to our sound strategy and effective
execution in scaling up and innovating for best-in-class cost
efficiency."
Mr. Lai added, "China entered
2020 battling against the coronavirus, the nation as a whole made
huge sacrifices as well as great strides. As of today, outside of
the Hubei province, ZTO's network
has resumed normal operations with daily parcel volume returning to
non-crisis level. ZTO's core strength and clear advantages are
intact. We are confident in our continued ability to execute our
growth strategy and further differentiate ourselves as China and the world strive to overcome the
challenges from the coronavirus and resume normalcy going
forward."
Ms. Huiping Yan, Chief Financial
Officer of ZTO, added, "For 2019, we exceeded expectations and
increased our market share by 2.3 points, and improved cost
efficiency at the same time. Productivity gain of 9.1% in combined
sortation and transportation costs partially offset the unit price
decline of 10.1%. By leveraging a stable corporate cost structure,
we kept operating margin rate flat year over year at 24.7%.
Adjusted net income grew 26.0 % to 5.3 billion while cash generated
from operating activities increased 43.1% to reach 6.3
billion."
Ms. Yan added, "The immediate impact from the coronavirus on
volume and earnings for the first quarter were reasonably
estimable. Helped by a supportive policy environment for a sensible
and steady normalization, we saw a resilient improvement trend in
our March performance. Our core business being largely
domestic-based, the consumption-driven growth nature of the Chinese
economy and the enabling scale and cost-advantage of the Chinese
express delivery all add positive perspectives to our outlook. More
importantly, with ZTO's well-demonstrated execution and unequivocal
strength in scale, infrastructure, cost efficiency and financial
resources, we are confident in our operations and performance for
the rest of three quarters of 2020 and beyond."
Fourth Quarter 2019 Financial Results
|
Three Months Ended
December 31,
|
|
2018
|
|
2019
|
|
RMB
|
|
%
|
|
RMB
|
|
US$
|
|
%
|
|
(in thousands,
except percentages)
|
|
Express delivery
services
|
4,960,190
|
|
88.1
|
|
6,106,947
|
|
877,208
|
|
89.2
|
Freight forwarding
services
|
392,525
|
|
7.0
|
|
322,203
|
|
46,282
|
|
4.7
|
Sale of
accessories
|
252,806
|
|
4.5
|
|
312,118
|
|
44,833
|
|
4.6
|
Others
|
22,011
|
|
0.4
|
|
105,248
|
|
15,117
|
|
1.5
|
Total
revenues
|
5,627,532
|
|
100.0
|
|
6,846,516
|
|
983,440
|
|
100.0
|
Revenues were RMB 6,846.5
million (US$ 983.4 million),
an increase of 21.7% from RMB 5,627.5
million in the same period of 2018. Revenue from core
express delivery business increased by 24.6% compared to the same
period of 2018, mainly driven by a 36.1 % increase in parcel volume
and partially offset by an 8.4% decrease in unit price per parcel
mainly from incremental volume incentives in response to
competition. Revenue from freight forwarding services decreased
17.9% due to intensified competition and our near-term loss
containment measures. The increase in revenue from sales of
accessories was in-line with the increase in the sale of thermal
paper used for digital waybills' printing, portable scanning
devices and uniforms. Other revenues were mainly associated with
equipment sale, financing services and advertising services.
|
Three Months Ended
December 31,
|
|
2018
|
|
2019
|
|
RMB
|
|
%
of
revenues
|
|
RMB
|
|
US$
|
|
%
of
revenues
|
|
(in thousands,
except percentages)
|
Line-haul
transportation cost
|
1,947,587
|
|
34.6
|
|
2,392,991
|
|
343,732
|
|
35.0
|
Sorting hub
cost
|
1,043,404
|
|
18.5
|
|
1,285,951
|
|
184,715
|
|
18.8
|
Freight forwarding
cost
|
385,454
|
|
6.8
|
|
315,701
|
|
45,348
|
|
4.6
|
Cost of accessories
sold
|
158,071
|
|
2.8
|
|
129,997
|
|
18,673
|
|
1.9
|
Other
costs
|
542,827
|
|
9.8
|
|
725,806
|
|
104,255
|
|
10.5
|
Total cost of
revenues
|
4,077,343
|
|
72.5
|
|
4,850,446
|
|
696,723
|
|
70.8
|
Total cost of revenues was RMB4,850.4 million (US$
696.7 million), an increase of 19.0% from RMB 4,077.3 million in the same period last
year.
- Line haul transportation cost was RMB2,393.0 million (US$343.7 million), an increase of 22.9% from
RMB1,947.6 million in the same period
last year. The line-haul transportation cost per parcel declined
9.7% to RMB0.65. Higher usage of
self-owned fleet with increasing number of higher-capacity trailer
trucks, improved line-haul route planning and load rate enhanced
the cost efficiency in transportation.
- Sorting hub operating cost was RMB1,286.0 million (US$184.7 million), an increase of 23.2% from
RMB1,043.4 million in the same period
last year. The increase was primarily due to (i) a RMB159.8 million (US$23.0
million) increase in associated labor costs. The headcount
of sorting hub workers increased 12.9% year over year,
significantly slower than the 36.1% volume increase with notably
enhanced labor productivity; and (ii) a RMB43.2 million (US$6.2
million) increase in depreciation and amortization costs
associated with the newly installed automated sorting equipment. As
of December 31, 2019, 265 sets of
automated sorting equipment have been put into use, compared to 120
sets as of December 31, 2018. The
sorting hub cost per parcel declined 9.4% to RMB0.35, which was attributable to advanced staff
planning for temporary labor for peak season as well as the
increased utilization of automation.
- Cost of accessories was RMB130.0
million (US$18.7 million), a
decrease of 17.8% from RMB158.1
million in the same period last year. The decrease was
mainly driven by increasing use of the lower-cost single-sheet
digital waybill starting the second half of 2019.
- Other costs were RMB725.8
million (US$104.3 million), an
increase of RMB 183.0 million
compared to the same period last year, which mainly resulted from
(i) an increase of RMB52.6 million
(US$7.6 million) in dispatching costs
associated with serving enterprise customers, (ii) an increase of
RMB59.0 million (US$8.5 million) in expenses related to IT and
technology development, and (iii) an increase of RMB58.9 million (US$8.5
million) in the costs of the advertising services.
Gross Profit was RMB1,996.1
million (US$286.7million), an
increase of 28.8% from RMB1,550.2
million in the same period last year. Gross margin increased
to 29.2% from 27.5% in the same period last year. The increase in
gross margin was mainly driven by combined effects of volume
increase, unit cost productivity gain of 9.6% partially offsetting competition-lead price
decline of 8.4%.
Total Operating Expenses were RMB186.4 million (US$26.8
million), compared to RMB197.0
million in the same period last year.
- Selling, general and administrative expenses were
RMB392.2 million (US$56.3 million), compared to RMB276.4 million in the same period last year.
The increase was mainly due to (i) an increase of RMB66.0 million (US$9.5
million) in salaries and accrued performance-based bonuses,
and (ii) an increase of RMB23.7
million (US$3.4 million) in
depreciation and amortization expenses. Selling, general and
administrative expenses, excluding share-based compensation expense
accounted for 5.6% of total revenues compared to 4.7% during the
same period last year.
- Other operating income, net was RMB205.8 million (US$29.6
million) for the quarter, compared to RMB 79.5 million in the same period last year.
Other operating income mainly consisted of (i) RMB113.2 million (US$ 16.3
million) of VAT super deduction recognized in the fourth
quarter of 2019, (ii) government subsidies and tax rebates of
RMB45.5 million (US$6.5 million) received in the fourth quarter of
2019, and (iii) RMB52.9 million
(US$7.6 million) rebate of fees from
the Company's ADR bank.
Income from operations was RMB1,809.7 million (US$259.9 million), an increase of 33.7% from
RMB1,353.2 million for the same
period last year. Operating margin increased to 26.4% from 24.0% in
the same period last year, mainly driven by the increase in gross
margin and other operating income.
Interest income was RMB148.1
million (US$21.3 million),
compared with RMB146.1 million in the
same period in 2018.
Loss on disposal of equity investees and subsidiary was
RMB2.3 million (US$0.3 million).
Impairment of investment in equity investee was
RMB56.0 million (US$8.0 million) for the quarter. Mainly included
a provision for impairment charge of RMB48.5
million (US$7.0 million)
related to the Company's investment in Wheat Commune Group Inc., a
campus-focused delivery and retail services provider in
China.
Unrealized gain from investment in equity investee was
754.5million (US$108.4 million),
resulted from the subscription to a follow-on issuance by Cainiao
Smart Logistics Network Limited in the fourth quarter of 2019. For
accounting purposes, such event provided a valuation basis for the
underling investment.
Foreign currency exchange loss, before tax was
RMB11.5million (US$1.7 million) in the fourth quarter of
2019.
Income tax expenses were RMB331.3
million (US$47.6 million) and
the effective income tax rate was 12.5% for the fourth quarter of
2019, compared to RMB222.6 million in
the same period in 2018. The increase in the income tax expenses
was mainly due to the increase of operational profit before tax.
The effective income tax rate was decreased in the fourth quarter
as the unrealized gain from investment in Cainiao was not
taxable.
Net income was RMB2,316.8
million (US$332.8 million), an
increase of 81.2% from RMB1,278.9
million in the same period last year.
Basic and diluted earnings per ADS attributable to ordinary
shareholders were RMB2.98
(US$0.43) and RMB2.97 (US$0.43),
compared with basic and diluted earnings per ADS of RMB1.62 in the same period last year.
Adjusted basic and diluted earnings per ADS attributable to
ordinary shareholders were RMB2.10 (US$0.30),
compared with RMB1.63 in the same
period last year.
Adjusted net income was RMB1,631.5
million (US$234.4 million),
compared with RMB1,289.7 million
during the same period last year.
EBITDA was RMB3,029.2
million (US$435.1 million),
compared with RMB1,755.1 million in
the same period last year.
Adjusted EBITDA was RMB2,343.9
million (US$336.7 million),
compared to RMB1,766.0 million in the
same period last year.
Net cash provided by operating activities was
RMB 2,260.4million (US$ 324.7 million), compared with RMB1,802.3 million in the same period last
year.
Fiscal Year 2019 Financial Results
|
Year Ended
December 31,
|
|
2018
|
|
2019
|
|
RMB
|
|
%
|
|
RMB
|
|
US$
|
|
%
|
|
(in thousands,
except percentages)
|
Express delivery
services
|
15,400,080
|
|
87.5
|
|
19,606,214
|
|
2,816,256
|
|
88.7
|
Freight forwarding
services
|
1,278,741
|
|
7.3
|
|
1,235,961
|
|
177,535
|
|
5.6
|
Sale of
accessories
|
812,866
|
|
4.6
|
|
1,089,977
|
|
156,565
|
|
4.9
|
Others
|
112,764
|
|
0.6
|
|
177,794
|
|
25,539
|
|
0.8
|
Total
revenues
|
17,604,451
|
|
100.0
|
|
22,109,946
|
|
3,175,895
|
|
100.0
|
Revenues were RMB22,109.9
million (US$3,175.9 million),
an increase of 25.6% from RMB17,604.5
million last year. The revenue from core business increased
27.9%, which was a combined result of a parcel volume growth of
42.2% and unit price per parcel decline of 10.1%. The freight
forwarding business contributed RMB 1,236.0
million (US$ 177.5 million)
full year revenue in 2019, compared with RMB1,278.7 million for the year of 2018.
|
Year Ended
December 31,
|
|
2018
|
|
2019
|
|
RMB
|
|
%
of
revenues
|
|
RMB
|
|
US$
|
|
%
of
revenues
|
|
(in thousands,
except percentages)
|
Line-haul
transportation cost
|
5,757,701
|
|
32.7
|
|
7,466,043
|
|
1,072,430
|
|
33.8
|
Sorting hub
cost
|
3,197,667
|
|
18.2
|
|
4,109,338
|
|
590,269
|
|
18.6
|
Freight forwarding
cost
|
1,239,439
|
|
7.0
|
|
1,209,523
|
|
173,737
|
|
5.5
|
Cost of accessories
sold
|
491,722
|
|
2.8
|
|
544,166
|
|
78,165
|
|
2.5
|
Other
costs
|
1,553,039
|
|
8.8
|
|
2,159,708
|
|
310,223
|
|
9.7
|
Total cost of
revenues
|
12,239,568
|
|
69.5
|
|
15,488,778
|
|
2,224,824
|
|
70.1
|
Total cost of revenues was RMB15,488.8 million (US$2,224.8 million), an increase of 26.5% from
RMB12,239.6 million in the same
period last year. Combined line-haul transportation cost and
sorting hub operating cost per parcel decreased 9.1% or
RMB0.10 for the year of 2019.
- Line-haul transportation cost was RMB7,466.0 million (US$1,072.4 million), an increase of 29.7% from
RMB5,757.7 million last year. In
2019, the Company further increased the use of more cost-efficient,
self-owned and operated high-capacity trailer trucks in place of
outsourced third-party trucks, especially during the peak season.
As of December 31, 2019, the number
of self-owned trucks increased to around 6,450 as compared to 4,500
for 2018. In addition, better routing planning as well as improved
load rate also contributed to unit transportation cost
savings.
- Sorting hub operating cost was RMB4,109.3 million (US$590.3 million), an increase of 28.5% from
RMB3,197.7 million last year. The
increase was mainly due to (i) increased labor costs of
RMB595.1 million (US$85.5 million) as a result of wage increases
and sorting hub headcount increase which were relatively low
against volume growth, and (ii) an increase of RMB176.7 million (US$25.4
million) in depreciation expenses driven by the expansion of
sorting hubs and installation of more automated sorting equipment.
Sorting hub cost per parcel declined by RMB0.04 compared with last year mainly driven by
higher utilization of automation and the advanced planning on use
of peak season temporary workers.
- Cost of accessories sold was RMB544.2 million (US$78.2
million), an increase from RMB491.7
million last year. This cost largely consists of the cost of
thermal paper for digital waybill printing sold to Company's
network partners. Since second half of 2019, there had been
increased use of lower-cost single-sheet thermal waybill paper. The
cost of accessories sold grew slower than the sale of
accessories.
- Other costs were RMB2,159.7
million (US$310.2 million), an
increase from RMB1,553.0 million in
2018, primarily due to (i) an increase in costs associated with
serving key enterprise customers of RMB357.5
million (US$51.4 million); and
(ii) an increase of RMB223.4million
(US$32.1 million) in expenses related
to technology development.
Gross Profit was RMB6,621.2
million (US$951.1 million), an
increase of 23.4% from RMB5,364.9
million last year. Gross profit margin decreased to 29.9%
from 30.5% in 2018, which resulted mainly from volume increase,
cost productivity gain absorbing part of the ASP decline.
Total Operating Expenses were RMB1,158.3 million (US$166.4 million), compared to RMB1,032.7 million last year.
- Selling, general and administrative expenses were
RMB1,546.2 million (US$222.1 million), an increase of 27.7% from
RMB1,210.7 million in the last year.
The increase was primarily due to (i) an increase of RMB182.8 million (US$26.3
million) in wages and social welfare expenses; (ii) an
increase of RMB67.2 million
(US$9.7 million) in share-based
compensation expenses; and (iii) an increase of RMB45.7 million (US$6.6
million) in depreciation and amortization expenses.
- Other operating income, net was RMB387.9 million (US$55.7
million), compared with RMB178.1
million last year. The increase is mainly composed of (i)
the RMB131.4 million (US$18.9 million) of VAT super deduction, and (ii)
an increase in government subsidies and tax rebate of RMB71.4 million (US$10.2
million).
Income from operations was RMB
5,462.8 million (US$ 784.7
million), an increase of 26.1% from RMB4,332.2 million last year. Operating margin
increased slightly to 24.7% from 24.6% last year.
Interest income was RMB585.4
million (US$84.1 million),
compared with RMB401.2 million in
2018.
Loss on disposal of equity investees and subsidiary was
RMB2.9 million (US$0.4 million).
Impairment of investment in equity investee was
RMB56.0 million (US$8.0 million). Mainly included a provision for
impairment charge of RMB48.5 million
(US$7.0 million) related to the
investment in Wheat Commune Group Inc., a campus-focused delivery
and retail services provider in China.
Unrealized gain from investment in equity investee was
754.5million (US$108.4 million),
resulted from the subscription to a follow-on issuance by Cainiao
Smart Logistics Network Limited in the fourth quarter of 2019. For
accounting purposes, such event provided a valuation basis for the
underling investment.
Foreign currency exchange net gain was RMB13.3 million (US$1.9
million) was mainly due to the appreciation of the onshore
U.S. dollar-denominated bank deposits against the Chinese
Renminbi.
Net income increased 29.2% to RMB
5,671.3 million (US$ 814.6
million) from RMB4,387.9
million in 2018. Net income margin increased to 25.7% from
24.9% in 2018.
Basic and diluted earnings per ADS were RMB7.24 (US$1.04)
and RMB7.23 (US$1.04) respectively, compared with basic and
diluted earnings per ADS of RMB5.83
and RMB5.82 last year.
Adjusted basic and diluted earnings per ADS attributable to
ordinary shareholders were RMB6.75 (US$0.97),
compared with that of RMB5.58 for
2018.
Adjusted net income was RMB5,292.4
million (US$760.2 million),
compared with RMB4,201.1 million last
year.
EBITDA was RMB8,014.1
million (US$1,151.2 million),
compared with RMB6,171.5 million last
year.
Adjusted EBITDA was RMB7,635.2
million (US$1,096.7 million),
compared with RMB5,858.4 million last
year.
Net cash provided by operating activities was
RMB 6,304.2million (US$ 905.5 million), increased 43.1% from
RMB4,404.1 million last year.
Business Outlook
Taking into consideration the immediate impact of the
coronavirus and particularly the volume performance in March thus
far, ZTO's parcel volume for the first quarter of 2020 is likely to
exceed that of the first quarter of 2019. Based on such current
assessment, the Company targets to grow its 2020 annual parcel
volume by at least 15 percentage points over and above the industry
average. While the Company is confident in its ability to deliver
pre-determined earnings growth commitment on its targeted volume,
there remains uncertainties in domestic as well as the world
economic development for 2020. The Company will provide more
specific annual guidance upon improved visibility and make
necessary updates to management's current and preliminary view.
Special Dividend
The board of directors has approved a special dividend of
US$0.30 per ADS for 2019, which is
expected to be paid on April 20, 2020
to shareholders of record as of the close of business on
April 8, 2020.
Company Share Purchase
On November 15, 2018, the Company
announced a new share repurchase program whereby ZTO was authorized
to repurchase its own Class A ordinary shares in the form of ADSs
with an aggregate value of up to US$500
million during an 18-month period thereafter. The Company
expects to fund the repurchase out of its existing cash balance. As
of December 31, 2019, the Company has
purchased an aggregate of 7,716,436 ADSs at an average purchase
price of US$17.33, including
repurchase commissions.
On March 17, 2020, the Company
announced to extend the current share repurchase program to
June 30, 2021. The Company believes
that the share repurchase program represents ZTO's confidence in
the overall market opportunities as well as ZTO's solid operating
fundamentals and financial strength for sustained profitable growth
and value creation for its shareholders.
Exchange Rate
This announcement contains translation of certain Renminbi
amounts into U.S. dollars at specified rates solely for the
convenience of readers. Unless otherwise noted, all translations
from Renminbi to U.S. dollars were made at the exchange rate of
RMB6.9618 to US$1.00, the noon buying rate on December 31, 2019 as set forth in the H.10
statistical release of the Board of Governors of the Federal
Reserve Systems.
Use of Non-GAAP Financial Measures
The Company uses adjusted EBITDA and adjusted net income, each a
non-GAAP financial measure, in evaluating ZTO's operating results
and for financial and operational decision-making purposes.
Reconciliations of the Company's non-GAAP financial measures to
its U.S. GAAP financial measures are shown in tables at the end of
this earnings release, which provide more details about the
non-GAAP financial measures.
The Company believes that adjusted EBITDA and adjusted net
income help identify underlying trends in ZTO's business that could
otherwise be distorted by the effect of the expenses and gains that
the Company includes in income from operations and net income. The
Company believes that adjusted EBITDA and adjusted net income
provide useful information about its operating results, enhance the
overall understanding of its past performance and future prospects
and allow for greater visibility with respect to key metrics used
by ZTO's management in its financial and operational
decision-making.
Adjusted EBITDA and adjusted net income should not be considered
in isolation or construed as an alternative to net income or any
other measure of performance or as an indicator of the Company's
operating performance. Investors are encouraged to review the
historical non-GAAP financial measures to the most directly
comparable GAAP measures. Adjusted EBITDA and adjusted net income
presented here may not be comparable to similarly titled measures
presented by other companies. Other companies may calculate
similarly titled measures differently, limiting their usefulness as
comparative measures to ZTO's data. ZTO encourages investors and
others to review the Company's financial information in its
entirety and not rely on a single financial measure.
Conference Call Information
ZTO's management team will host an earnings conference call at
9:00 PM U.S. Eastern Time on
Monday, March 16, 2020 (9:00 AM Beijing Time on March 17, 2020).
Dial-in details for the earnings conference call are as
follows:
United
States:
|
1-888-317-6003
|
Hong Kong:
|
852-5808-1995
|
China:
|
4001-206-115
|
International:
|
1-412-317-6061
|
Passcode:
|
5721973
|
Please dial in 15 minutes before the call is scheduled to begin
and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the
following numbers until March 23,
2020:
United
States:
|
1-877-344-7529
|
International:
|
1-412-317-0088
|
Passcode:
|
10139644
|
Additionally, a live and archived webcast of the conference call
will be available at http://zto.investorroom.com.
About ZTO Express (Cayman) Inc.
ZTO Express (Cayman) Inc. (NYSE: ZTO) ("ZTO" or the "Company")
is a leading and fast-growing express delivery company in
China. ZTO provides express
delivery service as well as other value-added logistics services
through its extensive and reliable nationwide network coverage in
China.
ZTO operates a highly scalable network partner model, which the
Company believes is best suited to support the significant growth
of e-commerce in China. The
Company leverages its network partners to provide pickup and
last-mile delivery services, while controlling the mission-critical
line-haul transportation and sorting network within the express
delivery service value chain.
For more information, please visit
http://zto.investorroom.com.
Safe Harbor Statement
This news release contains "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include but are not
limited to the Company's unaudited results for the fourth quarter
and fiscal year of 2019, ZTO management quotes and the Company's
financial outlook.
These forward-looking statements are not historical facts but
instead represent only the Company's belief regarding expected
results and events, many of which, by their nature, are inherently
uncertain and outside of its control. The Company's actual results
and other circumstances may differ, possibly materially, from the
anticipated results and events indicated in these forward-looking
statements. Announced results for the fourth quarter and fiscal
year of 2019 are preliminary, unaudited and subject to audit
adjustment. In addition, the Company may not meet its financial
outlook included in this news release and may be unable to grow its
business in the manner planned. The Company may also modify its
strategy for growth. In addition, there are other risks and
uncertainties that could cause the Company's actual results to
differ from what it currently anticipates, including those relating
to the development of the e-commerce industry in China, its significant reliance on the Alibaba
ecosystem, risks associated with its network partners and their
employees and personnel, intense competition which could adversely
affect the Company's results of operations and market share, any
service disruption of the Company's sorting hubs or the outlets
operated by its network partners or its technology system. For
additional information on these and other important factors that
could adversely affect the Company's business, financial condition,
results of operations, and prospects, please see its filings with
the U.S. Securities and Exchange Commission.
All information provided in this press release and in the
attachments is as of the date of the press release. The Company
undertakes no obligation to update any forward-looking statement,
whether as a result of new information, future events or otherwise,
after the date of this release, except as required by law. Such
information speaks only as of the date of this release.
UNAUDITED CONSOLIDATED FINANCIAL DATA
Summary of
Unaudited Consolidated Comprehensive
Income Data:
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
(in thousands, except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
5,627,532
|
|
6,846,516
|
|
983,440
|
|
17,604,451
|
|
22,109,946
|
|
3,175,895
|
Cost of
revenues
|
(4,077,343)
|
|
(4,850,446)
|
|
(696,723)
|
|
(12,239,568)
|
|
(15,488,778)
|
|
(2,224,824)
|
Gross
profit
|
1,550,189
|
|
1,996,070
|
|
286,717
|
|
5,364,883
|
|
6,621,168
|
|
951,071
|
Operating income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
(276,424)
|
|
(392,208)
|
|
(56,337)
|
|
(1,210,717)
|
|
(1,546,227)
|
|
(222,102)
|
Other operating
income, net
|
79,458
|
|
205,788
|
|
29,560
|
|
178,057
|
|
387,890
|
|
55,717
|
Total operating
expenses
|
(196,966)
|
|
(186,420)
|
|
(26,777)
|
|
(1,032,660)
|
|
(1,158,337)
|
|
(166,385)
|
Income from
operations
|
1,353,223
|
|
1,809,650
|
|
259,940
|
|
4,332,223
|
|
5,462,831
|
|
784,686
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
146,139
|
|
148,092
|
|
21,272
|
|
401,162
|
|
585,404
|
|
84,088
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
(780)
|
|
—
|
|
—
|
Gain/(loss) on
disposal of equity investees and subsidiary
|
—
|
|
(2,330)
|
|
(335)
|
|
562,637
|
|
(2,860)
|
|
(411)
|
Impairment of
investment in equity investee
|
—
|
|
(56,026)
|
|
(8,048)
|
|
—
|
|
(56,026)
|
|
(8,048)
|
Unrealized gain from
investment in equity investee
|
—
|
|
754,468
|
|
108,373
|
|
—
|
|
754,468
|
|
108,373
|
Foreign currency
exchange gain/(loss), before tax
|
1,659
|
|
(11,549)
|
|
(1,659)
|
|
41,189
|
|
13,301
|
|
1,911
|
Income before income
tax, and share of loss in equity method investments
|
1,501,021
|
|
2,642,305
|
|
379,543
|
|
5,336,431
|
|
6,757,118
|
|
970,599
|
Income tax
expense
|
(222,639)
|
|
(331,337)
|
|
(47,594)
|
|
(929,133)
|
|
(1,078,295)
|
|
(154,887)
|
Share of (loss)/gain
in equity method investments
|
472
|
|
5,876
|
|
844
|
|
(19,386)
|
|
(7,556)
|
|
(1,085)
|
Net income
|
1,278,854
|
|
2,316,844
|
|
332,793
|
|
4,387,912
|
|
5,671,267
|
|
814,627
|
Net (loss)/income
attributable to noncontrolling interests
|
(3,312)
|
|
9,578
|
|
1,376
|
|
(4,887)
|
|
2,878
|
|
413
|
Net income
attributable to ZTO Express (Cayman) Inc.
|
1,275,542
|
|
2,326,422
|
|
334,169
|
|
4,383,025
|
|
5,674,145
|
|
815,040
|
Net income
attributable to ordinary shareholders
|
1,275,542
|
|
2,326,422
|
|
334,169
|
|
4,383,025
|
|
5,674,145
|
|
815,040
|
Net earnings per
share/ADS attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.62
|
|
2.98
|
|
0.43
|
|
5.83
|
|
7.24
|
|
1.04
|
Diluted
|
1.62
|
|
2.97
|
|
0.43
|
|
5.82
|
|
7.23
|
|
1.04
|
Weighted average
shares used in calculating net earnings per ordinary
share/ADS
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
786,966,574
|
|
781,947,464
|
|
781,947,464
|
|
751,814,077
|
|
784,007,583
|
|
784,007,583
|
Diluted
|
787,966,142
|
|
782,403,824
|
|
782,403,824
|
|
752,672,956
|
|
784,331,120
|
|
784,331,120
|
Other comprehensive
income, net of tax of nil:
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
23,488
|
|
(325,856)
|
|
(46,806)
|
|
867,612
|
|
104,004
|
|
14,939
|
Comprehensive
income
|
1,302,342
|
|
1,990,988
|
|
285,987
|
|
5,255,524
|
|
5,775,271
|
|
829,566
|
Comprehensive
(loss)/income attributable to noncontrolling interests
|
(3,312)
|
|
9,578
|
|
1,376
|
|
(4,887)
|
|
2,878
|
|
413
|
Comprehensive income
attributable to ZTO Express (Cayman) Inc.
|
1,299,030
|
|
2,000,566
|
|
287,363
|
|
5,250,637
|
|
5,778,149
|
|
829,979
|
Unaudited
Consolidated Balance Sheets Data:
|
|
|
As of
|
|
December 31,
2018
|
|
December 31,
2019
|
|
RMB
|
|
RMB
|
|
US$
|
|
(in thousands, except for share and per share data)
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
4,622,554
|
|
5,270,204
|
|
757,017
|
Restricted
cash
|
400
|
|
7,210
|
|
1,036
|
Accounts receivable,
net of allowance for doubtful accounts of RMB13,996 and RMB15,204
at December 31, 2018 and December 31, 2019,
respectively
|
596,995
|
|
675,567
|
|
97,039
|
Financing receivables,
net of allowance for doubtful accounts of RMB4,139 and RMB9,159 at
December 31, 2018 and December 31, 2019, respectively
|
517,983
|
|
511,124
|
|
73,418
|
Short-term
investment
|
13,599,852
|
|
11,113,217
|
|
1,596,314
|
Inventories
|
43,813
|
|
43,845
|
|
6,298
|
Advances to
suppliers
|
337,874
|
|
438,272
|
|
62,954
|
Prepayments and other
current assets
|
1,507,996
|
|
1,964,506
|
|
282,183
|
Amounts due from
related parties
|
6,600
|
|
74,312
|
|
10,674
|
Total current
assets
|
21,234,067
|
|
20,098,257
|
|
2,886,933
|
Investments in equity
investees
|
2,207,410
|
|
3,109,494
|
|
446,651
|
Property and
equipment, net
|
9,035,704
|
|
12,470,632
|
|
1,791,294
|
Land use rights,
net
|
1,969,176
|
|
2,508,860
|
|
360,375
|
Intangible assets,
net
|
54,227
|
|
48,029
|
|
6,899
|
Right-of-use
assets[6]
|
—
|
|
901,956
|
|
129,558
|
Goodwill
|
4,241,541
|
|
4,241,541
|
|
609,259
|
Deferred tax
assets
|
318,063
|
|
403,587
|
|
57,972
|
Other non-current
assets
|
622,669
|
|
2,108,146
|
|
302,816
|
TOTAL
ASSETS
|
39,682,857
|
|
45,890,502
|
|
6,591,757
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
1,311,807
|
|
1,475,258
|
|
211,908
|
Advances from
customers
|
436,710
|
|
1,210,887
|
|
173,933
|
Income tax
payable
|
405,683
|
|
80,272
|
|
11,530
|
Amounts due to related
parties
|
132,216
|
|
38,943
|
|
5,594
|
Lease
liabilities[6]
|
—
|
|
298,728
|
|
42,910
|
Acquisition
consideration payable
|
19,581
|
|
22,942
|
|
3,295
|
Dividends
payable
|
1,699
|
|
1,629
|
|
234
|
Other current
liabilities
|
2,833,769
|
|
3,552,288
|
|
510,254
|
Total current
liabilities
|
5,141,465
|
|
6,680,947
|
|
959,658
|
Lease
liabilities[6]
|
—
|
|
504,442
|
|
72,459
|
Deferred tax
liabilities
|
157,940
|
|
207,896
|
|
29,862
|
Acquisition
consideration payable
|
22,942
|
|
—
|
|
—
|
Other non-current
liabilities
|
90,961
|
|
93,820
|
|
13,476
|
TOTAL
LIABILITIES
|
5,413,308
|
|
7,487,105
|
|
1,075,455
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares
(US$0.0001 par value; 10,000,000,000 shares authorized, 811,267,551
shares issued and 785,463,859 shares outstanding as of December 31,
2018; 803,551,115 shares issued and 781,947,464 shares outstanding
as of December 31,
2019)
|
523
|
|
517
|
|
74
|
Additional paid-in
capital
|
24,137,681
|
|
22,336,594
|
|
3,208,451
|
Treasury shares, at
cost
|
(1,545,077)
|
|
(1,436,767)
|
|
(206,379)
|
Retained
earnings
|
11,052,395
|
|
16,726,540
|
|
2,402,617
|
Accumulated other
comprehensive income
|
571,716
|
|
675,720
|
|
97,061
|
ZTO Express
(Cayman) Inc. shareholders' equity
|
34,217,238
|
|
38,302,604
|
|
5,501,824
|
Noncontrolling
interests
|
52,311
|
|
100,793
|
|
14,478
|
Total
Equity
|
34,269,549
|
|
38,403,397
|
|
5,516,302
|
TOTAL LIABILITIES
AND EQUITY
|
39,682,857
|
|
45,890,502
|
|
6,591,757
|
[6]
|
In February 2016, the
FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees
to recognize a right-of-use asset and lease liability on their
balance sheet for all leases. The Group adopted this ASU on January
1, 2019 using the modified retrospective approach and will not
restate comparative periods.
|
Summary of
Unaudited Consolidated Cash Flow Data:
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
1,802,342
|
|
2,260,406
|
|
324,687
|
|
4,404,051
|
|
6,304,186
|
|
905,539
|
Net cash used in
investing activities
|
(3,330,041)
|
|
(2,042,872)
|
|
(293,440)
|
|
(12,872,633)
|
|
(3,664,213)
|
|
(526,331)
|
Net cash provided
by/(used in) financing activities
|
(153,225)
|
|
13,218
|
|
1,899
|
|
7,042,122
|
|
(1,982,306)
|
|
(284,740)
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
32,519
|
|
(12,890)
|
|
(1,852)
|
|
275,680
|
|
(3,207)
|
|
(461)
|
Net
increase/(decrease) in cash, cash equivalents and restricted
cash
|
(1,648,405)
|
|
217,862
|
|
31,294
|
|
(1,150,780)
|
|
654,460
|
|
94,007
|
Cash, cash
equivalents and restricted cash at beginning of period
|
6,271,359
|
|
5,059,552
|
|
726,759
|
|
5,773,734
|
|
4,622,954
|
|
664,046
|
Cash, cash
equivalents and restricted cash at end of period
|
4,622,954
|
|
5,277,414
|
|
758,053
|
|
4,622,954
|
|
5,277,414
|
|
758,053
|
Reconciliations of
GAAP and Non-GAAP Results
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
(in thousands, except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
1,278,854
|
|
2,316,844
|
|
332,793
|
|
4,387,912
|
|
5,671,267
|
|
814,627
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
10,876
|
|
10,800
|
|
1,551
|
|
249,478
|
|
316,666
|
|
45,486
|
Impairment of
investment in equity investee
|
—
|
|
56,026
|
|
8,048
|
|
—
|
|
56,026
|
|
8,048
|
(Gain)/loss on
disposal of equity investees and subsidiary, net of income
taxes
|
—
|
|
2,330
|
|
335
|
|
(436,277)
|
|
2,860
|
|
411
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain from
investment in equity investee
|
—
|
|
(754,468)
|
|
(108,373)
|
|
—
|
|
(754,468)
|
|
(108,373)
|
Adjusted net
income
|
1,289,730
|
|
1,631,532
|
|
234,354
|
|
4,201,113
|
|
5,292,351
|
|
760,199
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
1,278,854
|
|
2,316,844
|
|
332,793
|
|
4,387,912
|
|
5,671,267
|
|
814,627
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
243,940
|
|
366,459
|
|
52,639
|
|
809,005
|
|
1,210,040
|
|
173,811
|
Amortization
|
9,641
|
|
14,606
|
|
2,098
|
|
44,713
|
|
54,526
|
|
7,832
|
Interest
expenses
|
—
|
|
—
|
|
—
|
|
780
|
|
—
|
|
—
|
Income tax
expenses
|
222,639
|
|
331,337
|
|
47,594
|
|
929,133
|
|
1,078,295
|
|
154,887
|
EBITDA
|
1,755,074
|
|
3,029,246
|
|
435,124
|
|
6,171,543
|
|
8,014,128
|
|
1,151,157
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
10,876
|
|
10,800
|
|
1,551
|
|
249,478
|
|
316,666
|
|
45,486
|
Impairment of
investment in equity investee
|
—
|
|
56,026
|
|
8,048
|
|
—
|
|
56,026
|
|
8,048
|
(Gain)/loss on
disposal of equity investees and subsidiary, before income
taxes
|
—
|
|
2,330
|
|
335
|
|
(562,637)
|
|
2,860
|
|
411
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain from
investment in equity investee
|
—
|
|
(754,468)
|
|
(108,373)
|
|
—
|
|
(754,468)
|
|
(108,373)
|
Adjusted
EBITDA
|
1,765,950
|
|
2,343,934
|
|
336,685
|
|
5,858,384
|
|
7,635,212
|
|
1,096,729
|
|
Three Months Ended December 31,
|
|
Year Ended December 31,
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
(in thousands, except for share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to ordinary shareholders
|
1,275,542
|
|
2,326,422
|
|
334,169
|
|
4,383,025
|
|
5,674,145
|
|
815,040
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation expense
|
10,876
|
|
10,800
|
|
1,551
|
|
249,478
|
|
316,666
|
|
45,486
|
Impairment of
investment in equity investee
|
—
|
|
56,026
|
|
8,048
|
|
—
|
|
56,026
|
|
8,048
|
(Gain)/loss on
disposal of equity investees and subsidiary, net of income
taxes
|
—
|
|
2,330
|
|
335
|
|
(436,277)
|
|
2,860
|
|
411
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain from
investment in equity investee
|
—
|
|
(754,468)
|
|
(108,373)
|
|
—
|
|
(754,468)
|
|
(108,373)
|
Adjusted Net income
attributable to ordinary shareholders
|
1,286,418
|
|
1,641,110
|
|
235,730
|
|
4,196,226
|
|
5,295,229
|
|
760,612
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares used in calculating net earnings per ordinary
share/ADS
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
786,966,574
|
|
781,947,464
|
|
781,947,464
|
|
751,814,077
|
|
784,007,583
|
|
784,007,583
|
Diluted
|
787,966,142
|
|
782,403,824
|
|
782,403,824
|
|
752,672,956
|
|
784,331,120
|
|
784,331,120
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per
share/ADS attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.62
|
|
2.98
|
|
0.43
|
|
5.83
|
|
7.24
|
|
1.04
|
Diluted
|
1.62
|
|
2.97
|
|
0.43
|
|
5.82
|
|
7.23
|
|
1.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net earnings
per share/ADS attributable to ordinary shareholders
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
1.63
|
|
2.10
|
|
0.30
|
|
5.58
|
|
6.75
|
|
0.97
|
Diluted
|
1.63
|
|
2.10
|
|
0.30
|
|
5.58
|
|
6.75
|
|
0.97
|
For investor and media inquiries, please contact:
ZTO
Investor Relations Department
E-mail: ir@zto.com
Phone: +86 21 6978 7037
View original
content:http://www.prnewswire.com/news-releases/zto-reports-fourth-quarter-and-fiscal-year-2019-unaudited-financial-results-301025080.html
SOURCE ZTO Express (Cayman) Inc.