UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2019

 


 

Commission File Number: 001-37922

 


 

ZTO Express (Cayman) Inc.

 

Building One, No. 1685 Huazhi Road

Qingpu District

Shanghai, 201708

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F    x               Form 40-F    o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

ZTO Express (Cayman) Inc.

 

 

 

 

 

 

 

 

By:

/s/ Huiping Yan

 

 

Name:

Huiping Yan

 

 

Title:

Chief Financial Officer

 

 

 

 

Date: November 20, 2019

 

 

 

 

2


 

Exhibit Index

 

Exhibit 99.1 — Press Release

 

3


Exhibit 99.1

 

3.1 Billion Parcels to Expand Market Share 2.3 pts to 18.9%

Adjusted Net Income Increased 24.6% to Reach RMB1.32 Billion

 

ZTO Reports Third Quarter 2019 Unaudited Financial Results

 

Shanghai, November 19, 2019 — 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 third quarter ended September 30, 2019¹ The Company beat market expectations by generating parcel volume growth of 45.9%, or 18.4 percentage points faster than the industry average. Market share by parcel volume expanded to 18.9% during the third quarter of 2019. Adjusted net income increased 24.6% to reach RMB1,318.5 million.

 

Third Quarter 2019 Financial Highlights

 

·                                                                                          Revenues were RMB5,265.8 million (US$736.7 million), an increase of 24.4% from RMB4,234.6 million in the same period of 2018

·                                                                                          Gross profit was RMB1,596.9 million (US$223.4 million), an increase of 20.5% from RMB1,325.3 million in the same period of 2018

·                                                                                          Net income was RMB 1,307.7 million (US$183.0 million), an increase of 23.4% from RMB 1,059.4 million in the same period of 2018

·                                                                                          Adjusted EBITDA2 was RMB1,887.5 million (US$264.1 million), an increase of 28.1% from RMB1,473.1 million in the same period of 2018

·                                                                                          Adjusted net income3 was RMB 1,318.5 million (US$184.5 million), an increase of 24.6% from RMB1,058.5 million in the same period of 2018

·                                                                                          Basic and diluted earnings per American depositary share (“ADS”4) attributable to ordinary shareholders were RMB1.67 (US$0.23), an increase of 23.7% and 24.6% from RMB1.35 and RMB1.34 in the same period of 2018, respectively

·                                                                                          Adjusted basic and diluted earnings per American depositary share5 attributable to ordinary shareholders were RMB1.69 (US$0.24), an increase of 25.2% and 26.1% from RMB1.35 and RMB1.34 in the same period of 2018, respectively

·                                                                                          Net cash provided by operating activities was RMB1,417.7 million (US$198.3 million), compared with RMB911.7 million in the same period of 2018

 

Operational Highlights for Third quarter 2019

 

·                                                                                          Parcel volume was 3,057.9 million, an increase of 45.9% from 2,095.9 million in the same period of 2018

·                                                                                          Number of pickup/delivery outlets was approximately 30,000 as of September 30, 2019, while the number of direct network partners was approximately 4,750 as of September 30, 2019

·                                                                                          Number of line-haul vehicles was over 6,600 as of September 30, 2019, which included over 5,700 self-owned vehicles and over 900 vehicles owned and operated by Tonglu Tongze Logistics Ltd., a transportation operator that works exclusively for ZTO. Among the 6,600 vehicles, over 3,950 were high capacity 15-to-17-meter-long trailer trucks compared to over 3,150 as of June 30, 2019

·                                                                                          Number of line-haul routes between sorting hubs was over 2,400 as of September 30, 2019

·                                                                                          Number of sorting hubs was 89 as of September 30, 2019, among which 80 are operated by the Company and the other nine 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 “ZTO’s market share by parcel volume expanded 2.3 percentage points to 18.9% during the third quarter of 2019. With the strong partnership with thousands of our network partners, ZTO delivered sound execution on our corporate strategy by maintaining high quality of services and achieving targeted net earnings growth as we continue to strengthen our industry leadership.”

 

Mr. Lai added, “Since the founding of our business 17 years ago, we have followed the philosophy of taking control of our own destiny and invest wisely in the future. Throughout the years, we have consistently built infrastructure that are suitable to the stage of market development and operational needs, and we have not only cumulated valuable resources but also developed ability to leverage and maximize value creation and recreation by consolidating resources and expand on our product and service capabilities.  We believe that the Chinese express delivery industry and the Chinese logistic industry have great potential for further steady growth as Chinese economy continue to expand. ZTO is on one hand focusing on execution of our near-term strategies surrounding last mile effectiveness including courier advantages, we are also working towards our longer-term goal of becoming a world-leading comprehensive logistics service provider.”

 

Ms. Huiping Yan, Chief Financial Officer of ZTO, added, “ZTO is increasingly benefiting from its brand recognition for wide service coverage and deep penetration into the Chinese express delivery industry.  We are on track to deliver another year of strong volume and solid profit growth based on the first three quarters performances and the most recent assessment of the market and operational conditions for the rest of 2019.  Supported by the increase in economies of scale, consistent cost productivity gain and corporate structure efficiency, we are able to dampen the impact of price pressure and achieve healthy net income growth. Combined sorting hub and line-haul transportation costs per parcel declined 10.7% year over year, and corporate SG&A, excluding share-based compensation, was 5.3% of total revenues down from 5.6% last year. Adjusted net income rose 24.6% to RMB1.32 billion, and cash from operating activities rose 55.5% to RMB1.42 billion.”

 

Third Quarter 2019 Financial Results

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2019

 

2018

 

2019

 

 

 

RMB

 

%

 

RMB

 

US$

 

%

 

RMB

 

%

 

RMB

 

US$

 

%

 

 

 

(in thousands, except percentages)

 

Express delivery services

 

3,688,358

 

87.1

 

4,675,993

 

654,195

 

88.8

 

10,439,890

 

87.2

 

13,499,267

 

1,888,617

 

88.4

 

Freight forwarding services

 

291,153

 

6.9

 

274,356

 

38,384

 

5.2

 

886,216

 

7.4

 

913,758

 

127,839

 

6.0

 

Sale of accessories

 

199,997

 

4.7

 

276,452

 

38,677

 

5.3

 

560,059

 

4.7

 

777,859

 

108,826

 

5.1

 

Others

 

55,088

 

1.3

 

38,959

 

5,451

 

0.7

 

90,754

 

0.7

 

72,546

 

10,150

 

0.5

 

Total revenues

 

4,234,596

 

100.0

 

5,265,760

 

736,707

 

100.0

 

11,976,919

 

100.0

 

15,263,430

 

2,135,432

 

100.0

 

 

Revenues were RMB5,265.8 million (US$736.7 million), an increase of 24.4% from RMB4,234.6 million in the same period of 2018. Revenue from express delivery services increased by 26.8% compared to the same period of 2018, mainly driven by a 45.9% increase in parcel volume and partially offset by a 13.2% decrease in unit price per parcel largely for incremental volume incentives in response to competition. Revenue from freight forwarding services decreased 5.8% when compared to the same period of 2018. The increase in revenue from sales of accessories was in-line with the increase in the sale of thermal paper used for the printing of digital waybills. Other revenues are mainly associated with equipment sales, financing services and advertising services.

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2019

 

2018

 

2019

 

 

 

RMB

 

% of
revenues

 

RMB

 

US$

 

% of
revenues

 

RMB

 

% of
revenues

 

RMB

 

US$

 

% of
revenues

 

 

 

(in thousands, except percentages)

 

Line-haul transportation cost

 

1,354,209

 

32.0

 

1,783,180

 

249,476

 

33.9

 

3,810,114

 

31.8

 

5,073,052

 

709,746

 

33.2

 

Sorting hub cost

 

765,863

 

18.1

 

978,417

 

136,886

 

18.6

 

2,154,262

 

18.0

 

2,823,387

 

395,007

 

18.5

 

Freight forwarding cost

 

281,967

 

6.7

 

265,426

 

37,134

 

5.0

 

853,985

 

7.1

 

893,823

 

125,050

 

5.9

 

Cost of accessories sold

 

119,211

 

2.8

 

138,112

 

19,323

 

2.6

 

333,651

 

2.8

 

414,169

 

57,944

 

2.7

 

Other costs

 

388,032

 

9.2

 

503,686

 

70,468

 

9.6

 

1,010,213

 

8.4

 

1,433,901

 

200,610

 

9.4

 

Total cost of revenues

 

2,909,282

 

68.8

 

3,668,821

 

513,287

 

69.7

 

8,162,225

 

68.1

 

10,638,332

 

1,488,357

 

69.7

 

 

Total cost of revenues was RMB3,668.8 million (US$ 513.3million), an increase of 26.1% from RMB2,909.3 million in the same period last year.

 

·                  Line haul transportation cost was RMB1,783.2 million (US$249.5 million), an increase of 31.7% from RMB1,354.2 million in the same period last year. Higher usage of self-owned fleet with increasing number of higher-capacity trailer trucks, improved line-haul route planning and better load rate enhanced the transportation cost leverage.

 


 

·                  Sorting hub operating cost was RMB978.4 million (US$136.9 million), an increase of 27.8% or RMB 212.6 million from RMB765.9 million in the same period last year. Of this increase: (i) RMB130.1 million (US$18.2 million) was associated with sorting hub labor costs, the headcount of sorting hub workers increased 16.7% year over year, much slower than the 45.9% volume increase; and (ii) RMB40.8 million (US$5.7 million) came from depreciation costs associated with the newly installed automated sorting equipment. As of September 30, 2019, 208 sets of automated sorting equipment have been put into use, compared to 78 sets as of September 30, 2018.

 

·                  Cost of accessories was RMB138.1 million (US$19.3 million), an increase of 15.9% from RMB119.2 million in the same period last year.

 

·                  Other costs were RMB503.7 million (US$70.5 million), an increase of RMB115.7 million (US$16.2 million) compared to the same period last year, which mainly resulted from (i) an increase of RMB66.4 million (US$9.3 million) in dispatching costs associated with serving enterprise customers, (ii) an increase of RMB57.8 million (US$8.1 million) in expenses related to IT and technology development.  The Company increased its level of investment in IT research and development to support digitized operational management.

 

Gross Profit was RMB1,596.9 million (US$223.4 million), an increase of 20.5% from RMB1,325.3million in the same period last year. Gross margin rate decreased one percentage point to 30.3% from 31.3% year over year, as a net result of parcel volume growth, increase in volume incentives and cost productivity gains.

 

Total Operating Expenses were RMB196.4 million (US$27.5 million), compared to RMB233.6 million in the same period last year.

 

·                  Selling, general and administrative expenses were RMB290.9 million (US$40.7 million), compared to RMB249.5 million in the same period last year. The increase was mainly due to an increase in salaries and accrued performance-based bonuses from RMB142.4 million to RMB154.3 million (US$21.6 million). Selling, general and administrative expenses, excluding share-based compensation expense accounted for 5.3% of total revenues compared to 5.6% during the same period last year.

 

·                  Other operating income, net was RMB94.5 million (US$13.2 million) for the quarter which was mainly consisted of government subsidies and tax rebates of RMB84.8 million (US$11.9 million) received in the third quarter of 2019

 

Income from operations was RMB1,400.5 million (US$195.9 million), an increase of 28.3% from RMB1,091.7 million for the same period last year. Operating margin rate increased by 0.8 percentage point to 26.6% year over year while the gross margin rate decreased by 1.0 percentage points. This demonstrated sound corporate cost control and healthy economy of scale.

 

Interest income was RMB146.4 million (US$20.5 million), compared with RMB124.0 million in the same period in 2018.

 

Foreign currency exchange gain, before tax was RMB28.5million (US$4.0 million) in the third quarter of 2019, resulted from the appreciation of the U.S. dollar against the Chinese renminbi in the third quarter of 2019.

 

Income tax expenses were RMB266.3 million (US$37.3 million) and the effective income tax rate was 16.9% for the third quarter of 2019.

 

Net income was RMB1,307.7 million (US$183.0 million), an increase of 23.4% from RMB1,059.4 million in the same period last year.

 

Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB1.67 (US$0.23), compared with basic and diluted earnings per ADS attributable to ordinary shareholders of RMB1.35 and RMB1.34in the same period last year, respectively.

 

Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB1.69 (US$0.24), compared with adjusted basic and diluted earnings per ADS attributable to ordinary shareholders of RMB1.35 and RMB1.34 in the same period last year, respectively.

 

Adjusted net income was RMB1,318.5 million (US$184.5 million), compared with adjusted net income of RMB1,058.5 million during the same period last year.

 

EBITDA was RMB1,876.7 million (US$262.6 million), compared with RMB1,475.1 million in the same period last year.

 

Adjusted EBITDA was RMB1,887.5 million (US$264.1 million), compared to RMB1,473.1 million in the same period last year.

 


 

Net cash provided by operating activities was RMB1,417.7 million (US$198.3 million), compared with RMB911.7 million in the same period last year.

 

Business Outlook

 

The Company makes no changes to its previously stated annual guidance: parcel volume for 2019 is expected to be in the range of 11.51 billion to 11.93 billion, representing a 35% to 40% increase year over year, and the Company’s adjusted net income is expected to be in the range of RMB4.8 billion to RMB5.2 billion, representing a 14.3% to 23.8% increase from the same period of 2018. Above estimates are subject to change.

 

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 September 30, 2019, the Company has purchased an aggregate of 7,716,436 ADSs at an average purchase price of US$17.33, including repurchase commissions.

 

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 RMB7.1477 to US$1.00, the noon buying rate on September 30, 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, adjusted net income, and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders, 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, adjusted net income and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders 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, adjusted net income and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders 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, adjusted net income and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders 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, adjusted net income and adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders 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 8:00 P.M. U.S. Eastern Time on Monday, November 18, 2019 or 9:00 A.M. Beijing Time on Tuesday, November 19, 2019.

 

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:

8033711

 

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 accessible through November 25, 2019 by dialing the following numbers:

 

United States:

1-877-344-7529

International:

1-412-317-0088

Passcode:

10133925

 

A live and archived webcast of the conference call will also be available at the Company’s investor relations website 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 third quarter 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. The financial results to which this news release is related 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 September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2019

 

2018

 

2019

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

(in thousands, except for share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

4,234,596

 

5,265,760

 

736,707

 

11,976,919

 

15,263,430

 

2,135,432

 

Cost of revenues

 

(2,909,282

)

(3,668,821

)

(513,287

)

(8,162,225

)

(10,638,332

)

(1,488,357

)

Gross profit

 

1,325,314

 

1,596,939

 

223,420

 

3,814,694

 

4,625,098

 

647,075

 

Operating income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

(249,493

)

(290,893

)

(40,697

)

(934,292

)

(1,154,021

)

(161,453

)

Other operating income, net

 

15,918

 

94,469

 

13,217

 

98,598

 

182,102

 

25,477

 

Total operating expenses

 

(233,575

)

(196,424

)

(27,480

)

(835,694

)

(971,919

)

(135,976

)

Income from operations

 

1,091,739

 

1,400,515

 

195,940

 

2,979,000

 

3,653,179

 

511,099

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

123,995

 

146,372

 

20,478

 

255,024

 

437,313

 

61,182

 

Interest expense

 

(4

)

 

 

(780

)

 

 

Gain/(loss) on disposal of equity investees

 

12,904

 

 

 

562,637

 

(529

)

(74

)

Foreign currency exchange gain, before tax

 

40,382

 

28,511

 

3,989

 

39,530

 

24,850

 

3,477

 

Income before income tax, and share of loss in equity method investments

 

1,269,016

 

1,575,398

 

220,407

 

3,835,411

 

4,114,813

 

575,684

 

Income tax expense

 

(201,355

)

(266,297

)

(37,256

)

(706,494

)

(746,958

)

(104,503

)

Share of loss in equity method investments

 

(8,286

)

(1,420

)

(199

)

(19,859

)

(13,433

)

(1,879

)

Net income

 

1,059,375

 

1,307,681

 

182,952

 

3,109,058

 

3,354,422

 

469,302

 

Net income/(loss) attributable to noncontrolling interests

 

262

 

(153

)

(21

)

(1,575

)

(6,700

)

(937

)

Net income attributable to ZTO Express (Cayman) Inc.

 

1,059,637

 

1,307,528

 

182,931

 

3,107,483

 

3,347,722

 

468,365

 

Net earnings per share attributable to ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1.35

 

1.67

 

0.23

 

4.20

 

4.27

 

0.60

 

Diluted

 

1.34

 

1.67

 

0.23

 

4.19

 

4.26

 

0.60

 

Weighted average shares used in calculating net earnings per ordinary share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

787,163,859

 

782,011,037

 

782,011,037

 

739,967,814

 

784,701,835

 

784,701,835

 

Diluted

 

788,144,763

 

782,389,377

 

782,389,377

 

740,779,797

 

784,981,054

 

784,981,054

 

Other comprehensive income, net of tax of nil:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

556,140

 

480,712

 

67,254

 

844,123

 

429,859

 

60,139

 

Comprehensive income

 

1,615,515

 

1,788,393

 

250,206

 

3,953,181

 

3,784,281

 

529,441

 

Comprehensive income attributable to noncontrolling interests

 

262

 

(153

)

(21

)

(1,575

)

(6,700

)

(937

)

Comprehensive income attributable to ZTO Express (Cayman) Inc.

 

1,615,777

 

1,788,240

 

250,185

 

3,951,606

 

3,777,581

 

528,504

 

 


 

Unaudited Consolidated Balance Sheets Data:

 

 

 

As of

 

 

 

December 31,
2018

 

September 30, 2019

 

 

 

RMB

 

RMB

 

US$

 

 

 

(in thousands, except for share and per share data)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

4,622,554

 

5,058,640

 

707,730

 

Restricted cash

 

400

 

912

 

128

 

Accounts receivable, net of allowance for doubtful accounts of RMB13,996 and RMB13,525 at December 31, 2018 and September 30, 2019, respectively

 

596,995

 

538,063

 

75,278

 

Financing receivables, net of allowance for doubtful accounts of RMB4,139 and RMB13,369 at December 31, 2018 and September 30, 2019, respectively

 

517,983

 

477,259

 

66,771

 

Short-term investment

 

13,599,852

 

11,304,068

 

1,581,497

 

Inventories

 

43,813

 

35,954

 

5,030

 

Advances to suppliers

 

337,874

 

341,216

 

47,738

 

Prepayments and other current assets

 

1,507,996

 

1,666,941

 

233,213

 

Amounts due from related parties

 

6,600

 

87,017

 

12,174

 

Total current assets

 

21,234,067

 

19,510,070

 

2,729,559

 

Investments in equity investees

 

2,207,410

 

2,228,272

 

311,747

 

Property and equipment, net

 

9,035,704

 

10,906,604

 

1,525,890

 

Land use rights, net

 

1,969,176

 

2,309,558

 

323,119

 

Intangible assets, net

 

54,227

 

49,578

 

6,936

 

Right-of-use assets6

 

 

726,375

 

101,624

 

Goodwill

 

4,241,541

 

4,241,541

 

593,413

 

Deferred tax assets

 

318,063

 

360,334

 

50,413

 

Other non-current assets

 

622,669

 

2,149,305

 

300,697

 

TOTAL ASSETS

 

39,682,857

 

42,481,637

 

5,943,398

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable

 

1,311,807

 

1,071,867

 

149,960

 

Advances from customers

 

436,710

 

990,764

 

138,613

 

Income tax payable

 

405,683

 

117,064

 

16,378

 

Amounts due to related parties

 

132,216

 

44,548

 

6,232

 

Lease liabilities6

 

 

281,352

 

39,363

 

Acquisition consideration payable

 

19,581

 

22,942

 

3,210

 

Dividends payable

 

1,699

 

1,672

 

234

 

Other current liabilities

 

2,833,769

 

2,948,569

 

412,520

 

Total current liabilities

 

5,141,465

 

5,478,778

 

766,510

 

Lease liabilities6

 

 

365,715

 

51,165

 

Deferred tax liabilities

 

157,940

 

154,236

 

21,578

 

Acquisition consideration payable

 

22,942

 

 

 

Other non-current liabilities

 

90,961

 

94,562

 

13,230

 

TOTAL LIABILITIES

 

5,413,308

 

6,093,291

 

852,483

 

 


(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.

 


 

 

 

As of

 

 

 

December 31,
2018

 

September 30, 2019

 

 

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

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 September 30, 2019)

 

523

 

517

 

72

 

Additional paid-in capital

 

24,137,681

 

22,325,786

 

3,123,492

 

Treasury shares, at cost

 

(1,545,077

)

(1,436,767

)

(201,011

)

Retained earnings

 

11,052,395

 

14,400,117

 

2,014,650

 

Accumulated other comprehensive income

 

571,716

 

1,001,575

 

140,125

 

ZTO Express (Cayman) Inc. shareholders’ equity

 

34,217,238

 

36,291,228

 

5,077,328

 

Noncontrolling interests

 

52,311

 

97,118

 

13,587

 

Total Equity

 

34,269,549

 

36,388,346

 

5,090,915

 

TOTAL LIABILITIES AND EQUITY

 

39,682,857

 

42,481,637

 

5,943,398

 

 

Summary of Unaudited Consolidated Cash Flow Data:

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2019

 

2018

 

2019

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

911,741

 

1,417,706

 

198,345

 

2,601,711

 

4,043,780

 

565,746

 

Net cash used in investing activities7

 

(2,295,672

)

(4,015,458

)

(561,783

)

(9,542,593

)

(1,621,341

)

(226,834

)

Net cash provided by/ (used in) financing activities

 

1,380,280

 

511,528

 

71,565

 

7,195,347

 

(1,995,524

)

(279,184

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

101,353

 

33,113

 

4,633

 

243,160

 

9,683

 

1,355

 

Net increase/(decrease) in cash, cash equivalents and restricted cash

 

97,702

 

(2,053,111

)

(287,240

)

497,625

 

436,598

 

61,083

 

Cash, cash equivalents and restricted cash at beginning of period

 

6,173,657

 

7,112,663

 

995,098

 

5,773,734

 

4,622,954

 

646,775

 

Cash, cash equivalents and restricted cash at end of period

 

6,271,359

 

5,059,552

 

707,858

 

6,271,359

 

5,059,552

 

707,858

 

 


(7) The amount of cash provided by investing activities mainly includes mature of the fixed term bank deposits with an original maturity of three months to one year. For the third quarter of 2019, the amounts of cash flow out for purchasing the short-term investment are approximately RMB1,613.3 million (US$225.7 million), and the amounts of cash flow out for purchasing the short-term investment are approximately RMB1,857.9 million in the same period last year.

 


 

Reconciliations of GAAP and Non-GAAP Results

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2018

 

2019

 

2018

 

2019

 

 

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

(in thousands, except for share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

1,059,375

 

1,307,681

 

182,952

 

3,109,058

 

3,354,422

 

469,302

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

10,876

 

10,800

 

1,511

 

238,603

 

305,865

 

42,792

 

(Gain)/loss on disposal of equity investees, net of income taxes

 

(11,756

)

 

 

(436,277

)

529

 

74

 

Adjusted net income

 

1,058,495

 

1,318,481

 

184,463

 

2,911,384

 

3,660,816

 

512,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

1,059,375

 

1,307,681

 

182,952

 

3,109,058

 

3,354,422

 

469,302

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

202,669

 

288,749

 

40,397

 

565,066

 

843,581

 

118,021

 

Amortization

 

11,709

 

13,951

 

1,952

 

35,072

 

39,920

 

5,585

 

Interest expenses

 

4

 

 

 

780

 

 

 

Income tax expenses

 

201,355

 

266,297

 

37,256

 

706,494

 

746,958

 

104,503

 

EBITDA

 

1,475,112

 

1,876,678

 

262,557

 

4,416,470

 

4,984,881

 

697,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

10,876

 

10,800

 

1,511

 

238,603

 

305,865

 

42,792

 

(Gain)/loss on disposal of equity investees, before income taxes

 

(12,904

)

 

 

(562,637

)

529

 

74

 

Adjusted EBITDA

 

1,473,084

 

1,887,478

 

264,068

 

4,092,436

 

5,291,275

 

740,277

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

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

 

1,059,637

 

1,307,528

 

182,931

 

3,107,483

 

3,347,722

 

468,365

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation expense

 

10,876

 

10,800

 

1,511

 

238,603

 

305,865

 

42,792

 

(Gain)/loss on disposal of equity investees, net of income taxes

 

(11,756

)

 

 

(436,277

)

529

 

74

 

Adjusted net income attributable to ordinary shareholders

 

1,058,757

 

1,318,328

 

184,442

 

2,909,809

 

3,654,116

 

511,231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in calculating net earnings per ordinary share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

787,163,859

 

782,011,037

 

782,011,037

 

739,967,814

 

784,701,835

 

784,701,835

 

Diluted

 

788,144,763

 

782,389,377

 

782,389,377

 

740,779,797

 

784,981,054

 

784,981,054

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share attributable to ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1.35

 

1.67

 

0.23

 

4.20

 

4.27

 

0.60

 

Diluted

 

1.34

 

1.67

 

0.23

 

4.19

 

4.26

 

0.60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net earnings per share attributable to ordinary shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1.35

 

1.69

 

0.24

 

3.93

 

4.66

 

0.65

 

Diluted

 

1.34

 

1.69

 

0.24

 

3.93

 

4.66

 

0.65

 

 

For investor and media inquiries, please contact:

 

ZTO

Investor Relations Department

E-mail: ir@zto.com