ZTO Reports Second Quarter 2017 Unaudited Financial Results

SHANGHAI, Aug. 22, 2017 /PRNewswire/ -- ZTO Express (Cayman) Inc. (NYSE: ZTO) ("ZTO" or the "Company"), a leading and fast-growing express delivery company in China, today announced its unaudited financial results for the second quarter ended June 30, 20171.

Second Quarter 2017 Financial Highlights

  • Revenues were RMB2,971.4 million (US$438.3 million), an increase of 29.9% from the same period of 2016.
  • Gross profit was RMB1,123.9 million (US$165.8 million), an increase of 35.8% from RMB827.8 million in the same period of 2016.
  • Net income was RMB716.9 million (US$105.8 million), an increase of 68.4% from RMB425.8 million in the same period of 2016.
  • Adjusted EBITDA2 was RMB1,104.6 million (US$162.9 million), an increase of 46.6% from RMB753.7 million in the same period of 2016.
  • Adjusted net income3 was RMB730.4 million (US$107.7 million), an increase of 43.5% from RMB509.2 million in the same period of 2016.
  • Basic and diluted earnings per American depositary share ("ADS"4) were RMB1.00 (US$0.15), an increase of 66.7% from RMB0.60 in the same period of 2016.
  • Net cash provided by operating activities was RMB903.2 million (US$133.2 million), compared with RMB278.5 million in the same period of 2016.

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 (i) shared-based compensation expense; and (ii) gain on deemed disposal of equity method investments.

3   Adjusted net income is a non-GAAP financial measure, which is defined as net income before (i) share-based compensation expense and (ii) gain on deemed disposal of equity method investments.

4   One ADS represents one Class A ordinary share.

Second Quarter 2017 Operational Highlights

  • Parcel volume in the second quarter of 2017 was 1,493 million, an increase of 37.6% from 1,085 million in the same period of 2016.
  • Number of pickup/delivery outlets was approximately 28,000 as of June 30, 2017.
  • Number of network partners was over 9,300, which included over 3,700 direct network partners and over 5,600 indirect network partners as of June 30, 2017.
  • Number of line-haul vehicles was over 4,380 as of June 30, 2017, which included around 3,190 self-owned vehicles and around 1,190 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 3,190 as of June 30, 2017 from 3,000 as of March 31, 2017. Among the self-owned trucks, over 1,260 were high capacity 15-17 meter long models as of June 30, 2017, compared to over 1,200 as of March 31, 2017.
  • Number of line-haul routes between sorting hubs was over 1,780 as of June 30, 2017.
  • Number of sorting hubs was 77 as of June 30, 2017, among which 71 are operated by the Company and 6 by the Company's network partners.

"Our business continued to gain growth momentum with parcel volume growth again exceeding the industry average," commented Mr. Meisong Lai, founder and Chief Executive Officer. "Our parcel volume grew by 37.6% year-over-year during the quarter, well above the increase of 30.7% for the industry overall during the same period. Our market share continued to expand as well, underlining just how effective our strategy of balancing growth with service quality and profitability is in strengthening our industry-leading position and aligning the interest of our network partners with ZTO. We continued to optimize parcel mix during the quarter by focusing more on more profitable parcels to improve efficiency and lower unit cost. This resulted in lower average revenue per parcel as parcel weight fell, but our margins continued to expand thanks to our economies of scale and the various cost cutting measures we have been implementing, all without affecting the high quality service we are known for. According to data published by the PRC State Post Bureau, ZTO once again received one of the highest scores for customer satisfaction among the major express delivery companies in China during the quarter. We are increasingly benefiting from our economies of scale and lower unit operating costs. We continue to strengthen our cost leadership position by improving operational efficiency with more automated sorting equipment, putting more of our self-owned fleet on the road instead of outsourced transportation, and increasing the use of digital waybills. These measures contributed to a decrease in cost of revenue per parcel to RMB1.24 during the quarter from RMB1.34 in the same period last year."   

"Our financial performance during the quarter demonstrates how we are benefiting from larger economies of scale and our cost cutting measures," commented Mr. James Guo, Chief Financial Officer of ZTO. "This is especially evident with the expansion of our margins. Our gross margin, operating margin, net margin and non-GAAP net margin expanded to 37.8%, 31.0%, 24.1% and 24.6%, respectively, compared to 36.2%, 26.3%, 18.6% and 22.3%, respectively, during the same period last year."  

Second Quarter 2017 Financial Results

   

Three Months Ended June 30,

 

Six Months Ended June 30,

 
   

2016

 

2017

 

2016

 

2017

 
   

RMB

 

%

 

RMB

 

US$

 

%

 

RMB

 

%

 

RMB

 

US$

 

%

 
   

(in thousands, except percentages)

 

Express delivery services

 

2,188,817

 

95.7

 

2,837,699

 

418,583

 

95.5

 

4,083,407

 

96.2

 

5,348,367

 

788,926

 

95.7

 

Sale of accessories

 

97,812

 

4.3

 

133,735

 

19,727

 

4.5

 

161,770

 

3.8

 

237,661

 

35,057

 

4.3

 

Total revenues

 

2,286,629

 

100.0

 

2,971,434

 

438,310

 

100.0

 

4,245,177

 

100.0

 

5,586,028

 

823,983

 

100.0

 

Revenues were RMB2,971.4 million (US$438.3 million), an increase of 29.9% from RMB2,286.6 million in the same period of 2016. The increase was mainly driven by an increase in parcel volume as a result of overall market growth and an increase in the Company's market share in terms of parcel volume. The Company's parcel volume grew to 1,493 million during the second quarter of 2017, an increase of 37.6% from 1,085 million in the same period of 2016.

   

Three Months Ended June 30,

 

Six Months Ended June 30,

 
   

2016

 

2017

 

2016

 

2017

 
   

RMB

 

% of
revenues

 

RMB

 

US$

 

% of
revenues

 

RMB

 

% of
revenues

 

RMB

 

US$

 

% of
revenues

 
   

(in thousands, except percentages)

 

Line-haul transportation
   
cost

 

822,625

 

36.0

 

1,062,504

 

156,728

 

35.8

 

1,604,216

 

37.8

 

2,182,592

 

321,950

 

39.1

 

Sorting hub cost

 

452,652

 

19.8

 

527,868

 

77,865

 

17.8

 

885,363

 

20.9

 

1,084,054

 

159,906

 

19.4

 

Cost of accessories sold

 

72,149

 

3.1

 

83,685

 

12,344

 

2.8

 

118,540

 

2.8

 

146,134

 

21,556

 

2.6

 

Other costs

 

111,384

 

4.9

 

173,468

 

25,587

 

5.8

 

207,791

 

4.9

 

318,690

 

47,009

 

5.7

 

Total cost of revenues

 

1,458,810

 

63.8

 

1,847,525

 

272,524

 

62.2

 

2,815,910

 

66.4

 

3,731,470

 

550,421

 

66.8

 

Total cost of revenues were RMB1,847.5 million (US$272.5 million), an increase of 26.6% from RMB1,458.8 million in the same period last year. The increase was primarily a result of increases in line-haul transportation costs, sorting hub operating costs, cost of accessories sold, and other costs, which were partially offset by a decrease in waybill material cost due to the increased use of digital waybills by the Company's end customers which bear lower costs than paper waybills.

  • Line haul transportation cost was RMB1,062.5 million (US$156.7 million), an increase of 29.2% from RMB822.6 million in the same period last year. The increase was mainly due to an increase of RMB206.8 million (US$30.5 million) in costs associated with the Company's self-owned fleet which includes fuel, tolls, drivers' compensation, depreciation and maintenance expenses, and an increase of RMB62.6 million (US$9.2 million) in outsourced transportation costs. Line haul transportation cost increased at a lower rate than parcel volume as the Company continues to optimize parcel mix by focusing more on profitable parcels. As a percentage of revenues, line haul transportation cost accounted for 35.8%, a decrease from 36.0% in the same period last year, mainly due to (i) economies of scale, (ii) increased use of self-owned, more cost-efficient, higher capacity trailer trucks in place of third-party trucks and outsourced transportation, and (iii) increased truck utilization through optimized route planning and increased back-haul transportation.
                                                                                      
  • Sorting hub operating cost was RMB527.9 million (US$77.9 million), an increase of 16.6% from RMB452.7 million in the same period last year. The increase was mainly due to (i) increased labor costs of RMB22.7 million (US$3.3 million) as a result of an increase in headcount; (ii) an RMB30.7 million (US$4.5 million) increase in depreciation and amortization costs, and (iii) an increase of RMB11.4 million (US$1.7 million) in rental and related utilities costs. As a percentage of revenues, sorting hub operating cost accounted for 17.8%, a decrease from 19.8% in the same period last year, mainly due to economies of scale and improved operating efficiency as a result of the increased use of automation in the Company's sorting facilities.
                                                                                 
  • Cost of accessories was RMB83.7 million (US$12.3 million), an increase of 16.0% from RMB72.1 million in the same period last year. The increase was in line with growth in the Company's revenue from the sale of accessories to its network partners, which includes thermal paper for digital waybill printing, portable bar code readers, and ZTO-branded packaging materials and uniforms. As a percentage of revenues, cost of accessories accounted for 2.8%, a decrease from 3.1% in the same period last year.
                                                                                                    
  • Other costs were RMB173.5 million (US$25.6 million), an increase of 55.7% from RMB111.4 million in the same period last year, primarily due to an increase in dispatching costs associated with serving enterprise customers, which were partially offset by a decrease in costs associated with the increased use of digital waybills.

Gross Profit was RMB1,123.9 million (US$165.8 million), an increase of 35.8% from RMB827.8 million in the same period last year. Gross margin increased to 37.8% from 36.2% in the same period last year, mainly attributable to the decrease in line-haul transportation cost and sorting hub cost.

Total Operating Expenses were RMB202.6 million (US$29.9 million), a decrease of 10.2% from RMB225.7 million in the same period last year.

  • Selling, general and administrative expenses were RMB202.7 million (US$29.9 million), a decrease of 7.1% from RMB218.1 million in the same period last year. The decrease was mainly due to a decrease in share-based compensation expenses from RMB83.4 million in the second quarter of 2016 to RMB13.5 million in the second quarter of 2017. The decrease in share-based compensation expenses was partially offset by an increase in other employee compensation expenses including accrual of cost saving incentives and bonuses of RMB49.4 million, and a provision for bad debt expense of RMB7.0 million in the second quarter of 2017. As a percentage of revenue, selling, general and administrative expenses accounted for 6.8%, compared to 9.5% during the same period last year, primarily due to reduced share-based compensation expenses and higher operating leverage.

Income from operations was RMB921.3 million (US$135.9 million), an increase of 53.0% from RMB602.1 million in the same period last year. Operating margin increased to 31.0% from 26.3% in the same period last year, primarily due to increases in economies of scale and continuous improvement in operating efficiency.

Interest income was RMB39.6 million (US$5.8 million), compared with RMB11.8 million in the same period in 2016, primarily due to the increased amount of cash and bank deposits available for investment since the Company's initial public offering in October 2016.

Interest expense was RMB5.0 million (US$0.7 million), compared with RMB4.7 million in the same period in 2016.

Foreign currency exchange loss, before tax was RMB2.9 million (US$0.4 million), which was mainly due to the depreciation of the U.S. dollar against the Chinese Renminbi.

Net income was RMB716.9 million (US$105.8 million), compared with RMB425.8 million in the same period last year.

Basic and diluted earnings per ADS were RMB1.00 (US$0.15), compared with basic and diluted earnings per ADS of RMB0.60 in the same period last year.

Adjusted net income was RMB730.4 million (US$107.7 million), compared with adjusted net income of RMB509.2 million during the same quarter last year.

EBITDA was RMB1,091.1million (US$160.9 million), compared with RMB670.3 million in the same period last year.

Adjusted EBITDA was RMB1,104.6million (US$162.9 million), compared to RMB753.7 million in the same period last year.

Net cash provided by operating activities was RMB903.2million (US$133.2million), compared with 278.5 million in the same period last year, mainly attributable to growth in net income and increased deposits for last-mile delivery fees.

Business Outlook

Based on current market conditions and current operations, revenues for the third quarter of 2017 is expected to be in the range of RMB2.9 billion (US$427.8 million) to RMB3.0 billion (US$442.5 million), representing a 23.2 % to 27.5% increase from the same period of 2016. This represents management's current and preliminary view, which is subject to change.

Company Share Purchase

On May 21, 2017, the Company announced a new share repurchase program whereby ZTO is authorized to repurchase its own Class A ordinary shares in the form of ADSs with an aggregate value of up to US$300 million during the 12-month period thereafter. As of June 30, 2017, the Company has purchased an aggregate of 2,623,414 ADSs at an average purchase price of US$14.33.

The Company believes that the share repurchase program represents ZTO's confidence in its cash flow and the long-term outlook for the express delivery industry in China. ZTO's fast-growing strategy, asset-light business model and solid operations allow the Company to generate strong cash flow. The Company believes that the share repurchase program is consistent with the goal of increasing shareholders' value.

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 RMB6.7793 to US$1.00, the noon buying rate on June 30, 2017 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 Tuesday, August 22, 2017 (9:00 AM Beijing Time on August 23, 2017).

Dial-in details for the earnings conference call are as follows:

United States:

1-888-317-6003

Hong Kong:

852-5808-1995

China:

4001-206115

International:

1-412-317-6061

Passcode:

6665002

Please dial in ten 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 August 29, 2017:

United States:

1-877-344-7529

   

International:

1-412-317-0088

   

Passcode:

10111460

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 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 second quarter of 2017 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 June 30,

 

Six Months Ended June 30,

 
   

2016

 

2017

 

2016

 

2017

 
   

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 
   

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

 
                           

Revenues

 

2,286,629

 

2,971,434

 

438,310

 

4,245,177

 

5,586,028

 

823,983

 

Cost of revenues

 

(1,458,810)

 

(1,847,525)

 

(272,524)

 

(2,815,910)

 

(3,731,470)

 

(550,421)

 

Gross profit

 

827,819

 

1,123,909

 

165,786

 

1,429,267

 

1,854,558

 

273,562

 

Operating income (expenses):

                         

Selling, general and administrative

 

(218,097)

 

(202,664)

 

(29,895)

 

(380,728)

 

(364,638)

 

(53,787)

 

Other operating income, net

 

(7,617)

 

18

 

3

 

8,023

 

88,057

 

12,989

 

Total operating expenses

 

(225,714)

 

(202,646)

 

(29,892)

 

(372,705)

 

(276,581)

 

(40,798)

 

Income from operations

 

602,105

 

921,263

 

135,894

 

1,056,562

 

1,577,977

 

232,764

 

Other income (expenses):

                         

Interest income

 

11,754

 

39,573

 

5,837

 

20,811

 

68,197

 

10,060

 

Interest expense

 

(4,742)

 

(5,029)

 

(742)

 

(8,386)

 

(10,737)

 

(1,584)

 

Gain on deemed disposal of equity method
     investments

 

 

 

 

9,551

 

 

 

Foreign currency exchange loss, before tax

 

 

(2,872)

 

(424)

 

 

(5,844)

 

(862)

 

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

 

609,117

 

952,935

 

140,565

 

1,078,538

 

1,629,593

 

240,378

 

Income tax expense

 

(171,954)

 

(233,323)

 

(34,417)

 

(293,972)

 

(399,932)

 

(58,993)

 

Share of loss in equity method investments

 

(11,361)

 

(2,689)

 

(397)

 

(19,950)

 

(9,868)

 

(1,456)

 

Net income

 

425,802

 

716,923

 

105,751

 

764,616

 

1,219,793

 

179,929

 

Net loss (income) attributable to 
    noncontrolling interests

 

2,017

 

(88)

 

(13)

 

1,978

 

593

 

87

 

Net income attributable to ZTO Express
     (Cayman) Inc.

 

427,819

 

716,835

 

105,738

 

766,594

 

1,220,386

 

180,016

 

Change in redemption value of convertible 
    redeemable preferred shares

 

(41,048)

 

 

 

(79,723)

 

 

 

Net income attributable to ordinary 
    shareholders

 

386,771

 

716,835

 

105,738

 

686,871

 

1,220,386

 

180,016

 

Net earnings per share/ADS attributable to 
    ordinary shareholders

                         

Basic

 

0.60

 

1.00

 

0.15

 

1.07

 

1.69

 

0.25

 

Diluted

 

0.60

 

1.00

 

0.15

 

1.07

 

1.69

 

0.25

 

Weighted average shares used in calculating 
    net earnings per ordinary share/ADS

                         

Basic

 

613,976,791

 

719,716,569

 

719,716,569

 

613,901,657

 

720,138,244

 

720,138,244

 

Diluted

 

613,976,791

 

719,908,261

 

719,908,261

 

613,901,657

 

720,614,499

 

720,614,499

 

Other comprehensive income, net of tax of nil:

                         

Foreign currency translation adjustment

 

32,911

 

(144,409)

 

(21,301)

 

25,829

 

(233,422)

 

(34,432)

 

Comprehensive income

 

458,713

 

572,514

 

84,450

 

790,445

 

986,371

 

145,497

 

Comprehensive loss (income) attributable to
    noncontrolling interests

 

2,017

 

(88)

 

(13)

 

1,978

 

593

 

87

 

Comprehensive income attributable to ZTO
    Express (Cayman) Inc.

 

460,730

 

572,426

 

84,437

 

792,423

 

986,964

 

145,584

 

 

 

Unaudited Consolidated Balance Sheets Data:

 
   

As of

 
   

December 31, 2016

 

June 30, 2017

 
   

RMB

 

RMB

 

US$

 
   

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

 
               

ASSETS

             

Current assets:

             

Cash and cash equivalents

 

11,287,789

 

5,714,086

 

842,873

 

Restricted cash

 

635,366

 

350,004

 

51,628

 

Accounts receivable, net of allowance for doubtful accounts of
    RMB5,124 and RMB13,726 at December 31, 2016 and June 30,
    2017, respectively

 

197,803

 

184,466

 

27,210

 

Short-term investment

 

 

5,186,165

 

765,000

 

Inventories

 

33,959

 

28,677

 

4,230

 

Advances to suppliers

 

646,666

 

229,909

 

33,913

 

Prepayments and other current assets

 

379,055

 

552,394

 

81,482

 

Amounts due from related parties

 

5,400

 

9,900

 

1,460

 

Total current assets

 

13,186,038

 

12,255,601

 

1,807,796

 

Investments in equity investees

 

537,175

 

526,987

 

77,735

 

Property and equipment, net

 

4,065,562

 

5,155,793

 

760,520

 

Land use rights, net

 

1,302,869

 

1,468,888

 

216,673

 

Goodwill

 

4,157,111

 

4,157,111

 

613,207

 

Deferred tax assets

 

109,030

 

190,296

 

28,070

 

Other non-current assets

 

45,953

 

42,953

 

6,336

 

TOTAL ASSETS

 

23,403,738

 

23,797,629

 

3,510,337

 

LIABILITIES AND EQUITY

             

Current liabilities

             

Short-term bank borrowing

 

450,000

 

250,000

 

36,877

 

Accounts payable

 

636,422

 

491,921

 

72,562

 

Advances from customers

 

229,724

 

187,842

 

27,708

 

Income tax payable

 

418,310

 

329,352

 

48,582

 

Amounts due to related parties

 

131,425

 

151,951

 

22,414

 

Other current liabilities

 

1,656,590

 

1,687,661

 

248,944

 

Total current liabilities

 

3,522,471

 

3,098,727

 

457,087

 

Deferred tax liabilities

 

130,520

 

129,050

 

19,036

 

Other non-current liabilities

 

 

75,381

 

11,119

 

TOTAL LIABILITIES

 

3,652,991

 

3,303,158

 

487,242

 

Shareholders' equity

             

Ordinary shares (US$0.0001 par value; 10,000,000,000 shares authorized,
    731,406,440 shares issued and 720,564,604 shares outstanding as of
    December 31, 2016, and 717,941,190 shares outstanding as of June 30,
    2017)

 

471

 

471

 

69

 

Additional paid-in capital

 

15,940,206

 

15,953,949

 

2,353,333

 

Treasury shares, at cost

 

 

(256,390)

 

(37,820)

 

Retained earnings

 

3,509,707

 

4,730,093

 

697,726

 

Accumulated other comprehensive (loss) income

 

294,649

 

61,227

 

9,031

 

ZTO Express (Cayman) Inc. shareholders' equity

 

19,745,033

 

20,489,350

 

3,022,339

 

Noncontrolling interests

 

5,714

 

5,121

 

756

 

Total Equity

 

19,750,747

 

20,494,471

 

3,023,095

 

TOTAL LIABILITIES AND EQUITY

 

23,403,738

 

23,797,629

 

3,510,337

 

 

 

Summary of Unaudited Consolidated Cash Flow Data:

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

 
   

2016

 

2017

 

2016

 

2017

 
   

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 
   

(in thousands)

 
                           

Net cash provided by operating
    activities

 

278,480

 

903,248

 

133,237

 

542,060

 

1,234,756

 

182,138

 

Net cash used in investing
    activities5

 

(462,792)

 

(1,137,348)

 

(167,767)

 

(1,108,727)

 

(6,443,242)

 

(950,429)

 

Net cash provided by financing activities

 

 

(706,390)

 

(104,199)

 

98,000

 

(456,390)

 

(67,322)

 

Effect of exchange rate changes
    on cash and cash equivalents

 

25,556

 

(70,009)

 

(10,327)

 

19,685

 

(194,189)

 

(28,644)

 

Net decrease in cash and cash
    equivalents

 

(158,756)

 

(1,010,499)

 

(149,056)

 

(448,982)

 

(5,859,065)

 

(864,257)

 

Cash and cash equivalents at
    beginning of period6

 

2,428,536

 

7,074,589

 

1,043,557

 

2,718,762

 

11,923,155

 

1,758,758

 

Cash and cash equivalents at end
    of period6

 

2,269,780

 

6,064,090

 

894,501

 

2,269,780

 

6,064,090

 

894,501

 
 
 

5 The amount of cash used in investing activities mainly includes purchases of the fixed term bank deposits with an original maturity of six to nine months. For the first and second quarter of 2017, the Company purchased approximately RMB4.8 billion (US$700.0 million) and RMB440.7 million (US$65.0 million) of such deposits.

6 In November 2016, the FASB issued ASU No. 2016-18 ("ASU 2016-18"), Statement of Cash Flows (Topic 230) - Restricted Cash. This ASU requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The provisions of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017 and are to be applied retrospectively; early adoption is permitted. We elected, as permitted by the standards, to early adopt ASU 2016-18 in the first quarter of 2017. In connection with the adoption of this update, we have reclassified RMB85.4 million and RMB54.9 million of restricted cash from operating activities to the cash, cash equivalents, and restricted cash balance in the three-month and six-month periods ended June 30, 2016, respectively, to be consistent with the 2017 presentation.

 

 

Reconciliations of GAAP and Non-GAAP Results

 
   

Three Months Ended June 30,

 

Six Months Ended June 30,

 
   

2016

 

2017

 

2016

 

2017

 
   

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 
   

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

 
       

Net income

 

425,802

 

716,923

 

105,751

 

764,616

 

1,219,793

 

179,929

 

Add:

                         

Share-based compensation expense

 

83,366

 

13,492

 

1,990

 

122,000

 

13,743

 

2,027

 

Less:

                         

Gain on deemed disposal of equity
     method investment

 

 

 

 

(9,551)

 

 

 

Adjusted net income

 

509,168

 

730,415

 

107,741

 

877,065

 

1,233,536

 

181,956

 
                           

Net income

 

425,802

 

716,923

 

105,751

 

764,616

 

1,219,793

 

179,929

 

Add:

                         

Depreciation

 

62,453

 

127,083

 

18,746

 

113,461

 

249,094

 

36,743

 

Amortization

 

5,349

 

8,702

 

1,284

 

10,037

 

16,297

 

2,404

 

Interest expenses

 

4,742

 

5,029

 

742

 

8,386

 

10,737

 

1,584

 

Income tax expenses

 

171,954

 

233,323

 

34,417

 

293,972

 

399,932

 

58,993

 

EBITDA

 

670,300

 

1,091,060

 

160,940

 

1,190,472

 

1,895,853

 

279,653

 
                           

Add:

                         

Share-based compensation expense

 

83,366

 

13,492

 

1,990

 

122,000

 

13,743

 

2,027

 

Less:

                         

Gain on deemed disposal of equity
     method investments

 

 

 

 

(9,551)

 

 

 

Adjusted EBITDA

 

753,666

 

1,104,552

 

162,930

 

1,302,921

 

1,909,596

 

281,680

 

 

 

For investor and media inquiries, please contact:

ZTO

Ms. Sophie Li
Investor Relations Director
E-mail: ir@zto.com

Christensen

In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com

In US
Mr. Tip Fleming
Phone: +1-917-412-3333
Email: tfleming@Christensenir.com

SOURCE ZTO Express (Cayman) Inc.


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