ZTO Express (Cayman) Inc.

2Q&1H 2023 Financial Details for Earnings Call

Aug 30, 2023

Financial Performance

2Q23

2Q22

V%

Comments

Parcel package volume （in Billion）

7.68

6.20

23.8% 2.9pts above industry avg.; 23.5% market share (23.0% @2Q22)

(￥RMB in Million)

Revenues

9,740

8,657

12.5% ¥ 9.50bn from core express delivery business, increased 14.1%

1) ¥ 730.9mn from KA customers, decreased 40.1% on 40.7% KA volume decrease

¥ 238.9mn freight forwarding revenues, decreased 27.6%

COGS

-6,436

-6,454

-0.3% ¥ 6.21bn from core express delivery business, increased 1.1%

1) ¥ 3.20bn line haul transportation costs, increased 5.6%

2) ¥ 1.93bn sorting hub operation costs, increased 2.3%

3) ¥ 396.6mn KA costs, decreased 39.4%

¥ 222.3mn freight forwarding costs, decreased 27.6%

Gross profit

3,304

2,203

50.0% ¥ 3.29bn from core express delivery business, increased 50.8%

Gross profit %

33.9%

25.4%

8.5pts 34.6% for core express delivery business (26.2% @2Q22)

SG&A

-505

-457

10.4%

SG&A excl. SBC as 5.2% of revenues (5.3% @2Q22)

Other operating income/(loss), net

79

240

1) ¥ 68.0mn gov't subsidies and tax rebates ( ¥ 145.8mn @2Q22)

Income from operations

2,879

1,986

45.0%

2) ¥ 41.9mn VAT super deduction ( ¥ 56.6mn @2Q22)

Operating profit %

29.6%

22.9%

6.6pts

Income from operations excluding SBC (Non GAAP)

2,879

1,986

45.0%

Operating profit % excluding SBC（Non GAAP）

29.6%

22.9%

6.6pts

Interest income (net)

95

95

-0.5%

Fair value changes of financial instruments

52

-14

Equity disposal gain/(loss) (Non GAAP excluded)

-1

-

Currency exchange gain/(loss)

81

120

Income before income tax and equity pickup

3,106

2,187

42.0%

Income tax expenses

-576

-438

Adjusted ETR 18.5% (19.1% @2Q22), increase in local earnings, taxed @15%

Equity pickup

0

10

Net income

2,530

1,759

43.9%

Net income%

26.0%

20.3%

5.7pts

Adjusted net income (Non GAAP)

2,531

1,759

43.9%

Adjusted net income (Non GAAP)%

26.0%

20.3%

5.7pts

EBITDA

3,883

2,892

34.3%

Adjusted EBITDA (Non GAAP)

3,884

2,892

34.3%

Adjusted Basic EPS (Non GAAP) (￥RMB in Yuan)

3.14

2.23

40.8%

* may contain rounding differences

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ZTO Express (Cayman) Inc.

2Q&1H 2023 Financial Details for Earnings Call

Aug 30, 2023

Unit Economics (RMB per parcel)

2Q23

2Q22

Impact (+/-)

Comments (+positive/-negative impact)

ASP (excluding COE)

1.24

1.34

-10 cents

Core express delivery ASP decreased 7.8% (lower avg. parcel weight -3 cents,

less % of KA volume -6 cents, pricing policy refinement +2 cents, incentives -3 cents)

Cost of Revenue (excluding COE)

0.81

0.99

+18 cents

Core express delivery unit cost decreased 18.3%

-

transportation cost per parcel

0.42

0.49

+7 cents

1)

Improved load rate (+)

2)

Diesel price declined, decreased ~2 cents (+)

3)

Better economies of scale (+)

4)

Real-time data monitoring and analytics to optimize route planning (+)

-

sorting hub cost per parcel

0.25

0.30

+5 cents

1)

Improved standardization in operating procedures with improved labor productivity (+)

2)

460 sets of automated sorting equipment in use (431 sets @2Q22) (+)

Gross profit (excluding COE)

0.43

0.35

+8 cents

Increased revenues and cost productivity gain

SG&A excluding SBC (Non GAAP)

0.07

0.07

Flat

Stable corporate cost structure & leverage

Adjusted income from operations (Non GAAP)

0.37

0.32

+5 cents

Cash and Capex (RMB in Million)

2Q23

2Q22

Diff

Comments

Operating cash flow

3,762

3,781

-19

CapEx

2,201

1,535

665

Approx. ¥ 1,750mn land use rights and sorting hub construction

¥ 440mn automation equipment

Cash and Cash Equivalents

16,590

15,524

1,066

Excluding ¥ 10.86bn cash on deposits maturing in one year or longer

* may contain rounding differences

2 of 4

ZTO Express (Cayman) Inc.

2Q&1H 2023 Financial Details for Earnings Call

Aug 30, 2023

Financial Performance

1H23

1H22

V%

Comments

Parcel package volume （in Billion）

13.97

11.43

22.3% 6.1pts above industry avg.; 23.5% market share (22.3% @1H22)

(￥RMB in Million)

18,724

16,561

13.1% ¥ 18.29bn from core express delivery business, increased 15.0%

Revenues

1) ¥ 1.78bn from KA customers, decreased 24.9% on 26.6% KA volume decrease

¥ 431.6mn freight forwarding revenues, decreased 34.7%

COGS

-12,896

-12,738

1.2% ¥ 12.49bn from core express delivery business, increased 3.0%

1) ¥ 6.38bn line haul transportation costs, increased 6.6%

2) ¥ 3.95bn sorting hub operation costs, increased 4.7%

3) ¥ 930.3mn KA costs, decreased 25.5%

¥ 405.2mn freight forwarding costs, decreased 34.1%

Gross profit

5,828

3,822

52.5% ¥ 5.80bn from core express delivery business, increased 53.6%

Gross profit %

31.1%

23.1%

8pts 31.7% for core express delivery business (23.7% @1H22)

SG&A

-1,291

-1,075

20.1%

SG&A excl. SBC as 5.5% of revenues (5.4% @1H22)

Other operating income/(loss), net

293

355

1) ¥ 167.4mn gov't subsidies and tax rebates ( ¥ 195.7mn @1H22)

Income from operations

4,829

3,102

55.7%

2) ¥ 111.4mn VAT super deduction ( ¥ 124.9mn @1H22)

Operating profit %

25.8%

18.7%

7.1pts

Income from operations excluding SBC (Non GAAP)

5,084

3,281

55.0%

Operating profit % excluding SBC（Non GAAP）

27.2%

19.8%

7.3pts

Interest income (net)

115

147

-21.6%

Fair value changes of financial instruments

207

-14

Equity disposal gain/(loss) (Non GAAP excluded)

-1

-

Currency exchange gain/(loss)

71

107

Income before income tax and equity pickup

5,222

3,341

56.3%

Income tax expenses

-1,031

-693

Adjusted ETR 18.5% (19.1% @1H22), increase in local earnings, taxed @15%

Equity pickup

4

-13

Net income

4,195

2,634

59.3%

Net income%

22.4%

15.9%

6.5pts

Adjusted net income (Non GAAP)

4,451

2,813

58.2%

Adjusted net income (Non GAAP)%

23.8%

17.0%

6.8pts

EBITDA

6,761

4,715

43.4%

Adjusted EBITDA (Non GAAP)

7,017

4,894

43.4%

Adjusted Basic EPS (Non GAAP) (￥RMB in Yuan)

5.52

3.57

54.6%

* may contain rounding differences

3 of 4

Unit Economics (RMB per parcel)

ASP (excluding COE)

Cost of Revenue (excluding COE)

  • transportation cost per parcel
  • sorting hub cost per parcel

Gross profit (excluding COE)

SG&A excluding SBC (Non GAAP)

Adjusted income from operations (Non GAAP)

Cash and Capex (RMB in Million)

Operating cash flow

CapEx

Cash and Cash Equivalents

ZTO Express (Cayman) Inc.

2Q&1H 2023 Financial Details for Earnings Call

Aug 30, 2023

1H23

1H22

Impact (+/-)

Comments (+positive/-negative impact)

1.31

1.39

-8 cents

Core express delivery ASP decreased 5.9% (lower avg. parcel weight -3 cents,

less % of KA volume -5 cents, pricing policy refinement +3 cents, incentives -3 cents)

0.89

1.06

+17 cents

Core express delivery unit cost decreased 15.7%

0.46

0.52

+6 cents

1)

Improved load rate (+)

2)

Diesel price declined, decreased ~2 cents (+)

3)

Better economies of scale (+)

4)

Real-time data monitoring and analytics to optimize route planning (+)

0.28

0.33

+5 cents

1)

Improved standardization in operating procedures with improved labor productivity (+)

2)

460 sets of automated sorting equipment in use (431 sets @1H22) (+)

0.42

0.33

+9 cents

Increased revenues and cost productivity gain

0.07

0.08

+1 cents

Healthy corporate cost structure & leverage

0.33

0.26

+7 cents

1H23

1H22

Diff

Comments

6,500

4,886

1,613

4,502

3,337

1,166

Approx. ¥ 3,440mn land use rights and sorting hub construction

¥ 1,020mn automation equipment

16,590

15,524

1,066

Excluding ¥ 10.86bn cash on deposits maturing in one year or longer

* may contain rounding differences

4 of 4

Attachments

Disclaimer

ZTO Express (Cayman) Inc. published this content on 29 August 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 August 2023 23:19:13 UTC.