ZTO Express beats Q2 estimates, shares rise on strong earnings by Investing.com

SHANGHAI – ZTO Express (Cayman) Inc. (NYSE: ) reported second-quarter earnings that beat analysts’ expectations, leading shares up 3% in after-hours trading. The Chinese express delivery company posted robust parcel volume growth and adjusted net income despite intense industry competition.

ZTO Express reported adjusted earnings per American depositary share (ADS) of RMB 3.38 ($0.47), beating analyst estimates of RMB 3.12. Revenue for the quarter was RMB 10.73 billion ($1.48 billion), slightly above the consensus estimate of RMB 10.67 billion and up 10.1% from last year.

The company’s parcel volume rose 10.1% to 8,452 million parcels, while adjusted net income rose 10.9% to RMB 2.81 billion (US$386.1 million). However, ZTO’s market share fell 2.0 percentage points to 19.6% as the company prioritized quality over quantity.

“We continued to advance our rebalanced strategy that prioritizes quality over quantity by improving the volume mix, improving operational efficiency, helping to reduce last-mile delivery costs and increasing the profitability of outlets and couriers,” said Meisong Lai, Founder, Chairman and CEO. by ZTO Express.

The company maintained its 2024 volume growth guidance of 15% to 18%. ZTO Express aims to double its retail volume by the end of the year, differentiating itself from competitors in terms of brand recognition and customer satisfaction.

“On a full-year basis, we estimate that parcel volume will increase by approximately 15% YoY and ASP will decline by approximately 2% YoY in Q3/Q4. Adjusted earnings are expected to exceed RMB 10 billion,” Jefferies analysts said in a note.

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