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Latest posts by Carlos Williams (see all)
- Hot Stock Buzz: ZTO Express (Cayman) Inc. (NYSE: ZTO) - October 29, 2019
- Hot Stock Buzz: VSE Corporation (NASDAQ: VSEC) - October 27, 2019
- Attention Seeking Stock: The Stars Group Inc. (NASDAQ: TSG) - October 25, 2019
SHANGHAI, October 29, 2019 – Shares of ZTO Express (Cayman) Inc. (NYSE: ZTO) showed the bullish trend with a higher momentum of 0.77% to $22.13. The company traded total volume of 1.129M shares as contrast to its average volume of 2.52M shares. The company has a market value of $17.31B and about 782.11M shares outstanding.
ZTO Express (Cayman) Inc. (ZTO) reported revenues of RMB 4,574.00M (US$681.60M), an increase of 29.0% from RMB 3,544.40M in the same period of 2018. Revenue from express delivery services increased by 31.5% compared to the same period of 2018, mainly driven by a 41.6% increase in parcel volume and partially offset by a 7.0% decrease in unit price per parcel resulted mainly from incremental volume incentives in response to competition. Revenue from freight forwarding services decreased 1.4% 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 composed of new service offerings such as financing and advertising services.
Total cost of revenues was RMB 3,314.40M (US$493.90M), an increase of 31.9% from RMB 2,512.30M in the same period last year.
- Line haul transportation cost was RMB 1,594.00M (US$237.50M), an increase of 34.7% from RMB 1,183.60M in the same period last year. The increased use of cost-effective self-owned trucks and more efficient high-capacity trailer trucks enhanced transportation cost leverage on scale. Total transportation cost of self-owned trucks accounted for 59.8% of the total truck transportation cost for the quarter, compared to 53.4% in the same period last year.
- Sorting hub operating cost was RMB891.10M (US$132.80M), an increase of 29.8% or RMB 204.1(US$30.40M) from RMB686.40M in the same period last year. Of this increase (i) RMB126.60M (US$18.90M) was associated with sorting hub labor costs. The average headcount of sorting hub workers increased by 16.7% which was significantly less than the related 41.6% increase in parcel volume demonstrating effective cost productivity gain and (ii) RMB42.70M (US$6.40M) came from depreciation costs associated with the newly installed automated sorting equipment. As of March 31, 2019, 130 sets of automated sorting equipment have been put into use, compared to 59 sets as of March 31, 2018.
- Cost of accessories was RMB119.70M (US$17.80M), an increase of 34.9% from RMB88.70M in the same period last year. The increase was in line with the increase in the sale of accessories for thermal paper.
- Other costs were RMB426.60M (US$63.60M), an increase of RMB156.70M (US$23.30M) compared to the same period last year, as a net result of (i) an increase of RMB120.80M (US$18.00M) in dispatching costs associated with serving enterprise customers, (ii) an increase of RMB57.80M (US$8.60M) in expenses related to IT and technology development and (iii) a decrease of RMB 10.00M (US$1.50M) in tax surcharges.
Gross Profit was RMB 1,259.60M (US$187.7million), an increase of 22.0% from RMB 1,032.10M in the same period last year. Gross margin decreased to 27.5% from 29.1% in the same period last year. The decrease in gross margin was a net result of parcel volume growth and continued cost productivity gain offset by competition-led unit price decline and an increase in lower-margin large enterprise customers businesses.
Total Operating Expenses were RMB499.70M (US$74.50M), compared to RMB333.70M in the same period last year.
- Selling, general and administrative expenses were RMB557.80M (US$83.10M), compared to RMB415.60M in the same period last year. The increase was mainly due to (i) an increase in share-based compensation expenses from RMB199.70M in the first quarter of 2018 to RMB284.3 (US$42.40M) in the first quarter of 2019 and (ii) an increase of RMB59.60M (US$8.90M) in salaries and accrued bonuses. As a percentage of revenue, selling, general and administrative expenses accounted for 12.2%, compared to 11.7% during the same period last year.
- Other operating income, net was RMB58.10M (US$8.70M) for the quarter. Other operating income mainly consisted of government subsidies of RMB48.90M (US$7.30M) received in the first quarter of 2019.
Income from operations was RMB759.90M (US$113.20M), an increase of 8.8% from RMB698.40M for the same period last year. Operating margin decreased to 16.6% from 19.7% in the same period last year, mainly driven by a 1.6 percentage point decrease in gross margin and the impact from share-based compensation expenses of 0.6 percentage points.
Interest income was RMB146.50M (US$21.80M), compared with RMB60.30M in the same period in 2018, primarily due to an increase in the amount of cash and interest-bearing bank deposits.
Interest expense was zero compared with RMB0.80M in the same period in 2018. There was no borrowing during the first quarter of 2019.
Foreign currency exchange loss, before tax was RMB26.00M (US$3.90M) in the first quarter of 2019, resulted from the depreciation of the U.S. dollar against the Chinese renminbi in the first quarter of 2019.
Income tax expenses were RMB191.90M (US$28.60M) and the effective income tax rate was 21.8% for the first quarter of 2019 taking into consideration the non-tax-deductible share-based compensation expenses recorded in the first quarter.
Net income was RMB681.60M (US$101.60M), an increase of 22.3% from RMB557.50M in the same period last year.
Adjusted net income was RMB966.40M (US$144.00M), compared with adjusted net income of RMB757.20M during the same quarter last year.
EBITDA was RMB 1,156.20M (US$172.30M), compared with RMB899.40M in the same period last year.
Adjusted EBITDA was RMB 1,441.00M (US$214.70M), compared to RMB1,099.10M in the same period last year.
Net cash provided by operating activities was RMB633.30M (US$94.40M), compared with RMB214.20M in the same period last year, mainly attributable to growth in net income.
The Company offered net profit margin of 22.00% while its gross profit margin was 29.70%. ROE was recorded as 12.90%. The stock, as of recent close, has shown the weekly upbeat performance of 6.19% which was maintained at 41.69% in this year.