SHANGHAI - ZTO Express (NYSE:ZTO) (Cayman) Inc. (NYSE: ZTO), a leading express delivery company in China, reported a robust first quarter with earnings and revenue surpassing analyst expectations. ZTO shares jumped by 11% following the announcement.
The company's adjusted earnings per share (EPS) for the first quarter reached RMB2.68, exceeding the analyst estimate of RMB2.47. Revenue also outperformed, coming in at RMB9.96 billion against the consensus estimate of RMB9.34 billion.
For the first quarter ended March 31, 2024, ZTO experienced a 13.9% year-over-year (YoY) increase in parcel volume, reaching 7.2 billion parcels. This growth was accompanied by a 15.8% rise in adjusted net income, reaching RMB2.2 billion. Furthermore, the company's revenue saw a 10.9% increase from RMB8,983.2 million in the same quarter of the previous year.
ZTO's management attributed the strong quarter to the boom in live video streaming and social network retailing, which has stimulated consumption and fueled the increase in express delivery volume. However, the company also faced intensified price competition, particularly in major output regions. Despite these challenges, ZTO's strategy of focusing on profitable growth and keeping loss-making parcels out of its network has paid off, as demonstrated by the increased profit share among industry peers.
Mr. Meisong Lai, Founder, Chairman, and CEO of ZTO, emphasized the company's commitment to balanced development in service quality, volume scale, and earnings. "The transformation of Chinese express delivery from high quantity to a combination of quantity plus quality is inevitable," said Mr. Lai. He highlighted the company's efforts to develop differentiated products and services to enhance ZTO's brand awareness and value recognition.
Looking ahead, ZTO maintains its parcel volume growth guidance for 2024, projecting an increase of 15% to 18%, which translates to between 34.73 billion and 35.64 billion parcels. This guidance aligns with the company's strategy to prioritize service quality while maintaining a healthy earnings level.
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