LONDON, UK / ACCESWIRE / September 11, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on ZTO Express (Cayman) Inc. (NYSE: ZTO), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=ZTO, following the Company's posting of its second quarter fiscal 2017 financial results on August 22, 2017. The Chinese express delivery topped earnings expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For the second quarter ended June 30, 2017, ZTO's revenues surged 29.9% to RMB2.97 billion (US$438.3 million) from RMB2.29 billion in Q2 2016, driven by growth in parcel volume as a result of overall market growth and an increase in the Company's market share in terms of parcel volume. In the reported quarter, ZTO Express' volume grew 37.6% to 1.49 billion from 1.09 billion in the year ago same period. The Company's revenue numbers missed analysts' expectations of $463.70 million.
ZTO Express' total cost of revenues were RMB1.85 billion (US$272.5 million), reflecting an increase of 26.6% from RMB1.46 billion in Q2 2016. The increase in cost of revenues was attributed to an increase 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.
For Q2 2017, ZTO Express' gross profit was RMB1.12 billion (S$165.8 million), an increase of 35.8% from RMB827.8 million in Q2 2016. The Company's gross margin improved to 37.8% from 36.2% in the prior year's corresponding quarter, primarily attributable to the decrease in line-haul transportation cost and sorting hub cost. ZTO Express' total operating expenses were RMB202.6 million (US$29.9 million), down 10.2% from RMB225.7 million in Q2 2016.
ZTO Express' income from operations surged 53.0% to RMB921.3 million (US$135.9 million) in Q2 2017 from RMB602.1 million in Q2 2016. The Company's operating margin increased to 31.0% from 26.3% in the year earlier comparable quarter, primarily due to increases in economies of scale and continuous improvement in operating efficiency.
During Q2 2017, ZTO Express' net income was RMB716.9 million (US$105.8 million), compared to RMB425.8 million in Q2 2016. The Company's basic and diluted earnings per ADS were RMB1.00 (US$0.15), compared to basic and diluted earnings per ADS of RMB0.60 in the prior year's same quarter. ZTO Express' adjusted net income was RMB730.4 million (US$107.7 million), compared with adjusted net income of RMB509.2 million during Q2 2016. The Company's earnings beat Wall Street's expectations of $0.14 per share.
ZTO Express' EBITDA was RMB1.09 billion (US$160.9 million), compared to RMB670.3 million in Q2 2016. The Company's adjusted EBITDA was RMB1.10 billion (US$162.9 million), compared to RMB753.7 million in the year ago same period.
Cash Matters
ZTO Express' net cash provided by operating activities was RMB903.2 million (US$133.2million), compared with 278.5 million in Q2 2017, mainly attributable to growth in net income and increased deposits for last-mile delivery fees.
On May 21, 2017, ZTO Express announced a new share repurchase program whereby the Company 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.
Business Outlook
Based on current market conditions and current operations, revenues for Q3 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.
Stock Performance
At the closing bell on Friday, September 8, 2017, ZTO Express' stock was slightly down 0.07%, ending the trading session at $13.90. A total volume of 4.38 million shares have exchanged hands, which was higher than the 3-month average volume of 2.20 million shares. The Company's stock price surged 23.78% in the past six months. Moreover, the stock rallied 15.16% since the start of the year. The stock is trading at a PE ratio of 30.42 and currently has a market cap of $9.95 billion.
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