Research Desk Line-up: Radiant Logistics Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 6, 2017 / Pro-Trader Daily publishes post-earnings coverage on ZTO Express (Cayman) Inc. (NYSE: ZTO) following the Company's posting of its first quarter fiscal 2017 financial results on May 17, 2017. The Chinese express delivery Company surpassed top- and bottom-line 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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Get more of our free earnings reports coverage from other constituents of the Air Delivery & Freight Services industry. Pro-TD has currently selected Radiant Logistics, Inc. (NYSE MKT: RLGT) for due-diligence and potential coverage as the Company reported on May 10, 2017, its financial results for Q3 FY17 which ended on March 31, 2017. Register for a free membership today, and be among the early birds that get access to our report on Radiant Logistics when we publish it.

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Earnings Reviewed

For the quarter ended March 31, 2017, ZTO Express' revenues were RMB2.61 billion, or US$379.9 million, an increase of 33.5% compared to revenues of RMB1.96 billion in Q1 2016. The increase was mainly driven by a rise in parcel volume as a result of overall market growth and an increase in the Company's market share in terms of parcel volume. The Company's revenue number had surpassed analysts' consensus of US$369.57 million.

For Q1 2017, ZTO Express' total cost of revenues were RMB1.88 billion, or US$273.7 million, up 38.8% compared to RMB1.36 billion in Q1 2016. The increase was primarily a result of a growth in line-haul transportation costs, sorting hub operating costs, and cost of accessories sold, partially offset by a decrease in waybill material cost.

During Q1 2017, ZTO Express' gross profit was RMB730.6 million, or US$106.2 million, representing an increase of 21.5% from RMB601.4 million in Q1 2016. The Company's gross margin decreased to 27.9% from 30.7% in the same period last year, mainly attributable to the downward adjustment to network transit fees the Company began charging its network partners in Q2 2016 and the increase in line-haul transportation cost.

ZTO Express' total operating expenses were RMB73.9 million, or US$10.7 million, for the reported quarter, a decrease of 49.7% from RMB147.0 million in the same period last year. As a percentage of revenue, selling, general, and administrative expenses accounted for 6.2% in Q1 2017 compared to 8.3% during Q1 2016, primarily due to increased operating leverage.

For Q1 2017, ZTO Express' income from operation totaled RMB656.7 million, or US$95.4 million, reflecting an increase of 44.5% from RMB454.5 million in Q1 2016. The Company's operating margin increased to 25.1% in the reported quarter compared to 23.2% in the prior year's same quarter, primarily attributable to increases in economies of scale and government subsidies.

During Q1 2017, ZTO Express' EBITDA was RMB804.8 million, or US$116.9 million, compared with RMB520.2 million in Q1 2016. The Company's adjusted EBITDA totaled RMB805.0 million, or US$117.0 million, for the reported quarter compared to RMB549.3 million in the year earlier corresponding quarter.

ZTO Express' net income was RMB502.9 million, or US$73.1 million, for Q1 2017 compared with RMB338.8 million in Q1 2016. The Company's basic and diluted earnings per American depositary share (ADS) were RMB0.70, or US$0.10, compared with basic and diluted earnings per ADS of RMB0.47 in the same period last year. ZTO's adjusted net income was RMB503.1 million, or US$73.1 million, compared with adjusted net income of RMB367.9 million during the year ago same period. The Company's earnings numbers came in ahead of Wall Street's expectations of US$0.09 per ADS.

Operating Highlights

During Q1 2017, ZTO Express' parcel volume increased to 1.18 billion, reflecting an increase of 41.9% from 828 million in Q1 2016.

As of March 31, 2017, ZTO Express' number of pickup/delivery outlets was approximately 27,000. The Company's number of network partners was over 9,200, which included over 3,600 direct network partners and over 5,600 indirect network partners as of March 31, 2017.

The Company's number of line-haul vehicles was over 4,200 as of March 31, 2017, which included over 3,000 self-owned vehicles and around 1,200 vehicles owned and operated by Tonglu Tongze Logistics Ltd, a transportation operator that works exclusively for ZTO Express.

ZTO Express' number of sorting hubs was 75 as of March 31, 2017, among which 69 are operated by the Company and 6 by the Company's network partners.

During Q1 2017, ZTO Express' net cash provided by operating activities was RMB331.5million, or US$48.2million, compared with 263.6 million in the same period last year.

Outlook

For Q2 2017, ZTO Express is forecasting revenue to be in the range of RMB2.95 billion, or US$428.6 million, to RMB3.05 billion, or US$443.1 million, representing a 29.0% to 33.4% increase from the same period of 2016.

New Chief Operating Officer

On May 17, 2017, ZTO Express announced the appointment of Mr. Hongqun Hu as the Company's Chief Operating Officer, effective May 12, 2017. As per the official press release, Mr. Hongqun Hu has served as the Chairman of Zhejiang Tonglu Rural Commercial Bank, and the governor and chairman of Zhejiang Tonglu Rural Cooperation Bank. Mr. Hu has thirty years of experience in financial services and management. Mr. Hu received an executive MBA degree from Zhejiang University, and a bachelor's degree in finance from Ningbo University.

Share Repurchase Program

On May 22, 2017, ZTO Express announced that the Company's Board of Directors has authorized a new share repurchase program whereby ZTO is authorized to repurchase its own Class A ordinary shares in the form of American depositary shares with an aggregate value of up to US$300 million during the next 12-month period. The Company expects to fund the repurchase out of its existing cash balance.

Stock Performance

At the closing bell, on Monday, June 05, 2017, ZTO Express' stock was marginally up 0.41%, ending the trading session at $14.65. A total volume of 1.15 million shares were traded at the end of the day. In the last month and previous three months, shares of the Company have surged 5.85% and 13.04%, respectively. Furthermore, on a year to date basis, the stock rallied 21.38%. Shares of the Company have a PE ratio of 34.96. The stock currently has a market cap of $10.79 billion.

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