ZTO Express reports Q3 adjusted EPS RMB3.06 , consensus RMB2.51

Reports Q3 revenue RMB11.86B, consensus RMB11.91B. CEO Meisong Lai commented, “Focusing on quality and increasing market presence while maintaining healthy earnings is ZTO‘s unwavering long-term strategy. During this quarter, we grew volume by 9.8% to reach 9.6 billion parcels and we delivered 2.51 billion adjusted net income which increased 5%. Our retail volume’s growth momentum remained strong at nearly 50% and continued to bring positive contribution to margin. …Despite complex macro environment where uncertainties remain, we believe ZTO will continue to build strength in quality, scale and profitability and drive healthy sustainable growth for the long run.” CFO Huiping Yan commented, “ZTO’s core express ASP increased by 2c. The 14c in higher volume incentives and 2c from lower average weight per parcel were absorbed by 18c increase in KA unit price. Combined unit sorting and transportation costs decreased 5c driven by transportation cost productivity. SG&A costs remain structurally stable at 5.3% of revenue. Cash flow from operating activities grew 3.2% to 3.2 billion, and capital spending was 1.2 billion for the quarter. With visibility into the final quarter of the year, we are adjusting down the annual volume guidance to be in the range of 38.2 to 38.7 billion parcels representing a year-over-year growth of 12.3% to 13.8%…”