On May 16th, Zhongtong Express (New York Stock Exchange code: ZTO, Hong Kong Stock Exchange code: 2057) announced its unaudited financial results for the first quarter of 2024. The financial report shows that in the first quarter, the package volume of Zhongtong Express increased by 13.9% year-on-year, reaching 7.171 billion pieces; After adjustment, the net profit increased by 15.8% to 2.2 billion yuan, and the net cash flow generated from operating activities was 2 billion yuan.
"In the first quarter of this year, the industry's parcel volume increased by 25.2% year-on-year, far exceeding expectations. The booming development of new live streaming e-commerce and social platforms has stimulated online consumption by the public, driving the growth of express delivery business volume. On the other hand, it has also led to an increase in the proportion of low priced e-commerce parcels. At the same time, the competition in express delivery prices has further intensified, especially in grain producing areas. The proportion of unprofitable or even loss making parcels in the industry has become more and more. The company adheres to the bottom line of 'not making loss making parcels' and maintains healthy profit growth. Although the parcel volume market share has decreased compared to the same period last year, our profit market share has further increased, proving the effectiveness of our strategy." CEO Lai Meisong said. At the beginning of 2024, the company shifted its strategic focus to service quality. While maintaining a reasonable business scale and good profit level, it also paid more attention to creating differentiated products and services to meet the diverse and personalized needs of customers, and enhance consumer awareness and recognition of the brand.
From the perspective of business data, as of March 31, 2024, Zhongtong Express currently has 96 sorting centers, over 31000 pickup/delivery points, more than 6000 direct network partners, about 3800 trunk transportation routes between sorting centers, and more than 10000 self owned trunk vehicles, of which about 9100 self owned vehicles are high capacity vehicles with a length of 15 to 17 meters. In the first quarter of 2024, according to the satisfaction survey and delivery time test results of express delivery services released by the National Postal Administration, Zhongtong continued to improve and ranked second in the industry in terms of delivery time.
Yan Huiping, Chief Financial Officer of Zhongtong Express, said, "We believe that the Chinese economy will gradually stabilize and improve, and the long-term development prospects of the express delivery industry are still broad. Focusing on ourselves and creating differentiated products and services is an inevitable choice for Zhongtong's sustainable and healthy development and long-term value creation. We expect the industry growth rate to be between 15% and 20% this year, and based on the principle of 'not making loss making express delivery', we accept a certain range of market share decline. The company maintains the guidance of the previous annual business volume of 34.73 billion to 35.64 billion, with a growth rate of 15% to 18%."