On March 20th, Zhongtong Express (New York Stock Exchange code: ZTO and Hong Kong Stock Exchange code: 2057) announced its unaudited financial performance for the fourth quarter and full year of 2023. According to the financial report, in 2023, Zhongtong Express achieved a business volume increase of 5.8 billion items, with a total package volume of 30.2 billion items for the year, a year-on-year increase of 23.8%; The market share expanded by 0.8 percentage points to 22.9%, while maintaining high-quality service and customer satisfaction. In 2023, the adjusted net profit increased by 32.3% year-on-year to RMB 9 billion. Based on current market conditions and operational conditions, Zhongtong Express predicts that the total number of packages in 2024 will be between 34.73 billion and 35.64 billion, a year-on-year increase of 15% to 18%.
"Despite the uncertainty and unpredictable changes in China's macroeconomic and express delivery industry in 2023, the company has focused on its own development and achieved strong performance. As we shift from relying on experience for decision-making to more utilizing data analysis, we have achieved positive results in many aspects of our business, including the quality and stability of network partners, diversity of products and services, improvement of revenue structure, improvement of operational efficiency, and improvement of end of end layout." said Lai Meisong, founder, chairman, and CEO of Zhongtong Express Group. According to the financial report, as of December 31, 2023, Zhongtong has more than 31000 branches, 99 sorting centers, more than 6000 direct network partners, more than 3900 trunk transportation routes, and over 10000 trunk vehicles, of which more than 9200 are high capacity vehicles with a length of 15 to 17 meters.
According to Yan Huiping, Chief Financial Officer of Zhongtong, in line with industry trends, the company's core single ticket revenue decreased by 11.3% in 2023, which is 1.6 points, of which 5 points were incremental subsidies. Price competition remains fierce, especially in areas with concentrated demand for e-commerce. The company has offset the negative impact of price decline by relying on its solid scale advantage, continuous capacity improvement, and stable sales and management expense structure. The annual operating profit margin increased by 4.1% to 26.0%. In 2023, the company's capital expenditure was 6.7 billion yuan, and the cash flow generated from operating activities increased by 16.4% to 13.4 billion yuan. It is reported that the company's board of directors has approved the regular dividend policy, with a cash dividend of $0.62 per share for 2023 and a dividend payout ratio of no less than 40% for 2024.
At the same time, Zhongtong Express also announced an increase of $500 million in its share repurchase plan, with the total value of share repurchases increasing to $2 billion. The repurchase period will be extended until June 30, 2025. "Benefiting from the long-term growth prospects of China's economy and logistics industry, coupled with the company's competitive advantage and accumulation of free cash flow, Zhongtong Express is ready to steadily improve investor returns," said Yan Huiping.