ZTO Express (Cayman) Inc (ZTO) Q1 2025 Earnings Call Highlights: Navigating Growth Amidst ...
Adjusted Net Income: RMB2.3 billion, increased 1.6% year over year.
Total Revenue: RMB10.9 billion, up 9.4% year over year.
ASP for Core Express Delivery: Decreased 7.8% or RMB0.11.
Total Cost of Revenue: RMB8.2 billion, increased 17.9%.
Gross Profit: RMB2.7 billion, decreased 10.4%.
Gross Profit Margin: 24.7%, decreased 5.4%.
Income from Operations: RMB2.4 billion, increased 6.1%.
Operating Cash Flow: RMB2.4 billion, increased 16.3%.
Capital Expenditure: RMB2 billion for Q1.
2025 Full-Year Parcel Volume Guidance: RMB40.8 billion to RMB42.2 billion, a 20% to 24% increase year over year.
Warning! GuruFocus has detected 1 Warning Sign with ZTO.
Release Date: May 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
ZTO Express (Cayman) Inc (NYSE:ZTO) achieved a 19.1% year-over-year increase in parcel volume, reaching RMB8.5 billion in the first quarter of 2025.
The company reported an adjusted net income of RMB2.3 billion, marking a 1.6% increase year over year.
Retail parcel volume increased by 46% year over year, with reverse logistics volumes surging over 150%, indicating strong growth in these segments.
ZTO Express (Cayman) Inc (NYSE:ZTO) successfully decreased unit transportation and sorting costs by RMB0.09 year over year through digitization and accountability metrics.
The company maintained strong corporate cost efficiency, with SG&A expenses as a percentage of revenue decreasing to 4.7%.
The ASP for core express delivery business decreased by 7.8% due to intensified competition, impacting revenue.
Gross profit decreased by 10.4% to RMB2.7 billion, and the gross profit margin rate decreased by 5.4% to 24.7%.
Price competition in the express delivery industry intensified, putting pressure on profit margins.
The proportion of lower value parcels increased, further intensifying price competition and impacting revenue growth.
Despite efforts to narrow the gap, ZTO Express (Cayman) Inc (NYSE:ZTO) was slightly slower than the industry in volume growth during the first quarter.
Q: How does ZTO plan to achieve its volume growth target despite intense competition, and what are the implications for profit? A: (Huiping Yan, CFO) ZTO aims to maintain service quality while focusing on volume leadership and reasonable profit. The company has narrowed the gap between its volume growth and the industry average by incentivizing network partners. ZTO continues to focus on upgrading its revenue structure, particularly in retail and reverse logistics, which saw significant growth. The company plans to deepen cooperation with e-commerce platforms to sustain this growth.
Q: What are the expectations for unit revenue and cost, and how is AI being integrated into ZTO's operations? A: (Huiping Yan, CFO) The decline in unit revenue is due to intense competition and an increase in lower-weight parcels. ZTO is focusing on cost efficiency, with significant reductions in transportation and sorting costs. AI is being used in sorting operations, route planning, and order allocation to improve efficiency and reduce errors. ZTO plans to further explore AI applications in last-mile delivery and other areas.
Q: What progress has been made in direct linkage and cost optimization, and what are the expectations for the upcoming shopping festival? A: (Huiping Yan, CFO) ZTO is optimizing outlet layouts and promoting direct sorting and delivery to reduce last-mile costs and increase outlet earnings. The company expects significant cost savings and improved network partner earnings. For the upcoming shopping festival, ZTO anticipates high parcel volumes and plans to maintain competitive pricing while supporting network stability.
Q: How does ZTO plan to handle the intensified price competition and its impact on ASP? A: (Huiping Yan, CFO) ZTO is focusing on maintaining high service quality and strategically adjusting pricing based on market conditions. The company is leveraging its cost efficiency initiatives to offset pricing pressures and plans to continue optimizing its revenue mix to sustain profitability.
Q: What are ZTO's strategic priorities in response to current market challenges? A: (Meisong Lai, CEO) ZTO's strategic priority is to solidify its leadership in quality and scale while achieving reasonable profit levels. The company is committed to sustainable growth, reinforcing its network stability, and leveraging technology to enhance operational efficiency. ZTO aims to build an enduring enterprise that can adapt to changing market dynamics.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Associated Press
22 minutes ago
- Associated Press
GIGABYTE Announces its AI PCs - GIGABYTE AERO X16 and GIGABYTE GAMING A16 Now Officially Available
TAIPEI, July 16, 2025 /CNW/ -- Following the successful debut of the AORUS MASTER 18 and 16, GIGABYTE, the world's leading computer brand, now announces the availability of the GIGABYTE AERO X16 and GAMING A16, expanding its 2025 AI PC lineup. Built to meet the needs of gamers, hybrid users, and creators, both models combine next-gen NVIDIA® GeForce RTX™ 50 Series Laptop GPUs with GIGABYTE's exclusive GiMATE AI Agent for intelligent system control, AI-enhanced workflows, and immersive experiences. Both laptops feature up to NVIDIA® GeForce RTX™ 5070 Laptop GPUs, powered by the Blackwell architecture and NVIDIA DLSS 4 for AI-accelerated performance. The AERO X16 supports up to 85W Max Graphics Power, while the GAMING A16 reaches up to 80W. Integrated GiMATE AI Agent enables intuitive 'Press & Speak' voice control, smart tuning, and privacy features. Built on an AI-ready platform with NVIDIA NIM, users can create personal AI agents and streamline workflows. With up to 14 hours of battery life, PD 3.0 fast charging, and Dolby Atmos® audio, both laptops support modern AI-driven lifestyles. The GIGABYTE AERO X16, a Copilot+ PC, is tailored for multi-scenario users who focus on digital creating and AI designing on the go. Weighing just 1.9kg and measuring 16.75mm thin, it comes in Space Gray or Lunar White, featuring an iridescent NIL design with a refined sandblasted finish that reflects modern craftsmanship and minimalist aesthetics. The 16" WQXGA display boasts a 92% screen-to-body ratio with a 4-sided slim bezel design and is both Pantone® Validated and TÜV Rheinland® certified. AI tools like Cocreator and Generative Fill enhance productivity, while WINDFORCE Infinity cooling with 12V dual fans, 3D VortX, and 0dB ambient mode ensures performance in silence. The GIGABYTE GAMING A16 suits casual gamers and students. Its 2.2kg weight and 180° lay-flat hinge make it ideal for collaboration and on-the-go use. The 16" WQXGA panel supports a 165Hz refresh rate for fluid visuals. With MUX Switch support, smart WINDFORCE cooling featuring surround vents and an Icy Touch zone. The Golden Curvature keyboard on both models with enlarged keycaps and 1.7mm travel distance, the AERO X16 & GAMING A16 balance comfort with sustained performance. With AERO X16 and GAMING A16 joining the previously launched AORUS MASTER 18 and 16, GIGABYTE completes its 2025 AI PC portfolio. All models are now available through retailers. Shop now: AERO X16, GAMING A16 View original content to download multimedia: SOURCE GIGABYTE
Bloomberg
22 minutes ago
- Bloomberg
Options Traders Bet TSMC Shares Will Extend Gains After Results
Options traders are betting that Taiwan Semiconductor Manufacturing Co. 's stock rally has more to run as optimism grows that its upcoming earnings will alleviate market concerns. The cost of hedging against declines in the stock has fallen to its lowest level since January relative to bullish wagers, according to data compiled by Bloomberg on the more liquid US-traded options. The world-leading chip foundry reported better-than-expected quarterly revenue growth last week, and analysts now expect TSMC will raise its full-year guidance and hint at further product price hikes when it releases its detailed results Thursday.
Business Insider
an hour ago
- Business Insider
A CEO explains the sourcing strategy that helped a battery chain lessen its China reliance amid the trade war
After Donald Trump imposed tariffs on Chinese goods during his first term as president in 2018, Scott Williams had a problem. He was CEO of Batteries Plus, a retailer that imported around one-third of its inventory from China. The chain sells batteries that power cars and other electronics at about 740 mostly franchised locations across the US. Trump's 25% tariff on certain Chinese goods, which escalated the US-China trade war, raised costs for Williams. That's when Williams decided to make a long-term change: He started buying products from as many sources as possible other than China. Seven years later, he told Business Insider that he's lowered the share of materials his company buys from China from 32% down to 4%. As Trump's trade war continues in his second term, Williams said Batteries Plus' decreased reliance on products from China has prevented much of the scrambling that Trump's tariffs have caused at other companies this year. Batteries Plus turned to the US, Malaysia, and Vietnam While some companies and investors are fretting over Trump's latest August 1 deadline for hiking tariffs on imports from several countries, including China, Batteries Plus has a diversified supplier base that it said insulates it from some of these pressures. "That has obviously, in hindsight, proven to be a huge benefit for us," Williams said. Batteries Plus found factories in other countries to replace what it previously imported from China. One challenge was finding equivalents produced outside China that were of the same quality, Williams said. Car batteries that the retailer produces under its own X2 brand, for instance, now come from Malaysia and Vietnam because Batteries Plus was able to find suppliers in those countries that matched what their China-based suppliers could make. "You're very careful to ensure that, because quality is your reputation," Williams said. Batteries Plus didn't rely on a single country to replace what it used to import from China. Of the 32% that came from China in 2018, about 12 percentage points now come from Vietnam, 8 from US sources, 5 from Malaysia, and the rest from a handful of other countries. That distribution was deliberate, Williams said, so that the company could shift between suppliers in the future depending on which countries are hit by tariffs. "My strategy was, I'm going to diversify with key partners so that I can press the brake or the accelerator on different countries as this thing moves," he said. The 4% of Batteries Plus' supplies that still come from China use minerals that the company hasn't been able to find good sources for elsewhere, he said. The supply chain strategy has not completely shielded Batteries Plus from tariffs. The Trump administration is targeting a longer list of countries with duties than it did seven years ago. Earlier this month, for instance, Trump announced a trade deal with Vietnam that would subject imports from that country to a 20% tariff, up from the current 10%. Still, source diversification has helped Batteries Plus avoid some of the biggest tariff hikes during Trump's second term. Tariffs on imports from China briefly rose to 145% this spring, dinging profit at companies from Dollar Tree to Cracker Barrel. Williams said that Batteries Plus wants to pass less than half of the cost of new tariffs to customers — and, for some products, "none at all," he said. Batteries Plus has also used other cost-cutting options to minimize price increases. The company has increased automation at its warehouses to increase efficiency and negotiated with suppliers to minimize the cost of tariffs, Williams said.
