ZTO Yunpei Signs Purchase Agreement with Nisun International, Driving Significant Expansion in China's Egg MarketSHANGHAI, July 23, 2024 /PRNewswire/ -- Nisun International Enterprise Development Group Co., Ltd ("Nisun International" or the "Company") (Nasdaq: NISN), a technology and industry driven integrated supply chain solutions provider, is pleased to announce a significant milestone in its partnership with Zhejiang ZTO Yunpei Food Co., Ltd. ("ZTO Yunpei"), the supply chain company under ZTO Express, a ...

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ZTO Express’ (ZTO) robust performance of express delivery services is boosting its top line. However, the company is grappling with elevated operating expenses, which is severely impacting ZTO’s bottom line.Factors Favoring ZTOParcel volume growth is a big tailwind for ZTO Express. As evidence, in the first quarter of 2024, the parcel volume rose by 13.9% year over year, and the parcel unit price decreased by 2.5% year over year.This contributed to an 11% increase in revenues from the core express delivery ...

Core Insights - ZTO Express (Cayman) Inc. is a leading express delivery company in China, founded in 2009 and publicly traded since 2016 [7] - The company currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of B, indicating a solid position in the market [7] - ZTO's Value Style Score is also B, supported by a forward P/E ratio of 12.56, making it attractive for value investors [7] - Recent analyst activity shows two analysts have revised their earnings estimates higher for fiscal 2024, with the Zacks Consensus Estimate increasing by $0.01 to $1.75 per share [7] - ZTO has an average earnings surprise of 8.2%, suggesting a positive trend in earnings performance [7]

Core Viewpoint - ZTO Express (Cayman) Inc. held its annual general meeting in Hong Kong, where several resolutions were approved by shareholders, including financial statements for 2023 and the re-election of directors [1]. Group 1: Shareholder Resolutions - The audited consolidated financial statements for the year ended December 31, 2023, were received and considered [1]. - Mr. Xudong CHEN was re-elected as a non-executive Director [1]. - Mr. Qin Charles HUANG, Mr. Herman YU, and Mr. Tsun-Ming (Daniel) KAO were re-elected as independent non-executive Directors [1]. - The Board was authorized to fix the remuneration of the Directors [1]. - Deloitte Touche Tohmatsu was re-appointed as the auditor of the Company until the next annual general meeting [1]. - A general mandate was granted to the directors to issue and allot additional Class A Ordinary Shares not exceeding 20% of the total issued shares [1]. - A general mandate was granted to repurchase Class A Ordinary Shares not exceeding 10% of the total issued shares [1]. - The general mandate to issue additional Class A Ordinary Shares was extended by the number of shares repurchased [1]. Group 2: Company Overview - ZTO Express is a leading and fast-growing express delivery company in China, providing express delivery and value-added logistics services [2]. - The company operates a scalable network partner model to support the growth of e-commerce in China, leveraging partners for pickup and last-mile delivery while controlling the line-haul transportation and sorting network [2].

Core Insights - ZTO Express (Cayman) Inc. has experienced a 4.7% decline in share price over the past month, underperforming the S&P 500 index [1] - The company reported a year-over-year increase in Q1 2024 earnings, with earnings per share at 37 cents and total revenues reaching $1.37 billion [2] Operational Performance - Revenue from the core express delivery business increased by 11% year over year, driven by a 13.9% rise in parcel volume, despite a 2.5% decrease in parcel unit price [3] - KA revenue, which includes delivery fees from direct sales organizations, decreased by 7.1% due to a shift towards higher-value customers [3] - Freight forwarding services revenue grew by 5.2% year over year [3] - Sales of accessories, primarily thermal paper for digital waybills, surged by 31.5% [3] - The gross profit improved by 19% year over year, with gross margin increasing to 30.1% from 28.1% [4] Financial Position - Total operating expenses for the first quarter were RMB735.4 million ($101.8 million), up from RMB573.0 million in the previous year [4] - ZTO Express ended Q1 2024 with cash and cash equivalents of RMB12.58 billion, slightly up from RMB12.33 billion at the end of December 2023 [4] Future Outlook - The company anticipates parcel volumes for 2024 to be between 34.73 billion and 35.64 billion, representing a year-over-year increase of 15-18% [5] - Analysts have not made any earnings estimate revisions in the past two months [5]

Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with ZTO Express (Cayman) Inc. identified as a strong candidate due to its favorable growth metrics and Zacks Rank [1][6]. Group 1: Earnings Growth - ZTO Express has a historical EPS growth rate of 13.5%, with projected EPS growth of 13.4% for the current year, significantly outperforming the industry average of -3.7% [3]. Group 2: Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 17.3%, which is substantially higher than the industry average of -12.5%. Over the past 3-5 years, ZTO's annualized cash flow growth rate has been 18.6%, compared to the industry average of 14.6% [4]. Group 3: Earnings Estimate Revisions - The current-year earnings estimates for ZTO Express have been revised upward, with the Zacks Consensus Estimate increasing by 0.6% over the past month, indicating a positive trend in earnings estimate revisions [5]. Group 4: Overall Assessment - ZTO Express has achieved a Growth Score of B and a Zacks Rank of 2, suggesting it is a solid choice for growth investors and a potential outperformer in the market [6].

Core Viewpoint - ZTO Express (Cayman) Inc. is currently positioned as a more attractive investment option compared to Grupo Aeroportuario del Sureste based on Zacks Rank and valuation metrics [1][3]. Valuation Metrics - ZTO has a forward P/E ratio of 14.06, while ASR has a forward P/E of 14.75 [2]. - ZTO's PEG ratio is 1.46, significantly lower than ASR's PEG ratio of 3.35, indicating better expected earnings growth relative to its valuation [2]. - ZTO's P/B ratio stands at 1.84, compared to ASR's P/B ratio of 3.65, suggesting ZTO is undervalued relative to its book value [2]. Investment Grades - ZTO holds a Value grade of B, while ASR has a Value grade of D, indicating ZTO is favored by value investors [3]. - ZTO has experienced stronger estimate revision activity, contributing to its more favorable valuation metrics compared to ASR [3].

Investment Rating - The report maintains a "BUY" rating for ZTO Express with a target price of US$38.50, indicating an upside potential of 80% from the current price of US$21.39 [2][5]. Core Insights - ZTO Express has shifted its strategic focus to a profitable growth strategy in 1Q24, achieving a core net profit of RMB1.9 billion, which is a 23% year-over-year increase and represents 19% of the full-year forecast [2][3]. - The company aims for a parcel volume growth target of 15-18% for 2024, consistent with previous guidance, despite a higher industry growth forecast of 15-20% [2][3]. - ZTO's earnings growth is supported by a 10% year-over-year revenue increase, a 2.1 percentage point expansion in gross margin to 30.1%, and a significant increase in net finance income [3][5]. Financial Performance Summary - **1Q24 Results**: Core net profit increased by 23% YoY to RMB1.9 billion, while reported net income decreased by 15% YoY to RMB1.4 billion due to an impairment of RMB478 million [3][8]. - **Revenue Growth**: Total revenue for 1Q24 was RMB9.96 billion, reflecting a 10.9% increase YoY [8]. - **Parcel Volume**: Parcel volume grew by 14% YoY to 7.2 billion units, which is below the industry average growth of 25% [3][8]. - **Cost Management**: Unit cost decreased by 5% YoY to RMB0.94 per parcel, with transportation costs down by 7% YoY [3][8]. - **Earnings Forecast**: The earnings forecast remains unchanged, with adjusted net profit expected to reach RMB9.74 billion for FY24, reflecting an 11.4% growth YoY [5][17]. Key Financial Metrics - **Revenue Projections**: Revenue is projected to grow from RMB38.42 billion in FY23 to RMB43.87 billion in FY24, representing a 14.2% growth [5][17]. - **Earnings Per Share (EPS)**: Reported EPS is expected to be RMB11.67 for FY24, with a YoY growth of 11.4% [5][17]. - **Price-to-Earnings Ratio (P/E)**: The P/E ratio is projected to be 13.2x for FY24, which is in line with historical averages [5][17]. - **Dividend Yield**: The expected dividend yield for FY24 is 3.0% [5][17].

ZTO Express (Cayman) Inc. (NYSE:ZTO) Q1 2024 Earnings Conference Call May 15, 2024 8:30 PM ET Company Participants Sophie Li - Head of Capital Markets Meisong Lai - Chairman and CEO Huiping Yan - CFO Conference Call Participants Qianlei Fan - Morgan Stanley Lu Wei Jiang - Haitong Securities Ronald Keung - Goldman Sachs Operator Good day and welcome to the ZTO Express First Quarter 2024 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] I would now like t ...