ZTO Express's parcel volume in 21 years was 22.3 billion pieces, and its market share expanded to 20.6%

According to the U.S. Stock Research Agency, logistics sources learned that on March 17, 2022, ZTO Express announced its unaudited financial results for the fourth quarter of 2021 and the whole year of 2021. According to the financial report, the parcel volume of ZTO Express in 2021 was 22.3 billion pieces, an increase of 31.1% year-on-year, and its market share expanded to 20.6%. At the same time, ZTO Express maintained a high level of customer satisfaction and industry-leading profitability, with full-year revenue of 2021 up 20.6% year-on-year to RMB30.4 billion, and adjusted net profit up 7.8% year-on-year to RMB4.95 billion.

While maintaining the industry's leading profit quality, Zhongtong Express has maintained the first place in the "Tongda system" for a long time in the Cainiao Index and maintained a high level of customer satisfaction. According to the latest data from the 2021 express delivery service satisfaction survey and time limit punctuality rate test results notified by the State Post Bureau, Zhongtong Express has entered the top three in the industry for the first time in the history of the timeliness ranking, ranking among the first echelon, which proves that Zhongtong still maintains the "hard power" in network bearing and service performance under the background of an average daily business volume of more than 60 million. Lai Meisong, chairman and CEO of ZTO Express Group, said: "In 2021, ZTO focused on itself, and in the face of various uncertain situations, it still maintained a certain medium-high speed growth, becoming the world's first express delivery company to exceed 20 billion pieces of annual business volume, and steadily increasing its market share to 20.6%. All Zhongtong people have made good progress in highlighting brand value, optimizing operation and management, and enhancing comprehensive strength. Lai Meisong believes: "The express delivery industry will continue to concentrate on integration and optimization, the stronger the competitive landscape will tend to be stable, the balance of price and quality efficiency will continue to be optimized, and the advantages of scale effect will inevitably become increasingly prominent." Zhongtong has obvious advantages and is in a favorable position of competition, we will accelerate the transformation from 'high quantity' to 'high quality', continue to focus on the group's resource allocation and maximize efficiency, pay more attention to capacity building, network stability and grass-roots rights and interests protection, fully apply digital and intelligent integrated management tools, steadily promote the development of various ecological sectors, and strive to create a moat of integrated logistics service capabilities in the next 5 years, from leading advantages to 'absolute advantages' and 'ecological advantages'. Yan Huiping, Chief Financial Officer of ZTO Express Group, said: "The impact of competition due to price decline is weakening, and since the second half of 2021, the company has systematically implemented a number of initiatives to improve the relevance and timeliness of data, thereby improving the visualization of operational results and making decisions and responses faster, which has achieved initial results in profitability." The company's cost structure remained stable and efficient, with management expenses falling 0.2 percentage points to revenue to 5.4%. Capital expenditure for the full year totaled $9.3 billion, and operating cash flow increased by 45.8% year-on-year to $7.2 billion. We reasonably expect operating cash flow to exceed capital expenditure in 2022. "In 2021, thanks to the increase in the utilization rate of high-capacity vehicles, the improvement of automation rate and the improvement of operational efficiency brought about by the optimization of routing planning, in the context of the continuous rise in oil prices, the single-ticket trunk line transportation cost of Zhongtong Express increased by only 0.8% to 0.52 yuan year-on-year, and the single-ticket sorting cost fell by 1.1% to 0.30 yuan compared with last year, and the scale effect was further highlighted." In the fourth quarter of 2021, ZTO's parcel volume was 6,343 million pieces, an increase of 17.2% from 5,410 million pieces in the same period of 2020; revenue was 9,217 million yuan, an increase of 11.6% from 8,257 million yuan in the same period of 2020; and adjusted net profit was 1,745 million yuan, an increase of 35.2% from 1.29 billion yuan in the same period in 2020. As of December 31, 2021, ZTO has more than 30,400 outlets, 99 sorting centers, more than 5,700 direct network partners, about 3,700 trunk transportation routes, and about 10,900 trunk vehicles, of which more than 9,000 are high-capacity models with vehicle lengths of 15 to 17 meters. As at 31 December 2021, the Group's cash, cash equivalents and long- and short-term investments amounted to $13.8 billion. On March 31, 2021, the Board of Directors approved an increase in the total value of the shares that may be repurchased from $500 million to $1 billion, extending the validity period by two years until June 30, 2023. As at 31 December 2021, the Group purchased a total of 36,074,242 American Depositary Shares at an average purchase price of $25.21, including repurchase commissions. In 2021, while steadily developing the main business of express delivery, ZTO will continue to improve its ecological service capabilities such as heavy goods, warehouse integration, cross-border logistics, intelligent research and production, financial services, aging cold chain, terminal construction and commercial superposition, etc., and its comprehensive ability to meet diversified delivery needs is constantly increasing. The strength of the main express delivery business can provide a solid foundation for ecological construction, and doing a good job in ecology can also further improve the strength of express delivery through maximizing the utilization of resources, and enhance the moat of ZTO in integrated logistics. On December 29, 2021, ZTO Express completed more than US$300 million of Series B financing. As of the fourth quarter of 2021, Zhongtong Express has more than 16,000 service outlets, more than 4,100 direct network partners, 97% coverage in districts and counties, daily shipments exceeding 35,000 tons, daily shipments exceeding 1.3 million pieces, and daily transportation capacity of 45,000 tons, which was selected into the "2021 Large-scale Express TOP10" list. By the end of 2021, Zhongtong Yuncang has established a warehouse distribution network consisting of more than 200 warehouses and a storage area of more than 2 million square meters in the country, and currently serves more than 1,000 customers, covering e-commerce platforms, social e-commerce, live broadcast platforms, community group buying platforms, brand merchants, chain stores, local life, etc., B2C business and B2B business in parallel. At present, the international business types include import bonded/direct mail, freight forwarding, warehousing, export lines, overseas local express delivery and other services. As of the fourth quarter of 2021, ZTO has deployed its local express delivery business in 6 countries in Southeast Asia (Vietnam, Cambodia, Laos, Myanmar, Singapore, Thailand) and 5 African countries (Nigeria, Kenya, Ghana, Uganda, Morocco), while expanding its new country layout and exploring potential markets such as South Asia and the Middle East. In order to meet the diversified timeliness needs of customers, ZTO has successively launched Biao kuai and "Kuaidi" products to further layer the aging products. At present, there are nearly 300 starting cities and 362 destination cities on the line, which has covered most of the major prefecture-level cities in the country, and the mainstream order entrance and platform of biaotong fast products have been docked. Based on the organizational model of "direct operation + terminal service crowdsourcing", based on the aviation high-speed rail trunk line + city bus shuttle system, "Quick Brother" uses digital layout and intelligent algorithms to provide time-sensitive products for 6/12 hours in the same city and 12/24/48 hours across the city. The Zhongtong cold chain trunk line network has begun to take shape, has achieved 8 core hubs in the country, covering more than 180 cities, and the shipment volume in the third and fourth quarters of 2021 has grown rapidly. In 2022, the "whale" pit plan will be launched, according to the different characteristics of each location, deepening the layout of franchisees, and is committed to building a door-to-door cold chain logistics network in the country. In 2021, the Group officially established the Rabbit Joy Team, which is committed to building a terminal network with standardized image and service capabilities through the transformation of contracting areas and the expansion of service providers. In the middle of 2021, the brand of Rabbit Joy Express Supermarket was upgraded to Rabbit Life+, adding business and life service capabilities and extending to diversified community services.