Why ZTO Express (Cayman) Inc (NYSE: ZTO) stock is crashing

Free $100 Forex No-Deposit Bonus

ZTO Express (Cayman) Inc (NYSE: ZTO) stock fell over 8.6% in the pre-market session of May 21st, 2020 (As of  8:15 am GMT-4 ; Source: Google finance) after the company in the first quarter of FY 20 has reported 14.4% fall in the revenues to RMB3,915.9 million (US$553.0 million), missing the analysts’ expectations of RMB 4.27 Billion, according to Refinitiv Ibes Estimate. The company reported the adjusted net income of RMB635.1 million (US$89.7 million), compared to RMB966.4 million during the same period last year. The company generated net cash provided by operating activities of RMB177.8 million (US$25.1 million), compared to RMB633.3 million in the same period last year. The decrease in net cash provided by operating activities is on back of mainly RMB310.7 million (US$43.9 million) decline in net profit,  and RMB209.1 million (US$29.5 million) increase in accounts receivables due to qualified network partners who were granted late payment terms for transit fees during COVID-19 outbreak.

Moreover, the revenue from the core express delivery business has fallen by 15.5% compared to the same period of 2019, due to a 4.9% increase in parcel volume and a 19.4% fall in unit price per parcel mainly to provide extra support to the network partners in order to maintain competitiveness and to cope with the negative impact of the COVID-19 outbreak. The revenue from freight forwarding services rose by 2.1% compared to the same period of 2019, mainly on the back of increased cross border e-commerce demand during the COVID-19 outbreak. The revenue from sales of accessories, majorly consisting of the sales of thermal paper used for digital waybills’ printing, fell by 15.2% due to use of lower-priced single-sheet digital waybill since second half of last year.

Additionally, the company has expended the current share repurchase program to June 30, 2021.  The Company anticipates to fund the repurchase out of its existing cash balance. At the end of March, 2020, the Company has purchased the total of 7,716,436 ADSs at an average purchase price of US$17.33, including repurchase commissions.

For fiscal 2020, the company expects annual parcel volume to be in the range of 15.9 billion to 16.4 billion for 2020, which represents an increase in the range of 37% to 42% for the combined last three quarters of the year, and the adjusted net income is projected to be in the range of RMB5.39 billion to RMB5.83 billion, representing a 10% to 20% increase for the combined last three quarters of the year.

Copyright © 2020. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.