ZTO Express (Cayman) Inc (NYSE: ZTO) stock fell over 5.1% in the pre-market session (as of 7:24 am GMT-4; Source: Google finance) on lower than expected performance.

There was a decrease in unit price per parcel or ASP, which is largely due to incremental volume incentives. However, the company in the fourth quarter of FY 18 has reported 29.9% increase in the revenue to RMB5,627.5 million (US$818.5 million) mainly driven by 29.4% increase in revenue from express delivery services, with a 34.7% increase in parcel volumes

Net income was rose 4.7% to RMB1,278.9 million (US$186.0 million). Gross profit was RMB1.55 billion, an increase of 14.6% from RMB1.35 billion last year. Gross margin decreased to 27.5% from 31.2%, mainly driven by parcel volume increase.

During 2018, Parcel volume increased by 37.1% year-over-year to reach RMB 8.52 billion as the company increased the leading position in China’s express delivery industry with the market share of 16.8%.

ZTO has approved a special dividend of US$0.24 per ADS for 2018, which is expected to be paid on April 8, 2019 to shareholders of record as of the close of business on April 1, 2019. During the fourth quarter of 2018, the Company has purchased an aggregate of 1,700,000 ADSs at an average purchase price of US$15.85 per ADS, including repurchase commissions.

For FY 19, ZTO expects parcel volume for 2019 to be in the range of 11.51 billion to 11.93 billion, representing a 35% to 40% increase year over year, and the company’s adjusted net income is expected to be in the range of RMB4.8 billion to RMB5.2 billion, representing a 14.3% to 23.8% increase from the same period of 2018.

In 2019, ZTO will focus on the following initiatives. First, the company will strengthen overall service quality by using multi-faceted assessment indicators such as time limits, customers service appraisal and the final index to monitor ending constant value and customer satisfaction. Second, in conjunction with establishing standard pickup and delivery fees schedule, the network partners, the network’s policies are designed to be more direct and effective in balancing existing and incremental profit by the network partners. Third, the company would enhance and expand the breadth and depth of the network in rural area to support the agriculture customers to help alleviate poverty. Fourth, the company will increase and accelerate the investments into infrastructure to further strengthen our cost advantage and provide readiness for incoming value demand. Lastly, the company will increase investment in research and technology.