ZTO Express (Cayman) Inc (NYSE:ZTO) stock fell 7.03% (As on November 17, 11:38:11 AM UTC-4, Source: Google Finance) after the company posted mixed result in the third quarter of FY 23. Revenue from the core express delivery business increased by 2.2% compared to the same period of 2022, as a combined result of a 18.1% increase in parcel volume and a 13.5% decrease in parcel unit price. KA revenue (includes delivery fees) from direct sales organizations, established to serve core express KA customers, decreased 51.3% through either reengagement of partner outlets or rationalization due to loss-making. Revenue from freight forwarding services decreased by 19.8% compared to the same period of 2022 due to weakening cross border e-commerce demand and declining pricing. Revenue from sales of accessories, largely consisted of sales of thermal paper used for digital waybills’ printing, increased by 32.3% in line with parcel volume growth. Other revenues were mainly derived from financing services. Gross Profit was RMB2,706.4 million (US$371.0 million), increased 10.7% from RMB2,444.4 million in the same period last year as a combined result of increased revenues and cost productivity gain. Gross margin rate improved to 29.8% from 27.3% for the same period last year. Income from operations was RMB2,423.6 million (US$332.2 million), an increase of 11.4% from RMB2,174.8 million for the same period last year. Operating margin rate increased to 26.7% from 24.3% in the same period last year. Net income was RMB2,349.6 million (US$322.0 million), which increased by 24.0% from RMB1,895.5 million in the same period last year.

ZTO in the third quarter of FY 23 has reported the adjusted earnings per share of 2.83 renminbi ($0.39), beating the analysts’ estimates for the adjusted earnings per share of 2.75 renminbi. The company had reported 1.5 percent increase in the adjusted revenue to 9.08 billion renminbi in the third quarter of FY 23, missing the analysts’ estimates for revenue of 9.84 billion renminbi. Adjusted EBITDA was RMB3.438.6 million (US$471.3 million), compared to RMB2,997.6 million in the same period last year. Net cash provided by operating activities was RMB2,938.1 million (US$402.7 million), compared with RMB2,823.3 million in the same period last year. Parcel volume was 7,523 million, an increase of 18.1% from 6,368 million in the same period of 2022.

The Company reiterates that its parcel volume for 2023 is expected to be in the range of 29.27 billion to 30.24 billion, representing a 20% to 24% increase year over year.