ZTO Express Files 20-F Annual Report for Fiscal Year Ended December 31, 2023

TL;DR

<b>ZTO Express filed its 2023 annual report on Form 20-F, detailing corporate structure, past share activities, and regional industry participation.</b>

AI Summary

ZTO Express (Cayman) Inc. (ZTOEF) filed a Foreign Annual Report (20-F) with the SEC on April 19, 2024. ZTO Express (Cayman) Inc. filed its annual report on Form 20-F for the fiscal year ending December 31, 2023. The filing includes information on various entities and their operations throughout 2023, such as Wholly Owned ForeignKey Software Enterprise and Shanghai Zhongtongji Express Service Co Ltd. Details regarding share incentive plans and employee stock options from previous years (2016, 2021, 2022, 2023) are referenced. The company also references its involvement in the Catalog of Encouraged Industries in the Western Region for 2021, 2022, and 2023. The report covers financial data points including fair value inputs for Level 2 instruments as of December 31, 2023, and December 31, 2022.

Why It Matters

For investors and stakeholders tracking ZTO Express (Cayman) Inc., this filing contains several important signals. This filing provides a comprehensive overview of ZTO Express's corporate structure and operational entities for the fiscal year 2023, offering insights into its business framework. The inclusion of historical share incentive plan data and regional industry participation highlights the company's long-term strategies and its engagement with specific economic development initiatives.

Risk Assessment

Risk Level: low — ZTO Express (Cayman) Inc. shows low risk based on this filing. The filing is a routine annual report (20-F) and does not contain new material events or significant financial disclosures that would indicate immediate high risk.

Analyst Insight

Monitor future filings for updates on the performance of entities like Wholly Owned ForeignKey Software Enterprise and the impact of regional industry programs.

Key Numbers

• 2023-12-31 — Report Period End Date (Conformed period of report)
• 2024-04-19 — Filing Date (Filed as of date)
• 2023 — Fiscal Year (Operations and reporting year)
• 2022 — Previous Fiscal Year (Comparative data reference)
• 2021 — Earlier Fiscal Year (Comparative data reference)
• 2016 — Historical Year (Share incentive plan reference)
• Level 2 — Fair Value Input Level (Fair value inputs for financial instruments)

Key Players & Entities

• ZTO Express (Cayman) Inc. (company) — Filer of the 20-F report
• 2023-12-31 (date) — Conformed period of report
• 2024-04-19 (date) — Filed as of date
• Shanghai (location) — Business and mail address city
• Wholly Owned ForeignKey Software Enterprise (company) — Mentioned entity in 2023 operations
• Shanghai Zhongtongji Express Service Co Ltd (company) — Mentioned entity in 2023 operations
• Catalog of Encouraged Industries in Western Region (regulation) — Mentioned program for 2021-2023
• ZTOESHoldingLimited (company) — Related party entity

FAQ

Risk Factors

• Compliance with Cayman Islands Law [medium — regulatory]: The company's operations and corporate structure are subject to the laws of the Cayman Islands, which may differ from those in other jurisdictions.
• Competition in the Logistics Industry [high — market]: ZTO Express operates in a highly competitive express delivery and logistics market in China, facing pressure from both domestic and international players.
• Dependence on Technology and Infrastructure [medium — operational]: The company relies heavily on its extensive network of sorting facilities, delivery stations, and advanced technology to manage its operations efficiently.

Key Financial Figures

• $0.0001 — one Class A ordinary share par value US$0.0001 per share ZTO New York Stock Exchan
• $208.4 m — by our subsidiaries, and dividends of US$208.4 million, US$202.3 million and US$299.3 mi
• $202.3 million — s, and dividends of US$208.4 million, US$202.3 million and US$299.3 million were paid by ZTO t
• $299.3 million — S$208.4 million, US$202.3 million and US$299.3 million were paid by ZTO to its shareholders. H
• $1.00 — t were made at a rate of RMB7.0999 to US$1.00 and HK$7.8109 to US$1.00, the respectiv
• $7.8109 — at a rate of RMB7.0999 to US$1.00 and HK$7.8109 to US$1.00, the respective exchange rat
• $1 — RMB7.0999 to US$1.00 and HK$7.8109 to US$1.00, the respective exchange rates on De

Filing Documents

• zto-20231231x20f.htm (20-F) — 5013KB
• zto-20231231xex2d6.htm (EX-2.6) — 162KB
• zto-20231231xex2d7.htm (EX-2.7) — 1299KB
• zto-20231231xex4d2.htm (EX-4.2) — 123KB
• zto-20231231xex8d1.htm (EX-8.1) — 7KB
• zto-20231231xex12d1.htm (EX-12.1) — 13KB
• zto-20231231xex12d2.htm (EX-12.2) — 13KB
• zto-20231231xex13d1.htm (EX-13.1) — 7KB
• zto-20231231xex13d2.htm (EX-13.2) — 7KB
• zto-20231231xex15d1.htm (EX-15.1) — 2KB
• zto-20231231xex15d2.htm (EX-15.2) — 5KB
• zto-20231231xex97d1.htm (EX-97.1) — 30KB
• zto-20231231x20f006.jpg (GRAPHIC) — 116KB
• zto-20231231x20f010.jpg (GRAPHIC) — 97KB
• zto-20231231x20f011.jpg (GRAPHIC) — 68KB
• zto-20231231x20f012.jpg (GRAPHIC) — 101KB
• zto-20231231xex2d7002.jpg (GRAPHIC) — 3KB
• zto-20231231xex2d7003.jpg (GRAPHIC) — 3KB
• zto-20231231xex2d7004.jpg (GRAPHIC) — 3KB
• zto-20231231xex2d7005.jpg (GRAPHIC) — 3KB
• zto-20231231xex2d7006.jpg (GRAPHIC) — 3KB
• zto-20231231xex2d7007.jpg (GRAPHIC) — 4KB
• zto-20231231xex2d7011.jpg (GRAPHIC) — 1KB
• zto-20231231xex15d2001.jpg (GRAPHIC) — 6KB
• 0001104659-24-049017.txt (&nbsp;) — 18671KB
• zto-20231231.xsd (EX-101.SCH) — 94KB
• zto-20231231_def.xml (EX-101.DEF) — 399KB
• zto-20231231_lab.xml (EX-101.LAB) — 754KB
• zto-20231231_pre.xml (EX-101.PRE) — 663KB
• zto-20231231_cal.xml (EX-101.CAL) — 107KB
• zto-20231231x20f_htm.xml (XML) — 2481KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 4 Part I 5 EXPLANATORY NOTE 5 Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 10 Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE 10 Item 3. KEY INFORMATION 11 Item 4. INFORMATION ON THE COMPANY 66 Item 4A. UNRESOLVED STAFF COMMENTS 104 Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 104 Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 116 Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 130 Item 8. FINANCIAL INFORMATION 133 Item 9. THE OFFER AND LISTING 134 Item 10. ADDITIONAL INFORMATION 135 Item 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 151 Item 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 152 Part II 154 Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 154 Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS 154 Item 15.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 154 Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT 155 Item 16B. CODE OF ETHICS 155 Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 155 Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 155 Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 156 Item 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT 156 Item 16G. CORPORATE GOVERNANCE 156 Item 16H. MINE SAFETY DISCLOSURE 156 Item 16I . DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 156 Item 16J. Insider Trading Policies 157 Item 16K. Cybersecurity 157 Part III 158 Item 17.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 158 Item 18.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 158 Item 19. EXHIBITS 158

SIGNATURES

SIGNATURES 160 i Table of Contents INTRODUCTION ZTO Express (Cayman) Inc., which we refer to as ZTO, is not a Chinese operating company but rather a Cayman Islands holding company. ZTO conducts its operations in China both through its subsidiaries and through contractual arrangements with ZTO Express Co., Ltd., which we refer to as ZTO Express. PRC laws and regulations restrict and impose conditions on foreign direct investment in companies involved in the provision of domestic mail delivery services. Therefore, we operate that part of our business in China through ZTO Express and its subsidiaries. We rely on contractual arrangements among Shanghai Zhongtongji Network Technology Co. Ltd., or Shanghai Zhongtongji Network, one of our PRC subsidiaries, ZTO Express and the shareholders of ZTO Express to consolidate the financial results of ZTO Express with ours under U.S. GAAP. These contractual arrangements enable us to direct the activities of ZTO Express, receive the economic benefits that could potentially be significant to ZTO Express in consideration for the services provided by Shanghai Zhongtongji Network, and hold an exclusive option to purchase all or part of the equity interests in ZTO Express when and to the extent permitted by PRC law. Because of these contractual arrangements, we are the primary beneficiary of ZTO Express and hence consolidate its financial results with ours under U.S. GAAP. Revenues contributed by ZTO Express accounted for 97.7%, 90.4% and 81.4% of our total revenues for the fiscal years 2021, 2022 and 2023, respectively. As used in this annual report, "ZTO" refers to ZTO Express (Cayman) Inc., and "we," "us," "our company" or "our" refer to ZTO Express (Cayman) Inc. and its subsidiaries. Investors in our ADSs and/or Class A ordinary shares thus are not purchasing equity interest in ZTO Express but instead are purchasing equity interest in ZTO Express (Cayman) Inc., a Cayman Islands holding company. Our corporate structure is subj

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This annual report on Form 20-F contains forward-looking statements that relate to our current expectations and views of future events. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigations Reform Act of 1995. You can identify some of these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include statements relating to: our goals and strategies; our future business development, financial conditions and results of operations; the expected growth of the express delivery industry in China; our expectations regarding demand for and market acceptance of our services; our expectations regarding our relationships with network partners, direct and end customers, suppliers and our other stakeholders; competition in our industry; and government policies and regulations relating to our industry. You should read this annual report and the documents that we refer to in this annual report and have filed as exhibits to this annual report completely and with the understanding that our actual future results may be materially different from what we expect. Other Sections of this annual report discuss factors which could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk facto

View Full Filing

View this 20-F filing on SEC EDGAR