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What changed in ZTO Express (Cayman) Inc.'s 20-F — 2023 vs 2024

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Paragraph-level year-over-year comparison of ZTO Express (Cayman) Inc.'s 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+407 added−381 removedSource: 20-F (2025-04-17) vs 20-F (2024-04-19)

Top changes in ZTO Express (Cayman) Inc.'s 2024 20-F

407 paragraphs added · 381 removed · 335 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

118 edited+39 added−16 removed634 unchanged
Biggest changeSubsidiaries subsidiaries Elimination Total ​ ​ RMB ​ ​ (in thousands) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 8,881 ​ 9,516,208 ​ 2,808,795 ​ — ​ 12,333,884 Restricted cash ​ — ​ 569,244 ​ 117,324 ​ — ​ 686,568 Accounts receivable, net ​ — ​ 213,351 ​ 359,207 ​ — ​ 572,558 Financing receivables, net — ​ 180,021 ​ 955,424 ​ — ​ 1,135,445 Short-term investment ​ 1,020,094 ​ 5,886,266 ​ 548,273 ​ — ​ 7,454,633 Inventories ​ — ​ 7,669 ​ 20,405 ​ — ​ 28,074 Advances to suppliers ​ — ​ 739,690 ​ 82,252 ​ — ​ 821,942 Prepayments and other current assets ​ — ​ 1,662,952 ​ 2,109,425 ​ — ​ 3,772,377 Amounts due from related parties outside the consolidated group ​ — ​ 124,640 ​ 23,427 ​ — ​ 148,067 Investments in equity investees including subsidiaries and VIE, and amounts due from subsidiaries and VIE ​ 64,660,093 ​ 15,134,775 ​ 10,556,052 ​ (90,350,920) ​ — Investment in equity investees ​ 1,144,479 ​ 2,058,375 ​ 252,265 ​ — ​ 3,455,119 Property and equipment, net ​ — ​ 26,252,559 ​ 5,928,466 ​ — ​ 32,181,025 Land use rights, net ​ — ​ 4,402,516 ​ 1,234,585 ​ — ​ 5,637,101 Intangible assets, net ​ — ​ 23,240 ​ — ​ — ​ 23,240 Operating lease right-of-use assets ​ — ​ 36,546 ​ 635,647 ​ — ​ 672,193 Goodwill ​ — ​ 84,430 ​ 4,157,111 ​ — ​ 4,241,541 Deferred tax assets ​ — ​ 579,011 ​ 300,761 ​ — ​ 879,772 Long-term investment ​ 69,629 ​ 11,601,252 ​ 500,000 ​ — ​ 12,170,881 Long-term financing receivables, net ​ — ​ 73,589 ​ 891,191 ​ — ​ 964,780 Other non-current assets ​ — ​ 567,080 ​ 134,678 ​ — ​ 701,758 Amounts due from related parties outside the consolidated groups-non-current ​ — ​ 584,263 ​ — ​ — ​ 584,263 TOTAL ASSETS ​ 66,903,176 ​ 80,297,677 ​ 31,615,288 ​ (90,350,920) ​ 88,465,221 Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term bank borrowings ​ — ​ 400,000 ​ 7,365,990 ​ — ​ 7,765,990 Accounts payable ​ — ​ 664,358 ​ 1,892,652 ​ — ​ 2,557,010 Advances from customers ​ — ​ 36,626 ​ 1,709,101 ​ — ​ 1,745,727 Income tax payable ​ — ​ 134,963 ​ 198,294 ​ — ​ 333,257 Amounts due to related parties outside the consolidated group ​ — ​ 37,662 ​ 197,021 ​ — ​ 234,683 Amounts due to related parties within the consolidated group ​ — ​ 13,302,933 ​ — ​ (13,302,933) ​ — Operating lease liabilities, current ​ — ​ 4,978 ​ 181,275 ​ — ​ 186,253 Dividends payable ​ 1,548 ​ — ​ — ​ — ​ 1,548 Other current liabilities ​ 70,333 ​ 2,735,803 ​ 4,430,580 ​ — ​ 7,236,716 Non-current operating lease liabilities ​ — ​ 31,568 ​ 424,311 ​ — ​ 455,879 Deferred tax liabilities ​ — ​ 556,229 ​ 81,971 ​ — ​ 638,200 Convertible senior bond ​ 7,029,550 ​ — ​ — ​ — ​ 7,029,550 TOTAL LIABILITIES ​ 7,101,431 ​ 17,905,120 ​ 16,481,195 ​ (13,302,933) ​ 28,184,813 Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares ​ 525 ​ 17,845,730 ​ 600,000 ​ (18,445,730) ​ 525 Additional paid-in capital ​ 24,201,745 ​ 600,000 ​ 3,918,356 ​ (4,518,356) ​ 24,201,745 Treasury shares, at cost ​ (510,986) ​ — ​ — ​ — ​ (510,986) Retained earnings ​ 36,301,185 ​ 44,419,495 ​ 10,620,516 ​ (55,040,011) ​ 36,301,185 Accumulated other comprehensive loss ​ (190,724) ​ (956,110) ​ — ​ 956,110 ​ (190,724) Non-controlling interests ​ — ​ 483,442 ​ (4,779) ​ — ​ 478,663 Total Equity ​ 59,801,745 ​ 62,392,557 ​ 15,134,093 ​ (77,047,987) ​ 60,280,408 TOTAL LIABILITIES AND EQUITY ​ 66,903,176 ​ 80,297,677 ​ 31,615,288 ​ (90,350,920) ​ 88,465,221 ​ 13 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
Biggest changeSubsidiaries subsidiaries Elimination Total ​ ​ RMB ​ ​ (in thousands) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 8,881 ​ 9,516,208 ​ 2,808,795 ​ — ​ 12,333,884 Restricted cash ​ — ​ 569,244 ​ 117,324 ​ — ​ 686,568 Accounts receivable, net ​ — ​ 213,351 ​ 359,207 ​ — ​ 572,558 Financing receivables, net ​ — ​ 180,021 ​ 955,424 ​ — ​ 1,135,445 Short-term investment ​ 1,020,094 ​ 5,886,266 ​ 548,273 ​ — ​ 7,454,633 Inventories ​ — ​ 7,669 ​ 20,405 ​ — ​ 28,074 Advances to suppliers ​ — ​ 739,690 ​ 82,252 ​ — ​ 821,942 Prepayments and other current assets ​ — ​ 1,662,952 ​ 2,109,425 ​ — ​ 3,772,377 Amounts due from related parties outside the consolidated group ​ — ​ 124,640 ​ 23,427 ​ — ​ 148,067 Investments in equity investees including subsidiaries and VIE, and amounts due from subsidiaries and VIE ​ 64,660,093 ​ 15,134,775 ​ 10,556,052 ​ (90,350,920) ​ — Investment in equity investees ​ 1,144,479 ​ 2,058,375 ​ 252,265 ​ — ​ 3,455,119 Property and equipment, net ​ — ​ 26,252,559 ​ 5,928,466 ​ — ​ 32,181,025 Land use rights, net ​ — ​ 4,402,516 ​ 1,234,585 ​ — ​ 5,637,101 Intangible assets, net ​ — ​ 23,240 ​ — ​ — ​ 23,240 Operating lease right-of-use assets ​ — ​ 36,546 ​ 635,647 ​ — ​ 672,193 Goodwill ​ — ​ 84,430 ​ 4,157,111 ​ — ​ 4,241,541 Deferred tax assets ​ — ​ 579,011 ​ 300,761 ​ — ​ 879,772 Long-term investment ​ 69,629 ​ 11,601,252 ​ 500,000 ​ — ​ 12,170,881 Long-term financing receivables, net ​ — ​ 73,589 ​ 891,191 ​ — ​ 964,780 Other non-current assets ​ — ​ 567,080 ​ 134,678 ​ — ​ 701,758 Amounts due from related parties outside the consolidated groups-non-current ​ — ​ 584,263 ​ — ​ — ​ 584,263 TOTAL ASSETS ​ 66,903,176 ​ 80,297,677 ​ 31,615,288 ​ (90,350,920) ​ 88,465,221 Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term bank borrowings ​ — ​ 400,000 ​ 7,365,990 ​ — ​ 7,765,990 Accounts payable ​ — ​ 664,358 ​ 1,892,652 ​ — ​ 2,557,010 Advances from customers ​ — ​ 36,626 ​ 1,709,101 ​ — ​ 1,745,727 Income tax payable ​ — ​ 134,963 ​ 198,294 ​ — ​ 333,257 Amounts due to related parties outside the consolidated group ​ — ​ 37,662 ​ 197,021 ​ — ​ 234,683 Amounts due to related parties within the consolidated group ​ — ​ 13,302,933 ​ — ​ (13,302,933) ​ — Operating lease liabilities, current ​ — ​ 4,978 ​ 181,275 ​ — ​ 186,253 Dividends payable ​ 1,548 ​ — ​ — ​ — ​ 1,548 Other current liabilities ​ 70,333 ​ 2,735,803 ​ 4,430,580 ​ — ​ 7,236,716 Non-current operating lease liabilities ​ — ​ 31,568 ​ 424,311 ​ — ​ 455,879 Deferred tax liabilities ​ — ​ 556,229 ​ 81,971 ​ — ​ 638,200 Convertible senior bond ​ 7,029,550 ​ — ​ — ​ — ​ 7,029,550 TOTAL LIABILITIES ​ 7,101,431 ​ 17,905,120 ​ 16,481,195 ​ (13,302,933) ​ 28,184,813 Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares ​ 525 ​ 17,845,730 ​ 600,000 ​ (18,445,730) ​ 525 Additional paid-in capital ​ 24,201,745 ​ 600,000 ​ 3,918,356 ​ (4,518,356) ​ 24,201,745 Treasury shares, at cost ​ (510,986) ​ — ​ — ​ — ​ (510,986) Retained earnings ​ 36,301,185 ​ 44,419,495 ​ 10,620,516 ​ (55,040,011) ​ 36,301,185 Accumulated other comprehensive loss ​ (190,724) ​ (956,110) ​ — ​ 956,110 ​ (190,724) Non-controlling interests ​ — ​ 483,442 ​ (4,779) ​ — ​ 478,663 Total Equity ​ 59,801,745 ​ 62,392,557 ​ 15,134,093 ​ (77,047,987) ​ 60,280,408 TOTAL LIABILITIES AND EQUITY ​ 66,903,176 ​ 80,297,677 ​ 31,615,288 ​ (90,350,920) ​ 88,465,221 ​ 14 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2022 ​ ZTO Express ​ VIE and VIE’s ​ Consolidated ​ ​ (Cayman) Inc. ​ Subsidiaries ​ subsidiaries ​ Elimination ​ Total ​ ​ RMB ​ ​ (in thousands) Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ 70,937 ​ 8,869,361 ​ 2,752,475 ​ — ​ 11,692,773 Restricted cash ​ — ​ 895,483 ​ — ​ — ​ 895,483 Accounts receivable, net ​ — ​ 197,573 ​ 621,395 ​ — ​ 818,968 Financing receivables, net ​ — ​ 104,295 ​ 847,054 ​ — ​ 951,349 Short-term investment ​ 2,487,775 ​ 2,995,363 ​ 270,345 ​ — ​ 5,753,483 Inventories ​ — ​ 12,386 ​ 28,151 ​ — ​ 40,537 Advances to suppliers ​ — ​ 810,023 ​ 51,550 ​ — ​ 861,573 Prepayments and other current assets ​ — ​ 1,948,516 ​ 1,197,862 ​ — ​ 3,146,378 Amounts due from related parties outside the consolidated group ​ — ​ 288,745 ​ 25,738 ​ — ​ 314,483 Investments in equity investees including subsidiaries and VIE, and amounts due from subsidiaries and VIE ​ 57,207,495 ​ 13,136,215 ​ 6,554,502 ​ (76,898,212) ​ — Investment in equity investees ​ 1,116,085 ​ 2,490,767 ​ 343,692 ​ — ​ 3,950,544 Property and equipment, net ​ — ​ 22,897,182 ​ 5,916,022 ​ — ​ 28,813,204 Land use rights, net ​ — ​ 4,225,420 ​ 1,217,531 ​ — ​ 5,442,951 Intangible assets, net ​ — ​ 29,437 ​ — ​ — ​ 29,437 Operating lease right-of-use assets ​ — ​ 101,696 ​ 706,810 ​ — ​ 808,506 Goodwill ​ — ​ 84,430 ​ 4,157,111 ​ — ​ 4,241,541 Deferred tax assets ​ — ​ 313,539 ​ 436,558 ​ — ​ 750,097 Long-term investment ​ — ​ 6,622,660 ​ 699,885 ​ — ​ 7,322,545 Long-term financing receivables, net ​ — ​ 166,948 ​ 1,128,807 ​ — ​ 1,295,755 Other non-current assets ​ — ​ 434,390 ​ 382,449 ​ — ​ 816,839 Amounts due from related parties outside the consolidated groups-non-current ​ — ​ 577,140 ​ — ​ — ​ 577,140 TOTAL ASSETS ​ 60,882,292 ​ 67,201,569 ​ 27,337,937 ​ (76,898,212) ​ 78,523,586 Liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short-term bank borrowings ​ — ​ — ​ 5,394,423 ​ — ​ 5,394,423 Accounts payable ​ — ​ 594,928 ​ 1,607,764 ​ — ​ 2,202,692 Notes payable ​ — ​ 200,000 ​ — ​ — ​ 200,000 Advances from customers ​ — ​ 18,781 ​ 1,355,910 ​ — ​ 1,374,691 Income tax payable ​ — ​ 62,449 ​ 165,973 ​ — ​ 228,422 Amounts due to related parties outside the consolidated group ​ — ​ 9,368 ​ 39,770 ​ — ​ 49,138 Amounts due to related parties within the consolidated group ​ — ​ 12,365,223 ​ — ​ (12,365,223) ​ — Operating lease liabilities, current ​ — ​ 12,919 ​ 216,799 ​ — ​ 229,718 Dividends payable ​ 1,497 ​ — ​ — ​ — ​ 1,497 Other current liabilities ​ 63,273 ​ 1,752,693 ​ 4,908,777 ​ — ​ 6,724,743 Non-current operating lease liabilities ​ — ​ 87,720 ​ 422,629 ​ — ​ 510,349 Deferred tax liabilities ​ — ​ 254,128 ​ 92,344 ​ — ​ 346,472 Convertible senior bond ​ 6,788,971 ​ — ​ — ​ — ​ 6,788,971 TOTAL LIABILITIES ​ 6,853,741 ​ 15,358,209 ​ 14,204,389 ​ (12,365,223) ​ 24,051,116 Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary shares ​ 535 ​ 17,155,492 ​ 600,000 ​ (17,755,492) ​ 535 Additional paid-in capital ​ 26,717,727 ​ 600,000 ​ 3,918,356 ​ (4,518,356) ​ 26,717,727 Treasury shares, at cost ​ (2,062,530) ​ — ​ — ​ — ​ (2,062,530) Retained earnings ​ 29,459,491 ​ 32,950,608 ​ 8,617,859 ​ (41,568,467) ​ 29,459,491 Accumulated other comprehensive loss ​ (86,672) ​ 690,674 ​ — ​ (690,674) ​ (86,672) Non-controlling interests ​ — ​ 446,586 ​ (2,667) ​ — ​ 443,919 Total Equity ​ 54,028,551 ​ 51,843,360 ​ 13,133,548 ​ (64,532,989) ​ 54,472,470 TOTAL LIABILITIES AND EQUITY ​ 60,882,292 ​ 67,201,569 ​ 27,337,937 ​ (76,898,212) ​ 78,523,586 ​ ​ 15 Table of Contents The following table presents the condensed consolidating operations data for ZTO Express (Cayman) Inc., the VIE and VIE’s subsidiaries, and other entities for the periods presented.
According to the Circular of Overseas Listing and Offering, issuers that have already been listed in an overseas market by March 31, 2023, such as our company, are not required to make any immediate filing.
According to the Circular of Overseas Listing and Offering, issuers that have already been listed in an overseas market by March 31, 2023, such as our company, are not required to make any immediate filing.
However, under the Overseas Listing Trial Measures, such issuers will be required to complete certain filing procedures with the CSRC in connection with future securities offerings and listings outside of mainland China, including follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities.
However, under the Overseas Listing Trial Measures, such issuers will be required to complete certain filing procedures with the CSRC in connection with future securities offerings and listings outside of mainland China, including follow-on offerings, issuance of convertible bonds, offshore relisting after going-private transactions, and other equivalent offering activities.
In addition, such issuers are required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to conversion of listing status in overseas markets (such as switching from secondary listing to dual primary listing).
In addition, such issuers are required to file a report to the CSRC after the occurrence and public disclosure of certain material corporate events, including but not limited to conversion of listing status in overseas markets (such as switching from secondary listing to dual primary listing).
We have elected to follow home country practice in lieu of the corporate governance requirements of the New York Stock Exchange with respect to the adoption of our 2024 Share Incentive Plan without the approval of our shareholders.
We have elected to follow home country practice in lieu of the corporate governance requirements of the New York Stock Exchange with respect to the adoption of our 2024 Share Incentive Plan without the approval of our shareholders.
Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective on August 1, 2008, and recently amended on June 24, 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be declared to the PRC Ministry of Commerce before they can be completed.
Moreover, the Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective on August 1, 2008, and amended on June 24, 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be declared to the PRC Ministry of Commerce before they can be completed.
Subsidiaries subsidiaries Elimination Total ​ ​ RMB ​ ​ (in thousands) Revenue ​ — 19,966,654 31,276,014 (12,823,753) 38,418,915 Cost of revenues ​ — (12,858,581) (27,791,654) 13,893,846 (26,756,389) Gross profit ​ — ​ 7,108,073 ​ 3,484,360 ​ 1,070,093 ​ 11,662,526 Operating (expenses)/income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (260,613) ​ (1,292,702) ​ (962,378) ​ 90,440 ​ (2,425,253) Other operating income, net ​ 52,968 ​ 1,857,145 ​ 21,071 ​ (1,160,533) ​ 770,651 Other income/(expenses) ​ (23,907) ​ 605,560 ​ 99,124 ​ — ​ 680,777 Income before income tax and share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ (231,552) ​ 8,278,076 ​ 2,642,177 ​ — ​ 10,688,701 Income tax expense ​ (26,270) ​ (1,318,961) ​ (593,369) ​ — ​ (1,938,600) Share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ 9,006,826 ​ 2,054,159 ​ (44,856) ​ (11,011,773) ​ 4,356 Net income ​ 8,749,004 ​ 9,013,274 ​ 2,003,952 ​ (11,011,773) ​ 8,754,457 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
Subsidiaries subsidiaries Elimination Total ​ ​ RMB ​ ​ (in thousands) Revenue ​ — 19,966,654 31,276,014 (12,823,753) 38,418,915 Cost of revenues ​ — (12,858,581) (27,791,654) 13,893,846 (26,756,389) Gross profit ​ — ​ 7,108,073 ​ 3,484,360 ​ 1,070,093 ​ 11,662,526 Operating (expenses)/income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (260,613) ​ (1,292,702) ​ (962,378) ​ 90,440 ​ (2,425,253) Other operating income, net ​ 52,968 ​ 1,857,145 ​ 21,071 ​ (1,160,533) ​ 770,651 Other income/(expenses) ​ (23,907) ​ 605,560 ​ 99,124 ​ — ​ 680,777 Income before income tax and share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ (231,552) ​ 8,278,076 ​ 2,642,177 ​ — ​ 10,688,701 Income tax expense ​ (26,270) ​ (1,318,961) ​ (593,369) ​ — ​ (1,938,600) Share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ 9,006,826 ​ 2,054,159 ​ (44,856) ​ (11,011,773) ​ 4,356 Net income ​ 8,749,004 ​ 9,013,274 ​ 2,003,952 ​ (11,011,773) ​ 8,754,457 ​ 16 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2022 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
Many factors beyond our control, including inflation and deflation, fluctuations in currency exchange rates, volatility of stock and property markets, interest rates, tax rates and other government policies and changes in unemployment rates can adversely affect consumer confidence and spending behavior on e-commerce platforms, which could in turn materially and adversely affect our growth and profitability.
Many factors beyond our control, including inflation and deflation, fluctuations in currency exchange rates, volatility of stock and real property markets, interest rates, tax rates and other government policies and changes in unemployment rates can adversely affect consumer confidence and spending behavior on e-commerce platforms, which could in turn materially and adversely affect our growth and profitability.
Such strategy with respect to the capped call transactions is subject to the risks described under “If we cannot obtain sufficient cash when we need it, we may not be able to meet our payment obligations under our notes.” Furthermore, if the market price per ADS, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution upon conversion of the notes to the extent that such market price exceeds the cap price of the capped call transactions (subject to our ability to elect, subject to certain conditions, to settle the capped call transactions in cash, in which case we would not receive any ADSs from the option counterparties upon settlement of the capped call transactions). 60 Table of Contents Provisions of our convertible senior notes could discourage an acquisition of us by a third-party.
Such strategy with respect to the capped call transactions is subject to the risks described under “If we cannot obtain sufficient cash when we need it, we may not be able to meet our payment obligations under our notes.” Furthermore, if the market price per ADS, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution upon conversion of the notes to the extent that such market price exceeds the cap price of the capped call transactions (subject to our ability to elect, subject to certain conditions, to settle the capped call transactions in cash, in which case we would not receive any ADSs from the option counterparties upon settlement of the capped call transactions). 61 Table of Contents Provisions of our convertible senior notes could discourage an acquisition of us by a third-party.
If the PRC government finds that our contractual arrangements do not comply with its restrictions on foreign investment in domestic express delivery services of mail, or if the PRC government otherwise finds that we, ZTO Express, or any of its subsidiaries are in violation of PRC laws or regulations or lack the necessary permits or licenses to operate our business, the PRC regulatory authorities would have broad discretion in dealing with such violations or failures, including, without limitation: ● revoking the business licenses and/or operating licenses of such entities; ● discontinuing or placing restrictions or onerous conditions on our operation through any transactions between our PRC subsidiaries and the consolidated affiliated entities; ● imposing fines, confiscating the income from our PRC subsidiaries or the consolidated affiliated entities, or imposing other requirements with which such entities may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or direct the activities of the VIE; ● restricting or prohibiting our use of the proceeds of any of our financing outside China to fund our business and operations in China; or ● restricting or prohibiting our future capital raising activities by the CSRC.
If the PRC government finds that our contractual arrangements do not comply with its restrictions on foreign investment in domestic express delivery services of mail, or if the PRC government otherwise finds that we, ZTO Express, or any of its subsidiaries are in violation of PRC laws or regulations or lack the necessary permits or licenses to operate our business, the PRC regulatory authorities would have broad discretion in dealing with such violations or failures, including, without limitation: ● revoking the business licenses and/or operating licenses of such entities; ● discontinuing or placing restrictions or onerous conditions on our operation through any transactions between our PRC subsidiaries and the consolidated affiliated entities; 43 Table of Contents ● imposing fines, confiscating the income from our PRC subsidiaries or the consolidated affiliated entities, or imposing other requirements with which such entities may not be able to comply; ● requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with the VIE and deregistering the equity pledges of the VIE, which in turn would affect our ability to consolidate, derive economic interests from, or direct the activities of the VIE; ● restricting or prohibiting our use of the proceeds of any of our financing outside China to fund our business and operations in China; or ● restricting or prohibiting our future capital raising activities by the CSRC.
On February 3, 2015, the State Taxation Administration of the PRC issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or STA Public Notice 7, which was recently amended on December 29, 2017.
On February 3, 2015, the State Taxation Administration of the PRC issued a Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or STA Public Notice 7, which was most recently amended on December 29, 2017.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 46 Table of Contents On July 6, 2021, the PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
Any failure to obtain or delay in obtaining the CSRC approval for any of our offshore offerings, or a rescission of such approval if obtained by us, would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, restrictions or limitations on our ability to pay dividends outside of China, and other forms of sanctions that may materially and adversely affect our business, financial condition, and results of operations. 48 Table of Contents On July 6, 2021, the PRC government authorities issued Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
Further, we are not likely to finance the activities of the consolidated affiliated entities by means of capital contributions due to regulatory restrictions relating to foreign investment in PRC domestic enterprises engaged in certain businesses. 48 Table of Contents The State Administration of Foreign Exchange promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19, effective on June 1, 2015, in replacement of the Supplementary Circular of the Comprehensive Department of the State Administration of Foreign Exchange on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Circular from the State Administration of Foreign Exchange on Issues Relating to the Improvement of Business Operations with Respect to the Administration of Foreign Exchange Capital Payment and Settlement of Foreign-invested Enterprises, and the Circular from the State Administration of Foreign Exchange on Issues concerning the Pilot Reform of the Administrative Approach Regarding the Settlement of the Foreign Exchange Capitals of Foreign - invested Enterprises in Certain Areas.
Further, we are not likely to finance the activities of the consolidated affiliated entities by means of capital contributions due to regulatory restrictions relating to foreign investment in PRC domestic enterprises engaged in certain businesses. 50 Table of Contents The State Administration of Foreign Exchange promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of Foreign-Invested Enterprises, or SAFE Circular 19, effective on June 1, 2015, in replacement of the Supplementary Circular of the Comprehensive Department of the State Administration of Foreign Exchange on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Circular from the State Administration of Foreign Exchange on Issues Relating to the Improvement of Business Operations with Respect to the Administration of Foreign Exchange Capital Payment and Settlement of Foreign-invested Enterprises, and the Circular from the State Administration of Foreign Exchange on Issues concerning the Pilot Reform of the Administrative Approach Regarding the Settlement of the Foreign Exchange Capitals of Foreign - invested Enterprises in Certain Areas.
Shanghai Zhongtongji Network, our wholly owned subsidiary, has enjoyed a preferential enterprise income tax rate of 15% as a high and new technology enterprise since 2017. It recently renewed this status for another three-year period in November 2023.
Shanghai Zhongtongji Network, our wholly owned subsidiary, has enjoyed a preferential enterprise income tax rate of 15% as a high and new technology enterprise since 2017. It renewed this status for another three-year period in November 2023.
Risk Factors⸺Risks Related to Doing Business in China⸺We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” on page 48 of this annual report. ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.
Risk Factors⸺Risks Related to Doing Business in China⸺We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” on page 50 of this annual report. ● The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections.
The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. ​ 63 Table of Contents We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
The depositary may refuse to deliver, transfer or register transfers of our ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason. ​ 64 Table of Contents We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
As a result, we may be required to expend valuable resources to comply with STA Public Notice 7 and STA Announcement 37 or to request the transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations. 55 Table of Contents Discontinuation of any of the preferential tax treatments or imposition of any additional taxes could adversely affect our financial condition and results of operations.
As a result, we may be required to expend valuable resources to comply with STA Public Notice 7 and STA Announcement 37 or to request the transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations. 56 Table of Contents Discontinuation of any of the preferential tax treatments or imposition of any additional taxes could adversely affect our financial condition and results of operations.
Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder or upon a change of ultimate beneficial ownership of any Class B ordinary shares to any person who is not an affiliate of the holder of such Class B ordinary shares, such Class B ordinary shares shall be automatically and immediately converted into the equal number of Class A ordinary shares. ​ 58 Table of Contents As of the date of this annual report, Zto Lms Holding Limited, a British Virgin Islands company wholly beneficially owned by The LMS Family Trust, with Mr.
Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder or upon a change of ultimate beneficial ownership of any Class B ordinary shares to any person who is not an affiliate of the holder of such Class B ordinary shares, such Class B ordinary shares shall be automatically and immediately converted into the equal number of Class A ordinary shares. ​ 59 Table of Contents As of the date of this annual report, Zto Lms Holding Limited, a British Virgin Islands company wholly beneficially owned by The LMS Family Trust, with Mr.
Risk Factors⸺Risks Related to Doing Business in China⸺Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations” on page 45 of this annual report. ● PRC government’s significant authority in regulating our operations and its oversight and control over securities offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
Risk Factors⸺Risks Related to Doing Business in China⸺Changes in China’s economic, political or social conditions or government policies could have a material adverse effect on our business and operations” on page 47 of this annual report. ● PRC government’s significant authority in regulating our operations and its oversight and control over securities offerings conducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors.
Risk Factors⸺Risks Related to Doing Business in China⸺Uncertainties with respect to the legal system in the jurisdiction where we operate could advers ely affect us” on page 46 of this annual report. ● We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
Risk Factors⸺Risks Related to Doing Business in China⸺Uncertainties with respect to the legal system in the jurisdiction where we operate could advers ely affect us” on page 48 of this annual report. ● We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
In addition, there is no assurance that any exchange of Class A ordinary shares into ADSs (and vice versa) will be completed in accordance with the timelines that investors may anticipate. 65 Table of Contents Furthermore, the depositary for the ADSs is entitled to charge holders fees for various services including for the issuance of ADSs upon deposit of Class A ordinary shares, cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share dividends or other free share distributions, distributions of securities other than ADSs and annual service fees.
In addition, there is no assurance that any exchange of Class A ordinary shares into ADSs (and vice versa) will be completed in accordance with the timelines that investors may anticipate. 66 Table of Contents Furthermore, the depositary for the ADSs is entitled to charge holders fees for various services including for the issuance of ADSs upon deposit of Class A ordinary shares, cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share dividends or other free share distributions, distributions of securities other than ADSs and annual service fees.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of the shares. ​ 47 Table of Contents We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of the shares. ​ 49 Table of Contents We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.
Risk Factors⸺Risks Related to Doing Business in China⸺The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs and ordinary shares” on page 46 of this annual report. ● Risks and uncertainties arising from the legal system in the jurisdiction where we operate, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in the jurisdiction where we operate, could result in a material adverse change in our operations and the value of our ADSs.
Risk Factors⸺Risks Related to Doing Business in China⸺The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs and ordinary shares” on page 48 of this annual report. ● Risks and uncertainties arising from the legal system in the jurisdiction where we operate, including risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in the jurisdiction where we operate, could result in a material adverse change in our operations and the value of our ADSs.
Further interpretations may make it clear on whether non-PRC shareholders of ZTO would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that ZTO is treated as a PRC resident enterprise. ​ 54 Table of Contents We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
Further interpretations may make it clear on whether non-PRC shareholders of ZTO would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that ZTO is treated as a PRC resident enterprise. ​ 55 Table of Contents We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.
For the purpose of this presentation, (i) the intercompany transactions among entities within our subsidiaries or among entities within the VIE and VIE’s subsidiaries were eliminated; and (ii) the equity method is used to account for the interests of ZTO Express (Cayman) Inc. in earnings of our subsidiaries, and the interests of our subsidiary in earnings of the VIE, as presented below under “Share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
For the purpose of this presentation, (i) the intercompany transactions among entities within our subsidiaries or among entities within the VIE and VIE’s subsidiaries were eliminated; and (ii) the equity method is used to account for the interests of ZTO Express (Cayman) Inc. in earnings of our subsidiaries, and the interests of our subsidiary in earnings of the VIE, as presented below under “Share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
For the purpose of this presentation, (i) the intercompany transactions among entities within our subsidiaries or among entities within the VIE and VIE’s subsidiaries were eliminated; and (ii) the equity method is used to account for ZTO Express (Cayman) Inc.’s investments in our subsidiaries and our subsidiary’s investment in the VIE, as presented below under “Investments in consolidated subsidiaries, VIE and other equity investees.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
For the purpose of this presentation, (i) the intercompany transactions among entities within our subsidiaries or among entities within the VIE and VIE’s subsidiaries were eliminated; and (ii) the equity method is used to account for ZTO Express (Cayman) Inc.’s investments in our subsidiaries and our subsidiary’s investment in the VIE, as presented below under “Investments in consolidated subsidiaries, VIE and other equity investees.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
As of December 31, 2023, we had over 31,000 pickup/delivery outlets and over 6,000 direct network partners under our ZTO brand. We rely on these network partners to directly interact with and serve end customers. However, the interests of a network partner may not be entirely aligned with ours or with those of our other network partners at all times.
As of December 31, 2024, we had over 31,000 pickup/delivery outlets and over 6,000 direct network partners under our ZTO brand. We rely on these network partners to directly interact with and serve end customers. However, the interests of a network partner may not be entirely aligned with ours or with those of our other network partners at all times.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States or Hong Kong. 62 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States or Hong Kong. 63 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
RISKS RELATED TO OUR CORPORATE STRUCTURE If the PRC government finds that the agreements that establish the structure for operating certain of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Risk Related to Our Corporate Structure If the PRC government finds that the agreements that establish the structure for operating certain of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Conversely, a significant depreciation of the Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the valuation of our Class A ordinary shares and/or ADSs. 49 Table of Contents Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations.
Conversely, a significant depreciation of the Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our earnings, which in turn could adversely affect the valuation of our Class A ordinary shares and/or ADSs. 51 Table of Contents Very limited hedging options are available in China to reduce our exposure to exchange rate fluctuations.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs. ​ 50 Table of Contents Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs. ​ 52 Table of Contents Certain PRC regulations may make it more difficult for us to pursue growth through acquisitions.
Risk Factors⸺Risks Related to Doing Business in China⸺The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections” on page 57 of this annual report. 19 Table of Contents ● Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
Risk Factors⸺Risks Related to Doing Business in China⸺The PCAOB had historically been unable to inspect our auditor in relation to their audit work performed for our financial statements and the inability of the PCAOB to conduct inspections of our auditor in the past has deprived our investors with the benefits of such inspections” on pages 57 -58 of this annual report. 19 Table of Contents ● Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
These factors include: ● the growth of broadband and mobile internet penetration and usage in China; ● the consumption power and disposable income of e-commerce consumers in China, as well as changes in demographics and consumer tastes and preferences; ● the availability, reliability and security of e-commerce platforms; ● the selection, price and popularity of products offered on e-commerce platforms; ● the potential impact of health epidemics, such as the COVID-19 pandemic, on our business operations and the economy in China and elsewhere generally; ● the emergence of alternative channels or business models that better suit the needs of consumers in China; ● the development of fulfillment, payment and other ancillary services associated with e-commerce; ● the continued integration of online and offline retail channels by large e-commerce platforms and various retail merchants to reduce customer acquisition costs and enhance customers’ shopping experience, a phenomenon knows as “New Retail”; and ● changes in laws and regulations, as well as government policies, that govern the e-commerce industry in China. 20 Table of Contents The e-commerce industry is highly sensitive to changes in macroeconomic conditions, and e-commerce spending tends to decline during recessionary periods.
These factors include: ● the growth of broadband and mobile internet penetration and usage in China; ● the consumption power and disposable income of e-commerce consumers in China, as well as changes in demographics and consumer tastes and preferences; ● the availability, reliability and security of e-commerce platforms; ● the selection, price, quality and popularity of products offered on e-commerce platforms; ● the potential impact of health epidemics on our business operations and the economy in China and elsewhere generally; ● the emergence of alternative channels or business models that better suit the needs of consumers in China; ● the development of fulfillment, payment and other ancillary services associated with e-commerce; ● the continued integration of online and offline retail channels by large e-commerce platforms and various retail merchants to reduce customer acquisition costs and enhance customers’ shopping experience, a phenomenon knows as “New Retail”; and ● changes in laws and regulations, as well as government policies, that govern the e-commerce industry in China. 20 Table of Contents The e-commerce industry is highly sensitive to changes in macroeconomic conditions, and e-commerce spending tends to decline during recessionary periods.
Under PRC laws, an enterprise must obtain business licenses with corresponding business scope and/or approvals or filings from the governmental authorities related to operating and providing financial services, and our company is compliant with the laws and regulations in the PRC in all material aspects during the 2021, 2022 and 2023 with regard to the provision of such financial services.
Under PRC laws, an enterprise must obtain business licenses with corresponding business scope and/or approvals or filings from the governmental authorities related to operating and providing financial services, and our company is compliant with the laws and regulations in the PRC in all material aspects during the 2022, 2023 and 2024 with regard to the provision of such financial services.
These measures may cause decreased economic activity in China, which may adversely affect our business and operating results. 45 Table of Contents The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs and ordinary shares. We conduct our business primarily in China.
These measures may cause decreased economic activity in China, which may adversely affect our business and operating results. 47 Table of Contents The PRC government’s significant oversight and discretion over our business operation could result in a material adverse change in our operations and the value of our ADSs and ordinary shares. We conduct our business primarily in China.
No impairment charge for the goodwill was recognized for the years ended December 31, 2021, 2022 and 2023. Furthermore, we continually review our equity method investments in equity investees to determine whether a decline in fair value below the carrying value is “other-than-temporary” and impairment loss needs to be recognized.
No impairment charge for the goodwill was recognized for the years ended December 31, 2022, 2023 and 2024. Furthermore, we continually review our equity method investments in equity investees to determine whether a decline in fair value below the carrying value is “other-than-temporary” and impairment loss needs to be recognized.
Even if such allegations are ultimately proven to be groundless, allegations against us could negatively impact the market price of our securities and our business operations. 59 Table of Contents We have granted, and may continue to grant, share incentives, which may result in increased share-based compensation expenses.
Even if such allegations are ultimately proven to be groundless, allegations against us could negatively impact the market price of our securities and our business operations. 60 Table of Contents We have granted, and may continue to grant, share incentives, which may result in increased share-based compensation expenses.
If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings. 43 Table of Contents Our current corporate structure, business operations and future capital raising activities may be affected by the PRC Foreign Investment Law, the Overseas Listing Trial Measures and the recently amended PRC Company Law.
If we cannot resolve any conflict of interest or dispute between us and these shareholders, we would have to rely on legal proceedings, which could result in disruption of our business and subject us to substantial uncertainty as to the outcome of any such legal proceedings. 45 Table of Contents Our current corporate structure, business operations and future capital raising activities may be affected by the PRC Foreign Investment Law, the Overseas Listing Trial Measures and the most recently amended PRC Company Law.
We generate a significant portion of our parcel volume by serving end customers that conduct business on various e-commerce platforms in China, and our end customers rely on our services to fulfill orders placed by consumers on such platforms. In December 2023, more than 90% of our total parcel volume was attributable to e-commerce platforms.
We generate a significant portion of our parcel volume by serving end customers that conduct business on various e-commerce platforms in China, and our end customers rely on our services to fulfill orders placed by consumers on such platforms. In December 2024, more than 90% of our total parcel volume was attributable to e-commerce platforms.
You may not realize a return on your investment in our Class A ordinary shares or ADSs, and you may even lose your entire investment in our Class A ordinary shares or ADSs. ​ 61 Table of Contents Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and ADSs.
You may not realize a return on your investment in our Class A ordinary shares or ADSs, and you may even lose your entire investment in our Class A ordinary shares or ADSs. ​ 62 Table of Contents Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares and ADSs.
As of March 31, 2024, for a small portion of our leased sorting hubs and offices, we have not been provided by the lessors with the applicable certificates, approvals or any other documentation proving their right to lease those properties to us.
As of March 31, 2025, for a small portion of our leased sorting hubs and offices, we have not been provided by the lessors with the applicable certificates, approvals or any other documentation proving their right to lease those properties to us.
Our Selected Consolidated Financial Data The following summary consolidated statements of comprehensive income data for the years ended December 31, 2021, 2022 and 2023, summary consolidated balance sheet data as of December 31, 2022 and 2023 and summary consolidated cash flow data for the years ended December 31, 2021, 2022 and 2023 have been derived from our audited consolidated financial statements included elsewhere in this annual report.
Our Selected Consolidated Financial Data The following summary consolidated statements of comprehensive income data for the years ended December 31, 2022, 2023 and 2024, summary consolidated balance sheet data as of December 31, 2023 and 2024 and summary consolidated cash flow data for the years ended December 31, 2022, 2023 and 2024 have been derived from our audited consolidated financial statements included elsewhere in this annual report.
The summary consolidated statements of comprehensive income data for the years ended December 31, 2019 and 2020, the summary consolidated balance sheet data as of December 31, 2019, 2020 and 2021 and the summary consolidated cash flow data for the years ended December 31, 2019 and 2020 have been derived from our audited consolidated financial statements that are not included in this annual report.
The summary consolidated statements of comprehensive income data for the years ended December 31, 2020 and 2021, the summary consolidated balance sheet data as of December 31, 2020, 2021 and 2022 and the summary consolidated cash flow data for the years ended December 31, 2020 and 2021 have been derived from our audited consolidated financial statements that are not included in this annual report.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. 52 Table of Contents Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans of overseas publicly listed companies may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects. Any failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans of overseas publicly listed companies may subject the PRC plan participants or us to fines and other legal or administrative sanctions.
For the purpose of this presentation, the intercompany transactions among entities within our subsidiaries or among entities within the VIE and VIE’s subsidiaries were eliminated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2023 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
For the purpose of this presentation, the intercompany transactions among entities within our subsidiaries or among entities within the VIE and VIE’s subsidiaries were eliminated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2024 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
We may also incur significant liabilities and penalties arising from such unethical conduct and may be required to allocate significant resources and incur material expenses to prevent such unethical or anticompetitive conduct in the future. 37 Table of Contents We are regularly subject to claims, lawsuits and other proceedings that may adversely affect our reputation, business and results of operations.
We may also incur significant liabilities and penalties arising from such unethical conduct and may be required to allocate significant resources and incur material expenses to prevent such unethical or anticompetitive conduct in the future. We are regularly subject to claims, lawsuits and other proceedings that may adversely affect our reputation, business and results of operations.
If we fail to meet the new requirements under the recently amended PRC Company Law, our corporate structure and business operations will be materially and adversely affected. 44 Table of Contents Contractual arrangements in relation to the VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC variable interest entity owe additional taxes, which could negatively affect our financial condition and the value of your investment.
If we fail to meet the requirements under the amended PRC Company Law, our corporate structure and business operations will be materially and adversely affected. 46 Table of Contents Contractual arrangements in relation to the VIE may be subject to scrutiny by the PRC tax authorities and they may determine that we or our PRC variable interest entity owe additional taxes, which could negatively affect our financial condition and the value of your investment.
If it were determined, however, that we are not the owner of our consolidated VIE and its subsidiaries for U.S. federal income tax purposes, we may be treated as a PFIC for the current taxable year and in future taxable years. ​ 64 Table of Contents Assuming that we are the owner of the VIE for U.S. federal income tax purposes, and based upon our income and assets, and the market price of our ADSs, we do not believe we were a PFIC for the taxable year ended December 31, 2023 and we do not anticipate being or becoming a PFIC in the current taxable year or in the foreseeable future.
If it were determined, however, that we are not the owner of our consolidated VIE and its subsidiaries for U.S. federal income tax purposes, we may be treated as a PFIC for the current taxable year and in future taxable years. ​ 65 Table of Contents Assuming that we are the owner of the VIE for U.S. federal income tax purposes, and based upon our income and assets, and the market price of our ADSs, we do not believe we were a PFIC for the taxable year ended December 31, 2024 and we do not anticipate being or becoming a PFIC in the current taxable year or in the foreseeable future.
Consolidated Statements and Other Financial Information—Legal Proceedings.” All of these cases were voluntarily dismissed without prejudice in 2021 other than one case in which the court rendered a judgment in 2021 in favor of us and the other defendants. We may be involved in more class action lawsuits in the future.
See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.” All of these cases were voluntarily dismissed without prejudice in 2021 other than one case in which the court rendered a judgment in 2021 in favor of us and the other defendants. We may be involved in more class action lawsuits in the future.
Because of these contractual arrangements, we have the ability to direct the activities of and are the primary beneficiary of ZTO Express and hence consolidate its financial results as the VIE under U.S. GAAP. ​ 41 Table of Contents ZTO is a Cayman Islands holding company with no equity ownership in ZTO Express.
Because of these contractual arrangements, we have the ability to direct the activities of and are the primary beneficiary of ZTO Express and hence consolidate its financial results as the VIE under U.S. GAAP. ZTO is a Cayman Islands holding company with no equity ownership in ZTO Express.
Risk Factors⸺Risks Related to Our Corporate Structure⸺If the PRC government finds that the agreements that establish the structure for operating certain of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” on pages 41 - 42 of this annual report.
Risk Factors⸺Risks Related to Our Corporate Structure⸺If the PRC government finds that the agreements that establish the structure for operating certain of our operations in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations” on pages 43 - 44 of this annual report.
We may also fail to alter or adjust our business practices in time to avoid or reduce adverse effects from any of the foregoing risks. We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
We may also fail to alter or adjust our business practices in time to avoid or reduce adverse effects from any of the foregoing risks. 38 Table of Contents We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
Any of the foregoing risks could result in significant disruption to our operations and result in additional costs, which could adversely affect our business, financial condition and results of operations. Our use of certain leased properties could be challenged by third parties or governmental authorities, which may cause interruptions to our business operations.
Any of the foregoing risks could result in significant disruption to our operations and result in additional costs, which could adversely affect our business, financial condition and results of operations. 40 Table of Contents Our use of certain leased properties could be challenged by third parties or governmental authorities, which may cause interruptions to our business operations.
Even if we or our network partners are able to extend or renew the respective leases, rental payments may significantly increase as a result of the high demand for the leased properties. 39 Table of Contents We may be penalized if we fail to comply with regulations on commercial franchising.
Even if we or our network partners are able to extend or renew the respective leases, rental payments may significantly increase as a result of the high demand for the leased properties. We may be penalized if we fail to comply with regulations on commercial franchising.
As a result, we may incur legal liability, and our market reputation and brand image as well as our business, financial condition and results of operations could be materially and adversely affected. We face risks associated with parcels handled and transported through our network and risks associated with transportation.
As a result, we may incur legal liability, and our market reputation and brand image as well as our business, financial condition and results of operations could be materially and adversely affected. 24 Table of Contents We face risks associated with parcels handled and transported through our network and risks associated with transportation.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment” on page 57 of this annual report.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment” on page 58 of this annual report.
The auditor is located in mainland China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. As a result, we and investors in the ADSs were deprived of the benefits of such PCAOB inspections.
The auditor is located in mainland China, a jurisdiction where the PCAOB was historically unable to conduct inspections and investigations completely before 2022. 57 Table of Contents As a result, we and investors in the ADSs were deprived of the benefits of such PCAOB inspections.
Business Overview—Regulation—Regulations Relating to Employee Stock Incentive Plan of Overseas Publicly-Listed Company.” It may be difficult for overseas securities regulators to conduct investigations or collect evidence within China.
Business Overview—Regulation—Regulations Relating to Employee Stock Incentive Plan of Overseas Publicly-Listed Company.” ​ 54 Table of Contents It may be difficult for overseas securities regulators to conduct investigations or collect evidence within China.
If we are required by governmental authorities to implement changes to our facilities or relocate any of our facilities or our network partners’ service outlets, our and our network partners’ operating costs may increase as a result.
If we are required by governmental authorities to implement changes to our facilities or relocate any of our facilities or our network partners’ service outlets, the operating costs of us and our network partners may increase as a result.
Fuel costs and transportation expenses incurred in connection with the use of third-party transportation services represent 13%, 17% and 19% of our line-haul transportation costs in 2021, 2022 and 2023, respectively. The availability and price of fuel and third-party transportation capacity are subject to political, economic, and market factors that are outside of our control.
Fuel costs and transportation expenses incurred in connection with the use of third-party transportation services represent 17%, 19% and 21% of our line-haul transportation costs in 2022, 2023 and 2024, respectively. The availability and price of fuel and third-party transportation capacity are subject to political, economic, and market factors that are outside of our control.
Subsidiaries subsidiaries Elimination Total ​ ​ RMB ​ ​ (in thousands) Revenue ​ — 17,157,364 31,981,790 (13,762,158) 35,376,996 Cost of revenues ​ — (12,735,655) (28,097,911) 14,495,845 (26,337,721) Gross profit ​ — ​ 4,421,709 ​ 3,883,879 ​ 733,687 ​ 9,039,275 Operating (expenses)/income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (197,209) ​ (1,285,856) ​ (685,546) ​ 91,239 ​ (2,077,372) Other operating income, net ​ 59,881 ​ 1,411,343 ​ 128,280 ​ (824,926) ​ 774,578 Other income/(expenses) ​ (25,490) ​ 685,980 ​ (110,519) ​ — ​ 549,971 Income before income tax and share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ (162,818) ​ 5,233,176 ​ 3,216,094 ​ — ​ 8,286,452 Income tax expense ​ (19,987) ​ (855,788) ​ (757,555) ​ — ​ (1,633,330) Share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ 6,991,861 ​ 10,742 ​ (4,898) ​ (6,991,861) ​ 5,844 Net income ​ 6,809,056 ​ 4,388,130 ​ 2,453,641 ​ (6,991,861) ​ 6,658,966 ​ 16 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, 2021 ​ ​ ZTO Express ​ ​ ​ VIE and VIE’s ​ ​ ​ Consolidated ​ (Cayman) Inc.
Subsidiaries subsidiaries Elimination Total ​ ​ RMB ​ ​ (in thousands) Revenue ​ — 17,157,364 31,981,790 (13,762,158) 35,376,996 Cost of revenues ​ — ​ (12,735,655) ​ (28,097,911) ​ 14,495,845 ​ (26,337,721) Gross profit ​ — ​ 4,421,709 ​ 3,883,879 ​ 733,687 ​ 9,039,275 Operating (expenses)/income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (197,209) ​ (1,285,856) ​ (685,546) ​ 91,239 ​ (2,077,372) Other operating income, net ​ 59,881 ​ 1,411,343 ​ 128,280 ​ (824,926) ​ 774,578 Other income/(expenses) ​ (25,490) ​ 685,980 ​ (110,519) ​ — ​ 549,971 Income before income tax and share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ (162,818) ​ 5,233,176 ​ 3,216,094 ​ — ​ 8,286,452 Income tax expense ​ (19,987) ​ (855,788) ​ (757,555) ​ — ​ (1,633,330) Share of profit/(loss) in subsidiaries, consolidated VIE, and equity method investments ​ 6,991,861 ​ 10,742 ​ (4,898) ​ (6,991,861) ​ 5,844 Net income ​ 6,809,056 4,388,130 2,453,641 (6,991,861) 6,658,966 ​ The following table presents condensed consolidating cash flow data for ZTO Express (Cayman) Inc., the VIE and VIE’s subsidiaries, and other entities for the years ended presented.
The PRC Company Law, promulgated by the Standing Committee of the National People’s Congress on December 29, 1993, was most recently amended on December 29, 2023 and will become effective on July 1, 2024.
The PRC Company Law, promulgated by the Standing Committee of the National People’s Congress on December 29, 1993, was most recently amended on December 29, 2023 and became effective on July 1, 2024.
Such regulation requires, among other things, that the PRC Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security; (iii) such transaction will lead to a change in control of a domestic enterprise which holds famous trademarks or PRC time-honored brands; or (iv) certain thresholds under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council on August 3, 2008 with latest amendment released on September 18, 2018, were triggered.
Such regulation requires, among other things, that the PRC Ministry of Commerce be notified in advance of any change-of-control transaction in which a foreign investor acquires control of a PRC domestic enterprise or a foreign company with substantial PRC operations, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security; (iii) such transaction will lead to a change in control of a domestic enterprise which holds famous trademarks or PRC time-honored brands; or (iv) certain thresholds under the Provisions on Thresholds for the Declaration of Concentrations of Undertakings, issued by the State Council on August 3, 2008 with latest amendment released on January 22, 2024, were triggered.
As of March 31, 2024, we have not received any order from any governmental authorities to make such filing.
As of March 31, 2025, we have not received any order from any governmental authorities to make such filing.
We may not be able to repay our indebtedness, and our shares may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of ZTO Express which contribute to 81.4% of our revenues in 2023.
We may not be able to repay our indebtedness, and our shares may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of ZTO Express which contribute to 84.4% of our revenues in 2024.
Our business and growth are therefore highly dependent on the viability and prospects of the e-commerce industry in China. Any uncertainties relating to the growth, profitability and regulatory regime of the e-commerce industry in China could have a significant impact on us.
Our business and growth are therefore highly dependent on the current state and future prospects of the e-commerce industry in China. Any uncertainties relating to the growth, profitability and regulatory regime of the e-commerce industry in China could have a significant impact on us.
If any outsourced personnel fail to operate in accordance with instructions, policies and business guidelines set forth by outsourcing firms based on our requirements, our market reputation, brand image and results of operations could be materially and adversely affected. 24 Table of Contents Our agreements with the outsourcing firms may provide that we are not liable to the outsourced personnel.
If any such personnel fail to operate in accordance with instructions, policies and business guidelines set forth by outsourcing firms based on our requirements, our market reputation, brand image and results of operations could be materially and adversely affected. Our agreements with the outsourcing firms may provide that we are not liable to their personnel.
Meisong Lai as the settlor and Mr. Meisong Lai and his family members as beneficiaries, holds 206,100,000 Class B ordinary shares. Mr. Meisong Lai exercises the power to vote these shares which, due to the disparate voting powers associated with our dual-class share structure, constitutes 77.7% of the aggregate voting power of our company as of March 31, 2024.
Meisong Lai as the settlor and Mr. Meisong Lai and his family members as beneficiaries, holds 206,100,000 Class B ordinary shares. Mr. Meisong Lai exercises the power to vote these shares which, due to the disparate voting powers associated with our dual-class share structure, constitutes 78.0% of the aggregate voting power of our company as of March 31, 2025.
Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition. See “Item 3. Key Information⸺D.
Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.
The PRC Company Law provides new requirements for companies established within the territory of the PRC, such as the time limit for contribution of capital, changes to corporate governance matters, among others, which also applies to foreign investment enterprises in the PRC.
The most recently amended PRC Company Law provides certain requirements for companies established within the territory of the PRC, such as the time limit for contribution of capital, changes to corporate governance matters, among others, which also applies to foreign investment enterprises in the PRC.
In addition, the resolution or settlement of any legal proceeding that involve our industry, whether we are a party to such legal proceeding or not, could also harm our business, financial condition and results of operations. In addition, we were named as a defendant in certain putative shareholder class action lawsuits in the United States. See “Item 8. Financial Information—A.
In addition, the resolution or settlement of any legal proceeding that involve our industry, whether we are a party to such legal proceeding or not, could also harm our business, financial condition and results of operations. 39 Table of Contents In addition, we were named as a defendant in certain putative shareholder class action lawsuits in the United States.
The acquired business of China Oriental Express Co., Ltd. provides freight forwarding services, and our revenue generated from such services amounted to RMB1,529.6 million, RMB1,212.7 million and RMB906.8 million (US$127.7 million) in 2021, 2022 and 2023, respectively, accounting for 5.0%, 3.4% and 2.4% of our total revenues during the same periods, respectively.
The acquired business of China Oriental Express Co., Ltd. provides freight forwarding services, and our revenue generated from such services amounted to RMB1,212.7 million, RMB906.8 million and RMB885.4 million (US$121.3 million) in 2022, 2023 and 2024, respectively, accounting for 3.4%, 2.4% and 2.0% of our total revenues during the same periods, respectively.
In addition, in 2023, six of the consolidated affiliated entities located in the municipalities or provinces of Sichuan, Guizhou, Yunnan and Shaanxi benefitted from a 15% preferential income tax rate as qualified enterprises within the Catalogue of Encouraged Industries in Western Regions. The preferential income tax rate will expire as of December 31, 2030.
In addition, in 2024, eight of the consolidated affiliated entities located in the municipalities or provinces of Sichuan, Chongqing, Guizhou and Guangxi benefitted from a 15% preferential income tax rate as qualified enterprises within the Catalogue of Encouraged Industries in Western Regions. The preferential income tax rate will expire as of December 31, 2030.
We paid an aggregate of approximately RMB9.3 billion, RMB7.4 billion RMB6.7 billion (US$0.9 billion) in 2021, 2022 and 2023, respectively, for purchases of property and equipment and purchases of land use rights.
We paid an aggregate of approximately RMB7.4 billion, RMB6.7 billion and RMB5.9 billion (US$0.8 billion) in 2022, 2023 and 2024, respectively, for purchases of property and equipment and purchases of land use rights.
As of March 31, 2024, we have not obtained land use rights certificates with respect to an aggregate gross land area of approximately 139,000 square meters of sorting hubs and property ownership certificates with respect to an aggregate gross floor area of approximately 1,113,000 square meters of buildings.
As of March 31, 2025, we have not obtained land use rights certificates with respect to an aggregate gross land area of approximately 165,000 square meters of sorting hubs and property ownership certificates with respect to an aggregate gross floor area of approximately 677,000 square meters of buildings.
The trading prices of our ADSs and Class A ordinary shares have been and are likely to continue to be volatile and could fluctuate widely in response to a variety of factors, many of which are beyond our control. For example, the low and high closing prices of our ADSs on NYSE in 2023 were US$19.83 and US$29.44, respectively.
The trading prices of our ADSs and Class A ordinary shares have been and are likely to continue to be volatile and could fluctuate widely in response to a variety of factors, many of which are beyond our control. For example, the low and high closing prices of our ADSs on NYSE in 2024 were US$16.08 and US$26.99, respectively.
We engage outsourcing firms to provide personnel for our operations. We have limited control over these personnel and may be liable for violations of applicable PRC labor laws and regulations accordingly. We engage outsourcing firms to provide a large number of personnel to work at our network facilities.
We engage outsourcing firms to provide personnel for our operations. We have limited control over these personnel and may be liable for violations of applicable PRC labor laws and regulations accordingly. In fulfilling our services, we engage outsourcing firms to provide certain services at our network facilities.
We have limited insurance coverage. For example, we are not legally required to maintain insurance for parcel shipments. We do not maintain business interruption insurance or general third-party liability insurance, nor do we maintain key-man life insurance.
We have limited insurance coverage which could expose us to significant costs and business disruption. We have limited insurance coverage. For example, we are not legally required to maintain insurance for parcel shipments. We do not maintain business interruption insurance or general third-party liability insurance, nor do we maintain key-man life insurance.
The content of the parcel may also constitute or reveal confidential information. The proper use and protection of confidential information is essential to maintaining customer trust in us and our services. 33 Table of Contents Our technology systems also process and store a significant amount of confidential information and data for the proper functioning of our network.
The proper use and protection of confidential information is essential to maintaining customer trust in us and our services. Our technology systems also process and store a significant amount of confidential information and data for the proper functioning of our network.
The Federal Reserve and other central banks outside of China have raised interest rates. The Russia-Ukraine conflict, the Hamas-Israel conflict and the attacks on shipping in the Red Sea have heightened geopolitical tensions across the world. The impact of the Russia-Ukraine conflict on Ukraine food exports has contributed to increases in food prices and thus to inflation more generally.
The Russia-Ukraine conflict, the Hamas-Israel conflict and the attacks on shipping in the Red Sea have heightened geopolitical tensions across the world. The impact of the Russia-Ukraine conflict on Ukraine food exports has contributed to increases in food prices and thus to inflation more generally.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeThe Overseas Listing Trial Measures provides that no overseas offering and listing shall be made under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and state rules; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller. 88 Table of Contents The Overseas Listing Trial Measures also provides that If the issuer both meets the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (i) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main place(s) of business are located in mainland China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in mainland China.
Biggest changeThe Overseas Listing Trial Measures provides that no overseas offering and listing shall be made under any of the following circumstances: (i) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and state rules; (ii) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (iii) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (iv) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (v) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
Risk Factors—Risks Related to Our Business and Industry—Our business and the business of our network partners are subject to a broad range of PRC laws and regulations.
Risk Factors—Risks Related to Our Business and Industry—Our business and the business of our network partners are subject to a broad range of PRC laws and regulations.
On November 14, 2021, the Cyberspace Administration of China released the Regulations on the Network Data Security Management for public comments, which stipulates, among others, that a prior cybersecurity review is required for listing abroad of data processors which process over one million users’ personal information, and the listing of data processors in Hong Kong which affects or may affect national security.
On November 14, 2021, the Cyberspace Administration of China released the Regulations on Network Data Security Management for public comments, which stipulates, among others, that a prior cybersecurity review is required for listing abroad of data processors which process over one million users’ personal information, and the listing of data processors in Hong Kong which affects or may affect national security.
Any documents executed by Shanghai Zhongtongji Network or Meisong Lai in connection with ZTO Express will be deemed to be executed by the shareholders of ZTO Express. Each of the shareholders of ZTO Express agreed to acknowledge, accept and approve such conduct of or execution by Shanghai Zhongtongji Network and Meisong Lai.
Any documents executed by Shanghai Zhongtongji Network or Meisong Lai in connection with ZTO Express will be deemed to be executed by the shareholders of ZTO Express. Each of the shareholders of ZTO Express agreed to acknowledge, accept and approve such conduct of or execution by Shanghai Zhongtongji Network and Meisong Lai.
We believe that we will be able to obtain adequate facilities through acquisition or lease to accommodate our future expansion plans. ​ 103 Table of Contents ITEM 4A. UNRESOLVED STAFF COMMENTS None. ​
We believe that we will be able to obtain adequate facilities through acquisition or lease to accommodate our future expansion plans. ​ ITEM 4A. UNRESOLVED STAFF COMMENTS None. 103 Table of Contents
Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.” Regulations Relating To Anti-Unfair Competition Law and Anti-Monopoly Law In accordance with the PRC Anti-Unfair Competition Law which was promulgated by the Standing Committee of the National People’s Congress on September 2, 1993 and recently amended on April 23, 2019, when carrying out production or business activities, business operators shall abide by the principles of voluntariness, equality, fairness, honesty and credibility, and abide by laws and recognized business ethics.
Risk Factors—Risks Related to Doing Business in China—PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.” Regulations Relating To Anti-Unfair Competition Law and Anti-Monopoly Law In accordance with the PRC Anti-Unfair Competition Law which was promulgated by the Standing Committee of the National People’s Congress on September 2, 1993 and most recently amended on April 23, 2019, when carrying out production or business activities, business operators shall abide by the principles of voluntariness, equality, fairness, honesty and credibility, and abide by laws and recognized business ethics.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” Under STA Public Notice 7, issued by the State Taxation Administration on February 3, 2015, and was recently amended on December 29, 2017, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a PRC resident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” Under STA Public Notice 7, issued by the State Taxation Administration on February 3, 2015, and was most recently amended on December 29, 2017, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise income tax.
Regulations Relating To Foreign Debts The foreign debt in PRC is regulated by various laws and regulations, including the Interim Provisions on the Management of Foreign Debts promulgated by the National Development and Reform Commission, the PRC Ministry of Commerce and the State Administration of Foreign Exchange on January 8, 2003 and recently amended on July 26, 2022, the Statistical Monitoring of Foreign Debts Tentative Provisions promulgated by the State Administration of Foreign Exchange on August 27, 1987 and recently amended on November 29, 2020 and the Administrative Measures for Registration of Foreign Debts promulgated by the State Administration of Foreign Exchange on April 28, 2013 and recently amended on June 9, 2016, a shareholder loan in the form of foreign debt made to a PRC subsidiary shall be registered by the State Administration of Foreign Exchange or its local branches within 15 business days after entering into the foreign debt contract.
Regulations Relating To Foreign Debts The foreign debt in PRC is regulated by various laws and regulations, including the Interim Provisions on the Management of Foreign Debts promulgated by the National Development and Reform Commission, the PRC Ministry of Commerce and the State Administration of Foreign Exchange on January 8, 2003 and amended on July 26, 2022, the Statistical Monitoring of Foreign Debts Tentative Provisions promulgated by the State Administration of Foreign Exchange on August 27, 1987 and amended on November 29, 2020 and the Administrative Measures for Registration of Foreign Debts promulgated by the State Administration of Foreign Exchange on April 28, 2013 and most recently amended on June 9, 2016, a shareholder loan in the form of foreign debt made to a PRC subsidiary shall be registered by the State Administration of Foreign Exchange or its local branches within 15 business days after entering into the foreign debt contract.
PRC Value-Added Tax Pursuant to the PRC Interim Value-Added Tax Regulations promulgated by the State Council on December 13, 1993 and recently amended on November 19, 2017, and its implementation rules promulgated by the Ministry of Finance on December 18, 2008 and recently amended on October 28, 2011, subject to applicable exceptions, taxpayers selling goods, providing labor services of processing, repairs or maintenance, or selling services, intangible assets or real property in China, or importing goods to China shall pay VAT.
PRC Value-Added Tax Pursuant to the PRC Interim Value-Added Tax Regulations promulgated by the State Council on December 13, 1993 and most recently amended on November 19, 2017, and its implementation rules promulgated by the Ministry of Finance on December 18, 2008 and amended on October 28, 2011, subject to applicable exceptions, taxpayers selling goods, providing labor services of processing, repairs or maintenance, or selling services, intangible assets or real property in China, or importing goods to China shall pay VAT.
The Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective on August 1, 2008, and recently amended on June 24, 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be declared to the PRC Ministry of Commerce before they can be completed.
The Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress, which became effective on August 1, 2008, and amended on June 24, 2022, requires that transactions which are deemed concentrations and involve parties with specified turnover thresholds must be declared to the PRC Ministry of Commerce before they can be completed.
SAFE Circular 16 was recently amended on December 4, 2023, which reiterates some of the rules set forth in SAFE Circular 19 and removed certain restrictions previously provided under several SAFE circulars, including removal of restriction on conversion by a foreign-invested enterprise of foreign currency registered capital into RMB and use of such RMB capital.
SAFE Circular 16 was amended on December 4, 2023, which reiterates some of the rules set forth in SAFE Circular 19 and removed certain restrictions previously provided under several SAFE circulars, including removal of restriction on conversion by a foreign-invested enterprise of foreign currency registered capital into RMB and use of such RMB capital.
Under the Provisions on Administration of Road Freight Transportation and Stations (Sites), and Regulations on Road Transportation, an enterprise engaging in the business of operating road freight transportation must obtain a Road Transportation Operation Permit from the competent authority of transportation, and each vehicle used for road freight transportation must have a Road Transportation Certificate from the same authority, unless the vehicles used are ordinary freight vehicles with a total mass of 4.5.
Under the Provisions on Administration of Road Freight Transportation and Stations (Sites), and Regulations on Road Transportation, an enterprise engaging in the business of operating road freight transportation must obtain a Road Transportation Operation Permit from the competent authority of transportation, and each vehicle used for road freight transportation must have a Road Transportation Certificate from the same authority, unless the vehicles used are ordinary freight vehicles with a total mass of 4.5 tons.
The following chart sets out the services provided by us and our network partners. ​ ​ ​ ​ ​ Key Category ​ Service Offerings Domestic Express ​ Express Delivery ​ ● Intra-city Delivery ​ ​ ​ ​ ● Inter-city Delivery ​ ​ Enterprise Customer Services ​ ● Customized one-stop express delivery solution for key accounts ​ ​ Ancillary Services (1) ​ ● Cash-on-Delivery Service ​ ​ ​ ​ ● Alternative Address Pick-up & Delivery ​ ​ ​ ​ ● Proof-of-delivery Collection ​ ​ ​ ​ ● Parcel Interception Service ​ ​ ​ ​ ● Reverse Logistics ​ ​ ​ ​ ● Others ​ ​ Regional ​ ● Hong Kong/Taiwan Door-to-Door Express Service International Express ​ Cross-border ​ ● International express services to key overseas markets in cooperation with business partners (1) Alternative Address Pick-up & Delivery service enables the sender to change the pick-up and destination address.
The following chart sets out the services provided by us and our network partners. ​ ​ ​ ​ ​ Key Category ​ Service Offerings Domestic Express ​ Express Delivery ​ ● Intra-city Delivery ​ ​ ​ ​ ● Inter-city Delivery ​ ​ Enterprise Customer Services ​ ● Customized one-stop express delivery solution for key accounts ​ ​ ​ ​ ● Reverse Logistics ​ ​ Ancillary Services (1) ​ ● Cash-on-Delivery Service ​ ​ ​ ​ ● Alternative Address Pick-up & Delivery ​ ​ ​ ​ ● Proof-of-delivery Collection ​ ​ ​ ​ ● Others ​ ​ Regional ​ ● Hong Kong/Taiwan Door-to-Door Express Service International Express ​ Cross-border ​ ● International express services to key overseas markets in cooperation with business partners (1) Alternative Address Pick-up & Delivery service enables the sender to change the pick-up and destination address.
Risk Factors—Risks Related to Doing Business in China—The approval of or filing to the CSRC or other PRC government authorities may be required in connection with our offshore offerings and future capital raising activities under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval.” On January 23, 2019, the Office of the Central Cyberspace Affairs Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration for Market Regulation jointly issued the Notice on Special Governance of Illegal Collection and Use of Personal Information via Apps, which restates the requirement of legal collection and use of personal information, encourages app operators to conduct security certifications, and encourages search engines and app stores to clearly mark and recommend those certified apps.
Risk Factors—Risks Related to Doing Business in China—The approval of or filing to the CSRC or other PRC government authorities may be required in connection with our offshore offerings and future capital raising activities under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval.” 87 Table of Contents On January 23, 2019, the Office of the Central Cyberspace Affairs Commission, the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration for Market Regulation jointly issued the Notice on Special Governance of Illegal Collection and Use of Personal Information via Apps, which restates the requirement of legal collection and use of personal information, encourages app operators to conduct security certifications, and encourages search engines and app stores to clearly mark and recommend those certified apps.
Trademark The PRC Trademark Law, promulgated by the Standing Committee of the National People’s Congress and recently amended on April 23, 2019, and its implementation rules, promulgated by the State Council and recently amended on April 29, 2014 protect registered trademarks in China.
Trademark The PRC Trademark Law, promulgated by the Standing Committee of the National People’s Congress and most recently amended on April 23, 2019, and its implementation rules, promulgated by the State Council and most recently amended on April 29, 2014 protect registered trademarks in China.
We have authorized our direct network partners to conduct their express delivery business exclusively under our “Zhongtong” or “ZTO” brand and mandate the unified application of our logos on outlets, personnel uniforms, transportation vehicles and packaging materials. 72 Table of Contents Each of our direct network partners is authorized by us to operate within a designated area, the size of which ranges from a township to an entire province.
We have authorized our direct network partners to conduct their express delivery business exclusively under our “Zhongtong” or “ZTO” brand and mandate the unified application of our logos on outlets, personnel uniforms, transportation vehicles and packaging materials. 73 Table of Contents Each of our direct network partners is authorized by us to operate within a designated area, the size of which ranges from a township to an entire province.
This entity operated express delivery services in Shanghai, Anhui Province, Jiangsu Province and Zhejiang Province, and authorized and cooperated with third-party business partners to operate ZTO-branded express delivery services elsewhere in China. 66 Table of Contents In January 2013, the shareholders who owned Shanghai Zhongtongji Express Service Co., Ltd., together with 15 network partners located in the cities and provinces mentioned above, established ZTO Express as a holding company.
This entity operated express delivery services in Shanghai, Anhui Province, Jiangsu Province and Zhejiang Province, and authorized and cooperated with third-party business partners to operate ZTO-branded express delivery services elsewhere in China. 67 Table of Contents In January 2013, the shareholders who owned Shanghai Zhongtongji Express Service Co., Ltd., together with 15 network partners located in the cities and provinces mentioned above, established ZTO Express as a holding company.
On May 1, 2023, our voluntary conversion of our secondary listing status to primary listing on the Hong Kong Stock Exchange became effective, and ZTO became a dual-primary listed company on the Main Board of the Hong Kong Stock Exchange and the NYSE. 67 Table of Contents Our principal executive offices are located at Building One, No.1685 Huazhi Road, Qingpu District, Shanghai, 201708, People’s Republic of China.
On May 1, 2023, our voluntary conversion of our secondary listing status to primary listing on the Hong Kong Stock Exchange became effective, and ZTO became a dual-primary listed company on the Main Board of the Hong Kong Stock Exchange and the NYSE. 68 Table of Contents Our principal executive offices are located at Building One, No.1685 Huazhi Road, Qingpu District, Shanghai, 201708, People’s Republic of China.
Risk Factors—Risks Related to Our Business and Industry—Any lack of requisite approvals, licenses or permits applicable to our business operations or those of our network partners may have a material and adverse impact on our business, financial condition and results of operations.” Pursuant to the PRC E-commerce Law, we are subject to certain requirements in e-commerce business, including but not limit to the following: while handing over commodities, express logistics service providers shall remind consignees to examine the commodities immediately on the spot; where the commodities are received by others for consignees, such providers shall obtain the consent of consignees.
Risk Factors—Risks Related to Our Business and Industry—Any lack of requisite approvals, licenses or permits applicable to our business operations or those of our network partners may have a material and adverse impact on our business, financial condition and results of operations.” 82 Table of Contents Pursuant to the PRC E-commerce Law, we are subject to certain requirements in e-commerce business, including but not limit to the following: while handing over commodities, express logistics service providers shall remind consignees to examine the commodities immediately on the spot; where the commodities are received by others for consignees, such providers shall obtain the consent of consignees.
If we or our network partners are deemed to be not in compliance with any of these laws and regulations, our business, reputation, financial condition and results of operations may be materially and adversely impacted.” 82 Table of Contents Regulations Relating To Road Transportation Operation Permit Pursuant to the Regulations on Road Transportation promulgated by the State Council on April 30, 2004 and most recently amended on July 20, 2023, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transport on June 16, 2005 and most recently amended on November 10, 2023, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services.
If we or our network partners are deemed to be not in compliance with any of these laws and regulations, our business, reputation, financial condition and results of operations may be materially and adversely impacted.” Regulations Relating To Road Transportation Operation Permit Pursuant to the Regulations on Road Transportation promulgated by the State Council on April 30, 2004 and most recently amended on July 20, 2023, and the Provisions on Administration of Road Freight Transportation and Stations (Sites) issued by the Ministry of Transport on June 16, 2005 and most recently amended on November 10, 2023, the business operations of road freight transportation refer to commercial road freight transportation activities that provide public services.
Our network partners directly interact with our end customers, and we provide ongoing training and conduct regular performance reviews to ensure they provide quality customer services. 74 Table of Contents We also operate a call center network providing real-time assistance during business hours, seven days a week.
Our network partners directly interact with our end customers, and we provide ongoing training and conduct regular performance reviews to ensure they provide quality customer services. 75 Table of Contents We also operate a call center network providing real-time assistance during business hours, seven days a week.
From time to time, we also provide temporary warehousing services to certain key account customers to store their products close to their target demographics. 70 Table of Contents We have continually adopted new technology solutions in automation hardware and software to enhance the efficiency of our operations.
From time to time, we also provide temporary warehousing services to certain key account customers to store their products close to their target demographics. 71 Table of Contents We have continually adopted new technology solutions in automation hardware and software to enhance the efficiency of our operations.
Our automated system continues to respond to inquiries outside of business hours and forwards complicated inquiries to our live call center representatives for further handling during business hours. Our call center network is localized with branch offices in over 32 provinces in China with mostly local hires to leverage their local knowledge.
Our automated system continues to respond to inquiries outside of business hours and forwards complicated inquiries to our live call center representatives for further handling during business hours. Our call center network is localized with branch offices in over 31 provinces in China with mostly local hires to leverage their local knowledge.
By utilizing the dashboard, our management can monitor and evaluate our business in real-time. 75 Table of Contents We have leased a high-grade data center in Zhejiang province to support our core operational systems, such as Zhongtian, and our transportation management system.
By utilizing the dashboard, our management can monitor and evaluate our business in real-time. 76 Table of Contents We have leased a high-grade data center in Zhejiang province to support our core operational systems, such as Zhongtian, and our transportation management system.
We have over 700 call center representatives who adhere to the same customer service standards nationwide and their local knowledge adds to our customer service effectiveness. We provide regular trainings to our representatives and periodically review callers’ level of satisfaction with the service they received from us.
We have over 500 call center representatives who adhere to the same customer service standards nationwide and their local knowledge adds to our customer service effectiveness. We provide regular trainings to our representatives and periodically review callers’ level of satisfaction with the service they received from us.
We also leverage the scale of our network and assist our network partners to negotiate better procurement terms with their suppliers. 76 Table of Contents Security and Safety We have established parcel security screening protocols to inspect parcels before we accept them for sorting and delivery.
We also leverage the scale of our network and assist our network partners to negotiate better procurement terms with their suppliers. 77 Table of Contents Security and Safety We have established parcel security screening protocols to inspect parcels before we accept them for sorting and delivery.
If we or our network partners are deemed to be not in compliance with any of these laws and regulations, our business, reputation, financial condition and results of operations may be materially and adversely impacted.” 83 Table of Contents Regulations Relating To International Freight Forwarding Business Administrative Provisions on International Freight Forwarders promulgated on June 29, 1995 and its detailed rules regulate the business of international freight forwarding.
If we or our network partners are deemed to be not in compliance with any of these laws and regulations, our business, reputation, financial condition and results of operations may be materially and adversely impacted.” Regulations Relating To International Freight Forwarding Business Administrative Provisions on International Freight Forwarders promulgated on June 29, 1995 and its detailed rules regulate the business of international freight forwarding.
Barcodes on each waybill attached to the parcels are scanned as they go through each sorting and transportation gateway, allowing us to keep track of the delivery service status of each parcel. 69 Table of Contents Step 3: Parcel Delivery.
Barcodes on each waybill attached to the parcels are scanned as they go through each sorting and transportation gateway, allowing us to keep track of the delivery service status of each parcel. 70 Table of Contents Step 3: Parcel Delivery.
For serious circumstances, a fine ranging from RMB10,000 to RMB30,000 may be imposed, and the related documents shall be forwarded to the local authorities if there is suspicion of unfair competition or illegal pricing. 81 Table of Contents Companies engaging in express delivery service must establish and implement a system for the examination of parcels or articles received for delivery.
For serious circumstances, a fine ranging from RMB10,000 to RMB30,000 may be imposed, and the related documents shall be forwarded to the local authorities if there is suspicion of unfair competition or illegal pricing. Companies engaging in express delivery service must establish and implement a system for the examination of parcels or articles received for delivery.
As of December 31, 2023, we have not made any filings with local counterparts of the PRC Ministry of Commerce or received any governmental order to make such filings. See “Item 3. Key Information—D.
As of December 31, 2024, we have not made any filings with local counterparts of the PRC Ministry of Commerce or received any governmental order to make such filings. See “Item 3. Key Information—D.
Risk Factors—Risks Related to Our Business and Industry—We may be penalized if we fail to comply with regulations on commercial franchising.” 84 Table of Contents Regulations Relating To Personal Information Security And Consumer Protection On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which took effect on November 1, 2021.
Risk Factors—Risks Related to Our Business and Industry—We may be penalized if we fail to comply with regulations on commercial franchising.” Regulations Relating To Personal Information Security And Consumer Protection On August 20, 2021, the Standing Committee of the National People’s Congress promulgated the Personal Information Protection Law, which took effect on November 1, 2021.
If our employees fail to pay or we fail to withhold their income taxes according to the laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities. 96 Table of Contents Regulations Relating To Tax Dividend Withholding Tax Pursuant to the PRC Enterprise Income Tax Law which was recently amended on December 29, 2018, and its implementation rules, which became effective on January 1, 2008 and was amended on April 23, 2019, if a non-resident enterprise has not set up an organization or establishment in China, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
If our employees fail to pay or we fail to withhold their income taxes according to the laws and regulations, we may face sanctions imposed by the tax authorities or other PRC governmental authorities. 96 Table of Contents Regulations Relating To Tax Dividend Withholding Tax Pursuant to the PRC Enterprise Income Tax Law which was most recently amended on December 29, 2018, and its implementation rules, which became effective on January 1, 2008 and was most recently amended on December 6, 2024, if a non-resident enterprise has not set up an organization or establishment in China, or has set up an organization or establishment but the income derived has no actual connection with such organization or establishment, it will be subject to a withholding tax on its PRC-sourced income at a rate of 10%.
In the event more than 10% of the total vehicles of any road transportation enterprise are not in compliance with this regulation in any year, such road transportation enterprise shall suspend its business for rectification and its road transportation license may be revoked. The operation of our truck fleet is subject to this regulation.
In the event more than 10% of the total vehicles of any road transportation enterprise are not in compliance with this regulation in any year, such road transportation enterprise shall suspend its business for rectification and its road transportation license may be revoked. 83 Table of Contents The operation of our truck fleet is subject to this regulation.
ZTO Express and 59 of its subsidiaries have obtained the Courier Service Operation Permits to operate express delivery services. See “Item 3. Key Information—D.
ZTO Express and 57 of its subsidiaries have obtained the Courier Service Operation Permits to operate express delivery services. See “Item 3. Key Information—D.
As of December 31, 2023, our network had over 31,000 pickup and delivery outlets nationwide, covering over 99% of China’s cities and counties. 71 Table of Contents We have encouraged our network partners to invest early and secure physical presence with last-mile capabilities and consumer access by establishing last-mile posts. We currently have over 110,000 last mile posts across China.
As of December 31, 2024, our network had over 31,000 pickup and delivery outlets nationwide, covering over 99% of China’s cities and counties. 72 Table of Contents We have encouraged our network partners to invest early and secure physical presence with last-mile capabilities and consumer access by establishing last-mile posts. We currently have over 110,000 last mile posts across China.
Foreign investors are not allowed to invest in industries in the prohibited category. We are mainly engaged in express delivery services, which may involve domestic express delivery services of mail. According to the Negative List for Foreign Investment Access, foreign investments in domestic express delivery services of mail are prohibited.
Foreign investors are not allowed to invest in industries in the prohibited category. 79 Table of Contents We are mainly engaged in express delivery services, which may involve domestic express delivery services of mail. According to the Negative List for Foreign Investment Access, foreign investments in domestic express delivery services of mail are prohibited.
Our designated team maintains enterprise customer relationships directly through regular dialogue. In general, we and our network partners strive to continually improve our service qualities to elevate our brand and attract and retain more customers. 77 Table of Contents Corporate Social Responsibility We are committed to leveraging our technology and logistics infrastructure to benefit society.
Our designated team maintains enterprise customer relationships directly through regular dialogue. In general, we and our network partners strive to continually improve our service qualities to elevate our brand and attract and retain more customers. Corporate Social Responsibility We are committed to leveraging our technology and logistics infrastructure to benefit society.
The diagram below illustrates our network partner model. ​ ​ As of December 31, 2023, we had approximately 6,000 network partners with whom we have directly entered into agreements prescribing the terms and conditions of their operations of pickup and delivery outlets under our brand. We refer to such network partners as our direct network partners.
The diagram below illustrates our network partner model. ​ ​ As of December 31, 2024, we had over 6,000 network partners with whom we have directly entered into agreements prescribing the terms and conditions of their operations of pickup and delivery outlets under our brand. We refer to such network partners as our direct network partners.
In order to further improve our operating efficiencies as volume increases, we have systematically increased the proportion of high capacity 15- to 17-meter-long trailer models within our fleet from 39% in 2016 to 92% in 2023 to optimize unit output and reduce cost.
In order to further improve our operating efficiencies as volume increases, we have systematically increased the proportion of high capacity 15 to 17-meter-long trailer models within our fleet from 39% in 2016 to 94% in 2024 to optimize unit output and reduce cost.
As of December 31, 2023, we owned over 200 computer software copyrights in China for various aspects of our operations, maintained over 600 trademark registrations and 200 patents inside China. As of December 31, 2023, we had registered nine domain names, including zto.cn, among others.
As of December 31, 2024, we owned over 200 computer software copyrights in China for various aspects of our operations, maintained over 700 trademark registrations and 200 patents inside China. As of December 31, 2024, we had registered nine domain names, including zto.cn, among others.
Companies established and operating in the PRC shall be subject to the PRC Company Law, which was promulgated by the Standing Committee of the National People’s Congress on December 29, 1993, recently amended on December 29, 2023 and will become effective on July 1, 2024.
Companies established and operating in the PRC shall be subject to the PRC Company Law, which was promulgated by the Standing Committee of the National People’s Congress on December 29, 1993, most recently amended on December 29, 2023 and became effective on July 1, 2024.
Risk Factors—Risks Related to Our Corporate Structure—Our current corporate structure, business operations and future capital raising activities may be affected by the PRC Foreign Investment Law, the Overseas Listing Trial Measures and the recently amended PRC Company Law.” 79 Table of Contents The PRC Foreign Investment Law also provides that the State establishes a foreign investment information report system.
Risk Factors—Risks Related to Our Corporate Structure—Our current corporate structure, business operations and future capital raising activities may be affected by the PRC Foreign Investment Law, the Overseas Listing Trial Measures and the most recently amended PRC Company Law.” The PRC Foreign Investment Law also provides that the State establishes a foreign investment information report system.
Each sorting hub collects parcels from outlets within its coverage area, sorts parcels according to their destination and dispatches them to the appropriate destination sorting hub. As of December 31, 2023, we operated 91 sorting hubs and our business partners operated 8 sorting hubs.
Each sorting hub collects parcels from outlets within its coverage area, sorts parcels according to their destination and dispatches them to the appropriate destination sorting hub. As of December 31, 2024, we operated 91 sorting hubs and our business partners operated 4 sorting hubs.
As of December 31, 2023, our network infrastructure consists of 99 sorting hubs with 464 automation lines, over 3,900 line-haul routes serviced by over 10,000 line-haul vehicles that we own and operate, and approximate 6,000 direct network partners operating over 31,000 pickup/delivery outlets and over 110,000 last-mile posts. Our network covers over 99% of cities and counties in China.
As of December 31, 2024, our network infrastructure consists of 95 sorting hubs with 596 automation lines, over 3,900 line-haul routes serviced by over 10,000 line-haul vehicles that we own and operate, and over 6,000 direct network partners operating over 31,000 pickup/delivery outlets and over 110,000 last-mile posts. Our network covers over 99% of cities and counties in China.
The Implementing Regulations of the PRC Copyright Law, promulgated by the State Council and recently amended on January 30, 2013, stipulates the detailed rules on the protection of various types of copyrights in China. The Regulations on the Protection of Computer Software, promulgated by the State Council and most recently amended on January 30, 2013, provides rules on copyrighted software.
The Implementing Regulations of the PRC Copyright Law, promulgated by the State Council and most recently amended on January 30, 2013, stipulates the detailed rules on the protection of various types of copyrights in China.
We had not obtained the title certificates of land use rights from the authorities with respect to an aggregate gross land area of approximately 139,000 square meters of sorting hubs, and the title certificates with respect to 53 buildings.
We had not obtained the title certificates of land use rights from the authorities with respect to an aggregate gross land area of approximately 162,000 square meters of sorting hubs, and the title certificates with respect to 34 buildings.
Our line-haul transportation network is serviced primarily by (i) our own fleet, and (ii) certain independent third-party vehicles. We control the route planning and vehicle dispatch of our entire line-haul transportation network. As of December 31, 2023, our own fleet consisted of over 10,000 trucks, of which approximately 9,200 are high capacity 15 to 17-meter-long trailer models.
Our line-haul transportation network is serviced primarily by (i) our own fleet, and (ii) certain independent third-party vehicles. We control the route planning and vehicle dispatch of our entire line-haul transportation network. As of December 31, 2024, our own fleet consisted of over 10,000 trucks, of which more than 9,400 are high capacity 15 to 17-meter-long trailer models.
No material default occurred as of December 31, 2023. Our Customers The following chart illustrates parcel and fund flows to and from our direct and end customers. ​ ​ Our direct customers are our direct network partners, who, along with our indirect partners, own and operate pickup and delivery outlets.
No material default occurred as of December 31, 2024. 74 Table of Contents Our Customers The following chart illustrates parcel and fund flows to and from our direct and end customers. ​ ​ Our direct customers are our direct network partners, who, along with our indirect partners, own and operate pickup and delivery outlets.
We also set guidance and review the performance of certain pickup and delivery outlets with large parcel volume. For our direct network partners at the provincial level, we provide fee discounts to those who significantly outperform the performance targets that we set.
We consider the conditions and forecast of the local market to set guidance for those indicators. We also set guidance and review the performance of certain pickup and delivery outlets with large parcel volume. For our direct network partners at the provincial level, we provide fee discounts to those who significantly outperform the performance targets that we set.
Of the 91 sorting hubs we operate, 69 are located on premises we own, for 35 of which we also lease additional areas, and 22 are located on leased premises. We plan to make long-term investments in land and facilities on premises we own to support the stability of our operations.
Of the 91 sorting hubs we operate, 72 are located on premises we own, for 7 of which we also lease additional areas, and 19 are located on leased premises. We plan to make long-term investments in land and facilities on premises we own to support the stability of our operations.
In 2023, ZTO Express and five of its subsidiaries have obtained Road Transportation Operation Permits to operate general road freight transportation or station (sites). Shanghai Zhongtongji Logistics Co., Ltd. and 19 of its subsidiaries have obtained Road Transportation Operation Permits to operate general road freight transportation or station (sites). See “Item 3. Key Information—D.
In 2024, ZTO Express and four of its subsidiaries have obtained Road Transportation Operation Permits to operate general road freight transportation or station (sites). Shanghai Zhongtongji Logistics Co., Ltd. and 21 of its subsidiaries have obtained Road Transportation Operation Permits to operate general road freight transportation or station (sites). See “Item 3. Key Information—D.
Regulations Relating To Foreign Investment Industry Catalogue Relating to Foreign Investment The PRC Ministry of Commerce and the National Development and Reform Commission jointly promulgated the Negative List for Foreign Investment Access on December 27, 2021, which became effective on January 1, 2022, and the Catalogue of Industries for Encouraging Foreign Investment (2022 Edition) on October 26, 2022, which became effective on January 1, 2023.
Regulations Relating To Foreign Investment Industry Catalogue Relating to Foreign Investment The PRC Ministry of Commerce and the National Development and Reform Commission jointly promulgated the Negative List for Foreign Investment Access on September 6, 2024, which became effective on November 1, 2024, and the Catalogue of Industries for Encouraging Foreign Investment (2022 Edition) on October 26, 2022, which became effective on January 1, 2023.
According to the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings, issued by the State Council on August 3, 2008 with latest amendment released on September 18, 2018, where the concentration of business operators satisfies any of the following threshold, the business operators shall file a declaration to the anti-monopoly enforcement authority of the State Council in advance, otherwise, no concentration shall be carried out: (i) the total amount of the global turnover realized by all business operators participating in the concentration during the last fiscal year exceeds RMB10 billion with at least two business operators each achieving a turnover of more than RMB400 million within China during the last fiscal year; (ii) the total amount of the turnover within China achieved by all business operators participating in the concentration during the last fiscal year exceeds RMB2 billion with at least two business operators each achieving a turnover of more than RMB400 million within China during the last fiscal year.
According to the Provisions on Thresholds for the Declaration of Concentrations of Undertakings, issued by the State Council on August 3, 2008 with latest amendment released on January 22, 2024, where the concentration of business operators satisfies any of the following threshold, the business operators shall file a declaration to the anti-monopoly enforcement authority of the State Council in advance, otherwise, no concentration shall be carried out: (i) the total amount of the global turnover realized by all business operators participating in the concentration during the last fiscal year exceeds RMB12 billion with at least two business operators each achieving a turnover of more than RMB800 million within China during the last fiscal year; (ii) the total amount of the turnover within China achieved by all business operators participating in the concentration during the last fiscal year exceeds RMB4 billion with at least two business operators each achieving a turnover of more than RMB800 million within China during the last fiscal year.
Property, Plant and Equipment As of March 31, 2024, we had an aggregate gross floor area of approximately 11,221,000 square meters of sorting hubs that we operate, among which approximately 8,160,000 square meters were used for sorting purposes. The lease terms of the buildings we leased from third parties ranged from 1 to 16 years.
Property, Plant and Equipment As of March 31, 2025, we had an aggregate gross floor area of approximately 12,800,000 square meters of sorting hubs that we operate, among which approximately 9,100,000 square meters were used for sorting purposes. The lease terms of the buildings we leased from third parties ranged from 1 to 16 years.
For certain enterprise customers, we provide direct pickup services without going through the pickup outlets of our network partners. We collect the full amount of delivery service fees from our enterprise customers and pay a portion of these fees to the delivery outlets of our network partners for last-mile delivery services provided by them.
We collect the full amount of delivery service fees from our enterprise customers and pay a portion of these fees to the delivery outlets of our network partners for last-mile delivery services provided by them.
We provide our direct network partners with access to our line-haul transportation and sorting network, which form the infrastructure of their and our indirect partners’ express delivery services. In addition, we also directly serve some enterprise customers, including vertical e-commerce and traditional merchants, in connection with the delivery of their products to consumers.
We provide our direct network partners with access to our line-haul transportation and sorting network, which form the infrastructure of their and our indirect partners’ express delivery services. In addition, we also directly serve some enterprise customers, including e-commerce and traditional merchants, providing express delivery services and handling return parcels for e-commerce platforms.
The number and capacity of our automated sorting lines increased substantially from 8 in 2016 (all of which were for small parcels) to 464 in 2023 (203 of which were for large parcels and the remaining 261 for small parcels). Line-haul transportation network We connect our sorting hubs with approximately 3,900 line-haul routes.
The number and capacity of our automated sorting lines increased substantially from 8 in 2016 (all of which were for small parcels) to 596 in 2024 (259 of which were for large parcels and the remaining 337 for small parcels). Line-haul transportation network We connect our sorting hubs with over 3,900 line-haul routes.
We have obtained the requisite business licenses and/or approvals under PRC laws and regulations in order to provide such financial services to qualified network partners. 73 Table of Contents We had a financing receivables balance of RMB2,524.4 million, RMB2,247.1 million and RMB2,100.2 million (US$295.8 million) as of December 31, 2021, 2022 and 2023.
We have obtained the requisite business licenses and/or approvals under PRC laws and regulations in order to provide such financial services to qualified network partners. We had a financing receivables balance of RMB2,247.1 million, RMB2,100.2 million and RMB2,040.1 million (US$279.5 million) as of December 31, 2022, 2023 and 2024.
Under these regulations, the term of protection for copyrighted software is 50 years. Patent Patents in China are principally protected under the PRC Patent Law, promulgated by the Standing Committee of the National People’s Congress and recently amended on October 17, 2020, and its implementation rules, promulgated by the State Council and recently amended on December 11, 2023.
Patent Patents in China are principally protected under the PRC Patent Law, promulgated by the Standing Committee of the National People’s Congress and most recently amended on October 17, 2020, and its implementation rules, promulgated by the State Council and most recently amended on December 11, 2023.
Pursuant to the Regulations on the Security Protection of Critical Information Infrastructure, critical information infrastructure shall mean any important network facilities or information systems of the important industry or field such as public communication and information service, energy, transportation, water conservancy, finance, public services, e-government affairs and national defense science, technology and industry, as well as other important network facilities and information systems which, in case of destruction, loss of function or leak of data, may result in serious damage to national security, the national economy and the people’s livelihood and public interests. 86 Table of Contents On July 6, 2021, the PRC government authorities made public the Opinions on Strictly Cracking Down Illegal Securities Activities in Accordance with the Law.
Pursuant to the Regulations on the Security Protection of Critical Information Infrastructure, critical information infrastructure shall mean any important network facilities or information systems of the important industry or field such as public communication and information service, energy, transportation, water conservancy, finance, public services, e-government affairs and national defense science, technology and industry, as well as other important network facilities and information systems which, in case of destruction, loss of function or leak of data, may result in serious damage to national security, the national economy and the people’s livelihood and public interests.
The Ministry of Finance, the State Taxation Administration and the National Development and Reform Commission promulgated the Announcement on Continuation of the Enterprise Income Tax Policy for the Western Region Development, or Circular 23, from January 1, 2021 to December 31, 2030, the primary business of the enterprise is listed in the one of industry items provided in the Catalogue of Encouraged Industries in Western Regions and primary business revenue of which accounts for more than 60% of the total enterprise revenue, may pay enterprise income tax at the reduced tax rate of 15% subject to the examination and confirmation of the competent tax authority.
According to Circular 23, from January 1, 2021 to December 31, 2030, the primary business of the enterprise is listed in the one of industry items provided in the Catalogue of Encouraged Industries in Western Regions and primary business revenue of which accounts for more than 60% of the total enterprise revenue, may pay enterprise income tax at the reduced tax rate of 15% subject to the examination and confirmation of the competent tax authority.
Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or our shareholders’ rights to receive dividends and other distributions from us.
Our management evaluates the adequacy of our insurance coverage from time to time and purchase additional insurance policies as needed. Regulation This section sets forth a summary of the most significant rules and regulations that affect our business activities in China or our shareholders’ rights to receive dividends and other distributions from us.
Instead, some of our end customers may opt for damage or loss coverage in connection with our priority handling services, in which cases we will remit the insurance portion of their payments to third party insurance providers. We do not maintain business interruption insurance; nor do we maintain product liability insurance or key-man insurance.
We do not purchase insurance for items delivered by us. Instead, some of our end customers may opt for damage or loss coverage in connection with our priority handling services, in which cases we will remit the insurance portion of their payments to third party insurance providers.
Regulations Relating To Commercial Franchising Commercial franchising refers to the business activities where an enterprise that possesses the registered trademarks, enterprise logos, patents, proprietary technology or any other business resources allows such business resources to be used by another business operator through contract and the franchisee follows the uniform business model to conduct business operations and pay franchising fees to the franchisor according to the contract.
Two subsidiaries of ZTO Express have obtained the Remotely Piloted Aircraft System (RPAS) Air Operator Certificate. 84 Table of Contents Regulations Relating To Commercial Franchising Commercial franchising refers to the business activities where an enterprise that possesses the registered trademarks, enterprise logos, patents, proprietary technology or any other business resources allows such business resources to be used by another business operator through contract and the franchisee follows the uniform business model to conduct business operations and pay franchising fees to the franchisor according to the contract.
Meanwhile, we encourage our network partners to use eco-friendly transportation vehicles such as new-energy vehicles and battery-powered cars for pickup and delivery. Furthermore, we vigorously promote the use of energy-saving and environmentally friendly equipment in our operation, including sorting, transportation and delivery. Employee care. We strive to provide employees with welfare benefits and a broad range of career development opportunities.
Meanwhile, we encourage our network partners to use eco-friendly transportation vehicles such as new-energy vehicles and battery-powered cars for pickup and delivery. Furthermore, we vigorously promote the use of energy-saving and environmentally friendly equipment in our operation, including sorting, transportation and delivery. 78 Table of Contents Employee care.
These provisions set forth the requirements on the app information service and the app distribution service. The Cyberspace Administration of China and its local branches shall be responsible for the supervision and administration of nationwide and local app information content respectively.
The Cyberspace Administration of China and its local branches shall be responsible for the supervision and administration of nationwide and local app information content respectively.
We were named as one of the Top 50 Chinese Logistics Companies in 2022 and 2023, respectively, by China Association of Logistics and Networks. We were also named as one of China’s Top 500 Private Enterprises (ranked 341) and one of China’s Top 100 Private Enterprises in Service Industry in 2023 by National Federation of Industry and Commerce.
We also awarded as one of the Top 50 Chinese Logistics Companies in 2023 and 2024, respectively, by China Federation of Logistics & Purchasing. We were also named as one of China’s Top 500 Private Enterprises (ranked 323 ) in 2024 by All-China Federation of industry and Commerce.
Proof-of-delivery Collection service is a kind of service where we collect the receipt signed by the recipient upon successfully delivering a parcel and send it to the sender. Parcel Interception Service allows senders to intercept and redirect a parcel before it is scheduled for delivery or delivered to its destination.
Proof-of-delivery Collection service is a kind of service where we collect the receipt signed by the recipient upon successfully delivering a parcel and send it to the sender.
Insurance We maintain various insurance policies to safeguard against risks and unexpected events. We have purchased compulsory motor vehicle liability insurance and commercial insurance such as automobile third-party liability insurance, vehicle loss insurance and driver/passenger liability insurance.
Insurance We maintain various insurance policies to safeguard against risks and unexpected events. We have purchased compulsory motor vehicle liability insurance and commercial insurance such as automobile third-party liability insurance, vehicle loss insurance and driver/passenger liability insurance. We also provide social security insurance including pension insurance, unemployment insurance, work-related injury insurance and medical insurance to our employees.
We believe we are currently in compliance with the above provisions or measures with regard to the security of personal information in all material aspects. 85 Table of Contents Regulations Relating To Cybersecurity, Privacy, Data Protection And Information Security On December 28, 2012, to enhance the legal protection of information security and privacy on the internet, the Standing Committee of the National People’s Congress promulgated the Decision of the Standing Committee of the National People’s Congress on Strengthening Network Information Protection, which requires network service providers to take measures to ensure confidentiality of information of users.
Regulations Relating To Cybersecurity, Privacy, Data Protection And Information Security On December 28, 2012, to enhance the legal protection of information security and privacy on the internet, the Standing Committee of the National People’s Congress promulgated the Decision of the Standing Committee of the National People’s Congress on Strengthening Network Information Protection, which requires network service providers to take measures to ensure confidentiality of information of users.
If the non-compliance situations are severe, a fine ranging from RMB10,000 to RMB50,000 can be imposed, and the offender may face suspension of its business operation before completing the rectification. 80 Table of Contents Pursuant to (i) the Postal Law, (ii) the Administrative Measures for Courier Service Market, (iii) the Administrative Measures on Courier Service Operation Permits, which was most recently amended on November 28, 2019, and (iv) the Interim Regulations on Express Delivery, which was mostly recently amended on March 2, 2019, any entity engaging in express delivery services must obtain a Courier Service Operation Permit from the State Post Bureau or its local counterpart and is subject to their supervision and regulation.
Pursuant to (i) the Postal Law, (ii) the Administrative Measures for Courier Service Market, (iii) the Administrative Measures on Courier Service Operation Permits, which was most recently amended on November 28, 2019, and (iv) the Interim Regulations on Express Delivery, which was most recently amended on March 2, 2019, any entity engaging in express delivery services must obtain a Courier Service Operation Permit from the State Post Bureau or its local counterpart and is subject to their supervision and regulation.
If we fail to comply with such requirement, we may be subject to penalties including a fine ranging from RMB10,000 to RMB100,000, suspension of business for rectification or revoke of its Courier Service Operation Permit.
If we fail to comply with such requirement, we may be subject to penalties including a fine ranging from RMB10,000 to RMB100,000, suspension of business for rectification or revoke of its Courier Service Operation Permit. We believe we are currently in compliance with the above provisions or measures with regard to the security of personal information in all material aspects.
On March 12, 2021, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation jointly promulgated the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which became effective on May 1, 2021, to further provide guidance over personal information security and privacy protection. 87 Table of Contents In addition to the regulations above, Apps are specially regulated by the Administrative Provisions on Mobile Internet Applications Information Services (Revised in 2022), promulgated by the Cyberspace Administration of China, last amended on June 14, 2022 and became effective on August 1, 2022.
On March 12, 2021, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation jointly promulgated the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, which became effective on May 1, 2021, to further provide guidance over personal information security and privacy protection.
Furthermore, the 2020 Measures, set forth the cybersecurity review mechanism for critical information infrastructure operators, and provided that critical information infrastructure operators who procure internet products and services that affect or may affect national security shall be subject to a cybersecurity review.
Furthermore, the 2020 Measures, set forth the cybersecurity review mechanism for critical information infrastructure operators, and provided that critical information infrastructure operators who procure internet products and services that affect or may affect national security shall be subject to a cybersecurity review. 86 Table of Contents The Cybersecurity Review Measures took effect on February 15, 2022, and has replaced the 2020 Measures and further restated and expanded the applicable scope of the cybersecurity review.
In accordance with the Decision of the State Council on Issues concerning Cancelling and Adjusting a Batch of Administrative Examination and Approval Items on February 24, 2015, a company operating express delivery services must apply for and obtain the Courier Service Operation Permit prior to the application of its business license, and the competent industrial and commercial administration will examine whether such company has obtained a Courier Service Operation Permit.
Where an express delivery service company conceals any facts or commits fraud in its annual report, such express delivery service company may be ordered by the postal administrative authorities to make correction and imposed a fine ranging from RMB10,000 to RMB30,000. 81 Table of Contents In accordance with the Decision of the State Council on Issues concerning Cancelling and Adjusting a Batch of Administrative Examination and Approval Items on February 24, 2015, a company operating express delivery services must apply for and obtain the Courier Service Operation Permit prior to the application of its business license, and the competent industrial and commercial administration will examine whether such company has obtained a Courier Service Operation Permit.
No General Aviation Business License or operation certificate is required for the engagement in commercial general aviation flight activities after obtaining an Air Operator Certificate. Two subsidiaries of ZTO Express have obtained the Remotely Piloted Aircraft System (RPAS) Air Operator Certificate.
No General Aviation Business License or operation certificate is required for the engagement in commercial general aviation flight activities after obtaining an Air Operator Certificate.
A small number of our indirect network partners may process packages for other express delivery companies. This is typically limited to situations where an outlet is located in a remote or isolated area or newly established markets. Such exceptions to our exclusivity requirement are necessary in order to support the outlet’s start-up volume.
All of our direct network partners and most of our indirect network partners work with us exclusively. A small number of our indirect network partners may process packages for other express delivery companies. This is typically limited to situations where an outlet is located in a remote or isolated area or newly established markets.
According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report the required information.
The Overseas Listing Trial Measures will comprehensively improve and reform the existing regulatory regime for overseas offering and listing of PRC domestic companies’ securities and will regulate both direct and indirect overseas offering and listing of PRC domestic companies’ securities by adopting a filing-based regulatory regime. 88 Table of Contents According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report the required information.
We control the qualification of new network partners and we provide extensive ongoing training to our network partners. We also periodically review the performance of our network partners on parcel volume, local market share, service quality and parcel safety/security scores. We consider the conditions and forecast of the local market to set guidance for those indicators.
Such exceptions to our exclusivity requirement are necessary in order to support the outlet’s start-up volume. We control the qualification of new network partners and we provide extensive ongoing training to our network partners. We also periodically review the performance of our network partners on parcel volume, local market share, service quality and parcel safety/security scores.
The major revisions made by the recently amended PRC Company Law included improvement of the system for the establishment and winding-up of companies, optimization of organizational structures of companies, improvement of the capital system of companies, strengthening the responsibilities of the controlling shareholder and managerial staff, enhancing the social responsibilities of companies, among others.
The major revisions made by the most recently amended PRC Company Law included improvement of the system for the establishment and winding-up of companies, optimization of organizational structures of companies, improvement of the capital system of companies, strengthening the responsibilities of the controlling shareholder and managerial staff, enhancing the social responsibilities of companies, among others. 80 Table of Contents Regulations Relating To Express Delivery Services The PRC Postal Law, which was most recently amended on April 24, 2015, sets out the fundamental rules on the establishment and operation of an express delivery company.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands except percentages) Revenues ​ 30,405,839 ​ 100.0 ​ 35,376,996 ​ 100.0 ​ 38,418,915 ​ 5,411,191 ​ 100.0 Cost of revenues ​ (23,816,462) ​ (78.3) ​ (26,337,721) ​ (74.4) ​ (26,756,389) ​ (3,768,559) ​ (69.6) Gross profit ​ 6,589,377 ​ 21.7 ​ 9,039,275 ​ 25.6 ​ 11,662,526 ​ 1,642,632 ​ 30.4 Operating income (expenses) (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (1,875,869) ​ (6.2) ​ (2,077,372) ​ (5.9) ​ (2,425,253) ​ (341,590) ​ (6.3) Other operating income, net ​ 789,503 ​ 2.6 ​ 774,578 ​ 2.2 ​ 770,651 ​ 108,544 ​ 2.0 Total operating expenses ​ (1,086,366) ​ (3.6) ​ (1,302,794) ​ (3.7) ​ (1,654,602) ​ (233,046) ​ (4.3) Income from operations ​ 5,503,011 ​ 18.1 ​ 7,736,481 ​ 21.9 ​ 10,007,924 ​ 1,409,586 ​ 26.1 Other income (expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 363,890 ​ 1.2 ​ 503,722 ​ 1.4 ​ 706,765 ​ 99,546 ​ 1.9 Interest expense ​ (126,503) ​ (0.4) ​ (190,521) ​ (0.5) ​ (289,533) ​ (40,780) ​ (0.8) Gain from fair value changes of financial instruments ​ 52,909 ​ 0.2 ​ 46,246 ​ 0.1 ​ 164,517 ​ 23,172 ​ 0.4 Gain on disposal of equity investees and subsidiary ​ 2,357 ​ — ​ 69,598 ​ 0.2 ​ 5,485 ​ 773 ​ 0.0 Impairment of investment in equity investee ​ — ​ — ​ (26,328) ​ (0.1) ​ — ​ — ​ — Foreign currency exchange (loss)/gain, before tax ​ (56,467) ​ (0.2) ​ 147,254 ​ 0.4 ​ 93,543 ​ 13,175 ​ 0.2 Income before income tax, and share of loss in equity method investments ​ 5,739,197 ​ 18.9 ​ 8,286,452 ​ 23.4 ​ 10,688,701 ​ 1,505,472 ​ 27.8 Income tax expense ​ (1,005,451) ​ (3.3) ​ (1,633,330) ​ (4.6) ​ (1,938,600) ​ (273,046) ​ (5.0) Share of (loss)/gain in equity method investments ​ (32,419) ​ (0.1) ​ 5,844 ​ 0.0 ​ 4,356 ​ 614 ​ 0.0 Net Income ​ 4,701,327 ​ 15.5 ​ 6,658,966 ​ 18.8 ​ 8,754,457 ​ 1,233,040 ​ 22.8 Net loss/(income) attributable to noncontrolling interests ​ 53,500 ​ 0.2 ​ 150,090 ​ 0.4 ​ (5,453) ​ (768) ​ 0.0 Net income attributable to ZTO Express (Cayman) Inc. ​ 4,754,827 ​ 15.6 ​ 6,809,056 ​ 19.2 ​ 8,749,004 ​ 1,232,272 ​ 22.8 (1) Our operating income (expenses) in 2021, 2022 and 2023 includes RMB248.0, RMB179.0 million and RMB255.0 (US$35.9 million), respectively, of share-based compensation expenses, accounting for 0.8%, 0.5% and 0.7% of our total revenues in the same periods, respectively. ​ 107 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues Our revenues increased by 8.6% to RMB38.4 billion (US$5.4 billion) in 2023 from RMB35.4 billion in 2022.
Biggest changeThe operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands except percentages) Revenues ​ 35,376,996 ​ 100.0 ​ 38,418,915 ​ 100.0 ​ 44,280,720 ​ 6,066,434 ​ 100.0 Cost of revenues ​ (26,337,721) ​ (74.4) ​ (26,756,389) ​ (69.6) ​ (30,563,628) ​ (4,187,200) ​ (69.0) Gross profit ​ 9,039,275 ​ 25.6 ​ 11,662,526 ​ 30.4 ​ 13,717,092 ​ 1,879,234 ​ 31.0 Operating income (expenses) (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (2,077,372) ​ (5.9) ​ (2,425,253) ​ (6.3) ​ (2,690,017) ​ (368,531) ​ (6.1) Other operating income, net ​ 774,578 ​ 2.2 ​ 770,651 ​ 2.0 ​ 749,784 ​ 102,720 ​ 1.7 Total operating expenses ​ (1,302,794) ​ (3.7) ​ (1,654,602) ​ (4.3) ​ (1,940,233) ​ (265,811) ​ (4.4) Income from operations ​ 7,736,481 ​ 21.9 ​ 10,007,924 ​ 26.1 ​ 11,776,859 ​ 1,613,423 ​ 26.6 Other income (expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 503,722 ​ 1.4 ​ 706,765 ​ 1.9 ​ 993,535 ​ 136,114 ​ 2.2 Interest expense ​ (190,521) ​ (0.5) ​ (289,533) ​ (0.8) ​ (337,919) ​ (46,295) ​ (0.8) Gain from fair value changes of financial instruments ​ 46,246 ​ 0.1 ​ 164,517 ​ 0.4 ​ 202,886 ​ 27,795 ​ 0.5 Gain/(loss) on disposal of equity investees and subsidiary ​ 69,598 ​ 0.2 ​ 5,485 ​ 0.0 ​ (10,518) ​ (1,441) ​ 0.0 Impairment of investment in equity investees ​ (26,328) ​ (0.1) ​ — ​ — ​ (931,367) ​ (127,597) ​ (2.1) Foreign currency exchange gain/(loss), before tax ​ 147,254 ​ 0.4 ​ 93,543 ​ 0.2 ​ (17,930) ​ (2,456) ​ 0.0 Income before income tax, and share of loss in equity method investments ​ 8,286,452 ​ 23.4 ​ 10,688,701 ​ 27.8 ​ 11,675,546 ​ 1,599,543 ​ 26.4 Income tax expense ​ (1,633,330) ​ (4.6) ​ (1,938,600) ​ (5.0) ​ (2,845,361) ​ (389,813) ​ (6.4) Share of gain in equity method investments ​ 5,844 ​ 0.0 ​ 4,356 ​ 0.0 ​ 57,410 ​ 7,865 ​ 0.1 Net Income ​ 6,658,966 ​ 18.8 ​ 8,754,457 ​ 22.8 ​ 8,887,595 ​ 1,217,595 ​ 20.1 Net loss/(income) attributable to noncontrolling interests ​ 150,090 ​ 0.4 ​ (5,453) ​ 0.0 ​ (70,760) ​ (9,694) ​ (0.2) Net income attributable to ZTO Express (Cayman) Inc. ​ 6,809,056 ​ 19.2 ​ 8,749,004 ​ 22.8 ​ 8,816,835 ​ 1,207,901 ​ 19.9 (1) Our operating income (expenses) in 2022, 2023 and 2024 includes RMB179.0 million, RMB255.0 and RMB318.7 million (US$43.7 million), respectively, of share-based compensation expenses, accounting for 0.5%, 0.7% and 0.7% of our total revenues in the same periods, respectively. ​ 107 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenues Our revenues increased by 15.3% to RMB44.3 billion (US$6.1 billion) in 2024 from RMB38.4 billion in 2023.
E. Critical Accounting Estimates For our critical accounting estimates, see “Item 5. Operating And Financial Review And Prospects—A. Operating Results—Critical Accounting Estimates.” F. Safe Harbor See “Forward-Looking Statements” on page 4 of this annual report. ​ 115 Table of Contents
E. Critical Accounting Estimates For our critical accounting estimates, see “Item 5. Operating And Financial Review And Prospects—A. Operating Results—Critical Accounting Estimates.” 115 Table of Contents F. Safe Harbor See “Forward-Looking Statements” on page 4 of this annual report. ​
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023. Holding Company Structure ZTO is a holding company with no material operations of its own. We conduct our operations primarily through our wholly owned subsidiaries and the consolidated affiliated entities in China.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024. Holding Company Structure ZTO is a holding company with no material operations of its own. We conduct our operations primarily through our wholly owned subsidiaries and the consolidated affiliated entities in China.
For example, fuel cost can be reduced through the use of more fuel-efficient vehicles, and unit transportation cost can be reduced by adding cost efficient, high-capacity line-haul trucks to our fleet and a gradual shift to a direct shipping model by selected network partners, and labor costs can be contained through wider implementation of automated sorting equipment. 106 Table of Contents Selling, General and Administrative Expenses Our selling, general and administrative expenses, which consist primarily of (i) salaries and other benefits for management and employees, (ii) depreciation and rental costs for office facilities, and (iii) legal, finance, and other corporate overhead costs, accounted for 6.2%, 5.9% and 6.3% of our revenues in 2021, 2022 and 2023, respectively.
For example, fuel cost can be reduced through the use of more fuel-efficient vehicles, and unit transportation cost can be reduced by adding cost efficient, high-capacity line-haul trucks to our fleet and a gradual shift to a direct shipping model by selected network partners, and labor costs can be contained through wider implementation of automated sorting equipment. 106 Table of Contents Selling, General and Administrative Expenses Our selling, general and administrative expenses, which consist primarily of (i) salaries and other benefits for management and employees, (ii) depreciation and rental costs for office facilities, and (iii) legal, finance, and other corporate overhead costs, accounted for 5.9% 6.3% and 6.1% of our revenues in 2022, 2023 and 2024, respectively.
Material Cash Requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our capital expenditures, capital commitments, operating lease commitments, investment commitments, short-term debt obligations, convertible senior notes obligations and dividend payment.
Material Cash Requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our capital expenditures, capital commitments, operating lease commitments, investment commitments, short-term debt obligations, convertible senior notes obligations and dividend payment.
Cost of accessories sold, which mainly includes cost of accessories that we sell to our network partners, such as (i) portable bar code readers, (ii) thermal paper used for digital waybill printing, and (iii) ZTO-branded packing materials and uniforms, accounted for 1.1%, 1.3% and 1.3% of our revenues in 2021, 2022 and 2023, respectively.
Cost of accessories sold, which mainly includes cost of accessories that we sell to our network partners, such as (i) portable bar code readers, (ii) thermal paper used for digital waybill printing, and (iii) ZTO-branded packing materials and uniforms, accounted for 1.3%, 1.3% and 1.5% of our revenues in 2022, 2023 and 2024, respectively.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 For a detailed description of the comparison of our operating results for the year ended December 31, 2022 to the year ended December 31, 2021, see “Item 5. Operating and Financial Review and Prospects—A.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 For a detailed description of the comparison of our operating results for the year ended December 31, 2023 to the year ended December 31, 2022, see “Item 5. Operating and Financial Review and Prospects—A.
Operating Activities Net cash provided by operating activities in 2023 was RMB13.4 billion (US$1.9 billion), which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB38.8 billion (US$5.5 billion), while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB15.8 billion (US$2.2 billion); (ii) RMB8.8 billion (US$1.2 billion) paid for labor related costs, including salaries, social insurances and other benefits; (iii) cash outflow of income tax of RMB1.7 billion (US$235.5 million); (iv) cash inflow of interest income of RMB899.5 million (US$126.7 million); (v) cash inflow of subsidy of RMB674.4 million (US$95.0 million); and (vi) cash outflow of RMB594.0 million (US$83.7 million) as other administrative costs.
Net cash provided by operating activities in 2023 was RMB13.4 billion, which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB38.8 billion, while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB15.8 billion; (ii) RMB8.8 billion paid for labor related costs, including salaries, social insurances and other benefits; (iii) cash outflow of income tax of RMB1.7 billion; (iv) cash inflow of interest income of RMB899.5 million; (v) cash inflow of subsidy of RMB674.4 million; and (vi) cash outflow of RMB594.0 million as other administrative costs.
We charge our network partners a network transit fee for each parcel that is processed through our network. Such fees represented 83.2%, 85.1% and 91.4% of our total express delivery services revenues in 2021, 2022 and 2023, respectively.
We charge our network partners a network transit fee for each parcel that is processed through our network. Such fees represented 85.1%, 91.4% and 85.1% of our total express delivery services revenues in 2022, 2023 and 2024, respectively.
Financing Activities Net cash used in financing activities in 2023 was RMB769.8 million (US$108.4 million), which was mainly attributable to the following factors: (i) payment of dividends of RMB2.1 billion (US$291.9 million); and (ii) proceeds from short-term borrowings in an amount of RMB12.3 billion (US$1.7 billion), partially offset by the repayment of short-term borrowings of RMB9.9 billion (US$1.4 billion); and (iii) share repurchase of RMB1,006.5 million (US$141.8 million).
Net cash used in financing activities in 2023 was RMB769.8 million, which was mainly attributable to the following factors: (i) payment of dividends of RMB2.1 billion; and (ii) proceeds from short-term borrowings in an amount of RMB12.3 billion, partially offset by the repayment of short-term borrowings of RMB9.9 billion; and (iii) share repurchase of RMB1,006.5 million.
Other costs, which mainly include (i) information technology related cost, (ii) dispatching costs paid to network partners associated with serving enterprise customers, and (iii) business tax surcharges, accounted for 12.7%, 12.4% and 9.2% of our revenues in 2021, 2022 and 2023, respectively.
Other costs, which mainly include (i) information technology related cost, (ii) pickup and dispatching costs paid to network partners associated with serving enterprise customers, and (iii) business tax surcharges, accounted for 12.4%, 9.2% and 13.4% of our revenues in 2022, 2023 and 2024, respectively.
Our annual parcel volume increased from 22,289 million in 2021 to 24,389 million in 2022 and further to 30,202 million in 2023. We determine the level of pricing of our network transit fee based on the operating costs of our business while also considering other factors, including market conditions and competition as well as our service quality.
Our annual parcel volume increased from 24,389 million in 2022 to 30,202 million in 2023 and further to 34,010 million in 2024. We determine the level of pricing of our network transit fee based on the operating costs of our business while also considering other factors, including market conditions and competition as well as our service quality.
Cost of accessories sold as a percentage of our revenues from sale of accessories was 28.4%, 33.5% and 27.4% in 2021, 2022 and 2023, respectively.
Cost of accessories sold as a percentage of our revenues from sale of accessories was 33.5%, 27.4% and 28.3% in 2022, 2023 and 2024, respectively.
Total line-haul transportation cost accounted for 37.8%, 35.3% and 35.4% of our revenues in 2021, 2022 and 2023, respectively. Since 2019, we increased usage of the vehicles that we own ourselves with an increasing number of higher-capacity trailer trucks, especially during the peak season, resulting in improved transportation cost efficiencies.
Total line-haul transportation cost accounted for 35.3%, 35.4% and 31.5% of our revenues in 2022, 2023 and 2024, respectively. Since 2019, we increased usage of the vehicles that we own ourselves with an increasing number of higher-capacity trailer trucks, especially during the peak season, resulting in improved transportation cost efficiencies.
Sorting hub cost includes (i) labor costs, (ii) land lease costs, (iii) depreciation of property and equipment and amortization of land use rights and (iv) other operating costs. Total sorting hub cost accounted for 22.3%, 22.2% and 21.5% of our revenues 2021, 2022 and 2023, respectively.
Sorting hub cost includes (i) labor costs, (ii) land lease costs, (iii) depreciation of property and equipment and amortization of land use rights and (iv) other operating costs. Total sorting hub cost accounted for 22.2%, 21.5% and 20.7% of our revenues 2022, 2023 and 2024, respectively.
Operating Results—Results of Operations—Year Ended December 31, 2022 Compared to Year Ended December 31, 2021” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 20, 2023. Taxation We generate the majority of our operating income from our PRC operations.
Operating Results—Results of Operations—Year Ended December 31, 2023 Compared to Year Ended December 31, 2022” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 19, 2024. Taxation We generate the majority of our operating income from our PRC operations.
Net cash used in investing activities in 2022 was RMB16.0 billion, primarily due to (i) purchase of short-term investment products of RMB9.6 billion, while maturity of short-term investment products amounted to RMB6.7 billion; (ii) purchase of property and equipment of RMB7.1 billion, including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iii) purchase of long-term investment products of RMB6.4 billion, while maturity of long-term investment products amounted to RMB284 million; (iv) purchase of land use rights in an amount of RMB345.0 million; and (v) cash received from disposal of equity investees and subsidiaries of RMB330.8 million, while payment for investments in equity investees amounted to RMB94.4 million. 113 Table of Contents Net cash used in investing activities in 2021 was RMB8.8 billion, primarily due to (i) purchase of short-term investment products of RMB13.2 billion, while maturity of short-term investment products amounted to RMB14.1 billion; (ii) purchase of property and equipment of RMB8.4 billion, including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iii) purchase of land use rights in an amount of RMB967.3 million; and (iv) payment for investments in equity investees of RMB569.8 million, while disposal of equity investees and subsidiaries amounted to RMB100.5 million.
Net cash used in investing activities in 2023 was RMB12.3 billion, primarily due to (i) purchase of short-term investment products of RMB11.3 billion, while maturity of short-term investment products amounted to RMB9.8 billion; (ii) purchase of long-term investment products of RMB10.1 billion, while maturity of long-term investment products amounted to RMB5,240.7 million; (iii) purchase of property and equipment of RMB6.5 billion, including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iv) cash received from disposal of investment in equity investees and subsidiaries and others of RMB476.9 million; and (v) purchase of land use rights in an amount of RMB140.9 million. 113 Table of Contents Net cash used in investing activities in 2022 was RMB16.0 billion, primarily due to (i) purchase of short-term investment products of RMB9.6 billion, while maturity of short-term investment products amounted to RMB6.7 billion; (ii) purchase of property and equipment of RMB7.1 billion, including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iii) purchase of long-term investment products of RMB6.4 billion, while maturity of long-term investment products amounted to RMB284 million; (iv) purchase of land use rights in an amount of RMB345.0 million; and (v) cash received from disposal of investment in equity investees and subsidiaries of RMB330.8 million, while payment for investments in equity investees amounted to RMB94.4 million.
In connection with the purchases of property and equipment, purchases of land use rights, the expansion of our truck fleet and the upgrade of our equipment and facilities, we incurred capital expenditures of an aggregate of approximately RMB9.3 billion, RMB7.4 billion, and RMB6.7 billion (US$939.4 million) in 2021, 2022 and 2023, respectively.
In connection with the purchases of property and equipment, purchases of land use rights, the expansion of our truck fleet and the upgrade of our equipment and facilities, we incurred capital expenditures of an aggregate of approximately RMB7.4 billion, RMB6.7 billion and RMB5.9 billion (US$808.6 million) in 2022, 2023 and 2024, respectively.
Our selling, general and administrative expenses also included share-based compensation expenses of RMB248.0 million, RMB179.0 million and RMB255.0 million (US$35.9 million) in 2021, 2022 and 2023, respectively, which accounted for 0.8%, 0.5% and 0.7% of our revenues in the corresponding periods.
Our selling, general and administrative expenses also included share-based compensation expenses of RMB179.0 million, RMB255.0 million and RMB318.7 million (US$43.7 million) in 2022, 2023 and 2024, respectively, which accounted for 0.5%, 0.7% and 0.7% of our revenues in the corresponding periods.
The expected credit loss recognized for financing receivables was RMB19.7 million, RMB35.5 million and RMB50.9 million (US$7.2 million) for the years ended December 31, 2021, 2022 and 2023, respectively.
The expected credit loss recognized for financing receivables was RMB35.5 million, RMB50.9 million and RMB36.9 million (US$5.1 million) for the years ended December 31, 2022, 2023 and 2024, respectively.
Liquidity and Capital Resources The following table sets forth the movements of our cash, cash equivalents and restricted cash for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: Net cash provided by operating activities 7,220,217 11,479,308 13,360,967 1,881,851 Net cash used in investing activities (8,756,533) (16,041,890) (12,252,751) (1,725,762) Net cash (used in)/provided by financing activities (2,903,985) 7,058,202 (769,836) (108,429) Effect of exchange rate changes on cash, cash equivalents and restricted cash (150,430) 338,106 109,843 15,471 Net increase/(decrease) in cash, cash equivalents and restricted cash ​ (4,590,731) 2,833,726 448,223 63,131 Cash, cash equivalents and restricted cash at beginning of year 14,360,092 9,769,361 12,603,087 1,775,107 Cash, cash equivalents and restricted cash at end of year 9,769,361 12,603,087 13,051,310 1,838,238 ​ Our principal sources of liquidity have been proceeds from cash flows from operating activities and financing activities in the past three years. ● In September 2020, we raised approximately HK$11.1 billion (US$1.4 billion) from the public offering of Class A ordinary shares in connection with our secondary listing in Hong Kong, after deducting underwriting commissions and the offering expenses payable by us. ● In September 2022, we completed an offering of US$1 billion in aggregate principal amount of convertible senior notes due 2027, or the 2027 Notes.
Liquidity and Capital Resources The following table sets forth the movements of our cash, cash equivalents and restricted cash for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB RMB RMB US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: Net cash provided by operating activities 11,479,308 ​ 13,360,967 ​ 11,429,436 ​ 1,565,826 Net cash used in investing activities (16,041,890) ​ (12,252,751) ​ (5,980,724) ​ (819,356) Net cash (used in)/provided by financing activities 7,058,202 ​ (769,836) ​ (4,995,180) ​ (684,337) Effect of exchange rate changes on cash, cash equivalents and restricted cash 338,106 ​ 109,843 ​ 26,105 ​ 3,577 Net increase/(decrease) in cash, cash equivalents and restricted cash ​ 2,833,726 ​ 448,223 ​ 479,637 ​ 65,710 Cash, cash equivalents and restricted cash at beginning of year 9,769,361 ​ 12,603,087 ​ 13,051,310 ​ 1,788,022 Cash, cash equivalents and restricted cash at end of year 12,603,087 ​ 13,051,310 ​ 13,530,947 ​ 1,853,732 ​ Our principal sources of liquidity have been proceeds from cash flows from operating activities and financing activities in the past three years. ● In September 2020, we raised approximately HK$11.1 billion (US$1.4 billion) from the public offering of Class A ordinary shares in connection with our secondary listing in Hong Kong, after deducting underwriting commissions and the offering expenses payable by us. ● In September 2022, we completed an offering of US$1 billion in aggregate principal amount of convertible senior notes due 2027, or the 2027 Notes.
As of December 31, 2021, 2022 and 2023, our cash and cash equivalents, restricted cash and short-term investments were RMB12.6 billion, RMB18.3 billion, and RMB20.5 billion (US$2.9 billion), respectively.
As of December 31, 2022, 2023 and 2024, our cash and cash equivalents, restricted cash and short-term investments were RMB18.3 billion, RMB20.5 billion, and RMB22.4 billion (US$3.1 billion), respectively.
Net cash provided by operating activities in 2021 was RMB7.2 billion, which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB30.0 billion, while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB13.8 billion; (ii) cash inflow of interest income of RMB321.1 million; (iii) cash inflow of subsidy of RMB683.2 million; (iv) RMB8.4 billion paid for labor related costs, including salaries, social insurances and other benefits; (v) cash outflow of income tax of RMB1.1 billion; and (vi) cash outflow of RMB487.0 million as other administrative costs.
Operating Activities Net cash provided by operating activities in 2024 was RMB11.4 billion (US$1.6 billion), which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB43.0 billion (US$5.9 billion), while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB21.1 billion (US$2.9 billion); (ii) RMB8.7 billion (US$1.2 billion) paid for labor related costs, including salaries, social insurances and other benefits; (iii) cash outflow of income tax of RMB2.4 billion (US$328.4 million); (iv) cash inflow of interest income of RMB542.9 million (US$74.4 million); (v) cash inflow of subsidy of RMB491.0 million (US$67.3 million); and (vi) cash outflow of RMB454.3 million (US$62.2 million) as other administrative costs.
As of December 31, 2023, approximately 91.8% of our cash and cash equivalents, restricted cash and short-term investments were held by subsidiaries and affiliated entities incorporated in China, and approximately 85.4% of our cash and cash equivalents, restricted cash and short-term investments were denominated in Renminbi.
As of December 31, 2024, approximately 92.9% of our cash and cash equivalents, restricted cash and short-term investments were held by subsidiaries and affiliated entities incorporated in China, and approximately 84.1% of our cash and cash equivalents, restricted cash and short-term investments were denominated in Renminbi.
Net Income Our net income increased to RMB8,754.5 million (US$1,233.0 million) in 2023 from RMB6,659.0 million in 2022 primarily as a result of the foregoing.
Net Income Our net income increased to RMB8,887.6 million (US$1,217.6 million) in 2024 from RMB8,754.5 million in 2023 primarily as a result of the foregoing.
Shanghai Zhongtongji Network distributed a dividend to ZTO Express (Hong Kong) Limited for 2023 and we recorded a deferred tax liability of RMB202.5 million as of December 31, 2023.
Shanghai Zhongtongji Network distributed a dividend to ZTO Express (Hong Kong) Limited for 2024 and we recorded a deferred tax liability of RMB512.0 million for the year ended December 31, 2024.
We had a financing receivables balance of RMB2,247.1 million and RMB2,100.2 million (US$295.8 million) as of December 31, 2022 and 2023. No material default occurred in 2021, 2022 and 2023. RMB99.1 million and RMB150.0 million (US$21.1 million) of allowance of credit losses relating to financing receivables were recorded as of December 31, 2022 and 2023, respectively.
We had a financing receivables balance of RMB2,100.2 million and RMB2,040.1million (US$279.5 million) as of December 31, 2023 and 2024. No material default occurred in 2022, 2023 and 2024. RMB150.0 million and RMB187.0 million (US$25.6 million) of allowance of credit losses relating to financing receivables were recorded as of December 31, 2023 and 2024, respectively.
We also plan to expand our customer base across different segments and industries. 104 Table of Contents Key Line Items and Specific Factors Affecting Our Results of Operations Revenues Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands) Express delivery services ​ 27,450,922 90.3 32,575,698 92.1 35,488,060 4,998,389 92.4 Freight forwarding services ​ 1,529,601 5.0 1,212,677 3.4 906,802 127,720 2.4 Sale of accessories ​ 1,231,283 4.0 1,384,674 3.9 1,876,624 264,317 4.9 Others ​ 194,033 0.7 203,947 0.6 147,429 20,765 0.3 Total revenues ​ 30,405,839 100.0 35,376,996 100.0 38,418,915 5,411,191 100.0 ​ We derive a substantial part of our revenues from express delivery services that we provide to our network partners, which mainly include parcel sorting and line-haul transportation.
We also plan to expand our customer base across different segments and industries. 104 Table of Contents Key Line Items and Specific Factors Affecting Our Results of Operations Revenues Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands) Express delivery services ​ 32,575,698 92.1 35,488,060 92.4 40,953,034 5,610,543 92.5 Freight forwarding services ​ 1,212,677 3.4 906,802 2.4 885,410 121,301 2.0 Sale of accessories ​ 1,384,674 3.9 1,876,624 4.9 2,300,392 315,152 5.2 Others ​ 203,947 0.6 147,429 0.3 141,884 19,438 0.3 Total revenues ​ 35,376,996 100.0 38,418,915 100.0 44,280,720 6,066,434 100.0 ​ We derive a substantial part of our revenues from express delivery services that we provide to our network partners, which mainly include parcel sorting and line-haul transportation.
The table below sets forth the maturity profiles of our financing receivables before provision of credit losses as of December 31, 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within One to Two to Over three ​ ​ December 31, 2023 ​ one year ​ two years ​ three years ​ years ​ Total Balance (RMB in thousands) 2,250,274 1,228,630 585,654 435,990 — ​ Percentage of Total Balance 100.0 ​ 54.6 ​ 26.0 ​ 19.4 ​ — ​ ​ Recently Issued Accounting Pronouncement A list of recently issued accounting pronouncements that are relevant to us is included in Note 2(aa) “Recently issued accounting pronouncement” to our audited consolidated financial statements included elsewhere in this annual report. 111 Table of Contents B.
The table below sets forth the maturity profiles of our financing receivables before provision of credit losses as of December 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within One to Two to Over three ​ ​ December 31, 2024 ​ one year ​ two years ​ three years ​ years ​ Total Balance (RMB in thousands) 2,227,044 ​ 1,292,025 ​ 506,419 ​ 385,990 ​ 42,610 ​ Percentage of Total Balance 100.0 ​ 58.0 ​ 22.7 ​ 17.3 ​ 1.9 ​ ​ Recently Issued Accounting Pronouncement A list of recently issued accounting pronouncements that are relevant to us is included in Note 2(z) “Recently issued accounting pronouncement” to our audited consolidated financial statements included elsewhere in this annual report. 111 Table of Contents B.
Investing Activities Net cash used in investing activities in 2023 was RMB12.3 billion (US$1.7 billion), primarily due to (i) purchase of short-term investment products of RMB11.3 billion (US$1.6 billion), while maturity of short-term investment products amounted to RMB9.8 billion (US$1.4 billion); (ii) purchase of long-term investment products of RMB10.1 billion (US$1.4 billion), while maturity of long-term investment products amounted to RMB5,240.7 million (US$738.1 million); (iii) purchase of property and equipment of RMB6.5 billion (US$919.6 million), including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iv) cash received from disposal of equity investees and subsidiaries and others of RMB476.9 million (US$67.2 million); and (v) purchase of land use rights in an amount of RMB140.9 million (US$19.9 million).
Investing Activities Net cash used in investing activities in 2024 was RMB6.0 billion (US$0.8 billion), primarily due to (i) purchase of short-term investment products of RMB13.7 billion (US$1.9 billion), while maturity of short-term investment products amounted to RMB15.7 billion (US$2.2 billion); (ii) purchase of long-term investment products of RMB3.9 billion (US$536.9 million), while maturity of long-term investment products amounted to RMB836.1 million (US$114.6 million); (iii) purchase of property and equipment of RMB5.2 billion (US$713.5 million), including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iv) cash received from disposal of investment in equity investees of RMB719.8 million (US$98.6 million); and (v) purchase of land use rights in an amount of RMB694.0 million (US$95.1 million).
In addition, we also directly provide express delivery services to certain enterprise customers, including vertical e-commerce and traditional merchants, in connection with the delivery of their products to end consumers. Revenues from our express delivery services to such enterprise customers accounted for 16.8%, 14.9% and 8.6% of our total express delivery services revenues in 2021, 2022 and 2023, respectively.
In addition, we also directly provide express delivery services to certain enterprise customers, including both e-commerce and traditional merchants, providing express delivery services and handling return parcels for e-commerce platforms. Revenues from our express delivery services to such enterprise customers accounted for 14.9%, 8.6% and 14.9% of our total express delivery services revenues in 2022, 2023 and 2024, respectively.
Our sorting hub cost increased by 5.2% to RMB8.3 billion (US$1.2 billion) in 2023 from RMB7.8 billion in 2022.
Our sorting hub cost increased by 11.0% to RMB9.2 billion (US$1.3 billion) in 2024 from RMB8.3 billion in 2023.
Short-term investment primarily comprises of interest rate swaps, dual currency notes/deposits, time deposits with maturities between three months and one year, and investments in wealth management products with variable interest rates.
Short-term investments consist primarily of dual currency notes and deposits, investments in fixed deposits with maturities between three months and one year and wealth management products within one year.
The following table sets forth the components of our cost of revenues, in absolute amounts and as percentages of our revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands) Line-haul transportation cost ​ 11,487,810 37.8 12,480,170 35.3 13,591,627 1,914,341 35.4 Sorting hub cost ​ 6,774,595 22.3 7,845,491 22.2 8,253,522 1,162,484 21.5 Freight forwarding cost ​ 1,326,557 4.4 1,137,140 3.2 854,533 120,358 2.2 Cost of accessories sold ​ 349,647 1.1 463,448 1.3 513,391 72,310 1.3 Other costs ​ 3,877,853 12.7 4,411,472 12.4 3,543,316 499,066 9.2 Total cost of revenues ​ 23,816,462 78.3 26,337,721 74.4 26,756,389 3,768,559 69.6 ​ Line-haul transportation cost primarily includes (i) payment for services by outsourced fleets, (ii) truck fuel costs and tolls incurred by the vehicles we own, (iii) employee compensation and other benefits for drivers of the vehicles we own, (iv) air transportation cost and (v) depreciation and maintenance costs of the vehicles we own.
The following table sets forth the components of our cost of revenues, in absolute amounts and as percentages of our revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB % RMB % RMB US$ % ​ ​ (in thousands) Line-haul transportation cost ​ 12,480,170 35.3 13,591,627 35.4 13,966,446 1,913,395 31.5 Sorting hub cost ​ 7,845,491 22.2 8,253,522 21.5 9,163,784 1,255,433 20.7 Freight forwarding cost ​ 1,137,140 3.2 854,533 2.2 828,270 113,473 1.9 Cost of accessories sold ​ 463,448 1.3 513,391 1.3 651,729 89,287 1.5 Other costs ​ 4,411,472 12.4 3,543,316 9.2 5,953,399 815,612 13.4 Total cost of revenues ​ 26,337,721 74.4 26,756,389 69.6 30,563,628 4,187,200 69.0 ​ Line-haul transportation cost primarily includes (i) payment for services by outsourced fleets, (ii) truck fuel costs and tolls incurred by the vehicles we own, (iii) employee compensation and other benefits for drivers of the vehicles we own, (iv) air transportation cost and (v) depreciation and maintenance costs of the vehicles we own.
The increase was mainly due to (i) RMB242.3 million (US$34.1 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvement, and (ii)RMB245.7 million (US$34.6 million) increase in depreciation and amortization costs associated with automated equipment and other facilities.
The increase was mainly due to (i)RMB542.6 million (US$74.3 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvement and (ii) RMB288.3 million (US$39.5 million) increase in depreciation and amortization costs associated with automated equipment and facility upgrades to further improve the transit efficiency. Cost of accessories sold.
Net cash provided by financing activities in 2021 was RMB2.9 billion, which was mainly attributable to the following factors: (i) payment of dividends of RMB1.4 billion; (ii) share repurchase of RMB3.8 billion; and (iii) proceeds from short-term borrowings in an amount of RMB6.9 billion, partially offset by the repayment of short-term borrowings of RMB4.9 billion.
Financing Activities Net cash used in financing activities in 2024 was RMB5.0 billion (US$684.3 million), which was mainly attributable to the following factors: (i) payment of dividends of RMB5.6 billion (US$767.9 million); and (ii) proceeds from short-term borrowings in an amount of RMB19.7 billion (US$2.7 billion), partially offset by the repayment of short-term borrowings of RMB18.0 billion (US$2.5 billion); and (iii) share repurchase of RMB1,157.5 million (US$158.6 million).
Our effective tax rate in 2023 was 18.1%, compared to 19.7% in 2022 due to an income tax refund of RMB207.1 million received in the third quarter by Shanghai Zhongtongji Network, a wholly-owned subsidiary of the Company, for being recognized as a “Key Software Enterprise” that was qualified for a preferential tax rate of 10% for tax year 2022.
The increase was mainly due to (i) the accrual of RMB 518.3 million (US$ 71.0 million) in withholding tax on dividend payable to ZTO Express (Hong Kong) Limited, and (ii) an income tax refund of RMB207.1 million received in the third quarter of 2023 by Shanghai Zhongtongji Network Technology Co., Ltd., our wholly-owned subsidiary, for being recognized as a “Key Software Enterprise” that was qualified for a preferential tax rate of 10% for tax year 2022.
This increase primarily resulted from increases in line-haul transportation cost by 8.9% to RMB13.6 billion (US$1.9 billion), sorting hub operating cost by 5.2% to RMB8.3 billion (US$1.2 billion), and cost of accessories sold by 10.8% to RMB513.4 million (US$72.3 million), partially offset by the decrease in other costs by 19.7% to RMB3,543.3 million (US$499.1 million). Line-haul transportation cost.
This increase primarily resulted from increases in line-haul transportation cost by 2.8% to RMB14.0 billion (US$1.9 billion), sorting hub operating cost by 11.0% to RMB9.2 billion (US$1.3 billion), cost of accessories sold by 26.9% to RMB615.7 million (US$89.3 million), and other costs by 68.0% to RMB5,953.4 million (US$0.8 billion). Line-haul transportation cost.
Other Income and Expenses Interest income. Interest income increased to RMB706.8 million (US$99.5 million) in 2023 from RMB503.7 million in 2022, primarily due to the increased average daily balance of cash and interest-earning bank deposits. Interest expense.
Interest income increased to RMB993.5 million (US$136.1 million) in 2024 from RMB706.8 million in 2023, primarily due to the increased average daily balance of cash and interest-earning bank deposits. Interest expense. Our interest expense increased to RMB337.9 million (US$46.3 million) in 2024 from RMB289.5 million in 2023, primarily due to increased short-term bank borrowings during 2024.
Our line-haul transportation cost was RMB13.6 billion (US$1.9 billion) in 2023, an increase from RMB12.5 billion in 2022. The line-haul transportation cost per parcel decreased 6 cents to RMB0.45. The decrease was primarily due to better economies of scale, optimized line-haul route planning and decreased fuel price. Sorting hub cost.
Our line-haul transportation cost was RMB14.0 billion (US$1.9 billion) in 2024, an increase of 2.8% from RMB13.6 billion in 2023. The line-haul transportation cost per parcel decreased by 8.9% or 4 cents to RMB0.41, mainly attributable to better economies of scale and improved load rate through more effective route planning. Sorting hub cost.
We will continue to make capital expenditures to support the growth of our business. Our capital commitments primarily relate to commitments on construction of office building, sorting hubs and warehouse facilities. Our capital commitments as of December 31, 2023 amounted to RMB4.6 billion (US$647.0 million). All of these capital commitments will be fulfilled based on the construction progress.
Our capital commitments as of December 31, 2024 amounted to RMB5.2 billion (US$706.8 million). All of these capital commitments will be fulfilled based on the construction progress. Our operating lease commitments consist of the commitments under the lease agreements for our office space, sorting hubs and warehouse facilities.
In 2023, we entered into bank loan contracts and discounted notes arrangements with several banks with an aggregate amount of RMB12.3 billion (US$1.7 billion). The weighted average interest rate of borrowings drawn was 1.6% in 2023. ​ 114 Table of Contents Our convertible senior notes obligations represent the principal amount and cash interests in connection with our 2027 Notes.
The weighted average interest rate of borrowings drawn was 1.2% in 2024. ​ 114 Table of Contents Our convertible senior notes obligations represent the principal amount and cash interests in connection with our 2027 Notes. Holders of the 2027 Notes have the right to require us to repurchase their notes on September 2, 2025.
Income Tax Expense Our income tax expense was RMB1,938.6 million (US$273.0 million) in 2023, representing an increase of 18.7% from RMB1,633.3 million in 2022.
Income Tax Expense Our income tax expense was RMB2,845.4 million (US$389.8 million) in 2024, representing an increase of 46.8% from RMB1,938.6 million in 2023. Our effective tax rate in 2024 was 24.4%, compared to 18.1% in 2023.
We were obligated to pay RMB20.2 million (US$2.8 million) for certain investment in equity investees as of December 31, 2023 with payment due within three years. As of December 31, 2023, we had outstanding principal amount of short-term bank borrowings of RMB7.8 billion (US$1.1 billion), among which RMB6.7 billion (US$937.8 million) were unsecured and unguaranteed.
Our investment commitments primarily consist of our commitment to make capital contributions to certain equity investees. We were obligated to pay RMB20.2 million (US$2.8 million) for certain investment in equity investees as of December 31, 2024 with payment due within three years.
Our operating lease commitments consist of the commitments under the lease agreements for our office space, sorting hubs and warehouse facilities. We lease office space, sorting hubs and warehouse facilities under non-cancellable operating lease agreements that expire at various dates through October 2037.
We lease office space, sorting hubs and warehouse facilities under non-cancellable operating lease agreements that expire at various dates through October 2037. As of December 31, 2024, we also had operating lease liabilities amounting to RMB602.0 million (US$82.5 million), certain of which were secured by the rental deposits and all of which were unguaranteed.
Operating Expenses Our total operating expenses increased by 27.0% to RMB1,654.6 million (US$233.0 million) in 2023 from RMB1,302.8 million in 2022. ​ 108 Table of Contents Selling, general and administrative expenses. Our selling, general and administrative expenses increased by 16.7% to RMB2,425.3 million (US$341.6 million) in 2023 from RMB2,077.4 million in 2022.
As a result, our gross profit margin increased to 31.0% in 2024 from 30.4% in 2023. Operating Expenses Our total operating expenses increased by 17.3% to RMB1,940.2 million (US$265.8 million) in 2024 from RMB1,654.6 million in 2023. Selling, general and administrative expenses.
Our foreign currency exchange gain decreased from the gain of RMB147.3 million in 2022 to the gain of RMB93.5 million (US$13.2 million) in 2023, mainly due to the decrease in the onshore U.S. dollar-denominated bank deposits, partially offset by the appreciation of U.S. dollar against Renminbi.
Foreign currency exchange gain (loss). We had a foreign currency exchange loss of RMB17.9 million (US$2.5 million), compared to a gain of RMB93.5 million in 2023, mainly due to the fluctuation of the foreign currency-denominated bank deposits against the Chinese Renminbi.
The increase was primarily due to (i) RMB115.9 million (US$16.3 million) increase in compensation and benefit expenses, (ii) RMB85.6 million (US$12.1 million) provision of losses from a credit loan provided to Shanghai Shuangcaiji Intelligent Technology Co., Ltd, an equipment supplier, (iii) RMB80.2 million (US$11.3 million) in headquarter facility expenses, and (iv) RMB74.8 million (US$10.5 million) depreciation and amortization costs associated with equipment and facilities.
The increase was primarily due to (i) RMB72.4 million (US$9.9 million) increase in headquarter facility expenses, (ii) RMB47.6 million (US$6.5 million) increase in depreciation and amortization costs associated with administrative equipment and facilities, and (iii) RMB47.6 million (US$6.5 million) increase in compensation and benefit expenses. Other operating income, net.
Revenue from sales of accessories, largely consisting of the sales of thermal paper used for digital waybills, increased by 35.5% in line with parcel volume growth. Cost of Revenues Our total cost of revenues increased by 1.6% to RMB26.8 billion (US$3.8 billion) in 2023 from RMB26.3 billion in 2022.
Revenue from freight forwarding services decreased by 2.4% compared to 2023, mainly due to declining cross border e-commerce pricing. Revenue from sales of accessories, largely consisting of the sales of thermal paper used for digital waybills’ printing, increased by 22.6% in line with parcel volume growth.
Gross Profit Our gross profit increased by 29.0% to RMB11.7 billion (US$1.6 billion) in 2023 from RMB9.0 billion in 2022, primarily attributable to 23.8% parcel volume growth and 18.0% unit cost productivity gain partially offsetting overall unit price per parcel decline of 11.3% due to competition. The parcel volume growth resulted mainly from an increase in our market share.
Gross Profit Our gross profit increased by 17.6% to RMB13.7 billion (US$1.9 billion) in 2024 from RMB11.7 billion in 2023, primarily attributable to 12.6% parcel volume growth and 4.4% parcel unit profit increase. The unit profit increased because of the proportion of higher-valued parcels such as returned parcels from e-commerce platforms continued to increase.
Other operating income, net. We had a net other operating income of RMB770.7 million (US$108.5 million) in 2023, compared with RMB774.6 million in 2022. Other operating income mainly consisted of (i) RMB397.0 million (US$55.9 million) of government subsidies and tax rebates, (ii) RMB277.4 million (US$39.1 million) of VAT super deduction, and (iii) RMB122.0 million (US$17.2 million) of rental income.
Other operating income mainly consisted of (i) RMB488.9 million (US$67.0 million) of government subsidies and tax rebates, (ii) RMB171.3 million (US$23.5 million) of rental and other income, and (iii) RMB111.5 million (US$15.3 million) of ADR fee rebate. 108 Table of Contents Other Income and Expenses Interest income.
Removed
The increase was mainly driven by a 23.8% increase in parcel volume to 30,202 million in 2023 from 24,389 million in 2022 as a result of an increase in our market share. It was also largely offset by a 11.3% decrease in unit price per parcel mainly resulting from increase in volume incentives.
Added
Revenue from the core express delivery business increased by 15.7% driven by a 12.6% growth in parcel volume and a 2.7% increase in unit price. KA revenue including delivery fees from direct sales organizations, established to serve core express KA customers, increased by 100.7% as the proportion of higher-valued parcels such as returned parcels from e-commerce platforms continued to increase.
Removed
KA revenue including delivery fees from direct sales organizations, established to serve core express KA customers, decreased by 37.3% through either re-engagement of partner outlets for fulfilment or rationalization due to loss-making. Revenue from freight forwarding services decreased by 25.2% compared to 2022, mainly due to post-pandemic e-commerce price decline.
Added
Cost of Revenues Our total cost of revenues increased by 14.2% to RMB30.6 billion (US$4.2 billion) in 2024 from RMB26.8 billion in 2023.
Removed
With standardization in operating procedures, improved performance evaluation system, the unit sorting cost decreased 15.0% or 5 cents. Cost of accessories sold. Our cost of accessories sold increased by 10.8% to RMB513.4 million (US$72.3 million) in 2023 from RMB463.4 million in 2022. Other costs.
Added
Our cost of accessories sold increased by 26.9% to RMB651.7 million (US$89.3 million) in 2024 from RMB513.4 million in 2023. Other costs. Other costs increased by 68.0% to RMB5,953.4 million (US$815.6 million) in 2024 from RMB3,543.3 million in 2023, primarily due to (i) RMB2,452.0 million (US$335.9 million) increase in costs for serving higher-valued enterprise customers.
Removed
Other costs decreased to RMB3,543.3 million (US$499.1 million) in 2023 from RMB4,411.5 million in 2022, primarily due to (i) RMB904.7 million (US$127.4 million) decrease in dispatching costs associated with serving enterprise customers, offset by (ii) RMB137.2 million (US$19.3 million) increase in IT cost.
Added
Our selling, general and administrative expenses increased by 10.9% to RMB2,690.0 million (US$368.5 million) in 2024 from RMB2,425.3 million in 2023.
Removed
On the other hand, our cost productivity improved during the period primarily because of the continued adoption of cost efficient and innovative measures in transportation and sorting, such as the use of high-capacity trucks and automated sorting equipment. As a result, our gross profit margin increased to 30.4% in 2023 from 25.6% in 2022.
Added
We had a net other operating income of RMB749.8 million (US$102.7 million) in 2024, compared with RMB770.7 million in 2023.
Removed
Our interest expense increased to RMB289.5 million (US$40.8 million) in 2023 from RMB190.5 million in 2022, primarily due to increased short-term bank borrowings during 2023. Foreign currency exchange gain.
Added
Gain from fair value changes of financial instruments . Our gain from fair value changes of financial instruments was RMB202.9 million (US$27.8 million) in 2024, compared with a gain of RMB164.5 million in 2023. Such gain or loss from fair value changes of the financial instruments is quoted by commercial banks according to market-based estimation of future redemption prices.
Removed
We intend to fund our future capital expenditures with our existing cash balance, proceeds from our public offering of Class A ordinary shares in relation to our listing on the Main Board of the Hong Kong Stock Exchange, issuance of the 2027 Notes and other financing alternatives.
Added
Impairment of investment in equity investees was RMB931.4 million (US$127.6 million), included the provision for impairment of (i) RMB479.9 million (US$65.8 million) related to a tender offer initiated by Alibaba Group Holding Limited to purchase all the outstanding shares of Cainiao Smart Logistics Network Limited where we had a minority interest, as the offer price was below the carrying amount, and (ii) RMB451.5 million (US$61.8 million) of our investment in Zhejiang Yizhan Network Technology Co., Ltd. a subsidiary of Cainiao Smart Logistics Network Ltd.
Removed
As of December 31, 2023, we also had operating lease liabilities amounting to RMB714.9 million (US$100.7 million), certain of which were secured by the rental deposits and all of which were unguaranteed. Our investment commitments primarily consist of our commitment to make capital contributions to certain equity investees.
Added
We intend to fund our future capital expenditures with our existing cash balance and other financing alternatives. We will continue to make capital expenditures to support the growth of our business. Our capital commitments primarily relate to commitments on construction of office building, sorting hubs and warehouse facilities.
Removed
Holders of the 2027 Notes have the right to require us to repurchase their notes on September 2, 2025.
Added
As of December 31, 2024, we had outstanding principal amount of short-term bank borrowings of RMB9.5 billion (US$1.3 billion), among which RMB5.9 billion (US$809.9 million) were unsecured and unguaranteed. In 2024, we entered into bank loan contracts and discounted notes arrangements with several banks with an aggregate amount of RMB17.7 billion (US$2.4 billion).
Added
On August 20, 2024, our board of directors approved an interim cash dividend of US$0.35 per ADS and ordinary share for the six months ended June 30, 2024 to holders of ADSs and ordinary shares of record as of the close of business on September 10, 2024.
Added
On March 18, 2025, our board of directors approved a cash dividend of US$0.35 per ADS and ordinary share for the six months ended December 31, 2024 to holders of ADSs and ordinary shares of record as of the close of business on April 10, 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

61 edited+8 added−6 removed90 unchanged
Biggest changeWe have also been advised by our Cayman Islands legal counsel that a judgment obtained in any federal or state court in the United States will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (i) is given by a foreign court of competent jurisdiction, (ii) imposes on the judgment debtor a liability to pay a liquidated sum for which the judgment has been given, (iii) is final, (iv) is not in respect of taxes, a fine or a penalty, and (v) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Biggest changeFor such a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
Our compensation committee consists of Xing Liu, Frank Zhen Wei and Qin Charles Huang. Mr. Liu is the chairman of our compensation committee. We have determined that Xing Liu, Frank Zhen Wei and Qin Charles Huang each satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.
Compensation Committee. Our compensation committee consists of Xing Liu, Frank Zhen Wei and Qin Charles Huang. Mr. Liu is the chairman of our compensation committee. We have determined that Xing Liu, Frank Zhen Wei and Qin Charles Huang each satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.
Other individuals as a group were granted restricted share units representing a total of 1,943,531 Class A ordinary shares as of March 31, 2024. ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ Underlying Restricted ​ ​ Name ​ Share Units Awarded ​ Date of Grant Meisong Lai ​ * ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15,2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Jilei Wang ​ * ​ March 28, 2017 ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Xing Liu * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Frank Zhen Wei ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Qin Charles Huang ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Herman Yu ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Tsun-Ming (Daniel) Kao ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Fang Xie ​ * ​ March 14, 2023 Huiping Yan ​ * ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Jianchang Lai ​ * ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Total 3,648,969 ​ * Less than 1% of our total outstanding shares. 2024 Share Incentive Plan The board of directors approved and adopted a share incentive plan on March 19, 2024 that became effective on March 19, 2024, or the 2024 Plan.
Other individuals as a group were granted restricted share units representing a total of 1,943,531 Class A ordinary shares as of March 31, 2025. ​ ​ ​ ​ ​ ​ Ordinary Shares ​ ​ ​ Underlying Restricted ​ ​ Name ​ Share Units Awarded ​ Date of Grant Meisong Lai ​ * ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15,2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Jilei Wang ​ * ​ March 28, 2017 ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Xing Liu * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Frank Zhen Wei ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Qin Charles Huang ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Herman Yu ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Tsun-Ming (Daniel) Kao ​ * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 Fang Xie ​ * ​ March 14, 2023 Huiping Yan ​ * ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Jianchang Lai ​ * ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Total 3,648,969 ​ * Less than 1% of our total outstanding shares. 2024 Share Incentive Plan The board of directors approved and adopted a share incentive plan on March 19, 2024 that became effective on March 19, 2024, or the 2024 Plan.
The following table summarizes, as of March 31, 2024, the number of our ordinary shares held by ZTO ES over which our directors and officers had been awarded such rights. ​ ​ ​ ​ ​ ​ Class A ​ Name ​ Ordinary Shares ​ Date of Grant Meisong Lai * ​ June 28, 2016 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ March 13, 2020 Jilei Wang ​ * ​ June 28, 2016 Hongqun Hu * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ March 22, 2024 Jianchang Lai ​ * ​ June 28, 2016 Jingxi Zhu ​ * ​ June 28, 2016, ​ ​ ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Jianfeng Zhang ​ * ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Total 1,792,851 ​ * Less than 1% of our total outstanding shares.
The following table summarizes, as of March 31, 2025, the number of our ordinary shares held by ZTO ES over which our directors and officers had been awarded such rights. ​ ​ ​ ​ ​ ​ Class A ​ Name ​ Ordinary Shares ​ Date of Grant Meisong Lai * ​ June 28, 2016 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ March 13, 2020 Jilei Wang ​ * ​ June 28, 2016 Hongqun Hu * ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ March 22, 2024 Jingxi Zhu ​ * ​ June 28, 2016, ​ ​ ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Jianchang Lai ​ * ​ June 28, 2016 Jianfeng Zhang ​ * ​ March 28, 2017 ​ ​ ​ ​ March 7, 2018 ​ ​ ​ ​ March 11, 2019 ​ ​ ​ ​ March 13, 2020 ​ ​ ​ ​ March 16, 2021 ​ ​ ​ ​ March 15, 2022 ​ ​ ​ ​ March 14, 2023 ​ ​ ​ ​ March 22, 2024 Total 1,792,851 ​ * Less than 1% of our total outstanding shares.
The compensation committee is responsible for, among other things: ● making recommendations to the board on the Company’s policy and structure for all directors’ and senior management’s remuneration and on the establishment of a formal and transparent procedure for developing remuneration policy; ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee is responsible for, among other things: ● making recommendations to the board on the Company’s policy and structure for all directors’ and senior management’s remuneration and on the establishment of a formal and transparent procedure for developing remuneration policy; 124 Table of Contents ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The shares that may be issued pursuant to the awards under the 2024 Plan will be from shares or ADSs purchased in the open market by us or a third party trust. 2024 Plan does not involve the issuance of new shares of our company. 121 Table of Contents The following paragraphs describe the principal terms of the 2024 Plan.
The shares that may be issued pursuant to the awards under the 2024 Plan will be from shares or ADSs purchased in the open market by us or a third party trust. 2024 Plan does not involve the issuance of new shares of our company. 120 Table of Contents The following paragraphs describe the principal terms of the 2024 Plan.
Kao has long-standing industry experience in leading e-commerce and internet companies in the U.S. and China. Mr. Kao has served as the chief technology officer at Vipshop (NYSE: VIPS) since April 2019. Prior to that, Mr. Kao served as the chief technology officer at Shanghai Noah Information Technology Co., Ltd.
Kao has long-standing industry experience in leading e-commerce and internet companies in the U.S. and China. Mr. Kao served as the chief technology officer at Vipshop (NYSE: VIPS) since April 2019 to July 2021. Prior to that, Mr. Kao served as the chief technology officer at Shanghai Noah Information Technology Co., Ltd.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 124 Table of Contents Compensation Committee.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Before joining ZTO, Ms. Yan spent approximately seven years serving as the chief financial officer of a number of Chinese TMT and hospitality companies including two years at Cainiao Network, the logistics arm of Alibaba (NYSE: BABA, HKEX: 9988), and over four years at Home Inns, a leading economy hotel chain in China. Prior to that, Ms.
Yan spent approximately seven years serving as the chief financial officer of a number of Chinese TMT and hospitality companies including two years at Cainiao Network, the logistics arm of Alibaba (NYSE: BABA, HKEX: 9988), and over four years at Home Inns, a leading economy hotel chain in China. Prior to that, Ms.
We have determined that Frank Zhen Wei, Qin Charles Huang and Tsun-Ming (Daniel) Kao each satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.
We have determined that Frank Zhen Wei, Qin Charles Huang, Tsun-Ming (Daniel) Kao and Fang Xie each satisfies the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange.
From July 2012 to August 2013, Mr. Chen served as an associate at investment banking department of Deutsche Bank Securities in New York. From July 2006 to October 2008, Mr. Chen worked at investment banking department of China International Capital Corporation as an analyst. Mr. Chen has been a non-executive director of Quantium Solutions International Pte. Ltd. since June 2022.
Chen served as an associate at investment banking department of Deutsche Bank Securities in New York. From July 2006 to October 2008, Mr. Chen worked at investment banking department of China International Capital Corporation as an analyst. Mr. Chen has been a non-executive director of Quantium Solutions International Pte. Ltd. since June 2022. Mr.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. B.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company. 118 Table of Contents B.
Mr. Chen received his MBA degree from Ross School of Business at University of Michigan in 2012, and his bachelor’s degree in economics from Fudan University in 2006. Mr. Xing Liu has served as our director since May 2013. Mr. Liu is currently a partner of HongShan, which he joined in May 2007. Mr.
Chen received his MBA degree from Ross School of Business at University of Michigan in 2012, and his bachelor’s degree in economics from Fudan University in 2006. 116 Table of Contents Mr. Xing Liu has served as our director since May 2013. Mr. Liu is currently a partner of HongShan, which he joined in May 2007. Mr.
Yu is a California Certified Public Accountant and holds a B.A. in economics from the University of California, Santa Cruz and a Master of Accountancy (MAcc) from the University of Southern California. Mr. Tsun-Ming Kao, also known as Mr. Tsun-Ming (Daniel) Kao has been our director since October 2017. Mr.
Yu is a California certified public accountant and holds a B.A. in economics from the University of California, Santa Cruz and a Master of Accounting from the University of Southern California. Mr. Tsun-Ming Kao, also known as Mr. Tsun-Ming (Daniel) Kao has been our director since October 2017. Mr.
As of March 31, 2024, restricted share units representing a total of 5,592,500 Class A ordinary shares have been granted under the 2016 Plan, excluding awards that were forfeited or cancelled after their grant dates. 120 Table of Contents The following table summarizes, as of March 31, 2024, the restricted share units we granted to our directors and executive officers under our 2016 Plan, excluding awards that were forfeited or cancelled after their grant dates.
As of March 31, 2025, restricted share units representing a total of 5,592,500 Class A ordinary shares have been granted under the 2016 Plan, excluding awards that were forfeited or cancelled after their grant dates. 119 Table of Contents The following table summarizes, as of March 31, 2025, the restricted share units we granted to our directors and executive officers under our 2016 Plan, excluding awards that were forfeited or cancelled after their grant dates.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Frank Zhen Wei, Qin Charles Huang and Tsun-Ming (Daniel) Kao. Mr. Wei is the chairman of our nominating and corporate governance committee.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Frank Zhen Wei, Qin Charles Huang, Tsun-Ming (Daniel) Kao. and Fang Xie Mr. Wei is the chairman of our nominating and corporate governance committee.
Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report. ​ ​ ​ ​ ​ Directors and E xecutive Officers Age Position/Title Meisong Lai ​ 53 ​ Founder, Chairman of the Board of Directors and Chief Executive Officer Jilei Wang ​ 58 ​ Director and Vice President of Infrastructure Management Hongqun Hu ​ 55 ​ Director and Chief Operating Officer Xudong Chen * ​ 40 ​ Director Xing Liu ​ 53 ​ Director Frank Zhen Wei ​ 52 ​ Director Qin Charles Huang ​ 54 ​ Director Herman Yu ​ 53 ​ Director Tsun-Ming (Daniel) Kao ​ 58 ​ Director Fang Xie ​ 59 ​ Director Huiping Yan ​ 57 ​ Chief Financial Officer Jianchang Lai ​ 53 ​ Vice President of Overseas Operations Jingxi Zhu ​ 43 ​ Vice President of Information Technology Jianfeng Zhang ​ 41 ​ Vice President of Public Relations * Pursuant to the investment agreement we entered into with Alibaba and Cainiao Network, Mr.
Directors and Senior Management The following table sets forth information regarding our directors and executive officers as of the date of this annual report. ​ ​ ​ ​ ​ Directors and E xecutive Officers Age Position/Title Meisong Lai ​ 54 ​ Founder, Chairman of the Board of Directors and Chief Executive Officer Jilei Wang ​ 59 ​ Director and Vice President of Infrastructure Management Hongqun Hu ​ 56 ​ Director and Chief Operating Officer Xudong Chen * ​ 41 ​ Director Xing Liu ​ 54 ​ Director Frank Zhen Wei ​ 53 ​ Director Qin Charles Huang ​ 55 ​ Director Herman Yu ​ 54 ​ Director Tsun-Ming (Daniel) Kao ​ 59 ​ Director Fang Xie ​ 60 ​ Director Jingxi Zhu ​ 44 ​ President Huiping Yan ​ 58 ​ Chief Financial Officer Jianchang Lai ​ 54 ​ Vice President of Overseas Operations Jianfeng Zhang ​ 42 ​ Vice President of Public Relations * Pursuant to the investment agreement we entered into with Alibaba and Cainiao Network, Mr.
These rights vested immediately upon grant. C. Board Practices Our board of directors consists of ten directors. A director is not required to hold any shares in our company by way of qualification.
These rights vested immediately upon grant. 123 Table of Contents C. Board Practices Our board of directors consists of ten directors. A director is not required to hold any shares in our company by way of qualification.
Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis. * Less than 1% of our total outstanding ordinary shares. 128 Table of Contents ** Except for Messrs.
Our Class B ordinary shares are convertible at any time by the holder thereof into Class A ordinary shares on a one-for-one basis. * Less than 1% of our total outstanding ordinary shares. ** Except for Messrs.
Kao received a bachelor’s degree in computer science from Iowa State University in August 1995. 117 Table of Contents Ms. Fang Xie, also known as Heather Xie, has been our director since November 2021. Ms. Xie has been a director and portfolio investment manager at Seres Capital since May 2021. Ms.
Kao received a bachelor’s degree in computer science from Iowa State University in August 1995. Ms. Fang Xie, also known as Ms. Heather Xie, has been our director since November 2021. Ms. Xie has been a director and portfolio investment manager at Seres Capital since May 2021. Ms.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. ​ 119 Table of Contents Award Agreement.
The committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award grant. Award Agreement.
(an affiliate of Noah Holdings Limited (NYSE: NOAH)) from January 2018 to April 2021. Mr. Kao served as the chief technology officer at Vipshop (NYSE: VIPS) from June 2012 to October 2016. Before joining Vipshop, Mr. Kao was an employee of eBay Inc.
(an affiliate of Noah Holdings Limited (NYSE: NOAH; HKEX: 6686)) from January 2018 to April 2019. Mr. Kao served as the chief technology officer at Vipshop (NYSE: VIPS) from June 2012 to October 2016. Before joining Vipshop, Mr. Kao was an employee of eBay Inc.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; 125 Table of Contents ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register. 125 Table of Contents Terms of Directors and Officers Our directors are appointed by ordinary resolution of our shareholders.
We have been informed by our Cayman Islands legal counsel that the United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers, predicated upon the securities laws of the United States or any state in the United States.
We have been informed by our Cayman Islands legal counsel that the United States and the Cayman Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of U.S. courts in civil and commercial matters and that there is uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers, predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers, predicated upon the securities laws of the United States or any state in the United States, so far as the liabilities imposed by those provisions are penal in nature.
Wei received a master’s degree in business administration from Harvard Business School in June 2002 and a bachelor’s degree in science from the University of Texas at Austin in May 1995. Mr. Qin Charles Huang became our director in October 2016. Mr.
Wei received a master’s degree in business administration from Harvard Business School in June 2002 and a bachelor’s degree in science from the University of Texas at Austin in May 1995. Mr. Qin Charles Huang has been as our director since October 2016. Mr.
D. Employees As of December 31, 2021, 2022 and 2023, we had a total of 23,865, 24,888 and 23,554 employees, respectively.
D. Employees As of December 31, 2022, 2023 and 2024, we had a total of 24,888, 23,554 and 24,477 employees, respectively.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ Class A Class B ​ Percentage of Percentage of ​ ​ ordinary ​ ordinary ​ Total ordinary ​ total ordinary ​ aggregate ​ ​ shares ​ shares ​ shares ​ shares ​ voting power † Directors and Executive Officers:** ​ ​ ​ ​ ​ ​ Meisong Lai (1) ​ 5,573,685 ​ 206,100,000 ​ 211,673,685 ​ 26.0 ​ 77.7 Jilei Wang (2) ​ 42,208,065 ​ — 42,208,065 5.2 1.6 Hongqun Hu ​ * ​ — ​ * ​ * ​ * Xudong Chen ​ — ​ — — — — Xing Liu ​ * ​ — * * * Frank Zhen Wei ​ * ​ — * * * Qin Charles Huang ​ * ​ — * * * Herman Yu ​ * ​ — * * * Tsun-Ming (Daniel) Kao ​ * ​ — * * * Fang Xie ​ * ​ — ​ * ​ * ​ * Huiping Yan ​ * ​ — * * * Jianchang Lai ​ * ​ — * * * Jingxi Zhu ​ * ​ — * * * Jianfeng Zhang ​ * ​ — * * * All Directors and Executive Officers as a Group ​ 52,815,262 ​ 206,100,000 ​ 258,915,262 ​ 31.9 ​ 79.5 Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ Zto Lms Holding Limited (3) ​ 4,608,920 ​ 206,100,000 210,708,920 25.9 77.7 Alibaba Group Holding Limited (4) ​ 71,941,287 ​ — ​ 71,941,287 ​ 8.9 ​ 2.7 Jianfa Lai and Zto Ljf Holding Limited (5) ​ 65,252,639 ​ — 65,252,639 8.0 2.5 Zto Wjl Holding Limited (6) ​ 42,088,065 — 42,088,065 5.2 1.6 † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of our Class A ordinary shares and Class B ordinary shares as a single class.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ Class A Class B ​ Percentage of Percentage of ​ ​ ordinary ​ ordinary ​ Total ordinary ​ total ordinary ​ aggregate ​ ​ shares ​ shares ​ shares ​ shares ​ voting power † Directors and Executive Officers:** ​ ​ ​ ​ ​ ​ Meisong Lai (1) ​ 5,900,646 ​ 206,100,000 ​ 212,000,646 ​ 26.4 ​ 78.0 Jilei Wang (2) ​ 42,230,533 ​ — ​ 42,230,533 ​ 5.2 ​ 1.6 Hongqun Hu ​ * ​ — ​ * ​ * ​ * Xudong Chen ​ — ​ — ​ — ​ — ​ — Xing Liu ​ * ​ — ​ * ​ * ​ * Frank Zhen Wei ​ — ​ — ​ — ​ — ​ — Qin Charles Huang ​ * ​ — ​ * ​ * ​ * Herman Yu ​ * ​ — ​ * ​ * ​ * Tsun-Ming (Daniel) Kao ​ * ​ — ​ * ​ * ​ * Fang Xie ​ * ​ — ​ * ​ * ​ * Jingxi Zhu ​ * ​ — ​ * ​ * ​ * Huiping Yan ​ * ​ — ​ * ​ * ​ * Jianchang Lai ​ * ​ — ​ * ​ * ​ * Jianfeng Zhang ​ * ​ — ​ * ​ * ​ * All Directors and Executive Officers as a Group ​ 53,266,082 ​ 206,100,000 ​ 259,366,082 ​ 32.2 ​ 79.7 Principal Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Zto Lms Holding Limited (3) ​ 4,608,920 ​ 206,100,000 ​ 210,708,920 ​ 26.2 ​ 78.0 Alibaba Group Holding Limited (4) ​ 71,941,287 ​ — ​ 71,941,287 ​ 8.9 ​ 2.7 Jianfa Lai and Zto Ljf Holding Limited (5) ​ 63,252,639 ​ — ​ 63,252,639 ​ 7.9 ​ 2.4 Zto Wjl Holding Limited (6) ​ 42,088,065 ​ — ​ 42,088,065 ​ 5.2 ​ 1.6 † For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of our Class A ordinary shares and Class B ordinary shares as a single class.
In such case of termination by us, we will provide severance payments to the executive officer as agreed by us and the executive officer. The executive officer may resign at any time with a 60-day advance written notice.
We may also terminate an executive officer’s employment without cause upon 60-day advance written notice. In such case of termination by us, we will provide severance payments to the executive officer as agreed by us and the executive officer. The executive officer may resign at any time with a 60-day advance written notice.
Terms of Directors and Officers Our directors are appointed by ordinary resolution of our shareholders. The directors may, by the affirmative vote of a simple majority of the remaining directors present and voting at a board meeting, appoint any person as a director, to fill a casual vacancy on the board or as an addition to the existing board.
The directors may, by the affirmative vote of a simple majority of the remaining directors present and voting at a board meeting, appoint any person as a director, to fill a casual vacancy on the board or as an addition to the existing board.
Chen has been a Director for Strategic Investment at Alibaba Group since May 2023. From November 2019 to April 2023, Mr. Chen was a Director for Strategic Investment at Cainiao Network. From September 2013 to November 2019, Mr. Chen successively served as an associate, senior associate, vice president, and executive director for private equity investment at HOPU Investments.
From November 2019 to April 2023, Mr. Chen was a Director for Strategic Investment at Cainiao Network. From September 2013 to November 2019, Mr. Chen successively served as an associate, senior associate, vice president, and executive director for private equity investment at HOPU Investments. From July 2012 to August 2013, Mr.
ZTO ES abstains from voting on matters that require shareholders’ approval for all the shares of our company held by ZTO ES. As of March 31, 2024, we have awarded certain rights associated with 11,458,072 Class A ordinary shares through the platform as share incentives.
ZTO ES abstains from voting on matters that require shareholders’ approval for all the shares of our company held by ZTO ES. 122 Table of Contents As of March 31, 2025, we have awarded certain rights associated with 12,485,784 Class A ordinary shares through the platform as share incentives.
Zhang served as Assistant Director of the News & Information Center of Xinhua News Agency Shanghai Bureau from June 2012 to February 2016 and Deputy Director of the Image Center of Xinhua News Agency Shanghai Bureau from August 2010 to February 2016. Mr.
Jianfeng Zhang has served as our vice president of public relations since February 2016. Mr. Zhang served as assistant director of the News & Information Center of Xinhua News Agency Shanghai Bureau from June 2012 to February 2016 and deputy director of the Image Center of Xinhua News Agency Shanghai Bureau from August 2010 to February 2016. Mr.
Hu graduated from the advanced class in modern executive business administration from Zhejiang University in China in January 2006 and graduated from Ningbo University in China with a major in finance in July 2003. 116 Table of Contents Mr. Xudong Chen has been our director since June 2023. Mr.
Hu graduated from the advanced class in modern executive business administration from Zhejiang University in China in January 2006 and graduated from Ningbo University in China with a major in finance in July 2003. Mr. Xudong Chen has been our director since June 2023. Mr. Chen has been a Director for Strategic Investment at Alibaba Group since May 2023.
Lai was our director from January 2014 to September 2016 and our head of network partner management since our inception to September 2016. Mr. Jianchang Lai is a brother-in-law to Mr. Meisong Lai. Mr. Jingxi Zhu has been our head of information technology since July 2003 and has served as a vice president of information technology since September 2016.
Jianchang Lai has been our vice president of overseas operations since September 2016. Mr. Lai was our director from January 2014 to September 2016 and our head of network partner management since our inception to September 2016. Mr. Jianchang Lai is a brother-in-law to Mr. Meisong Lai. Mr.
To our knowledge, as of March 31, 2024, 136,095,789 (16.7%) of our ordinary shares in the form of ADSs were held by one record holder in the United States, which was JPMorgan Chase Bank, N.A., the depositary of our ADS program.
To our knowledge, as of March 31, 2025, 124,609,975 (15.5%) of our ordinary shares in the form of ADSs were held by one record holder in the United States, which was JPMorgan Chase Bank, N.A., the depositary of our ADS program.
(1) Represents (i) 206,100,000 Class B ordinary shares directly held by Zto Lms Holding Limited, (ii) 964,765 Class A ordinary shares held by ZTO ES and (iii) 4,608,920 ADSs (representing the same number of Class A ordinary shares) held by Zto Lms Holding Limited, 2,932,166 of which were vested from restricted share units held by Mr. Meisong Lai. Mr.
Xudong Chen is No. 618, Waima Road, Huangpu District, Shanghai, 200010, China. 128 Table of Contents (1) Represents (i) 206,100,000 Class B ordinary shares directly held by Zto Lms Holding Limited, (ii) 964,765 Class A ordinary shares held by ZTO ES, (iii) 4,608,920 ADSs (representing the same number of Class A ordinary shares) held by Zto Lms Holding Limited, 2,932,166 of which were vested from restricted share units held by Mr.
Compensation of Directors and Executive Officers For the year ended December 31, 2023, we paid an aggregate of approximately RMB100.3 million (US$14.1 million) in cash to our executive officers and directors.
Compensation of Directors and Executive Officers For the year ended December 31, 2024, we paid an aggregate of approximately RMB52.8 million (US$7.2 million) in cash to our executive officers and directors.
As of March 31, 2024, other employees as a group were granted the same rights associated with 9,665,221 Class A ordinary shares held by ZTO ES through our employee shareholding platform. 123 Table of Contents On March 22, 2024, we agreed to award rights associated with 1,205,483 Class A ordinary shares through the platform as share incentives to certain executive officers and employees.
As of March 31, 2025, other employees as a group were granted the same rights associated with 10,692,933 Class A ordinary shares held by ZTO ES through our employee shareholding platform. On March 21, 2025, we agreed to award rights associated with 1,027,712 Class A ordinary shares through the platform as share incentives to certain executive officers and employees.
Information regarding beneficial ownership is reported as of June 12, 2018, based on information contained in the Schedule 13D filed by Alibaba Group Holding Limited, among other reporting persons, with the SEC on June 21, 2018. 129 Table of Contents (5) Represents (i) 39,000,000 Class A ordinary shares held by Zto Ljf Holding Limited, among which, 32,250,000 Class A ordinary shares are recorded on our Cayman share register, and the remaining 6,750,000 Class A ordinary shares are recorded under the name of HKSCC Nominees Limited on our Hong Kong share register and are deposited into the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited, (ii) 6,000,000 ADSs registered in the name of Citibank, N.A., Singapore, underlying 6,000,000 Class A ordinary shares held by JPMorgan Chase Bank, N.A., as depositary bank, which Zto Ljf Holding Limited pledged to Citibank, N.A., Singapore, as lender under a loan agreement dated December 6, 2019, to secure Zto Ljf Holding Limited’s obligations under the loan agreement, (iii) 10,000,000 ADSs held by Zto Ljf Holding Limited, underlying 10,000,000 Class A ordinary shares held by JPMorgan Chase Bank, N.A., as depositary bank, pledged to Citibank, N.A., as counterparty under the share forward transaction pursuant to the Master Terms and Conditions for Prepaid Variable Share Forward Transactions dated June 6, 2022 and as amended by the Supplemental Confirmation dated June 8, 2023 and the Amended and Restated Supplemental Confirmation dated September 8, 2023 (and as may be further amended and supplemented from time to time, the “Forward Contract”), to secure Zto Ljf Holding Limited’s obligations under the Forward Contract, (iv) 10,219,041 Class A ordinary shares, in the form of ADSs, held by Zto Ljf Holding Limited, and (v) 33,598 Class A ordinary shares held by ZTO ES.
Information regarding beneficial ownership is reported as of June 12, 2018, based on information contained in the Schedule 13D filed by Alibaba Group Holding Limited, among other reporting persons, with the SEC on June 21, 2018. 129 Table of Contents (5) Represents (i) 39,000,000 Class A ordinary shares held by Zto Ljf Holding Limited, (ii) 6,000,000 ADSs registered in the name of Citibank, N.A., Singapore, the underlying Class A ordinary shares of which were pledged by Zto Ljf Holding Limited to Citibank, N.A., Singapore, as lender under a loan agreement dated December 6, 2019, to secure Zto Ljf Holding Limited’s obligations under the loan agreement, (iii) 10,000,000 ADSs held by Zto Ljf Holding Limited, the underlying shares of which were pledged to Citibank, N.A., as counterparty under the share forward transaction pursuant to a series of agreements (and as may be further amended and supplemented from time to time, the “Forward Contract”), to secure Zto Ljf Holding Limited’s obligations under the Forward Contract, (iv) 8,219,041 Class A ordinary shares, in the form of ADSs, held by Zto Ljf Holding Limited, and (v) 33,598 Class A ordinary shares held by ZTO ES.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2024 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our total outstanding shares.
Share Ownership The following table sets forth information with respect to the beneficial ownership of our ordinary shares as of March 31, 2025 by: ● each of our directors and executive officers; and ● each person known to us to own beneficially more than 5% of our total outstanding shares. 127 Table of Contents We had 598,368,490 Class A ordinary shares, and 206,100,000 Class B ordinary shares, issued and outstanding as of March 31, 2025.
Zhang received a master’s degree in business administration from Arizona State University in December 2017, a master’s degree in arts from Renmin University in China in June 2012 and a bachelor’s degree in law from Shanghai International Studies University in China in July 2006.
Zhang received a master’s degree in business administration from Arizona State University in December 2017, a master’s degree in arts from Renmin University in China in June 2012 and a bachelor’s degree in law from Shanghai International Studies University in July 2006. Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers.
Awards may not be transferred in any manner by the recipient other than by will or the laws of descent and distribution, except as otherwise provided by the plan administrator. Termination and amendment of the 2016 Plan. Unless terminated earlier, the 2016 Plan has a term of ten years.
Awards may not be transferred in any manner by the recipient other than by will or the laws of descent and distribution, except as otherwise provided by the plan administrator. In August 2024, our board of directors terminated the 2016 Plan.
The non-compete restricted period typically expires two years after the termination of employment, and we agree to compensate the key employee with a certain percentage of his or her pre-departure salary during the restricted period.
The non-compete restricted period typically expires two years after the termination of employment, and we agree to compensate the key employee with a certain percentage of his or her pre-departure salary during the restricted period. We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. E.
As of March 31, 2024, options representing a total of 916,200 Class A ordinary shares have been granted under the 2024 plan. The following table summarizes, as of March 31, 2024, the options we granted to our directors and executive officers under our 2024 Plan.
The following table summarizes, as of March 31, 2025, the options we granted to our directors and executive officers under our 2024 Plan.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer’s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets. 118 Table of Contents In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and typically for one year following the last date of employment.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer’s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.
We may terminate employment for cause for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. We may also terminate an executive officer’s employment without cause upon 60-day advance written notice.
Under these agreements, each of our executive officers is employed for a specified time period. We may terminate employment for cause for certain acts of the executive officer, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent or dishonest acts to our detriment, or misconduct or a failure to perform agreed duties.
Frank Zhen Wei is Suite 6703, Two IFC, 8 Finance Street, Hong Kong. The business address of Mr. Xudong Chen is No. 618, Waima Road, Huangpu District, Shanghai, 200010, China.
Frank Zhen Wei is Suite 6703, Two IFC, 8 Finance Street, Hong Kong. The business address of Mr.
Other individuals as a group were granted options representing a total of 352,200 Class A ordinary shares as of March 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ Exercise ​ ​ ​ Date ​ ​ Options ​ price ​ ​ ​ of Name ​ Awarded ​ (US$/Share) ​ Date of Grant ​ Expiration Meisong Lai * 21.88 ​ March 22, 2024 ​ March 22, 2034 Jilei Wang * 21.88 ​ March 22, 2024 ​ March 22, 2034 Hongqun Hu * 21.88 ​ March 22, 2024 ​ March 22, 2034 Huiping Yan * 21.88 ​ March 22, 2024 ​ March 22, 2034 Jianchang Lai * 21.88 ​ March 22, 2024 ​ March 22, 2034 Jingxi Zhu * 21.88 ​ March 22, 2024 ​ March 22, 2034 Jianfeng Zhang * 21.88 ​ March 22, 2024 ​ March 22, 2034 Total 564,000 ​ ​ * Less than 1% of our total outstanding shares. 122 Table of Contents Employee Shareholding Platform In June 2016, we issued 16,000,000 ordinary shares to Zto Es Holding Limited, or ZTO ES, to establish an employee shareholding platform to allow our employees in China to receive share incentives.
Other individuals as a group were granted options representing a total of 352,200 Class A ordinary shares under the 2024 Plan. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ Exercise ​ ​ ​ Date ​ ​ Awards ​ price ​ ​ ​ of Name ​ Awarded ​ (US$/Share) ​ Date of Grant ​ Expiration Meisong Lai * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Jilei Wang * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Hongqun Hu * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Jingxi Zhu * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Huiping Yan * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Jianchang Lai * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Jianfeng Zhang * ​ 21.88 ​ March 22, 2024 ​ March 22, 2034 Total 564,000 ​ ​ ​ ​ ​ ​ * Less than 1% of our total outstanding shares. 121 Table of Contents The following table summarizes, as of March 31, 2025, the restricted share units we granted to our directors and executive officers under our 2024 Plan.
From January 2014 to September 2016, Mr. Zhu was also our director. Mr. Zhu received an EMBA from Renmin University of China in 2021. Mr. Jianfeng Zhang has served as our vice president of public relations since February 2016. Mr.
He served as a vice president of information technology from September 2016 to May 2024. From January 2014 to September 2016, Mr. Zhu was also our director. Mr. Zhu received an EMBA from Renmin University of China in 2021. 117 Table of Contents Ms.
Any director so appointed shall hold office only until the first annual general meeting of our company after his or her appointment and shall then be eligible for re-election at that meeting. Every director, including those appointed for a specific term, should be subject to retirement by rotation at least once every three years.
Any director so appointed shall hold office only until the first annual general meeting of our company after his or her appointment and shall then be eligible for re-election at that meeting. Our officers are elected by and serve at the discretion of the board of directors.
Lai is a prominent figure in China’s express delivery industry and has been deeply involved in the industry for over 20 years. Mr. Lai has attended the “Lakeside University” in China, a senior executive training program founded by Jack Ma, founder and then chairman of Alibaba. Mr. Meisong Lai is a brother-in-law to Mr. Jianchang Lai. Mr.
Lai is a prominent figure in China’s express delivery industry and has been deeply involved in the industry for over 20 years. Mr. Lai studied at the “Lakeside University” and Tsinghua University PBC School of Finance. Mr. Meisong Lai is a brother-in-law to Mr. Jianchang Lai. Mr.
Mr. Jilei Wang is the sole director of Zto Wjl Holding Limited. Mr. Jilei Wang has the power to direct the disposition of those 120,000 Class A ordinary shares held by ZTO ES.
Jilei Wang may purchase upon exercise of options within 60 days as of March 31, 2025, and (v) 15,538 vested restricted share units. Mr. Jilei Wang is the sole director of Zto Wjl Holding Limited. Mr. Jilei Wang has the power to direct the disposition of those 120,000 Class A ordinary shares held by ZTO ES.
Xie received a master’s degree in economics from Cornell University in 1994 and a bachelor and a master degree in industrial economy from Renmin University of China in 1986 and 1989, respectively. Ms. Huiping Yan has served as our chief financial officer since May 2018 and was our vice president of finance from January 2018 to May 2018.
Xie received a master’s degree in economics from Cornell University in 1994 and a bachelor and a master degree in industrial economy from Renmin University of China in 1986 and 1989, respectively. Mr. Jingxi Zhu has served as our president since May 2024 and has been our head of information technology since July 2003.
(HKEX: 9690), a leading integrated online and offline platform for automotive service in China since September 2023. Ms. Yan studied at Shanghai International Studies University, where she majored in English literature and linguistics and received a bachelor’s degree in business administration with an accounting major from Hawaii Pacific University in August 1991. Ms.
Yan studied at Shanghai International Studies University, where she majored in English literature and linguistics, and received a bachelor’s degree in business administration with an accounting major from Hawaii Pacific University in August 1991. Ms. Yan graduated from the GE experienced financial leadership program in September 2003 and is a U.S.-certified public accountant (AICPA) with a CGMA designation. Mr.
(6) Represents (i) 35,635,000 Class A ordinary shares held by Zto Wjl Holding Limited, (ii) 5,200,000 restricted ADSs held by JPMorgan Chase Bank, N.A., as depositary bank, underlying 5,200,000 Class A ordinary shares held by Zto Wjl Holding Limited pledged to Morgan Stanley Bank Asia Limited, as lender under a loan agreement dated December 19, 2019, to secure Zto Wjl Holding Limited’s obligations under the loan agreement, and (iii) 1,253,065 Class A ordinary shares, in the form of ADSs, held by Zto Wjl Holding Limited, among which 974,236 are restricted ADSs.
(6) Represents (i) 40,835,000 Class A ordinary shares held by Zto Wjl Holding Limited, and (ii) 1,253,065 Class A ordinary shares, in the form of ADSs, held by Zto Wjl Holding Limited, among which 974,236 are restricted ADSs.
(2) Represents (i) 35,635,000 Class A ordinary shares held by Zto Wjl Holding Limited, (ii) 5,200,000 restricted ADSs held by JPMorgan Chase Bank, N.A., as depositary bank, underlying 5,200,000 Class A ordinary shares held by Zto Wjl Holding Limited pledged to Morgan Stanley Bank Asia Limited, as lender under a loan agreement dated December 19, 2019, to secure Zto Wjl Holding Limited’s obligations under the loan agreement, (iii) 1,253,065 Class A ordinary shares, in the form of ADSs, held by Zto Wjl Holding Limited, among which 974,236 are restricted ADSs, and (iv) 120,000 Class A ordinary shares held by ZTO ES.
(2) Represents (i) 40,835,000 Class A ordinary shares held by Zto Wjl Holding Limited, (ii) 1,253,065 Class A ordinary shares, in the form of ADSs, held by Zto Wjl Holding Limited, among which 974,236 are restricted ADSs, (iii) 120,000 Class A ordinary shares held by ZTO ES, and 6,930 Class A ordinary shares that Mr.
Meisong Lai has the power to direct the disposition of those 964,765 Class A ordinary shares held by ZTO ES.
Meisong Lai, (iv) 148,500 Class A ordinary shares that Mr. Meisong Lai may purchase upon exercise of options within 60 days as of March 31, 2025, and (v) 178,461 vested restricted share units. Mr. Meisong Lai has the power to direct the disposition of those 964,765 Class A ordinary shares held by ZTO ES.
We did not include 8,700,914 Class A ordinary shares held by ZTO ES for the purpose of our employee shareholding platform and 2,256,634 Class A ordinary shares held by the trustee in connection with the trust for the 2016 Plan in the calculation of voting power as ZTO ES and the trustee shall abstain from voting on matters that require shareholders’ approval for all the shares of our company held by them following our voluntary conversion to a dual-primary listed company on the Hong Kong Stock Exchange.
We did not include 7,788,555 Class A ordinary shares held by ZTO ES for the purpose of our employee shareholding platform and 1,801,637 Class A ordinary shares held by the trustee in connection with the trust for the 2024 Plan in the calculation of voting power.
Frank Zhen Wei, has been our director since August 2015. Mr. Wei joined Warburg Pincus Asia LLC in November 2002, and has been serving as a managing director since January 2010. Mr. Wei is currently Managing Director at Warburg Pincus China and leads overall strategy and investment. Mr.
Frank Zhen Wei , has been our director since August 2015. Mr. Wei worked at Warburg Pincus during 2002 to 2024. He was a managing director since 2010, and led the firm’s private equity business in China during 2016 to 2023. Mr.
We had 606,766,663 Class A ordinary shares, and 206,100,000 Class B ordinary shares, issued and outstanding as of March 31, 2024. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Our network partners hire their own employees according to their operational needs. We believe we offer our employees competitive compensation packages and a merit-based work environment that encourages initiative, and as a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
The following table sets forth the breakdown of our own employees as of December 31, 2024 by function: ​ ​ ​ ​ ​ Functional Area Number of Employees % of Total Sorting 7,525 ​ 30.8 Transportation 3,475 ​ 14.2 Management and Administration 4,827 ​ 19.7 Operation Support & Customer Service 7,154 ​ 29.2 Technology and Engineering 1,084 ​ 4.4 Sales and Marketing 412 ​ 1.7 Total 24,477 ​ 100.0 ​ We believe we offer our employees competitive compensation packages and a merit-based work environment that encourages initiative, and as a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team.
Removed
Yan graduated from the GE experienced financial leadership program in September 2003 and is a U.S.-certified public accountant with a CGMA designation (AICPA). Mr. Jianchang Lai has been our vice president of overseas operations since September 2016. Mr.
Added
Huiping Yan has served as our chief financial officer since May 2018 and was our vice president of finance from January 2018 to May 2018. Before joining ZTO, Ms.
Removed
Employment Agreements and Indemnification Agreements We have entered into employment agreements with each of our executive officers. Under these agreements, each of our executive officers is employed for a specified time period.
Added
(HKEX: 9690), a leading integrated online and offline platform for automotive service in China since September 2023. Ms. Yan has served as an independent non-executive director of WeRide Inc. (Nasdaq: WRD), an autonomous driving technology company since October 2024. Ms.
Removed
Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any material way any awards previously granted unless agreed by the recipient.
Added
In addition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of his or her employment and typically for one year following the last date of employment.
Removed
Our officers are elected by and serve at the discretion of the board of directors.
Added
As of March 31, 2025, options representing a total of 916,200 Class A ordinary shares were granted under the 2024 Plan, and restricted share units representing a total of 454,997 Class A ordinary shares were granted under the 2024 Plan.
Removed
The following table sets forth the breakdown of our own employees as of December 31, 2023 by function: ​ ​ ​ ​ ​ Functional Area Number of Employees % of Total Sorting 7,857 33.4 Transportation 3,612 15.3 Management and Administration 4,386 18.6 Customer Service 2,001 8.5 Operation Support 3,958 16.8 Technology and Engineering 1,383 5.9 Sales and Marketing 357 1.5 Total 23,554 100.0 ​ In addition to our employees, our workforce also includes over 63,000 outsourced workers, as of December 31, 2023.
Added
Other individuals as a group were granted restricted share units representing a total of 188,418 Class A ordinary shares under the 2024 Plan. ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ Shares ​ ​ ​ ​ Underlying ​ ​ ​ ​ Awards ​ ​ Name Awarded Date of Grant Meisong Lai * ​ March 21, 2025 Jilei Wang * ​ March 21, 2025 Hongqun Hu * ​ March 21, 2025 Jingxi Zhu * ​ March 21, 2025 Huiping Yan * ​ March 21, 2025 Jianchang Lai * ​ March 21, 2025 Jianfeng Zhang * ​ March 21, 2025 Total 266,579 ​ * Less than 1% of our total outstanding shares.
Removed
We believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes. 127 Table of Contents E.
Added
Employee Shareholding Platform In June 2016, we issued 16,000,000 ordinary shares to Zto Es Holding Limited, or ZTO ES, to establish an employee shareholding platform to allow our employees in China to receive share incentives.
Added
In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.
Added
A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

17 edited+3 added−3 removed22 unchanged
Biggest changeAs of December 31, 2023, we had approximately RMB15.0 million (US$2.1 million) of accounts due to ZTO Yun Leng and RMB1.2 million (US$0.2 million) due from ZTO Yun Leng. ZTO Cloud Warehouse. ZTO Cloud Warehouse Technology Co., Ltd., or ZTO Cloud Warehouse, was held as to approximately 16.36% by us as of December 31, 2023.
Biggest changeWe incurred approximately RMB56.3 million, RMB119.0 million and RMB141.8 million (US$19.4 million) of transportation service fees to ZTO Yun Leng in 2022, 2023 and 2024, respectively. As of December 31, 2024, we had approximately RMB16.7 million (US$2.3 million) of accounts due to ZTO Yun Leng and RMB1.2million (US$0.2 million) due from ZTO Yun Leng. ZTO Cloud Warehouse.
ZTO LTL is our investee. In 2017, 2018 and 2020, we increased our investment in ZTO LTL by RMB256.4 million in aggregate. In December 2021, we invested US$52,102 (approximate to RMB331,807) in cash to maintain our equity interest in ZTO LTL at 17.3%.
In 2017, 2018 and 2020, we increased our investment in ZTO LTL by RMB256.4 million in aggregate. In December 2021, we invested US$52,102 (approximate to RMB331,807) in cash to maintain our equity interest in ZTO LTL at 17.3%.
A prospectus supplement covering such resale was filed on December 30, 2020. The registration rights agreement contains customary indemnification provisions. Registration Rights Agreement with NRF In connection with the investment by Alibaba and Cainiao Network, we entered into a registration rights agreement, dated as of June 28, 2018, with NRF. NRSF owns 100% of NRF.
A prospectus supplement covering such resale was filed on December 30, 2020. The registration rights agreement contains customary indemnification provisions. 131 Table of Contents Registration Rights Agreement with NRF In connection with the investment by Alibaba and Cainiao Network, we entered into a registration rights agreement, dated as of June 28, 2018, with NRF. NRSF owns 100% of NRF.
We are not obligated to effect more than two demand registrations, other than demand registration to be effected pursuant to registration statement on Form F-3, for which an unlimited number of demand registrations shall be permitted. Piggyback Registration Rights.
We are not obligated to effect more than two demand registrations, other than demand registration to be effected pursuant to registration statement on Form F-3, for which an unlimited number of demand registrations shall be permitted. 130 Table of Contents Piggyback Registration Rights.
Lai is not permitted to transfer any Class B ordinary shares beneficially owned by him without the prior written consent of Ali ZT prior to the second anniversary of the date of the investor rights agreement. 131 Table of Contents Additional Agreements.
Lai is not permitted to transfer any Class B ordinary shares beneficially owned by him without the prior written consent of Ali ZT prior to the second anniversary of the date of the investor rights agreement. Additional Agreements.
Pursuant to this shareholders agreement, we have granted certain registration rights to our shareholders. Set forth below is a description of the registration rights granted under the agreement. 130 Table of Contents Demand Registration Rights.
Pursuant to this shareholders agreement, we have granted certain registration rights to our shareholders. Set forth below is a description of the registration rights granted under the agreement. Demand Registration Rights.
Compensation of Directors and Executive Officers—Employee Shareholding Platform.” Other Transactions with Related Parties Shanghai Mingyu . Shanghai Mingyu Barcode Technology Ltd. is controlled by our chairman’s brother. We incurred approximately RMB235.8 million, RMB237.3 million and RMB330.2 million (US$46.5 million) for purchases of supplies from this company in 2021, 2022 and 2023, respectively.
Compensation of Directors and Executive Officers—Employee Shareholding Platform.” Other Transactions with Related Parties Shanghai Mingyu . Shanghai Mingyu Barcode Technology Ltd. is controlled by our chairman’s brother. We incurred approximately RMB237.3 million, RMB330.2 million and RMB360.3 million (US$49.4 million) for purchases of supplies from this company in 2022, 2023 and 2024, respectively.
We generated RMB0.1 million and RMB1.8 million (US$0.3 million) of interest income from ZTO Cloud Warehouse in 2022 and 2023, respectively. As of December 31, 2023, we had amount due from ZTO Cloud Warehouse of RMB72.4 million (US$10.2 million) and RMB16.4 million (US$2.3 million) due to ZTO Cloud Warehouse. C. Interests of Experts and Counsel Not applicable. ​
We generated RMB0.1 million, RMB1.8 million and RMB2.1 million (US$0.3 million) of interest income from ZTO Cloud Warehouse in 2022, 2023 and 2024, respectively. As of December 31, 2024, we had RMB71.4 million (US$9.8 million) due from ZTO Cloud Warehouse and RMB12.7 million (US$1.7 million) due to ZTO Cloud Warehouse. C. Interests of Experts and Counsel Not applicable. ​
As of December 31, 2023, we had approximately RMB28.9 million (US$4.1 million) due to this company. 132 Table of Contents ZTO LTL . In November 2016, we invested RMB54.0 million in ZTO Supply Chain Management Co., Ltd., or ZTO LTL, for 18% equity interest. ZTO LTL is engaged in provision of less-than-truckload transportation services in China.
As of December 31, 2024, we had approximately RMB37.3 million (US$5.1 million) due to this company. ZTO LTL . In November 2016, we invested RMB54.0 million in ZTO Supply Chain Management Co., Ltd., or ZTO LTL, for 18% equity interest. ZTO LTL is engaged in provision of less-than-truckload transportation services in China. ZTO LTL is our investee.
We provided some factoring loans to ZTO Cloud Warehouse and its subsidiaries in 2022 and 2023. The balance of the loans was RMB12.5 million and RMB33.0 million (US$4.6 million) as of December 31, 2022 and 2023, respectively. All of the loans were within one year and with a 7.0% annualized interest rate.
We provided some factoring loans to ZTO Cloud Warehouse and its subsidiaries in 2022, 2023 and 2024. The balance of the loans was RMB12.5 million, RMB33.0 million and RMB29.0 million (US$4.0 million) as of December 31, 2022, 2023 and 2024, respectively. All of the loans were within three-month and had an annualized interest rate ranging from 6.3% to 7.0%.
We incurred approximately RMB56.6 million, RMB459.0 million and RMB862.9 million (US$121.5 million) of transportation service fees to ZTO LTL and derived approximately RMB29.7 million, RMB45.9 million and RMB45.9 million (US$6.5 million) of property leasing income from ZTO LTL in 2021, 2022 and 2023, respectively.
We incurred approximately RMB459.0 million, RMB862.9 million and RMB745.2 million (US$102.1 million) of transportation service fees to ZTO LTL and derived approximately RMB45.9 million, RMB45.9 million and RMB45.3 million (US$6.2 million) of property leasing income from ZTO LTL in 2022, 2023 and 2024, respectively.
We generated approximately RMB68.7 million, RMB291.6 million and RMB274.3 million (US$38.6 million) of express delivery service revenue from ZTO Cloud Warehouse and derived approximately RMB33.4 million, RMB53.1 million and RMB64.7 million (US$9.1 million) of property leasing income from ZTO Cloud Warehouse in 2021, 2022 and 2023, respectively.
We generated approximately RMB291.6 million, RMB274.3 million and RMB203.1 million (US$27.8 million) of express delivery service revenue from ZTO Cloud Warehouse and derived approximately RMB53.1 million, RMB64.7 million and RMB76.5million (US$10.5 million) of property leasing income from ZTO Cloud Warehouse in 2022, 2023 and 2024, respectively.
We provided some factoring loans to ZTO LTL and subsidiaries in 2022 and 2023. The balance of the loans was RMB110.0 million and RMB66.9 million (US$9.4 million) as of December 31, 2022 and 2023, respectively.
We provided some factoring loans to ZTO LTL and subsidiaries in 2022, 2023 and 2024. The balance of the loans was RMB110.0 million and RMB66.9 million and RMB30.4 million (US$4.2 million) as of December 31, 2022, 2023 and 2024, respectively. All of the loans were within three-month and had an annualized interest rate ranging from 6.3% to 7.0%.
ZTO Cloud Warehouse are primarily engaged in the provision of one-stop warehouse solutions including warehouse storage, warehouse management and express delivery services in China.
ZTO Cloud Warehouse Technology Co., Ltd., or ZTO Cloud Warehouse, was held as to approximately 16.36% by us as of December 31, 2024. ZTO Cloud Warehouse are primarily engaged in the provision of one-stop warehouse solutions including warehouse storage, warehouse management and express delivery services in China.
In December 2021, we sold our 100% equity interests in Zhejiang Xinglian Air Cargo Co., Ltd. to Zhongtong Yunleng at a cash consideration of RMB177.3 million. We incurred approximately RMB5.9 million, RMB56.3 million and RMB119.0 million (US$16.8 million) of transportation service fees to ZTO Yun Leng in 2021, 2022 and 2023, respectively.
In 2021, we invested RMB80.0 million in ZTO Yun Leng Network Technology (Zhejiang) Co., Ltd., or ZTO Yunleng, for 18% equity interests in it. In December 2021, we sold our 100% equity interests in Zhejiang Xinglian Air Cargo Co., Ltd. to Zhongtong Yunleng at a cash consideration of RMB177.3 million.
Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd, or Zhongkuai Future City, is controlled by our chairman and chief executive officer. In 2020, we provided a three-year loan with a principal amount of RMB500.0 million with a 7.2% annualized interest rate to Zhongkuai Future City.
In 2020, we provided a three-year loan with a principal amount of RMB500.0 million with a 7.2% annualized interest rate to Zhongkuai Future City. On December 1, 2023, our company (through an indirect wholly-owned subsidiary), Zhongkuai Future City, and Mr.
All of the loans were within one year and with a 7.0% annualized interest rate.We generated RMB3.5 million (US$0.5 million) of interest income from ZTO LTL in 2023. As of December 31, 2023, we had amount due from ZTO LTL of RMB69.9 million (US$9.8 million) and RMB149.5 million (US$21.1 million) due to ZTO LTL. Zhongkuai Future City .
ZTO Express paid RMB53.8 million (US$7.4 million) in December 2024 and the remaining 125.9 million (US$17.3 million) in January 2025 to Zhongkuai Future City. As of December 31, 2023 and 2024, we had amounts due from Zhongkuai Future City of RMB502.1 million and RMB475.5 million (US$65.1 million), respectively. ZTO Yun Leng.
Removed
On December 1, 2023, our company (through an indirect wholly-owned subsidiary), Zhongkuai Future City, and Mr.
Added
As of December 31, 2024, we had amount due from ZTO LTL of RMB32.1 million (US$4.4 million) and RMB118.9 million (US$16.3 million) due to ZTO LTL. 132 Table of Contents Zhongkuai Future City . Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd, or Zhongkuai Future City, is controlled by our chairman and chief executive officer.
Removed
We generated RMB33.0 million (US$4.7 million) of interest income from Zhongkuai Future City in 2023. As of December 31, 2023, we had amounts due from Zhongkuai Future City of RMB502.1 million (US$70.7 million). Transaction with an executive officer. Mr. Jianchang Lai is a vice president of our company.
Added
We generated RMB33.0 million and RMB23.4 million (US$3.2 million) of interest income from Zhongkuai Future City in 2023 and 2024, respectively.
Removed
In 2021, we acquired 20.77% equity interests each in two subsidiaries from Mr. Lai at a total cash consideration of RMB103.7 million. ZTO Yun Leng. In 2021, we invested RMB80.0 million in ZTO Yun Leng Network Technology (Zhejiang) Co., Ltd., or ZTO Yunleng, for 18% equity interests in it.
Added
On November 29, 2024, ZTO Express entered into a property purchase agreement with Zhongkuai Future City, pursuant to which ZTO Express agreed to purchase, and Zhongkuai Future City agreed to sell, the properties with a total construction floor area of 22,465.17 square meters at the aggregate consideration of RMB179.7 milliion (US$24.6 million).

Other ZTO 10-K year-over-year comparisons