Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Entity Registrant Name | ZTO Express (Cayman) Inc. |
Entity Central Index Key | 0001677250 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2018 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Emerging Growth Company | false |
Entity Filer Category | Large Accelerated Filer |
Entity Shell Company | false |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 579,363,859 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 206,100,000 |
Ordinary shares | |
Entity Common Stock, Shares Outstanding | 785,463,859 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Current assets: | |||
Cash and cash equivalents | $ 672,323 | ¥ 4,622,554 | ¥ 5,425,024 |
Restricted cash | 58 | 400 | 348,710 |
Accounts receivable, net of allowance for doubtful accounts of RMB13,798 and RMB13,996 at December 31, 2017 and 2018, respectively | 86,829 | 596,995 | 287,835 |
Financing receivables, net of allowance for doubtful accounts of nil and RMB4,139 at December 31, 2017 and 2018, respectively | 75,339 | 517,983 | 64,030 |
Short-term investment | 1,978,017 | 13,599,852 | 5,224,559 |
Inventories | 6,372 | 43,813 | 34,231 |
Advances to suppliers | 49,142 | 337,874 | 263,574 |
Prepayments and other current assets | 219,329 | 1,507,996 | 719,983 |
Amounts due from related parties | 960 | 6,600 | 9,900 |
Total current assets | 3,088,369 | 21,234,067 | 12,377,846 |
Investments in equity investees | 321,054 | 2,207,410 | 610,160 |
Property and equipment, net | 1,314,190 | 9,035,704 | 6,473,010 |
Land use rights, net | 286,405 | 1,969,176 | 1,602,908 |
Intangible assets, net | 7,887 | 54,227 | 60,424 |
Goodwill | 616,907 | 4,241,541 | 4,241,541 |
Deferred tax assets | 46,260 | 318,063 | 152,763 |
Other non-current assets | 90,563 | 622,669 | 308,986 |
TOTAL ASSETS | 5,771,635 | 39,682,857 | 25,827,638 |
Current liabilities (including amounts of the consolidated VIE without recourse to ZTO Express (Cayman) Inc. See Note 2(b)) | |||
Short-term bank borrowing | 250,000 | ||
Accounts payable | 190,794 | 1,311,807 | 889,139 |
Advances from customers | 63,517 | 436,710 | 258,965 |
Income tax payable | 59,004 | 405,683 | 221,926 |
Amounts due to related parties | 19,230 | 132,216 | 114,913 |
Acquisition consideration payable, current | 2,848 | 19,581 | 130,004 |
Dividends payable | 247 | 1,699 | |
Other current liabilities | 412,157 | 2,833,769 | 2,281,067 |
Total current liabilities | 747,797 | 5,141,465 | 4,146,014 |
Deferred tax liabilities | 22,971 | 157,940 | 157,320 |
Acquisition consideration payable, non-current | 3,337 | 22,942 | 22,942 |
Other non-current liabilities | 13,231 | 90,961 | 60,045 |
TOTAL LIABILITIES | 787,336 | 5,413,308 | 4,386,321 |
Commitments and contingencies (Note 17) | |||
Shareholders' equity | |||
Ordinary shares (US$0.0001 par value; 10,000,000,000 ordinary shares authorized as of December 31, 2017 and 2018; 525,306,440 Class A ordinary shares issued and 504,704,716 Class A ordinary shares outstanding as of December 31, 2017; 605,167,551 Class A ordinary shares issued and 579,363,859 Class A ordinary shares outstanding as of December 31, 2018; 206,100,000 Class B ordinary shares issued and outstanding as of December 31, 2017 and 2018) | 76 | 523 | 471 |
Additional paid-in capital | 3,510,680 | 24,137,681 | 15,975,979 |
Treasury shares, at cost | (224,722) | (1,545,077) | (914,611) |
Retained earnings | 1,607,504 | 11,052,395 | 6,669,370 |
Accumulated other comprehensive income/(loss) | 83,153 | 571,716 | (295,896) |
ZTO Express (Cayman) Inc. shareholders' equity | 4,976,691 | 34,217,238 | 21,435,313 |
Noncontrolling interests | 7,608 | 52,311 | 6,004 |
Total Equity | 4,984,299 | 34,269,549 | 21,441,317 |
TOTAL LIABILITIES AND EQUITY | $ 5,771,635 | ¥ 39,682,857 | ¥ 25,827,638 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥)shares |
Accounts receivable, allowance for doubtful accounts | ¥ | ¥ 13,996 | ¥ 13,798 |
Financing receivables, allowance for doubtful accounts | ¥ | ¥ 4,139 | ¥ 0 |
Ordinary shares, share authorized | 10,000,000,000 | 10,000,000,000 |
Class A ordinary shares | ||
Ordinary shares, shares issued | 605,167,551 | 525,306,440 |
Ordinary shares, shares outstanding | 579,363,859 | 504,704,716 |
Class B ordinary shares | ||
Ordinary shares, shares issued | 206,100,000 | 206,100,000 |
Ordinary shares, shares outstanding | 206,100,000 | 206,100,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Revenues | $ 2,560,461 | ¥ 17,604,451 | ¥ 13,060,073 | ¥ 9,788,768 |
Cost of revenues (including related party cost of revenues of RMB954,861, RMB887,900 and RMB677,831 for the years ended December 31, 2016, 2017 and 2018, respectively) | (1,780,171) | (12,239,568) | (8,714,489) | (6,345,899) |
Gross profit | 780,290 | 5,364,883 | 4,345,584 | 3,442,869 |
Operating income (expenses) | ||||
Selling, general and administrative | (176,091) | (1,210,717) | (780,517) | (705,995) |
Other operating income, net | (25,897) | (178,057) | (183,368) | (32,104) |
Total operating expenses | (150,194) | (1,032,660) | (597,149) | (673,891) |
Income from operations | 630,096 | 4,332,223 | 3,748,435 | 2,768,978 |
Other income (expenses) | ||||
Interest income | 58,347 | 401,162 | 166,325 | 44,791 |
Interest expense | (113) | (780) | (15,668) | (12,986) |
Gain on deemed disposal of equity method investments | 9,551 | |||
Gain on disposal of equity investees and subsidiary | 81,832 | 562,637 | ||
Impairment of investment in equity investee | 0 | (30,000) | 0 | |
Foreign currency exchange gain/(loss) | 5,991 | 41,189 | (48,149) | 9,977 |
Income before income tax and share of profit (loss) in equity method investments | 776,153 | 5,336,431 | 3,820,943 | 2,820,311 |
Income tax expense | (135,137) | (929,133) | (646,361) | (731,987) |
Share of loss in equity method investments, net of tax of nil | (2,820) | (19,386) | (15,682) | (36,721) |
Net income | 638,196 | 4,387,912 | 3,158,900 | 2,051,603 |
Net loss/(income) attributable to noncontrolling interests | (711) | (4,887) | 763 | 2,252 |
Net income | 637,485 | 4,383,025 | 3,159,663 | 2,053,855 |
Change in redemption value of convertible redeemable preferred shares | (133,568) | |||
Net income attributable to ordinary shareholders | $ 637,485 | ¥ 4,383,025 | ¥ 3,159,663 | ¥ 1,920,287 |
Net earnings per share attributable to ordinary shareholders: | ||||
Basic | (per share) | $ 0.85 | ¥ 5.83 | ¥ 4.41 | ¥ 2.91 |
Diluted | (per share) | $ 0.85 | ¥ 5.82 | ¥ 4.40 | ¥ 2.91 |
Weighted average shares used in calculating net earnings per ordinary share: | ||||
Basic | shares | 751,814,077 | 751,814,077 | 717,138,526 | 634,581,307 |
Diluted | shares | 752,672,956 | 752,672,956 | 717,599,562 | 634,581,307 |
Other comprehensive income (loss), net of tax of nil | ||||
Foreign currency translation adjustment | $ 126,189 | ¥ 867,612 | ¥ (590,545) | ¥ 308,398 |
Comprehensive income | 764,385 | 5,255,524 | 2,568,355 | 2,360,001 |
Comprehensive income/(loss) attributable to noncontrolling interests | (711) | (4,887) | 763 | 2,252 |
Comprehensive income attributable to ZTO Express (Cayman) Inc. | $ 763,674 | ¥ 5,250,637 | ¥ 2,569,118 | ¥ 2,362,253 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Related party cost of revenue | ¥ 677,831 | ¥ 887,900 | ¥ 954,861 |
Share of loss in equity method investments, tax | 0 | 0 | 0 |
Other comprehensive income/(loss), tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | IPOParent CompanyCNY (¥) | IPOOrdinary sharesCNY (¥)shares | IPOAdditional paid-in capitalCNY (¥) | IPOCNY (¥) | Parent CompanyCNY (¥) | Ordinary sharesCNY (¥)shares | Additional paid-in capitalCNY (¥) | Treasury shares, at costCNY (¥) | Retained earningsCNY (¥) | Accumulated other comprehensive income/(loss)CNY (¥) | Noncontrolling interestsCNY (¥) | USD ($) | CNY (¥) |
Balance at beginning of the period at Dec. 31, 2015 | ¥ 5,857,382 | ¥ 390 | ¥ 4,281,321 | ¥ 1,589,420 | ¥ (13,749) | ¥ 11,984 | ¥ 5,869,366 | ||||||
Shares outstanding, beginning of the period at Dec. 31, 2015 | shares | 600,000,000 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income (loss) | 2,053,855 | 2,053,855 | (2,252) | 2,051,603 | |||||||||
Foreign currency translation adjustments | 308,398 | 308,398 | 308,398 | ||||||||||
Ordinary shares consideration for business acquisitions | 30,066 | ¥ 9 | 30,057 | 30,066 | |||||||||
Ordinary shares consideration for business acquisitions (in shares) | shares | 13,826,522 | ||||||||||||
Conversion of redeemable and contingently convertible share units | 236,181 | ¥ 2 | 236,179 | 236,181 | |||||||||
Conversion of redeemable and contingently convertible share units (in shares) | shares | 3,504,000 | ||||||||||||
Ordinary shares issued for share based compensation | 71,019 | ¥ 1 | 71,018 | 71,019 | |||||||||
Ordinary shares issued for share based compensation (in shares) | shares | 1,054,164 | ||||||||||||
Share based compensation related share options | 502 | 502 | 502 | ||||||||||
Additional capital contribution from shareholders | 11,789 | 11,789 | 11,789 | ||||||||||
Capital contribution from noncontrolling interest shareholder | 4,000 | 4,000 | 6,000 | 10,000 | |||||||||
Acquisition of noncontrolling interest of the Group's subsidiaries | 11,139 | 11,139 | (10,018) | 1,121 | |||||||||
Change in redemption value of convertible redeemable preferred shares | (133,568) | (133,568) | (133,568) | ||||||||||
Conversion of preferred shares into Class A ordinary shares upon IPO | 2,110,423 | ¥ 20 | 2,110,403 | 2,110,423 | |||||||||
Conversion of preferred shares into Class A ordinary shares upon IPO (in shares) | shares | 30,079,918 | ||||||||||||
Issuance of ordinary shares | ¥ 9,183,847 | ¥ 49 | ¥ 9,183,798 | ¥ 9,183,847 | |||||||||
Issuance of ordinary shares (in shares) | shares | 72,100,000 | ||||||||||||
Balance at ending of the period at Dec. 31, 2016 | 19,745,033 | ¥ 471 | 15,940,206 | 3,509,707 | 294,649 | 5,714 | 19,750,747 | ||||||
Shares outstanding, end of the period at Dec. 31, 2016 | shares | 720,564,604 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income (loss) | 3,159,663 | 3,159,663 | (763) | 3,158,900 | |||||||||
Foreign currency translation adjustments | (590,545) | (590,545) | (590,545) | ||||||||||
Share based compensation related share options | 40,725 | 40,725 | 40,725 | ||||||||||
Repurchase of ordinary shares | (914,611) | ¥ (914,611) | (914,611) | ||||||||||
Repurchase of ordinary shares (in shares) | shares | (9,759,888) | ||||||||||||
Capital contribution from noncontrolling interest shareholder | 1,000 | 1,000 | |||||||||||
Acquisition of noncontrolling interest of the Group's subsidiaries | (4,952) | (4,952) | 53 | (4,899) | |||||||||
Balance at ending of the period at Dec. 31, 2017 | 21,435,313 | ¥ 471 | 15,975,979 | (914,611) | 6,669,370 | (295,896) | 6,004 | 21,441,317 | |||||
Shares outstanding, end of the period at Dec. 31, 2017 | shares | 710,804,716 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net income (loss) | 4,383,025 | 4,383,025 | 4,887 | $ 638,196 | 4,387,912 | ||||||||
Foreign currency translation adjustments | 867,612 | 867,612 | 126,189 | 867,612 | |||||||||
Ordinary shares issued for share based compensation (in shares) | shares | 2,363,519 | ||||||||||||
Share based compensation related share options | 249,478 | 142,940 | 106,538 | 249,478 | |||||||||
Repurchase of ordinary shares | (737,004) | (737,004) | (737,004) | ||||||||||
Repurchase of ordinary shares (in shares) | shares | (7,565,487) | ||||||||||||
Capital contribution from noncontrolling interest shareholder | 23,740 | 23,740 | 41,420 | 65,160 | |||||||||
Distribution of dividends | (896,835) | (896,835) | (896,835) | ||||||||||
Issuance of ordinary shares | 8,891,909 | ¥ 52 | 8,891,857 | 8,891,909 | |||||||||
Issuance of ordinary shares (in shares) | shares | 79,861,111 | ||||||||||||
Balance at ending of the period at Dec. 31, 2018 | ¥ 34,217,238 | ¥ 523 | ¥ 24,137,681 | ¥ (1,545,077) | ¥ 11,052,395 | ¥ 571,716 | ¥ 52,311 | $ 4,984,299 | ¥ 34,269,549 | ||||
Shares outstanding, end of the period at Dec. 31, 2018 | shares | 785,463,859 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2016CNY (¥) | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |
Issuance cost on IPO | ¥ 339,355 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Operating activities | ||||
Net Income | $ 638,196 | ¥ 4,387,912 | ¥ 3,158,900 | ¥ 2,051,603 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Share-based compensation | 36,285 | 249,478 | 40,725 | 122,502 |
Depreciation and amortization | 124,168 | 853,718 | 560,366 | 324,978 |
Loss on disposal of property and equipment | 4,251 | 29,226 | 21,434 | 477 |
Allowance for doubtful accounts | 1,356 | 9,326 | 10,200 | 2,536 |
Deferred income tax | (20,228) | (139,081) | (29,035) | (30,553) |
Gain on deemed disposal of equity method investments | (9,551) | |||
Gain on disposal of equity investees and subsidiary | (81,832) | (562,637) | ||
Impairment of equity investees | 30,000 | |||
Share of loss in equity method investments | 2,820 | 19,386 | 15,682 | 36,721 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (45,005) | (309,431) | (100,231) | (141,845) |
Financing receivables | (66,627) | (458,092) | (64,030) | |
Inventories | (1,394) | (9,582) | (271) | (18,239) |
Advances to suppliers | (16,670) | (114,616) | (109,241) | (78,265) |
Prepayments and other current assets | (111,152) | (764,223) | (339,853) | (196,581) |
Amounts due from related parties | 9,640 | |||
Other non-current assets | (305) | (2,094) | (31,191) | (25,223) |
Accounts payable | 61,475 | 422,668 | 252,716 | 342,223 |
Advances from customers | 25,852 | 177,745 | 29,241 | (69,141) |
Amounts due to related parties | 2,517 | 17,303 | (16,512) | 28,158 |
Income tax payable | 25,454 | 175,012 | (196,384) | 116,378 |
Other current liabilities | 60,039 | 412,802 | 338,123 | 106,425 |
Other non-current liabilities | 1,343 | 9,231 | 60,045 | |
Net cash provided by operating activities | 640,543 | 4,404,051 | 3,630,684 | 2,572,243 |
Cash flows from investing activities | ||||
Purchases of property and equipment | (483,430) | (3,323,822) | (2,572,242) | (1,986,094) |
Purchases of land use rights | (95,623) | (657,454) | (254,497) | (703,115) |
Repayment of amounts due from related parties | 15,000 | |||
Cash paid for business acquisitions, net of cash received | (16,060) | (110,423) | (115,454) | |
Investments in equity investees | (271,298) | (1,865,309) | (89,055) | (315,426) |
Purchases of short-term investments | (1,983,041) | (13,634,396) | (10,126,703) | |
Repayment of short-term investments | 848,637 | 5,834,805 | 4,725,872 | |
Cash received from disposal of equity investees and subsidiary | 116,042 | 797,850 | ||
Cash received from disposal of land use rights | 10,432 | 71,723 | ||
Others | 2,094 | 14,393 | 22,078 | 20,049 |
Net cash used in investing activities | (1,872,247) | (12,872,633) | (8,294,547) | (3,085,040) |
Cash flows from financing activities | ||||
Proceeds from issuance of ordinary shares | 1,293,275 | 8,891,909 | ||
Proceeds from capital contribution from shareholders | 11,789 | |||
Proceeds from capital contribution from noncontrolling interest shareholder | 9,477 | 65,160 | 1,000 | 10,000 |
Proceeds from short-term borrowing | 550,000 | 551,000 | ||
Proceeds from issuance of ordinary shares for shared based compensation | 68,400 | |||
Repurchase of ordinary shares | (111,965) | (769,811) | (857,658) | |
Repayment of short-term borrowing | (36,361) | (250,000) | (750,000) | (409,943) |
Payment of dividends | (130,192) | (895,136) | ||
Others | (4,900) | |||
Net cash provided by/used in financing activities | 1,024,234 | 7,042,122 | (1,061,558) | 9,415,093 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 40,096 | 275,680 | (424,000) | 302,097 |
Net change in cash, cash equivalents and restricted cash | (167,374) | (1,150,780) | (6,149,421) | 9,204,393 |
Cash, cash equivalents and restricted cash at beginning of year | 839,755 | 5,773,734 | 11,923,155 | 2,718,762 |
Cash, cash equivalents and restricted cash at end of year | $ 672,381 | ¥ 4,622,954 | ¥ 5,773,734 | 11,923,155 |
IPO | ||||
Cash flows from financing activities | ||||
Proceeds from issuance of ordinary shares | ¥ 9,183,847 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - Reconciliation of Cash, Cash Equivalents and Restricted Cash ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows | ||||||
Cash and cash equivalents | $ 672,323 | ¥ 4,622,554 | ¥ 5,425,024 | ¥ 11,287,789 | ||
Restricted cash | 58 | 400 | 348,710 | 635,366 | ||
Total cash, cash equivalents, equivalents, and restricted cash shown in the statement of cash flows | $ 672,381 | ¥ 4,622,954 | $ 839,755 | ¥ 5,773,734 | ¥ 11,923,155 | ¥ 2,718,762 |
CONSOLIDATED STATEMENTS OF CA_3
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) ¥ in Thousands, $ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Oct. 31, 2017CNY (¥) | Jan. 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Issuance cost on IPO | ¥ 339,355 | |||||
Supplemental disclosure of cash flow information | ||||||
Income taxes paid | $ 129,911 | ¥ 893,202 | ¥ 871,780 | 646,162 | ||
Interest expense paid | $ 113 | 780 | 15,668 | 12,986 | ||
Supplemental disclosure on non-cash investing and financing activities: | ||||||
Payables for repurchasing the ordinary shares | 24,146 | 56,953 | 0 | |||
Payable for dividends | 1,699 | 0 | 0 | |||
Payables for equity investment | 5,000 | 35,000 | 5,000 | |||
Payables for purchase of property and equipment | ¥ 973,620 | ¥ 710,002 | ¥ 574,811 | |||
Suzhou Zhongtong Express Ltd. ("Suzhou ZTO") | ||||||
Supplemental disclosure on non-cash investing and financing activities: | ||||||
Interest acquired (as a percent) | 40.00% | |||||
Issuance of equity consideration | ¥ 30,066 | |||||
Cash consideration paid | 30,660 | |||||
Fair value of assets acquired and liabilities assumed | ¥ 85,923 | |||||
COE Business | ||||||
Supplemental disclosure on non-cash investing and financing activities: | ||||||
Cash consideration paid | ¥ 152,946 | |||||
Fair value of assets acquired and liabilities assumed | ¥ 79,096 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2018 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES ZTO Express (Cayman) Inc. (the “Company”) was incorporated under the laws of Cayman Islands on April 8, 2015. The Company, its subsidiaries and its variable interest entity and subsidiaries of variable interest entity (“VIE”) (collectively referred to as the “Group”) are principally engaged in express delivery services in the People's Republic of China (“PRC”) through a nationwide network partner model. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and VIE. All intercompany transactions and balances have been eliminated on consolidation. The Group evaluates the need to consolidate certain VIE of which the Group is the primary beneficiary. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. Consolidation of Variable Interest Entities Applicable PRC laws and regulations currently limit foreign ownership of companies that provide delivery services in PRC. The Company is deemed a foreign legal person under PRC laws and accordingly subsidiaries owned by the Company are ineligible to engage in provisions of delivery services. To provide the Group effective control over its variable interest entity, ZTO Express Co., Ltd. (“ZTO Express”) and receive substantially all of the economic benefits of ZTO Express, the Company's wholly owned subsidiary, Shanghai Zhongtongji Network Technology Ltd. (“Shanghai Zhongtongji Network”) entered into a series of contractual arrangements, described below, with ZTO Express and its individual shareholders. Agreements that provide the Company effective control over the VIE include: Voting Rights Proxy Agreement & Irrevocable Powers of Attorney Under which each shareholder of ZTO Express has executed a power of attorney to grant Shanghai Zhongtongji Network the power of attorney to act on his or her behalf on all matters pertaining ZTO Express and to exercise all of his or her rights as a shareholder of ZTO Express, including but not limited to convene, attend and vote at shareholders' meetings, designate and appoint directors and senior management members. The proxy agreement will remain in effect unless Shanghai Zhongtongji Network terminates the agreement by giving a prior written notice or gives its consent to the termination by ZTO Express. Exclusive Call Option Agreement Under which the shareholders of ZTO Express granted Shanghai Zhongtongji Network or its designated representative(s) an irrevocable and exclusive option to purchase their equity interests in ZTO Express when and to the extent permitted by PRC law. Shanghai Zhongtongji Network or its designated representative(s) has sole discretion as to when to exercise such options, either in part or in full. Without Shanghai Zhongtongji Network's written consent, the shareholders of ZTO Express shall not transfer, donate, pledge, or otherwise dispose any equity interests of ZTO Express in any way. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time when the option is exercised. The agreement can be early terminated by Shanghai Zhongtongji Network, but not by ZTO Express or its shareholders. Equity Pledge Agreement Under which the shareholders of ZTO Express pledged all of their equity interests in ZTO Express to Shanghai Zhongtongji Network as collateral to secure their obligations under the above agreement. If the shareholders of ZTO Express or ZTO Express breach their respective contractual obligations, Shanghai Zhongtongji Network, as pledgee, will be entitled to certain rights, including the right to dispose the pledged equity interests. Pursuant to the agreement, the shareholders of ZTO Express shall not transfer, assign or otherwise create any new encumbrance on their respective equity interest in ZTO Express without prior written consent of Shanghai Zhongtongji Network. The equity pledge right held by Shanghai Zhongtongji Network will expire when the shareholders of ZTO Express and Shanghai Zhongtongji Network have fully performed their respective obligations under the Consulting Services Agreement and Operating Agreement, or the shareholder is no longer a shareholder of ZTO Express or the satisfaction of all its obligations by ZTO under the VIE contractual arrangements. The agreements that transfer economic benefits to the Company include: Exclusive Consulting and Services Agreement Under which ZTO Express engages Shanghai Zhongtongji Network as its exclusive technical and operational consultant and under which Shanghai Zhongtongji Network agrees to assist in business development and related services necessary to conduct ZTO Express's operational activities. ZTO Express shall not seek or accept similar services from other providers without the prior written approval of Shanghai Zhongtongji Network. The agreements will be effective as long as ZTO Express exists. Shanghai Zhongtongji Network may terminate this agreement at any time by giving a prior written notice to ZTO Express. Under the above agreements, the shareholders of ZTO Express irrevocably granted Shanghai Zhongtongji Network the power to exercise all voting rights to which they were entitled. In addition, Shanghai Zhongtongji Network has the option to acquire all of the equity interests in ZTO Express, to the extent permitted by the then-effective PRC laws and regulations, for nominal consideration. Finally, Shanghai Zhongtongji Network is entitled to receive service fees for certain services to be provided to ZTO Express. The Call Option Agreement and Voting Rights Proxy Agreement provide the Company with effective control over the VIE and its subsidiaries, while the Equity Interest Pledge Agreements secure the obligations of the shareholders of ZTO Express under the relevant agreements. Because the Company, through Shanghai Zhongtongji Network, has (i) the power to direct the activities of ZTO Express that most significantly affect the entity's economic performance and (ii) the right to receive substantially all of the benefits from ZTO Express, the Company is deemed the primary beneficiary of ZTO Express. Accordingly, the Company consolidates the ZTO Express's financial results of operations, assets and liabilities in the Company's consolidated financial statements. The aforementioned Control Documents are effective agreements between a parent and a consolidated subsidiary, neither of which is accounted for in the consolidated financial statements or is ultimately eliminated upon consolidation, such as the service fees provided under the Consulting Services Agreement and Operating Agreement. The Group believes that the contractual arrangements with the VIE are in compliance with the PRC law and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including: · revoking the business licenses and/or operating licenses of such entities; · discontinuing or placing restrictions or onerous conditions on the Group's operation through any transactions between the Group's PRC subsidiaries and consolidated affiliated entities; · imposing fines, confiscating the income from PRC subsidiaries or consolidated affiliated entities, or imposing other requirements with which such entities may not be able to comply; · requiring the Group to restructure its ownership structure or operations, including terminating the contractual arrangements with its variable interest entity and deregistering the equity pledges of its variable interest entity, which in turn would affect the Group's ability to consolidate, derive economic interests from, or exert effective control over its variable interest entity, or · restricting or prohibiting the Group’s use of the proceeds of its initial public offering to finance its business and operations in China. The following amounts and balances of ZTO Express and its subsidiaries (the “VIE”) were included in the Group's consolidated financial statements after the elimination of intercompany balances and transactions: As of December 31, 2017 2018 RMB RMB Assets Current assets: Cash and cash equivalents 930,829 575,605 Restricted cash 192,559 400 Accounts receivable, net 286,286 519,389 Inventories 32,571 40,480 Advances to suppliers 60,369 118,216 Prepayments and other current assets 581,825 984,004 Amounts due from related parties 9,900 6,600 Total current assets 2,094,339 2,244,694 Investments in equity investees 272,195 124,590 Property and equipment, net 3,545,635 4,541,751 Land use rights, net 1,077,385 1,085,729 Goodwill 4,157,111 4,157,111 Deferred tax assets 91,586 213,745 Other non-current assets 70,609 118,858 TOTAL ASSETS 11,308,860 12,486,478 Liabilities Current liabilities: Short-term bank borrowing 250,000 — Accounts payable 774,182 1,093,822 Advances from customers 256,893 435,784 Income tax payable 110,116 16,692 Amounts due to related parties 857,665 622,298 Other current liabilities 1,625,089 2,119,810 Total current liabilities 3,873,945 4,288,406 Deferred tax liabilities 96,582 94,364 TOTAL LIABILITIES 3,970,527 4,382,770 Years ended December 31, 2016 2017 2018 RMB RMB RMB Total revenue 9,788,768 12,866,016 17,127,930 Net income 472,753 726,915 720,323 Net cash generated from operating activities 1,451,316 1,256,049 436,074 Net cash used in investing activities (1,680,896) (703,679) (777,197) Net cash provided by (used in) financing activities 151,056 (203,900) (206,260) Net increase (decrease) in cash and cash equivalents (78,524) 348,470 (547,383) Cash and cash equivalents and restricted cash at beginning of year 853,442 774,918 1,123,388 Cash and cash equivalents and restricted cash at end of year 774,918 1,123,388 576,005 The VIE contributed 100%, 98.5% and 97.3% of the Group's consolidated revenues for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, the VIE accounted for an aggregate of 44% and 31%, respectively, of the consolidated total assets, and 91% and 81%, respectively, of the consolidated total liabilities. Total assets not associated with the VIE mainly consisted of cash and cash equivalents, short-term investment and property and equipment. The VIE pays transportation fees and service fees pursuant to the Exclusive Consulting and Services Agreements to Shanghai Zhongtongji Network (the “WFOE”) based on the VIE’s operating results and WFOE’s operating cost of sorting hubs and the Group’s owned fleet. The WFOE is entitled to receive substantially all of the net income and transfer a majority of the economic benefits in the form of service fees from the VIEs. Group has historically presented net income of VIE before deductions of inter-company transportation fees and service fees charged by WOFE, which amounted to RMB4,145,150 and RMB5,982,432 for the year ended December 31, 2016 and 2017. The Group started to present net income of VIE after deduction of inter-company transportation fees and service fees charged by WOFE for the year ended December 31, 2018 with prior year disclosure revised for consistent presentation. The inter-company transportation fees and service fees charged by WOFE is RMB7,776,622 for the year ended December 31, 2018. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE was ever to need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIE through loans to the shareholders of the VIE or entrustment loans to the VIE. The Group believes that there are no assets held in the consolidated VIE that can be used only to settle obligations of the VIE, except for registered capital and the PRC statutory reserves. As the consolidated VIE is incorporated as a limited liability company under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company for any of the liabilities of the consolidated VIE. Relevant PRC laws and regulations restrict the VIE from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 23 for disclosure of restricted net assets. Nonconsolidated Variable Interest Entity Tonglu Tongze Logistics Ltd. and its subsidiaries (“Tonglu”), established in 2013, is a transportation service company providing line-haul transportation services to the Group. Tonglu is majority owned by the employees of the Group who are considered as related parties to the Group. The Group has concluded that it is not the primary beneficiary of Tonglu as it does not have the obligation to absorb losses of Tonglu that could potentially be significant to Tonglu or the right to receive benefits from Tonglu that could potentially be significant to Tonglu. The Group held variable interests in Tonglu in the form of a waiver of management fees and an outstanding loan receivable of RMB15 million as of December 31, 2015 that was repaid in full in 2016. As of December 31, 2018, the Group has no exposure to loss included in the Group’s consolidated balance sheets as a result of the Group’s variable interest in Tonglu. The Group had transactions with Tonglu for the years ended December 31, 2016, 2017 and 2018 and amounts due to Tonglu as of December 31, 2017 and 2018 for transportation service received from Tonglu, in connection with a contractual arrangement and considered by management to be on terms that are commensurate with market. Transactions and balances relating to the transportation services are disclosed in Note 17 (a) and (b). (c) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements include assessment of useful lives of long-lived assets, valuation of ordinary shares and share-based compensation, realization of deferred tax assets, impairment assessment of long-lived assets and goodwill and assumptions used to determine the fair value of the assets acquired through business combination. Actual results may differ materially from those estimates. (d) Fair value Fair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Group has stock unit awards payable that was required to be measured at fair value on a recurring basis at the end of each reporting period prior to June 28, 2016. Change in fair value and inputs in the valuations are disclosed in Note 14. The carrying values of financial instruments, which consist of cash and cash equivalents, accounts receivable, financing receivable, short-term investment, amounts due from related parties, advances to suppliers, prepayments and other current assets, short-term bank borrowing, accounts payable, advances from customers, amounts due to related parties, and other current liabilities are recorded at cost which approximates their fair value due to the short-term nature of these instruments. The Group measures certain assets, including the equity method investments, at fair value on a nonrecurring basis when they are deemed to be impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include management judgments, future performance projections, etc. An impairment charge to these investments is recorded when the carry amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. During the years ended December 31, 2016, 2017 and 2018, the Group recognized impairment of investment in equity investees in the amount of nil, RMB30,000 and nil, respectively. Certain non-financial assets are measured at fair value on a nonrecurring basis, including property, plant, and equipment, goodwill and intangible assets and they are recorded at fair value only when impairment is recognized by applying unobservable inputs such as forecasted financial performance of the acquired business, discount rate, etc. to the discounted cash flow valuation methodology that are significant to the measurement of the fair value of these assets. (e) Foreign currency translation The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and subsidiaries incorporated outside the mainland China are the United States dollar (“US dollar” or “US$”). The functional currency of all the other subsidiaries and the VIE is RMB. The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters. Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded in the Consolidated Statements of Operations and Comprehensive Income. The financial statements of the Group are translated from the functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB at the average rates of exchange for the year. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive income as a component of shareholders’ equity. (f) Convenience translation The Group's business is primarily conducted in China and almost all of the Group’s revenues are denominated in RMB. However, periodic reports made to shareholders will include current period amounts translated into US dollars using the then current exchange rates, solely for the convenience of the readers. Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from RMB into US dollars as of and for the year ended December 31, 2018 were calculated at the rate of US$1.00=RMB6.8755, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2018. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2018, or at any other rate. (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months or less when purchased. (h) Restricted cash Restricted cash represents (a) cash received from network partners that was immediately restricted for use until the final delivery of parcel to the recipients; and (b) secured deposits held in designated bank accounts for issuance of bank acceptance notes and letter of guarantee for short-term borrowings. (i) Short-term investment Short-term investment primarily comprises of the time deposits with maturities between three months and one year, and investments in wealth management products with variable interest rates or principal not-guaranteed with certain financial institutions, whereby the Group has the intent and the ability to hold to maturity within one year. The Group classifies the short-term investment as “Held-to-maturity” securities and stated at amortized cost. For investments classified as held-to-maturity securities, the Group evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with the Company’s policy and ASC 320. The other-than-temporary impairment loss is recognized in earnings equal to the entire excess of the investment’s amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. No impairment losses in relation to its short-term investments were recorded for the year ended 2017 and 2018. The Group recorded the interest income of RMB74,127 and RMB307,084 from the short-term investments in the consolidated statements of comprehensive income for the year ended December 31, 2017 and 2018, respectively. (j) Financing receivables The Group started to provide financing services to certain of its network partner in 2017 with credit term mainly ranging from 3 months to one year. Such amounts are recorded at the outstanding principal amount less allowance for doubtful accounts and include accrued interest receivable as of the balance sheet date. Allowance for doubtful accounts relating to financing receivables represents the Group's best estimate of the losses inherent in the outstanding portfolio of financing receivables. Nil and RMB 4,139 for doubtful accounts relating to financing receivables was recorded for the year ended December 31, 2017 and 2018, respectively. Interest revenue generated from the financing receivable are immaterial for the periods presented. (k) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Leasehold improvements Lesser of lease term or estimated useful life of 3 years Furniture, office and electric equipment 3 to 5 years Machinery and equipment 10 years Vehicles 5 years Buildings 20 years (l) Intangible assets Intangible assets include customer relationship acquired in a business combination which are recognized initially at fair value at the date of acquisition and are carried at cost less accumulated amortization. Amortization of customer relationship is computed using the straight-line method over 10 years. See Note 3 “Business Combination” for further details. (m) Investments in equity investees Investments in equity investees of the Group are comprised of investments in privately-held companies. The Group uses the equity method to account for an equity investment over which it has significant influence but does not own a majority equity interest or otherwise control. The Group records equity method adjustments in share of profits and losses. Equity method adjustments include the Group's proportionate share of investee income or loss, adjustments to recognize certain differences between the Group's carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. Dividends received are recorded as a reduction of carrying amount of the investment. Cumulative distributions that do not exceed the Group's cumulative equity in earnings of the investee are considered as a return on investment and classified as cash inflows from operating activities. Cumulative distributions in excess of the Group's cumulative equity in the investee's earnings are considered as a return of investment and classified as cash inflows from investing activities. The Group continually reviews investments in equity investees to determine whether a decline in fair value to below the carrying value is other-than-temporary. The primary factors the Group considers in determination are the duration and severity of the decline in fair value; the financial condition, operating performance and the prospects of the equity investee; and other company specific information such as recent rounds of financing. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investment is written down to fair value. Prior to January 1, 2018, for equity investment over which the Group does not have significant influence or control, the cost method of accounting was used. Effective from January 1, 2018, upon adoption of ASC 321, the Company elected to measure the investments without readily determinable fair value at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There was no impairment or observable changes in price recorded during 2018 related to the Company's equity investments without readily determinable fair values. (n) Impairment of long-lived assets The Group evaluates the recoverability of long-lived assets with determinable useful lives whenever events or changes in circumstances indicate that an intangible asset's carrying amount may not be recoverable. The Group measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows associated with it. Impairment exists when the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Group to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. No impairment charge was recognized for the years ended December 31, 2016, 2017 and 2018. (o) Goodwill Goodwill is recognized for the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of business acquired. Several factors give rise to goodwill in the Group’s acquisitions, such as the expected benefit from synergies of the combination and the existing workforce of the acquired businesses. Unless circumstances otherwise dictate, goodwill is reviewed annually at December 31 for impairment. In evaluation of goodwill impairment, the Group performs a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, the Company proceeds to a two-step process to test goodwill for impairment, including comparing the fair value the reporting unit to its carrying value (including attributable goodwill). Fair value for the Group’s reporting units is determined using an income or market approach incorporating market participant considerations and management's assumptions on revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations mainly include both internal and third-party valuations. No impairment charge was recognized for the years ended December 31, 2016, 2017 and 2018. (p) Share-based compensation The Group grants share options and Ordinary Share Units to eligible employees, management and directors and accounts for these share-based awards in accordance with ASC 718 Compensation—Stock Compensation. Employees’ share-based awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at grant date if no vesting conditions are required; or b) using graded vesting method, net of forfeitures, over the requisite service period, which is the vesting period. When there is a modification of the terms and conditions of an award, the Group measures the pre-modification and post-modification fair value of the share-based awards as of the modification date and recognizes the incremental value as compensation cost over the remaining service period. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Prior to the IPO of the Company, the fair value of the share options and Ordinary Share Units were assessed using the income approach/discounted cash flow method, with a discount for lack of marketability given that the shares underlying the awards were not publicly traded at the time of grant. This assessment required complex and subjective judgments regarding the Company’s projected financial and operating results, its unique business risks, the liquidity of its ordinary shares and its operating history and prospects at the time the grants were made. In addition, the binomial option-pricing model is used to measure the value of share options. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and non-employee share option exercise behavior, risk-free interest rates and expected dividends. The fair value of these awards was determined with the assistance from an independent valuation firm using management’s estimates and assumption. After the IPO of the Company, in determining the fair value of the share options and Ordinary Share Units, the closing market price of the underlying shares on the grant date is applied. The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes. (q) Treasury shares Treasury shares represents ordinary shares repurchased by the Group that are no longer outstanding and are held by the Group. The repurchase of ordinary shares is accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. (r) Revenue recognition |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2018 | |
Business Combination | |
Business Combination | 3. Business Combination 2016 Acquisition of Network Partner In January 2016, the Group purchased the remaining 40% equity interest of Suzhou Zhongtong Express Ltd. ("Suzhou ZTO") that was previously accounted for under the equity method for cash consideration of RMB30,660 and equity consideration of 600,000 ordinary shares, determined to have a per share fair value of RMB50.11. The total consideration is RMB60,726, and the goodwill resulted from this acquisition is RMB65,892. As a result of acquiring Suzhou ZTO, the Group's existing equity interests was remeasured to a fair value of RMB91,089, with the excess over the carrying amount recognized as gain on deemed disposal of equity method investment of RMB9,551 in the consolidated statement of comprehensive income for the year ended December 31, 2016. The acquisition of Suzhou ZTO was not material to the consolidated financial statements for the year ended December 31, 2016. 2017 Acquisition In October 2017, the Group acquired the core business of the China Oriental Express Co., Ltd. and its subsidiaries (the “COE Business"), a freight forwarding services provider in Hong Kong and Shenzhen, for cash consideration of HK$180,000 (approximate to RMB152,946). As a result of the acquisition, the Group recognized fixed assets of RMB17,123, intangible assets of RMB61,973, representing customer relations of the COE Business, and goodwill of RMB84,430. The unpaid balance in relation to the acquisition of COE Business was RMB 42,523 as of December 31, 2018 and has been recorded in acquisition consideration payable. The acquisition was not material to the consolidated financial statements for the year ended December 31, 2017, as such pro forma results of operations are not presented. |
Prepayments and other current a
Prepayments and other current assets | 12 Months Ended |
Dec. 31, 2018 | |
Prepayments and other current assets | |
Prepayments and other current assets | 4. Prepayments and other current assets Prepayments and other current assets consist of the following: As of December 31, 2017 2018 RMB RMB Input value added tax ("VAT") 489,700 927,645 Prepaid expenses 63,780 109,702 Accrued interest income 40,447 185,555 Deposits 16,749 28,098 Others 109,307 256,996 Total 719,983 1,507,996 |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property and equipment, net | |
Property and equipment, net | 5. Property and equipment, net Property and equipment, net consist of the following: As of December 31, 2017 2018 RMB RMB Buildings 2,697,230 3,586,898 Machinery and equipment 1,299,553 2,475,795 Leasehold improvements 262,419 344,786 Vehicles 1,545,786 2,319,342 Furniture, office and electric equipment 207,953 309,214 Construction in progress 1,434,699 1,711,971 Total 7,447,640 10,748,006 Accumulated depreciation (974,630) (1,712,302) Property and equipment, net 6,473,010 9,035,704 Depreciation expenses were RMB301,668, RMB522,853 and RMB809,005 for the years ended December 31, 2016, 2017 and 2018, respectively. As at December 31, 2017 and 2018, the title certificates for certain buildings of the Group with an aggregate net book value of approximately RMB1,425,167 and RMB2,040,167, respectively, had not been obtained. |
Land use rights, net
Land use rights, net | 12 Months Ended |
Dec. 31, 2018 | |
Land use rights, net | |
Land use rights, net | 6. Land use rights, net There is no private land ownership in China. Companies or individuals are authorized to possess and use the land only through land use rights granted by the PRC government. Land use rights are amortized using the straight-line method over the lease term of around 50 years or less. As of December 31, 2017 2018 RMB RMB Cost 1,688,966 2,093,750 Less: Accumulated amortization (86,058) (124,574) Land use rights, net 1,602,908 1,969,176 Amortization expenses for land use rights were RMB23,310, RMB35,964 and RMB38,516 for the years ended December 31, 2016, 2017 and 2018, respectively. As at December 31, 2017 and 2018, the title certificates for certain land use right of the Group with carrying value of approximately RMB36,998 and RMB114,807, respectively, has not been obtained. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets, net | |
Intangible assets, net | 7. Intangible assets, net As of December 31, 2017 2018 RMB RMB Customer relationships 61,973 61,973 Less: accumulated amortization (1,549) (7,746) Customer relationships, net 60,424 54,227 Amortization expenses for customer relationships acquired through business combination of COE Business were nil, RMB1,549 and RMB6,197 for the years ended December 31, 2016, 2017 and 2018, respectively. The estimated amortization expenses for each of the five succeeding fiscal years and thereafter are as follows: Years ending December 31, RMB 2019 6,197 2020 6,197 2021 6,197 2022 6,197 2023 6,197 2024 and after 23,242 Total 54,227 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill | |
Goodwill | 8. Goodwill The changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2018 were as follows: Amount RMB Balance at January 1, 2017 4,157,111 Increase in goodwill related to acquisition of COE Business 84,430 Balance at December 31, 2017 and 2018 4,241,541 |
Investments in equity investees
Investments in equity investees | 12 Months Ended |
Dec. 31, 2018 | |
Investments in equity investees | |
Investments in equity investees | 9. Investments in equity investees The Group's investments in equity investees comprise the following: As of December 31, 2017 2018 RMB RMB Investments accounted for under equity method: ZTO Supply Chain Management Co., Ltd. (“ZTO LTL”) (1) 76,014 194,235 Feng Wang Investment Co., Ltd. ("Feng Wang") (2) 51,419 52,238 Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") (3) 30,000 27,999 Others 22,328 36,225 Total investments accounted for under the equity method 179,761 310,697 Investments accounted for equity investments without readily determinable fair values: Cai Niao Smart Logistics Network Limited ("Cai Niao") (4) 212,063 224,097 Shenzhen Feng Chao Technology Ltd. (“Feng Chao”) (5) 149,230 — Wheat Commune Group Inc. ("Wheat Commune) (6) 48,228 47,552 Zhejiang Yizhan Network Technology Co., Ltd. (“Cainiao Post”) (7) — 1,075,000 Zhijiang New Industries Limited (“ZJ New Industries”) (8) — 500,000 Globaltime Inc. — 22,345 Others 20,878 27,719 Total investments accounted for equity investments without readily determinable fair values 430,399 1,896,713 Total investments in equity investees 610,160 2,207,410 (1) ZTO LTL On August 22, 2016, the Group has entered into an investment agreement with ZTO LTL and Mr. Jianfa Lai to invest cash of RMB54,000 in exchange of 18% equity interest in ZTO LTL. ZTO LTL is engaged in provision of less-than-truckload transportation services in China. The principal shareholders of ZTO LTL are also the principal shareholders of the Group. Owing to the shareholders' structure of ZTO LTL, the Group has significant influence on ZTO LTL's significant operating activities. Therefore, the investment is accounted for using the equity method. In August 2017, the Group increased investment in ZTO LTL by RMB36,000 to maintain its equity shares in ZTO LTL at 18%.In 2018, ZTO LTL went through a restructuring and as a result, became a wholly owned subsidiary of ZTO Freight (Cayman) Inc. (“ZTO Freight”), a newly established Cayman company by shareholders of ZTO LTL. The Group holds 18% equity in ZTO Freight after the restructuring.The Group contributed additional investment in ZTO Freight by USD19,000 (approximate to RMB130,150) and its equity interest decreased to 17.7% due to the additional capital contributions from other shareholders in 2018. (2) Feng Wang In December 2013, the Group entered into an agreement with other three top express delivery companies in China, to establish Feng Wang, which is to invest in the upstream industries and integrate resources across the express delivery value chain. The capital contribution by the Group was RMB50,000 in cash, representing 25% of the equity interest of Feng Wang. In 2015, the Group's equity interest to Feng Wang decreased to 20% due to the additional capital contributions from other shareholders of Feng Wang. (3) CRRC In December 2017, the Group entered into a subscription and contribution agreement with CRRC Urban Traffic Co., Ltd. and two other express delivery companies in PRC, to establish a new company named CRRC, to develop the clean energy vehicles used in the express and logistics industries. The capital contribution by the Group was RMB30,000, representing 15% of the equity interest of CRRC. The Group has one board seat out of seven of CRRC, and has a significant influence on CRRC’s significant operating activities. Therefore, the investment is accounted for using the equity method. (4) Cai Niao In May 2013, the Group entered into an investment agreement with several e-Commerce firms, investment corporations and delivery companies, to launch a new company named Cai Niao, which provides a platform that connects with a network of logistics providers through a proprietary logistics information system and facilitates the delivery of packages across PRC. The Group invested RMB50,000 in Cai Niao, and held 1% of its equity interests. In March 2016, the Group subscribed for an additional 30,000,000 ordinary shares for consideration of USD15,473 (approximate to RMB100,285) pursuant to the share subscription agreement dated as of March 11, 2016 during the new round of financing by Cai Niao. The additional subscription did not change the percentage of equity interest the Group held in Cai Niao. In October 2017, the Group subscribed for an additional 12,000,000 ordinary shares at the consideration of USD9,056 (approximate to RMB59,668) pursuant to the share subscription agreement dated October 17, 2017 during another round of financing by Cai Niao. After this contribution, the Group still maintained 1% of equity interest of Cai Niao. (5) Feng Chao In June 2015, the Group entered into a subscription and contribution agreement with three other express delivery companies in PRC, to establish a new company named Feng Chao, which focuses on optimizing the delivery process, for example, by creating storage lockers for deliveries, innovating on the "last mile" delivery of express parcels. The capital contribution by the Group was RMB100,000 in cash, representing 20% of the equity interest of Feng Chao. The Group has one board seat out of five of Feng Chao, and has significant influence on Feng Chao's significant operating activities. Therefore, the investment is accounted for using the equity method. In May 2016, the Group entered into the capital increase agreement with Feng Chao, to increase its investment by RMB100,000 to maintain its equity shares in Feng Chao at 20%, which was closed in August 2016. In July 2016, to coordinate with the Feng Chao’s employee incentive plan, all the investors of Feng Chao have agreed to transfer totally 5% of equity interests of Feng Chao to the employee share holding platform. As a result, the Group agreed to sell 1% of its equity interests in Feng Chao with the consideration of RMB2,500. In November 2016, the Group quit the board seat of Feng Chao, and no longer has significant influence on Feng Chao's significant operating activities. Thereafter, the Group accounts for this investment equity investments without readily determinable fair values. In January 2017, the Group's equity interest to Feng Chao decreased to 10.4% due to the additional capital contributions from other shareholders of Feng Chao. In May 2018, the Group disposed its share of Feng Chao for cash consideration of RMB697,850 and recognized gain on disposal of equity investee of RMB548,620. (6) Wheat Commune In December 2015, the Group entered into a share purchase agreement to obtain 7.45% equity interest in Wheat Commune for US$12,000 (equivalent to RMB77,668). Wheat Commune is an Omni-channel platform providing comprehensive campus service in more than 100 cities across the country. Due to the continued operating loss, the Group conducted an impairment assessment and concluded that there is an other than temporary decline in the fair value of the investment. Thus the Group recorded impairment of RMB30,000 for the year ended December 31, 2017. (7) Cainiao Post In May 2018, the Group entered into a subscription and contribution agreement with four other leading express delivery companies in PRC, to obtain 15% equity interest in Cainiao Post, Cainiao’s network of last-mile delivery stations, in amount of RMB1,075,000. The Group has no significant influence on Cainiao Post’s significant operating activities. Therefore, the investment is accounted for equity investments without readily determinable fair values. (8) ZJ New Industries In October 2018, the Group entered into an investment agreement with several investment corporations to establish a new investment company, named ZJ New Industries to obtain 2% equity interest in ZJ New Industries. The capital contribution made by the Group was RMB500,000 as of December 31, 2018. The Group has no significant influence on ZJ New Industries. Therefore, the investment is accounted for equity investments without readily determinable fair values. |
Short-term bank borrowing
Short-term bank borrowing | 12 Months Ended |
Dec. 31, 2018 | |
Short-term bank borrowing | |
Short-term bank borrowing | 10. Short-term bank borrowing Short-term bank borrowing consists of the following: As of December 31, 2017 2018 RMB RMB PRC domestic commercial banks 250,000 — 250,000 — On January 13, 2017, a PRC subsidiary of the Group entered into a short-term borrowing agreement of RMB100,000 with a commercial bank in the PRC at a fixed interest rate of 3.828% per annum. The Group fully repaid this borrowing in January 2018. On January 23, 2017, a PRC subsidiary of the Group entered into a short-term borrowing agreement of RMB150,000 with a commercial bank in the PRC at a fixed interest rate of 3.915% per annum, collateralized by the letter of guarantee issued from the Group's designated bank accounts by RMB156,151 for this short-term borrowing. The Group fully repaid this borrowing in January 2018. |
Other current liabilities
Other current liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other current liabilities | |
Other current liabilities | 11. Other current liabilities Other current liabilities consist of the following: As of December 31, 2017 2018 RMB RMB Payables related to property and equipment 710,002 973,620 Deposits from network partners (1) 645,923 741,914 Salary and welfare payable 576,581 643,129 Payables related to land use rights 67,644 7,644 Payables for repurchasing ordinary shares 56,953 24,146 Payables for equity investment 35,000 5,000 Construction deposits 20,360 27,362 Others 168,604 410,954 Total 2,281,067 2,833,769 (1) Amount primarily represents the dispatching fee deposits collected from the pickup outlets operated by network partners, which is refunded when the parcel is delivered to the recipients. |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest | |
Noncontrolling Interest | 12. Noncontrolling Interest Below are the changes in the Group's ownership in its subsidiary on the Group's equity. As of December 31, 2016 2017 2018 RMB RMB RMB Net income attributable to ZTO Express (Cayman) Inc. 2,053,855 3,159,663 4,383,025 Transfers from (to) noncontrolling interest Increase in ZTO's paid in capital for capital contribution from noncontrolling interest shareholder 4,000 — 23,740 Increase (decrease) in ZTO's paid in capital for purchase shares of the Group's subsidiaries 11,139 (4,952) — Net transfers from (to) noncontrolling interest 15,139 (4,952) 23,740 Change from net income attribute to ZTO and transfers from (to) noncontrolling interest 2,068,994 3,154,711 4,406,765 In 2018, a third-party investor made a capital contribution to one of the Group's subsidiary. As a result, additional paid-in capital and the value of the noncontrolling interests increased. |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2018 | |
Income tax | |
Income tax | 13. Income tax Under the current laws of the Cayman Islands, the Company is incorporated in the Cayman Islands and not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Under the current laws of the British Virgin Islands, the Group's subsidiary incorporated in British Virgin Island are not subject to tax. The Group’s subsidiary in the U.S. is registered in the state of Oregon and is subject to U.S. federal corporate marginal income tax rate of 21% and state income tax rate of 5%-9.9% respectively. Under the current Hong Kong Inland Revenue Ordinance, the Group's subsidiaries domiciled in Hong Kong has introduced a two-tiered profits tax rate regime which is applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first HK $2 million of profits of corporations will be lowered to 8.25%, while profits above that amount will continue to be subject to the tax rate of 16.5%. Additionally, payments of dividends by the subsidiary incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. Under the Law of the People's Republic of China on Enterprise Income Tax ("EIT Law"), the Group's subsidiaries domiciled in the PRC are subject to statutory rate of 25%. Certain enterprises will benefit from a preferential tax rate of 15% under the EIT Law if they qualify as "high and new technology enterprises," or HNTEs, or if they are located in applicable PRC regions as specified in the Catalogue of Encouraged Industries in Western Regions (initially effective through the end of 2010 and further extended to 2020), or the Western Regions Catalogue, subject to certain general restrictions described in the EIT Law and the related regulations. Shanghai Zhongtongji Network Technology Co. Ltd. is qualified for HNTE status and is eligible to a reduced income tax rate of 15% for the years ended 2017, 2018 and 2019. In 2018, 10 of the Companies' subsidiaries, which are located in the municipalities or provinces of Chongqing, Sichuan, Guizhou, Yunnan and Shaanxi are qualified enterprises within the Catalog of Encouraged Industries in the Western Region to have the 15% preferential income tax rate. The current and deferred portion of income tax expenses included in the consolidated statements of comprehensive income, which were substantially attributable to the Group's subsidiaries are as follows: Years ended December 31, 2016 2017 2018 RMB RMB RMB Current tax expenses 762,540 675,396 1,068,214 Deferred tax (30,553) (29,035) (139,081) Total 731,987 646,361 929,133 Reconciliations of the differences between PRC statutory income tax rate and the Group's effective income tax rate for the years ended December 31, 2016, 2017 and 2018 are as follows: Years ended December 31, 2016 2017 2018 RMB RMB RMB Statutory income tax rate 25.00 % 25.00 % 25.00 % Preferential tax rates — (7.67) % (7.36) % R&D super deduction (0.18) % (0.29) % (0.61) % Non-deductible expenses 0.72 % 0.53 % 1.41 % Non-taxable income (0.09) % — (0.24) % Different tax rate of subsidiary operation in other jurisdiction 0.58 % (0.63) % (0.74) % True up (0.08) % (0.02) % (0.05) % 25.95 % 16.92 % 17.41 % The effect of the tax holiday on the income (loss) per share is as follows: As of December 31, 2016 2017 2018 RMB RMB RMB Tax saving amount due to preferential tax rates — 293,066 392,761 Income (loss) per share effect- basic — 0.41 0.52 Income (loss) per share effect- diluted — 0.41 0.52 The principal components of the Group's deferred income tax assets and liabilities as of December 31, 2017 and 2018 are as follows: As of December 31, 2017 2018 RMB RMB Deferred tax assets: Accrued expense 75,858 96,786 Net loss carryforward 35,021 147,634 Financial subsidy 19,400 29,781 Depreciation for property and equipment 13,553 28,013 Unrealized gain for intragroup transaction 5,105 9,760 Provision for allowance for doubtful accounts 3,826 6,089 Total deferred tax assets 152,763 318,063 Deferred tax liabilities: Difference in basis of land use rights (146,740) (148,993) Difference in basis of intangible assets (10,580) (8,947) Total deferred tax liabilities (157,320) (157,940) The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward periods, the Group's experience with tax attributes expiring unused and tax planning alternatives. Considering all the above factors, the management concluded that all the deferred tax assets could be utilized before its expiry. As such, no valuation allowances are provided to the deferred tax assets. As of December 31, 2018, the Group had tax loss carryforward in subsidiaries of RMB590,535 which will expire from 2019 to 2023. Uncertainties exist with respect to how the current income tax law in the PRC applies to the Group's overall operations, and more specifically, with regard to tax residency status. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that nonresident legal entities will be considered PRC residents if substantial and overall management and control over the manufacturing and business operations, personnel, accounting and properties, occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the legal entities organized outside of the PRC within the Group should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside the PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside the PRC will be subject to the PRC income taxes, at a statutory income tax rate of 25%. The Group is not subject to any other uncertain tax position. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. From inception to 2018, the Group is subject to examination of the PRC tax authorities. Aggregate undistributed earnings of the Group's PRC subsidiaries and VIE that are available for distribution was RMB6,034,204 and RMB10,019,541 as of December 31, 2017 and 2018 respectively. In accordance with the EIT Law, dividends, which arise from profits of foreign invested enterprises ("FIEs") earned after January 1, 2008, are subject to a 10% withholding income tax. In addition, under tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as the beneficial owner, the applicable withholding tax rate is reduced to 5%, if the investor holds at least 25% in the FIE, or 10%, if the investor holds less than 25% in the FIE. A deferred tax liability should be recognized for the undistributed profits of PRC subsidiaries unless the Company has sufficient evidence to demonstrate that the undistributed dividends will be reinvested and the remittance of the dividends will be postponed indefinitely. The Group plans to indefinitely reinvest undistributed profits earned from its China subsidiaries in its operations in the PRC. Therefore, no withholding income taxes for undistributed profits of the Group's subsidiaries have been provided as of December 31, 2017 and 2018. Under applicable accounting principles, a deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting basis over tax basis in a domestic subsidiary. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Group completed its feasibility analysis on a method, which the Group will ultimately execute if necessary to repatriate the undistributed earnings of the VIE without significant tax costs. As such, the Group does not accrue deferred tax liabilities on the earnings of the VIE given that the Group will ultimately use the means. |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2018 | |
Share-based compensation | |
Share-based compensation | 14. Share-based compensation Employee Share Holding Platform In June 2016, the Group established an employee share holding platform (the "Share Holding Platform"). The purpose of the Share Holding Platform is to allow employees of the Group in the PRC to receive equity share incentives. ZTO ES Holding Limited ("ZTO ES"), a British Virgin Islands company was established as a holding vehicle for the Group's Share Holding Platform. Four limited liability partnerships ("LLPs") were established in the PRC as the shareholders of ZTO ES, each holding 25% equity interest in ZTO ES. At the time of establishment of these LLPs, Mr. Lai Meisong, chairman and chief executive officer of the Group, and his wife, Ms. Lai Yufeng agreed to serve as the general partner and sole limited partner of each of the four LLPs, respectively. ZTO ES and the LLPs have no activities other than administering the plan and does not have employees. On behalf of the Group and subject to approval of board of director of the Company, Mr. Lai Meisong as the general partner of the LLPs, has the authority to select the eligible participants to whom awards will be granted; and determine the number of shares covered; establish the terms, conditions and provision of such awards. On June 28, 2016, the Company issued 16 million ordinary shares to ZTO ES. At the time of issuance, all shareholder rights associated with these 16 million ordinary shares including but not limited to voting right and dividend right were waived initially until such time when the economic interests in the ordinary shares are granted to the employees, through transfer of interests in the LLPs. Pursuant to the terms of the partnership agreement, a recipient of limited partnership interests is entitled to indirectly all of the economic rights associated with the underlying ordinary shares of the Company and accordingly, at the direction of the employee, the LLPs will sell the Company's ordinary shares held in connection with the limited partnership interest owned by the employee, and remit the proceeds to the employee. The other shareholder's rights associated with the Company's ordinary shares held by the partnership may be exercised by the general partner of these LLPs. The Group referred to these limited partner's partnership interests as Ordinary Share Units and five Ordinary Share Units correspond to the indirect economic interest in one ordinary share of the Company. Pursuant to a board of director resolution, on June 28, 2016, the following awards were approved to be granted to certain of Group's employees: · 584,000 outstanding redeemable and contingently convertible share units were converted to 17,520,000 Ordinary Share Units, which correspond to 3,504,000 Company's ordinary shares. This conversion is calculated based on the original conversion ratio of one redeemable and contingently convertible share units to six ordinary shares. Upon conversion to the Ordinary Share Units, the cash redemption right and contingent conversion right were terminated. · 5,270,820 Ordinary Share Units corresponding to 1,054,164 Company's ordinary shares were transferred to certain employees to award them for past performance. Of these awards, 1,540,500 Ordinary Share Units were granted to one employee with a cash subscription payment of RMB10,000, and the remaining 3,730,320 Ordinary Share Units were granted to employees for no cash subscription. · These Ordinary Share Units awards have no vesting conditions and can be transferred in accordance with the applicable limited liability partnership agreement. The conversion of 584,000 redeemable and contingently convertible share units to Ordinary Share Units was accounted for as a modification in accordance with ASC 718, Compensation-Stock Compensation. As a result of the modification, the cash redemption clause and contingent conversion upon IPO clause were terminated. As the Group is not obligated to settle the Ordinary Share Units in cash, this modification changed the award's classification from liability to equity. The fair value of the modified awards on the date of the modification was RMB236,181. Compensation cost of RMB60,981 representing the difference between the fair value of the modified awards on the date of modification and the fair value of the redeemable and contingently convertible share units as of December 31, 2015 was recorded as shared-based compensation expenses and included in selling, general and administrative expenses in the consolidated statement of comprehensive income for the year ended December 31, 2016. As these Ordinary Share Units have no vesting condition, the total fair value of the modified award of RMB236,179 has been recorded as a credit to the additional paid in capital at the date of modification. The Group accounted 5,270,820 Ordinary Share Units (equivalent to 1,054,164 ordinary shares) as equity awards and measured them at fair value at the date of the grant in accordance with ASC 718. As these awards vested immediately at the date of grant, the Group recorded share-based compensation of RMB61,019 at the date of the grant based on a determined per share fair value of ordinary shares at RMB67.37 in the consolidated statement of comprehensive income for the year ended December 31, 2016. Pursuant to a board of director resolution, on March 28, 2017, 3,945,750 Ordinary Share Units corresponding to 789,150 Company's ordinary shares were granted to certain employees to award them for past performance at the consideration of nil. These awards are subject to vesting ratably over a period of three years. As of December 31, 2018, there was RMB23,303 of total unrecognized compensation expense related to unvested Ordinary Share Units. That cost is expected to be recognized over a weighted average period of 1.17 years. The Group recorded the share-based compensation of RMB23,303 and RMB23,303 based on the market price of ordinary shares at USD12.88 on the grant date in the consolidated statement of comprehensive income for the year ended December 31, 2017 and 2018, respectively. On March 7, 2018, the Group granted economic rights associated with 906,949 Class A ordinary shares through its employee share holding platform to certain executive officers and employees at nil subscription consideration. These share awards vested immediately upon grant. The Group recorded the share-based compensation of RMB97,424 based on the market price at USD16.99 of ordinary shares on the grant date in the consolidated statement of comprehensive income for the year ended December 31, 2018. A summary of changes in the ordinary share awards relating to the Share Holding Platform granted by the Group during the year ended December 31, 2018 is as follows: Number of ordinary shares Weighted average under grant-date Incentive Platform fair value Non-Vested at January 1, 2018 789,150 88.59 Granted 906,949 107.42 Vested 1,159,581 103.32 Non-Vested at December 31, 2018 536,518 88.59 Prior to the consummation of the IPO in October 2016, the fair value of Ordinary Share Units was based on the fair value of the underlying ordinary shares which was determined by using option-pricing method to allocate enterprise value to preferred and ordinary shares on a fully diluted basis. The method treats ordinary shares and preferred shares as call options on the enterprise’s value, with exercise prices on the liquidation preference of the preferred shares. Upon the completion of the IPO, the fair value of Ordinary Share Units was based on the fair value of the underlying ordinary shares which was determined by the market price of ordinary shares on the grant date. 2016 Share Incentive Plan On June 20, 2016, the Board also approved a 2016 share incentive plan (the "2016 Share Incentive Plan") in order to provide appropriate incentives to the relevant directors, executive officers and other employees of the Company and its affiliates, pursuant to which the maximum number of shares of the Company available for issuance pursuant to all awards under the 2016 Share Incentive Plan shall be 3,000,000 ordinary shares. On the same date, the Company granted options to purchase 300,000 ordinary shares to certain executive of the Company at an exercise price of US$9.97 per share under the 2016 Share Incentive Plan. The options expire in 10 years from the date of grant and vest ratably at each grant date anniversary over a requisite service period of five years. In September, 2016, the Board approved 2016 Share Incentive Plan (as amended and restated), the maximum aggregate number of shares which may be issued pursuant to all awards under the 2016 Plan is initially 3,000,000, plus an annual increase on the first day of each of the Company’s fiscal year during the term of the 2016 Plan commencing with the fiscal year beginning January 1, 2017, by an amount equal to the least of (i) 0.5% of the total number of shares issued and outstanding on the last day of the immediately preceding fiscal year; (ii) 3,000,000 shares or (iii) such number of shares as may be determined by our board of directors. The Group uses a binominal pricing model to estimate the fair value of the above options granted under the 2016 Share Incentive Plan. The fair value per option was estimated at the date of grant using the following weighted-average assumptions: June 20, 2016 Risk-free interest rate 2.54 % Contract life 9.7 Expected volatility range 31.25 % Expected dividend yield 3.14 % Exercise multiple 2.8x Fair value of underlying ordinary shares on the date of option grants (RMB) 67.37 The Group estimated the risk free interest rate based on the yield to maturity of U.S. treasury bonds denominated in USD and adjusted for country risk premium of PRC at the option valuation date. The expected volatility at the date of grant date and each option valuation date was estimated based on the annualized standard deviation of the daily return embedded in historical share prices of comparable peer companies with a time horizon close to contract life. The Group estimated dividend yield based on the average dividend yield of comparable peer companies. In April 2018, the Company granted 125,000 options with exercise price of nil to certain executive. The options vested immediately and was fully exercised as of December 31, 2018. The Company has recorded share based compensation expense in selling, general and administrative expenses based on grant date fair value of options, totalled at RMB13,148, in the consolidated statement of comprehensive income for the year ended December 31, 2018. In May 2018, the Group cancelled 300,000 share options granted in June 2016. Total unrecognized share-based compensation expense of RMB3,261 was recorded as share based compensation expense and included in selling, general and administrative expenses in the consolidated statement of comprehensive income for the year ended December 31, 2018. A summary of changes in the share options relating to ordinary shares granted by the Company during the year ended December 31, 2018 is as follows: Weighted Weighted average Aggregate Number of average remaining Intrinsic share options exercise price contractual life Value of option Outstanding at January 1, 2018 300,000 66.26 years 11,477 Granted 125,000 105.25 year 13,148 Exercised 125,000 105.25 year 13,148 Cancelled 300,000 66.26 year 11,477 Outstanding at December 31, 2018 — — Restricted share units On March 28, 2017, the Group granted 679,645 restricted share units (“RSU”) at par value to certain director, executive offices and employees pursuit to the 2016 Share Incentive Plan. These grants are subject to vesting ratably over a period of three years from the grant date. As of December 31, 2018, there was RMB22,596 of total unrecognized compensation expense related to unvested restricted share units. That cost is expected to be recognized over a weighted-average period of 1.17 years. The Group recorded the share-based compensation of RMB16,419 and RMB21,192 based on the market price of ordinary shares at USD12.88 on the grant date in the consolidated statement of comprehensive income for the year ended December 31, 2017 and 2018, respectively. On March 7, 2018, the Group granted 852,390 restricted share units (“RSU”) at par value to certain director, executive offices and employees pursuit to the 2016 Share Incentive Plan. These grants are vested immediately upon grant. The Group recorded the share-based compensation of RMB91,150 based on the market price of ordinary shares at USD16.99 on the grant date in the consolidated statement of comprehensive income for the year ended December 31, 2018. |
Ordinary shares
Ordinary shares | 12 Months Ended |
Dec. 31, 2018 | |
Ordinary shares | |
Ordinary shares | 15. Ordinary shares As disclosed in Note 14, on June 28, 2016, 16 million ordinary shares of the Company were issued to ZTO ES to establish a reserve pool for future issuance of equity share incentive to the Group’s employees. All shareholder rights of these 16 million ordinary shares including but not limited to voting rights and dividend rights are unconditionally waived until the corresponding Ordinary Share Units are transferred to the employees. While the ordinary shares were legally issued to ZTO ES, ZTO ES does not have any of the rights associated with the ordinary shares, as such the Company accounted for these shares as issued but not outstanding ordinary shares until the waiver is released by the Company, which occurs when Ordinary Shares Units are awarded to the employees. 10,841,836 and 9,682,255 ordinary shares transferred to ZTO ES are considered issued but not outstanding as of December 31, 2017 and 2018, respectively. Prior to the consummation of the IPO, on October 27, 2016, pursuant to the revised Articles of Association, the Company's authorized share capital was reclassified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share being entitled to one vote and each Class B ordinary share being entitled to ten votes on all matters that are subject to shareholder vote. Both Class A ordinary shares and Class B ordinary shares are entitled to the same dividend right. The holders of the Group's ordinary shares are entitled to such dividends as may be declared by the board of directors subject to the Companies Law. The authorized 10,000,000,000 share of the Company was comprised of 8,000,000,000 Class A ordinary shares, 1,000,000,000 Class B ordinary shares and 1,000,000,000 shares designated as the board of directors may determine. Upon such re-designation, the Company had 453,206,440 Class A ordinary shares issued and 442,364,604 Class A ordinary shares outstanding; and 206,100,000 Class B ordinary shares issued and outstanding. All of the Class B ordinary shares were held by the Chairman of the Company. Upon the IPO in October 2016, the Company issued 72,100,000 Class A ordinary shares. On May 29, 2018, Alibaba Group Holding Limited (“Alibaba”) and its logistic arm Cainiao Network (“Cainiao”), and the Company announced a strategic agreement in which investors led by Alibaba and Cainiao invested US$1.38 billion in the Company in exchange for an approximately 10% equity stake in the company, accordingly, the Company issued 79,861,111 Class A ordinary shares. The transaction was closed by the end of June 2018. |
Earnings per share and dividend
Earnings per share and dividends per share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings per share and dividends per share | |
Earnings per share and dividends per share | 16. Earnings per share and dividends per share The Group has used the two-class method of computing earnings per share as its Series A convertible redeemable preferred shares participate in undistributed earnings on the same basis as the ordinary shares. Under this method, net income applicable to holders of ordinary shares is allocated on a prorate basis to the ordinary and preferred shares to the extent that each class may share in income for the period had it been distributed. Losses are not allocated to the participating securities. Diluted earnings per share are computed using the more dilutive of (a) the two-class method or (b) the if-converted method. Upon the consummation of the Company's IPO on October 27, 2016, the convertible redeemable preferred shares were automatically converted into Class A ordinary shares. The two-class method of computing earnings per share ceased to apply on the conversion date. Basic and diluted earnings per share for each of the years presented are calculated as follows: Years ended December 31, 2016 2017 2018 RMB RMB RMB Numerator: Net income attributable to ZTO Express (Cayman) Inc. 2,053,855 3,159,663 4,383,025 Less: Change in redemption value for redeemable preferred shares (133,568) — — Earnings attributable to participating securities (71,819) — — Net income attributable to ordinary shareholders in computing basic and diluted earnings per share 1,848,468 3,159,663 4,383,025 Shares (Denominator): Weight average ordinary shares outstanding—basic 634,581,307 717,138,526 751,814,077 Plus: Shares for option — 49,054 19,376 Shares for Ordinary Share Units and restricted share units — 411,982 839,503 Weight average ordinary shares outstanding—diluted 634,581,307 717,599,562 752,672,956 Earnings per share—basic 2.91 4.41 5.83 Earnings per share—diluted 5.82 Diluted earnings per share were computed using the two-class method for the years ended December 31, 2016 as it is more dilutive than the if converted method. 10,841,836, 10,841,836 and 9,682,255 ordinary shares transferred to ZTO ES were considered issued but not outstanding as of December 31, 2016, 2017 and 2018 , respectively, and therefore not included in the calculation of basic and dilutive earnings per share. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related party transactions | |
Related party transactions | 17. Related party transactions The table below sets forth the major related parties and their relationships with the Group: Name of related parties Relationship with the Group Tonglu Tongze Logistics Ltd and its subsidiaries Majority equity interests held by the employees of the Group Shanghai Mingyu Barcode Technology Ltd. Controlled by brother of chairman of the Group Fengwang Investments Ltd. Group’s equity investee Heilongjiang Ruston Express Ltd. Group’s equity investee Shanghai Kuaibao Network Technology Ltd. Group’s equity investee Quanzhou Zhongtong Express Ltd Group’s equity investee until December 2017 Suzhou Zhongtong Express Ltd. Group’s equity investee until the Group’s acquisition of this entity in January 1, 2016 ZTO Lianshang Technology Co., Ltd. Group’s equity investee ZTO Supply Chain Management Co., Ltd. (1) Group’s equity investee Zto Es Holding Limited. Entity controlled by Chairman of the Group (1) In June 2018, ZTO LTL went through a restructuring and as a result, became a wholly owned subsidiary of ZTO Freight (Cayman) Inc. (“ZTO Freight”), a newly established Cayman company by shareholders of ZTO LTL. The Group holds 18% equity in ZTO Freight after the restructuring. The Group contributed additional investment in ZTO Freight by USD19,000 (approximate to RMB130,150) and its equity interest decreased to 17.7% due to the additional capital contributions from other shareholders in 2018. (a) The Group entered into the following transactions with its related parties: Years ended December 31, 2016 2017 2018 RMB RMB RMB Gain on disposal of subsidiary derived from ZTO Lianshang Technology Co., Ltd. — — 12,904 Rental income derived from ZTO Supply Chain Management Co., Ltd. — 9,436 11,103 Transportation service fees paid to Tonglu Tongze Logistics Ltd and its subsidiaries 853,198 809,415 547,500 ZTO Supply Chain Management Co., Ltd. 12,779 35,421 40,280 Total 865,977 844,836 587,780 Purchases of supplies from Shanghai Mingyu Barcode Technology Ltd. 88,884 43,064 90,051 On June 28, 2016, the Company issued 16 million ordinary shares to ZTO ES. At the time of issuance, all shareholder rights associated with these 16 million ordinary shares including but not limited to voting right and dividend right were waived initially until such time when the economic interests in the ordinary shares are granted to the employees, through transfer of interests in the LLPs. Pursuant to board of director resolutions, 5,158,164 of which ordinary share were granted by the Group during the year ended December 31, 2016. As of December 31, 2016, all shareholder rights associated with the remaining 10,841,836 ordinary shares were still waived. In September 2016, Mr. Meisong Lai paid RMB11,789 to the Company as additional capital contribution recorded in additional paid-in capital in its consolidated balance sheets as of December 31, 2016. In March 2018, the Group invested in a newly established company, named ZTO Lianshang Technology, with consideration of RMB7,500 in exchange for 15% equity interest. In July 2018, the Company entered into an agreement with ZTO Lianshang Technology whereby the Company disposed of a wholly-owned subsidiary to ZTO Lianshang Technology Co., Ltd. for cash consideration of RMB10,000. The gain on disposal for the year ended December 31, 2018 amounted to RMB12,904, which has been recorded in gain on disposal of equity investees and subsidiary in the consolidated statements of comprehensive income. (b) The Group had the following balances with its related parties: As of December 31, 2017 2018 RMB RMB Amounts due to Tonglu Tongze Logistics Ltd. and its subsidiaries 45,483 Shanghai Mingyu Barcode Technology Ltd. 17,237 ZTO Supply Chain Management Co., Ltd. 69,496 Total 132,216 Amounts due to related parties consisted of accounts payable to related parties for transportation, waybill material and deposits as of December 31, 2017 and 2018, respectively. (c) The Group had the following balances with its related parties: As of December 31, 2017 2018 RMB RMB Amounts due from Shanghai Kuaibao Network Technology Ltd. (1) 9,900 6,600 Total 9,900 6,600 (1) Amounts due from related parties are loan to related parties. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and contingencies | |
Commitments and contingencies | 18. Commitments and contingencies Operating Leases Commitments The Group leases office space, sorting hubs and warehouse facilities under non-cancellable operating lease agreements that expire at various dates through December 2032. During the three years ended December 31, 2016, 2017 and 2018, the Group incurred rental expenses amounting to RMB146,780, RMB195,176 and RMB 271,630, respectively. As of December 31, 2018, minimum lease payments under all non-cancellable leases are as follows: Years ending December 31, RMB 2019 167,585 2020 152,779 2021 103,181 2022 85,816 2023 61,779 2024 and after 411,050 Total lease commitment 982,190 Capital Commitments The Group's capital commitments primarily relate to commitments on construction of office building, sorting hubs and warehouse facilities. Total capital commitments contracted but not yet reflected in the consolidated financial statements amounted to RMB 930,958 as of December 31, 2018. All of these capital commitments will be fulfilled in the following years based on the construction progress. Contingencies The Group is subject to periodic legal or administrative proceedings in the ordinary course of business. The Group does not believe that any currently pending legal or administrative proceeding to which the Group is a party will have a material effect on its business or financial condition. The Group has not made adequate contributions to employee benefit plans, as required by applicable PRC laws and regulations, but the Group has recorded accruals for the estimated underpaid amounts in the consolidated financial statements. However, the Group has not made any accruals for the interest on underpayments and penalties that may be imposed by the relevant PRC government authorities in the consolidated financial statements as the Group believes it would be unlikely that the relevant PRC government authorities will impose any significant interests or penalties. Starting in May 2017, the Company, certain directors and officers of the Company, and the underwriters of the Company's initial public offering in October 2016 have been named as defendants in the three putative securities class actions. Management of the Company believes that the claims are without merit and intends to defend vigorously. |
Repurchase of ordinary share of
Repurchase of ordinary share of ZTO Express | 12 Months Ended |
Dec. 31, 2018 | |
Repurchase of ordinary share of ZTO Express | |
Repurchase of ordinary share of ZTO Express | 19. Repurchase of ordinary share of ZTO Express In November 2014, the Group repurchased an aggregate of 13,800,000 ordinary shares of ZTO Express from certain shareholders at RMB16.67 per share for total cash consideration of RMB230 million, which approximated fair value. Consideration of RMB46 million was not paid as of December 31, 2016, 2017 and 2018. On May 21, 2017, the Company announced a share repurchase program whereby ZTO is authorized to repurchase its own Class A ordinary shares in the form of ADSs with an aggregate value of up to US$300 million during the 12-month period thereafter. As of December 31, 2017, the Company has purchased an aggregate of 9,759,888 ADSs at an average purchase price of US$14.12, for total cash consideration of RMB914,611 , including repurchase commissions, among which RMB56,953 was not paid as of December 31, 2017 and has been paid in January 2018. As of December 31, 2018, the Company has purchased an aggregate of 15,625,375 ADSs at an average purchase price of US$14.42, for total cash consideration of RMB1,465,942, including repurchase commissions, which has been fully paid as of December 31, 2018, under this share repurchase program. On November 14, 2018, the Company announced a new share repurchase program whereby ZTO is authorized to repurchase its own Class A ordinary shares in the form of ADSs with an aggregate value of up to US$500 million during an 18-month period thereafter. The Company expects to fund the repurchase out of its existing cash balance. As of December 31, 2018, the Company has purchased an aggregate of 1,700,000 ADSs at an average purchase price of US$15.85 per ADS, for total cash consideration of RMB185,673 including repurchase commissions, among which RMB24,149 was not paid as of December 31, 2018 and has been paid in January 2019. |
Convertible redeemable preferre
Convertible redeemable preferred shares | 12 Months Ended |
Dec. 31, 2018 | |
Convertible redeemable preferred shares | |
Convertible redeemable preferred shares | 20. Convertible redeemable preferred shares In 2015, the Company issued 30,079,918 shares of Series A preferred shares (“Preferred Shares”) at a per-share purchase price of about US$9.97 (equivalent to RMB64.58) for a total consideration of US$300 million (equivalent to RMB1,943 million) to a group of unrelated third-party investors. Given the nature of certain key terms of the Preferred Shares as listed below, the Company has classified the Preferred Shares as mezzanine equity. The key terms of the Preferred Shares are as follows: Conversion Each holder of Preferred Shares shall have the right, at such holder’s sole discretion, to convert all or any portion of the Preferred Shares into ordinary shares based on a one-for-one basis at any time. The initial conversion price is the issuance price of Preferred Shares, subject to adjustment in the event of (1) stock splits, share combinations, share dividends and distribution, recapitalizations and similar events, and (2) issuance of new securities at a price per share less than the conversion price in effect on the date of or immediately prior to such issuance. In that case, the conversion price shall be reduced concurrently to the subscription price of such issuance. The Preferred Shares will be automatically converted into ordinary shares at the then applicable conversion price upon the earlier of (1) the closing of a Qualified Initial Public Offering (QIPO), which refers to a firm underwritten initial public offering of the Company’s ordinary shares for trading on the New York Stock Exchange, NASDAQ Global Market, Main Board of the Hong Kong Stock Exchange or any other stock exchange as approved by a majority of the Company’s shareholders; or (2) the date specified by written consent or agreement of majority holders of Preferred Shares. Upon the closing of a QIPO, the conversion of the Preferred Share is subject to a Guarantee Return provision which is defined as below: Upon consummation of a QIPO, valuation of Preferred Shares determined by reference to the per-share offering price in the QIPO shall not be less than the Guaranteed Return which is the lower of (i) the aggregate purchase price for the Preferred Shares subscribed prior to the consummation of a QIPO plus return on such investment calculated based on 25% per annual compound rate of return; or (ii) 200% of the aggregate purchase price for the Preferred Shares. If the valuation of all or the portion of the Preferred Shares determined by reference to the offering price in the IPO shall be less than the Guaranteed Return upon the completion of the QIPO (such shortfall, the “Shortfall Amount”), the Company is obligated issue warrants to such preferred shareholders or have the conversion price or conversion rate applicable to the Preferred Shares automatically adjusted or cash or share compensation (at the election of preferred shareholders) shall be payable from the Company according to the shortfall amount. The Group has determined that there was no beneficial conversion feature (“BCF”) attributable to the Preferred Shares, as the effective conversion price was greater than the fair value of the ordinary shares on the respective commitment date. The Group will reevaluate whether additional BCF is required to be recorded upon the modification to the effective conversion price of the Preferred Shares, if any. Voting Rights The Preferred Shareholders are entitled to vote with ordinary shareholders on an as-converted basis. Dividends The Preferred Shareholders participate in dividends on an as-converted basis and must be paid prior to any payment on ordinary shares. Redemption In the event that a QIPO has not been completed by August 18, 2019 (the fourth anniversary of the first closing date), holders of the Preferred Shares may at any time thereafter require that the Company redeem all or a portion of the Preferred Shares held by such holder at a redemption price per share equal to the sum of (i) an amount equal to the original issuance price plus annual rate of return of 8% from the date that such holder made payment to the Company, and (ii) all dividends accrued and unpaid with respect thereto (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions). Management of the Group evaluated on the issuance date of preferred shares that the redemption is probable to occur until the occurrence of the IPO. Therefore, the preferred shares were recorded at fair value on closing dates, and subsequently accreted to redemption value based on the terms stipulated in the shareholder agreement. Changes in the redemption value are recorded against retained earnings. All of the preferred shares were converted to ordinary shares immediately upon the completion of the Group’s IPO on October 27, 2016. The following is the rollforward of the carrying amounts of Preferred Share for the year ended December 31, 2016: Balance as of January 1, 2016 1,976,855 Issuance of Preferred Shares 133,568 Change in redemption value (2,110,423) Balance as of December 31, 2016 — Liquidation In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, all assets and funds of the Company legally available for distribution to the shareholders (after satisfaction of all creditors’ claims and claims that may be preferred by law) shall be distributed to all shareholders on parity with each other and shall be made ratably to the holders of the outstanding Preferred Shares and Ordinary Shares, on an asconverted to Ordinary Share basis determined pursuant to an Optional Conversion as of the time of such distribution. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans | |
Employee Benefit Plans | 21. Employee Benefit Plans The Group's PRC subsidiaries are required by law to contribute a certain percentages of applicable salaries for retirement benefits, medical insurance benefits, housing funds, unemployment and other statutory benefits for full time employees. The Group contributed RMB168,688, RMB158,389 and RMB195,101 for the years ended December 31, 2016, 2017 and 2018, respectively, for such benefits and has no legal obligation for the benefits beyond the contribution made. The PRC government is responsible for the medical benefits and ultimate liability to those employees. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Information | |
Segment Information | 22. Segment Information The Group has only one reportable segment since the Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. The Group's chief operating decision maker, who has been identified as the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole. The Group does not distinguish among markets or segments for the purpose of internal reports. Majority of the Company's revenues for the years ended December 31, 2016, 2017 and 2018 were generated from the PRC. As of December 31, 2017 and 2018, all of the long-lived assets of the Group are located in the PRC, and no geographical segments are presented. |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2018 | |
Restricted Net Assets | |
Restricted Net Assets | 23. Restricted Net Assets Pursuant to the laws applicable to the PRC's Foreign Investment Enterprises and local enterprises, the Group's entities in the PRC must make appropriation from after-tax profit to non-distributable reserve funds as determined by the Board of Directors of the Company. PRC laws and regulations permit payments of dividends by the Company's subsidiaries and VIE incorporated in the PRC only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the Company's subsidiaries and VIE incorporated in the PRC are required to annually appropriate 10% of their net income to the statutory reserve prior to payment of any dividends, unless such reserve has reached 50% of their respective registered capital. In addition, registered share capital and capital reserve accounts are also restricted from withdrawal in the PRC, up to the amount of net assets held in each subsidiary and VIE. The appropriation to these reserves by the Company's PRC entities were RMB180,976, RMB291,064 and RMB353,803 for the years ended December 31, 2016, 2017 and 2018, respectively. The accumulated reserves as of December 31, 2017 and 2018 were RMB627,239 and RMB981,042, respectively. As a result of these PRC laws and regulations and the requirement that distributions by PRC entities can only be paid out of distributable profits computed in accordance with PRC GAAP, the PRC entities are restricted from transferring a portion of their net assets to the Group. Amounts restricted include paid-in capital and the statutory reserves of the Company's PRC subsidiaries and VIE. As of December 31, 2018, the aggregate amount of capital and statutory reserves restricted which represented the amount of net assets of the relevant subsidiaries and VIE in the Group not available for distribution was RMB9,867,680. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | 24. Subsequent Events On March 11, 2019, the Group granted 1,076,532 Restricted Share Units to certain director, executive officers and employees pursuant to the 2016 Share Incentive Plan. In addition, the Group granted Ordinary Share Units with 944,577 Class A ordinary shares through its employee incentive platform to certain executive officers and employees at nil subscription consideration. These grants vested immediately upon grant. On March 18, 2019, the board of directors approved a special dividend of US$0.24 per ADS for 2018, to be paid to shareholders of record as of the close of business on April 1, 2019. |
FINANCIAL STATEMENTS SCHEDULE I
FINANCIAL STATEMENTS SCHEDULE I | 12 Months Ended |
Dec. 31, 2018 | |
FINANCIAL STATEMENTS SCHEDULE I | |
FINANCIAL STATEMENTS SCHEDULE I | ADDITIONAL FINANCIAL INFORMATION OF PARENT COMPANY FINANCIAL STATEMENTS SCHEDULE I ZTO EXPRESS (CAYMAN) INC. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED BALANCE SHEETS (Amounts in thousands, except for share and per share data) As of December 31, Notes 2017 2018 RMB RMB US$ (Note 2) ASSETS Current assets: Cash and cash equivalents 2,366,916 773,884 112,557 Restricted cash 156,151 — — Short-term investment 4,866,712 12,611,386 1,834,250 Prepayments and other current assets 40,929 172,251 25,053 Amounts due from subsidiaries 1,197,564 1,521,880 221,349 Total current assets 8,628,272 15,079,401 2,193,209 Deferred tax assets — 27,288 3,969 Investments in subsidiaries and VIE 12,924,039 19,227,355 2,796,503 TOTAL ASSETS 21,552,311 34,334,044 4,993,681 Other current liability 56,953 25,845 3,759 Other non-current liability 60,045 90,961 13,231 Total liabilities 116,998 116,806 16,990 Shareholders' equity: Ordinary shares (US$0.0001 par value; 10,000,000,000 ordinary shares authorized as of December 31, 2017 and 2018; 525,306,440 Class A ordinary shares issued and 504,704,716 Class A ordinary shares outstanding as of December 31, 2017; 605,167,551 Class A ordinary shares issued and 579,363,859 Class A ordinary shares outstanding as of December 31, 2018; 206,100,000 Class B ordinary shares issued and outstanding as of December 31, 2017 and 2018) 471 523 76 Additional paid-in capital 15,975,979 24,137,681 3,510,680 Treasury shares, at cost (914,611) (1,545,077) (224,722) Retained earnings 6,669,370 11,052,395 1,607,504 Accumulated other comprehensive (loss)/gain (295,896) 571,716 83,153 Total shareholders' equity 21,435,313 34,217,238 4,976,691 TOTAL LIABILITIES AND EQUITY 21,552,311 34,334,044 4,993,681 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands, except for share and per share data) Year ended December 31, 2016 2017 2018 RMB RMB RMB US$ (Note 2) Operating expenses: General and administrative (72,921) (59,214) (271,378) (39,470) Other operating income, net — 15,559 43,575 6,338 Total operating expenses (72,921) (43,655) (227,803) (33,132) Interest income 8,301 120,510 317,714 46,210 Gain/(Loss) from operations (64,620) 76,855 89,911 13,078 Income tax expense — (4,649) (43,581) (6,339) Equity in profit of subsidiaries and VIE 2,118,475 3,087,457 4,336,695 630,746 Net income 2,053,855 3,159,663 4,383,025 637,485 Change in redemption value of convertible redeemable preferred shares (133,568) — — — Net income attributable to ordinary shareholders 1,920,287 3,159,663 4,383,025 637,485 Net income 2,053,855 3,159,663 4,383,025 637,485 Other comprehensive income/(loss), net of tax of nil Foreign currency translation adjustment 308,398 (590,545) 867,612 126,189 Comprehensive income 2,362,253 2,569,118 5,250,637 763,674 CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands, except for share and per share data) Year ended December 31, 2016 2017 2018 RMB RMB RMB US$ (Note 2) Cash flows from operating activities: Net income 2,053,855 3,159,663 4,383,025 637,485 Adjustments to reconcile net income to net cash used by operating activities Share-based compensation 61,521 40,725 249,478 36,285 Equity in profit of subsidiaries and VIE (2,118,475) (3,087,457) (4,336,695) (630,746) Changes in operating assets and liabilities: Prepayments and other current assets (3,755) (37,174) (131,322) (19,100) Deferred tax assets — — (27,288) (3,969) Other non-current liability — 60,045 9,231 1,343 Net cash used in/provided by operating activities (6,854) 135,802 146,429 21,298 Cash flows from investing activities: Amounts due from subsidiaries (774,302) 680,814 (318,064) (46,260) Purchases of short-term investments — (9,716,466) (12,564,140) (1,827,378) Repayments of short-term investments — 4,679,500 5,376,252 781,943 Investments in equity investees (155,627) (1,701,629) (1,881,891) (273,710) Net cash used in investing activities (929,929) (6,057,781) (9,387,843) (1,365,405) Cash flows from financing activities: Proceeds from issuance of ordinary shares through IPO, net of issuance cost of RMB339,355 9,183,847 — — — Proceeds from issuance of ordinary shares-alibaba — — 8,891,909 1,293,275 Proceeds from issuance of ordinary shares for share based compensation 68,400 — — — Proceeds from capital contribution from shareholders 11,789 — — — Payment of dividends — — (895,136) (130,192) Share repurchase — (857,658) (769,811) (111,965) Net cash used in/provided by financing activities 9,264,036 (857,658) 7,226,962 1,051,118 Effect of exchange rate changes on cash, cash equivalents and restricted cash 212,632 (211,221) 265,269 38,581 Net change in cash, cash equivalents and restricted cash 8,539,885 (6,990,858) (1,749,183) (254,408) Cash, cash equivalents and restricted cash, beginning of year 974,040 9,513,925 2,523,067 366,965 Cash, cash equivalents and restricted cash, end of year 9,513,925 2,523,067 773,884 112,557 CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands, except for share and per share data) The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. Years ended December 31, 2016 2017 2018 RMB RMB RMB Cash and cash equivalents 9,180,661 2,366,916 773,884 Restricted cash 333,264 156,151 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows 9,513,925 2,523,067 773,884 1) Schedule 1 has been provided pursuant to the requirements of Rule 12‑04(a) and 5‑04(c) of Regulation S‑X, which require condensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company does not include condensed financial information as to the changes in equity as such financial information is the same as the consolidated statements of changes in shareholders’ equity. 2) As disclosed in Note 1 to the consolidated financial statements, the Company was incorporated on April 8, 2015 in the Cayman Islands to be the holding company of the Group. The Company undertook a series of transactions to redomicile its business from PRC to the Cayman Islands. The Company has presented Schedule I as if Cayman Islands parent company has been incorporated on January 1, 2015. 3) The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries and VIE. For the parent company, the Company records its investments in subsidiaries and VIE under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheets as “Investment in subsidiaries and VIE” and the subsidiaries and VIE’s profit or loss as “Equity in profit/loss of subsidiaries and VIE” on the Condensed Statements of Operations and Comprehensive Income. Ordinarily under the equity, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of this Schedule I, the parent company has continued to reflect its share, based on its proportionate interest, of the losses of subsidiaries and VIE regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses. 4) As of December 31, 2017 and 2018, there were no material contingencies, significant provisions of long‑term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company. 5) Translations of balances in the additional financial information of Parent Company‑ Financial Statements Schedule I from RMB into US$ as of and for the year ended December 31, 2018 are solely for the convenience of the readers and were calculated at the rate of US$1.00= RMB6.5063, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2018. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2018, or at any other rate. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). |
Principles of consolidation | (b) Principles of consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and VIE. All intercompany transactions and balances have been eliminated on consolidation. The Group evaluates the need to consolidate certain VIE of which the Group is the primary beneficiary. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. Consolidation of Variable Interest Entities Applicable PRC laws and regulations currently limit foreign ownership of companies that provide delivery services in PRC. The Company is deemed a foreign legal person under PRC laws and accordingly subsidiaries owned by the Company are ineligible to engage in provisions of delivery services. To provide the Group effective control over its variable interest entity, ZTO Express Co., Ltd. (“ZTO Express”) and receive substantially all of the economic benefits of ZTO Express, the Company's wholly owned subsidiary, Shanghai Zhongtongji Network Technology Ltd. (“Shanghai Zhongtongji Network”) entered into a series of contractual arrangements, described below, with ZTO Express and its individual shareholders. Agreements that provide the Company effective control over the VIE include: Voting Rights Proxy Agreement & Irrevocable Powers of Attorney Under which each shareholder of ZTO Express has executed a power of attorney to grant Shanghai Zhongtongji Network the power of attorney to act on his or her behalf on all matters pertaining ZTO Express and to exercise all of his or her rights as a shareholder of ZTO Express, including but not limited to convene, attend and vote at shareholders' meetings, designate and appoint directors and senior management members. The proxy agreement will remain in effect unless Shanghai Zhongtongji Network terminates the agreement by giving a prior written notice or gives its consent to the termination by ZTO Express. Exclusive Call Option Agreement Under which the shareholders of ZTO Express granted Shanghai Zhongtongji Network or its designated representative(s) an irrevocable and exclusive option to purchase their equity interests in ZTO Express when and to the extent permitted by PRC law. Shanghai Zhongtongji Network or its designated representative(s) has sole discretion as to when to exercise such options, either in part or in full. Without Shanghai Zhongtongji Network's written consent, the shareholders of ZTO Express shall not transfer, donate, pledge, or otherwise dispose any equity interests of ZTO Express in any way. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time when the option is exercised. The agreement can be early terminated by Shanghai Zhongtongji Network, but not by ZTO Express or its shareholders. Equity Pledge Agreement Under which the shareholders of ZTO Express pledged all of their equity interests in ZTO Express to Shanghai Zhongtongji Network as collateral to secure their obligations under the above agreement. If the shareholders of ZTO Express or ZTO Express breach their respective contractual obligations, Shanghai Zhongtongji Network, as pledgee, will be entitled to certain rights, including the right to dispose the pledged equity interests. Pursuant to the agreement, the shareholders of ZTO Express shall not transfer, assign or otherwise create any new encumbrance on their respective equity interest in ZTO Express without prior written consent of Shanghai Zhongtongji Network. The equity pledge right held by Shanghai Zhongtongji Network will expire when the shareholders of ZTO Express and Shanghai Zhongtongji Network have fully performed their respective obligations under the Consulting Services Agreement and Operating Agreement, or the shareholder is no longer a shareholder of ZTO Express or the satisfaction of all its obligations by ZTO under the VIE contractual arrangements. The agreements that transfer economic benefits to the Company include: Exclusive Consulting and Services Agreement Under which ZTO Express engages Shanghai Zhongtongji Network as its exclusive technical and operational consultant and under which Shanghai Zhongtongji Network agrees to assist in business development and related services necessary to conduct ZTO Express's operational activities. ZTO Express shall not seek or accept similar services from other providers without the prior written approval of Shanghai Zhongtongji Network. The agreements will be effective as long as ZTO Express exists. Shanghai Zhongtongji Network may terminate this agreement at any time by giving a prior written notice to ZTO Express. Under the above agreements, the shareholders of ZTO Express irrevocably granted Shanghai Zhongtongji Network the power to exercise all voting rights to which they were entitled. In addition, Shanghai Zhongtongji Network has the option to acquire all of the equity interests in ZTO Express, to the extent permitted by the then-effective PRC laws and regulations, for nominal consideration. Finally, Shanghai Zhongtongji Network is entitled to receive service fees for certain services to be provided to ZTO Express. The Call Option Agreement and Voting Rights Proxy Agreement provide the Company with effective control over the VIE and its subsidiaries, while the Equity Interest Pledge Agreements secure the obligations of the shareholders of ZTO Express under the relevant agreements. Because the Company, through Shanghai Zhongtongji Network, has (i) the power to direct the activities of ZTO Express that most significantly affect the entity's economic performance and (ii) the right to receive substantially all of the benefits from ZTO Express, the Company is deemed the primary beneficiary of ZTO Express. Accordingly, the Company consolidates the ZTO Express's financial results of operations, assets and liabilities in the Company's consolidated financial statements. The aforementioned Control Documents are effective agreements between a parent and a consolidated subsidiary, neither of which is accounted for in the consolidated financial statements or is ultimately eliminated upon consolidation, such as the service fees provided under the Consulting Services Agreement and Operating Agreement. The Group believes that the contractual arrangements with the VIE are in compliance with the PRC law and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including: · revoking the business licenses and/or operating licenses of such entities; · discontinuing or placing restrictions or onerous conditions on the Group's operation through any transactions between the Group's PRC subsidiaries and consolidated affiliated entities; · imposing fines, confiscating the income from PRC subsidiaries or consolidated affiliated entities, or imposing other requirements with which such entities may not be able to comply; · requiring the Group to restructure its ownership structure or operations, including terminating the contractual arrangements with its variable interest entity and deregistering the equity pledges of its variable interest entity, which in turn would affect the Group's ability to consolidate, derive economic interests from, or exert effective control over its variable interest entity, or · restricting or prohibiting the Group’s use of the proceeds of its initial public offering to finance its business and operations in China. The following amounts and balances of ZTO Express and its subsidiaries (the “VIE”) were included in the Group's consolidated financial statements after the elimination of intercompany balances and transactions: As of December 31, 2017 2018 RMB RMB Assets Current assets: Cash and cash equivalents 930,829 575,605 Restricted cash 192,559 400 Accounts receivable, net 286,286 519,389 Inventories 32,571 40,480 Advances to suppliers 60,369 118,216 Prepayments and other current assets 581,825 984,004 Amounts due from related parties 9,900 6,600 Total current assets 2,094,339 2,244,694 Investments in equity investees 272,195 124,590 Property and equipment, net 3,545,635 4,541,751 Land use rights, net 1,077,385 1,085,729 Goodwill 4,157,111 4,157,111 Deferred tax assets 91,586 213,745 Other non-current assets 70,609 118,858 TOTAL ASSETS 11,308,860 12,486,478 Liabilities Current liabilities: Short-term bank borrowing 250,000 — Accounts payable 774,182 1,093,822 Advances from customers 256,893 435,784 Income tax payable 110,116 16,692 Amounts due to related parties 857,665 622,298 Other current liabilities 1,625,089 2,119,810 Total current liabilities 3,873,945 4,288,406 Deferred tax liabilities 96,582 94,364 TOTAL LIABILITIES 3,970,527 4,382,770 Years ended December 31, 2016 2017 2018 RMB RMB RMB Total revenue 9,788,768 12,866,016 17,127,930 Net income 472,753 726,915 720,323 Net cash generated from operating activities 1,451,316 1,256,049 436,074 Net cash used in investing activities (1,680,896) (703,679) (777,197) Net cash provided by (used in) financing activities 151,056 (203,900) (206,260) Net increase (decrease) in cash and cash equivalents (78,524) 348,470 (547,383) Cash and cash equivalents and restricted cash at beginning of year 853,442 774,918 1,123,388 Cash and cash equivalents and restricted cash at end of year 774,918 1,123,388 576,005 The VIE contributed 100%, 98.5% and 97.3% of the Group's consolidated revenues for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2017 and 2018, the VIE accounted for an aggregate of 44% and 31%, respectively, of the consolidated total assets, and 91% and 81%, respectively, of the consolidated total liabilities. Total assets not associated with the VIE mainly consisted of cash and cash equivalents, short-term investment and property and equipment. The VIE pays transportation fees and service fees pursuant to the Exclusive Consulting and Services Agreements to Shanghai Zhongtongji Network (the “WFOE”) based on the VIE’s operating results and WFOE’s operating cost of sorting hubs and the Group’s owned fleet. The WFOE is entitled to receive substantially all of the net income and transfer a majority of the economic benefits in the form of service fees from the VIEs. Group has historically presented net income of VIE before deductions of inter-company transportation fees and service fees charged by WOFE, which amounted to RMB4,145,150 and RMB5,982,432 for the year ended December 31, 2016 and 2017. The Group started to present net income of VIE after deduction of inter-company transportation fees and service fees charged by WOFE for the year ended December 31, 2018 with prior year disclosure revised for consistent presentation. The inter-company transportation fees and service fees charged by WOFE is RMB7,776,622 for the year ended December 31, 2018. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIE. However, if the VIE was ever to need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIE through loans to the shareholders of the VIE or entrustment loans to the VIE. The Group believes that there are no assets held in the consolidated VIE that can be used only to settle obligations of the VIE, except for registered capital and the PRC statutory reserves. As the consolidated VIE is incorporated as a limited liability company under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company for any of the liabilities of the consolidated VIE. Relevant PRC laws and regulations restrict the VIE from transferring a portion of their net assets, equivalent to the balance of its statutory reserve and its share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 23 for disclosure of restricted net assets. Nonconsolidated Variable Interest Entity Tonglu Tongze Logistics Ltd. and its subsidiaries (“Tonglu”), established in 2013, is a transportation service company providing line-haul transportation services to the Group. Tonglu is majority owned by the employees of the Group who are considered as related parties to the Group. The Group has concluded that it is not the primary beneficiary of Tonglu as it does not have the obligation to absorb losses of Tonglu that could potentially be significant to Tonglu or the right to receive benefits from Tonglu that could potentially be significant to Tonglu. The Group held variable interests in Tonglu in the form of a waiver of management fees and an outstanding loan receivable of RMB15 million as of December 31, 2015 that was repaid in full in 2016. As of December 31, 2018, the Group has no exposure to loss included in the Group’s consolidated balance sheets as a result of the Group’s variable interest in Tonglu. The Group had transactions with Tonglu for the years ended December 31, 2016, 2017 and 2018 and amounts due to Tonglu as of December 31, 2017 and 2018 for transportation service received from Tonglu, in connection with a contractual arrangement and considered by management to be on terms that are commensurate with market. Transactions and balances relating to the transportation services are disclosed in Note 17 (a) and (b). |
Use of estimates | (c) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates. The Group bases its estimates on historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Significant accounting estimates reflected in the Group's financial statements include assessment of useful lives of long-lived assets, valuation of ordinary shares and share-based compensation, realization of deferred tax assets, impairment assessment of long-lived assets and goodwill and assumptions used to determine the fair value of the assets acquired through business combination. Actual results may differ materially from those estimates. |
Fair value | (d) Fair value Fair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. Authoritative literature provides a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Group has stock unit awards payable that was required to be measured at fair value on a recurring basis at the end of each reporting period prior to June 28, 2016. Change in fair value and inputs in the valuations are disclosed in Note 14. The carrying values of financial instruments, which consist of cash and cash equivalents, accounts receivable, financing receivable, short-term investment, amounts due from related parties, advances to suppliers, prepayments and other current assets, short-term bank borrowing, accounts payable, advances from customers, amounts due to related parties, and other current liabilities are recorded at cost which approximates their fair value due to the short-term nature of these instruments. The Group measures certain assets, including the equity method investments, at fair value on a nonrecurring basis when they are deemed to be impaired. The fair values of these investments are determined based on valuation techniques using the best information available, and may include management judgments, future performance projections, etc. An impairment charge to these investments is recorded when the carry amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. During the years ended December 31, 2016, 2017 and 2018, the Group recognized impairment of investment in equity investees in the amount of nil, RMB30,000 and nil, respectively. Certain non-financial assets are measured at fair value on a nonrecurring basis, including property, plant, and equipment, goodwill and intangible assets and they are recorded at fair value only when impairment is recognized by applying unobservable inputs such as forecasted financial performance of the acquired business, discount rate, etc. to the discounted cash flow valuation methodology that are significant to the measurement of the fair value of these assets. |
Foreign currency translation | (e) Foreign currency translation The Group’s reporting currency is Renminbi (“RMB”). The functional currency of the Company and subsidiaries incorporated outside the mainland China are the United States dollar (“US dollar” or “US$”). The functional currency of all the other subsidiaries and the VIE is RMB. The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters. Transactions denominated in currencies other than functional currency are translated into functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded in the Consolidated Statements of Operations and Comprehensive Income. The financial statements of the Group are translated from the functional currency into RMB. Assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in current period are translated into RMB at the appropriate historical rates. Revenues, expenses, gains and losses are translated into RMB at the average rates of exchange for the year. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive income as a component of shareholders’ equity. |
Convenience translation | (f) Convenience translation The Group's business is primarily conducted in China and almost all of the Group’s revenues are denominated in RMB. However, periodic reports made to shareholders will include current period amounts translated into US dollars using the then current exchange rates, solely for the convenience of the readers. Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from RMB into US dollars as of and for the year ended December 31, 2018 were calculated at the rate of US$1.00=RMB6.8755, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2018. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2018, or at any other rate. |
Cash and cash equivalents | (g) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments which are unrestricted as to withdrawal or use, and which have maturities of three months or less when purchased. |
Restricted cash | (h) Restricted cash Restricted cash represents (a) cash received from network partners that was immediately restricted for use until the final delivery of parcel to the recipients; and (b) secured deposits held in designated bank accounts for issuance of bank acceptance notes and letter of guarantee for short-term borrowings. |
Short-term investment | (i) Short-term investment Short-term investment primarily comprises of the time deposits with maturities between three months and one year, and investments in wealth management products with variable interest rates or principal not-guaranteed with certain financial institutions, whereby the Group has the intent and the ability to hold to maturity within one year. The Group classifies the short-term investment as “Held-to-maturity” securities and stated at amortized cost. For investments classified as held-to-maturity securities, the Group evaluates whether a decline in fair value below the amortized cost basis is other-than-temporary in accordance with the Company’s policy and ASC 320. The other-than-temporary impairment loss is recognized in earnings equal to the entire excess of the investment’s amortized cost basis over its fair value at the balance sheet date of the reporting period for which the assessment is made. No impairment losses in relation to its short-term investments were recorded for the year ended 2017 and 2018. The Group recorded the interest income of RMB74,127 and RMB307,084 from the short-term investments in the consolidated statements of comprehensive income for the year ended December 31, 2017 and 2018, respectively. |
Financing Receivables | (j) Financing receivables The Group started to provide financing services to certain of its network partner in 2017 with credit term mainly ranging from 3 months to one year. Such amounts are recorded at the outstanding principal amount less allowance for doubtful accounts and include accrued interest receivable as of the balance sheet date. Allowance for doubtful accounts relating to financing receivables represents the Group's best estimate of the losses inherent in the outstanding portfolio of financing receivables. Nil and RMB 4,139 for doubtful accounts relating to financing receivables was recorded for the year ended December 31, 2017 and 2018, respectively. Interest revenue generated from the financing receivable are immaterial for the periods presented. |
Property and equipment, net | (k) Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Leasehold improvements Lesser of lease term or estimated useful life of 3 years Furniture, office and electric equipment 3 to 5 years Machinery and equipment 10 years Vehicles 5 years Buildings 20 years |
Intangible assets | (l) Intangible assets Intangible assets include customer relationship acquired in a business combination which are recognized initially at fair value at the date of acquisition and are carried at cost less accumulated amortization. Amortization of customer relationship is computed using the straight-line method over 10 years. See Note 3 “Business Combination” for further details. |
Investments in equity investees | (m) Investments in equity investees Investments in equity investees of the Group are comprised of investments in privately-held companies. The Group uses the equity method to account for an equity investment over which it has significant influence but does not own a majority equity interest or otherwise control. The Group records equity method adjustments in share of profits and losses. Equity method adjustments include the Group's proportionate share of investee income or loss, adjustments to recognize certain differences between the Group's carrying value and its equity in net assets of the investee at the date of investment, impairments, and other adjustments required by the equity method. Dividends received are recorded as a reduction of carrying amount of the investment. Cumulative distributions that do not exceed the Group's cumulative equity in earnings of the investee are considered as a return on investment and classified as cash inflows from operating activities. Cumulative distributions in excess of the Group's cumulative equity in the investee's earnings are considered as a return of investment and classified as cash inflows from investing activities. The Group continually reviews investments in equity investees to determine whether a decline in fair value to below the carrying value is other-than-temporary. The primary factors the Group considers in determination are the duration and severity of the decline in fair value; the financial condition, operating performance and the prospects of the equity investee; and other company specific information such as recent rounds of financing. If the decline in fair value is deemed to be other-than-temporary, the carrying value of the equity investment is written down to fair value. Prior to January 1, 2018, for equity investment over which the Group does not have significant influence or control, the cost method of accounting was used. Effective from January 1, 2018, upon adoption of ASC 321, the Company elected to measure the investments without readily determinable fair value at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. There was no impairment or observable changes in price recorded during 2018 related to the Company's equity investments without readily determinable fair values. |
Impairment of long-lived assets | (n) Impairment of long-lived assets The Group evaluates the recoverability of long-lived assets with determinable useful lives whenever events or changes in circumstances indicate that an intangible asset's carrying amount may not be recoverable. The Group measures the carrying amount of long-lived asset against the estimated undiscounted future cash flows associated with it. Impairment exists when the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated as the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Group to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. No impairment charge was recognized for the years ended December 31, 2016, 2017 and 2018. |
Goodwill | (o) Goodwill Goodwill is recognized for the excess of the purchase price over the fair value of tangible and identifiable intangible net assets of business acquired. Several factors give rise to goodwill in the Group’s acquisitions, such as the expected benefit from synergies of the combination and the existing workforce of the acquired businesses. Unless circumstances otherwise dictate, goodwill is reviewed annually at December 31 for impairment. In evaluation of goodwill impairment, the Group performs a qualitative assessment to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, the Company proceeds to a two-step process to test goodwill for impairment, including comparing the fair value the reporting unit to its carrying value (including attributable goodwill). Fair value for the Group’s reporting units is determined using an income or market approach incorporating market participant considerations and management's assumptions on revenue growth rates, operating margins, discount rates and expected capital expenditures. Fair value determinations mainly include both internal and third-party valuations. No impairment charge was recognized for the years ended December 31, 2016, 2017 and 2018. |
Share-based compensation | (p) Share-based compensation The Group grants share options and Ordinary Share Units to eligible employees, management and directors and accounts for these share-based awards in accordance with ASC 718 Compensation—Stock Compensation. Employees’ share-based awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at grant date if no vesting conditions are required; or b) using graded vesting method, net of forfeitures, over the requisite service period, which is the vesting period. When there is a modification of the terms and conditions of an award, the Group measures the pre-modification and post-modification fair value of the share-based awards as of the modification date and recognizes the incremental value as compensation cost over the remaining service period. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Prior to the IPO of the Company, the fair value of the share options and Ordinary Share Units were assessed using the income approach/discounted cash flow method, with a discount for lack of marketability given that the shares underlying the awards were not publicly traded at the time of grant. This assessment required complex and subjective judgments regarding the Company’s projected financial and operating results, its unique business risks, the liquidity of its ordinary shares and its operating history and prospects at the time the grants were made. In addition, the binomial option-pricing model is used to measure the value of share options. The determination of the fair value is affected by the fair value of the ordinary shares as well as assumptions regarding a number of complex and subjective variables, including the expected share price volatility, actual and projected employee and non-employee share option exercise behavior, risk-free interest rates and expected dividends. The fair value of these awards was determined with the assistance from an independent valuation firm using management’s estimates and assumption. After the IPO of the Company, in determining the fair value of the share options and Ordinary Share Units, the closing market price of the underlying shares on the grant date is applied. The assumptions used in share-based compensation expense recognition represent management’s best estimates, but these estimates involve inherent uncertainties and application of management judgment. If factors change or different assumptions are used, the share-based compensation expenses could be materially different for any period. Moreover, the estimates of fair value of the awards are not intended to predict actual future events or the value that ultimately will be realized by grantees who receive share-based awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company for accounting purposes. |
Treasury shares | (q) Treasury shares Treasury shares represents ordinary shares repurchased by the Group that are no longer outstanding and are held by the Group. The repurchase of ordinary shares is accounted for under the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. |
Revenue recognition | (r) Revenue recognition The Group derives substantial part of its revenues from express delivery services provided to its network partners, mainly including parcel sorting and line-haul transportation. In addition, the Group directly provides 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. The Group also provides freight forwarding services to customers. Revenues generated from express delivery services and freight forwarding services, whether carried out by or arranged by ZTO generally occur over a very short period of time and are recognized over time as the Group performs the services. Revenues also include sales of accessories, such as portable barcode readers and ZTO-branded packing supplies and apparels. Revenues are recognized when control of the product is transferred to the customer and in an amount the Group expects to earn in exchange for the product. Prior to January 1, 2018, the Group recognizes express delivery services revenue when the parcels are delivered. Effective from January 1, 2018, upon adoption of ASC 606, the Group generally recognizes revenue over time as the Group performs the services in the contract because of the continuous transfer of control to the customer.The Group adopted the requirements of ASU 606 using the modified retrospective method. The cumulative adjustment to the Group’s retained earnings as of January 1, 2018 for the cumulative effect of initially applying the new standard was less than RMB 5,000 because of the short delivery period. Comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. Disaggregation of Revenue Year Ended December 31, 2016 2017 2018 RMB % RMB % RMB US$ % (in thousands) Express delivery services 9,369,693 95.7 12,173,690 93.2 15,400,080 2,239,850 87.5 Freight forwarding services — — 269,557 2.1 1,278,741 185,985 7.3 Sale of accessories 419,075 4.3 591,716 4.5 812,866 118,226 4.6 Others — — 25,110 0.2 112,764 16,400 0.6 Total revenues 9,788,768 100.0 13,060,073 100.0 17,604,451 2,560,461 100.0 Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis of revenue recognition in accordance with U.S. GAAP. To determine the proper revenue recognition method for contracts, the Group evaluates whether single contract should be treated as containing more than one performance obligation. This evaluation requires judgment, and the decision to separate one single contract into multiple performance obligations could change the amount of revenue and profit recorded in a given period. For most of the contracts, the customer contracts with us to provide distinct services within a contract, such as express delivery services. The vast majority of the contracts with customers for express delivery services include only one performance obligation, the express delivery services themselves. However, if a contract is separated into more than one performance obligation, the Group allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. The Group frequently sells standard express delivery services with observable standalone sales prices. In these instances, the observable standalone sales are used to determine the standalone selling price. Satisfaction of Performance Obligations The Group generally recognizes revenue over time as the Group performs the services in the contract because of the continuous transfer of control to the customer. The customers receive the benefit of the services as the goods are transported from one location to another. Further, if the Group was unable to complete delivery to the final location, another entity would not need to reperform the transportation service already performed. As control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The period of the completion of performance obligation is short. The Group has determined that the impact of this change to the statements of consolidated income is not material. Variable Consideration The Group provides customers with certain volume-based incentives in relation to express delivery service, which is recorded as a reduction to the revenue in the period the express delivery services are performed and earned. This causes the revenue from express delivery services to contain a variable portion called variable consideration. The Group estimates the variable consideration in the most likely amount it expects to earn. The estimation of the variable consideration to be reflected in the transaction price is based on an assessment of anticipated customer spending and all other pertinent information (historical, current and forecasted) that is reasonably available to us. Principal vs. Agent Considerations In ZTO’s express delivery business, the Group normally utilizes delivery outlets operated by its network partners to perform the dispatching services. The Group fulfills parcel sorting and line-haul transportation obligations. U.S. GAAP requires the Group to use a control-model approach to evaluate whether the Group performs services directly to the customers (as the principal) or arranges for services to be provided by another party (as the agent). In majority of the Group’s arrangements, the Group considers the pickup outlets to be its customers. Based on evaluation of the control model, the Group determined that it acts as a principal in providing sorting and line haul transportation services to the pickup outlets, and the Group acts as an agent for dispatching services as it arranges for such services to be provided by the delivery outlets. Therefore, the revenue recorded on net basis excludes the dispatching fee paid to delivery outlet. The Group also directly provides express delivery services to certain enterprise customers. According to the enterprise customers contract terms, the Group has control over the dispatching service. Therefore, the Group determined that it acts as a principal for the express delivery services provided to enterprise customers rather than an agent. Therefore, the revenues to enterprise customers are recorded on gross basis which include the dispatching fees paid to the delivery outlets. Contract Assets and Liabilities Contract assets include billed and unbilled amounts resulting from in-transit parcels, as the Group has an unconditional right to payment only once all performance obligations have been completed (i.e., packages have been delivered), and the Group’s right to payment is not solely based on the passage of time. Contract assets are generally classified as current based on the timing of when the parcels are expected to be delivered. There are RMB 4,029 and RMB 9,196 billed and unbilled receivable in relation to in-transit parcels, which are not material and recorded in accounts receivable as of December 31, 2017 and 2018, respectively. Contract liabilities consist of advance payments as well as deferred revenue. Advance payments represent payments received from the customers that are in relation to specific contracts and will be earned over the contract term. Deferred revenue represents the amount of consideration due from customers related to in-transit express delivery services revenues that have not yet been recognized. The Group classifies advance payments as current in nature given consideration the short delivery period. The Group classifies deferred revenue as current in nature based on the timing of when the Group expects to recognize revenue, which typically occurs within a short window after period-end. There are RMB 10,024 and RMB 11,239 contract liability, which are not material and recorded as advances from customers as of December 31, 2017 and 2018, respectively. |
Cost of revenues | (s) Cost of revenues Cost of revenues consists of the following: · Line-haul transportation costs, including payments to outsourced transportation companies, as well as costs associated with the Group's own transportation infrastructure; including, labor costs of truck drivers, depreciation of self-owned trucks, airfare cost, fuel cost, and road toll, · operating costs for the ZTO delivery IT platform, · cost of hub operations, such as operators' labor costs and depreciation and lease costs, and · cost of accessories including portable barcode readers, thermal papers and packaging materials. · cost of freight forwarding services, including cost of line-haul transportation and cargo handling costs. |
Income taxes | (t) Income taxes Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Group is required to estimate its income taxes in each of the jurisdictions in which it operates. The Group accounts for income taxes using the asset and liability method. Under this method, deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Net operating loss are carried forwards and credited by applying enacted statutory tax rates applicable to future years when the reported amounts of the asset or liability are expected to be recovered or settled, respectively. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The components of the deferred tax assets and liabilities are individually classified as non-current. The Group recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. |
Comprehensive income | (u) Comprehensive income Comprehensive income is defined to include all changes in equity from transactions and other events and circumstances from non-owner sources. For the years presented, the Group's comprehensive income includes net income and foreign currency translation adjustments and is presented in the consolidated statements of comprehensive income. |
Operating leases as lessee | (v) Operating leases as lessee Leases, including leases of offices and sorting hubs, where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are recognized as an expense on a straight-line basis over the lease term. The Group had no capital leases for any of the years presented herein. |
Concentration credit risk | (w) Concentration credit risk Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, financing receivables, short-term investment, other receivables and advances to suppliers and prepayments and other current assets. The Group places its cash and cash equivalents and short-term investment with financial institutions with high-credit ratings and quality. Accounts receivable primarily comprise amounts receivable from enterprise customers. Financing receivable primarily comprise financing receivable from network partners. The Group conducts a credit evaluation of these enterprise customers and network partners. With respect to other receivables, advances to suppliers, prepayments and other current assets, the Group performs on-going credit evaluations of the financial condition of its suppliers and other vendors. The Group establishes an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific customers and other information. The allowance amounts were immaterial for all periods presented. |
Earnings per share | (x) Earnings per share Basic earnings per share are computed by dividing income attributable to holders of ordinary shares by the weighted average number of ordinary shares outstanding during the period. The Company's convertible redeemable preferred shares were participating securities as the preferred shares participate in undistributed earnings on an as-if-converted basis. Accordingly, the Company used the two-class method whereby undistributed net income was allocated on a pro rata basis to each participating share to the extent that each class may share in income for the period. Diluted earnings per ordinary share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised or converted into ordinary shares. Ordinary share equivalents are excluded from the computation in income periods should their effects be antidilutive. The Group had convertible redeemable preferred shares, which could potentially dilute basic earnings per share in the future. Diluted earnings per share are computed using the two-class method or the as-if converted method, whichever is more dilutive. On October 27, 2016, the Company's shareholders voted in favor of a proposal to adopt a dual-class share structure, pursuant to which the Company's authorized share capital were reclassified and redesigned into Class A ordinary shares and Class B ordinary shares (Note 15). Both Class A ordinary shares and Class B ordinary shares are entitled to the same dividend right, as such, this dual class share structure has no impacts to the earnings per share calculation. Basic earnings per share and diluted earnings per share are the same for each Class A ordinary shares and Class B ordinary shares. Upon the consummation of the Company's IPO on October 27, 2016, the convertible redeemable preferred shares were automatically converted into Class A ordinary shares. The two-class method of computing earnings per share ceased to apply on such conversion date. |
Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Effective | (y) Adoption of New Accounting Standards In May 2014, the FASB issued an accounting standards update ("ASU") that changes the revenue recognition for companies that enter into contracts with customers to transfer goods or services ("Revenue from Contracts with Customers"). The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner depicting the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The FASB has also issued a number of updates to this standard. Effective January 1, 2018, the Group adopted the requirements of this ASU using the modified retrospective method. See note 2(r) for required disclosures pertaining to the new ASU. In January 2016, FASB issued ASU 2016-01, “Financial Instruments”, to improve the recognition and measurement of financial instruments. The Group adopted this standard on January 1, 2018. This accounting standards update does not have a material impact on the Group’s consolidated financial statements. In January 2017, FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business”. The update affects all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The update is intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update provides a more robust framework to use in determining when a set of assets and activities is a business, and also provides more consistency in applying the guidance, reduce the costs of application, and make the definition of a business more operable. For public companies, the update is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The guidance should be applied prospectively upon its effective date. The effect of ASU 2017-01 on the consolidated financial statements will be dependent on any future acquisitions. In May 2017, the FASB issued ASU 2017-09, “Compensation-Stock Compensation”, to provide clarity and reduce complexity on when to apply modification accounting to existing share-based payment awards. The guidance was applied prospectively. The Group adopted this standard in the year ended December 31, 2018. This accounting standards update does not have a material impact on its consolidated financial statements. (z) Accounting Standards Issued But Not Yet Effective In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on their balance sheet for all leases with terms beyond twelve months. The new standard also requires enhanced disclosures that will provided more transparency and information to financial statement users about the Group's lease portfolio. For finance leases, lessees will continue to recognize interest expense on the lease liability using the effective yield method, while the right-of-use asset will be amortized on a straight-line basis. For operating leases, expense will be recognized on a straight-line basis, consistent with the previous standard. The Group adopted this ASU on January 1, 2019 using the modified retrospective approach and will not restate comparative periods. The Group are substantially complete with the implementation plan. The Group plan to elect the transition package of three practical expedients permitted within the standard. In accordance with the package of practical expedients, the Group will not reassess initial direct costs, lease classification, or whether the Group’s contracts contain or are leases. The Group also made an accounting policy election to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less, unless the leases include options to renew or purchase the underlying asset that are reasonably certain to be exercised. Based on the lease portfolio as of December 31, 2018, The Group plans to recognize an operating lease liability and related right-of-use asset on the Group’s balance sheet of approximately RMB811 million and RMB838 million, respectively. The Group do not anticipate material changes to income statement or statement of cash flows. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326)”. The pronouncement changes the impairment model for most financial assets, and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. In November 2018, this was further updated with the issuance of ASU 2018-19, which excludes operating leases from the scope. The Group does not expect a material impact to its consolidated financial statement upon adoption of this accounting standards updates. In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other”, to simplify the accounting for goodwill impairment. The update removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard will be effective in the first quarter of 2020, but early adoption is permitted. The Group is currently evaluating this update to determine the full impact of its adoption but does not expect this accounting standards update to have a material impact on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of estimated useful lives for property and equipment | Leasehold improvements Lesser of lease term or estimated useful life of 3 years Furniture, office and electric equipment 3 to 5 years Machinery and equipment 10 years Vehicles 5 years Buildings 20 years |
Disaggregation of Revenue | Year Ended December 31, 2016 2017 2018 RMB % RMB % RMB US$ % (in thousands) Express delivery services 9,369,693 95.7 12,173,690 93.2 15,400,080 2,239,850 87.5 Freight forwarding services — — 269,557 2.1 1,278,741 185,985 7.3 Sale of accessories 419,075 4.3 591,716 4.5 812,866 118,226 4.6 Others — — 25,110 0.2 112,764 16,400 0.6 Total revenues 9,788,768 100.0 13,060,073 100.0 17,604,451 2,560,461 100.0 |
ZTO Express and its subsidiaries (the "VIE") | |
Schedule of financial statements after elimination of intercompany balances and transactions | As of December 31, 2017 2018 RMB RMB Assets Current assets: Cash and cash equivalents 930,829 575,605 Restricted cash 192,559 400 Accounts receivable, net 286,286 519,389 Inventories 32,571 40,480 Advances to suppliers 60,369 118,216 Prepayments and other current assets 581,825 984,004 Amounts due from related parties 9,900 6,600 Total current assets 2,094,339 2,244,694 Investments in equity investees 272,195 124,590 Property and equipment, net 3,545,635 4,541,751 Land use rights, net 1,077,385 1,085,729 Goodwill 4,157,111 4,157,111 Deferred tax assets 91,586 213,745 Other non-current assets 70,609 118,858 TOTAL ASSETS 11,308,860 12,486,478 Liabilities Current liabilities: Short-term bank borrowing 250,000 — Accounts payable 774,182 1,093,822 Advances from customers 256,893 435,784 Income tax payable 110,116 16,692 Amounts due to related parties 857,665 622,298 Other current liabilities 1,625,089 2,119,810 Total current liabilities 3,873,945 4,288,406 Deferred tax liabilities 96,582 94,364 TOTAL LIABILITIES 3,970,527 4,382,770 Years ended December 31, 2016 2017 2018 RMB RMB RMB Total revenue 9,788,768 12,866,016 17,127,930 Net income 472,753 726,915 720,323 Net cash generated from operating activities 1,451,316 1,256,049 436,074 Net cash used in investing activities (1,680,896) (703,679) (777,197) Net cash provided by (used in) financing activities 151,056 (203,900) (206,260) Net increase (decrease) in cash and cash equivalents (78,524) 348,470 (547,383) Cash and cash equivalents and restricted cash at beginning of year 853,442 774,918 1,123,388 Cash and cash equivalents and restricted cash at end of year 774,918 1,123,388 576,005 |
Prepayments and other current_2
Prepayments and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Prepayments and other current assets | |
Schedule of prepayments and other current assets | As of December 31, 2017 2018 RMB RMB Input value added tax ("VAT") 489,700 927,645 Prepaid expenses 63,780 109,702 Accrued interest income 40,447 185,555 Deposits 16,749 28,098 Others 109,307 256,996 Total 719,983 1,507,996 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and equipment, net | |
Schedule of property and equipment, net | As of December 31, 2017 2018 RMB RMB Buildings 2,697,230 3,586,898 Machinery and equipment 1,299,553 2,475,795 Leasehold improvements 262,419 344,786 Vehicles 1,545,786 2,319,342 Furniture, office and electric equipment 207,953 309,214 Construction in progress 1,434,699 1,711,971 Total 7,447,640 10,748,006 Accumulated depreciation (974,630) (1,712,302) Property and equipment, net 6,473,010 9,035,704 |
Land use rights, net (Tables)
Land use rights, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Land use rights, net | |
Schedule of land use rights are amortized using straight-line method | As of December 31, 2017 2018 RMB RMB Cost 1,688,966 2,093,750 Less: Accumulated amortization (86,058) (124,574) Land use rights, net 1,602,908 1,969,176 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible assets, net | |
Schedule of intangible assets, net | As of December 31, 2017 2018 RMB RMB Customer relationships 61,973 61,973 Less: accumulated amortization (1,549) (7,746) Customer relationships, net 60,424 54,227 |
Schedule of estimated amortization expenses for each of five succeeding fiscal years | Years ending December 31, RMB 2019 6,197 2020 6,197 2021 6,197 2022 6,197 2023 6,197 2024 and after 23,242 Total 54,227 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill | |
Schedule of changes in carrying amount of goodwill | Amount RMB Balance at January 1, 2017 4,157,111 Increase in goodwill related to acquisition of COE Business 84,430 Balance at December 31, 2017 and 2018 4,241,541 |
Investments in equity investe_2
Investments in equity investees (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Investments in equity investees | |
Schedule of investments in equity investees | As of December 31, 2017 2018 RMB RMB Investments accounted for under equity method: ZTO Supply Chain Management Co., Ltd. (“ZTO LTL”) (1) 76,014 194,235 Feng Wang Investment Co., Ltd. ("Feng Wang") (2) 51,419 52,238 Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") (3) 30,000 27,999 Others 22,328 36,225 Total investments accounted for under the equity method 179,761 310,697 Investments accounted for equity investments without readily determinable fair values: Cai Niao Smart Logistics Network Limited ("Cai Niao") (4) 212,063 224,097 Shenzhen Feng Chao Technology Ltd. (“Feng Chao”) (5) 149,230 — Wheat Commune Group Inc. ("Wheat Commune) (6) 48,228 47,552 Zhejiang Yizhan Network Technology Co., Ltd. (“Cainiao Post”) (7) — 1,075,000 Zhijiang New Industries Limited (“ZJ New Industries”) (8) — 500,000 Globaltime Inc. — 22,345 Others 20,878 27,719 Total investments accounted for equity investments without readily determinable fair values 430,399 1,896,713 Total investments in equity investees 610,160 2,207,410 (1) ZTO LTL On August 22, 2016, the Group has entered into an investment agreement with ZTO LTL and Mr. Jianfa Lai to invest cash of RMB54,000 in exchange of 18% equity interest in ZTO LTL. ZTO LTL is engaged in provision of less-than-truckload transportation services in China. The principal shareholders of ZTO LTL are also the principal shareholders of the Group. Owing to the shareholders' structure of ZTO LTL, the Group has significant influence on ZTO LTL's significant operating activities. Therefore, the investment is accounted for using the equity method. In August 2017, the Group increased investment in ZTO LTL by RMB36,000 to maintain its equity shares in ZTO LTL at 18%.In 2018, ZTO LTL went through a restructuring and as a result, became a wholly owned subsidiary of ZTO Freight (Cayman) Inc. (“ZTO Freight”), a newly established Cayman company by shareholders of ZTO LTL. The Group holds 18% equity in ZTO Freight after the restructuring.The Group contributed additional investment in ZTO Freight by USD19,000 (approximate to RMB130,150) and its equity interest decreased to 17.7% due to the additional capital contributions from other shareholders in 2018. (2) Feng Wang In December 2013, the Group entered into an agreement with other three top express delivery companies in China, to establish Feng Wang, which is to invest in the upstream industries and integrate resources across the express delivery value chain. The capital contribution by the Group was RMB50,000 in cash, representing 25% of the equity interest of Feng Wang. In 2015, the Group's equity interest to Feng Wang decreased to 20% due to the additional capital contributions from other shareholders of Feng Wang. (3) CRRC In December 2017, the Group entered into a subscription and contribution agreement with CRRC Urban Traffic Co., Ltd. and two other express delivery companies in PRC, to establish a new company named CRRC, to develop the clean energy vehicles used in the express and logistics industries. The capital contribution by the Group was RMB30,000, representing 15% of the equity interest of CRRC. The Group has one board seat out of seven of CRRC, and has a significant influence on CRRC’s significant operating activities. Therefore, the investment is accounted for using the equity method. (4) Cai Niao In May 2013, the Group entered into an investment agreement with several e-Commerce firms, investment corporations and delivery companies, to launch a new company named Cai Niao, which provides a platform that connects with a network of logistics providers through a proprietary logistics information system and facilitates the delivery of packages across PRC. The Group invested RMB50,000 in Cai Niao, and held 1% of its equity interests. In March 2016, the Group subscribed for an additional 30,000,000 ordinary shares for consideration of USD15,473 (approximate to RMB100,285) pursuant to the share subscription agreement dated as of March 11, 2016 during the new round of financing by Cai Niao. The additional subscription did not change the percentage of equity interest the Group held in Cai Niao. In October 2017, the Group subscribed for an additional 12,000,000 ordinary shares at the consideration of USD9,056 (approximate to RMB59,668) pursuant to the share subscription agreement dated October 17, 2017 during another round of financing by Cai Niao. After this contribution, the Group still maintained 1% of equity interest of Cai Niao. (5) Feng Chao In June 2015, the Group entered into a subscription and contribution agreement with three other express delivery companies in PRC, to establish a new company named Feng Chao, which focuses on optimizing the delivery process, for example, by creating storage lockers for deliveries, innovating on the "last mile" delivery of express parcels. The capital contribution by the Group was RMB100,000 in cash, representing 20% of the equity interest of Feng Chao. The Group has one board seat out of five of Feng Chao, and has significant influence on Feng Chao's significant operating activities. Therefore, the investment is accounted for using the equity method. In May 2016, the Group entered into the capital increase agreement with Feng Chao, to increase its investment by RMB100,000 to maintain its equity shares in Feng Chao at 20%, which was closed in August 2016. In July 2016, to coordinate with the Feng Chao’s employee incentive plan, all the investors of Feng Chao have agreed to transfer totally 5% of equity interests of Feng Chao to the employee share holding platform. As a result, the Group agreed to sell 1% of its equity interests in Feng Chao with the consideration of RMB2,500. In November 2016, the Group quit the board seat of Feng Chao, and no longer has significant influence on Feng Chao's significant operating activities. Thereafter, the Group accounts for this investment equity investments without readily determinable fair values. In January 2017, the Group's equity interest to Feng Chao decreased to 10.4% due to the additional capital contributions from other shareholders of Feng Chao. In May 2018, the Group disposed its share of Feng Chao for cash consideration of RMB697,850 and recognized gain on disposal of equity investee of RMB548,620. (6) Wheat Commune In December 2015, the Group entered into a share purchase agreement to obtain 7.45% equity interest in Wheat Commune for US$12,000 (equivalent to RMB77,668). Wheat Commune is an Omni-channel platform providing comprehensive campus service in more than 100 cities across the country. Due to the continued operating loss, the Group conducted an impairment assessment and concluded that there is an other than temporary decline in the fair value of the investment. Thus the Group recorded impairment of RMB30,000 for the year ended December 31, 2017. (7) Cainiao Post In May 2018, the Group entered into a subscription and contribution agreement with four other leading express delivery companies in PRC, to obtain 15% equity interest in Cainiao Post, Cainiao’s network of last-mile delivery stations, in amount of RMB1,075,000. The Group has no significant influence on Cainiao Post’s significant operating activities. Therefore, the investment is accounted for equity investments without readily determinable fair values. (8) ZJ New Industries In October 2018, the Group entered into an investment agreement with several investment corporations to establish a new investment company, named ZJ New Industries to obtain 2% equity interest in ZJ New Industries. The capital contribution made by the Group was RMB500,000 as of December 31, 2018. The Group has no significant influence on ZJ New Industries. Therefore, the investment is accounted for equity investments without readily determinable fair values. |
Short-term bank borrowing (Tabl
Short-term bank borrowing (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Short-term bank borrowing | |
Schedule of short-term bank borrowing | As of December 31, 2017 2018 RMB RMB PRC domestic commercial banks 250,000 — 250,000 — |
Other current liabilities (Tabl
Other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other current liabilities | |
Schedule of other current liabilities | As of December 31, 2017 2018 RMB RMB Payables related to property and equipment 710,002 973,620 Deposits from network partners (1) 645,923 741,914 Salary and welfare payable 576,581 643,129 Payables related to land use rights 67,644 7,644 Payables for repurchasing ordinary shares 56,953 24,146 Payables for equity investment 35,000 5,000 Construction deposits 20,360 27,362 Others 168,604 410,954 Total 2,281,067 2,833,769 (1) Amount primarily represents the dispatching fee deposits collected from the pickup outlets operated by network partners, which is refunded when the parcel is delivered to the recipients. |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Noncontrolling Interest | |
Schedule of Noncontrolling Interest | As of December 31, 2016 2017 2018 RMB RMB RMB Net income attributable to ZTO Express (Cayman) Inc. 2,053,855 3,159,663 4,383,025 Transfers from (to) noncontrolling interest Increase in ZTO's paid in capital for capital contribution from noncontrolling interest shareholder 4,000 — 23,740 Increase (decrease) in ZTO's paid in capital for purchase shares of the Group's subsidiaries 11,139 (4,952) — Net transfers from (to) noncontrolling interest 15,139 (4,952) 23,740 Change from net income attribute to ZTO and transfers from (to) noncontrolling interest 2,068,994 3,154,711 4,406,765 |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income tax | |
Schedule of current and deferred portion of income tax expenses | Years ended December 31, 2016 2017 2018 RMB RMB RMB Current tax expenses 762,540 675,396 1,068,214 Deferred tax (30,553) (29,035) (139,081) Total 731,987 646,361 929,133 |
Schedule of reconciliations of differences between PRC statutory income tax rate and effective income tax rate | Years ended December 31, 2016 2017 2018 RMB RMB RMB Statutory income tax rate 25.00 % 25.00 % 25.00 % Preferential tax rates — (7.67) % (7.36) % R&D super deduction (0.18) % (0.29) % (0.61) % Non-deductible expenses 0.72 % 0.53 % 1.41 % Non-taxable income (0.09) % — (0.24) % Different tax rate of subsidiary operation in other jurisdiction 0.58 % (0.63) % (0.74) % True up (0.08) % (0.02) % (0.05) % 25.95 % 16.92 % 17.41 % |
Summary of effect of the tax holiday on the income (loss) per share | As of December 31, 2016 2017 2018 RMB RMB RMB Tax saving amount due to preferential tax rates — 293,066 392,761 Income (loss) per share effect- basic — 0.41 0.52 Income (loss) per share effect- diluted — 0.41 0.52 |
Schedule of components of deferred income tax assets and liabilities | As of December 31, 2017 2018 RMB RMB Deferred tax assets: Accrued expense 75,858 96,786 Net loss carryforward 35,021 147,634 Financial subsidy 19,400 29,781 Depreciation for property and equipment 13,553 28,013 Unrealized gain for intragroup transaction 5,105 9,760 Provision for allowance for doubtful accounts 3,826 6,089 Total deferred tax assets 152,763 318,063 Deferred tax liabilities: Difference in basis of land use rights (146,740) (148,993) Difference in basis of intangible assets (10,580) (8,947) Total deferred tax liabilities (157,320) (157,940) |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of changes in the ordinary share awards relating to the Share Holding Platform | Number of ordinary shares Weighted average under grant-date Incentive Platform fair value Non-Vested at January 1, 2018 789,150 88.59 Granted 906,949 107.42 Vested 1,159,581 103.32 Non-Vested at December 31, 2018 536,518 88.59 |
Summary of changes in the share options relating to ordinary shares granted | Weighted Weighted average Aggregate Number of average remaining Intrinsic share options exercise price contractual life Value of option Outstanding at January 1, 2018 300,000 66.26 years 11,477 Granted 125,000 105.25 year 13,148 Exercised 125,000 105.25 year 13,148 Cancelled 300,000 66.26 year 11,477 Outstanding at December 31, 2018 — — |
2016 Share Incentive Plan | |
Schedule of binominal option pricing model to estimate the fair value of the share units granted | June 20, 2016 Risk-free interest rate 2.54 % Contract life 9.7 Expected volatility range 31.25 % Expected dividend yield 3.14 % Exercise multiple 2.8x Fair value of underlying ordinary shares on the date of option grants (RMB) 67.37 |
Earnings per share and divide_2
Earnings per share and dividends per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings per share and dividends per share | |
Schedule of basic and diluted earnings per share | Years ended December 31, 2016 2017 2018 RMB RMB RMB Numerator: Net income attributable to ZTO Express (Cayman) Inc. 2,053,855 3,159,663 4,383,025 Less: Change in redemption value for redeemable preferred shares (133,568) — — Earnings attributable to participating securities (71,819) — — Net income attributable to ordinary shareholders in computing basic and diluted earnings per share 1,848,468 3,159,663 4,383,025 Shares (Denominator): Weight average ordinary shares outstanding—basic 634,581,307 717,138,526 751,814,077 Plus: Shares for option — 49,054 19,376 Shares for Ordinary Share Units and restricted share units — 411,982 839,503 Weight average ordinary shares outstanding—diluted 634,581,307 717,599,562 752,672,956 Earnings per share—basic 2.91 4.41 5.83 Earnings per share—diluted 5.82 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Related party transactions | |
Schedule of major related party and their relationships | Name of related parties Relationship with the Group Tonglu Tongze Logistics Ltd and its subsidiaries Majority equity interests held by the employees of the Group Shanghai Mingyu Barcode Technology Ltd. Controlled by brother of chairman of the Group Fengwang Investments Ltd. Group’s equity investee Heilongjiang Ruston Express Ltd. Group’s equity investee Shanghai Kuaibao Network Technology Ltd. Group’s equity investee Quanzhou Zhongtong Express Ltd Group’s equity investee until December 2017 Suzhou Zhongtong Express Ltd. Group’s equity investee until the Group’s acquisition of this entity in January 1, 2016 ZTO Lianshang Technology Co., Ltd. Group’s equity investee ZTO Supply Chain Management Co., Ltd. (1) Group’s equity investee Zto Es Holding Limited. Entity controlled by Chairman of the Group (1) In June 2018, ZTO LTL went through a restructuring and as a result, became a wholly owned subsidiary of ZTO Freight (Cayman) Inc. (“ZTO Freight”), a newly established Cayman company by shareholders of ZTO LTL. The Group holds 18% equity in ZTO Freight after the restructuring. The Group contributed additional investment in ZTO Freight by USD19,000 (approximate to RMB130,150) and its equity interest decreased to 17.7% due to the additional capital contributions from other shareholders in 2018. |
Schedule of transactions with related parties | Years ended December 31, 2016 2017 2018 RMB RMB RMB Gain on disposal of subsidiary derived from ZTO Lianshang Technology Co., Ltd. — — 12,904 Rental income derived from ZTO Supply Chain Management Co., Ltd. — 9,436 11,103 Transportation service fees paid to Tonglu Tongze Logistics Ltd and its subsidiaries 853,198 809,415 547,500 ZTO Supply Chain Management Co., Ltd. 12,779 35,421 40,280 Total 865,977 844,836 587,780 Purchases of supplies from Shanghai Mingyu Barcode Technology Ltd. 88,884 43,064 90,051 |
Schedule of amounts due to related parties | As of December 31, 2017 2018 RMB RMB Amounts due to Tonglu Tongze Logistics Ltd. and its subsidiaries 45,483 Shanghai Mingyu Barcode Technology Ltd. 17,237 ZTO Supply Chain Management Co., Ltd. 69,496 Total 132,216 |
Schedule of amounts due from related parties | As of December 31, 2017 2018 RMB RMB Amounts due from Shanghai Kuaibao Network Technology Ltd. (1) 9,900 6,600 Total 9,900 6,600 (1) Amounts due from related parties are loan to related parties. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and contingencies | |
Schedule of minimum lease payments under all non-cancellable leases | Years ending December 31, RMB 2019 167,585 2020 152,779 2021 103,181 2022 85,816 2023 61,779 2024 and after 411,050 Total lease commitment 982,190 |
Convertible redeemable prefer_2
Convertible redeemable preferred shares (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Convertible redeemable preferred shares | |
Schedule of rollforward of carrying amounts of Preferred Share | Balance as of January 1, 2016 1,976,855 Issuance of Preferred Shares 133,568 Change in redemption value (2,110,423) Balance as of December 31, 2016 — |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidated VIE Schedule (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | |
Current assets: | ||||||
Cash and cash equivalents | $ 672,323 | ¥ 5,425,024 | ¥ 11,287,789 | ¥ 4,622,554 | ||
Restricted cash | 58 | 348,710 | 635,366 | 400 | ||
Accounts receivable, net | 86,829 | 287,835 | 596,995 | |||
Inventories | 6,372 | 34,231 | 43,813 | |||
Advances to suppliers | 49,142 | 263,574 | 337,874 | |||
Prepayments and other current assets | 219,329 | 719,983 | 1,507,996 | |||
Amounts due from related parties | 960 | 9,900 | 6,600 | |||
Total current assets | 3,088,369 | 12,377,846 | 21,234,067 | |||
Investments in equity investees | 321,054 | 610,160 | 2,207,410 | |||
Property and equipment, net | 1,314,190 | 6,473,010 | 9,035,704 | |||
Land use rights, net | 286,405 | 1,602,908 | 1,969,176 | |||
Goodwill | 616,907 | 4,241,541 | 4,157,111 | 4,241,541 | ||
Deferred tax assets | 46,260 | 152,763 | 318,063 | |||
Other non-current assets | 90,563 | 308,986 | 622,669 | |||
TOTAL ASSETS | 5,771,635 | 25,827,638 | 39,682,857 | |||
Current liabilities: | ||||||
Short-term bank borrowing | 250,000 | |||||
Accounts payable | 190,794 | 889,139 | 1,311,807 | |||
Advances from customers | 63,517 | 258,965 | 436,710 | |||
Income tax payable | 59,004 | 221,926 | 405,683 | |||
Amounts due to related parties | 19,230 | 114,913 | 132,216 | |||
Other current liabilities | 412,157 | 2,281,067 | 2,833,769 | |||
Total current liabilities | 747,797 | 4,146,014 | 5,141,465 | |||
Deferred tax liabilities | 22,971 | 157,320 | 157,940 | |||
TOTAL LIABILITIES | 787,336 | 4,386,321 | 5,413,308 | |||
Total revenue | 2,560,461 | ¥ 17,604,451 | 13,060,073 | 9,788,768 | ||
Net Income | 638,196 | 4,387,912 | 3,158,900 | 2,051,603 | ||
Net cash generated from operating activities | 640,543 | 4,404,051 | 3,630,684 | 2,572,243 | ||
Net cash used in investing activities | (1,872,247) | (12,872,633) | (8,294,547) | (3,085,040) | ||
Net cash provided by (used in) financing activities | 1,024,234 | 7,042,122 | (1,061,558) | 9,415,093 | ||
Net change in cash, cash equivalents and restricted cash | (167,374) | (1,150,780) | (6,149,421) | 9,204,393 | ||
Cash, cash equivalents and restricted cash at beginning of year | 839,755 | 5,773,734 | 11,923,155 | 2,718,762 | ||
Cash, cash equivalents and restricted cash at end of year | $ 672,381 | 4,622,954 | $ 839,755 | 5,773,734 | 11,923,155 | |
Net income generated by VIE after deductions of inter-company transportation fees and Service fees charges | 7,776,622 | 5,982,432 | 4,145,150 | |||
ZTO Express and its subsidiaries (the "VIE") | ||||||
Current assets: | ||||||
Cash and cash equivalents | 930,829 | 575,605 | ||||
Restricted cash | 192,559 | 400 | ||||
Accounts receivable, net | 286,286 | 519,389 | ||||
Inventories | 32,571 | 40,480 | ||||
Advances to suppliers | 60,369 | 118,216 | ||||
Prepayments and other current assets | 581,825 | 984,004 | ||||
Amounts due from related parties | 9,900 | 6,600 | ||||
Total current assets | 2,094,339 | 2,244,694 | ||||
Investments in equity investees | 272,195 | 124,590 | ||||
Property and equipment, net | 3,545,635 | 4,541,751 | ||||
Land use rights, net | 1,077,385 | 1,085,729 | ||||
Goodwill | 4,157,111 | 4,157,111 | ||||
Deferred tax assets | 91,586 | 213,745 | ||||
Other non-current assets | 70,609 | 118,858 | ||||
TOTAL ASSETS | 11,308,860 | 12,486,478 | ||||
Current liabilities: | ||||||
Short-term bank borrowing | 250,000 | |||||
Accounts payable | 774,182 | 1,093,822 | ||||
Advances from customers | 256,893 | 435,784 | ||||
Income tax payable | 110,116 | 16,692 | ||||
Amounts due to related parties | 857,665 | 622,298 | ||||
Other current liabilities | 1,625,089 | 2,119,810 | ||||
Total current liabilities | 3,873,945 | 4,288,406 | ||||
Deferred tax liabilities | 96,582 | 94,364 | ||||
TOTAL LIABILITIES | 3,970,527 | ¥ 4,382,770 | ||||
Total revenue | 17,127,930 | 12,866,016 | 9,788,768 | |||
Net Income | 720,323 | 726,915 | 472,753 | |||
Net cash generated from operating activities | 436,074 | 1,256,049 | 1,451,316 | |||
Net cash used in investing activities | (777,197) | (703,679) | (1,680,896) | |||
Net cash provided by (used in) financing activities | (206,260) | (203,900) | 151,056 | |||
Net change in cash, cash equivalents and restricted cash | (547,383) | 348,470 | (78,524) | |||
Cash, cash equivalents and restricted cash at beginning of year | 1,123,388 | 774,918 | 853,442 | |||
Cash, cash equivalents and restricted cash at end of year | ¥ 576,005 | ¥ 1,123,388 | ¥ 774,918 | |||
VIE revenues as a percentage to consolidated revenues | 97.30% | 97.30% | 98.50% | 98.50% | 100.00% | |
VIE assets as a percentage to consolidated assets | 31.00% | 44.00% | 31.00% | |||
VIE liabilities as a percentage to consolidated liabilities | 81.00% | 91.00% | 81.00% | |||
Assets held in the consolidated VIE that can be used only to settle obligations of the VIE | ¥ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nonconsolidated VIE Schedule (Details) ¥ in Millions | Dec. 31, 2015CNY (¥) |
Tonglu | |
Variable Interest Entity | |
Loan receivable from VIE | ¥ 15 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair value (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair value | |||
Impairment of investment in equity investee | ¥ 0 | ¥ 30,000 | ¥ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Convenience translation (Details) | Dec. 31, 2018$ / ¥ |
Convenience translation | |
Convenience translation rate | 0.1454 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Short-term investment (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Short-term investment | ||
Impairment losses related to short-term investments | ¥ 0 | ¥ 0 |
Interest income from short term investments | ¥ 307,084 | ¥ 74,127 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Financing Receivables (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | |
Financing receivables | ||
Allowance for doubtful accounts relating to financing receivables | ¥ 0 | ¥ 4,139 |
Minimum | ||
Financing receivables | ||
Credit term for financing services | 3 months | |
Maximum | ||
Financing receivables | ||
Credit term for financing services | 1 year |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and equipment, net (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Leasehold improvements | |
Property and equipment, net | |
Useful life | 3 years |
Furniture, office and electric equipment | Minimum | |
Property and equipment, net | |
Useful life | 3 years |
Furniture, office and electric equipment | Maximum | |
Property and equipment, net | |
Useful life | 5 years |
Machinery and equipment | |
Property and equipment, net | |
Useful life | 10 years |
Vehicles | |
Property and equipment, net | |
Useful life | 5 years |
Buildings | |
Property and equipment, net | |
Useful life | 20 years |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Customer relationships | |
Intangible assets | |
Intangible assets useful life | 10 years |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Impairment of long-lived assets and Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Impairment of long-lived assets and Goodwill | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Impairment of goodwill | $ 0 | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue recognition (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Jan. 01, 2018CNY (¥) | |
Revenue recognition | ||||||
Cumulative effect of Retained earnings | $ 1,607,504 | ¥ 6,669,370 | ¥ 11,052,395 | |||
Total revenue | $ 2,560,461 | ¥ 17,604,451 | ¥ 13,060,073 | ¥ 9,788,768 | ||
Revenue (in percent) | 100.00% | 100.00% | 100.00% | 100.00% | ||
Contract Assets and Liabilities | ||||||
Billed and unbilled receivable | ¥ 4,029 | 9,196 | ||||
Contract liability | 10,024 | ¥ 11,239 | ||||
Maximum | Accounting Standards Update 2014-09 | ||||||
Revenue recognition | ||||||
Cumulative effect of Retained earnings | ¥ 5,000 | |||||
Express delivery services | ||||||
Revenue recognition | ||||||
Total revenue | $ 2,239,850 | ¥ 15,400,080 | ¥ 12,173,690 | ¥ 9,369,693 | ||
Revenue (in percent) | 87.50% | 87.50% | 93.20% | 95.70% | ||
Freight forwarding services | ||||||
Revenue recognition | ||||||
Total revenue | $ 185,985 | ¥ 1,278,741 | ¥ 269,557 | |||
Revenue (in percent) | 7.30% | 7.30% | 2.10% | |||
Sale of accessories | ||||||
Revenue recognition | ||||||
Total revenue | $ 118,226 | ¥ 812,866 | ¥ 591,716 | ¥ 419,075 | ||
Revenue (in percent) | 4.60% | 4.60% | 4.50% | 4.30% | ||
Others | ||||||
Revenue recognition | ||||||
Total revenue | $ 16,400 | ¥ 112,764 | ¥ 25,110 | |||
Revenue (in percent) | 0.60% | 0.60% | 0.20% |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Effective (Details) ¥ in Millions | Jan. 01, 2019CNY (¥) |
Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Effective | |
Lease, Practical Expedients, Package [true false] | true |
Scenario Forecast Adjustment | Accounting Standards Update 2016-02 | |
Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Effective | |
Lease liability | ¥ 811 |
Right-of-use asset | ¥ 838 |
Business Combination - 2016 Acq
Business Combination - 2016 Acquisition of Network Partner (Details) - CNY (¥) ¥ / shares in Units, ¥ in Thousands | 1 Months Ended | 12 Months Ended |
Jan. 31, 2016 | Dec. 31, 2016 | |
Consideration: | ||
Gain on deemed disposal of equity method investments | ¥ 9,551 | |
Suzhou Zhongtong Express Ltd. ("Suzhou ZTO") | 2016 Acquisitions of Network Partners | ||
Consideration: | ||
Interest acquired (as a percent) | 40.00% | |
Cash | ¥ 30,660 | |
Total consideration | 60,726 | |
Goodwill acquired | 65,892 | |
Fair value of the Group's existing equity interests at the time of acquisition | 91,089 | |
Gain on deemed disposal of equity method investments | ¥ 9,551 | |
Suzhou Zhongtong Express Ltd. ("Suzhou ZTO") | 2016 Acquisitions of Network Partners | Ordinary shares | ||
Consideration: | ||
Ordinary shares issued as part of consideration (in shares) | 600,000 | |
Share price (in dollars per share) | ¥ 50,110 |
Business Combination - 2017 Acq
Business Combination - 2017 Acquisitions, Consideration (Details) - COE Business ¥ in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2017HKD ($) | Oct. 31, 2017CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2018CNY (¥) | |
Consideration: | |||||
Cash | $ 180,000 | ¥ 152,946 | |||
Fixed assets | ¥ 17,123 | ¥ 17,123 | |||
Intangible assets | 61,973 | 61,973 | |||
Increase in goodwill related to acquisition of CEO Business | ¥ 84,430 | ¥ 84,430 | |||
Acquisition consideration payable | ¥ 42,523 |
Prepayments and other current_3
Prepayments and other current assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Prepayments and other current assets | |||
Input value added tax ("VAT") | ¥ 927,645 | ¥ 489,700 | |
Prepaid expenses | 109,702 | 63,780 | |
Accrued interest income | 185,555 | 40,447 | |
Deposits | 28,098 | 16,749 | |
Others | 256,996 | 109,307 | |
Total | $ 219,329 | ¥ 1,507,996 | ¥ 719,983 |
Property and equipment, net (De
Property and equipment, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
Property and equipment, net | |||||
Property, plant and equipment, gross | ¥ 7,447,640 | ¥ 10,748,006 | |||
Accumulated depreciation | (974,630) | (1,712,302) | |||
Property and equipment, net | 6,473,010 | $ 1,314,190 | 9,035,704 | ||
Depreciation expenses | ¥ 809,005 | 522,853 | ¥ 301,668 | ||
Pending title of certificates buildings, net | 1,425,167 | 2,040,167 | |||
Buildings | |||||
Property and equipment, net | |||||
Property, plant and equipment, gross | 2,697,230 | 3,586,898 | |||
Machinery and equipment | |||||
Property and equipment, net | |||||
Property, plant and equipment, gross | 1,299,553 | 2,475,795 | |||
Leasehold improvements | |||||
Property and equipment, net | |||||
Property, plant and equipment, gross | 262,419 | 344,786 | |||
Vehicles | |||||
Property and equipment, net | |||||
Property, plant and equipment, gross | 1,545,786 | 2,319,342 | |||
Furniture, office and electric equipment | |||||
Property and equipment, net | |||||
Property, plant and equipment, gross | 207,953 | 309,214 | |||
Construction in progress | |||||
Property and equipment, net | |||||
Property, plant and equipment, gross | ¥ 1,434,699 | ¥ 1,711,971 |
Land use rights, net (Details)
Land use rights, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
Land use rights, net | |||||
Cost | ¥ 1,688,966 | ¥ 2,093,750 | |||
Less: Accumulated amortization | (86,058) | (124,574) | |||
Land use rights, net | 1,602,908 | $ 286,405 | 1,969,176 | ||
Amortization expenses | ¥ 38,516 | 35,964 | ¥ 23,310 | ||
Title certificates for land use right with carrying value not obtained | ¥ 36,998 | ¥ 114,807 | |||
Land use rights | Maximum | |||||
Land use rights, net | |||||
Lease term (in years) | 50 years |
Intangible assets, net (Details
Intangible assets, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | |
Intangible assets, net | |||||
Intangible assets, net | ¥ 60,424 | $ 7,887 | ¥ 54,227 | ||
Estimated amortization expenses for each of five succeeding fiscal years | |||||
2019 | 6,197 | ||||
2020 | 6,197 | ||||
2021 | 6,197 | ||||
2022 | 6,197 | ||||
2023 | 6,197 | ||||
2024 and after | 23,242 | ||||
Total | 54,227 | ||||
Customer relationships | |||||
Intangible assets, net | |||||
Intangible assets, gross | 61,973 | 61,973 | |||
Less: Accumulated amortization | (1,549) | (7,746) | |||
Intangible assets, net | 60,424 | ¥ 54,227 | |||
COE Business | Customer relationships | |||||
Intangible assets, net | |||||
Amortization expenses | ¥ 6,197 | ¥ 1,549 | ¥ 0 |
Goodwill (Details)
Goodwill (Details) - CNY (¥) ¥ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2017 | |
Goodwill | ||
Goodwill, balance at the beginning of period | ¥ 4,157,111 | |
Goodwill, balance at the end of period | ¥ 4,241,541 | 4,241,541 |
COE Business | ||
Goodwill | ||
Increase in goodwill related to acquisition of CEO Business | ¥ 84,430 | ¥ 84,430 |
Investments in equity investe_3
Investments in equity investees (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Investments in equity investees | |||
Total investments accounted for under the equity method | ¥ 310,697 | ¥ 179,761 | |
Total investments accounted for equity investments without readily determinable fair values | 1,896,713 | 430,399 | |
Total investments in equity investees | $ 321,054 | 2,207,410 | 610,160 |
ZTO Supply Chain Management Co., Ltd. ("ZTO LTL") | |||
Investments in equity investees | |||
Total investments accounted for under the equity method | 194,235 | 76,014 | |
Feng Wang Investment Co., Ltd. ("Feng Wang") | |||
Investments in equity investees | |||
Total investments accounted for under the equity method | 52,238 | 51,419 | |
Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") | |||
Investments in equity investees | |||
Total investments accounted for under the equity method | 27,999 | 30,000 | |
Others | |||
Investments in equity investees | |||
Total investments accounted for under the equity method | 36,225 | 22,328 | |
Cai Niao Smart Logistics Network Limited ("Cai Niao") | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | 224,097 | 212,063 | |
Shenzhen Feng Chao Technology Ltd. ("Feng Chao") | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | 149,230 | ||
Wheat Commune Group Inc. ("Wheat Commune) | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | 47,552 | 48,228 | |
Zhejiang Yizhan Network Technology Co., Ltd. ("Cainiao Post") | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | 1,075,000 | ||
Zhijiang New Industries Limited ("ZJ New Industries") | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | 500,000 | ||
Globaltime Inc. | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | 22,345 | ||
Others | |||
Investments in equity investees | |||
Total investments accounted for equity investments without readily determinable fair values | ¥ 27,719 | ¥ 20,878 |
Investments in equity investe_4
Investments in equity investees - ZTO LTL, Feng Wang and CRRC (Details) ¥ in Thousands, $ in Thousands | Aug. 22, 2016CNY (¥) | Dec. 31, 2018CNY (¥) | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Dec. 31, 2017CNY (¥)item | Aug. 31, 2017CNY (¥) | Dec. 31, 2013CNY (¥)item | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Oct. 31, 2018 | May 31, 2018CNY (¥) |
Investments in equity investees | |||||||||||||
Cash consideration | ¥ 130,150 | $ 271,298 | ¥ 1,865,309 | ¥ 89,055 | ¥ 315,426 | ||||||||
ZTO Supply Chain Management Co., Ltd. ("ZTO LTL") | |||||||||||||
Investments in equity investees | |||||||||||||
Cash consideration | ¥ 54,000 | $ 19,000 | ¥ 130,150 | ¥ 36,000 | |||||||||
Equity interest in equity method investment (as a percent) | 18.00% | 17.70% | 17.70% | 18.00% | |||||||||
Feng Wang Investment Co., Ltd. ("Feng Wang") | |||||||||||||
Investments in equity investees | |||||||||||||
Cash consideration | ¥ | ¥ 50,000 | ||||||||||||
Equity interest in equity method investment (as a percent) | 25.00% | 20.00% | |||||||||||
Number of top express delivery companies in agreement | item | 3 | ||||||||||||
Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") | |||||||||||||
Investments in equity investees | |||||||||||||
Cash consideration | ¥ | ¥ 30,000 | ||||||||||||
Equity interest in equity method investment (as a percent) | 15.00% | 15.00% | |||||||||||
Number of top express delivery companies in agreement | item | 2 | ||||||||||||
Number of board seat allocated for equity method investment | item | 1 | ||||||||||||
Number of board seat available in equity method investee | item | 7 | ||||||||||||
Zhejiang Yizhan Network Technology Co., Ltd. ("Cainiao Post") | |||||||||||||
Investments in equity investees | |||||||||||||
Capital contribution in cash | ¥ | ¥ 1,075,000 | ||||||||||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 15.00% | ||||||||||||
Zhijiang New Industries Limited ("ZJ New Industries") | |||||||||||||
Investments in equity investees | |||||||||||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 2.00% | ||||||||||||
Payments to acquire equity interest | ¥ | ¥ 500,000 |
Investments in equity investe_5
Investments in equity investees - Cai Niao, Feng Chao and Wheat Commune (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
May 31, 2018CNY (¥) | Oct. 31, 2017USD ($)shares | Jul. 31, 2016CNY (¥) | Mar. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)item | Jun. 30, 2015CNY (¥)item | Dec. 31, 2017CNY (¥) | Oct. 31, 2017CNY (¥) | Jan. 31, 2017 | May 31, 2016CNY (¥) | Mar. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) | May 31, 2013CNY (¥) | |
Investments in equity investees | |||||||||||||
Impairment of equity investees | ¥ 30,000 | ||||||||||||
Cai Niao Smart Logistics Network Limited ("Cai Niao") | |||||||||||||
Investments in equity investees | |||||||||||||
Capital contribution in cash | $ 9,056 | $ 15,473 | ¥ 59,668 | ¥ 100,285 | ¥ 50,000 | ||||||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 1.00% | 1.00% | 1.00% | ||||||||||
Shares subscribed for consideration of equity investments without readily determinable fair values (in shares) | shares | 12,000,000 | 30,000,000 | |||||||||||
Shenzhen Feng Chao Technology Ltd. ("Feng Chao") | |||||||||||||
Investments in equity investees | |||||||||||||
Capital contribution in cash | ¥ 100,000 | ¥ 100,000 | |||||||||||
Cash received from disposal of equity investments | ¥ 697,850 | ||||||||||||
Recognized gain on disposal of equity investee | ¥ 548,620 | ||||||||||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 20.00% | 20.00% | |||||||||||
Number of top express delivery companies in agreement | item | 3 | ||||||||||||
Number of board seat allocated for equity investments without readily determinable fair values | item | 1 | ||||||||||||
Number of board seat available in equity investments without readily determinable fair values | item | 5 | ||||||||||||
Equity interest in equity method investment (as a percent) | 10.40% | ||||||||||||
Shenzhen Feng Chao Technology Ltd. ("Feng Chao") | Share Holding Platform | All investors | |||||||||||||
Investments in equity investees | |||||||||||||
Equity interest agreed to be transferred (as a percent) | 5.00% | ||||||||||||
Equity interests agreed to be sold (as a percent) | 1.00% | ||||||||||||
Equity interests agreed to be sold, consideration amount | ¥ 2,500 | ||||||||||||
Wheat Commune Group Inc. ("Wheat Commune) | |||||||||||||
Investments in equity investees | |||||||||||||
Capital contribution in cash | $ 12,000 | ¥ 77,668 | |||||||||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 7.45% | 7.45% | |||||||||||
Number of cities where comprehensive campus service provided | item | 100 | ||||||||||||
Impairment of equity investees | ¥ 30,000 |
Short-term bank borrowing (Deta
Short-term bank borrowing (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2017 | Jan. 23, 2017 | Jan. 13, 2017 |
Short-term bank borrowing | |||
Outstanding amount | ¥ 250,000 | ||
PRC domestic commercial banks | |||
Short-term bank borrowing | |||
Outstanding amount | ¥ 250,000 | ||
Short-term bank borrowing in January 2017 at 3.828% Interest | |||
Short-term bank borrowing | |||
Principal amount | ¥ 100,000 | ||
Interest rate (as a percent) | 3.828% | ||
Short-term bank borrowing in January 2017 at 3.915% Interest | |||
Short-term bank borrowing | |||
Principal amount | ¥ 150,000 | ||
Interest rate (as a percent) | 3.915% | ||
Debt collateral amount | ¥ 156,151 |
Other current liabilities (Deta
Other current liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Other current liabilities | |||
Payables related to property and equipment | ¥ 973,620 | ¥ 710,002 | |
Deposits from network partners | 741,914 | 645,923 | |
Salary and welfare payable | 643,129 | 576,581 | |
Payables related to land use rights | 7,644 | 67,644 | |
Payables for repurchasing ordinary shares | 24,146 | 56,953 | |
Payables for equity investment | 5,000 | 35,000 | |
Construction deposits | 27,362 | 20,360 | |
Others | 410,954 | 168,604 | |
Total | $ 412,157 | ¥ 2,833,769 | ¥ 2,281,067 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Noncontrolling Interest | ||||
Net Income (Loss) Attributable to Parent | $ 637,485 | ¥ 4,383,025 | ¥ 3,159,663 | ¥ 2,053,855 |
Income tax - Current and deferr
Income tax - Current and deferred portion of income tax (Details) ¥ in Thousands, $ in Thousands, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2019 | Dec. 31, 2018HKD ($)company | Dec. 31, 2018USD ($)company | Dec. 31, 2018CNY (¥)company | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Income tax | ||||||
Statutory income tax rate (as a percent) | 21.00% | 21.00% | 21.00% | |||
Number of Companies' subsidiaries | company | 10 | 10 | 10 | |||
Taxable profit threshold | $ 780,290 | ¥ 5,364,883 | ¥ 4,345,584 | ¥ 3,442,869 | ||
Current and deferred portion of income tax expenses | ||||||
Current tax expenses | ¥ | 1,068,214 | 675,396 | 762,540 | |||
Deferred tax | (20,228) | (139,081) | (29,035) | (30,553) | ||
Total | $ 135,137 | ¥ 929,133 | ¥ 646,361 | ¥ 731,987 | ||
Minimum | ||||||
Income tax | ||||||
State income tax rate (as a percent) | 5.00% | 5.00% | 5.00% | |||
Maximum | ||||||
Income tax | ||||||
State income tax rate (as a percent) | 9.90% | 9.90% | 9.90% | |||
Catalog of Encouraged Industries in Western Region | ||||||
Income tax | ||||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | |||
HNTEs | ||||||
Income tax | ||||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | |||
HNTEs | Shanghai Zhongtongji Network Technology Co. Ltd | ||||||
Income tax | ||||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | 15.00% | 15.00% | |
Hong Kong | ||||||
Income tax | ||||||
Statutory tax rate in the foreign (as a percent) | 16.50% | 16.50% | 16.50% | |||
Taxable profit threshold | $ | $ 2 | |||||
Hong Kong | Maximum | ||||||
Income tax | ||||||
Statutory tax rate in the foreign (as a percent) | 8.25% | 8.25% | 8.25% | |||
PRC | ||||||
Income tax | ||||||
Statutory income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% |
Income tax - Reconciliations be
Income tax - Reconciliations between statutory income tax rate and effective income tax rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliations of differences between PRC statutory income tax rate and Group's effective income tax rate | |||
Statutory income tax rate (as a percent) | 21.00% | ||
PRC | |||
Reconciliations of differences between PRC statutory income tax rate and Group's effective income tax rate | |||
Statutory income tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
Preferential tax rates | (7.36%) | (7.67%) | |
R&D super deduction (as a percent) | (0.61%) | (0.29%) | (0.18%) |
Non-deductible expenses (as a percent) | 1.41% | 0.53% | 0.72% |
Non-taxable income (as a percent) | (0.24%) | (0.09%) | |
Different tax rate of subsidiary operation in other jurisdiction (as a percent) | (0.74%) | (0.63%) | 0.58% |
True up (as a percent) | (0.05%) | (0.02%) | (0.08%) |
Effective income tax rate (as a percent) | 17.41% | 16.92% | 25.95% |
Income tax - Effect of tax holi
Income tax - Effect of tax holiday (Details) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2018CNY (¥)¥ / shares | Dec. 31, 2017CNY (¥)¥ / shares | |
Income tax | ||
Tax saving amount due to preferential tax rates | ¥ | ¥ 392,761 | ¥ 293,066 |
Income (loss) per share effect- basic | 0.52 | 0.41 |
Income (loss) per share effect- diluted | 0.52 | 0.41 |
Income tax - Deferred tax asset
Income tax - Deferred tax assets and liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Accrued expense | ¥ 96,786 | ¥ 75,858 |
Net loss carryforward | 147,634 | 35,021 |
Financial subsidy | 29,781 | 19,400 |
Depreciation for property and equipment | 28,013 | 13,553 |
Unrealized gain for intragroup transaction | 9,760 | 5,105 |
Provision for allowance for doubtful accounts | 6,089 | 3,826 |
Total deferred tax assets | 318,063 | 152,763 |
Deferred tax liabilities: | ||
Difference in basis of land use rights | (148,993) | (146,740) |
Difference in basis of intangible assets | (8,947) | (10,580) |
Total deferred tax liabilities | (157,940) | (157,320) |
Valuation allowances | ¥ 0 | ¥ 0 |
Income tax - Other information
Income tax - Other information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax | |||
Tax loss carryforward | ¥ 590,535 | ||
Statutory income tax rate (as a percent) | 21.00% | ||
Statute of limitations period (in years) | 3 years | ||
Extension period for statute of limitations under special circumstances (in years) | 5 years | ||
Underpayment of tax liability listed as special circumstance | ¥ 100 | ||
Statute of limitations period for related party transaction (in years) | 10 years | ||
Aggregate undistributed earnings of domestic subsidiaries and VIE | ¥ 10,019,541 | ¥ 6,034,204 | |
Withholding tax rate on dividends (as a percent) | 10.00% | ||
Withholding tax rate on dividends if investors qualifies as beneficial owner with holdings above the threshold percentage (as a percent) | 5.00% | ||
Threshold beneficial owner percentage determining withholding income tax rate (as a percent) | 25.00% | ||
Withholding tax rate on dividends if investors qualifies as beneficial owner with holdings below the threshold percentage (as a percent) | 10.00% | ||
Withholding income taxes for undistributed earnings of subsidiaries | ¥ 0 | ¥ 0 | |
PRC | |||
Income tax | |||
Statutory income tax rate (as a percent) | 25.00% | 25.00% | 25.00% |
Share-based compensation - Shar
Share-based compensation - Share Holding Platform (Details) ¥ / shares in Units, ¥ in Thousands | Mar. 07, 2018CNY (¥)shares | Mar. 28, 2017CNY (¥)shares | Jun. 28, 2016CNY (¥)employeeshares | Jun. 30, 2016entity | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / shares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥) | Dec. 31, 2017$ / shares |
Share-based compensation | ||||||||||
Total fair value of modified award | ¥ | ¥ 236,181 | |||||||||
Ordinary shares | ||||||||||
Share-based compensation | ||||||||||
Total fair value of modified award | ¥ | 2 | |||||||||
Additional paid-in capital | ||||||||||
Share-based compensation | ||||||||||
Total fair value of modified award | ¥ | 236,179 | |||||||||
Zto Es Holding Limited ("ZTO ES") | Four limited liability partnerships ("LLPs") established as shareholders of ZTO ES | ||||||||||
Share-based compensation | ||||||||||
Number of LLPs established in PRC | entity | 4 | |||||||||
Equity interest hold by each of the four LLPs (as a percent) | 25.00% | |||||||||
Ordinary Share Units | ||||||||||
Share-based compensation | ||||||||||
Share-based compensation expense recorded | ¥ | ¥ 21,192 | ¥ 16,419 | ||||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | $ / shares | $ 12.88 | $ 12.88 | ||||||||
Share Holding Platform | Ordinary shares | ||||||||||
Share-based compensation | ||||||||||
Shares issued to related party | 16,000,000 | |||||||||
Granted (in shares) | 789,150 | 1,054,164 | 906,949 | |||||||
Number of units converted | 3,504,000 | |||||||||
Share-based compensation expense recorded | ¥ | ¥ 97,424 | |||||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | $ / shares | 16.99 | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||
Non-Vested, at beginning of the year | 789,150 | |||||||||
Granted (in shares) | 789,150 | 1,054,164 | 906,949 | |||||||
Vested (in shares) | 1,159,581 | |||||||||
Non-Vested, at end of the year | 536,518 | 789,150 | ||||||||
Weighted average grant-date fair value | ||||||||||
Weighted average, Non-Vested, at beginning of the year | ¥ / shares | ¥ 88.59 | |||||||||
Granted (in shares) | ¥ / shares | 107.42 | |||||||||
Vested (in shares) | ¥ / shares | 103.32 | |||||||||
Weighted average, Non-Vested, at end of the year | ¥ / shares | ¥ 88.59 | ¥ 88.59 | ||||||||
Share Holding Platform | Ordinary shares | Class A ordinary shares | ||||||||||
Share-based compensation | ||||||||||
Granted (in shares) | 906,949 | |||||||||
Cash subscription payment | ¥ | ¥ 0 | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||
Granted (in shares) | 906,949 | |||||||||
Share Holding Platform | Contingently convertible share units | ||||||||||
Share-based compensation | ||||||||||
Granted (in shares) | 584,000 | |||||||||
Conversion ratio of redeemable and contingently convertible share units | 0.1667 | |||||||||
Fair value of modified awards | ¥ | ¥ 236,181 | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||
Granted (in shares) | 584,000 | |||||||||
Share Holding Platform | Contingently convertible share units | Selling, general and administrative expenses | ||||||||||
Share-based compensation | ||||||||||
Share-based compensation expense recorded | ¥ | 60,981 | |||||||||
Share Holding Platform | Contingently convertible share units | Additional paid-in capital | ||||||||||
Share-based compensation | ||||||||||
Total fair value of modified award | ¥ | 236,179 | |||||||||
Share Holding Platform | Ordinary Share Units | ||||||||||
Share-based compensation | ||||||||||
Ratio or ordinary share units to ordinary share | 5 | |||||||||
Granted (in shares) | 3,945,750 | 5,270,820 | ||||||||
Number of units converted | 17,520,000 | |||||||||
Share-based compensation expense recorded | ¥ | ¥ 23,303 | ¥ 23,303 | ¥ 61,019 | |||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | (per share) | ¥ 67.37 | $ 12.88 | $ 12.88 | |||||||
Unrecognized compensation expense | ¥ | ¥ 23,303 | |||||||||
Weighted average period of recognizing compensation expense | 1 year 2 months 1 day | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||
Granted (in shares) | 3,945,750 | 5,270,820 | ||||||||
Share Holding Platform | Ordinary Share Units | Shares granted for cash subscription | ||||||||||
Share-based compensation | ||||||||||
Granted (in shares) | 1,540,500 | |||||||||
Number of employees to whom shares were granted for cash | employee | 1 | |||||||||
Cash subscription payment | ¥ | ¥ 10,000 | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||
Granted (in shares) | 1,540,500 | |||||||||
Share Holding Platform | Ordinary Share Units | Noncash shares granted | ||||||||||
Share-based compensation | ||||||||||
Granted (in shares) | 3,730,320 | |||||||||
Cash subscription payment | ¥ | ¥ 0 | ¥ 0 | ||||||||
Vesting period | 3 years | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||
Granted (in shares) | 3,730,320 |
Share-based compensation - 2016
Share-based compensation - 2016 Share Incentive Plan (Details) ¥ / shares in Units, ¥ in Thousands | Mar. 07, 2018shares | Mar. 28, 2017shares | Jun. 28, 2016shares | Jun. 20, 2016¥ / shares$ / sharesshares | May 31, 2018CNY (¥)shares | Apr. 30, 2018¥ / sharesshares | Sep. 30, 2016shares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥) | Dec. 31, 2017$ / shares |
Ordinary Share Units | |||||||||||||
Fair value per unit | |||||||||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | $ / shares | $ 12.88 | $ 12.88 | |||||||||||
Additional disclosures | |||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 21,192 | ¥ 16,419 | |||||||||||
Restricted Share Units | |||||||||||||
Additional disclosures | |||||||||||||
Period of recognition of compensation cost | 1 year 2 months 1 day | ||||||||||||
Unrecognized compensation expense | ¥ | ¥ 22,596 | ||||||||||||
2016 Share Incentive Plan | Options | |||||||||||||
Share-based compensation | |||||||||||||
Shares available for issuance | shares | 3,000,000 | ||||||||||||
Options granted | shares | 300,000 | 125,000 | 125,000 | ||||||||||
Exercise price (in dollars per share) | $ / shares | $ 9.97 | ||||||||||||
Expiration period | 10 years | ||||||||||||
Requisite service period | 5 years | ||||||||||||
Shares authorized by the board under the plan | shares | 3,000,000 | ||||||||||||
Annual increase of shares authorized, on the first day of each of the company's fiscal year during the term of the 2016 Plan commencing with the fiscal year beginning January 1, 2017 (as a percent) | 0.50% | ||||||||||||
Annual increase of shares authorized, on the first day of each of the company's fiscal year during the term of the 2016 Plan commencing with the fiscal year beginning January 1, 2017, number of shares | shares | 3,000,000 | ||||||||||||
Fair value per unit | |||||||||||||
Risk-free interest rate (as a percent) | 2.54% | ||||||||||||
Contract life (in years) | 9 years 8 months 12 days | ||||||||||||
Expected volatility range (as a percent) | 31.25% | ||||||||||||
Expected dividend yield (as a percent) | 3.14% | ||||||||||||
Exercise multiple | 2.8 | ||||||||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | ¥ / shares | $ 67,370 | ¥ 0 | |||||||||||
Number of share options | |||||||||||||
Outstanding at beginning of the year | shares | 300,000 | ||||||||||||
Granted | shares | 300,000 | 125,000 | 125,000 | ||||||||||
Exercised | shares | 125,000 | ||||||||||||
Cancelled | shares | 300,000 | 300,000 | |||||||||||
Outstanding at end of the year | shares | 300,000 | ||||||||||||
Weighted average exercise price | |||||||||||||
Outstanding at beginning of the year | ¥ / shares | ¥ 66.26 | ||||||||||||
Granted | ¥ / shares | ¥ 105.25 | ||||||||||||
Exercised | ¥ / shares | 105.25 | ||||||||||||
Cancelled | ¥ / shares | ¥ 66.26 | ||||||||||||
Outstanding at end of the year | ¥ / shares | ¥ 66.26 | ||||||||||||
Additional disclosures | |||||||||||||
Weighted average remaining contractual life, Outstanding at end of the year | 0 years | 8 years 2 months 1 day | |||||||||||
Weighted average remaining contractual life, Exercisable at end of the year | 0 years | ||||||||||||
Weighted average remaining contractual life, Vested and expected to vest at end of the year | 0 years | ||||||||||||
Aggregate Intrinsic Value of option, Outstanding at end of the year | ¥ | ¥ 11,477 | ||||||||||||
Aggregate Intrinsic Value of option, Vested and exercisable at end of the year | ¥ | 13,148 | ||||||||||||
Aggregate Intrinsic Value of option, Vested and expected to vest at end of the year | ¥ | 13,148 | ||||||||||||
Aggregate Intrinsic Value of option, cancelled at end of the year | ¥ | 11,477 | ||||||||||||
Granted date fair value of options | ¥ | ¥ 13,148 | ||||||||||||
2016 Share Incentive Plan | Options | Selling, general and administrative expenses | |||||||||||||
Additional disclosures | |||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 3,261 | 13,148 | |||||||||||
2016 Share Incentive Plan | Ordinary Share Units | |||||||||||||
Fair value per unit | |||||||||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | $ / shares | 16.99 | ||||||||||||
Additional disclosures | |||||||||||||
Share-based compensation expense recorded | ¥ | 91,150 | ||||||||||||
2016 Share Incentive Plan | Restricted Share Units | Certain directors, executive officers and the employees | |||||||||||||
Additional disclosures | |||||||||||||
Number of share units granted | shares | 852,390 | 679,645 | |||||||||||
Share Holding Platform | Ordinary Share Units | |||||||||||||
Fair value per unit | |||||||||||||
Fair value of underlying ordinary shares (in CNY/dollars per share) | (per share) | ¥ 67.37 | $ 12.88 | $ 12.88 | ||||||||||
Additional disclosures | |||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 23,303 | ¥ 23,303 | ¥ 61,019 | ||||||||||
Number of share units granted | shares | 3,945,750 | 5,270,820 | |||||||||||
Unrecognized compensation expense | ¥ | ¥ 23,303 | ||||||||||||
Share Holding Platform | Restricted Share Units | Certain directors, executive officers and the employees | |||||||||||||
Additional disclosures | |||||||||||||
Vesting period | 3 years |
Ordinary shares (Details)
Ordinary shares (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Millions | May 29, 2018USD ($)shares | Jun. 28, 2016shares | Oct. 31, 2016shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2016CNY (¥)shares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | Oct. 27, 2016¥ / sharesshares |
Ordinary shares, share authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||||
Par value of ordinary shares | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Investment value in company. | ¥ | ¥ 8,891,909 | |||||||
Alibaba and Cainiao | ||||||||
Investment value in company. | $ | $ 1,380 | |||||||
Percentage of equity interest held by investors | 10.00% | |||||||
Ordinary shares | ||||||||
Number of shares issued | 79,861,111 | |||||||
Investment value in company. | ¥ | ¥ 52 | |||||||
IPO | ||||||||
Investment value in company. | ¥ | ¥ 9,183,847 | |||||||
IPO | Ordinary shares | ||||||||
Number of shares issued | 72,100,000 | |||||||
Investment value in company. | ¥ | ¥ 49 | |||||||
Each of Common Class A or Common Class B or classes as the board of directors may determine | ||||||||
Ordinary shares, share authorized | 1,000,000,000 | |||||||
Class A ordinary shares | ||||||||
Number of votes entitled | ¥ / shares | ¥ 1 | |||||||
Ordinary shares, share authorized | 8,000,000,000 | |||||||
Ordinary shares, shares issued | 605,167,551 | 525,306,440 | 453,206,440 | |||||
Ordinary shares, shares outstanding | 579,363,859 | 504,704,716 | 442,364,604 | |||||
Class A ordinary shares | Alibaba and Cainiao | ||||||||
Number of shares issued | 79,861,111 | |||||||
Class A ordinary shares | IPO | ||||||||
Number of shares issued | 72,100,000 | |||||||
Class B ordinary shares | ||||||||
Number of votes entitled | ¥ / shares | ¥ 10 | |||||||
Ordinary shares, share authorized | 1,000,000,000 | |||||||
Ordinary shares, shares issued | 206,100,000 | 206,100,000 | 206,100,000 | |||||
Ordinary shares, shares outstanding | 206,100,000 | 206,100,000 | 206,100,000 | |||||
Zto Es Holding Limited ("ZTO ES") | Ordinary shares | ||||||||
Shares issued to related party | 16,000,000 | |||||||
Number of shares considered issued to related party but not outstanding | 9,682,255 | 10,841,836 |
Earnings per share and divide_3
Earnings per share and dividends per share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | Dec. 31, 2017CNY (¥)¥ / sharesshares | Dec. 31, 2016CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net income attributable to ZTO Express (Cayman) Inc. | $ 637,485 | ¥ 4,383,025 | ¥ 3,159,663 | ¥ 2,053,855 |
Change in redemption value for redeemable preferred shares | ¥ | (133,568) | |||
Earnings attributable to participating securities-basic | ¥ | (71,819) | |||
Earnings attributable to participating securities-diluted | ¥ | (71,819) | |||
Net income attributable to ordinary shareholders in computing basic and diluted earnings per share | ¥ | 4,383,025 | 3,159,663 | 1,848,468 | |
Net income attributable to ordinary shareholders in computing basic and diluted earnings per share | ¥ | ¥ 4,383,025 | ¥ 3,159,663 | ¥ 1,848,468 | |
Shares (Denominator): | ||||
Weight average ordinary shares outstanding-basic | shares | 751,814,077 | 751,814,077 | 717,138,526 | 634,581,307 |
Shares for option | shares | 19,376 | 19,376 | 49,054 | |
Shares for Ordinary Share Units and restricted share units | shares | 839,503 | 839,503 | 411,982 | |
Weight average ordinary shares outstanding-diluted | shares | 752,672,956 | 752,672,956 | 717,599,562 | 634,581,307 |
Earnings per share-basic | (per share) | $ 0.85 | ¥ 5.83 | ¥ 4.41 | ¥ 2.91 |
Earnings per share-diluted | (per share) | $ 0.85 | ¥ 5.82 | ¥ 4.40 | ¥ 2.91 |
Zto Es Holding Limited ("ZTO ES") | ||||
Shares (Denominator): | ||||
Anti-dilutive securities excluded from the calculation of diluted net loss per share | shares | 9,682,255 | 9,682,255 | 10,841,836 | 10,841,836 |
Related party transactions (Det
Related party transactions (Details) ¥ in Thousands, $ in Thousands | Jun. 28, 2016shares | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Mar. 31, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥)shares | Aug. 31, 2018 | Jul. 31, 2018CNY (¥) |
Related party transactions | ||||||||||
Payments to Acquire Equity Method Investments | ¥ 130,150 | $ 271,298 | ¥ 1,865,309 | ¥ 89,055 | ¥ 315,426 | |||||
Additional capital contribution from related party | 11,789 | |||||||||
ZTO LTL | ||||||||||
Related party transactions | ||||||||||
Equity interest in equity method investment (as a percent) | 17.70% | 17.70% | 18.00% | |||||||
ZTO Lianshang Technology Co., Ltd. | ||||||||||
Related party transactions | ||||||||||
Gain on disposal of subsidiary derived | 12,904 | |||||||||
Total consideration | ¥ 7,500 | |||||||||
Equity interest in equity method investment (as a percent) | 15.00% | |||||||||
Cash consideration | ¥ 10,000 | |||||||||
Transportation service fees paid | ||||||||||
Related party transactions | ||||||||||
Transportation service fees paid | 587,780 | 844,836 | 865,977 | |||||||
ZTO Lianshang Technology Co., Ltd. | Gain on disposal of subsidiary | ||||||||||
Related party transactions | ||||||||||
Gain on disposal of subsidiary derived | 12,904 | |||||||||
Tonglu Tongze Logistics Ltd And Its Subsidiaries | Transportation service fees paid | ||||||||||
Related party transactions | ||||||||||
Transportation service fees paid | 547,500 | 809,415 | 853,198 | |||||||
ZTO Supply Chain Management Co., Ltd. ("ZTO LTL") | Rental income | ||||||||||
Related party transactions | ||||||||||
Rental income | 11,103 | 9,436 | ||||||||
ZTO Supply Chain Management Co., Ltd. ("ZTO LTL") | Transportation service fees paid | ||||||||||
Related party transactions | ||||||||||
Transportation service fees paid | 40,280 | 35,421 | 12,779 | |||||||
Shanghai Mingyu Barcode Technology Ltd. | Purchases of supplies | ||||||||||
Related party transactions | ||||||||||
Purchases of supplies | ¥ 90,051 | ¥ 43,064 | ¥ 88,884 | |||||||
Zto Es Holding Limited ("ZTO ES") | Ordinary shares | ||||||||||
Related party transactions | ||||||||||
Shares issued to related party | shares | 16,000,000 | |||||||||
Number of shares with economic interests granted | shares | 5,158,164 | |||||||||
Number of shares waived | shares | 10,841,836 | |||||||||
Mr. Meisong Lai | ||||||||||
Related party transactions | ||||||||||
Additional capital contribution from related party | ¥ 11,789 | |||||||||
ZTO LTL and Mr. Jianfa Lai | ZTO LTL | ||||||||||
Related party transactions | ||||||||||
Payments to Acquire Equity Method Investments | $ | $ 19,000 |
Related party transactions - Du
Related party transactions - Due to Related party (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Related party transactions | |||
Amounts due to related parties | $ 19,230 | ¥ 132,216 | ¥ 114,913 |
Tonglu Tongze Logistics Ltd And Its Subsidiaries | |||
Related party transactions | |||
Amounts due to related parties | 45,483 | 105,754 | |
Shanghai Mingyu Barcode Technology Ltd. | |||
Related party transactions | |||
Amounts due to related parties | 17,237 | 2,128 | |
ZTO Supply Chain Management Co., Ltd. ("ZTO LTL") | |||
Related party transactions | |||
Amounts due to related parties | ¥ 69,496 | ¥ 7,031 |
Related party transactions - _2
Related party transactions - Due from Related party (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) |
Related party transactions | |||
Amounts due from related parties | $ 960 | ¥ 6,600 | ¥ 9,900 |
Shanghai Kuaibao Network Technology Ltd | |||
Related party transactions | |||
Amounts due from related parties | ¥ 6,600 | ¥ 9,900 |
Commitments and contingencies_2
Commitments and contingencies (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments and contingencies | |||
Operating lease rent expense | ¥ 271,630 | ¥ 195,176 | ¥ 146,780 |
Operating leases, minimum payments | |||
2019 | 167,585 | ||
2020 | 152,779 | ||
2021 | 103,181 | ||
2022 | 85,816 | ||
2023 | 61,779 | ||
2024 and after | 411,050 | ||
Total lease commitment | ¥ 982,190 |
Commitments and contingencies -
Commitments and contingencies - Capital Commitments (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2018CNY (¥) | |
Capital Commitments | |
Capital Commitments | |
Capital commitments contracted | ¥ 930,958 |
Commitments and contingencies_3
Commitments and contingencies - Contingencies (Details) | 1 Months Ended |
May 31, 2017item | |
Contingencies | |
Number of putative securities class actions filed | 3 |
Repurchase of ordinary share _2
Repurchase of ordinary share of ZTO Express (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Millions | Nov. 15, 2018USD ($) | May 21, 2017USD ($) | Nov. 30, 2014CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2018$ / shares | Dec. 31, 2018CNY (¥) | Dec. 31, 2017$ / shares | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) |
Repurchase of ordinary share of ZTO Express | ||||||||||
Total cash consideration for repurchase of ordinary shares | ¥ 737,004 | ¥ 914,611 | ||||||||
ADSs | Class A ordinary shares | Share repurchase program on May 21, 2017 | ||||||||||
Repurchase of ordinary share of ZTO Express | ||||||||||
Repurchase of ordinary shares (in shares) | shares | 15,625,375 | 9,759,888 | ||||||||
Share Price | $ / shares | $ 14.42 | $ 14.12 | ||||||||
Total cash consideration for repurchase of ordinary shares | ¥ 1,465,942 | ¥ 914,611 | ||||||||
Consideration for repurchase of ordinary shares due | ¥ 56,953 | |||||||||
Aggregate value of shares authorized to repurchase | $ | $ 300 | |||||||||
Period of share repurchase program | 12 months | |||||||||
ADSs | Class A ordinary shares | New share repurchase program on November 15, 2018 | ||||||||||
Repurchase of ordinary share of ZTO Express | ||||||||||
Repurchase of ordinary shares (in shares) | shares | 1,700,000 | |||||||||
Share Price | $ / shares | $ 15.85 | |||||||||
Total cash consideration for repurchase of ordinary shares | ¥ 185,673 | |||||||||
Consideration for repurchase of ordinary shares due | ¥ 24,149 | |||||||||
Aggregate value of shares authorized to repurchase | $ | $ 500 | |||||||||
Period of share repurchase program | 18 months | |||||||||
Ordinary shares | ||||||||||
Repurchase of ordinary share of ZTO Express | ||||||||||
Repurchase of ordinary shares (in shares) | shares | 13,800,000 | 7,565,487 | 9,759,888 | |||||||
Share Price | ¥ / shares | ¥ 16.67 | |||||||||
Total cash consideration for repurchase of ordinary shares | ¥ 230,000 | |||||||||
Consideration for repurchase of ordinary shares due | ¥ 46,000 | ¥ 46,000 | ¥ 46,000 |
Convertible redeemable prefer_3
Convertible redeemable preferred shares (Detail) - Series A convertible redeemable preferred shares ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2016CNY (¥)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2015CNY (¥)¥ / sharesshares | Dec. 31, 2015$ / shares | |
Convertible redeemable preferred shares | ||||
Issuance of stock (in shares) | shares | 30,079,918 | 30,079,918 | ||
Share price (in dollars per share) | (per share) | ¥ 64.58 | $ 9.97 | ||
Shares issued upon conversion of convertible shares | shares | 1 | |||
Percentage of compound rate of return used in valuation of temporary equity pursuant to Guarantee Return provision (as a percent) | 25.00% | |||
Percentage of aggregate purchase price for valuation of temporary equity pursuant to Guarantee Return provision (as a percent) | 200.00% | |||
Annual rate of return (as a percent) | 8.00% | |||
Rollforward of carrying amounts of Preferred Share | ||||
Beginning balance | ¥ 1,976,855 | |||
Issuance of Preferred Shares | 133,568 | $ 300 | ||
Change in redemption value | ¥ (2,110,423) | |||
Ending balance | ¥ 1,976,855 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Benefit Plans | |||
Defined benefit plan contributions | ¥ 195,101 | ¥ 158,389 | ¥ 168,688 |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Segment Information | |
Number of reportable segments | 1 |
Restricted Net Assets (Details)
Restricted Net Assets (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Net Assets | |||
Percentage of net income from subsidiaries and VIEs incorporated in the PRC to be appropriated to the statutory reserve | 10.00% | ||
Limit of statutory reserve fund as a percentage of registered capital, after which allocations to statutory reserve fund are no longer required | 50.00% | ||
Appropriation to statutory reserves | ¥ 353,803 | ¥ 291,064 | ¥ 180,976 |
Accumulated statutory reserves | 981,042 | ¥ 627,239 | |
Restricted net assets | ¥ 9,867,680 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Mar. 18, 2019 | Mar. 11, 2019 | Mar. 07, 2018 | Mar. 28, 2017 |
2016 Share Incentive Plan | Restricted Share Units | Certain directors, executive officers and the employees | ||||
Subsequent Events | ||||
Number of share units granted | 852,390 | 679,645 | ||
Subsequent Events | ADSs | ||||
Subsequent Events | ||||
Special dividend | $ 0.24 | |||
Subsequent Events | 2016 Share Incentive Plan | Restricted Share Units | Certain directors, executive officers and the employees | ||||
Subsequent Events | ||||
Number of share units granted | 1,076,532 | |||
Subsequent Events | Employee Incentive Platform | Restricted Share Units | Class A ordinary shares | Certain directors, executive officers and the employees | ||||
Subsequent Events | ||||
Number of share units granted | 944,577 | |||
Value | $ 0 |
FINANCIAL STATEMENTS SCHEDULE_2
FINANCIAL STATEMENTS SCHEDULE I - CONDENSED BALANCE SHEETS (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2017$ / shares | Dec. 31, 2017CNY (¥)shares | Dec. 31, 2016CNY (¥) | Oct. 27, 2016shares | Dec. 31, 2015CNY (¥) |
Current assets: | |||||||
Cash and cash equivalents | $ 672,323 | ¥ 4,622,554 | ¥ 5,425,024 | ¥ 11,287,789 | |||
Restricted cash | 58 | 400 | 348,710 | 635,366 | |||
Short-term investment | 1,978,017 | 13,599,852 | 5,224,559 | ||||
Prepayments and other current assets | 219,329 | 1,507,996 | 719,983 | ||||
Amounts due from subsidiaries | 960 | 6,600 | 9,900 | ||||
Total current assets | 3,088,369 | 21,234,067 | 12,377,846 | ||||
Deferred tax assets | 46,260 | 318,063 | 152,763 | ||||
TOTAL ASSETS | 5,771,635 | 39,682,857 | 25,827,638 | ||||
Other current liability | 412,157 | 2,833,769 | 2,281,067 | ||||
Other non-current liability | 13,231 | 90,961 | 60,045 | ||||
TOTAL LIABILITIES | 787,336 | 5,413,308 | 4,386,321 | ||||
Shareholders' equity: | |||||||
Ordinary shares (US$0.0001 par value; 10,000,000,000 ordinary shares authorized as of December 31, 2017 and 2018; 525,306,440 Class A ordinary shares issued and 504,704,716 Class A ordinary shares outstanding as of December 31, 2017; 605,167,551 Class A ordinary shares issued and 579,363,859 Class A ordinary shares outstanding as of December 31, 2018; 206,100,000 Class B ordinary shares issued and outstanding as of December 31, 2017 and 2018) | 76 | 523 | 471 | ||||
Additional paid-in capital | 3,510,680 | 24,137,681 | 15,975,979 | ||||
Treasury shares, at cost | (224,722) | (1,545,077) | (914,611) | ||||
Retained earnings | 1,607,504 | 11,052,395 | 6,669,370 | ||||
Accumulated other comprehensive (loss)/gain | 83,153 | 571,716 | (295,896) | ||||
Total Equity | 4,984,299 | 34,269,549 | 21,441,317 | 19,750,747 | ¥ 5,869,366 | ||
TOTAL LIABILITIES AND EQUITY | $ 5,771,635 | ¥ 39,682,857 | ¥ 25,827,638 | ||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||||
Ordinary shares, share authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | |||
Class A ordinary shares | |||||||
Shareholders' equity: | |||||||
Ordinary shares, share authorized | 8,000,000,000 | ||||||
Ordinary shares, shares issued | 605,167,551 | 605,167,551 | 525,306,440 | 453,206,440 | |||
Ordinary shares, shares outstanding | 579,363,859 | 579,363,859 | 504,704,716 | 442,364,604 | |||
Class B ordinary shares | |||||||
Shareholders' equity: | |||||||
Ordinary shares, share authorized | 1,000,000,000 | ||||||
Ordinary shares, shares issued | 206,100,000 | 206,100,000 | 206,100,000 | 206,100,000 | |||
Ordinary shares, shares outstanding | 206,100,000 | 206,100,000 | 206,100,000 | 206,100,000 | |||
ZTO EXPRESS (CAYMAN) INC. | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ 112,557 | ¥ 773,884 | ¥ 2,366,916 | 9,180,661 | |||
Restricted cash | ¥ | 156,151 | ¥ 333,264 | |||||
Short-term investment | 1,834,250 | 12,611,386 | 4,866,712 | ||||
Prepayments and other current assets | 25,053 | 172,251 | 40,929 | ||||
Amounts due from subsidiaries | 221,349 | 1,521,880 | 1,197,564 | ||||
Total current assets | 2,193,209 | 15,079,401 | 8,628,272 | ||||
Deferred tax assets | 3,969 | 27,288 | |||||
Investments in subsidiaries and VIE | 2,796,503 | 19,227,355 | 12,924,039 | ||||
TOTAL ASSETS | 4,993,681 | 34,334,044 | 21,552,311 | ||||
Other current liability | 3,759 | 25,845 | 56,953 | ||||
Other non-current liability | 13,231 | 90,961 | 60,045 | ||||
TOTAL LIABILITIES | 16,990 | 116,806 | 116,998 | ||||
Shareholders' equity: | |||||||
Ordinary shares (US$0.0001 par value; 10,000,000,000 ordinary shares authorized as of December 31, 2017 and 2018; 525,306,440 Class A ordinary shares issued and 504,704,716 Class A ordinary shares outstanding as of December 31, 2017; 605,167,551 Class A ordinary shares issued and 579,363,859 Class A ordinary shares outstanding as of December 31, 2018; 206,100,000 Class B ordinary shares issued and outstanding as of December 31, 2017 and 2018) | 76 | 523 | 471 | ||||
Additional paid-in capital | 3,510,680 | 24,137,681 | 15,975,979 | ||||
Treasury shares, at cost | (224,722) | (1,545,077) | (914,611) | ||||
Retained earnings | 1,607,504 | 11,052,395 | 6,669,370 | ||||
Accumulated other comprehensive (loss)/gain | 83,153 | 571,716 | (295,896) | ||||
Total Equity | 4,976,691 | 34,217,238 | 21,435,313 | ||||
TOTAL LIABILITIES AND EQUITY | $ 4,993,681 | ¥ 34,334,044 | ¥ 21,552,311 | ||||
Ordinary shares, share authorized | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | ||||
ZTO EXPRESS (CAYMAN) INC. | Class A ordinary shares | |||||||
Shareholders' equity: | |||||||
Ordinary shares, shares issued | 605,167,551 | 605,167,551 | 525,306,440 | ||||
Ordinary shares, shares outstanding | 579,363,859 | 579,363,859 | 504,704,716 | ||||
ZTO EXPRESS (CAYMAN) INC. | Class B ordinary shares | |||||||
Shareholders' equity: | |||||||
Ordinary shares, shares issued | 206,100,000 | 206,100,000 | 206,100,000 | ||||
Ordinary shares, shares outstanding | 206,100,000 | 206,100,000 | 206,100,000 |
FINANCIAL STATEMENTS SCHEDULE_3
FINANCIAL STATEMENTS SCHEDULE I - CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Operating expenses: | ||||
Other operating income, net | $ 25,897 | ¥ 178,057 | ¥ 183,368 | ¥ 32,104 |
Total operating expenses | (150,194) | (1,032,660) | (597,149) | (673,891) |
Income from operations | 630,096 | 4,332,223 | 3,748,435 | 2,768,978 |
Income tax expense | (135,137) | (929,133) | (646,361) | (731,987) |
Equity in profit of subsidiaries and VIE | (2,820) | (19,386) | (15,682) | (36,721) |
Net income | 638,196 | 4,387,912 | 3,158,900 | 2,051,603 |
Change in redemption value of convertible redeemable preferred shares | (133,568) | |||
Net income attributable to ordinary shareholders | 637,485 | 4,383,025 | 3,159,663 | 1,920,287 |
Net Income | 638,196 | 4,387,912 | 3,158,900 | 2,051,603 |
Other comprehensive income (loss), net of tax of nil | ||||
Foreign currency translation adjustment | 126,189 | 867,612 | (590,545) | 308,398 |
Comprehensive income | 764,385 | 5,255,524 | 2,568,355 | 2,360,001 |
Other comprehensive loss, tax | 0 | 0 | 0 | |
ZTO EXPRESS (CAYMAN) INC. | ||||
Operating expenses: | ||||
General and administrative | (39,470) | (271,378) | (59,214) | (72,921) |
Other operating income, net | 6,338 | 43,575 | 15,559 | |
Total operating expenses | (33,132) | (227,803) | (43,655) | (72,921) |
Interest income | 46,210 | 317,714 | 120,510 | 8,301 |
Income from operations | 13,078 | 89,911 | 76,855 | (64,620) |
Income tax expense | (6,339) | (43,581) | (4,649) | |
Equity in profit of subsidiaries and VIE | 630,746 | 4,336,695 | 3,087,457 | 2,118,475 |
Net income | 637,485 | 4,383,025 | 3,159,663 | 2,053,855 |
Change in redemption value of convertible redeemable preferred shares | (133,568) | |||
Net income attributable to ordinary shareholders | 637,485 | 4,383,025 | 3,159,663 | 1,920,287 |
Net Income | 637,485 | 4,383,025 | 3,159,663 | 2,053,855 |
Other comprehensive income (loss), net of tax of nil | ||||
Foreign currency translation adjustment | 126,189 | 867,612 | (590,545) | 308,398 |
Comprehensive income | $ 763,674 | 5,250,637 | 2,569,118 | 2,362,253 |
Other comprehensive loss, tax | ¥ 0 | ¥ 0 | ¥ 0 |
FINANCIAL STATEMENTS SCHEDULE_4
FINANCIAL STATEMENTS SCHEDULE I - CONDENSED STATEMENTS OF CASH FLOWS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jun. 30, 2018CNY (¥) | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
Cash flows from operating activities: | |||||
Net Income | $ 638,196 | ¥ 4,387,912 | ¥ 3,158,900 | ¥ 2,051,603 | |
Adjustments to reconcile net income to net cash used by operating activities | |||||
Share-based compensation | 36,285 | 249,478 | 40,725 | 122,502 | |
Equity in profit of subsidiaries and VIE | 2,820 | 19,386 | 15,682 | 36,721 | |
Changes in operating assets and liabilities: | |||||
Prepayments and other current assets | (111,152) | (764,223) | (339,853) | (196,581) | |
Deferred tax | (20,228) | (139,081) | (29,035) | (30,553) | |
Other non-current liability | 1,343 | 9,231 | 60,045 | ||
Net cash provided by operating activities | 640,543 | 4,404,051 | 3,630,684 | 2,572,243 | |
Cash flows from investing activities | |||||
Purchases of short-term investments | (1,983,041) | (13,634,396) | (10,126,703) | ||
Investments in equity investees | ¥ (130,150) | (271,298) | (1,865,309) | (89,055) | (315,426) |
Net cash used in investing activities | (1,872,247) | (12,872,633) | (8,294,547) | (3,085,040) | |
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares | 1,293,275 | 8,891,909 | |||
Proceeds from issuance of ordinary shares for shared based compensation | 68,400 | ||||
Proceeds from capital contribution from shareholders | 11,789 | ||||
Payment of dividends | (130,192) | (895,136) | |||
Share repurchase | (111,965) | (769,811) | (857,658) | ||
Net cash provided by/used in financing activities | 1,024,234 | 7,042,122 | (1,061,558) | 9,415,093 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 40,096 | 275,680 | (424,000) | 302,097 | |
Net change in cash, cash equivalents and restricted cash | (167,374) | (1,150,780) | (6,149,421) | 9,204,393 | |
Cash, cash equivalents and restricted cash at beginning of year | 839,755 | 5,773,734 | 11,923,155 | 2,718,762 | |
Cash, cash equivalents and restricted cash at end of year | 672,381 | 4,622,954 | 5,773,734 | 11,923,155 | |
Issuance cost on IPO | 339,355 | ||||
ZTO EXPRESS (CAYMAN) INC. | |||||
Cash flows from operating activities: | |||||
Net Income | 637,485 | 4,383,025 | 3,159,663 | 2,053,855 | |
Adjustments to reconcile net income to net cash used by operating activities | |||||
Share-based compensation | 36,285 | 249,478 | 40,725 | 61,521 | |
Equity in profit of subsidiaries and VIE | (630,746) | (4,336,695) | (3,087,457) | (2,118,475) | |
Changes in operating assets and liabilities: | |||||
Prepayments and other current assets | (19,100) | (131,322) | (37,174) | (3,755) | |
Deferred tax | (3,969) | (27,288) | |||
Other non-current liability | 1,343 | 9,231 | 60,045 | ||
Net cash provided by operating activities | 21,298 | 146,429 | 135,802 | (6,854) | |
Cash flows from investing activities | |||||
Amounts due from subsidiaries | (46,260) | (318,064) | 680,814 | (774,302) | |
Purchases of short-term investments | (1,827,378) | (12,564,140) | (9,716,466) | ||
Repayments of short-term investments | 781,943 | 5,376,252 | 4,679,500 | ||
Investments in equity investees | (273,710) | (1,881,891) | (1,701,629) | (155,627) | |
Net cash used in investing activities | (1,365,405) | (9,387,843) | (6,057,781) | (929,929) | |
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares for shared based compensation | 68,400 | ||||
Proceeds from capital contribution from shareholders | 11,789 | ||||
Payment of dividends | (130,192) | (895,136) | |||
Share repurchase | (111,965) | (769,811) | (857,658) | ||
Net cash provided by/used in financing activities | 1,051,118 | 7,226,962 | (857,658) | 9,264,036 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 38,581 | 265,269 | (211,221) | 212,632 | |
Net change in cash, cash equivalents and restricted cash | (254,408) | (1,749,183) | (6,990,858) | 8,539,885 | |
Cash, cash equivalents and restricted cash at beginning of year | 366,965 | 2,523,067 | 9,513,925 | 974,040 | |
Cash, cash equivalents and restricted cash at end of year | 112,557 | 773,884 | ¥ 2,523,067 | 9,513,925 | |
Issuance cost on IPO | 339,355 | ||||
Alibaba | ZTO EXPRESS (CAYMAN) INC. | |||||
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares | $ 1,293,275 | ¥ 8,891,909 | |||
IPO | |||||
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares | 9,183,847 | ||||
IPO | ZTO EXPRESS (CAYMAN) INC. | |||||
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares | ¥ 9,183,847 |
FINANCIAL STATEMENTS SCHEDULE_5
FINANCIAL STATEMENTS SCHEDULE I - CONDENSED STATEMENTS OF CASH FLOWS - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2018USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017USD ($) | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | Dec. 31, 2015CNY (¥) |
Reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows | ||||||
Cash and cash equivalents | $ 672,323 | ¥ 4,622,554 | ¥ 5,425,024 | ¥ 11,287,789 | ||
Restricted cash | 58 | 400 | 348,710 | 635,366 | ||
Total cash, cash equivalents, equivalents, and restricted cash shown in the statement of cash flows | 672,381 | 4,622,954 | $ 839,755 | 5,773,734 | 11,923,155 | ¥ 2,718,762 |
ZTO EXPRESS (CAYMAN) INC. | ||||||
Reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows | ||||||
Cash and cash equivalents | 112,557 | 773,884 | 2,366,916 | 9,180,661 | ||
Restricted cash | 156,151 | 333,264 | ||||
Total cash, cash equivalents, equivalents, and restricted cash shown in the statement of cash flows | $ 112,557 | ¥ 773,884 | $ 366,965 | ¥ 2,523,067 | ¥ 9,513,925 | ¥ 974,040 |
FINANCIAL STATEMENTS SCHEDULE_6
FINANCIAL STATEMENTS SCHEDULE I - NOTES TO SCHEDULE I (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2018CNY (¥)$ / ¥ | Dec. 31, 2017CNY (¥) | Dec. 31, 2016CNY (¥) | |
FINANCIAL STATEMENTS SCHEDULE I | |||
Ordinary Shares Repurchased, But Not Yet Paid | ¥ 24,146 | ¥ 56,953 | ¥ 0 |
Dividends Payable | ¥ 1,699 | 0 | 0 |
Convenience translation rate | $ / ¥ | 0.1454 | ||
ZTO EXPRESS (CAYMAN) INC. | |||
FINANCIAL STATEMENTS SCHEDULE I | |||
Ordinary Shares Repurchased, But Not Yet Paid | ¥ 24,146 | 56,953 | 0 |
Dividends Payable | ¥ 1,699 | ¥ 0 | ¥ 0 |
Convenience translation rate | $ / ¥ | 0.1454 |