ZTO Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

Parcel Volume of 8.5 Billion Packages for Full Year 2018,Market Share Increased to 16.8%

2019 Parcel Volume Growth Target Accelerated to Further Expand Market Lead

US$0.24 per Share Dividend Announced for 2018

SHANGHAI,March 13,2019 -- ZTO Express (Cayman) Inc. (NYSE: ZTO) ("ZTO" or the "Company"),a leading and fast-growing express delivery company in China,today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31,2018[1]. The Company generated parcel volume growth which surpassed the market average by 10.5 percentage points and expanded its market share in terms of parcel volume to 16.8% by the end of 2018. Full year adjusted net income beat consensus and was RMB4.2 billion with RMB4.4billion in cash generated from operating activities.

Fourth Quarter 2018 Financial Highlights

Revenues[2] were RMB5,627.5 million (US$818.5 million),an increase of 29.9% from RMB4,331.0 million in the same period of 2017.

Gross profit was RMB1,550.2 million (US$225.5 million),an increase of 14.6% from RMB1,353.3 million in the same period of 2017.

Net income was RMB1,278.9 million (US$186.0 million),an increase of 4.7% from RMB1,221.9 million in the same period of 2017.

Adjusted EBITDA[3] was RMB1,766.0 million (US$256.8 million),an increase of 24.0% from RMB1,424.3 million in the same period of 2017.

Adjusted net income[4] was RMB1,289.7 million (US$187.6 million),an increase of 1.9% from RMB1,265.4 million in the same period of 2017.

Basic and diluted earnings per American depositary share ("ADS"[5]) were RMB1.62 (US$0.24),a decrease of 5.8% and 5.3% from RMB1.72 and RMB1.71 in the same period of 2017,respectively.

Net cash provided by operating activities was RMB1,802.3 million (US$262.1million),compared with RMB1,371.5 million in the same period of 2017.

Fiscal Year 2018 Financial Highlights

Revenues[2] were RMB17,604.5 million (US$2,560.5 million),an increase of 34.8% from RMB13,060.1 million in 2017.

Gross profit was RMB5,364.9 million (US$780.3 million),an increase of 23.5% from RMB4,345.6 million in 2017.

Net income was RMB4,387.9 million (US$638.2 million),an increase of 38.9% from RMB3,158.9 million in 2017.

Adjusted EBITDA[3] was RMB5,858.4 million (US$852.1 million),an increase of 31.6% from RMB4,452.0 million in 2017.

Adjusted net income[4] was RMB4,201.1 million (US$611.0 million),an increase of 30.1% from RMB3,229.6 million in 2017.

Basic and diluted earnings per American depositary share ("ADS"[5])were RMB5.83 (US$0.85) and RMB 5.82 (US$0.85),respectively,an increase of 32.2% and 32.3% from RMB4.41 and RMB4.40 in 2017.

Net cash provided by operating activities was RMB4,404.1 million (US$640.5 million),compared with RMB3,630.7 million in 2017.

Operational Highlights for Fourth Quarter 2018

Parcel volume was 2,714 million,an increase of 34.7% from 2,015 million in the same period of 2017.

Number of pickup/delivery outlets was approximately 30,100 as of December 31,2018.

Number of direct network partners was over 4,500 as of December 31,2018.

Number of line-haul vehicles was over 5,2018,which included over 4,500 self-owned vehicles and over 900 vehicles owned and operated by Tonglu Tongze Logistics Ltd.,a transportation operator that works exclusively for ZTO.

Number of self-owned trucks increased to around 4,2018 from 4,000 as of September30,2018. Among the self-owned trucks,over 2,800 were high capacity 15-17 meter long models as of December 31,compared to over 2,270 as of September30,2018.

Number of line-haul routes between sorting hubs was over 2,2018.

Number of sorting hubs was 86 as of December 31,among which 78 are operated by the Company and 8 by the Company's network partners.

[1] An investor relations presentation accompanies this earnings release and can be found at ir.zto.com.

[2] Starting from January 1,the Company adopted a newly enacted revenue accounting standard (ASC 606),which requires its delivery services revenue

to be recognized over time,and uses a modified retrospective approach to adopt this standard. The January 1,2018 balance of retained earnings was not

adjusted due to the immaterial cumulative net impact of adopting ASC 606. The impact of applying ASC 606 as compared with previous guidance applied to

revenues and costs was not material for the fiscal year ended December 31,2018.

[3] Adjusted EBITDA is a non-GAAP financial measure,which is defined as net income before depreciation,amortization,interest expenses and income tax

expenses,and further adjusted to exclude the shared-based compensation expense and non-recurring items such as the gain on disposal of equity investees and

subsidiary which management aims to better represent the underlying business operations.

[4] Adjusted net income is a non-GAAP financial measure,which is defined as net income before share-based compensation expense and non-recurring items

such as gain on disposal of equity investees and subsidiary in which management aims to better represent the underlying business operations.

[5] One ADS represents one Class A ordinary share.

Mr.Meisong Lai,Founder,Chairman and Chief Executive Officer of ZTO,commented "ZTO delivered a strong fourth quarter and closed out 2018 with a 1.3 percentage point increase in market share to 16.8%. We maintained our leadership position in the Chinese express delivery industry in terms of parcel volume,customer satisfaction and profit generation."

Mr. Lai added,"The Chinese express delivery industry continued to demonstrate healthy growth momentum with an increase of over 10 billion parcels in 2018. Fueled by the steady expansion of the Chinese economy,express delivery industry will further improve scale and efficiency allowing consumers to spend less for more with faster delivery,and enabling adjacent industries to innovate in supply chain management. ZTO's consistent strategy is to build a sorting and transit platform with superior scale and efficiency which is also well-integrated with our nationwide outlets with the highest density and best-in-kind profitability. We will accelerate our growth for 2019 with a goal to increase our parcel volume 15 percentage points faster than the industry average to seize market opportunities and further expand our competitive lead. Through increased investments in infrastructure and technology,effective implementation of policies that reach the frontiers of our network,plus strategic placement and development of new product and services,we aim to achieve increase in quality of services,market share and profit generation,and ultimately deliver consistent and sustainable long-term value to our shareholders."

Ms.Huiping Yan,Chief Financial Officer of ZTO,added,"We beat consensus expectations for both parcel volume growth and earnings during the fourth quarter and the full year of 2018. Through sound execution of our corporate initiatives,the impact of intensifying competition on core express delivery ASP was kept in check to stay below 7% for the year,and cost productivity allowed us to drive down combined unit line-haul transportation and sorting hub costs per parcel by RMB0.11 for the year. Gross margin for our core express delivery business was 32.6% in 2018 compared to 33.9% last year. SG&A costs as a percentage of total revenue increased from 6.0% last year to 6.9%,which included the lump sum share-based compensation charge representing 1.1% of total revenue. Our corporate cost structure remains effective and provides healthy leverage. Adjusted net income grew 30.1% to 4.2 billion in 2018 while cash generated from operating activities was 4.4 billion. ZTO is well positioned to deliver stronger growth in 2019."

Fourth Quarter 2018 Financial Results

ThreeMonthsEndedDecember 31,

YearEndedDecember 31,

2017

2018

2017

2018

RMB

%

RMB

US$

%

RMB

%

RMB

US$

%

(inthousands,exceptpercentages)

Express delivery services

3,834,522

88.5

4,960,190

721,431

88.1

12,173,690

93.2

15,400,080

2,239,850

87.5

Freight forwarding services

269,557

6.2

392,525

57,090

7.0

269,557

2.1

1,278,741

185,985

7.3

Sale of accessories

201,764

4.7

252,806

36,769

4.5

591,716

4.5

812,866

118,226

4.6

Others

25,110

0.6

22,011

3,201

0.4

25,110

0.2

112,764

16,400

0.6

Total revenues

4,330,953

100.0

5,627,532

818,491

100.0

13,060,073

100.0

17,604,451

2,560,461

100.0

Revenueswere RMB5,331.0 million in the same period of 2017. Revenue from express delivery services increased by 29.4% compared to the same period of 2017,mainly driven by a 34.7% increase in parcel volume and partially offset by a decrease in unit price per parcel resulted from incremental volume incentives in response to competition. Revenue from freight forwarding services,which the Company acquired during the fourth quarter of 2017,increased 45.6% when compared to the same period of 2017. The increase in revenue from sales of accessories was consistent with increase in the sale of thermal paper used for the printing of digital waybills. Other revenues are composed of new service offerings such as financing and advertising services.

Three Months Ended December 31,

Year Ended December 31,

2017

2018

2017

2018

RMB

%of

revenues

RMB

US$

%of

revenues

RMB

%of

revenues

RMB

US$

%of

revenues

(inthousands,exceptpercentages)

Line-haul transportation

cost

1,511,259

35.0

1,947,587

283,264

34.6

4,797,799

36.7

5,757,701

837,422

32.7

Sorting hub cost

768,641

17.7

1,043,404

151,757

18.5

2,438,754

18.7

3,197,667

465,081

18.2

Freight forwarding cost

260,429

6.0

385,454

56,062

6.8

260,429

2.0

1,439

180,269

7.0

Cost of accessories sold

127,718

3.0

158,071

22,990

2.8

366,859

2.8

491,722

71,518

2.8

Other costs

309,649

7.1

542,827

78,952

9.8

850,648

6.5

1,553,039

225,881

8.8

Total cost of revenues

2,977,696

68.8

4,077,343

593,025

72.5

8,714,489

66.7

12,568

1,780,171

69.5

Total cost of revenueswas RMB4,077.3 million (US$593.0 million),an increase of 36.9% from RMB2,977.7 million in the same period last year.

Line haul transportation costwas RMB1,947.6 million (US$283.3 million),an increase of 28.9% from RMB1,511.3 million in the same period last year. As a percentage of revenues,line-haul transportation cost decreased to 34.6% from 35.0% in the same period last year,as a net result of (i) an increase in the usage of cost-advantaged self-owned and more efficient high capacity trailer trucks and (ii) increase in costs by third-party transportation during peak season. Total transportation cost of self-owned trucks accounted for 52.7% of the total truck transportation cost for the quarter,compared to 44.9% in the same period last year.

Sorting hub operating costwas RMB1,043.4million (US$151.8million),an increase of 35.7% from RMB768.6million in the same period last year. The increase was primarily due to (i) an increase of RMB214.4 million (US$31.2 million) in labor costs from wage hikes and additional hiring to handle increased parcel volumes during peak online shopping season and (ii) a RMB36.0 million (US$5.2 million) increase in depreciation and amortization costs associated with the newly installed automated sorting equipment. As of December 31,120 sets of automated sorting equipment have been put into use,compared to 58 sets as of December 31,2017.

Cost of accessorieswas RMB158.1million (US$23.0million),an increase of 23.8% from RMB127.7million in the same period last year. The increase was in line with the increase in the sale of accessories for thermal paper usage of which grew by 55.7% compared to the same period last year.

Other costswere RMB542.8million (US$79.0million),an increase of RMB233.2 million compared to the same period last year. The increase was primarily due to (i) an increase of RMB165.1 million (US$24.0 million) in dispatching costs associated with serving enterprise customers,(ii) an increase of RMB49.0 million (US$7.1 million) in expenses related to IT and technology development,and (iii) an increase of RMB33.6 million (US$4.9 million) in tax surcharges.

Gross Profitwas RMB1,550.2million (US$225.5million),353.3 million in the same period last year. Gross margin decreased to 27.5% from 31.2% in the same period last year. The decrease in gross margin was mainly driven by parcel volume growth but partially offset by (i) a decrease in unit price per parcel due to competition; (ii) an increase in services to large enterprise customers at a relatively lower margin; and (iii) an increase in third-party transportation cost during peak seasons. In addition,the lower-margin freight forwarding business caused minor dilution.

Total Operating Expenseswere RMB197.0 million (US$28.6 million),compared to RMB127.5 million in the same period last year.

Selling,general and administrative expenseswere RMB276.4 million (US$40.2 million),compared to RMB222.5 million in the same period last year. The increase was mainly due to (i) an increase of RMB39.9 million (US$5.8 million) in salaries and accrued bonuses and (ii) an increase of RMB9.7 million (US$1.4 million) in depreciation and amortization expenses. As a percentage of revenue,selling,general and administrative expenses accounted for 4.9%,compared to 5.1% during the same period last year,indicating corporate cost leverage.

Other operating income,netwas RMB79.5 million (US$11.6 million) for the quarter. Other operating income mainly consisted of government subsidies of RMB28.7 million (US$4.2 million) received in the fourth quarter of 2018 and a RMB43.6 million (US$6.3 million) rebate of fees from the Company's ADR bank.

Income from operationswas RMB1,353.2 million (US$196.8 million),an increase of 10.4% from RMB1,225.7 million for the same period last year. Operating margin decreased to 24.0% from 28.3% in the same period last year,mainly driven by the decrease in gross margin by 3.7 percentage points.

Interest incomewas RMB146.1 million (US$21.3 million),compared with RMB53.0 million in the same period in 2017,resulting from an increase in the amount of cash and interest-bearing bank deposits.

Interest expensewas zero compared with RMB2.5 million in the same period in 2017. There was no borrowing during the fourth quarter of 2018.

Impairment of investment in equity investee was zero for the quarter,compared with RMB30.0 million in the same period in 2017.

Foreign currency exchange gain,before taxwas RMB1.7million (US$0.2 million) in the fourth quarter of 2018.

Income tax expenseswere RMB222.6 million (US$32.4 million) and the effective income tax rate was 14.8% for the fourth quarter of 2018. The income tax expenses of RMB8.8 million in the fourth quarter of 2017 reflected the full year income tax credit of RMB285.9 million as one of the Company's subsidiaries was recognized as a High and New Technology Enterprise ("HNTE") by relevant PRC authorities in December 2017 which can enjoy a reduced income tax rate of 15% from a statutory rate of 25% for a three-year period starting January 1,2017 through December 31,2019.

Net incomewas RMB1,221.9 million in the same period last year.

Basic and diluted earnings per ADSwere RMB1.62 (US$0.24),compared with basic and diluted earnings per ADS of RMB1.72 and RMB1.71,in the same period last year.

Adjusted net incomewas RMB1,compared with adjusted net income of RMB1,265.4 million during the same quarter last year.

EBITDAwas RMB1,755.1 million (US$255.3 million),380.8 million in the same period last year.

Adjusted EBITDAwas RMB1,compared to RMB1,424.3 million in the same period last year.

Net cash provided by operating activitieswas RMB1,802.3 million (US$262.1 million),371.5 million in the same period last year.

Fiscal Year 2018 Financial Results

Revenueswere RMB17,060.1 million last year. The increase was mainly driven by a growth in parcel volume to 8,524 million during 2018 from 6,219 million in 2017. The COE Business acquired on October 1,2017 contributed RMB1,278.7 million (US$186.0 million) full year revenue in 2018,compared with RMB269.6 million for the fourth quarter of 2017.

Total cost of revenueswas RMB12,239.6 million (US$1,780.2 million),an increase of 40.5% from RMB8,714.5 million in the same period last year. Combined line-haul transportation cost and sorting hub operating cost per unit express delivery service decreased 11 cents for the year of 2018 driven by cost effective initiatives.

Line-haul transportation costwas RMB5,757.7 million (US$837.4 million),an increase of 20.0% from RMB4,797.8 million last year. The increase was in line with the increase in parcel volume and was mainly due to an increase of RMB1,068.7 million (US$155.4 million) associated with the Company's self-owned fleet which includes fuel,tolls,drivers' compensation,depreciation and maintenance expenses,and a decrease of RMB46.2 million (US$6.7 million) in outsourced transportation costs. In 2018,the Company increased use of self-owned and operated,more cost-efficient higher capacity trucks in place of third party outsourced trucks to enhance transportation efficiency. Depreciation expenses relating to the Company's expanded self-owned fleet increased by RMB127.7 million (US$18.6 million) after partially offset increases in fuel price,especially during peak season such as Singles Day. As a percentage of revenues,line haul transportation cost accounted for 32.7% of total revenues,a decrease from 36.7% last year.

Sorting hub operating costwas RMB3,197.7million (US$465.1million),an increase of 31.1% from RMB2,438.8million last year. The increase was mainly due to (i) increased labor costs of RMB544.7 million (US$79.2 million) as a result of wage increases and the hiring of additional employees to support parcel volume growth,(ii) an increase of RMB119.4 million (US$17.4 million) in depreciation expenses driven by the expansion of sorting hubs and installation of more automated sorting equipment,and (iii) an increase of RMB78.8 million (US$11.5 million) in rental costs and related utilities cost. As of December 31,120 sets of automated sorting equipment have been installed and put into operation. As a percentage of revenues,sorting hub operating cost accounted for 18.2%,a decrease from 18.7% last year,primarily due to economies of scale and an improvement in operating efficiency.

Cost of accessories soldwas RMB491.7million (US$71.5million),an increase from RMB366.9million last year. The increase was in line with growth in the Company's revenue from the sale of accessories to its network partners which includes thermal paper for digital waybill printing,portable bar code readers,ZTO-branded packaging materials and uniforms. As a percentage of revenues,cost of accessories accounted for 2.8% in 2018,slightly lower than in 2017.

Other costswere RMB1,553.0million (US$225.9million),an increase from RMB850.6million in 2017,primarily due to (i) an increase in costs associated with serving key enterprise customers of RMB428.8 million (US$62.4 million); (ii) an increase of RMB155.1 million (US$22.6 million) in the IT expenses related to IT and technology development,and (iii) an increase of RMB137.4 million (US$20.0 million) in tax surcharges.

Gross Profitwas RMB5,364.9million (US$780.3million),345.6 million last year. Gross profit margin decreased to 30.5% from 33.3% in 2017,and was primarily attributable to parcel volume growth and productivity gain partially offset by (i) decrease in unit price; (ii) increase in lower margin full-year consolidated freight forwarding and lower margin enterprise customers business.

Total Operating Expenseswere RMB1,032.7 million (US$150.2 million),compared to RMB597.1 million last year.

Selling,general and administrative expenseswere RMB1,210.7 million (US$176.1 million),an increase of 55.1% from RMB780.5 million in the last year. The increase was primarily due to (i) an increase of RMB208.8 million (US$30.4 million) in share-based compensation expenses of which RMB188.6 million (US$27.4 million) was a lump sum charge for 2017 grant in contrast to 2016 grant that is vested over three years; (ii) an increase of RMB104.3 million (US$15.2 million) in wages and social welfare expenses; (iii) an increase of RMB24.5 million (US$3.6 million) in professional service charges; (iv) an increase of RMB23.2 million (US$3.4 million) in depreciation and amortization expenses,and (v) an increase of RMB30.2 million (US$4.4 million) in sundry office,utilities and communication charges.

Other operating income,netwas RMB178.1 million (US$25.9 million),compared with RMB183.4 million last year,which is mainly composed of rebate of fees from the Company's ADRs bank,government subsidies and sublease income.

Income from operationswas RMB4,332.2 million (US$630.1 million),an increase of 15.6% from RMB3,748.4 million last year. Operating margin decreased to 24.6% from 28.7% last year,primarily due to the decrease in gross margin by 2.8 percentage points.

Interest incomewas RMB401.2 million (US$58.3 million),compared with RMB166.3 million in 2017,primarily due to the increased amount of cash and interest-earning bank deposits.

Interest expensewas RMB0.8 million (US$0.1 million),compared with RMB15.7 million in 2017. There was no borrowing since the second quarter of 2018.

Impairment of investment in equity investee was zero for this year,compared with RMB30.0 million in 2017 associated with the Company's investment in Wheat Commune Group Inc.,a campus-focused delivery and retail service provider in China,as it revamped its business model.

Gain on disposal of equity investees was RMB562.6 million (US$81.8 million) and was mainly composed of the share disposal of the Hive Box investment for a cash consideration of RMB697.9 million (US$105.5 million) in 2018.

Foreign currency exchange net gainwas RMB41.2 million (US$6.0 million) was mainly due to the appreciation of the onshore U.S. dollar-denominated bank deposits against the Chinese Renminbi.

Net incomeincreased 38.9% to RMB4,387.9 million (US$638.2 million) from RMB3,158.9 million in 2017. Net income margin increased to 24.9% from 24.2% in 2017.

Basic and diluted earnings per ADSwere RMB5.83 (US$0.85) and RMB5.82 (US$0.85),compared with basic and diluted earnings per ADS of RMB4.41 and RMB4.40 last year.

Adjusted net incomewas RMB4,compared with adjusted net income of RMB3,229.6 million during last year.

EBITDAwas RMB6,171.5 million (US$897.6 million),compared with RMB4,381.3 million last year.

Adjusted EBITDAwas RMB5,452.0 million last year.

Net cash provided by operating activitieswas RMB4,404.1million (US$640.5 million),630.7 million last year.

Business Outlook

Based on the current market conditions and current operations,the Company's parcel volume for 2019 is expected to be in the range of 11.51 billion to 11.93 billion,representing a 35% to 40% increase year over year,and the Company's adjusted net income is expected to be in the range of RMB4.8 billion to RMB5.2 billion,representing a 14.3% to 23.8% increase from the same period of 2018. The Company will no longer provide quarterly estimates going forward. Above estimates represent management's current and preliminary view,which are subject to change.

Special Dividend

The board of directors has approved a special dividend of US$0.24 per ADS for 2018,which is expected to be paid on April 8,2019 to shareholders of record as of the close of business on April 1,2019.

Company Share Purchase

On November 15,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.During the fourth quarter of 2018,the Company has purchased an aggregate of 1,700,000 ADSs at an average purchase price of US$15.85 per ADS,including repurchase commissions.

The Company believes that the share repurchase program represents ZTO's confidence in the overall market opportunities as well as ZTO's solid operating fundamentals and financial strength for sustained profitable growth and value creation for its shareholders.

Exchange Rate

This announcement contains translation of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted,all translations from Renminbi to U.S. dollars were made at the exchange rate of RMB6.8755 to US$1.00,the noon buying rate on December 28,2018 as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve Systems.

Use of Non-GAAP Financial Measures

The Company uses adjusted EBITDA and adjusted net income,each a non-GAAP financial measure,in evaluating ZTO's operating results and for financial and operational decision-making purposes.

Reconciliations of the Company's non-GAAP financial measures to its U.S. GAAP financial measures are shown in tables at the end of this earnings release,which provide more details about the non-GAAP financial measures.

The Company believes that adjusted EBITDA and adjusted net income help identify underlying trends in ZTO's business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in income from operations and net income. The Company believes that adjusted EBITDA and adjusted net income provide useful information about its operating results,enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by ZTO's management in its financial and operational decision-making.

Adjusted EBITDA and adjusted net income should not be considered in isolation or construed as an alternative to net income or any other measure of performance or as an indicator of the Company's operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted EBITDA and adjusted net income presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently,limiting their usefulness as comparative measures to ZTO's data. ZTO encourages investors and others to review the Company's financial information in its entirety and not rely on a single financial measure.

Conference Call Information

ZTO's management team will host an earnings conference call at 9:00 PM U.S. Eastern Time on Tuesday,March 12,2019 (9:00 AM Beijing Time on March 13,2019).

Dial-in details for the earnings conference call are as follows:

United States:

1-888-317-6003

Hong Kong:

852-5808-1995

China:

4001-201203

International:

1-412-317-6061

Passcode:

1062029

Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call.

A replay of the conference call may be accessed by phone at the following numbers until March 19,2019:

United States:

1-877-344-7529

International:

1-412-317-0088

Passcode:

10128825

Additionally,a live and archived webcast of the conference call will be available at http://zto.investorroom.com.

About ZTO Express (Cayman) Inc.

ZTO Express (Cayman) Inc. (NYSE: ZTO) ("ZTO" or the "Company") is a leading and fast-growing express delivery company in China. ZTO provides express delivery service as well as other value-added logistics services through its extensive and reliable nationwide network coverage in China.

ZTO operates a highly scalable network partner model,which the Company believes is best suited to support the significant growth of e-commerce in China. The Company leverages its network partners to provide pickup and last-mile delivery services,while controlling the mission-critical line-haul transportation and sorting network within the express delivery service value chain.

For more information,please visit http://zto.investorroom.com.

Safe Harbor Statement

This news release contains "forward-looking" statements within the meaning of Section27A of the Securities Act of 1933,as amended,and Section21E of the Securities Exchange Act of 1934,and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to the Company's unaudited results for the fourth quarter of 2018,ZTO management quotes and the Company's financial outlook.

These forward-looking statements are not historical facts but instead represent only the Company's belief regarding expected results and events,many of which,by their nature,are inherently uncertain and outside of its control. The Company's actual results and other circumstances may differ,possibly materially,from the anticipated results and events indicated in these forward-looking statements. Announced results for the fourth quarter and fiscal year of 2018 are preliminary,unaudited and subject to audit adjustment. In addition,the Company may not meet its financial outlook included in this news release and may be unable to grow its business in the manner planned. The Company may also modify its strategy for growth. In addition,there are other risks and uncertainties that could cause the Company's actual results to differ from what it currently anticipates,including those relating to the development of the e-commerce industry in China,its significant reliance on the Alibaba ecosystem,risks associated with its network partners and their employees andpersonnel,intense competition which could adversely affect the Company's results of operations and marketshare,any service disruption of the Company's sorting hubs or the outlets operated by its network partners or its technology system. For additional information on these and other important factors that could adversely affect the Company's business,financial condition,results of operations,and prospects,please see its filings with the U.S. Securities and Exchange Commission.

All information provided in this press release and in the attachments is as of the date of the press release. The Company undertakes no obligation to update any forward-looking statement,whether as a result of new information,future events or otherwise,after the date of this release,except as required by law. Such information speaks only as of the date of this release.

For investor and media inquiries,please contact:

ZTO

Investor Relations Department

E-mail: ir@zto.com

Christensen

In China

Mr.Christian Arnell

Phone: +86-10-5900-1548

E-mail: carnell@christensenir.com

In US

Mr.Tip Fleming

Phone: +1-917-412-3333

Email: tfleming@Christensenir.com

UNAUDITED CONSOLIDATED FINANCIAL DATA

Summary of Unaudited Consolidated Comprehensive Income Data:

Three Months Ended December 31,

2017

2018

2017

2018

RMB

RMB

US$

RMB

RMB

US$

(inthousands,exceptforshareandpersharedata)

Revenues

4,953

5,491

13,073

17,461

Cost of revenues

(2,696)

(4,343)

(593,025)

(8,489)

(12,568)

(1,171)

Gross profit

1,353,257

1,550,189

225,466

4,345,584

5,364,883

780,290

Operating income (expenses):

Selling,general and administrative

(222,459)

(276,424)

(40,204)

(780,517)

(1,210,717)

(176,091)

Other operating income,net

94,913

79,458

11,557

183,368

178,057

25,897

Total operating expenses

(127,546)

(196,966)

(28,647)

(597,149)

(1,032,660)

(150,194)

Income from operations

1,225,711

1,223

196,819

3,748,435

4,332,223

630,096

Other income (expenses):

Interest income

52,950

146,139

21,255

166,325

401,162

58,347

Interest expense

(2,452)

—

—

(15,668)

(780)

(113)

Gain on disposal of equity investees and

subsidiary

—

—

—

—

562,637

81,832

Impairment of investment in equity investee

(30,000)

—

—

(30,000)

—

—

Foreign currency exchange gain/(loss),

before tax

(14,763)

1,659

241

(48,149)

41,189

5,991

Income before income tax,and share of loss in

equity method investments

1,231,446

1,501,021

218,315

3,820,943

5,336,431

776,153

Income tax expense

(8,759)

(222,639)

(32,381)

(646,361)

(929,133)

(135,137)

Share of gain/(loss) in equity method

investments

(813)

472

69

(15,682)

(19,386)

(2,820)

Net income

1,221,874

1,854

186,003

3,158,900

4,387,912

638,196

Net loss (income) attributable to

noncontrolling interests

431

(3,312)

(482)

763

(4,887)

(711)

Net income attributable to ZTO Express

(Cayman) Inc.

1,222,305

1,275,542

185,521

3,159,663

4,383,025

637,485

Net income attributable to ordinary

shareholders

1,485

Net earnings per share/ADS attributable to

ordinary shareholders

Basic

1.72

1.62

0.24

4.41

5.83

0.85

Diluted

1.71

1.62

0.24

4.40

5.82

0.85

Weighted average shares used in calculating

net earnings per ordinary share/ADS

Basic

712,237,048

786,966,574

786,574

717,138,526

751,814,077

751,077

Diluted

712,788,475

787,142

787,142

717,599,562

752,672,956

752,956

Other comprehensive income,net of tax of nil:

Foreign currency translation adjustment

(177,137)

23,488

3,416

(590,545)

867,612

126,189

Comprehensive income

1,044,737

1,302,342

189,419

2,568,355

5,255,524

764,385

Comprehensive loss (income) attributable to

noncontrolling interests

431

(3,887)

(711)

Comprehensive income attributable to ZTO

Express (Cayman) Inc.

1,045,168

1,299,030

188,937

2,569,118

5,250,637

763,674

Unaudited Consolidated Balance Sheets Data:

Asof

December31,

2017

December 31,2018

RMB

RMB

US$

(inthousands,exceptforshareandpersharedata)

ASSETS

Current assets:

Cash and cash equivalents

5,425,024

4,622,554

672,323

Restricted cash

348,710

400

58

Accounts receivable,net of allowance for doubtful accounts of

RMB13,798 and RMB13,996 at December31,2017 and December

31,respectively

287,835

596,995

86,829

Financing receivables

64,030

517,983

75,339

Short-term investment

5,224,559

13,852

1,978,017

Inventories

34,231

43,813

6,372

Advances to suppliers

263,574

337,874

49,142

Prepayments and other current assets

719,983

1,507,996

219,329

Amounts due from related parties

9,900

6,600

960

Total current assets

12,377,846

21,234,067

3,088,369

Investments in equity investees

610,160

2,207,410

321,054

Property and equipment,net

6,473,010

9,035,704

1,314,190

Land use rights,net

1,602,908

1,969,176

286,405

Intangible assets,net

60,424

54,227

7,887

Goodwill

4,241,541

4,541

616,907

Deferred tax assets

152,763

318,063

46,260

Other non-current assets

308,986

622,669

90,563

TOTAL ASSETS

25,827,638

39,682,857

5,771,635

LIABILITIES AND EQUITY

Current liabilities

Short-term bank borrowing

250,000

—

—

Accounts payable

889,139

1,311,807

190,794

Advances from customers

258,965

436,710

63,517

Income tax payable

221,926

405,683

59,004

Amounts due to related parties

114,913

132,216

19,230

Acquisition consideration payable

130,004

19,581

2,848

Dividends payable

—

1,699

247

Other current liabilities

2,281,067

2,833,769

412,157

Total current liabilities

4,146,014

5,141,465

747,797

Deferred tax liabilities

157,320

157,940

22,971

Acquisition consideration payable

22,942

22,942

3,337

Other non-current liabilities

60,045

90,961

13,231

TOTAL LIABILITIES

4,386,321

5,413,308

787,336

Asof

December31,2018

RMB

RMB

US$

Shareholders' equity

Ordinary shares (US$0.0001 par value; 10,000,000 shares authorized,

731,406,440 shares issued and 710,804,716 shares outstanding as of

December31,2017; 811,267,551 shares issued and 785,463,859 shares

outstanding as of December 31,2018)

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) income

(295,896)

571,716

83,153

ZTO Express (Cayman)Inc. shareholders' equity

21,435,313

34,217,238

4,976,691

Noncontrolling interests

6,004

52,311

7,608

Total Equity

21,441,317

34,269,549

4,984,299

TOTAL LIABILITIES AND EQUITY

25,635

Summary of Unaudited Consolidated Cash Flow Data:

Three Months Ended December 31,

2017

2018

2017

2018

RMB

RMB

US$

RMB

RMB

US$

(inthousands)

Net cash provided by operating

activities

1,371,547

1,802,342

262,140

3,630,684

4,404,051

640,543

Net cash used in investing

activities[6]

(722,335)

(3,041)

(484,334)

(8,294,547)

(12,872,633)

(1,247)

Net cash provided by/(used in)

financing activities[7]

(201,873)

(153,225)

(22,286)

(1,061,558)

7,042,122

1,024,234

Effect of exchange rate changes

on cash,cash equivalents and

restricted cash

(111,894)

32,519

4,730

(424,000)

275,680

40,096

Net increase/(decrease) in cash,

cash equivalents and restricted

cash

335,445

(1,648,405)

(239,750)

(6,149,421)

(1,150,780)

(167,374)

Cash,cash equivalents and

restricted cash at beginning of

period

5,289

6,271,359

912,131

11,923,155

5,773,734

839,755

Cash,cash equivalents and

restricted cash at end of period

5,734

4,954

672,381

5,381

[6] The amount of cash used in investing activities mainly includes purchases of the fixed term bank deposits with an original maturity of three

months to one year. For the fourth quarter of 2017 and 2018,the amounts of net cashflow out for purchasing the short-term investment are

approximately RMB2,472.4 million and RMB1,701.6 million (US$247.5 million) of such deposits,respectively.

[7] The amount of cash provided by/(used in) financing activities mainly includes the proceeds from Alibaba's investment,which are

approximately RMB7.6 billion (US$1.2 billion) received before June 30,while the rest of approximately RMB1.3 billion (US$0.2

billion) were received in early July 2018.

Reconciliations of GAAP and Non-GAAP Results

Three Months Ended December 31,exceptforshareandpersharedata)

Net income

1,196

Add:

Share-based compensation expense

13,492

10,876

1,582

40,727

249,478

36,285

Impairment of investment in equity

investee

30,000

—

—

30,000

—

—

Less:

Gain on disposal of equity

investees and subsidiary,net of

income taxes

—

—

—

—

(436,277)

(63,454)

Adjusted net income

1,265,366

1,289,730

187,585

3,229,627

4,201,113

611,027

Net income

1,196

Add:

Depreciation

135,002

243,940

35,480

522,853

809,005

117,665

Amortization

12,760

9,641

1,402

37,512

44,713

6,503

Interest expenses

2,452

—

—

15,668

780

113

Income tax expenses

8,759

222,639

32,381

646,361

929,133

135,137

EBITDA

1,380,847

1,755,074

255,266

4,381,294

6,171,543

897,614

Add:

Share-based compensation expense

13,before

income taxes

—

—

—

—

(562,637)

(81,832)

Adjusted EBITDA

1,424,339

1,765,950

256,848

4,452,021

5,858,384

852,067

View original content:/news-releases/zto-reports-fourth-quarter-and-fiscal-year-2018-unaudited-financial-results-300811046.html