ZTO Reports Fourth Quarter 2020 and Fiscal Year 2020 Unaudited Financial Results

17.0 Billion Annual Parcels Expanded Market Share to 20.4%

Achieved RMB4.6 Billion Adjusted Net Income DespitePandemic& Fierce Competition

US$0.25 per Share Dividend Announced for 2020

SHANGHAI,March 18,2021 -- ZTO Express (Cayman) Inc. (NYSE: ZTO and HKEX: 2057),a leading and fast-growing express delivery company in China ("ZTO" or the "Company"),today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31,2020[1]. The Company exceeded its volume guidance for 2020 by growing parcel volume 40.3% and expanded parcel volume market share by 1.3 percentage points to 20.4% while maintaining high quality of service and customer satisfaction.

Fourth Quarter 2020 Financial Highlights

Revenues were RMB8,257.1 million (US$1,265.5 million),an increase of 20.6% from RMB6,846.5 million in the same period of 2019.

Gross profit was RMB1,858.3 million (US$284.8 million),a decrease of 6.9% from RMB1,996.1 million in the same period of 2019.

Net income was RMB1,291.6 million (US$197.9 million),a decrease of 44.3% from RMB2,316.8 million in the same period of 2019.

Adjusted EBITDA[2] was RMB2,119.3 million (US$324.8 million),a decrease of 9.6% from RMB2,343.9 million in the same period of 2019.

Adjusted net income[3] was RMB1,290.5 million (US$197.8 million),a decrease of 20.9% from RMB1,631.5 million in the same period of 2019.

Basic and diluted earnings per American depositary share ("ADS"[4]) were RMB1.55 (US$0.24),a decrease of 48.0% and 47.8% from RMB2.98 and RMB2.97 in the same period of 2019,respectively.

Adjusted basic and diluted earnings per American depositary share[5] attributable to ordinary shareholders were RMB1.55 (US$0.24),a decrease of 26.2% from RMB2.10 in the same period of 2019.

Net cash provided by operating activities was RMB2,040.3 million (US$312.7 million),compared with RMB2,260.4 million in the same period of 2019.

Fiscal Year 2020 Financial Highlights

Revenues were RMB25,214.3 million (US$3,864.3 million),an increase of 14.0% from RMB22,109.9 million in 2019.

Gross profit was RMB5,837.1 million (US$894.6 million),a decrease of 11.8% from RMB6,621.2 million in 2019.

Net income was RMB4,326.4 million (US$663.1 million),a decrease of 23.7% from RMB5,671.3 million in 2019.

Adjusted EBITDA[2] was RMB7,155.1 million (US$1,096.6 million),a decrease of 6.3% from RMB7,635.2 million in 2019.

Adjusted net income[3] was RMB4,589.5 million (US$703.4 million),a decrease of 13.3% from RMB5,292.4 million in 2019.

Basic and diluted earnings per American depositary share ("ADS"[4]) were RMB5.42 (US$0.83),a decrease of 25.1% and 25.0% from RMB7.24 and RMB7.23 in 2019,respectively.

Adjusted basic and diluted earnings per American depositary share[5] attributable to ordinary shareholders were RMB5.75 (US$0.88),a decrease of 14.8% from RMB6.75 in 2019.

Net cash provided by operating activities was RMB4,950.7 million (US$758.7 million),compared with RMB6,304.2 million in 2019.

Operational Highlights for Fourth Quarter 2020

Parcel volume was 5,410 million,an increase of 46.5% from 3,692 million in the same period of 2019.

Number of pickup/delivery outlets was approximately 30,000 as of December 31,2020.

Number of direct network partners was over 5,350 as of December 31,2020.

Number of line-haul vehicles was approximately 10,450 as of December 31,2020,which included approximately 9,700 self-owned vehicles and over 750 vehicles owned and operated by Tonglu Tongze Logistics Ltd.,a transportation operator that works exclusively for ZTO.

Out of the approximately 9,700 self-owned trucks,approximately 7,900 were high capacity 15 to 17-meter-long models as of December 31,compared to over 7,400 as of September 30,2020.

Number of line-haul routes between sorting hubs was over 3,600 as of December 31,compared to over 3,2020.

Number of sorting hubs was 94 as of December 31,among which 84 are operated by the Company and 10 by the Company's network partners.

(1) An investor relations presentation accompanies this earnings release and can be found at http://zto.investorroom.com.

(2) 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.

(3) 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.

(4) One ADS represents one Class A ordinary share.

(5) Adjusted basic and diluted earnings per American depositary share attributable to ordinary shareholders is a non-GAAP financial measure. It is defined as adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted shares,respectively.

Mr. Meisong Lai,Founder,Chairman and Chief Executive Officer of ZTO,commented "We exceeded high end of our volume target range with over 17 billion parcels in 2020. Fueled by strong demand from domestic consumptions,particularly during the steady economic recovery post pandemic,China express delivery industry achieved the second consecutive 10-billion-annual growth,and ZTO expanded our leading market share to 20.4%. Throughout the year,we stood strong together with our network partners to maintain network stability and delivered a solid bottom-line despite adverse impact by COVID-19 and fierce price competition."

Mr. Lai added,"Scale and efficiencies are mission critical to express delivery operations. ZTO has been,since its early years,consistently focusing on building strong infrastructure and implementing suitable technology as volume grew. We have established clear leadership in our operating capacity and cost advantages. With our increasing ability to gain access and attain scarce resources,we are better equipped to maximize utilization by integrating broader-range commerce logistics product and services that are catered towards diversified customer needs. With a positive outlook of the logistic industry supported by a steady economic expansion in China,we will further invest for the future,think green and take on social responsibilities,enhance our brand recognition,solidify core business leadership and innovate for differentiating value prepositions in order to advance towards our mission to become a world-class comprehensive logistic service provider."

Ms. Huiping Yan,Chief Financial Officer of ZTO,commented,"Accelerated volume growth and market share gain is the most critical among our primary goals at this stage of growth development. We allowed our core express delivery business ASP to decline by approximately 20% to achieve the record level volume increments for the year and expanded our market share by another 1.3 points. Combining the 14.3% per parcel productivity gain on combined sorting and transportation cost,the largest for the past six consecutive years,and a 5.6% stable corporate SG&A cost structure,we achieved RMB 4.6 billion adjusted net profit,a 13.3% decline that was far less severe than our comparable peers."

Ms. Yan added,"Capital expenditure increased by 76.2% to a record RMB 9.2 billion in 2020. Cash from operating activities was RMB 4.95 billion in 2020. Our capital investment strategy has expanded to achieve a larger infrastructure footprint in order to deliver synergistic value across our developing businesses within the ZTO's eco-system such as LTL business,Cloud-warehouse,Cold-chain logistics network and time-definite product portfolio."

Fourth Quarter 2020 Financial Results

Three Months Ended December 31,

2019

2020

RMB

%

RMB

US$

%

(in thousands,except percentages)

Express delivery services

6,106,947

89.2

7,172,717

1,099,267

86.9

Freight forwarding services

322,203

4.7

618,930

94,855

7.5

Sale of accessories

312,118

4.6

336,628

51,590

4.1

Others

105,248

1.5

128,869

19,751

1.5

Total revenues

6,846,516

100.0

8,257,144

1,265,463

100.0

Total Revenues were RMB8,846.5 million in the same period of 2019. Revenue fromthe core express delivery business increased by 17.1% compared to the same period of 2019,as a combined result of a 46.5% increasein parcel volume and a 20.1% decreasein parcel unit price mainly driven by competition. Revenue from freight forwarding services increased by 92.1% compared to the same period of 2019,driven by surging cross border e-commerce demand and improved pricing as a result of the COVID-19 outbreak globally. Revenue from sales of accessories,largely consisting of the sales of thermal paper used for digital waybills' printing,increased by 7.9%,much lower than volume increase due to increasing usage of lower-priced single-sheet digital waybill since the second half of 2019. Other revenues were mainly derived from financing services and advertising services.

Three Months Ended December 31,

2019

2020

RMB

% of

RMB

US$

% of

revenues

revenues

(in thousands,except percentages)

Line-haul transportation cost

2,392,991

35.0

2,956,311

453,075

35.8

Sorting hub cost

1,285,951

18.8

1,650,757

252,989

20.0

Freight forwarding cost

315,701

4.6

561,273

86,019

6.8

Cost of accessories sold

129,997

1.9

109,288

16,749

1.3

Other costs

725,806

10.5

1,121,184

171,829

13.6

Total cost of revenues

4,850,446

70.8

6,398,813

980,661

77.5

Total cost of revenues was RMB6,398.8 million (US$980.7 million),an increase of 31.9% from RMB4,850.4 million in the same period last year.

Line haul transportation cost was RMB2,956.3 million (US$453.1 million),an increase of 23.5% from RMB2,393.0 million in the same period lastyear. The line-haul transportation cost per parcel declined by 15.7% to RMB0.55 achieved mainly through increased usage of self-owned vehicles of which a greater number were higher-capacity trailer trucks. Approximately 78.9% of the line-haul transportation costs were associated with self-owned fleet compared to that of 59.9% in the same period last year.

Sorting hub operating cost was RMB1,650.8 million (US$253.0 million),an increase of 28.4% from RMB1,286.0 million in the same period last year.The increase was primarily consisted of (i) an RMB269.3 million (US$41.3 million) increase in labor associated costs,and (ii) an RMB70.0 million (US$10.7 million) increase in depreciation and amortization costs due to the increased number of installed automated sorting equipment. As of December 31,339 sets of automated sorting equipment were in service,compared to 265 sets as of December 31,2019. The sorting hub operating cost per parcel decreased by 12.4% to RMB0.31 benefiting from higher automation as well as improved economies of scale.

Cost of accessories sold was RMB109.3 million (US$16.7 million),a decrease of 15.9% from RMB130.0 million in the same period last year. Thedecrease was mainly driven by the increased use of lower-cost single-sheet digital waybills since the second half of 2019.

Other costs were RMB1,121.2 million (US$171.8 million),an increase of RMB395.4 million (US$60.6 million) compared to the same period last year.The increase was mainly consisted of (i) an increase of RMB348.5 million (US$53.4 million) in dispatching costs serving enterprise customers which is consistent with the associated volume increase of 76.0% and (ii) an increase of RMB63.6 million (US$9.7million) in expenses related to the development of technology platform.

Gross Profit was RMB1,996.1 million in the same period last year. Gross margin rate was 22.5% compared to 29.2% in the same period last year as a net result of competition-led ASP decline of 20.1% for the core express delivery partially offset by related unit cost decline of 12.1%.

Total Operating Expenses were RMB291.7 million (US$44.7 million),compared to RMB186.4 million in the same period last year.

Selling,general and administrative expenses were RMB417.6 million (US$64.0 million),increased by 6.5% from RMB392.2 million in the sameperiod last year,mainly due to an increase of RMB36.7 million (US$5.6 million) in salaries and accrued performance-based bonuses.

Other operating income,net was RMB125.9 million (US$19.3 million),compared to RMB205.8 million in the same period last year. Other operatingincome mainly consisted of (i) RMB53.5 million (US$8.2 million) ADR fee rebate,(ii) RMB36.6 million (US$5.6 million) of VAT super deduction,and (iii) government subsidies and tax rebates of RMB32.2 million (US$4.9 million).

Income from operations was RMB1,566.6 million (US$240.1 million),a decrease of 13.4% from RMB1,809.7 million for the same period last year.

Operating margin rate decreased to 19.0% from 26.4% in the same period last year,resulted from the 6.7 percentage points drop in gross margin rate.

Interest income was RMB105.6 million (US$16.2 million),compared with RMB148.1 million in the same period last year.

Interest expenses was RMB12.2 million (US$1.9 million).

Foreign currency exchange loss,before tax was RMB81.9 million (US$12.5 million) in the fourth quarter of 2020.

Income tax expenses were RMB289.6 million (US$44.4 million) compared to RMB331.3 million in the same period last year.

Net income was RMB1,which decreased by 44.3% from RMB2,316.8 million year over year mainly due to intensifiedprice competition. There was a 754.5 million one-time unrealized valuation gain on equity investment in Cainiao Smart Logistics Network Limited in the fourth quarter of 2019.

Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB1.55 (US$0.24),compared to basic and diluted earnings per ADS of RMB2.98 and RMB2.97 in the same period lastyear.

Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB1.55 (US$0.24),compared with RMB2.10 in the sameperiod last year.

Adjusted net income was RMB1,compared with RMB1,631.5 million during the same period last year.

EBITDA was RMB2,120.4 million (US$325.0 million),compared with RMB3,029.2 million in the same period last year.

Adjusted EBITDA was RMB2,compared to RMB2,343.9 million in the same period last year.

Net cash provided by operating activities was RMB2,260.4 million in the same period last year.

Fiscal Year 2020 Financial Results

Year Ended December 31,except percentages)

Express delivery services

19,606,214

88.7

21,900,201

3,356,353

86.9

Freight forwarding services

1,235,961

5.6

1,862,689

285,470

7.4

Sale of accessories

1,089,977

4.9

1,133,712

173,749

4.5

Others

177,794

0.8

317,688

48,687

1.2

Total revenues

22,109,946

100.0

25,214,290

3,864,259

100.0

Revenues were RMB25,109.9 million last year. The revenue from core businessincreased 11.9%,which was a combined result of a 40.3% parcel volume growthand a 20.2% unit price per parcel decline. The freight forwarding business contributed RMB1,862.7 million (US$ 285.5 million) of full year revenue in 2020,236.0 million for the year of 2019. Revenue from sales of accessories,increased by merely 4.0% due to increased usage of lower-priced single-sheet digital waybill during the year 2020. Other revenues were mainly derived from financing services and advertising services.

Year Ended December 31,except percentages)

Line-haul transportation cost

7,466,043

33.8

8,697,081

1,332,886

34.5

Sorting hub cost

4,338

18.6

5,224,544

800,697

20.7

Freight forwarding cost

1,209,523

5.5

1,712,592

262,466

6.8

Cost of accessories sold

544,166

2.5

391,253

59,962

1.6

Other costs

2,159,708

9.7

3,351,714

513,672

13.3

Total cost of revenues

15,488,778

70.1

19,377,184

2,969,683

76.9

Total cost of revenues was RMB19,377.2 million (US$2,969.7 million),an increase of 25.1% from RMB15,488.8 million in the same period last year.

Line-haul transportation cost was RMB8,697.1 million (US$1,332.9 million),an increase of 16.5% from RMB7,466.0 million last year. The line-haul transportation cost per parcel declined 17.0% to RMB0.51. The decrease was primarily due to (i) increased usage of self-owned vehicles with a greater number of higher-capacity trailer trucks,(ii) reduced toll road fee charges by a federal waiver policy which took effect in mid-February and lasted through early May to provide relief and support economic recovery from COVID-19 outbreak,and (iii) declined diesel price.

Sorting hub operating cost was RMB5,224.5 million (US$800.7 million),an increase of 27.1% from RMB4,109.3 million last year. The increase was mainly due to (i) increased labor costs of RMB759.6 million (US$116.4 million) from wage increases and headcount increase against higher volume growth,and (ii) an increase of RMB273.8 million (US$42.0 million) in depreciation expenses driven by the expansion of sorting hubs and installation of more automated sorting equipment. Sorting hub cost per parcel declined by 9.4% to RMB0.31 compared with last year mainly driven by higher utilization of automation equipment and improved economies of scale.

Cost of accessories was RMB391.3 million (US$60.0 million),a decrease of 28.1% from RMB544.2 million last year. The decrease was mainly attributable to the increased use of lower-cost single-sheet digital waybill since its implementation in the second half of 2019.

Other costs were RMB3,351.7 million (US$513.7 million),an increase of RMB1,192.0 million (US$182.7 million) from RMB2,159.7 million in 2019,primarily due to (i) an increase in costs associated with serving key enterprise customers of RMB921.6 million (US$141.2 million); and (ii) an increase of RMB246.1million (US$37.7 million) in expenses related to technology development.

Gross Profit was RMB5,621.2 million last year. Gross profit margin decreased to23.1% from 29.9% in 2019,which resulted mainly from competition-led ASP decline partially offset by cost productivity gain.

Total Operating Expenses were RMB1,082.7 million (US$165.9 million),compared to RMB1,158.3 million last year.

Selling,general and administrative expenseswere RMB1,663.7 million (US$255.0 million),an increase of 7.6% from RMB1,546.2 million last year. The increase was primarily due to (i) an increase of RMB107.1 million (US$16.4 million) in compensation and benefit expenses; (ii) an increase of RMB25.1 million (US$3.8 million) in headquarter facility expenses; and (iii) an increase of RMB21.0 million (US$3.2 million) in depreciation and amortization expenses.

Other operating income,net was RMB581.0 million (US$89.0 million),compared with RMB387.9 million last year. The increase is mainlycomposed of (i) RMB93.2 million (US$14.3 million) ADR fee rebate,(ii) the RMB50.5 million (US$7.7 million) of VAT super deduction,and (iii) an increase in government subsidies and tax rebate of RMB42.0 million (US$6.4 million).

Income from operations was RMB4,754.4 million (US$728.6 million),a decrease of 13.0% from RMB5,462.8 million last year. Operating margin decreased to 18.9% from 24.7% last year.

Interest income was RMB442.7 million (US$67.8 million),compared with RMB585.4 million in 2019.

Gain on disposal of equity investees and subsidiary was RMB1.1 million (US$0.2 million).

Impairment of investment in equity investee was zero compared with RMB56.0 million last year.

Unrealized gain from investment in equity investeewas zero compared with RMB754.5 million last year.

Foreign currency exchange loss,before tax was RMB127.2 million (US$19.5 million),mainly due to the depreciation of the onshore U.S. dollar-denominatedbank deposits against the Chinese Renminbi.

Net income decreased 23.7% to RMB4,326.4 million (US$663.1 million) from RMB5,671.3 million in 2019 mainly due to intensifiedprice competition. There was a 754.5 million unrealized one-time valuation gain on equity investment in Cainiao Smart Logistics Network Limited in 2019. Net income margin was 17.2% in 2020 compared with 25.7% in 2019.

Basic and diluted earnings per ADS were RMB5.42 (US$0.83) compared with basic and diluted earnings per ADSof RMB7.24 and RMB7.23 for 2019,respectively.

Adjusted basic and diluted earnings per ADS attributable to ordinary shareholders were RMB5.75 (US$0.88),compared with that of RMB6.75 for 2019.

Adjusted net income was RMB4,compared with RMB5,292.4 million last year.

EBITDA was RMB6,892.0 million (US$1,056.3 million),compared with RMB8,014.1 million last year.

Adjusted EBITDA was RMB7,compared with RMB7,635.2million last year.

Net cash provided by operating activities was RMB4,950.7million (US$758.7 million),decreased by 21.5% from RMB6,304.2 million last year.

Business Outlook

Based on the current market conditions and current operations,the Company's parcel volume for 2021 is expected to be in the range of 22.95 billion to 23.80 billion,representing a 35% to 40% increase year over year. 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$0.25 per ADS and share for 2020 to shareholders of record as of the close of business on April 8,2021. For holders of class A ordinary shares,in order to qualify for the dividend,all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar,Computershare Hong Kong Investor Services Limited,at Shops 1712-1716,17th Floor,Hopewell Centre,183 Queen's Road East,Wanchai,Hong Kong no later than 4:30 p.m. on April 8,2021 (Hong Kong Time). The payment date is expected to be April 20,2021 for holders of class A ordinary shares and on April 22,2021 for holders of ADSs.

Company Share Purchase

On November 15,2018,the Company announced a share repurchase program whereby ZTO was 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. On March 13,the board of directors of the Company approved the extension of the active share repurchase program to June 30,2021. The Company expects to fund the repurchases out of its existing cash balance. As of December 31,the Company has purchased an aggregate of 14,491,197 ADSs at an average purchase price of US$22.20,including repurchase commissions.

Initial Public Offering in Hong Kong

On September 29,the Company successfully listed on the Main Board of the Hong Kong Stock Exchange ("HKEX") under the stock code of "2057" with a global offering of 51,750,000 Class A ordinary shares (including the exercise of the over-allotment option on October 22,2020) at the public offering price of HK$218 per share (the "Global Offering"). The Hong Kong-listed shares are fully fungible with the Company's American depositary shares (ADSs) listed on the New York Stock Exchange ("NYSE") (one ADS representing one Class A ordinary share). Gross proceeds from the Global Offering before any underwriting fees and other offering expenses,were HK$11,281.5 million (US$1,455.7 million).

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 RMB6.5250 to US$1.00,the noon buying rate on December 31,2020 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 compare 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 8:30 PM U.S. Eastern Time on Wednesday,March 17,2021 (8:30 AM Beijing Time on March 18,2021).

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

United States:

1-888-317-6003

Hong Kong:

852-5808-1995

Mainland China:

4001-206-115

Singapore:

800-120-5863

International:

1-412-317-6061

Passcode:

1124196

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 24,2021:

United States:

1-877-344-7529

International:

1-412-317-0088

Passcode:

10151906

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 and HKEX:2057) ("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 Section 27A of the Securities Act of 1933,as amended,and Section 21E 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 and fiscal year of 2020,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 2020 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 and personnel,intense competition which could adversely affect the Company's results of operations and market share,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.

UNAUDITED CONSOLIDATED FINANCIAL DATA

Summary of Unaudited Consolidated Comprehensive Income Data:

Three Months Ended Dec 31,

Year Ended Dec 31.

2019

2020

2019

2020

RMB

RMB

US$

RMB

RMB

US$

(in thousands,except for share and per share data)

Revenues

6,516

8,463

22,946

25,259

Cost of revenues

(4,446)

(6,813)

(980,661)

(15,778)

(19,184)

(2,683)

Gross profit

1,996,070

1,858,331

284,802

6,621,168

5,837,106

894,576

Operating income (expenses):

Selling,general and administrative

(392,208)

(417,572)

(63,996)

(1,546,227)

(1,663,712)

(254,975)

Other operating income,net

205,788

125,867

19,290

387,890

580,973

89,038

Total operating expenses

(186,420)

(291,705)

(44,706)

(1,158,337)

(1,082,739)

(165,937)

Income from operations

1,809,650

1,566,626

240,096

5,462,831

4,754,367

728,639

Other income (expenses):

Interest income

148,092

105,559

16,178

585,404

442,697

67,846

Interest expense

—

(12,174)

(1,866)

—

(35,307)

(5,411)

Fair value change at financial instruments

—

(877)

(134)

—

(877)

(134)

(Loss)/gain on disposal of equity investees

and subsidiary

(2,330)

1,086

166

(2,860)

1,086

166

Impairment of investment in equity

investee

(56,026)

—

—

(56,026)

—

—

Unrealized gain from investment in equity

investee

754,468

—

—

754,468

—

—

Foreign currency exchange (loss)/gain,

before tax

(11,549)

(81,873)

(12,548)

13,301

(127,180)

(19,491)

Income before income tax,and share of

gain in equity method investments

2,642,305

1,578,347

241,892

6,757,118

5,034,786

771,615

Income tax expense

(331,337)

(289,605)

(44,384)

(1,078,295)

(689,833)

(105,722)

Share of gain/(loss) in equity method

investments

5,876

2,871

440

(7,556)

(18,507)

(2,836)

Net income

2,316,844

1,291,613

197,948

5,671,267

4,326,446

663,057

Net loss/(income) attributable to

noncontrolling interests

9,578

(3,472)

(532)

2,878

(14,233)

(2,181)

Net income attributable to ZTO Express

(Cayman) Inc.

2,422

1,288,141

197,416

5,674,145

4,312,213

660,876

Net income attributable to ordinary

shareholders

2,876

Net earnings per share attributed to

ordinary shareholders

Basic

2.98

1.55

0.24

7.24

5.42

0.83

Diluted

2.97

1.55

0.24

7.23

5.42

0.83

Weighted average shares used in

calculating net earnings per ordinary

share/ADS

Basic

781,947,464

832,986,610

832,610

784,007,583

796,097,532

796,532

Diluted

782,403,824

832,331,120

796,147,504

796,504

Other comprehensive (expense)/income,

net of tax of nil:

Foreign currency translation adjustment

(325,856)

(597,778)

(91,613)

104,004

(771,291)

(118,205)

Comprehensive income

1,990,988

693,835

106,335

5,775,271

3,555,155

544,852

Comprehensive (income)/loss attributable

to noncontrolling interests

9,181)

Comprehensive income attributable to

ZTO Express (Cayman) Inc.

2,000,566

690,363

105,803

5,778,149

3,540,922

542,671

Unaudited Consolidated Balance Sheets Data:

As of

December 31,2019

December 31,2020

RMB

RMB

US$

(in thousands)

ASSETS

Current assets:

Cash and cash equivalents

5,270,204

14,212,778

2,178,204

Restricted cash

7,210

133,196

20,413

Accounts receivable,net

675,567

746,013

114,331

Financing receivables,net

511,124

492,159

75,427

Short-term investment

11,113,217

3,690,402

565,579

Inventories

43,845

53,070

8,133

Advances to suppliers

438,272

589,042

90,275

Prepayments and other current assets

1,964,506

2,334,688

357,805

Amounts due from related parties

74,312

73,278

11,230

Total current assets

20,098,257

22,324,626

3,421,397

Investments in equity investee

3,494

3,463

494,171

Property and equipment,net

12,470,632

18,565,161

2,845,235

Land use rights,net

2,508,860

4,360,673

668,302

Intangible assets,net

48,029

41,832

6,411

Operating lease right-of-use assets

901,956

876,259

134,293

Goodwill

4,241,541

4,541

650,045

Deferred tax assets

403,587

720,561

110,431

Long-term investment

946,180

1,842,000

282,299

Long-term financing receivables,net

549,775

1,970,340

301,968

Other non-current assets

612,191

537,294

82,344

Amounts due from related parties-non current

—

500,000

76,628

TOTAL ASSETS

45,890,502

59,204,750

9,073,524

LIABILITIES AND EQUITY

Current liabilities

Short-term bank borrowing

—

1,432,929

219,606

Accounts payable

1,475,258

1,635,888

250,711

Notes payable

—

326,200

49,992

Advances from customers

1,210,887

1,119,666

171,596

Income tax payable

80,272

48,628

7,453

Amounts due to related parties

38,943

16,655

2,552

Operating lease liabilities

298,728

246,394

37,762

Acquisition consideration payable

22,942

22,942

3,516

Dividends payable

1,629

11,198

1,716

Other current liabilities

3,552,288

4,487,084

687,676

Total current liabilities

6,680,947

9,347,584

1,580

Non-current operating lease liabilities

504,442

502,481

77,008

Deferred tax liabilities

207,896

254,987

39,078

Other non-current liabilities

93,820

—

—

TOTAL LIABILITIES

7,105

10,105,052

1,548,666

Shareholders' equity

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

803,551,115 shares issued and 781,464 shares outstanding as of December

31,2019; 855,301,115 shares issued and 828,869,972 shares outstanding as of

December 31,2020)

517

553

85

Additional paid-in capital

22,336,594

30,613,948

4,691,793

Treasury shares,at cost

(1,436,767)

(2,870)

(395,229)

Retained earnings

16,726,540

21,038,753

3,330

Accumulated other comprehensive income

675,720

(95,571)

(14,647)

ZTO Express (Cayman) Inc. shareholders' equity

38,302,604

48,978,813

7,506,332

Noncontrolling interests

100,793

120,885

18,526

Total Equity

38,397

49,698

7,524,858

TOTAL LIABILITIES AND EQUITY

45,524

In June 2016,the FASB issued ASU 2016-13,Financial Instruments—Credit Losses (Topic 326),which requires all entities to disclose their current estimate of all expected credit losses. The Group adopted this ASU on January 1,2020 using the modified retrospective transition method and no material adjustment to the opening balance of retained earnings of 2020 was necessary. The adoption of this new ASU has no material impact on its consolidated financial position,results of operations or cashflow.

Summary of Unaudited Consolidated Cash Flow Data:

Three Months Ended December 31,

Year Ended December 31,

2019

2020

2019

2020

RMB

RMB

US$

RMB

RMB

US$

(in thousands)

Net cash provided by operating activities

2,260,406

2,040,259

312,683

6,304,186

4,950,749

758,735

Net cash used in investing

activities

(2,042,872)

(2,916,733)

(447,009)

(3,664,213)

(3,549,341)

(543,960)

Net cash provided by/ (used in) financing

activities

13,218

(628,169)

(96,271)

(1,982,306)

8,337,407

1,277,764

Effect of exchange rate changes on cash,

cash equivalents and restricted cash

(12,890)

(566,354)

(86,798)

(3,207)

(656,137)

(100,558)

Net increase / (decrease) in cash,cash

equivalents and restricted cash

217,862

(2,070,997)

(317,395)

654,460

9,678

1,391,981

Cash,cash equivalents and restricted cash

at beginning of period

5,059,552

16,431,089

2,518,175

4,622,954

5,414

808,799

Cash,cash equivalents and restricted cash

at end of period

5,414

14,092

2,200,780

5,780

The following table provides a reconciliation of cash,cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows:

As of

December 31,2019

December 31,2020

RMB

RMB

US$

(in thousands)

Cash and cash equivalents

5,204

Restricted cash,current

7,413

Restricted cash,non-current

—

14,118

2,163

Total cash,cash equivalents and restricted cash

5,780

Reconciliations of GAAP and Non-GAAP Results

Three Months Ended Dec 31,

Year Ended Dec 31,

2019

2020

2019

2020

RMB

RMB

US$

RMB

RMB

US$

(in thousands,except for share and per share data)

Net income

2,057

Add:

Share-based compensation expense(1)

10,800

—

—

316,666

264,154

40,483

Impairment of investment in equity

investee(1)

56,026

—

—

56,026

—

—

Loss/(gain) on disposal of equity investees

and subsidiary(1)

2,330

(1,086)

(166)

2,860

(1,086)

(166)

Less:

Unrealized gain from investment in equity

investee(1)

(754,468)

—

—

(754,468)

—

—

Adjusted net income

1,631,532

1,290,527

197,782

5,292,351

4,589,514

703,374

Net income

2,057

Add:

Depreciation

366,459

503,814

77,213

1,040

1,758,638

269,523

Amortization

14,606

23,184

3,553

54,526

81,824

12,540

Interest expenses

—

12,174

1,866

—

35,307

5,411

Income tax expenses

331,337

289,605

44,384

1,295

689,833

105,722

EBITDA

3,029,246

2,120,390

324,964

8,014,128

6,892,048

1,056,253

Add:

Share-based compensation expense

10,483

Impairment of investment in equity

investee

56,026

—

—

Loss/(gain) on disposal of equity investees

and subsidiary,before income taxes

2,086)

(166)

Less:

Unrealized gain from investment in equity

investee

(754,468)

—

—

Adjusted EBITDA

2,343,934

2,304

324,798

7,212

7,155,116

1,096,570

(1)Net of income taxes of nil

Reconciliations of GAAP and Non-GAAP Results

Three Months Ended Dec 31,except for share and per share data)

Net income attributable to ordinary

shareholders

2,876

Add:

Share-based compensation expense(1)

10,483

Impairment of investment in equity(1)

56,468)

—

—

Adjusted Net income attributable to

ordinary shareholders

1,641,110

1,287,055

197,250

5,295,229

4,575,281

701,193

Weighted average shares used in

calculating net earnings per ordinary

share/ADS

Basic

781,504

Net earnings per share/ADS attributable

to ordinary shareholders

Basic

2.98

1.55

0.24

7.24

5.42

0.83

Diluted

2.97

1.55

0.24

7.23

5.42

0.83

Adjusted net earnings per share/ADS

attributable to ordinary shareholders

Basic

2.10

1.55

0.24

6.75

5.75

0.88

Diluted

2.10

1.55

0.24

6.75

5.75

0.88

(1)Net of income taxes of nil

For investor and media inquiries,please contact:

ZTO Express (Cayman) Inc.

Investor Relations

E-mail: ir@zto.com

Phone: +86 21 5980 4508