Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Document Information [Line Items] | |
Entity Registrant Name | ZTO Express (Cayman) Inc. |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Central Index Key | 0001677250 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2020 |
Entity File Number | 001-37922 |
Entity Address, Address Line One | Building One, No. 1685 Huazhi Road, |
Entity Address, Address Line Two | Qingpu District |
Entity Address, City or Town | Shanghai |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 201708 |
Entity Incorporation, State or Country Code | E9 |
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 Interactive Data Current | Yes |
Entity Emerging Growth Company | false |
Entity Filer Category | Large Accelerated Filer |
Entity Shell Company | false |
Document Accounting Standard | U.S. GAAP |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
ICFR Auditor Attestation Flag | true |
Class A ordinary shares | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A ordinary shares, par value US$0.0001 per share |
No Trading Symbol Flag | true |
Entity Common Stock, Shares Outstanding | 622,769,972 |
Class B ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 206,100,000 |
ADR | |
Document Information [Line Items] | |
Title of 12(b) Security | American depositary shares, each representing one Class A ordinary share |
Trading Symbol | ZTO |
Security Exchange Name | NYSE |
Ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 828,869,972 |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | Building One, No. 1685 Huazhi Road |
Entity Address, Address Line Two | Qingpu District |
Entity Address, City or Town | Shanghai |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 201708 |
Contact Personnel Name | Huiping Yan |
City Area Code | 86 21 |
Local Phone Number | 5980 4508 |
Contact Personnel Email Address | hp.yan@zto.com |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 14,212,778 | $ 2,178,204 | ¥ 5,270,204 |
Restricted cash | 133,196 | 20,413 | 7,210 |
Accounts receivable, net | 746,013 | 114,331 | 675,567 |
Financing receivables, net | 492,159 | 75,427 | 511,124 |
Short-term investment | 3,690,402 | 565,579 | 11,113,217 |
Inventories | 53,070 | 8,133 | 43,845 |
Advances to suppliers | 589,042 | 90,275 | 438,272 |
Prepayments and other current assets | 2,334,688 | 357,805 | 1,964,506 |
Amounts due from related parties | 73,278 | 11,230 | 74,312 |
Total current assets | 22,324,626 | 3,421,397 | 20,098,257 |
Investments in equity investees | 3,224,463 | 494,171 | 3,109,494 |
Property and equipment, net | 18,565,161 | 2,845,235 | 12,470,632 |
Land use rights, net | 4,360,673 | 668,302 | 2,508,860 |
Intangible assets, net | 41,832 | 6,411 | 48,029 |
Operating lease right-of-use assets | 876,259 | 134,293 | 901,956 |
Goodwill | 4,241,541 | 650,045 | 4,241,541 |
Deferred tax assets | 720,561 | 110,431 | 403,587 |
Long-term investments | 1,842,000 | 282,299 | 946,180 |
Long-term financing receivables, net | 1,970,340 | 301,968 | 549,775 |
Other non-current assets | 537,294 | 82,344 | 612,191 |
Amounts due from related parties-non current | 500,000 | 76,628 | |
TOTAL ASSETS | 59,204,750 | 9,073,524 | 45,890,502 |
Current liabilities (including amounts of the consolidated VIE without recourse to ZTO Express (Cayman) Inc. See Note 2(b)) | |||
Short-term bank borrowings | 1,432,929 | 219,606 | |
Accounts payable | 1,635,888 | 250,711 | 1,475,258 |
Notes payable | 326,200 | 49,992 | |
Advances from customers | 1,119,666 | 171,596 | 1,210,887 |
Income tax payable | 48,628 | 7,453 | 80,272 |
Amounts due to related parties | 16,655 | 2,552 | 38,943 |
Operating lease liabilities, current | 246,394 | 37,762 | 298,728 |
Acquisition consideration payable | 22,942 | 3,516 | 22,942 |
Dividends payable | 11,198 | 1,716 | 1,629 |
Other current liabilities | 4,487,084 | 687,676 | 3,552,288 |
Total current liabilities | 9,347,584 | 1,432,580 | 6,680,947 |
Non- current operating lease liabilities | 502,481 | 77,008 | 504,442 |
Deferred tax liabilities | 254,987 | 39,078 | 207,896 |
Other non-current liabilities | 93,820 | ||
TOTAL LIABILITIES | 10,105,052 | 1,548,666 | 7,487,105 |
Commitments and contingencies (Note 18) | |||
Shareholders' equity | |||
Ordinary shares ( US$0.0001 par value; 10,000,000,000 shares authorized; 803,551,115 shares issued and 781,947,464 shares outstanding as of December 31, 2019; 855,301,115 shares issued and 828,869,972 shares outstanding as of December 31, 2020) | 553 | 85 | 517 |
Additional paid-in capital | 30,613,948 | 4,691,793 | 22,336,594 |
Treasury shares, at cost | (2,578,870) | (395,229) | (1,436,767) |
Retained earnings | 21,038,753 | 3,224,330 | 16,726,540 |
Accumulated other comprehensive income (loss) | (95,571) | (14,647) | 675,720 |
ZTO Express (Cayman) Inc. shareholders' equity | 48,978,813 | 7,506,332 | 38,302,604 |
Noncontrolling interests | 120,885 | 18,526 | 100,793 |
Total Equity | 49,099,698 | 7,524,858 | 38,403,397 |
TOTAL LIABILITIES AND EQUITY | ¥ 59,204,750 | $ 9,073,524 | ¥ 45,890,502 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares | Dec. 31, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Ordinary shares, share authorized | 10,000,000,000 | 10,000,000,000 |
Ordinary shares, shares issued | 855,301,115 | 803,551,115 |
Ordinary shares, shares outstanding | 828,869,972 | 781,947,464 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Revenues (including related party revenue of nil, RMB36,366 and RMB49,358 for the years ended December 31, 2018, 2019 and 2020, respectively) | ¥ 25,214,290 | $ 3,864,259 | ¥ 22,109,946 | ¥ 17,604,451 |
Cost of revenues (including related party cost of revenues of RMB677,831, RMB755,445 and RMB576,081 for the years ended December 31, 2018, 2019 and 2020, respectively) | (19,377,184) | (2,969,683) | (15,488,778) | (12,239,568) |
Gross profit | 5,837,106 | 894,576 | 6,621,168 | 5,364,883 |
Operating (expenses)/income | ||||
Selling, general and administrative | (1,663,712) | (254,975) | (1,546,227) | (1,210,717) |
Other operating income, net | (580,973) | (89,038) | (387,890) | (178,057) |
Total operating expenses | (1,082,739) | (165,937) | (1,158,337) | (1,032,660) |
Income from operations | 4,754,367 | 728,639 | 5,462,831 | 4,332,223 |
Other income/(expenses) | ||||
Interest income | 442,697 | 67,846 | 585,404 | 401,162 |
Interest expense | 35,307 | 5,411 | 780 | |
Loss from fair value changes of financial instruments | (877) | (134) | ||
Gain/(loss) on disposal of equity investees and subsidiary | 1,086 | 166 | (2,860) | 562,637 |
Impairment of investment in equity investees | ¥ | 0 | (56,026) | 0 | |
Unrealized gain from investment in equity investee | ¥ | 754,468 | |||
Foreign currency exchange gain/(loss) | (127,180) | (19,491) | 13,301 | 41,189 |
Income before income tax and share of loss in equity method investments | 5,034,786 | 771,615 | 6,757,118 | 5,336,431 |
Income tax expense | (689,833) | (105,722) | (1,078,295) | (929,133) |
Share of loss in equity method investments | (18,507) | (2,836) | (7,556) | (19,386) |
Net income | 4,326,446 | 663,057 | 5,671,267 | 4,387,912 |
Net (income)/loss attributable to noncontrolling interests | (14,233) | (2,181) | 2,878 | (4,887) |
Net income attributable to ZTO Express (Cayman) Inc. | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 |
Net income attributable to ordinary shareholders | ¥ 4,312,213 | $ 660,876 | ¥ 5,674,145 | ¥ 4,383,025 |
Net earnings per share attributable to ordinary shareholders | ||||
Basic | (per share) | ¥ 5.42 | $ 0.83 | ¥ 7.24 | ¥ 5.83 |
Diluted | (per share) | ¥ 5.42 | $ 0.83 | ¥ 7.23 | ¥ 5.82 |
Weighted average shares used in calculating net earnings per ordinary share | ||||
Basic | shares | 796,097,532 | 796,097,532 | 784,007,583 | 751,814,077 |
Diluted | shares | 796,147,504 | 796,147,504 | 784,331,120 | 752,672,956 |
Other comprehensive income (loss), net of tax of nil | ||||
Foreign currency translation adjustment | ¥ (771,291) | $ (118,205) | ¥ 104,004 | ¥ 867,612 |
Comprehensive income | 3,555,155 | 544,852 | 5,775,271 | 5,255,524 |
Comprehensive (income)/loss attributable to non-controlling interests | (14,233) | (2,181) | 2,878 | (4,887) |
Comprehensive income attributable to ZTO Express (Cayman) Inc. | ¥ 3,540,922 | $ 542,671 | ¥ 5,778,149 | ¥ 5,250,637 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Related party revenue | ¥ 49,358 | ¥ 36,366 | ¥ 0 |
Related party cost of revenue | 576,081 | 755,445 | 677,831 |
Other comprehensive income/(loss), tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY ¥ in Thousands, $ in Thousands | Parent CompanyCNY (¥) | Ordinary sharesCNY (¥)shares | Additional paid-in capitalCNY (¥) | Treasury shares, at costCNY (¥) | Retained earningsCNY (¥) | Accumulated other comprehensive income/(loss)CNY (¥) | Noncontrolling interestsCNY (¥) | CNY (¥) | USD ($) |
Balance at beginning 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 | |
Balance, beginning of the period (in shares) at Dec. 31, 2017 | shares | 710,804,716 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 4,383,025 | 4,383,025 | 4,887 | 4,387,912 | |||||
Foreign currency translation adjustments | 867,612 | 867,612 | 867,612 | ||||||
Share based compensation and ordinary shares issued for share based compensation | 249,478 | 142,940 | 106,538 | 249,478 | |||||
Share based compensation and ordinary shares issued for share based compensation (in shares) | shares | 2,363,519 | ||||||||
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 | 34,269,549 | |
Shares outstanding, end of the period at Dec. 31, 2018 | shares | 785,463,859 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 5,674,145 | 5,674,145 | (2,878) | 5,671,267 | |||||
Foreign currency translation adjustments | 104,004 | 104,004 | 104,004 | ||||||
Share based compensation and ordinary shares issued for share based compensation | 316,666 | 190,065 | 126,601 | 316,666 | |||||
Share based compensation and ordinary shares issued for share based compensation (in shares) | shares | 2,500,041 | ||||||||
Repurchase of ordinary shares | (738,746) | (738,746) | (738,746) | ||||||
Repurchase of ordinary shares (in shares) | shares | (6,016,436) | ||||||||
Capital contribution from noncontrolling interest shareholder | 51,360 | 51,360 | |||||||
Distribution of dividends | (1,270,703) | (1,270,703) | (1,270,703) | ||||||
Cancellation of ordinary shares | ¥ (6) | (720,449) | 720,455 | ||||||
Balance at ending of the period at Dec. 31, 2019 | 38,302,604 | ¥ 517 | 22,336,594 | (1,436,767) | 16,726,540 | 675,720 | 100,793 | 38,403,397 | |
Shares outstanding, end of the period at Dec. 31, 2019 | shares | 781,947,464 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income (loss) | 4,312,213 | 4,312,213 | 14,233 | 4,326,446 | $ 663,057 | ||||
Foreign currency translation adjustments | (771,291) | (771,291) | (771,291) | (118,205) | |||||
Acquisition of noncontrolling interests of subsidiaries | (17,129) | (17,129) | (11,179) | (28,308) | |||||
Share based compensation and ordinary shares issued for share based compensation | 264,154 | 177,916 | 86,238 | 264,154 | |||||
Share based compensation and ordinary shares issued for share based compensation (in shares) | shares | 1,947,269 | ||||||||
Repurchase of ordinary shares | (1,228,341) | (1,228,341) | (1,228,341) | ||||||
Repurchase of ordinary shares (in shares) | shares | (6,774,761) | ||||||||
Capital contribution from noncontrolling interest shareholder | 807 | 807 | 17,038 | 17,845 | |||||
Distribution of dividends | (1,648,037) | (1,648,037) | (1,648,037) | ||||||
Issuance of ordinary shares | 9,763,833 | ¥ 36 | 9,763,797 | 9,763,833 | |||||
Issuance of ordinary shares (in shares) | shares | 51,750,000 | ||||||||
Balance at ending of the period at Dec. 31, 2020 | ¥ 48,978,813 | ¥ 553 | ¥ 30,613,948 | ¥ (2,578,870) | ¥ 21,038,753 | ¥ (95,571) | ¥ 120,885 | ¥ 49,099,698 | $ 7,524,858 |
Shares outstanding, end of the period at Dec. 31, 2020 | shares | 828,869,972 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Operating activities | ||||
Net income | ¥ 4,326,446 | $ 663,057 | ¥ 5,671,267 | ¥ 4,387,912 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Share-based compensation | 264,154 | 40,483 | 316,666 | 249,478 |
Depreciation and amortization | 1,840,462 | 282,063 | 1,264,566 | 853,718 |
Loss on disposal of property and equipment | 9,369 | 1,436 | 16,159 | 29,226 |
Allowance for doubtful accounts | 30,281 | 4,641 | 24,293 | 9,326 |
Deferred income tax | (271,969) | (41,681) | (40,527) | (139,081) |
(Gain)/loss on disposal of equity investees and subsidiary | (1,086) | (166) | 2,860 | (562,637) |
Unrealized gain from investment in equity investee | (754,468) | |||
Impairment of equity investees | 0 | 56,026 | 0 | |
Share of loss in equity method investments | 18,507 | 2,836 | 7,556 | 19,386 |
Loss of fair value changes of financial instruments | 877 | 134 | ||
Foreign currency exchange loss | 127,180 | 19,491 | (13,301) | (41,189) |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (79,831) | (12,235) | (84,468) | (309,431) |
Financing receivables | 22,019 | 3,375 | 1,839 | (458,092) |
Inventories | (9,225) | (1,414) | (32) | (9,582) |
Advances to suppliers | (150,499) | (23,065) | (129,364) | (114,616) |
Prepayments and other current assets | (369,443) | (56,620) | (545,079) | (764,223) |
Amounts due from related parties | (8,966) | (1,374) | (67,712) | |
Operating lease right-of-use assets | 25,697 | 3,938 | (57,625) | |
Long-term financial receivable | (1,393,855) | (213,618) | (549,775) | |
Other non-current assets | 28,694 | 4,398 | (12,325) | (2,094) |
Accounts payable | 160,630 | 24,618 | 156,056 | 422,668 |
Advances from customers | (91,221) | (13,980) | 774,177 | 177,745 |
Amounts due to related parties | (22,288) | (3,416) | (93,273) | 17,303 |
Income tax payable | (29,558) | (4,530) | (303,500) | 175,012 |
Operating lease liabilities | (54,295) | (8,321) | 35,476 | |
Other current liabilities | 669,546 | 102,613 | 629,841 | 412,802 |
Other non-current liabilities | (90,877) | (13,928) | (14,448) | 9,231 |
Net cash provided by operating activities | 4,950,749 | 758,735 | 6,304,186 | 4,404,051 |
Cash flows from investing activities | ||||
Purchases of property and equipment | (7,237,302) | (1,109,166) | (4,635,685) | (3,323,822) |
Purchases of land use rights | (1,970,650) | (302,015) | (590,733) | (657,454) |
Cash paid for business acquisitions, net of cash received | (19,581) | (110,423) | ||
Investments in equity investees | (238,415) | (36,539) | (218,260) | (1,865,309) |
Purchases of short-term investments | (9,686,732) | (1,484,557) | (14,061,179) | (13,634,396) |
Maturity of short-term investments | 17,010,363 | 2,606,952 | 16,699,480 | 5,834,805 |
Purchase of long-term investments | (939,500) | (143,985) | (957,870) | |
Net cash received from disposal of equity investees and subsidiary | 6,311 | 967 | 1,350 | 797,850 |
Loan to related parties | (500,000) | (76,628) | ||
Cash received from disposal of land use rights | 71,723 | |||
Others | 6,584 | 1,011 | 118,265 | 14,393 |
Net cash used in investing activities | (3,549,341) | (543,960) | (3,664,213) | (12,872,633) |
Cash flows from financing activities | ||||
Proceeds from issuance of ordinary shares, net of issuance cost paid of RMB 69,498 | 9,771,782 | 1,497,591 | 8,891,909 | |
Proceeds from capital contribution from noncontrolling interest shareholder | 17,845 | 2,735 | 51,360 | 65,160 |
Proceeds from short-term borrowings | 2,302,929 | 352,939 | ||
Repayment of short-term borrowings | (870,000) | (133,333) | (250,000) | |
Repurchase of ordinary shares | (1,228,341) | (188,251) | (762,893) | (769,811) |
Payment of dividends | (1,649,308) | (252,767) | (1,270,773) | (895,136) |
Acquisition of noncontrolling interests of subsidiaries | (7,500) | (1,150) | ||
Net cash provided by/used in financing activities | 8,337,407 | 1,277,764 | (1,982,306) | 7,042,122 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (656,137) | (100,558) | (3,207) | 275,680 |
Net change in cash, cash equivalents and restricted cash | 9,082,678 | 1,391,981 | 654,460 | (1,150,780) |
Cash, cash equivalents and restricted cash at beginning of year | 5,277,414 | 808,799 | 4,622,954 | 5,773,734 |
Cash, cash equivalents and restricted cash at end of year | ¥ 14,360,092 | $ 2,200,780 | ¥ 5,277,414 | ¥ 4,622,954 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - Reconciliation of Cash, Cash Equivalents and Restricted Cash ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) |
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 | ¥ 14,212,778 | $ 2,178,204 |
Restricted cash | 133,196 | 20,413 |
Restricted cash, non-current (1) | 14,118 | 2,163 |
Total cash, cash equivalents, equivalents, and restricted cash shown in the statement of cash flows | ¥ 14,360,092 | $ 2,200,780 |
CONSOLIDATED STATEMENTS OF CA_3
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Issuance cost paid net | ¥ 69,498 | |||
Supplemental disclosure of cash flow information | ||||
Income taxes paid | 991,360 | $ 151,933 | ¥ 1,422,322 | ¥ 893,202 |
Interest expense paid | 34,617 | $ 5,305 | 780 | |
Supplemental disclosure on non-cash investing and financing activities: | ||||
Payables for repurchasing the ordinary shares | 0 | 0 | 24,146 | |
Payable for dividends | 11,198 | 1,629 | 1,699 | |
Payables for purchase of property and equipment | ¥ 1,645,893 | ¥ 1,076,935 | ¥ 973,620 |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2020 | |
Organization and Principal Activities | |
Organization and Principal Activities | 1. Organization and Principal Activities ZTO Express (Cayman) Inc. (“ZTO”) was incorporated under the laws of Cayman Islands on April 8, 2015. ZTO, its subsidiaries and its variable interest entity and subsidiaries of variable interest entity (“VIE”) (collectively also referred to as the “Company”) 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, 2020 | |
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 (“U.S. 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 Company evaluates the need to consolidate its VIE of which the Company is the primary beneficiary. In determining whether the Company is the primary beneficiary, the Company considers if the Company (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 Company consolidates the VIE. Consolidation of Variable Interest Entity 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 Company 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. (“WFOE”) 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 Agreements & Irrevocable Powers of Attorney Under which each shareholder of ZTO Express has executed a power of attorney to grant WFOE 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 agreements will remain in effect unless WFOE terminates the agreements by giving a prior written notice or giving its consent to the termination by ZTO Express. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) Exclusive Call Option Agreements Under which the shareholders of ZTO Express granted WFOE 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. WFOE or its designated representative(s) has sole discretion as to when to exercise such options, either in part or in full. Without WFOE’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 agreements can be early terminated by WFOE, but not by ZTO Express or its shareholders. Equity Pledge Agreements Under which the shareholders of ZTO Express pledged all of their equity interests in ZTO Express to WFOE as collateral to secure their obligations under the VIE contractual arrangements. If the shareholders of ZTO Express or ZTO Express breach their respective contractual obligations, WFOE, as pledgee, will be entitled to certain rights, including the right to dispose the pledged equity interests. Pursuant to the agreements, 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 WFOE. The equity pledge agreements will remain effective until ZTO Express and its shareholders have completed all of their obligations under the VIE contractual arrangements or discharged all of their obligations under the contractual arrangements. The agreement that transfer economic benefits to the Company is: Exclusive Consulting and Services Agreement Under which ZTO Express engages WFOE as its exclusive technical and operational consultant and under which WFOE 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 WFOE. The agreements will be effective as long as ZTO Express exists. WFOE 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 WFOE the power to exercise all voting rights to which they were entitled. In addition, WFOE 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, WFOE is entitled to receive service fees for services provided to ZTO Express. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) The Call Option Agreements and Voting Rights Proxy Agreements provide the Company with effective control over the VIE, while the Equity Interest Pledge Agreements secure the obligations of the shareholders of ZTO Express under the relevant agreements. Because the Company, through WFOE, 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 Company 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 Company’s operation through any transactions between the Company’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 Company 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 Company’s ability to consolidate, derive economic interests from, or exert effective control over its variable interest entity, or ● restricting or prohibiting the Company’s use of the proceeds of its initial public offering to finance its business and operations in China. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) The amounts and balances of ZTO Express and its subsidiaries (the “VIE”) after the elimination of intercompany balances and transactions within the VIE are presented in the following table: As of December 31, 2019 2020 RMB RMB Assets Current assets: Cash and cash equivalents 528,722 776,725 Accounts receivable, net 635,606 514,666 Financing receivables, net 172,267 341,486 Inventories 42,134 42,775 Advances to suppliers 46,534 45,621 Prepayments and other current assets 1,241,975 1,153,077 Amounts due from related parties 18,364 34,034 Total current assets 2,685,602 2,908,384 Investments in equity investees 114,447 110,570 Property and equipment, net 5,920,211 6,025,153 Land use rights, net 1,150,849 1,138,849 Operating lease right-of-use assets 853,092 834,984 Goodwill 4,157,111 4,157,111 Deferred tax assets 234,080 514,532 Long-term financing receivables, net 536,473 1,784,990 Other non-current assets 120,877 99,456 TOTAL ASSETS 15,772,742 17,574,029 Liabilities Current liabilities: Short-term bank borrowings — 1,432,929 Accounts payable 1,448,490 1,155,069 Notes payable — 158,138 Advances from customers 1,185,920 1,068,927 Income tax payable 9,359 250,726 Amounts due to related parties 769,951 620,490 Operating lease liabilities, current 273,524 234,071 Other current liabilities 2,536,131 2,594,801 Total current liabilities 6,223,375 7,515,151 Non-current operating lease liabilities 478,327 468,127 Deferred tax liabilities 123,173 127,816 TOTAL LIABILITIES 6,824,875 8,111,094 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) Year ended December 31, 2018 2019 2020 RMB RMB RMB Total revenue 17,127,930 21,465,515 23,734,103 Net income 720,323 841,707 478,168 Net cash generated from (used in) operating activities 436,074 1,783,718 (537,756) Net cash used in investing activities (777,197) (1,831,001) (647,170) Net cash provided by (used in) financing activities (206,260) — 1,432,929 Net increase (decrease) in cash and cash equivalents (547,383) (47,283) 248,003 Cash and cash equivalents and restricted cash at beginning of year 1,123,388 576,005 528,722 Cash and cash equivalents and restricted cash at end of year 576,005 528,722 776,725 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. The inter-company transportation fees and service fees charged by WFOE were RMB7,776,622, RMB9,420,012 and RMB11,519,214 for the years ended December 31, 2018, 2019 and 2020, respectively. The amount due to WFOE were RMB731,008 and RMB603,835 as of December 31, 2019 and 2020, respectively. The inter-company operating cash outflow were RMB7,593,448, RMB9,248,582 and RMB11,646,387 for the years ended December 31, 2018, 2019 and 2020, respectively. These inter-company transactions and balances were eliminated in the consolidated financial statements. After all intercompany transactions eliminations, the VIE contributed 97.3%, 97.1% and 94.1% of the Company's consolidated revenues for the years ended December 31, 2018, 2019 and 2020, respectively. As of December 31, 2019 and 2020, the VIE accounted for an aggregate of 34.4% and 29.7%, respectively, of the consolidated assets, and 81.4% and 74.3%, respectively, of the consolidated liabilities. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the VIE. However, if the VIE was ever to need financial support, the Company 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 Company 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 22 for disclosure of restricted net assets. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Nonconsolidated Variable Interest Entity Tonglu Tongze Logistics Ltd. and its subsidiaries (“Tonglu”), established in 2013, are transportation service companies providing line-haul transportation services to the Company. Tonglu is majority owned by the employees of the Company who are considered as related parties to the Company. The variable interests in Tonglu held by the Company are in the form of a waiver of management fees. The Company 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 Company had amounts due to Tonglu as of December 31, 2019 and amounts due from Tonglu as of December 31, 2020 for transportation service provided or to be provided by Tonglu, pursuant to the contractual terms that are considered 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 U.S. 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 Company bases its estimates on historical experience and other relevant factors. Significant accounting estimates reflected in the Company's financial statements include assumptions used to determine the fair value of the assets acquired through business combination, allowance of credit losses, useful lives of long-lived assets, realization of deferred tax assets, impairment of long-lived assets and goodwill, and valuation of investments in equity investees. Actual results may differ from those estimates. 2. Summary of Significant Accounting Policies (Continued) (d) Foreign currency translation The Company's reporting currency is Renminbi (“RMB”). The functional currency of the Company and subsidiaries incorporated outside the mainland China is the United States dollar (“US dollar” or “US$”) or Hong Kong dollar (“HKD”). 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. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. 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 Company 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. (e) Convenience translation The Company’s business is primarily conducted in PRC and almost all of the Company’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 outside PRC. 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, 2020 were calculated at the rate of US$1.00=RMB6.5250, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2020. No representation was made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2020, or at any other rate. (f) 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. (g) Restricted cash Restricted cash represents secured deposits held in designated bank accounts for issuance of bank acceptance notes, settlement of derivatives and commencement of construction. 2. Summary of Significant Accounting Policies (Continued) (h) Accounts receivable, net Accounts receivable mainly consists of amount due from the Company's customers, which is recorded net of allowance for credit losses. On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326") using the modified retrospective transition method. ASC 326 replaces the existing incurred loss impairment model with a forward-looking current expected credit loss ("CECL") methodology, which results in more timely recognition of credit losses. The Company has developed a CECL model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The cumulative effect from the adoption as of January 1, 2020 was immaterial to the consolidated financial statements. (i) Short-term and long-term investment Short-term investment primarily comprises of dual currency notes/deposits ("DCN/DCD"), time deposits with maturities between three months and one year, and investments in wealth management products with variable interest rates and principal not-guaranteed with certain financial institutions. Long-term investment comprises of time deposits and investments in wealth management products with maturities more than one year. The Company has the intent and the ability to hold such time deposits and wealth management products to maturity. DCN/DCD purchased by the Company in 2020 is a structured product with unsecured principal purchased from financial institutions which have original maturities less than one year with a written foreign exchange option embedded. The Company’s intention for holding DCN/DCD is to obtain interest and manage foreign currency risks. The Company elects to adopt the fair value option in accordance with ASC 815 Financial Instruments to record the entire hybrid instruments at fair value in short-term investments in the consolidated balance sheets. The fair values of DCN/DCD are measured based on market-based redemption prices which are level 2 inputs provided by the selling bank. Changes in the fair value of the investments are recorded as gain or loss from fair value changes of financial instruments in the consolidated statements of comprehensive income. The Company classifies the short-term investment and long-term investment in wealth management products as held-to-maturity securities and stated at amortized cost. As of December 31, 2020, RMB334,000 of long-term investment was used as a collateral to issue of bank acceptance draft. 2. Summary of Significant Accounting Policies (Continued) (i) Short-term and long-term investment (Continued) Upon adoption of ASC 326, the Company changed its impairment analysis to utilize a forward-looking CECL model for financial instruments measured at amortized cost, including the short-term investment in wealth management products. Based upon the Company's assessment of various factors, including historical experience, credit quality of the related financial institutions, and other factors that may affect its ability to collect the short-term investment, the Company determined there was no cumulative effect from the adoption of ASC 326 as of January 1, 2020 and year ended December 31, 2020, no credit losses from the short-term investment were expected. The Company recorded interest income of RMB307,084, RMB432,566 and RMB329,812 from time deposits and wealth management products, and loss in fair value change from DCN/DCD of nil, nil and RMB2,948 in the consolidated statements of comprehensive income for the years ended December 31, 2018, 2019 and 2020, respectively. (j) Foreign exchange options and forward contracts The Company entered into certain foreign exchange options and forward contracts in 2020 to protect against volatility of future cash flows caused by the changes in foreign exchange rates. The foreign exchange options and forward contracts are accounted for as derivatives and measured at fair value at each period end. The fair values of foreign exchange options and forward contracts are measured based on market-based redemption prices which are level 2 inputs provided by the bank that sells such foreign exchange options and forward contracts. The changes in fair value are recognized as gain or loss in the consolidated statements of comprehensive income. Depending on the terms of the specific derivative instruments and market conditions, the Company’s derivative instruments may be reflected as assets or liabilities at any particular point in time and recorded within prepayments and other current assets or other current liabilities, respectively on the consolidated balance sheets. The Company recorded a net gain from fair value changes of RMB2,071 related to foreign exchange options and forward contracts in the consolidated statements of comprehensive income for the year ended December 31, 2020. (k) 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 Company 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. 2. Summary of Significant Accounting Policies (Continued) (k) Fair value (Continued) 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 short-term financial instruments, which consist of cash and cash equivalents, restricted cash, accounts receivable, financing receivable, time deposits and wealth management products recorded in short-term investments, amounts due from related parties, other current assets, accounts payable, amounts due to related parties, short-term bank borrowings, notes payable and other current liabilities, except for the derivative instruments measured at fair value and presented in the following table, are recorded at costs which approximate their fair values due to the short-term nature of these financial instruments. The carrying values of non-current restricted cash, long-term financing receivables and long-term investment which are time deposits, approximate their fair values as their interest rates are comparable to the prevailing interest rates in the market. The Company measures at fair value its financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As of December 31, 2020, DCN/DCD and derivative instruments are measured and recorded at fair value initially and on a recurring basis in periods subsequent to their initial recognition and are as follows: Fair Value Measurement As of December 31, 2020 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total RMB RMB RMB RMB Short-term investments DCN/DCD — 1,693,843 — 1,693,843 Derivative assets recorded within prepayments and other current assets Foreign exchange forward contracts — 1,855 — 1,855 Derivative liabilities recorded within other current liabilities Foreign exchange option contracts — 317 — 317 2. Summary of Significant Accounting Policies (Continued) (k) Fair value (Continued) The Company measures 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 future performance projections, discount rate and other assumptions that are significant to the measurements of fair value. An impairment charge to these investments is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. During the years ended December 31, 2018, 2019 and 2020, no impairment of equity method investments was recorded. Beginning January 1, 2018, the Company's equity investments without readily determinable fair values, which do not qualify for NAV practical expedient and over which the Company does not have the ability to exercise significant influence through the investments in common stock or in substance common stock, are accounted for under the measurement alternative upon the adoption of Accounting Standards Update ("ASU") 2016-01 "Recognition and Measurement of Financial Assets and Liabilities" (the "Measurement Alternative"). Under the Measurement Alternative, the carrying value is measured at cost, less any impairment, plus and minus changes resulting from observable price changes in orderly transactions for identical or similar investments. The Company recognized an unrealized gain of RMB 754,468 related to the investee of Cai Niao Smart Logistics Network Limited as a result of an observable price change event for the year ended December 31, 2019. The Company recognized impairment losses of nil, RMB56,026 and nil related to equity investments without readily determinable fair values for the years ended December 31, 2018, 2019 and 2020, respectively (Note 8). Certain non-financial assets are measured at fair value on a nonrecurring basis, including property, plant, and equipment, right-of-use assets, 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, discount rate, and other significant assumptions to the discounted cash flow valuation methodology. 2. Summary of Significant Accounting Policies (Continued) (l) Financing receivables, net The Company provides financial services to its network partners with credit terms generally ranging from three months to three years . Total outstanding financing receivables as of December 31, 2019 and 2020 were RMB1,060,899, and RMB2,462,499 respectively, among which RMB549,775 and RMB1,970,340 were recorded in long-term financing receivables. Such amounts are measured at amortized cost and reported in the consolidated balance sheets at the outstanding principal amount less allowance of credit losses . The accrued interest receivables are also included in financing receivables as of the balance sheet date. Allowance relating to financing receivables represents the Company's best estimate of the losses inherent in the outstanding portfolio of financing receivables. RMB4,139 and RMB9,159 of allowance relating to short-term financing receivables, and nil and RMB14,097 relating to long-term financing receivables were recorded as of December 31, 2018 and 2019, respectively. The related losses recorded in the Consolidated Statements of Comprehensive Income were RMB4,139 and RMB19,117 for the years ended December 31, 2018 and 2019, respectively. After the adoption of ASC 326 on January 1, 2020 using the modified retrospective transition method, the Company has developed a forward looking CECL model based on the conditions of collaterals and guarantees for financing receivables, historical experiences, credit quality of the borrowers, current economic conditions and the borrowers' operating results, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the borrowers. The cumulative effect from the adoption as of January 1, 2020 was immaterial to the consolidated financial statements. RMB7,104 of allowance of credit losses relating to short-term financing receivables, and RMB36,786 relating to long-term financing receivables were recorded as of December 31, 2020. The expected credit loss recognized was RMB20,635 for the year ended December 31, 2020. Interest income generated from the financing receivables was recorded as revenue in the amounts of RMB24,917, RMB70,228, and RMB125,963 for the years ended December 31, 2018, 2019 and 2020, respectively. (m) 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 5-10 years Buildings 20 years (n) 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. The useful life of customer relationship was estimated to be 10 years based on the nature of the customer base and average attrition rate. 2. Summary of Significant Accounting Policies (Continued) (o) Investments in equity investees Investments in equity investees of the Company are comprised of investments in privately-held companies. The Company 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 Company records equity method adjustments in share of profits and losses. Equity method adjustments include the Company’s proportionate share of investee income or loss, 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 Company’s cumulative equity in earnings of the investee are considered as a return on investment and classified as cash inflows from operating activities. Cumulative dist |
Prepayments and Other Current A
Prepayments and Other Current Assets | 12 Months Ended |
Dec. 31, 2020 | |
Prepayments and Other Current Assets | |
Prepayments and other current assets | 3. Prepayments and Other Current Assets Prepayments and other current assets consist of the following: As of December 31, 2019 2020 RMB RMB Input value added tax ("VAT") 1,386,004 1,698,506 Prepaid expenses 80,388 111,420 Accrued interest income 150,157 71,855 Deposits 55,277 76,665 Others 292,680 376,242 Total 1,964,506 2,334,688 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, net | |
Property and Equipment, net | 4. Property and Equipment, Net Property and equipment, net consist of the following: As of December 31, 2019 2020 RMB RMB Buildings 5,594,482 6,940,154 Machinery and equipment 3,778,753 5,055,601 Leasehold improvements 432,236 599,300 Vehicles 3,367,428 5,591,138 Furniture, office and electric equipment 462,842 619,007 Construction in progress 1,685,622 4,312,932 Total 15,321,363 23,118,132 Accumulated depreciation (2,850,731) (4,552,971) Property and equipment, net 12,470,632 18,565,161 Depreciation expenses were RMB809,005, RMB1,210,040 and RMB1,758,638 for the years ended December 31, 2018, 2019 and 2020, respectively. As at December 31, 2019 and 2020, the title certificates for certain buildings of the Company with an aggregate net book value of approximately RMB3,144,110 and RMB2,272,711, respectively, had not been obtained. |
Land Use Rights, Net
Land Use Rights, Net | 12 Months Ended |
Dec. 31, 2020 | |
Land Use Rights, Net. | |
Land Use Rights, Net | 5. 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. The weighted average remaining lease term is 44 years as of December 31, 2020. As of December 31, 2019 2020 RMB RMB Cost 2,681,762 4,609,201 Less: Accumulated amortization (172,902) (248,528) Land use rights, net 2,508,860 4,360,673 Amortization expenses for land use rights were RMB38,516, RMB48,328 and RMB75,627 for the years ended December 31, 2018, 2019 and 2020, respectively. As at December 31, 2019 and 2020, the title certificates for certain land use rights of the Company with carrying value of approximately RMB167,812 and RMB303,554, respectively, had not been obtained. |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2020 | |
Operating Leases | |
Operating Leases | 6. Operating Leases 1) Lease as lessee The Company leases office space, sorting hubs and warehouse facilities under non-cancellable operating lease agreements that expire at various dates through December 2034. During the three years ended December 31, 2018, 2019 and 2020, the Company incurred rental expenses related to fixed operating lease costs amounting to RMB 271,630, RMB 300,708 and RMB 361,098, respectively. No variable lease cost existed. Supplemental information related to leases within the consolidated balance sheets are as follows: As of December 31, As of December 31, 2019 2020 RMB RMB Operating lease right-of-use assets 901,956 876,259 Current operating lease liabilities 298,728 246,394 Non-current operating lease liabilities 504,442 502,481 Total operating lease liabilities 803,170 748,875 Weighted average remaining lease term (in years) 6 5 Weighted average discount rate 4.36 % 4.27 % Supplemental cash flow information related to leases for the year ended December 31, 2020 is as follows: Year ended Year ended December 31, December 31, 2019 2020 RMB RMB Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases 322,857 389,696 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 499,124 343,411 Right-of-use assets decreased due to lease modifications: Operating leases 168,380 48,558 6. Operating Leases (Continued) 1) Lease as lessee (Continued) The following is a maturity analysis of the annual undiscounted cash flows as of December 31, 2019 and December 31, 2020: As of As of December 31, 2019 December 31, 2020 RMB RMB Within one year 285,743 257,009 Within a period of more than one year but not more than two years 196,902 163,774 Within a period of more than two year but not more than three years 105,055 100,435 Within a period of more than three year but not more than four years 82,610 105,527 Within a period of more than four year but not more than five years 50,415 64,430 Within a period of more than five year 184,470 148,254 Total lease commitment 905,195 839,429 Less: Imputed interest (102,025) (90,554) Total operating lease liabilities 803,170 748,875 Less: Current operating lease liabilities (298,728) (246,394) Long-term operating lease liabilities 504,442 502,481 Under ASC 842, land use rights agreements are also considered as operating lease contracts. See Note 5 for separate disclosures related to land use right. 2) Lease as lessor The Company rents land and buildings to network partners under non-cancellable operating lease agreements that expire at various dates through December 2037. All of the Company’s leasing arrangements as lessor are classified as operating leases. Rental income is recognized on a straight-line basis over the rental period. During the years ended December 31, 2018, 2019 and 2020, the Company recorded rental income amounting to RMB69,483, RMB79,254 and RMB81,348, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill | |
Goodwill | 7. Goodwill The carrying amount of goodwill by reporting units as of December 31, 2019 and 2020 were as follows: Express Freight Total Delivery Forwarding Amount RMB RMB RMB Balance at December 31, 2019 and 2020 4,157,111 84,430 4,241,541 |
Investments in equity investees
Investments in equity investees | 12 Months Ended |
Dec. 31, 2020 | |
Investments in equity investees | |
Investments in equity investees | 8. Investments in equity investees The Company's investments in equity investees comprise the following: As of December 31, 2019 2020 RMB RMB Investments accounted for under equity method: ZTO Supply Chain Management Co., Ltd. (“ZTO LTL”) (1) 206,986 63,224 Feng Wang Investment Co., Ltd. ("Feng Wang") (2) 51,068 49,165 Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") (3) 29,652 24,045 Others 83,605 106,516 Total investments accounted for under the equity method 371,311 242,950 Investments accounted for as equity investments without readily determinable fair values: Cai Niao Smart Logistics Network Limited ("Cai Niao") (4) 1,122,218 1,049,893 Zhejiang Yizhan Network Technology Co., Ltd. (“Cainiao Post”) (4) 1,075,000 1,075,000 Zhijiang New Industries Limited (“ZJ New Industries”) (4) 500,000 500,000 ZTO Supply Chain Management Co., Ltd. (“ZTO LTL”) (1) — 218,275 Others 40,965 138,345 Total investments accounted for equity investments without readily determinable fair values 2,738,183 2,981,513 Total investments in equity investees 3,109,494 3,224,463 (1) ZTO LTL On August 22, 2016, the Company entered into an investment agreement with ZTO LTL and Mr. Jianfa Lai to invest cash of RMB54,000 in exchange of 18% ordinary shares 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 Company. Owing to the shareholders' structure of ZTO LTL, the Company has significant influence over ZTO LTL's operating activities. Therefore, the investment is accounted for using the equity method. In August 2017, the Company increased investment in ZTO LTL by RMB36,000 to maintain its equity interest 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 Company held 18% equity in ZTO Freight after the restructuring. The Company's equity interest decreased to 17.7% after a round of preferred share financing in 2018 due to additional capital contributions from other shareholders and the Company invested in ZTO Freight's Series A preferred share with US$19,000 (approximate to RMB130,150 ). In May 2020, the Company invested in ZTO Freight's Series A+ preferred share with US$12,715 (approximate to RMB90,243) and its equity interest further decreased to 17.3% due to additional capital contributions from other shareholders. The Company reconsidered, upon the capital structure change after the Series A+ financing, the characteristics of all preferred share investments held in ZTO Freight and determined the preferred share investments are not in substance common stock due to the substantive liquidation preference and therefore are accounted as equity investments without readily determinable fair values. 8. Investments in equity investees (Continued) (2) Feng Wang In December 2013, the Company 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 made by the Company was RMB50,000 in cash, representing 25% of the equity interest of Feng Wang. In 2015, the Company’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 Company 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, for developing the clean energy vehicles used in the express and logistics industries. The capital contribution made by the Company was RMB30,000, representing 15% equity interest of CRRC. The Company has one board seat out of seven, and has significant influence over CRRC’s operating activities. Therefore, the investment is accounted for using the equity method. (4) Investments accounted for as equity investments without readily determinable fair values In May 2013, the Company obtained equity interests in 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. During the fourth quarter of 2019, the Company further invested RMB150,485 in Cai Niao in connection with a new round of financing completed in 2019, which represented an observable price change in an orderly transaction for Cai Niao equity interest and resulted in an unrealized gain of RMB754,468 recorded in other income (expense) in the consolidated statement of comprehensive income for the year ended December 31, 2019. In May 2018, the Company entered into a subscription and contribution agreement with four other leading express delivery companies in PRC, to obtain 15% equity interest in Cainiao Post, Cai Niao’s network of last-mile delivery stations, in an amount of RMB1,075,000. Since the Company cannot exercise significant influence over it, this investment was accounted for as equity investments without readily determinable fair values. In October 2018, the Company entered into an investment agreement with several investment corporations to establish a new investment company, named ZJ New Industries and obtain 2% equity interest in ZJ New Industries. The total capital contribution made by the Company was RMB500,000. Due to the continued operating loss, investment in Wheat Commune has been fully impaired as of December 31, 2019 and RMB48,526 of impairment losses was recognized related to this investment for the year ended December 31, 2019. The Company recognized impairment losses totaling nil, RMB56,026, and nil related to equity investments for the years ended December 31, 2018, 2019 and 2020, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net | |
Intangible Assets, Net | 9. Intangible Assets, Net As of December 31, 2019 2020 RMB RMB Customer relationships 61,973 61,973 Less: accumulated amortization (13,944) (20,141) Customer relationships, net 48,029 41,832 Amortization expenses for customer relationships acquired through business combination of COE Business were RMB6,197, RMB6,198 and RMB6,197 for the years ended December 31, 2018, 2019 and 2020, respectively. The estimated amortization expenses for each of the five succeeding fiscal years and thereafter are as follows: Years ended December 31, RMB 2021 6,197 2022 6,197 2023 6,197 2024 6,197 2025 6,197 2026 and after 10,847 Total 41,832 |
Other Current Liabilities
Other Current Liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Other Current Liabilities | |
Other Current Liabilities | 10. Other Current Liabilities Other current liabilities consist of the following: As of December 31, 2019 2020 RMB RMB Payables related to property and equipment 1,076,935 1,319,693 Deposits from network partners(1) 925,925 930,147 Salary and welfare payable 838,527 924,383 Payables to individual couriers(2) — 448,158 Construction deposits 55,832 86,043 Payables to network partners(3) 260,228 262,537 Accrued expenses 84,274 222,642 Others 310,567 293,481 Total 3,552,288 4,487,084 (1) Amount primarily represents the waybill deposits collected from the pickup outlets operated by network partners. The deposits will be refunded when the parcels are delivered to the recipients. (2) Payables to individual couriers represent the amount to be paid by the Company to individual couriers on behalf of its network partners for their last mile dispatch. (3) Payables to network partners represent the amount collected by the Company on behalf of its network partners in the provision of express delivery services. |
Short-term Bank Borrowings
Short-term Bank Borrowings | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Bank Borrowings | |
Short-term Bank Borrowings | 11. Short-term Bank Borrowings Short-term bank borrowings consist of the following: 2019 2020 RMB RMB PRC domestic commercial banks — 1,432,929 In 2020, the Company entered into collectively RMB1,432,929 bank loan contracts with several banks. The weighted average interest rate of the short-term borrowings was 2.94% for the year ended December 31, 2020. Certain borrowings are subject to financial covenants such as asset-liability ratio less than 65% and current ratio not less than 0.8. As of December 31, 2020, the Company was in compliance with the financial covenants. The borrowings are repayable within one year. |
Noncontrolling Interest
Noncontrolling Interest | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest | |
Noncontrolling Interest | 12. Noncontrolling Interests Below are the changes in the Company’s ownership in its subsidiaries on the Company’s equity. Year ended December 31, 2018 2019 2020 RMB RMB RMB Net income attributable to ZTO Express (Cayman) Inc. 4,383,025 5,674,145 4,312,213 Transfers from/(to) noncontrolling interest Increase in ZTO's paid in capital for capital contribution from noncontrolling interest shareholder 23,740 — 807 Decrease in ZTO's paid in capital for purchase shares of the Company's subsidiaries — — (17,129) Net transfers from/(to) noncontrolling interest 23,740 — (16,322) Change from net income attribute to ZTO and transfers from/(to) noncontrolling interest 4,406,765 5,674,145 4,295,891 |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2020 | |
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 Company’s subsidiary incorporated in British Virgin Island are not subject to tax. The Company’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 Company’s subsidiaries domiciled in Hong Kong has applied 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. 13. Income Tax (Continued) Under the Law of the People's Republic of China on Enterprise Income Tax ("EIT Law"), the Company’s subsidiaries domiciled in 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 (effective till 2030), or the Western Regions Catalogue, subject to certain general restrictions described in the EIT Law and the related regulations. WFOE and Shanghai Shuangcaiji Intellect Technology Co., Ltd. are qualified for HNTE status and therefore eligible for a preferential income tax rate of 15% (effective till 2022). In addition, WFOE applied for the Key Software Enterprise status in early 2020. After the approval by the relevant tax authority in September 2020, WFOE was entitled to a preferential tax rate of 10% retroactively for the year ended December 31, 2019. Ten of the Company's 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 enjoy the 15% preferential income tax rate for the year ended December 31, 2018, 2019 and 2020. The preferential income tax rate will expire in December 2030. The current and deferred portion of income tax expenses included in the consolidated statements of comprehensive income, which were substantially attributable to the Company’s subsidiaries are as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Current tax expenses 1,068,214 1,118,822 961,802 Deferred tax (139,081) (40,527) (271,969) Total 929,133 1,078,295 689,833 Reconciliations of the differences between PRC statutory income tax rate and the Company’s effective income tax rate for the years ended December 31, 2018, 2019 and 2020 are as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Statutory income tax rate 25.00 % 25.00 % 25.00 % Preferential tax rates (7.36) % (6.26) % (6.70) % R&D super deduction (0.61) % (0.96) % (1.87) % Non-deductible expenses 1.41 % 1.48 % 1.70 % Non-taxable income (0.24) % — (0.03) % Different tax rates of operations in other jurisdictions (0.74) % (3.34) % (0.42) % Valuation allowance on deferred tax assets — — 0.07 % True up (1) (0.05) % 0.04 % (4.05) % 17.41 % 15.96 % 13.70 % Note (1): WFOE applied for the Key Software Enterprise status in early 2020. After the approval by the relevant tax authority in September 2020, WFOE was entitled to a preferential tax rate of 10% retroactively for the year ended December 31, 2019, resulting in an income tax expense decrease of RMB200,683 for the year ended December 31, 2020. 13. Income Tax (Continued) The effect of the tax holiday on the income per share is as follows: As of December 31, 2018 2019 2020 RMB RMB RMB Tax saving amount due to preferential tax rates 392,761 422,996 538,014 Income per share effect- basic 0.52 0.54 0.68 Income per share effect- diluted 0.52 0.54 0.68 The principal components of the Company’s deferred income tax assets and liabilities as of December 31, 2019 and 2020 are as follows: As of December 31, 2019 2020 RMB RMB Deferred tax assets: Accrued payroll and expense 131,007 139,153 Net loss carryforward 159,969 461,305 Financial subsidy 31,916 6,266 Depreciation for property and equipment 47,433 74,429 Unrealized gain from intragroup transactions 20,467 32,160 Provision for allowance for credit losses 12,795 14,903 Total deferred tax assets 403,587 728,216 Valuation allowance on deferred tax assets — (7,655) Total deferred tax assets 403,587 720,561 Deferred tax liabilities: Difference in basis of land use rights (145,477) (141,960) Unrealized investment gain — (900) Difference in basis of fixed assets (54,471) (105,202) Difference in basis of intangible assets (7,948) (6,925) Total deferred tax liabilities (207,896) (254,987) The Company 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 Company’s experience with tax attributes expiring unused and tax planning alternatives. For the years ended December 31, 2019 and 2020, valuation allowance of nil and RMB7,655 were provided, respectively. As of December 31, 2020, the Company had tax loss carryforward in subsidiaries of RMB1,858,581 which will expire from 2021 to 2025 if not used. 13. Income Tax (Continued) Uncertainties exist with respect to how the current income tax law in PRC applies to the Company’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 PRC will be considered residents for Chinese Income tax purposes if the place of effective management or control is within 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 PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Company does not believe that the legal entities organized outside of PRC within the Company should be treated as residents for EIT law purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiaries registered outside PRC should be deemed resident enterprises, the Company and its subsidiaries registered outside PRC will be subject to the PRC income taxes, at a statutory income tax rate of 25%. The Company 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 to 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 2020, the Company is subject to examination of the PRC tax authorities. Aggregate undistributed earnings of the Company’s PRC subsidiaries and VIE that are available for distribution were RMB15,607,474 and RMB19,905,606 as of December 31, 2019 and 2020 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 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 Company plans to indefinitely reinvest undistributed profits earned from its PRC subsidiaries in its operations in PRC. Therefore, no withholding income taxes for undistributed profits of the Company’s subsidiaries were provided as of December 31, 2019 and 2020. 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 Company completed its feasibility analysis on a method, which the Company will ultimately execute if necessary to repatriate the undistributed earnings of the VIE without significant tax costs. As such, the Company does not accrue deferred tax liabilities on the earnings of the VIE given that the Company will ultimately use the means. |
Share Based Compensation
Share Based Compensation | 12 Months Ended |
Dec. 31, 2020 | |
Share Based Compensation | |
Share Based Compensation | 14. Share Based Compensation Employee Share Holding Platform In June 2016, the Company established an employee share holding platform (the “Share Holding Platform”). The purpose of the Share Holding Platform is to allow employees of the Company in 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 Company’s Share Holding Platform. Four limited liability partnerships (“LLPs”) were established in 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 Company, and his wife, Ms. Lai Yufeng agreed to serve as the general partner and sole limited partner of the four LLPs. ZTO ES and the LLPs have no activities other than administering the plan and does not have employees. On behalf of the Company 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. All shareholder rights associated with these 16 million ordinary shares including but not limited to voting right and dividend right were waived 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 Company 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 March 28, 2017, 3,945,750 ordinary share units corresponding to 789,150 Company’s ordinary shares were granted to certain employees at the consideration of nil. These awards are subject to vesting ratably over a period of three years . The Company recorded the share based compensation of RMB23,303 based on the market price of ordinary shares at US$12.88 on the grant date in selling, general and administrative expenses in the consolidated statement of comprehensive income during each of the three years thereafter. In March of 2018, 2019 and 2020, 4,534,745, 4,722,885 and 3,925,485 ordinary share units corresponding to 906,949, 944,577, and 785,097 Company’s ordinary shares were granted to certain officers and employees at the consideration of nil, respectively. These share awards vested immediately upon grant. The Company recorded the share based compensation of RMB97,424, RMB127,805, and RMB139,308 based on the market price at US$16.99, US$20.13 and US$25.32 of ordinary shares on the respective grant dates in selling, general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2018, 2019 and 2020, respectively. 14. Share Based Compensation (Continued) A summary of changes in the ordinary share awards relating to the Share Holding Platform granted by the Company during the year ended December 31, 2020 is as follows: Number of ordinary shares Weighted average under grant-date Incentive Platform fair value RMB Non-Vested at January 1, 2020 283,886 88.59 Granted 785,097 177.44 Less: forfeited 31,250 88.59 Less: vested 1,037,733 155.81 Non-Vested at December 31, 2020 — — The fair value of ordinary share units was determined based on 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 directors, executive officers and other employees of the Company, 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. 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, 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 the board of directors. 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 had recorded share based compensation expense based on grant date fair value of options, totaled at RMB13,148, in selling, general and administrative expenses in the consolidated statement of comprehensive income for the year ended December 31, 2018. In May 2018, the Company 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. Restricted share units On March 28, 2017, the Company granted 679,645 restricted share units (“RSU”) at par value to certain director, executive offices and employees pursuant to the 2016 Share Incentive Plan. These grants are subject to vesting ratably over a period of three years from the grant date, with 224,631 RSUs vested in 2020. The Company recorded the share based compensation of RMB21,192, RMB19,899 and RMB 3,316 based on the market price of ordinary shares at US$12.88 on the grant date in selling, general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2018, 2019 and 2020, respectively. 14. Share Based Compensation (Continued) In March of 2018, 2019, 2020, the Company granted 852,390, 1,076,532 and 684,905 RSUs at par value to certain director, executive offices and employees pursuit to the 2016 Share Incentive Plan, respectively. These grants were vested immediately upon grant. The Company recorded the share based compensation of RMB91,150, RMB 145,659, and RMB 121,530 based on the market price of ordinary shares at US$16.99, US$20.13 and US$25.32 on the respective grant dates in selling, general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2018, 2019, and 2020, respectively. The vested RSU and exercised options were settled with reissuance of treasury shares. |
Ordinary Shares
Ordinary Shares | 12 Months Ended |
Dec. 31, 2020 | |
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 Company’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. 8,485,046 and 7,447,313 ordinary shares transferred to ZTO ES were considered issued but not outstanding as of December 31, 2019 and 2020, respectively. On May 29, 2018, Alibaba Group Holding Limited (“Alibaba”) and its logistic arm Cai Niao, and the Company announced a strategic agreement in which investors led by Alibaba and Cai Niao 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. On September 29, 2020, the Company successfully listed on the Main Board of the Hong Kong Stock Exchange 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 a public offering price of HK$218.00. The Company received net proceeds of RMB 9,763.8 million from this offering after deducting RMB79.2 million of underwriting commissions and discounts and RMB77.4 million of the offering expenses payable by the Company. The Hong Kong-listed shares are fully fungible with the Company’s American depositary shares (ADSs) listed on the New York Stock Exchange (one ADS representing one Class A ordinary share). |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share | |
Earnings Per Share | 16. Earnings Per Share Basic and diluted earnings per share for each of the years presented are calculated as follows: Year ended December 31, 2018 2019 2020 RMB RMB RMB Numerator: Net income attributable to ordinary shareholders in computing basic and diluted earnings per share 4,383,025 5,674,145 4,312,213 Shares (Denominator): Weight average ordinary shares outstanding—basic 751,814,077 784,007,583 796,097,532 Plus: Shares for option 19,376 — — Shares for ordinary share units and restricted share units 839,503 323,537 49,972 Weight average ordinary shares outstanding—diluted 752,672,956 784,331,120 796,147,504 Earnings per share—basic 5.83 7.24 5.42 Earnings per share—diluted 5.82 7.23 5.42 9,682,255, 8,485,046 and 7,447,313 ordinary shares transferred to ZTO ES were considered issued but not outstanding as of December 31, 2018, 2019 and 2020 , 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, 2020 | |
Related Party Transactions | |
Related Party Transactions | 17. Related Party Transactions The table below sets forth the major related parties and their relationships with the Company: Name of related parties Relationship with the Company Tonglu Tongze Logistics Ltd. and its subsidiaries Majority equity interests held by the employees of the Company Shanghai Mingyu Barcode Technology Ltd. Controlled by brother of chairman of the Company Shanghai Kuaibao Network Technology Ltd. The Company’s equity investee ZTO Lianshang Technology Co., Ltd. and its subsidiaries The Company’s equity investee ZTO Supply Chain Management Co., Ltd. and its subsidiaries The Company’s equity investee ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries The Company’s equity investee Hangzhou Tonglu Hengze Investment Co., Ltd. Controlled by vice president of the Company Ningbo Haitaotong International Logistics Co., Ltd. The Company’s equity investee Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd Controlled by chairman of the Company Youmi Technology (Zhejiang) Co., Ltd. The Company’s equity investee ZTO ES Holding Limited Entity controlled by chairman of the Company 17. Related Party Transactions (Continued) (a) The Company entered into the following transactions with its related parties: Transactions Year ended December 31, 2018 2019 2020 RMB RMB RMB Revenues: Transportation revenue from ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries — 32,699 45,286 Advertisement revenue from Youmi Technology (Zhejiang) Co., Ltd. — — 2,170 Transportation revenue from ZTO Lianshang Technology Co., Ltd. and its subsidiaries — 14 484 Advertisement revenue from Shanghai Kuaibao Network Technology Ltd. — 2,936 119 Transportation revenue from Ningbo Haitaotong International Logistics Co., Ltd. — 717 1,299 — 36,366 49,358 Cost of revenues: Transportation service fees paid to Tonglu Tongze Logistics Ltd. and its subsidiaries 547,500 479,124 331,288 Transportation service fees paid to ZTO Supply Chain Management Co., Ltd. and its subsidiaries 40,280 63,808 47,491 Purchases of supplies from Shanghai Mingyu Barcode Technology Ltd. 90,051 212,513 197,302 677,831 755,445 576,081 Other operating income: Rental income from ZTO Supply Chain Management Co., Ltd. and its subsidiaries 11,103 17,979 28,720 Rental income from ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries — 9,739 17,215 Rental income from ZTO Lianshang Technology Co., Ltd. and its subsidiaries — — 899 Rental income from Youmi Technology (Zhejiang) Co., Ltd. — — 100 11,103 27,718 46,934 Other income: Gain on disposal of subsidiary from ZTO Lianshang Technology Co., Ltd. and its subsidiaries 12,904 — — Interest income related to financing receivables from ZTO Lianshang Technology — 963 826 Interest income related to financing receivables from ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries — — 21 12,904 963 847 17. Related Party Transactions (Continued) (b) The Company had the following balances with its related parties: As of December 31, 2019 2020 RMB RMB Amounts due to related parties Tonglu Tongze Logistics Ltd. and its subsidiaries 20,655 — Shanghai Mingyu Barcode Technology Ltd. 16,906 16,652 ZTO Supply Chain Management Co., Ltd. and its subsidiaries 1,165 — Others 217 3 Total 38,943 16,655 Amounts due to related parties consisted of accounts payable to related parties for transportation, waybill material and deposits as of December 31, 2019 and 2020, respectively. As of December 31, 2019 2020 RMB RMB Amounts due from related parties ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries (1) 37,266 44,875 Tonglu Tongze Logistics Ltd. and its subsidiaries — 9,220 ZTO Supply Chain Management Co., Ltd. — 5,680 Youmi Technology (Zhejiang) Co., Ltd. — 5,767 ZTO Lianshang Technology Co., Ltd. and its subsidiaries (2) 20,221 1,011 Hangzhou Tonglu Hengze Investment Co., Ltd. (3) 10,000 — Shanghai Kuaibao Network Technology Ltd. (3) 6,512 6,600 Others 313 125 Total 74,312 73,278 Amounts due from related parties-non current Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd (4) — 500,000 Total — 500,000 (1) The amount comprised loan to related parties with no interest bearing and accounts receivable generated from the transportation service provided by the Company. (2) Mainly comprised financing receivable from ZTO Lianshang Technology Co., Ltd. and its subsidiaries, refer to Note 17(a). (3) Amounts due from related parties were loans to related parties with no interest bearing. (4) The amount comprised a three-year loan to this related party with 7.2% annualized interest rate. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | 18. Commitments and Contingencies Capital commitments The Company’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 5,199,817 as of December 31, 2020. All of these capital commitments will be fulfilled in the following years based on the construction progress. Investment commitments The Company is committed to make further capital injection into certain investments in equity investees. Such investment commitment amounted to approximately RMB239,100 as of December 31, 2020. Contingencies The Company is subject to periodic legal or administrative proceedings in the ordinary course of business. The Company does not believe that any currently pending legal or administrative proceeding to which the Company is a party will have a material effect on its business or financial condition. The Company has not made adequate contributions to employee benefit plans, as required by applicable PRC laws and regulations, but the Company has recorded accruals for the estimated underpaid amounts in the consolidated financial statements. However, the Company 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 Company 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 three putative securities class actions. Management of the Company believes that the claims are without merit and intends to defend vigorously. |
Repurchase of Ordinary Shares
Repurchase of Ordinary Shares | 12 Months Ended |
Dec. 31, 2020 | |
Repurchase of Ordinary Shares | |
Repurchase of Ordinary Shares | 19. Repurchase of Ordinary Shares 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 had purchased an aggregate of 1,700,000 ADSs at an average purchase price of US$15.85 per ADS, for a total cash consideration of RMB185,673 including repurchase commissions, which had been fully paid as of December 31, 2019. As of December 31, 2019, the Company had purchased an aggregate of 7,716,436 ADSs at an average purchase price of US$17.33, for a total cash consideration of RMB924,418, including repurchase commissions, which had been fully paid as of December 31, 2019. On March 13, 2020, the board of directors of the Company approved the extension of the current share repurchase program to June 30, 2021. The Company expects to fund the repurchase out of its existing cash balance. As of December 31, 2020, the Company has purchased an aggregate of 14,491,197 ADSs at an average purchase price of US$22.20, including repurchase commissions, which had been fully paid as of December 31, 2020. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plans | |
Employee Benefit Plans | 20. Employee Benefit Plans The Company’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 Company contributed RMB195,101, RMB254,534 and RMB302,069 for the years ended December 31, 2018, 2019 and 2020, 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, 2020 | |
Segment Information | |
Segment Information | 21. Segment Information The Company has only one reportable segment since the Company does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. The Company’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 Company as a whole. The Company does not distinguish among markets or segments for the purpose of internal reports. The majority of the Company's revenues for the years ended December 31, 2018, 2019 and 2020 were generated from PRC. As of December 31, 2019 and 2020, the majority of the long-lived assets of the Company are located in PRC, and no geographical segments are presented. |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2020 | |
Restricted Net Assets | |
Restricted Net Assets | 22. Restricted Net Assets Pursuant to the laws applicable to the PRC’s Foreign Investment Enterprises and local enterprises, the Company’s entities in 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 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 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 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 RMB353,803, RMB12,894 and nil for the years ended December 31, 2018, 2019 and 2020, respectively. The accumulated reserves as of December 31, 2019 and 2020 were RMB993,936 and RMB993,936, 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 Company. Amounts restricted include paid-in capital, additional paid-in capital and the statutory reserves of the Company’s PRC subsidiaries and VIE. As of December 31, 2020, the aggregate amount of capital and statutory reserves restricted which represented the amount of net assets of the relevant subsidiaries and VIE in the Company not available for distribution was RMB19,995,009. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events On March 16, 2021, the Company granted 525,595 restricted share units to certain director, executive officers and employees pursuant to the 2016 Share Incentive Plan. In addition, the Company granted ordinary share units representing 635,767 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. The fair value of these share awards is RMB 248,027 based on the market price at US$32.83 of ordinary shares on the grant date, which were expensed immediately. On March 16, 2021, the board of directors approved a special dividend of US$0.25 per ADS for 2020 to the shareholders of record as of the close of business on April 8, 2021. |
FINANCIAL STATEMENTS SCHEDULE I
FINANCIAL STATEMENTS SCHEDULE I | 12 Months Ended |
Dec. 31, 2020 | |
FINANCIAL STATEMENTS SCHEDULE I | |
FINANCIAL STATEMENTS SCHEDULE I | FINANCIAL STATEMENTS SCHEDULE I ZTO EXPRESS (CAYMAN) INC. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED BALANCE SHEETS (Amounts in thousands, except for share and per share data) As of December 31, 2019 2020 RMB RMB US$ (Note 2) ASSETS Current assets: Cash and cash equivalents 394,741 3,443,624 527,759 Short-term investment 8,771,868 2,509,137 384,542 Prepayments and other current assets 118,623 13,013 1,994 Amounts due from subsidiaries 1,510,194 4,993,853 765,342 Total current assets 10,795,426 10,959,627 1,679,637 Deferred tax assets 28,146 — — Long-term investment 696,180 652,500 100,000 Investments in subsidiaries and VIE 26,878,301 37,391,446 5,730,490 TOTAL ASSETS 38,398,053 49,003,573 7,510,127 LIABILITIES AND EQUITY Other current liability 1,629 24,760 3,795 Other non-current liability 93,820 — — Total liabilities 95,449 24,760 3,795 Shareholders' equity: Ordinary shares (US$0.0001 par value; 10,000,000,000 shares 517 553 85 Additional paid-in capital 22,336,594 30,613,948 4,691,793 Treasury shares, at cost (1,436,767) (2,578,870) (395,229) Retained earnings 16,726,540 21,038,753 3,224,330 Accumulated other comprehensive income (loss) 675,720 (95,571) (14,647) Total shareholders' equity 38,302,604 48,978,813 7,506,332 TOTAL LIABILITIES AND EQUITY 38,398,053 49,003,573 7,510,127 FINANCIAL STATEMENTS SCHEDULE I ZTO EXPRESS (CAYMAN) INC. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Amounts in thousands, except for share and per share data) Year ended December 31, 2018 2019 2020 RMB RMB RMB US$ (Note 2) Operating expenses: General and administrative (271,378) (325,559) (284,193) (43,554) Other operating income, net 43,575 52,937 146,168 22,401 Total operating expenses (227,803) (272,622) (138,025) (21,153) Interest income 317,714 412,311 199,991 30,650 Income from operations 89,911 139,689 61,966 9,497 Income tax expense (43,581) (61,505) (62,887) (9,638) Fair value change at financial instruments — — (2,948) (452) Share of profit in subsidiaries and VIE 4,336,695 5,595,961 4,316,082 661,469 Net income attributable to ZTO Express (Cayman) Inc. 4,383,025 5,674,145 4,312,213 660,876 Net income attributable to ordinary shareholders 4,383,025 5,674,145 4,312,213 660,876 Other comprehensive income/(loss), net of tax of nil Foreign currency translation adjustment 867,612 104,004 (771,291) (118,205) Comprehensive income 5,250,637 5,778,149 3,540,922 542,671 FINANCIAL STATEMENTS SCHEDULE I ZTO EXPRESS (CAYMAN) INC. FINANCIAL INFORMATION OF PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands, except for share and per share data) Year ended December 31, 2018 2019 2020 RMB RMB RMB US$ (Note 2) Cash flows from operating activities: Net income 4,383,025 5,674,145 4,312,213 660,876 Adjustments to reconcile net income to net cash used by operating activities Share based compensation 249,478 316,666 264,154 40,483 Share of profit in subsidiaries and VIE (4,336,695) (5,595,961) (4,316,082) (661,469) Changes in operating assets and liabilities: Prepayments and other current assets (131,322) 53,628 105,610 16,184 Deferred tax assets (27,288) (858) 28,146 4,314 Other non-current liability 9,231 (14,448) (90,877) (13,928) Net cash used in by operating activities 146,429 433,172 303,164 46,460 Cash flows from investing activities: Loans to and investments in subsidiaries, consolidated VIEs and VIEs' subsidiaries (2,199,955) (2,051,918) (10,010,593) (1,534,190) Purchases of short-term investments (12,564,140) (10,089,829) (6,095,450) (934,169) Maturity of short-term investments 5,376,252 14,072,901 12,297,430 1,884,664 Purchase of long-term investment — (707,870) — — Net cash (used in)/provided by investing activities (9,387,843) 1,223,284 (3,808,613) (583,695) Cash flows from financing activities: Proceeds from issuance of ordinary shares, net of issuance cost and commission paid of RMB69,498 8,891,909 — 9,771,782 1,497,591 Payment of dividends (895,136) (1,270,773) (1,649,308) (252,767) Repurchase of ordinary shares (769,811) (762,893) (1,228,341) (188,251) Net cash provided by/(used in) financing activities 7,226,962 (2,033,666) 6,894,133 1,056,573 Effect of exchange rate changes on cash, cash equivalents 265,269 (1,933) (339,801) (52,076) Net change in cash, cash equivalents (1,749,183) (379,143) 3,048,883 467,262 Cash, cash equivalents, beginning of year 2,523,067 773,884 394,741 60,497 Cash, cash equivalents, end of year 773,884 394,741 3,443,624 527,759 Supplemental disclosure on non-cash investing and financing activities: As of December 31, 2018, 2019 and 2020, payables for repurchasing the ordinary shares were RMB24,146, nil and nil, respectively. As of December 31, 2018, 2019 and 2020, payables for dividends were RMB1,699, RMB1,629 and RMB11,198, respectively. FINANCIAL STATEMENTS SCHEDULE I ZTO EXPRESS (CAYMAN) INC. FINANCIAL INFORMATION OF PARENT COMPANY NOTES TO SCHEDULE I 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) 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. 3) As of December 31, 2019 and 2020, there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or guarantees of the Company. 4) 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, 2020 are solely for the convenience of the readers and were calculated at the rate of US$1.00= RMB6.5250, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2020. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2020, or at any other rate. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
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 (“U.S. 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 Company evaluates the need to consolidate its VIE of which the Company is the primary beneficiary. In determining whether the Company is the primary beneficiary, the Company considers if the Company (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 Company consolidates the VIE. Consolidation of Variable Interest Entity 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 Company 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. (“WFOE”) 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 Agreements & Irrevocable Powers of Attorney Under which each shareholder of ZTO Express has executed a power of attorney to grant WFOE 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 agreements will remain in effect unless WFOE terminates the agreements by giving a prior written notice or giving its consent to the termination by ZTO Express. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) Exclusive Call Option Agreements Under which the shareholders of ZTO Express granted WFOE 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. WFOE or its designated representative(s) has sole discretion as to when to exercise such options, either in part or in full. Without WFOE’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 agreements can be early terminated by WFOE, but not by ZTO Express or its shareholders. Equity Pledge Agreements Under which the shareholders of ZTO Express pledged all of their equity interests in ZTO Express to WFOE as collateral to secure their obligations under the VIE contractual arrangements. If the shareholders of ZTO Express or ZTO Express breach their respective contractual obligations, WFOE, as pledgee, will be entitled to certain rights, including the right to dispose the pledged equity interests. Pursuant to the agreements, 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 WFOE. The equity pledge agreements will remain effective until ZTO Express and its shareholders have completed all of their obligations under the VIE contractual arrangements or discharged all of their obligations under the contractual arrangements. The agreement that transfer economic benefits to the Company is: Exclusive Consulting and Services Agreement Under which ZTO Express engages WFOE as its exclusive technical and operational consultant and under which WFOE 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 WFOE. The agreements will be effective as long as ZTO Express exists. WFOE 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 WFOE the power to exercise all voting rights to which they were entitled. In addition, WFOE 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, WFOE is entitled to receive service fees for services provided to ZTO Express. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) The Call Option Agreements and Voting Rights Proxy Agreements provide the Company with effective control over the VIE, while the Equity Interest Pledge Agreements secure the obligations of the shareholders of ZTO Express under the relevant agreements. Because the Company, through WFOE, 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 Company 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 Company’s operation through any transactions between the Company’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 Company 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 Company’s ability to consolidate, derive economic interests from, or exert effective control over its variable interest entity, or ● restricting or prohibiting the Company’s use of the proceeds of its initial public offering to finance its business and operations in China. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) The amounts and balances of ZTO Express and its subsidiaries (the “VIE”) after the elimination of intercompany balances and transactions within the VIE are presented in the following table: As of December 31, 2019 2020 RMB RMB Assets Current assets: Cash and cash equivalents 528,722 776,725 Accounts receivable, net 635,606 514,666 Financing receivables, net 172,267 341,486 Inventories 42,134 42,775 Advances to suppliers 46,534 45,621 Prepayments and other current assets 1,241,975 1,153,077 Amounts due from related parties 18,364 34,034 Total current assets 2,685,602 2,908,384 Investments in equity investees 114,447 110,570 Property and equipment, net 5,920,211 6,025,153 Land use rights, net 1,150,849 1,138,849 Operating lease right-of-use assets 853,092 834,984 Goodwill 4,157,111 4,157,111 Deferred tax assets 234,080 514,532 Long-term financing receivables, net 536,473 1,784,990 Other non-current assets 120,877 99,456 TOTAL ASSETS 15,772,742 17,574,029 Liabilities Current liabilities: Short-term bank borrowings — 1,432,929 Accounts payable 1,448,490 1,155,069 Notes payable — 158,138 Advances from customers 1,185,920 1,068,927 Income tax payable 9,359 250,726 Amounts due to related parties 769,951 620,490 Operating lease liabilities, current 273,524 234,071 Other current liabilities 2,536,131 2,594,801 Total current liabilities 6,223,375 7,515,151 Non-current operating lease liabilities 478,327 468,127 Deferred tax liabilities 123,173 127,816 TOTAL LIABILITIES 6,824,875 8,111,094 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Consolidation of Variable Interest Entity (Continued) Year ended December 31, 2018 2019 2020 RMB RMB RMB Total revenue 17,127,930 21,465,515 23,734,103 Net income 720,323 841,707 478,168 Net cash generated from (used in) operating activities 436,074 1,783,718 (537,756) Net cash used in investing activities (777,197) (1,831,001) (647,170) Net cash provided by (used in) financing activities (206,260) — 1,432,929 Net increase (decrease) in cash and cash equivalents (547,383) (47,283) 248,003 Cash and cash equivalents and restricted cash at beginning of year 1,123,388 576,005 528,722 Cash and cash equivalents and restricted cash at end of year 576,005 528,722 776,725 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. The inter-company transportation fees and service fees charged by WFOE were RMB7,776,622, RMB9,420,012 and RMB11,519,214 for the years ended December 31, 2018, 2019 and 2020, respectively. The amount due to WFOE were RMB731,008 and RMB603,835 as of December 31, 2019 and 2020, respectively. The inter-company operating cash outflow were RMB7,593,448, RMB9,248,582 and RMB11,646,387 for the years ended December 31, 2018, 2019 and 2020, respectively. These inter-company transactions and balances were eliminated in the consolidated financial statements. After all intercompany transactions eliminations, the VIE contributed 97.3%, 97.1% and 94.1% of the Company's consolidated revenues for the years ended December 31, 2018, 2019 and 2020, respectively. As of December 31, 2019 and 2020, the VIE accounted for an aggregate of 34.4% and 29.7%, respectively, of the consolidated assets, and 81.4% and 74.3%, respectively, of the consolidated liabilities. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company to provide financial support to the VIE. However, if the VIE was ever to need financial support, the Company 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 Company 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 22 for disclosure of restricted net assets. 2. Summary of Significant Accounting Policies (Continued) (b) Principles of consolidation (continued) Nonconsolidated Variable Interest Entity Tonglu Tongze Logistics Ltd. and its subsidiaries (“Tonglu”), established in 2013, are transportation service companies providing line-haul transportation services to the Company. Tonglu is majority owned by the employees of the Company who are considered as related parties to the Company. The variable interests in Tonglu held by the Company are in the form of a waiver of management fees. The Company 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 Company had amounts due to Tonglu as of December 31, 2019 and amounts due from Tonglu as of December 31, 2020 for transportation service provided or to be provided by Tonglu, pursuant to the contractual terms that are considered 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 U.S. 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 Company bases its estimates on historical experience and other relevant factors. Significant accounting estimates reflected in the Company's financial statements include assumptions used to determine the fair value of the assets acquired through business combination, allowance of credit losses, useful lives of long-lived assets, realization of deferred tax assets, impairment of long-lived assets and goodwill, and valuation of investments in equity investees. Actual results may differ from those estimates. |
Foreign currency translation | (d) Foreign currency translation The Company's reporting currency is Renminbi (“RMB”). The functional currency of the Company and subsidiaries incorporated outside the mainland China is the United States dollar (“US dollar” or “US$”) or Hong Kong dollar (“HKD”). 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. Foreign currency denominated financial assets and liabilities are re-measured at the balance sheet date exchange rate. 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 Company 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 | (e) Convenience translation The Company’s business is primarily conducted in PRC and almost all of the Company’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 outside PRC. 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, 2020 were calculated at the rate of US$1.00=RMB6.5250, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 31, 2020. No representation was made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 31, 2020, or at any other rate. |
Cash and cash equivalents | (f) 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 | (g) Restricted cash Restricted cash represents secured deposits held in designated bank accounts for issuance of bank acceptance notes, settlement of derivatives and commencement of construction. |
Accounts receivable, net | (h) Accounts receivable, net Accounts receivable mainly consists of amount due from the Company's customers, which is recorded net of allowance for credit losses. On January 1, 2020, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326") using the modified retrospective transition method. ASC 326 replaces the existing incurred loss impairment model with a forward-looking current expected credit loss ("CECL") methodology, which results in more timely recognition of credit losses. The Company has developed a CECL model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers. The cumulative effect from the adoption as of January 1, 2020 was immaterial to the consolidated financial statements. |
Short-term and long-term investment | (i) Short-term and long-term investment Short-term investment primarily comprises of dual currency notes/deposits ("DCN/DCD"), time deposits with maturities between three months and one year, and investments in wealth management products with variable interest rates and principal not-guaranteed with certain financial institutions. Long-term investment comprises of time deposits and investments in wealth management products with maturities more than one year. The Company has the intent and the ability to hold such time deposits and wealth management products to maturity. DCN/DCD purchased by the Company in 2020 is a structured product with unsecured principal purchased from financial institutions which have original maturities less than one year with a written foreign exchange option embedded. The Company’s intention for holding DCN/DCD is to obtain interest and manage foreign currency risks. The Company elects to adopt the fair value option in accordance with ASC 815 Financial Instruments to record the entire hybrid instruments at fair value in short-term investments in the consolidated balance sheets. The fair values of DCN/DCD are measured based on market-based redemption prices which are level 2 inputs provided by the selling bank. Changes in the fair value of the investments are recorded as gain or loss from fair value changes of financial instruments in the consolidated statements of comprehensive income. The Company classifies the short-term investment and long-term investment in wealth management products as held-to-maturity securities and stated at amortized cost. As of December 31, 2020, RMB334,000 of long-term investment was used as a collateral to issue of bank acceptance draft. 2. Summary of Significant Accounting Policies (Continued) (i) Short-term and long-term investment (Continued) Upon adoption of ASC 326, the Company changed its impairment analysis to utilize a forward-looking CECL model for financial instruments measured at amortized cost, including the short-term investment in wealth management products. Based upon the Company's assessment of various factors, including historical experience, credit quality of the related financial institutions, and other factors that may affect its ability to collect the short-term investment, the Company determined there was no cumulative effect from the adoption of ASC 326 as of January 1, 2020 and year ended December 31, 2020, no credit losses from the short-term investment were expected. The Company recorded interest income of RMB307,084, RMB432,566 and RMB329,812 from time deposits and wealth management products, and loss in fair value change from DCN/DCD of nil, nil and RMB2,948 in the consolidated statements of comprehensive income for the years ended December 31, 2018, 2019 and 2020, respectively. |
Foreign exchange options and forward contracts | (j) Foreign exchange options and forward contracts The Company entered into certain foreign exchange options and forward contracts in 2020 to protect against volatility of future cash flows caused by the changes in foreign exchange rates. The foreign exchange options and forward contracts are accounted for as derivatives and measured at fair value at each period end. The fair values of foreign exchange options and forward contracts are measured based on market-based redemption prices which are level 2 inputs provided by the bank that sells such foreign exchange options and forward contracts. The changes in fair value are recognized as gain or loss in the consolidated statements of comprehensive income. Depending on the terms of the specific derivative instruments and market conditions, the Company’s derivative instruments may be reflected as assets or liabilities at any particular point in time and recorded within prepayments and other current assets or other current liabilities, respectively on the consolidated balance sheets. The Company recorded a net gain from fair value changes of RMB2,071 related to foreign exchange options and forward contracts in the consolidated statements of comprehensive income for the year ended December 31, 2020. |
Fair value | (k) 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 Company 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. 2. Summary of Significant Accounting Policies (Continued) (k) Fair value (Continued) 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 short-term financial instruments, which consist of cash and cash equivalents, restricted cash, accounts receivable, financing receivable, time deposits and wealth management products recorded in short-term investments, amounts due from related parties, other current assets, accounts payable, amounts due to related parties, short-term bank borrowings, notes payable and other current liabilities, except for the derivative instruments measured at fair value and presented in the following table, are recorded at costs which approximate their fair values due to the short-term nature of these financial instruments. The carrying values of non-current restricted cash, long-term financing receivables and long-term investment which are time deposits, approximate their fair values as their interest rates are comparable to the prevailing interest rates in the market. The Company measures at fair value its financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. As of December 31, 2020, DCN/DCD and derivative instruments are measured and recorded at fair value initially and on a recurring basis in periods subsequent to their initial recognition and are as follows: Fair Value Measurement As of December 31, 2020 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total RMB RMB RMB RMB Short-term investments DCN/DCD — 1,693,843 — 1,693,843 Derivative assets recorded within prepayments and other current assets Foreign exchange forward contracts — 1,855 — 1,855 Derivative liabilities recorded within other current liabilities Foreign exchange option contracts — 317 — 317 2. Summary of Significant Accounting Policies (Continued) (k) Fair value (Continued) The Company measures 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 future performance projections, discount rate and other assumptions that are significant to the measurements of fair value. An impairment charge to these investments is recorded when the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than-temporary. During the years ended December 31, 2018, 2019 and 2020, no impairment of equity method investments was recorded. Beginning January 1, 2018, the Company's equity investments without readily determinable fair values, which do not qualify for NAV practical expedient and over which the Company does not have the ability to exercise significant influence through the investments in common stock or in substance common stock, are accounted for under the measurement alternative upon the adoption of Accounting Standards Update ("ASU") 2016-01 "Recognition and Measurement of Financial Assets and Liabilities" (the "Measurement Alternative"). Under the Measurement Alternative, the carrying value is measured at cost, less any impairment, plus and minus changes resulting from observable price changes in orderly transactions for identical or similar investments. The Company recognized an unrealized gain of RMB 754,468 related to the investee of Cai Niao Smart Logistics Network Limited as a result of an observable price change event for the year ended December 31, 2019. The Company recognized impairment losses of nil, RMB56,026 and nil related to equity investments without readily determinable fair values for the years ended December 31, 2018, 2019 and 2020, respectively (Note 8). Certain non-financial assets are measured at fair value on a nonrecurring basis, including property, plant, and equipment, right-of-use assets, 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, discount rate, and other significant assumptions to the discounted cash flow valuation methodology. |
Financing receivables, net | (l) Financing receivables, net The Company provides financial services to its network partners with credit terms generally ranging from three months to three years . Total outstanding financing receivables as of December 31, 2019 and 2020 were RMB1,060,899, and RMB2,462,499 respectively, among which RMB549,775 and RMB1,970,340 were recorded in long-term financing receivables. Such amounts are measured at amortized cost and reported in the consolidated balance sheets at the outstanding principal amount less allowance of credit losses . The accrued interest receivables are also included in financing receivables as of the balance sheet date. Allowance relating to financing receivables represents the Company's best estimate of the losses inherent in the outstanding portfolio of financing receivables. RMB4,139 and RMB9,159 of allowance relating to short-term financing receivables, and nil and RMB14,097 relating to long-term financing receivables were recorded as of December 31, 2018 and 2019, respectively. The related losses recorded in the Consolidated Statements of Comprehensive Income were RMB4,139 and RMB19,117 for the years ended December 31, 2018 and 2019, respectively. After the adoption of ASC 326 on January 1, 2020 using the modified retrospective transition method, the Company has developed a forward looking CECL model based on the conditions of collaterals and guarantees for financing receivables, historical experiences, credit quality of the borrowers, current economic conditions and the borrowers' operating results, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the borrowers. The cumulative effect from the adoption as of January 1, 2020 was immaterial to the consolidated financial statements. RMB7,104 of allowance of credit losses relating to short-term financing receivables, and RMB36,786 relating to long-term financing receivables were recorded as of December 31, 2020. The expected credit loss recognized was RMB20,635 for the year ended December 31, 2020. Interest income generated from the financing receivables was recorded as revenue in the amounts of RMB24,917, RMB70,228, and RMB125,963 for the years ended December 31, 2018, 2019 and 2020, respectively. |
Property and equipment, net | (m) 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 5-10 years Buildings 20 years |
Intangible assets | (n) 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. The useful life of customer relationship was estimated to be 10 years based on the nature of the customer base and average attrition rate. |
Investments in equity investees | (o) Investments in equity investees Investments in equity investees of the Company are comprised of investments in privately-held companies. The Company 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 Company records equity method adjustments in share of profits and losses. Equity method adjustments include the Company’s proportionate share of investee income or loss, 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 Company’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 Company’s cumulative equity in the investee's earnings are considered as a return of investment and classified as cash inflows from investing activities. The Company continually reviews equity method investments to determine whether a decline in fair value to below the carrying value is other-than-temporary. The primary factors the Company 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. |
Impairment of long-lived assets | (p) Impairment of long-lived assets The Company evaluates the recoverability of long-lived assets with determinable useful lives whenever events or changes in circumstances indicate that an asset's carrying amount may not be recoverable. 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 and significant assumptions such as future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and may differ from actual results. No impairment charge was recognized for the years ended December 31, 2018, 2019 and 2020. |
Goodwill | (q) 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 Company’s acquisitions, such as the expected benefit from synergies of the combination and the existing workforce of the acquired businesses. Unless circumstances otherwise indicate, goodwill is reviewed annually at December 31 for impairment. In evaluation of goodwill impairment, the Company 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. Prior to January 1, 2020, based on the qualitative assessment, if it is more likely than not that the fair value of each reporting unit is less than the carrying amount, the Company performed a two-step test to determine the amount of goodwill impairment. In Step 1, the Company compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, the Company performs Step 2 and compares the implied fair value of goodwill with the carrying amount of that goodwill for that reporting unit. An impairment charge equal to the amount by which the carrying amount of goodwill for the reporting unit exceeds the implied fair value of that goodwill is recorded, limited to the amount of goodwill allocated to that reporting unit. Starting from January 1, 2020, the Company adopted ASU 2017-04, which simplifies the accounting for goodwill impairment by eliminating Step 2 from the goodwill impairment test. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, versus determining an implied fair value in Step 2 to measure the impairment loss. The impairment test is performed as of year-end or if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount by comparing the fair value of a reporting unit with its carrying value. 2. Summary of Significant Accounting Policies (Continued) (q) Goodwill (Continued) The Company had two reporting units, the express delivery business and the freight forwarding business, for purposes of allocating and testing goodwill for the year ended December 31, 2018, 2019 and 2020. The Company conducted qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. In assessing the qualitative factors, the Company considered the impact of key factors such as changes in the general economic conditions including the impact of COVID-19, changes in industry and competitive environment, stock price, actual revenue performance compared to previous years, and cash flow generation. Based on the results of the qualitative assessment completed as of December 31, 2018 2019 and 2020, there were no indicators of impairment. Therefore, no impairment charge was recognized for the year ended December 31, 2018, 2019 and 2020. |
Share-based compensation | (r) Share based compensation The Company grants share options, ordinary share units and restricted 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. The Company elects to recognize forfeitures when they occur. When there is a modification of the terms and conditions of an award, the Company measures the pre-modification and post-modification fair value of the share based awards as of the modification date and recognizes the incremental value and the remaining unrecognized compensation expenses as compensation cost over the remaining service period. In determining the fair value of share options, ordinary share units and restricted share units, the closing market price of the underlying shares on the grant date is applied. |
Treasury shares | (s) Treasury shares Treasury shares represent ordinary shares repurchased by the Company that are no longer outstanding and are held by the Company. 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. At the date of subsequent reissuance, treasury stock is reduced by the cost of such stock on the first-in, first-out basis and realizes the gain (loss) on the reissuance of the shares in shareholders’ equity. The gain on the reissuance of treasury shares are credited to additional paid-in capital, and the loss on the reissuance of treasury shares are debited to additional paid-in capital to the extent previous net gains from sales or retirements of the same class of stock are included in additional paid-in capital with excess loss charged to retained earnings. |
Revenue recognition | (t) Revenue recognition The Company derives a 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 Company 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 Company also provides freight forwarding services to its customers. Revenues generated from express delivery services and freight forwarding services are recognized over time as the Company 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 Company expects to earn in exchange for the product. 2. Summary of Significant Accounting Policies (Continued) (t) Revenue recognition (continued) Disaggregation of revenue Year Ended December 31, 2018 2019 2020 RMB % RMB % RMB US$ % Express delivery services 15,400,080 87.5 19,606,214 88.7 21,900,201 3,356,353 86.9 Freight forwarding services 1,278,741 7.3 1,235,961 5.6 1,862,689 285,470 7.4 Sale of accessories 812,866 4.6 1,089,977 4.9 1,133,712 173,749 4.5 Others 112,764 0.6 177,794 0.8 317,688 48,687 1.2 Total revenues 17,604,451 100.0 22,109,946 100.0 25,214,290 3,864,259 100.0 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. The customer generally contracts with the Company for distinct services. Substantially all of the Company's service contracts include only one performance obligation, the express delivery or freight forwarding services. However, if a contract contains more than one performance obligation, the Company 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. In these instances, as the Company frequently sells standard express delivery services and freight forwarding services with observable standalone sales prices, the observable standalone sales are used to determine the standalone selling prices of express delivery services and freight forwarding services. Satisfaction of performance obligations The Company generally recognizes revenue over time as the Company performs the services stipulated 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. That is, if the Company was unable to complete the delivery, the service that was already performed by the Company would not need to be reperformed. As such, revenue is recognized based on the extent of progress towards completion of the performance obligation. It normally takes one to seven days for the Company to complete the performance obligation. Variable consideration The Company provides customers with certain volume-based incentives in relation to express delivery services, which represent variable considerations and are recorded as reductions to the related revenue. The Company estimates the variable considerations in the most likely amounts it expects to earn. As the incentives are generally determined on a monthly basis, the uncertainty in estimating the variable considerations to be recorded is very limited. Principal vs. agent considerations In its express delivery services provided to pickup outlets, the Company utilizes delivery outlets operated by its network partners to perform the dispatching services. The Company only fulfills parcel sorting and line-haul transportation services. U.S. GAAP requires the Company to use a control-model approach to evaluate whether the Company performs services directly to the customers (as a principal) or arranges for services to be provided by another party (as an agent). Based on an evaluation of the control model, the Company has determined that it acts as a principal in providing sorting and line haul transportation services to the pickup outlets as the Company is primarily responsible for the delivery of parcels between sorting hubs and has the ability to control the related services. The Company acts as an agent for dispatching services as it arranges for such services to be provided by the delivery outlets. Therefore, the revenue is recorded net of the dispatching fees paid to the delivery outlets. 2. Summary of Significant Accounting Policies (Continued) (t) Revenue recognition (continued) The Company also provides express delivery services to certain enterprise customers. According to the contracts with the enterprise customers, the Company is primarily responsible for and has control over the entire delivery process including the dispatching services. Therefore, the Company has determined that it acts as a principal for all the express delivery services provided to enterprise customers and accordingly, the revenue is recorded on a gross basis, including the dispatching fees paid to the delivery outlets. Contract assets and liabilities Contract assets include billed and unbilled receivables resulting from in-transit parcels, which were recorded in accounts receivable and not material as of December 31, 2019 and 2020. Contract liabilities consist of advance payments as well as deferred revenue, which were recorded in advances from customers and not material as of December 31, 2019 and 2020. Practical expedients and exemptions The Company elects not to disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less (ii) contracts for which the Company recognizes revenues at the amount which it has the right to invoice for services performed and (iii) contracts with variable consideration related to wholly unsatisfied performance obligations. |
Cost of revenues | (u) Cost of revenues Cost of revenues mainly consists of the following: ● line-haul transportation costs, including payments to outsourced transportation companies, as well as costs associated with the Company’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, ● cost of accessories including portable barcode readers, thermal papers and packaging materials, and ● cost of freight forwarding services, including cost of line-haul transportation and cargo handling costs. |
Income taxes | (v) Income taxes As part of the process of preparing financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. The Company 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 losses are carried forward 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 Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. |
Comprehensive income | (w) Comprehensive income Comprehensive income is defined to include all changes in equity from transactions and other events and circumstances excluding transactions resulting from investments by shareholders and distributions to shareholders. For the years presented, the Company’s comprehensive income includes net income and foreign currency translation adjustments and is presented in the consolidated statements of comprehensive income. |
Leased assets | (x) Leased assets As a lessee The Company leases office space, sorting hubs and warehouse facilities in different cities in PRC under operating leases. Effective January 1, 2019, the Company adopted ASU No. 2016-02 "Leases" (ASC 842) using the modified retrospective approach. The Company elected the transition package of practical expedients permitted within the standard, which allowed it not to reassess initial direct costs, lease classification, or whether the contracts contain or are leases for any leases that existed prior to January 1, 2019. Upon the adoption, the Company recognized operating lease right of use ("ROU") assets of RMB844,331, with corresponding lease liabilities of RMB767,694 on the consolidated balance sheets. The operating lease ROU assets include adjustments for prepayments and accrued lease payments. The adoption did not impact the Company's beginning retained earnings, or the Company's prior year financial statements. Under ASC 842, the Company determines whether an arrangement constitutes a lease and records lease liabilities and right-of-use assets on its consolidated balance sheets at the lease commencement. The Company measures the operating lease liabilities at the commencement date based on the present value of remaining lease payments over the lease term, which was computed using the Company's incremental borrowing rate, an estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the lease term. The Company measures the operating lease ROU assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing operating lease expense based on lease payments on a straight-line basis over the lease term when the lessor makes the underlying asset available to the Company. Some of the Company's lease contracts include options to extend the leases for an additional period which has to be agreed with the lessors based on mutual negotiation. After considering the factors that create an economic incentive, the Company does not include renewal option periods in the lease term for which it is not reasonably certain to exercise. The carrying amount of lease liabilities is remeasured if there is a modification, e.g. a change in the lease term or a change in the in-substance fixed lease payments. The Company determines its land use right agreements contain operating leases of land under ASC 842. However, this determination does not result in any changes to the accounting for land use rights as the cost for land use rights are fully prepaid and no liabilities would be recorded. As a lessor The Company's lessor arrangements include operating leases of land and buildings to its network partners. Under ASC 842, lessors account for operating leases in a manner similar to how they account for operating leases under ASC 840. The Company continues to recognize the underlying assets and records the lease payments as income over the lease term on a straight-line basis. |
Concentration credit risk | (y) Concentration of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable, financing receivables, short-term investment, advances to suppliers, long-term investment and long-term financing receivables. The Company places its cash and cash equivalents, short-term investment and long-term investment with financial institutions with high-credit ratings and quality. Accounts receivable primarily comprise amounts receivable from enterprise customers. Financing receivables primarily comprise financing receivables from network partners. The Company performs on-going credit evaluations of the financial condition of its counter parties and establishes an allowance for credit losses estimated based on factors surrounding the credit risk of specific entities and other relevant information. The allowance amounts were immaterial for all the periods presented. |
Earnings per share | (z) 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 years. 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 of diluted earnings per ordinary share if their effects would be anti-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. |
Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Effective | (aa) Adoption of new accounting standards 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 provide more transparency and information to financial statement users about the Company'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 consolidated financial statements for the years ended December 31, 2019 and 2020 are presented under the new standard. See Note 6 for additional disclosures required by this ASU. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326)," which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. The Company adopted ASC 326 and related ASUs effective January 1, 2020 using the modified retrospective transition method. The adoption and application of this standard did not have a material impact to the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, "Intangibles—Goodwill and Other (Topic 350): simplifying the test for goodwill impairment," the guidance removes step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment now is the amount by which a reporting unit's carrying value exceeds its fair value, not the difference between the fair value and carrying amount of goodwill which was the step 2 test before. The Company adopted ASU 2017-04 and related ASUs effective January 1, 2020. The adoption and application of this standard did not have a material impact to the consolidated financial statements. 2. Summary of Significant Accounting Policies (Continued) (ab) Accounting standards issued but not yet effective In December 2019, the FASB issued ASU 2019-12 to simplify the accounting for income taxes. The update removes certain exceptions to the general income tax principles. This ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company does not expect this ASU to have a material impact on the consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 ("ASU 2020-01") to clarify the interaction in accounting for equity securities under Topic 321, investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. ASU 2020-01 is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company does not expect this ASU to have a material impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of DCN/DCD and derivative instruments measured and recorded at fair value | Fair Value Measurement As of December 31, 2020 Quoted Prices in Significant Significant Active Market for Other Unobservable Identical Assets Observable Inputs Inputs (Level 1) (Level 2) (Level 3) Total RMB RMB RMB RMB Short-term investments DCN/DCD — 1,693,843 — 1,693,843 Derivative assets recorded within prepayments and other current assets Foreign exchange forward contracts — 1,855 — 1,855 Derivative liabilities recorded within other current liabilities Foreign exchange option contracts — 317 — 317 |
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 5-10 years Buildings 20 years |
Disaggregation of revenue | Year Ended December 31, 2018 2019 2020 RMB % RMB % RMB US$ % Express delivery services 15,400,080 87.5 19,606,214 88.7 21,900,201 3,356,353 86.9 Freight forwarding services 1,278,741 7.3 1,235,961 5.6 1,862,689 285,470 7.4 Sale of accessories 812,866 4.6 1,089,977 4.9 1,133,712 173,749 4.5 Others 112,764 0.6 177,794 0.8 317,688 48,687 1.2 Total revenues 17,604,451 100.0 22,109,946 100.0 25,214,290 3,864,259 100.0 |
ZTO Express and its subsidiaries (the "VIE") | |
Schedule of financial statements after elimination of intercompany balances and transactions | As of December 31, 2019 2020 RMB RMB Assets Current assets: Cash and cash equivalents 528,722 776,725 Accounts receivable, net 635,606 514,666 Financing receivables, net 172,267 341,486 Inventories 42,134 42,775 Advances to suppliers 46,534 45,621 Prepayments and other current assets 1,241,975 1,153,077 Amounts due from related parties 18,364 34,034 Total current assets 2,685,602 2,908,384 Investments in equity investees 114,447 110,570 Property and equipment, net 5,920,211 6,025,153 Land use rights, net 1,150,849 1,138,849 Operating lease right-of-use assets 853,092 834,984 Goodwill 4,157,111 4,157,111 Deferred tax assets 234,080 514,532 Long-term financing receivables, net 536,473 1,784,990 Other non-current assets 120,877 99,456 TOTAL ASSETS 15,772,742 17,574,029 Liabilities Current liabilities: Short-term bank borrowings — 1,432,929 Accounts payable 1,448,490 1,155,069 Notes payable — 158,138 Advances from customers 1,185,920 1,068,927 Income tax payable 9,359 250,726 Amounts due to related parties 769,951 620,490 Operating lease liabilities, current 273,524 234,071 Other current liabilities 2,536,131 2,594,801 Total current liabilities 6,223,375 7,515,151 Non-current operating lease liabilities 478,327 468,127 Deferred tax liabilities 123,173 127,816 TOTAL LIABILITIES 6,824,875 8,111,094 Year ended December 31, 2018 2019 2020 RMB RMB RMB Total revenue 17,127,930 21,465,515 23,734,103 Net income 720,323 841,707 478,168 Net cash generated from (used in) operating activities 436,074 1,783,718 (537,756) Net cash used in investing activities (777,197) (1,831,001) (647,170) Net cash provided by (used in) financing activities (206,260) — 1,432,929 Net increase (decrease) in cash and cash equivalents (547,383) (47,283) 248,003 Cash and cash equivalents and restricted cash at beginning of year 1,123,388 576,005 528,722 Cash and cash equivalents and restricted cash at end of year 576,005 528,722 776,725 |
Prepayments and Other Current_2
Prepayments and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepayments and Other Current Assets | |
Schedule of prepayments and other current assets | As of December 31, 2019 2020 RMB RMB Input value added tax ("VAT") 1,386,004 1,698,506 Prepaid expenses 80,388 111,420 Accrued interest income 150,157 71,855 Deposits 55,277 76,665 Others 292,680 376,242 Total 1,964,506 2,334,688 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property and Equipment, net | |
Schedule of property and equipment, net | As of December 31, 2019 2020 RMB RMB Buildings 5,594,482 6,940,154 Machinery and equipment 3,778,753 5,055,601 Leasehold improvements 432,236 599,300 Vehicles 3,367,428 5,591,138 Furniture, office and electric equipment 462,842 619,007 Construction in progress 1,685,622 4,312,932 Total 15,321,363 23,118,132 Accumulated depreciation (2,850,731) (4,552,971) Property and equipment, net 12,470,632 18,565,161 |
Land Use Rights, Net (Tables)
Land Use Rights, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Land Use Rights, Net. | |
Schedule of land use rights are amortized using straight-line method | As of December 31, 2019 2020 RMB RMB Cost 2,681,762 4,609,201 Less: Accumulated amortization (172,902) (248,528) Land use rights, net 2,508,860 4,360,673 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Operating Leases | |
Schedule of Supplemental information related to leases | As of December 31, As of December 31, 2019 2020 RMB RMB Operating lease right-of-use assets 901,956 876,259 Current operating lease liabilities 298,728 246,394 Non-current operating lease liabilities 504,442 502,481 Total operating lease liabilities 803,170 748,875 Weighted average remaining lease term (in years) 6 5 Weighted average discount rate 4.36 % 4.27 % |
Schedule of Supplemental cash flow information related to leases | Year ended Year ended December 31, December 31, 2019 2020 RMB RMB Cash paid for amounts included in measurement of liabilities: Operating cash flows from operating leases 322,857 389,696 Right-of-use assets obtained in exchange for lease liabilities: Operating leases 499,124 343,411 Right-of-use assets decreased due to lease modifications: Operating leases 168,380 48,558 |
Schedule of Maturities of lease liabilities | As of As of December 31, 2019 December 31, 2020 RMB RMB Within one year 285,743 257,009 Within a period of more than one year but not more than two years 196,902 163,774 Within a period of more than two year but not more than three years 105,055 100,435 Within a period of more than three year but not more than four years 82,610 105,527 Within a period of more than four year but not more than five years 50,415 64,430 Within a period of more than five year 184,470 148,254 Total lease commitment 905,195 839,429 Less: Imputed interest (102,025) (90,554) Total operating lease liabilities 803,170 748,875 Less: Current operating lease liabilities (298,728) (246,394) Long-term operating lease liabilities 504,442 502,481 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill | |
Schedule of changes in carrying amount of goodwill | Express Freight Total Delivery Forwarding Amount RMB RMB RMB Balance at December 31, 2019 and 2020 4,157,111 84,430 4,241,541 |
Investments in equity investe_2
Investments in equity investees (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Investments in equity investees | |
Schedule of investments in equity investees | As of December 31, 2019 2020 RMB RMB Investments accounted for under equity method: ZTO Supply Chain Management Co., Ltd. (“ZTO LTL”) (1) 206,986 63,224 Feng Wang Investment Co., Ltd. ("Feng Wang") (2) 51,068 49,165 Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") (3) 29,652 24,045 Others 83,605 106,516 Total investments accounted for under the equity method 371,311 242,950 Investments accounted for as equity investments without readily determinable fair values: Cai Niao Smart Logistics Network Limited ("Cai Niao") (4) 1,122,218 1,049,893 Zhejiang Yizhan Network Technology Co., Ltd. (“Cainiao Post”) (4) 1,075,000 1,075,000 Zhijiang New Industries Limited (“ZJ New Industries”) (4) 500,000 500,000 ZTO Supply Chain Management Co., Ltd. (“ZTO LTL”) (1) — 218,275 Others 40,965 138,345 Total investments accounted for equity investments without readily determinable fair values 2,738,183 2,981,513 Total investments in equity investees 3,109,494 3,224,463 (1) ZTO LTL On August 22, 2016, the Company entered into an investment agreement with ZTO LTL and Mr. Jianfa Lai to invest cash of RMB54,000 in exchange of 18% ordinary shares 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 Company. Owing to the shareholders' structure of ZTO LTL, the Company has significant influence over ZTO LTL's operating activities. Therefore, the investment is accounted for using the equity method. In August 2017, the Company increased investment in ZTO LTL by RMB36,000 to maintain its equity interest 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 Company held 18% equity in ZTO Freight after the restructuring. The Company's equity interest decreased to 17.7% after a round of preferred share financing in 2018 due to additional capital contributions from other shareholders and the Company invested in ZTO Freight's Series A preferred share with US$19,000 (approximate to RMB130,150 ). In May 2020, the Company invested in ZTO Freight's Series A+ preferred share with US$12,715 (approximate to RMB90,243) and its equity interest further decreased to 17.3% due to additional capital contributions from other shareholders. The Company reconsidered, upon the capital structure change after the Series A+ financing, the characteristics of all preferred share investments held in ZTO Freight and determined the preferred share investments are not in substance common stock due to the substantive liquidation preference and therefore are accounted as equity investments without readily determinable fair values. 8. Investments in equity investees (Continued) (2) Feng Wang In December 2013, the Company 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 made by the Company was RMB50,000 in cash, representing 25% of the equity interest of Feng Wang. In 2015, the Company’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 Company 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, for developing the clean energy vehicles used in the express and logistics industries. The capital contribution made by the Company was RMB30,000, representing 15% equity interest of CRRC. The Company has one board seat out of seven, and has significant influence over CRRC’s operating activities. Therefore, the investment is accounted for using the equity method. (4) Investments accounted for as equity investments without readily determinable fair values In May 2013, the Company obtained equity interests in 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. During the fourth quarter of 2019, the Company further invested RMB150,485 in Cai Niao in connection with a new round of financing completed in 2019, which represented an observable price change in an orderly transaction for Cai Niao equity interest and resulted in an unrealized gain of RMB754,468 recorded in other income (expense) in the consolidated statement of comprehensive income for the year ended December 31, 2019. |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Intangible Assets, Net | |
Schedule of intangible assets, net | As of December 31, 2019 2020 RMB RMB Customer relationships 61,973 61,973 Less: accumulated amortization (13,944) (20,141) Customer relationships, net 48,029 41,832 |
Schedule of estimated amortization expenses for each of five succeeding fiscal years | Years ended December 31, RMB 2021 6,197 2022 6,197 2023 6,197 2024 6,197 2025 6,197 2026 and after 10,847 Total 41,832 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Current Liabilities | |
Schedule of other current liabilities | As of December 31, 2019 2020 RMB RMB Payables related to property and equipment 1,076,935 1,319,693 Deposits from network partners(1) 925,925 930,147 Salary and welfare payable 838,527 924,383 Payables to individual couriers(2) — 448,158 Construction deposits 55,832 86,043 Payables to network partners(3) 260,228 262,537 Accrued expenses 84,274 222,642 Others 310,567 293,481 Total 3,552,288 4,487,084 (1) Amount primarily represents the waybill deposits collected from the pickup outlets operated by network partners. The deposits will be refunded when the parcels are delivered to the recipients. (2) Payables to individual couriers represent the amount to be paid by the Company to individual couriers on behalf of its network partners for their last mile dispatch. (3) Payables to network partners represent the amount collected by the Company on behalf of its network partners in the provision of express delivery services. |
Short-term Bank Borrowings (Tab
Short-term Bank Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Short-term Bank Borrowings | |
Schedule of Short-term bank borrowings | 2019 2020 RMB RMB PRC domestic commercial banks — 1,432,929 |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Noncontrolling Interest | |
Schedule of Noncontrolling Interest | Year ended December 31, 2018 2019 2020 RMB RMB RMB Net income attributable to ZTO Express (Cayman) Inc. 4,383,025 5,674,145 4,312,213 Transfers from/(to) noncontrolling interest Increase in ZTO's paid in capital for capital contribution from noncontrolling interest shareholder 23,740 — 807 Decrease in ZTO's paid in capital for purchase shares of the Company's subsidiaries — — (17,129) Net transfers from/(to) noncontrolling interest 23,740 — (16,322) Change from net income attribute to ZTO and transfers from/(to) noncontrolling interest 4,406,765 5,674,145 4,295,891 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax | |
Schedule of current and deferred portion of income tax expenses | Year ended December 31, 2018 2019 2020 RMB RMB RMB Current tax expenses 1,068,214 1,118,822 961,802 Deferred tax (139,081) (40,527) (271,969) Total 929,133 1,078,295 689,833 |
Schedule of reconciliations of differences between PRC statutory income tax rate and effective income tax rate | Year ended December 31, 2018 2019 2020 RMB RMB RMB Statutory income tax rate 25.00 % 25.00 % 25.00 % Preferential tax rates (7.36) % (6.26) % (6.70) % R&D super deduction (0.61) % (0.96) % (1.87) % Non-deductible expenses 1.41 % 1.48 % 1.70 % Non-taxable income (0.24) % — (0.03) % Different tax rates of operations in other jurisdictions (0.74) % (3.34) % (0.42) % Valuation allowance on deferred tax assets — — 0.07 % True up (1) (0.05) % 0.04 % (4.05) % 17.41 % 15.96 % 13.70 % Note (1): WFOE applied for the Key Software Enterprise status in early 2020. After the approval by the relevant tax authority in September 2020, WFOE was entitled to a preferential tax rate of 10% retroactively for the year ended December 31, 2019, resulting in an income tax expense decrease of RMB200,683 for the year ended December 31, 2020. |
Schedule of effect of the tax holiday on the income per share | As of December 31, 2018 2019 2020 RMB RMB RMB Tax saving amount due to preferential tax rates 392,761 422,996 538,014 Income per share effect- basic 0.52 0.54 0.68 Income per share effect- diluted 0.52 0.54 0.68 |
Schedule of components of deferred income tax assets and liabilities | As of December 31, 2019 2020 RMB RMB Deferred tax assets: Accrued payroll and expense 131,007 139,153 Net loss carryforward 159,969 461,305 Financial subsidy 31,916 6,266 Depreciation for property and equipment 47,433 74,429 Unrealized gain from intragroup transactions 20,467 32,160 Provision for allowance for credit losses 12,795 14,903 Total deferred tax assets 403,587 728,216 Valuation allowance on deferred tax assets — (7,655) Total deferred tax assets 403,587 720,561 Deferred tax liabilities: Difference in basis of land use rights (145,477) (141,960) Unrealized investment gain — (900) Difference in basis of fixed assets (54,471) (105,202) Difference in basis of intangible assets (7,948) (6,925) Total deferred tax liabilities (207,896) (254,987) |
Share Based Compensation (Table
Share Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share Based Compensation | |
Schedule 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 RMB Non-Vested at January 1, 2020 283,886 88.59 Granted 785,097 177.44 Less: forfeited 31,250 88.59 Less: vested 1,037,733 155.81 Non-Vested at December 31, 2020 — — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share | |
Schedule of basic and diluted earnings per share | Year ended December 31, 2018 2019 2020 RMB RMB RMB Numerator: Net income attributable to ordinary shareholders in computing basic and diluted earnings per share 4,383,025 5,674,145 4,312,213 Shares (Denominator): Weight average ordinary shares outstanding—basic 751,814,077 784,007,583 796,097,532 Plus: Shares for option 19,376 — — Shares for ordinary share units and restricted share units 839,503 323,537 49,972 Weight average ordinary shares outstanding—diluted 752,672,956 784,331,120 796,147,504 Earnings per share—basic 5.83 7.24 5.42 Earnings per share—diluted 5.82 7.23 5.42 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions | |
Schedule of major related party and their relationships | Name of related parties Relationship with the Company Tonglu Tongze Logistics Ltd. and its subsidiaries Majority equity interests held by the employees of the Company Shanghai Mingyu Barcode Technology Ltd. Controlled by brother of chairman of the Company Shanghai Kuaibao Network Technology Ltd. The Company’s equity investee ZTO Lianshang Technology Co., Ltd. and its subsidiaries The Company’s equity investee ZTO Supply Chain Management Co., Ltd. and its subsidiaries The Company’s equity investee ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries The Company’s equity investee Hangzhou Tonglu Hengze Investment Co., Ltd. Controlled by vice president of the Company Ningbo Haitaotong International Logistics Co., Ltd. The Company’s equity investee Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd Controlled by chairman of the Company Youmi Technology (Zhejiang) Co., Ltd. The Company’s equity investee ZTO ES Holding Limited Entity controlled by chairman of the Company |
Schedule of transactions with related parties | Transactions Year ended December 31, 2018 2019 2020 RMB RMB RMB Revenues: Transportation revenue from ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries — 32,699 45,286 Advertisement revenue from Youmi Technology (Zhejiang) Co., Ltd. — — 2,170 Transportation revenue from ZTO Lianshang Technology Co., Ltd. and its subsidiaries — 14 484 Advertisement revenue from Shanghai Kuaibao Network Technology Ltd. — 2,936 119 Transportation revenue from Ningbo Haitaotong International Logistics Co., Ltd. — 717 1,299 — 36,366 49,358 Cost of revenues: Transportation service fees paid to Tonglu Tongze Logistics Ltd. and its subsidiaries 547,500 479,124 331,288 Transportation service fees paid to ZTO Supply Chain Management Co., Ltd. and its subsidiaries 40,280 63,808 47,491 Purchases of supplies from Shanghai Mingyu Barcode Technology Ltd. 90,051 212,513 197,302 677,831 755,445 576,081 Other operating income: Rental income from ZTO Supply Chain Management Co., Ltd. and its subsidiaries 11,103 17,979 28,720 Rental income from ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries — 9,739 17,215 Rental income from ZTO Lianshang Technology Co., Ltd. and its subsidiaries — — 899 Rental income from Youmi Technology (Zhejiang) Co., Ltd. — — 100 11,103 27,718 46,934 Other income: Gain on disposal of subsidiary from ZTO Lianshang Technology Co., Ltd. and its subsidiaries 12,904 — — Interest income related to financing receivables from ZTO Lianshang Technology — 963 826 Interest income related to financing receivables from ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries — — 21 12,904 963 847 |
Schedule of amounts due to related parties | As of December 31, 2019 2020 RMB RMB Amounts due to related parties Tonglu Tongze Logistics Ltd. and its subsidiaries 20,655 — Shanghai Mingyu Barcode Technology Ltd. 16,906 16,652 ZTO Supply Chain Management Co., Ltd. and its subsidiaries 1,165 — Others 217 3 Total 38,943 16,655 |
Schedule of amounts due from related parties | As of December 31, 2019 2020 RMB RMB Amounts due from related parties ZTO Cloud Warehouse Technology Co., Ltd. and its subsidiaries (1) 37,266 44,875 Tonglu Tongze Logistics Ltd. and its subsidiaries — 9,220 ZTO Supply Chain Management Co., Ltd. — 5,680 Youmi Technology (Zhejiang) Co., Ltd. — 5,767 ZTO Lianshang Technology Co., Ltd. and its subsidiaries (2) 20,221 1,011 Hangzhou Tonglu Hengze Investment Co., Ltd. (3) 10,000 — Shanghai Kuaibao Network Technology Ltd. (3) 6,512 6,600 Others 313 125 Total 74,312 73,278 Amounts due from related parties-non current Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd (4) — 500,000 Total — 500,000 (1) The amount comprised loan to related parties with no interest bearing and accounts receivable generated from the transportation service provided by the Company. (2) Mainly comprised financing receivable from ZTO Lianshang Technology Co., Ltd. and its subsidiaries, refer to Note 17(a). (3) Amounts due from related parties were loans to related parties with no interest bearing. (4) The amount comprised a three-year loan to this related party with 7.2% annualized interest rate. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Consolidated VIE Schedule (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | |
Current assets: | ||||||
Cash and cash equivalents | ¥ 14,212,778 | ¥ 5,270,204 | ¥ 4,622,554 | $ 2,178,204 | ||
Accounts receivable, net | 746,013 | 675,567 | 114,331 | |||
Financing receivables, net | 2,462,499 | 1,060,899 | ||||
Inventories | 53,070 | 43,845 | 8,133 | |||
Advances to suppliers | 589,042 | 438,272 | 90,275 | |||
Prepayments and other current assets | 2,334,688 | 1,964,506 | 357,805 | |||
Amounts due from related parties | 73,278 | 74,312 | 11,230 | |||
Total current assets | 22,324,626 | 20,098,257 | 3,421,397 | |||
Investments in equity investees | 1,842,000 | 946,180 | 282,299 | |||
Property and equipment, net | 18,565,161 | 12,470,632 | 2,845,235 | |||
Land use rights, net | 4,360,673 | 2,508,860 | 668,302 | |||
Operating lease right-of-use assets | 876,259 | 901,956 | 134,293 | |||
Goodwill | 4,241,541 | 4,241,541 | 650,045 | |||
Deferred tax assets | 720,561 | 403,587 | 110,431 | |||
Long-term financing receivables, net | 1,970,340 | 549,775 | 301,968 | |||
Other non-current assets | 537,294 | 612,191 | 82,344 | |||
TOTAL ASSETS | 59,204,750 | 45,890,502 | 9,073,524 | |||
Current liabilities: | ||||||
Short-term bank borrowings | 1,432,929 | 219,606 | ||||
Accounts payable | 1,635,888 | 1,475,258 | 250,711 | |||
Notes payable | 326,200 | 49,992 | ||||
Advances from customers | 1,119,666 | 1,210,887 | 171,596 | |||
Income tax payable | 48,628 | 80,272 | 7,453 | |||
Amounts due to related parties | 16,655 | 38,943 | 2,552 | |||
Operating lease liabilities, current | 246,394 | 298,728 | 37,762 | |||
Other current liabilities | 4,487,084 | 3,552,288 | 687,676 | |||
Total current liabilities | 9,347,584 | 6,680,947 | 1,432,580 | |||
Non- current operating lease liabilities | 502,481 | 504,442 | 77,008 | |||
Deferred tax liabilities | 254,987 | 207,896 | 39,078 | |||
TOTAL LIABILITIES | 10,105,052 | 7,487,105 | $ 1,548,666 | |||
Total revenue | 25,214,290 | $ 3,864,259 | 22,109,946 | 17,604,451 | ||
Net income | 4,326,446 | 663,057 | 5,671,267 | 4,387,912 | ||
Net cash generated from (used in) operating activities | 4,950,749 | 758,735 | 6,304,186 | 4,404,051 | ||
Net cash used in investing activities | (3,549,341) | (543,960) | (3,664,213) | (12,872,633) | ||
Net cash provided by (used in) financing activities | 8,337,407 | 1,277,764 | (1,982,306) | 7,042,122 | ||
Net increase (decrease) in cash and cash equivalents | 9,082,678 | 1,391,981 | 654,460 | (1,150,780) | ||
Cash, cash equivalents and restricted cash at beginning of year | 5,277,414 | 808,799 | 4,622,954 | 5,773,734 | ||
Cash, cash equivalents and restricted cash at end of year | 14,360,092 | $ 2,200,780 | 5,277,414 | $ 808,799 | 4,622,954 | |
Net income generated by VIE after deductions of inter-company transportation fees and Service fees charges | 11,519,214 | 9,420,012 | 7,776,622 | |||
Operating cash outflows of Inter-company transactions | 11,646,387 | 9,248,582 | 7,593,448 | |||
ZTO Express and its subsidiaries (the "VIE") | ||||||
Current assets: | ||||||
Cash and cash equivalents | 776,725 | 528,722 | ||||
Accounts receivable, net | 514,666 | 635,606 | ||||
Financing receivables, net | 341,486 | 172,267 | ||||
Inventories | 42,775 | 42,134 | ||||
Advances to suppliers | 45,621 | 46,534 | ||||
Prepayments and other current assets | 1,153,077 | 1,241,975 | ||||
Amounts due from related parties | 34,034 | 18,364 | ||||
Total current assets | 2,908,384 | 2,685,602 | ||||
Investments in equity investees | 110,570 | 114,447 | ||||
Property and equipment, net | 6,025,153 | 5,920,211 | ||||
Land use rights, net | 1,138,849 | 1,150,849 | ||||
Operating lease right-of-use assets | 834,984 | 853,092 | ||||
Goodwill | 4,157,111 | 4,157,111 | ||||
Deferred tax assets | 514,532 | 234,080 | ||||
Long-term financing receivables, net | 1,784,990 | 536,473 | ||||
Other non-current assets | 99,456 | 120,877 | ||||
TOTAL ASSETS | 17,574,029 | 15,772,742 | ||||
Current liabilities: | ||||||
Short-term bank borrowings | 1,432,929 | |||||
Accounts payable | 1,155,069 | 1,448,490 | ||||
Notes payable | 158,138 | |||||
Advances from customers | 1,068,927 | 1,185,920 | ||||
Income tax payable | 250,726 | 9,359 | ||||
Amounts due to related parties | 620,490 | 769,951 | ||||
Operating lease liabilities, current | 234,071 | 273,524 | ||||
Other current liabilities | 2,594,801 | 2,536,131 | ||||
Total current liabilities | 7,515,151 | 6,223,375 | ||||
Non- current operating lease liabilities | 468,127 | 478,327 | ||||
Deferred tax liabilities | 127,816 | 123,173 | ||||
TOTAL LIABILITIES | 8,111,094 | 6,824,875 | ||||
Total revenue | 23,734,103 | 21,465,515 | 17,127,930 | |||
Net income | 478,168 | 841,707 | 720,323 | |||
Net cash generated from (used in) operating activities | (537,756) | 1,783,718 | 436,074 | |||
Net cash used in investing activities | (647,170) | (1,831,001) | (777,197) | |||
Net cash provided by (used in) financing activities | 1,432,929 | (206,260) | ||||
Net increase (decrease) in cash and cash equivalents | 248,003 | (47,283) | (547,383) | |||
Cash, cash equivalents and restricted cash at beginning of year | 528,722 | 576,005 | 1,123,388 | |||
Cash, cash equivalents and restricted cash at end of year | ¥ 776,725 | ¥ 528,722 | ¥ 576,005 | |||
VIE revenues as a percentage to consolidated revenues | 94.10% | 94.10% | 97.10% | 97.10% | 97.30% | |
VIE assets as a percentage to consolidated assets | 29.70% | 34.40% | 29.70% | |||
VIE liabilities as a percentage to consolidated liabilities | 74.30% | 81.40% | 74.30% | |||
Amount due to related party | ¥ 603,835 | ¥ 731,008 | ||||
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 - Convenience translation (Details) | Dec. 31, 2020$ / ¥ |
Convenience translation | |
Convenience translation rate | 6.5250 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Short-term and long-term investment (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Short-term investment | |||
Short-term investment used as a collateral to issue of bank acceptance draft | ¥ 334,000 | ||
Interest income | 329,812 | ¥ 432,566 | ¥ 307,084 |
Fair value change loss of investments | ¥ 2,948 | ¥ 0 | ¥ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Foreign exchange options and forward contracts (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2020CNY (¥) | |
Summary of Significant Accounting Policies | |
Fair value change gain from foreign exchange options and forward contracts | ¥ 2,071 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Fair value (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
DCN/DCD | ¥ 1,693,843 | ||
Foreign exchange forward contracts | 1,855 | ||
Foreign exchange option contracts | 317 | ||
Fair value | |||
Unrealized gain from investment in equity investee | ¥ 754,468 | ||
Impairment of equity method investments | 0 | 0 | ¥ 0 |
Impairment losses related to equity investments without readily determinable fair values | 0 | ¥ 56,026 | ¥ 0 |
Quoted prices in active markets for identical assets (Level 1) | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
DCN/DCD | 0 | ||
Foreign exchange forward contracts | 0 | ||
Foreign exchange option contracts | 0 | ||
Significant other observable inputs (Level 2) | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
DCN/DCD | 1,693,843 | ||
Foreign exchange forward contracts | 1,855 | ||
Foreign exchange option contracts | 317 | ||
Significant unobservable inputs (Level 3) | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
DCN/DCD | 0 | ||
Foreign exchange forward contracts | 0 | ||
Foreign exchange option contracts | ¥ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Financing Receivables (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Financing receivables | |||
Allowance for doubtful accounts relating to financing receivables | ¥ 7,104 | ¥ 9,159 | ¥ 4,139 |
Loss pertaining to finance receivables | 20,635 | 19,117 | 4,139 |
Outstanding financing receivable | 2,462,499 | 1,060,899 | |
Interest income generated from financing receivables | 125,963 | 70,228 | 24,917 |
Other non-current assets | |||
Financing receivables | |||
Allowance for doubtful accounts relating to financing receivables | 36,786 | 14,097 | ¥ 0 |
Outstanding financing receivable | ¥ 1,970,340 | ¥ 549,775 | |
Minimum | |||
Financing receivables | |||
Credit term for financing services | 3 months | ||
Maximum | |||
Financing receivables | |||
Credit term for financing services | 3 years |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Property and equipment, net (Details) | 12 Months Ended |
Dec. 31, 2020 | |
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 | Minimum | |
Property and equipment, net | |
Useful life | 5 years |
Vehicles | Maximum | |
Property and equipment, net | |
Useful life | 10 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, 2020 | |
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) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Revenue recognition | ||||
Total revenue | ¥ 25,214,290 | $ 3,864,259 | ¥ 22,109,946 | ¥ 17,604,451 |
Revenue (in percent) | 100.00% | 100.00% | 100.00% | 100.00% |
Express delivery services | ||||
Revenue recognition | ||||
Total revenue | ¥ 21,900,201 | $ 3,356,353 | ¥ 19,606,214 | ¥ 15,400,080 |
Revenue (in percent) | 86.90% | 86.90% | 88.70% | 87.50% |
Freight forwarding services | ||||
Revenue recognition | ||||
Total revenue | ¥ 1,862,689 | $ 285,470 | ¥ 1,235,961 | ¥ 1,278,741 |
Revenue (in percent) | 7.40% | 7.40% | 5.60% | 7.30% |
Sale of accessories | ||||
Revenue recognition | ||||
Total revenue | ¥ 1,133,712 | $ 173,749 | ¥ 1,089,977 | ¥ 812,866 |
Revenue (in percent) | 4.50% | 4.50% | 4.90% | 4.60% |
Others | ||||
Revenue recognition | ||||
Total revenue | ¥ 317,688 | $ 48,687 | ¥ 177,794 | ¥ 112,764 |
Revenue (in percent) | 1.20% | 1.20% | 0.80% | 0.60% |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Leased assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Jan. 01, 2019CNY (¥) |
Leased assets | ||||
Lease liability | ¥ 748,875 | ¥ 803,170 | ||
Right-of-use asset | ¥ 876,259 | $ 134,293 | ¥ 901,956 | |
Accounting Standards Update 2016-02 | ||||
Leased assets | ||||
Lease liability | ¥ 767,694 | |||
Right-of-use asset | ¥ 844,331 |
Prepayments and Other Current_3
Prepayments and Other Current Assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Prepayments and Other Current Assets | |||
Input value added tax ("VAT") | ¥ 1,698,506 | ¥ 1,386,004 | |
Prepaid expenses | 111,420 | 80,388 | |
Accrued interest income | 71,855 | 150,157 | |
Deposits | 76,665 | 55,277 | |
Others | 376,242 | 292,680 | |
Total | ¥ 2,334,688 | $ 357,805 | ¥ 1,964,506 |
Property and Equipment, net (De
Property and Equipment, net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | |
Property and equipment, net | ||||
Property, plant and equipment, gross | ¥ 23,118,132 | ¥ 15,321,363 | ||
Accumulated depreciation | (4,552,971) | (2,850,731) | ||
Property and equipment, net | 18,565,161 | 12,470,632 | $ 2,845,235 | |
Depreciation expenses | 1,758,638 | 1,210,040 | ¥ 809,005 | |
Pending title of certificates buildings, net | 2,272,711 | 3,144,110 | ||
Buildings | ||||
Property and equipment, net | ||||
Property, plant and equipment, gross | 6,940,154 | 5,594,482 | ||
Machinery and equipment | ||||
Property and equipment, net | ||||
Property, plant and equipment, gross | 5,055,601 | 3,778,753 | ||
Leasehold improvements | ||||
Property and equipment, net | ||||
Property, plant and equipment, gross | 599,300 | 432,236 | ||
Vehicles | ||||
Property and equipment, net | ||||
Property, plant and equipment, gross | 5,591,138 | 3,367,428 | ||
Furniture, office and electric equipment | ||||
Property and equipment, net | ||||
Property, plant and equipment, gross | 619,007 | 462,842 | ||
Construction in progress | ||||
Property and equipment, net | ||||
Property, plant and equipment, gross | ¥ 4,312,932 | ¥ 1,685,622 |
Land Use Rights, Net (Details)
Land Use Rights, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | |
Land use rights, net | ||||
Weighted average remaining lease term (in years) | 5 years | 6 years | 5 years | |
Cost | ¥ 4,609,201 | ¥ 2,681,762 | ||
Less: Accumulated amortization | (248,528) | (172,902) | ||
Land use rights, net | 4,360,673 | 2,508,860 | $ 668,302 | |
Amortization expenses | 75,627 | 48,328 | ¥ 38,516 | |
Title certificates for land use right with carrying value not obtained | ¥ 303,554 | ¥ 167,812 | ||
Land use rights | ||||
Land use rights, net | ||||
Weighted average remaining lease term (in years) | 44 years | 44 years | ||
Land use rights | Maximum | ||||
Land use rights, net | ||||
Lease term (in years) | 50 years |
Operating Leases - Rental Expen
Operating Leases - Rental Expenses (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Operating Leases | ||||
Rental expenses | ¥ | ¥ 361,098 | ¥ 300,708 | ¥ 271,630 | |
Variable lease cost | $ | $ 0 |
Operating Leases - Right-of-use
Operating Leases - Right-of-use Assets (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Operating leases | |||
Operating lease right-of-use assets | ¥ 876,259 | $ 134,293 | ¥ 901,956 |
Operating Leases - Lease Liabil
Operating Leases - Lease Liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Operating leases | |||
Current operating lease liabilities | ¥ 246,394 | $ 37,762 | ¥ 298,728 |
Non- current operating lease liabilities | 502,481 | $ 77,008 | 504,442 |
Total operating lease liabilities | ¥ 748,875 | ¥ 803,170 |
Operating Leases - Supplemental
Operating Leases - Supplemental Disclosures (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Supplemental disclosures about leases | ||
Weighted average remaining lease term (in years) | 5 years | 6 years |
Weighted average discount rate | 4.27% | 4.36% |
Operating Leases - Supplement_2
Operating Leases - Supplemental Cash Flow Information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental disclosure of cash flow information | ||
Operating cash flows from operating leases | ¥ 389,696 | ¥ 322,857 |
Right-of-use assets obtained in exchange for lease liabilities: Operating leases | 343,411 | 499,124 |
Right-of-use assets decreased due to operating lease modifications: Operating leases | ¥ 48,558 | ¥ 168,380 |
Operating Leases - Maturities (
Operating Leases - Maturities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Maturities of lease liabilities | ||
Within one year | ¥ 257,009 | ¥ 285,743 |
Within a period of more than one year but not more than two years | 163,774 | 196,902 |
Within a period of more than two year but not more than three years | 100,435 | 105,055 |
Within a period of more than three year but not more than four years | 105,527 | 82,610 |
Within a period of more than four year but not more than five years | 64,430 | 50,415 |
Within a period of more than five year | 148,254 | 184,470 |
Total lease commitment | ¥ 839,429 | ¥ 905,195 |
Operating Leases - Total Lease
Operating Leases - Total Lease Obligation (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Operating leases | ||
Total lease commitment | ¥ 839,429 | ¥ 905,195 |
Less: Imputed interest | (90,554) | (102,025) |
Total operating lease liabilities | ¥ 748,875 | ¥ 803,170 |
Operating Leases - Current and
Operating Leases - Current and Non-current Lease Obligation (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Operating leases | |||
Total operating lease liabilities | ¥ 748,875 | ¥ 803,170 | |
Less: Current operating lease liabilities | (246,394) | $ (37,762) | (298,728) |
Long-term operating lease liabilities | ¥ 502,481 | $ 77,008 | ¥ 504,442 |
Operating Leases - Rental Incom
Operating Leases - Rental Income (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Leases | |||
Rental income | ¥ 81,348 | ¥ 79,254 | ¥ 69,483 |
Goodwill (Details)
Goodwill (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) |
Goodwill | ||
Goodwill, balance at the beginning of period | ¥ 4,241,541 | |
Balance at December 31, 2019 and 2020 | 4,241,541 | $ 650,045 |
Express delivery services | ||
Goodwill | ||
Goodwill, balance at the beginning of period | 4,157,111 | |
Balance at December 31, 2019 and 2020 | 4,157,111 | |
Freight forwarding services | ||
Goodwill | ||
Goodwill, balance at the beginning of period | 84,430 | |
Balance at December 31, 2019 and 2020 | ¥ 84,430 |
Investments in equity investe_3
Investments in equity investees (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Investments in equity investees | ||
Total investments accounted for under the equity method | ¥ 242,950 | ¥ 371,311 |
Total investments accounted for equity investments without readily determinable fair values | 2,981,513 | 2,738,183 |
Total investments in equity investees | 3,224,463 | 3,109,494 |
ZTO Supply Chain Management Co., Ltd. and its subsidiaries | ||
Investments in equity investees | ||
Total investments accounted for under the equity method | 63,224 | 206,986 |
Total investments accounted for equity investments without readily determinable fair values | 218,275 | |
Feng Wang Investment Co., Ltd. ("Feng Wang") (2) | ||
Investments in equity investees | ||
Total investments accounted for under the equity method | 49,165 | 51,068 |
Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") (3) | ||
Investments in equity investees | ||
Total investments accounted for under the equity method | 24,045 | 29,652 |
Others | ||
Investments in equity investees | ||
Total investments accounted for under the equity method | 106,516 | 83,605 |
Cai Niao Smart Logistics Network Limited ("Cai Niao") (4) | ||
Investments in equity investees | ||
Total investments accounted for equity investments without readily determinable fair values | 1,049,893 | 1,122,218 |
Zhejiang Yizhan Network Technology Co., Ltd. ("Cainiao Post") (4) | ||
Investments in equity investees | ||
Total investments accounted for equity investments without readily determinable fair values | 1,075,000 | 1,075,000 |
Zhijiang New Industries Limited ("ZJ New Industries") (4) | ||
Investments in equity investees | ||
Total investments accounted for equity investments without readily determinable fair values | 500,000 | 500,000 |
Others | ||
Investments in equity investees | ||
Total investments accounted for equity investments without readily determinable fair values | ¥ 138,345 | ¥ 40,965 |
Investments in equity investe_4
Investments in equity investees - ZTO LTL, Feng Wang and CRRC (Details) ¥ in Thousands, $ in Thousands | Aug. 22, 2016CNY (¥) | May 31, 2020CNY (¥) | May 31, 2020USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2018USD ($) | Aug. 31, 2017CNY (¥) | Dec. 31, 2013CNY (¥)item | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥)item | Oct. 31, 2018CNY (¥) | Dec. 31, 2015 |
Investments in equity investees | ||||||||||||||
Cash consideration | ¥ 238,415 | $ 36,539 | ¥ 218,260 | ¥ 1,865,309 | ||||||||||
ZTO Supply Chain Management Co., Ltd. and its subsidiaries | ||||||||||||||
Investments in equity investees | ||||||||||||||
Cash consideration | ¥ 54,000 | ¥ 90,243 | $ 12,715 | ¥ 130,150 | $ 19,000 | ¥ 36,000 | ||||||||
Equity interest in equity method investment (as a percent) | 18.00% | 17.30% | 17.30% | 17.70% | 17.70% | 18.00% | ||||||||
Feng Wang Investment Co., Ltd. ("Feng Wang") (2) | ||||||||||||||
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 | 3 | |||||||||||||
Shanghai CRRC Green City Logistics Co., Ltd. ("CRRC") (3) | ||||||||||||||
Investments in equity investees | ||||||||||||||
Cash consideration | ¥ | ¥ 30,000 | |||||||||||||
Equity interest in equity method investment (as a percent) | 15.00% | |||||||||||||
Number of top express delivery companies in agreement | 2 | |||||||||||||
Number of board seat allocated for equity method investment | 1 | |||||||||||||
Number of board seat available in equity method investee | 7 | |||||||||||||
Zhijiang New Industries Limited ("ZJ New Industries") (4) | ||||||||||||||
Investments in equity investees | ||||||||||||||
Capital contribution in cash | ¥ | ¥ 500,000 | |||||||||||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 2.00% |
Investments in equity investe_5
Investments in equity investees - Cai Niao, Feng Chao and Wheat Commune (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 31, 2018 | May 31, 2018 | |
Investments in equity investees | |||||
Unrealized gain from investment in equity investee | ¥ 754,468 | ||||
Impairment of equity investees | ¥ 0 | 56,026 | ¥ 0 | ||
Cai Niao Smart Logistics Network Limited ("Cai Niao") (4) | |||||
Investments in equity investees | |||||
Capital contribution in cash | 150,485 | ¥ 1,075,000 | |||
Unrealized gain from investment in equity investee | 754,468 | ||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 15.00% | ||||
Zhijiang New Industries Limited ("ZJ New Industries") (4) | |||||
Investments in equity investees | |||||
Capital contribution in cash | ¥ 500,000 | ||||
Equity interest in equity investments without readily determinable fair values (as a percent) | 2.00% | ||||
Impairment of equity investees | ¥ 0 | 56,026 | ¥ 0 | ||
Wheat Commune Group Inc. ("Wheat Commune) | |||||
Investments in equity investees | |||||
Impairment of equity investees | ¥ 48,526 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2020USD ($) | |
Intangible assets, net | ||||
Intangible assets, net | ¥ 41,832 | ¥ 48,029 | $ 6,411 | |
Estimated amortization expenses for each of five succeeding fiscal years | ||||
2021 | 6,197 | |||
2022 | 6,197 | |||
2023 | 6,197 | |||
2024 | 6,197 | |||
2025 | 6,197 | |||
2026 and after | 10,847 | |||
Total | 41,832 | |||
Customer relationships | ||||
Intangible assets, net | ||||
Intangible assets, gross | 61,973 | 61,973 | ||
Less: accumulated amortization | (20,141) | (13,944) | ||
Intangible assets, net | 41,832 | 48,029 | ||
COE Business | Customer relationships | ||||
Intangible assets, net | ||||
Amortization expenses | ¥ 6,197 | ¥ 6,198 | ¥ 6,197 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Other Current Liabilities | |||
Payables related to property and equipment | ¥ 1,319,693 | ¥ 1,076,935 | |
Deposits from network partners(1) | 930,147 | 925,925 | |
Salary and welfare payable | 924,383 | 838,527 | |
Payable to individual couriers(2) | 448,158 | ||
Construction deposits | 86,043 | 55,832 | |
Payables to network partners(3) | 262,537 | 260,228 | |
Accrued expenses | 222,642 | 84,274 | |
Others | 293,481 | 310,567 | |
Total | ¥ 4,487,084 | $ 687,676 | ¥ 3,552,288 |
Short-term Bank Borrowings (Det
Short-term Bank Borrowings (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2020CNY (¥) | |
Short-term Bank Borrowings | |
PRC domestic commercial banks | ¥ 1,432,929 |
Weighted average interest rate | 2.94% |
financial covenants, asset-liability ratio | 65.00% |
Current ratio | 0.8 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Noncontrolling Interest | ||||
Net income attributable to ZTO Express (Cayman) Inc. | ¥ 4,312,213 | $ 660,876 | ¥ 5,674,145 | ¥ 4,383,025 |
Increase in ZTO's paid in capital for capital contribution from noncontrolling interest shareholder | 807 | 23,740 | ||
Decrease in ZTO's paid in capital for purchase shares of the Company's subsidiaries | 17,129 | |||
Net transfers from (to) noncontrolling interest | (16,322) | 23,740 | ||
Change from net income attribute to ZTO and transfers from (to) noncontrolling interest | ¥ 4,295,891 | ¥ 5,674,145 | ¥ 4,406,765 |
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, 2020CNY (¥)company | Dec. 31, 2020USD ($)company | Dec. 31, 2020HKD ($)company | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Income tax | |||||
Statutory income tax rate | 21.00% | 21.00% | 21.00% | ||
Number of Companies' subsidiaries | company | 10 | 10 | 10 | ||
Taxable profit threshold | ¥ 5,837,106 | $ 894,576 | ¥ 6,621,168 | ¥ 5,364,883 | |
Current and deferred portion of income tax expenses | |||||
Current tax expenses | 961,802 | 1,118,822 | 1,068,214 | ||
Deferred tax assets | (271,969) | (41,681) | (40,527) | (139,081) | |
Total | ¥ 689,833 | $ 105,722 | ¥ 1,078,295 | ¥ 929,133 | |
Minimum | |||||
Income tax | |||||
State income tax rate | 5.00% | 5.00% | 5.00% | ||
Maximum | |||||
Income tax | |||||
State income tax rate | 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% | 15.00% | 15.00% |
HNTEs | |||||
Income tax | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
WFOE - Key Software Enterprise | |||||
Income tax | |||||
Preferential tax rate (as a percent) | 10.00% | ||||
Preferential tax rates decreased income taxes | ¥ 200,683 | ||||
WFOE - Key Software Enterprise | Shanghai Zhongtongji Network Technology Co. Ltd | |||||
Income tax | |||||
Preferential tax rate (as a percent) | 15.00% | 15.00% | 15.00% | ||
Hong Kong | |||||
Income tax | |||||
Statutory tax rate in the foreign | 16.50% | 16.50% | 16.50% | ||
Taxable profit threshold | $ | $ 2 | ||||
Hong Kong | Maximum | |||||
Income tax | |||||
Statutory tax rate in the foreign | 8.25% | 8.25% | 8.25% | ||
PRC | |||||
Income tax | |||||
Statutory income tax rate | 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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliations of differences between PRC statutory income tax rate and Group's effective income tax rate | |||
Statutory income tax rate | 21.00% | ||
PRC | |||
Reconciliations of differences between PRC statutory income tax rate and Group's effective income tax rate | |||
Statutory income tax rate | 25.00% | 25.00% | 25.00% |
Preferential tax rates | (6.70%) | (6.26%) | (7.36%) |
R&D super deduction | (1.87%) | (0.96%) | (0.61%) |
Non-deductible expenses | 1.70% | 1.48% | 1.41% |
Non-taxable income | (0.03%) | (0.24%) | |
Different tax rates of operations in other jurisdictions | (0.42%) | (3.34%) | (0.74%) |
Valuation allowance on deferred tax assets | 0.07% | ||
True up | (4.05%) | 0.04% | (0.05%) |
Effective income tax rate | 13.70% | 15.96% | 17.41% |
Income Tax - Effect of tax holi
Income Tax - Effect of tax holiday (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020CNY (¥)¥ / shares | Dec. 31, 2019CNY (¥)¥ / shares | Dec. 31, 2018CNY (¥)¥ / shares | |
Income Tax | |||
Tax saving amount due to preferential tax rates | ¥ | ¥ 538,014 | ¥ 422,996 | ¥ 392,761 |
Income per share effect- basic | 0.68 | 0.54 | 0.52 |
Income per share effect- diluted | 0.68 | 0.54 | 0.52 |
Income Tax - Deferred tax asset
Income Tax - Deferred tax assets and liabilities (Details) - CNY (¥) ¥ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Accrued payroll and expense | ¥ 139,153 | ¥ 131,007 |
Net loss carryforward | 461,305 | 159,969 |
Financial subsidy | 6,266 | 31,916 |
Depreciation for property and equipment | 74,429 | 47,433 |
Unrealized gain from intragroup transactions | 32,160 | 20,467 |
Provision for allowance for credit losses | 14,903 | 12,795 |
Total deferred tax assets | 728,216 | 403,587 |
Valuation allowance on deferred tax assets | (7,655) | 0 |
Total deferred tax assets | 720,561 | 403,587 |
Deferred tax liabilities: | ||
Difference in basis of land use rights | (141,960) | (145,477) |
Unrealized investment gain | (900) | |
Difference in basis of fixed assets | (105,202) | (54,471) |
Difference in basis of intangible assets | (6,925) | (7,948) |
Total deferred tax liabilities | ¥ (254,987) | ¥ (207,896) |
Income Tax - Other information
Income Tax - Other information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax | |||
Valuation allowances | ¥ 7,655 | ¥ 0 | |
Tax loss carryforward | ¥ 1,858,581 | ||
Statutory income tax rate | 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 | ¥ 19,905,606 | 15,607,474 | |
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 | |
WFOE - Key Software Enterprise | |||
Income tax | |||
Preferential tax rate (as a percent) | 10.00% | ||
Preferential tax rates decreased income taxes | ¥ 200,683 | ||
PRC | |||
Income tax | |||
Statutory income tax rate | 25.00% | 25.00% | 25.00% |
Share Based Compensation - Shar
Share Based Compensation - Share Holding Platform (Details) | Mar. 11, 2019CNY (¥) | Mar. 28, 2017CNY (¥)shares | Mar. 31, 2020shares | Mar. 31, 2019shares | Mar. 31, 2018shares | Jun. 30, 2016entity | Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2020$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2018$ / shares | Jun. 28, 2016shares |
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 | Selling, general and administrative expenses | ||||||||||||||
Share-based compensation | ||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 3,316,000 | ¥ 19,899,000 | ¥ 21,192,000 | |||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | $ 12.88 | |||||||||||||
Share Holding Platform | ||||||||||||||
Share-based compensation | ||||||||||||||
Granted (in shares) | 4,722,885 | |||||||||||||
Number of ordinary shares under Incentive Platform | ||||||||||||||
Granted (in shares) | 4,722,885 | |||||||||||||
Share Holding Platform | Ordinary shares | ||||||||||||||
Share-based compensation | ||||||||||||||
Shares issued to related party | 16,000,000 | |||||||||||||
Granted (in shares) | 789,150 | 785,097 | 944,577 | 906,949 | 785,097 | |||||||||
Number of ordinary shares under Incentive Platform | ||||||||||||||
Non-Vested, at beginning of the year | 283,886 | |||||||||||||
Granted (in shares) | 789,150 | 785,097 | 944,577 | 906,949 | 785,097 | |||||||||
Less: forfeited | 31,250 | |||||||||||||
Less: vested | 1,037,733 | |||||||||||||
Non-Vested, at end of the year | 283,886 | |||||||||||||
Weighted average grant-date fair value | ||||||||||||||
Weighted average, Non-Vested, at beginning of the year | ¥ / shares | ¥ 88.59 | |||||||||||||
Granted (in shares) | ¥ / shares | 177.44 | |||||||||||||
Less: forfeited (In shares) | ¥ / shares | 88.59 | |||||||||||||
Vested (in shares) | ¥ / shares | ¥ 155.81 | |||||||||||||
Weighted average, Non-Vested, at end of the year | ¥ / shares | ¥ 88.59 | |||||||||||||
Share Holding Platform | Ordinary shares | Selling, general and administrative expenses | ||||||||||||||
Share-based compensation | ||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 127,805,000 | ¥ 97,424,000 | ||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | 25.32 | $ 20.13 | $ 16.99 | |||||||||||
Share Holding Platform | Ordinary shares | Class A ordinary shares | ||||||||||||||
Share-based compensation | ||||||||||||||
Cash subscription payment | ¥ | ¥ 0 | |||||||||||||
Share Holding Platform | Ordinary Share Units | ||||||||||||||
Share-based compensation | ||||||||||||||
Ratio or ordinary share units to ordinary share | 5 | |||||||||||||
Granted (in shares) | 3,945,750 | 3,925,485 | 4,534,745 | |||||||||||
Number of ordinary shares under Incentive Platform | ||||||||||||||
Granted (in shares) | 3,945,750 | 3,925,485 | 4,534,745 | |||||||||||
Share Holding Platform | Ordinary Share Units | Selling, general and administrative expenses | ||||||||||||||
Share-based compensation | ||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 139,308,000 | ¥ 23,303,000 | ||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | $ 12.88 | |||||||||||||
Share Holding Platform | Ordinary Share Units | Noncash shares granted | ||||||||||||||
Share-based compensation | ||||||||||||||
Cash subscription payment | ¥ | ¥ 0 | |||||||||||||
Vesting period | 3 years |
Share Based Compensation - 2016
Share Based Compensation - 2016 Share Incentive Plan (Details) | Mar. 28, 2017shares | Mar. 31, 2020shares | Mar. 31, 2019shares | May 31, 2018CNY (¥)shares | Apr. 30, 2018¥ / sharesshares | Mar. 31, 2018CNY (¥)shares | Sep. 30, 2016shares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | Dec. 31, 2020$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2018$ / shares | Jun. 20, 2016shares |
Ordinary Share Units | Selling, general and administrative expenses | |||||||||||||||
Fair value per unit | |||||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | $ 12.88 | ||||||||||||||
Number of share options | |||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 3,316,000 | ¥ 19,899,000 | ¥ 21,192,000 | ||||||||||||
2016 Share Incentive Plan | Options | |||||||||||||||
Share-based compensation | |||||||||||||||
Shares available for issuance | 3,000,000 | ||||||||||||||
Options granted | 125,000 | ||||||||||||||
Shares authorized by the board under the plan | 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 | 3,000,000 | ||||||||||||||
Fair value per unit | |||||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | ¥ / shares | ¥ 0 | ||||||||||||||
Number of share options | |||||||||||||||
Granted | 125,000 | ||||||||||||||
Cancelled | 300,000 | ||||||||||||||
2016 Share Incentive Plan | Options | Selling, general and administrative expenses | |||||||||||||||
Number of share options | |||||||||||||||
Granted date fair value of options | ¥ | ¥ 13,148,000 | ||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 3,261,000 | ||||||||||||||
2016 Share Incentive Plan | Restricted Share Units | Certain directors, executive officers and the employees | |||||||||||||||
Fair value per unit | |||||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | $ 16.99 | ||||||||||||||
Number of share options | |||||||||||||||
Number of share units granted | 679,645 | 684,905 | 1,076,532 | 852,390 | |||||||||||
2016 Share Incentive Plan | Restricted Share Units | Selling, general and administrative expenses | |||||||||||||||
Fair value per unit | |||||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | 25.32 | $ 20.13 | |||||||||||||
Number of share options | |||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 91,150,000 | 121,530,000 | ¥ 145,659,000 | ||||||||||||
Share Holding Platform | |||||||||||||||
Number of share options | |||||||||||||||
Number of share units granted | 4,722,885 | ||||||||||||||
Share Holding Platform | Ordinary Share Units | |||||||||||||||
Number of share options | |||||||||||||||
Number of share units granted | 3,945,750 | 3,925,485 | 4,534,745 | ||||||||||||
Share Holding Platform | Ordinary Share Units | Selling, general and administrative expenses | |||||||||||||||
Fair value per unit | |||||||||||||||
Fair value of underlying ordinary shares on the date of option grants (RMB) | $ / shares | $ 12.88 | ||||||||||||||
Number of share options | |||||||||||||||
Share-based compensation expense recorded | ¥ | ¥ 139,308,000 | ¥ 23,303,000 | |||||||||||||
Share Holding Platform | Restricted Share Units | Certain directors, executive officers and the employees | |||||||||||||||
Share-based compensation | |||||||||||||||
Vested (in shares) | 224,631 | ||||||||||||||
Number of share options | |||||||||||||||
Vesting period | 3 years |
Ordinary Shares (Details)
Ordinary Shares (Details) ¥ in Thousands, $ in Thousands | Sep. 29, 2020CNY (¥) | May 29, 2018USD ($)shares | Jun. 28, 2016shares | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2020USD ($)shares | Dec. 31, 2018CNY (¥)shares | Sep. 29, 2020$ / sharesshares | Dec. 31, 2019shares |
Ordinary shares, shares issued | 855,301,115 | 855,301,115 | 803,551,115 | |||||
Investment value in company. | ¥ | ¥ 9,763,833 | ¥ 8,891,909 | ||||||
Proceeds from Issuance of Common Stock | ¥ 9,763,800 | ¥ 9,771,782 | $ 1,497,591 | ¥ 8,891,909 | ||||
Amount of underwriting commissions and discounts | ¥ | 79,200 | |||||||
Offering expenses payable | ¥ | ¥ 77,400 | |||||||
ADR ratio | 1 | |||||||
Alibaba and Cainiao | ||||||||
Investment value in company. | $ | $ 1,380,000 | |||||||
Percentage of equity interest held by investors | 10.00% | |||||||
Ordinary shares | ||||||||
Number of shares issued | 51,750,000 | 51,750,000 | 79,861,111 | |||||
Investment value in company. | ¥ | ¥ 36 | ¥ 52 | ||||||
Class A ordinary shares | ||||||||
Ordinary shares, shares issued | 51,750,000 | |||||||
Shares Issued, Price Per Share | $ / shares | $ 218 | |||||||
Class A ordinary shares | Alibaba and Cainiao | ||||||||
Number of shares issued | 79,861,111 | |||||||
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 | 7,447,313 | 7,447,313 | 8,485,046 |
Earnings Per Share (Details)
Earnings Per Share (Details) ¥ / shares in Units, ¥ in Thousands | 12 Months Ended | |||
Dec. 31, 2020$ / shares | Dec. 31, 2020CNY (¥)¥ / sharesshares | Dec. 31, 2019CNY (¥)¥ / sharesshares | Dec. 31, 2018CNY (¥)¥ / sharesshares | |
Numerator: | ||||
Net income attributable to ordinary shareholders in computing basic and diluted earnings per share | ¥ | ¥ 4,312,213 | ¥ 5,674,145 | ¥ 4,383,025 | |
Shares (Denominator): | ||||
Weight average ordinary shares outstanding-basic | 796,097,532 | 784,007,583 | 751,814,077 | |
Shares for option | 19,376 | |||
Shares for Ordinary Share Units and restricted share units | 49,972 | 323,537 | 839,503 | |
Weight average ordinary shares outstanding-diluted | 796,147,504 | 784,331,120 | 752,672,956 | |
Earnings per share-basic | (per share) | $ 0.83 | ¥ 5.42 | ¥ 7.24 | ¥ 5.83 |
Earnings per share-diluted | (per share) | $ 0.83 | ¥ 5.42 | ¥ 7.23 | ¥ 5.82 |
Zto Es Holding Limited ("ZTO ES") | ||||
Shares (Denominator): | ||||
Anti-dilutive securities excluded from the calculation of diluted net loss per share | 7,447,313 | 8,485,046 | 9,682,255 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with related parties (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Related party transactions | ||||
Revenues | ¥ 49,358 | ¥ 36,366 | ¥ 0 | |
Cost of revenues | 576,081 | 755,445 | 677,831 | |
Rental income | 46,934 | 27,718 | 11,103 | |
Total Other income | 847 | 963 | 12,904 | |
Payments to Acquire Equity Method Investments | 238,415 | $ 36,539 | 218,260 | 1,865,309 |
Gain on disposal of subsidiary | ZTO Lianshang Technology Co., Ltd. | ||||
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 | ||||
Cost of revenues | 331,288 | 479,124 | 547,500 | |
ZTO Supply Chain Management Co., Ltd. and its subsidiaries | Rental income | ||||
Related party transactions | ||||
Rental income | 28,720 | 17,979 | 11,103 | |
ZTO Supply Chain Management Co., Ltd. and its subsidiaries | Transportation service fees paid | ||||
Related party transactions | ||||
Cost of revenues | 47,491 | 63,808 | 40,280 | |
Shanghai Mingyu Barcode Technology Ltd. | Purchases of supplies | ||||
Related party transactions | ||||
Cost of revenues | 197,302 | 212,513 | ¥ 90,051 | |
ZTO Cloud Warehouse Technology Co., Ltd and Its Subsidiaries | Transportation revenue | ||||
Related party transactions | ||||
Revenues | 45,286 | 32,699 | ||
ZTO Cloud Warehouse Technology Co., Ltd and Its Subsidiaries | Rental income | ||||
Related party transactions | ||||
Rental income | 17,215 | 9,739 | ||
ZTO Cloud Warehouse Technology Co., Ltd and Its Subsidiaries | Interest Income | ||||
Related party transactions | ||||
Interest Income | 21 | |||
Youmi Technology (Zhejiang) Co., Ltd. | Rental income | ||||
Related party transactions | ||||
Rental income | 100 | |||
Youmi Technology (Zhejiang) Co., Ltd. | Advertisement Revenue | ||||
Related party transactions | ||||
Revenues | 2,170 | |||
Ningbo Haitaotong International Logistics Co., Ltd | Transportation revenue | ||||
Related party transactions | ||||
Revenues | 1,299 | 717 | ||
Shanghai Kuaibao Network Technology Ltd | Advertisement Revenue | ||||
Related party transactions | ||||
Revenues | 119 | 2,936 | ||
ZTO Lianshang Technology Co., Ltd. And its Subsidiaries [Member] | Transportation revenue | ||||
Related party transactions | ||||
Revenues | 484 | 14 | ||
ZTO Lianshang Technology Co., Ltd. And its Subsidiaries [Member] | Rental income | ||||
Related party transactions | ||||
Rental income | 899 | |||
ZTO Lianshang Technology Co., Ltd. And its Subsidiaries [Member] | Interest Income | ||||
Related party transactions | ||||
Interest Income | ¥ 826 | ¥ 963 |
Related Party Transactions - Du
Related Party Transactions - Due to Related party (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Related party transactions | |||
Amounts due to related parties | ¥ 16,655 | $ 2,552 | ¥ 38,943 |
Tonglu Tongze Logistics Ltd And Its Subsidiaries | |||
Related party transactions | |||
Amounts due to related parties | 20,655 | ||
Shanghai Mingyu Barcode Technology Ltd. | |||
Related party transactions | |||
Amounts due to related parties | 16,652 | 16,906 | |
ZTO Supply Chain Management Co., Ltd. and its subsidiaries | |||
Related party transactions | |||
Amounts due to related parties | 1,165 | ||
Others | |||
Related party transactions | |||
Amounts due to related parties | ¥ 3 | ¥ 217 |
Related Party Transactions - _2
Related Party Transactions - Due from Related party (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) |
Related party transactions | |||
Amounts due from related parties | ¥ 73,278 | $ 11,230 | ¥ 74,312 |
Amounts due from related parties, non current | 500,000 | $ 76,628 | |
ZTO Cloud Warehouse Technology Co., Ltd and Its Subsidiaries | |||
Related party transactions | |||
Amounts due from related parties | 44,875 | 37,266 | |
Tonglu Tongze Logistics Ltd And Its Subsidiaries | |||
Related party transactions | |||
Amounts due from related parties | 9,220 | ||
ZTO Supply Chain Management Co., Ltd. and its subsidiaries | |||
Related party transactions | |||
Amounts due from related parties | 5,680 | ||
Youmi Technology (Zhejiang) Co., Ltd. | |||
Related party transactions | |||
Amounts due from related parties | 5,767 | ||
ZTO Lianshang Technology Co., Ltd. | |||
Related party transactions | |||
Amounts due from related parties | 1,011 | 20,221 | |
Hangzhou Tonglu Hengze Investment Co., Ltd | |||
Related party transactions | |||
Amounts due from related parties | 10,000 | ||
Shanghai Kuaibao Network Technology Ltd | |||
Related party transactions | |||
Amounts due from related parties | 6,600 | 6,512 | |
Others | |||
Related party transactions | |||
Amounts due from related parties | 125 | ¥ 313 | |
Zhongkuai (Tonglu) Future City Industrial Development Co., Ltd | |||
Related party transactions | |||
Amounts due from related parties, non current | ¥ 500,000 | ||
Interest rate | 7.20% | 7.20% |
Commitments and Contingencies -
Commitments and Contingencies - Capital commitments (Details) ¥ in Thousands | 12 Months Ended |
Dec. 31, 2020CNY (¥) | |
Capital Commitments | |
Capital Commitments | |
Capital commitments contracted | ¥ 5,199,817 |
Commitments and Contingencies_2
Commitments and Contingencies - Investment commitments and Contingencies (Details) ¥ in Thousands | 1 Months Ended | 12 Months Ended |
May 31, 2017item | Dec. 31, 2020CNY (¥) | |
Contingencies | ||
Investment commitments | ¥ | ¥ 239,100 | |
Number of putative securities class actions filed | item | 3 |
Repurchase of Ordinary Shares (
Repurchase of Ordinary Shares (Details) $ / shares in Units, ¥ in Thousands, $ in Millions | Nov. 14, 2018USD ($) | Dec. 31, 2020CNY (¥)shares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2018CNY (¥)shares | Dec. 31, 2020$ / shares | Dec. 31, 2019$ / shares | Dec. 31, 2018$ / shares |
Repurchase of ordinary share of ZTO Express | |||||||
Total cash consideration for repurchase of ordinary shares | ¥ | ¥ 1,228,341 | ¥ 738,746 | ¥ 737,004 | ||||
ADSs | Class A ordinary shares | |||||||
Repurchase of ordinary share of ZTO Express | |||||||
Share Price | $ / shares | $ 22.20 | ||||||
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 | 14,491,197 | 7,716,436 | 1,700,000 | ||||
Share Price | $ / shares | $ 22.20 | $ 17.33 | $ 15.85 | ||||
Total cash consideration for repurchase of ordinary shares | ¥ | ¥ 924,418 | ¥ 185,673 | |||||
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 | 6,774,761 | 6,016,436 | 7,565,487 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Benefit Plans | |||
Defined benefit plan contributions | ¥ 302,069 | ¥ 254,534 | ¥ 195,101 |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Segment Information | |
Number of reportable segments | 1 |
Restricted Net Assets (Details)
Restricted Net Assets (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | ¥ 0 | ¥ 12,894 | ¥ 353,803 |
Accumulated statutory reserves | 993,936 | ¥ 993,936 | |
Restricted net assets | ¥ 19,995,009 |
Subsequent Events (Details)
Subsequent Events (Details) ¥ in Thousands | Mar. 16, 2021$ / shares | Mar. 16, 2021CNY (¥)shares | Mar. 28, 2017shares | Mar. 31, 2020shares | Mar. 31, 2019shares | Mar. 31, 2018shares |
2016 Share Incentive Plan | Restricted Share Units | Certain directors, executive officers and the employees | ||||||
Subsequent Events | ||||||
Number of share units granted | shares | 679,645 | 684,905 | 1,076,532 | 852,390 | ||
Subsequent Events | Class A ordinary shares | ||||||
Subsequent Events | ||||||
Fair value of share awards | ¥ | ¥ 248,027 | |||||
Market price | $ / shares | $ 32.83 | |||||
Subsequent Events | ADSs | ||||||
Subsequent Events | ||||||
Special dividend | $ / shares | 0.25 | |||||
Subsequent Events | 2016 Share Incentive Plan | Restricted Share Units | Certain directors, executive officers and the employees | ||||||
Subsequent Events | ||||||
Number of share units granted | shares | 525,595 | |||||
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 | shares | 635,767 | |||||
Value | $ / shares | $ 0 |
FINANCIAL STATEMENTS SCHEDULE_2
FINANCIAL STATEMENTS SCHEDULE I - CONDENSED BALANCE SHEETS (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2020CNY (¥)shares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019CNY (¥)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018CNY (¥) | Dec. 31, 2017CNY (¥) | |
Current assets: | ||||||
Cash and cash equivalents | ¥ 14,212,778 | $ 2,178,204 | ¥ 5,270,204 | ¥ 4,622,554 | ||
Short-term investment | 3,690,402 | 565,579 | 11,113,217 | |||
Prepayments and other current assets | 2,334,688 | 357,805 | 1,964,506 | |||
Amounts due from subsidiaries | 73,278 | 11,230 | 74,312 | |||
Total current assets | 22,324,626 | 3,421,397 | 20,098,257 | |||
Deferred tax assets | 720,561 | 110,431 | 403,587 | |||
Long-term investments | 1,842,000 | 282,299 | 946,180 | |||
Investments in subsidiaries and VIE | ¥ | 3,224,463 | 3,109,494 | ||||
TOTAL ASSETS | 59,204,750 | 9,073,524 | 45,890,502 | |||
LIABILITIES AND EQUITY | ||||||
Other current liability | 4,487,084 | 687,676 | 3,552,288 | |||
Other non-current liability | ¥ | 93,820 | |||||
TOTAL LIABILITIES | 10,105,052 | 1,548,666 | 7,487,105 | |||
Shareholders' equity: | ||||||
Ordinary shares ( US$0.0001 par value; 10,000,000,000 shares authorized; 803,551,115 shares issued and 781,947,464 shares outstanding as of December 31, 2019; 855,301,115 shares issued and 828,869,972 shares outstanding as of December 31, 2020) | 553 | 85 | 517 | |||
Additional paid-in capital | 30,613,948 | 4,691,793 | 22,336,594 | |||
Treasury shares, at cost | (2,578,870) | (395,229) | (1,436,767) | |||
Retained earnings | 21,038,753 | 3,224,330 | 16,726,540 | |||
Accumulated other comprehensive gain | (95,571) | (14,647) | 675,720 | |||
Total Equity | 49,099,698 | 7,524,858 | 38,403,397 | 34,269,549 | ¥ 21,441,317 | |
TOTAL LIABILITIES AND EQUITY | ¥ 59,204,750 | $ 9,073,524 | ¥ 45,890,502 | |||
Ordinary shares, share authorized | shares | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | ||
Ordinary shares, shares issued | shares | 855,301,115 | 855,301,115 | 803,551,115 | 803,551,115 | ||
Ordinary shares, shares outstanding | shares | 828,869,972 | 828,869,972 | 781,947,464 | 781,947,464 | ||
Issuance cost on IPO | ¥ | ¥ 69,498 | |||||
Reportable Legal Entities [Member] | ZTO EXPRESS (CAYMAN) INC. | ||||||
Current assets: | ||||||
Cash and cash equivalents | 3,443,624 | $ 527,759 | ¥ 394,741 | $ 60,497 | ¥ 773,884 | ¥ 2,523,067 |
Short-term investment | 2,509,137 | 384,542 | 8,771,868 | |||
Prepayments and other current assets | 13,013 | 1,994 | 118,623 | |||
Amounts due from subsidiaries | 4,993,853 | 765,342 | 1,510,194 | |||
Total current assets | 10,959,627 | 1,679,637 | 10,795,426 | |||
Deferred tax assets | ¥ | 28,146 | |||||
Long-term investments | 652,500 | 100,000 | 696,180 | |||
Investments in subsidiaries and VIE | 37,391,446 | 5,730,490 | 26,878,301 | |||
TOTAL ASSETS | 49,003,573 | 7,510,127 | 38,398,053 | |||
LIABILITIES AND EQUITY | ||||||
Other current liability | 24,760 | 3,795 | 1,629 | |||
Other non-current liability | ¥ | 93,820 | |||||
TOTAL LIABILITIES | 24,760 | 3,795 | 95,449 | |||
Shareholders' equity: | ||||||
Ordinary shares ( US$0.0001 par value; 10,000,000,000 shares authorized; 803,551,115 shares issued and 781,947,464 shares outstanding as of December 31, 2019; 855,301,115 shares issued and 828,869,972 shares outstanding as of December 31, 2020) | 553 | 85 | 517 | |||
Additional paid-in capital | 30,613,948 | 4,691,793 | 22,336,594 | |||
Treasury shares, at cost | (2,578,870) | (395,229) | (1,436,767) | |||
Retained earnings | 21,038,753 | 3,224,330 | 16,726,540 | |||
Accumulated other comprehensive gain | (95,571) | (14,647) | 675,720 | |||
Total Equity | 48,978,813 | 7,506,332 | 38,302,604 | |||
TOTAL LIABILITIES AND EQUITY | ¥ 49,003,573 | $ 7,510,127 | ¥ 38,398,053 | |||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Ordinary shares, share authorized | shares | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | 10,000,000,000 | ||
Ordinary shares, shares issued | shares | 855,301,115 | 855,301,115 | 803,551,115 | 803,551,115 | ||
Ordinary shares, shares outstanding | shares | 828,869,972 | 828,869,972 | 781,947,464 | 781,947,464 | ||
Issuance cost on IPO | ¥ | ¥ 69,498 |
FINANCIAL STATEMENTS SCHEDULE_3
FINANCIAL STATEMENTS SCHEDULE I - CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
Operating expenses: | ||||
Other operating income, net | ¥ 580,973 | $ 89,038 | ¥ 387,890 | ¥ 178,057 |
Total operating expenses | (1,082,739) | (165,937) | (1,158,337) | (1,032,660) |
Income from operations | 4,754,367 | 728,639 | 5,462,831 | 4,332,223 |
Income tax expense | (689,833) | (105,722) | (1,078,295) | (929,133) |
Fair value change at financial instruments | (877) | (134) | ||
Share of profit in subsidiaries and VIE | (18,507) | (2,836) | (7,556) | (19,386) |
Net income attributable to ZTO Express (Cayman) Inc. | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 |
Net income attributable to ordinary shareholders | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 |
Net income | 4,326,446 | 663,057 | 5,671,267 | 4,387,912 |
Other comprehensive income/(loss), net of tax of nil | ||||
Foreign currency translation adjustment | (771,291) | (118,205) | 104,004 | 867,612 |
Comprehensive income | 3,555,155 | 544,852 | 5,775,271 | 5,255,524 |
Other comprehensive loss, tax | 0 | 0 | 0 | |
Reportable Legal Entities [Member] | ZTO EXPRESS (CAYMAN) INC. | ||||
Operating expenses: | ||||
General and administrative | (284,193) | (43,554) | (325,559) | (271,378) |
Other operating income, net | 146,168 | 22,401 | 52,937 | 43,575 |
Total operating expenses | (138,025) | (21,153) | (272,622) | (227,803) |
Interest income | 199,991 | 30,650 | 412,311 | 317,714 |
Income from operations | 61,966 | 9,497 | 139,689 | 89,911 |
Income tax expense | (62,887) | (9,638) | (61,505) | (43,581) |
Fair value change at financial instruments | (2,948) | (452) | ||
Share of profit in subsidiaries and VIE | 4,316,082 | 661,469 | 5,595,961 | 4,336,695 |
Net income attributable to ZTO Express (Cayman) Inc. | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 |
Net income attributable to ordinary shareholders | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 |
Net income | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 |
Other comprehensive income/(loss), net of tax of nil | ||||
Foreign currency translation adjustment | (771,291) | (118,205) | 104,004 | 867,612 |
Comprehensive income | 3,540,922 | $ 542,671 | 5,778,149 | 5,250,637 |
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 | Sep. 29, 2020CNY (¥) | Dec. 31, 2020CNY (¥) | Dec. 31, 2020USD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) |
Cash flows from operating activities: | |||||
Net income | ¥ 4,326,446 | $ 663,057 | ¥ 5,671,267 | ¥ 4,387,912 | |
Adjustments to reconcile net income to net cash used by operating activities | |||||
Share-based compensation | 264,154 | 40,483 | 316,666 | 249,478 | |
Share of profit in subsidiaries and VIE | 18,507 | 2,836 | 7,556 | 19,386 | |
Changes in operating assets and liabilities: | |||||
Prepayments and other current assets | (369,443) | (56,620) | (545,079) | (764,223) | |
Deferred tax assets | (271,969) | (41,681) | (40,527) | (139,081) | |
Other non-current liability | (90,877) | (13,928) | (14,448) | 9,231 | |
Net cash provided by operating activities | 4,950,749 | 758,735 | 6,304,186 | 4,404,051 | |
Cash flows from investing activities | |||||
Amounts due from subsidiaries | (500,000) | (76,628) | |||
Investments in equity investees | (238,415) | (36,539) | (218,260) | (1,865,309) | |
Purchases of short-term investments | (9,686,732) | (1,484,557) | (14,061,179) | (13,634,396) | |
Maturity of short-term investments | 17,010,363 | 2,606,952 | 16,699,480 | 5,834,805 | |
Purchase of long-term investments | (939,500) | (143,985) | (957,870) | ||
Net cash used in investing activities | (3,549,341) | (543,960) | (3,664,213) | (12,872,633) | |
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares, net of issuance cost and commission paid of RMB69,498 | ¥ 9,763,800 | 9,771,782 | 1,497,591 | 8,891,909 | |
Payment of dividends | (1,649,308) | (252,767) | (1,270,773) | (895,136) | |
Repurchase of ordinary shares | (1,228,341) | (188,251) | (762,893) | (769,811) | |
Net cash provided by/used in financing activities | 8,337,407 | 1,277,764 | (1,982,306) | 7,042,122 | |
Effect of exchange rate changes on cash, cash equivalents | (656,137) | (100,558) | (3,207) | 275,680 | |
Net increase (decrease) in cash and cash equivalents | 9,082,678 | 1,391,981 | 654,460 | (1,150,780) | |
Cash, cash equivalents and restricted cash at beginning of year | 5,277,414 | 808,799 | 4,622,954 | 5,773,734 | |
Cash, cash equivalents and restricted cash at end of year | 14,360,092 | 2,200,780 | 5,277,414 | 4,622,954 | |
Cash, cash equivalents, beginning of year | 5,270,204 | 4,622,554 | |||
Cash, cash equivalents, end of year | 14,212,778 | 2,178,204 | 5,270,204 | 4,622,554 | |
Issuance cost on IPO | 69,498 | ||||
Reportable Legal Entities [Member] | ZTO EXPRESS (CAYMAN) INC. | |||||
Cash flows from operating activities: | |||||
Net income | 4,312,213 | 660,876 | 5,674,145 | 4,383,025 | |
Adjustments to reconcile net income to net cash used by operating activities | |||||
Share-based compensation | 264,154 | 40,483 | 316,666 | 249,478 | |
Share of profit in subsidiaries and VIE | (4,316,082) | (661,469) | (5,595,961) | (4,336,695) | |
Changes in operating assets and liabilities: | |||||
Prepayments and other current assets | 105,610 | 16,184 | 53,628 | (131,322) | |
Deferred tax assets | 28,146 | 4,314 | (858) | (27,288) | |
Other non-current liability | (90,877) | (13,928) | (14,448) | 9,231 | |
Net cash provided by operating activities | 303,164 | 46,460 | 433,172 | 146,429 | |
Cash flows from investing activities | |||||
Investments in equity investees | (10,010,593) | (1,534,190) | (2,051,918) | (2,199,955) | |
Purchases of short-term investments | (6,095,450) | (934,169) | (10,089,829) | (12,564,140) | |
Maturity of short-term investments | 12,297,430 | 1,884,664 | 14,072,901 | 5,376,252 | |
Purchase of long-term investments | (707,870) | ||||
Net cash used in investing activities | (3,808,613) | (583,695) | 1,223,284 | (9,387,843) | |
Cash flows from financing activities | |||||
Payment of dividends | (1,649,308) | (252,767) | (1,270,773) | (895,136) | |
Repurchase of ordinary shares | (1,228,341) | (188,251) | (762,893) | (769,811) | |
Net cash provided by/used in financing activities | 6,894,133 | 1,056,573 | (2,033,666) | 7,226,962 | |
Effect of exchange rate changes on cash, cash equivalents | (339,801) | (52,076) | (1,933) | 265,269 | |
Net increase (decrease) in cash and cash equivalents | 3,048,883 | 467,262 | (379,143) | (1,749,183) | |
Cash, cash equivalents, beginning of year | 394,741 | 60,497 | 773,884 | 2,523,067 | |
Cash, cash equivalents, end of year | 3,443,624 | 527,759 | ¥ 394,741 | 773,884 | |
Issuance cost on IPO | 69,498 | ||||
Reportable Legal Entities [Member] | Alibaba | ZTO EXPRESS (CAYMAN) INC. | |||||
Cash flows from financing activities | |||||
Proceeds from issuance of ordinary shares, net of issuance cost and commission paid of RMB69,498 | ¥ 9,771,782 | $ 1,497,591 | ¥ 8,891,909 |
FINANCIAL STATEMENTS SCHEDULE_5
FINANCIAL STATEMENTS SCHEDULE I - NOTES TO SCHEDULE I (Details) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2020CNY (¥)$ / ¥ | Dec. 31, 2019CNY (¥) | Dec. 31, 2018CNY (¥) | |
FINANCIAL STATEMENTS SCHEDULE I | |||
Ordinary Shares Repurchased, But Not Yet Paid | ¥ 0 | ¥ 0 | ¥ 24,146 |
Dividends Payable | ¥ 11,198 | 1,629 | 1,699 |
Convenience translation rate | $ / ¥ | 6.5250 | ||
Reportable Legal Entities [Member] | ZTO EXPRESS (CAYMAN) INC. | |||
FINANCIAL STATEMENTS SCHEDULE I | |||
Ordinary Shares Repurchased, But Not Yet Paid | ¥ 0 | 0 | 24,146 |
Dividends Payable | ¥ 11,198 | ¥ 1,629 | ¥ 1,699 |
Convenience translation rate | $ / ¥ | 6.5250 |