ZTO Express Shares Extend Gains in Afternoon Trade

By Yifan Wang

ZTO Express shares extended gains in Hong Kong afternoon trade on Thursday, as investors welcomed the Chinese parcel-delivery company's first-quarter profit jump and guidance raise.

The company's Hong Kong-traded shares surged 7.4% shortly after the midday trading break to a new intraday high of 235.20 Hong Kong dollars (US$30.04). The gains made ZTO one of the best performers in the Asian financial hub on Thursday.

The rally came after ZTO posted a 84% net profit surge for the first quarter, driven by better cost efficiency. Revenue rose 14%, while total costs of revenue rose by a slower pace of 2.8%.

Alongside earnings results, the company also raised its guidance for annual parcel volume growth. It now expects a 20%-24% increase in total parcel volume for 2023, up from the previously indicated range of 18%-22%.

The company expects full-year market share to rise by at least 1.5 percentage points. ZTO's market share stood at 23.4% for the first quarter.

Citi analysts have consistently signaled a preference for ZTO as their top pick in China's parcel-delivery sector.

"We expect ZTO to continue to lead the industry with better ability to balance between volume and profit," the analysts said in a recent note.

Write to Yifan Wang at yifan.wang@wsj.com

(END) Dow Jones Newswires

May 18, 2023 01:30 ET (05:30 GMT)

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