$ZTO is one of the leading players in the intensely competitive Chinese logistics market. Despite standardization across the industry, $ZTO boasts margins >2x the average of its peers.
It is our view that $ZTO 's apparently superior margins are, in fact, just the result of its potentially falsified financial statements.
We believe $ZTO has underreported revenue and costs to engineer these standout results. Our report highlights corroborating evidence, including incessant capital raising, accounting inconsistencies, and numerous conflicts of interest which contradict $ZTO 's exceptional margins.
Characteristic of notorious "China Hustles", $ZTO SAIC filings (PRC) present a totally different reality than its SEC financial statement.
SAIC filings reveal $ZTO 's margins are actually on par with its express delivery peers. While SAIC filings show 6.3%-10.6% net margins between 2019 and 2021, the company reports 15.5%-25.7% net margins in its SEC financial statements.