You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” or in other parts of this annual report on Form 20-F. A. Operating Results General Factors Affecting Our Results of Operations Demand from China e-commerce industry for express delivery services We have benefited from the rapid growth of China’s e-commerce industry and its demand for more express delivery services, and our business and growth depend on and contribute to the viability and prospects of the e-commerce industry in China. We anticipate that the demand for express delivery services will continue to grow. Market conditions and our market position The market conditions, the competitive landscape and our market position in the express delivery industry will affect the pricing of our services and in turn, our revenue and operating income. Operating leverage of our network partner model Our business model is highly scalable and flexible. It enables us to expand our business operation efficiently by leveraging the resources and operating capabilities of our network partners with minimum capital requirements and operating expenditures. In addition, we can proactively adjust our network capacity to address peak demands and respond to seasonality. For instance, we have the ability to allocate sorting capacity among adjacent sorting hubs, and our network partners have flexibility to add temporary workers. The scalability of our business model has helped us expand geographic coverage and capture incremental growth in parcel volume, as well as improve operating efficiencies. Our continued investment in infrastructure, technology and people We continue to invest in our sorting hubs and line-haul fleets, as well as technology infrastructure and people, particularly talent in overall management, business operation and information technology. We expect our continued investments to further improve our parcel handling capacity, increase market penetration, and enhance customer services and operational efficiency. Our ability to broaden service offerings and diversify customer base Our results of operations are also affected by our ability to introduce new service offerings and expand and further penetrate our customer base. We are exploring new service offerings to capture existing and new market growth opportunities, including cross-border e-commerce, less-than-truckload logistics and backhaul trucking logistics of agricultural products. We also plan to expand our customer base across different segments and industries. 100 Table of Contents Key Line Items and Specific Factors Affecting Our Results of Operations Revenues Revenues ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands) Express delivery services ​ 35,488,060 92.4 40,953,034 92.5 45,726,365 6,538,783 93.1 Freight forwarding services ​ 906,802 2.4 885,410 2.0 808,000 115,542 1.7 Sale of accessories ​ 1,876,624 4.9 2,300,392 5.2 2,444,323 349,534 5.0 Others ​ 147,429 0.3 141,884 0.3 119,979 17,157 0.2 Total revenues ​ 38,418,915 100.0 44,280,720 100.0 49,098,667 7,021,016 100.0 ​ We derive a substantial part of our revenues from express delivery services that we provide to our network partners, which mainly include parcel sorting and line-haul transportation. We charge our network partners a network transit fee for each parcel that is processed through our network. Such fees represented 91.4%, 85.1% and 71.7% of our total express delivery services revenues in 2023, 2024 and 2025, respectively. In addition, we also directly provide express delivery services to certain enterprise customers, including both e-commerce and traditional merchants, providing express delivery services and handling return parcels for e-commerce platforms. Revenues from our express delivery services to such enterprise customers accounted for 8.6%, 14.9% and 28.3% of our total express delivery services revenues in 2023, 2024 and 2025, respectively. We also generate revenues from the sale of ancillary materials, such as portable barcode readers, thermal paper and ZTO-branded packing materials and uniforms, to our network partners. Our revenues are primarily driven by our parcel volume and the network transit fee we charge our network partners for each parcel going through our network. In general, our parcel volume is affected by the various factors driving the growth of China’s e-commerce industry, as we generate the majority of our parcel volume by having our network partners serving end customers that carry out business on various e-commerce platforms in China. Our parcel volume is also affected by our ability to scale our network to meet increases in demand and the ability of our network partners and us to provide high-quality services to our end customers at a competitive price. Our annual parcel volume increased from 30,202 million in 2023 and to 34,010 million in 2024 and further to 38,517 million in 2025. We determine the level of pricing of our network transit fee based on the operating costs of our business while also considering other factors, including market conditions and competition as well as our service quality. The network transit fees we charge our network partners are primarily measured by (i) a fixed amount for a waybill attached to each parcel and (ii) a variable amount per parcel for sorting and line-haul transportation based on the parcel weight and route distance. The delivery service fees we charge the enterprise customers are also based on parcel weight and route distance. Our network partners generally charge each parcel sender a delivery services fee directly. They have full discretion over the pricing of their services after taking into consideration certain of their costs, including the network transit fees we charge them and other factors, including market conditions and competition as well as their service quality. There has historically been decline in the delivery services fees charged by our network partners to parcel senders partially due to decreasing unit operational costs and market competition. We have been able to adjust the level of network transit fees based on market conditions and our operating costs. We recognize revenues from express delivery services over time as we perform the services. We act as the principal rather than the agent for express delivery service provided to enterprise customers based on analysis of our revenue arrangements using a control model. In the majority of our arrangements, we consider the pickup outlets operated by our network partners to be our customers. Our revenues recorded for those arrangements do not include the last-mile delivery fee because we act as an agent for last-mile delivery services and we are only arranging for services to be provided by the last-mile network partner. We also provide freight forwarding services through the acquired business of China Oriental Express Co., Ltd. and its subsidiaries, which we refer to as the COE Business, a freight forwarding and international logistics services provider in Hong Kong and Shenzhen. Revenue from freight forwarding services is recognized over time when services are rendered. Our freight forwarding revenue is primarily driven by our freight volume. We determine and periodically review and adjust our fee levels based on the prevailing market conditions, operating costs and service level. 101 Table of Contents Cost of Revenues In addition to the level of network transit fees we charge our network partners, our profitability also depends on our ability to control our costs as we expand. Our cost of revenues mainly consists of (i) line-haul transportation cost, (ii) sorting hub cost, (iii) freight forwarding cost, (iv) cost of accessories sold, and (v) other costs. The following table sets forth the components of our cost of revenues, in absolute amounts and as percentages of our revenues for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ % ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ ​ % ​ ​ (in thousands) Line-haul transportation cost ​ 13,591,627 35.4 13,966,446 31.5 13,970,542 1,997,761 28.5 Sorting hub cost ​ 8,253,522 21.5 9,163,784 20.7 9,837,678 1,406,769 20.0 Freight forwarding cost ​ 854,533 2.2 828,270 1.9 760,308 108,723 1.5 Cost of accessories sold ​ 513,391 1.3 651,729 1.5 577,950 82,646 1.2 Other costs ​ 3,543,316 9.2 5,953,399 13.4 11,680,748 1,670,324 23.8 Total cost of revenues ​ 26,756,389 69.6 30,563,628 69.0 36,827,226 5,266,223 75.0 ​ Line-haul transportation cost primarily includes (i) payment for services by outsourced fleets, (ii) truck fuel costs and tolls incurred by the vehicles we own, (iii) employee compensation and other benefits for drivers of the vehicles we own, (iv) air transportation cost and (v) depreciation and maintenance costs of the vehicles we own. Total line-haul transportation cost accounted for 35.4%, 31.5% and 28.5% of our revenues in 2023, 2024 and 2025, respectively. Since 2019, we increased usage of the vehicles that we own ourselves with an increasing number of higher-capacity trailer trucks, especially during the peak season, resulting in improved transportation cost efficiencies. Sorting hub cost includes (i) labor costs, (ii) land lease costs, (iii) depreciation of property and equipment and amortization of land use rights and (iv) other operating costs. Total sorting hub cost accounted for 21.5%, 20.7% and 20.0% of our revenues 2023, 2024 and 2025, respectively. Freight forwarding costs relate to the freight forwarding services provided by the COE Business we acquired on October 1, 2017. Cost of accessories sold, which mainly includes cost of accessories that we sell to our network partners, such as (i) portable bar code readers, (ii) thermal paper used for digital waybill printing, and (iii) ZTO-branded packing materials and uniforms, accounted for 1.3%, 1.5% and 1.2% of our revenues in 2023, 2024 and 2025, respectively. Cost of accessories sold as a percentage of our revenues from sale of accessories was 27.4%, 28.3% and 23.6% in 2023, 2024 and 2025, respectively. Other costs, which mainly include (i) information technology related cost, (ii) pickup and dispatching costs paid to network partners associated with serving enterprise customers, and (iii) business tax surcharges, accounted for 9.2%, 13.4% and 23.8% of our revenues in 2023, 2024 and 2025, respectively. To maintain competitive pricing and enhance profit per parcel, we must continue to control our costs and improve our operating efficiency. We have adopted various cost-control measures. For example, fuel cost can be reduced through the use of more fuel-efficient vehicles, and unit transportation cost can be reduced by adding cost efficient, high-capacity line-haul trucks to our fleet and a gradual shift to a direct shipping model by selected network partners, and labor costs can be contained through wider implementation of automated sorting equipment. 102 Table of Contents Selling, General and Administrative Expenses Our selling, general and administrative expenses, which consist primarily of (i) salaries and other benefits for management and employees, (ii) depreciation and rental costs for office facilities, and (iii) legal, finance, and other corporate overhead costs, accounted for 6.3%, 6.1% and 5.4% of our revenues in 2023, 2024 and 2025, respectively. Our selling, general and administrative expenses also included share-based compensation expenses of RMB255.0 million, RMB318.7 million and RMB229.3 million (US$32.8 million) in 2023, 2024 and 2025, respectively, which accounted for 0.7%, 0.7% and 0.5% of our revenues in the corresponding periods. We expect that our selling, general and administrative expenses will continue to increase as we hire additional personnel and incur additional costs in connection with the expansion of our business operations, enhancement of management capabilities and grant of share incentives. Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amounts and as percentages of our total revenues. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ RMB ​ ​ % ​ ​ RMB ​ ​ % ​ ​ RMB ​ ​ US$ ​ ​ % ​ ​ (in thousands except percentages) Revenues ​ 38,418,915 ​ 100.0 ​ 44,280,720 ​ 100.0 ​ 49,098,667 ​ 7,021,016 ​ 100.0 Cost of revenues ​ (26,756,389) ​ (69.6) ​ (30,563,628) ​ (69.0) ​ (36,827,226) ​ (5,266,223) ​ (75.0) Gross profit ​ 11,662,526 ​ 30.4 ​ 13,717,092 ​ 31.0 ​ 12,271,441 ​ 1,754,793 ​ 25.0 Operating income (expenses)(1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling, general and administrative ​ (2,425,253) ​ (6.3) ​ (2,690,017) ​ (6.1) ​ (2,637,560) ​ (377,166) ​ (5.4) Other operating income, net ​ 770,651 ​ 2.0 ​ 749,784 ​ 1.7 ​ 840,980 ​ 120,259 ​ 1.7 Total operating expenses ​ (1,654,602) ​ (4.3) ​ (1,940,233) ​ (4.4) ​ (1,796,580) ​ (256,907) ​ (3.7) Income from operations ​ 10,007,924 ​ 26.1 ​ 11,776,859 ​ 26.6 ​ 10,474,861 ​ 1,497,886 ​ 21.3 Other income (expenses) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 706,765 ​ 1.9 ​ 993,535 ​ 2.2 ​ 747,072 ​ 106,830 ​ 1.5 Interest expense ​ (289,533) ​ (0.8) ​ (337,919) ​ (0.8) ​ (248,612) ​ (35,551) ​ (0.5) Gain from fair value changes of financial instruments ​ 164,517 ​ 0.4 ​ 202,886 ​ 0.5 ​ 126,038 ​ 18,023 ​ 0.3 Gain/(loss) on disposal of equity investees and subsidiary ​ 5,485 ​ 0.0 ​ (10,518) ​ 0.0 ​ 37,034 ​ 5,296 ​ 0.1 Impairment of investment in equity investees ​ — ​ — ​ (931,367) ​ (2.1) ​ — ​ — ​ — Impairment of goodwill ​ — ​ — ​ — ​ — ​ (84,431) ​ (12,073) ​ (0.2) Foreign currency exchange gain/(loss), before tax ​ 93,543 ​ 0.2 ​ (17,930) ​ 0.0 ​ 1,542 ​ 221 ​ 0.0 Income before income tax, and share of loss in equity method investments ​ 10,688,701 ​ 27.8 ​ 11,675,546 ​ 26.4 ​ 11,053,504 ​ 1,580,632 ​ 22.5 Income tax expense ​ (1,938,600) ​ (5.0) ​ (2,845,361) ​ (6.4) ​ (1,905,236) ​ (272,445) ​ (3.9) Share of gain in equity method investments ​ 4,356 ​ 0.0 ​ 57,410 ​ 0.1 ​ 87,393 ​ 12,497 ​ 0.2 Net Income ​ 8,754,457 ​ 22.8 ​ 8,887,595 ​ 20.1 ​ 9,235,661 ​ 1,320,684 ​ 18.8 Net loss/(income) attributable to noncontrolling interests ​ (5,453) ​ 0.0 ​ (70,760) ​ (0.2) ​ (155,010) ​ (22,166) ​ (0.3) Net income attributable to ZTO Express (Cayman) Inc. ​ 8,749,004 ​ 22.8 ​ 8,816,835 ​ 19.9 ​ 9,080,651 ​ 1,298,518 ​ 18.5 (1) Our operating income (expenses) in 2023, 2024 and 2025 includes RMB255.0, RMB318.7 million and RMB229.3 million (US$32.8 million), respectively, of share-based compensation expenses, accounting for 0.7%, 0.7% and 0.5% of our total revenues in the same periods, respectively. ​ 103 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Revenues Our revenues increased by 10.9% to RMB49.1 billion (US$7.0 billion) in 2025 from RMB44.3 billion in 2024. Revenue from the core express delivery business increased by 11.3% compared to the same period of 2024 as a net result of a 13.3% growth in parcel volume and a 1.7% decrease in parcel unit price. Key account revenue, generated by direct sales organizations, increased by 111.8% mainly driven by increase in e-commerce return parcels. Revenue from freight forwarding services decreased by 8.7% compared to the same period of 2024. Revenue from sales of accessories, largely consisted of sales of thermal paper for digital waybills, increased by 6.3% in line with parcel volume growth. Cost of Revenues Our total cost of revenues increased by 20.5% to RMB36.8 billion (US$5.3 billion) in 2025 from RMB30.6 billion in 2024. This increase primarily resulted from increases in sorting hub operating cost by 7.4% to RMB9.8 billion (US$1.4 billion) and other costs by 96.2% to RMB11.7 billion (US$1.7 billion), partially offset by the decrease in cost of accessories sold by 11.3% to RMB578.0 million (US$82.6 million). Line-haul transportation cost. Our line-haul transportation cost was RMB14.0 billion (US$2.0 billion) in 2025 compared to RMB14.0 billion in 2024. The unit transportation cost decreased by 12.2% or 5 cents mainly attributable to better economies of scale and improved load rate through more effective route planning. Sorting hub cost. Our sorting hub cost increased by 7.4% to RMB9.8 billion (US$1.4 billion) in 2025 from RMB9.2 billion in 2024. The increase primarily consisted of (i) RMB432.5 million (US$61.8 million) increase in labor-associated costs, a net result of wage increases partially offset by automation-driven efficiency improvement, and (ii) RMB276.6 million (US$39.6 million) increase in depreciation and amortization costs associated with automation facilities and equipment upgrades. Sorting hub operating cost per unit decreased 3.7% or 1 cent as automation and standardization in operating procedures plus effective performance evaluation continued to dig deep for productivity gain. Cost of accessories sold. Our cost of accessories sold decreased by 11.3% to RMB578.0million (US$82.6 million) in 2025 from RMB651.7 million in 2024. Other costs. Other costs increased by 96.2% to RMB11.7 billion (US$1.7 billion) in 2024 from RMB6.0 billion in 2024, primarily due to RMB5.5 billion (US$0.8 billion) increase in serving key account customers. Gross Profit Our gross profit decreased by 10.5% to RMB12.3 billion (US$1.8 billion) in 2025 from RMB13.7 billion in 2024, primarily attributable to 13.3% parcel volume growth offsetting 21.0% parcel unit profit decrease. Operating Expenses Our total operating expenses decreased by 7.4% to RMB1,796.6 million (US$256.9 million) in 2025 from RMB1,940.2 million in 2024. Selling, general and administrative expenses. Our selling, general and administrative expenses decreased by 2.0% to RMB2,637.6 million (US$377.2 million) in 2025 from RMB2,690.0 million in 2024. The decrease was primarily driven by RMB23.5 million (US$3.4 million) decline in compensation and benefit expenses. Selling, general and administrative expenses as a percentage of total revenues decreased to 5.4% from 6.1% in the prior year, reflecting a further optimized corporate structure. Other operating income, net. We had a net other operating income of RMB841.0 million (US$120.3 million) in 2025, compared with RMB749.8 million in 2024. Other operating income mainly consisted of (i) RMB547.6 million (US$78.3 million) of government subsidies and tax rebates, (ii) RMB201.7 million (US$28.8 million) of rental income, and (iii) RMB24.1 million (US$3.4 million) ADR fee rebate. 104 Table of Contents Other Income and Expenses Interest income. Interest income decreased to RMB747.1 million (US$106.8 million) in 2025 from RMB993.5 million in 2024, primarily due to the decreased average daily balance of cash and interest-earning bank deposits. Interest expense. Our interest expense decreased to RMB248.6 million (US$35.6 million) in 2025 from RMB337.9 million in 2024, primarily due to (i) a lower average interest rate on borrowings and (ii) a reduction in convertible bond interest expense, as most convertible bonds were redeemed in the third quarter of 2025. Gain from fair value changes of financial instruments. Our gain from fair value changes of financial instruments was RMB126.0 million (US$18.0 million) in 2025, compared with a gain of RMB202.9 million in 2024. Such gain or loss from fair value changes of the financial instruments is quoted by commercial banks according to market-based estimation of future redemption prices. Impairment of goodwill. Impairment of goodwill was RMB84.4 million (US$12.1 million), related to the October 2017 acquisition of China Oriental Express Co., Ltd.’s core freight forwarding business. This non-recurring charge was recognized because the fair value of the acquired operations fell below its carrying amount during the second quarter of 2025. Foreign currency exchange gain (loss). We had a foreign currency exchange gain of RMB1.5 million (US$0.2 million), compared to a loss of RMB17.9 million in 2024, mainly due to the fluctuation of the foreign currency-denominated bank deposits against the Chinese Renminbi. Income Tax Expense Our income tax expense was RMB1,905.2 million (US$272.4 million) compared to RMB2,845.4 million last year. The overall income tax rate decreased by 7.1 percentage points year over year, mainly due to (i) an income tax refund of RMB375.8 million (US$52.8 million) received in the third quarter of 2025 by Shanghai Zhongtongji Network, a wholly owned subsidiary of the Company, upon its recognition as a “Key Software Enterprise” qualifying for a preferential tax rate of 10% for tax year 2024, (ii) a RMB 138.3 million (US$19.8 million) year-over-year decrease in withholding tax accruals on dividend payable to ZTO Express (Hong Kong) Limited, and (iii) in 2024, there was a RMB931.4 million (US$133.2 million) non-deductible impairment of investment in equity investees, which had significantly increased the effective tax rate in 2024. Net Income Our net income increased to RMB9,235.7 million (US$1,320.7 million) in 2025 from RMB8,887.6 million in 2024 primarily as a result of the foregoing. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 For a detailed description of the comparison of our operating results for the year ended December 31, 2024 to the year ended December 31, 2023, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Results of Operations—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023” of our annual report on Form 20-F filed with the Securities and Exchange Commission on April 17, 2025. Taxation We generate the majority of our operating income from our PRC operations. Income tax liability is calculated based on a separate return basis as if we had filed separate tax returns for all the periods presented. The Cayman Islands and the British Virgin Islands Under the current laws of the Cayman Islands and the British Virgin Islands, we are not subject to tax on our income or capital gains. 105 Table of Contents Hong Kong Under the current Hong Kong Inland Revenue Ordinance, our subsidiaries domiciled in Hong Kong have introduced 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%. Under the Hong Kong tax laws, we are exempted from the Hong Kong income tax on our foreign-derived income. In addition, payments of dividends from our Hong Kong subsidiary to us are not subject to any Hong Kong withholding tax. PRC Under the PRC Enterprise Income Tax Law, our PRC subsidiaries and the consolidated affiliated entities are in principle subject to enterprise income tax at a statutory rate of 25%. This 25% rate applies to most of our subsidiaries and consolidated affiliated entities established in China. Some of our subsidiaries and consolidated affiliated entities are entitled to a favorable statutory tax rate of 10% or 15% because of their qualifications as a high and new technology enterprise, or as a key software enterprise, or as enterprises within the Catalogue of Encouraged Industries in Western Regions or because of favorable local tax treatment for various terms. In addition, some of our subsidiaries and consolidated affiliated entities are entitled to a favorable tax treatment in relation to their research and development expenses, such as the increased pre-tax super deduction ratio for research and development expenses. See “Item 4. Information on the Company—B. Business Overview—Regulation—Regulations Relating to Tax—Enterprise Income Tax” for descriptions of these preferential tax policies. Under Circular 36, our PRC subsidiaries and the consolidated affiliated entities are subject to VAT, at a rate of 6% to 17% on proceeds received from customers and are entitled to a refund for VAT already paid or borne on the goods or services purchased by it and utilized in the production of goods or provisions of services that have generated the gross sales proceeds. Pursuant to Circular 32 and Circular 39, the VAT rate applicable to VAT taxpayers were adjusted to a range from 6% to 13%, among which taxable activities related to transportation and postal services shall be subject to a VAT rate of 9%. Under Circular 39 and the then effective Announcement on Relevant Value-added Tax Policies for Promoting the Relief and Development of Stranded Industries in Service Sector issued by the Ministry of Finance and the State Taxation Administration on March 3, 2022, during the period from April 1, 2019 to December 31, 2022, taxpayers of manufacturing and living service industries enjoyed an extra 10% for deduction of the tax payable, which is calculated based on the input VAT filed with the tax bureau. Under the Announcement on Clarifying the Value-added Tax Reduction and Exemption Policy for Small-scale VAT Taxpayers and Other Policies issued by the Ministry of Finance and the State Taxation Administration on January 9, 2023, taxpayers in productive service industries are allowed to deduct the tax payable by 5% of the deductible input tax from January 1, 2023 to December 31, 2023. Prior to September 1, 2025, pursuant to the Announcement to Further Step up the Application of End-of-Period Excess Input Value-Added Tax Credit Refund Policies and the Announcement on Expanding the Scope of Industries Eligible for the Policy of Full Refund of Incremental VAT Credits, promulgated by the Ministry of Finance and the State Taxation Administration respectively on March 21, 2022 and June 7, 2022, the end-of-period VAT credit refund policy was enhanced for “transport, warehousing and postal” and “residential services, repairs and other services” sectors, applicable to enterprises eligible for monthly refund of newly added unutilized input VAT and one-off refund of existing unutilized input VAT, provided that their VAT taxable sales derived from such sectors accounted for more than 50% of their total VAT taxable sales amount. Since September 1, 2025, the above-mentioned policies have been repealed and replaced by the Announcement on Improving the VAT End-of-Period Excess Input Credit Refund Policy, promulgated by the Ministry of Finance and the State Taxation Administration. Pursuant to this announcement, taxpayers in the “transport, warehousing and postal” and “residential services, repairs and other services” sectors may only apply for a proportional refund of the incremental excess input tax credit when satisfying the specified conditions. Pursuant to the Announcement on Clarifying Value-Added Tax Policies for Express Delivery Services and Other Matters, promulgated by the Ministry of Finance and the State Taxation Administration on August 11, 2025, income derived by express delivery enterprises from providing express delivery services shall be subject to VAT under the item “collection and delivery services” which is subject to VAT at a rate of 6%. ​ 106 Table of Contents Critical Accounting Estimates We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of each fiscal period and our reported amounts of revenue and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historical experience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. Financing Receivables, Net of Allowance Financing receivables are primarily generated from the financial services we provided to qualified network partners. Financing receivables are recorded at the principal net of allowance for credit losses and include accrued interest receivable as of the balance sheet date. The financing periods granted by us to the borrowers generally range from 1 to 60 months. Allowance for credit losses relating to financing receivables represents our best estimate of the losses inherent in the outstanding portfolio of loans. Judgment is required to determine the allowance amounts and whether such amounts are adequate to cover potential credit losses, and periodic reviews are performed to ensure such amounts continue to reflect the best estimate of the losses inherent in the outstanding portfolio of loans. We have developed a forward looking current expected credit loss 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. We had a financing receivables balance of RMB2,040.1 million and RMB1,714.8 million (US$245.2 million) as of December 31, 2024 and 2025. No material default occurred in 2023, 2024 and 2025. RMB187.0 million and RMB210.5 million (US$30.1 million) of allowance of credit losses relating to financing receivables were recorded as of December 31, 2024 and 2025, respectively. The expected credit loss recognized for financing receivables was RMB50.9 million, RMB36.9 million and RMB52.3 million (US$7.5 million) for the years ended December 31, 2023, 2024 and 2025, respectively. The table below sets forth the maturity profiles of our financing receivables before provision of credit losses as of December 31, 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Within ​ ​ ​ One to ​ ​ ​ Two to ​ ​ ​ Over three ​ ​ December 31, 2025 ​ one year ​ two years ​ three years ​ years ​ Total Balance (RMB in thousands) 1,925,325 ​ 772,300 ​ 292,363 ​ 805,663 ​ 54,999 ​ Percentage of Total Balance 100.0 ​ 40.1 ​ 15.2 ​ 41.8 ​ 2.9 ​ ​ Recently Issued Accounting Pronouncement A list of recently issued accounting pronouncements that are relevant to us is included in Note 2(z) “Recently issued accounting pronouncement” to our audited consolidated financial statements included elsewhere in this annual report. 107 Table of Contents B. Liquidity and Capital Resources The following table sets forth the movements of our cash, cash equivalents and restricted cash for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2023 ​ 2024 ​ 2025 ​ ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ RMB ​ ​ ​ US$ ​ ​ (in thousands) Summary Consolidated Cash Flow Data: ​ ​ ​ ​ Net cash provided by operating activities 13,360,967 ​ 11,429,436 ​ 11,968,419 ​ 1,711,461 Net cash used in investing activities (12,252,751) ​ (5,980,724) ​ (4,827,106) ​ (690,267) Net cash (used in)/provided by financing activities (769,836) ​ (4,995,180) ​ (10,567,203) ​ (1,511,090) Effect of exchange rate changes on cash, cash equivalents and restricted cash 109,843 ​ 26,105 ​ (58,340) ​ (8,343) Net increase/(decrease) in cash, cash equivalents and restricted cash ​ 448,223 ​ 479,637 ​ (3,484,230) ​ (498,239) Cash, cash equivalents and restricted cash at beginning of year 12,603,087 ​ 13,051,310 ​ 13,530,947 ​ 1,934,900 Cash, cash equivalents and restricted cash at end of year 13,051,310 ​ 13,530,947 ​ 10,046,717 ​ 1,436,661 ​ Our principal sources of liquidity have been proceeds from cash flows from operating activities and financing activities in the past three years. ● In September 2020, we raised approximately HK$11.1 billion (US$1.4 billion) from the public offering of Class A ordinary shares in connection with our secondary listing in Hong Kong, after deducting underwriting commissions and the offering expenses payable by us. ● In September 2022, we completed an offering of US$1 billion in aggregate principal amount of convertible senior notes due 2027, or the 2027 Notes. The 2027 Notes bear interest at a rate of 1.50% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on March 1, 2023. The 2027 Notes will mature on September 1, 2027, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The holders may require us to repurchase for cash all or part of 2027 Notes on September 2, 2025, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest. In connection with the offering of the 2027 Notes, we have entered into capped call transactions with certain counterparties. The cap price of the capped call transactions is initially US$36.48 per ADS and is subject to adjustment under the terms of the capped call transactions. On September 2, 2025, the Company repurchased an aggregate principal amount of US$982,252(RMB7,003,850) for the Notes. Following settlement of the repurchase, the aggregate principal amount of US$17,748 for the Notes will remain outstanding. ● In February 2026, we completed an offering of US$1.5 billion in aggregate principal amount of convertible senior notes due 2031, or the 2031 Notes. The 2031 Notes will bear interest at a rate of 0.925% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2026. The 2031 Notes will mature on March 1, 2031, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The holders may requires us to repurchase for cash all or part of 2031 Notes on March 1, 2029, or upon a fundamental change, at a repurchase price equal to 100% of the principal amount of the 2031 Notes to be repurchased, plus accrued and unpaid interest. In connection with the offering of the 2031 Notes, we have entered into capped call transactions with certain counterparties. The cap price of the capped call transactions is initially US$35.9906 per ADS and is subject to adjustment under the terms of the capped call transactions. As of December 31, 2023, 2024 and 2025, our cash and cash equivalents, restricted cash and short-term investments were RMB20.5 billion, RMB22.4 billion and RMB25.7 billion (US$3.7 billion), respectively. Our cash and cash equivalents primarily consist of cash on hand and highly liquid investments, which are unrestricted as to withdrawal or use or have maturities of three months or less when purchased. Restricted cash represents secured deposits held in designated bank accounts for issuance of bank acceptance notes, settlement of derivatives and commencement of construction. Short-term investments consist primarily of dual currency notes and deposits, investments in fixed deposits with maturities between three months and one year and wealth management products within one year. As of December 31, 2025, approximately 79.6% of our cash and cash equivalents, restricted cash and short-term investments were held by subsidiaries and affiliated entities incorporated in China, and approximately 88.6% of our cash and cash equivalents, restricted cash and short-term investments were denominated in Renminbi. 108 Table of Contents We believe that our existing cash and cash equivalents and anticipated cash flow from operations are sufficient to fund our operating activities, capital expenditures and other obligations for at least the next 12 months. However, we may decide to enhance our liquidity position or increase our cash reserve for future expansions and acquisitions through additional financing activities. The issuance and sale of additional equity would result in further dilution to our existing shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that may restrict our operations and ability to make distributions. However, financing may not be available in amounts or on terms acceptable to us, if at all. Although we consolidate the results of the consolidated affiliated entities, we only have access to the assets or earnings of the consolidated affiliated entities through our contractual arrangements with ZTO Express. See “Item 4. Information on the Company—C. Organizational Structure.” For restrictions and limitations on our liquidity and capital resources as a result of our corporate structure, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Holding Company Structure.” In addition, we would need to accrue and pay withholding taxes if we were to distribute funds from our subsidiaries and the consolidated affiliated entities in China to our offshore subsidiaries. In utilizing the proceeds we receive from the public offering of Class A ordinary shares in relation to our secondary listing on the Main Board of the Hong Kong Stock Exchange and other cash received from subsequent transactions that we hold offshore, we may make additional capital contributions to our PRC subsidiaries, establish new PRC operating entities, make loans to our PRC operating entities, or acquire offshore entities with business operations in China in offshore transactions. Most of these uses are subject to PRC regulations and approvals. Operating Activities Net cash provided by operating activities in 2025 was RMB12.0 billion (US$1.7 billion), which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB50.0 billion (US$7.1 billion), while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB32.1 billion (US$4.6 billion); (ii) RMB3.5 billion (US$0.5 billion) paid for labor related costs, including salaries, social insurances and other benefits; (iii) cash outflow of income tax of RMB2.6 billion (US$0.4 billion); (iv) cash inflow of subsidy of RMB547.6 million (US$78.3 million); (v) cash inflow of interest income of RMB714.1 million (US$102.1 million); and (vi) cash outflow of RMB772.7 million (US$110.5 million) as other administrative costs. Net cash provided by operating activities in 2024 was RMB11.4 billion, which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB43.0 billion, while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB21.1 billion; (ii) RMB8.7 billion paid for labor related costs, including salaries, social insurances and other benefits; (iii) cash outflow of income tax of RMB2.4 billion; (iv) cash inflow of interest income of RMB542.9 million; (v) cash inflow of subsidy of RMB491.0 million; and (vi) cash outflow of RMB454.3 million as other administrative costs. Net cash provided by operating activities in 2023 was RMB13.4 billion, which was mainly attributable to the following factors: (i) our express delivery services and other revenue streams generated net cash inflow of RMB38.8 billion, while the aggregate cash outflow for transportation cost, sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB15.8 billion; (ii) RMB8.8 billion paid for labor related costs, including salaries, social insurances and other benefits; (iii) cash outflow of income tax of RMB1.7 billion; (iv) cash inflow of interest income of RMB899.5 million; (v) cash inflow of subsidy of RMB674.4 million; and (vi) cash outflow of RMB594.0 million as other administrative costs. Investing Activities Net cash used in investing activities in 2025 was RMB4.8 billion (US$0.7 billion), primarily due to (i) purchase of short-term investment products of RMB15.1 billion (US$2.2 billion), while maturity of short-term investment products amounted to RMB16.6 billion (US$2.4 billion); (ii) purchase of long-term investment products of RMB1.4 billion (US$0.2 billion); (iii) purchase of property and equipment of RMB5.2 billion (US$0.7 million), including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iv) purchase of land use rights in an amount of RMB860.1 million (US$123.0 million); (v) cash returned from the investments in equity investees of RMB686.3 million (US$98.1 million); and (vi) cash received from disposal of subsidiaries of RMB220.4 million (US$31.5 million). 109 Table of Contents Net cash used in investing activities in 2024 was RMB6.0 billion, primarily due to (i) purchase of short-term investment products of RMB13.7 billion, while maturity of short-term investment products amounted to RMB15.7 billion; (ii) purchase of long-term investment products of RMB3.9 billion, while maturity of long-term investment products amounted to RMB836.1 million; (iii) purchase of property and equipment of RMB5.2 billion, including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iv) cash received from disposal of investment in equity investees of RMB719.8 million; and (v) purchase of land use rights in an amount of RMB694.0 million. Net cash used in investing activities in 2023 was RMB12.3 billion, primarily due to (i) purchase of short-term investment products of RMB11.3 billion, while maturity of short-term investment products amounted to RMB9.8 billion; (ii) purchase of long-term investment products of RMB10.1 billion, while maturity of long-term investment products amounted to RMB5,240.7 million; (iii) purchase of property and equipment of RMB6.5 billion, including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting equipment; (iv) cash received from disposal of investment in equity investees and subsidiaries and others of RMB476.9 million; and (v) purchase of land use rights in an amount of RMB140.9 million. Financing Activities Net cash used in financing activities in 2025 was RMB10.6 billion (US$1.5 billion), which was mainly attributable to the following factors: (i) repurchase of convertible notes of RMB7.0 billion (US$1.0 billion); (ii) payment of dividends of RMB3.8 billion (US$0.5 billion); (iii) proceeds from short-term borrowings in an amount of RMB18.3 billion (US$2.6 billion), partially offset by the repayment of short-term borrowings of RMB16.9 billion (US$2.4 billion); and (iv) share repurchase of RMB1.3 billion (US$0.2 billion). Net cash used in financing activities in 2024 was RMB5.0 billion, which was mainly attributable to the following factors: (i) payment of dividends of RMB5.6 billion; and (ii) proceeds from short-term borrowings in an amount of RMB19.7 billion, partially offset by the repayment of short-term borrowings of RMB18.0 billion; and (iii) share repurchase of RMB1,157.5 million. Net cash used in financing activities in 2023 was RMB769.8 million, which was mainly attributable to the following factors: (i) payment of dividends of RMB2.1 billion; and (ii) proceeds from short-term borrowings in an amount of RMB12.3 billion, partially offset by the repayment of short-term borrowings of RMB9.9 billion; and (iii) share repurchase of RMB1,006.5 million. Material Cash Requirements Our material cash requirements as of December 31, 2025 and any subsequent interim period primarily include our capital expenditures, capital commitments, operating lease commitments, investment commitments, short-term debt obligations, convertible senior notes obligations and dividend payment. In connection with the purchases of property and equipment, purchases of land use rights, the expansion of our truck fleet and the upgrade of our equipment and facilities, we incurred capital expenditures of an aggregate of approximately RMB6.7 billion, RMB5.9 billion and RMB6.1 billion (US$0.9 billion) in 2023, 2024 and 2025, respectively. We intend to fund our future capital expenditures with our existing cash balance and other financing alternatives. We will continue to make capital expenditures to support the growth of our business. Our capital commitments primarily relate to commitments on construction of office building, sorting hubs and warehouse facilities. Our capital commitments as of December 31, 2025 amounted to RMB4.4 billion (US$624.8 million). All of these capital commitments will be fulfilled based on the construction progress. Our operating lease commitments consist of the commitments under the lease agreements for our office space, sorting hubs and warehouse facilities. We lease office space, sorting hubs and warehouse facilities under non-cancellable operating lease agreements that expire at various dates through June 2045. As of December 31, 2025, we also had lease commitments amounting to RMB428.5 million (US$61.3 million), certain of which were secured by the rental deposits and all of which were unguaranteed. Our investment commitments primarily consist of our commitment to make capital contributions to certain equity investees. We were obligated to pay RMB20.2 million (US$2.9 million) for certain investment in equity investees as of December 31, 2025 with payment due within three years. 110 Table of Contents As of December 31, 2025, we had outstanding principal amount of short-term bank borrowings of RMB10.9 billion (US$1.6 billion), among which RMB7.3 billion (US$1.0 million) were unsecured and unguaranteed. In 2025, we entered into short-term bank loan contracts and discounted notes arrangements with several banks with an aggregate amount of RMB18.3 billion (US$2.6 billion). The weighted average interest rate of short-term bank borrowings drawn was 1.13% in 2025. As of December 31, 2025, we had outstanding principal amount of long-term bank borrowings of RMB18 million (US$2.6 million), all of which were unsecured and unguaranteed. In 2025, we entered into long-term bank loan contracts with several banks with an aggregate amount of RMB216 million (US$30.9 million). The weighted average interest rate of long-term bank borrowings drawn was 2.40% in 2025. Our convertible senior notes obligations represent the principal amount and cash interests in connection with our 2027 Notes and 2031 Notes. Holders of the 2027 Notes have the right to require us to repurchase their notes on September 2, 2025. In addition, the terms of the 2027 Notes contain protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of the 2027 Notes), as well as provisions regarding our ability to redeem the existing notes in case of certain changes in tax law or at any time if less than 10% of the aggregate principal amount of the 2027 Notes originally issued remains outstanding at such time. Holders of the 2031 Notes have the right to require us to repurchase their notes on March 1, 2029. In addition, the terms of the 2031 Notes contain protections concerning the holders’ right to require us to repurchase their notes upon the occurrence of a fundamental change (as defined in the terms of the 2031 Notes), as well as provisions regarding our ability to redeem the existing notes in case of certain changes in tax law or at any time if less than 10% of the aggregate principal amount of the 2031 Notes originally issued remains outstanding at such time. For details, please see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business and Industry—If we cannot obtain sufficient cash when we need it, we may not be able to meet our payment obligations under our notes.” On March 19, 2024, our board of directors approved a cash dividend of US$0.62 per ADS or share for 2023 to holders of ADSs and ordinary shares of record as of the close of business on April 10, 2024. On August 20, 2024, our board of directors approved an interim cash dividend of US$0.35 per ADS and ordinary share for the six months ended June 30, 2024 to holders of ADSs and ordinary shares of record as of the close of business on September 10, 2024. On March 18, 2025, our board of directors approved a cash dividend of US$0.35 per ADS and ordinary share for the six months ended December 31, 2024 to holders of ADSs and ordinary shares of record as of the close of business on April 10, 2025. On August 19, 2025, our board of directors approved an interim cash dividend of US$0.30 per ADS and ordinary share for the six months ended June 30, 2025, to holders of its ordinary shares and ADSs as of the close of business on September 30, 2025. On March 17, 2026, our board of directors approved a cash dividend of US$0.39 per ADS and ordinary share for the six months ended December 31, 2025, to holders of its ordinary shares and ADSs as of the close of business on April 8, 2026. We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We do not have retained or contingent interests in assets transferred. We have not entered into contractual arrangements that support the credit, liquidity or market risk for transferred assets. We do not have obligations that arise or could arise from variable interests held in an unconsolidated entity, or obligations related to derivative instruments that are both indexed to and classified in our own equity, or not reflected in the statement of financial position. Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2025. 111 Table of Contents Holding Company Structure ZTO is a holding company with no material operations of its own. We conduct our operations primarily through our wholly owned subsidiaries and the consolidated affiliated entities in China. As a result, our ability to pay dividends may depend upon dividends paid by our wholly owned subsidiaries in the future. If our wholly owned subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our wholly owned subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our wholly owned PRC subsidiaries and the consolidated affiliated entities is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by the State Administration of Foreign Exchange. C. Research and Development, Patents and Licenses, Etc. See “Item 4. Information on the Company—B. Business Overview—Information Technology and Intellectual Property.” D. Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025 that are reasonably likely to have a material effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. E. Critical Accounting Estimates For our critical accounting estimates, see “Item 5. Operating And Financial Review And Prospects—A. Operating Results—Critical Accounting Estimates.” F. Safe Harbor See “Forward-Looking Statements” on page 3 of this annual report. ​