Business Corpus: No. 1 Logistics Firm, Backed By Alibaba, Jumps After Earnings BeatZTO Express, a leading Chinese delivery company, jumped Thursday after easily topping earnings estimates as parcel volumes surged. The post No. 1 Logistics Firm, Backed By Alibaba, Jumps After Earnings Beat appeared first on Investor's Business Daily.

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ZTO Express (ZTO), a leading Chinese delivery company, jumped Thursday after easily topping earnings estimates as parcel volumes surged.

EPS more than doubled to 31 cents, topping views for 23 cents, on revenue of $634.4 million, an increase of 41%. Short-term delivery service revenue was $553.8 million. Parcel volume jumped 41.7% to 2.116 billion.

"We remain optimistic on the growth potential for China's express delivery industry over the next two to three years," Chairman and CEO Meisong Lai said in a statement late Wednesday.

"Short-term market conditions could remain competitive. However, our competitive advantage in scale and operational efficiency, superior earnings quality and stability of our partner network will ensure ZTO's sustainable growth and long-term leadership."

ZTO leapt 7.5% to 21.13 in the stock market today, retaking its 50-day average. The stock jumped past a 21.80 buy point on July 16 in strong volume, but later dropped into sell territory. With a 96 Composite Rating, ZTO still holds the No. 1 ranking among transportation and logistics stocks. Echo Global (ECHO) comes in second with a 94.

Last-Mile Delivery Focus

The Alibaba (BABA)-backed firm covers 96% of China's cities and counties. The Chinese e-commerce giant and its logistics arm Cainiao are investing $1.38 billion in ZTO.

ZTO Express serves millions of online merchants and consumers on Alibaba and JD.com (JD).

But in another sign of intensifying competition in the space, Walmart (WMT) and JD.com said Thursday they will invest $500 million in Dada-JD Daojia, a Chinese logistics firm.

After Alibaba and Cainiao announced their investment in ZTO in May, ZTO in June took a 15% stake in Cainiao's last-mile delivery business for a $168 million investment.

The company has made "significant progress" in developing last-mile delivery products and services, said CEO Lai, when ZTO announced the Cainiao stake.

But he acknowledged fierce competition in last-mile delivery services as demand for personalized pickup and delivery grows alongside daily parcel volume.

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