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Form 424B5 ZTO Express (Cayman)


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TABLE OF CONTENTS
TABLE OF CONTENTS

Table of Contents

Filed Pursuant to Rule 424(b)(5)
Registration No. 333-248730

The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement is not an offer to sell the securities and is not
soliciting offers to buy the securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 15, 2020

Preliminary Prospectus Supplement

(To Prospectus dated September 11, 2020)


LOGO

ZTO Express (Cayman) Inc.

45,000,000 Class A Ordinary Shares

            We are offering 45,000,000 Class A ordinary shares, par value US$0.0001 per share, as part of a Global Offering, or the Global Offering,
consisting of an international offering of 42,750,000 Class A ordinary shares offered hereby, and a Hong Kong public offering of 2,250,000 Class A ordinary shares. The public offering
price for the international offering and the Hong Kong public offering is HK$            per Class A ordinary share, or approximately
US$            per Class A ordinary share
based on an exchange rate of HK$            to US$1.00.

            Our
ADSs are listed on the New York Stock Exchange under the symbol “ZTO.” On September 14, 2020, the closing price of our ADSs on the New York Stock Exchange was US$31.72 per
ADS, or HK$245.84 per Class A ordinary share, based upon an exchange rate of HK$7.7502 to US$1.00. Each ADS represents one Class A ordinary share.

            We
will determine the offer price for both the international offering and the Hong Kong public offering by reference to, among other factors, the closing price of our ADSs on the last
trading day before the pricing of the Global Offering, which is expected to be on or about September 22, 2020. The maximum offer price for the Hong Kong public offering is HK$268.00, or
US$34.58, per Class A ordinary share.

            The
allocation of Class A ordinary shares between the international offering and the Hong Kong public offering is subject to reallocation. For more information, see
“Underwriting” beginning on page S-77 of this prospectus supplement. The public offering price in the international offering may differ from the public offering price in the Hong Kong public
offering. See “Underwriting—Pricing.” The international offering contemplated herein consists of a U.S. offering and a non-U.S. offering made outside the United States in compliance with
applicable law. We are paying a registration fee for Class A ordinary shares sold in the United States, as well as for Class A ordinary shares initially offered and sold outside the
United States in the Global Offering that may be resold from time to time into the United States.

            We
have applied to list our Class A ordinary shares on the Hong Kong Stock Exchange pursuant to Chapter 19C of the Hong Kong Stock Exchange Listing Rules under the stock
code “2057.”

            Our
existing shareholders affiliated with Alibaba Group Holding Limited (“Alibaba”), Alibaba ZT Investment Limited (“Ali ZT”) and Cainiao Smart Logistics Investment Limited (“Cainiao
Smart”), have elected to exercise their preemptive rights (either by themselves or through their respective affiliates) pursuant to that certain investor rights agreement dated June 12, 2018 to
subscribe for an aggregate of 3,654,250 Class A ordinary shares on an assured basis in the Global Offering, representing approximately 8.1% of the Class A ordinary shares offered in
connection with the Global Offering and approximately 0.4% of the ordinary shares outstanding immediately after the Global Offering, without taking into account (i) the Class A ordinary
shares issued and reserved for the purpose of our employee shareholding platform, the holder of which has waived all shareholder rights attached to those shares, (ii) our repurchase of
Class A ordinary shares in the form of ADS and (iii) any allotment and issuance of Class A ordinary shares upon exercise of the option of the international underwriters to
purchase additional Class A ordinary shares in the Global Offering. No preferential treatment will be given Ali ZT and/or Cainiao Smart (and/or their respective affiliates) other than the
assured allocation of 3,654,250 Class A ordinary shares in connection with the Global Offering.

            See “Risk Factors” beginning on page S-14 for a discussion of certain risks that should be considered in
connection with an investment in our Class A ordinary shares.

            Neither the United States Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or
determined that this prospectus supplement or the accompanying prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

            This
prospectus supplement, the accompanying prospectus and the documents referred to herein are not to be issued, circulated or distributed to the public in Hong Kong and do not
constitute an offer to sell nor a solicitation of an offer to buy any securities to the public in Hong Kong. Neither this document nor anything referred to herein forms the basis for any contract or
commitment whatsoever. For the avoidance of doubt, the publication of this prospectus supplement and the document referred to herein shall not be deemed to be an offer of securities made pursuant to a
prospectus issued by or on behalf of the issuer for the purposes of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong nor shall it constitute an
advertisement, invitation or document containing an invitation to the public to enter into or offer to enter into an agreement to acquire, dispose of, subscribe for or underwrite securities for the
purposes of the Securities and Futures Ordinance (Cap. 571) of Hong Kong. A copy of this prospectus supplement and the document referred to herein may, however, be issued in Hong Kong only to
“professional investors” within the meaning as defined in the Securities and Futures Ordinance (Cap. 571) and any rules made thereunder.

PRICE HK$                PER CLASS A ORDINARY SHARE

       
 
    Per Class A Ordinary Share   Total
 

Public offering price

  HK$(1)   HK$
 

Underwriting discounts and commissions(2)

  HK$   HK$
 

Proceeds to us (before expenses)(3)

  HK$   HK$

 

(1)
Equivalent to US$            per ADS, based upon each ADS representing one Class A ordinary share and an exchange rate of
HK$            to US$1.00 as of          , 2020, per the noon buying rate set forth in the H.10 statistical release of the U.S. Federal
Reserve Board.

(2)
See “Underwriting” beginning on page S-77 of this prospectus supplement for additional information regarding total underwriting compensation.
(3)
Includes estimated net proceeds of HK$            from the sale of 2,250,000 Class A ordinary shares in the Hong
Kong public offering.

            We
have granted the international underwriters the option, exercisable by Goldman Sachs (Asia) L.L.C., or the Sole Global Coordinator, on behalf of the international underwriters, to
purchase up to an additional 6,750,000 Class A ordinary shares at the public offering price until 30 days after the last day for the lodging of applications under the Hong Kong public
offering. Goldman Sachs International expects to enter into a borrowing arrangement with Zto Ljf Holding Limited to facilitate the settlement of over-allocations. Goldman Sachs International is
obligated to return Class A ordinary shares to Zto Ljf Holding Limited by exercising the option to purchase additional Class A ordinary shares from us or by making purchases in the open
market. No fees or other remuneration will be paid by the underwriters to us or Zto Ljf Holding Limited for the loan of these Class A ordinary shares.

            The
underwriters expect to deliver the Class A ordinary shares against payment therefor through the facilities of the Central Clearing and Settlement System on or around
                                    , 2020.

Sole Sponsor, Sole Global Coordinator, Joint Bookrunner and Joint Lead Manager

Goldman Sachs

Other Joint Bookrunners and Joint Lead Managers

Other Joint Lead Managers

BOCI   China Renaissance   CLSA   CMBI   Mizuho Securities

The
date of this prospectus supplement
is                                    , 2020.



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TABLE OF CONTENTS

Prospectus Supplement



Prospectus

        You should rely only on the information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. We have not, Zto Ljf
Holding Limited has not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you
should not rely on it. None of the underwriters, Zto Ljf Holding Limited or us is making an offer to sell the securities in any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference is accurate only as of each of their respective dates. Our
business, financial condition, results of operations and prospects may have changed since those dates. Neither this prospectus supplement nor the accompanying prospectus constitutes an offer, or an
invitation on our behalf or the underwriterS to subscribe for and purchase, any of the Class A ordinary shares and may not be used for or in connection with an offer or solicitation by anyone,
in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.



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ABOUT THIS PROSPECTUS SUPPLEMENT

        This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of the Global Offering and
other matters relating to us and our financial condition. The second part, the base prospectus, presents more general information about this offering. The base prospectus was included in the
registration statement on Form F-3 (File No. 333-248730) that we filed with the
SEC on September 11, 2020
and has been updated since that time with additional information that is incorporated by reference. Generally, when we refer only to the “prospectus,”
we are referring to both parts combined, and when we refer to
the “accompanying prospectus,” we are referring to the base prospectus as updated through incorporation by reference.

        If
information in this prospectus supplement differs from information in the accompanying prospectus, you should rely on the information in this prospectus supplement.

        Other
than the Hong Kong public offering, no action is being taken in any jurisdiction outside the United States to permit a public offering of the Class A ordinary shares, and no
action is being taken in any jurisdiction outside the United States to permit the possession or distribution of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons
who come into possession of this prospectus supplement or the accompanying prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions
as to the Global Offering (as defined in the prospectus supplement under the caption “Underwriting”) and the distribution of this prospectus supplement and the accompanying prospectus applicable to
that jurisdiction.

        You
should not consider any information in this prospectus supplement or the accompanying prospectus to be investment, legal or tax advice. You should consult your own counsel,
accountants and other advisors for legal, tax, business, financial and related advice regarding the purchase of any of the securities offered by this prospectus supplement.

        In
this prospectus supplement, unless otherwise indicated or unless the context otherwise requires,

    •
    “ADSs” refer to our American depositary shares, each of which represents one Class A ordinary share;
    •
    “China” or the “PRC” refers to the People’s Republic of China, excluding, for the purposes of this prospectus only, Hong Kong, Macau and
    Taiwan;

    •
    “HK$” and “Hong Kong dollars” are to the legal currency of the Hong Kong Special Administrative Region of the People’s Republic of China;
    •
    “ordinary shares” refer to our Class A and Class B ordinary shares, par value US$0.0001 per share;
    •
    “RMB” refers to the legal currency of China;
    •
    the terms “ZTO,” “we,” “us,” “our company” or “our” refer to ZTO Express (Cayman) Inc., its subsidiaries and its consolidated affiliated
    entities. Depending on the context, references to “we” and “our” may also include the network partners within our network; and

    •
    “U.S. dollars,” “US$,” “dollars” and “$” refer to the legal currency of the United States.

        Our
reporting currency is RMB. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB in this prospectus supplement are made at a rate of
RMB7.0651 to US$1.00, the exchange rate in effect as of June 30, 2020 as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. We make no
representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as the case may be, at any particular rate, or at all. On September 11,
2020, the exchange rate was RMB6.8330 to US$1.00.

        All
discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.

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WHERE YOU CAN FIND MORE INFORMATION

        We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and, in accordance with
the Exchange Act, we file annual reports and other information with the SEC. Information we file with the SEC can be obtained over the internet at the SEC’s website at www.sec.gov.

        This
prospectus supplement is part of a registration statement that we filed with the SEC, using a “shelf” registration process under the Securities Act of 1933, as amended, or the
Securities Act, relating to the securities to be offered. This prospectus supplement does not contain all of the information set forth in the registration statement, certain parts of which are omitted
in accordance with the rules and regulations of the SEC. For further information with respect to ZTO Express (Cayman) Inc. and our securities, reference is hereby made to the registration
statement and the prospectus contained therein. The registration statement, including the exhibits thereto, may be inspected on the SEC’s website.

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

        The SEC allows us to “incorporate by reference” the information we file with or submit to the SEC, which means that we can disclose important
information to you by referring you to those documents that are considered part of the accompanying prospectus. Information that we file with or submit to the SEC in the future and incorporate by
reference will automatically update and supersede the previously filed information. See “Incorporation of Certain Documents by Reference” in the accompanying prospectus for more information. All of
the documents incorporated by reference are available at www.sec.gov under ZTO Express (Cayman) Inc., CIK number 0001677250.

        Our annual report on Form 20-F for the fiscal year ended
December 31, 2019 filed with the SEC on April 21, 2020 (File No. 001-37922)
, or our 2019 Form 20-F, and our current report on
Form 6-K
we furnished to the SEC on September 11, 2020 (File No. 333-248730)
, are both incorporated by reference into the accompanying prospectus.

        As
you read the documents incorporated by reference, you may find inconsistencies in information from one document to another. If you find inconsistencies, you should rely on the
statements made in the most recent document.

        We
will provide a copy of any or all of the information that has been incorporated by reference into the accompanying prospectus, upon written or oral request, to any person, including
any beneficial owner of the securities, to whom a copy of this prospectus supplement is delivered, at no cost to such person. You may make such a request by writing or telephoning us at the following
mailing address or telephone number:

ZTO
Express (Cayman) Inc.
Building One, No. 1685 Huazhi Road,
Qingpu District, Shanghai 201708, People’s Republic of China
Tel: (86 21) 5980 4508
Attention: Investor Relations Department

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FORWARD-LOOKING STATEMENTS

        This prospectus supplement, the accompanying prospectus and the documents incorporated by reference contain forward-looking statements that
reflect our current expectations and views of future events. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify
these forward-looking statements by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “intend,” “plan,” “believe,” “estimate,” “is/are likely to,” “future,” “potential,” “continue” or
other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our
financial condition, results of
operations, business strategy and financial needs. These forward-looking statements include statements relating to, among other things:

    •
    our goals and strategies;
    •
    our future business development, financial conditions and results of operations;
    •
    the expected growth of the express delivery industry in China;
    •
    our expectations regarding demand for and market acceptance of our services;
    •
    our expectations regarding our relationships with network partners, direct and end customers, suppliers and our other stakeholders;
    •
    competition in our industry; and
    •
    relevant government policies and regulations relating to our industry.

        The
forward-looking statements included in this prospectus supplement, in the accompanying prospectus and in the documents incorporated by reference therein are subject to risks,
uncertainties and assumptions about our company. Our actual results of operations may differ materially from the forward-looking statements as a result of the risk factors disclosed in this prospectus
supplement, in the accompanying prospectus and in the documents incorporated by reference therein.

        We
would like to caution you not to place undue reliance on these forward-looking statements. You should read these statements in conjunction with the risk factors disclosed herein, in
the accompanying prospectus and in the documents incorporated by reference therein for a more complete discussion of the risks of an investment in our securities. We operate in a rapidly evolving
environment. New risks emerge from time to time and it is impossible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statement. We do not undertake any obligation to update or revise the
forward-looking statements except as required under applicable law.

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PROSPECTUS SUPPLEMENT SUMMARY

        This summary highlights information presented in greater detail elsewhere. This summary is not complete and does not
contain all the information you should consider before investing in our Class A ordinary shares. You should carefully read the entire prospectus before investing, including “Risk Factors,” as
well as the documents incorporated by reference. See “Incorporation of Certain Documents by Reference.”
Our 2019 Form 20-F, which contains our audited consolidated
financial statements as of December 31, 2018 and 2019 and for the years ended December 31, 2017, 2018 and 2019, and our
current report on Form 6-K furnished to the SEC on September 11,
2020
, which contains supplemental and updated disclosures and our consolidated financial statements as of June 30, 2020 and for the six months ended June 30, 2019 and
2020, are both incorporated by reference.




ZTO Express (Cayman) Inc.

Our Mission

        Our
mission is to bring happiness to more people through our services.

Our Objective and Vision

        Our objective is to become a world-leading comprehensive logistics service provider. Our vision for ZTO is a respected enterprise with dignity,
sustainability and longevity for centuries to come.

Our Values

        Our values are fundamental to the way in which we operate and achieve continued and sustainable growth. Our core values are:

        Shared
success—”Shared success” is a guiding principle that encourages everyone under the ZTO brand to build together and share results. It prioritizes the collective greater
good, aligns interest and resolves conflicts among stakeholders, and promotes equitable allocation of risks and rewards.

        Trust
and accountability—The intention of a shared success aligns interests, and trust and accountability reinforce effective execution. At ZTO, we foster a culture of mutual
trust and clear accountability among our network partners, employees and us, and each is expected to fulfill their part of the commitment.

        Innovation
and entrepreneurship—”Innovation and entrepreneurship” is ZTO’s cultural approach with which we identify and solve problems, and create opportunities with a novel
business model, relationships with partners and use of technologies that improve the way we operate and serve.

Overview

        We are a leading express delivery company in China. Founded in 2002, we are China’s leading express delivery service provider based on total
parcel volume, with a 19.1% market share in 2019. We are the youngest among the scaled express delivery companies in China and the
largest in scale and the most profitable among the Tongda Operators, who are the express delivery service providers utilizing the “network partner model” in China, namely our Company, YUNDA
Holding Co., Ltd., YTO Express Group Co.,Ltd., BEST Inc. and STO Express Co.,Ltd.. We provide express delivery services and other value-added logistics services
through our nationwide network.

        Under
a network partner model, we operate the mission-critical line-haul transportation and sorting network within the express delivery service value chain, whereas our network partners
operate the outlets that provide first-mile pickup and last-mile delivery services. The network partner model enables us to scale our network rapidly with limited capital outlay and fixed costs,
consequently driving higher return on invested capital and equity.

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        We
have developed one of the most extensive and reliable delivery networks in China. As of June 30, 2020, our network infrastructure consists of 90 sorting hubs with 282
automation lines, over 3,400 line-haul routes serviced by approximately 9,050 self-owned line-haul vehicles, and over 5,000 direct network partners operating approximately 30,000 pickup/delivery
outlets and over 50,000 last-mile posts. Our network covers over 99.2% of cities and counties in China. The following diagram illustrates the process for the completion of a typical domestic delivery
order in our network.


GRAPHIC

        In
April 2008, we were the first among the Tongda Operators to implement a sharing mechanism (which started compensating delivery outlets with last-mile delivery service fees) to address
inequitable burden of cost and the associated inequitable allocation of fee revenue between pickup and delivery outlets. Before the implementation of such mechanism, service outlets relied on pickup
fees to sustain
their business, which was difficult for outlets with significantly higher delivery volumes than pickup volumes due to the uneven nature of economic development, geographic concentration of e-commerce
merchants and geographical distribution of consumers in China. The principle design for this balancing mechanism came from our distinctive “shared success” philosophy, which was formally introduced in
2010 and fully established by 2015 when we completed the conversion of part of our major network partners to shareholder-employees. Through this reorganization, we were the first and the only among
the Tongda Operators to reengineer the traditional network partner model into a structure of centralized strategic, financial and human resource decision making, and build trust and foster a win-win
mindset among network participants. Throughout the years, we have successfully built a more cohesive and stable network by adhering to our differentiated philosophy and core values in day-to-day
decision making and execution.

        Our
openness to and adoption of new and innovative technologies allows us to maintain cost leadership in the industry. Our proprietary Zhongtian system is the technology backbone for our
end-to-end operational management encompassing activities conducted in our network and by our network partners. A network partner model can be as effective and more efficient than a vertically owned
and operated network through digitization, which helps to overcome standardization and stability

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challenges.
Since 2015, we have collaborated with the Chinese Academy of Sciences and developed multiple generations of proprietary automated sorting equipment and specialized software to achieve
high-speed sorting. In addition, we continuously improve the mix of our line-haul vehicles, and apply innovative design and technology to improve route planning, enhance safety and achieve greater
productivity.

        We
have achieved rapid growth while maintaining superior profitability and high customer satisfactions. Our total parcel volume increased from 6.2 billion in 2017 to
12.1 billion in 2019, and from 5.4 billion in the six months ended June 30, 2019 to 7.0 billion for the six months ended June 30, 2020. ZTO has been consistently
ranked top for overall customer satisfaction among the Tongda Operators, as indicated by survey conducted by State Postal Bureau. Our net income increased from RMB3.2 billion in 2017 to
RMB5.7 billion in 2019. Our non-GAAP adjusted net income increased from RMB3.2 billion in 2017 to RMB5.3 billion in 2019. Our net income and non-GAAP adjusted net income for the
six months ended June 30, 2020 was RMB1.8 billion and RMB2.1 billion, respectively. Leveraging scale and continuous gain in operational efficiency, our net profit per parcel is
the highest among the Tongda Operators.

        We
strive to become a world leading comprehensive logistics service provider and sustain profitable growth. While our core express business is performing well, we are leveraging our
resources and capabilities by expanding into adjacent markets such as cross-border, less-than- truckload and integrated warehousing and delivery fulfillment services. We believed more segments will
evolve out of our core competencies and resource build-up to address logistics and commerce needs as the overall Chinese economy continues to grow. As China’s logistics industry develops steadily to
catch up with developed countries in terms of scale and efficiencies, we strive to devote the right amount of resources to the right things at the right time. We believe this disciplined approach to
business expansion will propel us to steadily but surely transform ultimately into a platform with leading capabilities serving the entire logistics ecosystem. Our journey has just begun.

Our Strengths

        Our culture is the framework of how we operate our business. Our mission, to bring happiness to more people through our services, was founded by
a few entrepreneurs led by our founder seeking better lives for themselves. Soon after, more and more people gathered around the founding team, having been attracted by the distinct values and
practices of shared-success, trust and accountability, innovation and entrepreneurship, and together we built a strong network that connects tens of thousands of employees, entrepreneurs, businesses
and customers. Our mission, vision and values together shape our business purpose, form the guiding principles of strategic decision-making processes and have directly contributed to our growth and
development over the years. We believe our competitive strengths are the embodiment of, and are inseparable from, our distinguishing culture. These competitive strengths
include:

    •
    superior scale and capability;
    •
    distinct partner network built upon a “shared-success” philosophy;
    •
    best-in-class operational capabilities and cost efficiencies through continued innovation; and
    •
    experienced and entrepreneurial management team.

Our Strategies

        Our goal is to be become a world-leading comprehensive logistics service provider and we set the following strategies to achieve that
goal:

    •
    strengthen culture and improve brand recognition;
    •
    develop young talents and maintain vitality;

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    •
    achieve greater scale and capacity and further our reach;
    •
    build technological advantages to better compete in the future; and
    •
    expand beyond express delivery.

Our Shareholding and Corporate Structure

Our Controlling Shareholders

        As of September 9, 2020, Mr. Meisong Lai (“Mr. Lai”), our chairman and chief executive officer, is interested in and
controls through: (a) Zto Lms Holding Limited, a company beneficially owned by The LMS Family Trust, 206,100,000 Class B ordinary shares and 3,116,420 ADSs (representing the same number
of Class A ordinary shares); and (b) Zto Es Holding Limited (“ZTO ES”), 4,491,893 Class A ordinary shares for the purpose of our employee shareholding platform. The LMS Family
Trust is a trust established under the laws of Singapore and managed by Standard Chartered Trust (Singapore) Limited as trustee. Mr. Lai is the settlor of The LMS Family Trust and the
beneficiaries of the trust are Mr. Lai and his family members. Mr. Lai is the sole director of ZTO ES, which is held by himself and four limited partnerships formed in China. An entity
controlled by Mr. Lai is the general partner of each of those limited partnerships and Ms. Yufeng Lai, wife of Mr. Lai, was the sole limited partner of each of those limited
partnerships upon their formation. As of September 9, 2020, Mr. Lai controlled 78.4% of the aggregate voting power of our Company. For additional information, see “Item 6.E.
Directors, Senior Management and Employees—Share Ownership” in our 2019 Form 20-F, as well as other documents that are incorporated by reference into this prospectus supplement.

Dual Class Voting Structure

        Under our dual class voting structure, our share capital comprises Class A ordinary shares and Class B ordinary shares. Each
Class A ordinary share entitles the holder to exercise one vote, and each Class B ordinary share entitles the holder to exercise ten votes, respectively, on all matters that require a
shareholder’s vote. For additional information, see “Item 6.E. Directors, Senior Management and Employees—Share Ownership” in our 2019 Form 20-F, as well as other documents
that are incorporated by reference into this prospectus supplement.

        You
are advised to be aware of the potential risks of investing in companies with a dual class voting structure, in particular that the interests of the beneficiary of this structure may
not necessarily always be aligned with those of our shareholders as a whole, and that the beneficiary of this structure will be in a position to exert significant influence over the affairs of our
company and the outcome of shareholders’ resolutions, irrespective of how other shareholders vote. You should make the decision to invest in our company only after due and careful consideration. For
further information about the risks associated with the dual class voting structure adopted by the Company, please refer to “Item 3.D. Key Information—Risk Factors—Risks
Related to Our ADSs” in our 2019 Form 20-F, as well as other documents that are incorporated by reference into this prospectus supplement.

Our VIE Structure

        Due to the PRC legal restrictions on foreign ownership in companies that provide mail delivery services in China, we carry out our express
delivery business through ZTO Express Co., Ltd., a domestic PRC company, the equity interests in which are held by PRC citizens and companies established under PRC law. As a result, we
conduct such business activities through ZTO Express Co., Ltd. and its subsidiaries in the PRC. We have entered into certain contractual arrangements, as described in more detail in
“Item 4. Information on the Company—A. History and Development of the Company” in our 2019 Form 20-F, as well as other documents that are incorporated by reference into this
prospectus supplement. Those contractual arrangements collectively enable us to exercise effective control over the

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variable
interest entities and realize substantially all of the economic benefits arising from the variable interest entities. As a result, we include the financial results of each of the variable
interest entities in our consolidated financial statements in accordance with U.S. GAAP as if they were our wholly-owned subsidiaries.

Risk Factors

        Our business and the Global Offering involve certain risks and uncertainties, some of which are beyond our control and may affect your decision
to invest in us and/or the value of your investment. See “Risk Factors” for details of our risk factors, which we strongly urge you to read in full before making an investment in our Shares. Some of
the major risks we face include:

    •
    Our business and growth are highly dependent on the development of the e-commerce industry and the emergence of New Retail in China, and our
    business operations may be significantly influenced by certain third-party e-commerce platforms;

    •
    We face risks associated with our network partners and their employees and personnel;
    •
    We face intense competition, which could adversely affect our results of operations and market share;
    •
    Any service disruptions experienced by our sorting hubs or the outlets operated by our network partners may adversely affect our business
    operations; and

    •
    Our technology systems are critical to our business operations and growth prospects, and failure to continue to improve, and effectively
    utilize, our technology systems or develop new technologies could harm our business operations, reputation and growth prospects.

        See
“Risk Factors” on page S-14 of this prospectus supplement for a discussion of risks related to our shares, ADSs and the Global Offering. In addition, you should carefully
consider the matters discussed under “Risk Factors” in our 2019
Form 20-F
and in Exhibit 99.1 to our current report on
Form 6-K furnished to the SEC on September 11, 2020
, titled “ZTO Express (Cayman) Inc. Supplemental and Updated Disclosures,” as well as other documents
incorporated by reference into the accompanying prospectus.

Public Offering and Listing in Hong Kong

        We are offering 45,000,000 Class A ordinary shares, par value US$0.0001 per share, as part of a Global Offering, consisting of an
international offering of 42,750,000 Class A ordinary shares offered hereby, and a Hong Kong public offering of 2,250,000 Class A ordinary shares. The international offering contemplated
herein consists of a U.S. offering and a non-U.S. offering made outside the U.S. in accordance with applicable law. We are paying a registration fee for Class A ordinary shares sold in the
United States, as well as for Class A ordinary shares initially offered and sold outside the United States in the Global Offering that may be resold from time to time in the United States.

        We
have applied to list our Class A ordinary shares on the Hong Kong Stock Exchange pursuant to Chapter 19C of the Hong Kong Stock Exchange Listing Rules under the stock
code “2057.”

Fungibility and Conversion between ADSs and Class A Ordinary Shares

        In connection with our public offering of Class A ordinary shares in Hong Kong, or the Hong Kong public offering, and to facilitate
fungibility and conversion between ADSs and Class A ordinary shares and trading between the New York Stock Exchange and the Hong Kong Stock Exchange, we intend to move a portion of our issued
Class A ordinary shares from our register of members maintained in the Cayman Islands to our Hong Kong share register.

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        In
addition, all Class A ordinary shares offered in both the international offering and the Hong Kong public offering will be registered on the Hong Kong share register in order
to be listed and traded on the Hong Kong Stock Exchange. Holders of Class A ordinary shares registered on the Hong Kong share register will be able to convert these Class A ordinary
shares into ADSs, and vice versa. See “Conversion between ADSs and Class A Ordinary Shares.”

        It
is unclear whether, as a matter of Hong Kong law, the trading or conversion of ADSs constitutes a sale or purchase of the underlying Hong Kong-registered Class A ordinary
shares that is subject to Hong Kong stamp duty. We advise investors to consult their own tax advisors on this matter. See “Risk Factors—Risks Related to Our Shares, ADSs and the Global
Offering—There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs following our initial public offering in Hong Kong and listing of our
Class A ordinary shares on the Hong Kong Stock Exchange.”

Corporate Information

        We conduct our business in China through our subsidiaries and variable interest entities. Our American depositary shares, each of which
represents one Class A ordinary share, par value US$0.0001 per share, of our company, currently trade on the New York Stock Exchange under the symbol “ZTO.”

        Our
principal executive offices are located at Building One, No. 1685 Huazhi Road, Qingpu District, Shanghai, 201708, People’s Republic of China. Our telephone number at this
address is +86 21 59804508. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman
Islands. We have appointed Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168, as our agent upon whom process may be served in any action brought
against us under the securities laws of the United States in connection with this offering. Our corporate website is http://ir.zto.com. Information appearing on our website is not incorporated by
reference into this prospectus supplement or the accompanying prospectus.

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THE OFFERING

Public Offering Price

 

HK$            , or US$            , per Class A ordinary share

The Global Offering

 

We are offering 45,000,000 Class A ordinary shares in the Global Offering, consisting of an international offering of 42,750,000 Class A ordinary shares offered hereby, and a Hong Kong public offering of 2,250,000 Class A ordinary
shares. The allocation of Class A ordinary shares between the Hong Kong public offering and the international offering is subject to reallocation. For more information, see “Underwriting.”

Option to Purchase Additional Class A Ordinary Shares

 

We have granted the international underwriters an option, exercisable by the Sole Global Coordinator, on behalf of the international underwriters, until 30 days after the last day for the lodging of applications under the Hong Kong public
offering, to purchase up to an additional 6,750,000 Class A ordinary shares at public offering price. Goldman Sachs International expects to enter into a borrowing arrangement with Zto Ljf Holding Limited to facilitate the settlement of
over-allocations.

Class A Ordinary Shares Outstanding Immediately After the Global Offering

 

828,894,733 Class A ordinary shares (or 835,644,733 Class A ordinary shares if the Sole Global Coordinator exercises in full, on behalf of the international underwriters, their option to purchase additional Class A ordinary shares),
excluding (i) Class A ordinary shares reserved for issuance under our 2016 Share Incentive Plan, (ii) 7,447,313 Class A ordinary shares issued and reserved for the purpose of our employee shareholding platform, the holder of which
has waived all shareholder rights attached to those shares, and (iii) the company’s repurchase of 12,209,069 Class A ordinary shares in the form of ADSs.

Use of Proceeds

 

We will determine the offer price for both the international offering and the Hong Kong public offering by reference to, among other factors, the closing price of our ADSs on the last trading day before the pricing of the Global Offering, which is
expected to be on or about September 22, 2020. The maximum offer price for the Hong Kong public offering is HK$268.00, or US$34.58, per Class A ordinary share (equivalent to US$34.58 per ADS). Assuming (i) the offering price is
HK$268.00 per Class A ordinary share, (ii) initially 42,750,000 Class A ordinary shares are allocated to the international offering and (iii) initially 2,250,000 Class A ordinary shares are allocated to the Hong Kong public
offering, we estimate that we will receive net proceeds from the Global Offering of approximately HK$11,882.22 million, or US$1,533.15 million (or approximately HK$13,673.13 million, or US$1,764.23 million, if the Sole Global
Coordinator exercises in full, on behalf of the international underwriters, their option to purchase additional Class A ordinary shares), after deducting estimated underwriting discounts and commissions and the estimated offering expenses
payable by us.

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We expect to use the net proceeds from the Global Offering for infrastructure and capacity development, empowering our network partners and strengthening the network stability, investments in logistics ecosystem and general corporate
purposes.

 

See “Use of Proceeds” for more information.

Lock-up

 

We, certain directors and executive officers of our company and other related parties, Alibaba ZT Investment Limited, Cainiao Smart Logistics Investment Limited and New Retail Strategic Opportunities Investments 2 Limited have agreed with the
underwriters not to sell, transfer or dispose of any ADSs, ordinary shares or similar securities for a period of 90 days following the date of this prospectus supplement, subject to certain exceptions. See “Shares Eligible for Future Sale” and
“Underwriting” for more information.

Exercise of Preemptive Rights by Alibaba

 

Our existing shareholders affiliated with Alibaba Group Holding Limited (“Alibaba”), Alibaba ZT Investment Limited (“Ali ZT”) and Cainiao Smart Logistics Investment Limited (“Cainiao Smart”), have elected to exercise their preemptive rights (either
by themselves or through their respective affiliates) pursuant to that certain investor rights agreement dated June 12, 2018 to subscribe for an aggregate of 3,654,250 Class A ordinary shares on an assured basis in the Global Offering,
representing approximately 8.1% of the Class A ordinary shares offered in connection with the Global Offering and approximately 0.4% of the ordinary shares outstanding immediately after the Global Offering, without taking into account
(i) the Class A ordinary shares issued and reserved for the purpose of our employee shareholding platform, the holder of which has waived all shareholder rights attached to those shares, (ii) our repurchase of Class A ordinary
shares in the form of ADSs and (iii) any allotment and issuance of Class A ordinary shares upon exercise of the option of the international underwriters to purchase additional Class A ordinary shares in the Global Offering. No
preferential treatment will be given to Ali ZT and/or Cainiao Smart (and/or their respective affiliates) other than the assured allocation of 3,654,250 Class A ordinary shares in connection with the Global Offering.

 

Ali ZT and Cainiao Smart together held an aggregate of 63,657,407 Class A ordinary shares (or approximately 8.1% of our ordinary shares outstanding) as of June 30, 2020. See “Principal Shareholders.”

Risk Factors

 

You should carefully read “Risk Factors” beginning on page S-14 and the other information included in this prospectus supplement and the accompanying prospectus, our 2019 Form 20-F, Exhibit 99.1 to
our current report on Form 6-K furnished to the SEC on September 11, 2020
, as well as other documents incorporated by reference herein and therein, for a discussion of factors you should carefully consider before deciding to invest in
our Class A ordinary shares.

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Proposed Hong Kong Stock Exchange Code for the Class A Ordinary Shares

 

We have applied to list our Class A ordinary shares on the Hong Kong Stock Exchange under the stock code “2057.”

Payment and Settlement

 

The underwriters expect to deliver the Class A ordinary shares against payment therefor through the facilities of the Central Clearing and Settlement System on or
around                        , 2020.

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RISK FACTORS

        Any investment in our Class A ordinary shares involves a high degree of risk. You should carefully consider the
risk factors set forth below together with the other information contained in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference, before deciding
whether to purchase the Class A ordinary shares. In addition, you should carefully consider the matters discussed under “Risk Factors” in
our 2019 Form 20-F,
Exhibit 99.1 to our current report on Form 6-K furnished to the SEC on
September 11, 2020
, as well
as other documents incorporated by reference into this prospectus supplement. Any of the following risks and the risks described in
our 2019 Form 20-F, and additional risks and uncertainties not
currently known to us or those we currently view to be immaterial, may also materially and adversely affect our business, financial condition or results of operations. In such case, you may lose all
or part of your original investment.

Risks Related to Our Shares, ADSs and the Global Offering

As a company applying for listing under Chapter 19C, we adopt different practices as to certain matters as compared with many other companies listed on the Hong Kong
Stock Exchange.

        As
we are applying for a listing under Chapter 19C of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended or supplemented from
time to time, or Hong Kong Listing Rules, we will not be subject to certain provisions of the Hong Kong Listing Rules pursuant to Rule 19C.11, including, among others, rules on notifiable
transactions, connected transactions, share option schemes, content of financial statements as well as certain other continuing obligations. In addition, in connection with the listing on the Hong
Kong Stock Exchange, we have applied for a number of waivers and/or exemptions from strict compliance with the Hong Kong Listing Rules, the Companies (Winding Up and Miscellaneous Provisions)
Ordinance, the Codes on Takeovers and Mergers and Share Buybacks and the Securities and Futures Ordinance. As a result, we will adopt different practices as to those matters as compared with other
companies listed on the Hong Kong Stock Exchange that do not enjoy those exemptions or waivers.

        Our
memorandum and articles of association are specific to us and include certain provisions that may be different from the requirements under the Hong Kong Listing Rules and common
practices in Hong Kong. For example, Rule 19C.07(7) of the Hong Kong Listing Rules provides that the minimum stake required to convene an extraordinary general meeting and add resolutions to a
meeting agenda must not be higher than 10% of the voting rights, on a one vote per share basis, in the share capital of a Qualifying Issuer, but our memorandum and articles of association provide that
at least one third of the aggregate voting power of our Company is required to convene an extraordinary general meeting. We will put forth a resolution at or before our 2021 annual general meeting to
revise our memorandum and articles of association to comply with Rule 19C.07(7) of the Hong Kong Listing Rules. The 2021 annual general meeting is expected to be held in or before June 2021.
Prior to the amendment to our Articles, we undertake to convene general meetings at the request of shareholders holding in aggregate not less than 10% of the Company’s voting rights, on a one vote per
share basis.

        Furthermore,
if 55% or more of the total worldwide trading volume, by dollar value, of our Class A ordinary shares and ADSs over our most recent fiscal year takes place on the
Hong Kong Stock Exchange, the Hong Kong Stock Exchange will regard us as having a dual primary listing in Hong Kong and we will no longer enjoy certain exemptions or waivers from strict compliance
with the requirements under the Hong Kong Listing Rules, the Companies (Winding Up and Miscellaneous Provisions) Ordinance, the Codes on Takeovers and Mergers and Share Buybacks and the Securities and
Futures Ordinance, which could result in us having to amend our corporate structure and memorandum and articles of association and we may incur of incremental compliance costs.

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The trading price of our ADSs has been and is likely to continue to be, and the trading price of our Class A ordinary shares can be, volatile, which could result in
substantial losses to holders of our Class A ordinary shares and/or ADSs.

        The
trading price of our ADSs has been and is likely to continue to be volatile and could fluctuate widely in response to a variety of factors, many of which are beyond our control. The
trading price of our Class A ordinary shares, likewise, can be volatile for similar or different reasons. For example, the trading price of our ADSs ranged from US$15.30 to US$23.67 per ADS in
2019.

        Fluctuation
in the trading prices of our listed securities may occur due to broad market and industry factors, including the performance and fluctuation of the market prices of other
companies with business operations located mainly in China that have listed their securities in Hong Kong and/or the United States. Furthermore, stock markets in general have experienced extreme price
and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies like us. Volatility or a lack of positive performance in the trading price of our
listed securities may also adversely affect our ability to retain key employees, most of whom have been granted options or other equity incentives. In addition to market and industry factors, the
price and trading volume for our listed securities may be highly volatile for factors specific to our own operations, including the following:

    •
    variations in our revenues, earnings and cash flow;
    •
    announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors;
    •
    announcements of new offerings, solutions and expansions by us or our competitors;
    •
    changes in financial estimates by securities analysts;
    •
    detrimental adverse publicity about us, our services or our industry;
    •
    additions or departures of key personnel;
    •
    release of lock-up or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; and
    •
    potential litigation or regulatory investigations.

        Any
of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade.

Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of
control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.

        We
have a dual-class share structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. In respect of matters requiring the votes
of shareholders, holders of Class A ordinary shares are entitled to one vote per share, while holders of Class B ordinary shares are entitled to ten votes per share based on our
dual-class share structure. Our ADSs represent underlying Class A ordinary shares. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the
holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any
Class B ordinary shares by a holder thereof to any person or entity which is not an affiliate of such holder or upon a change of ultimate beneficial ownership of any Class B ordinary
shares to any person who is not an affiliate of the holder of such Class B ordinary shares, such Class B ordinary shares shall be automatically and immediately converted into the equal
number of Class A ordinary shares.

        As
of September 9, 2020, Zto Lms Holding Limited, a British Virgin Islands company wholly beneficially owned by The LMS Family Trust, with Mr. Meisong Lai as the settlor
and Mr. Meisong Lai

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and
his family members as beneficiaries, holds 206,100,000 Class B ordinary shares. Due to the disparate voting powers associated with our dual-class share structure, Mr. Meisong Lai
holds 78.4% of the aggregate voting power of our company as of September 9, 2020. As a result of the dual-class share structure and the concentration of ownership, Mr. Meisong Lai has
considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate
actions. He may take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may discourage, delay or prevent a change in control of our company,
which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of our company and may reduce the price of our listed
securities. This concentrated control will limit your ability to influence corporate matters and could discourage others from pursuing any potential merger, takeover or other change of control
transactions that holders of Class A ordinary shares and/or ADSs may view as beneficial.

        As
we are seeking a listing as a Grandfathered Greater China Issuer pursuant to Chapter 19C of the Hong Kong Listing Rules (Secondary Listings of Qualifying Issuers) with a WVR
structure, certain shareholder protection measures and governance safeguards under Chapter 8A of the Hong Kong Listing Rules (Weighted Voting Rights) do not apply to us pursuant to
Rule 19C.12 and our Articles differ from Chapter 8A in a number of ways. As a result, our Articles provide less shareholder protection and have fewer governance safeguards than if our
Company were subject to Chapter 8A in its entirety.

We have granted, and may continue to grant, share incentives, which may result in increased share-based compensation expenses.

        In
2016, we adopted the 2016 Share Incentive Plan for the purpose of granting share-based compensation awards to employees, directors and consultants to incentivize their performance and
align their interests with ours. We account for compensation costs for all share options using a fair value-based method and recognize expenses in our consolidated statements of comprehensive income
in accordance with U.S. GAAP. In June 2016, we also established an employee shareholding platform to allow our employees in the PRC to receive share incentives. We account for shared-based
compensation for these share incentive awards using a fair value-based method and recognize expenses in our consolidated statements of comprehensive income in accordance with U.S. GAAP. We will
incur additional share-based compensation expenses in the future as we continue to grant share incentives using the ordinary shares reserved for this platform. We believe the granting of share-based
compensation is of significant importance to our ability to attract and retain key personnel and employees, and we will continue to grant share-based compensation to employees in the future. As a
result, our expenses associated with share-based compensation may increase, which may have an adverse effect on our results of operations.

If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A
ordinary shares and/or ADSs, the market price for our Class A ordinary shares and/or ADSs and trading volume could decline.

        The
trading market for our Class A ordinary shares and/or ADSs will be influenced by research or reports that industry or securities analysts publish about our business. If one or
more analysts who cover us downgrade our Class A ordinary shares and/or ADSs, the market price for our Class A ordinary shares and/or ADSs would likely decline. If one or more of these
analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price of or trading volume for our
Class A ordinary shares and/or ADSs to decline.

The sale or availability for sale of substantial amounts of our listed securities could adversely affect their respective market price.

        Sales
of substantial amounts of our Class A ordinary shares and/or ADSs in the public market, or the perception that these sales could occur, could adversely affect the market
price of such securities and could materially impair our ability to raise capital through equity offerings in the future. We cannot predict what

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effect,
if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our
Class A ordinary shares and/or ADSs.

Because we do not expect to pay regular dividends in the foreseeable future, investors must mainly rely on price appreciation of our Class A ordinary shares and/or ADSs
for return on their investments.

        We
intend to retain most of our available funds and any future earnings to fund the development and growth of our business. On March 13, 2020, our board of directors approved a
special dividend of US$0.30 per ADS for 2019, to be paid to shareholders of record as of the close of business on April 8, 2020. Investors should not rely on an investment in our Class A
ordinary shares and/or ADSs as a source for any future dividend income.

        Our
board of directors has discretion as to whether to distribute dividends. In addition, our shareholders may by ordinary resolution declare dividends, but no dividend may exceed the
amount recommended by our directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on our future results of
operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other
factors deemed relevant by our board of directors. Accordingly, the return on investments in our Class A ordinary shares and/or ADSs will likely depend entirely upon any future price
appreciation of such securities. There is no guarantee that our listed securities will appreciate in value or even maintain the price at which investors purchased the securities. Investors may not
realize a return on investment in our Class A ordinary shares and/or ADSs and may even lose the entire investment.

Our memorandum and articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary
shares and ADSs.

        Our
memorandum and articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions.
For example, such provisions include a dual-class share structure that gives greater voting power to the Class B ordinary shares beneficially owned by our founder. These provisions could have
the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company
in a tender offer or similar transaction. Our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their
designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights,
voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary
shares, in the form of ADS or otherwise. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more
difficult. If our board of directors decides to issue preferred shares, the price of our Class A ordinary shares and/or ADSs may fall and the voting and other rights of the holders of our
ordinary shares and/or ADSs may be materially and adversely affected.

You may face difficulties in protecting your interests, and your ability to protect your rights through Hong Kong or U.S. courts may be limited, because we are incorporated
under Cayman Islands law.

        We
are an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles of association, the Companies Law (2020
Revision) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take actions against the directors, actions by minority shareholders and the fiduciary duties of
our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited
judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of

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persuasive
authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly
established as they would be under statutes or judicial precedent in some jurisdictions in the United States or in Hong Kong. In particular, the Cayman Islands has a less developed body of securities
laws than the United States or Hong Kong. For example, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In
addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States or a Hong Kong court.

        Shareholders
of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of
these companies. Our directors have discretion under our memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our
shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a
shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

        Certain
corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as
the United States and Hong Kong. To the extent we choose to follow home country practice with respect to
corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers or companies incorporated in
Hong Kong.

        Furthermore,
our memorandum and articles of association are specific to us and include certain provisions that may be different from common practices in Hong Kong, such as the absence of
the requirement that the appointment, removal and remuneration of auditors must be approved by a majority of our shareholders.

        As
a result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of
directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States or Hong Kong.

Certain judgments obtained against us by our shareholders may not be enforceable.

        We
are a Cayman Islands exempted company. We conduct our operations in China and substantially all of our assets are located in China. In addition, many of our directors and senior
management named in this document reside outside the United States or Hong Kong, and most of the assets of these persons are located outside the United States or Hong Kong. As a result, it may be
difficult or impossible for shareholders to bring an action against us or against these individuals in the United States or Hong Kong in the event that shareholders believe that their rights have been
infringed under the U.S. federal securities laws, Hong Kong securities laws or otherwise. Even if shareholders are successful in bringing an action of this kind, the laws of the Cayman Islands and of
China may render them unable to enforce a judgment against our assets or the assets of our directors and officers.

We incur increased costs as a result of being a public company, particularly after we have ceased to qualify as an “emerging growth company.”

        As
a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently
implemented by the SEC and the New York Stock Exchange, impose various requirements on the corporate governance practices of public companies. We expect these rules and regulations to increase our
legal and financial compliance costs and to make some corporate activities more time-consuming and costlier. As we are no longer an “emerging growth company,” we expect to incur significant expenses
and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-

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Oxley
Act of 2002 and the other rules and regulations of the SEC. For example, as a result of becoming a public company, we need to increase the number of independent directors and adopt policies
regarding internal controls and disclosure controls and procedures. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and
officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we incur
additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.
We will also incur additional costs as a result of the listing on the Hong Kong Stock Exchange. We are currently evaluating and monitoring developments with respect to these rules and regulations, and
we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

        We
are named as a defendant in a putative shareholder class action lawsuit in the United States, and we may be involved in more class action lawsuits in the future. Such lawsuits could
divert a significant amount of our management’s attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses
to defend the lawsuits. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is
successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

There can be no assurance that we will not be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year, which could result in
adverse U.S. federal income tax consequences to U.S. Holders of our ADSs or Class A ordinary shares.

        Depending
upon the value of our assets, which may be determined based, in part, on the market value of our ADSs and ordinary shares, and the nature of our assets and income over time, we
could be classified as a passive foreign investment company, or PFIC, for United States federal income tax purposes. A non-U.S. corporation will be considered a PFIC, for any taxable year if either
(i) 75% or more of its gross income for such year consists of certain types of “passive” income (the “income test”); or (ii) 50% or more of the value of its assets (generally determined
on the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive income (the “asset test”). The average percentage of a
corporation’s assets that produce or are held for the production of passive income is generally determined on the basis of the fair market value of the corporation’s assets at the end of each quarter.
This determination is based on the adjusted tax basis of the corporation’s assets.

        In
addition, we will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or
indirectly, 25% or more (by value) of the stock. Although the law in this regard is unclear, we treat our variable
interest entities as being owned by us for United States federal income tax purposes because we control their management decisions and we are entitled to substantially all of the economic benefits,
and, as a result, we consolidate their results of operations in our U.S. GAAP financial statements and treat them as being owned by us for United States federal income tax purposes. If it were
determined, however, that we are not the owner of our variable interest entities for United States federal income tax purposes, we may be treated as a PFIC for our taxable year ended
December 31, 2019 and in future taxable years.

        Based
on the nature of our income and assets and the market price of our ADSs, we do not believe we were a PFIC for the taxable year ended December 31, 2019, and we do not
anticipate becoming a PFIC on the current taxable year or in the foreseeable future. Because PFIC status is a fact-intensive determination, no assurance can be given that we will not be classified as
a PFIC for that year. While we do not anticipate becoming a PFIC, changes in the nature of our income or assets, or fluctuations in the market price of our Class A ordinary shares and/or ADSs,
may cause us to become a PFIC for future taxable years. In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our

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market
capitalization, which may fluctuate over time. Under circumstances where revenues from activities that produce passive income significantly increase relative to our revenues from activities
that produce non-passive income or where we determine not to deploy significant amounts of cash for working capital or other purposes, our risk of becoming classified as a PFIC may substantially
increase.

Registered public accounting firms in China, including the auditors of our consolidated financial statements in our annual reports on Form 20-F filed with the SEC, are
not inspected by the Public Company Accounting Oversight Board, which deprives us and our investors of the benefits of such inspection.

        Auditors
of companies whose shares are registered with the SEC and traded publicly in the United States, including auditors of our consolidated financial statements in our annual reports
on Form 20-F filed with the SEC, must be registered with the U.S. Public Company Accounting Oversight Board, or the PCAOB, and is subject to laws in the United States pursuant to which the PCAOB
conducts regular inspections to assess its compliance with applicable professional standards. Auditors of our consolidated financial statements in our annual reports on Form 20-F filed with the SEC
are located in, and organized under the laws of, the PRC, which is a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the Chinese authorities. On December 7,
2018, the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with
significant operations in China. The joint statement reflects a heightened interest in an issue that has vexed U.S. regulators in recent years. On April 21, 2020, the SEC and the PCAOB issued another
joint statement reiterating the heightened risk that disclosures from many emerging markets will be insufficient, including those from China, compared to those made by U.S. domestic companies. In
discussing the specific issues
related to the greater risk, the statement again highlights the PCAOB’s inability to inspect audit work papers and practices of accounting firms in China, with respect to their audit work of U.S.
reporting companies. On June 4, 2020, the U.S. President issued a memorandum ordering the President’s Working Group on Financial Markets, or the PWG, to submit a report to the President within 60 days
of the memorandum that includes recommendations for actions that can be taken by the executive branch and by the SEC or PCAOB on Chinese companies listed on U.S. stock exchanges and their audit firms,
in an effort to protect investors in the U.S. On August 6, 2020, the PWG released a report recommending that the SEC take steps to implement the five recommendations outlined in the report. In
particular, to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate, or NCJs, the PWG recommends enhanced listing standards on
U.S. stock exchanges. This would require, as a condition to initial and continued exchange listing, PCAOB access to work papers of the principal audit firm for the audit of the listed company.
Companies unable to satisfy this standard as a result of governmental restrictions on access to audit work papers and practices in NCJs may satisfy this standard by providing a co-audit from an audit
firm with comparable resources and experience where the PCAOB determines it has sufficient access to audit work papers and practices to conduct an appropriate inspection of the co-audit firm. The
report permits the new listing standards to provide for a transition period until January 1, 2022 for listed companies. If we fail to meet the new listing standards before the deadline specified
thereunder due to factors beyond our control, we could face possible de-listing from the NYSE, deregistration from the SEC and/or other risks, which may materially and adversely affect, or effectively
terminate, our ADS trading in the United States. However, it remains unclear what further actions, if any, the U.S. executive branch, the SEC and PCAOB will take to address the problem.

        As
part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019, a
bipartisan group of lawmakers introduced bills in both houses of the U.S. Congress that would require the SEC to maintain a list of issuers for which PCAOB is not able to inspect or investigate an
auditor report issued by a foreign public accounting firm. The Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act prescribes increased disclosure
requirements for these issuers and, beginning in 2025, the delisting from U.S. national securities exchanges such as the New York Stock

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Exchange
of issuers included on the SEC’s list for three consecutive years. On May 20, 2020, the U.S. Senate passed S. 945, the Holding Foreign Companies Accountable Act, or the Kennedy Bill. On July
21, 2020, the U.S. House of Representatives approved its version of the National Defense Authorization Act for Fiscal Year 2021, which contains provisions comparable to the Kennedy Bill. If either of
these bills is enacted into law, it would amend the Sarbanes-Oxley Act of 2002 to direct the SEC to prohibit securities of any registrant from being listed on any of the U.S. securities exchanges or
traded ‘over-the-counter’ if the auditor of the registrant’s financial statements is not subject to PCAOB inspection for three consecutive years after the law becomes effective. Enactment of any such
legislation or other efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, the market price of our ADSs could be
adversely affected, and we could be delisted if we are unable to cure the situation to meet the PCAOB inspection requirement in time. It is unclear if and when any such proposed legislation will be
enacted.
Furthermore, there have been recent media reports on deliberations within the U.S. government regarding potentially limiting or restricting China-based companies from accessing U.S. capital markets.
If any such deliberations were to materialize, the resulting legislation may have a material and adverse impact on the stock performance of China-based issuers listed in the United States, including
us.

        Inspections
of other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality control procedures, which may be
addressed as part of the inspection process to improve future audit quality. This lack of PCAOB inspections in China prevents the PCAOB from fully evaluating audits and quality control procedures of
auditors of our consolidated financial statements in our annual reports on Form 20-F filed with the SEC. As a result, we and investors may be deprived of the benefits of such PCAOB inspections. The
inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of the audit procedures or quality control procedures of auditors of our
consolidated financial statements in our annual reports on Form 20-F filed with the SEC as compared to auditors outside of China that are subject to PCAOB inspections, which could cause investors and
potential investors of our Class A ordinary shares and/or ADSs to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

It may be difficult for overseas securities regulators to conduct investigations or collect evidence within China.

        Shareholder
claims or regulatory investigations that are common in the United States (including securities law class actions and fraud claims) generally are difficult to pursue as a
matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated
outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border
supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of a mutual and practical cooperation mechanism.
Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator may directly conduct investigations or collect
evidence and no entities or individuals may provide documents or materials in connection with securities activities without proper authorization as stipulated under Article 177. While detailed
interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability of an overseas securities regulator to directly conduct investigations or collect evidence within
China may further increase difficulties faced by you in protecting your interests.

The different characteristics of the capital markets in Hong Kong and the U.S. may negatively affect the trading prices of our Class A ordinary shares and/or
ADSs.

        Upon
the listing on the Hong Kong Stock Exchange, we will be subject to Hong Kong and NYSE listing and regulatory requirements concurrently. The Hong Kong Stock Exchange and NYSE have
different trading hours, trading characteristics (including trading volume and liquidity), trading and listing

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rules,
and investor bases (including different levels of retail and institutional participation). As a result of these differences, the trading prices of our Class A ordinary shares and our
ADSs may not be the same, even allowing for currency differences. Fluctuations in the price of our ADSs due to circumstances peculiar to the U.S. capital markets could materially and adversely affect
the price of our Class A ordinary shares, or vice versa. Certain events having significant negative impact specifically on the U.S. capital markets may result in a decline in the trading price
of our Class A ordinary shares notwithstanding that such event may not impact the trading prices of securities listed in Hong Kong generally or to the same extent, or vice versa. Because of the
different characteristics of the U.S. and Hong Kong capital markets, the historical market prices of our ADSs may not be indicative of the trading performance of our Class A ordinary shares
after the Global Offering.

Exchange between our Class A ordinary shares and our ADSs may adversely affect the liquidity and/or trading price of each other.

        Our
ADSs are currently traded on the NYSE. Subject to compliance with U.S. securities law and the terms of the deposit agreement, holders of our Class A ordinary shares may
deposit Class A ordinary shares with the depositary in exchange for the issuance of our ADSs. Any holder of ADSs may also withdraw the underlying Class A ordinary shares represented by
the ADSs pursuant to the terms of the deposit agreement for trading on the Hong Kong Stock Exchange. In the event that a substantial number of Class A ordinary shares are deposited with the
depositary in exchange for ADSs or vice versa, the liquidity and trading price of our Class A ordinary shares on the Hong Kong Stock Exchange and our ADSs on the NYSE may be adversely affected.

The time required for the exchange between Class A ordinary shares and ADSs might be longer than expected and investors might not be able to settle or effect any sale of
their securities during this period, and the exchange of Class A ordinary shares into ADSs involves costs.

        There
is no direct trading or settlement between the NYSE and the Hong Kong Stock Exchange on which our ADSs and our Class A ordinary shares are respectively traded. In addition,
the time differences between Hong Kong and New York, unforeseen market circumstances or other factors may delay the deposit of Class A ordinary shares in exchange of ADSs or the withdrawal of
Class A ordinary shares underlying the ADSs. Investors will be prevented from settling or effecting the sale of their securities during such periods of delay. In addition, there is no assurance
that any exchange of Class A ordinary shares into ADSs (and vice versa) will be completed in accordance with the timelines that investors may anticipate.

        Furthermore,
the depositary for the ADSs is entitled to charge holders fees for various services including for the issuance of ADSs upon deposit of Class A ordinary shares,
cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions of ADSs pursuant to share dividends or other free share distributions, distributions of securities other
than ADSs and annual service fees. As a result, shareholders who exchange Class A ordinary shares into ADSs, and vice versa, may not achieve the level of economic return the shareholders may
anticipate.

An active trading market for our Class A ordinary shares on the Hong Kong Stock Exchange might not develop or be sustained and trading prices of our Class A
ordinary shares might fluctuate significantly.

        Following
the completion of the Global Offering, we cannot assure you that an active trading market for our Class A ordinary shares on the Hong Kong Stock Exchange will develop or
be sustained. The trading price or liquidity for our ADSs on the NYSE might not be indicative of those of our Class A ordinary shares on the Hong Kong Stock Exchange following the completion of
the Global Offering. If an active trading market of our Class A ordinary shares on the Hong Kong Stock Exchange does not develop or is not sustained after the Global Offering, the market price
and liquidity of our Class A ordinary shares could be materially and adversely affected.

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        In
2014, the Hong Kong, Shanghai and Shenzhen Stock Exchanges collaborated to create an inter-exchange trading mechanism called Stock Connect that allows international and mainland
Chinese investors to trade eligible equity securities listed in each other’s markets through the trading and clearing facilities of their home exchange. Stock Connect currently covers over 2,000
equity securities trading in the Hong Kong, Shanghai and Shenzhen markets. Stock Connect allows mainland Chinese investors to trade directly in eligible equity securities listed on the Hong Kong Stock
Exchange, known as Southbound Trading; without Stock Connect, mainland Chinese investors would not otherwise have a direct and established means of engaging in Southbound Trading. In October 2019, the
Shanghai and Shenzhen Stock Exchanges separately announced their amended implementation rules in connection with Southbound Trading to include shares of WVR companies to be traded through Stock
Connect. However, since these rules are relatively new, there remains uncertainty as to the implementation details, especially with respect to shares of those companies with a secondary listing on the
Hong Kong Stock Exchange. It is unclear whether and when the Class A ordinary shares of our Company, a WVR company with a secondary listing in Hong Kong upon the listing on the Hong Kong Stock
Exchange, will be eligible to be traded through Stock Connect, if at all. The ineligibility or any delay of our Class A ordinary shares for trading through Stock Connect will affect mainland
Chinese investors’ ability to trade our Class A ordinary shares and therefore may limit the liquidity of the trading of our Class A ordinary shares on the Hong Kong Stock Exchange.

Since there will be a gap of several days between pricing and trading of our Class A ordinary shares, the price of our ADSs traded on the NYSE may fall during this
period and could result in a fall in the price of our Class A ordinary shares to be traded on the Hong Kong Stock Exchange.

        The
pricing of the Offer Shares will be determined on the Price Determination Date. However, our Class A ordinary shares will not commence trading on the Hong Kong Stock Exchange
until they are delivered, which is expected to be about four Hong Kong business days after the Price Determination Date. As a result, investors may not be able to sell or otherwise deal in our
Class A ordinary shares during that period. Accordingly, holders of our Class A ordinary shares are subject to the risk that the trading price of our Class A ordinary shares could
fall when trading commences as a result of adverse market conditions or other adverse developments that could occur between the Price Determination Date and the time trading begins. In particular, as
our ADSs will continue to be traded on the NYSE and their price can be volatile, any fall in the price of our ADSs may result in a fall in the price of our Class A ordinary shares to be traded
on the Hong Kong Stock Exchange.

There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs following our initial public offering in Hong Kong and listing of
our Class A ordinary shares on the Hong Kong Stock Exchange.

        In
connection with our initial public offering of Class A ordinary shares in Hong Kong, or the Hong Kong IPO, we will establish a branch register of members in Hong Kong, or the
Hong Kong share register. Our Class A ordinary shares that are traded on the Hong Kong Stock Exchange, including those to be issued in the Hong Kong IPO and those that may be converted from
ADSs, will be registered on the Hong Kong share register, and the trading of these Class A ordinary shares on the Hong Kong Stock Exchange will be subject to the Hong Kong stamp duty. To
facilitate ADS-ordinary share conversion and trading between the NYSE and the Hong Kong Stock Exchange, we also intend to move a portion of our issued Class A ordinary shares from our register
of members maintained in the Cayman Islands to our Hong Kong share register.

        Under
the Hong Kong Stamp Duty Ordinance, any person who effects any sale or purchase of Hong Kong stock, defined as stock the transfer of which is required to be registered in Hong
Kong, is required to pay Hong Kong stamp duty. The stamp duty is currently set at a total rate of 0.2% of the greater of the consideration for, or the value of, shares transferred, with 0.1% payable
by each of the buyer and the seller.

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        To
the best of our knowledge, Hong Kong stamp duty has not been levied in practice on the trading or conversion of ADSs of companies that are listed in both the United States and Hong
Kong and that
have maintained all or a portion of their ordinary shares, including ordinary shares underlying ADSs, in their Hong Kong share registers. However, it is unclear whether, as a matter of Hong Kong law,
the trading or conversion of ADSs of these dual-listed companies constitutes a sale or purchase of the underlying Hong Kong-registered ordinary shares that is subject to Hong Kong stamp duty. We
advise investors to consult their own tax advisors on this matter. If Hong Kong stamp duty is determined by the competent authority to apply to the trading or conversion of our ADSs, the trading price
and the value of your investment in our Class A ordinary shares and/or ADSs may be affected.

Purchasers of our Class A ordinary shares in the Global Offering will experience immediate dilution and may experience further dilution if we issue additional
Class A ordinary shares in the future.

        The
initial public offer price of our Class A ordinary shares in Hong Kong is higher than the net tangible assets per share of the outstanding Class A ordinary shares
issued to our existing shareholders immediately prior to the Global Offering. Therefore, purchasers of our Class A ordinary shares in the Global Offering will experience an immediate dilution
in terms of the pro forma net tangible asset value. In addition, we may consider offering and issuing additional Class A ordinary shares or equity-related securities in the future to raise
additional funds, finance acquisitions or for other purposes. Purchasers of our Class A ordinary shares may experience further dilution in terms of the net tangible asset value per share if we
issue additional Class A ordinary shares in the future at a price that is lower than the net tangible asset value per share.

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BUSINESS

Our Mission

        Our mission is to bring happiness to more people through our services.

Our Objective and Vision

        Our objective is to become a world-leading comprehensive logistics service provider. Our vision for ZTO is a respected enterprise with dignity,
sustainability and longevity for centuries to come.

Our Values

        Our values are fundamental to the way in which we operate and achieve continued and sustainable growth. Our core values
are:

    •
    Shared success—”Shared success” is a guiding principle that encourages everyone under the ZTO brand to build together and share
    results. It prioritizes the collective greater good, aligns interest and resolves conflicts among stakeholders, and promotes equitable allocation of risks and rewards.

    •
    Trust and accountability—The intention of a shared success aligns interests, and trust and accountability reinforce effective
    execution. At ZTO, we foster a culture of mutual trust and clear accountability among our network partners, employees and us, and each is expected to fulfill their part of the commitment.

    •
    Innovation and entrepreneurship—”Innovation and entrepreneurship” is ZTO’s cultural approach with which we identify and solve
    problems, and create opportunities with a novel business model, relationships with partners and use of technologies that improve the way we operate and serve.

Overview

        We are a leading express delivery company in China. Founded in 2002, we are China’s leading express delivery service provider based on total
parcel volume, with a 19.1% market share in 2019. We are the youngest among the scaled express delivery companies in China and the largest in scale and the most profitable among the Tongda Operators.
We provide express delivery services and other value-added logistics services through our nationwide network.

        Under
a network partner model, we operate the mission-critical line-haul transportation and sorting network within the express delivery service value chain, whereas our network partners
operate the outlets that provide first-mile pickup and last-mile delivery services. The network partner model enables us to scale our network rapidly with limited capital outlay and fixed costs,
consequently driving higher return on invested capital and equity.

        We
have developed one of the most extensive and reliable delivery networks in China. As of June 30, 2020, our network infrastructure consists of 90 sorting hubs with 282
automation lines, over 3,400 line-haul routes serviced by approximately 9,050 self-owned line-haul vehicles, and over 5,000 direct network partners operating approximately 30,000 pickup/delivery
outlets and over 50,000 last-mile posts. Our network covers over 99.2% of cities and counties in China.

        In
April 2008, we were the first among the Tongda Operators to implement a sharing mechanism (which started compensating delivery outlets with last-mile delivery service fees) to address
inequitable burden of cost and the associated inequitable allocation of fee revenue between pickup and delivery outlets. Before the implementation of such mechanism, service outlets relied on pickup
fees to sustain their business, which was difficult for outlets with significantly higher delivery volumes than pickup volumes due to the uneven nature of economic development, geographic
concentration of e-commerce merchants and geographical distribution of consumers in China. The principle design for this balancing

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mechanism
came from our distinctive “shared success” philosophy, which was formally introduced in 2010 and fully established by 2015 when we completed the conversion of part of our major network
partners to shareholder-employees. Through this reorganization, we were the first and the only among the Tongda Operators to reengineer the traditional network partner model into a structure of
centralized strategic, financial and human resource decision making, and build trust and foster a win-win mindset among network participants. Throughout the years, we have successfully built a more
cohesive and stable network by adhering to our differentiated philosophy and core values in day-to-day decision making and execution.

        Our
openness to and adoption of new and innovative technologies allows us to maintain cost leadership in the industry. Our proprietary Zhongtian system is the technology backbone for our
end-to-end operational management encompassing activities conducted in our network and by our network partners. A network partner model can be as effective and more efficient than a vertically owned
and operated network through digitization, which helps to overcome standardization and stability challenges. Since 2015, we have collaborated with the Chinese Academy of Sciences and developed
multiple generations of proprietary automated sorting equipment and specialized software to achieve high-speed sorting. In addition, we continuously improve the mix of our line-haul vehicles, and
apply innovative design and technology to improve route planning, enhance safety and achieve greater productivity.

        We
have achieved rapid growth while maintaining superior profitability and high customer satisfactions. Our total parcel volume increased from 6.2 billion in 2017 to
12.1 billion in 2019, and from 5.4 billion in the six months ended June 30, 2019 to 7.0 billion for the six months ended June 30, 2020. ZTO has been consistently
ranked top for overall customer satisfaction among the Tongda Operators. Our net income increased from RMB3.2 billion in 2017 to RMB5.7 billion in 2019. Our non-GAAP adjusted net income
increased from RMB3.2 billion in 2017 to RMB5.3 billion in 2019. Our net income and non-GAAP adjusted net income for the six months ended June 30, 2020 was RMB1.8 billion
and RMB2.1 billion, respectively. Leveraging scale and continuous gain in operational efficiency, our net profit per parcel is the highest among the Tongda Operators.

        We
strive to become a world leading comprehensive logistics service provider and sustain profitable growth. While our core express business is performing well, we are leveraging our
resources and capabilities by expanding into adjacent markets such as cross-border, less-than-truckload and integrated warehousing and delivery fulfillment services. We believe more segments will
evolve out of our core competencies and resource build-up to address logistics and commerce needs as the overall Chinese economy continues to grow. As China’s logistics industry develops steadily to
catch up with developed countries in terms of scale and efficiencies, we strive to devote the right amount of resources to the right things at the right time. We believe this disciplined approach to
business expansion will propel us to steadily but surely transform ultimately into a platform with leading capabilities serving the entire logistics eco-system. Our journey has just begun.

Our Strengths

        Our culture is the framework of how we operate our business. Our mission, to bring happiness to more people through our services, was founded by
a few entrepreneurs led by our founder seeking better lives for themselves. Soon after, more and more people gathered around the founding team, having been attracted by the distinct values and
practices of shared-success, trust and accountability, innovation and entrepreneurship, and together we built a strong network that connects tens of thousands of employees, entrepreneurs, businesses
and customers. Our mission, vision and values together shape our business purpose, form the guiding principles of strategic decision-making processes and have directly contributed

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to
our growth and development over the years. We believe our competitive strengths are the embodiment of, and are inseparable from, our distinguishing culture. These competitive strengths include:

Superior scale and capability

        We are the leading express delivery company in China and in the world in terms of total parcel volume, according to iResearch. We achieved this
leadership position through years of consistent investment and innovations. We have established the largest self-operated modern facilities space, we have assembled the largest and more
efficiently-run self-owned line-haul vehicle fleet among the Tongda Operators, we have cumulated strong financial resources, we have cultivated a stable partner network, and most importantly, we have
developed a team of loyal, customer-centric and results-driven people. Over the years, we have firmly established ourselves as the trusted express delivery partner for millions of commerce customers,
including online merchants and consumers selling and buying products on Chinese e-commerce sites such as Alibaba, Pinduoduo and JD.com.

        Our
total parcel volume in the first six months of 2020 was 6,969.9 million, which accounted for 20.6% of the total express delivery parcel volume in China during the period.

        As
of June 30, 2020, our nationwide logistics network comprises of 90 sorting centers with a total of 282 sets of installed automation equipment, connected by over 3,400 line-haul
routes serviced by approximately 9,050 self-owned line-haul vehicles, over 5,000 direct network partners and approximately 30,000 pickup/delivery outlets that covers 99.2% of the cities and counties
of China, as well as over 50,000 last-mile posts that provided an alternative to in-person delivery in our network.

        Such
scale and capabilities like ours cannot be replicated overnight.

Our distinct partner network built upon a “shared-success” philosophy

        We believe that a highly scalable network partner model has provided the crucial support for the phenomenal e-commerce growth in China and will
serve as the catalyst for continued economic growth.

        With
our network partner model, we were able to expand our nationwide network quickly and provide e-commerce merchants with greater geographic reach at low cost. We continue to deepen
the penetration of our network, the number of our network partners increased to over 5,000 as of June 30, 2020, and the number of outlets in our logistics network increased to approximately
30,000 as of June 30, 2020.

        To
ease the burden of last-mile delivery driven by increasing volume, we have encouraged our network partners to invest early and secure physical presence with last-mile capabilities and
consumer access by establishing last-mile posts. With a goal to reach over 70,000 by the end of 2020, we currently have over 50,000 last-mile posts, representing the largest number of last-mile posts
among our peers, according to the iResearch report. Our early-mover lead in last-mile presence ensures not only lower pickup and delivery costs for our network partners but also network stability and
economic viability for the future.

        We
differentiate our network partner model by implementing features reflecting our unique “shared success” philosophy. We are the first express delivery company in China to introduce a
“delivery fee” mechanism by requiring the pickup outlet to share part of their fee to the delivery outlet. This sharing arrangement has resolved the problem of mismatch of revenue and costs among
pickup and delivery outlets in regions with different levels of economic development and imbalanced pickup and delivery volumes.

        According
to the iResearch report, we are the first among Tongda Operators to convert major network partners to shareholders of the Company, with which we successfully aligned interests
and built a more cohesive alliance. We strive to ensure interests are aligned across our network, which in turn provides
higher network stability, better network partner service quality and performance, and stronger network partner loyalty to the ZTO brand.

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Best-in-class operational capabilities and cost efficiencies through continued innovation

        Our best-in-class operational capabilities have enabled us to achieve cost leadership in the industry. Over the years, we continue to innovate,
and have adopted newer and better designs and technologies in both hardware and software to enhance efficiencies.

        Our
average transportation cost per parcel has decreased from RMB0.77 in 2017 to RMB0.62 in 2019. As volume increased, we gradually reduced use of third-party trucking services which are
often more costly than using our own vehicles. We have systematically increased the proportion of high capacity (15- to 17-meter-long) models to maximize our fleet’s unit output and reduce cost. As of
June 30, 2020, 78% of our self-owned vehicles were high capacity vehicles. We have patented our proprietary design of curved aluminum trailer, which is not only lighter, rust-resistant but also
has more load capacity and is more aerodynamic with improved fuel economy compared with traditional rectangular-shaped steel containers. In addition, by equipping our line-haul vehicles with RFID chip
embedded tires, we can better assess real-time operating conditions such as vehicle speed, estimated fuel consumption and normal wear and tear so as to schedule proper maintenance intervals. We also
equipped our vehicles with safety monitoring and accident prevention devices and reduced claims consistently. Meanwhile, our route planning effectiveness continue to improve as we implemented advance
technology for better data analytics and resource planning.

        Our
average sorting cost per parcel has decreased from RMB0.39 in 2017 to RMB0.34 in 2019. We kept improving the level of automation to keep pace with volume increase and gradually
eliminated labor headcount to achieve best economy. The number of automated sorting lines increased substantially from 58 sets in 2017 to 265 sets in 2019. Since 2015, we collaborated with the Chinese
Academy of Sciences in the development of several generations of automated sorting equipment, such as cross belt sorting equipment, fully integrated dynamic weighing machine, and line shaft diverter.
Our high-speed automated sorting is supported by increasingly more sophisticated software (including data-enabled algorithm, real-time analytics and recalibration) to ensure faster and more reliable
package data capturing and dispatching, and to reduce sorting errors and costs of re-work.

        Our
cost leadership enables us to achieve the highest profitability among the Tongda Operators. While our express delivery business represented an increase from 15.5% to 19.1% of the
industry volume from 2017 to 2019, our net profit market share has been consistently close to 50% from 2017 and exceeded 50% in 2019, according to the iResearch report.

        Shanghai
Zhongtongji Network Technology Co. Ltd., our wholly owned PRC subsidiary has been certified as the High and New Technology Enterprise (“HNTE”), and contributed
significant technology-driven profit to the consolidated group. As HNTEs are awarded a preferential tax rate, lower effective tax rate at the consolidated group level indicates higher contribution of
technology-driven profit by the HNTE. According to the iResearch report, we achieved the lowest effective tax rate among the Tongda Operators consistently for tax years 2017 to 2019. Shanghai
Zhongtongji Network Technology Co. Ltd. is in the process of applying for the renewal of HNTE status for another three years.

Experienced and entrepreneurial management team

        We have an experienced and entrepreneurial management team with a proven track record of strategic thinking and sound execution. Our founder,
chairman of the board and chief executive officer, Mr. Meisong Lai, is well regarded in the China’s express delivery industry for his thought leadership and sharp and practical business acumen.
We have a stable management team with long-standing industry experiences, and the majority of our senior management have been with the Company since inception. Leadership team has been responsible for
breakthrough ideas and innovations in, and has been consistently reinventing ourselves and transforming the Company to become bigger in scale, stronger in capabilities and better at execution and
delivering results.

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        We
design results-oriented performance metrics and incentive programs with clear accountability and fair measurement for our team of general managers who are responsible for regional
operations and financial results. We have established ZTO University, an institution tasked to develop and promote future generations of leaders and form growing talent pools for continued enterprise
vitality.

Our Strategies

        Our goal is to be become a world-leading comprehensive logistics service provider and we set the following strategies to achieve that goal:

Strengthen culture and improve brand recognition

        As we grow and expand our business and increase our sphere of influence, our mission of “bringing happiness to more people through our services”
means we are taking on greater responsibilities. We will continue thinking green and becoming more environmentally sensible, supporting efforts to alleviate poverty and revitalize villages in China,
and creating opportunities for entrepreneurs to return to their hometowns and start new businesses. We strive to become ubiquitous and an integral part of daily lives.

Develop young talents and maintain vitality

        The founding generations of managers are mentors and coaches to our future generations of mangers. We are building varied leadership pipelines
and putting a greater emphasis on promoting internally. Our management trainee programs seek fresh enrollment each year from universities and technical schools, and we conduct on-the-job training and
in-classroom learning for the trainees to develop comprehensive skills. We promote healthy competition for career advancement and cultivate an environment where true talents can thrive.

Achieve greater scale and capacity and further our reach

        We plan to further improve our network infrastructure and expand our capacity to not only meet the increasing volume demand but also enrich
express delivery service offerings to our customers and end consumers. We will transform our network to achieve a new level of efficiencies by
delayering and building direct links across different levels of network nodes. We will continue building last mile presence and extending our reach to frontline personnel and end customers. We intend
to ensure our couriers earning a high level in the market so that they are motivated to provide better services to end customers and achieve greater customer satisfaction, which in turn allows our
network partners to achieve greater economics and remain loyal to our brand.

Build technological advantages to better compete in the future

        We intend to continue to invest in technology and drive innovations, thereby further improve our operational efficiency. Our new generations of
automation lines will be faster in throughput and smarter in precision dispatch, and we will soon be able to substantially reduce manual labor. We will leverage our vast volume of operational data to
digitize business know-how and make managerial process calculable. We believe the use of technology shifts focus from solving problems to predict and prevent problems, and we expect technological
advancement to create greater value as become one of our core competitive advantages in the near future.

Expand beyond express delivery

        The competitive landscape has been widening across China’s logistics industries. By leveraging our existing strength and our increasingly
stronger ability to assemble critical resources, we are well positioned to develop comprehensive logistics service capabilities. We will extend up and down logistic value chains,

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thereby
capturing growth opportunities, realizing synergies across other logistics sub-segments such as less-than-truckload, one-stop warehousing and delivery services and cold chain logistics.

        Further,
by combining our resources, best-in-class capabilities and our direct access not only to tens of millions of on-line and off-line end customers but also to businesses large or
small across different industries, we are able to shorten the distance in space and time for commerce, for example, between raw material and manufacturing, and between farmland and dinner tables. We
intend to transform
beyond express delivery and develop into a platform with leading capabilities serving the entire logistics ecosystem and related commerce needs.

Service Offerings by US and Our Network Partners

        We are a leading express delivery company in China. Through our network and together with our network partners, we provide domestic and
international express delivery services supplemented by other value-added services. Our delivery network covers over 99.2% of China’s cities and counties as of June 30, 2020.

        We
mainly provide express deliveries in China of parcels weighing under 50 kilograms with expected delivery time ranging from 24 to 72 hours. Our delivery time has improved over
time.

        The
following chart sets out the services provided by us and our network partners.

Key Category

      Service Offerings

Domestic Express

  Express Delivery  

•

Intra-city Delivery

•

Inter-city
Delivery

  Enterprise Customer Services  

•

Customized one-stop
express delivery solution for key accounts

  Ancillary Services(1)  

•

Cash-on-Delivery Service

•

Alternative Address
Pick-up & Delivery

•

Proof-of-delivery Collection

•

Parcel Interception Service

•

Reverse Logistics

•

Others

  Regional  

•

Hong Kong/Taiwan
Door-to-Door Express Service

International Express

  Cross-border  

•

International express
services to key overseas markets in cooperation with business partners


(1)
Alternative
Address Pick-up & Delivery service enables the sender to change the pick-up and destination address. Proof-of-delivery Collection service is a
kind of service where we collect the receipt signed by the recipient upon successfully delivering a parcel and send it to the sender. Parcel Interception Service allows senders to intercept and
redirect a parcel before it is scheduled for delivery or delivered to its destination. As to Reverse Logistics service, the senders, such as the merchants on e-commerce platforms, may entrust us to
pick up goods from the designated addresses, such as consumer’s home and retail stores, and deliver the goods to the designated addresses, such as factories and warehouses.

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Express delivery service process

        The following diagram illustrates the process for the completion of a typical domestic delivery order in our network.


GRAPHIC

        The
full delivery fees collected by pickup outlets upfront from the senders typically comprise of (i) the pickup service fees, (ii) the network transit fees payable to our
Company; and (iii) the last-mile delivery fees payable to the delivery outlets operated by other network partners. After collection, pickup outlets would keep the pickup service fees, and pay
the network transit fees and the last-mile delivery fees to our Company. We would then pass the last-mile delivery fees on to the applicable delivery outlets.

        Step 1: Parcel Pickup.    A pickup outlet operated by our network partner arranges for a courier to collect the parcel from the
sender (such as a
merchant on e-commerce platform or an enterprise customer) once the pickup outlet has received a delivery order. Unless the sender chooses pay-at-arrival service, the pickup outlet collects the full
delivery service fee upfront from the sender at the time of pickup. All collected parcels are then forwarded to our regional sorting hub once or twice per day depending on parcel volume. Typically,
parcels that are picked up before 6 p.m. will be shipped to our sorting hub on the same day. Each parcel is assigned a waybill with a unique tracking number and barcode which, together with our
automated systems, allows us to track the status of each individual parcel throughout the entire pickup, sorting and delivery process.

        Step 2: Parcel Sorting and Line-Haul Transportation.    Upon the receipt of parcels shipped from various pickup outlets from
locations in their
respective coverage area, the sorting hub sorts, further packs and dispatches parcels to the destination sorting hub. We provide line-haul transportation services between sorting hubs. Barcodes on
each waybill attached to the parcels are scanned as they go through each sorting and transportation gateway, allowing us to keep track of the delivery service status of each parcel.

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        Step 3: Parcel Delivery.    Our destination sorting hub unloads and sorts the parcels, which are then delivered to the recipients by
the delivery
outlets operated by our network partners. Once the recipient signs the waybill to confirm receipt, a full-service cycle is completed, and settlement of the delivery service fee promptly ensues in our
network payment settlement system.

Express delivery service pricing

        The network transit fees that we charge our network partners for the express delivery services we provide to them primarily consist of
(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 parcel weight and route distance. We
evaluate our pricing and make adjustments from time to time based on our operating costs, market conditions and competitions as well as our service quality. For our direct network partners at the
provincial level, we provide fee discounts to those who significantly outperform the performance targets that we set.

        Our
service pricing is also be affected by the pricing adopted by our network partners, who have full discretion over the pricing of their services; such pricing is reflected in the
amount of full delivery service fees they collect upfront from senders. Our network partners determine their pricing mainly based on their total costs, which primarily consists of the network transit
fees we charge, the last-mile delivery fees payable to the delivery network partners, as well as the outlet operating costs. We provide guidelines to set the last-mile delivery fees together with
network partners operating delivery outlets, where the guidelines are based on a variety of factors including the economic environment, market conditions and business conditions of the outlets. We are
able to monitor the “fee sharing” mechanism between pickup and delivery outlets as the guidelines are implemented and the fees are payable through our system. Our network partners also consider other
factors including market conditions and competition as well as their service quality. We do not set any explicit limitations on pricing and allow pricing latitude to our network partners so that they
can effectively respond to the competitive
dynamics in their local markets with tailor-made pricing based on the business volume and long-term prospect of each sender. Historically, the delivery service fees our network partners are able to
charge have declined over time, partially as a result of competitive pressure.

Other logistics services

        Building on our core express delivery business, we strive to become an integrated logistics service provider. We are expanding our service
offerings with a goal to build an ecosystem featuring express delivery, less-than-truckload, cross-border, warehousing, aviation, commerce and more. For example, we provide less-than-truckload (LTL)
logistics services with a focus on heavy cargo and international express delivery services in Southeast Asia, Africa and other countries; we also provide customers with integrated logistics solutions
for warehousing, distribution and transportation. Furthermore, we provide freight forwarding services through the acquired business of China Oriental Express Co., Ltd. and its
subsidiaries, which is a major freight forwarding and international logistics services provider in Hong Kong and Shenzhen. Furthermore, we are also expanding into air cargo business.

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Our Network and Infrastructure

        Our network consists of (i) our directly operated core sorting hubs and line-haul transportation network and (ii) network
partner-operated outlets, as well as last-mile posts, across China. The below map illustrates the geographical coverage of our network.


GRAPHIC

Sorting hubs

        Our sorting hubs are connected by the line-haul transportation network we operate. Each sorting hub collects parcels from outlets within its
coverage area, sorts parcels according to their destination and dispatches them to the appropriate destination sorting hub. As of June 30, 2020, we operated 81 sorting hubs and our business
partners operated 9 sorting hubs.

        The
sorting hubs operated by our business partners are located in remote areas in China and we work closely with independent third-party owners to effectively operate those hubs. In
addition to the sorting hubs, our network partners also operate sorting facilities in certain remote areas in China.

        Forty
of the sorting hubs operated by us are located on premises we own, for 18 of which we also lease additional areas, and 41 of the sorting hubs operated by us are located on leased
premises. We plan to make long-term investments in land and facilities on self-owned premises to support the stability of our operations. From time to time, we also provide temporary warehousing
services to certain key account customers to store their products close to their target demographics.

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        We
have continuously adopted new technology solutions in automation hardware and software to enhance the efficiency of our operations. For example, we adopted telescopic conveyor belts
for loading and unloading trucks in 2015, as well as fully integrated dynamic-weighing machines capable of measuring the dimensions and weight of parcels simultaneously at a high speed without having
to stop the flow of packages. In addition, we work with technology companies and academic institutions to customize and upgrade existing design concepts. For example, we successfully collaborated with
the Chinese Academy of Sciences in the Academy’s development of several variations of automated sorting equipment since 2015. We have also developed and continuously re-engineered sophisticated
software (including data-enabled algorithm, real-time analytics and recalibration) to support high-speed sorting in order to ensure fast and reliable package data capturing and dispatch, and to reduce
sorting errors and costs of re-work. In particular, we utilize an image-based learning algorithm in our safety inspection of packages to recognize prohibited illegal items during our inspection
process and to reduce human error. The number and capacity of our automated sorting lines increased substantially from eight in 2016 (all of which were for small parcels) to 265 in 2019 (99 of which
were for large parcels and the remaining 166 were for small parcels).

Line-haul transportation network

        We connect our sorting hubs with over 3,400 well-planned line-haul routes. Our line-haul transportation network is serviced by (i) our
own fleet, (ii) a fleet operated by Tonglu Tongze, a company majority-owned by our employees which works exclusively for us, and (iii) certain independent third-party vehicles. We
control the route planning and vehicle dispatch of our entire line-haul transportation network.

        As
of June 30, 2020, our own fleet consisted of approximately 9,050 trucks, of which approximately 7,100 are high capacity 15 to 17-meter-long trailer models. Tonglu Tongze had a
fleet of approximately 850 trucks as of June 30, 2020. Certain of our employees beneficially owned majority equity interests in Tonglu Tongze as of June 30, 2020. Tonglu Tongze purchases
vehicles with its own funds, and they implement dispatching plans according to our network needs. The price we pay to Tonglu Tongze is based on our market insights on cost factors. We use the same
criteria and pricing standards when we contract independent third-party transportation companies. We also contract other independent third-party transportation companies to fulfil additional capacity
needs, most of which are single trip transportation when we foresee a low return trip truckload. We carefully review the operating history, fleet condition, reliability and other comprehensive
criteria of the bidders to select only suitable providers.

        In
order to further improve our operating efficiencies as volume increases, we have systematically increased the proportion of high capacity 15- to 17-meter-long trailer models within
our fleet from 39% in 2016 to 72% in 2019 and further to 78% in the first half of 2020 to optimize unit output and reduce cost. Moreover, we have established a systematic data and technology driven
program to optimize trailer designs to reduce costs as well as enable digital tracking for real-time analytics of our vehicles. Further, we also helped develop improved vehicle parts and patented
trailer designs. For example, our proprietary patented design of curved aluminum trailer is not only lighter but also more aerodynamic compared with traditional square-shaped steel containers. The
higher capacity of these trailers (145m3 rather than 127m3) and lighter weight (6,700kg/ea rather than 9,000kg/ea) contributes to the increased fuel economy of our trailers
and further contributes to the reduction in transportation cost. In addition, we have made RFID chip embedded Michelin tires a standard issue for line-haul vehicles. This allows us to better manage
our moving assets by assessing real-time operating conditions such as vehicle speed and estimated fuel consumption and estimating normal wear and tear in order to schedule proper maintenance
intervals.

        We
assess incoming volume (including maximum stress level) and simulated route planning (including road conditions) to inform our choice between deploying our own line-haul resources or
supplementing capacity with third-party transportation services. We combine the programming interface of third-party map applications with our big data of parcel traffic and volume to feed our
intelligent service routing algorithm to model the rate and direction of parcel flow, dynamically predict future capacity demands, and

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make
adjustments in allocation of personnel and transport resources. Hence we are able to reduce inefficiency in parcel handling, increase fleet load rates and achieve optimal transportation time and
costs.

Pickup and delivery outlets and last-mile posts

        The pickup and delivery outlets are all operated by our network partners and are not owned by us. Our network partners primarily provide pickup
and last-mile delivery services through the outlets managed by them, although certain larger outlets also have regional sorting and dispatching capabilities. Each outlet has its own designated
geographical scope of operation and can generally only take orders originating within that area. Our network partners also generally arrange the transportation between pickup/delivery outlets and our
sorting hubs. As of June 30, 2020, our network had approximately 30,000 pickup and delivery outlets nationwide, covering 99.2% of China’s cities and counties.

        We
have encouraged our network partners to invest early and secure physical presence with last-mile capabilities and consumer access by establishing last-mile posts. We currently have
over 50,000 last mile posts across China. A last mile post is on average a 35-60 square meter space located near residential areas or office buildings or on university campuses where the couriers can
leave delivery packages for recipients to pick up instead of delivering in person. A last mile post can be multifunctional and serve different purposes including receiving outgoing packages,
collecting fees from couriers who leave packages for pickup (including processing packages left by competitors’ couriers) and realizing retail profit, thereby achieving greater overall labor and
facility costs efficiencies.

Our Network Partner Model

        Our network partners own and operate the pickup and delivery outlets under our brand and form an important part of our network system. The
diagram below illustrates our network partner model.


GRAPHIC

        As
of June 30, 2020, we had over 5,000 network partners with whom we have directly entered into agreements prescribing the terms and conditions of their operations of pickup and
delivery outlets under

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our
brand. We refer to such network partners as our direct network partners. These agreements with direct network partners are generally for a term of three years and each direct network partner may
elect to negotiate with us for renewal of the agreement upon expiration if it wishes to remain in our network. Our network partners pay us network transit fees for the express delivery services we
provide to them. The network transit fees that we charge our network partners for the express delivery services we provide to them primarily consist of (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 parcel weight and route distance. We have the right to impose monetary penalties on our
direct network partners for failure to adhere to the terms of the agreements. A direct network partner is also required to place a deposit with us as a performance guarantee. We have authorized our
direct network partners to conduct their express delivery business exclusively under our “Zhongtong” or “ZTO” brand and mandate the unified application of our logos on outlets, personnel uniforms,
transportation vehicles and packaging materials.

        Each
of our direct network partners is authorized by us to operate within a designated area, the size of which ranges from a township to an entire province. Depending on the size of, and
the business volume in, their respective authorized areas, many of our direct network partners subcontract a portion of their business to third parties with our consent. We do not directly enter into
agreements with those third parties and refer to them as our indirect network partners. Indirect network partners are also authorized to operate ZTO-branded express delivery business.

        Our
Zhongtian system provides the technological infrastructure for the management of our network partners. The Zhongtian system consists of our operational management system, network
management system, settlement system, finance system and other integrated systems and mobile apps connecting our network partners. For more details, see “—Information Technology and
Intellectual Property.” In particular, our Zhongtian system tracks each delivery order and calculates the network transit fees payable to us, and the last-mile delivery fees payable to our direct
network partners and,
where applicable, our indirect network partners. Starting from May 2018, we use Alipay to handle the settlement of payments from our network partners to us and among our direct network partners. All
of our direct network partners have an Alipay account on our Zhongtian system, and we require them to make a prepayment from their respective account to our ZTO Alipay account through our Zhongtian
system. The prepaid amount is used to settle network transit fees from our network partners to us and settle last-mile delivery fee from us to direct network partners.

        All
of our direct network partners and most of our indirect network partners work with us exclusively. A small number of our indirect network partners may process packages for other
express delivery companies. This is typically limited to situations where an outlet is located in a remote or isolated area or newly established markets. Such exceptions to our exclusivity requirement
are necessary in order to support the outlet’s start-up volume.

        We
control the qualification of new network partners and we provide extensive ongoing training to our network partners. We also periodically review the performance of our network
partners on parcel volume, local market share, service quality and parcel safety/security scores. We consider the conditions and forecast of the local market to set guidance for those indicators. We
also set guidance and review the performance of certain pickup and delivery outlets with large parcel volume. For our direct network partners at the provincial level, we provide fee discounts to those
who significantly outperform the performance targets that we set.

        If
a direct network partner continuously fails to meet applicable performance targets set by us, we may unilaterally terminate our agreement with such direct network partner, which has
only occurred in isolated cases historically. In those cases, we would introduce qualified buyers vetted by us or, in the cases where the exiting direct network partner has already identified a buyer
itself, we would review the buyer’s credentials and decide whether to accept or reject it. In the case of voluntary departure by a direct network partner, it may choose to sell the outlet operating
business to a buyer, where the foregoing review process

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would
also apply. Moreover, under the agreement with us, the network partner may provide a three-month notice of termination and the agreement would be terminated upon mutual agreement between the
parties. A network partner who discontinues cooperation with us may join a third party express delivery network.

        Under
the agreement with us, the network partner also has the right to unilaterally terminate the agreement within seven days from the date of execution of the agreement with notice to
us; provided that, if the network partner has started to use our network resources, has begun to provide services to customers, or has exercised other major rights under the agreement, the network
partner shall not
terminate the agreement accordingly. The network partner’s major rights under the agreement are entitlements to the following products or services provided by us: (1) electronic documents or
software in relation to enterprise management system; (2) guidance on the use of express delivery networks, business operation model and employee training; (3) sufficient, continuous and
quality-guaranteed material supply; (4) advertising support; and (5) network transit service.

        We
provide our network partners latitude in their pricing decisions. The network partners have full discretion over their daily operations and can make localized decisions with respect
to facilities, vehicles and recruitment to meet their operational needs.

        We
also provide financial services to qualified network partners. We select qualified network partners based on certain criteria set by us, such as having legal and stable income or
source of income and engaging in operation activities that are legal and meet the national industrial policies and requirements. To provide such financial services, we enter into relevant agreements
with qualified network partners under which the material terms (e.g. loan amount, maturity date, guarantee or pledge and event of default (as applicable)) of such financial services are
stipulated. We have obtained the requisite business licenses and/or approvals under relevant PRC laws and regulations in order to provide such financial services to qualified network partners. Please
also see “Risk Factors—Risks Related to Our Business and Industry—We face risks associated with the financial services we provide to network partners.”

        We
had a financing receivables balance of RMB64.0 million, RMB518.0 million, RMB 1,060.9 million and RMB 1,712.5 million as of December 31, 2017, 2018
and 2019 and June 30, 2020. No default occurred during the Track Record Period. For maturity profile of the financing receivables, please see “Financial Information—Critical
Accounting Policies—Financing Receivables, Net of Allowance.”

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Our Customers

        The following chart illustrates parcel and fund flows to and from our direct and end customers.


GRAPHIC

        Our
direct customers are our direct network partners, who, along with our indirect partners, own and operate pickup and delivery outlets. We provide our direct network partners with
access to our line-haul transportation and sorting network, which form the infrastructure of their and our indirect partners’ express delivery services. In addition, we also directly serve some
enterprise customers, including vertical e-commerce and traditional merchants, in connection with the delivery of their products to consumers. Our top five customers accounted for less than 6% of our
total revenues for each of the years ended December 31, 2017, 2018 and 2019 and the six months ended June 30, 2020.

        Together
with our network partners, we mainly serve e-commerce merchants and other express service users as our end customers. A significant portion of our end customers are merchants on
China’s e-commerce platforms. Our enterprise customers are typically larger, nationwide brands with customized requirements for express delivery services. For certain enterprise customers, we provide
direct pickup services without going through the pickup outlets of our network partners. We collect the full amount of delivery service fees from our enterprise customers and pay a portion of these
fees to the delivery outlets of our network partners for last-mile delivery services provided by them. Depending on the availability and capacity of our personnel at the relevant locations, orders
from some enterprise customers may also be picked up through our network partners.

Customer Service

        We believe our high-quality customer service enhances our customer loyalty and brand image. Our network partners directly interact with our end
customers, and we provide ongoing training and conduct regular performance reviews to ensure they provide quality customer services.

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        We
also operate a call center network providing real-time assistance during business hours, seven days a week. Our automated system continues to respond to inquiries outside of business
hours and forwards complicated inquiries to our live call center representatives for further handling during
business hours. Our call center network is localized with branch offices in over 31 provinces in China with mostly local hires to leverage their local knowledge. All branches can be reached via a
unified number and use a centralized call system and database. Our call system automatically directs incoming calls to the local branch near the caller’s location for localized handling. We have
approximately 716 call center representatives who adhere to the same customer service standards nationwide and their local knowledge adds to our customer service effectiveness. We provide regular
trainings to our representatives and periodically review callers’ level of satisfaction with the service they received from us. At the end of each call, each caller is asked to grade the quality of
our customer service and a designated call-back team follows up on all incidences of dissatisfaction.

Information Technology and Intellectual Property

        We have built our proprietary technology systems with open-source and mainstream technologies and have refined and tailored those technologies
to suit our operational needs. We design and utilize our technology systems to enhance the efficiency and scalability of our network and these systems play an important role in the success of our
business. The principal components of our technology system include:

        Zhongtian
System—Our self-developed and centralized Zhongtian system serves as the technology backbone for our express delivery management and network operation. The
Zhongtian system has hundreds of modules with numerous functionalities and features covering all scenarios of our business and operations, consisting of our operational management system, network
management system, settlement system, finance system and other integrated systems and mobile apps connecting our network partners:

    •
    Parcel sorting, transportation and tracking management.  Our parcels are
    sorted and dispatched based on routing logic through the Zhongtian system. With this system, that is compatible with the digital waybill technology, we can track each parcel processed through the vast
    network based on a unique waybill barcode assigned to each parcel. As the parcel moves through each gateway, its barcode is scanned, and its route and other delivery information are captured in the
    Zhongtian system. We also monitor the capacity of our sorting hubs on the Zhongtian system and monitor the real-time movement of each on-duty truck with GPS and GIS technology that is
    synchronized with the Zhongtian system.

    •
    Settlement payment calculation.  The Zhongtian System tracks each delivery
    order and, according to pre-set formulae, calculates the network transit fees payable to us as well as last-mile delivery fees payable to the network partners.

    •
    Platform integration.  Our Zhongtian system is connected to the order
    systems of major e-commerce platforms and vertical e-commerce websites in China. Merchants can therefore seamlessly place delivery orders to the outlets via our Zhongtian system.

    •
    Mobile application.  The Zhongtian system also supports our mobile
    application so that pickup and delivery personnel are able to handle functions such as digital waybill printing, order pickup, parcel tracking, receipt signing on mobile devices. The mobile solutions
    are user centric and comprehensive in meeting the varied needs of different personnel.

    •
    Customer service support.  Our call center representatives have access to
    the Zhongtian system’s database to provide better and more effective customer service. The automated customer service functions on our website and our WeChat official account allow end customers to
    track parcels and search outlet locations with the data support from the Zhongtian system.

    •
    Management of sale of accessories.  Our network partners make online
    purchases of accessories, such as (i) portable bar code readers, (ii) thermal paper used for digital waybill printing, and

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      (iii) ZTO-branded
      packing materials and uniforms, from us utilizing the accessories management module available on the Zhongtian system. Our network partners can log on to our system and place
      orders for waybills, packing materials, portable barcode scanners and other accessories. We then send out the accessories to our network partners once we have processed the orders received.

    •
    Data analytics and decision support.  The Zhongtian system collects and
    provides valuable operational data such as parcel volume, hub utilization and parcel delivery speed to analyze and enhance our and our network partners’ performance. It provides a dashboard available
    to our core management team with various data and analytical tools. By utilizing the dashboard, our management can monitor and evaluate our business in real-time.

        We
have leased a high-grade data center in Zhejiang province to support our core operational systems, such as Zhongtian, and our transportation management system. Our server center in
Shanghai mainly provides the network infrastructure for our managerial, data backup and other non-core functions. We have adopted security policies and measures, including encryption technology, to
protect our software, proprietary data and customer information. Our system is configured with multiple layers of security to prevent unauthorized access to our software and databases, and we
implement security protocols for communication among applications. We utilize a system of firewalls to prevent unauthorized access to our internal systems. Exchange of critical data on our website and
public and private interfaces use the Secure Sockets Layer networking protocol, a standard security technology for establishing encrypted network communications. We regularly back up our databases,
including customer data, with both on-site and off-site storage. Encryption is used to secure sensitive information when it is in transit or being stored.

        Since
2016, we have established a digital product innovation system with eight major digital product lines, covering end-to-end online and offline processes for customer engagement,
customer care, franchisee enablement, sorting hub operations, transportation, finance, smart mobility equipment and e-collaboration. This system enables around 200 applications throughout our
information technology platform.

        We
have been developing a suite of technologies focusing on applying new features to enable fast digital product iteration, such as micro-service architecture, deep learning and AI, big
data, private and hybrid cloud, DevOps, among others. We have also developed proprietary algorithms for order dispatchment and forecasting, as well as capabilities for real-time monitoring of
information systems, automatic failure detection and recovery and high-throughput processing of 100-million orders in a single day.

        We
regard our trademarks, copyrights, patents, domain names, know-how, proprietary technologies, and similar intellectual property as critical to our success. As of June 30, 2020,
we owned 162 computer software copyrights in China for various aspects of our operations, maintained 166 trademark registrations and 48 patents inside China. As of June 30, 2020, we had
registered 14 domain names, including
zto.cn, among others.

        In
addition, we demonstrate the wide use of our technology resources, including Application Programming Interfaces (APIs), in various digital services, such as the ZTO Open Platform at
zop.zto.com, an
express delivery service technology docking platform which shares ZTO’s various service interfaces, and ZTO Security Response Center at
sec.zto.com, an online platform for persons inside and outside the
ZTO network to report security vulnerabilities to better protect customer information
and
enhance network security. We share with the public our achievements in improving digitization and intelligization in our operations through our annual ZTO Tech Open Day.

Competition

        The express delivery industry in China is fragmented and we compete primarily with leading domestic express delivery companies including YTO
Express, STO Express, Yunda Express, Best Express, SF

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Express
and the express delivery services provided by China Post such as EMS. We also face competition from emerging players in our industry or existing players in adjacent markets who may choose to
leverage their existing infrastructure and expand their services into express delivery. We believe that our core value framework, superior scale, distinct partner network, best-in-class operational
capabilities and cost efficiencies provide us with a competitive advantage. Entry into the express delivery industry requires significant initial investment into network construction and partner
attraction. However, certain more established e-commerce companies may establish or further improve their proprietary delivery infrastructure and compete with us. Furthermore, as we look to offer
additional products and services and expand our customer base, we may face competition from established players in new sectors we may choose to enter.

Procurement and Suppliers

        We have adopted centralized procurement for selecting, bidding and purchasing land use rights, certain sorting equipment, line-haul
transportation vehicles and consumables such as waybills, barcode scanners and uniforms. We hold bidding processes where possible to select products and services with the best value. We provide
favorable payment terms in exchange for discounts and to promote long-term stable relationships with reliable suppliers. We work with manufacturers and research institutions to design and modify
equipment to best fit our needs. Compared with off-the-shelf products available in the market, our tailor-made equipment generally has lower procurement and maintenance costs and higher operational
efficiency.

        We
also leverage the scale of our network and assist our network partners to negotiate better procurement terms with their suppliers.

        Our
five largest suppliers accounted for less than 30% of our purchases for each of the years over the Track Record Period and less than 35% for the six months ended June 30,
2020. None of the five largest suppliers in the six months ended June 30, 2020 individually accounted for more than 30% of the semi-annual purchases for the six months ended June 30,
2020. As of September 9, 2020, based on publicly available information, none of the Company’s directors and their close associates or the Company’s controlling shareholders, held a 5% or more
shareholding interest in the Company’s top five suppliers.

Security and Safety

        We have established parcel security screening protocols to inspect parcels before we accept them for sorting and delivery. We have categorized
prohibited items for land and air transport into a few classes, such as flammables and explosives, gunpowder, gasoline, opium and poultry. All senders are required to identify the content of their
parcels. We require the pickup team to visually inspect items sent by end customers. We also have other measures such as X-ray screening of parcels for safety hazards or prohibited items. We have
penalty measures in place for sorting hubs that handle pickup or delivery of prohibited items.

        Workplace
safety and transportation safety are important to our business. We have implemented safety protocols for our sorting hubs and ground transportation fleet to ensure safety and
minimize accidents. We provide periodic training to our employees to recognize hazards, mitigate risk and avoid injury of themselves and others at work.

        We
have introduced and localized driver safety programs from overseas with the support of our vehicle insurance company China Pacific Insurance. In 2017, we equipped our line-haul
vehicles with AI enabled smart devices that can decipher images, recognize unsafe gestures, and communicate with our home office data processing center that would automatically send escalating alarms
to rectify unsafe driving behaviors. As a result, we reduced our accident rate by nearly 70% and reduced our unit premium cost by over 45% from 2016 to 2019.

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Risk Management and Internal Control

        We have devoted ourselves to establishing and maintaining risk management and internal control systems consisting of policies and procedures
that we consider to be appropriate for our business operations, and we are dedicated to continuously improving these systems.

Financial reporting

        We have in place various accounting policies in connection with our financial reporting risk management, as well as procedures and modules in
place on our Zhongtian system to implement our accounting policies, and our finance department reviews our management accounts based on such procedures. We also provide regular training to our finance
department employees to ensure that they understand our financial management and accounting policies and implement them in our daily operations.

Internal control

        We have designed and adopted strict internal procedures to ensure the compliance of our business operations with the relevant rules and
regulations. Our internal audit and compliance department, with the assistance of third-party professional advisors from time to time, set up project team to conduct risk and internal control review.
They work closely with our legal, compliance and finance departments as well as our business units to: (a) perform risk assessments and give advice on risk management strategies;
(b) improve business process efficiency and monitor internal control effectiveness; and (c) promote risk awareness throughout our Company.

Data and technology system risk management

        We are committed to protecting user and customer data in our business and operations. We have a dedicated team and measures to safeguard data
security. We have qualified for Grade III of China’s Administrative Measures for the Graded Protection of Information Security. We have also implemented biometric authentication, password-less
authentication and real-time data leakage risk management throughout our system. We have formed partnerships with key information technology and internet players to jointly enhance business
performance in many innovation areas including workplace collaboration, cybersecurity, natural language processing and automatic sorting.

Compliance and discipline supervision

        We are committed to operating our business with integrity and abiding by the highest standards of business ethics. We have set up a discipline
supervision committee (DSC), and adopted the Code of Business Conduct and Ethics. We require our employees to follow our employee manual and these policies. We also carry out regulatory on-the-job
compliance training to our management and employees to maintain a corporate compliance culture and enhance their compliance perception and responsibility. We have a number of channels for reporting of
misconducts or wrongdoings within our network, including a whistleblowing letter box, the President mailbox and 24/7 compliant hotlines. The DSC is responsible for conducting
preliminary investigations into reported matters, and, where appropriate and necessary, our discipline inspection personnel will investigate further into the matters and recommend disciplinary
actions. Findings of the investigations are periodically reported to our Chief Executive Officer, and regularly communicated with the internal audit and compliance department. Material incidents are
reported to the audit committee of our board of directors.

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Audit committee oversight

        We have established an audit committee to monitor the implementation of our risk management policies across our company on an ongoing basis to
ensure that our internal control system is effective in identifying, managing and mitigating risks involved in our business operations.

        The
audit committee consists of three members, namely Herman Yu and Qin Charles Huang, our independent non-executive directors, and Xing Liu, our non-executive director. Mr. Yu is
the chairman of the audit committee. For the professional qualifications and experiences of the members of our audit committee, see “Directors and Senior Management.”

Branding and Marketing

        We strive to enhance our brand awareness through the provision of high quality services and marketing initiatives. We won the China Express
Golden Parcels Contribution Award for Ten Years in 2020, the 2019 China Express Volume and Quality Double Upgrade Award and 2019 China Express Social Responsibility Award. We won the Data Service
Award at the 9th China Big Data Application Golden Bell Award in 2019 for our intelligent customer service products and systems. Mr. Meisong Lai, our chairman, was awarded the Ram Charan
Management Practice Award in 2019 by the Chinese edition of Harvard Business Review, recognizing excellent management practices. We were awarded as one of the 2019 Shanghai Top 100 Enterprises (ranked
61). Shanghai Zhongtongji Network was awarded as one of Shanghai’s Top 100 Enterprises in the Software and Information Technology Service Industry in 2019. In 2018, we were awarded as one of the
National Advanced Logistics Enterprises and China’s Top 100 Logistics Enterprises’ at the Commendation Congress of Advanced Logistics Enterprises. We were awarded as one of AAAAA logistics companies
by China Federation of Logistics & Purchasing in August 2017.

        We
employ a variety of programs and marketing activities to promote our brand and our services. We regularly attend trade fairs, such as the China Beijing International Fair for Trade in
Services, and speak at industry forums. We also operate a news feed channel and leverage various mobile social network applications, such as WeChat, to distribute business updates and corporate news.
Our offline marketing activities include traditional media such as billboard and public relations activities. In addition, we require our network partners to apply our logos on personnel uniforms,
transportation vehicles and packaging materials in a consistent and unified manner in order to further enhance our brand recognition during interactions with our end customers.

        We
train and guide our network partners to market their products to our end customers and maintain customer relationships. Our designated team maintains enterprise customer relationships
directly through regular dialogue. In general, we and our network partners strive to continuously improve our service qualities to elevate our brand and attract and retain more customers.

Corporate Social Responsibility

        We are committed to leveraging our technology and logistics infrastructure to benefit society. Since our founding, we have been highly committed
to environmental, social and corporate responsibility matters, including environmental sustainability, employee care, poverty alleviation and more.

        Environmental Sustainability.    We have established a dedicated team to lead the formulation, implementation and supervision of
environmental
protection measures throughout our network. To reduce the negative impact of packaging consumables on the environment, we continue to promote the use of green and recyclable packaging and
biodegradable packaging. We also take the initiatives to recycle packaging materials, and guide end consumers to reuse packaging cartons. Moreover, we have been committed to reducing the harmful
impact of transportation on environment. Each of our line-haul vehicles is equipped with positioning equipment to monitor if there’s any abnormality in the transportation

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process
together with GIS (Geographic Information System) to help plan proper transportation routes. We have also used high capacity trailers in order to improve energy efficiency and reduce pollutant
emissions. Meanwhile, we encourage our network partners to use eco-friendly transportation vehicles such as new-energy vehicles and battery-powered cars for pickup and delivery. Furthermore, we
vigorously promote the use of energy-saving and environmental friendly equipment in our operation, including sorting, transportation and delivery.

        Employee care.    We strive to provide employees with welfare benefits and a broad range of career development opportunities. We have
established a
sound talent cultivation mechanism and created an online-offline combined training platform. We have also organized and carried out vocational skills
competitions and other activities for employees to improve professional skills. We have set up a management trainee program which aims to cultivate future leaders of the company through a three-year
training plan. We also strive to help our employees balance their work and life. We have organized various recreational and sports activities to enrich the cultural life of employees.

        Poverty alleviation.    We have actively explored the rural market, and implemented an initiative of “bringing express delivery services
into villages”
by improving the last-mile logistics infrastructure and promoting the coverage of logistics services in rural areas. We have promoted a two-way circulation channel for agricultural products to the
city and industrial products to the countryside, which aims to help stimulate consumption in rural areas and increase the income of rural residents.

        COVID-19 outbreak relief.    Since the COVID-19 outbreak, we have done our utmost to help people in heavily affected regions in China. At
the beginning
of the outbreak, we immediately set up an emergency response leading group and a front line command and control group to fully coordinate land and air transportation resources and provide support for
epidemic prevention and control across the country. By the end of March 2020, we had delivered more than 700 tons of medical and rescue supplies to Hubei Province, including masks, protective
clothing, disinfectants, medical gloves, livelihood support materials, etc. Meanwhile, we take the health and safety of our employees as our top priority. We provided all of our frontline employees
with masks and other protective equipment immediately after the outbreak. We also set up a dedicated fund of RMB 100 million for COVID- 19 epidemic prevention and control to help frontline
workers after resumption of business.

        Environmental protection. We have published our annual ESG report since 2019, detailing our key initiatives and development in areas
pertaining to environmental, social and corporate governance issues. The ESG reports are available at
http://zto.investorroom.com/.

        We
are subject to a number of regulations on environmental protection in China. For example, pursuant to the PRC Law on Environment Impact Assessment, our construction project is
required to undergo an environmental impact assessment, and an environmental impact assessment report must be submitted to the relevant governmental authorities in charge of ecological environment for
approval before the commencement of construction, as applicable. In accordance with the Administrative Regulations on the Environmental Protection Completion Acceptance of Construction Projects, the
Administrative Regulations on the Environmental Protection of Construction Projects and the Interim Measures on the Administration of Acceptance Inspection of Construction Project Environmental
Protection, after the completion of a construction project, we are required to obtain a completion acceptance on environmental protection for the project from the competent department of environmental
protection or carry out the acceptance inspection by ourselves, as the case may be. See “Regulations—Regulations Relating to Environmental Protection.”

Seasonality

        We experience seasonality in our business, mainly correlating to the seasonality patterns associated with e-commerce in China. For example, our
customers generally experience fewer purchase orders during

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national
holidays in China, particularly during the Chinese New Year holiday season in the first quarter of each year. Furthermore, when e-commerce platforms hold special promotional campaigns, for
example, on November 11 and December 12 each year, we typically observe peaks of parcel volume immediately following these campaigns.

Insurance

        We maintain various insurance policies to safeguard against risks and unexpected events. We have purchased compulsory motor vehicle liability
insurance and commercial insurance such as automobile third-party liability insurance, vehicle loss insurance and driver/passenger liability insurance. We also provide social security insurance
including pension insurance, unemployment insurance, work-related injury insurance and medical insurance to our employees.

        We
do not purchase insurance for items delivered by us. Instead, our end customers may choose to pay an additional fee to purchase our priority handling services for valuable items,
under which we will compensate those customers based on the value declared in the case of item loss or damage attributable to us. We do not maintain business interruption insurance; nor do we maintain
product liability insurance or key-man insurance. We consider that the coverage from the insurance policies maintained by us is adequate for our present operations and is in line with the industry
norm. Our management evaluates the adequacy of our insurance coverage from time to time and purchase additional insurance policies as needed. See “Risk Factors—Risks Related to Our
Business and Industry—We have limited insurance coverage which could expose us to significant costs and business disruption.”

Employees

        As of December 31, 2017, 2018 and 2019 and June 30, 2020, we had a total of 16,023, 15,700, 19,009 and 21,465 employees,
respectively. A substantial majority of our employees are based in China.

        The
following table sets forth the breakdown of our own employees as of June 30, 2020 by function:

Functional Area

  Number of
Employees
  % of Total  

Sorting

    6,874     32.02  

Transportation

    4,484     20.89  

Management and Administration

    4,669     21.75  

Customer Service

    1,991     9.28  

Operation Support

    1,406     6.55  

Technology and Engineering

    1,661     7.74  

Sales and Marketing

    380     1.77  

Total

    21,465     100.0  

        In
addition to our own employees, our workforce also included over 55,600 outsourced workers as of June 30, 2020. Our network partners hire their own employees according to their
operational needs.

        We
believe we offer our employees competitive compensation packages and a merit-based work environment that encourages initiative, and as a result, we have generally been able to attract
and retain qualified personnel and maintain a stable core management team.

        As
required by PRC regulations, we participate in various government statutory employee benefit plans, including social insurance funds, namely a pension contribution plan, a medical
insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund. We are required under PRC laws to make contributions
with respect to employee benefit plans and housing provident fund at specified percentages of the salaries, bonuses and certain allowances (as applicable) of our employees, as specified by the local
government from time to time. We

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have
not made adequate employee benefit payments or housing provident fund. We may be required to make up the contributions for these employee benefit plans and housing provident fund as well as pay
late fees and fines and we have made adequate provisions to account for these payments.

        We
enter into standard labor agreements with our employees and, in addition, enter into confidentiality and non-compete agreements with our key employees. The non-compete restricted
period typically expires six months after the termination of employment, and we agree to compensate the employee with a certain percentage of his or her pre-departure salary during the restricted
period.

        We
believe that we maintain a good working relationship with our employees, and we have not experienced any major labor disputes.

Property, Plant and Equipment

        As of September 9, 2020, for our self-operated sorting hubs, (i) we have obtained the title certificates of land use rights from
the relevant authorities with respect to an aggregate gross land area of approximately 2,640,000 square meters, and two of our self-operated sorting hubs have not obtained the title certificates of
land use rights with respect to an aggregate gross land area of approximately 207,000 square meters, and (ii) we leased from third parties approximately 2,000,000 square meters and the terms of
such leases range from one to 16 years.

        In
addition, as of September 9, 2020, approximately 2,190,000 square meters of our self-operated sorting hubs on premises we own were used for sorting purposes and the remaining
were used for office and other administrative purposes. Approximately 163,000 square meters were used for our headquarters in Shanghai.

        The
areas of self-owned properties and leased premises are based on figures specified in the relevant land use right certificates or lease agreements, where available, or our operational
records. We lease properties from third parties on an as is basis.

        We
are also planning to acquire land use rights in appropriate locations to establish new sorting hubs and expand existing ones in the coming years. We believe that we will be able to
obtain adequate facilities through acquisition or lease to accommodate our future expansion plans.

        As
of September 9, 2020, we have not obtained title certificates of land use rights with respect to four parcels of land currently used by us and we have not obtained certificates
with respect to 89 buildings currently used by us, including 59 buildings used as sorting facilities and 30 buildings used for general and administrative purposes. We are in the process of applying
for the registration of the land use right and property ownership.

        As
of September 9, 2020, for approximately 37.4% of the areas of our leased sorting hubs and offices, we have not been provided by the lessors with the applicable certificates,
approvals or any other documentation proving their right to lease those properties to us. If our lessors are not the owners of the properties and they have not obtained consents from the owners or
their lessors or permits from the relevant governmental authorities, our leases could be invalidated.

        As
of June 30, 2020, no single property interest of ours has a carrying amount of 15% or more of our total assets.

Legal Proceedings

        We may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of our business.
Litigation or any other legal or administrative proceeding, regardless of outcome, may result in substantial cost and diversion of our resources, including our management’s time and attention.

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        Starting
in May 2017, our company and certain of our directors and officers, and the underwriters of our company’s initial public offering in October 2016 (the “Underwriter Defendants”)
have been named as defendants in the following putative securities class actions:

    •
    City of Birmingham Retirement and Relief System v. ZTO Express (Cayman) Inc., et al.,
    01-CV-2017-902004.00 (Cir. Ct. Jefferson County Ala., filed on May 16, 2017) (the “Alabama Action”);

    •
    Guo v. ZTO Express (Cayman) Inc., et al., 17 Civ. 03676 (Sup. Ct. Mateo County Ca.,
    filed on August 11, 2017) (the “Guo Case”);

    •
    Nurlybayev v. ZTO Express (Cayman) Inc., et al., 1: 17-cv-06130 (S.D.N.Y., filed on
    August 14, 2017) (the “New York Action”);

    •
    McGrath v. ZTO Express (Cayman) Inc., et al., 17 Civ. 03805 (Sup. Ct. Mateo County Ca.,
    filed on August 21, 2017) (the “McGrath Case”); and

    •
    The Ronald & Maxine Linde Foundation v. ZTO Express (Cayman) Inc., et al., 18
    Civ. 00264 (Sup. Ct. Mateo County Ca., filed on January 17, 2018) (the “Linde Foundation Case”).

        These
actions allege that the defendants made misstatements and omissions in our Registration Statement and Prospectus in connection with our initial public offering in October 2016 in
violation of the Securities Act of 1933.

        The Alabama Action:    On June 28, 2017, our company removed the Alabama Action to the federal District Court for the Northern
District of
Alabama and the Underwriter Defendants joined in the removal. On July 14, 2017, City of Birmingham Retirement and Relief System filed a Motion to Remand the Alabama Action back to state court.
On August 4, 2017, our company and the Underwriter Defendants submitted a joint Motion to Change Venue, requesting the court to transfer the Alabama Action to the federal District Court for the
Southern District of New York. On August 29, 2017, the court issued an order staying the proceedings of the Alabama Action pending the United States Supreme Court’s decision in
Cyan, Inc. v. Beaver Cty. Employees
Ret. Fund
, and denying without prejudice City of Birmingham Retirement and Relief System’s Motion to Remand
and our company and the Underwriter Defendants’ Motion to Change Venue. On April 17, 2018, City of Birmingham Retirement and Relief System filed a motion to lift the stay and remand the Alabama
Action back to state court, which motion was granted by the court on April 18, 2018. On May 9, 2018, the plaintiff and defendants filed a joint motion to stay the Alabama Action in favor
of the New York Action. The court granted that motion on August 9, 2018, and the case remains stayed.

        The California Actions:    On September 15, 2017, our company removed the Guo Case and McGrath Case
to the federal District Court for the Northern District of California and the Underwriter Defendants consented to the removal. Also, on September 15, 2017, our company and the Underwriter
Defendants filed a joint motion to transfer in the Guo Case and McGrath Case, requesting the court to transfer the two cases to the federal District Court for the Southern District of New York. On
September 26, 2017, the plaintiffs filed motions to remand these two cases back to state court. On December 22, 2017, the court granted the plaintiffs’ motions to remand and denied our
and the Underwriter Defendants’ joint motion to transfer. On February 15, 2018, our company and the Underwriter Defendants filed a joint motion to stay the Guo Case and the McGrath Case in
state court. On April 24, 2018, the court granted our company and the Underwriter Defendants’ motion, and the case remains stayed. On March 19, 2018, the Linde Foundation Case was
voluntarily dismissed.

        The New York Action:    On October 16, 2017, three sets of purported shareholders filed motions to appoint themselves as lead
plaintiffs of the
purported plaintiff class and appoint their designated counsel as lead counsel. On November 13, 2017, the court appointed a lead plaintiff and approved the lead plaintiff’s selection of lead
counsel. On January 8, 2018, the lead plaintiff filed an amended complaint. On

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February 20,
2018, our company and the Underwriter Defendants filed a joint motion to dismiss the amended complaint. On July 17, 2019, the court granted the defendants’ joint motion to
dismiss. On September 10, 2019, the plaintiffs moved for leave to file a second amended complaint, which our company and the Underwriter Defendants opposed. That motion remains pending.

        These
cases are in their preliminary stages. Based on discussions with our legal advisors, we believe these cases are without merit because, among other reasons, in granting the
defendants’ joint motion to dismiss, the court held that as a matter of law, the plaintiffs failed to allege any violation of the U.S. securities laws. We therefore intend to defend the action
vigorously.

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CERTAIN FINANCIAL INFORMATION

        Set forth below are certain consolidated statements of operations data and cash flow data for the years ended December 31, 2017, 2018 and
2019 and six months ended June 30, 2019 and 2020 and certain consolidated balance sheet data as of December 31, 2017, 2018 and 2019 and June 30, 2020. The selected consolidated
statements of operations data for the years ended December 31, 2017, 2018 and 2019, selected consolidated balance sheets data as of December 31, 2018 and 2019 and selected consolidated
cash flow data for the years ended December 31, 2017, 2018 and 2019 have been derived from our audited consolidated financial statements that are included in our 2019 Form 20-F and are
incorporated into the accompanying prospectus by reference. The selected consolidated balance sheets data as of December 31, 2017 have been derived from our audited
consolidated financial statements that are not incorporated into the accompanying prospectus by reference. The consolidated statements of operations data and cash flow data for the six months ended
June 30, 2020 and the consolidated balance sheets data as of June 30, 2020 have been derived from our audited consolidated financial statements for the six months ended June 30,
2020 and as of June 30, 2020, and the consolidated statements of operations data and cash flow data for the six months ended June 30, 2019 have been derived from our unaudited interim
consolidated financial statements for the six months ended June 30, 2019, both of which are contained in our
current report on Form 6-K furnished to the SEC on September 11,
2020
and are incorporated into the accompanying prospectus by reference. Our consolidated financial statements are prepared in accordance with U.S. GAAP.

        The
consolidated financial information should be read in conjunction with, and is qualified in its entirety by reference to, our audited consolidated financial statements for the three
years ended December 31, 2019 and as of December 31, 2018 and 2019 and related notes, “Item 5. Operating and Financial Review and Prospects” in
our 2019 Form 20-F, and
our current report on Form 6-K furnished to the SEC on September 11,
2020
. Our historical results do not necessarily indicate results expected for any

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future
periods, and the results of operations for the six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the full fiscal year ending
December 31, 2020.

    Year Ended December 31,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   RMB   RMB   RMB   RMB   US$  
    (in thousands)  

Revenues

                                     

Express delivery services

    12,173,690     15,400,080     19,606,214     8,823,274     8,947,074     1,266,376  

Freight forwarding services

    269,557     1,278,741     1,235,961     639,402     762,571     107,935  

Sale of accessories

    591,716     812,866     1,089,977     501,407     498,214     70,518  

Others

    25,110     112,764     177,794     33,588     110,451     15,633  

Total operating expenses

    13,060,073     17,604,451     22,109,946     9,997,671     10,318,310     1,460,462  

Cost of revenues:

                                     

Line-haul transportation cost

    4,797,799     5,757,701     7,466,043     3,289,873     3,293,979     466,232  

Sorting hub cost

    2,438,754     3,197,667     4,109,338     1,844,970     2,220,035     314,225  

Freight forwarding cost

    260,429     1,239,439     1,209,523     628,397     704,273     99,683  

Cost of accessories sold

    366,859     491,722     544,166     276,057     186,958     26,462  

Other costs

    850,648     1,553,039     2,159,708     930,214     1,325,242     187,577  

Total cost of revenues

    (8,714,489 )   (12,239,568 )   (15,488,778 )   (6,969,511 )   (7,730,487 )   (1,094,179 )

Gross profit

    4,345,584     5,364,883     6,621,168     3,028,160     2,587,823     366,283  

Operating income (expenses)(1)

                                     

Selling, general and administrative

    (780,517 )   (1,210,717 )   (1,546,227 )   (863,128 )   (872,472 )   (123,490 )

Other operating income, net

    183,368     178,057     387,890     87,633     303,270     42,924  

Total operating expenses

    (597,149 )   (1,032,660 )   (1,158,337 )   (775,495 )   (569,202 )   (80,566 )

Income from operations

    3,748,435     4,332,223     5,462,831     2,252,665     2,018,621     285,717  

Net income

    3,158,900     4,387,912     5,671,267     2,046,741     1,824,544     258,247  

Net loss/(income) attributable to noncontrolling interests

    763     (4,887 )   2,878     (6,547 )   (1,490 )   (211 )

Net income attributable to ZTO Express (Cayman) Inc. 

    3,159,663     4,383,025     5,674,145     2,040,194     1,823,054     258,036  

Supplemental Information—

                                     

Non-GAAP measures(2):

                                     

Adjusted EBITDA

    4,452,019     5,858,384     7,635,212     3,403,797     3,360,454     475,640  

Adjusted net income

    3,229,625     4,201,113     5,292,351     2,342,335     2,088,698     295,635  


(1)
Our
operating income (expenses) in 2017, 2018 and 2019 includes RMB40.7 million, RMB249.5 million and RMB316.7 million, respectively, of
share-based compensation expenses, accounting for 0.3%, 1.4% and 1.4% of our total revenues in the same periods, respectively. Our operating income (expenses) in the six months ended June 30,
2019 and 2020 includes RMB295.1 million and RMB264.2 million, respectively, of share-based compensation expenses, accounting for 3.0% and 2.6% of our total revenues in the same periods,
respectively.
(2)
See
“—Non-GAAP Measures” below for the definitions and reconciliation of these non-GAAP measures to the nearest comparable U.S. GAAP measures.

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    As of December 31,   As of June 30,  
    2017   2018   2019   2020  
    RMB   RMB   RMB   RMB   US$  
    (in thousands)  

Selected Consolidated Balance Sheets Data:

                               

Cash and cash equivalents

    5,425,024     4,622,554     5,270,204     5,261,920     744,776  

Accounts receivable, net

    287,835     596,995     675,567     628,466     88,954  

Financing receivables, net

    64,030     517,983     511,124     471,837     66,784  

Short-term investments

    5,224,559     13,599,852     11,113,217     8,437,887     1,194,305  

Advances to suppliers

    263,574     337,874     438,272     631,220     89,343  

Prepayments and other current assets

    719,983     1,507,996     1,964,506     2,239,249     316,945  

Property and equipment, net

    6,473,010     9,035,704     12,470,632     14,651,069     2,073,724  

Land use rights, net

    1,602,908     1,969,176     2,508,860     3,829,158     541,982  

Goodwill

    4,241,541     4,241,541     4,241,541     4,241,541     600,351  

Total assets

    25,827,638     39,682,857     45,890,502     48,479,774     6,861,865  

Short-term bank borrowing

    250,000     —     —     1,690,000     239,204  

Accounts payable

    889,139     1,311,807     1,475,258     1,105,673     156,498  

Advances from customers

    258,965     436,710     1,210,887     1,208,970     171,119  

Operating lease liabilities

    —     —     298,728     240,240     34,004  

Total liabilities

    4,386,321     5,413,308     7,487,105     9,485,095     1,342,526  

Net current assets

    8,231,832     16,092,602     13,417,310     9,039,801     1,279,502  

Net assets

    21,441,317     34,269,549     38,403,397     38,994,679     5,519,339  

Noncontrolling interests

    6,004     52,311     100,793     113,497     16,064  

 

    Year Ended December 31,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   RMB   RMB   RMB   RMB   US$  
            (in thousands)          

Selected Consolidated Cash Flows Data:

                                     

Net cash provided by operating activities

    3,630,684     4,404,051     6,304,186     2,626,074     1,430,061     202,415  

Net cash provided by/(used in) investing activities

    (8,294,547 )   (12,872,633 )   (3,664,213 )   2,394,117     (1,812,554 )   (256,552 )

Net cash provided by/(used in) financing activities

    (1,061,558 )   7,042,122     (1,982,306 )   (2,507,052 )   362,952     51,372  

Effect of exchange rate changes on cash, cash equivalents and restricted cash

    (424,000 )   275,680     (3,207 )   (23,430 )   19,460     2,754  

Net increase/(decrease) in cash, cash equivalents and restricted cash

    (6,149,421 )   (1,150,780 )   654,460     2,489,709     (81 )   (11 )

Cash, cash equivalents and restricted cash at beginning of period

    11,923,155     5,773,734     4,622,954     4,622,954     5,277,414     746,969  

Cash, cash equivalents and restricted cash at end of period

    5,773,734     4,622,954     5,277,414     7,112,663     5,277,333     746,958  

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Impact of COVID-19 on Our Operations and Financial Performance

        Substantially all of our revenues and workforce are concentrated in China. In connection with the intensifying efforts to contain the spread of
COVID-19, the Chinese government has taken certain emergency measures, including extension of the Lunar New Year holidays, implementation of travel bans, blockade of certain roads and closure of
factories and businesses, and may continue to take further measures to keep this epidemic outbreak in check. We temporarily closed our branch offices, sorting hubs and service outlets from late
January to mid- to late February 2020 due to the COVID-19 outbreak, which resulted in a decline of parcel volume in January and February 2020, as compared with the same period in 2019. The measures
and timelines for business resumption varied across different localities in the PRC, and our branch offices, sorting hubs and service outlets closed and opened in accordance with measures adopted by
their respective local government authorities. We also experienced a temporary labor shortage in January and February 2020 which has caused delays in our delivery services. We have taken measures to
reduce the impact of the COVID-19 outbreak, including strictly implementing self-quarantine and disinfection measures at our headquarters, sorting hubs and service outlets in accordance with
government issued protocols. Consequently, the COVID-19 outbreak and any measures to combat the spread of the virus may adversely affect our business operations, financial condition and operating
results for 2020, including but not limited to negative impact to our total revenues, costs and net profit. Our parcel volume was 714 million in January 2020 and 438 million in February
2020, representing a decrease of 9.1% and 14.2% year on year. Our parcel volume was 2,264 million and 2,374 million in the first quarter of 2019 and 2020 and was 3,107 million and
approximately 4,595 million in the second quarter of 2019 and 2020, representing an increase of 4.9% and 47.9% year on year, respectively. Our parcel volume was 5,371 million and
6,970 million in the first half of 2019 and 2020, representing an increase 29.8% year on year. Our parcel volume accounts for 19.1% and 20.6% of the total express delivery parcel volume in
China in 2019 and the first half of 2020, respectively. Our revenues, cost of revenues and net income were RMB3,915.9 million, RMB3,097.2 million and RMB371.0 million in the first
quarter of 2020, respectively, representing a decrease of 14.4%, 6.6% and 45.6% as compared to the same period of 2019, respectively. We gradually resumed our operations since March 2020. Our
revenues, cost of revenues and net income were RMB6,402.4 million, RMB4,633.3 million and RMB1,453.6 million in the second quarter of 2020, respectively, representing an increase
of 18.0%, 26.8% and 6.5% as compared to the same period of 2019, respectively.

        While
we have resumed business operations and events related to the outbreak of and response to COVID-19 are expected to be temporary, there remain significant uncertainties surrounding
the COVID-19 outbreak and its further development as a global pandemic. Hence, the extent of the business disruption and the related impact on our financial results and outlook for 2020 cannot be
accurately estimated at this time.

        As
of June 30, 2020, we had cash and cash equivalents of RMB5,261.9 million (US$744.8 million) and short-term investments of RMB8,437.9 million
(US$1,194.3 million). Our short-term investments consist primarily of investments in fixed deposits with maturities between three months and one year and wealth management products which we
have the intent and the ability to hold to maturity within one year. We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty.

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Key Line Item and Specific Factors Affecting Our Results of Operations

Revenues

    Year Ended December 31,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   %   RMB   %   RMB   %   RMB   %   RMB   US$   %  
    (in thousands)  
                            (unaudited)              

Express delivery services

    12,173,690     93.2     15,400,080     87.5     19,606,214     88.7     8,823,274     88.3     8,947,074     1,266,376     86.7  

Freight forwarding services

    269,557     2.1     1,278,741     7.3     1,235,961     5.6     639,402     6.4     762,571     107,935     7.4  

Sale of accessories

    591,716     4.5     812,866     4.6     1,089,977     4.9     501,407     5.0     498,214     70,518     4.8  

Others

    25,110     0.2     112,764     0.6     177,794     0.8     33,588     0.3     110,451     15,633     1.1  

Total revenues

    13,060,073     100.0     17,604,451     100.0     22,109,946     100.0     9,997,671     100.0     10,318,310     1,460,462     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 90.4%, 87.5% and 86.4% of our total express delivery services revenues in
2017, 2018 and 2019, respectively, and 86.5% and 83.5% in the six months ended June 30, 2019 and 2020, respectively. In addition, we also directly provide 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. Revenues from our express delivery services to such
enterprise customers accounted for 9.6%, 12.5% and 13.6% of our total express delivery services revenues in 2017, 2018 and 2019, respectively, and 13.5% and 16.5% in the six months ended
June 30, 2019 and 2020, 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 6,219 million in 2017 to
12,121 million in 2019 and from 5,371 million in the six months ended June 30, 2019 to 6,970 million in the six months ended June 30, 2020.

        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.

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        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.

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,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   %   RMB   %   RMB   %   RMB   %   RMB   US$   %  
                    (in thousands)                      
                    (unaudited)                  

Line-haul transportation cost

    4,797,799     36.7     5,757,701     32.7     7,466,043     33.8     3,289,873     32.9     3,293,979     466,232     31.9  

Sorting hub cost

    2,438,754     18.7     3,197,667     18.2     4,109,338     18.6     1,844,970     18.5     2,220,035     314,225     21.5  

Freight forwarding cost

    260,429     2.0     1,239,439     7.0     1,209,523     5.5     628,397     6.3     704,273     99,683     6.8  

Cost of accessories sold

    366,859     2.8     491,722     2.8     544,166     2.5     276,057     2.8     186,958     26,462     1.8  

Other costs

    850,648     6.5     1,553,039     8.8     2,159,708     9.7     930,214     9.2     1,325,242     187,577     12.9  

Total cost of revenues

    8,714,489     66.7     12,239,568     69.5     15,488,778     70.1     6,969,511     69.7     7,730,487     1,094,179     74.9  

        Line-haul
transportation cost primarily includes (i) payment for services by outsourced fleets, (ii) truck fuel costs and tolls incurred by self-owned fleet,
(iii) employee compensation and other benefits for drivers of self-owned fleet, (iv) air transportation cost and (v) depreciation and maintenance costs of self-owned fleet. Total
line-haul transportation cost accounted for 36.7%, 32.7% and 33.8% of our revenues in 2017, 2018 and 2019, respectively, and 32.9% and 31.9% in the six months ended June 30, 2019 and 2020,
respectively. In 2019 and the six months ended June 30, 2020, we increased usage of self-owned fleet with an increasing number of higher-capacity trailer trucks, especially during the peak
season, resulting in improved line-haul route planning and load rate, hence enhanced 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 18.7%, 18.2% and 18.6% of our revenues in 2017, 2018, and 2019, respectively, and 18.5% and 21.5% in the six months ended
June 30, 2019 and 2020, 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 2.8%, 2.8% and 2.5% of our revenues in

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2017,
2018 and 2019, respectively, and 2.8% and 1.8% in the six months ended June 30, 2019 and 2020, respectively. Cost of accessories sold as a percentage of our revenues from sale of
accessories was 62.0%, 60.5% and 49.9% in 2017, 2018 and 2019, respectively, and 55.1% and 37.5% in the six months ended June 30, 2019 and 2020, respectively. The decrease from 55.1% to 37.5%
was mainly due to the increased use of lower-cost single-sheet thermal waybill paper starting in the second half of 2019. The cost of accessories sold grew slower than the sale of accessories.

        Other
costs, which mainly include (i) information technology related cost, (ii) dispatching costs paid to network partners associated with serving enterprise customers, and
(iii) business tax surcharges, accounted for 6.5%, 8.8% and 9.7% of our revenues in 2017, 2018 and 2019, respectively, and 9.2% and 12.9% in the six months ended June 30, 2019 and 2020,
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
self-owned 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.

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 6.0%, 6.9% and 7.0% of our revenues in
2017, 2018 and 2019, respectively, and 8.6% and 8.5% in the six months ended June 30, 2019 and 2020, respectively. Our selling, general and administrative expenses also included share-based
compensation expenses of RMB40.7 million, RMB249.5 million and RMB316.7 million in 2017, 2018 and 2019, respectively, and RMB295.1 million and RMB264.2 million in
the six months ended June 30, 2019 and 2020, respectively, which accounted for 0.3%, 1.4%, 1.4%, 3.0% and 2.6% 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.

        Set
forth below is a discussion of our consolidated statements of operations data for the six months ended June 30, 2019 and 2020. The discussion of our audited consolidated
financial information for the three years ended December 31, 2019 and as of December 31, 2017, 2018 and 2019 is set forth in “Item 5. Operating and Financial Review and
Prospectus” in our 2019 Form 20-F, which is incorporated by
reference into the accompanying prospectus.

Comparison of Six Months Ended June 30, 2020 and 2019

Revenues

        Our revenues increased by 3.2% to RMB10.3 billion (US$1.5 billion) in the six months ended June 30, 2020 from
RMB10.0 billion in the six months ended June 30, 2019. The increase was mainly driven by growth in parcel volume to 6,970 million in the six months ended June 30, 2020 from
5,371 million in the six months ended June 30, 2019 as a result of growth in China’s e-commerce market and an increase in our market share. It is also largely offset by a 20.5% decrease
in unit price per parcel mainly from incremental volume incentives to provide extra support to the network partners in order to maintain competitiveness and to cope with the negative impact of the
COVID-19 outbreak. Revenue from freight forwarding services increased 19.3% compared to the same period of 2019, mainly due to increased cross border e-commerce demand during the COVID-19 outbreak.
Revenue from sales of accessories, largely consisting of the sales of thermal paper used for digital waybills printing, declined 0.6% due to use of lower-priced single-sheet digital waybill since the
second half of 2019.

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Cost of Revenues

        Our total cost of revenues increased by 10.9% to RMB7.7 billion (US$1.1 billion) in the six months ended June 30, 2020 from
RMB7.0 billion in the six months ended June 30, 2019. This increase primarily resulted from increases in sorting hub operating cost by RMB375.1 million (US$53.1 million)
and other costs by RMB395.0 million (US$55.9 million).

        Line-haul transportation cost.    Our line-haul transportation cost remained stable at RMB3.3 billion (US$466.2 million) in the
six months
ended June 30, 2020 as compared to RMB3.3 billion in the six months ended June 30, 2019. Our line-haul transportation cost remained stable because of, on the one hand, the
increase in parcel volume and, on the other hand, (i) reduced toll road fee charges based on a national level waiver policy which took effect in mid-February and lasted through early May,
(ii) higher usage of self-owned line-haul vehicles with an increasing number of higher-capacity trailer trucks, and (iii) decrease in domestic diesel price due to the decline in global
oil demand triggered by the COVID-19 outbreak. As a combined result of the foregoing factors, the line-haul transportation cost per parcel declined 22.8% to RMB0.47. As a percentage of revenues,
line-haul transportation cost accounted for 31.9% of total revenues, a slight decrease from 32.9% in the same period of last year.

        Sorting hub cost.    Our sorting hub cost increased by 20.3% to RMB2.2 billion (US$314.2 million) in the six months ended
June 30,
2020 from RMB1.8 billion in the six months ended June 30, 2019. The increase was mainly due to (i) increased labor costs of RMB216.3 million (US$30.6 million) as a
result of wage increases and the hiring of additional employees to support parcel volume growth, and (ii) an increase of RMB123.5 million (US$17.5 million) in depreciation
expenses driven by the expansion of sorting hubs and installation of more automated sorting equipment. As of June 30, 2020, 282 sets of automated sorting equipment have been installed and put
into operation. The sorting hub cost per parcel decreased 7.3% to RMB0.32 mainly as a result of higher utilization of automation and the decrease in the percentage of outsourced temporary sorting
workers, partially offset by the declined parcel volume in the first two months of 2020 where sorting hubs were forced to temporarily close down due to the COVID-19 outbreak until they gradually
returned to operations in mid-to-late February.

        Cost of accessories sold.    Our cost of accessories sold decreased by 32.3% to RMB187.0 million (US$26.5 million) in the six
months ended
June 30, 2020 from RMB276.1 million in the six months ended June 30, 2019. The decrease was mainly driven by the increased use of lower-cost single-sheet digital waybills since
the second half of 2019.

        Other costs.    Other costs increased to RMB1.3 billion (US$187.6 million) in the six months ended June 30, 2020 from
RMB930.2 million in the six months ended June 30, 2019, primarily due to (i) an increase in costs associated with serving enterprise customers of RMB268.2 million
(US$38.0 million) and (ii) an increase of RMB102.3 million (US$14.5 million) in information technology related cost.

Gross Profit

        Our gross profit decreased by 14.5% to RMB2.6 billion (US$366.3 million) in the six months ended June 30, 2020 from
RMB3.0 billion in the six months ended June 30, 2019. Our gross profit margin decreased to 25.1% in the six months ended June 30, 2020 from 30.3% in the six months ended
June 30, 2019 and was primarily attributable to combined effects of 29.8% parcel volume growth and unit cost productivity gain of 14.5% partially offsetting overall unit price per parcel
decline of 20.5% due to competition and the COVID-19 outbreak. The parcel volume growth resulted from growth in China’s e-commerce market and an increase in our market share, although this overall
growth was partially offset by a temporary decline in the first two months of 2020 due to the COVID-19 outbreak. Our cost productivity improved during the period primarily because of the continued
adoption of cost efficient and innovative measures in transportation and sorting, such as the use of high-capacity trucks and automated sorting equipment. On the other hand, unit price per parcel
declined as a result of both competition and

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the
COVID-19 outbreak, which had a stronger impact than the foregoing two factors, resulting in a decline in gross profit margin.

Operating Expenses

        Our total operating expenses decreased by 26.6% to RMB569.2 million (US$80.6 million) in the six months ended June 30, 2020
from RMB775.5 million in the six months ended June 30, 2019.

        Selling, general and administrative expenses.    Our selling, general and administrative expenses increased slightly by 1.1% to
RMB872.5 million
(US$123.5 million) in the six months ended June 30, 2020 from RMB863.1 million in the six months ended June 30, 2019. The slight increase was primarily due to (i) an
increase of RMB9.7 million (US$1.4 million) in depreciation and amortization expenses in connection with the newly built office buildings, and (ii) an increase of
RMB9.5 million (US$1.3 million) in office expenses, partially offset by a decrease in share-based compensation expenses as the restricted share
units we granted in 2017 under the 2016 Share Incentive Plan was fully amortized in the first quarter of 2020.

        Other operating income, net.    We had a net other operating income of RMB303.3 million (US$42.9 million) in the six months
ended
June 30, 2020, compared to RMB87.6 million of net other operating income in the six months ended June 30, 2019. The increase is mainly comprised of (i) a VAT super
deduction of RMB98.7 million, (ii) an increase in government subsidies of RMB67.8 million, and (iii) a tax rebate of RMB32.5 million.

Other Income and Expenses

        Interest income.    Interest income decreased to RMB240.5 million (US$34.0 million) in the six months ended June 30, 2020
from
RMB290.9 million in the six months ended June 30, 2019, primarily due to the decreased amount of cash and interest-earning bank deposits.

        Interest expense.    Our interest expense increased to RMB9.4 million (US$1.3 million) in the six months ended June 30, 2020
from
nil in the six months ended June 30, 2019, primarily due to the short-term bank borrowings in the first half of 2020.

        Foreign currency exchange gain/(loss).    Our foreign currency exchange changed from a loss of RMB3.7 million in the six months ended
June 30, 2019 to a gain of RMB19.0 million (US$2.7 million) in the six months ended June 30, 2020 mainly due to the appreciation of the onshore U.S. dollar-denominated bank
deposits against the Chinese Renminbi in the period.

Income Tax Expense

        Our income tax expense was RMB428.1 million (US$60.6 million) in the six months ended June 30, 2020, representing a
decrease of 10.9% from RMB480.7 million in the six months ended June 30, 2019, mainly due to the decrease of profit before tax. Our effective tax rate in the six months ended
June 30, 2020 was 18.9%, compared to 18.9% in the six months ended June 30, 2019.

Net Income

        As a result of the foregoing, our net income decreased to RMB1.8 billion (US$258.2 million) in the six months ended
June 30, 2020 from RMB2.0 billion in the six months ended June 30, 2019.

Non-GAAP Financial Measures

        We use adjusted EBITDA and adjusted net income, each a non-GAAP financial measure, in evaluating our operating results and for financial and
operational decision-making purposes.

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        Adjusted
EBITDA and adjusted net income should not be considered in isolation or construed as an alternative to net income or any other measure of performance or as an indicator of our
operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted EBITDA and adjusted net income presented
here do not have a standardized meaning prescribed by GAAP and may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures
differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial
measure.

        Adjusted
EBITDA represents net income (which excludes depreciation, amortization, interest expense and income tax expense) before (i) share-based compensation expense;
(ii) impairment of investment in equity investee; (iii) unrealized gain from investment in equity investee; and (iv) gain/(loss) on disposal of equity investees and subsidiary,
before income taxes.

        Adjusted
net income represents net income before (i) share-based compensation expense; (ii) impairment of investment in equity investee; (iii) unrealized gain from
investment in equity investee; and (iv) gain/(loss) on disposal of equity investees and subsidiary, net of income taxes.

        Share-based
compensation expenses represent non-cash expenses associated with share options and restricted share units we granted under the share incentive plans. Impairment of
investment in equity investee and unrealized gain from investment in equity investee represent non-recurring and non-cash items, and gain/(loss) on disposal of equity investees and subsidiary, before
income taxes represents non-recurring items, which have little analytical or predictive value and are generally not meaningful in evaluating the performance of our businesses.

        We
believe that, by excluding such non-cash items or/and non-recurring items, the non-GAAP financial measures help identify the trends underlying core operating results that could
otherwise be distorted. As such, we believe that the non-GAAP financial measures facilitate investors’ assessment of operating results, enhance the overall understanding of past performance and future
prospects and allow for greater visibility with respect to key metrics used by our management in their financial and operational decision-making.

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        The
table below sets forth a reconciliation of our net income to adjusted EBITDA for the periods indicated:

    Year Ended December 31,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   RMB   RMB   RMB   RMB   US$  
    (in thousands)  

Net income

    3,158,900     4,387,912     5,671,267     2,046,741     1,824,544     258,247  

Add:

                                     

Depreciation

    522,853     809,005     1,210,040     554,832     801,006     113,375  

Amortization

    37,512     44,713     54,526     25,969     33,250     4,706  

Interest expense

    15,668     780     —     —     9,426     1,334  

Income tax expense

    646,361     929,133     1,078,295     480,661     428,074     60,590  

EBITDA

    4,381,294     6,171,543     8,014,128     3,108,203     3,096,300     438,252  

Add:

                                     

Share-based compensation expense

    40,725     249,478     316,666     295,065     264,154     37,388  

Impairment of investment in equity investee

    30,000     —     56,026     —     —     —  

Less:

                                     

Unrealized gain from investment in equity investee

    —     —     754,468     —     —     —  

Gain/(loss) on disposal of equity investees and subsidiary, before income taxes

    —     562,637     (2,860 )   (529 )   —     —  

Adjusted EBITDA

    4,452,019     5,858,384     7,635,212     3,403,797     3,360,454     475,640  

        The
table below sets forth a reconciliation of our net income to adjusted net income for the periods indicated:

    Year Ended December 31,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   RMB   RMB   RMB   RMB   US$  
    (in thousands)  

Net income

    3,158,900     4,387,912     5,671,267     2,046,741     1,824,544     258,247  

Add:

                                     

Share-based compensation expense

    40,725     249,478     316,666     295,065     264,154     37,388  

Impairment of investment in equity investee

    30,000     —     56,026     —     —     —  

Less:

                                     

Unrealized gain from investment in equity investee

    —     —     754,468     —     —     —  

Gain/(loss) on disposal of equity investees and subsidiary, net of income taxes

    —     436,277     (2,860 )   (529 )   —     —  

Adjusted net income

    3,229,625     4,201,113     5,292,351     2,342,335     2,088,698     295,635  

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Cash Flows and Working Capital

        The following table sets forth the movements of our cash, cash equivalents and restricted cash for the periods presented:

    Year Ended December 31,   Six Months Ended June 30,  
    2017   2018   2019   2019   2020  
    RMB   RMB   RMB   RMB   RMB   US$  
    (in thousands)  

Summary Consolidated Cash Flow Data:

                                     

Net cash provided by operating activities

    3,630,684     4,404,051     6,304,186     2,626,074     1,430,061     202,415  

Net cash provided by/(used in) investing activities

    (8,294,547 )   (12,872,633 )   (3,664,213 )   2,394,117     (1,812,554 )   (256,552 )

Net cash provided by/(used in) financing activities

    (1,061,558 )   7,042,122     (1,982,306 )   (2,507,052 )   362,952     51,372  

Effect of exchange rate changes on cash, cash equivalents and restricted cash

    (424,000 )   275,680     (3,207 )   (23,430 )   19,460     2,754  

Net increase/(decrease) in cash, cash equivalents and restricted cash

    (6,149,421 )   (1,150,780 )   654,460     2,489,709     (81 )   (11 )

Cash, cash equivalents and restricted cash at beginning of period

    11,923,155     5,773,734     4,622,954     4,622,954     5,277,414     746,969  

Cash, cash equivalents and restricted cash at end of period

    5,773,734     4,622,954     5,277,414     7,112,663     5,277,333     746,958  

        Our
principal sources of liquidity have been proceeds from cash flows from operating activities and financing activities. As of December 31, 2017, 2018 and 2019 and
June 30, 2020, our cash and cash equivalents, restricted cash and short-term investments were RMB11.0 billion, RMB18.2 billion, RMB16.4 billion and RMB13.7 billion
(US$1.9 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 (a) cash received from network partners that was immediately restricted for use until the final delivery of parcel to the
recipients; and (b) secured deposits held in designated bank accounts for issuance of bank acceptance notes, letters of guarantee for short-term borrowing and international forwarding services.
Short-term investments consist primarily of investments in fixed deposits with maturities between three
months and one year and wealth management products which we have the intent and the ability to hold to maturity within one year. As of June 30, 2020, approximately 52.7% of our cash and cash
equivalents, restricted cash and short-term investments were held by subsidiaries and affiliated entities incorporated in China, and approximately 41.3% of our cash and cash equivalents, restricted
cash and short-term investments were denominated in Renminbi.

        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

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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 our consolidated affiliated entities, we only have access to the assets or earnings of our consolidated affiliated entities through our contractual
arrangements with our VIE. See “History and Corporate Structure.” For restrictions and limitations on our liquidity and capital resources as a result of our corporate structure, see
“—Holding Company Structure.” In addition, we would need to accrue and pay withholding taxes currently at the rate of 10% if we were to distribute funds from our subsidiaries and
consolidated affiliated entities in China to our offshore subsidiaries. We do not intend to repatriate such funds in the foreseeable future, as we plan to use existing cash balances in China for
general corporate purposes and reinvestment to support our business growth.

        In
utilizing the proceeds we receive from the Global Offering 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 the six months ended June 30, 2020 was mainly attributable to the following factors:
(i) our express delivery services and other revenue streams generated net cash inflow of RMB9.6 billion (US$1.4 billion), while the aggregate cash outflow for transportation cost,
sorting hubs operation cost, cost of accessories sold and other costs amounted to RMB6.5 billion (US$924.3 million); (ii) cash flow in interest income of RMB223.1 million
(US$32.0 million); (iii) cash in subsidy of RMB272.5 million (US$38.6 million); (iv) RMB1.6 billion (US$219.7 million) paid for labor related costs,
including salaries, social insurances and other benefits; (v) income tax of RMB498.1 million (US$70.5 million); and (vi) RMB83.1 million (US$12.0 million) of
other administrative costs.

Investing Activities

        Net cash used in investing activities in the six months ended June 30, 2020 was primarily due to (i) purchase of short-term
investment products of RMB3.3 billion (US$469.9 million), while maturity of short-term investment products amounted to RMB6.1 billion (US$866.5 million);
(ii) purchase of property and equipment of RMB2.6 billion (US$370.2 million), including the purchase of sorting hub facilities, office furnishing and furniture, trucks and sorting
equipment; (iii) purchase of land use rights in an amount of RMB1.4 billion (US$194.2 million); (iv) purchase of long-term investment of RMB434.0 million
(US$61.4 million); and (v) payment for equity method investments of RMB206.6 million (US$29.2 million).

Financing Activities

        Net cash provided by financing activities in the six months ended June 30, 2020 was RMB363.0 million (US$51.4 million),
which was mainly attributable to the following factors: (i) proceeds of short-term borrowings in an amount of RMB1.7 billion (US$239.2 million) which the Company undertook to take
advantage of the interest rate cut by People’s Bank of China; and (ii) payment of dividends of RMB1.3 billion (US$188.4 million).

Capital Expenditures

        In connection with the expansion of our self-owned truck fleet and upgrade of our equipment and facilities, we paid an aggregate of
approximately RMB2.8 billion, RMB4.0 billion, RMB5.2 billion and RMB4.0 billion (US$564.4 million) in 2017, 2018, 2019 and the six months ended June 30, 2020,
respectively, for the purchases of property and equipment and purchases of land use rights. We intend to fund our future capital expenditures with our existing cash balance, proceeds from our Global
Offering and other financing alternatives. We will continue to make capital expenditures to support the growth of our business.

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USE OF PROCEEDS

        We will determine the offer price for both the international offering and the Hong Kong public offering by reference to, among other factors,
the closing price of our ADSs on the last trading day before the pricing of the Global Offering, which is expected to be on or about September 22, 2020. The maximum offer price for the Hong
Kong public offering is HK$268.00, or US$34.58, per Class A ordinary share (equivalent to US$34.58 per ADS). Assuming (i) the offering price is HK$268.00 per Class A ordinary
share, (ii) initially 42,750,000 Class A ordinary shares are allocated to the international offering and (iii) initially 2,250,000 Class A ordinary shares are allocated to
the Hong Kong public offering, we estimate that we will receive net proceeds from the Global Offering of approximately HK$11,882.22 million (US$1,533.15 million), assuming the option of
the international
underwriters to purchase additional Class A ordinary shares is not exercised, or HK$13,673.13 million (US$1,764.23 million) if the option of the international underwriters to
purchase additional Class A ordinary shares is exercised in full, after deducting estimated underwriting fees and the estimated offering expenses payable by us. On September 14, 2020,
the closing price of our ADSs on the New York Stock Exchange was US$31.72 per ADS, or HK$245.84 per Class A ordinary share. Each ADS represents one Class A ordinary share.

        The
public offering price in the international offering may be higher than, or the same as, the public offering price in the Hong Kong public offering. In addition, the allocation of
Class A ordinary shares between the Hong Kong public offering and the international offering is subject to reallocation as described in “Underwriting.”

        We
plan to use the net proceeds we will receive from the Global Offering for the following purposes:

    •
    approximately 50% (approximately HK$5,941 million (assuming that the international underwriters’ option to
    purchase additional Class A ordinary shares is not exercised) for infrastructure and capacity development.
    We plan to use part of the net proceeds to acquire land use
    rights in strategic locations across China and to establish additional sorting hubs to handle increasing volume; and to build modern logistic parts to serve as one-stop multi-functional logistic
    facilities. We intend to acquire additional transportation vehicles to expand the capacity of our self-owned fleet and achieve higher transportation efficiency. We will continue to increase and
    upgrade the installed base of machineries and equipment in our sorting hubs, and apply advanced technologies to further improve the level of automation and digitalization.

    •
    approximately 25% (approximately HK$2,971 million, assuming that the international underwriters’ option to
    purchase additional Class A ordinary shares is not exercised) for empowering our network partners and strengthening the network stability.
    We intend to invest resources
    in incentivizing our network partners to achieve better operational performance and therefore further strengthen overall network stability and competitiveness. We will also continue to provide
    financing support to our network partners to make necessary investments to ramp up their operational capabilities and secure last mile presence and gain access to businesses and consumers.

    •
    approximately 15% (approximately HK$1,782 million, assuming that the international underwriters’ option to
    purchase additional Class A ordinary shares is not exercised) for investments in logistics ecosystem.
    We aim to assemble and integrate pertinent resources across the
    logistics value chain, and expand our service offering to include warehousing, freight-forwarding, less-than-truckload, and cold chain logistics, for examples. We will make additional investments to
    build and improve integrated logistics services capabilities and create synergies within our ecosystem.

    •
    approximately 10% (approximately HK$1,188 million, assuming that the international underwriters’ option to
    purchase additional Class A ordinary shares is not exercised) for general corporate purposes.
    We will use the remaining proceeds for general corporate purposes and
    working capital needs.

        For
the purposes of this “Use of Proceeds” section, all translations of Hong Kong dollars into U.S. dollars were made at HK$7.7502 to US$1.00, the exchange rate on September 11,
2020 as set forth in the H.10 statistical release of the Federal Reserve Board.

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CAPITALIZATION

        The following table sets forth our capitalization as of June 30, 2020:

    •
    on an actual basis; and
    •
    on an adjusted basis giving effect to our issuance and sale in the Global Offering of 45,000,000 Class A ordinary shares, resulting in
    estimated net proceeds of HK$ 11,882.2 million (US$1,533.2 million), based on the assumed offer price of HK$268.00 or US$34.58, per Class A ordinary share (equivalent to US$34.58
    per ADS), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming (i) the Sole Global Coordinator does not exercise, on
    behalf of the international underwriters, their option to purchase additional Class A ordinary shares and (ii) no adjustment to the allocation of Class A ordinary shares between
    the Hong Kong public offering and the international offering.

        This
table should be read in conjunction with, and is qualified in its entirety by reference to, (i) our audited consolidated financial statements and the notes thereto in
our 2019 Form 20-F and (ii) our audited consolidated
financial statements and the notes thereto as of and for the six months ended June 30, 2020, included in
Exhibit 99.2 of our current report on Form 6-K furnished to the SEC on
September 11, 2020
, each of which is incorporated by reference into the accompanying prospectus.

    As of June 30, 2020  
    Actual   As Adjusted  
    RMB   US$(1)   RMB   US$(1)  
    (in thousands, except for share and per share data)  

Shareholders’ equity:

                         

Ordinary shares (US$0.0001 par value; 10,000,000,000 shares authorized 803,551,115 shares issued and 783,894,733 shares outstanding as of June 30,
2020)

    517     73     548     78  

Additional paid-in capital

    20,852,513     2,951,482     31,328,785     4,484,628  

Treasury shares, at cost

    (1,350,529 )   (191,155 )   (1,350,529 )   (191,155 )

Retained earnings

    18,549,594     2,625,525     18,549,594     2,625,525  

Accumulated other comprehensive income

    829,087     117,350     829,087     117,350  

ZTO Express (Cayman) Inc. shareholders’ equity

    38,881,182     5,503,275     49,357,485     7,036,426  

Non-controlling interests

    113,497     16,064     113,497     16,064  

Total equity

    38,994,679     5,519,339     49,470,982     7,052,490  

Total capitalization

    38,994,679     5,519,339     49,470,982     7,052,490  


(1)
Translations
of Hong Kong dollars into U.S. dollars and RMB into U.S. dollars relating to estimated net proceeds and the assumed offering price were made at
HK$7.7502 to US$1.00 and RMB6.8330 to US$1.00, the respective exchange rate on September 11, 2020. Unless otherwise stated, all translations of RMB into U.S. dollars in this “Capitalization”
section were made at RMB7.0651 to US$1.00, the exchange rate on June 30, 2020, as set forth in the H.10 statistical release of the Federal Reserve Board.

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DILUTION

        If you invest in our Class A ordinary shares in the Global Offering, your interest will be diluted to the extent of the difference
between the public offering price per Class A ordinary share and our as adjusted net tangible book value per Class A ordinary share after the Global Offering. Dilution results from the
fact that the public offering price per Class A ordinary share is substantially in excess of the net tangible book value per Class A ordinary share attributable to the existing
shareholders for our presently outstanding ordinary shares.

        Our
net tangible book value as of June 30, 2020 was approximately RMB34,708.2 million (US$4,912.6 million), or RMB44.28 (US$6.27) per Class A ordinary share
as of that date, and RMB44.28 (US$6.27) per ADS. Net tangible book value represents the amount of our total consolidated assets, less the amount of our intangible assets, goodwill, and total
consolidated liabilities. Dilution is determined by subtracting as adjusted net tangible book value per ordinary share, after giving effect to the issuance and sale by us of Class A ordinary
shares in the Global Offering at an assumed offer price of HK$268.00, or US$34.58, per Class A ordinary share, after deducting the estimated underwriting discounts and commissions and estimated
offering expenses payable by us from the public offering price per Class A ordinary share, and assuming the underwriters do not exercise their option to purchase additional Class A
ordinary shares.

        Without
taking into account any other changes in net tangible book value after June 30, 2020, other than to give effect to the issuance and sale by us of Class A ordinary
shares in the Global Offering at an assumed offer price of HK$268.00, or US$34.58, per Class A ordinary share, assuming no adjustment to the allocation of Class A ordinary shares between
the Hong Kong public offering and the international offering and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and assuming the
underwriters do not exercise their option to purchase additional Class A ordinary shares, our as adjusted net tangible book value as of June 30, 2020 would have been
US$6,445.8 million, or US$7.78 per outstanding Class A ordinary share and US$7.78 per ADS. This represents an immediate increase in net tangible book value of US$1.51 per Class A
ordinary share and US$1.51 per ADS to the existing shareholders and an immediate dilution in net tangible book value of US$26.80 per Class A ordinary share and US$26.80 per ADS to investors
purchasing Class A ordinary shares in the Global Offering.

        The
following table illustrates such dilution:

    Per Class A Ordinary Share   Per ADS  
    US$   US$  

Actual net tangible book value as of June 30, 2020

 

$
6.27  

$
6.27  

As adjusted net tangible book value after giving effect to the Global Offering

 

$
7.78  


$

7.78  

Assumed public offering price

 

$
34.58  

$
34.58  

Dilution in net tangible book value to new investors in the Global Offering

 

$
26.80  

$
26.80  

        The
amount of dilution in net tangible book value to new investors in the Global Offering set forth above is determined after giving effect to the Global Offering from the public
offering price per Class A ordinary share.

        A
US$1.00 increase (decrease) in the assumed offer price of HK$268.00, or US$34.58, per Class A ordinary share would increase (decrease) our as adjusted net tangible book value
after giving effect to the Global Offering by US$44.6 million, the as adjusted net tangible book value per Class A ordinary share and per ADS after giving effect to the Global Offering
by US$0.05 per Class A ordinary share and US$0.05 per ADS and the dilution in net tangible book value per Class A ordinary share and per ADS to new investors in the Global Offering by
US$0.95 per Class A ordinary share and US$0.95 per ADS, assuming

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no
change to the number of Class A ordinary shares offered by us as set forth on the front cover page of this prospectus supplement, assuming no adjustment to the allocation of Class A
ordinary shares between the Hong Kong public offering and the international offering and after deducting estimated underwriting discounts and commissions.

        If
the Sole Global Coordinator were to exercise in full, on behalf of the international underwriters, their option to purchase an additional 6,750,000 Class A ordinary shares from
us, the percentage of our ordinary shares held by existing shareholders would be 93.81%, and the percentage of our ordinary shares held by new investors would be 6.19%.

        The
discussion and tables above do not reflect (i) any outstanding share options or granted but not yet vested restricted share units, (ii) any issuance of our ordinary
shares and/or ADSs from June 30, 2020 to the date of this prospectus supplement, and (iii) any ordinary shares and/or ADSs repurchased by us under the share repurchase program from
June 30, 2020 to the date of this prospectus supplement. As of June 30, 2020, the awards that had been granted to our directors, officers, employees and consultants and remained
outstanding included (i) restricted share units to receive an aggregate of 3,289,628 ordinary shares, excluding restricted share units that were forfeited, cancelled, or vested after the
relevant grant date, and (ii) certain rights associated with 7,952,687 Class A ordinary shares granted through ZTO ES, an onshore employee shareholding platform to allow our employees in
China to receive share incentives.

        Translations
of Hong Kong dollars into U.S. dollars and RMB into U.S. dollars relating to estimated net proceeds and the assumed offering price were made at HK$7.7502 to US$1.00 and
RMB6.8330 to US$1.00, the respective exchange rate on September 11, 2020 as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Unless otherwise
stated, all translations of RMB into U.S. dollars in this “Dilution” section were made at RMB7.0651 to US$1.00, the exchange rate on June 30, 2020, as set forth in the H.10 statistical release
of the Board of Governors of the Federal Reserve System.

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PRINCIPAL SHAREHOLDERS

        The
following table sets forth information with respect to the beneficial ownership of our ordinary shares as of June 30, 2020 by:

    •
    each of our directors and executive officers; and
    •
    each person known to us to own beneficially more than 5% of our total outstanding shares.

        The
calculations in the table below are based on 577,794,733 Class A ordinary shares and 206,100,000 Class B ordinary shares outstanding as of June 30, 2020,
excluding (i) Class A ordinary shares reserved for issuance under our 2016 Share Incentive Plan, (ii) 7,447,313 Class A ordinary shares issued and reserved for the purpose
of our employee shareholding platform, the holder of which has waived all shareholder rights attached to those shares, and (iii) the company’s repurchase of 12,209,069 Class A ordinary
shares in the form of ADSs.

        Alibaba
ZT Investment Limited and Cainiao Smart Logistics Investment Limited have elected to exercise their preemptive rights (either by themselves or through their respective
affiliates) pursuant to that certain investor rights agreement dated June 12, 2018 to subscribe for an aggregate of 3,654,250 Class A ordinary shares on an assured basis in the Global
Offering. The table below has not taken into account such Class A ordinary shares to be newly subscribed in connection with the Global Offering.

        Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership
and voting power percentage of that person, we have included shares and associated votes that the person has the right to acquire within 60 days, including through the exercise of any option,
warrant or other right or the conversion of any other security. These shares and associated votes, however, are not included in the

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computation
of the percentage ownership of any other person. Ordinary shares held by a shareholder are determined in accordance with our register of members.

    Ordinary Shares Beneficially Owned  
    Class A
ordinary
shares
  Class B
ordinary
shares
  Total
ordinary
shares
  % of
total
ordinary
shares
  % of
aggregate
voting
power
 

Directors and Executive Officers:**

                               

Meisong Lai(1)

    7,608,313     206,100,000     213,708,313     27.3     78.4  

Jianfa Lai(2)

    66,587,959     —     66,587,959     8.5     2.5  

Jilei Wang(3)

    50,305,429     —     50,305,429     6.4     1.9  

Lin Wan

    —     —     —     —     —  

Xing Liu

    *     —     *     *     *  

Frank Zhen Wei

    *     —     *     *     *  

Qin Charles Huang

    *     —     *     *     *  

Herman Yu

    *     —     *     *     *  

Tsun-Ming (Daniel) Kao

    *     —     *     *     *  

Hongqun Hu

    *     —     *     *     *  

Jianchang Lai

    *     —     *     *     *  

Jingxi Zhu

    *     —     *     *     *  

Jianfeng Zhang

    *     —     *     *     *  

Huiping Yan

    *     —     *     *     *  

All Directors and Executive Officers as a Group

    128,875,046     206,100,000     334,975,046     42.7     83.0  

Principal Shareholders:

                               

Zto Lms Holding Limited(4)

    3,116,420     206,100,000     209,216,420     26.7     78.2  

Alibaba Group Holding Limited(5)

    68,287,037     —     68,287,037     8.7     2.6  

Zto Ljf Holding Limited(6)

    66,554,361     —     66,554,361     8.5     2.5  

Zto Wjl Holding Limited(7)

    50,185,429     —     50,185,429     6.4     1.9  


†
For
each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person
or group by the voting power of all of our Class A and Class B ordinary shares as a single class. Each holder of Class A ordinary shares is entitled to one vote per share and each
holder of our Class B ordinary shares is entitled to ten votes per share on all matters submitted to them for a vote. Our Class A ordinary shares and Class B ordinary shares vote
together as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Our Class B ordinary shares are convertible at any time by the
holder thereof into Class A ordinary shares on a one-for-one basis.
*
Less
than 1% of our total outstanding ordinary shares.
**
Except
for Messrs. Xing Liu, Frank Zhen Wei, Qin Charles Huang, Tsun-Ming (Daniel) Kao, Herman Yu and Lin Wan, the business address of our directors and
executive officers is c/o No.1685 Huazhi Road, Qingpu District, Shanghai, 201708, People’s Republic of China. The business address of Mr. Xing Liu is Suite 3613, 36/F, Two Pacific Place,
88 Queensway, Hong Kong. The business address of Mr. Frank Zhen Wei is Suite 6703, Two IFC, 8 Finance Street, Hong Kong. The business address of Mr. Qin Charles Huang is
Suite 1804, Tower 1, Admiralty Centre, Hong Kong. The business address of Mr. Tsun-Ming (Daniel) Kao is 20 Huahai Street, Liwan District, Guangzhou 510370, China. The business address of
Mr. Herman Yu is Baidu Campus, No. 10 Shangdi 10th Street, Haidian District, Beijing 100085, China. The business address of Mr. Lin Wan is c/o 588 West Wenyi Road, Xihu
District, Hangzhou 310000, China.
(1)
Represents
(i) 206,100,000 Class B ordinary shares directly held by Zto Lms Holding Limited, (ii) 3,116,420 ADSs of the Company (representing
the same number of Class A ordinary shares) held by Zto Lms Holding Limited, 1,439,666 of which were vested from restricted share units held by Mr. Meisong Lai, and
(iii) 4,491,893 Class A ordinary shares held by ZTO ES for purpose of our employee shareholding platform. Zto Lms Holding Limited is a British Virgin Islands company ultimately owned by
The LMS Family Trust, with Mr. Meisong Lai as the settlor and Mr. Meisong Lai and his family members as beneficiaries, as described in footnote (4) below. We granted rights to
receive dividends on, and to receive sale proceeds of, those 4,491,893 Class A shares held by ZTO ES to certain of our employees. ZTO ES remains the record holder of those shares

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    and
    retains the voting rights with respect to those shares. Mr. Meisong Lai is the sole director of Zto Lms Holding Limited. Mr. Meisong Lai is the sole director of ZTO ES.

(2)
Represents
(i) 60,000,000 Class A ordinary shares held by Zto Ljf Holding Limited, (ii) 6,000,000 restricted ADSs held by JPMorgan Chase Bank,
N.A., as depositary bank, underlying 6,000,000 Class A ordinary shares held by Zto Ljf Holding Limited pledged to Citibank, N.A., Singapore, as lender under a loan agreement dated
December 6, 2019, to secure Zto Ljf Holding Limited’s obligations under the loan agreement and (iii) 554,361 Class A ordinary shares, in the form of ADSs, held by Zto Ljf Holding
Limited and vested from restricted share units held by Mr. Jianfa Lai and (iv) 33,598 Class A ordinary shares held by ZTO ES. Zto Ljf Holding Limited is a British Virgin Islands
company ultimately owned by The LJF Family Trust, with Mr. Jianfa Lai as the settlor and Mr. Jianfa Lai and his family members as beneficiaries, as described in footnote
(6) below. Mr. Jianfa Lai is the sole director of Zto Ljf Holding Limited. Mr. Jianfa Lai has the power to direct the sale of those 33,598 Class A ordinary shares held by
ZTO ES.
(3)
Represents
(i) 44,800,000 Class A ordinary shares held by Zto Wjl Holding Limited, (ii) 5,200,000 restricted ADSs held by JPMorgan Chase Bank,
N.A., as depositary bank, underlying 5,200,000 Class A ordinary shares held by Zto Wjl Holding Limited pledged to Morgan Stanley Bank Asia Limited, as lender under a loan agreement dated
December 19, 2019, to secure Zto Wjl Holding Limited’s obligations under the loan agreement, (iii) 185,429 Class A ordinary shares, in the form of ADSs, held by Zto Wjl Holding
Limited and vested from restricted share units held by Mr. Jilei Wang and (iii) 120,000 Class A ordinary shares held by ZTO ES. Zto Wjl Holding Limited is a British Virgin Islands
company ultimately owned by The WJL Family Trust, with Mr. Jilei Wang as the settlor and Mr. Jilei Wang and his family members as beneficiaries, as described in footnote
(7) below. Mr. Jilei Wang is the sole director of Zto Wjl Holding Limited. Mr. Wang has the power to direct the sale of those 120,000 Class A ordinary shares held by ZTO
ES.
(4)
Represents
(i) 206,100,000 Class B ordinary shares directly held by Zto Lms Holding Limited, and (ii) 3,116,420 ADSs of the Company
(representing the same number of Class A ordinary shares) held by Zto Lms Holding Limited, 1,439,666 of which were vested from restricted share units held by Mr. Meisong Lai. Zto Lms
Holding Limited is a British Virgin islands company wholly owned by LMS Holding Limited, which in turn is beneficially owned by The LMS Family Trust, a trust established under the laws of Singapore
and managed by Standard Chartered Trust (Singapore) Limited as trustee. Mr. Meisong Lai is the settlor of The LMS Family Trust and the beneficiaries of the trust are Mr. Meisong Lai and
his family members. Mr. Meisong Lai is the sole director of Zto Lms Holding Limited. The registered address of Zto Lms Holding Limited is Sertus Chambers, P.O. Box 905, Quastisky
Building, Road Town, Tortola, British Virgin Islands.
(5)
Represents
68,287,037 Class A ordinary shares beneficially owned by Alibaba Group Holding Limited, an exempted company incorporated under the laws of the
Cayman Islands (“Alibaba”), which consist of (i) 57,870,370 Class A ordinary shares directly held by Alibaba ZT Investment Limited (“Ali ZT”), an exempted company incorporated under the
laws of Hong Kong, (ii) 5,787,037 Class A ordinary shares directly held by Cainiao Smart Logistics Investment Limited (“Cainiao Smart”), a company organized under the laws of the British
Virgin Islands, and (iii) 4,629,630 Class A ordinary shares directly held by New Retail Strategic Opportunities Investments 2 Limited (“NRF”), a company organized under the laws of the
Cayman Islands, as reported in a Schedule 13D jointly filed by Alibaba, Ali ZT, Cainiao Smart and NRF on June 21, 2018. Alibaba is a holding company which, through its subsidiaries and
variable interest entities, operates leading online and mobile marketplaces in retail and wholesale trade, as well as provides cloud computing and other services. Ali ZT is an indirect wholly-owned
special purpose subsidiary of Alibaba. Cainiao Smart is a majority owned indirect subsidiary of Alibaba. New Retail Strategic Opportunities Fund, L.P., a Cayman Islands exempted limited
partnership (“NRSF”), owns 100% of NRF. New Retail Strategic Opportunities Fund GP, L.P., a Cayman Islands exempted limited partnership (“NRSF GP”), is the general partner of
NRSF. New Retail Strategic Opportunities GP Limited, a company organized under the laws of the Cayman Islands and an indirect wholly owned subsidiary of Alibaba, is the general partner of
NRSF GP. Alibaba is deemed to be the beneficial owner of the 68,287,037 Class A ordinary shares held by Ali ZT, Cainiao Smart and NRF. The business address of Alibaba, Ali ZT and NRF is
c/o Alibaba Group Services Limited, 26/F, Tower One, Times Square, 1 Matheson Street, Causeway Bay, Hong Kong. The business address of Cainiao Smart is c/o Zhejiang Cainiao Supply Chain Management
Limited, 588 West Wenyi Road, Xihu District, Hangzhou 310000, China.
(6)
Represents
(i) 60,000,000 Class A ordinary shares held by Zto Ljf Holding Limited, (ii) 6,000,000 restricted ADSs held by JPMorgan Chase Bank,
N.A., as depositary bank, underlying 6,000,000 Class A ordinary shares held by Zto Ljf Holding Limited pledged to Citibank, N.A., Singapore, as lender under a loan agreement dated
December 6, 2019, to secure Zto Ljf Holding Limited’s obligations under the loan agreement and (iii) 554,361 Class A ordinary shares, in the form of ADSs, held by Zto Ljf Holding
Limited and vested from restricted share units held by Mr. Jianfa Lai. Zto Ljf Holding Limited is a British Virgin Islands company wholly owned by LJFA Holding Limited, which in turn is
beneficially owned by The LJF Family Trust, a trust established under the laws of Singapore and managed by Standard Chartered Trust (Singapore) Limited as trustee. Mr. Jianfa Lai is the settlor
of the LJF Family Trust and the beneficiaries of the trust are Mr. Jianfa Lai and his family members. Mr. Jianfa Lai is the sole director of Zto Ljf Holding Limited. The registered
address of Zto Ljf Holding Limited is Sertus Chambers, P.O. Box 905, Quastisky Building, Road Town, Tortola, British Virgin Islands.
(7)
Represents
(i) 44,800,000 Class A ordinary shares held by Zto Wjl Holding Limited, (ii) 5,200,000 restricted ADSs held by JPMorgan Chase Bank,
N.A., as depositary bank, underlying 5,200,000 Class A ordinary shares held by Zto Wjl Holding

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    Limited
    pledged to Morgan Stanley Bank Asia Limited, as lender under a loan agreement dated December 19, 2019, to secure Zto Wjl Holding Limited’s obligations under the loan agreement, and
    (iii) 185,429 Class A ordinary shares, in the form of ADSs, held by Zto Wjl Holding Limited and vested from restricted share units held by Mr. Jilei Wang. Zto Wjl Holding Limited
    is a British Virgin Islands company wholly owned by WJL Holding Limited, which in turn is beneficially owned by The WJL Family Trust, a trust established under the laws of Singapore and managed by
    Standard Chartered Trust (Singapore) Limited as trustee. Mr. Jilei Wang is the settlor of The WJL Family Trust and the beneficiaries of the trust are Mr. Jilei Wang and his family
    members. Mr. Jilei Wang is the sole director of Zto Wjl Holding Limited. The registered address of Zto Wjl Holding Limited is Sertus Chambers, P.O. Box 905, Quastisky Building,
    Road Town, Tortola, British Virgin Islands.

        To
our knowledge, as of June 30, 2020, 391,171,050 (approximately 49.9%) of our ordinary shares in the form of ADSs (including the 12,209,069 Class A ordinary shares in the
form of ADSs repurchased by us) were held by one record holder in the United States, which was JPMorgan Chase Bank, N.A., the depositary of our ADS program. The number of beneficial owners of our ADSs
in the United States is likely to be much larger than the number of record holders of our ordinary shares in the United States.

        Except
for the above, we are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

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DIVIDEND POLICY

        Our board of directors has complete discretion on whether to distribute dividends, subject to certain restrictions under Cayman Islands law. In
addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, a Cayman Islands company may pay
a dividend out of either a profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due
in the ordinary course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements
and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

        On
March 13, 2020, the board of directors approved a special dividend of US$0.3 per ADS for 2019, to be paid to shareholders of record as of the close of business on
April 8, 2020. We have paid US$188.1 million during the six months ended June 30, 2020. Other than the aforementioned dividend, we do not have any present plan to pay any cash
dividends on our ordinary shares in the foreseeable future. We intend to retain most of our available funds and any future earnings to operate and expand our business.

        We
are a holding company incorporated in the Cayman Islands. We may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our
shareholders. PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us.

        If
we pay any dividends, on our ordinary shares, we will pay those dividends which are payable in respect of the ordinary shares underlying our ADSs to the depositary, as the registered
holder of such ordinary shares, and the depositary then will pay such amounts to our ADS holders in proportion to the ordinary shares underlying the ADSs held by such ADS holders, subject to the terms
of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

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SHARES ELIGIBLE FOR FUTURE SALE

        Upon the closing of the Global Offering, we will have 828,894,733 Class A ordinary shares (or 835,644,733 Class A ordinary shares
if the Sole Global Coordinator exercises in full, on behalf of the international underwriters, their option to purchase additional Class A ordinary shares), excluding (i) Class A
ordinary shares reserved for issuance under our 2016 Share Incentive Plan, (ii) 7,447,313 Class A ordinary shares issued and reserved for the purpose of our employee shareholding
platform, the holder of which has waived all shareholder rights attached to those shares, and (iii) the company’s repurchase of 12,209,069 Class A ordinary shares in the form of ADSs.

        All
of the Class A ordinary shares sold in the Global Offering will be freely transferable without restriction or further registration under the Securities Act. Sales of
substantial amounts of our Class A
ordinary shares in the public market could materially and adversely affect prevailing market prices of our ADSs and Class A ordinary shares.

Lock-Up Agreements

        In connection with the Global Offering, we, certain directors and executive officers of our company and other related parties, Ali ZT, Cainiao
Smart and NRF have agreed, subject to limited exceptions, for a period of 90 days after the date of this prospectus supplement, not to offer, sell, pledge, or otherwise transfer or dispose of, except
in this offering, any of our ordinary shares or ADSs or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ordinary shares, ADSs or other
securities of our company, without the prior written consent of the Sole Global Coordinator. The foregoing lock-up restrictions are subject to certain exceptions for certain parties. See
“Underwriting—Lock-Up Agreements.”

Rule 144

        “Restricted securities” as that term is defined in Rule 144 under the Securities Act and may be sold publicly in the United States only
if they are subject to an effective registration statement under the Securities Act or pursuant to an exemption from the registration requirement such as those provided by Rule 144 and
Rule 701 promulgated under the Securities Act.

        In
general, under Rule 144 as currently in effect, beginning 90 days after we became a reporting company, a person (or persons whose shares are aggregated) who at the time
of a sale is not, and has not been during the three months preceding the sale, an affiliate of ours and has beneficially owned our restricted securities for at least six months will be entitled to
sell the restricted securities without registration under the Securities Act, subject only to the availability of current public information about us, and will be entitled to sell restricted
securities beneficially owned for at least one year without restriction. Persons who are our affiliates and have beneficially owned our restricted securities for at least six months may sell a number
of restricted securities within any three-month period that does not exceed the greater of the following:

    •
    1% of the then outstanding ordinary shares of the same class, in the form of ADSs or otherwise, which immediately after this offering will
    equal 6,227,947 Class A ordinary shares, assuming no exercise by the Sole Global Coordinator, on behalf the international underwriters, of their option to purchase additional Class A
    ordinary shares; and

    •
    the average weekly trading volume of our ordinary shares of the same class, in the form of ADSs or otherwise, during the four calendar weeks
    preceding the date on which notice of the sale is filed with the SEC.

        Sales
by our affiliates under Rule 144 are also subject to certain requirements relating to manner of sale, notice and the availability of current public information about us.

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Rule 701

        In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases our
ordinary shares from us in connection with a compensatory stock plan or other written agreement executed prior to the completion of this offering is eligible to resell those ordinary shares
90 days after we became a reporting company in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144.
However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

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CONVERSION BETWEEN CLASS A ORDINARY SHARES TRADING IN HONG KONG AND ADSs

Register of Members and Stamp Duty

        Our principal register of members will be maintained by our Principal Share Registrar in the Cayman Islands, and our Hong Kong branch register
of members will be maintained by the Hong Kong Share Registrar in Hong Kong.

        Dealings
in our Class A ordinary shares registered on our Hong Kong share register will be subject to Hong Kong stamp duty. The stamp duty is charged to each of the seller and
purchaser at the ad valorem rate of 0.1% of the consideration for, or (if greater) the value of, our Class A ordinary shares transferred. In other words, a total of 0.2% is currently payable on
a typical sale and purchase transaction of our Class A ordinary shares. In addition, a fixed duty of HK$5.00 is charged on each instrument of transfer (if required).

        To
facilitate ADS-ordinary share conversion and trading between the NYSE and the Hong Kong Stock Exchange, we also intend to move a portion of our issued ordinary shares from our Cayman
share register to our Hong Kong Share Register. It is unclear whether, as a matter of Hong Kong law, the trading or conversion of ADSs constitutes a sale or purchase of the underlying Hong
Kong-registered ordinary shares that is subject to Hong Kong stamp duty. We advise investors to consult their own tax advisors on this matter. See “Risk Factors—Risks Related to Our
Shares, ADSs and the Global Offering—There is uncertainty as to whether Hong Kong stamp duty will apply to the trading or conversion of our ADSs following our initial public offering in
Hong Kong and listing of our Class A ordinary shares on the Hong Kong Stock Exchange.”

Dealings and Settlement of Class A Ordinary Shares in Hong Kong

        Our Class A ordinary shares will trade on the Hong Kong Stock Exchange in board lots of 50 Class A ordinary shares. Dealings in
our Class A ordinary shares on the Hong Kong Stock Exchange will be conducted in Hong Kong dollars.

        The
transaction costs of dealings in our Class A ordinary shares on the Hong Kong Stock Exchange include:

    •
    Hong Kong Stock Exchange trading fee of 0.005% of the consideration of the transaction, charged to each of the buyer and seller;
    •
    SFC transaction levy of 0.0027% of the consideration of the transaction, charged to each of the buyer and seller;
    •
    trading tariff of HK$0.50 on each and every purchase or sale transaction. The decision on whether or not to pass the trading tariff onto
    investors is at the discretion of brokers;

    •
    transfer deed stamp duty of HK$5.00 per transfer deed (if applicable), payable by the seller;
    •
    ad valorem stamp duty at a total rate of 0.2% of the value of the transaction, with 0.1% payable by each of the buyer and the seller;
    •
    stock settlement fee, which is currently 0.002% of the gross transaction value, subject to a minimum fee of HK$2.00 and a maximum fee of
    HK$100.00 per side per trade;

    •
    brokerage commission, which is freely negotiable with the broker (other than brokerage commissions for IPO transactions which are currently set
    at 1% of the subscription or purchase price and will be payable by the person subscribing for or purchasing the securities); and

    •
    the Hong Kong Share Registrar will charge between HK$2.50 to HK$20, depending on the speed of service (or such higher fee as may from time to
    time be permitted under the Hong Kong Listing Rules), for each transfer of ordinary shares from one registered owner to another, each share

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        Investors
must settle their trades executed on the Hong Kong Stock Exchange through their brokers directly or through custodians. For an investor who has deposited his or her
Class A ordinary shares in his or her stock account or in his or her designated CCASS participant’s stock account maintained with CCASS, settlement will be effected in CCASS in accordance with
the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. For an investor who holds the physical certificates, settlement certificates and the duly executed transfer
forms must be delivered to his or her broker or custodian before the settlement date.

Conversion between Class A Ordinary Shares Trading in Hong Kong and ADSs

        In connection with our initial public offering of Class A ordinary shares in Hong Kong, or the Hong Kong IPO, we have established a
branch register of members in Hong Kong, or the Hong Kong share register, which will be maintained by our Hong Kong Share Registrar, Computershare Hong Kong Investor Services Limited. Our principal
register of members, or the Cayman share register, will continue to be maintained by our principal share registrar, Maples Fund Services (Cayman) Limited.

        All
Class A ordinary shares offered in the Hong Kong IPO will be registered on the Hong Kong share register in order to be listed and traded on the Hong Kong Stock Exchange. As
described in further detail below, holders of Class A ordinary shares registered on the Hong Kong share register will be able to convert these shares into ADSs, and vice versa.

Our ADSs

        Our ADSs are traded on the NYSE. Dealings in our ADSs on the NYSE are conducted in U.S. Dollars.

        ADSs
may be held either:

    •
    directly, by having a certificated ADS, or an ADR, registered in the holder’s name, or by holding in the direct registration system, pursuant
    to which the depositary may register the ownership of uncertificated ADSs, which ownership shall be evidenced by periodic statements issued by the depositary to the ADS holders entitled thereto; or

    •
    indirectly, through the holder’s broker or other financial institution.

        The
depositary for our ADSs is JPMorgan Chase Bank, N.A., whose office is located at 383 Madison Avenue, Floor 11, New York, NY 10179.

Converting Class A Ordinary Shares Trading in Hong Kong into ADSs

        An investor who holds Class A ordinary shares registered in Hong Kong and who intends to convert them to ADSs to trade on the NYSE must
deposit or have his or her broker deposit the Class A ordinary shares with the depositary’s Hong Kong custodian, JPMorgan Chase Bank, N.A., Hong Kong Branch, or the custodian, in exchange for
ADSs.

        A
deposit of Class A ordinary shares trading in Hong Kong in exchange for ADSs involves the following procedures:

    •
    If Class A ordinary shares have been deposited with CCASS, the investor must transfer ordinary shares to the depositary’s account with
    the custodian within CCASS by following the CCASS procedures for transfer and submit and deliver a duly completed and signed conversion form to the depositary via his or her broker.

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    •
    If Class A ordinary shares are held outside CCASS, the investor must arrange to deposit his or her Class A ordinary shares into
    CCASS for delivery to the depositary’s account with the custodian within CCASS, submit and deliver a request for conversion form to the custodian and after duly completing and signing such conversion
    form, deliver such conversion form to the custodian.

    •
    Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if applicable, the
    depositary will issue the corresponding number of ADSs in the name(s) requested by an investor and will deliver the ADSs to the designated DTC account of the person(s) designated by an investor or his
    or her broker.

        For
Class A ordinary shares deposited in CCASS, under normal circumstances, the above steps generally require two business days. For Class A ordinary shares held outside
CCASS in physical form, the above steps may take 14 business days, or more, to complete. Temporary delays may arise. For example, the transfer books of the depositary may from time to time be closed
to ADS issuances. The investor will be unable to trade the ADSs until the procedures are completed.

Converting ADSs to Class A Ordinary Shares Trading in Hong Kong

        An investor who holds ADSs and who intends to convert his/her ADSs into Class A ordinary shares to trade on the Hong Kong Stock Exchange
must cancel the ADSs the investor holds and withdraw Class A ordinary shares from our ADS program and cause his or her broker or other financial institution to trade such Class A
ordinary shares on the Hong Kong Stock Exchange.

        An
investor that holds ADSs indirectly through a broker should follow the broker’s procedure and instruct the broker to arrange for cancelation of the ADSs, and transfer of the
underlying Class A ordinary shares from the depositary’s account with the custodian within the CCASS system to the investor’s Hong Kong stock account.

        For
investors holding ADSs directly, the following steps must be taken:

    •
    To withdraw Class A ordinary shares from our ADS program, an investor who holds ADSs may turn in such ADSs at the office of the
    depositary (and the applicable ADR(s) if the ADSs are held in certificated form), and send an instruction to cancel such ADSs to the depositary.

    •
    Upon payment or net of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, if applicable,
    the depositary will instruct the custodian to deliver Class A ordinary shares underlying the canceled ADSs to the CCASS account designated by an investor.

    •
    If an investor prefers to receive Class A ordinary shares outside CCASS, he or she must receive ordinary shares in CCASS first and then
    arrange for withdrawal from CCASS. Investors can then obtain a transfer form signed by HKSCC Nominees Limited (as the transferor) and register Class A ordinary shares in their own names with
    the Hong Kong Share Registrar.

        For
Class A ordinary shares to be received in CCASS, under normal circumstances, the above steps generally require two business days. For Class A ordinary shares to be
received outside CCASS in physical form, the above steps may take 14 business days, or more, to complete. The investor will be unable to trade the Class A ordinary shares on the Hong Kong Stock
Exchange until the procedures are completed.

        Temporary
delays may arise. For example, the transfer books of the depositary may from time to time be closed to ADS cancellations. In addition, completion of the above steps and
procedures is subject to there being a sufficient number of Class A ordinary shares on the Hong Kong Share Register to facilitate a withdrawal from the ADS program directly into the CCASS
system. We are not under any obligation to maintain or increase the number of Class A ordinary shares on the Hong Kong share register to facilitate such withdrawals.

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Depositary Requirements

        Before the depositary issues ADSs or permits withdrawal of Class A ordinary shares, the depositary may
require:

    •
    production of satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and
    •
    compliance with procedures it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer
    documents.

        The
depositary may refuse to deliver, transfer, or register issuances, transfers and cancelations of ADSs generally when the transfer books of the depositary or our Hong Kong or Cayman
Share Register are closed or at any time if the depositary or we determine it advisable to do so or it would violate any applicable law or the depositary’s policies or procedures.

        All
costs attributable to the transfer of ordinary shares to effect a withdrawal from or deposit of Class A ordinary shares into our ADS program will be borne by the investor
requesting the transfer. In particular, holders of ordinary shares and ADSs should note that the Hong Kong Share Registrar will charge between HK$2.50 to HK$20, depending on the speed of service (or
such higher fee as may from time to time be permitted under the Hong Kong Listing Rules), for each transfer of Class A ordinary shares from one registered owner to another, each share
certificate canceled or issued by it and any applicable fee as stated in the share transfer forms used in Hong Kong. In addition, holders of ordinary shares and ADSs must pay up to US$5.00 (or less)
per 100 ADSs for each issuance of ADSs and each cancelation of ADSs, as the case may be, in connection with the deposit of Class A ordinary shares into, or withdrawal of ordinary shares from,
our ADS program.

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UNDERWRITING

The Global Offering

        The offering of 45,000,000 of our Class A ordinary shares is referred to herein as the “Global Offering.” The Global Offering is
comprised of:

    •
    the offering of initially 2,250,000 Class A ordinary shares (subject to reallocation) in Hong Kong (the “Hong Kong offer shares”) as
    described in “—The Hong Kong Public Offering” below, which we refer to as the “Hong Kong public offering”; and

    •
    the offering of initially 42,750,000 Class A ordinary shares (subject to reallocation and the option of the international underwriters
    to purchase or procure purchasers to purchase additional Class A ordinary shares mentioned below) (the “international offer shares” and, together with the Hong Kong offer shares, the “offer
    shares”) as described in “—The International Offering” below, which we refer to as the “international offering.”

        The
international offering contemplated herein consists of a U.S. offering and a non-U.S. offering made outside the United States in compliance with applicable law. We are paying a
registration fee for Class A ordinary shares sold in the United States, as well as for Class A ordinary shares initially offered and sold outside the United States in the Global Offering
that may be resold from time to time into the United States in compliance with applicable law.

        Goldman
Sachs (Asia) L.L.C., is acting as the sole global coordinator (the “Sole Global Coordinator”) for the Global Offering.

        We
and the Hong Kong underwriters will enter into an underwriting agreement on September 16, 2020 (the “Hong Kong Underwriting Agreement”) relating to the Hong Kong public
offering. Under the terms and subject to the conditions in the Hong Kong Underwriting Agreement, the Hong Kong underwriters below have severally agreed to apply or procure applications for the number
of Class A ordinary shares indicated below.

Hong Kong Underwriters

  Number of
Class A ordinary
shares
 

Goldman Sachs (Asia) L.L.C.

       

UBS AG Hong Kong Branch

       

China International Capital Corporation Hong Kong Securities Limited

       

Citigroup Global Markets Asia Limited

       

BOCI Asia Limited

       

China Renaissance Securities (Hong Kong) Limited

       

CLSA Limited

       

CMB International Capital Limited

       

Mizuho Securities Asia Limited

       

Total:

    2,250,000  

        We
and the international underwriters have entered into an international underwriting agreement, dated the date hereof (the “International Underwriting Agreement”), relating to the
international offering. Under the terms and subject to the conditions in the International Underwriting Agreement, the

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international
underwriters have severally agreed to purchase or procure purchasers to purchase from us, and we have agreed to sell to them, severally, the number of Class A ordinary shares
indicated below.

International Underwriters

  Number of
Class A
ordinary
shares
 

Goldman Sachs (Asia) L.L.C. 

       

UBS AG Hong Kong Branch / UBS Securities LLC

       

China International Capital Corporation Hong Kong Securities Limited

       

Citigroup Global Markets Limited

       

BOCI Asia Limited

       

China Renaissance Securities (Hong Kong) Limited

       

CLSA Limited

       

CMB International Capital Limited

       

Mizuho Securities Asia Limited

       

Total:

    42,750,000  

        The
Hong Kong underwriters and the international underwriters are collectively referred to herein as the “underwriters.”

        The
underwriters propose to offer our Class A ordinary shares at the public offering price listed on the cover page of this prospectus supplement. The underwriters are obligated,
severally but not jointly, to take and pay for all of the Class A ordinary shares offered hereby if any such shares are taken. The offering of our Class A ordinary shares by the
underwriters is subject to receipt and acceptance and subject to the underwriters’ right to reject any order in whole or in part.

        Our
existing shareholders affiliated with Alibaba Group Holding Limited (“Alibaba”), Alibaba ZT Investment Limited (“Ali ZT”) and Cainiao Smart Logistics Investment Limited (“Cainiao
Smart”), have elected to exercise their preemptive rights (either by themselves or through their respective affiliates) pursuant to that certain investor rights agreement dated June 12, 2018 to
subscribe for an aggregate of 3,654,250 Class A ordinary shares on an assured basis in the Global Offering, representing approximately 8.1% of the Class A ordinary shares offered in
connection with the Global Offering and approximately 0.4% of the ordinary shares outstanding immediately after the Global Offering, without taking into account (i) the Class A ordinary
shares issued and reserved for the purpose of our employee shareholding platform, the holder of which has waived all shareholder rights attached to those shares, (ii) our repurchase of
Class A ordinary shares in the form of ADSs of the international underwriters to purchase additional Class A ordinary shares and (iii) any allotment and issuance of Class A
ordinary shares upon exercise of the option in the Global Offering. No preferential treatment will be given to Ali ZT and/or Cainiao Smart (and/or their respective affiliates) other than the assured
allocation of 3,654,250 Class A ordinary shares in connection with the Global Offering. Alibaba ZT and Cainiao Smart together hold an aggregate of 63,657,407 Class A ordinary shares (or
approximately 8.1% of our ordinary shares outstanding) as of June 30, 2020. See “Principal Shareholders.”

        Our
ADSs are listed on the NYSE under the symbol “ZTO.” We have applied to list our Class A ordinary shares on the Hong Kong Stock Exchange pursuant to Chapter 19C of the
Hong Kong Stock Exchange Listing Rules, under the stock code “2057.” The Class A ordinary shares will be traded on the Hong Kong Stock Exchange in board lots of 50 shares each.

        A
prospectus supplement in electronic format may be made available on websites maintained by one or more underwriters, or selling group members, if any, participating in the Global
Offering. The Sole Global Coordinator may agree to allocate a number of our Class A ordinary shares to the underwriters for

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sale
to their online brokerage account holders. Internet distributions will be allocated by the Sole Global Coordinator to underwriters that may make internet distributions on the same basis as other
allocations.

The Hong Kong Public Offering

Number of Class A Ordinary Shares Initially Offered

        We are initially offering 2,250,000 Class A ordinary shares for subscription by the public in Hong Kong, representing 5.0% of the total
number of Class A ordinary shares initially available under the Global Offering. The number of Class A ordinary shares initially offered under the Hong Kong public offering, subject to
any reallocation of Class A ordinary shares between the international offering and the Hong Kong public offering, will represent approximately 0.27% of the total ordinary shares in issue
immediately following the completion of the Global Offering (assuming the option of the international underwriters to purchase additional Class A ordinary shares is not exercised and without
taking into account the Class A ordinary shares to be issued pursuant to our share incentive plans, including pursuant to the exercise of options or other awards that have been or may be
granted from time to time, and the Class A ordinary shares to be issued after conversion of Class B ordinary shares).

        The
Hong Kong public offering is open to members of the public in Hong Kong as well as to institutional and professional investors. Professional investors generally include brokers,
dealers, companies (including fund managers) whose ordinary business involves dealing in shares and other securities and corporate entities that regularly invest in shares and other securities.

        Completion
of the Hong Kong public offering is subject to the conditions set out in “—Conditions of the Global Offering” below.

Allocation

        Allocation of Class A ordinary shares to investors under the Hong Kong public offering will be based solely on the level of valid
applications received under the Hong Kong public offering. The basis of allocation may vary, depending on the number of Hong Kong offer shares validly applied for by applicants. Such allocation could,
where appropriate, consist of balloting, which could mean that some applicants may receive a higher allocation than others who have applied for the same number of Hong Kong offer shares, and those
applicants who are not successful in the ballot may not receive any Hong Kong offer shares.

        For
allocation purposes only, the total number of Hong Kong offer shares available under the Hong Kong public offering (after taking into account any reallocation referred to below) will
be divided equally (to the nearest board lot) into two pools: pool A and pool B. The Hong Kong offer shares in pool A will be allocated on an equitable basis to applicants who have applied for Hong
Kong offer shares with an aggregate price of HK$5 million (excluding the brokerage, the Securities and Futures Commission of Hong Kong (the “SFC”) transaction levy and the Hong Kong Stock
Exchange trading fee payable) or less. The Hong Kong offer shares in pool B will be allocated on an equitable basis to applicants who have applied for Hong Kong offer shares with an aggregate price of
more than HK$5 million (excluding the brokerage, the SFC transaction levy and the Hong Kong Stock Exchange trading fee payable) and up to the total value in pool B.

        Investors
should be aware that applications in pool A and applications in pool B may receive different allocation ratios. If any Hong Kong offer shares in one (but not both) of the pools
are unsubscribed, such unsubscribed Hong Kong offer shares will be transferred to the other pool to satisfy demand in that other pool and be allocated accordingly. For the purpose of the immediately
preceding paragraph only, the “price” for Hong Kong offer shares means the price payable on application therefor (without regard to the public offering price as finally determined). Applicants can
only receive an allocation of Hong Kong offer shares from either pool A or pool B and not from both pools. Multiple or suspected multiple applications

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under
the Hong Kong public offering and any application for more than 1,125,000 Hong Kong offer shares are liable to be rejected.

Reallocation

        The allocation of the offer shares between the Hong Kong public offering and the international offering is subject to reallocation.
Paragraph 4.2 of Practice Note 18 of the Hong Kong Stock Exchange Listing Rules requires a clawback mechanism to be put in place which would have the effect of increasing the number of
offer shares under the Hong Kong public offering to a certain percentage of the total number of offer shares offered under the Global Offering if certain prescribed total demand levels are reached.

        We
have applied for, and the Hong Kong Stock Exchange has granted to us, a waiver from strict compliance with Paragraph 4.2 of Practice Note 18 of the Hong Kong Listing
Rules to the effect as further described below. The number of offer shares initially available in the Hong Kong public offering is 2,250,000, representing approximately 5.0% of the offer shares
initially available under the Global Offering.

        If
the number of offer shares validly applied for under the Hong Kong public offering represents (a) 15 times or more but less than 50 times, (b) 50 times or more but less
than 100 times or (c) 100 times or more of the total number of offer shares initially available under the Hong Kong public offering, then offer shares will be reallocated to the Hong Kong
public offering from the international offering. As a result of such reallocation, the total number of offer shares available under the Hong Kong public offering will be increased to 3,375,000
Class A ordinary shares (in the case of (a)), 4,500,000 Class A ordinary shares (in the case of (b)) and 9,000,000 Class A ordinary shares (in the case of (c)), representing 7.5%,
10% and 20% of the total number of offer shares initially available under the Global Offering, respectively (before any exercise of the international underwriters’ option to purchase additional
Class A ordinary shares). In each case, the additional offer shares reallocated to the Hong Kong public offering will be allocated between pool A and pool B and the number of offer shares
allocated to the international offering will be correspondingly reduced in such manner as the Sole Global Coordinator deems appropriate.

        In
addition, the Sole Global Coordinator may allocate offer shares from the international offering to the Hong Kong public offering to satisfy valid applications under the Hong Kong
public offering. In accordance with the Guidance Letter HKEX-GL91-18 issued by the Hong Kong Stock Exchange, if such reallocation is done other than pursuant to the clawback mechanism above, the
maximum total number of the offer shares that may be allocated to the Hong Kong public offering following such reallocation shall be not more than double the initial allocation to the Hong Kong public
offering (i.e., 4,500,000 Class A ordinary shares).

        If
the Hong Kong public offering is not fully subscribed, the Sole Global Coordinator may reallocate all or any unsubscribed Hong Kong offer shares to the international offering, in such
proportions as the Sole Global Coordinator deems appropriate.

Applications

        Each applicant under the Hong Kong public offering will be required to give an undertaking and confirmation in the application submitted by
him/her that he/she and any person(s) for whose benefit he/she is making the application has not applied for or taken up, or indicated an interest for, and will not apply for or take up, or indicate
an interest for, any Class A ordinary shares under the international offering. Such applicant’s application is liable to be rejected if such undertaking and/or confirmation is/are breached
and/or untrue (as the case may be) or if he/she has been or will be placed or allocated international offer shares under the international offering.

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        Applicants
under the Hong Kong public offering are required to pay, on application, the maximum public offering price for the Hong Kong public offering of HK$268 per offer share in
addition to the brokerage, the SFC transaction levy and the Hong Kong Stock Exchange trading fee payable on each offer share, amounting to a total of HK$13,535.03 for one board lot of 50
Class A ordinary shares. If the Hong Kong public offering price as finally determined in the manner described in “—Pricing” below is less than the maximum public offering price for
the Hong Kong public offering of HK$268 per Class A ordinary share, appropriate refund payments (including the brokerage, the SFC transaction levy and the Hong Kong Stock Exchange trading fee
attributable to the surplus application monies) will be made to successful applicants, without interest.

The International Offering

Number of Class A Ordinary Shares Initially Offered

        The international offering will consist of an initial offering of 42,750,000 Class A ordinary shares (subject to adjustment and the
option of the international underwriters to purchase additional Class A ordinary shares), representing 95.0% of the total number of Class A ordinary shares initially available under the
Global Offering. The number of Class A ordinary shares initially offered under the international offering, subject to any reallocation of Class A ordinary shares between the
international offering and the Hong Kong public offering, will represent approximately 5.16% of the total number of ordinary shares in issue immediately following the completion of the Global Offering
(assuming the option of the international underwriters to purchase additional Class A ordinary shares is not exercised and without taking into account the Class A ordinary shares to be
issued pursuant to our share incentive plans, including pursuant to the exercise of options or other awards that have been or may be granted from time to time, and the Class A ordinary shares
to be issued after conversion of Class B ordinary shares).

Allocation

        The international offering includes the U.S. offering of Class A ordinary shares in the United States as well as the non-U.S. offering to
institutional and professional investors and other investors in jurisdictions outside the United States. Professional investors generally include brokers, dealers, companies (including fund managers)
whose ordinary business involves dealing in shares and other securities and corporate entities that regularly invest in shares and other securities. Allocation of offer shares pursuant to the
international offering will be effected in accordance with a “book-building” process based on a number of factors, including the level and timing of demand, the total size of the relevant investor’s
invested assets or equity assets in the relevant sector and whether or not it is expected that the relevant investor is likely to buy further Class A ordinary shares and/or hold or sell its
Class A ordinary shares after the listing on the Hong Kong Stock Exchange. Such allocation is intended to result in a distribution of the Class A ordinary shares on a basis which would
lead to the establishment of a solid professional and institutional shareholder base to our benefit and the benefit of the shareholders as a whole.

        The
Sole Global Coordinator (for itself and on behalf of the international underwriters) may require any investor who has been offered offer shares under the international offering and
who has made an application under the Hong Kong public offering to provide sufficient information to the Sole Global Coordinator so as to allow it to identify the relevant applications under the Hong
Kong public offering and to ensure that they are excluded from any allocation of offer shares under the Hong Kong public offering.

Reallocation

        The total number of offer shares to be issued or sold pursuant to the international offering may change as a result of the clawback arrangement
described in “—The Hong Kong Public Offering—Reallocation” above, the exercise of the option of the international underwriters to purchase additional

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Class A
ordinary shares in whole or in part and/or any reallocation of unsubscribed offer shares originally included in the Hong Kong public offering.

Pricing

Determining the Offer Price

        We will determine the pricing for the offer shares for the purpose of the various offerings under the Global Offering on the price determination
date, which is expected to be on or about September 22, 2020 and, in any event, no later than September 28, 2020, by agreement with the Sole Global Coordinator (for itself and on behalf
of the underwriters), and the number of offer shares to be allocated under the various offerings will be determined shortly thereafter.

        We
will determine the Hong Kong public offering price by reference to, among other factors, the closing price of the ADSs on NYSE on the last trading day on or before the pricing of the
Global Offering, which is expected to be on or about September 22, 2020. The maximum offer price for the Hong Kong public offering is HK$268, or US$34.58, per Class A ordinary share
based on an exchange rate of HK$7.7502 to US$1.00.

    High   Low   ADTV  

Period

  (US$)   (US$)   (ADSs)(1)  

Fiscal year ended December 31, 2019

    23.52     15.33     2,754,222  

Fiscal year of 2020 (up to September 9, 2020)

    38.64     21.72     2,731,587  


Note:

(1)
Average
daily trading volume (“ADTV”) represents daily average number of our ADSs traded over the relevant period.

        Applicants
under the Hong Kong public offering must pay, on application, the maximum Hong Kong public offering price of HK$268 per Hong Kong offer share plus brokerage of 1.0%, SFC
transaction levy of 0.0027% and Hong Kong Stock Exchange trading fee of 0.005%, amounting to a total of HK$13,535.03 for one board lot of 50 Class A ordinary shares.

        We
may set the international offer price at a level higher than the maximum Hong Kong public offering price if (a) the Hong Kong dollar equivalent of the closing trading price of
the ADSs on the NYSE on the last trading day on or before the price determination date (on a per-Class A ordinary share converted basis) were to exceed the maximum Hong Kong public offering
price as stated in this prospectus supplement and/or (b) we believe that it is in our best interest, as a listed company, to set the international offer price at a level higher than the maximum
Hong Kong public offering price based on the level of interest expressed by professional and institutional investors during the book-building process.

        If
the international offer price is set at or lower than the maximum Hong Kong public offering price, the Hong Kong public offering price must be set at such price which is equal to the
international offer price. In no circumstances will we set the Hong Kong public offering price above the maximum Hong Kong public offering price as stated in this prospectus supplement or the
international offer price.

        We
reserve the right not to proceed with the Hong Kong public offering or the international offering on or at any time until the price determination date if, for any reason, including as
a result of volatility in the price of our ADSs or other changes in market conditions, we do not agree with the Sole Global Coordinator (for itself and on behalf of the underwriters) on the pricing of
the offer shares by September 28, 2020.

        The
international underwriters will be soliciting from prospective investors’ indications of interest in acquiring offer shares in the international offering. Prospective professional
and institutional investors will

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be
required to specify the number of offer shares under the international offering they would be prepared to acquire either at different prices or at a particular price. This process, known as
“book-building,” is expected to continue up to, and to cease on or about, the last day for lodging applications under the Hong Kong public offering.

        The
Sole Global Coordinator (for itself on behalf of the underwriters) may, where it deems appropriate, based on the level of interest expressed by prospective investors during the
book-building process in respect of the international offering, and with our consent, reduce the number of offer shares offered below as stated in this prospectus supplement at any time on or prior to
the morning of the last day for lodging applications under the Hong Kong public offering. In such a case, we will, as soon as practicable following the decision to make such reduction, and in any
event not later than the morning of the last day for lodging applications under the Hong Kong public offering, cause to be published in the South China Morning Post (in English) and the Hong Kong
Economic Times (in Chinese) and on our website and the website of the Hong Kong Stock Exchange at ir.zto.com and www.hkexnews.hk, respectively, notices of the reduction. Upon the issue of such a
notice, the revised number of offer shares will be final. If the number of offer shares is reduced, applicants under the Hong Kong public offering will be entitled to withdraw their applications,
unless positive confirmations from the applicants to proceed are received.

Sales in the United States

        Some of the international underwriters are expected to make offers and sales both inside and outside the United States through their respective
selling agents. Any offers or sales in the United States will be conducted by broker-dealers registered with the SEC. Goldman Sachs (Asia) L.L.C. will offer our Class A ordinary shares in the
United States through its SEC-registered broker-dealer affiliate in the United States, Goldman Sachs & Co. LLC. UBS AG Hong Kong Branch will offer our Class A ordinary shares in the United States
through its SEC-registered broker-dealer affiliate in the United States, UBS Securities LLC. China International Capital Corporation Hong Kong Securities Limited is not a broker-dealer registered with
the SEC, and, to the extent that its conduct may be deemed to involve participation in offers or sales of shares in the United States, those offers or sales will be made through one or more
SEC-registered broker-dealers in compliance with applicable laws and regulations. Citigroup Global Markets Limited will offer our Class A ordinary shares in the United States through its
SEC-registered broker-dealer affiliate in the United States, Citigroup Global Markets Inc. China Renaissance Securities (Hong Kong) Limited will offer our Class A ordinary shares in the United States
through its SEC-registered broker-dealer affiliate in the United States, China Renaissance Securities (US) Inc. Certain of the other international underwriters are not broker-dealers registered with
the SEC, and do not intend to and will not offer or sell any of our Class A ordinary shares in the United States.

Compensation and Expenses

        The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters by us. These amounts
include gross proceeds of the Global
Offering that may be paid to the underwriters and are shown assuming both no exercise and full exercise of the international underwriters’ option to purchase up to an additional 6,750,000
Class A ordinary shares. Total underwriting discounts and commissions to be paid to the underwriters represent approximately        % of the total gross proceeds of the Global Offering
(assuming the option to purchase additional Class A ordinary shares is not exercised). This presentation assumes the public offering price in both the international offering and the Hong Kong
public offering is HK$            .

Paid by Us

  No Exercise   Full Exercise  

Per Class A ordinary share

 

HK$
          

HK$
          

Total

 

HK$
          

HK$
          

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        In
addition, we have agreed to reimburse the underwriters for the fees and expenses of their counsel in connection with the Global Offering and for certain offering expenses in an
aggregate amount of up to approximately HK$            (or US$            ).

        The
estimated offering expenses payable by us, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts
and commissions, are approximately HK$57.18 million (US$7.38 million).

International Underwriters’ Option to Purchase Additional Class A Ordinary Shares

        In connection with the Global Offering, we have granted the international underwriters the right, exercisable by the Sole Global Coordinator on
behalf of the international underwriters at any time until 30 days after date of this prospectus supplement, to purchase or to procure purchasers to purchase up to an aggregate of 6,750,000
additional Class A ordinary shares, representing not more than 15% of the total number of Class A ordinary shares initially available under the Global Offering, at the international
public offering price to, among other things, cover over-allocations in the international offering, if any.

        If
the international underwriters’ option to purchase or to procure purchasers to purchase additional Class A ordinary shares is exercised in full, the additional Class A
ordinary shares to be issued pursuant thereto will represent approximately 0.8% of our total ordinary shares issued and outstanding immediately following the completion of the Global Offering.

Lock-Up Agreements

        We have undertaken to the underwriters that except for (i) the issue, offer and sale of the offer shares pursuant to the Global Offering
(including pursuant to the international underwriters’ option to purchase additional Class A ordinary shares), (ii) the grant or issue of securities pursuant to the terms of our share incentive
plans, (iii) any capitalization issue, capital reduction or consolidation or sub-division of our ordinary shares, and (iv) any repurchase of securities pursuant to any of the Company’s
existing share repurchase programs, for the period commencing on the price determination date and ending on, and including, the date that is 90 days after the price determination date, and unless in
compliance with the requirements of the Hong Kong Listing Rules, we will not (a) offer, allot, issue, sell, pledge, or otherwise transfer or dispose of, either directly or indirectly,
conditionally or unconditionally, any ordinary shares or ADSs or any securities convertible into or exchangeable or exercisable for or that represent the right to receive, any ordinary shares or ADSs
or other securities of the Company, or deposit any ordinary shares or other securities of the Company, with a depositary in connection with the issue of depositary receipts, (b) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any ordinary shares or ADSs or other securities of the Company, or any
interest in any of the foregoing (including, without limitation, any securities convertible into or exchangeable or exercisable for or that represent the right to receive, any ordinary shares or ADSs
or other securities of the Company, (c) enter into any transaction with the same economic effect as any transaction specified in (a) or (b) above, or (d) offer to or contract to
or agree to or announce any intention to effect any transaction specified in (a), (b) or (c) above.

Undertakings by our Directors and Executive Officers and Certain Other Related Parties

        Except for one director and executive officer who does not hold any of our ordinary shares or ADSs and except as otherwise disclosed in
“—Undertakings by Xing Liu” below, each of our directors and executive officers, Zto Lms Holding Limited, LMS Holding Limited, The LMS Family Trust, Zto Ljf Holding Limited, LJFA Holding
Limited, The LJF Family Trust, Zto Wjl Holding Limited, WJL Holding Limited and The WJL Family Trust (each, a “Lock-up Party”), has agreed that, subject to limited exceptions, without the prior
written consent of the Sole Global Coordinator on behalf of the underwriters, it will not, and will not cause any of its direct or indirect affiliates to, during the period commencing on the

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price
determination date and ending on, and including, the date that is 90 days after the price determination date or such earlier date that the Sole Global Coordinator consents to in writing
(the “Restricted Period”), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of our ordinary shares or ADSs beneficially owned (as such term is used in Rule 13d-3 of the Exchange Act) by it
or any securities so owned convertible into or exercisable or exchangeable for our ordinary shares or ADSs (collectively, “Lock-Up Securities”) or (2) enter into any hedging, swap or other
arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Lock-Up Securities, whether any such transaction described in clause (1) or
(2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise or (3) publicly disclose the intention to do any of the foregoing.

        The
foregoing restrictions do not apply to:

    (a)
    transactions
    relating to our ordinary shares or ADSs or other securities acquired in the Global Offering or otherwise in open market transactions after the
    completion of the Global Offering, provided that no filing under the Exchange Act is required or shall be voluntarily made in connection with subsequent sales of our ordinary shares or ADSs or other
    securities acquired in such transactions;
    (b)
    the
    establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of our ordinary shares or ADSs during the Restricted
    Period, provided that (x) such plan does not provide for the transfer of Lock-Up Securities during the Restricted Period and (y) to the extent a public announcement or filing under the
    Exchange Act, if any, is required of or voluntarily made by or on behalf of the Lock-up Party or the Company regarding the establishment of such plan, such announcement or filing shall include a
    statement to the effect that no transfer of our ordinary shares or ADSs may be made under such plan during the Restricted Period;
    (c)
    the
    enforcement of any security interest created prior to the completion of the Global Offering over assets of the Lock-up Party generally, which may include the
    Lock-Up Securities;
    (d)
    (A)
    the creation of any charge, lien, mortgage, pledge or other security interest over or in respect of, or (B) the delivery or posting as collateral of (in
    each case (A) and (B), a “Pledge”)), any or all of the Lock-Up Securities to secure the obligations of the Lock-up Party or its affiliates arising under, or in connection with, any bona fide
    financing agreement or arrangement entered into by such Lock-up Party or its affiliates, provided that such Lock-up Party shall procure that the recipient of any Lock-Up Securities during the
    Restricted Period upon a foreclosure on any Pledged Lock-Up Securities shall agree to be bound by the terms of the lock-up letter; or
    (e)
    with
    respect to one director and executive officer, (A) the award of Lock-Up Securities to recipients in accordance with, and pursuant to, the terms and
    conditions governing our employee shareholding platform, Zto Es Holding Limited (“Share Scheme”), provided however, that the director and executive officer shall procure that any director or officer
    (including their respective affiliates, if any) receiving Lock-Up Securities under the Share Scheme during the Restricted Period shall agree to be bound by the terms of the lock-up letter and
    (B) the sale of Lock-up Securities by Zto Es Holding Limited corresponding to the interests of any recipient who is not a director, officer or affiliates thereof pursuant to the terms and
    conditions of the Share Scheme.

Notwithstanding
the foregoing, each Lock-up Party may transfer Lock-Up Securities:

    (a)
    as
    a bona fide gift or gifts, or through will or intestacy;

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    (b)
    if
    the Lock-up Party is a partnership, limited liability company or corporation, to limited partners or shareholders or “affiliates” (as such term is defined in
    Rule 12b-2 under the Exchange Act) of such Lock-up Party, provided that any such transfer shall not involve a disposition for value;
    (c)
    to
    immediate family members of the Lock-up Party, or to any trust for the direct or indirect benefit of the Lock-up Party or its immediate family, or to any entity
    beneficially owned and controlled by the Lock-up Party or its immediate family member, provided that any such transfer shall not involve a disposition for value, or
    (d)
    with
    the prior written consent of the Sole Global Coordinator,

provided
that in the case of any transfer or distribution pursuant to the foregoing clause (a), (b) or (c), (i) each donee, distributee or transferee, as the case may be, shall
agree to be bound by the terms of the lock-up letter and (ii) no filing under the Exchange Act, reporting a reduction in beneficial ownership of Lock-up Securities, shall be required or shall
be voluntarily made during the Lock-up Period. or

Undertakings by Ali ZT, Cainiao Smart and NRF

        Each of Ali ZT, Cainiao Smart and NRF has agreed that, subject to limited exceptions, without the prior written consent of the Sole Global
Coordinator on behalf of the underwriters, it will not, and will not cause any of its direct or indirect affiliates to, during the Restricted Period, (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
of the Lock-Up Securities or (2) enter into any hedging, swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up
Securities, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise or (3) publicly disclose the intention to do any of the foregoing.

        The
foregoing restrictions do not apply to:

    (a)
    transactions
    relating to Lock-Up Securities acquired after the completion of the Global Offering, provided that no filing under the Exchange Act shall be required or
    shall be voluntarily made by such lock-up party in connection with subsequent sales of Lock-Up Securities so acquired;
    (b)
    any
    arrangements or transactions that are entered into, undertaken or consummated pursuant to a requirement of a governmental authority, regulatory body to which
    such lock-up party is subject, a court of law, an arbitral tribunal or a requirement of any applicable law, rules and regulations;
    (c)
    the
    enforcement of any security interest created prior to the completion of the Global Offering over assets of such lock-up party generally, which may include
    Lock-Up Securities;
    (d)
    transfers
    of Lock-Up Securities as a bona fide gift or gifts;
    (e)
    transfers
    of Lock-Up Securities if such lock-up party is a partnership, limited liability company or corporation, to limited partners or shareholders or “affiliates”
    (as such term is defined in Rule 12b-2 under the Exchange Act) of such lock-up party, provided that any such transfer shall not involve a disposition for value;
    (f)
    transfers
    of Lock-up Securities to any trust for the direct or indirect benefit of such lock-up party or their immediate family provided that any such transfer shall
    not involve a disposition for value;
    (g)
    establishment
    or amendment of a trading plan pursuant to Rule 10b5 1 under the Exchange Act for the transfer of Lock-Up Securities, provided that
    (x) such plan does not provide for the transfer of Lock-Up Securities during the Restricted Period and (y) to the extent a public announcement or filing under the Exchange Act, if any,
    is required or voluntarily made regarding the establishment of such plan, such announcement or filing shall include a statement to the

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provided
that in the case of any transfer or distribution pursuant to the foregoing clause (d), (e) or (f), (i) each donee, distributee or transferee, as the case may be, shall
agree to be bound by the terms of the lock-up letter and (ii) no filing under the Exchange Act which reports a reduction in beneficial ownership of Lock-Up Securities shall be required or shall
be voluntarily made during the Restricted Period.

Undertakings by Xing Liu

        Xing Liu, our director, has agreed that, subject to limited exceptions, without the prior written consent of the Sole Global Coordinator on
behalf of the underwriters, he will not during the Restricted Period, (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the Lock-Up Securities or (2) enter into any hedging, swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities, whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise or (3) publicly disclose the intention to do any of the foregoing.

        The
foregoing restrictions do not apply to:

    (a)
    transactions
    relating to our ordinary shares or ADSs or other securities acquired in the Global Offering or after the completion of the Global Offering, provided
    that no filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made in connection with subsequent sales of our ordinary shares or ADSs or other securities
    acquired in such transactions;
    (b)
    any
    conversion of Lock-Up Securities into, or exchange or exercise of Lock-Up Securities for, ordinary shares or ADSs, provided that the ordinary shares or ADSs
    received upon such conversion, exchange or exercise shall be subject to the terms of the lock-up restrictions in the lock-up letter;
    (c)
    the
    establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of our ordinary shares or ADSs during the Restricted
    Period, provided that (x) such plan does not provide for the transfer of Lock-Up Securities during the Restricted Period and (y) to the extent a public announcement or filing under the
    Exchange Act, if any, is required of or voluntarily made by or on behalf of Xing Liu or the Company regarding the establishment of such plan, such announcement or filing shall include a statement to
    the effect that no transfer of ordinary shares or ADSs may be made under such plan during the Restricted Period (but for the avoidance of doubt, the restrictions shall not apply to any sale or other
    transfer of the shares or ADSs pursuant to a plan adopted pursuant to Rule 10b5-1 under the Exchange Act in effect as of the price determination date);
    (d)
    the
    enforcement of any security interest created prior to the completion of the Global Offering over assets of Xing Liu generally, which may include the Lock-Up
    Securities;
    (e)
    the
    maintenance of existing pledges of the Lock-Up Securities to one or more lenders for the purpose of securing personal loans to Xing Liu or a Permitted Transferee
    (as defined below) under facilities outstanding prior to the completion of the Global Offering; or

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    (f)
    any
    transfer of Lock-Up Securities pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction involving all holders of the
    ordinary shares or ADSs in connection with a change of control of the Company, provided that in the event the tender offer, merger, consolidation or other such transaction is not completed, the
    Lock-Up Securities shall remain subject to the restrictions set forth in the lock-up letter.

Notwithstanding
the foregoing, Xing Liu may transfer the Lock-Up Securities:

    (a)
    as
    a bona fide gift or gifts, or through will or intestacy;
    (b)
    to
    his immediate family members, or to any trust (including, for the avoidance of doubt, an entity owned and controlled by such trust) for his direct or indirect
    benefit or that of his immediate family, or to any entity beneficially owned and controlled by Xing Liu or his immediate family member, including any transfer of options, restricted shares or
    underlying ordinary shares to a charitable trust or similar entity they have established or will establish, provided that any such transfer shall not involve a disposition for value (the transferees
    in (a) and (b)), collectively, the “Permitted Transferees”);
    (c)
    by
    operation of law or by order of a court of competent jurisdiction, including pursuant to a qualified domestic order or in connection with a divorce settlement; or
    (d) with the prior written consent of the Sole Global Coordinator,

provided
that in the case of any transfer or distribution pursuant to clause (a) or (b), (i) each donee, distributee or transferee, as the case may be, shall agree to be bound by the
terms of the lock-up letter and (ii) no filing under the Exchange Act, reporting a reduction in beneficial ownership of Lock-up Securities, shall be required or shall be voluntarily made during
the Restricted Period.

Conditions of the Global Offering

        Acceptance of all applications for offer shares is conditional on, among other things:

    •
    the listing committee of the Hong Kong Stock Exchange granting approval for the listing of, and permission to deal in, our Class A
    ordinary shares in issue and to be issued pursuant to the Global Offering (including Class A ordinary shares which may be issued pursuant to the exercise of the option of the international
    underwriters to purchase additional Class A ordinary shares) and Class A ordinary shares to be issued pursuant to our share incentive plans and outstanding warrants and such approval not
    subsequently having been withdrawn or revoked prior to the date on which our Class A ordinary shares are listed on the Hong Kong Stock Exchange;

    •
    the pricing of the offer shares having been agreed between the Sole Global Coordinator (for itself and on behalf of the underwriters) and us;
    •
    the execution and delivery of the International Underwriting Agreement on or around the price determination date; and
    •
    the obligations of the Hong Kong underwriters under the Hong Kong Underwriting Agreement and the obligations of the international underwriters
    under the International Underwriting Agreement becoming and remaining unconditional and not having been terminated in accordance with the terms of the respective agreements,

in
each case on or before the dates and times specified in the respective underwriting agreements (unless and to the extent such conditions are validly waived on or before such dates and times) and,
in any event, not later than the date which is 30 days from the date of this prospectus supplement.

        If,
for any reason, we do not agree on the pricing of the offer shares with the Sole Global Coordinator (for itself and on behalf of the underwriters) on or before September 28,
2020, the Global Offering will not proceed and will lapse.

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        The
consummation of each of the Hong Kong public offering and the international offering is conditional upon, among other things, the other offering becoming unconditional and not having
been terminated in accordance with its terms.

        Share
certificates for the offer shares will only become valid at 8:00 a.m. in Hong Kong on September 29, 2020, provided that the Global Offering has become unconditional
in all respects at or before that time.

Dealings Arrangements

        Assuming that the Hong Kong public offering becomes unconditional at or before 8:00 a.m. in Hong Kong on September 29, 2020, it is
expected that dealings in the Class A ordinary shares on the Hong Kong Stock Exchange will commence at 9:00 a.m. in Hong Kong on September 29, 2020. The Class A ordinary
shares will be traded in board lots of 50 Class A ordinary shares each and the stock code of the Class A ordinary shares on the Hong Kong Stock Exchange will be “2057.”

Indemnification

        We have agreed to indemnify the several underwriters and their affiliates against certain liabilities, including liabilities under the
Securities Act, and to contribute to payments that the underwriters may be required to make in respect of those liabilities.

Stabilization

        Underwriters use stabilization in some markets to facilitate the distribution of securities. To stabilize, the underwriters may bid for, or
purchase, the securities in the secondary market during a specified period of time, to retard and, if possible, prevent a decline in the initial public market price of the securities below the offer
price. Such transactions may be effected in all jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws and regulatory requirements, including those of Hong
Kong. In Hong Kong, the price at which the stabilization is effected is not permitted to exceed the public offering price.

        In
connection with the Global Offering, the stabilizing manager (or any person acting for it), on behalf of the underwriters, may over-allocate or effect transactions with a view to
stabilizing or supporting the market price of the Class A ordinary shares at a level higher than that which might otherwise prevail for a limited period after the listing date in the Hong Kong
market. However, there is no obligation on the stabilizing manager (or any person acting for it) to conduct any such stabilizing action. Such stabilizing action, if taken, (i) will be conducted
at the absolute discretion of the stabilizing manager (or any person acting for it) and in what the stabilizing manager reasonably regards as our best interest, (ii) may be discontinued at any
time and (iii) is required to be brought to an end within 30 days after the date of the prospectus supplement.

        Stabilization
action permitted in Hong Kong pursuant to the Securities and Futures (Price Stabilizing) Rules of the Securities and Futures Ordinance includes (i) over-allocating
for the purpose of preventing or minimizing any reduction in the market price of the Class A ordinary shares, (ii) selling or agreeing to sell Class A ordinary shares so as to
establish a short position in them for the purpose of preventing or minimizing any reduction in the market price of the Class A ordinary shares, (iii) purchasing, or agreeing to
purchase, Class A ordinary shares pursuant to the exercise of the option of the international underwriters to purchase additional Class A ordinary shares in order to close out any
position established under clauses (i) or (ii) above, (iv) purchasing, or agreeing to purchase, any Class A ordinary shares for the sole purpose of preventing or minimizing
any reduction in the market price of the Class A ordinary shares, (v) selling or agreeing to sell any Class A ordinary shares in order to liquidate any position established as a
result of those purchases and (vi) offering or attempting to do anything as described in clauses (ii), (iii), (iv) or (v) above.

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        Specifically,
prospective applicants for and investors in the offer shares should note that:

    •
    the stabilizing manager (or any person acting for it) may, in connection with the stabilizing action, maintain a long position in
    Class A ordinary shares;

    •
    there is no certainty as to the extent to which and the time or period for which the stabilizing manager (or any person acting for it) will
    maintain such a long position;

    •
    liquidation of any such long position by the stabilizing manager (or any person acting for it) and selling in the open market may have an
    adverse impact on the market price of the Class A ordinary shares;

    •
    no stabilizing action can be taken to support the price of the Class A ordinary shares for longer than the stabilization period, which
    will begin on the date on which our Class A ordinary shares are listed on the Hong Kong Stock Exchange, and is expected to expire on October 22, 2020, being the 30th day after the
    last day for lodging applications under the Hong Kong public offering. After this date, when no further stabilization action may be made, or before this date in the event stabilization activities are
    not undertaken or otherwise, demand for the Class A ordinary shares, and therefore the price of the Class A ordinary shares, could fall;

    •
    the price of the Class A ordinary shares are not assured to stay at or above the public offering price by the taking of any stabilizing
    action or otherwise; and

    •
    stabilizing bids or transactions effected in the course of the stabilizing action may be made at any price at or below the public offering
    price and can, therefore, be done at a price below the price paid by applicants for, or investors in, the offer shares.

        We
will ensure that an announcement in compliance with the Securities and Futures (Price Stabilizing) Rules of the Securities and Futures Ordinance will be made within seven days of the
expiration of the stabilization period.

        In
connection with the Global Offering, the underwriters may also purchase and sell Class A ordinary shares or ADSs in the open market in compliance with all applicable laws and
regulations. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater
number of Class A ordinary shares than they are required to purchase in the offering or the sale by the underwriters of the ADSs, and a short position represents the amount of such sales that
have not been covered by subsequent purchases. A “covered short position” is a short position that is not greater than the amount of additional Class A ordinary shares (including Class A
ordinary shares represented by short sales of ADSs) for which the international underwriters’ option to purchase additional Class A ordinary shares may be exercised. The underwriters may cover
any covered short position by either exercising their option to purchase additional Class A ordinary shares or purchasing Class A ordinary shares or ADSs in the open market and
converting such ADSs into Class A ordinary shares. In determining the source of Class A ordinary shares to cover the covered short position, the underwriters will consider, among other
things, the price of Class A ordinary shares or ADSs available for purchase in the open market as compared to the price at which they may purchase additional Class A ordinary shares
pursuant to the option described above. Stabilizing transactions consist of various bids for or purchases of Class A ordinary shares or ADSs made by the underwriters in the open market.

        The
underwriters may also impose a penalty bid, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if the securities sold by them are
repurchased in connection with stabilization transactions. Purchases to cover a short position and stabilizing transactions, as well as other purchases by the underwriters for their own accounts, may
have the effect of preventing or retarding a decline in the market price of the Class A ordinary shares or ADSs, and together with the imposition of the penalty bid, may stabilize, maintain or
otherwise affect the market price of the Class A ordinary shares

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or
ADSs. As a result, the price of the Class A ordinary shares or ADSs may be higher than the price that otherwise might exist in the open market. The underwriters are not required to engage in
these activities (which may start at any time in the U.S. market beginning on the price determination date) and may end any of these activities at any time. These transactions may be effected on the
New York Stock Exchange, on the Hong Kong Stock Exchange, in the over-the-counter market or otherwise.

Activities by Underwriters

        Described below are a variety of activities that each of the underwriters of the Global Offering may individually undertake, and which do not
form part of the underwriting or the stabilizing process.

        The
underwriters and their respective affiliates are diversified financial institutions with relationships in countries around the world. These entities engage in a wide range of
commercial and investment banking, brokerage, funds management, trading, hedging, investing and other activities for their own account and for the account of others. In the ordinary course of their
various business activities, the underwriters and their respective affiliates may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities,
currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers. Such investment and trading activities may involve or relate to our
assets, securities and/or instruments and/or persons and entities with relationships with us and may also include swaps and other financial instruments entered into for hedging purposes in connection
with our loans and other debt.

        In
relation to the Class A ordinary shares, the activities of the underwriters and their respective affiliates could include acting as agent for buyers and sellers of the
Class A ordinary shares, proprietary trading in the Class A ordinary shares, and entering into over the counter or listed derivative transactions or listed or unlisted securities
transactions (including issuing securities such as derivative warrants listed on a stock exchange) which have as their underlying assets, assets including the Class A ordinary shares. Such
transactions may be carried out as bilateral agreements or trades with selected counterparties. Those activities may require hedging activity by those entities involving, directly or indirectly, the
buying and selling of the Class A ordinary shares, which may have a negative impact on the trading price of the Class A ordinary shares. All such activities could occur in Hong Kong and
in the United States and elsewhere in the world and may result in the underwriters and their respective affiliates holding long and/or short positions in the Class A ordinary shares, in baskets
of securities or indices including the Class A ordinary shares, in units of funds that may purchase the Class A ordinary shares, or in derivatives related to any of the foregoing.

        In
relation to issues by underwriters or their respective affiliates of any listed securities having the Class A ordinary shares as their underlying securities, whether on the
Hong Kong Stock Exchange or on any other stock exchange, the rules of the stock exchange may require the issuer of those securities (or one of its affiliates or agents) to act as a market maker or
liquidity provider in the security, and this will also result in hedging activity in the Class A ordinary shares in most cases.

        All
such activities may occur both during and after the end of the stabilizing period described under “—Stabilization” above. Such activities may affect the market price or
value of the Class A ordinary shares, the liquidity or trading volume in the Class A ordinary shares and the volatility of the
price of the Class A ordinary shares, and the extent to which this occurs from day to day cannot be estimated.

        It
should be noted that when engaging in any of these activities, the underwriters are subject to certain restrictions, including the
following:

    •
    the underwriters (other than the stabilizing manager or any person acting for it) must not, in connection with the distribution of the offer
    shares, effect any transactions (including issuing or entering into any option or other derivative transactions relating to the offer shares), whether in the open market or otherwise, with a view to
    stabilizing or maintaining the market price of any of the

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        Certain
of the underwriters or their respective affiliates have provided from time to time, and expect to provide in the future, investment banking and other services to us and certain
of our affiliates for which such underwriters or their respective affiliates have received or will receive customary fees and commissions.

Selling Restrictions

European Economic Area

        In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”)
an offer to the public of any of our Class A ordinary shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any of our
Class A ordinary shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

    (a)
    to
    any legal entity which is a qualified investor as defined in the Prospectus Directive;
    (b)
    to
    fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other
    than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Sole Global Coordinator for any such offer;
    or
    (c)
    in
    any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of our Class A ordinary shares shall
    result in a requirement for the publication by us or any underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

        For
the purposes of this provision, the expression an “offer to the public” in relation to any of our Class A ordinary shares in any Relevant Member State means the communication
in any form and by any means of sufficient information on the terms of the offer and any of our Class A ordinary shares to be offered so as to enable an investor to decide to purchase any of
our Class A ordinary shares, as the
same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments
thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, and the
expression “2010 PD Amending Directive” means Directive 2010/73/EU.

United Kingdom

        Each underwriter has represented and agreed that:

    (a)
    it
    has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment
    activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) received by it in connection with the issue or sale of our Class A ordinary shares in
    circumstances in which Section 21(1) of the FSMA does not apply to us; and

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    (b)
    it
    has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to our Class A ordinary shares in,
    from or otherwise involving the United Kingdom.

Australia

        No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and
Investments Commission (“ASIC”), in relation to the Global Offering. This prospectus supplement, the accompanying prospectus or any other document or material in connection with the offer or sale, or
invitation for subscription or
purchase, of the offer shares does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the “Corporations Act”), and does not purport
to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

        Any
offer in Australia of the offer shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the meaning of section 708(8) of the
Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of
the Corporations Act so that it is lawful to offer the offer shares without disclosure to investors under Chapter 6D of the Corporations Act.

        The
offer shares applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the Global
Offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the
Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring offer shares must observe such
Australian on-sale restrictions.

        This
prospectus supplement, the accompanying prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the offer
shares (i) contain general information only and do not take account of the investment objectives, financial situation or particular needs of any particular person; and (ii) do not
contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information herein is appropriate to their needs,
objectives and circumstances, and, if necessary, seek expert advice on those matters.

Bermuda

        The offer of the international offer shares under the international offering is private and is not intended for the public. This prospectus
supplement and the accompanying prospectus has not been approved by the Bermuda Monetary Authority or the Registrar of Companies in Bermuda. Any representation to the contrary, explicit or implicit is
prohibited.

British Virgin Islands

        The offer shares are not being and may not be offered to the public or to any person in the British Virgin Islands for purchase or subscription.
The offer shares may be offered to companies incorporated under the BVI Business Companies Act, 2004 (“BVI Companies”), but only where the offer will be made to, and received by, the relevant BVI
Company entirely outside of the British Virgin Islands. This prospectus supplement and the accompanying prospectus have not been, and will not be, registered with the Financial Services Commission of
the British Virgin Islands. No registered prospectus has been or will be prepared in respect of the offer shares for the purposes of the Securities and Investment Business Act, 2010 or the Public
Issuers Code of the British Virgin Islands.

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Canada

        The offer shares may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined
in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the offer shares must be made in accordance with an exemption from, or in a transaction not subject to, the
prospectus requirements of applicable securities laws.

        Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement and the accompanying
prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the
securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for
particulars of these rights or consult with a legal advisor.

        Pursuant
to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National
Instrument 33-105 Underwriting Conflicts (“NI 33-105”), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts
of interest in connection with the Global Offering.

Cayman Islands

        The offer shares may not be offered or sold, directly or indirectly, to the public or to any member of the public in the Cayman Islands.

Hong Kong

        This preliminary prospectus supplement and the accompanying prospectus have not been and will not be registered with the Registrar of Companies
in Hong Kong. The offer shares may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.
571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies (Winding Up
and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong), or (iv) pursuant to a registered “prospectus” which complies with or is exempt from compliance with Part XII of the
Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32, Laws of Hong Kong); and that there has not been issued and there will not be issued, whether in Hong Kong or elsewhere, any
advertisement, invitation or document relating to the offer shares, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to
do so under the laws of Hong Kong).

Japan

        No registration pursuant to Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of
1948, as amended), or the FIEL, has been made or will be made with respect to the solicitation of the application for the acquisition of the offer shares.

        Accordingly,
the offer shares have not been, directly or indirectly, offered or sold and will not be, directly or indirectly, offered or sold in Japan or to, or for the benefit of, any
resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity
organized under the laws of Japan) or to others for re-offering or re-sale, directly or indirectly, in Japan or to, or for

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the
benefit of, any resident of Japan except pursuant to an exemption from the registration requirements, and otherwise in compliance with, the FIEL and the other applicable laws and regulations of
Japan.

For Qualified Institutional Investors, or QII

        Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the
FIEL) in relation to the offer shares constitutes either a “QII only private placement” or a “QII only secondary distribution” (each as described in Paragraph 1, Article 23-13 of the
FIEL). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEL, has not been made in relation to the offer shares. The Class A
ordinary shares may only be transferred to QIIs.

For Non-QII Investors

        Please note that the solicitation for newly-issued or secondary securities (each as described in Paragraph 2, Article 4 of the
FIEL) in relation to the offer shares constitutes either a “small number private placement” or a “small number private secondary distribution” (each as is described in Paragraph 4,
Article 23-13 of the FIEL). Disclosure regarding any such solicitation, as is otherwise prescribed in Paragraph 1, Article 4 of the FIEL, has not been made in relation to the
offer shares. The offer shares may only be transferred en bloc without subdivision to a single investor.

Kingdom of Saudi Arabia

        This prospectus supplement and the accompanying prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are
permitted under the Offers of Securities Regulations issued by the Capital Market Authority of the Kingdom of Saudi Arabia (the “Capital Market Authority”).

        The
Capital Market Authority does not make any representation as to the accuracy or completeness of this prospectus supplement and the accompanying prospectus, and expressly disclaims
any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this prospectus supplement or the accompanying prospectus.

        Prospective
purchasers of the international offer shares under the international offering offered hereby should conduct their own due diligence on the accuracy of the information
relating thereto. If you do not understand the contents of this prospectus supplement and the accompanying prospectus, you should consult an authorized financial adviser.

Kuwait

        Unless all necessary approvals from the Kuwait Ministry of Commerce and Industry required by Law No. 31/1990 “Regulating the Negotiation
of Securities and Establishment of Investment Funds”, its Executive Regulations and the various Ministerial Orders issued pursuant thereto or in connection therewith, have been given in relation to
the marketing and sale of the offer shares, these may not be marketed, offered for sale, nor sold in the State of Kuwait. Neither this prospectus supplement (including any related document), nor any
of the information contained therein is intended to lead to the conclusion of any contract of whatsoever nature within Kuwait. Investors in Kuwait who approach us or any of the underwriters to obtain
copies of this prospectus supplement are required by us and the underwriters to keep such prospectus supplement confidential and not to make copies thereof nor distribute the same to any other person
in Kuwait and are also required to observe the restrictions provided for in all jurisdictions with respect to offering, marketing and the sale of the offer shares.

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Malaysia

        No prospectus or other offering material or document in connection with the offer and sale of the offer shares has been or will be registered
with the Securities Commission of Malaysia, or Commission, for the Commission’s approval pursuant to the Capital Markets and Services Act 2007. Accordingly, this prospectus supplement, the
accompanying prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the offer shares may not be circulated or distributed,
nor may the offer shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Malaysia other than (i) a closed
end fund approved by the Commission; (ii) a holder of a Capital Markets Services License; (iii) a person who acquires offer shares as principal, if the offer is on terms that the
Class A ordinary shares may only be acquired at a consideration of not less than RM250,000 (or its equivalent in foreign currencies) for each transaction; (iv) an individual whose total
net personal assets or total net joint assets with his or her spouse exceeds RM3 million (or its equivalent in foreign currencies), excluding the value of the primary residence of the
individual; (v) an individual who has a gross annual income exceeding RM300,000 (or its equivalent in foreign currencies) per annum in the preceding twelve months; (vi) an individual
who, jointly with his or her spouse, has a gross annual income of RM400,000 (or its equivalent in foreign currencies), per annum in the preceding twelve months; (vii) a corporation with total
net assets exceeding RM10 million (or its equivalent in a foreign currencies) based on the last audited accounts; (viii) a partnership with total net assets exceeding RM10 million
(or its equivalent in foreign currencies); (ix) a bank licensee or insurance licensee as defined in the Labuan Financial Services and Securities Act 2010; (x) an Islamic bank licensee or
takaful licensee as defined in the Labuan Financial Services and Securities Act 2010; and (xi) any other person as may be specified by the Commission; provided that, in the each of the
preceding categories (i) to (xi), the distribution of the offer shares is made by a holder of a Capital Markets Services License who carries on the business of dealing in securities. The
distribution in Malaysia of this prospectus supplement is subject to Malaysian laws. This prospectus supplement and the accompanying prospectus do not constitute and may not be used for the purpose of
public offering or an issue, offer for subscription or purchase, invitation to subscribe for or purchase any offer shares requiring the registration of a prospectus with the Commission under the
Capital Markets and Services Act 2007.

PRC

        This prospectus has not been and will not be circulated or distributed in the PRC, and the offer shares may not be offered or sold, and will not
be offered or sold to any person for re-offering or resale, directly or indirectly, to any residents of the PRC except pursuant to applicable laws and regulations of the PRC. For the purposes of this
paragraph, the PRC does not include Taiwan, Hong Kong or Macau.

Qatar

        This prospectus supplement and the accompanying prospectus is not intended to constitute an offer, sale or delivery of ordinary shares or other
securities under the laws of the State of Qatar including the rules and regulations of Qatar Financial Centre Authority (“QFCA”) or the Qatar Financial Centre Regulatory Authority (“QFCRA”). The offer
shares have not been and will not be listed on the Qatar Exchange and are not subject to the rules and regulations of the DSM Internal Regulations applying to the Qatar Exchange, the Qatar Financial
Markets Authority (“QFMA”), the Qatar Central Bank (“QCB”), the QFCA or the QFCRA, or any laws of the State of Qatar.

        This
prospectus supplement and the accompanying prospectus have not been and will not be:

    (i)
    lodged
    or registered with, or reviewed or approved by the QFCA, the QFCRA, the QCB or the QFMA; or
    (ii)
    authorized
    or licensed for distribution in the State of Qatar, and the information contained in this prospectus supplement or the accompanying prospectus does not,
    and is not intended to,

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        The
offer of the offer shares and interests therein do not constitute a public offer of securities in the State of Qatar under the Commercial Companies Law No. (5) of 2002 (as
amended) or otherwise under any laws of the State of Qatar, including the rules and regulations of the QFCA or QFCRA.

        The
offer shares are only being offered to a limited number of investors who are willing and able to conduct an independent investigation of the risks involved in an investment in such
ordinary shares. No transaction will be concluded in the jurisdiction of the State of Qatar (including the jurisdiction of the Qatar Financial Centre). We are not regulated by the QCB, QFMA, QFC
Authority, QFC Regulatory Authority or any other government authority in State of Qatar. We do not, by virtue of this prospectus supplement, conduct any business in the State of Qatar. Our company is
an entity regulated under laws outside the State of Qatar.

Singapore

        This prospectus supplement and the accompanying prospectus have not been registered as a prospectus with the Monetary Authority of Singapore.
Accordingly, this prospectus supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the offer shares may not be circulated
or distributed, nor may the offer shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than
(i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person pursuant to
Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA, or (iii) otherwise pursuant to, and
in accordance with the conditions of, any other applicable provision of the SFA.

        Where
the offer shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

    (a)
    a
    corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire
    share capital of which is owned by one or more individuals, each of whom is an accredited investor; or
    (b)
    a
    trust (where the trustee is not an accredited investor) the sole purpose of which is to hold investments and each beneficiary of the trust is an individual who is
    an accredited investor,

securities
(as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months
after that
corporation or that trust has acquired the offer shares pursuant to an offer made under Section 275 of the SFA except:

    (a)
    to
    an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any
    (b)
    person
    arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;
    (c)
    where
    no consideration is or will be given for the transfer;
    (d)
    where
    the transfer is by operation of law;
    (e)
    as
    specified in Section 276(7) of the SFA; or
    (f)
    as
    specified in Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore.

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South Korea

        The offer shares have not been and will not be registered with the Financial Services Commission of Korea for public offering in South Korea
under the Financial Investment Services and Capital Markets Act (the “FSCMA”), and none of the offer shares may be offered, sold or delivered, or offered or sold to any person for re-offering or
resale, directly or indirectly in South Korea or to any resident of South Korea except pursuant to applicable laws and regulations of South Korea, including the FSCMA and the Foreign Exchange
Transaction Law (the “FETL”) and the decrees and regulations thereunder. Furthermore, the offer shares may not be resold to South Korean residents unless the purchaser of the offer
shares complies with all applicable regulatory requirements (including, but not limited to, governmental approval requirements under the FETL and its subordinate decrees and regulations) in connection
with the purchase of the offer shares.

Switzerland

        The offer shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange, or SIX, or on any other stock
exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance of prospectuses under art. 652a or art. 1156 of the Swiss
Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in
Switzerland. Neither this document nor any other offering or marketing material relating to the offer shares or the offering may be publicly distributed or otherwise made publicly available in
Switzerland. Neither this document nor any other offering or marketing material relating to the Global Offering, the company or the offer shares have been or will be filed with or approved by any
Swiss regulatory authority. In particular, this document will not be filed with, and the offer of the offer shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA,
and the offer of the offer shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection afforded to acquirers of
interests in collective investment schemes under the CISA does not extend to acquirers of the offer shares.

Taiwan

        The offer shares have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities
laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act
of Taiwan that requires a registration or
approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of
the offer shares in Taiwan.

United Arab Emirates

        The Global Offering has not been approved or licensed by the UAE Central Bank or any other relevant licensing authority in the United Arab
Emirates (including the Dubai International Financial Centre), and does not constitute a public offer of securities in the United Arab Emirates (including the Dubai International Financial Centre) in
accordance with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or otherwise. Accordingly, the offer shares may not be offered to the public in the United Arab Emirates
(including the Dubai International Financial Centre).

        The
offer shares may be offered, and this prospectus supplement may be issued, only to a limited number of investors in the United Arab Emirates (including the Dubai International
Financial Centre) who qualify as sophisticated investors under the relevant laws of the United Arab Emirates (and the Dubai International Financial Centre). The offer shares will not be offered, sold,
transferred or delivered to the public in the United Arab Emirates (including the Dubai International Financial Centre).

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TAXATION

        The following is a general summary of certain Cayman Islands, PRC and United States federal income tax consequences
relevant to an investment in our Class A ordinary shares and our ADSs. The discussion is not intended to be, nor should it be construed as, legal or tax advice to any particular prospective
purchaser. The discussion is based on laws and relevant interpretations thereof in effect as of the date of this prospectus supplement, all of which are subject to change or different interpretations,
possibly with retroactive effect. The discussion does not address U.S. state or local tax laws, or tax laws of jurisdictions other than the Cayman Islands, the People’s Republic of China, Hong Kong
and the United States. You should consult your own tax advisors with respect to the consequences of an investment in our Class A ordinary shares and our ADSs. To the extent that this discussion
relates to matters of Cayman Islands tax law, it is the opinion of Maples and Calder (Hong Kong) LLP, our special Cayman
Islands counsel. To the extent that the discussion states definitive legal conclusions under PRC tax laws and regulations, it is the opinion of Global Law Office Shanghai, our special PRC
counsel.

Cayman Islands Taxation

        The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no
taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except for stamp duties which may be
applicable on instruments executed in, or after execution, brought within the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any
payments made to or by our company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

PRC Taxation

        Under the PRC Enterprise Income Tax Law and its implementation rules, an enterprise established outside of the PRC with a “de facto management
body” located within the PRC is considered a resident enterprise. The implementation rules define the term “de facto management body” as the body that in practice exercises substantial and overall
management and control over the production and operations personnel, accounting and properties, etc. of an enterprise. In April 2009, the State Taxation Administration of the PRC issued a circular, as
amended in November 2013 and December 2017 and partially invalid, known as Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a
PRC-controlled enterprise that is incorporated offshore is located in China. Although this circular only applies to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not
those controlled by PRC individuals or foreigners, the criteria set forth in the circular may reflect the STA’s general position on how the “de facto management body” text should be applied in
determining the tax resident status of all offshore enterprises. According to Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be regarded
as a PRC tax resident by virtue of having its “de facto management body” in China only if all of the following conditions are met: (i) the primary location of the day-to-day operational senior
management and senior management department’s performance of their duties is in the PRC; (ii) decisions relating to the enterprise’s financial and human resource matters are made or are subject
to approval by organizations or personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder meeting minutes, are located
or maintained in the PRC; and (iv) 50% or more of voting board members or senior executives habitually reside in the PRC.

        We
believe that ZTO Express (Cayman) Inc. should not be treated as a PRC resident enterprise for PRC tax purposes. ZTO Express (Cayman) Inc. is not controlled by a PRC
enterprise or PRC enterprise group and we do not believe that ZTO Express (Cayman) Inc. meets all of the conditions above. ZTO Express (Cayman) Inc. is a company incorporated outside the
PRC. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the

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meeting
minutes of its board of directors and the meeting minutes of its shareholders) are maintained, outside the PRC. However, the tax resident status of an enterprise is subject to determination by
the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body.”

        If
the PRC tax authorities determine that ZTO Express (Cayman) Inc. is a PRC resident enterprise for enterprise income tax purposes, we may be subject to PRC withholding tax at a
rate of up to 10% subject to any reduction or exemption set forth in relevant tax treaties, from dividends we pay to our shareholders that are non-resident enterprises, including the holders of our
ADSs. In addition, non-resident enterprise shareholders (including our ADS holders) may be subject to a 10% PRC tax on gains realized on the sale or other disposition of ADSs or ordinary shares, if
such income is treated as sourced from within the PRC. Furthermore, if we are deemed a PRC resident enterprise, dividends payable to our non-PRC individual shareholders (including our ADS holders) and
any gain realized on the transfer of ADSs or ordinary shares by such shareholders may be subject to PRC tax at a rate of 20% subject to any reduction or exemption set forth in relevant tax treaties.
It is also unclear whether non-PRC shareholders of ZTO Express (Cayman) Inc. would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the
event that ZTO Express (Cayman) Inc. is treated as a PRC resident enterprise.

        The
STA issued an STA Circular 59 together with the Ministry of Finance in April 2009 and a STA Public Notice 7 in 2015, which was most recently amended on December, 2017. By
promulgating and implementing these two circulars, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a
non-resident enterprise. Under STA Public Notice 7, an “indirect transfer” of assets, including equity interests in a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized
and treated as a direct transfer of PRC taxable assets, if such arrangement does not have a reasonable commercial purpose and was established for the purpose of avoiding payment of PRC enterprise
income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax. STA Public Notice 7 provides relevant criteria for assessment of reasonable commercial
purposes and has introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. STA Public Notice 7 also brings challenges to both a
foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. Where a non-resident enterprise transfers taxable assets indirectly by disposing of the
equity interests of an overseas holding company, which is an indirect transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity that directly owns the taxable assets,
may report such indirect transfer to the relevant
tax authority. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was
established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC enterprise income tax, and the transferee or other
person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise, subject to
any reduction or exemption set forth in relevant tax treaties. Both the transferor and the transferee may be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and
the transferor fails to pay the taxes. According to the Announcement of the STA on Matters Concerning Withholding of Income Tax of Non-resident Enterprises at Source, or STA Announcement 37, which
came into effect on December 1, 2017 and amended in June 15, 2018, the withholding party shall, within seven days of the day on which the withholding obligation occurs, declare and remit
the withholding tax to the competent tax authority at its locality. Where the withholding party fails to withhold and remit the income tax payable or is unable to perform its obligation in this
regard, the non-resident enterprise that earns the income shall declare and pay the tax that has not been withheld to the competent tax authority at the place where the income occurs, and complete the
Withholding Statement of the People’s Republic of China for Enterprise Income Tax. Our company may be subject to filing obligations or taxed if our company is the transferor in such transactions, and
may be subject to withholding obligations if our company is the

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transferee
in such transactions, under STA Announcement 37 and STA Public Notice 7. For transfer of shares in our company by investors that are non-PRC resident enterprises, our PRC subsidiaries may
be requested to assist in the filing under STA Public Notice 7. As a result, we may be required to expend valuable resources to comply with STA Announcement 37 and STA Public Notice 7 or to request
the relevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not be taxed under these circulars, which may have a material
adverse effect on our financial condition and results of operations.

        Under
the EIT Law and its implementation rules, certain “high and new technology enterprises strongly supported by the state” that independently own core intellectual property and meet
statutory criteria are permitted to enjoy a reduced 15% enterprise income tax rate. On January 29, 2016, the State Taxation Administration, the Ministry of Science and Technology of the PRC and
the Ministry of Finance of the PRC jointly issued the Administrative Measures for the Certification of High and New Technology Enterprises specifying the criteria and procedures for the qualification
and certification of the High and New Technology Enterprises.

        Under
the Circular 58, the Circular 12 and the Announcement on Continuation of the Enterprise Income Tax Policy for the Western Region Development which will become effective on
January 1, 2021, from January 1, 2011 to December 31, 2030, if the primary business of the enterprise is listed in one of the industry items provided in the Catalog of Encouraged
Industries in Western Regions and annual primary business revenue accounts for more than 70% of the total enterprise revenue, it may pay enterprise income tax at the reduced tax rate of 15% subject to
the examination and confirmation of
the competent tax authority. The STA promulgated the Announcement of the STA on Enterprise Income Tax Issues concerning the Implementation of the Catalog of Encouraged Industries in the Western Region
thereafter, and from October 1, 2014, the payment of enterprise income tax at the reduced tax rate of 15% shall cease to apply to enterprises that have enjoyed policies for preferential
treatment of enterprise income tax under the Circular 12 if their primary businesses no longer fall within the “encouraged” category of Catalog of Encouraged Industries in the Western Region.
Afterwards, the STA abolished the examination and confirmation procedures of the competent tax authority for the preferential treatment under the Circular 12.

Hong Kong Taxation

        In connection with the Hong Kong public offering, we will establish a branch register of members in Hong Kong, or the Hong Kong share register.
Dealings in our Class A ordinary shares registered on our Hong Kong share register will be subject to Hong Kong stamp duty. The stamp duty is charged to each of the seller and purchaser at the
ad valorem rate of 0.1% of the consideration for, or (if greater) the value of, our Class A ordinary shares transferred. In other words, a total of 0.2% is currently payable on a typical sale
and purchase transaction of our Class A ordinary shares. In addition, a fixed duty of HK$5.00 is charged on each instrument of transfer (if required).

        To
facilitate ADS-Class A ordinary share conversion and trading between the New York Stock Exchange and the Hong Kong Stock Exchange, we also intend to move a portion of our
issued Class A ordinary shares from our register of members maintained in the Cayman Islands to our Hong Kong share register. It is unclear whether, as a matter of Hong Kong law, the trading or
conversion of ADSs constitutes a sale or purchase of the underlying Hong Kong-registered Class A ordinary shares that is subject to Hong Kong stamp duty. We advise investors to consult their
own tax advisors on this matter. See “Risk Factors—Risks Related to Our Class A Ordinary Shares, ADSs and the Global Offering—There is uncertainty as to whether Hong
Kong stamp duty will apply to the trading or conversion of our ADSs following our initial public offering in Hong Kong and listing of our Class A ordinary shares on the Hong Kong Stock
Exchange.”

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United States Federal Income Tax Considerations

        The following discussion is a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of our
ADSs or Class A ordinary shares by a U.S. Holder (as defined below) that acquires our Class A ordinary shares in this offering and holds our ADSs or Class A ordinary shares as “capital
assets” (generally, property held for investment) under the U.S. Internal Revenue Code of 1986, as amended, or the Code. This discussion is based upon existing U.S. federal tax law, which is subject
to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service, the IRS, with respect to any U.S. federal income tax consequences
described below, and there can be no assurance that or the IRS or a court will not take a contrary position. This discussion, moreover, does not address the U.S. federal estate, gift, Medicare, and
alternative minimum tax considerations, or any state, local and non-U.S. tax considerations, relating to the ownership or disposition of our ADSs or Class A ordinary shares. The following
summary does not address all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances or to persons in special tax situations
such as:

    •
    banks and other financial institutions;
    •
    insurance companies;
    •
    pension plans;
    •
    cooperatives;
    •
    regulated investment companies;
    •
    real estate investment trusts;
    •
    broker-dealers;
    •
    traders in securities that elect to use a mark-to-market method of accounting;
    •
    certain former U.S. citizens or long-term residents;
    •
    tax-exempt entities (including private foundations);
    •
    persons liable for alternative minimum tax;
    •
    holders who acquire their ADSs or Class A ordinary shares pursuant to any employee share option or otherwise as compensation;
    •
    investors that will hold their ADSs or Class A ordinary shares as part of a straddle, hedge, conversion, constructive sale or other
    integrated transaction for U.S. federal income tax purposes;

    •
    investors that have a functional currency other than the U.S. dollar;
    •
    persons that actually or constructively own 10% or more of our stock (by vote or value);
    •
    investors required to accelerate the recognition of any item of gross income with respect to our ADSs or Class A ordinary shares as a
    result of such income being recognized on an applicable financial statement; or

    •
    partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding common stock through such
    entities,

        all
of whom may be subject to tax rules that differ significantly from those discussed below.

        Each
U.S. Holder is urged to consult its tax advisor regarding the application of U.S. federal tax law to its particular circumstances, and the state, local, non-U.S. and other tax
considerations of the ownership and disposition of our ADSs or Class A ordinary shares.

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General

        For purposes of this discussion, a “U.S. Holder” is a beneficial owner of our ADSs or Class A ordinary shares that is, for U.S. federal
income tax purposes:

    •
    an individual who is a citizen or resident of the United States;
    •
    a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the law of the
    United States or any state thereof or the District of Columbia;

    •
    an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
    •
    a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who
    have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code.

        If
a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our ADSs or Class A ordinary shares, the tax treatment of
a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our ADSs or Class A ordinary shares and their
partners are urged to consult their tax advisors regarding an investment in our ADSs or Class A ordinary shares.

        For
U.S. federal income tax purposes, it is generally expected that a U.S. Holder of ADSs will be treated as the beneficial owner of the underlying Class A ordinary shares
represented by the ADSs. The remainder of this discussion assumes that a U.S. Holder of our ADSs will be treated in this manner.
Accordingly, deposits or withdrawals of Class A ordinary shares for ADSs will generally not be subject to U.S. federal income tax.

Passive Foreign Investment Company Considerations

        A non-U.S. corporation, such as our company, will be classified as a PFIC, for U.S. federal income tax purposes for any taxable year, if either
(i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (generally determined on the basis of a
quarterly average) during such year is attributable to assets that produce or are held for the production of passive income. For this purpose, cash and assets readily convertible into cash are
categorized as a passive asset and the company’s goodwill and other unbooked intangibles are taken into account. Passive income generally includes, among other things, dividends, interest, rents,
royalties, and gains from the disposition of passive assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation
in which we own, directly or indirectly, 25% or more (by value) of the stock.

        Although
the law in this regard is unclear, we treat our consolidated VIE as being owned by us for U.S. federal income tax purposes because we control its management decisions and are
entitled to substantially all of the economic benefits associated with this entity. As a result, we consolidate its results of operations in our consolidated U.S. GAAP financial statements. If
it were determined, however, that we are not the owner of the consolidated VIE for U.S. federal income tax purposes, we would likely be treated as a PFIC for the current taxable year and any
subsequent taxable year.

        Assuming
that we are the owner of the VIE for U.S. federal income tax purposes, and based upon our current income and assets, and our market capitalization, we do not believe we were a
PFIC for the taxable year ended December 31, 2019 and do not anticipate becoming a PFIC in the current taxable year or in the foreseeable future. While we do not anticipate being or becoming a
PFIC in the current or foreseeable taxable years, no assurance can be given in this regard because the determination of whether we will be or become a PFIC is a factual determination made annually
that will depend, in part, upon the composition of

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our
income and assets. Fluctuations in our market capitalization may cause us to be classified as a PFIC for the current or future taxable years because the value of our assets for purposes of the
asset test, including the value of our goodwill and unbooked intangibles, may be determined by reference to our market capitalization from time to time (which may be volatile). If our market
capitalization
subsequently declines, we may be or become classified as a PFIC for the current taxable year or future taxable years. Furthermore, the composition of our income and assets may also be affected by how,
and how quickly, we use our liquid assets and the cash raised in this offering. Under circumstances where our revenue from activities that produce passive income significantly increase relative to our
revenue from activities that produce non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may
substantially increase.

        If
we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or Class A ordinary shares, the PFIC rules discussed below under “Passive Foreign Investment
Company Rules” generally will apply to such U.S. Holder for such taxable year, and unless the U.S. Holder makes certain elections, will apply in future years even if we cease to be a PFIC.

        The
discussion below under “Dividends” and “Sale or Other Disposition” is written on the basis that we will not be or become classified as a PFIC for U.S. federal income tax purposes.
The U.S. federal income tax rules that apply generally if we are treated as a PFIC are discussed below under “Passive Foreign Investment Company Rules.”

Dividends

        Subject to the discussion below under “Passive Foreign Investment Company Rules,” any cash distributions (including the amount of any PRC tax
withheld) paid on our ADSs or Class A ordinary shares out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles, will generally be
includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by the U.S. Holder, in the case of Class A ordinary shares, or by the
depositary, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any distribution we pay will generally be treated as
a “dividend” for U.S. federal income tax purposes. Dividends received on our ADSs or Class A ordinary shares will not be eligible for the dividends received deduction allowed to corporations. A
non-corporate U.S. Holder will be subject to tax at the lower capital gain tax rate applicable to “qualified dividend income,” provided that certain conditions are satisfied, including that
(1) our ADSs or Class A ordinary shares are readily tradeable on an established securities market in the United States, or, in the event that we are deemed to be a PRC resident enterprise under
the PRC tax law, we are eligible for the benefit of the United States-PRC income tax treaty, (2) we are neither a PFIC nor treated as such with respect to a U.S. Holder (as discussed below) for
the taxable year in which the dividend was paid and the preceding taxable year, and (3) certain holding period requirements are met. We expect our ADSs (but not our Class A ordinary
shares) will be readily tradeable on an established securities market in the United States. There can be no assurance, however, that our ADSs will be considered readily tradeable on an established
securities market in later years.

        In
the event that we are deemed to be a PRC resident enterprise under the PRC Enterprise Income Tax Law (see “Taxation—People’s Republic of China Taxation”), a U.S. Holder
may be subject to PRC withholding taxes on dividends paid on our ADSs or Class A ordinary shares. We may, however, be eligible for the benefits of the United States-PRC income tax treaty. If we
are eligible for such benefits, dividends we pay on our Class A ordinary shares, regardless of whether such shares are represented by the ADSs, would be eligible for the reduced rates of
taxation described in the preceding paragraph.

        Dividends
will generally be treated as income from foreign sources for U.S. foreign tax credit purposes and will generally constitute passive category income. Depending on the U.S.
Holder’s individual facts and circumstances, a U.S. Holder may be eligible, subject to a number of complex limitations, to claim a

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foreign
tax credit in respect of any foreign withholding taxes imposed on dividends received on our ADSs or Class A ordinary shares. A U.S. Holder who does not elect to claim a foreign tax
credit for foreign tax withheld may instead claim a deduction, for U.S. federal income tax purposes, in respect of such withholding, but only for a year in which such holder elects to do so for all
creditable foreign income taxes. The rules governing the foreign tax credit are complex and their outcome depends in large part on the U.S. Holder’s individual facts and circumstances. Accordingly,
U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale or Other Disposition

        Subject to the discussion below under “Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize capital gain or loss
upon the sale or other disposition of ADSs or Class A ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder’s adjusted tax basis
in such ADSs or Class A ordinary shares. Any capital gain or loss will be long-term if the ADSs or Class A ordinary shares have been held for more than one year and will generally be
U.S.-source gain or loss for U.S. foreign tax credit purposes. In the event that gain from the disposition of the ADSs or Class A ordinary shares is subject to tax in the PRC, such gain may be
treated as PRC source gain under the United States-PRC income tax treaty. The deductibility of a capital loss may be subject to limitations. U.S. Holders are urged to consult their tax advisors
regarding the tax consequences if a foreign tax is imposed on a disposition of our ADSs or Class A ordinary shares, including the availability of the foreign tax credit under their particular
circumstances.

        A
U.S. Holder that receives Hong Kong dollars or another currency other than U.S. dollars on the disposition of our Class A ordinary shares will realize an amount equal to the
U.S. dollar value of the non-U.S. currency received at the spot rate on the date of sale (or, if the Class A ordinary shares are traded on a recognized exchange, in the case of cash basis and
electing accrual basis U.S. Holders, the settlement date). An accrual basis U.S. Holder that does not elect to determine the amount realized using the spot rate on the settlement date will
recognize foreign currency gain or loss equal to the difference between the U.S. dollar value of the amount received based on the spot exchange rates in effect on the date of sale or other
disposition and the settlement date. A U.S. Holder will have a tax basis in the currency received equal to the U.S. dollar value of the currency received on the settlement date. Any gain or
loss on a subsequent disposition or conversion of the currency will be United States source ordinary income or loss.

Passive Foreign Investment Company Rules

        If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or Class A ordinary shares, and unless the
U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution that we make to the U.S. Holder
(which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent of the average annual distributions paid in the three preceding taxable
years or, if shorter, the U.S. Holder’s holding period for the ADSs or Class A ordinary shares), and (ii) any gain realized on the sale or other disposition of the ADSs or Class A
ordinary shares. Under the PFIC rules:

    •
    the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or Class A ordinary shares;
    •
    the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in
    which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income;

    •
    the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for
    individuals or corporations, as appropriate, for that year; and

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    •
    the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than
    a pre-PFIC year.

        If
we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or Class A ordinary shares and any of our subsidiaries is also a PFIC, such U.S. Holder would be
treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are urged to consult their tax advisors regarding
the application of the PFIC rules to any of our subsidiaries.

        As
an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to such stock, provided that certain requirements
are met. If a U.S. Holder makes this election, the holder will generally (i) include as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of
our ADSs or Class A ordinary shares held at the end of the taxable year over the adjusted tax basis of such ADSs or Class A ordinary shares and (ii) deduct as an ordinary loss the
excess, if any, of the adjusted tax basis of the ADSs or Class A ordinary shares over the fair market value of such ADSs or Class A ordinary shares held at the end of the taxable year,
but such deduction will only be allowed to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs or
Class A ordinary shares would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of a corporation
classified as a PFIC and such corporation ceases to be classified as a PFIC, the holder will not be required to take into account the gain or loss described above during any period that such
corporation is not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or other disposition of our ADSs or Class A
ordinary shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such loss will only be treated as ordinary loss to the extent of the
net amount previously included in income as a result of the mark-to-market election.

        Because
a mark-to-market election technically cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules with respect to such
U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.

        We
do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections which, if available, would result in tax treatment different from the general
tax treatment for PFICs described above.

        If
a U.S. Holder owns our ADSs or Class A ordinary shares during any taxable year that we are a PFIC, the holder must generally file an annual IRS Form 8621. You should
consult your tax advisors regarding the U.S. federal income tax consequences of owning and disposing of our ADSs or Class A ordinary shares if we are or become a PFIC.

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LEGAL MATTERS

        We are being represented by Skadden, Arps, Slate, Meagher & Flom LLP and Skadden, Arps and Slate, Meagher & Flom with
respect to certain legal matters of United States federal securities law, New York State law and Hong Kong law, by Maples and Calder (Hong Kong) LLP with respect to legal matters of Cayman
Islands law, and by Global Law Office Shanghai with respect to legal matters of PRC law. The underwriters are being represented by Freshfields Bruckhaus Deringer with respect to legal matters of
United States federal securities law, New York State law and Hong Kong law and by JunHe LLP with respect to legal matters of PRC law. The validity of the Class A ordinary shares offered
in the Global Offering and legal matters as to Cayman Islands law will be passed upon for us by Maples and Calder (Hong Kong) LLP. Certain legal matters as to PRC law will be passed upon for us
by Global Law Office Shanghai and for the underwriters by JunHe LLP. Skadden, Arps, Slate, Meagher & Flom LLP and Skadden, Arps, Slate, Meagher & Flom may rely upon Maples and Calder (Hong
Kong) LLP with respect to matters governed by Cayman Islands law Skadden, Arps, Slate, Meagher & Flom LLP, Skadden, Arps and Slate, Meagher & Flom and Maples and Calder (Hong
Kong) LLP may rely upon Global Law Office Shanghai with respect to matters governed by PRC law. Freshfields Bruckhaus Deringer may rely upon JunHe LLP with respect to matters governed by
PRC law.

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EXPERTS

        The financial statements incorporated in this prospectus supplement by reference from ZTO Express (Cayman) Inc.’s
annual report on Form 20-F for the year ended December 31,
2019
and ZTO Express (Cayman) Inc.’s current report on Form 6-K
dated September 11, 2020
, and the effectiveness of ZTO Express (Cayman) Inc.’s internal control over financial reporting as of December 31, 2019, have been audited
by Deloitte Touche Tohmatsu Certified Public Accountants LLP, an independent registered public accounting firm, as stated in their reports, which are incorporated herein by reference. Such
financial statements have been so incorporated in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing.

        The
offices of Deloitte Touche Tohmatsu Certified Public Accountants LLP is located at Shanghai, the People’s Republic of China.

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PROSPECTUS


LOGO

ZTO Express (Cayman) Inc.

CLASS A ORDINARY SHARES

We may from time to time in one or more offerings offer and sell our Class A ordinary shares, including Class A ordinary shares represented by
American depositary shares, or ADSs.

In
addition, from time to time, the selling shareholders (if any) to be named in a prospectus supplement may offer and sell our Class A ordinary shares held by them. The selling shareholders
(if any) may sell shares of our Class A ordinary shares through public or private transactions at prevailing market prices or at privately negotiated prices. We will not receive any proceeds
from the sale of shares of our Class A ordinary shares by the selling shareholders (if any).

We
will provide the specific terms of any offering in one or more supplements to this prospectus. Any prospectus supplement may also add, update, or change information contained in this prospectus.
You should carefully read this prospectus and the applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you
purchase any of the securities offered hereby.

These
securities may be offered and sold in the same offering or in separate offerings; to or through underwriters, dealers, and agents; or directly to purchasers. The names of any underwriters,
dealers, or agents involved in the sale of our securities, their compensation and any over-allotment options held by them will be described in the applicable prospectus supplement. For a more complete
description of the plan of distribution of these securities, see the section entitled “Plan of Distribution” beginning on page 34 of this prospectus.

The
ADSs are listed on the New York Stock Exchange under the symbol “ZTO.” On September 10, 2020, the last reported sale price of the ADSs on the New York Stock Exchange was $31.27 per ADS.

Investing in our securities involves risks. You should carefully consider the risks described in “Risk Factors
which may be included in any prospectus supplement or which are incorporated by reference into this prospectus.

This prospectus may not be used to offer or sell any securities unless accompanied by a prospectus supplement.

Neither the United States Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.



   

The date of this prospectus is September 11, 2020.



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ABOUT THIS PROSPECTUS

This prospectus is part of an automatic shelf registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, as a
“well-known seasoned issuer” as defined in Rule 405 under the Securities Act of 1933, as amended, or the Securities Act. By using an automatic shelf registration statement, we or any selling
shareholder may, at any time and from time to time, offer and sell the securities described in this prospectus in one or more offerings. We may also add, update or change information contained in this
prospectus by means of a prospectus supplement or by incorporating by reference information that we file or furnish to the SEC. As allowed by the SEC rules, this prospectus and any accompanying
prospectus supplement do not contain all of the information included in the registration statement. For further information, we refer you to the
registration statement, including its exhibits. Statements contained in this prospectus or any prospectus supplement about the provisions or contents of any agreement or other document are not
necessarily complete. If the SEC’s rules and regulations require that an agreement or document be filed as an exhibit to the registration statement, please see that agreement or document for a
complete description of these matters.

You
should carefully read this document and any applicable prospectus supplement. You should also read the documents we have referred you to under “Where You Can Find More Information About Us” and
“Incorporation of Documents by Reference” below for information on our company, the risks we face and our financial statements. The registration statement and exhibits can be read at the SEC’s website
or at the SEC as described under “Where You Can Find More Information About Us.” In this prospectus, unless otherwise indicated or unless the context otherwise requires:

(1)   the
terms “ZTO,” “we,” “us,” “our company” or “our” refer to ZTO Express (Cayman) Inc., its subsidiaries and its consolidated affiliated entities. Depending on the context,
references to “we” and “our” may also include the network partners within our network;

(2)   “Class A
ordinary shares” are to our Class A ordinary shares, par value US$0.0001 per share;

(3)   “Class B
ordinary shares” are to our Class B ordinary shares, par value US$0.0001 per share;

(4)   “ordinary
shares” are to our Class A and Class B ordinary shares, par value US$0.0001 per share;

(5)   “ADSs”
refers to the American depositary shares, each of which represents one Class A ordinary share;

(6)   “China”
or the “PRC” are to the People’s Republic of China, excluding, for the purposes of this prospectus only, Hong Kong, Macau and Taiwan; and

(7)   all
references to “RMB” and “Renminbi” are to the legal currency of China and all references to “U.S. dollars,” “US$,” “dollars” and “$” are to the legal currency of the United
States.

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FORWARD-LOOKING STATEMENTS

This prospectus and the documents incorporated by reference contain forward-looking statements that reflect our current expectations and views of future
events. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such
as “may,” “will,” “expect,” “anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,” “is/are likely to” or other similar expressions. We have based these forward-looking statements largely on
our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
These forward-looking statements include, among other things:

•
our goals and strategies;
•
our future business development, financial conditions and results of operations;
•
the expected growth of the express delivery industry in China;
•
our expectations regarding demand for and market acceptance of our services;
•
our expectations regarding our relationships with network partners, direct and end customers, suppliers and our other stakeholders;
•
competition in our industry; and
•
relevant government policies and regulations relating to our industry.

The
forward-looking statements included in this prospectus and the documents incorporated by reference are subject to risks, uncertainties and assumptions about our company. Our actual results of
operations may differ materially from the forward-looking statements as a result of the risk factors disclosed in the documents incorporated by reference herein or in any accompanying prospectus
supplement.

We
would like to caution you not to place undue reliance on these forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in the documents
incorporated by reference herein or in any accompanying prospectus supplement for a more complete discussion of the risks of an investment in our securities and other risks outlined in our other
filings with the SEC. The forward-looking statements included in this prospectus or incorporated by reference into this prospectus are made only as of the date of this prospectus or the date of the
incorporated document, and we do not undertake any obligation to update the forward-looking statements except as required under applicable law.

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OUR COMPANY

Overview

We are a leading express delivery company in China. Through our network and together with our network partners, we provide domestic and international express
delivery services supplemented by other value-added services. Our delivery network covers over 99.2% of China’s cities and counties as of June 30, 2020.

We
mainly provide express deliveries in China of parcels weighing under 50 kilograms with expected delivery time ranging from 24 to 72 hours. Our delivery time has improved over time.

The
following chart sets out the services provided by us and our network partners.

Key Category

      Service Offerings

Domestic Express

  Express Delivery  

•

Intra-city
Delivery

     

•

Inter-city
Delivery

  Enterprise Customer Services  

•

Customized one-stop
express delivery solution for key accounts

  Ancillary Services  

•

Cash-on-Delivery
Service

     

•

Alternative Address
Pick-up

     

•

Proof-of-delivery
Collection

     

•

Parcel Interception
Service

     

•

Reverse
Logistics

     

•

Others

  Regional  

•

Hong Kong/Taiwan
Door-to-Door Express Service

International Express

  Cross-border  

•

International express
services to the key overseas markets in cooperation with business partners

Building
on our core delivery business, we strive to become an integrated logistics service provider. We are expanding our service offerings to other logistics services such as less-than-truckload
services, integrated solutions for warehousing, distribution and transportation and freight forwarding services, as well as air cargo services.

For
more information about our company, please see “Item 4. Information on the Company” in our annual report on
Form 20-F for the year ended December 31, 2019, which
is incorporated in this prospectus by reference, and any accompanying prospectus supplement before investing in any securities that may be offered pursuant to this prospectus.

Corporate Information

Our principal executive offices are located at Building One, No. 1685 Huazhi Road, Qingpu District, Shanghai, 201708, People’s Republic of China. Our
telephone number at this address is +86 21 59804508. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand
Cayman, KY1-1104, Cayman Islands. We have appointed Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168, as our agent
upon whom process may be served in any action brought against us under the securities laws of the United States in connection with an offering of securities registered by the registration statement of
which this prospectus is a part.

The
SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with the SEC using its
EDGAR system. We maintain our website at http://ir.zto.com. Information contained on, or that can be accessed through, our website is not incorporated by reference into this prospectus, and you should
not consider information on our website to be part of this prospectus.

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RISK FACTORS

Investing in our securities involves risk. Before you decide to buy our securities, you should carefully consider the risks described in our most recent
annual report on Form 20-F, which is incorporated herein by
reference, as well as the risks that are described in the applicable prospectus supplement and in other documents incorporated by reference into this prospectus.

Please
see “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” for information on where you can find the documents we have filed with or furnished to the SEC
and which are incorporated into this prospectus by reference.

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USE OF PROCEEDS

We intend to use the net proceeds from the sale of the securities we offer as set forth in the applicable prospectus supplement.

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DESCRIPTION OF SHARE CAPITAL

We are a Cayman Islands company and our affairs are governed by our memorandum and articles of association and the Companies Law (2020 Revision) of the Cayman
Islands, which we refer to as the Companies Law below, and the common law of the Cayman Islands.

As
of June 30, 2020, the authorized share capital of our company is US$1,000,000 divided into 10,000,000,000 shares comprising of (i) 8,000,000,000 Class A ordinary shares of a
par value of US$0.0001 each, 577,794,733 of which are issued and outstanding (excluding (a) Class A ordinary shares
issuable upon the exercise of outstanding share options and Class A ordinary shares reserved for issuance under our 2016 Share Incentive Plan, (b) 7,447,313 Class A ordinary
shares issued and reserved for the purpose of our employee shareholding platform, the holder of which has waived all shareholder rights attached to those shares, and (c) the Company’s
repurchase of 12,209,069 Class A ordinary shares in the form of ADSs), (ii) 1,000,000,000 Class B ordinary shares of a par value of US$0.0001 each, 206,100,000 of which are issued
and outstanding, and (iii) 1,000,000,000 shares of a par value of US$0.0001 each of such class or classes (however designated) as the board of directors may determine in accordance with
Article 9 of the articles of association, none of which is issued and outstanding.

The
following are summaries of material provisions of our memorandum and articles of association and the Companies Law insofar as they relate to the material terms of our ordinary shares.

Ordinary Shares

General.    Our ordinary shares are divided into Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and
Class B ordinary shares will have the same rights except for voting and conversion rights. Our ordinary shares are issued in registered form and are issued when registered in our register of
members. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.

Conversion.    Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof. Class A ordinary
shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary shares by a holder thereof to
any person or entity that is not an Affiliate (as defined in our memorandum and articles of association) of such holder or upon a change of ultimate beneficial ownership of any Class B ordinary
shares to any person who is not an Affiliate of the holder of such Class B ordinary shares, such Class B ordinary shares will be automatically and immediately converted into an equal
number of Class A ordinary shares. In addition, if at any time, Mr. Meisong Lai and his affiliates collectively hold less than 10% of the issued and outstanding shares in the capital of
our company, each issued and outstanding Class B ordinary share will be automatically and immediately converted into one Class A ordinary share, and we will not issue any Class B
ordinary shares thereafter.

Dividends.    The holders of our ordinary shares are entitled to such dividends as may be declared by our board of directors. In addition, our shareholders may by
ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Our memorandum and articles of association provide that dividends may be declared and paid
out of our profits, realized or unrealized, or from any reserve set aside from profits which our board of directors determine is no longer needed. Dividends may also be declared and paid out of a
share premium account or any other fund or account which can be authorized for this purpose in accordance with the Companies Law, provided that in no circumstances may we pay a dividend if this would
result in our company being unable to pay its debts as they fall due in the ordinary course of business.

Voting Rights.    On a show of hands, each shareholder is entitled to one vote for each ordinary share registered in his name on the register of members or, on a
poll, each shareholder is entitled to one vote for each Class A ordinary share registered in his name on the register of members and ten votes for each

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Class B
ordinary share registered in his name on the register of members, voting together as a single class, on all matters that require a shareholder’s vote. Voting at any shareholders’
meeting is by show of hands unless a poll is demanded. A poll may be demanded by the chairman of such meeting or any shareholder present in person or by proxy.

A
quorum required for a meeting of shareholders consists of one or more shareholders present and holding not less than one-third of the votes attaching to all issued and outstanding shares in our
company. Shareholders may be present in person or by proxy or, if the shareholder is a legal entity, by its duly authorized representative. Shareholders’ meetings may be convened by the chairman of
our board of directors or our board of directors on its own initiative or upon a request to the directors by shareholders holding no less than one-third of all votes attaching to all issued and
outstanding shares in our share capital. Advance notice of at least ten calendar days is required for the convening of our annual general shareholders’ meeting and any other general shareholders’
meeting.

An
ordinary resolution to be passed at a meeting by the shareholders requires the affirmative vote of a simple majority of the votes attaching to the ordinary shares cast by those shareholders
entitled to vote who are present in person or by proxy at a meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes attaching to the ordinary shares
cast by those shareholders entitled to vote who are present in person or by proxy at a meeting. A special resolution will be required for important matters such as a change of name or making changes
to our memorandum and articles of association. Holders of the ordinary shares may, among other things, divide or combine their shares by ordinary resolution.

Transfer of Ordinary Shares.    Subject to the restrictions set out below and the provisions above in respect of the transfer of Class B ordinary shares, any
of our shareholders may transfer all or any of his or her ordinary shares by an instrument of transfer in the usual or common form or any other form approved by our board of directors.

Our
board of directors may, in its absolute discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board of directors may also
decline to register any transfer of any ordinary share unless:

•
the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other
evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

•
the instrument of transfer is in respect of only one class of ordinary shares;
•
the instrument of transfer is properly stamped, if required;
•
in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four;
and

•
a fee of such maximum sum as the New York Stock Exchange may determine to be payable or such lesser sum as our directors may from time to time
require is paid to us in respect thereof.

If
our directors refuse to register a transfer, they shall, within three calendar months after the date on which the instrument of transfer was lodged, send to each of the transferor and the
transferee notice of such refusal.

The
registration of transfers may, after compliance with any notice required of the New York Stock Exchange, be suspended and the register closed at such times and for such periods as our board of
directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year as our board
may determine.

Liquidation.    On the winding up of our company, if the assets available for distribution amongst our shareholders shall be more than sufficient to repay the whole
of the share capital at the commencement of

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the
winding up, the surplus shall be distributed amongst our shareholders in proportion to the par value of the shares held by them at the commencement of the winding up, subject to a deduction from
those shares in respect of which there are monies due, of all monies payable to our company for unpaid calls or otherwise. If our assets available for distribution are insufficient to repay the whole
of the share capital, such assets will be distributed so that the losses are borne by our shareholders in proportion to the par value of the shares held by them.

Calls on Ordinary Shares and Forfeiture of Ordinary Shares.    Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on
their shares in a notice served to such shareholders at least 14 days prior to the specified time and place of payment. The shares that have been called upon and remain unpaid are subject to
forfeiture.

Redemption, Repurchase and Surrender of Ordinary Shares.    We may issue shares on terms that such shares may be redeemed, at our option or at the option of the
holders thereof, in such manner and on such terms as may be determined, before the issue of such shares, by either our board of directors or by a special resolution of our shareholders. Our company
may also repurchase any of our shares in such manner and on such terms as have been approved by our board of directors or by ordinary
resolution of our shareholders, or are otherwise authorized by our memorandum and articles of association. Under the Companies Law, the redemption or repurchase of any share may be paid out of our
company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including a share premium account and capital redemption
reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Law, no such share may be redeemed
or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) if the company has commenced
liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.

Variations of Rights of Shares.    Whenever the capital of our company is divided into different classes, the rights attached to any such class may, subject to any
rights or restrictions for the time being attached to any class, only be materially adversely varied with the consent in writing of the holders of two-thirds of the issued shares of that class or with
the sanction of a special resolution passed at a separate meeting of the holders of the shares of that class. The rights conferred upon the holders of the shares of any class issued with preferred or
other rights shall not, subject to any rights or restrictions for the time being attached to the shares of that class, be deemed to be materially adversely varied by, inter alia, the creation,
allotment or issue of further shares ranking pari passu with or subsequent to them or the redemption or purchase of any shares of any class by our company. The rights of the holders of shares shall
not be deemed to be materially adversely varied by the creation or issue of shares with preferred or other rights including, without limitation, the creation of shares with enhanced or weighted voting
rights.

Issuance of Additional Shares.    Our memorandum and articles of association authorizes our board of directors to issue additional ordinary shares from time to time
as our board of directors shall determine, to the extent of available authorized but unissued shares.

Our
memorandum and articles of association also authorizes our board of directors to establish from time to time one or more series of preference shares and to determine, with respect to any series of
preference shares, the terms and rights of that series, including:

•
the designation of the series;
•
the number of shares of the series;
•
the dividend rights, dividend rates, conversion rights and voting rights; and
•
the rights and terms of redemption and liquidation preferences.

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Our
board of directors may issue preference shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute the voting power of holders of ordinary
shares.

Anti-Takeover Provisions.    Some provisions of our memorandum and articles of association may discourage, delay or prevent a change of control of our company or
management that shareholders may consider favorable, including provisions that:

•
authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges
and restrictions of such preference shares without any further vote or action by our shareholders; and

•
limit the ability of shareholders to requisition and convene general meetings of shareholders.

However,
under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum and articles of association for a proper purpose and for what they believe
in good faith to be in the best interests of our company.

Exempted Company.    We are an exempted company with limited liability under the Companies Law. The Companies Law distinguishes between ordinary resident companies
and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The
requirements for an exempted company are essentially the same as for an ordinary company except that an exempted company:

•
does not have to file an annual return of its shareholders with the Registrar of Companies;
•
is not required to open its register of members for inspection;
•
does not have to hold an annual general meeting;
•
may issue negotiable or bearer shares or shares with no par value;
•
may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first
instance);

•
may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;
•
may register as a limited duration company; and
•
may register as a segregated portfolio company.

“Limited
liability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company.

Changes in Capital.    The company may from time to time by ordinary resolution increase the share capital by such sum, to be divided into shares of such classes and
amount, as the resolution shall prescribe. The company may by ordinary resolution:

(a)   increase
its share capital by new shares of such amount as it thinks expedient;

(b)   consolidate
and divide all or any of its share capital into shares of a larger amount than its existing shares;

(c)   subdivide
its shares, or any of them, into shares of an amount smaller than that fixed by the memorandum and articles of association, provided that in the subdivision the proportion
between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and

(d)   cancel
any shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the
amount of the shares so cancelled.

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The
company may by special resolution reduce its share capital and any capital redemption reserve in any manner authorized by law.

Registered Office and Objects

Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman,
KY1-1104, Cayman Islands. Our agent for service of process in the United States is Law Debenture Corporate Services Inc., located at 4th Floor, 400 Madison Avenue, New York, New York
10017.Under our memorandum and articles of association, the objects of our company are unrestricted, and we have the full power and authority to carry out any object not prohibited by the law of the
Cayman Islands.

Differences in Corporate Law

The Companies Law is derived, to a large extent, from the older Companies Acts of England but does not follow recent United Kingdom statutory enactments, and
accordingly there are significant differences between the Companies Law and the current Companies Act of England. In addition, the Companies Law differs from laws applicable to United States
corporations and their shareholders. Set forth below is a summary of certain significant differences between the provisions of the Companies Law applicable to us and the laws applicable to companies
incorporated in the United States and their shareholders.

Mergers and Similar Arrangements.    The Companies Law permits mergers and consolidations between Cayman Islands companies and between Cayman Islands companies and
non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting of their undertaking, property and liabilities in one of
such companies as the surviving company and (b) a “consolidation” means the combination of two or more constituent companies into a combined company and the vesting of the undertaking, property
and liabilities of such companies to the
consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then be authorized
by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles of
association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of the consolidated or
surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or consolidation will be given to the members and
creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation
which is effected in compliance with these statutory procedures.

A
merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders. For this purpose, a subsidiary is a company of which
at least 90% of the issued shares entitled to vote are owned by the parent company.

The
consent of each holder of a fixed or floating security interest of a constituent company is required unless this requirement is waived by a court in the Cayman Islands.

Except
in certain limited circumstances, a shareholder of a Cayman Islands constituent company who dissents from the merger or consolidation is entitled to payment of the fair value of his or her
shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting from a merger or consolidation, provided the dissenting shareholder complies strictly
with the procedures set out in the Companies Law. The exercise of such dissenter rights will preclude the exercise by the dissenting shareholder of any other rights to which he or she might otherwise
be entitled by virtue of holding shares, except for the right to seek relief on the grounds that the merger or consolidation is void or unlawful.

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Separate
from the statutory provisions relating to mergers and consolidations, the Companies Law also contains statutory provisions that facilitate the reconstruction and amalgamation of companies by
way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each class of shareholders or creditors with whom the arrangement is to be made and who must, in
addition, represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings,
convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to
express to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

•
the statutory provisions as to the required majority vote have been met;
•
the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of
the minority to promote interests adverse to those of the class;

•
the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and
•
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law.

The
Companies Law also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of dissentient minority shareholders upon a tender offer. When a tender offer is made
and accepted by holders of 90% of the shares affected within four months, the offeror may, within a two-month period commencing on the expiration of such four month period, require the holders of the
remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an
offer which has been so approved unless there is evidence of fraud, bad faith or collusion.

If
an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted, in accordance with the foregoing statutory procedures,
a dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to
receive payment in cash for the judicially determined value of the shares.

Shareholders’ Suits.    In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule a derivative
action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the
Cayman Islands, the Cayman Islands court can be expected to apply and follow the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) which permit a minority
shareholder to commence a class action against, or derivative actions in the name of, a company to challenge the following:

•
an act which is illegal or ultra vires;
•
an act which, although not ultra vires, could only be effected duly if authorized by a special or qualified majority vote that has not been
obtained; and

•
an act which constitutes a fraud on the minority where the wrongdoers are themselves in control of the company.

Indemnification of Directors and Executive Officers and Limitation of Liability.    Cayman Islands law does not limit the extent to which a company’s memorandum and
articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy,
such as to provide indemnification against civil fraud

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or
the consequences of committing a crime. Our memorandum and articles of association provide that we shall indemnify our directors and officers against all losses, damages, costs, expenses, actions,
proceedings, charges or liabilities incurred in their capacities as such unless such losses or damages arise from dishonesty, wilful default or fraud of such directors or officers in or about the
conduct of our company’s business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without
prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending (whether successfully or otherwise) any civil proceedings
concerning our company or our
affairs in any court whether in the Cayman Islands or elsewhere. This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.

In
addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additional indemnification beyond that provided in our memorandum
and articles of association.

Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed
that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Directors’ Fiduciary Duties.    Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This
duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under
similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of
loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This
duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling
shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action
taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a
transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

As
a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it is considered that he owes the following duties
to the company—a duty to act bona fide in the best interests of the company, a duty not to make a profit based on his position as director (unless the company permits him to do so) and a
duty not to put himself in a position where the interests of the company conflict with his personal interest or his duty to a third party. A director of a Cayman Islands company owes to the company a
duty to act with skill and care. It was previously considered that a director need not exhibit in the pe