ZTO Prices Offering of US$1.5 Billion Convertible Senior Notes

Rhea-AI Summary

ZTO (NYSE: ZTO) priced US$1.5 billion of convertible senior notes due March 1, 2031, with a 0.925% annual coupon and an initial conversion rate of 32.3130 shares per US$1,000 (approx. HK$241.79 per share, ~35.0% conversion premium to HK$179.10 on Feb 4, 2026).

The company expects to use up to US$1.0 billion for on-market repurchases and ~US$500 million for a concurrent private repurchase, capped-call hedges and general corporate purposes; closing expected on or about Feb 9, 2026.

Positive

• Raised US$1.5 billion via convertible senior notes maturing March 1, 2031
• Up to US$1.0 billion allocated for on-market share repurchases to support share price
• Concurrent repurchase of 18,254,400 Class A shares at HK$179.10 per share
• Low fixed coupon of 0.925% reduces ongoing cash interest burden relative to higher-yield debt

Negative

• Potential dilution upon conversion despite capped calls and repurchases
• Hedging and secondary-market activity by option counterparties could increase share supply or price volatility
• Conversion price (~HK$241.79) represents a 35.0% premium but may still dilute if converted into shares
• Notes include optional redemptions and repurchase features that could create timing uncertainty for investors

News Market Reaction

+1.24%

9 alerts

+1.24% News Effect

+$232M Valuation Impact

$18.94B Market Cap

0.9x Rel. Volume

On the day this news was published, ZTO gained 1.24%, reflecting a mild positive market reaction. Our momentum scanner triggered 9 alerts that day, indicating moderate trading interest and price volatility. This price movement added approximately $232M to the company's valuation, bringing the market cap to $18.94B at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Convertible notes size: US$1.5 billion Refinancing and buybacks: Up to US$1,000 million Other uses of proceeds: Approximately US$500 million +5 more

8 metrics

Convertible notes size US$1.5 billion Aggregate principal amount of convertible senior notes due 2031

Refinancing and buybacks Up to US$1,000 million Planned use of proceeds for near-term on-market share/ADS repurchases

Other uses of proceeds Approximately US$500 million Concurrent share repurchase, capped call premium, and general purposes

Coupon rate 0.925% per year Interest on convertible senior notes, payable semiannually

Initial conversion rate 32.3130 shares / US$1,000 Class A ordinary shares per US$1,000 principal amount of notes

Conversion premium 35.0% Above HK$179.10 closing price of Class A ordinary shares on Feb 4, 2026

Capped call cap US$35.9906 Initial cap level for capped call transactions per share

Concurrent share repurchase 18,254,400 shares Class A ordinary shares to be repurchased off-market at HK$179.10

Market Reality Check

Price: $24.13 Vol: Volume 1,750,179 is below...

normal vol

$24.13 Last Close

Volume Volume 1,750,179 is below 20-day average 2,044,700 (relative volume 0.86x). normal

Technical Trading above 200-day MA of 19.39 and about 0.82% below 52-week high of 22.695.

Peers on Argus

ZTO was up 1.72% with volume below average, while peers were mixed: EXPD -1.02%,...

ZTO was up 1.72% with volume below average, while peers were mixed: EXPD -1.02%, CHRW +0.36%, JBHT +4.04%, FDX +2.94%, UPS +1.06%. No momentum scanner signals or same-day peer headlines indicate this move was stock-specific rather than a broad sector rotation.

Historical Context

5 past events · Latest: Jan 20 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 20	Operations update	Positive	-0.8%	2026 network conference reporting 2025 parcel growth and strategic priorities.
Nov 19	Earnings release	Negative	-0.1%	Q3 2025 results with margin pressure and lowered full-year volume guidance.
Oct 24	Earnings preview	Neutral	+0.3%	Announcement of Q3 2025 earnings release date and conference call details.
Aug 29	Debt action	Positive	-1.8%	Completion of repurchase offer for 1.50% convertible notes due 2027.
Aug 19	Earnings release	Negative	-1.1%	Q2 2025 results with strong volume but lower net income and revised guidance.

Pattern Detected

Recent news and financing actions often saw flat to negative one-day moves, even on operationally positive updates.

Recent Company History

Over the last six months, ZTO’s news flow focused on operations, earnings, and capital structure. In Q2 2025 and Q3 2025, results showed parcel volume and revenue growth but margin pressure and lowered annual volume guidance. In August 2025, ZTO completed a repurchase right offer for its 1.50% Convertible Senior Notes due 2027. A January 20, 2026 conference highlighted strong 2025 parcel volume of 38.52 billion. Today’s convertible offering continues this theme of actively managing leverage and equity through notes and repurchase programs.

Market Pulse Summary

This announcement details a US$1.5 billion convertible senior note issuance paired with a substantia...

Analysis

This announcement details a US$1.5 billion convertible senior note issuance paired with a substantial concurrent share repurchase of 18,254,400 Class A shares at HK$179.10. The structure includes a low 0.925% coupon, a 35.0% conversion premium, and capped call transactions designed to limit dilution. In recent quarters, ZTO has actively managed convertibles and buybacks, while facing mixed earnings trends. Investors may watch execution on repurchases, leverage metrics, and any follow-on financing or guidance updates.

Key Terms

convertible senior notes, rule 144a, regulation s, securities act, +4 more

8 terms

convertible senior notes financial

"announced the pricing of US$1.5 billion in aggregate principal amount of convertible senior notes"

Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.

rule 144a regulatory

"“qualified institutional buyers” (as defined in Rule 144A under the United States Securities Act"

Rule 144A is a regulation that makes it easier for companies to sell private bonds to large investors without going through all the usual rules that apply to public sales. It matters because it helps companies raise money more quickly and privately, often attracting big investors looking for special deals.

regulation s regulatory

"in reliance on Regulation S under the Securities Act"

Regulation S is a set of rules that allows companies to sell securities (like shares or bonds) to investors outside the United States without having to follow all U.S. securities laws. It matters because it makes it easier for companies to raise money from international investors while still complying with U.S. regulations.

securities act regulatory

"under the United States Securities Act of 1933, as amended (the “Securities Act”)"

A securities act is a law that governs the offering, sale and disclosure of stocks, bonds and other investment products to the public. It requires companies to provide clear, truthful information—like a product label for an investment—so buyers can understand risks and value before they invest. For investors, these rules reduce fraud, promote transparency, and help ensure fair access to market information.

capped call transactions financial

"entered into capped call transactions with one or more of the initial purchasers"

Capped call transactions are agreements where investors buy options that give them the chance to benefit if a stock's price goes up, but with a limit on how much they can gain. This helps protect them from paying too much if the stock's price rises a lot, similar to having a maximum limit on a reward. They matter because they help investors manage risk while still allowing some upside potential.

optional redemption financial

"such redemption, an “Optional Redemption”"

Optional redemption is the issuer’s right to pay back a bond or preferred security before its scheduled maturity date. Investors care because this can cut short expected interest or dividend payments and force them to reinvest the returned principal, often at lower rates; think of it like a homeowner paying off a loan early — the lender gets cash back sooner but loses the steady future income originally expected. Issuers may offer a small premium to compensate investors, which affects the security’s price and yield.

fundamental change financial

"to require the Company to repurchase any Notes held in the event of a “fundamental change”"

A fundamental change is a major shift in how a company or economy operates, like a new technology or a big change in leadership. It matters because such changes can affect the value or stability of investments, making them more or less attractive. Think of it like a major upgrade or shift in the rules of a game that can change the outcome.

american depositary shares financial

"Class A ordinary shares and/or American depositary shares (“ADSs”) of the Company"

American depositary shares (ADSs) are a way for investors in the United States to buy shares of foreign companies without dealing with international markets directly. They represent ownership in a foreign company's stock and are traded on U.S. stock exchanges, making it easier for American investors to buy, sell, and own parts of companies from around the world.

AI-generated analysis. Not financial advice.

SHANGHAI, Feb. 4, 2026 /PRNewswire/ -- ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057), a leading and fast-growing express delivery company in China ("ZTO" or the "Company"), today announced the pricing of US$1.5 billion in aggregate principal amount of convertible senior notes due 2031 (the "Notes"). The Notes have been offered in offshore transactions outside the United States to non-U.S. persons that are "qualified institutional buyers" (as defined in Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act")) in reliance on Regulation S under the Securities Act.

The Company plans to use the net proceeds from the Notes Offering for the following purposes: (i) up to US$1,000 million for refinancing to fund near-term on-market repurchases (from time to time) of Class A ordinary shares and/or American depositary shares ("ADSs") of the Company pursuant to its share repurchase program(s), subject to prevailing market conditions, as well as applicable laws and regulations, (ii) approximately US$500 million to fund the Concurrent Share Repurchase (as defined below), the premium of the capped call transactions as described below and other general corporate purposes.

When issued, the Notes will be general senior unsecured obligations of ZTO. The Notes will bear interest at a rate of 0.925% per year, payable semiannually in arrears on March 1 and September 1 of each year, beginning on September 1, 2026. The Notes will mature on March 1, 2031, unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date.

The initial conversion rate of the Notes is 32.3130 of the Company's Class A ordinary shares per US$1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately HK$241.79 per Class A ordinary share and represents a conversion premium of approximately 35.0% above the closing price of the Company's Class A ordinary shares on February 4, 2026, which was HK$179.10 per Class A ordinary shares). The conversion rate for the Notes is subject to adjustment upon the occurrence of certain events.

Holders may not convert the Notes at any time prior to the 40th day following the last date of the original issuance of the Notes (such date, the "Compliance Period End Date"). After the Compliance Period End Date, holders may convert their Notes at their option at any time prior to the close of business on the fifth scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will pay or deliver, as the case may be, cash, Class A ordinary shares, or a combination of cash and Class A ordinary shares, at the Company's election.

The Company may redeem for cash all but not part of the Notes (i) if less than 10% of the aggregate principal amount of Notes originally issued remains outstanding at such time (the "Cleanup Redemption") and (ii) in the event of certain tax law changes (the "Tax Redemption"). The Notes will not be redeemable before March 6, 2029, except in connection with a Tax Redemption or Cleanup Redemption. On or after March 6, 2029 and on or prior to the 44th scheduled trading day immediately prior to the maturity date, the Notes will be redeemable, in whole or in part, for cash at the Company's option at any time, and from time to time, if the last reported sale price of the Class A ordinary shares has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date the Company provides notice of redemption (such redemption, an "Optional Redemption"). The redemption price in the case of a Tax Redemption, Cleanup Redemption or an Optional Redemption will equal 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the related redemption date.

Holders of the Notes have the option, subject to certain conditions, to require the Company to repurchase any Notes held in the event of a "fundamental change" (as will be defined in the indenture for the Notes). In addition, holders have the right to require the Company to repurchase for cash all or part of their Notes on March 1, 2029. The repurchase price, in each case, will be equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

In connection with the pricing of the Notes, the Company has entered into capped call transactions with one or more of the initial purchasers and/or their affiliates and/or other financial institutions (the "Option Counterparties"). The capped call transactions are generally expected to reduce potential dilution to the Class A ordinary shares of the Company upon conversion of the Notes, and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, with such reduction of potential dilution and/or offset of cash payments, as the case may be, subject to a cap that will initially be US$35.9906, which represents a premium of 57.0% over the last reported sale price of HK$179.10 per Class A ordinary share on February 4, 2026 (converted into U.S. dollars at the pre-determined exchange rate), and is subject to certain customary adjustments, and subject to the Company's ability to elect, subject to certain conditions, to settle the capped call transactions in cash, in whole or in part (in which case the Company would not receive any Class A ordinary shares from the Option Counterparties upon settlement of the capped call transactions). In connection with establishing their initial hedge positions with respect to the capped call transactions, the Option Counterparties or their respective affiliates expect to purchase their hedges in privately negotiated transactions and/or enter into various derivative transactions with respect to the Class A ordinary shares concurrently with, or shortly after, the pricing of the Notes. This activity could have the effect of increasing (or reducing the size of any decrease in) the market price of the Class A ordinary shares, ADSs, other securities of the Company or the Notes at that time.

In addition, the Option Counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to the Class A ordinary shares, ADSs, the Notes or other securities of the Company and/or purchasing or selling the Class A ordinary shares, ADSs, the Notes or other securities of the Company in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and are likely to do so following any conversion of the Notes or repurchase of the Notes by the Company on any fundamental change repurchase date, the repurchase date or otherwise, in each case, if the Company elects to unwind the relevant portion of the capped call transactions early). The effect, if any, of this activity, including the direction or magnitude, on the market price of the Class A ordinary shares or ADSs or the price of the Notes will depend on a variety of factors, including market conditions, and cannot be ascertained at this time. Any of this activity could cause or avoid an increase or a decrease in the market price of the Class A ordinary shares, ADSs, other securities of the Company or the price of the Notes, which could affect whether the holders convert their Notes and the value of the consideration that holders will receive upon conversion of their Notes. In addition, any of the Option Counterparties may choose to engage in, or to discontinue engaging in, any of these transactions and activities with or without notice at any time, and their decisions will be in their sole discretion and not within the Company's control.

The Company expects to close the Notes Offering on or about February 9, 2026, subject to the satisfaction of customary closing conditions.

Concurrently with the pricing of the Notes, the Company agreed to repurchase 18,254,400 Class A ordinary shares from certain purchasers of the Notes in off-market privately negotiated transactions effected through one of the initial purchasers or its affiliates, as the Company's agent (such transactions, the "Concurrent Share Repurchase"). The Concurrent Share Repurchase is expected to facilitate the initial hedging by purchasers of the Notes who desire to hedge their investments in the Notes, as the Company intends to repurchase the available portion of the initial delta of the transaction, after taking into account the Option Counterparties' initial hedges of the capped call transactions. This will allow such purchasers of the Notes to establish short positions that generally correspond to commercially reasonable initial hedges of their investments in the Notes. The Concurrent Share Repurchase will be made pursuant to the Company's existing share repurchase program that is effective through June 30, 2026. The purchase price in the Concurrent Share Repurchase is the closing price of the Class A ordinary share on the Hong Kong Stock Exchange on February 4, 2026, which is HK$179.10 per Class A ordinary share.

In addition to the Concurrent Share Repurchase, the Company may also repurchase additional Class A ordinary shares and/or ADSs on the open market after the closing of the Notes and from time to time. The Concurrent Share Repurchase and future repurchases pursuant to the Company's share repurchase program(s) will be funded by the net proceeds of the Notes Offering, and, in the aggregate, are generally expected to offset potential dilution to the holders of the Company's ordinary shares (including in the form of ADSs) upon conversion of the Notes.

The Notes and the Class A ordinary shares deliverable upon conversion of the Notes (if any) have not been and will not be registered under the Securities Act or any state securities laws. They may not be offered or sold in the United States or to, or for the account or benefits of, U.S. persons (as defined in Regulation S under the Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and subject to the transfer restrictions set forth in the Notes. No public offering of the Notes and the Class A ordinary shares deliverable upon conversion of the Notes (if any) is being made into the United States.

This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.

This press release contains information about the pending Notes Offering, and there can be no assurance that the Notes Offering will be completed.

About ZTO

ZTO Express (Cayman) Inc. (NYSE: ZTO and SEHK: 2057) ("ZTO" or the "Company") is a leading and fast-growing express delivery company in China. ZTO provides express delivery service as well as other value-added logistics services through its extensive and reliable nationwide network coverage in China.

ZTO operates a highly scalable network partner model, which the Company believes is best suited to support the significant growth of e-commerce in China. The Company leverages its network partners to provide pickup and last-mile delivery services, while controlling the mission-critical line-haul transportation and sorting network within the express delivery service value chain.

For more information, please visit http://zto.investorroom.com.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. ZTO may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its interim and annual reports to shareholders, in announcements, circulars or other publications made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology, such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates," "likely to" and similar statements. Forward-looking statements involve inherent risks and uncertainties. Among other things, the terms of the Notes, and whether the Company will complete the Notes Offering, are forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, the development of the e-commerce industry in China, its significant reliance on the Alibaba ecosystem, risks associated with its network partners and their employees and personnel, intense competition which could adversely affect the Company's results of operations and market share, any service disruption of the Company's sorting hubs or the outlets operated by its network partners or its technology system. Further information regarding these and other risks is included in ZTO's annual report on Form 20-Fs and other filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is current as of the date hereof, and ZTO assumes no obligation to update such information, except as required under applicable law.

For investor and media inquiries, please contact:

ZTO Express (Cayman) Inc.
Investor Relations
E-mail: ir@zto.com
Phone: +86 21 5980 4508

 

View original content:https://www.prnewswire.com/news-releases/zto-prices-offering-of-us1-5-billion-convertible-senior-notes-302679073.html

SOURCE ZTO Express (Cayman) Inc.

FAQ

What are the key terms of ZTO's US$1.5 billion convertible notes priced on February 4, 2026 (ZTO)?

The notes mature on March 1, 2031 and carry a 0.925% annual coupon. According to the company, the initial conversion rate is 32.3130 shares per US$1,000, equivalent to ~HK$241.79 per share, with customary adjustment provisions.

How will ZTO (ZTO) use the proceeds from the US$1.5 billion convertible offering?

ZTO intends to use proceeds for repurchases and corporate needs. According to the company, up to US$1.0 billion may fund on-market repurchases and ~US$500 million will fund the concurrent repurchase, capped-call premiums and general corporate purposes.

What is the Concurrent Share Repurchase tied to ZTO's convertible notes offering and how many shares are involved?

The company agreed to an off-market repurchase of 18,254,400 Class A shares at HK$179.10 per share. According to the company, this concurrent repurchase facilitates initial hedging by purchasers of the notes.

What conversion and redemption mechanics should ZTO (ZTO) investors be aware of for the 2031 notes?

Holders may convert after a compliance period and the company can redeem after March 6, 2029 under specified price conditions. According to the company, optional, cleanup and tax redemptions and fundamental-change repurchase rights apply under the indenture.

How could capped call transactions affect ZTO shareholders after the convertible notes pricing on Feb 4, 2026?

Capped calls are expected to reduce dilution but are capped and may be cash-settled. According to the company, option counterparties' hedging and derivative activity could still affect the market price and share supply.