(Yicai Global) May 21 -- ZTO Express expects the remainder of this year to deliver higher annual earnings after the Chinese courier’s first-quarter profit took a hit from the coronavirus lockdown.

The company forecast an adjusted net income ofCNY5.39 billion to CNY5.83 billion (USD759 million to USD821 million) for the full year through December, which it said in guidance published yesterday wouldrepresent a 10 percent to 20 percent gain in the last nine months.The figure wasCNY5.29 million last year.

The forecast “seems a little bit conservative,” Zhai Baoying,vice president at Citi Equity Researchin Hong Kong said on ZTO’searnings conference call.“Previously, we've seen 10 percent year-on-year non-GAAP growth could be a base case.”

Founder and Chief Executive Lai Meisong said ZTO had issued a “reasonably achievable and also sound earnings guideline,” adding that the firm’s projections were “based on the overall economic outlook, including those statistics published by the central post bureau.”

"Relief and stimulus policies are positively supporting the economic recovery, and consumer demands appeared strong,” Chief Financial Officer Yan Huiping said in a press release. “Statistics shown that e-commerce growth lead the retail spending, and express delivery industry is at the forefront acting as a catalyst.”

Shanghai-headquarteredZTO hopes to deliver at least 15.9 billion parcels this year, and will need to increase deliveries by at least 37 percent over the remaining three quarters to do so, it said.

Daily parcel volumes were at a record high in the first half of May and peaked at around 50 million packages, Lai said, adding that the company is still on track with its core strategy of rapidly acquiring market share without affecting service standards.

For the three months ended March 31, ZTO posted a 45 percent decline in net profit after the coronavirus outbreak weighed down the fast delivery sector. The company still pocketed CNY371 million (USD52.4 million), with revenue falling 14.4 percent to CNY3.9 billion (USD553 million).

The firm also said its market share increased 0.3 percentage point in the quarter to 18.9 percent.

“Overall results for the quarter were satisfactory,” Lai said in an accompanying press release. “The entire country faced challenges brought by Covid-19 outbreak and made tremendous effort and sacrifices. Express delivery business as a whole was able to return to normal operations ahead of many other industries, thanks to policy support and robust consumption demand.”

Shares of ZTO [NYSE:ZTO], the only US-listed Chinese express delivery business, fell 1 percent to USD34.28 in New yesterday, after hitting a record high USD35.64 earlier this week.

Editor: James Boynton