July 17, 2019 - The case was dismissed.

August 14, 2017 (Shareholders Foundation) - An investor in shares of ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by ZTO Express (Cayman) Inc in connection with certain allegedly false and misleading statements made in connection with the Company’s October 27, 2016 initial public offering (“IPO”).

According to the complaint the plaintiff alleges on behalf of investor of ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) common shares, who purchased their NYSE:ZTO shares in connection with the Company’s October 27, 2016 IPO, , that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that the IPO Registration Statement and Prospectus contained allegedly materially false and misleading information, and failed to disclose that that ZTO Express (Cayman) Inc was improperly inflating its stated profit margins by keeping certain low-margin segments of its business out of its financial statements. The plaintiff alleges that ZTO Express (Cayman) Inc failed to disclose that it used a system of “network partners” to handle lower-margin pickup and delivery services, while maintaining ownership of core hub operations. By keeping the “network partners” businesses off its own books, the Company allegedly was able to exaggerate its profit margins to investors.

ZTO Express (Cayman) Inc. is an express delivery company in China that provides express delivery service through its nationwide network, as well as other value-added logistics services.

On October 27, 2016, ZTO Express (Cayman) Inc conducted a public offering of 72,100,000 American Depository Shares (“ADSs”) at a price of $19.50 per share, raising $1.4 billion (the “Offering”). ZTO Express (Cayman) Inc’s registration statement and prospectus filed with the U.S. Securities and Exchange Commission in support of the Offering presented a highly positive picture of ZTO’s business, performance, prospects, and acreage, while omitting crucial realities. ZTO Express (Cayman) Inc specifically emphasized its strong operating leverage, superior profitability, and rapid growth. However, according to the investigation ZTO Express (Cayman) Inc failed to disclose that it was improperly inflating its stated profit margins far above industry norms by keeping low-margin segments of its business out of its financial statements.

ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) declined of over 32% from the IPO price