Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company, ZTO Express, reported a revenue of 44.28 billion yuan for 2024, representing a year-on-year growth of 15.3%. The net profit attributable to shareholders was 8.82 billion yuan, a slight increase of 0.8%, while the adjusted net profit was 10.15 billion yuan, up 12.7% year-on-year [4][13][22] - In Q4 2024, the company achieved a revenue of 12.92 billion yuan, a year-on-year increase of 21.7%, with a net profit of 2.38 billion yuan, up 8.7% [4][13] - The express delivery volume for the company reached 34 billion pieces in 2024, a growth of 12.6%, contributing to a total express business revenue of 40.95 billion yuan, which is a 15.4% increase [5][14] - The company has focused on improving efficiency and reducing core costs, with unit transportation costs decreasing by 8.9% to 0.41 yuan [6][18] Financial Performance - The company forecasts a capital expenditure of approximately 5.2 billion yuan for 2025, continuing a downward trend, with expected business volume growth of 20%-24% [7][23] - Projected revenues for 2025-2027 are 54.50 billion yuan, 62.00 billion yuan, and 67.51 billion yuan, with year-on-year growth rates of 23.1%, 13.8%, and 8.9% respectively. The net profit for the same period is expected to be 10.81 billion yuan, 11.88 billion yuan, and 12.86 billion yuan, with growth rates of 22.6%, 9.9%, and 8.2% [7][10][23] - The company's price-to-earnings (P/E) ratios for 2025-2027 are projected to be 11.6X, 10.6X, and 9.8X, indicating a relatively low valuation [7][23] Operational Efficiency - The company has seen an increase in high-value packages and a reduction in core costs, with the overall gross profit rising by 17.6% to 13.72 billion yuan, and the gross margin improving by 0.6 percentage points to 31.0% [19][22]

Financial Performance - Total revenue for the year ended December 31, 2024, reached RMB 44,280,720, representing a 15.3% increase compared to RMB 38,418,915 in 2023[6] - Gross profit increased by 17.6% to RMB 13,717,092 in 2024, up from RMB 11,662,526 in 2023[6] - Net profit for the year was RMB 8,887,595, a slight increase of 1.5% from RMB 8,754,457 in 2023[6] - Adjusted net profit rose by 12.7% to RMB 10,150,359 in 2024, compared to RMB 9,005,920 in 2023[6] - Adjusted EBITDA increased by 15.9% to RMB 16,354,858 in 2024, up from RMB 14,107,290 in 2023[6] - Basic earnings per American depositary share increased by 12.4% to RMB 12.52 in 2024, compared to RMB 11.14 in 2023[6] - Diluted earnings per American depositary share rose by 11.9% to RMB 12.20 in 2024, compared to RMB 10.90 in 2023[6] - The net profit attributable to ordinary shareholders for 2023 was RMB 8,749,004, increasing to RMB 8,816,835 in 2024, representing a growth of 0.77%[14] - Adjusted net profit attributable to ordinary shareholders rose from RMB 9,000,467 in 2023 to RMB 10,079,599 in 2024, marking an increase of 11.99%[14] Revenue and Growth - Revenue increased from RMB 38,418.9 million in 2023 to RMB 44,280.7 million in 2024, reflecting a growth of 15.3% driven by deeper online consumption penetration[15] - The company’s revenue from express services increased by 15.7% from RMB 37,512.1 million in 2023 to RMB 43,395.3 million in 2024, driven by a 12.6% increase in package volume and a 2.7% rise in package price[31] - Total revenue for the year ended December 31, 2024, was RMB 44,280.7 million, up from RMB 38,418.9 million in 2023, representing a growth of 15.2%[29] Operating Costs and Expenses - Operating costs increased by 14.2% to RMB 30,563,628 in 2024, compared to RMB 26,756,389 in 2023[6] - Total operating expenses increased by 17.3% from RMB 1,654.6 million for the year ended December 31, 2023, to RMB 1,940.2 million for the year ended December 31, 2024[38] - The cost of materials sold increased by 26.9% from RMB 513.4 million for the year ended December 31, 2023, to RMB 651.7 million for the year ended December 31, 2024, in line with package volume growth[38] Cash Flow and Investments - Cash and cash equivalents, restricted cash, and short-term investments totaled RMB 13,465.4 million, RMB 37.5 million, and RMB 8,848.4 million, respectively, as of December 31, 2024[47] - The principal amount of outstanding bank loans was RMB 9,514.0 million as of December 31, 2024, up from RMB 7,766.0 million as of December 31, 2023[48] - The company incurred total capital expenditures of approximately RMB 5.9 billion for the year ended December 31, 2024, compared to RMB 6.7 billion for the year ended December 31, 2023[57] Corporate Governance - The board appointed Ms. Xie Fang as a member of the Nomination and Corporate Governance Committee, effective March 19, 2025, enhancing corporate governance[25] - The company has established four board committees to oversee specific aspects of its affairs, including an audit committee and a compensation committee[65] - The company has complied with all corporate governance codes, except for the separation of the roles of Chairman and CEO, which are held by the same individual[62] Shareholder Returns - The company declared a cash dividend of USD 0.35 per American Depositary Share and ordinary share for the six months ending December 31, 2024, with a payout ratio of 40%[26] - The company declared a cash dividend of $0.62 per share for the year ended December 31, 2023, totaling $500,134 (RMB 3,600,516) and a mid-term dividend of $0.35 per share for the six months ended June 30, 2024, totaling $282,239 (RMB 2,012,929)[112] Employee and Compensation - The total number of employees as of December 31, 2024, is 24,477, with the largest functional area being sorting, which accounts for 30.8% of the total[59] - Employee compensation costs for the year ended December 31, 2024, totaled RMB 3,392.6 million, an increase from RMB 3,226.5 million for the year ended December 31, 2023[59] - The company granted 916,200 stock options under the 2024 equity incentive plan with an exercise price of $21.88, which will vest over three years[107] Risk Management - The company does not foresee significant risks from interest rate fluctuations and has not used derivative financial instruments to manage interest rate risks[55] - The company has no significant contingent liabilities as of December 31, 2024[56] Future Outlook - The company plans to continue focusing on operational efficiency and market expansion strategies in the upcoming fiscal year[3] - The company expects total package volume for 2025 to be between 40.8 billion and 42.2 billion, reflecting a year-on-year growth of 20% to 24%[27] - The company aims to expand its service offerings to include a comprehensive ecosystem of logistics solutions, including express delivery, less-than-truckload (LTL) services, and cross-border logistics[18]

Financial Performance - Adjusted net profit for the fiscal year reached RMB 10.2 billion, an increase of 12.7%[9] - Revenue for Q4 was RMB 12.9 billion (USD 1.77 billion), up 21.7% from RMB 10.6 billion in the same period last year[13] - Net profit for Q4 was RMB 2.45 billion (USD 335.2 million), reflecting a 10.7% increase from RMB 2.21 billion in Q4 2023[13] - Total revenue for the fiscal year was RMB 44.28 billion (USD 6.07 billion), a 15.3% increase from RMB 38.42 billion in 2023[13] - Operating profit increased by 25.3% to RMB 3,453.2 million (USD 473.1 million), with an operating margin rising from 25.9% to 26.7%[25] - Net profit grew by 10.7% to RMB 2,446.8 million (USD 335.2 million), compared to RMB 2,209.8 million in the same period last year[28] - Adjusted net profit reached RMB 2,733.3 million (USD 374.5 million), up from RMB 2,214.4 million year-over-year[29] - Gross profit increased by 17.6% to RMB 13,717.1 million (USD 1,879.2 million), with a gross margin improvement from 30.4% to 31.0%[40] - Operating profit for Q4 2024 was RMB 3,453,171, a 25.3% increase compared to RMB 2,755,095 in Q4 2023[69] - Net profit for the year 2024 was RMB 8,887,595, reflecting a 1.5% increase from RMB 8,754,457 in 2023[69] Revenue Growth - Total package volume increased to 34 billion, representing a year-on-year growth of 12.6%[10] - Total revenue for Q4 2024 was RMB 12.92 billion (USD 1.77 billion), a 21.7% increase from RMB 10.62 billion in Q4 2023, driven by a 22.4% growth in core express service revenue[19] - The core express service revenue growth was supported by a 10.3% increase in average ticket price and an 11.0% increase in package volume[19] - The direct customer business revenue grew by 275.9%, driven by an increase in high-value packages from e-commerce platforms[19] - The company expects core express service revenue to grow by 15.7%, driven by a 12.6% increase in package volume and a 2.7% rise in unit price[35] - The company expects package volume for 2025 to be between 40.8 billion and 42.2 billion, representing a year-over-year growth of 20% to 24%[55] Operating Costs and Cash Flow - Operating cash flow for the fiscal year was RMB 11.43 billion (USD 1.57 billion), down from RMB 13.36 billion in 2023[13] - Operating costs for Q4 2024 totaled RMB 9.16 billion (USD 1.25 billion), a 22.3% increase from RMB 7.49 billion in the same period last year[20] - Total operating costs increased by 14.2% to RMB 30,563.6 million (USD 4,187.2 million) from RMB 26,756.4 million[36] - The net cash flow from operating activities was RMB 11,429.4 million (USD 1,565.8 million), down from RMB 13,361.0 million last year[50] - Cash flow from operating activities was RMB 2,806.3 million (USD 384.5 million), down from RMB 3,923.3 million in the previous year[32] Dividends and Share Repurchase - The company announced a semi-annual dividend of USD 0.35 per share[9] - The company declared a cash dividend of USD 0.35 per American Depositary Share for the six months ending December 31, 2024, with a payout ratio of 40%[53] - The company has repurchased shares totaling USD 1,222.0 million, with remaining funds available for repurchase amounting to USD 778.0 million[54] Company Operations and Strategy - ZTO Express is a leading and rapidly growing express delivery company in China, operating a highly scalable network partner model to support the fast growth of e-commerce in the country[64] - The company operates a network partner model that provides collection and last-mile delivery services while offering critical trunk transportation and sorting network services[64] - The company plans to achieve a business volume growth rate exceeding the industry average by 2025, targeting an industry growth rate of around 15%[17] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[69] Risks and Forward-Looking Statements - The company relies significantly on third-party e-commerce platforms, which poses inherent risks and uncertainties[67] - The earnings call will include forward-looking statements that may involve risks, including intense competition and potential service disruptions[67] - The company is subject to various risks that could materially affect its operating performance and market share[67] Financial Metrics and Comparability - The company emphasizes the importance of comparing non-GAAP financial metrics with the most directly comparable GAAP metrics, highlighting that adjusted EBITDA and net income should not be considered in isolation[59] - ZTO Express's financial metrics may not be directly comparable to those of other companies due to different calculation methods[59] - ZTO Express encourages investors to review the company's financial information comprehensively rather than relying on a single financial metric[59] Assets and Liabilities - Total assets increased to RMB 92,340,330 in 2024, up from RMB 88,465,221 in 2023, marking a growth of 4.3%[71] - Total liabilities increased to RMB 29,665,497 in 2024, up from RMB 28,184,813 in 2023, indicating a growth of 5.3%[71] - The company’s total equity reached RMB 62,674,833 in 2024, up from RMB 60,280,408 in 2023, reflecting a growth of 4.0%[71]

Investment Rating - Maintain "Overweight" rating [2][7][9] Core Views - Balanced growth in revenue and profit driven by rapid growth in scattered and reverse parcels [2][8] - Optimized unit costs through efficient route planning and improved loading rates [3][8] - Market share increased to 20.0% in 2024Q3, up 0.4 percentage points sequentially [3][9] Financial Performance - 2024Q3 revenue reached RMB 10.7 billion, up 17.6% YoY [2][8] - Express service revenue grew 18.1% YoY, accounting for 91.9% of total revenue [2][8] - Freight forwarding and material sales grew 0.8% and 27.6% YoY respectively [2][8] - 2024Q3 net profit reached RMB 2.38 billion, up 1.3% YoY [3][8] - 2024Q3 gross margin improved to 31.2%, up 1.4 percentage points YoY [3][8] - Operating margin slightly decreased to 26.6%, down 0.1 percentage points YoY [3][8] Operational Highlights - Parcel volume in 2024Q3 reached 8.72 billion, up 15.9% YoY [2][8] - Unit transportation cost decreased by 9.7% YoY [3][8] - Unit sorting center operating cost decreased by 6.4% YoY [3][8] - Direct customer business revenue (including delivery fees) surged 122.1% YoY [2][8] - Scattered parcels grew over 40% YoY [2][8] Market Data - Closing price (HKD): 151.9 [4] - Total shares outstanding: 810 million [4] - Market capitalization: HKD 123.1 billion [4] - Net assets attributable to parent company: RMB 60.6 billion [4] - Total assets: RMB 93.3 billion [4] - Net asset per share: RMB 74.8 [4] Financial Projections - 2024E revenue: RMB 43.24 billion, up 12.5% YoY [6] - 2024E net profit attributable to parent: RMB 9.503 billion, up 8.6% YoY [6][7] - 2025E net profit attributable to parent: RMB 11.124 billion, up 17.1% YoY [6][7] - 2026E net profit attributable to parent: RMB 12.519 billion, up 12.5% YoY [6][7] - 2024E-2026E EPS: RMB 11.88/13.91/15.66 [6]

Investment Rating - The report maintains a "Buy" rating for ZTO Express-W (02057) [4][6] Core Views - ZTO Express released its Q3 2024 results with revenue of RMB 10.675 billion, up 17.6% YoY, and adjusted net profit of RMB 2.39 billion, up 2.0% YoY [4] - The company's performance was slightly below expectations due to intense price competition during the off-season and strategic adjustments [4] - ZTO Express is shifting its strategy to prioritize market share, focusing on network policy optimization, enhancing network confidence, and accelerating scale advantages [5] - The company's cost structure improved, with single-ticket sorting costs decreasing by RMB 0.02 to RMB 0.25 and single-ticket transportation costs decreasing by RMB 0.04 to RMB 0.39 [5] - The report revised downward the company's profit forecasts for 2024-2026, with adjusted net profit expected to be RMB 10.104 billion, RMB 11.067 billion, and RMB 12.686 billion, respectively [6] Financial Performance and Forecasts - ZTO Express's business volume in Q3 2024 was 8.723 billion parcels, up 15.9% YoY, but lower than the industry average of 20.1% [5] - The company's single-ticket revenue increased by 2.6% YoY, driven by higher-value parcels and growth in direct customer business [5] - Revenue for 2024E is projected at RMB 42.704 billion, with an 11% YoY growth, while adjusted net profit is expected to grow 12% YoY to RMB 10.104 billion [6][8] - The company's market share is expected to decline slightly from 22.9% in 2023 to 21.3% in 2024E [11] - ZTO Express's PE ratio for 2024E is 11x, compared to the industry average of 15x, indicating potential upside [6] Strategic Adjustments and Market Position - ZTO Express is focusing on expanding its high-quality customer base through its parcel business, leveraging e-commerce platforms and reverse logistics partnerships [5] - The company is optimizing its cost structure through facility upgrades and standardization reforms, which have contributed to a core cost reduction of RMB 0.06 per ticket [5] - ZTO Express's strategy to regain market share includes stabilizing network policies, enhancing network confidence, and ensuring reasonable profitability [5]

Investment Rating - The report maintains a "Strong Buy" rating for ZTO Express (02057.HK) [6][10]. Core Insights - ZTO Express reported a business volume of 8.723 billion pieces in Q3 2024, representing a year-on-year growth of 15.9%, although its market share decreased by 0.7 percentage points to 20.0% [1]. - The company adjusted its annual business volume guidance for 2024 to between 33.7 billion and 33.9 billion pieces, with a projected Q4 volume of 9.35 to 9.55 billion pieces, indicating a growth rate of 7.5% to 9.8% [1]. - The increase in low-value e-commerce packages poses challenges to the company's strategy of achieving synchronized growth in service quality, business volume, and profits [1]. Summary by Sections Business Performance - In Q3, ZTO's single-package revenue was CNY 1.19, up 1.9% year-on-year, driven by an increase in direct customer revenue, particularly in the parcel business, which saw over 40% growth [2]. - The company’s single-package core cost decreased by approximately CNY 0.06 year-on-year, with transportation costs down 9.7% and sorting costs down 6.4% [2]. Profitability Metrics - The gross margin improved by 1.4 percentage points year-on-year to 31.2% in Q3, attributed to revenue growth and cost optimization [3]. - However, the net profit margin slightly declined due to increased operating expenses and tax fees [3]. Financial Forecast and Valuation - The report forecasts ZTO's net profit for 2024-2026 to be CNY 93.83 billion, CNY 117.18 billion, and CNY 133.70 billion, respectively, with corresponding P/E ratios of 12.5X, 10.0X, and 8.8X [3][7]. - ZTO's strong brand recognition and customer satisfaction allow it to maintain a premium on revenue, avoiding the pitfalls of industry cost competition [3].

Investment Rating - The investment rating for ZTO Express is "Buy" [1] Core Views - ZTO Express reported a package volume of 8.723 billion in Q3 2024, representing a year-on-year growth of 15.9% [1] - The adjusted net profit for Q3 2024 was 2.387 billion, showing a year-on-year increase of 2.0% [1] - The company aims to maintain high-quality service and customer satisfaction while regaining market share and expanding its leading position in package volume [1] Summary by Relevant Sections Package Volume - In Q3 2024, ZTO Express achieved a package volume of 8.723 billion, with a year-on-year growth of 15.9% [1] - The company expects to guide its total package volume to 33.7 billion for the year, reflecting a year-on-year increase of 11.6% [1] Pricing and Revenue - The core revenue per package (excluding freight forwarding) was 1.20 yuan, with a year-on-year increase of 1.83% [1] - The single-package core cost decreased by 0.06 yuan year-on-year, benefiting from economies of scale and operational efficiencies [1] Profitability - The adjusted net profit per package was 0.28 yuan, showing a year-on-year decline, primarily due to a tax refund received in Q3 2023 [1] - The company maintained a healthy operating cash flow per package at 0.36 yuan, despite a year-on-year decrease of 8.7% [1] Financial Forecasts - The projected net profit for the years 2024 to 2026 is expected to be 10.204 billion, 10.971 billion, and 12.521 billion respectively, with year-on-year growth rates of 16.63%, 7.52%, and 14.13% [2] - The expected revenue for 2024 is 43.179 billion, with a year-on-year growth rate of 12.39% [2] Market Outlook - The express delivery industry continues to have growth potential, with ZTO Express expected to steadily increase its market share [1] - The expansion of e-commerce and the rise of live-streaming commerce are anticipated to drive further growth in package volumes [1]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 183.64 HKD for the Hong Kong stock and 23.59 USD for the US stock, based on a 15x PE valuation for 2024 [6][4]. Core Insights - The company reported a revenue of 31.36 billion RMB for the first three quarters of 2024, representing a year-over-year increase of 12.8%. The net profit attributable to shareholders was 6.43 billion RMB, down 1.9% year-over-year, while the adjusted net profit increased by 9.2% to 7.42 billion RMB [2][3]. - In Q3 2024, the company achieved a revenue of 10.68 billion RMB, up 17.6% year-over-year, with a net profit of 2.40 billion RMB, reflecting a 2.2% increase year-over-year [2][3]. - The total business volume for the first three quarters reached 24.346 billion packages, a 13.3% increase year-over-year, with Q3 alone accounting for 8.723 billion packages, up 16.0% year-over-year [2][3]. Financial Performance Summary - The company's gross profit maintained a robust growth of 23.2% year-over-year in Q3, driven by improved service quality and customer satisfaction. The core revenue per package increased by 1.8%, despite a decline of 11.8% in industry average package prices [3]. - The company has optimized its business structure, leading to improved revenue and operating profit margins. However, the ongoing trend of smaller package sizes poses challenges to balancing service quality, volume, and overall profitability [3]. - The company plans to rebalance resource allocation and pricing strategies to regain business volume growth and enhance market share [3]. Earnings Forecast - The expected EPS for 2024, 2025, and 2026 are 11.31 RMB, 13.06 RMB, and 14.66 RMB respectively, with projected revenue growth rates of 12%, 14%, and 10% for the same years [4][5].

Investment Rating - The report maintains a "Buy" rating for ZTO Express (02057.HK) [1] Core Views - ZTO Express reported a revenue of 31.36 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 12.8%. The net profit for the same period was 6.44 billion yuan, a slight decline of 1.6% year-on-year. In Q3 2024, the company achieved a revenue of 10.68 billion yuan, with a year-on-year growth of 17.6%, and a net profit of 2.38 billion yuan, up 1.3% year-on-year [1] - The customer structure continues to optimize, leading to an increase in revenue per package. In Q3 2024, the revenue per package was 1.20 yuan, a year-on-year increase of 1.8%, driven by an increase in direct customer revenue [1] - The company has adjusted its full-year package volume growth forecast to between 11.6% and 12.3%, corresponding to 33.7 billion to 33.9 billion packages, due to current market conditions [1] Summary by Sections Performance Overview - For Q1-Q3 2024, ZTO Express achieved a revenue of 31.36 billion yuan, a 12.8% increase year-on-year, and a net profit of 6.44 billion yuan, down 1.6% year-on-year. Q3 2024 revenue was 10.68 billion yuan, up 17.6% year-on-year, with a net profit of 2.38 billion yuan, up 1.3% year-on-year [1] Operational Analysis - The company saw a 15.9% year-on-year increase in business volume in Q3 2024, reaching 8.72 billion packages. The market share decreased by 0.7 percentage points to 20% year-on-year but increased by 0.4 percentage points quarter-on-quarter [1] - The cost per package remained stable at 0.82 yuan, with transportation costs decreasing to 0.39 yuan and transfer costs to 0.25 yuan, contributing to a gross margin increase of 1.4 percentage points to 31.2% [1] Profit Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised down to 9.5 billion yuan, 11.5 billion yuan, and 13.1 billion yuan, respectively, from previous estimates of 10.5 billion yuan, 12.1 billion yuan, and 13.6 billion yuan. The "Buy" rating is maintained despite these adjustments [1]

Investment Rating - The report maintains a "Buy" rating for ZTO Express (02057.HK) [1] Core Views - ZTO Express reported a revenue of 31.36 billion yuan for the first three quarters of 2024, representing a year-on-year growth of 12.8%, while net profit decreased by 1.6% to 6.44 billion yuan. In Q3 2024, revenue reached 10.68 billion yuan, up 17.6% year-on-year, with net profit of 2.38 billion yuan, a 1.3% increase [1] - The company continues to optimize its customer structure, leading to an increase in average revenue per package. In Q3 2024, the average revenue per package was 1.20 yuan, up 1.8% year-on-year, driven by a higher proportion of direct customer revenue [1] - The company has adjusted its full-year package volume growth forecast to between 11.6% and 12.3%, corresponding to 33.7 billion to 33.9 billion packages, due to current market conditions [1] Summary by Sections Performance Overview - For Q1-Q3 2024, ZTO Express achieved a revenue of 31.36 billion yuan, a 12.8% increase year-on-year, and a net profit of 6.44 billion yuan, down 1.6%. Q3 alone saw revenue of 10.68 billion yuan, up 17.6%, and net profit of 2.38 billion yuan, up 1.3% [1] Operational Analysis - The company’s package volume reached 8.72 billion in Q3 2024, a 15.9% year-on-year increase, although market share slightly declined by 0.7 percentage points to 20% [1] - The cost per package remained stable at 0.82 yuan, with transportation costs decreasing to 0.39 yuan and transfer costs to 0.25 yuan, contributing to a gross margin increase of 1.4 percentage points to 31.2% [1] Profit Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised down to 9.5 billion yuan, 11.5 billion yuan, and 13.1 billion yuan respectively, from previous estimates of 10.5 billion yuan, 12.1 billion yuan, and 13.6 billion yuan [1]