Group 1 - The core viewpoint of the report is that Daiwa has upgraded ZTO Express (02057) from "Outperform" to "Buy" and raised the target price from HKD 155 to HKD 180 [1] - The firm believes that ZTO's lower package volume growth target, combined with an improved industry pricing environment, will drive a reassessment of the stock [1]

Group 1 - The core viewpoint of the report is that ZTO Express (02057) experienced a year-on-year growth of 16.5% in express delivery volume in the second quarter, indicating strong operational performance [1] - The report suggests that there may be surprises in the average unit price over the next 6 to 12 months, which could act as a catalyst for the stock price [1] - The earnings forecast for ZTO Express for the years 2025 to 2027 has been slightly adjusted upwards by 1% to 2%, and the target price has been raised from HKD 174 to HKD 187, while maintaining a "Buy" rating [1]

招银国际发布研报称，次季中通快递-W(02057)的快递量同比增长16.5%，招银国际仍认为未来6至12个 月平均单价或有惊喜，可能成为股价催化剂。该行将中通2025至2027年年盈利预测微调1%至2%，目标 价从174港元上调至187港元，维持"买入"评级。 ...

Core Viewpoint - The express delivery sector is currently undervalued, with continuous growth in the e-commerce market and new demands emerging from lower-tier markets and reverse logistics, indicating strong resilience in industry demand [1] Group 1: Industry Performance - The express delivery industry remains robust, with July 2025 revenues reaching 120.64 billion yuan and business volume at 16.40 billion pieces, reflecting year-on-year growth of 8.9% and 15.1% respectively [1] - From January to July 2025, the cumulative express delivery revenue was 839.42 billion yuan, up 9.9% year-on-year, while the cumulative business volume reached 112.05 billion pieces, increasing by 18.7% [1] - SF Express leads the industry with July 2025 revenue of 18.657 billion yuan and business volume of 1.377 billion pieces, and from January to July 2025, it achieved a market share increase of 0.5 percentage points [1] Group 2: Demand and Pricing Dynamics - The express delivery sector benefits from strong demand resilience, driven by trends such as smaller package sizes, increasing reverse logistics, and the advantages of lower-tier markets, with industry volume growth significantly outpacing retail sales growth [2] - The trend towards lighter and smaller packages, along with intensified price competition, has impacted the average revenue per package, leading to a more competitive pricing environment [2] Group 3: Regulatory Environment - The State Post Bureau's emphasis on "anti-involution" aims to foster healthy price competition within the express delivery industry, reducing the likelihood of a return to the severe price wars seen in 2020 [3] - As price increases are gradually implemented across various regions, the profitability per package for express delivery companies is expected to improve, enhancing the market position of leading firms [3]

大和发布研报称，中通快递-W(02057)管理层对于快递持续涨价仍感到乐观，相信在推行反内卷政策 后，行业价格可逐步复苏。相信行业价格趋势改善可将推动重估，将其评级从"跑赢大市"上调至"买 入"，目标价也从155港元上调至180港元。 ...

智通财经APP获悉，大和发布研报称，中通快递-W(02057)管理层对于快递持续涨价仍感到乐观，相信 在推行反内卷政策后，行业价格可逐步复苏。相信行业价格趋势改善可将推动重估，将其评级从"跑赢 大市"上调至"买入"，目标价也从155港元上调至180港元。 ...

Investment Rating - The report upgrades the investment rating of ZTO Express-W to "Buy" from "Accumulate" [4][7]. Core Insights - ZTO Express-W reported a revenue of 11.8 billion yuan for Q2 2025, a year-on-year increase of 10.3%, while the adjusted net profit was 2.1 billion yuan, down 26.8% year-on-year [1][4]. - For the first half of 2025, the company achieved a revenue of 22.7 billion yuan, reflecting a 9.8% year-on-year growth, with an adjusted net profit of 4.3 billion yuan, down 14.3% year-on-year [1][4]. - The adjusted net profit per ticket for Q2 2025 was 0.21 yuan, a decrease of 0.12 yuan year-on-year, while the adjusted net profit per ticket for the first half of 2025 was 0.23 yuan, down 0.09 yuan year-on-year [1][4]. - The gross margin for Q2 2025 was 24.9%, a decline of 8.9 percentage points year-on-year, and for the first half of 2025, it was 24.8%, down 7.2 percentage points year-on-year [1][4]. Summary by Sections Revenue and Profitability - The core revenue for Q2 2025 was 1.18 yuan per ticket, down 0.06 yuan year-on-year, primarily due to increased incentives and a decrease in average ticket weight [2]. - The operating cost per ticket for Q2 2025 was 0.89 yuan, an increase of 0.07 yuan year-on-year, with other costs rising by 134.9% [2]. Market Share and Guidance - The package volume for Q2 2025 was 9.85 billion pieces, a year-on-year increase of 16.5%, with a market share of 19.5%, showing a 0.6 percentage point increase quarter-on-quarter [3]. - The company has lowered its full-year package volume guidance to a range of 38.8 billion to 40.1 billion pieces, corresponding to an annual growth rate of 14.0% to 18.0% [3]. Capital Expenditure and Dividends - Capital expenditure for the first half of 2025 was 3.1 billion yuan, with expectations for 2025 to remain flat or slightly decrease [3]. - The interim dividend declared was 0.3 USD per share, with a payout ratio of 40% [3]. Earnings Forecast - The expected EPS for 2025, 2026, and 2027 are 11.10, 12.07, and 13.28 yuan per share, respectively, with corresponding P/E ratios of 12.74, 11.73, and 10.66 [4][5].

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company achieved a revenue of 118.3 billion yuan in Q2 2025, representing a year-on-year growth of 10.3%, while adjusted net profit decreased by 26.8% to 20.5 billion yuan [1][2] - The increase in revenue was driven by a 16.5% year-on-year growth in business volume, reaching 9.85 billion packages, despite a 4.7% decline in average revenue per package due to increased subsidies and lighter package weights [2] - The company has adjusted its full-year package volume growth target to 14%-18% from the previous 20%-24% due to changes in the economic and competitive landscape [3] Summary by Sections Performance Review - In Q2 2025, the company reported a revenue of 118.3 billion yuan, a 10.3% increase year-on-year, while adjusted net profit fell by 26.8% to 20.5 billion yuan [1] Operational Analysis - The revenue growth of 10.3% in Q2 was attributed to a 16.5% increase in business volume, totaling 9.85 billion packages, although the average revenue per package decreased by 4.7% [2] - The company’s market share was 19.5%, showing a slight year-on-year decline of 0.1 percentage points but an increase of 0.6 percentage points quarter-on-quarter [2] Cost Management - The core cost per package decreased by approximately 0.07 yuan, with transportation costs down by 0.06 yuan due to improved economies of scale and lower oil prices [3] - The gross margin fell by 8.9 percentage points year-on-year to 24.9%, and the adjusted net profit margin also decreased by 8.9 percentage points to 17.3% [3] Profit Forecast and Valuation - The report forecasts the company's net profit for 2025-2027 to be 9 billion yuan, 9.7 billion yuan, and 10.6 billion yuan respectively, maintaining the "Buy" rating [4]

Group 1 - The core viewpoint of the report indicates that ZTO Express's stock price has significantly lagged behind its A-share listed peers since July, primarily due to investor expectations regarding its lower sensitivity to profit from rising average express delivery prices [1] - Management remains optimistic about the continued price increases in the express delivery sector, believing that the industry's prices can gradually recover following the government's anti-involution policies [1] - In response to the slight negative impact of rising express delivery prices on package volume, the company has revised its full-year package volume growth forecast from a range of 20% to 24% down to a range of 14% to 18% [1] Group 2 - Consequently, the forecast for ZTO's earnings per share for 2025 to 2026 has been adjusted downward by 0.4% to 10% to reflect the anticipated decrease in package volume [1] - The report suggests that improvements in industry pricing trends could drive a revaluation of the company, with the rating upgraded from "outperform" to "buy" and the target price increased from 155 HKD to 180 HKD [1]

Summary of ZTO Express Conference Call Company Overview - **Company**: ZTO Express (中通快递) - **Period**: Q2 2025 Key Industry Insights - The express delivery industry experienced a **17.3% year-over-year growth** in Q2 2025, indicating robust market dynamics [2][3]. - ZTO's parcel volume grew by **16.5%**, reaching **9.85 billion parcels**, slightly below the industry average [2][3]. Financial Performance - ZTO's **adjusted net income** was **RMB 2.05 billion**, reflecting a **26.8% decrease** due to intense market competition and price declines [2][14]. - **Total revenue** increased by **10.3%** to **RMB 11.8 billion**, driven by volume growth despite a **4.7% decline** in average selling price (ASP) [14]. - **Total cost of revenue** rose to **RMB 8.9 billion**, marking a **25.1% increase** from the previous year [14]. - **Gross profit** decreased by **18.7%**, with a gross margin drop of **8.9 points** to **24.9%** [14][15]. Operational Strategies - ZTO focused on **optimizing volume structure**, which contributed **RMB 0.17** in revenue and **RMB 0.02** in gross profit per unit for the core express delivery business [2][6]. - **Digitization and intelligent operations** led to a **RMB 0.07** per unit cost reduction in transportation and sortation [2][7]. - The company is enhancing its competitive edge through: 1. Optimizing network policies and costs [8][11]. 2. Deploying automation in sorting and transportation [8]. 3. Engaging with scattered parcel customers to increase revenue [8]. 4. Strengthening digital operations for efficient resource allocation [8]. Market Trends - A shift towards **light and small parcels** was noted, with more merchants opting for economical delivery services [4]. - ZTO's retail parcel volume grew over **50% year-over-year**, now accounting for over **8%** of total volume [5]. Future Outlook - ZTO revised its annual guidance for parcel volume growth to **14% to 18%**, lower than initial expectations [15]. - The company anticipates that **pricing dynamics** and **macroeconomic uncertainties** will impact future growth [15]. - ZTO remains confident in the long-term growth prospects of China's logistics industry, emphasizing the importance of **digitalization** and **intelligent operations** [9][13]. Technological Advancements - ZTO has integrated **AI tools** across various business segments, enhancing operational efficiency and service quality [16][19]. - The implementation of a **3D digital twin model** at central hubs has reduced management personnel by one-third and decreased error rates by over **60%** [17][18]. Pricing and Competition - Recent price adjustments in the industry are viewed as a **rational return** to sustainable pricing, with the lowest price in Guangdong now at **RMB 1.40** per unit [22][32]. - The company expects a more stable pricing environment moving forward, driven by rational market behavior [23][29]. Shareholder Returns - ZTO plans to maintain robust shareholder returns, considering both dividends and share repurchases [26][28]. Conclusion - ZTO Express is navigating a competitive landscape with a focus on operational efficiency, technological integration, and strategic pricing adjustments to ensure sustainable growth and shareholder value amidst evolving market conditions [10][34].