Core Viewpoint - ZTO Express (02057) is expected to be a preferred stock in the transportation industry over the next 3 to 6 months, with a target price increase from HKD 187 to HKD 197, maintaining a "Buy" rating according to Morgan Stanley [1] Company Performance - ZTO Express reported a package volume of 9.57 billion items in Q3, representing a year-on-year growth of 9.8% [1] - The adjusted net profit increased by 5.0% to RMB 2.51 billion, while revenue reached RMB 11.86 billion, reflecting a year-on-year growth of 11.1% [1] - Operating cash flow was recorded at RMB 3.21 billion [1] Industry Trends - The management of ZTO Express indicated that anti-involution policies are fundamentally reshaping the competitive landscape, shifting the industry focus from quantity-driven growth to an emphasis on quality and profitability [1] - Morgan Stanley believes that ZTO Express is benefiting significantly from current industry developments, as it continues to expand market share while demonstrating robust profit performance [1]

Core Viewpoint - JPMorgan's research report indicates that ZTO Express will continue to be a preferred stock in the transportation industry over the next 3 to 6 months, raising its target price for H-shares from HKD 187 to HKD 197 and for US shares from USD 24 to USD 25, maintaining a "Buy" rating [1] Group 1 - ZTO Express is benefiting from the current industry development, showing a clear increase in market share while demonstrating robust profit performance [1] - The management's recent comments highlight that anti-involution policies are fundamentally reshaping the competitive landscape, shifting the industry focus from quantity-driven growth to an emphasis on quality and profitability [1]

Group 1 - ZTO Express (02057) reported a 4% increase in stock price, reaching HKD 13.62, with a trading volume of HKD 15.42 million [1] - For Q3 2025, ZTO Express's revenue and adjusted net profit grew by 11% and 7% year-on-year, respectively, with adjusted net profit per order at approximately RMB 0.27, an improvement from RMB 0.21 in Q2 [1] - The company is expected to benefit from the implementation of industry anti-competition policies, with regulatory bodies likely to enforce price floors to curb vicious price competition [1] Group 2 - Zhejiang Securities reported that the company completed 9.57 billion express deliveries in Q3 2025, a year-on-year increase of 9.8%, capturing a market share of 19.4% [2] - The growth momentum in the parcel business remains strong, with a nearly 50% year-on-year increase, contributing positively to profits [2] - The company adjusted its annual guidance, forecasting parcel volumes for 2025 to be between 38.2 billion and 38.7 billion, representing a year-on-year growth of 12.3% to 13.8% [2]

Group 1 - Zhongtong Express-W (02057.HK) experienced a rise of over 4%, specifically increasing by 4.92% to reach HKD 13.62 per share [1] - The trading volume for Zhongtong Express-W was reported at HKD 15.4211 million [1]

Group 1 - ZTO Express reported a 11% year-on-year increase in revenue and a 7% increase in adjusted net profit for Q3 2025, with adjusted net profit per order at approximately 0.27 RMB, improving from 0.21 RMB in Q2 [1] - The company’s core per order cost increased by only 0.02 RMB due to the launch of a new transit center, indicating operational efficiency [1] - The expectation of continued implementation of anti-competition policies in the industry is likely to support ZTO's market share recovery in 2026, leading to a slight upward revision of net profit forecasts for 2025 and 2026 by 2% [1] Group 2 - In Q3 2025, ZTO Express completed 9.57 billion parcels, representing a year-on-year growth of 9.8%, with a market share of 19.4% [2] - The growth momentum in the piece business remains strong, with a nearly 50% year-on-year increase, contributing positively to profits [2] - The company adjusted its annual guidance, forecasting parcel volume for 2025 to be between 38.2 billion and 38.7 billion, reflecting a year-on-year growth of 12.3% to 13.8% [2]

Group 1 - ZTO Express reported a 4% increase in stock price, reaching HKD 13.62, with a trading volume of HKD 15.42 million [1] - For Q3 2025, ZTO Express's revenue and adjusted net profit grew by 11% and 7% year-on-year, respectively, with adjusted net profit per order at approximately RMB 0.27, an improvement from RMB 0.21 in Q2 [1] - The company’s core per-order cost increased by only RMB 0.02 due to the launch of a new transit center, indicating operational efficiency [1] Group 2 - ZTO Express completed 9.57 billion parcels in Q3 2025, a year-on-year increase of 9.8%, capturing a market share of 19.4% [2] - The growth in the parcel business remains strong, with a nearly 50% year-on-year increase, contributing positively to profits [2] - The company adjusted its annual guidance, projecting parcel volume for 2025 to be between 38.2 billion and 38.7 billion, representing a year-on-year growth of 12.3% to 13.8% [2] - The adjusted net profit per order for Q3 2025 was RMB 0.26, slightly down from RMB 0.27 in Q3 2024, but up by RMB 0.05 from Q2 2025 [2] - A second round of price increases post-National Day is expected to support express delivery prices during the peak season [2]

Market Performance - The three major U.S. stock indices closed higher, with the Dow Jones up 0.44%, the S&P 500 up 1.55%, and the Nasdaq Composite up 2.69% [1] - Large-cap tech stocks saw significant gains, with Tesla and Google both rising over 6% [1] Sector Highlights - Semiconductor stocks performed strongly, with Broadcom's stock increasing by 11%, marking its largest gain since April, adding $178 billion to its market capitalization [1] - The Philadelphia Semiconductor Index rose by 4.6%, with Micron Technology up nearly 8%, AMD up over 5%, and Nvidia up over 2% [1] Chinese Stocks - The Nasdaq Golden Dragon China Index increased by 2.82%, with notable gains in popular Chinese concept stocks [1] - Key performers included WeRide up 14.72%, Pony.ai up 12.51%, and Canadian Solar up 10.16% [1] - Other significant increases were seen in Daqo New Energy up 8.89%, Global Data up 8.38%, Baidu up 7.44%, and Bilibili up 6.80% [1]

Core Viewpoint - The company reported its Q3 2025 performance, showing a revenue increase but a decline in adjusted net profit, indicating mixed operational results amidst a competitive market environment [1][2]. Financial Performance - For the first three quarters of 2025, the company achieved a revenue of 34.588 billion yuan, a year-on-year increase of 10.3%, while the adjusted net profit was 6.818 billion yuan, down 8.1% [1]. - In Q3 2025, the company generated a revenue of 11.865 billion yuan, reflecting an 11.1% year-on-year growth, with an adjusted net profit of 2.506 billion yuan, up 5.0% [1]. Operational Metrics - In Q3 2025, the company handled a total of 9.573 billion express packages, marking a 9.8% year-on-year increase, with a strong growth trend in scattered package business, which grew nearly 50% year-on-year [1]. - The company's market share in Q3 was approximately 19.4%, a slight decrease of 0.6 percentage points year-on-year and 0.1 percentage points quarter-on-quarter, maintaining the leading position in the industry [1]. Pricing and Cost Structure - The average revenue per package in Q3 2025 was 1.15 yuan, up 2.3% year-on-year and 3.2% quarter-on-quarter, attributed to industry price improvements driven by "anti-involution" measures [2]. - The cost per package in Q3 2025 was approximately 0.59 yuan, down 8.5% year-on-year, with line-haul transportation costs at 0.34 yuan (down 12.7%) and sorting costs remaining stable at 0.25 yuan [2]. Profitability and Cash Flow - The adjusted net profit per package in Q3 2025 was 0.262 yuan, down 4.3% year-on-year but up 25.6% quarter-on-quarter, indicating improved profitability trends [2]. - The operating cash flow per package was 0.335 yuan, down 6.0% year-on-year, reflecting challenges in cash generation [2]. Growth Outlook - The company revised its full-year package volume growth target to 12.3% to 13.8%, down from a previous forecast of 14% to 18%, emphasizing a focus on quality and market share expansion [2]. - The company aims for sustainable growth while maintaining healthy profitability amidst evolving market dynamics [2]. Industry Trends - The express delivery industry is expected to evolve towards healthier competition due to ongoing "anti-involution" efforts, with growth potential remaining strong, particularly in the context of e-commerce expansion [3]. - The shift from quantity to quality in service delivery is anticipated to reshape the competitive landscape, with a focus on improving operational efficiency and customer satisfaction [3]. Profit Forecast - The adjusted net profit projections for the company from 2025 to 2027 are 9.870 billion yuan, 11.273 billion yuan, and 12.526 billion yuan, reflecting a slight decline in 2025 followed by growth in subsequent years [3].

Core Viewpoint - ZTO Express (Cayman) Inc. is currently viewed as a better value opportunity compared to TFI International Inc. based on various financial metrics and analyst outlooks [1]. Valuation Metrics - ZTO has a forward P/E ratio of 12.18, significantly lower than TFII's forward P/E of 20.28, indicating ZTO may be undervalued [5]. - The PEG ratio for ZTO is 3.93, while TFII's PEG ratio is 4.86, suggesting ZTO has a more favorable earnings growth outlook relative to its price [5]. - ZTO's P/B ratio stands at 1.25, compared to TFII's P/B of 2.68, further indicating ZTO's stock may be undervalued relative to its book value [6]. Analyst Outlook - ZTO holds a Zacks Rank of 2 (Buy), reflecting a positive earnings estimate revision trend, while TFII has a Zacks Rank of 5 (Strong Sell), indicating a less favorable outlook [3]. - The solid earnings outlook for ZTO, combined with its favorable valuation metrics, positions it as the superior value option in the current market [7].

Investment Rating - The report upgrades the investment rating of ZTO Express to "Buy" [6] Core Views - In Q3 2025, ZTO Express achieved a revenue of RMB 11.86 billion, a year-on-year increase of 11.1%, with an adjusted net profit of RMB 2.51 billion, reflecting a 5.0% increase year-on-year [1][2] - The growth in express delivery revenue was driven by a 9.8% increase in package volume and a 1.7% increase in average price per package [1] - The company anticipates a total package volume for 2025 to be between 38.2 billion and 38.7 billion, representing a year-on-year growth of 12.3% to 13.8% [2] Summary by Sections Q3 2025 Performance - Adjusted net profit increased by 5.0% year-on-year to RMB 2.51 billion, with a revenue of RMB 11.86 billion [1] - The express delivery business generated RMB 11.02 billion in revenue, up 11.6% year-on-year, supported by a 9.8% increase in package volume [1][2] Operational Data - The company completed 9.57 billion express deliveries in Q3 2025, a 9.8% increase year-on-year, capturing a market share of 19.4% [2] - The number of collection and delivery points exceeded 31,000, with approximately 10,000 owned vehicles [2] Revenue and Cost Analysis - The core revenue per package was RMB 1.22, an increase of RMB 0.02 year-on-year, with cost efficiencies leading to a reduction in sorting and transportation costs [3] - The adjusted net profit per package was RMB 0.26, slightly down from RMB 0.27 in Q3 2024, but improved by RMB 0.05 from Q2 2025 [3] Profit Forecast - ZTO Express is expected to focus on network stability and competitive advantages, with projected net profits for 2025-2027 at RMB 9.62 billion, RMB 11.02 billion, and RMB 12.08 billion respectively [4]