Core Insights - ZTO Express reported first-quarter 2025 earnings of 37 cents per share, matching the previous year's quarter, while total revenues of $1.50 billion fell short of the Zacks Consensus Estimate of $1.67 billion but showed year-over-year improvement [1] Financial Performance - The core express delivery business revenue increased by 9.8% year over year, driven by a 19.1% growth in parcel volume, despite a 7.8% decrease in parcel unit price [3] - Adjusted net income for the quarter was $2.3 billion, with retail volume increasing by 46% year over year [2] - Gross profit decreased by 10.4% from the year-ago quarter, with gross margin falling to 24.7% from 30.1% [4] Operational Highlights - ZTO achieved a parcel volume of 8.5 billion during the first quarter [2] - KA revenues, generated by direct sales organizations, surged by 129.3%, attributed to an increase in e-commerce return parcels [3] - Revenue from freight forwarding services declined by 11.6% year over year due to falling cross-border e-commerce pricing [3] Cash and Share Repurchase Program - As of the end of the first quarter, ZTO had cash and cash equivalents of $1.71 billion, down from $1.84 billion at the end of the previous quarter [5] - The board approved an increase in the share repurchase program to $2 billion, extending the effective period through June 30, 2025 [5][6] Guidance - ZTO reaffirms its 2025 parcel volume guidance of 40.8 billion to 42.2 billion, indicating a year-over-year growth of 20-24% [7]

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company reported a revenue of 10.89 billion RMB for Q1 2025, representing a year-on-year growth of 9.4%. The net profit attributable to shareholders was 1.99 billion RMB, up 39.8% year-on-year, primarily due to the impact of asset impairment losses in the same period last year. The adjusted net profit was 2.21 billion RMB, showing a slight increase of 0.5% year-on-year [1][4] - The company aims to increase its business volume and market share as its primary goal for 2025, despite facing short-term pressure from price competition in the industry. The company, as an industry leader, is expected to capture more market share by lowering per-package prices [1][4] Summary by Sections Revenue and Profitability - In Q1 2025, the company achieved a total express package volume of 8.54 billion pieces, a year-on-year increase of 19.1%, although slightly below the industry growth rate of 21.6%. The market share decreased by 0.4 percentage points to 18.9%, maintaining the top position in the industry. The average revenue per package was 1.25 RMB, down 7.8% year-on-year [1][2] - The company’s per-package cost decreased by 0.4% year-on-year to 0.94 RMB, benefiting from the growth in package volume. However, the adjusted per-package net profit fell by 14.7% year-on-year to 0.26 RMB, primarily due to the decline in per-package revenue [3] Financial Forecasts - The net profit forecast for 2025 has been revised down to 8.18 billion RMB, reflecting a 17% decrease from previous estimates. The target price has been adjusted down by 19% to 160.1 HKD (20.5 USD) based on a PE ratio of 14.5x for 2025E [4][6] - The company is expected to generate revenues of 52.41 billion RMB in 2025, with a projected growth rate of 18.35%. The net profit attributable to shareholders is forecasted to be 8.18 billion RMB, reflecting a decrease of 7.25% year-on-year [10][19] Market Dynamics - The domestic express delivery industry is experiencing intense price competition, leading to an increase in the proportion of low-value or loss-making packages. The company is responding by lowering per-package prices to secure market volume and maintain its competitive edge [2][4] - The company has expanded its presence in the return package market and continues to collaborate with e-commerce platforms and corporate clients, resulting in a 46% year-on-year growth in its scattered package business volume [2]

Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company reported a revenue of 10.89 billion RMB for Q1 2025, representing a year-on-year growth of 9.4%. The net profit attributable to shareholders was 1.99 billion RMB, up 39.8% year-on-year, primarily due to the impact of asset impairment losses in the same period last year [1][2] - The company aims to increase its business volume and market share despite facing short-term pressure from price competition in the industry. The company is expected to leverage its position as an industry leader to capture market share by lowering per-package prices [1][4] - The company’s market share decreased by 0.4 percentage points to 18.9%, while the average revenue per package fell by 7.8% to 1.25 RMB due to intense price competition [1][2] Financial Performance Summary - In Q1 2025, the company achieved a total express package volume of 8.54 billion pieces, a year-on-year increase of 19.1%, slightly below the industry growth rate of 21.6% [1][2] - The adjusted net profit per package for Q1 2025 was 0.26 RMB, down 14.7% year-on-year, primarily due to the decline in per-package revenue [3] - The company’s total revenue for 2025 is projected to be 52.41 billion RMB, with a year-on-year growth rate of 18.35% [10] Profit Forecast and Valuation - The net profit forecast for 2025 has been revised down to 8.18 billion RMB, reflecting a 17% decrease from previous estimates due to the competitive pricing environment [4] - The target price has been adjusted to 160.1 HKD (20.5 USD), a 19% reduction from the previous target price of 197.6 HKD (25.4 USD) [4][6] - The company is valued at a PE ratio of 14.5x for 2025E, which is a discount compared to its historical average due to increased industry competition [4]

Investment Rating - The investment rating for ZTO Express (2057.HK) is "Buy" [1] Core Views - The report highlights that ZTO Express achieved an adjusted net profit of 2.259 billion yuan in Q1 2025, representing a year-on-year increase of 1.6%. The operating cash flow net amount was 2.363 billion yuan, up 16.3% year-on-year [2][3] - The company reported a revenue of 10.892 billion yuan in Q1 2025, which is a 9.4% increase compared to the same period last year. The express service revenue was 10.122 billion yuan, reflecting a 9.5% year-on-year growth [3][4] - ZTO Express handled 8.539 billion parcels in Q1 2025, marking a 19.1% year-on-year increase, maintaining a market share of approximately 18.9%, which is the highest in the industry [3][4] Financial Performance - In Q1 2025, the adjusted net profit was 2.259 billion yuan, with a year-on-year growth of 1.6%. The adjusted net profit attributable to the parent company was 2.213 billion yuan, up 0.5% year-on-year [3] - The single ticket express revenue decreased by 8.0% year-on-year to 1.19 yuan, attributed to intensified industry competition and changes in cargo structure [4] - The single ticket express cost was approximately 0.68 yuan, down 12.0% year-on-year, benefiting from improved economies of scale and route optimization [4] Growth Outlook - ZTO Express aims for a package volume guidance of 40.8 billion to 42.2 billion parcels in 2025, representing a year-on-year growth of 20% to 24%, which is expected to further consolidate its leading market position [5] - The report suggests that the express delivery industry still has significant growth potential, driven by the expansion of e-commerce and the rise of live-streaming commerce [6][7] - The company is expected to maintain a strong cash flow and profitability, with adjusted net profit forecasts for 2025-2027 at 10.324 billion, 11.655 billion, and 13.388 billion yuan, respectively [8]

Investment Rating - The report maintains a "Strong Buy" rating for ZTO Express [4][3]. Core Views - The company reported a business volume of 8.54 billion pieces in Q1 2025, a year-on-year increase of 19.1%, but market share decreased by 0.4 percentage points to 18.9% [1]. - The focus for 2025 will shift towards increasing market share, with a target business volume of 40.8 to 42.2 billion pieces, representing a year-on-year growth of 20-24% [1]. - The company experienced a decline in single-ticket revenue, dropping from 1.36 CNY in Q1 2024 to 1.25 CNY in Q1 2025, primarily due to increased subsidies and a decrease in single-ticket weight [2]. - Operating expenses significantly decreased to 283 million CNY in Q1 2025 from 735 million CNY in Q1 2024, largely due to government subsidies and tax refunds [2]. - The competitive landscape is intensifying, with a strategy shift back to prioritizing market share, which may lead to slower profit growth in the short term [3]. Financial Projections - The projected net profit for 2025 is 9.52 billion CNY, with corresponding P/E ratios of 10.9X, 9.2X, and 8.2X for 2025, 2026, and 2027 respectively [3]. - Revenue is expected to grow from 38.42 billion CNY in 2023 to 49.90 billion CNY in 2025, reflecting a growth rate of 12.68% [8]. - The net profit margin is projected to be 19.24% in 2025, with a return on equity (ROE) of 15.94% [8].

Investment Rating - The investment rating for ZTO Express (2057.HK) is "Buy" [1] Core Views - The report highlights that ZTO Express achieved an adjusted net profit of 2.259 billion yuan in Q1 2025, representing a year-on-year increase of 1.6%. The operating cash flow net amount was 2.363 billion yuan, up 16.3% year-on-year [2][3] - The company reported a total revenue of 10.892 billion yuan in Q1 2025, which is a 9.4% increase compared to the same period last year. The express service revenue was 10.122 billion yuan, reflecting a 9.5% year-on-year growth [3][4] - ZTO Express handled 8.539 billion parcels in Q1 2025, marking a 19.1% increase year-on-year, maintaining a market share of approximately 18.9%, which is the highest in the industry [3][4] Financial Performance - In Q1 2025, the adjusted net profit was 2.259 billion yuan, with a year-on-year growth of 1.6%. The adjusted net profit attributable to the parent company was 2.213 billion yuan, up 0.5% year-on-year [3] - The single ticket express revenue was 1.19 yuan, down 8.0% year-on-year, attributed to intensified industry competition and changes in cargo structure [4] - The single ticket express cost was approximately 0.68 yuan, down 12.0% year-on-year, benefiting from improved economies of scale and optimized route planning [4] Market Position and Growth Outlook - ZTO Express aims for high-quality volume growth, targeting a parcel volume of 40.8 billion to 42.2 billion in 2025, which represents a year-on-year increase of 20% to 24% [5] - The report indicates that the express delivery industry still has significant growth potential, driven by the expansion of e-commerce and the rise of live-streaming commerce [6] - The company is expected to maintain its leading market position and achieve steady growth in both volume and profit due to its scale and management advantages [8] Profit Forecast and Valuation - The forecast for adjusted net profit attributable to the parent company for 2025-2027 is 10.324 billion yuan, 11.655 billion yuan, and 13.388 billion yuan, with year-on-year growth rates of 2.42%, 12.89%, and 14.87% respectively [8] - The report emphasizes that ZTO Express's current valuation is at a historically low level, suggesting potential for significant upside [7][8]

Investment Rating - The report maintains a "Strong Buy" rating for ZTO Express (02057.HK) [4][3] Core Views - The company reported a business volume of 8.54 billion pieces in Q1 2025, a year-on-year increase of 19.1%, but market share decreased by 0.4 percentage points to 18.9% [1] - The company aims to focus on increasing market share in 2025, despite facing pressure on revenue due to price wars [1][3] - The single ticket revenue decreased by 0.11 CNY, primarily due to increased subsidies and a decline in average weight per ticket [2] - The company’s core costs per ticket showed a notable decrease, with transportation costs dropping from 0.47 CNY to 0.41 CNY [2] - Operating expenses significantly decreased due to government subsidies and tax refunds, totaling 283 million CNY in Q1 2025 compared to 735 million CNY in Q1 2024 [2] Summary by Sections Business Performance - In Q1 2025, ZTO Express achieved a business volume growth of 19.1%, although this was slightly below the industry growth rate of 21.6% [1] - The company maintains its guidance for a total business volume of 40.8 to 42.2 billion pieces for 2025, representing a year-on-year growth of 20-24% [1] Revenue and Costs - The single ticket revenue fell to 1.25 CNY in Q1 2025 from 1.36 CNY in Q1 2024, influenced by increased subsidies and a decrease in ticket weight [2] - The core cost per ticket remained stable at 0.94 CNY, with a reduction in transportation and sorting costs [2] Strategic Focus - The company is shifting its strategy back to prioritizing market share over profitability in response to intensified price competition [3] - The report anticipates that while market share may recover, profit growth will slow down due to ongoing price wars [3] Financial Forecast - The projected net profits for ZTO Express from 2025 to 2027 are 95.2 billion CNY, 112.0 billion CNY, and 126.4 billion CNY, with corresponding P/E ratios of 10.9X, 9.2X, and 8.2X [3][8]

Group 1: Company Insights - Northern Huachuang (002371 CH, Buy, Target Price: 512 RMB) is expected to see a 25% year-on-year increase in new orders in 2024, driven by strong demand for integrated circuit equipment, with this momentum continuing into Q1 2025 [2] - Baidu (BIDU US, Buy, Target Price: 144.6 USD) reported Q1 2025 core business revenue of 25.5 billion RMB, exceeding Bloomberg consensus by 10%, primarily due to strong cloud business performance [2][6] - Weibo (WB US, Buy, Target Price: 14.5 USD) reported Q1 2025 revenue of 397 million USD, flat year-on-year, but non-GAAP net profit grew 12% to 120 million USD, exceeding expectations by 26% [6] - Palo Alto Networks (PANW US, Buy, Target Price: 229.7 USD) achieved Q3 FY25 revenue growth of 15.3% to 2.3 billion USD, with non-GAAP net profit rising 23% to 560.9 million USD [6] - ZTO Express (ZTO US / 2057 HK, Buy, Target Price: 22.2 USD / 174 HKD) reported Q1 2025 core net profit growth of 5% to 1.96 billion RMB, supported by government subsidies [6][8] - XPeng Motors (XPEV US / 9868 HK, Buy, Target Price: 28 USD / 110 HKD) exceeded Q1 2025 revenue expectations, driven by improved gross margins and government subsidies [6][8] Group 2: Market Performance - The Hang Seng Index closed at 23,828, up 0.62% for the day and 39.77% year-to-date [3] - The Hang Seng Tech Index closed at 5,342, up 0.51% for the day and 41.92% year-to-date [3] - The Shanghai Composite Index closed at 3,388, up 0.21% for the day and 13.87% year-to-date [3] - The US Dow Jones closed at 41,860, down 1.91% for the day but up 11.07% year-to-date [3] - The S&P 500 closed at 5,845, down 1.61% for the day and up 22.53% year-to-date [3] Group 3: Sector Analysis - The Hong Kong stock market saw gains in materials, healthcare, and energy sectors, while defensive sectors like consumer staples and utilities lagged [5] - In the US market, real estate and healthcare sectors faced the largest declines, while consumer staples and materials outperformed [5] - The report indicates that the period from May to July is a critical window for US-China trade negotiations, with expectations of potential fiscal stimulus and consumption-boosting measures from China [5]

Core Insights - ZTO Express's 1Q25 core net profit increased by 5% YoY to RMB1.96 billion, primarily supported by government subsidies and tax rebates amounting to RMB407 million, which are likely to be one-off in nature [1][2] - The average selling price (ASP) dropped by 8% YoY to RMB1.25 per parcel, while parcel volume grew by 19% YoY to 8.54 billion units, indicating a lag behind the industry average [1][3] - The company has revised its earnings forecast for 2025E-27E down by 18-21% due to lower parcel ASP assumptions and has adjusted its target price to US$22.2/HK$174 [1] Financial Performance - Core net profit growth of 5% was driven by a 9% revenue increase but offset by a 25% YoY contraction in unit gross profit to RMB0.31 per parcel [2] - Reported net profit grew by 40% YoY to RMB1.99 billion, largely due to a low base from the previous year [2] - EBIT increased by 6% YoY, primarily aided by government subsidies and tax rebates [2] Cost Structure - Unit cost decreased by 0.4% YoY to RMB0.94 per parcel, with transportation costs dropping by 13% YoY to RMB0.41 per parcel due to economies of scale and lower diesel prices [4] - Unit cost of sorting hubs fell by 10% YoY to RMB0.27, benefiting from increased automation [4] - Other unit costs surged by 61% YoY to RMB0.25 per unit, attributed to rising key account costs [4] Market Position - ZTO's market share in 1Q25 was 18.9%, reflecting a decline of 0.4 percentage points YoY [3] - The company may need to adopt a more aggressive pricing strategy to enhance market share moving forward [3]

Group 1 - The core viewpoint of the article highlights that ZTO Express reported a revenue of 10.892 billion yuan for Q1 2025, representing a year-on-year growth of 9.4%, and an adjusted net profit of 2.259 billion yuan, up 1.6%, which aligns with expectations [1] - The volume of business completed by the company reached 8.539 billion pieces, a year-on-year increase of 19.1%, slightly below the industry growth rate of 21.6%. The volume of scattered goods increased by 46% year-on-year, significantly outpacing the overall business volume growth, driven by the company's expansion in the returns sector and deepening collaborations with e-commerce platforms and corporate clients [1] - The company is optimistic about the continued growth of its scattered goods business due to the implementation of its corner-to-corner policy and the expansion of its service station coverage [1] Group 2 - In Q1 2025, the company's single ticket distribution cost was 0.27 yuan per ticket, down 0.03 yuan year-on-year, while the single ticket transportation cost was 0.41 yuan per ticket, down 0.06 yuan, indicating a core cost reduction of 0.09 yuan [2] - The company's operational capabilities and cost efficiency are improving, allowing it to maintain performance resilience amid increasing industry competition. The company expects a business volume growth rate of 20%-24% for 2025 [2] - The profit forecast for the company has been slightly adjusted downwards, with expected adjusted net profits for 2025-2027 being 9.54 billion, 10.53 billion, and 12.05 billion yuan respectively, reflecting a year-on-year growth of -6%, 10%, and 14% [2]