ZTO EXPRESS(US:ZTO) Sou Hu Cai Jing·2025-08-20 07:01Core Viewpoint - ZTO Express reported its Q2 financial results, showing a package volume of 9.847 billion, a year-on-year increase of 16.5%, but a net profit decrease of 24.8% year-on-year, leading to a downward revision of its annual package volume guidance due to economic and competitive pressures [1][6]. Financial Performance - In Q2, ZTO's revenue reached 11.832 billion RMB, a 10.3% year-on-year increase, while the total package volume for the first half of the year was 18.386 billion, up 17.7% year-on-year [1][3]. - The core express business revenue increased by 10.4% to 22.364 billion RMB, driven by a 17.7% increase in package volume, despite a 6.2% decline in package unit price [3][4]. - Total operating costs rose by 21.5% to 17.09 billion RMB, with significant increases in costs related to line haul, sorting center operations, and other expenses [3][4]. Market Dynamics - The express delivery industry is experiencing intense price competition, leading to lower-than-expected growth in some regions, particularly in areas heavily impacted by price wars [3][6]. - ZTO's management noted that the trend of increasing lightweight packages is evident, with many merchants opting for more economical delivery services, which has affected the company's pricing power [3][4]. Strategic Initiatives - ZTO is focusing on enhancing operational efficiency and service quality, with over 2,000 unmanned vehicles deployed across more than 700 locations, which have shown significant cost reduction benefits [4][5]. - The company is also collaborating with leading unmanned vehicle firms to accelerate the adoption of these technologies, aiming for standardized practices across the industry [5][7]. Industry Outlook - The overall express delivery industry is facing a slowdown, with a projected growth rate adjustment for ZTO's package volume from an earlier estimate of 40.8-42.2 billion to 38.8-40.1 billion for the year [6][7]. - ZTO's CEO emphasized the need for the industry to transition from price wars to value-based competition, advocating for a focus on service quality to ensure sustainable growth [6][7].