Core Viewpoint - Zheshang Securities upgraded ZTO Express (02057) to a "Buy" rating, citing robust Q3 performance with simultaneous volume and price growth in the context of "anti-involution" [1] Financial Performance - In Q3 2025, ZTO achieved revenue of RMB 11.86 billion, a year-on-year increase of 11.1%, with a gross profit of RMB 2.96 billion and an adjusted net profit of RMB 2.51 billion, up 5.0% year-on-year [1] - The express delivery business revenue reached RMB 11.02 billion, reflecting a year-on-year growth of 11.6%, driven by a 9.8% increase in package volume and a 1.7% rise in unit price [1] - Cash flow from operating activities was RMB 3.2 billion, remaining stable year-on-year, with capital expenditures of RMB 1.19 billion [1] Market Position and Growth - In Q3 2025, the company completed 9.57 billion express deliveries, a year-on-year increase of 9.8%, capturing a market share of 19.4% [2] - The volume of scattered goods business grew nearly 50% year-on-year, contributing positively to profits [2] - The annual package volume forecast for 2025 is adjusted to between 38.2 billion and 38.7 billion, representing a year-on-year growth of 12.3% to 13.8% [2] Network and Infrastructure - As of September 30, 2025, ZTO had over 31,000 collection and delivery points and approximately 6,000 direct network partners [3] - The company operates around 10,000 self-owned trunk vehicles and has 95 sorting centers, 91 of which are operated by the company [3] Pricing and Cost Management - The core unit revenue in Q3 2025 was RMB 1.22, an increase of RMB 0.02 year-on-year, with a rise in key account customer pricing offsetting some cost impacts [4] - The combined sorting and transportation costs per unit decreased by RMB 0.05, attributed to improved transportation cost efficiency [4] - The management expense ratio remained stable at 5.3% of revenue [4] - The first round of price increases has covered over 90% of regions, with a second round expected post-National Day, supporting express delivery prices during the peak season [4]