ZTO EXPRESS(US:ZTO) HTSC·2025-05-22 13:35Investment 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]