ZTO EXPRESS(ZTO) 招银国际·2024-05-17 00:32Investment Rating - The report maintains a "BUY" rating for ZTO Express with a target price of US21.39 [2][5]. Core Insights - ZTO Express has shifted its strategic focus to a profitable growth strategy in 1Q24, achieving a core net profit of RMB1.9 billion, which is a 23% year-over-year increase and represents 19% of the full-year forecast [2][3]. - The company aims for a parcel volume growth target of 15-18% for 2024, consistent with previous guidance, despite a higher industry growth forecast of 15-20% [2][3]. - ZTO's earnings growth is supported by a 10% year-over-year revenue increase, a 2.1 percentage point expansion in gross margin to 30.1%, and a significant increase in net finance income [3][5]. Financial Performance Summary - 1Q24 Results: Core net profit increased by 23% YoY to RMB1.9 billion, while reported net income decreased by 15% YoY to RMB1.4 billion due to an impairment of RMB478 million [3][8]. - Revenue Growth: Total revenue for 1Q24 was RMB9.96 billion, reflecting a 10.9% increase YoY [8]. - Parcel Volume: Parcel volume grew by 14% YoY to 7.2 billion units, which is below the industry average growth of 25% [3][8]. - Cost Management: Unit cost decreased by 5% YoY to RMB0.94 per parcel, with transportation costs down by 7% YoY [3][8]. - Earnings Forecast: The earnings forecast remains unchanged, with adjusted net profit expected to reach RMB9.74 billion for FY24, reflecting an 11.4% growth YoY [5][17]. Key Financial Metrics - Revenue Projections: Revenue is projected to grow from RMB38.42 billion in FY23 to RMB43.87 billion in FY24, representing a 14.2% growth [5][17]. - Earnings Per Share (EPS): Reported EPS is expected to be RMB11.67 for FY24, with a YoY growth of 11.4% [5][17]. - Price-to-Earnings Ratio (P/E): The P/E ratio is projected to be 13.2x for FY24, which is in line with historical averages [5][17]. - Dividend Yield: The expected dividend yield for FY24 is 3.0% [5][17].