Investment Rating - The report assigns a "Buy" rating for the company, marking the first coverage of the stock [2][51]. Core Insights - The company is positioned as a leading player in the express delivery industry, with a strong focus on scale and operational efficiency. It has implemented key strategies such as inter-provincial transportation, paid delivery fees, and shareholding reforms to enhance its competitive edge [9][13]. - The company has maintained a robust market share, with a 19.4% market share as of Q3 2025, reflecting a slight increase from 19.2% in H1 2025. The company has achieved a compound annual growth rate (CAGR) of 22.9% in net profit from 2021 to 2024 [9][16]. - The report forecasts significant revenue growth, projecting revenues of 48.87 billion yuan, 55.13 billion yuan, and 61.18 billion yuan for 2025, 2026, and 2027, respectively, alongside net profits of 9.69 billion yuan, 11.11 billion yuan, and 12.23 billion yuan for the same years [51]. Summary by Sections Company Overview - The company is recognized as a leading franchise express delivery service provider, achieving steady growth through strategic initiatives that have allowed it to outperform competitors [10][13]. - Key decisions such as the introduction of inter-provincial transportation and paid delivery fees have been pivotal in establishing the company as a market leader since 2016 [9][13]. Market Position and Performance - The company has a leading market share in the express delivery sector, with a 2025Q3 market share of 19.4%, up from 19.2% in H1 2025. The CAGR for express delivery volume from 2013 to 2024 was 37.0% [9][16]. - The company has demonstrated resilience in revenue growth, achieving a total revenue of 34.59 billion yuan in Q1-Q3 2025, reflecting a year-on-year growth of 10.3% [18]. Financial Projections - The report provides detailed financial forecasts, estimating revenues of 48.87 billion yuan, 55.13 billion yuan, and 61.18 billion yuan for 2025, 2026, and 2027, respectively, with corresponding net profits of 9.69 billion yuan, 11.11 billion yuan, and 12.23 billion yuan [51][50]. Competitive Advantages - The company benefits from significant scale effects and a comprehensive cost-reduction strategy, which positions it favorably against competitors. The report highlights the company's ability to maintain a lower per-package cost compared to peers, with a projected cost of 0.60 yuan per package in Q3 2025 [30][45]. - The company's focus on service quality and operational efficiency has allowed it to achieve higher average delivery prices compared to competitors, with an average terminal price of 2.43 yuan in November 2023 [41][44]. Investment Recommendations - The report emphasizes the company's strong management and operational capabilities, projecting continued market share expansion and profitability in the long term. The anticipated price-to-earnings (PE) ratios for 2025, 2026, and 2027 are 12.26, 10.69, and 9.71, respectively [51][52].

Investment Rating - The report assigns an "Outperform" rating with a target price of HKD 195.99, based on a 15x P/E for 2025 [4][14]. Core Insights - The "Same Building and Sharing" concept has established a stable foundation for the franchise network, contributing to the company's leading position in the industry [4][23]. - The company has shown steady revenue growth, with projected revenues of RMB 471.07 billion, RMB 516.85 billion, and RMB 577.06 billion for 2025, 2026, and 2027, respectively, reflecting year-on-year growth rates of 6%, 10%, and 12% [3][11]. - The net profit attributable to the parent company is expected to be RMB 95.65 billion, RMB 106.33 billion, and RMB 119.29 billion for the same years, with year-on-year growth rates of 8%, 11%, and 12% [3][11]. Financial Summary - Total revenue for 2023 is projected at RMB 38,419 million, increasing to RMB 44,281 million in 2024, and further to RMB 47,107 million in 2025, with a growth rate of 8.6% in 2023 and 15.3% in 2024 [3][13]. - Gross profit is expected to rise from RMB 11,663 million in 2023 to RMB 13,717 million in 2024, and then to RMB 13,571 million in 2025 [3]. - The company's P/E ratio is projected to decrease from 14.96 in 2023 to 12.25 in 2025, indicating a potential increase in valuation attractiveness [3][15]. Business Analysis - The company has maintained a leading market share in the express delivery sector, achieving a market share of 14.4% in 2016 and consistently holding the top position since then [4][23]. - The franchise model has been pivotal in the company's growth, allowing for efficient cost management and stable revenue generation [4][23]. - The report highlights the importance of early investment in core assets, which has contributed to the company's operational efficiency and market share growth [4][23]. Industry Overview - The express delivery industry is transitioning into a phase of moderate growth, with projected compound annual growth rates of 23.45% for business volume and 16.03% for revenue from 2017 to 2024 [36]. - The report notes that the industry is expected to reach a milestone of 1 trillion packages, driven by e-commerce growth and improved operational efficiencies [36].

Core Viewpoint - Cathay Securities gives ZTO Express (02057) a "Buy" rating with a target price of HKD 195.99, highlighting the company's "co-building and sharing" concept as a solid foundation for a stable franchise network, which will help maintain its leading position in the industry [1]. Group 1: "Co-Building and Sharing" Concept - ZTO Express introduced the "co-building and sharing" concept in 2010 and transitioned major franchisees to shareholders by 2015, becoming the first and only express delivery company to do so, aligning interests and establishing trust, which enhances network stability and supports its industry leadership [2]. Group 2: Early Capital Investment - Since 2013, ZTO Express has benefited from significant early investments in sorting and other equipment, coupled with effective network management, leading to a steady increase in market share, which reached 14.4% in 2016, and has maintained the top position in the industry through continued investment in core assets [3]. Group 3: Balanced Development of Volume, Profit, and Cost - The company focuses on growing business volume and market share while maintaining profitability and managing costs effectively, resulting in simultaneous increases in business volume and profit per shipment following improvements in the industry landscape [4]. Group 4: Profit Forecast and Investment Recommendations - The firm forecasts ZTO Express's revenue for 2025-2027 to be HKD 471.07 billion, HKD 516.85 billion, and HKD 577.06 billion, with year-on-year growth rates of 6%, 10%, and 12% respectively. Net profit is projected to be HKD 95.65 billion, HKD 106.33 billion, and HKD 119.29 billion, with corresponding EPS of HKD 11.89, HKD 13.22, and HKD 14.83. The target price of HKD 195.99 corresponds to a 15x P/E ratio for 2025, supporting a "Buy" rating [5].