Core Viewpoint - Cathay Securities has given ZTO Express (02057) an "Accumulate" 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: Business Model and Network Stability - The "co-building and sharing" concept was introduced by ZTO Express in 2010, and by 2015, the company had transitioned some major franchisees into shareholders, making it the first and only company in the express delivery sector to do so. This alignment of interests has fostered trust and stability within the network, contributing to ZTO's leadership in the industry [2]. Group 2: Investment in Core Assets - Since 2013, ZTO Express has benefited from significant early investments in sorting and other equipment, along with effective network management, leading to a steady increase in market share. By 2016, the company achieved a market share of 14.4%, and it has continued to invest in core assets (land, facilities, vehicles, sorting equipment) while maintaining efficient network management, securing its position as the industry leader [3]. Group 3: Balanced Development - The company focuses on achieving a balance between business volume, market share growth, and profitability, while effectively managing costs. Following improvements in the industry landscape, ZTO has successfully increased both business volume and profit per shipment [4]. Group 4: Financial Forecast and Investment Recommendations - Cathay Securities projects ZTO Express's revenue for 2025-2027 to be HKD 471.07 billion, HKD 516.85 billion, and HKD 577.06 billion, representing year-on-year growth of 6%, 10%, and 12%, respectively. The net profit attributable to shareholders is expected to be HKD 95.65 billion, HKD 106.33 billion, and HKD 119.29 billion, with year-on-year growth of 8%, 11%, and 12%. The estimated EPS for these years is 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 the "Accumulate" rating [5].