Summary of ZTO Express 2Q25 Earnings Call Company Overview - Company: ZTO Express (ZTO.N) - Industry: Transportation & Infrastructure - Market: Hong Kong/China Key Financial Metrics - 2Q25 Non-GAAP Net Income: Rmb2.05 billion, down 27% YoY, compared to market expectations of Rmb2.29 billion [2] - Operating Cash Flow: Rmb4.5 billion in 1H25, down from Rmb5.5 billion in 1H24 [3] - Capital Expenditures (Capex): Rmb3.1 billion in 1H25 [3] - Total Revenue for 2Q25: Rmb11.83 billion, up 10.3% YoY [9] - Gross Profit Margin: 24.9%, down from 33.8% YoY [9] - Operating Profit Margin: 20.9%, down from 30.0% YoY [9] - Net Income: Rmb1.94 billion reported, with a YoY decrease of 26.8% [9] Market Performance - Market Share: 19.5%, a slight decrease of 0.1 percentage points YoY [3] - Parcel Volume Outlook for 2025: Revised to 38.8-40.1 billion parcels, down from 40.8 billion, representing a growth of 14-18% YoY [3] Revenue and Cost Analysis - Parcel Revenue Growth: 11% YoY to Rmb11.7 billion, driven by a 16.5% YoY increase in volume [7] - Average Selling Price (ASP): Core ASP decreased by 4.7% YoY [7] - Unit Cost: Increased by Rmb0.07 YoY, primarily due to higher KA costs [7] - Gross Profit (GP): Decreased by 19% YoY, indicating higher costs than expected [7] - Operating Profit (OP): Decreased by 23% YoY [7] Strategic Insights - Management Discussion: Focused on market outlook, competition strategy, and profitability [7] - Interim Payout Ratio: Remained at 40%, in line with expectations [7] - Risks: Potential upside from anti-involution initiatives, but full-year estimates are lower than consensus [7] Valuation and Price Target - Current Stock Price: US$19.74 as of August 19, 2025 [5] - Price Target: US$24.60, indicating a potential upside of 25% [5] - Market Capitalization: Rmb112.32 billion [5] - Estimated EPS: Expected to be Rmb10.54 for FY25 [5] Conclusion ZTO Express reported a significant decline in profits for 2Q25, leading to a downward revision of its full-year volume targets. Despite a modest revenue growth, the company faces challenges with rising costs and competitive pressures. The management's focus on strategic initiatives and market outlook will be crucial for navigating these challenges moving forward.
中通快递：2025 年二季度利润不及预期，全年业务量目标下调-ZTO Express-2Q25 Profits Miss, Full-Year Volume Target Trimmed