ZTO EXPRESS(2057.HK)：IMPROVING EARNINGS VISIBILITY AMIDST SUSTAINED INDUSTRY ANTI-INVOLUTION-格隆汇

机构：中银国际
研究员：Raphael CHEN/Dolores Tang

Core express delivery revenue accelerated to +12% YoY in 3Q25,beating consensus by 2% and was contributed by underperformed+10% YoY parcel volume but outperformed +2% YoY ASP due toindustry anti-involution. Adj. NPM still beat streets’ expectationexcluding one-off income tax refund. We expect Co. to be the mainbeneficiary to gain volume share and generate high quality profitablegrowth amidst sustained government anti-involution on solidified coreedges. Along with its committed 40% semi annual dividend payoutpolicy and buyback executions, we maintain BUY and raised TP forADR to US$25.0 based on 13.0x 2026E adj. PER.
Key Factors for Rating
Sustained government anti-involution accelerates industryconsolidation. We deem industry-wide anti-involution initiated by governmentwill sustain in coming quarters and will accelerate industry consolidation. Weforecast industry express volume will decelerate to 7% YoY in 2026 and Co. willgain market share on its solidified core edges. In addition, we deem Co. willdynamically adjust its operational strategies to pursue order scale withsustainable profitable growth amidst changing competition landscape. Thus, werevise down our FY2025-27E industry volumes by 2-10% and keep Co.’s sharelargely unchanged (gaining share in 2026-27E) while nudging up our FY2025-27E ASP forecasts by 4-9%. Our increased FY2025-27E bottom line forecastsmainly reflect raised GPM estimates due to healthier competition brought bysustained industry anti-involution.
3Q25 profit beat. Total revenue and core express delivery revenue loggedaccelerated +11%/ +12% YoY, in line with/ 2% above consensus respectively.+10% YoY parcel volume of 9.6bn fell below consensus by -4% and alsounderperformed +13% YoY industry growth, with volume share losing 0.1pptQoQ to 19.4%. While core express ASP resumed back to +2% or 2 cents YoY,benefitted by +50% YoY KA volume expansion which was partially offset byhigher volume incentives and lower average weight per parcel. 24.9% GPM wasstable QoQ. Excluding one-off RMB375.8m income tax refund, adj. NPM was17.8%, still beating consensus of 16.9%. Co. continuously guided down itsFY2025 parcel volume to grow by 12%-14% YoY (vs previous 14%-18%) to38.2bn-38.7bn mainly due to government anti-involution initiatives. Co. hasUS$0.7bn remaining buyback quota till June 2026 under their US$2.0bn buybackplan.
Key Risks for Rating
Downside risks: i) weak macro and eCommerce consumptions; ii) intensecompetition especially irrational price war; iii) destructive investments; iv)dampened partnerships with key regional network partners; and v) ADRdelisting.Valuation
We roll over to 2026E estimates. Maintain BUY and raised our TP for ADR toUS$25.0 based on 13.0x adj. EPADS of US$1.90 in FY2026E.