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ZTO Express (ZTO)
NYSE:ZTO
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ZTO Express
(NYSE:ZTO)
Rating:79Outperform
Price Target:
$22.00
▲(21.08%Upside)
Positive Factors
Market Confidence
The inclusion of ZTO H-share in the Hang Seng index could support the share price in the near term.
Parcel Volume Growth
ZTO achieved 19% year-over-year growth in parcel volumes in the first four months of the year, indicating strong performance despite a recent slowdown.
Valuation and Dividend
Analyst reiterates a Buy rating on ZTO given attractive valuation at 10.6x FY25 P/E and above-sector average dividend.
Negative Factors
Industry Competition
A projected 10% decline in adjusted net profit for FY25 reflects ongoing industry price competition.
Investor Returns
The pace of share buyback could be delayed, posing a risk to investor returns.
Market Share Loss
ZTO has been losing market share by 0.4-2ppt YoY due to aggressive competition from small peers.
ZTO Express (ZTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.51B
Dividend Yield3.8%
Average Volume (3M)1.69M
Price to Earnings (P/E)11.7
Beta (1Y)0.51
Revenue Growth13.41%
EPS Growth10.00%
CountryUS
Employees24,477
SectorIndustrials
Sector Strength89
IndustryIntegrated Freight & Logistics
Share Statistics
EPS (TTM)0.34
Shares Outstanding598,368,470
10 Day Avg. Volume1,502,416
30 Day Avg. Volume1,687,660
Financial Highlights & Ratios
PEG Ratio1.58
Price to Book (P/B)1.62
Price to Sales (P/S)0.00
P/FCF Ratio11.29
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.16Price Target Upside21.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
ZTO Express Business Overview & Revenue Model
Company DescriptionZTO Express (ZTO) is a leading express delivery company based in China, specializing in providing comprehensive logistics services. Established in 2002, ZTO operates primarily in the express delivery sector, offering a wide range of services including parcel and package delivery, freight forwarding, and supply chain solutions. The company is known for its extensive network and advanced technology integration, which enable efficient and reliable delivery services across China and internationally.
How the Company Makes MoneyZTO Express makes money through its core business of express delivery services. The company's primary revenue streams are derived from last-mile delivery services for e-commerce platforms, business-to-business (B2B) logistics solutions, and freight forwarding. ZTO charges customers based on the weight and size of parcels, delivery distance, and service speed. A significant portion of ZTO's revenue comes from partnerships with major e-commerce giants like Alibaba and JD.com, which rely on ZTO's logistics network for timely delivery of goods. Additionally, ZTO generates income from value-added services such as warehousing, inventory management, and supply chain consulting, further enhancing its revenue potential.
ZTO Express Earnings Call Summary
Earnings Call Date:May 20, 2025
(Q3-2024)
| % Change Since: 3.83%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong growth in parcel volume and profitability, driven by strategic partnerships and cost efficiencies. However, challenges such as price competition and a revised growth outlook indicate pressures from market conditions. The sentiment is mixed with a balance of positive growth metrics and strategic challenges.Q3-2024 Updates
Positive Updates
Parcel Volume Growth
ZTO's total parcel volume reached 8.72 billion, representing a 15.9% year-over-year growth.
Adjusted Net Profit Increase
The adjusted net profit for the quarter was CNY 2.39 billion, maintaining profitability ahead of peers.
Retail Parcel Growth
Retail parcels grew over 40% year-over-year, driven by partnerships with e-commerce platforms.
Revenue Increase
Total revenue increased 17.6% to CNY 10.7 billion.
Cost Efficiency Gains
Unit cost of line-haul transportation decreased by 9.7%, and unit sorting costs decreased by 6.4%.
Gross Profit and Margin Improvement
Gross profit increased by 23.2% to CNY 3.3 billion, and gross profit margin improved by 1.4 points to 31.2%.
Negative Updates
Price Competition Pressure
The optimization of revenue structure was needed to alleviate pressure due to price competition.
Revised Parcel Volume Guidance
Parcel volume for 2024 is revised to be in the range of 333 billion to 339 billion, indicating a slowdown in growth.
Challenges from Low-Value E-commerce Packages
The increasing proportion of low-value e-commerce packages presents new challenges to the corporate strategy.
Increased SG&A Expenses
SG&A expenses, excluding stock-based compensation, increased by 0.2 percentage points.
Company Guidance
During the third quarter of 2024 earnings call for ZTO Express, the company's leadership provided comprehensive guidance on their financial performance and strategic direction. The call highlighted a 15.9% year-over-year growth in parcel volume, reaching 8.72 billion parcels, and an adjusted net profit of CNY 2.39 billion. The total revenue increased by 17.6% to CNY 10.7 billion, with the gross profit margin improving to 31.2%. The guidance for the full year indicated an expected parcel volume between 333 billion to 339 billion, representing an 11.6% to 12.3% increase year-over-year. The focus was on maintaining service quality and profitability while adapting pricing strategies to stimulate high-volume daily average customers, particularly in the low-price e-commerce segment. The company also emphasized its strategic initiatives, including enhancing last-mile delivery systems and leveraging fintech tools to improve operational efficiency.ZTO Express Financial Statement Overview
Summary
ZTO Express demonstrates strong financial performance with a solid upward trajectory in revenue and robust profit margins. The balance sheet is favorable with low leverage, and cash flow is strong, indicating good financial flexibility. There is minor room for improvement in return on equity.Income Statement
ZTO Express demonstrates strong financial performance with a consistent upward trajectory in revenue, as seen in the TTM (Trailing-Twelve-Months) data. The gross profit margin is robust, and net profit margin is healthy, reflecting efficient cost management. The company shows solid EBIT and EBITDA margins, indicating strong operational performance.85
Very Positive
Balance Sheet
The balance sheet is solid with a favorable debt-to-equity ratio, indicating low leverage, which minimizes financial risk. The equity ratio is strong, showing a high proportion of owned assets. However, the return on equity is slightly moderate, suggesting room for improvement in generating profits from shareholders' investments.78
Positive
Cash Flow
ZTO Express exhibits strong cash flow generation with positive free cash flow growth and a solid operating cash flow to net income ratio. The company effectively converts its earnings into cash, which supports its financial flexibility. The free cash flow to net income ratio is also healthy, indicating efficient cash utilization.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 45.21B | 44.28B | 38.42B | 35.38B | 30.41B | 25.21B |
| Gross Profit | 13.40B | 13.72B | 11.66B | 9.04B | 6.59B | 5.84B |
| EBITDA | 12.57B | 15.04B | 13.85B | 11.15B | 5.87B | 5.20B |
| Net Income | 9.38B | 8.82B | 8.75B | 6.81B | 4.75B | 4.31B |
Balance Sheet | ||||||
| Total Assets | 93.15B | 92.34B | 88.47B | 78.52B | 62.77B | 59.20B |
| Cash, Cash Equivalents and Short-Term Investments | 23.02B | 22.31B | 19.89B | 17.45B | 12.57B | 17.90B |
| Total Debt | 17.08B | 17.35B | 15.44B | 13.12B | 4.44B | 2.51B |
| Total Liabilities | 30.28B | 29.67B | 28.18B | 24.05B | 13.84B | 10.11B |
| Stockholders Equity | 62.21B | 62.06B | 59.80B | 54.03B | 48.64B | 48.98B |
Cash Flow | ||||||
| Free Cash Flow | 9.11B | 5.53B | 6.69B | 4.07B | -2.11B | -4.26B |
| Operating Cash Flow | 11.76B | 11.43B | 13.36B | 11.48B | 7.22B | 4.95B |
| Investing Cash Flow | -6.76B | -5.98B | -12.25B | -16.04B | -8.76B | -3.55B |
| Financing Cash Flow | -5.39B | -5.00B | -769.84M | 7.06B | -2.90B | 8.34B |
ZTO Express Technical Analysis
Positive
18.17
Price Trends
17.90
Positive
18.55
Negative
19.61
Negative
Market Momentum
0.22
Negative
56.26
Neutral
55.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZTO, the sentiment is Positive. The current price of 18.17 is above the 20-day moving average (MA) of 17.88, above the 50-day MA of 17.90, and below the 200-day MA of 19.61, indicating a neutral trend. The MACD of 0.22 indicates Negative momentum. The RSI at 56.26 is Neutral, neither overbought nor oversold. The STOCH value of 55.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZTO.
ZTO Express Risk Analysis
ZTO Express disclosed 95 risk factors in its most recent earnings report. ZTO Express reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
ZTO Express Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $14.51B | 11.73 | 15.68% | 3.80% | 13.41% | 10.00% | |
75 Outperform | $56.06B | 13.89 | 14.69% | 2.51% | 0.27% | ― | |
74 Outperform | $15.52B | 18.82 | 37.70% | 1.36% | 24.07% | 27.40% | |
74 Outperform | $84.28B | 14.52 | 35.96% | 6.59% | 1.30% | -0.76% | |
70 Neutral | $11.52B | 23.19 | 32.11% | 2.56% | -0.22% | 65.52% | |
67 Neutral | $15.10B | 27.64 | 14.33% | 1.16% | -2.24% | ― | |
65 Neutral | $10.81B | 15.25 | 5.26% | 1.93% | 3.11% | -26.99% |
* Industrials Sector Average
Performance Comparison
ZTO
ZTO Express
18.17
-1.15
-5.95%
CHRW
CH Robinson
97.94
12.68
14.87%
EXPD
Expeditors International
112.93
-5.82
-4.90%
FDX
FedEx
228.75
-71.29
-23.76%
JBHT
JB Hunt
151.44
-7.67
-4.82%
UPS
United Parcel
99.63
-37.33
-27.26%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.