Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Parcel volume in Q1 accelerated, posting growth of 13% Y/Y, and Revenue was up 22%</li>
<li>But Cost of Revenue grew even faster due to an increase in Key Account (KA) customers</li>
<li>With Net Income growth of just 5%, and unchanged guidance, little to excite investors</li>
</ul>


Parcel volume in Q1 accelerated, posting growth of 13% Y/Y, and Revenue was up 22%
But Cost of Revenue grew even faster due to an increase in Key Account (KA) customers
With Net Income growth of just 5%, and unchanged guidance, little to excite investors


ZTO Express Q126: Volume, Revenue Accelerate, But Net Profit Lags as 'Key Accounts' Crush Margins

<ul>
<li>Core Adjusted EBITDA margins worsened again in Q425, down -650 bps Y/Y</li>
<li>FY26 guidance calls for tepid volume growth (10-13% Y/Y), slower than in FY25</li>
<li>ZTO focus has shifted from growth to higher rates of shareholder returns</li>
</ul>


Core Adjusted EBITDA margins worsened again in Q425, down -650 bps Y/Y
FY26 guidance calls for tepid volume growth (10-13% Y/Y), slower than in FY25
ZTO focus has shifted from growth to higher rates of shareholder returns


ZTO Express Q425 Results | Margins Declined Again | Focus No Longer On Growth, Just Capital Returns

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>ZTO’s reported net profit increased 3% YoY to RMB9.08bn in 2025.</li><li>Core net profit, based on our calculation, was down 6% YoY to RMB9bn, which is 3% below our estimate but 3% above Bloomberg consensus.</li><li>ZTO introduced the parcel volume growth guidance of 10-13% for 2026, which it believes is higher than the industry average.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTO’s reported net profit increased 3% YoY to RMB9.08bn in 2025.Core net profit, based on our calculation, was down 6% YoY to RMB9bn, which is 3% below our estimate but 3% above Bloomberg consensus.ZTO introduced the parcel volume growth guidance of 10-13% for 2026, which it believes is higher than the industry average.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

ZTO Express (ZTO US/2057 HK) - 2026 Volume Growth Guidance: Up 10-13%...

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>China consumption shows rebounding demand following appreciation in asset values and home appliance subsidies. A record number of parcels were delivered last week, while home appliance sales grew rapidly;</li>
<li>We’ve raised 4Q estimates for online shopping growth given the recent demand trends which we expect to sustain through the quarter, so long as stimulus remains forthcoming;</li>
<li>JD and BABA remain our top ecommerce picks given their exposure to recent home appliance subsidies, as well as benefiting from a longer-term improvement in consumer sentiment.</li>
</ul>


China consumption shows rebounding demand following appreciation in asset values and home appliance subsidies. A record number of parcels were delivered last week, while home appliance sales grew rapidly;
We’ve raised 4Q estimates for online shopping growth given the recent demand trends which we expect to sustain through the quarter, so long as stimulus remains forthcoming;
JD and BABA remain our top ecommerce picks given their exposure to recent home appliance subsidies, as well as benefiting from a longer-term improvement in consumer sentiment.


Old E-Commerce Names Are The Biggest Winners of New Stimulus

<ul>
<li>Update on the US postage fraud case we reported on earlier: it's far more expansive than previously reported, and last week the judge ordered that the trial begin in August</li>
<li>A new report from the US Congress attacks Temu, SHEIN on two fronts: Xinjiang-made goods and de minimus imports; tighter enforcement or new legislation could soon follow</li>
<li>It's unclear how the postage fraud case and growing Congressional concerns will play out; worst-case, both could dramatically undermine the direct-to-US consumer business model</li>
</ul>


Update on the US postage fraud case we reported on earlier: it's far more expansive than previously reported, and last week the judge ordered that the trial begin in August
A new report from the US Congress attacks Temu, SHEIN on two fronts: Xinjiang-made goods and de minimus imports; tighter enforcement or new legislation could soon follow
It's unclear how the postage fraud case and growing Congressional concerns will play out; worst-case, both could dramatically undermine the direct-to-US consumer business model


New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

China

ZTO Express (Cayman) Inc. operates as an express delivery company. The Company provides express delivery service through their nationwide network, as well as other value-added logistics services. ZTO Express serves customers globally.

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ZTO Express Cayman (ZTO US)

ZTO Express Q126: Volume, Revenue Accelerate, But Net Profit Lags as 'Key Accounts' Crush Margins

ZTO in Q126 reported faster volume and Revenue growth in Q126, but Net Income growth lagged, up just 5% Y/Y. We blame increased exposure to 'Key...

Tracking Traffic

ZTO Express Q425 Results | Margins Declined Again | Focus No Longer On Growth, Just Capital Returns

On March 17 ZTO reported Q425 results that showed a steep decline in profitability, and a possible shift to higher rates of returns to shareholders

Tracking Traffic

ZTO Express (ZTO US/2057 HK) - 2026 Volume Growth Guidance: Up 10-13%...

ZTO introduced the parcel volume growth guidance of 10-13% for 2026, which it believes is higher than the industry average.

CMB International

Old E-Commerce Names Are The Biggest Winners of New Stimulus

China's consumption seeing increased demand for home appliances and online shopping, leading to record parcel deliveries. JD and BABA are top...

Blue Lotus Research Institute

New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

We offer an update on a fascinating criminal case set to go to trial next month, plus we outline big risks posed by criticisms of Temu and SHEIN by...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ZTO Express Q126: Volume, Revenue Accelerate, But Net Profit Lags as 'Key Accounts' Crush Margins

ZTO in Q126 reported faster volume and Revenue growth in Q126, but Net Income growth lagged, up just 5% Y/Y. We blame increased exposure to 'Key...

Tracking Traffic

ZTO Express Q425 Results | Margins Declined Again | Focus No Longer On Growth, Just Capital Returns

On March 17 ZTO reported Q425 results that showed a steep decline in profitability, and a possible shift to higher rates of returns to shareholders

Tracking Traffic

ZTO Express (ZTO US/2057 HK) - 2026 Volume Growth Guidance: Up 10-13%...

ZTO introduced the parcel volume growth guidance of 10-13% for 2026, which it believes is higher than the industry average.

CMB International

Old E-Commerce Names Are The Biggest Winners of New Stimulus

​China's consumption seeing increased demand for home appliances and online shopping, leading to record parcel deliveries. JD and BABA are top...

Blue Lotus Research Institute

New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

We offer an update on a fascinating criminal case set to go to trial next month, plus we outline big risks posed by criticisms of Temu and SHEIN by...

Tracking Traffic

China's consumption seeing increased demand for home appliances and online shopping, leading to record parcel deliveries. JD and BABA are top...