ZTO Express Inc

ZTO Express (Cayman) Inc (NYSE: ZTO) is a China-based company principally involved in the provision of express delivery services through its nationwide network as well as other value-added logistics services. Its express delivery services mainly include parcel sorting and line-haul transportation. 

Recent Business and Financial Updates

• Overview of ZTO Express’s 2024 Financial and Operational Performance: ZTO Express (Cayman) Inc., a leading express delivery company in China, announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024, on March 18, 2025. The company achieved a significant 12.6% year-over-year increase in parcel volume, reaching 34.0 billion parcels, while maintaining high service quality and customer satisfaction. Adjusted net income for the year grew by 12.7% to RMB 10.2 billion (USD 1,390.6 million), and the board approved a semi-annual dividend of USD 0.35 per share, reflecting a 40% payout ratio.
• Fourth Quarter 2024 Financial Results: In the fourth quarter of 2024, ZTO Express reported revenues of RMB 12,919.7 million (USD 1,770.0 million), a 21.7% increase from RMB 10,619.4 million in the same period of 2023, driven by a 22.4% rise in core express delivery revenue due to an 11.0% growth in parcel volume and a 10.3% increase in unit price. Gross profit rose 20.2% to RMB 3,759.7 million (USD 515.1 million), while net income increased 10.7% to RMB 2,446.8 million (USD 335.2 million), and adjusted net income grew 23.4% to RMB 2,733.3 million (USD 374.5 million). Adjusted EBITDA reached RMB 4,615.3 million (USD 632.3 million), up 26.4%, though net cash from operating activities decreased to RMB 2,806.3 million (USD 384.5 million) from RMB 3,923.3 million.
• Fiscal Year 2024 Financial Performance: For the full year 2024, ZTO Express’s revenues totaled RMB 44,280.7 million (USD 6,066.4 million), a 15.3% increase from RMB 38,418.9 million in 2023, supported by a 15.7% rise in core express delivery revenue from a 12.6% parcel volume growth and a 2.7% unit price increase. Gross profit grew 17.6% to RMB 13,717.1 million (USD 1,879.2 million), while net income saw a modest 1.5% rise to RMB 8,887.6 million (USD 1,217.6 million), and adjusted net income increased 12.7% to RMB 10,150.4 million (USD 1,390.6 million). Adjusted EBITDA rose 15.9% to RMB 16,354.9 million (USD 2,240.6 million), with net cash from operating activities at RMB 11,429.4 million (USD 1,565.8 million), down from RMB 13,361.0 million in 2023.
• Operational Achievements in 2024: ZTO Express handled 9,665 million parcels in the fourth quarter, an 11.0% increase from 8,705 million in 2023, contributing to the annual total of 34.0 billion parcels. The company maintained a network of over 31,000 pickup/delivery outlets, over 6,000 direct network partners, and over 10,000 self-owned line-haul vehicles, with 9,400 being high-capacity models, alongside 3,900 line-haul routes and 95 sorting hubs as of December 31, 2024. These operational strengths, combined with a focus on retail parcel volume growth—exceeding 7 million daily retail parcels, up nearly 50% year-over-year—underscored ZTO’s commitment to service quality and market expansion.
• Leadership Insights and Strategic Priorities: Meisong Lai, Founder, Chairman, and CEO, highlighted the company’s focus on maintaining high service quality, achieving a fourth-quarter parcel volume of 9.7 billion and an adjusted net income of RMB 2.7 billion, while noting a nearly 50% increase in daily retail parcel volume. He emphasized ZTO’s strategic priority to achieve above-industry-average volume growth in 2025, projected at 20% to 24%, amid a recovering domestic economy and persistent pricing pressures in China’s express delivery sector. Ms. Huiping Yan, CFO, noted a 13-cent increase in core express average selling price (ASP) and a 6-cent reduction in combined unit sorting and transportation costs, with SG&A expenses (excluding share-based compensation) dropping to 5% of revenue from 6.6%, reflecting operational efficiency gains.
• Dividend and Share Repurchase Program Updates: The board of ZTO Express declared a semi-annual cash dividend of USD 0.35 per ADS and ordinary share for the six months ended December 31, 2024, payable on April 22, 2025, for ordinary shareholders and April 29, 2025, for ADS holders, with a record date of April 10, 2025. Additionally, under its share repurchase program, modified to allow up to USD 2.0 billion in repurchases through June 30, 2025, the company had repurchased 50,546,707 ADSs for USD 1,222.0 million as of December 31, 2024, leaving USD 778.0 million available for further repurchases, demonstrating a commitment to enhancing shareholder value.

Technical Observation (on the daily chart):

The 14-day Relative Strength Index (RSI) is currently at 64.79 and above the midpoint, indicating an upside momentum, which could set the stage for further rally towards the upside. In addition, the current price is above both the 50-day and 200-day Simple Moving Averages (SMAs), which may work as medium to long term support levels. The stock has taken decent support from the important support level of USD 19.50, and has broken above an important resistance of USD 21, with expectations of upward momentum to next important levels of USD 24-USD 25. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given ZTO Express (Cayman) Inc (NYSE: ZTO) at the current market price of USD 21.50, as of March 19, 2025, at 07:10 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is March 19, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.