20201120-招银国际-中通快递-SW-02057.HK-Volume_growth_to_remain_the_top_priority_7页_1mb

报告摘要

ZTO Express (2057 HK) Equity Research Summary

Core Content

ZTO Express, a leading player in China's express delivery sector, continues to focus on volume growth as its primary strategic goal. Despite a one-off tax refund and foreign exchange loss in the third quarter of 2020, the company reported net profit of RMB1.2bn, which reflects a 8% YoY decline. The report maintains a BUY rating with a target price of HK$292, a 19% increase from the previous target of HK$297.

Key Highlights

Revenue Growth: ZTO's revenue increased by 26% YoY to RMB6.6bn in 3Q20, driven by 51% YoY growth in parcel volume to 4.6bn units, surpassing the industry's 38% growth.
Market Share: ZTO's market share in parcel shipment volume reached 20.8%, an increase of 1.9ppt YoY, though slightly down 0.7ppt QoQ. The company aims to achieve 25% market share within two years.
ASP Trends: The average selling price (ASP) dropped 18% YoY to RMB1.33/unit, but this was less than major "Tongda" players. On a QoQ basis, ASP increased by 3%.
Cost Efficiency: Unit transportation and sorting hub costs decreased by 9.2% and 8.5% YoY, respectively, to RMB0.53 and RMB0.29. This cost reduction was driven by the increased use of self-owned trucks (93%) and high-capacity trucks (80%), as well as more automated sorting equipment (300 sets). Management targets a 10% YoY reduction in both cost items for 4Q20E.
Financial Performance:
- Revenue is projected to grow from RMB24.6bn in FY20E to RMB35.96bn in FY22E.
- Net profit is forecasted to increase from RMB4.427bn in FY20E to RMB7.85bn in FY22E.
- EBITDA margin is expected to rise from 26.8% in FY20E to 34.0% in FY22E.
- Net profit margin is anticipated to increase from 18.0% in FY20E to 21.9% in FY22E.
Valuation Metrics:
- P/E ratio: 33x for 2021E, revised from 33x to 28.8x.
- EV/EBITDA: decreased from 23.2x in FY20E to 12.5x in FY22E.
- P/B ratio: decreased from 4.0x in FY18A to 2.9x in FY22E.
Shareholding Structure:
- Meisong Lai holds 25.6% of the shares.
- Alibaba holds 8.6%.
- Others account for 65.8%.
- Under the weighted voting rights structure, Meisong Lai has 76.8% of the total voting rights.

Financial Summary

Income Statement (YE 31 Dec)

Metric	FY18A	FY19A	FY20E	FY21E	FY22E
Revenue (RMB mn)	17,604	22,110	24,626	29,963	35,960
Cost of sales (RMB mn)	(12,240)	(15,489)	(18,928)	(21,696)	(25,552)
Gross profit (RMB mn)	5,365	6,621	5,698	8,267	10,408
Net profit (RMB mn)	4,383	5,674	4,427	6,261	7,850

Key Ratios

Ratio	FY18A	FY19A	FY20E	FY21E	FY22E
Gross margin (%)	30.5	29.9	23.1	27.6	28.9
EBITDA margin (%)	29.5	30.4	26.8	31.9	34.0
Net profit margin (%)	24.9	25.7	18.0	21.0	21.9
ROE (%)	13.7	13.7	9.9	11.7	13.3

Risks and Outlook

Major Risks

Prolonged price war in the industry.
Slowdown in online retail sales.
Lack of effective control over network partners.

Outlook

The report maintains a BUY rating due to ZTO's growing scale and ongoing cost reduction efforts.
The company is expected to solidify its position as a cost leader in the long run.
Earnings sensitivity analysis shows that ZTO's net profit is sensitive to ASP and unit costs, but volume growth remains the key driver of profitability.

Conclusion

ZTO Express continues to focus on volume growth and cost efficiency to strengthen its position in the Chinese express delivery sector. Despite the challenges posed by the price war and foreign exchange losses, the company has shown strong revenue and market share growth, supported by operational improvements and cost management. The BUY rating reflects the analysts' confidence in ZTO's ability to outperform in the industry and deliver positive returns over the next 12 months.