20220527-招银国际-Lower_parcel_volume_guidance_but_largely_expected__ASP_story_well_intact_8页_1mb

报告摘要

ZTO Express (ZTO US) Company Update Summary

Core Content

ZTO Express (ZTO US) released its 1Q22 financial results, which showed adjusted net profit growth of 35% YoY to RMB1bn, in line with expectations. Despite a downward revision in full-year parcel volume growth guidance to 12–16% from 18–24%, the company's performance remains robust, driven by 22% YoY revenue growth and a 3.5ppt YoY gross margin expansion to 20.5%. The ASP (Average Selling Price) for parcel delivery rose 8% YoY to RMB1.45/unit, reflecting a focus on profitability among major industry players.

ZTO's parcel shipment volume increased 17% YoY to 5.2bn units, surpassing the industry average of 10%, with a market share expansion of 1.5ppt to 21.6%. The company is believed to have gained market share from BEST, which is part of J&T Express. While April saw a decline in parcel volume, the company is expected to see high single-digit growth in May, followed by further improvement in June.

The unit cost increased by 3.6% YoY, with the transportation cost remaining stable at RMB0.57/unit, thanks to efficiency improvements. The sorting hub cost, however, rose 6.5% YoY to RMB0.36/unit due to higher salaries and depreciation. The unit gross margin grew 31% YoY to RMB0.31/unit, though it dropped 12% QoQ, still maintaining a decent level.

Key Financial Highlights

Metric	FY20A	FY21A	FY22E	FY23E	FY24E
Revenue (RMB mn)	25,214	30,406	36,058	42,087	47,774
YoY growth (%)	14	21	19	17	14
Core Net Profit (RMB mn)	4,312	4,755	5,718	7,373	8,618
Core EPS (RMB)	5.43	5.70	6.85	8.83	10.32
YoY growth (%)	-14.5	5.0	20.3	28.9	16.9
Consensus EPS (RMB)	N/A	N/A	7.56	9.67	11.98
EV/EBITDA (x)	17.5	14.9	11.5	9.0	7.7
P/E (x)	31.3	28.1	24.0	18.9	16.2
P/B (x)	2.9	2.7	2.6	2.4	2.1
Yield (%)	1.0	1.0	1.3	1.6	1.9
ROE (%)	9.9	9.7	11.3	13.2	13.9
Net gearing (%)	Net cash	Net cash	Net cash	Net cash	Net cash

Key Risks

Continuous lockdowns due to the ongoing impact of the pandemic
Further slowdown in online retail sales
Potential increase in diesel prices

Earnings Forecast and Valuation

The company's earnings for FY22E, FY23E, and FY24E have been revised downward by 7–8%, based on more conservative assumptions regarding volume and cost. The target price (TP) has been trimmed from US$41 to US$37.3, with an unchanged target multiple of 35x (midpoint between the peak of 45x and the historical average of 26x).

Shareholding and Stock Performance

Market Cap: US$20,040 million
Average 3-month trading volume: US$94 million
52-week High/Low: US$34.48 / US$19.53
Total Issued Shares: 855.3 million

Shareholding Structure:

Meisong Lai: 25.6%
Alibaba: 8.6%
Others: 65.8%

Share Performance (Bloomberg):

Period	Absolute (%)	Relative (%)
1-month	6.1	14.6
3-month	-13.0	-4.1
6-month	-19.8	-5.3

Financial Summary

Income Statement

Metric	FY20A (RMB mn)	FY21A (RMB mn)	FY22E (RMB mn)	FY23E (RMB mn)	FY24E (RMB mn)
Revenue	25,214	30,406	36,058	42,087	47,774
Cost of Sales	-19,377	-23,816	-27,375	-31,091	-34,950
Gross Profit	5,837	6,589	8,683	10,995	12,824
Other Operating Income	581	790	361	421	478
SG&A Expense	-1,664	-1,876	-2,164	-2,441	-2,771
EBIT	4,754	5,503	6,880	8,975	10,531
Net Finance Income/(Expense)	407	237	124	131	168
Income Tax Paid	-690	-1,005	-1,402	-1,825	-2,144
After Tax Profit	4,326	4,701	5,606	7,300	8,575

Cash Flow Summary

Metric	FY20A (RMB mn)	FY21A (RMB mn)	FY22E (RMB mn)	FY23E (RMB mn)	FY24E (RMB mn)
Cash Flow from Operation	4,508	6,856	7,998	10,699	12,188
Net Capex on PP&E	-7,237	-8,467	-7,500	-7,500	-7,000
Cash Flow from Investing	-3,992	-9,120	-8,023	-8,201	-7,681
Cash Flow from Financing	8,337	-2,904	-2,458	-2,784	-2,263
Change in Cash	8,853	-5,168	-2,483	-286	2,244
Cash at End of Year	14,213	9,721	7,238	6,952	9,196

Balance Sheet

Metric	FY20A (RMB mn)	FY21A (RMB mn)	FY22E (RMB mn)	FY23E (RMB mn)	FY24E (RMB mn)
Non-current Assets	36,880	44,106	50,382	54,620	59,338
PP&E	18,565	24,930	29,394	33,258	36,062
Land Use Right	4,361	5,336	5,915	6,480	7,031
Investment in JV/Associates	3,224	3,730	3,784	4,004	4,224
Current Assets	22,325	18,666	15,851	16,549	18,426
Current Liabilities	9,348	12,996	12,206	11,556	11,788
Shareholders' Equity	48,979	48,637	53,001	58,659	65,065

Key Ratios

Metric	FY20A (%)	FY21A (%)	FY22E (%)	FY23E (%)	FY24E (%)
Gross Margin	23.1	21.7	24.1	26.1	26.8
EBITDA Margin	26.2	25.4	27.9	30.3	31.1
EBIT Margin	18.9	18.1	19.1	21.3	22.0
Net Profit Margin	17.2	15.5	15.5	17.3	17.9
ROA	8.2	7.8	8.9	10.7	11.6
ROE	9.9	9.7	11.3	13.2	13.9

Analyst Recommendation

Rating: BUY (Maintain)
Target Price: US$37.3
Previous TP: US$41.0
Up/Downside: +51%
Current Price: US$24.75

Conclusion

ZTO Express continues to demonstrate strong performance and a favorable industry landscape that supports ASP growth. Despite the downward revision in volume guidance due to lockdowns, the company is expected to see improvement in parcel volume in the coming months. The revised earnings forecast and target price reflect a more conservative outlook, but the favourable gross margin and profitability trends still support the BUY rating. The company's efficiency improvements and market share gains are key drivers of its sustainable growth.