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ZTO Express (Cayman) Inc ADR ZTO

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Stock XNYS Rating as of
$20.57 −0.14 (0.68%)
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As of Delayed Price Post-Trading: $20.89 +0.32
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Company Report

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ZTO Should See Slight Margin Decline in the Long Run Due to Price Competition

Chelsey Tam

The network partner model-based companies in China have gained parcel volume share from direct operation-based companies, with share rising to 76% in 2022 from 66% in 2011. The six largest express delivery companies controlled around 86% of China’s parcel deliveries by volume in 2022, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the network partner model-based companies.

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Price vs Fair Value

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ZTO is trading within a range we consider fairly valued.
Price
$20.71
Fair Value
$33.50
Uncertainty
High
1-Star Price
$53.86
5-Star Price
$7.52
Economic Moat
Rhxxq
Capital Allocation
Dmfyxrpsf

Bulls Say, Bears Say

Bulls

If ZTO achieves the top end of its targeted 30%-40% market share by 2032, it implies faster-than-expected revenue growth and higher-than-expected economies of scale and profits.

Bears

A rising mix of a lower-margin non-express delivery business leads to faster deterioration of margin.

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Trading Information

Previous Close Price
$20.71
Day Range
$20.50–20.88
52-Week Range
$15.90–28.04
Bid/Ask
$20.57 / $20.88
Market Cap
$16.59 Bil
Volume/Avg
1.4 Mil / 3.8 Mil

Key Statistics

Price/Earnings (Normalized)
13.25
Price/Sales
3.15
Dividend Yield (Trailing)
2.99%
Dividend Yield (Forward)
2.99%
Total Yield
3.83%

Company Profile

ZTO Express is China’s largest express delivery company by parcel volume, with a volume share of 22.1% in 2022. It operates a network partner model where it provides line-haul transportation and sorting services, while its local network partners provide first-mile pickup and last-mile delivery services under the ZTO brand name. Headquartered in Shanghai, the company was founded in 2002 by Meisong Lai, who remains the Chairman, CEO, and its major shareholder with 77% voting rights as of June 30, 2023. ZTO’s strategic shareholder is leading China e-commerce company, Alibaba Group, with around an 11.7% interest.
Sector
Industrials
Industry
Integrated Freight & Logistics
Stock Style Box
Large Core
Total Number of Employees
23,554
Website
https://ir.zto.com

Competitors

Valuation

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Metric
ZTO
FDX
DHL
Price/Earnings (Normalized)
 13.2517.2212.86
Price/Book Value
 2.062.662.02
Price/Sales
 3.150.870.57
Price/Cash Flow
 9.816.465.78
Price/Earnings
ZTO
FDX
DHL

Financial Strength

Metric
ZTO
FDX
DHL
Quick Ratio
 0.921.170.74
Current Ratio
 1.151.310.95
Interest Coverage
 33.1816.467.22
Quick Ratio
ZTO
FDX
DHL

Profitability

Metric
ZTO
FDX
DHL
Return on Assets (Normalized)
 10.82%5.74%5.51%
Return on Equity (Normalized)
 16.28%19.12%16.07%
Return on Invested Capital (Normalized)
 12.09%8.22%9.19%
Return on Assets
ZTO
FDX
DHL
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Integrated Freight & Logistics Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
United Parcel Service Inc Class B
UPS
NchqfwrwzJdvzv$116.3 Bil
 FedEx Corp
FDX
XgfxzfccRmlphy$73.5 Bil
 DHL Group
DPSTF
—Bkgwqr$48.8 Bil
 DHL Group ADR
DHLGY
BczmzljdYxtvk$48.8 Bil
 Expeditors International of Washington Inc
EXPD
MxfxpyyrwGvzd$17.1 Bil
 JB Hunt Transport Services Inc
JBHT
GwblbptswLfzgnxm$16.4 Bil
 C.H. Robinson Worldwide Inc
CHRW
KzppvfcfcTkfc$10.2 Bil
 Landstar System Inc
LSTR
DflwpjblzZfgz$6.6 Bil
 Hub Group Inc Class A
HUBG
LxlpnrhlBzqyn$2.7 Bil

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