Dongxing Securities: Maintains "Strong Buy" rating on ZTO EXPRESS-W, expects improvement in profitability in the second half of the year

Dongxing Securities Co., Ltd. released a research report stating that it maintains a "Strong Buy" rating on ZTO EXPRESS-W, expecting the company's net profit attributable to the parent company for 2025-2027 to be 8.85 billion, 10.22 billion, and 11.53 billion respectively, corresponding to PE ratios of 13.0X, 11.2X, and 10.0X. The company, as a leader in the Tongda system, has a solid position and can maintain relatively stable profit levels during price wars, possessing a strong margin of safety. The company released its 2025 interim report, showing that in the second quarter, the company completed a business volume of 9.847 billion pieces, a year-on-year increase of 16.5%, with a market share of 19.5%. The company's adjusted net profit for Q2 was 2.053 billion yuan. The firm expects an improvement in the industry's and the company's profitability in the second half of the year. With the formation of an anti-involution environment, the company has adjusted its business volume guidance and shifted its strategic focus to quality first. It is expected that the incremental incentives in the second half of the year will be somewhat reduced, and the flow of incentives will be more reasonable. Although the growth rate of business volume is expected to decline, the profit level per ticket will correspondingly rebound