HSBC Research raises the target price for ZTO Express to $26, maintaining a "Buy" rating

HSBC's research report indicates that amid industry growth slowdown and the gradual elimination of low-value packages, ZTO Express (ZTO.US) has the capability to regain some of the lost market share. The report believes that a stable pricing environment supported by policy is expected to drive a profit recovery in 2026, but a valuation reassessment will depend on business volume growth. The firm maintains a "Buy" rating and raises the target price to $26.

The report points out that since the introduction of the "anti-involution" policy in the third quarter of 2025, aimed at curbing excessive price competition and safeguarding the livelihoods of frontline delivery personnel, the industry's bottom price has gradually improved. The average industry unit price, which fell by as much as 9% last July, turned to a 2% increase in December.

The firm expects ZTO Express's business volume to grow by 5% year-on-year in 2026, with the average unit price remaining stable and increasing by 2% year-on-year, driving a profit growth of 12%. Due to a larger-than-expected decline in business volume in the fourth quarter of 2025, the firm slightly lowers its 2025 profit forecast by 1%, but based on the outlook for stable average unit prices, it offsets some of the impact of the downward revision in industry business volume forecasts, raising the profit forecasts for 2026 to 2027 by 4% to 7%. For ZTO's Hong Kong-listed shares (02057.HK), the firm sets a target price of HKD 200