JP Morgan raises ZTO EXPRESS's target price to 225 yuan, maintains "Overweight" rating

JP Morgan published a research report, raising the target price for ZTO EXPRESS (02057.HK) from HKD 197 to HKD 225, with a rating of "Overweight," and introducing forecasts for 2028, expecting a compound annual growth rate of earnings per share of 13% during the forecast period.

The bank stated that anti-involution policies are reducing price competition, allowing ZTO to enhance efficiency, invest in technology, and raise industry entry barriers. Management is confident in the sustainability of rational pricing and quality-driven competition, a view also shared by other leading logistics companies such as SF Express and JD Logistics. ZTO's business volume growth guidance for 2026 is 10% to 13%, higher than the industry's forecast of 8%, benefiting from increased market share, a more rational pricing environment, and margin expansion.

The bank raised ZTO EXPRESS's revenue and net profit forecasts for 2026 to 2028 by an average of 8% and 2%, respectively, expecting 2026 revenue to grow by 13% year-on-year to RMB 55.4 billion, and non-GAAP net profit to grow by 13% year-on-year to RMB 10.7 billion