研究报告全文：17Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateZTOExpressZTOUSClearguidanceonvolumeandmarketsharetargetBUYMaintainfurtherroomofcostreductionTargetPriceUS410ZTOmanagedtodelivernetprofitgrowthof25YoYin4Q22amidthetoughPreviousTPUS391UpDownside464macroenvironmentwhichshowedstrongresilienceThistookthefullyearnetCurrentPriceUS280profittoRMB68bn43YoYMeanwhileZTOachievedpositivefreecashflowin2022thefirsttimesince2018LookingaheadZTOisconfidentofachieving18-22parcelvolumegrowthwhichwilltranslateinto15pptYoYChinaLogisticsincreaseinmarketshareOnthecostsidegiventhecurrentlowutilizationrateWayneFungCFAofvehiclesandfurtherimprovementofrouteplanningthereexistsroomforunit85239000826transportationcostreductionbroughtbyoperatingleverageWereviseupourwaynefungcmbicomhk2023E24Eearningsby69duelargelytohigherparcelvolumeprojectionBesidesweexpectZTOwillcontinuetogeneratefreecashflowwhichwillKatherineNgpotentiallyboosthigherdividendpayoutinthefuture31in2022Weexpect85237618725parcelvolumegrowthwillaccelerateto18in1Q23Eupfrom4in4Q22katherinengcmbicomhkwhichwillserveaspositivecatalystWeraiseourTPtoUS41fromUS391basedon29x2023EPEMaintainBUYStockDataMktCapUSmn22625Keyhighlightsin4Q22resultsAvg3mthstoUSmn656252wHighLowUS29791627Reportednetprofitin4Q22grew25YoYtoRMB22bnThegrowthwasTotalIssuedSharesmn8084drivenby17YoYrevenuegrowthand237pptYoYgrossmarginSourceBloombergexpansionto281SGAexpensesgrew19YoYduetotheincreasedShareholdingStructureemployeecompensationThefull-yearnetprofitsurged43YoYtoMeisongLai256RMB68bnin2022withgrossmarginimprovedto256vs217in2021Alibaba86Others658Parcelvolumegrew4YoYto66bnunitsin4Q22outpacingtheNoteUndertheweightedvotingrightsstructureindustryaverage-3YoYMarketshareexpandedto216in4Q22fromMeisongLaihas768ofthetotalvotingrightSourceHKEx201in4Q21ASP5YoYin4Q22ParceldeliveryASPincreased5YoYtoSharePerformanceAbsoluteRelativeRMB146unitin4Q22vsRMB139unitin4Q21thefourthconsecutive1-mth87123quarterlyincreaseThefull-yearparcelASPincreased8YoYto3-mth4213RMB14unitvsRMB13unitin20216-mth4522SourceBloombergUnitcost-07YoYin4Q22Unitcostoftransportationdecreased25YoYtoRMB051unitdespitetheincreaseddieselpriceindustrydata1212-mthPricePerformanceUSDZTOUSSPXrebasedYoYlargelyoffsetbythecontinuoustruckefficiencyandrouteplanning350improvementHoweverunitcostofsortinghubincreased22YoYto300RMB032unitduetohighersalaryanddepreciationUnitgrossmargingrew25020021YoYtoRMB042unit150Majorriskfactors1unexpectedpricecompetition2slowdownofonline10050retailsalesand3furtherincreaseindieselprice003202252022720229202211202212023EarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ESourceBloombergRevenueRMBmn3040635377418614858755469YoYgrowth2116181614AuditorDeloitteCorenetprofitRMBmn475568098119976211252RelatedreportsCoreEPSRMB570816972116913481Record-highmarketshareGoodYoYgrowth50432192202153costcontrolEarningsraisedonConsensusEPSRMBNANA97511921298bettermargin18Aug2022EVEBITDAx17412910587762LowerparcelvolumeguidancePEx322234198165143butlargelyexpectedASPstoryPBx3129272421wellintact27Mar2022Yield0913151821ROE97133142153157NetgearingNetcashNetcashNetcashNetcashNetcashSourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk17Mar2023Figure1ZTOs4Q22resultsRMBmn1Q211Q22ChangeYoY2Q212Q22ChangeYoY3Q213Q22ChangeYoY4Q214Q22ChangeYoYTotalrevenue6473790422173258657182739189452109218987171Costofsales-5376-6285169-5651-6454142-5822-6501116-6967-709919Grossprofit10971619477167422033161568244455922512773232Otherincome157115-266176240361182172-54275248-99SGAexpenses-620-618-03-394-457160-389-441134-472-561188EBIT6331116764145619863641360217559920542460198DA521633214565672190538665237598701172EBITDA11541749515202026583151898284049626523160192Netfinanceincomeexpense6051-14169953904013123076936-486Financeincome751114721021181579216276994112186Financeexpenses-16-602827-34-23-316-52-32-395-25-76naGainlossondisposalofsubsidiaries00na00na5-23na-392naImpairmentofinvestmentinequityinvestees00na00na00na5320-624Fairvaluechangesoffinancialinstruments16-1na32-14na00na-4814naFXgainloss-0-1337634-26120na-831na-229naShareofprofitofJVandassociates-25-23-74-410na-20-13-31916331038Pretaxprofit6831131655152721974391377230167021192664257Incometax-150-255706-255-438719-230-439914-371-501348Aftertaxprofit534876641127217593821148186162117482163238MI031309566204613301940110215331276Netprofit534906698129218053971167190162917622197247RatiospptpptpptpptGrossmargin16920535228254262122736124428137EBITmargin9814143199229311842435922324926Aftertaxprofitmargin8211128174203291552085319021930Effectivetaxrate21922607167199331671912417518813SourceCompanydataCMBIGMFigure2ZTOsparcelvolumegrowthhascontinuedFigure3ZTOsparcelvolumegrowthin4Q22tooutpacetheindustryaveragesince4Q21SourceCompanydataTheStatePostBureauCMBIGMSourceCompanydataTheStatePostBureauCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE217Mar2023Figure4ZTOsASPchangeYoYin4Q22Figure5ZTOsmarketshareinChinaintermsofparcelvolumeSourceCompanydataTheStatePostBureauCMBIGMSourceCompanydataCMBIGMFigure6ZTOsself-ownedhigh-capacitytruckratioFigure7ZTOsnumberofvehiclesperline-haulrouteSourceCompanydataCMBIGMSourceCompanydataCMBIGMFigure8ZTOsunitcostbreakdownFigure9ZTOsASPunitcostunitgrossmarginSourceCompanydataCMBIGMSourceCompanydataCMBIGMPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE317Mar2023Figure10ChangeinkeyoperatingassumptionsOldNewChange2023E2024E2023E2024E2023E2024EShipmentvolumemnunitsofparcelUnitofparcel287103301629268342441937ASPRMBunitPerunitofparcel139138139138-0401UnitcostRMBLine-haultransportationcost-050-049-050-049-15-15Sortinghubcost-031-030-031-0302323Others-018-018-018-018-10-10Total-100-099-101-0990101UnitgrossmarginRMB039039038039-1800RMBmnRevenueExpressdeliveryaccessoriesothers399824552040587472501538Freightforwardingservices1445151812731337-119-119Total414284703741861485871033RevenuegrowthpptExpressdeliveryaccessoriesothers151419163826Freightforwardingservices55550000Revenue151418163725GrossmarginpptExpressdeliveryaccessoriesothers282927280400Freightforwardingservices99881010Grossmargin272827280300SGAexpenseratio-58-58-58-580000Netprofit765389308119985961104SourceCompanydataCMBIGMestimatesFigure11EarningssensitivitytoASPandunitline-haultransportationcost2023ENetprofitRMBmnASPRMBunit8119132136139141146-052159166879752181639127-050662747237788085229485Unitline-haul-049665137476811987619724transportationcostRMB-048667527715835890009963-0472711180748716935810322SourceCompanydataCMBIGMestimatesFigure12EarningssensitivitytoASPandunitsortinghubcost2023ENetprofitRMBmnASPRMBunit8119132136139141146-032861377101774383859349-031863637326796886119574Unitsortinghubcost-031265137476811987619724RMB-030666637627826989119875-0296688978528494913710100SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE417Mar2023Figure13ZTOsparcelshipmentvolumeforecastFigure14ChinadieselpriceUnits45000605340000503500042403830000374031250003020000201715000152010000910500000ShipmentvolumemnunitsofparcelChangeYoYSourceCompanydataCMBIGMestimateSourceWindCMBIGMFigure15ZTOsgrossmargintrendFigure16ZTOsnetprofitforecast40RMBmn3433523393261200010035316852852853026227524410000802212556800060204313315600030408180808062201920101534311052140002002000-1300-20ExpressdeliveryaccessoriesothersFreightforwardingservicesRecurringnetprofitChangeYoYSourceCompanydataCMBIGMestimateSourceCompanydataCMBIGMestimatePLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE517Mar2023ValuationWeraiseourTPfromUS391toUS41OurhigherTPreflects1arolled-overvaluationbasefrom2022to2023Eand2higherearningsforecastOurearningsmultipleischangedfrompreviously35xthemid-pointbetweenthepeak45xandthehistoricalaverage25xto29x05SDabovethehistoricalaverageSuchrevisionistoreflectamorestablegrowthoutlookcomparedwith2022Figure17ZTOUSsPEbandFigure18ZTOUSsPBbandSourceBloombergCompanydataCMBIGMestimatesSourceBloombergCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE617Mar2023FinancialSummaryIncomestatementCashflowsummaryYE31DecRMBmnFY21AFY22AFY23EFY24EFY25EYE31DecRMBmnFY21AFY22AFY23EFY24EFY25ERevenue3040635377418614858755469Pretaxprofit5707829299491208213926Costofsales2381626338306113501439951Financecost127191180171171Grossprofit65899039112501357315518Interestincome364504462505609Otheroperatingincome7907758379721109Profitorlossofassociates32682122SGAexpense18762077242828183162Depreciationamortization22222671314436794173EBIT5503773696591172713466Incometaxpaid10051633199024162785Netfinanceincomecost237313282333438Changeinworkingcapital158619269390217Financeincome364504462505609Others201346000Financeexpenses127191180171171Cashflowfromoperation685610976105441259914637Gainlossondisposal270000NetcapexonPPE84617200700065006000Impairmentofequityinvestees5320000Purchaseoflanduserights967231700700700FXgainloss56147000InvestmentinJVassociates570256200200200ProfitofJVassociates32682122Investmentinsubsidiaries1010000Pretaxprofit5707829299491208213926Interestreceived364504462505609Incometax10051633199024162785Others6159362000Aftertaxprofit470166597960966511141Cashflowfrominvesting912016546743868956291MI5415015997111Equityfinancingrepurchase00000Netprofit475568098119976211252Netbankborrowings2026193650000Recurringnetprofit475568098119976211252Dividendpaid13131353212524362929Others36170000DA22222671314436794173Cashflowfromfinancing29047058280526073100EBITDA772510407128031540517639Changeincash5168148830130975246Cashatbeginningoftheyear142139721116931199415091Exchangegainslossesandothers677483000Cashattheendoftheyear972111693119941509120337BalancesheetKeyratiosYE31DecRMBmnFY21AFY22AFY23EFY24EFY25EYE31DecFY21AFY22AFY23EFY24EFY25ENon-currentassets4410654049590346311866098SalesmixPPE2493028813328073578137775Expressdeliveryaccessoriesothers9597979797Landuseright53365443601165657103Freightforwardingservices53333InvestmentinJVassociates37303951415943804602Total100100100100100Operatingleaseright-of-useassets897809869929989ProfitlossratioGoodwill42424242424242424242Grossmargin217256269279280Longtermfinancingreceivables14131296145717381909EBITDAmargin254294306317318Intangibleassets3629231711EBITmargin181219231241243Long-terminvestment12157323732373237323Netprofitmargin155188190199201Others13731394139413941394GrowthDeferredtaxassets935750750750750Revenue206163183161142Currentassets1866624475254512869434640Grossprofit129372245207143Inventories834112765154EBITDA171347230203145Accountreceivables933819101612471458EBIT157406249214148Financingreceivables1111951134213201720Corenetprofit103432192202153Advancestosuppliers668862862862862BalancesheetratioShort-terminvestment28455753575357535753Currentratiox1415151720Others32763461346134613461Tradereceivableturnoverdays3023202121Restrictedcash28895895895895Inventoryturnoverdays11111Cash972111693119941509120337Payableturnoverdays2829303030Currentliabilities1299616405165321662917343NetdebttotalequityNetcashNetcashNetcashNetcashNetcashAccountpayables19582203282929263641ProfitabilityOperatingleaseliabilities251230230230230ROA7896100111117Bankborrowings34595394489448944894ROE97133142153157Taxpayable87228228228228PersharedataAdvancedfromcustomers12271375137513751375EPSRMB57081697211691348Others60166975697569756975CoreEPSRMB57081697211691348Non-currentliabilities8487646764676467646BVPSRMB58346481719980789077Bankborrowings00000DPSRMB162255292351404Deferredtaxliabilities292346346346346Non-currentoperatinglease556510510510510Othersliabilities06789678967896789Shareholdersequity4863754029600226734875672MI29044428518877SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE717Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBIGMwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE8