The Zhitong Finance App learned that China Merchants Securities released a research report saying that the net profit of Zhongtong Express-W (02057) is expected to be 106.5, 120.5, and 13.25 billion yuan respectively from 2026 to 2028, maintaining a “highly recommended” rating; the bank believes that industry competition tends to be rational, compounded by Zhongtong's scale advantages, transportation and sorting efficiency, and business structure improvements, and profits are expected to grow steadily, and share repurchases and cash dividends are expected to continue to enhance shareholder returns.
The main views of China Merchants Securities are as follows:
The company released its second quarterly report
In Q2, the company achieved net profit (including minority shareholders' profit and loss) of 3.08 billion yuan, an increase of 56.7% year on year; adjusted net profit of 3.09 billion yuan, an increase of 50.3% year on year.
Steady growth in business volume and year-on-year increase in market share
The express delivery business volume in the second quarter was 10.5 billion units (10.486 billion units), up 6.5% year on year, 2.3 pct higher than the industry growth rate (industry about +4.2%); the market share ratio was 19.9%, up about 0.4 pct year on year, and fell by about 0.3 pct from month to month. The company adjusted the annual business volume growth rate guide to 6% to 10%, corresponding to 408-42.4 billion units.
Benefiting from improved business structure and reverse internal transactions, unit prices increased significantly year-on-year
Core single ticket revenue was 1.37 yuan, a slight increase of about 0.01 yuan month-on-month, an increase of 15.5%; express delivery service single ticket revenue was 1.30 yuan, an increase of 17.0% year-on-year, and a slight increase of about 0.01 yuan month-on-month. The increase in prices was mainly driven by the increase in the share of high-value KA parts and reverse logistics. Among them, direct customer business revenue generated by direct sales agencies increased 63.6% year over year.
Single ticket transportation and sorting costs continue to drop
The core single ticket cost was about 1.01 yuan, a slight decrease of about 0.01 yuan, of which the main line transportation cost was 0.32 yuan, a month-on-month decrease of about 0.04 yuan, and a year-on-year decrease of about 0.01 yuan; sorting costs were 0.24 yuan, a slight decrease of 0.01 yuan month-on-month, and a year-on-year decrease of about 2.6%; the total core operating cost of trunk line transportation and sorting was 0.56 yuan, down about 0.06 yuan month-on-month and 0.02 yuan year-on-year.
Single ticket gross profit increased significantly year-on-year, and gross margin improved year-on-year
The overall gross profit for a single ticket in Q2 was about 0.36 yuan, up about 0.02 yuan month-on-month and 0.06 yuan; overall gross profit was 3.73 billion yuan, up 790 million yuan, or 26.8%. The gross profit margin was 25.7%, up 0.8 pct year on year and 1.3 pct month-on-month.
Expenses decreased year over year, and the cost rate improved significantly
Q2 sales, administrative and general expenses were $560 million, down 10.7% year-on-year, mainly due to the confirmation of $40 million credit loss provision in the same period last year, with an expense ratio of 3.8%, compared to 5.3% in the same period last year and 6.1% in the previous quarter. Other net operating income was 51 million yuan, compared to 154 million yuan in the same period last year.
Benefiting from price improvements, lower fees, and income tax rebates, there was a significant net increase in Q2 results
In Q2, the company achieved net profit of 3.05 billion yuan to mother, up 57.4% year on year; adjusted net profit of 3.09 billion yuan, up 50.3% year on year; adjusted net profit for a single ticket was about 0.29 yuan, up about 41% year on year. Profit elasticity mainly comes from price improvements, lower cost rates, and income tax rebates. The overall income tax rate for the quarter was 7.7%, mainly due to receiving 344 million yuan in income tax refunds. Excluding this tax refund, the adjusted net profit was about 2.74 billion yuan, up about 33.6% year on year, and 0.26 yuan per ticket, up about 25% year on year.
Risk Alerts
The growth rate of industry demand has declined, industry competition has intensified, fuel prices have increased dramatically, industry regulatory policies have changed, and production safety accidents.