Citi published a report stating that zto express's parcel volume only grew by 16% year-on-year in the third quarter, continuing to fall below the overall market growth of 20% and also not meeting expectations. The management's goal is to increase market share next year while maintaining reasonable profits, and the firm believes this is the correct decision because economies of scale remain the most important element for logistics companies.
Citi stated that although it is optimistic about the company's ability to maintain stable unit profits in the fourth quarter, due to intense market competition, it has lowered its earnings per share forecasts for the company for 2024 to 2026 by 7.9%, 13.5%, and 19.1% respectively. The target price has been reduced from HK$223.43 to HK$188.28, maintaining an "outperforming market" rating, to reflect its strong free cash flow capabilities and the healthy financial condition of its network partners.
