ZTO Express Q2 Profit Drops Amid Industry Headwinds

ZTO Express (Cayman) Inc, a China-based company, reported a decline in Q2 profit. The company provides express delivery services and value-added logistics services through its nationwide network. Its main services include parcel sorting and line-haul transportation, primarily catering to enterprise customers such as e-commerce and traditional merchants. The company operates in both domestic and overseas markets.

ZTO Express (Cayman) Inc, a leading express delivery and logistics provider in China, reported its second-quarter 2025 financial results, showcasing a mixed performance with strong volume growth but margin pressure. The company's stock fell over 5% in after-hours trading following the announcement [1].

ZTO Express reported a 10.3% year-on-year (YoY) increase in revenue to CNY 11.8318 billion (US$1.65 billion), driven by a 16.5% YoY increase in parcel volume to 9.8 billion [2]. However, the company's adjusted net profit decreased by 26.8% to CNY 2.053 billion (US$274.2 million) [1]. The company attributed the decline in net income to increased operational costs and market conditions.

Despite the profit decline, ZTO Express maintained its focus on quality and announced an interim dividend of US$0.30 per ADS [2]. The company also revised down its 2025 annual parcel volume guidance to 38.8-40.1 billion, representing a 14-18% growth [2].

Key operational metrics for ZTO Express include over 31,000 pickup/delivery outlets, approximately 6,000 direct network partners, and 94 sorting hubs [2]. The company's strong volume growth was primarily driven by a 50% YoY increase in retail volumes, positively impacting overall margins [3].

Analysts remain optimistic about ZTO Express's prospects, with an average rating of "buy" and a median 12-month price target of $24.00, about 17.8% above its August 19 closing price of $19.74 [3]. The stock recently traded at 12 times the next 12-month earnings, compared to a P/E of 10 three months ago.

References:
[1] https://news.futunn.com/flash/19262660/zto-express-reported-a-10-3-year-on-year-revenue
[2] https://www.stocktitan.net/news/ZTO/zto-reports-second-quarter-2025-unaudited-financial-8xngbz3b6wy9.html
[3] https://www.tradingview.com/news/reuters.com,2025:newsml_PLX329688:0-chinese-courier-firm-zto-express-q2-revenue-rises/