Company Reports

China's express delivery market has become increasingly concentrated, with the six largest express delivery companies accounting for 82% of China's parcel deliveries by volume in 2026, up from 71% in 2024, according to company disclosures and China's State Post Bureau. As industry concentration is already high, market share gains among the largest players are likely to be incremental rather than significant.

ZTO‘s reverse logistics parcel volume grew 80% year on year in the second quarter of 2026, helping drive overall parcel volume growth of 6.5%, ahead of industry growth of 4.2%. Management lowered 2026 parcel volume growth guidance to 6%-10% from 10%-13%.

Network partner model-based companies in China have lost parcel volume share from direct operation-based companies, with share declining to 73% in 2024 from 78% in 2023. The six largest express delivery companies controlled around 71% of China’s parcel deliveries by volume in 2024, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the leading express delivery companies.

ZTO Express’ first-quarter express delivery revenue rose 23.7% year on year, with key account accounting for 32% of revenue. Core EBIT grew 24%, supported by operating leverage. ZTO's volume share improved to 20.3% from 19.6% sequentially.

Network partner model-based companies in China have lost parcel volume share from direct operation-based companies, with share declining to 73% in 2024 from 78% in 2023. The six largest express delivery companies controlled around 71% of China’s parcel deliveries by volume in 2024, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the leading express delivery companies.

Network partner model-based companies in China have lost parcel volume share from direct operation-based companies, with share declining to 73% in 2024 from 78% in 2023. The six largest express delivery companies controlled around 71% of China’s parcel deliveries by volume in 2024, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the leading express delivery companies.

ZTO's fourth-quarter core EBIT fell 2%, a large improvement from the 17% decline in the third quarter. Management guided for 2026 parcel volume growth of 10%-13%, implying only a modest slowdown from 2025's 13%. Share price closed 7% higher in the Hong Kong trading session.

Among the A‑share express operators that have released fourth‑quarter data, year‑on‑year revenue growth ranged from 0% to 24%. Average selling price improvement was partially offset by a slowdown in industry parcel volume growth to 5.0% year on year, from 13.3% in the prior quarter.

ZTO Express guided for 2025 parcel volume growth of 12.3%-13.8%, below its prior forecast of 14.0%-18.0%. Third-quarter revenue grew 11% year on year, while core EBIT fell 17%.

Network partner model-based companies in China have lost parcel volume share from direct operation-based companies, with share declining to 73% in 2024 from 78% in 2023. The six largest express delivery companies controlled around 71% of China’s parcel deliveries by volume in 2024, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the leading express delivery companies.

Network partner model-based companies in China have lost parcel volume share from direct operation-based companies, with share declining to 73% in 2024 from 78% in 2023. The six largest express delivery companies controlled around 71% of China’s parcel deliveries by volume in 2024, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the leading express delivery companies.

ZTO Express, or ZTO, has lowered its 2025 parcel volume growth guidance to a range of 14%-18%, from 20%-24% previously. Although second-quarter revenue grew 10% year on year, core EBIT fell 23%.

ZTO Express' first-quarter parcel volume rose 19% year on year, but revenue only grew 9% due to a decline in the unit express price. As a result, core EBIT margin fell 320 basis points to 17.9%. ZTO's volume share improved slightly to 18.9% from 18.8% in the prior quarter.

Network partner model-based companies in China have gained parcel volume share from direct operation-based companies, with share rising to 76% in 2022 from 66% in 2011. The six largest express delivery companies controlled around 86% of China’s parcel deliveries by volume in 2022, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the network partner model-based companies.

Network partner model-based companies in China have gained parcel volume share from direct operation-based companies, with share rising to 76% in 2022 from 66% in 2011. The six largest express delivery companies controlled around 86% of China’s parcel deliveries by volume in 2022, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the network partner model-based companies.

ZTO Express' fourth-quarter parcel volume, revenue, and recurring EBIT grew 11%, 22%, and 28% year on year, respectively. ZTO’s parcel volume growth in 2024 was 12.5%, slightly higher than its guidance of 11.6%-12.3%.

Narrow-moat ZTO Express' third-quarter revenue and operating profit are tracking slightly ahead of our full-year expectations. However, the company revised down its 2024 parcel volume year-over-year growth guidance to a range of 11.6%-12.3% from 15%-18% previously. We increase ZTO’s fair value estimate by 4% to USD 21.20 per ADS and HKD 163 per share after fine-tuning our forecasts. Slightly lower parcel volume forecasts over 2024-26 are more than offset by higher unit express revenue assumptions following better numbers in the third quarter, which lead to a 1%-5% increase in our EBIT estimates over the same period. We think ZTO is fairly valued now and project ZTO’s net income to grow at a 6% compound annual growth rate in the next five years.

Network partner model-based companies in China have gained parcel volume share from direct operation-based companies, with share rising to 76% in 2022 from 66% in 2011. The six largest express delivery companies controlled around 86% of China’s parcel deliveries by volume in 2022, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the network partner model-based companies.

While narrow-moat ZTO Express’ first-half revenue is tracking marginally ahead of our full-year expectation, operating profit trailed slightly. We raised our 2024-26 revenue estimates 3%-4%, due to ZTO’s focus on higher-priced retail and reverse parcels instead of low-price e-commerce parcels, and EBIT by negative 3% to positive 3%. ZTO’s parcel volume growth is tracking behind our 2024 estimate, but management kept 2024 volume guidance unchanged. We are confident that parcel volume year-on-year growth in the second half will be faster than the first half. However, we believe ZTO’s strategy to avoid loss-making low-price parcels is good for profitability but bad for parcel volume growth. Hence, we reduced our 2024-26 parcel volume estimates by 3%-8%. Our revised 2024 parcel volume growth forecast is 13%, lower than management's guidance of 15%-18%.

Network partner model-based companies in China have gained parcel volume share from direct operation-based companies, with share rising to 76% in 2022 from 66% in 2011. The six largest express delivery companies controlled around 86% of China’s parcel deliveries by volume in 2022, based on data from the companies and China’s State Post Bureau. With share already high, we think further volume share gain is limited for the network partner model-based companies.