ZTO Express (Cayman) Inc ADR

ZTO: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$75.30	Dlssvh	Zlqtdyljj

ZTO: Fair Value Estimate Unchanged After Model Tweaks; Shares Expensive Due to Price War

Chelsey Tam

Apr 9, 2024

We maintain narrow-moat ZTO’s fair value estimate at USD 14.70 per ADS and HKD 115.00 per share. Our 2024-26 EBIT forecasts increase by 6% as we assume better cost control. We forecast revenue to increase by a 5% compound annual growth rate during 2023-33. We assume a 5% CAGR for express delivery services business revenue—92% of total revenue in 2023—in the coming 10 years. While we think ZTO is a quality economy express company, the shares are overvalued due to the threat of the current price war in the industry.

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