Citigroup: ZTO EXPRESS-W(02057) issued convertible bond with slightly positive view. Performance forecast roughly in line with expectations.

Citibank released a research report stating that ZTO EXPRESS-W (02057) plans to issue $1.5 billion convertible preferred notes and simultaneously repurchase shares. As there is still $700 million in remaining share repurchase quota until September 2025, the company may restart the buyback plan during the recent performance release. The bank believes that low interest rates and reasonable premiums can offset the potential dilution impact completely, and has a slightly positive view on the issuance of convertible notes. In addition, ZTO Express announced its preliminary performance for 2025, with a 13.3% increase in parcel volume, in line with the bank's expectations. The revenue range is expected to be between 48.5-50 billion RMB, and the gross profit is estimated to be between 12.15-12.55 billion RMB, both of which roughly align with the bank's and market expectations.