Yamato: Raised target price of Zhongtong Express to HKD 210, but rating has been downgraded to "outperform the market"

Nomura published a research report indicating that the parcel volume of ZTO Express in the fourth quarter of 2025 is expected to increase by 9% annually, while the unit gross profit is expected to decrease by 10% annually. The gross profit margin is expected to decrease by 3.7 percentage points annually to 25.4%, but still an increase of 0.5 percentage points compared to the previous quarter. After adjustment, the net profit is expected to decrease by 2% annually to 2.627 billion yuan, which is better than expected, mainly due to lower than expected income tax. The bank raised the earnings per share forecast for ZTO Express from 2026 to 2027 by 3% to 5%, raised the target price from 180 Hong Kong dollars to 210 Hong Kong dollars, and downgraded the rating from "Buy" to "Outperform the Market".