Major Bank Ratings | Citi: Maintains "Buy" rating for ZTO Express, slightly positive view on issuance of convertible bonds

Glonghui, February 5th｜Citi released a report stating that ZTO Express plans to issue $1.5 billion in convertible preferred notes while simultaneously repurchasing shares. As there is still a $700 million share repurchase quota remaining until September 2025, the company may restart its repurchase plan when it announces its upcoming results. The bank believes that low interest rates and reasonable premiums can fully offset the potential dilution impact, and holds a slightly positive view on the issuance of convertible notes. In addition, ZTO Express announced its preliminary 2025 results, with parcel volume growing by 13.3%, in line with the bank’s expectations. Revenue is expected to be between 48.5 billion and 50 billion yuan, and gross profit between 12.15 billion and 12.55 billion yuan, with both medians roughly meeting the bank and market expectations. The bank maintains a "Buy" rating on ZTO Express’s US shares, with a target price of $22.6.