The analyst rating from Citi Research for ZTO EXPRESS-W is based on several key factors:
1. Convertible Bonds Issuance: The company plans to issue US$1.5 billion in convertible bonds while also repurchasing shares. The analyst believes that the low interest rates and reasonable premiums associated with this issuance can effectively offset any potential dilution impact.
2. Share Repurchase Quota: There is a remaining US$700 million share repurchase quota until September 2025, suggesting that the company may resume its repurchase plan, which is viewed positively.
3. Preliminary Results Alignment: ZTO EXPRESS-W's preliminary results for 2025 indicate a parcel volume growth of 13.3%, which aligns with the broker's estimates. The projected revenue and gross profit figures are also largely in line with market forecasts.
4. Overall Positive Outlook: Given these factors, Citi Research maintains a slightly positive view on the issuance of convertible bonds and keeps a Buy rating on ZTO EXPRESS-W's US stock, setting a target price of US$22.6.
