GTHT Securities issued a research report initiating coverage on ZTO Express-W (02057) with an "Overweight" rating and a target price of HK$195.99. The report emphasized that ZTO's "Shared Growth" philosophy has laid a solid foundation for the stability of its franchise network. The company's robust profitability and efficient cost control are expected to further consolidate its leading position in the industry. Key insights from GTHT include:

1. **"Shared Growth" Model Ensures Network Stability** ZTO introduced the "Shared Growth" concept in 2010 and completed the transition of key franchisees into shareholder-employees by 2015. As the first and only express delivery firm in the "Tongda" group to adopt this approach, ZTO has aligned interests and built trust among stakeholders, strengthening network stability and securing its industry leadership.

2. **Early Focus on Core Capital Investments** Since 2013, ZTO has benefited from heavy early investments in sorting equipment and effective network management. Its market share rose steadily, surpassing competitors in 2016 to reach 14.4%. Continued investments in core assets (land, facilities, vehicles, and sorting systems) and operational efficiency have since maintained its top market position.

3. **Balanced Growth in Volume, Cost, and Profit** While pursuing volume and market share expansion, ZTO maintains profitability through disciplined cost control. Post-industry consolidation, the company achieved simultaneous growth in parcel volume and per-unit profits.

**Earnings Forecast & Valuation** GTHT projects ZTO's 2025–2027 revenue at RMB47.1/51.7/57.7 billion (+6%/10%/12% YoY), with net profit attributable to shareholders of RMB9.6/10.6/11.9 billion (+8%/11%/12% YoY). EPS is estimated at RMB11.89/13.22/14.83. Applying a PE valuation (15x 2025E earnings) and an assumed HKD/CNY rate of 0.91, the target price is set at HK$195.99.

**Risks**: Potential price wars, slower volume growth, rising labor costs, and fuel price volatility.