ZTO: Price War Competition Alleviated By Regulation; Better Positioned To Benefit From Upcoming Economic Stimulation In 2022
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March 8, 2022
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ZTO will report 4Q21 results on March 16th after the markets close followed by an 8:30pm EST conference call. We are positive on ZTO in both the short term and long term. In the near term, the price war has been alleviated by regulations since 2H2021. Going forward, the competition will be on the efficiency of operation as well as logistic capabilities. We believe ZTO, among all big logistics vendors in China, has the best operational efficiency. With its past investment, its capabilities of providing diversified and better priced services are unmatched by its peers. As such, ZTO is a market leader as well as a market consolidator, in our view. Going forward, China is going to start stimulating its economy, which we have already seen in certain policies, and we expect more to come. As a market leader, ZTO is better positioned to benefit from such stimulation.
T.H. Capital is an independent research and investment advisory firm specializing in China. We offers real-time, on-the-ground, bottom-up research across a wide spectrum from macro and industry analysis to company specific projects; from China ADRs to international names that have meaningful exposure to China market. We deliver relevant, comprehensive and data driven research adding immense value to clients.
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