ZTO
ZTO Express
China
★ Quality 30/100Price today
$20.95
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What this business is made of
The business
China's biggest mailman, fighting a price war nobody wins.
ZTO moves more packages than anyone in China. It doesn't own every van: it runs a network of local partners and charges them for each package sorted and hauled through its hubs. Massive volume, pennies per package.
Its edge is scale: the biggest volume in the country gives it the lowest cost per package. The problem is rivals copy the model and compete by cutting prices, so the moat exists but leaks. Hard to knock down, impossible to seal shut.
Revenue history
From $4.7B to $7.0B in 4 years. The business grows steadily.
Where each $100 of sales goes
Revenue $7.0B · FY2025
Of every $100 in sales, $81 goes to costs and operations; $19 is left as net profit (19% margin).
Catalysts and risks
Package volume growth ~10% a year alongside Chinese e-commerce.
Share buybacks and dividend backed by $1.4B in cash and zero debt.
Recovery in price per package if the tariff war cools off.
Price war among Chinese couriers that crushes the 25% margin.
VIE structure: the foreign investor owns a Cayman shell, not the real Chinese company.
Slowdown in consumption and e-commerce in China.
Charlie's note
“Paying about 10x free cash flow for a business growing 10% that doesn't lose money is no crazy deal. The question isn't the price: it's whether the price war lets the margin breathe.”
Analysis · June 2026
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