Daily focus：ZTO Express (2057)
ZTO Express announced its Q3 2025 results. Although parcel volume increased by 9.8% to 9.6 billion pieces, slightly below the industry average, revenue increased by 11.1% year-on-year to RMB 11.86 billion, and adjusted net profit increased by 5% to RMB 2.5 billion, outperforming some market expectations. The company achieved significant results in cost control, with per-parcel transportation costs decreasing by approximately 12.8%, effectively offsetting the impact of price competition. Gross profit margin fell to 24.9%, but overall profitability remained robust thanks to cost reduction and efficiency improvement measures and control over low-priced, loss-making parcels, with per-parcel profitability improving sequentially. Management reiterated its "quality first" strategy, adjusting its full-year business volume growth guidance to the range of 12.3%-13.8%. Benefiting from industry "anti-involution" policies and regulatory intervention, the average selling price (ASP) of express parcels is expected to gradually stabilize, alleviating the vicious price war.
Significant Divergence in Interest Rate Cut Stances
A clear divergence in the attitudes of Federal Reserve officials towards a December rate cut has become the biggest focus of the market. Following dovish comments from New York Fed President Williams on the 21st, the market raised the probability of a December rate cut from 44% to 70%. This divergence reflects the dilemma facing the Fed: September's employment data was stronger than expected, with 190,000 new jobs added, suggesting a healthy labor market. Fed officials are weighing the balance between supporting employment and controlling prices, increasing market uncertainty about the future policy path. This policy contradiction has significantly impacted global risk asset allocation, pushing market volatility to 23 and prompting investors to adjust their positions.
Hong Kong Stock Connect saw a net inflow of HK$100 million on Friday, with Tencent Holdings (700) experiencing the largest net inflow at HK$1.74 billion, followed by Xiaomi Group (1810). On the other hand, the Tracker Fund of Hong Kong (2800) recorded the largest net outflow at HK$5.14 billion, followed by Hua Hong Semiconductor (1347).
Hong Kong stocks continued their downward trend throughout the day, following the overnight plunge in US tech stocks, with all three major indices falling. The Hang Seng Index closed at 25,220 points, down 615 points or 2.38%; the H-share Index fell 223 points or 2.45% to 8,919 points; and the Hang Seng Tech Index fell 179 points or 3.21% to 5,395 points. Total turnover for the day was HK$285.7 billion. Tech stocks faced heavy selling pressure, with JD Health (6618) falling 8.6%, making it the worst-performing blue chip; Link REIT (823) suffered its second consecutive day of heavy losses due to a reduced interim distribution and expectations of a deteriorating operating environment, closing at HK$35.9, down 7.47%; Baidu (9888) fell 5.8% to HK$107.3; and Alibaba (9988) fell 4.6% to HK$147.6. Xiaomi (1810) bucked the trend, rising 1%.
Source: KGI Investment Products and Solutions Department
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