ZTO Express Cayman Inc – Key Technical Insights and Investment Opportunities

ZTO Express Cayman Inc – Key Technical Insights and Investment Opportunities

ZTO Express Cayman Inc (HKEX: 2057): Uptrend Likely to Resume

Recommendation: BUY

• Target Prices: HK$192.10, HK$218.10, HK$240.00, HK$264.40
• Stop Loss: HK$140.10
• Date of Recommendation: September 3, 2024
• Broker Company: CGS-CIMB Securities

Investment Thesis:

ZTO Express Cayman Inc. is a leading player in China’s express delivery industry, strategically positioned to benefit from the country’s growing e-commerce sector. The company’s strong operational network, coupled with its commitment to service quality, enables it to capture significant market share in the rapidly expanding logistics market.

Key factors driving this investment opportunity include:

• Resumption of Uptrend: ZTO Express has shown a strong recovery from recent lows, confirming a bullish “cup and handle” formation. The breakout above the handle suggests that the stock is poised to resume its uptrend, offering multiple entry points for investors.
• Technical Indicators: The stock is currently trading above all major Ichimoku indicators, signaling strong support for the uptrend. Additionally, the MACD histogram has turned positive, and the MACD/signal line has crossed over, reinforcing the bullish sentiment. The Stochastic Oscillator is also rising, confirming the oversold crossover signal, while the 23-period ROC has returned above the zero line, indicating a shift in momentum.
• Volume Confirmation: A significant increase in trading volume above the 20-period average confirms the strength of the uptrend, suggesting that the bullish momentum is likely to continue.

Valuation and Catalysts:

The target prices of HK$192.10, HK$218.10, HK$240.00, and HK$264.40 reflect the positive technical outlook and the company’s ability to capitalize on the growing demand for express delivery services in China. The ongoing recovery in stock price, supported by strong technical signals, makes ZTO Express an attractive buy for investors looking to benefit from the resumption of its uptrend.

Thank you