12 Cheap Chinese Stocks to Buy According to Hedge Funds

10. ZTO Express (Cayman) Inc. (NYSE:ZTO)

Number of Hedge Fund Holders: 18

Forward P/E Ratio: 12.06

ZTO Express (Cayman) Inc. (NYSE:ZTO) is a China-based logistics company and has an extensive line-haul transportation and sorting network, which are part of the company’s express delivery services. The company operates in domestic and overseas markets. ZTO had a 22.9% market share in terms of parcel volume, as of 2023. The company’s first-mile pickup and last-mile delivery policy allows it to maintain a low-cost structure and expand its geographic reach across China.

ZTO Express (Cayman) Inc. (NYSE:ZTO) has a strategic collaboration with Alibaba as the Chinese e-commerce giant owns over 10% stake in ZTO. This collaboration assists ZTO Express’ logistics operations, improving its market reach, and giving access to Alibaba’s large customer base which is a major growth driver.

During the second quarter of 2024, ZTO Express Inc. (NYSE:ZTO) continued to improve its parcel volume growth, reporting a 10% year-over-year increase that reached 8.45 billion. The parcel volume growth helped the company generate over 10% more revenue compared to Q2 2023 as revenue reached $1.48 billion. Whereas, the adjusted net income also surged 11% year-over-year to $386.1 million in Q2. For the full-year 2024, the company expects its volume to grow between 15% and 18%, reflecting confidence in its ability despite macroeconomic softness. In addition, ZTO’s China parcel volume soared 21.3% year-over-year, exceeding expectations.

ZTO Express (Cayman) Inc. (NYSE:ZTO) has a well-established position and it continues to improve its profitability and parcel volume. The continued growth in China’s e-commerce sector presents a potential growth opportunity for ZTO Express.