Q1 2024 Full Truck Alliance Co Ltd Earnings Call
Operator: Ladies and gentlemen, good day and welcome to Full Truck Alliance's first quarter 2024 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mao Mao, head of investor relations. Please go ahead.
Ladies and gentlemen, good day and welcome to the full truck Alliance's first quarter 'twenty 'twenty four earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Malmo head of Investor Relations. Please go ahead.
Mao Mao: Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the Safe Harbor formal liability protection, as established by the U.S. Private Securities Delegation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion.
Malmo: Thank you operator. Please note that today's discussion will contain forward looking statements relating to the company's future performance, which are intended to qualify for the safe Harbor from liability.
Mao Mao: A general discussion of the risk factors that could affect FDA's business and financial results is included in certain filings of the company with the SEC. However, the company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain Mungap financial measures for comparison purposes only. For a definition of these Mungap financial measures and a reconciliation of GAP to Mungap financial results, please see the earnings release issued earlier today.
Malmo: Established by the U S. Private Securities Litigation Reform Act such statements are not guarantees of future performance and are subject to certain risks and uncertainties assumptions and other factors.
Malmo: Some of these risks I'll be young company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion.
Malmo: A general discussion of the factors that could affect F. The ace business and so I'm curious about is included in certain filings of the company with the SEC. The company does not undertake any obligation to update its forward looking information except as required by law.
Malmo: Today's call management will also discuss certain non-GAAP financial measures for comparison purposes only.
Malmo: A definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.
Malmo: Please see the earnings release issued earlier today.
Mao Mao: Joining us today on the call from FTH's senior management side are Mr. Hui Zhang, our founder, chairman, and CEO, and Mr. Simon Tai, our CFO. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast of the replay of this call will be available on FTA's investor relations website at ir.fulltruckalliance.com. I will now turn the call over to our Founder, Chairman, and CEO, Mr. John. Please go ahead.
Speaker Change: Joining me today on the call from F. G. H C. M regimen side are Mr. Li Zhang our founder Chairman and CEO and Mr. Fanning tie our CFO.
Speaker Change: Management will begin with prepared remarks, and the call will conclude with a Q&A session.
Speaker Change: As a reminder, this conference is being recorded in addition, a webcast replay of this call will be available on <unk> Investor Relations website at IR got hotel a lifestyle com.
Speaker Change: I'll now turn the call over to our founder Chairman and CEO. Mr. John. Please go ahead Sir.
Speaker Change: Okay great.
Please go ahead.
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Hui Zhang: [inaudible] In 2024, we will continue to firmly promote the development of the logistics industry, digitalization, and smartization and help tens of millions of small and medium-sized enterprises to reduce their costs.?? Thanks to the core advantages of saving money and the continuous optimization of the product experience, the network effect of full-band platforms is constantly improving. The efficiency of the transaction has been steadily improved, further driving the growth of the Full Truck platform. [inaudible] continue to lead in the growth rate of public and private sectors in large numbers, reflects the continued expansion of digital and smart logistics platforms to off-the-shelf trucks and planned logistics.
Speaker Change: Hello, everyone. Thank you for joining us on our first quarter of 2024 earnings conference call entering 2024, we continue to choose steadfastly promote but digital and intelligent transformation of the logistics industry by enhancing logistics efficiency and reducing costs, where tens of millions of small.
Hui Zhang: Hello everyone, thank you for joining us today on our first quarter 2024 earnings conference call. Entering 2024, we continue to steadfastly promote the digital and intelligent transformation of the logistics industry. By enhancing logistics efficiency and reducing costs for tens of millions of small and medium-sized shippers, we empower enterprises with greater logistics competitiveness and improved profitability. With our core cost-saving value proposition and consistently optimized product experience, our network effect is growing stronger at both ends, that is, for both truckers and shippers.
Speaker Change: And a medium sized the shippers, we empower enterprises with greater logistics competitiveness and improve profitability.
Speaker Change: With our core cost savings value proposition and consistently optimized product.
Speaker Change: Our network effects, it's growing stronger at both and that is for both trucker and ship it there.
Hui Zhang: This leads to continuous improvement in fulfillment efficiency and further propels our growth flywheel. In the first quarter, we delivered nearly 30% year-over-year growth in fulfilled orders, again significantly outpacing the single-digit growth of the broader road fleet market, reflecting the ongoing shift from the traditional offline solutions of acquaintance truckers and contracted shipments to innovative digital and intelligent logistics platforms.
Speaker Change: This leads to continuous improvements in fulfillment efficiency and further propel our flywheel in.
Speaker Change: In the first quarter, we delivered nearly 30% year over year from being fulfilled.
Speaker Change: It's like when you have a company outpacing the single digit growth of the broader both freight market, reflecting the ongoing shift from the traditional offline fiduciary of cordless truckers and a contracted shipment to innovative digital and intelligence logistics platform.
Hui Zhang: Since the first quarter, our key operating indicators have continued to improve, which is reflected in the growth of new users, effective supply, and the quality of transformation. We are committed to becoming a temporary delivery gateway for tens of millions of small and medium-sized enterprises.
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Hui Zhang: Therefore, the growth of new users is our important work. In terms of new user growth, we continue to strengthen the desire to deliver more and save more money. At the same time, we are tightening the process of economic operation.
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Hui Zhang: The number of new users is growing rapidly. The average monthly turnover of the shipping and shipping group reached 2.14 million people, which increased by 22.3% compared with the demand from direct users to continue to drive the rapid growth of platform users. In this quarter, the current user-to-user ratio has reached 47%. In terms of effective attack, this quarter, we have adopted an effective attack mechanism by adding the good or bad points of the driver's behavior.
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Hui Zhang: At the same time, the driver's reliance on the platform and wallet share have also increased significantly. With the increase in high-quality transport, the user-to-user ratio has reached 33.5%, which is nearly 6% higher than before. [inaudible] to promote high-yield income and healthy growth. The above results further verify that Full Truck has created irreplaceable value for food and goods.
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Hui Zhang: Since the first quarter, we have achieved continued improvement in key operational metrics as evidenced by our new user growth, high quality truck supply, and enhanced monetization efficiency. As we strive to become the one-stop shipping platform for tens of millions of small and medium-sized shippers, new user acquisition remains a priority. As such, we continue to strengthen awareness of FTA's cost-saving benefits for free shipping.
Speaker Change: Since the first quarter, we have achieved continued improvement in key operational matrix as evidenced by our new user growth I call. It T truckers supply and enhanced monetization efficiency.
Speaker Change: We strive to become the one stop shopping platform for tens of millions of small and medium size of ship Hurts you use acquisition remains a priority.
Speaker Change: Such we continue to strengthen awareness of case cost saving benefits for free shipping.
Hui Zhang: In addition, we refined our operational process for user acquisition and initial fulfillment, adding significant momentum to new user growth. Our average shipper MAUs reached 2.14 million, an increase of 22.3% year-over-year. The strong demand from direct shippers continues to drive rapid order growth across our platform, with direct shippers contributing to 47% of total fulfilled orders in a quarter. Furthermore, while ensuring an ample supply of truckers, we significantly improved the quality and efficiency of our trucker supply during the quarter through initiatives such as the Trucker Credit Rating and the Premium Cargo Bidding function.
Speaker Change: Mission, we refined our personnel process for user acquisition and initial fulfillment.
Speaker Change: Adding significant momentum and he will do their work.
Speaker Change: Chip I mean, you reached 2.14 million an increase of 22, 3% year over year.
Speaker Change: Dragging mom from direct shippers continue to drive rapid growth across all platforms with drop shippers contributing to 47% of total orders in the quarter, while ensuring and ample supply of truckers, we used to significantly improve the quality and efficiency of all the trucker supply during the quarter through initiatives such as.
Speaker Change: The truck a credit rating and the premium carpet bidding function at the <unk>.
Hui Zhang: At the same time, we saw truckers become more dependent on our platform as their wallet share grew significantly. As we continue to expand our high-quality transportation capacity, our performance rate amounted to 33.5% in the first quarter, up nearly six percentage points year-over-year to an all-time high. In terms of monetization, we comprehensively optimized our monetization strategies this quarter, positioning us for healthy and rapid top-line growth. These achievements further underscore our unparalleled, irreplaceable value to both truckers and shippers.
Speaker Change: We saw a truckers become more dependent on our platform as they are what is she accrue they can lead the company.
Speaker Change: We'll continue to expand our high quality transportation capacity, Oh, so somebody like amounted to 33, 5% in the first quarter up nearly 6% six percentage points year over year to an all time high.
Speaker Change: In terms of monetization, we can because of the optimized our monetization strategies this quarter positioning us for California, and the rapid topline growth. These achievements further underscore our unparalleled it replace both value to both truckers, etc.
Hui Zhang: The strong growth of the business has also helped us to achieve more than expected financial performance. The total revenue of Yilu Group reached 22.7 billion yuan, which is 33.3% higher than the previous year. Under non-US accounting regulations, after adjustment, the net profit reached 7.6 billion yuan, and the growth reached 46.9. It is worth mentioning that our income structure continues to optimize in this quarter. The total revenue of the transaction service has increased by more than 60%, and the total revenue of the group has reached 30% for the first time.
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Speaker Change: Oh robust business growth translated into an exceptional financial performance that went beyond expectations with revenue increasing by 43, 2% year over year to RMB 2.27 billion in the first quarter non-GAAP adjusted net income increased by 46, 9% year over year.
Hui Zhang: Our robust business growth translated into an exceptional financial performance that went beyond expectations, with revenues increasing by 33.3% year-over-year to RMB 2.27 billion in the first quarter. Non-GAAP-adjusted net income increased by 46.9% year-over-year, reaching RMB 760 million. I'd like to highlight that our revenue mix continues to improve, as transaction service revenues surged by more than 60% year-over-year, accounting for 30% of our total revenue for the first time, a significant milestone.
Speaker Change: <unk> RMB 760 million I'd like to highlight that our revenue mix continues to improve as transaction service revenues surged by more than 60% year over year accounting for 40% of our total revenue for the first time, a stick in either country milestone.
Hui Zhang: In the first quarter of this year, the Prime Minister emphasized in the government's work report that the implementation of a low-cost logistics operation is an important measure to improve economic operation efficiency and will receive more and more appreciation and support. In a positive environment, we will continue to promote the logistics industry, digitalizing, smartizing, and greening it to create greater value for users and the industry.
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Speaker Change: In the first quarter the Premier emphasized in the government work report the imperative to take steps to reduce logistics costs looking ahead to 2024.
Hui Zhang: In the first quarter, the Premier stressed in the Government Work Report the imperative to take steps to reduce logistics costs. Looking ahead to 2024, the reduction of logistics costs as an important measure to optimize economic efficiency will garner even greater attention and support. Leveraging this favorite dynamic, we will further propel the logistics industry by advancing digitalization, smart innovation, and environmental sustainability, ultimately creating greater value for our users and the industry as a whole.
Speaker Change: Duction of logistics costs as an important measure to optimize economic efficiency, we have gotten there even greater attention and support leveraging guest favorite dynamic we will further propel the logistics industry by advancing the digitalization smart innovation and environmental sustainability, how automated they create.
Speaker Change: And greater value for our users and the industry as a whole.
Hui Zhang: Next, I will give the time to Helen to give you a detailed introduction of our performance in the first season. Thank you, everyone. Let me pass the call over to our
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Mao Mao: Thank you, everyone. Let me pass the call over to our CFO Simon, who will provide an update on our first quarter's business progress and financial results.
Speaker Change: Everyone. Let me pass the call over to our CFO, who will provide an update on our first quarter business progress kind of financial results.
Speaker Change: Okay.
Speaker Change: Right.
Simon Tai: Thank you, Mr. Chong, and thanks everyone for taking the time to join our earnings conference call today. I'll start with an overview of our operational highlights and provide an update on our first quarter financial performance. We started the year off well with a solid performance in the first quarter.
Speaker Change: Thank you Mr. Joan and thanks, everyone for taking the time to join our earnings conference call today.
Speaker Change: I'll start with an overview of our operational highlights and provide an update on our first quarter financial performance.
Speaker Change: We started the year off well with a solid performance in the first quarter are fulfilled orders increased by 29, 6% year over year too.
Simon Tai: Our fulfilled orders increased by 29.6% year-over-year to $39.3 million, again significantly outpacing the single-digit year-over-year growth of the broader World Trade Market. We attribute this same strong year-over-year order growth to our ongoing user-based expansion and matching efficiency improvement. However, sequentially, the number of fulfilled orders declined in the first quarter due to the off-season effect of the Chinese New Year, in line with previous seasonal patterns
Speaker Change: $39 3 million again significantly outpacing the single digit year over year growth off the brother will trade market.
Speaker Change: We attribute this to we attribute this sustained strong year over year order growth to our ongoing user base expansion and matching the efficiency improvement.
Speaker Change: Sequentially the number of fulfilled others declined in the first quarter due to the off season effect after Chinese new year in line with previous seasonal patterns.
Simon Tai: Our fulfillment rate reached an all-time high of approximately 33.5% in the first quarter, an increase of nearly 6 percentage points year-over-year and approximately 1.4 percentage points quarter-over-quarter. This was mainly attributable to contributions from our rapidly growing direct shipper base. Despite a slight shortage of truckers due to the Chinese New Year holiday, our platform's overall auto structure continued to improve as the scale of direct shippers expanded. The order contribution from our 688 membershipers and non-membershipers reached 47%, a historical high.
Speaker Change: Fulfillment rates reached all time high of approximately 33, 5% in the first quarter, an increase of nearly six percentage points year over year and approximately one four percentage points quarter over quarter.
Speaker Change: This was mainly attributable to contributions from our rapidly growing direct shipper base.
Speaker Change: Despite a slight shortage of truckers due to Chinese new year holiday.
Speaker Change: Oh platforms overall, although structure continued to improve as the scale of direct shippers extend it.
Speaker Change: The contribution from our 688 member shippers and non member shippers reached 47.
Speaker Change: 7%, making a historical high in addition to user growth on both sides.
Simon Tai: In addition, user growth on both sides, along with efficiency enhancement driven by platform-wide service upgrades, drove an increase in direct shippers' fulfillment rates, boosting our first quarter average fulfillment rate to new highs. We're confident that we can sustain this growth momentum as we move forward through the rest of the year.
Speaker Change: With efficiency enhancements driven by platform wide service upgrades drove and drove an increase in direct shippers fulfillment rate boosting our first quarter average fulfillment rate to new Heights, we're confident that we can sustain this growth momentum as we move through the rest of the year.
Simon Tai: Turning to our user base, strong execution of our user acquisition strategies has yielded positive results. Our average shipper MEUs reached 2.14 million in the first quarter, up 22.3% year-over-year, but down slightly from the previous quarter due to the Chinese New Year holiday. The year-over-year increase was primarily driven by growth among our 688 membershippers and non-membershippers, who are mostly low- and medium-frequency direct shippers. Since March, the average daily number of new shippers fulfilling orders has steadily increased over time, peaking at a daily average of more than 10,000 new additions.
Speaker Change: Turning to our user base strong execution of our user acquisition strategies has yielded positive results.
Speaker Change: Rich shipper and they use reached 2.14 million in the first quarter up 22.
Speaker Change: 3% year over year, but down slightly from the previous quarter due to the Chinese new year holiday.
Speaker Change: The year over year increase was primarily driven by growth among our 688 member shippers and non member shippers, who are mostly low and medium frequency direct shippers.
Speaker Change: Since March the average daily number of new shippers fulfilling orders has steadily increased over the time, peaking at a daily average of more than 10000 new additions.
Simon Tai: We expect this vigorous growth trend in our shipper user base to persist throughout this year. Additionally, our high-frequency shippers' activity remains robust, with our shipper member 12-month rolling retention rate remaining above 80% in the first quarter.
Speaker Change: We expect this vigorous growth trend in our super user base to persist throughout this year.
Speaker Change: Currently our high frequency shippers activity remain robust with our shipper remember 12 months rolling retention rate remaining above 80% in the first quarter.
Simon Tai: On the trucker side, as transaction volume on our platform expanded in the first quarter, the number of active truckers who are feeding others through FTA over the past 12 months reached 3.91 million, and our supply of truckers remains plentiful. Additionally, our next month's retention of truckers who responded to orders increased to 90%, approximately 5 percentage points higher than the comparable period in prior years. As a leading road freight platform, our broad trucker and shipper user base, supported by vast transaction data and powerful algorithms, has created a due growth flywheel and a huge competitive advantage. As a result, we expect our user stickiness to consistently increase.
Speaker Change: On the truckload side as transaction volume on our platform expanded in the first quarter. The number of active truckers school feeding others through F. T. A over the past 12 months.
Speaker Change: Reached $3 91 million and our supply of truckers remain plentiful.
Speaker Change: Additionally, our next month retention of truckers, who responded to others increased to 90% approximately five percentage points higher than the comparable periods in prior years.
Speaker Change: As a leading road freight platform.
Speaker Change: Our Oh trucker and ship our use of our broad trucker and shipper user base supported by bass transaction data and powerful uncle has created a do a growth flywheel.
Speaker Change: And the huge competitive advantage as a result, we expect our user stickiness to consistently increase.
Simon Tai: Turning to our transaction service, as we mentioned on last quarter's earnings call, we renamed our transaction commission revenue stream to transaction service starting this fiscal year to better reflect the nature of our revenues and the company's latest business developments in our financial reports. The transaction service includes all monetization revenues generated from truckers relating to freight matching services, including monetization revenues generated from truckers in our intra-city business that was previously classified under freight listing and value-added services.
Speaker Change: Turning to our transaction service as we mentioned on last quarter's earning earnings call. We remained renamed our transaction Commission revenue stream to transaction service starting this fiscal year to better reflect the nature of our revenues in the company's latest business developments and our financial reports.
Speaker Change: Transaction service includes all monetization revenues generated from truckers really relating to freight matching services, including monetization revenue generated from truckers into.
Speaker Change: Interest of the business that was that were previously classified under free listing and value added services.
Simon Tai: Under the new reporting measures, revenues from transaction services surged by 61.5% year-over-year to RMB 690 million in the first quarter. This growth was primarily fueled by three drivers, namely the solid expansion in the number of field orders, the increased monetization order penetration ratio, and the elevated monetization rate. As of the end of the first quarter, our total commissioned city count increased to 234. Meanwhile, we also stepped up stress testing across our commissioned areas.
Speaker Change: Under the new reporting measures revenues from transaction service searched by 61, 5% year over year to RMB $690 million in the first quarter.
Speaker Change: This growth was primarily fueled by three drivers.
Speaker Change: Solid expansion in the number of fulfilled others the increased monetization other penetration ratio.
And the elevated monetization rate.
Speaker Change: At the end of the first quarter, our total commission cities.
Speaker Change: Commission City count increased to 234.
Speaker Change: Meanwhile, we also stepped up the testing across our commissioned areas. This included increase in commission rate for high quality auditors and implementing a road around the clock Commission strategy nationwide by the end of the first quarter.
Simon Tai: This included increasing commission rates for high-quality orders and implementing our around-the-clock commission strategy nationwide by the end of the first quarter. We no longer reduce commissions as matching time extends, while the commission waiver mechanism applies exclusively to low-quality orders.
Speaker Change: We no longer reduce commissions and some.
Speaker Change: Matching time extends well commission waivers Mccann isn't applies exclusively to low quantity orders.
Simon Tai: With the implementation of these refined commission rules, our first quarter revenue from transaction service covered more than 77.4% of fulfilled orders, an increase of approximately 8 percentage points year-over-year from last year's 69.3% order coverage on a comparable basis. Furthermore, under the new calculation approach, our monetization amount per order, including transaction, commission, and trucker membership fee, increased to RMB 22.7 from RMB 20.4 a year ago. Before going over our financial results, I would like to provide a brief update on our share repurchase program. On March 13th, we announced an extension of our one-year share repurchase program totaling US$500 million, initiated in March 2023. It has now been extended until March 12th, 2025.
Speaker Change: With the implementation of these refined commission who's our first quarter revenue from transaction service covered more than 77, 4% of others and increase of approximately eight percentage points year over year from last years 669, 3%.
Speaker Change: Coverage on a comparable basis.
Speaker Change: Under the new calculation approach, our monetization amount per order, including transaction Commission and trucker membership fee increased to RMB <unk>.
Speaker Change: <unk> to RMB 22.7 from RMB 24, a year ago.
Simon Tai: Since the announcement, we have repurchased approximately 500,000 ADS shares, totaling approximately U.S. dollars 3.78 million. In addition to the annual cash dividend of U.S. dollars $150 million paid in April, we will also continue to evaluate our share repurchase program as part of our comprehensive shareholder return initiatives going forward. Now, I'd like to provide a brief overview of our 2024 first quarter financial results.
Speaker Change: Before going over our financial results I'd like to provide a brief update on our share repurchase program.
Speaker Change: March the 13th we announced an extension for one year share repurchase program totaling USD 500 million initiated in March 'twenty. Two 'twenty three it has now been extended until March 12, 2025 things.
Speaker Change: Since the announcement, we have repurchased approximately 500000 shares totaling approximately USD three $7 million to $8 million.
Speaker Change: In addition to the annual cash dividend of U S. Dollar 150 million paid in April. We will also continue to evaluate share repurchase program as part of as part of our comprehensive shareholder return initiatives going forward.
Simon Tai: Our total net revenues in the first quarter were RMB $2,268.7 million, representing a 33.3% increase year-over-year, primarily attributable to an increase in revenues from freight matching services. Net revenues from freight matching services, including service fees from freight brokerage models, shipper membership fees from listing models, and trucker monetization revenues, including commissions and membership fees from transaction services, were RMB 1,869.7 million in the first quarter, representing an increase of 33.5% year-over-year, primarily due to the continued growth in revenues from the freight brokerage service and a steady increase in the transaction service.
Now I'd like to provide a brief overview of our 'twenty 'twenty four first quarter financial results.
Simon Tai: Revenues from freight brokerage services in the first quarter were RMB965.2 million, up 24.9% year-over-year, primarily attributable to an increase in transaction volume due to the continued growth in user demand. Revenues from the freight listing service in the first quarter were RMB 213.5 million, up 6.7% year-over-year, primarily due to a growing number of total paying members. Revenue from the transaction service in the first quarter was RMB691 million, up 61.5% year-over-year, primarily driven by an increase in order volume, monetization penetration, and per-order transaction service revenue. Revenues from value-added services in the first quarter were RMB399 million, up 32.3% year-over-year. This increase is due to a growing demand from truckers and shippers for credit solutions and other value-added services.
Our total net revenues in the first quarter were RMB 2 billion 268, 7 million, representing a 33, 3% increase year over year, primarily attributable to an increase in revenues from freight matching services.
Speaker Change: Net revenues from freight matching services, including service fees from freight brokerage models show.
Speaker Change: Per membership fees from listing models and trucker monetization revenues, including commissions and membership fee from transaction services were RMB 1 billion $869 7 million in the first quarter, representing an increase of 33, 5% year over year, primarily due to continued.
Speaker Change: Growth in revenues from the freight brokerage service and the steady increase in the transaction so.
Speaker Change: Revenues from our freight brokerage services in the first quarter were RMB $965 2 million up 24, 9% year over year, primarily attributable to an increase in transaction volume due to the continued growth in user demand.
Speaker Change: Revenues from the free listing services in the first quarter were RMB $213 5 million up six 7% year over year, primarily due to a growing number of total paying members.
Speaker Change: Revenue from the transaction service in the first quarter were RMB 691 million up 61, 5% year over year, primarily driven by an increasing order volume.
Speaker Change: <unk> penetration paint penetration and the per order transaction service fee.
Speaker Change: Revenues from value added services in the first quarter were RMB 399 million up 32, 3% year over year. This increase was due to a growing demand from truckers and shippers.
Speaker Change: For credit solutions and other value added services.
Simon Tai: The first quarter cost of revenues was RMB 1 billion, 31.9 million compared with RMB 849.4 million in the prior year period. The increase was primarily due to an increase in VAT-related tax surcharges and other tax costs not off the ground from government authorities.
Speaker Change: First quarter cost of revenues was RMB 1 billion.
And $31 9 million compared with RMB $849 4 million in the prior year period the.
Speaker Change: The increase was primarily due to an increase in b a T related tax surcharges and other types of costs net of grant from government authorities.
Simon Tai: These tax-related costs of government grants totaled RMB 908 million, representing an increase of 18.5% from RMB 766.4 million in the same period of 2023, primarily due to the expansion of transaction activities involving our freight brokerage service. Our sales and marketing expenses in the first quarter were RMB 340.1 million compared with RMB 245.7 million in the same period of 2023. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions as well as higher salary and benefits expenses.
Speaker Change: These tax related causes none of government grants totaled RMB 908 million, representing an increase of 18, 5% from RMB $766 4 million in the same period of 2023, primarily due to the expansion of transaction activities involving <unk>.
Speaker Change: Freight brokerage services.
Speaker Change: Our sales and marketing expenses in the first quarter were RMB $340 1 million compared with RMB $245 7 million in the same period of 2023.
Speaker Change: The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions, as well as higher salary and benefits expenses.
Simon Tai: General and administrative expenses in the first quarter were RMB$264.5 million, compared with RMB$179.5 million in the same period of 2023. The increase was primarily due to higher share-based compensation expenses. R&D expenses in the first quarter were RMB247.7 million compared with RMB229.9 million in the same period of 2023. The increase was primarily due to higher share-based compensation expenses as well as an increase in salary and benefits expenses.
Speaker Change: General and administrative expenses in the first quarter were RMB $264 5 million compared with RMB $179 5 million in the same period of 2023.
Speaker Change: The increase was primarily due to higher share based compensation expenses.
R&D expenses in the first quarter were RMB $247 7 million compared with RMB $229 9 million in the same periods of 2023 the.
Speaker Change: The increase was primarily due to higher share based compensation expenses as well as an increase in salary and benefits expenses.
Simon Tai: Income from operations in the first quarter was RMB 312.2 million, an increase of 88.3% from RMB 165.8 million in the same period of 2023. Net income in the first quarter was RMB 586.4 million, an increase of 42.5% from RMB 411.4 million in the same period of 2023. Under non-GAAP measures, our adjusted operating income in the first quarter was RMB485.4 million, an increase of 78.2 percent from RMB272.4 million in the same period of 2023.
Speaker Change: Income from operations in the first quarter was RMB $312 2 million, an increase of 88, 3% from RMB $165 8 million in the same period of 2023 netting.
Speaker Change: Net income in the first quarter was RMB $586 4 million, an increase of 42, 5% from RMB $411 4 million in the same period of 2023.
Speaker Change: On the non-GAAP measures or adjusted net income operating adjusted operating income in the first quarter was RMB $485 4 million, an increase of 78.2% from RMB $272 4 million in the same period of 2023 or just.
Speaker Change: Net income in the first quarter was RMB $756 4 million, an increase of 46, 9% from RMB $514 8 million in the same period last year.
Simon Tai: Our adjusted net income in the first quarter was RMB756.4 million, an increase of 46.9 percent from RMB514.8 million in the same period last year. Basic and Diluted Net Income per ADS, or RMB0.56 in the first quarter, compared with RMB0.38 in the same period of 2023. Non-GAAP-adjusted basic and diluted net income per ADS was RMB0.72 in the first quarter compared with RMB0.48 in the same period of 2023. As of March 31st, 2024, the company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products with maturity over one year of RMB 27.5 billion in total, compared with RMB 27.6 billion as of December 31st, 2023.
Speaker Change: Basic and diluted net income per ads were RMB <unk> five six in the first quarter compared with RMB three eight in the same period of 2023 non.
Speaker Change: non-GAAP adjusted.
Speaker Change: Basic and diluted net income per ads was RMB <unk> 72 in the first quarter compared with the RMB <unk> 40.
Speaker Change: 48 in the same period of 2023.
Speaker Change: That's as of March 31, 'twenty 'twenty four the company had cash and cash equivalents restricted cash and short term investments long term time deposits and wealth management products with maturity over one year of RMB 27, 5 billion in total compared with RMB.
Speaker Change: $27 6 billion as of December 31, 2023.
Simon Tai: For our second quarter 2024 business outlook, we expect our total revenues to be between RMB 2.65 billion and RMB 2.72 billion, representing a year-over-year growth rate of approximately 28.3 percent to 31.7 percent. This forecast reflects our current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof. That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead.
Speaker Change: Our second quarter 'twenty 'twenty four basis, our business outlook, we expect our total revenues to be between RMB 2.65 billion and RMB 272 billion, representing an eight year over year growth rate of approximately 28, 3% to 31 seven.
Speaker Change: Perfect person.
Speaker Change: This forecast reflects company's current and preliminary preliminary views of the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.
Speaker Change: That concludes our prepared remarks, we would now like to open the call to Q&A operator. Please go ahead.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question comes from Eddy Wang with Morgan Stanley. Please go ahead.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Any time your question has been addressed and you would like to withdraw. Your question. Please press Star then two for the benefit of all participants on today's call. If you wish to ask your question to management in Chinese. Please immediately repeat your question in English.
At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question comes from Eddy Wang with Morgan Stanley. Please go ahead.
Eddy Wang: Thank you, Mr. Keung, Mr. Zhang, and Mr. Mao Mao, for accepting my question. My question is about the sales volume in the first quarter. We can see that the sales volume has increased significantly, 30% year-over-year. This is actually much higher than the sales volume in the first quarter. I would like to ask, what are the main factors behind the increase in the sales volume on our platform? And based on the current order situation we can see, do we have any expectations for an increase in the sales volume in the second quarter? I will translate it myself.
Speaker Change: Uh huh.
Speaker Change: Uh huh.
Eddy Wang: So what I want to support them.
Eddy Wang: But when they come back because it's up to them.
Speaker Change: They've been bothered on something.
Speaker Change: Year over year.
Speaker Change: Well, it's about time with them we are all about.
Speaker Change: That's our main subjects at that moment in time.
Speaker Change: I'm not sure that's Hollywood depends on if they hold a job so that you didn't introduce.
Speaker Change: Mr. Sean Oh, Gee, Luciano Walnut harmonic debenture, almost everyone's jobs to arguably budget depends on a bunch of them.
Speaker Change: Oh well.
Eddy Wang: Thank you, management, for taking my question. My question is about the fulfilled orders. In the first quarter, we see that fulfilled order growth is around 30% year-over-year, once again surpassing the growth rate of the overall road freight market. What are the key factors, you know, driving this sustained growth in order volume? And given this trend, I just want to hear your expectation for order volume growth in the second quarter. Thank you.
Thank you management for taking my question.
Speaker Change: My question. My question was about the European orders in the fourth quarter, we see that the order growth was almost 30% year over year once again.
Speaker Change: The policy.
Most of the overall market.
Speaker Change: Markets are what are the key factors driving this.
Speaker Change: Well, it's all their volume.
Speaker Change: Given this trend, but just want to hear your expectation for the automotive growth.
Speaker Change: Thank you.
Speaker Change: Yeah.
Simon Tai: Thank you, Eddy. I'll address the rest of the questions directly in English.
Eddy Wang: Thank you Eddie Oh, I'll address the rest of the question historically English.
Simon Tai: So we're very pleased to see our first quarter order volume growth outpacing the industry growth rate of 5% year-over-year by almost 25 percentage points. Considering that the pandemic's impact is gone, and the user demand that accumulated due to the travel restrictions was fully released by the second quarter of last year, we believe that our sustained growth in order volume since the beginning of this year is mainly attributable to the ongoing increase in our market share gain in the road freight sector.
Speaker Change: So we were very pleased to see our first quarter order volume growth outpacing the industry growth rate of 5% year over year by almost a 25 percentage points.
Speaker Change: Considering that the Pandemics impact is gone and the user demand that accumulated to accumulate that due to the travel restrictions was truly released by the second quarter of last year.
Speaker Change: We believe that our sustained growth in other volume since the beginning of this year is mainly attributable to the ongoing increase in our market share gain in the road freight sector, specifically the strong growth momentum in other volume in the first quarter was driven by three main factors the continued expansion of <unk>.
Simon Tai: Specifically, the strong growth momentum in order volume in the first quarter was driven by three main factors, the continued expansion of user scale at both ends, and increased activity among existing users as a result of our enhanced product features and services. So, in terms of user scale, the number of shippers continued to grow steadily during the quarter, with an average monthly active shipper increased by over 22% year-over-year, showing an accelerated growth trend compared to previous quarter And since March, the daily number of new shipper registrations has continued to increase.
Speaker Change: User scale at both ends of the increased activity among existing users as a result of our incomes the product features and services and the incremental volume contribution from our new business.
Speaker Change: In terms of user scale.
Speaker Change: The number of shippers continue to grow steadily during the quarter with an average monthly active shippers increased by over 22% year over year, showing an accelerated growth trend compared to previous quarters and since March the daily number of new shipper registration has continued to increase.
Simon Tai: Also, as we enhance user acquisition efficiency and also strengthen personalized customer service for new users, we're driving more and faster conversions from new user registration to fulfillment. And, more importantly, direct shippers have been a major contributor to this new user growth, bringing high-quality orders to our platform. Regarding product optimization, we have added multiple new functions on the trucker side. Using big data analytics, the platform identifies and labels high-quality orders and matches them with truckers via a bidding process.
Speaker Change: So as we enhance user acquisition.
Speaker Change: Efficiency.
Speaker Change: So strengths and personalized customer service for new users, we're drilling more and faster conversions from new user registration to fulfillment and more importantly direct shippers.
Speaker Change: A major contributor to this new user growth, bringing high quality orders to our platform.
Speaker Change: Regarding product optimization.
Speaker Change: We have added multiple new functions on the truck side using big data analytics to platform identifies a label as high quality, others and not just them with truckers why a bidding process.
Simon Tai: Among the truckers who are qualified to bid, those with higher credit ratings have a better chance of winning the bid, incentivizing those truckers to stay active on our platform to achieve higher credit ratings, and this has created a virtuous cycle within the trucker ecosystem, leading to more effective tiered management of truckers, greater activity among high-quality truckers, and ultimately better for human efficiency. In addition, our new businesses, namely, large-ticket LTL and intercity services, both of them continue to experience rapid, very rapid order volume growth during the quarter.
Speaker Change: Among the truckers quality people, who are qualified to bid on those with hydro credit ratings.
Speaker Change: I have a better chance of winning the bid incentivizing.
Speaker Change: Those truckers to stay active on our platform to achieve higher credit ratings and this has created a virtuous cycle within the trucker ecosystem living leading to more effective tiered management of truckers greater activity among the high quality truckers and ultimately better fulfill beneficial fee.
And then in addition, our new businesses are.
Speaker Change: Namely large ticket L T O an interesting services.
Both of them both of them continue to experience rapid very rapid older volume growth during the quarter.
Simon Tai: We believe that the online penetration of these new businesses, particularly the LTL business, remains relatively low, and given our unique user advantages in the sector, we see significant growth potential in the LTL sector. And looking ahead to the second quarter, despite the high base effect of the post-pandemic reopening in the prior year period, we remain very optimistic about maintaining steady high-quality growth in order of volume. We're also confident that the year-over-year growth rate in the second quarter will be in the range of the mid-20s.
Speaker Change: We believe that the online penetration of the of these new businesses, particularly the LPL business remain.
Speaker Change: Relatively low given our unique user advantages in this sector, we see significant growth potential into alcohol sector.
Speaker Change: Looking ahead to the second quarter despite.
Speaker Change: Despite the high base effect of the post tender.
Speaker Change: Post pandemic reopening in the prior year period, we would remain very optimistic about maintaining steady high quality growth and other volume.
Speaker Change: Also confident that the year over year growth rate in the second quarter will be in the range of mid twenties.
Eddy Wang: Thank you very much, and congratulations to all of you.
Speaker Change: Okay.
Speaker Change: I'll definitely come back and give up.
Operator: The next question comes from Jiulu Li with CICC. Please go ahead.
Speaker Change: Thank you.
Speaker Change: Next question comes from Jude you Joon Lee with <unk>. Please go ahead.
Speaker Change: Yeah.
Jiulu Li: Thank you for accepting my question, Mr. Zhang, Mr. Simon, and Mr. Mao. Congratulations to the company for achieving such outstanding results. I have a question.
Speaker Change: And how the Ah Yeah, Jacob Johnson families by market.
Speaker Change: Wow.
Speaker Change: Uh huh.
Speaker Change: Now they did.
Speaker Change: Not what they would be on the credential actually where you go when you get towards your golf course, I am sure.
Jiulu Li: We can see that in the first quarter, as Mr. Kuo just said, the annual rate reached a record high of 33.5%. In comparison, it increased by nearly 6% in the first quarter of last year. In comparison, the annual rate in the fourth quarter of last year also increased by 1.4%. First, what is the main driving force for the increase in the annual rate? Secondly, I would like to ask what the expected growth trend for the annual rate is for the next few quarters?
Speaker Change: You should think about it.
Speaker Change: You should have seen gosh, if I can just actually sat down not only those little kind of hard jumping Xi'an easy, though should keep all of the new India.
Speaker Change: Monday, you kind of I E. No genius did he do it along because she won't keep all you did for the India No dip in box is not one that you wish you well mine Candy Eddie you shouldn't do I actually don't Nisha Library Nagle from there.
Speaker Change: I went down and then actually thought what I did when I see doesn't mean, they're.
Speaker Change: They're not sure why she said.
Jiulu Li: I will simply translate it for you. The performance rate reached an all-time high of 33.5% in the first quarter, up nearly 6% year-over-year and 1.4% sequentially. What are the key drivers behind the growth, and what are your expectations for the performance rate in the coming quarters? Thanks.
Speaker Change: Now what did you say you have to announce anything.
Speaker Change: One of them rate reached an all time high of 33, 5% in the fourth quarter up nearly 6% year over year and a one 4% decrease sequentially.
Speaker Change: Sequentially, what are the key drivers behind the B.
Speaker Change: Gross and then what are you.
Speaker Change: Spectation wonderful human right in the coming quarters.
Speaker Change: Yeah.
Simon Tai: Thank you, Jiulu. Although the first quarter is typically the off-season due to the Chinese New Year holiday, our platform once again achieved a record fulfillment rate. We believe this success is largely due to our continuous optimization of user structure and dynamic product strategy adjustment. In terms of user structure, order contribution from direct shippers reached 47% in the first quarter. That's up three percentage points year over year, while the fulfillment rates of both low and medium frequency direct shippers averaged over 50% in the quarter.
Thank you Joe.
Speaker Change: Although the first quarter is typically the all season due to the Chinese new year holiday Oh platform. Once again achieved a record fulfillment fulfillment rate. We believe this success is largely due to our continuous optimization of users structure.
And dynamic product strategy adjustment.
Speaker Change: In terms of the use of structured the other contribution from direct shippers reached 47% in the first quarter.
Speaker Change: Up three percentage points year over year, while the fulfillment rates of both low and medium frequency direct shippers averaged over 50% in the quarter.
Simon Tai: Given small and medium-sized direct shippers' higher fulfillment tendency and favorable pricing, this favorable shift in order mix also boosted our overall fulfillment rate. In addition, our enhanced order distribution strategy also played a role in this quarter as the platform's scale effects increased. For example, we efficiently identified median to low-quality order postings and granted truckers who responded to those orders priority access to high-quality orders in their next transactions. We also provided these truckers with monetary incentives, such as commission waivers and cash subsidies, to encourage them to willingly fulfill orders of all quality levels. Furthermore, for truckers who are not picky about orders or who are in a hurry to depart, we also slightly increased the exposure rate of long-tail order posting through the recommendation features on our app, ensuring a steady improvement in the overall fulfillment rate of the platform.
Speaker Change: Small and medium sized direct shippers higher fulfillment tendency and favorable pricing. This a favorable shift in the other mix also boosted our overall fulfillment rate.
Speaker Change: In addition to our enhanced older distribution strategy.
Speaker Change: <unk> also played a role in this quarter as the platform scale effects increased.
Speaker Change: For example, we efficiently identified medium to low frequency medium to low quality other posting and Grumped truckers, who responded to those others priority access to high quality others in their next transactions. We also provided this truckers with money monetary and <unk>.
Speaker Change: Centers, such as commission labor and cash subsidies to encourage them to willingly for few others.
Speaker Change: At Oh, those are all quality levels.
Speaker Change: Furthermore, for truckers, who are not picky about others.
Speaker Change: Alright.
Speaker Change: Already in the heart of the parks. We are also slightly increase the exposure of long tail order posting through their recommendation features in our app, ensuring a steady improvement in the overall fulfillment right off the platform.
Simon Tai: Looking ahead, we aim to onboard more shippers and truckers and foster greater supply and demand to facilitate more matches and optimize the trucker-cargo supply-demand balance. We will also continue to encourage shippers to use product models like Entrusted Shipment and Dapeng Gong, which boast higher trucker acceptance rates and consistently enhance our product features to drive higher fulfillment rates.
Speaker Change: Looking ahead, we aim to onboard more shippers and truckers and foster greater supply and demand to facilitate more matches and optimize their truck or cargo.
Speaker Change: High demand balance we.
Speaker Change: We will also continue to encourage shippers to use product a product models like in trusted shipment and tap and go which both higher trucker acceptance rates and consistently enhance our product features to drive higher fulfillment rates.
Operator: Was there a follow-up, Jiulu?
Speaker Change: Was there a follow up do you do.
Speaker Change: Yeah.
Jiulu Li: And now, thank you very much, very clear.
Speaker Change: No. Thank you very much.
Operator: The next question comes from Charlie Chen with China Renaissance. Please go ahead. Thank you, Mr. Guan, for giving me the opportunity to ask this question. We just heard Mr. Guan mention that since last year, the operating system of the platform has been divided into four phases.
Speaker Change: The next question comes from Charlie Chen with China Renaissance. Please go ahead.
Charlie Chen: Thank you, Mr. Guan, for giving me the opportunity to ask this question. We just heard from Mr. Guan that since last year, the operating system of the driver-separated platform has been effective and has been continuously optimized. So I would like to know what is the company's main strategy and focus for driver-separated operations at the moment?
Speaker Change: And she said why do you think that you want to do it Oh I'm going to tell you. It turns out when it hurts your diagnosis Chinnaiyan like how did you got you got you.
Speaker Change: Sure.
Speaker Change: Do you think that China shop alcohol Yale.
Speaker Change: So you didn't catch it shouldn't cost them more tenant base.
Speaker Change:
Speaker Change: That's all I guess, you'd say oh, what's that fascia.
Speaker Change: Last year the platform. She had struck a ratings system have shown promising initial results, Wisconsin he's done the improvements.
Speaker Change: Could you please elaborate on the key strategies and the focus of truck operation stuff. Thank you.
Simon Tai: Thank you, Charlie. Since the pandemic, restrictions were lifted last year.
Jody: Thank you Jody system pandemic restrictions were lifted last year.
Simon Tai: Our transportation capacity supply has remained sufficient. Our monthly active number of truckers who responded to orders consistently remained above 3 million in the first quarter. Trucker operations have always been a key focus of our platform. As such, we categorize truckers into three distinct groups based on their user profiles, the new truckers, active truckers, and inactive truckers, and implement tailored strategies for each of these groups. For new truckers, our platform guides them to appropriate orders through product optimization, trucker community operations, and easier access to high-quality orders for qualified truckers.
Speaker Change: Our transportation capacity supply has remained a sufficient or monthly active number of truckers, who responded who responded to all those concerns consistently remained above three minutes in the first quarter.
A trucker operations have always been a key focus for our platform as.
As such we categorize trucker truckers into three distinct groups based on their user profiles the new truckers.
Speaker Change: Active truckers and inactive truckers and implement tailored strategies to each of these group for.
Speaker Change: Truckers.
Speaker Change: Platform guides them to appropriate August through product optimization, trucker community operations and easier access to high quality orders for qualified corridors for qualified truckers.
Simon Tai: In addition, we closely monitor new truckers for human error in their first three trials. For existing active truckers, we focus mainly on traffic management, where we deploy targeted operations for different tiers of truckers. These initiatives have effectively cultivated a mindset for quality transactions among truckers. And by leveraging truckers' credit rating and activity metrics, we motivate truckers to increase their transaction frequency, ensuring robust... capacity supply across the platform for those dormant, inactive truckers.
Speaker Change: In addition, we closely monitor our new truckers fulfillment rate and they're in their first three trials, but for existing active truckers, we focused mainly on traffic management, where we deployed targeted operation for different tiers of truckers.
Speaker Change: Our initiatives.
Speaker Change: Effectively calculated a mindset for quality transactions among truckers.
Speaker Change: And by leveraging truckers credit rating and activity metrics, we motivate truckers to increase their transaction frequency.
Ensuring robust.
Speaker Change: Capacity supply across the platform.
So those are dormant inactive truckers.
Simon Tai: We proactively offer incentives such as gift packages for returning truckers and compensation coverage for unsatisfactory experiences, encouraging them to resume business on the platform. Moving forward, we are confident that our proven and refined operational strategies will continue to deliver rewarding experiences for truckers on our platform and allow them to maximize their earnings.
Speaker Change: We proactively offer incentives such as gift packages for returning truckers and the compensation coverage for unsatisfactory experience encouraging them to resume business on our platform.
Speaker Change: Moving forward, we are confident that our proven and refined operational strategies will continue to deliver rewarding experiences with truckers on our platform and allowing them to maximize their earnings.
Speaker Change: Yes.
Speaker Change #100: Thank you Simon.
Operator: The next question comes from Bruce Mee with UBS; please go ahead.
Speaker Change #101: Well go next.
Speaker Change #102: Next question comes from Bruce meet with UBS. Please go ahead.
Bruce Mee: Good evening, Mr. Hui Zhang, Mr. Simon, Mr. Mao Mao. I am Bruce from UBS.
Speaker Change #103: Uh huh.
Speaker Change #104: That's all my Muslim where should you be I suppose Uh huh.
Bruce Mee: First of all, I would like to congratulate you on your very strong performance. I have a question about our entire LASIN program. I would like to ask what the progress of our entire LASIN is in the first quarter and what our strategy is for our entire LASIN in 2024. Okay, I will now translate it into English. Thanks management for taking my questions. I have one question. Could you please provide us with an update on our user acquisition progress during the first quarter and what is the company's user acquisition strategy for 2024?
Our new Gucci shot to confront challenging he is oh.
Speaker Change #105: What should be an issue you'll unt's you want me to manage uncle Notching down no.
Speaker Change #106: So once you want any chance I mean easy towards launching that ginger and should something beyond the EG woman on yours, and you answered Grenache and that's what she was the Oh no one's since our friendship. He went oh, Thanks management for taking my questions. So I have one questions. So could you. Please provide us an update on our user acquisition progressed.
Speaker Change #107: During the first quarter and what's the sort of comedy excuse me our precision strategy for 'twenty 'twenty four thank you.
Speaker Change #106: Yeah.
Simon Tai: Thank you, Bruce, and welcome to the call. The first quarter, as you know, is typically a slow season in terms of user acquisition. Our user base, however, continues to grow rapidly on both sides in the first quarter of 2024. Currently, average daily new shipper registration exceeded 20,000, while trucker averaged over 10,000 daily registrations. The strong user growth momentum was primarily driven by our effective user acquisition strategies. Through a combination of online promotions, truck sticker advertising, offline promotions, and branding campaigns, we have meaningfully increased our brand visibility and awareness, expanding our platform's user community.
Bruce: Thank you Bruce and welcome to the call the first quarter as you know, it's typically a slow season.
Speaker Change #109: In terms of user acquisition, our user base. However continued to grow rapidly on both sides in the first quarter of 'twenty 'twenty four.
Speaker Change #109: Currently our average daily new ship for registration exceeded 20000, while trucker averaged over 10000 baby.
Speaker Change #109: Daily registrations, so strong user growth momentum was primarily driven by our effective user acquisition strategies.
Speaker Change #109: Through a combination of online promotions truck.
Speaker Change #109: Chuck sticker advertising offline promotions and branding campaigns, we have meaningfully increased our brand visibility and awareness.
Speaker Change #109: Spending our platform's user community.
Simon Tai: Our recently relaunched truck sticker advertising model involving outfitting truck exteriors with Yu Man Man branded advertising is one noteworthy example. This promotional campaign has greatly amplified our brand visibility as trucks travel inter-city routes and operate in logistics parks. In 2024, we will continue to integrate online and offline user acquisition channels for optimal impact, with a focus on online channels. We will allocate over half of our user acquisition budget to online initiatives to reach potential users more efficiently and attract more shippers and truckers, propelling the expansion of our logistics service network.
Speaker Change #109: Recently relaunched truck sticker advertising model involving outfitting truck exteriors with my mom branded advertising. It's one noteworthy example, this promotional campaign has greatly amplified our brand visibility.
As trucks travel intercity routes and operating English <unk> parts.
Speaker Change #109: In 'twenty 'twenty four will continue to integrate online and offline user acquisition channels for optimal impact with a focus on online channels will allocate over half of our user acquisition budget to online initiatives to reach potential users more efficiently and attract more shippers.
Speaker Change #109: Truckers propelling the expansion of our logistics service network.
Speaker Change #109: Thank you Simon.
Operator: The next question comes from Brian Gong with Citigroup. Please go ahead.
Speaker Change #110: The next question comes from Brian <unk> with Citigroup. Please go ahead.
Brian Gong: Good evening, Chairman Zhang Hui, Chairman Simon, and Mao Mao. Thank you for accepting my question. First of all, congratulations on a very good performance. My question is about draw revenue. In the first quarter, our draw revenue increased by 61.5%. Can the driver behind this be shared in more detail?
Speaker Change #111: Well I know how to travel agent incentives on model I should just what she wants and she I'm glad you picked up all your G. O you should call your toilet food required or easy to among tweens, who require central Louisiana.
Speaker Change #110: Sure.
Speaker Change #112: No no no I'm sorry.
Speaker Change #110: Yourself.
Brian Gong: Then I would like to ask what adjustments we have made to the strategy for this year's draw and how we should look at the trend of this draw in the next few quarters.
Speaker Change #113: A woman opinion, three Toyota Tonio, Sean I'll use much volatile.
Speaker Change #113: And then that's all upon two commercial Orient you could easily attritional.
Speaker Change #114: Oh Trust me, if myself Eagle first quarter revenues from transaction. So it's all commission Romney searched by 61, 5% year on year or what are the drivers behind this growth are there any adjustments to your commission strategy. This year and how can we look at just the wrong.
Brian Gong: In the first quarter, revenues from transaction service or commission revenues surged by 61.5% year-on-year. What are the drivers behind this growth? Are there any adjustments to your commission strategy this year? And how should we look at the revenue trend in the coming quarters? Thank you.
Speaker Change #115: It's changing into the coming quarters. Thank you.
Simon Tai: Thank you, Brian. In terms of our other coverage, this quarter we rolled out the commission model in 30 new cities, scaling up the total commission city count to 234. Additionally, beginning in the first quarter, we further optimized our commission rules. For example, we eliminated the rule of commission decay based on matching duration so that commissions better reflect order quality. Commissions on high-quality orders are unaffected by matching duration, while low-quality orders are labeled as commission-free.
Brian: Thank you Brian.
Speaker Change #116: In terms of our other coverage.
Speaker Change #118: This quarter, we rolled out the commission model in.
Speaker Change #119: And pretty new new cities is getting up the total commission city count to 234.
Speaker Change #119: Additionally, beginning in the first quarter, we further optimized our commission Ruth.
Speaker Change #119: For example, we eliminated eliminated the route of Commission D. K based on matching duration. So that's commissions better reflect audio quality.
Speaker Change #119: Emissions on high quality orders are unaffected by matching duration, while low quality orders are labeled as commission free.
Simon Tai: As a result, the total monetized order volume surged by nearly 45% year-over-year, increasing the monetized order penetration ratio to approximately 77%. That's up about 8 percentage points year-over-year. And in terms of monetization amount per order, the first quarter average amount, including trucker membership fees for intercity services and commission per transaction, stood at RMB 22.7. That's an increase of approximately 11% year-over-year on a comparable basis. This increase was primarily attributable to our refined monetization strategies.
Speaker Change #119: As a result, the total monetized order volume surged by nearly 45% year over year, increasing the monetized older penetration ratio to approximately 77% that's up about eight percentage points year over year and in terms of monetization amount per order.
Speaker Change #119: The first quarter average amount, including trucker membership fees for Intercity services in commission per transaction students at RMB $22 seven that's an increase of approximately 11% year over year on a comparable basis.
Speaker Change #119: This increase was primarily attributable to our or we find monetization strategies.
Simon Tai: By leveraging big data analytics to identify high-quality order postings and increase their commission rates, we boosted average monetization efficiency per order across the platform without compromising the user experience. Looking ahead, we will continue to optimize our commission strategy and consistently explore high-quality transactions monetization potential to maximize this revenue stream, ensuring robust and long-term advancement of our transaction services. We believe our platform's current monetization level is still relatively conservative and that there's ample room for us to unlock further monetization potential.
Speaker Change #119: By leveraging big data and analytics and identify high quality other postings and increase their commission rates, we boosted average monetization efficiency per order across the platform without compromising the user experience.
Speaker Change #119: Looking ahead, we will continue to optimize our commission strategy and consistently explore high quality transactions monetization potential to maximize this revenue stream, ensuring robust and long term advancement of our transaction services and we believe our platforms current monetization level is still red.
Speaker Change #119: To be conservative and that there's ample room for us to unlock with the the further monetization potential.
Speaker Change #119: Thank you.
Operator: And that concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments.
Speaker Change #120: And that concludes the question and answer session I would like to turn the conference back over to management for any additional or closing comments.
Simon Tai: Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investment Relations. Our contact information for IR in both China and the U.S. can be found in today's press release.
Speaker Change #121: Thank you once again for joining us today, if you have any further questions. Please feel free to contact us at <unk>.
Operator: Have a great day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: [inaudible]
Speaker Change #122: Tony or TPG Investor Relations our car.
Speaker Change #121: Information.
Speaker Change #121: China.
Speaker Change #121: <unk> can be found in today's press release have a great day.
Speaker Change #123: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change #123: Okay.
Speaker Change #123: [music].