Q3 2024 ZTO Express (Cayman) Inc Earnings Call
Caption&Subtitling by Calixto
This video is a derivative work of the Touhou Project. Any resemblance to anyone, living or dead, is coincidental.
Speaker Change: Good day and welcome to ZTO Express to announce third quarter 2024 financial results conference call. All participants will be in a listen-only mode.
Speaker Change: If you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Speaker Change: After today's presentation, there will be an opportunity to ask questions.
To withdraw your question, please press star then 2.
Please note, this event is being recorded.
Speaker Change: I would now like to turn the conference over to Sophie Li, please go ahead.
Sophie Li: Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results and investor relations presentations were released earlier today and are available on the company's IR website at ir.zto.com.
Sophie Li: On the call today from CTO are Mr. Meisong Lai, Chairman and Chief Executive Officer.
Sophie Li: and Mrs. Huiping Yan, Chief Financial Officer. Mr. Lai will give a brief overview of the company's business operations and highlights, followed by Mrs. Yan, who will go through the financials and guidance.
Speaker Change: They will both be available to answer your questions during the Q&A session that follows.
Speaker Change: I remind you that this call may contain forward-looking statements made under the safe harbor probations of the Private Securities Litigation Reform Act of 1995.
Speaker Change: Such statements are based on management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors.
Speaker Change: All of which are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements.
Further information regarding this and other risks.
Speaker Change: on third-party manufacturers is included in the company's filings with the U.S. Securities and Exchange Commission.
future events, or otherwise, except as required under law.
Speaker Change: It is now my pleasure to introduce Mr. Meisong Lai. Mr. Lai will read through his prepared remarks in their entirety in Chinese, before I translate for him in English. Thank you.
大家好,感谢各位参加今天的电话会议。
Speaker Change: In the third quarter of 2024, the CCP continued to maintain the potential of our service quality in the industry, and the total sales volume reached 87.2 billion units, an increase of 15.9%.
Speaker Change: At the same time, we achieved a profit of 23.9 billion yuan after adjustment.
Speaker Change: President Xi Jinping insisted on high-quality development. At the beginning of the year, we made it clear that we would accelerate the manufacture of differentiated products and services.
Speaker Change: to document brand awareness and customer quality and to find new strategies on launch.
Speaker Change: In the third quarter, the president will continue to strengthen the standardization and systematization of the operation of the division of labor. The all-in-one effective indicator is the number one in Tungdatou. We will continue to reduce the number of customers.
Speaker Change: has won the trust of the platform and the consumers and has strengthened cooperation with various e-commerce platforms in the expansion of land acquisition and offline services in remote areas. The increase in the number of flash business is 40% more than before.
Speaker Change: have effectively alleviated the pressure of single-vote price competition and combined with good and sustained operating cost-effectiveness and stable management cost structure the single-vote operating profit of Zhongtong has further expanded its leading advantage
Speaker Change: In the third quarter, the courier industry maintained a high-profile growth, and the volume of business was the same as before.
Speaker Change: The topic in front of us is how to better balance the market environment at the moment The focus and resource allocation of the core values, such as quality of services, scale, operating profit, and partnership benefits
It's about to begin.
Speaker Change: Maintaining and expanding the competitive advantage of scale is a major prerequisite for achieving high-quantity and high-quality joint development.
本是中通一貫的物色文化
Speaker Change: and the fairness of the Internet policy and the space for future management and implementation improvement. Specific points of reference include...
Thank you for watching!
以梳理网络政策
Speaker Change: We ask that the decision-making of the Binh-Fu-Neng Provincial Administrative Region be more independent, timely and close to the market trends, and strengthen the comprehensive consideration of the customers' understanding and service needs of the production area, in order to match the appropriate price. The income and cost differences between the two sectors of the system should be separated into layers.
The policy is simple, clear, standardized, and transparent.
and Tyson.
Speaker Change: Ideas and specific work: gradually reduce dispatch costs, increase the proportion of individual items, and increase the income of couriers and salespeople.
Speaker Change: Wanting to develop an information technology system HYPER-Touch content of 3AS to service diversified local products While reducing expensives adding вперths and making wider the mindsets of customers thus numerous understandings sustainable business
Speaker Change: 5. By using financial technology tools such as payment and payment, it is more practical to increase the response speed and the ability to secure services, and to increase the benefit of payment.
Speaker Change: Six, maintain operating costs to promote constant production of efficiency while systematically monitoring the 매 입, real estate, capital investment and the operational preparation and the roll-out… Increasing resources is the most scientific way to optimize the utilization...
Speaker Change: The courier industry has been developing for more than 30 years.
Lisa Teixeira
Speaker Change: The rapid and substantive delivery as the economy grows and its rapid supply of source, along with demand for the industrial sector keeps increasing, the demand for plants and infrastructure in the industry continues to diversify.
Speaker Change: As the leader of the industry, the stability of medium-to-long-range network services, the scale advantage of physical capacity production, the ability to generate snow and the ability to fund and store, and the ability to manage and upgrade the generation are our core competitiveness.
Speaker Change: As for ourselves, we will continue to keep the service quality ahead, accelerate the expansion of scale advantages, and ensure the reasonable stability of profit level.
Speaker Change: As a partner, we will continue to strengthen the scale and economic effect of the Modan network.
Speaker Change: By increasing the revenue from the partnerships and visiting artists on the express landed parades and exhire campaigns, we can go across the Middle East and further environmental transition, accomplishing my command of my work, and achieving the goal of staking value on shareholders and taxpayership and chores.
Thank you for watching!
Speaker Change: Thank you, Chairman. Please let me translate first. Hello, everyone. Thank you all for joining today's conference call.
and our profitability remains ahead of our comparable peers.
Speaker Change: ZTL adheres to high quality development and we set a strategic direction at the beginning of the year to accelerate establishment of differentiation in products and services while enhancing brand awareness and recognition.
Speaker Change: Our end-to-end time limits ranked No.1 among tone-deaf players, and the customer complaint rates continue to decline.
We are winning the trust of e-commerce platforms and consumers.
Speaker Change: Our partnerships with various e-commerce platforms have deepened, particularly in reverse logistic services and remote area express delivery services.
Speaker Change: As a result, our retail puzzles grew over 40% year over year.
Speaker Change: The optimization of our revenue structure has effectively alleviated pressure due to price competition.
Speaker Change: Combined with strong and sustained cost efficiency and a stable SG&A expense structure, we further widen our lead in perpetual operating profit.
Speaker Change: China's express delivery industry experienced a 20.1% year-over-year increase in the third quarter. There is an expanding proportion of low-priced e-commerce parcels and the price sensitivity fueled by weak economy contributed to the recent trend of mixed shift.
Speaker Change: We believe that higher quality focused growth of the express delivery industry depends largely on the certainty and the sustainability of the microeconomic recovery and growth.
Speaker Change: The current new economic dynamics presented the challenging question of how to balance across our core values.
Speaker Change: that is Quality of Services, Scale, Operating Profit, and Interest of Franchisee Partners.
Speaker Change: Maintaining and expanding our scale leadership advantage is one of the precursors for achieving growth with both quantity and quality.
Speaker Change: particularly in division of duties and the coordination between headquarters and the provincial management. Alignment of market conditions and the pricing flexibilities, effectiveness of incentives.
Key improvement tasks will focus on the following.
First, reviewing pricing policies thoroughly.
and we shall provide them with greater autonomy.
Speaker Change: making comprehensive assessment of customer needs in high production regions to better align pressing with service requirements.
Speaker Change: for coordinating sales and cost differentials with customized strategies to share resource burden and profit allocation among the pickup partners, delivery partners, and brand operator.
Speaker Change: Second, eliminating complex policy to drive simplicity, standardization, fairness, and transparency.
Speaker Change: Meanwhile, be ready to provide unique incentives coupled with targeted expectations.
Speaker Change: providing certainties and confidence to network partners who will then become more enrolled and ready to respond whenever there is a call for collaboration.
Speaker Change: Third, optimizing the effectiveness of a coordination mechanism organized by locals to take pause and foster accurate communications and synchronized action.
Speaker Change: Their key objectives are to promote end-to-end initiatives aimed at enhancing couriers' willingness to serve retail parcels.
Speaker Change: to promote infrastructure allowing direct linkage from outlet to last mile post.
These objectives will aid the gradual reduction of delivery costs.
Speaker Change: increase retail volume and boost income for network partners and careers.
Thank you for watching!
for
Speaker Change: Accelerating the deployment of Lastmile IT systems and strengthening the commercial content by 2C Life Plus to address diverse needs of local living. It goes beyond decreasing Lastmile delivery costs to deepen and expand connections with consumers and customers, and ultimately benefiting the core business.
Speaker Change: Fifth, leveraging FinTech tools such as Director Settlement to incentivize LASMA responsiveness and on-demand service capability.
thereby improving the economic efficiency of pickup and delivery operations.
Speaker Change: Last but not the least, while driving continuous cost production gain, systematically focus on the pace of capital investment and capacity reserve to maximize resource utilization in a more scientific way.
Thank you for watching!
Speaker Change: China's economic growth has underscored the persistent demand for logistic services over its more than 30 years of development.
Speaker Change: As the industry continues to evolve with increasing volume concentration, yet quality bifurcation, we inevitably will face varying competitive pressures, especially amidst turning points of economic cycles.
Speaker Change: Since ZTL's founding, each new set of challenges we face has given way to a transformation and progress.
Speaker Change: As an industry leader, ZTO's services stability, wide and depth of network, coverage and penetration, cash generation, and financial strength
Speaker Change: ability to renew and upgrade our managerial skills among other core strengths all forges our competitive advantages
Speaker Change: For ourselves, we intend to maintain our leadership in service quality, to widen our leading scale, and to achieve sound profitability.
Speaker Change: For our partners, we are committed to enlarging the footprint and solidify the economic foundation of the Last Mile Post Network.
Increasing earnings by upper franchises and careers.
Speaker Change: These are the essential objectives and tasks for the fulfillment of ZTO's long-term growth and corporate mission so as to create value for our shareholders and society.
Speaker Change: Next, let's welcome our CFO, Ms. Yan, to present the financial results and future plans.
Ms. Yan: Thank you, Chairman and Sophie. Hello to everyone on the call. As I go through our financials, please note that unless specifically mentioned, all numbers quoted are in RMB, and percentage changes refer to year-over-year comparisons.
Ms. Yan: Detailed information on our financial performances, unit economics, and cash flow are posted on our website, and I will just go through some of the highlights here.
Ms. Yan: In the third quarter, we adhered to the principle of profitable growth.
Ms. Yan: and achieved a 15.9% growth in parcel volume to reach $8.7 billion while continuing to improve the quality of services and brand value. Our adjusted net income increased 2% to $2.4 billion.
Ms. Yan: ASP for the core express delivery business increased 1.8% or $0.03 as the impact of decline in the average weight per parcel and increase in incremental volume incentives were offset by the positive impact of the volume increases in retail parcels.
Ms. Yan: Total cost of revenue was $7.3 billion, which increased 15.2%. Overall unit cost for the CoreXpress delivery business remained flat at $0.82.
Specifically, unit cost of Lianhe Transportation decreased 9.7% to $0.39.
Ms. Yan: Driven by better economies of scale, improvements in fleet operation with better resource utilization,
Ms. Yan: Unit sorting cost decreased 6.4% to $0.25, mainly attributable to improved standardization in operating procedures and increased automation.
Key K.A. cost increased 6 cents.
which is in line with KA revenue increases.
Ms. Yan: Gross profit increased 23.2% to $3.3 billion and gross profit margin rate increased 1.4 points to 31.2%.
Ms. Yan: Income from operations increased 17.3% to $2.8 billion, and associated margin remained relatively stable at 26.6%.
Ms. Yan: SG&A expenses, excluding SBC, as a percentage of revenue increased 0.2 points to 5 percent. Corporate cost efficiencies remained intact.
Ms. Yan: Income tax expenses were $555 million compared to $271 million in the same period last year.
Ms. Yan: Let me remind you that in the third quarter of 2023, Shanghai Zhongtongji Network Technology Company Ltd.
Ms. Yan: Operating cash flow was $3.1 billion for the quarter, an increase of 5.9%.
Ms. Yan: to come in at around $6 billion. We are on track to achieve another year of free cash flow.
Thank you for watching!
Ms. Yan: Now let's turn to our guidance. Based on current market and operating conditions, the company revises its previously stated annual guidance.
Ms. Yan: representing an 11.6% to 12.3% increase year-over-year. These estimates represent management's current and preliminary view, which are subject to change.
Ms. Yan: We have guided down our annual volume targets based on our visibility into the rest of the year. The increasing proportion of low-value e-commerce package, which may persist for a while, presented new challenges to our approach to our overall corporate strategy.
We are recalibrating focuses.
among quality of services, volume, market share, and profit.
Ms. Yan: Particularly, modifications are being made to our pricing practices, for example, with the intention of stimulating high-volume daily average customers to work with our brand.
Ms. Yan: These are with the strong intention of regaining volume growth momentum and expand our existing market share leadership.
The quality of our earnings are expected to remain intact.
Thank you for watching!
Ms. Yan: These concludes our prepared remarks. Operator, please open the line for questions. Thank you.
We will now begin the question and answer session.
Ms. Yan: To ask a question, you may press star then 1 on your touch-tone phone.
Ms. Yan: If you are using a speakerphone, please pick up your handset before pressing the keys.
Ms. Yan: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.
Please limit yourself to one question and one follow-up.
Ms. Yan: At this time, we will pause momentarily to assemble our roster.
Thank you for watching!
Speaker Change: The first question today comes from Kwan-Li Phan from Morgan's family. Please go ahead.
Thank you, operator.
Speaker Change: Good morning, Mr. Lai, Mr. Yan and Sophie. Thank you for accepting my question. I am very happy to see that the company has maintained a steady income growth in the third quarter under the pressure of macroeconomic and consumption. I have two small questions. The first question is about a plan for the market next year. Of course, we also very much hope that the macroeconomic can have a good recovery. But if the growth of the market continues to be like this year,
Speaker Change: In the second half of the year or the third and fourth quarter, there is still an increase in quantity, but the high-quality growth is very limited, and the low-quality growth is more. What level will our production capacity plan be at next year? Will we maintain a production capacity plan of about 15%? Or will we focus more on investment?
Thank you so much.
Speaker Change: on the increase of high-quality products in the market. This is the first small question. The second small question is about the execution of the purchase plan.
Speaker Change: Do you have any specific plans for our re-purchase? Do you have any plans for our re-purchase before the end of June next year?
Let me translate for myself.
Speaker Change: Thank you management for taking my question. I have two questions. The first question is about the capacity plan for the next year. If we continue to see relatively low-quality volume growth,
Speaker Change: or capacity growth plan for next year. Will it continue to be like mid-teens growth or we will likely slow down the volume, the capacity growth?
Speaker Change: expectation and focus on the relatively high end of the market.
Speaker Change: share buybacks by the end, by the mid of next year when the plans, the end of the execution plan mentioned last time. Thank you.
Speaker Change: Support for Outdoor Nevada comes from Land Rover Las Vegas and Jaguar Land Rover Reno, inspiring the spirit of adventure with confidence in any terrain.
Xièxiè nǐ de qǐ wēi. 谢谢你的提问。
Speaker Change: In 2025, we still need to do a good job on market share, service quality, and quality of life.
You need a...
Speaker Change: These are the three indicators. Our goal is to make a large profit margin, maintain a reasonable level of profit, and continue to improve the quality of services.
Speaker Change: The first reason is that the policy is fair and unbiased when it comes to the market. We will understand the market in-depth. Based on the type of customer, we will propose a split-purchase policy, to improve the flexibility of the policy, to be precise in marketing, and at the same time to eliminate unreasonable policy differences, to enhance the confidence of the customers.
The third point is to accelerate...
Su Xiaoxin
We will... Next year we will...
Speaker Change: The distribution will be closer to the market. We believe that on the basis of reasonable profits, the ratio of the profit must be improved and the share must also be improved.
Speaker Change: The cost of the site distribution center has not changed, so there is room for improvement.
Thank you for watching!
Xièxiè
This is Huiping Yan talking to you.
Speaker Change: Thank you, Chairman. And I'll translate for the first question and then I'll answer the second question. The overall plan for 2025 is that we will still be focusing on the corporate strategy of balancing approach, a balanced approach to all three, quality of services, volume market share, and also profit.
Speaker Change: regaining the volume growth momentum and it's based on a reasonable level of profit as we continuously improve the quality of services.
There are...
Speaker Change: many specific tasks at hand so again the goal is to expand our market share leadership maintaining
Speaker Change: Reasonable level of profit as we improve, consistently improve our quality of services.
The goal is for our policy to be more relevant.
Speaker Change: and designed around the customer needs and to the market. It needs to be also maintaining its transparency and fairness.
Speaker Change: The policies are going to be simplified as opposed to too complex.
Speaker Change: and so that it's easier to be understood and address very different needs of our customers.
Speaker Change: The flexibility would also be allowed given the autonomous decision-making ability that we will provide to our regional managers.
Speaker Change: The overall intention of this initiative is to improve the trust and confidence of our network partners.
continue to...
improve the design of our last mile operation.
Speaker Change: alleviating work pressure of our couriers and hence helping them work towards improvement of the retail package as a proportion of their total delivery volume.
Speaker Change: The third is, again, continuously reaching our goal of tri-layer throughput design. Reduce the number of sortations overall for all those outlets that met the requirements in terms of volume to go direct between
Speaker Change: the origination and the destination outlets or sortation centers will be encouraged to do so.
Speaker Change: This not only will help us reduce the cost, but also improve timeliness of our overall operation.
Speaker Change: Specifically for next year, regarding our capacity, the current situation of our total installed base is that it's more than capable of supporting 150 million packages a day.
Speaker Change: the retail proportion of our total volume and increasing our market share, these centers with excess capacity would be ready to serve.
Thank you for watching!
Speaker Change: Tony even showed at the Human Data Quiz on the S Zhu Peking Hand Law which states that all non-compulsory algorithms independently interpret won't require removable functions. And the Museum fitted S Huiping Yan as the mission in what it called European Combined Relativity or GERM. This means that Amass's theory of GERM is still very much science related. in terms of its enormous potential and contention to discover inroads help us so that private 83%
Speaker Change: and the systematic approach will be put in place and if any access, we will be giving back to our shareholders in the form of dividend. The buyback...
A rhythm will be in accordance with the market development.
That answers your question.
Speaker Change: The next question comes from Ronald Chung with Goldman Sachs. Please go ahead.
Ronald Chung: Thank you, Mr. Lai, Ms. Yan, and Sophie. The first thing I want to ask is that we see that in the third quarter, the operating profit angle of each package profit system is quite stable. At the same time, our package increase is slower than the industry.
Ronald Chung: will talk about single-packet profit and single-packet increase and what kind of forecast is hidden in it. Then, in the fourth quarter, we will slow down the increase in single-packet profit. What is the situation in the industry? Or maybe we can make more profit in the fourth quarter. Then, the increase in single-packet profit will slow down the increase in single-packet increase.
Ronald Chung: Perhaps... Second is... Thought hard, and read that we mentioned A315 Probably to steady the share Or to make better growth In it, pointed out satellite Therefore, I want to know we have these in satellite The market of radioquiera What our strategy is And then...
Speaker Change: I would like to know the strategy for online services in the next 5 years. Let me translate it for you. in this 4Q peak season.
Speaker Change: Second is on our reverse logistics strategy with e-commerce return parcels. What's our strategy there? The typical collection is a lot more frequent for these reverse logistics. So how are we adjusting our network for that and our strategy?
and Dianing Xie in regards to statistics. Thank you.
Thank you for watching. Bye.
Thank you for your question.
Speaker Change: We conduct the adjustment because of the balance of collaterals and gains. I think that ...
I'm a doctor, I'm a doctor.
Eh...
Speaker Change: For more than during one thousand years, the market's price has been rising little by little in principle, we wanna this in their exclusive term, their profit should have increased
Speaker Change: In terms of profit distribution between central stations and salespeople, some adjustments will be made regarding the volume and increment. This is mainly aimed at next year.
I won't make it in a week
During the building days We didn't make much effort
Speaker Change: when she sang a song about ninth-level kung fu monks in Guangdong.
Pewds
Speaker Change: In terms of the turnover, you can see difference in our services in previous years. We are likely to see higher service worker revenue later.
Speaker Change: The community must develop in order to practice the buddhserva's teachings.
包括站點的能力建設,這三項工作其實是我們需要
Speaker Change: Continuous advancement. We believe that if you want the income of fitness home salespeople to increase, how exactly can this be done? Three tasks need to be continuously advanced, with the endpoint as the granularity.
提高这个萨门的揽进石窖和派送石窖
还是非常明显的
Speaker Change: The second thing is to reduce the cost of sending troops.
and...
如果折连了以后呢,其实可以有两到三毛钱的一票的派遣成本。
If you do a good job, the profit will grow.
Speaker Change: We're disappointed because of the opposite. We have a very clear goal, which is to keep the industry stable.
他的身体就是他的收费要增加 赚点盈利增强 派遣成本下降 他的盈利才会增强 网点好业务员好 网络才会好
to answer your two questions. Thank you.
Thank you for watching!
Speaker Change: For the first question, first of all, thank you very much for your question. The guidance is based on our overall approach to balance between all three corporate strategies.
and the increase in low-volume or low-priced...
volume in the quarter persisted. So in the fourth quarter,
Speaker Change: We maintained our prior practice in the policy making. We didn't make drastic changes.
particularly for those large
Individually, there are price movements directed by different market players.
Thank you. Bye-bye.
Speaker Change: As I mentioned earlier, the work is cut out for us to balance across.
Speaker Change: So, for the fourth quarter parcel volume, it's not necessarily slower in the market, but it is the fact that we have maintained our prior approach to pricing, but being ready and preparing for the next year.
Speaker Change: As far as how we are able to address the increased, perhaps, frequency of customer needs in order to improve the retail volume, if I understand you correctly.
Speaker Change: The thinking behind what we are trying to do to increase the retail volume is very much so driven by our intention to improve the courier as well as the outlet's profitability.
the specific
and that also helps our courier.
Speaker Change: to have more time because of the automation that are being placed at putting place at the outlets so the couriers won't need to go and spend time to help sortation. They are able to spend more time focusing on their area of services, which on many occasions has a very small radius so that they could be more responsive to go to serve door to door.
Speaker Change: concentrated their effort to work with their delivery tasks, they are able to improve the
percentage of retail price, retail volume, hence improve their profitability.
Speaker Change: So with our plan to, one, improve the network partners' or the outlet's profitability because they are able to reduce...
Speaker Change: because of increasing retail volume proportion. With both, then our total network will be more stable because it's more profitable. And that is our intention in the specific...
Speaker Change: that we are consistently carrying out. The initiatives are producing great results as we see a greater portion of our retail volume are coming into the total business.
Ronald, I hope that answers your question.
Speaker Change: The next question comes from Lori Zhang with EIDL Securities. Please go ahead.
Thank you for watching!
Speaker Change: Hello, Sophie. I'm Luo Yuejiang, an education analyst at Haitong. Congratulations on the company's commitment to high-quality development. I'd like to ask you two questions. First, what will be the impact of Taoxi's delivery to China after the opening of Bintong logistics? Will the competition at Yixiangjian be more intense? Does Yixiangjian's development company have any further instructions?
Speaker Change: The second question is about the company's other income projects and how to plan for the future. Let me translate my question.
Speaker Change: The first one is, since Taobao started cooperating with JDL, what impact it might have on GTO? The second question is about the outlook for the other operating income items in the next quarter. Thank you.
Thanks for watching!
Thank you for watching!
Thank you for watching!
电商及卧流平台互相开发,标志着市场经济发展
Speaker Change: President Xi Jinping will not have too much influence. The key is to do our best to protect ourselves.
The second question is...
Will the competition be more intense in the future?
Speaker Change: In the past, the ratio of the Chinese and the Peking Universities was not very high. This year, with the improvement of our ability and quality, the growth of the Peking University has been good.
Speaker Change: I think the key issue is to do your own thing well. The Internet has the best service quality, and meets the needs of users.
Speaker Change: It's all about efficiency. If the same Buddha statue is more cost-effective, the same price, and the Buddha statue is better, then there will be more markets.
Thank you.
Speaker Change: So let me translate for the first question and I'll answer the second one.
Speaker Change: The mutual opening of e-commerce and logistic platforms marks a healthy shift towards a more open and collaborative market environment. Platforms will also choose more cost-effective logistic services based on the principle of fair market competition.
Speaker Change: which helps reduce operational costs and improve efficiency. This not only provides merchants with more diverse logistic options, but also offers consumers better delivery service experiences.
eCommerce platforms.
Speaker Change: And now the second question relating to the other operating incomes.
Speaker Change: largely there is a change because the super VAT deduction, the policy has expired.
Speaker Change: And also for that part of the operating income line, there are less...
Speaker Change: For the items that are related to external policies, we are not able to make control. So what we have expected, the fluctuation excluding those new items will be minimal and going into the next quarters and next years, it will still be stable.
Does that answer your question?
Speaker Change: Oh, thank you. Thank you, Wang Yicheng. I don't have any other questions. Thank you.
Speaker Change: The next question comes from Sun Yung with Western Security. Please go ahead.
Please allow me to translate my question.
Speaker Change: The first question is about the K-8 customer revenue. We observed that the K-8 customer revenue
Speaker Change: We want to know what's the reason behind the high growth.
and what's the gross margin of this?
Speaker Change: of this business and what's the net margin contribution to our future business. This is the first one. And the second one is about the cloud warehousing. We observe that our logistic parks develop quite quickly and we want to know the future development plan of our logistic parks. Thank you.
Thank you for watching!
Thank you so much for watching!
谢谢你的提问
三季度,公司折扣业务3亿票,占比月3.5,折扣收入为13亿,同比
高端架的平台逆向客户,逆向客户比例增加
She is a genius!
三极度开发中平台逆行业务
月1.11, 环域增长25%,单票收入
六块五元环比下降17% 对总部的贡献,利润贡献约五
Thank you.
广告1.5元,主要是各大品牌的逆向的专家。
Meh
are you to the things capital you
The second question about Yuanqu...
and the ecological system.
Speaker Change: Mr. Lew, we recognise you do have some experience and knowledge of our interpreters, and we feel great friendship with all of you. Mr. Liu, I know you like to speak Chinese, it appears you have witnessed a lot of foreign interpreters at Hong Kong Esperanto,
过去几年基础设施投入持续
主要景點城市分佈中心
Speaker Change: 95% or more of our equipment is already built. We have our own production plant and distribution center. In terms of ecological impact, we can share the resources, which will have a greater impact on the co-operation. For example, most of the domestic factories in China used to be separated from the distribution center.
Speaker Change: what these issues are, and how great work has been done. And you have worked enormously to clear the English-speaking community who cannot and does not understand Chinese. And we congratulate Panorama Theater on making this successful film. We, at the moment, we operate as a video-talking studio but, from the perspective of more, the internet space we are talking about, we had the privilege of having more opportunity to communicate with切不好的朋友,
Thank you.
Speaker Change: All of them, including those posted online, can be sent out on the same day. This is faster and more user-friendly.
Speaker Change: The economy has continued to kick in, and operating industry, profitability, and principal have boasted significant improvements.
全面落地综合卧底的精神
Speaker Change: can express gratitude for the hard work they put in for this small opening last year and people in poor places all over the world, and people who did not get to see it. They can do it this year and we will do it next year as well. This is a dream.
相互扶难 谢谢
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First of all, some statistics.
Speaker Change: In the third quarter, the volume of K businesses was $300 million, accounting for approximately 3.5% of our total parcel volume.
112 million
Speaker Change: The main clients come from various e-commerce platforms. As we mentioned earlier, as ZTO continues to improve its quality of services, reduce losses, reduce customer complaints.
So as we focus on
Speaker Change: improving our own capability, we are expecting to continue to increase the retail volume, which again will help our network partners as well as our couriers to improve their quality of earnings.
Speaker Change: and in turn, as they improve their revenue and income, the entire core business will be supported as well going forward.
continuous and repeated output.
Speaker Change: There are many locations where we have storage, and sortation, and ship out, all co-located, which is what we have introduced before, it's called zero distance.
Shipout or shipment
Speaker Change: which not only reduces the cost but also improves the timeliness because we are able to take order all the way to 10 o'clock, 10 p.m. and have that order shipped out during the same day.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Our strategy in developing the total ecosystem to have more comprehensive logistic service capability is in line with our total mission to become the leader in the comprehensive logistic.
Speaker Change: implement this co-locating model and driving greater synergy across the entire logistic services arena.
Thank you for your question.
Speaker Change: This concludes our question and answer session. I would like to turn the conference back over for closing remarks.
Speaker Change: Thank you again for everyone to join today's call. I think it's worth mentioning that we are refocusing our resource allocations. Our goal is to achieve great balance and healthy balance of resources.
Speaker Change: profit and burden-sharing across the center, network partners, and also our couriers. We've been doing well in the past in fair allocation and equitable allocation of
Speaker Change: cost and income and profit among all constituents of our businesses.
Speaker Change: Going into 2025 our goal is to regain our volume growth momentum in order to resume the expansion of our volume leadership and at the same time we are putting in place
effective
initiatives so that we will maintain our operating profitability.
Speaker Change: as well as helping our network partners to improve their efficiency in managing their businesses and improving their profitability so that our network will continue to be healthy and sustainable for the future growth of the entire industry and in line with the recovery of the economy of China.
Speaker Change: Thank you again for your time and we look forward to discuss with you in greater detail.
MEI few Few Fewf Oh Oh Oh Oh Oh
Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Thank you for watching!
Speaker Change: The following is a work of fiction. Any resemblance to anyone, living or dead, is coincidental and unintentional. Any resemblance to anyone, living or dead, is coincidental and unintentional.
Tzuyu Wei, Hieu-Lin Ha Singing Hsuang Tzuyu Wei, Hieu-Lin