ZTO Express (Cayman) Inc (ZTO) 2024 Q1 法說會逐字稿

Good day, and welcome to the ZTO Express First Quarter 2021 financial results conference call. (Operator Instructions) I would now like to turn the conference over to Sophie Li, Head of Capital Markets. Please go ahead.

大家好，歡迎參加中通快遞 2021 年第一季財務業績電話會議。 （操作員指示）我現在將會議交給資本市場主管 Sophie Li。請繼續。

Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results and the Investor Relations presentation released earlier today and available on the company's IR website at ir.zto.com. On the call today from ZTO are Mr. Meisong Lai, Chairman and Chief Executive Officer; 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. They will both be available to answer your questions during the Q&A session that follows.

謝謝你，接線生。大家好，感謝您今天加入我們。該公司的業績和投資者關係簡報已於今天稍早發布，並可在該公司的投資者關係網站 ir.zto.com 上查閱。今天，中通通訊董事長兼執行長賴梅松先生接聽了電話；以及財務長顏慧萍女士。賴先生將簡要概述公司的業務運作和亮點，隨後嚴女士將介紹財務狀況和指導。他們都將在接下來的問答環節回答您的問題。

I remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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, 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.

我提醒您，本次電話會議可能包含根據1995 年《私人證券訴訟改革法案》的安全港條款做出的前瞻性陳述。涉及已知或未知的風險、不確定性和其他因素，所有這些因素都難以預測，並且許多因素超出了公司的控制範圍，這可能導致公司的實際結果、業績或成就與前瞻性陳述中的結果存在重大差異。

Further information regarding this and other risks, uncertainties and factors has been included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future intent or otherwise, except as required under law.

有關此風險以及其他風險、不確定性和因素的更多資​​訊已包含在該公司向美國證券交易委員會提交的文件中。除法律要求外，本公司不承擔因新資訊、未來意圖或其他原因而更新任何前瞻性聲明的義務。

It is now my pleasure to introduce Mr. Meisong Lai. Mr. Lai will grace through his prepared remarks in their entirety in Chinese before I translate for him in English.

現在我很高興向大家介紹賴梅松先生。賴先生將用中文完整地講完他準備好的講話，然後我用英文翻譯給他。

[Interpreted] Hello, everyone. Thank you for joining today's conference call. In the third quarter of 2024, ZTO maintained its industry-leading service quality ranking with a parcel volume of RMB 7.7 billion, which grew 14% year-over-year, we achieved an adjusted net profit of RMB 2.22 billion, representing a year-on-year increase of 16%. In the first quarter of this year, parcel volume of the express delivery industry increased by 25.2% over last year, far exceeded expectations. The booming development with frequent promotions by new live streaming e-commerce and the social network retailing helped stimulate online consumption and fuel the growth of express delivery volumes.

【解讀】大家好。感謝您參加今天的電話會議。 2024年第三季度，中通快遞持續維持業界領先的服務品質排名，包裹量77億元，年增14%，實現調整後淨利22.2億元，較上年同期成長14%。 。今年一季度，快遞業包裹量較去年同期成長25.2%，遠超預期。新型直播電商、社群網路零售的蓬勃發展、頻繁促銷，刺激了網路消費，帶動了快遞量的成長。

On the other hand, it also contributed to an increase in the proportion of low-priced e-commerce parcels. We firmly believe that the ultimate purpose of a business is to create value. ZTO insisted on healthy and sustainable growth and total net growth on profitable parcel volume on the premise of base level volume necessary for scale leverage. In the first quarter, our market share contracted by 1.9% points compared to last year. However, our leading level of earnings among industry peers further widened.

另一方面，也帶動了低價電商包裹佔比的提升。我們堅信企業的最終目的是創造價值。中通在保證規模槓桿所需的基準貨量的前提下，堅持獲利貨量健康可持續成長和總淨成長。第一季度，我們的市佔率比去年下降了1.9個百分點。但我們的獲利領先水準進一步擴大。

ZTO's consistent strategy is to maintain balance in three aspects of growth, including service quality, profitability and scale. At the beginning of 2024, we shifted our focus to service quality. While maintaining a healthy level of volume and achieving optimal profit, we placed more attention and resources on developing differentiated products and services to meet the diverse and personalized needs of customers, which will enhance ZTO's brand awareness and recognition.

中通的一貫策略是在服務品質、獲利能力和規模三個方面保持成長的平衡。 2024年初，我們將重點轉向服務品質。在維持健康的銷售水準、實現利潤最大化的同時，我們更加重視和資源開發差異化的產品和服務，滿足客戶多樣化、個人化的需求，這將提升中通的品牌知名度和認可度。

In the first quarter, we further improved our leading position amongst (inaudible) including end-to-end (inaudible). The responsiveness of to door and on-demand service capability of last mile have improved and the increase in reverse and retail parcel significantly surpassed overall market volume growth. While proactively addressing the structural shift in consumption and express delivery price competition, we focused on our own expanded higher value customer base, increased the proportion of retail parcels and enhanced the revenue structure.

在第一季度，我們進一步提高了我們在（聽不清楚）包括端到端（聽不清楚）方面的領先地位。到門響應速度和最後一公里按需服務能力提升，逆向和零售包裹增幅明顯超過整體市場量增幅。我們在積極因應消費結構性轉變和快遞價格競爭的同時，著力拓展自身高價值客戶群，提高零售包裹比重，優化收入結構。

In the first quarter, our core Express ASP decreased to $0.04 year-on-year, which was significantly lower than our industry. Thanks to further implementation of lean management initiatives, our combined sorting and transportation costs per parcel decreased by $0.06 compared to last year. And in combination with a stable corporate cost structure, both profit per parcel and total profit have increased.

第一季度，我們的核心 Express ASP 年減至 0.04 美元，明顯低於業界水準。由於精實管理措施的進一步實施，我們每個包裹的綜合分類和運輸成本比去年下降了0.06美元。加上穩定的企業成本結構，單件利潤和利潤總額均有所成長。

Entering into the second quarter, the industry volume demonstrated strong growth momentum. Meanwhile, price competition remains fierce, particularly in major regions. ZTO remained firm on our strategic focus and execution surrounding the following main tasks: First, improved transit efficiency, taking innovative approach towards the mature and established operating framework, rely on digitization and data analytics to drive process management in the problem solving, focus on safety production, time guarantee and resource utilization throughout the entire chain to improve quality and efficiency and reduce sorting frequency.

進入二季度，產業體量呈現強勁成長動能。同時，價格競爭依然激烈，尤其是在主要地區。中通公司堅定戰略重點和執行力，圍繞以下主要任務：一是提高運輸效率，對成熟成熟的營運框架進行創新，依靠數位化和數據分析驅動流程管理解決問題，注重安全整個鏈條的生產、時間保證和資源利用，提高品質和效率，降低分類頻率。

Second, enhanced product mix, diversify and enrich express delivery services, increase market penetration of distinct products, such as ZTO [Hubei]. Synergistically leverage ZTO Logistics ecological resources, develop capabilities for comprehensive supply chain management, refined differentiated products and services in order to increase brand awareness and recognition.

二是優化產品結構，豐富及豐富快遞服務，提高中通等特色產品的市場滲透率。協同利用中通物流生態資源，打造綜合供應鏈管理能力，精進差異化產品與服務，提升品牌知名度與認可度。

Third, effectively address press competition. Stay tuned into market intelligence and take clear account of our own resources, improve precision of pricing policy to become more kit-specific as well as fair and transparent. Fourth, strengthen last mile presence, drive firm implementation of last mile profit sharing strategy and increase the intake of retail parcels, increase direct linkage between sorting center and last but not least plus career. Bringing up delivery personnel to concentrate our servicing last mile customers, improved capabilities and cost competitiveness of last mile posts and offer solutions to serve non-ZTO volumes in term promote healthy development of the industry.

三是有效解決新聞競爭問題。密切關注市場動態，結合自身資源，提升定價政策的精準度，更精準、公平、透明。四是加強最後一公里佈局，推動最後一公里利潤分享策略落地實施，增加零售包裹的吸收量，增強分揀中心與最後一公里事業的直接連動。培養配送人才，集中服務最後一公里客戶，提高最後一公里郵政能力和成本競爭力，提供非中通貨量服務解決方案，促進產業健康發展。

Introducing commercial opportunities to existing express pick up and delivery traffic so as to enhance last mile economics. Fifth, in cover franchisee partners, improve communication, unified thinking out of a kit balance between long-term and short-term interest, protect the rise and interest of all this and careers, ensure fairness of all of network policies, develop useful technology tools to help improve visibility to operational data as well as convenience to conduct a day to day.

為現有的快遞提貨和配送流量引入商業機會，從而提高最後一英里的經濟性。五、在涵蓋加盟商合作夥伴方面，加強溝通，統一思想，平衡長期利益和短期利益，保障這一切和事業的發展和利益，確保所有網路政策的公平性，開發有用的技術工具幫助提高營運數據的可見性以及日常工作的便利性。

The shift from quantity driven to growth in both quantity and quality for China's express delivery industry is inevitable. We have modified our strategic focus to prioritize service quality. The goal is to build new engines of growth and innovate greater competitive advantages with which to forge strong mode for ZTO's longevity.

中國快遞業由數量驅動型轉向數量與品質並重增長是必然趨勢。我們調整了策略重點，將服務品質放在首位。目標是打造新的成長引擎，創新更大的競爭優勢，打造中通的長盛不衰的強模式。

Standing at the turning point of industry transformation, everyone under the ZTO brand, including network partners and couriers will work together to maintain aspiration and confident, shore-up competitive strength and ongoing relevance. Through our comprehensive end-to-end capabilities and leadership role with inclusiveness, we intend to promote healthy competition and growth of the industry. Maximize last mile resource utilization, synergize common interest, hence, creating value for industry participants, investors and ultimately the society.

站在產業轉型的轉捩點，中通品牌下的所有人，包括網路合作夥伴和快遞員，將共同努力，保持志向和信心，增強競爭實力和持續相關性。我們希望透過全面的端到端能力和包容性的領導作用，促進產業的良性競爭和發展。最大化最後一公里資源利用，凝聚共同利益，為產業參與者、投資者甚至社會創造價值。

Now let's hear from our CFO, Ms. Yan about our financial results and targets.

現在讓我們聽聽我們的財務長嚴女士介紹我們的財務表現和目標。

Thank you, Chairman Lai, and thank you, 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. Detailed financial information, including unit economics and cash flow are posted on our website, and I'll go through some of the highlights here.

謝謝賴主席，也謝謝蘇菲。大家好。當我查看我們的財務數據時，請注意，除非特別提及，否則所有引用的數字均以人民幣為單位，百分比變化指的是同比比較。詳細的財務信息，包括單位經濟效益和現金流量，都發佈在我們的網站上，我將在這裡介紹一些重點內容。

In the first quarter, while we paid more attention to quality of services and brand value improvements, we adhered to the principle of profitable growth and achieved a 15.8% increase in adjusted net income to reach RMB 2.2 billion. Our parcel volume grew 13.9% to RMB 7.2 billion, representing a market share of 19.3%, which decreased 1.9 points compared to the first quarter of last year. An increase in the proportional share of lower-priced parcel driven by frequent and deep discounts offered by e-commerce platform, including live streaming and social network retailing that stimulated consumption prompted us to recalibrate effort and resource allocation between volume and profit.

一季度，我們在更加重視服務品質與品牌價值提升的同時，堅持獲利成長原則，實現調整後淨利成長15.8%，達到22億元。包裹量成長13.9%至72億元人民幣，市佔率19.3%，較去年第一季下降1.9個百分點。直播、社群零售等電商平台頻繁、大幅折扣拉動低價包裹佔比上升，刺激消費，促使我們重新調整量與利之間的投入和資源配置。

We limited the amount of incremental volume incentives for the quarter and the ASP of our core express delivery business decreased 2.5% or RMB0.04, which is well below the volume-weighted average ASP decrease of about RMB0.20 for the top four Tongda players. Our total revenue increased 10.9% to RMB 10.0 billion. Total cost of revenue was RMB 7 billion, which increased 7.7%. Overall unit cost for the core express delivery business decreased 5.3% or RMB0.06.

我們限制了本季增加的數量激勵金額，核心快遞業務的平均售價下降了 2.5%，即人民幣 0.04 元，遠低於前四大通達公司的數量加權平均平均售價下降約人民幣 0.20 元。我們的總收入成長10.9%，達到人民幣100億元。總收入成本為人民幣70億元，成長7.7%。核心快遞業務整體單位成本下降 5.3%，即 0.06 元。

Specifically, line-haul transportation costs per parcel decreased 7% to RMB0.47, driven by improved resource utilization and route planning. Unit sorting costs decreased 5.4% to RMB0.30, thanks to continued standardization in sortation procedures and improved labor and automation productivity. Gross profit increased 19% to RMB 3 billion, and gross profit margin rate increased 2 points to 30.1%.

具體而言，由於資源利用率和路線規劃的改善，每個包裹的長途運輸成本下降了 7% 至 0.47 元。由於分類程序的持續標準化以及勞動力和自動化生產力的提高，單位分類成本下降了 5.4% 至人民幣 0.30 元。毛利成長19%至人民幣30億元，毛利率成長2個百分點至30.1%。

Consistent with gross profit income from operations increased 16.2% to RMB2.3 billion and associated margin rate grew 1.1 points to 22.8%. The SG&A expenses, excluding SBC as a percentage of revenue grew 0.1 to 6%, given a stable and sound corporate cost structure. Operating cash flow was RMB 2 billion, which decreased 25.8% against a high base amount for first quarter 2023. In first quarter last year, receivables collection increased during the process of KA accounts optimization.

與此一致的是，營運毛利成長了 16.2%，達到人民幣 23 億元，相關利潤率成長了 1.1 個百分點，達到 22.8%。鑑於公司成本結構穩定健全，SG&A 費用（不包括 SBC）佔收入的百分比增加了 0.1% 至 6%。經營現金流為人民幣20億元，較2023年第一季高基數下降25.8%。

In addition, KA accounts for first quarter of 2024 included newly established headquarter level platform customers who enjoy longer receivable terms. Our retail parcel volume grew over 40% year-over-year under the initiatives to increase higher-value parcels. Adjusted EBITDA was RMB 3.7 billion. Capital expenditure totaled RMB 1.7 billion, and we anticipated, again, annual capital expenditure to be below RMB 6 billion.

此外，2024年第一季的KA帳戶還包括新成立的總部級平台客戶，這些客戶享有較長的應收帳期。在增加高價值包裹的措施下，我們的零售包裹量年增超過 40%。調整後 EBITDA 為人民幣 37 億元。資本支出總計17億元人民幣，我們再次預期年度資本支出將低於60億元。

Now moving on to our guidance. We estimated the overall industry growth to be around 15% to 20% for the year, and we reiterate that our parcel volume for 2024 is expected to be in the range of RMB 34.7 billion to RMB 35.64 billion, representing a 15% to 18% increase. We remain committed to our balanced approach for sustainable and profitable growth. We have prioritized improvements in quality of services and development of differentiated products and services to enhance brand value and recognition.

現在繼續我們的指導。我們預計全年產業整體成長率在 15% 至 20% 左右，並重申 2024 年包裹量預計在 347 億元至 356.4 億元人民幣之間，增幅為 15% 至 18%增加。我們仍然致力於採用平衡的方法來實現可持續和盈利的成長。我們優先提升服務質量，開發差異化產品與服務，提升品牌價值與認知。

Under the near-term market dynamics, we aim to reach our earnings goal and then attain appropriate level of volume share. The above estimates represent management's current and preliminary view, which are subject to change. Now this concludes our prepared remarks.

在近期市場動態下，我們的目標是實現獲利目標，然後達到適當的銷售份額。上述估計代表管理階層目前和初步的觀點，可能會發生變化。現在我們準備好的發言就到此結束。

Operator, please open the line for questions.

接線員，請開通提問線。

(Operator Instructions) And today's first question comes from Qianlei Fan with Morgan Stanley.

（操作員說明）今天的第一個問題來自摩根士丹利的範錢雷。

[Interpreted] Mr. Lai, Ms. Yan and Sofie, congratulations on the very strong earnings growth. I have two questions. The first question is about what Mr. Lai has mentioned. In this year, we have strategically given up some loss-making volumes. What has triggered this strategical focus shift? What's your expectation on the industry consolidation dynamics going forward? My second question is about unit profitability. It's encouraging to see unit profit has increased year-on-year and quarter-on-quarter. If we assume competition strategy from peers to stay largely unchanged for the rest of the year, is it reasonable to expect unit profit expansion on a year-on-year basis will continue for the rest of the year?

[解讀]賴先生、嚴女士和Sofie，祝賀我們非常強勁的獲利成長。我有兩個問題。第一個問題是關於賴先生提到的問題。今年，我們策略性地放棄了一些虧損的業務。是什麼引發了這項戰略重點的轉移？您對未來產業整合動態有何預期？我的第二個問題是關於單位獲利能力。單位利潤較去年同期成長令人鼓舞。如果我們假設同業競爭策略在今年餘下時間裡基本保持不變，那麼預計今年餘下時間裡單位利潤同比增長將持續下去是否合理？

[Interpreted] Thank you very much for your question. Yes, indeed, we readjusted our focus on all three of our priorities. It is -- the reason for that change is because we want to focus more on longer-term profitable growth given the market dynamics as of now, specifically, if I may supplement that the mix or the structure of the parcels in the marketplace included a greater portion of lower valued items, which, in a way, is a pressure or challenge to the profitability of all express delivery businesses.

[解釋]非常感謝您的提問。是的，確實，我們重新調整了對所有三個優先事項的關注。這種變化的原因是，考慮到目前的市場動態，我們希望更專注於長期獲利成長，具體來說，如果我可以補充一下，市場中地塊的組合或結構包括低價值物品佔比較大，這在一定程度上對所有快遞企業的獲利能力構成壓力或挑戰。

And yet on the other hand, our goal is to maintain profitable growth. So, the strategy shift on one consideration is to avoid unnecessary volume. We increased our retail volume. We increased what we call effective volume to maintain our profit focus. And also, at the same time, for the longer-term view, quality of services is not just certain measurements but more for recognition within our consumers' mind as they think about ZTO. Differentiated product and services is something that we must and we need to develop going forward instead of the marginalized competition.

但另一方面，我們的目標是維持獲利成長。因此，策略轉變的一個考慮因素是避免不必要的交易量。我們增加了零售量。我們增加了所謂的有效交易量，以保持我們對利潤的關注。同時，從長遠來看，服務品質不僅僅是某種衡量標準，更多的是消費者對中通的認可。差異化的產品和服務是我們未來必須且需要發展的東西，而不是邊緣化的競爭。

On the second part of the question, we will continue to maintain a balanced growth. We -- there is a saying in our business that loss-making parcels are avoided or strategically speaking, if it's unnecessary we do not want to take in loss-making parcels. The overall industry growth is continued shifting towards quality and quantity. Our goal is to maintain or improve our proportional share on the earnings side as well for the future growth.

關於第二個問題，我們將繼續保持平衡成長。我們——我們行業裡有一種說法，虧損的包裹是避免的，或者從戰略上來說，如果沒有必要，我們不想接收虧損的包裹。行業整體成長持續向品質和數量轉變。我們的目標是維持或提高我們在獲利方面的比例份額以及未來的成長。

Our next question comes from Louis Zing with Haitong Securities.

我們的下一個問題來自海通證券的Louis Zing。

[Interpreted] How much has the proportion of the individual parcels increased in the first quarter of the company compared to the same period last year? How does the company view the prospects of the individual parcel market? What specific measures that the company takes is want to increase the penetration rate in the individual parcels markets, including self-owned and reverse logistics? Thank you.

【解讀】公司第一季個人包裹佔比較去年同期成長了多少？公司如何看待個人包裹市場前景？公司採取了哪些具體措施來提高個人包裹市場的滲透率，包括自有物流和逆向物流？謝謝。

[Interpreted] Thank you very much for your question. First of all, as we mentioned earlier, our first quarter retail volume grew over 40%. Our daily average is now is 5 million parcels and included which 3 million is our own, and then the rest about RMB 2 million is reverse logistics. One of the key initiatives through which we hope to increase and continue to see result is the way to free up our couriers. We installed certain machinery at our outlets. Once they reach certain level of daily volume, we require such equipment to be used so as to free up our couriers. Typically, in the past, carriers have to go to their station or go to their outlets to help sortation and then take their own parcels. They're all meaning the region that they serve, take those parcels back to conduct delivery services, which is very time consuming for the first step in order to get those parcels for themselves.

[解釋]非常感謝您的提問。首先，正如我們之前提到的，我們第一季的零售量成長了40%以上。我們現在日均是500萬個包裹，其中300萬個是我們自己的，剩下的200萬左右是逆向物流。我們希望透過其增加並繼續看到成果的關鍵舉措之一是解放我們的快遞員。我們在我們的網點安裝了某些機器。一旦每天的貨量達到一定水平，我們就需要使用這樣的設備，以解放我們的快遞員。通常情況下，過去承運商必須先到自己的車站或網點幫忙分揀，然後自己取包裹。他們都是指在他們服務的地區，把這些包裹拿回去進行投遞服務，這對他們拿到這些包裹的第一步來說是非常耗時的。

So with those machinery installed, the couriers are able to focus around delivery in providing to door services, including pickup as well. This year, we have a goal to increase our retail volume to 6 million parcels. Last year was less than RMB 4 million. Our ultimate goal is to continue to raise this proportion and through mainly two initiatives. One is to ensure our couriers receive the front-end pricing benefit so that they could certainly truly differentiate pickup and delivery fee income; two, we want to improve the -- what we call it direct linkage, as I described earlier, so that the couriers can spend more time working within a shorter radius in their service area to help improve quality of services, including on-demand, to door delivery and quicker response to pick up so that they can improve retail ratio.

因此，安裝了這些機器後，快遞員就可以專注於送貨，提供上門服務，包括取貨。今年，我們的目標是將零售量增加到 600 萬件。去年不到400萬元。我們的最終目標是繼續提高這一比例，主要透過兩項措施。一是確保我們的快遞員獲得前端定價優勢，這樣他們才能真正實現取件費和派送費收入的差異化；第二，我們希望改善我們所說的直接聯繫，正如我之前所描述的，這樣快遞員就可以在其服務區域的更短半徑內花更多的時間工作，以幫助提高服務質量，包括按需服務，送貨上門和更快的提貨響應，從而提高零售比率。

And our next question comes from Ronald Keung with Goldman Sachs.

我們的下一個問題來自高盛的 Ronald Keung。

[Interpreted] Two questions. One is to think about the eventful express delivery industry landscape. If we're focusing more on profitability in the near term, but less on expanding market share in the near term, how do we think about in the next three to five years, will China's express delivery industry become more like three, four players at similar scale by consolidating to those three, four players? Or where we still expect it to be a one major leading player followed by two to three smaller in the two, three, four. So, some thinking and how strategy may evolve over the next three to five years? Second is as the China market matures, how are we progressed or thinking about expanding beyond China and going global? Any progress there or new strategies you think?

[解讀]兩個問題。一是思考快遞產業的風雲變幻。如果我們在短期內更專注於獲利能力，而不是在短期內擴大市場份額，我們如何思考未來三到五年，中國的快遞業是否會變得更像三、四家公司？ 、四名球員來達到類似的規模？或者我們仍然預期它會成為一個主要的領先者，其次是二、三、四中的兩到三個較小的玩家。那麼，未來三到五年的一些思考以及策略將如何發展？其次，隨著中國市場的成熟，我們的進展或考慮如何走出中國、走向全球？您認為有什麼進展或新策略嗎？

[Interpreted] First question relates to our strategy and specifically relates to our market share. As you know, we always focused on a balanced approach of all three focus areas, meaning quality of services, earnings and also volume. We still believe our goal of achieving 15% to 18% growth is appropriate given the current market environment. We're not to say that we don't want volume. We're only recalibrating the focus because we think for the longer term, the brand recognition in our customers is more important for the long-term sustainable volume growth and profitable growth.

[解讀]第一個問題涉及我們的策略，特別是涉及到我們的市場份額。如您所知，我們始終注重所有三個重點領域的平衡方法，即服務品質、收入和數量。考慮到當前的市場環境，我們仍然認為實現 15% 至 18% 成長的目標是合適的。我們並不是說我們不要數量。我們只是重新調整重點，因為我們認為從長遠來看，客戶的品牌知名度對於長期可持續的銷售成長和利潤成長更為重要。

The -- in addition, the increase in retail volume or hence improvements in our revenue structure will help improve the profitability of outlets and couriers. We believe after a period of time of our initiatives to improve their earnings capability, it will further stabilize our network in preparing for the longer-term growth. In a longer run, we believe we will continue to focus on our own affairs, i.e., any point in time, we will focus on: one, we want quality of services. We also seek profitability. And most importantly, the healthy growth depends on our business brand -- recognition.

此外，零售量的增加或收入結構的改善將有助於提高網點和快遞公司的獲利能力。我們相信，經過一段時間的努力，提高獲利能力，我們的網路將進一步穩定，為長期成長做好準備。從長遠來看，我們相信我們會繼續專注於我們自己的事情，也就是說，任何一個時間點，我們都會關注：第一，我們要服務品質。我們也尋求盈利能力。最重要的是，健康成長取決於我們的商業品牌—認可度。

As a matter of how many are going to remain in the marketplace or what are the proportional share taken by each players is not something that we are able to determine right now. But we are sure of -- what we are sure of is our own goal and focus. We want to continue to enhance and develop growth engines and enhance our competitive advantage. We believe it is those who are with scale, quality of services and profitability that will grow continuously and sustain in a much longer term.

至於有多少人會留在市場上，或是每個參與者所佔的比例是多少，我們現在還無法確定。但我們確信——我們確信的是我們自己的目標和重點。我們希望繼續增強和發展成長引擎，增強我們的競爭優勢。我們相信，那些具有規模、服務品質和獲利能力的企業將持續成長並長期維持。

The second part of your second question is relating to our international business. Throughout the year, ZTO has formed a rich cross-border product layout with business types, including import bounded, direct mail, freight forwarding, warehousing, export, dedicated line, etc., in Southeast Asia, including Cambodia, Laos, Myanmar and Africa, Nigeria, Kenya, Uganda, Egypt, South Asia, including Pakistan and some of the other regions have all developed local express services on the ground.

你的第二個問題的第二部分與我們的國際業務有關。全年中通在柬埔寨、寮國、緬甸、非洲等東南亞地區形成了進口保稅、直郵、貨代、倉儲、出口、專線等豐富的跨境產品佈局。部分地區均已發展本地快遞服務。

The -- given the rebound in the international business recently due to standardization in cross-border market price, the smooth expansion of new specialty line services are some of the things that we are exploring. The company will further attempt to develop international individual and boutique services while strictly controlling cost efficiencies, seeking cost efficiencies so that we are expected to further expand that part of our strategy of future growth.

——鑑於近期國際業務因跨境市場價格標準化而有所回升，新專線服務的順利拓展是我們正在探索的一些事情。公司將進一步嘗試發展國際個人和精品服務，同時嚴格控製成本效率，尋求成本效率，以便我們有望進一步擴大我們未來成長策略的這一部分。

And our next question from (inaudible) with Zhonghong Securities.

我們的下一個問題來自中弘證券（聽不清楚）。

[Interpreted] Thank you for giving me this opportunity to ask these questions. And the first question is perhaps most concerning and right topic in market right now can be expressed delivery industry structure, the uplines. We have always believed that the express delivery industry has economies of skill and the strong will to remain strong in the future. However, the gross rates of CapEx volume last year and the first quarter of this year do not seem to support this judgment.

[解讀]感謝您給我這個機會提出這些問題。第一個問題也許是目前市場上最受關注、最正確的話題，可以是快遞產業結構，也就是上線。我們始終相信，快遞業擁有技術經濟和未來持續發展的堅強意志。然而，去年和今年第一季的資本支出毛利率似乎並不支持這個判決。

We found that the share of second tier companies have increased significantly and cost optimization seem to be accelerating. We'd like to ask how you view the (inaudible) of the express delivery industry and with the market share will still be (inaudible) in the next five to ten years? Is service quality of profits are more important than market share? And where is the bottom line of our company's market share? Second question is how long does our (inaudible) expect to take achieve consumer awareness and product upgrades? What goals we want to achieve in the long term of the future?

我們發現二線企業的市佔率明顯增加，成本優化似乎正在加速。請問您如何看待快遞行業（聽不清楚）以及未來五到十年的市場份額（聽不清楚）？利潤的服務品質比市場佔有率更重要嗎？而我們公司市佔率的底線在哪裡？第二個問題是我們（聽不清楚）預計需要多長時間才能實現消費者意識和產品升級？從長遠來看，我們希望實現哪些目標？

[Interpreted] Thank you very much for your question. First, relating to the market share dynamics going forward. It is important to view an express delivery company or any express company on all three aspects, not just only on market share. Those all three aspects are volume certainly, profit and importantly quality of services because we are looking at the express delivery business growth as a marathon. Our shift in the focus of our -- among all three is specifically for the purpose of a longer-term growth.

[解釋]非常感謝您的提問。首先，與未來的市佔率動態有關。看待一家快遞公司或任何一家快遞公司，要從三個方面來看待，而不僅僅是看市場份額。這三個方面當然是數量、利潤和重要的服務質量，因為我們將快遞業務的成長視為馬拉松。我們在這三個方面的重點轉變是專門為了長期成長的目的。

Indeed, our first quarter market share has decreased. But yet, we are also looking at a healthy level of our quality of earnings and including the quality of earnings of our network partners. We think the longevity of a business depends on balanced growth of all these three areas and focusing more on our own capability for much longer future growth, including developing consumers' awareness of our brand and the value recognition will help us achieve greater market presence with healthier earnings and richer product and services. So, this goes into the second part of the question.

事實上，我們第一季的市佔率有所下降。但是，我們也在關注我們的獲利品質的健康水平，包括我們網路合作夥伴的獲利品質。我們認為企業的長壽取決於這三個領域的平衡成長，更專注於我們自身的能力，以實現更長遠的未來成長，包括培養消費者對我們品牌的認知和價值認可，這將有幫助於我們以更健康的方式獲得更大的市場份額。因此，這進入了問題的第二部分。

We are continuously leading in the quality of services. We hope in the future that we will become one of the top choices among the players of the industry, including (inaudible). Our goal is to pull apart or pull away from the homogenous competition, specifically only for pricing among the Tongda players. With our balanced growth in our own business -- it's not to say that we don't want volume. Volume is important, especially for a scaled business model.

我們在服務品質方面持續領先。我們希望未來我們能夠成為行業參與者的首選之一，包括（聽不清楚）。我們的目標是拉開同質化競爭，特別是在通達玩家之間的定價上。隨著我們自己業務的平衡成長，這並不是說我們不想要銷售。數量很重要，尤其是對於規模化的商業模式。

Our first quarter and including today's daily volume is between RMB 95 million to RMB 100 million, so that our scale leverage and cost productivity gain will continue to demonstrate. The entire industry with its current growth and what we anticipate for the future, which is going more towards quality and quantity together. The profitability will gradually release.

我們第一季（包括今天的每日交易量）在人民幣 9,500 萬元至人民幣 1 億元之間，因此我們的規模槓桿和成本生產力收益將繼續顯現。整個產業目前的成長以及我們對未來的預期，將更加重視品質和數量。盈利能力將逐步釋放。

As you know, compared to developed country, the GDP cost of logistics as a GDP percentage of GDP is still not as efficient as those developed country. With our countries focus on going into the factory, going into rural area as well as going overseas. There are huge opportunities represented towards comprehensive logistics growth. Express delivery industry with its scale and network resources already in place has huge advantage under such development scenario of the future.

大家知道，與已開發國家相比，GDP的物流成本佔GDP的比重仍然不如已開發國家。我們國家注重進工廠、進農村、進海外。綜合物流發展蘊藏巨大機會。快遞產業已經具備的規模和網路資​​源，在未來這樣的發展情境中具有巨大的優勢。

So we believe we will continue to focus on our own balanced approach and growth, taking shares where we need to and must but focus more on quality and quantity together will be a sustainable growth in the future.

因此，我們相信，我們將繼續專注於我們自己的平衡方法和成長，在我們需要和必須的地方持有股份，但更多地關注質量和數量，這將是未來的可持續增長。

Thank you. And this concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks.

謝謝。我們的問答環節到此結束。我想將會議轉回管理階層進行閉幕致詞。

Thank you again, everybody, for joining today's call, and we look forward to speak with you off-line when you have further questions.

再次感謝大家參加今天的電話會議，當您有其他問題時，我們期待與您線下交談。

Thank you. This concludes today's conference call. We thank you all for attending today's presentation.

謝謝。今天的電話會議到此結束。我們感謝大家參加今天的演講。