ZTO Express (Cayman) Inc (ZTO) 2025 Q1 法說會逐字稿

Good day, and welcome to the ZTO Express to announce first-quarter 2025 financial results conference call. (Operator Instructions) Please note this event is being recorded.

大家好，歡迎參加中通快遞2025年第一季財務業績電話會議。（操作員指示）請注意，此事件正在被記錄。

I would now like to turn the conference over to Sophie Li, Head of Capital Markets. Please go ahead.

現在，我想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 were released earlier today and are available on the company's IR website at ir.zto.com.

謝謝您，接線生。大家好，感謝大家今天加入我們。該公司的業績和投資者關係報告已於今天稍早發布，可在該公司的投資者關係網站 ir.zto.com 上查閱。

On the call today from ZTO are Mr. Meisong Lai, Chairman and Chief Executive Officer; and Ms. Huiping Yan, Chief Financial Officer. Mr. Lai will give a brief overview of the company's business operations and highlights followed by Ms. Yan, who will go through the financials and guidance. They will both be available to enter your questions during the Q&A session that follows.

今天參加電話會議的中通有董事長兼執行長賴梅松先生；以及財務長嚴慧萍女士。賴先生將簡要介紹公司的業務運作和亮點，隨後顏女士將介紹財務狀況和指導。在接下來的問答環節中，他們都可以回答您的問題。

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 in the event 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》的安全港條款所做的前瞻性陳述。此類聲明是基於管理層對事件市場和經營狀況的當前預期，並與涉及已知或未知風險、不確定性和其他因素的事件有關。所有這些都難以預測，其中許多超出了公司的控制範圍，可能導致公司的實際結果、績效或成就與前瞻性陳述中的內容有重大差異。

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

有關這些和其他風險、不確定性和因素的更多資​​訊包含在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、未來事件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 read through his prepared remarks in their entirety in Chinese before I translate for him in English.

現在我很高興介紹賴梅松先生。賴先生將用中文完整宣讀他準備好的發言稿，然後我會用英文為他翻譯。

(spoken in Chinese)

（用中文說）

(interpreted) Hello, everyone. Thank you for joining today's conference call. In the first quarter of 2025, ZTO maintained its industry-leading service quality, delivered a total parcel volume of RMB8.5 billion, up 19.1% year over year and achieved an adjusted net income of RMB2.3 billion, which increased 1.6% year over year our service quality, scale, and profitability continue to lead the industry.

（譯）大家好。感謝您參加今天的電話會議。2025年第一季，中通快遞維持業界領先的服務品質，累計完成包裹業務量85億元，較去年同期成長19.1%；實現調整後淨利23億元，年增1.6%，服務品質、規模效益、獲利能力持續維持業界領先。

In the first quarter of 2025, the extra delivery industry grew its parcel volume by 21.6%. And However, the proportion of lower value parcels further enlarged and the price competition continued to intensify. In addressing the misalignment between volume growth and revenue expansion we remain focused on service quality and volume growth. And while rejecting rational pricing practices, we strategically increased our penetration into the low-value Parcel segment.

2025年第一季度，額外遞送行業的包裹量增加了21.6%。但低價值包裹的比例進一步加大，價格競爭持續加劇。在解決銷售成長與收入擴張之間的錯位問題時，我們仍然關注服務品質和銷售成長。在拒絕合理定價做法的同時，我們策略性地增加了對低價值包裹領域的滲透。

On one hand, we continuously improve end-to-end timeliness and lower the unit costs through process standardization and integration. We were able to lead the way with speed to solidify rent advantages and leverage excellence to further efficiency gains.

一方面，我們透過流程標準化和整合化，不斷提高端到端的時效性，降低單位成本。我們能夠快速領先，鞏固租金優勢，並利用卓越優勢進一步提高效率。

On the other hand, as a part of the strategy to build long-term competitive advantages, we beat our efforts to empower our network partners through keeping the policies relatively stable yet urging improvements in last-mile service capabilities and cost competitiveness.

另一方面，作為建構長期競爭優勢的策略，我們在維持政策相對穩定的同時，大力賦能網路合作夥伴，提升最後一公里服務能力和成本競爭力。

Notably, the company has facet progress in developing differentiated products and services.

值得注意的是，該公司在開發差異化產品和服務方面取得了長足的進步。

First, ZTO earned greater trust and opportunity deepened collaboration with e-commerce platforms and their enterprise customers through continuously improved service quality and the coverage. Retail parcel volume increased 46% year over year in first quarter with reverse logistics volumes surged over 150%. We strengthened brand awareness and customer loyalty, enhanced product mix brought a RMB0.12 positive shipping ASP for core Express services in first quarter.

一是中通透過不斷提升服務品質和覆蓋範圍，贏得了電商平台及其企業客戶的信任，並有機會深化合作。第一季零售包裹量年增 46%，逆向物流量激增 150% 以上。我們加強了品牌知名度和顧客忠誠度，增強了產品組合，為第一季核心快遞服務的運費平均售價帶來了人民幣0.12元的正值。

Second, through digitization and accountability metrics, unit transportation, and sorting costs decreased by RMB0.09 year over year demonstrating DTE's commitment to sales improvement as well as its ability to detect problems and come up with practical solutions effectively. Combining continuous cost efficiency gains and the disciplined SG&A spending, we maintained control over profitability amid intense competition.

其次，透過數位化和問責制指標，單位運輸和分類成本年減0.09元人民幣，體現了DTE對銷售改善的承諾以及其有效發現問題並提出切實解決方案的能力。透過持續提高成本效率和控制銷售、一般及行政費用 (SG&A) 支出，我們在激烈的競爭中保持了對盈利能力的控制。

Entering the second quarter, the express delivery industry kept a high growth momentum, yet the price competition further intensified. Despite heated competitive landscape, we remain committed to strategic goals we set at the beginning of this year. That is a hold high-quality, outpace industry average volume growth, and a reasonable level of profit. These specific initiatives and measures include the following four aspects.

進入二季度，快遞業持續保持較高成長勢頭，但價格競爭進一步加劇。儘管競爭激烈，我們仍堅持年初所訂定的策略目標。即持有優質股，銷售量成長超過行業平均水平，且獲利處於合理水平。這些具體措施和措施包括以下四個面向。

First, enhanced effectiveness of network policy by promoting Cross regional collaboration and resource allocation from end to end. The targets that are clear and aligned with market dynamics as well as tailor made to include performance-specific incentive mechanism. Under the principles of fairness, transparency and the uniformity, we will adopt tiered approach to specifically unlock value potential by both new and existing customers. Fostering a productive model that come assets volume prove and stability.

一是促進跨區域協作和端到端資源配置，增強網路政策成效。目標明確、與市場動態一致，並有針對性地包含績效特定的激勵機制。在公平、透明和統一的原則下，我們將採用分層方法，專門釋放新舊客戶的價值潛力。培育資產規模證明和穩定的生產模式。

Second, strengthen last-mile capabilities and profitabilities by layering our delayering partner network structure where appropriate, advancing the build-out of network partners working capability and efficiency. Furthering initiatives such as establishment of direct linkage between outlets and last-mile posts, offering sufficient profit share to incentivize carriers to service retail parcels. And integrating commercial opportunities from local release.

二是強化最後一公里能力與獲利能力，適度推進合作夥伴網路結構分層，提升網路合作夥伴作業能力與效率。進一步採取舉措，例如在網點和最後一英里站點之間建立直接聯繫，提供足夠的利潤分成以激勵承運商為零售包裹提供服務。並整合本地發行的商業機會。

These efforts aim to reduce last mile posts, increased retail parcel penetration and enrich income diversification for network partners, all of which aims to drive growth in earnings for both outlets, operators, and careers.

這些努力旨在減少最後一英里的郵局、提高零售包裹滲透率並豐富網路合作夥伴的收入多樣化，所有這些都旨在推動門市、營運商和職業的收入成長。

Third, continuously optimized revenue mix by meeting the quality demand by e-commerce platforms and enterprise clients. Refining differentiated e-commerce logistics products and the supply chain management capabilities, enhancing brand recognition and customer perception.

第三是持續優化收入結構，滿足電商平台及企業客戶的優質需求。完善差異化電商物流產品與供應鏈管理能力，提升品牌知名度與顧客感知。

Last but not the least, maximize resource utilization through systematic and scientific resource planning, procurement, and deployment activate underutilized resources, optimize route planning and low rates through digitization and data analytics.

最後，透過系統、科學的資源規劃、採購和部署，最大限度地提高資源利用率，透過數位化和數據分析，啟動未充分利用的資源，優化路線規劃和低費率。

And establishment of a life cycle management rework to unlock potential for greater operational efficiency. Over the past 23 years, ZTO has evolved from handling less than 100 packages per day to processing over 100 million parcels today with on compromised industry-leading service quality. And we started out with just a dozen or so employees and became a best in the collaborative network of over tens and thousands of partners and constitutes, this transformation reflected the collective wisdom and dedication by everyone under the ZTO brand.

並建立生命週期管理重做以釋放更高營運效率的潛力。23年來，中通快遞從每日平均處理不到100件包裹發展到如今日均處理超過1億件包裹，服務品質始終保持業界領先。而我們從最初只有十幾個員工，到如今在數萬個合作夥伴和合作夥伴的協作網絡中脫穎而出，這一轉變體現了中通品牌下每個人的集體智慧和奉獻精神。

An embodiment of hope and trust by partners and the customers as well as desire and expectations from the country and society. In response to today's white heart competition and the structural challenges in volume compensation, ZTO's strategic priority is to solidify our leadership in quality and scale while achieving a reasonable level of profit. We believe the shift in competitive landscape is accelerating.

寄託合作夥伴與客戶的希望與信賴，寄託國家與社會的期盼與期待。針對當今白心競爭和數量補償的結構性挑戰，中通的策略重點是鞏固品質和規模領先地位，同時實現合理的利潤水準。我們相信競爭格局的轉變正在加速。

ZTO will adhere to our healthy and sustainable growth principles, reinforce our shared success philosophy, embrace data plus experience-driven innovation, and fulfill our social responsibility and create value. Remain grounded in the present now. We anchor ourselves with foundational work and the tasks at hand. Inspire for future prospects we proactively plan in 45 strategic long-lasting mode, being practical and progressive. We aim to build an enduring enterprise that will strive for generations to bond.

中通將堅持健康永續的成長原則，強化共享成功的概念，擁抱數據+體驗驅動的創新，履行社會責任，創造價值。立足當下。我們以基礎工作和手邊的任務來鞏固自己。展望未來，我們積極規劃，以45個戰略長效模式，務實進取。我們的目標是建立一個能夠為幾代人團結奮鬥的持久企業。

Next, let's welcome our CFO, Ms. Yan, to present the financial results and outlook.

接下來，我們請我們的財務長顏女士來介紹財務表現和展望。

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 comparison. Detailed information on our financial performance, 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，也謝謝索菲。向電話中的各位問好。當我查看我們的財務狀況時，請注意，除非特別說明，所有引用的數字都是人民幣，百分比變化是指同比變化。有關我們的財務業績、單位經濟效益和現金流的詳細資訊已發佈在我們的網站上，我將在這裡介紹一些亮點。

In the first quarter, we adhered to the principle of profitable growth and continue to improve the quality of services and customer satisfaction. Our parcel volume grew 19.1% to reach RMB8.5 billion, and we achieved RMB2.3 billion adjusted net income, which increased 1.6%. Total revenue increased 9.4% to RMB10.9 billion for the first quarter. ASP for our core express delivery business decreased 7.8% or RMB0.11 a given intensified competition. The RMB0.06 impact of decrease in average weight per parcel is RMB0.16 in incremental volume incentives were partially offset by the RMB0.12 positive mix shift from increased proportion of KA volume.

一季度，我們堅持獲利成長的原則，持續提升服務品質與顧客滿意度。我們的包裹量成長19.1%，達到人民幣85億元；實現調整後淨收入人民幣23億元，成長1.6%。第一季總營收成長9.4%至人民幣109億元。由於競爭加劇，我們核心快遞業務的平均售價下降了 7.8% 或 0.11 元人民幣。每件包裹平均重量減少 0.06 元人民幣的影響是增量數量激勵 0.16 元人民幣，但這一影響被 KA 數量比例增加帶來的 0.12 元人民幣的正向組合轉變部分抵消。

Total cost of revenue was RMB8.2 billion, which increased 17.9%. Overall unit cost for the core express delivery business remained flat at RMB0.94. Combined unit cost of sorting and transportation decreased RMB0.09 for the quarter, benefiting from economies of scale and various cost productivity gain initiatives. Specifically, unit cost of line haul transportation decreased 13.2% to RMB0.41, driven by more effective route planning in conjunction with improvements in fleet operations. Unit sorting costs decreased 10.4% to RMB0.27, benefiting from improvements in automation and labor efficiency.

總營業成本為人民幣82億元，成長17.9%。核心快遞業務整體單位成本持平於0.94元。受益於規模經濟和各種成本生產力提高舉措，本季分類和運輸的綜合單位成本下降了 0.09 元人民幣。具體而言，由於路線規劃更有效以及車隊營運改善，幹線運輸單位成本下降 13.2% 至 0.41 元。受惠於自動化程度和勞動效率的提高，單位分類成本下降10.4%至0.27元人民幣。

Other cost of revenue included KA-related and delivery fulfillment costs paid to our network partners and on a total volume denominator basis, it increased RMB0.10, which was in line with KA volume increases. Gross profit decreased 10.4% to RMB2.7 billion and gross profit margin rate decreased 5.4% to 24.7%.

其他收入成本包括支付給我們的網路合作夥伴的KA相關成本和配送履行成本，按總量分母計算，增加了人民幣0.10元，與KA銷量的成長一致。毛利下降10.4%至人民幣27億元，毛利率下降5.4%至24.7%。

The G&A, excluding SBC, decreased 13.5% to RMB517 million. SG&A expenses, excluding SBC as a percentage of revenue, decreased to 4.7%, reflecting strong corporate cost efficiency. Income from operations increased 6.1% to RMB2.4 billion and associated margin rate decreased 0.7% to 22.1%.

不包括SBC的一般及行政開支下降13.5%至人民幣5.17億元。銷售、一般及行政費用不包括 SBC 在內的各項支出佔收入的百分比下降至 4.7%，反映出企業強大的成本效率。營業收入成長6.1%至人民幣24億元，相關利潤率下降0.7%至22.1%。

Adjusted EBITDA increased 0.7% to RMB3.7 billion. and operating cash flow was RMB2.4 billion for the quarter, which increased 16.3%. Capital expenditure for Q1 totaled RMB2 billion. and we anticipate our annual CapEx in 2025 to be between RMB5.5 billion to RMB6 billion. Now moving on to business outlook.

調整後EBITDA成長0.7%至人民幣37億元。本季經營現金流為24億元人民幣，成長16.3%。第一季資本支出總計20億元。我們預計2025年的年度資本支出將在55億元至60億元之間。現在轉向商業展望。

Based on our assessment of today's market conditions and business plan performance outlook, we are reiterating our 2025 full-year parcel volume guidance of RMB40.8 billion to RMB42.2 billion, which equates to a 20% to 24% increase year over year.

根據我們對當前市場狀況和業務計劃業績前景的評估，我們重申 2025 年全年包裹量預期為人民幣 408 億元至人民幣 422 億元，相當於同比增長 20% 至 24%。

These estimates represent management's current and preliminary view, which are subject to change. Now this concludes our prepared remarks. Operator, please open the line for questions. Thank you.

這些估計代表管理層目前的初步觀點，可能會發生變化。我們的準備好的演講到此結束。接線員，請打開熱線來回答問題。謝謝。

(Operator Instructions) Ronald Keung, Goldman Sachs.

（操作員指示）高盛的 Ronald Keung。

(spoken in Chinese) Thank you, management, for taking my question. The first is one here about the competition particularly into the second quarter, given our target, which is to still grow faster than the industry volumes at the first quarter, I think we were slightly slower than the industry. So I want to hear how much of investments are we willing to make and take to achieve this volume target? And what would be the implications to absolute profit for the remainder of the year?

（中文）謝謝管理層回答我的問題。第一個是關於競爭，特別是在第二季度，考慮到我們的目標是在第一季度仍然保持比行業增長更快的速度，我認為我們的成長速度略低於行業水平。所以我想聽聽我們願意投入多少資金來實現這個產量目標？這對今年剩餘時間的絕對利潤有何影響？

Second is we've seen a very good for your retail parcels and also reverse logistics. I want to hear the scale of this business and some of the main targets for this business. Thank you.

其次，我們看到零售包裹和逆向物流的情況非常好。我想了解這個業務的規模以及這個業務的一些主要目標。謝謝。

(spoken in Chinese)

（用中文說）

(interpreted) Thank you for your questions, and I will translate for Chairman answer. First of all, our goal to achieve our volume growth and this is still consistent with our strategy ensuring quality of services and focusing on volume leadership and expanding that leadership while achieving reasonable level of profit.

（翻譯）謝謝您的提問，我將翻譯主席的回答。首先，我們的目標是實現銷售成長，這仍然符合我們的策略，即確保服務品質、專注於銷售領先地位並擴大領先地位，同時實現合理的利潤水平。

The most recent performance, particularly in first quarter, while we maintained overall structure of the network policies to be stable. We specifically introduced the existing volume versus incremental volume policies to incentivize our network partners. So on an overall result basis, we have narrowed the gap between our volume growth to industry average.

最近一段時間的表現，特別是第一季度，我們保持了網路政策整體結構的穩定。我們特意推出了現有數量與增量數量政策來激勵我們的網路合作夥伴。因此，從整體結果來看，我們的銷售成長與產業平均值之間的差距已經縮小。

Certainly, there is still a gap, and then we intend to continue to narrow that because our overall annual strategy remains and our goal or our guidance for the total year continue to is still staying as we reiterated our guidance.

當然，差距仍然存在，我們打算繼續縮小差距，因為我們的整體年度策略保持不變，我們的全年目標或指導也保持不變，正如我們重申的指導一樣。

So for the second part of the question, we have focused on upgrading our revenue structure and particularly achieved great results as associated with the retail parcel and particularly reverse logistic parcels. In the first quarter, our daily parcel volume averaged around RMB6 million, a year-over-year increase of 45% which is significantly outpacing the overall market growth.

因此，對於問題的第二部分，我們專注於升級我們的收入結構，特別是在零售包裹和逆向物流包裹方面取得了巨大的成果。一季度，我們日均包裹量約600萬元人民幣，較去年同期成長45%，大幅高於整體市場成長率。

And among these, we have the reverse logistics exceeded daily volume of RMB3.5 million and a year-over-year growth over 150%. So these are our continued focus as we deepen our cooperation with major e-commerce platforms, which are also expanding their reverse logistics operations. So that we are focusing on measures such as reversing transportation capacity, we train our network partners to be more efficient in meeting the quality requirements and implementing incentive policies to ensure service upgrades and expand the operating regions coverage.

其中逆向物流日交易量超過350萬元，較去年同期成長超過150%。因此，隨著我們深化與主要電子商務平台的合作，這些都是我們持續關注的重點，這些平台也正在擴大其逆向物流業務。為此，我們專注於採取逆轉運輸能力等措施，培訓網路合作夥伴更有效地滿足品質要求，並實施激勵政策，以確保服務升級和擴大營運區域覆蓋範圍。

So as of late, we are looking at our parcel volume increasing even more significantly, reaching towards 8 million or even a peak days over 10 million parcels a day. In connection with the competition, the reverse parcels per unit price also sustained pressure. However, the reverse logistics services has a high barrier for entrants CTO's early mover effort as well as our focus and deep relationship that's built with the platforms will allow us to continue to outpace the rest because everybody else, our peers are also focusing on this area.

因此，最近我們發現我們的包裹數量大幅增加，每天已接近 800 萬件，高峰期甚至超過 1000 萬件。伴隨競爭的加劇，反向包裹單價也承受壓力。然而，逆向物流服務對於進入者來說門檻很高，CTO 的先發優勢以及我們的專注和與平台建立的深厚關係將使我們能夠繼續領先於其他公司，因為其他所有人，我們的同行也都在關注這個領域。

We hope to continue to improve the capacity as well as responsiveness to 2 door delivery and 2-door pickup to help our couriers in servicing our customers properly. As you are aware that improvement of our network partner as well as our peers earnings through increasing their proportion of retail parcel to total delivery or e-commerce parcel their earnings will significantly improve. And that adds to the stability of our overall network.

我們希望繼續提高兩門送貨和兩門取貨的能力和響應能力，以幫助我們的快遞員為客戶提供更好的服務。如您所知，透過增加零售包裹在總遞送或電子商務包裹中所佔的比例，我們的網路合作夥伴以及同行的收入將顯著提高。這增強了我們整個網路的穩定性。

Ronald, I hope answers your question.

羅納德，我希望能夠回答你的問題。

(spoken in Chinese)

（用中文說）

Qianlei Fan, Morgan Stanley.

摩根士丹利的範倩蕾。

(spoken in Chinese) I have two questions. The first question is about unit revenue and cost. On the unit revenue side, we have seen that in the first quarter, the volume incentives went to around RMB0.16. This was higher than about RMB0.04 in the first quarter of last year and RMB0.02 for the full year of last year.

（用中文說）我有兩個問題。第一個問題是關於單位收入和成本。從單位收入來看，我們看到第一季銷售獎勵已經達到了0.16元左右。這高於去年第一季的約0.04元人民幣和去年全年的約0.02元人民幣。

So going forward, how should we forecast unit volume incentives going forward for the full year? And on the unit cost side, we see that in the first quarter, if we impact from KA. The unit cost reduction seems to be more significant than we anticipated at the beginning of the year. So taking into consideration of the first quarter performance and also seems like the fuel price are staying relatively low this year.

那麼展望未來，我們該如何預測全年的單位產量激勵措施？在單位成本方面，我們在第一季看到，如果我們受到 KA 的影響。單位成本的降低似乎比我們年初預期的更為顯著。因此，考慮到第一季的表現，今年的燃料價格似乎也保持相對較低。

Do we have any like updated the forecast in terms of unit cost reduction for the full year? And my second question is about AI so we know that ZTO has been very proactively explore the application of AI into its management and operations. So maybe can you update us? Is there any progress with the AI application into business year-to-date?

我們是否有任何關於全年單位成本降低的更新預測？我的第二個問題是關於人工智慧的，我們知道中通一直非常積極地探索人工智慧在其管理和營運中的應用。那你能告訴我們最新情況嗎？今年到目前為止，人工智慧商業應用有什麼進展嗎？

And going forward, how do you the potential impact from AI application, the merger of AI with our business the impact from that front in terms of our competitive edge versus peers and in terms of like earnings performance. Thank you.

展望未來，您如何看待人工智慧應用帶來的潛在影響，人工智慧與我們業務的融合對我們相對於同行的競爭優勢以及獲利表現方面的影響。謝謝。

(technical difficulty) We lost connection with our speakers. And they joined back.

（技術故障）我們與揚聲器失去了連接。然後他們又加入了進來。

Yes, so we will continue in Qianlei's question. Can you hear us, operator?

是的，那我們就繼續回答千蕾的問題。接線員，你聽得到我們說話嗎？

Yes, we can hear you.

是的，我們能聽到你的聲音。

(spoken in Chinese)

（用中文說）

(interpreted) Thank you for your question. The first question relates to our unit revenue and cost. The SPA decline largely attributed to 2 aspects of the Q1 market environment. One is the competition really reached a white hat stage. The pricing at the front end is continuously sustained pressure from competition.

（翻譯）感謝您的提問。第一個問題涉及我們的單位收入和成本。SPA的下滑很大程度上歸因於第一季市場環境的兩個面向。一是競爭真正達到了白帽階段。前端定價不斷受到競爭的持續壓力。

And then two, the proportion of lower weight of small parcels continue to increase and that both of these give rise to the necessity of first of all, increased incentives to meet the competition some of which are specifically targeted to ZTO.

其次，小包裹重量較輕的比例持續增加，這兩點都導致了首先需要增加激勵措施來應對競爭，其中一些措施是專門針對中通的。

And then two, we do have the positive impact from the reverse in KA volume that is growing significantly and outpacing the total market, and that contributed about RMB0.12 to offset the volume incentives and weight per parcel declined.

其次，我們確實受到了 KA 業務量逆轉的積極影響，KA 業務量正在大幅增長並超過整個市場，這貢獻了約 0.12 元人民幣，以抵消數量激勵和每件包裹重量的下降。

So going forward, we continue to emphasized on the fact that volume is important, certainly need to be supported by high quality of services. So balanced approach continues to be our theme and when necessary, the volume will be the prioritized focus. So with high quality of services, the price and the volume will be adjusted accordingly based on the market condition and competitive situations in specific markets. And that is our intention to go forward. So again, overall, for your first question relating to revenue or per parcel unit revenue, the pricing is largely driven by competition.

因此，展望未來，我們將繼續強調數量的重要性，當然需要高品質的服務來支援。因此，平衡的方法仍然是我們的主題，並且在必要時，數量將成為優先關注的焦點。因此，在提供高品質服務的同時，價格和數量將根據特定市場的市場狀況和競爭情況進行相應調整。這正是我們前進的意圖。所以，總的來說，對於您關於收入或每包裹單位收入的第一個問題，定價很大程度上是由競爭驅動的。

On the cost side, we have continued to move forward on our cost efficiency gain initiatives. In the first quarter, the parcel per unit transportation cost decreased by RMB0.06 on and sorting decreased by RMB0.03. These cost reduction was both driven by economy of scale from the growth in the business volume and as I mentioned earlier, decline in weight and continued cost cutting helped in a way to improve our operating efficiency measures.

在成本方面，我們持續推動成本效率提升措施。一季度，包裹單位運輸成本下降0.06元，分類成本下降0.03元。這些成本的降低都是由業務量成長帶來的規模經濟所推動的，正如我之前提到的，重量的下降和持續的成本削減在某種程度上有助於改善我們的營運效率措施。

Specifically, we refined our management of the operating process continue to strengthen standardization of each segment throughout the whole process. And we also scientifically set cost standards as benchmark utilizing information technology tools to track and compare data in real time, which allows us to detect anomalies more promptly and pinpoint optimization methodologies or solutions more accurately.

具體來說，我們精細化了作業流程管理，不斷加強全流程、各環節的標準化建置。並科學地設定成本標準作為基準，利用資訊科技手段即時追蹤和比對數據，從而能夠更及時地發現異常，更準確地找到優化方法或解決方案。

Second, we also optimized compensation structure. We increased the proportion of performance-based pay in our wage structure linking incentives to operational efficiency, task complexity and workload thereby motivating employees to work more proactively and more efficiently.

二是優化薪酬結構。我們提高績效工資在薪資結構中的比重，將激勵機制與營運效率、任務複雜程度、工作量等掛鉤，激勵員工更積極、有效率地工作。

And third, we set responsibilities in a much more granular level. We have paired up drivers to specific vehicles and leveraged a parcel tracing system to locate operational a long operational process issues or problems that arise. This ensures that responsibility is assigned to each position with clear reward and reprimand mechanism to ensure standardized operations at every step to the extent possible.

第三，我們更細化地設定責任。我們將駕駛者與特定的車輛配對，並利用包裹追蹤系統來定位長期運作過程中出現的問題。做到責任到人、獎懲分明，盡量保證每一步的規範運作。

In the future, we will continue to upgrade and leverage technology tools to transition from reactive to active management and achieving more precise and proactive control of the entire process quality. And at the same time, we will promote further use of smart technology equipment to reduce dependency on manual labor and further expand cost reduction potential in the transit process.

未來，我們將持續升級利用科技手段，被動管理為主動管理，以實現全流程品質更精準、主動的管控。同時，我們將進一步推動智慧技術設備的使用，以減少對人工的依賴，並進一步擴大運輸過程中的成本降低潛力。

Additionally, we will place greater focus on optimizing costs across the entire production chain by enhancing outlet infrastructure and strengthening the direct linkage between outlets and last mile post, which will help further reduce delivery or pick up cost throughout the entire process at the outlet level? The next question relates to our AI application in our business operations. AI has been widely applied in multiple scenarios at ZTO. For example, in our sorting operation, machine vision technology has effectively reduced sorting errors.

此外，我們將更加重視優化整個生產鏈的成本，透過增強門市基礎設施和加強門市與最後一哩郵局之間的直接聯繫，這將有助於進一步降低門市層級整個流程的配送或提貨成本？下一個問題涉及我們業務運營中的人工智慧應用。在中通，AI已廣泛應用於多個場景。例如，在我們的分類作業中，機器視覺技術有效地減少了分類錯誤。

In our route planning, as another example, our monitoring technology and advanced algorithms have optimized delivery route planning. And in order to in the order allocation process, our four segment barcode recognition capability are automatically generating much granular level of delivery directions and help us to launch a larger knowledge-based model, allowing not only our employees to quickly identify work inquires or guidelines as well as the network peers to more efficiently planning their delivery route, their service capacity and capability will be freed up to further focus on retail parcels.

再例如我們的路線規劃，我們的監控技術和先進的演算法，對配送路線的規劃進行了最佳化。而在訂單分配過程中，我們的四段式條碼識別功能可以自動產生更細粒度的配送指示，並幫助我們啟動更大的知識模型，不僅讓我們的員工能夠快速識別工作查詢或指南，還能讓網絡同行更有效地規劃他們的配送路線，他們的服務能力將被釋放，從而進一步專注於零售包裹。

Looking ahead, we will continue to actively explore the application of artificial intelligence in last-mile delivery, autonomous vehicles and other areas to continuously at the right pace matching technology with the operational upgrade and improvement so that we will continue to harvest benefits from ever-improving technological advancements. Thank you.

展望未來，我們將繼續積極探索人工智慧在最後一公里配送、自動駕駛汽車等領域的應用，並持續以適當的節奏將技術與營運的升級和改進相結合，以便我們繼續從不斷改進的技術進步中獲益。謝謝。

Amy Han, Citigroup.

花旗集團的 Amy Han。

(spoken in Chinese) So the first question is about cost. So what is our progress in the direct vintage in the first quarter? And how large can you direct linkage or, let's say, the whole value chain cost optimization contributes to other unit cost cuts in the franchise side and also in the whole value chain this year. And second question is related to the parcel growth in the multi competition so the June 18 shopping festival is approaching.

（中文）第一個問題是關於成本。那我們第一季的直接收穫進度如何？以及直接聯繫或整個價值鏈成本優化對今年特許經營方面以及整個價值鏈的其他單位成本削減的貢獻有多大。第二個問題與多重競爭中的包裹成長有關，因此 6 月 18 日購物節即將到來。

But was this our expectation on the parcel volume for the shopping as well of the volume growth? And will the price competition be from the first season. And because the price competition came earlier and more intense in this year, but what is our view on the room for further ASP drop for the industry?

但這是否符合我們對購物包裹量以及包裹量成長的預期呢？價格競爭會從第一季開始嗎？而且由於今年的價格競爭來得更早、更激烈，我們認為該產業平均售價還有進一步下降的空間嗎？

(spoken in Chinese)

（用中文說）

(interpreted) Thank you very much for your questions. First of all, on our direct linkage from outlets to the last mile of a little bit of progress. This year, we have focused on optimizing outlets layouts and promoting direct sorting and direct delivery to increase the proportion of end-to-end direct linkage.

（翻譯）非常感謝您的提問。首先，我們在從網點到最後一公里的直連上取得了一點點進展。今年我們重點優化網點佈局，推行直分直送，提高端對端直聯比例。

Now this is a critical mission for our overall business focus. The goal is to clearly reduce the last-mile delivery cost and increase the outlet earnings. Our goal of RMB42.6 billion, RMB40.8 billion to RMB42.2 billion goal of total year annual volume would translate into about RMB4 billion of additional cost savings, hence, earning improvements for the network partner at the outlet level so I'll give you an example for the work that we've put in mostly relates to introducing sorting equipment to help improve the process efficiency of our outlets.

現在，這是我們整體業務重點的重要任務。目標顯然是降低最後一英里的配送成本並增加門市收入。我們全年總交易額的目標是426億元人民幣，從408億元到422億元人民幣，這將轉化為約40億元人民幣的額外成本節約，從而為網點層面的網路合作夥伴帶來收益改善。我給你舉個例子，我們所做的工作主要涉及引進分類設備，以幫助提高我們網點的流程效率。

On the average, we have installed a certain equipment that will make the sortation work done by the outlets. And typically, that single machine can sort 8,000 to 9,000 packages per operation time frame. And for those outlets that has at least 30,000 packages per day are suitable for installing these equipment.

平均而言，我們安裝了一定的設備，讓分類工作由網點完成。通常情況下，單台機器每次運作可以分揀 8,000 到 9,000 個包裹。而每天處理包裹量至少3萬件的門市則適合安裝這些設備。

So to give you some specific examples, these will help reduce the sorting cost and based on the current situation of RMB0.02. For the location fixed cost is about RMB0.03. If you bring the package from our sorting super sorting center to the outlets, the transportation cost will be about RMB0.05. So this, together, RMB0.10 saving equates to the RMB4 billion that I referred to earlier.

所以給你舉一些具體的例子，這些將有助於降低分類成本，並基於目前0.02元人民幣的情況。該地點的固定成本約為0.03元人民幣。如果您將包裹從我們的分揀超級分類中心運送到門市，運輸費用約為0.05元。所以這0.10元的節省，相當於我之前提到的40億元。

So this process of establishing direct linkage is aimed at not to our profit statement but to our network partners. To ensure their ability to improve efficiency, reduce cost and secure or solidify network stability because, as you know, as competition heats up and into today's white heart, in today's wide hot condition, it becomes ever so important to maintain trust, hope and belief of the network partners.

因此，建立直接聯繫的過程不是為了我們的利潤表，而是為了我們的網路合作夥伴。確保他們有能力提高效率、降低成本並確保或鞏固網路穩定性，因為正如你所知，隨著競爭的加劇，在當今的白心、在當今廣泛的炎熱條件下，保持網路合作夥伴的信任、希望和信念變得越來越重要。

So our strategy is very clear as the entire industry sustained pressure from the profit, even though volumes are growing as a total, yet the front-end pricing decreasing and proportion of small and light parcels continue to increase. everybody, including ZTO, everybody in the industry are filling the pinch and as you might be able to see from everybody's earnings announcement. So we are focusing on ensuring the connectivity between the super sorting center to outlet to the network couriers are properly set so that the interests are balanced and aligned the division of duty as well as the rewards are suited for today's competitive environment because without a stable network we have no future to speak of.

因此，我們的策略非常明確，因為整個行業承受著來自利潤的壓力，儘管總體數量在增長，但前端定價卻在下降，小件和輕件包裹的比例不斷增加。包括中通在內的所有人，業內的每個人都在填補這一空缺，正如你可能從每個人的盈利公告中看到的那樣。因此，我們專注於確保超級分揀中心與門市以及網路快遞員之間的連接得到正確設置，以便利益得到平衡和協調，職責劃分以及獎勵適合當今的競爭環境，因為沒有穩定的網絡，我們就沒有未來可言。

So on that, our goal being reiterated for the full year as it draw near to the second half of the year, we would be continuing to monitor the market, be flexible and disciplined in our pricing practice and support our network partners in their stability as well as long-term trust and believe so that we can all work together to bring in after the storm normalized market growth in the long run.

因此，在接近下半年之際，我們重申全年目標，我們將繼續監控市場，在定價實踐中保持靈活和嚴謹，並支持我們的網路合作夥伴保持穩定和長期信任，以便我們能夠共同努力，在風暴過後實現長期正常的市場成長。

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

我們的問答環節到此結束。我想將會議交還給管理階層，請他們發表結束語。

Thank you, everybody, again, for joining today's call. As we mentioned that we continue to focus on being our best and putting setting our sights on, of course, the competition at hand and as well as at the same time allocating necessary resources to build strong momentum in narrowing the gap to the industry growth in volume as well as building for a stronger foundation for the future of our business.

再次感謝大家參加今天的電話會議。正如我們所提到的，我們將繼續專注於做到最好，當然，還要著眼於當前的競爭，同時分配必要的資源，以建立強勁勢頭，縮小與行業數量增長的差距，並為我們業務的未來奠定更堅實的基礎。

And we welcome your questions and discussions with us in the next after today's call and look forward to speaking to you all.

我們歡迎您在今天的電話會議後向我們提問並進行討論，並期待與大家交談。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中標記（翻譯）的部分是由現場通話中的翻譯人員說的。翻譯由贊助此活動的公司提供。