ZTO Express (Cayman) Inc.

Good day and welcome to the ZTO Express Third Quarter Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Sophie Lee. Please go ahead.

Thank you, operator. Hello, everyone, and thank you for joining us today. The company's results in the investor relations presentation were released earlier today and available on the company's IR website at ir.zto.com. On the call today from ZTO are Mr. Mason Lai, Chairman and Chief Executive Officer and Ms. Hui-Ding Yan, Chief Financial Officer. July 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 answer your questions during the Q&A session that follows. 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. Further information regarding this and other risks uncertainties and factors is 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 statement as a result of new information, future events, or otherwise, except as required under law. It is now my pleasure to introduce Mr. Mason Lai. Mr. Lai will read through his prepared remarks in their entirety before I translate for him in English.

Hello, everyone. Thank you for attending today's telephone meeting. In the third quarter of 2020, the total business volume of the express delivery industry was 222.7 billion lines, which increased by 37.8%. The total business volume of 46.2 billion lines was increased by 51.2%. It is the same growth record since the third quarter of 2016. The market share has increased by 1.9% to 20.8%. While the scale is expanding, we are working hard to maintain the overall service quality and customer satisfaction. The competition in the third quarter industry is still quite intense. The overall status of the target revenue decline is 12.1% in the middle. We built a large area of land. We have improved the number of free vehicles and further optimized the transport structure, especially the proportion of trailers. Among the 9,250 free vehicles used by the three systems and the headquarter, the proportion of high transport vehicles exceeds 80%, and the proportion of trailers reaches 1 to 1.3. The use of three-way transport vehicles is also even greater. The operating cost of single ticket has dropped by 6.7%. The operating cost of single ticket and distribution has dropped by 8% or 9%. The transformation of new construction facilities and existing facilities in Zhongtong has increased the capability of mechanical and intelligent operation and the deployment of high transport capacity. The transfer efficiency of our platform will be further improved. Second, in terms of network construction, we continue to implement structural flatness and network node generation and upgrade. In the past three years, there have been more than 5,150 network node co-operative partners. More than 30,000 network nodes cover 99% of the country's land and 92% of the townships. We are using headquarters and local network policies to support network co-operative partners in dealing with competition and profit pressure. While using the central financial resources to provide mobile funds and capital investments in the future, to solve the pain points, while clearly and properly implementing the business requirements and assessment mechanism to eliminate the drop-down point or the operator, manage and upgrade the network, The continuous evaluation and inclusion of the joint network will ensure that Shopee is an effective full-time platform to ensure the growth of online business and improve service quality and operational efficiency. Third, in terms of the MoDAN construction, our last step is to increase the size. The Chinese Communist Party and the Chinese Communist Party of China have accelerated the construction of the MoDAN station. These deployments include self-supply cabinets and courier houses, and other multi-faceted end-to-end resources. In fact, in the last three seasons, the total number of shipments exceeded 65,000. In place of the package balance sent to the home, it has already reached 46%. In order to welcome the arrival of hot military equipment and even higher business volume, we have laid the groundwork for B2 and Z2 in terms of controlling the cost and profit space. On September 29, 2020, ZTE was successfully listed in Hong Kong. This gives us a sense of hope and a chance to look forward to the future. We believe that express delivery has just begun its contribution to society. The red line in the express delivery industry has not yet arrived. ZTE's stock code is 2057, which represents the year 2020. China's economy has driven the express delivery industry to develop rapidly. The total order volume during the first day has exceeded 8.2 billion yuan. The total business volume has exceeded 7.6 billion yuan. As you can see, with e-commerce, Thank you, Lai Zong. Allow me to translate first. Hello, everyone, and thank you for joining us today. In the third quarter of 2020,