ZTO Express (Cayman) Inc.

Good day and welcome to the ZTO to announce third quarter financial results on November 17th, 2021 conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. 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, Director of Capital Markets. 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 are available on the company's IR website at ir.dto.com. On the call today from ZTO are Mr. Mason Lai, Chairman and the Chief Executive Officer, and Ms. Clayton Yen, Chief Financial Officer. Mr. Lai will give a brief overview of the company's business operations and highlights, followed by Ms. Yen, who will go through the financials and the 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 in the 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 balance 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 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 in Chinese before I translate for him in English.

Our market share remains at 20.8%. Since the second quarter of this year, China has been paying more attention and focusing on effective fast-tracking while ensuring service quality and customer satisfaction. At the same time, we have strengthened the mechanism to improve economic efficiency. In the third quarter, we achieved a net profit of $1.5 billion. In the same context, net profit increased by 13.7% in the same period last year. The high-speed and stable development of the express delivery industry is inseparable from the guidance, assistance, and support of the governments and the people. The competitive attitude of the good industry continues to pay attention, care, and guide the regulatory departments. The price that is not limited will inevitably disrupt the market trend of reasonable competition. It brings obstacles to the sustainability development of the industry. The direct guidance and control of the Red Cross is an effective guarantee that the industry will continue to develop stably. In the ongoing industry competition, the CPC pays more attention to guaranteeing profitability and increasing market share at the same time under a stable quality. From the perspective of industry policy, The second and third-tier courier companies have basically withdrawn, and the division of the capital industry is becoming more and more obvious. The industry competition is gradually returning to normal, and the courier price is expected to be stable in 2022. At the same time, we have observed that the share price of the e-commerce market has plummeted. The subject matter in front of us is how to maintain the lead in the new market and policy environment, continue to grow, and realize the change from high quantity to high quality. Tungtung's strategy is still to increase the market segment under the premise of ensuring a high quality service level and achieving a fixed profit target. In different stages of business development, we have managed to balance and control the balance between the three centers, and we have decided on our management priorities and guidelines. In terms of production capacity and network construction, because the essence of express delivery is the drive of production capacity and efficiency, we will continue to increase the investment of production-based facilities, improve the ability to convert, transport, and distribute in four areas, and welcome a larger business volume. At the same time, we will also support non-combatant and system network partners to help the endpoints, strengthen the ability to build, reduce distribution speed, and improve operation efficiency. We will definitely achieve the three goals, starting from the starting point to the end point center, starting from the starting point to the end point center. We will speed up the development of Modan, and open and integrate multi-channel, multi-layered local living scenarios. At the same time as reducing the cost of Modan express delivery, we will increase and widen the link between consumers and customers. In terms of profit and business production, we will use reasonable cost and resources to measure and calculate the fair price, increase the profit and loss of the end point, To strengthen the confidence of the players. At the same time, we will focus on not only the formation and rich individualization needs, but also to strengthen the expansion of service and product diversification, increase investment, improve capability, and accelerate the development and promotion of fast-growing, cold chain, cloud storage, etc. ecological blocks. Surround the customer's needs and pain points. provide comprehensive, multi-layered, individualized, and customized services to improve consumers' awareness and awareness of Chinese brands. In terms of operation and management, we use scientific information as a support to improve operation efficiency by not only improving the digitalization and crystalization level, but also using precise data to improve the decision-making and efficiency of each part of the operation. We will pay attention to the improvement of talent base construction and comprehensive management capabilities. Core management and execution teams will move towards youth and technology drive. Network management will be more in-depth. We will support the stable development of the network from multiple dimensions. At the same time as the complete reduction of wealth, multi-dimensional wealth can help the complete improvement, simplify the regulation of supervision, increase the positive influence, and maintain the network policy. supply and transparency. Increase the sense of belonging, happiness, and sense of achievement of the end-users and businessmen. Challenge the desire to play with water. In the future, the express business will continue to grow at a medium and high speed. The potential for industry development is still great. We will develop in the express industry for a long time, full of confidence and expectation. Do your own thing well, do it firmly, and do it right. We believe Thank you, Chairman. Now please allow me to translate first.