ZTO Express (Cayman) Inc.

Welcome to the ZTO Express fourth quarter and fiscal year 2023 financial results announcement conference call. All participants will be in a listen-only mode. If 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 a touch-tone phone. To withdraw your question, please press stars and 2. Please note, this event is being recorded. I would like to turn the conference over to Ms. Sophie Lai, Director of Capital Markets. Please go ahead, ma'am.

Thank you, Operator. Hello, everyone, and thank you for joining us today at Companies to Result in an Investor Relations Presentation. were released earlier today and are available on the company's IR website at IR.ZTO.com. On the call today from ZTO are Mr. Mason Lai, Chairman and the Chief Executive Officer, and Mrs. Hui-Ping 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. 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 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 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 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 entire team Chinese before I translate for him in English.

It is 4.8% higher than the average in the industry. At the same time, we achieved 22.1 billion yuan in adjustment and profit. In 2023, the express market maintained a good growth. However, the price competition, especially in the mass production area, is still very strong. While the Chinese Communist Party continues to maintain the general policy of network policy, it is necessary to keep up and be strong in part of the main production industry. The operating profit level has been significantly improved. This is a reasonable control of the management cost structure. In 2023, the operating profit after adjustment increased from 22.4% last year to 4.3% and reached 26.7%. The profit after adjustment last year was 91 yuan, and the growth was 32.3%. China has always been focused on the balance of service quality, market segment, and profit indicators. One of the core values of a business is the value of creation. There is no absolute trend between scale and profit. This has a relative balance. Facing the uncertainty of the big environment in 2023, the change in consumption structure, and the competitive state of the industry, we pay more attention to the construction of service quality and differentiating capabilities. From a more long-term perspective, The development of the express business market marathon, joint network stability, health, and continuity is the key to maintaining the vitality of the Chinese Communist Party, and ensuring that the overall network policy is fair and universal, and that we share the same ideas. It will help us to work together with our joint partners and business partners to build these capabilities, to share resources, to expand and improve services, and to continue to improve important work. It is one of the key factors in the industry in 2023. The total cost of one ticket per year has dropped by 1.7 cents. Among them, the cost of shipping has dropped by 6 cents, and the cost of distribution has dropped by 5 cents. In addition to the scale of the effect, the Chinese Communist Party has not only advanced the formal and formal management, but also the classification of the quality standards and the comparison of the quantity. especially the balance of practical requirements and the maximization of resources, has achieved significant results. With the ability to move, the foundation of the problem that can be found in time, plus the strong and powerful responsibility and execution power of the team, we can quickly implement adjustments and change the ability of the company to keep improving. Entering 2024, the express delivery industry has shown a steady growth in the past two months. The rise of new e-commerce, including broadcasting and social media platforms, has triggered a wave of public consumption. Although the price of the industry has not been stabilized or improved, the change from high-capacity to high-quality development is a natural trend. Continue to do your job well, co-operate with development and security, guard the bottom line of the business, and do well on the network, especially at the center of the network. and the distribution of profits between business owners will be the key work for us in the near future. The main objectives of the implementation include 1. Enhance the efficiency and efficiency of the system network. Increase the transparency and transparency of the policy. Use the business volume of the air-conditioning resource effectively. Make the relationship between profit and loss more secure. 2. 3. Increase the capability of individualization, speed up the display, signage, delivery door, and storage speed. 4. Increase the accuracy and timeliness of data, improve visibility and usability, make the team efficient management and execution, have tools, have grasp. The progress of China's派系优胜利财 will continue to improve the concentration of the industry, the country will continue to support the industry to grow and strengthen, The cost of social logistics is different from that of developed countries. In the process of digitalizing the digital environment and transforming it into quality, express delivery and its future comprehensive logistics capabilities will penetrate into production, distribution, circulation, consumption, and other areas, and provide high-quality services to promote modernization of industries and the development and development of the so-called consumer market. Thank you.