JD Logistics, Inc.

To the ladies and gentlemen, thank you for standing by. Welcome to the JDL fourth quarter and the full year 2025 resource conference call. At this time, all participants are listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Please note that this English simultaneous translation line will be listen-only mode for the duration of the call, including a question-and-answer session. If you wish to listen to the management's arranged statement or ask a question during the question-and-answer session, Do I need to be dialed in to the Chinese lunch line? I will now turn it over to Ms. Song Shuang, head of IR team at JDL. Please go ahead, Shuang. Thank you, Freda. Good day, ladies and gentlemen. Welcome to our first quarter for year 2025 results conference call to another day. Our executive director and the CEO, Ms. Wang Zhenghui, and the author is CFO, Mr. Wu Hao. Before we start, we would like to remind you that today's discussion may contain forward-looking statements which involve a number of risks and uncertainties. As to results and outcomes may differ materially from those mentioned in today's announcement and this discussion. The component of no done take any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss the denials for financial measures for comparison purposes only. For definition of non-offerable financial measures and representation of non-offerable financial results, please refer to the annual results announcement for the year ended December 31st, 2025 issued earlier today. For today's call, management will read prepared remarks in Chinese and will only be accepting questions in Chinese during the question and answer session. A third-party interpreter will provide simultaneous interpretation in English on a separate line for the duration of the course. Please note that English translation is for convenience purposes only. In the case of any discrepancy, management segment in the original language will prevail. I'd like to turn it over to you. Mr. Wang Zhenhui, please go ahead, sir. Dear investors and analysts, welcome to JDL fourth quarter and the full year for 2025 earnings goal. This is Wang Zhenhui, CEO of JDL. Thank you for joining us today. Reflecting on 2025, again, San Francisco County backdrop characterized steady progressive momentum. China's continued transition towards a high-quality innovation-led growth. GDL maintained committed to strengthen our core capacities. Results of enhancing delivery timeliness, stability of overseas network expansion, and further deepening application of cutting-edge technologies will continuously solidify our operational capacities as well as the competitiveness of our products and services, leveraging IASC solutions, premium services, and leading technologies to drop high-quality growth. In both the fourth quarter and the fourth year, we delivered a double-digit revenue growth, sustaining our high-quality fundamental momentum. specifically in the fourth quarter of 2025. Total revenue reached RMB 63.5 billion, representing a year-over-year increase of 21.9%. Non-offensive profit for the quarter amounted to RMB 2.4 billion, up 5.7% year-over-year, with non-offensive profit margin of 3.7%. For the full year of 2025, total revenue was RMB 217.1 billion, increased by 18.8% year-over-year non-offensive profit reached RMB 7.7 billion with non-offensive profit margin of 3.6% maintaining stable and resilient. Now I'd like to highlight the three core differentiators that JDL continue to strengthen in 2025. Our IFC capacity supported by a comprehensive network and diverse portfolio of high-quality customer experience and of application of automation and AI technologies. There are three in totality. First, consistent cultivation of our IFC capacities remains a core strategic priority. Leverage of a nationwide network with expanding global reach together with the deep industry insights we provide customers with reliable and efficient integrated supply chain solutions. By the end of 2025, our warehousing network covered nearly all countries and districts in China, with over 1,600 warehouses and aggregated GFAO seating 34 million square meters. Notably, the integration of our on-demand delivery service in 2025 further strengthened our love for microfactors, completing of a high-permanence delivery network. This enhancement not only improved our payment efficiency and customer experiences, but also increased road opportunities for future business expansion. Leveraging our increasingly comprehensive network coverage, we remain committed to providing end-to-end ISC solutions to our customers while effectively helping customers reduce cost, refine efficiency, enhance competitiveness, We've also achieved a healthy growth in our own business in 2025, revenue from ISV customers which are on the $116.2 billion, representing a 13% year-over-year growth. Of this month, revenue from external ISV customers was on the $35.9 billion, sustaining a trajectory of high-quality growth. We differentiated the solutions such as on the trans-supply chain service model as well as the reverse direction services. We continue to deepen our presence in industry-specific services and expand our service scenarios to meet the evolving demands of our growing customer base. As a result, the number of 10IC customers who serve were reaching 91,151% in 30% of yearly growth. Through extensive industry experience, we have established a series of customer cases that have become benchmarks For example, in the customer goods sector, leverage on high-standard end-to-end service capacity, we achieved extreme luxury segment by securing integrated warehousing and distribution partnership with a globally known luxury brand and travel retailer. To meet the luxury industry's stringent logistic requirements, we established a temperature-humidity-controlled zone with our warehouses, implemented insecure storage solutions for high-value items, covering a full range of operation topics, including TB2C integrated inventory and the reverse quality inspection. To address the pain points previously faced by this customer specifically scouted inventory cross multi-dumpstream channels and low management efficiency, we deployed intelligent warehousing solution that enables centralized, consolidated management for thousands of self-channels within a single warehouse, This approach ensures both product security and service experience by reducing customer over logistic cost by approximately 20%. This opportunity further validates our operational capacities in high-variable, complex scenarios and marks the start-to-end of our engine and service capacities in the luxury and high-end retail sector, leading us to a foundation for deep market penetration moving ahead. In the home appliance sector, we extend our collaboration with a leading brand, creating a close-to-spanning forward network. logistic to reverse recycling, and packaging refurbishment. By leveraging our differential aging capacities and spending service scenarios, revenue generation from this customer's small applicants' business achieved triple digital growth. What steps do we strengthen our leadership in China's ISC market? We are also actively expanding our overseas footprint aiming to replicate and scale up the mature supply chain model developed in China. In 2025, we achieved our goal of doubling the area of self-operated overseas warehouse, opening multiple new warehouses in U.S., U.K., France, Saudi Arabia, and other countries, further enhancing our global warehousing network. By the end of 2025, we operated nearly 200 bonded warehouses. international direct distribution warehouses and overseas warehouses covering aggregated GSA of nearly 2 million square meters. At the same time, we continue to strengthen our last-minute fulfillment capacities in overseas markets. In 2025, we launched our first self-operated express delivery brand, Joy Express. In multiple overseas countries such as Arabia, Joy Express provides high-standard services such as student delivery and cash-on-delivery, among others. but in key regions of UK, France, Germany, and the Netherlands, we offer T11 time-definite delivery services. This has established a comprehensive logistic networking policy, warehousing, sorting, transportation, loss-to-market delivery, significant improvement, fulfillment, and service reliability. The global deployment of our warehousing and distribution integrates supply chain services to all the strengths of our strategic partnership with some more leading industry customers from rapid growth in overseas business, for example, In the Middle East, leveraging other bounded warehouse cluster in the double alley-free zone, we efficiently serve neighboring markets, including the GCC countries, Africa and South Asia. There are one warehouse for multiple countries and bounded upon entry duty payment upon exit from the zone model, we enable customers to centralize image management effectively, avoiding redundant stock across the multiple countries, significantly reducing inventory cost while improving inventory turnover efficiency. As a result, we have become the preferred supply chain partner in the Middle East for numerous Chinese global automotive brands as well as leading for the e-commerce platform. We're the preferred partner. Delivering high-quality customer experiences is now the only foundation for earning customers trust, but also a key driver for sustainable growth in Novo Express and phased-way services in 2025 of revenue from their customers. Primary include express and phased-way services reaching RMB 100.9 billion. Representing a year-over-year growth of 5.7%, we remain committed to drive high-quality growth by focusing on high-quality value services, and continues to strengthen both our timeliness and service capacity. We continue to increase our investments in upgrading our timeliness, so this will work by the end of 2025. JDL will expand into a self-operated or cargo fleet up to 12 planes. The recent induction of the first A3301 body cargo airplane marks a significant breakthrough in our cross-border transportation capacity and long-distance route capacity in 2025. We launched multiple new international cargo routes, including Shenzhen China to Bangkok, Thailand, and Shenzhen China to Yangon, Myanmar. Gradually, this bandwidth not only enhances the timeliness and reliability of our aircraft transportation, but also provides exceptionally stable capacity support for products requiring high timeliness. Our continued enhanced timeliness capacities also drove growth in our high-value freight products based in 2025, Revenue from key threat products such as lychee, hairy crab, and beef and lamb saw substantial year-over-year growth, for example. For beef and lamb originated from Qinghai, we launched a dedicated all-cargo airplane route enabling as fast as the next morning delivery from Qinghai to thousands of cities in key economic regions including Beijing and Shanghai. This needs to address the pain points such as low efficiency and preservation challenges in traditional transport models supporting post-region sales. Growth for special agriculture projects from production zones in addition to that. We are committed to bring reliable services to our customers' certification, particularly in response to the National Customer Goods Trading Program, which fully demonstrates ADL service capacity and value. To meet the high standards for verification and risk control during the policy implementation, we leveraged our service capacity and the deeply integrated technology empowerment using an image recognition and other cutting-edge technology. We achieved intelligent monitoring and image collection for the entire process. of delivery installation, dismantling of old appliances. This initiative not only provided the regulatory authority with accurate and traceable validation, but it also demonstrated our professional practices in high complexity logistic scenarios. As a result, we effectively supported our customers, particularly in key home appliances and safety categories, in capturing policy-driven opportunities. Finally, I would like to highlight our third core advantage, our technology-driven approach. We have always regarded technology innovation as the fundamental treasure for long-term efficiency gains and a larger improvement. Supported by a professional R&D team of thousands of engineers, we continue to invest in innovation and development of cutting-edge technologies. Leveraging the most extensive operational scenario and the most comprehensive operational chain in the industry. We built a proprietary and intelligent operation system covering all stages, including warehousing, sorting, transportation, and delivery. The focus of intelligent warehousing, we have achieved the scale replication in the domestic market and implemented benchmark projects overseas. In 2025, our self-developed smart world for good-to-person automated warehousing solution was deployed in nearly 20 cities with more than 20 smart world warehouses. Benefiting from the indexification of the GTP model, we have achieved a high density storage and ultra-fast ticking for millions of SKUs, significantly boosting the warehousing operation efficiency in the fourth quarter of 2025. The first smart world was officially put into operation in the UK. by the efficient operation of hundreds of smart wolf robots. This project supported the local operation to bring ultimate fulfillment experiences. In autonomous delivery, our solutions have progressed into standardized large-scale operations. Today, we have deployed thousands of unmanned vehicles across over 20 provinces nationwide, improving labor efficiency in the transfers between deliver stations and delivery zones while Continuously unlocking cost reduction potential emerges now such as the direct warehouse two-station delivery. At the same time, we have extended our autonomous delivery classes to overseas low-altitude logistics in December 2025. The development successfully completed the first overseas drone tri-slide design review, validating over every last-mile fulfillment capacity in the overseas market. Looking ahead, we'll continue to center on experience, cost, and efficiency. fully leveraging these three different areas to drive high-quality growth. Building on our increasingly robust integrated supply chain capacities, we work hand-in-hand with our partners to help customers reduce costs, enhance efficiency, and achieve sustainable business growth. While at the same time advancing to the next stage of our own development, we will continue to uphold our range of version of the customer-first Delivering reliable high-quality customer experience in response to evolving market dynamics. With further strengths of end-to-end detergent capacities translating tech expense into tangible operational gains. Steadily delivering on our strategic commitment to launching efficiency improvement and margin enhancement. Welcome Wu Hao to give us the discussion on financial performance. Thank you. Thank you, Zhenghui. Dear investors and analysts, I'm Mao Wuhao, the CFO of the JDL. It's my great pleasure to share with you the first quarter and the full year of the financial reports. Looking back to 2025, the Chinese macro economy is growing steadily with a high quality and we are seeing a lot of growth. The JDL relying upon the ISL platforms improving our solutions as well as our long-term matrix, improve our service quality, customer experiences, In the quarter, first quarter of 2025, we are achieving the three digital growths. To be more specific, the total revenue is $36.5 billion, both quarter representing year-over-year growth of 29.9%, staying high growth momentum over the entire year. $17.1 billion was our total year revenue, up 18.8% year-by-year. This growth trajectory reflects our customers' strong recognition of our service value. In terms of profit, since the beginning of the year, we have invested deeply in resources and capacities to build long-term competitive barriers, solidifying our growth momentum for healthy long-term development. In the fourth quarter, our average profit was $2.0 billion, with a margin of 3.1%. Now IFRS profit was RMB 2.35 billion with a margin of 3.7%. In 2025, our IFRS profit was 6.9 billion with a margin of 3.2%. Now IFRS profit was RMB 7.7 billion with a margin of 3.6%. Looking ahead, emerging efficiency gains from our resource investments, along with a deepening empowerment from automation and AI algorithms, were formed the groundwork for driving continuous profitability optimization. Now let's look at the segmented business life of revenue from I and C customers totaled RMB 36.5%. in the fourth quarter, increasing 44.5% year-over-year of the total ISC revenue from JD Group amounted to RMB 26.7 billion, up 68.1% year-over-year. Due to the incremental revenue generated by our full-time providers providing delivery services for JD food delivery and acquisition of the on-demand delivery services from JD Group as well, as the steady growth of the general merchandise category in the jade retail. Revenue from external ISD customer was being 9.3 billion, maintaining healthy growth momentum. Leverage of extensive network coverage and in-depth industrial insights, we continuously find upgrade of end-to-end supply chain solutions to meet the diverse needs of customers across various industries. For instance, of advanced algorithm systems as a high-standard integrated warehousing and distribution capacity have helped premier leader brands achieve multi-channel centralized management within a single warehouse, effectively improving warehouse utilization and reducing cost. In addition, leveraging our overseas-bounded warehousing system with regional reach, we have built logistics solutions featuring bounded upon entry and one warehouse for multiple countries, for automotive and other customers, helping them reduce inventory costs while improving inventory turnover efficiency. These high-quality end-to-end service and solutions have earned us widespread market recognition and trust. In the fourth quarter, the number of external ISP customers amounted to 168,000, up 9.7% year-over-year. In the quarter of 2025, our revenue from under-customers primarily including express and freight delivery services was up to 27.6 billion, up 1.3% year-over-year, with large agents primarily attributable to the impact of the Zepon product matrix adjustments, including Zepon's business revenue from under-customers achieved a double-digit growth, maintaining a steady trajectory in express delivery We continue to offer ultimate time-based experience with a strategic focus on expanding high-value categories. Inflatable services leveraging our tier-targeted and scenario-rich product portfolio, we effectively made the differentiated needs of our various customers, maintaining our industrial-leading position in both freight volume and revenue scale. Moving towards comp and profitability in the fourth quarter of 2025, Both profit margin was 9.3%. We continue to focus on enhancing customer experience and delivery time rates while solidifying our operational capacity to drive JBL's long-term high-quality business growth. Now let's turn to the key components of the cost of self-revenue. Firstly, employee benefits were earned between 3.1 billion in the first quarter, up 34.9% over the year. This was primarily due to The addition of full-time food delivery providers compared with the same period of last year, as well as the year, increased the number of frontline operational employees in the delivery and warehouse operations. The number of operational employees grew from approximately 480,000 at the end of the fourth quarter last year to approximately 615,000 at the end of the fourth quarter of 2025. Well, quite stable. Since the beginning of this year, we have invested in our own employees in core areas such as delivery and warehousing by strengthening our control over the delivery process. We have effectively optimized the customer experiences driven by these measures. Cooperation and matrix such as the on-time delivery rate and customer satisfaction have achieved steady over-year growth in the fourth quarter. Employee benefit expenses accounted for 32.3% of revenue up 3.5% year-over-year. Second. Our outsourcing cost was on the 22.7 billion the fourth quarter, up 14.9% year-over-year. Our outsourcing cost accounted for 35.7% of the total revenue in the fourth quarter. A year-over-year decrease of 2.2%. Over the operational account, we leveraged digital and intelligent dispatching systems to precise and match capacity resources with transportation demands while optimizing our capacity resource structure by increasing the proportion of self-owned vehicles, effectively enhancing resource control and operational efficiency. Meanwhile, on the business side, the ongoing optimization of POM's freight product structure was also contributed to further reduction of outsourcing costs. Thirdly, our total render cost was RMB 3.3 billion in the fourth quarter, up 6.5% year-over-year. As we promoted the site integration, optimized the network structure, continued to improve utilization efficiency of our sites, our total revenue cost, render cost accounted for 5.2% of our total revenue in the fourth quarter, year-over-year decrease of 0.8. Apart from the major cost mentioned above, our ongoing business expansion was resulting in improving the economy's health care. Dividing down our depreciation and amortization costs and percentage, so total revenue by 1.1. In terms of expenses, our operating expenses in the first quarter were $4 billion, up 23.2%, accounting for 6.3% of total revenue year-over-year increase of 0.1%. Among them, sales and marketing expenses increased by 17.9% per year to RMB 1.8 billion, accounting for 2.8% of the total revenue, down 0.1 percentage point. Specifically, sales and marketing expenses accounting for 4.8% of revenue from external customers, up 0.7 percentage point year-over-year. This was the main duty of our monetary investment in sales and marketing personnel to drive business growth in the fourth quarter of 2025. Our R&D expenses were R&D 1.2 billion, up 28.9% year-over-year, and accounting for 1.9% of the total revenue, up 0.1% point year-over-year. We've always positioned technology innovation as a core development engine, building an end-to-end intelligent operation system covering all stages, including warehousing, sorting, and delivery. In the warehousing stage, We are observing the domestic and international deployment of our self-deployed smart walls. Automated warehousing solution enhances both storage density and fulfillment efficiency. In the sorting stage, we continue to iterate and upgrade our automation levels, significantly improving the accuracy and operational efficiency of the sorting process in the delivery stage. We've deployed thousands of unmanned vehicles, empowering multi-scenario operations to reduce costs and increase efficiency. Our general administrative expenses will only be $1 billion, up 26.8% year-over-year, accounting for 1.6% of total revenue, a year-over-year increase of 0.1 percentage point. In terms of the profit, please, also consider non-express measures, which we believe may better reflect our core operations. Both non-offerance profit and non-offerance EBITDA exclude items that we believe are not indicative of our cooperating performance to help investors and other users of financial information better understand and evaluate our cooperating results in the fourth quarter of 2025. Our non-offerance profit was RMB 2.4 billion, up 5.7% year-over-year, Non-average profit margin was 3.7%. The non-average EBITDA for the first quarter was the RMB 5.8 billion increase of 8.9% year-over-year with a non-average EBITDA margin of 9.1%. We continue to monitor the health of our cash flow to ensure adequate funding for business expansion operations. In the first quarter, including lease-related payments, we recorded a free cash flow Of RMB 3.3 billion of this total operating cash flow including the lease-related payments was RMB 5.3 billion year-over-year inquiries of nearly RMB 0.2 billion primarily benefitting from proactive measures to improve accounts receivable, turnover, and accelerate collections. Capital expenditure was RMB 1.9 billion mainly directed towards investments in automation equipment. and self-owned vehicles driving consistent improvements in operation efficiency through efficient resource allocation. Before we wrap up, I'd like to express my gratitude to all the stakeholders for the long-term support and trust we've had. We're focused on achieving a balance between business growth and profit stability over the growth front. We emphasize both the speed and quality of the business growth continuously, deepening our strategic focus on ISC capacity to empower our customers' business development while also preparing ourselves towards a new level of high growth momentum. On the profitability front, we will increase technology investment, optimize software network layout, and deepen refined management to enhance resource utilization efficiency. We are confident that through ongoing operation efficiency improvements across the entire chain, we can drive sustainable cost optimization and drive long-term sustainable value creation to our shareholders. Thank you. That includes my prepared remarks. We can begin the Q&A session. Thank you, Mr. Wu Hao, for your prepared remarks. This is the end of the prepared remarks in Chinese, and we are going to start the Q&A session. In the Q&A session, we are going to accept questions in the Chinese line. Please dial into the Chinese line and then press down one on your telephone touch. Keep that. Now let's get into a Q&A session. If you want to set up a question, please accept the star, one, on your telephone touch-tone keypad. If you have a question, please press star and one. The first question is from Goldman Sachs. Please go ahead with the question. Good evening, Mr. Wang, Mr. Wu. Thank you for having me here. I'm from Goldman Sachs. I want to share with you my comments on two questions. In 2025, you are speaking about the delivery services with very good growth momentum. So how are we going to look into 2026? What will be the internal and external customer growth momentum? And what will be the $220 billion incentive for the merchandise? What will be the impact? The next about the overseas market, we have already seen the Express as well as a total GSA area in the overseas market very big growing momentum and you are sharing with us a lot of my thoughts. So my question is how could you take JDL's footprint in the overseas market in 2026 as well? Thank you. Thank you for the question. About the growth momentum prospects. In 2026, we are having strong confidence in seeing the growth momentum in 2026. About the real-time delivery, we're going to do a lot of things. You have already seen that over the last few years, we have seen very good and positive growth momentum. But still, in terms of infrastructure, We did a lot of fundamental work. We laid out a sort of foundation. And we want to take a breakthrough in building, expanding the customer basis. We want to have, we have already achieved three digital growth in 2025. And you are checking about the incentives, the business incentives for 20 billion RMB. For JDL, I believe this will be creating a positive business loop. The JD more is covering different products with a wide range of the product portfolio, which will give us a lot of the chances to deliver our services. And we could also be improving the efficiency in an overall manner. Most of the projects have high requirements on the delivery efficiency, and Timeless JDL is in a good position to deliver the promises. And we will continue investing of resources, reducing loss of mile, abruption, and we have already done a lot of improvement work. I believe that with that being said, with all the efforts being done, we could improve the efficiency continuously in 2026, and we could also improve the satisfaction rate. I want to welcome the CEO to show we found the practice in Europe. Thank you for the question. Thank you for staying with us. In 2025, we have briefed on you the work report. JD Logistics is prioritizing the European business. We continue to carry over logistic deepening as well as upgrade of the products and services in 2021. in UK, Germany, France, and Netherlands. Those are the major markets in their major cities. We will ensure the highly efficient time rates in terms of delivery. We have the two-door services. We have the free of charge exchange and refund services. At the end of the day, we could work together with local buyers as well as partners. We could also attract more customers out there. As of now, We also have a lot of good partners, such as DHL. By working with them, we could cover the terminal services. We could get into the client conversion in the European local market, and we're also working together with our customers to ensure the cross-border hassle pickup By working with the core local partners, we will have a faster process, including the cross-border delivery as well as the customer clearance, et cetera. The purpose is to have the terminal-to-terminal ISC system in place. It is expected that by 2026, the European business will be growing very fast. This trend will be maintained. Thank you again for your question, and thank you very much for your attention to our overseas market and business. Thank you. We are going to have a city bench roll down. Please go ahead with the question. Good to see you. Dear management, good evening. Thank you for having me. I have two questions. The first question, for the IESC, I want to check with the internal growth region, except for the real-time delivery, what will be the number in 2025? What will be the growth moment in 2025? The next is, in 2025, you did some investment. Is having sort of impact on your profit, and what will be the trend for the profit in 2026? Thank you. Thank you, Brent, for your question. for the internal business growth ratio. For the long run, we are seeing positive growth momentum. Generally speaking, we are collaborating with the JD Retail for the long run. We are also receiving benefits due to expansion of the JD Group. So that we have seen very fast growth in our internal orders. So the second question. About margin in 2025 years or a dip. So how will be the outcome in 2026? Because we have considered the impact of that one. I believe that over the last year, through other measures of efficiency improvement and technology optimization, we could have a better opportunity to receive return. Well, for DAPO, in 2025, except the limited impact from DEFON. There's some data from DEFON. The trend is the profitability is gradually moving into a normalized and stable circle. In the second half of 2025, we saw a positive improvement from Zepon. Zepon is gradually picking up their business. So in 2026, in terms of the profits, I believe there will be positive improvement. Next question. Tom John, please go ahead with the question. Good evening. Thank you for having me here. My question is as follows. For the AI strategy, can you share with us the 2026 autonomous driving strategy as well as automation strategy or practices? The next question is about the general performance. In 2026, in terms of the revenue, what will be the trend? Thank you. For the AI and automation technologies, as we have already discussed a part of the strategies, JBL is prioritizing the technologies. We know how important they are in the implementation in the past. for the Wolf, Robert, and for the unmanned devices. You are seeing a lot of implementation and utilization with very good outcome. And we also have certain AI technologies to improve scheduling of the vehicles, the dispatching of the right parcels. When we are using AI, especially for the robots. We have the warehousing, sorting, transportation, different steps. In 2025, over 20 cities and their warehouses are equipped with AI. In terms of the sorting, 90% of the sorting devices are equipped with automation technologies, and the sorting amounts are over millions. In terms of the delivery, Over 1,000 vehicles, unmanned vehicles in 2026 will expand to their presence. In China, we could improve the efficiency by using and driving unmanned vehicles. The operators, the delivery men could improve their work efficiency as well, reducing the risk of delayed path of delivery at certain steps. we could further reduce our costs while improving the efficiency. The next is about the future prediction. Through our vehicles and the drivers as well as we could optimize our routes through AI preparation in terms of the scheduling of the vehicle resources, as well as preparation of tasks in one vehicle, we could improve the efficiency and reducing the cost. Thank you. I want to say a few words about the two questions. And we are developing our AI technology back years ago, in 2026. the investment will be continuously down. I believe the investment will be higher than that of 2025. In terms of the automation of sorting, we have had very mature technologies. And in 2025, we did invest continuously in unmanned vehicles as well as a warehousing network. and we have launched more than 1,000 unmanned vehicles. Through one year trial, our technologies have further been improved. Investments in 2026 will be picked up further in terms of the sorting machines. As we are reducing the cost and improving efficiency, We will continue to invest strongly. I believe that it will contribute to our increased profits in 2026 as well. Next question. From Merlin. Please go ahead with your question. Mr. Wang, Mr. Wu, Mr. Song, good to see you. I'm from the Ling. I have two questions, of course, topic one. The previous speaker talked about the progress. I want to share with you my comments on your investment of the cross-border delivery and what will be the right maneuver for next year and what will be the profitability For instance, you'll be standing high in the industrial profit level. The next is about the crewman, the delivery man. What will be the coordination plan between them and the traditional crewman? I want to confirm with you about NA, right? the acquirement of Kua Yue as we have understood that in last quarter, you have acquired Kua Yue and you have done some things. I want to check with you more about their performance. For the Kua Yue, we did a great job in acquiring the business. And so we are seeing their smooth business conduction and we also And we are also seeing the future growth momentum in terms of the revenue growth. We are seeing continuous increase. And we are collaborating with the quality management optimizing their timeliness, their orders being traced, and their online preparation. And we are still seeking more opportunities to reduce their operational cost. Every year we continue to invest on Kua Yue year by year in terms of the revenue, in terms of the profitability. I see very good chances So your question is about the differences between the delivery man and the courier man. Now we have the new business of food delivery. We are ensuring the real-time and immediate delivery services. At the same time, we have to manage the rider When we are receiving the food order, we have to manage the riders in the food matrix, and we want to optimize the people scheduling, improving the efficiency, so that we can also boost up the profitability. But of course we have to consider about the early promotion, And now we are also managing the free time or different time slots of the curements to maximize the human efficiency. Now we're also good in some of the curements into the rider, turn them into the rider. That is what we call the free time curement to rider initiative. It helps reduce the peak time congestion, improving the efficiency on both sides. Thank you. To the time constraint, that concludes today's question of the session. At this time, I will now turn the conference back to Jinxuan for the additional or closed remarks. Thank you once again for joining us today. If you have additional further questions, please contact our IR team directly. Thank you.