J&T Global Express Ltd B

Good day. Welcome to the conference call for J&T Express 2025 Q4 Operating Performance Announcement Call. I would like to remind everyone that during the conference, everyone will be muted. Before the end, we're going to have Q&A section. If you need to ask a question, you can press Start 101 on the Chinese line. Just remind everyone that this is going to be recorded and this is the English line for listening only. Now, give the call back to the management. Hello, everyone. Welcome to the conference call of G&T Express 2025 Q4 performance announcement. This is Frank. Today, the materials have been disseminated through emails to everyone and updated to our website. Today, we have CFO on G&T Express, Dylan, and Hai Bing, Director of the 3D Investment and Capital Markets. We're going to have two parts for this meeting. First of all, Hai Bing will be introducing the company performance in 2025 Q4 and then moving to Q&A section. where the management will answer your questions. Hi, Bing, please. Hello, everyone. This is Hi, Bing. It's very glad for us to give you announcements of our performance in 2025 Q4. The parcel volume reached 8.46 billion pieces, representing year-end growth of 14.5%. Total parcel volume for the entire year amounted to 30.13 billion, year-end increase of 22%. The growth mainly driven by South Asia, China, and new markets. First of all, the South Asia in Q4, the parcel volume reached 2.44 billion pieces with increase of 73.6%. The four-year performance are now led to 7.66 billion pieces, show a year-to-year increase of 67%. The key drivers behind are follows. First of all, the e-commerce platforms have increased their investment through performance activities and the continuous enrichment of product categories. We have driven the rapid growth of the business volume. also in 2025 Q4 we've been seeing a very good maintenance of the growth of major clients of e-commerce and non-performance non-platform parcels have also reached a very good growth marking significant contribution to the total parcel volume and also at the same time we've been seeing the higher requirements of the logistic service and widen the gap with our competitors by the virtual cost and the price advantages as well as the solid network capabilities Next, let's talk about China. In Q4, the parcel volume in China reached 5.8 billion pieces with a year-to-year performance of a flat performance. And the total full-year volume reached 22.07 billion, showing a yearly increase of 11.4%. The business development of China region in Q4 was categorized by four new aspects. The industry growth has slowed down in October and November, and the industrial growth by 8% and 5% respectively. It is expected the industrial growth in December may slow down further compared with November. Also, we have proactively adjusted our strategies, strengthened the foundation of our network, and pursued high-quality growth. The company ranked high in logistic index for franchise system and maintained on the mainstream e-commerce platforms. The brand image has been significantly improved in the minds of high-quality clients, and this has brought us in more high-quality parcel volume. Now, the emerging markets. In Q4, the parcel volume in new markets reached 130 million pieces, with an increase of 79.7%. and 2025 volume was 400 million pieces with an increase of 43%. The following reasons contribute to that. E-commerce penetration rate in new markets is still low. The capital parcel volume is much lower than that of China and South Asia, giving room for further development. Next, we have continued to improve the express delivery network in counseling operational efficiency and service quality. And we can see that we do have very good growth in Mexico and Brazil. and the e-commerce ecosystem in Brazilian market is more mature and within the entire new clients the company has achieved a very favorable growth this is the operating performance of our markets in Q4 when I stood that you're very concerned about a financial performance in the Q4 2025 regarding financial figures the company currently only discloses the semi-annual and annual financial data therefore company generally does not update the performance guidance on the quarterly basis and specific guidance for 2026 will be released simultaneously after the annual results announcement in March. This concludes the announcement. And now we're going to open up the questions to the floor and welcome everyone to ask questions. Thank you very much, management. If you'd like to ask questions through the phone, please press star 101 on China's line. We're going to accept your questions. Now we are going to take the first question from Li Mojing from Citix. Thank you very much. Hello, Dylan, and hi, Bing, and dear management. Good morning. I'm Ali Mooteng from TITIX. Very much thank you to the opportunity to ask questions. So today, I have two minor questions to ask. The first one is on the operation in South Asia market. We can see that in Q4 and also the previous quarters, the network collaborators and the number of point of service had the divergence trend. For instance, the number of partners has been decreasing, but the number of point of service is increasing. So we'd like to ask the reasons behind. Is it because that you are doing integration or any other reasons? This is my first question. Thank you. All right. So thank you very much for this particular question. Just now you have asked the reason that so we have actually a different trend for the number of franchisees and the number of the point of service. So in South Asia market, right? Yes. Okay. Thank you for the clarification. In South Asia market, we have lower number of franchisees around 300, but we have 1,000 point of services. The reason is that we have very strong growth in sub-nation markets. So with this very strong growth, we have to further increase the density, increasing efficiency and productivity. This is a number of reasons for us to increase the point of service. And for the franchisees, we're doing integration of franchisees further. We know that we are promoting the particular kind of transformation from self-operating to franchisee model. So we are increasing our efficiency and quality of our service provision. This is the reason for us to have divergence trend between these two. Thank you. Thank you very much, Haiding. And the second question is around the China market. We know that in the second half of the year, we had a lot of changes happening to the logistic and quick express market in China. We would like to ask you, Nat, on this current backdrop, how do you think about the 2026 strategies and your key indicators of performance. Also, could you share with us about your overall outlook of the overall pricing war happening probably in 2026 first half? Right. Indeed, we know that in China market in 2025 throughout the whole year, we had fluctuations a lot and probably you have experienced that in the beginning of the year, we had the pricing war. During the middle of 2025, The government had anti-evolution policies, which lasted for about half a year. And then as for the anti-evolution policy, we have maintained our unanimous, you know, attitude, which is cautiously positive in terms of the duration and the strength and depth of anti-evolution policies. We cannot control these factors. So our strategies will be adjusted dynamically according to the situation. As for China market, we always believe that we have to be steady and with the very good growth against the stability. And in that whole process, we are going to also increase the quality of the parcel delivery, not only focusing on quantity, and also in China for the high-priced parcel, and the reverse parcel and individual parcel numbers will be increasing. As for investment in China, our position is a follow-up. So as for 2026, we are continuously having the same strategies, which is maintaining our positioning and focusing on good quality, finding good strategic opportunities, and realize our growth in China. Another point, which has always been said by us, is that in China market, this is actually a very good fundamental for us to expand in the rest of the global markets. in emerging markets in terms of technologies, human resources, and resources are distributed by China. We are exporting those things to or from China and bringing our very robust and healthy growth in the rest of the markets in the world. Thank you very much. It's very clear. Thank you, Dylan and Haibin. This is the end of my question. All right. Thank you very much for this question. Next question is from Zhou Yubo from Taycan Securities. All right. Can everyone hear me? Yes, no problem for that. So good morning, everyone. You can see that in Q4 of 2025, you have maintained a very robust growth. And this is pretty good. So you can see that the South Asian market is pretty good. And the investors... So first of all, very quickly recap. Just now you asked us about the expectation of 2026. So this year we are announcing the 2025 figures. So we would like to actually reiterate that taking a look back at the performance of the last year interim results and to expect the new growth. So we actually expect to have 74% of the growth. Several reasons. First is that for the major e-commerce clients, B B B B B B B You can see that for some of our third-party logistic companies cannot satisfy the needs and demands of the e-commerce platforms and quit the market due to certain reasons. So we have a very good cost advantage. We are also increasing our competitive advantages on the platforms. You can see that we have increased non-platform parcels, but this is not that contributive to the overall revenue. because it is accounting for less than 10% of the total. Another question is about the outlook of South Asian market in 2026. Overall speaking, we are quite positive to the growth further in 2026 because for these e-commerce customers, we could see that they have a very good customer conversion, and in 2026, this momentum will be continued, which is something that we firmly believe. Of course, If we have 70% of the growth in South Asia market in 2026, this is pretty much confident for us to actually maintain that. This is pretty much about the South Asia market. Another foreign market is the other emerging markets. As what we have discussed in last quarter, while in 2025, We have collaborated with MercadoLibre and the TikTok in Latin America. We have been actually increasing our collaborations. At current stage, we have a very good diversity of the customer base. So in the emerging markets in 2026, overall speaking, we have some of the figures of showing the penetration still, which is quite potential for us. And, you know, these figures are way lower than the South Asia market in China. So from our standpoint, there is a huge potential for further growth in the emerging markets. And in emerging markets, we're going to perfect our network connection and increase our quality of service and increasing the investment to improve the productivity. So overall speaking, the emerging markets are still at an early stage, and there's a huge room for further growth. So last year, in 2025 first half, we had a low base in this market. And because of the low base number, we believe that we're going to have a very good growth in 2026 first half. But in the second half of 2026, we have to actually, you know, take a look at the performance from those platform and non-platform businesses. But still, overall speaking, we are quite optimistic. The penetration and number of parcels in the emerging markets are way lower than that of China and the Asian market. We would like to regard the emerging market as a third country for growth. All right. Thank you very much, Dylan, for this answer. Very clear answer. No further question from myself. Thank you. Thank you very much. Let's wait for our next question. Next question is from Liu Gongxian from CICC. Please. You have the floor. Thank you very much, Chair Management. This is Sergei Gancher from CICC. I have also two minor questions. The first one is that with regards to the emerging markets, we know that, you know, we have been investing and investigating in sub-Asian markets, and we know a lot about this, but for Mexico and Brazil, we are quite estranged to that. So would you like to comment on the e-commerce and the logistics? What is about the overall landscape as well as the ecosystem as well as the models? Could you have more details? For instance, e-commerce, what are the differences in commons versus China and South Asian market? What about the difficulties and also the competitive edges that you have in terms of logistic service? This is my first question. Second question is about the China. We know that in China we have industrial reasons and also we have our active adjustments as well happening in China. So against that backdrop, how do we think about the economy of scale? Because you had a quick growth in the previous years, and now you're slowing down in China. Probably you're going to be exiting in terms of the resources and the human resources as well. So if we're not considering price, if we only consider about cost, how do you think about the competitive landscape here in China? Let me answer this question, and I will be introducing China. So first of all, just now, you have asked about the Mexico and Brazil, right? So Latin America. First of all, I would like to say that in Latin America, we are still at the first cycle of our development. So with our key accounts in e-commerce, we actually are planning to expand according to the volumes that they have. So this is The first stage of the development and now you can see that the South Asia market is more mature than the Latin America from this standpoint. In South Asia market, we have been actually growing a lot in a year. So in terms of the brand image and in terms of the adoption and the mindset of our customers, In Latin America, this is actually growing and rising a lot. So still there is a very huge room for further improvement in Latin America. We're concerned that we have to provide a very good quality of service to e-commerce customers because there is actually a huge demand of e-commerce platforms in Latin America. And locally, some of the local players in terms of the service is not that good, giving you a simple example, say 365 by 24. This is not actually going to be the case. There is no such kind of a service model happening from the other express delivery platforms. And next is about the express delivery. We know that for e-commerce platform customers, they choose the express delivery to enter the market. and now we are at a very high growth from this standpoint. And those players are setting up the warehouses and delivering their goods and importing the products from Asia and other markets to Latin America. So be it the cross-border or local, like local to local service, You know, we are very clear about the business models, right, via which model that we're talking about. As long as this model need the delivery, our global network can coverage and national coverage could have a very good service quality match. So we are also going to provide a lot of different strategies locally. But of course, not only in terms of these factors, if you're taking a look at the trajectory of our development in South Asia, and also in China, you know, we do a lot of mergers and acquisitions. We believe that we have advantage as well in Latin America. For instance, together with our e-commerce customers, we're going to establish the warehouses or we're going to take the parcels from the local warehouse or we could collaborate with the merchants and also penetrate our service into theirs. So we do have a lot of APIs available for that from a system standpoint. So this is going to be really good. You can see that we are able to compete in a very highly efficient way. At the same time, we are always investing in the emerging markets. You can see that in Latin America, be it the fleet investment and the equipment, we are increasing those investments at the same time. So these are going to be the backdrop for further growth. In terms of the differentiation, I think that as we have already introduced, that we do have the experience from China, and we are going to have a systematic, you know, copy and paste to the local market in Latin America. But the other competitors do not have the capabilities like we do. All right. Thank you very much. And then this is Haibin, and let me answer the question about the China market. Actually, for China market, as we could see that after years of the growth, this is a huge market. In around 2020, we actually entered the China market. In five years, now we are having such a market share as of Q4 of 2025. and this particular five years of development equals to 20 years of our development of our competitors and rivals. So as far as we have very good strategies, but of course, at the same time, we have very good internal capabilities that we could deliver in 2025 for October. We have actually announced a new transportation center in Guangzhou. and this is actually going to be the biggest center here in China or even the biggest in Asia or in the world so this is actually showing that we are actually dedicated to further increase and also to further increase our penetration in China market and we believe that in China Even if actually the particular kind of growth has been slowing down, but overall speaking, the potential is pretty good. And you can see that China is a huge market. So this is definitely going to be a very, very important market, especially a strategic market for us. We're going to increase our efficiency of operation, lowering down the cost, and this is going to be our focus here in China. All right. Thank you very much, Dylan and Haibin. If possible, I can have a follow-up question on the tariff issue in Mexico. This is already taken into effect. We would like to understand that in Q4, whether or not you had certain issues, you know, before the tariff adding, and after the tariff adding, what is the particular, you know, competitiveness of those e-commerce customers in Latin America? Right. Thank you very much for this question. I think that in a short period of time, the tariff is actually having some impacts on the e-commerce customers, but also you know that we have the local-to-local service model. This is actually going to enhance because of the tariffs. And of course, we have a lot of sellers, right? If we cannot have the cross-border business done in a very cost-efficient way, we're able to do the other business models. So in a short period of time, the penetration of e-commerce customers will be actually hindered by the tariff policy. But still, you can see that we are going to have very good growth on local-to-local business, which is going to be offsetting the impact from tariffs and policies. So in Q4, the performance is actually lower than our expectation, but still we had a growth, right, in Q4 in Latin America. So in the long run, if we have those platform, you know, business and the local to local, we are actually more advantageous even than the other rivals. And sometimes you know that this is, you know, quite easy business model because it's happening in the port and airport. So while we have actually a very good local-to-local business, this requires a lot of the network coverage, which is something that we already had. Right, understood. Indeed, local-to-local is very good positive news to TNT Express. But still, the particular delivery upon arrival is going to be quite challenging, but local-to-local business is pretty advantageous to us. Yeah, no problem. for myself and this is the end of my questions.

Next, we have from Senior Securities.

Hello. Happy New Year. This is . First of all, thank you very much for this opportunity to ask my question. I have two minor questions. The first one is, a follow-up on the business growth in South Asian market in 2025. Because of a very good growth and also strategies, you had a very good performance. 2025 is already over. If you're talking about the commercialization and monetization, we do have a lot of factors. But if you want to have a priority for those initial factors, what about the ranking?