Earnings call transcript: J&T Global Express Q2 2025 sees robust growth

J&T Global Express Ltd, a significant player in the express delivery industry, reported strong financial results for the second quarter of 2025. The company experienced a 13.1% increase in total revenue, reaching $5.5 billion, while its core express delivery revenue grew by 12.7% to $5.3 billion. Despite a decline in gross margin from 11% to 9.8%, adjusted net profit surged by 147% to $156 million. The stock price, however, saw a slight dip of 0.76% to close at $10.48, amid a broader market trend.

Key Takeaways

• Total revenue increased by 13.1% year-over-year.
• Adjusted net profit surged 147% to $156 million.
• Parcel volume reached 13.99 billion, marking a 27% year-over-year increase.
• Market share in Southeast Asia rose to 32.8%.
• Stock price decreased by 0.76% post-earnings.

Company Performance

J&T Global Express demonstrated robust performance in Q2 2025, driven by significant growth in its core express delivery services. The company expanded its market share in Southeast Asia to 32.8%, reflecting a 5.4 percentage point increase. This growth aligns with the broader trend of increasing e-commerce activities in the region. However, the company faced intense price competition in China, impacting its gross margin.

Financial Highlights

• Revenue: $5.5 billion, up 13.1% YoY
• Core express delivery revenue: $5.3 billion, up 12.7% YoY
• Gross profit: $539 million, with margin declining to 9.8%
• Adjusted net profit: $156 million, up 147% YoY
• Operating cash flow: $421 million
• Free cash flow: $192 million
• Total cash and equivalents: $1.7 billion

Outlook & Guidance

Looking forward, J&T Global Express remains focused on cost reduction strategies in Southeast Asia and expanding its customer base beyond e-commerce platforms. The company plans to continue investing in technology and automation, with potential expansion into new global markets. It projects an EPS forecast of $0.05 for FY2025 and $0.07 for FY2026, with revenue forecasts of $11,883 million for FY2025 and $13,849.74 million for FY2026.

Executive Commentary

Stephen Fan, Executive President, emphasized the company’s commitment to long-term value creation, stating, "We fully believe that only by adhering to long-term reasoning and doing the difficult yet right thing can we continue to create value." Charles Ho, Vice President, noted the company’s global ambitions, saying, "We continue to evaluate potential markets across the globe for feasibilities."

Risks and Challenges

• Intense price competition in the Chinese market could pressure margins.
• Potential operational challenges in expanding into new markets.
• Economic uncertainties in key regions may impact growth projections.
• Dependence on e-commerce trends, which could fluctuate.
• Regulatory changes in international markets could pose challenges.

Q&A

During the earnings call, analysts raised questions about J&T’s anti-involution pricing policy in China and the company’s network partner strategy. The management highlighted its cooperation with MercadoLibre and detailed initiatives in AI and autonomous vehicles, reflecting its focus on innovation and strategic partnerships.

Full transcript - J&T Global Express Ltd (1519) Q2 2025:

Conference Operator: Day, and thank you for standing by. Welcome to the J and T Global Express First Half twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question and answer session. Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to your speaker today, Hai Bin Chen, Director of Strategic Investment and Capital Markets. Please go ahead.

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: Thank you, operator. Hello, everyone, and welcome to JNT Express First Half twenty twenty five Earnings Conference Call. I’m Heping Chen, Director of Strategic Investment and Capital Markets. The company’s results and our Investor Relations presentation were released earlier today and are now available on the company’s IR website at ir.jtexpress.com. Before we start the call, we would like to remind you that the call may include forward looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the future for various reasons.

Information about general market conditions is coming from a variety of resources outside of JNT. This presentation also contains the an audit, not IFRS financial measures that should be considered in addition to, but not as a substitute for the company’s financials prepared in accordance with IFRS. I have with me, Janti’s executive president, Steven Fan, vice president, Charles Ho, and CFO, Yiren Tae. Our management will share strategies, operating highlights, and financial performance for first half twenty twenty five. This will be followed by Q and A session.

With that, let me turn the call over to Stephen. Stephen will read through his prepared remarks in Chinese before I translate it for him in English. Okay. Hello, everyone, and welcome to JNT Express twenty twenty five interview results presentation. On behalf of the company, I would like to extend our sincere gratitude for your long standing attention and support.

It’s my great honor to present to you the operational and financial performance of the group for the first first half of the year. Looking back at the past six months, global economic environment remains compressed and volatile. Persistent geopolitical conflict, uncertainties in international trade policies, and evolving coverage regimes continue to pose challenges to economic development across various countries. Despite these numerous external variables with clear strategic positioning, efficient operational execution and continuous network enhancements, we achieved significant growth in both scale and profitability in Southeast Asia and the new markets. While also demonstrating resilience in navigating the intense competition in the Chinese market.

In the 2025, the group’s parcel volume reached 13,990,000,000 parcels, representing a year on year increase of 27%. Revenue reached US5.5 billion dollars representing a year on year increase of 13%. And adjusted net profit was US160 million dollars representing a year on year increase of 147%. Now please allow me to provide an overview of the development of our operations in each region. Starting with the Southeast Asia market.

In the 2025, our parcel volume in Southeast Asia reached 3.23 billion parcel, representing a year on year increase of 58%. Our market share reached 32.8%, representing a year on year increase of 5.4 percentage points, securing our position as the industry leader for the sixth consecutive year and gradually widening the gap with competitors. Our robust growth was primarily driven by the continuous empowerment of Southeast Asia through cost reduction experience from China. Our cost per parcel in Southeast Asia decreased by 16.7% year on year, while service quality continued to improve. For instance, the average delivery time per parcel further decreased and is now under two days in Southeast Asia with continued decline in lost parcel rate and damaged parcel rate.

We show all the benefits of our cost reduction with customers, maintaining a reasonable profit margin level. That strategy further deepen our cooperation and mutual trust with customers, driving parcel volume growth and fully demonstrating the virtuous cycle brought by economic of scale and operational refinements. Looking ahead, we will focus on two core strategies. First, continuous cost reduction. As cost reduction methods in China continue to evolve, we will further them from China’s automation and digital measurement experience to persistently drive down cost in South Asia.

Second, vigorous developing non ecommerce platform customers, including small and medium sized sellers on social media, branded customers, chain retailers, and individual customers. These customers offer higher profit margins and will further optimize our customer structure and enhance profitability. Next, the Chinese market. In the 2025, our parcel volume in China reached 10,600,000,000 parcels, representing a year on year increase of 20%, with market share up by 0.1 percentage point year on year to 11.1%. Since the second half second quarter of the year, price competition in China express delivery industry has been exceptionally intense.

With industry price continue to decline, we dynamically adjust prices according to regional market competition to maintain relative stability in market share. In the first half of the year, our revenue per parcel decreased by approximately RMB0.3 year on year, Our cost per parcel decreased by over 0.2 year on year. Specifically, transportation and sorting cost per parcel decreased by approximately 0.13 RMB year on year, coupled with effective expense control, which should reduce expense per parcel by 0.04 year on year, partially offsetting the adverse impact of price decline. From an operational perspective, despite the challenging external environment, the Chinese market remained profitable, demonstrating strong operational resilience. While stabilizing our core business, we actively expand high value individual parcels and reverse logistics parcels business.

Currently, individual parcels and reverse logistics parcels average 4,000,000 parcels per day, representing a year on year increase of 60%, accounting for 7% of total parcel volume. To promote the development of individual parcels and the rest logistic parcels business, we implement a series of measures such as first, encouraging network partners to establish service stations to enhance control over last mile services and customer reach. Second, increasing the proportion of a direct sorting and delivery by optimizing delivery route, allowing carriers more time to develop individual customers, actively expanding cloud warehouse service capabilities to provide customers with one stop solutions, including returns, quality inspection and delivery. Our cloud warehouse reverse processing service can save customers over 40% of the work time, significantly enhancing customer experience and loyalty. Finally, the new market.

In the 2025, our business in the new markets reached a significant turning point. Parcel volume reached 170,000,000 parcels representing a year on year increase of 22% with an increase of market share of 6.2%. We not only reached steady growth in parcel volume, but also achieved positive EBITDA for the first time. Such major turnaround was primarily attributable to our successful replication of China’s cost reduction experience in a new market, including investments in automated sorting equipment, optimization of routing planning, and improvements in terminal pickup and delivery efficiency. Since the second quarter, with new e commerce customers entering in Latin American market and our cooperation with the largest local e commerce platform, business growth in Latin America has noticeably rebounded.

We believe that with JNT’s strong local network operation capabilities, deep cooperation and track with local e commerce platform, the Latin America market is expected to resume rapid growth in the coming quarters, becoming an engine for JNT’s growth global growth. We are confident about the future growth of potential of the new market. Looking ahead, we will continue to invest in our network, deepening the empowerment of overseas operations through China’s experience and continuously optimize end to end operational efficiency and customer experience. We fully believe that only by adhering to long term long term reason and doing a difficulty yet right thing can we continue to create value in a fiercely competitive global express delivery industry and deliver returns to every investor and partner who trust and support JNT. The year 2025 marks the tenth anniversary of JNT’s establishment, a significant milestone, taking this interim performance as a new starting point and remaining true to our original aspiration.

We will forge ahead and continue to support ourselves to embrace an even brighter future for JNT. Thank you again for the support. Next, I will hand over to our CFO, Dylan, to walk you through the financial details of this interim performance. Thank you all.

Dylan, CFO, JNT Express: Thank you, Stephen. Thank you, Hai Bing. Hi, everyone. Thank you all of you for joining the call again today. I will take you through our financial highlights.

Before I start, please note that unless specifically mentioned, all the figures are in U. S. Dollars and percentage changes are on a year on year basis. Detailed financials, including our financial performance metrics, unit economics, cash flow and capital expenditures are available on our IR website. Here, I will only focus on the key highlights.

For J and T Global Express Group overall, we are pleased to report that our total revenue increased by 13.1% year on year from $4,900,000,000 in the 2024 to $5,500,000,000 in 2025. Core Express delivery revenue grew by 12.7% over the same period from $4,700,000,000 to 5,300,000,000.0 This performance was primarily driven by the parcel volume growth across the 13 countries in which we operate. We have captured opportunities presented by the globalization of e commerce with revenue from Southeast Asia and new markets now accounting for 43% of our total revenue. Gross profit reached $539,000,000 in the first half, remaining stable compared to the prior year period. However, the gross margin the gross profit margin declined 11% from 11% to 9.8% due to the intensive competitive pressures in the China market.

Our total adjusted EBIT for the group increased by 65.4% year on year from 118,000,000 in the 2024 to $196,000,000 in the 2025, largely attributable to the strong profit contribution in Southeast Asia and our first breakeven in new markets, which in combined more than offset the China market segment decline. Adjusted net profit also showed a significant improvement, reaching $156,000,000 in the 2025, which is a 147% increase from $63,000,000 last year first half. Next, I will present our segment results. In Southeast Asia, supported by the strong volume growth highlighted by Stephen, our revenue increased by 29.6% year on year from $1,500,000,000 in the 2024 to $2,000,000,000 in the 2025. Gross profit reached $351,000,000 in the first half compared to $287,000,000 in the same period last year.

Adjusted EBIT amounted to $235,000,000 which is a year on year increase of 74% in the first half. As you can see, we have achieved a healthy and sustainable level of profitability in the region, with adjusted EBIT margin improving from 8.9% in the 2024 to 11.9% in the 2025, thanks in part to the growing contribution of the non e commerce platform parcels. As an independent e commerce enabler with flexible pricing, we continue to benefit from growth across the e commerce platforms. All at the same time, we are actively expanding our customer base to include the non e commerce customers by leveraging our established network and quality services. Furthermore, we are continuously reducing costs by capitalizing on economy of scale and applying operational expertise from China to South Asia.

So this approach enhances our unit of economics and allow us to pass on the cost savings to our customers, thereby strengthening our market position. Next, let’s move to China. In China, the express delivery market experienced intense price competition during the period. Amidst this pressure, we continue to optimize our customer mix and implement more refined operational management. These initiatives helped partially to offset the top line pressure and sustain our profit resilience.

In the 2025, revenue grew by 4.6% year on year to $3,100,000,000 compared to the 2024. Revenue per parcel in China was $0.30 down from $0.34 in the same period last year, which is in line with the persistent industry wide pricing pressures. In response to competition, we dynamically adjusted pricing across different regions to maintain our competitiveness, while also focused on attracting higher quality customers. At the same time, we continue to work on our cost per parcel, which decreased from $0.32 in the 2024 to $0.28 in the 2025. This is driven by the improved operational efficiency, enhanced network stability and ongoing capacity investments as highlighted earlier by Stephen.

Key initiatives included expanding our self owned line haul fleet and increased automation in our sorting centers and our networks. Nevertheless, the extent of the cost reduction was insufficient to offset the price decline, which is so resulting in the year on year decrease in our EBIT per parcel. As a result, the adjusted EBIT was $13,000,000 in the 2025, a decrease of 78% from $60,000,000 in the 2024. Next, let’s move to our new segments. For our new segments, our revenue increased by 24.3% year on year from $292,000,000 in 2024 to $362,000,000 in the 2025, mainly driven by the growth in the parcel volume.

We’re happy to report that our first new markets achieved adjusted EBITDA breakeven for the first time, indicating that the economy of scales are beginning to materialize. We further expect we expect further improvement in unit of economies going forward. Adjusted EBITDA reached $1,600,000 in the 2025 compared to a loss of $7,800,000 in the 2024, with margin improvement from minus 2.7% to 0.4% positive. To support this growth, we expanded our network capacity during the period by investing in automated sorting equipment, we added new outlets and we also continued to increase our line haul fleet. Last but not least, let’s talk about our cross border business.

We are now exclusively focused on just the b to b sector, primarily in the international freight forwarding. Although this is a modest and stable segment, we maintain this presence to stay engaged in the cross border landscape. Consequently, revenue in the 2025 was $29,000,000 down 43% year on year from $52,000,000 in the 2024. We delivered a positive adjusted EBIT of $2,500,000 or $20.25 dollars despite this decrease, which is a significant improvement compared to the loss of $30,000,000 last year as we refine our business. Finally, let me return to our consolidated numbers.

As a result of the factors outlined above and the combination of what I said, our adjusted net profit reached $156,000,000 in the 2025, representing 147.1% increase from $63,000,000 in the first half of last year. Total net profit for the period was $89,000,000 which is up 186% from $31,000,000 last year. Moving into the cash flow. So I think we as a group, we have maintained strong cash flow numbers. We maintain a strong cash flow.

The net in cash flow from our operating activities amounted to US421 million in the 2025, which is an increase of 21.8%

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: Can you hear us?

Conference Operator: Hi, Pedro. Please continue. We can hear you now.

Dylan, CFO, JNT Express: Okay. So as I was saying, after deducting cash capital expenditure, our free cash flow reached $192,000,000 which underscored our ability to maintain healthy cash generations amidst our rapid business expansion. As of thirtieth June twenty twenty five, we maintained strong cash balance with our total cash, cash equivalents and restricted cash and investments amounting to 1,700,000,000.0 This concludes our prepared remarks. Operator, this concludes our prepared remarks.

Conference Operator: Thank We will now take the first question from the line of Brian Gong from Citi. Please go ahead. Your line is open.

Brian Gong, Analyst, Citi: I will translate myself. Thanks, management, for taking my question, and congratulations on solid earnings. I have two questions. First one is after domestic policy, there has been price hike in few regions. Can management share your thoughts how the the policy can help how does the policy help our sequential improvement on earnings ahead?

And our our overseas password has performed quite decently, especially for Southeast Asia. For Latin America, actually, TikTok shop has been there for a while, and team seems have performed quite well. So how does management think about parcel volume and the financial performance ahead? Thank you.

Dylan, CFO, JNT Express: Okay. I I will yep. This is Dylan. Thanks, Brian. I I will translate for Charles.

Thank you for your question. I think your first question is about the anti involution and the pricing. I think since so Charles was saying that since July, I think the state post bureau has been actively promoting anti involution policy. So currently, have observed varying degrees of price recovery in provinces such as Guangdong, Zhejiang and Fujian. And we’re also seeing other provinces actively engaged in the price negotiations.

So the industry competition has become more rationale in his view, which is also conducive in high quality developments in the long run. However, I think he mentioned that this is likely going to be implemented in phases and the exact impact of these changes on our results still need to be observed. As a company, we will continue to continuously upgrade our network structure and also improve our service quality. So Brian, this is Charles. Answer to your first question.

So, Brian, I think the second question is is about our growth growth prospect of our Latin American market. So Charles is saying that in the 2025, we have achieved the parcel volume increase of 22% year on year in our new markets. This is based out of the deepening collaboration with some of our existing customers, but also as as well as establishing new partnership with new key players such as TikTok and MercadoLibre. And I think we, as you heard that we have successfully achieved adjusted EBITDA breakeven, which is going to lay a strong foundation for our future business development in the Latin American market. So he further commented that the Latin American market is also a very is developing and growing very quickly with major platforms continue to increase their investments in the region.

And J and T, we will maintain our strategic position as a third party logistics provider, providing high value express services to help all our clients to better serve merchants, consumers and others. Since the second quarter, we have also observed a noticeable increase in our faster volume growth in Latin America. We are very optimistic and confident that the region is able to grow further in the coming quarters, and it will serve as another key growth engine for J and T’s global expansion. Brian, so hope we answer your questions.

Brian Gong, Analyst, Citi: Thank

Conference Operator: you. We will now take the next question from the line of Fang Tsung from Bank of America. Please go ahead.

Fang Tsung, Analyst, Bank of America: Let me translate myself. I have two questions. First one, could you provide a latest update and outlook for the non e commerce platform businesses in the Southeast Asia? And second, I just wanted to check whether the operational capacity in Southeast Asia, whether it is sufficient to cope with the strong volume growth year to date and whether we need to accelerate CapEx investment? Thank you.

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: Thank you, Fan, for asking. I think Dylan can take that question.

Dylan, CFO, JNT Express: Okay. Hey, Fan. Hi. Yep. So thanks for the two questions.

First, the first question is about, I think you asked about the non platform or non e commerce parcel volume in Southeast Asia. Short answer is we continue to actively develop continue to develop this customers group, including social e commerce and also key accounts. While the absolute contribution from these these customers have increased, their growth rate is behind less behind those of the ecommerce parcel because the ecommerce parcels are growing a lot faster. Right? So as a result, I think our non ecommerce business accounts for less than 10% right now in our Southeast Asia total parcel.

Okay. However, from a profit contribution perspective, the non e commerce parcels have higher margins and the contribution to the overall margins is steadily increasing. In fact, the profit contribution for this segment significantly exceeds the volume share. Yes. So I think building on I think we talked about this a lot of times.

I think building on the strong non e commerce customers require sustained effort over time. At J and T, we’ll continue to to expand our non ecommerce segment as a long term and strategic focus for our business in Southeast Asia. Ben? And then I think your second question is about let me see. Okay.

The capacity in South Asia. Right? So Right. Yeah. I think we have we have we have maintained very frequent.

As you know, we we plan our capacity by talking frequently with our, especially our ecommerce customers because they they make out a big chunk of our, our capacity. So we talk to them very frequently and, about their their needs and their product their their needs in the coming page or the next the next certain time frame. So based on those communications, we will update our volume forecast and proactively carry out capacity upgrades in advance of time. During the peak of Ramadan in the first quarter this year, our daily volume exceeded 27,000,000 parcels. Right?

And we didn’t have any capacity related issue. So as you can see from our disclosed quarterly operational data, I think we added one extra sorting centers in Southeast Asia precisely to expand our capacity expansion effort. I would I would say, at this moment, our daily capacity in the region, now comfortably can handle more than 30,000,000 parcels a day, which fully positions us to handle the upcoming peak during the during the fourth quarter shopping seasons, especially in the second half. Right? I think but it’s also just on on the as a side note, right?

So I think our capacity in Southeast Asia is spread across multiple countries, and we don’t evaluate the overall utilization based on a single aggregation metrics. But overall, I would say our capacity is at a very healthy level. And also given the rapid expansion of our parcel volume, we will expect the demand of the CapEx continue to build on our capacity gradually quickly as well. Yeah. So we’ll continue to to upgrade and continue to expand our capacity to make sure that we can meet our customers’ needs.

Right? Last but not least, I I will I think I would just add capacity. One of the things that we have done, I think we talked about this a lot, is we continue to invest significantly in the automation equipments and our fleet to make sure that while we increase the capacity, another very important factor is the cost, the unit cost. So are we driving down our unit cost? Yes.

So we are very active on that and so we continue to do this. Got

Fang Tsung, Analyst, Bank of America: it. Thank you very much.

Conference Operator: Thank you. We will now take the next question from the line of Hu Junghwan from Chang Jiang Securities. Please go ahead.

Hu Junghwan, Analyst, Chang Jiang Securities: I have two main questions. The first one on the domestic front, what is potential a cost reduction and efficiency improvements in the company? How to view the current anti evolution momentum and the policy sustainability? The second, what are the growth expectations in the market share expansions plans in the Southeast Asia? Are there any plans to enter new countries in terms of our market expansions?

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: Thank you for asking. I think Charles can take two questions.

Dylan, CFO, JNT Express: Okay. Let me okay. Hold on. Let me try and see whether I capture everything. Okay?

So I think Charles was saying that as everybody know, we entered the Chinese market in March. Over the last five years, Jen, we have consist we have tried to benchmark ourselves against our the industry leaders here, our peers who have been operating, you know, in the in this thirty year industry in China. I think we try to actively learn the best practices we can so that we can really drive down our cost. But I think as our team continue to execute with strength, have optimized our network. And as a result in the 2025, our transport and sorting cost per parcel has decreased to RMB0.70 down from RMB0.13 by RMB0.13 year on year, narrowing the gap with the leading peers.

Also, mentioned that our transportation cost per parcel is around 40 reach around for drive down to around RMB0.40 per parcel, but still behind our top players by around RMB0.03. Sorting cost on the other hand per parcel, now we are around RMB0.30. We are also behind our peers by about RMB0.03 to RMB0.04, Right? So that’s that’s the the cost side. And I think as and you also mentioned that we have a very clear goals and we have a we obviously want to reduce this cost gap further.

We continue to do benchmarking, and we continue to benchmark how we do our business and against our to try to learn from the industry leaders here. There are about four fronts that I think you will that we continue to that we will drive the four directions. One is on the transport front. So the transportation front, we continue to expand our fleet size. We will better coordinate the how to how to how to balance the self our self self fleet, our own fleet, as well as the third party resource and also increase the loading rates and also try to use the higher pro more higher proportion of high capacity vehicles to improve our logistic efficiencies.

So that’s the first one. Secondly, I think you talked about the sorting. I think the sorting so we continue to to deploy more automated equipment. We will continue to train train our operators better through trainings and other measures. And so that’s the second one.

And the third one is the the network. So the network is also very important. So we as we continue to optimize the scale and density of our network, we will continue to drive down actually drive up the investment in the automated equipments at our network. Right? Because at this scale, we need to continue to improve on that.

With that, our he commented that network partners operating service qualities as well as the consistency has improved significantly over time. Right? Last but not least, he mentioned that we will continue to invest in digitalization and the smart automations. This this particular in our industry. We continue to adopt these new technologies to continue to drive down drive down the cost.

So we we will continue to to do all these things across across the different parts of our value chain to make sure that we can break down the cost. So I think his final remark, we are cutting I thought he finished, but he’s talking about the empty involution. So I think, yeah, we we did observe some of the price recovery in some regions, but we think that but he thinks that more time is needed before before we can really see how sustainable and how big the margin recovery can be. Yeah. Because it also depends on the how how this policy will be implemented across the geographies.

Yep. So that’s the hopefully hopefully, I covered the first question. Yeah. Okay. So the second question about the growth rates of Southeast Asia and also whether you have plans to open a new market.

Market. So Charles was commenting that so I think the according to the industry reports, I think we also published that. The e commerce market in Southeast Asia is expected to grow very quickly at maybe CAGR of 10%, 15% between 2025 to 2029. So it indicates that the e commerce and delivery sectors in this region will continue to enjoy the high growth, right? So I think as we continue to adopt our or replicate our experience from China into the region, we hope that we can continue to increase further our market share.

We can continue to increase our quality, reduce our cost and become continue to enhance our market leadership in the region. Right? And and and he also secondly, he mentioned that Steven Steven said is he echoed what Steven said earlier that this is a ten year which is ten year for James.

Conference Operator: Please standby. Hi.

Dylan, CFO, JNT Express: Can you hear us?

Conference Operator: Yes. We can hear you now. Thank you. Please continue.

Dylan, CFO, JNT Express: Apologies, guys. So, yeah, just final final thing about so as we crosses the ten year mark, so Charles was commenting that we continue to evaluate you know, potential markets across the globe for feasibilities, for suitable timing, etcetera. So I think as soon as we have something concrete, we will announce it to all of you. Yeah. Hopefully, that answers your question.

The second question is. Can you guys hear us?

Conference Operator: Yes. We can hear you.

Dylan, CFO, JNT Express: Okay. Yeah. We answer the second question.

Conference Operator: Can we go to the next question?

Dylan, CFO, JNT Express: Yeah. Okay.

Conference Operator: Thank you.

Dylan, CFO, JNT Express: Yeah. We can take you.

Conference Operator: We will now take the next question from the line of Gangchen Liu from CICC. Please go ahead.

Gangchen Liu, Analyst, CICC: So let me translate for myself. Thank you for taking my question and congrats on the strong growth. I have two questions. The first one is about Southeast Asia on the unit economics guidance about unit costs. And for the unit for the ASP, is there any principle or baseline for us to balance our parcel volume growth and the jobs in our ASP?

For example, are we anchoring on any kind of metrics, for example, margins or unit profit and so this will help us on the modeling and the forecast? And the second question is about the franchise model adoption in Southeast Asia. Can you share with us the current status and if possible any future expectations? Thank you.

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: Thank you, Gansheng for asking. I think Dylan can take the two questions from you.

Dylan, CFO, JNT Express: Okay. Hey, Gangchen. I’ll answer your these two questions. Okay. I think the first question is on The UAE.

Right? South Asia UAE. I think as you know, we continue to we have it has plus the last few years, our EBIT per parcel has has been very stable. I think we try to balance the the long you know, to to balance to balance our growth alongside our price our ASP strategy along with our cost reduction strategy. Right?

So as you know, we are continue to be the leading the player in the region. And in fact, we continue to expand our market share, and we get cost advantage from this scale increase. And meanwhile, you know, we continue to share this cost benefit with our anchor ecommerce platform customers so that we can continue to stay very efficient to build the most efficient network that we can in Southeast Asia. Right? On the cost front, I think our unit cost stands around 50¢ US dollars.

We think that there’s still a a big a big room that we can further reduce. Right? For example, I think, as you can see, our parcel volume has increased 58% year on year, and we have we can we can create greatly increase the utilization efficiencies of all our sorting centers, vehicles, and outlets and drive down our cost. Right? So as we continue to adopt those various cost strategy, think we talked about this many times, we have continued to expand our our own fleet.

We continue to put in automated sorting equipment. We continue to optimize our network. We can continue to drive down those costs. And then we think we think that there’s still a lot of room for for for for cost reduction. And all these efforts will will help us to maintain a relatively stable per parcel profit going forward.

That’s that that that’s our that’s our thinking. I think your second question is about you call it the franchise. Right? The franchise or we we call it the network partner, I think it’s the same thing. Right?

So you’re asking how how the network partners are implementing in the other across the non China markets. So I think it’s twofold. Right? In the so we actually the short the short answer to answer your question is that we are actually implementing this network partners model across Southeast Asia and even our new markets. Right?

But we will be very careful with that. We will we will adapt it very carefully to the local con to to come you know, to the depending on the local situations and and also see how and based on our local insights. So I think the most important thing that we think is selecting and developing the very high potential and good quality network partners to join our network. Right? So maybe just give you a sense.

I think currently, I think our the network partners across Southeast Asia, we have about 30% of our network that is run by our network partners. 30%. And and Mexico and Brazil, we are also steadily replicate replicating this model into Latin America, Mexico and Brazil. Right? So for us, from our perspective, the it’s very important that the network partners continue to demonstrate the ability to improve efficiencies and reduce cost alongside with us.

Because once we have got the network partners model, it’s not just our cost at our centers, our line haul. We also need them to manage the cost at the delivery end as well. Right? So we also there’s one one area we look at them. Second thing, we also look at whether they can do business development because the the beauty of this network partners is they are able to bring in new business because they’re highly incentivized to work like us, to think like us as entrepreneurial company.

So we we look at how they’re bringing new customers, how they’re bringing growth into our network. Right? Yeah. I think, overall, I think we are we believe that this is one one of the network partner strategy. I think we’re only 30% there in Southeast Asia, and I think we will continue to use this to adopt it across our network to continue to lower our cost for your first question earlier.

Okay. That’s very fair.

Gangchen Liu, Analyst, CICC: Helpful. Thank you, Dylan. Again, congratulations.

Dylan, CFO, JNT Express: Thank you.

Conference Operator: Thank you. We will now take the last question from the line of Arun Luo from UBS. Please go ahead.

Arun Luo, Analyst, UBS: So let me translate myself. First of all, congrats for the strong H1 results. And I have two questions. The first one is about your recent cooperation with MercadoLibra. I mean, now from the recent news and you also just mentioned earlier.

So just could you please share a bit more of the background and the current progress on this? This is the first question. The second one is about AI technologies. We know that the market has a lot of hope that development AI, including the unmanned vehicle that could bring bigger improvement on logistic network efficiency. So just curious about what kind of initiatives you have taken and your future plan for further embracing AI technologies and also the M and D vehicles.

Thank you so much. Thank

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: you, Alan, for asking. I think, Steven, we’ll take your questions.

Fang Tsung, Analyst, Bank of America: Okay.

Heping Chen, Director of Strategic Investment and Capital Markets, JNT Express: Yeah.

Dylan, CFO, JNT Express: Yeah. I think and so I I’ll translate for Steven. Right? So so he’s saying that the MercadoLibre, you know, as you know, the Mercado is the largest ecommerce platform in Latin America. The average order value is higher, and they also have relied historically on their own in house logistics systems.

But in recent years, as the ecommerce competition intensify across the region, Mercado has lowered the free shipping cost to capture the lower tier market segments. This ship has increased the demand for the cost effective 3PL services, like the one that we provide. Right? So as you know, we continue to operate with Chinese excellence replicating also into this, and we have good success in replicating the Southeast Asia. So we continue to take all these abilities that we have and continue to replicate that into Latin America by offering them high value express delivery solutions.

Right? So as we continue to benefit on the economy of scale and also optimize our network, we will continue to further our cost as well. Further, we have room to further reduce our cost as well while we continue to enhance quality and also our competitiveness. Right? Right now, so Stephen commented that the MercadoLibre’s volume is still relatively very small.

It’s just as and it’s also very it’s also very small share of their total business. So the but the the collaboration has progressed so smoothly, and we see a significant potential, and we look forward for further expand this relationship with them. Eric?

Brian Gong, Analyst, Citi: Yeah.

Dylan, CFO, JNT Express: Okay. So for the second question about smart logistics, so I think Steven mentioned that. So I think we we continue to focus on deploying the adopt this advanced technologies that we can get from China into the different market, the South Asian markets and new markets, but, of course, in varying degrees. Right? So first but let let’s talk about China first.

So I think you first start off talking about China. You said that we first pilot. We started piloting the auto autonomous delivery vehicles, I think, back in 2023. And some of these some of these network partners have have have received a very significant cost savings benefit from this. And they can but the way we work is the friend the network partners are responsible for procuring those vehicles independently, and we will continue to provide encouraging support policies to help them to do so.

So to date, I think we have deployed over 900 autonomous delivery vehicles, and this has greatly enhanced the last mile delivery network, efficiency in our network. Right? And going forward, we also further support our network partners to continue to adopt and promote more usage of this according to the operational needs. Then he commented about Southeast Asia and new markets, but that’s not probably not on the autonomous front. I think he he mentioned about equipment.

We will try to localize the proven auto auto sorters and the equipments and operating system from China into Southeast Asia and new markets. At the June, we have deployed 57 automated sorting equipments in Southeast Asia. We have deployed 10 in the new markets and substantially improved efficiencies in these markets these places. We continue to see strong potential to use different technologies into different regions. We continue to stay robust and also open in applying all these innovative application and technologies so that we can continue to maintain our technology leadership and our cost leadership and our market leadership.

Right? Okay. Yeah. Go ahead. Yeah.

Yep. That’s k.

Conference Operator: Thank you. This concludes today’s conference call. Thank you for participating. You may now disconnect.

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