Aaron Luo

Aaron Luo with UBS inquired about the underlying drivers of the recent industry-wide volume slowdown, particularly its relation to pricing recovery. He also asked for ZTO's outlook on volume growth for the next year and potential shifts in the competitive landscape or dynamics resulting from this slowdown.

Answer

Chairman and CEO Meisong Lai attributed the slowdown to price increases from the anti-involution policy, which impacted price-sensitive low-cost e-commerce parcels, leading to a healthier industry structure. He projected next year's volume growth to be around 10%, shifting from volume-oriented to quality-oriented development. CFO Huiping Yan confirmed the low single-digit industry growth in October, reiterating that price increases affected low-margin e-commerce merchants. She stated that leading companies with strong service capabilities are poised to regain competitive positions, expecting next year's industry volume growth to stabilize around 10%, driven by regulatory influence and corporate self-discipline.

Aaron Luo asked about the underlying drivers of the recent industry volume slowdown, particularly its relation to recent price recoveries, and ZTO's outlook for volume growth next year. He also inquired about potential changes in the competitive landscape or dynamics due to the volume slowdown.

Answer

Chairman and CEO Meisong Lai attributed the industry slowdown, including October's low single-digit growth, primarily to price increases driven by the anti-involution policy, which impacted price-sensitive low-cost e-commerce parcels. He noted a shift towards a healthier industry structure, benefiting quality-focused leaders. For next year, he expects healthy volume growth, likely around 10%, as the industry moves from volume-only to high-quality development, with resources favoring service and efficiency. He anticipates continued industry differentiation driven by regulation and self-discipline. CFO Huiping Yan confirmed the industry deceleration, noting October's low single-digit growth, and linked it to price increases from the anti-involution policy, impacting low-margin e-commerce. She expects next year's volume growth to stabilize around 10%, with the industry shifting to high-quality development, favoring service quality and operational efficiency, leading to a healthier competitive landscape.

Aaron Luo inquired about the growth outlook for retail and return parcels in 2025, asking for a specific target and an update on unit economics amid rising competition. He also asked about the potential for further reductions in core transportation and sorting costs and the expected impact of social insurance expenses.

Answer

Chairman Meisong Lai, translated by CFO Huiping Yan, set a 2025 daily retail parcel volume goal of 8.4 million, a significant increase from 5.46 million in 2024. For costs, the goal is to reduce combined sorting and transportation unit cost by at least RMB 0.03 in 2025. Regarding social welfare, he confirmed 100% coverage for direct and outsourced employees and highlighted ZTO's pioneering role in providing group accidental insurance for couriers to ensure network stability.