Amy Han's questions to ZTO Express (Cayman) Inc (ZTO) leadership • Q1 2025
Question
Amy Han questioned the Q1 progress of ZTO's 'direct linkage' initiative and its expected contribution to cost savings for franchisees and the entire value chain this year. She also asked for expectations regarding parcel volume for the upcoming June 18 shopping festival, whether price competition might ease, and the potential for further industry-wide ASP declines.
Answer
CFO Huiping Yan, translating for Chairman Meisong Lai, explained that the 'direct linkage' initiative is a critical focus aimed at reducing last-mile costs and increasing outlet earnings, estimating it could generate CNY 4 billion in annual cost savings for network partners. She emphasized that ensuring partner profitability is crucial for network stability amid intense competition. Yan acknowledged that the entire industry is under pressure from price declines and a changing parcel mix. She reiterated ZTO's full-year guidance, stressing the company will remain flexible on pricing to support its network for long-term, normalized growth.