Lu Jiang's questions to ZTO Express (Cayman) Inc (ZTO) leadership • Q2 2024
Question
Lu Jiang questioned ZTO's capital expenditure plans for 2024, 2025, and the longer term, asking about investment allocation and how the company would manage its CapEx. A second question focused on future cost reduction plans across the entire operational process.
Answer
Chairman and CEO Meisong Lai, translated by Sophie Li, stated that major CapEx for building sorting centers is largely complete, with sufficient land reserves for future needs. Consequently, CapEx spending is expected to be stable or declining, leading to increased free cash flow for shareholder returns. For future cost reduction, Mr. Lai highlighted the 'tri-layer throughput' concept, which aims to reduce the number of sortations per parcel, thereby saving significant sorting and transportation costs.