ZTO Express (Cayman) Inc. American Depositary Shares, each representing one Class A ordinary share 2026 Q2 Earnings Call

Thank you, Chuck. Hello everyone, and thank you for joining us today. The company's results and investor relations presentation were released earlier today and available on the company's IR website at ir.zto.com. On the call today from ZTO are Mr. Meisong Lai, Chairman and Chief Executive Officer, and Ms. Huiping Yan, Chief Financial Officer. Mr. Lai will give a brief overview of the company's business operations and highlights, followed by Ms. Yan, who will go through the financials and guidance. They will both be available to answer your questions during the Q&A session that follows. I remind you that this call may contain forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions, and they relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding this and other risks, uncertainties and factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under law. It is now my pleasure to introduce Mr. Meisong Lai. Mr. Lai will read through his prepared remarks in their entirety in Chinese before I translate for him in English.

Mason, please. 大家好，感谢各位参加今天的电话会议。2026年二季度，快递行业业务量同比增长4.2%，伴随着反内卷政策持续落地深化，市场竞争逐步回归理性，行业整体定价与盈利水平正在逐步稳步修复，整个行业正实实在在地从过去单纯拼规模、拼价格，转向更加看重价值，看重网络根基，看重基层伙伴获得感的新阶段。中通二季度各项核心指标、核心经营指标取得了扎实的进展，业务量达成104.9亿件，同比增长6.5%，市场份额提升0.4个百分点，进一步夯实我们的行业龙头地位。调整后净利润为CNY30.9亿元，同比增长50.3%，盈利的韧性得到再度验证。闪件业务同比增长47%，高价值多元化增值业务持续做大，为网点拓宽增收渠道。本季度油价波动带来阶段性成本压力，但依托全链路数字化改造与精细化运营落地，我们实现单票次运及分拣成本同比下降二分。中通长期构筑的成本壁垒依然坚固。中通二季度的业绩是政策环境引导、公司长期战略定力、全网伙伴同心同向、运营提效、产品结构升级五大维度协同的结果，更离不开全国成千上万网点经营者与一线快递员的实干付出。首先，行业监管导向清晰，反内卷方针常态化落地。中通坚持维护良性的行业竞争秩序，兼顾平台、加盟商、一线从业人员三方利益，致力于共建各方都能共享发展成果的可持续网络生态。其次，公司始终秉持长期主义，摒弃单纯追求短期规模的粗放发展模式，不但夯实中长期发展根基与竞争优势，我们把网点盈利稳步增长、快递员收入持续提升、事业稳健发展作为我们经营的核心目标，围绕份额优化、服务升级、全链路降本三大主线持续深耕。第三，全网统一思想，持续倡导政策的公平与透明，正视区域发展的客观差异，进一步疏通一线反馈渠道，结合网点实质经营现状，匹配激励与帮扶资源，从源头理性利益分配，落实多劳多得，持续提升全网收益水平与经营稳定性。第四，推动运营管理效益向网点下沉。我们搭建常态化经营数据复盘体系，实现经营状况可视、可控配送链路效益，推广分时送服务，精简终端环节，为末端释放更多利润空间。第五，持续拓展分层的高价值业务竞争，深耕闪件、逆向件市场，不断优化支持电商件与征集业务的业务结构，对冲单一业务波动，增强全网盈利韧性。当前，中国快递行业已经告别单纯的规模竞争，正迈入高质量可持续发展的新阶段，围绕两高一低的战略核心，也就是高质量服务、高质量份额和低全链路成本，持续中通将继续推进以下五大核心工作。第一，持续维护行业良性竞争环境，严格落实监管规范，带头推动行业整体竞争秩序持续改善。第二，夯实服务、份额、成本三位一体的综合竞争力。服务端重点做强上门服务的能力，塑造品牌差异化优势。份额端完善客户分层梳理，提升中小客户与征集业务占比。成本端可比网点横向对标，将降本成果与成本优势传导至最末端。第三，拉起全网经营管理水平，统一全网政策标准，针对亏损网点实施定向整改，依托数字化下沉赋能加盟合作伙伴降本增收，鼓励优质网点做大做强，帮扶困难网点走出困境，营造互利共赢的网络生态。第四，深化数字化运营和赋能，开展全网数字化实操培训，引导网点用好数字工具，补齐货量、成本、服务等层面的短板，适合业务增速，合理储备场地及运力资源。第五，做好全网安全管控和一线权益保障，定期排查，消除安全隐患，压实各级管理责任，严守生产用工、税务等合规红线，持续优化业务员激励与分配机制，保障基层从业者合理收入与合法权益。20多年一路走来，我们经历过逆境，也经历过激烈市场竞争的锤炼。我们始终看得明白，规模只是基础，质量才是根本。我们坚守服务质量、市场份额、合理利润三位一体的发展方针，践行同建共享的理念，笃信平台与网点、快递员是同生共成的整体，只有各方共同提升经营效益，理性利益分配，整张网络才能行稳致远。怀揣用我们的产品造就更多人幸福的使命，依托坚实的基建底盘，稳健的财务实力，持续释放的数字化效能，维护和增强合作网络的凝聚力和稳定性。我们有信心，也有能力实现全网经营的稳健发展，穿越经济与行业周期，为快递物流从业人员，为广大投资者创造持久的价值回报。谢谢大家。接下来请严总介绍财务结果和预期。 Thank you Chairman Lai. Now let me do the translation first.

Hello everyone. Thank you for joining today's conference call. In the second quarter of 2026, the express delivery industry grew 4.2% in volume year over year. As anti-monopoly policies continue to gain traction, competition became increasingly rational and the overall industry pricing and profitability experienced a steady recovery. The industry is fundamentally shifting from its previous singular focus on scale and price wars towards greater emphasis on value creation, network stability and tangible benefits for frontline partners. ZTO made solid progress across key operating metrics in the second quarter. Parcel volume reached 10.49 billion, up 6.5% year over year, with market share expanding by 0.4 percentage points, entrenching our industry leadership position. Adjusted net income was CNY 3.09 billion, up 50.3% year over year, reaffirming the resilience of our profitability. Retail parcel volume grew 47% year over year, as our higher value and diversifying value added service continued to scale up, increasing revenue diversity for our network outlets. While facing temporary cost pressures caused by oil price fluctuations during the quarter, our end-to-end digitization that intelligence transformation combined with refined operational execution, enabled us to lower the combined unit cost of transportation and sorting by CNY 0.02 over last year Preserving cost competitiveness that were forged over the years.

ZTO's second quarter performance is the outcome of synergies across five core aspects, which are productive policy guidance, unwavering long-term strategic focus, solidarity, and the concerted efforts by network-wide partners, continuous increases in operational efficiency, and improving product structure. It also owes much to the hard-won contributions by thousands of outlets, operators, and frontline delivery workers network-wide. First, regulatory direction remains clear, and anti-involution policies were being consistently implemented. ZTO stands firm to safeguard a healthy competitive order, balances the interests of headquarters, franchisees, and frontline practitioners, and commits to fostering a sustainable eco-network with equitable shares of benefits for all stakeholders. Second, the company maintains a long-term mindset that discourages impermanent short-term scale gains, and continuously consolidates foundational strengths for its mid- and long-term development.

We regard steady profit increases for network outlets, sustained earnings growth for frontline careers, and healthy corporate development as our core operating objective, and we continue to deepen our initiatives surrounding three key priorities: market share expansion, service quality upgrading, and end-to-end cost reduction. Third, the entire network will be unified with strategic alignment and increasingly advocate fairness and transparency in network policy making and implementation. We have an objective view on regional economic disparities and have further streamlined grassroots feedback by tailoring incentive schemes and support resources to match all its actual operating conditions. We have further optimized the profit distribution mechanisms at the ground level through performance-based remuneration. Hence, steadily elevated the overall profitability and operational stability of the entire network. Fourth, we are extending our know-how for efficiency gains to outlets.

We have built a standardized and ongoing operational data analytical system to enable performance visibility and traceability. We continue to enhance last mile ops efficiencies through direct linkages, reducing organizational layers and expand profit margins. Fifth, we continue to enhance our tiered high-value business portfolio by penetrating deeper into retail parcels and reverse logistics, which optimize the mix between standard e-commerce parcels and value-added services. This also hedges against the potential single-source fluctuations and strengthens the resilience of network profitability. China's express delivery industry is progressing from high quantity competition to high quality and sustainable development. Focusing on the strategic principle of achieving high-quality service, high-quality market share, and low end-to-end cost. ZTO will further our tasks in the following five key areas. First, continue to safeguard an environment of fair competition.

We will adhere to regulatory guidance and take on a leadership role in maintaining the industry's overall competitive order. Second, improve integrated competitiveness in service, market share, and cost. On service, we will focus on door-to-door capabilities to build a clearly differentiated brand awareness. On market share, we will refine customer segmentation, increasing the proportion of small to medium-sized customers and value-added services. On cost, we will establish benchmarks for comparable outlets and pass through the what and how of efficiency gains to the end nodes. Third, improve consistency of managerial capabilities across the network. We will standardize policies and customize improvement plans for loss-making outlets. By pushing down digitalization efforts, we will empower franchisee partners to reduce costs and grow revenue. We will encourage top-performing outlets to scale up and support struggling outlets in overcoming adversity to foster an eco-network of mutual benefit and shared prosperity.

Fourth, deepen digitization design and implementation. We will roll out hands-on training across the network, guide outlets in effectively utilizing tools to narrow gaps in volume, cost, and service. We will also proactively align demand and capacity through careful planning. Fifth, ensure comprehensive safety management and protect grassroots rights. Regular safety inspections will be conducted to identify and eliminate hazards. Enforce accountability at all levels, and establish strict compliance boundaries such as safety, labor practice, and taxation. We will continue to refine courier incentive and compensation schemes, safeguarding their legitimate rights and interests. Over the past two decades, we have overcome adversity and weathered intense competition. We have always been clear-minded that scale is merely an outcome, and quality is what truly matters. We are committed to our development principle that integrates service quality, market share, and reasonable profitability.

We practice our philosophy of shared success, and we firmly believe that the headquarters, outlets, and couriers are interdependent parts of that unity. Only when all parties collectively improve operational efficiency and increase shares of benefits, the entire network can then achieve lasting stability and long-term success. Guided by our mission of bringing happiness to more people through our services, supported by a solid infrastructure foundation and sound financial strength, we will continue to harness digitization efficiency, maintain and strengthen cohesiveness and stability of our partner network. We are confident and capable of achieving steady, sustainable growth across the entire network, navigating through industry or economic cycles, and creating lasting value for industry participants and our investors. Now, let's invite Ms. Yan to present the financial results and guidance.