ZTO Express (NYSE:ZTO) Q3 2019 Earnings Conference Call - Final Transcript

Nov 18, 2019 • 08:00 pm ET

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ZTO Express (NYSE:ZTO) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and welcome to the ZTO to announce Third Quarter Financial Results On December 18, 2019 Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Sophie Li. Please go ahead.

Executive
Sophie Li

Thank you, operator. Hello, everyone, and thank you for joining us today. The Company's results and the 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 relate to events that involve known or unknown risks, uncertainties and other sectors, 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 US 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. Lai Song?

Executive
Meisong Lai

[Foreign Speech] Please allow me to translate for Chairman first. Hello, everyone. Thank you for joining us on today's conference call to discuss the Company's third quarter results. During this quarter, ZTO maintained industry-leading service quality and customer satisfaction and delivered 3.06 billion packages, an increase of 45.9% year-over-year or 18.4 percentage points higher than the industry average. Our market share rose 2.3 percentage points year-over-year to 18.9%. Meanwhile, we delivered RMB1.32 billion of adjusted net income, a 24.6% growth from the third quarter last year. By focusing on our strategic goal, ZTO capped a strong growth momentum in the third quarter, as we achieved profit target, while ensuring high-quality of service and customer satisfaction.

First, our recalibrated network policies for 2019 has been taking good [Technical Issues], more and more local markets saw this year widen its volume need and attained regional advantages.

Second, with greater volume comes magnified economies of scale. We were able to leverage infrastructure resources we have accumulated over the years, as well as multi-generational enhancements in automation and transportation capabilities. Combined sorting hub and line-haul transportation costs per parcel declined 10.7% to RMB0.90.

Third, we increased