ZTO Express (NYSE:ZTO) Q1 2020 Earnings Conference Call - Final Transcript

May 20, 2020 • 09:00 pm ET


ZTO Express (NYSE:ZTO) Q1 2020 Earnings Conference Call - Final Transcript


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Good evening, and welcome to the ZTO to announce First Quarter Financial Results on May 20, 2020 Conference Call. [Operator Instructions]

I would now like to turn the conference over to Meisong Lai, Chairman and CEO. Please go ahead.

Sophie Li

Thank you, operator. Please allow me to read the safe harbor first. 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'll 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 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 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 brief through his prepared remarks in their entirety in Chinese before I translate for him in English.

Meisong Lai

[Foreign Speech] Thank you, Chairman. Please allow me to translate first. Well everyone, thank you for joining us for today's conference call. Considering the impact of the COVID-19 pandemic during the first quarter, ZTO's overall performance was better than expected. We achieved a 2.37 billion parcel volume and RMB635 million of adjusted net income. Our market share went up slightly to reach 18.9% benefitting from the national toll-free waiver and the declining global oil prices, our combined sorting out transportation costs per parcel decreased 13.1%, partially offsetting the ASP decline in the first quarter. During the pandemic express delivery, as one of the backbone industry to support social stability, returned to normal operations ahead of many other industries, thanks to strong policy support. The industry parcel volume growth recovered to 23% in March and further improved to 32% in April, which was faster than last year.

Online retail sales of physical goods grew 5.9%. In the end [Phonetic] total China's consumer retail sales fell nearly 20% in the first quarter. On one hand, consumer spending migrated from offline to online during the pandemic, with more volume and across greater