Financial Performance - The company's operating revenue for Q3 2021 was CNY 1,104,660.73 million, representing a year-on-year increase of 24.98%[5] - The net profit attributable to shareholders for Q3 2021 was CNY 30,847.70 million, a decrease of 25.68% compared to the same period last year[5] - The basic earnings per share for Q3 2021 was CNY 0.0975, down 24.83% year-on-year[5] - The company's net profit for Q3 2021 was CNY 1,002,412,272.46, a decrease of 30.8% compared to CNY 1,446,110,461.62 in Q3 2020[23] - Operating profit for Q3 2021 was CNY 1,240,506,723.74, down from CNY 1,703,603,286.16 in the same period last year, reflecting a decline of 27.1%[23] - The total profit for Q3 2021 was CNY 1,219,448,932.62, down from CNY 1,693,781,187.51 in the same quarter last year, a decline of 28.0%[23] - The company reported a total comprehensive income of CNY 983,152,581.51 for Q3 2021, down from CNY 1,425,299,993.81 in Q3 2020, a decline of 30.9%[24] - Basic earnings per share for Q3 2021 were CNY 0.3020, compared to CNY 0.4526 in Q3 2020, reflecting a decrease of 33.2%[24] Assets and Liabilities - Total assets at the end of Q3 2021 reached CNY 2,900,882.39 million, an increase of 9.76% from the end of the previous year[6] - As of September 30, 2021, total assets amounted to RMB 29,008,823,873.51, up from RMB 26,429,151,896.93 at the end of 2020, reflecting a growth of approximately 9.9%[19] - The total liabilities as of September 30, 2021, were RMB 10,953,903,165.16, compared to RMB 8,913,481,219.30 at the end of 2020, an increase of about 23.0%[19] - The total cash and cash equivalents at the end of Q3 2021 amounted to approximately ¥4.02 billion, down from ¥3.89 billion at the end of Q3 2020, reflecting a net decrease of ¥634 million[28] - The total liabilities increased to approximately ¥9.67 billion in Q3 2021, up by ¥756 million compared to the previous period[32] - The company's total current liabilities reached approximately ¥8.63 billion, an increase of 2.4% from ¥8.83 billion in the previous period[32] - The non-current liabilities totaled approximately ¥835 million, reflecting an increase due to the adoption of new leasing standards[32] Cash Flow - The company reported a net cash flow from operating activities of CNY 163,959.95 million for the year-to-date, down 9.30% year-on-year[5] - The cash flow from operating activities for Q3 2021 was CNY 1,639,599,517.76, compared to CNY 1,807,649,850.94 in Q3 2020, indicating a decrease of 9.3%[27] - The cash flow from investment activities for Q3 2021 was negative at CNY -3,499,462,016.22, compared to CNY -2,718,255,407.71 in Q3 2020, indicating increased cash outflows for investments[27] - The net cash flow from financing activities for Q3 2021 was approximately ¥1.23 billion, a decrease of 3.3% compared to ¥1.28 billion in Q3 2020[28] - The company's cash flow from financing activities increased to approximately ¥2.47 billion in Q3 2021, compared to ¥1.99 billion in Q3 2020[28] Shareholder Information - The company had a total of 56,157 common shareholders at the end of the reporting period[10] - The largest shareholder, Shanghai YTO Dragon Investment Development (Group) Co., Ltd., held 33.01% of the shares[10] Costs and Expenses - Total operating costs for the first three quarters of 2021 were RMB 29,413,071,005.79, compared to RMB 21,949,075,074.00 in 2020, indicating an increase of about 34.0%[20] - The company's financial expenses for Q3 2021 were CNY 4,197,906.63, compared to a financial income of CNY 18,279,483.51 in Q3 2020, indicating a significant shift in financial performance[23] - Research and development expenses for Q3 2021 were CNY 33,637,415.78, up 32.4% from CNY 25,401,613.46 in Q3 2020[23] Market Conditions - The decline in net profit was attributed to increased industry competition, changes in market trends, and the cancellation of government incentives during the COVID-19 pandemic[9]

Financial Performance - The company's operating revenue for the first half of 2021 was CNY 1,949,503.21 million, representing a 33.70% increase compared to CNY 1,458,100.31 million in the same period last year[12]. - The net profit attributable to shareholders of the listed company decreased by 33.50% to CNY 64,562.25 million from CNY 97,090.10 million year-on-year[12]. - The net profit after deducting non-recurring gains and losses was CNY 59,435.17 million, down 33.74% from CNY 89,698.26 million in the previous year[13]. - The net cash flow from operating activities was CNY 85,721.79 million, a decrease of 30.29% compared to CNY 122,968.00 million in the same period last year[13]. - Basic earnings per share decreased by 36.67% to CNY 0.2045 compared to the same period last year[14]. - Diluted earnings per share decreased by 34.64% to CNY 0.2043 compared to the same period last year[14]. - The weighted average return on equity decreased by 2.83 percentage points to 3.70% compared to the same period last year[14]. - The company's operating costs rose to CNY 1,812,238.58 million, marking a 40.65% increase from CNY 1,288,511.66 million year-on-year, primarily due to business volume growth[60]. - The gross profit margin for the express delivery sector decreased by 4.26 percentage points year-on-year, with a current gross profit margin of 5.78%[63]. Assets and Liabilities - The total assets at the end of the reporting period were CNY 2,777,102.37 million, an increase of 5.08% from CNY 2,642,915.19 million at the end of the previous year[13]. - The net assets attributable to shareholders of the listed company increased by 1.03% to CNY 1,730,560.88 million from CNY 1,712,949.40 million at the end of the previous year[13]. - The company's total assets as of June 30, 2021, were CNY 27.77 billion, compared to CNY 26.43 billion at the end of 2020, marking an increase of approximately 5.1%[138]. - Short-term borrowings increased significantly to CNY 2.94 billion from CNY 1.75 billion at the end of 2020, representing an increase of about 67.5%[138]. - Total liabilities increased to ¥10,061,696,872.33 from ¥8,913,481,219.30, representing a growth of approximately 12.9%[139]. Operational Efficiency - The average efficiency per employee improved by over 20%, with the single ticket operation cost at CNY 0.31, a decrease of CNY 0.02 or 5.52% compared to the previous year[53]. - The company achieved a nearly 4-hour reduction in overall delivery time compared to the same period last year, enhancing operational efficiency[46]. - The average monthly package loss rate decreased by nearly 15% year-on-year, indicating improved package security measures[47]. - Customer complaint rates dropped by over 38% year-on-year, reflecting enhanced customer service capabilities[49]. Franchise and Network Expansion - The company has a total of 4,936 franchisees and 34,490 end points across the country as of June 30, 2021[17]. - The company operates 75 self-owned hub transfer centers and has over 6,000 trunk transport vehicles, including 4,033 self-owned vehicles[17]. - The company expanded its franchise network to 4,936 franchisees and 34,490 terminal points by the end of June 2021, enhancing its service coverage[54]. - The company has established over 53,000 terminal stores nationwide, with a package entry rate into cabinets exceeding 56%, significantly improving delivery efficiency[56]. Digital Transformation and Technology - The company has introduced a digital platform for real-time tracking and management of the entire logistics process[18]. - The company is actively expanding its digital transformation efforts, utilizing big data and cloud computing to improve service quality and operational efficiency[44]. - The customer management tool "Customer Butler" has been integrated with multiple e-commerce platforms, increasing daily active users steadily[50]. - New product development initiatives include the launch of an automated logistics platform, expected to enhance operational efficiency by 30%[183]. Market Trends and Industry Insights - The express delivery industry completed a total of 49.39 billion packages in the first half of 2021, representing a year-on-year growth of 45.8%[34]. - The total revenue of the express delivery industry reached 484.21 billion yuan in the first half of 2021, with a year-on-year increase of 26.6%[34]. - The CR8 index for the express delivery industry was 80.8, indicating a high level of market concentration among major express service providers[34]. - The express service quality index improved to 697 in June 2021, reflecting a year-on-year increase of 4.5%[34]. Risk Management - The company has not faced any significant risks that could affect the authenticity and completeness of the disclosed semi-annual report[3]. - The company faces market risks due to macroeconomic fluctuations, which could adversely affect the express delivery industry and the company's performance[82]. - The company is exposed to competition risks as the industry becomes increasingly concentrated among leading firms, necessitating differentiation through service quality and cost control[82]. - The company has established a safety management system to mitigate risks associated with the security of parcel delivery, which is critical for service quality[85]. Corporate Governance and Social Responsibility - The company has not proposed any profit distribution plan or capital reserve transfer to increase share capital for the reporting period[2]. - The company has established a 100 million yuan "Dream Fund" to support employment and entrepreneurship for disabled individuals, veterans, and impoverished groups over the next 2-3 years[101]. - The company has actively participated in disaster relief efforts, donating over 350,000 yuan to earthquake-affected areas in Yunnan and Qinghai[101]. - The company is committed to ecological protection and green development, aligning with national policies on environmental responsibility[97]. Future Outlook - The company provided a positive outlook for the second half of 2021, projecting a revenue growth of 25% driven by new product launches and market expansion strategies[182]. - The company plans to expand its market presence and invest in new product development to drive future growth[160]. - The company is focusing on strategic acquisitions to enhance its competitive position in the market[160].

Financial Performance - The company achieved a consolidated net profit attributable to shareholders of RMB 1,766,752,164.57 for the year 2020, with the parent company net profit at RMB 404,965,608.77[4] - The company's operating revenue for 2020 was CNY 3,490.70 million, representing a year-on-year increase of 12.06% compared to CNY 3,115.11 million in 2019[28] - The net profit attributable to shareholders for 2020 was CNY 176.68 million, a 5.94% increase from CNY 166.77 million in 2019[28] - The company's total assets grew by 19.26% to CNY 2,642.92 million at the end of 2020, up from CNY 2,216.10 million at the end of 2019[28] - The company's revenue for 2020 was CNY 34.907 billion, representing a 12.06% increase compared to 2019, while the net profit attributable to shareholders was CNY 1.767 billion, a growth of 5.94%[104] - The operating cost increased by 15.84% to RMB 3,175.25 million from RMB 2,741.13 million in the previous year[151] - The gross margin for the express delivery sector was 6.97%, a decrease of 5.08 percentage points year-on-year, primarily due to price adjustments in response to market competition[159] Dividends and Distributable Profits - The proposed cash dividend for 2020 is RMB 1.5 per 10 shares (tax included), with no capital reserve fund conversion to share capital or bonus shares planned for this year[4] - As of December 31, 2020, the parent company's distributable profits amounted to RMB 518,433,994.82 after accounting for previous year dividends and reserve allocations[4] Risk Management and Compliance - The company has not reported any non-operational fund occupation by controlling shareholders or related parties[6] - There are no violations of decision-making procedures regarding external guarantees reported[6] - The company emphasizes the importance of risk awareness regarding future plans and development strategies, advising investors to be cautious[5] - The company has established a comprehensive risk management framework to address potential future challenges[6] Audit and Governance - The company has maintained a standard unqualified audit opinion from its accounting firm, indicating the reliability of its financial statements[3] - The company has not disclosed any significant changes in its board or supervisory committee that would affect the integrity of the annual report[6] Market Expansion and Strategy - The company plans to continue expanding its market presence and enhancing service quality through strategic initiatives[5] - The company expanded its international business network, covering over 150 countries and regions across six continents[47] - The company aims to enhance its service network by strategically placing new transfer centers in high-growth areas to improve processing capabilities[57] Franchise and Delivery Network - The number of franchisees reached 4,650, with a total of 38,375 end-point outlets across the country by the end of 2020[47] - The company has established a comprehensive training system for franchisees, including pre-business training and ongoing assessments to ensure service quality and operational standards[67][69] - The franchise network is designed to cover last-mile delivery effectively, with a focus on community engagement and partnerships with local businesses to enhance service capabilities[63] - The company continuously monitors franchisee performance through a digital platform, assessing key metrics such as complaint rates and delivery efficiency[70] - The company is expanding its terminal store network to improve last-mile delivery and enhance customer service, integrating various delivery methods such as smart lockers and third-party stations[63] Operational Efficiency and Technology - The company employs a hub-and-spoke model for its express delivery services, optimizing routes based on package volume and processing capabilities to enhance efficiency and reduce costs[57] - The company has increased its investment in the automation of transfer centers to enhance package processing capabilities and expand service coverage[86] - The company’s digital management tools improved the precision of equipment and personnel management at transfer centers, leading to enhanced operational efficiency[132] - The company utilized advanced technologies such as big data and cloud computing to drive innovation and management transformation[108] Customer Service and Satisfaction - The company achieved a 19% reduction in customer complaint rates compared to the previous year, indicating improved service quality[113] - The company’s customer service capabilities were significantly improved through the integration of intelligent voice robots and cloud call centers, increasing call connection rates[117] - The company focused on enhancing customer experience by providing personalized services and proactive problem-solving through digital tools[113] Industry Overview - In 2020, the express delivery industry in China completed a total business volume of 83.36 billion pieces, representing a year-on-year growth of 31.2%[76] - The total business revenue for the express delivery industry reached 879.54 billion yuan in 2020, with a year-on-year increase of 17.3%[76] - The market share of the top five express delivery companies increased to approximately 73% in 2020, up by about 5 percentage points from the previous year, indicating a rise in industry concentration[77] Environmental and Social Responsibility - The industry has made strides in green development, with new standards and policies promoting sustainable practices in packaging and logistics[82] - The company implemented green management practices, including standardized recycling measures and the use of eco-friendly packaging materials, to reduce carbon emissions[145] Financial Position and Investments - The company reported a significant increase in financing activities, with net cash flow from financing activities rising by 280.89% to RMB 100.74 million from a negative RMB 55.69 million in the previous year[151] - The company’s fixed assets increased by 34.19% to 968,642.44 million RMB, attributed to investments in transfer centers and transportation tools[183] - The total external equity investment increased by 26.36% to RMB 301,860.22 million from RMB 238,887.26 million[197]

[Item I. Important Notice](index=3&type=section&id=Item%20I.%20Important%20Notice) The company's management assures the authenticity and completeness of this unaudited quarterly report, assuming legal responsibility [1.1 Assurance of Report Authenticity and Completeness](index=3&type=section&id=1.1%20Assurance%20of%20Report%20Authenticity%20and%20Completeness) The company's management assures the authenticity and completeness of this unaudited quarterly report, assuming legal responsibility - Management guarantees the report's authenticity, accuracy, and completeness, assuming legal responsibility[5](index=5&type=chunk) - The company's Q1 2021 report is unaudited[5](index=5&type=chunk) [Item II. Company Profile](index=3&type=section&id=Item%20II.%20Company%20Profile) This section provides an overview of the company's key financial performance and shareholder structure for the reporting period [2.1 Key Financial Data](index=3&type=section&id=2.1%20Key%20Financial%20Data) In Q1 2021, the company achieved strong revenue and net profit growth, with significant improvement in operating cash flow despite remaining negative Key Financial Data for Q1 2021 | Indicator | Current Period | Prior Year Period | Year-over-Year Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB 10,000) | 896,038.87 | 553,423.83 | 61.91% | | Net Profit Attributable to Shareholders (RMB 10,000) | 37,051.83 | 27,107.30 | 36.69% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (RMB 10,000) | 33,923.56 | 23,426.61 | 44.81% | | Basic Earnings Per Share (RMB/share) | 0.1173 | 0.0950 | 23.47% | | Net Cash Flow from Operating Activities (RMB 10,000) | -37,480.55 | -72,273.39 | 48.14% | - Total non-recurring gains and losses for the period amounted to **RMB 31.28 million**, primarily from government grants, fair value changes in financial assets, and reversal of impairment provisions for receivables[7](index=7&type=chunk)[8](index=8&type=chunk) [2.2 Shareholder Ownership](index=4&type=section&id=2.2%20Shareholder%20Ownership) As of the reporting period end, the company had 89,531 shareholders, with the top three major shareholders and their related party relationships disclosed - As of the end of the reporting period, the company had **89,531 shareholders**[9](index=9&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Number of Shares | Percentage (%) | | :--- | :--- | :--- | | Shanghai YTO Jiaolong Investment Development (Group) Co., Ltd. | 1,082,712,613 | 34.26% | | Alibaba (China) Network Technology Co., Ltd. | 379,179,681 | 12.00% | | Hangzhou Ali Venture Capital Co., Ltd. | 312,996,335 | 9.91% | | Shanghai Yunfeng Xinchuang Equity Investment Center (Limited Partnership) | 114,580,591 | 3.63% | | Yu Huijiao | 100,673,929 | 3.19% | - Controlling shareholder Shanghai YTO Jiaolong Investment has a concerted action relationship with Yu Huijiao and Zhang Xiaojuan; Alibaba (China) Network Technology Co., Ltd. and Hangzhou Ali Venture Capital Co., Ltd. are related legal entities[11](index=11&type=chunk) [Item III. Significant Events](index=5&type=section&id=Item%20III.%20Significant%20Events) This section analyzes major changes in key financial statement items and indicators, including revenue, costs, assets, liabilities, and cash flows [3.1 Analysis of Significant Changes in Key Financial Statement Items and Indicators](index=5&type=section&id=3.1%20Analysis%20of%20Significant%20Changes%20in%20Key%20Financial%20Statement%20Items%20and%20Indicators) Significant changes in financial items reflect increased business volume, new lease standard adoption impacting assets and liabilities, and strategic investments in transit centers Changes in Key Financial Items and Reasons | Item Name | Change (%) | Reason for Change | | :--- | :--- | :--- | | **Income Statement Items** | | | | Operating Revenue | 61.91% | Primarily due to increased business volume in the current period | | Operating Cost | 65.91% | Primarily due to increased business volume in the current period | | **Balance Sheet Items** | | | | Right-of-Use Assets | 100.00% | Primarily due to the adoption of new lease standards in the current period | | Short-term Borrowings | 50.40% | Primarily due to increased working capital borrowings in the current period | | Non-current Liabilities Due Within One Year | 392,336.36% | Primarily due to the adoption of new lease standards in the current period | | Lease Liabilities | 100.00% | Primarily due to the adoption of new lease standards in the current period | | **Cash Flow Statement Items** | | | | Cash Paid for Acquisition of Fixed Assets, Intangible Assets, etc. | 75.39% | Primarily due to increased investment in transit centers in the current period | [Item IV. Appendix](index=8&type=section&id=Item%20IV.%20Appendix) This section contains the company's unaudited consolidated and parent company financial statements for the first quarter of 2021, along with details on new lease standard adjustments [4.1 Financial Statements](index=8&type=section&id=4.1%20Financial%20Statements) This section presents the company's unaudited consolidated and parent company financial statements for Q1 2021, including balance sheets, income statements, and cash flow statements [4.1.1 Consolidated Balance Sheet](index=8&type=section&id=4.1.1%20Consolidated%20Balance%20Sheet) As of March 31, 2021, the company's total assets and net assets attributable to shareholders showed modest growth, with total liabilities also presented Key Items from Consolidated Balance Sheet (March 31, 2021) | Item | Amount (RMB) | | :--- | :--- | | Total Assets | 27,200,802,525.80 | | Total Liabilities | 9,283,722,428.96 | | Total Owners' Equity Attributable to Parent Company | 17,508,384,588.53 | [4.1.2 Parent Company Balance Sheet](index=11&type=section&id=4.1.2%20Parent%20Company%20Balance%20Sheet) As of March 31, 2021, the parent company's assets were primarily long-term equity investments, with a robust asset-liability structure Key Items from Parent Company Balance Sheet (March 31, 2021) | Item | Amount (RMB) | | :--- | :--- | | Total Assets | 24,804,960,655.18 | | Long-term Equity Investments | 21,778,981,067.90 | | Total Liabilities | 21,334,572.52 | | Total Owners' Equity | 24,783,626,082.66 | [4.1.3 Consolidated Income Statement](index=14&type=section&id=4.1.3%20Consolidated%20Income%20Statement) In Q1 2021, the company reported substantial year-over-year growth in total operating revenue and net profit attributable to parent company shareholders Key Items from Consolidated Income Statement (Q1 2021) | Item | Amount (RMB) | Year-over-Year Change | | :--- | :--- | :--- | | Total Operating Revenue | 8,960,388,673.50 | 61.91% Growth | | Total Operating Cost | 8,524,131,756.37 | 62.31% Growth | | Net Profit Attributable to Parent Company Shareholders | 370,518,310.95 | 36.69% Growth | | Basic Earnings Per Share (RMB/share) | 0.1173 | 23.47% Growth | [4.1.4 Parent Company Income Statement](index=17&type=section&id=4.1.4%20Parent%20Company%20Income%20Statement) In Q1 2021, the parent company achieved a net profit, turning around from a prior-year loss, with revenue primarily from intercompany service fees Key Items from Parent Company Income Statement (Q1 2021) | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | | :--- | :--- | :--- | | Operating Revenue | 6,785,520.92 | 5,050,875.93 | | Operating Profit | 4,854,771.68 | -17,307,765.88 | | Net Profit | 3,636,299.29 | -11,767,499.30 | [4.1.5 Consolidated Cash Flow Statement](index=19&type=section&id=4.1.5%20Consolidated%20Cash%20Flow%20Statement) In Q1 2021, operating cash flow improved significantly, while investing activities saw increased outflows for fixed asset acquisition, and financing activities generated substantial inflows Consolidated Cash Flow Statement Summary (Q1 2021) | Item | Amount (RMB) | | :--- | :--- | | Net Cash Flow from Operating Activities | -374,805,462.42 | | Net Cash Flow from Investing Activities | -949,816,041.19 | | Net Cash Flow from Financing Activities | 868,977,598.57 | | Net Increase in Cash and Cash Equivalents | -453,569,988.25 | [4.1.6 Parent Company Cash Flow Statement](index=21&type=section&id=4.1.6%20Parent%20Company%20Cash%20Flow%20Statement) In Q1 2021, the parent company experienced net cash outflow from operating activities, net inflow from investing activities, and a period-end cash balance Parent Company Cash Flow Statement Summary (Q1 2021) | Item | Amount (RMB) | | :--- | :--- | | Net Cash Flow from Operating Activities | -244,329,060.52 | | Net Cash Flow from Investing Activities | 27,091,917.71 | | Net Cash Flow from Financing Activities | -152,613.82 | | Net Increase in Cash and Cash Equivalents | -217,389,756.63 | [4.2 Impact and Adjustments of New Lease Standards](index=23&type=section&id=4.2%20Impact%20and%20Adjustments%20of%20New%20Lease%20Standards) The company's initial adoption of new lease standards on January 1, 2021, resulted in the recognition of right-of-use assets and lease liabilities, with no impact on owners' equity Impact of Initial Adoption of New Lease Standards on January 1, 2021 Financial Statements | Adjustment Item | Adjustment Amount (RMB) | | :--- | :--- | | Right-of-Use Assets | +797,289,097.17 | | Prepayments | -41,313,119.50 | | Non-current Liabilities Due Within One Year | +205,445,380.50 | | Lease Liabilities | +550,530,597.17 |

[Important Notice](index=3&type=section&id=Important%20Notice) This section confirms the report's authenticity and clarifies its unaudited status [Report Authenticity and Audit Status](index=3&type=section&id=Report%20Authenticity%20and%20Audit%20Status) The company's management guarantees the authenticity, accuracy, and completeness of this quarterly report, explicitly stating it has not been audited - The company's board of directors, supervisory board, and all directors, supervisors, and senior management guarantee the report's content is true, accurate, and complete, free from false records, misleading statements, or major omissions[5](index=5&type=chunk) - This company's Q3 2020 report is unaudited[5](index=5&type=chunk) [Company Basic Information](index=3&type=section&id=Company%20Basic%20Information) This section provides an overview of the company's key financial performance and shareholder structure as of the reporting period [Key Financial Data](index=3&type=section&id=Key%20Financial%20Data) As of September 30, 2020, the company's total assets increased by **12.10%** year-over-year, and net assets attributable to parent company increased by **29.00%**. Revenue for the first three quarters was **23.42 billion yuan**, up **8.34%** year-over-year; net profit attributable to parent company was **1.39 billion yuan**, a slight increase of **0.69%**. Net profit after non-recurring items decreased by **9.70%** year-over-year, with basic earnings per share at **0.4526 yuan** Key Financial Data for the First Three Quarters of 2020 | Indicator | Year-to-Date (Jan-Sep) | Prior Year-to-Date (Jan-Sep) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (Billion Yuan) | 23.42 | 21.62 | 8.34 | | Net Profit Attributable to Parent Company Shareholders (Billion Yuan) | 1.39 | 1.38 | 0.69 | | Net Profit Attributable to Parent Company Shareholders (Excluding Non-Recurring Items) (Billion Yuan) | 1.21 | 1.34 | -9.70 | | Net Cash Flow from Operating Activities (Billion Yuan) | 1.81 | 1.98 | -8.74 | | Basic Earnings Per Share (Yuan/Share) | 0.4526 | 0.4878 | -7.22 | Key Balance Sheet Data as of September 30, 2020 | Indicator | As of Report Period End (Billion Yuan) | As of Prior Year End (Billion Yuan) | Change from Prior Year End (%) | | :--- | :--- | :--- | :--- | | Total Assets | 24.84 | 22.16 | 12.10 | | Net Assets Attributable to Parent Company Shareholders | 16.63 | 12.89 | 29.00 | - In the first three quarters of 2020, the company's total non-recurring gains and losses were approximately **175 million yuan**, primarily from government subsidies (**131 million yuan**) and gains related to transactional financial assets (**81 million yuan**)[7](index=7&type=chunk)[9](index=9&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) As of the reporting period end, the company had **93,322 shareholders**. The top three shareholders were Shanghai YTO Jiaolong Investment Development (Group) Co., Ltd. (holding **35.04%**), Alibaba (China) Network Technology Co., Ltd. (holding **12.00%**), and Hangzhou Ali Venture Capital Co., Ltd. (holding **9.91%**) - As of the reporting period end, the company had a total of **93,322 shareholders**[10](index=10&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Number of Shares Held (Shares) | Holding Percentage (%) | | :--- | :--- | :--- | | Shanghai YTO Jiaolong Investment Development (Group) Co., Ltd. | 1,107,063,517 | 35.04 | | Alibaba (China) Network Technology Co., Ltd. | 379,179,681 | 12.00 | | Hangzhou Ali Venture Capital Co., Ltd. | 312,996,335 | 9.91 | | Shanghai Yunfeng Xinchuang Equity Investment Center (Limited Partnership) | 105,291,791 | 3.33 | | Yu Huijiao | 100,673,929 | 3.19 | - The company's largest shareholder, Jiaolong Group, has a concerted action relationship with shareholders Yu Huijiao and Zhang Xiaojuan[11](index=11&type=chunk) [Significant Events](index=5&type=section&id=Significant%20Events) This section details and analyzes significant changes in the company's key financial statement items and indicators during the reporting period [Analysis of Significant Changes in Key Financial Statement Items and Indicators](index=5&type=section&id=Analysis%20of%20Significant%20Changes%20in%20Key%20Financial%20Statement%20Items%20and%20Indicators) During the reporting period, several financial statement items experienced significant changes. On the asset side, construction in progress and development expenditures substantially increased due to intensified transit center construction and R&D investment. On the liability side, short-term borrowings surged, while bonds payable were cleared due to conversion and redemption. On the income statement, finance expenses significantly decreased due to reduced convertible bond interest, and other income notably grew from increased government subsidies Key Balance Sheet Changes and Reasons | Item Name | Change (%) | Reason for Change | | :--- | :--- | :--- | | Construction in Progress | 86.92 | Primarily due to increased investment in transit center construction | | Development Expenditures | 1,536.75 | Primarily due to increased investment in R&D projects | | Short-term Borrowings | 3,641.76 | Primarily due to increased working capital borrowings in the current period | | Bonds Payable | -100.00 | Primarily due to conversion and redemption of convertible corporate bonds | | Paid-in Capital (or Share Capital) | 80.36 | Primarily due to convertible bond conversion | | Capital Reserves | 50.95 | Primarily due to convertible bond conversion | Key Income Statement Changes and Reasons | Item Name | Change (%) | Reason for Change | | :--- | :--- | :--- | | Finance Expenses | -144.48 | Primarily due to reduced interest expenses from convertible bond conversion and redemption in the current period | | Other Income | 172.06 | Primarily due to increased airline subsidies and financial support received in the current period | | Gains from Changes in Fair Value | 183,417.54 | Primarily due to changes in the fair value of wealth management products | Key Cash Flow Statement Changes and Reasons | Item Name | Change (%) | Reason for Change | | :--- | :--- | :--- | | Cash Received from Borrowings | 781.43 | Primarily due to new working capital borrowings in the current period | | Cash Paid for Debt Repayment | 420.66 | Primarily due to increased repayment of borrowings in the current period | [Appendix](index=9&type=section&id=Appendix) This section provides the company's unaudited financial statements for the third quarter of 2020 and details on the adoption of new accounting standards [Financial Statements](index=9&type=section&id=Financial%20Statements) This appendix includes the company's unaudited Q3 2020 consolidated and parent company balance sheets, income statements, and cash flow statements, along with explanations for retrospective adjustments upon initial adoption of new revenue standards [Consolidated Balance Sheet](index=9&type=section&id=Consolidated%20Balance%20Sheet) As of September 30, 2020, the company's total assets reached **24.84 billion yuan**, a **12.1%** increase from the prior year-end. Total liabilities were **7.83 billion yuan**, a decrease from the prior year-end. Equity attributable to parent company owners was **16.63 billion yuan**, up **29.0%** from the prior year-end, primarily due to increased capital reserves and share capital from convertible bond conversion Key Consolidated Balance Sheet Items (September 30, 2020) | Item | Amount (Billion Yuan) | | :--- | :--- | | Total Assets | 24.84 | | Total Liabilities | 7.83 | | Total Equity Attributable to Parent Company Owners | 16.63 | | Total Equity | 17.01 | [Consolidated Income Statement](index=15&type=section&id=Consolidated%20Income%20Statement) In the first three quarters of 2020, the company achieved total operating revenue of **23.42 billion yuan**, an **8.34%** year-over-year increase. Total operating costs were **21.95 billion yuan**, up **9.95%** year-over-year. Net profit attributable to parent company shareholders was **1.39 billion yuan**, a slight **0.69%** year-over-year increase. Basic earnings per share were **0.4526 yuan** Key Consolidated Income Statement Items (First Three Quarters of 2020) | Item | First Three Quarters of 2020 (Billion Yuan) | First Three Quarters of 2019 (Billion Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 23.42 | 21.62 | | Total Operating Costs | 21.95 | 19.96 | | Net Profit Attributable to Parent Company Shareholders | 1.39 | 1.38 | | Basic Earnings Per Share (Yuan/Share) | 0.4526 | 0.4878 | [Consolidated Cash Flow Statement](index=20&type=section&id=Consolidated%20Cash%20Flow%20Statement) In the first three quarters of 2020, net cash flow from operating activities was **1.81 billion yuan**, a **8.7%** year-over-year decrease. Net cash outflow from investing activities was **2.72 billion yuan**, with the outflow expanding year-over-year, primarily due to increased cash paid for the acquisition of fixed and intangible assets. Net cash inflow from financing activities was **1.28 billion yuan**, mainly driven by a significant increase in new borrowings Key Consolidated Cash Flow Statement Items (First Three Quarters of 2020) | Item | Amount (Billion Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 1.81 | | Net Cash Flow from Investing Activities | -2.72 | | Net Cash Flow from Financing Activities | 1.28 | | Net Increase in Cash and Cash Equivalents | 0.36 | [Explanation of Adjustments for Initial Adoption of New Revenue Standards](index=24&type=section&id=Explanation%20of%20Adjustments%20for%20Initial%20Adoption%20of%20New%20Revenue%20Standards) Effective January 1, 2020, the company adopted new revenue standards. In accordance with transitional provisions, relevant items in the opening financial statements were adjusted. Key impacts include: a reduction of approximately **40.19 million yuan** in opening 'Accounts Receivable' with a corresponding increase in 'Contract Assets'; a reduction of approximately **528 million yuan** in opening 'Advances from Customers' with corresponding increases of approximately **498 million yuan** in 'Contract Liabilities' and **30 million yuan** in 'Taxes Payable' Impact of Initial Adoption of New Revenue Standards on January 1, 2020 Financial Statements | Statement Item | Amount Before Adjustment (Million Yuan) | Amount After Adjustment (Million Yuan) | Adjustment Amount (Million Yuan) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 1,195.79 | 1,155.60 | -40.19 | | Contract Assets | 0.00 | 40.19 | 40.19 | | Advances from Customers | 1,180.91 | 653.33 | -527.59 | | Contract Liabilities | 0.00 | 497.72 | 497.72 | | Taxes Payable | 210.59 | 240.45 | 29.86 |

Financial Performance - The company's operating revenue for the first half of 2020 was CNY 1,458,100.31 million, representing a 4.50% increase compared to CNY 1,395,304.57 million in the same period last year[16]. - The net profit attributable to shareholders of the listed company was CNY 97,090.10 million, an increase of 12.55% from CNY 86,264.59 million year-on-year[16]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 89,698.26 million, up 8.15% from CNY 82,939.17 million in the previous year[16]. - The net cash flow from operating activities was CNY 122,968.00 million, reflecting a 12.13% increase from CNY 109,668.66 million in the same period last year[16]. - The total assets at the end of the reporting period were CNY 2,429,623.48 million, a 9.64% increase from CNY 2,216,097.25 million at the end of the previous year[16]. - The net assets attributable to shareholders of the listed company increased by 26.93% to CNY 1,636,587.25 million from CNY 1,289,366.38 million at the end of the previous year[16]. - Basic earnings per share for the first half of 2020 were CNY 0.3229, a 5.70% increase from CNY 0.3055 in the same period last year[17]. - The diluted earnings per share were CNY 0.3126, reflecting a 7.72% increase from CNY 0.2902 year-on-year[17]. - The weighted average return on net assets was 6.53%, a decrease of 0.73 percentage points compared to 7.26% in the previous year[17]. Operational Efficiency - The company reported a non-operating loss from the disposal of non-current assets amounting to -2,814,967.61 RMB[18]. - Government subsidies recognized in the current period, closely related to normal business operations, totaled 44,034,422.45 RMB[18]. - The fair value changes and investment income from trading financial assets and derivatives amounted to 46,909,295.04 RMB[18]. - The company has a total of 4,395 franchisees and 33,088 end-point networks across 31 provinces, with a county-level coverage rate of 97.33%[20]. - The company operates 73 self-owned hub transfer centers and 5 self-owned city distribution centers nationwide[20]. - The company has over 5,000 trunk transport vehicles, including 2,002 owned vehicles and a fleet of 12 aircraft[20]. - The company aims to enhance its international express service capabilities and optimize cross-border logistics products and service chains[20]. - The company has implemented a flat franchise model, allowing for strong network control and stability[28]. - The company has developed a comprehensive terminal delivery network, including smart lockers and third-party stations, to improve last-mile delivery efficiency[30]. - The company has established a series of management standards for franchisees to ensure service quality and operational efficiency[31]. Industry Overview - In the first half of 2020, the express delivery industry in China completed a total of 33.88 billion packages, representing a year-on-year growth of 22.1%[39]. - The total revenue of the express delivery industry reached 382.38 billion yuan, with a year-on-year increase of 12.6%[39]. - In Q2 2020, the express delivery industry completed 21.35 billion packages, showing a significant year-on-year growth of 36.75%[39]. - The express delivery industry’s revenue in Q2 2020 was 228.98 billion yuan, reflecting a year-on-year growth of 23.52%[39]. - The CR8 index for the express delivery industry increased to 84.1, up by 1.6 percentage points from the end of 2019, indicating a rise in market concentration[39]. - The express service quality index improved to 666.72 in June 2020, a year-on-year increase of 124.3%, marking a shift towards high-quality development in the industry[39]. Customer Service and Experience - The company has established a comprehensive training system for franchisees, including pre-business training and mandatory training for underperforming partners[33]. - The company utilizes an information platform to monitor franchisee performance in real-time, ensuring operational efficiency and service quality[34]. - The company has implemented an emergency response mechanism for franchisees facing operational challenges, ensuring business continuity[37]. - The company improved its end-to-end delivery efficiency through a comprehensive monitoring system, resulting in a steady enhancement of delivery timeliness[52]. - The company implemented a proactive customer service approach, leading to a noticeable decrease in customer complaint rates by the end of June 2020[53]. - The company enhanced customer experience by promoting a customer manager tool, achieving rapid penetration among e-commerce platform merchants by June 30, 2020[54]. Financial Management - Operating costs rose by 5.34% to CNY 1,288,511.66 million, primarily due to increased express delivery volumes[63]. - Sales expenses surged by 39.68% to CNY 4,920.10 million, driven by market expansion and shared customer service promotions[64]. - The company reduced its R&D expenses by 62.92% to CNY 1,362.14 million, mainly due to a decrease in capitalized R&D projects[65]. - The net cash flow from operating activities increased by 12.13% to CNY 122,968.00 million, attributed to lower employee compensation and corporate income tax payments[65]. - The company achieved a significant reduction in costs, with transportation costs per package down by 31.26% to 0.51 RMB, and center operation costs down by 15.02% to 0.33 RMB[72]. - The company reported a total operating cost of 1.288 billion RMB, with the largest cost component being delivery service expenses at 599.53 million RMB, which accounted for 46.53% of total costs[69]. Risk Management - The company faces market risks due to macroeconomic fluctuations, which could adversely affect the express delivery industry and the company's performance[86]. - The company is at risk of market competition as industry concentration increases, necessitating differentiation through service quality and cost control[87]. - The company is exposed to customer demand changes, requiring timely adjustments to business strategies and service offerings to avoid customer attrition[88]. - Fluctuations in fuel prices pose a risk to the company's profit levels, with potential increases in transportation costs if prices rise[89]. - The company's main revenue source is concentrated in e-commerce, which could impact growth if the sector slows down[91]. - The company is experiencing a decline in gross profit margins due to rising labor costs and competitive pricing pressures[92]. - The company has established a safety management system to mitigate risks associated with the security of parcel delivery[97]. - The company faces management risks due to rapid business growth, which complicates personnel and subsidiary management[98]. Corporate Governance - The company did not distribute profits or increase capital reserves in the first half of 2020, with no dividends or stock bonuses declared[102]. - The company appointed Lixin Certified Public Accountants as the financial audit and internal control audit institution for the year 2020[106]. - There were no significant lawsuits or arbitration matters during the reporting period[108]. - The integrity status of the company and its controlling shareholders remained good, with no unfulfilled court judgments or significant debts due[109]. - The company completed the repurchase and cancellation of part of the unvested restricted stock in January 2020[110]. - The company approved the first phase of the stock option incentive plan on April 28, 2020, with independent directors providing prior consent[111]. Capital Structure and Financing - The company has issued 36.50 billion RMB of convertible bonds, with a total of 3,650 million bonds issued[128]. - The total amount converted from convertible bonds during the reporting period was 3.45 billion RMB, with 321,885,110 shares converted[132]. - The cumulative number of shares converted from convertible bonds accounted for 11.74% of the total shares issued before conversion[132]. - The company has engaged in various poverty alleviation initiatives, with a total investment of 62.72 million RMB in industrial development poverty alleviation projects[125]. - The company plans to continue its poverty alleviation efforts by promoting rural employment and enhancing the sales of local specialty products through e-commerce[127]. Accounting and Reporting - The company reported a consolidated financial statement based on the continuous operation principle, adhering to the accounting standards set by the Ministry of Finance[184]. - There are no significant doubts regarding the company's ability to continue as a going concern for the next 12 months from the reporting date[185]. - The company's accounting period runs from January 1 to December 31 each year[186]. - The company's accounting currency is Renminbi (RMB)[187]. - The company includes all subsidiaries under its control in the consolidated financial statements[188]. - The financial statements reflect the company's financial position, operating results, changes in shareholders' equity, and cash flows accurately and completely[186].

Financial Performance - In 2019, YTO Express achieved a consolidated net profit of RMB 1,680,785,199.36, while the parent company reported a net profit of RMB 451,656,918.52[6]. - The company's operating revenue for 2019 was CNY 3,115,112.10 million, an increase of 13.42% compared to CNY 2,746,514.45 million in 2018[25]. - The net profit attributable to shareholders for 2019 was CNY 166,770.28 million, a decrease of 12.41% from CNY 190,398.29 million in 2018[25]. - The net cash flow from operating activities increased by 62.62% to CNY 379,878.42 million in 2019 from CNY 233,600.85 million in 2018[28]. - The total assets at the end of 2019 were CNY 2,216,097.25 million, reflecting a 10.98% increase from CNY 1,996,853.50 million at the end of 2018[28]. - The basic earnings per share for 2019 was CNY 0.5897, down 12.59% from CNY 0.6746 in 2018[29]. - The weighted average return on equity decreased by 5.15 percentage points to 13.74% in 2019 from 18.89% in 2018[29]. - The company recognized goodwill impairment losses of CNY 34,201.49 million in 2019, impacting the net profit attributable to shareholders[28]. - The company's operating revenue for 2019 was 31.151 billion yuan, representing a growth of 13.42% compared to 2018, while the net profit attributable to shareholders was 1.668 billion yuan[79]. - Excluding the impact of goodwill impairment, the net profit attributable to shareholders for 2019 was 2.010 billion yuan, an increase of 5.55% from 2018[79]. Dividend and Profit Distribution - The company plans to distribute a cash dividend of RMB 1.5 per 10 shares to all shareholders for the 2019 fiscal year, totaling RMB 627,314,647.51 available for distribution[6]. - As of December 31, 2019, the parent company's undistributed profits amounted to RMB 644,904,035.65 after accounting for cash dividends and surplus reserves[6]. Operational Efficiency and Development - YTO Express is focused on enhancing its operational capabilities through the establishment of shared operation centers to support franchisees and end-point networks[15]. - The company is committed to maintaining transparency and accuracy in its financial reporting, as stated by its management team[5]. - The company has established a comprehensive training system for franchisees, focusing on operational standards and business processes[56]. - The company utilizes an information platform to monitor franchisee performance in real-time, ensuring service quality and operational efficiency[59]. - The company is enhancing its terminal service capabilities by integrating various delivery methods, including smart lockers and third-party stations, to improve last-mile delivery[53]. - The company has implemented a series of management standards for franchisees, including monitoring delivery timeliness and network operation anomalies[55]. - The company is continuously optimizing its routing design to reduce transfer costs and improve delivery efficiency[49]. - The company has established a comprehensive express service network with self-operated hub transfer centers and a flat franchise network, enhancing overall control and flexibility[70]. - The company has invested heavily in automation upgrades for hub transfer centers, increasing package processing capacity and expanding service coverage[70]. - The company has developed an advanced information technology platform, including a proprietary express service operation system, enhancing operational efficiency and service quality[74]. Market and Industry Trends - In 2019, the express delivery industry in China completed a total business volume of 63.52 billion pieces, representing a year-on-year growth of 25.3%[63]. - The total business revenue of the express delivery industry reached 749.78 billion yuan in 2019, with a year-on-year increase of 24.2%[63]. - The CR8 index for the express delivery industry increased to 82.5 in 2019, up by 1.3 percentage points from 2018, indicating a steady rise in brand concentration[64]. - The express delivery industry added over 200,000 jobs in 2019, supporting online retail sales exceeding 8 trillion yuan[63]. - The industry achieved a service satisfaction rate of 98.5% in 2019, reflecting improvements in service quality and customer experience[65]. - By the end of 2019, the usage rate of electronic waybills in the industry reached 98%, with 52% of e-commerce parcels no longer requiring secondary packaging[67]. - The industry saw a 75% usage rate of recyclable transit bags and a 75% adoption rate of "slim tape" packaging[67]. - Major express service companies have increased their investment in technology, applying big data, cloud computing, and automation to enhance operational efficiency[66]. - The express delivery sector has made significant strides in green development, with 31,000 new energy and clean energy vehicles added in 2019[67]. - The industry is focusing on improving service quality and operational efficiency through digital transformation and innovative service models[66]. Customer Service and Satisfaction - The average effective complaint rate for 2019 was 0.19 per million, a decrease of 92.89% from 2018[80]. - The company implemented a service quality strategy, establishing a robust organizational support system and enhancing performance evaluation metrics[82]. - Advanced information tools were developed to facilitate scientific management of service quality, improving operational efficiency and customer satisfaction[84]. - The company achieved a nearly 10% reduction in overall delivery time through refined management and optimization of logistics processes[87]. - The national customer service hotline has achieved near-complete coverage with intelligent voice robots, significantly increasing call response rates[88]. - The company has established a diversified terminal service system, enhancing delivery frequency and improving delivery efficiency[87]. - The comprehensive evaluation index, known as the "Cai Niao Index," has shown continuous improvement, reflecting enhanced customer experience[86]. - The company established 54 shared customer service centers across 21 provinces, significantly improving customer complaint handling efficiency and stability by the end of 2019[89]. - The company achieved a 13.43% year-on-year reduction in single ticket transportation costs, bringing the cost down to 0.69 yuan by the end of 2019[95]. - The company improved its per capita efficiency by over 15%, with single ticket center operating costs decreasing by 17.12% to 0.36 yuan[96]. Strategic Initiatives and Future Plans - The company plans to enhance its comprehensive service capabilities through diversification, cooperation, alliances, acquisitions, and cross-shareholding strategies[152]. - The company aims to become a global leading integrated express logistics operator and supply chain integrator, focusing on high-quality and healthy development with an emphasis on green safety[162]. - The company plans to enhance service quality and customer experience by implementing a comprehensive management system and improving operational efficiency across the entire logistics chain[165]. - The company is adopting a "Express +" strategy to diversify its service offerings, including heavy cargo, cold chain, and urban distribution, to meet personalized customer needs[166]. - The company is deepening its international development strategy, leveraging its competitive advantages to expand its global network and enhance cross-border logistics services[169]. - The company will implement measures to upgrade service quality, including improving delivery efficiency and customer service responsiveness, to foster market expansion[172]. - The company aims to establish a comprehensive monitoring system for delivery efficiency across its network to reduce delays and enhance service quality[172]. - The company will promote a one-stop mobile office system for franchisees to improve customer service efficiency and response times[172]. - The company will incorporate various quality indices into performance assessments to ensure accountability and continuous improvement in service delivery[172]. - The company plans to increase the proportion of self-owned transportation vehicles to improve bargaining power and control over trunk transportation[173]. Risks and Challenges - The company faces risks from a slowing macroeconomic environment, which could negatively impact the express delivery industry and its performance[185]. - The company is at risk of declining market share if it fails to differentiate its services amid increasing industry competition[186]. - The company must adapt to changing customer demands for higher service quality to avoid customer attrition[187]. - Fluctuations in fuel prices pose a risk to the company's transportation cost control and overall profitability[188]. - The company’s revenue is heavily reliant on e-commerce users, making it vulnerable to slowdowns in that sector[190]. - The company is experiencing pressure on its gross margin due to rising labor costs and potential declines in express delivery prices[191]. - The company has established a safety management system to ensure operational safety and compliance with regulations[195]. - Future negative impacts on the brand due to poor management could adversely affect the company's business development[198].

Important Notice [Board, Supervisory Board, and Senior Management Statement](index=3&type=section&id=1.1%20Board%2C%20Supervisory%20Board%2C%20and%20Senior%20Management%20Statement) The company's Board of Directors, Supervisory Board, and all senior management affirm the truthfulness, accuracy, and completeness of this quarterly report, assuming corresponding legal responsibilities - The company's Board of Directors, Supervisory Board, and all senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report content, free from false records, misleading statements, or major omissions[4](index=4&type=chunk) [Board Attendance at Meetings](index=3&type=section&id=1.2%20Board%20Attendance%20at%20Meetings) All company directors attended the Board of Directors meeting to review this quarterly report - All company directors attended the Board of Directors meeting to review the quarterly report[4](index=4&type=chunk) [Financial Statement Responsibility Statement](index=3&type=section&id=1.3%20Financial%20Statement%20Responsibility%20Statement) Company head Yu Huijiao, chief accountant Lin Kai, and head of accounting Zhao Wenhui declare the financial statements are true, accurate, and complete - Company head Yu Huijiao, chief accountant Lin Kai, and head of accounting Zhao Wenhui guarantee the truthfulness, accuracy, and completeness of the financial statements[4](index=4&type=chunk) [Audit Status](index=3&type=section&id=1.4%20Audit%20Status) This quarterly report is unaudited - This company's first quarterly report is unaudited[4](index=4&type=chunk) Company Overview [Key Financial Data](index=3&type=section&id=2.1%20Key%20Financial%20Data) As of the end of Q1 2020, total assets slightly decreased, while net assets attributable to listed company shareholders significantly increased; operating revenue and net profit attributable to listed company shareholders both declined year-on-year, and net cash flow from operating activities turned negative, primarily due to the pandemic | Indicator | End of Current Period/Year-to-Date (Million CNY) | End of Prior Year/Prior Year-to-Date (Million CNY) | Change (%) | | :--- | :--- | :--- | :--- | | **Balance Sheet** | | | | | Total Assets | 21,902.70 | 22,160.97 | -1.17 | | Net Assets Attributable to Shareholders of Listed Company | 16,133.89 | 12,893.66 | 25.13 | | **Income Statement** | | | | | Operating Revenue | 5,534.24 | 6,444.45 | -14.12 | | Net Profit Attributable to Shareholders of Listed Company | 271.07 | 365.02 | -25.74 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 234.27 | 356.79 | -34.34 | | Weighted Average Return on Net Assets (%) | 2.08 | 3.12 | Decrease by 1.04 percentage points | | Basic Earnings Per Share (CNY/share) | 0.0950 | 0.1294 | -26.58 | | Diluted Earnings Per Share (CNY/share) | 0.0916 | 0.1242 | -26.25 | | **Cash Flow Statement** | | | | | Net Cash Flow from Operating Activities | -722.73 | 229.61 | -414.77 | | Non-Recurring Gains/Losses Items | Amount for Current Period (Million CNY) | | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | -4.52 | | Government Subsidies Included in Current Period P&L | 29.39 | | Gains/Losses from Fair Value Changes and Investment Income | 19.49 | | Reversal of Impairment Provisions for Receivables and Contract Assets | 0.11 | | Other Non-Operating Income and Expenses | -4.33 | | Impact on Minority Interests (After Tax) | 0.05 | | Income Tax Impact | -3.38 | | **Total** | **36.81** | [Shareholder Ownership](index=4&type=section&id=2.2%20Shareholder%20Ownership) As of the end of the reporting period, the company had 67,007 shareholders; among the top ten, Shanghai YTO Jiaolong Investment Development (Group) Co., Ltd. held the largest stake at 45.63%, with some shares pledged, and Hangzhou Ali Venture Capital Co., Ltd. was the second-largest shareholder with 9.89% - As of the end of the reporting period, the company had **67,007 shareholders**[9](index=9&type=chunk) | Shareholder Name | Shares Held at Period End (shares) | Proportion (%) | Pledged or Frozen Shares (shares) | | :--- | :--- | :--- | :--- | | Shanghai YTO Jiaolong Investment Development (Group) Co., Ltd. | 1,443,961,053 | 45.63 | 260,120,000 | | Hangzhou Ali Venture Capital Co., Ltd. | 312,996,335 | 9.89 | 0 | | Yu Huijiao | 133,450,083 | 4.22 | 0 | | Dayang Group Co., Ltd. | 132,400,000 | 4.18 | 51,000,000 | | Shanghai Yunfeng Xinchuang Equity Investment Center (Limited Partnership) | 123,499,991 | 3.90 | 94,000,000 | | Zhang Xiaojuan | 98,127,852 | 3.10 | 61,330,000 | | Shanghai Yuanxiang Investment Management Partnership (Limited Partnership) | 45,336,787 | 1.43 | 0 | | Shanghai Yuanxin Investment Management Partnership (Limited Partnership) | 45,336,787 | 1.43 | 0 | | Shanghai Yuanyue Investment Management Partnership (Limited Partnership) | 45,336,787 | 1.43 | 0 | | Shanghai Yuanke Investment Management Partnership (Limited Partnership) | 45,336,787 | 1.43 | 0 | - The company's largest shareholder, Jiaolong Group, has a concerted action relationship with Yu Huijiao and Zhang Xiaojuan[11](index=11&type=chunk) [Preferred Shareholder Status](index=5&type=section&id=2.3%20Preferred%20Shareholder%20Status) As of the end of the reporting period, the company had no preferred shareholders - The company has no preferred shareholders[11](index=11&type=chunk) Significant Matters [Major Changes in Key Financial Statement Items and Indicators](index=5&type=section&id=3.1%20Major%20Changes%20in%20Key%20Financial%20Statement%20Items%20and%20Indicators) This period saw significant changes across financial statements: the balance sheet reflected decreased financial assets and payables but increased borrowings and equity from redemptions and conversions; the income statement showed higher taxes, selling expenses, and other income, offset by lower financial and investment income; cash flow from operations turned negative due to the pandemic, while investing and financing cash flows significantly increased from reduced investments and new borrowings Significant Changes in Balance Sheet Items | Item Name | Current Period End (Million CNY) | Prior Period End (Million CNY) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 1,759.81 | 2,684.40 | -34.44 | Redemption of matured wealth management products | | Contract Assets | 25.30 | 0.00 | 100.00 | Implementation of new revenue recognition standards | | Development Expenditures | 13.03 | 2.57 | 407.87 | Increased R&D investment | | Short-Term Borrowings | 1,069.86 | 54.36 | 1,868.18 | New working capital borrowings | | Accounts Payable | 2,109.43 | 3,492.00 | -39.59 | Decrease in freight and project payables | | Advances from Customers | 603.19 | 1,180.91 | -48.92 | Implementation of new revenue recognition standards | | Contract Liabilities | 580.53 | 0.00 | 100.00 | Implementation of new revenue recognition standards | | Taxes Payable | 80.53 | 210.59 | -61.76 | Decrease in corporate income tax payable | | Bonds Payable | 0.00 | 3,017.15 | -100.00 | Conversion and redemption of convertible bonds | | Paid-in Capital (or Share Capital) | 715.89 | 394.37 | 81.53 | Convertible bond conversion | | Other Equity Instruments | 0.00 | 630.83 | -100.00 | Convertible bond conversion and redemption | | Capital Reserve | 9,384.32 | 6,116.44 | 53.43 | Convertible bond conversion | | Other Comprehensive Income | 26.35 | 18.50 | 42.43 | Impact of exchange rate fluctuations | Significant Changes in Income Statement Items | Item Name | Current Period (Million CNY) | Prior Year Same Period (Million CNY) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Taxes and Surcharges | 23.78 | 12.63 | 88.26 | Increase in property tax and land use tax | | Selling Expenses | 26.50 | 14.64 | 81.04 | Increased selling expenses for market expansion | | Financial Expenses | 1.53 | 22.95 | -93.32 | Decrease in interest expense due to convertible bond conversion and redemption, and changes in exchange gains/losses | | Other Income | 35.70 | 11.35 | 214.58 | Increase in airline subsidies and financial support funds | | Investment Income | 2.16 | 17.46 | -87.63 | Decrease in wealth management product income | | Gains from Fair Value Changes | 16.07 | 0.03 | 49,957.32 | Fair value changes of wealth management products | | Non-Operating Income | 2.10 | 13.83 | -84.81 | Decrease in tax refunds | | Income Tax Expense | 52.85 | 112.69 | -53.11 | Decrease in total profit | Significant Changes in Cash Flow Statement Items | Item Name | Current Period (Million CNY) | Prior Year Same Period (Million CNY) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -722.73 | 229.61 | -414.77 | Decrease in operating cash flow due to COVID-19 pandemic | | Net Cash Flow from Investing Activities | 348.01 | -594.66 | 158.52 | Decrease in purchases of wealth management products | | Net Cash Flow from Financing Activities | 923.40 | -114.59 | 905.83 | New working capital borrowings | [Progress of Significant Matters](index=7&type=section&id=3.2%20Progress%20of%20Significant%20Matters) There were no significant matters requiring disclosure of their progress during the reporting period - There is no analysis or explanation of the progress, impact, or solutions for significant matters during the reporting period[14](index=14&type=chunk) [Overdue Unfulfilled Commitments](index=7&type=section&id=3.3%20Overdue%20Unfulfilled%20Commitments) There were no overdue unfulfilled commitments during the reporting period - There were no overdue unfulfilled commitments during the reporting period[14](index=14&type=chunk) [Warning of Significant Changes in Cumulative Net Profit](index=7&type=section&id=3.4%20Warning%20of%20Significant%20Changes%20in%20Cumulative%20Net%20Profit) The company has not issued a warning regarding potential cumulative net profit loss or significant changes from the beginning of the year to the end of the next reporting period - The company has not predicted that cumulative net profit from the beginning of the year to the end of the next reporting period may be a loss or undergo significant changes compared to the same period last year[14](index=14&type=chunk) Appendix [Financial Statements](index=8&type=section&id=4.1%20Financial%20Statements) This section presents the company's unaudited financial statements for Q1 2020, including consolidated and parent company balance sheets, income statements, and cash flow statements, detailing financial position, operating results, and cash flow during the reporting period [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) As of March 31, 2020, the company's consolidated total assets were **21.903 billion CNY**, a slight decrease from the end of the previous year; total liabilities were **5.438 billion CNY**, a significant decrease; and total owners' equity was **16.465 billion CNY**, a notable increase - As of March 31, 2020, consolidated total assets amounted to **21.90 billion CNY**[19](index=19&type=chunk) - As of March 31, 2020, consolidated total liabilities amounted to **5.44 billion CNY**[20](index=20&type=chunk) - As of March 31, 2020, consolidated total owners' equity amounted to **16.46 billion CNY**[20](index=20&type=chunk) [Parent Company Balance Sheet](index=11&type=section&id=Parent%20Company%20Balance%20Sheet) As of March 31, 2020, the parent company's total assets were **24.864 billion CNY**, a slight decrease from the end of the previous year; total liabilities were **56.35 million CNY**, a significant decrease; and total owners' equity was **24.808 billion CNY**, a notable increase - As of March 31, 2020, parent company total assets amounted to **24.86 billion CNY**[21](index=21&type=chunk) - As of March 31, 2020, parent company total liabilities amounted to **56.35 million CNY**[23](index=23&type=chunk) - As of March 31, 2020, parent company total owners' equity amounted to **24.81 billion CNY**[23](index=23&type=chunk) [Consolidated Income Statement](index=14&type=section&id=Consolidated%20Income%20Statement) In Q1 2020, the company achieved total operating revenue of **5.534 billion CNY**, a year-on-year decrease of **14.12%**; net profit attributable to parent company shareholders was **271 million CNY**, a year-on-year decrease of **25.74%**, primarily due to increased operating costs, taxes and surcharges, selling expenses, and decreased investment income | Indicator | Q1 2020 (Million CNY) | Q1 2019 (Million CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 5,534.24 | 6,444.45 | -14.12 | | Operating Profit | 326.12 | 471.50 | -30.83 | | Total Profit | 323.18 | 478.41 | -32.44 | | Net Profit | 270.33 | 365.72 | -26.08 | | Net Profit Attributable to Parent Company Shareholders | 271.07 | 365.02 | -25.74 | | Basic Earnings Per Share (CNY/share) | 0.0950 | 0.1294 | -26.58 | | Diluted Earnings Per Share (CNY/share) | 0.0916 | 0.1242 | -26.25 | [Parent Company Income Statement](index=16&type=section&id=Parent%20Company%20Income%20Statement) In Q1 2020, parent company operating revenue was **5.05 million CNY**, a significant year-on-year decrease; net profit was a loss of **11.77 million CNY**, with the loss narrowing year-on-year, primarily influenced by financial expenses, administrative expenses, and investment income | Indicator | Q1 2020 (Million CNY) | Q1 2019 (Million CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 5.05 | 11.51 | -56.13 | | Operating Profit | -17.31 | -24.90 | 30.49 (Loss narrowed) | | Total Profit | -16.97 | -24.90 | 31.83 (Loss narrowed) | | Net Profit | -11.77 | -18.68 | 36.99 (Loss narrowed) | [Consolidated Cash Flow Statement](index=18&type=section&id=Consolidated%20Cash%20Flow%20Statement) In Q1 2020, net cash flow from operating activities was **-723 million CNY**, turning negative year-on-year, primarily due to the pandemic; net cash flow from investing activities was **348 million CNY**, a significant year-on-year increase due to reduced purchases of wealth management products; net cash flow from financing activities was **923 million CNY**, a substantial year-on-year increase due to new working capital borrowings | Item | Q1 2020 (Million CNY) | Q1 2019 (Million CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -722.73 | 229.60 | -414.77 | | Net Cash Flow from Investing Activities | 348.01 | -594.66 | 158.52 | | Net Cash Flow from Financing Activities | 923.40 | -114.59 | 905.83 | | Net Increase in Cash and Cash Equivalents | 557.05 | -487.01 | 214.40 | [Parent Company Cash Flow Statement](index=20&type=section&id=Parent%20Company%20Cash%20Flow%20Statement) In Q1 2020, parent company net cash flow from operating activities was **-2.166 billion CNY**, turning negative year-on-year, primarily due to a significant increase in other cash payments related to operating activities; net cash flow from investing activities was **446 million CNY**, a substantial year-on-year increase due to increased cash received from investment recovery; net cash flow from financing activities was **-86.83 million CNY**, with the decrease widening year-on-year | Item | Q1 2020 (Million CNY) | Q1 2019 (Million CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -2,165.62 | 2,579.00 | -183.97 | | Net Cash Flow from Investing Activities | 445.90 | -1,529.78 | 129.15 | | Net Cash Flow from Financing Activities | -86.83 | -1.58 | -5494.70 | | Net Increase in Cash and Cash Equivalents | -1,806.55 | 1,047.65 | -272.47 | [Adjustments for First-Time Adoption of New Revenue Standards](index=22&type=section&id=4.2%20Adjustments%20for%20First-Time%20Adoption%20of%20New%20Revenue%20Standards) This section discloses the company's adjustments to relevant opening financial statement items upon first-time adoption of the new revenue recognition standard in 2020, primarily impacting the consolidated balance sheet by reclassifying 'Advances from Customers' to 'Contract Liabilities' and a portion of 'Accounts Receivable' to 'Contract Assets' [Consolidated Balance Sheet Adjustments](index=22&type=section&id=Consolidated%20Balance%20Sheet%20Adjustments) In the consolidated balance sheet, due to the implementation of new revenue standards, **40.19 million CNY** of 'Accounts Receivable' was adjusted to 'Contract Assets', and **527.59 million CNY** of 'Advances from Customers' was adjusted to 'Contract Liabilities' | Item | December 31, 2019 (Million CNY) | January 1, 2020 (Million CNY) | Adjustment Amount (Million CNY) | | :--- | :--- | :--- | :--- | | Accounts Receivable | 1,195.79 | 1,155.60 | -40.19 | | Contract Assets | 0.00 | 40.19 | 40.19 | | Advances from Customers | 1,180.91 | 653.33 | -527.58 | | Contract Liabilities | 0.00 | 527.58 | 527.58 | [Parent Company Balance Sheet Adjustments](index=24&type=section&id=Parent%20Company%20Balance%20Sheet%20Adjustments) The parent company balance sheet was not adjusted due to the first-time adoption of new revenue standards - The parent company balance sheet was not adjusted due to the first-time adoption of new revenue standards[38](index=38&type=chunk)[40](index=40&type=chunk) [Explanation of Retrospective Adjustment of Prior Period Comparative Data](index=26&type=section&id=4.3%20Explanation%20of%20Retrospective%20Adjustment%20of%20Prior%20Period%20Comparative%20Data) The company has not provided an explanation for the retrospective adjustment of prior period comparative data due to the first-time adoption of new revenue and lease standards from 2020 - The company has not retrospectively adjusted prior period comparative data[41](index=41&type=chunk) [Audit Report](index=26&type=section&id=4.4%20Audit%20Report) This quarterly report does not include an audit report - This quarterly report does not include an audit report[41](index=41&type=chunk)

Financial Performance - Operating revenue for the first nine months was CNY 2,161,615.36 million, representing a year-on-year growth of 16.07%[5] - Net profit attributable to shareholders for the first nine months was CNY 137,646.86 million, up 9.75% from the same period last year[5] - Basic earnings per share for the reporting period was CNY 0.4878, reflecting a growth of 9.82% compared to the previous year[5] - The company recorded a government subsidy of CNY 62,309,261.32 for the first nine months, contributing positively to the financial results[6] - Other income surged by 295.55% to 6,576.02 million, mainly from increased route subsidies received during the period[14] - The company reported a total comprehensive income of CNY 1,355,210.45 for Q3 2019, compared to a loss of CNY 14,944,730.39 in Q3 2018[31] Cash Flow - The net cash flow from operating activities for the first nine months was CNY 198,075.49 million, an increase of 38.08% year-on-year[5] - Cash flow from operating activities for the first nine months of 2019 was CNY 1,980,754,852.45, up from CNY 1,434,536,509.17 in the same period of 2018, reflecting an increase of 38.1%[32] - The company’s cash flow from operating activities showed a strong recovery, with a net cash flow of approximately ¥4.60 billion compared to only ¥284 million in the previous year, highlighting improved operational efficiency[34] Assets and Liabilities - Total assets at the end of the reporting period reached CNY 2,086,845.47 million, an increase of 4.51% compared to the end of the previous year[5] - Total liabilities amounted to ¥7,936,328,455.45, down from ¥8,174,615,445.96, showing a decline of around 2.9%[21] - Current liabilities decreased to ¥4,597,040,195.95 from ¥4,814,950,570.72, reflecting a reduction of approximately 4.5%[20] - The company’s short-term borrowings increased by 64.35% to 27,222.77 million, indicating a temporary rise in liquidity needs[12] Investments and R&D - Research and development expenses increased by 66.95% to 5,574.55 million, reflecting the company's commitment to boosting R&D investment[14] - The company reported a significant increase in construction in progress, rising by 61.82% to 94,916.44 million from 58,655.49 million, attributed to enhanced logistics center construction[12] - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and service quality[8] Financial Adjustments - The company has made adjustments to its financial instruments in accordance with new financial instrument standards, impacting the classification of certain assets[40] - The company has implemented new financial instrument standards effective from January 1, 2019, impacting its financial reporting[45] - The company reported no adjustments required for prior period comparative data under the new financial instrument standards[45] Shareholder Information - The total number of shareholders at the end of the reporting period was 47,384, with the largest shareholder holding 50.79% of the shares[10] - Shareholders' equity rose to ¥12,932,126,225.38, compared to ¥11,793,919,535.98, marking an increase of about 9.6%[21] Financial Ratios - The weighted average return on equity decreased by 1.34 percentage points to 11.41%[5] - The company’s total liabilities and equity stood at ¥24,793,793,424.84, reflecting a slight increase from ¥24,748,801,960.61 in the previous quarter[25] - The total liabilities amounted to approximately $8.17 billion, indicating a debt-to-equity ratio of about 0.69[39]

Financial Performance - The company's operating revenue for the first half of 2019 reached RMB 1,395,304.57 million, representing a 15.64% increase compared to RMB 1,206,628.74 million in the same period last year[15]. - The net profit attributable to shareholders of the listed company was RMB 86,264.59 million, up 7.63% from RMB 80,150.64 million year-on-year[15]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 82,939.17 million, reflecting a 7.79% increase from RMB 76,946.40 million in the previous year[15]. - The net cash flow generated from operating activities was RMB 109,668.66 million, a significant increase of 75.84% compared to RMB 62,367.82 million in the same period last year[15]. - The net assets attributable to shareholders of the listed company at the end of the reporting period were RMB 1,201,442.03 million, an increase of 4.48% from RMB 1,149,945.61 million at the end of the previous year[15]. - Total assets at the end of the reporting period amounted to RMB 2,007,381.99 million, showing a slight increase of 0.53% from RMB 1,996,853.50 million at the end of the previous year[15]. - Basic earnings per share for the reporting period (1-6 months) increased by 7.68% to CNY 0.3055 compared to the same period last year[16]. - Diluted earnings per share rose by 2.29% to CNY 0.2902 year-on-year[16]. - The weighted average return on equity decreased by 1.07 percentage points to 7.26% compared to the previous year[16]. Operational Efficiency - The company has a total of 3,856 franchisees and 31,302 end points, with over 47,000 terminal stores nationwide[20]. - The company operates 68 self-owned hub transfer centers and 5 self-owned city distribution centers[20]. - The company has a fleet of 1,572 self-owned trunk transport vehicles and 12 aircraft in its own fleet[20]. - The company has invested in the automation upgrade of its hub transfer centers to enhance package processing capacity[39]. - The company has installed 1,915 robotic arms and 675 loading scanners, and has deployed 60 sets of automated sorting equipment across its network, improving operational efficiency and reducing reliance on manual labor[53]. - The average transportation cost per package decreased by 12.50% year-on-year to 0.74 RMB in the first half of 2019, reflecting effective cost control measures[55]. - The average center operation cost per package was reduced by 11.33% year-on-year to 0.39 RMB, driven by enhanced automation and management practices[56]. Market Expansion - The company is actively expanding its international network and enhancing cross-border logistics capabilities through collaboration with international partners[20]. - The company has expanded its international network, with operations in 17 countries and regions, covering over 150 countries and more than 2,000 international routes[40]. - The company has opened new international routes, including Xi'an to Bangkok and Yantai to Tokyo Narita, to strengthen its competitive position in the logistics market[43]. - The company aims to enhance its comprehensive service capabilities through collaboration with various sectors, including information technology and aviation[61]. Industry Overview - In the first half of 2019, the express delivery industry in China completed a total of 27.76 billion packages, representing a year-on-year growth of 25.7%[37]. - The total revenue of the express delivery industry reached 339.67 billion yuan, with a year-on-year increase of 23.7%[37]. - The CR8 concentration index for the express delivery industry increased to 81.7, up by 0.5 percentage points from the end of 2018[37]. - The effective complaint rate for express delivery services was 0.73 per million, a decrease of 2.35 points compared to the previous year[37]. Research and Development - The company has increased its investment in R&D, focusing on technology integration to enhance service quality and operational efficiency[58]. - Research and development expenses for the first half of 2019 were ¥36,733,702.56, significantly higher than ¥19,650,682.98 in the same period last year, reflecting an increase of 86.93%[156]. Risk Management - The company faces risks from macroeconomic fluctuations, market competition, and changes in customer demand, which could impact future performance[81][82][83]. - The company's main revenue from express delivery is concentrated in the e-commerce sector, posing a risk if the e-commerce industry's growth slows down[86]. - Labor costs are rising due to increased wages and benefits, leading to a decline in gross profit margin, which may be affected by macroeconomic changes and fuel price fluctuations[88]. - The company relies on a high-efficiency information management system for operations; any failure in this system could adversely affect daily operations[90]. - The company has established a safety management system to ensure the security of parcel delivery, which is critical for service quality[92]. Corporate Governance - The company appointed Lixin Certified Public Accountants as the financial audit institution for the year 2019[101]. - There were no significant lawsuits or arbitration matters during the reporting period[102]. - The company maintained a good integrity status, with no unfulfilled court judgments or significant debts due[103]. - The company completed the repurchase and cancellation of certain restricted stocks on January 18, 2019[104]. - The company held the 2018 annual general meeting on May 20, 2019, where it approved the execution of related party transactions for 2018 and estimated transactions for 2019[107]. Financial Position - The total liabilities decreased to CNY 7,767,505,397.20 from CNY 8,174,615,445.96, indicating a reduction of about 4.98%[152]. - The total equity attributable to shareholders increased to CNY 12,014,420,262.18 from CNY 11,499,456,092.99, representing a growth of approximately 4.45%[152]. - The company's cash and cash equivalents stood at ¥1,866,921,703.38 as of June 30, 2019, compared to ¥247,342,349.95 at the end of 2018[153]. - The total assets at the end of the first half of 2019 were approximately ¥12.30 billion, indicating a stable financial position[168]. Social Responsibility - The company actively engaged in targeted poverty alleviation, investing a total of 1,373.03 million RMB in various initiatives during the reporting period[116]. - The company supported 41 impoverished students with a total funding of 2.62 million RMB for educational assistance[116]. - The company plans to continue its poverty alleviation efforts, focusing on healthcare, education, and employment in rural areas[117].