2021-03-18 07:11Financial Data and Key Metrics Changes - In 2020, ZTO Express achieved a 40.3% increase in annual parcel volume, exceeding RMB 17 billion, and expanded its market share to 20.4% [6][18] - Revenue for Q4 increased by 20.6% to RMB 8.3 billion, while annual revenue rose by 14% to RMB 25.2 billion [18] - Adjusted net profit for the year was RMB 4.59 billion, indicating strong earnings quality [7] - Annual average selling price (ASP) for the core express delivery business declined by 20.1% for Q4 and 20.2% for the year [19] - Total cost of revenue increased by 31.9% for Q4 and 25.1% for the year, while unit cost of revenue decreased by 12.1% for Q4 and 11.8% for the year [19][20] Business Line Data and Key Metrics Changes - The company focused on enhancing transit capabilities and increasing the proportion of self-owned fleet, which included high-capacity trailer trucks [7][8] - Last-mile delivery capabilities were expanded, with over 68,000 last-mile posts established by the end of 2020 [10] - The company recorded a decrease in combined sorting and transportation cost per parcel by 14.3% year-over-year [8] Market Data and Key Metrics Changes - The express delivery industry in China is expected to grow steadily, with estimates suggesting that total volume could nearly double by 2025 [25] - ZTO's market share is projected to achieve 22% in 2021, with a long-term goal of reaching around 25% by 2022 [34] Company Strategy and Development Direction - ZTO aims to solidify its leading position in parcel volume and expand market share through increased investments in infrastructure [11][22] - The company is committed to sustainable growth and corporate social responsibility, including environmentally friendly operations and support for rural economies [11] - ZTO plans to optimize its organizational structure and upgrade talent strategies to enhance operational efficiency [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth prospects of the express delivery industry in China, emphasizing the importance of scale and infrastructure [11][25] - The competitive landscape is expected to remain intense, but ZTO's investments in infrastructure and operational efficiency are anticipated to provide a competitive edge [26][34] - The company is not providing earnings guidance for 2021 due to uncertainties in the market [22] Other Important Information - ZTO implemented an uninterrupted service initiative during the Chinese New Year, handling 140 million parcels [15] - The company announced a dividend of $0.25 for the year, representing a 30% payout ratio [22] Q&A Session Summary Question: Competitive landscape in 2021 and ASP trends - Management noted that while price competition remains intense, larger players are becoming more profitable, and ZTO's investments in infrastructure will stabilize its competitive position [25][26] Question: Actions to maintain market share - Management acknowledged a slight decline in market share but emphasized ongoing investments in infrastructure and a stable network to support long-term growth [32][34] Question: Cost trends and ASP expectations - Management indicated that ASP declines are largely due to competitive pressures, but operational efficiencies will help maintain cost competitiveness [37][38] Question: Plans for LTL business - Management confirmed plans to invest more in smart logistic operational parks, with the LTL business performing well and contributing to the overall ecosystem development [39]