Good day, and thank you for standing by. Welcome to J&T Global Express Full Year 2024 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Mr. Simon Xiao, Head of Investment and Financing. Please go ahead, sir. Thank you, Operator. Hello, everyone, and welcome to J&T Express 2024 Earnings Conference Call. I am Simon Xiao, Head of Investment and Financing of J&T Express. The company's results and the investor relations presentation were released earlier today and are now available on the company's IR website at ir.jtexpress.com. Before we start the call, we would like to remind you that the call may include forward-looking statements, which are underlined by a number of risks and uncertainties, and may not be realized in the future for various reasons. Information about general market conditions is coming from a variety of sources outside of J&T. This presentation also contains some unaudited non-IFRS financial measures that should be considered in addition to, but not as a substitute for, the company's financials prepared in accordance with IFRS. I have with me today J&T's Executive President, Steven Fan, Vice President Charles Hou, and CFO Dylan Tey. Our management will share strategies, operating highlights, and financial performance for 2024. This will be followed by a Q&A session. With that, let me turn the call over to Steven. Steven will read through his prepared remarks in Chinese before I translate for him in English. Steven. [Foreign language] Steven, let me do the translation for Steven. Hello, everyone. Welcome to today's results conference. On behalf of J&T Express, it is my great honor to share with you the company's annual results for 2024. Last year has been filled with both challenges and opportunities for us. It has also been a year of significant progress and achievements for J&T Express on the global stage. In 2024, J&T Express achieved remarkable growth worldwide, with significant improvements in both market share and profitability. Driven by the sustained growth of our Southeast Asia business, the steady development of our China business, and our unwavering expansion into new markets, the company achieved comprehensive profitability in 2024, laying a solid foundation for its long-term, healthy development in the global express delivery industry. In 2024, the company handled 24.6 billion parcels, representing a year-on-year increase of 31%. Revenue reached $10.3 billion, a year-on-year increase of 16%. Adjusted EBIT was $301 million, compared to a loss of $335 million in the last year. Net profit was $114 million, marking the first full-year profitability in the company's history. Next, I will provide an overview of the development of our business across different regions. Firstly, China. In 2024, J&T Express handled 19.8 billion parcels in China, representing a year-on-year increase of 29%, maintaining strong growth momentum. Our market share increased to 11.3%, and the adjusted EBIT reached $147 million, achieving full-year profitability for the first time. Our steady development in China is mainly attributable to the following factors. First, rapid growth of the express delivery industry. According to the data from the State Post Bureau, the cumulative parcel volume of China's express delivery industry reached 175.1 billion parcels in 2024, representing a year-on-year increase of 21.5%. The company capitalized on this industry growth by continuously deepening its cooperation with major e-commerce platforms to provide support for our growth. Second, continuous improvement in service quality. In 2024, we enhanced service quality by shortening average daily delivery time and increasing the proportion of same-day and next-day deliveries. Additionally, we strengthened last-mile capabilities by encouraging network partners to invest in automated equipment and unmanned vehicles, so as to further enhance the overall capabilities and efficiencies of our network. As service quality improved, the volume of reverse logistics parcels and individual parcels in our platform surged, with an average daily volume reached three million in 2024, representing an 80% year-on-year increase. This growth highlights customers' increasing recognition of J&T Express' high-quality service. Third, cost optimization and efficiency enhancement. We have implemented refined management and operational optimization across all stages, including pickup, sorting, transportation, and delivery. In 2024, our cost per parcel decreased from $0.34- $0.30, further narrowing the gap with our peers. Our first self-built sorting center in Yangzhou, China, commenced operations in the fourth quarter of 2024, and another in Guangzhou is expected to be operational in 2025, further driving cost optimization. Secondly, Southeast Asia. In 2024, we handled 4.6 billion parcels in Southeast Asia, a year-on-year increase of 41%. Our market share reached 28.6%, representing an increase of 3.2 percentage points from 24%-25.4% in 2023, ranking the top in Southeast Asia for five consecutive years, thus further solidifying our dominance in the region. Our achievement in Southeast Asia is primarily attributable to the following several factors. First, continuous market share expansion. By offering cost-effective services, we have consistently expanded our collaborations with various e-commerce platforms, particularly in the social commerce sector. Meanwhile, we have actively diversified our customer base by increasing parcel volume from non-e-commerce platforms, further boosting our market share. Going forward, we aim to leverage our high-quality services and competitive pricing to further boost our market share and further strengthen our competitive edge. Second, cost optimization and economies of scale. In 2024, our cost per parcel decreased by 14.9% year-on-year, primarily due to the empowered experience in China's express delivery market and the further expansion of economies of scale. By further optimizing operational efficiency, we have reduced the cost per parcel and passed on some of these cost savings to our customers, thereby enhancing our market strengths. Third, improvement in service quality. In 2024, we reduced our average delivery time in Southeast Asia by 10% year-on-year, with continuous declines in both losses and damage rates. We also further enhanced customer satisfaction by offering cash-on-delivery service and other localized services. Lastly, new markets. In 2024, we handled 281 million parcels in new markets, representing a year-on-year increase of 22%, with our market share rising to 6.1%. Despite facing challenges such as fluctuations in cross-border policies, we remained committed to investing in network infrastructure. Our addition of 900 outlets year-on-year has strengthened our network coverage density and capacity, laying a solid foundation for sustained growth in the future. Looking ahead, here are our long-term global competitive strategies. First, focus on Southeast Asia and China markets to further solidify our market position. Second, steadily increase our market position in the new markets. Third, continue reducing costs through refined management and empowering overseas markets with China expertise. Fourth, capture the new changes in the business flow arising from the e-commerce globalization. Fifth, strengthen our brand and expand into non-platform parcels to enhance profitability. We are fully aware that the express delivery industry is never without challenges. In the face of doubts and obstacles, we choose to move forward with determination, as we always have. In this regard, we remain committed to our founding principles of humility, hard work, and responsibility. We firmly believe that only through continuous self-improvement can we stay competitive in a fierce market environment. We persevere in doing what is difficult but right, maintain sufficient patience, strengthen our fundamental capabilities, and develop more high-quality customers. The year 2025 marks the 10th anniversary of J&T Express. We will continue to push ourselves, embrace new challenges, and strive for higher goals. With relentless efforts and ongoing innovation, we are confident that J&T will continue to serve our customers worldwide and achieve long-term growth. Thank you all for your support and trust. Let us look forward to even greater success for J&T Express in the future. Thank you. Now, I would like to invite our CFO, Dylan, to present the company's financial performance. Dylan. Thank you, Simon. Thank you also, everyone, for joining the call today. I will now take you through our financial highlights. Please note that unless specifically mentioned, all the numbers I'm quoting are in US dollars, and percentages are on a year-on-year basis. Detailed financials, including our performance metrics, unit economics, cash flow, and capital expenditures, are available on our IR website. So here, I will focus on taking you through some of the key highlights. For our group overall, we are very happy to report that our total revenue increased by 15.9% year-on-year, from $8.8 billion in 2023 to $10.3 billion in 2024, while our core express delivery revenue increased by 23.4% year-on-year, from $8.1 billion in 2023 to $10 billion in 2024. This was mainly driven by the parcel volume growth of the delivery services across all the 13 countries in which we operate. Our total gross profit in 2024 was $1.1 billion, which is a significant improvement from $473 million in 2023. Our total adjusted EBITDA grew more than fourfold, from $147 million in 2023 to $778 million in 2024. More importantly, with our Chinese business achieving positive adjusted EBIT, our total adjusted EBIT also turned profitable, reaching $301 million in 2024, compared to a loss of $335 million in 2023. As a result of all the above, we achieved an adjusted net profit of $200 million in 2024, which is a significant turnaround from the adjusted net loss of $432 million in 2023. Next, let's analyze our results by segment. Southeast Asia, supported by the strong parcel volume growth mentioned by Steven, our revenue increased by 22.3% year-on-year, from $2.6 billion in 2023 to $3.2 billion in 2024. Our gross profit, on the other hand, was $633 million in 2024, compared to $470 million in 2023. We had an adjusted EBIT of $303 million in 2024, representing a year-on-year increase of 48.9%, compared to $203 million in 2023. We have achieved a healthy and sustainable level of profitability in Southeast Asia, with the adjusted EBIT margin improved from 7.7% in 2023 to 9.4% in 2024. We continue to benefit from the growth across e-commerce platforms as an independent e-commerce enabler with flexible pricing, and we are also actively exploring non-e-commerce platform customers by leveraging our well-established network and high-quality services. Meanwhile, we are continuously reducing costs by leveraging existing economies of scale and applying our expertise from China to Southeast Asia. This approach continues to strengthen our unit economics and allows us to pass cost savings to our customers, thereby enhancing our market share. Next, let me talk about China. For China, we are proud to announce that in 2024, we achieved our first annual positive adjusted EBIT, alongside an increase of 0.7 percentage point in our market share, which is a very important milestone for us. For 2024, revenue grew by 22.2% year-on-year to $6.4 billion, compared to 2023. In 2024, our revenue per parcel in China was $0.32, a slight decrease from $0.34 in 2023. This decline occurred amidst intense competition in the China express delivery industry. We drove down delivery prices. We dynamically adjusted our pricing across different regions in response to the industry trend to remain competitive. At the same time, we focused on enhancing our customer mix by attracting more high-quality customers. Our operating cost per parcel declined from $0.34 in 2023 to $0.30 in 2024. This is a result of our improved overall operational efficiency while enhancing capacity and network stability, as shared by Steven earlier. We achieved the cost savings through various measures, such as investing more in our self-owned line-haul vehicles, creating automation in our sorting centers. As a result, we had a positive adjusted EBITDA of $427 million in 2024, which is compared to an adjusted EBITDA of $31 million in 2023. Our China adjusted EBIT was $147 million in 2024, compared to a loss of $236 million in 2023. Next, let me talk about our new markets. Our new markets' revenue increased by 76.1% year-on-year, from $327 million in 2023 to $576 million in 2024, mainly driven by the growth of the parcel volume. In 2024, certain new countries in the new markets adjusted its network to adapt to market conditions. We are still in the investment phase in these markets. We are delighted to see the adjusted EBITDA losses have narrowed from $82 million in 2023 to $43 million in 2024, with the net negative margin improving from 25%, from 7% to 7.5%. In the year of 2024, in our new markets, we further enhanced our network capacity by investing in automated equipment in our sorting centers. We have added many new outlets and also increased the line-haul vehicles to support our growth. We remain highly positive for our new markets. Lastly, for our cross-border business, we shared previously that we decided to close the cross-border B2C business in the fourth quarter of 2023 and focus on the B2B sector, which includes international freight forwarding and warehousing solutions. So consequently, our revenue in 2024 for this business segment was $75 million, which is down 88.7% year-on-year from $660 million in 2023. An adjusted EBITDA recorded a loss of $29 million in 2024. It is still a big improvement compared to our loss of $170 million in 2023. So finally, let me return to our consolidated numbers. Considering all the factors outlined above, we are pleased to share this milestone of profitability for the group with you. Our adjusted net profit reached $200 million in 2024, marking a turnaround from an adjusted net loss of $432 million in 2023. Additionally, the total net profit for the year on a GAAP basis was $114 million, which is also a turnaround from a loss of $1.2 billion in 2023. On the cash flow front, we also see our cash flow position strengthening. We had a net cash inflow from operating activities of $807 million in 2024, which is a significant increase from a net cash inflow of $342 million in 2023. After deducting capital expenditure, our group free cash flows turned positive for the first time in the year 2024, reaching $252 million, compared to a negative free cash flow of $133 million in 2023. As of December 31st, 2024, we maintain a strong cash position with our total cash, cash equivalents, and restricted cash amounting to $1.6 billion. This concludes my prepared remarks. Thank you, Steven and Dylan. We are now ready to open the call for questions. Operator. Thank you. We will now begin the question and answer session. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. We will now take our first question from the line of Brian Gong from Citi. Please ask your question, Brian. [Foreign language] I will translate myself. Thanks management for taking my questions and congratulations on decent results. I have two questions. First is recently we saw the news that TikTok Shop already started their operation in Mexico, so wonder how is the performance of their volume on our platform recently, and when do we expect they can make meaningful contribution to our parcel volume growth in new markets? And the second question is our domestic parcel volume growth was pretty decent in the fourth quarter, and what's our expectation for 2025, especially on competition? Do we see more intensified competition, and what's our strategy under this environment? Thank you. I think these two questions can be taken by Charles. Charles. Brian [Foreign language] Okay, thanks Charles. Let me do the translation for the two questions. For the first question regarding TikTok Shop's operation in Mexico, actually TikTok Shop began its operation in Mexico in February 2025, and we have been providing express delivery service for them. Currently, it is still in the early stage of development. Despite the additional tariffs imposed on cross-border policies, TikTok has firmly expanded into Mexican markets, which is a clear indication of its emphasis and expectations for this market. We look forward to growing together with TikTok and all our clients through the high-quality services we provide. The second question is about our fourth quarter domestic service results. In 2024, our company's parcel volume in China increased by 29% year-on-year, while the industry average growth was around 21.5%. As a result, our market share increased by 0.7% year-on-year. In addition to the continuous expansion in the lower-tier market and rural coverage, the company has optimized its business and customer mix through continuous improvements in service quality. With a focus on refined management and the application of technology, there has been a significant improvement in the efficiency and cost. We achieved profitability for the first time in a full year, and this is the approach we hope to maintain, improving market share and profitability at the same time through service quality and technology enhancements. Okay, we can turn to the next question. Operator. Thank you. Our next question comes from the line of Sijia Lu from Changjiang Securities. Please ask your question, Sijia. [Foreign language] Okay, thank you for taking my questions. I have two questions. Question one: given the significant cost reduction achievement in the Chinese market, what specific measures have the company implemented? What are the future expectations for further cost optimization? Question two: how do we perceive the competitive trends in the return parcel market? If competition intensifies and prices decline, will this significantly impact the headquarters' profitability? Thank you. I think this first question can be taken by Charles, and the second question can be taken by Dylan. So let's start with Charles on the first question. [Foreign language] Dylan, would you take the second question? Okay. Thanks, Sijia. I will answer your question in English. So in 2024, I think accompanying the delivery insurance and other favorable policies, we can see that there are more consumers in China. They ask for good product returns or parcel returns, and we can see a very good growth rate for our return services. I think for our express network, combining with our network partners as a whole, I think the returns profitability is in fact higher than our normal delivery services. This is also why everyone wants to get more return parcels and therefore more competition, as you mentioned. But one characteristic of return services is the service qualities for such deliveries are way more stricter than the normal deliveries, and only if we perform the services well, then we can get more volume. So this is the general backdrop, right? But for our company, I think you might know or you might not know, so let me clarify here. So for us, I think we always keep the returns profit margin, the revenues and the profits to our network partners because we hope to use this to improve their profitability situations and also to increase the delivery personnel's proactiveness as well as the service quality for those services. To do that is really our long-term strategy to create or improve our competitive advantage in China while improving our service quality. So this is our overall strategy, and I think if you look at our perspective, I think for our China's business, how we turn around in 2024, we did not become profitable through the return profitability. It's a combination of many other factors. So for us to give the profits because we give most of our profits to our network partners. So accordingly, I think along your logic, if this price competition continues, it's not going to affect our group's profitability in a significant way, Sijia. Right, thank you. We will now take a next question from the line of Qianyu Guo from Nomura. Please ask your question, Qianyu. Hello, [Foreign language] Let me translate my question by myself. Thanks for taking my question and congratulations on the solid results in 2024. I have two questions. The first question is about our business in Southeast Asian market. Could management share with us the latest business strategy in this market, and how should we see the parcel price trend and the business profitability trend in this market? My second question is about your company's cash flow. How should we consider our cash flow position at current stage, and whether it may still face the pressures, especially considering the debt repayment, the net capital expenditures, and the share capital return? Thank you. Okay, thank you. I think the first question can be deferred to Charles and the second to Dylan. Charles. [Foreign language] Thank you. Let me translate for Charles regarding the strategy in Southeast Asia. Our company's strategic goal in Southeast Asia is to continuously increase market share, consolidate its leading position in the industry, and raise entry barriers. Leading delivery times, service, and quality form the solid foundation for the company's growing scale in Southeast Asia. As scale and market share increase, the company expects the unit price per parcel to decrease by 5%-10% annually over the next two to three years. We anticipate that the continuous reduction in e-commerce logistics costs will boost transaction volumes for e-commerce clients. The decrease in our unit prices is driven by cost reductions. With the benefits of economies of scale and systematic application of Chinese express delivery experience in Southeast Asia, the company expects costs to further decrease by 5% to 10% annually in line with the revenue decline, thereby maintaining stable profitability per parcel. Meanwhile, the company is continuously expanding its non-platform business. Although the volume of non-platform parcels is smaller, their higher average selling price will offset part of the decline in e-commerce parcels. Looking further ahead, by combining e-commerce parcels with more high-margin products, there's potential for a gradual increase in both unit revenue and unit profit. Okay, so next is question for Dylan regarding the cash flow. Rachel, thanks for your question. I think your question is on cash flow, right? So as of the end of last year, 2024, our group's cash equivalents together with restricted cash amounted to about $1.64 billion. This is more than sufficient to cover our interest-bearing debt, even in a worst-case scenario. But what's to note that is in terms of our borrowings, actually of our borrowings, we have all of our $1.6 billion borrowings. $1.25 billion is a syndicated loan which we issued only back in September last year with a maturity of October 2027, which is a long way to go. So we have no repayment pressure in the near term, Rachel. So that's the first point, right? But maybe just adding on to your second part of your question about CapEx and improvement. I think I mentioned earlier on that we already achieved our first free cash flow as a group after deducting capital expenditure of $250 million in 2024. I think with this continuous improvement of our cash flows, we expect to generate even bigger and more positive free cash flows for us in the next few years. So while we are continuously looking out with the prospect of perhaps new markets, but we will invest very cautiously to avoid putting pressure on our group's cash flow. Finally, I will just also add on. I think one of the commitments for shareholder returns is our share repurchase. As you recall, we have announced our HKD 1 billion share repurchase last year. As of now, we have already repurchased HKD 170 million. This plan is set to expire in June 2025. We will decide whether and when to use the remaining portion based on the market performance, and we also will not put pressure on our overall cash flow, Rachel. Thank you. We will now take a next question from the line of Lisa Lin from Huatai Securities. Please ask your question, Lisa. [Foreign language] I translate by myself. So first, thank you management, congratulations on the great result. I have two questions regarding the new market. So firstly, will management share some business and market updates in the new market, and especially for the Middle East countries? And also, do you expect the new market segment overall to achieve break even? And secondly, besides the current five countries, do you see any potential opportunities in any other new countries, and do you have any plan to expand business? Thank you. Thank you, Lisa. And I think both of these questions can be taken by Steven. Steven. [Foreign language] Okay, I will do the translation for Steven. First, regarding the recent development of our new markets and whether it can achieve profitability. Actually, in 2025, the impact of cross-border policy fluctuations in new markets is still ongoing. However, as cross-border policies gradually take effect, the company has observed that e-commerce platforms are beginning to adjust their business models with a significant shift towards semi-consignment and localized operations. It will take some time to see the full impact of the policy on the business. Meanwhile, as mentioned earlier, TikTok Shop has already launched its operations in Mexico, which is a positive development for us. With the continuous growth in parcel volume, the company is leveraging further economies of scale and operational optimization in new markets to reduce costs. And we expect to have a full-year EBITDA breakeven for new markets for 2025. The second question is regarding our plans. We have observed that globalization of e-commerce is driving changes in global trade flows, a trend that is irreversible and presents significant opportunities for e-commerce logistics companies, and J&T will firmly grasp this historical opportunity. In many countries, the express delivery industry is still in its early stages or offers low-cost effectiveness, presenting opportunities for us. Therefore, we are conducting some market research in Latin America, Middle East, and other countries, hoping to enter at the right time and establish regional advantages. For U.S. and European markets, the company continues to study and monitor. Overall, J&T is still a growth story. We aim to leverage our localization experience in Southeast Asia and advanced industry know-how from China to help J&T expand into more countries. Okay, operator, maybe we have time for the last question. Thank you. A last question comes from the line of Fan Zhou from Bank of America. Please ask your question, Fan. [Foreign language] Thank you, management. I have two questions, if I may. First one is, could you provide some more color about the year-on-year volume growth for the Southeast Asia market in the first two months, and which country would be a major volume driver for this year? Second, on CapEx, how will we adjust our CapEx in Southeast Asia given the e-commerce platforms are all insourcing their logistics business and that we already have a pretty solid leading position over other 3PLs in the market? Thank you. Dylan, maybe you could answer these two questions. Okay, Fan, hello. Nice to hear from you again. Yep. So for your first question, asking about our growth in Southeast Asia the first two months. I think so. First of all, let me maybe give a bit of backdrop. I think for 2025, our parcel volume growth guidance for the whole Southeast Asia is 20%-25%-30% annual growth. So for the first two months of this year, we have seen strong growth, and we are confident in achieving this target. The growth comes obviously from the e-commerce platforms that we have been working very closely with, as mentioned earlier on. At the same time, as you also remember, since last year, we have been expanding our non-e-commerce customer base. This is one of the very important strategies for us. This parcel volume growth for these non-e-commerce customers is also increasing, with some of the countries experiencing even double-digit growth in the first two months. However, because the growth rate at the total contribution from the non-e-commerce customers is smaller in terms of parcel volume compared to the e-commerce platforms, the proportion right now still remains around 10% or slightly lesser. Okay. So Fan, that's your first question. I think the second question, I think you asked about the CapEx, right? Right, correct. Let's see. I see. I think in SEA, actually, we are. I think you remember we talked about a few times. We continue to invest in China, Southeast Asia, and new markets, obviously in the portion of 5-4-1 for these three markets, 50, 40, 10, i.e. So I think we continue to see that growth. We will continue to invest in Southeast Asia because, as you can see, we are already the leading player inching up to 30% market share, hopefully by this year. So we will continue to invest in CapEx, both in terms of our sorting centers. We have plans to. We are planning for construction in our sorting centers in Malaysia and Philippines these two years. And we also have plans to upgrade a lot of our sorting equipment in most of our geographies in Southeast Asia. Last but not least, we have plans to invest in our additional line-haul vehicles to continue to drive down our costs and replicating our know-how from China into these countries. All in all, we are very happy that we are making good progress in terms of market share. We will continue to actually invest in terms of CapEx in Southeast Asia to solidify our market leadership as well as to capture the market growth. Thank you, Dylan. I think this concludes our Q&A session. Operator. Thank you. We have reached the end of the question and answer session. Thank you all very much for your questions. With that, we conclude our conference today. Thank you for participating. You may now disconnect. Thank you all. Thank you. Thank you.