Hello, good day. Welcome to J&T Express Q1 2026 business performance announcement. Before the end of the conference, we're going to have a Q&A section. If you need to ask a question, please go to China's line and press star one one. We are going to have recordings. Now I'll give the floor to Frank. Hello, everyone, and welcome to J&T Express Q1 2026 business performance briefing. I'm Frank, and the materials for today's meeting have been sent to you via email and uploaded to the company file website. Joining us today, we have Dylan, CFO at J&T Express, and Haibin, Director of Investment and Financing. We're going to have two parts. First of all, Haibin will present the company's business performance in Q1 2026, and then Q&A, where management will answer the questions. Hello, everyone. Welcome to attend this 2026 Q1 business performance announcement. This is Haibin. Our Group total parcel volume reached 8.33 billion pieces in Q1 2026, up 26.2% year-on-year. The Group's growth, majorly driven by the Southeast Asia, China, and other markets. First of all, Southeast Asia. Parcel volume in Southeast Asia reached 2.77 billion pieces in Q1, up 79.9% year-on-year. The key growth drivers in Southeast Asia remained strong in Q1 2026. First, the e-commerce shopping festival around the Lunar New Year and Ramadan in Southeast Asia boosted local consumption, driving high growth together with the e-commerce customers in Q1. Second, our e-commerce platform customers' increased investment and promotion activities and expanded product categories drove the rapid growth. Third, our non-platform parcels also grew and made a solid contribution to the volume, but the overall growing trajectory is slower than the e-commerce parcels, accounting for less than 10%. Meanwhile, the platforms have raised the comprehensive requirements for logistics. We have seen that small and medium-sized express operators struggle to meet the requirements, but cost and pricing advantages and solid network capabilities of ours has widened the gap with our competitors and further strengthened our industrial positioning. Second of all, for China, the parcel volume in China reached 5.4 billion pieces in Q1, up 8.4% year-on-year, and our business volumes in China rebounded in Q1, supported by the Spring Shopping Festival. The industrial total volume increased by 7% year-on-year in January through February of 2026, and overall growth rate of the express delivery industry rebounded compared with Q4 of last year. We also adapted the changes of the policy regulation and industrial competition and actively adjusted our strategies, continuously strengthening our network foundation and improved timeliness, service quality, and cost control capabilities so that we are able to have the high-value customers more serviced and enhance our technology empowerment and sustainable growth. Lastly, the other markets, we have updated volume disclosure term for former new markets and other markets. Other markets refer to J&T operating regions outside of China and Southeast Asia, including the original five new countries and further new markets we entered. In Q1, our parcel and other volumes reached 150 million pieces, up 100.5% year-on-year. The accelerated growth in other markets in Q1 was mainly due to, first of all, the e-commerce penetration in other markets is still low. Per capita parcel volume is much lower than that of China and Southeast Asia, while local per capita GDP is relatively high, leaving a large room and potential for e-commerce consumption growth. Second, our key e-commerce customers continued to increase investment in Latin America and achieve stronger growth, and the company grew together with our customers. Third of all, the company continuously exported the express delivery operation experience from China and Southeast Asia to other markets, invested in automated sorting equipment, optimized routing plannings, and improved the end pickup and delivery efficiency. Finally, it matched the rapid growth of local demand. Specifically, Brazil and Mexico maintained solid growth. The content e-commerce ecosystem in the Brazilian market is most mature. We then tie up new customers and achieve good growth. This is the business performance of each market in Q1 of 2026, and this briefing is limited to operational data without coverage of the financial figures. Thank you. Right. Now, let's have the Q&A. We would like to welcome investors and analysts online to ask your questions. Right. Now let's have the first question. This is from Haitong Securities, Tong Yibo. Thank you very much for taking my question. Good morning, everyone. My question is, still we have a very good growth. I think that everyone could hear me. The question is that we still have a very good growth in the figures, and everybody pays a lot of attention to the development of the e-commerce business. For e-commerce, as well as the going global business of e-commerce, we emphasize a lot on the investment increasement. How are we looking ahead in terms of the subsidies from our customers? At the same time, for Southeast Asia and Latin America market, how do you think about the absolute number of the overall growth? Thank you. You're asking the question related to the market of Southeast Asia? That's right. Overall speaking, as we have already disclosed in the annual report, the e-commerce parcel in Southeast Asia is developing very fast. According to our estimation that in 2026, the overall e-commerce business in the Southeast Asia market is going to be growing at 30% and double-digit growth in the next five years. As the biggest courier service or express delivery operator in Southeast Asia, because of our investment and overall strategy, I believe that we are going to outperform the industry average. In Southeast Asia, we have seen the TikTok, Temu, Shein, and the other market and other customers. They have emphasized more their investment in Southeast Asia market as well. By having different operation and different marketing and campaign and increase the product categories, the overall business has grown. Overall speaking, as we have already mentioned that the volume share has been increasing in Southeast Asia, and some of our competitors are now exiting from the competition. Be it the pricing or the overall network capability, in Southeast Asia market, we are going to have a further upgrade. Of course, we have the market share data updated every half a year. Next quarter, we are going to give you the report about the change of market share in Southeast Asia, talking to you about the background. From our standpoint, except for the e-commerce platform parcels, we are also going to increase the percentage of non-parcels. Percentage-wise now, this is less than 10% for the other businesses. Now because we have a very good growth of our e-commerce parcels, be it from our operational strategy standpoint and the other points, we are going to have a lot of development here in the Southeast Asia market. Right. Thank you very much for the answer. Thank you. Let's wait for the next question. Next question is from Stephen Zhang from CICC. Right. Good morning, Dylan, Haibin, and Frank. This is Stephen from CICC. Yeah, please go ahead. Okay, I have two questions. The first one is about the Southeast Asia market. We already know that there are news of saying that in Thailand, because the oil price is growing, the particular price of express delivery is also increasing. There was a news. We would like to understand the change of ASP in Southeast Asia market and, because the overall cost of the petroleum is getting up, what is the overall impact on you? Second question is about the other markets, and we know and congratulate you on a wonderful growth in other markets in Q1 in Middle East. Probably you had uncertainty about the parcel volume there in Middle East. Would you like to give us further sharing about the overall market growth in Latin America and Middle East as well in other markets? Right. Thank you, Stephen, for this particular question. Let's have the first answer. With regards to the overall petroleum cost, we have already seen that because of geopolitical tensions, we do have regional conflicts and causing the rising cost of petroleum. At the current stage, with regards to these countermeasures, we do have several of them. First of all, we had a previous storage of petroleum for a short period of time in order to offset the overall impact. Second is that in a lot of countries in Southeast Asia, we do have different situations. Sometimes the government will have subsidy, but we need to be in the line to actually acquire that quota. We are going to emphasize more on the communications with our customers. At the current stage, with a very high cost of the fuel oil, we are now going to try our best to try to replace the traditional fuel oil with the new energy and lower down the overall cost and dependency. Second is that while we increase the overall cost of freight and the other costs, we are going to also pass through up to our suppliers so that at the same time, we are going to tackle against this particular challenge together with our customers and upstream as well. All right, so this is the overall planning. Second question with regards to impact from Middle East. Because of the regional conflicts happening there, as for J&T Express, we are an international company, so we are now operating in different countries in the world and with offsetting risks from different regions and countries. We are going to remain operational in the Middle East and pay attention to the changes of the national conflicts and trying to have a very flexible strategy in place. Hopefully that the overall business in the Middle East is going to be very sustainable. Thank you. Thank you. Let's wait for another question. Now we have Steve Qiu from GS asking the question. All right. Good morning, Dylan, Haibin, and Frank. Congratulations on this very strong performance in Q1 of 2026. I have two questions. In the very beginning, Haibin already mentioned that in Southeast Asia market, we have seen some of the 3PL kind of exiting from the competition and being cleared out. We are now gaining more orders. We would like to know that when you are getting some of the orders from the 3PL or major 3PLs, and how do you think about this collaboration? In Thailand, Indonesia, and other relevant countries, what is the overall trend? My second question would be on the China market, not only about the third-party carriers fleet, but also your own proprietary fleet. There is a slight decrease of that number. What is the reasons behind? Let's actually answer the first question, and my colleague is answering the second one. Talking about some of the smaller 3PL players exiting from the market in Southeast Asia, this is something that we are expecting. We always emphasize that we are actually servicing all the platforms because we are a third-party express delivery service provider. I think that this is not a competition between third party versus launching, but this is a competition about the overall e-commerce. At the end of the day, the e-commerce companies are actually selecting the most effective and the cost-efficient partners to work with, like China, right? I don't need to talk to you about the significance of that further. From our standpoint, at this moment, the most important thing that we have to do is that in terms of cost and efficiency, as well as the quality, we are going to actually make further advancements. In the past 10 years, we actually had a very good operation in Southeast Asia, and now we are now expanding our overall business. To be honest, we have already enhanced our capabilities in the Southeast Asia market, and now also we have a very good market coverage in China. At the same time, we are now going to provide a better cost-effectiveness to our customers in Southeast Asia and also providing better quality services. For Thailand and Indonesia, to be honest, not only we are valuing Thailand and Indonesia, but also for the rest of the Southeast Asia market as well. Of course, there is actually several billion parcels a year in Southeast Asia, but in China, it's tens of billions. Still that there is a large room for further improvement of parcel volume in Southeast Asia. Now we are improving per capita parcel volume as well in Southeast Asia. We will increase continuously our investment in Southeast Asia market and further enhance our efficiency of the utilization of the capital. As a third-party logistics provider, we are building our own kind of a business, but also at the same time, we hope that e-commerce platforms are continuously using our business. All right, let's answer the second question. In Q1, the number of fleet proprietary-owned has been decreased. There are actually two reasons behind. First is that the company is actually increased the overall use of the third-party fleet. At the same time, we're optimizing the categories like the trucks with the total wheelbase of 16.5 m. The second part is that in the future, I believe that we do need to have a certain further supply of the additional fleet. This is not a kind of a quite massive change. All right. Thank you very much, Dylan, my friend, for the answer. That's answered. The next question. [Non-English content] All right. Hello, Dylan and Frank, and Haibin. This is Lu Xijia from Changjiang. I have a question with regards to the Southeast Asia market competition. Be it the partners and the number of the point of service, we are having a very good dynamism here in Southeast Asia markets. We would like to understand if it's the conversion from direct operation to franchisee model, what is the percentage, and in the future, whether you are going to adjust that figure further. Second point is that the point of service number is not changing in Southeast Asia market, but for proprietary trucks and the overall kind of sorting point number, this is increasing. Does it mean that we have reached a plateau in terms of the expanding of the network points? What is the strategy for the overall future? How do we actually think about the overall development trend of non-platform business? All right. Thank you very much. Let's have the answers. First of all, it is actually correct that in current 2026 Q1, in terms of the automation machines and the proprietary fleets, we are now increasing our investment here in Southeast Asia market. This is actually the same as the guidance that we have provided in the beginning of the year. Overall speaking, our business there had a very strong and robust growth, and we have to actually increase our GP margin. We have adjusted the particular kind of network efficiency. Automation machineries that we have invested also help us to improve the efficiency and operational ability of the whole network and point of service. Second part is about the number of franchisees in 2026 Q1. The number of franchisees flattened. We are now doing integration of franchisees and enhancing the capability of franchisees and overall speaking, enhancing our own capability. At current stage, the conversion from direct operation to franchisee model is now being promoted. This could help us to actually lower down the overall cost. Second, the franchisees have their own businesses as well as their own resources in local market. This is going to be helping us to improve our overall efficiency at the same time. Now we are doing more conversion. A little bit over 1/3 of the direct operational point of services are now becoming franchisees. In the future, we are going to have a continuous increase of that particular number of the business. This is not happening that quickly because still, we need to find one franchisee after another. Last part of the question is that at current stage, we are doing further expanding the other non-e-commerce platform businesses like the key accounts. I think that the overall definition is quite similar to what we have communicated in the last round. At current stage, it is not that taking a very large proportion. Non-platform business now is only accounting for 10%, but in the future, for non-platform business, this is going to be actually contributing a lot more into our overall top line and bottom line. In 2026, in Q1, in the Philippines, we have already increased more collaborations with the local government and the local customers, and this is the overall trend. All right. Thank you very much, Frank. All right. Let's have [inaudible] asking the next question. All right. Hello, Frank, Dylan, and Haibin. This is Ivan. First of all, congratulations on such a wonderful performance from the company. I have two questions. The first one is, with regards to other markets, would like to understand that for other markets, as for the contribution from Latin America, what is the overall percentage against the total? The next one is that TikTok and Mercado Libre started to contribute the business since the second half of last year. Now when we have further contribution from these customers, have you actually seen any trend or momentum of the year-on-year growth in the second half of the year? The second question is about the other new markets. Would you like to share with us that for those countries that you are now entering, like Europe and America and Latin America, for instance, any prioritization that you have for the markets? At the same time, what kind of market competition are you expecting? All right. Thank you very much, Ivan, for this particular question. As we have already said that for the new five countries, this includes the Middle East and Latin America, and now we have other markets as well. At current stage, the overall share of Latin America is quite high in Brazil and Mexico in specific. We have emphasized more investments there in two countries in Latin America, increasing the parcel volume there. We know that we had a figure of the orders from the Mercado Libre from Mexico in 2025 second half. At the same time, we do see a very good business growth of ourselves and the decrease of our competitors. We are very much confident in developing this business from Southeast Asia, I mean, the Latin America. At the current stage, we are going to see a much better potential in the Latin America business. At the same time, we are very much confident in that market. Talking about Mercado Libre, we just increased our partnership since last year, and they are now expanding their business in Latin America as a whole, and we are going to have further partnership with him. We all know that the per capita parcel volume in Latin America is lower than that of Southeast Asia. Last year, overall speaking, for the per capita parcel volume in Latin America and Middle East is 11. In Southeast Asia and also China market, we can see that this is actually very high. We do believe that we do have a very large potential there. The final objective is still the same. We are actually believing that Latin America is really important. Second question is that the Europe and America and other markets, we are having the parallelization of this particular answer to every one of you. We are now, at the same time, quite active preparing our entry into the U.S. and Europe markets, and we are defining the final timetable of that. When that's mature and the answer is ready, we're going to provide that to everyone. All right. Thank you very much, Dylan, Haibin, and Frank for this answer. Thank you. Now we have Catherine from Guangdong asking the next question. All right. Hello, everyone. Thank you, Haibin, Dylan, and Frank. This is my question. For the business volume, I think that this is pretty good and higher than our expectation. Overall momentum is pretty active. My question is that now until Q2, you are having a collaborations with SF Express. Would you like to tell us more about this collaboration with SF Express, and how do you implement your strategies there? Right. Thank you very much for your question. Let's actually talk about the update of the collaborations with SF Express. As we have already said that we had a kind of a commercial shareholding and strategic collaboration, now we are establishing a common task force with SF Express, and altogether we are going to actually see the overall potential of the market. For instance, in China, in the very beginning, we had the parcel delivery at the bottom market and penetrative market, and also parcel collection as well. In order to open more markets and trying to get more market share, we are now collaborating with SF Express. Also, the overall kind of SF Express is having a very good business of the line-haul lines in the overall global market. Now we are pretty much targeting that particular advantage of SF Express and work with them in the international arena as well. We do have a very good and deep penetration into the strategic collaborations with SF Express. When everything is getting more clear, we are going to have a timely update to everyone. Thank you. Now we have Moji Lin from CITIC Securities, asking the next question. All right. Hello and good morning, everyone. This is Moji Lin from CITIC Securities. First of all, congratulations on the wonderful business, and thank you for the opportunity to ask question. I have two questions regard the Southeast Asia market. We actually know that this is actually quite glad for us to see a performance in Southeast Asia market and for J&T overall growth. Versus first quarter 2025, we had actually a slowdown, but your growth is actually quite high. We would like to understand now whether or not you have any other new customers gain in China. Next question is that, do you actually foresee any kind of changes of your competitors in this market? Because we know that from the parcel volume of 3PL, now it is quite limited in terms of the scope of selection. Second question to you is about the machineries and equipment. We have seen that in Southeast Asia, you have actually increased a lot the automated equipments in Southeast Asia market. This is actually creating historical high. We would like to understand still the number of machineries and equipment is still lacking that of the China market. How you actually now see this plateau effect of the number of machineries that you have invested in Southeast Asia market, and how do we actually expect the change in terms of the overall cost in the future because the number of equipments already reached a plateau? Right. Let me answer the questions. The first question is that whether or not we have any new customers in Southeast Asia market and the overall changes of the m arket. To be honest with you, for Southeast Asia market, actually, we do not have a lot of new increased key accounts because we have covered almost all the major platforms. Of course, in terms of the overall kind of market share, we do see a certain increase of market share from our certain kind of customers because they have provided this particular customers or this overall business to ours converted from the competitors, and because we have a very good cost effectiveness for these new customers. For this, we do see a very good increase of our share in there, and also for some of the post offices in certain countries or regions. As for the industrial figures, we are now going to have the update every half a year. In August, we are going to provide with everyone the overall updated figures in the first half of 2026 and then give you update of the figures in Southeast Asia market. According to us, we do not see any kind of a big change happening there in Southeast Asia market because the post offices and post businesses of the Southeast Asia market is not the fast delivery or express delivery. We are now focusing on express delivery. There is a difference. Okay. Next is that you asked a question about the overall plateau of your equipments and automated sorting machines in Southeast Asia market, but still there is a gap versus China's, right? Because of the volume overall speaking, if not reaching to a certain scale, it is not worthwhile for us to invest in those equipments. At the current stage, we're now increasing our investment in equipment purchasing. In Q1 of 2026, we had increased a lot number of the equipment in Southeast Asia market, and this is going to be the overall trend for the next quarters in 2026, because we have our expectations of the CapEx raising. Another part is about the overall equipment investment for the point of services and network. There's a large room for the overall improvement of that figure. At current stage, it's still manual operated or most of the sensors or networks have semi-automated equipments available. Now we are going to increase to actually change that situation, increase our investment. Thank you. Thank you. The next question is from Rachel Guo from Nomura. Hello, dear management. I have a very quick question regarding the reverse parcel. I would like to understand that for the reverse parcels in Southeast Asia market and in China, what is the overall percentage of that and what is about the overall growth at the current stage, from ASP or from a profitability standpoint, do you think that this is more contributive to the overall business than the normal parcels? Would you like to share with us about the reverse parcels? All right. Thank you very much, Rachel, for this question. Let me have the answer. Normally speaking, at the current stage, this is at 10% for the non-platform parcels, but this is actually quite good in terms of the overall growth, but not as good as that of e-commerce for China. Let's actually talk and expand about this point. In 2026, in Q1, the total number of reverse parcels contribute at 10% of the top line, and the overall growth is actually much faster. Overall speaking, in Southeast Asia markets and China, I believe that for non-platform parcels and the reverse parcels, the particular kind of profitability is actually better than those platform businesses, and this is going to be helping our overall bottom line. Pretty much, we are now encouraging this type of business which remain the same versus the past. Right. Thank you very much for the answer. Thank you. Now we have Oner Fion from CLSA. Right. Hello. Good morning, dear management. I have two quick questions. The first one is about the newly operation market and countries. For instance, when you entered the U.S. and European and other developed market, what kind of collaborations or what kind of business model are you going to have? You're gonna do business everything by yourself, or are you gonna do M&A there? Second question's about the shareholder return. This year, except for having the share buyback, any other incentives that you are considering this year? Right. Thank you very much for this question. Let me actually answer the question about the newly operationed market and countries. In that we are now seeing the three countries in EMEA and two in North America as new five countries. At current stage, we're now realizing the profitability in almost all countries. New business models have been used in those new countries and quickly helping us to actually ramp up. Now we do have a very good research and survey conducted in those local countries. At current stage, I think that it's a very good timing. Be it in the Middle East and the other potential overall countries, in the next one or two years of time, we plan to enter in those markets and expand our overall business. In terms of the business model, this is quite flexible. Of course, first of all, we are going to do 100% proprietary operation, also having some capital and business collaborations with some of our partners and business partners, in order to be very flexible. At the same time, while we are actually preparing for this operational market, we actually were still quite small. Now with the particular increase of our customers' requirements and demands, and definitely speaking, we're going to increase our overall investment there. When the final demand is getting up, we're going to have a much better situation. Second question is about the shareholder return. We had actually an incentivized plan announced last year. According to the dynamic changes of the overall market, the shareholder return will actually become a very important strategy of our company. At the current stage, we are at a rising momentum of the rapid expansion. Definitely speaking, we are going to have very good shareholder return plan in place. Right. Thank you very much for this answer. Next, we have Zhong Mingh u from Changjiang Securities. Hello, Dylan, Frank, and Haibin. Good morning. This is Hu from Changjiang Securities. I have two quick questions with regard to the Southeast Asia market. First of all, in terms of the parcel volume, Indonesia and Malaysia, from March, it seems that they have a certain decrease, receive some of the negative impact. I was understand that. What were the major reasons behind the overall growth decrease? From Q1 2026 standpoint, what is the overall trend of their overall growth? My second question is that we know that now because of the fuel oil cost increase, some of the civil servants started to actually work from home. We'd like to understand that. Do you think that is going to further stimulate the shopping online as an overall trend? All right. Let's actually answer the very first question. Normally, we don't pretty much comment too much on the monthly data shown by third-party platform. We are aware of that. Please pay attention to official data. If it is the overall trend, actually the March kind of a growth is weaker than the previous two months. This is because of mismatch, because Ramadan actually start earlier this year. Last year, March was actually better than the previous two months of the Q1. That is to say that we don't have that much of the impact, overall speaking in the Southeast Asia market. All right. Let me answer the second question. Just now you actually talk about the fuel oil cost increase and start to work from home, whether that actually increase the business of e-commerce or not. At the current stage, it is very difficult to actually answer that, but we have seen a mega trend. The per capita parcel volume in Southeast Asia is way lower than of China's, so there's still a very kind of a high ceiling there in Southeast Asia market. Be it the overall fuel cost is increasing or decreasing. There is big potential for business growth in Southeast Asia market. Right. Thank you. I don't have any further question. Thank you very much. I think that's all for Q&A section. Let's pass the floor back to Frank. All right. Thank you very much, dear investors and analysts of attending this meeting, and this is already a very good and thorough communication. If you do have any further question, please contact our team and stay tuned. Thank you very much.