Ladies and gentlemen, thank you for calling JD L second quarter 2026 results conference call. There are three parts of our session. The CFO will give you remarks, then we'll have the Q&A session, followed by the CEO closing remarks. Please note that the English simultaneous translation line will be in listen-only mode for the duration of the call, including the question and answer session. If you wish to listen to the management's original statement or ask a question during the question and answer session, you will need to dial into the Chinese language line. Now let's welcome Mr. Sung Chan, Head of Investor Relations team at JDL. Thank you. Good day, ladies and gentlemen. Welcome to our second quarter 2026 results conference call. Joining us today are our Executive Director and CEO, Mr. Wang Zhenhui, and CFO, Mr. Wu Hao. Before we start, we'd like to remind you that today's session will contain forward-looking statements, which involves a number of risks and uncertainties. Actual results and outcomes may differ materially from those mentioned in today's announcements and this discussion. The company does not undertake any obligations to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-IFRS financial measures for comparison purpose only for the definition of non-IFRS financial measures and a reconciliation of IFRS to non-IFRS financial results. Please refer to the announcement of the results for the three and six months ending June 30th, 2026, issued earlier today. For today's call, management will read the prepared remarks in Chinese and will only be accepting questions in Chinese during the question and answer session. A third-party interpreter will provide simultaneous interpretation in English on a separate line for the duration of the call. Please note that English translation is for convenience purpose only. In case of any discrepancy, management statements in the original language will prevail. I'd like to also remind you that you should always stick to the original language of the management statements. Now I'd like to give the call to Mr. Wu Hao, our CFO. Please go ahead, sir. Good afternoon, investors and analysts. I'm Wu Hao, CFO of JDL. Welcome to JDL 2026 second quarter earnings conference call. In the second quarter of 2026, JDL demonstrated solid operational resilience despite facing numerous external uncertainties. We still achieved high-quality revenue growth and a significant improvement in operating profit. This was underpinned by our steadfast commitment to our mission to drive superior efficiency and sustainability for global supply chain through technology as we continue to consolidate our core integrated supply chain business, firmly promoted experience in improvement and capacity building, further deepened our overseas strategic layout, and accelerate the scaled application of AI and automation. For this quarter, our total revenue reached RMB 64.10 billion, increasing by 24.3% year-on-year, of which revenue from external customers reached RMB 44.23 billion, increasing by 30.8% year-over-year. Non-IFRS net profit reached RMB 2.64 billion, with a net profit margin of 4.1%. Non-IFRS operating profit for the quarter reached RMB 2.34 billion, increasing by 11.6% year-over-year. Operating profit for the first half of year reached RMB 3.59 billion in aggregate, increasing by 39.9% year-over-year, reflecting the continued enhancement of our operating capability amid a complex environment. Next, I will elaborate on our revenue and profit performance. In terms of the integrated supply chain business, our integrated supply chain customer revenue for the quarter reached RMB 30.17 billion, increasing by 12.1% year-over-year. Of these, integrated supply chain revenue from JD Group reached RMB 19.88 billion, increasing by 11.9% year-over-year. This healthy growth was primarily driven by the fulfillment services we provided for Joybuy, JD's retail business in Europe, as well as our extended fulfillment services to support JD Group's growth of the [GEC] business with efficient penetration into lower-tier markets. Integrated supply chain revenue from external customers reached RMB 10.29 billion, increased by 12.5% year-over-year, with both the number of customers and average revenue per customer improving. Underlying this growth was the continued deepening of our integrated supply chain capabilities. First, we continued to extend across diverse platforms and business scenarios while providing customers with an omnichannel integrated supply chain solution. We also proactively capture new development opportunities in the instant retail market, leveraging our rich integrated supply chain customer base. We provide multi-industry customers with short-haul storage transportations and instant replenishment services, creating cross-selling opportunities. Second, we accelerated the extension of our supply chain capabilities into the B channel, building a channel supply chain system that covers more operational stages. At the same time, this is worth noting that as an important strategic direction for us, on the internationalization front, we replicated our mature domestic supply chain model in overseas markets, unlocking broad growth potential and driving graphic growth for our international business. In terms of other businesses, revenue from other customers, which includes express delivery, freight delivery, and on-demand delivery, reached RMB 33.93 billion for the quarter, increasing by 37.6% year-over-year. Leveraging service reputation and a brand image built through our integrated supply chain business, we encouraged our express delivery, freight delivery, and other products. For this quarter, both the revenue and volume of our express delivery business grew at a pace that significantly outpaced the industry average. Through refined resource allocation, we continuously strengthened our timeliness capabilities and the competitive edge, effectively driving the rapid growth of multi high-value business scenarios such as fresh food delivery and the certificate and document delivery. The growth of the high-value business in turn drove the sustained improvement in the profitability of our express delivery business. I will walk you through our cost structure and profitability in terms of the gross profit. Our gross profit for the quarter was 9.7%, down 0.9 percentage points year-over-year. This was primarily due to the fact that Deppon was still in the business adjustment stage in the first half of the year, which had a certain impact on the overall gross profit margin. It is worth noting that the gross profit margin of our original core business showed a steady upward trend. This demonstrates that in face of cost fluctuations such as energy cost triggered by the external environment, we relied on our operational resilience and technology-driven efficiency gains to continuously optimize the profitability of our core business. The following is an overview of our core operating costs. First, employee benefits expenses for the quarter amount was RMB 21.94 billion, increasing by 20.6% year-over-year, and employee benefit expenses accounted for 34.2% of the total revenue, down 1.0 percentage point year-over-year. This was primarily attributed to our consistent technology enablement and refined management, which effectively improved productivity. As of the end of June 30th, 2026, the total number of operational employees was approximately 311,000, including full-time food delivery riders. Second, outsourcing cost for the quarter. The amount was RMB 23.7 billion, increasing by 40.5% year-on-year, and outsourcing cost accounted for 37% of total revenue, up 4.3 percentage points year-over-year. The change was primarily due to the increasing outsourcing cost brought about by the consolidation of the crowd-resourced on-demand delivery business. Third, vehicle cost for the quarter, the amount was RMB 3.26 billion, increasing by 18.8% year-over-year, and the vehicle cost accounted for 5.1% of total revenue, down 0.2 percentage point year-over-year. The improvement in the change of the vehicle cost demonstrated that despite a fuel price fluctuation, we still achieved improved operating efficiency and effective cost control in the transportation stage through AI-enabled data-driven precise capacity dispatching and optimization of our capacity resource and structure. Fourth, rental cost. For the quarter, the amount was RMB 3.39 billion, increasing by 3.6% year-over-year, and rental cost accounted for 5.3% of total revenue, down 1.1 percentage point year-over-year. Through network structure optimization and site consolidation, we continuously improved the site utilization efficiency and through proactive negotiation initiatives in the market, we achieved further optimization of rental cost. Aside from the core cost item mentioned above, our business scale extended and our refined management level improved through technology enablement, depreciation, and amortization, and other costs as a percentage of total revenue declined by 0.1 percentage point and 0.9 percentage point year-over-year respectively. In terms of operating expenses, our total expenses for the quarter were RMB 4.09 billion, increasing by 14.9% year-over-year and accounting for 6.4% of total revenue, down 0.5 percentage point year-over-year. This reflected our continuously improving refined management abilities and expense control. Among them, selling and marketing expenses were RMB 1.69 billion, increased by 7.5 percentage point year-over-year, accounting for 2.6% of total revenue, down 0.4 percentage point year-over-year. As a percentage of external revenue, it was 3.8%, down 0.8 percentage points year-over-year, as we progressively invested in resources such as selling and marketing personnel to promote business growth. The R&D expense was RMB 1.21 billion, increasing by 20.1% year-over-year and accounting for 1.9% of total revenue. We continued to increase our R&D investment, focusing on the self-development of core technologies for logistics scenarios and continuously consolidating our technology foundation to provide sustained momentum for the long-term improvement of operating efficiency. General and administrative expenses were RMB 1.11 billion, increasing by 19.9 percentage points year-over-year, accounting for 1.7% of total revenue, down 1.1 percentage points year-over-year. In terms of the net profit, the overall non-IFRS profit for the quarter was RMB 2.64 billion, increasing 2.2% year-over-year with a net profit margin of 4.1%. We also continue to monitor our capital position and the cash flow to maintain a healthy and adequate financial position to support our core business development operating needs. For this quarter, free cash flow net of lease payments reported net inflow of RMB 2.15 billion, of which cash flow from operating activities net of lease payment was RMB 3.6 billion, and the capital expenditures were RMB 1.44 billion. Capital expenditures for the quarter were primarily focused on domestic and overseas automation equipment, as well as self-operated vehicles and other assets. Through continuously optimized asset allocation, we continue to enhance overall operating efficiency in terms of our shareholder returns. Since we announced a share repurchase program with an aggregate amount up to $1.2 billion in May 2026, we have actively advanced the execution of the repurchases. As of June 30, 2026, we have cumulatively repurchased 33.26 million shares. This demonstrates our determination and effectiveness in execution, our firm confidence in the long-term prospect of JDL, and our commitment to creating value for our shareholders. This concludes my remarks. Now let's move on to the Q&A session. We will only receive Chinese language, and we will also answer in Chinese. Okay, now we can start the Q&A session. Now let's move on to the Q&A session. If you have any questions, please press star and then one to give your questions. If you want to ask questions, please press star and then button one. The first is from Goldman Sachs, to Dee Yutill, please ask your questions. Thank you. Thank you so much for your presentation. My first question is about our international business. We think that we have acquired external customers. Can you give us an update on international business and what to look forward into the business development? Secondly is about the logistics technologies. We see the robotics technology has been built and established. Now we have also humanoid robots. My question is, your use of robotics technology in your warehouses and your solutions in terms of the robots, how you are going to sell these technology externally? I am the CEO, Wang Zhenhui, from JDL. I will answer the two questions. First is by international business, especially the stress. In Q2, our international business developed really fast. Healthily relied on 26 countries, over 2 million square meters of overseas warehouses. We are accelerating the overseas warehouses network encryption. Now the fulfillment efficiency and also the digitalization of our supply chain has been enhanced to improve our overall business performance. Europe is our core market, driven by fulfillment. By market categories, we can say Europe is a really large market for our e-commerce business. The local customers have high requirements on high-quality fulfillment services. In the first quarter of 2026, we built the encryption service network for the warehouses in Europe, covering U.K., Germany, Belgium, Holland, and Luxembourg. These are our core markets. We provide the best service for small and medium-sized parcels. In other areas, we also provide the second-day delivery to these small and medium-sized parcels. In terms of the external customers expansion, the fulfillment capabilities and the brand image are also being enhanced. We want to promote Chinese products to overseas market. We want to work with also local customers in different overseas markets. In the first half of 2026, we work with top brands in electronic markets in Europe, and our business cooperation more than doubled. Some customers want to have the warehouse business for us. They also want us to take care of the fulfillment business. In Poland, we are also expanding our cooperation with top brands. Our goal is to achieve the benchmark effects for some cleaning equipment and small electronic devices segments. We are also enhancing our exploration in Asia, Pacific, America, and the Middle East. We are laying out our business gradually. We want to focus on the consumer electronics, furniture, and also the home- use equipment. We will work with local brands and also Chinese brands overseas to enhance cooperation in all different regards, including the delivery, fulfillment, and warehouse. We are also moving the integrated supply chain network to different markets, but with localization and differentiation according to the characteristics of a market. With the implementation of our service products and also the reputation building around our brands, we are going to have a more mature supply chain network across the globe. We are going to become the first choice of Chinese business going overseas. This will drive our business, grow continuously. This will be our second growth trajectory. The second is about our intelligent product. In terms of the logistics technology, we are enhancing our investment. We are now opening our logistics technologies to external users, and there are several parts of it. First, in terms of the operation and the fulfillment, we will have customized the product for intelligent parcels, and we will use it on books, also the clothes. This so-called Metabrain or Logistics Metabrain or Logistics JINGDONG system will be used elsewhere and cover different segments. We have also been working with some supermarkets and also a lot of large brands. We introduced the Metabrain large model, the JDL Metabrain System too. We are also trying to commercialize such solutions to more users from internal use to external use. There is a process to take. Our automatic equipment selling channels have been built. We will sell such equipment and solutions to not just the Chinese customers but overseas customers. We just assigned a contract in Q2 with a Japanese medical brand and also aesthetic medical brands. We provide such automatic equipment built by ourselves, providing them a comprehensive solution, including delivery, fulfillment, and intelligent supply chain system. We are also trying to build a more organized structure for our intelligent network. With the technology used in our system, we are going to serve more customers and become the benchmark model for such a system, and it will be more accepted by users around the world. Automated equipment have been welcomed by more and more users. This has already become the standardized equipment used in their warehouses. We have more than 10 years of an accumulation in warehouse equipment, automated devices. We know the pain points of our users, and our technologies equipment devices will be more AI-empowered to output more certainty in terms of use stabilities. We will also have an intelligent upgrade of our system and solutions. This market is really highly demanded around the world. We will seize the opportunity of intelligent supply chain and to turn this growth trajectory, our driving force for the long term. Thank you very much for your answer. The next question is Thomas Chong from Jefferies. Hello, everyone. I have two questions. The first question is about integration. I'd like to know the revenue growth across 3C, car, clothing, and more market segments. The second question is about number of external users and ARPU. For our existing customers and future customers, what are their ARPU? Can you also share with us your progress in AI technology? Thank you. Thank you very much for your question. No matter about integrated supply chain or AI technologies used, they're all the core business we now embrace. The first is about integrated supply chain we promote. In Q2, the external integrated supply chain users grow at double digits in terms of the number of users and also the utilization of products. This really proves the deepening of our interoperability and also the barrier we built. We are now extending our business to more industries. I can say, for example, home appliance industry in Q2, we worked with a lot of brands in home appliances by providing integrated supply chain solutions. The brands working with us now can operate their sub-brands. In terms of FMCG, we now try to move into the segments with high requirements of laws and compliance. In the second quarter, we've also extended our business to a lot of high-level e-commerce businesses. We provide not just a warehouse service but also comprehensive supply chain. We've been approved by FGS to meet the highest standard of food industry in Europe. This laid a solid foundation for us. In terms of 3C industry, the fulfillment service, automated equipment are combined together. We have more cooperation with operation agencies of supply chain networks. This really helped to increase the automation rate of our warehouses for our customers. In automobile industry, we covered heavy-duty trucks, especially the exporters of spare parts for heavy-duty trucks, including the airbags and more components. For existing customers and the new customers, the ARPU. In Q2, we did the calculation. Our integrated supply chain business customers' structure is being optimized. The proportion of high-net-worth customers has increased. We see the double-digit growth of the revenue from these premium customers. In terms of existing customers, the core high-value customers also increased in proportion. We see the average revenue income from the million-level customers has increased. We are also adjusting the customer structure to improve the premium customers' percentage. We are also signing new contracts with customers. As more customers become higher-level customers, we build our own moat, and we've deep cultivated the niche segment. The ARPU will be increased robustly with the increase of number of high-net-worth customers. We are confident to extend corporations with premium customers, and such optimized structure will help us to gain momentum in the growth of an integrated supply chain business. About AI technology you are concerned about, in Q2, we are expanding our R&D of AI technology, expanding our business, enhancing our technology use. Supply chain is the scenario where AI can be used the most. We've built three layers. At the foundation, we use a Metabrain model. We use an AI agent to schedule vehicles and make decisions in terms of the productivity, resources allocation, and also the long-term robot. Now, work with the AI software to provide a better performance. We now also use AI hosting on automated approval at the first layer and also on-demand scheduling. In the first half of 2026, we have already seen quite significant improvement in terms of efficiency and AI uses. I can give you several examples. In terms of the warehouses, we have now rely on AI for scheduling and dispatching. AI now is guiding the operation of warehouses to make the pickup, sorting, and other core links improve in efficiency. In terms of the transportation, we use an AI intelligent dispatching system to replace human dispatching. Now we can guide vehicles in a flexible and intelligent way to meet capacity requirements. In terms of the efficiency per capita and the efficiency of dispatching, we all see quite significant growth, double-digit growth. Also, LangzuTech is so powerful. We see the LangzuTech Packer AI robotic arm through force control technology upgrades achieved a 24-hour normalized unmanned operation and effectively accommodated the business peak during the 618 Grand Promotion. Through the handheld PDA and the AI agent combination, our first liners and our station head can all see their workload reduced. In terms of the AI recognition of picture, we now can recognize the competitor's products to reduce the cost of our frontline workers. The head of stations and the AI agent can automatically push abnormal parameters to increase the efficiency of human beings. In terms of the customer service, we now promote AI hosts to make AI automated review, and the second review of human beings combined together to increase the efficiency of our frontline workers. All in all, AI is used in the dispatching, sorting, reviewing, reported allocation can be seen in large scale, driving the efficiency of operation and optimization of the cost. In the long term, we'll continue to rely on our technology advantage of JDL to extend more application scenarios for the sustainable growth of our business. Thank you. Thank you. The next question is from Sam Tao of American Bank. Thank you so much. Our CEO and CFO, Mr. Wang, just introduced the domestic business and overseas business. I still have a question about our express delivery. We see in the first quarter, it's under a bit pressure. I'd like to know the second quarter's forecast. I'd like to know the overall revenue. How do you see the growth rate for the second half of 2026? Face with the competitive external environment, with our own mode of integrated business, we are very confident that our growth will be healthy, sustainable in the long term. We are exploring high-quality opportunities in the market. The super-fast delivery services, including the express delivery and the freight delivery and on-demand delivery, will increase in great volume. But in the second half of last quarter, the second delivery or the instant delivery will be under a little bit pressure. The integrated supply chain business, like we just pursue this one inventory philosophy. We will cover more B customers and see the high growth of overseas integrated supply chain business. The express delivery will be focusing on high timeliness and to enhance our foundation to really expand these high premium customers. We are going to outperform our competitors in the industry. We'll keep optimizing the product structure to find more space for margin growth. In terms of the freight delivery, we have a reasonable guidance for the second half. It will go into a steady growth. We will see the freight delivery will see steady growth, and we are expanding into the premium segments. We also see the B customers' fulfillment service from us has been enhanced greatly through multiple brands complementation and network service we provide. The freight delivery business will enter into a stage of high-quality development. We just talk about on-demand delivery, express delivery, and freight delivery. We are very confident the three business will see quite steady and a robust growth. The next question is from Citibank. Lu Izon, please. Good evening, management. I'd like to know the profit growth in the second half. We know the second quarter's profit growth. Also the express delivery business, I'd like to know the trend of its growth, because now we see the industry of express delivery has slowed down. I'd like to know your side of the story. Thank you, Brian, for your question. In terms of the profit, we are very confident we are going to follow the trend in Q1. We think our operational efficiency can be increased, and the cost and structure will be optimized. The operating margin will be further improved in the second half. The improvement stems from the adjustment of our Deppon business. In terms of the month-over-month performance, we already see some positive results. In the second half, Deppon business will be on the track of recovery. Our own business, including all the business we just mentioned, we have a long-term investment in the technology, optimizing our cost, and enhancing our efficiency. The international business has been expanded. These will also inject a momentum into our business growth. Our net profit margin will also see quite good improvement because of this. About our express delivery, we just mentioned in the first half, the delivery growth rate is above the average of other industry, more than double the industry average. In the second half of 2026, our high growth rate of express delivery will be secured. Now the industry enters into a mature stage of steady growth. JDL, with years of capability establishment, our network establishment, the product capability, and the supply chain system building all outperform our competitors. This year, you can see our delivery products have been improved in profit and revenue. This trend will continue in the second half of 2026. We will use the advantage of integrated supply chain system to empower our express delivery customers. They will enjoy the integrated products we provide. We hope the integrated supply chain will grow at the fastest speed. Thank you. In the interest of time, that's the end for the Q&A session. Now we will invite Mr. Wang Zhenhui to give us closing remarks. I'm the CEO of JDL, Wang Zhenhui. Thank you very much for your question. Our CFO, Wu Hao, already shared with you our data for quarter two. Now we're in very complex international environment with the saturation of the energy industry and really fierce geopolitical frictions. JDL is using our own advantages to offset the macroeconomic pressure and improve our operating revenue and profit. Such stable business performance is the result of our enhancement of an integrated supply chain and a deep cultivated business internationally. I'd like to share with you our core operating outcomes. I also like to share with you the future business growth. In terms of the integrated supply chain, this is our core competitiveness. With this deep change of the consumption landscape, we see the brands have the demand of cost reduction across all channels and supply chain. Through integrated supply chain, we have helped our customers to see tangible results in terms of the optimized fulfillment cost and the good flow efficiency, while also achieving high quality growth ourselves. Second, internationalization is an important engine for us to unlock future incremental growth. We are firmly seizing the opportunities brought by the structural trend of Chinese brands and supply chain going global to cultivate our express delivery brands in Europe and other markets. For this quarter, our only express delivery brand, JoyExpress, continued to extend its network densification across multiple European countries, including U.K., Germany, Netherlands, and France, providing strong support for the vigorous expansion of Joybuy business. Leveraging our mature supply chain operating experience and our increasingly comprehensive overseas warehouse network and fulfillment capabilities, we have become the preferred logistics partner for many Chinese go-global brands. Our overseas external business also maintain the rapid growth. Our overseas business is poised to become an important second growth curve for JDL. At the same time, with the deployment expansion of overseas warehouse automation and the increase in order density, the operating leverage of our overseas network is beginning to show, driving the continued optimization of the unit economics of our overseas business. Third, I'd like to emphasize JDL investment in technology and the mode we have both. We believe AI and automation will accelerate the reshaping of the logistics industry. Technology, combined with broad application scenarios, constitutes JDL's core advantages. We have the broadest range of operational scenarios and the most complete operational chain in industry, which allows our technology to be truly deployed at scale across all stages, regions, and scenarios of a supply chain. To this end, we have always treated R&D investment as an important driver of long-term development, and we remain steadfast in our technology investment and our deep cultivation of an underlying innovation. These long-term investments are gradually being translated into tangible productivity. Empowered by the Metabrain large model, we have achieved the end-to-end intelligent decision-making across the warehousing, sorting, and transportation and distribution stages. At the same time, our self-developed LangzuTech series for robots continue to be promoted and deployed across all scenarios. The LangzuTech goods-to-person, GTP solution is being rolled out across more than 30 warehouses in the U.K. and Germany, especially. We'll optimize the operating cost and structure of overseas markets with a high level of automation. The LangzuTech Packer AI robotics arms to enforce the control technology upgrades, achieve the 24-hour normalized online operation, effectively accommodating the business peak during the 618 Grand Promotion. The LangzuTech Drone built an efficient village-level delivery network. The scaled deployment of these technologies, driving the gradual release of room for improvement in our operating efficiency and cost structure, continuously consolidating our long-term competitive advantage. At the same time, it validates our ability to export our self-developed automation technology to overseas external customers, advancing the upgrade of our supply chain capability from internal operation to technology export. Looking ahead, we will continue to firmly focus on our core integrated supply chain advantages, strengthen our supply chain infrastructure and network with the global competitiveness, and build a high-quality second growth curve. At the same time, we will remain committed to our technology-driven mission, continue to increase our R&D investments, and build an even more solid long-term mode. We will continue to create value for our customers, reduce total social logistic cost, and ultimately deliver high-quality, sustainable long-term returns to our shareholders. Thank you. That concludes my remarks. Thank you so much, Mr. Wang Zhenhui. Thank you very much for your participation. That is the end for this session. If you have more questions, please contact our IR team of JDL. Thank you.