According to the Zhitong Finance App, Zhongtong Express - W (02057) announced results for the first quarter ended March 31, 2024. Revenue was 9.96 billion yuan (RMB, same below), up 10.9% year on year; net profit was 1,448 billion yuan; adjusted net profit was 2,224 billion yuan, up 15.8% year on year. Basic net income per ADS share was $1.77; adjusted basic income per ADS share attributable to common shareholders was $2.74. Net cash flow from operating activities was $2,031 million.

The number of parcels was 7.171 billion, up 13.9% from 6.297 billion in the same period in 2023. As of March 31, 2024, the number of pickup/delivery outlets was more than 31,000; the number of direct network partners was more than 6,000; the number of self-owned trunk line vehicles was about 10,000; the number of main line transportation routes between sorting centers was about 3,800, similar to the same period last year; the number of sorting centers was 96, of which 88 were operated by the company and 8 by the company's network partners.

Based on current market conditions and current operating conditions, the company reiterated that the volume of parcels is expected to be between 34.73 billion and 35.64 billion in 2024, an increase of 15% to 18% over the previous year.

Mr. Lai Meisong, founder, chairman and CEO of Zhongtong said, “In the first quarter of this year, the volume of the industry increased 25.2% year-on-year, far exceeding expectations. The booming development of new live e-commerce and social networking platforms has, on the one hand, stimulated public online consumption and led to an increase in express delivery business; on the other hand, it has also contributed to an increase in the proportion of e-commerce items with low unit prices. At the same time, competition for express delivery prices has further intensified, especially in grain-producing regions. The share of unprofitable or even loss-making shipments in the industry has increased. Zhongtong has maintained healthy profit growth by adhering to the bottom line of 'no loss-making express ships'. Although the volume market share has declined compared to the same period last year, our profit market share has further increased, proving the effectiveness of our strategy.”

Mr. Lai added, “Zhongtong's consistent strategic goal is to maintain balanced development in the three areas of service quality, business scale, and profit. At the beginning of '24, we shifted our strategic focus to service quality. While maintaining a reasonable business scale and good profit level, we paid more attention to creating differentiated products and services to meet the diverse and personalized needs of customers and enhance consumers' awareness and recognition of the Zhongtong brand. The shift in express delivery in China from high quantity to a combination of quantity and quality is an inevitable trend. We put service quality first, break through homogenized competition, upgrade the product structure, improve the profitability of outlets and small parts workers, and build a moat for Zhongtong's continuous development.”