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| Statement |
|---|
| Since the beginning of this year, we have observed a strong growth among our peer companies |
| Indicating that we have achieved the goal of improving quality of earnings to the level better than 2019 prior to COVID-19 pandemic |
| Better visibility and timely identification of the issue matched up with strong execution |
| We have quickly improved our ability to quickly adjust, solve problems and drive better results |
| The industry, the express delivery industries are accelerating their differentiation with leading companies having clear advantage in scale, capital strength and network stability |
| Implementing last-mile policies being the for increasing portion of individual parcels, which is what we're referring to is knowing eCommerce retail parcels and in five, strengthening last-mile capacity, building improvements in our ability to pick up deliver to door as well as meeting individualized needs of our customers |
| Together with effective corporate cost control, we raised the operating -- adjusted operating margin rates by 4.3 percentage points to 26.7% for the year |
| And then thirdly, at the appropriate location and time, we want to introduce commercial opportunities to our last-mile posts, so that they are also improving the quality of their earnings |
| Our strength today will serve as foundations for comprehensive competitiveness in the future |
| The trend of strong -- getting stronger is quite clear and quite obvious as industry concentration continues to increase |
| Our overall performance results were solid, and a particularly so in unit economics and total profit expansion |
| We hope to develop differentiated price as well as differentiated products, including timeliness product, reverse logistics, so that we can build early move advantages to really stand out with quality of services, because we believe that is the key to obtaining market share in the long run |
| And I think our fourth quarter results as well as our plan for 2024 clearly indicates that our strong belief first of all that price attained -- low price attained market share is not sustainable |
| There are positive growth prospects and earnings upside to the industry |
| Driven by increased automation and labor efficiency gains achieved through standardization in operating procedures and optimization of performance metrics |
| Through clearly defined roles and responsibilities and associated measurement metrics, labor efficiencies and the resource utilization greatly improved |
| National economic policies have been consistently supportive of Express Delivery companies to scale up and improved efficiencies and raise quality of earnings |
| The 40% payout ratio that we've announced, as we mentioned that in as the company achieved free cash flow, and we believe our cash generation will allow us to continue to generate strong free cash flow, we have clearly distinctly set ourselves up for a company with growth as well as return to our shareholders |
| So that we hope to pull away from the senseless price competition and become truly differentiated from the [indiscernible] group and with longer term and improved service quality and brand distinction |
| Focusing on the best being -- the best of ourselves is most important and feasible with strong cost advantage, better quality of services and timeliness in our services and better operating efficiencies |
| Fourth, enhance the accuracy and timeliness of data and analyses improved utilization of digitization tool to help enhance the effectiveness of operational management |
| Gross profit increased 12.8% to 3.1 billion for Q4, and increased 29% to 11.7 billion for 2023 as a combined result of increased volume offsetting ASP decline plus added benefits from cost productivity gains |
| And we believe that the emphasis is continuing on improving customer satisfaction and logistic experiences, which is consistent with what we've always been working on |
| The unit economics, if I may add to comment, everything is laid out in front of us as we further strengthen our productivity gain and supporting out network partners to grow last-mile, expanding their capabilities, we are able to attain our goal of continued profit expansion |
| Reduce last-mile delivery costs and improve productivity, help [indiscernible] to build out capacity and capabilities that fit well with that of our sortation hub; ensure couriers get to take home the lion share of the profit from incremental non-eCommerce packages they have to market at the end of 4Q |
| Third, improve service quality meeting in given -- individualized needs, improved timeliness of pickup and delivery including service to door, reduce damages and loss and stay on top of quality of service and customer satisfaction |
| Increase their active linkage to last-mile to reduce costs and improve delivery efficiencies, accelerate reduction of sortation frequency |
| And particularly so as we establish near 110,000 last-mile post, it is indeed to help not only our network partners to improve their quality of earnings, but most importantly is to help improve last-mile service quality to door delivery capability, meeting the demand individualized as well as customized |
| So in a longer run, this is a good thing for the industry as we are shifting towards more of quality of services |
| Our volume reached 8.71 billion parcels which increased to 32% over last year, or 4.8 percentage points above industry average and we achieved 2.2 billion of adjusted net income for the quarter |
| Statement |
|---|
| ASP for the Core Express Delivery Businesses decreased 18.2% or RMB0.27 for Q4 and 11.3% or RMB0.16 for the year |
| The low price market share obtained from low price is not sustainable |
| So what's management expectation on the intent of the competition? Have we seen the worst already or not yet? We have already seen a few smaller players has been competing less aggressively in this year compared with last year |
| ASP decline was attributable to a mix shift in KA volume, an increase in volume incentives and a lower average weight per parcel |
| Even though price stabilization and the increase has yet to arrive, the shift from high-quantity towards high-quality is the undercurrent that is inevitably taking shape |
| During the fourth quarter, we did not raise price as would take place in the past during eCommerce promotional period, given price competition and our readiness to process concentrated high volume |
| We continue to eradicate unprofitable volume |
| Do you think that could be the new normal or completion could escalate again as industry volume softened |
| SG&A expenses excluding SBC as a percentage of revenue combined, as a percentage of revenue remained low at 6.6% for Q4, and 5.6% for the year, as our corporate cost structure remain lean and stable |
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