Q & A Highlights

Q: Could you share ZTO's high-level strategic thinking on digitalization and AI, including specific use cases in operational workflows and where they have been implemented? A: Meisong Lai, Chairman and CEO, explained that AI's core value lies in leveraging data from over 100 million daily data transfers to continuously optimize network-wide costs, creating a self-reinforcing loop of lower costs and higher efficiency. AI now runs through the entire chain from pickup to delivery. In transportation, the proprietary intelligent routing and dispatch system covers six common scenarios, with route-coordinated parcel volume growing 120% year-over-year and stranded parcels falling 15%. In the first half of 2026, AI-driven cost savings accounted for about 10% of total transportation cost reductions. The Smart Park system covers all transit centers, flagging 28 types of anomalies, improving unloading efficiency by 4% and anomaly traceability coverage to 88.4%. The proprietary data agent serves over 2,000 managers, cutting routing analysis time by more than 90%. On the outlet side, the precision address system covers over 250,000 frontline couriers with 99.98% building-level location accuracy. More than 90% of merchant inquiries are now resolved through AI self-service, and customer satisfaction has risen from 80% to nearly 90%.

Q: What is the current daily volume of retail parcels and reverse logistics, and what is the implied year-over-year growth? What are the targets for the peak season this year and next year? A: Meisong Lai, Chairman and CEO, stated that in the second quarter, average daily retail parcel volume exceeded 11.87 million, of which return parcels averaged approximately 9.8 million per day, increasing approximately 80% year-over-year. Although the price of reverse logistics parcels has declined due to market competition, per-parcel profitability is expected to continue improving, supported by economies of scale and refined cost control. Reverse logistics parcels still generate higher per-parcel profit than standardized e-commerce parcels, effectively lifting overall profitability. The strategy remains clear: seeking high-quality services, high-quality market share, and improved door-to-door service capabilities, with reverse parcel volume continuing to be a main driver for product diversification and profitability gains across the network.

Q: What is the potential impact of the gradual implementation of full social insurance contributions for couriers on costs and operations? Does the industry have opportunities to pass through cost inflation via price hikes? A: Meisong Lai, Chairman and CEO, noted that regulators' plans to advance a multitiered social security system for flexible work arrangements, including express delivery personnel, aim to standardize employment practices and protect frontline workers' rights, which are consistent with ZTO's core beliefs. The policy adopts a stepped rollout approach, with social insurance enforced for formal employment relationships and occupational injury protection expanded for flexible workers. ZTO welcomes the regulatory guidance and is actively helping network partners address challenges related to unique flexible work arrangements. While the rollout of standardized social security initiatives will inevitably bring end-to-end cost increases in the foreseeable future, complete coverage will strengthen network stability, reduce courier turnover, and reinforce last-mile service quality over the long run.

Q: What are your insights on the industry's second-half growth outlook and ZTO's strategic plan? What is the cost guidance and sensitivity to oil prices? A: Meisong Lai, Chairman and CEO, stated that as anti-evolution policies continue to take effect, the industry has shifted away from price-led scale expansion to quality-driven development. Parcel volume growth for the entire industry is anticipated to be at a stable level. ZTO remains committed to a sustainable long-term mindset, focusing on increasing outlet profitability, rising courier income, and healthy profit growth. Strategically, the company will continue focusing on growing effective market share, building differentiated service capabilities, and advancing end-to-end lean operations. Huiping Yan, CFO, added that rising fuel prices impacted per-parcel transportation costs by approximately RMB0.02 in the second quarter, but efficiency initiatives offset this, with combined unit transportation and sorting costs declining by RMB0.02. The company expects fuel prices to continue weighing on per-parcel transportation costs by about RMB0.01 to RMB0.02 in the second half. ZTO expects core costs in transit operations to decline by RMB0.03 for the full year, with greater emphasis on end-to-end cost reduction through digital tools.

Q: Can you provide more details on the second-quarter financial performance and the updated full-year guidance? A: Huiping Yan, CFO, reported that parcel volume grew 6.5% to 10.49 billion, with market share expanding by 0.4 percentage points. Total revenue increased 23% to RMB14.5 billion, while operating income rose 30.4% to RMB3.23 billion. Adjusted net income grew 50.3% to RMB3.1 billion, benefiting from a RMB344.3 million tax refund as a wholly owned subsidiary qualified for a 10% preferential tax rate for tax year 2025. ASP for core express delivery rose RMB0.19, or 15.5%, driven mainly by increased KA volume mix and higher average weight per parcel. Gross profit increased 26.8% to RMB3.7 billion with margin expanding 0.8 points to 25.7%. Operating cash flow totaled RMB4.6 billion, and adjusted EBITDA increased 20% to RMB4.2 billion. Capital expenditures for the quarter totaled RMB952 million, with annual CapEx anticipated around RMB6 billion. The company updated its full-year parcel volume growth guidance to 6% to 10% year-over-year, representing a range of 40.83 billion to 42.37 billion parcels.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .