J&T Global Express Limited (1519) Earnings Call Transcript & Summary

Hello, and welcome, everyone, to attendance J&T Express 2026 Q3 Business Update Conference. This is Dina. Presentation materials for the meeting will be distributed via e-mail and uploaded to our IR website. Joining us today from the management team are Dylan, CFO of J&T Express; and Haibin, Director of Investment and Capital Markets. The session will consist 2 parts. First, Haibin will introduce the company's business performance for the third quarter of 2026. And next, we are going to proceed to the Q&A session. The management is going to be answering your question. Now, over to you, Haibin.

Hello, and good morning, everyone. Thank you for joining GT26 Q3 operational results presentation. Now I'm going to be walking through the performance of the quarter. The group's total parcel volume in Q3 of 2016 reached 9.584 billion pieces, representing a year-end increase of 24.8% and average daily parcel volume stood at $104 million. Average possible volume exceeded 100 billion pieces for 2 consecutive quarters, and our leading position in Southeast each market remains solid. The market share and industry ranking in China market has further improved whereas the Latin America standing in particular. With the rapid growth of the business volume in Southeast Asia and other markets, the proportion of parcel volume from other markets outside of China reached 33% in Q3, representing a year-end increase of 5.6 percentage points. Please allow me to talk about the Southeast Asia. The total parcel volume in Southeast Asia in Q3 reached 2.88 billion pieces with average daily parcel volume of $31.4 billion million, representing a year-end increase of $44 which is against the very high base of the same period last year. First of all, e-commerce industry in Southeast Asia is still on track of rapid penetration. Macroeconomic fluctuations have not altered the long-term growth momentum. We have been seeing also continuous investment locally, launching promotions and shipping and campaigns. At the same time, we've been seeing the very good dividend of the e-commerce. At the same time, we've been seeing also the merchants and product categories driving high growth for both e-commerce clients and company. At the same time, the company keeps expanding the regional network capability and for fill capabilities and a balance in automation upgrade service outlines and further lift automation levels. At the same time, we have been robusting the network capabilities and the price advantages and widen our gap versus our competitors. Last not least, we have the strategy of developed non-platform parcels with a continuous improvement in the product planning capacity via service quality and brand influence, non-platform parcel also grew. Next, in China. The parcel volume in China in Q3 reached 6.42 billion pieces with average depositive volume of 69.9 million pieces, representing our increase of 15.3%. In China market, we outperformed the underaverage, Industrial registered a growth of 4.6% from January to August of 2026. The growth focus on China industry has shifted from pure pursuit of parcel volume into the sustainable growth in terms of scale and quality and efficiency. Year-to-date, our possible volume growth in China is very steady. At the same time, we have session on the network expansion, improve timeless service quality and cost control abilities and boost technology empowerment. At the same time, we improved the satisfaction level and stickiness of the customers and branded mention on premium and brand customers have improved markedly. We also kept optimizing the customer follow diversified customer resources, targeting consumers in a higher volume and high-value categories such as parcel, the apparel, beauty and 3-seat products as well as the niche markets, including specialty agriculture and the others. Also, we have a very good growth year-by-year. And also focus on the higher growth of the quality as well. Other markets, the parcel in the other markets in Q3 reached 271 million pieces with an average daily post volume of 2.9 million pieces representing a year-on-year increase of 159%. The positive growth in our markets raise has been realized in 7 consecutive quarters in terms of the growth. And also, we have several overall reasons. First of all, the hyper capital GDP and consumption levels, yet e-commerce penetration remains low and for cable parcel volume is far below that of China and South Asia, leading to a very good ample room for the further potential growth. And also, we have local e-commerce penetration is rising steadily as well as the subsidy and promotions. Second of all, we have been seeing the company continues to expand in their operational expertise from China and Southeast Asia market and other markets. At the same time, we've been seeing a delivery efficiency to be improved, lifting overall network efficiency and enable the company to capture the e-commerce and cross-border logistics opportunities such as Latin America and Middle East. At the same time, our quality of service and capacity in the Latin America has been recognized by customers and our partners have been also showing a very good collaboration and also performance, including TikTok, Shein, Temu, et cetera. And also, we've been a continuously broadened business footprint in emerging markets. And we kept expanding into the country with Latin America and actively entering the countries such as the Europe and the United States and brought further parcel volume growth. And also in shareholder return, on company continue to reward the shareholders with the buyback. As of 30th of September, we have already repurchased the 267 million shares since listing and buyback reached HKD 2.2 billion in total. Also, the HKD 1 billion buyback maintain mandate approved by the Board of Directors and we have been seeing a HKD 0.86 billion executed on 25th of June of 2026, we've announced the approval of a new buyback program, raising the buyback limit of HKD 2 billion at the end of the September, HKD 0.77 billion have been also executed. At the same time, you are paying attention to our performance. We outstand that you're closely interested in Q3 of financial results. Regarding financial figures, the company only discloses the semiannual and annual reports. Therefore, the company generally does not update the performance guidelines and as the quarter basis. And the guideline is still the same and valid since the August and exchanges is only limited to operational data, and we will not discuss the financial figures. Thank you. Now we're going to open up for questions.

The first question is from Zhu Yubo from Caitong Securities.

My question is that you've been actually delivering a very good performance than the guidance that you have just provided in the beginning of the year. what is outstanding is the new merger markets and new markets as well as the other markets. So in these 2 regions, we've been seeing a very rapid growth right to understand the major reasons behind? And what is the major driver behind? At the same time, under the such high base in Southeast Asia, you enjoy such a high growth as well. So in terms of the overall structure, would you like to expand further with us? All right.

Thank you very much, Mr. Zhu, for joining our conference call. as what you can see here in the Southeast Asia market, we have been seeing a very wonderful performance, as always, as I have already said that the macro economy and the macro trends stay the same. At the same time, we've been also enlarging our gap with our competitors, and we've been seeing more dedication and investment from the platform. We've been seeing very gladly that since this year for some of the new and the merchant e-commerce platform or those just general perform, the e-commerce platforms in Southeast Asia have been accelerating their growth using direct operational business model. And then we enlarge the customer base in Southeast Asian market, bringing with these new opportunities for the growth. These are some of the new changes of Southeast Asian market. Also for the new markets and emerging markets, as you can see that we've been investing a lot and enlarge the overall growth. This is a blue SEA market as we believe that the per capita base volume is still on the track of the growth. At the same time, we're making a very good destination and dedication. So in Q3, in Latin America market, some of the other regions, while we are improving our capacity, we are also improving the quality of service as well. So there is a demand, and we are able to have a very good fulfillment of the contract and also the performance so that we are been enjoying because of those benefits and because of those efforts in joining the dividend. Okay. And next, I would like to talk about China. You can see that this is than the overall industry average. We've been doing a lot of work here in China as well. in terms of the franchisees and in terms of the quality improvement of the point of service, we have been implementing solutions to solve the pain points and improve our match among the customers. At the same time, you can see that in terms of the network and also the particular franchisees, we empower them with them, for instance, point-to-point help and the facilitation in terms of management, et cetera, upgrade their overall capabilities, at the same time, enhance our network capabilities as well. We are benefited because of these efforts.

And now we have the question from Brian Gong from Citi.

First of all, I would like to congratulate on such a wonderful performance and data. So I would like to understand the China region. Now we have been enjoying very good growth at the same time with such a one-off growth and the overall volume growth we can see that this helped the overall performance to be further increased for the whole year. And now what is your expectation for the peak season? And next is about the emerging and new markets right to understand that is it possible, free to talk to us about this exploration progress in the new markets?

Of course. Thank you for this question, let's talk about the China region. You can see that in China, we've been growing a lot in terms of the parcel volume -- and you can see that since the beginning of the year, and our government and regulators are actually on the anti evolution campaign because of the increase of the oil price, we've been seeing a little bit of price increase in the beginning of the year. In the later part of the year, this anti evolution as a major direction remain the same and steady. At the same time, we've been seeing some of the news that in Guangdong, [indiscernible] Hubei province and Shanxi province, they've been having internal meetings in the industry and emphasizing on significance the pricing stabilization. So I believe that this is pretty much helpful to the profitable guarantee of year 1. And at the same time, you can see that we're going to give announcements of the financial figures by regions, but still in terms of our peers, they're actually having very performed performance, and we are pretty much enjoying the dividend with such a good growth in Q3. At the same time, we are actually making readiness of preparations for Q4 in terms of the peak season. in terms of capacity and also the service quality. I believe that this is going to be of great help to our peak season performance. In terms of the new market, I believe that Dylan is now in Europe. So probably we can have Dylan answer the question related to the new markets.

Of course, not a problem. This is Dylan speaking for this question. At the current stage, as I have already said that we are now still making efforts in actually preparing for explorations of the new markets. In the first half of the year, we've been seeing actually a new area of South America been explored. And now we are preparing for Germany and the U.K. as the 2 countries in Europe and preparing for the network. So overall speaking, the demand is pretty huge. And if you're talking about the South America and the Middle East and the Southeast Asian markets also are trying to position their services and product sales in Europe. We are coping with these customers from Southeast Asian market, for instance. And also, we are going to build up our overall network coverage according to the total volume required and monitor by our customers. So this is actually Phase 1 of our exploration in new countries. In the second phase, we are going to have even asset-light weight to actually further help to work with some of the delivery service points to be our franchisees. So at onstage, we're still at the Phase I in trying to hire the terminal kind of career service providers. And I believe that this would be most efficient way in terms of the collaborations in the new markets, be it the Colombia that we are preparing for the first half of the year. And then we have the U.K., the Germany, these new countries in Europe, we are actually using this business model and collaborative model.

Next question is from [ Elmer Pan ] from [ Lin Shan].

So today, my question is we're still having another 2 months ago for 2026. As for the growth decrease in last outs and the acceleration of the growth in Latin America, probably it's difficult for us to expect for the next year of these 2 markets, would you like to talk to us about the overall opinions of the growth rate expected for 2027 for Latin America and Southeast Asian markets?

All right. Thank you very much, Elmer, for this question. As for the expectation and outlook of next year, according to Principal, we're going to do that during this annual performance announcement of 2026. But I would like to talk to you about the overall opinion. So just now you said the growth reduced in the Southeast Asian market actually is not a correct word. We're still growing a lot in Southeast Asian market. And you know that the base number of last year was very high as the region with tens of millions of process on a daily basis, if you want to actually maintain a very, very -- of very high growth. This is not scientific so we're still having a very quick growth in Southeast Asia market. As what's said in the guidance, and this year, we are going to have 50% to 55% of the growth as the overall guidance of this market. hopefully that we're going to reach to the upper limits and giving you a better response. Next one is that for Latin America, as we have already provided guidance, we are upgrading this overall expectations to 100% and 120% growth for the Latin America. And as what we have just now offered, it is a very strong growth in Latin America. We have a younger population with a better portable GDP and also better consumption habits. Now in the news, be it we're talking about the Brazil or Peru. We've been seeing actually the new infrastructures of the ports that are going to be built and constructed have everything to do with the help of Chinese government. And if that's the case, we're going to have better and more Chinese goods exported to Latin America this is going to be improving the overall figure of the per capita and the average daily parcel. And second and third of all, you can see that the overall kind of growth momentum and the environment in Latin America is going to be better than the Southeast Asian markets. We have been absorbing a lot of experience in South Asia. And matter for the nonplatform also was a collaboration with the local kind of partner, for instance, e-commerce platform delivered in Latin America, they've been emphasizing more on a collaboration with us. At the same time, we are also trying to improve our capacity there and further invest in Lima. This is going to be a full year fulfilling our overall target.

Next question is from Liu Gangxian from CICC.

Now I have a question just now in the conference call, as you have already mentioned that for the non-e-commerce platform, I mean, non-e-commerce a business I'd like to understand the overall situation. Are you going to talk about some of the percentage of the non-e-commerce parcels from Southeast Asia? And for the next several months, what is the overall target of the overall growth?

All right. Thank you very much, [ Gangxian ]. Let me answer this question for you. As what has been just now mentioned, in Southeast Asian market, the marginal growth is pretty good. the primary reason, as we have already indicated that in the road show that -- and now talking about this [indiscernible] while they are getting connected, they actually provided a lot of support in terms of the marginal growth for the platform parcels. And for nonplatform parcels and businesses, we've been making efforts as well. So for the non-platform parcels, we are actually getting very good explorations of the key accounts. In terms of the overall growth, this is going to be less intense than the e-commerce itself, but still would be seeing a volume growth and very good momentum as well. At the same time, we are actually trying to optimize the infrastructure building. And on the network side, we've been promoting the automation level and the service quality and the level of service the delivery guys are able to actually absorb more parcels and platform parcels as well. So I believe that for the nonplatform parcels, we're going to have a huge space in the future. While we are organizing the non-platform businesses, except that we are going to improve the capability of the parcel collection. At the same time, we want to actually make sure that the businesses and services like the deliver upon the next day or the same day can be further enhanced. So we have strategic operations with SEA Express. In terms of the commercial process and non-platform parcels asset, SEA Express is very much experienced. And in the past, in South Asia, SEA Express actually delivers to the whole group to help to implement. So we are going to get a lot of support and learnings from SEA Express to actually make non-platform parcels business in a much better way. So at the same time, for the nonplatform parcel business in South Asia, we're going to improve the percentage and market share the overall development logic non-platform is not the same as platform parcels. For platform parcels, it is quite singular and the customers are quite concentrated for the non-platform parcels, we're talking about SME customers and the asset customers in terms of their understanding and acknowledgment of our images, this is totally different. Let me give you an example. In Southeast Asian countries. Some of the logistics companies are not performing quite well or even making losses. But some of the local dwellers and citizens still believe that they are the priority that they want to choose. So this is something that we want to actually make a turn and change. So with time, our fly wheel is going to be spending at a higher speed of rotation. In the future, the particular non-platform parcel business interstation market will be quite performative.

Next, we have the question from in [indiscernible] from Citic.

This is [ Ling Luci ] from Citic, and thank you very much for this opportunity.

Would you like to speak up a little bit more?

Is it good now?