With the 2024 interim results investor teleconference. I am the moderator for today's session. Before today's meeting, we have already sent you the summarizations of the interim results investor regards. Today we welcome the management, Mr. Song Rong, the Executive Director and President of Sinotrans. Mr. Li Shichu, Vice President and Board Secretary, and also Mr. Gao Xiang, Vice President, Chief Digital Officer. At the same time, we have also invited Madam Wang Xiaoli and Madam Ning Yaping, as well as Mr. Cui Xinjian to join us on today's meeting. For today's meeting, it is going to be divided into two parts. The first part is going to be an introduction toward today's interim results, and second part is going to be the Q&As. Now we are going to give the fl`oor to Mr. Song Rong.
Ladies and gentlemen, friends old and new from the capital markets. First of all, on behalf of the Sinotrans management, I would like to extend my warmest welcome to all of you investors who keep following the company. The company's operating revenue increased by 17% year-on-year to CNY 56.4 billion in the first half of this year. In the second quarter, the company withstood the pressures by competing with the market, and we have undertaken the pressures from the market. The net profit attributed between the current company increased by 42% month-to-month, by CNY 1.14 billion. At the same time, another pressure is of the medium-term profit. The company adhered to the principles of always focusing on the shareholders' returns. For the dividend payment ratios, we are reaching 54.17%. Let's review the logistics situation in the first half of the year.
From the perspective of the supply side of the shipping market, in the first half of this year, the tensions in the Red Sea region has never been eased, and the deviations of the liner companies has led to a tighter supply of capacity on the Europe-China route. The international container shipping market is once again facing a tight supply capacities. On the demand side, the export momentum on the high-end, intelligent, and green product on the Chinese enterprises remains good. The gross cross-border e-commerce is strong. The imbalance between supply and demand led to a 34% year-on-year increase in the average composite index of China's export container freight in the second quarter. From the supply side of the air market, the global air cargo supply will increase by 12% year-on-year in the first quarter of the year 2024.
On the demand side, driven by the lacking of the shipping capacities and the rapid development of the cross-border e-commerce, the total global air cargo demand in the first half of the year hit a record high with a year-on-year increase of 34.4%. In terms of the freight rate, the average price of the European routes and American routes in the first half of this year increased by 33% and 47% year-on-year, respectively. In the first half of this year, the company actually received the market shares and opportunities. We are seeing a 19% increase in the shipping agencies, a 25% increase in the air freight increase, and a 30% in the railway agencies business, as well as a 15% increase in the contract logistics market. Now, let me introduce you the different sectors of the company's operations.
In the professional logistics sectors, the external revenues of the professional logistic in the first half of the year was CNY 50.2 billion, an increase of 3% year-on-year. However, due to the lower price of the new and renewed supply contract, we are seeing the segment profit was CNY 410 million, a decrease of 27% over the same period last year. According to the data, in June, in the 41 key logistics cities across the country, it rose by 4.94% year-on-year in June. The warehouse vacancy rate increased by 2.41 percentage points year-on-year. The lack of effective domestic demand has brought customers to further to cease logistic costs, which brought unprecedented challenges to the overall market. We could also see that challenges also means opportunities.
In the first half of this year, the company have insight into the changes in their customers' demand, effectively extend the customers in domestic and the freight markets, integrated its own supply revenues to carry on joint bidding, and won the bid for the new businesses for the few of strategic customers. The resilience of the overseas supply chains continues to be enhanced, and we have also built an end-to-end resilient supply chain network covering four to eight countries in Europe. Also service coverage to more than 20 countries in Latin Americans, and improve the full link capacities of the overseas terminations. In the first half of this year, the agent segment achieved operating income of CNY 35 billion, a year-on-year increase of 22%.
Mainly due to the increase in business volumes and year-on-year increase in the freight rate, a significant growth of the shipping and the air freight agency business revenues, which operated by 27.9% and 32.6% respectively. The profit of the segment was CNY 1.23 billion, which was basically the same as that of the period last year. In terms of this agency business, the company is willingly promote the transformations to the new carrier models and build and control the core capacity pool and the key logistics resources in various forms. So water transforming channels gradually improve the controls of the channel resources by means of the caterings, pricing lock-ins and joint operations. The air sectors operate by ton of freight rates, achieving a controllable capacity of 132,000 tons, a year-on-year increase of 24.5%, and the air freight channel business volumes were 533,000 tons.
For the e-commerce business, it's majorly being generated from the cross-border e-commerce business. In the first half of this year, the business grew by 25% year-on-year. The corporate division is growing by 17% and 58% respectively. At present, a new round of scientific and technological revolutions has taken place featured by artificial intelligence. The international strategic patterns is moving at an accelerated pace. In the face of the complicated international situation, combined with other unsuitable factors, such as insufficient domestically effective demand, differentiations of the economic operations, Sinotrans is working on both qualities and quantities, as well as changing the old and new development patterns, working on the new production forces and comprehensively, civilly promote the key areas. In the upcoming second half of this year, we are going to focusing on the following fronts.
First of all, we should pay attention to both quantity and quality and increasing effort to implement the key tasks of the year. In the first half of this year, since we had a rapid income, this is also creating an increase in the accounts receivables. At the same time, we also have expansions of the trains and the charter flights, leading to the temporary pressures on the company's cash flow. In the second half of this year, we will fully implement the controls of accounts receivable and cash flow and promote the improvements of the relevant financial sectors. The second is to strengthen the market on the basis of an in-depth insight into the customer's need, grab the hard customers, stabilizing the market, optimizing cost to meet the demands of the customers in small and medium size.
Second, we are going to accelerate the development pace and also the digital transformations. For the second half of this year, we are also going to work on the product management and also the customer delivery systems. The customer management systems will be fully applied, and the online units will be no less than 45% of the company's business revenue within this year. The product management systems will be completing the pilot of the productizations of the main business lines to realize the closed loop of the business management process. The delivery management systems will continue to promote the release of the business standards and the online applications of the logistics control tower models. The third is to gradually roll out and promote the new carrier models. The air freight will continue to improve the effectiveness of the new carrier models.
On the capacity side, we are also going to focusing on the Central and Eastern Europe, Central and South America, Southeast Asia, and Middle East. In China, we are going to focus on the core areas of the Jiangsu, Zhejiang, and Shanghai and Guangdong, Hong Kong, and the Macau Greater Bay. Overseas around, we are going to focusing on the Belgium and Budapest in high rate. In terms of the water transportations, we are going to focusing on the Southeast Asia, Middle East, as well as Japan and South Korea. In the two terminals, we are going to enhance the key resources investment. In terms of land transportations, we are going to enhance the operations of the platforms and the key lines, enhance the total controllability capacities, and load down the cost and increasing the efficiency at the same time.
For the bulk transportations, we are going to continue to focusing on the skills and the controllabilities, trying to working on the market capacity. We are going to make sure that the dynamic operating units of the SCECC platforms is going to reach 225,000 units. In terms of the resources allocations, we are going to follow the Chinese companies to go abroad and lay on the foundations where we are going to have these key focusing areas as well as the less focused areas. Fourthly, we are going to deepen the reform and promote in-depth operational reforms. In terms of these operational supports, we are going to promote the top-level designs of the business operation organization around the implementations of the product systems and the quality reinforcements in the overall operations. We are also going to focus on the new carrier models.
In terms of the integrations, we are going to improve the strategic development models in Hong Kong and promote the allocations of the resources in the professional logistics sectors. In terms of the regional optimizations, we will promote the integrations of the resources in the regions. Fifthly, we are going to work on the different channels. First and foremost, we are going to work together with the company's customers in improving our logistics service capacities. Secondly, we are going to work on the pan-artificial intelligence technologies R&D applications in generating an open question and answer business solutions. Thirdly, we are going to build a self-initiated key technology systems.
In the second half of this year, we are going to concentrate our effort, work harder throughout to completely establish business objectives in key tasks for the whole year and make every effort to promote a steady and far-reaching development of Sinotrans. return to our investors with high quality development. This is my sharing. I hope everybody could continue our support for the company. Thank you.
Thank you. Now the floor is open up for questions. Please identify your name and your affiliated institution before the questions. Thank you. For the investors from the telephone line, please press star opne. Press the star button and then press number one. Few investors on the telephone line. If you have any questions, please press the star button and then press the 1 button. Now we are going to give the floor to Hu Xurong from Yangtze River Securities.
Dear executives, I am Hu Xurong from Yangtze River Securities. Thank you so much for giving me this opportunity. I would like to congratulate you for achieving such good results with the relatively sluggish microeconomy. The first one is that we would say that the investment in the capital market has declined by 5% in the first half of this year. What is going to be your strategy on the second half of this year? The second question is about the dividend. I would say that it has remained the same. I think the cargo volume is also growing quite rapidly. What is going to be the outlook for the future of the capital market? What is going to be the pace for the future of the development of the capital market?
Thank you so much for your support of Sinotrans. I would like to answer your questions. For the Sinotrans subsidy rate, we would say that its dividend is The property is being declined by 2% and we control it within the difference of 5%. I think that performance of the second quarter is better than the performance of the first quarter. Thank you. The second part is about the governmental subsidies. Actually, in our business sectors, in the different lines and also the air freight, we have the governmental subsidies. Obviously, the subsidy volumes is seeing a slight decrease compared with the numbers of last year. There are so many changes for the line management and also the supply chain because of the COVID-19 pandemic and also the prevention and control management measures.
This kind of subsidy policy is still under negotiation. That is the reason why we have got less than around RMB 200 million compared with last year. But for the subsidies per unit, the policy remains quite stable. I would say the total subsidy is not very different compared with the subsidy last year. Thank you.
Number four is going to be given to Tian Jin from Guolian Securities.
Thank you so much for giving me this opportunity to ask this question. I think congrats for Sinotrans for achieving such a good result under the domestic and international pressure. This is also demonstrating the company's resilience to the turbulence of the market. I have a question quite similar to the investors before me. It is about the subsidies in the air freight. Compared with last year, some of these subsidies, contracts have not been fulfilled. For example, if we have fulfilled the contract in the subsidies, what is going to be the subsidy range in the first half of this year?
The ratio is growing quite rapidly. The second part is about the contract logistics. The profitability, what is your outlook of the second year half of this year's profit?
I am going to answer the second question since Mr. Xiang is going to answer the first question.
Thank you so much. Let me answer the first question, which is the air freight ratios in the first half of this year. In terms of financial management, the total subsidy is less than RMB 200 million . Also for the air freight line routine subsidies. After one year's experience, actually last year we enjoyed one year's subsidy. But the subsidy was finished at the end of year 2023. Sinotrans is going to be focusing on the operational routine. Currently, we are working together with the local government and negotiating with the local government to proceed the subsidies.
We think that for this proportion of the local government subsidies, we would be very optimistic. In the second half of this year, once we have more negotiations results, we are going to enhance our performance in the air freight sector. Let me talk about the contract logistics sector. In my report, I have also mentioned that in the different business sectors, our contract logistic undertook the most pressure from the market in this year. From the second half of this year, the customers continued the contract, and we would say that the customers have a low tolerance in terms of, for us to lower down the price. The customers asked for a 5% decrease in our price quoted, and even sometimes they can go to 25%. Before the turning of the need from the market, the price pressure is going to continue to exist.
At the same time, from the second half of last year, we have adopted a series of measures. Improving our own operational quality and improving the efficiency. The market shares of the companies and also the profitabilities of the companies remained at our leading position against a declining market, and this could be seen by our qualities and services that we provided to the customers. Thank you so much. I wish the company could be better in the future. Thank you.
The next investor is going to be given to the investment from Yan Yi. In terms of the internal results of the company in the first half of this year, we see that although there are some declines to the company's performance in the second half of this year, the dividend to the shareholders is still quite good.
So what is going to be the future strategies for the dividends? Do we have any guidelines for the future dividends attributable to the shareholders?
Thank you so much. Sinotrans has always attached great importance to the returns of the investors. We also want to thank the investors for their support. We would like to have a very good dividend payout amount in order to be agreeable to our market. Actually, although the company is facing a larger declining situation, our financial performance is very good. Our balance sheet is also a very good performance. That is the reason why in the first half of this year, although we are seeing a decline on the performance, we will remain same.
Moving to the future, from the general financial situations of the company, we are confident to keep the same dividend policies to the investors in order to give them the returns that they deserve. Thank you.
Thank you.
The floor is given to John Xie from CICC.
Good morning. I have a question. I am from CICC. The first question is, from the second quarter, we will see the net profit and also the gross profit is been declining in the second quarter of this year. What is the reasons for the changes of this performance? Is it because of these revenues or is it because of the profitability? What is going to be the outlook of the second half of this year? The second question is about the returns. We would also say that there are some of the buyback revenues. Is it possible for us to have the buyback revenues?
Thank you. Buyback plan. In terms of this buyback, actually, in the past two years in the A-share market, we have buy some art in a very stable pace in the past two years. We are going to make some arrangement. But for the specific VR, we are going to announce it to you according to the company. Could you give us more introduction towards the performance of the outlook of the second quarter of this year? From the management perspective, we have the investment. We also have some of these pressures that we have undertake because the revenues has been increased by 32% and the returns has been declined by 42%. We are also promoting the rapid development from the cost perspective. Could you tell us the growth momentum in the second half of this year?
Thank you so much.
Now we are going to give the floor to Lin Shan from Huaxia Securities. Good morning.
I am Lin Shan from Huaxia Securities. First and foremost, we would like to congratulate Sinotrans for the performance of the first half of this year. We want to ask some questions about the exports outlook in the second half of this year, in the air freight and also in the exports. So what is going to be your outlook for the exports in the second half of this year? Do you have any foreseeable results at this point? Second point is about the cross-border e-commerce. Everybody is waiting for the result of the presidential elections result of the year 2024. So could you share with us some of your thoughts in the potential risks of the risks and what is going to be the measures to do to deal against it?
I am going to take the first question, and then Mr. Gao Xiang is going to take the second question. In the second half of this year, we should consider several different elements, including especially the export containers. The first part is about the operational capacities. We are increasing our operational capacities with the increases of the operational capacities keeps high, and in the future there is going to be an over capacity in terms of the operational method. Second question is about the instabilities of the global geopolitics. This is also going to trigger a lot more pressures on our exports in terms of the market. There are so many influences, but the element will remain.
The third part is about the sluggish or delighted global economic market. This means that we are facing a fierce competition in terms of the external market. It is about our views towards the international markets. No matter for the exports, the structural changes, it includes the exports of these business contracts. It also includes the exports about the business structure. This is all going to be affecting the fourth quarter and even the next year's exports performance in terms of the volumes and also the operational quality. All of this is going to be affected. I am going to take the second question about the cross-border e-commerce. In the second half of this year, we have kept a very close communication with our end customers. The increase of this business revenue is because we have expanded the cross-border e-commerce.
In terms of this cross-border e-commerce, we are going to keep a very massive scale increases. But you could also say that with the increases of these cabins in terms of the passenger transportation, because of these requirements of the time adequacies, the requirement or the demand required higher. Our perspective toward the changes of this U.S. policy is that for the cross-border e-commerce, it is going to match with the future consumption market-wise. Actually, we have also experienced some of the changes in the European market. We do not have specific business changes. Definitely, the companies are working together with our market and our company. Through the changes of our operational revenues, we are working together with the undertakers. We are going to block all kinds of the potential risks in order to maintain a very stable growth. Thank you so much.
The next question is from Jackie Hao from Pengheng Investment.
First and foremost, I would like to congratulate the management about this performance in the first half of this year. I have two questions. The first part is about the operational revenues in the first half of this year. What is the reasons for the increase of the operational revenues? Second question is about the cash flows. What is going to be the measures for the cash flows that you are going to take to guarantee the stable cash flows in the second half of this year? Another part is about the cost management. We are under a huge pressures in terms of this cost revenues. What is going to be the future outlook for the second half of this year?
Cash flow is presenting a quite important spillers over in the first half of this year. This is related to the company's scaled up in the first half of this year. The company is increasing by 17% in the first half of this year. Second, under the current macroeconomic background, our suppliers is presenting a longer, closer cycles against this economic background. There are also going to be some of the increases in the prepayment.
To deal with it, the second half of this year, we have a consensus that we are making all kinds of the allocations. We have upheld the meetings and where we are going to work on the different specific areas. We are going to work from the demand and the supply side, where we are going to improve the cash flows. The second question is about the cost control. We have some of the similar questions in terms of the cost control.
For one part, we are going to increase the revenues. This high-end actions means that we are going to control the cost. In terms of the operations of the cost, the company is going to taken all the measures we could take. We are also going to use all kinds of swaps in order to reduce the cost. The company is going to work at all of our efforts in the cost control momentum.
Thank you so much for answering my question.
The next question is Yan Hua from Xinhua Hongle.
We could see that all the business sectors, no matter from the contract logistics to the e-commerce sectors, it is increasing very rapidly. But compared with the same time last year, this is also increasing quite quickly. But this year's macroeconomic performance is posing a lot of pressures. So what is the reason for this rapid growth?
Is it because we made some of the breakthroughs in this half of this year in terms of our production capacity? Do we work on the digitalization of the markets, then we improve the results? What is the reason behind it? Should we keep the same momentum in the per unit cost?
Thank you so much, Mr. Lian, for your question. This is a very key issue. Actually, if you noted, in the past two years, in the strategic development of the company, we have strengthened several fronts. One concept is about the cross-market development. That is to say, with the rapid development of the economy, we need to grab the market shares with our own competitiveness. In the past two years, actually in the first half of this year, Sinotrans' team undertakes these operations. Actually, we are very active in the market. This is the first reason.
Second reason is that the digital transformation. Although the digital transformation is a long-term strategy for us, but through the past two to three years' effort, the digital transformation changes our traditional business sector. We are also getting more and more input in the market shares. Thirdly, from the air price to the new organizations of the markets, we have already changed the twin patterns. This has also strengthened our profitabilities, and also we are seeing a greater expansion in terms of the market skills and the market operations. The fourth reason is that in terms of this overseas VR, we are enhancing our overseas delivery capacity and also business operation sectors. This enables our business to be growing better and faster. On the other side, we could also notice that with the input of this business, we should also pay attention to the skills of this business.
Do we have more input? With the input of the skills, we should also mention about the cash flows and also the cost control methods. This year, we just have over half year's meetings, and we are using three years' time to think about one aspect, which is the transformations of the old and new momentums, the development of the qualities and the quantities. Please be reassured, the investors, please be reassured that no matter for the inventories or the incrementals, no matter for the qualities or the quantities, we are at a very good momentum. Thank you.
The next question is from Zhang Yuting with Tiancheng PE.
Dear investors, I have questions about the investment market. The first question is that what is the company's view about the cargo in the market in the second half of this year? We have this momentum in the first half of this year. We continue the momentum. Compared with the second quarter, are there any changes? The second question is about the sea transportations in the company. We all know that the sea agency business in the company sector has been transport from the agent three sectors to two quarters. Do we have any quantitative data which I can refer to?
For the first question, I think Mr. Zhang has already answered your questions. The business operations remain a very stable momentum with the returns of the Chinese exports and the imports of the economy. I would say a very stable momentum in the second half of this year, especially in the past several years. The inventory trend in the European and American market has been stopped before the U.S. election. I would say everything will be stabilized.
In the fourth quarter of this year, the U.S. election result comes. It's also going to be the season for Christmas. It's also going to be the boom season. In the second half of this year with the returns of the market, especially with the more operational capacities, the imbalance between supply and demand is also going to be increased. We would also see that the sea freight prices, we are also seeing some of the declines in terms of the sea price. This is also going to be a very good thing, I would like to say from two points. In terms of sea agent perspective, in the single round operations, container prices are also being operating at very good momentum. We have continued our momentums in this round. We are also working together with the strategic clients.
In terms of the liners and the shipping operations, we are operating from a single-round business sector to an all-rounded business sector. The ratio is rising. This is also going to be the development for the future momentum. We have some of the special investment this year. This also includes what Mr. Ma Sheng has mentioned, that we are balancing the quantity with the quality. Through the changes of the markets, we are also going to change the performance in the growth profitability. Just as Mr. Zhang mentioned, we are definitely going to increase the quality with the quantities. We are going to move into the healthy momentum as we are moving into the second half of this year. Thank you.
Now we are going to invite Han Jin from Zhongxin Jiantou.
I have a few questions. The first one is that for last year, the single train to Russia is seeing a very good performance. What is the actual situation for the first half of this year, and what is the outlook for the second half of this year? Could we keep the same momentum? The second question is that, in the air freight agencies, there might be some of this lost or in the internal practitioners. This is also posing a lot of pressure. Recently, I would say the investors, why is there a single CUI to DUI account? In the recent few years, the multiple round logistics is also increasing. Do we have a very simple quantitative method to deal with it?
Let me answer the questions about the air freight. Actually, from the air freight channels, we are focusing on the customer's structure. Because of these changes of the cross-border e-commerce business, the massive skills of the business is in the cross-border business sectors. It should be within 50%-60%. Because of these operational revenues, our end client is, we have more and more direct customers.
We are also hoping to work on long-term operations and long-term high revenues. The first question is about the increases in the railway revenues. From the China-Europe Railway Express, I would say that this year we have achieved very remarkable results. Because of the series of these outbreaks in the Red Sea and other different areas, in the first half of this year, the business structure changed. The railway to the Europe is helpful increased, and in terms of this China-Russian railway line, the demand increased. In terms of the average price, because of this air freight construction, the pricing remained the same.
But for the final Russian transportations, I would say that from the pricings, we are facing a lower down price and more competition from the market. What is the ratio for the sea agent business?
We are not going to say that sea freight business is only a simple sea freight business. It is representing all the segmented markets. The business sectors is being focusing on the, I would say it is around 40%. But this number can never define or cannot define us because we are going to divide the sea business into the agencies, whole trains, undertakers, among other different business sectors. I would say that you are asking questions for the air freight. It is because of some of these small agent and medium agent.
They are seeing their bankruptcy, but if you have going through multiple rounds of these transportations and the cycles, we are going through so many rounds of these cycles lost. I would say that Sinotrans as a company with over 70 years history, we have full capacity to offset markets. Bankruptcy and after all kinds of these adverse rates, we are confident, and we are capable, and we also have the experience to deal with it.
The next question is from Mangia Chi with Hong Tou Pant.
I am Mangia Chi with Hong Tou Pant. I have two questions for you. The first one is that, what is the difference of the rates and also the development of the rates? Do we fulfill the mission this year? If we fulfilled, what is our expectations of the profitability ratio this year? Second question is about the railway business sectors of the first quarter this year. We maintained a very good momentum, but the data is demonstrating more slides. Could you answer the reasons for it and why did it happen? What is your outlook for the international freight?
Thank you so much for your question. I would say the rates, we are still under negotiation with NDRC. After the negotiation of the NDRCs, we are going to work together with the CSRC. After the fulfillment of the negotiations, we are going to give you the result. Second question is about the gross profit. In Mr. Song's report, the decline of the gross profit is coming from the contractual logistics sector. We are lacking the efficiencies and the customers are always asking in the bidding process for us to go down the price.
That is creating the decrease in this sector. This is the huge cause for the decline of the performance. I am going to take the second question as the railway sector. The investors before me have also seen these questions. In terms of railway line, in the first quarter of this year, the China-Russian railway has seen a decline in the first quarter of this year. Because of our arrangement in the railway line, we have also increased the numbers of the imported line liners because this has also triggered a decrease in the net profit. For the second half of this year, we are estimating a return in the performance. We are quite confident about the performance in the second half of this year. You asked me some of the policies about subsidies. The subsidy policy ended at the year 2023.
We have a massive subsidies in the different sectors, but the subsidy is only accounting for 10% in the overall business. We are still observing the whole market. I think the market is going to be the same.
Thank you for your answer.
The next is Xun Zhuyan from Zheshang Securities .
I am Xun Zhuyan from Zheshang Securities . Just as you have told me, in the second half of this year, we have achieved a very remarkable result. From the business sector, we are very stable. Also the contractual logistics business is under a larger pressure from the first half of this year. But the price decrease actually started from the second half of the last year. We also have some of the cost changes and also some of the subsidies. From the different perspectives, could you give me some of the outlook in the second half of this year? Are we going to be more optimistic compared with the performance last year?
I think you have my answer in your question. We will see the air freight and railway freight is going to be stable. The market is going to be under operation, under a lot of pressures in the second half of this year. We have already adopted a series of a systematic and structural changes. We believe that our effort is not going to be wasted. The contractual business part is under huge pressure from the second half of this year. The measure has always taken its course. Our overall development, our overall perspectives of the second half of this year is that we are using all kinds of the effective measures to improve the quality.
At the same time, we are also going to work on the business structures. We are also going to enhancing the technologies in order to improve the qualities. Actually, for the second half, we are going to better serve our customers in the overall performance. Actually, we are very optimistic, but we should look at the whole market. We are also going to look at the general situations in the environment. Some of the systematic risk still exists.
Thank you so much for your questions. For the interest of time, we are only open to the floor for the last question. Now the floor is going to be given to Chen Dongfei from Zheshang Securities.
Dear investors, I would like to thank you. I am Chen Dongfei from CITIC Asset. Obviously, the performance is very optimistic and very fulfilling. But obviously the return is seeing a slight difference. What is going to be the changes in terms of this contractor business? What is going to be the reasons behind it? Moving into the future, do we have any questions or are there any supporting policies to deal with the volume decrease ratio? Thank you.
Sorry, I think the question is not very clearly heard. I am going to answer your question from my perspective. I think it is about the rapid increase in this ratio. This year we are seeing a decrease in terms of the freight rate, but I would say the decrease is within the controllable volumes. Moving into the future, we are focusing on the international fast freight ratios, which is related to the e-commerce platforms, airports. From the management perspective, we are very confident about the future of our business. Thank you.
Is it possible for you to illustrate the total volume about the performance in the first half of this year? What is the reason behind it? Do we lack the customer orders or are there any specific reasons?
Actually, Dohwa is a joint venture that we have built together with the Deutsche Post, but we have not announced the results yet for the first half of this year. I would say that in the previous years, we have a lot of support from the policies and from the environment. But actually, without any supporting policies as the joint ventures with the Deutsche Post still remains a very good performance. But, we are going to return back to the normal. Second, for the e-details it is being affected by multiple factors.
Air freight means that you have the cost from two sides, the undertaking prices, the price of the oils, and also the fluctuations of the exchange rate. I think this belongs to the normal range, which can be understandable. The volume is increasing because my judgment into the performance of the market is that there is going to be a very sharp decrease in terms of these packages. Thank you so much for the investors. Thank you so much for the management. The 2024 income result announcement wrap up here. If you have any questions, please contact our IR team. Thank you so much.