Good day, and thank you for standing by. Welcome to J&T Global Express Limited 2024 First Half Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you need to press star one one on your telephone. You'll then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I'd now like to turn the call over to the speaker today, Miss Sylvia Yang from the company. Thank you. Please go ahead.
Thank you, operator. Hello everyone, and welcome to J&T Express first half of 2024 earnings conference call. I'm Sylvia from the investment department. The Company's results and the investor relations presentation were released earlier today, and are now available on the company's IR website at ir.jtexpress.com. Before we start the call, we would like to remind you that the call may include forward-looking statements, which are underlined by a number of risks and uncertainties and may not be realized in the future for various reasons.
Information about general market conditions is coming from a variety of sources outside of J&T. This presentation also contains some unaudited, non-IFRS financial measures that should be considered in addition to, but not as a substitute for, the company's financials prepared in accordance with IFRS. I have with me J&T's Executive President Steven Fan, Vice President Charles Hou, and CFO Dylan Tey. Our management will share strategies, operating highlights, and financial performance for the first half of 2024. This will be followed by a Q&A session. With that, let me turn the call over to Steven. Steven will read through his prepared remarks in Chinese before I translate for him in English. Steven.
Okay [Foreign language] 。
Hello everyone, welcome to today's earnings call. On behalf of J&T Express, I'm honored to share with you the results of the company for the first half of 2024. Benefiting from the sustained growth in Southeast Asia, the positive profitability in China and the significant loss reduction in new markets, the company has achieved profitability for the first time in its reporting period, laying a solid foundation for our healthy and long-term development. In the first half of 2024, the company delivered a total of 11 billion parcels, representing a year on year increase of 38.3%. Our revenue reached $4.8 billion, representing a year on year increase of 20.6%.
Our adjusted EBITDA amounted to $120 million as compared to a loss of $210 million in the corresponding period of last year. Our net profit amounted to $31 million, achieving profitability for the first time. Now I will share with you the development of our business in different regions. Starting with China. In the first half of 2024, J&T has achieved another significant breakthrough with a year on year increase of 37.1% in parcel volume and a year on year increase of 1.1 percentage points in market share.
... We realized positive Adjusted EBITDA, and once again achieved remarkable results in both market share and profitability, showcasing the feasibility and the effectiveness of our strategies in China, as well as the exceptional execution capabilities from our, of our team. In the first half of 2024, J&T handled a total of 8.8 billion parcels in China, representing a year-on-year increase of thirty-seven point one percent. The growth and profitability are mainly driven by three factors: growth of the express delivery industry, stable ASP, and a continuous cost optimization. I will now present our business results and the future development strategy around these three growth drivers. First is the rapid growth of the express delivery industry.
According to the data from the State Post Bureau, the parcel volume of express delivery industry reached 80.2 billion in the first half of 2024, representing a year-on-year increase of 23.1%. Against this backdrop, the company continued to deepen its cooperation with major platforms and customers, and especially capitalized on the opportunities from the rapid growth of social e-commerce to boost our volume. Second is stable ASP. In the first half of 2024, we focused on two aspects, namely, expanding revenue stream, improving service quality, and promoting cost reduction. To this end, we continue to improve our service quality, shorten average delivery time, and steadily increase the proportion of same-day and next-day deliveries. Meantime, the company has promoted the construction of delivery networks through various means to enhance our overall strength and the efficiency.
In particular, we encourage our network partners to invest in automated equipment and unmanned vehicles. Benefiting from reinforced network infrastructure and improved service quality, our overall strength and customer acquisition capabilities continue to grow. The number of reverse parcels and individual parcels has doubled. The number of branded customers has also increased, and the structure of business volume continued to optimize, providing a strong support of our ASP. Last but not least, continuous cost optimization. In the first half of 2024, the company refined management and optimized operations in the process of pickup, transit, and delivery. For instance, we introduced over 1,000 self-owned line haul vehicles to increase the proportion of self-owned high-capacity vehicles and strengthen the quality management of on-site loading to increase the loading rate of each vehicle.
Meantime, we invested in six more automated sorting machines, increasing the total number of automated sorting equipment in China to 205, and made equipment upgrades and adjustments to enhance the automation level and labor efficiency at sorting centers. These measures helped bring down our cost per parcel by $0.02- $0.32, further narrowing the gap with our peers. The Huai'an Sorting Center, our first self-built sorting center in China, is set to commence operations in the second half of 2024, and our self-built Guangzhou Sorting Center will be put into operation next year, which is expected to further optimize our cost structure. Moving on to Southeast Asia. In the first half of 2024, the company handled a total of 2 billion parcels in Southeast Asia, representing a year-on-year increase of 42%, far exceeding the industry average.
Our market share stands at 27.4%, representing an increase of two percentage points from 2023, ranking first in Southeast Asia for the fourth consecutive year and further solidifying our leadership in the region. In line with our consistent strategy in Southeast Asia, we continue to grow our market share, consolidate our leadership position, and raise entry barriers. We began to bring the advanced expertise and experience from China to Southeast Asia since 2023, and have achieved remarkable results, leading to a year-on-year decrease of 15.4% in the cost per parcel in 2022. Benefiting from more than expected cost reduction, the company is capable and confident to constantly reduce costs in Southeast Asia, and therefore shares profits with our customers and the market in advance.
Our high-quality services and competitive prices have driven a strong growth in our volume, which in turn amplify the scale effect and promoted cost reduction, thereby creating more room for price reductions and fostering a virtuous cycle. As the industry leader in Southeast Asia, we will continue to help reduce the fulfillment costs of e-commerce platforms, promote the development of e-commerce, and increase its penetration. Lastly, I will introduce new markets. In the first half of 2024, the company handled a total of 140 million parcels in new markets, representing a year-on-year increase of 63.9%. According to the industry data, the CAGR of the e-commerce retail sales in new markets is expected to reach 21.3% from 2024 to 2028, making them still fastest growing markets globally.
In 2024, parcel per capita in new markets is expected to be 10, as compared to 24 in Southeast Asia and 115 in China, representing a huge growth potential. Moreover, the express industry in new markets is still in early stage, with a fragmented competitive landscape and limited competition. As a company with China cost and strong execution capabilities, we see substantial growth potentials and efficiency optimization opportunities in the region. The company has long been optimistic about new markets, and so we steadily invest in network to enhance the capacity and the density. We are committed to building a nationwide network, which provides services for international e-commerce platforms, as well as local e-commerce and non-platform customers, thereby forming a long-term competitive landscape advantage of comprehensive network coverage, cost effectiveness, and high-quality services.
Looking ahead, we will closely monitor the development of other markets globally, and are likely to enter into selected markets at opportune moments and in an appropriate way, so as to move towards global expansion. We firmly believe that through unwavering efforts and continuous innovation, J&T will be better positioned to serve customers worldwide and achieve long-term growth. Thank you all for your support and trust. Let us look forward to even greater achievements from J&T Express in the future. With that, I will invite CFO Dylan to discuss our financials.
Thank you, Sylvia, and thank you everyone again for joining the call today, and apologies for the slight technical issue earlier on. Now, please allow me to take you through the financial highlights. Please note that unless specifically mentioned, all the numbers that I'll be quoting are in US dollars, and percentage changes refer to year-on-year comparisons. Detailed financials of our performance, unit of economics, cash flows, CapEx, are posted on our IR website, our results deck, and I will only go through some of the highlights here. For J&T Global Express Group as a whole, we are very happy to report that our total revenue increased 20.6% year-on-year from $4 billion in the first half of last year to $4.9 billion in the first half of this year.
Our total express delivery revenue increased 33.7% year-on-year from $3.5 billion last year to $4.7 billion this year. This is mainly driven by the parcel volume growth of express delivery services in the 13 countries we operate, covering our 3 operating segments. The total gross profit in the first half of 2024 was $536 million, compared to a gross profit of one hundred and ninety-four million last year. The total Adjusted EBITDA increased by approximately eight times from $39 million in the first half of last year to $351 million in the first half of this year.
With our China business achieving positive adjusted EBIT, our total adjusted EBIT also turned profitable for the first time, amounting to $118 million in the first half of this year, while we had an adjusted EBIT loss of $213 million in the first half of last year. Next, let me drill down to our segment results. For Southeast Asia, supported by the strong volume growth mentioned by Steven, our revenue increased by 22% year-on-year from $1.2 billion in the first half of last year to $1.5 billion for the first half of this year. Our gross profit was $287 million last year, compared to $220 million this year.
We had an adjusted EBIT of $135 million in the first half for this segment, representing a year-on-year increase of 45.9% as compared to $92 million last year. As you have seen, we have maintained a healthy and sustainable profitable level in Southeast Asia, and the adjusted EBIT margins in the first half of last year and the first half of this year were 7.4% and 8.9%, respectively. As an independent e-commerce enabler, we benefit from the growth of all the e-commerce platforms as we adopt flexible pricing and also as we actively explore non-e-commerce customers, capitalizing on our network and high-quality services and the brand name of J&T. Meanwhile, our costs can be contin...
Can be reduced continuously by expanding the existing economies of scale and leveraging our know-how from China into the Southeast Asia, which will help us to deliver healthy unit economics. We will further share these cost savings to our e-commerce customers to increase our market share, as you know. Next up, with China. For China, I'm pleased to announce that first half of 2024, we have achieved our first positive adjusted EBIT along with an increase of 1.1 percentage points in market share, which is another breakthrough and milestone for us. For first half of 2024, revenue increased 36.1% year-on-year to $3 billion as compared to the first half of last year.
Meanwhile, our revenue per parcel, i.e., ASP, in China in the first half of 2024 remained stable at $0.34, which is the same as first half of 2023. This is a direct result of the continued optimization of our volume mix, including, but not limited to, our growth in the reverse logistics parcels and individual parcels. Cost per parcel has declined from $0.34 in the first half of last year to $0.32 in the first half of this year. This is mainly due to the improved overall operational efficiency as we continue to enhance our capacity while maintaining or even strengthening our network stability. We achieved this cost savings through various measures, such as investing in our self-owned line haul vehicles, upgrading automated equipment in our sorting centers, et cetera, as mentioned by Steven earlier.
As a result, we had a positive adjusted EBITDA of $199 million in the first half of 2024, compared to an adjusted EBITDA loss of $45 million in the first half of last year, and adjusted EBIT was $60 million in the first half of 2024 for our China segment, while it was a loss of $183 million in the first half of 2023. We are very happy to share this success with you. Next, for our new markets. Our revenue increased almost 120% year-on-year from the $133 million in the first half of last year to $292 million in the first half of this year, mainly driven by the strong growth of our parcel volume.
As we ramp up into economies of scale for these markets, we achieved positive gross profit for the first time of $35 million in the first half of this year, compared to a gross loss of $23 million in the first half of last year. Adjusted EBITDA of the new markets recorded loss of $55 million in the first half of last year and it has narrowed significantly to $7.8 million into the first half of this year. The corresponding negative margin of last year was 41.6%, while this year it has narrowed down to 2.7%, which is a very great news as well.
In the first half of 2024, we further enhanced our network capacity in our new markets by investing in automated equipment in sorting centers, adding new outlets, and increasing line haul vehicles to meet the growing demand. Lastly, for our cross-border segment, we shared previously that our cross-border small parcel business had been closed since the fourth quarter of 2023. So for 2024 first half, our main business for this segment is really international freight forwarding and warehousing solution business. Our revenue in the first half of 2024 for our cross-border segment was $52 million, which is down 88% year-on-year from $449 million last year. Our adjusted EBITDA loss also narrowed from $11 million last year to $7.2 million this year. Returning to our consolidated numbers.
As a result of all the factors mentioned above, we are very happy to share profit, this profitable milestone with you. Our adjusted net profit of $63 million in the first half of this year, it is a significant turnaround from our adjusted loss of $264 million in the first half of last year. Our total accounting net profit number was $31 million for the first half of this year, which is also a turnaround from the accounting loss number of $667 million in the first half of last year. On a separate note, we also see strength in our cash flow positions.
We had a net cash inflow from operating activities of $346 million in the first half of this year, which is significantly higher than the net cash inflow of $2.8 million in the first half of last year. As of the thirtieth of June, 2024, we maintain a strong cash position with the cash and cash equivalents and restricted cash of $14.7 billion. Thank you, all. This concludes our prepared remarks. Operator, please open the line for questions. Thank you.
Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. One moment for the first question. ...Our first question comes from the line of Fan Tso from Bank of America Securities. Please go ahead.
Thank you. Thanks for taking my question. This is Fan Tso from Bank of America. So, two questions from me, if I may. First one on the Southeast Asia, you know, there's news that Shopee agreed to make changes after being accused of monopolizing its e-commerce logistics services. Understand that it is still in early days, but based on your early observation, do you expect some material reversal of the logistics volume previously insourced by Shopee and thereby benefiting J&T? My second question is about the new market. We looked at the volume growth in the second quarter this year, came in slower than what investor expected, partly because of the logistics insourcing by e-commerce operator in Brazil, I think. Thanks.
Let me translate for myself. [Foreign language] 。
Thank you, Fan, for the questions. About your question, the questions about Shopee and our new markets, I will invite Charles to take these two questions, and then Dylan will be translating for Charles.
[Foreign language]
Hi, Fan, thanks, thanks for the first question. According to the public information, as well as our interaction with the stakeholders of... the relevant stakeholders, I think we understand SPX, which is Shopee Express, is a long-term strategy of Sea Limited. So in terms of whether S, you know, in terms of the wallet share of SPX within Shopee's platform, or whether the trend or whether the SPX share wallet will increase or decrease in the future, frankly speaking, we are not able to to respond to to these questions on their behalf. But as for our company, I think, from our perspective, we have not noticed any significant change in the recent months.
Based on, as you know, we have provided guidance before, and the guidance we have provided, we have not assumed in the second half of this year, we will be given more volume from Shopee. And for our company, what is really important is we will continue to optimize our efficiencies, and also provide the most competitive and the best quality services to all the platforms. I hope we answer your questions, Fan.
[Foreign language]
First of all, I think, as we have mentioned many times before, I think we see the new markets as our long-term strategy, and we will not adjust this long-term strategy just because they are recent or short-term volatility. I think secondly, I think for new markets, what we're seeing on ground is that for some of the new markets, there may be potential changes to the cross-border e-commerce rules and regulations. I think from our perspective, we will continue to maintain growth while growing this market, while coping with these potential changes.
As you already have seen from our financial reports, this first half of this year, the losses, our losses and investments into the new markets have narrowed significantly. Lastly, I think as a strategy, we will continue to our strategy and what we have been doing for all our markets is we would like to build nationwide express network. When we say nationwide, we mean we don't only serve the cross-border e-commerce customers, but we are also able to serve the local e-commerce, and as well as the non-e-commerce customers, including individuals. We will continue to build and refine our network to provide good value for money, as well as high quality services as our long-term competitive advantage. Ben, so we hope, I hope my translation and Charles has answered both your questions.
[Foreign language]
Thank you for your questions. One moment for the next question.
[Foreign language] I have two questions. One question, under the current competitive landscape of Chinese express market, how can we balance our profit and market share objectives? And how can we effectively reconcile the interests of headquarters, agents, and franchisees? Two question, in the Southeast Asian market, what's the potential for the further cost reduction for our company? Thank you.
Thank you, Sijia. Thank you for your questions. So about the profit sharing in China and our cost reduction potential in Southeast Asia, Dylan will be taking your question.
Hey, Sijia. So I'll take your question, in English, okay? To save the time for translation. So yeah, I think for your first questions about how do we balance, profitability and our market share, and how do we balance, our China HQ, our regional sponsors and, our network partners? That's a good question, but I think it's similar to what we have always talked about. If you recall, in 2023, we already achieved EBITDA breakeven. And as you have read from our financial report, in the first half, we also achieved, accounting profitability, and while continue to increase our market share to 11%. I think we say that we are doing pretty well in terms of balancing our market share and our profitability, through our very good execution.
Over the next two to three years, we hope that we will continue to grow faster than the industry, and our market share will also grow steadily, while having a better and better profitability across time. So as for your questions about the profit share between the different ecosystem players, I think for us, as you know, we consolidate our regional sponsors, and our regional sponsors are contract carriers, and they are really an extension of our headquarters. And we have aligned interests in everything we do, and that's how J&T were able to grow so quickly and steadily over the last few years. At a China HQ level, we have been adopting many measures.
For example, we have continued to empower our network partners to strengthen the service quality, as well as increase investments into the delivery networks operated by them. On the other hand, we also continue to help our network partners to increase their ability to get new customers, and this has been also growing quite fairly well, which is translated to our increased volumes as well as our increased profitability in our network partners as we observe, so I hope I answer your first questions about the market share, the balance that you talk about, the two balance that you talk about. As for the second question about how much more we can reduce costs in Southeast Asia? I think let me just brief recap.
On the first half of this year, our Southeast Asia unit costs has reduced $0.11. While you know the transportation, the sorting, as well as delivery has all reduced $0.03 each. So we will continue to optimize all the different steps in our delivery services. And we will continue to replicate the China expertise and know-how into the overseas market to continuously lower our costs. Right?
Right now, from our perspective, there's still a lot of room for growth. For example, if you look at China, we have 83 sorting centers, we have 205 automated sorting equipments. Compared to Southeast Asia, we have 119 centers, we have 47 fully automated equipments. There's still a very big room for growth in terms of automation. On the other hand, in China, our self-owned line haul fleet is close to say 70%, while in Southeast Asia is less than 40%.
So there's also room for growth in terms of growing our own fleet in Southeast Asia. I know you guys like to ask about the numbers. I think if you ask me, I think, next two to three years, we expect that, we will still be able to get, 5%-10% cost reduction each year. That will be our aim and our hope. Then, well, I hope I answered both your questions.
[Foreign language]
Yeah. Thank you.
Thank you. Thank you for the questions. One moment for the next question. Next question comes from Aaron Luo from UBS. Please go ahead.
[Foreign language] Let me translate myself. I got two follow-up questions. One is for China. As we have noted, the price competition in China has heated up some more during industry low season. So just wondering what your, like, general pricing strategy in Mainland China, i.e., full year earnings target? And the second question is, our overseas market, including Southeast Asia and new markets. Have you noticed any signs of Chinese major cross-border e-commerce platforms further expanding their footprint there? And how would our company better capture the growth opportunities from cross-border e-commerce? Thank you very much.
Thank you. Thank you, Aaron, for the questions. Charles will be addressing the questions about our overall strategies in China and Southeast Asia and new markets. So, Charles.
[Foreign language]
First of all, thank you, Aaron. Thank you, Aaron, and the very keen observation about the China express industry's competition, as well as the growth of the cross-border e-commerce players, and the developments there. So for the first question about the domestic competition in China, as you know, for the last thirty over years, of the China express industry, every year during the off-peak season, which is now, there's always some volatility and some movements and competition around this time of the year. It's already a industry norm, from Charles's perspective. So this year is the same, not very different from the other years, really. As for us, our price will also be adjusted, accordingly based on the market competition.
But this year, because we have more reverse logistics and individual parcels, and also, as you know, we continue to optimize our customer structure, our volume structure. All this has helped us, supported us on the price stability side, giving us a more stable ASP this year, and Charles finally mentioned, obviously profit is not just affected by price, but also affected by cost, right? One very significant and important reason for our profitability this year is, we have managed to bring down our costs in the first half of this year. Of course, we're aware that, compared to our peers in China, they still have room for growth to lower our cost per parcel. Meanwhile, we maintain optimistic about continued profitability in our China business. Aaron.
[Foreign language]
OK, let me translate for Charles. So, Charles, Aaron, your second question is about, just to recap, is about the cross-border e-commerce players. I think from where we are seeing that most of these players are still very actively exploring and deepening their presence into the Southeast Asia markets as well as the new markets. J&T, we are the independent 3PL serving all these big platforms. I think as you know, we have very close communication channel with them, and we work very closely with them, and cooperate very closely as well, as they expand. Because I think we also would like on our part, we also would like to capture the overall e-commerce growth, in these markets, because we have ready networks in these markets.
And but for our perspective, it's very important that we continue to be independent, third party express delivery operators, that we serve everyone, and we help to improve and the speed, and speed up the e-commerce industry growth, in these countries. For the first half of this year, as you already see in our report, the company has focused on really building up our efficiency-...
and our network coverage and capacity, for a few reasons, right? For one reason is, we really want these in this to provide very good value and good service and high quality services in these markets, leveraging on our nationwide networks there. And two is, we would like to share this economy of skills and the cost efficiencies with our e-commerce partners, so that more consumers are able to buy better products and get better logistics services in these markets, right? And I think last but not least, we believe in developing this market to alongside with these e-commerce players in achieving mutual success together. Yeah. So Aaron, I hope, translating for Charles, I hope we answered both your questions.
Thank you, Dylan. Thank you, Charles. Very clear. Thank you.
Thank you for the questions. One moment for the next question. Our next question comes from the line of Roy Yuejiang from Haitong Securities. Please go ahead.
[Foreign language] My first question is, the average industry ASP is declining, while the company's ASP remains stable. Can you please share us more details? The second question is: Can you please elaborate on the retail parcel market, including the reverse parcel and the individual parcel? What's the target for J&T in terms of the reverse parcel from the e-commerce platforms, and how to achieve this target? Thank you.
Thank you. Thank you, Yuejiang. So about our China market, Steven will take your question.
[Foreign language]
Yuejiang, thanks for your question. I think for the ASP trend, so I think Steven commented, there are two, really two factors, stabilizing our ASP in the first half of this year. One, while the ASP for the normal parcels have reduced, but our because we have increased amount of reverse logistics and individual parcels, and this increased almost double this year. This has provided a strong cushion and a strong support for maintaining our stable ASP. In addition to that in addition to this, the second factor that Steven mentioned is for J&T in China, our average parcel weight is around 1.08 kilo per parcel. While what we understand for our peers is probably around 0.8-0.9 kg per parcel. This has also affected around CNY 0.1 for each parcel. Yuejiang.
[Foreign language]
Okay. Yep. So what's happening to the domestic China, the reverse logistics and individual parcels, and how are we gonna grow share? And also what is our future development? Steven shared, I think two points. The first point is, currently our, the total volume, by your definition, Yuejiang, I think it's around, we have about 2.5 million order per day, represent about 5% of our total volume. This is very important to us. And because this has doubled from last year, so this has provided good pricing support for us this year. And the second point that Steven shared is that, you know, the, how do we get more returns and reverse logistics and individual parcels?
I think there are really two things. One is improving the service quality. Second is really building our end delivery, our last mile delivery network's ability. We need to really provide good service in order to get more volumes in this regard. So this year, but in the first half, as we shared early on, we have adopted many measures to strengthen our delivery network and our capabilities there. For instance, we provided support for our network partners to invest in automated equipments, so that they can have a better and more stable network.
Second, I think we have promoted the use of unmanned vehicles. And all this is really to encourage our network partners and also the delivery personnel, to develop more time and effort, for customer acquisition and developing, and getting more orders. Yeah. So Yuejiang, I've translated for Steven. Hope that we answer both your questions.
[Foreign language]
Yue Jiang.
Operator, I believe that's the last question we could take. Once again, thank you everyone for joining today's call, and we look forward to have further discussions with you all. And thank you, and have a great evening. Thank you.
Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect your line.