Hello, everyone. Welcome to J&T Express 2026 interim results conference call. I'm Haibin Chen, Director of Strategic Investment and Capital Market of J&T Express. The company's results and investor relation presentation were released earlier today and are now available on the company 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 unaudited non-IFRS financial measures that should be considered in addition to, but not a substitute for the company's financials prepared in accordance with IFRS. I have with me J&T 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 2026. This will be followed by a Q&A session. Please be noted that we have live slides showing through webcast this time. 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.
Okay. [Non-English content]
Hello everyone, welcome to today's result briefing. On behalf of the company, I would like to express our sincere gratitude for your long-term attention and support. I am honored to report on the Group's operational and financial performance over the past six months. In the first half of 2026, the Company achieved two milestone breakthroughs in its global express logistics network. First, in the second quarter of 2026, the Company achieved average daily parcel volume exceeding 100 million parcels in a single quarter for the first time, making it one of the very few express operations in the world capable of handling 100 million parcels on a normalized basis. Second, the revenue contribution from non-China markets increased to 50% for the first time, making the Company's vision of becoming one of the world's best express enterprises has entered a new stage of development.
In the first half of 2026, the Company delivered an outstanding growth performance with sustained and high-quality growth. The Company processed a total of 17.5 billion parcels, representing a year-on-year increase of 25.1%. The Company's total revenue reached $7.67 billion, representing a year-on-year increase of 39.5%. The Company's global consolidated profitability continued to strengthen, with the adjusted net profit of $350 million, representing a year-on-year increase of 124.3%. As the proportion of parcel volume from non-China markets increased, the Company achieved an adjusted EBIT per parcel of $0.25. The operating cash flow reached $640 million, representing a year-on-year increase of 50.9%. We observed that in the first half of 2026, the global e-commerce and express market continued to present abundant opportunities.
In the markets where the Company currently operates, annual parcel volume per capita in Latin America is 18 parcels and 48 parcels in Southeast Asia, compared with 149 parcels in China, indicating considerable growth headroom. To capture the opportunities arising from the globalization of commerce and logistics, in the first half of 2026, the Company accelerated the transfer of China's advanced logistics experience to global markets through multiple dimensions, including global equipment deployment, model enablement, talent provision, and AI-enabled cost and efficiency gains, continuously expanding and optimizing its efficient and stable global fulfillment network. Now, I will present the development of each regional business segment. First, Southeast Asia.
In the first half of 2026, the Company processed a total of 5.52 billion parcels in Southeast Asia, representing a year-on-year increase of 21.2%, achieving outstanding growth performance, with market share further increasing to 38.1%, representing a year-on-year increase of 5.3 percentage points, maintaining a leading market position. The Company continues to serve as a core logistics partner for multiple mainstream e-commerce platforms, including TikTok, Lazada, Temu, and Shein. Fully capturing the growth dividends from the e-commerce sector. The company is further upgrading its service systems across Southeast Asia. Firstly, actively expanding its fulfillment and warehouse services to provide customers with supply chain solutions tailored to different industry characteristics, thereby enhancing stickiness between platforms and merchants. Secondly, driving brand image upgrading and rolling out a star rating system for carriers to improve the shipping experience for non-platform customers.
Thirdly, simultaneously advancing automation upgrades at sorting centers and service outlets to better meet customer needs for capacity, fulfillment efficiency, and scalability. Second, China. In the first half of 2026, the company processed 11.62 billion parcels in China, representing a year-on-year increase of 9.6%, achieving growth above the industry average in a complex market environment, with market share increasing to 11.6%, representing a year-on-year increase of 0.5 percentage points. The company drives quality growth in China through refined operations, strengthening the network foundation by dispatching professional teams to deeply participate in the operational management process of last-mile networks. So as to enhance the overall network service level, extending deeper into industrial chain to provide specialized solutions that better match the shipping needs of industry merchants and brand customers. Increasing the proportion of technology elements in production and operations.
With the number of unmanned delivery vehicles deployed across the network significantly increased, and AI applications such as AI customer service comprehensively upgraded. Finally, other markets. In the first half of 2026, the company processed 360 million parcels in other markets, representing a year-on-year increase of 119.9%, with market share increased to 8.9%, representing a year-on-year increase of 2.7 percentage points. The company simultaneously deepened cooperation with global e-commerce platforms such as TikTok, Shein, Temu, Dewu, and AliExpress, as well as local e-commerce platforms such as Mercado Libre. The company is advancing expansion of network coverage in other markets. On the other hand, actively investing to boost capacity to meet strong express demand. On the other hand, combining export of proven models with localized innovations to explore and iterate effective last-mile fulfillment cooperation systems suitable for different markets, achieving synergistic improvement in management efficiency and regional adaptability.
Today marks the company's 11th anniversary. Looking back, the company has delivered on its growth promise with sustained high-quality growth. Looking forward, we remain committed to reinforcing our global network infrastructure, further leveraging China's proven experience to empower our worldwide aspirations, and continuously optimizing our end-to-end operational efficiency and customer experience. We believe that only by persisting in doing the difficult by right things, and by taking root and cultivating deeply in every market we serve, can J&T grow into a healthy and long-lasting enterprise, and reward the continued support of our investors. Thank you. Next, I would like to invite CFO Dylan to present the financial data for these interim results.
Thank you, Haibin. Thank you, Steven. Thank you all for joining today's conference call. Next, I would like to present the key financial highlights of the group. As always, please note that unless otherwise specified, all the figures are in US dollars, and the percentage changes represent year-on-year changes. The group's detailed financials, unit economics, cash flow, capital expenditures have all been disclosed on our Investor Relations website, ir.jtexpress.com. Here, I will only briefly summarize the group's core performance highlights for the first half of 2026. Now looking at this page. Overall, the group's revenue for the first half of 2026 increased from $5.5 billion in the same period of 2025 to $7.7 billion this year, representing a year-on-year increase of 39.5%. Core express delivery revenue increased from $5.3 billion to $7.5 billion, representing a year-on-year increase of 39.6%.
The core driver of the growth was the rapid growth in the parcel volume from non-China markets, driving the related revenue contribution for 43% in the first half of 2025 to 50% in the first half of 2026, representing a year-on-year increase of 7 percentage points. This is the first time that our non-China markets revenue have reached this historical high of 50%. In terms of region, the revenue from the China segment in the first half of 2026 increased from $3.1 billion in the same period of 2025 to $3.8 billion this year, representing a year-on-year increase of 22.4%. Revenue from Southeast Asia segments in the first half of 2026 increased from $2 billion last year to $3 billion this year, representing a year-on-year increase of 63.8%.
Revenue from other market segments in the first half of 2026 increased from $0.36 billion to $0.72 billion this year, representing a year-on-year increase of 99.3%. Next, turning to our profitability. The group continued to advance its strategic upgrade, where we continue to empower our regional business development and centrally coordinate resource allocation and implement centralized management and resource sharing with the aim to unlock economies of scale and enhance the cross-regional synergy. Accordingly, profitability-related metrics have been adjusted to be disclosed at a group level to objectively reflect the overall competitiveness of the group's resources. The group's profitability continued to strengthen in the first half of 2026. Gross profit was $1.01 billion, representing a year-on-year increase of 88.4%, with a gross margin rising from 9.8% to 13.2%, representing a year-on-year increase of 3.4 percentage points. Next, an adjusted EBIT.
Our adjusted EBIT reached $430 million, representing a year-on-year increase of 121.7% with adjusted EBIT margin of 5.7%, which is representing a year-on-year increase of 2.1 percentage points compared to last year. Finally, our adjusted net profit. Our adjusted net profit was $350 million for the first half of this year, which represents a year-on-year increase of 124.3% with adjusted net profit margin of 4.6%, representing a year-on-year increase of 1.7 percentage points. Next, turning to our UE. In the first half of 2026, our group's revenue per parcel was $0.44, representing a year-on-year increase of 11.5%. Our adjusted EBIT per parcel was $0.025, representing a year-on-year increase of $0.011 or 77.2%.
The China market saw more rational competition under the anti-involution policy, while the rapid growth in the parcel volume from our non-China regions with higher profitability contributed to the continued improvement in the group's per parcel profitability in the first half of 2026. Turning to our balance sheet. In the first half of 2026, our net cash flows from operating activities was $640 million, which represented a year-on-year increase of 50.9% compared to $420 million in the same period of 2025. This reflects our significant improvement in our cash generation capability. As of June 30, 2026, the group maintained a strong cash position with our cash and cash equivalent restricted cash and bank wealth management products total $2.91 billion. This represents a year-on-year increase of 64.2% from $1.77 billion in the same period last year, which also included a $1.25 billion in the bank wealth management products.
Finally, I would like to turn our commitment to shareholders' return. The company has always placed great emphasis on shareholders' return. In the first half of 2026, we completed repurchase of 99.32 million shares, and we canceled 115 million shares on August 12, 2026. On June 25th of this year, we also announced that the Board has approved new share buyback, increasing our repurchase amount to HKD 2 billion . We continue to deliver shareholder returns at the back of our strong financial performance. All in all, the above are some of the key financial highlights of the group for the period. Thank you for your attention. I turn my time back to Haibin.
Okay, now we can open the question to the analyst.
Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. To ask questions on the phone, please press star one one and wait for your name to be announced. One moment for our first question. Our first question comes from the line of Lu Sijia of Changjiang Securities. Please ask your question.
Okay. [Non-English content] operator. Charles, Steven, and Haibin, [Non-English content]
[Non-English content] Let me translate myself.
Hi Steven, Charles, Dylan, and Haibin. Thank you for taking my question. Congratulations on very strong performance in the first half. My question is on Southeast Asia. We continue to see very strong parcel volume growth in the first half. The market is quite focused on the sustainability of this growth. How should we think about the parcel volume growth trajectory in the Southeast Asia going forward? Thank you.
[Non-English content] Charles. [Non-English content]
Yeah. I will translate for Charles. Thank you, Sijia. Your question is about Southeast Asia, the future growth potential. Charles was saying that we continue to believe that the e-commerce and express delivery industry in Southeast Asia will continue to remain in a very rapid growth trajectory. With e-commerce platforms, we continue to invest very actively into the region. According to the industry consultants' data, both the social e-commerce and the express delivery industry in Southeast Asia would be expected to grow at approximately 35% in 2026. They are also projected to maintain a high- double-digit CAGR over the next five years. From the company perspective, we are very confident that we will grow faster than the average industry growth.
We have also observed that alongside the booming and development of the e-commerce platform, the demands of the logistics service quality, the logistics efficiency, the network stability, the capacity, all these expectations and the demand is also increasing. Leveraging from our robust network capabilities, we continue to benefit from the development of the e-commerce on one hand. On the other hand, we continue to help our e-commerce customers and platform to expand coverage and also to stimulate online consumption, thereby achieving healthy and sustainable development for the entire express industry in Southeast Asia. Of course, Charles also emphasized that other than e-commerce, we will continue to actively expand our non-e-commerce, or we call it the non-platform parcels.
So the demand explanation for [inaudible] in the region is still at a very early stage, and will serve as an effective supplement to our parcel volume growth over the long term into the future. That is Charles' response Sijia
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Questions. One moment for our next question. Our next questions will come from the line of Fan Qianl ei of Morgan Stanley. Please ask your question. [Non-English content]
[Non-English content] So let me translate for myself. Thank you, management, for taking my question, and congratulations to the very strong profit growth. My question is about the CapEx outlook for this year and next few years. Specifically, can you please break down by region when guiding about outlook? Thank you.
Okay. Qian lei, [Non-English content] So I will use English to respond to your questions. The CapEx, we have seen a investment CapEx increase in the first half of the year in response to in tandem with our expansion and also the high volume growth across our regions. Our CapEx, as everyone know, is primarily allocated to automated sorting machines, equipment in our sorting centers, vehicles, sorting equipment at our outlet level, as well as in terms of IT and AI spendings. All this will deliver immediate benefits for efficiency improvement and cost optimization. To your point about the breakdown by regions, obviously we start with Southeast Asia.
Southeast Asia, we continue to see strong demand of our business there, and we have allocated CapEx to commensurate with the high growth in this business. In terms of the geographies that we spend more in Southeast Asia, it will be Thailand and Vietnam, where our parcel volume has grown rapidly over the last few quarters. Next, for the other markets. The other markets, we also have seen strong demand, just like what Steven mentioned. The parcel per capita in the other markets, especially LATAM, is still very low. We continue to invest in our capacity there. The specific market that we have done quite a bit of CapEx spending is Brazil, where our parcel volume has also grown rapidly in the last few quarters. That is one area in terms of our demand.
Adding on to that, just to maybe add more color as well for Southeast Asia, other than the sorting centers and the vehicles, we also have continued to build out our last- mile automation capabilities in our Southeast Asia, which we now have 38% + market share. We are deploying more automated equipment across our outlets, enhancing the efficiency of the couriers, the outlet processing and the management personnel. Among our 10,800 outlets in Southeast Asia, right now we have only several dozens of automated equipment that we deploy. Compared to a few thousand in China, there is a significant room for us to invest in this space, and we continue to do so over the next few years. Next, moving on into China, which is another big area where we spend our CapEx.
We are focusing on our investments on more advanced sorting centers, to drive upgrades and also to refine the density of our network. In first half of this year, we continue to advance the construction of our new Yiwu, Zhejiang sorting centers. We have benchmarked to our domestic peers in terms of efficiency and service quality, and we continue to upgrade at the critical geographies or hubs in China in building out our own sorting centers, and Yiwu is one of them. Finally, I think for the new markets, I think we have mentioned before that we will use the asset-light operating model in the newly entered countries to manage our return on investment of our investment deck. At this moment, is actually quite low in proportion in terms of the investment at this phase.
Overall, our CapEx spend, we are expecting this year we will spend about $800 million to $900 million of CapEx all in all, slightly higher than what we have guided early on this year. Qian lei.
Thank you. Thank you very much, Dylan.
Thank you for the questions. Our next questions will come from the line of Steve Chu of Goldman Sachs. Please ask your question.
[Non-English content] Steven, Charles, Dylan, Haibin. [Non-English content]
Good afternoon, management, and thanks and congrats on the very strong results. My question is on your other markets, especially Latin America. Understand that your revenue and shape of volume growth remain robust and some innovative initiatives in your business model, such as the last-mile fulfillment networks in these markets. Can management please explain how this model differs from the approaches that we use in Southeast Asia as well as China, and provide an update on our current business progress? Thank you.
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Thanks Steve. I'll translate for Steven for this question. Steven was saying that obviously we see very clear opportunity in the European and the American markets, where the global e-commerce platform, they are also expanding rapidly into the regions, and they bring us very clear and also substantial demand of our services. At the same time, Europe and America are also the regions with the highest consumption levels globally. The e-commerce logistics there offers a very high profit potential for the future. Through our experience in Southeast Asia and Latin America in recent years, we have combined our business model as well as experience with the localization, and we have come up with this new asset-light operating model as we expand our footprint.
What he meant is in the early stage of entering, when we enter into this market, we will choose to cooperate with the market players who possess local resources and also operational experience. These partners are familiar with the local market environment, and they know the region well, and they help us and help to rapidly improve our operation efficiency in the new market environment so that we can achieve better input and output rhythm as we expand. We will continue to explore whether this model can help our expansion into these new countries, such as Europe or maybe even America. In terms of where we are, the status, we have already begun assembling core teams and advancing preparation work or market feasibility studies for our operations in Europe and America. Entering Europe will be similar to our initial entry into Latin America.
In terms of the geographies, Steven mentioned that we will start with the countries such as U.K., France, Germany, Italy and Spain, and then gradually expand the coverage from the other Europe regions. However, it is not going to be a fast process. He also added that we expect this to take probably another one to two years before we can see some results, and we will provide timely updates to all of you as we make progress. Steve, hope we answered your question?
[Non-English content] Dylan.
Thank you.
Thank you for the questions. Our next questions will come from the line of Liu Gangxian of CICC. Please ask your question, [Non-English content].
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Thank you everyone for taking my question. Again, congratulations on your good results. I'd like to follow up on our progress for non-platform parcel in Southeast Asia, if volume scale, growth, and auto [inaudible] customers. If you can share with us more color about where this business stands right now, how big is the already increasing demand and how do we expect for future demands? Thank you.
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I will translate for Charles. Charles was saying that as mentioned in question one, we continue to develop the non-e-commerce or we call it non-platform parcels in the region. He also added that it is not just in Southeast Asia, but also all the countries that we operate. We have also started focusing on this, just that Southeast Asia is just slightly more advanced in terms of the development. I think overall, this is one of our core strategy of the group going forward to improve our long- term overall profitability into the region. This is going to be a direction that we continue to pursue in the next few years. In the first half of 2026, we have worked systematically to advance the improvement of the quality service of this to support our growth in the non-platform parcels.
So there are four areas. The first area is in area of product planning. We further expanded time-definite products, such as same-day delivery and next-day delivery to the non-platform parcels. We also developed customized products, such as price-guarantee services, to enhance our service offerings. The second thing is that we continue to optimize our in-store parcel-sending experience. In the first half of this year, we strengthened the brand image of our street-side outlet, established standardized parcel-sending areas, and continued to enhance customer convenience, to allow them to drop off their parcels more easily in our outlets. This is also to enhance the overall experience with us. Thirdly is door-to-door pickup. We have advanced our last-mile's efficiency improvement and continue to optimize our courier incentive mechanism. Charles added that it is very important that our couriers they are motivated to develop this non-platform business as well as deliver this business with high quality service, because they are a very essential part of our network.
The last and not the least, number four we call Type B in China we call it Type B, outside China we call it monthly-settlement or regular-settlement key accounts. For these key accounts, in the first half of this year, we also continued to improve their experience with us starting from contract signing, the onboarding experience also the accounts receivable, how do we shorten the accounts receivable cycle, such as COD. How do we have fastest remittance of COD into their hands. As Charles mentioned, logistics services are not just about providing logistics, but also about enhance [inaudible]. Therefore, in the first half of this year, we invested a lot of effort across various regions to strengthen overall onboarding and customer experience, and we hope to improve the speed and efficiency of cash flow. This way, we can generate more logistics services and provide a better experience for our customers. That is my overall response to your question Gangxian
Very helpful.
Is there anything else?
Very helpful. Thank you. [Foreign language] Charles. [Foreign language] Dylan.
Ready
Thank you for the questions. Our next questions will come from the line of Shi Mufan of JP Morgan. Please ask your question. [Foreign language].
[Non-English content] I will translate for myself.
Thank you management for taking my question. My question is regarding the China market. J&T's first half growth in China outperformed the overall industry. Against the backdrop of anti-involution policy, how shall we think about the volume growth for J&T as well as the overall industry? If possible, can management share the outlook for the second half in this year and maybe next year? Thank you.
[Non-English content] Charles。
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[Non-English content] Charles. Thanks Mufan. Under the advocacy of anti-involution policy in China, all the growth rates of the China express industry has becoming more and more healthy and steady. All the industry players, including the company, we continue to center our core development team in terms of quality optimization, cost reduction, efficiency improvement, continuously to enhance service quality. All these are centered around the theme of quality growth. What we are doing specifically for our China headquarter, our China country team, along with the regional sponsors across our China regions, we continue to empower the last mile network build up. Our teams deeply engage in the entire process of this management and working very closely with our franchisees to strengthen their operational foundation. As everybody know, it's very important that we have strong franchisee base.
Overall, all this stronger network quality has helped us to win new customers in the first half, reduce our customer churn, and also increase our customer satisfaction. This is a collaborative effort between our China country team as well as regional sponsors, as well as our franchisees in China. Other than that, Charles also mentioned that we continue to strengthen our presence in certain industry focus. With certain industry focus, providing in addition to general services, we also have targeted certain industry with unique customer needs. We have tweaked our service delivery model to cater for their needs, to make sure we provide solutions which are appropriate and which are also demanded according to their business circumstances. Industries such as beauty and personal care and 3C are some of the examples of our key focus in the first half this year.
All these are built on our experience in some of the other industries such as agricultural specialty products, which we have experienced significant growth in the previous years as well. Last but not least, Charles also added that on the customer diversification point. Other than obviously working on franchisees and also working with the industry groups, industry focus, we also continue to work on higher our returns, the business on the returns, as well as individual parcels. We continue to work with this group and continue to deepen our service offerings and our reach and our operating capabilities in this area, including our brand customers and individual parcels. All these in combine have helped us to deliver a stronger first half against overall industry growth. As you can see, our market share continue to increase in China as well. Mu fan, hopefully we have answered the questions.
Very clear. Thank you, Charles and Dylan.
Thank you for the questions. We will now take the last question from Zhu YuBo of Caitong Securities. Please ask your question. [Non-English content] .
[Non-English content]
OK, let me quickly translate that for you. Our group EBIT per parcel will come in better than the guidance given at the start of year. How should we view the future trend of group EBIT per parcel? Thank you.
[Non-English content] This is a finance question, so I will answer. [Non-English content] As we continue to replicate our experience and our capabilities of our business and our ability in China, as we replicate it across our business, we have achieved a refined operation management and improved efficiency across all our regions, enhancing our group's overall resources allocations, cost control and network economy of scale. In the first half of 2026, as you can see, our parcel volume in Southeast Asia, in other markets have grown rapidly. It is an increased proportion of the total parcel volume, and this drives our group's EBIT parcel to increase 77% year-on-year to $0.025.
This is really a change of the mix that as we continue to, and our non-China parcel volume increase, our overall EBIT parcel will continue to increase. As you can see from growth rate as well, our Southeast Asia growth rate, as well as other markets growth rate, is a lot higher compared to our China growth rate. Going forward, we expect our group's comprehensive profitability will continue to increase. And $0.025 will also gradually increase in the future. [Non-English content]
[Non-English content] Dylan。
[inaudible]
Thank you. We have no more questions from the line. I would like to hand the call back to management for closing.
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That does conclude today's conference call. Thank you for your participation. You may now disconnect your lines.