Hello, and welcome everyone to attend this J&T Express 2023 Q3 business update conference. This is Diana. Presentation materials for the meeting will be distributed by email and uploaded to our IR website. Joining us today from the management team are Dylan, CFO of J&T Express, and Haibin, Director of Investment and Capital Markets. The session will consist two parts. First, Haibin will introduce the company's business performance for the third quarter of 2026. Next, we are going to proceed to the Q&A section. The management is going to be answering your question now. Over to you, Haibin.
Hello, and good morning, everyone. Thank you for joining J&T 2026 Q3 operational results presentation. Now I'm going to be walking through the performance of the quarter. The group's total parcel volume in Q3 of 2026 reached 9.584 billion pieces, representing a year-on-year increase of 24.8%.
Average daily parcel volume stood at 104 million. Average parcel volume exceeded 100 million pieces for two consecutive quarters, and our leading position in Southeast Asia market remains solid. The market share and industry ranking in China market has further improved, whereas the Latin America standing in particular. With the rapid growth of the business volume in Southeast Asia and other markets, the proportion of parcel volume from other markets outside of China reached 33% in Q3, representing a year-on-year increase of 5.6%. Please allow me to talk about the Southeast Asia. The total parcel volume in Southeast Asia in Q3 reached 2.88 billion pieces, with average daily parcel volume of 31.4 million, representing a year-on-year increase of 44.5%, which is against the very high base of the same period last year. First of all, e-commerce industry in Southeast Asia is still on track of rapid penetration.
Macroeconomic fluctuations have not altered the long-term growth momentum. We have been seeing also continuous investment locally, launching promotions and shipping and campaigns. At the same time, we've been seeing the very good growth dividends of the e-commerce. At the same time, we've been seeing also the merchants and product categories driving high growth for both e-commerce clients and company. At the same time, the company keeps expanding the regional network capability and fulfill capabilities and advancing the automation upgrades at the service outlets and to further lift automation levels. At the same time, we have been robusting the network capabilities and the price advantages and widen our gap versus our competitors. Last but not least, we have the strategy of develop non-platform parcels with continuous improvement in the product planning capacity, the service quality and brand influence, non-platform parcel also grow. Next in China.
The parcel volume in China in Q3 reached 6.42 billion pieces with average daily parcel volume of 69.9 million pieces, representing a year-on-year increase of 15.3%. In China market, we outperformed the industry average. Industry average registered aggregate growth of 4.6% from January to August of 2026. The growth focus on China industry has shifted from pure pursuit of parcel volume into the sustainable growth, in terms of scale and quality and efficiency. Year to date, our parcel volume growth in China is very steady. At the same time, we've sanctioned on the network expansion, improve timeliness service quality and cost control capabilities, and boost technology empowerment. At the same time, we improve the satisfaction level and stickiness of the customers, and our brand image among premium and brand customers have improved markedly.
We also kept optimizing the customer portfolio, explore the diversified customer resources, targeting consumers in the higher volume and high-value categories such as parcel, the apparels, beauty, and 3C products, as well as the niche markets, including specialty agriculture and the others. We have a very good growth year-over-year. Also focus on the higher growth of the quality as well. Other markets, the parcel in the other markets in Q3 reached 271 million pieces with an average daily parcel volume of 2.9 million pieces, representing year-on-year increase of 159%. The parcel growth in our markets has been realized in seven consecutive quarters in terms of the growth. We have the several overall reasons.
First of all, the high per capita GDP and consumption levels, yet e-commerce penetration remains low, and per capita parcel volume is far below that of China and Southeast Asia, leading to a very good ample room for the further potential growth. We have local e-commerce penetrations rising steadily as well as the subsidy and promotions. Second of all, we have been seeing the company continuously expanding their operation expertise from China and Southeast Asia market and other markets. At the same time, we have been seeing the delivery efficiency to be improved, lifting overall network efficiency and enable the company to capture the e-commerce and cross-border logistics opportunities such as Latin America and Middle East.
At the same time, our quality of service and capacity in Latin America has been recognized by customers, and our partners have been also showing a very good collaboration and also performance, including TikTok, SHEIN, Temu, Kwai, et cetera. We have been continuously broaden business footprint in emerging markets. We kept expanding into the country with Latin America and actively entering the countries such as Europe and the United States and brought further parcel volume growth. In shareholder return, company continued to reward the shareholders with the buybacks. As of September 30, we have already repurchased 267 million shares since the listing and buyback reached 2.2 billion Hong Kong dollars in total. Also, the HKD 1 billion buyback maintain a mandate approved by the board of directors, and we have been seeing 0.86 billion executed.
On June 25, 2026, we have announced the approval of a new buyback program, raising the buyback limit of HKD 2 billion. As the end of September, HKD 0.77 billion have been also executed. At the same time, we are paying attention to our performance. We understand that you are closely interested in Q3 of financial results. Regarding financial figures, the company only disclosed the semi-annual and annual reports. Therefore, the company generally does not update the performance guidelines as the quarter basis, and the guideline is still the same and valid since August. Exchanges is only limited to operational data, and we will not discuss the financial figures. Thank you.
Now we are going to open up for questions. The first question is from Zhu YuBo from Caitong Securities.
Hello, everyone. All right.
Good morning, dear management and dear IR management. My question is that you have been actually delivering a very good performance than the guidance that you have just provided in the beginning of the year. What is outstanding is the new emerging markets and new markets as well as the other markets. In these two regions, we have been seeing a very rapid growth. I would like to understand the major reasons behind and what is the major drivers behind. At the same time, under the such high base in Southeast Asia, you enjoy such a high growth as well. In terms of the overall structure, would you like to expand further with us?
All right. Thank you very much, Mr. Zhu, for joining our conference call. As what you can see here in the Southeast Asia market, we have been seeing a very wonderful performance as always.
As I have already said that the macroeconomic and the macro trends stay the same. At the same time, we have been also enlarging our gap with our competitors, and we have been seeing more dedication investment from the platform. We have been seeing very gladly that since this year, for some of the new and the emerging e-commerce platform or those just general performed e-commerce platforms in Southeast Asia have been accelerating their growth using direct operational business model. Then we enlarge the customer base in Southeast Asia market, bringing with us new opportunities for the growth. These are some of the new changes of Southeast Asia market. Also for the new markets and emerging markets, as you can see that we have been investing a lot and enlarge the overall growth.
This is a blue sea market as we believe that the per capita parcel volume is still on the track of the growth. At the same time, we have been seeing a very good destination and dedication. In Q3, in Latin America market and some of the other regions, while we are improving our capacity, we are also improving the quality of service as well. There is a demand, and we are able to have a very good fulfillment of the contract and also the performance so that we are enjoying, because of those benefits and because of those efforts, enjoying the dividend. Okay. Next, I would like to talk about China. You can see that this is outperforming than the overall industry average.
We have been doing a lot of works here in China as well in terms of the franchisees and in terms of the quality improvement of the point of service. We have been implementing solutions to solve the pain points and improve our mindset and image among the customers. At the same time, you can see that in terms of the network and also the particular franchisees, we have been empowered with them. For instance, the point-to-point help and the facilitation in terms of management, et cetera, upgrade their overall capabilities. At the same time, enhance our network capabilities as well. We are benefited because of these efforts.
Understood. Thank you very much, Haibin. I do not have any further questions.
Thank you very much for your question. Now we have the question from Brian Gong from Citi.
Hello, Dylan and Haibin. Good morning.
First of all, I would like to congratulate on such a wonderful performance and data. I would like to understand the China region. Now we have been enjoying very good growth. While at the same time with such a wonderful growth and the overall volume growth, we can see that this helped the overall performance to be further increased for the whole year. What is your expectation for the peak season? Next is about the emerging and new markets. I would like to understand that, is it possible for you to talk to us about this exploration progress in the new markets?
Of course. Thank you for this question. Let's talk about the China region. You can see that in China, we've been growing a lot in terms of the parcel volume.
In Yue, you can see that since the beginning of the year our government and regulators are actually promoting the anti-involution campaign. Because of the increase of the oil price, we've been seeing a little bit price increase in the beginning of the year. In the later part of the year, this anti-involution as the major direction remained the same and steady. At the same time, we've been seeing some of the news that in Guangdong, Yue, Henan, Hebei province, and Shanxi province, they've been having internal meetings in the industry and emphasizing on a significance on the pricing stabilization. I believe that this is pretty much helpful to the profitable guarantee of year one.
At the same time, you can see that we're going to give announcements of the financial figures by regions, but still, in terms of our peers, they're actually having very performative performance, and we are pretty much enjoying dividend. With such a good growth in Q3, at the same time, we are actually making readiness of our preparations for Q4 in terms of the peak season. In terms of capacity and also the service quality, I believe this is going to be of great help to our peak season performance. In terms of the new market, I believe that Dylan is now in Europe, so probably we can have Dylan answering the question related to the new markets.
Of course, not a problem. This is Dylan speaking. Thank you very much for this question.
At the current stage, as I have already said, that we are now still making efforts in actually preparing for the explorations of the new markets. In the first half of the year, we've been seeing actually a new area of South America being explored, and now we are preparing for Germany and the U.K. as the two countries in Europe, and preparing for the network. Overall speaking, the demand is pretty huge. If you're talking about the South America and the Middle East, and the South Asia markets, they also are trying to position their services and their product sales in Europe. We are coping with these customers from South Asia market, for instance, and also we are going to build up our overall network coverage according to the total volume required and demanded by our customers.
This is actually the phase one of our exploration in new countries. In the second phase, we are going to have even asset-lightweight to actually further help to work with some of the delivery service points to be our franchisees. At the current stage, we're still at the phase one in trying to hire the terminal kind of courier service providers. I believe that this would be the most efficient way in terms of the collaborations in the new markets, be it the Colombia, that we are preparing for the first half of the year. Then we have the U.K., the Germany, these new countries in the Europe, we are actually using this business model and collaborative model.
Thank you very much for the answer.
Thank you for the question. Now I would like to wait for the next question.
Next question is from [Elmer Pan] from Minsheng.
Hello, Haibin and Dylan. Hello, IR team. Good morning. Today, my question is, we're still having another two months ago for 2026. As for the growth decrease in Southeast Asia and the acceleration of the growth in Latin America, probably it's difficult for us to expect for the next year of these two markets. Would you like to talk to us about the overall opinions of the growth rate expected for 2027 for Latin America and Southeast Asia markets?
All right. Thank you. Thank you very much, [Elmer], for this question. As for the expectation and outlook of next year, according to our principle, we're going to do that during this annual performance announcement of 2026. But I would like to talk to you about the overall opinion. Just now you said the growth reduce in Southeast Asia market.
Actually, it's not a correct wording. We're still growing a lot in Southeast Asia market. You know that the base number of last year was very high as the region with tens of millions of parcels on daily basis. If you want to actually maintain a very high growth, this is not scientific. We're still having a very quick growth in Southeast Asia market. As what's said in the guidance, this year, we are going to have 50%-55% of the growth as the overall guidance of this market. Hopefully that we're going to reach to the upper limit and giving you a better response. Thank you. Next one is that for Latin America, as we have already provided in our guidance, we are upgrading this overall expectations to 100% and 120% growth for the Latin America.
As what we have just now offered, it is a very strong growth in Latin America. We have a younger population with a better per capita GDP and also better consumption habits. Now in the news, be it we're talking about the Brazil or Peru, we've been seeing actually the new infrastructures of the ports that are going to be built and constructed. They have everything to do with the help of Chinese government. If that's the case, we're going to have better and more Chinese goods exported to Latin America, and this is going to be improving the overall figure of the per capita and the average daily parcel. Third of all, you can see that the overall kind of growth momentum and the environment in Latin America is going to be better than other Southeast Asia markets.
We have been absorbing a lot of experience in Southeast Asia. No matter for the non-platform parcel or the collaboration with the local partner, for instance, e-commerce platform, Mercado Libre in Latin America, they have been emphasizing more on a collaboration with us. At the same time, we are also trying to improve our capacity there and further invest in LATAM. This is going to be for the year fulfilling our overall target.
Thank you very much. I do not have any further question from my side.
All right. Thanks a lot for the question. Next question is [Sufan Jia] from CICC. Please, you may have the floor.
Good morning, Dylan and Diana and Haibin. I have a question. Just now in the conference call, as you have already mentioned, for the non-e-commerce platform, I mean, non-e-commerce business, I would like to understand the overall situation.
Are you going to talk about some of the percentage of the non-e-commerce parcels from Southeast Asia and for the next several months, what is the overall target of the overall growth?
All right. Thank you very much. Sure. Let me answer this question for you. As what had been just now mentioned, in Southeast Asia market, the marginal growth is pretty good. The primary reason as to we have already indicated that in the roadshow that, talking about this and Lazada and Duoduo, while they are getting connected, they actually provided a lot of supports in terms of the marginal growth for the platform parcels. For non-platform parcels and businesses, we have been making efforts as well. For the non-platform parcels, we are actually getting a very good explorations of the key accounts.
In terms of the overall growth, this is going to be less intense than the e-commerce itself, but still we will be seeing a volume growth and very good momentum as well. At the same time, we are actually trying to optimize the infrastructure building, and on the network side, we have been promoting the automation level and the service quality and the level of service, so the delivery guys are able to actually absorb more parcels and platform parcels as well. So I believe that for the non-platform parcels, we are going to have a huge space in the future. While we are organizing the non-platform businesses, except that we are going to improve the capability of the parcel collection. At the same time, we want to actually make sure that the businesses and services like the delivery upon next day or the same day can be further enhanced.
So we have a strategic collaborations with SF Express. In terms of the commercial parcels and non-platform parcels, SF Express is very much experienced. In the past, in Southeast Asia, SF Express actually delivers to the whole group to help to implement. So we are going to get a lot of supports and learnings from SF Express, to actually make the non-platform parcels business in a much better way. So at the same time, for the non-platform parcel business in Southeast Asia, we are going to improve the percentage and market share. The overall development logic of the non-platform is not the same as platform parcels. For platform parcels, it is quite singular and the customers are quite concentrated. But for the non-platform parcels, we are talking about SME customers. The SME customers in terms of their understanding and acknowledgement of our images, this is totally different.
Let me give you example. In Southeast Asian countries, some of the logistics companies are not performing quite well or even making losses, but some of the local dwellers and citizens still believe that they are the priority that they want to choose. This is something that we want to actually make a turn and change. With time, our flywheel is going to be spinning at a higher speed of rotation. In the future, the particular non-platform parcel business in Southeast Asia market will be quite performative. Thank you.
Thank you very much for this question. Next we have the question from Lin Mujin from CITIC.
A Ll right. Hello and good morning everyone. This is Lin Mujin from CITIC, and thank you very much for this opportunity.
Would you like to speak up a little bit more?
Is it good now?
Yes, of course.
As the announcement showed, we've been seeing the announcement that some of the peers are actually having the project established in the Southeast Asia market. We would like to understand that, how would you like to try to understand this major business model of this business? Next, whether or not you're going to explore the other markets with the similar business model that we have just talk about. The second question is about the Southeast Asia market. I would like to understand the overall plan of the capacity in Q4, how to think about your positioning as well.
Right. Thanks very much, Mujin, for the question. For the first question, I would like to clarify, are you talking about this news of [TTE] in Vietnam, right? Yeah, this is not approved, but I just heard that news as rumor. Yes.
I think that for that news report, we've talked with some of the third parties, and I believe that this is a follow-up issue of this licensing granting. It is like, the [TTE] would like to actually build up this management platform of logistics businesses, and they're actually claiming this in the application form with the government. At the end of the day, the CTL is going to operate everything. They want to make sure that their logistics is becoming more efficient and better managed. In other regions, I think that there are actually similar situations going on, and they are going to build up some warehouse for the management and need to fulfill the contract. Even some of their contract, I mean, their warehouses are going to be operated by the third party.
Another thing that I want to showcase with everyone is that on the e-commerce platforms, their attitudes towards the logistics are that they want to actually separate those businesses out for most of the cases. One of the biggest e-commerce platforms is actually trying to divest and spin-off their overall assets of the logistics. They want to have more focused resources on the e-commerce and the algorithm growth, et cetera. You know that logistics is a businesses that is asset-heavy and that is very much different from the e-commerce business itself. Second question is about the overall plan for the capacity in Q4 in Southeast Asia market. I don't think that this is only the overall plan for the whole quarter, and the current stage, the total volume of the parcel reached 47 million. Now we have a new kind of a particular capacity coming out.
Our overall capacity is going to reach the peak during the peak season. Further, we are talking about 50 million to 60 million parcels on the average daily basis in the long run. According to the seasonal and quarterly growth in Southeast Asia market, we are going to plan the capacity in advance so as to satisfy the ever-growing demand of logistics as well as the courier service of e-commerce parcels.
All right. Thank you very much. No further question from my side.
Thanks a lot for this question. We would like to actually take the very last question from the line. The very last question is from Yi Tan from Guosheng Securities.
All right. Hello, everyone. Now, I would like to have a follow-up question on the capacity planning. In terms of CapEx, you had an update during the announcement season.
In other markets, in terms of the overall growth, this is actually higher and better than the updated guidance. I would like to understand that if that is the case, whether you want to increase your CapEx, and about what is the overall distribution plan across different regions in the world?
Yes, Dylan, please. You can answer the question.
In August, we have just provided our overall guidance on the updated and adjusted CapEx. It is still not a long time after this, so we just maintain the guidance the same. Also, another thing I want to talk to you about is the capacity in Southeast Asia market. You can see this performative data. At current stage, we are increasing the service points number, and we are going to enhance the automation level. But on those network side, the CapEx is not incorporated into our CapEx.
For instance, Southeast Asia market, some of the CapEx is shouldered by the overall partners. I think that at the current stage we are going to have a dynamic upgrade of everything, and this is pretty much well illustrated already.
Right. Thank you very much. We have a new question coming in. The question is Orlando Hong from CLSA.
All right. Good morning, everyone. The question is DT building this particular transportation center in Vietnam. Would you like to actually talk about this, if DT is going to be establishing this transfer center in Vietnam and whether that is going to be impacting your profit of parcels in Vietnam?
Okay. Orlando, just now, as I have already said that for our customers, they want to build up the transfer center in order to actually manage their partners and the vendors in a much better way, because we know that we have secondary and tertiary vendors as well. As for the quality, the fulfillment efficiency, and the time efficiency, we need to manage them. This pretty good news is pretty much in line with that model. It is actually a management platform instead of a contract fulfillment platform. For J&T Express, as long as that in Southeast Asia market, the overall kind of facilities and service capabilities are pretty much good. We are really confident that in this particular payment and in terms of the overall fees, we are going to take a very good percentage against the partners in Southeast Asia market.
Right. Thank you very much. Now we would like to take the next question. Now, we have Fan Qianlei from Morgan Stanley asking a question.
All right. Hello, and good morning, everyone. I have a question because recently in the news, we've been seeing that there is actually an oil shortage of supply in Indonesia and people need to queue for a very long line to get the oil refilled. We know that you're not going to change the guidance. Comparing with the first half of the year, as you have mentioned in the interim result announcement that at the current stage you have been sorting out the mechanisms of this additional oil cost. But I think that this businesses is actually more difficult to run than the first half of the year. We've been seeing a higher price for the refined oil.
At the same time, I think that at the current stage, this particular macroeconomic situation is not that boiled. I would like to understand that you have been sorting out what's going on for mechanisms, but still you're having a very stressful days in terms of macroeconomic growth. What impact do you have, actually?
All right. Thank you very much for this question, Qianlei . To be honest, we are actually paying attention to this. As for the Southeast Asia market and also Germany, we've been paying attention to these geopolitical tensions and situation. The oil price was high in the first half of the year and then dropped, and then increased again. It takes a very long time for the fluctuation to finish a cycle.
During that time, we've been preparing ourselves and giving a lot of time for the other countries to be coping with this. When the oil price is growing and increasing, for instance, we've been seeing some of this particular situation happening. Also in a lot of industries, we are also guaranteeing the oil delivery. At the same time, Indonesia is a big country of energy. As a result, we actually do not see any impact to our overall business there. What is it about this pass-through mechanisms? I think that this mechanism could be only realized together with our customers after negotiating with them. It's not purely the subsidies blindly are provided to our customers. We hope that we are going to improve our efficiency at the same time to have better planning and improve the loading rate, et cetera.
Then we are going to see natural positive consequences because of these areas. It has been actually now operating for about half a year and a year. We are pretty much ready for the high oil price. We might adopt renewable energy, for instance, as an alternative or the other energy source vehicles to reduce our reliance on the petrol. Overall speaking, we're still maintaining the guidance since August unchanged, and we have a series of efforts and strategies in overcoming these particular difficulties of the soaring oil price.
All right. Thank you very much. There is no further question from the line, and I would like to give the floor back to the management to give us a closing remark.
All right. This is the end of today's conference call. I want to thank everyone for attending. Thank you. See you next time.
Thank you very much. You may now disconnect.