YICAI | Chinese Express Delivery Firms Post Strong Earnings Growth in First Half
(Yicai) Aug. 21 -- Against the backdrop of eased price competition in the express delivery industry, listed Chinese couriers reported significant growth in first-half earnings.
ZTO Express' net profit expanded 31 percent to CNY5.2 billion (USD773.6 million) in the six months ended June 30 from a year earlier, and its revenue climbed 23 percent to CNY27.8 billion (USD4.1 billion), the firm said in its semiannual financial statement released on Aug. 19.
Benefiting from regulatory guidance that alleviated price competition, the express delivery industry saw improved profits in the first half, ZTO's founder Lai Meisong said. This marks a shift in the industry's focus from pursuing scale to a value-added approach that seeks both quantity and quality results, he added.
J&T Global Express reported a 40 percent increase in first-half revenue to USD7.7 billion from the same period last year, with revenue from the express delivery business up 40 percent to USD7.5 billion, the Indonesian logistics giant announced yesterday. Its adjusted net profit grew 124 percent to USD350 million.
YTO Express' revenue rose 8.4 percent to CNY38.9 billion in the first half from a year earlier, the firm said in its semiannual earnings report on Aug. 19. Net profit jumped 73 percent to CNY3.2 billion, with net profit from the express delivery segment up 69 percent to CNY3.4 billion.
The express delivery industry's eased price competition and application of artificial intelligence technologies have made significant contributions to improving the operational performance of couriers, express logistics expert Zhao Xiaomin told Yicai. Many express couriers had a low profit base a year earlier, which contributed to the explosive growth in profit in the first half, he added.
Overseas expansion was another important factor behind the increase in delivery firms' revenue.
Foreign markets such as Saudi Arabia, the United Arab Emirates, Brazil, Mexico, and Egypt were the fastest-growing regions for J&T's business in the first half, with a total delivery volume of 360 million parcels, up 120 percent from a year ago. This was mainly because of collaborations with cross-border e-commerce platforms.
J&T's delivery volume in Southeast Asia surged 71 percent to 5.5 billion parcels in the period, thanks to partnerships with local and global e-commerce, short-video, and livestreaming platforms, such as TikTok, Shein, Temu, Kwai, and AliExpress.
The performance of the express delivery industry is expected to further improve in the second half of the year, as major e-commerce promotions, overseas warehouse stocking, and the growth in agricultural product trade will continue to support the overall business, Zhao predicted.
The Chinese express delivery industry has emerged from the quagmire of vicious price competition and is transitioning from scale- to profitability-driven, Zhao noted. Companies need to continue improving their profit distribution mechanism between headquarters, franchisees, and couriers to enhance their overall competitive capability, he added.