On November 17th, China Express (New York Stock Exchange code: ZTO, Hong Kong Stock Exchange code: 2057) announced its unaudited financial results for the third quarter of 2023. The financial report shows that in the third quarter of this year, the company's package volume increased by 18.1% year-on-year to 7.5 billion pieces, expanding its market share to 22.4%. While maintaining a high level of customer satisfaction, Zhongtong Express achieved profit growth, with adjusted net profit increasing by 25.0% year-on-year to 2.3 billion yuan. At the same time, the single ticket sorting cost and transportation cost have achieved a double reduction.
From the perspective of business data, as of September 30th, Zhongtong has 97 sorting centers, over 31000 pickup/delivery points, approximately 6000 direct network partners, approximately 3800 trunk transportation routes between sorting centers, and approximately 10000 self owned trunk vehicles. Among them, over 9300 self owned vehicles are high capacity vehicles ranging from 15 meters to 17 meters in length. Yan Huiping, Chief Financial Officer of Zhongtong Express, introduced that in the third quarter of this year, the company's core express delivery business single ticket revenue decreased by 13.5%, which is basically consistent with industry trends. However, compared to the industry, the company has made greater efforts to optimize the proportion of direct customer business, which has a significant impact on the decrease in single ticket revenue. In addition, the incremental subsidies provided to ensure market share and the decrease in package weight are also one of the main reasons for the decrease in unit price. Thanks to standardization and digital management measures, our single ticket sorting and transportation costs have decreased by 11%, exceeding expectations. Sales and management expenses have stabilized at around 5% of revenue. Operating cash flow is 2.9 billion yuan, and capital expenditure is 1.3 billion yuan, "said Yan Huiping.
The performance of the company in the third quarter once again proves that Zhongtong has the ability to achieve a balanced development of 'quality, quantity, and profit'. We have always focused on the steady improvement of service quality, grasped the bottom line of not making losses, persisted in obtaining profitable business increments, and achieved a 25% increase in adjusted net profit. Considering the erosion of the overall profitability level of the industry by irrational competition of price for quantity, our original market share goal of increasing by 1.5 percentage points for the whole year was achieved It's already unreasonable. We still maintain the guidance of reaching a total annual business volume of 29.27 billion to 30.24 billion units, with a year-on-year growth of 20% to 24% Yan Huiping further stated.
Express logistics connects thousands of cities and industries, smooth supply and demand, and provide strong momentum for economic stability and recovery. It is reported that Zhongtong Express's entire network transportation centers in various places such as Linyi, Shandong, Zhengding, Hebei, Yan'an, Shaanxi, and Zunyi, Guizhou have been put into operation in the third quarter. During the peak season of "Double 11", Zhongtong Express has once again become a specially invited logistics partner for mainstream domestic e-commerce platforms, providing solid logistics operation guarantees for merchants to fulfill their obligations and consumers to experience shopping. Data shows that during the "Double 11" period, China Unicom's entire network orders continuously exceeded 100 million, with a peak daily business volume exceeding 140 million. The comprehensive capability advantage of the "receiving, transferring, and dispatching" full link continues to emerge, and the service consumption market continues to release resilience and vitality.
Continuously increasing the construction of comprehensive logistics service capabilities. In the third quarter of this year, Zhongtong Express, Express, Zhiyun, and Maotai Logistics also signed a comprehensive strategic cooperation agreement to jointly explore the supply chain of serving the alcohol industry, focusing on building a liquor logistics system and jointly creating an end delivery system; During the "Double 11" period of Zhongtong Express, the cargo volume exceeded 457000 tons, a year-on-year increase of 16.97%; The Zhongtong Cloud Warehouse service has been further upgraded, and through flexible expansion of storage capacity and pre packaging in advance, the first order of "Double 11" only takes 9 minutes and 19 seconds to complete the delivery of the contract; The Zhongtong Cold Chain Xinjiang Shipping "Seafood" project has officially launched, providing an integrated cold chain transportation solution for Xinjiang seafood; Zhongtong International assists Jianghuai Automobile in reducing costs and increasing efficiency on its journey to the sea, Assisting in accelerating local delivery in Phnom Penh, Cambodia to within 3 hours We have always adhered to the strategy of balancing and increasing service quality, business scale, and profitability. Our current focus is on forging long-term competitive advantages, including diversified products and services, first-class operational efficiency, maximum industry profit contribution, the most stable and profitable franchise network, as well as the most important brand awareness and customer satisfaction. The achievement of these long-term goals will drive further strength and weakness in the industry Hua, Zhongtong will continue to maintain its leading competitive position Lai Meisong, founder, chairman and CEO of Zhongtong, stated. (End)