A：In terms of core operating indicators, the number of active merchants on the platform has exceeded 850,000, with a year-on-year growth of over 50%, including an increase in the number and proportion of KA customers. The number of active consumers on the platform has increased to 24.77 million, with a continuous increase in user repurchase rate. The number of active riders on the platform has reached approximately 1.14 million, with a 38% year-on-year increase in rider efficiency. In addition, the company's services cover over 2,300 cities and counties nationwide, with the daily order completion quantity in county towns doubling, and a more than 50% year-on-year increase in same-city delivery service orders. At the same time, the fulfillment rate during holidays and inclement weather remains above 95%. In terms of business development, SF Express continues to deepen cooperation in the fields of catering delivery and instant retail, seizing new opportunities, stabilizing relationships with major clients, and demonstrating competitive advantages in all categories and scenarios. For example, in the catering sector, the company helps chain restaurants reduce costs and increase efficiency through diversified traffic channels and centralized management of delivery orders, with tea delivery revenue doubling year-on-year. In the instant retail sector, the company continuously expands cooperation with major clients such as supermarkets and pharmacies, achieving significant results in cooperation with chain supermarkets and multiple chain pharmacies, with a 35% year-on-year increase in non-dining product revenues on the B-side.

A：At this meeting, Mr. Sun Haijin, Chairman and CEO of the Board, will give a summary speech, and will participate in the Q&A session with Mr. Chen Xiwen, Executive Director and CFO, and Mr. Chen Lin, Executive Director and CTO, for in-depth discussions with everyone. In the first half of 2025, SF Express achieved high-quality revenue growth in the city, breaking the hundred billion mark for the first time. Net profit continued to increase, surpassing the financial performance of the full year last year. Specifically, the company's revenue reached 10.24 billion yuan, a year-on-year increase of 49%; gross profit was 680 million yuan, a year-on-year increase of 44%, with a stable gross profit margin of 6.7%; net profit was approximately 140 million yuan, a year-on-year increase of 100%, surpassing the full-year net profit level of 2024. Adjusted net profit and net profit margin were 160 million yuan and 1.6%, respectively.

A：In terms of personal city delivery, the first half of 2025 realized a revenue of 1.3 billion yuan, a year-on-year increase of 13%, with continuously growing brand awareness. Channels including SF city delivery mini program, APP and website saw rapid revenue growth. Exclusive delivery product revenue tripled year on year to meet high value, high timeliness demand. Revenue in the sinking market increased rapidly, with the penetration rate of hourly delivery products continuously increasing, especially strengthening the capability of hourly delivery services for medium and long distance segments. The revenue of one kilometer business reached 4.4 billion yuan, a year-on-year increase of 57%, with the flexible rider network effectively supporting the efficiency improvement of end-to-end operations. Various businesses achieved rapid growth, such as the scale of e-commerce package delivery, night-time receiving, and same-city express speed-up services.

A：Through promoting a multi-level business cooperation strategy, SF Same City utilizes the collaborative advantages of KA clients to provide customized industry solutions for improving the centralized management and delivery efficiency of businesses. At the same time, it uses its own transportation resources to ensure fulfillment capabilities during peak periods. Additionally, it focuses on the operations of small and medium-sized merchants, nurturing merchants within the platform through intelligent marketing strategies, and providing end-to-end matching solutions for multiple traffic platforms to support healthy and diverse growth in the industry.

A：SF Express continues to build its technical capabilities in big data analysis and AI algorithms. In the first half of this year, it actively promoted the application of AI large models in multiple scenarios and launched a series of self-developed AI intelligent toolkits to enhance the overall experience and efficiency. In addition, it actively explores the commercial application of intelligent logistics and unmanned delivery technology. Unmanned vehicles have been put into daily operation, combined with the rider network to strengthen the end-to-end delivery capabilities, and create a rider-friendly platform to increase rider income and benefits. At the same time, it cares about the lives and mental health of riders through activities, public welfare funds, and other means, providing comprehensive support to stabilize the underlying capacity.

A：The company's revenue has exceeded one hundred billion within the first half of the year, and based on the data from the first quarter of 2025, the revenue growth is very strong, reaching around 40% even before the food delivery war began in May. Even just looking at the half-year report, the revenue growth is very significant. Although the third quarter has not ended yet, the company is confident in the revenue growth for the third quarter, expecting it to be even better than the second quarter, with overall rapid revenue growth.

A：The main drivers of income growth include the deepening of cooperation with major clients in the TO B business due to quality services, a 13% growth in the TO C business, and a 57% growth in last-mile delivery services, all benefiting from the company's high service quality and expanding market share.

A：The half-year gross profit margin has experienced a slight decline, mainly due to the rapid increase in business volume when the food delivery competition started in May, leading to an increase in customer acquisition costs. However, with the improvement in supply capacity, customer acquisition costs have decreased after May, so the company remains optimistic about maintaining a stable gross profit margin.

A：The company has seen an increase of over thirty percentage points in research and development expenses, especially with increased investment in AI and autonomous vehicles. It hopes to improve productivity and continuously optimize operational efficiency through these unmanned and AI tools.

A：Administrative expenses of the company have increased by more than thirty percentage points, mainly due to the implementation of a stock incentive plan this year to retain and attract top talents, ensuring that the benefits of management and core staff are competitive. Adjusted net profit has achieved rapid growth, turning from a loss in the year 22 to profitability in the following years, with the expectation of continued high growth in the future. This is mainly due to strong demand in the industry cycle, increased order density from improved quantities, cost savings from economies of scale, and efficiency improvements through AI intelligence. It is expected that the adjusted profit will continue to grow rapidly in the future.

A：After the adjustment, the company's profit margin has reached 1.6 percentage points, exceeding management's expectations. The main reason for this was the unexpected increase in income, while the gross profit margin remained stable, resulting in overall profits better than expected.

A：The company's goal is to reduce the fee rate from the current 5.4 points to 4 points in the next one or two years. Although cost reduction is a priority, the company is more focused on investing in research and development, as well as talent introduction and other key areas, to ensure the core competitiveness of the company.

A：The company's cash reserves remain at a high level of 2.4 billion, which can meet the future needs of equity incentives and stock repurchases. In terms of accounts receivable, there have been no overdue bad debts in the past six months, and the overall financial health is satisfactory to investors.

A：We had in-depth discussions with our top clients on this issue long ago. Most of these clients are listed companies, and they are more anxious about sustainability issues than we are. These brands have already made arrangements and are willing to subsidize platforms. For the brand side, the decrease in subsidies helps educate the market, retain good customers and build brand recognition, thus enhancing brand strength. In addition, many brands are holding back on marketing expenses, as most of the subsidies are provided by platforms, and brand owners need to save ammunition for next year.

A：Most of what we do is brand cooperation, with relatively high profit margins, and we cannot collaborate with the cost side on premium creation. Therefore, brands that value sustainability will choose to cooperate with third-party delivery services, as they can collaborate and achieve better sustainable results. In terms of operations, as a major key account (KA), we have an advantage in ensuring priority and can provide stable, controllable brand discourse services, which is also one of the factors that businesses consider when choosing third-party delivery.

A：We believe that the catering industry does have a certain impact on our local delivery industry, but the long-term impact is manageable. Our B2C business accounts for less than 50% and we have our own independent network and business layout, which is unrelated to customer growth strategy.

A：Against the background of rapid development in the industry, we have taken measures in advance, such as operating at full capacity, to ensure the stable supply of delivery resources. Despite the rapid growth in order volume, our precise management of delivery riders and accurate market insights have kept costs from increasing significantly, instead leading to a slight decrease. Compared to other platforms in the industry, our management system is more stable, allowing for direct management of delivery riders and a better understanding and response to market changes, thereby ensuring the stability of delivery riders and capacity resources.