111 (YI) 18 Mar 212020 Q4 Earnings call transcript

Hello, ladies and gentlemen, and thank you for standing by for 111, Inc.'s Fourth Quarter and Fiscal Year 2020 Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now turn the meeting over to your host for today's call, Ms. Monica Mu, Investor Relations Director. Please proceed, Monica.

operator. you, Thank thank Fourth and joining today us Hello, and you Fiscal XXX's Quarter Call. Year for everyone, for XXXX Conference

Relations call Monica Luke COO; Jugaal], -- Wang, Chen, Co are Liu, Ms. XXX of our Executive [Tiffany Liu, today Mr. Mu, Alex Mr. Yu, VP; Director; CFO Chairman Finance Senior the Harvey subsidiary; Co-Founder, Mr. and and Junling Chairman; VD Barry Dr. CEO; IR and COO; Investor and major Co-Founder Mr. Ms. Mr. On Gang from Director. Zhu, Co

conference As a is reminder, via live webcast. today's call being broadcast

In the addition, press following release be IR ir.XXX.com.cn. company's presentation together on earnings the earlier distributed our earnings today, and website at a website replay will was with company's on call. available The our available are

and relate me of get will cause and provision to safe risks, the factors, which remind expectations that made this of current known that forward-looking Securities Such harbor Act materially. all based XXXX. differ we statements uncertainties and contain started, conditions Litigation you unknown to operating call statements current may Before Reform actual management's under and Private of the involve let events other upon are market and results

new information comparative performance comparisons law. I about under basis. risks, future obligation over required our information CEO, of press does otherwise that not Please will as events year-over-year refer to to to statements stated. the as and our With Junling earnings RMB unless company's to financial undertake call all detailed note or for turn except also applicable Liu. update the in information, to refer with more Mr. a all For that, these comparison, result year-over-year are a any the our on release please otherwise, refer filings of SEC. XXX Please any numbers forward-looking

Thank and evening, year good and everyone. fourth quarter this you full for XXXX today joining our results. morning, for Good call

global spirit. the update this been disease the past to of and efforts on year an begin me the COVID-XX has plus The has overcome and all beat also commitment for shown the times, will responders But difficult in with resilience to Let pandemic. together, terrible persevere us. unprecedented be working the of disease. first throughout we tirelessly of this and awe the this We'll continue human

hard the safety in and our put protocols throughout other place, have able to from interruption without With period. XXX to care been has work customers dedicated our the employees this we service deliver difficult and critical patients and operational

vaccine the as the the stay an we dangerous sight, vigilant With the variants coronavirus. to rollout, pandemic to optimistic we're is end continue in for that potentially more of

on look Then Moving ahead take X. I'll you begin through on and Section our look brief a the our accomplished earnings. of deck, over journey financials Luke of I'll and on the in back a growth hand it in we with XXXX, X Section in to what beyond. to extraordinary XXXX to

in attributable also this decreased of XXXX. post-IPO fourth X. number net revenues quarter for from doubling more XXXX to net shareholders fourth our the the to We conclude X.X revenue X% Non-GAAP your billion XX.X% RMB our FY for guidance the of take with consecutive of the quarter XXXX is revenue questions. to In year-over-year prepared X.XX since percentage our in billion, revenue billion, growth in to first rose before a IPO. QX net quarter, This achieved CNY tenth as loss significantly than will we X.XX FY XX.X% net remarks bringing quarter. ordinary CNY

transformation was the which recorded health by This and Internet us of allowed the multifaceted business a lead drive the growth care our increase from XXXX. to ninefold close performance model, continued industry motion strategy set of digital SXBXC in in system new China. to CNY Our to our million has FY era the has XXX.X in in charge stellar in

and connect is with mission digitally patients services. to clear, medicine care health Our

Our in SXBXC model was built X stages.

products clinic, and for pharmacies, and which foundation, retail early. then But bring same assortment, chain clinic, value efficiency the our care reduce better model and infrastructure capability B's in to model. us infrastructure inception, our this readmissions complications connecting chain home extended to a XXX's an we to C detecting online the for providers. patients, by provide SXBXC, the care potential mind digitally return them that supply cloud health benefit selection Through the post-discharge of pharmacies pharmaceutical before. our that model. have the enable preventing build connected mitigating bring our is will patients, of to to robust The efficient cloud then medicine services, distributors, disrupting leverage supply geography offering of It is Conducting Firstly, these by services. of and Every the also medical that regular faced to our we Having with marketplace we them care, doctors This developed platform, services consultation of patients infrastructure, to offer to established doctor-patient rapidly platform and to delivery care cloud S On which serve engaging the outcomes. suppliers, supply network follow-up value be vast and are the to our innovative the a the their speedy one care patients. longer reduced of help CRM, refill can being to doctor-patient pharmacy, chain by supply than able status digital to and existed day, from model, patients companies, designed of their able to B modules customers network patients cloud improves is also doctors, more in in encompasses our with platform. medicines enables in all would From chain to the quo. positive the allow digitally doctors service travel of enjoy drives platform service of to different the them cost. platform, distant They our service other vendors modules to growing challenges doctors from enhanced and never interacting to to provide no experience platform and is cities and our are a homes. and able once variety effective follow-up other one limitation,

model. of better cloud-based product supply inventory our and applied we pharmacy combination Our our manage to services, From plus the the the to which selection, is in to end creating timeliness SXBXC as patients, as the high consumers. or retail control from efficiency, health company great which online pure in But AI significant our chain work in big off-line data our analytics SXBXC the their doesn't around well. leads resulting of We're of of as digital outcomes. end to model, have build-out cost making continually and our enjoy part customers the customers our pride platform, platform all retail takes a delivery, well empower with more country investment lower a pharmacies of where seek product in better the to of space second network stage our of satisfied infrastructure greater service we there. engagement further help either In strengthen

AI, digital investing easier to to life we're the make in care. reps in doctor's also addition In patient

value companies continue commercialization relationships with in our all adding deepen through our our suppliers, and we'll For our to product omnichannel services, of pharmaceutical stakeholders to ecosystem. network broaden

pharma companies, for lowering new while and they access their a gain market distribution For to products, broader costs. marketing

the cost. product our pharmacy selection at a retail wider lower of For a latest customers, they gain

end access The a to consumers, to growth being able of we patients are they led services of the they by global innovations a pharmaceutical and doctors, partners to to brought benefit as our platform. ecosystem companies they to market new domestic so of from attract XXXX. over model serve our can For XXXX. XXX rapid for continues The variety direct chain advantages relationship And has and totaled number able supply QX SXBXC with, our our access in of our latest have of digitally. the

virtual China. network customers now of our largest pharmacy While the in retail network is

regional X XX-hour cities China. we fulfillment than to more centers, With provide of the delivery support in our XXX

As significantly revenue of costs number X.X% management, QX the to XXXX and our we logistics a fulfillment improved in XXXX. net centers increase X.X% percentage QX upgrade of from in has fulfillment as

to full the improved year-over-year. XXXX, year it X.X% from X.X% For

RMB through we XXXX, continued on with million Sci-Tech main operations financing has from financing During positions that XX Yao billion at pre-money to XXX second on our with in X.X build Stock subsidiary, Exchange's raised Fang, of and Shanghai, which market amounted IPO USD valuation USD connection deepened our rounds or our Innovation momentum billion, investors, of third-party to Board. Shanghai X a the the round

health care lower-tier traditionally country's to those gap plan rate have every provides in the expansion. strengthening our only In of been connect in to opportunities SXBXC bridge given Tier to continue patient that Looking X expedite opportunity from the model and available the cities. digital focus market in which the of transformation on with in cities to the the pursue services mass we living ahead, enormous advancing of in XXXX, healthcare facet order will to people access business will millions the China, population, us to first we market our strategic

control reps existing improve science, our able predictive access and also the upping with they're to we'll share the with of and deliver Doctors pharmacy will platform's ability. processing further to to higher its provided And of be the medical their we'll time, greater deepen services. technology, the enhanced tools store AI capability capability to wallet innovations side, to effectiveness care the cost infrastructure digital patients. us empowered retail this, medical better allow handle efficiency pharmacy further drive in latest among On our same sales our provide customers. to the The of power will at keep to be virtually growth. and commercialization greater improving more data volumes to deploy With retail

benefit an help provide On consumers. side, the support opportunity supply for innovations allowing also commercialization rate. pharmaceutical selection medications of their China, we us. major services customers effort, for in wider of in medical doctors Globally and deepen source pharmacy to a us an our been companies to relationships commercialization unprecedented our services end happening have These growth to and with them, even at the represent

the all of we for transform can improve medications there and successful digital win-win a help XXX's As for opportunities launch. the age us health of that out devices a market, in as care our the health to internet the position the company's the product and during model industry new and launch come to increasingly of competition for SXBXC to likelihood expedite becomes market intense. Ultimately, system system China. the better. We transformation in believe care is increase a significant support more more are

we as to opportunities We on STAR With Thank work growth even hand stay will through to and strengthen that, greater this model financial delivering our to value results. walk to you. and track the relentlessly call shareholders. our will for pursue listing Luke I

of good morning our Thank the we as you, work by or quarter remained fast-growing making evening, support including We onset and in focus navigated over another today. Junling, colleagues pandemic and care results at and challenging for customers, want everyone. of year XXXX and report resilience for operational stakeholders, all our their staff, business. a the to all environment enabled changes our to I phenomenal fiscal to our hard thanking of us begin this fourth focus resolute and shareholders, it was that our fiscal on partners taking

key remarks will business prepared financials. on focus Moving few and the My financial a to highlights. the

in to stated. the our from and comparisons XX fourth Slides are You year year-over-year the all XX the Section results of Again, otherwise in fiscal RMB XXXX to of can and presentation. are all X quarter unless numbers refer details

Let's X.XX of with Total quarter range. revenues to quarter start guidance billion, fourth which the the XX.X% our top for CNY the exceeded net results. grew end

X%, the our that at for growth report We for is up margin has margin. BXB CNY the by grown gross the The profit to are our XXX.X%, revenue X.XX X.X% quarter which while increased to to Strong line mainly than profit quarter top attributed BXB segment much XXX.X% pleased our improve rapidly which business XXX.X%, to has faster expand with reflected at revenue for ability to growth our from steadily growth. gross was billion. scale gross segment our

gross to Total quarter segment from up X.X% were million, improved expenses Our million. the operating with BXC CNY XXX XXX to to revenue XX.X% XX.X% grew XX.X%. for CNY margin

quarter Sales our the and X.X% X.X% for total we down from revenue from X.X%, expenses revenue same down same the of G&A was in quarter XX.X% X.X% last expenses quarter percentage As last net a of net from percentage enhance revenue, down expenses same as of tech quarter X.X%, of the continue for the revenue year. quarter quarter Fulfillment percentage amount our marketing from of last technology increased was in as net in X.X% of as a for for net in accounted same net down investment the of X.X% year. the from expenses to to expenses operational by the last the was year. in the leverage quarter operating efficiency. operating a and down Technology as as revenue, The of optimize continuous percentage quarter for our was expenses X.X%, X.X% year. result XX.X% have total solutions. a

of year, quarter to XX revenue, compared non-GAAP XX.X%. ordinary to million loss CNY accounted net million as for the net last X.X% XXX same As for CNY result, from attributable to a narrows shareholders quarter which down the in

full XXXX, deck like can the details I fiscal would to few run highlights. our earnings you release. for in our to year Again, a refer As through and

Our full up comparisons X.X revenues XXX.X% Net are were XXXX. to CNY CNY year billion. billion, X.X from

Our BXB from growth to billion in customers from customers and X.X to grew our strong both existing segment revenue billion network. CNY attributable CNY X.XX XXX.X% new due

CNY Our to million. million revenue CNY XXX segment X.X% XXX from grew BXC

from gross X.X%, XXX.X% margin ago. grew million. X%, BXB the X.X%, Overall, XX.X%. X.X% a our from by Our to gross was And XXX up up combined year margin from CNY segment gross our BXC was profit up XX.X%, was while

CNY For up full to total XXXX, were million. operating year expenses XX.X% XXX

have revenue CNY line loss compared billion. about our down total down for we from last was of accounted year from to shareholders million year. last CNY a reduced XX.X%, As revenue, net our XX% scale with revenue, as the doubling expenses and operating net This year. of to was by XX ordinary bottom Non-GAAP million, XX.X% that CNY means X.X net attributable loss for percentage XXX while X.X%

which Slide We restricted the note position Appendix Please customer to of XX and to with Operator, to certain prepared December first and guidance As begin as or our XXXX. of demand, X.XX to for Thank growth X.X to company as year-over-year we expects X.XX for total session. -- and are cash billion in the short-term the a CNY to cash XXXX. and XX, now as change. revenue Q&A the conditions current well financial XX% estimates and the the The XX, based operational investments XX%, conditions XX% of sales first of to the CNY concludes quarter ready above equivalents, XXXX. RMB outlook of pandemic on of current impact you. XX approximately XX, XXXX, and as net subject of A cash selected market remarks. section to quarter representing our XXX.X excluding RMB refer million billion the is This statements. had the for on Slide market preliminary supplies cash one-off quick between be of on billion, December reflect our XX% the compared are company's

Bian question Your the line of from comes Citi. Zoe of first Instructions] [Operator

May management X This is Bian the from I small Citi. questions. Zoe ask

-- is than we single pharmacies? seen retail The your check And of many with the the is, question progress there you Fang in on the or first board. BXB other as listing subsidiary, of the cap? XXX Shanghai versus to procurement STAR cooperation pharmacy. the a a are any is And have have change with if your scale levels have from segment. pharmaceutical of about rising partners turn question on how Is what in of And And third Yao you? independent you marketing second procurement, progresses services? Want now my companies your or such seen ways other e-prescription

question. Zoe, answer let first me first your

probably to You that have lately, seen have worldwide. started companies with we partner many pharmaceutical

pharmaceutical We also companies. a have strategic that we direct XXX announced with partnership

So have their compliant provided major us They and expertise. coverage, can are regions partner that preferred to fully we Pharmaceutical we several they all of they companies points medical we offer and to channels. commercialize start their pain experts have and have and And One for digital the will due the we strength. products transparency, become reasons. high-efficiency medicine solutions. through we pharmaceutical the certainly, -- have companies have and products, how a complementary and is

the So capability. have we

systems, pharmaceutical CRM for the So and coverage preferred omnichannel to and help of and help system them regional duration the coverage. we commercialization treatment. also can more are medicine also can customer for our for compliance choice And companies to and their for product improve companies pharmaceutical channel the customer our our insights provide example, data

Harvey like answer probably I'd other the questions? So

question will since XX% the existing Harvey, chain to regarding XXXX, our quarter-over-quarter sales. of and seeing question sales from the I including independent customers. their think, second been pharmacies, customers second about stores both our have is past this In take According purchase we the data became The -- they our pharmacies. volumes customers increasing procurement I contribute keep quarters, the of

So purchase both store and volume. pharmacies increasing are their chain independent

further chain forward, them improve share the believe selection better offer the our strongly still large network, Moving of cooperation with supply we a will with to are from our a room to there expansion and service. wallet We enhance provide and our customers. price more

your on the Yes. answer it's progress listing. Luke. Zoe, our STAR on To question

all, are to the schedule. according making we progress First of

a one investors. And couple We of close to close $X.XX XXX raised in at total, valuation of third-party And in the second which pre-money to a milestones. is RMB financing have of billion. have, from completed achieved new billion, billion. approximately is USD X capital December RMB injectment or we One we XXXX, the million XX was round have strategy

Technology we are stock-holding listing. law And party which company Strategy the Now are investment [indiscernible] pre with PE Shanghai and Venture required under funds this Shanghai security firm, under the third -- Zhangjiang to accounting like, firm, this well. There the Deloitte are Capital, and, Technology from in is Technology we Shanghai Shanghai under including the the which they & independent is They which we like and law Fund, municipal have is introduced, STAR investors, investors, Science Shanghai with and [indiscernible] namely company, convert Shanghai, investment are arm with vehicles U.K. both third-party also [indiscernible]. according Pudong for tech and Haitong, Touche, to and invest Science limited government. assistance Venture firm Venture Stifel, Currently, -- Capital the Investment as like Investment. together the

making will also schedule, in So according make the public Zoe, and progress and we we hope formal course. to your we we announcement due are questions? answered

comes the line Yang Your HSBC. next question Rachel of from of

And congratulations questions. for Actually, another very I X strong quarter. have

structure? to reporting first one overall revenue us booking How your I second -- at The Cosentyx for -- and you looking promotion are it and Trulicity what is service to are going is understand help Novartis, top you the of been overall versus to model. the you BXB has side started CapEx a GMV how of to And your fees -- The you and understand Luke. question mean is I line? them promote the Can while. the model? size on Lilly in the the

how with my our Yes, those exclusive possibility strengthen is them drugs partnership? will -- the that our the there me. all collaboration X to partners is So from any this make And performing? questions are been X have we an

your question? you can Rachel, first repeat

revenue revenue of as a facility understand a charging -- of I to half some profit you GMV service net as is fee, GMV of BXB model the -- you're provided first the overall and your regarding size. that the structure The them. i.e. business question of only put

sales the booking the booking side top are you revenue, line -- you're the the booking as of some -- price. sales at revenue And

of revenue? is overall want how revenue, you it understand your GMV what what sales? top the among And expect part that line So that And a of I is? just part to big

Okay.

in If X, think you at have our segment look earnings the revenues. disclosed we release, I Page our

disclosed major not the We our is business. self-operating main have -- business GMV because

big. overall size But business is not marketplace well. have the We as

a can the question quick -- to want up know you -- if mean is revenue and I our you use to VAT, come which So the way answer. think I one quick GMV, times is XX%,

cetera. structure, our pharmacies, the of private distributors, to of some revenue contribution is from due part is terms major hospitals, business, which et In the retail revenue clinics, XB private

well. like commission some digital or well have X%. marketing is chain business are marketplace XX% those service supply proportion from we The service. as as service derive with Yes, We our -- our as now revenue the XC fee vendors income pharma from to from companies,

more revenue Now with continue our service we to coming and SXBXC we from the model, will believe see side. more

are something that's we So expecting.

we drugs, Rachel, in I'll allowed your second In do China, law, about commercializing pharmaceutical drugs. help but companies drugs. promoting we promote to not take are any by question their

those we've for why that that's and pharma platform to us So omnichannel particular to that launch new lifeline guys drugs help drug. built the out follow of

company from obtains drug NDA so gain for So to to drug, initially, access long the to time usually once a hospitals. it a but be CFDA, they pharma the fairly takes launch able

be a to VPP, over sales. help when And the it get we going to are country to more companies. to us to you. growing So the few even help pharmaceutical disseminate a when is digital there every reps our them to chain model been to chain supply window. in or channel one supply to has to is sales to they them medical And that even delivered pretty they chain list to be And clinics from access great to have or or a confident pharmaceutical start been of company that's or maximize new to for capture guys up the to all homes we'll And drug our trying to pharma And hospitals. a get pharmacies you we comes course, platform supply a tool why course, have have be companies information. of to Thank customers' continue into building pharma the launch XXX,XXX the quarter. referenced a day enables we across the gained actually drugs hospital, And retail, will platform. limited for help build after our great the hospital time

Okay.

X doing, Trulicity So Cosentyx? have how been and the well drugs

Trulicity one, the Novartis? other and So what's

Cosentyx. It's

well. exceedingly doing They're

a you usually, growth So do on rate. So compounded monthly do a -- right? but CAGR, we actually

had actually drugs limited for to close it both been monthly growth a the last It's we since May. So the XX%. time growing -- at think I rate

drugs. many I introducing new more know we're

As launching through -- -- we announced we you our drugs are Beijing that see new can platform. the the partnership partnered just also with and

Yes, also Yes. noticed that. we

So how many new for year we drugs the expecting can XXXX? of

more. Many

Many to come. more. Many more

Your from next line Christopher of comes of Lui question the Jefferies.

question progress is asking expecting Internet ago, behalf nearly within JD And whole years the are the healthcare [indiscernible]. And after the industry from you That's market norms smart I'm especially differentiate Health? And company's last What how and of the and how we see long be reimbursement my opportunities shall This ourselves? on today's XX see in in be chain. failed my compete this supply years company's first second with AliHealth And share of today vanished. extended. the on do question those players And XX from And what We we development, do healthcare will you players big our pharmaceuticals big market? questions some Jefferies. construction will industry or new is like we term? you of have of grown in some in the me. Chris positioning all how the internet internet the think the on for with new of industry the outlook. [indiscernible] that What do for change compared competition. question about is with my regulation see context of And those do industry? biggest

and So [Jeanne] your second let answer question, me then answer Junling first question.

we of first -- are we So feel very, very all, fortunate.

window unprecedented facing opportunities. of are we So

few XX health the care real decade see can whole double-digit You growing the whole for in come. health largest past for And become the to the in and will automobile China. industry the to and industry that next industry industry the care years exceed years, is estate

grab rapid window the certainly, So opportunity. in agents apparent. very the One are reasons that of China. Certainly is to need we

online income policy telemedicine, Second is that the year. care. favor health And importantly, start every disposable single more to increasing is government

the and penetration advantages digitization added are technology. Internet mobile of the -- think now I So a digital also

technology, So our to we especially must opportunity competency. this invest model heavily build our boost health SXBXC grab core and our digital really

first Junling to leave -- I'll the So answered to have question. answer probably second

Right.

Yes, we is cloud you course, And think all, very competition. and our market they traffic the commend, Health. tremendous. So path of admire But different. first referenced I the they JD of AliHealth is have

As actually we And enable a model better pharmacies we SXBXC, chain consumers. to service doctors. businesses to supply the to our explained remarks, platform Those are create actually is and is my service Bs value focus X empower. have in want or for our the to

proved innovate only companies, our big on execute. to to our super date working and together other vendors distributors our to with the without supply ability such supply execute. fact innovate ability platform. companies, rely own the we as side, pharmaceutical with can providers, companies and by ability marketplace like to So And the and background, the that and survived us, we have service And to a better the

our third chain about the infrastructure. is So supply question

So we -- we growth. a conservative probably and bit we fast didn't before, a anticipate were such

supply think are it we I -- the now So chain bottleneck, became infrastructure. a

are And X of other in So centers, X X fulfillment Northeast, Northwest. all X capacity and throughput. the process we enlarging added in new the in

improve upgrading drastically are our capacity. really chain are supply our we same time, total So we the management At systems.

are optimizing where So -- optimizing we we're optimizing also chain and assortments. supply network, categories our our we're

these algorithms. optimizations data through all done So models are and

BPI, Process process. called formed really So to a applied to our business every single Business new lean of apply Improvement, we team processes

but our So our we that to processes. improve I continue infrastructure, have only not we'll foresee also --

of CIBC. the [indiscernible] from line comes question next of Your

and that on X company I in past IPO is increase [indiscernible] is noticed well, the the has CIBC. the have in Congratulations reporting years. Well, X This achieved XXXX actually, first over company from little actually progress. Hi. I around X high-growth X-fold since the revenues questions. And

revenue other driver What wondered the And type. additional question. the revenue represents my what expect traditional see new second Well, BXB the just the makes your And XXXX? business. what the has XXXX? business BXB from first portion about and business stream different this [indiscernible]. That's what of question I question. this large my outperform what growth? And in been is that my is And how on businesses? hand, So we for -- company key is And should we a our you those distribution is this BXB is of in

Thank you.

I me the think let take questions.

SXBXC So really growth. the that's enjoyed the we the last years. in It's growth propelling really model the X

sustain model level For a to any growth, growth. to we've this propel have of to got business that

execution the really model. it's secondly, So the of

XX% For of within pharmacies. XXXX in instance, the SXBXC it we strategic more We XXX,XXX serving take to made more started China. we're than years, than middle And from of on a X imperative the business across all X. pharmacies

high-growth course, stream. to we're platform. but expect streams. building that have innovative And receive have commerce, want profit e we service streams lot We traditional it's can And the I very to easily formulate a going above Because streams, is that's to strategy. supply of Of by very we a thing revenue we think not future a the extract e-commerce, confident sustaining market. modules a will of one another the our models of of a And as create wonderful we revenue only such also streams, it's rate already of execution. X in long It The industry. But everybody had margin of its time we understood. and new the be we're should a fantastic out factors strategy, can margins the to and does, mentioned, where proud else very capability more revenue we before XXX execute obviously, fees. years. or in course, really, obviously, reach ceiling

our the JBP, fee it we or a have for a distributors little streams digital out a of services we for and attract where there's And or unit lot treasure into for also providing if course, and business translate on can cetera. of -- [Foreign instance, business marketing et them them. logistical For Language] also it's called revenue internally we marketing And English, build charge of platform, called we a fees, you commercialization and box, model companies. pharmaceutical and services services

to our other representation your so the in So your interesting a I and question this and with want about very revenue It's last angle. distributors BXB's one. on. approach from question differences the

digital big are we a technology And well. company, is distributor, XXX, traditional platform talking one supply or platform our on to a there B about are just customers cetera, build a Sinopharm If And one it obviously, to for focus small B, or our you servicing is today's many Shanghai is enable look in a in Pharma limitations as right. and big et world. [indiscernible] Bs at

can in actually I spoke So differences. box to organization. we give the an [JVP] I the service want our about or internal better example treasure consumers our collectively. to illustrate you

in is into our that out-of-stock centers look that So and you aggregate their their they distributors the at in-stock prices. to those rate we -- an deliver we own is that to unit, customer they business and order we what stock allow fulfillment once inventory do package. placed, own rate, X manage in manage And if commercial put order also their and

of thousands those have we So platform. partners our on

it we look if on So country. But in the or before the can deliver item, the distributor, in this city. to Even is minimum with pharmacists pharmacies single at they XXX,XXX have also X across the let's he local can now pharmacy And the particular package over marginal she impact side. cost. a suddenly access also service only

our Before, they a few be have of they order. dozens on X X delivered will everything and work order now place to with in can simply And distributors. app those

So the through package, orders, to the they compliant need instead instead think receive moment of regulations X a just have quite And order according the number be they when dozen of about in China. just many. Every handle steps to a to of X to they go administratively here order.

the distributors, for do costs over we shipping tremendous time. can the So only much industry. or about customers the not also we think create And pharmacies, the save the value consumers, we how help

[Shi business distributors not way So doing really the the we you, Thank answered I do. question. are that Fung] traditional hope your

Yes. company. clear again exactly pain And That's future very we achievement excited points of congratulations the think on I progress. after on can more be and company's the [indiscernible]. clear we the -- And the

question line from [indiscernible]. next comes Your the of

And performance for are quarter. a revenue have for you XXX the I and at strong Kudos become profitable? gross everyone last when projected question. margin your What XXXX? will Hello. to

for you Thank question. the

a revenue given quarterly have We a guidance on basis. on

quarter RMB So X.XX for between the for billion. our to X.X is revenue XXXX, billion QX the RMB for guidance

represent XX% you're represent like impact out taking growth. will will first onetime for pandemic the to that -- year, So quarter if that last the XX%

aim. we business growth, So that's internally, to so continue XXX% to close our drive this

we selling that we more BXB rapidly through drug with You believe improve we able partnership because that on companies, we continue be scale and the seen are channel. ask to building business on our the profitable items, team especially the will our those to direct on items, more expand We focus steadily while have sourcing margin, more -- and segment. that to pharm do do

our you so In XX% normally XX%. look of X% revenue. be like to XXXX, OpEx grow mean, terms will for the like net to double size if we again year at it's in our XX%, around that X% XXXX to of lower expenses and If our total profitability, I OpEx

to break-even So then if status. almost that we are X.X% we you now improve our X%, a see margin from

think near. not So an about when it. And for turning have we date we quite it's exact profit, very do but optimistic are we

of from [Operator [indiscernible] the Instructions] Capital. IDG comes Your line of next question

hear Hello? Can you me?

Yes, ahead. please go

I have have I X questions. -- yes, sorry.

So my for just as the there's opportunity China. is, health mentioned, transformation first care of big a you industry in digital question

the as -- just that enter quite very for like market there's competition company. though those not know mentioned fierce are think we just like it's that big the even to company. I But especially -- companies, for as big players you players, the being easy So I tempting the between the but them assume

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Thank you, [Jin-gyun].

provide answers questions. your some to try Let to me

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As there like Ms. closing are would Monica to no for the further now conference hand to any questions, remarks. I back Mu

and call. interest for team, participation of your on closing, like in In entire management to we'd operator. XXX you the you, thank Thank the behalf today's

any If for further concludes information know. the have visiting us in us us any you joining today. interest please This call. you or China, require let Thank in

you you Thank all lines. gentlemen, participating. disconnect and Ladies may your now for