Financial Data and Key Metrics Changes - Total net revenues for Q3 2021 grew 41.6% year-over-year to RMB3.35 billion, marking the 13th consecutive quarter of year-over-year growth since the IPO [15][23] - B2B segment revenue increased 46.3% year-over-year to RMB3.2 billion, reaching a new record high for segment revenue [23] - B2C segment revenue decreased 22.9% year-over-year to RMB124 million, with a focus on pivoting towards profitable contributions [16][24] - Non-GAAP net loss as a percentage of net revenues decreased from 4.1% in Q3 2020 to 3.8% in Q3 2021 [15][26] - Gross margins grew by 85% year-over-year, improving to 5% as a percentage of revenue [16][24] Business Line Data and Key Metrics Changes - B2B service revenues totaled RMB16.1 million, representing a 336% year-over-year increase [15] - Gross margins for the B2B segment improved from 3.6% in Q1 to 3.8% in Q2 and 4.4% in Q3 [16] - The B2C segment remains an important pillar, but revenue has slowed down as the company focuses on profitability [16] Market Data and Key Metrics Changes - The company has expanded partnerships with over 400 pharmaceutical companies, up 33% from a year prior [18] - The market for the pharmaceutical sector is estimated to be around RMB2 trillion, with significant growth expected in the out-of-hospital care segment [49] Company Strategy and Development Direction - The company aims to leverage technology to connect patients with healthcare services, focusing on a patient-centric care platform [11] - The strategy includes expanding the fulfillment capacity and optimizing supply chain efficiency to support growth [18][55] - The company is committed to enhancing its technology capabilities and has invested significantly in this area [47] Management's Comments on Operating Environment and Future Outlook - Management believes that current policies will provide tailwinds to the healthcare industry, emphasizing digitization and compliance [8][33] - The company expects to achieve profitability within 12 months, with a focus on margin improvement and revenue growth [43][44] - Management is optimistic about the future growth potential in the healthcare services sector, driven by industry trends and internal initiatives [22] Other Important Information - The company has provided approximately 400,000 free online consultations as part of its ESG efforts [21] - The 1 Health membership program has gained strong momentum, with over 11,000 participating stores [20] Q&A Session Summary Question: Impact of new regulations for online medical services - Management views the new regulations as tailwinds for the industry, emphasizing the importance of digitization and compliance [32][33] Question: Reasons behind strong B2B growth and future momentum - B2B revenue reached RMB3.2 billion in Q3 2021, with margin growth outpacing revenue growth, indicating a healthy business [34] Question: Updates on pharmaceutical collaborations - The company has increased sourcing relationships to over 400 and formed partnerships with major pharmaceutical companies for specialized internet hospitals [39][40] Question: Differentiation of the 1 Health program - The program aims to provide value-added services to pharmacies, leveraging digital technology to enhance competitiveness [41][42] Question: Timeline for breakeven - Management expects to achieve profitability within 12 months, with confidence in margin growth and operational efficiency [43][44] Question: Fulfillment capacity enhancement - The company is focused on optimizing and expanding fulfillment capacity to support growth and improve supply chain efficiency [55] Question: Strategy for enhancing relationships with pharmacies - The company aims to grow loyalty among existing pharmacies while continuing to attract new ones through value-added services [58]

Financial Data and Key Metrics Changes - In Q1 2021, net revenue increased by 64.7% year-over-year to RMB2.6 billion, marking the 11th consecutive quarter of revenue growth since the IPO [5][6] - Non-GAAP net loss attributable to ordinary shareholders decreased from 6.9% in Q1 2020 to 4.2% in Q1 2021, indicating progress towards profitability [6][20] - Total operating expenses rose by 43.6% to RMB2.9 billion, but as a percentage of net revenue, it decreased to 11.1% from 12.8% [19][20] Business Line Data and Key Metrics Changes - B2B segment revenue grew by 77.6% to RMB2.45 billion, while B2C segment revenue decreased by 47% to RMB142 million due to seasonal factors and prior year demand spikes [18][19] - B2B gross margin improved from 3.3% to 3.6%, while B2C gross margin remained stable at around 20% [19][20] Market Data and Key Metrics Changes - The online consultation market in China is projected to grow from 6% in 2019 to 42% in 2024 and 68.5% by 2030, driven by chronic disease management needs [15][16] - The online pharmaceutical market is expected to grow nearly tenfold to RMB1 trillion by 2030, indicating significant market opportunities [16] Company Strategy and Development Direction - The company is focused on expanding its S2B2C model, enhancing supply chain capabilities, and increasing partnerships with pharmaceutical companies [6][10] - The strategic cooperation with BeiGene aims to leverage technology and supply chain networks to enhance oncology management and drug accessibility [10][11] - The company is investing in technology and supply chain infrastructure to support growth and improve operational efficiency [16][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning within the evolving regulatory landscape, emphasizing transparency and efficiency as key strengths [26][27] - The company anticipates continued robust growth, with Q2 2021 revenue guidance between RMB2.92 billion and RMB3.08 billion, representing a year-over-year growth of approximately 80% to 90% [20] Other Important Information - As of March 31, 2021, the company had cash and cash equivalents of RMB1.16 billion, down from RMB1.62 billion at the end of 2020 [21] - The company is in the process of preparing for a potential IPO on the Shanghai STAR board, with no specific timeline provided [35][36] Q&A Session Summary Question: Fulfillment costs and future reductions - Management highlighted improvements in supply chain efficiency and the launch of new fulfillment centers as key factors in reducing fulfillment costs [25] Question: Impact of industry policies on business - Management noted that recent regulatory changes promote transparency and efficiency, aligning with the company's strengths and business model [26][27] Question: Revenue growth drivers and customer focus - The company is focusing on expanding its reach in lower-tier cities and enhancing partnerships with pharmacies and pharmaceutical companies [30][32] Question: Partnerships with pharmaceutical companies - The company is seen as a valuable partner due to its omni-channel capabilities and transparent governance, which are attractive to pharmaceutical companies [33] Question: Updates on supply chain investments - Management confirmed ongoing investments in fulfillment centers and warehouse automation to enhance operational efficiency [34] Question: Gross margin expansion insights - The company expects continued gross margin improvement driven by better trading terms with pharmaceutical companies and increased service revenue [41][42] Question: Expansion plans for clinics and doctors - Management indicated that while the majority of revenue currently comes from pharmacies, clinics represent a future growth area [46][48] Question: Share issuance and protecting shareholder value - Management acknowledged the complexity of share issuance and expressed commitment to further discussions on protecting shareholder interests [50][51]

111, Inc. (NASDAQ:YI) Q4 2020 Earnings Conference Call March 18, 2021 7:30 AM ET Company Participants Monica Mu - IR Gang Yu - Chairman Junling Liu - CEO Luke Chen - CFO Harvey Wang - Co-COO Barry Zhu - Co-COO Conference Call Participants Zoe Bian - Citi Rachel Yang - HSBC Operator 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 th ...