111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading integrated online and offline healthcare platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019.
Fourth Quarter 2019 Highlights
- Net revenues were RMB1.35 billion (US$193.6 million), representing an increase of 141.8% year-over-year and an increase of 21.4% quarter-over-quarter, beating high-end of previous guidance of RMB1.24 billion.
- Operating expenses[1] were RMB210.6 million (US$30.2 million), representing an increase of 35.6% year-over-year. Operating expenses accounted for 15.6% of net revenue this quarter as compared to 27.9% in the same quarter of last year.
- Number of pharmacies served increased to more than 235,000 as of December 31, 2019, successfully accomplished the company's strategic goal of reaching 230,000 by end of 2019.
- Quarterly pharmacy order numbers reached 366,000, representing an increase of 201% year-over-year.
Fiscal Year 2019 Highlights
- Net revenues were RMB3.95 billion (US$567.7 million), representing an increase of 121.3% year-over-year.
- Operating expenses[1] were RMB658.7 million (US$94.6 million), representing an increase of 30.5% year-over-year. Operating expenses accounted for 16.7% of net revenue in 2019 as compared to 28.3% last year.
- Annual pharmacy order numbers reached 982,000, representing an increase of 237% year-over-year.
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[1] Operating expense consists of fulfillment expenses, selling and marketing expenses, general and administrative expenses, technology expenses and other operating expenses (net). |
Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, "Our fourth quarter capped off a strong year for the company as we achieved record high growth rate of 141.8%. On a full year basis, we achieved net revenue of RMB3.95 billion, representing an increase of 121.3% year-over-year. In addition to the accelerated revenue growth and the rapid scaling of our business, we have made substantial progress in improving gross profit and further narrowing operating losses as a percentage of net revenue.
2019 was a year of considerable strategic progress where we continue to break down barriers to accessible healthcare by offering transformative novel model to serve the vast demand in China's multi-trillion healthcare industry. Firstly, 1 Drugstore, the pioneer in online drugstore model in China has become a well-recognized and trusted brand. Instead of tediously adjusting their schedules around an antiquated healthcare system, customers can now obtain drugs and other medical services in the privacy of their homes.
Secondly, in an ongoing effort to offer healthcare services to as many people as possible and to provide the largest selection to our consumers, we substantially expanded our network, ending the year covering more than 235,000 pharmacies (approximately 50% of the pharmacy market), which makes 111 the largest virtual pharmacy network in China. In addition, we established direct purchasing relationships with 188 drug manufacturers, expanded our technology-enabled infrastructure that includes a nationwide network of five fulfillment centers, and reinforced our commitment for a best-in-class supply chain infrastructure. Finally, we continued to strengthen our ecosystem through strategic partnerships with insurance companies and other healthcare providers.
2019 was also a year of major regulatory changes in our sector with sweeping reforms enacted to improve efficiency and affordability of healthcare delivery to China's large and geographically dispersed aging population. Many of these reforms are providing a strong tailwind for our business and we believe we are uniquely positioned as we strive to build a comprehensive healthcare services platform to meet the growing demand in every city.
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