Burning Rock Biotech Ltd (BNR) 2024 Q1 法說會逐字稿

Good day, and thank you for standing by, and welcome to the Burning Rock's 2024 first-quarter earnings conference call.

美好的一天，感謝您的耐心等待，歡迎參加 Burning Rock 的 2024 年第一季財報電話會議。

(Operator Instructions) Please be advised that today's conference is being recorded.

（操作員指示）請注意，今天的會議正在錄製中。

Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E. of the Securities Exchange Act of 1934 as amended and as defined in the US Private Securities Litigation Reform Act of 1995.

在開始之前，我想提醒您，本次電話會議包含第 21E 條含義內的前瞻性陳述。 1934 年《證券交易法》的修訂和定義見 1995 年《美國私人證券訴訟改革法》。

Forward-looking statements can be identified by terminology such as will, expects, anticipates, future, intends, plans, beliefs, estimates, targets, or confidence, and similar statements.

前瞻性陳述可以透過意願、預期、預期、未來、打算、計劃、信念、估計、目標或信心以及類似陳述等術語來識別。

Statements that are not historical facts, including statements about Burning Rock's beliefs and expectations are forward-looking statements.

非歷史事實的陳述，包括有關燃石的信念和期望的陳述，均為前瞻性陳述。

Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known and unknown risks, uncertainties and other factors.

此類聲明是基於管理層目前的預期以及當前的市場和營運狀況，並涉及涉及已知和未知風險、不確定性和其他因素的事件。

All of which are difficult to predict and many of which are beyond Burning Rock's control.

所有這些都難以預測，其中許多超出了燃石的控制範圍。

These statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements.

這些陳述涉及風險、不確定性和其他因素，可能導致實際結果與任何此類陳述中包含的結果有重大差異。

Burning Rock does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

除適用法律要求外，燃石不承擔因新資訊、未來事件或其他原因而更新任何前瞻性聲明的義務。

And now I would now like to hand the conference over to your first speaker today.

現在我想把會議交給今天的第一位發言者。

Mr. Han, please go ahead.

韓先生，請講。

Thank you, and welcome to Burning Rock's Q1 conference call and so on.

謝謝，歡迎參加 Burning Rock 的第一季電話會議等。

I'm the CEO and Founder of Burning Rock vision

我是 Burning Rock 願景的執行長和創辦人

[Hahn].

[哈恩]。

And today, you also have our CFO, Leo Li and our CTO, Joe Zhang online.

今天，我們的財務長 Leo Li 和我們的 CTO 張喬也在線上。

So today, we'll go through our Q1 financial report, Let's turn to page 3, Are there a brief introduction of what Burning Rock is doing?

那麼今天我們來回顧一下我們的第一季財報，我們翻到第三頁，有沒有簡單介紹一下燃石醫學在做什麼？

We started from therapy selection in [20 off] in 2014 and then expand that to multiple areas, including early detection, MRD, empower farmers out of services.

我們從 2014 年的[20 off]開始選擇治療方法，然後擴展到多個領域，包括早期檢測、MRD、為農民提供服務。

So our in and we know that our in our past two years, we tried very hard to improve all of our capability [of files, our aim] to be profitable.

所以我們知道，在過去的兩年裡，我們非常努力地提高我們的所有能力（文件，我們的目標）以實現盈利。

And so we have made a lot of efforts.

所以我們做了很多努力。

So if we turn to page 4 data, so what we have done in the past well, one quarter, basically, we are driving our sales efficiency to a better level and we are improving our gross margin and there will be data I show later on and then we reduced our G&A expense expenses and to a better level and also the R&D reduced the R&D expense so that to make the old audit company to getting more profitable.

所以如果我們翻到第4頁的數據，那麼我們在過去一個季度所做的很好，基本上，我們正​​在將我們的銷售效率提高到一個更好的水平，我們正在提高我們的毛利率，稍後我將展示數據然後我們減少了G&A費用並達到了一個更好的水平，R&D也減少了R&D費用，從而使老審計公司獲得了更多的利潤。

And let's turn to page 5, our [desk, a] test result, the financial results of different quarters in the past two years.

讓我們翻到第5頁，我們的[辦公桌，a]測試結果，過去兩年不同季度的財務結果。

We have seen that in Q2 2023, it was the first time that we will get the results of our cost of gross profit minus SG&A to be positive.

我們已經看到，在 2023 年第二季度，我們的毛利成本減去 SG&A 的結果首次為正。

And because of the of all known and expected industry turbulence actually in Q3 and Q4 in 2023, we suffer from the of profitability that now seems like getting to normal.

由於 2023 年第三季和第四季實際上所有已知和預期的行業動盪，我們的獲利能力受到了影響，但現在看來已經恢復正常。

And you would have seen that in Q1 2024, We'll get our return to profitable again and that as a very good sign of Burning Rock in outlet, we will do our best to make that number bigger and bigger until the whole company, our cash flow, the possibility in the future.

你會看到，在 2024 年第一季度，我們將再次恢復盈利，這是 Burning Rock 進入出口的一個非常好的跡象，我們將盡最大努力使這個數字越來越大，直到整個公司，我們的現金流，未來的可能性。

And in terms of the detail of the what we have done to make the company a profitable.

就我們為使公司盈利所做的工作的細節而言。

I will turn to our CFO, Leo Li, to explain that.

我將請我們的財務長 Leo Li 來解釋這一點。

Thank you, Yansheng.

謝謝你，彥生。

So I wish I mentioned we continue to make progress in the first quarter and I'd like to elaborate on specific expense lines going forward.

因此，我希望我提到我們在第一季繼續取得進展，我想詳細說明未來的具體費用項目。

So let's go to page 6.

那麼讓我們翻到第 6 頁。

This is the most important item in us driving our operating efficiency.

這是我們推動營運效率的最重要的項目。

You can see that the latest quarter, we achieved sales and marketing expenses as a percentage of revenue at 35%.

您可以看到，最近一個季度，我們的銷售和行銷費用佔收入的比例達到了 35%。

That is a historic low or the most efficient quarter in our recent operating history.

這是我們近期營運歷史上的歷史最低點或效率最高的季度。

You can see that we've come a long way in the middle of 2022, and that is driven by a lot of the hard work from our sales and marketing team.

您可以看到，我們在 2022 年中期取得了長足的進步，這要歸功於我們的銷售和行銷團隊的大量辛勤工作。

So we are delivering on the this result.

所以我們正在實現這個結果。

And this improving sales and marketing efficiency is what underpins our improving operating profitability.

銷售和行銷效率的提高是我們提高營運利潤的基礎。

That is the most important factor behind the trend.

這是趨勢背後最重要的因素。

Then going forward, on page 7, we talked about our gross profit margin in our previous call.

接下來，在第 7 頁，我們在先前的電話會議中討論了我們的毛利率。

We continue to make progress and there is no material update on this matter in this quarter.

我們繼續取得進展，本季沒有關於此事的重大更新。

Then going to page 8, looking at our general and admin expenses.

然後轉到第 8 頁，查看我們的一般費用和管理費用。

In our previous quarterly call, we talked about a reduction of headcount reduction of office space and other fixed operating footprint that we have carried out that drops that reduces our G&A expenses.

在我們之前的季度電話會議中，我們談到了減少員工人數、減少辦公空間和其他固定營運足跡，這些措施減少了我們的一般管理費用。

We mentioned that we continue to expect further savings into this year, so you can see that in the first quarter, we have achieved a significant drop in this quarter compared to the same period last year.

我們提到，我們繼續預計今年將進一步節省開支，因此您可以看到，在第一季度，我們在本季度實現了與去年同期相比的大幅下降。

So the factors that we mentioned before, they continue to give us additional savings and we will keep working hard at reducing our operating footprint.

因此，我們之前提到的因素將繼續為我們帶來額外的節省，我們將繼續努力減少我們的營運足跡。

I would like to also make comments on our cash position, which is shown on page 9 we ended the quarter with RMB573 million, a cash balance.

我還想對我們的現金狀況發表評論，第 9 頁顯示我們本季末的現金餘額為 5.73 億元。

And if you contrast that with our cash outflow, so we have reduced our cash outflow significantly from 2020 to 2023, we expect to make further progress in 2024.

如果將其與我們的現金流出進行對比，那麼我們從 2020 年到 2023 年大幅減少了現金流出，我們預計將在 2024 年取得進一步進展。

Our guidance is for an cash outflow in a range of RMB150 million to RMB200 million for the year of 2024.

我們的指引是 2024 年現金流出在人民幣 1.5 億元至 2 億元之間。

We still have a couple of regulatory and important projects going off for this year.

今年我們仍有一些監管項目和重要項目正在進行。

So we expect additional savings into 2025.

因此，我們預計到 2025 年還會有更多節省。

So we expect our operating cash outflow to drop further in the year 2025, although at this stage, we are not at a point to give specific quantitative guidance.

因此，我們預計 2025 年我們的經營現金流出將進一步下降，儘管現階段我們還沒有給出具體的量化指引。

So I want to benchmark that operating cash outflow against the cash balance that we have on hand.

因此，我想根據我們手頭上的現金餘額來衡量營運現金流出。

We see a good three years of cash runway.

我們看到了三年良好的現金跑道。

So we should be in no rush to do any capital raising.

因此，我們不應該急於進行任何融資。

So we have the initiative on ourselves and that provides us a good runway going forward.

因此，我們擁有主動權，這為我們前進提供了一個良好的跑道。

Page 10 talks about our P&L and here I have some comments on the revenue line.

第 10 頁討論了我們的損益表，在這裡我對收入線有一些評論。

So we had a change in our industries operating environment, and that was well reported by the press, which started in July last year.

因此，我們的產業營運環境發生了變化，媒體對此進行了充分報道，從去年 7 月開始。

And within that context, you can see that we are accelerating our transition away from central lab and more towards the hospital.

在這種背景下，您可以看到我們正在加速從中心實驗室到醫院的轉變。

So we are getting more share of revenue from in-hospital and first quarter this year marks the first quarter where we're getting more revenues from in-hospital than from central lab on.

因此，我們從醫院內獲得的收入份額越來越大，今年第一季標誌著我們從醫院內獲得的收入比從中心實驗室獲得的收入更多的第一季。

So I think we are and continuing to make progress in that transition in that transition.

因此，我認為我們正在並將繼續在這一轉型中取得進展。

As you can see in the first quarter, we have recovered in hospital business.

正如你在第一季看到的，我們的醫院業務已經復甦。

It is growing on a year-over-year and sequential basis and that is going to be the long-term share growth driver.

它正在逐年和環比增長，這將成為長期份額增長的驅動力。

For our revenue lines, we continue to get into new hospitals and deploy new products.

對於我們的收入線，我們繼續進入新醫院並部署新產品。

We expect to win more hospitals going forward.

我們預計未來將贏得更多醫院。

So this is the most important line for our clinical business.

所以這是我們臨床業務最重要的一條線。

So the overall revenue is up 4% on a quarter-over-quarter basis, and that's mostly driven by the in-hospital line.

因此，整體收入環比增長了 4%，這主要是由住院線推動的。

So that is that is the additional comments we'd like to add here on the operating expenses.

這就是我們想在這裡添加的關於營運費用的額外評論。

We've talked about them before, and we'd like to recap here that if you look at the non-GAAP gross profit and minus sales, G&A expenses, we are at a positive on commercial, our breakeven points in Q1.

我們之前已經討論過它們，我們想在這裡回顧一下，如果你看看非公認會計準則毛利潤並減去銷售額、一般及行政費用，我們在商業方面處於積極狀態，我們在第一季度的盈虧平衡點。

In the previous results call, we said that our guidance was to achieve this objective in the first half of 2024.

在先前的業績電話會議中，我們表示我們的指導是在 2024 年上半年實現這一目標。

And we are very pleased that we hit that goal in the first quarter.

我們很高興我們在第一季實現了這一目標。

Our latest guidance is to achieve positive non-GAAP gross profit minus SG&A for the whole year of 2024.

我們的最新指引是在 2024 年全年實現扣除 SG&A 後的正非 GAAP 毛利。

So that is what we are working on for the year of 2024 to show that on the operating level, our business are profitable, that we have a few R&D items that we're going to work through, and we're going to work towards positive breakeven for the whole company going forward.

這就是我們在 2024 年所做的工作，以表明在營運層面上，我們的業務是有利可圖的，我們有一些研發項目需要完成，我們將努力實現整個公司未來將實現積極的盈虧平衡。

So that concludes on the remarks for our financial section.

我們的財務部分的發言就到此結束。

And operator, if there are no further remarks or questions, then we're happy to conclude the call.

接線員，如果沒有進一步的評論或問題，那麼我們很高興結束通話。

Thank you.

謝謝。

That does conclude the conference for today.

今天的會議到此結束。

Thank you for participating.

感謝您的參與。

You may now all disconnect.

你們現在可以斷開連結了。

Have a nice day.

祝你今天過得愉快。