111 Inc (YI) 2024 Q3 法說會逐字稿

Hello, everyone, and thank you for joining 111's conference call today.

大家好，感謝您參加今天的111電話會議。

On the call today from the company are Dr. Gang Yu, Co-Founder and Executive Chairman; Mr. Junling Liu, Co-Founder, Chairman and CEO; Mr. Luke Chen, CFO of 111's Major subsidiary; and Mr. Haihui Wang, COO.

今天參加電話會議的公司有共同創辦人兼執行董事長於剛博士；劉俊玲先生，共同創辦人、董事長兼執行長； 111公司主要子公司CFO Luke Chen先生；以及營運長王海輝先生。

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

提醒一下，今天的電話會議將透過網路直播。

The company's earnings press release was distributed earlier today and together with the earnings presentation are available on the company's IR website.

該公司的盈利新聞稿已於今天早些時候發布，並與盈利報告一起發佈在該公司的 IR 網站上。

Before the conference call gets started, let me remind you that this call may contain forward-looking statements made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

在電話會議開始之前，請允許我提醒您，本次電話會議可能包含根據 1995 年私人證券訴訟改革法的安全港條款做出的前瞻性陳述。

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, all of which would cause actual results to differ materially.

此類聲明是基於管理層目前的預期和當前的市場及營運條件，並與已知和未知的風險、不確定性和其他因素有關的事件有關，所有這些因素都可能導致實際結果大不相同。

For more information about these risks, please refer to the company's filing with the SEC. 111 does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.

有關這些風險的更多信息，請參閱該公司向美國證券交易委員會提交的文件。 111 不承擔因新資訊、未來事件或其他情況而更新任何前瞻性陳述的義務，除非適用法律另有要求。

Please note that all numbers are in RMB and all comparisons refer to year-over-year comparisons, unless otherwise stated.

請注意，除非另有說明，所有數字均以人民幣計算，所有比較均指同比比較。

Please also refer to the earnings press release for detailed information of the comparative financial performance on a year-over-year basis.

有關同比財務業績比較的詳細信息，請參閱收益新聞稿。

With that, I will turn the call over to 111's CEO, Mr. Junling Liu.

現在，我將把電話轉給 111 的執行長劉俊玲先生。

Please go ahead.

請繼續。

Good morning and good evening everyone.

大家早安，晚上好。

Thank you for joining our third quarter 2024 earnings.

感謝您加入我們的 2024 年第三季財報。

The information we will be discussing is also available in the slides posted earlier today on the company's website.

我們將要討論的資訊也可以在公司網站今天早些時候發布的幻燈片中找到。

I encourage everyone to download the presentation as well as the earnings report from our investor relations website at ir.111.com.cn.

我鼓勵大家從我們的投資者關係網站ir.111.com.cn下載該簡報以及收益報告。

And China's challenging macroeconomic environment continues to have an impact on our entire industry including both the upstream and the downstream sectors.

中國充滿挑戰的宏觀經濟環境持續對我們整個產業，包括上游和下游產業產生影響。

While challenges are inevitable, we still achieve a stellar performance, maintaining operational profitability for three consecutive quarters.

儘管挑戰不可避免，但我們仍然取得了出色的業績，連續三個季度保持營運盈利。

This achievement is primarily driven by our ongoing enhancement in operational efficiency which have helped us navigate the unfavorable environment.

這項成就主要得益於我們不斷提高的營運效率，這幫助我們度過了不利的環境。

In today's call, I will provide an in depth overview of the current market situation facing our industry as well as the long term outlook and the opportunities ahead along with our key financial highlights.

在今天的電話會議中，我將深入介紹我們行業面臨的當前市場狀況以及長期前景和未來機會以及我們的主要財務亮點。

I will also discuss how we are leveraging new technologies to strengthen operations, our supply side initiatives, and our recent athletes.

我還將討論我們如何利用新技術來加強營運、供應方舉措以及我們最近的運動員。

Finally, I will outline our future growth strategy before handing over to our CFO Mr. Luke Chen who will provide a detailed analysis of our financial performance.

最後，我將概述我們未來的成長策略，然後交給我們的財務長 Luke Chen 先生，他將對我們的財務表現進行詳細分析。

First, on the macroeconomic side, in light of weak consumer sentiments, sales growth in retail goods has slowed in China.

首先，從宏觀經濟角度來看，受消費者信心低迷影響，國內社會消費品零售總額成長放緩。

Our industry is also experiencing cultures household spending on health care.

我們的行業也正在經歷家庭醫療保健支出的文化。

According to data from the National Bureau of Statistics, per capita healthcare expenditure growth rate declined 11.5% points from a year earlier for the first nine months.

國家統計局數據顯示，1-9月份，全國居民人均衛生費用成長率年減11.5個百分點。

Additionally, our downstream pharmacies are facing ongoing healthcare reforms including adjustments to individual medical accounts and the gradual implementation of coordinated outpatient benefits alongside increased regulatory oversight.

此外，我們下游的藥局正面臨正在進行的醫療改革，包括個人醫療帳戶的調整和協調門診福利的逐步實施以及監管監督的加強。

While these reforms are designed to drive long term development of the industry, the short term outlook remains challenging.

雖然這些改革旨在推動產業的長期發展，但短期前景仍充滿挑戰。

An aggressive expansion of pharmacies was fueled by optimism during the pandemic.

疫情期間的樂觀情緒推動了藥局的大力擴張。

While the total number of stores has increased, market growth has not kept pace as evidenced by a 2.2% decrease in China's retail pharmacy sales from the first 9 months of 2024 according to Zhongkang Kaisi System data.

雖然門市總數有所增加，但市場成長並未跟上步伐，中康開思系統的數據顯示，2024年前9個月中國零售藥局銷售額下降了2.2%。

This disparity has led to reduced per store revenues and intensified the competition among pharmacies.

這種差距導致每家店的收入減少，並加劇了藥局之間的競爭。

Many large chain pharmacies are now grappling with a significant decline in net profit while independent pharmacies with their limited resources are under even greater pressure.

目前，不少大型連鎖藥局淨利大幅下滑，資源有限的獨立藥局壓力更大。

For instance, Yang Xin Tang of YXT Health reported a 94% year over year decline in Q3 net income attributable to ordinary shareholders followed by a 68% decrease at Jianzhijia, or JZJ China Drugstore; 37% at Laobaixing, or LBX Pharmacy Chain; and 22% at DaShenLin, or DaShenLin Pharmaceutical Group.

例如，永祥堂醫藥旗下養心堂第三季歸屬於普通股股東的淨利潤年減94%，健之家（JZJ中國藥局）淨利下降68%；老百姓大藥局連鎖37%；大參林藥業集團持有22%的股份。

Against this backdrop, it is more critical than ever for digital transformation in this industry which presents vast opportunities for us.

在此背景下，該產業的數位轉型比以往任何時候都更加關鍵，這為我們帶來了巨大的機會。

Pharmacists must navigate to subdue the consumer sentiment, slower growth in household healthcare spending, and the shifts in patient behavior while addressing cost pressures alongside operational efficiencies.

藥劑師必須設法抑制消費者情緒、家庭醫療支出成長放緩以及患者行為轉變，同時解決成本壓力和營運效率。

Looking ahead, there needs to be more innovation in service delivery and a strategic adjustments to categories to sustain growth and adapt to a transforming market.

展望未來，需要在服務交付方面進行更多創新，並對產品類別進行策略調整，以保持成長並適應不斷變化的市場。

For this, digitization and AI applications could serve as solutions for retail development.

為此，數位化和人工智慧應用可以作為零售業發展的解決方案。

As a leader in this digital revolution, we have already implemented cutting edge digital technologies to enhance every aspect of our operations from sales and procurement to customer demand analysis, inventory management, and warehouse allocation and so on.

作為這場數位革命的領導者，我們已經實施了尖端的數位技術來增強我們營運的各個方面，從銷售和採購到客戶需求分析、庫存管理和倉庫分配等。

We are committed to empowering our upstream and [downstream] partners with our fully digitized operating system further reducing their ongoing cost and increasing efficiency.

我們致力於透過完全數位化的作業系統為我們的上游和下游合作夥伴提供支持，進一步降低他們的持續成本並提高效率。

In addition to the unstoppable trend of digital transformation, we remain optimistic about China's healthcare market in the long term for two key reasons.

除了數位轉型勢不可擋的趨勢外，我們對中國醫療健康市場的長期前景仍持樂觀態度，主要有兩個原因。

First, the deepened national anti-corruption campaign in the healthcare sector which will foster greater transparency and integrity in hospital procurement is expected to accelerate the shift of drug sales and prescriptions to retail pharmacies.

首先，隨著全國醫療衛生領域反腐敗風暴的不斷深入，醫院採購的透明度和誠信將進一步提高，預計藥品銷售和處方將加速向零售藥局的轉移。

This will become RMB1 trillion out of hospital pharmaceutical distribution market which will amount for almost half of the entire distribution market within about three years.

這將形成一兆的院外醫藥分銷市場，大約三年內就會占到整個分銷市場的一半左右。

Our customer focus is on chain pharmacists and with our expertise in the [out-of-hospital] pharmaceutical market, we are well positioned to capture the significant growth opportunities.

我們的客戶重點是連鎖藥局，憑藉我們在院外藥品市場的專業知識，我們有能力抓住巨大的成長機會。

This shift brings by offering a comprehensive and cost efficient product range coupled with an unwavering commitment to customer experience.

這種轉變透過提供全面且具成本效益的產品系列以及對客戶體驗的堅定承諾而實現。

We aim to increase market share in this sector where challenges and opportunities coexist.

我們的目標是在這個挑戰與機會並存的領域增加市場佔有率。

Second, we expect China's large aging population and the rise of the silver economy to drive significant demand for healthcare consumption.

其次，我們預期中國龐大的老齡人口和銀髮經濟的崛起將推動醫療消費的巨大需求。

Given the healthcare expenditure as a proportion of GDP in China, is still lower than in the developed countries.

鑑於中國的醫療衛生費用佔GDP的比重，仍低於已開發國家。

The overall upward trend in the pharmaceutical and healthcare market remains strong in the long run.

從長期來看，醫藥保健市場整體上升趨勢依然強勁。

In Q3, our commitment to operational efficiency continued to drive significant results with cheap profit from operations for third consecutive quarter.

第三季度，我們對營運效率的承諾持續帶來顯著的成果，連續第三個季度獲得了低廉的營運利潤。

Income from operations in Q3 was RMB2.4 million compared to an operating loss of RMB80.4 million in the same quarter last year.

第三季營業利潤為240萬元人民幣，去年同期營業虧損為8,040萬元。

Non-GAAP income from operations was RMB7.1 million compared to a Non-GAAP loss of RMB54 million in Q3 of the prior years.

非美國通用會計準則下營業利潤為710萬元人民幣，去年同期非美國通用會計準則下營業虧損為5,400萬元。

This performance improvement underscore the effectiveness of our growth strategies and the resilience of our business model.

這項業績提升凸顯了我們成長策略的有效性和商業模式的彈性。

We observe consistent positive changes across nearly all business segments.

我們觀察到幾乎所有業務部門都發生了持續的正面變化。

Total operating expenses in Q3 were 5.8% of net revenues, a 160 basis points decrease from the prior year.

第三季總營業費用佔淨收入的 5.8%，比上年減少 160 個基點。

Fulfillment expenses remain steady at 2.8% of net revenues in line with the previous year.

履行費用與上年持平，為淨收入的 2.8%。

However, we successfully reduced the general and administrative expenses to 0.4% of net revenues from 1.3% a year ago.

然而，我們成功地將一般及行政開支從一年前的淨收入的1.3%削減至0.4%。

Selling expenses decreased to 2.1% of net revenues compared to 2.6% in the prior year.

銷售費用佔淨收入的 2.1% 低於上年度的 2.6%。

Technology expenses was 0.5% of net revenues down from 0.7% a year earlier.

技術支出佔淨收入的 0.5%，低於去年同期的 0.7%。

Excluding share based compensation, operating expenses as a percentage of net revenues dropped 100 basis points to 5.7%.

不包括股權激勵，營業費用佔淨收入的百分比下降 100 個基點至 5.7%。

Additionally, we remained a positive operating cash flow of RMB110 million for the third consecutive quarter.

此外，我們連續第三季維持人民幣1.1億元的正經營現金流。

Our investment in infrastructure and optimal staffing allocation have proven to be effective in navigating the current economic challenges while maintaining robust performance.

事實證明，我們對基礎設施的投資和最佳人員配置能夠有效應對當前的經濟挑戰，同時保持強勁的業績。

We have maintained our focus on areas that foster long term sustainable growth ensuring that our digital capabilities remain at the forefront of industry standards.

我們一直專注於促進長期可持續成長的領域，確保我們的數位能力始終處於行業標準的前沿。

This quarter, our advanced digital infrastructure consistently delivered exceptional value to our customers with further reductions in technology and staffing expenses.

本季度，我們先進的數位基礎設施持續為客戶提供卓越的價值，同時進一步降低技術和人員成本。

These operational efficiencies have not only allowed us to withstand a competitive market but have also supported our ability to adapt and thrive amidst broader economic uncertainties as well as prepare us for long term opportunities.

這些營運效率不僅使我們能夠承受競爭激烈的市場，而且還支持我們在更廣泛的經濟不確定性中適應和發展的能力，並為我們獲得長期機會做好準備。

While our revenue remains comparatively smaller than some more established players, we continue to boost operational efficiency metrics, positioning us competitively.

儘管我們的收入與一些較成熟的公司相比仍然相對較小，但我們仍在不斷提高營運效率指標，從而保持競爭力。

We remain [dedicated] to setting the industry benchmark for efficiency with a clear goal of reducing operating costs even further and improving profitability with more refined and the bigger operations.

我們始終致力於建立產業效率標桿，明確目標是進一步降低營運成本，並透過更精細化、更大的營運來提高獲利能力。

This steadfast commitment is a cornerstone of our strategy and that represents a vital part of our unique competitive advantage of note.

這項堅定的承諾是我們策略的基石，也是我們獨特競爭優勢的重要組成部分。

Those savings from our ongoing efficiencies will add flexibility and strength to our business while reinforcing our position as a leading health care e-commerce operator.

我們持續提高效率所節省的成本將增強我們業務的靈活性和實力，同時鞏固我們作為領先醫療保健電子商務營運商的地位。

They could be reinvested into strategic areas such as technological innovation, market expansion, and enhanced customer engagement when appropriate.

在適當的時候，它們可以重新投資到技術創新、市場擴張和增強客戶參與度等策略領域。

Technologically, we continue to invest in system development models, algorithms, and data applications to build our core competitiveness in digitization.

技術上，我們持續投入系統開發模型、演算法、數據應用，打造數位核心競爭力。

Consequently, we have made multiple advancements by applying digital and AI technologies that have strategically positioned us for continued success.

因此，我們透過應用數位和人工智慧技術取得了多項進步，為我們持續取得成功做好了策略準備。

With our JBP platform and inventory sharing technology, we seamlessly integrated with upstream suppliers to form a unified and a comprehensive stock pool that has significantly bolstered stock volume and availability.

我們利用JBP平台和庫存共享技術，與上游供應商無縫對接，形成統一、全面的庫存池，大大提高了庫存量和可用性。

This advancement has enriched the product selection of additional 23,000 new SKU.

這項進步豐富了另外 23,000 個新 SKU 的產品選擇。

As a result, our supply capacity has been strengthened ensuring that we can meet customer demands more effectively and efficiently.

因此，我們的供應能力得到增強，確保我們能夠更有效、更有效率地滿足客戶需求。

We also utilize the supply chain optimization and the smart pricing tools for the B2C online retail segment to enrich product offerings and adapt to market demands.

我們也利用B2C線上零售領域的供應鏈優化和智慧定價工具來豐富產品供應並適應市場需求。

This resulted in 100% increase in product categories and a record high customer conversion rate of over 13%.

這使得產品類別增加了 100%，客戶轉換率創下了 13% 以上的新高。

This progress highlights the significant impact of data driven decision making and the platform innovation in sustaining growth within the challenging retail environment.

這項進展凸顯了數據驅動決策和平台創新對於在充滿挑戰的零售環境中保持成長的重大影響。

Moreover, we made outstanding progress in applying AI-driven solutions particularly in the Chinese herbal medicine sector by training and the refining algorithm models for specification recognition.

此外，我們在應用人工智慧驅動的解決方案方面取得了突出進展，特別是在中草藥領域，透過訓練和細化規範識別演算法模型。

We increased the recognition accuracy of our AI model from 77% to an impressive 98.18% through multiple iterations.

我們透過多次迭代，將AI模型的辨識準確率從77％提高到了令人印象深刻的98.18％。

The accuracy rate of content matching for herbal medicine has similarly improved rising from 43% to 96%.

草藥含量匹配的準確率也從43%提高到96%。

Our competitive edge gets sharpened by optimizing inventory management and enhancing product offerings.

透過優化庫存管理和增強產品供應，我們的競爭優勢得到增強。

Our focus on continuous technological innovation is strategically important as it supports our mission to build a resilient, efficient, and customer oriented business for adapting to evolving industry needs.

我們專注於持續的技術創新，這具有重要的戰略意義，因為它支持我們建立一個有彈性、高效、以客戶為導向的企業，以適應不斷變化的行業需求的使命。

By integrating advanced digital technologies and AI solutions, we are laying the groundwork for future growth and making ourselves better to navigate future market challenges.

透過整合先進的數位技術和人工智慧解決方案，我們為未來的發展奠定基礎，並更好地應對未來的市場挑戰。

Next, let's delve into our supply chain management.

接下來我們深入探討我們的供應鏈管理。

We are setting an industry benchmark in supply chain excellence, consistently innovating in procurement, warehousing, and order fulfillment to elevate efficiency.

我們正在樹立卓越供應鏈的產業標桿，不斷在採購、倉儲和訂單履行方面進行創新以提高效率。

Our expansion of the Kunpeng network is pivotal aimed at providing streamline the logistics services that enhance both internal and external operations at a lower cost.

我們擴展鯕鵬網路的關鍵目的是提供簡化的物流服務，以更低的成本增強內部和外部營運。

During Q3, this cross fulfillment transshipment model enabled an extended proprietary network that connects our five major superpowers across east, central, south, north, and the southwest China.

在第三季度，這種交叉履行轉運模式使我們的專有網路連接起了華東、華中、華南、華北和西南地區的五大超級大國。

This development is setting the stage for a comprehensive Kunpeng national network enriched with first mile and last mile services to ensure seamless end to end supply chain control.

這項發展為建立全面的鯕鵬全國網路奠定了基礎，該網路豐富了第一英里和最後一英里服務，以確保無縫的端到端供應鏈控制。

I want to highlight that under the Kunpeng pharmaceutical logistics network, we added eight new transportation routes in Q3 bringing the total to 28.

我想強調的是，在鯤鵬醫藥物流網絡下，我們第三季新增了8條運輸線路，總數達到28條。

The network also increased its external customer base by 12, reaching 16.7% rise from Q2.

該網路的外部客戶群還增加了 12 個，較第二季成長了 16.7%。

This project achieved the cost savings of more than [RMB5.3 million] to date.

該項目迄今已實現成本節約超過[人民幣530萬元]。

As the Kunpeng network scales and integrates last mile services, we have witnessed a decrease in logistics and delivery expenses.

隨著鯤鵬網路規模化、最後一公里業務的融合，物流配送費用不斷下降。

When combined with optimized warehouse labor, packaging, and warehousing, these efforts have driven an 8% year over year reduction in fulfillment costs to RMB277 million in the first three quarters.

透過結合優化的倉庫勞動力、包裝和倉儲，這些努力使得前三個季度的履行成本比去年同期下降 8% 至人民幣 2.77 億元。

Moreover to drive future growth and to coordinate with our strategy for the nationwide network, we also strengthened our supply chain infrastructure.

此外，為了推動未來成長並配合我們的全國網路策略，我們也加強了供應鏈基礎設施。

We completed the Guangzhou fulfillment center relocation project in Q3 which is projected to yield monthly cost savings of RMB800,000.

我們於第三季完成了廣州履行中心搬遷項目，預計每月可節省成本人民幣80萬元。

We're also expanding our fulfillment centers nationwide with four new facilities in Wuhan, Guangzhou, Ji'nan, and Shijiazhuang, amplifying our existing supply capabilities.

我們也在全國各地擴大我們的履行中心，在武漢、廣州、濟南和石家莊設立四個新設施，以增強我們現有的供應能力。

These centers notably cut delivery times for local customers by up to two days, reinforcing our ability to cover [600] major cities within 24 hours.

這些中心顯著將當地客戶的送貨時間縮短了兩天，增強了我們在 24 小時內覆蓋 [600] 個主要城市的能力。

And a nationwide within 72 hours.

且全國範圍內72小時內。

With each new center, we reduce local fulfillment costs by as much as 20% providing clear strategic advantages.

隨著每個新中心的建立，我們將本地履行成本降低 20%，從而提供明顯的策略優勢。

The expansion is also marked by an upgrade in our product assortment with the Guangdong Center adding 5,000 new SKUs.

此次擴張也標誌著我們產品種類的升級，廣東中心增加了 5,000 個新 SKU。

Now, our network encompasses 15 fulfillment centers.

現在，我們的網路涵蓋 15 個履行中心。

Five of these centers act as central hubs supporting deeper penetration into Tier 3 to 6 tiers, where over 60% of our pharmacy customers base rates resides.

其中五個中心充當中央樞紐，支援進一步滲透到 3 至 6 級市場，我們 60% 以上的藥房客戶基本費率位於這些市場。

To further enhance reach and service, we have adopted a collaborative approach for faster fulfillment center expansion by transforming existing warehouses into full fledged fulfillment centers with 100% use of digitized systems and the processes, we cut set up time by 70%.

為了進一步擴大覆蓋範圍和服務，我們採取協作方式，將現有倉庫改造為功能齊全的履行中心，100% 使用數位化系統和流程，以加快履行中心的擴展，並將設定時間縮短了 70%。

Our newly adopted franchise model which provides 111 with a share of gross merchandise value presents a highly effective, margin friendly solution for reaching remote regions. 111 plans to expand its fulfillment centers footprint by adding at least five more centers over the next year.

我們新採用的特許經營模式為 111 提供了商品交易總額的份額，為覆蓋偏遠地區提供了一種高效、利潤友好的解決方案。 111 計劃在未來一年內新增至少五個配送中心，以擴大其配送中心的覆蓋範圍。

Furthermore, as we review this quarter's achievements, I would like to highlight some significant honors that underscore our operational strength and the strong business influence in the regional markets along with our continued technological advancements.

此外，在回顧本季的成就時，我想強調一些重要的榮譽，這些榮譽凸顯了我們的營運實力和在區域市場的強大業務影響力以及我們持續的技術進步。

In September, our Southwest operation center, Chongqing Yihao Pharmaceutical Co., Limited was named among the Top 100 Service Industry Enterprises in Chongqing for the second consecutive year.

9月，西南營運中心重慶一豪藥業有限公司連續第二年榮獲「重慶服務業百大企業」稱號。

In October, our Central China operation center, Hubei, Iha Pharmaceutical Co., Limited was included in the Top 100 private enterprises in Wuhan list for the second consecutive year.

10月，華中營運中心湖北伊波製藥有限公司連續第二年入圍武漢市民營企業100強榜單。

Additionally, in October our South China Operations Center, Guangdong Yihao Pharmaceutical Co., Limited earns a place on the 2024 Top 100 Private Enterprises in Guangdong.

此外，10月份，我們的華南營運中心廣東一豪藥業有限公司榮獲2024年度廣東民營企業100強稱號。

And it was also named among the Top 50 private service enterprises in Guangdong for 2024.

並被評為2024年度廣東民營服務業企業50強。

We greatly appreciate vaccination from local markets and the industry.

我們非常感謝當地市場和業界的疫苗接種。

And I believe these acknowledgments will enhance our credibility as we continue to expand our footprint and drive innovation in the healthcare ecommerce space.

我相信，隨著我們繼續擴大影響力並推動醫療保健電子商務領域的創新，這些認可將增強我們的信譽。

Last but not least, I'd like to outline our strategies for revenue, margin, and profit levels.

最後但同樣重要的一點是，我想概述我們的收入、利潤和利潤水平策略。

At 111, our business approach emphasizes providing customers with the most comprehensive selection of pharmaceutical products at attractive prices for greater customer engagement.

在 111，我們的經營方式強調以極具吸引力的價格為客戶提供最全面的藥品選擇，以吸引更多的客戶。

Through leveraging data analytics and market research, we can efficiently refine our product portfolio to align with customer preferences while maintaining competitive pricing by utilizing intelligent digital tools.

透過利用數據分析和市場研究，我們可以利用智慧數位工具有效地改善我們的產品組合，以滿足客戶偏好，同時保持有競爭力的價格。

We are also committed to enhancing our cooperation with pharmaceutical companies.

我們也致力於加強與製藥公司的合作。

By expanding these collaborations, we aim to diversify our range of medicines on our digitally empowered platform, increasing sales that generate neutral growth, especially across lower tier cities.

透過擴大這些合作，我們的目標是在我們的數位化平台上實現藥品種類的多樣化，從而增加可產生中性成長的銷售額，尤其是在低線城市。

Our robust digital marketing network is integral to this strategy, enabling pharmaceutical companies curate and showcase their product offerings more effectively.

我們強大的數位行銷網路是這項策略不可或缺的一部分，使製藥公司能夠更有效地策劃和展示他們的產品。

We will also utilize targeted marketing initiatives to raise brand awareness and expand to previously underserved markets.

我們還將利用有針對性的行銷措施來提高品牌知名度，並擴展到先前服務不足的市場。

Through our platform, pharmaceutical companies can access the valuable insights strengthen their product selection, and efficiently scale their operations.

透過我們的平台，製藥公司可以獲得寶貴的見解，加強其產品選擇，並有效擴大其營運規模。

For us, as we provide optimized product portfolio and to sell more products, we will see an improvement in our overall profitability.

對我們來說，隨著我們提供優化的產品組合併銷售更多產品，我們將看到整體獲利能力的提高。

Model front, we're prioritizing investments into our JBP platform.

模型方面，我們優先投資我們的 JBP 平台。

This unique model has proven highly effective in engaging new partners and offering the broader range of products, showcasing its powerful value proposition.

這種獨特的模式已被證明在吸引新合作夥伴和提供更廣泛的產品方面非常有效，並展示了其強大的價值主張。

By refining the platform to satisfy partner needs and extending its reach, we expect to cultivate a more diverse partner base and unlock expanded sales opportunities.

透過完善平台以滿足合作夥伴的需求並擴大其覆蓋範圍，我們希望培養更加多樣化的合作夥伴基礎並釋放更多的銷售機會。

As we continue to enhance and scale the platform, we believe this model will solidify our competitive position and evolve into a catalyst for stronger growth and profitability.

隨著我們不斷增強和擴大平台，我們相信這種模式將鞏固我們的競爭地位，並成為更強勁成長和獲利能力的催化劑。

We remain focused on enhancing operational efficiency supported by ongoing investment in leading technologies that streamline processes, reduce waste, and boost productivity.

我們始終專注於提高營運效率，並持續投資於簡化流程、減少浪費和提高生產力的領先技術。

Our emphasis on AI and a full scale digitization is critical to maintaining industry leading efficiency, improving customer engagement, and fostering the development of new products and services.

我們重視人工智慧和全面數位化，這對於保持業界領先的效率、提高客戶參與度以及促進新產品和服務的發展至關重要。

These efforts are designed to reinforce our market leadership and stimulate fresh growth avenues.

這些努力旨在加強我們的市場領導地位並激發新的成長途徑。

Digital transformation is pivotal to our future.

數位轉型對我們的未來至關重要。

With 100% of our internal systems now digitized, we have enhanced the financial outcomes while positioning ourselves as a transformative leader, empowering the industry.

現在，我們 100% 的內部系統都已數位化，我們在提高財務績效的同時，將自己定位為變革的領導者，為產業賦能。

Our full spectrum technological ecosystem supports internal processes and extend its benefits to upstream and downstream customers, offering them access to the state of the art digital solutions and a specialized expertise.

我們全方位的技術生態系統支援內部流程並將其優勢擴展到上游和下游客戶，為他們提供最先進的數位解決方案和專業知識。

Looking ahead, we will amplify our commitment to [innovation] by integrating emerging technologies into our operations to create more seamless, more efficient customer experience.

展望未來，我們將透過將新興技術融入我們的營運來加強我們對[創新]的承諾，以創造更無縫、更有效率的客戶體驗。

With that.

就這樣。

I'll head for Mr. Luke Chen to walk through our financial results.

我將請 Luke Chen 先生介紹我們的財務表現。

Thank you.

謝謝。

Thank you, Junling and good morning or evening everyone.

謝謝俊玲，大家早安、晚上好。

Moving to our financial performance.

轉向我們的財務表現。

My prepared remarks were focused on a few key business and financial highlights.

我準備好的發言主要集中在幾個關鍵的商業和財務亮點。

For details on our third quarter, 2024 results, please refer to slide 17 to 20 in section 2 of our presentation.

有關我們 2024 年第三季業績的詳細信息，請參閱我們簡報第 2 部分的第 17 至 20 張幻燈片。

Again, all comparisons are year over year and all numbers are in RMB unless otherwise stated.

再次強調，除非另有說明，所有比較都是同比計算，所有數字均以人民幣為單位。

Let's start with the third quarter results.

讓我們從第三季的業績開始。

Total net revenues were RMB3.6 billion remaining relatively flat compared to the same quarter of last year.

總淨收入為人民幣36億元，與去年同期相比基本持平。

Profit for the quarter grew 10.5% to RMB210.6 million.

本季獲利成長10.5%至人民幣2.106億元。

Total operating expenses for the quarter decreased 23.2% to

本季總營運費用下降 23.2% 至

[RMB28.2 million].

【2820萬元人民幣】。

As a percentage of net revenues, total operating expenses for the quarter were down to [5.8%] from 7.4% as we continue to enhancing our operating leverage and optimize our operational efficiency.

作為淨收入的百分比，本季的總營運費用從 7.4% 下降至 [5.8%]，因為我們繼續提高營運槓桿並優化營運效率。

Specifically, procurement expenses remain steady at 2.8% of net revenues in line with the previous year. [Sales and] marketing expenses as a percentage of net revenue for the quarter were 2.1% down from 2.6% in the same quarter of last year.

具體而言，採購費用佔淨收入的2.8%，與前一年持平。本季銷售和行銷費用佔淨收入的百分比為 2.1%，低於去年同期的 2.6%。

General and administrative expenses accounted for 0.4% of net revenues down from 1.3% in the same quarter of last year.

一般及行政開支佔淨收入的 0.4%，低於去年同期的 1.3%。

Technology expenses amounted to 0.5% of net revenue down from 0.7% in the same quarter of last year.

技術支出佔淨收入的 0.5%，低於去年同期的 0.7%。

As a result, income from operations for RMB2.4 million compared to a loss from operations of RMB18.4 million in the same quarter of last year.

結果，本季營業利潤為240萬元人民幣，而去年同期營業虧損為1,840萬元。

Non-GAAP income from operations was RMB7.1 million compared to non-GAAP loss from operations of RMB54 million in the same quarter of last year.

非美國通用會計準則下營業利潤為710萬元人民幣，去年同期非美國通用會計準則下營業虧損為5,400萬元。

Non-GAAP net loss attributable to ordinary shareholders was RMB12.4 million compared to RMB66.9 million in the same quarter last year.

非美國通用會計準則下歸屬於普通股股東的淨虧損為人民幣1,240萬元，去年同期為人民幣6,690萬元。

As a percentage of net revenues, non-GAAP net loss attributed to ordinary shareholders accounted for 0.3% in the quarter, down from 1.8% in the same quarter of last year.

以淨收入百分比計算，本季歸屬於普通股股東的非公認會計準則淨虧損為 0.3%，低於去年同期的 1.8%。

As you can see, we're improving our financial performance quarter by quarter and maintained operation profit for the third consecutive quarter.

大家可以看到，我們的財務表現逐季改善，連續三個季度維持營業利潤。

Please refer to slide 21 to 25 of the appendix section for (technical difficulty) statements.

請參閱附錄部分的第 21 至 25 頁投影片中的（技術難度）陳述。

A quick note on our cash position as of September 30, 2024, we had a cash and cash equivalent, restricted cash, and short term investment of RMB614.4 million and we are pleased to report positive operating cash flow for the three consecutive quarters.

簡要說明我們的現金狀況，截至2024 年9 月30 日，我們的現金和現金等價物、受限現金和短期投資為人民幣6.144 億元，我們很高興地報告連續三個季度的經營現金流為正。

To date, the company has total outstanding amount of RNB1.1 billion which has been included in the balance of redeemable non-controlling interest and accrued expenses and other current liabilities, earning to a group of [investors] of 1Pharmacy technology pursuant to the equity investment made in 2020 as previously disclosed. 111 received redemption requests from certain of such investors in accordance with the terms of their initial investments in 1Pharmacy technology.

截至目前，該公司共有 11 億元未償還款項，已計入可贖回少數股東權益餘額和應計費用及其他流動負債，根據股權如前所述，2020 年的投資額為100 億歐元。 111 根據對 1Pharmacy 技術的初始投資條款，收到了某些此類投資者的贖回請求。

Following communication negotiation, the company has reached agreements and all commitment letters with investors representing approximately 90% of total amount to reschedule the repayments, allowing for [phased] repayments as extended periods.

經過溝通協商，本公司已與佔總金額約90%的投資人達成協議及全部承諾函，同意重新安排還款時間，延長還款期限。

If the holders exercise the redemption right.

若持有人行使贖回權。

The government may have paid a portion of the repurchase funds upon signing the agreement.

政府在簽署協議時可能已經支付了部分回購資金。

Additionally, the company is in ongoing discussions with investors who is holding the remaining approximately 10% of the total amount.

此外，該公司正在與持有剩餘約 10% 總金額的投資者進行談判。

This concludes our prepared remarks.

我們的準備好的演講到此結束。

Thank you operator.

謝謝接線生。

We are now ready to begin the Q&A session.

我們現在準備開始問答環節。

(Operator Instructions)

（操作員指令）

Jessie Lu, HSBC.

匯豐銀行的 Jessie Lu。

Thank you for taking my question.

感謝您回答我的問題。

This is Jessie from HSBC.

我是匯豐銀行的傑西。

First of all, I want to -- congratulations on delivering a very resilient result despite the challenging macro environment.

首先，我要祝賀您在充滿挑戰的宏觀環境下仍然取得了非常強勁的業績。

I have two questions.

我有兩個問題。

The first one on OpEx.

第一個是關於 OpEx 的。

I noticed that for OpEx as a percentage of revenue, it is around 5.8% to 6% over the past three quarters.

我注意到，過去三個季度，營運支出佔收入的百分比約為 5.8% 到 6%。

I was wondering, going forward, is there room for this ratio to further come down?

我想知道，未來這個比例是否還有進一步下降的空間？

And what measures you plan to do to drive that further improvement in OpEx optimization?

您計劃採取哪些措施來進一步推動營運支出優化？

The second question is on GP margin.

第二個問題是關於毛利率。

Despite overall revenue has been flat year-on-year, we saw improvement for gross margin.

儘管整體收入同比持平，但我們看到毛利率有所改善。

Can you help us understand the factors driving this improvement?

您能幫助我們了解推動這項改善的因素嗎？

Thank you.

謝謝。

Jesse.

傑西。

First of all, thank you for the questions.

首先感謝您的提問。

With regards to the question about OpEx, the short answer is, yes, we will continue to reduce the expenditure in operating our business, and we will see more and more impressive OpEx numbers, because from day one of the company, our philosophy has always been to leverage technology to reshape the value chain of the industry, and we want to be the leader in operational efficiency.

關於營運成本的問題，簡短的回答是，是的，我們將繼續減少營運業務的支出，我們將看到越來越令人印象深刻的營運成本數字，因為從公司成立的第一天起，我們的理念就一直是我們致力於利用科技重塑產業價值鏈，成為營運效率的領導者。

So how do we do that?

那我們該怎麼做呢？

We believe that we have already become the leader in operational efficiency in the industry, and we remain committed to continue our effort in all aspects of our operations.

我們相信，我們已經成為行業營運效率的領導者，我們將繼續致力於在營運的各個方面繼續努力。

Our optimization across all of the business segments is core in our management's daily work, and we review those metrics on a weekly basis.

我們對所有業務部門的最佳化是我們管理日常工作的核心，我們每週都會審查這些指標。

We call it WBR.

我們稱之為 WBR。

And of course, technology is essential in containing OpEx, and we benefited big time in the past and no doubt it's going to continue to play an even bigger role in the future.

當然，科技對於控制營運支出至關重要，我們過去受益匪淺，毫無疑問，它將在未來繼續發揮更大的作用。

In the meantime, we will constantly optimize our organization and we'll do smart staffing.

同時，我們將持續優化組織機構，實現智慧化人員配置。

We believe a lot of those expenses are coming from people.

我們相信其中很大一部分開支來自於民眾。

And if we could deploy those resources carefully and intelligently, we can achieve savings.

如果我們能夠謹慎而明智地部署這些資源，我們就能實現節約。

And of course, innovation in all aspects of our business is going to be key.

當然，我們業務各方面的創新都是關鍵。

I laid out some examples, especially in our supply chain, to give you an illustration.

我列舉了一些例子，特別是在我們的供應鏈中，以便給你們說明。

That's going to help us to stay competitive.

這將有助於我們保持競爭力。

In the past, we only relied on building those fulfillment centers first party, ourselves.

過去，我們只靠自己建造第一方履行中心。

Obviously, nowadays, we have joint venture fulfillment centers.

顯然，如今我們擁有合資履行中心。

We also now have franchise fulfillment centers, where the upfront capital outlay are all paid by our partners, whereas we can service our customers even better, we can produce a better customer experience.

我們現在也有特許履行中心，前期資本支出全部由我們的合作夥伴支付，同時我們可以更好地服務我們的客戶，我們可以提供更好的客戶體驗。

With regards to your question as to margin improvement, obviously, there are a few things we are doing and we will continue to do.

關於您關於利潤率提高的問題，顯然，我們正在做一些事情，而且我們會繼續做。

First of all is the assortment management.

首先是品類管理。

We have an internal tool, we call it the

我們有一個內部工具，我們稱之為

[Bog1].

[沼澤1]。

So Bog1 really constantly engage customers' needs and ensure that our assortment is constantly optimized dynamically.

因此，Bog1 真正持續專注於客戶的需求，並確保我們的產品組合持續得到動態最佳化。

With that, the assortment management is taken care of.

這樣，分類管理就解決了。

Of course, the other thing we do is the category management.

當然，我們做的另一件事是品類管理。

Once again, this is very important in our margin growth.

再次強調，這對我們的利潤成長非常重要。

You'll notice that our margin is growing faster than the revenue.

您會注意到我們的利潤成長速度快於收入成長速度。

And obviously, there are money-losing categories and there are also money-making categories.

顯然，有虧損的類別，也有賺錢的類別。

It's a fine act in balancing the two.

平衡兩者是一種很好的做法。

We have to really minimize the money-losing categories and maximize the money-making categories.

我們必須真正減少虧損類別，增加賺錢類別。

The other thing, of course, that's really important is to manage our upstream suppliers.

當然，另一件非常重要的事情是管理我們的上游供應商。

Our first-party team worked really hard to find ways to get better deals from the pharmaceutical companies.

我們的第一方團隊非常努力地尋找與製藥公司達成更好交易的方法。

We're going to make more investments in this area to have better coverage, especially those medium to small farmers from whom we can get better deals.

我們將在這個領域進行更多投資，以實現更好的覆蓋，特別是那些我們可以從中得到更好待遇的中小型農戶。

I hope those answer your questions, Jessie.

我希望這些能回答你的問題，傑西。

Yes, very clear.

是的，非常清楚。

Thank you very much.

非常感謝。

[Alvin Mall], a private investor.

私人投資者[Alvin Mall]。

Hello.

你好。

Thank you for taking my question.

感謝您回答我的問題。

It's a wonderful quarter.

這是一個美妙的季度。

Actually, I have three questions.

實際上，我有三個問題。

The first is, with three consecutive quarters of operating profit, does the company anticipate achieving operating profit for the entire year?

第一，連續三個季度營業利潤，公司預計全年能實現營業利潤嗎？

The second, supply chain management has always been a key focus for your company.

第二，供應鏈管理一直是貴公司關注的重點。

What improvements and efficiency enhancements were made in Q3?

第三季做出了哪些改進和效率提升？

And the last question is could you provide more insights into how the company managed to achieve positive operating cash flow for three consecutive quarters?

最後一個問題，您能否進一步解釋一下公司如何連續三個季度實現正的經營現金流？

Thank you.

謝謝。

Alvin, well, I'll take your first question.

阿爾文，好吧，我來回答你的第一個問題。

It's a great question about if we're going to achieve profitability for the whole year.

我們是否能夠實現全年獲利是一個好問題。

Yeah.

是的。

So we are quite optimistic in achieving operational profitability for the whole year.

所以我們對全年實現營運獲利還是比較樂觀的。

Thank you for that.

謝謝你。

I'll leave your next question to Haihui.

您的下一個問題將留給海暉。

Yes.

是的。

Regarding the supply chain management, you are right, it has always been our key focus.

關於供應鏈管理，您說得對，這一直是我們關注的重點。

And we -- actually, we aim to set a industry benchmark in our supply chain management.

實際上，我們的目標是在供應鏈管理中樹立產業標竿。

And we continue to innovate in sourcing, in warehousing and like order fulfillment and in the entire supply chain.

我們不斷在採購、倉儲、訂單履行和整個供應鏈方面進行創新。

So in the past quarter, in Q3, our order fulfillment cost continued to decrease.

因此在過去的一個季度，也就是第三季度，我們的訂單履行成本持續下降。

It dropped from RMB101.6 million of last Q3 to RMB99.98 million of this Q3.

由上季的1.016億元下降至本季的9998萬元。

So there is a net saving of RMB1.62 million.

因此淨節省162萬元。

And our year-to-date fulfillment cost as a percentage of our revenue also decreased from 2.76% to 2.62%.

我們年初至今的履行成本佔收入的百分比也從 2.76% 下降到 2.62%。

So in logistics, we have achieved some of the following progress.

那麼在物流方面我們取得了以下一些進展。

The first is our Kunpeng logistics network.

第一是我們的鯤鵬物流網。

We scaled up the transshipment network and also extended last-mile delivery services.

我們擴大了轉運網絡，並擴展了最後一哩的運送服務。

So in this part -- in this year, our delivery cost has been reduced from 1.35% to 1.31%.

所以在這個部分——今年我們的交付成本從 1.35% 降至 1.31%。

And secondly, our labor and packaging costs in our warehouse also has been optimized by our -- by streamlining our operational process.

其次，透過簡化我們的營運流程，我們倉庫的勞動力和包裝成本也得到了優化。

In this part, our labor cost reduction in this year from 0.7% in terms of total revenue to 0.68%.

這部分，我們今年的勞動成本佔總收入的比重從0.7%降低到了0.68%。

And also our warehousing cost -- for example, we just relocated our South China warehouse.

還有我們的倉儲成本——例如，我們剛剛搬遷了華南倉庫。

Our warehousing cost in this year decreased from 0.71% to 0.63%.

我們今年的倉儲成本從0.71％下降到0.63％。

So it's a reduction by

因此減少了

[11.3%].

[11.3%]。

And number two, actually, we are expanding this Kunpeng network to provide professional logistics services, not only to our internal customer, but also to our external customers.

第二，實際上，我們正​​在擴展鯕鵬網絡，以提供專業的物流服務，不僅為我們的內部客戶，也為我們的外部客戶提供服務。

So in Q3, we established this network for our five major fulfillment centers, we call it our national fulfillment center, in East, Central, South, North, and Southwest China.

因此在第三季度，我們為我們的五大履行中心建立了這個網絡，我們稱之為我們的國家履行中心，分別位於華東、華中、華南、華北和西南。

And we plan to establish this national network.

我們計劃建立這個全國性的網絡。

We've added first mile and last mile services to our upstream and downstream customers to ensure end-to-end control over our entire supply chain.

我們為上游和下游客戶增加了第一英里和最後一英里的服務，以確保對整個供應鏈進行端到端的控制。

Lastly, in Q3, we completed our -- just now I mentioned, our Guangzhou new South China fulfillment center relocation.

最後，在第三季度，我們完成了──我剛才提到的──廣州新華南履行中心的搬遷。

We expect to have a remarkable cost reduction with this relocation.

我們預計此次搬遷將顯著降低成本。

And also, we are expanding our franchise fulfillment center model nationwide.

此外，我們正在全國範圍內擴展我們的特許經營履行中心模式。

In Q3, we opened a new facility in Wuhan and Guangzhou, reaching a total of six new model fulfillment centers in operation in Q3.

第三季度，我們在武漢和廣州開設了新工廠，第三季共有 6 個新型配送中心投入營運。

And we expect to have more and more new fulfillment centers in this new model in Q4 and also early next year.

我們預計在第四季以及明年年初將會有越來越多採用這種新模式的新履行中心。

Thank you.

謝謝。

Yes.

是的。

On the cash flow, as you can see, we have achieved GAAP and non-GAAP operating profit for the three quarters, which means that we are no longer burning cash for this business.

在現金流上，正如你所看到的，我們在三個季度都實現了GAAP和非GAAP營業利潤，這意味著我們不再為這項業務燒錢。

Instead, we are creating positive cash flows at the operating level for three consecutive quarters.

相反，我們連續三個季度在營運層面創造了正現金流。

We think we are doing the right thing in terms of working capital control.

我們認為我們在營運資金控制方面做了正確的事情。

We have been very focused on improving the turnover dates for inventory and accounts payable.

我們一直致力於改善庫存和應付帳款的周轉日期。

And we also introduced the third-party supply chain finance to many of our pharmacy customers, and we have also improved the turnover date for accounts receivable.

而且我們也為許多藥局客戶引進了第三方供應鏈金融，也提高了應收帳款的周轉時間。

There are still room for further improvements, and we are confident that we can do a better job in the coming quarters.

還有進一步改進的空間，我們有信心在未來幾季做得更好。

Yeah, I hope we -- Alvin, we answered your questions.

是的，我希望我們——阿爾文，我們回答了你的問題。

Robert Sassoon, Water Tower Research.

羅伯特‧薩松 (Robert Sassoon)，水塔研究公司。

Hi.

你好。

Thanks for taking my questions.

感謝您回答我的問題。

I have a few of them.

我有幾個。

So let me start with this one.

因此讓我從這個開始。

Based on the current market environment, how would you assess the company's performance in the third quarter?

基於目前的市場環境，您如何評估公司第三季的業績？

What are your expectations for the market environment in the coming quarters?

您對未來幾季的市場環境有何預期？

And how do you think those expectations would impact on the development of the company's B2B and B2C businesses?

您認為這些預期會對公司B2B和B2C業務的發展產生什麼影響？

Let me start with that.

讓我從那開始。

I have a few other questions after that.

此後我還有其他幾個問題。

Thanks Robert.

謝謝羅伯特。

I'll take this question.

我來回答這個問題。

First of all, we're pretty proud of the solid performance given the macro situation in China as it's pretty widely known.

首先，考慮到眾所周知的中國宏觀形勢，我們對公司的穩健表現感到非常自豪。

Both of our upstream and downstream customers are under tremendous pressure.

我們的上游和下游客戶都承受著巨大的壓力。

The anticorruption in the hospitals and also the campaign against medicare fraud in the pharmacies area will create short-term pains, but we're quite optimistic that the industry will be more transparent long term wise.

醫院的反腐敗以及藥局領域的反醫療詐欺運動將帶來短期的痛苦，但我們非常樂觀地認為，從長遠來看，該行業將更加透明。

And we're quite optimistic about the future business.

我們對未來的業務非常樂觀。

I will give you a few reasons.

我會給你幾個理由。

First of all, with China's demographics, especially the aging population, the medicare needs will definitely go up.

首先，隨著中國人口結構的變化，特別是人口老化，醫療保障需求肯定會上升。

And if we look at the big picture, healthcare expenditure in China is about 7%-ish and whereas in the United States it's about 20%.

如果我們從總體來看，中國的醫療保健支出約為 7% 左右，而美國約為 20%。

There is a huge headroom for the market to grow.

市場還有巨大的成長空間。

And the other point I want to make is that the short-term economic challenge will force both the upstream and the downstream customers to be more efficient and our digital capabilities will really enable us to create more value for both our upstream and downstream customers.

我想說的另一點是，短期的經濟挑戰將迫使上游和下游客戶提高效率，我們的數位化能力將真正使我們能夠為上游和下游客戶創造更多價值。

I'll stop at that.

我就講到這裡。

Thank you very much for that answer those answers.

非常感謝您的回答。

I have a couple of other questions more on the technical side.

我還有幾個關於技術方面的問題。

What -- could you actually highlight the progress and achievements that your company has made in the digital capabilities and the IT technology that you've been implementing in the third quarter?

您能否專注於貴公司在第三季在數位化能力和 IT 技術方面所取得的進展和成就？

And just want to follow up.

只是想跟進一下。

The second question that I have to ask on that point is, can you outline the company's expansion plans in terms of product offerings and partnerships within the supply chain ecosystem?

關於這一點，我要問的第二個問題是，您能否概述一下公司在產品供應和供應鏈生態系統內的合作夥伴關係方面的擴張計劃？

Okay.

好的。

Tobert, thank you.

托伯特，謝謝你。

I will take these two questions.

我將回答這兩個問題。

First one regarding our digital capability and also IT technology.

第一個關於我們的數位能力和IT技術。

Actually, it's not only in the last quarter.

事實上，這不僅發生在最後一個季度。

Actually, from day one, we have continued to invest in our system development, our models, and also data applications and also -- all this effort to build our core competitiveness in our digitalization are also achieving quite a number of results, especially in the past quarters.

實際上，從第一天起，我們就一直在投資於我們的系統開發、模型以及數據應用，所有這些努力都是為了打造我們在數位化方面的核心競爭力，也取得了不少成果，特別是在過去幾個季度。

And first, through our JBP Platform and the very new inventory sharing technology, we link our upstream suppliers' inventory to form a unified and integrated stock.

首先，透過我們的JBP平台和最新的庫存共享技術，我們將上游供應商的庫存連接起來，形成統一的、整合的庫存。

As a result, we have added in 32,000 new SKUs and as well as their related stock volume to further improve our supply capabilities.

因此，我們增加了32000個新的SKU及其相關庫存量，以進一步提高我們的供應能力。

And the second achievement is in the big data side.

第二個成果是在大數據方面。

For Chinese herbal medicine, we have trained and applied risk models for specification recognition.

對於中草藥，我們已經訓練並應用了規格識別的風險模型。

For those herbal medicines, it's pretty complicated.

對於那些草藥來說，這相當複雜。

So based on this specification, we developed an AI model that has improved its accuracy from 77% to 98.2% through multiple integrations.

因此基於這個規範，我們開發了一個AI模型，透過多次集成，其準確率從77％提高到了98.2％。

Additionally, the accuracy in content matching for those herbal medicines has increased from 43% to 96%.

此外，這些草藥的含量匹配準確率也從43%提高到了96%。

And to our upstream and downstream customers, the Chinese herbal medicine is a big part of their business, and also a headache for everyone.

而對我們的上下游客戶來說，中草藥是他們的業務很大的一部分，也是大家很頭痛的事情。

So with this new technology, we believe we are really helping the entire supply chain to improve our accuracy and efficiency.

因此，有了這項新技術，我們相信我們確實能夠幫助整個供應鏈提高準確性和效率。

And regarding the expansion plan, in terms of our product offerings, on the supply chain side -- actually, for product offerings and our supply chain ecosystem, we started from -- as Junling just mentioned, introduced, we started from a first-party model, which offers a good customer experience.

至於擴張計劃，就我們的產品供應、供應鏈方面而言——實際上，就產品供應和我們的供應鏈生態系統而言，我們從——正如俊玲剛才提到的、介紹的，我們從第一方開始。

But actually years later, we realized that it will be -- it would be very efficient to expand our selection offering with a single first-party model, alone, as we can imagine.

但實際上，幾年後，我們意識到——我們可以想像，僅使用單一的第一方模型來擴展我們的選擇範圍將是非常有效的。

Because -- you have to do everything.

因為——你必須做所有事情。

You have to -- no matter if it's upstream or downstream, you have to do it alone.

你必須——無論是上游還是下游，你都必須獨自完成。

So we innovatively rebuilt our supply chain.

因此我們創新地重建了我們的供應鏈。

Besides our first-party model, currently, we mostly deal with our -- cooperate with our -- these upstream pharmaceutical companies.

除了我們的第一方模式之外，目前我們主要與這些上游製藥公司打交道、合作。

We also set up a JBP model for partnership with distribution companies.

我們也建立了與分銷公司合作的JBP模式。

And now through the new JBP platform and the whole new inventory sharing technology, we have organically linked upstream merchants' inventory to form our own integrated stock.

現在透過新的JBP平台和全新的庫存共享技術，我們把上游商家的庫存有機的連結在一起，形成了我們自己的一體化庫存。

So this is one very important part of our expansion plan in terms of our product offerings.

因此，就產品供應而言，這是我們擴張計劃中非常重要的部分。

And also enriched our product selection of additional, as I just mentioned, 23,000 new SKUs in a very short period of time.

而且還豐富了我們的產品選擇，正如我剛才提到的，在很短的時間內就增加了 23,000 個新的 SKU。

It is just in the past one month.

距今剛過去一個月。

So we will apply this technology across the country.

所以我們會在全國推廣這項技術。

And I believe our product offerings will be improved to a new level in the coming quarters with opening of more franchise or joint venture fulfillment center with this JBP Platform and with this new inventory sharing technology.

我相信，隨著更多特許經營或合資履行中心利用 JBP 平台和新庫存共享技術開業，未來幾季我們的產品供應將提升到一個新的水平。

Robert, I hope I answered your questions.

羅伯特，我希望我回答了你的問題。

Yeah, that's great.

是的，太棒了。

I'll jump back into the line.

我會重新回到隊伍中。

Thank you.

謝謝。

That concludes the question-and-answer session.

問答環節到此結束。

In closing, on behalf of the entire 111 management team, we would like to thank you for your interest and participation in today's call.

最後，我謹代表整個 111 管理團隊感謝您對今天電話會議的關注與參與。

If you require any further information or have any interest in visiting 111 in Shanghai, China, please let the company know.

如果您需要更多資訊或有興趣參觀中國上海的111，請告知公司。

Thank you for joining us today.

感謝您今天加入我們。

This concludes the call.

通話到此結束。