Q3 2020 111 Inc Earnings Call
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Ladies and gentlemen, today's conference call is due to the beginning shortly on so.
On your line some of the main on music hold the thank you for the patients once again todays conference call is due to begin shortly until such time. The lines are the main on music hold thank you for the patients.
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[noise]. Please go ahead of this money.
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Okay.
Thank you operator, Hello, everyone and thank you for joining us today for 111 third quarter Twentytwenty conference call on.
Oh, the core of today, one was one of the.
Got you got you co founder and executive Chairman net.
Church anyway field co founder Chairman and CEO, Oh mixture of look channel. He asked flow of our major subsidiary Mister car the war on coal.
Oh, I see Oh Oh.
It's true that rate you called the Oh mismatch of Copel is that true relations director on.
The mixture Alex ill, then ask direct true.
As a reminder, today's conference call, it's being flow cash to line. Yeah webcast. The addition, a replay will be available on our website. Following the call. The Companys earnings press release, what fits tribute age 30 of today and together with our.
<unk> earnings presentation on.
Oh, they would go on the companies I on our website at <unk>, our dog 111 Dot com. So she is.
Before we get started let me remind you that this call may contain forward looking statements made on duty Safe Harbor provisions of the private Securities Litigation Reform Act of 1995, such day names at face the college matching the age.
Coody expectations and the current market and operating conditions on the relate to events that involve known and unknown risks uncertainties and other factors all of which could cause actual results to differ materially.
For more information about these risks please refer to the Companys filings with the ASCII see.
Well one of one does not undertake any obligation to update any forward looking statement I say results of the information future events or otherwise, except as required under the kids full.
Please note that all numbers are Inc, r. and D. and all comparisons refer it to the year over year comparison on that.
Our the wise Sage. Please also refer to our work I need the press release, we'll teach out of inflammation, Oh, we're kind of comp comparative financial performance on a year over year basis.
With that I will turn the call over to our C O mixture of drilling the deal.
Oh man.
That's true for joining all of the country touching the coal <unk> coal.
Oh, okay.
And then the cash to make headlines globally on like.
Ill start on this topic to provide some context on this call.
As much of the well see the resurgence of across a whole lot of those patients on the continuing economic downtime at the result, China of staff one of the bright spot on.
The pandemic such type of successfully on the control of the economy starts on some pickup.
Based on the actually celebrated its on right.
The economic on coverage on China has also created in politics embark on for operations.
However, the company on the country would continue on to stay on the Johnson for any new wave of the manufacturers I want to finance the stop on line until their diligent dedication to making the needs of all customers on the consumers.
At all help kind of what comes out of sort of touched on all the way brands of termination on the small fight against the kind of that mix.
On the bombing.
On to the numbers the couple of corporate news on line to update you on.
Hopefully.
Total okay.
Separately the fault of Obama on line has been appointed CFO of <unk> information on technology in Shanghai the.
The one on one of the subsidiary of preparing the totaling just on on Shanghai stock exchange of stop bolt.
No complaints.
Second of strong financial Foundation for one on one on the belief that the hedge position.
Position of all the time of cell phones on the strong gross the trajectory on the successful IPO.
I mean time in addition to my role as CEO I will start paying on as I can see I fall a long cycle drying the transmission on tailgate and use the I phone is appointed.
Secondly on September 10th default on the on one the most of the policy the.
On China on health passed on but and the public conference, which attracted the around the six kind of gets globally, including the exactly of just following up on the honeycomb on the health care comparison medical experts of government Nato's on investment the most situations.
That's all price paying participants of the opportunity to discuss the various challenges makes on the health care industry in China as well as the innovation of Splunk the volatile so tack on its challenges.
[noise] on Lumwana wasn't able to take this upturn of came to showcase how omni channel platform that is transforming the health care into the train five minutes on White Tonight on patients with medicine and on the health care services.
During the call French, but also announced the several strategic partnership agreements.
During the day pharmaceutical companies the health care, nobody thinks of China Shush, if on the political and [noise].
Hello of pharmaceuticals, as well on its way in front us the company Shanghai's joining drug.
Based upon the same store leverage of each company's expertise to the Boston innovation on strong partnerships.
These partnerships will leverage each company's expertise to the most inhibition on the throw my mom wants an omni channel platform consumer it won't be able to campaign like the access high quality of health care products at a time on in a mad dog phase into their interest Skechers I will provide more details shortly.
Moving on to our Q3 earnings results the agenda today, well couple of an overview of of the company's business on the operational performance, which kind of finding inspection one of the deck.
Well done on review of the company's financial performance in section total although.
<unk> and <unk> guidance to focus on the whole Q4 before opening the call for showing nice.
[noise], but again, we're pleased to report that we have to live the another called Oh, the stellar growth.
The kind of see from slide four this is they kind of stuck to the quality of revenue growth since our IPO.
Well, we have been consistently delivering the near or above strength, they to triple the triple digit growth.
Non-GAAP net loss as a percentage of the net revenue continues to narrow from approximately 10% in Q3, something non paying full percentage of this quarter showing.
Showing momentum towards the profitability.
Net revenue increased to 100 items.
The 10% sort of reach <unk> 0.3, 6 billion, while the gross profit gross 90 per cent until non signaling.
Well I believe the robust performance of getting the strong validation of of the successful execution of our multifaceted growth strategy to accomplish all the mission.
We have made solid progress and enhancing our digital capabilities all of cloud based solutions in the areas of patient management bumped the patient interaction education until about those patients out of the pharmacists and the other related services received excellent response from our customers.
Our smarts of plans on how smart supply chain last month, the isn't making operation Baltimore and fishing.
On the channel on top of commercial lots of some platform in the U.S laying solid foundation for our future growth on one of Chinas fastest growing industries.
Over the last true call since we made significant progress in strengthening the infrastructure of politics total health care of platform that brings together the key stakeholders in the healthcare ecosystem Radiopharmacies online platform partners softest interest companies on the pharmaceutical companies.
So the benefit of all.
From the rental pharmacy customers part of our cost 300000 strong network on the logistics in China, our smoked sausage on system machine learning on the cloud based solutions translate into the effect to the sourcing that's the inventory management optimal product the softened on the bottom of reach.
All cash gain great on cost efficiency higher earnings potential and on the has the ability interest the poly and consumers.
But the off because of smart technology puts the power of the latest medical innovations in the hands, so cheap better health outcomes for their patients.
The patients on a holistic disease management platform gives them access to the desktop tools across the country follow up consultations disease education materials.
Medication guidance on the benefits of the pending medication that home for our E prescription service.
The other important part of the infrastructure of he's the blood flow to follow the same that book of what have been working hard to some of them to the over the last of the three yes.
The second on some of the business is showing particularly strong growth.
The retail pharmacy sector continues to be highly fragmented on dominated by handling of on store fronts.
Let's see the bossed opportunity to enable the base business owners with better supply chain on technology solutions.
Well have aggressively grown the snap back over the last three years, which set of hostile the 300000 retail pharmacies as of on important date, representing a 43% increase from the ports on the 19 of the over half of all the way people pharmacies in China.
Having achieved our goal of moving the largest the virtue of promising that work in China will not the where one will not be providing the number of retail pharmacy and on future earnings reports.
Well no the validation of our strategy is to increase the the strategic partnerships based on the body weight demonstrator for free.
The pharmaceutical companies one on ones of the small supply chain management on the call and they got the digital tools together with the marketing and the patient support services. We provide helped on the gain access 12, why the customer base and at a lower cost.
Free to not only the weight on the fees for our services, but also gain of something much more valuable our pharmaceutical company customers are choosing us that's bad commercial lot of issuing pop so gain mold reach the better efficiency.
From the network of retail pharmacy of the other health care business customers. This means that the game the broader portfolio of both the innovative and the generic pharmaceutical products that better pricing, which seem to translate into a higher demand for that part of the most vacate and consumers and enhance the ARPU.
The improved margin.
Number one it goes without saying that when our customers the well, we do well as performance for the rate to a promising the same out of that book improves we add one on ones. The the corresponding increase in product sales revenue was the fees and the customer loyalty.
Oh, Yeah upper body the preview of the good news around the strategic partnerships in this quarter, we made excellent progress in expanding the number of strategic partners to over 300, <unk> up 100% over the same period last year.
Beyond the pharmaceutical companies will have developed the partnerships with insurance companies, enabling us to further enhance the digital health care of adding chain in the quarter. We added another insofar as part of the Shanghai you named Rob.
This partnership will give us the power to all sorts of consumer better access to the house cat one of the pharmaceutical partners at the lower prices.
In addition, consumers while also gaining tools out of supporting services that plus the lives to their needs and the.
That emphasize preventative rather than pure and simple cash.
All of these partnerships to come together to allow us to leverage our omni channel digital platform to better integrate all key stake holders of the healthcare ecosystem drop manufacturers retailers insurance company and the end consumers the.
And the result is an ecosystem of last day code is dependent on on the benefit from each of them tracing about virtuous circle of high balance services sticky.
Some of us and the greater profitability coal, including upside one on line.
On the winner of all of this on the energy consumers benefit from it has the cash at full of pasta and ultimately better health.
Now that expense, let's spend a few minutes on the business the performance.
This is borne out by on late ex the results.
For all of the it'll be settlement the greatest battery of strength was the increase of almost the 300% in the number of orders as well as the.
The revenues from our base of existing on customers most of us incremental sales from the new customers, who recently joined the network in the quarter.
Revenue this quarter grew by 134% total 2.2 billing.
On the gross profit grew by 344% to 58 million.
Revenue from existing customers what.
It's a part of 9% quarter over quarter and of newly added customers contributed 12.5% of of the growth quarter over quarter.
For all of you don't see segment of this quarter saw a slight decline revenue and the gross profit down by 5.2% on the 6.3% year over year to 100 of 61 meeting the for the implementing respectively.
The the prepare is driven primarily by our decision to focus on efforts initiatives that will deliver the most of value into the company and our shareholders.
They've got the is already yielding only encouraging results, we're confident about almost on the back on the gross profit again.
All we have in the <unk> because were in the unique position took the liver superior health care for our end consumers of at competitive prices running.
One example of these outpatient management platform, which provides the consumers access to the best doctors around the country for outpatient care, regardless of where they live.
Combined with our retail pharmacy network patients kind of half of the prescriptions filled the amount of the limit some of them some meaningfully on an efficiently along the way in the tens of thousands of on how the health and wellness products available on one of months platform.
Against the backdrop of a favorable government policies to wall Street your conversation with the leave with an enviable position to take advantage of the men's health care needs of the country.
As we strengthen all infrastructure to help pharmaceutical companies marketing their products.
Wait enhancing our smart supply chain and efficiency, improving our docks of patient digital platform and providing better care and the tools for patients to achieve more favorable health outcomes.
Okay. So of all to the last quarter of of the year, we will stay focused on the narrowing that loss and the furthering while weve done while increasing sales from our existing base of customers, while adding new ones enhancing the stickiness on expanding and deepening the strategic partnerships.
With the recovery of of the Chinese economy on believes that type of the strategy on execution that have enabled us to build the leading thinking total healthcare platform. In this country will also allow us to take advantage of of the minutes opportunities presented by the Chinese market.
We'll have proven the power of out of ecosystem kind of.
Over what the pilots of late in the next quarter and the beyond Inc. Chris its volume and the drive growth continuing the ascend so delivering sustainable on the lumps on profitability plus shareholders.
With that I will hand, the call to vote for Walkthrough of financial results that smokes.
[noise]. Thanks, Richard Me I'm moving to the financial section on Slide 12.
You can see the details of the third quarter pointed 20 recalls flung slide 13 to 15 of all the parent patient.
I would like to highlight a few key business and the financial matrix and our focus on the year over year comparisons.
The numbers I RMB unless otherwise stated.
Our total net revenue per reported group of hundreds so 2% to two point.
The three 6 billion, which exceeded the top end of our guidance range.
Oh, the weaker be segment revenue grew 134% of Cooper.
Or to get it.
Revenue contribution you kind of.
Which triggers the could the code at the separate spec of it was mountain cooperative it because the segment this quarter.
The strong growth in the B to B second was attributed to the strong gross profit you can customers as well as the newly added kind of conversing our network.
Oh, sorry to see second the revenue was down 5.2% to 161 billion main.
Mainly of future restructure of our day to see been the ethylene refuse OE batsmen, Inc. Third party platform.
Oh, the because the gross margin was 2.6% of probably wouldn't sort of 4%.
Well because the gross margin remained stable at around 20%.
The improvement in gross margin our true beef is restricted our ability to continue the theme the margins while maintaining triple digit.
A couple of on gross.
Overall, our gross profit a mouse true by 90% to 90 million.
And the coming by the gross margin was 3.8%.
Compared to 4.3% a year ago.
Which mainly due to the dilution is that from direct expansion of our two p. business was the lower margin.
Total operating expenses for the quarter kind of eight.
8.2% to 212 million.
As the percentage of net revenue total operating expenses for the quarter was down to 9% from 14.9% as we continue to improve our operating leverage and optimize the operation the efficiency.
Fulfillment expenses as a percentage of net revenue for the quarter was 2.5% the.
From 2.8 per center in the same quarter last year.
Sales and the marketing expenses as the percentage of net revenue for the quarter was 4.4% down from 7.9% in the same quarter last year.
DNA expenses.
Decreased 10.8% of compared to the same quarter last year and as the percentage of net revenue for the quarter was 1.2% and balance from 2.9% in the same quarter last year.
Pick the knowledge expenses abound increased 49 point.
Oh presented this quarter as compared to the same quarter last year, which accounted for nearly 49% of net revenue down from 1.3 percentage in the same quarter last year.
That's the result.
GAAP net loss attributable to ordinary shareholders for the quarter narrows to afford the 94 billion EPS.
Compared to 110 million in the same quarter last year.
Which accounted for 4% on net rather do the down from 9.9%.
As to the guidance for the fourth quarter for reporting on slide 17.
The company expects total.
Total net revenue to be between 2.44 billion and 2.56 billion.
Representing a year over year growth of approximately 81% to 19%.
The above all the growth is based on the current market conditions and the respect the company of the current and the preliminary estimate of the market and operating conditions. That's.
That's why the customer demand, which are subject to change.
Please refer to slide 19 to 21 of the appendix section for selected financial statements.
I'd like to note all the cash position as of September the coding. The 2020, we had cash cash equivalents restricted cash in the short term investments totaled 1.2 billion.
Compared to.
697 million as of December 31st of 20 banking.
And the we achieved positive cash flow from operating activities.
[noise], which amounted to 25 million for the quarter.
And also we achieved positive cash gross profit for the activity of.
For the period year to date.
This concludes our prepared remarks, thank you.
Operator, we're now ready to begin the purity session.
Thank you Sir.
Ladies and gentlemen, if you wish the US the question. Please press star one on the telephone keypad and we'd see a name to the you know if.
If you wish the counter do the question. Please press the pound for the hash key.
We have the first question some of the line of.
Every year.
The last question.
Hi, Thank you for taking my question sort of used on JP Morgan of congratulations on the John said the quarterly now I have two questions free cash.
My first question is about the.
The business jet the G I say.
Oh, we still many encouraging partnership that while I won't have to snap the snow over the past the one month.
Could you keep on the up business strategy.
So I think you read I read the quick.
Any major change.
And my second question is especially because the without the <unk> Oh, we know that I've talked to you was the key management.
So what lies the pine sheet operation.
As the market is the reason for the printing on lots of attention to AMAK was the big move the marching into on last time I see on that's true I could you help us understand the major differences between China and do as of the on my summary of the market.
And my last question on the.
The last week and the announcement on the on my checks out the regulation changes of.
Could you share more come the about on these regulatory updates in the patients who won the lungs, the business operation and the complication of men.
Ah that's all my questions. Thank you.
Thank you Sherry I'll take on the first question on the left the opportunity to continue.
On about.
The the future strategy of.
The first of all the so this year I believe on what we'll deliver well over a billion dollars on revenue and the will be very close to the profitability.
However, the you know we're still on to run this business as the start up.
Haven't laid out of the mission, which is to digitally connect.
The medicine with patients and the healthcare services.
To accomplish that the mission I'd like to use the three key words.
The first people at all on to use is digitization.
I think everybody would agree that this industry is relatively backward in China.
When it comes to the biggest ization of.
We had one on one of investing very heavily on the per patient interaction platform. So what kind of moves doctors and patients to the digital world.
Were also of because the lead tracking of the whole value chain from the point when the drug leaves the factory all the way to the patients.
It's also amazing to realize how of much enthusiasm on the digital marketing, including patient education publication, pharmacist education et cetera, and I could not have imagined that you know the life cost from two of our internal stuff on our app can generate over 10 million in sales within.
Two hours.
On the next keywords I'm on to use is infrastructure.
Essentially we are laying the infrastructure for the next generation of healthcare delivery in China.
We were able to reach consumers directly through our E. All while.
Through our out of 300000, plus the pharmacy network and the through adopters.
One can understand the list as the fetal C. The b to B to C.
On the the B to B to C.
You see how the supply chain our cloud based the solution is our big data are all part of the infrastructure.
And the third key word I'd like to use is the commercialization.
Our view of of the future based on.
The pharmaceutical and biotech companies are going to face pretty tough competition.
With the you know of the BBP implementation of majority of the the pharmaceutical companies are going to focus on innovative drugs.
As we all know the recent late in the Hong Kong and the Shanghai stock exchange on exchanges there are many.
New of biotech companies that got listed.
And the I think of the whole loan or all the ball not all maybe most of those newly listed company of the kinds of faced challenges scheme commercialization less their drugs get approved.
So this is the area, where we have been investing pretty heavily our omni channel of commercial lot of there's some platform will be a great we'll be in the great position true to help them. So.
So let me recap the Threepi was they did the ization infrastructure and the commercialization. So the they said this is really of the strategy of where we're implementing added the those are the areas where the investing so I'll pass on of.
The next questions the true to talk to the.
Yeah nice share if washing of question.
So maybe a a.
On through the second one that the you mentioned on both a amazons the reason to of lung tissue of their online drug or drug store sales.
I think a that the Eminem.
Started the given the in early 2003 on puts on board wouldn't I was serving or the exact for Amazon.
The of part of the company record the drugstore dot com, but of course.
All of these many years the that the.
The category of has not been a developing.
The vote in a as fast as the other categories I think the China is more aggressive in terms of of acceptance on line Dr. consultation on line.
Drug purchase.
The good due to several reasons why is that the the you know the pot penetration of the mobile devices.
On more on the line.
Ecommerce of customers I think of where we are certainly in the great market on the also the policy by the Chinese government is more also what we'll open the.
So as you know that's the reason to.
Policy, allowing on line prescription drug sales and of allowing the on line a couple.
On the patient.
Dr comes of Asia being covered by the medical insurance on the more encouragement of.
You know Oh line at Health care, I think of this or I really facilitated the growth of China. The.
On line or how.
The industry.
On the the second the Christian you, especially about the on the last weeks or the new the.
The third question right. It's the is maybe of the the patient on feedback are you. In fact, we participated in the whole discussion with the.
The.
Sort of government on the we.
Given the our feedback I feel this is the really a very poverty.
Part of you to the whole industry and the also very positive to us.
The hold true of the policies that you will be more open to Allied health care on.
Certainly well have more rigorous more scientific on Monday.
Monitoring.
The management and the control of the quality. So certainly these policies were allow or.
The companies that are up.
That are more compliance.
There are more transparent non I've, a higher efficiency two to surface.
I think of it it's a great.
You know I think we are serving the Greek industries.
You know to be on this issue.
So definitely we feel that all the new policies on the train all of your positive to us.
[laughter].
Yeah, that's very clear the helpful. Thank you.
We have the next question from your line of sight.
Being you can use on.
With your question.
[laughter] right away from the leases on.
No question.
Moving on.
I think that the BCP is developing the rapidly and once you see whats the reason behind and how will you keep the growth momentum and second is that balance next month inside the cash me see why there is a gross margin of a including the aim to be <unk> and <unk>.
[laughter] human GAAP.
They do people want to know how you manage the two I think that.
And instead of testing it now maybe teach here most of my there between the numbers on it.
[noise] okay.
This is javier let's take the three question regarding the.
The even be growth and the he does the money, but the the or the volume increase.
The.
The first of all four of the Eaton be growth.
On one hand, our beat of the cost on the site increasing.
Which has exceeded the.
The Street and your K, representing about 60% of all the China total market.
And on the all the hand on the revenue up all the existing customer base also increasing the rapid city the growth the plan the coming from our strength and capability on digital marketing.
For example, the of the at total solution to promise.
Pharmaceutical company to commercialize that drops one of the one you didnt hold marketing tool.
We also enable on what people because some of the cloud based on these your goes the other day.
Such as the cloud pharmacy, so the good.
Now clinic.
A lot of inventory or EPS was the cloud.
About the I am.
The income really we also develop.
The poor one call Hawkeye and the out of home Kobal.
To use the big data Internet technology to be without and mechanics on.
For our sales force to acquire more customer ex the baby fixing the customers and improve the are you in gross revenue.
The especially on the let's get the cities, which contribute to a major part of our people the business.
These digital marketing technology on to help us to improve our sales force efficiency.
And on the the money on Monday the site.
I think that street read them.
How can we you know keep the good merging lean trend.
Meanwhile, we also hit the street, they did a growth rate.
The first of all as just the Allergan in the pension we are more and more direct booking growth pharmaceutical company.
Secondly, we launched our PR Ed that is a price impact against system.
To build on a smart pricing mechanism.
The improved profit wildly without any negative impact to our sales growth and expansion.
Uh huh.
The reason, we also bring more high of money and pay you.
Corridor.
The which helped by the difficult time, leaving from all of the sales of these S.K. you through our digital marketing platform and Meanwhile, bringing more money.
And I hope I answered the question.
Well I think the the the second question regarding the the peak of the order volume yes.
Yes.
The.
It's a it's the pepco on the big increase in our feet of the or the volume of.
I think firstly in the quarter.
We have the increased our inventory used collection.
Through our new supply Kenmore the.
And as the pay use the election at the increase of several times.
We believe the election is the most important items of custom Inc. The or.
And the secondly.
Through continuous innovation or all the supply chain of technology and supply channel network, we have managed to improve our operational efficiency at the lower our fulfillment costs to corporate finance Ben at the the books.
Okay, just the highlight.
We have returned though the saving on fulfillment costs through of customer by lower on the free shipping threshold.
The which improved our customer buying frequency and also improve our order volume on the improved ARPU net revenue.
Okay.
Is it clear or any other follow up question.
Yes, maybe thinking Oh, I'm, sorry, and I know on the Crescent.
Thank you.
We have the net.
Mine on so [laughter].
The yen.
Ask your question.
Okay. Thank you hi.
But the Oh, the congratulations free.
That's it John and the.
Well it is out of you could take hope on the exit.
I kind of World class.
The since the one is on the gets too.
I have pets on so could.
Could you see the I'm sure I read the ER visits in the programs and the team and ROI on that platform.
And the [laughter] sampling next could you add on and you know and because the the alignment is market is quite competitive.
Nowadays the with many isn't a giant jumping on to that so how do you think oh, the technology or liquidity behind who did the class eight hours from the next time.
This is the phrase the question and Ah. It's congrats on the second the one is on your county that it so.
So with what do you guys and the do you towards Oh, the the stand alone. It's the way to kind of you said that youre providing them.
On the too out of this.
Good question of.
Yup logistics system of.
Oh lead the from the keeps the that you have the he and I will just take the system that probably.
Or the profit and you have the capability to reach.
Oh, the two you have the capability for the 24 hour delivery equal the 300 of city the how the capability.
The true either on them and he can play here.
Not the ones that the on your finance so on upfront. The we noticed the we already I can ask the pocket.
And the I guess next the year, we like the reaching the total top line of 10 billion you need the though of how far do you think we on Rotten Oh, we can easily put to them.
Hi, This is the type of question.
Okay. Thank you I'll take the first question, but if I understood you correctly its about all of digital solutions right. So.
Really are at the heart of our digital platform is the bulk of the patient interaction platform and you.
In addition to that we also the digitally track on the.
The drug flow of from factory to patients you know in the past a lot of those transactions actually happening offline.
On the the other capability, we have built out over the last few years, it's really the digital marketing, which we have seen on the tremendous progress and of course of.
You know I'll smock sourcing or.
You know greatly greatly.
Greatly helping those pharmacies on when they place orders in the past the they use Ah you know the.
On a sheet of paper I know they'll get off the figure out walk you know sq is the need to replenish on them. They will spend the half a day to call on different suppliers with all the digital tool.
Which is called the digital of smart sourcing the kind of complete their procurement you know, we then let's say five minutes instead of pop of day.
On the of course, some of that off because of one thing, but on the best in the industry is weighted the patient care programs.
Just give you some examples right so.
With the patient have program. The we have a a D plus one on the POS said on T.
Keep in mind, the seven on T. minus 10, let me just quickly go through without a fresh a sense of what is the beep, let's say prognosis on it on the first day when the patient GAAP diagnosed and ER and the I'm assuming this is a a clinical patients.
You know, obviously or a drug is prescribed and the delivered on of course on Oh platform of we'll be able to use of different algorithm based on the front on the these pipes and the the one after the diagnosis were going to send out a you know.
Ah material related to the disease, you know the educational material and the the depending on what kind of stepped out of the <unk> impulse items of Ah Ah following on the compliance of.
The doctors on prescription and so on the T. means of you know.
The time of they shouldn't be free feeling so P. Minus you know our system its going on you know automatically calculates a we've got a little bit of spend out a note for the patient to remind he on her haim on her and the not by the time to refill and you know by the T. minus zero on the EPS.
For the day, if they still have not happening on.
Obviously, all the pharmacist kind of follow up with the coal and the try to find out of what's going on on the you know the other thing Oh, we are very proud of the it's really the on digital marketing way of conducting for pharmaceutical companies on especially when it comes to a patient education the ER Doc.
Because the education, the pharmacist education and the essentially we have the old house a.
You know.
I don't know how to describe the same English the may teach you done it's it's the aid matrix of.
On the front a high traffic media you know first on site in China. The biggest traffic came from the Oems from hotel from the <unk>, we chat and so on so we all on the L.. We you know we at the company set up on accounts and the all of those big traffic sites and the when they run a.
You know the patient education program, you know, we kind of actually reach much much broader audience on compared to a single pharmaceutical company kind of doing I will give you example, we conducted a a diabetic education sponsored by Eli.
I'd and the you.
During the life of session, we had more than 5 million users participate and Ah Ah you know I'm done we actually recorded not a section in the overall.
Overall over 10 million people actually viewed that session that I am a clear advantage over the traditional ways Ah you know be the digital solution and we have I mean, obviously, we're going to really exploit that capability we have.
I don't know who should fall off of the next Friday, the personal cloud services.
So we basically provide.
Well the service on.
So the this is the current ecosystem moving the Oscars or promised the.
On to.
The company is the insurance companies said, well, let me just the use of policies and the.
Well, we'll provide that a lot of Oh we're.
For example of move there.
They're on the online so really increase or the coverage welfare.
The the really good cars.
Also provide the on hitting those kinds of the warm up on that the into a nickel.
Even though the got inhibitions, though the cost involved.
Or the kind of got into our total I reach the or Oh after all the buses who.
Of the nation I forget the piece of the solution ordered by the drop from the school would provide the online.
Ah inventory.
So that's a lot of inventory.
The large hundreds election cycle on the flow.
What's the right.
Well.
How the policy.
Who mixture of customers.
Who is this way the day or more sticky.
The work here.
Well, so I mean, the sort of the pressure on all of the the coverage.
You know we mentioned the southern copper.
Cities, the they kind of all of the back though we cover more of that 80% of all customers.
The high bar.
So on the you mentioned that the young guns are the direct or.
Other.
The result.
We feel the three years, though the thing we kind of know [laughter], while covering the period.
So I'll present, the traction right now it's not going on.
During the summer.
We feel the.
The trial of so that's the good provida the.
On the fashion, so that certainly move the Oh, probably the degree direction price.
Of it.
The third will be on the left.
The metric we focus on.
[noise] Yeah. This is the Luke let me answer the question about the financial performance as well cash position and the.
The break even point.
We are very excited about our achievements Inc.
The quarter.
Especially on the cash position.
As of September 32020, we have total cash on hand amounting to RMB 1.2 billion and the we have achieved positive cash flow from operating activities for the quarter as was for a period of year to date.
We believe that we will continue that trend.
Continued to generate the positive cash flow from operating activities in the future.
Future quarters.
In terms of break even point.
We were not of can give.
Give any guidance at this stage.
As we are still in the investment and expansion route.
Oh, we do not want to lose gross opportunity because of our end the investment.
Having said that the.
True. Please that the was the strong top line growth.
Oh, the improved the margin profile as well as operating efficiency.
We will be able to further lowered the net loss as the percentage on net revenue and which will lead to profitability in the foreseeable quarters. The we hope that the we will surprising the.
On cell and that's why the thing that as you know you've seen that in the next year or so.
Rachel Oak, we answer your questions.
I think you think you are you going the other and.
On the Luc just said hey, what are sort.
On the web on the never interest and so on it.
Can you hear me, though how youre capability of competitive with the on either on my imagination of players.
I thought I'd answer. The question you know we are we feel that the very recent recover more the 80% of the more customers within the fund flow.
The revisions the who food on the call for any of the lowers the you know one of the lower the industry.
We are still all commodity the or are.
The question, though.
Oh, you spoke of the customer experience.
Okay. Okay. Thank you. Thank you for the kind of application I have no other questions. Thank you.
We have the next question from the line of.
She being the same please ask your question.
Okay. Thank you.
And congratulations on the growth.
Well actually on how would I know I, just I wonder the kind of true and it's a you know I've seen that many while on the one pharmaceutical companies have entered into the collaborations any of the strategic partnerships with the one one line this quarter.
So I assume that that's collaboration goes to the drop.
Your Mike activity on an ex tends to more after that.
Okay, including Big day time, that's the marketing and even brand building.
So my question NAV.
On the button to do on.
One of the line completion, and what do you call for with other pharmaceutical companies choose the make cooperation with the company.
Yeah.
Okay.
The question the the refresh of the third the here we have the enjoyed a more and more of a solid of.
Did you partnerships with the.
Global first here, Oh I'm to the company.
We feel that the the main reasons on the bottom the burden is that Oh. We are on you know you as the company on the we have the high compliance on of the concurrently on the.
We have also of there I appreciate it.
The question of broad coverage on the deep penetration.
On one of the capability of doing the omni channel a drop of virtualization.
No we've enjoyed the our scale on the our property of great content here I know ridiculous.
And also you know the.
Your first of all have benefited our.
It should be easier for the innovation and of the so earlier in the city I think of these out of the regions that are lots of.
On food companies are you know where they are for Uh huh.
Okay. That's really helpful. On congratulations again on the great progress for the company.
Thank you.
We have the next question from the line of.
Hi, rich.
Thanks.
Please ask your question.
Hi, congratulations on the good results because the scores from by the investment.
I asked the questions for the team.
The first question is.
The key difference between one on one and two the health plan or the health of especially to the health on the people who site.
That's the first question second question is.
The non-GAAP net loss has continued to narrow.
Is this kind of thing the will shed some more light on the gross margin going forward.
And also the last question is perhaps can share a little bit more progress on the listing on the store board. Thank you.
[laughter].
Facts on I'll take the first question on.
On the difference between on mum on one on Gee, how all of them on the calendar.
I think kind of the whole positioning on two fronts on oney health and beauty health.
First of all the people tend to the naming of the company's kind of interesting because on Gee. The is calling on not business beauty health and the on the east problem on the Ami how nominally Allah naming the company nationally Yamal price, we must focus on drugs.
Whereas the even more focused on.
On the consumer is healthy so we are very envious of the the traffic you know the 10 got hurt on by the Wow, the least enough houses on it you know on run it on the currently from from them.
Because of Oh a store.
Sign of can never competed against those big signs on the traffic. So we focus much more on drugs come on line and the people kind of all of this model of our digital products and the beautiful solutions are much more geared towards the funeral volume.
On pharmaceutical companies and the next point on of the maybe not on no. One in the industry has the b to C. One of you can reach the season, you do need to see the structure like we have a you mentioned about duties a BBB, we haven't seen much but as we all understand.
The I'm more focused on on using the marketplace to deliver value to the pharmacies, but you know we actually run the I suppose spotty business you know on that.
You know much better when it comes to a customer experience and then obviously the infrastructure we have through the town. The sees a roughly on the this is on the advantage of kind of move on to explore not to the fullest I'll talk on the gross margin come true.
Yeah. We we are confident that the we will continue to narrow the Ross.
Two.
Profitability and we believe the that's sustainable.
On the peak.
So in the next coming quarters, we will continue to of.
Triple digit growth in this.
And the took note of scale because of the scale does matter. It was a we've got the 'em, we were beauty and the partnership with pharma companies.
Well, we would love to see were not only of making revenue from called the sales, but also making revenue for on the surface.
And the on the to the business you already see that we improve on margin profile from a one point per se, 1.4% of 2.6% and the we've seen recently actually did the gross margins for the beeping has continued to improve and we believe that could be up to 5%.
On to a percentage so with the improving the part of mix and the focus on the high margin products.
So we believe that the the rooms for us to continue to improve the gross margin profile cost the continue to and the improve our operating leverage and Alberta efficiency. So we will as I just shadows with investors that the Oh, we were very key.
Confident that.
We will continue to make investments on the opportunity the better with the ASCO with building up the margin pulled volume proven that the we will see that the ER did net loss that percentage of net revenue continued to narrow and and the we will see the middle of breakeven point coming.
On the.
Our listing plan of the 'cause subsidiary in China are we on making.
Total glass.
According to the schedule and the we will dispose that according to FCC rules. So I would encourage you to none of them on to the press release of bad the we will you know.
Issued on it because you need to do cost according to the theaters.
The hope we answer your questions.
Yes, thank you very much.
[noise] How's the mix.
The questions on the line of.
Sure and good day.
So I'll ask your question.
Oh, Yes, Oh can you explain why on the D to C side, there's a slight decrease those on a revenue and.
On the margin.
So is the margin accordingly.
With isn't like the volume there it's important to decrease the your profit margin will decline. Thank you.
Yeah, as I explained that the mine or a.
Remoxy ER, you know really TV. The conscious decision you know first to investing on their infrastructure to deliver the longer term the value of fraud business. You know, we're pretty confident of not so.
We're going to be on back on the gross kind of very soon and that's the great question about the margin or you know obviously the big shows that the a decline in margins, but if you could kind of the percentage.
Age of Sue on about 20% of.
On that if we deem the well within the range or if you compare to the other BDC platforms and the you know we are aware of family, Okay with that margin percentage, that's the moving forwards out of we shouldn't expect out of improvement.
Improvements in both on the top line and also the gross margin. Thanks.
Q.
Oh can you elaborate on the <unk>.
Adjusting for gross <unk> infrastructure is this due to a more competition, especially from the giant.
You know JD on the why you decided to the.
The less food gross and what you did not have before.
Yeah, and then I think you know.
Obviously, the it's pretty clear out there, we're not going to compete against the big tracking players on a windy to play in a different space right. So you know on right now the way investing in infrastructure infrastructures like kind of you know the patient off per interaction platform on I mean, it's going to help us acquiring customers in the much.
The like fishing blades and also a way of doing the on the blood true clinics, the doctors and the way of working with the pharmaceutical companies on on products of you know where the traditionally some non launch or in the office on manner or expense when the new drugs approved within the.
The pharmaceutical company want to introduce that to the hospitals, it's kind of take them one year on the mall on to getting into the hospitals on procurement list and Ah you know when we were working with the number of pharmaceutical companies to actually use our digital platform for the drugs to be the.
Delivered to patients on the if the Doctor can issue a prescription even on you know the GAAP is me I know with top line with pharmaceutical companies, even we've their sales reps on the medical records as well. So so those are the infrastructure is not the will be on using in the future and we believe the this is going to generate.
On a much more sustainable no business, both top line and on the bottom line moving forward.
Yeah, I I told me the very ignorant of but you know the I'm just thinking if I were a pharmaceutical company and I want to you know to patient education interact with patients wouldn't I true like the JV on the where I I know.
Oh, there's significant traffic and those companies are planning we're doing.
Doing the same thing you are doing right now.
The only thing the question quickly I.
I think the.
Because the the more than 70 versus on the phone sales of who can go out.
So clearly we are very of day to.
A more professional who are on prescription.
Sure.
Instead of Oh, the weirdness, Florida.
So I think the relative another reason that the from to the company really like what we thought you typically two of the walk with the new innovative Ah the model like the way recently launched Oh. The you know properties of it runs the specialized hospitals the abitibi or.
The the diseases. The so those are great examples the.
Hello.
So we're working on.
Thank you.
We have the next question is on the line of.
Shane.
He's asking the question.
Yes, good evening thanks.
Thanks for taking the craft the skin.
Great you reach the make up almost 60%, but the on well pharmacy to China, but on the water and the new like.
Sales.
Who.
Each of the pharmacies on burn I kind of 8000, the renminbi net cracks in flow you always.
Oh baby attend or you think you can go on how you in terms of the sales to the you know on average.
On the C.
[noise] okay.
Okay.
Fashion.
I think [noise].
Although you know we are covering dictate the fed.
I think it was the I have a the the market it is still very big.
We got the of the every year.
The non decide all the way the bomb at the event.
Uh huh.
The 100 times of I'll cover on bought it so.
What do you see the that a utility or the steel.
Up of Barry the Big Routable total.
Well the growth or is it a new wells. We also have the a bake.
Moving up then it will further improve our gross profit.
I mean, just the stock.
Uh huh.
Yeah.
And the Opco all of our other what means the average revenue per day you was the.
Of our customer the mentality of if the individual but the on its attractive total policy.
The has both increased.
Quarter over quarter significantly.
The man I think it's great news right not.
Got to as you kind of tell you know our kind of fishing the still fairly low when it comes to the wallet share and the you know we we can absolutely sustain a pretty high growth for a much longer time.
Thank you.
Okay. Thanks.
Once again, ladies and gentlemen, if you wish the asked the question. Please press star one on your telephone keypad and wait feeling on <unk>.
So once again, ladies and gentlemen, if you wish the asked the question. Please press star one of telephone keypad.
I think we're already sort of leases since this time I'd like the hand, the call back to the Monica.
He comes on.
Thank you operator, Inc.
Close day on behalf of the entire well on one man management team, we'd like to thank you for your interest and the participation in today's call. If you require any sort of information. Please email us and thank you for joining us today day, how close the call.
Thank you ma'am, ladies and gentlemen that does conclude the conference for today. Thank you for participating you may disconnect.
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