111, Inc.

Q4 2022 Earnings Conference Call


spk_0: hello everyone i'm thank you for joining one one one fell from fall today on the call today from the company or doctor gone you cofounder and executive chairman was someone real cofounder chairman and ceo mr loose term see a flow of one one ones major subsidiary and mr harvey long see alone as a reminder today's conference hall is being broadcast live via web chat the company's earnings press release was distributed the earlier today and together with the earnings facilities are available on the company's i our website before they found his august started let me remind you that this whole may contain forward looking statements made under the safe harbor provisions of the private securities litigation reform act on nineteen ninety five the statements are based upon managers her expectations and current market and operating conditions and early two runs through involved 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 company's bylines with the as si one one one does not undertake any obligation to update any forward looking statements as a result of new information future events or otherwise it's not as required under applicable law please note that all numbers are in our and be at all comparisons are for to year over year comparisons unless otherwise stated please also refer to the earnings facilities for detailed information of the comparative financial performance on a year over year basis with that our turn recall over to one one one ceo misery someone you please go ahead
spk_1: the money and
spk_2: thank you for johnny our or alter the fiscal yet it'll earnings call they for mason that will be discussing also provide in the slide that been posted earlier today on the company's website and that like to encourage you to download the presentation along with the earnings report at i are top one one one dot com dot the and in today's call i will talk about some of the the ladies regulatory development in the healthcare industry and what it means to the company also color strategies for building both momentum improving operational efficiency and struggles supply base then i'll spend some time to speak about the performance of cute for and full year of twenty twenty two before hanging in the call to mr bush cheney who will walk you through our financial results anybody to prove to be a very challenging for many businesses including lama every in china it's bank for that told a stylus an anxious to get on with life as a model one of the most important trends post pandemic will be that the do pilates and healthcare industry public nineteen pandemic has shown you how important health care services are in society but it has also highlighted the limitations of traditional health care service but with the introduction of digital technology healthcare services have become more accessible for both consumers and businesses with digital tools and platforms health care providers can increase access to care improve patient outcomes and better manage the challenges posted by public health emergencies digital technology has emerged as one of the capabilities in solving the uncertain disturbance factors of the public money on product the importance of digital technology healthcare is likely to increase in the future and thus it's usage will continue as a critical trend in the healthcare industry a made plenty plenty to the state council china issue a forty five year plan for national health which clearly propose so salaried the construction of national health if i'm a violation promote information into connection and the construction of internet hospitals intern that class chronic disease management and other projects this is expected to help improve access to healthcare for people in remote areas as well as string on healthcare services in june twenty twenty to the national health creation of china get you the rules of the supervision of internet diagnosis and treatment which further provided new guidelines for the development of intellect diagnosis and treatment hours in september twenty twenty two the state makes ration of market supervision and administration issued the measures for the supervision and administration of dropped network sales which provided clearer requirements for the high quality development of the pharmaceutical ecommerce industry in october some people that are trying to trying to the report of the twentieth national congress of the communist party of china clearly pointed out that high quality developed is the primary task of building a socialist modern country and all around way as one of the the faulty directions of people's well being health care industry is regarded as a strategic part of the about with the increasing adoption of digital technology the healthcare industry has been undergoing significant advancements about digital transformation as the nation it's quickly approaching an aging society while combat that healthcare expenditure on both the government and a person a wallet the go at a fast pace all those policies will become tremendous talent in our business while my one and to create a leading digital healthcare platform in china with a mission to connect patients with medicine and health care services physically the platform offers a wide range of healthcare services including consultations diagnosis delivery of medicine tools to enable both upstream pharmaceutical manufacturers and downstream promises consumers can access these services through the digital platform enabling them to receive medical advice and a consultation services from the safety of their homes businesses can leap frog the traditional way of conducting business on can access a range of services stated that much greater efficiency this digital platform has made healthcare services marks decimal convenient and affordable for individuals and businesses with great music stance based on the rapid development in austria as the company's development strategy has begun to shift from expanding scale and acquiring customers to pursuing business is with high that it focusing on value creation better customer experience and so drunk the stronger supply best in order to achieve the about the company realize it operations with the goal was set in the three hours when it comes to new projects that decision making process starts from the value it can create for upstream and downstream customers proof of concept also comes from feedback on little customers instead of management imagining in the isolation of office ideas and projects always fought for tension in order to ensure that they always creating maxim that it for their casinos management emphasizes competition on the basis of value creation this could be measured in a number let's including increased efficiency improved outcomes are a better overall experience projects that have the greatest potential to create significant value for customers apologized over those that are likely to prove our provide fewer benefits and the ones the project has been approved management the shaw's by the team working on it is fully focused on delivering maxim that it at every stage of death of developed throughout the project life cycle value creation is a key consideration came the given specific metrics to track their progress on a show that the project it meeting it's goals and perhaps most importantly feedback from the customers a constantly solicited and incorporate it into the projects development process this helps to ensure that the final product is fully aligned with the needs of bummer mobile customers and provides them with the best possible expects in customer centric is that the heart of the renewed operation structure in the past there have been numerous times my little a business reveal metrics or more centered around internal metrics such as remedy or not now it's changed the metrics related to think like the we have what customers what a surprising competitive enough to the always come back to us to their recommend also service styles all teams will have to go through their own operational metrics to align with customer needs instance a fulfillment center manage i would need to reform his or her metrics around how fast to the receive goods how fast can be delivered to customers how many items got damaged during transportation how many complaints are exceed on a day to day basis the company believes that lump sum that it is much more important than shops on revenue and march and games to achieve lump sum that if everyone in the company has to have the mentality that customers come first with great asset of the last week was a decent supply base has been built for the company believes moving forward this supply this needs to be further strengthened although great relationships with major supply had been established sure strategic relationships need further development it's comes back to the point of value creation
spk_3: the company has speak that has
spk_2: state of they aren't technology with many modules scattering different silos of operations once we can integrate all those modules much greater value can be created supplies can leverage our digital tools to have a real time data on their products coverage sales and pricing traditionally the could only get say within papers from t of and distributors now they had conflict view a business through the lens of it's about digital tools clearly those kind of pixel for benefits will never feel about to the pharmaceutical manufacturers in the past at best the have some limited data on a few key customers with direct coverage if they a big enough away a ground fails p without surprise almost all over the supplies will have seen our digital services are delighted by its capabilities if we continue to deliver facts solutions to upstream supplies they'll be more and more interested in allocating more resources to my mom as a digital chan over time i'll supply base movie strong enough to compete against those well established traditional players than the panthers it will be based on who can't believe i'm all value to supplies other than previously established along some relationships as digital catalyst in the healthcare industry by my mum has practically develop it's called comfort by digitally the connecting key players in the ecosystem this makes it possible for digital technology to become an enabler for those play as to improve their respective efficiency with more and play as about computers and technology the industry's being transformed there is a popular some analogy china caught the industrial in the internet which should be translated as an industry that's being transformed by internet technology what have laid a very solid foundation and a position by my mind as once one of the most important players in the field so internet ties with very traditional industry now let me spend a moment to talk about the key business progress in my mom in both cute for and the whole year at twenty can be tough over the past twelve months the deep him the partnership with upstream and downstream companies continue to expand upstream we have reached direct supply relationship with more than five hundred global and domestic pharmaceutical companies which provides abundant supply drops malcolm petty it costs and most stable supply and supports us to help grab sopa is he would a more competitive assortment of and improved a gross profit pots downstream the provided services to more than four hundred and thirty five thousand retail pharmacists he sits around seventy five percent market penetration providing our pharmaceutical partners in that market which of drug commercial i wish in the book it reducing distribution costs and achieving coverage more than eight hundred and ninety cities and counties in china within twenty four hours and directly or entire in directly providing medical services to hundreds of millions of consumers we all get up here to the principle that digital technology can effectively improve the efficiency of the industry in plenty plenty to our technology on the expenditure reached the hundred forty million rmb with a total i'm the expenditure of hundred and twenty one in the past three years at the end of a twenty five to my mom one owns nine call intelligent systems independently developed more than thirty proprietary systems the were awarded nineteen in been in mention patents and a major breakthrough innovations in intelligent supply chain and big data analysis in plenty plenty to my my mind was once again awarded the honor of titles and the qualifications of hi hat enterprise certified by the ministry of science and technology national ecommerce demonstrations surprised by the ministry of commerce special and new enterprise by shanghai city government and the put on area new aren't the is chosen by put on government we don't live in the delusion that the fame and the recognition can translate into business results the reason why they invest in technology is because we truly believe that technology complain operational efficiency obama this to be a core strength of my my mom therefore were confident that will will be able to compete in such a crowded industry even with count scale which is relatively small compared to the few biggest battle the can already compete on operational efficiency oh packs will be a very key metrics to tell how efficient a company can be as we continue to grow in scale would believe the company's operations at a much lower rate the significance of this is that we won't be the most efficient operator in whole industry which will enable us to compete effectively be the big boys one of our strategies moving forward is to continue to build an operation for the lowest cost yatra as we want to be the most efficient operator enough space animation is one of the called tenants about corporate culture and continues to be the driver computer glove and the be to be sector way pioneered the been health project to more than twelve thousand bucks so digital franchise the franchise bucks loss can use digital facts services including intelligent procurement out to l c r et cetera to better manage glock selection procurement in three management and customer relationship on the one health project bama my come live about it to upstream pharmaceutical companies and that's rape fantasies this model makes the most efficient way for drugs to reach the hands of consumers for manufacturers as the whole process is digital and transparent our mission has always been to digitally connect drugs and healthcare services consumers the proliferation of one health a step forward in our midst in the beatles the data based on the vehicle python and a chronic disease management capability my mom one is helping drug manufacturers to launch the a dropped on our platform on february sixteen first official flagship store upon medicine but live on one moments platform immediately class know that little the very first locally approved innovative diabetic all that in china received a nationwide coverage which means patients across the whole country for access the got on our platform from day one of the lot my mom one also helps one medicine to man's life cycle of patient care including initial drug fulfillment for on patient education drug and hearings management oh my assistance of patient questions and refill we're proud of the fact that our model not only help patients and accessing really large dogs a godless bad the live in the country but also enable ops from top manufacturers to leverage out digital capabilities to reach more patients and a mansion with digital tools to achieve that distance results alex move on to our fourth quarter and a four year twenty twenty two results thank you for our operating revenue amounted to four point one billion art representing a year on year increase of nineteen point nine percent this is the eighteenth consecutive quarter growth since company that appeal q force ghost profit increased by twenty three point eight percent yeah roger gross profit margin increased from five point nine percent in the same period last year to six point one percent q for generated positive cash flow of six sixty three point two million rmb from operating activities the second consecutive quarter a positive cash flow from nine hundred and fifty nine leave and and seventeen two thirteen point five believe are in twenty two hundred twenty two our revenue scale has rapidly expanding fourteen times in five years in tiny tiny total our total revenue reached the ping pong five billion an increase of a point eight percent yeah yeah gross profit increased by thirty five point two percent the or four times the growth rate the wreck those profit margin increased from five percent last year to six point two percent this year let's not forget the struggles with had to endure throughout the whole yeah with covered vivre obstructions for majority of the yeah our operations were disrupted in many ways i won't bore you with much details but the nine percent revenue both and thirty five percent margin growth is earnt with tremendous team effort meanwhile queue for non gaap operation last narrow to zero point nine six percent legend come from two point two percent in the same period possible in fact we achieve the profitability of december of two hundred twenty two throughout twenty eight hundred to how operational efficiency continue to improve photo sales and marketing expenses general and many sort of expenses and technology expenses decreased by fifteen point five percent ya and long gap operating loss narrow to my point six percent of net income for the full yeah from four percent in the same period last year as of december thirty first can be funny to cash and a cash equivalents risk restricted cash and shops on investments potholed nine hundred and twenty two point seven michigan i'd like to spend a minute quickly talk about yes yeah that over the past year with the advantages of digital technology and each great it online and off on platform the company has actually helped find that pandemic during the lockdown the government appointed a small number of companies to deliver essential goods to residents were locked down at home my my mom was appointed as one of the that critical living guarantee into prices in chicago the company set up a virtual pandemic control commence into as soon as the pandemic broke out in shanghai early twenty twenty two mobilizing resources mama one to help our community the collecting purchase orders by a proprietary purchase channels and assign special person out process then nothing trying tom delivery to patients one clinic one my ones a lot hospital launched free online services since the pandemic began and provided free online consultations free for scripts thing we knew for chronic disease satirists and other medical services to the public the company has proactively organized donations and offered and hi pandemic pp games for enterprise resuming work and production in the context of the postponed economic promotion measures why my mom was again picked by the government as the designated healthcare platform in the shanghai electronic consumption boucher campaign in twenty twenty two we provided services and offered citizens of shanghai to redeem boucher vouchers on our digital platform helping government and the residents in consumption of the country everyone had my my mind is proud to be able to contribute to the community in the future will will always been little fill our social responsibilities and like continuous effort to actually contribute to the construction of the healthy chunk
spk_4: what a year we had
spk_2: it away with very glad plenty plenty to is behind us and public nineteen has become vague memories with overcame so many challenges and fought so hard for our business and a team a great results we grow revenue and margin on the extremely difficult circumstances offered expenditure continues to show great trends which suggests that operational efficiency will continue to poke ah bottom line is trending towards like even in fact we achieved the profitability it now got operating level in the month of december twenty twenty two in short we have made significant progress in our business metrics the believe that are strong technical capabilities will continue to enable us to pay scale and improve efficiency which will create lantern had a sustained regular and marginalise looking to the future mama mine will continue to operate on the principles value creation been customer centric and a strapping it's supply base the believe the government will continue to support the healthcare industry speaker migration the national strategy of strengthening the digital channels structure and the policies of the forty five year plan and the boat or can be thirty five provided us with excellent like electorate tailwind analysts excited that we can play an important though of speeding up the digital transformation of healthcare industry when with double down at efforts in growing abandoning a margin improve our operational efficiency and achieve profitability considering our track record of last four years what proven object ability and executing ah strategy who will continue to ended up a living great results in future but wish to fan holding best it's have supported us all luck that are have the called so i'll see if all mister the tend to walk through our financial the but thank you
spk_5: think it really and the morning or even everyone i want to begin by taking off our colleagues okay we didn't is and a hard work our fiscal year twenty twenty two and we navigated are challenging environment for making mexico changes to improve our operation and a position say i'm a t how competitive edge
spk_2: moving to the financials my prepared remarks were books are a few key believe in a financial i like you can be true to the details of the fourth quarter connected to your twenty twenty we got some flight ninety two point two infection three of our presentation again all comparative are you will be year and odd numbers are you i be unless otherwise stated
spk_6: let's start with the fourth quarter results
spk_5: total net revenues for caught a group twenty percent to four on would get it we are pleased to report that op ra second pocket fourth quarter and grow at twenty four percent which is faster than the gravity gross
spk_2: strong top line goes for a quarter was maybe attribute attributed to i would be to be second revenue growth at twenty one percent to four billion
spk_5: the graph headroom prophet would be to be segment has increased thirty one percent with graph second with marched up from four point five point two percent to five point six percent
spk_2: which retracted our ability to rapidly have been his guilt like that really improve our margin
spk_5: i'll be to see fact rapidly decrease two percent to one hundred twenty six didn't with grass segment margin at twenty one percent
spk_2: total operating expenses put a quarter what up seventeen percent to three hundred sixty three million
spk_5: and as a preventive net revenue to the already printed fourth quarter with that to eight point eight percent are from my present as we continue to he has operated leverage and optimize our operational efficiency oh human extent as a percentage that round to put a border with two point nine percent of compared to three percent in a quarter of last year and excluding the shepherd combination cells and market benefit at the package of never actually to the codewords two point seven percent from three to four percent in a thin caught a blog here
spk_2: he any expenses are kind of one zero point nine percent of nerve racking up from one percent and a technology that a counter for feel point six percent of their revenue as compared to the point seven percent in the fate of last year
spk_5: it's a result know get lost on operations what caught a narrow to
spk_7: forty million i'll be
spk_2: compared to the lot of seventy seven billion in the same quarter of last year at percent of the net revenues men get lot from operation because creased to left of one percent in the quarter from two point two percent are you the same quarter last year
spk_5: then get never off attributable to automate shareholders was forty six million compared to eighty four million in the same quarter last year and a pretentious percentage of net revenues the get that lock attributable to utterly shareholders decreased to one point one percent in the quarter from to pump
spk_2: will present in the same quarter last year
spk_5: as qualities called four year twenty twenty two
spk_2: i would like to run through a few highlights again you can be put to the details our deck and early release i'll comparisons are to full your or twenty twenty one
spk_5: for your net revenues were thirteen point five billion representing a year over year growth and bad percent i will be to be secular revenue growth pepper sent to searching for one wimbledon
spk_2: did without was achieved despite out disruptions cause the by the locked arms cost country during the year i'll be to see segment revenue decrease sixteen percent to four hundred forty two minute although pop my goal was not that has a factory the please report that we have achieved last second quarter close at thirty five percent which is four times of the revenue growth rate
spk_6: every thought that the combined across second with the margin was six point two percent up from five percent of year ago
spk_5: he to be back and marching was five or seven percent up from four point three percent by i'll be to see agreement was potty one point eight percent
spk_6: up from twenty point nine percent
spk_5: oh yeah funny funny to total operating offensive becuase to hop on a percent to i be one point to get it at the percentage of nevada you total operating expenses was a point nine percent down from temple to percent last year human expensive kind of or three percent of now bad news is you have compared to two point nine percent or last year excluding the chevy combination and time and a marketing benefits at upset you know rapid you have reduced to see percent this year some sleep on seven percent last year he in a tented account for the a point nine percent net revenue is year down from one point one percent and a technology spent account for zero point nine percent of net value or this year as compared to one point three percent last year
spk_2: as a percentage a net revenues may get lost hope for operations for the year decreased to one point six percent
spk_6: this year from whole percent last year
spk_2: then gap net loss attributable to order to shareholders as a percentage of net refuse decreased to one point i sent this year from four point two percent last year we narrowed all off about or more than fifty percent this year versus last year and the reached the profitability in and get operating level in the months of december
spk_6: we're confident that are strong
spk_2: technology capability would continue to enable us to build a scale improve efficiency and delivery
spk_5: a profitable top ability mining values for shareholders perhaps we for just like twenty three to saudi of the panic session
spk_8: follow selected a financial statements
spk_2: a quick note our cash position as of december so they put on a twenty to we had a cash and cash recruitment with the cash and a shot him battle of i'll be now hundred twenty three minute if can cruise our prepared to be mocked thank you operator we are now ready to begin our q and a session
spk_0: thank you we will now begin the question and answer sessions to ask a question him a press star than one on your touchdown phone if you're using a speakerphone we as you please pick up your handset before pressing the keys to which your question please for starve them to today's first question we concerns you paying for you will see i see see what is your head
spk_9: hi this is francis the and and thick and congratulations on the company program well out to question
spk_10: for someone as
spk_9: or the company achieved to break even a lotta december what is the pacific profit station for twenty twenty
spk_11: twenty three
spk_9: host pandemic aaron what are favorable changes for your company and how will you respond and take our social responsibility and it's neither my questions
spk_2: yeah thank you he hung out and take on your first question
spk_12: but yes thank you
spk_2: for that person indeed we achieved the a profitability in december twenty twenty three and there are plenty plenty to and that moving into tiny tiny free or the management on piece very much as optimistic about the prospect of or us continue to make profits if you look back he is we grew the company far less than a billing day to today thirteen point five billion or revenue and the mind you our margin has been growing faster than driving and are in the meantime we're doing a great job in a proving are operational efficiency you know if you look into the few buckets of by the operation exp it should not be it the cost to fulfill our our orders are be it ah the on sales cost the technology expenses the dna it's all training much better in the last year we are trained fifteen point five percent of our operate asians compared to the the percentage said all those data are all those data points on give us lot of optimism movie into twenty twenty three
spk_13: thank you see been
spk_8: ah many take the same question was
spk_14: the loves you know post called it the demand for out on the web importance is picking up ha was so that the more consumers are going to got worse with our customers to buy the medicine and other health or like
spk_2: oh wait like the an increase in sales why are they a big
spk_14: one is that during the pedantic
spk_2: the chinese government has been the value of internet of how acquittals a dogs to reach customers and to help reduce cause infection and to need a shortage of of hospitals girls me
spk_14: i'm also to improve availability of medication patients in remote areas no ah and we can see that your the path of like you're probably a yellow so yeah he has launched a theory new policy who promote like health ah also the pedantic as neutrons that of humor to go to a line the those customers he may enjoy the benefits of convenience online service or a human after the penalty our so the total number of users increase the ordered said you presented two minutes to live with for us the we also we need to take out illegally and take on the social responsibility will align with our government reach the how can a knock on the thirty go no the my as it
spk_9: okay thank you for your as or them as very clear and expeditionary and congratulations again of them companies program
spk_15: thank you
spk_0: thank you and our next question today comes from see the movie an individual investor please go ahead
spk_16: hello
spk_5: i love i
spk_6: i think that this is the yet thanks for sharing your pupil without actual data tough could see that i have to class trip but to me i would like to know what we'll be the calculus appreciate your focus going forward second elite at a cultist getting that consecutive quarter for generate a particular
spk_2: operating cash flow how do you plan to keep this chat at the house talkative cash punishing now yeah thank you sleep on with regards to the question of operational focus and a briefly mentioned in my script in are essentially with would get a lot of soul searching are in played on top and though the organization had some realignment on the strategic focus focuses operational eight and those are ah really ballot crazy our got to evaluate our that businesses on the magic on their on their merit of how much batting a can trade to our our upstream and downstream customers and the second focus or be on being customer centric and that i i've been the past ah we were more or less more focused on internal metrics rather than ah the metrics that you know our drive the organization and towards creating value for customers and our also the third on our focus is the really to strengthen our our supply base and so in a tight bonito we kind of up managed to restructure the business we are give up on some of the businesses with really no value and that we are
spk_17: really are realigned all day let's a weekly business review metrics to both customers instead of that our internal metrics like remedy on march
spk_2: and that are in obsolete the we worked really hard on about ah the supply suppliers i although we have built some good relationships they're not strategic enough and i were making excellent progress with our digital our technical product and so all the supplies were have been talking to a delighted and i knew not all of those are the focuses will really great and the holy and benefits will believe and no one being ah the sustained the right money on modern growth and they improved of operational efficiency we should expect our our or packs i'll continue to improve and also ah or those on results will really impact with bottom line on the chat or it's profitability
spk_5: yeah i'm on a couch for all come with we're very pleased to see that we have achieved two consecutive quarters put a positive operating cash flow are we have a competent that would be able to keep it good trend as we very close very much close to profitability
spk_2: and we have been operating with very high efficiency for the alcohol all accounts payable date with a lot forty five date and are you david a bit about thirty days
spk_5: or why we could do that i'll be the skill who will be able to negotiate a bad a treating terms with suppliers
spk_2: in terms of catch position oh cash or the cash equivalent and with three cats and shot batsman as of december yeah and amounted to be out on a we get him and we believe that we have sufficient cathy served to support of have been expansion
spk_18: the state have we have answer to your precious
spk_0: yet think it also the showering
spk_6: thank you enter next question today comes from tom craig el corazon investment please go ahead
spk_18: hello this is home from cornerstone ah congratulations on your performance last quarter or have two questions the first one is what are the my thoughts are struggling the sustainably proof months off the beach with the glass margin is this improvement sustainable the second one is to
spk_19: companies operating expense ratio has been consistent with equipment what it's my reason for the trunk can he continued quickly the future and you okay poem is is harvey out take your third question regarding logging on our people the business so first first law or you know we we as technology company so i lived with thanks to a my technology colleagues for now and a system of how how about to live volley features including out i landed in layman to a management system and which held that to get and the best cause each of our warehouse though we can do you dynamic tended we deem among all it's a warehouse to bed her server customer and also get a the best profit
spk_2: and also the other very good said to call bs lowest price in handle system
spk_20: the how about to optimize our price real time and get a good balance on our profit
spk_21: as well as a customer experience on price
spk_19: so while it's tours you know a really help us cool woah get a much better at of it that that besides the technology and who are i think
spk_22: the more important is our relationship with the pharmaceutical companies
spk_19: to further reduce all pokemon paused and we ironic sauce from various on who are common to lower costs of prague and the we are now saw sprawled of five hundred global and domestic i'm the her company the we will continue to deepen our strategic relationship with bees companies and minute just fall i was in the nation in the past two months in his year i have personally visit those with the pharmaceutical companies and we all are we have a very be caution on coast called it you're not a the now man the customer behavior change and they they are they all go
spk_23: way too high the know a direct relationship and to find those jet take it way to better serve
spk_24: the patients and customers in the imposed called a period
spk_19: so we definitely expect momentum the continue and the as and furthermore
spk_25: with that increase off the man novel customers
spk_2: with the volume grow we were definitely feed and most gullibility be not business and which we are translate into her at a profit
spk_26: in our business
spk_2: thank you yep of time i heard it and collect late about opec's right so i like driving a the opec style and mechanics sustain our answer the question drama the second part in a can sustain our absolutely with are confident of that i am that would believe there is good oh much room ah for our opec's to improve and now you know the short answer to what what drives on down the aisle packs are the short answer is really our investment into technology now we advocate digitization and that we must demonstrate ah you know us by ourselves being digital first a and i view of show up you know in a in a conference room today or any any well if you're traveling in in some remote areas and up with a mobile phone we actually you know exactly know what happens on the day in terms of sales so i'm not not only do we know the obama company's sales and we know precisely what happens that say in northeast china in east troy china in northwest china and not in what customers that meant in ah what categories in and even some as to use so on ya knowing all that give us a huge advantage in decision making and each morning and are we have over a thousand people are being the ground fans that each morning you know those grounds as people will be assigned find a list of pox for today's work that assignment is not done by the managers actually by the system so being digital ah has a lot of advantages
spk_18: now saw moving into the future with the the new technologies like check ttp available there are more areas we can look up to be more efficient and the as we speak
spk_0: we'll have a few projects going on and that we're experimenting and see how are can further reduce our opec's and that you know the other factors that contributed to the driving down of the ah
spk_14: oh packs it's really was spend money wisely and the we have to grow in a lot of months out scale girls and obviously i would have scaled down are the operating costs and that and of course that in conclusion we still have lot of confidence on to improve on a lot more into the future
spk_27: thank you could you are looking forward to the performance next quarter and to
spk_5: thank you and or next question comes from france as young as as me capital please go ahead becky operator this is francis from to capital or congratulations again on a great performance i got two questions the first one is the percentage of non gaap operation loss to net revenue has significantly narrows what's the main reason for this trend and how does the company's plan to maintain his trend
spk_2: my second question is
spk_5: does the company have any new technological developments in recent times i love to huge share about it thanks yeah i'm home via the get opting loss can get on equally to own and get over the last now to one point six percent of net revenue compared to four percent last year and full couldn't get ave a with less than one percent on that revenue and we reached probability at them and get operating leveling the month of december of justin to offer my colleagues exclaim the markings benches and in our issues the i felt that i would like to highlight of this are narrowing of the get over the last of mainly attributable to to key drivers
spk_2: put with the customer network with a beautiful throughout the years we have been able to the felt high margin on it and improve the quality of on their of have adapted mix we have focused more on profitable in a healthy rapid expansion to improve or martin profile
spk_14: as you can see we have delivered thirty five percent of gross rating gross margin which was were tons of dollar value pulse rate and who are all cross marty has improved from five percent to six point two percent packing a key driver is on and acknowledged we being a with all of the about tech solutions are we have been able to streamline all creatures significantly improve operating efficiency we we have achieved of ram he was with much less expensive and expense a investment as our see you're just just share with you that our spending i'm have been more disinclined or of we will continue to work hard on this keep to drivers of together with the scale buddha to reach profitability
spk_2: and the unable to say place of comprises yeah
spk_14: the particular thing hasn't it ah about a monkey admins are we are i believe was as really believe that analogy on on sol qualcomm that we'd have netted the highly and what does ah than just a few examples on outlook weather will ya wolverhampton versatile have if you to improve asked us fighting with ample your past would have i you know and an apple them centers and i each tonight very the and cause me to build the open efforts oh are we on so for country of see the all it was hundred
spk_2: with ya on my palm suppliers lender is not have won heal up record the splc
spk_6: and that way our young maiden minutes
spk_14: a polite muggy tobacco backwards is this year we probably like the another had no out with henri of who enters the build up that will help you to divert of what i need to our customers we also feel that i can buy model or to my excitement in the t v i'm not recently went offline he is he who create a held company like your radios and that aisle hacked if i'm video to play a lot of a deal with with dumbo or was a short video off lights are no one minute no and he doubted that you more than five hundred and he out and use be god he played by ah yes he is he added that was a decent human too young for about how to i a mighty go along they might not including the leader
spk_28: that's how to defeat development yell at all i landed whoop whoop
spk_14: hi to apply has indicated plate out as it's or leaders
spk_0: are you know between really are ya
spk_29: i try will emerge you technology to about our as much idea to
spk_19: wait edit half returns about i take you there
spk_20: yes certainly is it was very clear and the artificial intelligence integration sound very exciting we look forward to hearing more
spk_19: and you stay here and on a consultation so stephanie know with civic investments for each ahead good evening doesn't happen a transit like a that meant and congratulations on your growing rapidly it and add the to question the first one as what are the company plans for our the and product in the future and a second question is ah what's your current progress up the company's privatization thank you hi a little time it takes textbook question got a are oh yeah that and actually you are caught a private a look at we have ah heading off color or ios from athletes know that it's an eye as a knows the now we have a large as if i that killed
spk_30: off of private label and all of least twenty five as a youth have been were at fat it i alla as on the customs
spk_2: and there are you know you in is sloth a chance all protestant look for that could have you about thirty to forty percent of now logic
spk_5: oh wow out of people because blood loss he video stores have small chance they are not able to have their own brain
spk_2: so we put that to a private label brandon up one dollar the finds out on the off and four different type of customers and that we offer these private label to help them to compete at least those big was in this area
spk_29: elliott layout also
spk_0: of our over a hundred fk use in our pipeline
spk_2: now we expect to see a very fast increasing trend in his project thank you
spk_6: yeah on the habit
spk_31: we understand that approach as up the private he is still ongoing
spk_19: and independent committee is working with the i group on that prodigy proposal
spk_32: the company each show make audacity public announcement according to as easy to lose so i would suggest that then you stay tuned out be an announcement if there's any up to be made by by the company thank you
spk_19: thank you and congratulations again on their great for follow up the company
spk_20: thanks
spk_19: thank you thank you enter next question today come from adam fried egg grief capital please go ahead at at congratulations are acting upon the blackwater an adult friend from brit capital i've got to cresson as but that the come they have any new business model innovation and that back in a lump as but that comedy making choose a true cat mcfadden yep that to classic thank you
spk_20: ah else
spk_19: that the question that actually regarding the new model
spk_33: we are actually off
spk_34: pilot hanging out your module almost every day every week of cause you know some of name failed and available
spk_20: some
spk_35: at it he said it has a very good out for example our unhealthy for problem
spk_20: and we have twelve thousand pharmacy
spk_19: and the million salsa patiently serve a lot in it's a lot of health program
spk_20: pharmaceutical companies are leveraging and that one house platform to perform various at digital marketing including
spk_19: the coverage of new terminal new us east
spk_36: and in a specially extension
spk_19: all of them in old area and lower tier cities and also to do patient education
spk_34: and to to the old he ah
spk_37: the duration of children etc
spk_19: with what health platform and new as to lead with the model has been oh well accepted by are many instances openness
spk_2: and the alone yadda example probably earth
spk_14: you can adjust measure about private label more and i saw it's a very good chance
spk_2: well i'm chat and are committed called palace not owning i right
spk_14: lead arrest thoughts from land also some of our on said called strategic partners they are also a oh yeah i'm lost so ah or later in he said it you know is part of our dna and we'll we'll continue to bring more initiatives and who actually is outpost hobby
spk_2: seasons
spk_14: eric holder you should be able to see more and more initiated in all announcement thank you ah i need my mom our our efforts to improving of my experience
spk_38: yeah you live or your answer mission about a out of the omri as the
spk_14: also i mentioned by i shipments pfc
spk_39: these are in fact ah tremendous improvement for others
spk_2: he was your will help wolf of him on her underwood we also she's more or less i ship or product into are open with under are closer to customers
spk_6: the the fabric will have who showed him the time
spk_29: how do you do it
spk_0: i'd rather i do to mention that was thirty a hundred advantage cities and counties in within twenty four hours hour days that tremendous commenting cock extreme as whites out or your duty damn part time he gets on well ah another example our coverage for a woman advocate are you in the past we just managed and nationwide us woman are now we are feel down one more level with

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