JD Health International Inc

Good day, ladies and gentlemen. Thank you for standing by. Welcome to JD Health International Incorporation 2024 Annual Results Conference Call. At this time, participants are in listen-only mode after management's prepared remarks. There will be a question-and-answer session. Please note that this English simultaneous translation line will be in listen-only mode for the duration of the call, including the question-and-answer session. If you wish to listen to the management's original statement or ask a question during the question and answer session, you will need to dial in the Chinese line. I will now turn the call over to Ms. Feng Bingling, Head of Investment Relations. Please go ahead, Bingling. Thank you, operator. Good day, ladies and gentlemen. Welcome to our 24th Annual Results Conference. Joining us today are JD Health Executive Director and CEO, Mr. Jingya Lin, and CFO, Mr. Hui. Before we start, I would like to remind you that today's discussion may contain forward-looking statements which involve a number of risks and uncertainties. As to results and outcomes may differ materially from those mentioned in today's announcement and this discussion, the government does not undertake any application to upgrade this forward-looking information except as required by law. During this call, management will discuss the non-offerable financial measures for commercial purposes only. For definition of the non-IFRS financial measures and the reconciliation of the IFRS to non-IFRS financial results, please refer to the annual results announcement for the year, ended December 13, 2024, issued today. For today's call, not to endure with the prepared remarks in Chinese and we're only accepting questions in Chinese during the question and answer session. A third-party interpreter will provide simultaneous interpretation English on a separate line for the duration of the call. Please note that English translation is for convenience purposes only. In the case of any discrepancy, management statements in the original language will prevail. I would like to turn the call over to Mr. Jinglin. Please go ahead, sir. Hello, everyone. I'm Jinglin, CEO of the J.D. House. It's a pleasure to share our 2024 four-year results. 2024 was the year of steady growth for JD Health. On the macro level, China's health industry has continued to grow in scale. According to the data released by the National Bureau of Statistics, the average per capita medical and health consumption expenditure in China was RMB 2,574 for seven in 2024, up 6.3.6% year-over-year, accounting for 9% of the total per capita consumption expenditure In the outline of the Health China 2013 plan, the scale of China's health service industry will reach around $16 trillion by 2030. As public awareness of health management devices and disposable income increases, health consumption has become a major driver of China's consumption growth. Health consumption is no longer discretionary but increasingly becoming a rigid demand. the expanding demand for health consumption is energizing the entire market and locking its potential. During this process, as an industry-leading healthcare service provider, JDH has been at the forefront of creating new online and offline consumption models to meet people's increasingly diverse health needs. While closely following national policy directives, We have steadily advanced our business development, achieving high-quality robust growth in revenue and our bottom line. Most importantly, as an active practitioner of the Healthy China 2030 initiative and the industrial leader, we've consistently integrated our commercial value with Seattle industry and user value, continuously promoting technology applications and service innovations to accelerate implementation of inclusive healthcare. The two sessions are now underway. Many proposals involving healthcare have attracted widespread attention, which will no doubt provide a powerful push for industry growth. Meanwhile, the application of innovative technologies represented by large language models has brought in the industry's future prospects. Driven by national policies, market demands, and technological developments, we will build on our strengths and deepen our focus on achieving high-quality development. In this way, we will create sustainable commercial value for our shareholders while giving back to society and our users. Now, I'd like to share our business highlights for 2024, followed by discussion of our business outlook for 2025. Now, let me walk you through our business development in 2024 across three primary areas. First, we solidify our B2C leadership and accelerate our omnichannel initiatives. In 2024, we deepen our efforts to deepen our omnichannel initiatives, generating greater value at the first entry point for online healthcare consumption. To begin with, we continue to cement our leadership in the B2C sector. For instance, in the pharmaceuticals and other core categories, our growth rate exceeds that of our major peers, both online and offline, despite the high commercial base. Thanks to our strong supply chain management capacities, rich product offerings, and excellent user experience, furthermore, we have observed that users' pharmaceutical needs are changing, with increasing demand for imported or original drugs. anti-flu medications, and other innovative treatments. These emerging trends have not only provided us with lots of growth opportunities, but have also motivated us to continue innovating and enhancing our user experiences. While solidifying our advantages in the B2C business, we've also actively developed our omni-channel operations. For instance, we consistently increase the investments in on-demand retail and proactively responded to health policy guidance by enabling real-time online insurance reimbursement for medical purchases in multiple provinces and municipalities, making us the first among our peers to induce this feature. Our service allows more people in more cities to enjoy medical insurance reimbursement for drug purchase from the comfort of their homes. Additionally, in our newly opened JD Pharmacy offline stores, we followed on providing exceptional service with no upselling by store staff. or hidden pricing strategies. We have launched our first service drug dispenser in Beijing, helping the GDH on the trust of more users. Second, we'll build an internet-based healthcare service innovation benchmark and accelerate the integration of online and offline services. In 2004, we remained committed to our aspirations and continued to invest in health service innovations, making us one of the few players in the industry to do so. As such, we lead the direction. Over the last year, we've successfully completed significant service integration innovation, pioneering first-level consultation, examination, and diagnosis from a surgical close-up model. The entire patient process from online consultation with doctors to rapid at-home testing to doctor diagnosis and prescriptions. The final home drug service and delivery can be efficiently completed online through a service framework centered on JD Health Online Hospital. This new service model has dramatically improved improved convenience and over-experience. Of course, the model's success is all the result of our increased investments in in-store and home. Furthermore, we officially opened the J.D. House J.A. Town Traditional Chinese Medicine Clinic and specialized clinics offering orthopedic and massage therapy services, as well as several offline examinations and polyclinic centers. To date, we have built a comprehensive professional medical service matrix some passing doctors, pharmacists, and nurses. Whether users are seeking online consultations, install medical assistance, or at-home care. Our service matrix enables them to enjoy comprehensive professional and compassionate health services with a human touch. Third, we lead large language multiplication innovations and facilitate implementation of inclusive healthcare. Earlier this year, around the Chinese New Year holiday, DIPC sparked widespread public interest in AI. Of course, for the healthcare industry, AI application is not just an elective but a required course. In fact, JDH has already become the first online healthcare platform to apply large language models on the grand scale. Covering the full spectrum of healthcare service scenarios for customers, doctors, hospitals, and businesses. Our gene-intentioned large-language model is the largest model with most doctors involved. They deal with hospital collaborations and the broadest user trial participation. Building on this foundation, we launched the AI Gen E, a full suite of AI-powered tools for online healthcare scenarios, and JoyDoc, the industry's first AI solution for full-scale hospital applications at the beginning of 2025. With AIG, we aim to provide more intelligent tools for online licensed doctors facilitating quality and efficiency enhancement in their online consultations and day-to-day scientific research. On the other hand, the JoyDoc helps hospitals optimize patient care workflows, enhance doctors' clinical research efficiency, and alleviate the overall hospital operations. For 2025, we will focus on several key areas. First, we will continue to strengthen our B2C direct sales plus online marketplace plus on-demand retail operational model for the summoning of leadership in the healthcare retail market. Our goal is to reinforce users' awareness of JD Health as a go-to platform for online healthcare products and services. of the JD Online Health Better Services while propelling the development of our at-home and in-store service models. These will better integrate online offline scenarios and resources, providing patients with more professional and convenient one-stop medical experience. Lastly, I'd like to emphasize technological innovations. At JD Health, we are committed to applying technology in real-world healthcare scenarios to generate tangible value. As such, we will deepen our focus on scenario-driven application of large-range models, ensuring AI creates practical value across the healthcare sector and driven the AI-powered transformation of the entire industry. Going forward, JD Health will remain committed to its business philosophy of transfer-based value creation centered on customer health. Through close collaborations with upstream and downstream partners, we will continue to open up our supply to infrastructure and healthcare service capacities. to achieve sustainable development together with customers, industry stakeholders, partners, and society as a whole. Thank you. Now I'm going to welcome our CFO, Ms. Denghui, to discuss the details of the financial performance. Thank you, Ms. Jing. Hello, everyone. Thank you for joining JD Health's earnings conference call. It's my pleasure to provide an update on our four-year 2024 performance. As China accelerates development of next-generation health consumption models and AI applications in medical scenarios, the Internet plus healthcare ecosystem's growth potential continues to expand. JD Health maintained high-quality growth in 2024, with a full-year revenue of RMB 58.16 billion, up 8.6% year-over-year, excluding The first quarter's pandemic-related high-comparison base effect revenue in the second to fourth quarter has increased by 13.4% year-over-year. As of December 31, 2024, our annual active user count for the last 12 months exceeded 183 million, with an average daily online consultation volume of over 498,000 for the four years. In 2024, we achieved the complementary synergies among our direct sales, online marketplace, and on-demand retail business models, while further opening up our ecosystem and collaborating with industry partners to drive mutual growth. Meanwhile, we continue to diversify our product offerings and upgrade our service experiences, always putting users' needs first. We also rolled out multiple new services aimed at improving user experience, consistently earning users' trust. Our direct sales revenue for 2024 reached the RMB 48.8 billion representing year-over-year growth of 6.9%. Breaking down by category, pharmaceuticals' performance was particularly impressive with growth consistently outpacing competitors and market shares steadily on the rise. At the same time, we further strengthen our competitive position as the first online marketplace for new and specialty drug launches, facilitating online abuse for nearly 30 new and specialty drugs. We also partner with global pharmaceutical and healthcare brands like Merck, Organon, Telvar, MSD, Helium, and Pfizer. Explore innovations in diverse domains, including supply chain services, patient services, epidemic marketing. In our non-pharmaceutical segments, we continue to build on our direct sales business advantages, deepening partnerships with leading health brands and emerging brands in collaborative product deployment, omnichannel operation, and precise marketing to prepare growth across brand influence, user traffic, and sales. Our service revenues surpassed RMB 9.36 billion for the full year of 2025, making an 18.9% year-over-year increase and accounting for 16.1% of total revenue, up 114 base points compared to 2023. platform commissions, and advertising revenue both sustained a rapid growth rate. We consistently ramped up our support for platform merchants, fortifying the synergies between our online marketplace and direct sales business to improve users' health consumption experiences. As of December 31, 2024, the number of third-party merchants exceeded 100,000. Throughout 2024, we further strengthened our on-demand retail business and accelerated progress in our innovative omni-channel relationships. As of December 31, 2024, our JD Instant Service launched our online drug purchases through individual merchant insurance accounts serviced in 18 cities, including Shanghai, Beijing, Guangzhou, Shenzhen, Foshan, Chengdu, Zhengzhou, Shenyang, and Tianjin. This service is now available through more than 3,000 medical insurances for the native pharmacies nationwide, serving populations over 100 million. In terms of healthcare services, we do the lead in the industry by creating a close to online service ecosystem, integrating consultation, examination, diagnosis, and pharmaceuticals, providing a one-stop upgraded at-home service experiences. And the home rapid test service began offering 119 support home testing services, including 12 cities bringing users at home diagnostic and testing services that match the quality of the offline hospitals. During online consultations, doctors issue testing orders electronically based on the patient's condition, the nurse or rider that comes to the patient's home to drop blood or collect the testing samples, the doctors then issue prescriptions electronically according to the test results, and patients who require medication can conveniently purchase it online enjoying a seamless long-term medical service experience in 2024. We also unveiled nearly 40 home nursing care services provided by professional nursing teams upon users' online requests. including online medical examinations and testing, wound care, and medical appointment accompaniment. Additionally, we offer the home medical device setup and support devices across more than 13 cities nationwide, covering nearly 1,500 STUs in nine major categories, including blood glucose meters and oxygen concentrators. For the full year 2024, our growth profit margin increased 17 base points year-over-year, to 22.9%, reflecting our efforts in deepening our supply chain work. This update also demonstrates our professional procurement and sales capacity, which enabled us to leverage more merchant investments looking ahead. We will partner with more merchants on the platform to offer our users better prices and services, bring users a more cost-effective product experience, This, in turn, will enhance consumers' trust and brand loyalty, helping to expand our market share in various categories. On an average basis, our fulfillment ratio in 2024 was 10.2% increase of 15 basis points from 2023, only primarily to our ongoing investment in user experience, as well as the decrease in average price per order. Our selling and marketing expense ratio was 0.2% for the full year 2024, increased by 30 basis points. Compared to 2023, we made significant strides with JD Pharmacy brand promotion strategies, successfully strengthened our brand recognition and influence among consumers this year. We'll further emphasize scenario-based marketing and invest in more diverse marketing channels to enhance user reach and conversion. We will also maintain a strong focus on our marketing investments ROI. For the full year of 2024, our R&D expense ratio was 2.1% on par with last year. As of the end of December, we had a total of 530 R&D personnel upfront last year. Our R&D personnel efficiency has further improved with the rapid growth of our business and the ongoing optimization of the middleware infrastructure, lowering the R&D expense ratio. Leveraging our healthcare long-term model, J&J, we launched multiple products for doctors, hospitals, and users in 2024. Holistically enhancing service efficiency for doctors, reducing service costs, and improving user experience in various scenarios. In a short to medium term, we plan to more rapidly unlock the value of the health and medical data by cultivating and attracting talent in data and AI, supporting our continued leadership in digital and intelligent operations, healthcare big data applications, and innovative health initiatives. In addition, we will consistently invest in and iterate the change in large-language model, further accelerating the application of large-language model technologies for diverse service scenarios This will effectively strengthen user loyalty, gradually reinforce consumer awareness and acceptance of online medical services, and continuously create new technological offerings for the healthcare sector. Our GA expense ratio was 0.8% for the full year 2024, on par with last year. Our backend staff and operational management efficiency levels continue to lead the industry. Finance income increased to RMB $1.96 billion in 2024, up 0.6% year-over-year, mainly attributable to the increase of our cash reserves. Other net income and gains in 2024 were approximately $840 million, primarily consisting of returns from wealth management products and government grants, including share incentives. Now, I phrase Net profit for the full year 2004 increased by 15.9% year-over-year to RMB 4.8 billion with a margin of 8.2%, rising 15 basis points year-over-year, hitting a new record high since our listing. Our cash flow from operating activities reached RMB 4.33 billion in 2024 at the end of December. The combined amount of cash and cash equivalents, restricted cash, long-term and short-term deposits, and wealth management products at fair values through profit or loss, and at amortized costs, worth RMB 159.42 billion, a net increase of RMB 5.71 billion compared with December 31st of 2023. This amount of 2024 JD Health maintained high-quality growth across its entire business, driving steady improvements in operational quality and profitability. Our active, high-quality user base, thriving platform ecosystem, and robust cash flow demonstrate the advantages of our dual-engine, closed-loop business model. Over the last year, we remained focused on enhancing user experience and cost efficiency to advance our strategies and initiatives. From industry policy perspective, the National Healthcare Security Administration has adopted a public price comparison approach, which enhances drug pricing oversight by providing a mechanism for comparing offline retail prices with online offerings. This clearly highlights the social and user value of online medical and healthcare consumption. Moving forward, we will consistently uphold our business philosophy of trust-based value creation centered on customers' health. We will remain focused on cost efficiency and user experience enhancement, continuously elevating our supply chain capacities and pricing competitiveness. As we navigate the ever-evolving competitive landscape, we will fully harness our acute insights into users' medical and health needs to comprehensively strengthen our efficient business model, ensuring user satisfaction and fostering collaborative success with upstream and downstream partners. We aim to build a long-term sustainable consumer advantage that will drive steady profitable improvements while maintaining our industry-leading growth rate, creating greater value for shareholders. That includes my prepared remarks. Thank you, Mr. Hui. That concludes our brief remarks. We would like now to open the call to your questions. As a reminder, we only accept questions in Chinese language lines. Due to your time constraint, please limit yourself to two questions and please press Start 1 on your telephone to touch the tone keypad. The first question comes from Miranda of American Bank. Please go ahead, Miranda. Thank you for having me here. Thank you for the remarks. Thank you for having me to raise the question. Congratulations. It is a great 2024 performance. My question is, for 2025, do you have any prospects? As we are seeing the changes on the consumption market and you are becoming a great leader in your sector, for 2025, what is your strategic direction? Do you have any changes or adjustments as you elaborated on the 2025 core directions? Can you help us to elaborate a little bit more on the specific plans for the 2025 for the performance estimation, please? Thank you, Miranda, for the question. Jennifer speaking. China's healthcare market is further expanded. The health-related services and products have become the reggae demand for the market and consumers. And for the elderly, they have different lifestyles. The great health economies give us new demands. For the younger generations, they have different awareness. They want to stay healthy and robust. They become the new users. That means health consumption has become the new part of the market consumption. From JD Health's perspective, we remain firmly committed to our strategic direction in 2025, and we are confident in our ongoing role in leading and shaping the next wave of health consumption trends. First of all, in the pharmaceutical e-commerce sector, we will foster closer partnerships with our ecosystem partners. On the supply side, strengthening collections with upstream stakeholders and end users to offer a broad range of healthcare products. On the demand side, we will improve omnichannel service experience and continue to enhance consumers' trust and the brand organization to solidify our position as a preferred online platform for health products and services as our e-commerce business begins to grow. We'll third increase our market share. In terms of the healthcare services, we will continue to deepen and expand the scale of JD Health's online hospital service. Meanwhile, we will further strengthen our service offerings, such as at-home and in-store portfolios, leveraging synergies across our service lineups to better integrate online and offline experiences by enhancing our closed-loop services and capacities across online drug consultation, at-home examination testing, home delivery of medications, and at-home nursing and care. We aim to provide patients with a more professional and convenient one-stop medical service experience. Additionally, we will further invest in AI and large-language models and other innovative technological applications we plan to drive AI-powered transformation across existing businesses, boosting technology's effectiveness in cutting costs and improving efficiency. We will share our long-proven tried-and-true technologies and capacities with a broader industry offering a variety of innovative products and solutions to empower a wider audience and drive industry-wide progress. Thank you. I want to say a few more words. In 2025, JD Health is confident in sustaining its industry-leading growth rate, with revenue expected to grow by double digits and accelerate significantly compared to 2024. We will continue to craft exceptional user experiences and collaborate closely with brands and merchant partners, health service providers, government organizations, and other stakeholders across the health industry value chain, fostering a mutually beneficial and highly efficient commercial ecosystem. Also in line with our long-term strategic vision, we will remain committed to making disciplined strategic investment this year in the long run, With the healthy development of our business and ongoing improvement in operating efficiency, our product margins will steadily increase. Thank you for giving us a response. The next question comes from Goldman Sachs, Lincoln. Please go ahead. Thank you for having me here. My question is, On the pharmaceuticals, over the last year, the core categories of the pharmaceuticals are growing rapidly. You have consistently outpaced the competitors. Looking ahead to 2025, will you be able to maintain your advantages in this sector? What plans do you have for developing your supply chain and enhancing patient services to strengthen your position in the out-of-hospital drug retail market? Thank you. Thank you, Lincoln. We are saying that and we are stressed that the importance of pursuing initiatives that deliver long-term value is important. Our results from the last year clearly demonstrate that our sustained investment in this sector paid off. JD House boasts robust supply chain advantages in pharmaceuticals, including optimized direct sales capacities and synergistic benefits across our online and offline channels for the Supply side, we will continue to strengthen our position as the first online marketplace for new and specialty drugs for the GLP-1 and other special drugs. And we're also collecting the drugs of the out-of-the-patient original drugs. Those are very prosperous, and we have seen a huge potential that room for growth. And this is further demonstrating our first arrival advantages. Now, we are also attracting massive attract daily, and we are also create the academic marketing platform. Every year, every day, we are attracting over hundreds of millions of online traffic. We are also backed by the most comprehensive ecosystems in the system. This motivates pharmaceutical companies to launch and sell their flagship products on the JD Health platform. which in turn enables our street pharmacy to thrive while driving consistent growth. From the demand side, we aim to further enhance the user experience and user perception of online consultation and pharmaceutical purchases. We are committed to creating unique online experience and boost our presence in the out-of-hospital market. Our competitive pricing strategy will reinforce JD Health's reputation for affordable medications We're also planning to expand our code categories and work directly with small pharmaceutical companies to ensure quality. For instance, we will offer free exchanges for side medications and 24 times 7 pharmaceutical support, which will help build consumer trust. We will also survey the rollout of online medical reimbursement in selected pilot areas, encouraging more users to choose JV Health as a preferred platform Furthermore, we will optimize the consultation, class examination, class side notice, plus the surgical code loop model. Leveraging our online and offline service network will deliver exceptional online medical consultation and pharmaceutical purchasing services. Thank you for the response, Mr. Jin. Thank you, Lincoln. You're welcome. Next question comes from Hito International. Hongke Han, please go ahead. Thank you for having me here. Congratulations. In 2024, you had such a beautiful outcome to other questions on AI. In 2024, you released Jingyi Qianxun AI Language Model. It faces hospitals, organizations, doctors, and patients. After the release of the model in the AI sector, do you have more funds? And for the short term and for the long run, do you have any commercialization potentials in this regard? Thank you, Gohan. Around 2017 or 18, from day one, we have the AI language models. At present, in the past, we are using AI resources to help the patient to have better medications, and that is our mission. Ever since then, we consistently deploy resources on the AI. That is part of the DNA. It is not for us to pursue in the buzzwords. Can you change the knowledge model? It's one of the top tier larger models in the medical sector. It is ranked number one in the specific sector. This is the only open source model in the sector. Open source is a good event we are promoting. JD Health and the AI is not only for us. It's for the sector, for the entire industry. We will continue our innovation. We will be in the leading position for the long run. At present, we have already AI-tized our business, and we are going to go deeper on the innovation. We want to bring the scale of economies, and we want to implement it in every round. Today, in the 2D, 2C, and 2Ed sector, we have the full scenario deployment. In the 2D sector, leveraging our healthcare large-ranged model gene change, we created and unveiled our AIGE product suite, including professional service roles such as digital doctors, nutritionists, and pharmacists, as well as intelligent assistive tools, including the diagnosis assistant and research assistant. Our primary target is to address the productivity challenges in the internet-based medical and healthcare services, including reducing service costs, improving efficiency of online medical services, and elevating user experience, we also aim to strengthen loyalty and trust of licensed doctors. At JD Health online hospitals, over 40% of the AI-recommended content is adopted by doctors on average. AI services are utilized in over 80% of doctors' competition audits. In the smart shopping assistance use scenario, AI nutrients have replaced 90% of human involvement, achieving conversion rates of 80 percentage points higher than annual manual surveys, highlighting AI's impressive upside potential. For the 2C sector, we have launched a array of AI offerings, directly targeting consumers, including small universe for chatting and hitting, count on a mobile blood pressure measurement product, and midnight diagnostics. These AI-powered products further reinforce our position as the first entry point. To edge, we again utilize our health model to cross the joint product suite, assisting our hospital clients in improving patient's hospital-based experience, supporting clinical research for doctors, and enhancing hospital patient management. Over the last few years, development of internet-based medical and health services have driven the progress of medical AI. Today, as the technologies mature and evolve, it is set to exponentially accelerate the advancement in the incident-based medical and healthcare services, creating a flywheel effect. JD Health has always been at the forefront. In the short run, it is a productive tool. In the long run, our priority is to use medical AI to drive business growth, including the full scenario application of large range models and enhanced upgrades of internet-based medical and health care services. AI is more than efficiency booster. It is the right force to shape the future. Thank you. Thank you, Jean. Next question, from CSCC. Please go ahead. This is, I'm from CSCC. I'm an analyst at Fung Shih Peng. Thank you for having me here. Congratulations for the wonderful 2024 performance. In 2024, you are echoing the national policies on the reimbursement. Some questions on that regarding 2025. Can you expect a further loosening of the online medical reimbursement or the insurance payment? Will there be an impact for the company's business development? Thank you. Thank you, Chipong. In 2024, JD Health made significant strides. In July, we were the first to launch medical insurance payment for online purchases through our instant delivery service. At the end of the year, in 18 cities nationwide, including Guangzhou, Zhengzhou, Shenzhen, Shenyang, Tianjin, among others, adopted policy. This service is now available In over 3,000 medical insurance designated pharmacies serving a population of over 100 million. In 2024, we aim to further improve and solidify this service in pilot cities and increase new user acquisitions in this region. With medical insurance payment as the touchpoint, we seek to continuously build consumer's awareness and acceptance of internet-based pharmacies. Overall, as an industry-leading platform, JD Health, against the inefficiency from its first-move advantage in this area. We expect to drive greater new user acquisition while increasing the efficiency of online medication purchase among existing users. Also in 2025, in the regions prioritizing this policy, we'll launch the medical insurance payment for online purchasing service within our direct sales business, further reinforcing user perception and recognition of the JD Health Overall, the old model for insurance-covered medication purchases effective address users' urgent needs. The B2C model for insurance-covered direct medication software cover a broad range of essential and chronic disease medications, enriching the selection of medications covered by medications available in time. We believe that even a strong foundation will build with our omnichannel initiatives, will be the biggest beneficiary. Thank you. I have no question. Next question from UBS. Henry, please go ahead. Thank you. My question is on the strategy. In 2025, for the retail business, do you have a specific plan But online and offline integrated the strategies, so what will be the new progress? And what is your purpose objective? Thank you, Henry. So the retail business is one of the key scenarios. And we are going to touch upon the out-of-hospital market. We want to be the number one. That is the top objective, and we will go down and break down the key objective step by step. This is also a key step to consolidate our foundations. We want to strengthen the patient and the user conception and awareness as the first online platform. Online and offline integrated penetration is a must. The retail scenario will accumulate. The new users, which will also be used in the online platforms for our in-house, for our own supply chain, we have the fast and the fast delivery, giving them better service and experiences. We're also optimizing the supply chain cost. Last but not least is the instant retail capacities. We have the follow-up systems. This is also going to improve the timeliness of the home deliveries. By 2024, by the end of 2024 in Beijing, we have 16 0-to-0 pharmacies. Covering most regions and districts in Beijing, we have the full IASD capacities and operation capacities. It has demonstrated the value of the pharmacies. We have the differentiated capacity in Beijing. Our market value as well as the total user base will increase in 2025. We will enter into other top tier cities, the business circles. We will also offer them good quality, efficient price, and timely. In terms of investment, we will strengthen and consolidate our supply chain capacity. We'll ensure financial discipline to offer better ecosystem. We'll consolidate our previous plan. We will cover the omni-channel services, and that's how we could improve the customer adhesion and experiences. Thank you. Thank you, Mr. Jin. For the time's sake, this is the end of the Q&A session. If you have, so we're going to welcome to wrap this up. Thank you once again for joining us today. If you have more questions, please contact our IRF team directly. Thank you.