1 The number of pharmacies under the drug city service line exceeds 235,000, accounting for about half of China’s retail pharmacy market.
Before the U.S. stock market on March 12, the 1 parent company 111 Group (NASDAQ: YI) released the fourth quarter and full-year financial report as of December 31, 2019. According to the financial report, the total revenue of 111 Group in the fourth quarter was 1.35 billion yuan, a year-on-year increase of 141.8%, which was 110 million yuan higher than the upper limit of the company’s performance guidance announced last quarter. 111 Group’s full-year revenue in 2019 was 3.95 billion yuan, a year-on-year increase of 121.3%.
At present, the 111 Group owns B2C Platform 1 Pharmacy, B2B Platform 1 Pharmacy and Internet Medicine Platform 1 Pharmacy. In the fourth quarter, the Group’s core business B2B business continued to grow, achieving revenue of 1.15 billion yuan, an increase of 247.5% year-on-year, accounting for 85.2% of total revenue. As of December 31, 2019, the scale of the 1 Pharmacy virtual pharmacy network continued to expand, and the number of offline pharmacies served exceeded 235,000, fulfilling the strategic goals set by the company in 2018. 111 Group revealed that 235,000 pharmacies cover about 50% of the retail pharmacy market in China.
In addition to revenue and scale growth, 111 Group’s B2B business orders in the fourth quarter reached 366,000 orders, a year-on-year increase of 201%. In 2019, the number of B2B business orders reached 982,000 orders, a year-on-year increase of 237%. .
However, in the fourth quarter of 2019, 111 Group’s net loss attributable to ordinary shareholders was 158 million yuan, which further expanded the loss, compared with a loss of 126 million yuan in the same period last year. For the whole of 2019, the company’s net loss attributable to ordinary shareholders was 500 million yuan.
Behind the “increasing profits but not increasing incomes” is the high cost. The 111 Group’s product sales costs remain high for a long time. In the fourth quarter, 111 Group’s costs and expenses reached 1.305 billion yuan, a year-on-year increase of 144.3%. As a “middleman”, the 111 Group wants to connect pharmaceutical companies with hospitals, clinics, and pharmacies outside chain drug stores. The company needs to bear the product purchase and transportation costs at both ends. As the B2B business segment grows, this cost Expenditure will also increase.
It is worth noting that the company’s technology expenditure has decreased year-on-year for three consecutive quarters. In the fourth quarter, this expenditure was 19.9 million yuan, a year-on-year decrease of 2.8%. Increased adoption of more automation tools.
In addition, as of the end of the reporting period, the amount of cash and cash equivalents, restricted cash and short-term investments held by the 111 Group was 698 million, compared with 1.107 billion in the same period last year. 111 Group predicts that the company ’s net revenue in the first quarter of 2020 will reach 1.4 billion yuan to 1.48 billion yuan, an increase of 113.5% to 125.7% year-on-year.
On February 17, CICC released a multi-dimensional outlook on the long-term changes brought about by healthtech, stating that 1 Pharmacy is one of the two Internet medical targets it proposes to focus on. On March 4th, Citigroup gave 1 Yaowang its latest target price of $ 12.
(Source of chart data: Group 111 financial report; If there is no special note, the currency unit in the text is “RMB”)