111 (YI) Q3 2024 earnings summary

Executive summary

• Achieved operational profitability for the third consecutive quarter, with income from operations of RMB2.4 million versus a loss of RMB80.4 million a year ago, despite a challenging macroeconomic environment and weak consumer spending.

• Maintained positive operating cash flow for three consecutive quarters, generating RMB109.9 million in Q3, supported by enhanced efficiency and cost control.

• Outperformed peers in a retail pharmacy market that saw significant profit declines among major competitors.

• Continued investment in digital and AI technologies, expanding product offerings and improving supply chain management.

Financial highlights

• Net revenues were RMB3.6 billion (US$513.1 million), down 1.8% year-over-year, with gross profit up 10.5% to RMB210.6 million and gross margin improving to 5.8% from 5.2%.

• B2B segment revenue declined 1.2% year-over-year to RMB3.51 billion, with segment profit up 14% to RMB195 million and margin rising to 5.5%.

• B2C segment revenue fell 26.4% year-over-year to RMB64.6 million, with margin improving to 24.1%.

• Non-GAAP income from operations turned positive at RMB7.1 million, compared to a non-GAAP loss of RMB54 million last year.

• Net loss narrowed sharply to RMB3.5 million, a 96% improvement from RMB83.5 million a year ago.

Outlook and guidance

• Optimistic about achieving operational profitability for the full year, with plans to expand the fulfillment center network and reinvest in technology, market expansion, and client growth.

• Long-term growth expected from China's aging population, increased healthcare spending, and digital transformation.