Pharma Retailer 111 Tumbles in Trading After Higher Net Loss, Despite Doubled Sales
Shares in Chinese pharma retailer 111 Inc. (Nasdaq: YI) tumbled nearly 7 percent intraday Thursday, to $7.60 per American depositary share, after the company reported its net loss in the fourth quarter nearly doubled year-over-year while its revenue surged.
The Shanghai-based online healthcare platform said in a statement that it generated revenue in the amount of $81.1 million during the three months through December, up 102 percent from the same period of 2017. It said its net loss was $18.3 million, or 22 cents per share, an increase of 95 percent year-over-year.
For the full last year, 111 reported revenue of $259.8 million, up 86 percent, and a net loss of $55.3 million, up 53 percent from 2017. Loss per ADS was 97 cents.
The co-founder, chairman, and chief executive officer of 111, Junling Liu, said the company's performance in the fourth quarter exceeded its guidance and was driven primarily by the B2B segment.
"As of December 31, 2018, we have developed a fast growing virtual pharmacy network in China by serving more than 150,000 pharmacies," Liu stated. "We have been also making a great progress in building the strategic partnerships with insurance companies, pharmaceutical companies as well as local municipal health commissions."
He added, "Meanwhile, we have restructured our B2C business with a more customer-centric organization structure to enable us to meet the specific needs of different customer segments."
111 said its operating costs and expenses reached $100.3 million during the fourth quarter, double the amount in the prior year period, growing across all departments.
Looking ahead, 111 forecast revenue in the range of 600 million yuan and 640 million for the first quarter, representing an increase of between 82 and 94 percent year-over-year.
According to Liu, 111 plans to add 80,000 new pharmacies to its virtual network this year. He concluded, "We will further strengthen our core capabilities in smart supplier chain, medical expertise, big data and cloud solutions, to enable our various partners within our integrated online and offline healthcare ecosystem."
111 completed its initial public offering in New York in September, raising $130.2 million by selling 9.3 million ADSs at $14 apiece to advance its goal of consolidating China's fragmented pharmaceuticals supply system. At the time, the company's chief financial officer, Weihao Xu, said that its long-term goal was to build the largest online-offline integrated healthcare platform in China powered by technology.