111 Inc (YI) Q1 2021 Earnings Call Transcript

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111 Inc (YI 7.21%)
Q1 2021 Earnings Call
May 19, 2021, 7:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Monica Mu -- Investor Relations Director

Thank you, operator. Hello, everyone. And thank you for joining us today for 111's First Quarter 2021 Conference Call.

On the call today from 111 are Dr. Gang Yu, Co-Founder and Executive Chairman; Mr. Junling Liu, Co-Founder, Chairman and CEO; Mr. Luke Chen, CFO of our major subsidiary; Mr. Haihui Wang, Co-COO; Mr. Barry Zhu, Co-COO; Ms. Tiffany Jugal, SVP of Investor Relations and Business Development; Ms. Monica Mu, Investor Relations Director; and Mr. Alex Liu, Finance Director.

As a reminder, today's conference call is being broadcast live via webcast. In addition, a replay will be available on our website following the call. The company's earnings press release was distributed earlier today and together with our earnings presentation are available on the company's IR website at ir.111.com.cn.

Before we get started, let me remind you that this call may contain forward-looking statements made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's current expectations and current markets and operating conditions and it relates to events that involve known and unknown risks, uncertainties and other factors, all of which would cause actual results to differ materially. For more information about this risks, please refer to the company's filings with the SEC. 111 does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise except as required under applicable law.

Please note that all numbers are in RMB and all comprehensions refer to year-over-year comparisons unless otherwise stated. Please also refer to our earnings press release for detailed information of our comparative financial performance on a year-over-year basis.

With that, I will turn the call over to our CEO, Mr. Junling Liu.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Good morning and good evening, everyone. Thank you for joining our 2021 first quarter earnings call.

I'll begin with an overview of the company's business and operational performance and before handing it over to Luke to take you through the financials in section two. We will then conclude our prepared remarks with guidance for Q2 2021 before opening the call for Q&A.

We were pleased to report another quarter of strong growth. In the first quarter, net revenue rose 64.7% year-over-year to RMB2.6 billion. This marks the 11th consecutive quarter of year-over-year revenue growth since our IPO. In China, Q1 is typically a soft quarter in the healthcare space as well as for the general retail industry due to the Lunar New Year holiday. In addition, Q1 2020 was unusually strong due to the sudden surge in demand for pandemic-related products. So we're pleased with the year-over-year growth, which, excluding one-time pandemic-related sales, was 89% in Q1 2021.

Non-GAAP net loss attributable to ordinary shareholders as a percentage of net revenue has also decreased from 6.9% in the first quarter of 2020 to 4.2% in this first quarter, which shows our continued momentum toward profitability.

Our top line growth is driven by our S2B2C model and we'll continue to take the lead in the modernization and advancement as China's healthcare system. Our growth is a testament of the tremendous progress in our mission, who digitally connect patients with medicines and healthcare services.

Given the transformative nature and leading edge technology of our S2B2C model, I'll briefly highlight its core fundamentals. First, the S in our S2B2C model represents our powerful supply chain platform that encompasses not only the technology behind the platform, but also our network of suppliers such as pharmaceutical companies, distributors and other service providers. This S is digitally connected to the B, our rapidly growing network of pharmacies, doctors, clinics and so on. To further strengthen our supply chain capabilities, the two new fulfillment centers in northwest and northeast we announced in March are now fully operational. We're also expanding and upgraded some of our existing human sensors to meet the growing demand for our services.

The expansion of our supply chain network has been key to supporting businesses and doctors and allowing them to serve their patients effectively and efficiently. These improvements will also expand our ability to help marketplace vendors sell their products via our online platform. There are currently over 905 marketplace vendors utilizing our platform. By leveraging our supply chain infrastructure and online presence, they are able to expand their geographical reach and attract new customers.

With the regulatory policies in China trending toward lowering healthcare costs and increasing transparency and efficiency, pharmaceutical companies need new sales models to address the challenges presented by these regulatory changes such as volume-based procurement, more intense local [Technical Issues] and taking full advantage of accelerated NRDL approvals.

In the past, one drug may be able to enjoy a decade-plus of high sales volume. But in today's environment, both international and domestic pharmaceutical companies need to capitalize on the patent exclusivity period and reach peak sales volume for their products in the [Technical Issues]. To help them achieve this, we continue to broaden our partnerships with pharmaceutical companies in our omni-channel commercialization platform offering them access to our large network of retail pharmacies, our network of both in-house and affiliated doctors as well as our nationwide supply chain network.

A good example of this is our strategic cooperation agreement with BeiGene announced in March. BeiGene currently markets two internally discovered oncology medicines in China and also markets or plans to market in China additional oncology products licensed from a number of well-known global pharma companies. 111 and BeiGene will cooperate around an Internet plus medicine plus healthcare model, leveraging our Internet hospital, smart supply chain network, data-driven AI solutions and online and offline DTT delivery of medicines to create a unique oncology management platform and expand the commercial reach of BeiGene's innovative drugs. At March 31, we have over 360 similar partnerships with pharmaceutical companies. And these partnerships allow for a win-win scenario for all parties involved.

Patients benefit by being able to access a much wider variety of medication, along with newly approved medication faster than ever before without waiting for medicine to enter the hospital system. And doctors benefit from no longer been limited to prescribing drugs available using a certain hospital system, allowing them a wider range of treatment options. Pharmacists benefit by leveraging our models of scale to provide better pricing, wider selection and their ability to fulfill single unit orders. Pharmaceutical companies benefit by gaining a wider access to doctors and patients nationwide and the ability to sell products in multiple channels without relying exclusively on hospitals for sales. We benefit as well by being able to acquire products at lower cost and offer revenue generating services to pharmaceutical companies.

Let me break up the B in our S2B2C model in a little more detail. We continue to develop our S2P2C model, Supply Chain Platform to Pharmacy to Consumer. Here, we provide pharmacies with a wide selection of products and services from our economies of scale, which includes over 340,000 pharmacies accounting for more than 60% of China's local retail pharmacy network. Pharmacies leveraging our supply chain platform can take advantage of our Cloud CRM and Cloud Clinic, a wide variety of products and services like speedy home delivery and inventory and supply chain management.

We also offer a suite of enterprise solutions such as tools and support necessary to enable previously offline businesses to establish an online presence and [Technical Issues] consumers. At the same time, we're expanding the reach of our S2D2C model, Supply Chain Platform to Doctors to Consumers. By harnessing the power of our industry-leading technology, we are modernizing the traditional in-person medical care process by offering telehealth and the patient management tools to provide convenience and timely medical care from diagnostics to treatment to follow-up and routine care. We're proud at the forefront of the healthcare industry's new era of Internet plus medical care plus medicine.

Doctors can utilize our cloud pharmacy, cloud clinic and doctor patient platforms to provide online consultations, e-prescription services and follow-up care to patients, which improves the quality of the doctor patient experience [Phonetic] and results in more positive care outcomes. This platform removes the elements of geography and the hurdle of physical distance between businesses and patients. Doctors can engage and interact with their patients while at home allowing for effective and efficient follow-up care, all the mitigation of the potential complications early in the diagnosing process. This foundation of our model is extended to the C, the consumer or the patient, who is digitally connected to doctors, physicians and other healthcare providers and services.

Consumers can leverage a wide network of doctors and pharmacies that were previously out of reach or unknown. We believe that the benefits to having this integrated digital platform is clear, improved access to healthcare and better patient outcomes. As a result, our omni-channel digital platform fills many gaps in the traditional healthcare ecosystem and we have seen that increase the demand for our innovative [Phonetic] solutions. This is demonstrated by the fact that in the first quarter, our service revenue, while nascent and therefore not yet making a substantial contribution to our total revenues, grew to RMB17 million, representing 161% increase over first quarter 2020.

I would further like to highlight the potential for growth in these spaces and the increasing market opportunities we are seeing. According to a report from Frost & Sullivan, China's online consultation market is expected to rapidly increase from 6% in 2019 to 42% in 2024 and 68.5% in 2030 respectively. This increase is partially driven by China's enormous chronic disease management market, which is expected to triple from RMB4.5 trillion in 2019 to RMB14.9 trillion in 2030. Accordingly, China's online pharmaceutical market is expected to grow nearly tenfold to RMB1 trillion by 2030.

Given the industry tailwind and the leadership position 111 has established in our space [Phonetic], we continue to make significant investments in our team, technology and the supply chain platform. This also shows our confidence in driving more business momentum. Technology expenses grew more than 100% over the past 12 months. And we have also made significant investments in our patient management portals and other technology offerings. In addition, we continue to add to the pharmaceuticals and doctors support team that we began building last year, consisting of professionals with expertise in specific disease areas such as endocrinology, oncology, neurology and others.

Our established S2B2C model, or specifically S2P2C and S2D2C model are a win-win for all. And our strong Q1 2021 results reflect that. Our dedication to improving and expanding the foundation of our industry-leading technology and omni-channel network, along with growing market opportunities in healthcare, telehealth and the pharmaceuticals put us in an excellent position to continue to deliver outstanding value to our shareholders.

With that, I'll hand the call to Luke to walk through our financial results. Thank you.

Luke Chen -- Chief Financial Officer

Thank you, Junling. Moving to the financial sections on Slide 13, you can see the details of the first quarter 2021 results from Slides 14 to 16 of our presentation. I would like to highlight few key business and financial metrics and I'll focus on year-over-year comparisons. All numbers are in RMB unless otherwise stated.

Let's start with the first quarter results. Total net revenues for the quarter grew 63.4% to RMB2.6 billion, which is at the high end of our guidance range. Our B2B segment revenue grew 77.6% to RMB2.45 billion and our B2C segment revenue was down 27% to RMB142 million. The decrease is attributable to the first quarter being generally slower for the entire retail industry due to the Lunar New Year holidays as well as first quarter 2020 being an unusually strong for online purchases due to the mandated quarantine.

Our B2B gross margin was 3.6%, up from 3.3%, while our B2C gross margin remained stable at around 20%. The improvement in gross margin of our B2B segment reflected our ability to continuously improve the margin by maintaining robust top-line growth. Overall, our gross profit grew by 32.2% to RMB116 million.

Total operating expenses for the quarter were up 43.6% to RMB2.9 billion. As a percentage of net revenue, total operating expenses for the quarter decreased to 11.1% compared to 12.8%. Fulfillment expenses as a percentage of net revenue for the quarter was 2.6%, down from 3.5% in the same quarter last year.

Sales and marketing expenses as a percentage of net revenue for the quarter was 4.7%, down from 6.1% in the same quarter of last year. G&A expenses as a percentage of net revenue for the quarter was 2%, up from 1.9% in the same quarter last year.

Technology expenses accounted for 1.9% of net revenue, up from 1.3% in the same quarter last year. This is primarily driven by an increase in the number of personnels in the R&D and IT teams, reflected our continuous investment in our infrastructure. As a result, non-GAAP net loss attributable to ordinary shareholders for the quarter was RMB109.3 million as compared to RMB109.4 million in the same quarter last year, which accounted for 4.2% of net revenue, down from 6.9%.

As to the guidance for the second quarter 2021 on Slide 18, the company expected total net revenue to be between RMB2.92 billion and RMB3.08 billion, representing a year-over-year growth of approximately 80% to 90%. The above outlook is based on current market conditions and reflect the company's current and preliminary estimates of the market and operating conditions as well as consumer demand, which are subject to change.

Please refer to Slides 20 to 22 of appendix section for our selected financial statements and a quick note on our cash position as of March 31, 2021. We had cash and cash equivalents, restricted cash and short-term investments of RMB1.16 billion compared to RMB 1.62 billion as of December 31, 2020.

This concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session.

Questions and Answers:

Operator

Certainly. [Operator Instructions] Your first question comes from the line of Jung Jaywon of HSBC. Please ask your question.

Jung Jaywon -- HSBC -- Analyst

Yeah. Thank you very much, management, for taking my questions. This is Jung Jay from HSBC. I hope to ask two questions on behalf of Rachel Yang. My first question is on the fulfillment cost. So we do see that the fulfillment cost has further decreased in Q1. So just wondering how we made it and how do we see further room for a decrease?

And the second question is about the industry. So, we see natural [Phonetic] industry athletes recently such as the online sales of prescription drugs and the announced medical insurance payments. So, how do we expect this policy to impact our businesses? Yeah, that's my two questions. Thank you.

Luke Chen -- Chief Financial Officer

Talking about fulfillment cost decrease, yeah. We have continuously improved our whole supply chain, including our systems we've built and also we initiated various DPI programs to improve our operational efficiency and effectiveness. At the same time, we are optimizing our supply chain infrastructure. I've seen that in Q1, we built along with [Phonetic] two new fulfillment centers, one in Northwest and one in Northeast. And we're restructuring the whole supply chain network. This enables us to have a more efficient supply chain. At the same time, we are engaging with more third-party logistics and improving our co-chain coverage, improving our fulfillment center automation. So, all these together help us to lower the fulfillment cost.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Yeah. Let me address the industry question. That was a great question. By the way, yeah, you mentioned a few policy changes in recent months. But also if you look over in the past couple of years from allowing online sales of drugs, the volume-based procurement and also the recent approvals or the speedy approvals of new drugs into China, there are a lot of positive changes in the regulatory side. I think, if we look at all those policies, they all point toward two important directions; one is really transparency, the other is really efficiency.

And if you look at our business model, 111 is very different from our other competitors in the industry. We do not have a parent company with background or a lot of resources. Our business model is purely based on two principles, one being transparency, the other one being efficiency. So this really plays right into our strengths. And the other great development are the push toward digital and the penetration toward lower-tier cities. Obviously, [Technical Issues] solutions can help us address both the needs from the pharmaceutical companies and also the doctors and patients and pharmacies alike. Once again, this plays right into our strength.

I must say that the Chinese government is grimly confident. And if you look at those policies, we absolutely wholeheartedly welcome those new policies. And they actually will leave the foundation to make the key Chinese healthcare system one of the most efficient ones in the world, I think, in the next -- within the next decade. We feel extremely lucky to be in the right market at the right time.

Luke Chen -- Chief Financial Officer

Thank you, Junling.

Jung Jaywon -- HSBC -- Analyst

Yeah. Thank you very much.

Operator

Your next question comes from the line of Zoe Bian of Citi. Please ask your question.

Zoe Bian -- Citigroup -- Analyst

Hi. This is Zoe Bian from Citi. Thank you management for taking my question. My first question is about the revenue growth drivers in first quarter. We know that you have covered a majority of pharmacies in China. Which customer group is your strategic focus in the next one or two years?

The second question is about the partnerships with the pharmacy -- with pharmaceutical companies. Can you please share why do they choose 111 to cooperate and can you give us more examples of the partnership? And the third question is about your new investment on the supply chain. Any updates on upgrades of supply chain infrastructures and fulfillment centers? And the fourth one is about your STAR Board listing status? Thank you.

Luke Chen -- Chief Financial Officer

Thank you, Zoe. I think we can start with your order. First question is about the drivers in revenue growth. That's a good question. And I think I spoke about in my script about why we continue to grow at a pretty fast pace, even though our revenue base has gone down over $1 billion last year. And I think fundamentally, it's still our model that's driving the growth. It's our S2B2C model.

If you look at the progress we made in Q1. And obviously we announced the two new fulfillment centers in full operation. And also we're expanding -- upgrading some of the existing fulfillment centers. And we increased the pharmaceutical partnership to 360 plus. And we also collaborated with a number of globally renowned pharmaceutical companies on their new drugs, like Eli Lilly, like BeiGene, like [Indecipherable], etc.

We're also working with some of the CSO companies that also referenced that we have over 900 marketplace vendors on our platform. This is all our S, so that's our supply chain platform. And obviously, how do we really break up the S2B2C and then I explained that was further broken down into S2P2C and S2D2C, right? So, in the S2P2C side, that's the pharmacy side of the business.

I referenced a number by March 31, we actually covered more than 340,000 pharmacies, right, that is more than 50% of the overall market. And on the S2D2C side, the number of doctors we have been working with has increased to more than 15,000 by the end of the quarter, right. So, really if you look into the growth of the business, this is the fundamental driver. And we're pretty confident that we're going to continue to deliver pretty robust growth even though our base has become a much, much bigger base now.

And the second part of your question one is about the focus of customer groups, really on the pharmacy side, yes indeed, we took the majority of the pharmacies now. But what we believe the value we could offer to the small and medium chains and the single source from the dimension of graphical coverage instead of focusing on Tier 1 cities, I think our biggest opportunity is really in the Tier 3 to Tier 6 cities. The lower-tier cities, they actually -- those pharmacies there need our services more than those Tier 1 city pharmacies.

So, I'll stop at that and maybe Gang should be talking about the partnerships on the question two.

Gang Yu -- Co-Founder and Executive Chairman

All right. Let me answer the second question to Zoe. You've seen that we are a perfect partner for pharmaceutical companies with complementary strength. All you know that the pharmaceutical companies, they have their R&D capabilities, they have all their products, they like to have broad market coverage to penetrate to all the consumers. They have good branding and experts -- medical experts, but they really like us to have the omni-channel commercialization capabilities, or supply chain coverage, or digital solutions. These are a perfect match. Another -- so our -- plus our data service can help them to improve the scale -- the customer insights, our entire service can help them to improve their field reps' efficiency. And another big part is that where -- and that's like basic company, they like our transparent corporate governance, like our compliance and all these together now make us to be their choice.

Also the third question you mentioned about why we continue to expand our supply chain. I think we'll continue to do that in fulfillment centers, both in capacity and in throughput. We are now also in the process of expanding our co-chain coverage for innovative drugs and for bio drugs. We're also investing in warehouse automation to gain more operational efficiency. So, we're through all these. We've deepened our regional penetration, broadened our market coverage, improved our timeliness delivery and optimized our systems and operations.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Yeah. Regarding the STAR Board domestic listing, in the second half of last year, we started the process of preparing an IPO on the Shanghai Exchange, particularly STAR Board. And that work is continuing. As many of you maybe aware, the listing process on China's exchange require approval from various government entities. And because of that, we cannot control the timing and thus we cannot give a clear guidance on that. But we remain committed to achieving our goal of building an investor base consisting of both domestic and global investors. And we believe that our new listing in China, in addition to our current listing on NASDAQ, will allow interested investors a convenient and efficient way to invest in 111, no matter where they're based.

Zoe, hope we answered all your questions.

Zoe Bian -- Citigroup -- Analyst

Thank you, management, for thoroughly answering my questions. Thank you.

Operator

Your next question comes from the line of Horace Cheng of Ideate Investments. Please ask your question.

Horace Cheng -- Ideate Investments -- Analyst

Hi. Thank you for the presentation. This is Horace from Ideate Investments. I just have two questions, the first one being related to the expenses. I see expenses have gone up, especially G&A and technology expenses have gone up significantly. And especially on technology, can you shed some light on the timing of the investment and sort of the nature of the increased expenses?

My second question is on the gross margins. I see that gross margin continues to expand. Can you give us a little bit more insight on to the margin expansion and whether or not we should continue to expect such expansion? Thank you.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Right. So, it's a great question about expenses and the way of asking. If you look into the details of our business, we actually feel extremely confident of the future of our business. And what we wanted to do is take the opportunity to really strengthen our profitability to better position ourselves in the marketplace, right. So this is a tremendous demonstration of our own confidence over the future of our business.

The expenses really are happening in the following areas, where we think we should be investing to better position the company. You mentioned about technology absolutely. We actually more than doubled our technology team from last year. That is a key area for us to [Phonetic] really to differentiate ourselves from our competition in the marketplace.

And the other part of the investment actually goes into the innovative new businesses. So we have a number of new businesses that we're incubating. We believe in the future, we believe especially in the S2B space, there's going to be tremendous price there. And of course, our fundamental of the business is supply chain platform. Obviously a lot of the investment goes into our supply chain network, not only our fulfillment centers but also the partnerships and the ecosystem, including the team that's covering some of the [Phonetic] key accounts of the pharmaceutical companies, the team that are doing development in the marketplace vendors in other CSO companies, distributors, etc.

And of course we also make investments [Technical Issues] our team and our G&A expenses are going up. We believe those investments are very necessary, given the opportunity we have in the development of the healthcare industry in China. This is going to really nail us on the map for the future development of the company.

So I think -- about the gross margin side of the business, Luke, are you going to address that?

Luke Chen -- Chief Financial Officer

Yeah. We're very pleased to see the -- we continue to improve the gross margin on the 2B business. This quarter, we grow the 2B business revenue grow like 77%. But the gross margin -- I mean, gross profit will grow 90% -- more than 90% and the percentage volume from 3% to 3.6%. The drivers behind as we explained, we are increasing more direct sourcing on pharma companies, which we have better trading terms with them.

Additionally, because we have been partnered with those pharmacies, we provide solutions to them and we are able to achieve more of sales revenue, service revenue, as we highlight this time. As well as we're focusing -- asking to focus on selling those high margin products like co-brand with particular pharma companies. So we think that with the scale we're building up, we will have more opportunity to leverage the network we build out and to provide not only the distribution service to the pharma companies, but also and sales and marketing service, like digital marketing service we provide to them and other service.

And then also, we believe we'll be able to generate service revenue from all those SaaS solutions we provided to the pharmacies, the clinics, private hospitals, etc. So, we've been able to improve the gross margin and gross profit on the 2B side quarter-over-quarter and we're very pleased that we will continue to do that.

Horace Cheng -- Ideate Investments -- Analyst

Okay. Thank you.

Operator

[Operator Instructions] Your next question comes from the line of Charlene Liu of HSBC. Please ask your question.

Charlene Liu -- HSBC -- Analyst

Hi, Dr. Yu and the management team. Thank you very much for taking my question. I think management team mentioned earlier and as we know that 111.com has already achieved great success in terms of covering the pharmacies -- 50% of the market. And obviously the another area of growth is to start covering doctors/clinics. And by the end of the quarter, you've already covered 30,000. Can you share a little more as to where you are on the expansion plan and how much of the landscape which you intended to cover has already been covered thus far? And can you talk about the percentage of your orders now currently originated from clinics as opposed to the pharmacies? Thank you very much.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Okay. Maybe Harvey, can you answer the question?

Harvey Wang -- Co-Chief Operating Officer

Yes. Majority of our customers engaged currently through our online operation, both pharmacies and clinics. And as Junling has mentioned, there are many from Tier 3 to 6 cities. And we also have onsite task force around the country to provide onsite services, especially for our new customers. And those onsite task force, their service include cloud services and cloud clinics and cloud CRM and our cloud services.

We also developed an app called Hawkeye which monitor all our activity of our sales force and enable our sales force to achieve a much higher productivity than intelligence. I am not sure...

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Yeah. I think I want to add another comment there, Charlene. I think the revenue -- majority of the revenue still comes from the pharmacies instead of the clinics, although clinics would be a future growth area we want to invest in and are currently more than 90% of the revenue still for the 2B business is still from the pharmacies.

Charlene Liu -- HSBC -- Analyst

Understood. Is there a target as to how many clinics or doctors you intend to cover, say, in the next two to three years? And would it be one of your KPI to sort of target certain revenue breakdown at some point in time down the road coming from clinics?

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Yes, indeed. But we're not ready to announce to the outside world yet. We have an internal plan that's definitely we have specific target to develop, we deployed both teams [Technical Issues] doing that. So we will be reporting that in due course.

Charlene Liu -- HSBC -- Analyst

Okay. Wonderful. Thank you so much. This is very clear. Thanks for the opportunity.

Operator

[Operator Instructions] Your next question comes from the line of Anthony Keizer of Odyssey Investments. Please ask your question.

Anthony Keizer -- Odyssey Investments -- Analyst

Thank you so much. First of all, I want to congratulate you. I've been -- I'm an old Greek that lives outside of Washington D.C. and I've admired your company for well over a year. I think no one in the Communist Party would object it, no one in America would object to the work you're doing and I'm proud to be an owner of your shares. My question deals with the issuance of shares. And let me explain.

I had a lot of China Unicom some years ago and there was an issuance of 47% of the stock. The stock had gotten up in the $20s and it never recovered. Also, the American government is issuing dollars now and destroying the value of the United States currency. And I know you gentlemen are well intended and you want to -- and you have a tremendous growth trajectory. But how are you going to protect us, the outside owners that support you regarding the price going forward and the issuance of shares? Thank you, sir. Thank you for taking my question.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Anthony, first of all, we're most grateful for having you as our shareholder. I appreciate you attending the call and listen to our story and also expressing your views. Your view is very well taken. We understand what you're talking about, but it's a rather complex issue and I would love to [Technical Issues] to speak to you further on this and we will take your comment back and our team is going to do some further research on that. And we also need to do some analysis. Of course, there is always pluses and minuses whatever structure of the shares we're going to have. But yeah, once again, your comments are very well taken. And we would love to have the opportunity to actually speak beyond this further.

Anthony Keizer -- Odyssey Investments -- Analyst

Thank you. Thank you.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Thank you.

Anthony Keizer -- Odyssey Investments -- Analyst

Thank you. I'm available to speak about it in any time. And I thank you so much for understanding my question.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Indeed.

Operator

As there are no further questions at this time, I would now like to hand the conference back to the presenters. Please continue.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Okay. That sounds like we have completed all those Q&A session. And so, Monica, are we ending the call now?

Monica Mu -- Investor Relations Director

Thanks. Thank you, operator.

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Well, that will conclude our call.

Monica Mu -- Investor Relations Director

Thank you. In closing, on behalf of the entire 111 management team, we like to thank you for your interest and the participation into this call. If you require any further information or have any interest in visiting us in China, please let us know. Thank you for joining us today. This concludes the call.

Operator

[Operator Closing Remarks]

Duration: 50 minutes

Call participants:

Monica Mu -- Investor Relations Director

Junling Liu -- Co-Founder, Chairman and Chief Executive Officer

Luke Chen -- Chief Financial Officer

Gang Yu -- Co-Founder and Executive Chairman

Harvey Wang -- Co-Chief Operating Officer

Jung Jaywon -- HSBC -- Analyst

Zoe Bian -- Citigroup -- Analyst

Horace Cheng -- Ideate Investments -- Analyst

Charlene Liu -- HSBC -- Analyst

Anthony Keizer -- Odyssey Investments -- Analyst

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