Good day, thank you for standing by. Welcome to the 111, Inc. fourth quarter and fiscal year 2021 financial results conference call. At this time, all participants are in the listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. Now I'd like to hand the conference over to Ms. Monica Mu, IR Director of 111, Inc. Thank you. Please go ahead. Thank you, operator. Hello, everyone, and thank you for joining us today. 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. Harvey Wang, COO. Monica Mu, Investor Relations 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 market and operating conditions, and relate 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 these risks, please refer to the company's filings with the SEC. 111 does not undertake any obligation to update any forward-looking statement 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 comparisons refer to year-over-year comparison, 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. Well, good morning and good evening, everyone. Thank you for joining our fourth quarter and the fiscal year 2021 earnings call. The information that we'll be discussing here are also provided in the slides that have been posted earlier today on the company's website. I would encourage you to download the presentation along with the earnings report at ir.111.com.cn. I'm pleased to report that 111 had a great fourth quarter and a great year in 2021. We achieved our targets and saw improvements across all operating metrics. 111 has achieved critical scale of about $2 billion in revenue with a significant margin improvement. Growth segment profit grew 3x as fast as revenue growth in Q4. The company's total revenue grew 13-fold in the last four years. We now have a clear line of sight to profitability in the near term. We have built an infrastructure that will enable us to service pharmaceutical companies, doctors, pharmacies and patients. We have created the largest virtual pharmacy network with 385,000 stores and growing. We have formed partnerships with over 500 globally renowned and the domestic pharmaceutical companies. Our technology platform is state-of-the-art and is already playing the role of transforming China's healthcare industry. We feel very proud of the ecosystem we have built to date, as it will enable us to scale our business to the next level. China's healthcare industry is massive, and is more than 7% of GDP and growing. 111, Inc. has developed a business model in the S2B2C space with unique advantages, unrivaled national sales network and coverage, fast-growing partnerships with drug manufacturers, world-class supply chain, and an ecosystem powered by its state-of-the-art digital platform to capitalize on this massive market. Please allow me to talk briefly about the state of the business at a high level. I will then cover our recent operational performance, followed by some details on how we will continue to deliver margin growth and the future strategies. Our CFO, Luke Chen, will take over to walk you through our financial results. Just as the concept of new retail is transforming the retail industry through integration of online and offline experiences for consumers, 111 is leading the charge to revolutionize the healthcare services industry in China by leveraging digital technology and the power of the Internet to connect patients with medicines and healthcare services. We continue to build upon our integrated online and offline platform to improve efficiency, optimize business processes, improve and expand access to medicine and healthcare services nationwide, and provide a better experience for patients and healthcare providers. Digital technology has fundamentally transformed the retail industry in China, and business and regulatory leaders saw the potential of leveraging the technology to reshape other industries as well. Hence, in 2019, the Chinese government formally included industrial Internet as one of its national strategies and launched numerous incentives to encourage digitization and integration of online and offline services. As recently as two weeks ago, during China's NPC and the CPPCC's two sessions, the government reiterated its commitment to industrial Internet and expressed the desire to speed up its development to usher in a new digital economy. Digitizing the healthcare industry has been our goal since the very beginning of 111. Today, we are, without a doubt, one of the leading industrial Internet players in the healthcare sector. While China's economy continues to grow, many sectors nevertheless face the problem of overcapacity today, and the pharmaceutical industry is no exception. We see this as a tremendous opportunity to leverage digital technology and reconstruct the value chain in the healthcare industry. Industries that are typically well-suited to reap the benefits of industrial Internet have the following characteristics. First, the industry is sufficiently large to benefit from digitization and integration. China's pharmaceutical market is a RMB 3 trillion+ industry, with pharmaceutical product sales topping RMB 2.4 trillion in 2019, and is projected to reach RMB 4.2 trillion by 2026. Second, the industry is fragmented, with multiple upstream and downstream players. This rings true for the pharmaceutical industry, with over 7,600 pharmaceutical producers and 13,000 pharmaceutical wholesale enterprises in the upstream, and 555,000 pharmacies in the downstream. Third, the industry still generally operates on the traditional models and the legacy systems and the processes that are inefficient and cumbersome. Again, this is very much true for the pharmaceutical industry, where traditional transaction models are largely inefficient. Medicine and products have to go through multiple intermediaries, from pharmaceutical companies to primary suppliers to a multi-tiered distribution system before reaching the pharmacies, and then finally to patients. Further, a lack of clarity and the general opaqueness in the industry have added to the inefficiencies. Finally, the challenges facing the industry can be solved through tools such as digitization, integration of multiple platforms, and the payment system upgrades. It is clear that the pharmaceutical industry is in need of modernization, and we have the tools to help reshape the industry. Many parts of the value chain here can be reconstructed through digital technology, and 111 uniquely delivers a holistic healthcare platform that integrates medicine with healthcare services to the benefit of all parties within the broader healthcare ecosystem, from pharmaceutical companies to doctors to healthcare providers, and of course, the patients. Our digital platform offers cohesive online and offline solutions with improved efficiency compared to traditional players. Today, we directly source from more than 500 global and domestic pharmaceutical companies, and our digital solutions serve more than 385 pharmacies across the country. Between our online pharmacy and the network of pharmacies, we're able to deliver healthcare products and services to tens of millions of patients nationwide. In China's latest Fourteenth Five-Year Plan for the digital economy, we can see that the digital economy has been elevated to a vastly important position. China's digital economy will enter a period of fast expansion by 2025. The digital economy-driven industrial transformation is now setting off a huge wave. One of our key focuses in the past few years is to develop tools that help open online channels for the traditional brick-and-mortar businesses while enabling them to operate more efficiently and better serve their customers. Our smart supply chain platform has enabled patients living in rural areas to receive medicine and healthcare services in the comfort of their homes. By expanding our reach and service offerings, we strive to be a key player in building a new value chain in one of China's biggest industries. Moving on to our Q4 financial performance. We're pleased to report another solid quarter with net revenue of RMB 3.46 billion, an increase of 31% year-over-year, marking the 14th consecutive quarter of year-over-year growth since our IPO. Gross segment profit grew 98% year-over-year, among which B2B segment profit increased 133% year-over-year. In our previous quarter's earnings call, I mentioned that we will be laser focused on growing our margin dollars, and we delivered on that with margins growing 3x as fast as revenue growth. Non-GAAP loss from operations as a percentage of net revenues decreased from 4.2% in the fourth quarter of 2020 to 2.2% in this quarter. This brings us another step closer to profitability. We're also pleased to report that our full year revenue for 2021 exceeded the RMB 10 billion milestone for the first time, reaching RMB 12.4 billion with a year-over-year increase of 61%. The market continues to show strong demand for our diverse portfolio of service solutions. Our service revenue for 2021 increased 103% year-over-year, among which B2B service revenue grew 195% year-over-year. Our gross segment profit for 2021 reached RMB 620 million, an increase of 70% year-over-year. It is worth noting that our B2B segment profit increased to 126% year-over-year. As a leading digital player in the healthcare industry, we remain committed to investing in our technology. Expenses in RMB totaled RMB 189.3 million, representing an increase over 106% year-over-year. This enabled the company to build the next generation digital platform, and we are very pleased to be awarded 19 patents in 2021. Our B2B business remains the key driver of revenue growth. For fiscal year 2021, B2B revenue reached RMB 11.9 billion, representing a year-over-year increase of 59%. Gross segment margins have also steadily improved from 3.6% in Q1 to 3.8% in Q2, and 4.4% in Q3, and 5.2% in Q4. We live in an extremely volatile world with enormous uncertainties. The company's primary strategic focus is to grow gross margin and achieve profitability as soon as possible. I'd like to take a few minutes to elaborate on concrete measures in this regard. One, increase product gross margin and grow service revenue. Direct sourcing from pharmaceutical companies has been highly effective in lowering the cost of products that we sell. Thus, we will continue to deepen our relationship with our existing 500+ partners, as well as securing new partnerships. This provides us with a wider drug selection, lower cost, and support to our pharmacy partners to improve their knowledge of products so they can better serve their customers. Our digital platform creates tremendous value by matching downstream demand with upstream supply. Downstream pharmacy customers get a very clear view of all our product offerings, and they can choose the products that best meet their consumers' needs. For pharmaceutical companies, we're able to provide information such as the profile of customers for a certain product, including the location, quantity, and pricing, which is invaluable to our upstream partners since it allows them to make informed decisions on customer habits rather than trial and error. Another lever we can pull to improve our margins is through optimization of our product assortment and structure. When we first started, new players like us had to significantly invest in pricing to acquire customers, which contributed to our thin margins during the initial years. Now that we're serving a majority of the market, we're in a position to balance our portfolio of products with high velocity SKUs, which may have a low margin profile but drive traffic to our site, where those products are often purchased along with other products with higher margin profiles. We currently have over 5,000 SKUs with very healthy margin profiles, and we are working diligently to ensure that these items get on the shelves of the pharmacists that we serve. With a vast network of pharmacies, we're very confident that we will be able to help many smaller pharmaceutical companies in commercializing their products. Not only do we make more profits, but also help the pharmacies to improve their gross margin. Service revenue is also an area that we expect to see continued growth and provide margin-aggressive revenue for the company. In 2021, we have seen growing demand for a number of our service offerings, including growing popularity for one of our digital marketing services. Our service module provides a closed-loop solution for pharmaceutical companies by integrating doctors, pharmacists, medical assistants, patients, and medical representatives onto our internet hospital. The service module also provides online remote consultation, e-prescription, patient education, patient support, and online refill. This enables us to provide customized omni-channel digital marketing solutions for pharmaceutical companies, both through our One Pharmacy platform as well as through our key strategic partners. At present, over 2,000 SKUs utilize our digital marketing solutions, and these products are promoted to numerous pharmacies and their customers through our digital marketing platform. There has been increasing demand amongst our large customer base for supply chain financing solutions, which is another service that we offer and has provided us with a consistent revenue stream. We offer short-term credit lines at attractive interest rates to a selected number of our pharmacy customers and suppliers who keep inventory in our warehouse. This service helps our customers better manage their cash flow while also improving our overall gross margin dollars, which is already in the tens of millions for 2021. There are also a number of other service solutions that have seen an uptick in interest amongst our pharmacy partners, including our Cloud Prescription Service, OneDrug Express O2O service, and our One Health digital franchise service. We will continue to innovate and create more service offerings that add value to our partners, and we expect our service revenue to continue to grow to a size which will positively impact our P&L. Two, improve operational efficiency to increase the technology investment. We are firm believers of using technology to drive efficiency. In 2021, our technology R&D expenses reached RMB 189 million, up by 106% year-over-year. 19 patents were awarded in digital medicine, big data, and intelligent supply chain management areas. In addition to the 19 patents, we also independently developed more than 30 proprietary systems, which empowers ecosystem partners in areas such as intelligent supply chain, SaaS platform building, intelligent sourcing, doctor-patient management, digital marketing, and a price intelligence system. We have won multiple awards, including the National High-Tech Enterprise Award from the Ministry of Science and Technology and the top 10 leaders in new pharmaceutical retail in China from MIMAIT. Powerful supply chain system and platforms are the cornerstone of our business growth. We have expanded the floor space of eight fulfillment centers across China to 228,000 sq m, up by 148% year-over-year. We use algorithms and big data analysts to establish a fast turnover area at each fulfillment center, resulting in much better utilization of warehouse space. We maintain an industry-leading inventory turnover at 28 days, and believe that we still have space for further improvements. Our proprietary price intelligence system, PIS enables us to optimize our pricing dynamically in real time. It allows us to apply our company's pricing strategy to drive optimization algorithms to set the prices for massive number of SKUs. Based on historical and real-time data, these algorithms analyze SKU level demand and the supply correlation, seasonality, competition, promotion events, price elasticity, and regional dependency. Stochastic models are used for optimization. Our Hawkeye is a digital sales team management tool. It kickstarts a day for a sales manager by allocating customized tasks, such as sending out refill reminders to customers, management to see relevant data in real time so that corrective actions can be taken quickly if necessary. Hawkeye has captured the interest of some of our upstream partners who have also started using it as part of their relationship management tool. We have expended significant capital in R&D and improving our technology. While these expenses have caused our expenses to increase, we believe that these investments are necessary and separates us from the traditional players in our industry. In the long term, by investing in technology early and using the tools we have developed to help our business run more efficiently, we'll be able to reach profitability faster and continue to grow. In fact, the investment made in technology is already yielding results, as reflected in the improvement in margins and a continuous narrowing of the operational expenses. Three, innovation. Explore new business models. In the B2B segment, we launched the One Health initiative to more than 10,000 pharmacies through a digital franchise model, becoming the first in the industry with an S2B2C model. All participating pharmacies can better manage their selection, procurement, inventory, and drug distribution through our digital SaaS services, including smart sourcing, O2O, and a CRM. This initiative has helped the 10,000 member stores to provide CRM services for more than 9 million consumers. The B2C segment generated a revenue of RMB 522 million and a gross profit of RMB 109 million. We are one of the few medical tech companies in China that have established an internet hospital license. To serve our CM patients in a more professional and timely manner, we use our own proprietary system to connect with over 20,000 professional doctors, so they can offer online services to patients. Leveraging the One Clinic's digital technology and a chronic disease and a cancer patient management capabilities, we have established collaboration with a number of well-known pharmaceutical companies such as Eli Lilly, Sanofi, Bayer, and Innovent Biologics, and have substantially improved the accessibility of drugs such as Taltz, RINVOQ, DUPIXENT, XELJANZ, Adalimumab. It is worth mentioning that patients in remote areas of the country can get their refill done simply through our online platform and receive their medication at their doorstep instead of traveling to big cities to get refills in the past. We firmly believe in the value we could bring to the ecosystem by connecting patients with doctors digitally, as we are able to offer a whole suite of out-of-hospital management services, which consists of online consultation, e-prescription, patient management, and drug distribution. One can appreciate how patients with chronic conditions can benefit from our platform, especially those who live in rural areas in China. Now let me spend a moment to talk about ESG. Social responsibility is always part of 111's core value system. So far, we have provided free online consultation services for more than 500,000 users during COVID-19 pandemic. In addition, we partnered with hospitals in underserved areas across the country to help people with limited access to healthcare services. We also continue to donate PPEs to areas that are experiencing COVID-19 outbreaks. In addition, we have proactively advocated the environmental philosophy of green lifestyles. We have realized paperless operations in goods arrival, stocking, picking, stock checking, and other processes in the fulfillment centers. At the same time, we have substantially reduced the use of non-degradable consumables in the transportation and packaging process. In the future, we will continue to endeavor to fulfill our social responsibilities as we have always done in the past, actively participating in the campaign of the building of Healthy China. Looking back at the previous earnings calls, our strategy has been very consistent. It's a three-step strategy. First, build the infrastructure and ecosystem. Second, build scale. Third, grow margin and profit. We believe this is the right strategic steps to take. Although we began the business with thin margins during the first few years, we used our resources to aggressively acquire customers and build a solid customer base. Once we have achieved a broad customer base, we were able to deliver triple-digit revenue growth for a few years while building scale. Now we have entered stage three, and we're well on our path to reach profitability in the foreseeable future. We're getting more and more excited by the prospect of our business. Achieving profitability is not our end goal. It's only the beginning. Our record so far proves our ability to execute our strategies, and there are many new initiatives internally, and we look forward to keeping you updated on how we unlock the true value of this business. Looking into the future, we believe the government will continue to support the healthcare industry. The national strategy of strengthening the Digital China infrastructure and the policies of the Fourteenth Five-Year Plan and the goals for 2035 provided us with excellent regulatory tailwinds. We're excited that we can play an important role of speeding up the digital transformation of the healthcare industry. In 2022, we will double down our efforts in executing our strategy of improving gross margin and operational efficiency. By consolidating our strength in supply chain and technology, we will help our upstream and downstream partners press ahead with digital transformation, hence benefiting consumers. Our goal is to ultimately achieve profitability as soon as possible and create value for our shareholders and society at large. We wish to thank all the investors who have supported us all along. I will hand the call to our CFO, Mr. Luke Chen, to walk through our financial results. Thanks. Thank you, Junling, and good morning and evening, everyone. I want to begin by thanking all of our colleagues for their resilience and hard work over fiscal 2021, as we have navigated a challenging environment for making necessary changes to improve our operations and cost efficiency while maintaining our competitive edge. We remain resolute in our focus to achieve quarterly breakeven at non-GAAP operating income level in 2022 as soon as possible. Moving to the financials. My prepared remarks will focus on a few key business and financial highlights. You can refer to the details of the fourth quarter and the fiscal year 2021 results from slide 18- 21 in section three of our presentation. Again, all comparisons are year-over-year, and all numbers are in RMB unless otherwise stated. Let's start with the fourth quarter results. Total net revenues for the quarter grew 31% to RMB 3.5 billion, which is within our guidance range. We are pleased to report that our gross segment profit for the quarter has grown at 98%, which is three times as faster as the revenue grows. Strong top line growth for the quarter was mainly attributable to our B2B segment revenue growth at 35% to RMB 3.3 billion. The gross segment profit for B2B segment has increased by 133%, with gross segment margin up from 3% to 5.2%, which reflected our ability to rapidly expand our business scale while steadily improve our margin. Our B2C segment revenue decreased 23% to RMB 109 million, with gross segment margin improved from 17.5% to 24.8%. Total operating expenses for the quarter were up 27.9% to RMB 357 million. As a percentage of net revenue, total operating expenses for the quarter was down to 8.9% from 9.4% as we continue to enhance our operating leverage and optimize our operational efficiency. Fulfillment expenses as a percentage of net revenue for the quarter was 3%, up from 2.6% in the same quarter last year. Sales and marketing expenses as a percentage of net revenue for the quarter was 3.6%, down from 4.5% in the same quarter of last year. Excluding the share-based compensation expenses, general administration expenses as a percentage of net revenue accounted for 1%, down from 1.2% in the same quarter of last year. Technology expenses accounted for 0.9% of net revenue, down from 1.2% in the same quarter of last year. As a result, net GAAP loss from operations narrowed to RMB 77 million, compared to RMB 112 million in the same quarter of last year. As a percentage of net revenue, net GAAP loss from operations decreased to 2.2% in the quarter from 4.2% in the same quarter of last year. Net loss attributable to ordinary shareholders was RMB 83.5 million, compared to RMB 98.2 million in the same quarter of last year. As a percentage of net revenue, net loss attributable to ordinary shareholders decreased to 2.4% in the quarter from 3.7% in the same quarter of last year. As for fiscal full year 2021, I would like to run through a few highlights. Again, you can refer to the details in our deck and earnings release. Our comparisons are to full year 2020. Net revenues were RMB 12.4 billion, up 52% from RMB 8.2 billion. Our B2B segment revenue grew 58.5% to RMB 11.9 billion from RMB 7.5 billion due to the strong growth attributed from existing customers and the new customers in our network for 2021. Our B2C segment revenue decreased 24% to RMB 522 million. Our B2B gross segment margin was 4.3%, up from 3%, while our B2C segment was 20.9%, up from 20.1%. Overall, our gross segment profit grew by 70% to RMB 621 million, and the combined gross segment margin was 5%, up from 4.5% a year ago. For full year 2021, total operating expenses were up 51% to RMB 1.3 billion. As a percentage of net revenue, total operating expenses was 10.2%, same as last year. Fulfillment expenses accounted for 2.9% of net revenues this year as compared to 2.8% the last year. We continue to expand the capacity of fulfillment centers to support the future business growth. Selling and marketing expenses as a percentage of net revenues reduced to 4.1% this year from 4.9% last year. Excluding the share-based compensation expenses, general and administrative expenses as a percentage of net revenue accounted for 1.1% this year as compared to 1.3% last year. Technology expenses accounted for 1.5% of net revenue this year as compared to 1.1% last year, representing an increase of 106%, mainly due to our increased investment in technology solutions and infrastructure. As a percentage of net revenues, non-GAAP loss from operations decreased to 2.4% this year from 4.8% last year. Non-GAAP net loss attributable to ordinary shareholders as a percentage of net revenue decreased to 4.2% in the quarter from 4.6% in the same quarter of last year. The increase in amount was mainly caused by the accretion for probable redemption of redeemable non-controlling interest in the future. Please refer to slide 22-27 of the appendix section for selected financial statements. A quick note, our cash position as of December 31st, 2021, we had cash and cash equivalents, restricted cash and short-term investment of RMB 943 million. This concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Please stand by while we compile the question and answer roster. Once again, that's star one for questions. Our first question comes from the line of Zoe Bian from Citi. Please ask your question. Thank you, management, for taking my question. I'm Zoe Bian from Citi. I have three questions. The first is, could you share the drivers of gross margin increase for Q2 2021? And, what kind of GM level would you expect in 2022? And the second question is, we are very glad to hear 111 would achieve quarterly non-GAAP operating profit breakeven this year, and what's your growth outlook in 2022? The third one is that, SEC named the five Chinese companies under the Holding Foreign Companies Accountable Act. What kind of actions would you take in case of delisting risk? Thank you. Zoe, this is Harvey. I'll take the first one, regarding gross margin. In 2021, our year-over-year gross margin growth has reached 126%, and especially in Q4. The margin growth rate is 133% YOY, which is 3.8 x our revenue growth rate. In our previous quarter's earnings call, we did mention that we will be very concentrating in growing our margin dollars, and we deliver that with B2B margin growing 3.8x as fast as our revenue grows. First of all, direct sourcing from pharmaceutical companies has been highly effective in lowering the cost of the product. We currently have direct sourcing from 515 international and domestic pharmaceutical companies. This provides us with a much wider selection and lower cost to enable our downstream pharmacies to better serve their customers. Secondly, our digital platform creates tremendous value by matching downstream demand with upstream supply. For our pharmaceutical partners, we are able to provide information varying from our 385,000 pharmacies, such as Like the profile of customers for a certain drug, including location, the quantity, pricing, which is invaluable to our upstream pharmaceutical companies to help them make decisions based on customer habits and needs. Certainly a very important driver on our margin improvement is through optimization of our product assortment and structure. With our current volume, which has exceeded RMB 10 billion, we are in a position to balance our portfolio of products with high velocity SKUs, low traffic driver, which may have low margin profile. But together with other products with higher margin profile, we currently have over 5,000 SKUs with very healthy margin profile. Not only do we make more profit from these SKUs, but also they will help our pharmacy customers to improve their gross margin. Last but not least, our technology and tools also contribute a lot to improve efficiency of our margin management. For example, our price intelligence system, our SSS smart sourcing system, smart replenishment system, et cetera. Moving forward, we definitely can see our margin growth rate in the next quarter should be much faster than our revenue growth rate. Our B2B business should be getting more and more healthy. Thank you. Zoe, thank you for your questions. I'll probably take your second and third question. With the growth outlook, our view is very positive for our business and we would definitely grow faster than the market growth. One thing I want to assure you is that our margin is gonna grow even faster. With regard to, you know, the third question about the, I guess, the recent very volatile stock price movement of ADRs, you know, I think it's very encouraging starting from yesterday, at least there's quite some positive development. Even the Chinese Vice Premier Liu He, you know, expressed during his finance committee meeting that the government will continue to support the Chinese companies to continue to list overseas and quite a number of other encouraging messages. You know, those are the things that are beyond our control. What I want to relay here is that as a company, we will focus on growing our business, and we are gonna focus on executing our strategy. We're gonna focus on growing our enterprise value. In the meantime, based on the last couple of days' developments, we're hopeful that both the Chinese and American regulatory bodies can find some middle ground to work together around the PCAOB issue. Thank you. Thanks a lot, and thank you. I look forward to this year's operation. Thank you. Thank you. Our next question comes from the line of Sibo Feng from CICC. Please ask your question. Hi, this is Sibo from CICC, and thank you for taking my questions, and congratulations on the company progress. Well, I have two questions, actually. My first question is about the financials. While we see that the company's gross margin continue to increase over the past four quarters, would you please share some more insights on the lift of gross margin? The other question is about business development. In 2021, the company formed partnerships with over 500 global and domestic pharmaceutical companies. We also know that the company is exploring a new specialized international hospital model with a number of pharmaceutical names. Could you please share some more colors on this? In particular, what value would this cooperation bring to the company or even the industry? Thank you. Okay, Sibo. This is Harvey. Thank you for your question. I'll again talk about margin, especially our gross margin. I think, yes, we are seeing a very, you know, good trend in our margin improvement. Last quarter, the margin worldwide growth rate is 133%. The entire year of 2021, the margin growth rate is 126%. There are a couple of initiatives regarding, you know, we have executed in last year to improve our margin, including from supply chain side, the direct sourcing. Direct sourcing from those pharmaceutical companies. Currently we have 515 international and domestic pharmaceutical companies we direct source from. Also, our product assortment changed a lot in last year. You know, in previous years when we were still focusing on acquiring more customers, you know, our platform, the majority of our sales coming from those very high velocity SKUs. Those, you know, SKUs who brought us traffic, who brought those pharmacies onto our platform. But now with our current volume, about $2 billion, you know, we have changed our assortment strategy. We are bringing more and more SKUs with higher margin profile. Currently we have over 5,000 SKUs with a very healthy margin profile. And those SKUs, we can call it a high margin SKUs for us. They are also high margin SKUs for our pharmacy customers. And also we have, you can see from our P&L, we have a very good increase in our services revenue, which also bring us, you know, additional profit. For the services side, certainly, we provide quite a number of services, not only to pharmaceutical companies, but also, from last year, we provide services to our downstream customers and those pharmacies. Also, our One Health digital franchise service, this is a big project which also bring us, services revenue. All together with all these initiatives, we are seeing a very good margin improvement trend. We believe in the coming next quarters in 2022, we will continue the momentum of our margin improvement and get our business more and more healthy. Thank you, Sibo. Let me take the second question. We are so pleased to see that we have earned the pharmaceutical companies' trust. We demonstrate our values. The top pharma companies trust our compliance, trust our transparent corporate governance, our digital platform and our supply chain capabilities and coverage. This is the reason that we formed over 500, in fact, 515 strategic partnerships or direct sourcing partnerships with the pharmaceutical companies last year. Let me specifically mention about the specialized Internet hospital we call. This is idea, it's our innovation we initiated about two years ago. We started with Eli Lilly on diabetes. We collaboratively formed a specialized Internet hospital for diabetes patients. We built a patient management platform. On this platform, we have doctors, pharmacists, nutritionist, and doctor assistants. Together we serve patients. In fact, more than 60% of patients are from you know, third tier to sixth tier cities. This idea demonstrate tremendous values. First of all, we can cover patients from the remote areas, and they have access to you know, the innovative drugs. They have access to specialized expertise. We have very high customer loyalty stickiness. At the same time, we have seen that their DOT extended from four months to 5.5 months, which really provided value to the pharmaceutical companies. Starting from there, with Eli Lilly, we formed specialized hospitals for psoriasis, then for breast cancer. We, you know, through the word of mouth, through our capabilities, we started working with Novartis, Pfizer, Bayer, Sanofi, Celgene, and with many other disease types. This really only two years of effort and we have reached tremendous success. Now we have you know working with several others you know for more and more diseases. Certainly the value are both for our partners and for us. Okay, that's the end of my answer. Okay. Okay, that's very clear and helpful. Congratulations again on the company progress. Thank you. Thank you. Our next question comes from Dennis Lau from Cornerstone Investment. Please ask your question. Thank you. This is Dennis Lau from Cornerstone. Congratulations for your huge progress last year. I have three questions. The first one is, how have you executed your business strategies over the past few years? I can ask one by one, so I can take your answers right now. Thank you. Sure. Thank you, Dennis. I think in my script, I briefly talked about our strategy, you know. That there is a thread also through all the earnings calls we had over the last three years. It's a three-step strategy. It's pretty simple, you know. First of all, we wanted to build the infrastructure and the ecosystem. After we accomplish that, we'll focus on grow the scale. You know, with scale, we'll be able to get onto stage three, which is to grow the margin and profit. You know, we have absolutely executed and delivered on the strategies and the financial results is very telling already. You know, today, I'm very pleased to report that we have a pretty clear line of sight of profitability in the near future. Thank you. You can move on to the next question. Oh, thank you. Could you elaborate more on your current cash reserves? Dennis, is the question about cash position? Yes, the current cash reserves. Okay. Sure. Yeah, as we disclosed, as of end of December 2021, we had cash and cash equivalents and short-term investments amounting to RMB 943 million. If you look at our cash flow statement, actually in Q4, we already achieved overall cash positive. Now as we are close to breakeven, we believe that our cash reserve is sufficient to support our business expansion. Now, if you're looking closely at the working capital we have managed, we manage very closely. Our inventory days around like 28-29 days and accounts payable 42-45 days. This also gives us the extra cash generated. We are quite comfortable that the cash reserve we hold on hand is sufficient to support our business expansion. Thank you. Oh, thank you. That's very good news. The last question is, what impact will China's recent policy have on the medical digitization, and what opportunities will this bring to the industry generally and your company specifically in 2022? Thank you. Yeah, I think I'll take this question. There are a ton of new policies over the last few years. To name a few, you know, I spoke about the industrial internet, you know. Like in the Two Sessions which just ended, it is reiterated the government is committed to industrial internet. They also emphasized on building the digital economy and develop the digital economy. You know, another one is the Healthy China 2030. In particular, they mentioned to create equitable access of healthcare services for rural communities. You know, those policies, plus many others, which I won't have enough time to elaborate on during this call, it provided excellent tailwinds for our company. Regardless, you know, the industrial internet, the digital economy or better access of healthcare services for rural communities, it's kind of designed for One Medical's business model. Because, you know, many parts of the value chain can be reconstructed by leveraging our digital technology, because our digital platform uniquely delivers a holistic platform that integrates medicine with the healthcare services. It benefits all parties within the overall ecosystem. You know, from, let's say, the pharmaceutical companies, the doctors, the healthcare providers, and of course the patients, right? Our platform offers a cohesive online and offline solution, which improves efficiency compared to traditional players. You know, today we have such a vast, you know, network of pharmacies on our network. We have more than 500 direct sourcing relationships. Of course, the indirect relationships, you know, are in the thousands. You know, obviously, we can actually bridge the two to really work on our supply demand platform. Between our online pharmacy and the network of pharmacies, you know, we're able to deliver, you know, products and the services to tens of millions of patients, of consumers nationwide. Thank you. Thank you, and best wishes in 2022. Thank you. Thank you. All right. Thank you. Next question comes from Victor Young. Please ask your question. Good evening and good morning. First of all, congratulations to you all for the great stride forward. I have three questions respecting the following three aspects. First is about narrowing down the loss. Second is about the virtual pharmacy network. The third question is about supply chain. My first question is, as now the non-GAAP net loss has significantly narrowed, what are the main factors, and how do you plan to sustain this trend? Hi, Victor. Let me answer these questions. Yes, we are very pleased to see that we are one step closer to breakeven. The non-GAAP loss from operations for quarter four narrowed to 2.2%, which attributed to our continuous margin improvement. As you can see, our margin improved from 3.9% quarter four last year to 4.9% quarter four this year. We believe there's still room to improve. We also taking actions to improve our operation and cost efficiency. When you compare all the expenses from last year to this year, you see the leverage as well as cost savings. As Jimmy and Harvey just explained, we will continue to grow our business in a healthy way, which is profitable growth. We believe the trend will continue, and we aim to achieve quarterly breakeven at operation level ASAP in 2022. Okay. Thank you for the answer. My question, my second question is, about the virtual pharmacy network. As 111, Inc. is covering over 70% of the number of pharmacies in China, in addition to the current drug procurement services, what does the company plan to exploit this large network? Yes. I think it's a great question, Victor. You know, first of all, it is critical to have solid base of customers. You know, that is why we were relentless during the first few years to bring as many pharmacies as possible onto our platform. With this broad customer base, in addition to the products we sell to them, there are numerous ways to extract value. We design our business model to make those pharmacies successful, right? Currently we have a suite of service offerings to them, which all designed to create more value so they can better serve their consumers. You know, for instance, we have a Cloud Prescription Service. We have the One Drug Express O2O service, and we also have the health digital franchise service. The One Health digital franchise service, which I mentioned in our last earnings call, is doing very well. You know, before we knew it, our supply chain finance is already creating tens of millions RMB of income for us while helping those pharmacists to solve their cash flow challenges. You know, I won't be able to list all those things we are doing, but I can assure you that there'll be many more of similar type of innovations in the future. Thank you. Thank you for the answer. I think it's very promising to make profit from this network. Here it goes to my third question. I noticed that the company's supply chain capability is at the leading edge in the industry. How do you propose to protect this barrier and exert this competitive edge to a further step? Okay. Let me take that question. You know, smart supply chain has always been our core competence. As you can see that, we invested heavily in it. Just from our earnings report, we almost doubled our fulfillment center capacity and throughput last year alone. We're also in the process improving our fulfillment center efficiency through process improvement. For example, fast moving zones, transshipment of goods, and more importantly, while in the processing, advancing our supply chain management systems. For example, we use optimization models and algorithms based on real-time data. We optimize selection, optimize our inventory, store storage space, optimize our price, fulfillment center operations, including all the picking, packing, sorting, essentially all the processes. We believe that we are enhancing our capabilities. As Jimmy mentioned that our three steps, you know, one, build our infrastructure. We are, you know, investing more on infrastructure and we are also investing a lot in the capabilities based on the infrastructure. Okay. Thank you. Thank you for the answer. Thank you. Thank you. Our next question comes from Marcus Shu. Please ask your question. Hello, everyone. This is Marcus. I'm a individual investor of the firm and congrats on your result. My only one question is about monetization. Seeing the continued growth of the service revenue, will service revenue be an important source of the income for the firm going forward? And do you plan to create more revenue-generating products? If so, could you share your plan with us? Thanks. Okay. Yeah, this is a very good question. Look at the service in 2021, we have seen a growing demand for a number of our service offerings. For example, our service module provides a closed loop solution for pharmaceutical company by integrating doctors, pharmacists, medical assistants, patients and medical representatives onto our internet hospital. Our services module also provides online remote consultation, especially during this kind of COVID-19 situation, and also provide e-prescription services and patient education for pharmaceutical companies, patient support, and online refill. This enables us to provide a customized omni-channel digital marketing solutions for pharmaceutical companies, both through our One Pharmacy platform as well as through our key strategic partners. Currently, we have over 2,000 SKUs utilize our digital marketing solutions. These products are promoted to our pharmacy customers across the country and also promoted to their consumer customers through our digital marketing platform. There are also a number of other service solutions that have been used among our pharmacy customers, including the Cloud Prescription Service, our One Drug Express O2O service, and our One Health franchise service, the digital franchise service. We will continue to create and innovate more service offerings that add value for our upstream customer, for our downstream partners, and we expect our services revenue to continue to grow to a size that will positively impact our P&L. Thank you. Thanks for sharing. Thank you. Our next question comes from Li Li. Please ask your question. Hi. Good evening and morning. This is Li Li. Thank you for taking my questions. First let me say I'm very grateful to hear such promising progress, especially under current domestic and international situation. I have two questions today. The first one, I noticed that over the past year, the company has doubled its technology investment and its pace, and its patents have also increased by over a dozen. What areas of business do these patents focus on, and what entry barriers are we trying to build here? Thank you. Let me take that question. As you can see, our company's mission is to digitally connecting patients with medicine and medical services. We believe that technology is the core of our business. The key driver of internet health industry is technology. Certainly we have internet technology, cloud services, and data analytics. We have made a tremendous investment. Last year alone, you know, we more than doubled our technology spending. We build a lot of systems, more than 30 systems. We've earned 19 patents. These patents surrounding, for example, digital patient management platforms, supply chain, you know, we call smart supply chain. You know, within that we have lots of systems, managing the inventory, managing the selection, managing the warehouse processes. We also have systems, intelligent system to manage our sales reps, sales teams. We have systems to manage the third party logistics. We build a lot of technology. We believe that this technology allow us to use the massive data to have a clear understanding of our customer profile and behavior. We have also a clear understanding of competition and the market trend. Using all those intelligence, we can make sound decisions. Okay. Thank you. I think, it's very important, the hardcore technology. My second question is, as COVID-19 continues, especially the latest outbreak, throughout China, how does it affect company? How do you plan to deal with it? Thank you. I'll take this question regarding the COVID-19. We know that surge in this month, we are I think, especially, even for us in Shanghai, you know, are heavily affected by the disease. I think, overall, we can see the demand for our downstream customers are still there. We can expect, you know, although there are some restrictions, you know, especially in logistics side, but we can still see a very strong demand. Especially the good news for us is that COVID-19 helped us to educate our pharmacy customer as well as those consumer customers to go online for drugs, for medical consultation, and also help the pharmaceutical companies for them to educate them that they can utilize our online digital marketing tools to promote their new products, and especially to those lower tier cities. I think, yeah, the COVID-19 brought us a lot of trouble, but I think it's also create a big opportunity for us. Of course, we hope, you know, it will end up soon. I believe for us and for our upstream and downstream partners, we have already managed to find out a solution to promote the product, to promote the sales through the online tools, through our online services. We believe that it will help us to shorten the period to educate, shorten the period of online expansion. Overall, it should be pros and cons, but we do take the advantage of all these online tools. For example, for our digital franchise, we provide CRM tool to our digital franchise pharmacies. Those pharmacies they can utilize this tool to reach their customer even under current situation, and to serve their customer compared to those traditional pharmacies. We are offering, you know, we enable them and help them to get more business. I think that is the advantage we have seen. Thank you. Okay. Great to hear that. I think the company is really doing a valuable contribution to the society. That's all. Thank you. Right. Thank you. There are no further questions at this time. I'll now turn the call back to Monica Mu, IR Director, for closing remarks. Thank you, operator. In closing, on behalf of the entire 111 management team, we'd like to thank you for your interest and participation in today's call. If you require any further information or have any interest in visiting us in Shanghai, China, please let us know. Thank you for joining us today. This concludes the call. Thank you. That does conclude our conference for today. Thank you for participating. You may all disconnect.