Hello everyone, and thank you for joining 111's conference call today. On the call today from the company are Dr. Gang Yu, Co-founder and Executive Chairman; Mr. Junling Liu, Co-founder, Chairman, and CEO; Mr. Luke Chen, CFO of 111's major subsidiary; and Mr. Harvey Wang, COO. As a reminder, today's conference call is being broadcast live via webcast. The company's earnings press release was distributed earlier today, and along with the earnings presentation, are available on the company's IR website. Before the conference call gets 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 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 comparisons refer to year-over-year comparisons unless otherwise stated. Please also refer to the earnings press release for detailed information of the comparative financial performance on a year-over-year basis. With that, I will turn the call over to 111's CEO, Mr. Junling Liu. Good morning and good evening, everyone. Thank you for joining the fourth quarter and the full year 2024 earnings call. The information we'll be discussing here is also available in the slides posted earlier today on the company's website. I encourage everyone to download the presentation as well as the earnings report from our investor relations website at ir.111.com.cn. 2024 was a year of significant challenges stemming from the macroeconomic pressures and ongoing healthcare reforms. These headwinds have impacted the broader healthcare industry. Yet, we delivered our first-ever operational profitability and positive operating cash flow, an important milestone in our company's history. This solid performance is a direct result of our diligent execution of strategic initiatives to boost operational efficiency and cement us as one of the most efficient healthcare platform operators in the sector. It also underscores our agility and resilience in navigating unfavorable and complex market conditions. Beyond financial performance, we also advanced our technologies and strengthened our supply chain infrastructure, laying the foundation for long-term growth. These improvements position us to better meet future demand with greater speed and lower costs, ultimately driving value across the industry. Next, I will provide a deeper look into the current industry landscape, outline our outlook and opportunities, and highlight key financial achievements. I will also share updates on our advancements in technology and supply chain infrastructure, as well as the recent industry recognition. Finally, I will discuss our growth strategies for navigating this challenging environment before handing over to our CFO, Mr. Luke Chen, for a detailed analysis of our financial performance. Turning to the macroeconomic landscape, economic uncertainties in China have led to increasingly cautious consumer behavior, slowing discretionary spending, and significantly dampening retail sales growth. The healthcare sector is no exception. According to the National Bureau of Statistics, China just saw a 3.6% year-over-year growth in 2024 per capita healthcare expenditure. This represents a sharp decline of 12.4 percentage points from the 16% growth in the prior year and a lag behind the 5% GDP growth during the same period. At the same time, downstream pharmacies continue to face pressure from ongoing healthcare reforms, including adjustments to individual medical accounts, phased rollout of coordinated outpatient benefits, and heightened regulatory oversight. These reforms aim to build a more sustainable and efficient healthcare system, ultimately benefiting well-managed pharmacy chains with strong product offerings and service capabilities. However, the transition period presents short-term operational challenges. Market growth has not kept pace. As a result, China's total retail pharmacy sales dropped by 2.2% in 2024, according to Zhongkang data. With more stores competing in a stagnant market, per-store revenues have fallen, intensifying industry competition. Newer stores, still in their growth phase, face additional pressure weighing on short-term profitability. Large pharmacy chains are already feeling the impact. For instance, Jianzhijia or JZJ Chain Drug Store expect its net profit attributable to shareholders, excluding non-recurring gains, analysis to decline by up to 69% in 2024, followed by 66% and a 45% decline for Yixint ang or YXT Health and Shanghai DEYAOYE or Shanghai No. one Pharmacy Co., respectively. Independent pharmacies with limited resources face even greater financial strain. Given this challenging backdrop, digital transformation is no longer optional. It is essential. Pharmacies must cope with weaker consumer sentiment, slower healthcare spending, and shifting patient behaviors while managing cost pressure and operational inefficiencies. The key to survival and growth lies in innovation, rethinking service delivery, optimizing product categories, enhancing client management, and improving operational coordination across stores. This is where digitization and AI-driven solutions come in. As a pioneer in the digital revolution, we have integrated leading technologies across our operations, from sales and procurement to customer demand identification, inventory optimization, and warehouse allocation. Our fully digitized operating system also empowers our upstream and downstream partners to reduce costs, improve efficiency, and enhance service quality. Beyond the necessity of digital transformation, we remain highly confident in China's long-term healthcare market, supported by two key structural trends. First, the ongoing anti-corruption campaign in the healthcare sector is driving greater transparency in hospital procurement, which is anticipated to expedite the shift of drug sales and prescriptions to retail pharmacies. This transition represents a RMB 1,000,000,000,000 out of the hospital pharmaceutical distribution market that could eventually account for nearly half of the entire pharmaceutical distribution sector. In the short term, however, policy execution remains uneven across provinces and cities, with uncertainties and delays in medical reform refinement and implementation. In the 2025 Government Work Report, China called for promoting the coordinated development and governance of healthcare, medical insurance, and the pharmaceutical sector. It aims to steadily advance provincial-level coordination of basic medical insurance while improving its financing and benefit adjustment mechanisms. Once these adjustments are fully in place, particularly with on-time payments from government's national medical insurance, pharmacy chains will be among the primary beneficiaries. As a trusted partner to chain pharmacies, we're well-positioned to capitalize on this growth. With an extensive and price-attractive product portfolio and a relentless focus on customer experience, we strive to strengthen our leadership and expand market share in this dynamic landscape. Second, China's rapid aging population will fuel sustained growth in healthcare consumption while the government encourages the silver economy. Despite recent fluctuations, China's healthcare expenditure as a percentage of GDP remains significantly lower than that of developed countries, indicating ample room for expansion. As healthcare needs continue to rise, we believe the overall trajectory of the pharmaceutical and healthcare market will remain strong over the long term. Turning to our financial highlights, our rigorous and disciplined approach to raising operational efficiency delivered meaningful improvements in Q4. Despite ongoing short-term headwinds, we effectively reduced total operating expenses by half year-over-year, bringing them to just 5.5% of revenues, down 470 basis points from the prior year. While fulfillment expenses rose slightly as a percentage of revenues, primarily due to a one-time warehouse relocation fee, we drove reductions across multiple cost categories. Selling expenses declined by 220 basis points to 2% of net revenues from 4.2% a year ago, while the general and administrative expense ratio fell by 190 basis points, and the technology expense ratio decreased by 80 basis points. Excluding share-based compensation, our operating expense ratio improved by 130 basis points to a record low of 5.3%. For the full year of 2024, we achieved a yearly profit from operations for the first time, with income from operations reaching RMB 2.1 million, representing a sharp turnaround from an operational loss of RMB 350.1 million in 2023. Our bottom line improved by RMB 332.7 million, or 94.1% from a year ago. On a non-GAAP basis, income from operations was RMB 22.3 million, compared to the RMB 123.9 million loss a year earlier. Non-GAAP bottom line improved by RMB 126.6 million, or 99.5% from 2023. Additionally, we generated yearly positive operating cash flow of RMB 263 million for the first time. These milestones highlight the efficiency of our strategic initiatives and the resilience of our business model. In 2024, we reduced operating expenses by 31% year-over-year, lowering them to 5.7% of revenues, down 230 basis points from 8% in 2023. While fulfillment expenses remained largely unchanged as a percent of revenues, the general and administrative expense ratio declined 100 basis points to 0.5%. Selling expenses fell to 2.2% of revenues, compared to 3% in the prior year, while technology expenses dropped to 0.5% of revenues from 0.8% a year earlier. Excluding share-based compensation, operating expenses as a percentage of revenues decreased 90 basis points to 5.6%. Our high operational efficiency was driven by strategic investments in infrastructure and optimized personnel arrangements. By prioritizing sustained growth, we have continuously enhanced our industry-leading digital capabilities for operations, marketing, supplier empowerment, and supply chain. This ensures that our technology-driven efficiencies remain a key competitive advantage. In Q4, our advanced digital infrastructure contributed to further reductions in technology and staffing expenses, reinforcing our ability to adapt to evolving market conditions while positioning us for future opportunities. Although our revenues are smaller than some more established players, our operational efficiency is a key differentiator. As one of the most efficient healthcare e-commerce platforms, we remain committed to driving further cost reductions and enhancing profitability through scalability and refined execution. This unwavering focus on leveraging technology to drive operational excellence across various aspects is a cornerstone of our strategy. The savings generated from our continuous optimizations will bolster our financial flexibility, allowing us to strategically allocate resources and reinvest in tech advancements, business growth, and customer experiences at the right moment. From a technological standpoint, we have been strengthening our digital capabilities by investing in system development, advanced models, algorithms, and data applications. These efforts are designed to fortify our core competitiveness in the digital landscape. As a result, we have made further strides in leveraging digital and AI- technologies. First, powered by our proprietary intelligent JVP platform and inventory sharing technology, we have achieved foundational system-level integration with upstream partners to establish a unique decentralized inventory network that enhances stock volume and availability. This development, enabled by smart demand forecasting algorithms and an advanced inventory management system, has successfully expanded platform accessible SKUs by 33,000 and inventory availability by RMB 290 million in 2024. By strengthening our supplier capability, we are not only optimizing efficiency but also ensuring real-time elastic response capabilities to meet customer demand. Second, we have optimized our marketing strategies to stimulate demand and build intelligent operational systems to support key events by leveraging cutting-edge technology. During our flash sales event from November to December, we utilized advanced data analytics and AI-driven insights to fine-tune discount mechanisms or implement necessary technology upgrades for our operational system nearly every week. These tech-driven efforts drove user retention and higher transaction volumes. The results speak for themselves. Gross merchandise volume, or GMV, in December increased by 17% from the prior month, while gross profit grew by 8%. Notably, average revenue per user, or ARPU, surged by 18%, and average revenue per order, or ARPU, rose by 14%. These results underscore the strategic value of our technology investments and effectiveness of our precision-targeted promotions and a tech-enabled intelligent platform. Finally, 2025 marks a pivotal year for AI technology development in China and the world. As an industry leader at the forefront of technological innovation, we have made AI a key focus in advancing our capabilities, and it plays a critical role in driving our intelligent demand analysis, optimizing supply chains, and enhancing market responsiveness. For example, by integrating technology advancements with deep business collaboration, our AI-powered Bouguin Catalog can better utilize procurement data from our operations and thousands of partners' pharmacies to identify market trends, analyze consumer behavior shifts, and update demand lists more precisely. We assigned greater weight to high-demand products in the assortment strategy while giving regional attention to long-tail goods to meet specific demands. On the technology front, we improved forecasting accuracy from 71% - 82%. As a result, the Bouguin Catalog introduced 6,598 new products in 2024, contributing over RMB 905 million in GMV. The platform-wide stockout rate dropped from 4.9% - 2.4%, setting an industry benchmark for supply chain efficiency. We also re-engineered our data pipeline, reducing demand list generation time from 5 hours to just 30 minutes, a tenfold efficiency boost. By prioritizing precision forecasting plus real-time response, we have established a model to demonstrate smart integration of cost reduction, operational efficiency, business growth, and ecosystem synergy in the healthcare e-commerce industry. Beyond technology, we are leading supply chain management with expanded infrastructure and continual innovations in warehousing and order delivery for enhanced efficiency, cost reductions, ensuring high-quality services. Next, I'd like to move to new achievements made. The initiation and expansion of the Quintel Network is one of the most important milestones achieved in 2024. It's designed to streamline logistics services while lowering costs both internally and externally. This advanced cross-fulfillment center transshipment model has established an integrated, highly efficient logistics network connecting our five major superhubs across East, Central, South, North, and Southwest China. By incorporating first-mile and last-mile services, we are heading towards a comprehensive Quintel national network with seamless end-to-end supply chain control. In Q4, we expanded last-mile delivery coverage to additional metropolitan areas, including Wuhan, Guangzhou, Chongqing, and Tianjin. With 28 transportation routes now in operation, our network continues to strengthen this reach. Our ability to execute at scale is reflected in our growing external customer base, which increased by 17 in Q4, a 20% rise from the previous quarter. Operationally, we have also achieved significant improvements for the full year 2024. The order damage rate dropped by 56%, while average delivery time improved by nearly a full day. Financially, the Quintel Network generated RMB 7.1 million in total gains in 2024, including cost savings. In the future, we plan to integrate fulfillment centers under cooperation into the network, further enhancing our distribution infrastructure and logistics efficiency. Moreover, in 2024, negotiations with key logistics partners led to a 5% reduction in JD Logistics delivery fees and a total savings of RMB 1.22 million from SF Express and ZTO. In addition, through rent negotiations and strategic warehouse relocations, we achieved RMB 8.63 million in annual cost savings, including one-time relocation expenses. These endeavors, combined with improvements in warehouse labor efficiency and packaging optimization, resulted in a 4.9% year-over-year reduction in fulfillment costs to RMB 381 million in 2024. Furthermore, to enhance our supply and distribution capabilities and align with our strategy for the nationwide Quintel Network, we have expanded our supply chain infrastructure with seven new fulfillment centers going online in Q4. These additions include centers in Guangzhou, Wuhan, Shijiazhuang, Jinan, Chongqing, Xinjiang, and Hunan. The new centers will reduce delivery times for local customers while expanding our national network to a total of 18 fulfillment centers. This will enable us to deliver to over 300 major cities within 24 hours and nationwide within 72 hours. Our rapid fulfillment center expansion is a testament to the effectiveness of our current margin-friendly franchise model, a collaborative approach that transforms existing warehouses into full-fledged fulfillment centers in a significantly shorter timeframe, supported by our fully digitized systems and processes, especially in remote regions. Under this model, 111 holds a share of the gross merchandise value. In 2025, we plan to expand our fulfillment centers' footprint by adding at least 15 more centers. As we reflect in Q4 performance, I'd like to highlight several key industry recognitions that underscore our market leadership and a strong regional influence. First, we were recognized as the most valuable healthcare and pharmaceutical company for investment, highlighting our strong growth potential and long-term value creation. Second, we were ranked among the top 100 private enterprises in Chongqing. Third, we were honored as an outstanding case of a productive internet service platform in Shanghai's Pudong New District, recognizing our innovative approach to digital transformation in healthcare e-commerce. Meanwhile, our tech portfolio now includes 33 patents upon four new additions in Q4. These latest patents reflect our commitment to technological advancements and a strategic focus on enhancing efficiency, safety, and user experience. This includes a group chat content, semantic analysis-based incident monitoring system, and a method which leverages AI-driven language processing to improve real-time risk detection and crisis management. We have also developed a doctor allocation algorithm based on consultation data, optimizing physician matching to enhance service efficiency and patient outcomes. Additionally, we introduced an advanced drug sorting method and system, improving fulfillment accuracy and efficiency. Lastly, our emotional analysis system based on pharmaceutical purchase pathways provides deeper insight into customer behavior, allowing us to refine personalized services and consumer engagement. We're deeply grateful for the recognition from both local markets and the industry. These accolades will undoubtedly boost our credibility as we continue to solidify our market position and foster innovation within the sector. Last but not least, I'll provide an overview of our growth strategies for revenue, margin, and profit. As we look ahead to 2025, we remain optimistic, although fully prepared for many challenges lying ahead. On the supply side, we have strategically consolidated resources from major commercial players across the country through our JBP initiative, and we will continue to prioritize investment in the JBP platform to optimize the range of product offerings. This model has already proven its significant value in connecting new partners and enhancing our supply capabilities. Additionally, our wholesale purchasing models will expand the promotion of key products from leading pharmaceutical companies, leveraging our strong digital marketing network. To further strengthen our supply capabilities, we're increasing the number of franchised fulfillment centers in multiple underserved provinces, thus expanding our reach. Finally, our Quintel national network will ensure an integrated approach to managing products and logistics across the entire country. With these enhanced supply capabilities, we can better offer customers the most comprehensive selection of pharmaceutical products at competitive prices. On the other side, we're strategically stimulating customer engagement and loyalty through high-impact initiatives such as flash sales events, which led to substantial traffic and demand and enhanced customer retention. The Together We Grow project aims to increase customers' share wallet, strengthening relationships and driving further growth. It focuses on mid-tier customers, enhancing service quality across all sales stages to meet their core needs, fuel their business development, and ultimately elevate our platform's value and scale. Moreover, by utilizing innovative online and offline integrated marketing models, including brand live streams and the Number One Summit, we are directly connecting industries with end customers, creating new growth avenues while reinforcing our brand as a leader in customer-centric digital-driven solutions. We remain steadfast in our commitment to driving operational efficiency, recognizing it as a critical factor of our continued success in a competitive and fast-evolving market. The integration of AI and fully fledged digitization is essential for us to maintain our industry-leading efficiency, but also deepen customer engagement and enable the creation of innovative products and services. These initiatives are well aligned to reinforce our market leadership. Technology is not just an enabler. It is the backbone of our strategy, empowering us to build a more agile, intelligent, and customer-centric business in an evolving healthcare landscape. At the heart of this transformation is AI, which we are leveraging to redefine how we interact with customers, optimize decision-making, and enhance operational efficiency. We have made significant investments in AI-driven analytics, automation, and digital infrastructure to elevate customer engagement, customized experiences, and improve service delivery. Our AI-powered tools analyze vast amounts of data in real time, enabling predictive insights that allow us to anticipate market shifts, refine resource allocation, and drive smarter decision-making. Our 100% digitized platform is not just about efficiency. It is a dynamic, intelligent engine that continuously learns and adapts, allowing us to proactively shape industry trends rather than react to them. As the industry undergoes rapid transformation, our commitment to leading-edge technologies ensures we remain at the forefront. We remain steadfast in advancing our AI-driven digital transformation, embedding intelligent automation, machine learning, and next-generation customer interfaces into our operations. Our goal is to seamlessly integrate technology and human expertise, creating frictionless, intelligent, and engaging experiences that redefine how customers and businesses interact in the healthcare sector. With that, I'll hand the call to our CFO, Mr. Luke Chen, to walk through our financials. Thank you. Thank you, Jimmy, and good morning or evening, everyone. I want to begin by thanking all of our colleagues for their resilience and hard work over fiscal year 2024 as we navigated a challenging environment for making necessary changes to improve our operation and cost efficiency while maintaining our competitive edge. 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 2024 results from slides 17-20 in section 2 of our presentation. Again, our 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 were RMB 3.8 billion, and the broad segment profit was RMB 202.5 million. Due to an unfavorable macroeconomic environment, net revenues and broad segment profit decreased 6.3% and 5.5%, respectively. Total operating expenses for the quarter decreased 50.1% to RMB 209.8 million. As a percentage of net revenues, total operating expenses for the quarter were down to 5.5% from 10.2% as we continue to enhance our operating average and optimize our operating efficiency. Fulfillment expenses accounted for 2.7% of Q4 net revenues as compared to 2.5% in the prior year. Sales and marketing expenses, as a percentage of net revenue for the quarter, were 2%, down from 4.2% a year earlier. G&A expenses accounted for 0.5% of net revenue, down from 2.4% in the previous year. Technology expenses accounted for 0.4% of net revenue, down from 1.2% in the same quarter of 2023. As a result, the net loss from operations was RMB 2.3 million, representing an improvement of 95.8% from RMB 55.2 million in the prior year. As a percentage of net revenues, the net loss from operations accounted for 0.1% in the quarter, down from 1.3% a year ago. Net loss attributable to ordinary shareholders was RMB 14.8 million, representing an improvement of 74.9% from RMB 59 million in the previous year. As a percentage of net revenues, the net loss attributable to ordinary shareholders accounted for 0.4% in the quarter, down from 1.4% a year earlier. As for our fiscal full year 2024, I would like to run through a few highlights. Again, you can refer to details in our debt and earnings release for comparisons to our full year 2023. Our full year 2024 net revenues were RMB 14.4 billion, and the broad segment profit was RMB 829.2 million. Net revenues and the broad segment profit had a 3.7% and a 2.3% decrease, respectively. For full year 2024, total operating expenses decreased 31% to RMB 827.1 million. As a percentage of net revenues, total operating expenses decreased by 230 basis points to 5.7% from 8% a year earlier. Fulfillment expenses accounted for 4.6% of net revenues, as compared to 2.7% in the previous year. Sales and marketing expenses, as a percentage of net revenues, reduced to 2.2% this year from 3% in 2023. G&A expenses accounted for 0.5% of net revenues, down from 1.5% a year earlier. Technology expenses accounted for 0.5% of net revenues, as compared to 0.8% in 2023. As a result, income from operations was RMB 2.1 million, compared to loss from operations of RMB 351 million in 2023. Net GAAP income from operations was RMB 22.3 million, compared to net GAAP loss from operations of RMB 123.9 million in 2023. Net GAAP net loss attributed to ordinary shareholders, as a percentage of net revenues, decreased to 0.3% from 1.1% a year ago. We are confident that we are on the right path towards profitability, driven by our robust technology capabilities. These capabilities will continue to enable us to scale our business efficiently and enhance our operational performance, ultimately delivering profitability and maximized value for all our shareholders. Please refer to slides 21-25 of the appendix section for our selected financial statements. A quick note on our cash position: as of December 31, 2024, we had cash and cash equivalents, resilient cash, and short-term investment of RMB 518.3 million. We have achieved first-ever annual positive operating cash flow. To date, the company has a total outstanding amount of RMB 1.08 billion, recorded under redeemable non-controlling interest and accrual expenses and other current liabilities. This amount is owed to a group of investors in One Pharmacy Technology, pursuant to their 2020 equity investment, as previously disclosed in accordance with terms of this investment. 111 has received a redemption request from certain of such investors. Following communication and negotiation, the company has reached agreements or obtained commitment letters from investors representing approximately 97% of the total amount to reschedule the repayments, allowing for phased repayments over extended periods if the holders exercise their redemption rights. To date, the company has already paid a portion of the repurchase funds upon signing the agreement. In January 2025, an application tribunal in Shanghai ruled in favor of an investor seeking redemption, requiring the company's Hong Kong subsidiary to repurchase the investment share in One Pharmacy Technology for RMB 30 million, plus accrued interest. We do not expect the arbitration outcome to have any impact on the business operations of our PRC entities, and we remain in active discussion with net investors to negotiate and finalize a mutually agreed revised repayment schedule. We will provide updates to investors if there are any significant developments. This concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Thank you. 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 cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Robert Sassoon with Water Tower Research. Hi, how are you doing? Very resilient performance in the face of adverse conditions. Let me ask you on that point, the unfavorable macroeconomic environment, can you actually specify how that has actually affected the company's performance in the quarter and, of course, for 2024 as a whole? Morning, Robert. Yeah, sure. First of all, even with the very tough macro environment, we achieved a major milestone in the company's history by delivering the first-ever operating profit, both at the non-GAAP and GAAP level. We also achieved a positive cash flow over RMB 263 million. In the meantime, we slashed operating expenditure by 130 basis points to 5.3% of revenue, making us one of the most efficient operators in the industry, even compared with some of the really gigantic state-owned established companies. Also, our bottom line improved by almost RMB 350 million at the GAAP level. I am very proud of the team who worked tirelessly throughout the year. The dedication and focus on executing our strategy is really outstanding. In 2024, we managed to significantly increase our product range by innovative business models like the franchised warehouse I spoke about in my script and the shared inventory with the upstream supplying partners. We worked extremely hard to offer competitive prices. We substantially increased our fulfillment centers to increase our reach. AI also has become an integral part of our business operations, and it made us extremely efficient to a level where we can compete against the biggest giants in the industry. That is the accomplishments that our team achieved and which translated into the operating profit and a positive cash flow. Thank you. Right. That is a good answer. Thank you. Your gross margin, nevertheless, has still continued to improve year on year in the fourth quarter and in the full year. What are the main factors driving that? Can you provide more color on gross margin trends? Yeah. We achieved gross margin improvement yet at the same time, I offered customers very competitive prices. There is no magic here. First of all, in order to offer the best selection for our customers, we insist on providing both a low margin and a high margin product. Of course, the low margin products do not make money. What we did is that we outsourced part of the low margin products to our partners who reside closer to their customers to save on shipping costs in order to have a reasonable margin with competitive pricing. Secondly, the team have specific goals and KPIs to sell the higher margin products, including our own private label products. The other thing we do is we try to use a decentralized model to encourage our suppliers to store their inventory into our warehouses on a consignment basis. We offer holistic services. Speaking of services, in addition to what I just mentioned, we also developed other service modules such as supply chain financing, the live streaming, and so on. The service revenue stream will continue to be one of the core metrics we manage with great diligence. Last but not least, we constantly tweak our assortment management, and the AI-assisted data analytics enable us to really optimize our assortment. Thank you. Moving on to the operating expenses side, it seems as you've managed to decrease that quite significantly. The fourth quarter operating expenses, as a percentage of revenues, further decreased year- on- year to 5.5%. How was this achieved? Yeah. I mean, it's always a tough battle to balance our bottom line and top line. A deep cut in the OpEx could end up a big loss in the top line. Our core competence really comes from being efficient. Over the years, we have developed a very sound approach. Staffing optimization is critical. We constantly review and adjust our org structure and headcounts as this is where expenses can easily get out of control. The other thing we do is there are a few buckets of expenses in our operations. Very, very simply put it, you have fulfillment, which is the biggest portion of our OpEx. You have sales, and you have G&A. G&A also includes the technology team. We break down each line item of those expenses and manage with very fine granularity. To give an example, like fulfillment, we would break it down into warehouse rental, the number of employees, the shelving cost, the picking cost, the wrapping material, and the shipping cost, the damage rate, return, etc. Each of the above categories has someone responsible to hit the target. Lastly, of course, the most essential element is really our digital capabilities. Over the years, we have invested hundreds of millions of yuan into technology, and our whole operation is 100% digitized, which provides real-time data. That real-time data enables us to make real-time adjustments. This year, we want to ensure that the company will need to go through an AI transformation. I'm really looking forward to updating our efforts in customer interfaces and the underlying AI system architecture. Thank you, Robert. Thank you for that detailed answer. Just a final question from me. Obviously, it's quite impressive that you, despite the really adverse conditions that you are facing, you actually posted your first-ever annual operating profit and positive operating cash flow. Can you just go through what the key drivers behind that milestone were and how sustainable is this profitability going forward, more importantly? Yeah, Robert, let me answer this question. Yes, we all notice we have achieved first-ever annual operating profit and positive cash flow in 2024 on a whole-year basis. We believe the key drivers behind are our relentless efforts to improve our operating efficiency. You can tell that while maintaining our revenue scale, our operating expenses decreased 230 basis points year- over- year in 2024. In our long term, it's improved by 31%. We also well manage our working capitals to generate positive operating cash flow of RMB 2,063 million. Our accounts payable date is about 45 days, and our accounts receivable date is about 10-12 days, and our inventory turnover date is about 25-30 days. We are highly efficient, well managed compared to, as Gianluca just mentioned, even compared to those dynamic players. We believe that we have built a solid foundation for 2025 and onwards. In 2025, we will continue to build up the scale in total margin and efficiently with this AI support. Our profitability and positive cash flow generation, we believe, will be sustainable. Thank you, Robert. Thanks for all that, and I'll jump back in the queue. Your next question comes from Xip eng Feng with CICC. Okay. Thank you for taking my question. This is Xipeng Feng from CICC, and congratulations on your great progress in 2024. I have two questions, actually. The first one is just a quick follow-up question on expense control. I just wondered if there's any further expense control action that we could look forward to in 2025. Another question is about revenue and earnings. Given the current market environment, what's the driver to support revenue growth, especially considering that we also need to maintain a good profit margin? Thank you. Look forward to taking the call. This is Han. Hi, Xipeng. This is Han. We are taking your question regarding this operation cost. Actually, looking back on each operation cost last year, from an annual perspective, they were basically optimized in a very structured way. Of course, many of these optimizations were gradually upgraded from those small and temporary improvements to structural optimization. And in this year, 2025, and of course, in next year and in the future, we will definitely continue to utilize AI and our internet technologies to continuously optimize various costs. This has already become integrated in our DNA of our company and of each employee. The second question regarding this growth, actually, on our supply side, we adopt a decentralized model and adding more and more other fulfillment centers, as Junling just mentioned. Actually, there is a new fulfillment center just opened this week. We also bring a greater variety of our product selections. We established a digital external competition mechanism. This mechanism prompts upstream suppliers, or upstream, especially those pharmaceutical companies, to continuously reduce their costs and also to offer more and more competitive prices. While on our demand side, our focus is on feeding the most efficient and competitive chain store customers in this industry. We launched the Growing Together program recently. Last year, we launched Fresh Sales Festival. It is every Monday and Tuesday every week until now. Also, our AI-powered intelligent procurement system. With all that, we aim to obtain more share of wallets from our customers, especially from those chain store customers. While expanding our scale, we will reduce costs and definitely enhance our profitability. Thank you, Xipeng. Okay. That is very clear. I have no further questions. Thank you. Your next question comes from Zoe with CITI. This is Zoe from CITI. Thank you for taking my questions. My first question is about, can you talk more about your technology advancement in the past year, especially in AI applications? Some of your competitors are offering AI-powered solutions to grassroots medical institutions. Are you considering launching a similar business, and will AI be a key part of your future growth? My second question is about the reducing fulfillment cost. What are your key initiatives last year to further reduce the cost, and what are further potentials in the future? My third question is, sorry, how much are you budgeting for AI investment? Okay. Let me answer your question. Let me review what we have accomplished last year through technology. Last year, we had two critical initiatives or strategies. One is that using technology to drive efficiency towards profitability. We have accomplished that. The second was to drive more towards a platform business instead of heavy asset-only business. Let me just go through that and talk more about AI, how we invest in AI, what we have accomplished in AI. As you can see, first of all, we drive more towards a platform business. We build a lot of systems. One system was a kind of self-services system for billing R&D subsidy system. We use that system for merchants, our platform. They have a monitoring system, a price adjustment system, and kind of a DIY. It's a DIY service. They do it by themselves. Through that, we can handle over 1,000 merchants and 30,000 SKUs promotions per week. All the promotions achieved good results, more than double their sales through that promotion. Behind the technology, everything was done through technology. Second was important, we could share inventory. We were the first in the industry to start shared inventory for BMC. All these sound very easy, but very complex in the systems, in the processes, because B customers purchase by cut-ins and C customers purchase by units. How we built a system not only to handle the differences, but also have the logistics, the supply chain to manage the whole different processes. We accomplished that. We extended that to sharing between our inventory and our DPP partners, as well as what Binny mentioned, the franchise fulfillment centers. The franchise fulfillment centers, they have their own inventory, and our system will share their inventory with ours and present to customers and only realize the sales when sold through our platform. It's a very complex system. Right now, we already have 11 franchise fulfillment centers. In the future, including this year, we're adding another plan 15. With more of that, we can quickly increase our selection with a much lighter asset, much higher efficiency. Gianluca also mentioned about the whole-time data. That is also we use industry data. We don't use our own data. We use our partners' data, our customers' data by direct connections with their ERP systems. With the AI assistant power empowerment, we're able to achieve very high efficiency accuracy. It's about 95% accuracy and for 4,000 accuracy, at least 82%. Let me also talk about the AI, what we have done last year. We built a so-called AI-powered price index tool to better predict, optimize our pricing strategies. That is already in use. We use also large data, large language models to build a so-called AI business intelligence for the Chart BI orchard system. This is a generated AI product using the large language model technology. Right now, our employees, our people, we can all use the chat with the system, acquiring the system information. For example, we can ask why the conversion rate was down for certain regions last week by using the natural language and getting the data back. We also built a customer service powered by AI system and reducing our service staff. This year, we'll make AI a very big part of our strategy. We have a plan to develop various AI agents and this already on the way. We integrate AI as a core engine to drive end-to-end technology integration, spanning the price intelligence, product selection, supply chain optimization, and the customer service. That probably answered the first question about how we use technology for the advancement. Let me also talk about the supply chain optimization. How do we achieve better efficiency? I do want to note that the supply chain, a big part is the fulfillment. Also, right now, with more fulfillment centers, adding more of the franchised fulfillment centers, we have closer customers. Our last-mile delivery costs will be reduced. However, we need to balance the distribution of inventory among the warehouses to make sure that we reduce the long-distance cross-region delivery but have more regional delivery. That is the part we are focused in. Last year, we negotiated with all the carriers to make sure that we have a lot of regional delivery and with regional costs. Also, we relocated our warehouse much more efficiently. We call it superhubs. Now, adding more franchised warehouses, we have a much better, more regional delivery, better through the Quintel Network. We're able to redistribute our inventory to all those franchised fulfillment centers as well as our superhubs. We also use the Quintel Network to do first-mile for our large suppliers and also do last-mile for large customers. The Quintel Network is very efficient. Not only is the cost 20%-30% lower than asking for third-party logistics, but also there is a big drop in debt rate. Those are the benefits of the Quintel Network. This year, we extend our last-mile to include all our franchised partners. Last year, we only accomplished the connection among all superhubs. This will really anticipate a decrease in our logistics cost. I hope this answers your question, Zoe. Thank you. My last question is, how much are you budgeting for AI investment per year? We have some plans. We're building a platform to host a series of AI agents. We started some of the first few, and we feel that there are immediate interactions with our customers. This will not only improve customer experience, but also will increase our customers' stickiness as well as output and conversion rate. Through these serious applications, we hope to achieve more, not only cost reduction, but also customer expectation. In terms of building a team, we are training all our employees on AI applications and how to effectively conduct the work through better use of AI. Sure, sure. Got it. Thank you, much. I don't have further questions. Your next question comes from Sean Yan, private investor. Thank you for taking my questions. First of all, congratulations to you all on the first-ever annual operating profit and positive operating cash flow. I have two questions about the future plan and outlook of 2025. First question is, are there any plans to expand partnerships with pharmaceutical companies, pharmacies, and other healthcare providers? What will be the key focus areas of these collaborations? The second question is, what are your expectations for the market in 2025? Are there any changes in the regulations and laws on the horizons that will impact your business model or your profitability? Thank you. Okay, Yan. I think your two questions actually are correlated. I'll talk about the market first and then about the partnership with upstream and downstream companies. Regarding this market, I think like all the other markets in China, we know there is a reform led by our state government currently happening in this pharmaceutical area. The key focus of this reform, we all know, is to enhance the efficiency of all steps and all links. The result is to reduce the cost of medical insurance and, of course, reduce the cost of the medical expenses of the residents. Under this key focus, we, as an internet technology company, an AI company, we have inherent advantage and also need to take greater responsibility compared to those traditional players. There have been very good practices in other industries, like in 3C industry and FMCG, etc. We believe that our government will continue to introduce new policies to encourage the innovation in this industry, to improve efficiency, and to reduce costs. During this reform, we will leverage our advantage in AI, in internet digitization, to consolidate our business values and to create greater value. Then talk about your second question on partnership. Actually, our business model is to connect our upstream partner, that is pharmaceutical companies, drug providers, with those downstream partners, that is pharmacy, those pharmacy terminals, and even patients through our digital platform. In the future, we will further expand our cooperation with both upstream and downstream partners. The key is also to enable those drugs to enter China's retail terminals, that is pharmacy, more effectively and to help those pharmacies better sell and promote these drugs through an AI-powered digital platform. We believe under the wave of AI technology, this will totally change and substitute the traditional model of drug promotion that relies heavily on human efforts. Hope answered your question. Thank you. Thank you for your detailed answers. 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 further information or have any interest in visiting 111 in Shanghai, China, please let the company know. Thank you for joining us. That concludes today's call.