Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Entity Registrant Name | 111, Inc. |
Entity File Number | 001-38639 |
Entity Address, Address Line One | 3-4/F, No.295 ZuChongZhiRoad, |
Entity Address, Address Line Two | Pudong New Area |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 201203 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Country | CN |
Entity Central Index Key | 0001738906 |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2023 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Document Accounting Standard | U.S. GAAP |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | FY |
Entity Interactive Data Current | Yes |
ICFR Auditor Attestation Flag | true |
Document Financial Statement Error Correction [Flag] | false |
Auditor Name | Deloitte Touche Tohmatsu Certified Public Accountants LLP |
Auditor Firm ID | 1113 |
Auditor Location | Shanghai, the People’s Republic of China |
Business Contact | |
Document Information [Line Items] | |
Contact Personnel Name | Junling Liu |
Entity Address, Address Line One | Pudong New Area |
Entity Address, City or Town | Shanghai |
Entity Address, Postal Zip Code | 201203 |
Entity Address, Country | CN |
Contact Personnel Email Address | junling @111.com.cn |
City Area Code | +86 |
Local Phone Number | 21 2053-6666 |
Common Class A [Member] | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A ordinary shares, par value US$0.00005 per share* |
Trading Symbol | YI |
Security Exchange Name | NASDAQ |
ADS | |
Document Information [Line Items] | |
Title of 12(b) Security | American depositary shares (one American depositary share representing two Class A ordinary shares, par value US$0.00005 per share) |
Trading Symbol | YI |
Security Exchange Name | NASDAQ |
Common Stock [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 171,044,214 |
Common Stock [Member] | Common Class A [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 99,044,214 |
Common Stock [Member] | Common Class B [Member] | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 72,000,000 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
Current assets: | |||
Cash and cash equivalents | ¥ 603,523 | $ 85,004 | ¥ 673,669 |
Restricted cash | 20,025 | 2,820 | 43,122 |
Short-term investments measured at fair value | 50,143 | 7,062 | 205,861 |
Accounts receivable, net of allowance of credit loss of RMB3,630 and RMB4,282 as of December 31, 2022 and 2023, respectively | 536,823 | 75,610 | 488,875 |
Notes receivable | 77,598 | 10,929 | 43,332 |
Inventories | 1,419,396 | 199,918 | 1,498,900 |
Prepayments and other current assets | 225,823 | 31,807 | 282,066 |
Total current assets | 2,933,331 | 413,150 | 3,235,825 |
Property and equipment, net | 34,340 | 4,837 | 48,497 |
Intangible assets, net | 2,256 | 318 | 3,267 |
Long-term investments | 2,000 | 282 | 2,000 |
Operating lease right-of-use assets | 103,799 | 14,621 | 163,877 |
Other non-current assets | 13,310 | 1,875 | 20,348 |
Total assets | 3,089,036 | 435,083 | 3,473,814 |
Current liabilities including amounts of the consolidated VIE without recourse to the Company (Note 2(b)): | |||
Short-term borrowings | 338,075 | 47,617 | 178,990 |
Accounts payable | 1,588,693 | 223,763 | 1,764,849 |
Accrued expenses and other current liabilities | 818,295 | 115,255 | 781,271 |
Total current liabilities | 2,745,063 | 386,635 | 2,725,110 |
Long-term operating lease liabilities | 62,624 | 8,820 | 100,469 |
Other non-current liabilities | 5,245 | 739 | |
Total liabilities | 2,812,932 | 396,194 | 2,825,579 |
Commitments and contingencies | |||
MEZZANINE EQUITY | |||
Redeemable non-controlling interests | 870,825 | 122,653 | 1,056,939 |
SHAREHOLDERS' DEFICIT | |||
Treasury shares (2,330,620 and 333,000 shares as of December 31, 2022 and 2023) | (5,887) | (829) | (40,859) |
Additional paid-in capital | 3,169,114 | 446,360 | 2,977,174 |
Accumulated deficit | (3,819,249) | (537,930) | (3,426,556) |
Accumulated other comprehensive income | 72,514 | 10,214 | 75,586 |
Total 111, Inc.' deficit | (583,451) | (82,177) | (414,599) |
Non-controlling interests | (11,270) | (1,587) | 5,895 |
Total deficit | (594,721) | (83,764) | (408,704) |
Total liabilities, mezzanine equity and equity | 3,089,036 | 435,083 | 3,473,814 |
Ordinary shares Class A | |||
SHAREHOLDERS' DEFICIT | |||
Ordinary shares, value | 32 | 5 | 31 |
Ordinary shares Class B | |||
SHAREHOLDERS' DEFICIT | |||
Ordinary shares, value | ¥ 25 | $ 3 | ¥ 25 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) ¥ in Thousands | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 CNY (¥) shares |
Accounts receivable, allowance of doubtful accounts | ¥ | ¥ 4,282 | ¥ 3,630 |
Treasury stock, shares | 333,000 | 2,330,620 |
Ordinary shares Class A | ||
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 96,588,106 | 99,044,214 |
Common stock, shares outstanding | 96,588,106 | 95,034,624 |
Ordinary shares Class B | ||
Common stock, shares authorized | 72,000,000 | 72,000,000 |
Common stock, shares issued | 72,000,000 | 72,000,000 |
Common stock, shares outstanding | 72,000,000 | 72,000,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
Net revenues: | ||||
Net revenues | ¥ 14,948,129 | $ 2,105,399 | ¥ 13,516,698 | ¥ 12,425,902 |
Operating costs and expenses: | ||||
Cost of products sold | (14,099,151) | (1,985,824) | (12,676,722) | (11,804,807) |
Fulfillment expenses | (400,538) | (56,415) | (401,414) | (355,836) |
Selling and marketing expenses | (448,387) | (63,154) | (457,880) | (513,146) |
General and administrative expenses | (224,202) | (31,578) | (205,623) | (206,981) |
Technology expenses | (124,341) | (17,513) | (139,504) | (189,284) |
Other operating income (expenses), net | (1,607) | (226) | (6,556) | 2,012 |
Total operating costs and expenses | (15,298,226) | (2,154,710) | (13,887,699) | (13,068,042) |
Loss from operations | (350,097) | (49,311) | (371,001) | (642,140) |
Interest income | 8,834 | 1,244 | 8,118 | 9,776 |
Interest expense | (20,141) | (2,837) | (13,443) | (5,488) |
Foreign exchange gain (loss) | 610 | 86 | (7,875) | 1,937 |
Other income, net | 7,612 | 1,072 | 8,132 | 14,890 |
Loss before income taxes | (353,182) | (49,746) | (376,069) | (621,025) |
Income tax expense | (251) | (35) | 0 | 0 |
Net loss | (353,433) | (49,781) | (376,069) | (621,025) |
Net loss attributable to non-controlling interest | 16,829 | 2,370 | 15,281 | 27,819 |
Net loss attributable to redeemable non-controlling interest | 30,852 | 4,345 | 32,329 | 56,766 |
Adjustment attributable to redeemable non-controlling interest | (86,941) | (12,245) | (88,419) | (133,370) |
Net loss attributable to ordinary shareholders | (392,693) | (55,311) | (416,878) | (669,810) |
Other comprehensive income (loss), net of tax of nil | ||||
Unrealized gains of available-for-sale securities | 4,343 | 612 | 4,810 | 8,312 |
Realized gains of available-for-sale securities | (4,166) | (587) | (4,464) | (7,801) |
Foreign currency translation adjustments | (3,249) | (458) | 15,869 | (4,051) |
Comprehensive loss | ¥ (395,765) | $ (55,744) | ¥ (400,663) | ¥ (673,350) |
Loss per share: | ||||
Loss per share, basic | (per share) | ¥ (2.33) | $ (0.33) | ¥ (2.50) | ¥ (4.04) |
Loss per share, diluted | (per share) | ¥ (2.33) | $ (0.33) | ¥ (2.50) | ¥ (4.04) |
Weighted average number of shares used in computation of loss per share: | ||||
Weighted average number of shares used in computation of loss per share, basic | 168,609,128 | 168,609,128 | 166,634,121 | 165,866,901 |
Weighted average number of shares used in computation of loss per share, diluted | 168,609,128 | 168,609,128 | 166,634,121 | 165,866,901 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Parenthetical) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||
Other comprehensive income (loss), tax | ¥ 0 | ¥ 0 | ¥ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) ¥ in Thousands, $ in Thousands | Ordinary Shares Ordinary shares Class A CNY (¥) shares | Ordinary Shares Ordinary shares Class B CNY (¥) shares | Treasury Shares CNY (¥) shares | Additional Paid-in Capital CNY (¥) | Accumulated Deficit CNY (¥) | Accumulated Other Comprehensive Income (Loss) CNY (¥) | Non-controlling Interests CNY (¥) | Ordinary shares Class A shares | Ordinary shares Class B shares | CNY (¥) shares | USD ($) shares |
Balance at beginning at Dec. 31, 2020 | ¥ 30 | ¥ 25 | ¥ (34,972) | ¥ 2,669,279 | ¥ (2,339,868) | ¥ 62,911 | ¥ 48,995 | ¥ 406,400 | |||
Balance at beginning (in shares) at Dec. 31, 2020 | shares | 93,353,402 | 72,000,000 | 1,997,620 | ||||||||
Changes in shareholders' equity (deficit) | |||||||||||
Share-based compensation | 145,593 | 145,593 | |||||||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units | ¥ 1 | 2,917 | 2,918 | ||||||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units (in shares) | shares | 1,128,084 | ||||||||||
Repurchase of shares | ¥ (5,887) | (5,887) | |||||||||
Repurchase of shares (in shares) | shares | (333,000) | 333,000 | |||||||||
Net loss | (593,206) | (27,819) | (621,025) | ||||||||
Net loss attributable to redeemable non-controlling interest | 56,766 | 56,766 | |||||||||
Adjustment attributable to redeemable non-controlling interest | (133,370) | (133,370) | |||||||||
Unrealized gains of available-for-sale securities | 8,312 | 8,312 | |||||||||
Reclassification of realized gains, net of tax | (7,801) | (7,801) | |||||||||
Foreign currency translation, net of tax | (4,051) | (4,051) | |||||||||
Balance at ending at Dec. 31, 2021 | ¥ 31 | ¥ 25 | ¥ (40,859) | 2,817,789 | (3,009,678) | 59,371 | 21,176 | (152,145) | |||
Balance at ending (in shares) at Dec. 31, 2021 | shares | 94,148,486 | 72,000,000 | 2,330,620 | ||||||||
Changes in shareholders' equity (deficit) | |||||||||||
Share-based compensation | 162,069 | 162,069 | |||||||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units | 274 | 274 | |||||||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units (in shares) | shares | 886,138 | ||||||||||
Payment of former VIE reorganization | (2,958) | (2,958) | |||||||||
Repurchase of shares | ¥ 0 | ||||||||||
Repurchase of shares (in shares) | shares | 0 | ||||||||||
Capital contribution from non-controlling shareholders (Note 12) | (51,728) | ||||||||||
Net loss | (360,788) | (15,281) | (376,069) | ||||||||
Net loss attributable to redeemable non-controlling interest | 32,329 | 32,329 | |||||||||
Adjustment attributable to redeemable non-controlling interest | (88,419) | (88,419) | |||||||||
Unrealized gains of available-for-sale securities | 4,810 | 4,810 | |||||||||
Reclassification of realized gains, net of tax | (4,464) | (4,464) | |||||||||
Foreign currency translation, net of tax | 15,869 | 15,869 | |||||||||
Balance at ending at Dec. 31, 2022 | ¥ 31 | ¥ 25 | ¥ (40,859) | 2,977,174 | (3,426,556) | 75,586 | 5,895 | (408,704) | |||
Balance at ending (in shares) at Dec. 31, 2022 | shares | 95,034,624 | 72,000,000 | 2,330,620 | 95,034,624 | 72,000,000 | ||||||
Balance at ending, Treasury Shares at Dec. 31, 2022 | ¥ 40,859 | ||||||||||
Balance at ending, Treasury Shares (in shares) at Dec. 31, 2022 | shares | 2,330,620 | 2,330,620 | |||||||||
Changes in shareholders' equity (deficit) | |||||||||||
Share-based compensation | 226,690 | ¥ 226,690 | |||||||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units | ¥ 1 | 222 | 223 | ||||||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units (in shares) | shares | 2,011,970 | ||||||||||
Vest of restricted stock and stock option in Treasury Shares | ¥ 34,972 | (34,972) | |||||||||
Vest of restricted stock and stock option in Treasury Shares (in shares) | shares | 1,997,620 | (1,997,620) | |||||||||
Repurchase of shares | ¥ 0 | ||||||||||
Repurchase of shares (in shares) | shares | 0 | ||||||||||
Net loss | (336,604) | (17,165) | (353,433) | $ (49,781) | |||||||
Net loss attributable to redeemable non-controlling interest | 30,852 | 30,852 | |||||||||
Adjustment attributable to redeemable non-controlling interest | (86,941) | (86,941) | (12,245) | ||||||||
Unrealized gains of available-for-sale securities | 4,343 | 4,343 | 612 | ||||||||
Reclassification of realized gains, net of tax | (4,166) | (4,166) | (587) | ||||||||
Foreign currency translation, net of tax | (3,249) | (3,249) | (458) | ||||||||
Balance at ending at Dec. 31, 2023 | ¥ 32 | ¥ 25 | ¥ (5,887) | ¥ 3,169,114 | ¥ (3,819,249) | ¥ 72,514 | ¥ (11,270) | (594,721) | (83,764) | ||
Balance at ending (in shares) at Dec. 31, 2023 | shares | 99,044,214 | 72,000,000 | 333,000 | 96,588,106 | 72,000,000 | ||||||
Balance at ending, Treasury Shares at Dec. 31, 2023 | ¥ 5,887 | $ 829 | |||||||||
Balance at ending, Treasury Shares (in shares) at Dec. 31, 2023 | shares | 333,000 | 333,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Operating activities: | ||||
Net loss | ¥ (353,433) | $ (49,781) | ¥ (376,069) | ¥ (621,025) |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Share-based compensation | 226,691 | 31,929 | 162,069 | 145,593 |
Depreciation and amortization | 21,780 | 3,068 | 40,819 | 27,221 |
(Gain) loss on disposal of property and equipment | 992 | 140 | 1,372 | (52) |
Loss on disposal of intangible assets | 18 | |||
Inventory write-down | 19,910 | 2,804 | 28,498 | 45,976 |
Credit loss | 1,950 | 275 | 2,694 | 1,339 |
Investment income, net | (4,025) | (567) | (4,214) | (7,801) |
Noncash lease expense | 62,610 | 8,818 | 69,322 | 89,785 |
Exchange loss | 610 | 86 | 7,875 | |
Changes in operating assets and liabilities: | ||||
Accounts receivable | (49,898) | (7,028) | (86,977) | (242,395) |
Notes receivable | (34,266) | (4,825) | 47,402 | (78,151) |
Inventories | 59,594 | 8,394 | (406,291) | (400,554) |
Prepayments and other current assets | 57,165 | 8,051 | (39,491) | 69,279 |
Other non-current assets | 7,038 | 991 | 1,738 | (17,025) |
Accounts payable | (176,735) | (24,893) | 417,497 | 274,000 |
Accrued expenses and other current liabilities | (229,975) | (32,391) | 177,644 | 120,923 |
Operating lease liabilities | (62,497) | (8,803) | (65,521) | (93,751) |
Other non-current liabilities | 5,245 | 739 | (1,537) | (2,199) |
Net cash used in operating activities | (447,244) | (62,993) | (23,152) | (688,837) |
Investing activities: | ||||
Purchases of property and equipment | (9,822) | (1,383) | (31,574) | (62,592) |
Purchases of intangible assets | (3) | (114) | (100) | |
Purchase of long-term investments | (3,000) | |||
Payment of former VIE reorganization | (2,958) | |||
Proceeds from sale of long-term investments | 750 | 140 | ||
Purchase of short-term investments | (914,326) | (128,780) | (1,268,925) | (1,832,427) |
Proceeds from sale or maturity of short-term investments | 1,074,246 | 151,303 | 1,254,463 | 1,957,801 |
Proceeds from disposal of property and equipment | 1,648 | 232 | 1,185 | 316 |
Net cash provided (used in) by investing activities | 151,743 | 21,372 | (47,173) | 60,138 |
Financing activities: | ||||
Net proceeds from issuance of ordinary shares upon the exercise of stock options | 223 | 31 | 274 | 2,918 |
Payment for share repurchase | (5,887) | |||
Proceeds from short-term bank borrowings | 919,635 | 129,528 | 788,153 | 406,837 |
Repayment of short-term bank borrowings | (750,127) | (105,653) | (868,821) | (376,429) |
Proceeds from other financing activities | 1,451,352 | 204,419 | 646,399 | 61,900 |
Repayment for other financing activities | (1,415,105) | (199,314) | (543,270) | (15,000) |
Net cash provided by financing activities | 205,978 | 29,011 | 22,735 | 74,339 |
Effect of exchange rate changes on cash and cash equivalents, and restricted cash | (3,720) | (524) | 3,709 | (3,502) |
Net decrease in cash and cash equivalents, and restricted cash | (93,243) | (13,134) | (43,881) | (557,862) |
Cash and cash equivalents, and restricted cash at the beginning of the year | 716,791 | 100,958 | 760,672 | 1,318,534 |
Cash and cash equivalents, and restricted cash at the end of the year | 623,548 | 87,824 | 716,791 | 760,672 |
Supplemental disclosure of cash flow information: | ||||
Interest paid | 10,423 | 1,468 | 9,549 | 5,625 |
Income tax paid | 251 | 35 | ||
Supplemental disclosures of non-cash investing and financing activities: | ||||
Change in fair value of available-for-sale investments | 4,343 | 612 | 4,810 | 8,312 |
Purchases of property and equipment included in payables | 570 | 6,476 | ||
Adjustment attributable to redeemable non-controlling interest | (86,941) | $ (12,245) | (88,419) | (133,370) |
Reconciliation of cash, cash equivalents, and restricted cash | ||||
Cash and cash equivalents | 603,523 | 673,669 | 661,390 | |
Restricted cash | 20,025 | 43,122 | 99,282 | |
Cash and cash equivalents, and restricted cash | ¥ 623,548 | ¥ 716,791 | ¥ 760,672 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES 111, Inc. (the “Company”), was incorporated under the laws of the Cayman Islands in May 2013. The Company, through its subsidiaries, variable interest entities (“former VIE”) and former VIE’s subsidiaries (collectively, the “Group”), operates an integrated online and offline platform in the healthcare ecosystem in China, whereby the Group is principally engaged in the sales of medical and wellness products through online retail and wholesale pharmacies and offline retail pharmacies, as well as provision of certain value-added services, such as online consultation services and e-prescription services to consumers in the People’s Republic of China (the “PRC”). As of December 31, 2023, the Group operates its business mainly through the following subsidiaries: Name of subsidiaries Date of Place of Percentage of Principal activities Yao Wang Corporation Limited (“Yao Wang “) June 4, 2013 Hong Kong 100% Investment holding 1 Pharmacy Technology August 12, 2013 Shanghai 86% Research and development, and consulting Yihao Pharmacy March 7, 2003 Guangdong 86% Warehousing, logistics and procurement Guangdong Yihao Pharmaceutical Chain Co., Ltd. (“Yihao Pharmaceutical Chain”) November 1, 2001 Guangdong 86% Retail Wuhan Central China Drug Trading Co., Ltd. (“Wuhan Huazhong”) August 5, 2015 Wuhan 60% Software development and information technology support Chongqing Yihao Pharmacy Co., Ltd.(“Chongqing Yihao Pharmacy”) May 18, 2018 Chongqing 86% Warehousing, logistics and procurement Tianjin Yihao Pharmacy Co., Ltd. (“Tianjin Yihao Pharmacy”) June 20, 2018 Tianjin 86% Warehousing, logistics and procurement Kunshan Yifang Pharmacy Co., Ltd. (“Kunshan Yifang Pharmacy”) July 30, 2018 Kunshan 86% Warehousing, logistics and procurement Hubei Yihao Pharmacy Co., Ltd (“Hubei Yihao Pharmacy”) Aug 31, 2019 Wuhuan 86% Warehousing, logistics and procurement Shanxi Yaofang Pharmacy Co., Ltd (“Shanxi Yaofang Pharmacy”) Oct 15, 2020 Shanxi 86% Warehousing, logistics and procurement Liaoning Yaofang Pharmacy Co., Ltd (“Liaoning Yaofang Pharmacy”) Nov 6, 2020 Liaoning 86% Warehousing, logistics and procurement |
SUMMARY OF PRINCIPAL ACCOUNTING
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group’s ability to generate cash flows from operations, and the Group’s ability to arrange adequate financing arrangements, to support its working capital requirements. For the years ended December 31, 2021, 2022 and 2023, the Group incurred net losses of RMB621,025, RMB376,069 and RMB353,433, respectively, and generated negative cash flows from operating activities amounting to RMB688,837, RMB23,152 and RMB447,244, respectively. As of December 31, 2023, the Group had working capital of RMB188,268, shareholders’ deficit of RMB583,451, and cash and cash equivalents, and restricted cash balance of RMB623,548. As of December 31, 2023, the Group also had outstanding borrowings of RMB338,075 due in the next 12 months, and other current liabilities of RMB2,406,988, including accounts payable and accrued expenses and other current liabilities. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (a) Basis of presentation (Continued) Furthermore, under the equity financing agreement signed in 2020 (Note 10) between 1 Pharmacy Technology and its investors, if 1 Pharmacy Technology cannot complete qualified initial public offerings (“IPOs”) before June 30, 2023, the investors have the rights to request Yao Wang to redeem all or part of their equity at the price of the investment cost plus annual interest rate of 6%. As of December 31, 2023, redeemable non-controlling interests amounting to RMB 240,474 have been reclassified as accrued expense and other current liabilities; RMB 870,825 remained as redeemable non-controlling interests where significant majority of the investors signed commitments in 2023 to the Company, to agree to not exercise their redemption rights before June 30, 2024. Management believes relevant conditions that raise substantial doubt about the Group’s ability to going concern are mitigated by the following plans and actions: • The Group has been actively communicating with redeemable non-controlling interest holders to reschedule the repayments or restructure the redemption obligations. As of the date of issuance of the financial statements, certain of these holders with carrying amount of RMB 383,577 at December 31, 2023 have signed the share repurchase agreements to facilitate the repayments where the first instalment is 10% of the principal to be repaid within 60 days after signing of the agreement, the second instalment will be 20% of the principal due on September 30, 2025 if the holders exercise their redemption rights, and the rest 70% principal as well as all accumulated interests will be due on September 30, 2026 if the holders exercise their redemption rights. Other holders with carrying amount of RMB 212,666 as of December 31, 2023 have signed commitments to rearrange their redemption schedules where 10% the principal is to be repaid within 60 days after signing the commitment letter and 90% of the principal as well as all accumulated interests will be due on September 30, 2025 if the holder exercise their redemption rights on June 30, 2025. As of the date of the issuance of the financial statements, RMB 205,000 of principal and RMB 41,753 of accrued interests are redeemable, and RMB 229,820 of principal and RMB 49,862 of accrued interests will be redeemable if the holders exercise their redemption right within one year of the issuance of the financial statements. • Management is seeking to secure more loan facilities to support its daily operations. As of the date of issuance of the financial statements, the Group has renewed a credit facility agreement with a bank which provides a credit facility, with expiry in January 2025, that allows the Group to borrow up to RMB130,000. Each bank borrowing under this facility agreement will be due in one year after drawdown date. • Management has taken or is in the process of exploring a variety of initiatives to improve the Group’s liquidity and financial position, including utilizing the supplier chain financings arrangement, as well as continuing efforts to achieve margin expansion and implement cost reduction program. Based on the above actions, management believes, after considerations to its plans, that the Group has adequate resources to meet its obligations as they come due for at least twelve months from the date of issuance of these financial statements. Accordingly, the management has prepared the financial statements on the going concern basis. Should the Group not be able to reschedule the potential repayments or restructure its redemption obligations of the remaining non-controlling interest holders with redemption amount of RMB 526,435 as of the date of the issuance of the financial statements or should the Group be unable to continue to achieve its planned efforts of margin expansion and cost reduction implementation program, the Group will need to raise additional funds or reduce expenditures to continue as a going concern. Based on the facts above, substantial doubt exists as to whether the Group will continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. The consolidated financial statements include the financial statements of the Company, its subsidiaries, former VIE and former VIE’s subsidiaries for which the Company is the primary beneficiary. All intercompany transactions, balances and unrealized profit and losses have been eliminated upon consolidation. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (a) Basis of presentation (Continued) The Group evaluates the need to consolidate certain former VIE in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or the entity is structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor with disproportionately few voting rights. The Group is deemed as the primary beneficiary of and consolidates variable interest entities when the Group has the power to direct the activities that most significantly impact the economic success of the entities and effectively assumes the obligation to absorb losses or has the rights to receive benefits that are potentially significant to the entities. (b) Basis of consolidation As of the commence date of the Group, as a foreign-invested company engaged in Internet-based businesses, the Group is subject to significant restrictions under current PRC laws and regulations, specifically the Company and its PRC subsidiary, 1 Pharmacy Technology, are both restricted from holding the licenses that are necessary for the online operation in China. To comply with these restrictions, the Company conducts the online operations principally through Yihao Pharmacy Chain via Yihao Pharmacy. Yihao Pharmacy Chain holds the licenses necessary to conduct the internet-related operations of 1 Medicine Marketplace and 1 Pharmacy in China. The foreign party investing in e-commerce business, as a type of value-added telecommunication services, has been allowed to hold up to 100% of the equity interests of the Foreign-Invested Telecommunications Enterprises (FITE) in 2015. Yihao Pharmaceutical Chain operates e-commerce business, which falls within the scope of online data processing and transaction processing (operating e-commerce), and therefore 111, Inc. is allowed to hold 100% of its equity. Prior to the reorganization in February 2022, since the Company does not have any equity interests in Yihao Pharmacy, in order to exercise effective control over its operations, the Company, through its wholly owned subsidiary, 1 Pharmacy Technology, entered into a series of contractual arrangements with Yihao Pharmacy and its shareholders, pursuant to which the Company is entitled to receive effectively all economic benefits generated from Yihao Pharmacy shareholders’ equity interests in it. Details of the key agreements entered into between 1 Pharmacy Technology, Yihao Pharmacy and each of its two individual shareholders nominated by the Founders (“Nominees”) in September 2013 are as follows: Exclusive Option Agreement: Under the exclusive option agreement, the Nominees granted an irrevocable assets and equity option to 1 Pharmacy Technology, that entitles 1 Pharmacy Technology or its designated entity or individual to acquire all or a portion of the assets owned by Yihao Pharmacy and its subsidiaries and all the equity interests held by nominees in Yihao Pharmacy and its subsidiaries at its sole discretion, at zero price or the lowest price permitted under PRC laws then in effect. The option may be exercised by 1 Pharmacy Technology or its designee. The exclusive option agreement remains effective for the same period as the exclusive support service agreement. Proxy Agreement: Under the shareholder voting right proxy agreement, the Nominees irrevocably grant any person designated by 1 Pharmacy Technology the power to exercise all voting rights. This Agreement may not be terminated without the consent of 1 Pharmacy Technology, which may unilaterally terminate the agreement, by giving a thirty In February 2022, 1 Pharmacy Technology purchased equity interests in Yihao Pharmacy from its shareholders, Mr. Yue Xuan and Ms. Jing Liu, at fair value; and, as a results, the contractual arrangements of VIE were terminated. Following such transaction, all of the former VIEs became the Company’s subsidiaries in which the Company had direct equity ownership. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (b) Basis of consolidation (Continued) The agreements that transfer economic benefits to the Company include: Equity Pledge Agreement: Exclusive Support Service Agreement: six In September 2019, exclusive support services agreements with each of the variable interest entities were amended, pursuant to which, the variable interest entities agree to pay service fees in an amount equivalent to the balance calculated as 3% of quarterly revenue (exclusive of revenue from related parties) of the variable interest entities on a quarterly basis. 1 Pharmacy Technology has the right to delay or waive payment of service fees at its discretion and the service fee level is subject to adjustment at any time upon mutual agreement between 1 Pharmacy Technology and the variable interest entities. Similar contractual agreements were also entered into by 1 Pharmacy Technology, Yihao Pharmaceutical Chain and Yao Wang, and their respective shareholders in September 2013 and September 2019. US GAAP provides guidance on the identification of VIE and financial reporting for entities over which control is achieved through means other than voting interests. The Group evaluates each of its interests in an entity to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affect the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. The irrevocable power of attorney has conveyed all shareholder rights held by the former VIE’s shareholders to 1 Pharmacy Technology, including the right to appoint board members who nominate the general managers of the former VIE to conduct day-to-day management of the former VIE’s businesses, and to approve significant transactions of the former VIE. In addition, the exclusive option agreements provide 1 Pharmacy Technology with a substantive kick-out right of the former VIE’s shareholders through an exclusive option to purchase all or any part of the shareholders’ equity interest in the former VIE at zero price or the lowest price permitted under PRC laws then in effect. In addition, through the exclusive support services agreements, the Company established the right to receive benefits from the former VIE that could potentially be significant to the former VIE, and through the equity pledge agreement, the Company has, in substance, an obligation to absorb losses of the former VIE that could potentially be significant to the former VIE. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (b) Basis of consolidation (Continued) The Group believes that there are no assets held in the former VIE that can be used only to settle obligations of the former VIE, except for registered capital and the PRC statutory reserves. As the former VIE are incorporated as limited liability companies under the PRC Company Law, creditors of the former VIE do not have recourse to the general credit of the Company for any of the liabilities of the former VIE. The following financial information of the former VIE and its subsidiaries were the amounts after elimination of intercompany transactions and balances. As of December 31, 2021, the former VIE and former VIE’s subsidiaries accounted for an aggregate of 36% of the consolidated total assets and the consolidated total liabilities. The former VIE and its subsidiaries contributed 41% of the Group’s consolidated revenue for the year ended December 31, 2021. The former VIE and its subsidiaries accounted for 22% of the Group’s consolidated operating cash inflow, 30% of the Group’s consolidated investing cash outflow, 18% of the Group’s consolidated financing cash inflow for the year ended December 31, 2021. For two months ended February 28, 2022, the former VIE and its subsidiaries did not contribute materially to the Group’s consolidated revenues, total assets and total liabilities, operating cash outflow. (c) Use of estimates The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Areas where management uses subjective judgment include estimating inventory net realizable value, and assumptions used in valuation of share-based compensation. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. (d) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased. (e) Restricted cash Restricted cash mainly represents the Group’s deposits to the banks as a form of security with respect to the Group’s debt. The cash held as deposits in the bank are not available to fund the general operating purposes of the Group. (f) Short-term investments Short-term investments include (i) structured deposits from commercial banks with guaranteed principal and variable interest rates indexed to the performance of underlying assets and with maturities of one year or less; (ii) fund products purchased from certain financial institutions with maturities of one year or less. The Group classifies the short-term investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Short-term investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Short-term investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value with the unrealized gains or losses recorded in accumulated other comprehensive income (loss) as a component of shareholders’ equity (deficit). The Group has no intent to hold the debt securities till maturity or may sell the debt securities in response to the changes in economic conditions and classified all short-term investments as available-for-sale debt securities as of December 31, 2022 and 2023. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (f) Short-term investments (Continued) Credit-related impairment is measured as the difference between the debt security’s amortized cost basis and the present value of expected cash flows and is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. The allowance should not exceed the amount by which the amortized cost basis exceeds fair value. As of December 31, 2022 and 2023, the fair value of the Group’s available-for-sale debt securities is approximate their amortized cost amounting to RMB 205,861 and RMB 50,143, respectively. The Group did not identify any factors that are indicative of impairment with respect to its available-for-sale debt securities. (g) Accounts receivable, net Accounts receivable mainly consists of amounts due from the Group’s customers, which is recorded net of allowance for credit losses. The Group adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using the modified retrospective transition method. The Group applied a current expected credit losses (“CECL”) model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, economic conditions, and other factors that may affect its ability to collect from customers and the impact of CECL is not material for the years ended December 31, 2021, 2022 and 2023. Total allowance for credit losses Balance at December 31, 2021 1,148 Credit loss expense 2,571 Write-offs (89) Balance at December 31, 2022 3,630 Credit loss expense 1,950 Write-offs (1,298) Balance at December 31, 2023 4,282 (h) Inventories Inventories, consisting of products available for sale, are accounted for using the weighted average cost method, and are valued at lower of cost or the net realizable value. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving or damaged products, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. Write-downs are recorded in cost of products sold in the consolidated statements of comprehensive loss. (i) Property and equipment Property and equipment are stated at cost less accumulated depreciation and impairment. The renovations, betterments and interest cost incurred during construction are capitalized. Property and equipment are depreciated at their costs less impairment and residual value, if any, over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Leasehold improvements Shorter of the lease term or their estimated useful lives Furniture, fixtures and equipment 3 - 5 years Electronic equipment 3 - 5 years Vehicles 4 - 5 years 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (i) Property and equipment (Continued) Construction in progress represents leasehold improvements under construction or being installed and is stated at cost. Cost comprises original cost of property and equipment, installation, construction and other direct costs. Construction in progress is transferred to leasehold improvements and depreciation commences when the asset is ready for its intended use. Expenditures for repairs and maintenance are expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of comprehensive loss as the difference between the net sales proceeds and the carrying amount of the underlying asset. Accumulated depreciation was RMB 117,400 and RMB 135,644 as of December 31, 2022 and 2023, respectively. Depreciation expense was RMB25,513, RMB39,081 and RMB20,769 for the years ended December 31, 2021, 2022 and 2023, respectively. There was no interest cost capitalized during the years ended December 31, 2021, 2022 and 2023. (j) Intangible assets Intangible assets mainly consist of externally purchased software and licenses. Software are amortized over an estimated useful life of ten years on a straight-line basis. Licenses are amortized over the remaining estimated useful life on a straight-line basis. Accumulated amortization was RMB8,632 and RMB9,643 as of December 31, 2022 and 2023, respectively. Amortization expense was RMB1,708, RMB 1,738 and RMB1,011 for the years ended December 31, 2021, 2022 and 2023, respectively. (k) Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. For the years ended December 31, 2021, 2022 and 2023, there was no impairment recognized for the Group’s long-lived assets. (l) Long-term investments The Group’s investments in equity investees consist of investments in equity securities without readily determinable fair values and equity method investments in privately-held companies. The Group measures its equity securities without a readily determinable fair value at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Group accounts for its equity investments over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Group adjusts the carrying amount of the investments and recognizes in earnings its share of the earnings or loss of the investee after the date of investment. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements of comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (m) Revenue recognition The Group follows five steps for its revenue recognition under Accounting Standard Codification (“ASC”)606: ● ● ● ● ● The Group’s revenue is reported net of discounts, value added tax and related surcharges. The primary sources of the Group’s revenues are as follows: Product revenues The Group recognizes revenues from the sale of medicines, healthcare products and other wellness merchandise through its online platforms, including its internet website 1 Medicine Marketplace, cellular phone application, other online channels and its offline pharmacies mainly to individual consumers (the “B2C Business”). The Group also generates revenues from the sale of medicines to its pharmacy customers mainly through the online platform 1 Pharmacy (the “B2B Business”). Under both B2C Business and B2B Business, revenues from product sales are recognized at the point in time when the delivery is made and when title and risk of loss transfers to the consumers and pharmacy customers. Revenues are measured at the amount of consideration the Group expects to receive in exchange for transferring products to consumers and pharmacy customers (“transaction price”). The Group provides the right of return in circumstances when there is packing or delivery damage or other quality problems identified which is considered to be a form of variable consideration. The Group estimates sales returns based on historical experience and based on such, the amount of sales returns accrual was insignificant as of December 31, 2021, 2022 and 2023. The Group voluntarily provides discount coupons through its websites during its marketing activities. These coupons are not related to prior purchases, and can only be utilized in conjunction with subsequent purchases on the Group’s platforms. The coupons are recorded as a reduction of revenue at the time of use. Under both B2B and B2C Businesses the Group utilizes delivery service providers to deliver products to its consumers and pharmacy customers (“shipping activities”) but the delivery service is not considered as a separate obligation as the shipping activities are performed before the consumers and pharmacy customers obtain control of the products. Therefore, shipping activities are not considered a separate promised service to the consumers and pharmacy customers, but rather are activities to fulfill the Group’s promise to transfer the products and are recorded as fulfillment expenses. Product revenues are recorded net of surcharges and value added tax (“VAT”) ranging from 0% to 13% for different kinds of products based on the sales amount. Surcharges are sales related taxes representing the City Maintenance and Construction Tax and Education Surtax. The Group records revenues on a gross basis because the Group controls the products before they are transferred to the consumers and pharmacy customers determined on the basis that: (1) the Group is primarily responsible for fulfilling its promise to deliver the specified products to consumers and pharmacy customers; (2) the Group has inventory risk before the specified products are transferred to a consumers and pharmacy customers or after transfer of control to the consumers and pharmacy customers, and (3) the Group has discretion in establishing the price for the specified products. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (m) Revenue recognition (Continued) Service revenues Service revenues primarily consist of fees charged to third-party marketplace sellers for whom the Group acts as an agent to facilitate the marketplace sellers’ online sales of their products through the online platforms 1 Medicine Marketplace and 1 Pharmacy, which is referred to as marketplace service (“MP”) revenue. The Group has determined it is not the principal in the arrangement as it is not responsible to fulfill the order for the specified products, it does not bear the inventory risk for the products, nor does it have the ability to establish prices. The Group also provided digital marketing service, and supply chain management to customers (collectively referred to “other services”), which it recognizes over time when the customer simultaneously receives and consumes the benefits provided by the Group’s performance, or recognize at a point in time when the customer obtains control of the goods and services. Contract balances Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when the Group has satisfied its performance obligation and the unconditional right to payment. The estimated inventories in-transit relating to estimated returns are contract assets included in inventories. Contract liabilities consist of advance payments, which were recorded in accrued expenses and other current liabilities. (n) Cost of products sold Cost of products sold consists of the purchase price of products and inbound shipping charges. The Group periodically receives rebates from certain vendors in the form of cash or credits. The Group accounts for the rebates as a reduction to the price the Group pays for the products purchased and therefore records such amounts as a reduction of cost of products sold and inventory when recognized in the financial statements. Cost of products does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistics staff, logistics centers rental expenses and depreciation expenses. Therefore, the Group’s cost of products sold may not be comparable to other companies which include such expenses in their cost of products. (o) Fulfillment expenses Fulfillment expenses primarily consist of payroll, bonus and benefits of logistics staff, logistics centers rental expenses, depreciation expenses, shipping and handling expenses, and packaging expenses. (p) Selling and marketing expenses Selling and marketing expenses primarily consist of payroll, bonus and benefits of sales and marketing staff, advertising costs, agency fees and costs for promotional materials. Advertising expenses are charged to the statements of comprehensive loss in the period incurred. The amounts of advertising expenses incurred were RMB 30,135, RMB 35,647 and RMB 35,684 for the years ended December 31, 2021, 2022 and 2023, respectively. (q) Technology expenses Technology expenses primarily consist of technology infrastructure expenses, payroll, bonus and benefits of the employees, and costs associated with the computer, storage and telecommunications infrastructure for use in technology department. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (q) Technology expenses (continued) For internal and external use software, the Group expenses all costs incurred for the preliminary project stage and post implementation-operation stage of development, and costs associated with repair or maintenance of the existing platform. Costs incurred in the application development stage are capitalized and amortized over the estimated useful life. The amount of the Group’s technology expenses qualifying for capitalization has been insignificant, and as a result, all development costs incurred for development of internal used software have been expensed as incurred. (r) General and administrative expenses General and administrative expenses primarily consist of payroll, bonus and benefit costs for corporate employees, legal, finance, rental expenses and other corporate overhead costs. (s) Government grants Government grants represent rewards provided by the relevant PRC government authorities to the Group for tax refunds and support for investment in certain local districts, which are typically granted based on the amount of investments the Group made as well as income generated by the Group in such districts. Such subsidies allow the Group full discretion to utilize the funds and are used by the Group for general corporate purposes. Normally, the Group does not receive written confirmation from local governments indicating the approval of the cash subsidy before cash is received, and therefore cash subsidies are recognized when received or when all the conditions for their receipts have been satisfied. Government grants recognized were RMB 2,947, RMB 13,190 and RMB 7,463 for the years ended December 31, 2021, 2022 and 2023, respectively, which were recorded in other operating income (expenses), net. (t) Income taxes Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Group is required to estimate its income taxes in each of the jurisdictions in which it operates. The Group accounts for income taxes using the liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are me |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
SHORT-TERM INVESTMENTS | |
SHORT-TERM INVESTMENTS | 3. SHORT-TERM INVESTMENTS Short-term investments as of December 31, 2022 and 2023 were as follows: As of December 31, 2022 2023 Wealth Management Products 205,861 50,143 The Group classifies the wealth management products as “available-for-sale” debt securities which are recorded at fair value. For the years ended December 31, 2021, 2022 and 2023, the Group recorded RMB 8,312, RMB 4,810 and RMB 4,343 of changes in fair value of these available-for-sale debt securities, net of tax, in other comprehensive loss, respectively, and RMB 7,801, RMB 4,464 and RMB 4,166 of realized gains transferred from other comprehensive income to other income when the security was sold. No credit loss was recognized for the years ended December 31, 2021, 2022 and 2023. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
NOTES RECEIVABLE | |
NOTES RECEIVABLE | 4. NOTES RECEIVABLE As of December 31, 2022 and 2023, the total notes receivable balance were RMB43,332 and RMB 77,598 and among which RMB 950 and RMB 10,168 were pledged as collateral for notes payable which has been recorded in accounts payables. No credit loss was recognized for the years ended December 31, 2021, 2022 and 2023. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2023 | |
INVENTORIES | |
INVENTORIES | 5. INVENTORIES As of December 31, 2022 2023 Products 1,498,900 1,419,396 During the years ended December 31, 2021, 2022and 2023, inventories were written down by RMB45,976, RMB 28,498 and RMB 19,910, respectively, to reflect the lower of cost and net realizable value. |
PREPAYMENTS AND OTHER CURRENT A
PREPAYMENTS AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
PREPAYMENTS AND OTHER CURRENT ASSETS | 6. PREPAYMENTS AND OTHER CURRENT ASSETS As of December 31, 2022 2023 Receivable from payment platforms 68,287 33,060 Rebate receivable from suppliers 68,236 74,751 Advance to suppliers 55,477 17,190 Value added tax recoverable 51,634 54,283 Deposits 24,267 31,231 Prepaid expense 6,656 5,905 Others 7,509 9,403 Total 282,066 225,823 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
LEASES | 7. LEASES The Group has operating leases for offices and warehouses . The Group recognized ROU assets of RMB 163,877 and RMB 103,799 , and corresponding current liabilities of RMB 64,734 and RMB 42,530 in accrued expenses and other current liabilities, and long-term operating lease liabilities of RMB 100,469 and RMB 62,624 , as of December 31, 2022 and 2023. The amount of short-term lease is not material and no variable lease cost existed for the years ended December 31, 2021, 2022 and 2023, respectively Lease expenses were RMB 73,756, RMB 75,827 and RMB 62,610 for the years ended December 31, 2021, 2022 and 2023. The maturities of lease liabilities in accordance with Leases (Topic 842) As of December 31, Year Ending December 31, 2023 2024 45,999 2025 39,567 2026 15,871 2027 7,223 2028 2,425 Total lease payment 111,085 Less: imputed interest 5,931 Present value of minimum operating lease payments 105,154 Right-of-use assets recorded in connection with the operating lease liabilities in non-cash transactions for the years ended December 31, 2021, 2022 and 2023 were RMB 225,003, RMB 10,274 and RMB 58,364. Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2021, 2022 and 2023 were RMB 77,722, RMB 73,407 and RMB 61,952. Interest expenses were RMB 8,294, RMB 10,327 and RMB 5,932 for the year ended December 31, 2021, 2022 and 2023. Weighted-average remaining lease terms and discount rates are as follows: As of December 31, 2022 2023 Weighted-average remaining lease term 3.0 years 2.7 years Weighted-average discount rate 4.3 % 4.0 % |
SHORT-TERM BORROWINGS
SHORT-TERM BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
SHORT-TERM BORROWINGS | |
SHORT-TERM BORROWINGS | 8. SHORT-TERM BORROWINGS Short-term borrowings were RMB 178,990 and RMB 338,075 as of December 31, 2022 and 2023, respectively, all of which consisted of borrowings from financial institutions and are repayable within one year. As of December 31, 2023, the Group had an undrawn balance of RMB 281,925 under the credit facilities agreement. All of these borrowings were unsecured and accrue interest at an average annual interest rate of 4.23% and 3.86% for the years ended December 31, 2022 and 2023, respectively. In September 2019, 1 Pharmacy Technology entered into a credit agreement with China Merchant Bank (CMB) which provides a revolving credit facility that allows 1 Pharmacy Technology to borrow up to RMB 100,000 for working capital purpose in one year. In October 2020, November 2021, December 2022 and December 2023, 1 Pharmacy Technology renewed the credit agreement that allowed 1 Pharmacy Technology to borrow up to RMB 200,000 for working capital purposes for another one year. Any draw down on the credit facility will be charged with interest at one-year loan prime rate published by People’s Bank of China plus 0.30%. The borrowings were guaranteed by Yihao Pharmacy. During the years ended December 31, 2022 and 2023, RMB 728,153 and RMB 779,635 were drawn on above credit facility and RMB 808,821 and RMB 700,540 were repaid, with the balance of RMB 118,990 and RMB 198,085 outstanding as of December 31, 2022 and 2023, respectively. The interest rate range for the borrowings in 2022 and 2023 were from 3.60% to 4.55 % per annum. 8. SHORT-TERM BORROWINGS (Continued) In June 2020, 1 Pharmacy Technology entered into a credit agreement with Industrial Bank (IB) which provides a revolving credit facility that allows 1 Pharmacy Technology to borrow up to RMB 100,000 for working capital purpose in one year. Any draw down on the credit facility will be charged with interest at one-year loan prime rate published by People’s Bank of China minus 0.35%. In June 2021, the credit agreement was renewed and allows 1 Pharmacy Technology to borrow up to RMB 200,000 for working capital purpose in seven months. Any draw down on the credit facility will be charged with interest at one-year loan prime rate published by People’s Bank of China plus 0.78%. In November 2022, the credit agreement was renewed and allows 1 Pharmacy Technology to borrow up to RMB 200,000 for working capital purpose in twelve months and the agreement expired on November 13, 2023. Any draw down on the credit facility will be charged with interest at one-year loan prime rate published by People’s Bank of China plus 0.85% in 2022 and plus 0.55% in 2023, respectively. The borrowings in the years ended December 31, 2022 and 2023 were guaranteed by Yihao Pharmacy. During the years ended December 31, 2022 and 2023, RMB30,000 and RMB20,000 were drawn on this credit facility, RMB30,000 and RMB30,000 were repaid in 2022 and 2023, with the balance of RMB30,000 and RMB20,000 outstanding as of December 31, 2022 and 2023, respectively. In September 2022, 1 Pharmacy Technology obtained loans from Shanghai Pudong Development Bank. The borrowing was guaranteed by Yihao Pharmacy. During the years ended December 31, 2022 and 2023, RMB30,000 with annual interest rate of 4.00% and RMB50,000 with annual interest rate of 3.65% were obtained. RMB30,000 and RMB30,000 were repaid in 2022 and 2023, with the balance of RMB30,000 and RMB50,000 outstanding as of December 31, 2022and 2023, respectively. In March 2023, The Group entered a revolving credit facility with China CITIC Bank that allows the Group to borrow up to RMB20,000 for working capital purpose till December 31, 2023. During the year ended December 31, 2023, RMB20,000 with annual interest rate of 3.70% were obtained. RMB10 were repaid in 2023, with the balance of RMB19,990 outstanding as of December 31, 2023. As of December 31, 2023, the Group is in compliance of the financial covenants andRMB 1,926 was unused facilities under these agreements. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities as of December 31, 2022 and 2023 were as follows: As of December 31, 2022 2023 Reclassified from redeemable non-controlling interests (Note) — 240,474 Advance from customers 296,361 124,995 Salary and welfare payables 84,693 78,298 Accrued expenses 80,002 78,145 Current portion of operating lease liabilities 64,734 42,530 Liability under reverse factoring program 64,120 98,109 Guaranteed customer loans 46,512 54,999 Liability under factoring program 40,112 40,353 Tax payables 37,733 6,945 Deposits from marketplace sellers 27,211 28,504 Others 39,793 24,943 Total 781,271 818,295 Note: As of December 31, 2023, redeemable non-controlling interest at the amount of RMB240,474 was reclassified from mezzanine equity to be payable included in accrued expenses and other current liabilities due to the exercise redemption right. |
REDEEMABLE NON-CONTROLLING INTE
REDEEMABLE NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2023 | |
REDEEMABLE NON-CONTROLLING INTERESTS | |
REDEEMABLE NON-CONTROLLING INTERESTS | 10. REDEEMABLE NON-CONTROLLING INTERESTS In August and December 2020, 1 Pharmacy Technology issued its ordinary shares to certain private placement investors at fair value evaluated by the third-party valuer, representing 9.2% of the outstanding shares of 1 Pharmacy Technology for total consideration of RMB934,820. Under the agreements, 1 Pharmacy Technology and the investors agreed to facilitate 1 Pharmacy Technology’s IPO in the Shanghai Sci-Tech Innovation Board (“STAR”) prior to June 30, 2023. If the IPO has not been completed and the China Securities Regulatory Commission has not otherwise approved the registration of the STAR Listing registration application prior to June 30, 2023, the investors have the right to require Yao Wang to repurchase all or any portion of their ownership interests in 1 Pharmacy Technology at the cost plus annual interest rate of 6%. The ownership interests held by the investors were classified as redeemable non-controlling interests under ASC 480 Distinguishing Liabilities from Equity as the redemption feature embedded in the non-controlling interests and not solely within the Group’s control. Total number of 66,318,885 shares was increased in Yao Wang’s redeemable non-controlling interests due to issuance of common stock of 1 Pharmacy Technology. The Company negotiated with the investors of 1 Pharmacy Technology in the contingently redeemable non-controlling interest in 1 Pharmacy Technology, and has obtained commitments from certain investors in 2023, who agreed to not exercise their redemption rights before June 30, 2024. As of December 31, 2023, certain investors agreed not to exercise the cash redemption rights at the carrying amount of RMB870,825 before June, 30, 2024, including the accreted interest, while the remaining redeemable non-controlling interest at the carrying amount of RMB240,474 was reclassified as financial liabilities set forth in Note 9. The redeemable non-controlling interests as of and for the years ended December 31, 2022 and 2023 was summarized as follows: 2022 2023 Opening balance as of January 1 1,000,849 1,056,939 Net loss attributable to the redeemable non-controlling interest (32,329) (30,852) Accretion of redeemable non-controlling interest 88,419 86,941 Payment of redeemable non-controlling interest — (1,729) Reclassified to accrued expenses and other current liabilities — (240,474) Ending balance as of December 31 1,056,939 870,825 |
NON-CONTROLLING INTERESTS
NON-CONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2023 | |
NON-CONTROLLING INTERESTS | |
NON-CONTROLLING INTERESTS | 11. NON-CONTROLLING INTERESTS In November 2020, the Company’s subsidiary, 1 Pharmacy Technology issued 32,500,000 ordinary shares to 13 LLPs founded by the employees of 1 Pharmacy Technology with the total consideration of RMB 32,500. With full shareholders’ rights of these ordinary shares issued to the LLPs, these shares are accounted as non-controlling interest of 1 Pharmacy Technology. The shares issued to the employees in each LLP are not outstanding shares but are restricted with 50% of the shares vesting within two years from the issuance date and the remaining 50% vesting evenly on an annual basis over the 2 years thereafter, which are also subject to adjustment based on performance condition. Such arrangement was entered into to provide a share incentive plan to the employees of 1 Pharmacy Technology (“Employee ownership plan of 1 Pharmacy Technology”). Share-based compensation was recognized over the vesting period based on the excess of the fair value of these shares over the issuance price (see Note 14). Non-controlling interest (“NCI”) was recognized at RMB 51,728 based on the proportional net assets of 1 Pharmacy Technology, with the difference of RMB19,228 recognized as a deduction to additional paid in capital as of December 31, 2020. For the years ended December 31, 2021, 2022 and 2023, RMB27,819, RMB15,281 and RMB16,829 was recorded as net loss attributable to the NCI shareholders. |
ORDINARY SHARES
ORDINARY SHARES | 12 Months Ended |
Dec. 31, 2023 | |
ORDINARY SHARES | |
ORDINARY SHARES | 12. ORDINARY SHARES Each Class A ordinary share entitles the holder to one vote, and each Class B ordinary share entitles the holder to fifteen votes on all matters subject to the vote at general meetings of the Company. Both Class A ordinary shares and Class B ordinary shares are entitled to the same dividend right, as such, this dual class share structure has no impacts to the earnings per share calculation. Basic earnings per share and diluted earnings per share are the same for each Class A ordinary share and Class B ordinary share. In September 2018, 75,118,996 former preferred shares were converted into Class A ordinary shares and the Company issued 15,969,110 Class A ordinary shares with the completion of the IPO. On January 25, 2019, 5,500,000 Class A ordinary shares were issued to the Company’s depositary bank, Bank of New York Mellon (“BNYM”), for bulk issuance of ADSs reserved for future issuances restricted stocks upon the exercise of stock options or vesting of restricted stocks under the 2013 Share Incentive Policy, 2014 Share Incentive Policy, 2016 Share Incentive Plan and 2018 Share Incentive Plan (together, the “Plans”). From August 15, 2019 to August 14, 2020 and from September 6, 2021 to September 5, 2022, the Company repurchased a total of 2,330,620 Class A ordinary shares of the Company and the repurchased shares were transferred to Computershare Hong Kong Investor Services Ltd. (“Computershare”), also for future issuances upon the exercise of stock options or vesting of restricted stocks under the Plans. |
NET REVENUES
NET REVENUES | 12 Months Ended |
Dec. 31, 2023 | |
NET REVENUES | |
NET REVENUES | 13. NET REVENUES Disaggregation of revenues All of the Group’s revenues for the years ended December 31, 2021, 2022 and 2023 were generated within the PRC. The following table illustrates the disaggregation of the Group’s revenue streams by type of customers and nature of services the Group offered: Years Ended December 31, 2021 2022 2023 Product Revenues 12,331,705 13,403,436 14,841,910 B2C Business 491,855 408,305 357,975 B2B Business 11,839,850 12,995,131 14,483,935 Service Revenues 94,197 113,262 106,219 MP Service 52,309 68,477 70,271 Other Services 41,888 44,785 35,948 Total 12,425,902 13,516,698 14,948,129 The revenues by different product groups and services has been disclosed in Note 2(ad). Contract balance The typical contract term of MP service is no more than one year and the remaining unsatisfied performance obligation as of December 31, 2022 and 2023 was insignificant. 13. NET REVENUES (Continued) In some arrangements from which product revenue is generated, the Group receives advance payments from consumers and pharmacy customers before the product is delivered, which is recorded as advance from customers included in the accrued expenses and other current liabilities on the consolidated balance sheets. The movements of the Group’s accounts receivable and advances from customers are as follows: Accounts Advances from Receivable Customers Ending Balance as of December 31, 2021 404,469 176,256 Increase/(decrease), net 84,406 120,105 Ending Balance as of December 31, 2022 488,875 296,361 Increase/(decrease), net 47,948 (171,366) Ending Balance as of December 31, 2023 536,823 124,995 Revenues with amount of RMB 176,256 and RMB 296,361 were recognized in the years ended December 31, 2022 and 2023, respectively that were included in the balance of advance from customers at the beginning of the each year. The Group expected that RMB 124,995 will be recognized in one month after year end. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 14. SHARE-BASED COMPENSATION In September 2013, the Board of Directors of the Company approved an Equity Incentive Plan (the "Plan"), under which, the Board of Directors may grant restricted share units and options to purchase ordinary shares to officers and directors, employees and individual advisors who render services to the Group to purchase an aggregate of no more than 1,287,500 ordinary shares of the Group ("ESOP Pool"). From 2014 to 2023, the Board of Directors approved to increase the ESOP Pool to Employee Share options The options granted have a contractual term of 10 years and generally vest over a four-year period, with vesting schedules: 25% of the awards vesting on the anniversary of the grant date each year. On October 27, 2022, the Board of directors of the Company has resolved, effective December 31, 2022 (the “Effective Date”), the exercise price per share of each option that is outstanding and not exercised, canceled, forfeited, or surrendered immediately prior to the effective Date, whether vested or unvested, shall be amended to USD0.01 per Share. All other terms of the share options granted remain unchanged. As of December 31, 2022, there were 51 grantees affected with the incremental cost of RMB 42,100 for vested options to be recognized as compensation expenses immediately and the incremental cost of RMB 6,652 for unvested options to be recognized over the remaining vesting period, ranging from 2022 to 2025. The Black Scholes model was applied in determining the estimated fair value of the options granted. The model requires the input of subjective assumptions. The following table presents the assumptions used to estimate the fair values of the share options granted for the year ended December 31, 2021. The Company did not grant options during the years ended December 31, 2022 and 2023. 2021 Risk-free rate of return 0.84% Contractual life of option 10 years Expected term 6.25 years Estimated volatility rate 39% Dividend yield — Fair value per ordinary share US$3.08 14. SHARE-BASED COMPENSATION (Continued) Employee Share options (Continued) A summary of employee option activity under the Plan during the year ended December 31, 2023 is presented below: Weighted Weighted average average remaining Aggregate Number of exercise contractual intrinsic Options price term value US$ Years US$ Outstanding at December 31, 2022 5,360,005 0.01 5.34 8,040 Granted — — Forfeited (50,000) 0.01 Expired — — Exercised (3,117,644) 0.01 47 Outstanding at December 31, 2023 2,192,361 0.01 4.15 1,677 Vested and exercisable as of December 31, 2023 2,041,648 0.01 4.03 1,563 Vested or expected to vest as of December 31, 2023 2,192,361 0.01 4.15 1,677 The weighted-average grant-date fair value of options granted during the years 2021 was US$0.70. The total intrinsic value of options exercised during the years ended December 31, 2021, 2022, and 2023, was RMB2,334, RMB641 and RMB330, respectively. Total compensation cost recognized for the years ended December 31, 2021, 2022 and 2023 was RMB 25,565, RMB 47,117 and RMB 6,206, respectively. As of December 31, 2023, there was RMB 3,879 of unrecognized compensation expense related to unvested share options, which is expected to be recognized over a weighted average period of 1.4 years. Non- Employee Share options The options granted have a contractual term of 10 years and were issued in payment for their consultation services which was expected to be performed over 4 years from the date of issuance. As services are performed, 25% of the awards vest on the anniversary of the grant date each year. The estimated fair value of the awards were determined using the Black Scholes model with the same assumptions used in employee share options. On October 27, 2022, the Board of directors of the Company has resolved, effective December 31, 2022 (the “Effective Date”), the exercise price per share of each option that is outstanding and not exercised, canceled, forfeited, or surrendered immediately prior to the effective Date, whether vested or unvested, shall be amended to USD0.01 per Share. All other terms of the share options granted remain unchanged. As of December 31, 2022, there were 4 grantees affected by the modification, with total incremental compensation cost RMB 617 resulting from the modification and nil incremental to be recognized after 2022. As of December 31, 2023, there were 45,795 fully vested options with weighted average exercise price US$ 0.01 , weighted average remaining contractual term 3.87 years and aggregate intrinsic value RMB 249 . Nil option was granted during 2023. The weighted-average grant-date fair value of options granted during the years 2021, 2022 and 2023 was nil, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021, 2022 and 2023 was nil, respectively. Total compensation cost recognized for the years ended December 31, 2021, 2022 and 2023 was RMB668, RMB639 and nil, respectively. 14. SHARE-BASED COMPENSATION (Continued) Restricted share units The restricted share units granted have a contractual term of 10 years and vest over a four-year period that 25% of the awards vesting on the anniversary of the grant date each year. The fair value of restricted share units with service conditions or performance conditions is based on the fair market value of the underlying ordinary shares on the date of grant. The following table summarized the Group’s restricted share unit activities during the year ended December 31, 2023. Number of Weighted Restricted Average Grant Date Share Units Fair Value US$ Restricted share units outstanding at December 31, 2022 1,792,403 3.33 Granted 3,356,610 1.30 Forfeited (383,570) 2.63 Vested (867,116) 2.97 Restricted share units outstanding at December 31, 2023 3,898,327 1.73 The weighted-average grant-date fair value of share units granted during the years 2021, 2022 and 2023 was US$5.27, US$1.26 and US$1.30, respectively. During the years ended December 31, 2021, 2022 and 2023, 894,988, 837,238 and 867,116 share units were exercised with an aggregate intrinsic value of RMB 20,167, RMB 17,072 and RMB 17,681, respectively. The total fair value of restricted share units vested during the years ended December 31, 2021, 2022 and 2023 was RMB 22,395, RMB 23,921 and RMB 18,261, respectively. Total compensation cost recognized for the years ended December 31, 2021, 2022 and 2023 was RMB 25,711, RMB 22,410 and RMB 15,611. As of December 31, 2023, there was RMB 36,380 in total unrecognized compensation expense related to such non-vested restricted shares, which is expected to be recognized over a weighted-average period of 0.5 year. On September 9, 2022, the Company received a preliminary non-binding proposal letter from Dr. Gang Yu, Mr. Junling Liu, and Shanghai Guosheng Capital Management Co., Ltd., proposing to acquire all of the outstanding Class A ordinary shares of the Company (“Proposed Transaction”). On October 27, 2022, the Board of directors of the Company has resolved that any and all of the options or RSUs that are outstanding and unvested and not otherwise exercised, forfeited immediately upon the closing of the Company’s Proposed Transaction shall vest immediately upon closing of the Proposed Transaction (the “Vest Acceleration”), and the Vest Acceleration shall no longer be in effect in the event that the Proposed Transaction is not closed by June 30, 2023. The Company assessed that the Proposed Transaction was not probable as of December 31, 2022, therefore, the modification did not have accounting consequence. Employee ownership plan of 1 Pharmacy Technology As disclosed in Note 11, the excess of the fair value of the restricted shares of LLPs issued to the employees of 1 Pharmacy Technology over the issuance price of RMB 32,500 is recognized as share-based compensation over the vesting period. The shares issued to the employees in each LLP are not outstanding shares but are restricted with 50% of the shares vesting within two years from the issuance date and the remaining 50% vesting evenly on an annual basis over the 2 years thereafter, which are also subject to adjustment based on performance condition. For the years ended December 31, 2021, 2022 and 2023, the Group determined the fair value of the restricted shares of LLPs using income approach with the assistance from third party valuation specialist and the weighted average fair value of the restricted shares was estimated at RMB 14.74, RMB 14.5 and RMB 14.5 per share respectively. 14. SHARE-BASED COMPENSATION (Continued) Employee ownership plan of 1 Pharmacy Technology (Continued) On July 1, 2022, the Company modified the vesting terms that substantially all of the unvested restricted shares of LLPs would not be exercisable until the completion of the 1 Pharmacy Technology’s qualified IPO. The modification was a probable-to-improbable modification as IPO constituted a performance condition that was not considered probable until the IPO completion date. As such, no incremental fair value was recognized unless and until the modified condition becomes probable. The award’s original grant-date fair value is recognized as an expense, over the requisite service period, regardless of whether the modified conditions are satisfied. For the restricted shares granted after July 1,2022, no share-based compensation expense was recognized. As of December 31, 2022, there were 46 grantees affected with the total unrecognized share-based compensation expenses of RMB 2,289, which will be recognized as share-based compensation expense when qualified IPO is probable. On December 28, 2023, Employee Stock Ownership Plan management committee, a committee authorized by the Board of Director of 1 Pharmacy, adopted and approved a resolution of cancellation of this incentive plan. The management immediately recognized all remaining share-based compensation expenses of RMB 152,991 in December 2023. The following table summarized the Group’s restricted shares of LLPs activities during the year ended December 31, 2023. Weighted average Number of Restricted Weighted Average remaining contractual Aggregate intrinsic Share Units of LLPs Grant Date Fair Value term value RMB Non-vested restricted shares outstanding at December 31, 2022 31,571,186 14.06 2.07 427,158 Granted 3,041,555 13.50 Forfeited (3,730,484) 14.01 Vested (18,968,249) 13.12 Canceled (11,914,008) 13.84 Non-vested restricted shares outstanding at December 31, 2023 — — — — The weighted-average grant-date fair value of share units granted during the years 2021, 2022 and 2023 was RMB13.74, RMB13.50 and RMB13.50, respectively. The total fair value of restricted share units vested during the years ended December 31, 2021, 2022 and 2023 was nil. Total compensation cost recognized for the years ended December 31, 2021, 2022 and 2023 was RMB93,649, RMB87,218 and RMB204,353. Share-based compensation for all share options, restricted share units and employee ownership plan of 1 Pharmacy Technology The Group recorded share-based compensation expense of RMB 145,593, RMB 157,384 and RMB 226,170 for the years ended December 31, 2021, 2022 and 2023, respectively, which were classified in the accompanying consolidated statements of operations as follows: Years Ended December 31, 2021 2022 2023 RMB RMB RMB General and administrative expenses 69,718 86,992 113,536 Selling and marketing expenses 50,532 50,110 76,976 Technology expenses 25,343 20,282 35,658 Total 145,593 157,384 226,170 |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER SHARE | |
LOSS PER SHARE | 15. LOSS PER SHARE The following table sets forth the computation of basic and diluted loss per share for the years indicated: Years Ended December 31, 2021 2022 2023 Net loss attributable to ordinary shareholders (669,810) (416,878) (392,693) Weighted average number of ordinary shares-basic and diluted 165,866,901 166,634,121 168,609,128 Net loss per ordinary share-basic and diluted (4.04) (2.50) (2.33) As a result of the Group’s net loss for the three years ended December 31, 2021, 2022 and 2023, share options and restricted share units outstanding in the respective periods were excluded from the calculation of diluted loss per share as their inclusion would have been anti-dilutive. As of December 31, 2021 2022 2023 Share options and nonvested restricted share units 8,312,535 7,223,033 6,136,483 |
INCOME TAX EXPENSE
INCOME TAX EXPENSE | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX EXPENSE | |
INCOME TAX EXPENSE | 16. INCOME TAX EXPENSE Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Hong Kong Yao Wang is subject to Hong Kong profit tax at a rate of 16.5%. No Hong Kong profit tax has been provided as the Group has not had assessable profit that was earned in or derived from Hong Kong during the years presented. PRC Under the Law of the PRC on Enterprise Income Tax (“EIT Law”), domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25%. High-technology enterprises may obtain a preferential tax rate of 15% provided they meet the related criteria. In December 2019, 1 Pharmacy Technology received approval from relevant government authorities to be classified as a “High and New Technology Enterprise” (“HNTE”) and 1 Pharmacy Technology is still on the position of loss. The HNTE qualification is valid for three years through 2021. In December 2022, 1 Pharmacy Technology renewed HNTE qualification for another three years. There is no provision for income taxes because the Company and all of its owned subsidiaries are in cumulative loss positions for all the periods presented. A reconciliation between the effective income tax rate and the PRC statutory income tax rate is as follows: Years Ended December 31, 2022 2023 PRC statutory tax rate 25 % 25 % Tax effect of other expenses that are not deductible in determining taxable profit (4) % (1) % Effect of R&D super deduction 3 % 4 % Effect of enacted tax rate change 2 % 3 % Effect of change in valuation allowance (26) % (31) % Effective tax rate 0 % 0 % 16. INCOME TAX EXPENSE (Continued) PRC (Continued) The principal components of the Group’s deferred income tax assets and liabilities as of December 31, 2022 and 2023 are as follows: As of December 31, 2022 2023 Deferred tax assets: Net loss carryforward 631,139 670,062 Advertising expense carried forward for future deduction 3,928 — Accrued expenses and payroll payable 22,899 18,967 Provision for impairment of assets 5,597 5,663 Others 260 94 Valuation allowance (663,823) (694,786) Total deferred tax assets — — Deferred tax liabilities: Total deferred tax liabilities — — As of December 31, 2022 and 2023, valuation allowance of RMB 663,823 and RMB 694,786 was provided, respectively. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward periods, the Group’s experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more likely than not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carryforward periods provided for in the tax law. As of December 31, 2023, the Group had tax loss carryforwards of RMB 2,680,250 which will expire between 2024 and 2032 if not used. The Group determines whether or not a tax position is “more-likely-than-not” of being sustained upon audit based solely on the technical merits of the position. The Group does not anticipate any significant changes to its liability for unrecognized tax benefits within the next 12 months. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of income taxes is due to computational errors made by the taxpayer. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined, but an underpayment of income tax liability exceeding RMB100 is specifically listed as a special circumstance. In the case of a transfer pricing related adjustment, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. From 2018 to 2023, the Group’s PRC subsidiaries were still within the examination period of the PRC tax authorities. A deferred tax liability should be recognized for the undistributed profits of the PRC subsidiaries unless the Company has sufficient evidence to demonstrate that the undistributed dividends will be reinvested and the remittance of the dividends will be postponed indefinitely. The Company plans to indefinitely reinvest undistributed profits earned from its PRC subsidiaries in its operations in the PRC. Therefore, no withholding income taxes for undistributed profits of the Company’s subsidiaries were provided as of December 31, 2022 and 2023. |
MAINLAND CHINA CONTRIBUTION PLA
MAINLAND CHINA CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2023 | |
MAINLAND CHINA CONTRIBUTION PLAN | |
MAINLAND CHINA CONTRIBUTION PLAN | 17. MAINLAND CHINA CONTRIBUTION PLAN Full time employees of the Group in the PRC participate in a government-mandated defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The total contribution for such employee benefits were RMB81,468, RMB67,384 and RMB61,725 for the years ended December 31, 2021, 2022 and 2023, respectively. The Group has no ongoing obligation to its employees subsequent to its contributions to the PRC plan. |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 18. RESTRICTED NET ASSETS Pursuant to laws applicable to entities incorporated in the PRC, the subsidiaries of the Group in the PRC must make appropriations from after-tax profit to non-distributable reserve funds. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion fund and (iii) a staff bonus and welfare fund. Subject to certain cumulative limits, the general reserve fund requires annual appropriation of 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year-end) until the accumulative amount of such reserve fund reaches 50% of their registered capital; the other fund appropriations are at the subsidiaries’ discretion. These reserve funds can only be used for the specific purposes of offsetting future losses, enterprise expansion and staff bonus and welfare and are not distributable as cash dividends. During the years ended December 31, 2021, 2022 and 2023, no appropriation to statutory reserves was made because the PRC subsidiaries had substantial losses during such periods. In addition, due to restrictions on the distribution of share capital from the Company’s PRC subsidiaries, the PRC subsidiaries’ share capital of RMB 618,830 and RMB 618,830 on December 31, 2022 and 2023 is considered restricted, which are not available for distribution to the Company by its PRC subsidiaries in the form of dividends, loans or advances. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 19. COMMITMENTS AND CONTINGENCIES The Group is subject to periodic legal or administrative proceedings in the ordinary course of its business. The Group does not believe that any currently pending legal or administrative proceeding to which the Group is a party will have a material adverse effect on the financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS The Group has evaluated subsequent events through May 14, 2024, which is the date when the financial statements were issued. On February 27, 2024, the Consortium comprises of Dr. Gang Yu, co-founder and co-chairman, Mr. Junling Liu, co-founder, co-chairman and chief executive officer of the Company and certain investors, announced that it would withdraw the Proposed Transaction started on September 9, 2022. The Consortium will formally terminate further negotiation with the special committee of the Company’s board of directors regarding the transactions as contemplated by the Proposed Transaction. |
ADDITIONAL FINANCIAL INFORMATIO
ADDITIONAL FINANCIAL INFORMATION- FINANCIAL STATEMENTS SCHEDULE I | 12 Months Ended |
Dec. 31, 2023 | |
ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I | |
ADDITIONAL FINANCIAL INFORMATION-FINANCIAL STATEMENTS SCHEDULE I | ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I 111, INC. FINANCIAL INFORMATION FOR PARENT COMPANY CONDENSED BALANCE SHEETS (Amounts in thousands , unless otherwise stated) 2022 2023 2023 RMB RMB US$ (Note 2 (ai)) ASSETS Current assets: Cash and cash equivalents 4,873 166,942 23,513 Short term investments 55,755 — — Prepayments and other current assets 3,168 1,948 274 Total current assets 63,796 168,890 23,787 Total assets 63,796 168,890 23,787 LIABILITIES AND EQUITY Other current liabilities 8,876 13,883 1,955 Amount due to subsidiaries and former VIE 73,128 187,606 26,424 Deficit in subsidiaries and former VIE 396,391 550,852 77,585 Total liabilities 478,395 752,341 105,964 SHAREHOLDERS' DEFICIT Ordinary shares Class A 31 32 5 Ordinary shares Class B 25 25 3 Treasury shares (40,859) (5,887) (829) Additional paid-in capital 2,977,174 3,169,114 446,360 Accumulated deficit (3,426,556) (3,819,249) (537,930) Accumulated other comprehensive income 75,586 72,514 10,214 Total shareholders’ deficit (414,599) (583,451) (82,177) Total liabilities and shareholders’ deficit 63,796 168,890 23,787 ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I 111, INC. FINANCIAL INFORMATION FOR PARENT COMPANY CONDENSED STATEMENTS OF COMPREHENSIVE LOSS (Amounts in thousands, unless otherwise stated) Years Ended December 31, 2021 2022 2023 2023 RMB RMB RMB US$ (Note 2 (ai)) Operating expenses: General and administrative expenses (12,141) (19,613) (19,303) (2,719) Interest income 26 12 1,772 250 Other operating income, net 50 — — — Other income, net 7,089 3,985 3,546 499 Loss before tax and loss from investment in subsidiaries and former VIE (4,976) (15,616) (13,985) (1,970) Equity in loss from subsidiaries and share of loss in former VIE (664,834) (401,262) (378,708) (53,341) Net loss attributable to ordinary shareholders (669,810) (416,878) (392,693) (55,311) Other comprehensive income (loss) (net of tax of nil) Unrealized securities holding gains 278 640 — — Realized securities holding gains — — (640) (90) Foreign currency translation adjustments (4,051) 15,869 (3,249) (458) Unrealized securities holding gains of subsidiaries and former VIE 8,034 4,170 4,343 612 Realized securities holding gains of subsidiaries and former VIE (7,801) (4,464) (3,526) (497) Comprehensive loss (673,350) (400,663) (395,765) (55,744) ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I 111, INC. FINANCIAL INFORMATION FOR PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS (Amounts in thousands, unless otherwise stated) Years Ended December 31, 2021 2022 2023 2023 RMB RMB RMB US$ (Note 2 (ai)) Operating activities: Net loss (669,810) (416,878) (392,693) (55,311) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Share of loss of subsidiaries and former VIE 664,834 401,262 378,708 53,341 Other current liabilities (128) 5,870 5,007 705 Other non-current liabilities (2,199) (1,537) — — Net cash used in operating activities (7,303) (11,283) (8,978) (1,265) Investing activities: Payment for shareholder loan to subsidiaries — — — — Purchase of short-term investments (32,427) (18,925) — — Proceeds from sale or maturity of short-term investments — — 57,434 8,090 Net cash used in investing activities (32,427) (18,925) 57,434 8,090 Financing activities: Proceeds from ordinary shareholders 2,918 274 223 31 Proceeds of loan from subsidiaries 41,937 19,010 167,414 23,580 Payment for loan from subsidiaries — — (54,229) (7,638) Payment of share repurchase (5,887) — — — Net cash (used in) provided by financing activities 38,968 19,284 113,408 15,973 Effect of exchange rate changes on cash and cash equivalents, and restricted cash (991) 2,854 205 29 Net decrease in cash and cash equivalents (1,753) (8,070) 162,069 22,827 Cash and cash equivalents at the beginning of the year 14,696 12,943 4,873 686 Cash and cash equivalents at the end of the year 12,943 4,873 166,942 23,513 ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I 111, INC. FINANCIAL INFORMATION FOR PARENT COMPANY Note to Schedule I Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04-(c) of Regulation S-X, which require condensed financial information as to the financial position, change in financial position and results of operations of a parent company as of the same dates and for the same periods for which audited financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries and former VIE. For the parent company, the Group records its investments in subsidiaries and former VIE under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures. Ordinarily under the equity method, an investor in an equity method investee would cease to recognize its share of the losses of an investee once the carrying value of the investment has been reduced to nil absent an undertaking by the investor to provide continuing support and fund losses. For the purpose of Schedule I, the parent company has continued to reflect its share, based on its proportionate interest, the losses of subsidiaries and former VIE regardless of the carrying value of the investment even though the parent company is not obligated to provide continuing support or fund losses. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying financial statements. Certain reclassifications have been made to the prior years’ consolidated financial statements to conform to the current year’s presentation. These reclassifications had no impact on net income, shareholders’ equity, or cash flows as previously reported. As of December 31, 2023, there are no material contingencies, mandatory dividend and significant provisions for long-term obligations or guarantees of the Company, except for those which have separately disclosed in the financial statements. |
SUMMARY OF PRINCIPAL ACCOUNTI_2
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
Basis of presentation | (a) Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”). The consolidated financial statements have been prepared assuming that the Group will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Group’s ability to generate cash flows from operations, and the Group’s ability to arrange adequate financing arrangements, to support its working capital requirements. For the years ended December 31, 2021, 2022 and 2023, the Group incurred net losses of RMB621,025, RMB376,069 and RMB353,433, respectively, and generated negative cash flows from operating activities amounting to RMB688,837, RMB23,152 and RMB447,244, respectively. As of December 31, 2023, the Group had working capital of RMB188,268, shareholders’ deficit of RMB583,451, and cash and cash equivalents, and restricted cash balance of RMB623,548. As of December 31, 2023, the Group also had outstanding borrowings of RMB338,075 due in the next 12 months, and other current liabilities of RMB2,406,988, including accounts payable and accrued expenses and other current liabilities. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (a) Basis of presentation (Continued) Furthermore, under the equity financing agreement signed in 2020 (Note 10) between 1 Pharmacy Technology and its investors, if 1 Pharmacy Technology cannot complete qualified initial public offerings (“IPOs”) before June 30, 2023, the investors have the rights to request Yao Wang to redeem all or part of their equity at the price of the investment cost plus annual interest rate of 6%. As of December 31, 2023, redeemable non-controlling interests amounting to RMB 240,474 have been reclassified as accrued expense and other current liabilities; RMB 870,825 remained as redeemable non-controlling interests where significant majority of the investors signed commitments in 2023 to the Company, to agree to not exercise their redemption rights before June 30, 2024. Management believes relevant conditions that raise substantial doubt about the Group’s ability to going concern are mitigated by the following plans and actions: • The Group has been actively communicating with redeemable non-controlling interest holders to reschedule the repayments or restructure the redemption obligations. As of the date of issuance of the financial statements, certain of these holders with carrying amount of RMB 383,577 at December 31, 2023 have signed the share repurchase agreements to facilitate the repayments where the first instalment is 10% of the principal to be repaid within 60 days after signing of the agreement, the second instalment will be 20% of the principal due on September 30, 2025 if the holders exercise their redemption rights, and the rest 70% principal as well as all accumulated interests will be due on September 30, 2026 if the holders exercise their redemption rights. Other holders with carrying amount of RMB 212,666 as of December 31, 2023 have signed commitments to rearrange their redemption schedules where 10% the principal is to be repaid within 60 days after signing the commitment letter and 90% of the principal as well as all accumulated interests will be due on September 30, 2025 if the holder exercise their redemption rights on June 30, 2025. As of the date of the issuance of the financial statements, RMB 205,000 of principal and RMB 41,753 of accrued interests are redeemable, and RMB 229,820 of principal and RMB 49,862 of accrued interests will be redeemable if the holders exercise their redemption right within one year of the issuance of the financial statements. • Management is seeking to secure more loan facilities to support its daily operations. As of the date of issuance of the financial statements, the Group has renewed a credit facility agreement with a bank which provides a credit facility, with expiry in January 2025, that allows the Group to borrow up to RMB130,000. Each bank borrowing under this facility agreement will be due in one year after drawdown date. • Management has taken or is in the process of exploring a variety of initiatives to improve the Group’s liquidity and financial position, including utilizing the supplier chain financings arrangement, as well as continuing efforts to achieve margin expansion and implement cost reduction program. Based on the above actions, management believes, after considerations to its plans, that the Group has adequate resources to meet its obligations as they come due for at least twelve months from the date of issuance of these financial statements. Accordingly, the management has prepared the financial statements on the going concern basis. Should the Group not be able to reschedule the potential repayments or restructure its redemption obligations of the remaining non-controlling interest holders with redemption amount of RMB 526,435 as of the date of the issuance of the financial statements or should the Group be unable to continue to achieve its planned efforts of margin expansion and cost reduction implementation program, the Group will need to raise additional funds or reduce expenditures to continue as a going concern. Based on the facts above, substantial doubt exists as to whether the Group will continue as a going concern. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. The consolidated financial statements include the financial statements of the Company, its subsidiaries, former VIE and former VIE’s subsidiaries for which the Company is the primary beneficiary. All intercompany transactions, balances and unrealized profit and losses have been eliminated upon consolidation. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (a) Basis of presentation (Continued) The Group evaluates the need to consolidate certain former VIE in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or the entity is structured with disproportionate voting rights, and substantially all of the activities are conducted on behalf of an investor with disproportionately few voting rights. The Group is deemed as the primary beneficiary of and consolidates variable interest entities when the Group has the power to direct the activities that most significantly impact the economic success of the entities and effectively assumes the obligation to absorb losses or has the rights to receive benefits that are potentially significant to the entities. |
Basis of consolidation | (b) Basis of consolidation As of the commence date of the Group, as a foreign-invested company engaged in Internet-based businesses, the Group is subject to significant restrictions under current PRC laws and regulations, specifically the Company and its PRC subsidiary, 1 Pharmacy Technology, are both restricted from holding the licenses that are necessary for the online operation in China. To comply with these restrictions, the Company conducts the online operations principally through Yihao Pharmacy Chain via Yihao Pharmacy. Yihao Pharmacy Chain holds the licenses necessary to conduct the internet-related operations of 1 Medicine Marketplace and 1 Pharmacy in China. The foreign party investing in e-commerce business, as a type of value-added telecommunication services, has been allowed to hold up to 100% of the equity interests of the Foreign-Invested Telecommunications Enterprises (FITE) in 2015. Yihao Pharmaceutical Chain operates e-commerce business, which falls within the scope of online data processing and transaction processing (operating e-commerce), and therefore 111, Inc. is allowed to hold 100% of its equity. Prior to the reorganization in February 2022, since the Company does not have any equity interests in Yihao Pharmacy, in order to exercise effective control over its operations, the Company, through its wholly owned subsidiary, 1 Pharmacy Technology, entered into a series of contractual arrangements with Yihao Pharmacy and its shareholders, pursuant to which the Company is entitled to receive effectively all economic benefits generated from Yihao Pharmacy shareholders’ equity interests in it. Details of the key agreements entered into between 1 Pharmacy Technology, Yihao Pharmacy and each of its two individual shareholders nominated by the Founders (“Nominees”) in September 2013 are as follows: Exclusive Option Agreement: Under the exclusive option agreement, the Nominees granted an irrevocable assets and equity option to 1 Pharmacy Technology, that entitles 1 Pharmacy Technology or its designated entity or individual to acquire all or a portion of the assets owned by Yihao Pharmacy and its subsidiaries and all the equity interests held by nominees in Yihao Pharmacy and its subsidiaries at its sole discretion, at zero price or the lowest price permitted under PRC laws then in effect. The option may be exercised by 1 Pharmacy Technology or its designee. The exclusive option agreement remains effective for the same period as the exclusive support service agreement. Proxy Agreement: Under the shareholder voting right proxy agreement, the Nominees irrevocably grant any person designated by 1 Pharmacy Technology the power to exercise all voting rights. This Agreement may not be terminated without the consent of 1 Pharmacy Technology, which may unilaterally terminate the agreement, by giving a thirty In February 2022, 1 Pharmacy Technology purchased equity interests in Yihao Pharmacy from its shareholders, Mr. Yue Xuan and Ms. Jing Liu, at fair value; and, as a results, the contractual arrangements of VIE were terminated. Following such transaction, all of the former VIEs became the Company’s subsidiaries in which the Company had direct equity ownership. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (b) Basis of consolidation (Continued) The agreements that transfer economic benefits to the Company include: Equity Pledge Agreement: Exclusive Support Service Agreement: six In September 2019, exclusive support services agreements with each of the variable interest entities were amended, pursuant to which, the variable interest entities agree to pay service fees in an amount equivalent to the balance calculated as 3% of quarterly revenue (exclusive of revenue from related parties) of the variable interest entities on a quarterly basis. 1 Pharmacy Technology has the right to delay or waive payment of service fees at its discretion and the service fee level is subject to adjustment at any time upon mutual agreement between 1 Pharmacy Technology and the variable interest entities. Similar contractual agreements were also entered into by 1 Pharmacy Technology, Yihao Pharmaceutical Chain and Yao Wang, and their respective shareholders in September 2013 and September 2019. US GAAP provides guidance on the identification of VIE and financial reporting for entities over which control is achieved through means other than voting interests. The Group evaluates each of its interests in an entity to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affect the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. The irrevocable power of attorney has conveyed all shareholder rights held by the former VIE’s shareholders to 1 Pharmacy Technology, including the right to appoint board members who nominate the general managers of the former VIE to conduct day-to-day management of the former VIE’s businesses, and to approve significant transactions of the former VIE. In addition, the exclusive option agreements provide 1 Pharmacy Technology with a substantive kick-out right of the former VIE’s shareholders through an exclusive option to purchase all or any part of the shareholders’ equity interest in the former VIE at zero price or the lowest price permitted under PRC laws then in effect. In addition, through the exclusive support services agreements, the Company established the right to receive benefits from the former VIE that could potentially be significant to the former VIE, and through the equity pledge agreement, the Company has, in substance, an obligation to absorb losses of the former VIE that could potentially be significant to the former VIE. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (b) Basis of consolidation (Continued) The Group believes that there are no assets held in the former VIE that can be used only to settle obligations of the former VIE, except for registered capital and the PRC statutory reserves. As the former VIE are incorporated as limited liability companies under the PRC Company Law, creditors of the former VIE do not have recourse to the general credit of the Company for any of the liabilities of the former VIE. The following financial information of the former VIE and its subsidiaries were the amounts after elimination of intercompany transactions and balances. As of December 31, 2021, the former VIE and former VIE’s subsidiaries accounted for an aggregate of 36% of the consolidated total assets and the consolidated total liabilities. The former VIE and its subsidiaries contributed 41% of the Group’s consolidated revenue for the year ended December 31, 2021. The former VIE and its subsidiaries accounted for 22% of the Group’s consolidated operating cash inflow, 30% of the Group’s consolidated investing cash outflow, 18% of the Group’s consolidated financing cash inflow for the year ended December 31, 2021. For two months ended February 28, 2022, the former VIE and its subsidiaries did not contribute materially to the Group’s consolidated revenues, total assets and total liabilities, operating cash outflow. |
Use of estimates | (c) Use of estimates The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Areas where management uses subjective judgment include estimating inventory net realizable value, and assumptions used in valuation of share-based compensation. Management bases the estimates on historical experience and various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from these estimates. |
Cash and cash equivalents | (d) Cash and cash equivalents Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased. |
Restricted cash | (e) Restricted cash Restricted cash mainly represents the Group’s deposits to the banks as a form of security with respect to the Group’s debt. The cash held as deposits in the bank are not available to fund the general operating purposes of the Group. |
Short-term investments | (f) Short-term investments Short-term investments include (i) structured deposits from commercial banks with guaranteed principal and variable interest rates indexed to the performance of underlying assets and with maturities of one year or less; (ii) fund products purchased from certain financial institutions with maturities of one year or less. The Group classifies the short-term investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Short-term investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities. Short-term investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value with the unrealized gains or losses recorded in accumulated other comprehensive income (loss) as a component of shareholders’ equity (deficit). The Group has no intent to hold the debt securities till maturity or may sell the debt securities in response to the changes in economic conditions and classified all short-term investments as available-for-sale debt securities as of December 31, 2022 and 2023. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (f) Short-term investments (Continued) Credit-related impairment is measured as the difference between the debt security’s amortized cost basis and the present value of expected cash flows and is recognized as an allowance on the balance sheet with a corresponding adjustment to earnings. The allowance should not exceed the amount by which the amortized cost basis exceeds fair value. As of December 31, 2022 and 2023, the fair value of the Group’s available-for-sale debt securities is approximate their amortized cost amounting to RMB 205,861 and RMB 50,143, respectively. The Group did not identify any factors that are indicative of impairment with respect to its available-for-sale debt securities. |
Accounts receivable, net | (g) Accounts receivable, net Accounts receivable mainly consists of amounts due from the Group’s customers, which is recorded net of allowance for credit losses. The Group adopted ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments using the modified retrospective transition method. The Group applied a current expected credit losses (“CECL”) model based on historical experience, the age of the accounts receivable balances, credit quality of its customers, economic conditions, and other factors that may affect its ability to collect from customers and the impact of CECL is not material for the years ended December 31, 2021, 2022 and 2023. Total allowance for credit losses Balance at December 31, 2021 1,148 Credit loss expense 2,571 Write-offs (89) Balance at December 31, 2022 3,630 Credit loss expense 1,950 Write-offs (1,298) Balance at December 31, 2023 4,282 |
Inventories | (h) Inventories Inventories, consisting of products available for sale, are accounted for using the weighted average cost method, and are valued at lower of cost or the net realizable value. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving or damaged products, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. Write-downs are recorded in cost of products sold in the consolidated statements of comprehensive loss. |
Property and equipment | (i) Property and equipment Property and equipment are stated at cost less accumulated depreciation and impairment. The renovations, betterments and interest cost incurred during construction are capitalized. Property and equipment are depreciated at their costs less impairment and residual value, if any, over the estimated useful lives on a straight-line basis. The estimated useful lives are as follows: Leasehold improvements Shorter of the lease term or their estimated useful lives Furniture, fixtures and equipment 3 - 5 years Electronic equipment 3 - 5 years Vehicles 4 - 5 years 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (i) Property and equipment (Continued) Construction in progress represents leasehold improvements under construction or being installed and is stated at cost. Cost comprises original cost of property and equipment, installation, construction and other direct costs. Construction in progress is transferred to leasehold improvements and depreciation commences when the asset is ready for its intended use. Expenditures for repairs and maintenance are expensed as incurred. Gain or loss on disposal of property and equipment, if any, is recognized in the consolidated statements of comprehensive loss as the difference between the net sales proceeds and the carrying amount of the underlying asset. Accumulated depreciation was RMB 117,400 and RMB 135,644 as of December 31, 2022 and 2023, respectively. Depreciation expense was RMB25,513, RMB39,081 and RMB20,769 for the years ended December 31, 2021, 2022 and 2023, respectively. There was no interest cost capitalized during the years ended December 31, 2021, 2022 and 2023. |
Intangible assets | (j) Intangible assets Intangible assets mainly consist of externally purchased software and licenses. Software are amortized over an estimated useful life of ten years on a straight-line basis. Licenses are amortized over the remaining estimated useful life on a straight-line basis. Accumulated amortization was RMB8,632 and RMB9,643 as of December 31, 2022 and 2023, respectively. Amortization expense was RMB1,708, RMB 1,738 and RMB1,011 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Impairment of long-lived assets | (k) Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be fully recoverable. When these events occur, the Group evaluates the impairment for the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. For the years ended December 31, 2021, 2022 and 2023, there was no impairment recognized for the Group’s long-lived assets. |
Long-term investments | (l) Long-term investments The Group’s investments in equity investees consist of investments in equity securities without readily determinable fair values and equity method investments in privately-held companies. The Group measures its equity securities without a readily determinable fair value at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Group accounts for its equity investments over which it has significant influence but does not own a majority equity interest or otherwise control using the equity method. The Group adjusts the carrying amount of the investments and recognizes in earnings its share of the earnings or loss of the investee after the date of investment. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements of comprehensive loss equal to the amount by which the carrying value exceeds the fair value of the investment. |
Revenue recognition | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (m) Revenue recognition The Group follows five steps for its revenue recognition under Accounting Standard Codification (“ASC”)606: ● ● ● ● ● The Group’s revenue is reported net of discounts, value added tax and related surcharges. The primary sources of the Group’s revenues are as follows: Product revenues The Group recognizes revenues from the sale of medicines, healthcare products and other wellness merchandise through its online platforms, including its internet website 1 Medicine Marketplace, cellular phone application, other online channels and its offline pharmacies mainly to individual consumers (the “B2C Business”). The Group also generates revenues from the sale of medicines to its pharmacy customers mainly through the online platform 1 Pharmacy (the “B2B Business”). Under both B2C Business and B2B Business, revenues from product sales are recognized at the point in time when the delivery is made and when title and risk of loss transfers to the consumers and pharmacy customers. Revenues are measured at the amount of consideration the Group expects to receive in exchange for transferring products to consumers and pharmacy customers (“transaction price”). The Group provides the right of return in circumstances when there is packing or delivery damage or other quality problems identified which is considered to be a form of variable consideration. The Group estimates sales returns based on historical experience and based on such, the amount of sales returns accrual was insignificant as of December 31, 2021, 2022 and 2023. The Group voluntarily provides discount coupons through its websites during its marketing activities. These coupons are not related to prior purchases, and can only be utilized in conjunction with subsequent purchases on the Group’s platforms. The coupons are recorded as a reduction of revenue at the time of use. Under both B2B and B2C Businesses the Group utilizes delivery service providers to deliver products to its consumers and pharmacy customers (“shipping activities”) but the delivery service is not considered as a separate obligation as the shipping activities are performed before the consumers and pharmacy customers obtain control of the products. Therefore, shipping activities are not considered a separate promised service to the consumers and pharmacy customers, but rather are activities to fulfill the Group’s promise to transfer the products and are recorded as fulfillment expenses. Product revenues are recorded net of surcharges and value added tax (“VAT”) ranging from 0% to 13% for different kinds of products based on the sales amount. Surcharges are sales related taxes representing the City Maintenance and Construction Tax and Education Surtax. The Group records revenues on a gross basis because the Group controls the products before they are transferred to the consumers and pharmacy customers determined on the basis that: (1) the Group is primarily responsible for fulfilling its promise to deliver the specified products to consumers and pharmacy customers; (2) the Group has inventory risk before the specified products are transferred to a consumers and pharmacy customers or after transfer of control to the consumers and pharmacy customers, and (3) the Group has discretion in establishing the price for the specified products. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (m) Revenue recognition (Continued) Service revenues Service revenues primarily consist of fees charged to third-party marketplace sellers for whom the Group acts as an agent to facilitate the marketplace sellers’ online sales of their products through the online platforms 1 Medicine Marketplace and 1 Pharmacy, which is referred to as marketplace service (“MP”) revenue. The Group has determined it is not the principal in the arrangement as it is not responsible to fulfill the order for the specified products, it does not bear the inventory risk for the products, nor does it have the ability to establish prices. The Group also provided digital marketing service, and supply chain management to customers (collectively referred to “other services”), which it recognizes over time when the customer simultaneously receives and consumes the benefits provided by the Group’s performance, or recognize at a point in time when the customer obtains control of the goods and services. Contract balances Accounts receivable represents amounts invoiced and revenue recognized prior to invoicing when the Group has satisfied its performance obligation and the unconditional right to payment. The estimated inventories in-transit relating to estimated returns are contract assets included in inventories. Contract liabilities consist of advance payments, which were recorded in accrued expenses and other current liabilities. |
Cost of products sold | (n) Cost of products sold Cost of products sold consists of the purchase price of products and inbound shipping charges. The Group periodically receives rebates from certain vendors in the form of cash or credits. The Group accounts for the rebates as a reduction to the price the Group pays for the products purchased and therefore records such amounts as a reduction of cost of products sold and inventory when recognized in the financial statements. Cost of products does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistics staff, logistics centers rental expenses and depreciation expenses. Therefore, the Group’s cost of products sold may not be comparable to other companies which include such expenses in their cost of products. |
Fulfillment expenses | (o) Fulfillment expenses Fulfillment expenses primarily consist of payroll, bonus and benefits of logistics staff, logistics centers rental expenses, depreciation expenses, shipping and handling expenses, and packaging expenses. |
Selling and marketing expenses | (p) Selling and marketing expenses Selling and marketing expenses primarily consist of payroll, bonus and benefits of sales and marketing staff, advertising costs, agency fees and costs for promotional materials. Advertising expenses are charged to the statements of comprehensive loss in the period incurred. The amounts of advertising expenses incurred were RMB 30,135, RMB 35,647 and RMB 35,684 for the years ended December 31, 2021, 2022 and 2023, respectively. |
Technology expenses | (q) Technology expenses Technology expenses primarily consist of technology infrastructure expenses, payroll, bonus and benefits of the employees, and costs associated with the computer, storage and telecommunications infrastructure for use in technology department. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (q) Technology expenses (continued) For internal and external use software, the Group expenses all costs incurred for the preliminary project stage and post implementation-operation stage of development, and costs associated with repair or maintenance of the existing platform. Costs incurred in the application development stage are capitalized and amortized over the estimated useful life. The amount of the Group’s technology expenses qualifying for capitalization has been insignificant, and as a result, all development costs incurred for development of internal used software have been expensed as incurred. |
General and administrative expenses | (r) General and administrative expenses General and administrative expenses primarily consist of payroll, bonus and benefit costs for corporate employees, legal, finance, rental expenses and other corporate overhead costs. |
Government grants | (s) Government grants Government grants represent rewards provided by the relevant PRC government authorities to the Group for tax refunds and support for investment in certain local districts, which are typically granted based on the amount of investments the Group made as well as income generated by the Group in such districts. Such subsidies allow the Group full discretion to utilize the funds and are used by the Group for general corporate purposes. Normally, the Group does not receive written confirmation from local governments indicating the approval of the cash subsidy before cash is received, and therefore cash subsidies are recognized when received or when all the conditions for their receipts have been satisfied. Government grants recognized were RMB 2,947, RMB 13,190 and RMB 7,463 for the years ended December 31, 2021, 2022 and 2023, respectively, which were recorded in other operating income (expenses), net. |
Income taxes | (t) Income taxes Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. As part of the process of preparing financial statements, the Group is required to estimate its income taxes in each of the jurisdictions in which it operates. The Group accounts for income taxes using the liability method. Under this method, deferred income taxes are recognized for tax consequences in future years of differences between the tax bases of assets and liabilities and their reported amounts in the financial statements at each year-end and tax loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates applicable for the differences that are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance when, based upon the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Group applies the provisions of ASC Topic 740, Income Taxes (“ASC 740”), in accounting for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes by prescribing the recognition threshold a tax position is required to meet before being recognized in the financial statements. The Group has elected to, as a policy, classify interest and penalties related to an uncertain tax position (if and when required) as part of income tax expense in the consolidated statements of comprehensive loss. The Group does not have any unrecognized tax benefits for the years ended December 31, 2021, 2022 and 2023. |
Value added taxes | (u) Value added taxes The Group’s PRC subsidiaries are subject to VAT at rates ranged from 0% to 13% on proceeds received from customers, and are entitled to a deduction for VAT already paid or borne on the products purchased by them. The VAT balance is recorded in other current assets or other current liabilities on the consolidated balance sheets. |
Comprehensive income (loss) | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (v) Comprehensive income (loss) Comprehensive income (loss) is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. During the periods presented, comprehensive income (loss) is reported in the consolidated statements of comprehensive loss, and other comprehensive loss includes foreign currency translation adjustments and fair value changes of available-for-sale debt securities. |
Foreign currency translation | (w) Foreign currency translation The reporting currency of the Group is the Renminbi (“RMB”). The functional currency of the Company and Yao Wang is the United States dollar (“US dollar”). The functional currency of all the other significant subsidiaries and the former VIEs is RMB. The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are re-measured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the year are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the consolidated statements of comprehensive loss. Assets and liabilities are translated from each entity’s functional currency to the reporting currency at the exchange rate on the balance sheet date. Equity amounts are translated at historical exchange rates, and revenues, expenses, gains and losses are translated using the average rate for the year. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of accumulated other comprehensive loss in the consolidated statements of shareholders’ equity (deficit). |
Concentration of credit risk | (x) Concentration of credit risk Financial instruments that potentially expose the Group to concentration of credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments, accounts receivable and prepayments. The Group places its cash and cash equivalents, restricted cash and short-term investments with financial institutions with high-credit ratings and quality. Accounts receivable mainly consist of amounts receivable from B2B customers, product delivery service providers and payment processing service providers, which are all with relatively good collection history. There are no significant concentrations of credit risk. Concentration of customers There were no customers individually representing 10% or more of revenues for the years ended December 31, 2021, 2022 and 2023. There were no customers accounted for 10% or more of balances of accounts receivable as of December 31, 2022 and 2023. |
Foreign currency risk | (y) Foreign currency risk Renminbi (“RMB”) is not a freely convertible currency. The State Administration of Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. The cash and cash equivalents of the Group included aggregated amounts of RMB 645,060 and RMB 564,317, which were denominated in RMB, as of December 31, 2022 and 2023, respectively. |
Fair value | (z) Fair value Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The fair value guidance describes three main approaches to measure the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates. The estimated fair value of the Group’s financial instruments of which the inputs used to value are classified as Level 2 and are not reported at fair value, including cash and cash equivalents, restricted cash, accounts receivable, other current assets, accounts payable, short-term borrowings, other current liabilities, approximates their carrying value due to their short-term nature. As of December 31, 2023, information about inputs into the fair value measurement of the Group’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair Value Measurements at Reporting Date Using Quoted Prices Significant Fair Value in Active Markets Significant Other Unobservable as of for Identical Observable Inputs December 31, 2023 Assets (Level 1) Inputs (Level 2) (Level 3) Short-term investments 50,143 — 50,143 — The fair values of wealth management products are the redemption price provided by the investment bank or fund company that sells such financial products. There are observable and market-based inputs but not quoted prices in active markets for identical assets. If statements are not available, the Group will measure fair value using valuation techniques that use current market-based parameters, such as currency rates. The total gain recognized for change in fair values of short-term investments is RMB 7,801, RMB 4,464 and RMB 4,166 for the years ended December 31, 2021, 2022 and 2023. |
Share-based compensation | 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (aa) Share-based compensation The Group grants share options and restricted share units of the Company and its subsidiary to eligible employees and a few non-employees and accounts for these share based awards in accordance with ASC 718 Compensation-Stock Compensation. Share-based awards are measured at the grant date fair value of the awards and recognized as expenses a) immediately at grant date if no vesting conditions are required; or b) using straight-line vesting method over the requisite service period, which is the vesting period. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards are reversed. A cancellation of an award that is not accepted by the concurrent grant of (or offer to grant) a replacement award or other valuable consideration shall be accounted for as a refund for no consideration. Correspondingly, any previously unrecognized compensation cost shall be recognized at the cancellation date. The Black Scholes option pricing model is applied in determining the estimated fair value of the options granted to employees. Market approach or income approach is applied in determining the fair value of the restricted shares of limited liability partnerships (“LLPs”). The Group estimates the Company’s subsidiary’s enterprise value for purposes of recording share-based compensation, and the information considered by the Company mainly include but are not limited to the pricing of recent rounds of financing, future cash flow forecasts, discount rates, and liquidity factors. The compensation expense for the awards with performance conditions is based upon the Group’s judgement of likely future performance and may be adjusted in future periods depending on actual performance. |
Treasury shares | (ab) Treasury shares Treasury shares represent shares repurchased by the Company that are no longer outstanding and are held by the Company. Treasury shares are accounted for under the cost method. Under the repurchase plan, the Company had repurchased an aggregate of 333,000, nil and nil ordinary shares on the open market for total cash consideration of RMB 5,887, nil and nil for the years ended December 31, 2021, 2022 and 2023. The repurchased shares are presented as “treasury shares” on the consolidated balance sheets. Repurchased shares were reserved for the share settlement upon share option exercises or RSU vests. |
loss per share | (ac) loss per share Basic loss per ordinary share is computed by dividing net loss attributable to ordinary shareholders by weighted average number of ordinary shares outstanding during the period. Diluted loss per ordinary share reflects the potential dilution that could occur if securities were exercised or converted into ordinary shares. The Group has stock options and restricted share units, which could potentially dilute basic loss per share in the future. To calculate the number of shares for diluted loss per share, the effect of the stock options and restricted share units is computed using the treasury stock method. Ordinary share equivalents are excluded from the computation of the diluted loss per share in years when their effect would be anti-dilutive. |
Segment reporting | (ad) Segment reporting In accordance with ASC 280, Segment Reporting, the Group’s chief operating decision maker (the “CODM”) has been identified as the Co-Chairmen and Chief Executive Officer, who review the segment information when making decisions about allocating resources and assessing performance of the Group. The Group classifies its operations into two segments: B2C segment and B2B segment whereby the B2C business represents revenue generated from individual consumers while B2B business represents revenue generated from corporate customers. There are no internal revenue transactions between the reportable segments. The Group does not distinguish expenses between segments in its internal reporting, and reports expenses by nature as a whole. Furthermore, the Group’s CODM is not provided with asset information by segment. As such, no asset information by segment is presented. The information of segment reporting is presented consistently for the years ended December 31, 2021, 2022 and 2023. The following tables summarize the Group’s product revenues and segment profit generated by its segments. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (ad) Segment reporting (Continued) Years Ended December 31, 2021 2022 2023 B2C segment Product revenues 491,855 408,305 357,975 Service revenues 30,896 33,223 19,388 Cost of products sold* (413,333) (345,065) (297,979) Segment profit for B2C Business 109,418 96,463 79,384 B2B segment Product revenues 11,839,850 12,995,131 14,483,935 Service revenues 63,301 80,039 86,831 Cost of products sold* (11,391,474) (12,331,657) (13,801,172) Segment profit for B2B Business 511,677 743,513 769,594 Total segment profit 621,095 839,976 848,978 * For segment reporting purpose, purchase rebate is allocated to B2C segment and B2B segment primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. The following is a reconciliation of the reportable segments’ measures of profit or loss to the Group’s consolidated loss before income taxes: Years Ended December 31, 2021 2022 2023 Total profit for reportable segments 621,095 839,976 848,978 Unallocated amounts: Fulfillment expenses (355,836) (401,414) (400,538) Selling and marketing expenses (513,146) (457,880) (448,387) General and administrative expenses (206,981) (205,623) (224,202) Technology expenses (189,284) (139,504) (124,341) Other operating income (expenses), net 2,012 (6,556) (1,607) Interest income 9,776 8,118 8,834 Interest expense (5,488) (13,443) (20,141) Foreign exchange gain (loss) 1,937 (7,875) 610 Other income, net 14,890 8,132 7,612 Loss before income tax (621,025) (376,069) (353,182) 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (ad) Segment reporting (Continued) Revenues from different product groups and services are as follows: Years Ended December 31, 2021 2022 2023 Product Revenues 12,331,705 13,403,436 14,841,910 Drugs 11,681,106 12,572,634 13,883,055 Nutritional supplements 442,497 554,789 631,122 Medical supplies and devices 124,919 164,916 157,504 Other products. 83,183 111,097 170,229 Service Revenues 94,197 113,262 106,219 MP Service 52,309 68,477 70,271 Other Services 41,888 44,785 35,948 Total 12,425,902 13,516,698 14,948,129 |
Leases | (ae) Leases Under ASC Topic 842, Leases (“ASC 842”), the Group determines if a contract is or contains a lease at the inception of the contract, and the Group classifies that lease as a finance lease if it meets certain criteria or as an operating lease when it does not. At the commencement date of a lease, the Group recognizes a lease liability for future fixed lease payments and a right-of-use (“ROU”) asset representing the right to use the underlying asset during the lease term. The lease liability is initially measured as the present value of the future fixed lease payments that will be made over the lease term. The lease term includes lessee options to extend the lease and periods occurring after a lessee early termination option, only to the extent it is reasonably certain that the Group will exercise such extension options and not exercise such early termination options, respectively. The future fixed lease payments are discounted using the rate implicit in the lease, if available, or the incremental borrowing rate (“IBR”). The Group’s IBR is estimated to approximate the interest rate on similar terms and payments and in economic environments where the leased asset is located. Current maturities and long-term portions of operating lease liabilities are classified as accrued expenses and other current liabilities and long-term operating lease liabilities, respectively, in the consolidated balance sheets. The ROU asset is measured at the amount of the lease liability with adjustments, if applicable, for lease prepayments made prior to or at lease commencement, initial direct costs incurred by the Group and lease incentives. The Group evaluates the carrying value of ROU assets if there are indicators of impairment and review the recoverability of the related asset group. The Group’s leases include offices and warehouses which are all classified as operating leases with fixed lease payments, or minimum payments, as contractually stated in the lease agreement. For operating leases, lease expense relating to fixed payments is recognized on a straight-line basis over the lease term. |
Non-controlling interests | (af) Non-controlling interests For the Company’s consolidated subsidiaries and former VIE, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated balance sheets and have been separately disclosed in the Group’s consolidated statements of operations and comprehensive loss to distinguish the interests from that of the Company. 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (ag) Redeemable non-controlling interest The Group classifies the redeemable non-controlling interest as mezzanine equity as the non-controlling interest is redeemable upon the occurrence of an event not solely within the control of the Group. Due to the probability of being redeemed, the Group adjusts the carrying amount of the mezzanine equity to equal the redemption value at the end of each reporting period as if it was the redemption date for the redeemable non-controlling interest. The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying amount adjusted for the redeemable non-controlling interest’s share of earnings or losses and other comprehensive income or loss, or its estimated redemption value. The resulting changes in the estimated redemption amount (increases or decreases) are recorded in net loss or profit attributable to non-controlling interests. These interests are presented on the consolidated balance sheets outside of equity under the caption “Redeemable non-controlling interest”. According to ASC 480, if a financial instrument will be redeemed only upon the occurrence of a conditional event, redemption of that instrument is conditional and, therefore, the instrument does not meet the definition of mandatorily redeemable financial instrument. The financial instrument would be assessed at each reporting period to determine whether circumstances have changed such that the instrument now meets the definition of a mandatorily redeemable instrument (that is, the event is no longer conditional). If the event has occurred, the condition is triggered, or the event has become certain to occur, the financial instrument is reclassified as a liability. |
Recently issued accounting pronouncements | (ah) Recently issued accounting pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires disclosure of specific categories in the rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendment also includes other changes to improve the effectiveness of income tax disclosures, including further disaggregation of income taxes paid for individually significant jurisdictions. This ASU is effective for annual periods beginning after December 15, 2024. Adoption of this ASU should be applied on a prospective basis. Early adoption is permitted. The Company does not expect the adoption of this ASU will have a significant impact on its consolidated financial statements. |
Convenience translation | (ai) Convenience translation Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive loss, and consolidated statements of cash flows from RMB into US dollar as of and for the year ended December 31, 2023 are solely for the convenience of the readers and were calculated at the rate of 7.0999, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 29, 2023. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US dollar at that rate on December 31, 2023, or at any other rate. |
Structured payment arrangement | (aj) Structured payment arrangements Reverse factoring arrangements 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (aj) Structured payment arrangements (Continued) In 2021, the Group entered into a structured payment arrangement with a bank (“reverse factoring arrangement”). Under the reverse factoring arrangement, certain suppliers were able to put their receivables from the Group to the bank for early payment. As a result of the reverse factoring arrangements, the payment terms of the Group’s original accounts payables were substantially modified and considered extinguished as the nature of the original liability has changed from accounts payables to loan borrowings from the bank. The agreement does not require that the entity provide assets pledged as security for the reverse factoring arrangement. The proceeds from the bank used to settle the payables and subsequent repayments to the bank are considered financing activities and reported as “Proceeds from other financing activities” and “Repayment for other financing activities” on the consolidated statements of cash flows, respectively. The interest expense charged from the bank at annual rate of 4.35%, is recorded in interest expense in the consolidated statements of comprehensive loss. As of December 31, 2022 and 2023, the outstanding confirmed amount from the reverse factoring arrangements were RMB 64,120 and RMB 98,109 respectively, which is repayable within one year and are included in “Accrued expenses and other current liabilities” on the consolidated balance sheets. The rollforward of obligations under its reverse factoring arrangements for years ended December 31, 2022, and 2023, are as follows: As of December 31, 2022 2023 The outstanding confirmed amount at the beginning of the year 46,900 64,120 The amount of obligation confirmed during the year 266,770 303,764 The amount of obligation paid during the year (249,550) (269,775) The outstanding confirmed amount at the end of the year 64,120 98,109 Factoring program In 2021, the Group entered into factoring agreement with recourse with a third-party financial institution, pursuant to which the institution will make an advance payment of accounts with credit term of 30 days typically. The term of the loan is mostly three months. The agreement requires that the entity provide RMB 2,000 as security deposit for the factoring arrangement. The Group does not derecognize customers’ accounts receivable when receiving advance payment from the institution. The Group is required to pay the principal and interest to the institution on due. The proceeds from the institution used to settle the accounts receivable and subsequent repayment to the financial institution are considered financing activities and reported as “Proceeds from other financing activities” and “Repayment for other financing activities” on the consolidated statements of cash flows, respectively. The interest rate charged from the institution was at annual rate of 8.5% in 2021, renewed in 2022 of 9% and in 2023 of 10.5%. As of December 31, 2022 and 2023, the outstanding borrowings from the factoring arrangements were RMB 40,112 and RMB 40,353 respectively, which is repayable within one year and are included in “Accrued expenses and other current liabilities” on the consolidated balance sheets. The rollforward of outstanding borrowing from the factoring arrangements for years ended December 31, 2022, and 2023, are as follows: As of December 31, 2022 2023 Outstanding borrowing at the beginning of the year 602 40,112 Borrowing received during the year 333,117 405,122 Borrowing repaid during the year (293,607) (404,881) Outstanding borrowing at the end of the year 40,112 40,353 2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Continued) (aj) Structured payment arrangement (Continued) Guaranteed customer loans Since 2022, the Group cooperated with a bank to provide a borrowing facility for its customers, who applied for loans directly with the bank. If the loans are approved by the bank, the proceeds, which represent the total order amount, are remitted to the Group by way of the customers’ entrustment. Customers repay the loan principal directly to the bank and the Group pays the loan interest at an annual interest rate, which is no more than 5.5%, within the shorter of borrowing period and 45 days. The agreement require that the entity provide RMB 10,000 as security for the factoring arrangement. Besides, the Group also provides guarantee to the bank with respect to its customers’ repayment of the loans. In the event that the customers default on the repayment, the Group must return the prepayments to the bank within a prescribed period of time. The substance of the arrangement is that the Group borrowed funds from the bank using the customers’ credit as collateral. The Group records the entire payment in “Accrued expenses and other current liabilities” on the consolidated balance sheets and recognize the interest expense as deduction of revenue in the consolidated statements of comprehensive loss. For customer loans received directly from the bank, the Group determines this portion was classified as “Proceeds from other financing activities” in its statements of cash flows. During the credit term, constructive receipts and disbursements are recognized by recognizing the repayment of loans as “Repayment for other financing activities” and the receipt of order payment as an operating cash inflow. The rollforward of outstanding guaranteed customer loans for years ended December 31, 2022, and 2023, are as follows: As of December 31, 2022 2023 Outstanding guaranteed customer loans at the beginning of the year — 46,512 Guaranteed during the year 46,512 742,464 Repaid by customers during the year — (733,977) Outstanding guaranteed customer loans at the end of the year 46,512 54,999 |
ORGANIZATION AND PRINCIPAL AC_2
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule of subsidiaries | As of December 31, 2023, the Group operates its business mainly through the following subsidiaries: Name of subsidiaries Date of Place of Percentage of Principal activities Yao Wang Corporation Limited (“Yao Wang “) June 4, 2013 Hong Kong 100% Investment holding 1 Pharmacy Technology August 12, 2013 Shanghai 86% Research and development, and consulting Yihao Pharmacy March 7, 2003 Guangdong 86% Warehousing, logistics and procurement Guangdong Yihao Pharmaceutical Chain Co., Ltd. (“Yihao Pharmaceutical Chain”) November 1, 2001 Guangdong 86% Retail Wuhan Central China Drug Trading Co., Ltd. (“Wuhan Huazhong”) August 5, 2015 Wuhan 60% Software development and information technology support Chongqing Yihao Pharmacy Co., Ltd.(“Chongqing Yihao Pharmacy”) May 18, 2018 Chongqing 86% Warehousing, logistics and procurement Tianjin Yihao Pharmacy Co., Ltd. (“Tianjin Yihao Pharmacy”) June 20, 2018 Tianjin 86% Warehousing, logistics and procurement Kunshan Yifang Pharmacy Co., Ltd. (“Kunshan Yifang Pharmacy”) July 30, 2018 Kunshan 86% Warehousing, logistics and procurement Hubei Yihao Pharmacy Co., Ltd (“Hubei Yihao Pharmacy”) Aug 31, 2019 Wuhuan 86% Warehousing, logistics and procurement Shanxi Yaofang Pharmacy Co., Ltd (“Shanxi Yaofang Pharmacy”) Oct 15, 2020 Shanxi 86% Warehousing, logistics and procurement Liaoning Yaofang Pharmacy Co., Ltd (“Liaoning Yaofang Pharmacy”) Nov 6, 2020 Liaoning 86% Warehousing, logistics and procurement |
SUMMARY OF PRINCIPAL ACCOUNTI_3
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |
Schedule of total allowance for credit losses | Total allowance for credit losses Balance at December 31, 2021 1,148 Credit loss expense 2,571 Write-offs (89) Balance at December 31, 2022 3,630 Credit loss expense 1,950 Write-offs (1,298) Balance at December 31, 2023 4,282 |
Schedule of estimated useful lives | Leasehold improvements Shorter of the lease term or their estimated useful lives Furniture, fixtures and equipment 3 - 5 years Electronic equipment 3 - 5 years Vehicles 4 - 5 years |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements at Reporting Date Using Quoted Prices Significant Fair Value in Active Markets Significant Other Unobservable as of for Identical Observable Inputs December 31, 2023 Assets (Level 1) Inputs (Level 2) (Level 3) Short-term investments 50,143 — 50,143 — |
Schedule of product revenues and segment profit (loss) generated by its segments | Years Ended December 31, 2021 2022 2023 B2C segment Product revenues 491,855 408,305 357,975 Service revenues 30,896 33,223 19,388 Cost of products sold* (413,333) (345,065) (297,979) Segment profit for B2C Business 109,418 96,463 79,384 B2B segment Product revenues 11,839,850 12,995,131 14,483,935 Service revenues 63,301 80,039 86,831 Cost of products sold* (11,391,474) (12,331,657) (13,801,172) Segment profit for B2B Business 511,677 743,513 769,594 Total segment profit 621,095 839,976 848,978 * For segment reporting purpose, purchase rebate is allocated to B2C segment and B2B segment primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. |
Schedule of reconciliation of the reportable segments' measures of profit or loss to consolidated loss before income taxes | Years Ended December 31, 2021 2022 2023 Total profit for reportable segments 621,095 839,976 848,978 Unallocated amounts: Fulfillment expenses (355,836) (401,414) (400,538) Selling and marketing expenses (513,146) (457,880) (448,387) General and administrative expenses (206,981) (205,623) (224,202) Technology expenses (189,284) (139,504) (124,341) Other operating income (expenses), net 2,012 (6,556) (1,607) Interest income 9,776 8,118 8,834 Interest expense (5,488) (13,443) (20,141) Foreign exchange gain (loss) 1,937 (7,875) 610 Other income, net 14,890 8,132 7,612 Loss before income tax (621,025) (376,069) (353,182) |
Schedule of revenues from different product groups and services | Years Ended December 31, 2021 2022 2023 Product Revenues 12,331,705 13,403,436 14,841,910 Drugs 11,681,106 12,572,634 13,883,055 Nutritional supplements 442,497 554,789 631,122 Medical supplies and devices 124,919 164,916 157,504 Other products. 83,183 111,097 170,229 Service Revenues 94,197 113,262 106,219 MP Service 52,309 68,477 70,271 Other Services 41,888 44,785 35,948 Total 12,425,902 13,516,698 14,948,129 |
Schedule of obligations under its reverse factoring arrangements | As of December 31, 2022 2023 The outstanding confirmed amount at the beginning of the year 46,900 64,120 The amount of obligation confirmed during the year 266,770 303,764 The amount of obligation paid during the year (249,550) (269,775) The outstanding confirmed amount at the end of the year 64,120 98,109 |
Schedule of outstanding borrowings from factoring arrangement | As of December 31, 2022 2023 Outstanding borrowing at the beginning of the year 602 40,112 Borrowing received during the year 333,117 405,122 Borrowing repaid during the year (293,607) (404,881) Outstanding borrowing at the end of the year 40,112 40,353 |
Schedule of guaranteed customer loans | As of December 31, 2022 2023 Outstanding guaranteed customer loans at the beginning of the year — 46,512 Guaranteed during the year 46,512 742,464 Repaid by customers during the year — (733,977) Outstanding guaranteed customer loans at the end of the year 46,512 54,999 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SHORT-TERM INVESTMENTS | |
Schedule of short-term investments | As of December 31, 2022 2023 Wealth Management Products 205,861 50,143 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INVENTORIES | |
Schedule of inventories | As of December 31, 2022 2023 Products 1,498,900 1,419,396 |
PREPAYMENTS AND OTHER CURRENT_2
PREPAYMENTS AND OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PREPAYMENTS AND OTHER CURRENT ASSETS | |
Schedule of prepayments and other current assets | As of December 31, 2022 2023 Receivable from payment platforms 68,287 33,060 Rebate receivable from suppliers 68,236 74,751 Advance to suppliers 55,477 17,190 Value added tax recoverable 51,634 54,283 Deposits 24,267 31,231 Prepaid expense 6,656 5,905 Others 7,509 9,403 Total 282,066 225,823 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of maturities of lease liabilities | As of December 31, Year Ending December 31, 2023 2024 45,999 2025 39,567 2026 15,871 2027 7,223 2028 2,425 Total lease payment 111,085 Less: imputed interest 5,931 Present value of minimum operating lease payments 105,154 |
Schedule of weighted-average remaining lease terms and discount rates | As of December 31, 2022 2023 Weighted-average remaining lease term 3.0 years 2.7 years Weighted-average discount rate 4.3 % 4.0 % |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | |
Schedule of accrued expenses and other current liabilities | As of December 31, 2022 2023 Reclassified from redeemable non-controlling interests (Note) — 240,474 Advance from customers 296,361 124,995 Salary and welfare payables 84,693 78,298 Accrued expenses 80,002 78,145 Current portion of operating lease liabilities 64,734 42,530 Liability under reverse factoring program 64,120 98,109 Guaranteed customer loans 46,512 54,999 Liability under factoring program 40,112 40,353 Tax payables 37,733 6,945 Deposits from marketplace sellers 27,211 28,504 Others 39,793 24,943 Total 781,271 818,295 |
REDEEMABLE NON-CONTROLLING IN_2
REDEEMABLE NON-CONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REDEEMABLE NON-CONTROLLING INTERESTS | |
Schedule of redeemable non-controlling interests | 2022 2023 Opening balance as of January 1 1,000,849 1,056,939 Net loss attributable to the redeemable non-controlling interest (32,329) (30,852) Accretion of redeemable non-controlling interest 88,419 86,941 Payment of redeemable non-controlling interest — (1,729) Reclassified to accrued expenses and other current liabilities — (240,474) Ending balance as of December 31 1,056,939 870,825 |
NET REVENUES (Tables)
NET REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NET REVENUES | |
Schedule of disaggregation of revenue streams by type of customers and nature of services offered | Years Ended December 31, 2021 2022 2023 Product Revenues 12,331,705 13,403,436 14,841,910 B2C Business 491,855 408,305 357,975 B2B Business 11,839,850 12,995,131 14,483,935 Service Revenues 94,197 113,262 106,219 MP Service 52,309 68,477 70,271 Other Services 41,888 44,785 35,948 Total 12,425,902 13,516,698 14,948,129 |
Schedule of movements of the accounts receivable and advances from customers | Accounts Advances from Receivable Customers Ending Balance as of December 31, 2021 404,469 176,256 Increase/(decrease), net 84,406 120,105 Ending Balance as of December 31, 2022 488,875 296,361 Increase/(decrease), net 47,948 (171,366) Ending Balance as of December 31, 2023 536,823 124,995 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of assumptions used to estimate the fair values of the share options granted | 2021 Risk-free rate of return 0.84% Contractual life of option 10 years Expected term 6.25 years Estimated volatility rate 39% Dividend yield — Fair value per ordinary share US$3.08 |
Schedule of restricted share unit activities and shares | Number of Weighted Restricted Average Grant Date Share Units Fair Value US$ Restricted share units outstanding at December 31, 2022 1,792,403 3.33 Granted 3,356,610 1.30 Forfeited (383,570) 2.63 Vested (867,116) 2.97 Restricted share units outstanding at December 31, 2023 3,898,327 1.73 |
Schedule of share based compensation expense | Years Ended December 31, 2021 2022 2023 RMB RMB RMB General and administrative expenses 69,718 86,992 113,536 Selling and marketing expenses 50,532 50,110 76,976 Technology expenses 25,343 20,282 35,658 Total 145,593 157,384 226,170 |
Employee ownership plan of 1 Pharmacy Technology | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of restricted share unit activities and shares | Weighted average Number of Restricted Weighted Average remaining contractual Aggregate intrinsic Share Units of LLPs Grant Date Fair Value term value RMB Non-vested restricted shares outstanding at December 31, 2022 31,571,186 14.06 2.07 427,158 Granted 3,041,555 13.50 Forfeited (3,730,484) 14.01 Vested (18,968,249) 13.12 Canceled (11,914,008) 13.84 Non-vested restricted shares outstanding at December 31, 2023 — — — — |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of employee option activity under the Plan | Weighted Weighted average average remaining Aggregate Number of exercise contractual intrinsic Options price term value US$ Years US$ Outstanding at December 31, 2022 5,360,005 0.01 5.34 8,040 Granted — — Forfeited (50,000) 0.01 Expired — — Exercised (3,117,644) 0.01 47 Outstanding at December 31, 2023 2,192,361 0.01 4.15 1,677 Vested and exercisable as of December 31, 2023 2,041,648 0.01 4.03 1,563 Vested or expected to vest as of December 31, 2023 2,192,361 0.01 4.15 1,677 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER SHARE | |
Schedule of computation of basic and diluted loss per share | Years Ended December 31, 2021 2022 2023 Net loss attributable to ordinary shareholders (669,810) (416,878) (392,693) Weighted average number of ordinary shares-basic and diluted 165,866,901 166,634,121 168,609,128 Net loss per ordinary share-basic and diluted (4.04) (2.50) (2.33) |
Summary of share options and restricted share units outstanding excluded from calculation of diluted loss per share | As of December 31, 2021 2022 2023 Share options and nonvested restricted share units 8,312,535 7,223,033 6,136,483 |
INCOME TAX EXPENSE (Tables)
INCOME TAX EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAX EXPENSE | |
Schedule of reconciliation between the effective income tax rate and the PRC statutory income tax rate | Years Ended December 31, 2022 2023 PRC statutory tax rate 25 % 25 % Tax effect of other expenses that are not deductible in determining taxable profit (4) % (1) % Effect of R&D super deduction 3 % 4 % Effect of enacted tax rate change 2 % 3 % Effect of change in valuation allowance (26) % (31) % Effective tax rate 0 % 0 % |
Schedule of components of deferred income tax assets and liabilities | As of December 31, 2022 2023 Deferred tax assets: Net loss carryforward 631,139 670,062 Advertising expense carried forward for future deduction 3,928 — Accrued expenses and payroll payable 22,899 18,967 Provision for impairment of assets 5,597 5,663 Others 260 94 Valuation allowance (663,823) (694,786) Total deferred tax assets — — Deferred tax liabilities: Total deferred tax liabilities — — |
ORGANIZATION AND PRINCIPAL AC_3
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | Dec. 31, 2023 |
Yao Wang | |
Organization | |
Percentage of shareholdings | 100% |
1 Pharmacy Technology | |
Organization | |
Percentage of shareholdings | 86% |
Yihao Pharmacy | |
Organization | |
Percentage of shareholdings | 86% |
Yihao Pharmaceutical Chain | |
Organization | |
Percentage of shareholdings | 86% |
Wuhan Huazhong | |
Organization | |
Percentage of shareholdings | 60% |
Chongquing Yihao Pharmacy | |
Organization | |
Percentage of shareholdings | 86% |
Tianjin Yihao Pharmacy | |
Organization | |
Percentage of shareholdings | 86% |
Kunshan Yifang Pharmacy | |
Organization | |
Percentage of shareholdings | 86% |
Hubei Yihao Pharmacy | |
Organization | |
Percentage of shareholdings | 86% |
Shanxi Yaofang Pharmacy | |
Organization | |
Percentage of shareholdings | 86% |
Liaoning Yaofang Pharmacy Co., Ltd | |
Organization | |
Percentage of shareholdings | 86% |
SUMMARY OF PRINCIPAL ACCOUNTI_4
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Basis of presentation (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2020 CNY (¥) | Aug. 31, 2020 | Dec. 31, 2024 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||||||||
Net loss | ¥ 353,433 | $ 49,781 | ¥ 376,069 | ¥ 621,025 | |||||
Net cash used in operating activities | (447,244) | $ (62,993) | (23,152) | (688,837) | |||||
Working capital | 188,268 | ||||||||
Shareholder's deficit | (583,451) | (414,599) | $ (82,177) | ||||||
Restricted cash | ¥ 1,318,534 | 623,548 | 716,791 | 760,672 | 87,824 | $ 100,958 | |||
Outstanding borrowings | 338,075 | 178,990 | 47,617 | ||||||
Other current liabilities including accounts payable and accrued expenses | 2,406,988 | ||||||||
Redeemable non-controlling interests | 870,825 | 1,056,939 | $ 122,653 | ||||||
Net loss attributable to the redeemable non-controlling interests shareholders | 41,753 | ||||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | 205,000 | ||||||||
Reclassified from redeemable non-controlling interests | 240,474 | ||||||||
Redeemable non-controlling interests | 870,825 | ¥ 1,056,939 | ¥ 1,000,849 | ||||||
Remaining non-controlling interest holders with redemption amount | 526,435 | ||||||||
Credit facility | |||||||||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||||||||
Maximum borrowing capacity | ¥ 130,000,000 | ||||||||
Debt Instrument, Term | 1 year | 1 year | |||||||
December 31, 2024 | |||||||||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||||||||
Net loss attributable to the redeemable non-controlling interests shareholders | ¥ 49,862 | ||||||||
Redeemable Noncontrolling Interest, Equity, Redemption Value | ¥ 229,820 | ||||||||
Carrying amount of 383,577 | |||||||||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||||||||
Redeemable non-controlling interests | ¥ 383,577 | ||||||||
Redeemable non-controlling interest, first installment, redemption percentage | 10% | 10% | |||||||
Redeemable non-controlling interest, second installment, redemption percentage | 20% | 20% | |||||||
Redeemable non-controlling interest, remaining percentage redeemable after redemptions | 70% | 70% | |||||||
Duration for repayment of redeemable Non-Controlling Interest Redeemed | 60 days | 60 days | |||||||
Carrying amount of 212,666 | |||||||||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||||||||
Redeemable non-controlling interests | ¥ 212,666 | ||||||||
Redeemable non-controlling interest, first installment, redemption percentage | 10% | 10% | |||||||
Redeemable non-controlling interest, remaining percentage redeemable after redemptions | 90% | 90% | |||||||
Duration for repayment of redeemable Non-Controlling Interest Redeemed | 60 days | 60 days | |||||||
1 Pharmacy Technology | |||||||||
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | |||||||||
Annual interest rate {as a percentage) | 6% | 6% | 0.06% | 0.06% |
SUMMARY OF PRINCIPAL ACCOUNTI_5
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Basis of consolidation (Details) - item | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2021 | |
Basis of consolidation | ||
Number of Medicine Marketplaces | 1 | |
Number of Pharmacy | 1 | |
Maximum percentage of holding of equity interest in enterprises which have E-commerce business | 100% | |
Former VIE and former VIE's subsidiaries | ||
Basis of consolidation | ||
Percentage of contribution to consolidated total assets | 36% | |
Percentage of contribution to consolidated total liabilities | 36% | |
Percentage of contribution to consolidated revenue | 41% | |
Percentage of contribution to consolidated operating cash flow | 22% | |
Percentage of contribution to consolidated investing cash flow | 30% | |
Percentage of contribution to consolidated financing cash flow | 18% | |
Yihao Pharmaceutical Chain | ||
Basis of consolidation | ||
Percentage of holding of equity interest in enterprises which have E-commerce business | 100% | |
Proxy Agreement | ||
Basis of consolidation | ||
Prior written notice period to terminate the agreement | 30 days | |
Exclusive Support Service Agreement | ||
Basis of consolidation | ||
Term of agreement (in years) | 10 years | |
Extended term of agreement (in years) | 10 years | |
Consecutive months to terminate or advance terminate of agreement in failure to perform its obligation | 6 months | |
China | ||
Basis of consolidation | ||
Number of Medicine Marketplaces | 1 | |
Number of Pharmacy | 1 |
SUMMARY OF PRINCIPAL ACCOUNTI_6
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Balances of the VIEs and Short-term investments (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019 | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Current Assets: | ||||||
Cash and cash equivalents | ¥ 603,523 | ¥ 673,669 | ¥ 661,390 | $ 85,004 | ||
Restricted cash | 20,025 | 43,122 | 99,282 | 2,820 | ||
Accounts receivable, net | 536,823 | 488,875 | 404,469 | 75,610 | ||
Notes receivable, net | 77,598 | 43,332 | 10,929 | |||
Inventories | 1,419,396 | 1,498,900 | 199,918 | |||
Prepayments and other current assets | 225,823 | 282,066 | 31,807 | |||
Total current assets | 2,933,331 | 3,235,825 | 413,150 | |||
Property and equipment, net | 34,340 | 48,497 | 4,837 | |||
Intangible assets, net | 2,256 | 3,267 | 318 | |||
Long-term investments | 2,000 | 2,000 | 282 | |||
Operating lease right-of-use assets | 103,799 | 163,877 | 14,621 | |||
Other non-current assets | 13,310 | 20,348 | 1,875 | |||
Total assets | 3,089,036 | 3,473,814 | 435,083 | |||
Current liabilities | ||||||
Accounts payable | (1,588,693) | (1,764,849) | (223,763) | |||
Accrued expenses and other current liabilities | (818,295) | (781,271) | (115,255) | |||
Total current liabilities | (2,745,063) | (2,725,110) | (386,635) | |||
Long-term operating lease liabilities | (62,624) | (100,469) | (8,820) | |||
Total liabilities | (2,812,932) | (2,825,579) | $ (396,194) | |||
Net revenues | 14,948,129 | $ 2,105,399 | 13,516,698 | 12,425,902 | ||
Total cost and expenses | (15,298,226) | (2,154,710) | (13,887,699) | (13,068,042) | ||
Net (loss) income | (392,693) | (55,311) | (416,878) | (669,810) | ||
Net cash used in operating activities | (447,244) | (62,993) | (23,152) | (688,837) | ||
Net cash used in investing activities | 151,743 | 21,372 | (47,173) | 60,138 | ||
Net cash provided by (used in) financing activities | 205,978 | $ 29,011 | 22,735 | ¥ 74,339 | ||
Short-term investments | ||||||
Impairment on available-for-sale debt securities | ¥ 50,143 | ¥ 205,861 | ||||
VIEs | ||||||
Current liabilities | ||||||
Percentage of consolidated revenues | 3% |
SUMMARY OF PRINCIPAL ACCOUNTI_7
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Accounts receivable net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | ||
Balance at December 31, beginning of the year | $ 3,630 | $ 1,148 |
Credit loss expense | 1,950 | 2,571 |
Write-offs | (1,298) | (89) |
Balance at December 31, end of the year | $ 4,282 | $ 3,630 |
SUMMARY OF PRINCIPAL ACCOUNTI_8
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Property and equipment (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT | |||
Accumulated depreciation | ¥ 135,644 | ¥ 117,400 | |
Depreciation expense | 20,769 | 39,081 | ¥ 25,513 |
Interest cost capitalized | ¥ 0 | ¥ 0 | ¥ 0 |
Furniture, fixtures and equipment | Minimum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful lives | 3 years | ||
Furniture, fixtures and equipment | Maximum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful lives | 5 years | ||
Electronic equipment | Minimum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful lives | 3 years | ||
Electronic equipment | Maximum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful lives | 5 years | ||
Vehicles | Minimum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful lives | 4 years | ||
Vehicles | Maximum | |||
PROPERTY AND EQUIPMENT | |||
Estimated useful lives | 5 years |
SUMMARY OF PRINCIPAL ACCOUNTI_9
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Intangible assets and Impairment of long-lived assets (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible assets | |||
Estimated useful life | 10 years | ||
Accumulated amortization | ¥ 9,643 | ¥ 8,632 | |
Amortization expense | 1,011 | 1,738 | ¥ 1,708 |
Impairment, Long-Lived Asset, Held-for-Use | |||
Impairment recognized | ¥ 0 | ¥ 0 | ¥ 0 |
SUMMARY OF PRINCIPAL ACCOUNT_10
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Product revenues and Service revenues (Details) | Dec. 31, 2023 item |
Product revenues | |
Number of Medicine Marketplaces | 1 |
Number of Pharmacy | 1 |
Minimum percentage of surcharges and value added tax | 0% |
Maximum percentage of surcharges and value added tax | 13% |
SUMMARY OF PRINCIPAL ACCOUNT_11
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Selling and marketing expenses and Others (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Selling and marketing expenses | |||
Advertising expenses | ¥ 35,684 | ¥ 35,647 | ¥ 30,135 |
Government grants | |||
Government grants | 7,463 | 13,190 | 2,947 |
Income taxes | |||
Unrecognized tax benefits | ¥ 0 | ¥ 0 | ¥ 0 |
Value added taxes | |||
Minimum percentage value added tax | 0% | ||
Maximum percentage value added tax | 13% |
SUMMARY OF PRINCIPAL ACCOUNT_12
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Concentration of credit risk (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Foreign currency risk | ||||
Cash and cash equivalents | ¥ 603,523 | $ 85,004 | ¥ 673,669 | ¥ 661,390 |
Foreign currency risk, Renminbi ("RMB") | ||||
Foreign currency risk | ||||
Cash and cash equivalents | ¥ 564,317 | ¥ 645,060 |
SUMMARY OF PRINCIPAL ACCOUNT_13
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Fair value (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Exchange traded fund products and wealth management products | |||
Assets and liabilities measured at fair value | |||
Total gain recognized for change in fair values | ¥ 4,166 | ¥ 4,464 | ¥ 7,801 |
Recurring | Short-term investments | |||
Assets and liabilities measured at fair value | |||
Fair Value, asset and liability | 50,143 | ||
Recurring | Level 2 | Short-term investments | |||
Assets and liabilities measured at fair value | |||
Fair Value, asset and liability | ¥ 50,143 |
SUMMARY OF PRINCIPAL ACCOUNT_14
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Treasury shares (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Significant Accounting Policies [Line Items] | |||
Number of shares repurchased | ¥ 5,887 | ||
Treasury Shares | |||
Significant Accounting Policies [Line Items] | |||
Total cash consideration of shares repurchased | 0 | 0 | 333,000 |
Number of shares repurchased | ¥ 0 | ¥ 0 | ¥ 5,887 |
SUMMARY OF PRINCIPAL ACCOUNT_15
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Product revenues and segment profit (loss) (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) segment | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Segment reporting | ||||
Number of operating segment | segment | 2 | 2 | ||
Net revenues | ¥ 14,948,129 | $ 2,105,399 | ¥ 13,516,698 | ¥ 12,425,902 |
Cost of products sold | (14,099,151) | $ (1,985,824) | (12,676,722) | (11,804,807) |
Segment profit | 848,978 | 839,976 | 621,095 | |
Product | ||||
Segment reporting | ||||
Net revenues | 14,841,910 | 13,403,436 | 12,331,705 | |
Service | ||||
Segment reporting | ||||
Net revenues | 106,219 | 113,262 | 94,197 | |
MP Service | ||||
Segment reporting | ||||
Net revenues | 70,271 | 68,477 | 52,309 | |
Other Services | ||||
Segment reporting | ||||
Net revenues | 35,948 | 44,785 | 41,888 | |
B2C segment | ||||
Segment reporting | ||||
Cost of products sold | (297,979) | (345,065) | (413,333) | |
Segment profit | 79,384 | 96,463 | 109,418 | |
B2C segment | Product | ||||
Segment reporting | ||||
Net revenues | 357,975 | 408,305 | 491,855 | |
B2C segment | Service | ||||
Segment reporting | ||||
Net revenues | 19,388 | 33,223 | 30,896 | |
B2B segment | ||||
Segment reporting | ||||
Cost of products sold | (13,801,172) | (12,331,657) | (11,391,474) | |
Segment profit | 769,594 | 743,513 | 511,677 | |
B2B segment | Product | ||||
Segment reporting | ||||
Net revenues | 14,483,935 | 12,995,131 | 11,839,850 | |
B2B segment | Service | ||||
Segment reporting | ||||
Net revenues | ¥ 86,831 | ¥ 80,039 | ¥ 63,301 |
SUMMARY OF PRINCIPAL ACCOUNT_16
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Reconciliation of reportable segment revenues (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES | ||||
Total profit for reportable segments | ¥ 848,978 | ¥ 839,976 | ¥ 621,095 | |
Unallocated amounts: | ||||
Fulfillment expenses | (400,538) | $ (56,415) | (401,414) | (355,836) |
Selling and marketing expenses | (448,387) | (63,154) | (457,880) | (513,146) |
General and administrative expenses | (224,202) | (31,578) | (205,623) | (206,981) |
Technology expenses | (124,341) | (17,513) | (139,504) | (189,284) |
Other operating income (expenses), net | (1,607) | (226) | (6,556) | 2,012 |
Interest income | 8,834 | 1,244 | 8,118 | 9,776 |
Interest expense | (20,141) | (2,837) | (13,443) | (5,488) |
Foreign exchange gain (loss) | 610 | 86 | (7,875) | 1,937 |
Other income, net | 7,612 | 1,072 | 8,132 | 14,890 |
Loss before income taxes | ¥ (353,182) | $ (49,746) | ¥ (376,069) | ¥ (621,025) |
SUMMARY OF PRINCIPAL ACCOUNT_17
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Revenues from different product groups and services (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Segment reporting | ||||
Net revenues | ¥ 14,948,129 | $ 2,105,399 | ¥ 13,516,698 | ¥ 12,425,902 |
Product | ||||
Segment reporting | ||||
Net revenues | 14,841,910 | 13,403,436 | 12,331,705 | |
Drugs | ||||
Segment reporting | ||||
Net revenues | 13,883,055 | 12,572,634 | 11,681,106 | |
Nutritional supplements | ||||
Segment reporting | ||||
Net revenues | 631,122 | 554,789 | 442,497 | |
Medical supplies and devices | ||||
Segment reporting | ||||
Net revenues | 157,504 | 164,916 | 124,919 | |
Other products | ||||
Segment reporting | ||||
Net revenues | 170,229 | 111,097 | 83,183 | |
Service | ||||
Segment reporting | ||||
Net revenues | 106,219 | 113,262 | 94,197 | |
MP Service | ||||
Segment reporting | ||||
Net revenues | 70,271 | 68,477 | 52,309 | |
Other Services | ||||
Segment reporting | ||||
Net revenues | ¥ 35,948 | ¥ 44,785 | ¥ 41,888 |
SUMMARY OF PRINCIPAL ACCOUNT_18
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Leases and Convenience translation (Details) | Dec. 31, 2023 |
Convenience translation | |
Convenience translation rate (in USD/RMB) | 7.0999 |
SUMMARY OF PRINCIPAL ACCOUNT_19
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Structured payment arrangement - Reverse factoring arrangements (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Annual interest rate | 4.35% | 4.35% | ||
The outstanding confirmed amount at the beginning of the year | ¥ 64,120 | |||
The amount of obligation confirmed during the year | 1,451,352 | $ 204,419 | ¥ 646,399 | ¥ 61,900 |
The outstanding confirmed amount at the end of the year | ¥ 98,109 | ¥ 64,120 | ||
Factoring program | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Annual interest rate | 10.50% | 10.50% | 9% | 8.50% |
The outstanding confirmed amount at the beginning of the year | ¥ 64,120 | ¥ 46,900 | ||
The amount of obligation confirmed during the year | 303,764 | 266,770 | ||
The amount of obligation paid during the year | (269,775) | (249,550) | ||
The outstanding confirmed amount at the end of the year | ¥ 98,109 | ¥ 64,120 | ¥ 46,900 |
SUMMARY OF PRINCIPAL ACCOUNT_20
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Structured payment arrangement - Factoring program (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Annual interest rate | 4.35% | ||
Outstanding borrowing at the beginning of the year | ¥ 40,112 | ¥ 602 | |
Borrowing received during the year | 405,122 | 333,117 | |
Borrowing repaid during the year | (404,881) | (293,607) | |
Outstanding borrowing at the end of the year | ¥ 40,353 | ¥ 40,112 | |
Factoring program | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Security deposit | ¥ 2,000 | ||
Annual interest rate | 10.50% | 9% | 8.50% |
SUMMARY OF PRINCIPAL ACCOUNT_21
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - Structured payment arrangement - Guaranteed customer loans (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Annual interest rate | 4.35% | |
Outstanding guaranteed customer loans at the beginning of the year | ¥ 46,512 | |
Guaranteed during the year | 742,464 | ¥ 46,512 |
Repaid by customers during the year | (733,977) | |
Outstanding guaranteed customer loans at the end of the year | ¥ 54,999 | ¥ 46,512 |
Guaranteed customer loans | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Annual interest rate | 5.50% | |
Borrowing period | 45 days | |
Security deposit | ¥ 10,000 |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Short-term investments | |||||
Short-term investments measured at fair value | ¥ 50,143 | ¥ 205,861 | $ 7,062 | ||
Change in fair value of available-for-sale investments | 4,343 | $ 612 | 4,810 | ¥ 8,312 | |
Realized gains transferred from other comprehensive income to other income | 4,166 | 4,464 | 7,801 | ||
Amount of credit loss recognized | 0 | 0 | ¥ 0 | ||
Wealth Management Products | |||||
Short-term investments | |||||
Short-term investments measured at fair value | ¥ 50,143 | ¥ 205,861 |
NOTES RECEIVABLE (Details)
NOTES RECEIVABLE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Notes receivable | ||||
Notes receivable | ¥ 77,598 | ¥ 43,332 | $ 10,929 | |
Amount of credit loss recognized | 0 | 0 | ¥ 0 | |
Borrowings | ||||
Notes receivable | ||||
Notes receivable | 77,598 | 43,332 | ||
Pledged as collateral | Notes receivable pledged | ||||
Notes receivable | ||||
Notes receivable | ¥ 10,168 | ¥ 950 |
INVENTORIES (Details)
INVENTORIES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
INVENTORIES | |||||
Products | ¥ 1,419,396 | ¥ 1,498,900 | $ 199,918 | ||
Inventory write-down | ¥ 19,910 | $ 2,804 | ¥ 28,498 | ¥ 45,976 |
PREPAYMENTS AND OTHER CURRENT_3
PREPAYMENTS AND OTHER CURRENT ASSETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) |
PREPAYMENTS AND OTHER CURRENT ASSETS | |||
Receivable from payment platform | ¥ 33,060 | ¥ 68,287 | |
Rebate receivable from suppliers | 74,751 | 68,236 | |
Advance to suppliers | 17,190 | 55,477 | |
Value added tax recoverable | 54,283 | 51,634 | |
Deposits | 31,231 | 24,267 | |
Prepaid expense | 5,905 | 6,656 | |
Others | 9,403 | 7,509 | |
Total | ¥ 225,823 | $ 31,807 | ¥ 282,066 |
LEASES (Details)
LEASES (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | |
Leases | ||||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Long-term operating lease liabilities | Long-term operating lease liabilities | Long-term operating lease liabilities | |
Operating lease right-of-use assets | ¥ 103,799 | ¥ 163,877 | $ 14,621 | |
Current portion of operating lease liabilities | 42,530 | 64,734 | ||
Long-term operating lease liabilities | 62,624 | 100,469 | $ 8,820 | |
Variable lease cost | 0 | 0 | ¥ 0 | |
Lease expenses | 62,610 | 75,827 | 73,756 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 61,952 | 73,407 | 77,722 | |
Right-of-use assets obtained in exchange for the operating lease liabilities | 58,364 | 10,274 | 225,003 | |
Interest expense for the operating lease | ¥ 5,932 | ¥ 10,327 | ¥ 8,294 | |
Weighted-average remaining lease term (in years) | 2 years 8 months 12 days | 3 years | 2 years 8 months 12 days | |
Weighted-average discount rate (as a percent) | 4% | 4.30% | 4% | |
Maturities of lease liabilities in accordance with Leases (Topic 842) | ||||
2024 | ¥ 45,999 | |||
2025 | 39,567 | |||
2026 | 15,871 | |||
2027 | 7,223 | |||
2028 | 2,425 | |||
Total lease payment | 111,085 | |||
Less: imputed interest | 5,931 | |||
Present value of minimum operating lease payments | ¥ 105,154 |
SHORT-TERM BORROWINGS (Details)
SHORT-TERM BORROWINGS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||
Jun. 30, 2021 CNY (¥) | Jun. 30, 2020 CNY (¥) | Sep. 30, 2019 CNY (¥) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 USD ($) | Mar. 31, 2023 CNY (¥) | Nov. 30, 2022 CNY (¥) | |
Notes receivable | ||||||||||
Short-term Debt | ¥ 338,075 | ¥ 178,990 | $ 47,617 | |||||||
Proceeds from loan | ¥ 919,635 | $ 129,528 | 788,153 | ¥ 406,837 | ||||||
Annual interest rate | 4.35% | 4.35% | ||||||||
Repayments of debt | ¥ 750,127 | $ 105,653 | ¥ 868,821 | ¥ 376,429 | ||||||
1 Pharmacy Technology | Industrial Bank | ||||||||||
Notes receivable | ||||||||||
Maximum borrowing capacity | ¥ 200,000 | ¥ 200,000 | ||||||||
Prime rate | 1 Pharmacy Technology | Industrial Bank | ||||||||||
Notes receivable | ||||||||||
Spread on variable rate | 0.78% | 0.55% | 0.55% | 0.85% | ||||||
Revolving credit facility | ||||||||||
Notes receivable | ||||||||||
Short-term Debt | ¥ 338,075 | ¥ 178,990 | ||||||||
Amount of undrawn balance under credit facilities agreements | ¥ 281,925 | |||||||||
Average annual interest rate | 3.86% | 4.23% | 3.86% | |||||||
Revolving credit facility | China CITIC Bank | ||||||||||
Notes receivable | ||||||||||
Maximum borrowing capacity | ¥ 20 | |||||||||
Proceeds from line of credit | ¥ 20,000 | |||||||||
Repayments of line of credit | 10 | |||||||||
Line of credit outstanding | ¥ 19,990 | |||||||||
Interest rate | 3.70% | 3.70% | ||||||||
Amount of undrawn balance under credit facilities agreements | ¥ 1,926 | |||||||||
Revolving credit facility | 1 Pharmacy Technology | China Merchant Bank | ||||||||||
Notes receivable | ||||||||||
Maximum borrowing capacity | ¥ 100,000 | 200,000 | ||||||||
Spread on variable rate | 0.30% | |||||||||
Proceeds from line of credit | 779,635 | ¥ 728,153 | ||||||||
Repayments of line of credit | 700,540 | 808,821 | ||||||||
Line of credit outstanding | ¥ 198,085 | ¥ 118,990 | ||||||||
Interest rate | 4.55% | 4.55% | 3.60% | |||||||
Revolving credit facility | 1 Pharmacy Technology | Industrial Bank | ||||||||||
Notes receivable | ||||||||||
Maximum borrowing capacity | ¥ 100,000 | |||||||||
Line of credit drawn down facility | ¥ 20,000 | ¥ 30,000 | ||||||||
Repayments of line of credit | 30,000 | 30,000 | ||||||||
Line of credit outstanding | 20,000 | 30,000 | ||||||||
Revolving credit facility | Prime rate | 1 Pharmacy Technology | Industrial Bank | ||||||||||
Notes receivable | ||||||||||
Spread on variable rate | 0.35% | |||||||||
Yihao Pharmacy | 1 Pharmacy Technology | Shanghai Pudong Development Bank | ||||||||||
Notes receivable | ||||||||||
Short-term Debt | 50,000 | 30,000 | ||||||||
Proceeds from loan | ¥ 50,000 | ¥ 30,000 | ||||||||
Annual interest rate | 3.65% | 4% | 3.65% | |||||||
Repayments of debt | ¥ 30,000 | ¥ 30,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||
Reclassified from redeemable non-controlling interests (Note) | ¥ 240,474 | |||
Advances from customers | 124,995 | ¥ 296,361 | ¥ 176,256 | |
Salary and welfare payables | 78,298 | 84,693 | ||
Accrued expenses | 78,145 | 80,002 | ||
Current portion of operating lease liabilities | 42,530 | 64,734 | ||
Liability under reverse factoring program | 98,109 | 64,120 | ||
Guaranteed customer loans | 54,999 | 46,512 | ||
Liability under factoring program | 40,353 | 40,112 | ¥ 602 | |
Tax payables | 6,945 | 37,733 | ||
Deposits from marketplace sellers | 28,504 | 27,211 | ||
Others | 24,943 | 39,793 | ||
Total | ¥ 818,295 | $ 115,255 | ¥ 781,271 |
REDEEMABLE NON-CONTROLLING IN_3
REDEEMABLE NON-CONTROLLING INTERESTS (Details) - CNY (¥) ¥ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Aug. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | |
REDEEMABLE NON-CONTROLLING INTERESTS | ||||
Net loss attributable to the redeemable non-controlling interests shareholders | ¥ 41,753 | |||
Redeemable non-controlling interests | ||||
Opening balance | 1,056,939 | ¥ 1,000,849 | ||
Net loss attributable to the redeemable non-controlling interest | (30,852) | (32,329) | ||
Accretion of redeemable non-controlling interest | 86,941 | 88,419 | ||
Payment of redeemable non-controlling interest | (1,729) | |||
Reclassified to accrued expenses and other current liabilities | (240,474) | |||
Ending balance | ¥ 870,825 | ¥ 1,056,939 | ||
1 Pharmacy Technology | ||||
REDEEMABLE NON-CONTROLLING INTERESTS | ||||
Ordinary shares issued to private placement investors( as a percentage) | 9.20% | 9.20% | ||
Total consideration | ¥ 934,820 | ¥ 934,820 | ||
Annual interest rate {as a percentage) | 6% | 6% | 0.06% | |
Total number of shares increased | 66,318,885 | 66,318,885 |
NON-CONTROLLING INTERESTS (Deta
NON-CONTROLLING INTERESTS (Details) ¥ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 CNY (¥) | Nov. 30, 2020 CNY (¥) shares | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
NON-CONTROLLING INTERESTS | ||||||
Net loss attributable to non-controlling interest | ¥ 16,829 | $ 2,370 | ¥ 15,281 | ¥ 27,819 | ||
Additional Paid-in Capital | ||||||
NON-CONTROLLING INTERESTS | ||||||
Capital contribution from non-controlling shareholders | ¥ 19,228 | |||||
Non-controlling Interests | ||||||
NON-CONTROLLING INTERESTS | ||||||
Capital contribution from non-controlling shareholders | ¥ 51,728 | |||||
1 Pharmacy Technology | ||||||
NON-CONTROLLING INTERESTS | ||||||
Shares issued | shares | 32,500,000 | |||||
Issuance Price | ¥ 32,500 | |||||
Vesting within two years | ||||||
NON-CONTROLLING INTERESTS | ||||||
Vesting shares (as a percentage) | 50% | |||||
Vesting over two years thereafter | ||||||
NON-CONTROLLING INTERESTS | ||||||
Vesting shares (as a percentage) | 50% |
ORDINARY SHARES (Details)
ORDINARY SHARES (Details) | 1 Months Ended | 12 Months Ended | |||||
Jan. 25, 2019 shares | Sep. 30, 2018 Vote shares | Dec. 31, 2023 $ / shares shares | Dec. 31, 2022 $ / shares shares | Dec. 31, 2021 shares | Aug. 14, 2020 shares | Dec. 31, 2020 shares | |
Ordinary shares Class A | |||||||
ORDINARY SHARES | |||||||
Shares authorized (in shares) | 800,000,000 | 800,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | |||||
Ordinary shares, outstanding | 96,588,106 | 95,034,624 | |||||
Ordinary shares Class B | |||||||
ORDINARY SHARES | |||||||
Shares authorized (in shares) | 72,000,000 | 72,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00005 | $ 0.00005 | |||||
Ordinary shares, outstanding | 72,000,000 | 72,000,000 | |||||
Ordinary Shares | Ordinary shares Class A | |||||||
ORDINARY SHARES | |||||||
Shares issued | 5,500,000 | 15,969,110 | |||||
Issuance of ordinary shares upon the exercise of stock options and vesting of restricted share units | 2,011,970 | 886,138 | 1,128,084 | ||||
Ordinary shares, outstanding | 99,044,214 | 95,034,624 | 94,148,486 | 93,353,402 | |||
Conversion of preferred shares into Class A ordinary shares upon IPO (in shares) | 75,118,996 | ||||||
Issuance of ordinary shares upon initial public offering ("IPO"), net of issuance costs of RMB19,134 (in shares) | 5,500,000 | 15,969,110 | |||||
Number of votes entitled per ordinary share | Vote | 1 | ||||||
Stock repurchased | 2,330,620 | ||||||
Ordinary Shares | Ordinary shares Class B | |||||||
ORDINARY SHARES | |||||||
Ordinary shares, outstanding | 72,000,000 | 72,000,000 | 72,000,000 | 72,000,000 | |||
Number of votes entitled per ordinary share | Vote | 15 |
NET REVENUES - Disaggregation o
NET REVENUES - Disaggregation of revenues (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Disaggregation of revenues | ||||
Net revenues | ¥ 14,948,129 | $ 2,105,399 | ¥ 13,516,698 | ¥ 12,425,902 |
Product [Member] | ||||
Disaggregation of revenues | ||||
Net revenues | 14,841,910 | 13,403,436 | 12,331,705 | |
B2C segment | ||||
Disaggregation of revenues | ||||
Net revenues | 357,975 | 408,305 | 491,855 | |
B2B segment | ||||
Disaggregation of revenues | ||||
Net revenues | 14,483,935 | 12,995,131 | 11,839,850 | |
Service | ||||
Disaggregation of revenues | ||||
Net revenues | 106,219 | 113,262 | 94,197 | |
MP Service | ||||
Disaggregation of revenues | ||||
Net revenues | 70,271 | 68,477 | 52,309 | |
Other Services | ||||
Disaggregation of revenues | ||||
Net revenues | ¥ 35,948 | ¥ 44,785 | ¥ 41,888 |
NET REVENUES - Contract balance
NET REVENUES - Contract balance (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | |
Accounts Receivable | |||
Opening Balance | ¥ 488,875 | ¥ 404,469 | |
Increase/(decrease), net | 47,948 | 84,406 | |
Ending Balance | 536,823 | $ 75,610 | 488,875 |
Advances from Customers | |||
Opening Balance | 296,361 | 176,256 | |
Increase/(decrease), net | (171,366) | 120,105 | |
Ending Balance | 124,995 | 296,361 | |
Revenue recognized | ¥ 296,361 | ¥ 176,256 | |
MP Service [Member] | |||
Contract balance | |||
Maximum term of contract with customer | 1 year | 1 year | 1 year |
NET REVENUES - Additional infor
NET REVENUES - Additional information (Details) ¥ in Thousands | Dec. 31, 2023 CNY (¥) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Amount of revenue expected to be recognized | ¥ 124,995 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue performance obligation | 1 month |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||||
Dec. 31, 2023 CNY (¥) item | Dec. 31, 2023 USD ($) item $ / shares | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 $ / shares | Dec. 31, 2021 CNY (¥) | Dec. 31, 2023 CNY (¥) | Oct. 27, 2022 $ / shares | Sep. 30, 2013 shares | |
SHARE-BASED COMPENSATION | ||||||||
Total compensation cost recognized | ¥ 226,170 | ¥ 157,384 | ¥ 145,593 | |||||
Stock Options | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Contractual term of options granted | 10 years | 10 years | ||||||
Vesting period | 4 years | 4 years | ||||||
Percentage of stock awards vesting each year | 25% | 25% | ||||||
Vested and exercisable (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Number of grantees affected | item | 51 | 51 | ||||||
Aggregate intrinsic value | ¥ 6,652 | |||||||
Weighted-average grant-date fair value of the options granted | $ / shares | $ 0.70 | |||||||
Total intrinsic value of options exercised | ¥ 330 | $ 47 | 641 | 2,334 | ||||
Total compensation cost recognized | ¥ 6,206 | ¥ 47,117 | ¥ 25,565 | |||||
Unrecognized compensation expense | 3,879 | |||||||
Weighted average period of unvested share options | 1 year 4 months 24 days | 1 year 4 months 24 days | ||||||
Board of Directors | Stock Options | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Aggregate intrinsic value | ¥ 42,100 | |||||||
Ordinary Shares | Board of Directors | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Number of shares authorized for issuance under share-based payment arrangement | shares | 21,928,555 | |||||||
Equity Incentive Plan | Ordinary Shares | Maximum | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Number of shares authorized for issuance under share-based payment arrangement | shares | 1,287,500 |
SHARE-BASED COMPENSATION - Non-
SHARE-BASED COMPENSATION - Non-Employee Share Options (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) item ¥ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares | Dec. 31, 2021 CNY (¥) ¥ / shares | Dec. 31, 2023 USD ($) $ / shares shares | |
SHARE-BASED COMPENSATION | ||||
Weighted average exercise price | $ / shares | $ 0.01 | |||
Total compensation cost recognized | ¥ 226,170 | ¥ 157,384 | ¥ 145,593 | |
Options outstanding (in shares) | shares | 45,795 | |||
Weighted average remaining contractual term | 4 years 10 months 10 days | |||
Aggregate intrinsic value | $ | $ 249 | |||
Granted (in shares) | shares | 0 | |||
Non-Employee Share options | ||||
SHARE-BASED COMPENSATION | ||||
Contractual term of options granted | 10 years | |||
Vesting period | 4 years | |||
Vesting percentage (as a percent) | 25% | |||
Weighted average exercise price | $ / shares | $ 0.01 | |||
Number of grantees affected | item | 4 | |||
Total incremental compensation cost | ¥ 0 | ¥ 617 | ||
Weighted-average grant-date fair value of the options granted | ¥ / shares | ¥ 0 | ¥ 0 | ¥ 0 | |
Total intrinsic value of options exercised | ¥ 0 | |||
Total compensation cost recognized | ¥ 0 | ¥ 639 | ¥ 668 |
SHARE-BASED COMPENSATION - Assu
SHARE-BASED COMPENSATION - Assumptions used to estimate the fair values of the share options granted (Details) - Stock Options - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | ||
Risk-free rate of return, minimum | 0.84% | |
Contractual life of option | 10 years | |
Expected term | 6 years 3 months | |
Fair value per ordinary share | $ 3.08 | |
Minimum | ||
SHARE-BASED COMPENSATION | ||
Estimated volatility rate, minimum | 39% |
SHARE-BASED COMPENSATION - Empl
SHARE-BASED COMPENSATION - Employee and Non-Employee Share Options Activity (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 CNY (¥) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) shares | Dec. 31, 2021 CNY (¥) | Oct. 27, 2022 $ / shares | |
Number of Options | ||||||
Granted (in shares) | shares | 0 | 0 | ||||
Outstanding at end of the year (in shares) | shares | 45,795 | 45,795 | ||||
Weighted average exercise price | ||||||
Outstanding at end of the year (in dollars per share) | $ / shares | $ 0.01 | |||||
Weighted average remaining contractual term | ||||||
Outstanding (in years) | 4 years 10 months 10 days | 4 years 10 months 10 days | ||||
Average intrinsic value | ||||||
Outstanding at end of the year | $ | $ 249 | |||||
Stock Options | ||||||
Number of Options | ||||||
Outstanding at beginning of the year (in shares) | shares | 5,360,005 | 5,360,005 | ||||
Forfeited (in shares) | shares | (50,000) | (50,000) | ||||
Exercised (in shares) | shares | (3,117,644) | (3,117,644) | ||||
Outstanding at end of the year (in shares) | shares | 2,192,361 | 2,192,361 | 5,360,005 | 5,360,005 | ||
Vested and exercisable at end of the year (in shares) | shares | 2,041,648 | |||||
Vested and expected to vest at end of the year (in shares) | shares | 2,192,361 | |||||
Weighted average exercise price | ||||||
Outstanding at beginning of the year (in dollars per share) | $ / shares | $ 0.01 | |||||
Forfeited (in dollars per share) | $ / shares | 0.01 | |||||
Exercised (in dollars per share) | $ / shares | 0.01 | |||||
Outstanding at end of the year (in dollars per share) | $ / shares | 0.01 | $ 0.01 | ||||
Vested and exercisable at end of the year (in dollars per share) | $ / shares | 0.01 | $ 0.01 | ||||
Vested and expected to vest at end of the year (in dollars per share) | $ / shares | $ 0.01 | |||||
Weighted average remaining contractual term | ||||||
Outstanding (in years) | 4 years 1 month 24 days | 4 years 1 month 24 days | 5 years 4 months 2 days | 5 years 4 months 2 days | ||
Vested and exercisable (in years) | 4 years 10 days | 4 years 10 days | ||||
Vested and expected to vest (in years) | 4 years 1 month 24 days | 4 years 1 month 24 days | ||||
Average intrinsic value | ||||||
Outstanding at beginning of the year | $ | $ 8,040 | |||||
Outstanding at end of the year | $ | 1,677 | $ 8,040 | ||||
Exercised | 47 | ¥ 330 | ¥ 641 | ¥ 2,334 | ||
Vested and exercisable at end of the year | $ | 1,563 | |||||
Vested and expected to vest at end of the year | $ | $ 1,677 | |||||
Non-Employee Share options | ||||||
Weighted average exercise price | ||||||
Outstanding at end of the year (in dollars per share) | $ / shares | $ 0.01 | |||||
Average intrinsic value | ||||||
Exercised | ¥ | ¥ 0 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Share Units and Employee ownership plan (Details) ¥ / shares in Units, ¥ in Thousands | 6 Months Ended | 12 Months Ended | ||||||
Dec. 28, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 CNY (¥) $ / shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2022 CNY (¥) $ / shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | Dec. 31, 2021 $ / shares | |
Weighted Average Grant Date Fair Value | ||||||||
Total compensation cost recognized | ¥ | ¥ 226,170 | ¥ 157,384 | ¥ 145,593 | |||||
Restricted share units | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Contractual term of options granted | 10 years | |||||||
Vesting period | 4 years | |||||||
Number of Restricted Share Units | ||||||||
Beginning balance | 1,792,403 | |||||||
Granted | 3,356,610 | |||||||
Forfeited | (383,570) | |||||||
Vested | (867,116) | (837,238) | (894,988) | |||||
Ending balance | 1,792,403 | 3,898,327 | 1,792,403 | |||||
Weighted Average Grant Date Fair Value | ||||||||
Beginning balance | $ / shares | $ 3.33 | |||||||
Granted (in dollars per share) | $ / shares | 1.30 | $ 1.26 | $ 5.27 | |||||
Forfeited | $ / shares | 2.63 | |||||||
Vested | $ / shares | 2.97 | |||||||
Ending balance | $ / shares | $ 1.73 | $ 3.33 | ||||||
Aggregate intrinsic value of share units exercised | ¥ | ¥ 17,681 | ¥ 17,072 | ¥ 20,167 | |||||
Total fair value of restricted share units vested | ¥ | 18,261 | 23,921 | 22,395 | |||||
Total compensation cost recognized | ¥ | 15,611 | ¥ 22,410 | ¥ 25,711 | |||||
Unrecognized compensation expense | ¥ | ¥ 36,380 | $ 36,380 | ||||||
Weighted average period of unvested share options | 6 months | |||||||
Restricted share units | First year anniversary | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Vesting percentage (as a percent) | 25% | |||||||
Employee ownership plan of 1 Pharmacy Technology | ||||||||
Number of Restricted Share Units | ||||||||
Beginning balance | 31,571,186 | |||||||
Granted | 3,041,555 | |||||||
Forfeited | (3,730,484) | |||||||
Vested | (18,968,249) | |||||||
Canceled | 11,914,008 | |||||||
Ending balance | 31,571,186 | 31,571,186 | ||||||
Weighted Average Grant Date Fair Value | ||||||||
Beginning balance | ¥ / shares | ¥ 14.06 | |||||||
Granted (in dollars per share) | ¥ / shares | 13.50 | ¥ 13.50 | ¥ 13.74 | |||||
Forfeited | ¥ / shares | 14.01 | |||||||
Vested | ¥ / shares | 13.12 | |||||||
Canceled | ¥ / shares | ¥ 13.84 | |||||||
Ending balance | ¥ / shares | ¥ 14.06 | ¥ 14.06 | ||||||
Weighted average remaining contractual term, outstanding (in years) | 2 years 25 days | |||||||
Aggregate intrinsic value | ¥ | ¥ 427,158 | ¥ 427,158 | $ 427,158 | |||||
Total fair value of restricted share units vested | ¥ | ¥ 32,500 | |||||||
Total compensation cost recognized | ¥ | ¥ 152,991 | ¥ 0 | ¥ 204,353 | ¥ 87,218 | ¥ 93,649 |
SHARE-BASED COMPENSATION - Em_2
SHARE-BASED COMPENSATION - Employee ownership plan of Yaofang (Details) ¥ / shares in Units, ¥ in Thousands | 6 Months Ended | 12 Months Ended | ||||||
Dec. 28, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) ¥ / shares | Dec. 31, 2023 CNY (¥) item ¥ / shares | Dec. 31, 2023 CNY (¥) $ / shares ¥ / shares | Dec. 31, 2022 CNY (¥) ¥ / shares | Dec. 31, 2022 $ / shares ¥ / shares | Dec. 31, 2021 CNY (¥) ¥ / shares | Dec. 31, 2021 $ / shares ¥ / shares | |
SHARE-BASED COMPENSATION | ||||||||
Share based compensation expense | ¥ 226,170 | ¥ 157,384 | ¥ 145,593 | |||||
Total compensation cost recognized | 226,170 | ¥ 157,384 | ¥ 145,593 | |||||
Employee ownership plan of 1 Pharmacy Technology | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Issuance Price | ¥ 32,500 | |||||||
Fair value of Ordinary Shares | ¥ / shares | ¥ 14.5 | ¥ 14.5 | ¥ 14.5 | ¥ 14.5 | ¥ 14.5 | ¥ 14.74 | ¥ 14.74 | |
Share based compensation expense | ¥ 152,991 | ¥ 0 | ¥ 204,353 | ¥ 87,218 | ¥ 93,649 | |||
Number of grantees affected | item | 46 | |||||||
Unrecognized compensation expense | ¥ 2,289 | ¥ 2,289 | ||||||
Weighted-average grant-date fair value of share units granted | ¥ / shares | ¥ 13.50 | ¥ 13.50 | ¥ 13.74 | |||||
Total fair value of restricted share units vested | ¥ 0 | ¥ 0 | ¥ 0 | |||||
Total compensation cost recognized | ¥ 152,991 | ¥ 0 | ¥ 204,353 | 87,218 | 93,649 | |||
Employee ownership plan of 1 Pharmacy Technology | Tranche One | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Vesting percentage (as a percent) | 50% | |||||||
Employee ownership plan of 1 Pharmacy Technology | Tranche Two | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Vesting percentage (as a percent) | 50% | |||||||
Restricted share units | ||||||||
SHARE-BASED COMPENSATION | ||||||||
Issuance Price | ¥ 18,261 | 23,921 | 22,395 | |||||
Share based compensation expense | 15,611 | 22,410 | 25,711 | |||||
Weighted-average grant-date fair value of share units granted | $ / shares | ¥ 1.30 | ¥ 1.26 | ¥ 5.27 | |||||
Total compensation cost recognized | ¥ 15,611 | ¥ 22,410 | ¥ 25,711 | |||||
Weighted average period of unvested share options | 6 months |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share-based compensation for all share options and restricted share units (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |||
Total compensation cost recognized | ¥ 226,170 | ¥ 157,384 | ¥ 145,593 |
General and administrative expenses | |||
SHARE-BASED COMPENSATION | |||
Total compensation cost recognized | 113,536 | 86,992 | 69,718 |
Selling and marketing expenses | |||
SHARE-BASED COMPENSATION | |||
Total compensation cost recognized | 76,976 | 50,110 | 50,532 |
Technology expenses | |||
SHARE-BASED COMPENSATION | |||
Total compensation cost recognized | ¥ 35,658 | ¥ 20,282 | ¥ 25,343 |
LOSS PER SHARE - Computation of
LOSS PER SHARE - Computation of basic and diluted loss per share (Details) ¥ / shares in Units, $ / shares in Units, ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) ¥ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 CNY (¥) ¥ / shares shares | Dec. 31, 2021 CNY (¥) ¥ / shares shares | |
LOSS PER SHARE | ||||
Net loss attributable to ordinary shareholders | ¥ (392,693) | $ (55,311) | ¥ (416,878) | ¥ (669,810) |
Weighted average number of ordinary shares-basic | 168,609,128 | 168,609,128 | 166,634,121 | 165,866,901 |
Weighted average number of ordinary shares-diluted | 168,609,128 | 168,609,128 | 166,634,121 | 165,866,901 |
Net loss per ordinary share-basic | (per share) | ¥ (2.33) | $ (0.33) | ¥ (2.50) | ¥ (4.04) |
Net loss per ordinary share-diluted | (per share) | ¥ (2.33) | $ (0.33) | ¥ (2.50) | ¥ (4.04) |
LOSS PER SHARE - Share options
LOSS PER SHARE - Share options and restricted share units outstanding excluded from calculation of diluted loss per share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share options and Nonvested restricted share units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Excluded from the calculation of diluted loss per share (in shares) | 6,136,483 | 7,223,033 | 8,312,535 |
INCOME TAX EXPENSE (Details)
INCOME TAX EXPENSE (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Income Taxes | ||||
Provision for income taxes | ¥ 251 | $ 35 | ¥ 0 | ¥ 0 |
Hong Kong | ||||
Income Taxes | ||||
Provision for income taxes | ¥ 0 | |||
Reconciliation between the effective income tax rate and the PRC statutory income tax rate (as a percent) | ||||
Statutory tax rate | 16.50% | 16.50% | ||
PRC | ||||
Income Taxes | ||||
Preferential tax rate | 15% | 15% | ||
Reconciliation between the effective income tax rate and the PRC statutory income tax rate (as a percent) | ||||
Statutory tax rate | 25% | 25% | 25% | |
Tax effect of other expenses that are not deductible in determining taxable profit | (1.00%) | (1.00%) | (4.00%) | |
Effect of R&D super deduction | 4% | 4% | 3% | |
Effect of enacted tax rate change | 3% | 3% | 2% | |
Effect of change in valuation allowance | (31.00%) | (31.00%) | (26.00%) | |
Effective tax rate | 0% | 0% | 0% |
INCOME TAX EXPENSE - Principal
INCOME TAX EXPENSE - Principal components of deferred income tax assets and liabilities (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Deferred tax assets: | ||
Net loss carryforward | ¥ 670,062 | ¥ 631,139 |
Advertising expense carried forward for future deduction | 3,928 | |
Accrued expenses and payroll payable | 18,967 | 22,899 |
Provision for impairment of assets | 5,663 | 5,597 |
Others | 94 | 260 |
Valuation allowance | (694,786) | (663,823) |
Tax loss carryforwards | ¥ 2,680,250 | |
Statute of limitations period according to the PRC Tax Administration and Collection Law (in years) | 3 years | |
Extension period for statute of limitations under special circumstances (in years) | 5 years | |
Amount of minimum underpayment of tax liability listed as special circumstance for extension period for statute of limitations | ¥ 100 | |
Withholding income taxes for undistributed profits | ¥ 0 | ¥ 0 |
MAINLAND CHINA CONTRIBUTION P_2
MAINLAND CHINA CONTRIBUTION PLAN (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
MAINLAND CHINA CONTRIBUTION PLAN | |||
Contribution for employee benefits | ¥ 61,725 | ¥ 67,384 | ¥ 81,468 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
RESTRICTED NET ASSETS | |||
Appropriations from after tax profit to reserve fund (as a percent) | 10% | ||
Limit of statutory reserve fund as a percentage of registered capital, after which allocations to statutory reserves are no longer required | 50% | ||
Appropriation to statutory reserve | ¥ 0 | ¥ 0 | ¥ 0 |
Share capital and restricted cash | ¥ 618,830 | ¥ 618,830 |
ADDITIONAL FINANCIAL INFORMAT_2
ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I - BALANCE SHEETS (Details) ¥ in Thousands, $ in Thousands | Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) |
Current Assets: | ||||
Cash and cash equivalents | ¥ 603,523 | $ 85,004 | ¥ 673,669 | ¥ 661,390 |
Short term investments | 50,143 | 7,062 | 205,861 | |
Prepayments and other current assets | 225,823 | 31,807 | 282,066 | |
Total current assets | 2,933,331 | 413,150 | 3,235,825 | |
Total assets | 3,089,036 | 435,083 | 3,473,814 | |
Total liabilities | 2,812,932 | 396,194 | 2,825,579 | |
SHAREHOLDERS' DEFICIT | ||||
Treasury shares (2,330,620 shares as of December 31 2021 and 2022) | (5,887) | (829) | (40,859) | |
Additional paid-in capital | 3,169,114 | 446,360 | 2,977,174 | |
Accumulated deficit | (3,819,249) | (537,930) | (3,426,556) | |
Accumulated other comprehensive income | 72,514 | 10,214 | 75,586 | |
Total 111, Inc.' deficit | (583,451) | (82,177) | (414,599) | |
Total liabilities, mezzanine equity and equity | 3,089,036 | 435,083 | 3,473,814 | |
Ordinary shares Class A | ||||
SHAREHOLDERS' DEFICIT | ||||
Ordinary shares, value | 32 | 5 | 31 | |
Ordinary shares Class B | ||||
SHAREHOLDERS' DEFICIT | ||||
Ordinary shares, value | 25 | 3 | 25 | |
Parent | ||||
Current Assets: | ||||
Cash and cash equivalents | 166,942 | 23,513 | 4,873 | |
Short term investments | 55,755 | |||
Prepayments and other current assets | 1,948 | 274 | 3,168 | |
Total current assets | 168,890 | 23,787 | 63,796 | |
Total assets | 168,890 | 23,787 | 63,796 | |
Other current liabilities | 13,883 | 1,955 | 8,876 | |
Amount due to subsidiaries and former VIE | 187,606 | 26,424 | 73,128 | |
Deficit in subsidiaries and former VIE | 550,852 | 77,585 | 396,391 | |
Total liabilities | 752,341 | 105,964 | 478,395 | |
SHAREHOLDERS' DEFICIT | ||||
Treasury shares (2,330,620 shares as of December 31 2021 and 2022) | (5,887) | (829) | (40,859) | |
Additional paid-in capital | 3,169,114 | 446,360 | 2,977,174 | |
Accumulated deficit | (3,819,249) | (537,930) | (3,426,556) | |
Accumulated other comprehensive income | 72,514 | 10,214 | 75,586 | |
Total 111, Inc.' deficit | (583,451) | (82,177) | (414,599) | |
Total liabilities, mezzanine equity and equity | 168,890 | 23,787 | 63,796 | |
Parent | Ordinary shares Class A | ||||
SHAREHOLDERS' DEFICIT | ||||
Ordinary shares, value | 32 | 5 | 31 | |
Parent | Ordinary shares Class B | ||||
SHAREHOLDERS' DEFICIT | ||||
Ordinary shares, value | ¥ 25 | $ 3 | ¥ 25 |
ADDITIONAL FINANCIAL INFORMAT_3
ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I - STATEMENTS OF COMPREHENSIVE LOSS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Operating expenses: | ||||
General and administrative expenses | ¥ (224,202) | $ (31,578) | ¥ (205,623) | ¥ (206,981) |
Interest income | 8,834 | 1,244 | 8,118 | 9,776 |
Other operating income, net | (1,607) | (226) | (6,556) | 2,012 |
Other income, net | 7,612 | 1,072 | 8,132 | 14,890 |
Loss before income taxes | (353,182) | (49,746) | (376,069) | (621,025) |
Net loss attributable to ordinary shareholders | (392,693) | (55,311) | (416,878) | (669,810) |
Other comprehensive income (loss) (net of tax of nil) | ||||
Unrealized gains of available-for-sale securities | 4,343 | 612 | 4,810 | 8,312 |
Realized gains of available-for-sale securities | (4,166) | (587) | (4,464) | (7,801) |
Foreign currency translation adjustments | (3,249) | (458) | 15,869 | (4,051) |
Comprehensive loss | (395,765) | (55,744) | (400,663) | (673,350) |
Parent | ||||
Operating expenses: | ||||
General and administrative expenses | (19,303) | (2,719) | (19,613) | (12,141) |
Interest income | 1,772 | 250 | 12 | 26 |
Other operating income, net | 50 | |||
Other income, net | 3,546 | 499 | 3,985 | 7,089 |
Loss before income taxes | (13,985) | (1,970) | (15,616) | (4,976) |
Equity in loss from subsidiaries and share of loss in former VIE | (378,708) | (53,341) | (401,262) | (664,834) |
Net loss attributable to ordinary shareholders | (392,693) | (55,311) | (416,878) | (669,810) |
Other comprehensive income (loss) (net of tax of nil) | ||||
Unrealized gains of available-for-sale securities | 640 | 278 | ||
Realized gains of available-for-sale securities | (640) | (90) | ||
Foreign currency translation adjustments | (3,249) | (458) | 15,869 | (4,051) |
Unrealized securities holding gains of subsidiaries and former VIE | 4,343 | 612 | 4,170 | 8,034 |
Realized securities holding gains of subsidiaries and former VIE | (3,526) | (497) | (4,464) | (7,801) |
Comprehensive loss | ¥ (395,765) | $ (55,744) | ¥ (400,663) | ¥ (673,350) |
ADDITIONAL FINANCIAL INFORMAT_4
ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I - STATEMENTS OF COMPREHENSIVE LOSS - Additional Information (Details) - CNY (¥) ¥ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other comprehensive income (loss), tax | ¥ 0 | ¥ 0 | ¥ 0 |
Parent | |||
Other comprehensive income (loss), tax | ¥ 0 | ¥ 0 | ¥ 0 |
ADDITIONAL FINANCIAL INFORMAT_5
ADDITIONAL FINANCIAL INFORMATION - FINANCIAL STATEMENTS SCHEDULE I - STATEMENTS OF CASH FLOWS (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 CNY (¥) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 CNY (¥) | |
Operating activities: | ||||
Net loss | ¥ (353,433) | $ (49,781) | ¥ (376,069) | ¥ (621,025) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Other non-current liabilities | 5,245 | 739 | (1,537) | (2,199) |
Net cash used in operating activities | (447,244) | (62,993) | (23,152) | (688,837) |
Investing activities: | ||||
Purchase of short-term investments | (914,326) | (128,780) | (1,268,925) | (1,832,427) |
Proceeds from sale or maturity of short-term investments | 1,074,246 | 151,303 | 1,254,463 | 1,957,801 |
Net cash provided (used in) by investing activities | 151,743 | 21,372 | (47,173) | 60,138 |
Financing activities: | ||||
Proceeds from ordinary shareholders | 223 | 31 | 274 | 2,918 |
Payment for share repurchase | (5,887) | |||
Net cash provided by financing activities | 205,978 | 29,011 | 22,735 | 74,339 |
Effect of exchange rate changes on cash and cash equivalents, and restricted cash | (3,720) | (524) | 3,709 | (3,502) |
Net decrease in cash and cash equivalents, and restricted cash | (93,243) | (13,134) | (43,881) | (557,862) |
Cash and cash equivalents, and restricted cash at the beginning of the year | 716,791 | 100,958 | 760,672 | 1,318,534 |
Cash and cash equivalents, and restricted cash at the end of the year | 623,548 | 87,824 | 716,791 | 760,672 |
Parent | ||||
Operating activities: | ||||
Net loss | (392,693) | (55,311) | (416,878) | (669,810) |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
Share of loss of subsidiaries and former VIE | 378,708 | 53,341 | 401,262 | 664,834 |
Other current liabilities | 5,007 | 705 | 5,870 | (128) |
Other non-current liabilities | (1,537) | (2,199) | ||
Net cash used in operating activities | (8,978) | (1,265) | (11,283) | (7,303) |
Investing activities: | ||||
Purchase of short-term investments | (18,925) | (32,427) | ||
Proceeds from sale or maturity of short-term investments | 57,434 | 8,090 | ||
Net cash provided (used in) by investing activities | 57,434 | 8,090 | (18,925) | (32,427) |
Financing activities: | ||||
Proceeds from ordinary shareholders | 223 | 31 | 274 | 2,918 |
Proceeds of loan from subsidiaries | 167,414 | 23,580 | 19,010 | 41,937 |
Payment for loan from subsidiaries | (54,229) | (7,638) | ||
Payment for share repurchase | (5,887) | |||
Net cash provided by financing activities | 113,408 | 15,973 | 19,284 | 38,968 |
Effect of exchange rate changes on cash and cash equivalents, and restricted cash | 205 | 29 | 2,854 | (991) |
Net decrease in cash and cash equivalents, and restricted cash | 162,069 | 22,827 | (8,070) | (1,753) |
Cash and cash equivalents, and restricted cash at the beginning of the year | 4,873 | 686 | 12,943 | 14,696 |
Cash and cash equivalents, and restricted cash at the end of the year | ¥ 166,942 | $ 23,513 | ¥ 4,873 | ¥ 12,943 |