JD Health International Inc. (6618) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. Thank you for standing by. Welcome to JD Health International, Inc. 2024 Annual Results Conference Call. [Operator Instructions] I will now turn the call over to Ms. Du Binglin, Head of Investor Relations. Please go ahead, Binglin.

Thank you, operator. Good day, ladies and gentlemen. Welcome to our 2024 annual results conference call. Joining us today are JD Health Executive Director and CEO, Mr. Jin Enlin; and CFO, Ms. Deng Hui. Before we start, we would like to remind you that today's discussion may contain forward-looking statements, which involve a number of risks and uncertainties. Actual results and outcomes may differ materially from those mentioned in today's announcement and this discussion. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will discuss certain non-IFRS financial measures for comparison purposes only. For a definition of non-IFRS financial measures and the reconciliation of IFRS to non-IFRS financial results, please refer to the annual results announcement for the year ended December 31, 2024, issued today. For today's call, management will read the prepared remarks in Chinese, and we will only be accepting questions in Chinese during the question-and-answer session. A third-party interpreter will provide simultaneous interpretation in English on a separate line for the duration of the call. Please note that English translation is for convenience purpose only. In the case of any discrepancy, management statements in the original language will prevail. I would like to turn the call over to Mr. Jin Enlin. Please go ahead, sir.

Hello, everyone. I'm Jin Enlin, CEO of JD Health. It's a pleasure to share our 2024 full year results. 2024 was a year of steady growth for JD Health. On the macro level, China's health industry has continued to grow in scale. According to the data released by the National Bureau of Statistics, the average per capita medical and health care consumption spend in China was RMB 2,547 in '24, up 3.6% year-over-year, accounting for 9% of the total per capita consumption expenditure. In the outline of the Health China 2013 plan, the scale of China's health service industry will reach RMB 16 trillion by 2030. As public awareness of health management rises and disposable income increases, health consumption has become a major driver of China's consumption growth. Health consumption is no longer discretionary, but increasingly becoming a regular demand. The expanding demand for health consumption is energizing the entire market unlocking its potential. During this process, as industry-leading health care service provider, JDH has been at the forefront of creating new online and off-line consumption models to meet people's increasingly diverse health needs. While closely following national policy directives, we have steadily advanced our business development, achieving high-quality robust growth in revenue and our bottom line. Most importantly, as an active practitioner of Healthy China 2030 initiative and the industrial leader, we've consistently integrated our commercial value with societal, industry, and user value, continuously promoting technology applications and service innovations to accelerate the implementation of inclusive health care. The sessions are now underway. Many proposals involving health care have attracted widespread attention, which will no doubt provide a powerful push for industry growth. Meanwhile, the application of innovative technologies represented by large language models has broadened the industry's future prospects. Driven by national policies, market demand and technological development, we will build on our strength and deepen our focus on achieving high-quality development. In this way, we will create sustainable commercial value for our shareholders, while giving back to society and our users. Now I'd like to share our business highlights for 2024, followed by a discussion of our business outlook for 2025. Now let me walk you through our business development in 2024 across 3 primary areas. First, we solidify our B2C leadership and accelerate our omnichannel initiatives. In 2024, we deepened our efforts to deepen our omnichannel initiatives, generating greater value as a first entry point for online health care consumption. To begin with, we continue to cement our leadership in the B2C sector. For instance, in the pharmaceuticals and other core categories, our growth rate exceeded that of our major peers, both online and offline despite the high comparison base, thanks to our strong supply chain management capacities, rich product offerings and excellent user experience. Furthermore, we have observed the users' pharmaceutical needs are changing with increasing demand for imported range of drugs, anti-flu medications and other innovative treatments. These emerging trends have not only provided us vast growth opportunities, but have also motivated us to continue innovating and enhancing our user experiences. While solidifying our advantages in the B2C business, we've also actively developed our omnichannel operations. For instance, we consistently increased investments in on-demand retail and proactively responded to health policy guidance by enabling real-time online insurance reimbursement for medical purchases in multiple provinces and municipalities, making us the first among our peers to introduce this feature. Our service allows more people in more cities to enjoy medical insurance reimbursement for drug purchase from the comfort of their homes. Additionally, in our newly opened JD Pharmacy offline stores, we followed on providing exceptional service with no upselling by store staff or hidden pricing strategies. We also launched our first service drug dispenser in Beijing, helping the JDH earn the trust of more users. Second, we'll build Internet-based health care service innovation benchmark and accelerate the integration of online offline services. In 2024, we remain committed to our operations and continue to invest in health service innovations, making us one of the few players in the industry to do so. As such, we lead the direction. Over the last year, we successfully completed significant service integration innovation, pioneering the first ever consultation, examination, diagnosis, pharmaceutical closed-loop model. The entire patient process from online consultation with doctors to rapid home testing to doctor diagnose and prescriptions. The final home drug service and delivery can be efficiently completed online through service framework centered on JD Health Online Hospital. This new service model has dramatically improved the convenience and overall experience. Of course, the model success is also a result of our increased investments in in-store and home. Furthermore, we officially opened the JD Health Zhi Ye Tang, traditional medicine clinic and specialized clinics offering orthopedic and massage therapy services as well as several offline examinations and polyclinic centers. To date, we have built a comprehensive professional medical service matrix comprising doctors, pharmacists and nurses, whether users are seeking online consultations, in-store medical assistance or at home care. Our service matrix enables them to enjoy comprehensive professional and compassionate health services with a human touch. Third, we lead large language model application innovations and facilitate the implementation of inclusive health care. Earlier this year, around the Chinese New Year holiday, DeepSeek sparked widespread public interest in AI. Of course, for the health care industry, the application is not just an elective, but a required course. In fact, JDH has already become the first online health care platform to apply large language models on the grand scheme, covering the full spectrum of health care service scenarios for customers, doctors, hospitals and business. Our Jingyi Qianxun large language model is the largest model with the most doctors involved, the deepest hospital collaborations and the broadest user trial participation. Building on this foundation, we launched AI Jingyi, a full suite of AI-powered tools for online health care scenarios and JOY DOC, the industry's first AI solution for full-scale hospital applications at the beginning of 2025. With AI, Jingyi, we aim to provide more intelligent tools for online licensed doctors, facilitating quality and efficiency enhancement in their online consultations and day-to-day scientific research. On the other hand, JOY DOC helps hospitals optimize patient care workflows, enhance doctors' clinical research efficiency and alleviate the overall hospital operations. For 2025, we will focus on several key areas. First, we will continue to strengthen our B2C direct sales plus online marketplace plus on-demand retail operational model, further cementing our leadership in the health care retail market. Our goal is to reinforce users' awareness of JD Health as a go-to platform for online health care products and services. Second, we expand scale and depth of the JD Online Hospital services while propelling development of our at-home and in-store service models. This will better integrate online, offline scenarios and resources, providing patients with more professional and convenient one-stop medical experience. Lastly, I'd like to emphasize technological innovations. At JD Health, we are committed to applying technology in real-world health care scenarios to generate tangible value. As such, we will deepen our focus on scenario-driven application of large language models, ensuring AI create practical value across the health care sector and driven the AI-powered transformation of the entire industry. Going forward, JD Health will remain committed to its business philosophy of trust-based value creation centered on customers' health. Through close collaborations with upstream and downstream partners, we will continue to open up our supply chain infrastructure and health care service capacities to achieve sustainable development together with customers, industry stakeholders, partners and society as a whole. Thank you. Now I'm going to welcome our CFO, Ms. Deng Hui, to discuss the details of the financial performance.

Thank you, Mr. Jin. Hello, everyone. Thank you for joining JD Health's earnings conference call. It's my pleasure to provide an update on our full year 2024 performance. As China accelerates development of next-gen health consumption models and AI applications in medical scenarios, the Internet plus health care ecosystem's growth potential continues to expand. JD Health maintained high-quality growth in 2024 with a full year revenue of RMB 58.16 billion, up 8.6% year-over-year. Excluding the first quarter's pandemic-related high comparison base effect, revenue in the second to fourth quarter has increased by [ 13.4% ] year-over-year. As of December 31, 2024, our annual active user count for the last 12 months exceeded 183 million with an average daily online consultation volume of over 498,000 for the full year. In 2024, we achieved complementary synergies among our direct sales, online marketplace and on-demand retail business models, while further opening up our ecosystem and collaborating with industry partners to drive future growth. Meanwhile, we continue to diversify our product offerings and upgrade our service experiences, always putting users' needs first. We also rolled out multiple new services aimed at improving user experience, consistently earning users' trust. Our direct sales revenue for 2024 reached RMB 48.8 billion, representing year-over-year growth of 6.9%. Breaking down by category, pharmaceutical performance was particularly impressive with growth consistently outpacing competitors and market share steadily on the rise. At the same time, we further strengthened our competitive position as the first online marketplace for new and specialty drug launches, facilitating online deals for nearly 30 new and specialty drugs. We also partnered with global pharmaceutical and health care brands like Merck, Organon, Teva, MSD, Haleon, and Pfizer, exploring innovations in diverse domains, including supply chain services, patient services, and digital marketing. In our non-pharmaceutical segment, we continue to build on our direct sales business advantages, deepening partnerships with leading health brands and emerging brands in collaborative product deployment, omnichannel operation, and precise marketing to propel growth across brand influence, user traffic and sales. Our service revenue surpassed RMB 9.36 billion for the full year of 2025, making an 18.9% year-over-year increase and accounting for 16.1% of total revenue, up 140 basis points compared to 2023. Platform commissions and advertising revenue both sustained rapid growth rate. We consistently ramped up our support for platform merchants, fortifying the synergies between our online marketplace and direct sales business to improve users' health consumption experiences. As of December 31, 2024, the number of third-party merchants exceeded 100,000. Throughout 2024, we further strengthened our on-demand retail business and accelerated progress in our innovative omnichannel initiatives. As of December 31, 2024, our JD instant delivery service launched our online drug purchases through individual merchant insurance accounts servicing 18 cities, including Shanghai, Beijing, Guangzhou, Shenzhen, Foshan, Chengdu, Zhengzhou, Shenyang, and Tianjin. This service is now available through more than 3,000 medical insurance-designated pharmacies nationwide, serving a population of over 100 million. In terms of health care services, we lead in the industry by creating a closed-loop online service ecosystem, integrating consultation, examination, diagnosis, and pharmaceuticals, providing a one-stop upgraded at-home service experiences. Our at-home rapid test service began offering 194 home testing services, including 12 cities, bringing users at-home diagnostic and testing services that match the quality of offline hospitals. During online consultations, doctors issue testing orders electronically. Based on the patient's condition, a nurse or a rider comes to the patient's home to draw blood or collect the testing samples. The doctors then issue prescriptions electronically according to the test results, and patients who require medications can conveniently purchase it online, enjoying a seamless one-stop medical service experience in 2024. We also unveiled nearly 40 home nursing care services provided by professional nursing teams upon users' online requests, including online medical examinations and testing, wound care, and medical appointment components. Additionally, we offered home medical device setup and support devices across more than 30 cities nationwide, covering nearly 1,500 SKUs in 9 major categories, including blood glucose meters and oxygen concentrators. For the full year 2024, our gross profit margin increased 17 basis points year-over-year to 22.9%, reflecting our efforts in deepening our supply chain work. This uptake also demonstrates our professional procurement and sales capacities, which enable us to leverage more merchant reinvestments looking ahead. We will partner with more merchants on the platform to offer our users better prices and services, bring users a more cost-effective product experience. This, in turn, will enhance consumers' trust and brand loyalty, helping to expand our market share in various categories. On a non-IFRS basis, our fulfillment expenses ratio in 2024 was 10.2%, an increase of 15 basis points from 2023, owing primarily to our ongoing investment in user experience as well as the decrease in enterprise per order. Our selling and marketing expense ratio was 5.2% for the full year 2024, increased by 30 basis points compared to 2023. We made significant strides with JD Pharmacy brand promotion strategy, successfully strengthening our brand recognition and influence among consumers this year. We further emphasize scenario-based marketing and invest in more diverse marketing channels to enhance user reach and conversion. We will also maintain a strong focus on our marketing investment ROI. For the full year of 2024, our R&D expense ratio was 2.1%, on par with last year. As of the end of December, we had a total of 530 R&D personnel, up from last year. Our R&D personnel efficiency has further improved with the rapid growth of our business and the ongoing optimization of the middleware infrastructure, lowering the R&D expense ratio. Leveraging our health care large language model, Jingyi Qianxun, we launched multiple products for doctors, hospitals and users in 2024, holistically enhancing service efficiency for doctors, reducing service costs and improving user experience in various scenarios. In the short to medium term, we plan to more rapidly unlock the value of health and medical data by cultivating and attracting talent in data and AI, supporting our continued leadership in digital and intelligent operations, health care big data applications, and innovative health initiatives. In addition, we will consistently invest in and reiterate Jingyi Qianxun large language model, further accelerating the application of large language model technologies across diverse service scenarios. This will effectively strengthen user loyalty, gradually reinforce consumer awareness and acceptance of online medical services and continuously create new technological offerings for the health care sector. Our G&A expense ratio was 0.8% for the full year 2024, on par with last year. Our back-end staff and operational management efficiency levels continue to lead the industry. Finance income increased to RMB 1.96 billion in 2024, up 0.6% year-over-year, mainly attributable to increase of our cash reserves. Other net income and gains in 2024, approximately RMB 840 million, primarily consisting of returns from wealth management products and government grants. Excluding share incentives, non-IFRS, net profit for the full year 2024 increased by 15.9% year-over-year to RMB 4.8 billion with a margin of 8.2%, rising 15 basis points year-over-year, hitting a new record high since our listing. Our cash flow from operating activities reached RMB 4.33 billion in 2024 at the end of December. The combined amount of cash and cash equivalents, restricted cash, long-term and short-term deposits and wealth management products at fair value through profit or loss and at amortized cost was RMB 59.42 billion, a net increase of RMB 5.71 billion compared with December 31, 2023. December 2024, JD Health maintained high-quality growth across its entire business, driving steady improvement in operational quality and profitability. Our active high-quality user base, thriving platform ecosystem and robust cash flow demonstrate the advantages of our dual engine closed-loop business model. Over the last year, we remained focused on enhancing user experience and cost efficiency to advance our strategies and initiatives. From industry policy perspective, the National Healthcare Security Administration has adopted a public price comparison approach, which enhances drug pricing oversight by providing a mechanism for comparing offline retail prices with online offerings. This clearly highlights the social and user value of online medical and health care consumption. Moving forward, we will consistently uphold our business philosophy of trust-based value creation centered on customers' health. We will remain focused on cost efficiency and user experience enhancement, continuously elevating our supply chain capacities and pricing competitiveness. As we navigate the ever-evolving competitive landscape, we will fully harness our acute insights into users' medical and health care needs to comprehensively strengthen our efficient business model, ensuring user satisfaction and fostering collaborative success with upstream and downstream partners. We aim to build long-term sustainable competitive advantages that will drive steady profitability improvements, while maintaining our industry-leading growth rate with value for shareholders. That concludes my prepared remarks.

Thank you, Ms. Deng Hui. That concludes our prepared remarks. We would like now to open the call to your questions. [Operator Instructions]. The first question comes from Miranda of American Bank.

Congratulations. It is a great 2024 performance. My question is, for 2025, do you have any prospects? As we are seeing the changes on the consumption market and you are becoming a great leader in the sector for 2025, what is your strategic direction? Do you have any changes or adjustment? As you elaborated on the 2025 core directions, can you help us to elaborate a little bit more on the specific plans for the 2025, for the performance estimation, please?

Thank you, Miranda, for the question. Generally speaking, China's health care market is further expanded. The health-related services and products have become the regular demand for the market and consumers. And for the elderly, they have different lifestyles. The gray hair economies give us new demand. For the younger generation, they have different awareness. They want to stay healthy and robust. They become the new users. That means health consumption has become the new part of the market consumption. From JD Health's perspective, we remain firmly committed to our strategic direction in 2025, and we are confident in our ongoing role in leading and shaping the next wave of health consumption trends. First of all, in the pharmaceutical e-commerce sector, we will foster close partnerships with our ecosystem on the supply side, strengthening collections with upstream stakeholders and end users to offer a broad range of health care products. On the demand side, we will improve omnichannel service experience and continue to enhance consumers' trust and brand recognition to solidify our position as the preferred online platform for health products and services. As our e-commerce business continues to grow, we will further increase our market share. In terms of the health care services, we will continue to deepen and expand the scale of JD Health Online Hospital service. Meanwhile, we will further strengthen our service offerings such as at-home and in-store portfolios, leveraging synergies across our service lineup to better integrate online and offline experiences by enhancing our closed-loop services and capacities. Across online doctor consultation and home examination, testing home delivery of medications and at-home nursing and care, we aim to provide patients with a more professional and convenient one-stop medical service experience. Additionally, we will further invest in AI, large language models and other innovative technological applications to drive AI-powered transformation across our existing businesses, boosting technology effectiveness in cutting costs and improving efficiency. We will share our long proven tried and true technologies and capacities with a broader industry, offering a variety of innovative products and solutions to empower a wider audience and drive industry-wide progress. Thank you.

I want to say a few more words. In 2025, JD Health is confident in sustaining its industry-leading growth rate with revenue expected to grow by double digits and accelerate significantly compared to 2024. We will continue to craft exceptional user experiences and collaborate closely with brands and merchant partners, health service providers, government organizations and other stakeholders across the health industry value chain, fostering a mutually beneficial and highly efficient commercial ecosystem also in line with our long-term strategic vision. We remain committed to making disciplined strategic investment this year in the long run. With a healthy development of our business and ongoing improvement in operating efficiency, our profit margins will steadily increase.

The next question comes from Goldman Sachs. Lincoln, please go ahead.

My question is on the pharmaceuticals. Over the last year, the core categories of the pharmaceuticals are growing rapidly. You have consistently outpaced the competitors. Looking ahead to 2025, will you be able to maintain your advantages in this sector? What plans do you have for developing your supply chain and enhancing patient services to strengthen your position in the out-of-hospital drug retail market?

Thank you, Lincoln. We are saying that, and we have stressed that, the importance of pursuing initiatives that deliver long-term value is important. Our results from the last year clearly demonstrate that our sustained investment in this sector paid off. JD Health boasts robust supply chain advantages in pharmaceuticals, including optimized direct sales capacities and synergistic benefits across our online and offline channels. For the supply side, we will continue to strengthen our position as the first online marketplace for new and specialty drugs for the GLP-1 and other special drugs. And we are also collecting the drugs of the -- out of the patient original drugs. Those are very prosperous, and we are seeing a huge potential and room for growth. And this is further demonstrating our first arrival advantages. Now we are also attracting massive traffic daily, and we are also creating the academic marketing platform. Every year, every day, we are attracting over hundreds of millions of online traffic. We are also backed by the most comprehensive ecosystems in the system. This motivates pharmaceutical companies to launch and sell their flagship products on the JD Health platform, which in turn enables our platform to thrive while driving consistent growth. From the demand side, we aim to further enhance the user experience and user perception of online consultation and pharmaceutical purchases. We are committed to creating unique online purchase experience and boost our presence in the out-of-hospital market. Our competitive pricing strategy will reinforce JD Health's reputation for affordable medications, while also planning to expand our product categories and work directly with more pharmaceutical companies to ensure quality. For instance, we will offer free exchanges for expired medications and 24x7 pharmacist support, which will help build customer trust. We will also accelerate the rollout of online medical reimbursement in selected pilot areas, encouraging more users to choose JD Health as a preferred platform Furthermore, we will optimize the consultation plus examination plus diagnosis, pharmaceutical closed-loop model, leveraging our online/offline service network to deliver exceptional online medical consultation and pharmaceutical purchasing services.

Next question comes from Haitong International. Kehan, please go ahead.

Congratulations. In 2024, you had such a beautiful outcome. Two other questions on AI. In 2024, you released Jingyi Qianxun AI large language model. It faces hospitals, organizations, doctors and patients. After the release of the model in the AI sector, do you have more funds? And for the short term and for the long run, do you have any commercialization potential in this regard?

Thank you, Kehan. Around 2017 or 2018, from day 1, we have the AI language models at present. In the past, we were using AI resources to help the patients to have better medications, and that is our mission. Ever since then, we consistently deploy resources on the AI. That is part of the DNA. It is not for us pursuing the buzzwords. Jingyi Qianxun large language model is one of the top-tier large language models in the medical sector. It is ranked #1 in this specific sector. This is the only open-source model in the sector. Open source is a good event we are promoting. JD Health and AI is not only for us, it's for the sector, for the entire industry. As open source runner, we will continue our innovation. We will be in a leading position for the long run. At present, we have already AI-tized our business, and we are going to go deeper on the innovation. We want to bring the scale of economies, and we want to implement it in every round. Today, in the 2D, 2C and 2S sector, we have the full scenario deployment. In the 2D sector, leveraging our health care large language model, Jingyi Qianxun, we created and unveiled our AI Jingyi product suite including professional services such as digital doctors, nutritionists and pharmacists, as well as intelligent assistive tools, including the diagnosis assistant and research assistant. Our primary target is to address the productivity challenges in the Internet-based medical and health care services, including reducing service costs, improving efficiency of online medical services and elevating user experience. We also aim to strengthen loyalty and trust of licensed doctors. At JD Health Online Hospitals, over 40% of the AI recommended content is adopted by doctors on average. AI services are utilized in over 80% of doctors' consultation orders in the smart shopping assistant use scenario. AI new trends have replaced 90% of human involvement, achieving conversion rate of 18 percentage points higher than annual manual service, highlighting AI's impressive upside potential. For the therapy sector, we have launched an array of AI offerings directly targeting consumers, including “Small Universe for Chatting and Healing; Kangkang”, a mobile blood pressure management product, and [indiscernible]. These AI-powered products further reinforce our position as the first entry point. [indiscernible], we again utilized our health large language model, Jingyi Qianxun, to craft the JOY DOC product suite, assisting our hospital clients in improving patient's hospital visit experience, supporting clinical research for doctors and enhancing hospital operation management. Over the last few years, development of Internet-based medical and health services have driven the progress of medical AI. Today, as the technologies mature and evolve, it is set to exponentially accelerate advancement in the Internet-based medical and health care services, creating a flywheel effect. JD Health has always been at the forefront. In the short run, it is a productive tool. In the long run, our priority is to use medical AI to drive business growth, including the full scenario application of large language models and AI enhanced upgrades of Internet-based medical and health care services. AI is more than efficiency booster. It is the right force to shape the future. Thank you.

Next question from CICC, Feng Xipeng.

I'm from CICC. I'm analyst Feng Xipeng. Congratulations for the wonderful 2024 performance. In 2024, you are echoing the national policies on the reimbursement. So my question is that regarding 2025, can you expect a further loosening of the online medical reimbursement or the insurance payment? Would it be an impact for the company's business development? Thank you.

Thank you, Xipeng. In 2024, JD Health made significant strides. In July, we were the first to launch medical insurance payment for online purchases through our instant delivery service. At the end of the year, 18 cities nationwide, including Guangzhou, Chengdu, Shenzhen, Shenyang, Tianjin, among others, adopted policy. This service is now available in over 3,000 medical insurance designated pharmacies serving a population of over 100 million. In 2024, we aim to further improve and solidify this service in pilot cities and increase new user acquisitions in these regions. With medical insurance payment as a touch point, we seek to continuously build consumer awareness and acceptance of Internet-based pharmacies overall. As an industry-leading platform, JD Health stands to gain significantly from its first-mover advantage in this area. We expect to drive greater new user acquisition while increasing the efficiency of online medication purchase among existing users. Also in 2025, in the regions prioritizing this policy, we launched the medical insurance payment for online purchasing service within our direct sales business, further reinforcing user perception and recognition of JD Health. Overall, the O2O model for the insurance-covered medication purchases effectively addresses users' urgent needs. The B2C model for insurance-covered direct medication sales will cover a broad range of essential chronic disease medications, enriching the selection of medications covered by medical insurance available on time. We believe that given the strong foundation we have built with our omnichannel initiatives, we'll be the biggest beneficiary. Thank you.

Next question from UBS. Henry, please go ahead.

My question is on the strategy. In 2025, for the retail business, do you have any specific plans? For the online/offline integrated strategy, so what will be the new progress? And what is your purpose objective?

Thank you, Henry. So the retail business is one of the key scenarios. And we are going to touch upon the out of the hospital market. We want to be the #1. That is the top objective, and we will go down and break down the key objectives step by step. This is also a key step to solidify our foundations. We want to strengthen the patient and user perception and awareness as the first online platform. Online and offline integrated penetration is a must. The retail scenario will accumulate the new users, which will also be introduced in the online platforms. For our in-house, for our own supply chain, we have the fast and flex delivery, giving them better service and experiences. We are also optimizing the supply chain cost. Last but not least is the instant retail capacities. We have the follow-up systems. This is also going to improve the timeliness of the home deliveries. By the end of 2024, in Beijing, we have 16 O2O pharmacies covering most regions; and just in Beijing, we have the 4 [ ISC ] capacities and operation premises. It has demonstrated the value of the pharmacies. We have the differentiated capacities in Beijing. Our market value as well as the total user base will increase in 2025. We will enter into other top-tier cities, the business circles. We will also offer them good quality, efficient price, and timeless. In terms of the investment, we will strengthen and solidify our supply chain capacities. We will ensure financial discipline to offer better ecosystem. We will consolidate our previous plan. We will cover the omnichannel services, and that's how we could improve the customer adhesion and experiences.

Thank you, Mr. Jin. For the time's sake, this is the end of the Q&A session. So we are going to welcome Binglin to wrap this up.

Thank you once again for joining us today. If you have more questions or further questions, please contact our IR team directly. Thank you.