111, Inc. Sponsored ADR Class A(YI.US) revenue was 2.4 billion yuan in the first quarter, and AI-driven operations efficiency improved.

On June 4th, 111, Inc. Sponsored ADR Class A (YI.US) released its performance report for the first quarter of 2026. The report shows that 111, Inc. Sponsored ADR Class A achieved a revenue of 2.4 billion RMB in this quarter. The company is advancing the transformation of its business model towards a light asset, high operational efficiency model. As part of this transformation, the company converted several of its underperforming self-operated warehouses into franchise cooperation models last year, integrating them into the company's ecosystem to provide fulfillment services support for platform customers. In this model, franchise partners contribute stable commission income to the company, and the related operating income and expenses are no longer included in the company's consolidated financial statements, improving the overall profitability and capital turnover efficiency of the company. This quarter, platform (MP) service revenue increased by 24.7% year-on-year, reflecting the growth of platform service business and improvement in revenue quality. At the same time, the company optimized fulfillment rates, with overall logistics costs decreasing by 34.6% year-on-year; the proportion of overall expenses to total GMV decreased year-on-year, and total expenses decreased by 25.1% year-on-year. Building operational efficiency foundation to accelerate acquisition of offline sales and industrial cooperation. In the first quarter of 2026, 111, Inc. Sponsored ADR Class A increased investment in variety agency marketing and took on sales outside of pharmaceutical companies. During the period, net revenue of the main promoted products increased by 70.2% year-on-year, with gross profit increasing by 75.0%. One flagship original product saw its sales volume increase from 84,000 boxes to 710,000 boxes. By the end of this quarter, more pharmaceutical companies had joined hands with the company, expanding the variety agency matrix in the pharmaceutical cooperation pipeline and solidifying the company's brand building and market penetration capabilities. In the B2C field, online third-party platform businesses continued to grow, with first-quarter revenue and gross profit from online third-party platforms increasing by 119.2% and 157.9% year-on-year respectively. By optimizing product categories, leveraging supply chain advantages, and strengthening cooperation with third-party operations and industrial platforms, the foundation for business growth was consolidated, and operational quality was improved. To deepen cooperation in the upstream and downstream industries, 111, Inc. Sponsored ADR Class A held the 2026 annual "Number 1 Summit." The summit brought together industry professionals from the national pharmaceutical retail industry, representatives of chain pharmacies, experts, and partners in the industry chain, with more than 500 small and medium-sized chain customers attending, covering over 60,000 terminal stores. Many leading pharmaceutical companies such as Qilu Pharmaceutical, Chongqing Yaoyou, Shanghai Modern Pharmaceutical, Zhejiang Huahai Pharmaceutical, Jiuzhitang Co., Ltd., Abbott Laboratories, and Chongqing Pharscin Pharmaceutical, among others, participated in the conference. The conference drove a 124% year-on-year increase in sales of more than 50 key varieties, promoting variety sales and industrial cooperation, and consolidating the ecological influence of 111, Inc. Sponsored ADR Class A in the pharmaceutical industry. Upgrade of the supply chain network accelerates the AI-driven digital operation system. In the first quarter, 111, Inc. Sponsored ADR Class A upgraded the infrastructure of its supply chain network, increasing the total number of fulfillment centers to 20 nationwide, with the addition of centers in Sichuan and Anhui, enabling coverage of over 890 counties and cities nationwide within 24 hours, improving service radius and delivery efficiency, and enhancing national coverage capabilities. The company advanced the intelligent transformation of its operations, upgrading the receiving process at warehouses from "mobile vehicle acceptance" to an "intelligent scanning traceability code" mode, with the system automatically providing full-dimensional information of goods, increasing acceptance processing efficiency by 30%. In terms of AI tool applications, the OpenClaw intelligent tool capability has been put into place. The automatic drug coding has reduced operational costs and response times to nearly real-time levels. The BoGuang intelligent product selection tool supports the generation of product selection lists with just one sentence, compressing the update time from days to hours. The smart replenishment system for merchants has completed the design of a 100-point multi-dimensional algorithm and is expected to roll out its first pilot program by late June; the overall progress of the COS non-backup automatic review agent project has reached 40%, with the goal of increasing automation rate from 50% to 90%. In terms of fund settlement, the company's unified bank payment platform achieved 100% business line integration, with a standardization rate of 100% for fund payments and a fully automated closed-loop approval process for small claims, covering thousands of customer scenarios every month, with processing time reduced from 3 days to within 1 hour, and an accuracy rate of 100%. AI is changing the core business operations logic of 111, Inc. Sponsored ADR Class A. Thanks to the company's application of AI and digital operation capabilities, operational efficiency has improved, and operating costs have decreased. During the reporting period, the proportion of overall expenses to total GMV decreased year-on-year, and total expenses decreased by 25.1% year-on-year. Dr. Yu Gang, co-founder and executive chairman of 111, Inc. Sponsored ADR Class A, stated: "In the first quarter of 2026, we continued to advance our strategic transformation towards a lighter asset, platform-operated model. Platform (MP) service revenue increased by 24.7% year-on-year, reflecting steady progress in this strategy and our practical pursuit of high-quality, scalable, and operationally efficient growth. At the same time, we are accelerating the implementation of our artificial intelligence strategy, driving our business model from traditional manual-driven to AI-driven operations. Our core goal is to continuously create long-term value for customers, industry partners, and shareholders through exceptional customer experiences and pragmatic pursuit."