111 Closes at $11 After Posting Higher Revenue yet Bigger-than-expected Loss
Looking ahead, the management expects fourth-quarter revenue to be between $68 million and $76 million.
111 Inc. (Nasdaq: YI), China's largest pharmaceutical retailer, reported its first quarterly results after going public two months ago in New York, saying third-quarter revenue more than doubled, but the company's net loss widened as a result of increasing operating costs.
In response, shares of 111 dropped more than 6 percent to close at $11 per share in New York, down 77 cents.
For the third quarter ended Sept. 30, 111 reported revenue of $72.5 million, double the level from the same period last year thanks to a significant increase in product revenues from the B2B segment. However, the net loss for July through September was $18.4 million compared with a loss of $9.05 million a year ago.
"I'm pleased to report that our revenue grew at more than 100% from the same period last year, whereas our operating expenses grew at a much slower rate compared to our top line growth, which demonstrates the planned scaling effect of our business," said Junling Liu, co-founder and CEO of 111.
Looking ahead, the management expects fourth-quarter revenue to be between $68 million and $76 million, representing year-over-year growth of between 74 percent and 92 percent.
111 was founded eight years ago by Gang Yu and Junling Liu, who have been partnering on entrepreneurial projects for more than a decade. Former executives at Dell Inc., the two co-founded Yihaodian, or YHD.com, an e-commerce platform acquired by Walmart, and subsequently by China's giant, JD.com Inc. (Nasdaq: JD).
In 2016, 111 became China's largest online pharmacy in terms of gross merchandise volume, as reported by consultancy Frost & Sullivan. According to the same report, the company's virtual wholesale pharmacy network, 1 Drug Mall, is the largest in the world.
Based in Shanghai, the company completed its initial public offering in New York nearly two months ago, raising $130.2 million by selling 9.3 million shares at $14 per share.