Newsfilter article unlocker

Good morning, everyone. This is Tracy Lee from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop's first quarter 206 earnings conference call. All participants are in listen-only mode in our English line. As a reminder, today's conference call is being recorded. Please note that discussion today will concern forward-looking statements made under the State Harbor Provision of the U.S. of the U.S. Private Securities and Litigation Reform Act of 1995. Forward-looking statements accepted with risk and insurgencies limit cost actual results to differ materially from our current expectations. Potential risks and insurgents include, but not limited to, those outlined in our public findings with the FDC. The company does not undertake any obligation to update any forward-looking statement except as required in the applicable law. Also, this call includes discussion of certain non-debt matters. Please refer to our earnings release for a recompilation between non-death and debt. Joining us today on the call are Mr. Shen Peng, our founder, chairman, and CEO, Mr. Yuan Wei, director and GM of the insurance business, Ms. Xu Xiaoyin, head of finance department, and Ms. Li Jieru, board secretary. We will take questions in the mentoring line at the end of the conference call. Now, let's invite our CEO, Shampong, to start. Dear investors and analysts, thank you for joining Waterdrop's first quarter 206 Earnings Conference call. In the first quarter, we continued our last year's growth momentum with total revenue of 1.24 billion yuan, up 64.8% year-over-year, and net profit attributable to ordinary shareholders of more than 98 million yuan. Since the first quarter of 2022, we have maintained gap profitability for 17 consecutive quarters. By second, our insurance business continues its user acquisition strategy, with insurance-related income at 74.1% year-over-year. As these capabilities have been validated, we sharpened our focus on user experience while continuing to optimize our traffic channels and user targeting efficiency. The Krufani business remains stable, having raised medical funds for a cumulative 3.75 million patients by the end of the Q1. And our Digital Clinical Trial Solution business is the center enrollment growth, with more than 50,500 patients enrolled to date. On the technology front, we are accelerating our shift toward an AI-native company. As of March 31, 2006, we had filed 75 LLM-related patent applications, including nine international and were recently granted two more national invention patents in intelligence, semantic understanding, and the multimodal recognition. This technology will be progressively applied to the insurance scenario such as intelligence and customer service and claims, improving service quality and efficiency. On capital returns, we continue to share our growth with our shareholders. In early May, we completed our fifth cash dividend since our IPO, totaling approximately $10.8 million. Our share repurchase program also continued steadily. By the end of May 2006, we had repurchased approximately $61.8 billion in open markets for about $120 million. As of the end of May 2006, cumulative cash dividends and share repurchases since IPO has totaled approximately $170 million. Meanwhile, we remain committed to giving back to society. At the end Q1, the Water Drop Charity Club had partnered with 119 public charitable organizations launched over 15,500 charity programs. Looking ahead, we aim to seize industry opportunities and to make growth our top priority this year. Building on our proven user targeting capabilities, we will increase in marketing investments further. For 2026, we are targeting approximately 40% percent top line growth with operating profit scale is expected to remain broadly stable. We expect this current investment to allow greater profit potential in the coming years and the user-based extension will further support the company's long-term development. That covers our overall performance in Q1. Next, I will walk through each of our business segments in detail. Hello everyone, this is Gamba A. Let me walk you through the progress of our insurance business. In the first quarter, insurance-related income reached $1.15 billion at 74.1% year-over-year, with operating profit of $115 million, and operating margin of Q1 is 13.3%. The year-on-year top line growth mainly reflects the continuation of our last year user acquisition strategy. In the first quarter, we continued to step up public domain user targeting and increase our investment in traffic and AI, serving significant premium growth. And on a quarter-over-quarter basis, while the income declined, our insurance operating margin rose by 2 percentage points. This was mainly because we proactively cut some lower ROI channels during this quarter. At the same time, we are actively expanding into other high-quality traffic channels while running our mature ones with refined operations, enhancing our traffic infrastructure and optimizing our model to drive continued improvement in ROI. On the supply side, we are committed to getting users more diverse product offerings, which continue to earn user recognition. During this quarter, FIP from our pre-existing condition products rose 24.3% year-over-year, and the disability insurance products contributed 89 million in FIP. At the product level, we continue to iterate. For example, we upgraded our inclusive cancer worry-free medical insurance series, expanding the coverage for out-of-the-hospital prescriptions and related medical devices, as well as a range of advanced cancer therapies. We also recently launched the Shouhu Bluetooth-focused cancer-specified disease product with a singular health disclosure and a lower bar to lifelong cancer protection. On the service side, we took multiple steps to improve the customer experience. We launched a dedicated customer complaint hotline to make it easier for users to raise concerns, and we also connected payment channels with our customer service system, expanding frontline operations, and enable faster response processing. And for elderly customers, we simplified procedures for the children acting on their behalf and introduced a faster track service channel. Together, these initiatives upgrade our access to our service capabilities. We also continue to apply our LRM capabilities and AI tools to streamline the workflow and improve operating efficiency. The user-facing AI applications contributed approximately 87 million rands in incremental premiums in Q1, up 17.7% sequentially. Through real-time support on our mini-programs, WeChat, phone calls, and WeCom, including our AI pro insurance and AI medical insurance experts, WeCom AI, and other tools. Our frontline consultants, He Yi AI, have handled more than 10,000 underwriting inquiries to date. In late March, we began internal beta testing of the Cloud Co-Pilot on CRM and WeCon, bringing together our product knowledge base, the CREDIT.AI, and other two agent tools. So our consultants can get instant answers on product interwriting and other common questions, with less switching between the systems and documents. Cloud co-pilot also supports the self-lease review, top-track replay and refinement, and performance analysis. In the after-sales service, our AI user service agent, now in regular operation, supports more than 1 million service interactions per month. And the AI service quality co-pilot continues to deliver efficiency of more than twice the manual-only basis through this baseline. On the AI infrastructure side, our low-code platform, WaterDocs.ai, now offers more than 30 purpose-filled agents, each tailored to a specific scenario for our internal team and external clients in all the user-facing work. So, that concludes our insurance business update for the first quarter. Thank you, Rhonda. This is Kirgu. And now, next, I will walk you through our first quarter performance on our crowdfunding and healthcare business. As of the end of March 2016, approximately 494 million people had cumulatively donated of total 73.5 billion to 3.75 million patients through the WaterDrop Medical Profounding platform. This quarter, we pursued the two priorities for WaterDROP Medical Profoundings, the AI capability viewing and the better service in linguistic diverse regions. For AI reviews, we complete quarterly upgrades involving towards an AI-assisted model without compromising risk control quality. Our risk model can structure the contained material quickly and applies the preset rules for preliminary screening, short-term intake, and the first-class review and treat our risk specialists for complex cases. Secondly, we improve the service for patients in linguistically diverse communities, including areas where a minority language is spoken, and this quarter we systematically refined our service workflows and adapted the review standard to their real needs. We added a minority language specialist to work alongside our existing campaign consultants on upfront consultation and the document guidance and the dispute resolution and reducing the communication cost caused by language barriers. In addition, we set up a dedicated service team in which the translator and the risk control specialist can track each case end-to-end and promptly resolve the bottom act, ensuring a strict risk control compliance while respecting local culture sensitivities. Turning to our of healthcare business, we sustained a high quality growth this quarter, brought an LLN application across the core business scenarios. We partnered with 243 pharmaceutical companies and zeroes and initiated services for 128 new programs. Our refunds like on single quarter patient enrollment rose 16% year over year. And a newly fine product in this quarter increased 53%, reflecting the wider partnership coverage and the deeper client engagement. As of the end of the first quarter of 2006, the platform has had cumulatively enrolled over 50,500 patients. In January 2016, our intelligent drug patient matching technology secured a national invention patent, which is the first of this kind in China. This corner was focused on building up our upstream data structuring capability and connecting it with a matching engine. Across part of our service workflow, the platform has now established a standardized pipeline from the data structing to intelligent product matching, promptly generating suitability recommendation against the trial protocol. Supported by these AI capabilities, we continue to build our medical case library and complex indications in rare cases with a more balanced mix across therapeutic areas, strengthening the foundation for sustainable midterm to long-term growth. and that covers our core funding and the health care businesses and hello everyone this is Xu Xiaoying I will now hear through our financial headlines for the first quarter of 2006 before I go into details please be reminded that all members quoted here will be R&D and the please refer to our earnings release to for a detailed information on our financial performance on both the year year-over-year and quarter-by-quarter basis respectively. In the first quarter of 2006, 40% of total revenue reached $1.24 billion, up 64.8% year- over-year, sustaining a rapid growth. In that segment, the insurance-related income contributed approximately $1 to $15 billion, at 74.1% year over year, Well, the non-insurance business together accounted for about 7.8% of the revenue, with profiling services of approximately $60.73 million, and digital clinical trial solution income of approximately 24.2 million. In terms of cost, our total operating cost incentives for this first quarter were approximately $1.16 billion at about 71.5% year-over-year. Operating costs for this quarter reached $487 million at 30.1% year over year, driven by our business extension. Cost of referral and services increased by about $53.9 million, while short message service costs and personal costs rose by $38.9 and $70.3 million, respectively. Thousand marketing expenses reached $541 million, a significant increase from $172 million in the same period last year, mainly because we progressively scaled up traffic investment over the past year and reinforced workforce momentum. Marketing expenses for third quarter traffic channels rose by approximately 361 million euros a year. General and administrative expenses were 71.7 million, down 4.3% euro a year, mainly due to the lower professional service fees this quarter. Research and development expenses were about $62.7 million, an 11.5% year-over-year increase, primarily due to an approximately $6.7 billion rise in cloud and the technical services. For the first quarter, operating profit was around $79.95 million, a modest year-over-year increase of 5.3%. However, affected by the net operating income in this quarter, the net profit attributable to ordinary shareholders was approximately $98.4 million, down 9.1% year-on-year. As of the end of March 2006, the company maintained an annual cash reserve with cash and cash equivalent to short-term investments and other cash positions totaled about approximately $2.88 billion. And on the capital return since our IPO through May 1st, 2026, we accumulated repurchase a total of approximately $61.8 million for about $120 million, and recently completed a tax dividend of approximately 10.8 billion dollars. Overall, the growth momentum of our core business has been strong. And in the first quarter, water drops delivered 64.8% year-over-year revenue growth. And by stepping up, the investment in traffic and AI continues to strengthen our long-term competitiveness. And ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining. Have a good time.