Waterdrop Inc (WDH) 2022 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by for Waterdrop Inc. third quarter 2022 earnings conference call. (Operator Instructions) As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to Ms. Xiaojiao Cui. Please proceed, Ms. Cui.

早安，女士們、先生們，感謝你們出席 Waterdrop Inc. 2022 年第三季財報電話會議。 （操作員說明）提醒一下，今天的電話會議正在錄音。我現在請崔小嬌女士主持會議。請崔女士繼續。

Hi, everyone. Thank you for joining what is our third-quarter 2022 earnings conference call.

大家好。感謝您參加我們的 2022 年第三季財報電話會議。

Please note that the discussion today will contain forward-looking statements made under the Safe Harbor provision of the US Private Securities and the Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties may include, but are not limited to, those outlined in our public filings with the SEC. The company does not undertake any obligation to update any forward-looking statements, except as required under applicable law. Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for a reconciliation between non-GAAP and GAAP.

請注意，今天的討論將包含根據美國私人證券安全港條款和1995 年訴訟改革法案做出的前瞻性陳述。前瞻性陳述受到風險和不確定性的影響，可能導致實際結果與實際結果有重大差異。我們目前的期望。潛在風險和不確定性可能包括但不限於我們向 SEC 公開提交的文件中概述的風險和不確定性。除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。此外，本次電話會議也討論了某些非公認會計準則措施。請參閱我們的收益發布，以了解非公認會計原則和公認會計原則之間的調節。

Joining us today on the call are Mr. Shen Peng, our Founder, Chairman and CEO; Mr. Yang Guang, Co-Founder, Director, and VP; Mr. Hu Yao, Co-Founder, Director, and VP; Mr. Ran Wei, Partner and the General Manager of the Insurance Marketplace; Mr. Zetao Zhu, Partner and General Manager of Medical Crowdfunding and Patient Services; Mr. Richard Chen, Board Secretary and VP. They will be available for a Q&A section after the remarks.

今天加入我們電話會議的還有我們的創辦人、董事長兼執行長沉鵬先生；楊光先生，共同創辦人、董事、副總裁；胡耀先生，共同創辦人、董事、副總裁；冉偉先生，合夥人、保險市場總經理；朱澤濤先生，醫療眾籌及病患服務合夥人兼總經理；陳先生，董事會秘書兼副總裁。發言結束後將有問答環節。

Now I would like to turn the call over to our CEO, Mr. Shen Peng. Please go ahead.

現在我想把電話轉給我們的執行長沉鵬先生。請繼續。

(interpreted) Hello, everyone. Thank you for joining our third-quarter 2022 earnings conference call.

（譯）大家好。感謝您參加我們的 2022 年第三季財報電話會議。

During the third quarter, we have seen increasing downside risks in the global economy as well as uncertainty regarding the domestic economic recovery. Nonetheless, the recovery in domestic demand has recently gained momentum, and we believe that the fine tuning of COVID control measures will unleash a rebound in private consumption, providing solid support to revive the domestic economy. This trend will enable the insurance industry to return to a value growth cycle and improve the business outlook for the medical and pharmaceutical industry.

三季度，全球經濟下行風險加大，國內經濟復甦不確定性加大。儘管如此，近期內需復甦勢頭強勁，相信疫情防治措施的微調將帶動民間消費回升，為國內經濟復甦提供堅實支撐。這一趨勢將使保險業回歸價值成長週期，並改善醫療製藥業的業務前景。

Against this backdrop, Waterdrop continued to exhibit strong resilience and adaptability and maintain good business momentum in the third quarter, with revenues increasing by 10.1% on a quarter-over-quarter basis. Following our turnover -- following our turnaround in the final quarter of last year, we have managed to achieve a healthy level of profitability in every quarter of this year. In the third quarter, our GAAP net profit reached RMB170 million, confirming that our business has entered into a phase of steady profitability.

在此背景下，水滴第三季持續展現出強大的韌性和應變能力，保持良好的業務勢頭，營收季增10.1%。隨著我們的營業額——去年最後一個季度的扭虧為盈，我們今年每個季度都實現了健康的盈利水平。第三季度，我們的GAAP淨利達到人民幣1.7億元，證實我們的業務已進入穩定獲利階段。

As of the end of September, our cash and cash equivalents and short-term investments increased to RMB3.6 billion, even taking into account our share repurchases. We were able to generate a positive cash inflow of RMB300 million in the third quarter. Our ample cash reserves and our ability to generate positive cash flow put us in a strong position to withstand the changing external environment.

截至9月底，即使考慮到我們的股票回購，我們的現金和現金等價物以及短期投資仍增加至人民幣36億元。第三季我們實現正現金流入3億元。我們充足的現金儲備和產生正現金流的能力使我們能夠抵禦不斷變化的外部環境。

Our remarkable operating results and evolving business trends over the past 3 quarters demonstrate that we have entered into a phase of healthier and more sustainable business growth, establishing a solid foundation for future business development. Our operating efficiency and business quality have also improved steadily.

過去三個季度我們出色的經營業績和不斷變化的業務趨勢表明我們已經進入了更健康、更永續的業務成長階段，為未來的業務發展奠定了堅實的基礎。我們的營運效率和業務品質也穩步提升。

As such, we have delivered on our commitment to achieve healthy and sustainable profitability ahead of schedule based on the timeline we set at the beginning of this year. This reflects management's determined strategic planning and efficient execution.

因此，我們按照年初設定的時間表，提前兌現了實現健康可持續盈利的承諾。這反映了管理階層堅定的策略規劃和高效率的執行。

Looking into the fourth quarter and beyond, we will continue to pursue steady progress in our business development efforts, deepen reform of our business, and make appropriate investments in new businesses, while proactively exploring new business models to achieve healthy growth. Through these efforts, we aim to achieve top notch and a sustainable long-term business growth.

展望第四季及以後，我們將持續穩定地推動業務發展，深化業務改革，適當投資新業務，積極探索新業務模式，實現健康發展。透過這些努力，我們的目標是實現一流和可持續的長期業務成長。

As a leader in the medical crowdfunding industry, our subsidiary, Waterdrop Medical Crowdfunding, is committed to maintaining disciplined operations and driving the healthy development of the ecosystem. In this quarter, we continued to collaborate with the judiciary, hospitals, and industry partners to crack down unauthorized fundraising activities. At the end of August, Waterdrop once again working closely with the police in Shandong province to crack down on a case of fundraising fraud perpetrated by malicious intermediaries.

作為醫療眾籌產業的領導者，我們的子公司水滴醫療眾籌致力於維持規範運作，推動生態系統的健康發展。本季度，我們持續與司法部門、醫院、產業夥伴合作，嚴厲打擊未經授權的募款活動。 8月底，水滴公司再次與山東警方密切合作，破獲一起惡意仲介集資詐騙案。

Through our stringent review process, together with the big data algorithms and AI technologies developed by our risk management team, we have developed a system that can identify unauthorized fundraising activities instantly and effectively. After several months of investigations and on-site visits, we collected a large volume of evidence which successfully help the place to solve the case and take legal action following various effective crackdown measures. There has been no malicious unauthorized fundraising activities impacted on our platform for several consecutive months.

透過嚴格的審核流程，結合風險管理團隊開發的大數據演算法和人工智慧技術，我們開發了一套可以即時有效識別未經授權的募款活動的系統。經過幾個月的調查和現場訪問，我們收集了大量證據，透過各種有效的打擊措施，成功幫助當地破案並採取法律行動。我們平台連續幾個月未發生惡意未經授權的募款活動。

In the third quarter, we deepened our efforts to reform the business strategy for our Waterdrop Insurance Marketplace. As a result, we improved our business quality and continued to upgrade our product and service offerings while further accelerating our pace of technological innovation. This strategy adjustments enabled us to achieve higher-quality operating results.

第三季度，我們深化水滴保險市場業務策略改革。我們不斷提升業務質量，持續升級產品和服務，進一步加快技術創新步伐。此次策略調整，使我們取得了更高品質的經營績效。

We are also proactively pursuing broader innovation opportunities in the medical and healthcare industry. We continue to expand our outreach by leveraging the strength of existing businesses, including our high-performing patient recruitment business and our nascent CRO business, which we continue to explore and develop. Through these efforts, we aim to provide our users with lifetime products and service coverage to enrich our ecosystem.

我們也積極尋求醫療保健產業更廣泛的創新機會。我們利用現有業務的優勢，繼續擴大業務範圍，包括我們持續探索和發展的高性能患者招募業務和新興的 CRO 業務。透過這些努力，我們的目標是為用戶提供終身產品和服務覆蓋，以豐富我們的生態系統。

In the third quarter, we carried out our share repurchase program firmly. We repurchased approximately 1.09 million ADS in total and we are continuing to execute the program prudently. As of the end of September 2022, we had cumulatively repurchased approximately 5.8 million ADSes from the open market, for a total consideration of approximately USD8.5 million.

第三季度，我們堅定地實施了股票回購計畫。我們總共回購了約109萬股ADS，並將繼續謹慎執行該計劃。截至2022年9月底，我們已從公開市場累計回購約580萬股ADS，總代價約850萬美元。

We will continue to focus on the interest of our shareholders. In this September, we announced the one-year extension of our repurchase program, with the maximum repurchase amount increased to USD80 million. This demonstrates our strong confidence in our corporate value and our long-term sustainable development.

我們將繼續關注股東的利益。今年9月，我們宣布將回購計畫延長一年，回購上限提高至8,000萬美元。這顯示了我們對企業價值和長期永續發展的堅定信心。

To conclude, we will continue to maintain ample cash liquidity regardless of the industry environment. We continue to have a confidence and the patient outlook on the industry and our own development. We will remain committed to our mission, stay focused on user value, solidify our business fundamentals, and pursue continuous advancements, thereby building up our strengths to enter a new phase of development.

總而言之，無論產業環境如何，我們都將繼續保持充裕的現金流動性。我們對產業和自身的發展仍然充滿信心和耐心。我們將不忘初心、牢記使命，聚焦用戶價值，夯實基礎，不斷進取，積蓄實力，進入新的發展階段。

I will pass to Ran Wei to discuss the development of the Waterdrop Insurance business for Q3.

我將請冉偉討論第三季水滴保險業務的發展。

Thank you, Shen Peng. Hello, everyone. Let me give you an update on our insurance business development.

謝謝你，沉鵬。大家好。讓我向大家介紹一下我們保險業務的發展。

In the third quarter, the market for life insurance and health insurance in China remained static, with no significant improvement in premium growth, the continued resurgence of COVID-19 and most business pension and policy reform in the life and health insurance industry. At the same time, the demand for protection-type products remains soft which imply that both the demand and supply side of the market are somewhat subdued.

第三季度，中國壽險和健康險市場仍處於停滯狀態，保費成長沒有明顯改善，COVID-19的持續回潮以及壽險和健康險行業大部分企業退休金和保單改革。同時，防護型產品的需求依然疲軟，這意味著市場的需求和供給都有些低迷。

Meanwhile, future volatility in equity market and insurance risk and ever-growing operating pressure, the overall earnings of the insurance industry declined in the first three quarter of 2022. Against this backdrop, we continue to improve our operational efficiency, both the quality of our business and optimize the existing offerings.

同時，受未來股市和保險風險波動以及經營壓力不斷加大的影響，2022年前三季保險業整體獲利出現下滑。在此背景下，我們不斷提高經營效率、經營品質業務並優化現有產品。

We have proactively explored new customer acquisition channels and persistently engaged in product innovation to achieve long-term sustainable business growth in spite of the industry stone. We achieved an industry-high GAAP net profit of RMB170 million in quarter three. And our key operating metrics continued to reflect the high quality of our business relative to the industry.

我們積極探索新的獲客管道，堅持不懈地進行產品創新，以實現業務長期可持續成長。第三季我們實現了業界最高的 GAAP 淨利 1.7 億元。我們的關鍵營運指標持續反映了我們業務相對於行業的高品質。

Now, I will walk you through the performance of our insurance business on forefront. The first steady progress on our business model upgrade in concentrate. In quarter three, the quality and profitability of our insurance business continued to improve, thanks to our persistent optimization of product and experiences. Our first-year premiums increased by 8.4% from quarter two. We revamped protection processes and a based analysis without impacting their perception of our service quality.

現在，我將帶您了解我們保險業務的最前沿表現。一是業務模式升級穩步推進。三季度，透過持續優化產品和體驗，保險業務品質和獲利能力持續提升。我們的第一年保費比第二季成長了 8.4%。我們改進了保護流程和基礎分析，但沒有影響他們對我們服務品質的看法。

The number of long-term insurance policyholders have reviewed their policies, and the LTV contributions of our product have both increased steadily. As members of the senior management, we further refined our market top platform operational model and cost. [On the late sales] conversion chain across all business, to satisfy the lifetime protection needs of users, we have enhanced the overall efficiency. As such, the user repurchase remains above 50% and further increased in quarter three at the same time.

長險投保人審保數量、產品LTV貢獻均穩定提升。作為高階管理層成員，我們進一步完善了市場頂級平台的營運模式和成本。 【關於後期銷售】貫穿全業務的轉換鏈條，滿足用戶終身保障需求，提升整體效率。因此，用戶復購率維持在50%以上，並在第三季進一步增加。

To identify user needs more accurately and efficiently, we continue to optimize the algorithm model based on hundreds of users and user profile. The number of users converted from short-term insurance products to long-term products increased by 14% from quarter two. And the sales for that facility for in-house LP from [events and members], marketing was 2.5 times the industry average.

為了更準確、更有效率地識別使用者需求，我們基於數百個使用者和使用者畫像不斷優化演算法模型。從短期保險產品轉向長期產品的用戶數量較第二季度增加了14%。該設施的內部 LP 來自[活動和會員]、行銷的銷售額是行業平均水平的 2.5 倍。

Our new customer acquisition model has achieved an initial portfolio in quarter three. A number of followers of our video accounts decreased by 110% quarter on quarter, and the total insurance premiums originated from the accounts decreased by 219%, sequentially. Leveraging our video content and the sales conversion capability across supply chain, we have acquired a large volume of directed static. And with this is, our brilliant traffic from state channel.

我們的新客戶獲取模式已在第三季實現了初步投資組合。視訊帳號粉絲數季減110%，視訊帳號產生的保費總額季減219%。憑藉我們的視訊內容和整個供應鏈的銷售轉換能力，我們獲得了大量的定向靜態。這就是我們來自國家頻道的出色流量。

This helped equipped our rate of (technical difficulty) by 180% of quarter over quarter in addition with improvement of our capabilities, both in long-term insurance planning and our long-established sales experience. We have cooperated with more external practical providers to acquire greater numbers of high-quality leads which have helped to drive sales conversion for our long-term insurance products. In quarter three, the sales productivity per lead under this partnership increased by 177% sequentially.

這幫助我們的（技術難度）比率環比提高了 180%，此外還提高了我們在長期保險規劃和長期銷售經驗方面的能力。我們與更多外部實戰提供者合作，以獲取更多優質線索，推動長期保險產品銷售轉換。第三季度，在這種合作關係下，每個銷售線索的銷售效率較上季成長了 177%。

Second, exploring new customer acquisition channels to drive sustainable business growth. In quarter two, we set up and dedicated the second level of business units which adopts the insurance plan bundle to promote the online brokerage business. In quarter three, we mainly focused on building up the talent and their capability with retail, targeting the characteristics of customer needs under the insurance plan bundle. We developed operational standards for our province user management systems.

其次，探索新的獲客管道，推動業務永續成長。第二季度，我們成立並專門採用保險計畫捆綁的第二級業務部門來推廣線上經紀業務。第三季度，我們主要針對零售業務的人才和能力建設，針對保險套餐下的客戶需求特徵。制定了我省用戶管理系統的操作標準。

We also leveraged our major leading trading and software video platform and our bidding retail company to facilitate the customers' acquisitions and explore a one-on-one customer service bundle. These efforts have helped diversify our suite of insurance accounts, both user reach and user experience. Compared to the last quarter, the premiums and the revenue generated from this in units increased by 42% and the business, respectively.

我們還利用我們主要的領先交易和軟體視訊平台以及我們的投標零售公司來促進客戶的收購並探索一對一的客戶服務捆綁。這些努力幫助我們的保險帳戶套件實現了用戶覆蓋範圍和用戶體驗的多元化。與上一季相比，保費和由此產生的收入（單位）和業務分別成長了 42%。

Going forward, we will continue to pace our online project team and strengthen our content creation capability. We will gradually expand the commercial footprint on a larger scale based on the proven model. Since the beginning of this year, we have stepped up our efforts to develop the offline profitability.

展望未來，我們將持續加快線上專案團隊的步伐，加強內容創作能力。我們將在成熟的模式基礎上逐步擴大商業版圖。今年以來，我們加強了線下獲利能力的開發力道。

In quarter three, we launched the WFind, or Waterdrop Family Insurance Needs Diagnosis, which is the dedicated system that can help brokers find new customer needs and provide appropriate insurance plan. The customer centric WFind system empowers brokers to identify the protection needs of each family based on family size, household income, and their expenditure in the deep sense; and then guide them to over more professional, realistic, and objective customized insurance solutions that can buy each family's protection needs.

第三季度，我們推出了WFind，即水滴家庭保險需求診斷，這是一個專門的系統，可以幫助經紀人發現新的客戶需求並提供合適的保險計劃。以客戶為中心的WFind系統，讓經紀商能夠根據家庭規模、家庭收入、支出等深度識別每個家庭的保障需求；然後引導他們選擇更專業、更現實、更客觀的客製化保險方案，滿足每個家庭的保障需求。

At the end of September, our offline project team tend with the model line for product and raising self-interest trading of more than [RMB100 billion] or up by 52% quarter-over-quarter. We have extended our offline brokerage business to lined [quartile] including Beijing and Shanghai. Going forward, we will optimize the early ecologies of our established network and steadily expand our offline portage business to our previous prospects.

截至9月底，線下專案組產品線趨向模型化，自利交易額超過千億元，季增52%。我們已將線下經紀業務拓展至包括北京和上海在內的四分位。未來，我們將優化現有網路的早期生態，穩步拓展線下搬運業務，達到既定目標。

Third, production innovation. To meet the protection needs of customers with pre-existing conditions, in quarter two, we launched Waterdrop Blue Ocean, a series of critical illness product with a waiver of health declarations, further expanding the user group of our CI insurance products by removing the measure of [the certain call] for the handling of the patients with chronic diseases. The product series has worthwhile recognition in the market and generated sizable sales.

三是生產創新。為滿足已有疾病客戶的保障需求，第二季度，我們推出了免健康聲明的重疾產品「水滴藍海」系列產品，取消了免健康申明措施，進一步擴大了人身保險產品的用戶群。處理慢性病患者的[特定呼籲]。該系列產品得到了市場的認可並產生了可觀的銷售量。

Similarly, in the third quarter, we launched a series of redefined coverage medical insurance products waiving some health declaration. This new product showcases our business to expand our offerings to customers with pre-existing conditions while keeping our advising risks under control.

同樣，在第三季度，我們推出了一系列重新定義保險範圍的醫療保險產品，免除了部分健康申報。這項新產品展示了我們的業務，即擴大我們為患有既往疾病的客戶提供的服務，同時控制我們的諮詢風險。

Despite the protection needs of different age groups, in third quarter, we worked with our insurer partners to co-develop a customized critical illness insurance product for children which offers additional medical service benefits for leukemia. We also launched our various low premium critical illness insurance product designed to meet the protection of the younger generations.

儘管不同年齡層的保障需求不同，第三季度，我們與保險公司合作夥伴共同開發了兒童客製化重疾險產品，為白血病提供額外的醫療服務保障。我們也推出了多種低保費重大疾病保險產品，旨在滿足年輕一代的保障。

In the third quarter, the insurance premium for our customers under the age of 14 increased 20% quarter over quarter. Meanwhile, these customers' needs for asset allocation in a lower interest rate environment, will continue to enrich our ceiling product metrics and improve the professional capability that our team (inaudible) prevailing products originating from our self-operated [premium] increased by 23% quarter on quarter.

第三季度，14歲以下客戶保費較上季成長20%。同時，這些客戶在較低利率環境下的資產配置需求，將持續豐富我們的上限產品指標，提高我們團隊（聽不清楚）自營產品的專業能力，提升23%每季。

Fourth, the export insurance technology. In addition to launch the WFind and so, we also upgraded the whole process of insurance claims assistance services to optimize user experience. Based on our analysis of a large number of claim cases, we have recalibrated, integrated the best practices into the whole process of our online claims assistance abilities.

四是出口保險技術。除了推出WFind等，我們也升級了保險理賠協助服務的完整流程，優化使用者體驗。基於對大量理賠案例的分析，我們重新校準，將最佳實踐融入線上理賠協助能力的全流程中。

Empowered by our digital capability, we upgraded eight claims assistance services and launched all-new claims that have results within our most populations which help either handle various issues during the claims settlement process. For example, our intelligent optimal selling business system leverages our OCR-based extraction technology to effectively improve the equity of service uploads.

在數位能力的支持下，我們升級了八項理賠協助服務，並推出了全新的理賠服務，這些服務在我們大多數人群中取得了成效，有助於處理理賠過程中的各種問題。例如，我們的智慧優銷業務系統利用基於OCR的擷取技術，有效提升服務上傳的公平性。

Our product customization assistant uses our claims settlement insight to generate, innovate insurance product recommendations for either demanding more customer side protection. In the future, we will continue to invest our claims service system and try to deliver a better claim expertise for our users.

我們的產品客製化助理利用我們的理賠洞察力為需要更多客戶保護的客戶產生創新的保險產品建議。未來，我們將持續投資理賠服務體系，努力為使用者提供更好的理賠專業知識。

This concludes my briefing on our business -- on our insurance business. Now, let me hand over to Zetao Zhu for an update for our medical crowdfunding and our patient recruitment business.

我對我們的業務—我們的保險業務的介紹到此結束。現在請朱澤濤介紹我們的醫療眾籌和患者招募業務的最新情況。

Thank you, Ran Wei. I would like to share some updates on our medical crowdfunding business.

謝謝你，冉薇。我想分享一下我們醫療眾籌業務的一些最新情況。

At the end of Q3, accumulated total of 420 million donors helped exceeding 2.69 million patients create over RMB55.3 billion from our platform. Our user number and fundraising amounts have remained stable even after we implemented a service fee.

截至第三季末，累計捐贈人次達4.2億，幫助超過269萬名病患透過我們的平台創造了超過553億元人民幣的捐款。即使我們實施了服務費，我們的用戶數量和籌款金額仍然保持穩定。

In the third quarter, the operational transparency committee continued to enhance our operational control related to authenticity and transparency on our medical crowdfunding efforts and launched new initiatives to increase the transparency of fund flows for each donation. For example, we have enhanced fund flow disclosure by adding certain statements and more defined visual details on the platform fundraising pages.

第三季度，營運透明度委員會繼續加強醫療眾籌活動真實性和透明度方面的營運控制，並推出新措施以提高每筆捐款資金流向的透明度。例如，我們透過在平台募款頁面上添加某些聲明和更明確的視覺細節來增強資金流向揭露。

When a patient withdraws money, the bank will issue payment placed for both our platform and patient. The fundraising page will also disclose other information such as how much cash has been withdrawn by the patient, the service fee charge, the third-party payment internal fee, and the amount of funds available for withdrawal.

當患者提款時，銀行將為我們的平台和患者發放付款。募款頁面還會揭露患者提取了多少現金、收取的服務費、第三方支付內部費用、可提取的資金金額等其他資訊。

The fund flow related to each donation are thus easily traceable. Meanwhile, after several months on efforts, we worked closely with the police in Shandong to crack down on the case of fundraising fraud executed by malicious individuals, resulting in the arrest of 17 suspects. Let me review various effective measures. The platform realized zero malicious fundraising activities for several consecutive months.

因此，每筆捐款的資金流向都可以輕鬆追蹤。同時，經過幾個月的努力，我們與山東警方密切配合，破獲了惡意人員實施集資詐騙案，抓獲犯罪嫌疑人17名。讓我回顧一下各種有效的措施。平台連續幾個月實現惡意募款活動為零。

It's notable that our Waterdrop Medical Crowdfunding platform was successfully integrated into the classic case of joining universe community of shared users in the cyberspace which is initiated by the World Internet Conference. From a global perspective, most average families are either high of financial challenge caused by physical illnesses, especially the people in remote areas who have less social securities. When they unfortunately encounter crisis in the midst of external injuries, they often have to choose to give up the necessary medical treatment or even they have lied because of the heavy financial burden.

值得關注的是，水滴醫療眾籌平台成功融入世界互聯網大會發起的網路空間共享用戶宇宙社群的經典案例。從全球範圍來看，大多數普通家庭要么因身體疾病而面臨較高的經濟困難，特別是社會安全較少的偏遠地區的人們。當他們不幸遭遇外傷危機時，往往會因為沉重的經濟負擔而不得不選擇放棄必要的醫療，甚至說謊。

But our medical crowdfunding utilize Internet to bring the help of mutual health to social media networks which will facilitate the efficiency of [funds]. Once the dilutive protection network for millions of people in dozens of countries and regions and thereby gaining a wide-ranging recognition.

但我們的醫療眾籌利用互聯網，把共同健康的幫助帶到社交媒體網絡上，這將提高[資金]的效率。曾經的稀釋保護網路為數十個國家和地區的數百萬人提供了廣泛的認可。

For the patient recruitment business in the third quarter, E-find Patient Platform sustained a high growth momentum, including more than 900 patients for clinical trials with QoQ growth rate of 36% and bringing our total number of clinical trial programs to more than 400.

第三季患者招募業務方面，E-find患者平台持續維持高速成長勢頭，臨床試驗患者數超過900例，季增36%，臨床試驗項目總數超過400個。

We have collaborated with more than 100 innovative pharmaceutical companies and CROs in China and worldwide, and number of patients and the number of partners continued to increase this quarter. In particular, our E-find platform has established collaboration with a number of leading global CROs. This has allowed us to work from several international non-centered clinical trials initiated by multinational pharmaceutical companies.

我們與中國及全球超過100家創新藥廠和CRO合作，本季患者數量和合作夥伴數量持續成長。特別是我們的E-find平台已與多家全球領先的CRO建立了合作。這使我們能夠參與由跨國製藥公司發起的多項國際非中心臨床試驗。

In a lung cancer clinical trial project initiated by leading domestic pharmaceutical company, our E-find Patient Platform demonstrates its unique strength in digital patient recruitment and the test recorded 42 patients for the critical trial within 9 months, despite the volume of COVID lockdowns in China. The pharmaceutical companies subsequently honored us with the sales recruitment team awards, and we are expected to become exclusive patient recruitment partner in the project to launch next year.

在國內領先藥廠發起的肺癌臨床試驗計畫中，我們的E-find病患平台展現了其在數位化病患招募方面的獨特優勢，在中國疫情封鎖的情況下，在9個月內記錄了42名患者參與關鍵試驗。隨後製藥公司授予我們銷售招募團隊獎，我們預計將成為明年啟動的專案的獨家患者招募合作夥伴。

Our new digital patient recruitment capability has helped us to build up an excellent reputation and an essential position in the industry.

我們新的數位患者招募能力幫助我們在業界建立了良好的聲譽和重要的地位。

This concludes my part and let me turn it over to the call to Hu Yao to discuss our technical innovation update.

我的部分到此結束，接下來我將給胡耀打電話，討論我們的技術創新更新。

(interpreted) Thank you, Zetao. Hi, everyone. I'm going to talk about our third-quarter technology innovation update across five important platforms.

（翻譯）謝謝澤濤。大家好。我將談論我們在五個重要平台上的第三季技術創新更新。

Our chatbot not only serves as the ears and voice of our virtual employee but also features as a human-like mindset even for the insurance marketing scenario. First, regarding the years of our chatbot. In the third quarter, we launched a set of optimization algorithms that enhance the accuracy of our ASR, automatic speech recognition technology, to improve our chatbot's ability to accurately recognize users' intentions. We deployed two algorithms, one which provides background noise, identifications, and filtration; and another which is especially adapt or analyzing multicenter user responses, therefore enabling our chatbot to understand users just like human.

我們的聊天機器人不僅充當虛擬員工的耳朵和聲音，而且即使在保險行銷場景中也具有類人的思維方式。首先，關於我們的聊天機器人的歷史。第三季度，我們推出了一套優化演算法，可以提高我們的ASR（自動語音辨識技術）的準確性，以提高我們的聊天機器人準確識別用戶意圖的能力。我們部署了兩種演算法，一種提供背景雜訊、識別和過濾；另一種提供背景雜訊、識別和過濾。另一個專門適應或分析多中心用戶回應，因此使我們的聊天機器人能夠像人類一樣理解用戶。

Second, as for the voice of our chatbot, we have equipped it with a voice cloning technology that enables it to speak to our users while emulating the tone of our best sales staff, thereby enhancing the smoothness of the dialogue and improving the overall user experience significantly.

其次，對於我們的聊天機器人的聲音，我們為其配備了語音克隆技術，使其能夠在模仿我們最好的銷售人員的語氣的同時與我們的用戶對話，從而增強對話的流暢性並改善整體用戶體驗顯著地。

Meanwhile, on top of our proprietary intelligent risk control model, we have also developed additional chatbot functionalities which enable the estimation of our sales conversion rates, the selection of optimal outbound calling plans, and the generation of complaint alerts. These models help the chatbot communicate with users at a most appropriate time with advanced dialog spiel and with a more human-like mindset, thereby maximizing our sales conversion rate and minimizing the potential disturbance to our users.

同時，在我們專有的智慧風控模型之上，我們還開發了額外的聊天機器人功能，可以估算我們的銷售轉換率、選擇最佳外撥計劃以及產生投訴警報。這些模型可幫助聊天機器人在最合適的時間透過高級對話語言和更人性化的思維方式與用戶溝通，從而最大限度地提高我們的銷售轉換率並最大限度地減少對用戶的潛在幹擾。

Second, I will address our efforts to refine our intelligent marketing operations through AI technologies. Our AI-powered machine system performed a number of functions, including the first-time allocation of leads, scheduling follow-up calls, and the reassignment of leads. The system is one of the most important components of our intelligent marketing operations.

第二，透過人工智慧技術，精細化行銷智慧化。我們的人工智慧機器系統執行了許多功能，包括首次分配銷售線索、安排後續呼叫以及重新分配銷售線索。該系統是我們智慧行銷營運最重要的組成部分之一。

In the third quarter, we upgraded the module which performs first time allocation of leads to version 4.0, which enables more flexibility in AI-based decision-making, including lead sorting and matching. As a result, our APL efficiency improved by 12% compared with version 3.0. We use AI to select the most appropriate call back time, have significantly improved our user experience and the sales conversion rates. Finally, we have also applied AI to determine the reassignment of leads which helped enhance our APL efficiency by around 16%.

第三季度，我們將線索首次分配模組升級到4.0版本，使基於人工智慧的決策更加靈活，包括線索排序和匹配。結果，我們的APL效率比3.0版本提高了12%。我們利用人工智慧來選擇最合適的回電時間，顯著提高了我們的用戶體驗和銷售轉換率。最後，我們也應用人工智慧來確定潛在客戶的重新分配，這有助於將我們的 APL 效率提高約 16%。

In summary, version 4.0 of our AI-powered matching system is highly stable and efficient in lead making and has reached our industry-leading position. The system continues to play an important role in enhancing our sales conversion rates for long-term insurance products.

綜上所述，我們的AI匹配系統4.0版本在做鉛方面高度穩定、高效，達到了業界領先的地位。該系統在提高長期保險產品銷售轉換率方面持續發揮重要作用。

Next, I will discuss our medical algorithm platform. Our proprietary extraction algorithm for medical records makes filling out medical records more efficient and speed up our patient recruitment process. The classification algorithm implemented in our medical data center has significantly improved our data governance efficiency, with an accuracy rate of about 95%. In addition, our intelligent verification algorithm which is capable of answering more than 20 types of questions automatically, has significantly improved the efficiency of insurance claims.

接下來我會討論我們的醫療演算法平台。我們專有的醫療記錄提取演算法使填寫醫療記錄更加高效，並加快我們的病患招募流程。我們的醫療資料中心實施的分類演算法顯著提高了我們的資料治理效率，準確率約為95%。此外，我們的智慧驗證演算法能夠自動回答20多種問題，顯著提高了保險理賠的效率。

In this quarter, we officially rolled out the AI video production function in our Waterdrop Broker app. That means our brokers can now access customized AI-powered video production services within minutes, helping them use their personal brand. Through this exclusive video generation tools, we have enhanced our brokers' customer acquisition capabilities by empowering them to easily create original marketing content.

本季度，我們在水滴經紀商應用中正式推出了AI影片製作功能。這意味著我們的經紀人現在可以在幾分鐘內存取客製化的人工智慧影片製作服務，幫助他們使用自己的個人品牌。透過這種獨家影片產生工具，我們增強了經紀商的客戶獲取能力，使他們能夠輕鬆創建原創行銷內容。

Finally, I will give you an update on our intelligent risk control platform. We upgraded all of our risk control products and integrated them into a unified algorithmic risk control platform. The platform's integrated algorithmic capabilities not only provides strong risk control support to all of our businesses but also greatly mitigates the potential PR risks.

最後跟大家介紹一下我們的智慧風控平台的最新狀況。我們對所有風控產品進行了升級，並整合為統一的演算法風控平台。平台整合的演算法能力不僅為我們所有的業務提供了強大的風控支持，也大大降低了潛在的公關風險。

I will give you two examples of its application. In compliance with users' right to know requirements, we have developed a model which can recognize unauthorized fundraising activity and identifies the malicious intermediaries with a high degree of accuracy. This helps us better safeguard the interest among users, maintaining the recognition of Waterdrop Medical Crowdfunding platform, and stamp out malicious fundraising activity from the very beginning.

我將舉兩個例子來說明它的應用。遵循使用者知情權要求，我們開發了一種模型，可以識別未經授權的募款活動，並高精度識別惡意中介機構。這有助於我們更好地維護用戶的利益，維護水滴醫療眾籌平台的認可度，從源頭杜絕惡意募款活動。

Second, in order to protect user privacy, we have gone above and beyond the conventional methods to provide additional protections for public-facing information upgraded -- uploaded by our fundraising units. We use a sensitive information masking model to automatically identify and mask personal information contained in uploaded image to avoid exposure of sensitive information and fulfill our duty to protect user privacy.

其次，為了保護用戶隱私，我們超越了傳統方法，對募款單位上傳的面向公眾的資訊進行了額外的保護。我們採用敏感資訊脫敏模型，自動辨識並封鎖上傳圖片中包含的個人訊息，避免敏感資訊暴露，履行保護使用者隱私的義務。

Thank you. I will now hand over to Yang Guang to discuss our third-quarter financial performance.

謝謝。我現在請楊光討論我們第三季的財務表現。

Thank you, Hu Yao. Hello, everyone. I will now walk you through our financial highlights for the third quarter of 2022. Before I go into details on the financial performance, please be reminded that our numbers reported here will be in RMB and please refer to our earnings release for detailed information on our comparative business financial performance on both the year over year and quarter-over-quarter basis.

謝謝你，胡耀。大家好。現在，我將向您介紹我們2022 年第三季的財務亮點。在詳細介紹財務業績之前，請注意，我們此處報告的數據將以人民幣為單位，請參閱我們的收益發布，以了解有關我們的財務表現的詳細資料。同比和環比的業務財務表現比較。

Despite the challenging external environment brought by the pandemic and the slow economic growth, we have planned forward in the profit-making phase with four consecutive quarters of profitability, further withstanding the momentum as we have meticulously pursued a high-quality operational strategy since the third quarter of 2021. The net operating revenue increased by 10% quarter over quarter and decreased by 0.9% year over year to RMB772 million which was primarily due to the decrease in insurance-related income.

儘管疫情帶來的外部環境充滿挑戰，經濟成長緩慢，我們仍提前規劃盈利階段，連續四個季度實現盈利，三季度以來我們精心奉行高質量的經營策略，進一步頂住了勢頭。2021 年第四季度，淨營業收入7.72億元，季增10%，年減0.9%，主要是因保險相關收入減少。

For Q3, operating costs and expenses decreased by 50% year over year to RMB639 million due to the effective cost control measures taken since the third quarter of 2021. On a quarter-over-quarter basis, operating costs and expenses increased by 17%.

第三季度，由於自2021年第三季以來採取有效的成本控制措施，營運成本和費用年減50%至人民幣6.39億元。季增17%。

To break it down, operating costs were RMB341 million, up by 15% year over year due to the increase in professional and outsourced customer service fee of RMB22 million. The recording of crowdfunding-related service fees direct cost of RMB63 million from sales and marketing expenses to operating costs as we started to charge crowdfunding service fees since April 2022. And RMB19 million increase in the estimated cost of one year of insurance coverage related to the termination of mutual aid plan last year based on the final settlement information and partially offset by RMB85 million decrease in personnel costs.

其中，營業成本為人民幣3.41億元，年增15%，主要是因為專業及外包客服費用增加人民幣2,200萬元所致。由於我們自2022 年4 月起開始收取眾籌服務費，因此與眾籌相關的服務費從銷售和營銷費用計入營運成本的直接成本為人民幣6,300 萬元。與眾籌相關的一年保險範圍的預計成本增加了人民幣1,900 萬元。去年根據最終結算資訊終止互助計劃，並被人員成本減少人民幣 8,500 萬元部分抵消。

On quarter-over-quarter basis, operating costs increased by 40%, primarily due to professional and outsourced customer service fee increased by RMB64 million as compared to second quarter of 2022.

營運成本較上季成長40%，主要是由於專業及外包客戶服務費較2022年第二季增加人民幣0.64億元。

Total marketing expenses decreased materially by 82% year over year to RMB137 million for the third quarter of 2022. The decrease was primarily due to a RMB500 million decrease in marketing expenses to third-party traffic channels and [RMB124 million] decrease in outsourced sales and marketing service fees to third parties. On a quarter-over-quarter basis, gross and marketing expenses remained stable compared with RMB144 million for the second quarter of 2022.

2022 年第三季行銷費用總額較去年同期大幅下降82%，至人民幣1.37 億元。下降的主因是第三方流量管道的行銷費用減少人民幣5 億元，以及外包銷售和行銷費用減少[人民幣1.24 億元]。向第三方收取的行銷服務費。與2022年第二季的人民幣1.44億元相比，季減而言，總費用和行銷費用保持穩定。

G&A decreased by 26% in Q3 to RMB82 million year over year due to the combined impact of a decrease of RMB8.7 million in share-based compensation expenses, a decrease of RMB9.9 million in personnel costs and a decrease of RMB5.4 million in rental expenses. On a quarterly basis, the G&A expenses remained stable compared with RMB86.1 million for the second quarter of 2022.

由於股權激勵費用減少人民幣 870 萬元、人員成本減少人民幣 990 萬元以及減少人民幣 5.4 元的綜合影響，第三季度一般及行政費用同比下降 26% 至人民幣 8200 萬元。萬元租金支出。按季計算，一般及行政費用與 2022 年第二季的 8,610 萬元人民幣相比保持穩定。

R&D expenses decreased by 23% to RMB78 million year over year. The decrease was primarily due to RMB19 million decrease in research and development personnel costs and share-based compensation expenses and the increase by 11% quarter by quarter which is primarily due to RMB7.7 million increase in research and development personnel costs and share-based compensation expenses.

研發費用年減23%至人民幣7,800萬元。減少主要是由於研發人員成本和股權激勵費用減少人民幣1,900萬元，季增11%，主要是由於研發人員成本和股權激勵費用增加人民幣770萬元補償費用。

During Q3, we reported a non-GAAP profit of RMB215 million and a US GAAP net profit of RMB169 million compared with an adjusted net loss of RMB453 million for the same period of 2021. The profit we have generated over the last four fiscal quarters illustrate the achievement of cost discipline and profit enhancement.

第三季度，我們公佈的非GAAP 利潤為人民幣2.15 億元，美國GAAP 淨利潤為人民幣1.69 億元，而2021 年同期調整後淨虧損為人民幣4.53 億元。我們在過去四個會計季度產生的利潤顯示實現成本控制和利潤提高。

As of September 30, 2022, our cash and cash equivalents and the short-term investment balance increased to RMB3,588 million, an increase of [RMB300 million] or 9% from the end of previous quarter, as we continue to generate positive operating cash flow offset by the investing and financing cash outflow.

截至2022年9月30日，我們的現金及現金等價物及短期投資餘額增至人民幣35.88億元，較上季末增加[人民幣3億元]，即9%，因為我們持續產生積極的經營業績現金流量被投資和融資現金流出所抵銷。

So far, we have once again reinforced our financial guideline on achieving a non-GAAP profit in the year of 2022. And going forward, we will continue our efforts in consolidating our business, enhancing our revenue quality, and instilling cost optimization.

到目前為止，我們再次強化了在 2022 年實現非 GAAP 利潤的財務指引。展望未來，我們將繼續努力鞏固我們的業務，提高我們的收入質量，並逐步優化成本。

That's it for results. But now, let's turn to our Q&A.

這就是結果。但現在，讓我們轉向問答。

(Operator Instructions) Mao Qingqing, CICC.

（操作員指示） 毛慶慶，中金公司。

Thanks, Operator. This is Qingqing from CICC. First of all, congrats on the results. We noticed that you have a sufficient cash reserve. My question is, what's your plan for utilizing it? That's all for me.

謝謝，接線生。我是中金公司的慶慶。首先，祝賀結果。我們注意到您有足夠的現金儲備。我的問題是，您打算如何使用它？這就是我的全部。

This is Yang Guang speaking. Thank you for the question. As mentioned earlier, as of the end of September, our cash and cash equivalents and short-term investments totaled RMB3.6 billion. So even taking into account our share repurchase, we were able to generate a positive cash inflow of RMB300 million in the third quarter. Our ample cash reserve and our ability to generate positive cash flow put us in a very strong position to deliver our strategic goal and withstand the evolving external environment.

我是楊光。感謝你的提問。如前所述，截至9月底，我們的現金及現金等價物及短期投資總額為36億元人民幣。因此，即使考慮到我們的股票回購，我們第三季也能產生3億元人民幣的正現金流入。我們充足的現金儲備和產生正現金流的能力使我們處於非常有利的地位，可以實現我們的策略目標並抵禦不斷變化的外部環境。

I think we'll continue to maintain a reasonable and sufficient cash reserve. Meanwhile, we provided that we have ample working capital nearly flat with daily operations. They will use an approximate amount of funds to build our medium and long-term competitive edge to achieve healthy and sustainable development. I think firstly, we will use our fund to implement our share repurchase program. And since our IPO, we have used our own funds and cumulatively bought back [5.8 million ADS] from the open market for total consideration of approximately USD8.5 million, based on our strong confidence in our corporate value and our long-term sustainable development.

我認為我們會繼續保持合理充足的現金儲備。同時，我們提供充足的營運資金，幾乎與日常營運持平。他們將用大約金額的資金來打造我們的中長期競爭優勢，實現健康永續發展。我認為首先，我們將使用我們的資金來實施我們的股票回購計劃。自IPO以來，我們基於對企業價值和長期可持續發展的堅定信心，使用自有資金從公開市場累計回購了[580萬美國存託憑證]，總代價約為850萬美元。

When in September, we announced the one-year extension of our repurchase program with the maximum repurchase amount increased to USD80 million, so we plan to reserve the repurchase share for share incentive plans which will align the interest of our employees with the goals of our company. I think secondly, we will consider a strategic investment at the right time, and we will use a portion of the fund to pursue suitable strategic investments and acquisition opportunities.

9月份，我們宣布將回購計劃延長一年，最高回購金額提高到8000萬美元，因此我們計劃將回購股份保留用於股權激勵計劃，使員工的利益與我們的目標保持一致。公司。我認為第二，我們會在適當的時候考慮策略投資，我們會用一部分資金去尋求合適的策略投資和收購機會。

The purpose will be centering around the solid framework formed by our product innovation capability, technological innovation, and the synergies created among various unique servicing segments or to penetrate deeper into the industry strengthen our ecosystem of insurance healthcare technology and thereby further expanding our presence in the industry.

目的是圍繞我們的產品創新能力、技術創新以及各個獨特服務領域之間形成的協同效應所形成的堅實框架，或者深入行業，加強我們的保險醫療科技生態系統，從而進一步擴大我們在保險醫療領域的影響力。業。

And it's been certainly, we will invest in new directives in the healthcare sector, relying on our established advantage in customer patient relationship and entitling big data analytics. We will come in breakthroughs in the medical innovation space. As mentioned by the call earlier and our patient recruitment business is gradually becoming an industry here and our CRO business has also made remarkable progress. So going forward, we will continue to allocate an appropriate amount of funds to pursue innovation opportunities in the medical and healthcare industry.

可以肯定的是，我們將依靠我們在客戶病患關係和大數據分析方面的既定優勢，投資醫療保健領域的新指示。我們將在醫療創新領域取得突破。如同先前電話中所提到的，我們的病患招募業務正逐漸成為這裡的一個產業，我們的CRO業務也取得了顯著的進展。所以未來我們會繼續投入適量的資金去尋找醫療健康產業的創新機會。

So although the new business initiatives may not generate significant revenue and profit in the short term, but we believe that it will help the company create a new competitive edge in the long run and inject new momentum into the long-term growth of the company.

因此，儘管新的業務舉措短期內可能不會產生顯著的收入和利潤，但我們相信，從長遠來看，它將幫助公司創造新的競爭優勢，為公司的長期成長注入新的動力。

I think that's all for the question.

我想這就是問題的全部了。

Edwin Liu, CLSA.

劉（Edwin Liu），里昂證券。

(interpreted) So thanks for the opportunity to ask questions. I have two questions here. First one is regarding the crowdfunding platform. Since we just finished the first full quarter of this crowdfunding where it started to charge the service fee, can you provide a breakdown of the revenue and profit for this segment and any color on the trend? And my second question is regarding the guidance. Appreciate it if management can provide guidance in terms of operating revenue and net profit for this year and next year. Thank you.

（解釋）非常感謝您給我提問的機會。我在這裡有兩個問題。第一個是關於眾籌平台。由於我們剛剛完成了本次眾籌的第一個完整季度，並開始收取服務費，您能否提供該細分市場的收入和利潤的詳細信息以及趨勢的任何顏色？我的第二個問題是關於指導。如果管理層能夠提供今年和明年的營業收入和淨利潤方面的指導，我們將不勝感激。謝謝。

Thank you for question. I'll answer the first question. Our Waterdrop Medical Crowdfunding platform has seek to fully subsidize its service fee and started with charging a service fee of 3% in April of this year, up to a maximum amount of RMB5,000 for a single campaign. And this is to cover part of the operational costs and help more patients with critical illness to raise capital. So the user number and fundraising income on our platform has remained stable after the charging of the service fee. And we will also regularly and transparently disclose our service fee revenue in our financial report through our other communication channels.

謝謝你的提問。我來回答第一個問題。我們的水滴醫療眾籌平台力求全額補貼服務費，從今年4月開始收取3%的服務費，單次最高限額為5,000元。這是為了覆蓋部分營運成本，幫助更多的危重病患籌措資金。所以在收取服務費後，我們平台的用戶數量和籌款收入保持穩定。我們也將透過其他溝通管道定期、透明地在財務報告中揭露我們的服務費收入。

And since April, when we started to charge the crowdfunding service fee, we have generated around RMB120 million for the service fee cumulatively as of the end of September. For Q3, our revenues from service fees were RMB59 million, accounting for around 2.8% of the fund raised during Q3. The rate is below 3% because we are still subsidizing campaigns for collectively a few of the patients in some cases.

自4月開始收取眾籌服務費以來，截至9月底，我們已累計產生服務費約1.2億元。第三季度，我們的服務費收入為人民幣 5,900 萬元，約佔第三季募集資金的 2.8%。該比率低於 3%，因為在某些情況下我們仍在為少數患者集體開展活動提供補貼。

So the direct operating cost of our crowdfunding platform was RMB54 million. But in addition, there are also indirect cost owned by our company, including IT and middle office, risk control, and other functions. So the service fee was very sufficient to cover most of the direct operating cost. But overall, our Waterdrop Medical Crowdfunding platform remains on a healthy and stable growth track. However, we did not intend to trust the service fee for profit purpose or for our platform to maintain its daily operations sustainably and better serve our users.

那麼我們眾籌平台的直接營運成本是5400萬元。但除此之外，還有我們公司擁有的間接成本，包括IT和中台、風控等功能。因此，服務費足以涵蓋大部分直接營運成本。但總體而言，我們的水滴醫療眾籌平台仍然保持在健康穩定的成長軌道上。然而，我們並不打算相信服務費是為了盈利或為了我們的平台可持續地維持日常運營並更好地服務我們的用戶。

Our future plans will remain on track, unchanged, and that is to make the service fee cover the operational cost. So we will keep our crowdfunding platform on a healthy and steady development type, and continuously upgrade the service and explore more monetization scenarios in an orderly and healthy manner. We will strive to provide premium fundraising service for more patients in need and help establish a strong health advertising system for the public.

我們未來的計畫將維持在正軌上，不變，那就是讓服務費覆蓋營運成本。因此，我們將維持眾籌平台健康穩健的發展態勢，不斷升級服務，有秩序、健康地探索更多的變現場景。我們將努力為更多有需要的患者提供優質的募款服務，並協助大眾建立強大的健康廣告體系。

And to talk about the guidance for the whole year profit, I think at the beginning of this year, we set the goal to achieve non-GAAP profit for our established business for the full year of 2022. So far, we have achieved a good progress with our strategic transformation, and we have continued to see improvements in our operating and financial performance.

說到全年利潤的指導，我認為今年年初，我們設定了目標，即我們既定業務在2022年全年實現非公認會計準則利潤。到目前為止，我們已經取得了很好的成績。我們的策略轉型取得進展，我們的營運和財務表現持續改善。

Since earlier this year, our revenue has gradually stabilized and returned to the growth track quarter over quarter. Since we work to achieve an adjusted net profit in Q4 last year, we have maintained a healthy level of profitability in each quarter of 2022.

今年以來，我們的營收逐漸穩定並重回逐季成長軌道。自去年第四季我們努力實現調整後淨利潤以來，我們在 2022 年每季都保持了健康的獲利水準。

In Q3, our net profit on GAAP basis reached [RMB170 million]. Despite the external uncertainties, we have established the foundation for more healthy and more solid and more billing growth path against the various external factors. We have entered into a phase of healthier and more sustainable growth, business growth, with a more solid foundation for future development.

第三季度，我們依照美國通用會計準則計算的淨利達到[人民幣1.7億元]。儘管外部存在不確定性，但我們已經為應對各種外部因素的更健康、更堅實、更有價值的成長道路奠定了基礎。我們已經進入了一個更健康、更永續的成長階段，業務成長，為未來的發展奠定了更堅實的基礎。

For our 2022 full-year profit, we expect to maintain the profitable trend in Q4 and to achieve a net profit around RMB500 million for the full year of 2022, outperforming the goal we set at the beginning of the year.

對於2022年全年利潤，我們預計將維持第四季的獲利趨勢，2022年全年淨利潤5億元左右，優於年初設定的目標。

I hope that answers all your questions.

我希望這能回答您所有的問題。

Yes. Thank you very much.

是的。非常感謝。

Thomas Wang, Goldman Sachs.

湯瑪斯·王，高盛。

Thank you. Thank you, management, for the opportunity. A quick question on the increasing operating costs in the third quarter. So just wanted to understand what driving that increase?

謝謝。謝謝領導給我這個機會。關於第三季營運成本增加的一個簡單問題。所以只是想了解是什麼推動了這種成長？

(spoken in Mandarin)

（以國語發言）

I think the increase in the operating cost was due to the recording of certain crowdfunding-related service direct cost of RMB63 million, switched from certain marketing expenses to operating costs as we started to charge crowdfunding services since April of this year.

我認為營運成本的增加是由於我們從今年4月份開始對眾籌服務收費，因此記錄了某些與眾籌相關的服務直接成本人民幣6300萬元，從某些行銷費用轉為營運成本。

(spoken in Mandarin)

（以國語發言）

Of course, we were only starting to charge starting from April this year, so it didn't cover the fourth quarter. And also, we will increase cost on the professional and also the customer service fees. That's mainly related to the crowdfunding dividend.

當然，我們今年4月份才開始收費，所以沒有涵蓋第四季。此外，我們還將增加專業人員的成本以及客戶服務費。這主要與眾籌分紅有關。

Operator, do we have the last question?

接線員，我們還有最後一個問題嗎？

Yes, we do. (Operator Instructions) Susie Liu, Bank of America.

是的，我們願意。 （操作員指示）Susie Liu，美國銀行。

Thanks, Operator.

謝謝，接線生。

(interpreted) Thanks for taking my questions. This is Susie Liu from Bank of America Securities. My question is about future expansion strategy. We see that Waterdrop has already established a competitive advantage in Tier 3 cities or below but which is the area you've been focused on? And going forward, are there any strategy to expand business in Tier 1 and Tier 2 cities, and could you share more details on your strategy, please? Thanks.

（翻譯）感謝您回答我的問題。我是美國銀行證券公司的 Susie Liu。我的問題是關於未來的擴張策略。我們看到水滴已經在三線以下城市建立了競爭優勢，那麼您一直在關注的是哪個領域？展望未來，在一線和二線城市拓展業務有什麼策略嗎？能否分享一下你們策略的更多細節？謝謝。

Okay. This is Ran Wei speaking. Talk something about interest in about expanding our business to first and second tier cities. Right now, more than 80% of our current is either from Tier 3 and below cities which is consistent with operation distribution. So from the perspective of absolute number user -- our users in Tier 1 and Tier 2 cities, we have an advantage in the industry.

好的。我是冉偉。談談我們對將業務擴展到一二線城市的興趣。目前，我們80%以上的流動人口來自三線及以下城市，這與業務分佈是一致的。所以從絕對用戶數來看，我們一二線城市的用戶，我們在業界是有優勢的。

So to expand either to the first and the second tier cities, we have four strategies. First, our online also brokerage business mainly works on Tier 1 and Tier 2 cities. We provide diversified business model such as the organization-based model, the AB patterns, agent model, and really just normal according to the local conditions and the launch of the (inaudible) systems that help brokers diagnose customer needs and provide appropriate interest base. This way, we can set the middle-class family in the first and second tier cities with more professional and objective insurance solution.

因此，為了向一線和二線城市擴張，我們有四個策略。首先，我們的線上經紀業務主要集中在一二線城市。我們提供多元化的業務模式，如組織型模式、AB模式、代理模式，以及真正因地制宜而推出的（聽不清楚）系統，幫助經紀商診斷客戶需求並提供適當的利益基礎。這樣，我們就能為第一線城市的中產階級家庭提供更專業、客觀的保險解決方案。

Second, we will leverage our customer insight to continuously reach our product offerings and develop product lines to better diversified users in Tier 1 and Tier 2 cities. Third, if the issue's [climb the build-up] which features in big concerns and community marketed to facilitate customer acquisition. This will enhance our user experience and expand our reach among business in Tier 1 and Tier 2 cities who already have a deeper awareness management.

其次，我們將利用客戶洞察不斷豐富我們的產品並開發產品線，以更好地多元化一二線城市的用戶。第三，如果問題的[攀登累積]具有重大關注和社區行銷以促進客戶獲取。這將增強我們的使用者體驗，並擴大我們在已經有更深層意識管理的一二線城市的業務範圍。

And fourth, we are going to working with [Pit Show], which are emerging white-collar workers and invest in promotion to pay with a higher recognition to deepen our brands and rates among customers in Tier 1 and Tier 2 cities. That's all. Thank you.

第四，我們將與新興白領[Pit Show]合作，投資促銷，以更高的認知度支付，以加深我們在一二線城市客戶中的品牌和價格。就這樣。謝謝。

We are now approaching the end of the conference call. Thank you for your participation in today's conference. You may now disconnect.

我們現在電話會議即將結束。感謝您參加今天的會議。您現在可以斷開連線。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。