Waterdrop Inc (WDH) 2024 Q1 法說會逐字稿

Good morning, everyone. This is [Tracy Li] from Waterdrop Investor Relations. It's my pleasure to welcome everyone to Waterdrop’s first-quarter 2024 earnings conference call. All participants are in listen-only mode in our English line. As a reminder, today's conference call is being recorded.

大家早安。我是水滴投資者關係部門的 [Tracy Li]。我很高興歡迎大家參加 Waterdrop 2024 年第一季財報電話會議。所有參與者在我們的英語線路中均處於僅聽模式。提醒一下，今天的電話會議正在錄音。

Please note that discussion today will consist forward-looking statements made under the Safe Harbor provision of 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 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 statement except as required by any 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，今天的討論將包括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我們目前的預期有重大差異。潛在風險和不確定性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. Yang Guang, Co-Founder, Director, Finance VP, and GM of International Business; Mr. Ran Wei, Director and GM of Insurance Business; Ms. Xu Xiaoying, Head of Finance; and Ms. Jasmine Li, Board Secretary.

今天加入我們電話會議的還有共同創辦人、董事、財務副總裁兼國際業務總經理楊光先生；冉偉先生，保險業務董事兼總經理；徐小英女士，財務總監；以及董事會秘書李茉莉女士。

We'll be happy to take some of the questions in the Mandarin line at the end of the conference call.

我們很樂意在電話會議結束時用普通話回答一些問題。

Hello, everyone. Thank you for joining us -- our first-quarter 2024 earnings conference call. Since the beginning of 2024, the domestic economy remains on track for recovery, leading to a steady growth in the personal insurance industry. For Waterdrop, the company continues to pursue high-quality development while improving our quality and efficiency. In terms of our financial performance, total revenue of Q1 reached RMB705 million, up 16.3% year over year. GAAP net profit attributes for the company reached RMB80.6 million, a significant increase of 62.2% year over year. Since Q1 of 2022, we have continuously recorded profitability for nine consecutive quarters.

大家好。感謝您參加我們的 2024 年第一季財報電話會議。自2024年以來，國內經濟持續復甦，人身保險業穩步成長。對於水滴來說，公司在不斷追求高品質發展的同時，不斷提升品質和效率。從財務表現來看，第一季總收入達到人民幣7.05億元，較去年同期成長16.3%。公司GAAP淨利達人民幣8,060萬元，較去年大幅成長62.2%。自2022年第一季以來，我們已連續九季錄得獲利。

In Q1, all our business segments maintain robust. For our insurance business, we actively optimize the product offerings for new service models and continue to support AIGC empowerment. Insurance premiums significantly increased sequentially, representing an operating margins of over 20%. For Waterdrop Medical Crowdfunding, we are actively participating in multi-level medical assistance systems to continue improving service quality. Spending loss was further reduced.

一季度，我們各業務板塊均保持強勁。保險業務積極優化新服務模式產品，持續支持AIGC賦能。保險保費較上季大幅成長，營業利益率超過20%。水滴醫療眾籌方面，我們積極參與多層次的醫療救助體系，持續提升服務品質。支出損失進一步減少。

For healthcare-related business, we continue to collaborate with domestic and international pharmaceuticals, expanding to digital marketing solution. During Q1 our revenue increased 7.3% YoY.

在醫療保健相關業務方面，我們持續與國內外製藥公司合作，拓展至數位行銷解決方案。第一季我們的營收年增 7.3%。

In the first quarter, we continued to invest in R&D. By now, we have obtained 4 LLM-related patents and submitted over 10 more patent applications. We are committed to improve efficiency in the entire insurance services.

一季度，我們持續加大研發投入。截至目前，我們已獲得4項LLM相關專利，並提交了10多項專利申請。我們致力於提高整個保險服務的效率。

For our CSR and ESG efforts, Waterdrop (inaudible) to sustainable development in ESG management, implementation, and as well as [disclosure]. In the latest rating published by IIGF, our rating increased to A- reflecting a great lift forwarding at ESG. As of the end of Q1, our charity platform has partnered with 112 public charity organization, lot more than 15,000 projects. (inaudible), one of multilevel medical assistance platform we joined, was awarded to 2023 project of the year in 8th China Charity Annual Conference.

對於我們的 CSR 和 ESG 努力，Waterdrop（聽不清楚）致力於 ESG 管理、實施以及永續發展[披露]。在 IIGF 發布的最新評級中，我們的評級升至 A-，反映出 ESG 的巨大提升。截至第一季末，我們的公益平台已與112家公益慈善組織合作，專案超過15,000個。我們加入的多層次醫療救助平台之一（聽不清楚）在第八屆中華慈善年會上榮獲2023年度計畫獎。

For the capital market, we recently paid our first special cash dividend since listing. We look forward to bring more value to our shareholders in the future.

資本市場方面，近期我們支付了上市以來的首次特別現金股利。我們期待未來為股東帶來更多價值。

Regarding share buyback, as of the end of May 2024, the company has cumulatively repurchased 45.5 million ADS in open market for a total consideration of about $95.9 million. The repurchased shares will continue to be used for ESOPs to motivate our talented team. This is a recap of our performance in Q1.

關於股票回購，截至2024年5月末，該公司已在公開市場累計回購4,550萬股ADS，總代價約9,590萬美元。回購股份將繼續用於員工持股計劃，以激勵我們的優秀團隊。這是我們第一季業績的回顧。

For the full year of 2024, Waterdrop financial guidance remains unchanged. First, profitable year with double-digit revenue growth; second, insurance operating margin above 8%; third, sustained growth in healthcare-related revenue. To achieve our goals, we will implement the following strategy. For insurance business, we will adhere to our user first principle, further optimize capital conversion, explore new service models and product innovation, invest in AIGC, driving business operations to improve efficiency for both ourselves and industry.

2024年全年，水滴財務指引維持不變。第一，獲利年，營收成長兩位數；二是保險營業利益率在8%以上；三是醫療健康相關收入持續成長。為了實現我們的目標，我們將實施以下策略。保險業務方面，我們將堅持用戶至上的原則，進一步優化資本轉化，探索新的服務模式和產品創新，投資AIGC，帶動業務運營，為自身和行業提高效率。

For medical crowdfunding, we will continue to take advantage of technology capability to ensure sustainable development while building social value and meeting user needs. For healthcare business, we will swiftly move to the penetration revolve, expanding the comprehensive service capability to more disease categories and actively exploring digital marketing to broaden business boundaries. With abundant cash reserves, we're taking suitable partnership and M&A targets around insurance and healthcare sectors.

對於醫療眾籌，我們將繼續發揮技術能力優勢，在創造社會價值、滿足用戶需求的同時確保永續發展。健康業務方面，我們將迅速轉向滲透旋轉，將綜合服務能力拓展至更多疾病品類，並積極探索數位行銷，拓寬業務邊界。憑藉充裕的現金儲備，我們正在圍繞保險和醫療保健行業尋找合適的合作夥伴和併購目標。

Looking ahead, the company will continue to strengthen its business value and its barriers that in by our mission and value, we'll continue to see more segmentation opportunities.

展望未來，公司將繼續加強其業務價值和壁壘，透過我們的使命和價值觀，我們將繼續看到更多的細分機會。

Now, I will pass to Ran Wei to discuss our insurance business in Q1.

現在，我將請冉偉討論我們第一季的保險業務。

Thanks, Yang. This quarter, our insurance business demonstrates steady growth. The total FYP risk at RMB1.75 billion, increased by 3.7% year over year. Insurance-related income was RMB610 million (sic - see press release, "RMB606.8 million"), up by 13.1% YoY. Operating profit for the insurance business reached RMB130 million (sic - see press release, "RMB129.163 million"). Our FYP for short-term insurance products was [RMB1.15 billion] in the first quarter, representing a sequential increase of 15.9%. Initially, new policy FYP grew by 41.6% sequentially.

謝謝，楊。本季度，我們的保險業務平穩成長。全年計畫風險總額17.5億元，年增3.7%。保險相關收入為人民幣 6.10 億元（原文如此 - 參見新聞稿，「人民幣 6.068 億元」），年增 13.1%。保險業務營業利潤達人民幣1.3億元（原文見新聞稿「12,916.3萬元」）。第一季短期保險產品預收資金11.5億元，季增15.9%。最初，新政策 FYP 環比增長 41.6%。

We have continually incurred online traffic conversion, and based on the user profile of each content distribution platform, we specifically optimized our product offering accordingly. Our policy renewal rate remains at a high level, consistently above 95%, which indicates strong user recognition. FYP for long-term insurance products amounted to RMB600 million in Q1, representing a QoQ growth of 13.4%. The contribution of FYP generated for long-term insurance products to overall FYP would further increase.

我們不斷產生線上流量轉化，並根據各個內容分發平台的用戶畫像，針對性地優化了我們的產品。我們的保單續保率始終維持在95%以上的較高水平，用戶認可度很高。第一季長期保險產品預收資金6億元，較上季成長13.4%。長期保險產品的年初收益對整體全年收益的貢獻將進一步增加。

The FYP of life insurance product to overall long-term products increased to 56.4%. We got a sequential increase in productivity per capita by 6.4%, the overall quality of long-term policy further improved, with the first-year retention rate increasing by 2 percentage points sequentially.

壽險產品佔長期產品全年佔比提升至56.4%。人均生產力季增6.4%，長期政策整體品質進一步提升，首年留任率較上季提高2個百分點。

We continue to develop our offline brokerage business. In Q1, we launched our new brand of offline brokers for (inaudible) aimed to provide more comprehending offline service and strengthening our brand awareness. On Shenlanbao, we got sequential increase in FYP, and Waterdrop Insurance Marketplace at Shenlanbao really enhanced synergies in sales resources, content marketing, and product partnerships. Our capability in catering various products to meet user needs continue to improve.

我們繼續發展線下經紀業務。在第一季度，我們推出了新品牌的離線經紀商（聽不清楚），旨在提供更全面的線下服務並加強我們的品牌知名度。深蘭寶全年保費較上月成長，深蘭寶水滴保險賣場確實增強了銷售資源、內容行銷、產品合作等的綜效。滿足使用者需求的各類產品能力不斷提升。

During this quarter, we launched (inaudible), a long-term medical insurance product that guarantees renewal for 20 years and aims to provide high-value coverage for [female], especially for female. Our (inaudible) disability income insurance for the elderly has exceeded RMB10 million in FYP for the first month they launched, reflecting a strong market demand.

本季度，我們推出了（聽不清楚）長期醫療保險產品，保證續保20年，旨在為[女性]，特別是女性提供高價值的保障。我們的（聽不清楚）老年人失能收入保險推出首月首月就突破1,000萬元人民幣，反映出強勁的市場需求。

Targeting the market segment, we have successfully upgraded one of our star products, Jiehaoyun, to version 2.0, which gained top recognition on various platform. For people with previous existing conditions, we upgraded our (inaudible) to over zero waiting period and extended the new real age up to 105 years old. The overall carrier insurance products achieved RMB100 million FYP during Q1, continuing to gain user trust.

針對細分市場，我們已成功將明星產品之一接好雲端升級至2.0版本，並在各平台獲得了一致好評。對於以前有條件的人，我們將（聽不清楚）升級至零等待期，並將新的實際年齡延長至 105 歲。整體承運險產品第一季實現年初營收1億元，持續贏得用戶信任。

Moving on to technology empowerment. In Q1, we continued to expand the application of our [ShuishouGPT]. The accuracy and efficiency of our large language model has been significantly improved. Our AI broker has reached [90%] of the average level of human broker in health insurance sector, capable of conducting independent dialogues with our clients for up to 40 minutes. Meanwhile, our AI copilot, which has been widely internally processed reached an accuracy rate of over [98% ] in the insurance model rate, significantly boosting the efficiency of sales, quality controls, and others.

邁向科技賦能。第一季度，我們繼續擴大我們的應用[水手GPT]。我們的大語言模型的準確性和效率得到了顯著提高。我們的人工智慧經紀人已經達到健康保險領域人類經紀人平均的[90%]，能夠與客戶進行長達40分鐘的獨立對話。同時，經過內部廣泛處理的AI副駕駛，保險模型準確率達到【98%】以上，大幅提升銷售、品管等效率。

We also actually explore external application to empower the industry, with several partnerships currently under negotiation. By now, we have obtained four LLM-related patents and submitted over 10 more patent applications.

我們實際上也在探索外部應用為產業賦能，目前正在洽談多個合作夥伴關係。截至目前，我們已獲得四項LLM相關專利，並提交了十多項專利申請。

Looking ahead, we will remain dedicated to positioning our results at the forefront.

展望未來，我們將繼續致力於將我們的成果置於最前沿。

This concludes my remarks for today, and we now pass through Jasmine for an overview of medical crowdfunding and healthcare business.

今天的演講就到此結束，以下我們透過Jasmine來了解醫療眾籌和醫療健康業務。

Thank you, Ran Wei. As of the end of Q1 2024, around 456 million people cumulatively donated RMB63.8 billion to over 3.17 million patients through our Waterdrop Medical Crowdfunding. We sustained a focus on transparency and keep strengthening our risk management mechanism. But in fact, before manual verification, we integrated algorithm recognition to identify false or fake medical documents and mitigate related risks effectively.

謝謝你，冉薇。截至2024年第一季末，約4.56億人透過水滴醫療眾籌累計向超過317萬名患者捐贈人民幣638億元。我們持續注重透明度，不斷強化風險管理機制。但事實上，在人工驗證之前，我們已經結合演算法識別來識別虛假或偽造的醫療文件，有效降低相關風險。

In addition, for patients with a high risk of passing away, with all of the donations are made in batches according to the stage of treatment, reducing the risk of fund misappropriation. That is -- that the higher authenticity we have, the greater the donor enthusiasm will be.

此外，對於死亡風險較高的患者，所有捐款均按照治療階段分批進行，降低了資金挪用的風險。也就是說，我們的真實性越高，捐贈者的熱情就越高。

In the meantime, we constantly enhance our user experience and constantly improve service quality. For urgent cases, we opened up an advanced payment application portal for patients. We have the risk control review. When patients need to withdraw the fund but 24 hours public notice period has an end, we will use our own funds as advanced payments. This ensures that the patients can promptly get the fund for their treatment.

同時，我們不斷增強使用者體驗，不斷提升服務品質。對於緊急情況，我們為患者開放了高級支付申請入口網站。我們有風險控制審查。當患者需要提取資金但24小時公告期結束時，我們將使用自有資金作為預付款。這確保了患者能夠及時獲得治療資金。

During Q1, we actively participate in multi-level medical assistance programs initiated by local governments in China. In February, on International Rare Disease Day, Waterdrop launched the special rare disease care program on top of our existing support initiatives. By the end of Q1, more than 67,000 patients with rare disease have -- was helped through our Waterdrop Medical Crowdfunding platform and received donation of more than RMB1.5 billion from 48.9 million donors.

第一季度，我們積極參與我國地方政府發起的多層次醫療救助計畫。在二月的國際罕見疾病日，Waterdrop 在我們現有的支援計劃的基礎上推出了特殊的罕見疾病護理計劃。截至第一季末，超過67,000名罕見疾病患者透過水滴醫療眾籌平台得到幫助，並收到4,890萬捐助者的捐款超過15億元人民幣。

We contribute through our platform, the Waterdrop Medical Crowdfunding, charitable bonds, and collaboration with pharmaceuticals. We provide a fast track for rare disease patients to respond as well as dedicated consultants and kind of (inaudible) support. Waterdrop charity works with charity fund to help these patients seek medical resources at local medical insurance policy updated and so on. Through that, we'll continuously update our care initiatives for patients, bringing more hope to those in need.

我們透過我們的平台、水滴醫療眾籌、慈善債券以及與製藥公司的合作做出貢獻。我們為罕見疾病患者提供快速反應通道以及專門的顧問和某種（聽不清楚）支援。水滴公益與慈善基金合作，幫助這些病患在當地健保政策更新等方面尋求醫療資源。透過這項舉措，我們將持續更新對病患的照護舉措，為有需要的人帶來更多希望。

In Q1, our healthcare-related business continued its momentum. We expanded our digital capabilities in clinical trial solutions and multichannel marketing solutions. For this quarter, healthcare-related income reached RMB25.3 million, representing an increase of 7.3% year over year. The number of cooperation pharmaceuticals and CROs reached 179. And the number of new programs reached 88, both figures remain high level, leveraging a broad patient base and strong (inaudible) ability .

第一季度，我們的醫療保健相關業務持續保持成長動能。我們擴展了臨床試驗解決方案和多通路行銷解決方案的數位化能力。本季醫療保健相關收入達人民幣2,530萬元，年增7.3%。合作醫藥及CRO數量達179家。新項目數量達到88個，兩個數字都保持在較高水平，憑藉廣泛的患者基礎和強大的（聽不清楚）能力。

E-Find Platform continued to enroll sustain, suitable candidates for our pharmaceutical clients. In Q1, E-Find Platform successfully enrolled over 800 patients. As of the date, about 7,800 patients were enrolled. Our performance has been recognized by our clients. For intent and drive this higher products for global top 5 MNC. We work at exclusive Chinese third-party patient recruitment partner and successfully enrolled over 60 patients within three months, which is 20% faster than the revenue time needed.

E-Find 平台繼續為我們的製藥客戶招募持續、合適的候選人。第一季度，E-Find 平台成功入組 800 多名患者。截至目前，已有約 7,800 名患者入組。我們的表現得到了客戶的認可。旨在為全球前 5 名跨國公司推動更高的產品。我們與中國獨家第三方患者招募合作夥伴合作，在三個月內成功招募了 60 多名患者，比所需的收入時間快了 20%。

As we -- fulfillment begins for donations in the industry, we continue to deepen our cooperation with living pharmaceuticals and CROs, both domestically and internationally. We have already cooperated with seven out of the global top 10 pharmaceuticals. The CRO business continued to a steady development as our reputation and influence strengthen. We won a new bid for a clinical trial projecting the field of cell therapy for listing pharmaceutical in Q1. In addition, two key clinical trial version of our platform completed initiation in the first quarter, including the smooth launching of new brand centers.

隨著我們開始履行產業捐贈，我們將繼續深化與國內外活體製藥和 CRO 的合作。我們已經與全球排名前十的製藥公司中的七家進行了合作。CRO業務持續穩健發展，聲譽和影響力不斷增強。我們贏得了一項新的臨床試驗投標，該臨床試驗預計將在第一季上市藥品的細胞治療領域。此外，我們平台的兩個關鍵臨床試驗版本在第一季完成啟動，包括新品牌中心的順利啟動。

Looking ahead, we'll continue to explore financial digitalization in the healthcare sector. The platform will continue to build and improve integrated solutions across the entire industry chain. In Q1, we further expanded the field of digital multichannel marketing, leveraging our experience in patient management for chronic disease. We saw an increasing number of clients. The cooperation with MNCs after -- depends. Meanwhile, we signed a strategic cooperation with the leading domestic pharmaceutical.

展望未來，我們將繼續探索醫療健康領域的金融數位化。平台將持續打造並完善全產業鏈綜合解決方案。第一季度，我們利用慢性病患者管理的經驗，進一步拓展了數位化多通路行銷領域。我們看到越來越多的客戶。之後與跨國公司的合作—取決於。同時與國內領先醫藥簽署策略合作。

We believe that Waterdrop will become the preferred partner in marketing for more and more pharmaceutical.

我們相信，水滴將成為越來越多醫藥企業行銷的首選合作夥伴。

This now concludes my speech. Now, I'll pass the call to Xu Xiaoying, the Head of Finance, to discuss company's financial performance.

我的演講到此結束。現在，我將電話轉給財務長徐小英，討論公司的財務表現。

Thank you Jasmine. Hello, everyone. I will now walk you through our financial highlights for Q1. Before I go into details, please be reminded that all numbers quoted here will be in RMB. And please refer to our earnings release for detailed information on our financial performance on both the year-on-year and quarter-over-quarter basis, respectively.

謝謝茉莉花。大家好。現在，我將向您介紹我們第一季的財務亮點。在詳細介紹之前，請注意，此處引用的所有數字均以人民幣為單位。請參閱我們的收益報告，分別了解我們同比和環比財務表現的詳細資訊。

We are thrilled to kick off 2024 with solid financial results. The company revenue in Q1 amounted to RMB705 million, representing a QoQ growth of 16.3%. The revenue structure is more diversified upwards, which the insurance-related income amounted to RMB607 million. The crowdfunding business contributed revenue of RMB67.4 million and the healthcare-related income of about RMB25.3 million, with all three business segments growing steadily.

我們很高興以穩健的財務表現開啟 2024 年。公司第一季營收7.05億元，季增16.3%。收入結構向上更加多元化，保險相關收入達人民幣6.07億元。眾籌業務貢獻收入人民幣6,740萬元，醫療相關收入約人民幣2,530萬元，三大業務部門均穩定成長。

At the same time, the company also continue to focus on operational efficiency, with overall operating costs and expenses of RMB658 million, up 10.5% year over year and 4.0% quarter over quarter. Among them, Q1 operating costs were approximately RMB331 million. Operating costs showed a year-over-year increase of 33.6% because of the consolidated (inaudible), representing a sequential increase by 9.6%, mainly due to an increase in the referral and service fees.

同時，公司也持續關注營運效率，整體營運成本及費用為人民幣6.58億元，較去年同期成長10.5%，較上季成長4.0%。其中，第一季營運成本約為人民幣3.31億元。由於合併（聽不清楚），營運成本年增 33.6%，季增 9.6%，主要是因為推薦費和服務費的增加。

In terms of expenses, S&M expenses amounted to RMB182 million, representing an increase of 5% and 4.2% on a YoY and QoQ basis, respectively, which maintain a healthy and steadily trend, and benefiting our firm -- our effective cost control. G&A expense amounts to RMB89 million, representing a decrease of 7.1% and 7.3% on a YoY and QoQ basis. R&D expenses amounted to RMB56 million. The decrease was primarily due to the impact of team restructuring.

費用方面，行銷管理費用為1.82億元，較去年同期分別成長5%、4.2%，維持健康穩定的發展態勢，有利公司成本控制的有效執行。一般及行政費用為人民幣0.89億元，較去年同期分別下降7.1%和7.3%。研發費用5600萬元。減少的主要原因是團隊重組的影響。

In Q1, our profitability improved significantly. Net profit attributable to the company's ordinary shares amounted to RMB80.6 million, 62.2% year over year and 36.5% quarter over quarter. Since Q1 of 2022, we've continuously recorded profitability for two consecutive years. We generated a net cash inflow from our operating activities of RMB179 million.

一季度，我們的獲利能力顯著改善。歸屬於公司普通股的淨利為人民幣8,060萬元，較去年同期成長62.2%，較上季成長36.5%。自2022年第一季以來，我們連續兩年獲利。經營活動產生的現金流量淨流入人民幣1.79億元。

Looking ahead, we will continue to create value for our users and shareholders with great profitability and growth.

展望未來，我們將繼續以龐大的獲利能力和成長能力為用戶和股東創造價值。

And ladies and gentlemen, with that, we will conclude today's conference call. We do thank you for joining. Have a good time.

女士們、先生們，我們今天的電話會議就到此結束。我們非常感謝您的加入。玩的很開心。

Statements in English on this transcript were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本筆錄中的英語陳述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。