Waterdrop, Inc. Q2 FY2024 earnings call

• Celebrated Waterdrop's 8th anniversary in May 2024, proactively transformed business over the years, especially in the past two years, and explored application of Shuishou LLM in the industry. - Insurance business in Q2: FYP RMB1.78 billion, operating profit margin over 21%; short-term insurance FYP up 8.2% Q-o-Q, new users up 15.8% Q-o-Q, average premiums up 7.7%; initiated quality service upgrade year in April. Long-term insurance FYP RMB530 million, restructured service teams, per-capita premium up 1.7%. - Medical Crowdfunding: Actively participated in multi-level medical security, offered bilingual services, improved operational efficiency and reduced segment loss. - Health care-related business: Collaborated with 185 pharmaceuticals and CROs, engineered services for 88 new programs; E-Find platform enrolled over 820 patients in Q2. - CSR: Won annual charity project and model at 2024 charity gala, Waterdrop Charity platform partnered with 112 public charity organizations and onboarded over 15,500 projects by end of June.

Waterdrop's overall revenue in Q2 reached RMB676 million. The insurance business had a quarterly FYP of RMB1.78 billion, with insurance-related income around RMB570 million and operating profit of about RMB120 million, operating profit margin maintaining over 21%. Short-term insurance FYP was RMB1.25 billion, up 8.2% Q-o-Q, with new policy premiums surging near 20% sequentially, new users up 15.8% Q-o-Q, and average premiums rising 7.7%. Long-term insurance FYP was RMB530 million. Medical Crowdfunding saw improved operational efficiency and reduced segment loss with bilingual services. Health care-related business had income of RMB26.4 million, up 4.2% Q-o-Q, collaborating with 185 pharmaceuticals and CROs and engineering services for 88 new programs.

• Targets double-digit revenue growth while maintaining robust profitability. - Recently approved a new share repurchase program, planning to repurchase up to $50 million within next 12 months for ESOP. - Announced second special cash dividend on first half 2024 operating results, total about $7.5 million with $0.02 per ordinary share and $0.02 per ADS for shareholders as of October 11, 2024 U.S. closing date. - Plans to distribute dividends at least once a year if business remains healthy and profitable.

• Industry is adapting to new policies, which may cause some challenges in the short-term.

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