Zhibao Technology Announces the Establishment of a Joint Venture Company with China Disaster Prevention Association to Pioneer "Insurance + Tech + Service" Model for Risk MitigationAugust 12, 2025 9:19 AM EDT | Source: Zhibao Technology Inc.Shanghai, China--(Newsfile Corp. - August 12, 2025) - Zhibao Technology Inc. (NASDAQ: ZBAO) ("Zhibao," "we," or the "Company"), a leading and high growth InsurTech company primarily engaging in providing digital insurance brokerage services through its oper ...

Core Insights - ZBAO Technology's stock increased by 2.94% on August 8, reaching $1.05 per share with a total market capitalization of $34.57 million [1] - The company reported total revenue of 146 million RMB for the year ending December 31, 2024, representing a year-on-year growth of 73.73% [1] - The net profit attributable to the parent company was -644,600 RMB, showing an increase of 82.26% year-on-year [1] Company Overview - ZBAO Technology is a leading insurtech company registered in the Cayman Islands, primarily operating through its domestic subsidiary [1] - The company redefines insurance brokerage services through a "technology + insurance brokerage" model, positioning itself as a pioneer in the digital transformation of the insurance brokerage industry [1] - ZBAO Technology provides customized digital insurance solutions to B-end channels, which include a wide range of industries and organizations such as internet platforms, large and medium-sized enterprises, and government agencies [1]

Group 1 - The core viewpoint of the article highlights the significant growth of ZBAO Technology, with a stock price increase of 3.48% and a market capitalization of approximately $29.64 million [1] - As of December 31, 2024, ZBAO Technology reported total revenue of 146 million RMB, representing a year-on-year growth of 73.73% [1] - The company's net profit attributable to shareholders was -644,600 RMB, showing a year-on-year increase of 82.26% [1] Group 2 - ZBAO Technology is registered in the Cayman Islands and operates primarily through its domestic subsidiary, ZBAO Technology Co., Ltd [1] - The company is recognized as a leading insurance technology firm in China, redefining insurance brokerage services through a "technology + insurance brokerage" model [1] - ZBAO Technology provides customized digital insurance solutions for B-end channels, which include a wide range of industries and organizations, integrating these solutions into existing business matrices to serve C-end customers [1]

Core Insights - ZBAO Technology (致保科技) opened with a 9.2% increase, reaching $0.95 per share, with a total market capitalization of $31.2757 million as of 21:30 [1] - For the fiscal year ending December 31, 2024, ZBAO Technology reported total revenue of 146 million RMB, reflecting a year-on-year growth of 73.73%, while the net profit attributable to the parent company was -644,600 RMB, showing an increase of 82.26% year-on-year [1] Company Overview - ZBAO Technology is a Cayman Islands-registered holding company primarily operating through its domestic subsidiary, ZBAO Technology Co., Ltd. [1] - The company is recognized as a leading insurance technology firm in China, redefining insurance brokerage services through a "technology + insurance brokerage" model [1] - ZBAO Technology provides customized digital insurance solutions to B-end channels, which include a wide range of industries and organizations such as internet platforms, large and medium-sized enterprises, and government agencies [1]

Core Viewpoint - Zhibao Technology Inc. has announced the acquisition of a controlling interest in Zhonglian Jinan Insurance Brokers Co., Ltd., which will significantly expand its branch network and enhance its insurance brokerage capabilities across China [2][5]. Group 1: Acquisition Details - Zhibao China will acquire 51% of Zhonglian Jinan for a total purchase price of RMB25.5 million (approximately $3.5 million), based on a valuation of RMB50 million for 100% equity [2][3]. - The payment will be made in four installments, with the first three installments of RMB7.65 million (approximately $1.05 million) due on July 31, 2025, July 31, 2025, and January 31, 2026, respectively [3]. - The fourth installment of RMB2.55 million (approximately $0.35 million) is contingent on Zhonglian Jinan generating revenue of at least RMB140 million (approximately $19.18 million) within one year following the first installment payment [3]. Group 2: Strategic Benefits - The acquisition is expected to more than double Zhibao's branch offices, enhancing its geographic reach and market presence [5]. - Zhibao gains immediate access to Zhonglian Jinan's existing brokerage licenses, which typically require lengthy regulatory approval to obtain [6]. - The integration of Zhonglian Jinan's product portfolio will complement Zhibao's offerings in various insurance sectors, including liability, accident, health, and commercial property [7]. Group 3: Company Background - Zhibao Technology Inc. is a leading InsurTech company focused on digital insurance brokerage services in China, having launched the first digital insurance brokerage platform in 2020 [9]. - Zhonglian Jinan, founded in June 2015, operates 28 province-level and 30 city-level branches, primarily focusing on non-auto insurance lines [11].

Core Insights - Zhibao Technology's subsidiary, Sunshine Insurance Brokers, has entered a strategic partnership with F+More to tap into China's low-altitude economy insurance market, projected to reach RMB 3.5 trillion by 2035 [2][6][10] - The partnership aims to leverage Sunshine's digital insurance brokerage capabilities and F+More's expertise in the low-altitude economy to create customized insurance products for the drone sector [4][10] Company Overview - Zhibao Technology Inc. is a leading InsurTech company in China, focusing on digital insurance brokerage services and has pioneered a B2B2C digital embedded insurance model [11] - Sunshine Insurance Brokers has launched digital insurance brokerage services for F+More's clients, aiming to cover all provinces in China [3][4] Market Opportunity - The low-altitude economy, which includes commercial drones and urban air mobility, is expected to grow significantly, with the low-altitude insurance market projected to reach RMB 8-10 billion by 2035 [6][7] - The low-altitude airspace economy in China exceeded RMB 500 billion in 2023, indicating substantial growth potential for specialized insurance providers [6] Strategic Collaboration - The partnership integrates real-time flight data with risk assessment mechanisms, enabling rapid policy customization and automated claims processing [4][5] - Both companies aim to establish competitive advantages in the low-altitude insurance landscape through joint development of insurance products [4][5] Industry Developments - Recent advancements, such as the successful public road test flight of a flying car, signal a shift towards commercialization in the low-altitude economy [8] - China is positioned to benefit from these trends due to its strategic advantages in drone technology and logistics [8][9]

[Financial Statements](index=1&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Balance Sheets](index=1&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Zhibao Technology's balance sheet expanded significantly by December 31, 2024, with substantial growth in total assets and liabilities, and rising shareholders' equity Condensed Consolidated Balance Sheet Summary (as of Dec 31, 2024 vs. June 30, 2024) | Balance Sheet Item | June 30, 2024 (RMB) | December 31, 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | 197,551,743 | 297,530,672 | ▲ 50.6% | | **Total Assets** | 208,787,640 | 314,978,389 | ▲ 50.9% | | **Total Current Liabilities** | 141,068,960 | 235,018,593 | ▲ 66.6% | | **Total Liabilities** | 144,796,846 | 242,206,924 | ▲ 67.3% | | **Total Shareholders' Equity** | 63,990,794 | 72,771,465 | ▲ 13.7% | - Significant increases in liabilities were driven by a rise in Insurance premium payable from **RMB 38.4 million** to **RMB 111.4 million** and the appearance of new liabilities including Convertible notes (**RMB 6.5 million**) and Warrant liabilities (**RMB 1.2 million**)[1](index=1&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Strong revenue growth and an operating profit turnaround significantly reduced the company's net loss for the six months ended December 31, 2024 Statement of Operations Summary (For the Six Months Ended Dec 31) | Metric | 2023 (RMB) | 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenues** | 84,254,221 | 146,371,285 | ▲ 73.7% | | **Gross Profit** | 30,062,171 | 42,559,597 | ▲ 41.6% | | **(Loss) income from operations** | (8,378,957) | 3,804,338 | Turnaround to Profit | | **Net Loss** | (8,546,000) | (644,605) | ▼ 92.5% | | **Basic and Diluted EPS** | (0.28) | (0.02) | ▲ 92.9% | - The company recorded a gain on fair value change of warrant liabilities (**RMB 1.43 million**) and derivative liabilities (**RMB 0.72 million**), but also a significant loss on the settlement of convertible notes (**RMB 4.44 million**)[4](index=4&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased for the six months ended December 31, 2024, primarily due to convertible note settlements - The settlement of convertible notes resulted in the issuance of **524,314 Class A ordinary shares** and an increase of **RMB 9.79 million** in equity (Additional Paid-in Capital)[6](index=6&type=chunk) Shareholders' Equity Movement (For the Six Months Ended Dec 31, 2024) | Item | Amount (RMB) | | :--- | :--- | | **Balance as of June 30, 2024** | 63,990,794 | | Settlement of convertible notes | 9,789,421 | | Net loss | (644,605) | | Foreign exchange adjustments | (364,145) | | **Balance as of December 31, 2024** | 72,771,465 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, while financing activities provided significant cash, leading to an overall cash increase for the period Cash Flow Summary (For the Six Months Ended Dec 31) | Cash Flow Activity | 2023 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 85,607,856 | 74,197,711 | | **Net cash used in investing activities** | (264,606) | (4,375,000) | | **Net cash provided by financing activities** | 9,275,004 | 23,026,767 | | **Net increase in cash** | 94,616,741 | 92,768,978 | - Financing activities in 2024 included proceeds from convertible notes (**RMB 16.0 million**) and short-term bank borrowings (**RMB 32.0 million**), offset by repayments of borrowings (**RMB 25.0 million**)[10](index=10&type=chunk) - Non-cash financing activities included the settlement of convertible notes by issuing ordinary shares valued at **RMB 9.8 million**[12](index=12&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1: Nature of the Organization and Business](index=7&type=section&id=1%20%E2%80%94%20NATURE%20OF%20THE%20ORGANIZATION%20AND%20BUSINESS) Zhibao Technology, a digital insurance brokerage, completed its Nasdaq IPO, with the CEO retaining significant voting control - The company is primarily engaged in providing digital insurance brokerage services to end customers through its PRC subsidiaries[14](index=14&type=chunk) - Completed its IPO on April 3, 2024, issuing **1,500,000 Class A ordinary shares** at **$4.00 per share** for gross proceeds of **$6.0 million**[15](index=15&type=chunk) - A reorganization in 2023 established Zhibao Technology Inc. as the parent holding company of the Zhibao China Group[17](index=17&type=chunk)[18](index=18&type=chunk) - Shares were reclassified into **Class A (1 vote)** and **Class B (20 votes)**, with all Class B shares controlled by founder and CEO Mr. Botao Ma, granting him significant voting control[20](index=20&type=chunk)[21](index=21&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=9&type=section&id=2%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) The company adopted new credit loss standards, classifies certain warrants as liabilities, and faces significant concentration risk - The company adopted the new credit loss standard (ASU 2016-13 / Topic 326) on July 1, 2023, resulting in an increase of **RMB 8.8 million** in the allowance for credit losses for accounts receivable[34](index=34&type=chunk) - Warrants that do not meet all criteria for equity classification are recorded as liabilities at fair value, with changes in fair value recognized in the statements of operations[55](index=55&type=chunk) Revenue Disaggregation (For the Six Months Ended Dec 31) | Revenue Stream | 2023 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Insurance brokerage service fees | 75,354,494 | 144,964,797 | | MGU service fees | 9,217,678 | 1,766,514 | | **Total Revenues (net of taxes)** | **84,254,221** | **146,371,285** | Customer and Vendor Concentration | Concentration Type | Period | Details | | :--- | :--- | :--- | | **Revenue** | 6 months ended Dec 31, 2024 | Four customers accounted for 20%, 14%, 12%, and 10% of total revenue | | **Accounts Receivable** | As of Dec 31, 2024 | Two customers accounted for 20% and 18% of accounts receivable | | **Accounts Payable** | As of Dec 31, 2024 | Two vendors accounted for 20% and 15% of accounts payable | [Note 3: Accounts Receivable](index=18&type=section&id=3%20%E2%80%94%20ACCOUNTS%20RECEIVABLE) Net accounts receivable increased as of December 31, 2024, with a corresponding allowance for credit losses Accounts Receivable, Net | Item | June 30, 2024 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Accounts receivable | 144,670,083 | 149,920,975 | | Less: Allowance for credit losses | (14,315,654) | (14,607,614) | | **Net Accounts Receivable** | **130,354,429** | **135,313,361** | [Note 9: Convertible Note](index=23&type=section&id=9%20%E2%80%94%20CONVERTIBLE%20NOTE) The company secured convertible note financing, classifying notes as liabilities, and settled a portion by issuing shares - The company entered into a financing agreement for up to **$8.0 million** via convertible notes and received **$2.25 million** in net proceeds during the six months ended Dec 31, 2024[86](index=86&type=chunk)[90](index=90&type=chunk) - The convertible notes are classified as liabilities, and the embedded conversion feature is treated as a derivative liability, measured at fair value with changes recognized in earnings[101](index=101&type=chunk)[105](index=105&type=chunk) - The company settled notes with a principal of **$1.15 million** by issuing **524,314 Class A ordinary shares**, recognizing a loss on settlement of **RMB 4.44 million**[100](index=100&type=chunk)[104](index=104&type=chunk) - As of December 31, 2024, the carrying amount of the convertible notes was **RMB 6.45 million**[105](index=105&type=chunk) [Note 10: Warrant Liabilities](index=25&type=section&id=10%20%E2%80%94%20WARRANT%20LIABILITIES) Warrants issued with convertible notes are classified as liabilities and remeasured at fair value, with a prior accounting error corrected - Purchase Warrants issued with the convertible notes are classified as a liability and remeasured to fair value each period[112](index=112&type=chunk) - A gain on fair value change of warrant liabilities of **$196,000 (RMB 1.43 million)** was recognized for the six months ended December 31, 2024[113](index=113&type=chunk)[117](index=117&type=chunk) - The company corrected a prior accounting error, reclassifying the warrants from equity to liability, which increased total liabilities by **RMB 0.8 million** and decreased net loss by **RMB 0.87 million** for the period[114](index=114&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) [Note 11: Equity](index=29&type=section&id=11%20%E2%80%94%20EQUITY) The company has Class A and B ordinary shares outstanding, classified certain warrants as equity, and faces PRC dividend restrictions - As of Dec 31, 2024, there were **15,231,387 Class A** and **16,816,692 Class B** ordinary shares outstanding[120](index=120&type=chunk) - Warrants issued to the IPO underwriter, EF Hutton LLC, were classified as equity instruments[121](index=121&type=chunk)[123](index=123&type=chunk) - The company's PRC subsidiaries have restricted net assets of **RMB 106.1 million** as of Dec 31, 2024, which are not distributable as cash dividends[126](index=126&type=chunk)[127](index=127&type=chunk) [Note 12: Income Tax](index=30&type=section&id=12%20%E2%80%94%20INCOME%20TAX) PRC subsidiaries face a **25% EIT rate**, with income tax expense recorded and a valuation allowance against deferred tax assets Income Tax Expense (Benefit) | Period | Amount (RMB) | | :--- | :--- | | Six Months Ended Dec 31, 2023 | 137,354 (Benefit) | | Six Months Ended Dec 31, 2024 | (1,091,247) (Expense) | - As of December 31, 2024, the company had net operating losses of **RMB 37.9 million** available to offset future taxable income, which will expire between 2025 and 2029[135](index=135&type=chunk) - A valuation allowance of **RMB 9.3 million** was recorded against deferred tax assets as of December 31, 2024, due to uncertainty about their future realization[137](index=137&type=chunk) [Note 14: Commitments and Contingencies](index=35&type=section&id=14%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) The company is involved in several legal proceedings, including a settled lawsuit and two pending disputes - A lawsuit with Shanghai Chenxi Technology Group was settled, with Sunshine Insurance Brokers agreeing to pay a total of **RMB 13.26 million** in promotion service fees[145](index=145&type=chunk) - A pending lawsuit with Guangdong Zhongkang involves a dispute over joint brokerage fees of approximately **RMB 1.4 million**, with a counterclaim filed by the company for **RMB 4.5 million**[146](index=146&type=chunk) - A pending lawsuit filed by Beijing Tiantan Puhua hospital involves a claim for medical expenses of approximately **RMB 1.4 million**, for which Zhibao China is requested to bear joint liability[147](index=147&type=chunk) [Note 15: Related Party Transactions](index=36&type=section&id=15%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) Significant balances exist with related parties controlled by the CEO, including advances for services and payments on the company's behalf Balances with Related Parties (as of Dec 31, 2024) | Related Party | Balance Type | Amount (RMB) | Description | | :--- | :--- | :--- | :--- | | Shanghai GBG | Due From | 17,131,396 | Advances for future MGU services | | Shanghai Xinhui | Due To | 8,561,749 | Payments on behalf of the company and a RMB 2.5M interest-free loan | [Note 16: Subsequent Events](index=37&type=section&id=16%20%E2%80%94%20SUBSEQUENT%20EVENTS) Subsequent events include additional convertible note issuances, termination of a share purchase facility, and further note settlements - In February 2025, the company received an additional **$630,000** (net) from the issuance of a second tranche of convertible notes[156](index=156&type=chunk)[158](index=158&type=chunk) - On March 11, 2025, the company terminated a **$50 million** share subscription facility agreement with GEM Global Yield LLC SCS[161](index=161&type=chunk)[162](index=162&type=chunk) - From January to April 2025, the company settled an additional portion of its convertible notes by issuing **605,392 Class A ordinary shares**[163](index=163&type=chunk)

Core Viewpoint - Zhibao Technology Inc. has revised its financial results for the six months ended December 31, 2024, showing a decreased net loss compared to previous reports, indicating improved financial performance [1][2]. Financial Adjustments - The company made adjustments to its income statement, resulting in a net loss of RMB0.6 million ($0.09 million) for the six months ended December 31, 2024, down from a previously reported net loss of RMB1.5 million ($0.2 million) [2]. - The adjusted basic and diluted GAAP loss per share was RMB0.02 ($0.00), compared to the previously reported RMB0.05 ($0.01) [2]. Balance Sheet Revisions - The revised unaudited condensed consolidated balance sheet showed a decrease in convertible notes from RMB6,888,414 to RMB6,452,341 and an addition of warrant liabilities amounting to RMB1,239,814 [4]. - Total current liabilities increased to RMB235,018,593, and total liabilities rose to RMB242,206,924 after adjustments [4]. Income Statement Changes - Net interest expense increased from RMB1.4 million ($0.2 million) to RMB1.6 million ($0.2 million) [6]. - A gain from the fair value change of warrant liabilities was added, amounting to RMB1.4 million ($0.2 million) [6]. - The loss on settlement of convertible notes increased from RMB4.1 million ($0.5 million) to RMB4.4 million ($0.6 million) [6]. Comprehensive Loss - The comprehensive loss for the six months ended December 31, 2024, was adjusted to RMB1,008,750, down from RMB1,906,027 [8]. - The company projects a 70% revenue growth and improvements in gross profit, profit from operations, and net income for the fiscal year ending June 30, 2025, compared to the same period last year [8]. Company Overview - Zhibao Technology Inc. is a leading InsurTech company in China, primarily providing digital insurance brokerage services [10]. - The company has developed over 40 innovative digital insurance solutions and partnered with over 2,000 business channels, serving more than 20 million end customers [11].

Core Insights - The core viewpoint of the article highlights the significant growth of ZBAO Technology, with a 73.7% year-on-year increase in revenue, driven by the expansion of its 2B2C business model and overseas market exploration [1][2]. Financial Performance - ZBAO Technology reported a revenue of 146.4 million RMB for the first half of the fiscal year ending December 31, 2024, marking a 73.7% increase compared to the previous year [1]. - The company's brokerage business revenue increased by 69.6 million RMB, while a decrease of 7.5 million RMB in managed general underwriting (MGU) services partially offset this growth [2]. - Marketing expenses decreased from 21 million RMB in the previous year to 18.6 million RMB, attributed to the company's established reputation reducing the need for advertising [2]. Market Opportunities - The 2B2C model is expected to grow due to the identification of insurance needs in niche markets and the expansion of product types [1][3]. - ZBAO Technology has developed over 40 digital insurance solutions applicable to various sectors, including tourism, sports, logistics, utilities, and e-commerce [2]. - The company aims to expand its partnerships with B-end channels and explore new sectors such as the new energy vehicle market [3]. International Expansion - ZBAO Technology is actively pursuing international business, with plans to expand into Southeast Asia, where the digital capabilities are relatively weak, presenting significant market opportunities [5][6]. - The company has established a reinsurance subsidiary in Malaysia to create synergies with its brokerage business [5]. - ZBAO Technology has signed a cooperation agreement with an insurance company in Singapore and is considering further expansion into the U.S. market [6]. Regulatory and Competitive Landscape - The "reporting and implementation consistency" policy has impacted many brokerage firms, prompting ZBAO Technology to diversify its revenue sources beyond commission fees [4]. - The company acknowledges the challenges of international expansion, including regulatory compliance risks and competition with local institutions [5][6]. - ZBAO Technology emphasizes its risk management capabilities and selective risk assumption to maintain control over its operations [6].

Core Insights - The insurance industry is undergoing a value transformation driven by internet technology, with scenario-based insurance products showing market potential [2] - The demand for scenario-based insurance is expected to continue driving high growth in the insurance sector [2] Financial Performance - In the first half of fiscal year 2025, the company reported a revenue increase of 74% to 146 million yuan, with C-end users surpassing 20 million, a 100% year-on-year growth [2] - The company's gross profit reached 42.56 million yuan, with a gross margin of 29%, and net profit increased by 7.03 million yuan during the reporting period [5] Market Trends - Scenario-based insurance products are gaining traction, with a 21 percentage point increase in penetration over the past three years, yet there remains an unmet demand of 58 billion yuan [3] - The scenario-based insurance market in China is projected to reach 68 billion yuan by 2025, with contributions from freight insurance, travel insurance, and pet insurance exceeding 60% [4] Technological Advancements - The company has developed a digital platform with 237 standardized solutions, enabling new product launches within 72 hours [4] - Artificial intelligence tools are being utilized to enhance operational efficiency and service quality, with significant improvements in underwriting speed and claims processing [5] Global Expansion - The company has obtained reinsurance licenses in Malaysia and plans to expand its business model, with collaborations in Singapore and potential entry into the U.S. market [6] - The Southeast Asian digital insurance market is expected to reach 19 billion USD by 2025, with local companies investing significantly less in technology compared to their Chinese counterparts [6]