Core Viewpoint - Waterdrop Inc. (WDH.US) has demonstrated strong financial performance with double-digit year-on-year growth in both revenue and net profit for Q2 2025, leading to a target price of $2.6 and a "Buy" rating from Guoyuan International [1] Financial Performance - In Q2 2025, Waterdrop achieved net revenue of 838 million yuan and a net profit attributable to shareholders of 140 million yuan, marking 14 consecutive quarters of profitability [1] - Operating expenses, including sales, management, and R&D costs, accounted for 38.7% of revenue, a decrease of 6.4 percentage points year-on-year [1] - Insurance-related revenue reached 739 million yuan, reflecting a year-on-year increase of 28.7%, with first-year premium scale hitting 3.204 billion yuan, up 80.2% [1] - Short-term and long-term insurance businesses grew by 95% and 45.4%, respectively, while revenue from digital clinical trial services rebounded with a 34.2% year-on-year growth [1] Strategic Initiatives - Waterdrop is implementing an "All in AI" strategy to build technological barriers and convert traffic into commercial value, significantly enhancing operational efficiency [2] - The company has developed an AI-driven growth engine, with its proprietary "Waterdrop Water Guardian" AI insurance expert contributing to a 155% quarter-on-quarter increase in premium contributions [2] - In underwriting, the introduction of the AI underwriting expert "KEYI.AI" has improved processing times and achieved a 99.8% accuracy rate [2] - Customer service has been enhanced through the AI customer service agent "Bao Xiaohui," achieving over 95.5% resolution rate for service scenarios [2] Business Structure and Market Expansion - Waterdrop has established three main business segments: fundraising, insurance, and digital clinical trial solutions, leveraging technology to improve efficiency in the insurance sector [3] - The company is in the early stages of exploring overseas markets, having initiated insurance operations in Hong Kong and developed a comprehensive insurance brokerage service system over the past two years [3] - Future plans include further international business development and addressing user pain points in overseas insurance markets through technological empowerment [3]