Waterdrop(US:WDH)2021-11-30 16:38Financial Data and Key Metrics Changes - In Q3 2021, the first year premium (FYP) reached RMB4,639 million, achieving stable and positive growth despite industry transformation [41] - Net operating revenue decreased by 9.7% year-over-year to RMB779 million, attributed to a softening trend in FYP and a decrease in take rate [42] - Operating costs and expenses increased by 31.5% year-over-year to RMB1,292 million, but decreased by 26.4% quarter-over-quarter, indicating effective cost control measures [42][43] Business Line Data and Key Metrics Changes - The FYPs for the first three quarters increased by 37.5% year-over-year to RMB14.46 billion, exceeding the total FYPs for the entire previous year [12] - Despite a negative growth in the industry during Q3, the company's FYPs remained flat, showing resilience [12] - The monthly take rate of short-term insurance products increased by 5% from July to September, driven by improved retention rates [16] Market Data and Key Metrics Changes - The gross written premium of the health insurance sector increased by only 5% year-over-year in the first three quarters, with a decline of 3% in Q3 [11] - Major listed insurance companies experienced an average net profit decline of about 36% year-over-year during Q3 [11] Company Strategy and Development Direction - The company is focused on transforming its online user acquisition model to comply with new regulatory guidance and industry trends [15] - Waterdrop aims to enhance its fundamental operations and believes in the long-term positive trend in the Chinese healthcare market [7][9] - The company is committed to strengthening cost control and optimizing profitability for sustainable development [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased volatility in capital markets and a softening growth in the insurance industry since the beginning of Q3 [5] - The company is proactively responding to new regulatory guidelines and has pivoted its business model to ensure compliance [8] - Management expressed confidence in the long-term prospects of the company and the healthcare market, despite short-term challenges [7][9] Other Important Information - The company has initiated a one-year share repurchase plan, repurchasing nearly 500,000 ADS since its announcement [6] - The management team has committed to not selling shares for at least 18 months post-IPO lockup, demonstrating confidence in the company's future [7] Q&A Session Summary Question: Inquiry about cost reduction in Q3 and its relation to seasonality or strategy changes - Management indicated that the reduction in costs was primarily due to a strategic change in cost control and also influenced by seasonality, with significant decreases in marketing expenses and total operating costs compared to Q2 [47][48] Question: Inquiry about the advantages of the commission system compared to traditional insurance companies - Management explained that the new offline brokerage model reduces layers in the sales structure, enhancing recruitment competitiveness and operational efficiency through AI-driven systems [51][52]