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EQS Newswire / 15/08/2023 / 21:54 EST/EDT Huize Reports Second Quarter 2023 Unaudited Financial Results and Revises Upward Full Year Non-GAAP Net Profit Guidance
SHENZHEN, China, August 15, 2023 (GLOBE NEWSWIRE) – Huize Holding Limited, (“Huize”, the “Company” or “we”) (NASDAQ: HUIZ), a leading digital insurance product and service platform for new generation consumers in China, today announced its unaudited financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 Financial and Operational Highlights ● Ongoing robust growth in premiums: Gross Written Premiums (“GWP”) facilitated on our platform increased by 58.0% year-over-year to RMB1,377.7 million. First-year premiums (“FYP”) facilitated increased by 85.2% year-over-year to RMB897.9 million. Growth in GWP and FYP was primarily driven by our high-quality customer base, high persistency rates, and the market-leading products we have co-developed with insurer partners for long-term life and health insurance. ● Further improvement in cost-efficiency and sustainable profitability: Operating expense-to-revenue ratio improved substantially, decreasing by 16.2 percentage points year-over-year to 31.6%. Net profit in the second quarter of 2023 was RMB14.1 million (US$1.9 million). Non-GAAP net profit was RMB19.0 million, representing our third consecutive quarter of profitability.
● Cumulative number of insurance clients served increased to approximately 8.9 million as of June 30, 2023. We cooperate with 110 insurer partners, including 68 life & health insurance companies and 42 property & casualty insurance companies, as of June 30, 2023. ● As of June 30, 2023, cash and cash equivalents were RMB247.6 million (US$34.1 million).
Mr. Cunjun Ma, Founder and CEO of Huize, commented, “We are pleased to report another solid quarter with GWP, FYP, and total revenue all growing in the double-digits year-over-year. This quarter also marks the third consecutive quarter of profitability, with net profit of RMB14.1 million and non-GAAP net profit of RMB19.0 million. Our robust business performance reflects our continued success in attracting high-quality customers in higher-tier cities, market-leading position in long-term insurance products, and the empowerment of our independent insurance agents by our open platform. With the gradual recovery of the macro economy, we are revising non-GAAP net profit guidance for the full year 2023 upwards to RMB60 million from RMB50 million.” “During the period, we continued to optimize our product offerings by working with leading insurance companies to develop more customized and cost-effective products for our customers. In August, we further extended the partnership with China Pacific Insurance with our inaugural customized product launch in the Hong Kong market – the launch of ‘Jin Man Yi Zu Multi-Currency’ to facilitate ‘underwriting in Hong Kong and retirement in the Mainland’ for Hong Kong customers, representing a milestone in the development of cross-boundary insurance services in the Greater Bay Area.” “In the second quarter of 2023, we continued to deepen the O2O integration of our insurance service ecosystem, which continued to yield encouraging results. Within the ‘To-A’ segment, we kept exploring new technology and we have empowered independent agents with sophisticated intelligent tools. FYP facilitated by the ‘To-A’ business during the quarter more than doubled sequentially to RMB156.4 million. In the ‘To-C’ segment, we remained committed to our “customer-centric” approach and continued to fine-tune our operations to better recognize client needs and risks, and provide targeted product and service matching for various customer segments. This contributed to a 43.2% year-over-year increase in the average FYP ticket size during the quarter for long-term savings products, amounting to approximately RMB63,000. Moving forward, we will continue to strengthen the integration of our O2O ecosystem to further enhance the customer experience. Our goal is to reinforce our position as a leading digital insurance product and service platform leveraging our deep industry expertise and cutting-edge technology to drive high-quality growth and create long-term sustainable shareholder value.”
Second Quarter 2023 Financial Results
GWP and operating revenue
GWP facilitated on our platform was RMB1,377.7 million (US$190.0 million) in the second quarter of 2023, an increase of 58.0% from RMB871.8 million in the same period of 2022. Within GWP, FYP accounted for RMB897.9 million (or 65.2% of total GWP), an increase of 85.2% year-over-year. Renewal premiums accounted for RMB479.8 million (or 34.8% of total GWP), an increase of 24.0% year-over-year.
Operating revenue was RMB368.2 million (US$50.8 million) in the second quarter of 2023, an increase of 48.3% from RMB248.2 million in the same period of 2022. The increase was primarily driven by the increase in FYP facilitated on our platform.
Operating costs
Operating costs were RMB243.6 million (US$33.6 million) in the second quarter of 2023, representing an increase of 40.2% from RMB173.7 million in the same period of 2022. Operating costs grew at a slower pace than operating revenue, primarily due to a reduction in personnel costs.
Operating expenses
Selling expenses were RMB57.3 million (US$7.9 million) in the second quarter of 2023, a decrease of 3.7% from RMB59.5 million in the same period of 2022, primarily due to a decrease in salaries and employment benefits.
General and administrative expenses were RMB37.1 million (US$5.1 million) in the second quarter of 2023, an increase of 6.8% from RMB34.7 million in the same period of 2022, mainly due to an increase in salaries and employment benefits and share-based compensation expenses, partly offset by a reduction in rental and utilities expenses.
Research and development expenses were RMB22.0 million (US$3.0 million) in the second quarter of 2023, a decrease of 9.5% from RMB24.3 million in the same period of 2022, primarily due to a decrease in technology service fee.
Net profit and Non-GAAP net profit for the period
Net profit in the second quarter of 2023 was RMB14.1 million (US$1.9 million), compared with a net loss of RMB39.4 million in the same period of 2022.
Non-GAAP net profit was RMB19.0 million (US$2.6 million) in the second quarter of 2023, compared with a non-GAAP net loss of RMB37.5 million in the same period of 2022.
Cash and cash equivalents
As of June 30, 2023, the combined balance of the Company’s cash and cash equivalents amounted to RMB247.6 million (US$34.1 million), compared to RMB277.2 million as of December 31, 2022.
Share Repurchase Program
Year to date as of June 30, 2023, the Company had purchased an aggregate of 1,032,242 ADSs for a total amount of approximately US$1.3 million under its share repurchase program.
Business Outlook
Based on the Company’s preliminary assessment of current market conditions and the better-than-expected results in the first half of 2023, Huize is revising its outlook for non-GAAP net profit attributable to shareholders upwards from RMB50 million to not less than RMB60 million in 2023. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change as a result of various market uncertainties.
About Huize Holding Limited
Huize Holding Limited is a leading digital insurance product and service platform for new generation consumers in China. Targeting the younger generation, Huize is dedicated to serving its insurance clients for their life-long insurance needs. Leveraging its online platform, Huize offers a wide variety of insurance products with a focus on long-term life and health insurance products and empowers its insurer partners to reach a large fragmented client base in the insurance retail market efficiently and enhance their insurance sales. Huize provides insurance clients with digitalized insurance experience and services, including suitable product recommendations, consulting service, intelligent underwriting, and assistance in claim application and settlement, which significantly improve transaction experience.
For more information, please visit http://ir.huize.com.
Use of Non-GAAP Financial Measure Statement
In evaluating our business, we consider and use non-GAAP net profit/(loss) attributable to common shareholders as a supplemental measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define non-GAAP net profit/(loss) attributable to common shareholders as net profit/(loss) attributable to common shareholders excluding share-based compensation expenses and interest on convertible bond. Such adjustments have no impact on income tax because either the non-GAAP adjustments were recorded at entities located in tax free jurisdictions, such as the Cayman Islands or because the non-GAAP adjustments were recorded at operating entities located in the PRC for which the non-GAAP adjustments were not deductible for tax purposes.
We present the non-GAAP financial measure because it is used by our management to evaluate our operating performance and formulate business plans. Non-GAAP net profit/(loss) attributable to common shareholders enables our management to assess our operating results without considering the impact of share-based compensation expenses and the interest on convertible bond. We also believe that the use of this non-GAAP financial measure facilitates investors’ assessment of our operating performance.
This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net profit/(loss) attributable to common shareholders is that it does not reflect all items of income and expense that affect our operations. Further, the non-GAAP financial measure may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited.
The non-GAAP financial measure should not be considered in isolation or construed as an alternative to net profit/(loss) attributable to common shareholders or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measure in light of the most directly comparable GAAP measure, as shown below. The non-GAAP financial measure presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measures differently, limiting the usefulness of such measures when analyzing our data comparatively. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB7.2513 to US$1.00, the exchange rate on June 30, 2023, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollars amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Huize’s beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, business outlook and quotations from management in this announcement, contain forward-looking statements. Huize may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Huize’s goal and strategies; Huize’s expansion plans; Huize’s future business development, financial condition and results of operations; Huize’s expectation regarding the demand for, and market acceptance of, its online insurance products; Huize’s expectations regarding its relationship with insurer partners and insurance clients and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing.
Further information regarding these and other risks is included in Huize’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Huize does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
Investor Relations
Media Relations
Christensen In China Ms. Crystal Lai Phone: +852 2117 0861 Email: crystal.lai@christensencomms.com
In U.S. Ms. Linda Bergkamp Phone: +1-480-614-3004
15/08/2023 Dissemination of a Financial Press Release, transmitted by EQS News. Media archive at www.todayir.com |