WDH Overview

Strong Revenue Growth: Waterdrop Inc. reported a 38.4% increase in revenue for the third quarter, driven by a significant rise in its technical services segment, which now contributes 23% of total revenue.

Challenges in Core Business: Despite impressive growth, the company's traditional insurance brokerage faces increasing regulatory pressures in China, prompting a shift towards more lucrative technical services and AI integration.

Profitability and Market Response: Waterdrop achieved a 330% increase in operating profit and a 60% rise in net profit year-on-year, yet the stock's response to these results has been muted, reflecting investor concerns about the insurance market.

Future Growth Potential: The company aims to enhance its image as a tech-driven service provider for insurers and drug companies, which could lead to further stock appreciation if successful in shifting market perceptions.

Financial Performance: Waterdrop Inc. reported Q3 2025 revenue of CNY 975 million, a 38.4% year-on-year increase, with net profit attributable to shareholders rising 60.1% to CNY 158 million, and operating profit reaching CNY 114 million, up 329.8% year-on-year.

AI Integration and Product Development: The company emphasized the significant role of AI in enhancing operational efficiency and customer experience, launching new insurance products and an AI-driven low-code platform to empower employees.

Cash Management and Shareholder Returns: Waterdrop completed its fourth cash dividend distribution since its IPO, totaling approximately $10.9 million, and repurchased around 58.1 million ADS for $113 million by the end of November 2025.

Positive Outlook: Management expressed confidence in exceeding full-year revenue and profit guidance, focusing on leveraging AI technologies for sustainable long-term growth and operational innovation.