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 first quarter ended March 31, 2022.
First Quarter 2022 Financial and
Operational Highlights
- Resilient
business performance: Gross Written Premiums (“GWP”)
facilitated on our platform in the first quarter of 2022 slightly
decreased by 4.0% to RMB1,338.0 million from RMB1,393.8 million in
the first quarter of 2021. Renewal premiums facilitated on our
platform in the first quarter of 2022 increased by 113.9% to
RMB1,077.8 million from RMB504.0 million in the first quarter of
2021, driven by continued robust persistency ratios of
approximately 94%.
- Effective
cost control: Total operating costs and expenses decreased
by 59.7% year-over-year to RMB285.2 million, resulting in a US GAAP
net profit attributable to common shareholders of RMB10.6 million
(US$1.7 million) for the first quarter of 2022.
- Robust
balance sheet and liquidity: As of March 31, 2022, our
cash and cash equivalents amounted to RMB376.1 million (US$59.3
million).
- Cumulative
number of insurance clients served increased to
approximately 8.0 million, compared to 7.0 million in the first
quarter of 2021. We cooperated with 100 insurer
partners, including 57 life and health insurance companies
and 43 property & casualty insurance companies, as of March 31,
2022.
Mr. Cunjun Ma, Founder and CEO of Huize
commented, “Against the backdrop of industry regulatory changes,
challenging macroeconomic headwinds and the ongoing pandemic, we
are very pleased to report a set of resilient operating and
financial results in the first quarter of 2022, underpinned by our
time-tested business model with a focus on serving the emerging
middle-class consumers in China for their long-term insurance
needs, and our continued focus on improving profitability by
executing on our group-wide organizational structure optimization
which resulted in significant cost savings during the quarter.
We continued to work with our insurer partners
to co-develop various long-term customized savings and protection
products, demonstrating our agile response to the dynamic operating
environment and our strengths in product innovation. The GWP
contribution of long-term insurance products remained above 90% for
the tenth consecutive quarter. Our guidance demonstrates our
confidence that with an expected macro recovery and improving
operating efficiency, we expect to achieve quarterly profitability
in the second half of 2022.
We have set a strategic roadmap for the next
three years to build an omnichannel digital insurance service
ecosystem that integrates “Agents, Businesses, Customers (ABC)” by
leveraging on our investments in technology and digitalization
since our IPO in 2020. To customers, we will leverage our proven
online platform with our expanding offline service coverage to
deepen engagements with our high-value customers to enhance
retention and repeat purchases, and further drive customer lifetime
values. To businesses, we will further drive industry
digitalization by developing and exporting technology to insurance
companies to support digital customer relationship management,
underwriting risk management, and insurance claims. To agents, we
have established a new business line targeting independent offline
insurance agents to empower them with a diversified insurance
product matrix, digital business development tools and customer
service support through our core Huize platform.”
First Quarter 2022 Financial Results
GWP and operating revenue
GWP facilitated on our platform was RMB1,338.0
million (US$165.7 million) in the first quarter of 2022, a slight
decrease of 4.0% from RMB1,393.8 million in the same period of
2021. Of the GWP facilitated in the first quarter of 2022, first
year premiums (“FYP”) accounted for RMB260.2 million (or 19.4% of
total GWP). Renewal premiums accounted for RMB1,077.8 million (or
80.6% of total GWP), an increase of 113.9% year-over-year.
Operating revenue was RMB299.5 million (US$47.2
million) in the first quarter of 2022, a decrease of 59.3% from
RMB735.0 million in the same period of 2021. The decrease in
operating revenue was primarily driven by the decrease in FYP
facilitated.
Operating costs
Operating costs were RMB149.7 million (US$23.6
million) in the first quarter of 2022, a decrease of 73.2% from
RMB557.5 million in the same period of 2021. The decrease was
primarily due to lower marketing channel costs.
Operating expenses
Selling expenses decreased by 4.0%
year-over-year to RMB73.9 million (US$11.7 million) in the first
quarter of 2022, compared with RMB77.0 million in the same period
of 2021, which was primarily due to a decrease in advertising and
marketing expenses. On a quarter-over-quarter basis, selling
expenses decreased by 34.2%, primarily due to a decrease of RMB24.2
million in personnel costs.
General and administrative expenses decreased by
29.2% year-over-year to RMB38.3 million (US$6.0 million) in the
first quarter of 2022, compared with RMB54.1 million in the same
period of 2021, primarily driven by a decrease in share-based
compensation expenses and a decrease in rental and utilities
expenses. On a quarter-over-quarter basis, G&A expenses
decreased by 31.7%, primarily due to a decrease in personnel costs
and professional service expenses.
Research and development expenses in the first
quarter of 2022 were RMB23.3 million (US$3.7 million), an increase
of 23.9% from RMB18.8 million in the same period of 2021, primarily
due to an increase in personnel costs. On a quarter-over-quarter
basis, R&D expenses decreased by 49.3%, primarily due to a
decrease in personnel costs.
Net profit attributable to common
shareholders and Non-GAAP net profit attributable to common
shareholders for the period
Net profit attributable to common shareholders
in the first quarter of 2022 was RMB10.6 million (US$1.7 million),
compared to a net profit attributable to common shareholders of
RMB28.5 million in the same period of 2021. Non-GAAP net profit
attributable to common shareholders in the first quarter of 2022
was RMB12.3 million (US$1.9 million), compared to a non-GAAP net
profit attributable to common shareholders of RMB38.7 million in
the same period of 2021.
Cash and cash equivalents
As of March 31, 2022, the combined balance of
the Company’s cash and cash equivalents amounted to RMB376.1
million (US$59.3 million), compared to RMB381.2 million as of
December 31, 2021.
Share Repurchase Program
As of April 1, 2022, the Company had purchased
an aggregate of 339,336 ADSs for a total amount of approximately
US$0.5 million, under its share repurchase program pursuant to
which the Company has been authorized to repurchase up to US$5
million ADSs by March 18, 2023, as previously announced on March
18, 2022.
Business Outlook
Based on the Company’s preliminary assessment of
the current market conditions, the Company currently expects to
achieve quarterly profitability in the second half of 2022. 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.
Conference Call
The Company’s management team will hold a Direct
Event conference call on Friday, June 24, 2022, at 8:00 A.M.
Eastern Time (or 8:00 P.M. Beijing Time on the same day) to discuss
the financial results. Details for the conference call are as
follows:
Event
Title: |
Huize Holding
Limited First Quarter 2022 Earnings Conference Call |
Conference ID: |
#4360707 |
Registration Link: |
http://apac.directeventreg.com/registration/event/4360707 |
All participants must use the link provided
above to complete the online registration process in advance of the
conference call. Upon registering, each participant will receive a
set of participant dial-in numbers, the Direct Event passcode, and
a unique access PIN, which can be used to join the conference
call.
A replay of the conference call will be
accessible through June 30, 2022, by dialing the following
numbers:
International: |
+61-2-8199-0299 |
Mainland China Toll-Free: |
400-820-9035 |
United States Toll-Free: |
+1-855-452-5696 |
Hong Kong, China Toll Free: |
800-963-117 |
A live and archived webcast of the conference
call will also be available at the Company’s investor relations
website at ir.huize.com.
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 RMB6.3393 to US$1.00, the exchange rate on
March 31, 2022, 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 Relationsinvestor@huize.com
Media Relationsmediacenter@huize.com
Christensen
In ChinaMs. Jasmine ZhuPhone: +852 2117 0861Email:
jasminezhu@christensenir.com
In U.S.Ms. Linda BergkampPhone: +1-480-614-3004Email:
lbergkamp@ChristensenIR.com
Huize Holding
LimitedUnaudited Consolidated Balance
Sheets(all amounts in thousands, except for share and per
share data)
|
|
As of December 31 |
|
As of March 31 |
|
|
2021 |
|
2022 |
|
|
RMB |
|
RMB |
|
|
USD |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
381,158 |
|
|
376,103 |
|
|
|
59,329 |
|
Restricted cash |
|
183,408 |
|
|
121,201 |
|
|
|
19,119 |
|
Contract Assets |
|
- |
|
|
54,206 |
|
|
|
8,551 |
|
Accounts receivables, net of allowance for impairment |
|
777,262 |
|
|
228,331 |
|
|
|
36,018 |
|
Insurance premium receivables |
|
1,217 |
|
|
883 |
|
|
|
139 |
|
Amounts due from related parties |
|
128 |
|
|
127 |
|
|
|
20 |
|
Deferred costs |
|
|
|
5,312 |
|
|
|
838 |
|
Prepaid expense and other receivables |
|
77,511 |
|
|
96,183 |
|
|
|
15,172 |
|
Total current assets |
|
1,420,684 |
|
|
882,346 |
|
|
|
139,186 |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Restricted Cash |
|
44,418 |
|
|
44,316 |
|
|
|
6,991 |
|
Contract Assets |
|
- |
|
|
4,593 |
|
|
|
725 |
|
Property, plant and equipment, net |
|
48,461 |
|
|
46,638 |
|
|
|
7,357 |
|
Intangible assets, net |
|
21,626 |
|
|
58,915 |
|
|
|
9,294 |
|
Deferred tax assets |
|
605 |
|
|
605 |
|
|
|
95 |
|
Long-term investments |
|
73,001 |
|
|
68,198 |
|
|
|
10,758 |
|
Operating lease right-of-use assets |
|
247,819 |
|
|
241,287 |
|
|
|
38,062 |
|
Goodwill |
|
461 |
|
|
461 |
|
|
|
73 |
|
Other assets |
|
379 |
|
|
47 |
|
|
|
7 |
|
Total non-current assets |
|
436,770 |
|
|
465,060 |
|
|
|
73,362 |
|
Total assets |
|
1,857,454 |
|
|
1,347,406 |
|
|
|
212,548 |
|
|
|
|
|
|
|
|
|
Liabilities, Mezzanine Equity and Shareholders’
Equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Short-term borrowings |
|
216,710 |
|
|
216,460 |
|
|
|
34,146 |
|
Accounts payable |
|
680,369 |
|
|
277,683 |
|
|
|
43,803 |
|
Insurance premium payables |
|
124,019 |
|
|
61,500 |
|
|
|
9,701 |
|
Contract liabilities |
|
7,236 |
|
|
7,014 |
|
|
|
1,106 |
|
Other payables and accrued expenses |
|
71,255 |
|
|
66,134 |
|
|
|
10,433 |
|
Payroll and welfare payable |
|
93,451 |
|
|
39,294 |
|
|
|
6,198 |
|
Income taxes payable |
|
2,440 |
|
|
2,440 |
|
|
|
385 |
|
Operating lease liabilities |
|
14,886 |
|
|
14,535 |
|
|
|
2,293 |
|
Amount due to related parties |
|
11,875 |
|
|
6,604 |
|
|
|
1,042 |
|
Total current liabilities |
|
1,222,241 |
|
|
691,664 |
|
|
|
109,107 |
|
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Long-term borrowings |
|
20,000 |
|
|
20,000 |
|
|
|
3,155 |
|
Deferred tax liabilities |
|
4,892 |
|
|
14,226 |
|
|
|
2,244 |
|
Operating lease liabilities |
|
249,183 |
|
|
251,374 |
|
|
|
39,653 |
|
Payroll and welfare payable |
|
225 |
|
|
143 |
|
|
|
23 |
|
Total non-current liabilities |
|
274,300 |
|
|
285,743 |
|
|
|
45,075 |
|
Total liabilities |
|
1,496,541 |
|
|
977,407 |
|
|
|
154,182 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
Class A common shares |
|
62 |
|
|
62 |
|
|
|
10 |
|
Class B common shares |
|
10 |
|
|
10 |
|
|
|
2 |
|
Treasury stock |
|
(9,545 |
) |
|
(11,910 |
) |
|
|
(1,879 |
) |
Additional paid-in capital |
|
896,772 |
|
|
898,994 |
|
|
|
141,813 |
|
Accumulated other comprehensive income |
|
(27,295 |
) |
|
(27,957 |
) |
|
|
(4,410 |
) |
Accumulated deficit |
|
(499,940 |
) |
|
(489,383 |
) |
|
|
(77,199 |
) |
Total shareholders’
equity |
|
360,064 |
|
|
369,816 |
|
|
|
58,337 |
|
Non-controlling
interests |
|
849 |
|
|
183 |
|
|
|
29 |
|
Total shareholders’
equity |
|
360,913 |
|
|
369,999 |
|
|
|
58,366 |
|
Total liabilities
and shareholders’ equity |
|
1,857,454 |
|
|
1,347,406 |
|
|
|
212,548 |
|
Huize Holding
LimitedUnaudited Consolidated Statements of
Comprehensive Income (all amounts in thousands, except for
share and per share data)
|
For the Three Months Ended March 31, |
|
2021 |
2022 |
|
RMB |
RMB |
|
USD |
|
Operating
revenue |
|
|
|
|
|
|
Brokerage income |
732,630 |
|
|
291,818 |
|
|
46,033 |
|
|
Other income |
2,351 |
|
|
7,665 |
|
|
1,209 |
|
|
Total
operating revenue |
734,981 |
|
|
299,483 |
|
|
47,242 |
|
|
Operating
costs and expenses |
|
|
|
|
|
|
Cost of revenue |
(556,696 |
) |
|
(148,260 |
) |
|
(23,388 |
) |
|
Other cost |
(771 |
) |
|
(1,415 |
) |
|
(223 |
) |
|
Total
operating costs |
(557,467 |
) |
|
(149,675 |
) |
|
(23,611 |
) |
|
Selling expenses |
(76,976 |
) |
|
(73,918 |
) |
|
(11,660 |
) |
|
General and administrative expenses |
(54,061 |
) |
|
(38,258 |
) |
|
(6,035 |
) |
|
Research and development expenses |
(18,833 |
) |
|
(23,343 |
) |
|
(3,682 |
) |
|
Total
operating costs and expenses |
(707,337 |
) |
|
(285,194 |
) |
|
(44,988 |
) |
|
Operating
profit |
27,644 |
|
|
14,289 |
|
|
2,254 |
|
|
|
|
|
|
|
|
|
Other
income/(expenses) |
|
|
|
|
|
|
Interest income/(expenses) |
(220 |
) |
|
(1,255 |
) |
|
(198 |
) |
|
Unrealized exchange (loss)/income |
(2 |
) |
|
(14 |
) |
|
(2 |
) |
|
Investment income/(loss) |
241 |
|
|
(2,139 |
) |
|
(337 |
) |
|
Others, net |
2,638 |
|
|
1,451 |
|
|
229 |
|
|
Profit before income tax, and share of loss of equity
method investee |
30,301 |
|
|
12,332 |
|
|
1,946 |
|
|
Income tax expense |
(1,529 |
) |
|
- |
|
|
- |
|
|
Share of loss of equity method investee |
(251 |
) |
|
(2,441 |
) |
|
(385 |
) |
|
Net
profit |
28,521 |
|
|
9,891 |
|
|
1,561 |
|
|
|
|
|
|
|
|
|
Net loss
attributable to non-controlling interests |
- |
|
|
(666 |
) |
|
(105 |
) |
|
Net profit
attributable to common shareholders |
28,521 |
|
|
10,557 |
|
|
1,666 |
|
|
|
|
|
|
|
|
|
Net
profit |
28,521 |
|
|
9,891 |
|
|
1,561 |
|
|
Foreign currency translation adjustment, net of tax |
1,223 |
|
|
(662 |
) |
|
(104 |
) |
|
Comprehensive income |
29,744 |
|
|
9,229 |
|
|
1,457 |
|
|
Comprehensive loss attributable to non-controlling
interests |
- |
|
|
(666 |
) |
|
(105 |
) |
|
Comprehensive income attributable
to common shareholders |
29,744 |
|
|
9,895 |
|
|
1,562 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common
shares used in computing net
profit per share |
|
|
|
|
|
|
|
|
|
Basic |
1,022,963,524 |
|
|
1,025,803,080 |
|
|
1,025,803,080 |
|
|
Diluted |
1,036,413,496 |
|
|
1,025,803,080 |
|
|
1,025,803,080 |
|
|
Net profit per share attributable to
common shareholders |
|
|
|
|
|
|
|
|
|
Basic |
0.03 |
|
|
0.01 |
|
|
0.00 |
|
|
Diluted |
0.03 |
|
|
0.01 |
|
|
0.00 |
|
|
Huize Holding
LimitedUnaudited Reconciliations of GAAP and
Non-GAAP Results(all amounts in thousands, except for
share and per share data)
|
For the Three Months Ended March 31, |
|
|
2021 |
|
2022 |
|
|
RMB |
|
RMB |
|
USD |
|
Net profit
attributable to common shareholders |
28,521 |
|
10,557 |
|
1,666 |
|
Share-based compensation expenses |
10,227 |
|
1,783 |
|
281 |
|
Non-GAAP net
profit attributable to common
shareholders |
38,748 |
|
12,340 |
|
1,947 |
|
Huize (NASDAQ:HUIZ)
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