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, 2023.
First Quarter 2023 Financial and
Operational Highlights
- Robust
business growth: Gross Written Premiums (“GWP”)
facilitated on our platform increased by 44.4% year-over-year and
33.4% sequentially to RMB1,932.7 million. First-year premiums
(“FYP”) facilitated increased by 153.9% year-over-year and 58.6%
sequentially to RMB660.7 million. Growth in GWP and first-year
premiums was primarily driven by our high-quality customer base,
high persistency rates, and established market-leading positioning
among long-term insurance products.
- Improving
cost-efficiency and sustainable profitability: Operating
expenses decreased by 20.2% year-over-year to RMB108.1 million. We
achieved profitability for the second consecutive quarter, with
non-GAAP net profit of RMB18.4 million.
- Cumulative
number of insurance clients served increased to
approximately 8.7 million as of March 31, 2023. We cooperated with
104 insurer partners, including 63 life and health
insurance companies and 41 property & casualty insurance
companies, as of March 31, 2023.
- As of March 31,
2023, cash and cash equivalents were RMB230.4
million (US$33.6 million).
Mr. Cunjun Ma, Founder and CEO of Huize,
commented, “We are very pleased to report solid financial results
for the first quarter of 2023 as both macroeconomic and operational
conditions gradually improve following the reopening of the Chinese
economy. GWP, operating revenue and non-GAAP net profit all
achieved double-digit growth on a sequential basis during the
quarter. This performance reflects the continued success of our
omnichannel distribution platform in targeting high-quality new
generation consumers in higher-tier cities, establishing a
market-leading position among long-term insurance products, and
empowering independent insurance agents. During the quarter, we
continued to focus on working with our partners to develop
innovative long-term savings and protection products that are
growing in popularity, resulting in GWP contribution from long-term
insurance products remaining above 90% for the fourteenth
consecutive quarter. GWP contribution from customized products
stood at 60.1% during the quarter. With our ability to acquire new
customers, upsell existing customers, and improving operating
leverage to a macro recovery, we are revising upward our non-GAAP
net profit guidance for the full year 2023 to RMB50 million from
RMB30 million.”
“In the first quarter of 2023, we continued to
step up our investment in the deployment of our 'online purchase;
offline service' strategy to strengthen our O2O-integrated
insurance service ecosystem. In the “To-A” segment, we empowered
independent agents with product filtering tools, real-time insights
into customer behavior, and efficient professional support to
strengthen their ability to acquire and engage with customers.
During the quarter, FYP facilitated by the “To-A” business reached
RMB74.8 million, representing approximately one-third of the FYP
facilitated in 2022. In the “To-C” segment, we continued to refine
operations with a strong emphasis on compliance and applied
cutting-edge technology to enhance customer acquisition,
activation, and retention. As a result, the average FYP ticket size
during the quarter for long-term savings products increased by
48.8% year-over-year to approximately RMB44,000. Moving forward, we
will strengthen cooperation with our insurer partners by innovating
and distributing the best products and services while at the same
time deepening the integration of our O2O ecosystem to enhance
customer experience. We are committed to solidifying our position
as a leading insurance intermediary by driving high-quality
sustainable growth and creating long-term shareholder value.”
First Quarter 2023 Financial Results
GWP and operating revenue
GWP facilitated on our platform was RMB1,932.7 million (US$281.4
million) in the first quarter of 2023, an increase of 44.4% from
RMB1,338.0 million in the same period of 2022. Within GWP, FYP
accounted for RMB660.7 million (or 34.2% of total GWP), an increase
of 153.9% year-over-year. Renewal premiums accounted for RMB1,272.0
million (or 65.8% of total GWP), an increase of 18.0%
year-over-year.
Operating revenue was RMB298.9 million (US$43.5
million) in the first quarter of 2023, remaining essentially flat
when compared with RMB299.5 million in the same period of 2022, and
representing an increase of 15.7% from RMB258.4 million during the
fourth quarter of 2022. The sequential increase was primarily
driven by the increase in FYP facilitated.
Operating costs
Operating costs were RMB179.8 million (US$26.2
million) in the first quarter of 2023, representing an increase of
20.1% from RMB149.7 million in the same period of 2022 and 10.9%
from RMB162.2 million during the fourth quarter of 2022. On a
sequential basis, operating costs grew at a slower pace than
operating revenue primarily due to disciplined control of marketing
channel costs.
Operating expenses
Selling expenses were RMB56.3 million (US$8.2
million) in the first quarter of 2023, a decrease of 23.8% from
RMB73.9 million in the same period of 2022, primarily due to a
decrease in advertising and marketing expenses, and to a lesser
extent, a decrease in salaries and employment benefits.
General and administrative expenses were RMB33.5
million (US$4.9 million) in the first quarter of 2023, a decrease
of 12.5% from RMB38.3 million in the same period of 2022, mainly
due to a decrease in personnel costs and share based compensation
expenses.
Research and development expenses were RMB18.3
million (US$2.7 million) in the first quarter of 2023, a decrease
of 21.5% from RMB23.3 million in the same period of 2022, primarily
due to a decrease in personnel costs.
Net profit and Non-GAAP net profit for
the period
Net profit in the first quarter of 2023 was RMB17.9 million
(US$2.6 million), an increase of 68.9% from RMB10.6 million in the
same period of 2022.
Non-GAAP net profit was RMB18.4 million (US$2.7 million) in the
first quarter of 2023, compared with RMB12.3 million in the same
period of 2022.
Cash and cash equivalents
As of March 31, 2023, the combined balance of
the Company’s cash and cash equivalents amounted to RMB230.4
million (US$33.6 million), compared to RMB277.2 million as of
December 31, 2022.
Share Repurchase Program
Year to date as of March 31, 2023, the Company had purchased an
aggregate of 484,260 ADSs for a total amount of approximately
US$0.6 million under its share repurchase program.
Business Outlook
Based on the Company’s preliminary assessment of the current
market conditions, the Company expects to achieve a non-GAAP net
profit attributable to shareholders of not less than RMB50 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.
Conference Call
The Company’s management team will hold an
earnings conference call at 8:00 A.M. Eastern Time on Tuesday, May
30, 2023 (8:00 P.M. Beijing/Hong Kong Time on Tuesday, May 30,
2023). Details for the conference call are as follows:
Event
Title: |
Huize Holding
Limited’s First Quarter 2023 Earnings Conference Call |
Registration Link: |
https://register.vevent.com/register/BI17ed259996fc479daff95f099d4194bd |
All participants must use the link provided
above to complete the online registration process in advance of the
conference call. Upon registration, each participant will receive a
confirmation email containing dial-in numbers and a unique access
PIN, which will be used to join the conference call.
Additionally, a live and archived webcast of the
conference call will also be available on the Company’s investor
relations website at http://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 RMB6.8676 to US$1.00, the exchange rate on
March 31, 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 Relationsinvestor@huize.com
Media Relationsmediacenter@huize.com
ChristensenIn ChinaMs. Crystal LaiPhone: +852
2117 0861Email: crystal.lai@christensencomms.com
In U.S.Ms. Linda BergkampPhone: +1-480-614-3004Email:
linda.bergkamp@christensencomms.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 |
|
|
2022 |
|
2023 |
|
|
RMB |
|
RMB |
|
USD |
Assets |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
277,168 |
|
|
230,429 |
|
|
33,553 |
|
Restricted cash |
|
98,917 |
|
|
112,080 |
|
|
16,320 |
|
Contract assets, net of allowance for doubtful accounts |
|
49,888 |
|
|
30,462 |
|
|
4,436 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
250,667 |
|
|
288,906 |
|
|
42,069 |
|
Insurance premium receivables |
|
1,792 |
|
|
2,091 |
|
|
304 |
|
Amounts due from related parties |
|
489 |
|
|
195 |
|
|
28 |
|
Deferred costs |
|
- |
|
|
1,779 |
|
|
259 |
|
Prepaid expense and other receivables |
|
71,818 |
|
|
79,228 |
|
|
11,536 |
|
Total current assets |
|
750,739 |
|
|
745,170 |
|
|
108,505 |
|
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
Contract assets, net of allowance for doubtful accounts |
|
6,634 |
|
|
6,366 |
|
|
927 |
|
Property, plant and equipment, net |
|
38,518 |
|
|
33,008 |
|
|
4,806 |
|
Intangible assets, net |
|
53,498 |
|
|
53,298 |
|
|
7,761 |
|
Long-term investments |
|
77,305 |
|
|
75,536 |
|
|
10,999 |
|
Operating lease right-of-use assets |
|
162,180 |
|
|
127,486 |
|
|
18,563 |
|
Goodwill |
|
461 |
|
|
461 |
|
|
67 |
|
Other assets |
|
279 |
|
|
279 |
|
|
41 |
|
Total non-current assets |
|
338,875 |
|
|
296,434 |
|
|
43,164 |
|
Total assets |
|
1,089,614 |
|
|
1,041,604 |
|
|
151,669 |
|
|
|
|
|
|
|
|
|
Liabilities, Mezzanine Equity and Shareholders’
Equity |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Short-term borrowings |
|
150,000 |
|
|
77,000 |
|
|
11,212 |
|
Accounts payable |
|
262,266 |
|
|
274,058 |
|
|
39,906 |
|
Insurance premium payables |
|
27,567 |
|
|
34,057 |
|
|
4,959 |
|
Contract liabilities |
|
4,034 |
|
|
4,372 |
|
|
637 |
|
Other payables and accrued expenses |
|
58,251 |
|
|
55,747 |
|
|
8,117 |
|
Payroll and welfare payable |
|
43,938 |
|
|
71,942 |
|
|
10,476 |
|
Income taxes payable |
|
2,440 |
|
|
2,440 |
|
|
355 |
|
Operating lease liabilities |
|
10,075 |
|
|
13,978 |
|
|
2,035 |
|
Amount due to related parties |
|
495 |
|
|
2,212 |
|
|
322 |
|
Total current liabilities |
|
559,066 |
|
|
535,806 |
|
|
78,019 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Deferred tax liabilities |
|
12,491 |
|
|
12,491 |
|
|
1,819 |
|
Operating lease liabilities |
|
176,032 |
|
|
138,437 |
|
|
20,158 |
|
Total non-current liabilities |
|
188,523 |
|
|
150,928 |
|
|
21,977 |
|
Total liabilities |
|
747,589 |
|
|
686,734 |
|
|
99,996 |
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
Class A common shares |
|
62 |
|
|
62 |
|
|
9 |
|
Class B common shares |
|
10 |
|
|
10 |
|
|
1 |
|
Treasury stock |
|
(15,306 |
) |
|
(19,637 |
) |
|
(2,859 |
) |
Additional paid-in capital |
|
904,935 |
|
|
905,220 |
|
|
131,810 |
|
Accumulated other comprehensive loss |
|
(17,695 |
) |
|
(18,207 |
) |
|
(2,651 |
) |
Accumulated deficits |
|
(531,127 |
) |
|
(513,217 |
) |
|
(74,730 |
) |
Total shareholders’
equity attributable to Huize Holding Limited
shareholders |
|
340,879 |
|
|
354,231 |
|
|
51,580 |
|
Non-controlling interests |
|
1,146 |
|
|
639 |
|
|
93 |
|
Total shareholders’
equity |
|
342,025 |
|
|
354,870 |
|
|
51,673 |
|
Total liabilities and
shareholders’ equity |
|
1,089,614 |
|
|
1,041,604 |
|
|
151,669 |
|
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, |
|
|
2022 |
|
2023 |
|
|
RMB |
|
RMB |
|
USD |
Operating
revenue |
|
|
|
|
|
|
Brokerage income |
|
291,818 |
|
|
288,356 |
|
|
41,988 |
|
Other income |
|
7,665 |
|
|
10,554 |
|
|
1,537 |
|
Total operating
revenue |
|
299,483 |
|
|
298,910 |
|
|
43,525 |
|
Operating costs and
expenses |
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
(148,260 |
) |
|
(174,076 |
) |
|
(25,346 |
) |
Other cost |
|
(1,415 |
) |
|
(5,771 |
) |
|
(840 |
) |
Total operating
costs |
|
(149,675 |
) |
|
(179,847 |
) |
|
(26,186 |
) |
Selling expenses |
|
(73,918 |
) |
|
(56,279 |
) |
|
(8,195 |
) |
General and administrative expenses |
|
(38,258 |
) |
|
(33,529 |
) |
|
(4,882 |
) |
Research and development expenses |
|
(23,343 |
) |
|
(18,312 |
) |
|
(2,666 |
) |
Total operating costs
and expenses |
|
(285,194 |
) |
|
(287,967 |
) |
|
(41,929 |
) |
Operating
profit |
|
14,289 |
|
|
10,943 |
|
|
1,596 |
|
|
|
|
|
|
|
|
|
|
|
Other
income/(expenses) |
|
|
|
|
|
|
Interest expenses |
|
(1,255 |
) |
|
(204 |
) |
|
(30 |
) |
Unrealized exchange loss |
|
(14 |
) |
|
(129 |
) |
|
(19 |
) |
Investment income/(loss) |
|
(2,139 |
) |
|
459 |
|
|
67 |
|
Others, net |
|
1,451 |
|
|
7,321 |
|
|
1,066 |
|
Profit before income
tax, and share loss of equity method investee |
|
12,332 |
|
|
18,390 |
|
|
2,680 |
|
Share of loss of equity method investee |
|
(2,441 |
) |
|
(987 |
) |
|
(144 |
) |
Net
profit |
|
9,891 |
|
|
17,403 |
|
|
2,536 |
|
|
|
|
|
|
|
|
Net loss attributable
to non-controlling interests |
|
(666 |
) |
|
(507 |
) |
|
(74 |
) |
Net profit
attributable to common shareholders |
|
10,557 |
|
|
17,910 |
|
|
2,610 |
|
|
|
|
|
|
|
|
Net
profit |
|
9,891 |
|
|
17,403 |
|
|
2,536 |
|
Foreign currency translation adjustment, net of tax |
|
(662 |
) |
|
(512 |
) |
|
(75 |
) |
Comprehensive
Income |
|
9,229 |
|
|
16,891 |
|
|
2,461 |
|
Comprehensive loss
attributable to non-controlling interests |
|
(666 |
) |
|
(507 |
) |
|
(74 |
) |
Comprehensive income
attributable to common shareholders |
|
9,895 |
|
|
17,398 |
|
|
2,535 |
|
|
|
|
|
|
|
|
Weighted average
number of common shares used in computing net profit per
share |
|
|
|
|
|
|
Basic and diluted |
|
1,025,803,080 |
|
|
1,012,038,174 |
|
|
1,012,038,174 |
|
Net profit per share
attributable to common shareholders |
|
|
|
|
|
|
Basic and diluted |
|
0.01 |
|
|
0.02 |
|
|
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, |
|
|
|
2022 |
|
2023 |
|
|
RMB |
|
RMB |
|
USD |
Net profit
attributable to common shareholders |
|
10,557 |
|
17,910 |
|
2,610 |
Share-based compensation expenses |
|
1,783 |
|
504 |
|
73 |
Non-GAAP net profit
attributable to common shareholders |
|
12,340 |
|
18,414 |
|
2,683 |
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