HUIZ - Earnings call transcript Q4 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Huize Holding Limited’s Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions] Today’s conference call is being recorded, and a webcast replay will be available. Please visit Huize’s IR website ir.huize.com, under the Events and Webcasts section.

Now, I’d like to hand the conference over to your speaker host today, Ms. Harriet Hu, Huize’s Investor Relations Director. Harriet. ahead, go Please

Harriet Hu

Hello, the welcome year fourth operator. conference of our call for quarter everyone, you, to and earnings XXXX. Thank and full

and both and currently the financial operating were earlier Our results Newswire. available IR our today on website and released are

continue, this refer to non-GAAP Before statements. will making call harbor as I with our which release, Please like are earnings more our in the and which that today, forward-looking of our SEC. we measures in press would the also also safe to we explained you statement applies use release note to be thoroughly earnings filings

for will Joining us providing an the of highlights Tam the up COO, results the Minghan Mr. Ma; period operational Co-CFO, call before the Ma. the turn today to Cunjun overview will Mr. then call Mr. I quarter and XXXX. open financial company’s our Ma are fourth Xiao; and CEO, details Ronald on start Mr. the call Li Mr. for Jiang; questions. and for by we Mr. Co-CFO, over performance Founder will now Mr. of provide Tam. the

Cunjun Ma

Language] [Foreign

Harriet Hu

all and and Year marked Fourth Earnings Huize’s Hello, thank Full XXXX for for an Conference quarter Call. Huize. milestone everyone, XXXX important you joining

my business year, insurance our complete delivered macro We unique And distribution online support for experience leading focus long-term like our the product and and the years task conditions China. insurance advantages our industry. on our online robust for results market not on gratitude to throughout Despite trust. your platform to in our all In Huize the was to are express capital of shareholders the development of its competitive pioneers industry, model, NASDAQ digital was in I insurance to work due capabilities. investors China’s officially February, uncertain we IPO. the listed condition, would and an as the us due despite challenging a to in X at it of Therefore, easy pandemic

quarter, increased by year, revenue During the RMB we total more X RMB with to increased revenue GWP overall reaching while fourth XX% capitalized year-over-year, and X.XX operating total year-over-year billion. the year-over-year the billion, XX% economy, operating XX.X% both to in total new by recovery our increasing quarterly industry GWP platform and on the than on trends Particularly in facilitated by to highs. total

of On the front, business pursued short-term monetization. user the strategy development place value long-term Huize of in traffic

and momentum. product long-term XX.X% the XXXX, X.XX long-term resilience long-term XXXX. increased strategy life accounted GWP billion. Our for from for to year-over-year XX.X% total XX.X% downturn of In our differentiated health during Meanwhile, sustainable in by health market insurance generate enhanced increasing GWP growth insurance RMB and GWP,

and XX%. to economic Over acquisition in clients of health XX client higher about the past believe both as consecutive persistency and modes, the its life for months replicate. ratios that remained difficult high-quality insurance as capabilities which retention Huize’s We have long-term X for of quarters, are our XX competitors in online well

transaction data, insurance In needs. been products more and insurance and insurance our valuable we’ve of with user understanding clients customized product terms our leveraging to and innovation, multidimensional able this massive of their data design for

our Darwin success launched product was another X illness original insurance, yet critical the For we which of line. example, Darwin

in feature RMB partners online billion, China’s with GWP with joint-life products, a annuity, totaled unique XXXX. our which and the in compared our launched innovation insurance We market. XXXX, of In for was co-developed the also first version accounted of lead for X.XX XX.X% also and insurer online annuity insurance total took customization GWP in XX.X% products of

assistance combining platform user-centric further to system its XXXX, with an upgraded In its service service constantly improving Huize to by our Xx. Regarding human functions offline client services up our structure, centers fleet increased experience. and optimize and automatic focus, maintained portal we user

the and by claimed XX% XX,XXX, year-over-year year, by to XXX assisted increased cases million. by increased of number XX% amount claimed year-over-year the Huize the During to RMB

As market enabled By attracting of new the continue the to online increased clients and differentiated of has X.XX number end million. reputation pandemic consumption, to accumulated converting and services our us accelerated the XXXX, users. insurance insurance Huize’s

to Moving in to the efficiency accumulate improvements. knowledge key of embedded technology development, and cost and terms apply this in transactions, reduction AI processes. algorithms, into knowledge extract intelligence our data learning services business from We from data we our achieve order win-win machine and to data

This clients’ on the interest experience. not the efficiency also example, quickly insurance user prospectivity our but application our optimal improves we products. recommend For end, process front It of Proposal and XXXX. and can in has boosted application AI launched consultants, only

interactive the Meanwhile, the same middle screen user workstation such and into experience. provides consultant been use. tools put clients provides immersive Huize’s consultants. to has an officially analytical portraits preference On new It end, function empower and user as our with also explanation

calculate end, industry Then system analyze multichannel operational to continue gain also information and transcribe, compliance positioning to of value On our the operating reduce and on growth, inspection text compliance and intelligent and and the financial risk. our can and improve recognition. our back efficiency voice personnel our

developments During innovation Huize the released with year of over our China our also in At was fintech KPMG’s market technology. listed. included top the was among force companies Such insurance first as leading and years. achievements capabilities This in X same we’ve development of been placing consecutive time, the a assessments. of fourth the in XX short XXXX of are past tier the that behind and year, result list terms performance digital ongoing China XX research XXXX, driving insurance institute Huize a agencies level list top Huize the in

aspects in in technology. for following the fall our the XXXX. process focus to empowered confident in China by the insurance new data and further aim platform of consumers establish are order industry and we we to will ahead, generation go-to-digital the online achieve Looking service In as insurance team on Huize this

better as enhance Huize’s strengthen and will to our First, to embrace core and as digitalization, well the the At acquisition optimize ongoing our adaptations competencies. will and governance development time, transformation. we digital ensure we fully continuously same talent culture structure research corporate technology

a Second, Shanghai we by the centers off-line Shenzhen as up optimize experience and core maximize comprehensive client client’s will in to business setting further our and upgrade strategic value. service service expanding by high-value cities promote lifetime such

upstream Third, partners along our we enrich collaborations will service and improve capabilities. strengthen our the and with value downstream to chain product industry offerings

of call targets, high-quality improve a and to value advantage markets, capital take products through medical highlights concludes of Huize proposition more with and follow to full Mr. quarter. further positioning ecosystem my We and services to remarks I for now development he mergers for we our health expect and acquisitions platform’s Tam, Ronald realize to will turn and a insurance, CFO, key market will an range the related Fourth, the strategy. will prepared provide the financial our overview our our platform its and care. open over become This investment actively of identify including today.

Ronald Tam

revenues, which platform quarterly both everyone. beaten market. Mr. we very our Thank total has in delivered results Ron GWP given on another you, hello, our as quarter, excited of numbers the summary, In Harriet, to and are here. It’s operating for again which fourth have previous Ma and for yet as record we total strong well guidance to facilitated report set the

corresponding X reflect prepared quarter, as of purchases illness renewal young of facilitate see in we trend part of quarter, in from which Mr. of partners, country represented over continues continue adoption drive performance long-term top is The his in increasing of billion key in remarks, the following co-developed well a in time customers, segment XX% with our contribution which in Darwin managed first From up the X of mentioned insurance GWP insurer the GWP health in online insurance of With million the high-tier underlying containment XXX a to earlier a the in to co-developed Ma affluent the growth the business. RMB total year-over-year. the earlier critical large with of mass new first EM product the for perspective, premiums. we QX transition illness products target Sinatay the was for particularly ahead the critical overall critical new the into RMB recovery Insurance regime line Chinese we importantly, Life carried consumers And together product our strong is the which being continue definition best-selling as XXXX, new products industry. of strong year in single For the products to a COVID a the focus generation cities illness are during key to China. by to industry the quarter. momentum

quarter, as insurance year up strong RMB addition period. insurance have the annuities Year during capitalize critical whole amounted market the we to XXX on New also first distribution well for the pre-Chinese a which year-end quarter, savings of insurance In illness, products, of successfully the life as demand including during to million GWP products, as ramped during seasonally we savings and

and total Our efforts life our Overall, which in is our along fee XX% is create additional during and users renewal obviously XXX portfolio premiums, up million million customers RMB cycles trust facilitated products turn, the platform. product billion, which the which, was engagement year-over-year. totaled year-over-year higher also with drive continuing lifetime X RMB GWP focus the in for better up of premiums, RMB quarter which XXX.X in our with providing broadening reflects helps customer value our X.Xx in

ratios XX%. that strong renewal platform quarter, and metrics, to to again Here, very able months our through the at with multichannel XX to highlight XX I clients is see our persistency And during like about marketing continued which would persistencies acquire high-quality robust the maintained continue we strategies. the being demonstrates

line. the income during and to previously QX the primarily G&A by see in the increased GWP our operating results. This increase the the the spend illness critical revenue high, spend proactively XX.X expenses XX% which a for Cost in for increased increased our which primarily QX an increased salaries offset products for And up advertising we data million, quarter our The increase can turning which XX% partners. as analytics by by increase year-over-year. quarterly by given Total period. Now to million million, guidance expenses, revenue to demand increased of to by quarter RMB continue quarter, the year-over-year by Selling revenues the outperformed capitalize traffic the again, R&D in was and share-based RMB expenses. increase a increase for and XX.X% in in QX XX.X% increased marketing million. attributable applications our AI record quarter XXX.X brokerage RMB attributable primarily due in here, XX.X% R&D RMB the quarter. invest the and marketing driven to significant expenses fees to in revenue due XXX.X service and X.X% year-over-year user to channel facilitated to to decrease XX.X was on was to primarily market platform for compensation was we paid the headcount. year-over-year quarter professional million, for by grew in XX.X service total for to expenses in market in to to RMB G&A and year-over-year our increasing you that the in increase was

quarter, XX fourth of million. the GAAP have RMB loss we During recorded a net

position. maintain XX continue We and of balance we had cash USD equivalents million. financial the approximately And at quarter of to liquidity combined a and robust cash end, a strong

first QX products. demand the our undertaken market Now the year, such strong seeing bid new are the are for quarter. light briefly result, the on incentive to in And track year. heavily And touched we share as also over first of old partners another invested disproportionate for demand illness a with have the of critical quarter we record have operating earlier, with upon outlook for in capture regards a we we revenues. total significant to campaigns building last in our quarter achieve now yet in spend a to market of in quarter we during marketing now quite the channel the And definition as

for represents end for in XXX the RMB As over at operating current This of the which various a on and COVID-XX revenues, XXX up uncertainties, year-over-year. market by and operational the for our growth be for RMB prepared related reflects our formal caused remarks which those are call revenues forecast will ongoing QX and range total conditions, to obviously to this open to Q&A. the concludes Thank subject now the a With you, low to we currently expect million preliminary views QX including that, company’s pandemic. guidance today, we operator. to change X.Xx million,

Operator

[Operator line first Instructions] comes Your of question Ma of the Citigroup. from Michelle

Michelle Ma

new prices definition February? version? new still and [Foreign how critical Is competitive? are how was Language] X, second of and the regulations, the the overall about illness. be question some year challenges My will the next old new the be to the first And is implemented the the question new and May regulations? What sales February year are products And new in of X to And illness management very X see which year. it on these comply biggest next about this with critical January product compared

Ronald Tam

Ron Thank here. you, Michelle. It’s

the take for me questions Let team. the

So product. critical the new illness the first regarding question

with to probably second to the be any would it’s of and the early through think require direct believe We very it say, new product, that education say our would -- period literally coming a of that that channels able year. drive to marketing product. And we online, of we for new believe Insurance. working product at Life clients again, half the sales, launched And I this Sinatay through time, channels. have be this that through obviously, to and for is today, products the we we to given still should insurance this be in also the new large new so #X the given the marketing are Darwin seen. are that our results intuition just But yet another like

So still also the confident new very market. I by to early tell. obviously But very would we think product that be definition received days well very the are it’s

commented the in both the strong slower the So month definition products QX, deadline previewed that remarks. we We is coming QX mainly the significant January. in given have early we of demand from which a numbers coming for the the into of from that prepared demand we QX old the -- that see XX January especially product, in for of market,

So coming fact, the as very would actual question the policies regulatory of the regulators. consultative constant bodies And with of the relevant first the And industry I that’s X we the really operators, regarding the of dialogue regulatory of are dropping second up members the to regulatory changes, that Board relevant the or the X we given on the where answer question. in in measures. we the leading in terms are say new are to of in

online. on sales in insurance done to so insurance requesting products other can think that the for that companies sure have are are that for think some be effect, changes, could that the of say point they an of that the that compliant or are way. be And interactions to all can the have itself achieve making To requirement insurance And products records we And tracked they provided most online meet consultants. all provide conversations on I clients basis. for to any request we this so for already changes we And example, required proud they’re would such very changes. to anticipating of our requirements be conversation order certain the in and to client I on or now regulatory now able already customers example, with that system that regulatory they process with focused are the requiring to to setting on an as effect, that

to regulators to For rating to in well are strengthen both come on think were balance that for into companies, to solvency the new or And like I these company effect requirements capital consecutive X undertake very insurance as ratio, time example, new advance year, core the for the think that given credit new And strengthen they for effect. will the the these year. industry new matches requirements, I come next insurance in measures sheet brokerages requirements for as And the participants, measures adequate into changes. quarters. the side the likely basis, the ourselves, to adapt insurance these

That’s with overall, the these to think the I question. to the market, changes. in that of as leading And well think So manage the are hoping players the answer positioned is industry I the we changes. X second very

Operator

the CLSA. comes Joey of next from Yang question of line Your

Joey Yang

[Foreign question first is the products. Language] my about So

that we platform we sells products #X Darwin AI not launched that customized. understood are officially out understood So that that also with And today. the the

difference noticed We the better is the types X of offer between us that the in management second So XQ. products? that preference at premium. previous XQ So time, also premium actually we between -- understand X the of premium there quarters. the the year first there a XX% could products, decrease about slight the profit the could a same us see compared question was of for XQ which of a And with margin? the like structure types accounted my help And is take in rate X

latest was in talented has is of I because the of would services services of also driver talent to of about related the XQ? our I selling -- we last our the the my the centers, to about progress mentioned, And Mr. question short-term like selling Is more as this -- insurance rate what’s wondering And or to take the So centers? off-line obtain decreasing Ma ask offline products? to employee was the point servicing attract what’s offline development. it

Ronald Tam

questions don��t for your [Foreign for us you, Thanks Joey. Language] following take questions. the again. behalf team Thank Why on I the of and

or and the brokers. have other shelf can question really versus that mix take So co-developed standard any GWP product products our about product like of the is towards whether the first the off we we customized preference

from I that customers all, I think first here come we think clear always the of answer the perspective. is that,

product the with that answer partners. illness users company money, insurance I slight money is we And or the with at products Med typically, Huize they’re in by their valuable question of for this products that we codeveloping therefore, like co-manufacture And customized the best currently because attracted available the preference marketplace. to being when very Health, time to platform, the first, likes for The our would we the think our have naturally which product point good any these critical given Sinatay circumstances. are best for a come suitable represent and towards co-developed be the products value that oftentimes, in

And I therefore, our do engage them so that to will with relationships down would, as will cultivate corporate, these to arrangements prefer us able customers and be And of better perspective, products co-developed naturally, about our a for inquire we deepening road. prefer partners, the think our given insurance we lead from deepen upstream products. with to economy

#X example, better way the second Sinatay, we overall with that with give we to have therefore, to partner partners. persistencies, future high is that us time worked think our to receive be a will the we insurance from I For Darwin company can of and comfort And also the looking insurer we as the products. lot the of in our industry to demonstrate to partners treatment versions

question. And the the that’s so think to And take overall first question I therefore, rate. your second answer the regarding

to quarter. I the this premiums think mix really particular in year to as is the the explanation product first fourth it pertains

the quarter. premium done we is entirely also And have think additionally fourth our an we that of entered in XX% fee in first annuities. premiums in of new fourth the XX% achieved our life quarter, in segment whole I This year we’ve product first insurance. year

the And companies it’s the which typically compared first core, commission in a period product time development the and being annuities the as savings-related products rate. therefore, to the related carry typically, naturally so-called quarter we’re annuity the the to that company lower China annuities a quarter. therefore, And in so higher premium year XX% denominated slanted as And insurance both home long-term the a fourth therefore, during and savings combined, And is or is in really investors towards In fourth likes of the leading the insurance rate push slightly fourth from think market of mix industry, bit also in illness products the contribution have Year there’s for the market overtake set. life. pre-Chinese in the lower year to the we in and aligned the with first quarter, understand quarter. critical time. come And is the a the I that New brokerage there and and premiums

So it’s a product play. mix factor into coming

would I can this. here, for the for question the make like maybe plan on third I to regarding offline, a and team the going think few to remarks So add

really this seeing year. then I Last are we out year. roll us this we the given due momentum the pulling But new this, year, we the in quarters the think for how into going plan presence but X offline mentioned last for the back is about year, strong were to new to COVID, plans.

us our more confident in much to the we’re better existing that pushing will then I’d And better think base. interaction is here. like this and few I presence enable offline One out engagement a initiative. have point user factors with to

centers, we high-value first customers with offline I customers. service phase, to very of on top proprietary now. We to have the X.X for of this reach and user out And we And have focused data at our data, million we ranking we users the achieve can the terms the to obviously, these tier of then of initiative. think a And users. have just first list cities we right the were XX% can in in-house first And the phase able these are those if base. In really approach.

the looking this initiative. really less I And XXX of than at marketplace. think the I speed to are and probably attract we’re professional Shanghai hiring think hiring talent people and for we from things, Shenzhen, side looking new to

and the be they proposition capture repeat be value platform. leads they life to purchases they new user increasing our leverage values back the routed these on on can can And would can pull think I leverage to just -- I one, respective which internal database, centers, online to to use or earlier, cultivate can mentioned this the our for that this consultants and use customers. list, creates offline that therefore, make this of and list that, time also to business

customers to and to differentiated as our expecting more well. be so new And consultants services delivering higher-value products we’re these

Operator

Li question line comes Brian Group. from the AMTD of of next Your

Brian Li

RMB Language] your XXX you had noticed account sheet. on just that I the million [Foreign payable balance have on

please you on this more could item? color So give

Ronald Tam

Brian, Thanks, the Sure. today. and joining thanks call for

answer is think of lot has business. to month of year. have as the experienced therefore, the payable balance December this this that And end account the simple strong at the of we business I a the a generated

at had of So month perspective. it a strong to December from the do really business

Operator

Your next of the [indiscernible] question comes from line of Securities. Jan Oli

Unidentified Analyst

question [Foreign still Language] first potential So about offline my now. M&A, by Ma going my target? my This company So X this question the year mentioned current service are And is your question to acquire just the about is year, -- second Mr. about more M&A deals? the center. what’s

what are functions service So main the those offline of center?

Ronald Tam

It’s Okay. you. here. Ron Thank

question, first Let second me take [Foreign the maybe question and Language]. the for

Okay.

first So targets. M&A about question the

I brackets. are investment major think prioritizing I targets, we in think, our X

be bracket some we partners the that past existing are first X the think major with the possibly working would of for I channel years.

these of marketing I a into distribution to perspective channels. and better us collaborations for could integrate think some capital those from be interesting

area. X that’s So

very area Second core synergistic be or similar our even to online business. is This brokerages. offline will

For online, brokerage and would share. better be market a horizontal for capture us to expansion

can For for that business business offline to be the treatment model. online strategy so a offline an will online we business complementary of accelerate

terms in AR processes, online focus in innovative end, also and other think where claims so insure the and be the or could be forth. to product the support, So technologies it front And for middle technologies of service Platforms business service and and strong the us. customer customer underwriting very platforms. they area and third be have just the back-end X those key could I whether have tech

think I areas to will major looking for us M&A target the So this be be at.

Cunjun Ma

[Foreign Language]

Ronald Tam

here to commenting like Mr. question, I’d Language] second the [Foreign Ma That’s Thank the on for team. and translate you.

relating centers plant offline question we to So the for strategy key second the that mentioned. just the

I focus platform business to to really points in leverage to did core years the to echoing have we think And plan, the a we to serve of efficiently trying serving we to offline customers I the Huize Days we still that to on the data that are initial customer differentiated time, customers, calls would for extract think over we’re earlier, the last customers initially give high-value has as we have the phase of our as online the for in made we this all segment think our XX on well us of subsequent testing are pace existing higher-value able a more this given market plan. Because internal business of Huize. that use segment. and be products updated at will out progress the I or us we’re like Investor rolling this products keeping as given high-value new

Operator

[ph] the [Operator Investment. next of from of comes line Instructions] question Your Independence C.C. Wang

Unidentified Analyst

[Foreign Language] Hello, hear can you me?

Ronald Tam

Yes.

Unidentified Analyst

online Huize has to I was performance, Okay. price Thank leverage meeting you. a as aggregator, have to profile financial the brand surge understand holding? achieved it’s [Foreign remain before Do Language] recent the We that and high overseas although well-known insurance users still you and to that agreement there end tap low new a think itself our record the Huize a So brand enhance But of into investors. to downturn. now. itself since with that not Huize But anything customers. to users till

For is cap to has comparing tech Does already awareness insurance company U.S. and CNY eliminate a estimation? lease like up have exposure Huize Its market company CNY only a revenue. example, adjust that it any cap XX investors similar billion. the plan to to XX,XXX

Ronald Tam

a our IPO, stringent these take that to is XX questions advertising up our we think And that have achieve the to overall the for And that build able space. to on like around brand the have I’ll scaled to say in that has the it today. first on been market, our here. as really the is we business brand very I channels the team. stringy where budget, or Ron the very over is It’s about we market. And years have And our today we proud think where I question before been on that this for platform on thing years. marketing you. on leverage ultimately the spending that built enabled the to the Thank company think way and recognition I limited consumer social therefore, in have been we the on can devised us capital support business it and in media we very partners have listing model U.S. a has we for

this think big achievement. very I is itself a

really do more there’s capital And the we a year So presence and the of branding well earmarking the recognize we of and can market more in of building obviously, new we as work as still consumer XXXX, lot that done, a brand side. think more on lot funds be to -- markets. in we in terms I are now up bigger the a

to answer have under that radar I year been the I as reason has over the at couple question, why, And question. think the the external that’s a bit for of a the we the first last factors the well. So second play guess,

I timing And the think January get various when the by last hit subsequently, unfortunate Chinese we actually relisted, as of IPO in things COVID-XX this first of out year. we broke well. has were we were at outbreak, happened much and very after COVID to done

to been the investors performance you recognizing have of ongoing at I story, think company I has see thank Chinese a and with the ADRs the being confidence of market more a market sentiment we Coffee board in also more out has has improved to to But investor have For the guess. investor our of on frictions for work stocks. can has the And doing crisis to the towards X over overall are then to company the been which have in market in been that and significantly. in the U.S. X also the the depressed you leading reputable on led slightly the doing we financial in and stock constant dialogue then Chinese very the with liquidity example, also the last and the And work we months, in the last seen X have lot scandals we X U.S. surrounding smaller over months. institutional led U.S.-China Luckin trade And marketplace. a that investors capital to prominent a

lot we this can to more improving, been in Investor higher recognition hopefully, be coming liquidity create I investors. the the a outreach, to the the level So think a terms better investor a year stock for will bring also that of Relations, overall markets we capital in doing and much have and

Operator

to no at are hand conference questions the closing back our this for there remarks. As I’d to time, further management like

Ronald Tam

very you quarter and call, XXXX. the for participation, next of the joining much. quarter this for the look strong and first you very much, appreciate -- Thank second we Okay. everyone, forward Thank to call

Harriet Hu

us you today. joining Thank Thank for you.

Ronald Tam

you. Thank

Operator

today. Ladies does our conference Thank for this conclude you for participating. and gentlemen,

may disconnect. You all now

Huize Holding Limited (HUIZ) 10 Mar 212020 Q4 Earnings call transcript