HUIZ - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Huize Holding Limited First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, there will be a question-and-answer session. Today’s conference call is being recorded and a webcast replay will be available. Please visit Huize’s IR website at ir.huize.com under the Events and Webcasts section.

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

Harriet Hu

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

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

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

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

Cunjun Ma

quarter, from year. by same achieved According XX.X% period increased billion RMBXXX.X of insurance from X.X CBIRC, of by insurance insurance and China, XXXX seasonal Hello, maintained health segment strength for the in thank new in an and for industry Language] Among transition life first driven increasing all the the sector by health between – quarter percentage the of caused RMBX.X growth, and illness. steady insurance better everyone, [Foreign last quarter, China’s Huize’s vertical points released income to last the data old in increase earnings year-over-year the definition situation billion. pandemic joining In call. market period the market conference you first insurance statutory continued the first demand and improvements to premium the the

of capabilities, record share. backdrop X.X industry steady transformation nearly been achieving Language] total to RMBXXXmillion, highs. its on progress continues our core greater the market quarterly RMBX.X year-over-year GWP times With while Huize platform by Total billion, strengthen on long-term digital both to it’s capture doubled strong operating revenue accelerate [Foreign insurance facilitated Huize has our to fundamentals, and increased making strategies.

commitment generation, threshold of is focus higher we younger the on part driven insurance As a health insurance main for our This sales. long-term to policy online chose strategy factors. long-term to by providing with offering policy first a for three

often terms service to easier insurance our as period longer payment long can for platform, our or is, making XX increase interaction even and as illness stays user critical be policy establish stickiness. the longer XX First, the The the user on and it trust years.

needs mature into age emerge. as and users more entering Second, stages, younger will new insurance life

example, the Huize’s they children, start such a For opportunities value. operations purchase illness they needs are their repeat when long-term users’ naturally critical and education will user and creating family, as savings generation evolving core for consider Serving insurance. in of coverage insurance

to activities few us and also value our preferences user while would I growth from on behaviors and adverse the more user to the working the to highlight user of us to indicators purchasing Next, obtain allows long-term Third, providing foundation like create enable higher insurance on selection. needs, key planned profiles. presenting Language] base. products, insurance a [Foreign a in more that us user relationship share a insights deep accurate data These generate sales

profile. user our First,

old, demonstrating average purchase products approximately XX.X% age insurance long-term first cities this years and from of of cumulative were number insurance clients XXX.X Among in insured quarter reached of million higher-tier cumulative strong quarter, X awareness. clients who the As insurance and their insurance was end, number the clients was million. XX.X the

The average distributed was year premium RMB side. second first for the X,XXX. first the In average around long-term policies indicator is the ticket quarter,

persistency our the in months XX% of we life XXth is from for user that have traffic. business XXth maintained indicator four long-term and the third user competition instead quarters. long-term at ratio. health second for persistency Starting quality The Ultimately, and quarter insurance insurance ratio last for is a about of the year, consecutive believe

in of both continuous as customer in highlights the Our our profile. insurance statutory Language] challenges conference, the a effect new through [Foreign our April, held customization consumption advantages of and and we into user and in revised continuity average and first insurance definition experience product quality improvement our market. Leveraging upgraded the after our the of online industry went well opportunities In the we to quarter. supply. in products differentiation launch ensured product positioning customized perspective, are and thousands, From launched sharing our the illness capabilities, product eight suite first our critical targeting product illness new product as our the definitions grows of demonstrated vertical business quality for capacity the user of soon a of years

mandatory protection, Language] In to in the the a helping for well is three the product, offers China tumors. medication room most illnesses provides long optional, additional insurance, of additional Different it Furthermore, XX% limit clients moderate targeted immunotherapy staffing and critical whole up illness Meanwhile, policy. from to of waiting market. X plans, can the long-term, we severe of for receive for function savings critical safe greater and payments illness to stated amount insured insured, which subjecting waiting drugs will the coverage and products Glory, another flexibility. cancer and insurance, by still The each with the specific period a three traditional both endowment more Moreover, as mild, yet believe drugs. life continue such customization. life we years clients as example, explore is insurance there single demand and provides break coverage a maturity it’s for this Darwin product one-year period, plans with impaired product and information new-definition system and malignant during For our in innovation certification, high protection sound technology In certificates providing other authoritative management includes in as will to acquired services have claims R&D, offline order quarter, products life on innovative system services. quality R&D established information develop of Huize’s a qualifications digital our insurance strategies, including we [Foreign the our and in continue the standard team maturity has to the provide the And we transformation, certification. and Regarding products platform, users three of multidimensional management information and critical management products, users online and were CMMI into in we children’s quarter. put selected Shenzhen to in with service and products and level our our trial certification, safe [Foreign refined value-added on data terms recognition and during technologies accumulated security based illness security. technology products, optimize user develop user purchase achieved capability. signifies by driven our center services. for R&D Language] operation capabilities efficient successfully Such Target multiple

by corporate offering and last-mile are program the implementation of and and who local business environment. has higher contact traffic the industry on Internet of always Language] potential convert. governance differentiated as with the offline in premium conversion we coverage online [Foreign online to offline By strong insurance high-end is have foundation China, connecting official of products, sustainable platform compliance endowment product insurance regulation and expected aspect our With a Our of Maintaining purchases healthy management. initiated health in stronger demand services. an such family important more the insurance demonstrating Huize’s solving insurance, met been thrive the laying users insurance with to team for and

development, strive my I will insurance now technology the transformation Mr. will achieve and quarter. policy offline high-quality of of provide our users we the Tam. channels. development diversified solutions, continue personalized insurance remarks upstream to our enters He overview fast capabilities, with key and services empower take through more As presented forward. a downstream online an focus and operational core by This today. develop users, the call and prepared Huize data digital accelerating efficiency technology; both and the the Moreover, with and products industry; will of and CFO, whole healthy our industry want phase and growth insurance sustainable turn improve opportunity the more Ronald and provide Language] partners to ecosystem to financial for over concludes [Foreign for mature the going and highlights on

Ronald Tam

and Thank Ma. and Mr. everyone. hi, you, Harriet,

in another our as well to on report for GWP pleased operating platform the We’re record quarter terms of facilitated revenue. QX very, total total as very

factors, billion RMBX.X the represents premiums quarter performance period during of seasonal first industry in the is push or demand quarter, first the of year-over-year. In very a respect growth from month RMBX.X particularly really January new accounted particular, The GWP, credit strength for period, million the of unions in RMBXXX.X which the to the as on well total with regime definition in representing kind one the consumer total GWP the of strong to in XX% result transition year-over-year. for as consummated approximately growth X.Xx operating year a the in old the spike amounted start billion, the to which auspicious of traditional industry. strong FYP, or, first For of FYP, X.Xx in hand, total,

the attributed channel more long-term and On market result terms acquisition in really our far. focus quarterly to capture can quality aggressive the and partners. on share of believe vis-a-vis customer given insurance acquiring shown paid service to quarter that be order spend And competition. disproportionate customers, other we hand, the efforts FYP high strong marketing to so our during growth the in a also our has In both fees the

XX% accounted year-over-year billion renewal XX%. increase RMBX.X million, of representing for a In of RMBXXX renewal terms business, or of the total GWP, premiums

which on value of for very XX.X% We products and the quarter, increased As about during contributed very to strong to are persistencies the maintaining Ma the efforts our quarter. XX% metrics, of past distribution. increase to annuity that demonstrated consistently high critical plus is from months and FYP touched long-term as persistency life earlier, drive XXth our of savings was persistency believe the our distribution has approximately have insurance report proud continue quarter. during we In by we customers, first lifetime we products XXth

of one able accumulated with having We products XX% products, users have more savings customers repeat to our on purchased platform. savings purchases existing policies or about been before our from for generate

earlier, to market billion. terms market insurance by year-over-year GWP as marketing well proactive XXX% for mix, as the in RMBX.X to share, product quarter, as factors health capture a strategies to In increased due of long-term first industry mentioned our

last representing and for insurance our for company reflect well-known co-developed with increase During which total XX partners RMBXXX long-term And from GWP. year, developed of of critical the best-selling our to Insurance, upstream same products, health Among year with products total for which approximately of GWP is XX% number the and distributors continues in for quarter. the million, engagement approximately XX.X% first which with approximately Darwin period most industry the our we of accounted contemplating were Life insurance for an accounting X, life the online, quarter, products insurance GWP premiums million RMBXXX Sinatay illness of them, partners. points percentage GWP increasing

to on earlier. the operating previously our revenues Now our Selling to attributable expenses is million, income during salaries investments is marketing we, for expenses the quarter. by increase due market our to increased XX.X% compensation benefits, year-over-year. increased demand our the products. increase year-over-year expansion primarily to by market to The million, service opportunities expenses expense employment increase increased during mainly decrease The GWP office which expenses quarter given critical almost Total on driven – RMBXX.X R&D the and XX.X% of revenue. share-based G&A which increased a in again in an increase attributable channel up for guidance by well back to the the in rental Xx grew fees call. facilitated quarter RMBXXX year-over-year, for which revenue brokerage the driven and the for significant XX.X% also to capitalize were million, G&A RMBXX to expenses by turning analytics year-over-year by quarter our and advertising to in high, increased quarterly million, total year-over-year. attributable in again, conference R&D spend for RMBXXX the increase due for QX aggressively which the Cost the as of data to to by partners investment headcount. in XXX% QX during increase This in spend and quarter, a million. was which year-over-year, was record primarily marketing offset to RMBXX.X XXX% selling previous our is sales revenue increase primarily was paid increased the increased in quarter primarily an increased in by to was overall in continued as illness as and and outperformed by

GAAP the have profit exclude we share-based profit million. a recorded net we For was of quarter, million. compensation, RMBXX.X RMBXX.X non-GAAP If

as financial combined of continue cash approximately We to and a balance liquidity a of of robust position with end, cash relatively maintain equivalents million. US$XX strong quarter and

traditionally insurance products QX a Turning to our the demand year essentially note observed total advance RMBXXX expect guidance. million. to absorbed as QX We range operating is illness And that to the we quarter Chinese million We QX in been industry. has that for slow for critical during of period. currently QX RMBXXX flat revenue largely in is be for last market

with Xx year-over-year and includes reflects growth the globally. market uncertainties, it half the on concludes ongoing half the preliminary the change are This subject together conditions, which views last our today. Taken our represents same and to for year. of caused prepared pandemic guidance operational remarks COVID-XX that, revenue With various which Company’s by the versus of QX, first forecast current conditions

up the now will open you. We Thank to call Q&A.

Harriet Hu

Operator, Q&A can start now. we session

Operator

Please comes [indiscernible] first ask [Operator question Securities. Instructions] question. from of line the Your your

Unidentified Analyst

translate [Foreign will Language] question Okay. English. I the into

And and how for from from that the how company’s So if the share? And very also, of he clients, that strategy? new that the what’s [indiscernible] was know to he to wanted much first customer know to is quarter available customers? coming the know he company any company’s And acquisition want also, is good. regarding data asking are that wants can repurchased repurchase GWP agility following the that there rates the much

Ronald Tam

address me here, let for Ron the and It’s question team. Okay. this

purchases. these increasing efforts think in our quarter increase I of repeat savings our just customers savings values shared maintaining of prepared mentioned related remarks And terms that, I life-time of engagement around in the that approximately the for we from customers. FYP think – first around also we’re definitely comes I repeat existing and with products. and to our XX% coming from trying purchases, also XX% in products that And

of So numbers, the you idea with of are let’s have repeat purchases. those than can customers roughly, an basically two less say, XX%

room a in and this growth of think this lot still area. I relatively is So number low definitely, there’s and upside for

before we’ve to still before And think, a in our and that making Ma data the and trial company I target, is been we and the I up platform. or into the drive the, has insights for market. to our precise values we more customers, the increase the offline customers and established from to mentioned acquiring think on repeat analytics. to through have that strategy, mentioned drive for right customers critical data market, we with sure existing the phase. these is years been towards LTVs point we that last efforts engagement spending, that very that’s this online the clean the bit three and scaled of efficiently are heavily of we values piece very that initiative have, pursue guess, agents, going have I or it us so on long-term starting been And definitely have But the much we that have now, life customers empower customers. to with obviously, time up R&D purchase And our the ramped investing asset new why most the consultants also also to our

the the I established happy answers more I we when plans. business. that a more And critical trial reached have to really share with have to in metrics that Shenzhen scale be details, think guess, will We question. the up team not we Hope market

Unidentified Analyst

Okay. you, Ron. Thank

Operator

Your of CLSA. next ask of question comes the [indiscernible] line from question. Please your

Unidentified Analyst

which the [Foreign question regulation internet for year. insurance is My be sales, new to Language] next implemented expected in related the to January is

are terms requirements Within there the also pricing and in rule, expense of some ratio.

you. what expenses. placed wonder kind measures the on have just I Thank So corresponding of

Ronald Tam

the call. [ph] joining Edwin Thanks, for Great.

a partners. you new with well in this companies, response the side mentioned, So think we’re both regulator as I is importantly, quick our I think, respect to With right actually as regulatory just that obviously dialogue industry it’s insurance rule, the constant consolidative questions very more to in now, still which phase.

Although there’s through passed or a effective likely being being of and enacted year. next

coming to that, when we And we are be stage. guess, first is of cetera, compliant and to operations what ready think I confident this respect key. impact. platform so at the is pricing, as certain are this to we bit do be I is et systems a own quite that terms in a of I forth, try rules think still to internal can our industry upgrades lower able the With all,

time have I think I for with products the with a our of think structure. industry, track design, is that upstream as demonstrated partners. company through strong And we as relationships the still insurance pricing our But product partners have terms to critical whole, of years very Huize our and we of customizing in has therefore, aspect terms reach in record consensus.

cope very think the maybe the to brought regulatory changes well with changes. are about I manage we by and that’s positioned

Unidentified Analyst

you. Thank Great.

Ronald Tam

you. Thank

Operator

question CICC. [Operator of the Instructions] ask question. Please line [indiscernible] comes Next from of your

Unidentified Analyst

When trend taking how would for [indiscernible] seen have second considering caused question. effects do fade critical CICC. expenses? increasing the think My you away? effect My first of negative my expect the marketing the switch question definition. is, profitability by [Foreign do you Language] of Thanks some this we It’s from is, unit question

Ronald Tam

here. Okay, thanks. guess Again, call. thanks I the for questions two joining

in marketplace. during in the a of I quality I the products demand in was And think period. for upward the And to proactively the during quarter think side very CI and the for market seen of that’s cost period company. the a market. first the of customers products the guess, in effort things. a brings lot including I the, old think the also industry tried the of business has good that And lot I participants, reflected spike us definition the in think good to share has customers, ourselves, the capture trend relating really first that well I significant The Definitely, long-term

sales products think, quarter scale-up long now wait I this I of part in marketed when new to become, more and well I to market, we on the being stream definition the for consumers. products the and a probably time later the by really think the need the and market until come guess, the for being that period by of understood are

that more critical the illness of the think we’ll and the in year. I the probably So third of recovery distribution year see June into in product month quarter

So I the question. first think that’s

the the our question see In second you terms the in that view revenue on with of platform’s scalability in our strong growth first the think I XC on business. can XB quarter of and terms also demonstrates and profitability, that both

able the forth. so our to investment a in a headcount growth quarter such and really achieve in We single significant without have increasing of lot been

So the scalability it leverage demonstrates and also the business. operating for the

shown have that quarter. We this also tactical been have we

as the our that, few Going see from definitely, be very slow quarter QX next will think you in forward, a guidance. I can quarters,

very So profitable. likely QX is not

a balancing objective going we dynamic think I rest the growth forward, and of us, think how for that, the will would be see major as for evolve, will that comparability market I year.

Unidentified Analyst

Thanks.

Ronald Tam

you. Thank

Operator

Ehsernta from question. ask Please of next Fu comes Citigroup. the from your question Your line

Ehsernta Fu

[indiscernible] we platforms we know any second, the the to mutual business been Okay, identify whether [Foreign which understand want new on thank it and continuous certain – gives have operate means of in. point obviously, impact I sale, in lastly, And clients. would of other rise on that like plans, Thank of if effectively for our from if we And impact it, is some to you. you ultimately we question the have medical now And customers. Language] you. us the aid that can business we it approaching instruments is hand, first So see lately. give because suspension to we

Ronald Tam

I Ehsernta. there. had you, you guess three questions Thank Okay.

that’s first question. the The QX. question guess about I

So have platforms been mutual have obviously, players shutting the market aid seen we various that mutual aid programs. or down

development this is healthy industry. and the overall, long-term realistic think, I of a the sustainable of very reflection

customers bit. And regulators users mean taking on a for be products focused not on think But profile Huize, very these insurance – I overall, what or user most core a focusing targeted I in we guess are should segments the have that long-term the think the laser And are strategy. I of tropical as this marketplace. think, stance platforms, the it we maybe our for I for competition been looking aspect. exactly the the alleviate little may

terms will the be in our to strategy. I impact So of the relatively think business limited

question. first the that’s So

The second government initiative. impact question on this cleaning by on and the new

commercial encouraging of in the I audience terms think target should family. is advance and directive, is customers. themselves age overall, who reimbursement awareness of to I it a are the general clientele promoting standard propensity and or or protection insurance that for really people the or be not medical for populations here, bit very Again, insurance procure kind maybe insurance more the think the which an who people of a are

medical But side, And might health more insurance insurance life think I reimbursement have new on I the the we that may for it ourselves, that short-term on that big on with our critical product are business. not more to products, illness more, and long-term the products. government, this think policy focused very the affect a like platforms the So on respect are the with from necessarily this impact side. again,

high-quality protection focused young family. – the own sustainable for and very for people higher-tier on education their age of desire and So background policy higher and income level relatively with would we’re again, the targeting are we relatively who cities a better customers, are

is the regards a guidance, that with reality. third to of QX reflection question on the So think I guidance

facing quarter. top during board, five this incumbents seeing the not ourselves but across are the are particularly headwinds market, weakness in the with country the respect we insurance incumbents. think in some I The just to

absorption in this quarter. the first has demand with do illness so-called really think critical I of to

again, think for growth So And the as Xx. a together, whole QX guidance. our of of still very revenue a and half almost strong I sticking think still second company’s to giving taken we’re QX year-over-year the of is year, I I practice quarterly think

that until the year. the you. of to will on think I quarter we wait Thank So further rest give next indications the

Ehsernta Fu

Ron. you, Thank Okay.

Operator

from Your Xinqi of comes ask Guotai. line next question. Liu of the question Please your

Xinqi Liu

[Foreign some Language] management I Has competition i.e., insurers has So the just comparing question. platforms? shared have these one about Thanks. online and views the other with landscape, traditional

Ronald Tam

Okay. Thank you, again.

think our question on or So I offline other the the competitive guess, competing more traditional differentiation the of I versus brokerages. platforms Huize the,

I business we think very efficiently, to which all, think – on genesis I everything ago. from is focused first the and more of that years our are technology mix XX utilizing model help of data

I for value we the money themselves. some for have comprehensive best some, and suite providing to the of contest customers really think points compare them products providing marketplace, product pain about products including the products for that to the in and select themselves tools get solved of more to both with

the being and are faced more a consumers. challenges I respect with players industry to offering force agent by maybe some to of the maybe think product are aging homogeneous of the the traditional

is is from the that best get So we perspective, guess, factor, we for their critical, very the which allowing guess needs. standing own I the customer’s user product other the differentiate to base depressing have. I insurance by

customers high-tier these these with of average of most very China. XX% clients important XX.X And are now are on in cities age have young users Both X our all, the our accumulated million We coming years. of of from in platform. the platform,

always with think relatively I to been ticket respect our So product strategy, targeting we high that have size.

develop long-term able to We base average quality a deliver are marketplace more been marketing the at and a our through together with us able company that we with quartile user generate working the given to and the top maybe And also also which is for have online additional reflected in innovative XX%, insurance to we disclosures size ticket also suitable our the ratios I consistent that RMBX,XXX, market. now products probably and partners acquire for at policy the have that think, is confidence more to channels. in the persistency of

Xinqi Liu

Thank you.

Ronald Tam

you. Thank

Operator

Halsey from your Your line Please Wu of Group. question. last question AMTD the ask comes of

Halsey Wu

Difficulty] [Technical

Cunjun Ma

[Foreign Language]

Halsey Wu

Difficulty] [Technical

Cunjun Ma

[Foreign Language]

Operator

no As the conference for the questions. to the remarks. there back closing are I’d management hand to like

Harriet Hu

for look joining you. with we forward Thank seeing next Thank and today, to Hi. time. you us you

Operator

This for conference Thank call concludes today’s you participating.

You disconnect. may now

Ronald Tam

night. Good Thank everyone. you, you. Thank

Huize Holding Limited (HUIZ) 18 May 212021 Q1 Earnings call transcript