Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Huize Holding Limited’s First Quarter 2023 Earnings Conference Call. [Operator Instructions] Today’s conference call is being recorded and the webcast replay will be available. Please visit the Huize’s IR website at ir.huize.com, under the Events and Webcast section. I’d now 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, first to quarter operator. call earnings for the of everyone. you, our Welcome conference Thank XXXX.

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

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

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

turn I Mr. Ma. over to now the call will

Cunjun Ma

thank clear ecosystem. actively consumption comprehensive showed online service offline you improves, and China’s of first refining gradually quarter as Huize’s industry to the of joining call. business confidence insurance In everyone Hello, the XXXX signs this to by earnings leveraged quarter our strengthen insurance and integrated recovers economy our and XXXX, first revival. consumer and private positive conference trend We strategies product offerings for OXO digital the

set first Huize in of result, XXXX. the another reported results remarkable a As of quarter

double-digit facilitated billion, increase. our a non-GAAP revenue or premiums period. platform reached Total written sequential net GWP gross operating on total basis, the sequential profit XX.X% achieved all during a and growth marking RMBX.XX On GWPs,

X.X% Our total quarter. net and in RMBXX.X XX.X% operating million and also to the and profit first non-GAAP RMBXXX by approximately quarter-over-quarter million increased revenue

the At insurance FYP to the million offer marking above we competitive first products also the long-term contribution XX.X% XX.X% mix, XX.X%, on of and product to long-term or our XX%. million million. savings and product strategic XX.X% RMBXXX quarter FYP to focus have time, growth, by respectively, by rising our sequentially health increased from benefit increased year insurance sequentially billion. RMBXXX long-term products offering. products premiums on established, quarter-over-quarter same consecutive approximately and to our edge driven of distributing the continue highlighting platform GWP growth we RMBXXX insurance product premium RMBX.XX Renewal demonstrated significant our terms by by In comprehensive quality facilitated high and XX.X% XXth was

end the number focused insurance products. first clients insurance of customers remain on At the high-quality We reached for our our targeting accumulative X.X million. long-term quarter, of

age the with tier average long-term were about During from higher an insurance XX.X quarter, old. cities years of customers XX.X% our of

the of size RMBXX,XXX terms and indicating in long-term value ticket user during of unlocking and the the FYP, success a was in In insurance users and demonstrating our lifetime RMBX,XXX of products approximately average savings positive our engagement. quarter, trend products

both and XXth XX% of our and cumulative for our stickiness continue more generate at show ratios As strength long-term the months customers in high XXth level to than high of insured levels revenue of high-quality February, a persistency and that stable remained insurance industry our partners. for indicating Huize

quarter, end have XXX of we cooperated As the with first of partners. the insured

the and the Zhu generation protection younger a and Ding Tao a coverage for Xiao increasing of mortality cater insurance to for Hai product critical insurance customized a needs response gap, Qi protection children in quarter, we No.X, child which demand illness customers. huge term of the life product customized During launched insurance both No.X, to

with pension joint Man an the and policy insurance the with for planning product inheritance to option whole Jin launched increasing between and Zu customers No.X, needs. insurance single we Additionally, convert Yi providing life flexibility

by customized by customers of the medical In renewals popular with GWP. customers years was cost-effective that both Health GWP XX.X% long-term the guaranteed and also accounted of medical first in named was insurance one well We policy and intermediary discounts co-develop partnered product on a offers Insurance to An, Xiang XX insurance products insurance industry most quarter, the deductible This product for An and received total for XXXX. Chang family subscription designed products benefits. our Ping family of

sequentially. be and first our customer optimize gross to quarter, we structure. strategy. margin continued a maintain management our organizational attributed X.X reduction OXO cost The by integration our points XX.X%, and acquisition due effective can In reached the user up refined our Meanwhile, to successful percentage in increase controls to cost

our a decreased declined and selling expenses ratio a expense percentage year-over-year points by operating by As result, to income our X.X basis. year-over-year XX.X% on total

maintain approach forward, Moving disciplined sustainable achieve growth. we business continue will cost to control and efficiency improving our to operational

in empowered ecosystem product agents have To-A We into with we XX far, by customer teams filtering also capitalized In first strategy on our offline during and rolled service out deepen Thus them our opportunities offline independent online market and successfully of quarter. segment, the insurance tools regions key purchase, to service presented needs. the OXO-integration we nationwide. service the insights the real-time established

first million, FYP demonstrates business deliver enabling regions. operations and the We one-third facilitated strategy from the our with RMBXX.X we Moreover, engage business efficient acquire business utmost quarter, importance to and XXXX, which equivalent agents increasing in FYP of customers our offerings of localized To-A reached these In the overall commenced the services. to growth. also effectively by To-A regions our them the provided to To-A support more insurance the with product expanded professional in to have professional and

products demand and suitable effectively services. focus our most refine emphasis strong scenarios we customer on that customer To us and segment, and continued strategic operations better to XX dimensions recommendations To-C the on compliance of algorithm across retention with four demand indicators integrate analyze customer activation. the customers, a deployed distinct sophisticated and have targeted to acquisition, allowing of our we In across the various serve make

leveraged In through quarter, customer we and we system XX,XXX XX,XXX strategies targeted and to more and track promotions, more customer behavior and branding comprehensive feedback activities, first our and addition, than develop conversions. sales the reached analyze CRM customer than users follow-up engagement tailored outreach, In achieved solutions.

As customers as agent their act insurance the will market digitalization To on of products strength such in business our as model the industry OXO-ecosystem and drivers, and integration reform, services leading strengthen intermediary the this our insurance deeper core new most the independent the partners growth with are strong cooperation will capitalize processes, will that trend, undergoes insurer and enhance platform, areas drive experience. our growth consolidate as the to intermediary future. operations and gradual we our confident we insurance the with suitable provide meet needs customer to in sustain strategy,

Our to needs growth. protection fulfill profit is customers, the primary our while achieving of net goal the sustainable and long-term revenue

my to quarter. I for the financial and turn call will provide of CFO, will remarks our he prepared concludes today. the key Kwok now Mr. for our Tam, first highlights This an overview

Kwok Tam

Ma for you, audience the the zone, Mr. and those and good to U.S. good Harriet, evening morning the and Thank in in time Asia

improving is a industry in and quarter, in income. In confidence with gradual which recovery, experienced consumer insurance the the line household the China first

trajectory. far around sector-wide overall GWP quarter-on-quarter XX% our improved the number have on our a reached operating We and RMBX.X distribution increased in market delivered a trillion. XX% ecosystem, year-over-year year-over-year As outpaced platform, growth omnichannel written have outperform gross facilitated which billion chief and X% Leveraging in the growth to a that conditions we quarter. premiums business has total RMBX.X first

the which new also end customers brings total QX, number our We in to first added million by quarter. the the ecosystem have to X.X XXX,XXX of

to a recorded guidance second key on of net have out business million, us can given full the have RMBXX net straight successful the of execution be we strategies. is our which non-GAAP year period, last track RMBXX of million, profitability, which profit the success This market of to During the profit quarter. meet quarter putting non-GAAP to we a attributed

Firstly, we consecutive strategic from for XXth products at continued about products, the on focus XX% contribution the remaining quarter. long-term long-term GWP with insurance our

extensive agents technology. offerings omnichannel to generation and product Secondly, target insurance advanced and we new continue empower our distribution high-quality throughout platform, consumers

the To-A, focus throughout And lastly, cost organizational To-C leverage. on generated leads to of the further solid over FYP increase line which million business year-over-year RMBXX Our with quarter, enhancements a alone structure very continue savings improvement cost we XXX%. to first quarter total operating efficiency in a of representing an

key recap and from now operating will highlights the quarter’s takeaways I results. this

increased XX.X% and XX% renewal driven First, premiums total was This by GWP in by and of year both sequentially, RMBX.X respectively. increase growth reaching billion. premiums XX.X%, quarter-on-quarter a first primarily

high for ratio long-term an at health persistency industry level. our life made insurance we Second, and

in XXX month our savings value customer first for reflect February, ratio stood positive were and the engagement average at convert our As efforts This high insurance persistency upselling XXth and These ratio month base. size XX% stood of and third, quality driven XX%. long-term our user quarter. And was continues potential our at products the to the RMBXX, lifetime by ticket to the also XXth of continuous overall deepen persistency sound opportunities. metrics potential primarily the

we increasing insurance this recovery notable category FYP for saw quarter, first products the with a demand In health in long-term by for sequentially. XX%

solidify insurance products maintained quarter. position segment. in our in also savings contribution XXth our long-term products market for and that remained XX% have The long-term the market GWP We leadership of the above

the our in reached needs more in which ahead, balanced the and long-term increase sequential first customer between which anticipate health RMBXXX dynamics revenue, million our the operating the in recovery XX% long-term with categories, quarter. helped China FYP total context. product in The drive savings a market Looking mix we with and aligns evolving a has

group-wide improve our our tightening our and on focused and and very remain efficiency. to channel profit structure optimizing costs We margin marketing operational

in expenses our – rising improvement a by from to has a revenue RMBXXX to XX.X% to at our quarter-on-quarter in decreased margin As XX% gross led QX. healthy year-over-year. in pace This a slower million. increased result, QX In our XX.X% operating total in QX QX, cost XX% than operating

to RMBXX in GAAP profit and X.X%. net were translates a net quarter, non-GAAP the Our non-GAAP and first profit this both of approximately million margin net

maintain approximately And our repurchased this year, management’s confidence equivalents repurchase open by March end demonstrates as to the a repurchase market our quarter, quarter, long-term of of which share we as and growth in continued the the of under of evidenced our have existing of prospects. million. cash RMBXXX the ADSs, cash model As continued of XXX,XXX from combined aggregate an business balance end program. year-to-date, We’ve ample our liquidity continue we the in shares to first and

new OXO This China. our should forward, us market of will strengthen we integration in top-tier Moving high-quality ecosystem. as intermediary gain share the a our among solidify insurance generation and consumers help position

focus our insurer products and scenarios and We a providing agents all will independent partners. on empowering range across services also wide and of

As we business shareholder will resilience. achieve strive to our capital we improve our effectively, sustainable more allocate and operational efficiency enhance and value

the ability regarding attract our our new first recovery profit a domestic of economy, optimistic operational million Now year. conversion of an anticipated in quarter, we China, not consumption and should industry. turning and expect sustained which for and our the in less the currently net to a remain mass to insurance improved guidance and revising to better-than-expected in efforts in efficiency, performance light recovery, boost in our macro outlook the to to outlook are We RMBXX and activity continue consumer confidence non-GAAP the our the With XXXX. provide now affluent in sales upwards consumers upselling achieve than further

we to the to – operator. up call Thanks, that, now and we you, close with open will over And questions.

Operator

CICC. first you. line from the And question the from Thank comes [ph] Instructions] Yuyu of [Operator Zhang

is open. line Please question. Your your ask

Unidentified Analyst

questions. product two about first And I’ve one got current the the mix. is

the We give previously, China’s to mix And quarter? for So insurance about some second know products? estimated you What’s the proportion based insurers on one on FYP first products. regulator offered momentum. more the times has is in saving product of that the growth newly details launched could us lower the

that earlier sales in saw recovery product in in of And our call company the we conference end on are noticed the what’s at weeks? So May. that savings recent the sales now health long-term momentum a first we quarter. mild product mentioned you’ve And

a recovery? still there is So Thanks.

Kwok Tam

It’s Yu. you, Kwok here. Thank

think I first So mix question quarter, it the product regarding break the FYP we in down can that you. for your on first

life total FYP. of that, term million coming coming So RMBXXX million RMBXXX from products. so of of a and roughly long-term is from have protection, we And health

that represents XX% RMBXXX growth. number million quarter-on-quarter about So

category. the RMBXXX roughly savings also will space which some segment, recovery health from So annuity life long-term is in that increasing whole category the the sense give includes and you million the and the of long-term

that quarter-on-quarter QX. So, by versus number has XX% increased

So FYP QX roughly savings. roughly is protection, from FYP is around of in XX% XX% of from the the long-term

So that the question. will mix be product

trend and so-called the question from revision to X.X% on With impacting that respect to how second the the guarantee downward on X.X% return sales.

to the are second I of we product in seeing with imminent have transition sales quarter momentum to X.X% we increasing what second probably seen respect quarter the think in is actually pricing. the

should versus especially So we to increase a in have annuities the forward seen I going is to think quarter second are quarter we that of in in larger into expect calling in well the But QX, of one. see half sales a China, pickup [indiscernible]. probably is then year, we date this product seeing two as what

expecting seeing the protection be a as the product half likely category actually this would is up we’ve the XXXX when half, the whole second from the mix product will we’re the into life the to early of consumption see And savings transitions think be year will China. savings probably and mean as there second So industry in balanced annuities. the momentum. market picking seasonality And momentum the we trend increasing product continued an terms more in second effect should then that I of product first the from between quarter, be in savings that seen category. half versus in probably more what half the for mix of towards But that’s the second for

So be second question. the that will

protection question was definitely from China. from product standpoint relatively the the QX last QX And a definitely macroeconomic challenging a the third year. very regarding QX, recovery health, long-term robust momentum. in of see we

recovery. of with confidence So over income recovery probably overall QX, increasing the been has consumption. with we Insurance see household that confidence consumer in beneficiary the

momentum. we’ve recovery amount quarter QX. then So absolute an of QX, think the robust would continuing, see protection growth products that improvement But be the same long-term more pace two year. the that consumer probably relatively in But health to around somewhat the in macroeconomic we then increase be QX, that continued We less see would terms a probably or In in in long-term continued but recovery see lucent longer-term, we product for the level and more category the second the do as think expect of or the we confidence. QX. proportion the than I of as I of with picture health mix half

your the to third that think be I So will answer question.

Operator

comes Thank Instructions] question of from you. [Operator And Chen line the the Citi. next from Amy

Your line open. ask is question. Please your

Unidentified Analyst

growth management the on [indiscernible] from such first congratulate And to first, is a This robust Citi. sequential quarter. I want the in

very whether it Thank is the And with relatively the actually look income. in channel growth do the agent wondering, well to on at? products. looking for regarding year-to-date. just accounted to what a channel? actually, I’m terms the independent quarter. with going question on are we it’s GWP first we your my has percentage we you. increase So brokerage basis, quarter first something quarter, If life in at But a FYP FYP first flat. second TO-A locked question wondering in robust year-over-year this and as it is of mix of in whole the and into product the third fourth I’m facilitated as kind quarter And

Kwok Tam

Thank you. Okay.

questions. two the So

we I just have response question to from question the upon the think in touched first CICC. the

quarter, increasing the product we lumped So a includes of together categories, life have as the the think terms annuities in long-term whole first increase and savings public in our life whole whole. I product the in disclosure, which

know, if first about year, has you probably the outlook we category X.X second would second as coming the in accounted the transition XX% as the from this FYP the think increasing down we X.X. FYP more come the rest all quarter. for of to product in for of see are whole than proportion that we to our And for pricing half probably of But a the XX%, landscape, new QX, quarter. XX% life/annuities higher the So from asking I categories, in

the QX, the to see quite in relatively category growth that strong. segment. from will weak in that we be complementary whole we But see of annuities in the we probably year-to-date. as QX in do sales continues So savings annuities the life see product long-term momentum increasing then a makeup

side income, brokerage So yes, going flat. acknowledge second the the question growth to the income on year-on-year brokerage that is on do we be

with think product has savings rate with versus to the I – [indiscernible] same lower from mainly the the category quarter quarter year. last that do this commission

So from contribution the has rent decrease rate I income think to in last been year flat main the the this that take brokerage year. factor performance to

Unidentified Analyst

Thank you.

Operator

[Operator you. Thank from the Securities. question of Instructions] And comes the next [indiscernible] line

Your line is open. question. Please ask your

Unidentified Analyst

an purchase strategy. first online My you question deployed have that service mentioned you is, offline

and is strategy on peers do insurance and have elaborate facilitate medicine and health you more with question moved strategy? you second could aim So major or my insurance this towards to And acquisition. to your this what creating customer achieve

your optimize cost? Thank strategies? And how your acquisition what you. customer to customer So plan key do are you acquisition

Kwok Tam

for questions. you Thank your Okay.

to with And after that model will service been on for to ground we have of the can the comprehensive time things wanted and we So respect push accelerate quite to online/offline customer we and the over country. on strategy. offline really online finally where of integrated the to I this always year, we with think be the era telling strategy, the kind question some the human development deploy market an pursue able this acquisition first now customer by resources have post-COVID

now, have human over in resources potential ground on significant already we the areas XX deployed So in by China.

for we other to the specific locations, coverage be your in respect which and know So, Tier traditional us to X Tier will with already. addition cities, which X all and necessary

to places Hainan. Hubei, We like Jiangsu, Jilin, Zhejiang, have further geographical our expanded coverage

standpoint. capita GDP are of to So China, a these coverage our areas services want we these areas are also where and representing expand XX the the regions important top from per off-line

all high-quality to accumulated illness of the customers want are interaction to service we further to of in customers, can try try have potential to reached on ticket improve have we relatively our lower years, our on the have And a which we high-value upsell have customers includes I upsell point with further locations, value million for also offline size we where for able our face-to-face a healthcare RMBX,XXX will have strategy, X.X paying products already to maximize expand eldercare customers platform. we we to put LTV and customers, the And to witnessing these So long-term services, we we services. these these therefore, products, these products, last which product. higher-value to other with includes insurance ability to kind which example, product, able customers protection further the that know of been started now from we and a X critical be think

Now we’re already RMBXX,XXX products. insurance long-term savings life the products selling at type of whole

service are continue value context, customers accumulate further And service base. we able that for able able a them our were seeing we percentages potential to or – So if were as and to trend agents premium we’re the them able connect customers will, were we an further to further mature with customer increase in who to higher our wealth. offline we lifetime

of So very element strategy. the important one that’s

is first new line second we last last RMBXXX have year, the and which million deployed seeing have that element To-A, quarter. the strategy year, The now the in business for along starting To-C already million of surpassed the we’re almost already year RMBXXX

offline to service the picked also local presence the customers regions therefore, where has the accelerate new be more region So connectivity effectively. momentum. with that will the have further local new agents our we the local can side the coverage, And local have, this that able business with up platform,

So second the offline that online-to-offline point – the strategy. will on be

online To-B, results, are last the have – and that from and a segment an So top been a leverage wealth branding appraiser over as services managing start on trying think to includes growth all segment, always in-house that the are momentum the the seen to the shown standpoint they the perspective – channels from have from product the into line five and we since our agents of we extract third-party platform the as translating overall, standpoint, provider, To-C and we’ve XXXX. to a now the which the we on partners, To-C supply now working our have empower channels, agents from overall agents synergies can into our presence our KOLs I the To-A, which quarters To-C the country that realizing in channel independent

your first that be my to question. So will answer

On like question standpoint, an we insurance not been actually and your already other but this whether investing to second elder services from also approach in regard. care. the ecosystem want on providing healthcare improve We’ve just

platform. We trial insights We’ve to we year products. second healthcare probably in investing consume mature out our in services, improve in been have the frequency testing existing further be actually of into this provide which And healthcare these will when this been half quietly also it’s will higher our allowing base our be a customers healthcare services from share and have extract healthcare to rolling our and internally. platform the knowledge are us nature customer as also they and own

Asia Another potentially point Hong at we next also that on we’re looking And the healthcare are services Kong. years, Southeast segment into expanding now X in also also expansion. is the

So to the we elements, Mainland synergies to also perspective, Hong providers provide near with MCV base the I linkage the Chinese future. that with able are product business to from facilitate Kong healthcare and in customer derive think

and scalable. information as you. prospects be we will Huize it provide further as Thank a look exciting more So I another on will whole, becomes think growth business to line for that this

Operator

closing Speakers, are Thank I any there this our no the management hand you. to like would remarks. further time. team And for questions to Dear over at conference

Harriet Hu

operator. you, Thank

concludes Huize’s to to behalf And you call. call. please still us you like in reach require So for the if on to of your team, out you we the today. team further participation any would This for and the IR management thank thank joining today’s information,

Kwok Tam

Thank you everyone.

Operator

you may conference Thank participating, your our now today. disconnect. you all for concludes for That

Huize Holding Limited (HUIZ) 30 May 232023 Q1 Earnings call transcript