Huize Reports First Quarter 2023 Unaudited Financial Results and Revises Upward Full Year Non-GAAP Net Profit Guidance
EQS Newswire / 30/05/2023 / 21:56 EST/EDT
Huize Reports First Quarter 2023 Unaudited Financial Results and Revises Upward Full Year Non-GAAP Net Profit Guidance
SHENZHEN, China, May 30, 2023 (GLOBE NEWSWIRE) – 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.
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 Relations
Media Relations
Christensen
In China
Ms. Crystal Lai
Phone: +852 2117 0861
Email: [email protected]
In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: [email protected]
30/05/2023 Dissemination of a Financial Press Release, transmitted by EQS News.
The issuer is solely responsible for the content of this announcement.
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