Following Waterdrop Inc.'s (WDH.US) second quarter 2025 earnings release, Guotai Junan International recently published a research report raising the company's target price to $2.35 while maintaining a "Buy" rating. In Q2 2025, Waterdrop Inc. delivered profit performance that exceeded expectations, benefiting from optimized operational efficiency improvements. Guotai Junan International has increased its earnings forecasts for Waterdrop Inc. from 2025 to 2027, reflecting enhanced profitability and robust growth momentum.
According to the research report, Waterdrop Inc. demonstrated strong financial performance in Q2 2025, with net profit attributable to shareholders reaching 140 million yuan, representing a 58.7% year-over-year increase. Insurance-related revenue totaled 739 million yuan, up 28.7% year-over-year, while first-year scale premiums reached 3.204 billion yuan, surging 80.2% year-over-year. The company's operating expenses (including sales, administrative, and R&D expenses) as a percentage of revenue stood at 38.7%, declining 6.4 percentage points year-over-year.
Shen Peng, founder and CEO of Waterdrop Inc., stated that user-centric and AI application strategies serve as key drivers of the company's growth. Leveraging AI large model semantic analysis and strategic judgment capabilities, Waterdrop's AI risk control model now covers 15 high-risk fundraising scenarios, significantly improving risk identification accuracy. Additionally, Waterdrop's AI customer service "Baoxiaohui" provides 24/7 rapid response, achieving 100% coverage of online customer service tickets. The company has also developed an AI large model-based insurance product knowledge base query tool for insurance advisors and planners, which has cumulatively assisted in 300,000 decision-making processes.
Looking ahead, Waterdrop Inc. plans to continue its growth momentum through product innovation and AI large model applications. The company recently launched the industry's first AI insurance underwriting expert "KEYI.AI," which reduces the average processing time for complex health insurance underwriting by 80% while achieving an underwriting accuracy rate of 99.8%. Furthermore, "KEYI.AI" will be made available to industry partners, further empowering the AI transformation of insurance product chains.