CITIC Securities recently published a research report on Waterdrop Inc. (WDH.US). The company achieved double-digit year-over-year growth in both revenue and net profit attributable to shareholders in the second quarter. The research report indicates that Waterdrop Inc. has maintained profitability for several consecutive quarters, and AI implementation is expected to further unlock profit potential. Given the current valuation discount, CITIC Securities initiates coverage with a "Buy" rating.
In the second quarter of 2025, Waterdrop Inc. recorded net revenue of 838 million yuan and net profit attributable to shareholders of 140 million yuan, marking 14 consecutive quarters of profitability. Operating expenses as a percentage of revenue decreased by 6.4 percentage points year-over-year to 38.7%. Insurance-related revenue reached 739 million yuan, up 28.7% year-over-year, while first-year scale premiums totaled 3.204 billion yuan, representing an 80.2% year-over-year increase. Short-term and long-term insurance businesses grew 95% and 45.4% respectively. Digital clinical trial business revenue showed strong momentum with 34.2% year-over-year growth.
Since announcing its share buyback program in September 2021, Waterdrop Inc. has repurchased approximately 55.7 million ADS from the open market as of August 31, 2025.
The research report highlights that Waterdrop Inc.'s "All in AI" strategy has been comprehensively implemented, reshaping the entire insurance value chain. Rather than remaining conceptual, Waterdrop's AI strategy has achieved quantifiable results across all business processes, becoming key to building core competitiveness.
The company invests nearly 300 million yuan annually in technology research and development, accumulating over 100 technology patents and submitting 60 large language model-related patent applications, including 9 international patent applications. AI has been implemented across Waterdrop's entire business processes with quantifiable outcomes.
In sales and customer acquisition, Waterdrop has established an AI-driven growth engine. Its proprietary "Waterdrop Guardian" AI insurance expert, leveraging multi-modal interaction capabilities, has gradually matched the service efficiency of junior human agents, with AI insurance expert premium contributions growing 155% quarter-over-quarter in Q2.
In service and operations, the company launched AI customer service "Bao Xiaohui," achieving 100% coverage of online business with 24/7 response capabilities. In underwriting and risk control, the company introduced the industry's first AI underwriting expert "KEYI.AI," reducing processing time for complex underwriting issues by 80% while achieving 99.8% underwriting accuracy.
In product innovation, AI and big data analytics are key to creating personalized insurance solutions. In 2024, customized products accounted for over 92% of the company's offerings, precisely covering "blue ocean" markets such as elderly and pre-existing condition populations that traditional insurance struggles to reach.
As China's leading insurance and healthcare services technology platform, Waterdrop Inc. has developed a comprehensive "crowdfunding + insurance + pharmaceuticals" business ecosystem through years of development, with high synergy and mutual reinforcement among business segments. Additionally, the company is accelerating overseas market exploration, having established offices in Hong Kong, Singapore, and the United States, and will continue focusing on user pain points and technology empowerment opportunities in overseas insurance markets.