Huize Q1 2025 Earnings Report

Huize EPS Results

• Actual EPS: -$0.12
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Huize Revenue Results

• Actual Revenue: $39.11 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Huize Announcement Details

• Quarter: Q1 2025
• Date: 6/6/2025
• Time: Before Market Opens
• Conference Call Date: Friday, June 6, 2025
• Conference Call Time: 8:00AM ET

Huize (NASDAQ:HUIZ) Holding Limited, together with its subsidiaries, offers online insurance product and service platform through various internet channels in the People's Republic of China. The company provides life and health insurance products, such as critical illness, illness and disease, annuity, and term and whole life insurance products; and property and casualty insurance products, including travel, individual casualty, and corporate liability insurance products. It also offers offline insurance intermediary and brokerage services. The company also provides digital and technology development services; investment, technology development, internet information, management, and financial consulting services; business management and catering services; and insurance agency services. Huize Holding Limited was founded in 2006 and is headquartered in Shenzhen, China.

Huize Q1 2025 Earnings Call Transcript

Key Takeaways

• In Q1 FY25, GWP reached RMB 1.4 billion and FYP hit RMB 730 million, up 37.8% and 30.9% sequentially, while renewal premiums surged 64.6% to RMB 710 million.
• Operating expenses fell by 29% sequentially, driving an 11.5 percentage-point improvement in expense-to-income ratio to 29%, reflecting AI-driven automation and workplace optimization.
• The user base topped 11 million with 390,000 new clients, 65% in high-tier cities, and average long-term policy ticket size rose 58% to RMB 5,400, underlining effective customer and product strategy.
• AI integration progressed with an internal AI agent platform and a smart portal serving 15,000 users daily, and claims processing streamlined from one day to one hour, boosting operational efficiency.
• International business remained a growth engine: Vietnam operations grew policy count 29% and premiums 35.3% YoY, new partnerships and products launched, and a 3% overseas revenue contribution target by 2026 was reaffirmed.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to Huizhi's First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the management prepared remarks, we will have a question and answer session. Today's conference call is being recorded, and a webcast replay will be available upon Huater's IR website at ir.operator.com under the Events and Webcast section. I would like to hand the conference over to your fiscal host today, Mr. Kenny Lo, Huayta's Investor Relations Manager. Please go ahead, Kenny.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Thank you, operator. Hello, everyone, and welcome to our first quarter twenty twenty five earnings conference call. Our financials and operational results were released earlier today and are currently available on both our IR website and Global Newswire services. Before we continue, I would like to refer you to the safe harbor statement in our earnings press release, which also applies to this call as we will be making forward looking statements. Please also note that we will discuss non GAAP measures today, which are more forwardly explained in our earnings release and filings with the SEC.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Joining us today are our founder and CEO, Mr. Chuanjuma COO, mister Li Yang Co CFO, mister Minghan Xiao and Co CFO, mister Ron Pam. Mister Ma will start the call by providing an overview of the company's performance and operational highlights, followed by mister Pam, who will go over our financial results for the first quarter twenty twenty five. Then we will open up the call for questions. I will now turn the call over to mister Hello, everyone, and thank you for joining Huida's first quarter twenty twenty five earnings conference call.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

In 2025, against the backdrop of ongoing macroeconomic and geopolitical volatility, we do uphold this customer centric approach. Leveraging years of insights into customers' needs, we stay ahead of market trends and now working alongside leading insurers, continually expanding and refining our product offerings. At the same time, we are accelerating the integration of AI across our operations, driving remarkable productivity improvements and further optimizing our cost structure to lay the solid foundation for long term value creation. In the first quarter, operating revenue exceeded RMB 280,000,000 with gross written premiums and first year premiums facilitated on our platform increasing 3831% sequentially, reaching RMB 1,400,000,000.0 and RMB 730,000,000 respectively. Renewal premiums also grew 646% sequentially to approximately RMB 710,000,000.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Remains committed to providing full life cycle insurance solutions for its high value customers. By quarter end, our cumulative number of users surpassed 11,000,000 with 390,000 new clients added during the quarter. The average age of long term insurance customers was 35 with over 65% residing in high tier cities. Where we have consistently achieved this percentage over the past few quarters. In terms of FYP, the average ticket size for long term product rose 58% to over RMB 5,400, underscoring the effectiveness of our sustainable customer strategy.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

As of the February, thirteenth and twenty fifth month persistency ratios for long term insurance maintained industry leading levels of over 95%. As of the March, we had strong. As of the March, we had strong partnerships with a 43 insurance companies and continue to develop and launch differentiated customized products with insurer partners. With declining use on traditional bank deposits and wealth management products, demand for wealth protection solutions has intensified. In response, we partnered with New Channel Life to launch Please Know Free, the savings products driving to achieve sustainable returns for customers.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Additionally, we expanded our portfolio of customized participating products during on the full month year series co launched with Afifa Cofco. We partnered with Life Insurance on number six, a participating incremental whole life insurance product. This was followed by the launch of a participating annuity product who developed with Primerica Fossil Life Insurance. These customized products were designed to cater to the industry wide demand shift from fixed returns to frozen returns, further solidifying our leadership in China's participating insurance segment. In view of our global expansion strategy, we introduced Xiaotao Qi Global, a children's critical illness product co developed with Cigna and CMV Life Insurance that leverages their overseas resources to offer global client settlement and overseas medical support.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

The rapid advancement of generative AI and AI agents is transforming traditional enterprise workflows. And our AI plus strategy, we continue to enhance both the user experience and operational efficiency. We have deployed the Hoizai AI agent development platform internally with a goal of developing independent AI productivity. Leveraging open source AI models, we have implemented private domain deployment of large language model to ensure data security and regulatory compliance. At the same time, we are actively promoting development of local agents local AI agents to accelerate AI agent creation using visualization tools.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

This is driving the company wide productivity revolution with AI agents acting as a new generation of digital employees. In the quarter, we have further optimized our cost structure and reduced operating expenses with total operating expenses falling by 29% sequentially. Our customer centric approach leverages innovative technologies to deliver personalized insurance service experiences. During the quarter, we launched an AI powered smart portal on Huygus app, offering twenty four seven insurance agent support. Our AI services now cover key customer life cycle touch points, including policy inquiries and product matching, serving an average of over 15,000 users daily.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

We are also revolutionizing after sales claims processing through Xiaoma claims AI agents, achieving end to end automation of claims reporting, review, and payout. With AI now capable of handling of claims reporting, we are now working to extend this innovative feature to our apps and mini programs. This innovation is expected to reduce processing time on Xiaoma flash claim from one day to one hour upon full rollout. During the quarter, Xiaoma claim facilitated RMB 190,000,000 in claims across 46,000 cases, providing customers with efficient and reliable insurance claim services. Our international brand, continue to deliver strong growth momentum, underscoring the vast and have the potential of Southeast Asia.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Our Vietnamese operation Global Care maintained solid traction and grew total policy count by 29% compared to the first quarter in twenty twenty four. The gross written premiums and revenue increasing by 3534% year over year, respectively. We recently partnered with Vitol Post, a leading logistics service provider in the region to expand our distribution network, further growing our team of independent financial advisers, and enhancing the reach and conversion capabilities of the G cell platform. On the product side, GlobalCare launched five year and ten year critical illness insurance products in collaboration with PVI Insurance and and reaching our product portfolio to better meet customers' diverse protection needs. Hong Kong Injutag continues to drive the transformation of the Vietnamese insurance market through innovation and marks a crucial milestone of our international expansion.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

We are making steady progress in expanding into Singapore and other overseas markets and are on track to achieve our goal of reaching 3% of total revenue contribution from international markets by 2026. Global macro and geopolitical conditions remain volatile. Yes. Insurance demand in China and across Asia states are resilient with digital adoption accelerates, drawing on deep customers' insights and AI driven product innovation and strong momentum in Vietnam and other Southeast Asian markets. Huizu delivered another quarter of solid growth and operating agility.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Looking ahead, we will widen our range of savings and have products for high value clients, embedding ourselves post a large language model platform across the service chain to lift efficiency and experience. Internationally, fully insured tech further tap into Singapore and other priority markets, keeping us on cross overseas revenue targets. Granted in product innovation, customer experience, and AI and bay enablement, further will continue to create win win value for insurers and customers while delivering sustainable long term returns for shareholders. This concludes my prepared remarks for today. I will now turn the call to our CFO, Mr. Ron Tam, who will provide an overview of our key financial highlights for the third quarter.

[Ronald Tam, Co - CFO at Huize Holding Limited]

Thank you, Mr. Ma and Kenny. Good evening, everyone in Asia, and good morning for those in The US. It's Ron here. Despite a challenging macroeconomic and geopolitical environment, we have delivered yet another quarter of resilient performance, during which the first quarter for both total gross written premiums, GWP, and first year premiums facilitated on our platform increasing by 37.830.9% sequentially, reaching RMB 1,400,000,000.0 and RMB $730,000,000, respectively.

[Ronald Tam, Co - CFO at Huize Holding Limited]

Total operating revenue remained at RMB 284,000,000. Our financial position remains very robust with a combined balance of cash liquidity of around RMB 202,000,000 or US dollar equivalent 28,000,000 as of the end of the March. This resilient performance was driven by our efficient omnichannel distribution network. Our focused efforts to continue to acquire high quality customers from the market and the and the deployment of advanced proprietary AI solutions. Crucially, we have made significant progress in executing on our international expansion strategy, which is a key growth driver for long term sustainable growth for the company.

[Ronald Tam, Co - CFO at Huize Holding Limited]

Our strategic focus has remained on long term insurance products, which continue to account for over 90% of total GWP facilitated on the platform. Leveraging on our robust omnichannel distribution network and advanced AI solutions, we are significantly strengthening customer acquisition engagement, adding approximately 390,000 new customers during the first quarter of twenty twenty five. This brings our total customer base count to 11,000,000 as of the end of the first quarter. In addition, repeat purchase ratio for our long term insurance products stood at a very high level of 38%, demonstrating our ability to continue to unlock the lifetime value of a high quality customer base through effective upselling and cross selling. We've also seen, you know, reasonable reductions in all three kinds of operating expenses ranging from fifteen eight 15% to 48% quarter over quarter, which has improved our expense to income ratio by 11.5 percentage points quarter over quarter to 29% in the first quarter of twenty twenty five.

[Ronald Tam, Co - CFO at Huize Holding Limited]

In addition, total operating expenses has fallen by 29 compared to 20 the fourth quarter twenty twenty four. The reduction reflects decisive actions in continued workplace optimization, broad deployment of AI driven automation, which has sharply reduced manual workloads and boosted efficiency throughout the business flow. These results demonstrate the strength of our intelligent cost control framework in delivering real cost savings and productivity gains in the business. A clear illustration of our AI driven productivity gains is the use of localized AI avatar in marketing. These avatars can replicate a human voice and appearance in under under a minute, producing highly engaging insurance content that is virtually indistinguishable from a live presenter.

[Ronald Tam, Co - CFO at Huize Holding Limited]

Integrated with our content management platform, the system now automates script generation, video editing, and distribution, creating a seamless end to end workflow. As a result, we are scaling our social media presence with richer, more compelling content while materially reducing production time and cost. Our international growth engine, Pony Intritech, delivered yet another solid quarter and remains central to our long term strategy. Building on success of our proprietary AI toolset in China, we are now looking to deploy these solutions across our overseas operations to streamline workflows and deliver a more personalized customer journey. Vietnam continues to provide a robust proof of concept for our Southeast Asia playbook, and we are making steady progress towards entering Singapore this year.

[Ronald Tam, Co - CFO at Huize Holding Limited]

These initiatives will further diversify our revenue mix and establish additional scalable growth for our Vista Group. In closing, we believe that we are well positioned to capture the opportunities emerging from China's rapidly evolving insurance landscape and the broader Asian market. Domestically, robust demand for a long term protection underpins a healthy, sustainable growth trajectory across the value chain. Internationally, Pony Intrutech allows us to replicate and apply a China proven model and proprietary AI capabilities to high growth Southeast Asian markets, particularly among the young rapidly expanding middle class. By combining advanced data analytics, end to end AI enablement, and disciplined market penetration, we aim to cement Huizhou's status as Asia's premier Intrudev platform, seamlessly connecting consumers, carriers, and distribution partners, and delivering durable value to all stakeholders.

[Ronald Tam, Co - CFO at Huize Holding Limited]

And with that, we now open up the call to questions. Thank you very much, and over to you, operator.

[Operator]

Thank you. We will now begin the question and answer session. To answer questions on the phone, please press 11, and wait for a name to be announced. To cancel your request, please press 11 again. One moment for the first question.

[Operator]

Our first question comes from Amy Chen from Citi. Please go ahead.

[Amy Chan, Vice President at Citi]

Hi. This is Amy from Citi. Thank you for the opportunity. Have a couple of questions. The first one would be regarding selling expenses.

[Amy Chan, Vice President at Citi]

We noted that the first year premium facilitated in the first quarter saw around 15% year over year decline. However, selling expenses was up by 7%. What's the gap here? And the second question is on sales momentum in the second quarter and your outlook for the rest of 2025. The industry expecting another round of pricing rate cut in the third quarter.

[Amy Chan, Vice President at Citi]

Has this, you know, somehow boosted customer demand so far? Thank you.

[Ronald Tam, Co - CFO at Huize Holding Limited]

Thank you,

[Ronald Tam, Co - CFO at Huize Holding Limited]

Amy. It's a pleasure to have you again on the call. So I know that you have three questions to to your to you just now. So the first one is regarding the year on year decline on FYP and versus a increase in expense selling expenses, I believe. Right?

[Ronald Tam, Co - CFO at Huize Holding Limited]

So I think to address the question on the f I v FYP decline, I would note that in 2024, in the first quarter, there was a a there was a actually, there was a pricing cut effect during the quarter, which has also led to rush sales during that quarter. So I think, effectively, we are comparing the first quarter of twenty twenty five versus a relatively high base for the first quarter of last year. So I think that that has to do with a a high base effect for 2024, albeit that in the first quarter of this year, we have further, you know, driven our revenue growth from not just domestic, but also from international markets. So that that has to do with the reasons I just cited on on the low base, high base effect of last year. And then on the the the gap between the FIP downturn and the, you know, channel called increase, I would note that the international business in terms of gross margins is relatively lower than the domestic business.

[Ronald Tam, Co - CFO at Huize Holding Limited]

And therefore, I think that has we've been reflected in what you noted in terms of the gross margin decline in the first quarter of twenty twenty five. So on your second question regarding the outlook for the rest of the year, we do think that Q1 for 2025 is probably the rock bottom for this year. In Q2, we are seeing a very decent momentum. Obviously, the international market is is still in high growth phase. And for domestic China market, also, we are seeing a revival of growth given that the transition to the power products has has basically been complete over the last two quarters.

[Ronald Tam, Co - CFO at Huize Holding Limited]

And, you know, channels have, you know, have adjusted to the new product regime. So I think that in q two, we're seeing growth in the across different products. And but you know that that, you know, the expectation for a further pricing rate cut in August 31, which is now widely rumored and expected to be put in place. We do expect that there will be a there will be an effect on rush shelf in the third quarter, particularly in the months of July and August, where we have seen similar situations in the last year and also in the past few years as well. Although we would note that the the pricing rate at this time, because relatively speaking versus previous episodes, is relatively muted. And given that we're already in a sort of 2% handle kind of return level, the the incitement for for consumers to to purchase would would probably see a diluted effect versus what we have seen in the past years. So so we do expect that q three will be strong with August being the peak for domestic sales of, you know, savings products. Hope that answered your question, Amy.

[Amy Chan, Vice President at Citi]

Yeah. Thank you, Ron.

[Operator]

Thank you for the questions. One moment for the next question. Ron. Comes from the line of Kenny Lin of UOBKN. Please go ahead.

[Kenny Lim Yong Hui, Equity Research Analyst at UOB Kay Hian]

Good evening, Ron. I'm Kenny from UOB. And my I have two questions from my end. First one, how do you expect the enforcement of power signal across the agency channels to affect your 2A business? And how does it change the overall industry competitive landscape?

[Kenny Lim Yong Hui, Equity Research Analyst at UOB Kay Hian]

And my second question is about the the latest international revenue contribution in first quarter. And, also, what is the latest progress of your business attach expansion plan in Singapore and Philippines? Yeah. That's all.

[Ronald Tam, Co - CFO at Huize Holding Limited]

Thank you. Thank you. Any your support. Well, two questions. One on, which is the the regulatory rule change, impacting commissions for for various channels given that we have lived through this, regulatory change in the last, twelve months now. And we do hear and expect that the similar measures will be implemented and imposed upon the tied agency channel, which you have noted in your question. If such a measure would be implemented in the second half this year, we do expect that the so called impact on our business will be positive because what that means is that the playing field is leveled among the different channels, among banker, you know, brokers and agencies, tight agencies.

[Ronald Tam, Co - CFO at Huize Holding Limited]

And therefore, we do expect that there will be a continued so called exodus of agents from the tight agents tight agency model into independent third party platforms such as ourselves. So we would likely we'll be capturing an additional, you know, influx of productive agents if such a measure will be implemented on the agency channel. And on the overall market, I would think that a similar observation will be will be will be seen across our competitors as well. And as a whole, then the market would continue to gravitate towards a more independent third party kind of broker agency distribution model. We do know that right now in China, the third party intermediaries still account for less than 10.

[Ronald Tam, Co - CFO at Huize Holding Limited]

I think still 6% of overall premium distribution versus what we see in more mature and developed markets such as, you know, Japan or, you know, Hong Kong or even Singapore, where we see that intermediary broker agency distribution is as much as 30 to 50% of the market. So in the long long term secular trend, we do see that the the intermediation of premium premium distribution will continue to be in favor of a platform such as ourselves. And and and the second point that I would note here is that we do see that, you know, in the independent financial advisers or independent agents are increasingly favoring platforms where they can, you know, get access to a wide variety of products from different providers such as ourselves. We have, you over a hundred products on our platform that we can facilitate for agents to to to serve the customers. And, also, especially the the digital age whereby agents will require digital tools to serve the customers and to, you know, make sure that their customers have a very efficient and and digital purchase journey.

[Ronald Tam, Co - CFO at Huize Holding Limited]

And for the likes of the incumbents, this may be a difficult solution to be provided and where we have a very clear and strong advantage on on on the competition. So so overall, we do we do think that the the impact will be positive, and we would wait and see when the measures will be implemented on the agency channel. And your second question on international market expansion, we are very much on track in terms of our expansion into Singapore. We would likely be able to give a further material update in our next earnings call as to what our Singapore development has, you know, has materialized into, hopefully, in a into an operational status by the third quarter. We're working very closely with regulators in the meantime to finalize arrangements and to, you know, make sure that our our recruitment of necessary personnel for the for for the business is in in is in place.

[Ronald Tam, Co - CFO at Huize Holding Limited]

And our target is to be in business on on on on this model by the third quarter of this year. Philippines, we are still progressing. Given that we are now prioritizing Singapore as as a business development market, we we likely will see Philippines in the second half this year. Thank you, Kenny.

[Operator]

Thank you for the questions. With that, I would like to hand the call back to Kenny for closing remarks.

[Kenny Lo, Corporate Development and IR Manager at Huize Holding Limited]

Thank you, operator. In closing, on behalf of Fuyiday's management team, we would like to thank you for your participation in today's call. If you require any further information, feel free to reach out to us. Thank you for joining us today. This concludes the call.

Participants

Executives

• Kenny Lo, Corporate Development and IR Manager
• Ronald Tam, Co - CFO

Analysts

• Amy Chan, Vice President at Citi
• Kenny Lim Yong Hui, Equity Research Analyst at UOB Kay Hian