GUOTAI JUNAN I: Maintains a "Buy" rating on Waterdrop, Inc. ADR Class A (WDH.US) and raises the target price to $2.35.

After Waterdrop, Inc. ADR Class A (WDH.US) announced its second-quarter performance in 2025, GUOTAI JUNAN I recently released a research report, raising the target price of Waterdrop, Inc. ADR Class A to $2.35 and maintaining a "buy" rating. In the second quarter of 2025, thanks to the improvement in operational efficiency, Waterdrop, Inc. ADR Class A's profit performance exceeded expectations. GUOTAI JUNAN I has raised its profit expectations for Waterdrop, Inc. ADR Class A from 2025 to 2027, reflecting enhanced profitability and steady growth momentum. The research report by GUOTAI JUNAN I pointed out that Waterdrop, Inc. ADR Class A had a strong financial performance in the second quarter of 2025, with a net profit attributable to shareholders of 140 million yuan, a year-on-year increase of 58.7%; insurance-related income was 739 million yuan, a year-on-year increase of 28.7%, and first-year scale premiums reached 3.204 billion yuan, a year-on-year increase of 80.2%; the company's operating expenses (including sales expenses, management expenses, and research and development expenses) accounted for 38.7% of revenue, a decrease of 6.4 percentage points year-on-year. Shen Peng, the founder and CEO of Waterdrop, Inc. ADR Class A, stated that being user-centric and applying AI strategically is the key driver of the company's growth. With the support of AI large-model semantic analysis and strategic judgment capabilities, Waterdrop, Inc. ADR Class A's AI risk control model now covers 15 high-risk fundraising scenarios, significantly improving risk control identification accuracy. In addition, Waterdrop, Inc. ADR Class A's AI customer service "Baoxiaohui" can respond quickly 24/7, achieving 100% coverage of online customer service work orders. A knowledge base query tool based on AI large models for insurance products has been developed for insurance advisors and planners, assisting in decision-making 300,000 times cumulatively. Looking ahead, Waterdrop, Inc. ADR Class A will continue its growth momentum through product innovation and the application of AI large models. Recently, the industry's first AI insurance underwriting expert "KEYI.AI" was launched, reducing the average processing time for complex health insurance underwriting by 80% and achieving an underwriting accuracy rate of 99.8%. Additionally, "KEYI.AI" will be made available to industry partners, further empowering the AI transformation of the insurance product chain.