Guoyuan International: Maintains Buy rating on Waterdrop, Inc. ADR Class A (WDH.US) with AI technology driving high-speed growth.

After Waterdrop, Inc. ADR Class A company (WDH.US) released its third-quarter performance for 2025, Guotai Junan International issued a research report maintaining a buy rating for Waterdrop, Inc. ADR Class A company with a target price of $2.30. The report pointed out that the overall financial key indicators of Waterdrop, Inc. ADR Class A company in the third quarter of 2025 exceeded expectations, benefiting not only from the solid expansion of its core business but also demonstrating significant effects from refined operations and technology empowerment. Looking ahead, it is expected that Waterdrop, Inc. ADR Class A company will continue to achieve high-quality growth along the path of technology-driven development, thus raising the company's full-year profit total for 2025 to $543 million. In the third quarter of 2025, Waterdrop, Inc. ADR Class A company had a strong financial performance, achieving a net operating income of $975 million, a year-on-year increase of 38.4%; net profit attributable to shareholders reached $158 million, a year-on-year increase of 60.1%, and profitability continued to strengthen. In particular, the insurance industry, as the company's cornerstone business, achieved revenue of $870 million, a year-on-year increase of 44.8%. Waterdrop, Inc. ADR Class A company continues to deepen its moat in the field of internet insurance technology, especially the application of AI technology is a key catalyst driving premium growth. For example, the company's "AI Medical Insurance Expert" service led to an 82% growth in premiums, demonstrating the significant results achieved by the company in using AI technology to improve sales conversion rates and customer service experience. The research report pointed out that the company's revenue and profit growth rates have both improved in this quarter, benefiting not only from the solid expansion of the core business but also highlighting the significant effects brought about by the company's refined operations and technology empowerment. AI technology is the key driver behind the significant increase in operating profit margin for Waterdrop, Inc. ADR Class A company this quarter. The financial report shows that operating expenses as a percentage of revenue decreased by 8.3 percentage points year-on-year to 39.6%, and the operating profit of the insurance business increased by 44.0% year-on-year. The increase in data is reflected in the quality and efficiency of AI. For example, the large-scale application of AI customer service "Bao Xiaohui" has greatly improved user service efficiency and experience; with the assistance of AI quality inspection assistants, the efficiency of quarterly quality inspection has increased 2.4 times compared to pure manual mode. The research report analysis believes that as the AI large model and AI Agent technology mature further, their potential in improving operational efficiency, innovating product services, and optimizing user experience will be more fully exploited. In the future, Waterdrop, Inc. ADR Class A company will actively explore AI Agents with multimodal interaction capabilities, aiming to enable them to independently handle more complex insurance consultations and service tasks, potentially raising productivity to new heights. Shen Peng, founder and CEO of Waterdrop, Inc. ADR Class A company, said: "In the third quarter, AI technology as the core DRIVE for improving the quality and efficiency of business, has driven the company's revenue and profit to achieve double-digit high-speed growth. Looking ahead, we will continue to grasp the opportunities brought by technological evolution, promote the deep integration and innovative application of AI capabilities in the full chain of business, and inject continuous energy into the high-quality development of the company. Based on this, we are committed to achieving long-term value for users to feel secure, partners to win-win, and shareholders to trust!"