New Stock Outlook | Warm Wow Insight Reapply: AI Insurance Technology Bids Farewell to High Gross Profit Illusion, How to Break Through the Stagnation in Core Business Growth?

In the deep waters of digital transformation in the insurance industry, AI technology is evolving from an "auxiliary tool" to a key variable in restructuring core underwriting and claims processes. On April 13th, the Hong Kong Stock Exchange disclosed information indicating that Neiwa Insight Technology Co., Ltd. (referred to as Neiwa Insight) has once again submitted an application for listing on the Hong Kong Stock Exchange main board, with Morgan Stanley and HSBC acting as joint sponsors. This comes after the failure to submit an application in September 2025, when this insurance AI technology company founded by ZA ONLINE and founder Lu Min, with support from Sequoia Capital, once again launched an assault on the capital market. For this Hong Kong listing, Neiwa Insight plans to use 30% of the raised funds for technology research and development, 30% for market expansion (half of which will be invested in Southeast Asia and the Middle East), and 30% for strategic investments. Against the backdrop of leading insurance companies self-developing AI systems and increasing industry competition, can this AI service provider operating on a "pay-for-results" model break free from the shackles of "relying on a single large client" and transform "paper profits" into sustainable business value? Despite crossing the 1 billion revenue threshold, momentum is showing a "cliff-like" slowdown Looking at the revenue data, Neiwa Insight has delivered a seemingly impressive but actually worrisome performance over the past three years. From 2023 to 2025, the company's revenue grew from 655 million to 1.024 billion yuan, with a three-year compound growth rate of 25.1%, crossing the 1 billion revenue threshold for the first time in 2025. However, a closer look at the growth trajectory reveals that revenue growth in 2024 reached an impressive 44.16%, but then sharply dropped to 8.48% in 2025, indicating a significant slowdown in business expansion. Against the backdrop of rapid expansion in the health insurance AI technology industry - with the sector expected to reach a market size of 65.3 billion yuan by 2029 according to Frost & Sullivan reports - Neiwa Insight's deceleration of growth is not a signal of reaching the peak of the industry, but rather reflects the company's own bottleneck in customer penetration and the challenges faced in pricing power for core products. On the profitability side, Neiwa Insight's situation is even more complex. The overall gross profit margin declined from 58.3% in 2023 to 47.2% in 2025, with a cumulative decline of over 11 percentage points over three years. Of particular concern is the performance of the company's adjusted net profit. Excluding non-cash items such as the fair value change of convertible redeemable preferred shares, the company's adjusted net profit increased from 18.5 million yuan in 2023 to 60.6 million yuan in 2025, but the year-on-year growth in 2025 was only about 5.30%, a sharp drop from the growth of about 210.4% in 2024. The adjusted net profit margin also fell from 6.1% in 2024 to 5.9%, indicating that even after excluding accounting disturbances, the company's core profit growth momentum is weakening. In terms of financial statements, the company posted net losses of 240 million yuan, 155 million yuan, and 270 million yuan in 2023, 2024, and 2025 respectively, with a cumulative loss of over 660 million yuan over three years. The main driver of the losses was the fair value change of convertible redeemable preferred shares - 2.57 billion yuan, 2.06 billion yuan, and 3.04 billion yuan over the three years. The high-growth engine of gross profit is stalling Where is the path to break through? According to observations, this structural deviation of "increased revenue but decreased profit" has its roots in the deteriorating profit quality of the revenue pillar - underwriting solutions. Underwriting operations account for nearly 70% of total revenue, but the segment's gross profit margin plummeted from 66.3% to 52.3%, a three-year decline of 14 percentage points. Specifically, the gross profit margin for user operations (accounting for over 60% of underwriting revenue) dropped from 41.7% to 32.4%, with a absolute decrease in gross profit - 141 million yuan in 2025, down 18.0% from 172 million yuan in 2024, while revenue only decreased by 8.8%, indicating that the deterioration of profitability is far greater than the rate of revenue decrease. Although the high gross profit risk management business in underwriting still maintains a gross profit margin of over 85%, revenue growth has nearly stalled (an 8.0% year-on-year increase in 2025, and a previous year growth of only 2.3%), unable to offset the profit collapse of user operations. At the same time, although the claims solutions segment showed a 57.2% revenue growth in 2025, accounting for 21.4% of total revenue, its gross profit margin was similarly under pressure, declining from 39.0% to 35.8%. In particular, the largest segment, claims investigation and inspection, saw its gross margin drop from 31.3% to 28.5%, and the gross margin of value-added health management services plummeted from 92.7% to 38.4% - this "cliff-like" decline is partly due to the transition of business model from pure software to actual health management services, but also indicates that this business is no longer the star segment that could easily contribute high gross profit. In summary, the fundamental problem facing Neiwa Technology is that the high-growth engine (user operations) is slowing down, and the high-growth engine (claims) cannot sustain high gross profit, with both major business segments under pressure, leading to a continued decline in overall profit levels. With sales and distribution expenses, administrative expenses combined still accounting for over 35% of revenue, the path to turning a profit for the company remains distant. Furthermore, user operations essentially leverage AI technology to help insurance companies improve customer reach, conversion, and retention management. As the gross profit margin continues to decline, it reflects two harsh realities: first, leading insurance companies are enhancing their in-house capabilities, squeezing the pricing space for external technical services; second, small and medium-sized insurance companies are highly sensitive to prices, forcing Neiwa Technology to compromise on pricing in order to expand its customer base (the total number of customers has increased from 112 to 245). If the business model is not changed - for example, shifting from pay-for-performance to value-based revenue sharing, or embedding more in-depth operational services - the gross profit margin is likely to fall below the 30% warning line. The differentiation in the gross profit margin of the claims segment is also worth noting. The gross profit margin for claims-related software development services has remained at over 80%, but revenue is only 32.15 million yuan, belonging to a typical "high gross profit, small scale" business; the gross profit margin for value-added health management services has stabilized at around 38% after experiencing drastic fluctuations, with a revenue growth rate of over 50%, becoming a new growth driver; while the largest segment, claims investigation and inspection, has a gross profit margin of only 28.5% and is still declining. This business charges based on the volume of cases processed, and with the complexity of claims increasing under the background of DRG/DIP reforms, AI automation rates are limited, manual review costs are rising, and the gross profit margin is naturally under pressure. The key to improvement lies in increasing the automation coverage of the "Lou Bo" claims decision system - the company has handled 221 million cases so far, and if the AI automation rate can be increased by another 10 percentage points from its current level, the gross profit margin for claims investigation and inspection business is expected to rise to above 35%. In conclusion, in terms of breaking through, Neiwa Technology needs to make efforts in three directions simultaneously. First, stabilizing the gross profit margin bottom line for user operations. The current gross profit margin of 32.4% is approaching the variable cost line, and the company should consider adjusting its pricing strategy, abandoning some price-sensitive small and medium-sized clients, and instead providing deeper operational services with higher added value to leading insurance companies in exchange for gross profit margin space. Second, accelerating the structural upgrade of claims business. Shift resources towards high gross profit claims software development and high-growth value-added health management services, while improving the automation rate of claims investigation through technological iteration, to stabilize gross profit margin during scale expansion. Third, advancing customer diversification and overseas expansion. The revenue share of the top five clients has dropped from 82.9% to 60.3%, and this trend should continue to deepen; if the expansion into Southeast Asia and the Middle East markets can replicate domestic experiences, it is expected to contribute over 10% of revenue growth within 2-3 years, reducing reliance on a single market and a single customer. Neiwa Insight is standing at a critical juncture of transitioning from a "technology story" to "profit reality". Over the past three years, the company has proven with 1 billion in revenue the practical application of AI in insurance underwriting and claims processes, but data showing a decline in gross profit margin from 58.3% to 47.2%, and a drop in adjusted net profit growth from 210% to 5%, also mercilessly reveal a common industry challenge: the pricing power of insurance technology service providers is being squeezed by both the in-house capabilities of leading insurance companies and the price sensitivity of small and medium-sized customers, making it difficult to achieve high growth and high gross profit at the same time.