Huize Holding Ltd. ((HUIZ)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Huize Holding Ltd. painted a generally positive picture, highlighting the company’s strong revenue and premium growth, successful international expansion, and effective integration of AI technologies. Despite these achievements, the call also acknowledged some challenges, including regulatory hurdles and increased expenses, which could impact short-term profitability.
Revenue and Premium Growth
Huize Holding Ltd. reported a commendable increase in total revenue, which rose by 4.5% year-over-year to RMB1.25 billion. The company also saw a 6% year-over-year growth in gross written premiums (GWP), amounting to RMB6.16 billion. Notably, full-year first-year premiums (FYP) experienced a significant surge, climbing by 31% year-over-year to reach RMB3.42 billion.
Product Portfolio Expansion
The company demonstrated robust growth in its product offerings, with whole-life premiums surging by 76% year-over-year to RMB1.84 billion. Additionally, the short-term insurance business recorded a 23% increase in premiums year-over-year, reflecting Huize’s successful strategy in diversifying its product portfolio.
Customer Base Growth
Huize’s efforts to expand its customer base proved fruitful, with the cumulative number of insurance users increasing to 10.6 million. During the quarter, the company added 380,000 new users, showcasing its effective customer acquisition strategies.
International Expansion Success
The company’s international expansion efforts have been successful, with international revenue contributing 18% to the total. Huize’s acquisition of Vietnam’s leading digital insurtech platform, Global Care, through Poni Insurtech, resulted in a 32% sequential increase in total policies, setting a target of 30% international revenue contribution by 2026.
AI Integration and Efficiency
Huize has made significant strides in integrating AI technologies to enhance operational efficiency and risk management. The launch of an intelligent client services system and the Feng Tung Underwriting Risk Control Engine System are key initiatives that have improved the company’s operational capabilities.
Regulatory Challenges
The company is navigating regulatory challenges, particularly the impact of commission caps regulation across brokerage channels. This has affected market competition and necessitated strategic adaptations to maintain competitiveness.
Expense Increase
Huize experienced a significant year-over-year increase in selling and general & administrative expenses due to restructuring and investments in AI. While these expenses have impacted short-term profitability, they are seen as necessary for long-term growth.
Forward-Looking Guidance
Looking ahead, Huize Holding Ltd. remains optimistic about its growth trajectory. The company aims to continue leveraging AI and international expansion to enhance its competitive position and deliver sustainable value. With a target of 30% international revenue contribution by 2026 and plans to expand AI-driven services in Southeast Asia, Huize is poised for continued success.
In summary, Huize Holding Ltd.’s earnings call highlighted a generally positive outlook, driven by strong revenue and premium growth, successful international expansion, and strategic AI integration. While regulatory challenges and increased expenses pose some concerns, the company’s forward-looking guidance suggests a promising future as it continues to build on its strengths and explore new opportunities.