Huize Holding Ltd (HUIZ) Q4 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

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Tue, Mar 25, 2025, 1:00 AM 4 min read

Total Revenue: Increased by 4.5% year-over-year to RMB1.25 billion in 2024.
Gross Written Premiums (GWP): Reached RMB6.16 billion, up by 6% year-over-year.
First Year Premiums (FYP): Achieved RMB3.42 billion, up by 31% year-over-year.
Whole-Life Premiums: Contributed RMB1.84 billion, surging by 76% year-over-year.
Long-Term Health Insurance: Contributed RMB520 million, up 2% year-over-year.
Savings Insurance Products: Accounted for 68.6% of total FYP, a year-over-year increase of 5.5%.
Short-Term Insurance Premiums: Increased by 23% year-over-year to approximately RMB550 million.
Customer Base: Increased to 10.6 million, with 380,000 new users added in Q4 2024.
Average FYP Purchase Size for Savings Products: Approximately RMB75,000 in 2024, up by 39% year-over-year.
13th and 25th Month Persistency Ratios: Both exceeded 95%.
International Revenue: Reached RMB228.7 million in 2024, with international revenue contribution at 18%.
Cash and Cash Equivalents: RMB233 million (USD32 million) as of the end of 2024.

Warning! GuruFocus has detected 3 Warning Signs with HUIZ.

Release Date: March 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Huize Holding Ltd (NASDAQ:HUIZ) reported a 4.5% year-over-year increase in total revenue, reaching RMB1.25 billion in 2024.
The company achieved record heights in both growth rate premiums (GWP) and first-year premiums (FYP), with GWP amounting to RMB6.16 billion, up by 6% year-over-year.
Huize's international expansion strategy is progressing well, with its international brand, Poni Insurtech, completing the acquisition of Vietnam's leading digital insurtech platform, Global Care.
The company has successfully integrated AI technology into its operations, enhancing customer service efficiency and improving sales conversion rates.
Huize's customized insurance products accounted for 53.1% of total premiums in Q4 2024, reflecting strong market recognition and confidence in their product development capabilities.

Negative Points

The implementation of commission caps in the insurance industry has led to a compression of gross profit margins, which were around 30% in 2024.
Operating expenses, including selling and G&A expenses, saw significant year-over-year growth in Q4 2024 due to restructuring and AI investments.
The regulatory environment remains challenging, with new commission structures impacting the brokerage channels.
Despite international expansion, the company faces the challenge of integrating local operations with broader expertise and capabilities.
The competitive landscape is expected to consolidate, potentially increasing pressure on smaller players and necessitating strategic adjustments.

Q & A Highlights

Q: Has the one-off impact of the commission tax regulation subsided, and has market competition improved since its implementation? Also, how is AI technology improving operations, and what financial outcomes can be expected? A: The commission tax regulation's impact has been fully integrated into our financial results, and the industry has adapted to the new normal. The competitive landscape is expected to consolidate among top-tier players, benefiting Huize due to our cost structure advantage. AI technology is enhancing operational efficiency, allowing scalable growth with less human resource investment, particularly in customer service, which AI can handle 95% of inquiries. This will likely increase operating leverage and improve customer acquisition and engagement. (Tam Ronald, Co-Chief Financial Officer)

Q: What caused the significant year-over-year growth in operating expenses in Q4, and what are the gross profit margin and net profit guidance for 2025? A: The increase in operating expenses was due to restructuring and AI investments in Q4. In 2025, we aim to reduce operating expense ratios and leverage AI for cost savings. Gross margins have recovered to 34.7%, and we aim to maintain or improve this through AI-driven customer acquisition. We expect a profitable 2025 with a mid-single-digit net profit margin, supported by international revenue growth and AI investments. (Tam Ronald, Co-Chief Financial Officer)

Q: How is Huize leveraging AI to enhance customer service and operational efficiency? A: AI is being integrated across our operations, particularly in customer service, where it handles 95% of inquiries. This reduces the need for human resources and supports scalable growth. The AI agent model, launched through DeepSeek integration, is improving customer acquisition and engagement, and we expect to share more milestones in the coming quarters. (Tam Ronald, Co-Chief Financial Officer)

Q: What are the strategic plans for international expansion, particularly in Southeast Asia? A: Our international brand, Poni Insurtech, has successfully expanded into Vietnam and plans to enter Singapore and the Philippines within 12 months. This expansion will diversify revenue streams and enhance long-term shareholder value. We aim for international revenue to contribute 30% by 2026. (Tam Ronald, Co-Chief Financial Officer)

Q: How is Huize adapting to the evolving regulatory environment in the insurance industry? A: The regulatory changes have been fully integrated into our business model, and we expect market share to consolidate among top-tier players. Huize's flat hierarchy and cost structure provide a competitive advantage. We continue to focus on long-term insurance products and leverage AI for operational efficiency and customer acquisition. (Tam Ronald, Co-Chief Financial Officer)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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