Dahua Jixian Research Report: Maintaining a "Buy" rating for Waterdrop, Inc. ADR Class A (WDH.US) with a target price of $2.91.

On December 4th, Dahua Jixian released the latest research report on Waterdrop, Inc. ADR Class A Company (WDH.US). The research report stated that Waterdrop, Inc. ADR Class A Company exceeded expectations in the third quarter of 2025, with a net profit growth of over 60% year-on-year, mainly due to strong growth in premiums and efficiency improvements brought by AI applications. The cumulative net profit from January to September 2025 increased by 55% year-on-year to 406.8 million yuan, far exceeding management's guidance, and analysts raised their full-year net profit forecast. Dahua Jixian reiterated its "buy" rating on Waterdrop, Inc. ADR Class A Company, with a target price of $2.91 for Waterdrop, Inc. ADR Class A Company. In the third quarter of 2025, Waterdrop, Inc. ADR Class A Company achieved a net operating income of 975 million yuan, with a net profit of 158 million yuan attributable to shareholders, maintaining profitability for the fifteenth consecutive quarter; operating expenses, including sales, management, and research and development expenses, accounted for 39.6% of revenue, a year-on-year decrease of 8.3 percentage points. Insurance-related income reached 870 million yuan, a year-on-year increase of 44.8%, with first-year premium scale growth of 32.3% compared to the previous quarter. The digital clinical trial business achieved revenue of approximately 31.9 million yuan this quarter, a year-on-year increase of 31.3%. Since announcing the stock repurchase plan in September 2021, as of November 30, 2025, Waterdrop, Inc. ADR Class A Company has repurchased approximately 58.1 million ADSs (American Depositary Shares) from the public market. This quarter, the year-on-year growth in net profit of Waterdrop, Inc. ADR Class A Company highlights the results of AI-enabled business cost reduction and efficiency improvement. Under the strategic direction of All in AI, Waterdrop, Inc. ADR Class A utilizes large AI models to empower the insurance business, covering core processes such as underwriting, customer service, quality inspection, product innovation, sales, and marketing. The AI medical insurance expert assisted in achieving an 82% increase in premium scale compared to the previous quarter; the AI insurance customer service "Baoxiaohui" served over 600,000 times in a single month; the AI underwriting expert "KEYI.AI" simplified the underwriting process, able to respond within seconds, turning tasks that used to take minutes into near-instant processes. Shen Peng, founder and CEO of Waterdrop, Inc. ADR Class A Company, said, "In the third quarter, AI technology as the core drive for business improvement and efficiency enhancement, has driven double-digit rapid growth in company revenue and profit. Looking ahead, we will continue to grasp the opportunities brought by technological evolution, promote the deep integration of AI capabilities throughout the entire business chain, and innovate in application, injecting sustained momentum into the high-quality development of the company. With this foundation, we are committed to achieving long-term value for users at ease, win-win partnerships, and shareholder trust!"