GUOTAI JUNAN I: Maintains a "buy" rating on Waterdrop, Inc. ADR Class A (WDH.US) and raises the target price to $2.40.

After Waterdrop, Inc. ADR Class A (WDH.US) released its 2025 third-quarter performance, GUOTAI JUNAN I issued a latest research report, maintaining a buy rating for Waterdrop, Inc. ADR Class A (NYSE: WDH) and raising the target price to $2.40. The research report pointed out that the revenue and net profit of Waterdrop, Inc. ADR Class A in the third quarter of 2025 exceeded the analyst's previous forecasts, mainly due to the deep integration and technological iteration of AI technology by the company. Looking ahead to the fourth quarter of 2025 and 2026, analysts at GUOTAI JUNAN I expect that the performance of Waterdrop, Inc. ADR Class A will continue to grow, and have raised their net profit forecasts for 2025 and 2026. Waterdrop, Inc. ADR Class A had a strong financial performance in the third quarter of 2025, with a net operating income of 975 million RMB and a net profit attributable to shareholders of 158 million RMB. Among them, insurance-related revenue reached 870 million RMB, a year-on-year growth of 44.8%, with first-year scale premium increasing by 32.3% month-on-month. While revenue and profit continued to grow, the company's operating expenses (including sales expenses, management expenses, and R&D expenses) accounted for 39.6% of revenue, a year-on-year decrease of 8.3 percentage points. The GUOTAI JUNAN I research report pointed out that Waterdrop, Inc. ADR Class A's Q3 revenue and net profit exceeded expectations, mainly due to the results of the integration of AI technology in the company's business. Under the strategic direction of "All in AI," Waterdrop, Inc. ADR Class A empowered its insurance business with AI big models, covering underwriting, customer service, quality inspection, product innovation, sales, and marketing. The AI medical insurance expert assisted in achieving an 82% month-on-month growth in scale premiums; AI insurance customer service "Baoshao Hui" served over 600,000 times in a single month; AI underwriting expert "KEYI.AI" simplified the underwriting workflow, and can now complete responses in "milliseconds," turning tasks that used to take minutes into an almost instantaneous process. The founder and CEO of Waterdrop, Inc. ADR Class A, Shen Peng, stated: "In the third quarter, AI technology as the core DRIVE for improving business quality and efficiency, drove the company's revenue and profit to achieve double-digit high-speed growth. Looking forward, we will continue to seize opportunities brought by technological evolution, promote the deep integration and application innovation of AI capabilities in the entire business chain, injecting sustained momentum for the company's high-quality development. Based on this, we are committed to achieving long-term value of user reassurance, win-win cooperation with partners, and shareholder trust!"