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BEIJING - Waterdrop Inc. (NYSE: WDH), a prominent technology platform in the insurance and healthcare sectors, has disclosed its financial outcomes for the second quarter of 2024, revealing substantial growth in net profit and the announcement of a special cash dividend.
For the second quarter, the company's net profit attributable to ordinary shareholders soared to RMB 88.3 million, marking a 306.9% increase year over year. Despite industry challenges, the firm's first-year premiums (FYP) through its insurance business saw a 19% decline from the previous year, totaling RMB 1,778.6 million. However, net operating revenue barely decreased by 0.4% to RMB 676.2 million.
The operating profit margin of the insurance segment improved to 21.4%, up from 16.7% in the same quarter last year. Waterdrop also reported advancements in its crowdfunding platform, with approximately 461 million people contributing to 3.25 million patients. In clinical trial services, the company enrolled nearly 8,600 patients in 1,050 programs.
Peng Shen, CEO of Waterdrop, highlighted the company's profitability and sequential developments in the insurance business, including a 1.4% quarter-over-quarter increase in FYP and a 15.8% growth in new users. He also mentioned the strategic cooperation with a property & casualty insurer and the use of the AI-based "Waterdrop Guardian" in various insurance categories.
Operating costs and expenses for the second quarter decreased by 13.4% year over year to RMB 623.8 million. The company's operating profit for the quarter was RMB 52.4 million, compared to an operating loss in the same period last year.
The board has approved a special cash dividend of approximately US$7.5 million, following a previously completed special dividend in the past quarter. Waterdrop also continued its share repurchase programs, with around 49.3 million ADSs repurchased to date.
As of June 30, 2024, Waterdrop had cash and cash equivalents and short-term investments totaling RMB 2,933.3 million. The company plans to fund the share repurchases from its existing cash balance.
The information provided is based on a press release statement from Waterdrop Inc.
In other recent news, Waterdrop Inc. has showcased a robust growth in its Q1 2024 earnings. The company reported a 16.3% year-over-year increase in total revenue, reaching $705 million. Additionally, Waterdrop's GAAP net profit attributed to ordinary shares saw a significant rise of 62.2% from the previous year, hitting $80.6 million. This marks Waterdrop's ninth consecutive quarter of profitability. The firm also highlighted growth in its insurance business, with total FYP risk reaching $1.75 billion, a 3.7% year-over-year increase. Despite a 10.5% rise in operating costs and expenses, Waterdrop continues to maintain its financial guidance for sustained double-digit revenue growth for the full year. Recent developments also include strategic cooperation agreements with a leading domestic pharmaceutical company and the initiation of two key clinical trials.
InvestingPro Insights
Waterdrop Inc. (NYSE: WDH) has demonstrated resilience in its financial performance, as evidenced by the latest quarterly results. With a notable 306.9% surge in net profit year over year, the company's strategic initiatives appear to be bearing fruit. The InvestingPro Data underscores this positive trajectory, highlighting a market capitalization of $391.08 million and a forward-looking Price to Earnings (P/E) ratio of 13.92, suggesting a reasonable valuation compared to historical earnings.
InvestingPro Tips indicate that analysts are optimistic about Waterdrop's prospects, predicting net income growth this year. This aligns with the company's own reports of improved profitability and operational progress. Additionally, the stock price's tendency to move in the opposite direction of the market could present a diversification benefit for investors seeking to hedge against market volatility.
From a financial health perspective, Waterdrop's liquid assets exceed its short-term obligations, providing a cushion for operational needs and potential strategic investments. This is further supported by a Price to Book (P/B) ratio of 0.61, which may suggest that the stock is undervalued relative to the company's book value.
While the company's revenue saw a slight decline of 1.09% over the last twelve months, the quarterly revenue growth of 16.26% indicates a rebound, which could be a positive sign for future earnings. However, it's important to note that the stock price has experienced significant volatility, with a 23.19% drop over the last three months, which may concern some investors.
For those interested in deeper analysis, there are additional InvestingPro Tips available for Waterdrop Inc. at https://www.investing.com/pro/WDH, providing a comprehensive outlook on the company's financial health and market performance.
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