BEIJING - Waterdrop Inc. (NYSE:WDH), a prominent technology platform in the insurance and healthcare sectors, declared a special cash dividend following its latest financial results for Q4 and the entire year of 2023.
Despite a slight decrease in net operating revenue and first-year premiums (FYP), the company reported a substantial quarter-over-quarter increase in net profit for the fourth quarter.
For Q4 2023, Waterdrop's net profit attributable to ordinary shareholders was RMB 59.1 million, marking a 60.7% increase from the previous quarter. The company's cash and cash equivalents, along with short-term investments, totaled RMB 3,393.4 million, equivalent to US$478.0 million. The firm also maintained its positive operating cash flow during this period.
The FYP generated through Waterdrop's insurance business saw a minor year-over-year decline of 4.2%, amounting to RMB 1,525.0 million. Net operating revenue also fell by 3.0% year over year to RMB 659.4 million. Nonetheless, Waterdrop expanded its insurance product offerings to 1,357 and reported a growing user base with approximately 450 million people contributing to medical crowdfunding on its platform.
Waterdrop's CEO, Peng Shen, expressed satisfaction with the company's financial performance, citing eight consecutive quarters of profitability. He highlighted the firm's commitment to high-quality business development and the integration of AI technology, such as the proprietary "Waterdrop Guardian" model, to enhance operational efficiency.
The company's E-Find Platform, which enrolls patients in clinical trial programs, reached a new milestone by partnering with two new international pharmaceutical companies, bringing the total number of collaborators to 167.
Looking ahead, Waterdrop plans to continue its strategy for stable and high-quality growth while maintaining profitability. In appreciation of its shareholders' support, Waterdrop announced a special cash dividend, totaling approximately US$15 million, payable in late April and early May 2024 to shareholders of record as of April 19, 2024.
For the full year of 2023, Waterdrop experienced a 6.1% decrease in net operating revenue compared to the previous year, primarily due to a reduction in insurance-related income. The company's operating loss for the year was RMB 6.7 million, contrasting with an operating profit of RMB 478.0 million in 2022. The annual net profit attributable to ordinary shareholders was RMB 167.2 million, down from RMB 607.7 million in the preceding year.
This report is based on a press release statement.
InvestingPro Insights
Waterdrop Inc. (NYSE:WDH), despite the challenges outlined in their recent financial report, has shown some resilience in its stock performance and financial metrics. An analysis from InvestingPro reveals a mixed set of data that investors should consider.
InvestingPro Data indicates a current Market Cap of $466.4 million, with a P/E Ratio standing at 13.71. The company's Price / Book ratio as of the last twelve months ending Q3 2023 is 0.75, which may suggest that the stock is undervalued relative to its assets. Additionally, the Revenue Growth for the same period shows a contraction of -2.76%, reflecting the challenges mentioned in their annual report.
One of the InvestingPro Tips highlights that Waterdrop's stock price often moves in the opposite direction of the market, which could signify a degree of non-correlation with broader market trends. This could be a point of interest for investors looking for diversification. Moreover, while analysts anticipate a sales decline in the current year, the company's liquid assets exceed short-term obligations, which may provide some financial stability in the short term.
For investors seeking more in-depth analysis, there are additional tips available on InvestingPro. For instance, while the company does not pay a dividend to shareholders, it has been profitable over the last twelve months. Subscribers to InvestingPro can access more such insights, with a total of 11 additional tips available for Waterdrop Inc. To enhance your investment research, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
It is also worth noting the recent strong return over the last three months, with a 21.15% price total return, which contrasts with the significant price drop over the last year. Investors might want to keep an eye on these trends as they evaluate Waterdrop's potential for recovery and growth in the context of their recent dividend announcement and ongoing business strategies.
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