A recent research report has been published on Waterdrop Inc. (WDH.US), highlighting the company's strong second-quarter performance with double-digit year-over-year growth in both revenue and net profit attributable to shareholders. The research analysis indicates that considering the company's high-quality growth expectations for revenue and profit in 2025, a target price of $2.6 has been established with an initial "buy" rating coverage.

In the second quarter of 2025, Waterdrop Inc. achieved net revenue of 838 million yuan and net profit attributable to shareholders of 140 million yuan, marking 14 consecutive quarters of profitability. Operating expenses (including sales, administrative, and R&D expenses) accounted for 38.7% of revenue, declining 6.4 percentage points year-over-year. Insurance-related revenue reached 739 million yuan, representing a 28.7% year-over-year increase, with first-year scale premiums reaching 3.204 billion yuan, up 80.2% year-over-year. Short-term and long-term insurance businesses grew 95% and 45.4% respectively. The digital clinical trial business revenue resumed growth momentum with a 34.2% year-over-year increase.

Since announcing its share repurchase program in September 2021, Waterdrop Inc. has cumulatively repurchased approximately 55.7 million ADS (American Depositary Shares) from the open market as of August 31, 2025.

The research analysis highlights that Waterdrop Inc. has built technological barriers through its "All in AI" strategy, continuously converting traffic into commercial value. The high growth achieved in the insurance business during the second quarter of 2025 stems from AI's deep transformation of the entire business chain and comprehensive breakthroughs in efficiency improvements.

In the sales conversion segment, the company has developed an AI-driven growth engine. Its self-developed "Waterdrop Watershield" AI insurance expert, leveraging multimodal interaction capabilities, has gradually matched the service efficiency of junior human agents, with AI insurance expert premium contributions increasing 155% quarter-over-quarter in Q2.

In the underwriting segment, the company launched AI underwriting expert "KEYI.AI," which relies on a knowledge base of tens of millions of underwriting cases to reduce complex underwriting processing time, achieving an underwriting accuracy rate of 99.8%. In customer service and backend scenarios, the company introduced AI customer service "Bao Xiaohui," providing 24/7 round-the-clock response, with AI resolution rates exceeding 95.5% in product service scenarios.

As a leading insurance technology, crowdfunding, and healthcare platform in China, Waterdrop Inc. has developed three major business segments through years of growth: "fundraising + insurance + digital clinical trial solutions," utilizing technology to enhance insurance industry efficiency.

Additionally, Waterdrop Inc. is accelerating exploration of overseas markets. The company is in the early stages of overseas market exploration and has already launched insurance business in Hong Kong. Over the past two years, it has established a mature and comprehensive insurance brokerage service system and partnership network in Hong Kong. Moving forward, the company will leverage mainland business experience to explore innovation opportunities in both product and operational aspects.

Looking ahead, Waterdrop will further develop international business and continue focusing on overseas insurance market pain points and technology empowerment opportunities. Based on mature commercial judgment, the company will also actively explore additional overseas innovative businesses.