On December 4, UOB Kay Hian released its latest research report on Waterdrop Inc. (WDH.US). The report highlighted that the company's Q3 2025 earnings exceeded expectations, with net profit growing over 60% year-over-year (YoY), driven by strong premium growth and efficiency improvements from AI applications. For the first nine months of 2025, cumulative net profit rose 55% YoY to RMB 406.8 million, significantly surpassing management’s growth guidance, prompting analysts to raise full-year profit forecasts. UOB Kay Hian reiterated its "Buy" rating on Waterdrop Inc. and set a target price of $2.91.
In Q3 2025, Waterdrop reported net operating revenue of RMB 975 million and net profit attributable to shareholders of RMB 158 million, marking its 15th consecutive quarter of profitability. Operating expenses, including sales, administrative, and R&D costs, accounted for 39.6% of revenue, down 8.3 percentage points YoY. Insurance-related revenue reached RMB 870 million, up 44.8% YoY, while first-year premiums grew 32.3% quarter-over-quarter (QoQ). The digital clinical trials business generated revenue of approximately RMB 31.9 million, a 31.3% YoY increase.
Since announcing its share repurchase program in September 2021, Waterdrop has repurchased about 58.1 million ADSs (American Depositary Shares) from the open market as of November 30, 2025. The company’s YoY profit growth in Q3 underscored the cost-saving and efficiency-boosting effects of AI integration. Under its "All in AI" strategy, Waterdrop has deployed AI models across core insurance operations, including underwriting, customer service, quality control, product innovation, sales, and marketing.
Key AI-driven achievements include: - AI-powered medical insurance expert assistance contributed to an 82% QoQ increase in premium scale. - AI insurance customer service assistant "Baoxiaohui" handled over 600,000 inquiries monthly. - AI underwriting expert "KEYI.AI" streamlined workflows, reducing response times from minutes to near-instantaneous processing.
Founder and CEO Shen Peng stated, "In Q3, AI technology served as the core driver for business optimization, fueling double-digit revenue and profit growth. Moving forward, we will continue leveraging technological advancements to deepen AI integration across all business segments, fostering sustainable high-quality growth. Our commitment remains to deliver long-term value for users, partners, and shareholders."