ZA ONLINE's profit structure is undergoing a substantial transformation. On March 19th, the company released its 2025 annual report, disclosing a net profit attributable to shareholders of RMB 1.102 billion, an increase of 82.5% year-on-year. After excluding short-term fluctuations and other factors, the adjusted net profit attributable to shareholders reached RMB 1.800 billion, representing a growth rate of 198.3%. Beyond the absolute numerical growth, a more critical signal lies in the shift in profit sources. Historically, ZA ONLINE's performance was often viewed as reliant on scale expansion fueled by internet dividends; now, the financial data points to the compression of internal expenses and an improvement in underwriting quality.
In 2025, total investment income rose by 59.1% year-on-year, providing support to the income statement. However, dissecting the core drivers reveals that the underwriting segment's profitability for five consecutive years forms a more crucial business foundation. During the period, ZA ONLINE's combined ratio (COR) decreased by 1.1 percentage points to 95.8%. Against the backdrop of a slight increase in the loss ratio due to business structure adjustments, the composite expense ratio dropped from 42.2% last year to 38.7%. This 3.5 percentage point reduction directly contributed to the current period's profits, with the underlying driver attributed to the penetration of technologies like AI into the business chain – it was disclosed that in 2025, ZA ONLINE's large model calls exceeded 2 billion, consuming over 3 trillion tokens. The direct financial translation is seen in the improvement of personnel efficiency, with a single manual agent now capable of serving 100,000 end-users. In health insurance claims processing, the proportion of automated reviews has surpassed 45%. The technological substitution for human labor in operational segments is building a cost barrier at the current stage.
The growth in premium scale has also been accompanied by strategic choices and adjustments in structure. The Health Ecosystem, as the core business, generated total premiums of RMB 12.68 billion, a year-on-year increase of 22.7%. Within this, the "Zhong Min Bao" series saw premium growth of 456.1%, becoming the primary driver for this segment. The Digital Lifestyle and Auto Ecosystems constituted the main contributors to premium growth. Pet insurance premiums approached RMB 1.3 billion, growing 88.2% year-on-year, aligning with current consumption trends. Overall auto insurance premiums grew by 34.6%. Notably, new energy vehicle (NEV) insurance premiums surged by over 200%, increasing their share of the total auto insurance premium to 28.3%. At a time when the broader industry generally grapples with the high loss frequency and high loss ratios of NEV insurance, ZA ONLINE managed to control the segment's combined ratio at 93.1%, outperforming the industry average and demonstrating the effectiveness of its early-stage data-driven pricing models.
Conversely, the consumer finance business premiums were proactively reduced by 10.6%. Amid macroeconomic uncertainties, management opted to scale back to control underlying asset risks, reflecting a prudent operational focus prioritizing risk control quality.
The consolidated Hong Kong business also reached a clear financial inflection point. In 2025, the Hong Kong virtual bank ZA Bank achieved its first full-year profit, recording a net profit of HKD 17.27 million. During the period, its retail user base surpassed 1 million, and net revenue increased by 62.7% year-on-year. This indicates that ZA Bank has moved past the initial customer acquisition investment phase and entered a period of normalized commercial monetization. At the group level, this previously loss-making operation is transforming into a positive financial contributor.
Regarding fundamental financial metrics, ZA ONLINE maintained ample liquidity. The comprehensive solvency adequacy ratio was recorded at 242%, and net cash flow from operating activities increased from RMB 1.98 billion to RMB 3.54 billion.
Nevertheless, potential disruptions to the income statement persist. In 2025, against the backdrop of an 18.4% rise in the Shanghai Composite Index, ZA ONLINE increased its allocation to equity investments from 4.3% to 7.6% in line with market conditions. This implies that if capital markets experience volatility or a correction in 2026, the amplified asset exposure will be directly reflected in fair value gains and losses, thereby exerting pressure on the net profit for that period. Following the realization of the core business's cost-reduction and efficiency-improvement logic, managing volatility from the investment side will be a practical challenge ZA ONLINE must address during its profit release phase.