Huize Holding Limited Reports Fourth Quarter and Full Year 2020 Unaudited Financial Results
Huize Holding Limited (NASDAQ: HUIZ) reported robust financial results for Q4 and the full year 2020. Q4 total Gross Written Premiums (GWP) surged 63% to RMB1,047 million, while annual GWP rose 49.9% to RMB3,019.9 million. Operating revenue also climbed 50.3% in Q4 to RMB388.1 million, and 22.8% for the year to RMB1,220.2 million. Despite these gains, the company recorded a net loss of RMB27 million for Q4 and RMB18.3 million for the year, a decline from 2019's profit. Looking ahead, Huize expects Q1 2021 revenue between RMB650 million to RMB700 million.
- Q4 GWP increased by 63% to RMB1,047 million, a record quarterly high.
- Total operating revenue for Q4 rose by 50.3% to RMB388.1 million.
- Total GWP for the full year increased by 49.9% to RMB3,019.9 million.
- Cumulative number of insurance clients served reached 6.8 million.
- Net loss for Q4 was RMB27 million, compared to a loss of RMB7.5 million in Q4 2019.
- Full year net loss of RMB18.3 million versus a profit of RMB15 million in 2019.
- Operating costs increased significantly by 82.1% in Q4 due to higher service fees.
SHENZHEN, China, March 10, 2021 (GLOBE NEWSWIRE) -- Huize Holding Limited, (“Huize”, the “Company” or “we”) (NASDAQ: HUIZ), a leading independent online long-term life and health insurance product and service platform for new generation consumers in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2020.
Fourth Quarter and Full Year 2020 Highlights:
- Total Gross Written Premiums (“GWP”) facilitated on our platform in the fourth quarter of 2020 increased by
63.0% to a record quarterly high of RMB1,047.0 million, compared to RMB642.5 million in the fourth quarter of 2019. Total GWP facilitated on our platform for the full year of 2020 increased by49.9% to RMB3,019.9 million from RMB2,014.3 million in 2019. - Total operating revenue in the fourth quarter of 2020 increased by
50.3% to a record quarterly high of RMB388.1 million (US$59.5 million ), compared to RMB258.3 million in the fourth quarter of 2019. Total operating revenue for the full year of 2020 increased by22.8% to RMB1,220.2 million from RMB993.3 million in 2019. - Cumulative number of insurance clients served increased to approximately 6.8 million, and cumulative number of insured clients was approximately 57.6 million as of December 31, 2020.
Mr. Cunjun Ma, Founder, Chairman and Chief Executive Officer of Huize, commented, “Despite the uncertain macro conditions throughout the year, we delivered robust results due to our years of experience in the insurance industry, the competitive advantages of our online platform business model, our unique focus on long-term insurance products distribution and our industry-leading digital development capabilities.”
“During the year, we constantly enriched our product offerings. For example, we launched the “Darwin 3” critical illness insurance, which was yet another success of our proprietary “Darwin” product line. We also took the lead in the customization of annuity products and launched our first online version of joint-life annuity which was also a unique feature and innovation in China’s online insurance market. Moreover, we launched AI Proposal application and a new version of consultant workstation in order to improve service capabilities and client experience. As the pandemic further accelerated the switch of insurance purchase preference from offline to online, our differentiated services and market reputation enabled us to continue attracting and converting new users.”
“Such achievements are the driving force behind our ongoing development and advancement. Looking ahead, we are confident in the prospects of the online insurance industry in China, and we aim to further establish Huize as the go-to digital insurance product and service platform for the new generation consumers empowered by data and technology.”
“In order to achieve this goal, we will fully embrace digitalization, continuously strengthen our technology research and development as well as talent acquisition, and enhance Huize’s core competencies. At the same time, we will promote a comprehensive strategic upgrade by expanding our offline business in first-tier cities such as Shanghai and Shenzhen by setting up high value client service centers to further optimize the service experience and maximize clients’ lifetime value. Moreover, we will strengthen our collaborations with upstream and downstream partners along the industry value chain and we expect Huize to become a more open platform with a fuller range of products and services in its insurance ecosystem, including medical and healthcare. Additionally, we will take full advantage of the capital markets, actively identify high-quality investment targets, and improve our platform’s value proposition and market positioning through mergers and acquisitions to further realize our development strategy.”
Fourth Quarter 2020 Financial Results
Total operating revenue
Total operating revenue in the fourth quarter of 2020 increased by RMB129.8 million, or
Total operating costs
Cost of revenue in the fourth quarter of 2020 increased by RMB131.3million, or
Total operating costs in the fourth quarter of 2020 increased by RMB131.5 million, or
Operating expenses
Selling expenses in the fourth quarter of 2020 increased by RMB9.7 million, or
General and administrative expenses in the fourth quarter of 2020 increased by RMB2.8 million, or
Research and development expenses in the fourth quarter of 2020 increased by RMB4.0 million, or
Net profit and Non-GAAP net profit for the period
Net loss in the fourth quarter of 2020 was RMB27.0 million (US
Full Year 2020 Financial Results
Total operating revenue
Total operating revenue for the full year of 2020 increased by RMB226.9 million, or
Total operating costs
Cost of revenue for the full year of 2020 increased by RMB184.0 million, or
Total operating costs for the full year of 2020 increased by RMB185.0 million, or
Operating expenses
Selling expenses for the full year of 2020 increased by RMB65.7 million, or
General and administrative expenses for the full year of 2020 decreased by RMB11.6 million, or
Research and development expenses for the full year of 2020 increased by RMB15.3 million, or
Net profit and Non-GAAP net profit for the year
Net loss for the full year of 2020 was RMB18.3 million (US
Cash and cash equivalents
As of December 31, 2020, the combined balance of the Company’s cash and cash equivalents amounted to RMB404.6 million (US
Business Outlook
Based on the Company’s preliminary assessment of the current market conditions, the Company currently expects total operating revenue for the first quarter of 2021 to be in the range of RMB650 million to RMB700 million. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change as a result of various market uncertainties, including those related to the continued outbreak of COVID-19 globally.
Share Repurchase Program
As of December 31, 2020, the Company had purchased an aggregate of 44,809 ADSs for a total amount of approximately US
Conference Call
The Company’s management team will hold a Direct Event conference call on Wednesday, March 10, 2021, at 7:00 A.M. Eastern Time (or 8:00 P.M. Beijing Time on the same day) to discuss the financial results. Details for the conference call are as follows:
| Event Title: | Huize Holding Limited Fourth Quarter 2020 Earnings Conference Call |
| Conference ID: | #7894339 |
| Conference ID: | http://apac.directeventreg.com/registration/event/7894339 |
All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique access PIN, which can be used to join the conference call.
A replay of the conference call will be accessible through March 18, 2021, by dialing the following numbers:
| International: | +61-2-8199-0299 |
| Mainland China Toll Free: | 400-632-2162 |
| United States Toll Free: | +1-855-452-5696 |
| Hong Kong, China Toll Free: | 800-963-117 |
A live and archived webcast of the conference call will also be available at the Company’s investor relations website at ir.huize.com.
About Huize Holding Limited
Huize Holding Limited is a leading independent online insurance product and service platform in China. Targeting the younger generation, Huize is dedicated to serving its insurance clients for their life-long insurance needs. Leveraging its online platform, Huize offers a wide variety of insurance products with a focus on long-term life and health insurance products, and empowers its insurer partners to reach a large fragmented client base in the insurance retail market efficiently and enhance their insurance sales. Huize provides insurance clients with digitalized insurance experience and services, including suitable product recommendations, consulting service, intelligent underwriting and assistance in claim application and settlement, which significantly improve transaction experience.
For more information, please visit http://ir.huize.com.
Use of Non-GAAP Financial Measure Statement
In evaluating our business, we consider and use non-GAAP net profit/(loss) as a supplemental measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define non-GAAP net profit/(loss) as net profit/(loss) excluding share-based compensation expenses and interest on convertible bond. Such adjustments have no impact on income tax because either the non-GAAP adjustments were recorded at entities located in tax free jurisdictions, such as the Cayman Islands or because the non-GAAP adjustments were recorded at operating entities located in the PRC for which the non-GAAP adjustments were not deductible for tax purposes.
We present the non-GAAP financial measure because it is used by our management to evaluate our operating performance and formulate business plans. Non-GAAP net profit/(loss) enables our management to assess our operating results without considering the impact of share-based compensation expenses and the interest on convertible bond. We also believe that the use of this non-GAAP financial measure facilitates investors’ assessment of our operating performance.
This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net profit/(loss) is that it does not reflect all items of income and expense that affect our operations. Further, the non-GAAP financial measure may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited.
The non-GAAP financial measure should not be considered in isolation or construed as an alternative to net profit/(loss) or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measure in light of the most directly comparable GAAP measure, as shown below. The non-GAAP financial measure presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measures differently, limiting the usefulness of such measures when analyzing our data comparatively. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB6.5250 to US
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Huize’s beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, business outlook and quotations from management in this announcement, contain forward-looking statements. Huize may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Huize’s goal and strategies; Huize’s expansion plans; Huize’s future business development, financial condition and results of operations; Huize’s expectation regarding demand for, and market acceptance of, its online insurance products; Huize’s expectations regarding its relationship with insurer partners and insurance clients and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing.
Further information regarding these and other risks is included in Huize’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Huize does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For investor and media inquiries, please contact:
Investor Relations
Harriet Hu
Investor Relations Director
+852 3180 9207
investor@huize.com
Media Relations
mediacenter@huize.com
Huize Holding Limited
Unaudited Consolidated Balance Sheets
(all amounts in thousands, except for share and per share data)
| As of December 31 | As of December 31 | ||||||||
| 2019 | 2020 | ||||||||
| RMB | RMB | USD | |||||||
| Assets | |||||||||
| Current assets | |||||||||
| Cash and cash equivalents | 88,141 | 404,618 | 62,010 | ||||||
| Restricted cash | 161,186 | 324,330 | 49,706 | ||||||
| Contract Assets | - | 216 | 33 | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 180,393 | 232,589 | 35,646 | ||||||
| Insurance premium receivables | 2,329 | 1,974 | 303 | ||||||
| Amounts due from related parties | 280 | 251 | 38 | ||||||
| Prepaid expense and other receivables | 29,196 | 44,377 | 6,801 | ||||||
| Total current assets | 461,525 | 1,008,355 | 154,537 | ||||||
| Non-current assets | |||||||||
| Property, plant and equipment, net | 8,006 | 10,251 | 1,571 | ||||||
| Intangible assets, net | 1,652 | 2,030 | 311 | ||||||
| Deferred tax assets | 64 | 605 | 93 | ||||||
| Long-term investments | 23,395 | 46,084 | 7,063 | ||||||
| Operating lease right-of-use assets | - | 267,352 | 40,973 | ||||||
| Goodwill | - | 461 | 71 | ||||||
| Other assets | 14,163 | 838 | 128 | ||||||
| Total non-current assets | 47,280 | 327,621 | 50,210 | ||||||
| Total assets | 508,805 | 1,335,976 | 204,747 | ||||||
| Current liabilities | |||||||||
| Short-term borrowings | 36,880 | 31,540 | 4,834 | ||||||
| Accounts payable | 124,441 | 227,532 | 34,871 | ||||||
| Insurance premium payables | 125,587 | 187,219 | 28,693 | ||||||
| Other payables and accrued expenses | 30,211 | 31,153 | 4,774 | ||||||
| Payroll and welfare payable | 43,993 | 63,919 | 9,796 | ||||||
| Income taxes payable | 206 | 2,440 | 374 | ||||||
| Operating lease liabilities | - | 12,763 | 1,956 | ||||||
| Amounts due to related parties | 465 | - | - | ||||||
| Total current liabilities | 361,783 | 556,566 | 85,298 | ||||||
| Non-current liabilities | |||||||||
| Long-term borrowings | - | 53,860 | 8,254 | ||||||
| Deferred tax liabilities | 530 | 605 | 93 | ||||||
| Operating lease liabilities | - | 252,106 | 38,637 | ||||||
| Payroll and welfare payable | - | 4,156 | 637 | ||||||
| Other non-current liabilities | 518 | - | - | ||||||
| Total non-current liabilities | 1,048 | 310,727 | 47,621 | ||||||
| Total liabilities | 362,831 | 867,293 | 132,919 | ||||||
| Mezzanine equity | |||||||||
| Series A redeemable preferred shares | 84,072 | - | - | ||||||
| Series B redeemable preferred shares | 261,272 | - | - | ||||||
| Series B+ redeemable preferred shares | 81,654 | - | - | ||||||
| Series B++ redeemable preferred shares | 27,629 | - | - | ||||||
| Total mezzanine equity | 454,627 | - | - | ||||||
| Shareholders’ (deficit)/equity | |||||||||
| Common shares | 33 | - | - | ||||||
| Class A common shares | - | 62 | 10 | ||||||
| Class B common shares | - | 10 | 2 | ||||||
| Treasury stock | - | (2,063 | ) | (316 | ) | ||||
| Additional paid-in capital | 64,882 | 884,920 | 135,620 | ||||||
| Accumulated other comprehensive income | 414 | (21,972 | ) | (3,368 | ) | ||||
| Accumulated deficit | (373,982 | ) | (392,274 | ) | (60,120 | ) | |||
| Total shareholders’ (deficit)/equity | (308,653 | ) | 468,683 | 71,828 | |||||
| Total liabilities, mezzanine equity and shareholders’ equity | 508,805 | 1,335,976 | 204,747 | ||||||
Huize Holding Limited
Unaudited Consolidated Statements of Comprehensive Income
(all amounts in thousands, except for share and per share data)
| For the Three Months Ended December 31, | For the Year Ended December 31, | |||||||||||||||||
| 2019 | 2020 | 2019 | 2020 | |||||||||||||||
| RMB | RMB | USD | RMB | RMB | USD | |||||||||||||
| Operating revenue | ||||||||||||||||||
| Brokerage income | 253,607 | 386,795 | 59,279 | 982,124 | 1,215,434 | 186,273 | ||||||||||||
| Other income | 4,656 | 1,279 | 196 | 11,195 | 4,788 | 734 | ||||||||||||
| Total operating revenue | 258,263 | 388,074 | 59,475 | 993,319 | 1,220,222 | 187,007 | ||||||||||||
| Operating costs and expenses | ||||||||||||||||||
| Cost of revenue | (159,913 | ) | (291,204 | ) | (44,629 | ) | (629,531 | ) | (813,507 | ) | (124,675 | ) | ||||||
| Other cost | (523 | ) | (662 | ) | (101 | ) | (1,837 | ) | (2,846 | ) | (437 | ) | ||||||
| Total operating costs | (160,436 | ) | (291,866 | ) | (44,730 | ) | (631,368 | ) | (816,353 | ) | (125,112 | ) | ||||||
| Selling expenses | (61,815 | ) | (71,509 | ) | (10,959 | ) | (164,665 | ) | (230,438 | ) | (35,316 | ) | ||||||
| General and administrative expenses | (34,532 | ) | (37,269 | ) | (5,712 | ) | (161,816 | ) | (150,207 | ) | (23,020 | ) | ||||||
| Research and development expenses | (11,825 | ) | (15,843 | ) | (2,428 | ) | (33,831 | ) | (49,135 | ) | (7,530 | ) | ||||||
| Total operating costs and expenses | (268,608 | ) | (416,487 | ) | (63,829 | ) | (991,680 | ) | (1,246,133 | ) | (190,978 | ) | ||||||
| Operating income/(loss) | (10,345 | ) | (28,413 | ) | (4,354 | ) | 1,639 | (25,911 | ) | (3,971 | ) | |||||||
| Other income/(expenses) | ||||||||||||||||||
| Interest expenses | 75 | (345 | ) | (53 | ) | (190 | ) | (1,157 | ) | (177 | ) | |||||||
| Unrealized exchange (loss) /income | (3 | ) | 29 | 4 | 362 | (9 | ) | (1 | ) | |||||||||
| Investment income | 43 | - | - | 718 | 137 | 21 | ||||||||||||
| Others, net | 2,456 | 916 | 140 | 12,676 | 10,177 | 1,559 | ||||||||||||
| Profit before income tax, and share of income/(loss) of equity method investee | (7,774 | ) | (27,813 | ) | (4,263 | ) | 15,205 | (16,763 | ) | (2,569 | ) | |||||||
| Income tax expense | 319 | 845 | 130 | (57 | ) | (1,768 | ) | (271 | ) | |||||||||
| Share of income/(loss) of equity method investee | (90 | ) | 7 | 1 | (180 | ) | 239 | 37 | ||||||||||
| Net profit/(loss) | (7,545 | ) | (26,961 | ) | (4,132 | ) | 14,968 | (18,292 | ) | (2,803 | ) | |||||||
| Net (loss)/profit attributable to non-controlling interests | - | - | - | 66 | - | - | ||||||||||||
| Net profit/(loss) attributable to Huize Holding Limited | (7,545 | ) | (26,961 | ) | (4,132 | ) | 14,902 | (18,292 | ) | (2,803 | ) | |||||||
| Redeemable preferred shares redemption value accretion | (9,878 | ) | - | - | (32,854 | ) | (4,274 | ) | (655 | ) | ||||||||
| Allocation to redeemable preferred shares | 3,726 | - | - | (7,431 | ) | 1,074 | 165 | |||||||||||
| Net loss attributable to common shareholders | (13,697 | ) | (26,961 | ) | (4,132 | ) | (25,383 | ) | (21,492 | ) | (3,293 | ) | ||||||
| Net profit/(loss) | (7,545 | ) | (26,961 | ) | (4,132 | ) | 14,968 | (18,292 | ) | (2,803 | ) | |||||||
| Foreign currency translation adjustment, net of tax | 24 | (12,764 | ) | (1,956 | ) | 140 | (22,386 | ) | (3,431 | ) | ||||||||
| Comprehensive income/(loss) | (7,521 | ) | (39,725 | ) | (6,088 | ) | 15,108 | (40,678 | ) | (6,234 | ) | |||||||
| Comprehensive (loss)/income attributable to non-controlling interests | - | - | - | 87 | - | - | ||||||||||||
| Comprehensive income/(loss) attributable to Huize Holding Limited | (7,521 | ) | (39,725 | ) | (6,088 | ) | 15,021 | (40,678 | ) | (6,234 | ) | |||||||
| Weighted average number of common shares used in computing net profit per share | ||||||||||||||||||
| Basic and diluted | 452,445,068 | 1,022,959,829 | 1,022,959,829 | 452,445,068 | 963,817,614 | 963,817,614 | ||||||||||||
| Net income/(loss) per share attributable to common shareholders | ||||||||||||||||||
| Basic and diluted | (0.04 | ) | (0.03 | ) | (0.00 | ) | (0.06 | ) | (0.02 | ) | (0.00 | ) | ||||||
Huize Holding Limited
Unaudited Reconciliations of GAAP and Non-GAAP Results
(all amounts in thousands, except for share and per share data)
| For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||||
| 2019 | 2020 | 2019 | 2020 | ||||||||||||||
| RMB | RMB | USD | RMB | RMB | USD | ||||||||||||
| Net profit/(loss) | (7,545 | ) | (26,961 | ) | (4,132 | ) | 14,968 | (18,292 | ) | (2,803 | ) | ||||||
| Share-based compensation expenses | 13,617 | 4,208 | 645 | 94,958 | 52,253 | 8,008 | |||||||||||
| Non-GAAP net profit/(loss) | 6,072 | (22,753 | ) | (3,487 | ) | 109,926 | 33,961 | 5,205 | |||||||||
FAQ
What were Huize's total Gross Written Premiums (GWP) for Q4 2020?
How much did Huize's operating revenue grow in Q4 2020?
What was Huize's net loss for the year 2020?
What is Huize's revenue outlook for Q1 2021?
How did Huize's total operating costs change in Q4 2020?
