SHENZHEN, China, Aug. 20, 2020 (GLOBE NEWSWIRE) — Huize Holding Limited, (“Huize”, the “Company” or “we”) (NASDAQ: HUIZ), a leading independent online insurance product and service platform in China, today announced its unaudited financial results for the three months ended June 30, 2020.Second Quarter 2020 Operational and Financial Highlights:Total Gross Written Premiums (“GWP”) facilitated on our platform increased by 51.0% to RMB596.0 million from RMB394.6 million in the second quarter of 2019.GWP of long-term life and health insurance products accounted for approximately 93.0% of total GWP facilitated, compared to 82.3% in the second quarter of 2019.Cumulative number of insurance clients served increased to approximately 6.5 million, and cumulative number of insured clients increased to approximately 54.4 million as of June 30, 2020.Total operating revenue increased by 17.6% to RMB235.0 million (US$33.3 million) from RMB199.9 million in the second quarter of 2019.Net loss was RMB3.7 million (US$0.5 million).  Non-GAAP net profit¹ was RMB14.1 million (US$2.0 million), representing the Company’s ninth consecutive profitable quarter on a non-GAAP basis.¹ Non-GAAP net profit is a non-GAAP financial measure. For more information, please see the section of “Use of Non-GAAP Financial Measure Statement” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.Mr. Cunjun Ma, Founder, Chairman and Chief Executive Officer of Huize, commented, “As the global economy was severely affected by the unfortunate COVID-19 outbreak in the first half of the year, the overall development of the insurance sector in China slowed down, with a single digit growth in GWP of 6.5% year over year. Despite the challenging macro conditions, we are pleased to report solid results outpacing industry growth. During the second quarter, total GWP facilitated on our platform increased by 51.0% year over year to RMB596.0 million, of which long-term life and health GWP accounted for 93.0%, a ratio which has stayed above 90% for the past three consecutive quarters. Furthermore, we have long been committed to seeking a balance between business growth and financial stability and were able to establish strong liquidity and a healthy financial position. As of quarter end, we had a combined cash and cash equivalents balance of US$63.3 million while we also recorded our ninth consecutive profitable quarter on a non-GAAP basis.”“As a data-driven and technology-empowered insurtech platform focused on transforming the distribution of long-term life and health insurance for the industry, we believe that the business model that we have developed and continue to optimize is the core to better serve our customers and drive customer lifetime value. In the second quarter, Huize launched AI Proposal – an innovative application utilizing artificial intelligence to automatically create personalized insurance proposals, which significantly reduced customer waiting time to just a matter of minutes. On June 16, Huize and Southwestern University of Finance and Economics announced an agreement to set up a joint laboratory to focus on the application of innovative technologies, such as big data and knowledge graph construction, in the insurance sector to enable the creation of more accurate actuarial models and further mitigation of adverse selection risks in online insurance.”“Going forward, we will continue to invest in technology such as data analytics and machine learning to further improve our capabilities in the areas of risk management, product customization, customer experience and operating efficiency. Looking ahead into the second half of 2020, we are confident in the prospects for both the development of the company and the entire industry. As the pandemic has forced the education of the market and accelerated the offline-to-online transition in consumer behavior, we believe we are well-positioned to capture the industry sweet spot and benefit from the growing opportunities.”Second Quarter 2020 Financial ResultsTotal operating revenueTotal operating revenue in the second quarter of 2020 increased by RMB35.1 million, or 17.6%, to RMB235.0 million (US$33.3 million) from RMB199.9 million in the same period of 2019. The increase in total operating revenue was primarily driven by an increase in brokerage income, which increased by 18.3% year over year to RMB234.2 million (US$33.1 million) in the second quarter of 2020. The increase in brokerage income was primarily driven by the 51.0% increase in total GWP facilitated which amounted to RMB596.0 million during the second quarter of 2020, of which first year premiums accounted for RMB319.7 million and renewal premiums accounted for RMB276.3 million.Total operating costsCost of revenue in the second quarter of 2020 increased by RMB13.4 million, or 10.7%, to RMB139.8 million (US$19.8 million) from RMB126.4 million in the same period of 2019, which was primarily attributable to increased personnel costs paid to insurance consultants and service fees paid to user traffic channels.  Total operating costs in the second quarter of 2020 increased by RMB13.7 million, or 10.8%, to RMB140.5 million (US$19.9 million) from RMB126.8 million in the same period of 2019, primarily attributable to the increase in cost of revenue.As a percentage of total operating revenue, total operating costs declined to 59.8% in the second quarter of 2020 from 63.4% in the same period of 2019.Operating expensesSelling expenses in the second quarter of 2020 increased by RMB14.4 million, or 42.7%, to RMB48.1 million (US$6.8 million) from RMB33.7 million in the same period of 2019. This increase was primarily attributable to increased personnel costs as we increased our headcount, an increase in share-based compensation expenses, and to a lesser extent due to an increase in advertising and marketing expenses.
                                            
General and administrative expenses in the second quarter of 2020 decreased by RMB34.8 million, or 44.5%, to RMB43.5 million (US$6.2 million) from RMB78.3 million in the same period of 2019. This decrease was primarily attributable to the decrease in share-based compensation expenses, which amounted to RMB15.5 million in the second quarter of 2020, compared to RMB61.8 million in the same period of 2019. Excluding the impact of share-based compensation expenses, general and administrative expenses in the second quarter of 2020 increased by 70.3% year over year. Research and development expenses in the second quarter of 2020 increased by RMB3.1 million, or 41.9%, to RMB10.6 million (US$1.5 million) from RMB7.5 million in the same period of 2019, primarily attributable to increase in number of R&D personnel.Net profit and Non-GAAP net profit for the periodNet loss in the second quarter of 2020 was RMB3.7 million (US$0.5 million), compared to a net loss of RMB40.6 million in the second quarter of 2019.  Non-GAAP net profit in the second quarter of 2020 was RMB14.1 million (US$2.0 million), compared to RMB21.2 million in the second quarter of 2019.Cash and cash equivalentsAs of June 30, 2020, the combined balance of the Company’s cash and cash equivalents amounted to RMB447.3 million (US$63.3 million), compared to RMB88.1 million as of December 31, 2019.  The increase was primarily due to the cash proceeds raised from the Company’s initial public offering in February 2020.Business OutlookBased on the Company’s preliminary assessment of the current market conditions, the Company currently expects total operating revenue for the third quarter of 2020 to be in the range of RMB310 million to RMB340 million. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change caused by various uncertainties, including those related to the ongoing COVID-19 pandemic.Share Repurchase ProgramAs of June 30, 2020, the Company had purchased an aggregate of 6,647 ADSs for a total amount of approximately US$0.04 million, under its share repurchase program pursuant to which the Company has been authorized to repurchase up to US$10 million ADSs by April 15, 2021, as previously announced on April 15, 2020.Conference CallThe Company’s management team will hold a Direct Event conference call on Thursday, August 20, 2020, at 8:00 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:
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 August 28, 2020, by dialing the following numbers: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. According to the Oliver Wyman Report, Huize was the largest independent online long-term life and health insurance product and service platform in China as measured by gross written premiums, or GWP facilitated in 2018.For more information, please visit http://ir.huize.com.Use of Non-GAAP Financial Measure StatementIn 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 InformationThis 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 RMB7.0651 to US$1.00, the exchange rate on June 30, 2020 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollars amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.Safe Harbor StatementThis 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:Huize Holding Limited
E-mail: [email protected]Jack Wang
ICR, Inc.
Tel: +1-212-365-4862
E-mail: [email protected]SOURCE Huize Holding Limited
Huize Holding Limited
Unaudited Consolidated Balance Sheets
(all amounts in thousands, except for share and per share data)Huize Holding Limited
Unaudited Consolidated Statements of Comprehensive Income
(all amounts in thousands, except for share and per share data)
Huize Holding Limited
Unaudited Reconciliations of GAAP and Non-GAAP Results
(all amounts in thousands, except for share and per share data)

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