Q2 2022 Waterdrop Inc Earnings Call
Good morning ladies and gentlemen and thank you for standing by for Water Drop Inc's second quarter 2022 earnings conference call.
At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a Q&A session.
As a reminder, today's conference call is being recorded. I would now like to turn the meeting over to your host for today's call, Ms. Zhao Zhao Kui. Please proceed, Ms. Kui.
is being recorded. I would now like to turn the meeting over to your host for today's call Ms. Zhao Zhao Hui. Please proceed Ms. Hui.
Thank you, operator. Hello everyone. Thank you for joining WaterDrop's second quarter 2022 earnings conference call. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US private securities and the litigation reform act of 1992. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ securely from our current expectations.
Potential risks and uncertainties include, but are not limited to, those outlined in our public findings with ICT. The company does not undertake any obligation to obtain any forward-looking statement, except as required under applicable law.
Also, this call includes discussion of certain non-GAAP measures. Please refer to our earnings release for our expression of the agent between non-GAAP and GAAP.
Joining us today on the call are Mr. Sheng Peng, our founder, chairman, and CEO . Mr. Yang Guang, co-founder, director, and VP. Mr. Gu Yao, co-founder, director, and VP. Mr. Yang Wei, our partner. Mr. Zhu Zhecao, partner and general manager on medical crowdfunding and patient services.
We will be available for Q&A session after the remarks.
Now I would like to turn the call over to our CEO , Mr. Shimpung. Please go ahead.
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Hello everyone, thank you for joining our second quarter 2022 earnings conference call. There have been a range of external challenges and uncertainties in this quarter. The demand for insurance products has been delayed as a result of increasing consumer confidence caused by the COVID resurgence and other external factors.
Despite these headwinds, Autodog is still firmly committed to being user-centric, better in developing its business, and creating shareholder value. We also proactively explore new business opportunities in this evolving market environment.
In the second quarter, they made further progress on reforming our business strategy, maintain momentum and achieve the record high profitability.
Our revenues increased by 8.1% quarter over quarter. We achieved non-net profit for three conservative quarters and net profit for two conservative quarters. On top of this, our net profit almost doubled sequentially, reaching RMB 207 million and once again exceeding RMB citations.
Despite some cross-quarter fluctuations and the fact that our insurance business is currently the only profit contributor, our brilliant results confirm that we have entered into a phase of steady profitability.
In the second half of 2022, we will appropriately increase our investments in new businesses.
Although the current economic cycle is near-bonding, we remain optimistic about the Chinese economy and the health care industry, and will maintain our strategy of achieving high-quality and sustainable development.
Our confidence comes from our strong determination. We will strive to achieve the goal we set for the shareholders at the beginning of the year, which is to achieve a healthy and sustainable operating profit for our existing business for 2022.
Thank you for your attention.
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In the last few quarters, we have adjusted our business strategy from pursuing scale expansion and rapid growth to cultivating a healthier and more sustainable world.
Our operating and financial performance is heading in a positive direction.
Having said that, we have been constantly reviewing our business strategy, and in the second quarter, we made some realignment to our organizational structure and business division.
We believe center adjustment will allow us to achieve even higher goals in future.
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Our current strategy remains to enhance the value of our products and cater to users' needs.
We adhere to two principles when implementing this strategy, some operations with full compliance and a high quality and sustainable development.
Specifically, in daily operations, we have proposed four pillars to prioritize management, efficiency, service quality, and reputation, so as to achieve the refinement and implementation of our strategy.
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Looking to the second half of the year and beyond, we will strive to implement our development strategies, strengthen our capabilities, and cope with market changes in a proactive, flexible, and ethical way. We will identify new business opportunities and spare no effort to explore a healthier growth model.
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Overall, the implementation of our strategy will build on the solid frameworks formed by our product innovation capabilities, technological innovation, and the synergies created among various unique business segments.
Particularly in the near future, with China's population aging more rapidly, the upcoming demand for insurance coverage will continue to increase and evolve.
We will persist in working hard and keeping in a low profile. We also strive to leverage our solid fundamentals and high technological capabilities to efficiently and accurately explore new opportunities that emerge at any time, and do our best to reap additional returns from the new model.
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As a technology platform for insurance and healthcare services, since our inception in 2016, we have persistently adhered to our mission of leveraging Internet technologies to make insurance protection more inclusive and accessible to the public and bring insurance and healthcare services to billions.
In July , we released our 2020-21 ESG report, which was the first ESG report published since our IPO. The report details our responsibilities, technology and products.
industry value chain, workplace, development, green development and other relevant topics.
It also illustrates how we leverage our innovative business model and technological innovation to achieve effective business performance and sustainable process.
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We attach great importance to our reactive efforts. Along with our strict compliance with relevant laws and regulations, we have developed rigorous management systems in corporate governance, compliance operations, supplier management, employee management, and low-carbon green development. At the same time, we also leverage our business strengths and technological innovations to integrate resources from various partners, thereby promoting sustainable creation of social life.
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In addition, we are actively engaged in establishing a multi-layer medical protection system that serves as a supplementary layer throughout our water drop medical crowdfunding, water drop insurance marketplace, water drop charity and other businesses so as to prevent critically ill patients from becoming impoverished. As of the end of Q2, a total of 412 medium patients.
million donors provided nearly 53.3 billion RMB to millions of patients with critical illnesses through our WaterDrop medical crowdfunding platform, leveraging our sophisticated technology.
The Woodard Rock charity platform has helped improve the efficiency of fundraising and fund utilization by providing charity organizations with all-around support. Our other campaigns cover a wide range of areas including anti-pandemic actions, disaster relief, poverty alleviation, and rural revitalization.
This initiative proves that we will adhere to being a responsible company with social responsibility and doing business for growth as we pursue business growth.
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Finally, back to you, Javi.
As a leader in our industry, we are committed to driving the healthy development of the ecosystem. In response to the authorized fundraising activities in the medical crowdfunding industry, we collaborated with other major medical crowdfunding platforms to cut down on such activities in June . Some intermediaries have acted in the name of helping patients with critical illnesses with funds on medical crowdfunding platforms.
and charged them on authorized referrals for high commissions. This malicious activity not only damages the healthy ecosystem of the industry, but also harms the interests of donors and fundraisers.
Our Well-Dawn medical crowdfunding platform has taken preemptive shifts to identify such unauthorized fundraising activities with high accuracy through a stringent review process and risk control system. On the one hand, our risk management team contacts the fundraisers to verify their crowdfunding claims based on reports and complaints we receive from users. On the other hand, we have developed a model powered by algorithm and AI technology tools.
analyze fundraising activities based on information and cases referral came from researchers and donors and proactively screen and identify suspicious Dal handed me the RA screening okay so would I find that if I received thehop rap or you know hang out with other other entities
Our crowdfunding consultant further verified pages by conducting on-site visits and interviews.
Once confirmed, we blacklist the fundraisers who have involved in the identified cases so that they will no longer be able to initiate another campaign. At the same time, those malicious intermediaries are restricted from any access, forwarding, or permission on the platform.
Thanks to these relentless efforts, the number of authorized fundraising activities on our platform has been significantly reduced.
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However, recently we have seen some reports posted in the media which have not clearly distinguished between our crowdfunding platform and those malicious intermediaries.
Stating that WaterJob has charged high service fees for its medical crowdfunding business, leading some users and the public to misunderstand that WaterJob receives a large percentage of the fundraising amount.
This has also led to some misunderstandings about what is the action in cracking down on the unauthorized referrals.
We would like to clarify that we have always taken a responsible approach to our cracking down on misconduct, safeguarding research rights, and promoting the industry's healthy development.
Even though this is not an easy task, we remain committed to doing the right things despite the top challenges.
We have subsidized the operating costs of our medical crowdfunding platform since its re-establishment for five years.
Starting from this April , we plan to charge a service fee of 3% of the fundraising amount to support our platform's operations and wind controls.
We have never charged high services and have pledged to regain our authorized activities.
We have disclosed all of our fundraising campaigns and detailed fund flows to the public, and welcomed supervision from our users and the public, and will take legal measures to bring illegal intermediaries to justice.
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As of today, our WaterDot Medical Core Forming Platform has identified and taken legal actions in over 800 authorized property-making referral cases, targeting more than 600 intermediaries engaged in malicious and authorized activities.
We will make every effort to provide the best services for patients with critical illnesses, cater to patients' urgent medical needs, and develop the most reliable medical crowdfunding platform for all users, thereby earning and keeping the trust of each of our customers.
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Regarding shared buyback, we continue to implement our repurchase program. In the second quarter, we repurchase approximately 1.61 million ADS and we are continuing to execute the program presently.
At the end of June 2022, the company held cash-on-cash equivalents and short-term investments totaling 3,288 million RMB.
After offsetting the cash outflow for share repurchase, we still achieved the positive cash inflow of over 360 million RMB for the single portal.
At this earnings release, we are announcing that we launch a new share repurchase program so as to continue to buy back shares for another 12 months.
in which we upset the upper limit and may repurchase up to 80 million US dollars worth of our ABS.
This is a decision that was made based on the judgment of the company's current value and our confidence in our long-term sustainable development.
Meanwhile, we plan to reserve repurchase for shares incentive plans, which will align the interest of our employees with the growth of the company.
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We'd like to thank you for your support. We'd like to thank you for your support.
To conclude, with people's growing demand for health care in China, and as we continue to strengthen our competitive advantages in products, innovation, and business sector synergies, we still believe that the online insurance and health care sectors offer us tremendous and untaxed opportunities. In this changing environment, we will remain committed to our mission, keeping the focus on user values, solidifying business fundamentals, and pursuing continuous improvement..
At the same time, we will also adhere to strict budgeting and objective management, and continue to optimize the structure and quality of our business goals.
thereby achieving healthy and sustainable profitability of our established business for the full year.
Thank you for your attention.
I will pass to Ranwei to discuss the development of the water drop insurance business for Q2. Okay, thank you, Shenzhen. Hello everyone. Let me give you an update on our insurance business development. Life and health insurance premium growth in China was neck-ish for the first half of 2022 and has underperformed the PNC insurance industry. In a while, the life and health insurance reform has not yet had a pronounced effect on the market.
and the demand for critical illness insurance products remained weak. Shared performance of the listed insurance company has been languished at a low level for a long time, and their valuation touched a new low at the end of April . Against this backdrop, we have been proactively reforming our...
model, optimizing our business operations and definitely the transformation of our worst moment.
This has helped improve our operational...
operational efficiency and strengthen the resilience of our business with new growth drivers. In Q2, our net profit reached RMB207 million, up by 97% on a sequential basis. With the entire profit derived from our insurance business, now I will walk you through the business performance of our insurance business across four contexts.
First, results of our business model reform.
Looking at the...
parameters that demonstrate the continued profitability of our business. In Q2, we further optimized and upgraded our operating system with multiple platforms, multiple product sites, and multiple services.
service models while relentlessly pursuing improvements in both operating efficiency and quality. By streamlining our transaction processes to be more user-friendly and enriching our product offerings, we continued to see increased revenues from new customers and our tick rate remained at a relatively high level. Long-year LTV increased by 20...
2% quarter of culture and 101% year over year. In terms of the long-term insurance business, we refined our user group text based on which we upgraded the sales needs matching model to identify customers' needs more precisely. This has helped improve the customer service efficiency of our sales team. And a sales pro.
productivity per hour in-house LT increased by 28% culture over culture. At the same time, we have set up a dedicated team to analyze the sales and the sales collision chain of existing user groups.
Through interviews with user groups, we have improved user experience in the conversion and retention processes, thereby helping increase the three-month policy renewal rate of long-term insurance users up by 3 percentage points.
compared with that in previous quarters. In terms of existing customer management, we continue to develop our multiple platform of operational model for various marketing platforms, including our WeChat official accounts, WeChat mini programs, enterprise WeChat accounts, and the OneJob app. We clarified the long-term positioning of each of these channels to align them with the needs and preferences of different user groups.
We have strengthened our profit domain operation capability and improved the collaboration between our customer service team and our L-
P-Team, Yezzling, remarkable results in retaining core user groups. For instance, short-term interest premiums originated from this marketing channel, who it's about.
remarkable results in retaining core user groups. For instance, short-term interest premiums are originated from this marketing channel, Ritabao.
3 million time beat up by 60%. The number of active app users reached 3.4 million up by 47%. At the same time, we set up a dedicated team in our long-term interest business to explore additional protection needs of our existing users and to provide them with lifetime insurance solutions. The insurance premiums originated from the repeats.
purchases by existing long-term insurance customers decreased by
72% culture of culture, increasing the lifetime value of our users significantly.
and also consistently explore new customer acquisition models.
WeChat video accounts. We have continuously erased and polished our content metrics of our WeChat video accounts, heading into a faster growing source of the WeChat users. Thanks to our deep understanding of the communication patterns and user needs on this new marketing platform, the number of users following our video accounts increased by 44% of the culture.
and the total insurance premiums originated from this account increased by 113% sequentially.
Online breakage with have set up and dedicated unit in our insurance department to promote the online breakage business. With the insurance planner model included, leveraging our multiple multi-channel exploration in Q1, the insurance planner model has a clear operating model of customer attraction, live streaming and insurance content.
with the insurance planner responsible for promoting self-conversion, with the establishment of our live streaming team and our insurance planner team, the Lumber.
live streaming events increased and the number of live stream viewers grew by 140% with stripped code control in place, we have achieved an initial validation scaling up these operations.ironpac can.
product innovation. In Q2, we have continued to launch more high quality, insurance-mode products.
The total number of product offerings has increased by 44% this quarter. In terms of short-term insurance product offerings, we now have 11 different cost-effective versions of meaning IMB coverage medical insurance products. We also improved our critical units product by offering more flexible options for health declarations and premium payments.
Thanks to our ability to accurately match the leads, the policy renewal rate remains at a high level of 90%. In addition,
In the continued arrangement of our product offering has significantly improved our ability to reactivate solvent users. For example, to meet the needs of customers with pre-existing illness conditions, we launched Watch of the Ocean, a series of customized and cost-effective units.
The product has simplified the policy enrollment and claim settlement process and with the health declaration requirements while keeping the risk under control. This will to some extent is the concern of senior citizens and patients with chronic diseases who are seeking to purchase IC insurance. In addition, we have launched Water Job Cruiser, a new accident insurance product which reads
the health declaration requirements and relaxes the age limit for insurance applicants to 18 years old.
As returns from investment products offered by banks have tended downward, there is increasing custom demand for investment products that offer stable returns.
In response to this event, we added incremental live insurance policies to our long-term insurance product offerings in Q2. We also provided our
The sales team with special training on the distribution of these products especially to high network individuals. The insurance pre- incremental live industry products total the more than.
20 million IMB in second quarter.
Meanwhile, empowered by energy products launched in Q1, the private domain operating capability as traffic coming from our Antpress WeChat account, our long-term insurance team has achieved a quarter increase in energy insurance premiums of $320.
powered by energy products launched in Q1. And the private domain operating capability of traffic coming from our Ant Press WeChat account. Our long-term insurance team has achieved a total increase in energy insurance premiums of 324% in Q2.
Third, upgrades. Updates on also Girl Keeps business.
We continued to explore different broadcast service models in different regions and cities.
Q2, we have...
We had 11 regional market licenses. During the quarter, we set up a branch in Shaanxi and two new outlets in Hubei province. The Brokite team expanded to nearly 600 staff, reaching a total premium income of about $2.5 billion.
8 million time beat in car two.
4. Actively empower industry with technology.
In terms of technology export, we launched our project for Hualong property insurance in Q2. This is the first time that we have exported the...
The CRM system is deployed with AI-abundant capability to a third party. We currently have the ability to provide four chain marketing solutions for the insurance industry. This includes...
user acquisition, province domain management, and empowering
All offline agents with self-convision.
capability. Through these solutions, we can help insurance companies and insurance intermediaries digitalize their marketing process, thereby deriving user-based expansion and premium growth. In the second half of this year, we will continue to work with more partners on digital tech projects.
Above is a brief on the insurance business and let me head over to the top for updates of our medical for funding and patient recruitment business.
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I would like to share some updates on our medical crowdfunding business. As of the end of Q2, the cumulative number of donors, which is 412 million, helping 2.58 million patients with a promising RMB 53.3 billion cumulative rate.
Since April of this year, our platform has ceased to re-satisfy its service speed and started to charge a service speed of 3%, up to a minimum amount of RMB $5,000 for a single campaign.
This is to cover part of the operational cost and help more patients with critical illness response.
The user number and fundraising amount on our platform has remained stable even after the charge of service fee.
As part of our commitment to promote best practice and already development of the industry, we have recently established an operational transparency committee to continuously promote the authenticity of the campaign initiatives as our medical fundraising platform.
The fund for transparency as well as the personality and transparency of the platform rules.
The committee consists of water jobs, coal management team, experts in the view of law, charity and public media. Without the all, Mr. Shenpeng, head of the committee.
To better safeguard the rights and interests of both the fundraiser and the donors, the Committee will collaborate with public security authorities, hospitals, and other industry partners to crack down on fundraising board while actively seeking advice from the public to ensure that each donation is open, transparent, and treatable.
Meanwhile, the Committee will constantly interact with the experts and optimize the rules of the platform. In the future, WaterDrop will make every effort to avoid fraudulent fundraising and misappropriation of funds.
ensuring the overall security of funds raised from our platform.
Next, let me talk about the progress of our patient recruitment business.
the Q2
The COVID outbreak in various cities of China has adversely affected the launch of new clinical trials. Another is our e-fine patient platform sustains overall high growth momentum and successfully enroll at almost 8,700 patients for clinical trials.
The ePHINE patient platform also participated in over 60 new clinical trial programs by pairing with innovative pharmaceutical manufacturers including leading multinational enterprise in the industry. Bringing the total number of clinical trial programs for new drug registration to more than 300. This dataANC is available via fatty acids.
The EFI patient platform has now collaborated with more than 100 innovative pharmaceutical manufacturers and CIOs in China and worldwide, helping us with the wider condition of our partners and establish a good patient across industry.
has now collaborated with more than 100 innovative pharmaceutical manufacturers and CIOs in China and worldwide, helping us win the wider condition of our partners and establish a good patient across industry. In our team we have spend about how much money we have in the capacity of the than most BOAs
The platform has gone to become a leading patient recruitment platform in China, in particular for acronomy-related clinical joint.
Our deliberate efforts, capabilities in quickly, accurately recruiting patients suitable for the child project and high operational efficiency are jobless accomplishments.
We further expanded the scope of our critical child service in the same quality.
Apart from continuing to achieve rapid growth progress in oncology and chronic disease clinical trials, we also met new success in the rare disease segment.
But yes, we have seen patients with rare disease struggling to find the right medication but the dilemma has started to reverse as patients have gained more public attention recently. This has led to a significant increase in the number of clinical trials for rare disease.
However, as patients with rare diseases are widely dispersed across the country, it is challenging to enroll the appropriate patient to participate in trials of a new specific drug. This has longed down the progress of pharmaceutical companies in bringing new drugs to the market.
Nevertheless, we found that many of these patients are also registered users of our workshop medical crowdfunding platform who are seeking financial help after being praised by care engineers for years.
In Q2, we work with the stable partners on clinical trials for rarely these treatments. Using our structured data for these technologies, we are capable of matching patients with the most appropriate clinical trials.
thereby accelerating the high need and go-to-market progress of our panel.
This concludes my talk and let me turn over the call to Fuyi Yao to discuss our technology innovation topics.
Thank you, Gohtao. I'm going to talk about our 7-Quarter Technology Innovation Updates from 3x5.
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First, let's start from the Energetic Listing tool for medical upcoming research.
In response to malicious intermediaries who refer the needy to our medical crowdfunding services just to collect information, our AI team has applied knowledge mapping technology to analyze the statistical characteristics of sample cases and developed two models to identify the high-risk authorized farm feeding activities and the malicious intermediaries engaging such activities effectively. To date, the models have realized an accuracy rate of over 90%.
This has effectively reduced the number of malicious and authorized fundraising activities and enhanced our risk control capabilities for our medical company business.
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In Q2, we completed a major upgrade of our chatbot platform. We have upgraded it into an intelligent dialog platform by integrating various functions such as open chatbot, customer service chatbot, virtual employees and technology export projects.
For instance, we added the chat status features in our outbound chatbot.
by including eight types of chat data features and several modes. The chatbot is capable of engaging in more human-like dialogues with users, further including its intention recognition accuracy rates by 15%.
In addition, our customer service chatbot can solve more than 80% of inquiries raised by users, and the intention recognition technology achieved an accuracy rate of over 95% for the overall intelligent dialogue platform.
For transferring customers' requests from chatbot mode to manual mode on a real-time basis, we have upgraded our loss control model for phone calls to an intelligent dispatching algorithm, which enables us to further improve Salesforce productivity. According to users' needs and choice, we have also integrated this algorithm with our recommendation algorithm to offer a better user experience during the conversation.
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Our AI-powered content production platform provides a line-up of useful tools for content creators.
powered by AI capabilities. The platform will generate corresponding marketing content following the content materials submitted by the original creator.
While enriching our marketing content, the platform also helps improve efficiency and lower the cost of content production. Currently, we have developed three function modules for our platform, namely text generation, speech synthesis, and video synthesis.
To be more specific, first as for the speech synthesis, our platform can simulate human-like speeches with flexible configurations. Various types of reverberations and voice properties, such as speed and volume, are available in these speech synthesis.
Currently, the module supports six sound control functions.
Our team is also exploring the underlying intelligent speech technology of voice cloning, which we expect to integrate into our speech synthesis module in the future.
And second, in respect of video synthesis, the module has incorporated technologies related to lip syncs, AI-powered face swap, animations dial transfer, motion transfer, and virtual human-like broadcast.
The Leet Sync technology has been successfully applied in multiple business scenarios, including the WeChat video accounts of our brokers, as well as the video advertising promotions at Dovin.
I will now hand over to Yangguang to discuss our second quarter financial performance.
Thank you, Hui Yao. Hello, everyone. And we now will keep through our financial highlights for the second quarter of 2022.
Before I go into details on the financial performance, please be reminded that our numbers quoted here will be in RMB and please refer to our earnings release for the detailed information on our comparative financial performance on both the year-over-year and quarter-over-quarter business respectively.
Despite the challenging internal environment, we have entered a relatively stable profit-making stage after we turned profitable for three consecutive quarters. Our net operating revenue formed up and our net profit almost doubled on a quarter-over-quarter basis. Our net operating revenue decreased by 25.3% year-over-year to RMB.
701 meeting from RMB 939 meeting mainly due to the decrease in insurance related income by RMB 273 meeting but partially offset by the increase in the crowdfunding service fee of RMB 56 meeting. The decrease of interest related income was mainly due to the decrease in the first year premium but offset by the improvement of our tick rate.
Operating revenue growth sustained with a quarter over quarter increase of 8.1% in Q2.
which demonstrated a more healthy and solid growth trend. The tick rate further increased from 34% in Q1 to 38% in Q2.
primarily driven by the consistent quality enhancement in our inference business.
Operating costs and expenses for Q2 decreased by 68.9% year over year to RMB 546 meeting.
On quarter-over-quarter basis, operating costs and expenses increase marginally by 2.5%.
To break it down, operating costs were RMB 245 million down by 6.1% year over year, mainly due to the decrease in professional and all-source customer service fee or RMB 33 million and the decrease in personnel costs or RMB 58 million.
on quarter-over-quarter basis, operating costs increased by a
57.9% mainly due to the accounting reclassification of certain crowdfunding related service fees from sales and marketing expenses to operating costs as we started to charge crowdfunding service fees since April 2022.
Sales and marketing expenses decreased by 88.4% year-over-year to RMB 144 million for the second quarter of 2022.
The decrease was primarily due to 952 million decrease in marketing expenses to third-party traffic channels and 136 million decrease in all-source sales and marketing service fees to third parties.
So on a quarter over quarter basis, sales and marketing expenses also decreased by 29.3%.
GNA expenses decreased by 42.3% in Q2 to RMB 86 million year over year due to the combined impact or decrease of RMB 54 million in share based compensation expenses and the decrease of RMB 6.7 million in personnel cost. On quarterly basis the GNA expenses decreased by 15.6%.
R&D expenses decreased by 29.8% to R&D.
Seventy million year over year and it remains stable quarter by quarter reflecting the optimization of our organizational structure during last year.
In this quarter we continue to report a non-GAAP profit of RMB 233 million and a US GAAP net profit of RMB 207 million compared with the net loss in the same quarter of last year.
This once again proves the effectiveness of our business strategy to enhance the overall revenue quality.
As of June 30, 2022, our cash and cash equivalence and short-term investment balance increased to RMB 3288 million.
An increase of RMB is 364 million or 12.4% from the end of the last quarter.
despite actively implementing a shared report sheets program under the compliance framework.
So during the past few quarters, we have provided the following financial guidance, enhancing revenue quality and profitability and achieving profits for the full year of 2022.
In Q2, we have made good progress in delivering this guidance and encouraging new results.
So going forward we still made a step to deliver high quality goals and enhance our long term competitive stress.
Thank you, that's all for my part. Now let's turn to Q&A.
Thank you. We will now begin the question and answer session. To ask a question, you may press star 1 on your touch tone phone. If you are using a speakerphone, we ask you to please pick up your handset before pressing the keys.
To withdraw your question, please press star then 2.
We also ask that you please limit yourself to two questions at a time so that others can get their questions in as well. In addition, for those who speak Chinese, would you please ask your questions in Chinese first, followed by the English translation. We will now pause momentarily to assemble our roster.
And today's first question comes from Michael Lee at Bank of America. Please go ahead.
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Congratulations Benjamin for the performance in the second quarter. I saw the improvement of your insurance business.
in terms of pick rate and also product mix. So my question is what is your growth strategy for insurance business and any plans to upgrade your product mix and channels?.
Okay, thank you Michael, that's a very good question.
From a user growth perspective, there were three business models for growth. Directly to C, to A to C and to B to C. Our core growth driver is directly to C in the past. We also have developed our capability in 2A to C and 2B to C for a while. Going forward, there were opportunities for all of us to review these models.
So, how to directly to save roads? We needed to explore the opportunities in traffic ecosystems and deploy our resources accordingly.
First, let's look at the WeChat ecosystem. I will focus on four growth opportunities of WeChat ecosystem. First of all is the growth opportunity from Water Job Medical crowdfunding.
What Job Manager Confounding operates a 10 million level VAU platform where we effectively educate users about insurance protection and the insurance awareness.
And it can help us convert the users into millions of new short-term insurance customers and new gift insurance policyholders each year. The conversion efficiency in our confounding channel increased by more than 30%.
from the first half of 2022. The second is a good opportunity from the rise of WeChat's video accounts. WeChat is shifting its focus and traffic to WeChat video accounts, which already have 430 million DANUs so far. So users have seen better connections between their WeChat video accounts and WeChat video accounts and video programs.
making it a very new growth value for customer education and conversion.
So our weekend video comes now, the past 100 million monthly video viewship.
Weekend video content now surpasses 100 million monthly video viewship. Directed monthly flux.
flux of 300,000 new followers to our WeChat official account and posted two fold growth monthly premiums for the past few months in a row. The third one is growth opportunity from private domain operations and our ad price WeChat account.
The private domain operations of Adprice WeChat is another focus of WeChat. This platform offers strong user management functions and infrastructure support, and provides an effective means for rich users and user operations.
Our nPrice WeChat account has reached millions of users and continues to attract hundreds of thousands of new users each month..ae
tabulating its value.
The fourth one is the opportunity in refining our existing user management.
We consistently strengthen our user lifetime variables by utilizing different scenarios on many marketing platforms, match suitable interest products and services for our users in different scenarios, and further apply our AI capability to bolster online sales conversion.
So we have effectively improved our shelter features, because they just repeat per chief, they're the policy reviewers.
online user operations can also continuously depend on the status of user groups profiles and improve our
self-conversion capability.
which allows us to match our users' digital products and sell them more precisely and thereby facilitating the conversion from a feature to a more accurate version.
aboutaced shown here Thank you.
place an insurance policy holder to a long-term insurance customer.
In addition to WeChat ecosystem, we have also explored the growth opportunity in short video or concert platforms such as Doreen, Quest and Xiaojun.
Chinese let them spend more than half of their consumption time on short video or content platforms.
It leverages various marketing tools, including graphic aids, videos, and live streaming. It's easier to acquire high quality news, interest customers, better interest awareness, education background, and high income level from social media platforms.
So we engage these users at a quiet speed on the platform.
By our insurance planners who are more users-led or emptied, we will promote our insurance products to the users online.
Chinese marketing, thereby generating more incremental insurance premiums. The sales productivity is very high at around RMB 100,000 per capita. This presents an effective, efficient, and long-term insurance conversion model for the next generation insurance consumers. And also, it is a very important direction for our customers.
future investments and capabilities in it. In terms of 3 to 3, we're confident about...
Top lalight toong kampong del in the low yhia.
We think offline brokers serve as a very important component to our customer acquisition capability. In particular, they can help us acquire more middle class and upload to customers.
So we hope to build up a professional, productive and high quality offline book team dedicated to serving the Chinese new middle class and upper class residents.
Our short term goal is to build the fundamental team and the management system and the empowerment platform within the next 1, 2, 3 years while achieving growth at scale. We believe that it will become a powerful growth driver in the medium to long run.
Then under 2B2C front, we hope to achieve a win-win operation with partners who are rich in users' results by leveraging our stresses and our
in sustainability, our strength in sustainability, business product offerings and customer conversion. We have established a business product distribution platform to collect...
insurance companies, agencies, and individual brokers to improve the efficiency of insurance distribution and deliver mutual benefits for partners as well as consumers. On success, we have been leveraging our strong capability in user operations and conversion to launch self-lead collaboration with third party partners and help them to improve their business.
monotype there in the base. So these two 2B2C in this model have got in more than 10 million monthly premiums and it may take a faster growth trend.
In addition to the three growth models that I have mentioned, we believe insurance services for people with pre-existing medical conditions in hospitals and pharmacies now also have probative growth potential.
In China, there were more than 300 million people with pre-existing conditions, and their leads are look at the traditional...
In China, there are more than 300 million people with pre-existing conditions, and their lives are overlooked in traditional insurance models.
So we're able to accurately reach them.
accurately reach them and
We have customized various products to meet the needs of these people through product innovation. At present, we can reach tens of thousands of people with pre-existing conditions each month that have potential to convert to product innovation.
to different consumers which may bring incremental, previous and millions of times below.
So here's the sound.
Our cost growth drivers in the near term are the incremental user growth in the WeChat ecosystem and the existing user operation. In the mid term, in one or three years, in addition to the growth from the WeChat ecosystem, we are also positive about the growth from social media platforms last week, as well as the 2B distribution model. For long term, we believe our offline growth is business.
and insurance services for people with pre-existing conditions. Both are powerful growth drivers.
That's all. Thank you.
Thank you.
Thank you and our next question comes from King King Mao with CICC.
Hi, management. This is Qingting from CICC. Thanks for taking that question. We have seen some reports posted in media regarding the unauthorized fundraising activities and Malaysia's intermediate rates in the medical crowdfunding industry. We also mentioned about it in a previous presentation. The question is, could you further explain the surveys and revenue model of your crowdfunding platform and what's the current revenue contribution in Q2?
Thank you for your attention.
Thank you for your question. And let me translate for the power. As the leading online platform for patients with critical illness to seek financial help in China, Food Dog Medical Corporation provides users with comprehensive and detailed fundraising services, including detailed dedicated customer services, instant withdrawal of funds from recent acceleration and co-op.
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In order to maintain high quality services to our users, we seek to fully subsidize the service fees and started to charge service fees from April 17th. The decision was made after taking into account the industry research, expert advice and the platform's operational needs.
The service fee was equal to 3% of the withdrawal amount for a single campaign up to a maximum amount of 5,000 RMB. This is in addition to the 0.6% payment channel fee charged by the third party.
to every user, Warshe welcomed, we will not forget it for the time being to better relate this feature withARY to the implementation of web applications Thank you very much.
It should be clearly noted that the purpose of charging the service fee is to support the operational maintenance costs and expenses of the platform.
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As mentioned just now, we are committed to, as reported just now, the platform has facilitated fundraising of 2.3 billion RMB in this quarter. And we generated service fee income of RMB, 56 million for the funds raised, meaning that the overall pay grade is still lower than 3 percent because we still subsidized certain special cases where the patients are in critically serious situations.
We haven't covered all the costs for fundraising business yet. All of our profits of the Water Dog Group still came from the insurance related business only.
Thank you very much.
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Thank you for your attention.
As mentioned just now by Shampong, we are committed to driving the healthy development of the whole industry. In response to the authorized fundraising activities and the malicious intermediaries in the medical crowdfunding industry, we will continue to cross down on such activities.
The issue of unauthorized fundraising activity is not only the phenomenon in the field of medical crowdfunding industries, but also an issue relating to the Internet.
Governance.
In the future, we will continue to improve the quality of our services and provide users with more professional, detailed and sustainable services.
We will always actively take social responsibility and work hard in hand with the National Healthcare Security Administration and the regulatory authorities, as well as other relevant social organizations to make joint efforts to maintain the healthy ecosystem of the whole industry.
Thank you very much.
Thank you.
Thank you. And ladies and gentlemen, we are now approaching the end of the conference call. Thank you for your participation on today's conference. You may now disconnect and have a nice day.
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