On December 8, Morgan Stanley released a research report to the public.$Waterdrop (WDH.US)$"overmatched" rating.
The research newspaper pointed out that Waterdrop Inc. 's net profit in the third quarter reached 170 million yuan, its revenue was stable over the same period last year, rebounded by 10% month-on-month, and the net interest rate was 28%. It has made profits for three consecutive quarters this year, with a total profit of 482 million yuan in the first three quarters of 2022.
Since the third quarter of 2021, Waterdrop Inc. has adjusted its development strategy, carried out effective cost control measures, and achieved steady profits. Morgan Stanley research newspaper mentioned that Waterdrop Inc. 's continuous cost-cutting contributed to a substantial increase in profit margins, with its third-quarter profit exceeding its forecast by more than twice.
In the third quarter, Waterdrop Inc. 's first-year premium income reached 1.785 billion yuan, up 8.4% from the previous month and down 62% from the same period last year. At the same time, commission income fell only 9% from the same period last year. This means that the pragmatic yield of Waterdrop Inc. 's insurance industry has been greatly increased to 38.8%. (38% in the second quarter of 2022, 33.7% in the first quarter of 2022, and 16.4% in the third quarter of 21)
According to the research and report analysis, the increase in the proportion of income may come from the increase in the proportion of long-term serious illness insurance products. Financial data show that the structure of Waterdrop Inc. 's insurance products continued to optimize in the third quarter of 2022, and the first-year premium contributed by heavy illness insurance increased by 7.8% over the previous quarter, accounting for 28.6% of the total first-year premium.
Based on the continuous improvement of Waterdrop Inc. 's real yield, the new service fee income raised by Waterdrop Inc. and the continuous expansion of Waterdrop Inc. 's pharmaceutical innovation business, Morgan Stanley raised Waterdrop Inc. 's target share price from US $2.10 to US $2.30, or US $3.20 in an optimistic scenario.
Waterdrop Inc. is one of the first technology companies to enter the insurance and health care market in China, and is expanding into the field of medical and health services, the newspaper said. Waterdrop Inc. 's medical innovation business accounted for 3% of the revenue in the third quarter, which is relatively small for the time being, but it has begun to grow. Waterdrop Inc. 's financial report shows that the innovation business has developed rapidly in the third quarter, and Yifan Pharmaceutical has established cooperation with a number of leading pharmaceutical companies in the world. By the end of the third quarter, the total number of clinical trial projects involved had reached more than 400.