慧择保险上市IPO招股书（英文）-2019.9.4-318页_5mb

Huize Holding Limited IPO Summary

Core Content

Huize Holding Limited is registering for an initial public offering (IPO) of American Depositary Shares (ADSs), which represent its common shares. The offering is expected to commence as soon as practicable after the effective date of the registration statement. The IPO is intended to list the ADSs on the New York Stock Exchange or Nasdaq Global Market under the symbol “HUIZ.” The registration fee for the offering is US$18,180.00, with a proposed maximum aggregate offering price of US$150,000,000.

Key Information

• Company Overview: Huize Holding Limited is a leading independent online insurance product and service platform in China, not affiliated with insurance companies or other industry participants. It operates as a licensed insurance intermediary and does not bear underwriting risks.
• Business Model: The company distributes insurance products from insurer partners and helps them reach a large client base. It generates revenue primarily through insurance brokerage fees.
• Client Base: As of June 30, 2019, Huize had served 5.8 million insurance clients, with a significant portion being the younger generation. The average age of life and health insurance clients was 32.
• Product Offerings: The company offers both life and health insurance products and property & casualty insurance products. In the six months ended June 30, 2019, it provided approximately 214 life and health insurance products and 861 property & casualty insurance products.
• Revenue Focus: Life and health insurance products contribute to approximately 89.8% of the company’s brokerage income. These products are typically long-term, with payment terms of 20 years or more.
• Growth: The company experienced substantial growth, with its GWP increasing from RMB617.5 million in 2017 to RMB825.7 million in the six months ended June 30, 2019. Its total operating revenue also increased significantly.
• Financial Performance: In 2017, the company had a net loss of RMB97.0 million, but in 2018, it reported a net profit of RMB2.9 million. In the six months ended June 30, 2019, it had a net profit of RMB6.4 million.
• Strategic Focus: Huize aims to expand its client base, deepen relationships with insurer partners, offer more products, invest in technology, and grow through mergers and acquisitions or overseas expansion.

Main Points

• IPO Details: The IPO involves the sale of ADSs, with an initial public offering price to be determined. The underwriters have an over-allotment option to purchase up to additional ADSs within 30 days.
• Regulatory Status: The company is an emerging growth company under the JOBS Act and is eligible for reduced reporting requirements.
• Market Position: According to the Oliver Wyman Report, Huize was the largest independent online long-term life and health insurance platform in China by GWP in 2018.
• Industry Trends: China's insurance market is growing rapidly, with GWP increasing from RMB1.7 trillion in 2013 to RMB3.8 trillion in 2018, and is projected to reach RMB6.9 trillion by 2023.
• Competitive Strengths:
  • Leading position in the industry due to the dual-engine business model.
  • Quality client base with long-term engagement.
  • Effective client acquisition and retention.
  • Strong product design and development capabilities based on data.
  • Robust technology and data analytics infrastructure.
  • Visionary and experienced management and entrepreneurial culture.

Risks and Challenges

• Market Risks: The company faces challenges in maintaining its market leadership and adapting to a fast-changing regulatory environment.
• Operational Risks: It must continuously develop and offer products that meet evolving market demands and maintain its relationships with business partners.
• Regulatory Risks: Compliance with regulatory requirements is crucial, and past or potential non-compliance could have negative impacts.
• Technological Risks: The company must maintain and enhance its technology and big data advantages to stay competitive.
• Financial Risks: As an emerging growth company, it may experience financial volatility and may not yet have a consistent profit model.

Corporate Structure and Ownership

• Structure: The company is structured with a VIE (Variable Interest Entity) model due to PRC legal restrictions on foreign ownership in internet-based businesses and insurance brokerage.
• Ownership: The founding team began operations in 2006 under the "Huize" brand. The company was established in 2014 by three shareholders, including Mr. Cunjun Ma, who is also the chairman and CEO.
• Legal Compliance: The company consolidates the financial results of its VIE and subsidiaries in accordance with U.S. GAAP.

Summary of Financial Highlights

• GWP: RMB825.7 million in the six months ended June 30, 2019.
• Operating Revenue: RMB451.5 million in the six months ended June 30, 2019.
• Net Profit: RMB6.4 million in the six months ended June 30, 2019.
• Non-GAAP Adjusted Net Profit: RMB74.2 million in the six months ended June 30, 2019.

Conclusion

Huize Holding Limited is a rapidly growing online insurance platform in China, leveraging technology and data analytics to serve a large and diverse client base. The company's dual-engine model, focusing on both client service and insurer partner support, has positioned it as a significant player in the industry. Despite its growth, it faces various risks and challenges, including regulatory compliance, market competition, and the need for continuous innovation. As an emerging growth company, it benefits from reduced reporting requirements, but this status may change as it grows and meets certain revenue or market value thresholds.