Huize Holding Limited

Ladies and gentlemen, thank you for standing by. Welcome to the first half 2026 earnings conference call. At this time, all participants are on a listen-only mode. After the management prepared remarks, we will have question and answer session. Today's conference call is being recorded and a webcast replay will be available on IR website and ir.whiteside.com under the events and webcast section. I'd now like to hand the conference over to your speaker host today, Mr. Kenny Lo, Investillations Director. Please go ahead, Kenny.

Thank you, operator. Hello, everyone, and welcome to our first half of 2026 earnings conference call. Our financial and operational results were released earlier today and are currently available on both our IR website and Globe Newswire services. I would like to refer you to the safe harbor statement in our earnings press release, which also applies to this call as we will be making forward-looking statements. Please also note that we will discuss non-GAAP measures today, which are more thoroughly explained in our earnings release and followings with the SEC. Joining us today are founder and CEO, Mr. Cunjun Ma, co-CFO, Mr. Minghan Xiao, and co-CFO, Mr. Ron Tam. Mr. Ma will start the call by providing an overview of the company's performance and operational highlights, followed by Mr. Tam, who will go over our financial results for the first half of 2026. Then we will open the call for questions. I will now turn the call over to Mr. Ma.

Hello, everyone. Welcome to the phone call of the performance release in the first half of 2026. 2026 is the 20th anniversary of the establishment of Huize. In the past 20 years, we have experienced China's insurance industry from channeling to leading, gradually moving towards a more digitalized and professionalized stage of development. We have also seen industry competition increasingly test the innovation of products, customer management, and operational efficiency. Currently, in the context of low interest rates and population structure changes, residents' long-term savings, pension, and health insurance needs continue to grow. Hello everyone and welcome to Hoytus first half 2026 earnings conference call. 2026 marks Hoytus 20th anniversary.

Over the past two decades, we have witnessed insurance industry evolve from a market dominated by traditional distribution and agent-led sales into a more digital and professionalized ecosystem, where product innovation, customer engagement, and operating efficiency have become more increasingly important sources of competitive differentiation. Today, a low interest rate environment and shifting demographics driving sustained demand for long-term savings, retirement planning, and health protection. At the same time, rapid advances in AI are reshaping both the delivery of insurance services and the way companies operate. Against this backdrop, we are building on capabilities developed over the past 20 years to unlock new growth opportunities while continuing to improve efficiency and operating quality in the first half of 2026.

In the first half of the year of 2026, Huize's entire platform generated a total of 4.2 billion yuan, which increased by 30% and set the best record for the group. The first year's insurance fee reached 27.6 billion yuan, which increased by 49%. While the business scale continues to expand, the company has achieved a revenue of 7.2 billion yuan. In addition, as AR is further integrated into internal operations and core work processes, In the first half of 2026

GWP facilitators on our platform reached RMB 4.2 billion, up 30% year-over-year and marking a new all-time high, while FYP increased 49% year-over-year to RMB 2.76 billion. As our business continued to scale, total revenue reached RMB 720 million. At the same time, AI became more deeply embedded across our internal operations and core workflows as Huizer advances its transition towards an AI-native organization, supporting continued improvements in organizational efficiency and operating capabilities. As a result, net profit attributable to common shareholders increased to RMB 25.3 million. Overall, the first half was marked not only by strong premium growth, but also by broader growth momentum, improved operating efficiency, and stronger profitability.

We have always insisted on focusing on our customers, and continuing to deepen our customers' operations throughout their lifetime. In the first half of the year, the number of new customers added to the platform was about 789,000. By the end of June, the total number of customers added to the platform was about 13.7 million. The average age of long-term customers is 35.3 years old. 62.5% of them are from cities above the second-tier county. The long-term salary of the HKSAR has reached 8,211 yuan, which has increased by 25%. By the end of May, the 13th month of the long-term salary and the 25th month of the long-term salary remain at more than 95% and remain at the leading level of the industry. These results have proven the quality and value of the long-term customer group. We are also further deepening customer service through AR. The AR planning can generate personalized family insurance plans based on customer information and actual security needs. Currently, the generation rate of active user planning reports has reached 45%, showing that AR services have further extended the family security plan from single-point consultation to further extend the depth and efficiency of our service customers' long-term security needs.

We remain firmly committed to our customer-centric approach, continuously deepening customer engagement across the entire lifecycle. During the first half, we added approximately 798,000 new customers, bringing the cumulative number of insurance clients served to approximately 13.1 million as of June 30th. The average age of customers purchasing long-term insurance products was 35.3 years with 62.5% coming from tier 2 cities and above. The average FYP tick size for long-term insurance products increased 25% year-over-year to approximately RMB 8,211. As of May 31st, both our 13th and 25th month persistency ratios remained above 95. are continuing to rank among the highest. Together, these metrics underscore the quality and long-term value of our customer base. We are also using AI to further deepen customer engagement. Our AI financial planning agents can generate personalized family insurance plans based on each customer's profile and protection needs. Among active users, The planning report generation rate has now reached 45%, demonstrating that AI engagement is expanding beyond individual consultations toward more comprehensive household protection planning. This enables us to serve customers' long-term protection needs with greater depth, personalization, and efficiency.

By the end of June, 159 insurance companies to maintain stable cooperation and continue to promote different types of customized products. In response to the diverse needs of different customers in terms of savings, retirement, and health insurance, under the background of the continued growth of long-term financial planning needs, we have further folded into the core of the year-end product IP, Kwai Xiang Fu, and launched Kwai Xiang Fu No. 5, a pink year-end product, to meet the needs of customers for long-term wealth accumulation, family asset planning, and Yang Lao. In the field of health insurance, we have further expanded the coverage of insurance and service scenarios. No. 15 of the Darwin Preservation Plan will link child-based insurance with long-term medical insurance in the future, pushing insurance from one-off economic compensation to further extend to long-term health care. No. 5 of Changxiang-An will further cover some of the high-end medical insurance

As of June 30th, we maintain stable partnerships with 159 insurance carriers and continue to co-develop customized products across multiple insurance categories, addressing customers' increasingly diverse needs in savings, retirement, and health protection. As demand for long-term financial planning continues to grow, We further expanded our core annuity product franchise with the launch of Blizz 5.0, a participating annuity product designed to support long-term wealth accumulation, family asset planning, and retirement preparation. In the health protection segment, we further expanded the scope of coverage and broadened our service offerings. Darwin No. 15 Kids Protection integrates Critical Illness Protection for Children with Long-Term Medical Coverage Extending protection beyond a one-time financial payout toward long-term health support Changxiang 5.0 further expands to high-end medical coverage to customers with certain nodules, pre-existing conditions, and other needs that are traditionally underserved by medical insurance

In the first half of the year of 2026, we firmly followed the original AR strategy to further enhance the depth and business coverage of AR applications. The standard AR app has completed the upgrade of the 2.0 multi-intellectual architecture. AR drawing users increased by 65% in the beginning of the year. AR is gradually becoming an important entry point for users to acquire insurance services. More users began to use AR to complete insurance consultations, product recommendations, and Chubu Baozhang Guihua. At the consulting and service level, ARCAD is more deeply involved in customer analysis, project creation and customer management. Family insurance projects can be created within five minutes and through smart customer selection, ARCAD can identify and convert potential merchants in ARCAD. It can be seen that ARCAD has started to improve operating efficiency and further extend to all-smart business growth engine. At the retail level, and Xiao Ma Li Pei's AI has been tested and expanded from last year to cover four core scenarios, and is suitable for most of the mainstream products. The entire AI practicality is completed in an hour, and most products can be done in minutes. We are also continuing to improve the bottom-level capabilities of the insurance professional knowledge library to apply AI Agent in more service scenarios to provide professional and detailed data support. In the future, We will pay more attention to the actual use of AI applications and its practical value in customer experience, professional service, operational efficiency, and business transformation.

In the first half of 2026, we remained firmly committed to our AI-native strategy, further deepening the adoption of AI applications and expanding the coverage across our business. Huizi's AI app completed its upgrade to a 2.0 multi-Asian architecture, With the number of users engaging in AI conversations increased 65% from the beginning of the year AI is gradually becoming an important gateway for users to access insurance services With more customers using AI for insurance consultation, product recommendations and preliminary protection planning Across our advisory service operations AI is becoming more deeply involved in customer analysis for solution generation and customer engagement. Family insurance plans can now be generated in under five minutes, while intelligent customer screening and AI powered outbound calls are helping identify and convert business opportunities, demonstrating that AI is evolving beyond an operational efficiency tool into an intelligent engine for business growth. On the client side, Xiao Ma claims AI has expanded from completing its first pilot claim line to covering four core insurance categories and supporting most of our mainstream products. End-to-end AI claims processing can now be completed within one hour, with more products processed in minutes. We are also continuing to strengthen fundamental capabilities as our professional insurance knowledge base, providing specialized and granular data support for the deployment of AI agents across a broader range of surface scenarios. Going forward, we will place greater emphasis on the practical impact of our AI applications and the kind of value they deliver across customer experience, professional services, operating efficiency and business conversion.

In terms of international business, continue to advance Asia's key market deployment. In the first half of the year, the international business income was about 2.2 billion yuan. In Vietnam, Globcare continues to maintain a good business growth trend. The total insurance and income have increased by 45% and 24% respectively. We launched a customized mother and baby health insurance. In the early stage of the online market, we obtained a good market response in the Vietnamese market. Through agent channels and accelerated market expansion, we successfully verified the local mother and baby On the international front, Pony Intrude Tech continues to deepen its presence across key Asian markets, generating approximately RMB

and many more. In Vietnam, global care maintained strong business momentum with GWP and revenue increasing approximately 45% and 24% year-over-year respectively. Our customized maternal and child health insurance products received a positive initial market response and we accelerated its rollout through our Agents Channels successfully validating local demand for maternal and child health protection. In Singapore, we are focused on serving high-value customers with protection, wealth allocation, and long-term financial planning needs, while continuing to broaden our high-value offerings through differentiated products.

In the second half of the year, Hui Ze will continue to focus on three areas. First, we strongly recommend the AR original strategy to further enhance the depth and practicality of AR applications, so that AR can improve customer experience, improve professional service capability and business efficiency, and gradually form a more sustainable business value. Second, further deepen the product innovation with customer demand as the guide, while continuing to consolidate the competitiveness of segmented risk and order products, to accelerate the delivery of long-term health insurance and core insurance products, and to continue to build and upgrade core product IPs, and to better accommodate the constant change in the health, health, and family security needs of customers. Third, rely on Holding Institute to further develop the business of the Asian key market, to play a role in Hong Kong and Singapore's dual transfer, and to continue to improve local products and channel capabilities. and Han Shi.

Looking ahead to the second half, Huizi will remain focused on three priorities. First, we will continue to advance our AI-native strategy, deepening the adoption and practical impact of AI applications so that alongside improving customer experience, professional service capabilities and operating efficiency, AI can increasingly generate sustainable business value. Second, we will further strengthen customer-driven product innovation. While we are enforcing our competitiveness in savings products such as participating insurance, we will accelerate the exploration of long-term health and core protection products and continue to build and upgrade our flagship product franchises to better address customers' need for retirement, health, and family protection needs. Third, through community initiative tag, We will deepen our operations across key Asian markets, leverage Hong Kong and Singapore as our deal regional hubs, and continue strengthening local product and distribution capabilities to build a solid foundation for the long-term development of our international business.

With that, I will now

turn the call over to our CFO, Ron Tam, who will provide a detailed review of Huawei's operating and financial results for the first half of 2026.

Thank you, Mr. Ma and Kenny. Good evening, everyone in Asia, and good morning for those in the U.S. In terms of the first half, again, the battle of continued macro and geopolitical uncertainty, we have delivered a very strong result in the first half for 2026. Total GWP facilitated on the platform has reached a record high of RMB 4.2 billion, representing year-over-year increase of 29.8%. Total FYP also surged by 48.7% year-over-year to RMB 2.76 billion. Total revenue rose to RMB 720 million. Our gap net profit increased to RMB 25.3 million. our financial position remains very solid with cash equipment totaling RMB 241 million S of the quarter end June 30th. These exceptional results underscore the effectiveness of our omni-channel distribution network, our disciplined focus on attracting high-quality customers from the market, and the extensive application of our proprietary AI technologies. Notably, we are steadily advancing our international expansion strategy and additional revenue for long-term sustainable growth and geographical diversification. Turning to our core business, FYP from a long-term savings product category rose more than 45% year-over-year to RMB 2 billion, supported by heightened demand for wealth management and financial planning solutions in a sustained low-interest rate environment in China. Further against the backdrop of continued policy support for a multi-tiered healthcare protection system including the introduction of the National Commercial Health Insurance Innovative Club Catalog. We continue to expand our long-term health insurance offerings to address increasingly sophisticated session needs. FYP of our long-term health insurance category grew by 1.6x year-over-year to RMB $204 million. Our diversified distribution network and advanced AI solutions enabled us to broaden our customer reach and cultivate consumer relationships. Total customer base has reached 13.1 million as of June 30, reflecting a net addition of approximately 0.8 million during the first half of 2026. The repurchase ratio for our long-term insurance products remained high at 33.3%. demonstrating the continued progress we've made in enhancing customer lifetime value through targeted upselling and cross-selling initiatives. I would like to highlight several key operational achievements during the period. First, FYP for our 2A business increased by 44% year-over-year to RMB $216 million in the first half, underscoring the effectiveness of our AI capabilities in improving the productivity of both our in-house consultants and IRFs. and our IFA partners. Second, FYP from our short-term health and accident insurance grew 48% year-over-year to RMB $376 million in the first half, reflecting our relentless efforts in product innovation and growing the breadth of our portfolio. And third, as of May 31st, our 13th and 25th month persistency ratios for long-term life and health insurance remained at industry-leading levels of over 95%. We are affirming strong customer loyalty and the high quality of our post-sale servicing. And four, average ticket size of our long-term savings products rose 10.4% year-over-year to RMB 140,500 in the first half, possibly attributable to higher tickets of premium products in international markets. In the first half, we advanced our systematic three-pillar EI strategy. centered on raising operational efficiency, elevating the user experience, and enabling platform-wide transformation. Across the organization, we continue to embed an AI-first mindset by introducing purpose-built applications within individual business functions to automate routine tasks and streamline workflows. For customers, we upgraded our AI app with a multi-agent architecture that supports seamless end-to-end user journeys. spanning product recommendations, insurance underwriting, and policy servicing. We also launched an AI-powered financial planning feature that generates personalized family financial plan tailored to each household's specific production needs and gaps. On the advisor side, we equipped our agents with an AI-powered assistant that enhances productivity across key workflows, including intelligent lead screening, automated interaction summaries, AI-enabled outbound calls, tailored insurance proposals, and advanced customer analytics. We also integrated our AI capabilities with our extensive knowledge base to assist insurer partners and optimize the products. Overall, these initiatives produced measurable cost efficiencies and productivity gains. Our total operating expenses decreased to RMB $175 million in the first half. resulting in an improved expense-to-income ratio of 24.2%. Our international arm Pony InsurTech delivered another strong performance and remains a key pillar of a long-term growth strategy. In Vietnam, global care recorded an 11% year-over-equity in the policies issued during the first half, driving a year-over-year surge in gross return premiums and revenue growth of 45% and 24% respectively. The local IFA business also made notable progress, with the number of policies issued going 48% year-over-year. In Singapore, we focus on serving high-value customers with increasingly sophisticated protection, wealth allocation, and long-term financial planning needs. We continue to broaden our portfolio of differentiated and customized products in partnership with leading insurers, strengthening Singapore's role as an important regional platform for delivering integrated protection and wealth management solutions. The expansion of Pony's regional footprint serves as an important driver of revenue diversification and creates additional growth engines for Quasar, supporting long-term shareholder value creation. Looking ahead, we're well-positioned to capture emerging opportunities across China's evolving insurance landscape and the broader financial market. Domestically, persistently low deposit rates are expected to further drive household allocation toward higher-yield savings and participating insurance products. while government initiatives to strengthen the multi-tiered protection system are expected to sustain demand for commercial insurance and support the industry's long-term development. Beyond China, Pony is leveraging Quasar's proven business model and proven AI capabilities to deepen its presence across key Asian markets. These initiatives together are strengthening the resilience and diversification of our growth and laying a solid foundation for sustainable long-term value creation. And with that, I'll open up the call to questions. Thank you very much and over to you, operator.

Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star 1-1 on your telephone and wait for your name to be announced. Again, please press star 1-1 to ask a question. And our first question coming from the line of Shisha with Sidoti and Company. Your line is now open.

Thank you so much for taking my questions. Can you talk a little bit about the AI investing that you are doing? And can you give us some tangible examples of the returns you are seeing from that investment, whether through lower customer acquisition costs or higher conversion, improved agent productivity, or lower operating costs? Where do you see the most benefit from the AI investment that you're doing? Thank you.

Thank you, Ashie, and thanks for joining for the first time. Appreciate your presence. With respect to the AI investments and the key value equation that we are trying to achieve, I think we did go over quite in some detail just now in the opening remarks. But just to summarize, I think the key goals that we're trying to achieve here, obviously, the first phase of AI adoption mainly is really to turn our organization into more of an AI native And typically that would mean that automating workflows and optimizing the workflows and deploying AI agents across the value chain. And that typically means that lower operating costs and improve operational efficiency. So that's the first phase of value creation. And I think we have demonstrated that in the operating expenses ratio, we have achieved initial success in that regard. The second phase that we're now pushing is demonstrated in the front end, which you have alluded to in terms of lower customer acquisition costs. In a way, it's demonstrated by the increasing amount of self-directed policy purchases that's being addressed by AR consultations in our mobile app. and that's also leading to improved conversion rate and higher agent productivity because with the same number of agents, we're actually producing more premium growth from the same headcount. So that's the phase two of growth and value creation that we're driving right now.

And as you grow your revenue in international markets, Can you talk about the profitability in Hong Kong, Singapore and Vietnam individually? Which markets are already profitable today and what does the path to consolidated margin expansion look like as international becomes a bigger part of the revenue mix?

Sure, thanks for the question. In terms of the international markets, We have to say that in the key markets of Hong Kong, for example, we are already profitable since last year and that's been contributing to our bottom line results. Our Singapore business has just started since the fourth quarter of last year, still ramping up, but we are expecting to also drive profitability from that region this year, in the full year. In Vietnam, we are almost there in terms of the product profitability Vietnam is still in a high growth phase as you can imagine Albeit it's still not EBITDA positive but the loss there is actually quite minimal given that the low absolute number of the business compared to the product group So overall international markets are profitable combined with the Chinese business which is also profitable The main reason for a relatively low net profit margin is due to the fact that we continually invest our cash flow into AI in the close to 10 million US dollars pretty much last year and this year working around the same number in terms of operating expenses in R&D front and also on CapEx. So I think that would answer your question.

Yeah, no, that's really helpful. Thank you so much. And lastly, can you just discuss a little bit about your capital allocation strategy and will you be needing to raise any cash in the next 12 to 18 months?

Great. In terms of capital allocation, I think we just touched on that just now. AI is front and center in terms of the organic investment in the group's organic business. In terms of international markets, we think that right now we are happy with what we have. So further view markets It's not likely in the next 12 to 24 months. And we just want to scale the existing businesses to a more healthy level. And I think, what's the third part of the question? I missed the last part.

Yeah, will you be needing to raise more capital?

Oh. We are unlikely to be raising capital at this stage because we still have decent cash on balance sheet. Until we identify some major transformative M&A opportunities, it's quite unlikely that we'll be tapping the markets given the relatively low valuation right now of the company.

Thank you so much. Thank you.

Thank you. Our next question coming from the line of Amy Chen with Citi. Your line is now open. Amy Chen, your line is now open. Please check your mute button.

Hi, thank you for giving me the opportunity and congrats on another ever-living quarter. My question will be regarding to mainland Chinese visitor business in Hong Kong. After the news flows regarding Decree 837 and the latest media reporting citing that local tax authorities are charging 20% tax on our product dividends. I'm wondering if Huizi has observed any changes in terms of customer demand on the ground, both in terms of overseas business as well as domestic business. Thank you.

Thank you, Amy. So just to clarify your questions on the impact on the recent regulatory documents and news article on the MCV business. So I guess the quick answer to that is based on what we are seeing in the month of July and month to date in August, we see that the overall market sentiment and momentum, particularly in Hong Kong, for example, is still robust from our own numbers and also from our channel checks in the market. We do think that there will be some degree of impact on certain customers' mindsets with respect to the 837 degree. And the media article that you mentioned, the context of the article is actually nothing new. It's actually something that has been long-term written in the relevant regulations in China. It's a matter of future and potential endorsements of the relevant tax clauses in that document So we do believe that the underlying customer demand or the logic behind overseas or offshore insurance purchases still remain intact given the attractiveness of the undying asset allocation for international products provided by insurance in Hong Kong and Singapore, for example, which gives a diversified global strategy for the consumers. And the prevailing differential in the interest rate environment should also continue to underpin a strong demand for offshore products.

Thank you. And I am showing no further questions in the Q&A queue at this time. I will now turn the call back over to Mr. Kenny Lo for any closing comments.

Thank you, Ophelia. On behalf of the Hoi Just management team, we thank you, everyone, for joining our conference call. And if you need further information, please feel free to contact us through our email address. This concludes the call. Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.