Following the release of Waterdrop Inc.'s (WDH.US) fourth quarter and full-year 2025 results, UOB Kay Hian issued a research report stating that the company's Q4 2025 performance exceeded expectations, with net profit attributable to shareholders increasing by over 60% year-on-year. Based on the company's strong operational results, UOB Kay Hian raised its revenue and net profit forecasts for Waterdrop Inc. for 2026, reaffirmed its "Buy" rating, and increased the target price from $2.91 to $2.95.
The report analysis indicated that Waterdrop's performance was approximately 21% higher than UOB Kay Hian's previous expectations. The outperformance was primarily attributed to rapid growth in the insurance business, driven by artificial intelligence. In the fourth quarter of 2025, Waterdrop reported net operating revenue of 1.411 billion yuan and net profit attributable to shareholders of 162 million yuan, a year-on-year increase of 62.7%, marking the 16th consecutive quarter of profitability.
For the full year 2025, net operating revenue reached 3.978 billion yuan, up 43.5% year-on-year, while net profit attributable to shareholders was 569 million yuan, an increase of 54.8% compared to the previous year. Revenue from the insurance business for the full year amounted to 3.577 billion yuan, growing 51.3% year-on-year.
Waterdrop Inc. adheres to a "technology-driven growth" strategic direction, continuously deepening its AI technology system and accelerating its evolution into an AI-native company. As of the end of December 2025, the company had applied for 72 patents related to large language models. With the support of its large AI model, Waterdrop has significantly enhanced its service capabilities in vertical insurance scenarios. Its AI health insurance expert assistant contributed to a 145% quarter-on-quarter increase in scaled premiums, while its AI insurance customer service assistant, "Baoxiao Hui," handled over 1.4 million service requests per month. An AI-powered quality inspection assistant helped improve employee efficiency by 175% compared to traditional methods.
On the product supply side, "Kanbing Bao," a market-first, long-term guaranteed renewable product that requires no health declaration, continued to iterate in the fourth quarter, adding a new "zero deductible" feature. The series of products for customers with pre-existing conditions continued to gain user recognition, with premiums from these products growing nearly 70% year-on-year in Q4.
Furthermore, Waterdrop is exploring the provision of open collaborative infrastructure for AI agents. The company's recently developed "Shoushou AI Assistant" – ClawSquare, based on a distributed architecture, enables AI agents with different functions, such as administration, human resources, and research and development, to communicate autonomously and collaborate on tasks.
The research report noted that AI is likely to act as a catalyst for accelerating online penetration and improving service efficiency. Waterdrop's first-mover advantage positions it to benefit from deeper AI integration, which can both accelerate business scale expansion and enhance operational efficiency.
Founder and CEO of Waterdrop Inc., Shen Peng, stated, "In 2025, Waterdrop anchored its core strategy on 'technology-driven growth,' achieving an operational efficiency leap through comprehensive AI integration, resulting in rapid revenue and profit growth. Looking ahead, the AI wave is reshaping the industry landscape at an unprecedented pace. We will systematically complete the strategic transition from 'using AI tools' to becoming an 'AI-native company,' deeply embedding AI across the entire value chain—from customer acquisition and underwriting to claims and service—using the power of technology to safeguard hundreds of millions of families and create sustainable long-term value for users, partners, and society."
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