What happened
Shares of the Chinese life and health insurance company Waterdrop (WDH 0.84%)jumped more than 20% as of 1:25 p.m. EDT today after the company reported earnings results for the fourth quarter of 2021.
So what
Waterdrop broke even in Q4 and generated revenue equivalent to nearly $95 million. Although there is only one analyst covering the company, according to Yahoo! Finance, both those numbers looked to have beat that analyst's estimates.
Image source: Getty Images.
Waterdrop generated first-year premiums equivalent to nearly $2.6 billion in 2021, up 13.4% from 2020. The company also continued to build out new insurance offerings; at the end of 2021, it had 364 products on its platform.
"Since the beginning of the third quarter, the capital market has continued to be volatile and the growth of the insurance industry has slowed down," Mr. Peng Shen, founder, chairman, and CEO of Waterdrop, said in a statement.
He added:
Despite all the challenges, we uphold our commitment to develop our business in a customer-centric manner and create sustainable value for our shareholders. We proactively adjusted our strategy and business model to pursue higher quality development and continued to deliver encouraging results.
Now what
Since going public in May of 2021, Waterdrop has seen its stock decline by more than 83%, which is not an uncommon occurrence for Chinese stocks trading on U.S. exchanges.
In 2022, management is guiding for the company to achieve a non-GAAP profit based on current market conditions.
But Chinese stocks are heavily dependent on the Chinese government and regulation. The good news is that Beijing has recently come out in support of Chinese stocks, which has sent many of them soaring over the past week. But keep an eye on the country's regulatory stance and its relationship with U.S. financial regulators. Both factors will likely play a big role in how the stock performs going forward.
