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Waterdrop Inc.

Waterdrop Inc.WDHEarnings & Financial Report

NYSE · Financials · Insurance Agents, Brokers & Service

Waterdrop Inc. is a leading technology-powered health and protection platform based in China. Its core business lines include online insurance brokerage, medical crowdfunding services, and digital health management solutions, primarily serving individual consumers nationwide seeking affordable healthcare support and risk protection products.

What changed in Waterdrop Inc.'s 20-F — 2023 vs 2024

Top changes in Waterdrop Inc.'s 2024 20-F

596 paragraphs added · 618 removed · 413 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

187 edited+73 added−45 removed628 unchanged
If the PRC government finds that the agreements that establish the structure for operating our business do not comply with the laws and regulations in mainland China, or if these regulations or their interpretations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government finds that the agreements that establish the structure for operating our business do not comply with the laws and regulations in mainland China, or if these regulations or their interpretations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
In recent years, the PRC government authorities have released a series of laws and regulations related to generative AI services, including the Administration Provisions on Algorithmic Recommendation of Internet Information Services, the Administrative Provisions on Deep Synthesis of Internet Information Services and the Interim Measures on the Management of Generative AI Services.
In recent years, the PRC government authorities have released a series of laws and regulations related to AI services, including the Administration Provisions on Algorithmic Recommendation of Internet Information Services, the Administrative Provisions on Deep Synthesis of Internet Information Services and the Interim Measures on the Management of Generative AI Services.
In addition, we must stay abreast of emerging user preferences and product trends that will appeal to existing and potential participants and consumers. Our platforms make personalized recommendations of and insurance products to users based on their needs, and offer a comprehensive suite of services to ensure a smooth and efficient experience.
In addition, we must stay abreast of emerging user preferences and product trends that will appeal to existing and potential participants and consumers. Our platforms make personalized recommendations of insurance products to users based on their needs, and offer a comprehensive suite of services to ensure a smooth and efficient experience.
Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy may materially and adversely affect our business, results of operations and financial condition.
Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the Chinese or global economy may materially and adversely affect our business, results of operations and financial condition.
The legality and enforceability of the contractual agreements between our subsidiaries in mainland China, the VIEs, and their nominee shareholders, as a whole, have not been tested in a court of law in mainland China as of the date of this annual report.
The legality and enforceability of the contractual agreements between our subsidiaries in mainland China, the VIEs, and their nominee shareholders, as a whole, have not been tested in a court of law in mainland China as of the date of this annual report.
If the PRC government finds that the agreements that establish the structure for operating our business do not comply with the laws and regulations in mainland China, or if these regulations or their interpretations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government finds that the agreements that establish the structure for operating our business do not comply with the laws and regulations in mainland China, or if these regulations or their interpretations change in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
Pursuant to these regulations, China-based companies that directly or indirectly offer or list their securities in an overseas market must file with the CSRC within three business days after submitting their listing application documents to the regulator in the place of intended listing.
Pursuant to these regulations, China-based companies that directly or indirectly offer or list their securities in an overseas market must file with the CSRC within three business days after submitting their listing application documents to the regulator in the place of intended listing.
These regulations also provide that a China-based company must file with the CSRC within three business days after completion of its follow-on offering of securities after it is listed in an overseas market.
These regulations also provide that a China-based company must file with the CSRC within three business days after completion of its follow-on offering of securities after it is listed in an overseas market.
There remain uncertainties with respect to how the CSRC filing procedures under these regulations would be applied to, and implicate, the procedures, timetables and outcomes of our future offering or other capital raising activities.
There remain uncertainties with respect to how the CSRC filing procedures under these regulations would be applied to, and implicate, the procedures, timetables and outcomes of our future offering or other capital raising activities.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
On December 15, 2022, the PCAOB issued a report that vacated its December 16, 2021 determination and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.
The delisting of the ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
In May 2022, the SEC conclusively listed us as a Commission-Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021.
Firstly, third-party insurance brokerage and agency industry in China could be affected by, from the insurance carrier side, the close integration with and improvements in online infrastructure and technology, efficient access to insurance consumers, consumer base and insights, consumer acquisition costs and the separation of insurance product design and sales; and from the consumer side, by the continued formation of consumers’ online insurance policy purchasing habits, the selection, price and popularity of insurance products offered by insurance carriers, the demand for convenience, the reliability and security of third-party insurance brokerage and agency platforms and online insurance policy buying or claim settlement experience.
Firstly, third-party insurance brokerage and agency industry in China could be affected by, from the insurance carrier side, the close integration with and improvements in online infrastructure and technology, efficient access to insurance consumers, consumer base and insights, user acquisition costs and the separation of insurance product design and sales; and from the consumer side, by the continued formation of consumers’ online insurance policy purchasing habits, the selection, price and popularity of insurance products offered by insurance carriers, the demand for convenience, the reliability and security of third-party insurance brokerage and agency platforms and online insurance policy buying or claim settlement experience.
However, if we are not able to comply with the cybersecurity and network data security requirements in a timely manner, or at all, we may be subject to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our applications from the application stores, among other sanctions, which could materially and adversely affect our business and results of operations.
If we are not able to comply with the cybersecurity and network data security requirements in a timely manner, or at all, we may be subject to government enforcement actions and investigations, fines, penalties, suspension of our non-compliant operations, or removal of our applications from the application stores, among other sanctions, which could materially and adversely affect our business and results of operations.
Although we have taken measures to maintain the confidentiality of medical records and personal data of patients prior to enrolling in clinical trials so that they cannot be accessed without proper authorization, we cannot assure you that such measures are effective in ensuring our compliance with the laws and regulations, or that we are able to prevent the enrollees’ private or medical records being divulged without their consent.
Although we have taken measures to maintain the confidentiality of medical records and personal data of patients prior to enrolling in clinical trials so that they cannot be accessed without proper authorization, we cannot assure you that such measures are effective in ensuring our compliance with the laws and regulations, or that we are able to prevent the enrollees’ private information or medical records being divulged without their consent.
Leveraging our deep understanding of consumer needs and actuarial capabilities, we also collaborate with some insurance carriers to co-design new insurance products. The proper functioning of our actuarial and statistical analysis, products pricing suggestion, risk management, financial control, accounting, user database, user service and other data processing systems is highly critical to our business and our ability to compete effectively.
Leveraging our deep understanding of consumer needs and actuarial capabilities, we also collaborate with some insurance carriers to co-design new insurance products. The proper functioning of our actuarial and statistical analysis, products pricing suggestion, risk management, financial control, accounting, user database, customer service and other data processing systems is highly critical to our business and our ability to compete effectively.
Pursuant to the Interim Measures on the Management of Generative Artificial Intelligence Services, the service providers that provide generative artificial intelligence services with public opinion attribute or social mobilization ability are required to apply for security assessment with the national cybersecurity administration authorities in accordance with laws and regulations, and complete the filing for algorithms services in accordance with the Administration Provisions on Algorithmic Recommendation of Internet Information Services.
For example, pursuant to the Interim Measures on the Management of Generative Artificial Intelligence Services , the service providers that provide generative artificial intelligence services with public opinion attribute or social mobilization ability are required to apply for security assessment with the national cybersecurity administration authorities in accordance with laws and regulations, and complete the filing for algorithms services in accordance with the Administration Provisions on Algorithmic Recommendation of Internet Information Services.
However, we may not be informed of the identities of all the mainland China residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. As of the date of this annual report, Mr. Peng Shen, Mr.
However, we may not be informed of the identities of all the mainland China residents or entities holding direct or indirect interest in our company, nor can we compel our beneficial owners to comply with SAFE registration requirements. As of the date of this annual report, Mr. Peng Shen and Mr.
The funds contributed by donors in our crowdfunding platform and participants of mutual aid plans are deposited in segregated bank accounts. We have entered into agreements with a commercial bank to act as a custodian bank and manage the different accounts. The bank follows our instructions with regard to withdrawal or transfer of funds.
The funds contributed by donors in our crowdfunding platform and participants of mutual aid plans in the past are deposited in segregated bank accounts. We have entered into agreements with a commercial bank to act as a custodian bank and manage the different accounts. The bank follows our instructions with regard to withdrawal or transfer of funds.
We have developed the digital platform, E-Find, to help pharmaceutical companies find matches for clinical trials. People in need, mostly patients, can have access to investigational drugs and frontier innovative therapies through E-Find.
We have developed the digital platform, E-Find, to help pharmaceutical companies find matches for clinical trials. People in need, mostly patients, can have access to investigational new drugs and frontier innovative therapies through E-Find.
In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings, cash flow; ● fluctuations in operating metrics; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new solutions and services and expansions by us or our competitors; ● termination or non-renewal of contracts or any other material adverse change in our relationship with our key customers or strategic investors; ● changes in financial estimates by securities analysts; ● detrimental negative publicity about us, our competitors or our industry; ● additions or departures of key personnel; ● release of lockup or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● regulatory developments affecting us or our industry; and ● potential litigation or regulatory investigations.
In addition to market and industry factors, the price and trading volume for the ADSs may be highly volatile for factors specific to our own operations, including the following: ● variations in our revenues, earnings, cash flow; ● fluctuations in operating metrics; ● announcements of new investments, acquisitions, strategic partnerships or joint ventures by us or our competitors; ● announcements of new solutions and services and expansions by us or our competitors; ● termination or non-renewal of contracts or any other material adverse change in our relationship with our key customers or strategic investors; ● changes in financial estimates by securities analysts; 58 Table of Contents ● detrimental negative publicity about us, our competitors or our industry; ● additions or departures of key personnel; ● release of lockup or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; ● regulatory developments affecting us or our industry; and ● potential litigation or regulatory investigations.
The amended PRC Company Law makes substantial changes to the current PRC Company Law in a number of areas, including, among others, imposing time limit for capital contribution to existing and future companies so that companies which are established before the effectiveness of the amended PRC Company Law with a term of capital contributions exceeding the time limit must adjust their schedule of capital contribution unless otherwise permitted by the laws and regulations or the State Council.
The new PRC Company Law makes substantial changes to the current PRC Company Law in a number of areas, including, among others, imposing time limit for capital contribution to existing and future companies so that companies which are established before the effectiveness of the new PRC Company Law with a term of capital contributions exceeding the time limit must adjust their schedule of capital contribution unless otherwise permitted by the laws and regulations or the State Council.
We face intense competition and could lose market share, which could adversely affect our results of operations. The third-party insurance brokerage and agency industry in China is intensely competitive. Our current or potential competitors include (i) online third-party brokers and agents such as Ant Group and WeSure; and (ii) offline third-party brokers and agents such as Fanhua and Datong.
We face intense competition and could lose market share, which could adversely affect our results of operations. The third-party insurance brokerage and agency industry in China is intensely competitive. Our current or potential competitors include (i) online third-party brokers and agents such as Ant Group and WeSure; and (ii) offline third-party brokers and agents such as AIX(formerly Fanhua) and Datong.
We may have difficulty enrolling patients, for example, if the competitors of the pharmaceutical companies we cooperate with have ongoing clinical trials for similar products and the patients who would otherwise be eligible for our clinical trials instead enroll in the competitors’ clinical trials. ​ 27 Table of Contents Our patient recruitment businesses are also subject to privacy protection and data compliance risks.
We may have difficulty enrolling patients, for example, if the competitors of the pharmaceutical companies we cooperate with have ongoing clinical trials for similar products and the patients who would otherwise be eligible for our clinical trials instead enroll in the competitors’ clinical trials. 28 Table of Contents Our patient recruitment businesses are also subject to privacy protection and data compliance risks.
We are exploring our patient service and CRO service businesses, which are still in an early stage and the success of which may be affected by various factors. Further, in face of rapid changing opportunities, we may explore other pharmaceutical business such as CSO service business. We believe that these new businesses will provide us with long-term growth opportunities.
We are exploring our patient service and CRO service businesses, which are still in an early stage and the success of which may be affected by various factors. Further, in face of rapidly changing opportunities, we may explore other pharmaceutical business such as CSO service business. We believe that these new businesses will provide us with long-term growth opportunities.
Some of our competitors may have more resources to develop or acquire new technologies and react quicker to changing requirements of consumers. In addition, for the online insurance marketplace industry we operate in, our target insurance policy purchasers, PRC residents with potential insurance needs, may seek insurance products and services in well-equipped and developed neighboring insurance markets.
Some of our competitors may have more resources to develop or acquire new technologies and react quicker to changing requirements of consumers. Furthermore, for the online insurance marketplace industry we operate in, our target insurance policy purchasers, PRC residents with potential insurance needs, may seek insurance products and services in well-equipped and developed neighboring insurance markets.
For example, on August 20, 2021, the Standing Committee of the National People’s Congress of China promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection. Our mobile apps and websites only collect basic user personal information that is necessary to provide the corresponding services.
For example, on August 20, 2021, the Standing Committee of the National People’s Congress of China promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection. Our mobile apps, websites and mini programs only collect basic user personal information that is necessary to provide the corresponding services.
Therefore, it still leaves leeway for future laws, administrative regulations or provisions of the PRC State Council to provide for contractual arrangements as a form of foreign investment, at which time it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment in mainland China, and if yes, how our contractual arrangements should be dealt with. 45 Table of Contents The PRC Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in the “negative list”, which is most recently jointly promulgated by the National Development and Reform Commission and the Ministry of Commerce and took effective on January 1, 2022.
Therefore, it still leaves leeway for future laws, administrative regulations or provisions of the PRC State Council to provide for contractual arrangements as a form of foreign investment, at which time it will be uncertain whether our contractual arrangements will be deemed to be in violation of the market access requirements for foreign investment in mainland China, and if yes, how our contractual arrangements should be dealt with. 45 Table of Contents The PRC Foreign Investment Law grants national treatment to foreign-invested entities, except for those foreign-invested entities that operate in industries specified as either “restricted” or “prohibited” from foreign investment in the “negative list”, which is most recently jointly promulgated by the National Development and Reform Commission and the Ministry of Commerce and took effective on November 1, 2024.
If we fail to comply with these laws and regulations, we could be subject to penalties and operational disruption and our financial condition and results of operations could be adversely affected. 21 Table of Contents Moreover, we have from time to time been subject, and are likely again in the future to be subject to PRC regulatory inquiries, inspections and investigations.
If we fail to comply with these laws and regulations, we could be subject to penalties and operational disruption and our financial condition and results of operations could be adversely affected. 22 Table of Contents Moreover, we have from time to time been subject, and are likely again in the future to be subject to PRC regulatory inquiries, inspections and investigations.
After we are no longer an “emerging growth company,” we expect to incur additional significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. ​ 67 Table of Contents
After we are no longer an “emerging growth company,” we expect to incur additional significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. ​ 66 Table of Contents
Any of these actions by the governmental authorities may have a material adverse effect on our business and results of operations. 22 Table of Contents We have been or may be subject to penalties for failure to manage our personnel engaging in insurance brokerage activities.
Any of these actions by the governmental authorities may have a material adverse effect on our business and results of operations. 23 Table of Contents We have been or may be subject to penalties for failure to manage our personnel engaging in insurance brokerage activities.
Existing or potential competitors may have substantially greater brand recognition and possess more financial, marketing and research resources than we do. Our competitors may introduce platforms with more attractive products, content and features, or services or solutions with competitive pricing or enhanced performance that we cannot match.
In addition, existing or potential competitors may have substantially greater brand recognition and possess more financial, marketing and research resources than we do. Our competitors may introduce platforms with more attractive products, content, features, services or solutions with competitive pricing or enhanced performance that we cannot match.
Identifying, screening and enrolling patients to participate in clinical trials is critical to the success of such new business as well, and we may not be able to identify, recruit and enroll a sufficient number of patients with the required or desired characteristics to complete the clinical trials in a timely manner.
Identifying, screening and enrolling patients to participate in clinical trials is critical to the success of such new business, and we may not be able to identify, recruit and enroll a sufficient number of patients with the required or desired characteristics to complete the clinical trials in a timely manner.
Consolidated Statements and Other Financial Information—Legal Proceedings.” Involvement in a class action suit could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations.
Consolidated Statements and Other Financial Information—Legal Proceedings.” Involving in a class action suit could divert a significant amount of our management’s attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations.
Peng Shen or his affiliated entities shall be automatically immediately converted into the same number of Class A ordinary shares in the event that Mr. Shen ceases to be employed by and ceases to act as a director of our Company. As of March 31, 2024, Mr.
Peng Shen or his affiliated entities shall be automatically immediately converted into the same number of Class A ordinary shares in the event that Mr. Shen ceases to be employed by and ceases to act as a director of our Company. As of March 31, 2025, Mr.
The following selected consolidated statements of comprehensive loss data for the years ended December 31, 2019 and 2020, selected consolidated balance sheet data as of December 31, 2019, 2020 and 2021 and selected consolidated cash flow data for the years ended December 31, 2019 and 2020 have been derived from our audited consolidated financial statements not included in this annual report.
The following selected consolidated statements of comprehensive loss data for the years ended December 31, 2020 and 2021, selected consolidated balance sheet data as of December 31, 2020, 2021 and 2022 and selected consolidated cash flow data for the years ended December 31, 2020 and 2021 have been derived from our audited consolidated financial statements not included in this annual report.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within mainland China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend in the future: ​ ​ ​ ​ ​ ​ Taxation Scenario(1) ​ Statutory Tax and Standard Rates Hypothetical pre-tax earnings (2) 100 % Tax on earnings at statutory rate of 25% (3) (25) % Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (4) (7.5) % Net distribution to Waterdrop Inc./shareholders 67.5 % Notes: (1) For purposes of this example, the tax calculation has been simplified.
For purposes of illustration, the following discussion reflects the hypothetical taxes that might be required to be paid within mainland China, assuming that: (i) we have taxable earnings, and (ii) we determine to pay a dividend to Waterdrop Inc. by our PRC subsidiaries in the future: ​ ​ ​ ​ ​ ​ Taxation Scenario (1) ​ Statutory Tax and Standard Rates Hypothetical pre-tax earnings (2) 100 % Tax on earnings at statutory rate of 25% (3) (25) % Net earnings available for distribution 75 % Withholding tax at standard rate of 10% (4) (7.5) % Net distribution to Waterdrop Inc./shareholders 67.5 % Notes: (1) For purposes of this example, the tax calculation has been simplified.
Peng Shen beneficially owns all of our issued Class B ordinary shares and held approximately 71.4% of the aggregate voting power of our total issued and outstanding share capital due to the disparate voting powers associated with our dual-class share structure.
Peng Shen beneficially owns all of our issued Class B ordinary shares and held approximately 71.9% of the aggregate voting power of our total issued and outstanding share capital due to the disparate voting powers associated with our dual-class share structure.
Any illegal, fraudulent or collusive activity could severely damage our brand and reputation as an operator of a trusted online platform, which could adversely affect our business. 26 Table of Contents If we fail to bring in and retain new consumers and increase engagement of existing users on our Waterdrop Insurance Marketplace platform, our business and results of operations could be adversely affected.
Any illegal, fraudulent or collusive activity could severely damage our brand and reputation as an operator of a trusted online platform, which could adversely affect our business. If we fail to bring in and retain new consumers and increase engagement of existing users on our Waterdrop Insurance Marketplace platform, our business and results of operations could be adversely affected.
For a discussion of significant differences between the provisions of the Companies Act of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional Information—B. Memorandum and Articles of Association—Differences in Corporate Law.” Certain judgments obtained against us by our shareholders may not be enforceable.
For a discussion of significant differences between the provisions of the Companies Act of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see “Item 10. Additional Information—B. Memorandum and Articles of Association—Differences in Corporate Law.” 63 Table of Contents Certain judgments obtained against us by our shareholders may not be enforceable.
We may not be able to stay in constant compliance with the rapidly evolving regulations. ● Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business and results of operations. ● We have been or may be subject to penalties for failure to manage our personnel engaging in insurance brokerage activities. ● Our historical growth rate may not be indicative of our future performance and if we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected. ● We have made investments in generative AI and may face uncertainties with respect to its commercialization and the evolving laws and regulations applicable to us. ● Any harm to our brand or reputation may materially and adversely affect our business. 15 Table of Contents Risks Related to Our Corporate Structure ● Waterdrop Inc. is a Cayman Islands holding company with no equity ownership in the VIEs and we conduct our operations in China primarily through (i) our subsidiaries in mainland China and (ii) the VIEs, with which we have maintained contractual arrangements.
We may not be able to stay in constant compliance with the rapidly evolving regulations. ● Any lack of requisite approvals, licenses or permits applicable to our business operation may have a material and adverse impact on our business and results of operations. ● We have been or may be subject to penalties for failure to manage our personnel engaging in insurance brokerage activities. ● Our historical growth rate may not be indicative of our future performance and if we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected. ● We have made investments and allocated resources in the development and application of AI technologies and may face uncertainties with respect to its commercialization and application and the evolving laws and regulations. ● Any harm to our brand or reputation may materially and adversely affect our business. 15 Table of Contents Risks Related to Our Corporate Structure ● Waterdrop Inc. is a Cayman Islands holding company with no equity ownership in the VIEs and we conduct our operations in China primarily through (i) our subsidiaries in mainland China and (ii) the VIEs, with which we have maintained contractual arrangements.
If we fail to maintain profitability or continue to generate positive cash flows from operating activities, we may have to finance ourselves with equity or debt financing, which may not be available at price term favorable to us or at all. 18 Table of Contents We face uncertainties relating to the change of regulatory regime for insurance related business.
If we fail to maintain profitability or continue to generate positive cash flows from operating activities, we may have to finance ourselves with equity or debt financing, which may not be available at price term favorable to us or at all. We face uncertainties relating to the change of regulatory regime for insurance related business.
As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. 65 Table of Contents As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE listing standards.
As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the NYSE listing standards.
Moreover, we may be exposed to fraud or other misconduct committed by our employees, crowdfunding consultants, customer service personnel or other third parties, including but not limited to our users and business partners, or other events that are out of our control. ​ 29 Table of Contents We may not be able to ensure the accurate and complete disclosure of insurance product information.
Moreover, we may be exposed to fraud or other misconduct committed by our employees, crowdfunding consultants, customer service personnel or other third parties, including but not limited to our users and business partners, or other events that are out of our control. We may not be able to ensure the accurate and complete disclosure of insurance product information.
We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying Class A ordinary shares represented by your ADSs. 62 Table of Contents In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions.
We cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the underlying Class A ordinary shares represented by your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for their manner of carrying out your voting instructions.
The implementation of the “consistency of regulatory reporting and actual actions” policy may lead to a decrease in commission rates in the insurance intermediary industry, increase operational pressure, raise compliance requirements, which may affect our income and operational costs. 25 Table of Contents We may not be successful in increasing the sales of long-term health and life insurance products.
The implementation of the “consistency of regulatory reporting and actual actions” policy may lead to a decrease in commission rates in the insurance intermediary industry, increase operational pressure, raise compliance requirements, which may affect our income and operational costs. We may not be successful in increasing the sales of long-term health and life insurance products.
We started with the mutual aid plan services in May 2016, under which we generate management fee income as an operator of the mutual aid plans, and then launched Waterdrop Medical Crowdfunding in July 2016.
We started with the mutual aid plan services in May 2016, under which we generated management fee income as an operator of the mutual aid plans, and then launched Waterdrop Medical Crowdfunding in July 2016.
Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result. 63 Table of Contents You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
Accordingly, holders of ADSs may be unable to participate in our rights offerings and may experience dilution of their holdings as a result. You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.
If online and mobile networks do not achieve adequate acceptance in the market, our growth prospects, results of operations and financial condition could be harmed. 34 Table of Contents User growth and activity on mobile devices depend upon effective use of our mobile applications and third-party mobile operating systems that we do not control.
If online and mobile networks do not achieve adequate acceptance in the market, our growth prospects, results of operations and financial condition could be harmed. User growth and activity on mobile devices depend upon effective use of our mobile applications and third-party mobile operating systems that we do not control.
We may fail to compete effectively with our competitors and industry participants in neighboring insurance markets. We have a history of net losses and negative cash flows from operating activities, and we may not be able to maintain profitability or continue to generate positive cash flows from operating activities in the future.
We may fail to compete effectively with our competitors and industry participants in neighboring insurance markets. 18 Table of Contents We have a history of net losses and negative cash flows from operating activities, and we may not be able to maintain profitability or continue to generate positive cash flows from operating activities in the future.
If we fail to bring in new patients to or attract more donations on our Waterdrop Medical Crowdfunding platform, our business, financial condition and results of operations will be adversely affected. Our offline crowdfunding consultancy at hospitals by crowdfunding consultants may be restricted or banned.
If we fail to bring in new patients to or attract more donations on our Waterdrop Medical Crowdfunding platform, our business, financial condition and results of operations will be adversely affected. 27 Table of Contents Our offline crowdfunding consultancy at hospitals by crowdfunding consultants may be restricted or banned.
Information on the Company— B. Business Overview—Regulation.” In addition, regulatory requirements on cybersecurity and data privacy are constantly evolving and can be subject to significant changes. The regulators in mainland China have been increasingly focused on regulation in the areas of cybersecurity and data protection in recent years.
Information on the Company— B. Business Overview—Regulation.” 31 Table of Contents In addition, regulatory requirements on cybersecurity and data privacy are constantly evolving and can be subject to significant changes. The regulators in mainland China have been increasingly focused on regulation in the areas of cybersecurity and data protection in recent years.
Our users and insurance carriers may consequently be reluctant to continue to use our platform. Some of our shareholders offer similar products or services competing with ours. Some of our shareholders also offer products and services competing with ours. For example, WeSure, Tencent’s online insurance brokerage platform offers online insurance distribution services as we do.
Our users and insurance carriers may consequently be reluctant to continue to use our platform. 30 Table of Contents Some of our shareholders offer similar products or services competing with ours. Some of our shareholders also offer products and services competing with ours. For example, WeSure, Tencent’s online insurance brokerage platform offers online insurance distribution services as we do.
Further, hackers, acting individually or in coordinated groups, may also launch distributed denial of service attacks or other coordinated attacks that may cause service outages or other interruptions in our business. 30 Table of Contents Our business is subject to complex and evolving laws and regulations regarding data privacy and cybersecurity.
Further, hackers, acting individually or in coordinated groups, may also launch distributed denial of service attacks or other coordinated attacks that may cause service outages or other interruptions in our business. Our business is subject to complex and evolving laws and regulations regarding data privacy and cybersecurity.
If we fail to implement and maintain an effective system of internal controls to remediate our material weakness over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud. We are subject to the reporting requirements of the U.S.
If we fail to implement and maintain an effective system of internal controls over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud. We are subject to the reporting requirements of the U.S.
If we cannot continue to offer these popular insurance products for any reason or the popularity of these products decline, our brokerage income may decrease. Our revenue and profitability might be adversely impacted if the commission level of our insurance brokerage service declines.
If we cannot continue to offer these popular insurance products for any reason or the popularity of these products decline, our brokerage income may decrease. 26 Table of Contents Our revenue and profitability might be adversely impacted if the commission level of our insurance brokerage service declines.
As a result, our existing compliance procedures may not be adequate for new legal and regulatory requirements, and we may need to incur additional compliance costs and become exposed to negative findings from the governmental authorities. ​ 28 Table of Contents We may have difficulty in collecting receivables due timely, which may affect our cash flow and credit risks management.
As a result, our existing compliance procedures may not be adequate for new legal and regulatory requirements, and we may need to incur additional compliance costs and become exposed to negative findings from the governmental authorities. We may have difficulty in collecting receivables due timely, which may affect our cash flow and credit risks management.
If we fail to retain our employees, we could incur significant expenses in hiring and training new employees, and our ability to serve users and business partners could diminish, resulting in a material adverse effect to our business. ​ 37 Table of Contents We may not be able to raise additional capital when desired, on favorable terms or at all.
If we fail to retain our employees, we could incur significant expenses in hiring and training new employees, and our ability to serve users and business partners could diminish, resulting in a material adverse effect to our business. We may not be able to raise additional capital when desired, on favorable terms or at all.
Specifically, foreign ownership of a value-added telecommunication service provider may not exceed 50% (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers) under the Special Administrative Measures for Access of Foreign Investment (Negative List) (2021 Edition), which is jointly promulgated by the National Development and Reform Commission and the Ministry of Commerce and became effective on January 1, 2022.
Specifically, foreign ownership of a value-added telecommunication service provider may not exceed 50% (except for e-commerce, domestic multi-party communication, storage and forwarding classes and call centers) under the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 Edition), which is jointly promulgated by the National Development and Reform Commission and the Ministry of Commerce and became effective on November 1, 2024.
As of March 31, 2024, Tencent holds approximately 22.5% equity interests of our company, based on the information contained in the Schedule 13D jointly filed by Tencent Holdings Limited and others with the SEC on May 17, 2021. The user acquisition of our medical crowdfunding business largely relies on Weixin-based link sharing practice.
Tencent holds approximately 22.5% equity interests of our company, based on the information contained in the Schedule 13D jointly filed by Tencent Holdings Limited and others with the SEC on May 17, 2021. The user acquisition of our medical crowdfunding business largely relies on Weixin-based link sharing practice.
If any dispute arises between our current or former officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements or we may not be able to enforce them at all. If we are unable to recruit, train and retain talents, our business may be materially and adversely affected.
If any dispute arises between our current or former officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements or we may not be able to enforce them at all. 37 Table of Contents If we are unable to recruit, train and retain talents, our business may be materially and adversely affected.
We currently engage third-party user acquisition channels to attract consumers for the insurance products offered on our platform. If our cooperation with such user acquisition channels is deemed to be in violation of the Regulatory Measures for Online Insurance Business, we may be required to modify our business practice, which may result in a reduction in our attraction to consumers.
We currently engage third-party user acquisition channels to attract consumers for the insurance products offered on our platform. If such cooperation is deemed non-compliant with the Regulatory Measures for Online Insurance Business, we may be required to modify our business practice, which may result in a reduction in our attraction to consumers.
Risks Related to Our Business and Industry ● Our business and growth are significantly affected by the future prospects of third-party insurance brokerage and agency, medical crowdfunding and healthcare industries, which are rapidly evolving. ● Our limited operating history and evolving business model make it difficult to evaluate our business and future prospects and the risks and challenges we may encounter. ● We face intense competition and could lose market share, which could adversely affect our results of operations. ● We have a history of net losses and negative cash flows from operating activities, and we may not be able to maintain profitability or continue to generate positive cash flows from operating activities in the future. ● We face uncertainties relating to the change of regulatory regime for insurance related business. ● We may be materially adversely affected by the changes and evolvement in the regulation of medical crowdfunding business ● The administration, interpretation and enforcement of the regulations applicable to us are evolving and involve uncertainties.
Risks Related to Our Business and Industry ● Our business and growth are significantly affected by the future prospects of third-party insurance brokerage and agency, medical crowdfunding and healthcare industries, which are rapidly evolving. ● Our limited operating history and evolving business model make it difficult to evaluate our business and future prospects and the risks and challenges we may encounter. ● We face intense competition and could lose market share, which could adversely affect our results of operations. ● We have a history of net losses and negative cash flows from operating activities, and we may not be able to maintain profitability or continue to generate positive cash flows from operating activities in the future. ● We face uncertainties relating to the change of regulatory regime for insurance related business. ● If we are unable to manage the risks presented by our international expansion, our financial results and future prospects will be adversely impacted. ● We may be materially adversely affected by the changes and evolvement in the regulation of medical crowdfunding business ● The administration, interpretation and enforcement of the regulations applicable to us are evolving and involve uncertainties.
Our management has concluded that our internal control over financial reporting was effective as of December 31, 2023. See “Item 15.
Our management has concluded that our internal control over financial reporting was effective as of December 31, 2024. See “Item 15.
A non-U.S. corporation, such as our company, will be considered a passive foreign investment company, or “PFIC,” for any taxable year if either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the value of its assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income.
A non-U.S. corporation, such as our company, will be considered a PFIC for any taxable year if either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the value of its assets (generally determined on the basis of a quarterly average) is attributable to assets that produce or are held for the production of passive income.
Although we began to record a mild increase in FYP and the number of new users as a result of our improved business operations in 2023, there is no assurance that we will be able to resume or maintain our historical growth rates in future periods.
Although we began to record a mild increase in FYP and the number of new users as a result of our improved business operations in 2023 and 2024, there is no assurance that we will be able to resume or maintain our historical performance in future periods.
Holders of our Class A ordinary shares are not subject to this discretionary proxy. You may be subject to limitations on transfer of your ADSs. Your ADSs are transferable on the books of the depositary.
Holders of our Class A ordinary shares are not subject to this discretionary proxy. 62 Table of Contents You may be subject to limitations on transfer of your ADSs. Your ADSs are transferable on the books of the depositary.
Our insurance marketplace, which partially relies on traffic from our medical crowdfunding business, may also suffer. 36 Table of Contents In addition, we also operate our business through our Weixin Official Accounts and Mini Programs. Users may access our products or services through Weixin Mini Programs operated by us.
Our insurance marketplace, which partially relies on traffic from our medical crowdfunding business, may also suffer. In addition, we also operate our business through our Weixin Official Accounts and Mini Programs. Users may access our products or services through Weixin Mini Programs operated by us.
For the years ended December 31, 2021, 2022 and 2023, service fees of RMB718 million, RMB749 million and RMB596 million were paid to the WFOE by the VIEs under the agreements, respectively. For the years ended December 31, 2021, 2022 and 2023, no dividends or distributions were made to Waterdrop Inc. by our subsidiaries.
For the years ended December 31, 2022, 2023 and 2024, service fees of RMB749 million, RMB596 million and RMB597 million were paid to the WFOE by the VIEs under the agreements, respectively. For the years ended December 31, 2022, 2023 and 2024, no dividends or distributions were made to Waterdrop Inc. by our subsidiaries.
Revenues contributed by the VIEs accounted for 99.6%, 93.6% and 88.6% of our total net revenues for the fiscal years 2021, 2022 and 2023, respectively. As used in this annual report, “Waterdrop,” “we,” “us,” “our company” or “our” refers to Waterdrop Inc. and its subsidiaries.
Revenues contributed by the VIEs accounted for 93.6%, 88.6% and 83.4% of our total net revenues for the fiscal years 2022, 2023 and 2024, respectively. As used in this annual report, “Waterdrop,” “we,” “us,” “our company” or “our” refers to Waterdrop Inc. and its subsidiaries.
For instance, on December 29, 2023, the Standing Committee of the National People’s Congress promulgated the amended PRC Company Law, which will take effect on July 1, 2024.
For instance, on December 29, 2023, the Standing Committee of the National People’s Congress promulgated the amended PRC Company Law, which took effect on July 1, 2024.
The Circular 108 also provides the upper limit for the predetermined fee rate and average supplemental fee rate for certain insurance products, which may affect the amount of insurance brokerage commission we charge on the insurance products and adversely affect our financial condition.
The Circular 108 also sets the upper limits on the predetermined fee rate and average supplemental fee rate for certain insurance products, which may affect the amount of insurance brokerage commission we charge on the insurance products and adversely affect our financial condition.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (other than the memorandum and articles of association and any special resolutions passed by such companies, and the registers of mortgages and charges of such companies) or to obtain copies of lists of shareholders of these companies.
Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect or obtain register of members or corporate records (other than the memorandum and articles of association, any special resolutions passed by shareholders, and the registers of mortgages and charges of such companies).
For further information on our equity incentive plan and information on our recognition of related expenses, please see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” A severe or prolonged downturn in Chinese or global economy could materially and adversely affect our business and financial condition.
For further information on our equity incentive plan and information on our recognition of related expenses, please see “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.” A severe or prolonged downturn in Chinese or global economy could materially and adversely affect our business and financial condition. The Chinese and global macroeconomic environment faces numerous challenges.
(2) Includes amounts of the consolidated VIEs and subsidiaries of VIEs without recourse to us of RMB21.7 million, RMB22.0 million, RMB0.8 million, nil and nil as of December 31, 2019, 2020, 2021, 2022 and 2023, respectively.
(2) Includes amounts of the consolidated VIEs and subsidiaries of VIEs without recourse to us of RMB22.0 million, RMB0.8 million, nil, nil and nil million as of December 31, 2020, 2021, 2022, 2023 and 2024, respectively.
GAAP financial statements. 66 Table of Contents Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs, we believe that we were a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2023, and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.
Based upon the nature and composition of our assets (in particular, the retention of substantial amounts of cash and investments), and the market price of our ADSs, we believe that we were a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2024, and we will likely be a PFIC for our current taxable year unless the market price of our ADSs increases and/or we invest a substantial amount of the cash and other passive assets we hold in assets that produce or are held for the production of active income.
Due to the complexities and uncertainties of the laws and regulations in mainland China governing the new industries we are going to operate our business in, we cannot assure you that all our new business operations in the future will be in compliance with the laws and regulations applicable to the new industries.
Due to the complexities and uncertainties of the laws and regulations in mainland China, Hong Kong, or other regions governing the new industries we are going to operate our business in, we cannot assure you that all our new business operations in the future will be in compliance with the laws and regulations applicable to the new industries.
Wei Ran, each holds 99% and 1% of the equity interests in Beijing Zongqing Xiangqian Technology Co., Ltd. (4) Ms. Xiaolei Sun and Ms. Nian Liu, each holds 99% and 1% of the equity interests in Beijing Guangmu Weichen Technology Co., Ltd.
Wei Ran, each holds 99% and 1% of the equity interests in Beijing Zongqing Xiangqian Technology Co., Ltd. (4) Ms. Xiaolei Sun and Ms. Nian Liu, each holds 99% and 1% of the equity interests in Beijing Guangmu Weichen Technology Co., Ltd. (5) Mr. Peng Shen and Mr.
We were required to rectify such non-compliance incidents within the prescribed time period. In August 2023, we were imposed an administrative penalty due to conducting insurance business in areas where we do not have branches in violation of applicable laws and regulations. As of the date of this annual report, we have rectified such non-compliance incidents as mentioned above.
In August 2023, we were imposed an administrative penalty due to conducting insurance business in areas where we do not have branches in violation of applicable laws and regulations. As of the date of this annual report, we have rectified such non-compliance incidents as mentioned above.
If our growth rates continue to slow or decline, investors’ perceptions of our business and prospects may be adversely affected and the market price of our ADSs could decline. We cannot assure you that we will be able to effectively manage the future growth of our rapidly evolving business.
If our growth rates continue to slow or decline, investors’ perceptions of our business and prospects may be adversely affected and the market price of our ADSs could decline. We cannot assure you that we will be able to effectively implement our business plans.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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The Regulatory Measures for Online Insurance Business also set forth specific operation and management requirements in relation to an insurance institution, including, among others, (i) an insurance institution shall adopt effective technical methods to verify the authenticity of each policyholder’s identity information, and completely record and keep the main internet insurance business process; (ii) an insurance institution shall complete practice registration for their personnel, and shall identify their qualification to engage in internet insurance business for public inquiry; (iii) the fees paid by insurance companies to insurance intermediary service providers shall not be settled in cash; (iv) an insurance institution shall assume the primary responsibility for the protection of customer information, and shall collect, process and use personal information following the principles of legality, legitimacy and necessity, and ensure the security and legality of the collection, processing and use of information; and (v) an insurance institution shall make several internal operation plans and protocols, for example, an emergency response plan for the interruption of internet insurance business operation, an internal control protocol for anti-money laundering, a customer due diligence protocol, a protocol for keeping customer identity data and transaction records, a protocol for the reporting of large-value transactions and suspicious transactions and an anti-fraud protocol. 90 Table of Contents The Regulatory Measures for Online Insurance Business set out a ramp-up process allowing the insurance institutions to achieve full compliance in phases until February 1, 2022.
The Regulatory Measures for Online Insurance Business also set forth specific operation and management requirements in relation to an insurance institution, including, among others, (i) an insurance institution shall adopt effective technical methods to verify the authenticity of each policyholder’s identity information, and completely record and keep the main internet insurance business process; (ii) an insurance institution shall complete practice registration for their personnel, and shall identify their qualification to engage in internet insurance business for public inquiry; (iii) the fees paid by insurance companies to insurance intermediary service providers shall not be settled in cash; (iv) an insurance institution shall assume the primary responsibility for the protection of customer information, and shall collect, process and use personal information following the principles of legality, legitimacy and necessity, and ensure the security and legality of the collection, processing and use of information; and (v) an insurance institution shall make several internal operation plans and protocols, for example, an emergency response plan for the interruption of internet insurance business operation, an internal control protocol for anti-money laundering, a customer due diligence protocol, a protocol for keeping customer identity data and transaction records, a protocol for the reporting of large-value transactions and suspicious transactions and an anti-fraud protocol. 85 Table of Contents The Regulatory Measures for Online Insurance Business set out a ramp-up process allowing the insurance institutions to achieve full compliance in phases until February 1, 2022.
An insurance broker shall open an independent account for the commissions it collects. 86 Table of Contents Services provided by Insurance Brokers and Their Practitioners Pursuant to the Provisions on the Supervision and Administration of Insurance Brokers, an insurance broker and its practitioners shall not engage in the following acts or behaviors: (i) deceive or mislead the insurer, the applicant, the insured or the beneficiary; (ii) conceal any important circumstances relating to the insurance contract; (iii) obstruct the applicant from fulfilling his or her obligation to tell the truth, or induce the applicant not to fulfill the same; (iv) grant or commit to grant to the applicant, the insured or the beneficiary any interest other than that provided in the insurance contract; (v) compel or induce the applicant to enter or restrict the applicant from entry into an insurance contract by using their administrative power, position or the advantage of their profession and other improper means; (vi) forge or alter the insurance contract without authorization or providing false evidence for parties to the insurance contract; (vii) misappropriate, retain or embezzle the premiums or insurance benefits; (viii) make use of the advantages of the business to obtain improper benefits for other institutions or individuals; (ix) defraud insurance benefits in collusion with the applicant, the insured or the beneficiary; or (x) disclose trade secrets of the insurer, the applicant or the insured known during the business activities.
An insurance broker shall open an independent account for the commissions it collects. 81 Table of Contents Services provided by Insurance Brokers and Their Practitioners Pursuant to the Provisions on the Supervision and Administration of Insurance Brokers, an insurance broker and its practitioners shall not engage in the following acts or behaviors: (i) deceive or mislead the insurer, the applicant, the insured or the beneficiary; (ii) conceal any important circumstances relating to the insurance contract; (iii) obstruct the applicant from fulfilling his or her obligation to tell the truth, or induce the applicant not to fulfill the same; (iv) grant or commit to grant to the applicant, the insured or the beneficiary any interest other than that provided in the insurance contract; (v) compel or induce the applicant to enter or restrict the applicant from entry into an insurance contract by using their administrative power, position or the advantage of their profession and other improper means; (vi) forge or alter the insurance contract without authorization or providing false evidence for parties to the insurance contract; (vii) misappropriate, retain or embezzle the premiums or insurance benefits; (viii) make use of the advantages of the business to obtain improper benefits for other institutions or individuals; (ix) defraud insurance benefits in collusion with the applicant, the insured or the beneficiary; or (x) disclose trade secrets of the insurer, the applicant or the insured known during the business activities.
The Circular on Regulating the Retrospective Management of Internet Insurance Sales Practices provides that, (i) online sales pages should be displayed only on insurance institutions’ online platforms operated by themselves and should be separated from non-sales pages; (ii) important insurance clauses should be presented on a separate page and be confirmed by policyholders or insureds; and (iii) insurance institutions should keep records for five years after the expiry of the policy for policies with a term of one year or less and for ten years for policies with a term longer than one year for purposes of backtracking sales. 91 Table of Contents On August 5, 2021, the China Banking and Insurance Regulatory Commission published the Notice on Carrying Out Special Rectification of Internet Insurance Chaos, which lays out a plan to identify and rectify key issues in the Internet insurance industry, including among others, hosting misleading sales, imposing excessively high service fees, and misuse of users’ information.
The Circular on Regulating the Retrospective Management of Internet Insurance Sales Practices provides that, (i) online sales pages should be displayed only on insurance institutions’ online platforms operated by themselves and should be separated from non-sales pages; (ii) important insurance clauses should be presented on a separate page and be confirmed by policyholders or insureds; and (iii) insurance institutions should keep records for five years after the expiry of the policy for policies with a term of one year or less and for ten years for policies with a term longer than one year for purposes of backtracking sales. 86 Table of Contents On August 5, 2021, the China Banking and Insurance Regulatory Commission published the Notice on Carrying Out Special Rectification of Internet Insurance Chaos, which lays out a plan to identify and rectify key issues in the Internet insurance industry, including among others, hosting misleading sales, imposing excessively high service fees, and misuse of users’ information.
According to the Circular on Further Regulating the Incentive Plans of Professional Insurance Intermediary Institutions, promulgated on February 28, 2012, by the China Insurance Regulatory Commission, all professional insurance intermediary institutions shall not, by way of connecting the equity incentive plan with their listing and exaggerating proceeds brought by their listing and other means, induce any of the general public to become a salesperson, or induce salespersons or clients to buy insurance products which are inconsistent with their actual insurance needs. 87 Table of Contents Regulations on Foreign Restriction on Insurance Brokerage According to the Announcement of the China Insurance Regulatory Commission on Permitting the Establishment of Wholly Foreign-invested Insurance Brokerage Companies by Foreign Insurance Brokerage Companies, which was promulgated by the China Insurance Regulatory Commission on December 11, 2006, and became effective on the same day, in five years following China’s accession into the WTO, the establishment of a wholly foreign owned enterprise to engage in insurance brokerage services shall be permitted.
According to the Circular on Further Regulating the Incentive Plans of Professional Insurance Intermediary Institutions, promulgated on February 28, 2012, by the China Insurance Regulatory Commission, all professional insurance intermediary institutions shall not, by way of connecting the equity incentive plan with their listing and exaggerating proceeds brought by their listing and other means, induce any of the general public to become a salesperson, or induce salespersons or clients to buy insurance products which are inconsistent with their actual insurance needs. 82 Table of Contents Regulations on Foreign Restriction on Insurance Brokerage According to the Announcement of the China Insurance Regulatory Commission on Permitting the Establishment of Wholly Foreign-invested Insurance Brokerage Companies by Foreign Insurance Brokerage Companies, which was promulgated by the China Insurance Regulatory Commission on December 11, 2006, and became effective on the same day, in five years following China’s accession into the WTO, the establishment of a wholly foreign owned enterprise to engage in insurance brokerage services shall be permitted.
Shenlanbao Insurance Marketplace In June 2023, we entered into definitive transaction documents in relation to the acquisition of Shenlanbao, which provides insurance knowledge-based content and insurance product reviews through multiple online channels to attract users, and convert them into insurance consumers to generate commission.
In June 2023, we entered into definitive transaction documents in relation to the acquisition of Shenlanbao, which provides insurance knowledge-based content and insurance product reviews through multiple online channels to attract users and convert them into insurance consumers to generate commission.
The Administrative Measures on Internet Information Services, which was promulgated by the PRC State Council on September 25, 2000, and amended in 2011, sets out guidelines on the provision of internet information services. The Administrative Measures on Internet Information Services classifies internet information services into commercial internet information services and non-commercial internet information services.
The Administrative Measures on Internet Information Services, which was promulgated by the PRC State Council on September 25, 2000, and amended in 2011 and 2025, sets out guidelines on the provision of internet information services. The Administrative Measures on Internet Information Services classifies internet information services into commercial internet information services and non-commercial internet information services.
If the actions constitute a crime, such providers and/or technical supporters shall be prosecuted for criminal responsibility. 100 Table of Contents On July 10, 2023, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Public Security and other PRC government authorities jointly issued the Interim Measures on the Management of Generative AI Services, which became effective on August 15, 2023.
If the actions constitute a crime, such providers and/or technical supporters shall be prosecuted for criminal responsibility. 95 Table of Contents On July 10, 2023, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Public Security and other PRC government authorities jointly issued the Interim Measures on the Management of Generative AI Services, which became effective on August 15, 2023.
On December 29, 2023, the Standing Committee of the National People’s Congress published the Decision to Amend the PRC Charity Law, which will take effect on September 5, 2024, pursuant to which (i) the individuals may post help-seeking information to resolve their own or their families’ difficulties, and the individuals shall be responsible for the authenticity of such information and shall not defraud any donation by fabricating facts or other means, and (ii) internet platforms that provide services to facilitate individual help-seeking activities shall be designated by the Ministry of Civil Affairs, and verify the authenticity of such help-seeking information and disclose relevant information to the public in a timely and comprehensive manner.
On December 29, 2023, the Standing Committee of the National People’s Congress published the Decision to Amend the PRC Charity Law, which took effect on September 5, 2024, pursuant to which (i) the individuals may post help-seeking information to resolve their own or their families’ difficulties, and the individuals shall be responsible for the authenticity of such information and shall not defraud any donation by fabricating facts or other means, and (ii) internet platforms that provide services to facilitate individual help-seeking activities shall be designated by the Ministry of Civil Affairs, and verify the authenticity of such help-seeking information and disclose relevant information to the public in a timely and comprehensive manner.
Chongqing Hecheng Insurance Adjusting Co., Ltd., one of the subsidiaries of the VIEs, has completed the filing with the local branch of the governmental authorities. 89 Table of Contents Regulations on Internet Insurance Business On December 7, 2020, the China Banking and Insurance Regulatory Commission promulgated the Regulatory Measures for Online Insurance Business, which became effective on February 1, 2021 and supersedes the Interim Regulatory Measures for Internet Insurance Business promulgated by the China Insurance Regulatory Commission on July 22, 2015.
Chongqing Hecheng Insurance Adjusting Co., Ltd., one of the subsidiaries of the VIEs, has completed the filing with the local branch of the governmental authorities. 84 Table of Contents Regulations on Internet Insurance Business On December 7, 2020, the China Banking and Insurance Regulatory Commission promulgated the Regulatory Measures for Online Insurance Business, which became effective on February 1, 2021 and supersedes the Interim Regulatory Measures for Internet Insurance Business promulgated by the China Insurance Regulatory Commission on July 22, 2015.
The software copyright owner may authorize others to exercise that copyright and is entitled to receive remuneration. ​ 101 Table of Contents Trademark Law Trademarks are protected under the PRC Trademark Law, which was adopted on August 23, 1982 and subsequently amended in 1993, 2001, 2013, and 2019, and the Implementation Regulations of the PRC Trademark Law adopted by the PRC State Council in 2002 and most recently amended in 2014.
The software copyright owner may authorize others to exercise that copyright and is entitled to receive remuneration. 96 Table of Contents Trademark Law Trademarks are protected under the PRC Trademark Law, which was adopted on August 23, 1982 and subsequently amended in 1993, 2001, 2013, and 2019, and the Implementation Regulations of the PRC Trademark Law adopted by the PRC State Council in 2002 and most recently amended in 2014.
Tairui Insurance Agency Co., Ltd., one of the subsidiaries of the VIEs, has obtained the license for conducting insurance agency business. ​ 88 Table of Contents Regulations on Insurance Claims Adjusting Business The principal regulation governing insurance adjusting firms is the Provisions on the Supervision and Administration of Insurance Adjustors, which was promulgated by the China Insurance Regulatory Commission on February 1, 2018, and became effective on May 1, 2018.
Tairui Insurance Agency Co., Ltd., one of the subsidiaries of the VIEs, has obtained the license for conducting insurance agency business. 83 Table of Contents Regulations on Insurance Claims Adjusting Business The principal regulation governing insurance adjusting firms is the Provisions on the Supervision and Administration of Insurance Adjustors, which was promulgated by the China Insurance Regulatory Commission on February 1, 2018, and became effective on May 1, 2018.
We aim to make unremitting efforts to build a brighter future for all users, employees and business partners through in-depth analysis of social issues and with the power of technology and digitalization. We have released an ESG report for two consecutive years since 2022, which systematically summarizes our ESG performance.
We aim to make unremitting efforts to build a brighter future for all users, employees and business partners through in-depth analysis of social issues and with the power of technology and digitalization. We have released an ESG report for three consecutive years since 2022, which systematically summarizes our ESG performance.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. 104 Table of Contents Regulations on Taxation Enterprise Income Tax On March 16, 2007, the National People’s Congress promulgated the PRC Enterprise Income Tax Law, which was amended on February 24, 2017 and December 29, 2018.
Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. 99 Table of Contents Regulations on Taxation Enterprise Income Tax On March 16, 2007, the National People’s Congress promulgated the PRC Enterprise Income Tax Law, which was amended on February 24, 2017 and December 29, 2018.
Integrate ESG management into key decisions of our company As a member of the United Nations Global Compact and a practitioner of sustainable development, Waterdrop shoulders the mission of “bring insurance and healthcare services to billions through technology,” and integrates ESG into daily operations, environmental protection, talent development and community investments.
Integrate ESG management into key decisions of our company As a member of the United Nations Global Compact and a practitioner of sustainable development, Waterdrop shoulders the mission of “bring insurance and healthcare service to billions through technology,” and integrates ESG into daily operations, environmental protection, talent development and community investments.
Industries not listed in the 2021 edition of negative list and 2022 edition of encouraged industry catalogue are generally open for foreign investments unless specifically restricted by other laws in mainland China. The establishment of wholly foreign-owned enterprises is generally allowed in encouraged and permitted industries.
Industries not listed in the 2024 edition of negative list and 2022 edition of encouraged industry catalogue are generally open for foreign investments unless specifically restricted by other laws in mainland China. The establishment of wholly foreign-owned enterprises is generally allowed in encouraged and permitted industries.
Each of Shuidi Hubao, Shuidi Hulian, Zongqing Xiangqian, Miaoyi Hulian (Beijing) Technology Co., Ltd., Shuidi Insurance Brokerage, Beijing Tianxia Youzhi Technology Co., Ltd., Beijing Zongqing Xiangqian Health Technology Co., Ltd., Tairui Insurance Agency Co., Ltd., Hainan Puluo Medical Technology Co., Ltd., Beijing Yifan Fengshun Medical Technology Co., Ltd., Beijing Jiujibang Technology Co., Ltd. and Zhuanxin Insurance Brokerage Co., Ltd. has obtained the ICP License, a type of operating license for value-added telecommunication business to provide internet information service.
Each of Shuidi Hubao, Shuidi Hulian, Zongqing Xiangqian, Miaoyi Hulian (Beijing) Technology Co., Ltd., Shuidi Insurance Brokerage, Beijing Tianxia Youzhi Technology Co., Ltd., Beijing Zongqing Xiangqian Health Technology Co., Ltd., Tairui Insurance Agency Co., Ltd., Hainan Puluo Medical Technology Co., Ltd., Beijing Yifan Fengshun Medical Technology Co., Ltd., Beijing Jiangxin Zhimeng Technology Co., Ltd. and Zhuanxin Insurance Brokerage Co., Ltd. has obtained the ICP License, a type of operating license for value-added telecommunication business to provide internet information service.
Violation of PRC Data Security Law may subject the entities or individuals to warning, fines, and business suspension, revocation of permits or business licenses, or even criminal liabilities. On December 28, 2021, the Cyberspace Administration of China published the Cybersecurity Review Measures, which became effective on February 15, 2022.
Violation of PRC Data Security Law may subject the entities or individuals to warning, fines, and business suspension, revocation of permits or business licenses, or even criminal liabilities. 90 Table of Contents On December 28, 2021, the Cyberspace Administration of China published the Cybersecurity Review Measures, which became effective on February 15, 2022.
Pursuant to these rules and regulations, the balance of the foreign debts of a foreign-invested enterprise cannot exceed the difference between the total investment and the registered capital of the foreign-invested enterprise. 103 Table of Contents On January 12, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing.
Pursuant to these rules and regulations, the balance of the foreign debts of a foreign-invested enterprise cannot exceed the difference between the total investment and the registered capital of the foreign-invested enterprise. On January 12, 2017, the People’s Bank of China promulgated the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing.
Regulations on Dividend Distribution The principal laws and regulations regulating the distribution of dividends by foreign-invested enterprises in China include the PRC Company Law, as amended in 2004, 2005, 2013, 2018 and 2023, of which the last amendment will take effect on July 1, 2024, and the 2019 PRC Foreign Investment Law and its implementation rules.
Regulations on Dividend Distribution The principal laws and regulations regulating the distribution of dividends by foreign-invested enterprises in China include the PRC Company Law, as amended in 2004, 2005, 2013, 2018 and 2023, of which the last amendment took effect on July 1, 2024, and the 2019 PRC Foreign Investment Law and its implementation rules.
It also requires that when receiving complaints and reports regarding untruthful help-seeking information, network service providers should promptly take the necessary measures to eliminate and reduce the impact. Regulations on Online Public Crowdfunding Information Platform On March 16, 2016, the PRC National People’s Congress published the PRC Charity Law, which came into effect on September 1, 2016.
It also requires that when receiving complaints and reports regarding untruthful help-seeking information, network service providers should promptly take the necessary measures to eliminate and reduce the impact. 88 Table of Contents Regulations on Online Public Crowdfunding Information Platform On March 16, 2016, the PRC National People’s Congress published the PRC Charity Law, which came into effect on September 1, 2016.
Our R&D team has extensive experience with leading internet technology and healthcare companies, and support our long-term business growth by (i) maintaining and strengthening all our platforms and application systems, (ii) actively participating in our business development and new business initiatives, exploring user needs and technology solutions, (iii) collaborating with and empowering external parties including insurance carriers to facilitate smooth execution and data flow, and (iv) actively tracking cutting-edge technologies applied in medical and life and health insurance industries.
Our R&D team has extensive experience with leading internet technology and healthcare companies, and supports our long-term business growth by (i) maintaining and strengthening all our platforms and application systems, (ii) actively participating in our business development and new business initiatives, exploring user needs and technology solutions, (iii) collaborating with and empowering external parties including insurance carriers to facilitate smooth execution and data flow, and (iv) actively tracking cutting-edge technologies, including next generation AI technologies, applied in medical and life and health insurance industries.
The data processors in violation of such measures are required to rectify such non-compliance within six months of the effectiveness date thereof. On March 22, 2024, the Cyberspace Administration of China issued the Provisions on Regulating and Promoting Cross-border Data Transfer, or the Cross-border Data Transfer Provisions.
The data processors in violation of such measures are required to rectify such non-compliance within six months of the effectiveness date thereof. 92 Table of Contents On March 22, 2024, the Cyberspace Administration of China issued the Provisions on Regulating and Promoting Cross-border Data Transfer, or the Cross-border Data Transfer Provisions.
Key Information—D. Risk Factors—Risks Related to Doing Business in China—The legal system in mainland China is evolving, which leads to uncertainties that could adversely affect us.” D. Property, Plant and Equipment We leased premises of approximately 12,500 square meters as of December 31, 2023 for our corporate headquarters in Beijing.
Key Information—D. Risk Factors—Risks Related to Doing Business in China—The legal system in mainland China is evolving, which leads to uncertainties that could adversely affect us.” D. Property, Plant and Equipment We leased premises of approximately 10,500 square meters as of December 31, 2024 for our corporate headquarters in Beijing.
In the case of serious violations, the operator’s websites may be ordered to be closed. The PRC Telecommunications Regulations categorize telecommunication services in China as either basic telecommunications services or value-added telecommunications services, and value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures.
In the case of serious violations, the operator’s websites may be ordered to be closed. 78 Table of Contents The PRC Telecommunications Regulations categorize telecommunication services in China as either basic telecommunications services or value-added telecommunications services, and value-added telecommunications services are defined as telecommunications and information services provided through public network infrastructures.
Insurance activities undertaken within mainland China are primarily governed by the PRC Insurance Law and the related rules and regulations. Insurance activities undertaken within mainland China are primarily governed by the PRC Insurance Law, which was promulgated by the Standing Committee of the National People’s Congress on June 30, 1995 and amended in 2015, and the related rules and regulations.
Insurance activities undertaken within mainland China are primarily governed by the PRC Insurance Law and the related rules and regulations. 80 Table of Contents Insurance activities undertaken within mainland China are primarily governed by the PRC Insurance Law, which was promulgated by the Standing Committee of the National People’s Congress on June 30, 1995 and amended in 2015, and the related rules and regulations.
Pursuant to the SAFE Circular 13, when setting up a new foreign-invested enterprise, investors should register with banks for direct domestic investment and direct overseas investment. 102 Table of Contents The Circular on Reforming the Management Approach Regarding the Settlement of Foreign Capital of Foreign-Invested Enterprise, which was promulgated on March 30, 2015, became effective on June 1, 2015, and was amended on December 30, 2019, provides that a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
Pursuant to the SAFE Circular 13, when setting up a new foreign-invested enterprise, investors should register with banks for direct domestic investment and direct overseas investment. 97 Table of Contents The Circular on Reforming the Management Approach Regarding the Settlement of Foreign Capital of Foreign-Invested Enterprise, which was promulgated on March 30, 2015, became effective on June 1, 2015, and was last amended on March 23, 2023, provides that a foreign-invested enterprise may, according to its actual business needs, settle with a bank the portion of the foreign exchange capital in its capital account for which the foreign exchange administration has confirmed monetary capital contribution rights and interests (or for which the bank has registered the injection of the monetary capital contribution into the account).
In light of the global climate change, we actively respond to the United Nations Sustainable Development Goals and national carbon peaking and carbon neutrality strategy, and endeavor to minimize the impact of our operations on the environment through environmental management, green office, awareness advocacy and other means. In 2023, we consumed a total of approximately 1,060,000 kWh of electricity.
In light of the global climate change, we actively respond to the United Nations Sustainable Development Goals and national carbon peaking and carbon neutrality strategy, and endeavor to minimize the impact of our operations on the environment through environmental management, green office, awareness advocacy and other means. In 2024, we consumed a total of approximately 740,000 kWh of electricity.
The exclusive business cooperation agreements remain effective, unless otherwise terminated by our WFOE in writing or based on conditions expressly stipulated in the exclusive business cooperation agreements. Agreements that provide us with the option to purchase the equity interests in the VIEs Exclusive Option Agreements.
The exclusive business cooperation agreements remain effective, unless otherwise terminated by our WFOE in writing or based on conditions expressly stipulated in the exclusive business cooperation agreements. 104 Table of Contents Agreements that provide us with the option to purchase the equity interests in the VIEs Exclusive Option Agreements.
These consumers include those from lower-tier cities who are not fully covered by insurance carriers or agents, the younger generation of internet users who are new to insurance, and consumers who otherwise cannot afford or are not aware of insurance products without affordable insurance products and consumer education that we offer.
Our insurance users include bread winners from lower-tier cities who are not fully covered by insurance carriers or agents, the younger generation of internet users who are new to insurance, and consumers who otherwise cannot afford or are not aware of insurance products without affordable insurance products and consumer education that we offer.
On December 6, 2007, the PRC State Council enacted the Regulations for the Implementation of the Enterprise Income Tax Law, which became effective on January 1, 2008 and was amended on April 23, 2019. Under the PRC Enterprise Income Tax Law and its implementing regulations, both resident enterprises and non-resident enterprises are subject to tax in China.
On December 6, 2007, the PRC State Council enacted the Regulations for the Implementation of the Enterprise Income Tax Law, which became effective on January 1, 2008 and was last amended on January 20, 2025. Under the PRC Enterprise Income Tax Law and its implementing regulations, both resident enterprises and non-resident enterprises are subject to tax in China.
The amendments include, among others, removing the performance and operational experience requirements for major foreign investors that hold equity interest in mainland China companies conducting value-added telecommunication business as set out in the Administrative Regulations on Foreign-Invested Telecommunications Enterprises.
The amendments include, among others, removing the performance and operational experience requirements for major foreign investors that hold equity interest in mainland China companies conducting value-added telecommunication business as set out in the Administrative Regulations on Foreign-Invested Telecommunications Enterprises. The amended Administrative Regulations on Foreign-Invested Telecommunications Enterprises took effect on May 1, 2022.
Pursuant to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the State Administration of Taxation and became effective on April 1, 2018, when determining the applicant’s status as the “beneficial owner” regarding tax treatment in connection with dividends, interests, or royalties in the tax treaties, several factors, including, without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in a third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant any tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and such factors will be analyzed according to the actual circumstances of the specific cases. 105 Table of Contents Tax on Indirect Transfer On February 3, 2015, the State Administration of Taxation issued the Bulletin on Issues of Enterprise Income Tax on Indirect Transfers of Assets by Non-PRC Resident Enterprises, or Bulletin 7.
Pursuant to the Circular on Several Questions regarding the “Beneficial Owner” in Tax Treaties, which was issued on February 3, 2018 by the State Administration of Taxation and became effective on April 1, 2018, when determining the applicant’s status as the “beneficial owner” regarding tax treatment in connection with dividends, interests, or royalties in the tax treaties, several factors, including, without limitation, whether the applicant is obligated to pay more than 50% of his or her income in twelve months to residents in a third country or region, whether the business operated by the applicant constitutes the actual business activities, and whether the counterparty country or region to the tax treaties does not levy any tax or grant any tax exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account, and such factors will be analyzed according to the actual circumstances of the specific cases.
In addition, the PRC Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in mainland China, including, among others, (i) that local governments shall abide by their commitments to the foreign investors; (ii) foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; (iii) mandatory technology transfer is prohibited; and (iv) the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within mainland China, may be freely remitted inward and outward in Renminbi or a foreign currency.
The PRC Foreign Investment Law provides that foreign investors shall not invest in the “prohibited” industries, and shall satisfy certain requirements as stipulated under the negative list for investing in “restricted” industries. 77 Table of Contents In addition, the PRC Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in mainland China, including, among others, (i) that local governments shall abide by their commitments to the foreign investors; (ii) foreign-invested enterprises are allowed to issue stocks and corporate bonds; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; (iii) mandatory technology transfer is prohibited; and (iv) the capital contributions, profits, capital gains, proceeds out of asset disposal, licensing fees of intellectual property rights, indemnity or compensation legally obtained, or proceeds received upon settlement by foreign investors within mainland China, may be freely remitted inward and outward in Renminbi or a foreign currency.
Based on the foregoing, if we provide funding to our wholly foreign-owned subsidiaries through shareholder loans, the balance of such loans (i) cannot exceed the difference between the total investment and the registered capital of the subsidiaries and we will need to register such loans with SAFE or its local branches in the event that the currently valid foreign debt management mechanism applies, or (ii) will be subject to the risk-weighted approach and 200% of its net assets, which is the upper limit of risk-weighted outstanding cross-border financing for an enterprise, and we will need to file the loans with SAFE in its information system in the event that the mechanism as provided in the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing applies.
Enterprises must file with SAFE in its capital item information system after entering into cross-border financing contracts and prior to three business days before drawing any money from the foreign debts. 98 Table of Contents Based on the foregoing, if we provide funding to our wholly foreign-owned subsidiaries through shareholder loans, the balance of such loans (i) cannot exceed the difference between the total investment and the registered capital of the subsidiaries and we will need to register such loans with SAFE or its local branches in the event that the currently valid foreign debt management mechanism applies, or (ii) will be subject to the risk-weighted approach and 200% of its net assets, which is the upper limit of risk-weighted outstanding cross-border financing for an enterprise, and we will need to file the loans with SAFE in its information system in the event that the mechanism as provided in the Notice of the People’s Bank of China on Matters concerning the Macro-Prudential Management of Full-Covered Cross-Border Financing applies.
Employers and employees are also required to pay and deposit housing funds, with an amount no less than 5% of the monthly average salary of the employee in the preceding year in full and on time. 106 Table of Contents Regulations on Share Incentive Plans Pursuant to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, which was issued by SAFE on February 15, 2012, employees, directors, supervisors, and other senior management who participate in any stock incentive plan of a publicly listed overseas company and who are mainland China citizens or non-mainland China citizens residing in mainland China for a continual period of no less than one year, subject to a few exceptions, are required to register with SAFE through a qualified domestic agent, which may be a mainland China subsidiary of such overseas listed company, and complete certain other procedures.
Regulations on Share Incentive Plans Pursuant to the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly Listed Company, which was issued by SAFE on February 15, 2012, employees, directors, supervisors, and other senior management who participate in any stock incentive plan of a publicly listed overseas company and who are mainland China citizens or non-mainland China citizens residing in mainland China for a continual period of no less than one year, subject to a few exceptions, are required to register with SAFE through a qualified domestic agent, which may be a mainland China subsidiary of such overseas listed company, and complete certain other procedures.
Social Insurance As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the PRC State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the PRC State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999, and the PRC Social Insurance Law implemented on July 1, 2011 and amended on December 29, 2018, employers are required to provide their employees in China with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, and medical insurance.
In addition, employees’ wages must not be lower than local standards on minimum wages and must be paid to employees in a timely manner. 101 Table of Contents Social Insurance As required under the Regulation of Insurance for Labor Injury implemented on January 1, 2004 and amended in 2010, the Provisional Measures for Maternity Insurance of Employees of Corporations implemented on January 1, 1995, the Decisions on the Establishment of a Unified Program for Old-Aged Pension Insurance of the PRC State Council issued on July 16, 1997, the Decisions on the Establishment of the Medical Insurance Program for Urban Workers of the PRC State Council promulgated on December 14, 1998, the Unemployment Insurance Measures promulgated on January 22, 1999, and the PRC Social Insurance Law implemented on July 1, 2011 and amended on December 29, 2018, employers are required to provide their employees in China with welfare benefits covering pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, and medical insurance.
Waterdrop Medical Crowdfunding We launched our medical crowdfunding platform, Waterdrop Medical Crowdfunding, in July 2016 to provide medical costs support by bringing together those who are seeking help and who are willing to help through social network.
In addition, we provide risk management services to certain insurance companies. Waterdrop Medical Crowdfunding We launched our medical crowdfunding platform, Waterdrop Medical Crowdfunding, in July 2016 to provide medical costs support by bringing together those who are seeking help and who are willing to help through social network.
On September 12, 2022, the Cyberspace Administration of China issued the Notice on Seeking Public Comments on the Decision on Amending the PRC Cybersecurity Law (Draft for Public Comments), which imposes more stringent legal liabilities for certain violations of the PRC Cybersecurity Law and increases the maximum fines for serious violation of the security protection obligations of network operation, network information, critical information infrastructure and personal information under the PRC Cybersecurity Law to RMB50 million or up to 5% of the turnover of the company in the preceding year. 95 Table of Contents On June 10, 2021, the Standing Committee of the National People’s Congress promulgated the Data Security Law, which took effect in September 2021.
On September 12, 2022, the Cyberspace Administration of China issued the Notice on Seeking Public Comments on the Decision on Amending the PRC Cybersecurity Law (Draft for Public Comments), which imposes more stringent legal liabilities for certain violations of the PRC Cybersecurity Law and increases the maximum fines for serious violation of the security protection obligations of network operation, network information, critical information infrastructure and personal information under the PRC Cybersecurity Law to RMB50 million or up to 5% of the turnover of the company in the preceding year.
Each spouse agreed not to assert any rights over the equity interests in the VIEs held by the respective individual shareholders. 109 Table of Contents In the opinion of Han Kun Law Offices, our PRC legal counsel: ● the ownership structures of the VIEs in China and our WFOE currently do not and will not result in violation of any explicit provisions of laws, rules or regulations currently in effect in mainland China; and ● each of the agreements under the contractual arrangements among our WFOE, the VIEs and their respective shareholders governed by laws, rules and regulations in mainland China currently is valid, binding and enforceable, and will not result in violation of any explicit provisions of laws, rules or regulations currently in effect in mainland China.
In the opinion of Han Kun Law Offices, our PRC legal counsel: · the ownership structures of the VIEs in China and our WFOE currently do not and will not result in violation of any explicit provisions of laws, rules or regulations currently in effect in mainland China; and · each of the agreements under the contractual arrangements among our WFOE, the VIEs and their respective shareholders governed by laws, rules and regulations in mainland China currently is valid, binding and enforceable, and will not result in violation of any explicit provisions of laws, rules or regulations currently in effect in mainland China.
The loan agreement among our WFOE, Zhuiqiu Jizhi and the shareholders of Zhuiqiu Jizhi are substantially the same. Equity Interest Pledge Agreements.
The loan agreement among our WFOE, Zhuiqiu Jizhi, Shuidi Hubao and their respective shareholders are substantially the same. Equity Interest Pledge Agreements.
As of December 31, 2023, we owned 210 computer software copyrights, 33 other copyrights and 96 patents in mainland China for various aspects of our operations and maintained 1,129 trademark registrations inside mainland China. As of December 31, 2023, we had registered or acquired 421 domain names, including sdbao.com, shuidichou.com and waterdrop-inc.com, among others.
As of December 31, 2024, we owned 218 computer software copyrights, 38 other copyrights and 132 patents in mainland China for various aspects of our operations and maintained 1,215 trademark registrations inside mainland China. As of December 31, 2024, we had registered or acquired 344 domain names, including sdbao.com , shuidichou.com and waterdrop-inc.com , among others.
These rules restate certain principles of the PRC Foreign Investment Law and further provide that, among others, (i) if a foreign-invested enterprise established prior to the effective date of the PRC Foreign Investment Law fails to adjust its legal form or governance structure to comply with the provisions of the PRC Companies Law or the PRC Partnership Enterprises Law, as applicable, and complete amendment registration before January 1, 2025, the enterprise registration authority will not process other registration matters of the foreign-invested enterprise and may public such non-compliance thereafter; and (ii) the provisions regarding equity interest transfer and distribution of profits and remaining assets as stipulated in the contracts among the joint venture parties of a foreign-invested enterprise established before the effective date of the PRC Foreign Investment Law may, after adjustment of the legal form and governing structure of such foreign-invested enterprise, remain binding upon the parties during the joint venture term of the enterprise. 82 Table of Contents On December 27, 2021, the National Development and Reform Commission, and the Ministry of Commerce promulgated the Special Administrative Measures for Access of Foreign Investment (Negative List) (2021 Edition), which came into effect on January 1, 2022.
These rules restate certain principles of the PRC Foreign Investment Law and further provide that, among others, (i) if a foreign-invested enterprise established prior to the effective date of the PRC Foreign Investment Law fails to adjust its legal form or governance structure to comply with the provisions of the PRC Companies Law or the PRC Partnership Enterprises Law, as applicable, and complete amendment registration before January 1, 2025, the enterprise registration authority will not process other registration matters of the foreign-invested enterprise and may public such non-compliance thereafter; and (ii) the provisions regarding equity interest transfer and distribution of profits and remaining assets as stipulated in the contracts among the joint venture parties of a foreign-invested enterprise established before the effective date of the PRC Foreign Investment Law may, after adjustment of the legal form and governing structure of such foreign-invested enterprise, remain binding upon the parties during the joint venture term of the enterprise.
Business Overview We are a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Waterdrop Insurance Marketplace We provide various health and life insurance products to meet the growing protection demand of our consumers through our Waterdrop Insurance Marketplace.
The information contained on our website is not a part of this annual report. B. Business Overview We are a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Waterdrop Insurance Marketplace We provide various health and life insurance products to meet the growing protection demand of our consumers through our Waterdrop Insurance Marketplace.
The amended Administrative Regulations on Foreign-Invested Telecommunications Enterprises took effect on May 1, 2022. 84 Table of Contents In 2006, the predecessor of the Ministry of Industry and Information Technology issued the Circular of the Ministry of Information Industry on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Business, according to which a foreign investor in the telecommunications services industry of China must establish a foreign-invested enterprise and apply for a telecommunications businesses operation license.
In 2006, the predecessor of the Ministry of Industry and Information Technology issued the Circular of the Ministry of Information Industry on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Business, according to which a foreign investor in the telecommunications services industry of China must establish a foreign-invested enterprise and apply for a telecommunications businesses operation license.
Information on the Company—B. Business Overview—Waterdrop Insurance Marketplace—Shenlanbao Insurance Marketplace.” Our principal executive offices are located at Block C, Wangjing Science and Technology Park, No. 2 Lize Zhonger Road, Chaoyang District, Beijing, People’s Republic of China. Our telephone number at this address is +86 10 5339-4997.
Our principal executive offices are located at Block C, Wangjing Science and Technology Park, No. 2 Lize Zhonger Road, Chaoyang District, Beijing, People’s Republic of China. Our telephone number at this address is +86 10 5339-4997.
After identifying potential subjects, we will obtain their consent before we refer these patients to our customers who will work with trial sites for further determination on their enrollment eligibility. In 2023, we successfully enrolled more than 3,300 patients in over 500 clinical trials.
After identifying potential subjects, we will obtain their consent before we refer these patients to our clients who will work with trial sites for further determination on their enrollment eligibility. In 2024, we successfully enrolled 3,409 patients in 506 clinical trials.
E-Find helps pharmaceutical companies find matches for clinical trials. People in need, mostly patients, can have access to investigational drugs and frontier innovative therapies at reduced treatment costs through E-Find.
People in need, mostly patients, can have access to investigational new drugs and frontier innovative therapies at reduced treatment costs through E-Find.
We are committed to cultivating the awareness of energy conservation and environmental protection among our employees. In 2023, we held 23 training sessions on water conservation and electricity conservation for office administrative staff.
We are committed to cultivating the awareness of energy conservation and environmental protection among our employees. In 2024, we held 27 training sessions on water conservation and electricity conservation for office administrative staff. We also actively promoted paperless office administration process.
This would help save the cost and speed up the process of investigational drug development and product launch. Customers of our patient recruitment services mainly include multinational and Chinese biopharmaceutical companies and leading biotechnology companies. In 2023, we cooperated with 204 pharmaceutical companies and CROs.
Faster patient enrollment could help save the cost and speed up the process of investigational new drug development and product launch. Clients of our patient recruitment services mainly include multinational and Chinese biopharmaceutical companies and leading biotechnology companies. In 2024, we cooperated with 261 pharmaceutical companies and CROs.
We generally select and offer on Waterdrop Insurance Marketplace products that represent great value, address demands of our consumers, or already gain popularity on the market. Our products offering covers both short-term health and long-term health and life insurance. For certain insurance products, we provide consumers with the option of monthly payments while such products are normally paid annually.
We generally select and offer on Waterdrop Insurance Marketplace products that represent great value, address demands of our consumers, or already gain popularity on the market. For certain insurance products, we provide consumers with the option of monthly payments while such products are normally paid annually. We believe that this gives more payment flexibility to consumers.
We also leased offices in various other cities, with an aggregate area of approximately 20,700 square meters as of December 31, 2023. These leases vary in duration from one to three years. Item 4A. Unresolved Staff Comments None.
We also leased offices in various other cities, with an aggregate area of approximately 18,000 square meters as of December 31, 2024. These leases vary in duration from one to three years.
Regulations on Internet Security The Decision in Relation to Protection of Internet Security enacted by the Standing Committee of the National People’s Congress on December 28, 2000, as amended in August 2009, provides that, among other things, the following activities conducted through the internet, if constituted a crime under criminal laws in mainland China, are subject to criminal punishment: (i) hacking into a computer or system of strategic importance; (ii) intentionally inventing and spreading destructive programs such as computer viruses to attack computer systems and communications networks, thus damaging computer systems and the communications networks; (iii) in violation of national regulations, discontinuing computer networks or the communications services without authorization; (iv) leaking state secrets; (v) spreading false commercial information; or (vi) infringing intellectual property rights through internet.
Regulations on Internet Security The Decision in Relation to Protection of Internet Security enacted by the Standing Committee of the National People’s Congress on December 28, 2000, as amended in August 2009, provides that, among other things, the following activities conducted through the internet, if constituted a crime under criminal laws in mainland China, are subject to criminal punishment: (i) hacking into a computer or system of strategic importance; (ii) intentionally inventing and spreading destructive programs such as computer viruses to attack computer systems and communications networks, thus damaging computer systems and the communications networks; (iii) in violation of national regulations, discontinuing computer networks or the communications services without authorization; (iv) leaking state secrets; (v) spreading false commercial information; or (vi) infringing intellectual property rights through internet. 89 Table of Contents The Provisions on Technological Measures for Internet Security Protection, which was promulgated on December 13, 2005 by the Ministry of Public Security and came into effect on March 1, 2006, requires internet service providers and organizations that use interconnection implementing technical measures for internet security protection, like technical measures for preventing any matter or act that may endanger network security, for example, computer viruses, invasion or attacks to or destruction of the network.
In 2023, we invested over RMB4.2 million in staff training, with a total of approximately 68,000 attendance for online and offline training sessions. Awards We have been honored to have our corporate social responsibility efforts acknowledged throughout 2023.
We have also developed a comprehensive training system for our employees and consultants. In 2024, we invested over RMB4.74 million in staff training, with a total of approximately 389,000 attendances for online and offline training sessions. Awards We have been honored to have our corporate social responsibility efforts acknowledged throughout 2024.
Pursuant to these provisions, China-based companies that offer and list securities in overseas markets shall establish confidentiality and archives system. The “China-based companies” refer to companies in China limited by shares which are directly listed on a foreign stock exchange and the domestic operating entities of an offshore company being indirectly listed on a foreign stock exchange.
The “China-based companies” refer to companies in China limited by shares which are directly listed on a foreign stock exchange and the domestic operating entities of an offshore company being indirectly listed on a foreign stock exchange.
Pursuant to the loan agreement between our WFOE and each of the shareholders of Zongqing Xiangqian, our WFOE extended loans to the shareholders of Zongqing Xiangqian, who had contributed the loan principals to Zongqing Xiangqian mainly as registered capital.
The powers of attorney remain effective until such shareholder ceases to be a shareholder of the VIE. Loan Agreements. Pursuant to the loan agreement between our WFOE and each of the shareholders of Zongqing Xiangqian, our WFOE extended loans to the shareholders of Zongqing Xiangqian, who had contributed the loan principals to Zongqing Xiangqian mainly as registered capital.
This regulation further illustrates certain commonly seen illegal practices of application operators in terms of the protection of personal information, including: “failure to publicize rules for collecting and using personal information”; “failure to expressly state the purpose, manner and scope of collecting and using personal information”; “collection and use of personal information without consent of application users”; “collecting personal information irrelevant to the services provided by the application in violation of the principle of necessity,” “provision of personal information to others without users’ consent”; “failure to provide the function of deleting or correcting personal information as required by laws”; and “failure to publish information such as methods for complaints and reporting.” Any of the following acts, among others, of an application operator will constitute “collection and use of personal information without consent of users:” (i) collecting any user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking any user’s consent such that the user’s normal use of such application is disturbed; (iii) collecting any user’s personal information which has been actually collected by the application operator or activating the permission for collecting any user’s personal information by the application operator that is beyond the scope of personal information which the user authorizes the application operator to collect; (iv) seeking any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing of such information; (vii) misleading users to permit collecting their personal information or activating the permission for collecting the users’ personal information by improper methods, such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission for collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by the application operator.
This regulation further illustrates certain commonly seen illegal practices of application operators in terms of the protection of personal information, including: “failure to publicize rules for collecting and using personal information”; “failure to expressly state the purpose, manner and scope of collecting and using personal information”; “collection and use of personal information without consent of application users”; “collecting personal information irrelevant to the services provided by the application in violation of the principle of necessity,” “provision of personal information to others without users’ consent”; “failure to provide the function of deleting or correcting personal information as required by laws”; and “failure to publish information such as methods for complaints and reporting.” Any of the following acts, among others, of an application operator will constitute “collection and use of personal information without consent of users:” (i) collecting any user’s personal information or activating the permission for collecting any user’s personal information without obtaining such user’s consent; (ii) collecting personal information or activating the permission for collecting the personal information of any user who explicitly refuses such collection, or repeatedly seeking any user’s consent such that the user’s normal use of such application is disturbed; (iii) collecting any user’s personal information which has been actually collected by the application operator or activating the permission for collecting any user’s personal information by the application operator that is beyond the scope of personal information which the user authorizes the application operator to collect; (iv) seeking any user’s consent in a non-explicit manner; (v) modifying any user’s settings for activating the permission for collecting any personal information without such user’s consent; (vi) using users’ personal information and any algorithms to directionally push any information, without providing the option of non-directed pushing of such information; (vii) misleading users to permit collecting their personal information or activating the permission for collecting the users’ personal information by improper methods, such as fraud and deception; (viii) failing to provide users with the means and methods to withdraw their permission for collecting personal information; and (ix) collecting and using personal information in violation of the rules for collecting and using personal information promulgated by the application operator. 93 Table of Contents Pursuant to the Notice of the Supreme People’s Court, the Supreme People’s Procuratorate and the Ministry of Public Security on Legally Punishing Criminal Activities Infringing upon the Personal Information of Citizens, issued in 2013, and the Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues regarding Legal Application in Criminal Cases Infringing upon the Personal Information of Citizens, which was issued on May 8, 2017 and took effect on June 1, 2017, the following activities may constitute the crime of infringing upon a citizen’s personal information: (i) providing a citizen’s personal information to specified persons or releasing a citizen’s personal information online or through other methods in violation of relevant national provisions; (ii) providing legitimately collected information relating to a citizen to others without such citizen’s consent (unless the information is processed, not traceable to a specific person and not recoverable); (iii) collecting a citizen’s personal information in violation of applicable rules and regulations when performing a duty or providing services; or (iv) collecting a citizen’s personal information by purchasing, accepting or exchanging such information in violation of applicable rules and regulations.
Our contractual arrangements with the VIEs and their respective shareholders allow us to (i) direct the activities of the VIEs, (ii) receive substantially all of the economic benefits of the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by the law in mainland China.
We refer to Waterdrop Technology as our WFOE, and Zhuiqiu Jizhi, Shuidi Hubao, Shuidi Hulian, Zongqing Xiangqian and Guangmu Weichen as the VIEs in this annual report. 103 Table of Contents Our contractual arrangements with the VIEs and their respective shareholders allow us to (i) direct the activities of the VIEs, (ii) receive substantially all of the economic benefits of the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when and to the extent permitted by the law in mainland China.
In addition, we place great emphasis on the protection of employees’ rights and interests. We care about the demands of employees. We regularly hold face-to-face meetings for our employees to meet with our senior management, such as CEO. We have also developed a comprehensive training system for our employees and consultants.
We also value gender equality with female employees accounting for 50.2% of our employees as of December 31, 2024. In addition, we place great emphasis on the protection of employees’ rights and interests. We care about the demands of employees. We regularly hold face-to-face meetings for our employees to meet with our senior management, such as CEO.
The operator of the third-party internet platform shall not engage in the sales business of financial products in any manner before obtaining the approval of the financial management department. 92 Table of Contents On April 15, 2022, the China Banking and Insurance Regulatory Commission issued the Administrative Measures for Sales Activities of Life Insurance (Draft for Comments) for comments.
The operator of the third-party internet platform shall not engage in the sales business of financial products in any manner before obtaining the approval of the financial management department. 87 Table of Contents On November 11, 2022, the China Banking and Insurance Regulatory Commission issued the Administrative Measures for the Disclosure of Information on Personal Insurance Products, which became effective on June 30, 2023.
Any violation of these laws and regulations may subject the internet information service provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancelation of filings, closedown of websites or even criminal liabilities. 98 Table of Contents With respect to the security of information collected and used by mobile applications, pursuant to the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Applications, which was issued on January 23, 2019, application operators should collect and use personal information in compliance with the PRC Cybersecurity Law and should be responsible for the security of personal information obtained from users and take effective measures to strengthen the protection of personal information.
With respect to the security of information collected and used by mobile applications, pursuant to the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Applications, which was issued on January 23, 2019, application operators should collect and use personal information in compliance with the PRC Cybersecurity Law and should be responsible for the security of personal information obtained from users and take effective measures to strengthen the protection of personal information.
The opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.
The opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies. 102 Table of Contents On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines, which became effective on March 31, 2023.
We also engage external information security experts to test and improve the robustness of our security system. Technology and Infrastructure Technology Infrastructure We engineered our systems for rapid scalability, with modern cloud infrastructure, proper information security controls, and third-party expert support. We primarily host our services on servers and network infrastructure of top cloud computing vendors.
To comply with evolving data privacy laws, we have established a Data Security Committee and engage external experts to continuously enhance our security framework. We engineered our systems for rapid scalability, with modern cloud infrastructure, proper information security controls, and third-party expert support. We primarily host our services on servers and network infrastructure of top cloud computing vendors.
The PRC Foreign Investment Law is promulgated by the National People’s Congress on March 15, 2019, and has taken effect since January 1, 2020.
The direct or indirect investment activities of a foreign investor shall be governed by the PRC Foreign Investment Law and its implementation rules. The PRC Foreign Investment Law is promulgated by the National People’s Congress on March 15, 2019, and has taken effect since January 1, 2020.
Once reviewed and approved by us, campaign pages will be created and ready for online sharing. Online dissemination and fundraising Patients are then able to share their campaigns online, starting from our applications, Weixin Official Account and Mini Program embedded in Weixin among their relatives, friends and acquaintances, who can view the patient’s story and donate directly through crowdfunding links.
After our review and approval, these pages will be published online for sharing. 71 Table of Contents Online Dissemination and Fundraising Patients can then share their campaigns online, starting from our applications, Weixin Official Account and Mini Program among their relatives, friends and acquaintances, who can view the patient’s story and donate directly through crowdfunding links.
Under the PRC Civil Code, a donation contract may be subject to obligations and if the beneficiary fails to perform such obligations, the donor may rescind the donation and require the beneficiary to return the donated property. 93 Table of Contents Regulations on Critical Illness Crowdfunding On August 30, 2016, the Ministry of Civil Affairs, the Ministry of Industry and Information Technology, the State Administration of Press, Publication, Radio, Film and Television and the Cyberspace Administration of the PRC, the predecessor of the National Radio and Television Administration of the PRC, issued the Administrative Measures for the Services of Public Crowdfunding Platform, which came into effect on September 1, 2016.
Regulations on Critical Illness Crowdfunding On August 30, 2016, the Ministry of Civil Affairs, the Ministry of Industry and Information Technology, the State Administration of Press, Publication, Radio, Film and Television and the Cyberspace Administration of the PRC, the predecessor of the National Radio and Television Administration of the PRC, issued the Administrative Measures for the Services of Public Crowdfunding Platform, which came into effect on September 1, 2016.
As of the date of this annual report, we completed the acquisition of 60% equity interest in Shenlanbao, and the acquisition of the remaining 40% equity interest in Shenlanbao is subject to the achievement of certain performance targets and the fulfillment of closing conditions.
As of the date of this annual report, we are in the process of completing the acquisition of the remaining 40% equity interest in Shenlanbao pursuant to the transaction agreements, which is subject to the fulfillment of certain closing conditions.
On May 1, 2018, the China Insurance Regulatory Commission promulgated the Provisions on the Supervision and Administration of Insurance Brokers, which specifies the provisions regarding market access and exit, operating rules, industry self-discipline, monitor and inspection and legal obligations for insurance brokers. 85 Table of Contents Market Access Pursuant to the Provisions on the Supervision and Administration of Insurance Brokers, to operate insurance brokerage businesses within mainland China, an insurance brokerage company shall satisfy the requirements stipulated by the China Insurance Regulatory Commission and obtain an Insurance Brokerage License.
On May 1, 2018, the China Insurance Regulatory Commission promulgated the Provisions on the Supervision and Administration of Insurance Brokers, which specifies the provisions regarding market access and exit, operating rules, industry self-discipline, monitor and inspection and legal obligations for insurance brokers.
Pursuant to these administrative measures, any telecommunication services operator must conduct telecommunication business pursuant to the type and within the scope of business as specified in its operating license for value-added telecommunication business. 83 Table of Contents Pursuant to the Catalog of Telecommunications Services promulgated by the PRC Ministry of Information Industry (the predecessor of the Ministry of Industry and Information Technology) on February 21, 2003 and last amended by the Ministry of Industry and Information Technology on June 6, 2019, internet information services fall within Class 2 value-added telecommunication services.
Pursuant to the Catalog of Telecommunications Services promulgated by the PRC Ministry of Information Industry (the predecessor of the Ministry of Industry and Information Technology) on February 21, 2003 and last amended by the Ministry of Industry and Information Technology on June 6, 2019, internet information services fall within Class 2 value-added telecommunication services.
We have a huge and growing consumer base on our Waterdrop Insurance Marketplace. As of December 31, 2023, the cumulative number of insurance consumers we served, including those we served through Shenlanbao Insurance Marketplace following our acquisition of Shenlanbao, was approximately 115.3 million, 32.3 million of which were paying insurance consumers.
As of December 31, 2024, the cumulative number of insurance consumers we served, including those we served through Shenlanbao Insurance Marketplace following our acquisition of Shenlanbao, was approximately 117.3 million, 33.6 million of which were paying insurance consumers.
Regulations on Foreign Investment Restriction on Value-Added Telecommunications Services Pursuant to the Special Administrative Measures for Access of Foreign Investment (Negative List) (2021 Edition), the equity ratio of foreign investment in the value-added telecommunications enterprises is subject to the cap of 50% except for the investment in e-commerce operation businesses, domestic multi-party communication businesses, information storage and re-transmission businesses, and call center businesses.
Regulations on Foreign Investment Restriction on Value-Added Telecommunications Services Pursuant to the Special Administrative Measures for Access of Foreign Investment (Negative List) (2024 Edition), the equity ratio of foreign investment in the value-added telecommunications enterprises is subject to the cap of 50% except for the investment in e-commerce operation businesses, domestic multi-party communication businesses, information storage and re-transmission businesses, and call center businesses. 79 Table of Contents Specifically, foreign direct investment in telecommunications companies in mainland China is governed by the Administrative Regulations on Foreign-Invested Telecommunications Enterprises, which was promulgated by the PRC State Council on December 11, 2001 and amended on September 10, 2008 and February 6, 2016.
After the design phase is completed, it takes us as short as one week to establish connection with the system of the insurance carrier and launch the co-designed product. Such co-designed products are underwritten by insurance carriers and generally offered on Waterdrop Insurance Marketplace exclusively, which deepens our collaboration with these insurance carriers and enhances our platform’s attractiveness to consumers.
Currently, co-designed products constitute a majority of insurance products offered on Waterdrop Insurance Marketplace. After the design phase is completed, it takes us as short as one week to establish connection with the system of the insurance carrier and launch the co-designed product.
Shuidi Insurance Brokerage, one of the subsidiaries of the VIEs, has obtained the license for conducting insurance brokerage business.
Each of Shuidi Insurance Brokerage and Zhuanxin Insurance Brokerage Co., Ltd., subsidiaries of the VIEs, has obtained licenses for conducting insurance brokerage business.
The Cyberspace Administration of China solicited comments on this draft, but there is no timetable as to when it will be enacted. On July 7, 2022, the Cyberspace Administration of China issued the Measures for the Security Assessment of Cross-border Transfer of Data, which became effective on September 1, 2022.
On July 7, 2022, the Cyberspace Administration of China issued the Measures for the Security Assessment of Cross-border Transfer of Data, which became effective on September 1, 2022.
We consider our insurance coverage to be in line with that of other companies of similar size and business nature in China. 81 Table of Contents Regulation Regulations on Foreign Investment in Mainland China The establishment, operation and management of companies in mainland China are governed by the PRC Company Law, as amended in 2005, 2013, 2018 and 2023, and the latest amendment will take effect on July 1, 2024.
Regulation Regulations on Foreign Investment in Mainland China The establishment, operation and management of companies in mainland China are governed by the PRC Company Law, as amended in 2005, 2013, 2018 and 2023, and the latest amendment took effect on July 1, 2024. The PRC Company Law applies to both domestic companies and foreign-invested companies in mainland China.
Pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, and other applicable laws in mainland China, if a Hong Kong resident enterprise is determined by the competent tax authority in mainland China to have met the conditions and requirements under this arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5%.
Dividend Withholding Tax The PRC Enterprise Income Tax Law and its implementation rules provide that since January 1, 2008, an income tax rate of 10% will normally apply to dividends declared to non-PRC resident investors that do not have an establishment or place of business in China, or that have such establishment or place of business but the non-PRC resident investors’ relevant income is not effectively connected with the establishment or place of business, to the extent such dividends are derived from sources within China. 100 Table of Contents Pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, and other applicable laws in mainland China, if a Hong Kong resident enterprise is determined by the competent tax authority in mainland China to have met the conditions and requirements under this arrangement and other applicable laws, the 10% withholding tax on the dividends the Hong Kong resident enterprise receives from a mainland China resident enterprise may be reduced to 5%.
The depth and breadth of our insurance carrier network allows us to present a comprehensive suite of product options to consumers.
The depth and breadth of our insurance carrier network allows us to present a comprehensive suite of product options to consumers. 70 Table of Contents Our insurance platform is built on a secure and scalable infrastructure that is connected to the systems of insurance carriers.
We compete primarily on the basis of consumers acquisition, wide selection of products tailored to consumers’ needs, innovation in technology and business model, proximity to consumers and data insights, risk management, and operational efficiency.
Waterdrop Insurance Marketplace’s current or potential competitors include affiliated agents, bancassurance, direct sales, and third-party insurance brokers and agents. We compete primarily on the basis of user acquisition, wide selection of products tailored to user needs, innovation in technology and business model, proximity to users and data insights, risk management, and operational efficiency.
As of December 31, 2023, we collaborated with 101 insurance carriers to offer 1,357 types of health and life insurance products online. Out of the 1,357 types of products: 600 were short-term health insurance, while 757 were long-term health and life insurance; 917 were health insurance, while 440 were life insurance.
As of December 31, 2024, we collaborated with 102 insurance carriers to offer 1,967 types of health and life insurance products on Waterdrop Insurance Marketplace. Out of the 1,967 types of products: 786 were short-term health insurance, while 1,181 were long-term health and life insurance; 1,399 were health insurance, while 568 were life insurance.
The Cross-border Data Transfer Provisions provide certain exemptions from obligations under the circumstances of cross-border data transfer, including, among others, the obligations for data security assessment, concluding a standard contract for provision of personal information abroad or passing the certification for personal information protection. 97 Table of Contents On December 8, 2022, the Ministry of Industry and Information Technology issued the Measures for the Administration of Data Security in the Field of Industry and Information Technology (for Trial Implementation), which became effective on January 1, 2023.
The Cross-border Data Transfer Provisions provide certain exemptions from obligations under the circumstances of cross-border data transfer, including, among others, the obligations for data security assessment, concluding a standard contract for provision of personal information abroad or passing the certification for personal information protection.
In the event that any personal information is or may be leaked, falsified or lost, the information processor shall take immediate remedial measures, inform the natural person concerned and escalate such situation to the competent department as required. 99 Table of Contents On August 20, 2021, the Standing Committee of the National Peoples’ Congress issued the PRC Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection.
In the event that any personal information is or may be leaked, falsified or lost, the information processor shall take immediate remedial measures, inform the natural person concerned and escalate such situation to the competent department as required.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders and ADS holders.” 115 Table of Contents The PRC Enterprise Income Tax Law also imposes a withholding income tax of 10% on dividends distributed by a foreign-invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.
Risk Factors—Risks Related to Doing Business in China—If we are classified as a mainland China resident enterprise for mainland China income tax purposes, such classification could result in unfavorable tax consequences to us and our non-mainland China shareholders and ADS holders.” 110 Table of Contents The PRC Enterprise Income Tax Law also imposes a withholding income tax of 10% on dividends distributed by a foreign-invested enterprise to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement.
Our research and development expenses mainly consist of (i) payroll and related expenses for employees involved in platform and new function development and significant improvement, and (ii) charges for the usage of the server and cloud service incurred to support research, design, and development activities by research and development personnel, as well as (iii) expenses of facilities and equipment, such as depreciation expenses, rental and others. 114 Table of Contents Taxation Cayman Islands The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciations.
Our research and development expenses mainly consist of (i) payroll and related expenses for employees involved in platform and new function development and significant improvement, and (ii) charges for the usage of the server and cloud service incurred to support research, design, and development activities by research and development personnel, as well as (iii) expenses of facilities and equipment, such as depreciation expenses, rental and others. 109 Table of Contents Taxation Cayman Islands The Cayman Islands currently levies no taxes on corporations based upon profits, income, gains or appreciations.
If it is determined that we are unable to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a corresponding decrease to earnings. 120 Table of Contents Recent Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 “Recent accounting pronouncements” to our audited consolidated financial statements included elsewhere in this annual report.
If it is determined that we are unable to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a corresponding decrease to earnings. 115 Table of Contents Recent Accounting Pronouncements A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 “Recent accounting pronouncements” to our audited consolidated financial statements included elsewhere in this annual report.
E. Critical Accounting Estimates For our critical accounting estimates, see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates.” F. Safe Harbor See “Forward-Looking Information” on page 2 of this annual report.
Critical Accounting Estimates For our critical accounting estimates, see “Item 5. Operating and Financial Review and Prospects—Critical Accounting Estimates.” F. Safe Harbor See “Forward-Looking Information” on page 2 of this annual report.
Our prepaid expense and other assets represent primarily (i) the fund receivable from external payment service providers through which we collect and transfer insurance premiums to insurance carriers, and donors’ donation received by our external payment service provider prior to those being transferred to custodian bank, and (ii) the advances to suppliers, such as the prepayments to third-party traffic channels.
Our prepaid expense and other assets represent primarily (i) prepayments and deposits, (ii) the fund receivable from external payment service providers through which we collect and transfer insurance premiums to insurance carriers, and donors’ donation received by our external payment service provider prior to those being transferred to custodian bank, and (iii) the advances to suppliers, such as the prepayments to third-party traffic channels.
The presumption may be overcome if we have sufficient evidence to demonstrate that the undistributed dividends will be re-invested and the remittance of the dividends will be postponed indefinitely. We did not record any deferred tax liabilities for dividend withholding tax, as we have no retained earnings for the years ended December 31, 2021, 2022 and 2023. See “Item 3.
The presumption may be overcome if we have sufficient evidence to demonstrate that the undistributed dividends will be re-invested and the remittance of the dividends will be postponed indefinitely. We did not record any deferred tax liabilities for dividend withholding tax, as we have no retained earnings for the years ended December 31, 2022, 2023 and 2024. See “Item 3.
We believe FYP is a strong indicator of brokerage income because it better demonstrates the brokerage income potential we may generate for an insurance policy.
We believe FYP is a strong indicator of brokerage income because it better demonstrates the brokerage income we may generate for an insurance policy.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023. Holding Company Structure Waterdrop Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our WFOE and the VIEs.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024. Holding Company Structure Waterdrop Inc. is a holding company with no material operations of its own. We conduct our operations primarily through our WFOE and the VIEs.
We have also been endeavoring to optimize our marketing strategies by adjusting our selling and marketing expenses and allocation of marketing resources. For instance, we moderately increased our investment in third-party traffic channels to promote certain new products in 2023.
We have also been endeavoring to optimize our marketing strategies by adjusting our selling and marketing expenses and allocation of marketing resources. For instance, we moderately increased our investment in third-party traffic channels to promote certain new products in 2024.
While our business is influenced by general factors affecting our industry, our results of operations are more directly affected by company-specific factors, including the following major ones: 110 Table of Contents Expansion and retention of consumer base Brokerage income earned from insurance carriers through our insurance marketplace is the main source of our revenue, which is significantly affected by the number of insurance consumers on the Waterdrop Insurance Marketplace and Shenlanbao Insurance Marketplace.
While our business is influenced by general factors affecting our industry, our results of operations are more directly affected by company-specific factors, including the following major ones: Expansion and retention of consumer base Brokerage income earned from insurance carriers through our insurance marketplace is the main source of our revenue, which is significantly affected by the number of insurance consumers on the Waterdrop Insurance Marketplace and Shenlanbao Insurance Marketplace.
The net operating revenue from other business increased by 46.4% from RMB86.8 million in 2022 to RMB127.1 million (US$17.9 million) in 2023, which was mainly due to the 69.0% increase of digital clinical trial solution income as a result of the increase in the number of patients successfully enrolled from 2,846 in 2022 to more than 3,300 patients in 2023.
The net operating revenue from other business increased by 46.4% from RMB86.8 million in 2022 to RMB127.1 million in 2023, which was mainly due to the 69.0% increase of digital clinical trial solution income as a result of the increase in the number of patients successfully enrolled from 2,846 in 2022 to more than 3,300 patients in 2023.
As of December 31, 2023, as our WFOE, almost all other subsidiaries in mainland China, the VIEs and the subsidiaries of the VIEs are in an accumulated loss position, no statutory reserve was appropriated.
As of December 31, 2024, as our WFOE, almost all other subsidiaries in mainland China, the VIEs and the subsidiaries of the VIEs are in an accumulated loss position, no statutory reserve was appropriated.
The net operating revenue from crowdfunding business increased by 4.4% from RMB155.8 million in 2022 to RMB162.7 million (US$22.9 million) in 2023, which was mainly because we started to charge crowdfunding service fees in April 2022 and have generated revenue from crowdfunding service fees since then.
The net operating revenue from crowdfunding business increased by 4.4% from RMB155.8 million in 2022 to RMB162.7 million in 2023, which was mainly because we started to charge crowdfunding service fees in April 2022 and have generated revenue from crowdfunding service fees since then.
Our WFOE has not paid dividends and will not be able to pay dividends until it generates accumulated profits and meets the requirements for statutory reserve fund. 124 Table of Contents C. Research and Development See “Item 4. Information on the Company—B. Business Overview—Technology and Infrastructure” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
Our WFOE has not paid dividends and will not be able to pay dividends until it generates accumulated profits and meets the requirements for statutory reserve fund. C. Research and Development See “Item 4. Information on the Company—B. Business Overview— Technology and Infrastructure” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.” D.
Research and development expenses Our research and development expenses increased by 2.7% from RMB291.3 million in 2022 to RMB299.1 million (US$42.1 million) in 2023.
Research and development expenses Our research and development expenses increased by 2.7% from RMB291.3 million in 2022 to RMB299.1 million in 2023.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2024 that are reasonably likely to have a material effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the period since January 1, 2025 that are reasonably likely to have a material effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions. 119 Table of Contents E.
Investing activities Net cash used in investing activities in 2023 was RMB1,173.0 million (US$165.2 million), consisting primarily of net cash paid for acquisitions of subsidiaries, and net cash used in purchase of short-term and long-term investment products.
Net cash used in investing activities in 2023 was RMB1,173.0 million, consisting primarily of net cash paid for acquisitions of subsidiaries, and net cash used in purchase of short-term and long-term investment products.
Starting from the second quarter of 2023, our chief operating decision makers have been managing the business through three operating segments, and assessing the performance and allocating resources under the new operating segment structure.
Starting from the second quarter of 2023, our chief operating decision makers have been managing the business, assessing the performance and allocating resources under the new operating segment structure.
In addition, in terms of the technical support service, we primarily provide technical services to certain insurance brokerage or agency companies through our CRM system. We also provide marketing services to certain companies on our various website channels and apps. In addition, we provide risk management services to certain insurance companies.
In addition, in terms of the technical support service, we primarily provide technical services to certain insurance brokerage or agency companies through our CRM system. We also provide marketing services to certain companies on our various website channels and apps. In addition, we provide risk management services to certain insurance companies. 108 Table of Contents Crowdfunding.
The increase was primarily due to the consolidation of the financial results of Shenlanbao, which incurred research and development expenses of RMB12.0 million (US$1.7 million), partially offset by a decrease of RMB3.4 million (US$0.5 million) in research and development personnel costs and share-based compensation expenses.
The increase was primarily due to the consolidation of the financial results of Shenlanbao, which incurred research and development expenses of RMB12.0 million, partially offset by a decrease of RMB3.4 million in research and development personnel costs and share-based compensation expenses.
Information on the Company—C. Organizational Structure.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.” Substantially all of our operating revenue has been, and we expect that it is likely to continue to be, in the form of Renminbi.
See “Item 4. Information on the Company—C. Organizational Structure.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.” The majority of our operating revenue has been, and we expect that it is likely to continue to be, in the form of Renminbi.
The difference between the net profit of RMB163.7 million (US$23.1 million) and positive operating cash flow of RMB406.5 million (US$57.3 million) was certain adjustment of non-cash expenses items, such as share-based compensation expense of RMB133.9 million (US$18.9 million) and depreciation of property, equipment and software of RMB13.4 million (US$1.9 million), and changes in working capital accounts, which mainly include (i) RMB149.9 million (US$21.1 million) decrease in prepaid expense and other assets, and (ii) RMB75.3 million (US$10.6 million) increase in insurance premium payables, partially offset by (i) RMB43.5 million (US$6.1 million) decrease in accrued expenses and other current liabilities, and (ii) RMB99.9 million (US$14.1 million) increase in contract assets, and (iii) RMB36.7 million (US$5.2 million) increase in right of use assets, net.
The difference between the net profit of RMB163.7 million and positive operating cash flow of RMB406.5 million was certain adjustment of non-cash expenses items, such as share-based compensation expense of RMB133.9 million and depreciation of property, equipment and software of RMB13.4 million, and changes in working capital accounts, which mainly include (i) RMB149.9 million decrease in prepaid expense and other assets, and (ii) RMB75.3 million increase in insurance premium payables, partially offset by (i) RMB43.5 million decrease in accrued expenses and other current liabilities, and (ii) RMB99.9 million increase in contract assets, and (iii) RMB36.7 million increase in right of use assets, net.
The net operating revenue from insurance related business decreased by 8.5% from RMB2,559.2 million in 2022 to RMB2,340.9 million (US$329.7 million) in 2023, which was mainly due to the net impact of the decrease of the short-term insurance brokerage income by 15.2% from RMB1,628.9 million in 2022 to RMB1,381.9 million (US$194.6 million) in 2023, partially offset by the increase of the long-term insurance brokerage income by 15.2% from RMB714.4 million in 2022 to RMB823.3 million (US$116.0 million) in 2023.
The net operating revenue from insurance related business decreased by 8.5% from RMB2,559.2 million in 2022 to RMB2,340.9 million in 2023, which was mainly due to the net impact of the decrease of the short-term insurance brokerage income by 15.2% from RMB1,628.9 million in 2022 to RMB1,381.9 million in 2023, partially offset by the increase of the long-term insurance brokerage income by 15.2% from RMB714.4 million in 2022 to RMB823.3 million in 2023.
We will continue to make capital expenditures to meet our business growth. Our operating lease commitments consist of the commitments under the lease agreements for our office premises. Contractual obligation as of December 31, 2023 for our operating lease commitments amounted to RMB60.2 million (US$8.5 million).
We will continue to make capital expenditures to meet our business growth. Our operating lease commitments consist of the commitments under the lease agreements for our office premises. Contractual obligation as of December 31, 2024 for our operating lease commitments amounted to RMB45.5 million (US$6.2 million).
Our general and administrative expenses mainly consist of (i) payroll and related expenses for employees engaging in general corporate functions, including the share-based compensation expenses, (ii) professional service fees and other general corporate expenses, including impairment cost, and (iii) expenses associated with the use by these functions of facilities and equipment, such as rental and depreciation expenses.
Our general and administrative expenses mainly consist of (i) payroll and related expenses for employees engaging in general corporate functions, including the share-based compensation expenses, (ii) professional service fees and other general corporate expenses, (iii) impairment loss of intangible assets and allowance for credit losses, and (iv) expenses associated with the use by these functions of facilities and equipment, such as rental and depreciation expenses.
Our restricted cash was RMB667.7 million, RMB517.4 million and RMB577.1 million (US$81.3 million) as of December 31, 2021, 2022 and 2023, respectively. Our restricted cash primarily consists of premiums collected by us from the insurance consumers in a fiduciary capacity until disbursed to the insurance carriers. Restricted cash also includes guarantee deposits.
Our restricted cash was RMB517.4 million, RMB577.1 million and RMB520.6 million (US$71.3 million) as of December 31, 2022, 2023 and 2024, respectively. Our restricted cash primarily consists of premiums collected by us from the insurance consumers in a fiduciary capacity until disbursed to the insurance carriers. Restricted cash also includes guarantee deposits.
As of December 31, 2021, 2022 and 2023, our prepaid expense and other assets were RMB369.8 million, RMB342.5 million and RMB189.8 million (US$26.7 million), respectively. Insurance premium payables represent insurance premiums we collected on behalf of insurance carriers from the insurance consumers but have not yet been remitted to insurance carriers as of the balance sheet dates.
As of December 31, 2022, 2023 and 2024, our prepaid expense and other assets were RMB342.5 million, RMB189.8 million and RMB182.6 million (US$25.0 million), respectively. Insurance premium payables represent insurance premiums we collected on behalf of insurance carriers from the insurance consumers but have not yet been remitted to insurance carriers as of the balance sheet dates.
Our sales and marketing expenses primarily consist of (i) marketing expenses for user acquisition and brand building, (ii) payroll and related expenses for employees involved in sales and marketing functions, and (iii) the associated expenses of facilities and equipment, such as depreciation expenses, rental and others. General and administrative expenses.
Our sales and marketing expenses primarily consist of (i) marketing expenses for user acquisition and brand building, (ii) payroll and related expenses for employees involved in sales and marketing functions, (iii) outsourced sales and marketing service fees to third parties, and (iv) the associated expenses of facilities and equipment, such as depreciation expenses, rental and others. General and administrative expenses.
Operating costs Our operating costs increased by 17.3% from RMB1,019.4 million in 2022 to RMB1,195.5 million (US$168.4 million) in 2023, which was mainly due to (i) an increase of RMB109.3 million (US$15.4 million) in costs of referral and service fees, (ii) an increase of RMB62.0 million (US$8.7 million) in the crowdfunding consultants team costs as we commenced generating crowdfunding service fees since April 2022, and (iii) the consolidation of the financial results of Shenlanbao, which incurred operating costs of RMB38.7 million (US$5.5 million), partially offset by (i) a decrease of RMB19.5 million (US$2.7 million) in the cost of one-year health insurance coverage related to the termination of mutual aid plan based on the final settlement information, which occurred in the third quarter of 2022, and (ii) a decrease of RMB15.1 million (US$2.1 million) in personnel costs.
Operating costs and expenses Our total operating costs and expenses increased by RMB313.7 million, or 13.5%, from RMB2,323.8 million in 2022 to RMB2,637.5 million in 2023, which was mainly due to the consolidation of the financial results of Shenlanbao which generated operating costs and expenses of RMB130.7 million. 113 Table of Contents Operating costs Our operating costs increased by 17.3% from RMB1,019.4 million in 2022 to RMB1,195.5 million in 2023, which was mainly due to (i) an increase of RMB109.3 million in costs of referral and service fees, (ii) an increase of RMB62.0 million in the crowdfunding consultants team costs as we commenced generating crowdfunding service fees since April 2022, and (iii) the consolidation of the financial results of Shenlanbao, which incurred operating costs of RMB38.7 million, partially offset by (i) a decrease of RMB19.5 million in the cost of one-year health insurance coverage related to the termination of mutual aid plan based on the final settlement information, which occurred in the third quarter of 2022, and (iii) a decrease of RMB15.1 million in personnel costs.
In March 2024, our board of directors approved a special cash dividend of US$0.04 per ADS or US$0.004 per ordinary share to shareholders of record as of the close of business on April 19, 2024.
In March 2024, our board of directors approved a special cash dividend of US$0.04 per ADS or US$0.004 per ordinary share to shareholders of record as of the close of business on April 19, 2024. The aggregate payment amounted to approximately US$14.8 million.
B. Liquidity and Capital Resources We had net cash used in operating activities of RMB1,096.7 million in 2021, and net cash provided by operating activities of RMB765.7 million in 2022 and RMB406.5 million (US$57.3 million) in 2023. Our primary sources of liquidity have been proceeds from operating activities and equity and debt financing.
B. Liquidity and Capital Resources We had net cash provided by operating activities of RMB765.7 million in 2022, RMB406.5 million in 2023 and RMB437.3 million (US$59.9 million) in 2024. Our primary sources of liquidity have been proceeds from operating activities and equity and debt financing.
Sales and marketing expenses Our sales and marketing expenses increased by 18.6% from RMB624.5 million in 2022 to RMB740.5 million (US$104.3 million) in 2023, which was mainly due to (i) the consolidation of the financial results of Shenlanbao, which incurred sales and marketing expenses of RMB67.1 million (US$9.5 million), (ii) an increase of RMB100.8 million (US$14.2 million) in marketing expenses to third-party traffic channels, (iii) an increase of RMB29.8 million (US$4.2 million) in personnel costs and share-based compensation costs, partially offset by a decrease of RMB86.3 million (US$12.2 million) in outsourced sales and marketing service fees to third parties. 117 Table of Contents General and administrative expenses Our general and administrative expenses increased by 3.5% from RMB388.7 million in 2022 to RMB402.4 million (US$56.7 million) in 2023, which was mainly due to the consolidation of the financial results of Shenlanbao, which incurred general and administrative expenses of RMB12.9 million (US$1.8 million).
Sales and marketing expenses Our sales and marketing expenses increased by 18.6% from RMB624.5 million in 2022 to RMB740.5 million in 2023, which was mainly due to (i) the consolidation of the financial results of Shenlanbao, which incurred sales and marketing expenses of RMB67.1 million, (ii) an increase of RMB100.8 million in marketing expenses to third-party traffic channels, (iii) an increase of RMB29.8 million in personnel costs and share-based compensation costs, partially offset by a decrease of RMB86.3 million in outsourced sales and marketing service fees to third parties.
Furthermore, we have invested in technology to accumulate and process multi-dimensional consumer data and transaction data, and we plan to conduct in-depth analysis as analysis of consumer needs will contribute to our consumer acquisition and conversion, product design and risk management capabilities, which in turn improves our overall operational margin.
Furthermore, we have invested in technology to accumulate and process multi-dimensional consumer data and transaction data, and have conducted in-depth analysis to improve our user acquisition and conversion, product design and risk management capabilities, which in turn improves our overall operational margin.
Our accrued expenses and other current liabilities were RMB498.8 million, RMB584.1 million and RMB597.7 million (US$84.2 million) as of December 31, 2021, 2022 and 2023, respectively. Although we consolidate the results of the VIEs, we only have access to the assets or earnings of the VIEs through our contractual arrangements with the VIEs and their shareholders. See “Item 4.
Our accrued expenses and other current liabilities were RMB584.1 million, RMB597.7 million and RMB704.0 million (US$96.5 million) as of December 31, 2022, 2023 and 2024, respectively. 116 Table of Contents Although we consolidate the results of the VIEs, we only have access to the assets or earnings of the VIEs through our contractual arrangements with the VIEs and their shareholders.
Risk Factors—Risks Related to Doing Business in China—Regulation in mainland China of loans to and direct investment in the entities in mainland China by offshore holding companies may delay us from using the proceeds of financing activities to make loans or additional capital contributions to our subsidiaries in mainland China and to make loans to the VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” The following table sets forth the movements of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Selected Consolidated Cash Flow Data: Net cash (used in)/provided by operating activities ​ (1,096,652) 765,705 406,516 57,258 Net cash used in investing activities ​ (846,898) (139,819) (1,172,960) (165,208) Net cash provided by/(used in) financing activities ​ 2,119,670 (57,457) (377,238) (53,133) Effect of exchange rate changes on cash and cash equivalents ​ (14,086) 37,723 26,173 3,685 Net increase/(decrease) in cash and cash equivalents and restricted cash ​ 162,034 606,152 (1,117,509) (157,398) Total cash and cash equivalents and restricted cash at beginning of year ​ 1,323,349 1,485,383 2,091,535 294,587 Total cash and cash equivalents and restricted cash at end of year ​ 1,485,383 2,091,535 974,026 137,189 ​ 122 Table of Contents Operating activities Net cash provided by operating activities in 2023 was RMB406.5 million (US$57.3 million).
Risk Factors—Risks Related to Doing Business in China—Regulation in mainland China of loans to and direct investment in the entities in mainland China by offshore holding companies may delay us from using the proceeds of financing activities to make loans or additional capital contributions to our subsidiaries in mainland China and to make loans to the VIEs, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” The following table sets forth the movements of our cash flows for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Selected Consolidated Cash Flow Data: Net cash provided by operating activities ​ 765,705 406,516 437,250 59,904 Net cash (used in)/provided by investing activities ​ (139,819) (1,172,960) 291,637 39,953 Net cash used in financing activities ​ (57,457) (377,238) (198,579) (27,205) Effect of exchange rate changes on cash and cash equivalents ​ 37,723 26,173 2,577 353 Net increase/(decrease) in cash and cash equivalents and restricted cash ​ 606,152 (1,117,509) 532,885 73,005 Total cash and cash equivalents and restricted cash at beginning of year ​ 1,485,383 2,091,535 974,026 133,441 Total cash and cash equivalents and restricted cash at end of year ​ 2,091,535 974,026 1,506,911 206,446 ​ Operating activities Net cash provided by operating activities in 2024 was RMB437.3 million (US$59.9 million).
Operating costs primarily consists of (i) payroll and related expenses for insurance agents and customer service personnel, (ii) transaction fees charged by third-party payment platforms relating to insurance brokerage services, (iii) costs of referral and service fees, (iv) charges for the usage of the server and cloud service incurred for operational support of the platforms, and the expenses of facilities and equipment, such as depreciation expenses, rental and others, attributed to our principal operations, (v) costs for patient recruitment consultants team, (vi) costs for the crowdfunding consultants team and cost related to the information review and investigation of medical crowdfunding campaigns as we started to generate revenue from crowdfunding service fees since April 2022, and (vii) costs for medical expenses and one-year health insurance coverage we offered related to termination of the Waterdrop Mutual Aid business in March 2021.
Operating costs primarily consists of (i) payroll and related expenses for insurance agents and customer service personnel, (ii) transaction fees charged by third-party payment platforms relating to insurance brokerage services, (iii) costs of referral and service fees, (iv) charges for the usage of the server and cloud service incurred for operational support of the platforms, and the expenses of facilities and equipment, such as depreciation expenses, rental and others, attributed to our principal operations, (v) costs for digital clinical trial solution consultants team, and (vi) costs for the crowdfunding consultants team and cost related to the information review and investigation of medical crowdfunding campaigns.
The increase in accrued expenses and other current liabilities was primarily due to the increase in the accrued customer service expense payable to third-party companies. Net cash used in operating activities in 2021 was RMB1,096.7 million.
The increase in accrued expenses and other current liabilities was primarily due to the increase in the accrued customer service expense payable to third-party companies.
As of December 31, 2023, we had an aggregate of RMB3,970.6 million (US$559.2 million) in cash and cash equivalents, restricted cash and short-term investments, of which approximately 72.1% were held in Renminbi and the remainder was mainly held in U.S. dollars.
As of December 31, 2024, we had an aggregate of RMB4.2 billion (US$574.2 million) in cash and cash equivalents, restricted cash, short-term investments and long-term debt investments included in long-term investments, of which approximately 45.9% were held in Renminbi and the remainder was mainly held in U.S. dollars.
Our research and development expenses as a percentage of net operating revenue increased from 10.4% in 2022 to 11.4% in 2023. ​ 112 Table of Contents Key Components of Results of Operations Operating revenue, net We generate net operating revenue primarily from (i) providing insurance brokerage services to insurance carriers, (ii) providing technical services to insurance carriers and other insurance brokerage or agency companies through our platforms, (iii) crowdfunding service fees from operating Waterdrop Medical Crowdfunding, and (iv) digital clinical trial solution income, mainly deriving from matching qualified and suitable patients for enrollment in clinical trials for biopharmaceutical companies and leading biotechnology companies.
We have promoted technology advances in certain sales and customer service processes that effectively reduced costs, namely our own CRM system and AI applications. 107 Table of Contents Key Components of Results of Operations Operating revenue, net We generate net operating revenue primarily from (i) providing insurance brokerage services to insurance carriers, (ii) providing technical services to insurance carriers and other insurance brokerage or agency companies through our platforms, (iii) crowdfunding service fees from operating Waterdrop Medical Crowdfunding, and (iv) digital clinical trial solution income, mainly deriving from matching qualified and suitable patients for enrollment in clinical trials for biopharmaceutical companies and leading biotechnology companies.
Risk Factors—Risks Related to Our Corporate Structure—Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our net operating revenue for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ (%) ​ RMB ​ (%) ​ RMB ​ US$ ​ (%) ​ ​ (in thousands, except for percentage data) Operating revenue, net 3,205,914 100.0 2,801,768 100.0 2,630,707 370,527 100.0 Operating costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ Operating costs ​ (1,054,475) (32.9) (1,019,362) (36.4) (1,195,544) (168,389) (45.5) Sales and marketing expenses (1) ​ (3,104,769) (96.8) (624,478) (22.3) (740,451) (104,290) (28.1) General and administrative expenses ​ (530,522) (16.5) (388,651) (13.9) (402,395) (56,676) (15.3) Research and development expenses ​ (378,990) (11.8) (291,290) (10.3) (299,060) (42,122) (11.4) Total operating costs and expenses: ​ (5,068,756) (158.0) (2,323,781) (82.9) (2,637,450) (371,477) (100.3) Operating (loss)/profit ​ (1,862,842) (58.0) 477,987 17.1 (6,743) (950) (0.3) Other income ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 48,662 1.5 81,713 2.9 136,043 19,161 5.2 Foreign currency exchange gain ​ 9,349 0.3 4,064 0.1 4,342 612 0.2 Others, net ​ 9,764 0.3 66,929 2.4 30,598 4,310 1.1 (Loss)/profit before income tax ​ (1,795,067) (55.9) 630,693 22.5 164,240 23,133 6.2 Income tax benefit/(expense) ​ 220,987 6.9 (22,976) (0.8) (555) (78) (0.0) Net (loss)/profit ​ (1,574,080) (49.0) 607,717 21.7 163,685 23,055 6.2 Note: (1) The breakdown of sales and marketing expenses is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Marketing expenses for user acquisition and brand building 2,232,942 120,471 240,351 33,853 Payroll and related expenses for employees 295,434 316,795 390,534 55,006 Expenses of facilities and equipment 21,023 22,133 21,627 3,046 Outsourced sales and marketing service fee to third parties 507,421 149,249 63,512 8,945 Others 47,949 15,830 24,427 3,440 Total sales and marketing expenses 3,104,769 624,478 740,451 104,290 ​ 116 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Operating revenue, net Our net operating revenue decreased by 6.1% from RMB2,801.8 million in 2022 to RMB2,630.7 million (US$370.5 million) in 2023, including the revenue generated by Shenlanbao of RMB92.9 million (US$13.1 million) after consolidation.
Risk Factors—Risks Related to Our Corporate Structure—Contractual arrangements in relation to the VIEs may be subject to scrutiny by the PRC tax authorities and they may determine that we or the VIEs owe additional taxes, which could negatively affect our financial condition and the value of your investment.” Results of Operations The following table sets forth a summary of our consolidated results of operations for the periods presented, both in absolute amount and as a percentage of our net operating revenue for the periods presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ (%) ​ RMB ​ (%) ​ RMB ​ US$ ​ (%) ​ ​ (in thousands, except for percentage data) Operating revenue, net 2,801,768 100.0 2,630,707 100.0 2,771,821 379,738 100.0 Operating costs and expenses ​ ​ ​ ​ ​ ​ ​ ​ Operating costs ​ (1,019,362) (36.4) (1,195,544) (45.5) (1,314,740) (180,119) (47.4) Sales and marketing expenses (1) ​ (624,478) (22.3) (740,451) (28.1) (694,769) (95,183) (25.1) General and administrative expenses ​ (388,651) (13.9) (402,395) (15.3) (367,652) (50,368) (13.3) Research and development expenses ​ (291,290) (10.3) (299,060) (11.4) (216,502) (29,661) (7.8) Total operating costs and expenses: ​ (2,323,781) (82.9) (2,637,450) (100.3) (2,593,663) (355,331) (93.6) Operating profit/(loss) ​ 477,987 17.1 (6,743) (0.3) 178,158 24,407 6.4 Other income ​ ​ ​ ​ ​ ​ ​ ​ Interest income ​ 81,713 2.9 136,043 5.2 149,121 20,429 5.4 Foreign currency exchange gain ​ 4,064 0.1 4,342 0.2 8,016 1,098 0.3 Others, net ​ 66,929 2.4 30,598 1.1 25,295 3,465 0.9 Profit before income tax ​ 630,693 22.5 164,240 6.2 360,590 49,399 13.0 Income tax expense ​ (22,976) (0.8) (555) (0.0) (9,707) (1,330) (0.3) Net profit ​ 607,717 21.7 163,685 6.2 350,883 48,069 12.7 Note: (1) The breakdown of sales and marketing expenses is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ ​ RMB ​ RMB ​ RMB ​ US$ ​ ​ (in thousands) Marketing expenses for user acquisition and brand building ​ 120,471 240,351 280,906 38,484 Payroll and related expenses for employees ​ 316,795 390,534 297,451 40,751 Expenses of facilities and equipment ​ 22,133 21,627 20,293 2,780 Outsourced sales and marketing service fee to third parties ​ 149,249 63,512 75,994 10,411 Others ​ 15,830 24,427 20,125 2,757 Total sales and marketing expenses ​ 624,478 740,451 694,769 95,183 ​ 111 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Operating revenue, net Our net operating revenue increased by 5.4% from RMB2,630.7 million in 2023 to RMB2,771.8 million (US$379.7 million) in 2024.
Other revenues mainly include income generated from digital clinical trial solution and other new initiatives. We derive digital clinical trial solution income primarily from matching qualified and suitable patients for enrollment in clinical trials for our customers that mainly include biopharmaceutical companies and leading biotechnology companies.
We derive digital clinical trial solution income primarily from matching qualified and suitable patients for enrollment in clinical trials for our customers that mainly include biopharmaceutical companies and leading biotechnology companies. We enter into patient recruitment contracts with these customers to match qualified patients with optimal suitability for enrollment in clinical trials.
The following table sets forth the breakdown of our total operating costs and expenses, in amounts and as percentages of net operating revenue for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB (%) RMB (%) RMB US$ (%) ​ ​ (in thousands, except for percentage data) Operating costs and expenses: Operating costs 1,054,475 32.9 1,019,362 36.4 1,195,544 168,389 45.5 Sales and marketing expenses 3,104,769 96.8 624,478 22.3 740,451 104,290 28.1 General and administrative expenses 530,522 16.5 388,651 13.9 402,395 56,676 15.3 Research and development expenses 378,990 11.8 291,290 10.3 299,060 42,122 11.4 Total operating costs and expenses: 5,068,756 158.0 2,323,781 82.9 2,637,450 371,477 100.3 ​ Operating costs.
The following table sets forth the breakdown of our total operating costs and expenses, in amounts and as percentages of net operating revenue for each of the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB (%) RMB (%) RMB US$ (%) ​ ​ (in thousands, except for percentage data) Operating costs and expenses: Operating costs 1,019,362 36.4 1,195,544 45.5 1,314,740 180,119 47.4 Sales and marketing expenses 624,478 22.3 740,451 28.1 694,769 95,183 25.1 General and administrative expenses 388,651 13.9 402,395 15.3 367,652 50,368 13.3 Research and development expenses 291,290 10.3 299,060 11.4 216,502 29,661 7.8 Total operating costs and expenses: 2,323,781 82.9 2,637,450 100.3 2,593,663 355,331 93.6 ​ Operating costs.
The following table sets forth the breakdown of our operating revenue by segment, in amounts and as percentages of operating revenue for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2021 ​ 2022 ​ 2023 ​ RMB (%) RMB (%) RMB US$ (%) ​ ​ (in thousands, except for percentage data) Segment revenue: Insurance (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Brokerage income -Short-term insurance brokerage income 2,037,677 63.6 1,628,902 58.1 1,381,855 194,630 52.5 -Long-term insurance brokerage income 789,790 24.6 714,426 25.5 823,305 115,960 31.3 Brokerage income subtotal ​ 2,827,467 ​ 88.2 ​ 2,343,328 ​ 83.6 ​ 2,205,160 ​ 310,590 ​ 83.8 Technical service income 243,542 7.6 215,832 7.7 135,755 19,121 5.2 Insurance total ​ 3,071,009 ​ 95.8 ​ 2,559,160 ​ 91.3 ​ 2,340,915 ​ 329,711 ​ 89.0 Crowdfunding — — 155,803 5.6 162,683 22,913 6.2 Others ​ 134,905 ​ 4.2 ​ 86,805 ​ 3.1 ​ 127,109 ​ 17,903 ​ 4.8 Total 3,205,914 100.0 2,801,768 100.0 2,630,707 370,527 100.0 Note: (1) We started to consolidate the financial results of Shenlanbao since July 4, 2023 and reported the results of Shenlanbao under the Insurance segment.
The following table sets forth the breakdown of our operating revenue, in amounts and as percentages of operating revenue by segment for the years presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 ​ 2023 ​ 2024 ​ RMB (%) RMB (%) RMB US$ (%) ​ ​ (in thousands, except for percentage data) Segment revenue: Insurance (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Brokerage income -Short-term insurance brokerage income 1,628,902 58.1 1,381,855 52.5 1,309,432 179,392 47.2 -Long-term insurance brokerage income 714,426 25.5 823,305 31.3 1,013,406 138,836 36.6 Brokerage income subtotal ​ 2,343,328 ​ 83.6 ​ 2,205,160 ​ 83.8 ​ 2,322,838 ​ 318,228 ​ 83.8 Technical service income 215,832 7.7 ​ 135,755 5.2 ​ 40,939 5,608 ​ 1.5 Insurance total ​ 2,559,160 ​ 91.3 ​ 2,340,915 ​ 89.0 ​ 2,363,777 ​ 323,836 ​ 85.3 Crowdfunding 155,803 ​ 5.6 162,683 ​ 6.2 267,650 ​ 36,668 9.6 Others ​ 86,805 ​ 3.1 ​ 127,109 ​ 4.8 ​ 140,394 ​ 19,234 ​ 5.1 Total 2,801,768 100.0 2,630,707 100.0 2,771,821 379,738 100.0 Note: (1) We started to consolidate the financial results of Shenlanbao since July 4, 2023 and reported the results of Shenlanbao under the Insurance segment.
Interest income Our interest income increased by 66.5% from RMB81.7 million in 2022 to RMB136.0 million (US$19.2 million) in 2023. The increase was mainly due to the increase in interest rate.
Interest income Our interest income increased by 66.5% from RMB81.7 million in 2022 to RMB136.0 million in 2023. The increase was mainly due to the increase in interest rate. Net profit As a result of the foregoing, our net profit for the year of 2023 was RMB163.7 million, compared to RMB607.7 million for the year of 2022.
Net cash used in investing activities in 2021 was RMB846.9 million, consisting primarily of net cash used in purchase of short-term investment products, and cash paid for purchase of property, equipment and software. 123 Table of Contents Financing activities Net cash used in financing activities in 2023 was RMB377.2 million (US$53.1 million), consisting primarily of payment in connection with the share repurchase program, partially offset by the proceeds from short-term loans.
Net cash used in financing activities in 2023 was RMB377.2 million, consisting primarily of payment in connection with the share repurchase program, partially offset by the proceeds from short-term loans.
As of December 31, 2021, 2022 and 2023, our insurance premium payables were RMB685.0 million, RMB516.7 million and RMB592.0 million (US$83.4 million), respectively. 121 Table of Contents Our accrued expenses and other current liabilities represent primarily (i) accrued marketing and selling expenses, (ii) payroll and welfare payable, and (iii) payable related to medical crowdfunding business, which mainly represents the funds we collected through the third-party payment platforms that has not been transferred to custodian bank.
Our accrued expenses and other current liabilities represent primarily (i) accrued marketing and customer service expenses, (ii) payroll and welfare payable, and (iii) payable related to medical crowdfunding business, which mainly represents the funds we collected through the third-party payment platforms that has not been transferred to custodian bank.
In addition to the growth in the FYP per policy, the number of policies per consumer remained relatively stable at 1.7 and 1.6 in 2022 and 2023, respectively.
Overall, the FYP per policy rose from RMB803 in 2023 to RMB1,047 in 2024. In addition to this growth, the number of policies per consumer remained stable at 1.6 in 2023 and 1.5 in 2024.
Our large consumer base and strong business development capabilities allow us to negotiate favorable terms in our business cooperation with insurance carriers. We need to keep the growth of our business, brand influence, value-added technology service capabilities and risk management capabilities so as to strengthen and deepen the cooperation with our existing insurance carriers.
We need to keep the growth of our business, brand influence, value-added technology service capabilities and risk management capabilities so as to strengthen and deepen the cooperation with our existing insurance carriers. Operating efficiency and leverage We have incurred significant costs and expenses in building our platform, growing our consumer base and developing capabilities in data analysis and technology.
Income tax benefit/(expense) Income tax expense in 2022 was RMB23.0 million, compared with income tax benefit of RMB221.0 million in 2021. The difference was primarily due to the net operating profit generated in 2022. 119 Table of Contents Critical Accounting Estimates We prepare our financial statements in accordance with U.S.
Income tax expense Income tax expense in 2023 was RMB0.6 million, compared with RMB23.0 million in 2022. The decrease was primarily due to the decrease of profit before tax. 114 Table of Contents Critical Accounting Estimates We prepare our financial statements in accordance with U.S. GAAP, which requires our management to make judgments, estimates and assumptions.
The aggregate payment will amount to approximately US$15 million. ​ We believe our cash on hand will be sufficient to meet our current and anticipated needs for working capital and capital expenditure requirement for at least the next 12 months.
The payment date is expected to be on or around April 30, 2025 for holders of ordinary shares and on or around May 2, 2025 for holders of ADSs. We believe our cash on hand will be sufficient to meet our current and anticipated needs for working capital and capital expenditure requirement for at least the next 12 months.
The long-term health and life insurance products accounted for 28.8% and 31.3% of the FYP generated through us in 2022 and 2023, respectively. The FYP per policy of long-term health and life insurance products increased from RMB5,004 in 2022 to RMB7,180 in 2023. As a result, the FYP per policy increased from RMB711 in 2022 to RMB803 in 2023.
The acquisition of Shenlanbao in 2023 further enhanced our service capabilities. Long-term health and life insurance products accounted for 31.3% and 30.4% of the FYP generated through our platforms in 2023 and 2024, respectively. The FYP per policy for long-term health and life insurance products increased from RMB7,180 in 2023 to RMB7,969 in 2024.
Cooperation with insurance carriers We cooperate with insurance carriers to offer their standard insurance products or to design and develop tailor-made insurance products, and our relationship with insurance carriers is crucial to our success. As of December 31, 2023, we had established business cooperation with 101 insurance carriers.
Consequently, the FYP per consumer increased from RMB1,324 in 2023 to RMB1,594 in 2024. 106 Table of Contents Cooperation with insurance carriers We cooperate with insurance carriers to offer their standard insurance products or to design and develop tailor-made insurance products, and our relationship with insurance carriers is crucial to our success.
Operating costs and expenses Our total operating costs and expenses increased by RMB313.7 million, or 13.5%, from RMB2,323.8 million in 2022 to RMB2,637.5 million (US$371.5 million) in 2023, which was mainly due to the consolidation of the financial results of Shenlanbao which generated operating costs and expenses of RMB130.7 million.
Operating costs and expenses Our total operating costs and expenses decreased by RMB43.8 million, or 1.7%, from RMB2,637.5 million in 2023 to RMB2,593.7 million (US$355.3 million) in 2024, which was mainly due to the effective cost control measures.
Net cash used in financing activities in 2022 was RMB57.5 million (US$8.3 million), consisting primarily of the payment in connection with the share repurchase program. Net cash provided by financing activities in 2021 was RMB2,119.7 million, consisting primarily of net proceeds from our IPO, partially offset by the payment of share repurchase program.
Financing activities Net cash used in financing activities in 2024 was RMB198.6 million (US$27.2 million), consisting primarily of payment in connection with the share repurchase program, and payment of dividend to shareholders, partially offset by the net proceeds from short-term loans.
We currently organize and report our business in three operating segments: (i) insurance, which mainly includes Waterdrop Insurance Marketplace, Shenlanbao Insurance Marketplace and technical support service; (ii) crowdfunding, which mainly includes Waterdrop Medical Crowdfunding; and (iii) others, which mainly include digital clinical trial solution and other new initiatives.
We currently organize and report our business in the following segments: (i) insurance, which mainly includes Waterdrop Insurance Marketplace, Shenlanbao Insurance Marketplace and technical support service; (ii) crowdfunding, which mainly includes Waterdrop Medical Crowdfunding, and (iii) others, which do not individually or in the aggregate meet the quantitative and qualitative thresholds to be individually reportable and are aggregated.
Net profit As a result of the foregoing, our net profit for the year of 2023 was RMB163.7 million (US$23.1 million), compared to RMB607.7 million for the year of 2022. Income tax expense Income tax expense in 2023 was RMB0.6 million (US$0.1 million), compared with RMB23.0 million in 2022.
Interest income Our interest income increased by 9.6% from RMB136.0 million in 2023 to RMB149.1 million (US$20.4 million) in 2024 due to the increased proportion of long-term debt investments. Net profit As a result of the foregoing, our net profit for the year of 2024 was RMB350.9 million (US$48.1 million), compared to RMB163.7 million for the year of 2023.
We enter into patient recruitment contracts with these customers to match qualified patients with optimal suitability for enrollment in clinical trials. We typically charge a fixed unit price per successful match. Other new initiatives are those early-stage businesses. Revenues generated from the other new initiatives are not material, either individually or in aggregate.
We typically charge a fixed unit price per successful match. Other new initiatives are those early-stage businesses. Revenues generated from the other new initiatives are not material, either individually or in aggregate. For details of the segment information, see Note 12 “Segment Information” to our audited consolidated financial statements included elsewhere in this annual report.
As of December 31, 2021, 2022 and 2023, our contract assets were RMB593.5 million, RMB553.7 million and RMB707.3 million (US$99.6 million), respectively.
As of December 31, 2022, 2023 and 2024, our insurance premium payables were RMB516.7 million, RMB592.0 million and RMB537.3 million (US$73.6 million), respectively.
The platform service fee is charged at a certain percentage of the withdrawal amount for a single crowdfunding campaign, subject to a capped maximum amount for a single crowdfunding campaign. The service fee is payable to us only upon the successful withdrawal of the funds by the patient. 113 Table of Contents Others.
Crowdfunding services primarily consist of providing technical and internet support, managing and reviewing the crowdfunding campaigns, and facilitating the collection and transfer of funds to the patients. The platform service fee is charged at a certain percentage of the withdrawal amount for a single crowdfunding campaign, subject to a capped maximum amount for a single crowdfunding campaign.
Material cash requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our capital expenditures and operating lease commitments. Our capital expenditures primarily represent cash paid for purchase of property, equipment and software. We made capital expenditures of RMB35.7 million, RMB11.9 million and RMB13.5 million (US$1.9 million) in 2021, 2022 and 2023, respectively.
Our capital expenditures primarily represent cash paid for purchase of property, equipment and software. We made capital expenditures of RMB11.9 million, RMB13.5 million and RMB218.4 million (US$29.9 million) in 2022, 2023 and 2024, respectively. The increased expenditures in 2024 were mainly due to the purchase of a commercial real estate property in Beijing for business operations.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Operating revenue, net Our net operating revenue decreased by 12.6% from RMB3,205.9 million for 2021 to RMB2,801.8 million in 2022, which was primarily due to the decrease in net operating revenue from insurance income, partially offset by the increase in net operating revenue from crowdfunding income and other income.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Operating revenue, net Our net operating revenue decreased by 6.1% from RMB2,801.8 million in 2022 to RMB2,630.7 million in 2023, including the revenue generated by Shenlanbao of RMB92.9 million after consolidation.
We pay guarantee deposits required by National Financial Regulatory Administration in order to protect insurance premium appropriation by insurance broker and agency. Furthermore, a guarantee deposit for foreign exchange settlement was paid in 2020 to a commercial bank in order to carry out foreign exchange settlement.
We pay guarantee deposits required by National Financial Regulatory Administration in order to protect insurance premium appropriation by insurance broker and agency. Our accounts receivable represents primarily brokerage commission fee receivable from insurance carriers and technical service fees receivable from insurance carriers.
Our contract assets are recorded for arrangements when we have provided the insurance brokerage services but for which the related commission payments are not yet due. Contract assets represent primarily the brokerage commission fee that is contingent upon the future premium payment of the insurance policy holders and retention-based bonus.
As of December 31, 2022, 2023 and 2024, our accounts receivable was RMB675.8 million, RMB693.1 million and RMB716.2 million (US$98.1 million), respectively. Our contract assets are recorded for arrangements when we have provided the insurance brokerage services but for which the related commission payments are not yet due.
We began to offer long-term health and life insurance products at the end of 2018, and we have been endeavoring to raise consumer awareness, and demonstrate the value and importance of long-term health and life insurance through our interactions with them. The acquisition of Shenlanbao in 2023 also significantly expanded our product offerings and service capabilities.
As a result of increasing product and user diversity, the FYP per policy for short-term health insurance products rose from RMB572 in 2023 to RMB759 in 2024. Since introducing long-term health and life insurance products at the end of 2018, we have actively worked to raise consumer awareness and demonstrate the value of these products through our platform and service.
General and administrative expenses Our general and administrative expenses decreased by 26.7% from RMB530.5 million in 2021 to RMB388.7 million in 2022, which was mainly due to (i) a decrease of RMB109.8 million in share-based compensation expenses, (ii) a RMB21.2 million decrease in personnel cost, both of which were as a result of our cost control measures, and (iii) a decrease of RMB39.0 million impairment loss over prepayment for the year of 2021, and partially offset by an increase of RMB23.5 million allowance for doubtful accounts for the year of 2022.
General and administrative expenses Our general and administrative expenses decreased by 8.6% from RMB402.4 million in 2023 to RMB367.7 million (US$50.4 million) in 2024, which was mainly due to (i) a decrease of RMB32.5 million in the professional service fee, (ii) a decrease of RMB18.3 million in general and administrative personnel costs and share-based compensation expenses, (iii) a decrease of RMB5.9 million in office rental and office administrative expenses, partially offset by (iv) a non-cash impairment of intangible assets related to Shenlanbao of RMB20.6 million recorded in 2024, and (v) an increase of RMB9.6 million in allowance for credit losses.
Sales and marketing expenses Our sales and marketing expenses decreased by 79.9% from RMB3,104.8 million in 2021 to RMB624.5 million in 2022, which was mainly due to (i) RMB2,112.5 million decrease in marketing expenses to third-party traffic channels as part of our cost control measures, and (ii) RMB358.2 million decrease in outsourced sales and marketing service fee to third parties.
Sales and marketing expenses Our sales and marketing expenses decreased by 6.2% from RMB740.5 million in 2023 to RMB694.8 million (US$95.2 million) in 2024, which was primarily due to (i) a decrease of RMB93.1 million in personnel costs and share based compensation costs, partially offset by (ii) an increase of RMB40.6 million in marketing expenses to third-party traffic channel, and (iii) an increase of RMB12.5 million in outsourced sales and marketing service fees to third parties.
For details of the segment information, see Note 12 “Segment Information” to our audited consolidated financial statements included elsewhere in this annual report. Operating costs and expenses Our operating costs and expenses consist of operating costs, sales and marketing expenses, general and administrative expenses, research and development expenses.
Operating costs and expenses Our operating costs and expenses consist of operating costs, sales and marketing expenses, general and administrative expenses, research and development expenses.
First year premium per consumer As the consumers’ awareness for health protection and insurance products in China were still substantially lower than in developed countries, many insurance consumers on our platform start with purchases of short-term products. The FYP per policy of short-term health insurance products generated through us grew from RMB528 in 2022 to RMB572 in 2023.
As of December 31, 2024, we cumulatively offered 1,967 insurance products on Waterdrop Insurance Marketplace, as compared with 1,357 as of December 31, 2023. In China, consumer awareness of health protection and insurance products remains significantly lower than in developed countries, leading many users on our platform to initially purchase short-term products.
The difference between the net loss of RMB1,574.1 million and negative operating cash flow of RMB1,096.7 million was the result of additional cash of RMB191.9 million generated due to changes in working capital accounts, and adding back non-cash expenses items such as share-based compensation expenses of RMB226.2 million, and depreciation of property, equipment and software of RMB17.9 million.
The difference between the net profit of RMB350.9 million (US$48.1 million) and positive operating cash flow of RMB437.3 million was non-cash expenses items such as share-based compensation expense of RMB86.9 million, and depreciation of property, equipment and software of RMB11.4 million, and changes in working capital accounts, which mainly include (i) RMB66.2 million increase in contract assets, (ii) RMB54.6 million decrease in insurance premium payables, and (iii) RMB35.1 million increase in accounts receivable, partially offset by RMB107.9 million increase in accrued expenses and other current liabilities. 117 Table of Contents Specifically, the decrease in insurance premium payables was primarily due to the decrease of turnover days.
Removed
Our insurance consumers come from both internal and external sources. In terms of internal source, our medical crowdfunding operation direct substantial traffic to our insurance marketplace. Historically, our mutual aid operation also directed traffic to our insurance marketplace. Moreover, existing consumers also constituted an internal source of consumers and contributed to our business growth.
Added
Our insurance consumers come from third-party traffic channels, traffic directed from our medical crowdfunding operation, and private domain contacts. In 2024, we moderately increased our investment in third-party traffic channels. In order to enhance overall user retention, we launched “Three Good Service” Initiative program to improve user satisfaction.
Removed
Specifically, the repeat purchase of a short-term insurance product by a returning consumer after his or her existing short-term policy expires or a new purchase of another insurance product with additional or different coverage by a returning consumer also contributed to FYP growth.
Added
As of December 31, 2023 and 2024, the cumulative number of paying insurance consumers was approximately 32.3 million and 33.6 million, respectively. First year premium per consumer We believe that consumers choose our platform and repeat their purchases on our platform mainly because of the abundant product offerings, the convenience of online platform and the professional service of our team.
Removed
In addition, we have leveraged major live-streaming and short-video platforms to distribute our in-depth video contents to acquire consumers, and are exploring a 1-on-1 consumer service model to further diversify our internal source.
Added
As we serve a growing number of consumers, we gain valuable insights that allow us to work with insurers to co-create more appealing products. We are at the forefront of developing innovative solutions tailored for specific users, including those with pre-existing medical conditions who may struggle to qualify for traditional health insurance.
Removed
We see the internal source of traffic as an important user acquisition resource to us, and in addition we consider this cohort of users with stronger awareness of insurance protection and stronger interest in the content and product offerings on our platforms, and more loyal to our services.
Added
As of December 31, 2024, we had established business cooperation with 102 insurance carriers. Our large consumer base and strong business development capabilities allow us to negotiate favorable terms in our business cooperation with insurance carriers.
Removed
In 2021, 2022 and 2023, this cohort of consumers contributed approximately 50.4%, 95.2% and 84.5% of the FYP generated through our insurance business, respectively. In order to continually diversify our consumer acquisition channels, we have also cooperated with other third-party traffic channels to grow our insurance consumer base.
Added
Operating segments are aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate and their management and reporting structure.
Removed
Since the second half of 2021, we have taken proactive measures to upgrade and optimize the online consumer acquisition model to better comply with the new regulatory development and keep up with the evolving industry trends. We ceased to offer products with lower payment in the first month and invested more resources in engaging and retaining existing consumers.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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The plan administrator determines the exercise price for each award, which is stated in the award agreement. Term of the Awards. Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant.
The plan administrator determines the exercise price for each award, which is stated in the award agreement. Term of the Awards. Options that are vested and exercisable will terminate if they are not exercised prior to the time as the plan administrator determines at the time of grant.
Shen acts as the sole director of Neptune Max Holdings Limited, and possesses the sole voting power over the shares held by Neptune Max Holdings Limited; and (ii) 4,000 Class A ordinary shares directly held by First Principles Z Holdings Limited, a British Virgin Islands company. Mr. Shen acts as the sole director of First Principles Z Holdings Limited.
Shen acts as the sole director of Neptune Max Holdings Limited, and possesses the sole voting power over the shares held by Neptune Max Holdings Limited; and (ii) 4,000 Class A ordinary shares directly held by First Principles Z Holdings Limited, a British Virgin Islands company. Mr.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 132 Table of Contents Compensation Committee.
The audit committee is responsible for, among other things: · appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; · reviewing with the independent auditors any audit problems or difficulties and management’s response; · discussing the annual audited financial statements with management and the independent auditors; · reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; · reviewing and approving all proposed related party transactions; · meeting separately and periodically with management and the independent auditors; and · monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. 126 Table of Contents Compensation Committee.
Ltd. is an investment entity indirectly wholly owned by Swiss Re Ltd, a company limited by shares with its registered office in Zurich, Switzerland, with its shares listed on the SIX Swiss Exchange and trading under the symbol “SREN.” To our knowledge and with reference to the addresses in our shareholder register, as of March 31, 2024, none of our ordinary shares are held by record holders in the United States.
Ltd. is an investment entity indirectly wholly owned by Swiss Re Ltd, a company limited by shares with its registered office in Zurich, Switzerland, with its shares listed on the SIX Swiss Exchange and trading under the symbol “SREN.” To our knowledge and with reference to the addresses in our shareholder register, as of March 31, 2025, none of our ordinary shares are held by record holders in the United States.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; 133 Table of Contents ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
The functions and powers of our board of directors include, among others: · convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; · declaring dividends and distributions; · appointing officers and determining the term of office of the officers; 127 Table of Contents · exercising the borrowing powers of our company and mortgaging the property of our company; and · approving the transfer of shares in our company, including the registration of such shares in our share register.
(NASDAQ: BIDU and HKEX: 9888), where he was responsible for the backend development in Baidu’s system security department. Prior to that, Mr. Zhou worked at Tencent (HKEX: 00700) from July 2008 to October 2012. Mr. Zhou received a PhD in communication and information systems from University of Science and Technology of China. Ms.
(NASDAQ: BIDU and HKEX: 09888), where he was responsible for the backend development in Baidu’s system security department. Prior to that, Mr. Zhou worked at Tencent (HKEX: 00700) from July 2008 to October 2012. Mr. Zhou received a PhD in communication and information systems from University of Science and Technology of China. Ms.
Yu has also served as a director of DouYu International Holdings Ltd (Nasdaq: DOYU) since May 2018 and a director of Kanzhun Ltd (NASDAQ: BZ; HKSE: 2076) since July 2019. Mr. Yu currently serves as the vice general manager of Tencent Investment. Prior to joining Tencent (HKSE: 00700) in August 2011, Mr.
Yu has also served as a director of DouYu International Holdings Ltd (Nasdaq: DOYU) since May 2018 and a director of Kanzhun Ltd (NASDAQ: BZ; HKSE: 02076) since July 2019. Mr. Yu currently serves as the vice general manager of Tencent Investment. Prior to joining Tencent (HKSE: 00700) in August 2011, Mr.
Before joining us, he worked as senior strategy analyst at Meituan Waimai, the food and grocery delivery business of Meituan (HKSE: 3690), from July 2015 to June 2016, where he was responsible for strategy and business analysis.
Before joining us, he worked as senior strategy analyst at Meituan Waimai, the food and grocery delivery business of Meituan (HKSE: 03690), from July 2015 to June 2016, where he was responsible for strategy and business analysis.
There may be beneficial owners of our ADSs in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F. Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 136 Table of Contents
There may be beneficial owners of our ADSs in the United States. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. F. Disclosure of Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
Xiaoying Xu has served as the head of the finance since December 2022. Prior to joining us, Ms. Xu worked at Meituan (HKSE: 3690) from January 2011 to December 2022.
Xiaoying Xu has served as the head of the finance since December 2022. Prior to joining us, Ms. Xu worked at Meituan (HKSE: 03690) from January 2011 to December 2022.
She received a bachelor of arts degree and a bachelor of laws degree from Xiamen University in 2008. 127 Table of Contents Mr. Xiaobo Zhou has served as the head of research and development since October 2020 and is responsible for the operation of research and development department. Prior to joining Waterdrop, Mr.
She received a bachelor of arts degree and a bachelor of laws degree from Xiamen University in 2008. Mr. Xiaobo Zhou has served as the head of research and development since October 2020 and is responsible for the operation of research and development department. Prior to joining Waterdrop, Mr.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of March 31, 2024 by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total issued and outstanding shares.
Share Ownership Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares on an as-converted basis as of March 31, 2025 by: 128 Table of Contents · each of our directors and executive officers; and · each of our principal shareholders who beneficially own more than 5% of our total issued and outstanding shares.
Ltd. (5) 206,362,384 — 206,362,384 5.6 2.0 Notes: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of March 31, 2024. ** Except as indicated otherwise below, the business address of our directors and executive officers is Block C, Wangjing Science and Technology Park, No. 2 Lize Zhonger Road, Chaoyang District, Beijing, China.
Ltd. (5) 206,362,384 — 206,362,384 5.7 2.1 Notes: * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of March 31, 2025. ** Except as indicated otherwise below, the business address of our directors and executive officers is Block C, Wangjing Science and Technology Park, No. 2 Lize Zhonger Road, Chaoyang District, Beijing, China.
Our audit committee consists of Heping Feng, Chenyang Wei and Ning Zhu. Heping Feng is the chairman of our audit committee. We have determined that Heping Feng, Chenyang Wei and Ning Zhu satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange and Rule 10A-3 under the Exchange Act.
Our audit committee consists of Heping Feng, Chenyang Wei and Chen Lin. Heping Feng is the chairman of our audit committee. We have determined that Heping Feng, Chenyang Wei and Chen Lin satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange and Rule 10A-3 under the Exchange Act.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. D. Employees We had 2,936, 2,719 and 2,960 full-time employees as of December 31, 2021, 2022 and 2023, respectively. Substantially all of our full-time employees are located in China.
Our officers are appointed by and serve at the discretion of the board of directors, and may be removed by our board of directors. D. Employees We had 2,719, 2,960 and 3,057 full-time employees as of December 31, 2022, 2023 and 2024, respectively. Substantially all of our full-time employees are located in China.
Working together, our employees build our corporate culture that cares for individuals, fosters innovation, pursues credibility and integrity, and embraces changes, and has significantly contributed to our achievements. 134 Table of Contents E.
Working together, our employees build our corporate culture that cares for individuals, fosters innovation, pursues credibility and integrity, and embraces changes, and has significantly contributed to our achievements. E.
Specifically, each executive officer has agreed not to (i) solicit from any customer doing business with us during the effective term of the employment agreement business of the same or of a similar nature to our business; (ii) solicit from any of our known potential customer business of the same or of a similar nature to that which has been the subject of our known written or oral bid, offer or proposal, or of substantial preparation with a view to making such a bid, proposal or offer; (iii) solicit the employment or services of, or hire or engage, any person who is known to be employed or engaged by us; or (iv) otherwise interfere with our business or accounts, including, but not limited to, with respect to any relationship or agreement between any vendor or supplier and us. 128 Table of Contents We have also entered into indemnification agreements with each of our directors and executive officers.
Specifically, each executive officer has agreed not to (i) solicit from any customer doing business with us during the effective term of the employment agreement business of the same or of a similar nature to our business; (ii) solicit from any of our known potential customer business of the same or of a similar nature to that which has been the subject of our known written or oral bid, offer or proposal, or of substantial preparation with a view to making such a bid, proposal or offer; (iii) solicit the employment or services of, or hire or engage, any person who is known to be employed or engaged by us; or (iv) otherwise interfere with our business or accounts, including, but not limited to, with respect to any relationship or agreement between any vendor or supplier and us.
Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
We have also entered into indemnification agreements with each of our directors and executive officers. Under these agreements, we agree to indemnify our directors and executive officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director or officer of our company.
However, the maximum exercisable term is ten years from the date of a grant. Transfer Restrictions.
However, the maximum exercisable term is ten years from the date of a grant. 124 Table of Contents Transfer Restrictions.
Guan had eight years of experience in investment banking and served at Macquarie, UBS and Jefferies. Ms. Guan received a master’s degree in Engineering with first class honors from the University of Oxford and is a CFA charterholder. 126 Table of Contents Mr. Heping Feng has served as our independent director since May 2021. Mr.
Prior to joining Swiss Re in May 2016, Ms. Guan had eight years of experience in investment banking and served at Macquarie, UBS and Jefferies. Ms. Guan received a master’s degree in Engineering with first class honors from the University of Oxford and is a CFA charterholder. Mr. Heping Feng has served as our independent director since May 2021. Mr.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ ​ Total Ordinary ​ % of Total ​ ​ ​ ​ Class A ​ Class B ​ Shares on ​ Ordinary ​ ​ ​ ​ Ordinary ​ Ordinary ​ an As-converted ​ Shares on an As- ​ % of Aggregate ​ Shares Shares Basis converted Basis Voting Power Directors and Executive Officers**: Peng Shen (1) 4,000 801,904,979 801,908,979 21.7 71.4 Guang Yang (2) 86,386,000 — 86,386,000 2.3 0.9 Wei Ran * — * * * Haiyang Yu — — — — — Kai Huang — — — — — Wenjie Guan — — — — — Heping Feng * — * * — Chenyang Wei * — * * — Ning Zhu * — * * — Xiaoying Xu ​ * ​ — ​ * ​ * ​ * Xiaolei Sun * — * * * Xiaobo Zhou * — * * * Nian Liu * — * * * All Directors and Executive Officers as a Group 107,951,050 801,904,979 909,856,029 24.7 72.5 Principal Shareholders: ​ ​ ​ ​ Neptune Max Holdings Limited (1) — 801,904,979 801,904,979 21.7 71.4 Entities affiliated with Tencent (3) 830,085,007 — 830,085,007 22.5 8.2 Investment funds affiliated with Boyu Capital (4) 470,735,258 — 470,735,258 12.8 4.7 Swiss Re Principal Investments Company Asia Pte.
These shares, however, are not included in the computation of the percentage ownership of any other person. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary Shares Beneficially Owned ​ ​ ​ ​ ​ ​ Total Ordinary ​ % of Total ​ ​ ​ ​ Class A ​ Class B ​ Shares on ​ Ordinary ​ ​ ​ ​ Ordinary ​ Ordinary ​ an As-converted ​ Shares on an As- ​ % of Aggregate ​ Shares Shares Basis converted Basis Voting Power Directors and Executive Officers**: Peng Shen (1) ​ 4,000 801,904,979 801,908,979 22.2 71.9 Guang Yang (2) ​ 86,386,000 — 86,386,000 2.4 0.9 Wei Ran ​ * — * * * Haiyang Yu ​ — — — — — Kai Huang ​ — — — — — Wenjie Guan ​ — — — — — Heping Feng ​ * — * * — Chenyang Wei ​ * — * * — Chen Lin ​ * — * * — Xiaoying Xu ​ * ​ — ​ * ​ * ​ * Xiaolei Sun ​ * — * * * Xiaobo Zhou ​ * — * * * Nian Liu ​ * — * * * All Directors and Executive Officers as a Group 112,817,450 801,904,979 914,722,429 25.3 73.1 Principal Shareholders: ​ ​ ​ ​ ​ Neptune Max Holdings Limited (1) ​ — 801,904,979 801,904,979 22.2 71.9 Entities affiliated with Tencent (3) ​ 830,085,007 — 830,085,007 23.0 8.3 Investment funds affiliated with Boyu Capital (4) ​ 470,735,258 — 470,735,258 13.0 4.7 Swiss Re Principal Investments Company Asia Pte.
The following paragraphs summarize the principal terms of the 2018 Plan. Type of Awards. The 2018 Plan permits the awards of options, restricted shares, restricted share units or any other types of awards approved by the plan administrator or the board of directors. Plan Administration. A committee appointed by the board of directors administers the 2018 Plan.
The following paragraphs summarize the principal terms of the 2018 Plan. Type of Awards. The 2018 Plan permits the awards of options, restricted shares, restricted share units or any other types of awards approved by the plan administrator or the board of directors. 123 Table of Contents Plan Administration.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors. ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Peng Shen 36 Chairman of the Board of Directors and Chief Executive Officer Guang Yang 38 Director, Vice President of Finance and General Manager of International Business Wei Ran 37 Director and General Manager of Insurance Technology Business Haiyang Yu 41 Director Kai Huang 37 Director Wenjie Guan 39 Director Heping Feng 64 Independent Director Chenyang Wei 51 Independent Director Ning Zhu 50 Independent Director Xiaoying Xu ​ 44 ​ Head of Finance Xiaolei Sun 37 Vice President of Human Resources and Organization Development Xiaobo Zhou ​ 43 Head of Research and Development Nian Liu 36 Head of Legal ​ 125 Table of Contents Mr.
Directors and Senior Management The following table sets forth information regarding our executive officers and directors. ​ ​ ​ ​ ​ Directors and Executive Officers Age Position/Title Peng Shen 37 Chairman of the Board of Directors and Chief Executive Officer Guang Yang 39 Director, Vice President of Finance and General Manager of International Business Wei Ran 38 Director and General Manager of Insurance Technology Business Haiyang Yu 42 Director Kai Huang 38 Director Wenjie Guan 40 Director Heping Feng 65 Independent Director Chenyang Wei 52 Independent Director Chen Lin 47 Independent Director Xiaoying Xu 45 Head of Finance Xiaolei Sun ​ 38 ​ Vice President of Human Resources and Organization Development Xiaobo Zhou 44 Head of Research and Development Nian Liu 37 Head of Legal ​ Mr.
Yang served as a senior manager at CEC Capital Group and served as a senior consultant of the merger and acquisition transaction service team at Deloitte Touche Tohmatsu Limited. Mr. Yang received an honors degree in actuarial science specializing in finance from the University of Waterloo. Mr.
Yang served as a senior manager at China eCapital Partners and served as a senior consultant of the merger and acquisition transaction service team at Deloitte Touche Tohmatsu Limited. Mr. Yang received an honors degree in actuarial science specializing in finance from the University of Waterloo. 120 Table of Contents Mr.
The registered address of Neptune Max Holdings Limited and First Principles Z Holdings Limited is Sertus Chambers, P.O. Box 905, Quastisky Building, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
Shen acts as the sole director of First Principles Z Holdings Limited. 129 Table of Contents The registered address of Neptune Max Holdings Limited and First Principles Z Holdings Limited is Sertus Chambers, P.O. Box 905, Quastisky Building, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
The calculations in the table below are based on 2,887,499,581 Class A ordinary shares (excluding 394,756,940 Class A ordinary shares, comprising of Class A ordinary shares issued to the depositary for bulk issuance of ADSs and reserved for future issuances upon the exercise or vesting of awards granted under share incentive plans, and Class A ordinary shares in the form of ADSs held in treasury) and 801,904,979 Class B ordinary shares, issued and outstanding as of March 31, 2024.
The calculations in the table below are based on 2,814,720,121 Class A ordinary shares (excluding 467,536,400 Class A ordinary shares, comprising of Class A ordinary shares issued to the depositary for bulk issuance of ADSs and reserved for future issuances upon the exercise or vesting of awards granted under share incentive plans, and Class A ordinary shares in the form of ADSs held in treasury) and 801,904,979 Class B ordinary shares, issued and outstanding as of March 31, 2025.
Compensation Compensation of Directors and Executive Officers In 2023, we paid an aggregate of RMB2.9 million (US$0.4 million) in cash to our executive officers, and we paid cash compensation to our non-executive directors of RMB0.9 million (US$0.1 million).
Compensation Compensation of Directors and Executive Officers In 2024, we paid an aggregate of RMB4.7 million (US$0.6 million) in cash to our executive officers, and we paid cash compensation to our non-executive directors of RMB0.9 million (US$0.1 million).
However, no such action may adversely affect in any material way any awards previously granted without the written consent of the participant. 130 Table of Contents The following table summarizes, as of March 31, 2024, the number of ordinary shares underlying outstanding options that we granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Options and ​ ​ ​ ​ ​ ​ ​ ​ Restricted ​ Exercise Price ​ ​ ​ ​ Name ​ Share Units ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Wei Ran ​ * 0.003 September 1, 2018 September 1, 2028 ​ ​ * 0.08 March 25, 2021 March 25, 2031 ​ ​ * (1) N/A October 1, 2022 — ​ ​ * (1) N/A January 1, 2023 — ​ ​ * (1) N/A June 25, 2023 — Heping Feng ​ * 0.08 June 25, 2021 June 25, 2031 ​ ​ * (1) N/A June 25, 2023 — Chenyang Wei ​ * 0.08 June 25, 2021 June 25, 2031 ​ ​ * (1) N/A June 25, 2023 — Xiaoying Xu ​ * (1) N/A March 25, 2023 — Xiaolei Sun ​ * 0.003 December 1, 2019 December 1, 2029 ​ ​ * 0.003 October 31, 2020 October 31, 2030 ​ ​ * 0.08 March 25, 2021 March 25, 2031 ​ ​ * (1) N/A October 1, 2022 — ​ ​ * (1) N/A January 1, 2023 — ​ ​ * (1) N/A June 25, 2023 — Xiaobo Zhou ​ * 0.08 March 25, 2021 March 25, 2031 ​ ​ * (1) ​ N/A ​ March 25, 2022 ​ — ​ ​ * (1) ​ N/A ​ October 1, 2022 ​ — ​ ​ * (1) ​ N/A ​ December 25, 2023 ​ — Nian Liu ​ * ​ 0.08 ​ March 25, 2021 ​ March 25, 2031 ​ ​ * (1) ​ N/A ​ October 1, 2022 ​ — ​ ​ * (1) ​ N/A ​ March 25, 2023 ​ — All directors and executive officers as a group ​ 26,996,750 ​ ​ ​ ​ ​ ​ Note * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of March 31, 2024.
The following table summarizes, as of March 31, 2025, the number of ordinary shares underlying outstanding options that we granted to our directors and executive officers. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ordinary ​ ​ ​ ​ ​ Shares ​ ​ ​ ​ ​ ​ ​ ​ Underlying ​ ​ ​ ​ ​ ​ ​ ​ Options and ​ ​ ​ ​ ​ ​ ​ ​ Restricted ​ Exercise Price ​ ​ ​ ​ Name ​ Share Units ​ (US$/Share) ​ Date of Grant ​ Date of Expiration Wei Ran ​ * 0.003 September 1, 2018 September 1, 2028 ​ ​ * 0.08 March 25, 2021 March 25, 2031 ​ ​ * (1) N/A October 1, 2022 — ​ ​ * (1) N/A January 1, 2023 — ​ ​ * (1) N/A June 25, 2023 — ​ ​ * (1) N/A April 1, 2024 — ​ ​ * (1) N/A March 1, 2025 — Heping Feng ​ * 0.08 June 25, 2021 June 25, 2031 ​ ​ * (1) N/A June 25, 2023 — Chenyang Wei ​ * 0.08 June 25, 2021 June 25, 2031 ​ ​ * (1) N/A June 25, 2023 — Chen Lin ​ * (1) N/A March 25, 2025 — Xiaoying Xu ​ * (1) N/A March 25, 2023 — ​ ​ * (1) N/A April 1, 2024 — ​ ​ * (1) N/A March 1, 2025 — Xiaolei Sun ​ * 0.003 December 1, 2019 December 1, 2029 ​ ​ * 0.003 October 31, 2020 October 31, 2030 ​ ​ * ​ 0.08 ​ March 25, 2021 ​ March 25, 2031 ​ ​ * (1) ​ N/A ​ October 1, 2022 ​ — ​ ​ * (1) ​ N/A ​ January 1, 2023 ​ — ​ ​ * (1) ​ N/A ​ June 25, 2023 ​ — ​ ​ * (1) ​ N/A ​ April 1, 2024 ​ — ​ ​ * (1) ​ N/A ​ March 1, 2025 ​ — Xiaobo Zhou ​ * ​ 0.08 ​ March 25, 2021 ​ March 25, 2031 ​ ​ * (1) ​ N/A ​ March 25, 2022 ​ — ​ ​ * (1) ​ N/A ​ October 1, 2022 ​ — ​ ​ * (1) ​ N/A ​ December 25, 2023 ​ — Nian Liu ​ * ​ 0.08 ​ March 25, 2021 ​ March 25, 2031 ​ ​ * (1) ​ N/A ​ October 1, 2022 ​ — ​ ​ * (1) ​ N/A ​ March 25, 2023 ​ — ​ ​ * (1) ​ N/A ​ April 1, 2024 ​ — ​ ​ * (1) ​ N/A ​ March 1, 2025 ​ — All directors and executive officers as a group ​ 37,149,130 ​ ​ ​ ​ ​ ​ Note * Less than 1% of our total ordinary shares on an as-converted basis outstanding as of March 31, 2025.
The committee or the full board of directors, as applicable, determines the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award. Award Agreement.
Our board of directors or a committee of one or more members of the board of directors will administer the 2021 Plan. The committee or the full board of directors, as applicable, determines the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award. Award Agreement.
The following table sets forth the number of our full-time employees as of December 31, 2023: ​ ​ ​ ​ ​ Number of Function Employees Operating 1,609 Sales and marketing 712 General and administrative 321 Research and development 318 Total 2,960 ​ Our success depends on our ability to attract, motivate, train and retain qualified personnel.
The following table sets forth the number of our full-time employees as of December 31, 2024: ​ ​ ​ ​ ​ Number of Function Employees Operating 1,803 Sales and marketing 626 General and administrative 299 Research and development 329 Total 3,057 ​ Our success depends on our ability to attract, motivate, train and retain qualified personnel.
The plan administrator determines the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award. Award Agreement.
A committee appointed by the board of directors administers the 2018 Plan. The plan administrator determines the participants to receive awards, the type and number of awards to be granted to each participant, and the terms and conditions of each award. Award Agreement.
The maximum aggregate number of Class A ordinary shares that may be issued under the 2018 Plan is 384,159,746 Class A ordinary shares. As of March 31, 2024, options to purchase a total of 98,832,690 Class A ordinary shares and 83,688,950 restricted share units were outstanding under the 2018 Plan.
The maximum aggregate number of Class A ordinary shares that may be issued under the 2018 Plan is 384,159,746 Class A ordinary shares. As of March 31, 2025, options to purchase a total of 80,449,790 Class A ordinary shares and 69,739,960 restricted share units were outstanding under the 2018 Plan.
Wei received a bachelor’s degree in finance from Tsinghua University in 1996, a master’s degree in economics from McCombs School of Business, University of Texas at Austin in 2000, and a Ph.D. in finance from Leonard N. Stern School of Business, New York University in 2006. Mr. Ning Zhu has served as our independent director since May 2022. Mr.
Wei received a bachelor’s degree in finance from Tsinghua University in 1996, a master’s degree in economics from McCombs School of Business, University of Texas at Austin in 2000, and a Ph.D. in finance from Leonard N. Stern School of Business, New York University in 2006. 121 Table of Contents Mr.
(1) Represents restricted share units. As of March 31, 2024, our employees other than our directors and officers as a group held options to purchase 121,320,290 Class A ordinary shares, with exercise prices ranging from US$0.03 per share to US$0.08 per share, and 46,898,370 restricted share units. ​ 131 Table of Contents C.
(1) Represents restricted share units. 125 Table of Contents As of March 31, 2025, our employees other than our directors and officers as a group held options to purchase 56,822,820 Class A ordinary shares, with exercise prices ranging from US$0.003 per share to US$0.08 per share, and 80,557,310 restricted share units. C.
Peng Shen is our founder, and has served as the chairman of our board of directors and chief executive officer since our inception, and is responsible for the overall strategy and business operations of Waterdrop. Mr. Shen has extensive experience and expertise in the technology and internet sectors in China. Prior to founding Waterdrop in 2016, in January 2010, Mr.
Peng Shen is our founder and has served as the chairman of our board of directors and chief executive officer since our inception, and is responsible for overseeing the overall strategy and business operations of Waterdrop. Prior to founding Waterdrop in 2016, Mr. Shen joined Meituan (HKSE: 03690) in January 2010 as one of its earliest management members.
Liu worked at Davis Polk & Wardwell LLP from August 2009 to June 2012 and from October 2013 to January 2017 and at Wilson Sonsini Goodrich & Rosati from February 2017 to July 2017. Ms. Liu obtained her bachelor’s degree of law from Tsinghua University in July 2009 and master’s degree of law from Harvard University in May 2013. B.
Liu worked at Davis Polk & Wardwell LLP from August 2009 to June 2012 and from October 2013 to January 2017 and at Wilson Sonsini Goodrich & Rosati from February 2017 to July 2017. Ms.
Ning Zhu is Room 606, 211 west Huahai Road, Shanghai, China. 135 Table of Contents † For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
Chen Lin is The University of Hong Kong, Hong Kong. † For each person or group included in this column, percentage of total voting power represents voting power based on both Class A and Class B ordinary shares held by such person or group with respect to all outstanding shares of our Class A and Class B ordinary shares as a single class.
In honor of his contributions to China’s insurtech industry, innovative pharmaceutical CRO industry and other fields, as well as the establishment and operation of Waterdrop, Mr.
In honor of Waterdrop’s contributions to China’s insurtech industry, innovative pharmaceutical CRO industry and other fields, Mr.
From June 2011 to August 2012, Mr. Wei was a senior economist with Federal Reserve Bank of Philadelphia. From 2006 to 2011, Mr. Wei was an economist with Federal Reserve Bank of New York. Mr.
From June 2011 to August 2012, Mr. Wei was a senior economist with Federal Reserve Bank of Philadelphia. From 2006 to 2011, Mr. Wei was an economist with Federal Reserve Bank of New York. Mr. Wei is also an independent director of PICC Property and Casualty Company Limited (HKSE: 02328) and HSBC Life Insurance Company Limited. Mr.
Unless terminated earlier, the 2021 Plan has a term of ten years from its date of effectiveness. Our board of directors has the authority to amend or terminate the plan.
Unless terminated earlier, the 2021 Plan has a term of ten years from its date of effectiveness. Our board of directors has the authority to amend or terminate the plan. However, no such action may adversely affect in any material way any awards previously granted without the written consent of the participant.
Shen participated in the entrepreneurship of Meituan Waimai from scratch since July 2013, where he was responsible for internet R&D, formulating operational rules, and establishing and managing the business system, helping Meituan Waimai develop into one of the most popular apps in China.
From July 2013 to April 2016, he was one of the founding team members of Meituan Waimai, where he was responsible for the early design of internet R&D, formulating operational rules, and establishing and managing the business system, helping Meituan Waimai develop into a leading on-demand delivery service application in China.
Mr. Shen received a master’s degree in retail management from NEOMA Business School in France, an EMBA from Tsinghua University School of Economics and Management, and a PhD in Hotel and Tourism Management from The Hong Kong Polytechnic University. Mr.
Shen received an EMBA from Tsinghua University School of Economics and Management, a PhD in Hotel and Tourism Management from Hong Kong Polytechnic University, and the Graduation Certificate of the First Cohort of the Tsinghua-Tencent Future-Tech Entrepreneur Program, jointly organized by Tsinghua University and Tencent. Mr.
Shen was awarded Zhongguancun High-end Leading Entrepreneurial Talent Certificate by Beijing Municipal Science and Technology Commission in 2019, named to Fortune China’s list of the “2020 40 under 40 in China” and World Economic Forum’s list of “2022 Young Global Leaders,” and awarded “Beijing Model-Rural Revitalization, Support and Cooperation Pioneer” by Beijing Municipal Government. Currently, Mr.
Shen was awarded the Zhongguancun High-end Leading Entrepreneurial Talent Certificate by the Beijing Municipal Science and Technology Commission in 2019, named to Fortune China’s “2021 40 Under 40 in China”, the World Economic Forum’s “2022 Young Global Leaders”, and Forbes China’s 2024 “New Era Influential Founders”, and received the “2024 Outstanding Alumni Award” from Hong Kong Polytechnic University. Mr.
Guan currently serves as Head of Principal Investments and Acquisitions North Asia at Swiss Re, one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, and a non-executive director of Alltrust Insurance Company. Prior to joining Swiss Re in May 2016, Ms.
Huang received a bachelor’s degree in accounting from Shanghai Jiao Tong University. Ms. Wenjie Guan has served as our director since September 2022. Ms. Guan currently serves as Head of Corporate Development APAC at Swiss Re, one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, and a non-executive director of Alltrust Insurance Company.
The 2021 Plan permits the awards of options, restricted shares, restricted share units or any other type of awards approved by the plan administrator or the board of directors. Plan Administration. Our board of directors or a committee of one or more members of the board of directors will administer the 2021 Plan.
As of March 31, 2025, 53,462,030 restricted share units were outstanding under the 2021 Plan. The following paragraphs summarize the principal terms of the 2021 Plan. Types of Awards. The 2021 Plan permits the awards of options, restricted shares, restricted share units or any other type of awards approved by the plan administrator or the board of directors. Plan Administration.
Shen is also the Vice President of Beijing Chaoyang District High-tech Enterprise Association, a member of the School Affairs Council of HKU Business School, a member of the Standing Committee of the Beijing Federation of Industry and Commerce, a deputy director of the Overseas Scholars and Overseas Chinese Sector of the Beijing Youth Federation, and Vice President of Alumni Association of Zhejiang University-Hong Kong Polytechnic University Joint Center.
Shen currently serves as Vice President of the Hong Kong New Quality Entrepreneurs Association, Vice President of the Beijing Young Entrepreneurs Association, Vice President of the Beijing Chaoyang District High-tech Enterprise Association, Vice President of the Alumni Association of the Zhejiang University-Hong Kong Polytechnic University Joint Center, the Industry Mentor at the School of Finance, Central University of Finance and Economics, and the Industry Mentor at Institute of Future Technology, Peking University.
Removed
Shen joined Meituan (HKSE: 03690), a leading e-commerce platform in China, at its early stage, as one of its earliest management members. He was also one of the founding team members of Meituan Waimai, which provides food delivery services. Mr.
Added
Since October 2023, Mr. Shen has also served as an Independent Non-Executive Director of J&T Express (HKSE: 01519). Mr.
Removed
Huang received a bachelor’s degree in accounting from Shanghai Jiao Tong University. Ms. Wenjie Guan has served as our director since September 2022. Ms.
Added
Chen Lin has served as our independent director since March 2025. Mr. Lin has served at various positions at The University of Hong Kong, including as the Chair of Finance and Stelux Professor in Finance since August 2013, and Associate Vice President since January 2023. In addition, Mr.
Removed
Wei is also an independent director of PICC Property and Casualty Company Limited (HKSE: 2328), HSBC Life Insurance Company Limited, and QuantaSing Group Ltd (NASDAQ: QSG). Mr.
Added
Lin has served as an independent non-executive director for several companies, including Artificial Intelligent Interconnection Technology Co., Ltd. since December 2024, Beijing 51WORLD Digital Twin Technology Co., Ltd. since September 2024, Shiyue Daotian Group Co., Limited (HKEX: 09676) since October 2023, Allianz Global Investors Fund Management Co., Ltd. since September 2023, CNCB (Hong Kong) Investment Limited since January 2022, and China Merchants Land Asset Management Co., Limited (the manager of China Merchants Commercial REIT (HKEX: 01503)) since December 2019.
Removed
Zhu has been a senior partner and Head of China of Brunswick Group since September 2022. He has also been a professor of finance and the deputy dean of Shanghai Advanced Institute of Finance of Shanghai Jiaotong University since July 2010. Prior to that, Mr.
Added
Lin is a non-official member of the Task Force on Promoting Web3 Development of the Government of Hong Kong since July 2023, a Fellow of the Academy of Social Sciences, UK since March 2023, a Member of the Academia Europaea since June 2022, a member of the Hang Seng Index Advisory Committee since August 2021, a member of the Fintech Advisory Group of the Securities and Futures Commission since March 2021 and an advisory member of the Hong Kong Institute for Monetary and Financial Research of the Hong Kong Monetary Authority since June 2019.
Removed
Zhu was a tenured professor of finance at University of California (Davis) from 2003 to June 2010. Mr. Zhu is also an independent non-executive director of each of China Huarong Asset Management Co., Ltd. (HKEX: 2799) and CHINA BOHAI BANK CO., LTD. (HKEX: 9668), and an independent director of each of Molecular Data Inc.
Added
Mr. Lin also served as a member of the Currency Board Sub-Committee of the Exchange Fund Advisory Committee of Hong Kong from January 2017 to December 2022. Mr.
Removed
(Nasdaq: MKD), Jinke Property Group Co., Ltd. (SZSE: 000656) and China CITIC Bank International Limited. Mr. Zhu received his bachelor’s degree in international finance from Peking University in 1997, master’s degree in management from Cornell University in 1999, and doctorate degree in finance from Yale University in 2003. Ms.
Added
Lin obtained his PhD degree in economics in August 2006, master of arts degree in economics in August 2005 and master of business administration degree (MBA) in May 2004 from University of Florida in the United States. He received his bachelor’s degree in engineering from South China University of Technology in July 2000. Ms.
Removed
As of March 31, 2024, 6,606,040 restricted share units were outstanding under the 2021 Plan. 129 Table of Contents The following paragraphs summarize the principal terms of the 2021 Plan. Types of Awards.
Added
Liu obtained her bachelor’s degree of law from Tsinghua University in July 2009 and master’s degree of law from Harvard University in May 2013. 122 Table of Contents B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

8 edited+0 added−0 removed11 unchanged
Form F-3 Registration Rights. Our shareholders may request us in writing to file an unlimited number of registration statements on Form F-3 if we qualify for registration on Form F-3.
Our shareholders may request us in writing to file an unlimited number of registration statements on Form F-3 if we qualify for registration on Form F-3.
The special rights other than registration rights, as well as the corporate governance provisions, automatically terminated upon the completion of our IPO. Registration Rights We have granted certain registration rights to our shareholders. Set forth below is a description of the registration rights granted under the shareholders agreement. ​ 137 Table of Contents Demand Registration Rights.
The special rights other than registration rights, as well as the corporate governance provisions, automatically terminated upon the completion of our IPO. Registration Rights We have granted certain registration rights to our shareholders. Set forth below is a description of the registration rights granted under the shareholders agreement. Demand Registration Rights.
If the managing underwriters of any underwritten offering determine that marketing factors require a limitation of the number of shares to be underwritten, and the number of shares that may be included in the registration and the underwriting shall be allocated (i) first, to us, (ii) second, to each holder requesting inclusion of its registrable securities in such registration statement on a pro rata basis based on the total number of registrable securities then held by each such holder; provided that at least 25% of the registrable securities requested by the holders to be included in the underwriting and registration shall be so included and all shares that are not registrable securities shall first be excluded from such registration and underwriting before any registrable securities are so excluded.
If the managing underwriters of any underwritten offering determine that marketing factors require a limitation of the number of shares to be underwritten, and the number of shares that may be included in the registration and the underwriting shall be allocated (i) first, to us, (ii) second, to each holder requesting inclusion of its registrable securities in such registration statement on a pro rata basis based on the total number of registrable securities then held by each such holder; provided that at least 25% of the registrable securities requested by the holders to be included in the underwriting and registration shall be so included and all shares that are not registrable securities shall first be excluded from such registration and underwriting before any registrable securities are so excluded. 131 Table of Contents Form F-3 Registration Rights.
Compensation.” Share Incentive Plans See “Item 6. Directors, Senior Management and Employees—B. Compensation.” Other Related Party Transactions Transactions with Tencent Group. Tencent Group is one of our investors.
Compensation.” Share Incentive Plans See “Item 6. Directors, Senior Management and Employees—B. Compensation.” 130 Table of Contents Other Related Party Transactions Transactions with Tencent Group. Tencent Group is one of our investors.
We engage Weixin Pay as one of our payment processing platforms to collect payment from our insurance consumers, participants of our mutual aid plans, and users on our crowdfunding platform, where Tencent Group charges service fee for each transaction occurred.
We engage Weixin Pay as one of our payment processing platforms to collect payment from our insurance consumers and users on our crowdfunding platform, where Tencent Group charges service fee for each transaction occurred.
In addition, Tencent Group provides cloud technology services to us, which amounted to RMB45.3 million, RMB35.3 million and RMB31.4 million (US$4.4 million) for the years ended December 31, 2021, 2022 and 2023, respectively. As of December 31, 2021, 2022 and 2023, we had amount due to Tencent Group of RMB20.4 million, RMB11.6 million and RMB9.5 million (US$1.3 million), respectively.
In addition, Tencent Group provides cloud technology services to us, which amounted to RMB35.3 million, RMB31.4 million and RMB30.7 million (US$4.2 million) for the years ended December 31, 2022, 2023 and 2024, respectively. As of December 31, 2022, 2023 and 2024, we had amount due to Tencent Group of RMB11.6 million, RMB9.5 million and RMB10.6 million (US$1.5 million), respectively.
We started to provide advertising services to Tencent Group in 2020, which amounted to RMB2.0 million, RMB1.0 million and RMB0.6 million (US$0.1 million) in 2021, 2022 and 2023, respectively. We had amount due from Tencent Group of RMB1.0 million, RMB357.8 thousand and RMB64.7 thousand (US$9.1 thousand) as of December 31, 2021, 2022 and 2023, respectively.
We provide advertising services to Tencent Group, which amounted to RMB1.0 million, RMB0.6 million and RMB1.1 million (US$0.2 million) in 2022, 2023 and 2024, respectively. We had amount due from Tencent Group of RMB357.8 thousand, RMB64.7 thousand and RMB257.4 thousand (US$35.3 thousand) as of December 31, 2022, 2023 and 2024, respectively.
For the years ended December 31, 2021, 2022 and 2023, we paid payment processing fee to Tencent Group of RMB38.0 million, RMB27.8 million and RMB23.8 million (US$3.3 million), respectively. Tencent Group started to provide marketing service to us since 2020, which amounted to RMB487.1 million, RMB20.7 million and RMB79.5 million (US$11.2 million) in 2021, 2022 and 2023, respectively.
For the years ended December 31, 2022, 2023 and 2024, we paid payment processing fee to Tencent Group of RMB27.8 million, RMB23.8 million and RMB22.0 million (US$3.0 million), respectively. Tencent Group also provides marketing service to us, which amounted to RMB20.7 million, RMB79.5 million and RMB5.3 million (US$0.7 million) in 2022, 2023 and 2024, respectively.

Other WDH 10-K year-over-year comparisons