The latest: Online insurer Waterdrop Inc. (WDH.US) on Tuesday reported a third-quarter net profit of 170 million yuan ($24.4 million), reversing a 479 yuan million yuan loss in the same period last year and representing its third consecutive quarterly profit.

Looking up: The company’s third-quarter revenue fell 0.9% year-on-year to 772 million yuan. But operating costs and expenses dropped 50.5% to 640 million yuan, as the company implemented a strategy of “earn more and spend less.”

Take Note: The company’s “Waterdrop medical crowdfunding platform” recorded 59 million yuan in service fee revenue, which was insufficient to cover its 63.7 million yuan in direct costs.

Digging Deeper: Waterdrop Inc. was founded by Meituan (3690.HK) co-founder Shen Peng in 2016 and listed in New York in May last year. Its business includes the “Waterdrop insurance marketplace” and “Waterdrop medical crowdfunding platform.” The company started to take cost control measures at the end of last year in its drive to become profitable, and reached that goal this year. In this year’s third quarter, for example, it sharply lowered its sales and marketing expenses by 82.4% to 138 million yuan, reducing operating costs by more than half.

Market Reaction: Waterdrop’s U.S.-listed shares surged 13.7% to $2.08 on Tuesday after the announcement, closing at a new 52-week high.

Translation by Jony Ho

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