The latest: Online insurer Waterdrop Inc. (WDH.US) successfully turned a loss into a profit in the first quarter of the year, with a net profit of 105 million yuan ($15.6 million) from a net loss of 370 million yuan in the same period last year, according to its latest results published on Wednesday.

Looking up: The company’s cost-control measures since the third quarter of last year have borne fruit, with operating costs and expenses dropping 60.4% to 532 million yuan in the first quarter – the main reason for the turnaround.

Take Note: Its first-quarter revenue was 649 million yuan, down 26.6% year-over-year, mainly due to lower insurance brokerage income and zero net operating revenue from management fees following the closure of its mutual aid business in March last year.

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. It originally operated a mutual aid business with a crowdfunding platform, providing a channel to patients seeking financing for expensive medical treatments. But Chinese regulators had other ideas and believed that companies like his needed official licensing to provide such services. As a result, the company shut down the business in March last year and focused on online insurance brokerage, it also underwent a business model transformation to pursue a new growth model with both quality and quantity, with initial results in the first quarter of this year.

Market Reaction: Waterdrop’s U.S.-listed shares sank 4.4% to $1.52 on Wednesday, losing 87% of their market value from last May’s IPO price of $12.

Translation by Jony Ho

To subscribe to Bamboo Works free weekly newsletter, click here

Recent Articles

Sante makes infant nutritional products

Sainte Nutritional nurtures Hong Kong IPO

The Qingdao-based maker of food for special medical purposes is challenging international firms that still dominate the China market but could face tariff uncertainties Key Takeaways: Sainte Nutritional has filed…
Illustration of the umbrella brand of Geely, which includes Zeekr, Volvo, Lotus.

Zeekr’s buyout stalls, and Chagee’s returns cool

A group of early investors in NEV maker Zeekr have protested a recent privatization bid for the company, saying it's too low. Will the buyer heed their complaints and raise its offer? And Chagee's maiden quarterly results show its revenue grew at just half the rate of its new store openings. What's behind the evaporting returns?