INVESTOR VIEW: AIX is an underrated star in the AI insurance and health sectors

The company’s recent combination with BGM Group through an acquisition puts it in strong position to benefit from future integration of AI into the insurance business

By Rucha Gupda

On Dec. 27, BGM Group Ltd. (BGM.US), a leading global pharmaceutical company, completed its acquisition of AI insurance platform Duxiaobao from AIX Inc. (AIFU.US). Valued at approximately $140 million, this acquisition is expected to catalyze growth in AIX’s market capitalization.

Establishing an efficient shareholding structure

Following the acquisition, AIX will become BMG Group’s majority shareholder, holding 72% of its stock. Under the leadership of CEO Xin Chen, AIX’s RONS Technology and Xinbao Investment are poised to unleash their development potential.

Xin Chen, a graduate of the National University of Singapore with a degree in computer AI, possesses extensive technical knowledge and innovative insight. He has successfully integrated AI insurance technology into traditional pharmaceutical operations, giving the company a unique competitive advantage in intelligent insurance solutions.

Additionally, AIX aims to leverage BGM for further expansion into international markets while utilizing its AI insurance platform to achieve global growth in its pharmaceutical and health businesses. The shareholding structure of AIX provides a strong foundation for competitiveness in both technology and capital markets.

AIX’s business layout encompasses several high-potential areas. These include:

Its AI Insurance Brokerage: The application of large AI models in the insurance sector will primarily enhance front-end intelligent customer service and sales. In the future, these AI models are expected to expand into various scenarios, including personalized product pricing, underwriting, claims management, and risk control, thereby empowering the entire industry supply chain.

Blue Plus Platform: As a legally compliant health and wellness service platform, AIX’s Blue Plus Platform serves over 50,000 users annually, leveraging an innovative “small contributions to achieve great effects” model to achieve a market scale of 1.5 billion yuan ($206 million). This platform connects scarce resources and provides high-value mutual aid protection.

Insurance Assessment Business: Focusing on high-value domains such as property and marine insurance, AIX employs intelligent risk control and drone technology to provide end-to-end solutions, enhancing accident-handling efficiency while establishing an international adjustment network.

Anti-Aging Gene Management: By providing health management solutions through gene analysis and utilizing AI technology to assist doctors in diagnosis and treatment, AIX is meeting the growing demand for high-end medical services.

High potential

AIX is also a perfect combination of undervaluation and high potential for the following reasons:

Low Market Capitalization: The integration of BGM adds $599 million in financial assets to AIX. Compared to AIX’s current business and asset scale, its stock price appears significantly undervalued. The company’s current price-to-book (P/B) ratio is only 0.212, a figure that is expected to decrease further post-merger, while the industry average ranges from 1.32 to 1.51, presenting an excellent investment opportunity for potential investors.

Business Growth Engine: The newly acquired assets facilitate future capital operations, while the effective application of AI technology is projected to significantly boost business profit margins. By integrating AI insurance with the health sector, AIX aims for a transformative leap in its business model.

Positive Financial Outlook: AIX’s core business holds immense growth potential, with its insurance operations expected to experience geometric growth in the coming year, including projected net profits rising between 150 million yuan and 300 million yuan.

Governance structure: Technology-driven business innovation

The integration of AI and insurance is reshaping AIX’s business model. Furthermore, the governance framework of AIX and BGM will differ from traditional governance models, primarily driven by sales performance. AIX will adopt a technology-oriented and capital-empowered management model, primarily through mergers and acquisitions, ensuring the efficient application of AI technology in its insurance operations while simultaneously expanding the company’s asset base. This governance framework optimizes internal resource allocation and provides robust support for future business expansion.

Conclusion: An underrated star with promising prospects

With its technology-driven insurance operations and strategic positioning in the health sector, AIX is building a comprehensive ecosystem that encompasses AI, finance, and healthcare. Considering both its current undervaluation and its future growth potential, AIX represents an exceptionally attractive investment opportunity. In the coming wave of AI insurance and the silver economy, AIX is poised to become a significant player in the industry.

Rucha Gupda is an analyst at Magpie news. You can reach him at info@magpienews.com

This commentary is the view of the writer and does not necessarily reflect the views of Bamboo Works

The Bamboo Works offers a wide-ranging mix of coverage on U.S.- and Hong Kong-listed Chinese companies, including some sponsored content. For additional queries, including questions on individual articles, please contact us by clicking here.

To subscribe to Bamboo Works free weekly newsletter, click here