Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> , a leading technology platform dedicated to insurance and healthcare service in China has filed for an IPO in the US and has a placeholder indication to raise about US$100m.</p><p>According to iResearch, Waterdrop was ranked the largest independent third-party insurance platform in China in terms of life and health insurance first year premiums (FYP) distributed in 2020. Though China’s insurance market has seen robust growth during the last few years, the insurance penetration in the country is still substantially lower than those in developed markets.</p>

Waterdrop Inc (WDH US) , a leading technology platform dedicated to insurance and healthcare service in China has filed for an IPO in the US and has a placeholder indication to raise about US$100m.According to iResearch, Waterdrop was ranked the largest independent third-party insurance platform in China in terms of life and health insurance first year premiums (FYP) distributed in 2020. Though China’s insurance market has seen robust growth during the last few years, the insurance penetration in the country is still substantially lower than those in developed markets.

Waterdrop IPO: Combining Insurance Brokerage with Charity

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>Founded in 2016, <a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> is getting ready to complete its IPO in the next several weeks. Waterdrop, an online medical insurance startup, is the largest independent third party insurance platform in China. Waterdrop was founded by Shen Peng, who was previously a Senior Product Manager at Meituan Dianping. </p><p>Waterdrop is expected to raise about <a href="https://www.insurtechinsights.com/insurtech-startup-waterdrop-set-for-us-ipo-latest-valuation-hitting-tens-of-billions-of-dollars/" target="_blank" rel="noopener">$500 million</a> in this IPO but this is subject to change depending upon the investors' demand. Waterdrop's IPO has been in discussion since July 2020. Back in late 2020, the initial valuation of Waterdrop was expected to be between $4 billion and <a href="https://www.insurtechinsights.com/insurtech-startup-waterdrop-set-for-us-ipo-latest-valuation-hitting-tens-of-billions-of-dollars/" target="_blank" rel="noopener">$6 billion. </a>At a $6 billion valuation, this would suggest a P/S multiple of 12.9x using the company's sales of $464 million in 2020. </p>

Founded in 2016, Waterdrop Inc (WDH US) is getting ready to complete its IPO in the next several weeks. Waterdrop, an online medical insurance startup, is the largest independent third party insurance platform in China. Waterdrop was founded by Shen Peng, who was previously a Senior Product Manager at Meituan Dianping. Waterdrop is expected to raise about $500 million in this IPO but this is subject to change depending upon the investors' demand. Waterdrop's IPO has been in discussion since July 2020. Back in late 2020, the initial valuation of Waterdrop was expected to be between $4 billion and $6 billion. At a $6 billion valuation, this would suggest a P/S multiple of 12.9x using the company's sales of $464 million in 2020. 

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. It is also the largest medical crowdfunding platform in China as measured by cumulative funds raised for 2020, according to iResearch. Waterdrop is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> (22.1% of outstanding shares), <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> (5.7%) and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>. Waterdrop has filed for an NYSE IPO with a placeholder amount of $100 million. </p><p>Healthcare coverage in China is primarily paid by social medical insurance (29.4% of total healthcare spend), commercial insurance (3.4%) and medical crowdfunding and other social charities (0.2%), according to iResearch. The potential medical protection gap (67.0% out-of-pocket expense) is an opportunity. Driven by the significant medical protection gap and rising awareness for protection, the Chinese insurance market is expected to reach RMB7.8 trillion by 2024, representing a CAGR of 12.9% from 2019, according to iResearch. Third-party insurance brokers and agents is a key distribution channel and will account for 13.0% of the total life and health insurance premium in 2025 vs 2.5% in 2019. </p><div class="content-highlight"><p>As a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from these favourable trends. While the revenue growth rate is slowing it remains fast-paced and is accompanied by lower losses and cash burn. The key unknown is whether the changing regulations will throw a spanner in the works. <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>, the key competitor, has seen its key CreditTech business bashed by regulations but its InsureTech business (the part that competes with Waterdrop) appears to be relatively unscathed. Notwithstanding the regulatory overhang, we believe that Waterdrop is worth a look.</p></div>

Waterdrop Inc (WDH US) is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. It is also the largest medical crowdfunding platform in China as measured by cumulative funds raised for 2020, according to iResearch. Waterdrop is backed by Tencent Holdings (700 HK) (22.1% of outstanding shares), Swiss Re AG (SREN SW) (5.7%) and Meituan (3690 HK). Waterdrop has filed for an NYSE IPO with a placeholder amount of $100 million. Healthcare coverage in China is primarily paid by social medical insurance (29.4% of total healthcare spend), commercial insurance (3.4%) and medical crowdfunding and other social charities (0.2%), according to iResearch. The potential medical protection gap (67.0% out-of-pocket expense) is an opportunity. Driven by the significant medical protection gap and rising awareness for protection, the Chinese insurance market is expected to reach RMB7.8 trillion by 2024, representing a CAGR of 12.9% from 2019, according to iResearch. Third-party insurance brokers and agents is a key distribution channel and will account for 13.0% of the total life and health insurance premium in 2025 vs 2.5% in 2019. As a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from these favourable trends. While the revenue growth rate is slowing it remains fast-paced and is accompanied by lower losses and cash burn. The key unknown is whether the changing regulations will throw a spanner in the works. Ant Financial Services Group (6688 HK), the key competitor, has seen its key CreditTech business bashed by regulations but its InsureTech business (the part that competes with Waterdrop) appears to be relatively unscathed. Notwithstanding the regulatory overhang, we believe that Waterdrop is worth a look.

Waterdrop IPO Initiation: Going for Brokers

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a>, a technology platform for insurance and healthcare services in China, aims to raise around US$500m in its US IPO. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> owned 22.1% and <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> owned 5.7% of the company prior to its listing.</p></div><div><p>In our previous note, <a href="https://www.smartkarma.com/insights/waterdrop-pre-ipo-the-positives-fast-growth-strong-backers" target="_blank" rel="noopener">Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers</a>, we spoke about the positive aspects of the deal. </p></div><div><p>In this note, we will talk about the not so flattering aspects</p></div>

Waterdrop Inc (WDH US), a technology platform for insurance and healthcare services in China, aims to raise around US$500m in its US IPO. Tencent Holdings (700 HK) owned 22.1% and Swiss Re AG (SREN SW) owned 5.7% of the company prior to its listing.In our previous note, Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers, we spoke about the positive aspects of the deal. In this note, we will talk about the not so flattering aspects

Waterdrop Pre-IPO - The Negatives - Scandals, Shutdowns, Competing with Giants, Regulation

<p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a>, a technology platform for insurance and healthcare services in China, aims to raise around US$500m in its US IPO. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> owned 22.1% and <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> owned 5.7% of the company prior to its listing.</p><p>Waterdrop was the largest independent third-party insurance distribution platform in China in terms of first year premium distributed in 2020, as per iResearch. As of Dec 2020, it had insured 79.4m consumers and generated RMB14.4bn of first year premiums. It was also the largest medical crowdfunding platform in China with 340m donors, as of Dec 2020, who had donated over RMB37bn to 1.7m patients.</p><p>In this note, we will talk about the positive aspects of the deal.</p>

Waterdrop Inc (WDH US), a technology platform for insurance and healthcare services in China, aims to raise around US$500m in its US IPO. Tencent Holdings (700 HK) owned 22.1% and Swiss Re AG (SREN SW) owned 5.7% of the company prior to its listing.Waterdrop was the largest independent third-party insurance distribution platform in China in terms of first year premium distributed in 2020, as per iResearch. As of Dec 2020, it had insured 79.4m consumers and generated RMB14.4bn of first year premiums. It was also the largest medical crowdfunding platform in China with 340m donors, as of Dec 2020, who had donated over RMB37bn to 1.7m patients.In this note, we will talk about the positive aspects of the deal.

Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers

United States

Waterdrop Inc. is an insurtech platform headquartered in China. Founded in 2016, with coverage of Waterdrop Insurance Marketplace and Medical Crowdfunding, Waterdrop offers insurance and healthcare service through technology.

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Waterdrop Inc (WDH US)

Waterdrop IPO: Combining Insurance Brokerage with Charity

Waterdrop, a leading technology platform dedicated to insurance and healthcare service in China has filed for an IPO in the US and has a...

Shifara Samsudeen, FCMA, CGMA

Waterdrop IPO Preview

Waterdrop, an online medical insurance startup and the largest independent third party insurance platform in China, is getting ready to complete...

Douglas Kim

Waterdrop IPO Initiation: Going for Brokers

Waterdrop has filed for an NYSE IPO with a placeholder amount of $100 million. Notwithstanding the regulatory overhang, we believe that Waterdrop...

Arun George

Waterdrop Pre-IPO - The Negatives - Scandals, Shutdowns, Competing with Giants, Regulation

Waterdrop, a technology platform for insurance and healthcare services in China, aims to raise around US$500m in its US IPO. Tencent owned 22.1%...

Sumeet Singh

Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers

Waterdrop Inc, a technology platform for insurance and healthcare services in China, aims to raise around US$500m in its US IPO. Tencent owned...

Sumeet Singh

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