UOB Kay Hian: Maintains "Buy" rating for Waterdrop (WDH.US), raises target price to $2.23

According to Golden Ten Data APP, UOB Kay Hian recently released a research report indicating that Waterdrop Inc. (WDH.US) maintained solid performance in the second quarter of 2026, with continued momentum in both revenue and profit growth. Based on upward revised profit forecasts, UOB Kay Hian maintains a "Buy" rating on Waterdrop and raises its target price to $2.23.

The report shows that in the second quarter of 2026, Waterdrop Inc. achieved a net profit attributable to shareholders of 126 million RMB. In terms of revenue, net operating income for the second quarter reached 1.448 billion RMB, representing a year-on-year increase of 72.8%. Among this, revenue from the insurance segment grew by 80.5% year-on-year, with first-year premiums for long-term insurance rising by 33.4% quarter-on-quarter. Revenue from digital clinical trial solutions increased by 26.8% year-on-year.

UOB Kay Hian emphasized in the report that Waterdrop's deep deployment of AI technology has become a core engine driving growth and improving efficiency. Management noted that the "AI Medical Insurance Expert" contributed 25.6% more to premiums quarter-on-quarter in Q2, thanks to ongoing optimization of AI-driven demand insight and conversion tools. Looking forward, Waterdrop will position AI as a company-wide engine for growth and efficiency, and expects to continue increasing AI-related investment while maintaining R&D expenses as a reasonable proportion of revenue.

In terms of product innovation, leveraging its vast accumulation of claims data and insights into user needs, Waterdrop Insurance has broken the traditional static logic of blanket denial for patients with chronic illnesses, making it possible for users with pre-existing conditions to obtain coverage. This quarter, Waterdrop launched the industry’s first critical illness product “Easy Insurance” that requires no health disclosure and guarantees renewal for five years, covering over 100 major diseases, with optional coverage for accidental death and disability; they also expanded the “Jixing Gaozhao” series, adding the industry's first lifetime-no-health-disclosure specific illness insurance.

Waterdrop founder and CEO Shen Peng stated: "Waterdrop has always regarded technology as the core engine for the company’s development. At present, AI capabilities are deeply embedded in all of our business platforms, enabling us to more precisely capture the ever-growing market demand within our existing operations, consolidating and strengthening our competitive barriers. In the future, we will continue to enhance our technological and AI capabilities, steadily advance business expansion, maintain strategic investments, and create long-term, sustainable value for our shareholders."