Release Date: May 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Prime Impact Acquisition I (PRIUF, Financial) reported a 9.2% increase in total written premiums for the quarter, reaching USD751.1 million.
- The number of policies placed grew by 21.2% to 4 million, indicating strong market demand.
- The company has formed strategic partnerships with major EV manufacturers like Volkswagen and Xiaomi, enhancing its market presence.
- Prime Impact Acquisition I (PRIUF) has a robust financial position with USD32.4 million in cash, cash equivalents, and short-term investments.
- The company is leveraging advanced technology and AI for real-time pricing and smart risk management, positioning itself as a leader in the NEV insurance market.
Negative Points
- Net loss increased to RMB31.2 million (USD4.3 million), reflecting financial challenges.
- Adjusted net loss also rose to RMB12.2 million (USD1.7 million), mainly due to increased professional service fees and the cancellation of government grants.
- Operating expenses, excluding share-based compensation and listing-related fees, increased by 3.4% from the prior quarter.
- The company faces significant competition in the rapidly growing NEV market, which could impact future growth.
- There are risks associated with the company's reliance on partnerships with EV manufacturers, which may affect its market position if these relationships change.
Q & A Highlights
Q: What is the potential upside of the NEV insurance market, and what role will Cheche play in this market?
A: (Lei Zhang, CEO) The premiums of NEV insurance have accounted for over 60% of the total ownership of NEVs. The EV market has become the main service for EV makers. We believe that the revenue will grow from RMB200 billion to RMB300 billion, with the aftermarket exceeding RMB500 billion. Cheche will assist EV makers by building SaaS systems and providing smart risk management and real-time pricing for insurance carriers. We aim to occupy a major market share over the next 3 to 5 years.
Q: What is the market share of Cheche's partnership with NEV OEMs for the insurance broker SaaS platform?
A: (Lei Zhang, CEO) We work with major Chinese EV makers like Nio and Xiaomi. About 80% to 90% of new cars purchase auto insurance through our platform, and 50% renew their insurance through our SaaS platform. We also provide claims management services. We have exclusive partnerships with major EV makers like Volkswagen and serve more than 60% to 70% of the auto insurance offerings for other large EV sales in China.
Q: What are the drivers behind the sequential improvement in profitability from the first quarter this year?
A: (Wenting Ji, CFO) The increase in adjusted net loss in Q1 2024 was due to RMB5.2 million in post-listing professional service fees, RMB1.4 million exchange gains, and the cancellation of RMB5 million in government grants. Excluding these non-operating one-off issues, we would have delivered over 50% improvement in adjusted net loss compared to last year.
Q: How does Cheche plan to leverage its technology platform to support EV makers?
A: (Lei Zhang, CEO) We help EV makers by building SaaS systems and providing smart risk management and real-time pricing. Our technology platform supports new car insurance, renewals, and claims management. We aim to integrate AI deeper into our services, offering automated claims management, fraud prevention, and individualized risk-adjusted pricing.
Q: What is Cheche's strategy for global expansion?
A: (Lei Zhang, CEO) We are considering global expansion in regions such as North America and Southeast Asia. Our strategy is to develop and leverage the network effect of being the hub of the NEV industry, building sustainable competitive advantages for our partners to thrive in the long term.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
