Yuanbao Inc. American Depositary Shares 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect Yuanbao's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures.

For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from Yuanbao's senior management are Mr. Rui Fang, our chairman and chief executive officer, and Mr. Huirui Wan, our chief financial officer. Mr. Fang will deliver his remarks in Chinese, followed by an English translation. All figures will be in RMB, unless otherwise noted. We will conclude the call with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yuanbao's investor relations website. I will now turn the call over to our chairman and CEO, Mr. Fang. Please go ahead, sir. 大家好，欢迎参加元宝2026年第二季度财报电话会。2026年第二季度，公司业务保持稳健增长态势，收入规模与盈利能力同步提升。本季度公司总收入为人民币13.92亿元，同比增长30.1%。经营利润为人民币4.13亿元，同比增长35.6%，经营利润率达到29.7%。截至二季度末，公司现金储备为人民币51.6亿元，为我们持续投入AI技术研发，协同保司进行产品创新，把握行业结构性机遇提供了坚实的支撑。 Hello, everyone.

Thank you for joining us today for our second quarter 2026 earnings conference call. In the second quarter of 2026, we maintained steady growth momentum with both revenue and profitability improving in tandem. Total revenue for the quarter was RMB 1.39 billion, a year-over-year increase of 30.1%. Net income was RMB 413.2 million, up 35.6% year-over-year, with a net income margin of 29.7%. As of the end of the second quarter, our cash reserves totaled RMB 5.16 billion, providing solid support for our continued investment in AI technology, our product innovation in collaboration with insurance carriers, and our ability to capture structural opportunities within the industry.

在数据与模型能力建设方面，我们持续投入。截至二季度末，公司模型矩阵已超过5,100个模型，可对超过5,900个特征进行分析，覆盖从需求识别、产品推荐到理赔协助的全流程场景，服务效率及用户体验同步提升。此外，我们上个季度宣布的$1,500万美元股份回购计划也在稳步推进。截至2026年8月31日，我们已经累计回购约11.4万股ADS，总金额约160万美元，持续践行对股东的资本回报承诺。 We continued to invest in strengthening our data and modeling capabilities.

As of the end of the second quarter, our model matrix had exceeded 5,100 models, which are capable of analyzing more than 5,900 labels, covering the full range of scenarios from needs identification and product recommendation to claims assistance, driving improvements in both service efficiency and the user experience. In addition, the $15 million U.S. share repurchase program we announced last quarter continues to progress steadily. As of August 31, 2026, we had repurchased approximately 114,000 ADS for a total consideration of approximately $1.6 million U.S., reflecting our ongoing commitment to delivering capital returns to our shareholders.

近年来，商业健康险迎来广阔的发展机遇。政策端持续释放利好信号。今年3月，2026年政府工作报告明确提出加快发展商业健康险，推动创新药和医疗器械高质量发展，更好地满足人民群众多元化就医用药需求。7月，国务院印发《国民健康服务规划》，鼓励增加覆盖健康干预、特需医疗、创新药等的先行健康保险产品的供给。此前，国家金融监管总局在《关于推动健康保险高质量发展的指导意见》中明确指出，支持开发面向带病体、罕见病等特定群体的商业医疗保险产品。在此背景下，公司持续深化与保司的协同，加快产品迭代升级，坚持普惠价格加全面保障加品质服务的策略。通过降低投保门槛，丰富保障责任，提升服务体验，推动普惠型健康险保障的进一步品质扩面。 In recent years, commercial health insurance has seen both development opportunities backed by a continuous stream of favorable policy signals.

In March this year, the 2026 report on the work of the government exclusively called for accelerating the development of commercial health insurance and promoting the high quality development of innovative drugs and medical devices in order to better meet the public's diverse needs for medical treatment and medication. In July, the State Council issued the National Health Plan for the 15th Five-Year Plan period, encouraging an increased supply of innovative health insurance products covering areas such as health intervention, specialized medical care, and innovative drugs.

Prior to that, the National Financial Regulatory Administration explicitly stated in its Guiding Opinions on Promoting the High-Quality Development of Health Insurance that it supports the development of commercial medical insurance products targeting specific groups such as individuals with pre-existing conditions and rare diseases. Against this backdrop, we continue to deepen collaboration with insurer carriers and accelerate product iteration, adhering to a strategy built on affordable pricing, comprehensive coverage, and quality service. We are working to further improve the quality and expand the reach of the inclusive health protection by lowering enrollment barriers, enriching coverage benefits, and enhancing the service experience.

在产品端，元宝超医保系列医疗险根据消费者需求，历经多年迭代，已实现从基础门急诊、一般医疗到品质医疗的梯度覆盖，让不同年龄、不同需求、不同预算的用户都能找到适合自己的保障方案。今年6月，元宝超医保系列医疗险迎来全面升级。本次升级围绕用户就医全流程的痛点，在好医、好药、好康复三个维度同步发力，新增公立医院特需医疗资源，提升先进药械保障的覆盖，覆盖特定疾病的康复住院保障，推动健康保障进一步延伸至治疗加康复的全周期。值得一提的是，在实现保障大幅升级的同时，我们也始终坚持普惠定价原则，做到提质不提价。 On the product side, Yuanbao's Super Medical Insurance series has improved over many years in response to customer needs and now offers tiered coverage spanning basic outpatient and emergency care, general medical treatment, and premium medical care so that users of different ages, needs, and budgets can all find a plan that fits them.

In June this year, our Super Medical Insurance series underwent a comprehensive upgrade focused on addressing pain points across users' full treatment journey. This upgrade advanced simultaneously across three dimensions: good doctors, good medicine, and good rehabilitation. It added access to special needs medical resources at public hospitals, expanded coverage for advanced drugs and medical devices, and introduced coverage for inpatient rehabilitation for specific conditions, extending health protection further across the full cycle of treatment plus rehabilitation.

Notably, even as we substantially upgraded our coverage, we stayed true to our principle of affordable pricing, improving quality without raising prices.

今年，元宝也积极探索带病人群的保障新路径，响应国家鼓励带病体保险的政策方向。5月，我们联合保司推出了全守护百万医疗险，实现免健康告知，责任范围内一般既往症可赔，确实降低了带病人群的投保门槛。重疾方面，我们联合保司推出了守护保百万医疗重疾险。在免健告版本，进一步推动重疾保障覆盖更多有需求的人群。从医疗险到重疾险，元宝以产品创新持续拓宽健康保障的可及性，切实回应超4亿带病体人群的真实保障需求。 This year, Yuanbao has also been actively exploring new approaches to protection for individuals with pre-existing conditions, responding to national policies that encourage insurance for this population.