Release Date: November 26, 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) reached a profitable inflection point, recording net income on both a GAAP and adjusted basis.
- The company leads the industry by providing customized intelligent software and embedded insurance, offering consumers great choice and cognition.
- Partnerships with 14 different AEV manufacturers, including major industry players, are expected to generate significant premiums through OEM channels.
- The number of embedded policies sold on the platform increased by 140% year-over-year, indicating strong growth in this segment.
- The company plans to expand its partnerships with auto manufacturers beyond China into regions such as Southeast Asia and the Middle East, leveraging its experience in the NEV market.
Negative Points
- The top three auto insurers are struggling to make money due to higher rates and claims ratios in the NEV market.
- Insurance policies on NEVs currently enjoy lower commission rates due to reduced profitability for insurance carriers.
- The cost of revenues increased by 3% from the prior year, which could impact overall profitability if not managed effectively.
- The gross margin may fluctuate on a quarterly basis due to different market conditions, potentially affecting financial stability.
- The company faces challenges in expanding its non-auto insurance offerings, which are currently limited to extensions of existing products.
Q & A Highlights
Q: How do your partnerships with NEV companies and insurance companies translate into revenue growth?
A: Lei Zhang, CEO, explained that Cheche Group is currently cooperating with 14 OEMs, providing insurance transaction services. They plan to expand their scope of partnership with existing brands, which will help increase revenue as they provide more services for additional brands.
Q: Why are NEV insurance rates lower, and how does Cheche Group achieve better profitability from them?
A: Lei Zhang, CEO, noted that while NEV insurance has high claims ratios, Cheche Group does not take on the risk of claims. Instead, they act as a platform facilitating better pricing for car owners, leading to increased market growth and profitability.
Q: Can you explain how Cheche Group is using self-driving technology to improve accident analysis?
A: Lei Zhang, CEO, stated that Cheche Group shares data with OEMs to improve efficiency and reduce risk. As intelligent driving becomes more common, their platform helps determine whether accidents are due to driver error or equipment failure, enhancing industry leadership.
Q: What is Cheche Group's strategy for expanding into Southeast Asia and the Middle East?
A: Lei Zhang, CEO, mentioned that Cheche Group plans to follow their existing clients, such as NEV makers, into these regions. They aim to build connections with local companies and provide systems, software, and operational services similar to their offerings in China.
Q: How do you see the NEV insurance market evolving in the near future?
A: Lei Zhang, CEO, expects NEV insurance to account for 40% to 50% of the total auto insurance market within three years. OEMs value insurance as a key entry point for after-sales services, and Cheche Group anticipates OEM-controlled insurance will capture at least a third of the market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
