- Quarter overview: ZhongAn Online P&C Insurance reported Q1 2025 revenue of 7,886,491,500 CNY with a gross profit of the same amount, implying a gross margin of 100%. Operating income reached 6,733,772,500 CNY, yielding an operating margin of 85.38%.
- Bottom-line pressure from non-operating items: Total other income net was a negative 6,363,650,500 CNY, resulting in an income before tax of 370,122,000 CNY and a net income of 333,784,000 CNY (net margin 4.23%). Earnings per share stood at 0.23 CNY.
- YoY/QoQ trends: Revenue and gross profit declined modestly year-over-year by about 0.9% and fell ~11.5% quarter-over-quarter. Net income surged YoY by approximately 1,104% (driven by a low base and offset by non-operating items) and grew QoQ by ~21.8%. EPS rose ~1,117% YoY and ~21.1% QoQ. The explosive YoY net income growth is heavily influenced by the weak base in Q1 2024 and the non-operating item mix, not solely operating performance.
- Strategic implication: The core insurance-and-tech platform weiterhin demonstrates exceptional operating profitability, but investors should monitor the volatility and composition of other income, regulatory dynamics, and the ability to translate strong operating profits into sustained net income amid non-operating headwinds.
Key Performance Indicators
Revenue
7.89B
QoQ: -11.46% | YoY:-0.87%
Gross Profit
7.89B
1.00% margin
QoQ: -11.46% | YoY:-0.87%
Operating Income
6.73B
QoQ: -13.43% | YoY:-4.02%
Net Income
333.78M
QoQ: 21.82% | YoY:1 103.54%
EPS
0.23
QoQ: 21.05% | YoY:1 116.93%
Revenue Trend
Margin Analysis
Key Insights
1,483,484,444 range.
YoY changes ( Revenue: -0.87%, Gross Profit: -0.87%, Operating Income: -4.02%, Net Income: +1103.54%, EPS: +1116.93% ); QoQ changes ( Revenue: -11.46%, Gross Profit: -11.46%, Operating Income: -13.43%, Net Income: +21.82%, EPS: +21.05% ).
Note: Cost of revenue is not disclosed separately; operating expenses are recorded as 1,152,719,000 CNY (selling, general & administrative).
Financial Highlights
Revenue and gross profit: 7,886,491,500 CNY with a gross margin of 100% (YoY -0.87%, QoQ -11.46%). Operating income: 6,733,772,500 CNY with an operating margin of 85.38%.
Total other income/expenses net: -6,363,650,500 CNY (a major headwind to pre-tax income).
Income before tax: 370,122,000 CNY; tax expense: 36,338,000 CNY; net income: 333,784,000 CNY (net margin 4.23%).
Earnings per share (diluted): 0.23 CNY; Weighted average shares: 1,469,813,000 - 1,483,484,444 range.
YoY changes ( Revenue: -0.87%, Gross Profit: -0.87%, Operating Income: -4.02%, Net Income: +1103.54%, EPS: +1116.93% ); QoQ changes ( Revenue: -11.46%, Gross Profit: -11.46%, Operating Income: -13.43%, Net Income: +21.82%, EPS: +21.05% ).
Note: Cost of revenue is not disclosed separately; operating expenses are recorded as 1,152,719,000 CNY (selling, general & administrative).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
7.89B
-0.87%
-11.46%
Gross Profit
7.89B
-0.87%
-11.46%
Operating Income
6.73B
-4.02%
-13.43%
Net Income
333.78M
1 103.54%
21.82%
EPS
0.23
1 116.93%
21.05%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: The earnings transcript data was not provided in the supplied dataset. As a result, management commentary and quotes from the Q1 2025 call are not included here. If a transcript becomes available, we will extract themes on strategy execution, cost discipline, investment income strategy, and near-term guidance.
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Forward Guidance
There is no explicit forward guidance in the provided data. In our view, investors should monitor:
- Operating leverage versus non-operating headwinds: Sustainability of the high operating margin (86%) if other income volatility persists.
- Investment income/other gains or losses: The large negative other income item is the main swing factor for pretax and net income; clarity on asset allocation, risk management, and fair value adjustments is critical.
- Revenue trajectory: QoQ decline suggests a seasonally slower start; assess whether the business can stabilize or reaccelerate premium growth in 2025 amid regulatory changes and competition.
- Regulatory and competitive landscape: Chinese online-insurtech models face ongoing regulatory scrutiny and competitive pressure from incumbents expanding digital channels.
Key factors to monitor: non-operating item composition, reserve adequacy and loss development, investment income sensitivity, and customer acquisition cost efficiency in the online model.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
1ZO.VI Focus
1.00%
N/A
N/A
N/A
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Neutral-to-cautious stance. The QQ1 2025 results underscore a compelling operating profit engine, with an 85% operating margin and a 100% gross margin, signaling strong core insurance economics. However, the material negative other income of 6.36b CNY dramatically suppresses pretax and net income, creating a non-operating drag that can obscure true operating performance. The modest YoY revenue decline alongside a substantial YoY rise in net income suggests a low base effect and non-operating items driving bottom-line results. Investors should: (1) scrutinize the composition and sustainability of other income, (2) assess the durability of core insurance profitability and the potential for margin expansion once non-operating items normalize, (3) monitor regulatory developments and competitive dynamics in China’s online-insurtech market, and (4) demand clarity on balance sheet health and cash flow when available. Overall, the stock warrants a cautious stance pending visibility on investment income stability and longer-term top-line growth trajectory.
Key Investment Factors
Growth Potential
The online-insurtech platform is positioned to scale through digital distribution, AI-driven underwriting/claims, and cross-sell of fintech services. Potential expansion of property & casualty lines and health/life extensions could lift premium growth over time.
Profitability Risk
Material volatility in investment income and other non-operating items; regulatory changes impacting pricing, product approvals, and data usage; competitive intensity from incumbent insurers and other insurtech platforms; reliance on a predominantly digital channel may amplify customer churn risks if claims experience worsens.
Financial Position
Balance sheet details are not disclosed in the provided data. Core operating profitability remains strong, but the lack of visibility on cash, liquidity, and leverage limits a full assessment of financial flexibility.
SWOT Analysis
Strengths
Leading online insurtech platform with scalable direct-to-consumer distribution
Very high gross margin and strong operating profitability driven by core insurance activities
Robust quarterly operating income despite a flat revenue line
Weaknesses
Significant negative other income/expenses, which suppress pre-tax and net income
Absence of disclosed balance sheet and cash flow data in the provided dataset
Reliance on non-operating items for large swings in pretax income
Opportunities
Expansion of online distribution to capture more premium volumes in China
Cross-sell fintech, IT services, and related insurance tech offerings to existing customers
Potential partnerships with e-commerce platforms and digital ecosystems to drive premium growth
Threats
Regulatory changes affecting pricing, product approvals, and data usage
Competitive pressure from traditional insurers expanding digital channels
Volatility in investment income and financial markets affecting other income lines
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