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Cheche Group's Third Quarter 2024 Financial Performance

Cheche Group Inc. (NASDAQ: CCG), recognized as China’s foremost auto insurance technology platform, has unveiled its unaudited financial results for the third quarter ending September 30, 2024. The Company showcases its ability to increase revenues while achieving profitability, a significant achievement within its sector.

Financial Highlights

In Q3 of 2024, Cheche reported net revenues amounting to RMB 850.5 million (approximately US $121.2 million), reflecting a 3.3% year-over-year increase. The total net revenues for the year-to-date period climbed by 2.3% to RMB 2.5 billion (around US $354.8 million).

More impressively, the Company announced a net income of RMB 4.1 million (around US $0.6 million) for this quarter, transitioning from a previous net loss of RMB 55.4 million in Q3 of the prior year. Over the first nine months of 2024, the net loss contracted by an impressive 60.2%, reaching RMB 50.8 million (around US $7.2 million).

Cheche's adjusted net income also moved into positive territory, posting RMB 2.6 million (around US $0.4 million) in Q3, contrasting with an adjusted net loss of RMB 0.6 million the year before. This trend suggests a momentum shift in Cheche's operational efficiency and effectiveness.

Premium Growth

The total premiums written in the third quarter rose by 4.0%, totaling RMB 5.9 billion (approximately US $0.8 billion), with the nine-month figure increasing by 4.1% to RMB 16.9 billion (about US $2.4 billion). Cheche's strategy to expand its partnerships, particularly with New Energy Vehicle (NEV) manufacturers, has significantly added to these figures, with embedded policies surging by 149.6% year-over-year in Q3.

Further emphasizing this, Cheche reported embedding 292,000 policies for an associated premium of RMB 884.2 million (around US $126 million). Over the first nine months, they issued 636,000 embedded policies, driving revenues from these partnerships substantially.

Management Insights

Commenting on the impressive quarter, Lei Zhang, Founder, CEO, and Chairman stated, "For the first time, Cheche has achieved net income profitability on both GAAP and adjusted bases. This milestone reaffirms the validity of our business model and the increasing recognition of our value proposition."

Zhang highlighted the 48% increase in NEV production in China year-on-year, with a notable shift in consumer preference where NEVs are now outselling traditional fuel vehicles. Cheche's ongoing collaborations with NEV manufacturers and insurers aim to deliver innovative solutions that will support both customer satisfaction and corporate profitability.

Expense Management

Cheche's cost management strategies have also proven effective, as both selling and administrative expenses decreased significantly. Selling and marketing expenses saw a notable 53.6% reduction to RMB 18.1 million due to decreased share-based compensation. Similarly, general and administrative costs decreased by 41.3% to RMB 20.4 million.

Looking Ahead

For the full year 2024, Cheche anticipates net revenues ranging between RMB 3.5 billion and RMB 3.7 billion, projecting an increase of 6.1% to 12.1% from the previous year. Additionally, total written premiums are expected to reach between RMB 24.5 billion and RMB 26.5 billion—an increase of 8.4% to 17.3% compared to 2023.

As Cheche Group continues to evolve and adapt in the dynamic landscape of auto insurance and technology, investors and stakeholders are encouraged to stay tuned for further developments and their impacts on future financial performances, reflecting a robust return on investment.

Conclusion

In summary, Cheche’s Q3 results not only demonstrate resilience but also pave the way for potential growth in a rapidly changing automotive and insurance environment. The Company remains focused on enriching customer experiences and enhancing operational efficiencies, gearing up for an engaging future in both traditional and emerging markets.