Citi Downgrades Huize (HUIZ) to Neutral

Citi analyst Michelle Ma downgraded Huize (NASDAQ: HUIZ) from Buy to Neutral with a price target of $2.30 (from $7.20).

The analyst comments "Huize reported a net loss of Rmb8.6mn in 1Q25, mainly hindered by margin erosion amid overseas expansion. Brokerage income dipped 10% yoy in 1Q25 dragged by 16% yoy contraction of gross premiums facilitated, while the blended commission rate climbed 1.3ppt yoy to 18.9%. Cost of revenue was just down 4% yoy to Rmb210mn in 1Q25 with gross margin narrowed 3.2ppt yoy to 25.8%. As a result, gross profit contracted 19% yoy to Rmb73.3mn. Selling expenses rose 7% yoy in 1Q25, driven by increased marketing expenses, while G&A/R&D expenses dipped -3%/-6% yoy. Earnings turned to a net loss of Rmb8.6mn 1Q25 from a net profit of Rmb6.9mn in 1Q24. Mgmt noted that it is on track to expand into Singapore in 3Q25E and it plans to enter Philippines in 2H25E. We downgrade Huize to Neutral/High Risk with TP cut to US$2.3 amid unfavorable geo-shift which would continue to pressure business margin."

For an analyst ratings summary and ratings history on Huize click here. For more ratings news on Huize click here.

Shares of Huize closed at $2.03 yesterday.

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