AIX Inc. (NASDAQ:AIFU): Reshaping AI Insurance And The Healthcare Industry--A Promising Future Ahead?

2. BGM Group: From a Market Value of Millions to a Potential Leader in AI Insurance

• Technical Advantage: BGM is positioned to take a leading role in the AI + insurance market transformation by leveraging the Duxiaobao AI insurance platform and Baidu's big data capabilities. It can offer personalized insurance solutions to the market.
• Market Opportunity: The global AI insurance industry is on the brink of a major expansion, and BGM is well-positioned to seize this opportunity.
• Industry Trend: The "pharmaceutical + insurance" model is gaining momentum in China, where over 400 million people have chronic conditions. Annual medical expenses account for 60% of total expenses, yet related premiums constitute only 5% of health insurance, revealing a significant protection gap. From 2012 to 2022, China's commercial health insurance experienced a compound annual growth rate (CAGR) of 25.93%, far surpassing the average growth rate of the insurance industry, indicating tremendous growth potential. Successful cases such as CVS's acquisition of Aetna and UnitedHealth Group's integration with OptumRx validate the critical value of "pharma + insurance" collaborations in optimizing costs, innovating supply chains, and facilitating data sharing.

Currently, BGM Group's market value has not yet been fully realized in the secondary market. If the AI insurance business expands rapidly, BGM Group's market value and stock price are likely to undergo significant revaluation.

3. AIFU's Undervaluation

As of December 31, 2023, AIFU's total revenue reached $3.198 billion, reflecting a year-on-year increase of 14.98%, and net profit was $289 million, demonstrating a year-on-year increase of 237.25%. As the largest insurance brokerage platform in China, AIFU has a Price-to-Earnings (P/E) ratio of only 3.5x. In comparison, Prudential Insurance reported revenue of $11.9 billion, up 143%, with a net profit of $1.712 billion, up 271.72%. Meanwhile, Prudential Financial's revenue was $53.979 billion, down 5.1%, but its net profit rose by 249%, reaching $2.508 billion. These results highlight AIFU's significant growth potential.

With a market value of approximately $76 million, AIFU stands in stark contrast to Prudential Insurance (PUK, market value of $21.7 billion) and Prudential Financial (PRU, market value of $46.1 billion). While Prudential focuses primarily on traditional insurance products, AIFU is poised to disrupt the industry with AI-driven solutions, supported by Baidu's big data, which will effectively reduce costs, expand market share, and improve customer satisfaction.

4. Pharmaceutical and Healthcare Strategy Driving Valuation Growth

AIFU not only focuses on the AI insurance business but also heavily invests in the pharmaceutical and healthcare sectors, seizing new opportunities brought about by global population aging. Key driving factors include:

• Aging Population: An increase in the elderly population leads to a greater demand for insurance and healthcare services.
• AI + Health Management: AIFU plans to use AI technology to offer customized insurance products and services for its client base.

Through the strategic restructuring with BGM Group, AIFU has formed a powerful alliance in both the AI insurance and healthcare sectors, positioning itself to become an industry leader. Whether in terms of BGM Group's valuation potential or AIFU's business expansion, this transaction presents a unique opportunity for investors. The dual drivers of AI insurance and healthcare will be the cornerstone of the company's future development.

SOURCE AIX Inc.

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