Executive Summary / Key Takeaways

• Zhibao Technology Inc. (NASDAQ:ZBAO) stands as a pioneering InsurTech leader in China, having innovated the 2B2C digital embedded insurance model, which enables efficient customer acquisition and tailored solutions across diverse industries.
• The company demonstrates robust financial momentum, with a 29% revenue increase to RMB 183.70 million (US$25.2 million) in fiscal year 2024, and a significant 74% surge in revenue for the six months ended December 31, 2024, reaching RMB 146.40 million (US$20.1 million), alongside a narrowing net loss.
• ZBAO's proprietary PaaS platform and AI-driven tools like ZBOT are critical technological differentiators, enabling rapid development of over 40 digital insurance solutions and enhancing sales efficiency, thereby strengthening its competitive moat.
• Strategic initiatives, including the acquisition of Zhonglian Jinan, expansion into the low-altitude economy and private pension markets, and the establishment of Zhibao Labuan Reinsurance, underscore a clear roadmap for accelerated growth and market penetration.
• While facing regulatory uncertainties in China and intense competition, ZBAO's first-mover advantage, integrated service model, and commitment to technological advancement position it for continued expansion, though investors should monitor the impact of concentrated voting power and internal control remediation efforts.

The Digital Frontier of Chinese Insurance: Zhibao Technology's Strategic Blueprint

Zhibao Technology Inc. (NASDAQ:ZBAO) is at the forefront of China's rapidly evolving InsurTech landscape, having established itself as a leading provider of digital insurance brokerage services. Operating as a Cayman Islands holding company, Zhibao conducts its core business through its PRC Subsidiaries, primarily Zhibao China and Sunshine Insurance Brokers. The company's overarching strategy centers on its pioneering 2B2C (to-business-to-customer) digital embedded insurance model, which integrates customized insurance solutions directly into the existing customer engagement platforms of various business entities, or "B channels." This innovative approach allows ZBAO to efficiently reach and serve a vast network of end customers with scenario-specific insurance needs, distinguishing it from peers reliant on traditional or direct-to-consumer advertising.

Zhibao's journey began in 2016 with Zhibao China entering the insurance brokerage industry. A pivotal moment arrived in 2020 with the launch of China's first digital insurance brokerage platform, powered by its proprietary Platform as a Service (PaaS). This technological foundation has been instrumental in shaping ZBAO's current market position and strategic responses. The company's history also includes a significant corporate reorganization between December 2022 and March 2023, which facilitated international capital investment and set the stage for its public listing.

The Chinese insurance market, particularly the embedded insurance brokerage segment, is still in its early stages of development but is widely considered the future of the industry. Broader industry trends, such as the digital transformation of financial services and the increasing adoption of AI, provide a fertile ground for ZBAO's model. For instance, China's total pension market is projected to reach approximately RMB 48 trillion by 2030, with the private pension and pension insurance market expected to contribute around RMB 10 trillion. This immense opportunity aligns directly with ZBAO's strategic focus on leveraging its digital platform to deliver insurance solutions to end-users in this growing sector.

Technological Edge: The Core of Zhibao's Innovation

Zhibao's competitive advantage is deeply rooted in its proprietary technology platform, particularly its PaaS and the recent integration of AI. The company's PaaS is a cloud-based development platform offering a comprehensive suite of 2B2C insurance tools. These tools enable the efficient construction of systems required for various insurance solutions. This platform was developed based on eight years of professional knowledge and real-world deployment experience, allowing ZBAO to rapidly and reliably output customized insurance solutions. The PaaS facilitates the incubation of new solutions without starting from scratch, leveraging reusable system components, data consistency, and customer convenience.

The tangible benefits of this technology are significant. Zhibao has developed over 40 proprietary digital insurance solutions tailored for diverse scenarios in industries such as travel, sports, logistics, utilities, and e-commerce. These solutions substantially reduce point-of-sale friction, delivering relevant and customized digital insurance brokerage services to both B channels and end customers. The platform also enables the acquisition and analysis of customer data, utilizing big data and AI technology to continuously iterate and enhance digital solutions, ensuring the company remains abreast of market trends and customer preferences.

Recent R&D initiatives further underscore ZBAO's commitment to technological leadership. On April 4, 2025, Zhibao launched ZBOT, an advanced AI agent designed to enhance sales efficiency. ZBOT aims to optimize sales operations and improve the overall customer experience, representing a major step in leveraging cutting-edge technology. The company also plans to enrich the technology infrastructure tools and functionalities of its PaaS business components and introduce new AI and business intelligence (BI) functionalities, continually strengthening data security and governance. These technological advancements are crucial for ZBAO's competitive moat, contributing to higher operational efficiency, potentially better margins through reduced customer acquisition costs, and a stronger market position by offering superior, tailored services.

Financial Performance and Operational Momentum

Zhibao Technology has demonstrated a compelling financial turnaround and strong growth trajectory. For the fiscal year ended June 30, 2024, the company reported revenues of approximately RMB 183.70 million (US$25.2 million), marking a 29% increase from RMB 142.10 million (US$19.5 million) in fiscal year 2023. This growth translated into a net income of approximately RMB 13.30 million (US$1.8 million) for FY2024, a significant improvement from a net loss of RMB 43.10 million (US$5.9 million) in FY2023. Notably, the FY2023 loss included RMB 54.70 million (US$7.50 million) in share-based compensation expenses; excluding this one-off item, the company would have posted a net income of approximately RMB 11.60 million (US$1.60 million).

The momentum continued into the first half of fiscal year 2025, with revenue for the six months ended December 31, 2024, surging by 74% to RMB 146.40 million (US$20.1 million) from RMB 84.30 million in the comparable period of 2023. The net loss for this six-month period also significantly narrowed to approximately RMB 0.60 million (US$0.1 million) from RMB 8.50 million, indicating effective cost management and operational leverage. Operating income also saw a positive shift, moving from a loss of approximately RMB 8.4 million in the six months ended December 31, 2023, to an income of approximately RMB 3.8 million (US$0.5 million) in the same period of 2024.

The revenue mix highlights the dominance of insurance brokerage services, which accounted for 94% of total revenues in FY2024, up from 84% in FY2023. Conversely, MGU service fees decreased from 16% to 6% over the same period. This shift underscores the success of the core brokerage model. Commissions for insurance brokerage services typically range from 10-35% for property & casualty and health products, and 50-80% for life insurance products, based on gross written premium. MGU service fees average around 15% of gross written premium.

In terms of liquidity, Zhibao may receive up to $15 million in aggregate gross proceeds from Hudson Global Ventures, LLC under an Equity Purchase Agreement (Hudson EPA) over a two-year period commencing June 22, 2025. These proceeds are earmarked for general corporate purposes, including working capital. As of December 31, 2024, cash and cash equivalents increased significantly to approximately RMB 28.1 million (US$3.9 million) from RMB 2.4 million as of June 30, 2024. The company has explicitly stated its intention to retain all future earnings to reinvest in and finance business expansion, with no plans to pay cash dividends in the foreseeable future.

Strategic Outlook and Growth Initiatives

Zhibao's strategic roadmap is ambitious, focusing on expanding its B channel network, enhancing its digital solutions, and venturing into new markets and service lines. The company aims to accelerate the expansion of its B channels, including insurance companies, to penetrate new markets and increase market share in China. As of the filing date, Zhibao has cooperated with over 2,400 B channels, securing more than 24 million end customers. A key growth strategy involves expanding its sales force and developing independent sales partners, leveraging its delivery system for efficient onboarding and support.

A significant strategic move was the acquisition of a 51% equity interest in Zhonglian Jinan Insurance Brokers Co., Ltd. on July 2, 2025, for approximately $3.50 million. This acquisition is expected to more than double Zhibao's branch network and strengthen its nationwide insurance brokerage capabilities, adding Zhonglian Jinan's 58 branches across major regions like Beijing, Shanghai, Guangdong, and Sichuan. This move enhances ZBAO's reach in non-auto insurance lines, including liability, accident, enterprise property, cargo transportation, and short-term health insurance.

Zhibao is also driving additional conversions for existing end customers through its 2C business, targeting their broader insurance needs beyond initial scenario-specific interactions. The company plans to offer personalized insurance consultations via various digital and offline channels to encourage long-term commitments and facilitate short-term policy conversions.

In terms of product and technological development, Zhibao is committed to upgrading and enriching its digital insurance solutions, aiming to cover every aspect of end customers' daily lives. This includes optimizing existing solutions and developing new ones to meet emerging demands. The company also intends to invest in R&D to upgrade its PaaS, introducing new AI and BI functionalities and strengthening data security.

The MGU business is slated for expansion, with a target to increase the number of MGU partners from 10 to 15 and the proportion of MGU online business to 50% of total MGU business by June 2026. Product lines are expected to expand from high-end medical and long-term disability to mid-end medical and personal accident lines. The establishment of Zhibao Labuan Reinsurance Company Limited in Malaysia in July 2024, with final license approval in April 2025, is intended to support brokerage and MGU services beyond mainland China, signaling global expansion ambitions. Zhibao has already signed an MOU with a brokerage partner in Singapore and is assessing opportunities in the U.S. and European markets.

Zhibao's long-term growth roadmap (2026-2035) outlines distinct phases: accelerated expansion (2026-2028) targeting 40-70% annual revenue growth with R&D and marketing investments; structural upgrade (2029-2031) aiming for 30-60% annual revenue growth with a focus on efficiency; and maturation (2032-2035) with 16-32% annual revenue growth driven by profit growth. Specific projections for sports insurance revenue are CNY 20M in 2024, CNY 50M in 2025, and CNY 80M in 2026, targeting market shares of 10%, 15%, and over 20% respectively. One Wall Street analyst forecasts ZBAO's earnings for 2025 to be $2,884,327 and revenue for 2026 to be $14,215,053,633. Zhibao Technology's forecast annual revenue growth rate of 131.38% is projected to outperform the US Insurance Brokers industry's average of 8.32% and the US market's average of 11.99%.

Competitive Landscape and Risks

Zhibao operates in a competitive and evolving market. Its 2B2C embedded insurance model provides a significant competitive advantage by enabling customer acquisition at minimal cost and achieving higher efficiency compared to industry peers who invest heavily in direct-to-consumer advertising. As a first-mover and market leader in this specific segment in China, Zhibao has established entrenched relationships with B channels and other industry participants. The online insurance agency and brokerage business in China is characterized by a fragmented landscape of smaller firms often lacking in industry recognition, technological capacity, and capital, which Zhibao aims to capitalize on through strategic partnerships and potential M&A.

Compared to direct competitors like ZhongAn Online P&C Insurance Co., Ltd. (ZAOPY), Waterdrop Inc. (WDH), and Huize Holding Limited (HUIZ), ZBAO's integrated digital and offline service model offers a more holistic market positioning, potentially leading to stronger customer retention in regions with uneven digital adoption. While ZhongAn may have an edge in advanced data analytics and product innovation speed, ZBAO's balanced approach could differentiate it by providing a more seamless experience for clients needing both digital and physical consulting. Waterdrop's focus on affordable digital tools might outpace ZBAO in online product innovation, but ZBAO's broader service suite, including MGU, offers a more comprehensive solution. Huize's efficient digital distribution is a strong point, but ZBAO's integrated services could enhance its competitive edge in customer retention.

Indirect competitors include traditional insurers like Ping An Insurance (PNGAY) and emerging fintech players from ecosystems like Ant Group. These entities could pressure ZBAO's revenue opportunities through lower-cost models or alternative solutions. ZBAO's primary competitive advantages, or "moats," include its proprietary technology for digital platforms, strong distribution channels in China, and regulatory licenses. These assets enable enhanced customer loyalty, efficient operations, and potentially superior margins by reducing acquisition costs.

However, Zhibao faces several pertinent risks. Regulatory shifts in China, particularly concerning data security and foreign investment, pose significant challenges. The company is subject to substantial influence from the PRC government, with potential interventions that could materially alter its business or impact share value. While ZBAO completed a cybersecurity review for its IPO and processes personal information of over 20 million end customers, uncertainties remain regarding the interpretation and enforcement of new data protection laws. The New Overseas Listing Rules from the CSRC require filings for subsequent securities offerings, and non-compliance could adversely affect future financings.

Furthermore, there are risks related to the transfer of cash or assets out of mainland China or Hong Kong due to government restrictions. Zhibao has identified two material weaknesses in its internal controls over financial reporting as of June 30, 2024, related to U.S. GAAP knowledge and IT logical access security, which are currently being remediated. The company's dependence on key insurance companies for product supply and B channels for customer reach also presents a vulnerability. The concentrated voting power of Mr. Botao Ma, Chairman and CEO, who beneficially owns approximately 95.40% of the total voting power, could also cause a material decline in the value of Class A ordinary shares.

Conclusion

Zhibao Technology Inc. presents a compelling investment narrative, rooted in its pioneering 2B2C digital embedded insurance model and robust technological infrastructure. The company's consistent revenue growth, narrowing losses, and strategic expansion initiatives, including the acquisition of Zhonglian Jinan and ventures into the low-altitude economy and private pension markets, underscore its strong operational execution and clear vision for future growth. ZBAO's proprietary PaaS and AI-driven tools are central to its competitive differentiation, enabling efficient customer acquisition and the rapid development of tailored insurance solutions.

While the company operates within a complex Chinese regulatory environment and faces intense competition, its first-mover advantage and integrated service model provide a solid foundation. The strategic roadmap, with concrete guidance for MGU business expansion and global outreach, suggests a company poised for continued digital ascent. Investors should weigh Zhibao's technological leadership and strategic clarity against potential risks such as regulatory uncertainties and the impact of concentrated voting power, recognizing that the company's ability to leverage its innovative platform will be key to unlocking its long-term value in China's dynamic InsurTech sector.