CMA approach - Certified Management Accountant (CMA) Updated: 2023

Initially a harvest festival, the celebration of Thanksgiving offers more than just a chance to gather with family and share a meal —it is an encouragement to look at your finances through gratitude, a reminder that growth is not just about accumulating wealth but also about wise management and mindful spending.

This period of reflection can lead to a deeper understanding of your financial habits and inspire positive change.

Lesson 1: Managing Holiday Expenses Wisely

A well-planned budget helps allocate funds for different aspects of the celebration, such as food, decorations, and gifts. By establishing a clear budget beforehand, you can avoid the common pitfall of overspending during the holidays.

This proactive approach keeps financial stress at bay and sets a healthy precedent for future financial planning. Saving money during Thanksgiving is about careful planning and thoughtful choices.

Meal planning, for instance, can significantly reduce food waste and costs. Shopping smart by looking for deals and discounts on ingredients and gifts can also contribute to substantial savings. Opting for DIY decorations adds a personal touch to the festivities and is a cost-effective alternative to store-bought items.

Lesson 2: Practicing Mindful Spending

It involves knowing where and how money is being spent and ensuring that each expenditure aligns with your personal values and financial goals. This conscious approach to spending helps avoid financial pitfalls like debt accumulation and buyer’s remorse.

Avoiding impulse purchases is key to maintaining a healthy financial state during the holidays. Creating a shopping list and sticking to it can prevent unnecessary expenditures. It’s also essential to distinguish between needs and wants, which helps in prioritizing spending and maintaining financial discipline.

Lesson 3: Teaching Kids About Financial Responsibility

Holidays provide an excellent opportunity to engage children in conversations about money. Discussing the costs associated with holiday preparations and celebrations can be an eye-opener for them and a great way to introduce basic financial concepts.

These discussions can be tailored to be age-appropriate and should aim to foster an understanding of the value of money and the importance of budgeting.

For younger children, lessons can focus on saving money, such as using a piggy bank. For older kids, setting financial goals can be a more advanced topic. Additionally, involving them in charitable activities during Thanksgiving teaches them the value of giving back and how it fits into overall financial responsibility.

Lesson 4: Gratitude and Investing

Recognizing and being thankful for what you have can lead to a more balanced and less emotionally driven approach to investing. This mindset encourages you to focus on long-term goals rather than making hasty decisions based on short-term market fluctuations.

Diversification of investments helps in this by managing risk and ensuring that your portfolio can withstand market volatility.

Additionally, understanding and managing investment risks aligns with a mindset of gratitude, as it involves appreciating the value of your investments and making decisions that protect and grow these assets.

Lesson 5: Maximizing Seasonal Investment Opportunities

During the holiday season, specific market sectors often see a surge in activity, presenting the potential for savvy investments. For example, retail, e-commerce, and hospitality typically flourish alongside the shopping rush.

Identifying and capitalizing on these trends requires research and a desparate understanding of market dynamics. Look for patterns in consumer behavior and industry performance to make informed decisions that could yield favorable returns.

It’s wise to revisit and possibly adjust investment portfolios to accommodate seasonal financial changes to ensure you are on track with long-term objectives.

Final Thoughts

Thanksgiving presents a unique opportunity to reflect on your financial journey, emphasizing the importance of careful planning, mindful spending, and strategic investing.

The lessons from Thanksgiving — from setting budgets to making informed investment choices — resonate beyond the festive season, laying a foundation for year-round financial prudence.

By embracing these lessons, you can transform your approach to money management, steering towards a path of sustained financial health and growth. May this Thanksgiving be a stepping stone towards a more financially aware and prosperous future.

With the upcoming elections, all five political parties have presented ambitious plans to propel Bhutan towards achieving a Gross Domestic Product of USD 5 billion by 2029 and USD 10 billion by 2034. Irrespective of the party that assumes power, significant investments in job creation, the CSI industry, bolstering tourism and related sectors, as well as exploring the potential of artificial intelligence are part of their proposed agendas.

One pressing issue that demands attention among the Bhutanese populace is the lack of financial literacy and discipline in managing expenses.

There have been some efforts from the Royal Monetary Authority and banks, particularly in commemorating International Savings Day each October. However, the challenge remains: while our coffers may see growth, they might as well be draining through wide crevices of financial indiscipline both at our individual and at the government levels.

We need a multi-pronged approach that involves education, family involvement, and mentorship that can help instill financial discipline and a saving culture in our youth. Creating an environment that encourages learning and responsible financial behaviour from an early age is essential to building a financially responsible and empowered generation.

This concern extends to our aspiring political leaders, who have come up with grand proposals and an inclination towards large borrowing. Over the past 15 years, several well-intentioned programs have floundered due to hasty attempts to fulfill populist pledges, leading to indiscriminate distribution of costly incentives and significant expenses with limited productive outcomes.

Looking beyond individual behavior, the nation needs leaders who allocate funds judiciously, especially in a country facing resource constraints. Such financial discipline isn’t solely a factor contributing to financial freedom; it forms the bedrock of financial stability.

As various promises continue to be made in the political arena, it becomes imperative to pose a straightforward question to both ourselves and those making these commitments: Where is the money going to come from? Equally significant, do these expenditures truly serve a crucial purpose?

A governing party may acquire substantial loans, complete their tenure, and then fade into into obscurity. However, the enduring aftermath and substantial debts accumulated over the years during their term will burden our future generations.

Addressing financial discipline at a national level is not just a matter of immediate concern but a necessity for securing our future. Sustainable economic progress demands prudent financial management and a cautious approach to spending. As the nation gears up for future development, it is vital to prioritise fiscal prudence, ensuring that each expenditure aligns with the genuine needs and long-term interests of our country and people.

Just as families gather around the Thanksgiving dinner table to express gratitude for the blessings of the year, you can engage in a similar reflective exercise by asking yourself the following questions to assess your financial well-being.

Question 1: Are You Living Within Your Means?

Living within your means is the art of balancing what you earn with what you spend, ensuring your lifestyle does not outpace your income.

Effective financial management starts with a clear understanding of your income and expenses. It involves tracking and analyzing your cash inflows and outflows, identifying areas where you can optimize spending, and recognizing opportunities for increasing income.

Budgeting is the cornerstone of financial planning. It’s about setting limits for different categories of expenses and aligning your spending patterns with your financial goals. A well-structured budget helps prevent impulsive purchases, reduces stress, and paves the way for achieving both short-term and long-term objectives.

Question 2: Do You Have An Emergency Fund?

An emergency fund provides a safety net in times of crisis, serving as a financial lifeline during medical emergencies, job loss, or major home repairs. They provide peace of mind, knowing you are prepared for life’s uncertainties.

Set a realistic savings goal. A common recommendation is to save at least three to six months’ worth of living expenses, but you can start with a smaller goal and work your way up.

Create a budget to identify areas where you can cut expenses, and allocate a portion of your income, say 10%, to your emergency fund each month.

You can also automate your savings by setting up a direct deposit or recurring transfer to your dedicated emergency fund account. Consider opening a high-yield savings account to earn more interest.

Additionally, windfalls like tax refunds, work bonuses, or unexpected gifts can be a great boost to your emergency fund. Over time, as you consistently contribute to your fund, you’ll build a financial cushion that can help you weather financial storms and achieve greater financial stability.

Question 3: Are Your Investments Aligned With Your Goals?

You must nurture your investments with intention and foresight and look beyond the allure of immediate potential gains. You should always consider whether your investment choices are stepping stones towards your objectives.

Your investments act as the means to achieve specific targets, such as saving for retirement, purchasing a home, funding education, or growing wealth. When investments are aligned with these goals, the likelihood of attaining them within the desired timeframes increases.

This alignment facilitates a well-balanced and diversified portfolio tailored to your risk tolerance, enabling effective management of both short-term needs and long-term aspirations.

Furthermore, it allows for tax optimization and minimizes unnecessary risks. Without this alignment, you may veer off course, potentially leading to missed opportunities.

It is essential to regularly review and adjust your investment strategies to ensure they remain in sync with evolving financial goals and circumstances.

Question 4: How Healthy Is Your Debt?

Debt can be a valuable tool when managed wisely. First consider its nature. Good debt typically includes investments in appreciating assets like real estate or education, as they can potentially yield long-term financial benefits.

On the other hand, bad debt often refers to high-interest consumer debt, such as credit card balances, which can damage your financial well-being if unchecked.

The total debt load relative to your income is also critical. A debt-to-income ratio that is too high may signal financial instability and hinder your ability to save and invest for the future.

Thus, managing debt requires a strategic approach. This involves prioritizing high-interest debts, considering consolidation or refinancing options, and understanding how to leverage good debt for financial growth.

Question 5: Do You Have a Retirement Plan?

Your retirement plan serves as a roadmap to ensure financial security and a comfortable lifestyle in your golden years. Without it, you risk outliving your savings, facing financial hardships, and being dependent on others for support.

A robust retirement plan takes into account factors such as expected retirement age, desired lifestyle, estimated expenses, and potential sources of retirement income.

A common option is investing as early as possible in a 401(k), IRA, or other employer-sponsored plans. When you invest money in these accounts, your contributions have the potential to grow over time through interest, dividends, and capital gains, significantly increasing the size of your retirement nest egg.

Investing early also gives you the flexibility to weather market fluctuations and potentially recover from any downturns. It allows you to benefit from dollar-cost averaging as you invest consistently over the years, buying more shares when prices are lower and fewer when they are higher.

Final Thoughts

If your answers to the above questions are a resounding yes, congratulations on maintaining a robust financial health! You’ve demonstrated not only a disciplined approach to spending and saving but also a thoughtful strategy towards investment and debt management.

However, if you find yourself uncertain or answering no, it’s not a cause for despair. Financial health is a journey. It involves continuous learning, adaptation, and sometimes, a bit of trial and error. You can also seek guidance from financial advisors and other professionals.

The key is to start where you are, use what you have, and do what you can. Small, consistent steps can lead to significant improvements over time.

You asked these crucial questions, that in itself is something to be thankful for.

SHENZHEN, China, Nov. 17, 2023 (GLOBE NEWSWIRE) -- Huize Holding Limited, (“Huize”, the “Company” or “we”) (NASDAQ: HUIZ), a leading digital insurance product and service platform for new generation consumers in China, today announced its unaudited financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Financial and Operational Highlights

• Driving high-quality growth: Gross Written Premiums (“GWP”) facilitated year to date on our platform were RMB4,555.5 million, increased by 31.7% year-over-year. Within GWP, First Year Premiums (“FYP”) accounted for RMB2,203.1 million, up 54.1% year-over-year. Renewal premiums year to date increased by 16.0% year-over-year to RMB2,352.4 million. Increases in premiums were driven primarily by our high-quality customer base, sustainably high persistency ratios, and the diverse array of customized long-term insurance products we distribute.
• Focused cost management and improving profitability: Gross profit margin improved by 6.0 percentage points year-over-year to 35.3% driven by improved customer acquisition efficiency. Operating expense-to-revenue ratio continued to improve, decreasing by 3.9 percentage points year-over-year to 29.0%. Net profit in the third quarter of 2023 was RMB20.2 million (US$2.8 million) and non-GAAP net profit was RMB18.5 million, marking the fourth consecutive quarter of profitability.

• Cumulative number of insurance clients served increased to approximately 9.1 million as of September 30, 2023. We cooperate with 121 insurer partners, including 75 life & health insurance companies and 46 property & casualty insurance companies, as of September 30, 2023.
• As of September 30, 2023, cash and cash equivalents were RMB258.4 million (US$35.4 million).

Mr. Cunjun Ma, Founder and CEO of Huize, commented, “We are pleased to report our fourth consecutive quarter of profitability, with net profit of RMB20.2 million and non-GAAP net profit of RMB18.5 million. This solid performance is a testament to the progress we have made in acquiring high-quality customers, rolling out a diverse array of cost-effective, customized long-term insurance products, and our omnichannel distribution capabilities integrating online and offline channels, with a focus on maximizing the lifetime value of our users. Despite the challenging macroeconomic and industry environment, we once again delivered a sound financial performance for the third quarter reflecting our resilient business performance amid a turbulent market.”

“During the quarter, our strategic focus remained squarely on distributing long-term insurance products, which accounted for 90.9% of GWP. This is the sixteenth consecutive quarter where this figure has exceeded 90%. FYP for our annuity products tripled during the quarter on a year-over-year basis, capitalizing on market demand for retirement savings products. Our high-quality customer base has contributed to persistency ratios of more than 95% as of the end of August, among the highest in the industry, for the 13^th and 25^th months of our long-term insurance products. This also led to a 25.2% sequential increase in renewal premiums during the quarter.”

“In the ‘To-A’ segment, we continued to empower insurance agents with innovative technologies. In the third quarter, FYP facilitated by the ‘To-A’ business reached RMB89.7 million, showing a 37.5% growth year-over-year. For the ‘To-C’ segment, we remained committed to our ‘customer-centric’ approach and continued to strengthen user engagement and enhance upselling capabilities. As a result, 38.4% of our long-term insurance products customers were repeat purchases from existing customers, increasing 4.7 percentage points year-over-year. Moving forward, we will leverage our deep customer insights to launch a wider range of innovative customized products to meet the growing demand for healthcare, accident, and retirement insurance products in addition to financial planning and wealth inheritance. We will also further optimize our O2O integration to empower our agents to drive sustainable, high-quality growth and create long-term sustainable shareholder value.”

Third Quarter 2023 Financial Results

GWP and operating revenue

GWP facilitated on our platform was RMB1,245.1 million (US$170.7 million) in the third quarter of 2023, maintaining levels similar to RMB1,249.0 million in the same period of 2022. Within GWP, FYP accounted for RMB644.5 million (or 51.8% of total GWP), a decrease of 5.9% year-over-year. Renewal premiums accounted for RMB600.6 million (or 48.2% of total GWP), an increase of 6.5% year-over-year.

Operating revenue was RMB292.4 million (US$40.1 million) in the third quarter of 2023, a decrease of 16.9% from RMB351.8 million in the same period of 2022, primarily due to the decrease in FYP facilitated on our platform.

Operating costs

Operating costs were RMB189.3 million (US$25.9 million) in the third quarter of 2023, a decrease of 23.9% from RMB248.7 million in the same period of 2022. Operating costs decreased at a faster pace than operating revenue, primarily due to a reduction in channel expenses and an increase in upselling activities.

Operating expenses

Selling expenses were RMB49.1 million (US$6.7 million) in the third quarter of 2023, a decrease of 12.9% from RMB56.4 million in the same period of 2022, primarily due to a decrease in salaries and employment benefits.

General and administrative expenses were RMB21.5 million (US$2.9 million) in the third quarter of 2023, a decrease of 50.2% from RMB43.1 million in the same period of 2022, mainly due to a reduction in depreciation and amortization expenses and rental and utilities expenses.

Research and development expenses were RMB14.3 million (US$2.0 million) in the third quarter of 2023, a decrease of 12.6% from RMB16.4 million in the same period of 2022, primarily due to a decrease in employee costs.

Net profit and Non-GAAP net profit for the period

Net profit in the third quarter of 2023 was RMB20.2 million (US$2.8 million), compared with a net loss of RMB10.5 million in the same period of 2022.

Non-GAAP net profit was RMB18.5 million (US$2.5 million) in the third quarter of 2023, compared with a non-GAAP net loss of RMB9.8 million in the same period of 2022.

Cash and cash equivalents

As of September 30, 2023, the combined balance of the Company’s cash and cash equivalents amounted to RMB258.4 million (US$35.4 million), compared to RMB277.2 million as of December 31, 2022.

Share Repurchase Program

Year to date as of September 30, 2023, the Company had purchased an aggregate of 1,363,148 ADSs for a total amount of approximately US$1.7 million under its share repurchase program.

Conference Call

The Company’s management team will hold an earnings conference call at 7:00 A.M. Eastern Time on Friday, November 17, 2023 (8:00 P.M. Beijing/Hong Kong Time on Friday, November 17, 2023). Details for the conference call are as follows:

All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registration, each participant will receive a confirmation email containing dial-in numbers, a passcode, and a unique access PIN, which will be used to join the conference call.

Additionally, a live and archived webcast of the conference call will also be available on the Company’s investor relations website at https://ir.huize.com.

About Huize Holding Limited

Huize Holding Limited is a leading digital insurance product and service platform for new generation consumers in China. Targeting the younger generation, Huize is dedicated to serving its insurance clients for their life-long insurance needs. Leveraging its online platform, Huize offers a wide variety of insurance products with a focus on long-term life and health insurance products and empowers its insurer partners to reach a large fragmented client base in the insurance retail market efficiently and enhance their insurance sales. Huize provides insurance clients with digitalized insurance experience and services, including suitable product recommendations, consulting service, intelligent underwriting, and assistance in claim application and settlement, which significantly Strengthen transaction experience.

For more information, please visit https://ir.huize.com.

Use of Non-GAAP Financial Measure Statement

In evaluating our business, we consider and use non-GAAP net profit/(loss) attributable to common shareholders as a supplemental measure to review and assess our operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. We define non-GAAP net profit/(loss) attributable to common shareholders as net profit/(loss) attributable to common shareholders excluding share-based compensation expenses and interest on convertible bond. Such adjustments have no impact on income tax because either the non-GAAP adjustments were recorded at entities located in tax free jurisdictions, such as the Cayman Islands or because the non-GAAP adjustments were recorded at operating entities located in the PRC for which the non-GAAP adjustments were not deductible for tax purposes.

We present the non-GAAP financial measure because it is used by our management to evaluate our operating performance and formulate business plans. Non-GAAP net profit/(loss) attributable to common shareholders enables our management to assess our operating results without considering the impact of share-based compensation expenses and the interest on convertible bond. We also believe that the use of this non-GAAP financial measure facilitates investors’ assessment of our operating performance.

This non-GAAP financial measure is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. The non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using adjusted net profit/(loss) attributable to common shareholders is that it does not reflect all items of income and expense that affect our operations. Further, the non-GAAP financial measure may differ from the non-GAAP financial information used by other companies, including peer companies, and therefore their comparability may be limited.

The non-GAAP financial measure should not be considered in isolation or construed as an alternative to net profit/(loss) attributable to common shareholders or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measure in light of the most directly comparable GAAP measure, as shown below. The non-GAAP financial measure presented here may not be comparable to similarly titled measure presented by other companies. Other companies may calculate similarly titled measures differently, limiting the usefulness of such measures when analyzing our data comparatively. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB7.2960 to US$1.00, the exchange rate on September 29, 2023, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollars amounts referred could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Huize’s beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, business outlook and quotations from management in this announcement, contain forward-looking statements. Huize may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause genuine results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Huize’s goal and strategies; Huize’s expansion plans; Huize’s future business development, financial condition and results of operations; Huize’s expectation regarding the demand for, and market acceptance of, its online insurance products; Huize’s expectations regarding its relationship with insurer partners and insurance clients and other parties it collaborates with; general economic and business conditions; and assumptions underlying or related to any of the foregoing.

Further information regarding these and other risks is included in Huize’s filings with the SEC. All information provided in this press release is as of the date of this press release, and Huize does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

Investor Relations
investor@huize.com

Media Relations
mediacenter@huize.com

Christensen
In China
Ms. Crystal Lai
Phone: +852 2117 0861
Email: crystal.lai@christensencomms.com

In U.S.
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com