United States securities and exchange commission logo
February 12, 2021
Peng Shen
Chief Executive Officer
Waterdrop Inc.
Block C, Wangjing Science and Technology Park
No. 2 Lize Zhonger Road, Chaoyang District, Beijing
People s Republic of China
Re: Waterdrop Inc.
Amendment No. 1 to
Draft Registration Statement on Form F-1
Submitted January
29, 2021
CIK No. 0001823986
Dear Mr. Shen:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 1 to Draft Registration Statement submitted January 29,
2021
Risk Factors
We face uncertainties relating to the change in the regulatory regime,
page 20
1. We note your disclosure
that the CBIRC published the Regulatory Measures for Online
Insurance Business,
which became effective on February 1, 2021. Please revise to clarify
if you are considered
an insurance institution and/or the risks applicable to your business
related to the rules.
Please also clarify how these rules apply to your business under
"Regulation," at page
139.
Peng Shen
FirstName
Waterdrop LastNamePeng Shen
Inc.
Comapany12,
February NameWaterdrop
2021 Inc.
February
Page 2 12, 2021 Page 2
FirstName LastName
Key Factors Affecting Our Results of Operations
Expansion of consumer base, page 86
2. We acknowledge the tabular disclosure added on page 86 in response to
prior comment
12. Please address the following:
On page 11 you disclose that gross written premiums (GWP) includes
first year
premiums (FYP) and renewal premiums where applicable. In the
fourth paragraph of
this disclosure you indicate that renewals or repurchases by
existing consumers
contributed to FYP growth. Please revise your disclosure to
clarify what is included
in FYP.
If policy renewals are included in FYP and, from your responses to
prior comments
14 and 16 that the vast majority of your business relates to
short-term policies, tell us
why FYP is a meaningful metric as compared to gross written
premiums (GWPs)
underlying your commissions.
If policy renewals are excluded from FYP, tell us how FYP on a
standalone basis
(i.e., without separate disclosure of GWP) provides any meaningful
information
about renewal/retention rates.
Although you may not track renewal/retention rates by source,
revise your disclosure
to present and discuss your overall renewal/retention rates or
tell us why such
disclosure is not warranted. In this regard, it appears that
business from
policyholders already familiar with your platform and services
could, at least in part,
be indicative of platform acceptance and future growth.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Components of Results of Operations
Operating revenue, net, page 88
3. In order to provide greater transparency with regard to the expansion
of your consumer
base, first year premium (FYP) growth and customer retention, please
disaggregate short-
term insurance brokerage income and long-term insurance brokerage
income between new
customers (no prior insurance policies underwritten by your insurance
company partners
for which you have received a commission) and returning customers.
Jury Trial Waiver, page 191
4. We note your response to comment seven. Please revise this section to
also include your
added disclosure from page 62, that investors cannot waive compliance
with the securities
laws and rules and regulations promulgated thereunder.
Notes to the Consolidated Financial Statements
Note 2: Summary of Significant Accounting Policies
Revenue Recognition, page F-20
5. We note that the promotional rewards given to your users as disclosed
in the table on page
91 in response to prior comment 8 are not trivial. Please reclassify
these rewards as a
Peng Shen
Waterdrop Inc.
February 12, 2021
Page 3
reduction to revenue under ASC 606-10-32-25 or explain to us why this
accounting is not
warranted. In your response elaborate on the nature of these rewards
to substantiate your
classification.
6. We are still considering your response to prior comment 14 and may
have additional
comments.
Contract assets, page F-23
7. We acknowledge your response to prior comment 16. Please tell us why
you reflect a
non-current contract assets balance on your interim balance sheet at
September 30, 2020
on page F-55 but do not appear to present such a balance at December
31, 2019 when it
appears from your response that RMB 11.8 million of commissions at
that date may be
received after one year.
You may contact Mark Brunhofer at (202) 551-3638 or Michelle Miller at
(202) 551-
3368 if you have questions regarding comments on the financial statements and
related
matters. Please contact Eric Envall at (202) 551-3234 or Susan Block at (202)
551-3210 with
any other questions.
FirstName LastNamePeng Shen Sincerely,
Comapany NameWaterdrop Inc.
Division of
Corporation Finance
February 12, 2021 Page 3 Office of Finance
FirstName LastName