BEIJING, October 31, 2019 /PRNewswire/ -- Puhui Wealth Investment Management Co., Ltd. (Nasdaq: PHCF) ("Puhui" or the "Company"), a third-party wealth management service provider with a focus on wealth management services for high net worth ("HNW") individuals and corporate clients, today announced its financial results for the year ended June 30, 2019. The Company will file these results today on Form 20-F with the Securities and Exchange Commission, which can be viewed at www.sec.gov. All amounts in this press release are in USD unless otherwise noted.
Financial and Operating Highlights
Mr. Zhe Ji, the Chairman and CEO of the Company, stated, "Puhui continued to service a greater total number of high net worth clientele despite challenges in the macro-economic environment that impacted our financial results for the year, particularly in the first half of calendar 2019. This uncertainty was due to a variety of factors, including a slowdown in growth, rising deflationary pressure, and trade concerns driven by geo-political concerns. This led to general credit tightening throughout the domestic China market, however we have seen this alleviate in recent months as credit growth has accelerated. Our service is predicated on providing prudent financial counsel to individual clients and building a loyal client base with long-term relationships. During uncertain times in the market, we feel that this represents an opportunity for Puhui to distinguish itself from competitors. With access to global markets as a public company, we believe Puhui is well-positioned to diversify its product offering for HNW clientele. We remain focused on utilizing our existing partnerships, such as with Yingke, to provide access to a broader base of investors where we can prove that our long-term investment philosophy can gain traction over time."
Market Commentary
Mr. Ji continued, "We remain very bullish on the long-term indicators surrounding China's wealth management industry, along with Puhui's position as a versatile manager able to provide comprehensive products and services at a competitive rate for a broad audience. According to Credit Suisse's Global Wealth Report 2019, the world's wealthiest 10% hold assets over USD $109,400, with over 100 million individuals who make that threshold residing in China (and is the fastest growing globally). Our target customer base are HNW individuals averaging over USD $200,000. We believe the long-term drivers remain strong and our focus on middle-class family investment through diversified products leave the Company well positioned."
Financial Review
Wealth Management
Asset Management
Revenues
Cost of Revenues
Operating Expense
Net Loss
Liquidity and Capital Resources
About Puhui Wealth Investment Management Co., Ltd.
Headquartered in Beijing, China, Puhui is a third-party wealth management service provider focusing on marketing financial products (including private equity and other diversified products and services) to, and managing funds for, individuals and corporate clients in the PRC. On December 27, 2018, the Company's ordinary shares were listed and began trading listed on the Nasdaq Capital Market (ticker: PHCF).
Additional information about Puhui can be found at the Company's corporate website: www.puhuiwealth.com.
Forward Looking Statements
This news release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions that indicate future events or trends or are not statements of historical matters. These statements are based on our management's current expectations and beliefs, as well as a number of assumptions concerning future events.
Such forward-looking statements are subject to known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of our control and all of which could cause actual results to differ materially from the results discussed in the forward-looking statements. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in our reports filed with the Securities and Exchange Commission, which are available, free of charge, on the SEC's website at www.sec.gov.
Investor Relations: |
|
The Equity Group Inc. |
In China |
Adam Prior |
Lucy Ma |
(212) 836-9606 |
+86 10 5661 7012 |
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||
For the Years Ended June 30, |
||||||
2019 |
2018 |
|||||
REVENUES |
||||||
Revenues |
$ |
3,072,809 |
$ |
2,808,346 |
||
Revenues - related parties |
129,122 |
1,351,515 |
||||
Sales taxes |
(21,297) |
(20,680) |
||||
Total revenues |
3,180,634 |
4,139,181 |
||||
OPERATING EXPENSES |
||||||
Cost of revenues |
(316,718) |
(367,548) |
||||
Selling expenses |
(2,005,367) |
(1,500,572) |
||||
General and administrative expenses |
(3,421,412) |
(1,888,310) |
||||
Impairment loss |
(5,628) |
(78,984) |
||||
Total operating expenses |
(5,749,125) |
(3,835,414) |
||||
(LOSS) INCOME FROM OPERATIONS |
(2,568,491) |
303,767 |
||||
OTHER INCOME (EXPENSES) |
||||||
Interest income |
62,967 |
11,526 |
||||
Other finance expenses |
(206,081) |
(128,112) |
||||
Other income (expenses), net |
808 |
86,966 |
||||
Total other expenses, net |
(142,306) |
(29,620) |
||||
(LOSS) INCOME BEFORE INCOME TAXES |
(2,710,797) |
274,147 |
||||
PROVISION (BENEFIT) FOR INCOME TAXES |
||||||
Current |
11,803 |
298,935 |
||||
Deferred |
380,302 |
(150,615) |
||||
Total income tax provision |
392,105 |
148,320 |
||||
NET (LOSS) INCOME |
(3,102,902) |
125,827 |
||||
Less: Net loss attributable to noncontrolling interests |
(645,716) |
(349,519) |
||||
NET (LOSS) INCOME ATTRIBUTABLE TO PUHUI WEALTH |
$ |
(2,457,186) |
$ |
475,346 |
||
NET (LOSS) INCOME |
$ |
(3,102,902) |
$ |
125,827 |
||
OTHER COMPREHENSIVE INCOME (LOSS) |
||||||
Foreign currency translation adjustment |
(271,194) |
(34,199) |
||||
COMPREHENSIVE (LOSS) INCOME |
$ |
(3,374,096) |
$ |
91,628 |
||
Less: Comprehensive loss attributable to noncontrolling interests |
(672,272) |
(350,314) |
||||
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO PUHUI WELATH |
$ |
(2,701,824) |
$ |
441,942 |
||
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES |
||||||
Basic and diluted |
10,793,017 |
10,000,000 |
||||
EARNINGS PER SHARE |
||||||
Basic and diluted |
$ |
(0.23) |
$ |
0.05 |
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
June 30, |
June 30, |
||||||
2019 |
2018 |
||||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash |
$ |
2,004,625 |
$ |
4,809,040 |
|||
Short-term investments |
706,226 |
1,101,317 |
|||||
Accounts receivable |
1,853,041 |
1,673,764 |
|||||
Accounts receivable - related parties |
1,013,135 |
1,051,718 |
|||||
Other receivables |
213,252 |
206,831 |
|||||
Loans receivable - related party |
1,647,858 |
- |
|||||
Prepaid expenses |
1,278,133 |
265,138 |
|||||
Deferred offering costs |
- |
700,094 |
|||||
Total current assets |
8,716,270 |
9,807,902 |
|||||
PROPERTY AND EQUIPMENT, NET |
223,385 |
135,682 |
|||||
OTHER ASSETS |
|||||||
Long-term security deposits |
384,860 |
- |
|||||
Acquisition prepayment |
2,447,259 |
416,761 |
|||||
Intangible asset, net |
10,241 |
- |
|||||
Long-term prepaid expenses |
2,247,872 |
- |
|||||
Deferred tax assets, net |
347,195 |
782,911 |
|||||
Total other assets |
5,437,427 |
1,199,672 |
|||||
Total assets |
$ |
14,377,082 |
$ |
11,143,256 |
|||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Customer deposits |
$ |
- |
$ |
250,529 |
|||
Other payables and accrued liabilities |
808,328 |
677,215 |
|||||
Other payables - related party |
- |
196,300 |
|||||
Deferred revenues |
227,622 |
303,637 |
|||||
Taxes payable |
10,512 |
356,440 |
|||||
Current portion of long-term debt |
315,983 |
302,001 |
|||||
Total current liabilities |
1,362,445 |
2,086,122 |
|||||
LONG-TERM DEBT |
1,206,565 |
1,208,003 |
|||||
Total liabilities |
2,569,010 |
3,294,125 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
SHAREHOLDERS' EQUITY |
|||||||
Preferred shares, $0.001 par value, 1,000,000 shares authorized, 0 shares issued and |
- |
- |
|||||
outstanding as of June 30, 2019 and June 30, 2018 |
|||||||
Ordinary shares, $0.001 par value, 49,000,000 shares authorized, |
11,508 |
10,000 |
|||||
11,507,558 and 10,000,000 shares issued and outstanding |
|||||||
as of June 30, 2019 and June 30, 2018, respectively |
|||||||
Additional paid-in capital |
21,911,045 |
14,613,119 |
|||||
Accumulated deficit |
(9,221,341) |
(6,764,155) |
|||||
Accumulated other comprehensive loss |
(251,958) |
(7,320) |
|||||
Total shareholders' equity attributable to controlling shareholders |
12,449,254 |
7,851,644 |
|||||
Noncontrolling interests |
(641,182) |
(2,513) |
|||||
Total shareholders' equity |
11,808,072 |
7,849,131 |
|||||
Total liabilities and shareholders' equity |
$ |
14,377,082 |
$ |
11,143,256 |
PUHUI WEALTH INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
For the Years Ended June 30, |
||||||||
2019 |
2018 |
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
Net (loss) income |
$ |
(3,102,902) |
$ |
125,827 |
||||
Adjustments to reconcile net (loss) income to net cash (used in) |
||||||||
provided by operating activities: |
||||||||
Depreciation and amortization |
135,939 |
78,514 |
||||||
Loss on disposal of property and equipment |
78 |
280 |
||||||
Impairment loss on equity security |
5,628 |
78,984 |
||||||
Loss from disposal of subsidiaries |
32,641 |
- |
||||||
Deferred tax provision (benefits) |
380,302 |
(150,615) |
||||||
Change in operating assets and liabilities |
||||||||
Accounts receivable |
(242,674) |
(1,332,431) |
||||||
Accounts receivable - related parties |
- |
(1,070,648) |
||||||
Other receivables |
(402,174) |
114,479 |
||||||
Prepaid expenses |
(932,928) |
(139,496) |
||||||
Long-term prepaid expenses |
(2,248,912) |
- |
||||||
Customer deposit received (returned) |
(233,541) |
968,426 |
||||||
Other payables and accrued liabilities |
156,724 |
177,776 |
||||||
Other payables - related party |
(190,666) |
199,834 |
||||||
Deferred revenues |
(65,413) |
309,102 |
||||||
Taxes payable |
(426,597) |
319,696 |
||||||
Net cash (used in) provided by operating activities |
(7,134,495) |
(320,272) |
||||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
Proceeds from sales of short-term invesements |
365,462 |
- |
||||||
Purchases of short-term investments |
(24,347) |
(1,913,794) |
||||||
Loans receivable to related party |
(1,661,514) |
- |
||||||
Acquisition prepayment |
(2,042,460) |
- |
||||||
Purchases of property and equipment |
(159,514) |
(132,998) |
||||||
Proceeds from sale of property and equipment |
990 |
3,536 |
||||||
Purchase of intangible asset |
(12,644) |
- |
||||||
Net cash (used in) provided by investing activities |
(3,534,027) |
(2,043,256) |
||||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
Payment of deferred offerring costs |
- |
(712,696) |
||||||
Payment of acquisition deposit |
- |
(424,263) |
||||||
Capital contribution from shareholders |
- |
6,469,679 |
||||||
Short-term advances made to related parties |
- |
- |
||||||
Short-term advances from related parties |
- |
- |
||||||
Proceeds from issuance of ordinary shares through IPO, net |
8,032,912 |
- |
||||||
Proceeds from long-term debt |
- |
1,537,184 |
||||||
Net cash provided by (used in) financing activities |
8,032,912 |
6,869,904 |
||||||
EFFECT OF EXCHANGE RATE ON CASH |
(168,805) |
(19,854) |
||||||
(DECREASE) INCREASE IN CASH |
(2,804,415) |
4,486,522 |
||||||
CASH, beginning of year |
4,809,040 |
322,518 |
||||||
CASH, end of year |
$ |
2,004,625 |
$ |
4,809,040 |
||||
SUPPLEMENTAL CASH FLOW INFORMATION: |
||||||||
Cash paid for income tax |
$ |
240,508 |
$ |
27,722 |
||||
Cash paid for interest |
$ |
197,999 |
$ |
- |
||||
NON-CASH TRANSACTIONS OF FINANCING ACTIVITIES |
||||||||
Fair value adjustment offsetting customer deposits with short-term investment |
$ |
- |
$ |
713,568 |
||||
Prepaid IPO costs to be net against IPO proceeds |
$ |
733,478 |
$ |
- |