SHANGHAI, May 8, 2017 /PRNewswire/ -- Jupai Holdings Limited ("Jupai" or the "Company") (NYSE: JP), a leading third-party wealth management service provider, focusing on distributing wealth management products and providing quality product advisory services to high-net-worth individuals in China, today announced its unaudited financial results for the first quarter ended March 31, 2017.
Effective July 1, 2016, Jupai changed its reporting currency from the U.S. dollars to Renminbi. The aligning of the reporting currency with the underlying operations better reflects the Company's results of operations for each period, and reduces the impact that the increased volatility of the Renminbi to U.S. dollars exchange rate will have on the Company's reported operating results. In this announcement, the unaudited financial results for the first quarter ended March 31, 2017, are stated in Renminbi. This release contains translations of certain Renminbi amounts into U.S. dollars for convenience. Prior period financial results have been recast into the new reporting currency.
FIRST QUARTER 2017 FINANCIAL HIGHLIGHTS
| (RMB '000, except percentages) |
Q1 2016 |
Q1 2016 % |
Q1 2017 |
Q1 2017 % |
YoY Change % |
||||
| One-time commissions |
154,974 |
69.1% |
234,759 |
63.7% |
51.5% |
||||
| Recurring management fees |
36,632 |
16.4% |
67,617 |
18.3% |
84.6% |
||||
| Recurring service fees |
32,404 |
14.5% |
26,225 |
7.1% |
-19.1% |
||||
| Other service fees |
- |
- |
40,139 |
10.9% |
100.0% |
||||
| Total net revenues |
224,010 |
100.0% |
368,740 |
100.0% |
64.6% |
| [1] The U.S. dollars (US$) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the reader. The conversion of Renminbi (RMB) into U.S. dollars (US$) in this press release is based on the noon buying rate on March 31, 2017, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System, which was RMB6.8832 to US$1.00. The percentages stated in this press release are calculated based on the Renminbi amounts. |
| [2] Jupai's non-GAAP financial measures are derived from adjusting the corresponding GAAP financial measures by excluding the effects of share-based compensation and amortization of intangible assets resulted from business acquisitions. |
FIRST QUARTER 2017 OPERATIONAL UPDATES
| Wealth management products distributed by the Company - breakdown by product type |
|||||
| Three months ended |
|||||
| March 31, 2016 |
March 31, 2017 |
||||
| Product type |
(RMB in millions, except percentages) |
||||
| Fixed income products |
5,203 |
48% |
11,218 |
79% |
|
| Private equity products |
4,059 |
37% |
2,332 |
16% |
|
| Secondary market equity fund products |
1,262 |
12% |
20 |
1% |
|
| Other products |
308 |
3% |
628 |
4% |
|
| All products |
10,832 |
100% |
14,198 |
100% |
|
| Assets under management – breakdown by product type |
|||||
| As of |
|||||
| March 31, 2016 |
March 31, 2017 |
||||
| Product type |
(RMB in millions, except percentages) |
||||
| Fixed income products |
8,627 |
40% |
22,856 |
53% |
|
| Private equity products |
10,870 |
51% |
16,774 |
39% |
|
| Secondary market equity fund products |
1,464 |
7% |
2,997 |
7% |
|
| Other products |
475 |
2% |
451 |
1% |
|
| All products |
21,436 |
100% |
43,078 |
100% |
|
|
[3] "Active clients" for a given period refers to clients who purchase wealth management products distributed by Jupai at least once during that given period. |
| [4] "Assets under management" by Jupai refers to the amount of capital contributions made by the investors to the fund without adjustment for any gain or loss from investment. |
"We delivered a set of solid results for the first quarter of 2017, with continued rapid growth on both our top and bottom lines," said Mr. Jianda Ni, Jupai's co-chairman of the board and chief executive officer. "Our net revenues for the quarter reached another record high of RMB368.7 million, up 64.6% year-on-year, and our net income attributable to ordinary shareholders rose by an impressive 242.3% year-on-year to RMB90.7 million."
Mr. Ni continued, "Our in-depth industry knowledge and big data analytics capabilities through our relationships with E-House, a leading real estate service company, and CRIC, a top real estate information database, enable us to identify quality underlying assets and offer fixed-income products with attractive risk-return profiles, a crucial advantage as investors in China have become more conservative over the past quarters. In the first quarter of 2017, we increased the aggregate value of products distributed by us to RMB14.2 billion, a 31.1% increase year-on-year. Additionally, our total assets under management increased to RMB43.1 billion as of March 31, 2017, a 101.0% increase year-on-year."
Mr. Tianxiang Hu, Jupai's co-chairman of the board, said, "Looking forward, as we further strengthen our core competence within the fixed income product category, we will look to further expand our product range in order to better meet investors' asset allocation needs. While we have adopted a prudent approach towards overseas expansion, we will continue to look for appropriate opportunities to build our business outside of China."
Ms. Min Liu, Jupai's chief financial officer, said, "We continued to perform strongly in the first quarter of 2017, with our net revenues substantially surpassing management guidance. Our operating margin for the quarter rose to 34%, up from 14% in the same period last year, as we implemented effective cost control measures. We remain confident about the outlook for our bottom line, as we further enhance our operating efficiency, optimize revenue structure, and expand our business scale."
FIRST QUARTER 2017 FINANCIAL RESULTS
Net Revenues
Net revenues for the first quarter of 2017 were RMB368.7 million (US$53.6 million), a 64.6% increase from the corresponding period in 2016, primarily due to increases in one-time commissions, recurring management fees and other service fees.
Operating Costs and Expenses
Operating costs and expenses for the first quarter of 2017 were RMB243.5 million (US$35.4 million), an increase of 26.4% from the corresponding period in 2016.
Operating margin for the first quarter of 2017 was 34.0%, compared to 14.0% for the corresponding period in 2016.
Income tax expenses for the first quarter of 2017 were RMB29.6 million (US$4.3 million), a 237.4% increase from the corresponding period in 2016. The increase was primarily due to an increase in taxable income.
Net Income
Balance Sheet and Cash Flow
As of March 31, 2017, the Company had RMB1,208.9 million (US$175.6 million) in cash and cash equivalents, compared to RMB1,123.2 million as of December 31, 2016.
Net cash provided by operating activities during the first quarter of 2017 was RMB220.3 million (US$32.0 million).
Net cash used in investing activities during the first quarter of 2017 was RMB14.6 million (US$2.1 million).
Net cash used in financing activities during the first quarter of 2017 was RMB120.0 million (US$17.4 million).
BUSINESS OUTLOOK
The Company estimates that its net revenues for the second quarter of 2017 will be in the range of RMB367 million to RMB392 million, an increase of 50% to 60% compared to the same period in 2016. This forecast reflects the Company's current and preliminary view, which is subject to change.
CONFERENCE CALL
Jupai's management will host an earnings conference call on May 8, 2017 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
| U.S./International: |
+1-855-298-3404 or +1-631-514-2526 |
| Hong Kong: |
800-905-927 or +852-5808-3202 |
| Mainland China: |
400-120-0539 |
| Singapore |
800-616-3222 or +65-3157-9230 |
| Passcode: |
2773057 |
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following numbers until May 15, 2017:
| U.S./International: |
+1-866-846-0868 |
| Hong Kong: |
800-966-697 |
| Mainland China: |
400-184-2240 |
| Singapore |
800-616-2127 |
| Passcode: |
2773057 |
Additionally, a live and archived webcast will be available at http://jupai.investorroom.com.
DISCUSSION OF NON-GAAP FINANCIAL MEASURES
In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation and amortization of intangible assets related to acquisition. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures as set forth in the table captioned "Reconciliation of GAAP to Non-GAAP Results" below.
The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from, and therefore may not be comparable to, similarly titled measures used by other companies.
When evaluating the Company's operating performance in the periods presented, management reviewed non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation and amortization of intangible assets related to acquisition to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income attributable to ordinary shareholders, non-GAAP net income attributable to ordinary shares per diluted ADS and non-GAAP net margin attributable to ordinary shareholders provides important supplemental information to investors regarding financial and business trends relating to the Company's financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options, and amortization of intangible assets related to acquisition in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.
ABOUT JUPAI HOLDINGS LIMITED
Jupai Holdings Limited ("Jupai") (NYSE: JP) is a leading third-party wealth management service provider focusing on distributing wealth management products and providing quality product advisory services to high-net-worth individuals in China. Jupai's comprehensive and personalized client service and broad range of carefully selected third-party and self-developed products have made it a trusted brand among its clients. Jupai maintains extensive and targeted coverage of China's high-net-worth population.
For more information, please visit http://jupai.investorroom.com.
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. 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, the business outlook and quotations from management in this announcement, as well as Jupai's strategic and operational plans, contain forward-looking statements. Jupai may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, 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. Statements that are not historical facts, including statements about Jupai's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the goals and strategies of the Company and the Company's ability to manage its growth and implement its business strategies; future business development, financial condition and results of operations of the Company; condition of the wealth management market in China and internationally; the demand for and market acceptance of the products the Company distributes; the Company's ability to maintain and further grow its active high-net-worth client base and maintain or increase the amount of investment by clients; developments in relevant government policies and regulations relating to the Company's industry and the Company's ability to comply with those policies and regulations; the Company's ability to attract and retain quality employees; the Company's ability to adapt to potential uncertainties in China's real estate industry and stay abreast of market trends and technological advances; the results of the Company's investments in research and development to enhance its product choices and service offerings; general economic and business conditions in China; the result of the integration of E-House Capital into the Company; and the Company's ability to protect its reputation and enhance its brand recognition. Further information regarding these and other risks is included in Jupai's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and Jupai does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under applicable law.
Contacts:
Jupai Holdings Limited
Harry He
Director of Investor Relations
Jupai Holdings Limited
Phone: +86 (21) 6026 9129
Email: ir@jpinvestment.cn
Philip Lisio
The Foote Group
Phone: +86 (10) 8429 9544
Email: Jupai-IR@thefootegroup.com
— FINANCIAL AND OPERATIONAL TABLES FOLLOW —
| Jupai Holdings Limited |
|||||
| Unaudited Condensed Consolidated Balance Sheets |
|||||
| (In RMB) |
|||||
| As of |
|||||
| December 31, |
March 31, |
March 31, |
|||
| 2016 |
2017 |
2017 |
|||
| RMB |
RMB |
USD |
|||
| Assets |
|||||
| Current assets: |
|||||
| Cash and cash equivalents |
1,123,166,156 |
1,208,941,438 |
175,636,541 |
||
| Short-term investments |
25,210,000 |
25,178,000 |
3,657,892 |
||
| Accounts receivable |
52,111,944 |
24,968,646 |
3,627,476 |
||
| Other receivables |
71,064,287 |
53,399,199 |
7,757,903 |
||
| Amounts due from related parties |
133,560,483 |
125,328,343 |
18,207,860 |
||
| Deferred tax assets — current[5] |
55,791,373 |
- |
- |
||
| Investments at cost method — current |
- |
5,200,000 |
755,463 |
||
| Other current assets |
12,551,186 |
12,738,675 |
1,850,691 |
||
| Total current assets |
1,473,455,429 |
1,455,754,301 |
211,493,826 |
||
| Investments at cost method — non-current |
70,450,000 |
68,250,000 |
9,915,446 |
||
| Investment in affiliates |
85,830,444 |
79,519,466 |
11,552,689 |
||
| Advanced payment for acquisition |
77,560,000 |
77,560,000 |
11,268,015 |
||
| Property and equipment, net |
37,199,812 |
39,651,702 |
5,760,649 |
||
| Intangible assets |
83,072,545 |
82,734,130 |
12,019,719 |
||
| Goodwill |
277,752,765 |
276,241,624 |
40,132,731 |
||
| Long-term prepayment |
6,261,152 |
8,701,430 |
1,264,155 |
||
| Other non-current assets |
7,977,534 |
17,787,829 |
2,584,238 |
||
| Deferred tax assets — non-current |
8,494,738 |
64,286,111 |
9,339,569 |
||
| Total Assets |
2,128,054,419 |
2,170,486,593 |
315,331,037 |
||
| Liabilities and Equity |
|||||
| Current liabilities: |
|||||
| Accrued payroll and welfare expenses |
101,864,007 |
94,623,680 |
13,747,048 |
||
| Income tax payable |
138,131,812 |
147,188,945 |
21,383,796 |
||
| Other tax payable |
58,189,283 |
57,891,990 |
8,410,621 |
||
| Dividend payable |
10,160,503 |
- |
- |
||
| Amounts due to related parties-current |
6,118,678 |
5,606,900 |
814,578 |
||
| Deferred revenue from related parties |
121,644,250 |
170,907,371 |
24,829,639 |
||
| Deferred revenues |
36,432,195 |
36,174,153 |
5,255,427 |
||
| Other current liabilities |
10,397,008 |
9,198,047 |
1,336,304 |
||
| Total current liabilities |
482,937,736 |
521,591,086 |
75,777,413 |
||
| Deferred revenue — non-current from related parties |
75,413,617 |
99,338,586 |
14,432,036 |
||
| Deferred revenue — non-current |
5,677,905 |
2,392,513 |
347,587 |
||
| Non-current uncertain tax position liabilities |
5,938,816 |
- |
- |
||
| Deferred tax liabilities— non-current |
9,815,595 |
8,566,873 |
1,244,606 |
||
| Total Liabilities |
579,783,669 |
631,889,058 |
91,801,642 |
||
| Equity |
1,548,270,750 |
1,538,597,535 |
223,529,395 |
||
| Total Liabilities and Total Shareholders' Equity |
2,128,054,419 |
2,170,486,593 |
315,331,037 |
||
| [5] Jupai adopted ASU 2015-17 and therefore, deferred tax assets and liabilities are classified as non-current assets and liabilities starting 2017. |
|||||
| Jupai Holdings Limited |
|||||||
| Unaudited Condensed Consolidated Income Statements |
|||||||
| (In RMB, except for ADS data, per ADS data and percentages) |
|||||||
| Three months ended |
|||||||
| March 31, |
March 31, |
March 31, |
YoY |
||||
| 2016 |
2017 |
2017 |
Change % |
||||
| RMB |
RMB |
USD |
|||||
| Revenues |
|||||||
| Third party revenues |
85,918,313 |
101,873,393 |
14,800,295 |
18.6% |
|||
| Related party revenues |
140,719,449 |
268,841,531 |
39,057,638 |
91.0% |
|||
| Total revenues |
226,637,762 |
370,714,924 |
53,857,933 |
63.6% |
|||
| Business taxes and related surcharges |
(2,628,257) |
(1,974,544) |
(286,864) |
-24.9% |
|||
| Net revenues |
224,009,505 |
368,740,380 |
53,571,069 |
64.6% |
|||
| Operating costs and expenses: |
|||||||
| Cost of revenues |
(111,493,031) |
(134,752,532) |
(19,577,018) |
20.9% |
|||
| Selling expenses |
(52,414,816) |
(59,519,090) |
(8,647,009) |
13.6% |
|||
| General and administrative expenses |
(31,883,479) |
(52,621,880) |
(7,644,973) |
65.0% |
|||
| Other operating income — government subsidies |
3,151,462 |
3,408,212 |
495,149 |
8.1% |
|||
| Total operating cost and expenses |
(192,639,864) |
(243,485,290) |
(35,373,851) |
26.4% |
|||
| Income from operations |
31,369,641 |
125,255,090 |
18,197,218 |
299.3% |
|||
| Interest income |
708,155 |
7,503,409 |
1,090,105 |
959.6% |
|||
| Investment income |
3,159,792 |
2,041,799 |
296,635 |
-35.4% |
|||
| Other loss |
298,453 |
23,223 |
3,374 |
-92.2% |
|||
| Total other income |
4,166,400 |
9,568,431 |
1,390,114 |
129.7% |
|||
| Income before taxes and income from equity in affiliates |
35,536,041 |
134,823,521 |
19,587,332 |
279.4% |
|||
| Income tax expense |
(8,782,286) |
(29,635,028) |
(4,305,415) |
237.4% |
|||
| (Loss) from equity in affiliates |
(253,461) |
(5,716,843) |
(830,550) |
2,155.5% |
|||
| Net income |
26,500,294 |
99,471,650 |
14,451,367 |
275.4% |
|||
| Net income attributable to non-controlling interests |
(7,410) |
(8,778,757) |
(1,275,389) |
118,371.8% |
|||
| Net income attributable to ordinary shareholders |
26,492,884 |
90,692,893 |
13,175,978 |
242.3% |
|||
| Net income per ADS: |
|||||||
| Basic |
0.83 |
2.81 |
0.41 |
238.6% |
|||
| Diluted |
0.80 |
2.69 |
0.39 |
236.3% |
|||
| Weighted average number of ADSs used in computation: |
|||||||
| Basic |
31,941,938 |
32,303,977 |
32,303,977 |
||||
| Diluted |
33,238,901 |
33,732,924 |
33,732,924 |
||||
| Jupai Holdings Limited |
|||||||
| Unaudited Condensed Comprehensive Income Statements |
|||||||
| (In RMB) |
|||||||
| Three months ended |
|||||||
| March 31, |
March 31, |
March 31, |
Change |
||||
| 2016 |
2017 |
2017 |
|||||
| RMB |
RMB |
USD |
|||||
| Net income |
26,500,294 |
99,471,650 |
14,451,367 |
275% |
|||
| Other comprehensive income, net of tax: |
|||||||
| Change in cumulative foreign currency translation adjustment |
(3,907,463) |
(6,186,464) |
(898,777) |
58% |
|||
| Other comprehensive income |
(3,907,463) |
(6,186,464) |
(898,777) |
58% |
|||
| Comprehensive income |
22,592,831 |
93,285,186 |
13,552,590 |
313% |
|||
| Less: Comprehensive income attributable to non-controlling interests |
7,410 |
8,778,757 |
1,275,389 |
118,372% |
|||
| Comprehensive income attributable to ordinary shareholders |
22,585,421 |
84,506,429 |
12,277,201 |
274% |
|||
| Jupai Holdings Limited |
|||||
| Reconciliation of GAAP to Non-GAAP Results |
|||||
| (In RMB, except for ADS data and percentages) |
|||||
| Three months ended |
|||||
| March 31, |
March 31, |
Change |
|||
| 2016 |
2017 |
||||
| RMB |
RMB |
||||
| Net margin attributable to ordinary shareholders |
11.8% |
24.6% |
|||
| Adjusted net margin attributable to ordinary shareholders (non-GAAP) |
15.6% |
27.4% |
|||
| Net income attributable to ordinary shareholders |
26,492,884 |
90,692,893 |
242.3% |
||
| Adjustment for share-based compensation |
5,002,496 |
6,886,881 |
37.7% |
||
| Adjustment for amortization of intangible assets related to acquisition |
3,366,836 |
3,595,958 |
6.8% |
||
| Adjusted net income attributable to ordinary shares(non-GAAP) |
34,862,216 |
101,175,732 |
190.2% |
||
| Net income attributable to ordinary shares per ADS, diluted |
0.80 |
2.69 |
236.3% |
||
| Adjusted net income attributable to ordinary shares per ADS, diluted (non-GAAP) |
1.05 |
3.00 |
185.7% |
||
| Weighted average number of ADSs used in computation: |
|||||
| Diluted |
33,238,901 |
33,732,924 |
1.5% |
||
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