SHANGHAI, May 28, 2020 /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, 2020.
FIRST QUARTER 2020 FINANCIAL HIGHLIGHTS
(RMB '000, except percentages) |
Q1 2019 |
Q1 2019 % |
Q1 2020 |
Q1 2020 % |
YoY Change % |
||||
One-time commissions |
58,630 |
20.9% |
39,496 |
40.9% |
-32.6% |
||||
Recurring management fees |
192,221 |
68.4% |
25,293 |
26.2% |
-86.8% |
||||
Recurring service fees |
16,291 |
5.8% |
31,798 |
32.9% |
95.2% |
||||
Other service fees |
13,904 |
4.9% |
- |
- |
-100.0% |
||||
Total net revenues |
281,046 |
100.0% |
96,587 |
100.0% |
-65.6% |
FIRST QUARTER 2020 OPERATIONAL UPDATES
Wealth management products distributed by the Company - breakdown by product type |
|||||
Three months ended |
|||||
March 31, 2019 |
March 31, 2020 |
||||
Product type |
(RMB in millions, except percentages) |
||||
Fixed income products |
1,907 |
68% |
971 |
67% |
|
Private equity products |
586 |
21% |
212 |
15% |
|
Secondary market equity fund products |
52 |
2% |
206 |
14% |
|
Other products |
238 |
9% |
59 |
4% |
|
All products |
2,783 |
100% |
1,448 |
100% |
|
Assets under management – breakdown by product type |
|||||
As of |
|||||
March 31, 2019 |
March 31, 2020 |
||||
Product type |
(RMB in millions, except percentages) |
||||
Fixed income products |
18,055 |
34% |
13,048 |
33% |
|
Private equity products |
32,239 |
61% |
24,684 |
62% |
|
Secondary market equity fund products |
1,601 |
3% |
994 |
2% |
|
Other products |
1,079 |
2% |
1,090 |
3% |
|
All products |
52,974 |
100% |
39,816 |
100% |
|
[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, 2020, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System, which was RMB7.0808 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. |
[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" or "AUM" of Jupai refers to the amount of capital contributions made by investors to the funds managed by the Company, for which the Company is entitled to receive management fees. The amount of AUM of Jupai is recorded and carried based on the historical cost of the contributed assets instead of fair market value of assets for almost all AUM of Jupai. For assets denominated in currencies other than Renminbi, the AUM are translated into Renminbi upon their contribution, without interim value adjustments solely due to changes in foreign exchange rates. As a result, Jupai's management fees for almost all its AUM are calculated based on the historical cost balance of the AUM. |
"Our cost control measures helped to drive improved bottom line results compared to the first quarter of 2019, even as our top-line performance remained under pressure due to the COVID-19 outbreak," said Mr. Jianda Ni, Jupai's chairman of the board and chief executive officer. "We remain confident for the future prospects for Jupai and China's wealth management industry, which has been reflected in the US$10 million share repurchase program we announced in late February 2020. We will continue to focus on our core strategies: improving our cost controls and increasing operating efficiency, enhancing our product portfolio, optimizing our risk control system, improving project transparency and seeking potential overseas growth opportunities."
Ms. Min Liu, Jupai's chief financial officer, said, "Reflecting our continuous efforts to streamline costs, Jupai achieved another sequential reduction in operating expenses in the first quarter of 2020. Our total operating cost and expenses declined by 35% and cost of revenues were down by 32%. We expect to continue improving our bottom-line in the quarters ahead as we further enhance operating efficiencies."
FIRST QUARTER 2020 FINANCIAL RESULTS
Net Revenues
Net revenues for the first quarter of 2020 were RMB96.6 million (US$13.6 million), a 65.6% decrease from the corresponding period in 2019, primarily due to decreases in one-time commissions, recurring management fees and other service fees.
Operating Costs and Expenses
Operating costs and expenses for the first quarter of 2020 were RMB108.7 million (US$15.4 million), a decrease of 62.9% from the corresponding period in 2019.
Operating margin for the first quarter of 2020 was -12.6%, as compared to -4.2% for the corresponding period in 2019.
Income tax expenses for the first quarter of 2020 were RMB12.7 million (US$1.8 million), a 16.6% decrease from the corresponding period in 2019, primarily due to a decrease in taxable income.
Net Loss
- Net Loss
- Adjusted Net Loss (non-GAAP)
Repurchase of Shares
As of May 22, 2020, we had repurchased 292,112 ADSs as part of the share repurchase program of up to US$10 million announced in February 2020, at a total cost of US$316,453, inclusive of transaction charges.
Balance Sheet and Cash Flow
As of March 31, 2020, the Company had RMB682.0 million (US$96.3 million) in cash, cash equivalents and restricted cash, as compared to RMB712.3 million as of December 31, 2019.
Net cash used in operating activities during the first quarter of 2020 was RMB21.2 million (US$3.0 million).
Net cash used in investing activities during the first quarter of 2020 was RMB2.0 million (US$0.3 million).
Net cash used in financing activities during the first quarter of 2020 was RMB7.1 million (US$1.0 million).
CONFERENCE CALL
Jupai's management will host an earnings conference call on May 28, 2020 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong time).
Please register in advance for the conference call using the link provided below. Upon registering, you will be provided with a calendar invite with participant dial-in numbers, passcode, and a unique access pin by email. To join the conference, simply dial the number you receive after preregistering, enter the passcode followed by your pin, and you will join the conference instantly.
PRE-REGISTER LINK: https://s1.c-conf.com/diamondpass/10007204-invite.html
A replay of the conference call may be accessed by phone at the following number until June 4, 2020:
U.S./Canada: |
+1-855-833-1031 |
Hong Kong: |
800-930-639 |
Singapore: |
800-101-3223 |
Passcode: |
10007204 |
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, share options and amortization of intangible assets related to acquisition. 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; 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.
-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
Jupai Holdings Limited |
|||||
Unaudited Condensed Consolidated Balance Sheets |
|||||
(In RMB, except for USD data) |
|||||
As of |
|||||
December 31, |
March 31, |
March 31, |
|||
2019 |
2020 |
2020 |
|||
RMB |
RMB |
USD |
|||
Assets |
|||||
Current assets: |
|||||
Cash and cash equivalents |
711,205,698 |
680,910,281 |
96,162,903 |
||
Restricted cash |
1,100,000 |
1,100,000 |
155,350 |
||
Accounts receivable |
- |
382,252 |
53,984 |
||
Other receivables |
14,125,535 |
16,388,386 |
2,314,482 |
||
Amounts due from related parties |
95,193,003 |
91,338,050 |
12,899,397 |
||
Other current assets |
4,984,541 |
17,361,551 |
2,451,919 |
||
Total current assets |
826,608,777 |
807,480,520 |
114,038,035 |
||
Long-term investments |
228,950,000 |
228,950,000 |
32,333,917 |
||
Investment in affiliates |
107,541,000 |
105,228,475 |
14,861,100 |
||
Amounts due from related parties -- non-current |
229,117,743 |
229,246,112 |
32,375,736 |
||
Property and equipment, net |
27,834,760 |
25,575,682 |
3,611,976 |
||
Intangible assets, net |
38,250,479 |
37,311,751 |
5,269,426 |
||
Other non-current assets |
17,886,020 |
17,812,892 |
2,515,662 |
||
Right-of-use assets |
68,950,101 |
55,520,638 |
7,841,012 |
||
Deferred tax assets |
4,608,063 |
4,369,259 |
617,057 |
||
Total Assets |
1,549,746,943 |
1,511,495,329 |
213,463,921 |
||
Liabilities and Equity |
|||||
Current liabilities: |
|||||
Accrued payroll and welfare expenses |
58,318,063 |
50,833,167 |
7,179,015 |
||
Income tax payable |
82,800,208 |
93,128,174 |
13,152,211 |
||
Other tax payable |
695,081 |
9,109,045 |
1,286,443 |
||
Amounts due to related parties -- current |
19,439,664 |
19,217,717 |
2,714,060 |
||
Deferred revenue from related parties |
42,053,959 |
32,246,331 |
4,554,052 |
||
Deferred revenue |
35,674,503 |
40,621,030 |
5,736,785 |
||
Other current liabilities |
78,201,072 |
62,554,307 |
8,834,356 |
||
Total current liabilities |
317,182,550 |
307,709,771 |
43,456,922 |
||
Deferred revenue -- non-current from related parties |
4,917,845 |
2,497,036 |
352,649 |
||
Deferred revenue -- non-current |
311,651 |
259,151 |
36,599 |
||
Operating Lease Liabilities -- non-current |
28,518,789 |
20,982,766 |
2,963,333 |
||
Total Liabilities |
350,930,835 |
331,448,724 |
46,809,503 |
||
Equity |
1,198,816,108 |
1,180,046,605 |
166,654,418 |
||
Total Liabilities and Total Shareholders' Equity |
1,549,746,943 |
1,511,495,329 |
213,463,921 |
||
Jupai Holdings Limited |
|||||
Unaudited Condensed Consolidated Income Statements |
|||||
(In RMB, except for USD data and ADS data) |
|||||
Three months ended |
|||||
March 31, |
March 31, |
March 31, |
|||
2019 |
2020 |
2020 |
|||
RMB |
RMB |
USD |
|||
Revenues |
|||||
Third party revenues |
76,387,330 |
62,333,182 |
8,803,127 |
||
Related party revenues |
205,826,865 |
34,406,566 |
4,859,135 |
||
Total revenues |
282,214,195 |
96,739,748 |
13,662,262 |
||
Taxes and surcharges |
(1,167,813) |
(152,482) |
(21,534) |
||
Net revenues |
281,046,382 |
96,587,266 |
13,640,728 |
||
Operating costs and expenses: |
|||||
Cost of revenues |
(175,877,670) |
(61,996,617) |
(8,755,595) |
||
Selling expenses |
(54,239,469) |
(19,923,722) |
(2,813,767) |
||
General and administrative expenses |
(62,759,846) |
(35,348,081) |
(4,992,103) |
||
Other operating income -- government subsidies |
- |
8,549,159 |
1,207,372 |
||
Total operating cost and expenses |
(292,876,985) |
(108,719,261) |
(15,354,093) |
||
Loss from operations |
(11,830,603) |
(12,131,995) |
(1,713,365) |
||
Interest income |
1,469,415 |
1,180,005 |
166,649 |
||
Investment income |
1,844,495 |
974,705 |
137,655 |
||
Other income |
2,070,292 |
384,112 |
54,246 |
||
Total other income |
5,384,202 |
2,538,822 |
358,550 |
||
Loss before taxes and loss from equity in affiliates |
(6,446,401) |
(9,593,173) |
(1,354,815) |
||
Income tax expense |
(15,194,152) |
(12,670,219) |
(1,789,377) |
||
Loss from equity in affiliates |
(1,995,730) |
(2,312,525) |
(326,591) |
||
Net loss |
(23,636,283) |
(24,575,917) |
(3,470,783) |
||
Net (income) loss attributable to non-controlling interests |
(1,956,073) |
4,682,921 |
661,355 |
||
Net loss attributable to ordinary shareholders |
(25,592,356) |
(19,892,996) |
(2,809,428) |
||
Net loss per ADS: |
|||||
Basic |
(0.76) |
(0.59) |
(0.08) |
||
Diluted |
(0.76) |
(0.59) |
(0.08) |
||
Weighted average number of ADSs used in computation: |
|||||
Basic |
33,594,914 |
33,682,030 |
33,682,030 |
||
Diluted |
33,594,914 |
33,682,030 |
33,682,030 |
||
Jupai Holdings Limited |
|||||
Unaudited Condensed Comprehensive Income Statements |
|||||
(In RMB, except for USD data) |
|||||
Three months ended |
|||||
March 31, |
March 31, |
March 31, |
|||
2019 |
2020 |
2020 |
|||
RMB |
RMB |
USD |
|||
Net loss |
(23,636,283) |
(24,575,917) |
(3,470,783) |
||
Other comprehensive loss, net of tax: |
|||||
Change in cumulative foreign currency translation adjustment |
(4,498,736) |
3,750,763 |
529,709 |
||
Other comprehensive (loss) income |
(4,498,736) |
3,750,763 |
529,709 |
||
Comprehensive loss |
(28,135,019) |
(20,825,154) |
(2,941,074) |
||
Less: Comprehensive income (loss) attributable to non-controlling |
1,530,331 |
(4,720,144) |
(666,612) |
||
Comprehensive loss attributable to ordinary shareholders |
(29,665,350) |
(16,105,010) |
(2,274,462) |
||
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, |
||
2019 |
2020 |
||
RMB |
RMB |
||
Net margin attributable to ordinary shareholders |
-9.1% |
-20.6% |
|
Adjusted net margin attributable to ordinary shareholders (non-GAAP) |
-8.1% |
-17.8% |
|
Net loss attributable to ordinary shareholders |
(25,592,356) |
(19,892,996) |
|
Adjustment for share-based compensation (net of tax effect of nil for both three months |
2,368,040 |
2,700,813 |
|
Adjustment for amortization of intangible assets related to acquisition (net of tax effect of |
588,954 |
- |
|
Adjusted net loss attributable to ordinary shareholders (non-GAAP) |
(22,635,362) |
(17,192,183) |
|
Net loss attributable to ordinary shareholders per ADS, diluted |
(0.76) |
(0.59) |
|
Adjusted net loss attributable to ordinary shareholders per ADS, diluted (non-GAAP) |
(0.67) |
(0.51) |
|
Weighted average number of ADSs used in computation: |
|||
Diluted |
33,594,914 |
33,682,030 |
|
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