SHANGHAI, March 13, 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 full year ended December 31, 2019.
FULL YEAR 2019 FINANCIAL HIGHLIGHTS
(RMB '000, except percentages) |
FY 2018 |
FY 2018 % |
FY 2019 |
FY 2019 % |
YoY Change % |
||||
One-time commissions |
737,482 |
55.7% |
318,854 |
40.5% |
-56.8% |
||||
Recurring management fees |
435,523 |
33.0% |
338,647 |
43.1% |
-22.2% |
||||
Recurring service fees |
64,345 |
4.9% |
114,542 |
14.6% |
78.0% |
||||
Other service fees |
84,394 |
6.4% |
13,904 |
1.8% |
-83.5% |
||||
Total net revenues |
1,321,744 |
100.0% |
785,947 |
100.0% |
-40.5% |
FULL YEAR 2019 OPERATIONAL UPDATES
Wealth management products distributed by the Company - breakdown by product type |
|||||
Twelve months ended |
|||||
December 31, 2018 |
December 31, 2019 |
||||
Product type |
(RMB in millions, except percentages) |
||||
Fixed income products |
8,560 |
28% |
7,219 |
73% |
|
Private equity products |
19,038 |
63% |
1,526 |
16% |
|
Secondary market equity fund products |
1,129 |
4% |
291 |
3% |
|
Other products |
1,546 |
5% |
791 |
8% |
|
All products |
30,273 |
100% |
9,827 |
100% |
Assets under management – breakdown by product type |
|||||
As of |
|||||
December 31, 2018 |
December 31, 2019 |
||||
Product type |
(RMB in millions, except percentages) |
||||
Fixed income products |
19,846 |
35% |
13,455 |
32% |
|
Private equity products |
34,033 |
60% |
26,294 |
63% |
|
Secondary market equity fund products |
1,658 |
3% |
929 |
2% |
|
Other products |
1,215 |
2% |
1,147 |
3% |
|
All products |
56,752 |
100% |
41,825 |
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 December 31, 2019, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System, which was RMB6.9618 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, amortization of intangible assets resulted from business acquisitions, impairment loss of investment in affiliates and impairment loss of goodwill in the periods presented. |
[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 bottom-line performance showed further improvement over the fourth quarter of 2019, as our cost control measures continued to take effect," said Mr. Jianda Ni, Jupai's chairman of the board and chief executive officer. "However, our top-line performance for this quarter remained under pressure due to industry-wide headwinds. Although we started to see certain loosening of regulatory restrictions on privately-offered funds during the quarter, demand for wealth management products stayed weak as investors remain cautious on the overall market outlook for 2020."
"Looking forward, we expect the market environment to be negatively affected by the coronavirus outbreak in the first quarter. We remain confident, however, in the long-term outlook for Jupai and for the overall wealth management industry, which has been reflected in our announcement of a US$10 million share repurchase program in late February. Jupai remains dedicated to executing on our core strategies of further strengthening our cost control efforts and increasing our operating efficiency, enhancing our product portfolio with differentiated products, and optimizing our risk control system and improving project transparency. We will also continue to seek potential growth opportunities from overseas business."
Ms. Min Liu, Jupai's chief financial officer, said, "Jupai achieved another sequential decline in operating expenses in the fourth quarter of 2019, thanks to our continuous efforts in implementing cost control measures. Specifically, cost of revenues declined by 14% and G&A expenses were down by 33%. We expect to be able to further reduce costs in the coming quarters as we continue to enhance operating efficiencies."
FULL YEAR 2019 FINANCIAL RESULTS
Net Revenues
Net revenues for the full year 2019 were RMB785.9 million (US$112.9 million), a 40.5% decrease from 2018, 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 full year 2019 were RMB922.6 million (US$132.5 million), a decrease of 37.7% from 2018.
Operating margin for the full year 2019 was -17.4%, compared to -12.1% in 2018.
Income tax expenses for the full year 2019 were RMB52.9 million (US$7.6 million), a 59.2% decrease from 2018, primarily due to a decrease in taxable income.
Net Income
- Net Income
- Non-GAAP Net Income
Balance Sheet and Cash Flow
As of December 31, 2019, the Company had RMB712.3 million (US$102.3 million) in cash, cash equivalents and restricted cash, compared to RMB1,302.6 million as of December 31, 2018.
Net cash used in operating activities for the full year 2019 was RMB224.6 million (US$32.3 million).
Net cash used in investing activities for the full year 2019 was RMB365.7 million (US$52.5 million).
Net cash provided by financing activities for the full year 2019 was RMB29.6 thousand (US$4.3 thousand).
CONFERENCE CALL
Jupai's management will host an earnings conference call on March 13, 2020 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: |
+1-845-675-0437 or +1-866-519-4004 |
Hong Kong: |
+852-3018-6771 or 800-906-601 |
Mainland China: |
400-620-8038 or 800-819-0121 |
Singapore: |
+65-6713-5090 |
Passcode: |
7177755 |
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 March 21, 2020:
U.S./International: |
+1-855-452-5696 |
Hong Kong: |
800-963-117 |
Mainland China: |
400-632-2162 |
Singapore: |
800-616-2305 |
Passcode: |
7177755 |
Additionally, a live and archived webcast will be available at http://jupai.investorroom.com.
DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD
Starting from January 1, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use ("ROU") assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Company adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. The Company also elected the package of practical expedients, which among other things, does not require reassessment of lease classification.
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, impairment loss of investment in affiliates and impairment loss of goodwill in the periods presented. 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, amortization of intangible assets related to acquisition, impairment loss of investment in affiliates and impairment loss of goodwill in the periods presented, 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, impairment loss of investment in affiliates and impairment loss of goodwill 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; 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, |
December 31, |
December 31, |
|||
2018 |
2019 |
2019 |
|||
RMB |
RMB |
USD |
|||
Assets |
|||||
Current assets: |
|||||
Cash and cash equivalents |
1,298,565,042 |
711,205,698 |
102,158,306 |
||
Restricted cash |
4,000,000 |
1,100,000 |
158,005 |
||
Short-term investments |
4,723,612 |
- |
- |
||
Accounts receivable |
39,633,035 |
- |
- |
||
Other receivables |
20,493,145 |
14,125,535 |
2,029,006 |
||
Amounts due from related parties |
199,331,694 |
95,193,003 |
13,673,619 |
||
Other current assets |
15,320,791 |
4,984,541 |
715,985 |
||
Total current assets |
1,582,067,319 |
826,608,777 |
118,734,921 |
||
Long-term investments |
58,950,000 |
228,950,000 |
32,886,610 |
||
Investment in affiliates |
67,262,431 |
107,541,000 |
15,447,298 |
||
Amounts due from related parties — non-current |
48,626,353 |
229,117,743 |
32,910,705 |
||
Property and equipment, net |
36,267,042 |
27,834,760 |
3,998,213 |
||
Intangible assets, net |
58,124,608 |
38,250,479 |
5,494,338 |
||
Goodwill |
297,031 |
- |
- |
||
Other non-current assets |
27,914,021 |
17,886,020 |
2,569,166 |
||
Right-of-use assets |
- |
68,950,101 |
9,904,062 |
||
Deferred tax assets |
100,985,228 |
4,608,063 |
661,907 |
||
Total Assets |
1,980,494,033 |
1,549,746,943 |
222,607,220 |
||
Liabilities and Equity |
|||||
Current liabilities: |
|||||
Accrued payroll and welfare expenses |
116,653,658 |
58,318,063 |
8,376,866 |
||
Income tax payable |
227,537,993 |
82,800,208 |
11,893,506 |
||
Other tax payable |
43,009,523 |
695,081 |
99,842 |
||
Amounts due to related parties — current |
31,105,111 |
19,439,664 |
2,792,333 |
||
Deferred revenue from related parties |
111,720,785 |
42,053,959 |
6,040,673 |
||
Deferred revenue |
18,949,097 |
35,674,503 |
5,124,322 |
||
Other current liabilities |
39,929,945 |
78,201,072 |
11,232,881 |
||
Total current liabilities |
588,906,112 |
317,182,550 |
45,560,423 |
||
Deferred revenue — non-current from related parties |
22,096,306 |
4,917,845 |
706,404 |
||
Deferred revenue — non-current |
2,144,593 |
311,651 |
44,766 |
||
Operating Lease Liabilities — non-current |
- |
28,518,789 |
4,096,468 |
||
Deferred tax liabilities |
198,187 |
- |
- |
||
Total Liabilities |
613,345,198 |
350,930,835 |
50,408,061 |
||
Equity |
1,367,148,835 |
1,198,816,108 |
172,199,159 |
||
Total Liabilities and Total Shareholders' Equity |
1,980,494,033 |
1,549,746,943 |
222,607,220 |
Jupai Holdings Limited |
|||||
Unaudited Condensed Consolidated Income Statements |
|||||
(In RMB, except for USD data and ADS data) |
|||||
Twelve months ended |
|||||
December 31, |
December 31, |
December 31, |
|||
2018 |
2019 |
2019 |
|||
RMB |
RMB |
USD |
|||
Revenues |
|||||
Third party revenues |
335,246,612 |
387,870,253 |
55,714,076 |
||
Related party revenues |
990,820,793 |
402,889,899 |
57,871,513 |
||
Total revenues |
1,326,067,405 |
790,760,152 |
113,585,589 |
||
Taxes and surcharges |
(4,323,742) |
(4,812,940) |
(691,336) |
||
Net revenues |
1,321,743,663 |
785,947,212 |
112,894,253 |
||
Operating costs and expenses: |
|||||
Cost of revenues |
(684,558,659) |
(481,746,067) |
(69,198,493) |
||
Selling expenses |
(303,170,575) |
(206,777,405) |
(29,701,716) |
||
General and administrative expenses |
(274,782,664) |
(265,527,496) |
(38,140,638) |
||
Impairment loss of goodwill |
(267,917,575) |
- |
- |
||
Other operating income — government subsidies |
48,742,897 |
31,429,802 |
4,514,609 |
||
Total operating cost and expenses |
(1,481,686,576) |
(922,621,166) |
(132,526,238) |
||
Loss from operations |
(159,942,913) |
(136,673,954) |
(19,631,985) |
||
Gain from deconsolidation of subsidiaries |
561,528 |
- |
- |
||
Interest income |
3,990,096 |
6,136,600 |
881,467 |
||
Investment (loss) income |
(292,384) |
12,627,142 |
1,813,775 |
||
Other income |
4,227,896 |
3,409,000 |
489,673 |
||
Total other income |
8,487,136 |
22,172,742 |
3,184,915 |
||
Loss before taxes and loss from equity in affiliates |
(151,455,777) |
(114,501,212) |
(16,447,070) |
||
Income tax expense |
(129,855,367) |
(52,944,639) |
(7,605,021) |
||
Loss from equity in affiliates |
(113,486,155) |
(5,015,063) |
(720,369) |
||
Net loss |
(394,797,299) |
(172,460,914) |
(24,772,460) |
||
Net loss attributable to non-controlling interests |
7,053,281 |
7,774,839 |
1,116,786 |
||
Net loss attributable to ordinary shareholders |
(387,744,018) |
(164,686,075) |
(23,655,674) |
||
Net loss per ADS: |
|||||
Basic |
(11.60) |
(4.90) |
(0.70) |
||
Diluted |
(11.60) |
(4.90) |
(0.70) |
||
Weighted average number of ADSs used in computation: |
|||||
Basic |
33,413,485 |
33,615,983 |
33,615,983 |
||
Diluted |
33,413,485 |
33,615,983 |
33,615,983 |
Jupai Holdings Limited |
|||||
Unaudited Condensed Comprehensive Income Statements |
|||||
(In RMB, except for USD data) |
|||||
Twelve months ended |
|||||
December 31, |
December 31, |
December 31, |
|||
2018 |
2019 |
2019 |
|||
RMB |
RMB |
USD |
|||
Net loss |
(394,797,299) |
(172,460,914) |
(24,772,460) |
||
Other comprehensive loss, net of tax: |
|||||
Change in cumulative foreign currency translation adjustment |
12,501,586 |
(3,245,903) |
(466,245) |
||
Other comprehensive income |
12,501,586 |
(3,245,903) |
(466,245) |
||
Comprehensive loss |
(382,295,713) |
(175,706,817) |
(25,238,705) |
||
Less: Comprehensive loss attributable to non-controlling interests |
(6,934,658) |
(7,748,689) |
(1,113,029) |
||
Comprehensive loss attributable to ordinary shareholders |
(375,361,055) |
(167,958,128) |
(24,125,676) |
Jupai Holdings Limited |
|||
Reconciliation of GAAP to Non-GAAP Results |
|||
(In RMB, except for ADS data and percentages) |
|||
Twelve months ended |
|||
December 31, |
December 31, |
||
2018 |
2019 |
||
RMB |
RMB |
||
Net margin attributable to ordinary shareholders |
-29.3% |
-21.0% |
|
Adjusted net margin attributable to ordinary shareholders (non-GAAP) |
1.0% |
-19.7% |
|
Net loss attributable to ordinary shareholders |
(387,744,018) |
(164,686,075) |
|
Adjustment for share-based compensation (net of tax effect of nil for both years ended |
18,108,942 |
9,583,596 |
|
Adjustment for amortization of intangible assets related to acquisition (net of tax effect of |
13,927,456 |
588,954 |
|
Adjustment for impairment loss of investment in affiliates (net of tax effect of nil for both |
100,756,194 |
- |
|
Adjustment for impairment loss of goodwill (net of tax effect of nil for both years ended |
267,917,575 |
- |
|
Adjusted net income (loss) attributable to ordinary shareholders (non-GAAP) |
12,966,149 |
(154,513,525) |
|
Net loss attributable to ordinary shareholders per ADS, diluted |
(11.60) |
(4.90) |
|
Adjusted net income (loss) attributable to ordinary shareholders per ADS, diluted (non-GAAP) |
0.37 |
(4.60) |
|
Weighted average number of ADSs used in computation: |
|||
Diluted |
35,035,842 |
33,615,983 |
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