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Hywin Holdings Announces Unaudited Financial Results for the Third Quarter of Fiscal Year 2021 (Ended March 31, 2021)

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SHANGHAI, China, June 07, 2021 (GLOBE NEWSWIRE) -- Hywin Holdings Ltd. ("Hywin Wealth", “Hywin”, or the "Company", NASDAQ: HYW), a leading wealth management service provider in China, today announced its unaudited financial results for the third quarter of fiscal year 2021 (ended March 31, 2021).

Third Quarter Fiscal 2021 Highlights

  • Number of clients1 increased by 13.5% to 124,043 as of March 31, 2021 from 109,277 as of March 31, 2020.

  • Number of active clients2 increased by 24.7% to 29,064 from 23,302 in the same period of 2020.

  • Aggregate transaction value of wealth management products distributed on the Company’s platform increased by 22.5% to RMB21.66 billion from RMB17.67 billion in the same period of 2020.

    • Transaction value of wealth management products per relationship manager increased by 32.4% to RMB13.67 million from RMB10.33 million in the same period of 2020.

  • Net revenues increased by 46.5% to RMB462.80 million (US$71.41 million) from RMB315.88 million in the same period of 2020.

    • Net revenues per relationship manager increased by 58.3% to RMB292,173 from RMB184,618 in the same period of 2020.

  • Net income increased by 97.6% to RMB61.87 million (US$9.55 million) from RMB31.31 million in the same period of 2020.

  • Basic and Diluted earnings per American Depositary Share ("ADS") were RMB2.46 (US$0.38), compared to RMB1.25 in the same period of 2020.

Ms. Wang Dian, Chief Executive Officer and Director of Hywin Holdings Ltd., commented, “In this quarter, we maintained robust growth in our client numbers and business volumes. This powered year-over-year increases of 22.5%, 46.5% and 97.6% in our wealth management product transaction value, net revenues, and net income, respectively. These achievements attest to our effectiveness in monetizing client relationships through segmented propositions and continued discovery of client needs, whilst unlocking efficiency gains through our technology and our transition into a nimble organization. Our relationship managers continued to increase their productivity, with net revenues per relationship manager increasing by 58.3% from the same period of 2020. This was accomplished by our investment in training, systematic cross-selling, and a gradual move from cash-based to equity-based incentives, which encourages an entrepreneurial pursuit of long-term success.”

Mr. Zhou Huichuan, Chief Financial Officer of Hywin Holdings Ltd., stated, “During this quarter, our strong net income growth was reinforced by our disciplined cost control. We also continued to execute our IBM-assisted digital transformation program, which further improved our operating efficiency. Looking forward, we will continue to leverage technology to optimize our cost structure and further improve our client services to augment sustained growth.”

Third Quarter Fiscal 2021 Financial Results

Net Revenues

Total net revenues in the quarter ended March 31, 2021 increased by 46.5% to RMB462.80 million (US$71.41 million) from RMB315.88 million in the same period of 2020.

  • Net revenues from wealth management services in the quarter ended March 31, 2021 increased by 49.9% to RMB425.50 million (US$65.65 million) from RMB283.91 million in the same period of 2020, mostly due to expanded volumes in privately-raised products and the resultant increase in blended margins.

  • Net revenues from insurance brokerage services in the quarter ended March 31, 2021 decreased by 14.7% to RMB25.77 million (US$3.98 million) from RMB30.20 million in the same period of 2020, as travel restrictions related to the pandemic remained in place.

  • Net revenues from asset management services in the quarter ended March 31, 2021 increased by 265.5% to RMB5.33 million (US$0.82 million) from RMB1.46 million in the same period of 2020, driven by growing client interest in offshore funds and discretionary mandates managed by the Company.

  • Net revenues from other services in the quarter ended March 31, 2021 were RMB6.20 million (US$0.96 million), mostly attributed to the Company’s technology consulting services and other value-added services.

Operating Cost and Expenses

Total operating cost and expenses in the quarter ended March 31, 2021 increased by 35.8% to RM370.98 million (US$57.24 million) from RMB273.23 million in the same period of 2020, in line with the net revenue growth.

  • Cost of compensation and benefits in the quarter ended March 31, 2021 increased by 37.5% to RMB231.26 million (US$35.68 million) from RMB168.15 million in the same period of 2020, due to increased average business volume per relationship manager.

  • Sales and marketing expenses in the quarter ended March 31, 2021 increased by 21.7% to RMB75.94 million (US$11.72 million) from RMB62.41 million in the same period of 2020, due to increased marketing and sales activities.

  • General and administrative expenses in the quarter ended March 31, 2021 increased by 19.4% to RMB50.97 million (US$7.87 million) from RMB42.68 million in the same period of 2020, due to increased administrative personnel expenses in line with the expanded business scale.

  • Other costs in the quarter ended March 31, 2021 were RMB 12.81 million (US$1.98 million), mainly due to scheduled cost recognition related to our ESOP.

Income from Operations

As a result of the foregoing, income from operations in the quarter ended March 31, 2021 increased by 115.3% to RMB91.82 million (US$14.17 million) from RMB42.65 million in the same period of 2020.

Net Income

Net income in the quarter ended March 31, 2021 increased by 97.6% to RMB61.87 million (US$9.55 million) from RMB31.31 million in the same period of 2020.

Earnings per ADS

Basic and diluted earnings per ADS in the quarter ended March 31, 2021 were both RMB2.46 (US$0.38), compared to RMB1.25 in the same period of 2020. Each ADS represents two of the Company’s ordinary shares.

Balance Sheet

As of March 31, 2021, the Company had RMB404.14 million (US$61.50 million) of cash and cash equivalents and restricted cash, compared to RMB188.39 million as of June 30, 2020.

Business Outlook

For the quarter ended June 30, 2021, the Company expects its net revenues to continue to increase to be between RMB480 million and RMB510 million. This forecast only reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.

Recent Developments

On May 13, 2021, Hywin won the “The Top 5 Most Influential Wealth Managers in China 2020” award from CVINFO, a renowned publication for China’s private equity and venture capital industry, as a recognition of Hywin’s contribution in connecting leading alternative asset managers with high-quality limited partners such as high-net-worth individuals and institutional investors.

On May 15, 2021, Hywin entered into a collaboration agreement with WIND Info, a leading financial and market information provider in China, pursuant to which WIND Info will publish reports produced by Hywin Research Institute. This is a recognition of Hywin’s thought leadership on macroeconomics and investment management in China.

Conference Call Information

The Company’s management team will hold a Direct Event conference call on Monday, June 7, 2021, at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time on the same day) to discuss the financial results. Details for the conference call are as follows:

Event Title:

Hywin Holdings Third Quarter Fiscal 2021 Earnings Conference Call

Conference ID:

9388996

Registration Link:

http://apac.directeventreg.com/registration/event/9388996

All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique access PIN, which can be used to join the conference call.

A replay of the conference call will be accessible through June 15, 2021, by dialing the following numbers:

International:

+612-8199-0299

United States Toll Free:

+1-855-452-5696

Mainland China Toll Free:

400-632-2162

Hong Kong, China Toll Free:

800-963-117

Access Code:

9388996

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at ir.hywinwealth.com.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars in this press release were made at a rate of RMB6.57133 to US$1.00 for figures on the balance sheet as of March 31, 2021, RMB6.48134 to US$1.00 for figures on the income statement for the three months ended March 31, 2021, and RMB6.67384 to US$1.00 for figures on the income statement for the nine months ended March 31, 2021.

About Hywin Holdings Ltd.

Hywin (NASDAQ: HYW) is the third largest independent wealth management service provider in China, with a 7.5% market share in terms of 2019 transaction value, according to China Insights Consultancy. The Company’s primary services are wealth management, insurance brokerage, and asset management. Wealth management is currently the Company’s largest business segment, in which its onshore and offshore solution platform serves clients across generations. For more information, please visit https://ir.hywinwealth.com/

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements pursuant to 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 “anticipate,” “estimate,” “plan,” “project,” “forecast,” “outlook,” “potential,” “continue,” “ongoing,” “expect,” “aim,” “believe,” “intend,” “may,” “should,” “will,” “is/are likely to,” “could” and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Contact:
Hywin Holdings Ltd.
Jiawei Shen
Email: ir@chyjr.com

ICR, Inc.
Robin Yang
Phone: +1 212-537-5797
Email: HywinIR@icrinc.com

Media contact:
ICR, Inc.
Ker Zheng
Phone: +86 139-2280-3249
Email: HywinPR@icrinc.com

HYWIN HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except for per ADS data and percentages)

(unaudited)

3 months ended,

3 months ended,

3 months ended,



3/31/2020

3/31/2021

3/31/2021

RMB'000

RMB'000

USD'000

Change

Net Revenues

-Wealth management

283,912

425,503

65,651

49.9

%

-Assets management

1,458

5,329

822

265.5

%

-Insurance brokerage

30,200

25,772

3,976

(14.7

)%

-Other

311

6,198

957

1,892.9

%

Total Revenue

315,881

462,802

71,406

46.5

%

Operating Costs and Expenses

-Compensation and benefits

168,150

231,258

35,681

37.5

%

-Share-based compensation

-

12,812

1,977

N/A

-Sales and marketing expenses

62,405

75,939

11,716

21.7

%

-General and administrative expenses

42,675

50,973

7,865

19.4

%

Total Operating Costs and Expenses

273,230

370,982

57,239

35.8

%

Income from operations

42,651

91,820

14,167

115.3

%

Other income/(expenses)

-Interest income, net

106

704

109

564.2

%

-Other non-operation expense, net

1,446

(2,206

)

(341

)

(252.6

)%

Total Other Income/(expenses)

1,552

(1,502

)

(232

)

(196.8

)%

Income before tax

44,203

90,318

13,935

104.3

%

Income tax expense

12,893

28,450

4,389

120.7

%

Net income

31,310

61,868

9,546

97.6

%

Other comprehensive Income

-Foreign currency translation Loss/(gain)

2,360

616

95

(73.9

)%

Comprehensive Income

28,950

61,252

9,451

111.6

%

Profit attributable to shareholders

31,310

61,868

9,546

97.6

%

Income per ADS

Income per ADS basic and diluted

1.25

2.46

0.38

96.8

%


HYWIN HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except for per ADS data and percentages)

(unaudited)

9 months ended,

9 months ended,

9 months ended,



3/31/2020

3/31/2021

3/31/2021

RMB'000

RMB'000

USD'000

Change

Net Revenues

-Wealth management

858,375

1,248,930

187,139

45.5

%

-Assets management

2,807

12,016

1,800

328.1

%

-Insurance brokerage

72,179

53,003

7,942

(26.6

)%

-Other

311

18,160

2,722

5,739.2

%

Total Revenue

933,672

1,332,109

199,603

42.7

%

Operating Costs and Expenses

-Compensation and benefits

511,919

725,094

108,648

41.6

%

-Share-based compensation

(369

)

12,812

1,920

(3,572.1

)%

-Sales and marketing expenses

182,256

246,727

36,969

35.4

%

-General and administrative expenses

127,933

144,717

21,684

13.1

%

Total Operating Costs and Expenses

821,739

1,129,350

169,221

37.4

%

Income from operations

111,933

202,759

30,382

81.1

%

Other income/(expenses)

-Interest income, net

279

1,336

200

378.9

%

-Other non-operation expense, net

(870

)

5,476

821

(729.4

)%

Total Other Income/(expenses)

(591

)

6,812

1,021

(1,252.6

)%

Income before tax

111,342

209,571

31,403

88.2

%

Income tax expense

34,613

64,016

9,593

84.9

%

Net income

76,729

145,555

21,810

89.7

%

Other comprehensive Income

-Foreign currency translation Loss/(gain)

3,807

(9,759

)

(1,462

)

(356.3

)%

Comprehensive Income

72,922

155,314

23,272

113.0

%

Profit attributable to shareholders

76,729

145,555

21,810

89.7

%

Income per ADS

Income per ADS basic and diluted

3.07

5.81

0.87

89.3

%


HYWIN HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS

(unaudited)

6/30/2020

3/31/2021

3/31/2021

RMB'000

RMB'000

USD'000

ASSETS

Current assets

Cash and cash equivalents

108,358

310,015

47,177

Restricted cash

80,027

94,129

14,324

Accounts receivable, net

403,693

516,617

78,617

Due from related parties, net

321,772

173,496

26,402

Deposits, prepayments and other current assets

43,451

58,684

8,931

Total Current Assets

957,301

1,152,941

175,451

Non-current assets

Property and equipment, net

34,116

20,078

3,055

Intangible assets, net

29,423

26,165

3,982

Long-term prepayments

1,808

4,513

687

Deferred Tax Asset

2,583

324

49

Total Non-current Assets

67,930

51,080

7,773

Total Assets

1,025,231

1,204,021

183,224

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities

Commission payable

84,857

89,616

13,637

Investors’ deposit

74,262

86,984

13,237

Income Tax Payable

115,432

111,656

16,991

Due to related parties

59,254

96,775

14,727

Other payable and accrued liabilities

168,887

151,315

23,028

Total Current Liabilities

502,692

536,346

81,620

Non-current liabilities

Commission payable-non current

18,321

11,850

1,803

Deferred Tax Liability

3,961

3,806

579

Total Non-current Liabilities

22,282

15,656

2,382

Total Liabilities

524,974

552,002

84,002

Shareholders' Equity

Ordinary shares (US$0.0001 par value; authorized 500,000,000 shares; issued and outstanding 50,000,000 shares
as of June 30, 2020 and 56,000,000 shares as of March 31, 2021)

34

37

6

Additional paid-in capital

500,581

497,026

75,636

Statutory reserves

52,959

52,959

8,059

Accumulated gain/(loss)

(47,056

)

98,499

14,989

Other comprehensive income/(loss)

(6,261

)

3,498

532

Total Shareholders' equity

500,257

652,019

99,222

Total Liabilities and Shareholder's equity

1,025,231

1,204,021

183,224


_______________________

1 Clients are those who had conducted at least one transaction with the Company.
2 Active clients are those who purchased products distributed by the Company during the specified period or those who maintained as holders of the Company’s products within the given period.
3 China Foreign Exchange Trade System USD/RMB mid-point rate on March 31, 2021.
4 An appropriately weighted average exchange rate for the reporting period.