Jupai Holdings Limited
Q1 2021 Earnings Call Transcript

Published: 18 May 2021

[Operator:]

Thank you for standing by for Jupai’s First Quarter 2021 Earnings Conference Call. Please note today’s conference call is being recorded. If you have any objections, you may disconnect at this time. I’d now like to turn the meeting over to your host for today’s conference, Mr. Eddie Guo, Jupai’s IR representative.

[Eddie Guo:]

Hello, everyone and welcome to Jupai’s earnings conference call for the first quarter ended March 31, 2021. Leading the call today is Mr. Jianda Ni, our Chairman and CEO who will review the highlights for the first quarter of 2021. I will then discuss our financial results. We will then open the call to questions, at which time, our CFO, Ms. Min Liu, will also be available. Before we continue, I refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB.

[Jianda Ni:]

Thank you, Eddie and welcome everyone to today’s conference call. In the first quarter, we saw further recovery in China’s overall economy post-pandemic, benefiting from the highly effective COVID-19 control measures. Jupai seeks opportunities and continued to improve client experience and develop our product portfolio in line with our Asset Transparency System strategy, which supported our efforts to improve business performance and profitability. Our continuous efforts have been recognized by the clients, which has restored investor confidence. The company’s total number of active clients also resumed growth, with a 9% increase year-on-year and a 33% increase compared to the fourth quarter of 2020 from 457 to 608. Jupai’s aggregate value of wealth management products distributed increased to RMB1.87 billion from RMB1.16 billion in the fourth quarter of 2020. Our gross profit rates achieved above 50% for three consecutive quarters. Net profit attributable to ordinary shareholders achieved a nearly 100% increase compared to the first quarter last year. In 2021, Jupai continues to upgrade our product selection in 2020 and enrich our product line in the secondary market. The aggregate value of secondary market wealth management products in the first quarter was RMB505 million, accounting for 27% of the total amount raised this quarter with a year-on-year growth of nearly 1.5x. Although there are still uncertainties about the economic recovery on a global scale, the investment sentiment of high net worth people gradually recovered in the first quarter. We remain confident in the long-term prosperity of China’s wealth management industry. Jupai will continue to implement our key strategies, including improving client experience, continuing to develop our product systems and continuing to focus on the secondary market as well as implement the ongoing cost control measures to support margin improvement and offer a range of more diverse, high-quality products and services for high net worth clients. I will now turn the call over to Eddie to go through the financial results for the first quarter of 2021. Thank you.

[Eddie Guo:]

Thank you, Ni-Zong. We are encouraged to see our net profit attributable to ordinary shareholders achieved a nearly 100% increase compared to the last quarter and profitability for two consecutive quarters. For 2021, we will continue to improve our productivity while optimizing overall client experience.

[Operator:]

Thank you. Our first question comes from Yuhua Li from UBS. Please ask your question.

[Yuhua Li:]

Thank you for giving me this opportunity to ask questions. My question is, we can see in the first quarter, Jupai’s aggregate value of wealth management products distributed increase and continue to be profitable. Well, can management share with us what factors attribute to this performance? And what are the future further plans for the rest of 2021? Thanks.

[Jianda Ni:]

Thank you for your question. In the first quarter, we saw further recovery in China’s overall economy post-pandemic, benefiting from the highly effective COVID-19 control measures. China’s GDP for the first quarter of 2021 increased by 18.3% over the same period last year, ranking among the top of the major economies. While on a global scale, there are still uncertainties about the economic recovery due to the pandemic situation, the investment segment of high net worth people broadly recovered in the first quarter. The company’s total number of active clients also resumed growth with a 9% increase year-on-year and a 33% increase compared to the first quarter of 2020 from 457 to 608. Meanwhile, the average wealth management product value distributed per adviser has significantly increased to RMB9 million in the first quarter from approximately RMB5 million in the last quarter with continuous optimization and reduction of the number of wealth management providers, Jupai’s aggregate value of wealth management products, which need still increased to RMB1.87 billion from RMB1.16 billion in the fourth quarter of 2020. In line with industry trends and changes in the market environment, Jupai seized opportunities to improve business performance and profitability. In the first quarter, our gross profit rate was 55.3%, which achieved above 50% for three consecutive quarters. Net profit attributable to ordinary shareholders was RMB3.91 million, a nearly 100% decrease compared to the fourth quarter last year and achieved profit for two consecutive quarters.

[Operator:]

Thank you. As there are no further questions, I will now turn the call over to Jupai’s IR Representative, Eddie Guo, for closing remarks.

[Eddie Guo:]

Okay. This concludes today’s call. If you have any follow-up questions, please get in contact with us. Thank you.

[Operator:]

Thank you for participation in today’s conference. You may now disconnect. Good day.