Hywin Holdings Announces Unaudited Financial Results for the Fourth Quarter and Full Year of Fiscal 2021

Tuesday, 31. August 2021 11:00

- Hywin Holdings Announces Record Fourth Quarter Results –

- Net Income Grew 95.6% in Fiscal Year 2021 –

SHANGHAI, China, Aug. 31, 2021 (GLOBE NEWSWIRE) -- Hywin Holdings Ltd. ("Hywin Wealth," “Hywin,” or the "Company") (NASDAQ: HYW), a leading independent wealth management service provider in China, today announced its unaudited financial results for the fourth quarter and full year of fiscal 2021 ended June 30, 2021.

Fourth Quarter Fiscal 2021 Highlights

  • Number of clients1 increased by 12.5% to 127,317 from 113,146 in the same period of 2020.
  • Number of active clients2 increased by 17.6% to 29,094 from 24,734 in the same period of 2020.
  • Aggregate transaction value of wealth management products distributed on the Company’s platform increased by 39.3% to RMB 20.89 billion from RMB 15.00 billion in the same period of 2020.
    • Transaction value of wealth management products per relationship manager increased by 53.8% to RMB 14.29 million from RMB 9.29 million in the same period of 2020.
  • Net revenues increased by 43.0% to RMB 502.31 million (US$ 77.78 million) from RMB 351.19 million in the same period of 2020.
    • Net revenues per relationship manager increased by 57.9% to RMB 343,579 from RMB 217,590 in the same period of 2020.
  • Net income increased by 111.1% to RMB 62.10 million (US$ 9.62 million) from RMB 29.42 million in the same period of 2020.
  • Basic earnings per American Depositary Share ("ADS") was RMB 2.22 (US$ 0.34), compared with RMB 1.18 in the same period of 2020. Diluted earnings per ADS was RMB 2.14 (US$ 0.33), compared with RMB 1.18 in the same period of 2020.

Full Year Fiscal 2021 Highlights

  • Number of clients3 increased by 12.5% to 127,317 as of June 30, 2021 from 113,146 as of June 30, 2020.
  • Number of active clients4 increased by 4.5% to 38,033 from 36,397 in fiscal 2020.
  • Aggregate transaction value of wealth management products distributed on the Company’s platform increased by 15.0% to RMB 78.78 billion from RMB 68.49 billion in fiscal 2020.
    • Transaction value of wealth management products per relationship manager increased by 16.1% to RMB 52.38 million from RMB 45.12 million in fiscal 2020.
  • Net revenues increased by 42.8% to RMB 1,834.42 million (US$ 277.11 million) from RMB 1,284.86 million in fiscal 2020.
    • Net revenues per relationship manager increased by 44.1% to RMB 1.22 million from RMB 0.85 million in fiscal 2020.
  • Net income increased by 95.6% to RMB 207.66 million (US$ 31.37 million) from RMB 106.15 million in fiscal 2020.
  • Basic earnings per American Depositary Share ("ADS") was RMB 8.05 (US$ 1.22), compared with RMB 4.25 in fiscal 2020.
  • Diluted earnings per ADS was RMB 7.76 (US$ 1.17), compared with RMB 4.25 in fiscal 2020.

Ms. Wang Dian, Chief Executive Officer and Director of Hywin, commented, “Our financial and operating results for the fourth quarter and fiscal year 2021 were record high. While we continued to grow our new client base, we also saw strong, recurring transaction demands from our existing users, as evident in our industry-leading 76.7% repeat investment rate from our existing clients. Meanwhile, we continued to diversify our product offerings and are seeing early success in several newer product categories, such as our privately-raised securities products. These efforts, combined with our continuing strategies to expand our geographic footprint, to enhance our technology, and to strengthen our research and advisory capabilities, will drive value creation for our clients and shareholders.”

Mr. Lawrence Lok, Chief Financial Officer of Hywin, stated, “During the fourth quarter and fiscal year 2021, we achieved impressive growth while maintaining cost discipline. Productivity per relationship manager increased, whereas our sales and marketing expenses and our general and administrative expenses both declined as a percentage of revenue. As a result, our net income for fiscal year 2021 increased by 95.6% from the prior fiscal year. Looking forward, we will continue our investment, especially in R&D and in training our talents to drive further productivity gains, as we carefully execute our growth strategy.”

Fourth Quarter Fiscal 2021 Financial Results

Net Revenues

Total net revenues in the quarter ended June 30, 2021 increased by 43.0% to RMB 502.31 million (US$ 77.78 million) from RMB 351.19 million in the same period of 2020.

  • Net revenues from wealth management services in the quarter ended June 30, 2021 increased by 43.5% to RMB 493.62 million (US$ 76.43 million) from RMB 343.88 million in the same period of 2020, mostly due to expanded volumes in privately-raised products5.
  • Net revenues from asset management services in the quarter ended June 30, 2021 increased by 61.4% to RMB 2.93 million (US$ 0.45 million) from RMB 1.81 million in the same period of 2020, driven by client interest in more diversified products and asset management offerings of the Company.
  • Net revenues from other services in the quarter ended June 30, 2021 were RMB 5.77 million (US$ 0.89 million), mostly attributable to the Company’s technology consulting services and other value-added services.

Operating Costs and Expenses

Total operating costs and expenses in the quarter ended June 30, 2021 increased by 39.3% to RMB 423.47 million (US$ 65.57 million) from RMB 304.08 million in the same period of 2020, in line with net revenue growth.

  • Cost of compensation and benefits in the quarter ended June 30, 2021 increased by 41.3% to RMB 277.97 million (US$ 43.04 million) from RMB 196.74 million in the same period of 2020, due to increased average business volumes per relationship manager.
  • Sales and marketing expenses in the quarter ended June 30, 2021 increased by 25.5% to RMB 80.15 million (US$ 12.41 million) from RMB 63.85 million in the same period of 2020, due to increased marketing and sales activities.
  • General and administrative expenses in the quarter ended June 30, 2021 increased by 29.3% to RMB 56.21 million (US$ 8.70 million) from RMB 43.49 million in the same period of 2020, due to increased administrative personnel expenses in line with the Company’s expansion.
  • Other costs in the quarter ended June 30, 2021 were RMB 9.14 million (US$ 1.41 million), mainly due to scheduled cost recognition related to the Company’s ESOP.

Income from Operations

As a result of the foregoing, income from operations in the quarter ended June 30, 2021 increased by 67.4% to RMB 78.85 million (US$ 12.21 million) from RMB 47.11 million in the same period of 2020.

Net Income

Net income in the quarter ended June 30, 2021 increased by 111.1% to RMB 62.10 million (US$ 9.62 million) from RMB 29.42 million in the same period of 2020.

Earnings per ADS

Basic earnings per ADS in the quarter ended June 30, 2021 was RMB 2.22 (US$ 0.34), compared with RMB 1.18 in the same period of 2020.

Diluted earnings per ADS in the quarter ended June 30, 2021 was RMB 2.14 (US$ 0.33), compared with RMB 1.18 in the same period of 2020.

Each ADS represents two of the Company’s ordinary shares.

Full Year Fiscal 2021 Financial Results

Net Revenues

Total net revenues in the full year of fiscal 2021 increased by 42.8% to RMB 1,834.42 million (US$ 277.11 million) from RMB 1,284.86 million in the full year of fiscal 2020.

  • Net revenues from wealth management services in the full year of fiscal 2021 increased by 40.9% to RMB 1,795.55 million (US$ 271.24 million) from RMB 1,274.43 million in the full year of fiscal 2020, mostly due to expanded volumes in privately-raised products and diversified products offerings6.
  • Net revenues from asset management services in the full year of fiscal 2021 increased by 223.4% to RMB 14.94 million (US$ 2.26 million) from RMB 4.62 million in the full year of fiscal 2020, driven by growing client interest in offshore funds and discretionary mandates managed by the Company.
  • Net revenues from other services in the full year of fiscal 2021 were RMB 23.93 million (US$ 3.62 million), mostly attributable to the Company’s technology consulting services and other value-added services.

Operating Costs and Expenses

Total operating costs and expenses in the full year of fiscal 2021 increased by 37.9% to RMB 1,552.82 million (US$ 234.57 million) from RMB 1,125.82 million in the full year of fiscal 2020, in line with net revenue growth.

  • Cost of compensation and benefits in the full year of fiscal 2021 increased by 41.5% to RMB 1,003.06 million (US$ 151.52 million) from RMB 708.65 million in the full year of fiscal 2020, due to increased average business volume per relationship manager.
  • Sales and marketing expenses in the full year of fiscal 2021 increased by 32.8% to RMB 326.88 million (US$ 49.38 million) from RMB 246.11 million in the full year of fiscal 2020, due to increased marketing and sales activities.
  • General and administrative expenses in the full year of fiscal 2021 increased by 17.2% to RMB 200.93 million (US$ 30.35 million) from RMB 171.42 million in the full year of fiscal 2020, due to increased administrative personnel expenses in line with the Company’s expansion.
  • Other costs in the full year of fiscal 2021 were RMB 21.95 million (US$ 3.32 million), mainly due to scheduled cost recognition related to the Company’s ESOP.

Income from Operations

As a result of the foregoing, income from operations in the full year of fiscal 2021 increased by 77.1% to RMB 281.61 million (US$ 42.54 million) from RMB 159.05 million in the full year of fiscal 2020.

Net Income

Net income in the full year of fiscal 2021 increased by 95.6% to RMB 207.66 million (US$ 31.37 million) from RMB 106.15 million in the full year of fiscal 2020.

Earnings per ADS

Basic earnings per ADS in the full year of fiscal 2021 was RMB 8.05 (US$ 1.22), compared with RMB 4.25 in the full year of fiscal 2020.

Diluted earnings per ADS in the full year of fiscal 2021 was RMB 7.76 (US$ 1.17), compared with RMB 4.25 in the full year of fiscal 2020.

Each ADS represents two of the Company’s ordinary shares.

Balance Sheet

As of June 30, 2021, the Company had RMB 705.31 million (US$ 109.18 million) in cash, cash equivalents, and restricted cash, compared with RMB 188.39 million as of June 30, 2020.

Recent Developments

On 7 July, Hywin’s CEO, Ms Wang Dian, was featured in the “InvestHK Family Office” promotional video as one of the ambassadorial figures for the family office initiative of the Hong Kong SAR Government.

On 20 July, Hywin received the Type 1 License (Dealing in Securities) from the Securities and Futures Commission of Hong Kong, complementing our existing Type 4 (Advising on Securities), Type 5 (Advising on Futures Contracts) and Type 9 (Asset Management) Licenses.

On 12 August, Hywin appointed Mr. Wai Lok (Lawrence) to the position of Chief Financial Officer, to strengthen our shareholder value-centric business strategy, and broaden our conversations with the international investor community. Prior to joining Hywin, Mr. Lok was a senior investment banker at Citigroup for more than 15 years.

Conference Call Information

The Company’s management team will hold a Direct Event conference call on August 31, 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 Fourth Quarter and Full Year Fiscal 2021 Earnings Conference Call
Conference ID:8225068
Registration Link:https://apac.directeventreg.com/der/validateConferenceId.action

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 August 31, 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:8225068

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 RMB6.46017 to US$1.00 for figures on the balance sheet as of June 30, 2021, RMB6.45838 to US$1.00 for figures on the income statement for the three months ended June 30, 2021, and RMB6.61999 to US$1.00 for figures on the income statement for the twelve months ended June 30, 2021.

About Hywin Holdings Ltd.

Hywin (NASDAQ: HYW) is a leading independent wealth management service provider in China focused on providing asset allocation advisory services and comprehensive financial products to high-net-worth clients. The Company’s primary services are wealth management, asset management, and other comprehensive financial services. Wealth management is currently the Company’s largest business segment, in which its onshore and offshore solution platforms serve 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,” “forecast,” “plan,” “project,” “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.
Jingyi Wen
Email: ir@chyjr.com

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

Media contact:
ICR, LLC
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,   
 6/30/20206/30/20216/30/2021 Change 
 RMB'000RMB'000USD'000   
Net Revenues     
-Wealth management343,880 493,619 76,432  43.5%
-Assets management1,813 2,926 453  61.4%
-Other5,498 5,768 893  4.9%
Total Net Revenues351,191  502,313  77,778   43.0%
      
Operating Costs and Expenses     
-Compensation and benefits196,735 277,967 43,040  41.3%
-Share-based compensation- 9,135 1,414  N/A 
-Sales and marketing expenses63,852 80,152 12,411  25.5%
-General and administrative expenses43,490 56,212 8,704  29.3%
Total Operating Costs and Expenses304,077  423,466  65,569   39.3%
      
Income from operations47,114  78,847  12,209   67.4%
      
Other (expenses)/income     
-Interest income, net46 201 31  337.0%
-Other non-operation (expenses)/income , net(1,588)7,132 1,104  (549.1)%
Total Other (expenses)/income(1,542)7,333  1,135   (575.6)%
      
Income before tax45,572 86,180 13,344  89.1%
Income tax expense16,150 24,078 3,728  49.1%
Net income29,422  62,102  9,616   111.1%
      
Other comprehensive Income     
-Foreign currency translation Loss/(gain)(166)(783)(121) 371.7%
Comprehensive Income29,588  62,885  9,737   112.5%
      
Profit attributable to shareholders29,422  62,102  9,616   111.1%
      
Income per ADS     
Income per ADS basic1.18  2.22  0.34   88.1%
Income per ADS diluted1.18  2.14  0.33   81.4%


 
HYWIN HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except for per ADS data and percentages)
(unaudited)
      
 12 months ended,12 months ended,12 months ended, Change
 6/30/20206/30/20216/30/2021 
 RMB'000RMB'000USD'000 
Net Revenues     
-Wealth management1,274,434 1,795,552 271,235  40.9%
-Assets management4,620 14,942 2,257  223.4%
-Other5,809 23,928 3,615  311.9%
Total Net Revenues1,284,863  1,834,422  277,107   42.8%
      
Operating Costs and Expenses     
-Compensation and benefits708,654 1,003,061 151,522  41.5%
-Share-based compensation(369)21,947 3,315  (6047.7)%
-Sales and marketing expenses246,108 326,879 49,378  32.8%
-General and administrative expenses171,423 200,929 30,353  17.2%
Total Operating Costs and Expenses1,125,816  1,552,816  234,568   37.9%
      
Income from operations159,047  281,606  42,539   77.1%
      
Other (expenses)/income      
-Interest income, net325 1,537 232  372.9%
-Other non-operation (expenses)/income, net(2,458)12,608 1,905  (612.9)%
Total Other (expenses)/Income(2,133)14,145  2,137   (763.2)%
      
Income before tax156,914 295,751 44,676  88.5%
Income tax expense50,763 88,094 13,307  73.5%
Net income106,151  207,657  31,369   95.6%
      
Other comprehensive Income     
-Foreign currency translation Loss/(gain)3,641 (10,542)(1,592) (389.5)%
Comprehensive Income102,510  218,199  32,961   112.9%
      
Profit attributable to shareholders106,151  207,657  31,369   95.6%
      
Income per ADS     
Income per ADS basic4.25  8.05  1.22   89.4%
Income per ADS diluted4.25  7.76  1.17   82.6%



      
HYWIN HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS
(unaudited)
      
 6/30/2020 6/30/20216/30/2021 
 RMB'000 RMB'000USD'000 
ASSETS     
Current assets     
Cash and cash equivalents108,358 439,28768,000 
Restricted cash80,027 266,02341,179 
Accounts receivable, net403,693 594,06191,958 
Due from related parties, net321,772 126,10319,520 
Deposits, prepayments and other current assets43,451 51,5407,979 
Total Current Assets957,301 1,477,014228,636 
      
Non-current assets     
Property and equipment, net34,116 21,1043,267 
Intangible assets, net29,423 24,2253,750 
Long-term prepayments1,808 7,4271,150 
Deferred Tax Asset2,583 649100 
Total Non-current Assets67,930 53,4058,267 
      
Total Assets1,025,231  1,530,419 236,903  
      
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current Liabilities     
Commission payable84,857 127,19419,689 
Investors’ deposit74,262 248,27738,432 
Income Tax Payable115,432 116,89718,095 
Due to related parties59,254 24,7993,839 
Other payable and accrued liabilities168,887 278,69743,142 
Total Current Liabilities502,692 795,864123,197 
      
Non-current liabilities     
Commission payable-non current18,321 10,0801,560 
Deferred Tax Liability3,961 3,548549 
Total Non-current Liabilities22,282 13,6282,109 
      
Total Liabilities524,974  809,492 125,306  
      
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; issued and outstanding 56,000,000 shares as of June 30, 2021)
34 366 
Additional paid-in capital500,581 503,05077,870 
Statutory reserves52,959 52,9598,198 
Accumulated (loss)/gain(47,056)160,60124,860 
Other comprehensive (loss)/income(6,261)4,281663 
      
Total Shareholders' equity500,257  720,927 111,597  
      
Total Liabilities and Shareholder's equity1,025,231  1,530,419 236,903  
      

 __________________________

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 Clients are those who had conducted at least one transaction with the Company.
4 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.
5 The revenues of insurance brokerage services have been absorbed into the wealth management services, reflecting the fact that insurance solutions increasingly form an integral part of the wealth management proposition to clients.
6 Note: The revenues of insurance brokerage services have been absorbed into the wealth management services, reflecting the fact that insurance solutions increasingly form an integral part of the wealth management proposition to clients.
7 China Foreign Exchange Trade System USD/RMB mid-point rate on June 30, 2021.
8 An appropriately weighted average exchange rate for the reporting period.
9 An appropriately weighted average exchange rate for the reporting period.


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