Jupai Holdings Limited (NYSE:JP) Q4 2021 Results Earnings Conference Call March 29, 2022 8:00 AM ET
Company Participants
Eddie Guo – Investor Relations Director
Jianda Ni – Chairman and Chief Executive Officer
Conference Call Participants
Yuhua Li – UBS
Operator
Thank you for standing by for Jupai’s Fourth Quarter and Full-Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management’s prepared remarks, there will be a question-and-answer session. 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 Director.
Eddie Guo
Hello, everyone. And welcome to Jupai’s earnings conference call for the fourth quarter and full year ended December 31, 2021. Leading the call today is Mr. Jianda Ni, our Chairman and CEO, who will reveal the highlights for the fourth quarter and full-year 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 apply to this call and 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 the 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.
I will now turn the call over to Mr. Jianda Ni, our Chairman and CEO, and I will interpret his remarks for you.
Jianda Ni
[Foreign Language] Thank you, Eddie. And welcome, everyone, to today’s conference call.
[Foreign Language] 2021 is the final year of the transition period for the new regulations regarding asset management and compliance will always be an important guarantee for the healthy development of the wealth management industry in this new development phase.
Jupai is committed to asset allocation and product transformation with continued focus on equity and the secondary market products, mutual fund products and other net worth net products.
[Foreign Language] As the awareness of common prosperity in China deepens, Jupai’s asset allocation strategy will continue to change. The future investment landscape will focus on whether a company’s growth provides positive benefits for society. Instead of focusing predominantly on scale, we will focus more on quality in areas that we believe to be more sustainable and look to share opportunities for growth in this new phase with our investors.
[Foreign Language] I will now turn the call over to Eddie to go through the financial results for the fourth quarter and full year of 2021. Thank you.
Eddie Guo
Thank you, Ni. We are encouraged to see the other products, including insurance, accounted for 6.4% of the aggregate value of wealth management products distributed in the fourth quarter compared to 4.3% in the last quarter as we continue to further diversify our product categories. And the fixed income products accounted for 2.3% compared to 71.5% in the last quarter.
Now, I will walk you through our financial highlights for the fourth quarter and full year ended December 31, 2021. Net revenues for the fourth quarter of 2021 were RMB 70.4 million, a decrease of 28.2% from RMB 98.0 million in the corresponding period in 2020. For the full-year 2021, net revenues were RMB 359.1 million, a decrease of 7.5% or RMB 388.2 million in 2020.
Operating costs and expenses for the fourth quarter of 2021 were RMB 89.3 million, a decrease of 2.3% from RMB 91.4 million in the corresponding period in 2020. For the full-year 2021, operating costs and expenses were RMB 360.2 million, a decrease of 14.8% from RMB 122.6 million in 2020.
Net loss attributable to ordinary shareholders for the fourth quarter of 2021 was RMB 248.3 million as compared to net income attributable to ordinary shareholders of RMB 2.0 million from the corresponding period in 2020. For the full-year 2021, net loss attributable to ordinary shareholders was RMB 267.9 million as compared to RMB 331.4 million in 2020.
Net loss attributable to ordinary shareholders per basic and diluted American deposit share for the fourth quarter of 2021 was RMB 7.30 and RMB 7.30 respectively as compared to net income attributable to ordinary shareholder per basic and diluted ADS of RMB 0.06 and RMB 0.06, respectively, from the corresponding period in 2020.
For the full-year 2021, net loss attributable to ordinary shareholders per basic and diluted ADS was RMB 6.08 and RMB 8.08, respectively, as compared to RMB 0.94 and RMB 0.94 respectively for 2020.
As of February 25, 2022, we have repurchased 1,922,180 ADS as part of the company’s 24-month share repurchase program of up to US$10 million announced in February 2020 at a total cost of the US$2,109,847 inclusive of transaction charges and related fees.
That concludes our prepared remarks. I will now turn the call back to the operator to begin the Q&A session. Operator?
Question-and-Answer Session
Operator
[Operator Instructions]. Our first question comes from Yuhua Li with UBS.
Yuhua Li
I have one question. Can management talk about the company’s products performance in this quarter? And can you share more on your asset allocation transformation strategy?
[Foreign Language]
Jianda Ni
[Foreign Language] In 2021, in the face of the increasing challenges brought by the complex international environment and domestic pandemic resurgence, China continued to see stable progress through coordinated pandemic prevention and control measures for economic and social development. China’s GDP in 2021 increased by 8.1% year-on-year and 4.0% from the corresponding period in 2020.
However, from a global perspective, the recurrence of uncertainty of the pandemic coupled with inflationary pressure will continue to affect the investment sentiment among high net worth individuals.
[Foreign Language] We see the asset allocation of Chinese investors moving in the direction of more diversification. In line with the long-term shift from real estate assets, equity products are becoming an important trend. Jupai is committed to focusing on asset allocation and product transformation, with continued focus on equity and effective market products, mutual fund products and other net worth asset product.
[Foreign Language] In terms of equity products, the number of listed issuers with underlying assets in Jupai’s private equity funds reached 26 for the whole year of 2021, and 6 of them were listed issuers in the fourth quarter covering areas including high tech, health care and consumption industries. In the future, the company will also select fund of funds, secondary funds and direct investment portfolio to activate foreign investment opportunities for clients by refining our focus and elaborating our advantages in the industry.
[Foreign Language] We continue to further diversify our strategy for secondary market equity fund products, with the current asset under management reaching RMB 1.5 billion, covering products with diverse strategies from aggressive to conservative, as well as quantitative and high frequency trading, stock picking. Equity investors could effectively adapt assets and adapt their strategy to the complex and changing macroenvironment.
[Foreign Language] In the fourth quarter, secondary market equity fund products, including mutual funds, accounted for 88.2% of Jupai’s equity value of wealth management products distributed. In addition, other products such as insurance accounted for 6.4% of the aggregate value of wealth management products distributed compared to 4.3% in the last quarter. Fixed income products accounted for 2.3% compared to 71.5% in the last quarter. As of December 31 2021, the simulated amounts paid out for the relevant product was RMB 9.03 billion.
[Foreign Language] Jupai has committed to the implementation of our precise key client customization strategy, providing multi-to-one service group based on investor demand or financial [indiscernible] allocation among real estate, secondary market, private equity and mutual funds, providing investors with more professional and efficient investment strategy and customer services, with which we’re diversifying wealth management for now.
[Foreign Language] We remain confident in the company and the long-term development of the wealth management industry. Jupai will continue to focus on our prospective client customization strategy as we implement our asset transparency system, providing high quality service to investors and continuously improving the company’s profitability. We will remain committed to becoming one of the top wealth management and asset management brands for high net worth individuals in China. Thank you.
Operator
We are now approaching the end of the conference call. I will now turn the call over to Jupai’s IR director Eddie Guo for closing remarks.
Eddie Guo
This will conclude today’s call. If you have any follow-up questions, please get in contact with us. Thank you.
Jianda Ni
Thank you.
Operator
Thank you for your participation in today’s conference. You may now disconnect. Good day.
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