Posted inChina

Jupai and Noah sold more mutual funds in 2020

Shanghai-based wealth manager Noah Holdings also suffered a net loss in the fourth quarter of 2020, due to the Camsing settlement.

Shanghai-based wealth manager Jupai Holdings’ aggregate value of wealth management products distributed by the firm during the fourth quarter of 2020 was RMB 1.2bn ($184.3m), a 38.7% decrease from the corresponding period in 2019 of RMB 1.9bn. For the full year of 2020, the figure was RMB 6.5bn, a 34.3% decrease compared with 2019 of RMB 9.83bn, according to the firm’s latest unaudited financial results for 2020.

“The pandemic has made high net worth individuals cautious in their investment activity, therefore sales were down,” a spokesman for the firm told FSA.

However, for the whole year, sales of secondary market equity fund products were a bright spot, increasing 303% compared with 2019.

“The secondary market equity fund products include the privately-offered products that we collaborate on with firms such as Greenwoods Asset Management and Eastern Harbour Investment, our own actively-managed fund of funds, publicly traded stocks and bonds, as well as mutual funds that we distribute for other firms,” the spokesman said.

‘We distributed RMB 32m of mutual funds in 2020, compared with a much smaller number in 2019,” he added.

Wealth management products distributed by the firm, breakdown by product type

Product typeQ4, 2019Q4,2020Full year, 2019Full year, 2020
Fixed income products1,4748337,2194,116
Private equity products113141,5261,017
Secondary market equity fund products1322812911,173
Other products17935791147
All products1,8981,1639,8276,453
Source: Jupai Holdings, RMB in millions

Meanwhile, for the full year 2020, net loss attributable to ordinary shareholders narrowed to RMB 31.4m, compared with RMB 164.7m in 2019, the results noted.

The firm’s net income attributable to ordinary shareholders in the fourth quarter of 2020 was RMB 2m, compared to net loss attributable to ordinary shareholders of RMB 30.2m from the corresponding period in 2019.

It is the first time that the firm has seen positive quarterly net income since the fourth quarter of 2018, according to the spokesman.

“Jupai’s effective cost control measures continued to drive margin improvement as evidenced by our profitable fourth quarter which saw total operating costs decrease by 45.1% on a year-over-year basis,” Min Liu, Jupai’s chief financial officer, said in the statement of results.

Noah Holdings

Another Shanghai-based wealth manager, Noah Holdings, this week also released its 2020 unaudited financial results.

For the full year of 2020, the firm’s aggregate value of financial products distributed was RMB 94.7bn, a 20.6% increase from 2019 which was RMB 78.5bn, due to the significant increase in the distribution of public securities products which include mutual funds, and individual equities and bonds, according to the results.

Sales of public securities products were RMB 73.1bn last year, up 177% compared with RMB 26.4bn in the full year of 2019.

In 2020, the firm distributed RMB 43.3bn of mutual funds, up 164.7% compared with the RMB 16.4bn in 2019, according to data from the firm.

Wealth management products distributed by the firm, breakdown by product type

Product typeQ4, 2019Q4, 2020Full year, 2019Full year, 2020
Public securities products9.715.226.473.1
Private equity products1.85.214.317.9
Credit products1.
Other products0.
All products13.221.378.594.7
Source: Noah Holdings, RMB in billions

Meanwhile, the firm’s net revenues for the fourth quarter of 2020 were RMB 953.2m, a 20.9% increase from the corresponding period in 2019, and an 11.0% increase compared with the third quarter of 2020, because of a pick-up in one-time commissions and performance-based income.

However, in the fourth quarter, the firm saw a net loss attributable to shareholders of RMB 1.57bn, compared to positive net income of RMB 102.8m in the corresponding period in 2019, due to the recognition of a one-off settlement expense of RMB 1.83bn related to the settlement plan for investors of certain credit funds exposed to Camsing International, the results noted.

In 2019, around RMB 3.4bn in securities sold by Noah subsidiary Shanghai Gopher Asset Management for supply chain financing for Camsing were in danger of default

Part of the Mark Allen Group.