Jupai Holdings reported net revenues in the third quarter this year of RMB182.1m ($25.5m), a decrease of 41.4% from the corresponding period in 2018, according to the unaudited financial results for the third quarter of 2019, released last Friday.
“Concerns over a slowdown in overall economic growth and international trade conflicts continue to impact investor confidence,” said Jianda Ni, chairman of the board and chief executive officer in an analyst conference call last Friday.
“More specifically, we believe that the supply and demand within the wealth management industry remained under pressure in the third quarter of 2019 mainly due to macroeconomic policies with continued focus on deleveraging of the overall economy and the tightening regulatory requirement and supervision of financial institutions,” he added.
The chairman further noted that “in terms of supply, if we use the privately-offered fund as an example, it has been very difficult for wealth management companies to complete the filing process of privately-offered funds over the past few quarters.”
“On the other hand, in terms of demand, investors had been very cautious and conservative over the past quarters, given their concerns and issues such as slowdown of economic growth and various negative news flow about the wealth management industry and the uncertainty from international political and economic conflicts.”
For the first nine months of 2019, net revenues were RMB649.0m, a decrease of 45.3% from the same period in 2018.
Further reducing
Net loss attributable to ordinary shareholders in the third quarter of 2019 was RMB47.9m, compared to net income of RMB1.7m for the corresponding period in 2018.
For the first nine months of 2019, net income was RMB134.5m compared to RMB205.4m for the same period last year, according to the financial results.
In 2018, the firm posted a net loss on lower revenues and higher costs and took steps to cut costs. As of the end of the second quarter this year, Jupai said it had cut staff to 1300 from 2,500 at the beginning of 2018.
In a conference call on Friday, Ni said that “Jupai reduced the number of staff to about 1,100 by the end of third quarter 2019. We also condensed our coverage network from 72 office covering 46 cities at the beginning of 2018 to 54 office covering 44 cities by the end of third quarter this year.”
China’s other NYSE-listed wealth manager, Noah Holdings, also reported that the income from operations in Q3 saw a sharp drop (50.6%), compared with the same period last year.
The firm attributed the reasons for the decline to China’s slowing GDP growth and the US-China trade dispute.
