Posted inNews

Pandemic hits Jupai revenues in Q1

The demand for wealth management products distributed by the firm was down during the period.

Jupai Holdings has reported that revenues during the first quarter were down 65.6% to RMB 96.6m ($13.6m) from RMB 281m during the first quarter last year, according to the firm’s unaudited financial results.

Among the revenues that were hit was one-time commissions, which decreased 32.6% to RMB 39.5m. The decrease was attributed to less wealth management products distributed.

“The COVID-19 outbreak has affected the demand for wealth management products in the first quarter and posed challenges to the wealth management industry and for Jupai as well,” Jianda Ni, Jupai’s chairman of the board and CEO, said in a conference call yesterday.

According to the report, Jupai’s aggregate value of wealth management products distributed during the first quarter totalled RMB 1.4bn, which is almost just half of the value distributed during the same period last year. However, while the value of wealth management offerings was down across all product types, secondary market equity products were up by nearly 300% in Q1.

Wealth management products distributed by Jupai Holdings in Q1 2020, 2019

Source: Jupai Holdings

Similarly, Noah Holdings also recorded a decrease in the value of wealth management products distributed during the period across all products, with the exception of public securities products, which include mutual funds and public securities.

Wealth management products distributed by Noah Holdings in Q1 2020, 2019

Source: Noah Holdings

In total, Jupai reported a net loss of RMB 19.9m during the first quarter. However, the loss was smaller compared with RMB 25.6m losses in Q1 last year, according to the report.

“This reflects the positive impact that our cost control measures have had on our bottom line as well as our ongoing efforts to enhance corporate management,” Ni said during the call.

Cost control measures include a reduction in staff count. By the end of 2019, the firm’s total staff count was 900 from 2,500 at the beginning of 2018. The number of sales networks was also down to 51 offices from 71 during the same period.

Part of the Bonhill Group.