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Highest Performances Holdings Inc. (HPH) is a leading financial technology service group specializing in personalized wealth management for emerging middle-class and affluent families. The company also offers comprehensive support services for financial planners and diversified financial services for institutional clients. Through its innovative approach, HPH ensures that clients receive tailored financial solutions that align with their specific needs and goals.
Core Business
HPH focuses on three main business areas: wealth management for families, support services for financial planners, and institutional financial services. The company leverages cutting-edge technology to provide efficient, reliable, and effective financial solutions. Its wealth management services are designed to cater to the evolving financial needs of families, while its support services empower financial planners with tools and resources to better serve their clients. For institutional clients, HPH offers a comprehensive suite of financial services, including a one-stop trading platform that has gained significant traction.
Recent Achievements
In the first half of fiscal year 2024, HPH made notable advancements despite economic downturns and market uncertainties. The company refined its product offerings, established a multi-account system, and optimized system support, resulting in an enhanced experience for customers and financial advisors. Additionally, HPH's institutional business achieved significant milestones with the transaction value of publicly raised funds growing by 129% and the outstanding balance increasing by 456%.
Strategic Partnerships and Acquisitions
HPH has strategically positioned itself for future growth through key partnerships and acquisitions. The company completed a share exchange transaction with Fanhua Inc., acquiring a controlling equity interest. This acquisition aims to establish a leading global intelligent financial services platform. Furthermore, a framework agreement with Singapore White Group Pte. Ltd. has been established to leverage strengths in capital raising and mergers and acquisitions, accelerating HPH's global expansion.
Financial Performance
For the first half of the fiscal year 2024, HPH reported net revenues of RMB35.6 million (US$5.0 million), a 48.0% decrease from the previous year. Operating costs and expenses were RMB63.0 million (US$8.9 million), decreasing by 41.0%. Despite a challenging economic environment, HPH implemented cost-saving measures, resulting in a 40.7% reduction in management and sales expenses. The company's cash and cash equivalents increased significantly due to the acquisition of Fanhua.
Looking ahead, HPH is committed to maintaining a resilient stance amidst market dynamics while executing strategic plans to foster synergy with Fanhua, expand wealth management offerings, and advance its institutional business. Through ongoing digital transformation and intelligent development, HPH aims to enhance service experiences and achieve sustainable growth.
Highest Performances Holdings (NASDAQ: HPH) announced a collaboration with Singapore White Group Pte. to invest in premier international sports events, including the Davis Cup, Billie Jean King Cup, and the Formula 1 World Championship.
The investment totals $250 million, with estimated net profits of $8 million for 2024 tennis events, $20 million for 2025 tennis championships, $45 million for the 2025 F1, and over $300 million from 2025 to 2029 for combined tennis and F1 events. Key events include the 2024 Davis Cup Finals in Macao-Hengqin, the 2024 Billie Jean King Cup Finals in Guangzhou or Shenzhen, the 2025-2029 Tennis World Cup across various Chinese cities, and the 2025 F1 in Guangzhou.
CEO Yinan Hu noted that these investments would significantly advance HPH's internationalization strategy, generate substantial cash flow, and enhance the company's global image.
Fanhua announced the grant of share options to key employees as part of its 2022 Share Inventive Plan. On July 2, 2024, the Board approved issuing options for up to 6,900,000 American Depository Shares (ADS) to 15 management team members. The options have an exercise price of US$1.92 per ADS and are exercisable until July 15, 2024, subject to conditions. The company may offer a 3% per annum loan to facilitate the exercise. Employees receiving options must commit to a three-year service period. CEO Yinan Hu highlighted the confidence of key employees in Fanhua’s growth, aiming to align their interests with the company's long-term success.
Fanhua announced an expansion of its share repurchase program by an additional $20 million, raising the total to $40 million. As of June 30, 2024, the company had repurchased approximately 726,616 ADS for $5.4 million since December 2022. This highlights Fanhua's confidence in its long-term growth and commitment to enhancing shareholder returns.
Additionally, senior executives, including CEO Yinan Hu and CFO Peng Ge, will personally buy up to $5 million worth of Fanhua shares over the next 12 months. The repurchases will be funded via available cash reserves and personal funds.
The company's proactive measures and strong cash reserves ensure stability amid industry challenges. Fanhua's AI agent 'Du Xiaobao' will launch in August, enhancing customer service and operational efficiency. These steps aim to sustain long-term growth and value creation.
Highest Performances Holdings Inc. (NASDAQ: HPH) announced that its Puyi Fund's assets under advice reached RMB 24.7 billion as of June 21, 2024, marking a year-on-year growth of 188%. This sharp increase is attributed to the fund's strategic transformation, including product strategy adjustments and digital innovation. Puyi Fund's asset allocation services now span across various types of accounts to balance risk and ensure consistent returns. The company also implemented a comprehensive digital transformation, improving client services and enhancing retention rates to 75% as of June 2024. The fund has attracted significant institutional investments and established partnerships with 117 mutual fund companies, providing access to nearly 11,000 public funds. These initiatives aim to align with shifting investor preferences towards lower-risk assets in the Chinese market.
Highest Performances Holdings (HPH) announced that its subsidiary, Puyi Fund, achieved a portfolio balance of RMB24.7 billion as of June 21, 2024, a year-over-year increase of 188% from June 2023. This growth is attributed to strategic adjustments, digital transformation, and a new family wealth management account system focused on fixed-income and fund portfolio products. HPH encourages a 50%-80% allocation to 'Steady Growth' accounts to minimize risks. Digital transformation efforts, including big data and intelligent systems, have enhanced customer retention and personalized services. Puyi Fund also excelled in its institutional business, partnering with 117 public and 20 private fund managers, thus covering various market strategies.
Highest Performances Holdings (NASDAQ: HPH) reported a 48% revenue decrease to RMB35.6 million (US$5.0 million) for the first half of fiscal 2024, compared to RMB68.4 million in the same period in 2023.
The net loss increased by 5.7% to RMB33.3 million (US$4.7 million). Revenue from wealth management services fell by 43.4%, driven by a decline in both publicly and privately raised fund products.
Despite reduced revenues, HPH achieved significant growth in its institutional business, with transaction value and balances rising by 129% and 456%, respectively. The company also cut management and sales expenses by 40.7%.
The acquisition of Fanhua at the end of December 2023 significantly altered HPH's financial position, though its profits are not included in this period's results.
Looking forward, HPH aims to leverage strategic partnerships for global expansion and digital transformation to drive sustainable growth.
Highest Performances Holdings (NASDAQ: HPH) announced it will release its unaudited financial results for the first half of fiscal year 2024, which ended December 31, 2023, on May 30, 2024.
Senior management will host a bilingual conference call in English and Chinese to discuss the results and business development. The call is scheduled for May 30, 2024, at 9:00 PM U.S. Eastern Time (May 31, 2024, at 9:00 AM Beijing/Hong Kong Time).
Participants are encouraged to pre-register online and join 15 minutes before the call. A live and archived webcast will be available on the company's investor relations website.
Highest Performances Holdings Inc. (NASDAQ: HPH) has increased its shareholding in Fanhua Inc. to 51.1% by acquiring 565,000 American Depositary Shares on Nasdaq. The move showcases confidence in Fanhua's growth potential, with plans to further increase shareholdings due to the stock price undervaluing its long-term value.
Highest Performances Holdings Inc. (NASDAQ: HPH) has signed a third supplementary agreement with White Group to fund Zhongxin International Sports Group Co, for bidding on intellectual property rights of sporting events. HPH will own 26.5% equity in Zhongxin with all profits attributed to HPH. The agreement includes joint investments in major sports events like F1 and International Tennis Federation events.
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