GlobeNewswire Inc | Jun 7, 2021 06:00AM EDT

June 07, 2021

SHANGHAI, China, June 07, 2021 (GLOBE NEWSWIRE) -- Hywin Holdings Ltd. ("Hywin Wealth", Hywin, or the "Company", NASDAQ: HYW), a leading wealth management service provider in China, today announced its unaudited financial results for the third quarter of fiscal year 2021 (ended March 31, 2021).

Third Quarter Fiscal 2021 Highlights

-- Number of clients1 increased by 13.5% to 124,043 as of March 31, 2021 from 109,277 as of March 31, 2020. -- Number of active clients2 increased by 24.7% to 29,064 from 23,302 in the same period of 2020. -- Aggregate transaction value of wealth management products distributed on the Companys platform increased by 22.5% to RMB21.66 billion from RMB17.67 billion in the same period of 2020.Transaction value of wealth management products per relationship manager increased by 32.4% to RMB13.67 million from RMB10.33 million in the same period of 2020. -- Net revenues increased by 46.5% to RMB462.80 million (US$71.41 million) from RMB315.88 million in the same period of 2020.Net revenues per relationship manager increased by 58.3% to RMB292,173 from RMB184,618 in the same period of 2020. -- Net income increased by 97.6% to RMB61.87 million (US$9.55 million) from RMB31.31 million in the same period of 2020. -- Basic and Diluted earnings per American Depositary Share ("ADS") were RMB2.46 (US$0.38), compared to RMB1.25 in the same period of 2020.

Ms. Wang Dian, Chief Executive Officer and Director of Hywin Holdings Ltd., commented, In this quarter, we maintained robust growth in our client numbers and business volumes. This powered year-over-year increases of 22.5%, 46.5% and 97.6% in our wealth management product transaction value, net revenues, and net income, respectively. These achievements attest to our effectiveness in monetizing client relationships through segmented propositions and continued discovery of client needs, whilst unlocking efficiency gains through our technology and our transition into a nimble organization. Our relationship managers continued to increase their productivity, with net revenues per relationship manager increasing by 58.3% from the same period of 2020. This was accomplished by our investment in training, systematic cross-selling, and a gradual move from cash-based to equity-based incentives, which encourages an entrepreneurial pursuit of long-term success.

Mr. Zhou Huichuan, Chief Financial Officer of Hywin Holdings Ltd., stated, During this quarter, our strong net income growth was reinforced by our disciplined cost control. We also continued to execute our IBM-assisted digital transformation program, which further improved our operating efficiency. Looking forward, we will continue to leverage technology to optimize our cost structure and further improve our client services to augment sustained growth.

Third Quarter Fiscal 2021 Financial Results

Net Revenues

Total net revenues in the quarter ended March 31, 2021 increased by 46.5% to RMB462.80 million (US$71.41 million) from RMB315.88 million in the same period of 2020.

-- Net revenues from wealth management services in the quarter ended March 31, 2021 increased by 49.9% to RMB425.50 million (US$65.65 million) from RMB283.91 million in the same period of 2020, mostly due to expanded volumes in privately-raised products and the resultant increase in blended margins. -- Net revenues from insurance brokerage services in the quarter ended March 31, 2021 decreased by 14.7% to RMB25.77 million (US$3.98 million) from RMB30.20 million in the same period of 2020, as travel restrictions related to the pandemic remained in place. -- Net revenues from asset management services in the quarter ended March 31, 2021 increased by 265.5% to RMB5.33 million (US$0.82 million) from RMB1.46 million in the same period of 2020, driven by growing client interest in offshore funds and discretionary mandates managed by the Company. -- Net revenues from other services in the quarter ended March 31, 2021 were RMB6.20 million (US$0.96 million), mostly attributed to the Companys technology consulting services and other value-added services.

Operating Cost and Expenses

Total operating cost and expenses in the quarter ended March 31, 2021 increased by 35.8% to RM370.98 million (US$57.24 million) from RMB273.23 million in the same period of 2020, in line with the net revenue growth.

-- Cost of compensation and benefits in the quarter ended March 31, 2021 increased by 37.5% to RMB231.26 million (US$35.68 million) from RMB168.15 million in the same period of 2020, due to increased average business volume per relationship manager. -- Sales and marketing expenses in the quarter ended March 31, 2021 increased by 21.7% to RMB75.94 million (US$11.72 million) from RMB62.41 million in the same period of 2020, due to increased marketing and sales activities. -- General and administrative expenses in the quarter ended March 31, 2021 increased by 19.4% to RMB50.97 million (US$7.87 million) from RMB42.68 million in the same period of 2020, due to increased administrative personnel expenses in line with the expanded business scale. -- Other costs in the quarter ended March 31, 2021 were RMB 12.81 million (US$1.98 million), mainly due to scheduled cost recognition related to our ESOP.

Income from Operations

As a result of the foregoing, income from operations in the quarter ended March 31, 2021 increased by 115.3% to RMB91.82 million (US$14.17 million) from RMB42.65 million in the same period of 2020.

Net Income

Net income in the quarter ended March 31, 2021 increased by 97.6% to RMB61.87 million (US$9.55 million) from RMB31.31 million in the same period of 2020.

Earnings per ADS

Basic and diluted earnings per ADS in the quarter ended March 31, 2021 were both RMB2.46 (US$0.38), compared to RMB1.25 in the same period of 2020. Each ADS represents two of the Companys ordinary shares.

Balance Sheet

As of March 31, 2021, the Company had RMB404.14 million (US$61.50 million) of cash and cash equivalents and restricted cash, compared to RMB188.39 million as of June 30, 2020.

Business Outlook

For the quarter ended June 30, 2021, the Company expects its net revenues to continue to increase to be between RMB480 million and RMB510 million. This forecast only reflects the Companys current and preliminary views on the market and operational conditions, which are subject to change.

Recent Developments

On May 13, 2021, Hywin won the The Top 5 Most Influential Wealth Managers in China 2020 award from CVINFO, a renowned publication for Chinas private equity and venture capital industry, as a recognition of Hywins contribution in connecting leading alternative asset managers with high-quality limited partners such as high-net-worth individuals and institutional investors.

On May 15, 2021, Hywin entered into a collaboration agreement with WIND Info, a leading financial and market information provider in China, pursuant to which WIND Info will publish reports produced by Hywin Research Institute. This is a recognition of Hywins thought leadership on macroeconomics and investment management in China.

Conference Call Information

The Companys management team will hold a Direct Event conference call on Monday, June 7, 2021, at 8:00 A.M. Eastern Time (8:00 P.M. Beijing Time on the same day) to discuss the financial results. Details for the conference call are as follows:

Event Title: Hywin Holdings Third Quarter Fiscal 2021 Earnings Conference CallConference ID: 9388996Registration http://apac.directeventreg.com/registration/event/9388996Link:

All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique access PIN, which can be used to join the conference call.

A replay of the conference call will be accessible through June 15, 2021, by dialing the following numbers:

International: +612-8199-0299United States Toll Free: +1-855-452-5696Mainland China Toll Free: 400-632-2162Hong Kong, China Toll Free: 800-963-117Access Code: 9388996

A live and archived webcast of the conference call will also be available at the Companys investor relations website at ir.hywinwealth.com.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars in this press release were made at a rate of RMB6.57133 to US$1.00 for figures on the balance sheet as of March 31, 2021, RMB6.48134 to US$1.00 for figures on the income statement for the three months ended March 31, 2021, and RMB6.67384 to US$1.00 for figures on the income statement for the nine months ended March 31, 2021.

About Hywin Holdings Ltd.

Hywin (NASDAQ: HYW) is the third largest independent wealth management service provider in China, with a 7.5% market share in terms of 2019 transaction value, according to China Insights Consultancy. The Companys primary services are wealth management, insurance brokerage, and asset management. Wealth management is currently the Companys largest business segment, in which its onshore and offshore solution platform serves clients across generations. For more information, please visit https://ir.hywinwealth.com/

Safe Harbor Statement

This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as anticipate, estimate, plan, project, forecast, outlook, potential, continue, ongoing, expect, aim, believe, intend, may, should, will, is/are likely to, could and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Contact:Hywin Holdings Ltd.Jiawei ShenEmail: ir@chyjr.com

ICR, Inc.Robin YangPhone: +1 212-537-5797Email: HywinIR@icrinc.com

Media contact:ICR, Inc.Ker ZhengPhone: +86 139-2280-3249Email: HywinPR@icrinc.com

HYWIN HOLDINGS LTD. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except for per ADS data and percentages) (unaudited) 3 months 3 months 3 months ?? ended, ended, ended, 3/31/2020 3/31/2021 3/31/2021 RMB'000 RMB'000 USD'000 Change Net Revenues -Wealth management 283,912 425,503 65,651 49.9 % -Assets management 1,458 5,329 822 265.5 % -Insurance brokerage 30,200 25,772 3,976 (14.7 ) %-Other 311 6,198 957 1,892.9 % Total Revenue 315,881 462,802 71,406 46.5 % Operating Costs and Expenses -Compensation and benefits 168,150 231,258 35,681 37.5 % -Share-based compensation - 12,812 1,977 N/A -Sales and marketing 62,405 75,939 11,716 21.7 % expenses-General and administrative 42,675 50,973 7,865 19.4 % expensesTotal Operating Costs and 273,230 370,982 57,239 35.8 % Expenses Income from operations 42,651 91,820 14,167 115.3 % Other income/(expenses) -Interest income, net 106 704 109 564.2 % -Other non-operation 1,446 (2,206 ) (341 ) (252.6 ) expense, net %Total Other Income/ 1,552 (1,502 ) (232 ) (196.8 ) (expenses) % Income before tax 44,203 90,318 13,935 104.3 % Income tax expense 12,893 28,450 4,389 120.7 % Net income 31,310 61,868 9,546 97.6 % Other comprehensive Income -Foreign currency 2,360 616 95 (73.9 ) translation Loss/(gain) %Comprehensive Income 28,950 61,252 9,451 111.6 % Profit attributable to 31,310 61,868 9,546 97.6 % shareholders Income per ADS Income per ADS basic and 1.25 2.46 0.38 96.8 % diluted

HYWIN HOLDINGS LTD. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except for per ADS data and percentages) (unaudited) 9 months 9 months 9 months ?? ended, ended, ended, 3/31/2020 3/31/2021 3/31/2021 RMB'000 RMB'000 USD'000 Change Net Revenues -Wealth management 858,375 1,248,930 187,139 45.5 % -Assets management 2,807 12,016 1,800 328.1 % -Insurance brokerage 72,179 53,003 7,942 (26.6 ) %-Other 311 18,160 2,722 5,739.2 % Total Revenue 933,672 1,332,109 199,603 42.7 % Operating Costs and Expenses-Compensation and benefits 511,919 725,094 108,648 41.6 % -Share-based compensation (369 ) 12,812 1,920 (3,572.1 ) %-Sales and marketing 182,256 246,727 36,969 35.4 % expenses-General and administrative 127,933 144,717 21,684 13.1 % expensesTotal Operating Costs and 821,739 1,129,350 169,221 37.4 % Expenses Income from operations 111,933 202,759 30,382 81.1 % Other income/(expenses) -Interest income, net 279 1,336 200 378.9 % -Other non-operation (870 ) 5,476 821 (729.4 ) expense, net %Total Other Income/ (591 ) 6,812 1,021 (1,252.6 ) (expenses) % Income before tax 111,342 209,571 31,403 88.2 % Income tax expense 34,613 64,016 9,593 84.9 % Net income 76,729 145,555 21,810 89.7 % Other comprehensive Income -Foreign currency 3,807 (9,759 ) (1,462 ) (356.3 ) translation Loss/(gain) %Comprehensive Income 72,922 155,314 23,272 113.0 % Profit attributable to 76,729 145,555 21,810 89.7 % shareholders Income per ADS Income per ADS basic and 3.07 5.81 0.87 89.3 % diluted

HYWIN HOLDINGS LTD.CONSOLIDATED BALANCE SHEETS(unaudited) 6/30/2020 3/31/2021 3/31/ 2021 RMB'000 RMB'000 USD'000ASSETS Current assets Cash and cash equivalents 108,358 310,015 47,177Restricted cash 80,027 94,129 14,324Accounts receivable, net 403,693 516,617 78,617Due from related parties, net 321,772 173,496 26,402Deposits, prepayments and other current assets 43,451 58,684 8,931Total Current Assets 957,301 1,152,941 175,451 Non-current assets Property and equipment, net 34,116 20,078 3,055Intangible assets, net 29,423 26,165 3,982Long-term prepayments 1,808 4,513 687Deferred Tax Asset 2,583 324 49Total Non-current Assets 67,930 51,080 7,773 Total Assets 1,025,231 1,204,021 183,224 LIABILITIES AND SHAREHOLDERS? EQUITY Current Liabilities Commission payable 84,857 89,616 13,637Investors? deposit 74,262 86,984 13,237Income Tax Payable 115,432 111,656 16,991Due to related parties 59,254 96,775 14,727Other payable and accrued liabilities 168,887 151,315 23,028Total Current Liabilities 502,692 536,346 81,620 Non-current liabilities Commission payable-non current 18,321 11,850 1,803Deferred Tax Liability 3,961 3,806 579Total Non-current Liabilities 22,282 15,656 2,382 Total Liabilities 524,974 552,002 84,002 Shareholders' Equity Ordinary shares (US$0.0001 par value; authorized500,000,000 shares; issued and outstanding50,000,000 shares 34 37 6 as of June 30, 2020 and 56,000,000 shares asof March 31, 2021)Additional paid-in capital 500,581 497,026 75,636Statutory reserves 52,959 52,959 8,059Accumulated gain/(loss) (47,056 ) 98,499 14,989Other comprehensive income/(loss) (6,261 ) 3,498 532 Total Shareholders' equity 500,257 652,019 99,222 Total Liabilities and Shareholder's equity 1,025,231 1,204,021 183,224

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1 Clients are those who had conducted at least one transaction with the Company.2 Active clients are those who purchased products distributed by the Company during the specified period or those who maintained as holders of the Companys products within the given period.3 China Foreign Exchange Trade System USD/RMB mid-point rate on March 31, 2021.4 An appropriately weighted average exchange rate for the reporting period.