Stock to Track: Jupai Holdings Limited (NYSE: JP)

Charles Barnes

I am Charles Barnes and I focus on breaking news stories and ensuring we (“Import Tourism”) offer timely reporting on some of the most recent stories released through market wires about “Financial” sector.

I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Import Tourism specializing in quicker moving active shares with a short term view on investment opportunities and trends.

Address: 3819 Sun Valley Road, George, WA 98824, USA
Phone: (+1) 509-785-0774
Email: charlesbarnes@importtourism.com
Charles Barnes

SHANGHAI, June 27, 2019 – Shares of Jupai Holdings Limited (NYSE: JP) declined -1.29% to $2.29. The stock grabbed the investor’s attention and traded 21.907K shares as compared to its average daily volume of 132.06K shares. The stock’s institutional ownership stands at 23.40%.

Jupai Holdings Limited (JP) reported that net revenues for the full year 2018 were RMB1,321.70M (US$192.20M), a decrease of 22.5% from 2017.

  • Loss from operations for the full year 2018 was RMB159.90M (US$23.30M), contrast to income from operations of RMB523.60M in 2017.
  • Non-GAAP net income attributable to ordinary shareholders for the full year 2018 was RMB13.00M (US$1.90M), a decrease of 97.1% from 2017.
  • Net loss attributable to ordinary shareholders for the full year 2018 was RMB387.70M (US$56.40M), contrast to net income attributable to ordinary shareholders of RMB409.50M in 2017.

FULL YEAR 2018 FINANCIAL RESULTS

Net Revenues:

Net revenues for the full year 2018 were RMB1, 321.70M (US$192.20M), a 22.5% decrease from 2017, mainly because of decreases in both one-time commissions and other service fees.

  • Net revenues from one-time commissions for the full year 2018 were RMB737.50M (US$107.30M), a 29.0% decrease from 2017, mainly as a result of a decrease in the aggregate value of wealth management products distributed by the Company.
  • Net revenues from recurring management fees for the full year 2018 were RMB435.50M (US$63.30M), a 19.8% increase from 2017, mainly because of a boost in the moving average value of assets under management. RMB61.60M (US$9.00M) and RMB81.70M carried interest were recognized as part of Jupai’s recurring management fees for the full year 2018 and 2017, respectively.
  • Net revenues from recurring service fees for the full year 2018 were RMB64.30M (US$9.40M), a 38.7% decrease from 2017, mainly because the Company offered ongoing services to fewer product suppliers. The Company recognized RMB0.30M (US$0.040M) and RMB13.80M variable performance fees for the full year 2018 and 2017, respectively.
  • Net revenues from other service fees for the full year 2018 were RMB84.40M (US$12.30M), a 57.5% decrease from 2017, mainly because of a decrease in sub-advisory fees collected from other companies.

Operating Costs and Expenses:

Operating costs and expenses for the full year 2018 were RMB1, 481.70M (US$215.50M), a 25.3% increase from 2017.

  • Cost of revenues for the full year 2018 was RMB684.60M (US$99.60M), a 7.2% decrease from 2017, mainly because of a reduction in performance-based compensation as a result of a decline in the aggregate value of wealth management products distributed.
  • Selling expenses for the full year 2018 were RMB303.20M (US$44.10M), a 7.4% increase from 2017, mainly because of the increase in marketing expenses.
  • General and administrative expenses for the full year 2018 were RMB274.80M (US$40.00M), a 34.7% increase from 2017, mainly because of the increase in payroll expenses and the provision for doubtful accounts of certain product providers.
  • Impairment loss of goodwill for the full year 2018 was RMB267.90M (US$39.00M), which was the impairment of goodwill from Scepter acquisition in 2015.
  • Other operating income (government subsidies) received by the Company for the full year 2018 was RMB48.70M (US$7.10M), an 18.5% increase from 2017. Government subsidies were recorded when received, with their availability and amount dependent upon government administrative policies.

Operating margin for the full year 2018 was -12.1%, contrast to 30.7% in 2017.

Income tax expenses for the full year 2018 were RMB129.90M (US$18.90M), a slight increase from 2017.

Loss from equity in associates for the full year 2018 was RMB113.50M (US$16.50M), as contrast to income from equity in associates of RMB2.60M in 2017. The loss was mainly attributable to RMB90.80M (US$13.20M) of impairment loss regarding the Company’s investment in Shanghai Runju Financial Information Service Co., Ltd. (“Runju”), a non-controlled investee of the Company. Because of new industry regulations implemented since March 2018, Runju’s legacy business model had to be suspended. By the end of 2018, an impairment provision for the full book value of investment in Runju had been offered.

Balance Sheet and Cash Flow:

As of December 31, 2018, the Company had RMB1,302.60M (US$189.50M) in cash and cash equivalents and restricted cash, contrast to RMB1,527.80M as of December 31, 2017.

Net cash used in operating activities for the full year 2018 was RMB62.90M (US$9.10M).

Net cash used in investing activities for the full year 2018 was RMB40.90M (US$5.90M).

Net cash used in financing activities for the full year 2018 was RMB121.40M (US$17.70M).

JP has a market value of $78.32M while its EPS was booked as $-2.32 in the last 12 months. The stock has 34.20M shares outstanding. In the profitability analysis, the company has gross profit margin of 37.40% while net profit margin was -45.10%. Beta value of the company was 1.74; beta is used to measure riskiness of the security.

Charles Barnes

Charles Barnes

I am Charles Barnes and I focus on breaking news stories and ensuring we (“Import Tourism”) offer timely reporting on some of the most recent stories released through market wires about “Financial” sector. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Import Tourism specializing in quicker moving active shares with a short term view on investment opportunities and trends. Address: 3819 Sun Valley Road, George, WA 98824, USA Phone: (+1) 509-785-0774 Email: charlesbarnes@importtourism.com