Jupai Holdings Limited (NYSE:JP) Q3 2018 Earnings Conference Call Transcript

Dec 07, 2018 • 07:00 am ET

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Jupai Holdings Limited (NYSE:JP) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Thank you for standing by for Jupai's Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Please note today's conference call is being recorded. If you have any objections, you may disconnect at any time.

I would now like to turn the meeting over to your host for today's conference Mr. Harry He, Jupai's IR, Director. Thank you. Please go ahead sir.

Executive
Harry He

Thank you, operator. Hello everyone and welcome to Jupai's earnings conference call for the third quarter ended September 30, 2018. Leading the call today is Mr. Jianda Ni, our Chairman and CEO, who will review the highlights for the third quarter 2018. I will then discuss our financial results. We will then open the call to questions, at which time our CFO, Ms. Min Liu, will also be available.

(Forward-Looking Cautionary Statements)

Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in Renminbi.

I will now turn the call over to Mr. Jianda Ni, our Chairman and CEO, and I will do the interpretations for his remarks for you.

Executive
Jianda Ni

(Foreign Language)

Thank you, Harry, and welcome everyone to today's conference call.

(Foreign Language)

China's wealth management industry has been facing strong headwinds over the past few quarters. Since early 2018, we have seen investors becoming increasingly conservative due to an uncertain economic outlook in China and globally. A weakening real economy, as a result of deleveraging and the tightened regulations in the financial services industry. As a result, the aggregate value of wealth management products distributed by Jupai, during the first nine months of 2018, decreased by 32.8% from that in the corresponding period in 2017 to RMB25.9 billion.

(Foreign Language)

However, as real estate companies continue to face rising cost of capital, we have benefited from our enhanced bargaining power. Our average one-time commission rate reached 2.8% in the third quarter, up from 2.2% in the corresponding period in 2017, reflecting Jupai's competitive advantage across the wealth management industry value chain.

(Foreign Language)

Leveraging our rich resources and network within the real estate industry, Jupai remained dedicated to developing high-quality real estate related products, during the first nine months of 2018. Our total assets under management grew to RMB57.8 billion, as of September 30, 2018, up 15.3% year-over-year. Looking ahead, in order to build a healthy long-term growth rate, we will put more effort into the development of proactively managed funds, further diversify the industries underlying our products and continue to enhance the quality of our AUM, so as to create room for further growth in recurring management fees and performance fees.

(Foreign Language)

Although we expect China's wealth and asset management industry to remain in a transition period given the current macro-level deleveraging and changing regulatory landscape. We believe that China's decades of rapid