Jupai Holdings Limited (NYSE:JP) Q4 2018 Earnings Conference Call - Final Transcript

Apr 23, 2019 • 08:00 am ET

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Jupai Holdings Limited (NYSE:JP) Q4 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Thank you for standing by for Jupai's Full Year 2018 Earnings Conference Call. At this time, all participants are in 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 this time.

I'd like to turn the meeting over to your host for today's conference, Mr. Harry He, Jupai's Investor Relations Director.

Executive
Harry He

Hello, everyone, and welcome to Jupai's earnings conference call for the full year ended December 31st 2018. Leading the call today is Mr. Jianda Ni, our Chairman and CEO, who will review the highlights for the full year of 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.

Before we continue, I'd refer you to our Safe Harbor statement in the earnings press release, which applies to this call, as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. 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 interpret his remarks for you.

Executive
Jianda Ni

(Foreign Language)

Executive
Harry He

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

Executive
Jianda Ni

(Foreign Language)

Executive
Harry He

2018 was challenging for Jupai on several fronts. During the year, Investors became increasingly conservative, as the Chinese government's focus on deleveraging at expense of economic growth and expanding US-China trade conflict contributed to an uncertain economic outlook. In addition, China's wealth management industry contributed to experience -- continued to experience a difficult transition period due to a tightening of regulations.

Executive
Jianda Ni

(Foreign Language)

Executive
Harry He

Amid this unfavorable environment, the aggregate value of wealth management products distributed by Jupai decreased by 44.3% year-over-year to RMB30.3 billion in 2018 and the total net revenue for 2018 declined by 22.5% year-over-year to RMB1.3 billion. We were however able to achieve an average one-time commission rate of 2.4% in 2018 compared to 1.9% in 2017 due to our enhanced bargaining power as real estate companies continued to face rising cost of capital. Based on our observation of the overall credit market since the beginning of 2019, we are confident in maintaining our average one-time commission rate at a healthy level in the next few quarters.

Executive
Jianda Ni

(Foreign Language)

Executive
Harry He

Looking into 2019, we remain cautiously optimistic about China's overall economic outlook, as the Government has introduced various stimulus policies to support private enterprises, especially SMEs, to enhance economic growth. The domestic equity market has also showed signs of recovery since the beginning of the year which we believe will help restore investor confidence and gradually increase appetite for wealth management products.

Executive
Jianda Ni

(Foreign Language)

Executive
Harry He

During these kind of industry conditions, Jupai will focus on developing new product categories, including real