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
Executive
Harry He

Contracts with Customers on a modified retrospective basis. The adoption has no material impact on the Company's financial positions, results of operation or cash flows.

Operating costs and expenses for the full year of 2018 were RMB1,481.7 million, a 25.3% increase from 2017, largely due to higher marketing expenses, G&A costs and impairment loss of goodwill of $39 million, which was the impairment of goodwill from Scepter acquisition in 2015. Operating margin for the full year of 2018 was minus 12.1% compared to 30.7% in 2017.

Loss from equity in affiliates for the full year of 2018 was RMB113.5 million as compared to income from equity in affiliates of RMB2.6 million in 2017. The loss was primarily attributable to RMB90.8 million of impairment loss relating to the Company's investment in Shanghai Runju Financial Information Service, a non-controlled investee of the Company. Due to the new industrial regulations implemented since March 2018, Runju's legacy business model had to be discontinued. By the end of 2018, an impairment provision for the full book value of investment in Runju had been provided.

Non-GAAP net income attributable to ordinary shareholders for the full year of 2018 was RMB13.0 million, a 97.1% decrease from 2017. Non-GAAP net margin attributable to ordinary shareholders for the full year of 2018 was 1% as compared to 26.6% in 2017. Non-GAAP net income attributable to ordinary shareholders per diluted American ADS for the full year of 2018 was RMB0.37 as compared to RMB13.24 in 2017.

Net loss attributable to ordinary shareholders for the full year of 2018 was RMB387.7 million compared to net income attributable to ordinary shareholders of RMB409.5 million in 2017. Net margin attributable to ordinary shareholders for the full year of 2018 was minus 29.3% compared to 24.0% in 2017. Net loss attributable to ordinary shareholders per basic and diluted ADS for the full year of 2018 was RMB11.60 and RMB11.60 respectively as compared to net income attributable to ordinary shareholders per basic and diluted ADS of RMB12.57 and RMB11.95 respectively in 2017.

Looking to our balance sheet and cash flow, as of 31st December 2018, the Company had RMB1,302.6 million in cash and cash equivalents and restricted cash compared to RMB1,527.8 million as of 31st of December 2017. Net cash used in operating activities for the full year of 2018 was RMB62.9 million. Net cash used in investing activities for the full year of 2018 was RMB40.9 million. Net cash used in financing activities for the full year of 2018 was RMB121.4 million.

Given the high uncertainty in the current macro environment, the management believes that it will be more prudent for us to cease providing specific guidance on our financial outlook. However, we do plan to offer investor official guidance again when the industry and the market outlook becomes clear. That concludes our prepared remarks. I will now turn the call back to the operator to begin the Q&A session. Operator?