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spk02: Ladies and gentlemen, welcome to Puyi Inc's fiscal year 2023 earnings conference call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a question and answer session. For your information, today's conference call is being recorded. This conference call is also being broadcasted live over the internet and will be available for replay purposes on the company's website. I would like to turn the meeting over to your first speaker today, Ms. Jing He, Puyi's General Manager of Financial Reporting Department. Thank you. Please go ahead.
spk00: Thanks, operator. Good evening. Welcome to our earnings conference call for the fiscal year 2023. Our annual report on Form 20F has been uploaded to the website of U.S. Security and Exchange Commission earlier today, and it's also available on our IR website. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the United States Private Security Litigation Reform Act of 1995. The accuracy of these statements may be impacted by a number of risks and uncertainties that could cause our actual results to differ materially from those projected or anticipated. Such risks and uncertainties include, but not limited to, those highlighted in our filings with the SEC, including our 20F. We do not undertake any obligation to update these forward-looking statements, except as required under the applicable law. Joining us today are our Chairman of the Board and Chief Executive Officer, Mr. Yong Ren, and Chief Financial Officer, Mr. An Ning Hu. Mr. Ren will first walk you through our business and financial conditions of the fiscal year 2023, and then, together with Mr. Hu, He will answer your questions after the prepared remarks. Now I will turn the call over to Mr. Ren. Good evening, everyone. Welcome to our 2023 fiscal year earnings conference call. Here with me is our chief financial officer, Mr. Anlin Hu. First of all, I will give you an overview of our financial and operational conditions for the fiscal year 2023. Then I will discuss briefly our business outlook for the future. Finally, we will have a question and answer section. to answer any questions you may have. 首先,我先講述公司的業務概況和主要經營舉措。 Now, let me present an overview of our operational results and business initiative in the fiscal year 2023.
spk01: In the fiscal year 2023, insurance by various factors such as strict control measures due to the COVID-19 pandemic in late 2022, the trade tension between U.S. and China, and the geopolitical conflicts
spk00: the economic situation has been complex and challenging. The capital market has shown a volatile trend, resulting in a lack of investor confidence and relatively weak overall investment sentiment.
spk01: On the other hand, the demand for high-quality customers, expansion of insurance, trust, and other additional business, trust and acquisition of new buildings, the company has established 366 trust units, and the trust assets have exceeded 4.1 billion yuan. On the other hand, we continue to reduce the cost-effectiveness, strengthen the business movement of professional ability construction and training internal workers, and the operating cost of this fiscal year has decreased by 14%. Jin Ying Li Run Tong Bi Jian Kui, 28%.
spk00: Against this backdrop, our management team has adhered to the principle of student management in the fiscal year 2023. On the one hand, we focused on our core business and rigorously developed institutional bright business. With transaction value of our public-raised fund products contributed by institutional clients, existing RMB 5 billion. representing a year-on-year growth of approximately 266%. On the other hand, we explored the demands of high net worth clients and expanded family office business by promoting insurance premium trust products. As of June 30, 2023, we had assisted an aggregate of 366 affluent family clients to set up trust accounts with entrusted assets of RMB 4.1 billion, for our trust consulting service. Furthermore, we continuously work on reducing costs and increasing efficiency while enhancing professional skills by providing internal training. In the fiscal year 2023, we were able to reduce our operating costs by 34% compared to the previous year, and our operating loss also reduced by 28% as well. 本财年,公司的主要经营状况 Our main business operations and strategy during the fiscal year 2023 are reported as follows. Firstly, we focus on our core business of distributing market-oriented funds to individual investors. and strengthen our professionalism to meet individual investors' needs. 一方面,長期陪伴,與投資者共同走過迷霧。 On the one hand, by accompanying investors' food uncertainties, we aim to strengthen long-term relationships with them. Since January 2023, China has entered a post-academic era, but the expected economic revenge rise did not come as expected, followed by a poor economic and capital market performance, which has affected investor confidence.
spk01: The company insists on long-term investment education to comfort customer investment emotions. At the same time, it introduces external investment services to strengthen the product analysis of public funds and investment, and seeks to reduce product fluctuation and stabilize customer investment emotions under the soft market performance. We are very happy to see that after the development of investment business, we have gained the trust and praise of a large number of customers. As of June 2023,
spk00: To address this issue, we adhere to investment education of long-term investment mechanism to boost our clients' investment sentiment. At the same time, collaborating with outside professionals, we introduce our investment advisory service to our clients to improve analytics of our fund product portfolios to reduce product volatility under the current weak market performance and to stabilize our clients' investment sentiment. We are pleased to see that after carrying out this initiative, we have gained trust and faith of our clients. As of June 30, 2023, most of our clients' cool-hold portfolio products were willing to purchase our investment advisory service, which could bring us new source of revenue growth. On the other hand, we have enriched our fund product lineup and implemented precise marketing strategies.
spk01: We deeply understood the importance of enhancing our own investment research capabilities.
spk00: and providing more fun products to meet the diverse needs of investors.
spk01: In terms of public raised fund products, we further expanded our public raised fund product portfolios
spk00: by increasing the number of public fund companies we source products from, which increased from 89 as of June 30, 2022 to 103 as of June 30, 2023, including a total of approximately 7,646 public-raised fund products. In addition, we added two new fund product portfolios according to the needs of clients in the market. including the automatic redeem product, the target yield product, which automatically redeems when reaching the target profit rate, and the smart regular investment product, a smart product which periodically advises investors to contribute different amounts of investments based on the current market condition. Through the new product spring in new investment strategy, these two differentiated and customized products meet the needs of clients and stabilize the balance of public-rate fund products.
spk01: And regarding private-rate fund products, we have further enhanced the diversity of our private fund strategies
spk00: particularly by timely launching convertible bonds and commodity futures strategies based on market demand. These strategies can capture profit opportunity for clients in volatile market conditions. Secondly, we upgraded the institution transaction platform based on our core transaction system to achieve breakthrough and growth of institutional business. institutional investors possess characteristics such as large capital size, stable investment, and high-performance thickness. Gaining favor from institutional investors plays an important role in the next phase of development for our company's public-raised fund business. In the fiscal year 2023, We have increased investment in the transaction platform designed for institutional investors based on our core system and have attracted a number of institutional investors. We believe that the upgrade and construction of the institutional transaction platform will soon bring returns to the growth of the public-raised fund business. 本财年公司的机构业务已成功破局,实现了对银行、保险、证券、
spk01: In the fiscal year 2023, our institutional business in the financial institution market achieved a breakthrough.
spk00: We currently have institutional clients covering most types of financial institutions, including banks, insurance companies, security companies, future companies, and trust companies. In the fiscal year 2023, the transaction value of public-raised fund products contributed by institutional clients exceeded RMB 5 billion. Thirdly, we will rigorously develop our family office business by promoting insurance premium trust products. And the number of completed trust consulting service projects reached a new record high.
spk01: 我们相信公司在高净值客户服务领域的能力将不断完善, 为客户创造更大的价值,并取得更加稳定和可持续的发展。 As of June 30, 2023, we had assisted an aggregate of 366 affluent family clients to set up trust accounts with entrusted assets existing RMB 4.1 billion. For our trust consulting service,
spk00: At the same time, we have diversified and will continue to diversify our service offering for our high net worth clients through establishing cooperation with education service providers, tax firms, law firms, healthcare service providers, and other professional firms. We believe that through our comprehensive service offering, our capability in serving high net worth clients will continue to improve. creating greater value for clients and achieving a more stable and sustainable development. 四,IT系统自主可控,精益求精,助力核心业务发展。 五,We develop a self-developed IT infrastructure to assist in the continuous improvement of our core business. 本财年我们集中资源,以助力重点业务发展为核心,聚焦股益基金平台,机构业务系统, 和加辦業務系統建設,以及核心系統自研的穩步推進。 In the fiscal year 2023, we have concentrated our resources on supporting the development of our core business. We have placed emphasis on upgrading the Puyi Fund app, institutional transaction platform, family office business internal system, and our core transaction system.
spk01: 第一,Puyi基金平台,圍繞第一站式綜合投戶服務平台, For the Puyi Fund app, we further improved it as a full-scope online transaction processing service platform.
spk00: We successfully upgraded its intelligent investment advisory system through digitalization and artificial intelligence. integrating companionship and advisor service to the client's entire investment lifecycle.
spk01: 第二,机构业务系统, 本财年上线了一年同系统, 实现与金融机构系统对接, 助力金融机构客户的开拓与发展, 同时对机构系统功能进行了优化与迭代, 进一步提升了服务水平。 And in terms of institutional transaction platform,
spk00: we have launched a smart port system to connect with other financial institution systems to support the development and expansion of our financial institutional clients. We have also optimized and integrated the functionality of the institutional transaction platform, further enhancing our service level.
spk01: For our family office business internal system,
spk00: We have focused on three key aspects. We have integrated our IT infrastructure to connect with other trust company systems and their information network, achieving information flow digitalization and improving trust process efficiency. And we have strengthened our digitalization construction by opening self-service channels and allowing our financial advisors real-time tracking of trust progress and status Lastly, we have overall optimized and improved our family office business internal system to better support the development of our family office business.
spk01: Last, in terms of core transaction system, we have replaced and integrated
spk00: the functionality by expanding the existing functional system, such as adding payment systems and investment advisory systems. 五,深度优化组织及费用管理,降本效果显著。 六,we deeply optimize our organization and expense management, achieving a significant cost reduction. 首先,营销费用管控方面,
spk01: 在目前外部经营环境并未完全好转,公司尚未实现盈利的大背景下, 本财年已将公务基金组合账户的营销费用从按新增账户数进行奖励调整, 为按照新增投资额进行奖励。 In terms of marketing expense control, considering the current external operating environment and the companies yet to achieve profitability,
spk00: we have changed our marketing initiative for public-raised fund products portfolio from stimulating the growth of new accounts to stimulating the growth of new investments. And in terms of organizational structure, we direct our one subsidiary and close several branch office with long-term losses and minimal business activity in conjunction with personnel optimization. As of June 30, 2023, the number of employees decreased by approximately 48%, compared to that on June 30, 2022, while the office area of the headquarters decreased by approximately 40%, and the office area of the branch office decreased by approximately 60%. 總統上,本台年我們已極大減輕公司的管理壓力和資源消耗, In all, during the fiscal year 2023, we have significantly alleviated resource consumption, resulting in a 34% year-on-year decrease in operating costs.
spk01: 二,接下來是本次發布會的第二部分內容。 我們將簡單介紹公司本彩聯的財務情況。 Next,
spk00: I will briefly discuss the financial condition of our company in the fiscal year 2023.
spk01: 本财年总营业收入为人民币1.1亿元, 比去年同期人民币1.9亿元减少39.4%, 按各业务线情况如下。 Our net revenue for the fiscal year 2023 will RMB 114.4 million, USD 15.8 million.
spk00: with a decrease of 39.4% year-on-year as compared to RMB 188.7 million in the fiscal year 2022. Now next turn to each individual business line.
spk01: 首先是财富管理业务。 First, for our wealth management service. 本财年财富管理营业收入为人民币9,501.3万元,比去年
spk00: net revenues generated from our wealth management service decreased year-on-year by 44.6%, from RMB 171.5 million in the fiscal year 2022 to RMB 95 million, US dollar 13.1 million. 其中,本台年私募基金產品收入為人民幣2574萬元,
spk01: net revenues generated from distribution of privately raised fund products decreased year-on-year by 58.2%, from RMB 61.6 million in the fiscal year 2022 to RMB
spk00: In the fiscal year 2023, the decrease was primarily due to, first, the investors' negative sentiments for private raised fund products and other high-risk products, and the investors' willingness to redeem funds has increased due to market volatility. Therefore, during the reporting period, both the transaction value and outstanding balance of our private raised fund products have decreased. resulting in a decrease in commission income, including management fees. And second, the performance-based income of RMB 1.8 million, your solar 0.3 million in the fiscal year 2023, as compared to RMB 3.1 million in the fiscal year 2022, representing a year-on-year 40.2% decrease. 二,接着是资产管理业务。
spk01: Second, for our asset management service,
spk00: Net revenue generated from asset management service in the fiscal year 2023 was RMB 2 million, US dollar 0.3 million, representing a 66.3% year-on-year decrease from RMB 5.9 million in the fiscal year 2022. The decrease was primarily due to a 96% decrease in performance-based fees generated by our actively managed front-end funds from RMB 2.4 million in the fiscal year 2022. and to RMB 96,000, US dollar 13,000 in the fiscal year 2023.
spk01: Last, for our other service, revenue from other service in the fiscal year 2023 was RMB 17.4 million, US dollar 2.4 million, increased by 54.2% year-on-year from RMB 11.3 million in the fiscal year 2022.
spk00: The increase was mainly attributed to the growth in trust consulting service and insurance service.
spk01: 第三部分,我們將簡單講述公司未來的規劃與何展望。 Last but not the least, let's elaborate on our strategy plans and outlooks for the future. 在當前大環境不好的背景下, The company will continue to develop through the efforts of the management team and the efforts of all employees. Although facing challenges, there are also factors that make the policy good and stabilize the capital market, providing the company with a bright long-term prospect. For example, in July 2023, the Central Political Bureau Conference, the State Council of the State Council of the State Council of the State Council of the State Council of the State Council of the State Council against the backdrop of the current unfavorable environment. We will strive for sustainable development through the efforts of management and all employees.
spk00: Despite facing challenges, there are also factors such as favorable policies that provide us with bright long-term prospects. For example, in July 2023, the 2023 July Politburo meeting and the State Council Executive Meeting made consecutive statements to increase the capital market and boost investor confidence. Then in August, multiple positive news were released, including the announcement by the Ministry of Finance to halve the stamp duty, the announcement by China's Security Regulatory Commission to slow down the pace of IPOs in China and control the reduction of shareholdings for large shareholders and encourage margin financing. We will closely follow the national policies and focus on the following key areas in the future. First, to further enrich the product portfolio to seize opportunities for development.
spk01: This type of product provides 3.5% interest rate, which has become a history at the moment. The large number of investors, especially middle-sized investors, are eager to find a low-risk, stable and effective replacement plan. The company used its own investment ability and long-term accumulation of public fund products to build a combination product with a profit of 4.5%, which was launched in September 2023. The company predicts that the product can meet the needs of investors. The distribution of public-raised fund product portfolios is our core and main business.
spk00: characterized by public-raised fund products' visibility and transparency. We believe that public-raised fund product portfolios will become the preferred financial products for clients seeking stable returns. As bank interest rates decline and traditional insurance annuity products, which have 3.5% annual compound interest rate, become history, investors, particularly middle-class investors, are more inclined to products with lower volatility or more pronounced returns. Timely utilizing our own research and investment capabilities, along with the long-term accumulation of diversified public-raised fund products, we have developed a portfolio product with an expected yield of 4.5%, which has been launched in September 2023. We believe that this product will meet the urgent needs of investors and can serve as an effective to maintain and expand our client base. Looking ahead, as the financial market continues to develop and the demand of investors for stable returns increased, the public-raised fund product portfolios will become and continue to play an important role in the business of third-party fund distribution companies like us. On the other hand, we will continue to upgrade the offering of privately raised fund products and replace the old products with the new exceptional and distinctive fund products, enriching our equity investment strategies and enhancing the generation of excess returns for our clients.
spk01: Recently, public fund companies have continuously reduced the cost of acquisition and management fees, which has had an impact on the company's future income. But in the long run, the company will seriously listen to the needs of customers, provide professional investment services through continuous optimization of product strategies, and launch more software-based products, giving customers steady happiness, while also protecting the company's base and achieving continuous growth of the customer group, allowing the company to develop steadily.
spk00: Indeed, the recent reduction in subscription and management fees by public-raised fund companies has had an impact on our future revenue. However, in the long run, we will listen carefully to the needs of our clients, continuously optimize our product strategies, provide professional investment services, and launch more stable products to provide clients with a sense of stability and well-being. At the same time, this will help to maintain our foundation and achieve continuous growth in our client base, ensuring steady development of our company. 二,強化大客戶思維及積極開源,大力拓展機構業務。 Second, to strengthen the mindset of serving large institutional clients and actively expand institutional business. 隨著金融市場的不斷發展,機構客戶業務 With the continuous development of the financial market, the institutional business holds tremendous potential for third-party fund distribution companies like us, in particular, banks and insurance companies as clients. process significant scale and extensive influence in the financial sector, making them to be the important partners for our company. In the future, we will strengthen the mindset of serving large institutional clients, establish deep partnership with key institutional clients, and assign dedicated teams for institutional clients' maintenance. Through the cooperation with outside investment research teams, professionals of fully family office departments, and other resources. We expect to empower our institutional clients, deepen our presence in the banking and insurance industry to achieve multi-dimensional and profound strategic cooperation, expand business scale with key institutional clients, and to stabilize the foundation of our institutional business.
spk01: Three, IT system needs to be optimized.
spk00: to continuously optimize our IT system to support the development of our core business.
spk01: In the future, we will, based on business development needs and with a focus on serving financial advisors,
spk00: concentrate on the digitalization and intelligent construction of core business operations.
spk01: Key aspects include For our core transaction system,
spk00: We will work on effectively allocate resource and systematically advance our self-developed process and place emphasis on paying routing systems. This includes connecting with multiple banks through direct channels. There's maximizing efforts to reduce the payment fees and enhance the user experience. 第二,普逸基金平台,强化普逸基金平台数字化智能化建设,提升线上运营能力。 完善账户资产配置体系和推荐体系,提升用户粘性和活跃度,带动交易和存量增长。 And for our Pui Fund app, we will sharpen its digitalization and intelligence construction, enhance online operational capabilities, improve the asset allocation and recommendation system, and increase user stickiness and activity, drawing fund transaction value and daily outstanding balance to grow.
spk01: For our institutional transaction platform, we will fully support the development of institutional business
spk00: By improving platform functionality based on the needs of our institutional clients, building upon our self-developed cost transaction system, we will construct a platform that supports various business developments, including fascinating the transaction of private raised fund products for institutional clients. 第四,安理財師平台不斷提升理財師活躍度,加強理財師的管理。
spk01: 一方面,公司将逐步推进会员管理体系搭建,优化会员体验,提高会员 忠诚度。 另一方面,开发数据可实化功能,实现基金销售数据跟踪及分析,更好地助力理财师开展基金业销售。 Last, for our iFinancial Planner app, we will continuously enhance the involvement and management of financial advisors.
spk00: On the one hand, we will gradually establish a financial advisor membership management system to optimize the financial advisor's experience and increase their loyalty. On the other hand, we will develop data visualization capability to track and analyze fund transaction data, thereby better supporting the financial advisors in their fund sales business. 基于国家经济发展长期向好,政府对资本市场的政策新鲜,
spk01: Based on the long-term positive outlook for China's economic development and the government's favorable policies towards the capital market,
spk00: We believe that there will be sustainable benefits for the wealth management industry in the future. We will lead all our partners to respect risk, fear no challenges, work together with unity and determination, operate in compliance, and deliver high-quality service. That ends with today's prepared remarks. Now we are open for questions. Operator, please.
spk02: Thank you. We will now begin the question and answer session. To ask a question, please press star 1 1 and wait for a name to be announced. If you'd like to cancel your request, please press star 1 1 again.
spk03: Once again, to ask a question, please press star 1 1 and wait for a name to be announced.
spk02: As a reminder, to ask questions, please press star 11 and wait for your name to be announced. There are currently no questions on the line. I would like to hand the call back to management for closing.
spk00: Thank you very much for attending today's conference call. If you have any questions, please feel free to contact us any time. Thank you. And we have no other comments.
spk02: Thank you.
spk00: Operator.
spk02: The conference ends. Certainly. Thank you. The conference has now concluded. Thank you for attending today's presentation. We may now disconnect your lines.
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