EX-99.1 2 tm2418400d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Hywin Holdings Announces Unaudited Financial Results for the First Half of Fiscal Year 2024

 

SHANGHAI, China, June 28, 2024 (GLOBE NEWSWIRE) -- Hywin Holdings Ltd. (“Hywin” or the "Company") (NASDAQ: HYW) today announced its unaudited financial results for the first half of fiscal year 2024 ended December 31, 2023.

 

The Company’s businesses and operations in China faced significant headwinds as changes in the asset management industry, overall asset valuation levels in China and the economic environment presented challenges for the Company. The redemption issues of the asset-backed products business, which the Company has now discontinued, caused disruption to Hywin’s brand and operations and affected the confidence of clients, which resulted in a significant decline in total revenues and materially negative impact on bottom line, and adversely impacted results of operations and financial conditions during the reporting period.

 

As previously disclosed by the Company in our Form 6-K filed on December 14, 2023, with respect to the redemption issues of asset-backed products Hywin had historically distributed, while the Hywin Wealth Management Co. Ltd (“Hywin Wealth”), a variable interest entity in China, acted only as distributor of these products, Hywin Wealth continues to actively address these redemption issues on an ongoing basis by proactively coordinating with asset managers, relationship managers and clients to seek solutions and reduce client losses. In light of the overall liquidity conditions of the asset management industry in China, the Company estimates that it could take several years to coordinate asset managers and all clients to reach settlement.

 

The Company also announced on March 27, 2024, that our Board of Directors has approved the exit from the asset-backed products business in China, and furthermore on June 28, 2024, that our Board of Directors has approved a complete exit from the wealth management and asset management business. The Company has terminated its contractual arrangements with Hywin Wealth. As a result of such termination, Hywin Wealth has ceased to be a consolidated entity of the Company. The Company also announced that it will focus on new, innovative business models in the technology sector, including, among others, new retail, social e-commerce, and metaverse industries, and is planning to change its name from Hywin Holdings Ltd. to Santech Holdings Limited, subject to shareholder approval in an extraordinary general meeting to be held in due course.

 

The Company believes its business transformation will open up new opportunities for the Company. However, there are inherent uncertainties associated with such a business transformation. The Company anticipates a significant reduction in operational scale and revenue scale to persist in the near term.

 

First Half of Fiscal Year 2024 Highlights

 

·Total revenues in the six months ended December 31, 2023 decreased by 23.6% to RMB791.2 million (US$110.5 million) from RMB1,036.0 million in the same period of 2022.

 

 

 

 

Hywin Wealth

 

·Transaction value from discontinued business in the six months ended December 31, 2023 decreased by 38.1% to RMB24.9 billion from RMB40.2 billion in the same period of 2022.

 

。Transaction value of asset-backed products in the six months ended December 31, 2023 decreased by 48.1% to RMB19.6 billion from RMB37.8 billion in the same period of 2022.

 

。Transaction value of private market investment products, other than asset-backed products, in the six months ended December 31, 2023 increased by 151.9% to RMB1,977.6 million from RMB785.0 million in the same period of 2022.

 

。Transaction value of public market investment products in the six months ended December 31, 2023 increased by 111.0% to RMB3,353.0 million from RMB1,588.9 million in the same period of 2022.

 

·Transaction value of insurance products, which mainly refers to overseas insurance products, in the six months ended December 31, 2023 increased by 52.6% to RMB254.1 million from RMB166.5 million in the same period of 2022.

 

·Credit loss in the six months ended December 31, 2023 were RMB449.0 million (US$62.7 million), mainly consisting of provisions recognized on the accounts receivable from asset managers of asset-backed products, and to a smaller extent, domestic insurance products.

 

·Asset management business demonstrated continued growth in Assets Under Management ("AUM”) and net revenues. Net revenues from asset management business in the six months ended December 31, 2023 increased by 14.6% to RMB18.6 million (US$2.6 million) from RMB16.2 million in the same period of 2022.

 

Hywin Health

 

·Number of Hywin Health clients1 was 39,598 as of December 31, 2023.

 

·Net revenues from Hywin Health business segment in the six months ended December 31, 2023, increased by 83.1% to RMB70.12 million (US$9.8 million) from RMB38.3 million in the same period of 2022.

 

·Number of medical examination visits was 2,721 in the six months ended December 31, 2023, which generated revenue of RMB8.3 million.

 

 

1 Clients are those who have historically used Hywin Health’s services at least once.

2 Health segment revenues before inter segment transactions elimination.

 

 

 

 

·Number of health management service clients was 3,302 in the six months ended December 31, 2023, which generated revenue of RMB61.8 million.

 

·Impairment losses on goodwill and on long-lived assets were RMB257.7 million and RMB210.9 million respectively, relating to our previous health management acquisitions. In view of the adverse impacts to the Hywin brand, the cross-selling synergies between Hywin Wealth and Hywin Health clients, or any new client acquisition for Hywin Health, have been significantly affected. Therefore, the Company performed impairment tests on such assets as fixed-assets, intangible assets, construction in progress and goodwill to identify potential accounts for impairment. Through the impairment tests, the Company made provisions totaling RMB468.6 million for asset impairment losses, including goodwill and long-lived assets of RMB257.7 million and RMB210.9 million, respectively.

 

A summary of the operating results of Hywin Health’s business segment is as follows:

 

   6 months ended,   6 months ended,   6 months ended, 
   12/31/2022   12/31/2023   12/31/2023 
   RMB'000   RMB'000   USD'000 
Net Revenues   38,304    70,146    9,798 
                
Operating Costs and Expenses               
-Health Management Cost   26,152    54,881    7,666 
-Sales and marketing expenses   9,395    14,061    1,964 
-General and administrative expenses   26,320    38,755    5,413 
-Credit Loss   -    1,032    144 
-Impairment loss on goodwill   -    257,712    35,997 
-Impairment loss on long lived assets   -    210,916    29,460 
Total Operating Costs and Expenses   61,867    577,357    80,644 
                
Net Loss   (24,197)   (491,502)   (68,652)

 

First Half of Fiscal Year 2024 Financial Results

 

Net Revenues

 

Total revenues in the six months ended December 31, 2023 decreased by 23.6% to RMB791.2 million (US$110.5 million) from RMB1,036.0 million in the same period of 2022, mainly due to decreases in net revenues from wealth management business resulting from a weak economic and industry environment, as well as the redemption issues reported in December 2023. The decreases were partially offset by revenue growth from Hywin Health and asset management business.

 

·Net revenues from wealth management services in the six months ended December 31, 2023 decreased by 28.1% to RMB697.8 million (US$97.5 million) from RMB970.2 million in the same period of 2022, in line with the decrease in transaction value

 

oNet revenues from insurance brokerage services, which mainly refers to overseas insurance products, in the six months ended December 31, 2023 increased by 122.1% to RMB151.3 million (US$21.1 million) from RMB68.1 million in the same period of 2022, mainly due to surging insurance demand post Covid reopening.

 

 

 

 

·Net revenues from asset management services in the six months ended December 31, 2023 increased by 14.6% to RMB18.6 million (US$2.6 million) from RMB16.2 million in the same period of 2022, primarily due to an increase in AUM.

 

·Net revenues from Hywin Health business segment in the six months ended December 31, 2023 increased by 83.1% to RMB70.1 million (US$9.8 million) from RMB38.3 million in the same period of 2022, in line with our strategic emphasis on health management before the redemption that occurred in December 2023.

 

Operating Costs and Expenses

 

Total operating costs and expenses in the six months ended December 31, 2023 increased by 101.0% to RMB1,876.9 million (US$262.2 million) from RMB933.9 million in the same period of 2022, primarily due to credit loss resulting from redemption issues and impairment loss on goodwill and long lived assets, as well as investments in health-related business.

 

·Cost of compensation and benefits in the six months ended December 31, 2023 decreased by 19.4% to RMB464.1 million (US$64.8 million) from RMB576.2 million in the same period of 2022, in line with the decreases in the transaction value of wealth management business, partially offset by higher commission from insurance brokerage services.

 

·Costs related to Hywin Health business segment in the six months ended December 31, 2023 increased by 109.9% to RMB54.9 million (US$7.7 million) from RMB26.2 million, in line with our increased investments to improve our health management product offerings during the reporting period.

 

·Sales and marketing expenses in the six months ended December 31, 2023 decreased by 14.6% to RMB155.8 million (US$21.8 million) from RMB182.6 million in the same period of 2022, due to reduced marketing and sales activities of Hywin Wealth as a result of the decreased budget related to the decrease in transaction value.

 

·General and administrative expenses in the six months ended December 31, 2023 increased by 10.3% to RMB161.3 million (US$22.5 million) from RMB146.2 million in the same period of 2022, primarily due to new expenses related to health services.

 

·Credit loss in the six months ended December 31, 2023 were RMB449.0 million (US$62.7 million), mainly consisting of provisions recognized on the accounts receivable from asset managers of asset-backed products, and to a smaller extent, domestic insurance products.

 

·Impairment loss on goodwill in the six months ended December 31, 2023 were RMB257.7 million (US$36.0 million), due to the performance metrics of Grand Doctor, Beijing iLife 3 Technology Co., Ltd. (“Life Infinity”), and Sincerity and Compassion Health Management Center (“Sincerity and Compassion”) failing to meet our established expectations after the acquisitions, particularly since Hywin’s brand has suffered adverse impacts as a result of the redemption issues in the wealth management segment.

 

 

 

 

·Impairment loss on long lived assets in the six months ended December 31, 2023 were RMB332.4 million (US$46.4 million), due to the performance metrics of Grand Doctor, Life Infinity and Sincerity and Compassion failing to meet our established expectations after the acquisitions, particularly since Hywin’s brand has suffered adverse impacts as a result of the redemption issues in the wealth management segment. Impairment losses were also recorded because events or changes in circumstances led us to believe that expected future cash flow generated by the fixed-assets, intangible assets and construction in progress will be less than carrying amount.

 

·Impairment loss on long term investment in the six months ended December 31, 2023 were RMB1.0 million (US$0.14 million), due to failure to achieve the expected return of the long-term investment by Shenzhen Panying Asset Management Co., Ltd.

 

Loss from Operations

 

As a result of the foregoing, loss from operations in the six months ended December 31, 2023 was RMB1,085.7 million (US$151.6 million), compared to income from operations of RMB102.1 million in the same period of 2022, attributable to the decreases in net revenues and the increases in operating costs and expenses.

 

Net Loss

 

Net loss in the six months ended December 31, 2023 was RMB1,068.8 million (US$149.3 million), compared with net income of RMB70.6 million in the same period of 2022.

 

Loss per ADS

 

Basic loss per ADS in the six months ended December 31, 2023 was RMB38.09 (US$5.32), compared with basic earnings per ADS of RMB2.59 in the same period of 2022.

 

Diluted loss per ADS in the six months ended December 31, 2023 was RMB38.09 (US$5.32), compared with diluted earnings per ADS of RMB2.51 in the same period of 2022.

 

Each ADS represents two of the Company’s ordinary shares.

 

Balance Sheet

 

As of December 31, 2023, the Company had RMB330.0 million (US$46.6 million) in cash, cash equivalents, and restricted cash, compared with RMB945.9 million as of June 30, 2023. The decrease was mainly attributable to our operating loss and the uncollectible accounts receivable of asset-backed products during the reporting period, as well as our acquisition of the land use rights of a real property in Boao, Hainan Province, in September 2023.

 

 

 

 

As of December 31, 2023, the Company had RMB261.5 million (US$36.9 million) in property and equipment, RMB15.4 million (US$2.2 million) in intangible assets, and RMB129.2 million (US$18.2 million) in land use right compared with RMB349.7 million in property and equipment, RMB98.6 million in intangible assets and nil in land use right as of June 30, 2023

 

As of December 31, 2023, the Company had RMB2.3 million (US$0.3 million) in deferred tax liability compared with RMB20.0 million as of June 30, 2023.

 

Subsequent Event

 

In March 2024, the Company was named as a defendant in a securities class action complaint filed in the New York County Supreme Court alleging violations of the Securities Act of 1933. The Company disputes each and every claim and intends to defend against such allegations vigorously.

 

Exchange Rate

 

This press release contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from RMB to U.S. dollars in this press release were made at a rate of RMB7.08273 to US$1.00, for figures on the balance sheet as of December 31, 2023, RMB7.15934 to US$1.00 for figures on the income statement for the six months ended December 31, 2023.

 

About Hywin Holdings Ltd.

 

Hywin Holdings Limited, to be renamed Santech Holdings Limited, is a consumer-focused technology company. The Company historically served a large number of high net-worth clients in China in financial services and health management, and accumulated a large customer base. The Company has exited or disposed of its historical businesses in financial services and is actively exploring innovative new opportunities in technology, including but not limited to new retail, social e-commerce and metaverse. For more information, please visit https://ir.hywinwealth.com.

 

Safe Harbor Statement

 

This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipate,” “estimate,” “forecast,” “plan,” “project,” “potential,” “continue,” “ongoing,” “expect,” “aim,” “believe,” “intend,” “may,” “should,” “will,” “is/are likely to,” “could” and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

Investor Contact:

 

Hywin Holdings Ltd.

Email: ir@hywinwealth.com

 

Media Contact:

 

ICR, LLC

Edmond Lococo

Phone: +86 138-1079-1408

Email: HywinPR@icrinc.com

 

 

3 China Foreign Exchange Trade System USD/RMB mid-point rate on December 31, 2023.

4 An appropriately weighted average exchange rate for the reporting period.

 

 

 

HYWIN HOLDINGS LTD.
CONSOLIDATED BALANCE SHEETS

(unaudited)

 

   6/30/2023   12/31/2023   12/31/2023 
   RMB'000   RMB'000   USD'000 
ASSETS               
Current assets               
Cash and cash equivalents   868,908    309,495    43,697 
Restricted cash   76,975    20,483    2,892 
Term deposit   28,903    78,331    11,059 
Accounts receivable, net   415,134    152,371    21,512 
Deposits, prepayments and other current assets   46,392    44,433    6,275 
Contract assets   33,491    27,442    3,875 
Total Current Assets   1,469,803    632,556    89,310 
Non-current assets               
Property and equipment, net   349,685    261,518    36,923 
Long-term investment   1,000    -    - 
Intangible assets, net   98,603    15,398    2174 
Goodwill   257,712    -    - 
Long-term prepayments   9,657    -    - 
Deferred tax asset, net   725    401    5 
Operating lease right-of-use assets   186,307    3,180    449 
Land use right   -    129,210    18,243 
Total Non-current Assets   903,689    409,707    57,846 
                
Total Assets   2,373,492    1,042,263    147,156 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY               
Current Liabilities               
Commission payable   172,456    111,107    15,687 
Accounts payable   3,332    5,295    748 
Advance from customers   39,812    36,304    5,126 
Investors’ deposit   70,934    6,308    891 
Income tax payable   167,798    165,120    23,313 
Due to related parties   38,073    38,462    5,430 
Other payable and accrued liabilities   433,217    335,107    47,313 
Operating lease liabilities   83,573    97,356    13,746 
Total Current Liabilities   1,009,195    795,059    112,254 
                
Non-current liabilities               
Commission payable-non current   526    -    - 
Deferred tax liability   20,028    2,293    324 
Operating lease liabilities, non-current   100,521    73,066    10,316 
Total Non-current Liabilities   121,075    75,359    10,640 
                
Total Liabilities   1,130,270    870,418    122,894 
                
Mezzanine equity               
Redeemable noncontrolling interest   30,600    30,600    4,320 
Total Mezzanine equity   30,600    30,600    4,320 
Shareholders' Equity               
Ordinary shares   36    36    5 
Additional paid-in capital   515,665    516,390    72,909 
Statutory reserves   128,297    128,297    18,114 
Accumulated gain (deficit)   451,013    (615,388)   (86,886)
Noncontrolling interest   100,931    98,564    13,916 
Other comprehensive income   16,680    13,346    1,884 
Total Shareholders' equity   1,212,622    141,245    19,942 
                

Total Liabilities, Mezzanine equity and Shareholder's equity

   2,373,492    1,042,263    147,156 

 

 

 

HYWIN HOLDINGS LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In thousands, except for per ADS data and percentages)

(unaudited)

 

   6 months ended,   6 months ended,   6 months ended,    
   12/31/2022   12/31/2023   12/31/2023     
   RMB'000   RMB'000   USD'000   Change 
Net Revenues                    
-Wealth management   970,157    697,847    97,474    (28.1)%
-Assets management   16,203    18,572    2,594    14.6%
-Health management   38,304    67,261    9,395    75.6%
-Other   11,320    7,547    1,054    (33.3)%
 Total Revenue   1,035,984    791,227    110,517    (23.6)%
                     
Operating Costs and Expenses                    
-Compensation and benefits   576,173    464,131    64,829    (19.4)%
-Health management costs   26,152    54,881    7,666    109.9%
-Share-based compensation   2,804    725    101    (74.1)%
-Sales and marketing expenses   182,553    155,817    21,764    (14.6)%
-General and administrative expenses   146,243    161,288    22,528    10.3%
-Credit Loss        448,982    62,713    N/A 
-Impairment loss on goodwill   -    257,712    35,997    N/A 
-Impairment loss on long lived assets   -    332,371    46,425    N/A 
-Impairment loss on long term investment        1,000    140    N/A 
Total Operating Costs and Expenses   933,925    1,876,907    262,163    101.0%
                     
Income (Loss) from operations   102,059    (1,085,680)   (151,646)   (1163.8)%
                     
Other (expenses)/income                    
-Interest income, net   549    (396)   (55)   (172.1)%
-Other non-operation income, net   (4,559)   (63)   (9)   (98.6)%
Total Other (Expense) Income   (4,010)   (459)   (64)   (88.6)%
                     
Income (Loss) before tax   98,049    (1,086,139)   (151,710)   (1207.8)%
Income tax expense (benefits)   27,467    (17,371)   (2,426)   (163.2)%
Net income (loss)   70,582    (1,068,768)   (149,284)   (1614.2)%
                     
Less: net loss attributable to non-controlling interests   (2,033)   (2,367)   (331)   16.4%
Net income/(loss) attributable to shareholders   72,615    (1,066,401)   (148,953)   (1568.6)%
                     
Other comprehensive Income (loss)                    
-Foreign currency translation (loss)/gain   2,456    (3,334)   (466)   (235.7)%
Comprehensive Income (loss)   73,038    (1,072,102)   (149,750)   (1567.9)%
                     
Less: Comprehensive Loss attributable to non-controlling interests   (2,033)   (2,367)   (331)   16.4%
Comprehensive Income (Loss) attributable to shareholders   75,071    (1,069,735)   (149,419)   (1525.0)%
                     
Income (Loss) per ADS                    
Income (Loss) per ADS basic   2.59    (38.09)   (5.32)   (1570.7)%
Income (Loss) per ADS diluted   2.51    (38.09)   (5.32)   (1617.5)%

 

 

 

 

The Board of Directors has approved the termination of VIE agreements with Hywin Wealth Management Co., Ltd. on June 28, 2024, which resulted in the discontinued operation of onshore wealth management businesses.

 

The following unaudited and unreviewed pro forma consolidated financial information reflects adjustments to the Company’s historical financial results as reported under U.S. GAAP, in connection with the termination of asset-backed products business. The unaudited and unreviewed pro forma consolidated statement of comprehensive income for the year ended June 30, 2023, has been prepared with the assumption that the termination of asset-backed products business was completed as of July 1, 2022, and the effects of the transaction are carried forward to the unaudited and unreviewed pro forma consolidated statement of comprehensive income for the six months ended December 31, 2023. The unaudited and unreviewed pro forma consolidated balance sheet as of December 31, 2023, has been prepared with the assumption that the termination of asset-backed products business was consummated on that date.

 

The consolidated “as reported” column in the unaudited and unreviewed pro forma balance sheet and in the unaudited and unreviewed pro forma statement of comprehensive income reflects the Company’s historical financial statements for the periods presented. Assumptions and estimates underlying the pro forma adjustments column are described in the accompanying notes.

 

The unaudited and unreviewed pro forma consolidated financial information does not purport to be indicative of the results of operations or the financial condition which would have actually resulted if the termination of asset-backed products business actually occurred on the dates presented or to project our results of operations or financial position for any future period. This financial information may not be predictive of the future results of operations or financial condition of the Company, as the Company’s future results of operation and financial condition may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

 

The unaudited and unreviewed pro forma financial information has been prepared by the Company based upon assumptions deemed appropriate by the Company’s management and are based upon information and assumptions available at the time of filing the Company’s current report on Form 6-K filed with the SEC on June 28, 2024. The following unaudited and unreviewed pro forma financial information should be read in conjunction with: (i) the accompanying notes to the unaudited and unreviewed pro forma consolidated financial information; and (ii) the audited consolidated financial statements of the Company which were included in the Company’s annual report on Form 20-F filed with the SEC on October 18, 2023 and the Company’s unaudited interim report on Form 6-K filed with the SEC on June 28, 2024.

 

 

 

HYWIN HOLDINGS LTD.
PRO FORMA CONSOLIDATED BALANCE SHEETS
As of December 31, 2023

(unaudited and unreviewed)

 

       Pro forma
Adjustments		            
   Consolidated   Discontinued     Pro forma   Pro forma 
   Company as   Business     Consolidated   Consolidated 
   Reported   Disposition     Company   Company 
   RMB'000   RMB'000     RMB'000   USD'000 
ASSETS                      
Current assets                      
Cash and cash equivalents   309,495    -      309,495    43,697 
Restricted cash   20,483    -      20,483    2,892 
Term deposit   78,331    -      78,331    11,059 
Accounts receivable, net   152,371    (97,952)     54,419    7,683 
Due from related parties, net   -    (750,809) (1)   -    - 
Deposits, prepayments and other current assets   44,434    (24,642)     19,792    2,795 
Contract assets   27,442    -      27,442    3,875 
Total Current Assets   632,556    (873,403)     509,962    72,001 
Non-current assets                      
Property and equipment, net   261,518    (261,494)     24    3 
Long term investment   -    -  (2)   -    - 
Intangible assets, net   15,398    -      15,398    2,174 
Deferred tax asset, net   401    (401)     -    - 
Operating lease right-of-use assets   3,180    -      3,180    449 
Held for sale assets   129,210    -      129,210    18,243 
Total Non-current Assets   409,707    (261,895)     147,812    20,869 
                       
Total Assets   1,042,263    (1,135,298)     657,774    92,870 
                       
LIABILITIES AND SHAREHOLDERS’ EQUITY                      
Current Liabilities                      
Commission payable   111,107    (69,716)     41,391    5,844 
Accounts payable   5,295    -      5,295    748 
Advance from customers   36,304    -      36,304    5,126 
Investors’ deposit   6,308    (6,308)     -    - 
Income tax payable   165,120    (151,127)     13,993    1,976 
Due to related parties   38,462    (22,819) (1)   766,452    108,214 
Other payable and accrued liabilities   335,107    (302,449)     32,658    4,610 
Operating lease liabilities   97,356    (51,135)     46,221    6,526 
Total Current Liabilities   795,059    (603,554)      942,314    133,044 
Non-current liabilities                      
Deferred tax liability   2,293    -      2,293    324 
Operating lease liabilities, non-current   73,066    (26,967)     46,099    6,509 
Total Non-current Liabilities   75,359    (26,967)     48,392    6,833 
                       
Total Liabilities   870,418    (630,521)      990,706    139,877 
                   
Mezzanine equity                  
Redeemable noncontrolling interest   30,600    -      30,600    4,320 
Total Mezzanine equity   30,600    -      30,600    4,320 
                       
Shareholders' Equity                      
Ordinary shares   36    -  (2)   36    5 
Additional paid-in capital   516,390    (295,533) (2)   220,857    31,183 
Statutory reserves   128,297    (128,254) (2)   43    6 
Accumulated gain   (615,388)   (80,990) (2)   (696,378)   (98,321)
Noncontrolling interest   98,564    -      98,564    13,916 
Other comprehensive income   13,346    -      13,346    1,884 
                       
Total Shareholders' equity   141,245    (504,777)     (363,532)   (51,327)
                       
Total Liabilities, Mezzanine equity and Shareholder's equity   1,042,263    (1,135,298)     657,774    92,870 

 

See Notes to the Unaudited and Unreviewed Pro Forma Consolidated Financial Statements.

 

 

 

HYWIN HOLDINGS LTD.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the Six Months Ended December 31, 2023

(unaudited and unreviewed)

 

       Pro forma
Adjustments		            
   Consolidated   Discontinued     Pro forma   Pro forma 
   Company as   Business     Consolidated   Consolidated 
   Reported   Disposition     Company   Company 
   RMB'000   RMB'000     RMB'000   USD'000 
Net Revenues                      
-Wealth management   697,847    (545,571)     152,276    21,270 
-Assets management   18,572    -      18,572    2,594 
-Health Management   67,261    2,885  (3)   70,146    9,798 
-Other   7,547    29,115  (3)   36,662    5,121 
Total Revenue   791,227    (513,571)     277,656    38,783 
                       
Operating Costs and Expenses                      
-Compensation and benefits   464,131    (374,129) (3)   90,002    12,571 
-Health management costs   54,881    -      54,881    7,666 
-Share-based compensation   725    -      725    101 
-Sales and marketing expenses   155,817    (130,026) (3)   25,791    3,602 
-General and administrative expenses   161,288    (64,068) (3)   97,220    13,580 
-Credit Loss   448,982    (436,164)     12,818    1,790 
-Impairment loss on goodwill   257,712    -      257,712    35,997 
-Impairment loss on long lived assets   332,371    (116,704)     215,667    30,124 
-Impairment loss on long term investment   1,000    -      1,000    140 
Total Operating Costs and Expenses   1,876,907    (1,121,091)     755,816    105,571 
                       
Loss from operations   (1,085,680)   607,520      (478,160)   (66,788)
                       
Other (expenses)/income                      
-Interest (expense)/income, net   (396)   (516)     (912)   (127)
-Other non-operation (expense)/income, net   (63)   1,994      1,931    270 
Total Other (Expenses)/Income   (459)   1,478      1,019    143 
                       
Loss before tax   (1,086,139)   608,998      (477,141)   (66,645)
Income tax expense   (17,371)   (324)     (17,695)   (2,471)
Net Loss   (1,068,768)   609,322      (459,446)   (64,174)
                       
Less: net loss attributable to non-controlling interests   (2,367)   -      (2,367)   (331)
Net loss attributable to shareholders   (1,066,401)   609,322      (457,079)   (63,843)
                       
Other comprehensive loss                      
-Foreign currency translation loss   (3,334)   -      (3,334)   (466)
Comprehensive Loss   (1,072,102)   609,322      (462,780)   (64,640)
                       
Less: Comprehensive Loss attributable to non-controlling interests   (2,367)   -      (2,367)   (331)

Comprehensive Loss attributable to shareholders

   (1,069,735)   609,322      (460,413)   (64,309)

 

See Notes to the Unaudited and Unreviewed Pro Forma Consolidated Financial Statements.

 

 

 

 

HYWIN HOLDINGS LTD.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the twelve Months Ended June 30, 2023

(unaudited and unreviewed)

 

       Pro forma
Adjustments		           
   Consolidated   Discontinued     Pro forma   Pro forma 
   Company as   Business     Consolidated   Consolidated 
   Reported   Disposition     Company   Company 
   RMB'000   RMB'000     RMB'000   USD'000 
Net Revenues                      
-Wealth management   1,949,410    (1,741,684)     207,726    29,919 
-Assets management   32,562    -      32,562    4,690 
-Health Management   86,464    1,377  (3)   87,841    12,652 
-Other   23,321    49,553  (3)   72,874    10,496 
Total Revenue   2,091,757    (1,690,754)     401,003    57,757 
                       
Operating Costs and Expenses                      
-Compensation and benefits   1,156,381    (1,038,326) (3)   118,055    17,004 
-Health management costs   74,476    -      74,476    10,727 
-Share-based compensation   5,207    -      5,207    750 
-Sales and marketing expenses   318,465    (278,515) (3)   39,950    5,754 
-General and administrative expenses   302,221    (149,010) (3)   153,211    22,067 
-Impairment loss on goodwill   35,412    -      35,412    5,100 
-Impairment loss on long lived assets   2,210    -      2,210    318 
Total Operating Costs and Expenses   1,894,372    (1,465,851)     428,521    61,720 
                       
Income/(Loss) from operations   197,385    (224,903)     (27,518)   (3,963)
                       
Other (expenses)/income                      
-Interest income, net   1,348    (668)     680    98 
-Other non-operation expense, net   (7,083)   612      (6,471)   (932)
Total Other (Expenses)/Income   (5,735)   (56)     (5,791)   (834)
                       
Income/(loss) before tax   191,650    (224,959)     (33,309)   (4,797)
Income tax expense   71,380    (59,403)     11,977    1,725 
Net Income/(Loss)   120,270    (165,556)     (45,286)   (6,522)
                       
Less: net loss attributable to non-controlling interests   (9,611)   -      (9,611)   (1,384)
Net income/(loss) attributable to shareholders   129,881    (165,556)     (35,675)   (5,138)
                       
Other comprehensive Income                      
-Foreign currency translation gain   8,222    -      8,222    1,184 
Comprehensive Income/(Loss)   128,492    (165,556)     (37,064)   (5,338)
                       
Less: Comprehensive Loss attributable to non-controlling interests   (9,611)   -      (9,611)   (1,384)
Comprehensive Income/(Loss)   138,103    (165,556)     (27,453)   (3,954)

 

See Notes to the Unaudited and Unreviewed Pro Forma Consolidated Financial Statements.

 

 

 

 

HYWIN HOLDINGS LTD.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the twelve Months Ended June 30, 2022

(unaudited and unreviewed)

 

       Pro forma
Adjustments		           
   Consolidated   Discontinued     Pro forma   Pro forma 
   Company as   Business     Consolidated   Consolidated 
   Reported   Disposition     Company   Company 
   RMB'000   RMB'000     RMB'000   USD'000 
Net Revenues                      
-Wealth management   1,899,573    (1,851,107)     48,466    7,506 
-Assets management   19,476    -      19,476    3,016 
-Health Management   422    -  (3)   422    65 
-Other   22,642    34,479  (3)   57,121    8,847 
Total Revenue   1,942,113    (1,816,628)     125,485    19,434 
                       
Operating Costs and Expenses                      
-Compensation and benefits   1,050,077    (1,007,755) (3)   42,322    6,555 
-Health management costs   4,287    -      4,287    664 
-Share-based compensation   7,340    -      7,340    1,137 
-Sales and marketing expenses   311,773    (293,334) (3)   18,439    2,856 
-General and administrative expenses   241,946    (169,177) (3)   72,769    11,270 
Total Operating Costs and Expenses   1,615,423    (1,470,266)     145,157    22,482 
                       
Income/(Loss) from operations   326,690    (346,362)     (19,672)   (3,048)
                       
Other (expenses)/income                      
-Interest income, net   1,498    (870)     628    97 
-Other non-operation (expense)/income, net   (3,741)   (6,093)     (9,834)   (1,523)
Total Other (Expenses)/Income   (2,243)   (6,963)     (9,206)   (1,426)
                       
Income/(loss) before tax   324,447    (353,325)     (28,878)   (4,474)
Income tax expense   88,578    (85,522)     3,056    473 
Net Income/(Loss)   235,869    (267,803)     (31,934)   (4,947)
                       
Net income/(loss) attributable to shareholders   235,869    (267,803)     (31,934)   (4,947)
                       
Other comprehensive Income                      
-Foreign currency translation gain   4,177    (866) (3)   3,311    513 
Comprehensive Income/(Loss)   240,046    (268,669)     (28,623)   (4,434)
                       

Comprehensive Income attributable to shareholders

   240,046    (268,669)     (28,623)   (4,434)

 

See Notes to the Unaudited and Unreviewed Pro Forma Consolidated Financial Statements.

 

 

 

 

HYWIN HOLDINGS LTD.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the twelve Months Ended June 30, 2021

(unaudited and unreviewed)  

 

       Pro forma Adjustments         
   Consolidated   Discontinued   Pro forma   Pro forma 
   Company as   Business   Consolidated   Consolidated 
   Reported   Disposition   Company   Company 
   RMB'000   RMB'000   RMB'000   USD'000 
Net Revenues                    
-Wealth management   1,795,552    (1,742,129)   53,423    8,070 
-Assets management   14,942    -    14,942    2,257 
-Other   23,928    (1,286)   22,642    3,421 
Total Revenue   1,834,422    (1,743,415)   91,007    13,748 
                     
Operating Costs and Expenses                    
-Compensation and benefits   1,003,061    (962,550)   40,511    6,120 
-Share-based compensation   21,947    -    21,947    3,315 
-Sales and marketing expenses   326,879    (311,849)   15,030    2,270 
-General and administrative expenses   200,929    (144,849)   56,080    8,472 
Total Operating Costs and Expenses   1,552,816    (1,419,248)   133,568    20,177 
                     
Income/(Loss) from operations   281,606    (324,167)   (42,561)   (6,429)
                     
Other Income/(Expenses)                    
-Interest income, net   1,537    (1,484)   53    8 
-Other non-operation income/(expense), net   12,608    (13,207)   (599)   (90)
Total Other Income/(Expenses)   14,145    (14,691)   (546)   (82)
                     
Income/(loss) before tax   295,751    (338,858)   (43,107)   (6,511)
Income tax expense   88,094    (88,301)   (207)   31 
Net Income/(Loss)   207,657    (250,557)   (42,900)   (6,480)
                     
Net income/(loss) attributable to shareholders   207,657    (250,557)   (42,900)   (6,480)
                     
Other comprehensive Income                    
-Foreign currency translation gain   10,542    -    10,542    1,592 
Comprehensive Income/(Loss)   218,199    (250,557)   (32,358)   (4,888)
                     

Comprehensive Income/(Loss) attributable to shareholders

   218,199    (250,557)   (32,358)   (4,888)

 

See Notes to the Unaudited and Unreviewed Pro Forma Consolidated Financial Statements.

 

NOTES TO UNAUDITED and UNREVIEWED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

 

The pro forma adjustments are based on preliminary estimates and assumptions by management that may be subject to change. The following adjustments have been reflected in the unaudited and unreviewed pro forma consolidated financial information:

 

(1) Adjustment to reflect the elimination of assets and liabilities attributable to the Discontinued business.

 

(2) Adjustment to reflect the long-term investment in subsidiaries.

 

(3) Adjustment to reflect the elimination of internal consulting and technology revenue related to the Discontinued business.