EX-99.1 2 ea024287301ex99-1_highest.htm HIGHEST PERFORMANCES HOLDINGS INC. REPORTS FINANCIAL RESULTS FOR THE FIRST SIX MONTHS OF FISCAL YEAR 2025

Exhibit 99.1

 

FINANCIAL HIGHLIGHTS FOR THE FIRST HALF OF THE FISCAL YEAR 2025

 

   Six months ended December 31, 
   2023(RMB)   2024(RMB)   2024 (US$)   Change (%) 
(In thousands, except per ADS data and percentages)                
Total net revenues   35,577    715,761    98,059    1911.9%
Loss from operations   (27,420)   (496,373)   (68,003)   1710.3%
Gains from the disposal of subsidiaries   -    896,085    122,763    N/A 
Net (loss) income attributable to the Company’s shareholders   (33,252)   232,110    31,798    N/A 
Diluted net (loss) earnings per ADS   (0.526)   0.126    0.018    N/A 
Cash, cash equivalent, short-term investments at end of the period   1,561,462    889,018    121,795    (43.1)%

 

UNAUDITED FINANCIAL RESULTS FOR THE FIRST HALF OF THE FISCAL YEAR 2025

 

The Company obtained control of the AIFU Inc.(“AIFU”) at the end of December 2023 upon the completion of the transfer of shares according to the written share exchange agreement and when effective control being operationally obtained. The Company’s significant year-over-year growth in the first half of fiscal year 2025 from July 1, 2024 to December 31, 2024 is primarily attributable to the acquisition of AIFU. In contrast, the comparative financial results for the first half of fiscal year 2024 from July 1, 2023 to December 31, 2023 do not include any profits of AIFU, as the acquisition was completed since December 31, 2023.

 

Net revenues

 

Net revenues for the first half of the fiscal year 2025 were RMB715.8 million (US$98.1 million), representing a 1911.9% increase from RMB35.6 million for the same period of the fiscal year 2024, primarily due to the acquisition of controlling interests in AIFU.

 

  ● Net revenues for insurance agency business increased by 100% from nil for the first half of fiscal year 2024 to RMB430.3 million (US$59.0 million) for the first half of fiscal year 2025 due to the acquisition of AIFU. Revenues generated from the agency business accounted for 60.1% of our total net revenues for the first half of fiscal year 2025. Net revenues from our insurance agency business consist of net revenues derived from our life insurance business and non-life insurance business.  

 

    Net revenues from life insurance agency business consist of first year commissions, renewal commissions collected and renewal commissions recognized related to variable consideration estimates. Net revenues for the life insurance business were RMB357.5 million (US$49.0 million) for the first half of fiscal year 2025. Net revenues generated from our life insurance business accounted for 49.9% of our total net revenues for first half of fiscal year 2025. Total life gross written premiums (“GWP”) was RMB5.9 billion for the first half of fiscal year 2025, of which first year premium (“FYP”) were RMB0.6 billion while renewal premiums were RMB5.3 billion.

 

    Revenues for the non-life insurance business were mainly derived from commissions generated for internet-based insurance products, including medical insurance, accident insurance, travel insurance and homeowner insurance products and to a lesser extent from commissions and services fees from the provision of insurance brokerage services for commercial line of insurance products. Net revenues for the non-life insurance business were RMB72.9 million (US$10.0 million) for first half of fiscal year 2025. Net revenues generated from the non-life insurance business accounted for 10.2 % of our total net revenues for first half of fiscal year 2025.

 

  ● Net revenues generated from our claims adjusting business increased by 100% from nil for the first half of fiscal year 2024 to RMB254.9 million (US$34.9 million) for the first half of fiscal year 2025. Revenues for the claims adjusting business were mainly derived from commissions and fees primarily paid by the insurance companies for the provision of claims adjusting services, which accounted for 35.6% of our total net revenues for the first half of fiscal year 2025.

  

 

 

 

●Net revenues generated from our wealth management services and others for the first half of the fiscal year 2025 were RMB30.5 million (US$4.2 million), representing a 14.3% decrease from RMB35.6 million for the same period of the fiscal year 2024. Revenues generated from wealth management services and others accounted for 4.3% of our total net revenues for the first half of fiscal year 2025.

 

Net revenues generated from the distribution of publicly raised fund products for the first half of the fiscal year 2025 were RMB28.2 million (US$3.9 million), representing a 14.6% increase from RMB24.6 million for the same period of the fiscal year 2024. This growth was mainly attributed to the boost from our institutional business. We have successfully attracted more institutional clients through a series of measures including enhancing the efficiency of our core transaction system, boosting our brand and reputation awareness, and broadening our product offerings. The transaction value contributed by institutional clients reached RMB97.8 billion for the first half of the fiscal year 2025, compared to 4.8 billion for the first half of the fiscal year 2024.

 

    Net revenues generated from the distribution of privately raised fund products for the first half of the fiscal year 2025 were RMB2.3 million (US$0.3 million), representing a 59.6 % decrease from RMB5.7 million for the same period of the fiscal year 2024. The decrease was driven by two key factors: (i) heightened macroeconomic uncertainty and capital market volatility dampened investor risk appetite, resulting in a 27.2% decrease in private fund transaction value—from RMB21.7 million in the first half of fiscal year 2024 to RMB15.8 million in the first half of fiscal year 2025, which in turn reduced commission income (including management fees); and (ii) to better align with evolving investor preferences, we prioritized institutional clients in the publicly raised fund business.

 

Operating Costs and Expenses

 

Total operating costs and expenses increased by RMB793.2 million, or 1259.2%, from RMB63.0 million for the first half of the fiscal year 2024 to RMB856.2 million (US$117.3 million) for the first half of the fiscal year 2025, primarily due to the acquisition of controlling interests in AIFU which led to a100% increase in both insurance agency segment and claims adjusting segment.

 

  ● operating costs and expenses for our insurance agency segment increased by 100% from nil for the first half of the fiscal year 2024 to RMB567.3 million (US$77.7 million) for the first half of the fiscal year 2025 due to the acquisition of AIFU.

 

  ● operating costs and expenses for our claims adjusting segment increased by 100% from nil for the first half of the fiscal year 2024 to RMB246.4 million (US$33.8 million) for the first half of the fiscal year 2025 due to the acquisition of AIFU.

 

  ● operating costs and expenses for our wealth management services segment decreased from RMB63.0 million for the first half of the fiscal year 2024 to RMB42.5 million (US$5.8 million) for the first half of the fiscal year 2025, primarily due to (i) a decrease by 13.8 million in labor cost related to the optimization of our sales and marketing team and our administrative workforce and (ii) a decrease by 4.2 million in financial advisor commissions, primarily due to lower volume of wealth management products purchased by the individual clients referred to the Company by financial advisors.

 

Impairment loss

 

Impairment loss on goodwill and intangible asset for the first half of the fiscal year 2025 primarily consisted of the impairment loss recognized on goodwill and intangible asset arising from acquisition of AIFU. Based on the underperformance of acquired business that the actual revenue and operating income declined as compared with projected results of current period, which was mainly due to the release of new industrial regulatory rules, a slowdown in macroeconomic condition and a sustained decrease in stock prices, we determined that it was more likely than not that there were indications of impairment for the reporting unit of Insurance Agency. Consequently, we recognized impairment losses on goodwill and intangible assets amounting to RMB355.9 million (US $48.8 million) for the first half of fiscal year 2025, compared to nil in the same period of the prior fiscal year.

 

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Loss from operations

 

As a result of the foregoing factors, we recorded a loss from operations of RMB496.4 million (US$68.0 million) for the first half of the fiscal year 2025, increased by 1710.3% from RMB27.4 million for corresponding period of the fiscal year 2024.

 

Net loss from fair value change

 

Net loss from fair value change was RMB4.7 million (US$0.6 million) for the first half of the fiscal year 2025, compared to nil for the first half of fiscal year 2024, which primarily reflected an unrealized loss of RMB4.7 million representing a change in the fair value of the contingent consideration in regard to AIFU’s business combinations in the first quarter of 2023.

 

Investment income

 

Investment income was RMB21.9 million (US$3.0 million) for the first half of the fiscal year 2025, compared to RMB68,000 for the first half of fiscal year 2024, which primarily related to the realized gain on available-for-sale investments.

 

Gains from the disposal of subsidiaries

 

Gains from the disposal of subsidiaries for the first half of the fiscal year 2025 was RMB896.1 million (US$122.8 million), increased by 100% from nil for the first half of fiscal year 2024. Gains from the disposal of subsidiaries mainly represents gain from disposal of RONS Technology and Xinbao Investment and their subsidiaries for the first half of the fiscal year 2025.

 

Income Tax Expense

 

We recognized income tax expense of RMB79.8 million (US$10.9 million) for the first half of the fiscal year 2025, representing an increase of 904.2% from RMB7.9 million for the same period of the fiscal year 2024.

 

Net (Loss) Income

 

As a result of the foregoing factors, we recognized net income of RMB313.2 million (US$42.9 million) for the first half of the fiscal year 2025, compared to net loss of RMB33.3 million for the same period of the fiscal year 2024.

 

Basic and Diluted Net (Loss) Earnings per ADS

 

Basic and diluted net earnings per ADS were RMB0.935 (US$0.128) and RMB0.126 (US$0.018) for the first half of the fiscal year 2025, respectively compared to basic and diluted net loss per ADS of RMB0.526 and RMB0.526, respectively for the corresponding period of the fiscal year 2024, respectively. 

 

Cash and Cash Equivalents

 

As of December 31, 2024, we had cash and cash equivalents of RMB270.2 million (US$37.0 million), and we had cash and cash equivalents of RMB295.7 million as of June 30, 2024. The decrease was due to loans provided to third parties amounting to RMB111.0 million in the aggregate offset by positive cash inflows from Company’s core operations amounted to RMB98.6 million.

 

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FOREIGN CURRENCY TRANSLATION

 

In this announcement, the unaudited financial results for the first half of the fiscal year 2025 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise indicated, all translations from RMB to US$ are made at a rate of RMB 7.2993 to US$1.00, the effective central parity rate for December 31, 2024 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

SAFE HARBOR STATEMENT

 

This announcement contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When THE COMPANY uses words such as “may”, “will”, “intend”, “should”, “believe”, “expect”, “anticipate”, “project”, “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from THE COMPANY’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: THE COMPANY’s ability to obtain proceeds from the Agreement; THE COMPANY’s goals and strategies; THE COMPANY’s future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the third-party wealth management industry in China; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets THE COMPANY serves and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by THE COMPANY with the Securities and Exchange Commission. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in THE COMPANY’s filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. THE COMPANY undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

 

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Highest Performances Holdings Inc.

 

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

   June 30,
2024		   December 31,
2024		 
   RMB   RMB   USD 
ASSETS:    
Current assets:    
Cash and cash equivalents   295,693    270,178    37,014 
Restricted cash   47,920    35,539    4,869 
Accounts receivable, net   272,931    182,630    25,020 
Short-term investments   583,918    618,840    84,781 
Contract assets, net   323,222    260,368    35,670 
Other receivables, net   38,819    35,105    4,809 
Loan receivables, net   774,051    803,608    110,094 
Other current assets   48,753    37,262    5,105 
Total current assets   2,385,307    2,243,530    307,362 
 Non-current assets:               
Restricted bank deposit - non-current   26,783    18,088    2,478 
Contract assets - non-current, net   726,879    693,638    95,028 
Property, plant, and equipment, net   86,776    78,557    10,762 
Intangible assets, net   417,567    218,163    29,888 
Goodwill, net   243,109    -    - 
Deferred tax assets, net   35,250    9,976    1,367 
Investments in affiliates   8,614    1,006,932    137,949 
Right-of-use assets   122,239    81,987    11,232 
Other non-current assets   225,354    212,573    29,123 
Total non-current assets   1,892,571    2,319,914    317,827 
Total assets   4,277,878    4,563,444    625,189 
                
LIABILITIES AND EQUITY:               
LIABILITIES:               
Current liabilities:               
Short-term loan   98,375    134,976    18,492 
Accounts payable   194,358    116,711    15,988 
Accrued commissions   148,134    128,314    17,579 
Other payables and accrued expenses   180,509    272,229    37,295 
Accrued payroll   68,093    66,513    9,112 
Income taxes payable   96,780    73,429    10,060 
Current operating lease liability   54,233    40,130    5,498 
Other current liabilities   10,505    312    43 
Total current liabilities   850,987    832,614    114,067 
Accrued commissions – non-current   408,416    387,540    53,093 
Other tax liabilities   45,365    43,384    5,944 
Deferred tax liabilities   237,074    271,956    37,257 
Non-current operating lease liabilities   62,954    38,444    5,267 
Other non-current liabilities   33,374    33,374    4,572 
Total non-current liabilities   787,183    774,698    106,133 
Total liabilities   1,638,170    1,607,312    220,200 
                
Commitments and contingencies               
Mezzanine equity:               
Redeemable ordinary shares   45,794    46,856    6,419 
                
EQUITY:               
Ordinary shares   2,617    2,617    359 
Treasury stock   (29)   (29)   (4)
Additional paid-in capital   1,583,017    1,454,937    199,326 
Statutory reserves   23,064    23,196    3,178 
Accumulated deficit   (321,254)   (89,276)   (12,231)
Accumulated other comprehensive loss   (2,293)   (4,899)   (671)
Total shareholders’ equity to Highest Performances Holdings Inc.   1,285,122    1,386,546    189,957 
Non-controlling interests   1,308,792    1,522,730    208,613 
Total shareholders’ equity   2,593,914    2,909,276    398,570 
Total liabilities and shareholders’ equity   4,277,878    4,563,444    625,189 

 

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Highest Performances Holdings Inc.

 

Unaudited Condensed Consolidated Statements of

Operations and Comprehensive (Loss)/Income

(In thousands, except for percentages)

 

   Six months ended December 31, 
   2023   2024     
   RMB   RMB   USD   Change (%) 
Net Revenues:                
Agency   -    430,341    58,957    N/A 
Life insurance business   -    357,468    48,973    N/A 
Non-life insurance business   -    72,873    9,984    N/A 
Claims adjusting   -    254,940    34,927    N/A 
Wealth management and others   35,577    30,480    4,175    (14.3)%
Total net revenues   35,577    715,761    98,059    1911.9%
Operating costs and expenses:                    
Agency   -    (248,534)   (34,049)   N/A 
Life insurance business   -    (188,199)   (25,783)   N/A 
Non-life insurance business   -    (60,335)   (8,266)   N/A 
Claims adjusting   -    (165,752)   (22,708)   N/A 
Wealth management and others   (8,368)   (4,490)   (615)   (46.3)%
Total operating costs   (8,368)   (418,776)   (57,372)   4904.5%
Selling expenses   (10,991)   (104,145)   (14,268)   847.5%
General and administrative expenses   (43,638)   (333,310)   (45,663)   663.8%
Total operating costs and expenses   (62,997)   (856,231)   (117,303)   1259.2%
Impairment loss   -    (355,903)   (48,759)   N/A 
Loss from operations   (27,420)   (496,373)   (68,003)   1710.3%
Other income, net:                    
Net loss from fair value change   -    (4,738)   (649)   N/A 
Investment income related to the realized gain on available-for-sale investments   68    21,892    2,999    32094.1%
Interest income, net   3,125    9,788    1,341    213.2%
Gains from the disposal of subsidiaries   -    896,085    122,763    N/A 
Others, net   (1,080)   (29,782)   (4,080)   2657.6%
Income (Loss) before income taxes and share of loss of affiliates   (25,307)   396,872    54,371    N/A 
Income tax expense   (7,945)   (79,781)   (10,930)   904.2%
Share of loss of affiliates   -    (3,931)   (539)   N/A 
Net (loss) income   (33,252)   313,160    42,902    N/A 
Less: net income attributable to the noncontrolling interests   -    81,050    11,104    N/A 
Net (loss) income attributable to owners of the Company   (33,252)   232,110    31,798    N/A 

 

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Highest Performances Holdings Inc.

 

Unaudited Condensed Consolidated Statements of 

Operations and Comprehensive (Loss)/Income (Continued)

(In thousands, except for shares, income per share, income per ADS)

 

   Six months ended December 31, 
   2023   2024 
   RMB   RMB   USD 
Net (loss) earnings per share:    
Basic   (0.350)   0.623    0.085 
Diluted   (0.350)   0.084    0.012 
Net (loss) earnings per ADS:               
Basic   (0.526)   0.935    0.128 
Diluted   (0.526)   0.126    0.018 
Weighted average number of shares used in computation:               
Basic and diluted   94,885,079    372,547,538    372,547,538 
                
Net (loss) income   (33,252)   313,160    42,902 
Other comprehensive income (loss)   88    (2,606)   (357)
Total Comprehensive income (loss)   (33,164)   310,554    42,545 

 

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HIGHEST PERFORMANCES HOLDINGS INC.

Unaudited Condensed Consolidated Statements of Cash Flow

(In thousands)

 

   Six months ended December 31, 
   2023   2024 
   RMB’000   RMB’000   USD’000 
Net cash provided by operating activities   11,813    98,623    13,514 
Net cash provided by (used in) investing activities   486,801    (179,105)   (24,537)
Net cash provided by financing activities   10,462    32,975    4,517 
Net increase (decrease) in cash and cash equivalents, and restricted cash   509,076    (47,507)   (6,506)
Cash, cash equivalents and restricted cash at beginning of period   164,470    370,396    50,744 
Effect of exchange rate changes on cash, cash equivalents and restricted cash   (41)   916    123 
Cash, cash equivalents and restricted cash at end of period   673,505    323,805    44,361 

 

 

 

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