Jupai Reports Revenue Decline, Net Loss for 2018; Sees Better Times Ahead

The wealth management company said the year was challenging due to investor uncertainty amid the trade tensions with the United States.

Author: CapitalWatch Staff   

The stock of Jupai Holdings Ltd. (NYSE: JP) inched down 5 cents intraday Tuesday, to $3.89 per American depositary share, after reporting declined revenue and net loss for 2018.

The Shanghai-based company, which provides wealth management and advisory services to individuals in China, said in a statement today that its revenue last year dropped nearly 23 percent to $192.2 million. It also reported net loss of $56.4 million, or $1.69 per share, in contrast to income of $60.9 million in 2017.

"2018 was challenging for Jupai on several fronts," Jianda Ni, Jupai's chairman and chief executive officer, said in the report.

"During the year, investors became increasingly conservative as the Chinese government's focus on deleveraging at the expense of economic growth and the expanding US-China trade conflict contributed to an uncertain economic outlook. In addition, China's wealth management industry continued to experience a difficult transition period due to tightened regulations," Ni added.

Jupai said it had 8,638 active clients in 2018 and the aggregate value of wealth management products it distributed was $4.4 billion, down 44 percent year-over-year. As of Dec. 31, it had assets under management in the amount of $8.3 billion, a decrease of 1 percent from the same time in 2017.

Looking ahead to 2019, Ni said, "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 shown signs of recovery since the beginning of the year, which we believe will help restore investor confidence and gradually increase the appetite for wealth management products."

Ni concluded, "During this time of industry transition, Jupai will focus on developing new product categories, including real estate equity products and overseas products to better meet investors' evolving needs, selecting high-quality project counterparties to control risk, and streamlining internal management to optimize costs."