China Concept Stocks: PuYi, Inc. (PUYI), a third-party wealth management institution

PuYi, Inc. (NASDAQ: PUYI) was registered in the Cayman Islands on August 6, 2018. It is the holding parent company of PuYi Wealth (founded in 2010). It is headquartered in Guangzhou, Guangdong Province, China and has 298 full-time employees ( 8/31/2018), is a third-party wealth management institution. The Puyi Fortune brand belongs to Chengdu Puyi Bohui Information Technology Co., Ltd. The subsidiaries of Puyi Fortune include fund agency company Fanhua Puyi Fund Sales Co., Ltd. , Financial consulting company Guangdong Puyi Asset Management Co., Ltd., financial information service platform Shenzhen Puyi Zhongxiang Information Technology, etc.


PuYi, Inc. (PUYI):

According to data from China Investment Corporation, Puyi Wealth ranks 21st among domestic third-party wealth management service providers in terms of total transaction volume.

Puyi Wealth mainly provides wealth management services, corporate financing services and asset management services.

PuYi, Inc. (PUYI) prospectus:

  • Fundraising will be used to : 1. 20% will be used to expand branches, including the establishment of branches in first- and second-tier cities 2. 20% will be used to upgrade IT infrastructure 3. 20% will be used to launch new FOF funds (funds Funds in China) and non-performing loan funds 4. The remaining 40% is used for general corporate purposes.
  • As of June 30, 2018, the latest subscription status of original shareholders and new investors is: original shareholders subscribed for 84.034 million common shares, holding 89.4%; new investors subscribed for 10 million common shares, holding shares The ratio is 10.6%.
  • As of the first half of 2018, Puyi Wealth had a net profit of 63.61 million yuan (approximately US$9.61 million), a year-on-year increase of 60.49%. The total revenue during the same period was 166 million, a year-on-year increase of 6.49%; total assets were 226 million yuan (approximately US$34.1 million). ), an increase of 18% year-on-year.
  • Puyi Wealth’s largest business is wealth management services, which accounted for 84.7% of its revenue in the first half of 2018; its products include public fund products, exchange-managed products, asset management plans, and private fund products, among which private equity funds The contribution rate of products to wealth management service revenue reached 63.2%.
  • Puyi Wealth purchases products from third-party suppliers, and partners include 17 fund managers, 3 securities companies and 4 local financial asset exchanges. The company’s business is highly dependent on a few third-party product suppliers. The prospectus shows that in the first half of 2018, 72.5% of its revenue came from the top three product suppliers.
  • As of June 30, 2018, the total transaction value of financial products distributed by the company was 6 billion yuan, and it had 35,000 seed customers in 168 cities across the country. The so-called seed customers are existing users who promote products or services to potential customers. . The prospectus also mentions the “social e-commerce sales model”, which is to develop a customer base by identifying and cultivating cooperation with seed customers. Seed customers account for only 20.4% of Puyi Wealth’s total customers, but contribute 98% of the total. Sales.
  • Puyi Wealth’s control power is extremely concentrated, which is relatively rare among listed entities. The prospectus information shows that Yu Haifeng is the largest shareholder of the listed entity, with a shareholding ratio of 94.3%.

PuYi, Inc. (PUYI) investment:

PuYi Wealth PuYi, Inc. (NASDAQ: PUYI) submitted its IPO prospectus on 11/21/2018, listed on Nasdaq on March 29, 2019, with an issue price of US$6, issuing 6,666,668 shares, and raising funds US$40 million, underwritten by Network 1 Financial Securities.

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