BitVentures Ltd. Q2 FY2023 earnings call

• China's economic recovery post-pandemic needed more time to shore up investment confidence. Hywin implemented measures like adjusting product matrix, client advice, and risk management.
• Client metrics: Total clients reached 146,000, up 8.7% y-o-y; active clients nearly 37,000, up 3.9% y-o-y; repeat investment rate 80.5%.
• Coverage network: Relationship managers totaled 1,738, up 7.6% y-o-y. Had 177 wealth centers covering 88 cities.
• Technology: Migrated on-premises applications to cloud; Zewaytong Invest Pat service platform and Yourpayton AlloMaster system launched.
• Hywin Health: Entered health management industry via acquisitions, developed AI-based health evaluation system, and aims to customize higher-end solutions for clients.

Wealth Management

• Transaction value in first half of fiscal year 2023 reached RMB 40.1 billion, a year-on-year growth of 6.9%. Asset-backed product transaction value increased to RMB 37.2 billion, up 21.4% year-on-year. Hedge fund products transaction value declined by 76.3% year-on-year to RMB 710 million. Private equity and venture capital products transaction value declined by 42.4% year-on-year to RMB 570 million.

Asset Management

• Client assets under management (AUM) increased by 114.3% year-on-year to RMB 7.0 billion in the first half of fiscal 2022. Hywin International's EAM AUM exceeds RMB 5.8 billion. Cayman Funds AUM currently exceeds RMB 700 million.

Family Office

• Hywin's Family Office team was included in the 7th Asia Pacific Wealth Forum list of top 50 family offices of the year in China. Hywin established the Hywin Club for ultra high net worth clients, offering services from wealth management to family governance.

Hywin Health

• In the first half of fiscal 2023, Hywin Health achieved revenue from medical examinations at RMB 12.4 million and revenue from health management at RMB 25.8 million. Total number of Hywin Health clients reached 28,763 clients.

• Expect investment sentiment in China to recover significantly in 2023. Will increase exposure to NAV-based products, secondary markets, etc.
• Hywin Health expects to drive further revenue growth before reaching breakeven, leveraging synergies with wealth business.

• Market volatility due to economic data uncertainties.
• Challenges in integrating Hywin Health's businesses post-acquisition, including initial losses and operational adjustments.

Q: Can you tell us more about the company's recent product strategy as transaction value increased?

A: In 2022, equity market volatility was high. Proactive in product mix adjustments. In 2023, will increase exposure to NAV-based products, focus on certain sectors in private equity, and emphasize risk diversification.

Q: Total revenue increased by 17.6% while net income only marginally by 0.3%. Why?

A: Net income marginally up due to RMB 24 million losses from Hywin Health. Wealth Management operating margin rose to 12.6% y-o-y. Hywin Health in initial integration phase with clinics closed during reporting period.

Q: When do you expect Hywin Health to report breakeven results and growth?

A: Still in initial integration phase. Narrowing losses per clinic expected. Significant synergies with wealth business, expecting large revenue increase in next period and confident in health business growth leading to breakeven at critical volume.