Fanhua, subsidiary of Highest Performances Holdings Inc., Expands its Share Repurchase Program and Announces Management Share Buyback Program
Fanhua announced an expansion of its share repurchase program by an additional $20 million, raising the total to $40 million. As of June 30, 2024, the company had repurchased approximately 726,616 ADS for $5.4 million since December 2022. This highlights Fanhua's confidence in its long-term growth and commitment to enhancing shareholder returns.
Additionally, senior executives, including CEO Yinan Hu and CFO Peng Ge, will personally buy up to $5 million worth of Fanhua shares over the next 12 months. The repurchases will be funded via available cash reserves and personal funds.
The company's proactive measures and strong cash reserves ensure stability amid industry challenges. Fanhua's AI agent 'Du Xiaobao' will launch in August, enhancing customer service and operational efficiency. These steps aim to sustain long-term growth and value creation.
- Expansion of share repurchase program to $40 million, indicating strong confidence in long-term growth.
- Personal investment by senior executives worth up to $5 million, reflecting commitment to the company's future.
- Strong cash generation capabilities and robust balance sheet ensure financial flexibility.
- Launch of AI agent 'Du Xiaobao' to enhance customer service and operational efficiency.
- Challenges due to the implementation of a commission cap in the insurance intermediary industry, causing short-term stock price fluctuations.
Fanhua Inc.'s decision to expand its share repurchase program by an additional
From a financial standpoint, the Company has already bought back approximately 726,616 American Depository Shares for around
Additionally, the management's personal investment of up to
The announcement of the expanded share repurchase program comes at a strategic time for Fanhua, amidst regulatory changes in the insurance intermediary industry in China. The implementation of the commission cap has posed challenges, but the company's proactive measures have been highlighted as steps to adapt to the new market conditions. The emphasis on the unique advantages of insurance intermediaries and the expected growth of insurance assets as defensive assets provides a positive outlook for the industry.
Fanhua's mention of its AI agent 'Du Xiaobao,' developed in collaboration with Baidu Smart Cloud, is noteworthy. The introduction of this AI technology is anticipated to enhance customer service capabilities and operational efficiency. In the broader context, this move aligns with the industry trend of integrating advanced technology to drive growth and improve service delivery. Investors might see this as a pivotal innovation that could differentiate Fanhua from its competitors, potentially leading to market share gains.
The management’s personal share buybacks also signal strong confidence in the company's future, which is likely to be perceived positively by the market. Such insider buying often serves as a bullish indicator, reassuring investors about the company's prospects.
As of June 30, 2024, approximately 726,616 American Depository Shares had been repurchased at an aggregate purchase price of approximately
Alongside the Company's expansion of the share repurchase program, several of Fanhua's senior executives including Mr. Yinan Hu, founder and Chief Executive Officer, Mr. Peng Ge, Chief Financial Officer, and Mr. Ben Lin, Chief Strategy Officer, and Mr. Allen Lueth, independent director and chairman of the Audit Committee of the Board, have indicated that they will increase their personal shareholdings of Fanhua. Over the next 12 months, they intend to purchase up to
The share repurchases will be made from time to time in the open market at prevailing market prices and/or in privately negotiated transactions, depending on market conditions and in accordance with applicable rules and regulations and the Company's insider trading policy. Fanhua plans to fund the corporate share repurchase program with its available cash reserve while the senior executives and director will use their personal funds.
Commenting on the expanded share repurchase program and management share buyback, Mr. Yinan Hu, founder and Chief Executive Officer of Fanhua, said, "The Board's authorization to expand the share repurchase program demonstrates its confidence in our strategic plan for long-term growth and commitment to shareholder value. We firmly believe that the current stock price is significantly undervalued, as the stock trades at a substantial discount to our net cash value and net asset value and fails to reflect our long-term growth potential."
"While the implementation of the commission cap since the second quarter of 2024 has posed significant challenges to the insurance intermediary industry in
He continued, "In response to the rapid changes in the industry, we have implemented proactive and effective measures to maintain stable operations. Bolstered by our strong cash generation capabilities, our balance sheet remains robust, providing us with significant financial flexibility to execute our growth strategies for sustainable long-term growth. Additionally, we have made notable progress in our intelligent strategic upgrades. Our AI agent 'Du Xiaobao,' developed in collaboration with Baidu Smart Cloud, will officially launch in August. This innovation is expected to significantly enhance our customer service capabilities and operational efficiency, further solidifying our leading position and continuously creating value for our shareholders."
"Our decision to invest personal funds in Fanhua reflects our strong belief in the company's future and our dedication to driving sustainable growth. We are confident in our strategic direction and are committed to delivering long-term value to our shareholders." said Mr. Hu.
About Highest Performances Holdings Inc. (NASDAQ: HPH)
HPH was founded in 2010 with the aim of becoming a top provider of smart home and enterprise services. Its mission is to improve the quality of life for families worldwide, focusing on two main driving forces: "technological intelligence" and "capital investments."HPH has a global strategic perspective and identifies high-quality enterprises with global potential for investment and operations. Its areas of focus include asset allocation, education and study tours, cultural tours, sports events, healthcare and elderly care and family governance.
HPH currently holds controlling interests in two leading financial service providers in
Highest Performances Holdings Inc., formerly known as Puyi Inc., was renamed on March 13, 2024 to reflect its strategic transformation.
About Fanhua
Established in
Our mission revolves around creating an inclusive and collaborative platform for independent financial advisors, as well as various insurance/financial sales organizations, enabling our partners to optimize their practices by offering them end-to-end business solutions spanning compliance, technology, products, services, operations, capital flow, and professional training.
Leveraging advanced technology, artificial intelligence, and data-driven insights, Fanhua is at the forefront of revolutionizing financial services delivery, accelerating digital transformation, and driving industry growth.
With a comprehensive approach to financial services, we connect millions of Chinese families with various financial institutions and service providers, offering a diverse range of opportunities and personalized solutions for insurance protection, retirement planning, health management, asset management, and family governance services, covering the full lifecycle of our customers' needs.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company's future financial and operating results, are made under the "safe harbor" provisions of the
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SOURCE Highest Performances Holdings Inc.
FAQ
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