Puyi Fund, Managed by Highest Performances Holdings Inc., Surpasses RMB 24.0 Billion in Assets under Advice, Showing Promising Start to Strategic Transformation

Rhea-AI Summary

Highest Performances Holdings Inc. (NASDAQ: HPH) announced that its Puyi Fund's assets under advice reached RMB 24.7 billion as of June 21, 2024, marking a year-on-year growth of 188%. This sharp increase is attributed to the fund's strategic transformation, including product strategy adjustments and digital innovation. Puyi Fund's asset allocation services now span across various types of accounts to balance risk and ensure consistent returns. The company also implemented a comprehensive digital transformation, improving client services and enhancing retention rates to 75% as of June 2024. The fund has attracted significant institutional investments and established partnerships with 117 mutual fund companies, providing access to nearly 11,000 public funds. These initiatives aim to align with shifting investor preferences towards lower-risk assets in the Chinese market.

Positive

• Puyi Fund's assets under advice reached RMB 24.7 billion, a 188% year-on-year growth.
• Enhanced digital services improved client retention rates to 75% as of June 2024.
• Established partnerships with 117 mutual fund companies, providing access to nearly 11,000 public funds.
• Puyi Fund's adaptive product strategy aligns with market trends, focusing on lower-risk, higher-certainty assets.

Negative

• None.

Insights

Financial Analyst

The Puyi Fund's achievement of RMB 24.7 billion in assets under advice, representing a significant 188% year-on-year increase, is a noteworthy development. This indicates robust growth driven by strategic realignment and digital transformation efforts. The introduction of a comprehensive family wealth management account system and the focus on fixed-income funds suggest a targeted approach to enhance client satisfaction and retention. However, while the fund's performance is impressive, it's important to consider the broader implications:

Short-term Implications: The substantial growth in assets under advice could potentially attract more retail and institutional investors, positively impacting HPH's stock price in the short term. Higher client retention rates and improved client satisfaction further bolster this positive outlook.

Long-term Implications: The strategic transformation towards fixed-income funds aligns well with the current market trend in China, where investors are increasingly favoring lower-risk, higher-certainty assets. This could ensure sustained growth and stability for the fund, potentially leading to a more steady revenue stream for HPH.

Potential Drawbacks: A heavier reliance on fixed-income products might limit growth prospects if market conditions change. Additionally, the rapid growth rate may pose integration and operational challenges, necessitating effective management to sustain performance.

Overall, the financial results and strategic initiatives signify strong progress but require careful monitoring to ensure long-term success.

Market Research Analyst

The strategic shift towards fixed-income funds and the digital transformation at Puyi Fund aligns well with prevailing market trends in China. The Chinese mutual fund market data reveals a RMB 3.64 trillion increase in market value from 2021 to 2024, with a notable shift towards bond and money market funds. By adapting to these trends, Puyi Fund is positioned to capture a growing segment of risk-averse investors seeking stable returns.

Moreover, the implementation of advanced digital services and personalized client interactions enhances the fund's competitive edge. The high client retention rate of 75% and the satisfaction rate of 99% underscore the effectiveness of these initiatives in building client loyalty and trust.

Short-term Implications: The alignment with market trends and the enhanced digital service offerings could lead to increased market share and improved brand recognition, driving short-term gains.

Long-term Implications: The focus on client-centric digital transformation and personalized services is likely to foster long-term client relationships, ensuring sustainable growth. However, the fund must continue to innovate to stay ahead of competitors and maintain its market position.

The strategic alignment with market trends and the focus on digital transformation provide a strong foundation for Puyi Fund's growth, though continuous innovation will be key to long-term success.

GUANGZHOU, China, June 25, 2024 /PRNewswire/ -- Highest Performances Holdings Inc. ("HPH" or the Group, NASDAQ: HPH), announces that its Puyi Fund's assets under advice for its asset allocation services reached RMB 24.7 billion as of June 21, 2024, reflecting a remarkable year-on-year growth of 188%. This substantial increase in scale showcases significant growth for the fund.

This accomplishment is primarily attributed to the Puyi Fund's service philosophy, "long-term commitment to clients and clients' long-term benefits," introduced in 2023, as well as the ongoing efforts of the Company in adjusting its product strategy and embracing digital transformation. On one hand, the Company implemented a comprehensive family wealth management account system, redirecting its flagship products towards fixed-income funds and fund portfolios to enhance clients' perception of wealth acquisition. On the other hand, the Company has elevated its overall service standard through digital transformation, greatly improving the client's investment experience.

Transforming Product Strategy to Maximize Client Returns

In relation to product strategy transformation, Puyi Fund offers investors a comprehensive solution for managing their family wealth through a scientific approach. This solution guides investors in allocating their investment assets across three types of accounts: Flexible Withdrawal Accounts, Stable Appreciation Accounts, and High-Yield Pursuit Accounts. By considering various market conditions and cycles, investors can make informed decisions on how to distribute their funds among these accounts through a scientific approach for achieving risk mitigation, consistent asset growth, and long-term sustainable investment returns.

Taking into account the prevailing market conditions in China, Puyi Fund advises investors to allocate 25% to 90% of their funds to Stable Appreciation Accounts, depending on their risk tolerance. These accounts primarily involve investing in fixed-income funds, providing investors with consistent and reliable expected returns. By employing the stable appreciation strategy, Puyi Fund aims to restore investors' confidence in the market, leading to increased trust and recognition. Consequently, Puyi Fund has experienced a period of rapid growth and positive development.

An analysis of data from the Chinese mutual fund market highlights the alignment of Puyi Fund's client-centric product strategy transformation with market demands. According to Wind data, the market value of the Chinese mutual fund market stood at RMB 25.45 trillion at the end of 2021. By the end of May 2024, this amount grew to RMB 29.09 trillion, representing an increase of RMB 3.64 trillion or 14.30%. The value of equity and hybrid funds, however, experienced a decline from RMB 8.54 trillion to RMB 6.34 trillion, marking a decrease of RMB 2.21 trillion. In contrast, bond funds and money market funds collectively witnessed a significant increase of RMB 5.69 trillion. These market trends suggest that Chinese fund investors are shifting their risk preferences towards lower-risk and higher-certainty assets. Puyi Fund's strategic transformation is well-positioned to take advantage of this evolving trend.

Enhancing Digital Service Innovation with a Focus on Client Service

In its digital transformation efforts, Puyi Fund places a strong emphasis on "client-centricity" and "service excellence". By harnessing the power of big data, algorithm mining, and the Sensor Intelligent System, Puyi Fund establishes personalized service scenarios tailored to the unique needs of thousands of individuals. Through meticulous operations that cover the full client lifecycle, Puyi Fund offers full-scope online transactions for both public and private fund clients, establishing a distinctive digital competitive advantage. As of June 2024, the year-to-date client retention rate for fund advisory services stands at 75%, significantly enhancing the likelihood of investment profitability and returns for clients. This success enables clients to truly appreciate the value of advisory services and the time invested in their investments.

Furthermore, Puyi Fund has made continuous advancements in its intelligent client service system, leveraging digital platforms to offer investors comprehensive and efficient services. As of June 2024, the intelligent client service has catered to the needs of approximately 250,000 investors, providing 7*24 services, with a problem resolution rate surpassing 90%. Moreover, Puyi Fund complements intelligent client service with human support, resulting in a client satisfaction rate of 99%. This approach guarantees that investors receive timely and effective assistance whenever required.

Optimizing Trust-Based Communication Channels with Clients

Puyi Fund's capability to swiftly establish client trust is attributable to its distinctive offline service channels. Unlike other third-party fund sales institutions that heavily rely on online platforms, Puyi Fund provides face-to-face, one-on-one services through offline channels. This approach is especially valuable in navigating complex investment environments, effectively calming investor emotions, enabling them to stay composed and gain a proper understanding of products, ultimately making well-informed investment decisions. Since 2024, Puyi Fund's research and advisory team has released 28 specialized research reports and organized 19 online client exchanges, along with 35 offline client events, in response to market dynamics and client needs. These initiatives have effectively addressed investors' concerns and enhanced their confidence.

It is worth mentioning that Puyi Fund's institutional business has experienced remarkable growth this year, particularly in attracting clients from prominent financial institutions including banks, wealth management subsidiaries, and insurance companies. To cater specifically to institutional investors, Puyi Fund has developed an intelligent over-the-counter fund trading system called "Web-based Institution Master system". This system provides institutional investors with a wide range of product portfolios, a comprehensive investment research system, and personalized trading experiences. As a result, it comprehensively improves the service quality and efficiency for institutional clients.

As of June 21, Puyi Fund established partnerships with 117 mutual fund companies, including the top 20 fund managers in terms of size, providing access to nearly 11,000 public funds and implementing over 20 customized advisory strategies. In the private fund sector, Puyi Fund has selected over 30 fund managers from the entire market. Of these, 38% manage assets over RMB 10 billion, while 29% manage assets between RMB 5 billion and RMB 10 billion. This selection covers a wide range of mainstream strategy products in the market, catering to the allocation needs of various types of investors.

It is reported that Puyi Fund, an independent third-party fund sales institution holding a fund sales business license issued by the China Securities Regulatory Commission, operates as a subsidiary of Highest Performances Holdings Inc. (NASDAQ: HPH). Embracing the concept of buyer advisor, Puyi Fund is dedicated to delivering comprehensive family financial asset allocation services to individual investors and diversified financial services to institutional investors through its financial technology service platform. With exceptional resource integration capabilities, professional research expertise, and high-quality client service, Puyi Fund strives to cultivate long-term partnerships with clients, catering to their personalized asset allocation needs in various scenarios while assisting a broader range of investors in achieving sustainable long-term returns. As of December 31, 2023, the accumulated assets under Puyi Fund's allocation advisory services surpassed RMB 75.1 billion, exhibiting a compound annual growth rate of 128.8% from 2015 to 2023.

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 China, namely Fanhua Inc., a technology-driven platform, and Fanhua Puyi Fund Distribution Co., Ltd., an independent wealth management service provider.

Highest Performances Holdings Inc., formerly known as Puyi Inc., was renamed on March 13, 2024 to reflect its strategic transformation.

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SOURCE Highest Performances Holdings Inc.

FAQ

What is the latest asset value of Puyi Fund under Highest Performances Holdings Inc. (HPH)?

As of June 21, 2024, the assets under advice for Puyi Fund reached RMB 24.7 billion.

How much did Puyi Fund grow in the past year?

Puyi Fund experienced a year-on-year growth of 188% in assets under advice.

What strategic changes did HPH's Puyi Fund implement?

Puyi Fund adjusted its product strategy to focus on fixed-income funds and fund portfolios; it also embraced digital transformation to enhance client services.

What is the client retention rate for HPH's Puyi Fund as of June 2024?

The client retention rate for Puyi Fund's advisory services stood at 75% as of June 2024.

How many mutual fund companies has Puyi Fund partnered with?

Puyi Fund has established partnerships with 117 mutual fund companies.

How does Puyi Fund's product strategy align with market trends?

Puyi Fund focuses on lower-risk, higher-certainty assets in response to a shift in Chinese investor preferences.