China's Hywin seeks payment delay on some products amid property woes (updated)
15/12/2023 13:58
(Adds Hywin's total assets, context on China's property sector
and US premarket share moves)
BEIJING, Dec 15 (Reuters) - Chinese wealth manager Hywin
Holdings Ltd. HYW.O , whose products are primarily invested
into real estate, said it has been unable to make some
repayments on time, a sign of spreading stress in a financial
market dragged down by a property crisis.
Hywin said the asset managers for some products distributed
by the company were unable to reach an agreement with relevant
clients to defer redemption, according to a statement released
by the company on Thursday.
According to the company's financial report released on
Sept. 15, it had total assets of 2.37 billion yuan ($328
million) as of June 30, with the number of its clients expanding
by 8.2% to 152,607 from a year ago.
China is facing its biggest headwind to economic growth from
the debt crisis in the property sector that led to downfall of
some of the biggest real estate developers including Evergrande
and Country Garden.
Hywin's announcement on Thursday followed market chatter on
social media that the firm missed payments on some investment
products.
The firm did not immediately reply to a Reuters' request for
comment.
Shares of the Nasdaq-listed company fell 4.5% in premarket
trading after plunging by more than 50% in the last two trading
sessions, while the tech-heavy index .IXIC rallied over 2% in
the same period.
Hywin derives most of its revenues from distributing real
estate products, including those investing in projects from
troubled China Evergrande Group 3333.HK and Sunac China
Holdings Ltd. 1918.HK
Net revenue from real estate products accounted for 88.8% of
its wealth management services in the year ended on June 30,
2020, according to the latest available data from the company's
prospectus released in 2021.
Hywin's said on Thursday it had formed a special
investigation committee comprised of members of senior
management to oversee an internal investigation. It did not give
further details.
China's highly indebted property sector has been reeling from
a liquidity crunch since 2020. Defaults by developers since late
2021 have impeded economic growth and rattled global markets.
In July, signs of trouble at Zhongzhi Enterprise Group, a
leading Chinese wealth manager, came to light when Zhongrong
International Trust Co, a trust firm controlled by Zhongzhi,
missed payments on dozens of investment products.
(Reporting by Ziyi Tang and Ryan Woo; Additional reporting by
Shubham Batra in Bengaluru; Editing by Sharon Singleton and
Mrigank Dhaniwala)
((Ziyi.Tang@thomsonreuters.com;))