Chinese wealth manager Hywin will reduce reliance on property - CFO
01/09/2021 16:49
SHANGHAI, Sept 1 (Reuters) - Hywin Holdings Ltd HYW.O ,
which provides wealth management services in China, will aim to
reduce its reliance on real estate by expanding new products and
growing businesses offshore, chief financial officer Lawrence
Lok said on Wednesday.
Hywin, which derives most of its revenues from distributing
real estate products, including those investing in projects from
China Evergrande Group 3333.HK , will focus on new offerings
such as privately-raised securities products.
"We need to follow the Chinese government's directions and
policy guidance, when we strategise our product directions," Lok
told Reuters in an interview.
Reducing the level of exposure to real estate is
"inevitable, but it will be a process over time."
China has launched tough measures to wean the real estate
sector from excessive debt, squeezing developers.
Evergrande, China's most indebted property developer, has
been scrambling to raise funds it needs to pay its many lenders
and suppliers, amid deepening investor concerns of default.
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"There's a lot of speculation and uncertainties around this
particular developer and that's inevitable," Lok said, adding
Evergrande is just one of many institutions Hywin partners with.
"We are always on the watch for any risk that's inherent in
the products on our shelves."
Hywin will help investors understand the risks in real
estate products in a transparent way as "there are underlying
assets that people can actually go and see," said the former
Citigroup banker, who was appointed as CFO last month.
The risk is also limited by the fact that the government has
various goals, including deleveraging and maintaining financial
stability, he said.
Hywin's net income jumped 111.1% to 62.1 million yuan
($9.61 million) in the three months to June 30, while revenue
rose 43%. The number of active clients increased 17.6% to
29,094.
Hywin is also expanding its geographic footprint, having set
up a family office in Hong Kong. Many wealthy Chinese keep their
money offshore, and "we believe we can tap into that client base
quite effectively," Lok said.
($1 = 6.4605 Chinese yuan renminbi)
(Reporting by Samuel Shen and Andrew Galbraith; Editing by Mike
Harrison)
((samuel.shen@thomsonreuters.com; +86 21 20830018; Reuters
Messaging: samuel.shen.thomsonreuters.com@reuters.net))