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Hywin Holdings Ltd. ("Hywin", or the "Company") (NASDAQ:HYW) today announced its plan for strategic business transformation in light of recent regulatory policies and market developments. Under this new strategy, the Company will (i) shift its financial services and product distribution businesses towards public market funds and NAV-based products, (ii) strategically promote growth of its insurance brokerage services business, (iii) continue to grow and develop its overseas wealth management and asset management services, and (iv) diversify income streams by continuing to develop other non-financial service businesses such as high-end health management services, and opportunistically expanding into consumer industries including distribution of Chinese liquors and other consumer products, which Hywin expects may achieve potential synergy with its existing clientele of high-net-worth individuals in China.
Historically, Hywin has relied heavily on its wealth management services business and generated a significant amount of its revenue from the distribution of asset-backed products, many of which were related to the real estate industry. Against the backdrop of adverse market conditions, and the challenging liquidity environment in which it operates, Hywin has ceased to distribute asset-backed products, and will shift its business focus from fixed-income wealth management products to NAV-based products and insurance brokerage services. Hywin has investigated reports of defaults of asset-backed products it had historically distributed and is actively addressing these redemption issues, while proactively coordinating with asset managers, relationship managers and clients to seek solutions and reduce client losses.
In light of recent regulatory policies and market developments, Hywin has started to realign its business focus as follows:
As part of the business transformation plan, Hywin is undertaking a structural reorganization plan, which includes elimination of certain positions and aggressive cost saving measures, including the redundancy of approximately 300 middle- and back-office employees. Further redundancy of frontline employees may occur as Hywin is in the process of setting up new sales policies and targets for its nationwide relationship manager team. In addition, as part of Hywin's structural reorganizational plan, Hywin will simplify its regional management and consolidate its physical offices across China by concentrating on certain key regions and cities.
The Company also announces that Ms. Zhu Shuming, a director of the Company, has submitted her resignation to the board of directors ("Board") due to personal reasons, effective on March 31, 2024. Mr. Wang Gui, the vice president of strategy of the Company, has also submitted his resignation to the Board due to personal reasons, effective on March 31, 2024. The Board confirms that there are no disagreements between them and the Company or the Board.
Posted In: HYW