BEIJING, October 30, 2019 /PRNewswire/ -- Puhui Wealth
Investment Management Co., Ltd. (Nasdaq: PHCF) ("Puhui" or the
"Company"), a third-party wealth management service provider with a
focus on wealth management services for high net worth ("HNW")
individuals and corporate clients, today announced its financial
results for the year ended June 30,
2019. The Company will file these results today on Form 20-F
with the Securities and Exchange Commission, which can be viewed at
www.sec.gov. All amounts in this press release are in USD unless
otherwise noted.
Financial and Operating Highlights
- Total revenues for the year ended June 30, 2019 were $3.2
million, a decrease from the prior year due to lower
one-time fees. The Company implemented a proactively conservative
investment strategy on behalf of its clients in the first half of
calendar 2019 due to uncertainty in the macroeconomic outlook for
the year.
- The Company continues to maintain a sizable client base.
As of June 30, 2019, 990
high-net worth individuals ("HNW") have transacted with the
company.
- As of June 30, 2019, the
Company's subsidiary served as manager or general partner of
four funds with an aggregate of approximately $23.0 million under management.
- Current financial products consist of 25 financial products,
four of which are self-developed and 21 are issued by third-party
institutions.
- Continued to expand its strategic cooperation with a well-known
investment manager, Yingke Innovation Asset Management Co., Ltd.
("Yingke").
- Puhui had approximately $2.0
million of cash and approximately $7.4 million of working capital as of
June 30, 2019.
Mr. Zhe Ji, the Chairman and CEO
of the Company, stated, "Puhui continued to service a greater total
number of high net worth clientele despite challenges in the
macro-economic environment that impacted our financial results for
the year, particularly in the first half of calendar 2019. This
uncertainty was due to a variety of factors, including a slowdown
in growth, rising deflationary pressure, and trade concerns driven
by geo-political concerns. This led to general credit tightening
throughout the domestic China
market, however we have seen this alleviate in recent months as
credit growth has accelerated. Our service is predicated on
providing prudent financial counsel to individual clients and
building a loyal client base with long-term relationships. During
uncertain times in the market, we feel that this represents an
opportunity for Puhui to distinguish itself from competitors. With
access to global markets as a public company, we believe Puhui is
well-positioned to diversify its product offering for HNW
clientele. We remain focused on utilizing our existing
partnerships, such as with Yingke, to provide access to a broader
base of investors where we can prove that our long-term investment
philosophy can gain traction over time."
Market Commentary
Mr. Ji continued, "We remain very bullish on the long-term
indicators surrounding China's
wealth management industry, along with Puhui's position as a
versatile manager able to provide comprehensive products and
services at a competitive rate for a broad audience. According to
Credit Suisse's Global Wealth Report 2019, the world's wealthiest
10% hold assets over USD $109,400,
with over 100 million individuals who make that threshold residing
in China (and is the fastest
growing globally). Our target customer base are HNW individuals
averaging over USD $200,000. We
believe the long-term drivers remain strong and our focus on
middle-class family investment through diversified products leave
the Company well positioned."
Financial Review
Wealth Management
- Since fiscal year 2017, Puhui's core business has been the
marketing of financial products to high-net-worth clients and small
and medium enterprises in China.
As a growing independent wealth management service provider, the
Company maintains a sizable client base, consisting of 990 clients
as of June 30, 2019 (282 of which
have purchased products the Company markets more than once).
Asset Management
- Starting in June 2017, Puhui also
launched its in-house asset management business. As of June 30, 2019, the Company's subsidiary served as
manager or general partner of four funds with an aggregate of
approximately US$23.0 million under
management.
Revenues
- The Company categorizes revenues into third party revenues and
related party revenues. Related party revenues consist primarily of
recurring management fees paid by limited partnership funds where
the Company serves as general partner.
- Overall, total revenues were $3.2
million for the year ended June 30,
2019, compared to $4.1 million
in the prior year. The overall decrease was mainly due to a
decrease in one-time commissions driven by the Company maintaining
a cautious approach with its HNW clients due to uncertainty in the
macroeconomic outlook in fiscal year 2019.
Cost of Revenues
- Puhui's cost of revenues consist of compensation paid to
financial product development team members along with benefits. The
Company's cost of revenues were $316,718 and $367,548 for the years ended June 30, 2019 and 2018, respectively. Cost of
revenues remained largely consistent from year to year.
Operating Expense
- The Company's operating expense increased to $5.7 million from $3.8
million in the prior year, largely due to an increase in
salaries, rent and professional fees associated with public company
costs, business expansion, and consulting fees.
Net Loss
- Net loss for the year ended June 30,
2019 was $3.1 million, as
compared to net income of $125,827
for the prior year, largely due to the higher operating expenses
detailed above.
Liquidity and Capital Resources
- The Company has historically financed its operations primarily
through cash flows from operations, additional capital
contributions from shareholders and short-term advances from
related parties.
- For the year ended June 30, 2019,
the Company received approximately $8.0
million, net of expenses, from issuance of ordinary shares
from its Nasdaq IPO.
- The Company had approximately $2.0
million of cash and approximately $7.4 million of working capital as of
June 30, 2019 and believes its
current working capital is sufficient to support operations for the
next twelve months.
About Puhui Wealth Investment Management Co., Ltd.
Headquartered in Beijing,
China, Puhui is a third-party wealth management service
provider focusing on marketing financial products (including
private equity and other diversified products and services) to, and
managing funds for, individuals and corporate clients in the PRC.
On December 27, 2018, the Company's
ordinary shares were listed and began trading listed on the Nasdaq
Capital Market (ticker: PHCF).
Additional information about Puhui can be found at the Company's
corporate website: www.puhuiwealth.com.
Forward Looking Statements
This news release contains "forward-looking statements" within
the meaning of the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"anticipate", "believe", "expect", "estimate", "plan", "outlook",
and "project" and other similar expressions that indicate future
events or trends or are not statements of historical matters. These
statements are based on our management's current expectations and
beliefs, as well as a number of assumptions concerning future
events.
Such forward-looking statements are subject to known and unknown
risks, uncertainties, assumptions and other important factors, many
of which are outside of our control and all of which could cause
actual results to differ materially from the results discussed in
the forward-looking statements. Accordingly, forward-looking
statements should not be relied upon as representing our views as
of any subsequent date, and we do not undertake any obligation to
update forward-looking statements to reflect events or
circumstances after the date they were made, whether as a result of
new information, future events or otherwise, except as may be
required under applicable securities laws. Factors that could cause
actual results to differ materially from those expressed or implied
in forward-looking statements can be found in our reports filed
with the Securities and Exchange Commission, which are
available, free of charge, on the SEC's website
at www.sec.gov.
Investor
Relations:
|
|
The Equity Group
Inc.
|
In China
|
Adam Prior
|
Lucy Ma
|
(212)
836-9606
|
+86 10 5661
7012
|
aprior@equityny.com
|
lma@equityny.com
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
For the Years Ended
June 30,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
Revenues
|
$
|
3,072,809
|
$
|
2,808,346
|
|
Revenues - related
parties
|
|
129,122
|
|
1,351,515
|
|
Sales
taxes
|
|
(21,297)
|
|
(20,680)
|
|
|
Total
revenues
|
|
3,180,634
|
|
4,139,181
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
Cost of
revenues
|
|
(316,718)
|
|
(367,548)
|
|
Selling
expenses
|
|
(2,005,367)
|
|
(1,500,572)
|
|
General and
administrative expenses
|
|
(3,421,412)
|
|
(1,888,310)
|
|
Impairment
loss
|
|
(5,628)
|
|
(78,984)
|
|
|
Total operating
expenses
|
|
(5,749,125)
|
|
(3,835,414)
|
|
|
|
|
|
(LOSS) INCOME FROM
OPERATIONS
|
|
(2,568,491)
|
|
303,767
|
|
|
|
|
|
OTHER INCOME
(EXPENSES)
|
|
|
|
|
|
Interest
income
|
|
62,967
|
|
11,526
|
|
Other finance
expenses
|
|
(206,081)
|
|
(128,112)
|
|
Other income
(expenses), net
|
|
808
|
|
86,966
|
|
|
Total other expenses,
net
|
|
(142,306)
|
|
(29,620)
|
|
|
|
|
|
(LOSS) INCOME BEFORE
INCOME TAXES
|
|
(2,710,797)
|
|
274,147
|
|
|
|
|
|
PROVISION (BENEFIT)
FOR INCOME TAXES
|
|
|
|
|
|
Current
|
|
11,803
|
|
298,935
|
|
Deferred
|
|
380,302
|
|
(150,615)
|
|
|
Total income tax
provision
|
|
392,105
|
|
148,320
|
|
|
|
|
|
|
|
NET (LOSS)
INCOME
|
|
(3,102,902)
|
|
125,827
|
|
|
|
|
|
Less: Net loss
attributable to noncontrolling interests
|
|
(645,716)
|
|
(349,519)
|
|
|
|
|
|
NET (LOSS) INCOME
ATTRIBUTABLE TO PUHUI WEALTH
|
$
|
(2,457,186)
|
$
|
475,346
|
|
|
|
|
|
NET (LOSS)
INCOME
|
$
|
(3,102,902)
|
$
|
125,827
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME (LOSS)
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
(271,194)
|
|
(34,199)
|
|
|
|
|
|
|
|
COMPREHENSIVE (LOSS)
INCOME
|
$
|
(3,374,096)
|
$
|
91,628
|
|
|
|
|
|
Less: Comprehensive
loss attributable to noncontrolling interests
|
|
(672,272)
|
|
(350,314)
|
|
|
|
|
|
COMPREHENSIVE (LOSS)
INCOME ATTRIBUTABLE TO PUHUI WELATH
|
$
|
(2,701,824)
|
$
|
441,942
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF ORDINARY SHARES
|
|
|
|
|
|
Basic and
diluted
|
|
10,793,017
|
|
10,000,000
|
|
|
|
|
|
|
EARNINGS PER
SHARE
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.23)
|
$
|
0.05
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
June 30,
|
|
June 30,
|
|
2019
|
|
2018
|
|
|
|
|
ASSETS
|
CURRENT
ASSETS
|
|
|
|
|
|
Cash
|
$
|
2,004,625
|
$
|
4,809,040
|
|
Short-term
investments
|
|
706,226
|
|
1,101,317
|
|
Accounts
receivable
|
|
1,853,041
|
|
1,673,764
|
|
Accounts receivable -
related parties
|
|
1,013,135
|
|
1,051,718
|
|
Other
receivables
|
|
213,252
|
|
206,831
|
|
Loans receivable -
related party
|
|
1,647,858
|
|
-
|
|
Prepaid
expenses
|
|
1,278,133
|
|
265,138
|
|
Deferred offering
costs
|
|
-
|
|
700,094
|
|
|
Total current
assets
|
|
8,716,270
|
|
9,807,902
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, NET
|
|
223,385
|
|
135,682
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
Long-term security
deposits
|
|
384,860
|
|
-
|
|
Acquisition
prepayment
|
|
2,447,259
|
|
416,761
|
|
Intangible asset,
net
|
|
10,241
|
|
-
|
|
Long-term prepaid
expenses
|
|
2,247,872
|
|
-
|
|
Deferred tax assets,
net
|
|
347,195
|
|
782,911
|
|
|
Total other
assets
|
|
5,437,427
|
|
1,199,672
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
14,377,082
|
$
|
11,143,256
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Customer
deposits
|
$
|
-
|
$
|
250,529
|
|
Other payables and
accrued liabilities
|
|
808,328
|
|
677,215
|
|
Other payables -
related party
|
|
-
|
|
196,300
|
|
Deferred
revenues
|
|
227,622
|
|
303,637
|
|
Taxes
payable
|
|
10,512
|
|
356,440
|
|
Current portion of
long-term debt
|
|
315,983
|
|
302,001
|
|
|
Total current
liabilities
|
|
1,362,445
|
|
2,086,122
|
|
|
|
|
|
LONG-TERM
DEBT
|
|
1,206,565
|
|
1,208,003
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
2,569,010
|
|
3,294,125
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Preferred shares,
$0.001 par value, 1,000,000 shares authorized, 0 shares issued
and
|
|
-
|
|
-
|
|
|
outstanding as of
June 30, 2019 and June 30, 2018
|
|
|
|
Ordinary shares,
$0.001 par value, 49,000,000 shares authorized,
|
|
11,508
|
|
10,000
|
|
|
11,507,558 and
10,000,000 shares issued and outstanding
|
|
|
|
|
as of June 30,
2019 and June 30, 2018, respectively
|
|
|
|
Additional paid-in
capital
|
|
21,911,045
|
|
14,613,119
|
|
Accumulated
deficit
|
|
(9,221,341)
|
|
(6,764,155)
|
|
Accumulated other
comprehensive loss
|
|
(251,958)
|
|
(7,320)
|
|
|
Total shareholders'
equity attributable to controlling shareholders
|
12,449,254
|
|
7,851,644
|
|
|
|
|
|
Noncontrolling
interests
|
|
(641,182)
|
|
(2,513)
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
11,808,072
|
|
7,849,131
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
14,377,082
|
$
|
11,143,256
|
PUHUI WEALTH
INVESTMENT MANAGEMENT CO., LTD AND SUBSIDIARIES
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
For the Years Ended
June 30,
|
|
|
2019
|
|
2018
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net (loss)
income
|
$
|
(3,102,902)
|
$
|
125,827
|
|
Adjustments to
reconcile net (loss) income to net cash (used in)
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
135,939
|
|
78,514
|
|
|
|
Loss on disposal of
property and equipment
|
|
78
|
|
280
|
|
|
|
Impairment loss on
equity security
|
|
5,628
|
|
78,984
|
|
|
|
Loss from disposal of
subsidiaries
|
|
32,641
|
|
-
|
|
|
|
Deferred tax
provision (benefits)
|
|
380,302
|
|
(150,615)
|
|
|
Change in operating
assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(242,674)
|
|
(1,332,431)
|
|
|
|
Accounts receivable -
related parties
|
|
-
|
|
(1,070,648)
|
|
|
|
Other
receivables
|
|
(402,174)
|
|
114,479
|
|
|
|
Prepaid
expenses
|
|
(932,928)
|
|
(139,496)
|
|
|
|
Long-term prepaid
expenses
|
|
(2,248,912)
|
|
-
|
|
|
|
Customer deposit
received (returned)
|
|
(233,541)
|
|
968,426
|
|
|
|
Other payables and
accrued liabilities
|
|
156,724
|
|
177,776
|
|
|
|
Other payables -
related party
|
|
(190,666)
|
|
199,834
|
|
|
|
Deferred
revenues
|
|
(65,413)
|
|
309,102
|
|
|
|
Taxes
payable
|
|
(426,597)
|
|
319,696
|
|
|
|
|
Net cash (used in)
provided by operating activities
|
|
(7,134,495)
|
|
(320,272)
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
Proceeds from sales
of short-term invesements
|
|
365,462
|
|
-
|
|
Purchases of
short-term investments
|
|
(24,347)
|
|
(1,913,794)
|
|
Loans receivable to
related party
|
|
(1,661,514)
|
|
-
|
|
Acquisition
prepayment
|
|
(2,042,460)
|
|
-
|
|
Purchases of property
and equipment
|
|
(159,514)
|
|
(132,998)
|
|
Proceeds from sale of
property and equipment
|
|
990
|
|
3,536
|
|
Purchase of
intangible asset
|
|
(12,644)
|
|
-
|
|
|
|
|
Net cash (used in)
provided by investing activities
|
|
(3,534,027)
|
|
(2,043,256)
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
Payment of deferred
offerring costs
|
|
-
|
|
(712,696)
|
|
Payment of
acquisition deposit
|
|
-
|
|
(424,263)
|
|
Capital contribution
from shareholders
|
|
-
|
|
6,469,679
|
|
Short-term advances
made to related parties
|
|
-
|
|
-
|
|
Short-term advances
from related parties
|
|
-
|
|
-
|
|
Proceeds from
issuance of ordinary shares through IPO, net
|
|
8,032,912
|
|
-
|
|
Proceeds from
long-term debt
|
|
-
|
|
1,537,184
|
|
|
|
|
Net cash provided by
(used in) financing activities
|
|
8,032,912
|
|
6,869,904
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
(168,805)
|
|
(19,854)
|
|
|
|
|
|
(DECREASE) INCREASE
IN CASH
|
|
(2,804,415)
|
|
4,486,522
|
|
|
|
|
|
CASH, beginning of
year
|
|
4,809,040
|
|
322,518
|
|
|
|
|
|
CASH, end of
year
|
$
|
2,004,625
|
$
|
4,809,040
|
|
|
|
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION:
|
|
|
|
|
|
Cash paid for income
tax
|
$
|
240,508
|
$
|
27,722
|
|
Cash paid for
interest
|
$
|
197,999
|
$
|
-
|
|
|
|
|
|
NON-CASH TRANSACTIONS
OF FINANCING ACTIVITIES
|
|
|
|
|
|
Fair value adjustment
offsetting customer deposits with short-term investment
|
$
|
-
|
$
|
713,568
|
|
Prepaid IPO costs to
be net against IPO proceeds
|
$
|
733,478
|
$
|
-
|
View original
content:http://www.prnewswire.com/news-releases/puhui-wealth-investment-management-co-ltd-announces-financial-results-for-the-fiscal-year-ended-june-30-2019-300948697.html
SOURCE Puhui Wealth Investment Management Co., Ltd.