Q4 2021 Hywin Holdings Ltd Earnings Call

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Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to high Wind Holdings limited fourth quarter and full year 2021 earnings conference call.

This time all participants are in a listen only mode. We will be hosting a question and answer session. After management's prepared remarks.

I will now turn the call over to first speaker today, Ms. Lucy <unk> Senior director of Investor Relations and Highway Holdings. Please go ahead Madame.

Thank you all for joining today's Cosmo hirings on audited financial results for the fourth quarter and full fiscal year 2021 before I start I refer you to the Safe Harbor statement in the company's earnings release, which also applies to this conference call today as our management will make forward looking statements.

On the call with me today, our director and CEO, Madam Wang and our CFO Mr. Lawrence Block minimum one will review the Companys overall performance with fiscal year 2020. One then Mr. Lawrence Marc will discuss our financial results of fourth quarter and full fiscal year, 2020 one indeed.

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Mr Law will translate for Madam Wang you may refer to our financial results on the Companys IR website I will now turn the call over to met alone.

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And this past year China's recovery from the COVID-19, pandemic continued fueling a strong economic rebound.

According to forecasts by the China insights consultancy. The total investable assets of China's households are on track to exceed 240 trillion renminbi by the end of 2021.

Elevated uncertainties in the macro outlook and market trends have driven high net worth clients demand for professional wealth management services and global asset allocation advisory.

Meanwhile, clients are extending their focus beyond just risks and returns in their investment process.

Clients become more sophisticated and pursue diverse goes over longer horizons.

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2021 is the 16th year in high winds corporate journey and also our first year as a public company listed on NASDAQ.

Cheap excellent operating results and financial performance in fiscal 2021, as our net revenue increased by 42, 8% from the prior fiscal year to $84.0 billion renminbi.

Our discipline and cost control also yielded solid results operating costs increased by 37, 9% from the prior fiscal year to 155 billion renminbi growing at a slower pace than our net revenue growth on.

On the back of our strong revenue growth and effective cost control. Our net income in fiscal 2021 increased by 95, 6% from the prior fiscal year to 208 million renminbi.

Our strong net revenues and net income once again reflected the competitive strength of our client proposition our product proposition and our talent proposition.

Our excellent financial performance. This year is also a ringing endorsement of our eight dimensional business strategy, which aims to deepen client relationships diversified product offerings optimized distribution footprint unlock value from technology upgrades research and advisory.

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Our fiscal 'twenty one results have further reinforced our strategy conviction and accelerated our pursuit of long term sustainable growth.

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In terms of our client franchise, our total number of clients increased by 12, 5% from the prior fiscal year, reaching 127000 as of June 30.

Our number of active clients in fiscal 2021 increased four 5% from the prior fiscal year, reaching 38000.

We believe client trust is the ultimate engine of steady business growth.

In fiscal 2021, the repeat investment rate of our clients was 76, 7%.

This is a key metric for measuring client stickiness and we have shown and continued our industry leadership in this regard over recent years.

This consistently strong client activity level and revenue production were made possible by our rigorous mapping of client needs differentiated offerings high quality client conversations and continuous client servicing.

Meanwhile, Investor Education is also an important channel for maintaining and enhancing our clients Trust.

During fiscal 'twenty, one we held 1519 investments seminars across China attended by nearly 4000.40000 clients.

In addition, we used technology to maintain high frequency digital engagement with our clients.

For example, utilizing webinars, our own app and other various digital channels.

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We also continue to enhance our product structure from wealth management to asset management from renminbi assets to global asset allocation and from product solutions to holistic advisory we are continuously expanding our business scope to create value for our clients.

In fiscal 'twenty, one transaction value for our wealth management segment increased by 15% from the prior fiscal year to $86.0 billion renminbi, mainly driven by growth now privately raised product subcategory, which increased 38, 4% from the prior fiscal year to reach <unk>.

73 billion renminbi and.

In particular, the transaction value of privately rate securities products increased 46 times year on year to $8.0 billion renminbi going forward. We believe privately raised securities product will become one of the key drivers for our product mix diversification.

Our future growth will be supported by our expanding spectrum of product offerings, but will also be safeguarded by our robust product on boarding and risk management processes as well as our asset allocation expertise.

On the asset management side in fiscal 'twenty, one our asset management business scaled up rapidly with AUM, increasing by 69, 9% from the prior fiscal year to two.

Two zero billion renminbi.

Leveraging high wind asset management, Hong Kong limited as our asset management hub in the offshore space, we provided highly tailored portfolio management solutions to ultra high net worth clients and institutional clients in Asia using the.

External asset management business model.

While we launched a series of high wind branded Cayman funds to offer a number of strategies to find out with clients, including global private equity.

Fixed income greater China equity and more.

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During fiscal 'twenty, one our distribution network continued to expand with our footprint increasing from 84 cities to 87 cities, while our number of service centers increased from 167 to 177 as a result, our client service.

Zinc capacity and competitive moats in the local markets continue to grow our footprint strategy has been highly effective.

With our headquarters in Shanghai, and two regional hub in the Bohai economic risks and the Greater Bay area, we have penetrated into 18 strategic cities in China, and we are covering most of China's wealthiest cities.

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In fiscal 'twenty, one we continued to invest in our people as of June 30, our number of relationship managers was 1584, a slight decrease from the prior fiscal year. However, the transaction value of bulk management products per RM increased by <unk> <unk>.

16, 1% to $56.0 million renminbi.

Attrition rates within the elite segments of our relationship managers was less than 6%, which show our staff loyalty and stability.

During fiscal 'twenty. One we also continued to strengthen our training programs and implemented differentiated incentive schemes across various tiers of relationship managers. Meanwhile, our continuous upgrade and our research and technology platforms also further empowered our frontline.

<unk> staff, thereby during the transformation of our relationship managers from a product based proposition to holistic trusted advisory when they engage with our clients.

This year, we also worked with Willis towers Watson to implement a more nimble organizational structure to enhance our platform synergies and efficiency through increased internal connectivity and collaborations we aim for optimal resource allocation and plus.

Addition ourselves to be more responsive to any shift in the operating environment.

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Our digital transformation accelerated in fiscal 2021, we implemented our 321 technology infrastructure and.

And three to 143 digital portals for our clients our relationship managers and all products.

Two middle office engines, meaning our commercial middle office, and our data as a middle office and one technology infrastructure platform, which underlies all of our major functions.

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Monthly active users Mou.

Electronic contract signing rates are.

Our digital mapping of clients and more.

During this quarter, we also launched our ex link big data engine the.

The engine uses big data to help our relationship managers on multiple fronts, including data analytics analytics of clients all on behaviors.

Sales protection, our client servicing lifecycle management early warnings on client attrition and more these tools enable relationship managers to fully maximize client profitability and our share of the client's wallets.

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During this fiscal year. We also continue to invest in our research capabilities, we recruited seasoned analysts from leading investment banks to lead our research efforts on macroeconomics asset classes and portfolio strategies.

<unk> intellectual insights are incorporated into our sales and advisory processes through Robo advisors and other sales and marketing in the phases.

We also entered into a strategic collaboration with the Shanghai Advanced Institute of Finance, which is a part of the prominent Shanghai telephone University.

This partnership will convert latest academic insights into value creation for our clients.

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Our efforts and achievements were highly regarded in the industry in fiscal 2021, <unk> and our senior management, while more than 80 major awards from numerous.

Industry bodies and publications. These awards are attributes to our successful growth strategy and encourage us to take efforts and innovations to the next level.

Building on our successes over the past 16 years high wind is continuously reinventing itself to take on new growth opportunities.

Our focus on serving clients nurturing talent and unlocking value from technology will continue to be our guiding light as we venture into new business domain and expand our franchise.

We also continue to enrich our intellectual capital and attract top talent from leading international firms, including recently, Mr. Lawrence Block, who joined <unk> as our Chief Financial Officer and Mr. Locke was previously a senior investment banker.

Mr Law will lead our conversations with the capital markets and global investors as well as champion high winds various growth strategies through multiple avenues.

On that note I would like to pass things over to Mr. Locke to share details on our operating and financial results.

Thank you Madam Wang and thank you all for joining us today.

We begin our detailed financial discussion. Please note that unless otherwise stated all financial numbers presented are in renminbi terms, while comparisons are made year on year.

During the fourth quarter, we achieved strong growth our total net revenue in the fourth quarter was $502 million up 43%.

Net revenue for the full fiscal year, 2021, 183 billion up 42, 8%.

Looking at our revenue breakdown revenue from our wealth management segments was 180 billion for the full fiscal year up 49%.

This strong growth in our wealth management services was primarily due to continued strength in client demand for our privately raised products.

Revenue from our asset management segment for the full fiscal year was $23.0 million up 223, 4% this particularly rapid growth in our asset management business was driven by strong client interest in offshore products and discretionary mandates.

Revenue from our other services segments for the full fiscal year was $32.0 million up 311, 9%. Our other services segment is primarily comprised of technology consulting.

On the cost and expenses side, our total operating costs and expenses for the fourth quarter was $423 million up 39, 3%.

For the full fiscal year total operating cost and expenses were $56.0 billion up 37, 9%.

In terms of cost breakdowns.

Compensation and.

Compensation and benefits for the full fiscal year increased 41, 5% largely in line with our revenue growth. Meanwhile.

Our sales and marketing expenses for the full fiscal year increased 32, 8% and our general at general and administrative expenses increased <unk>.

17, 2% demonstrating that we continue to have success in optimizing our overhead expenses as a percentage of our revenue.

As Madam Wang said.

We will continue to invest in our platform and our people and in our technology, but at the same time, we will also be focused on our cost and expense discipline.

Our income from operations in the fourth quarter was $86.0 million up 67, 4% for the full fiscal year. Our income from operations was $287.0 million up 77, 1% our reported net income for the full fiscal year.

$214.0 million up 95, 6%.

Our earnings per ads for the full year was $8 and eight <unk> was $8 five renminbi per ads on a basic basis and $83.0 per ads on a diluted basis.

As you can see we are very pleased with our significant earnings growth.

Our balance sheet is also strong as of June 32021, we had $708.0 million in cash and cash equivalents and restricted cash on hand.

Our business model is capital light and we continue to maintain very healthy liquidity ratios.

Looking forward, we remain optimistic about our growth. This year, we are investing into several key areas, including.

Our product diversification, our technology R&D, our physical network of service centers are young talents.

Our technology and our research capabilities and so on.

As we focus on strategy expansion and productivity gains. We believe we shall continue to deliver attractive returns on our investments.

Thank you everyone. This concludes our prepared remarks for today and operator, we're now ready to take questions.

As a reminder to ask a question you will need to press star one on your telephone.

To withdraw your question just about.

When asking a question. Please state your question in Chinese first then immediately repeat your question in English for the convenience of everyone in the call.

Your first question comes from the line of Wayne Chihuahua of ICB International. Please ask your question.

Or the line of Wayne July Your line is open please ask your question.

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Yes. Thank you.

The way we approach our product offerings is really based on what we see in our clients' demands.

You heard just now we are increasingly approaching our client dialogues are client dialogues with.

Comprehensive asset allocation advisory not just selling a single product or a single pump.

So what we saw from our clients is that our clients increasingly want more diversity of products for.

For example, we see very rapid growth in our privately raised.

Securities products, and we believe that's an area of opportunity for us.

We also look to expand our private equity venture capital type product and our publicly raised mutual funds over time as well.

Also we see that our high net worth clients have increasing demand for overseas asset allocation.

So for example in Hong Kong, we offer tailored.

Portfolio solutions and trading solutions to our ultra high net worth clients, our EAM external asset manager business model as well as our asset management business in Hong Kong are both high growth areas for us. So overall, we believe what's key in this business is real.

That we continue to strengthen our client servicing capacity, so that our distribution strength.

In turn help us with our product sourcing and product selection capability.

Next question please.

Your next question comes from the line of Julian Chen of Trade Master Securities. Please ask your question.

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Quantitative sense.

My question is how.

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Our service centers are concentrated in the top tier cities and coastal areas of China, What's your footprint plans for the inland areas and et cetera.

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Thank you Julien So first of all we already have very extensive national coverage, we have physical service centers and over 90% of China's top 50 wealthiest cities. We also have a total we have a total of.

177 centers covering 80.87 cities.

So while we have established particularly well established I should say in the tier one cities.

We also follow the Chinese government's overall development development planning right. When we think about our strategy in the lower tier cities right. So.

Shanghai, obviously is our headquarter and in Beijing, and the Greater Bay area. We already have two regional hubs and we have very strong presence. We are continued we continue to selectively deepen our penetration in 18 strategic lower tiered cities like Chengdu Wuhan chunk.

And more so in some of these cities, there's actually a lot of wells that that should be tapped into REIT and we had seen very strong business growth of more than 40% per year in some of these cities.

Our next question please.

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Your next question comes from the line of Joseph Shadow squad by June <unk>. Please ask your question.

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Yes, so thank you for.

For the question. So we have risk management processes in place on both the product side as well as the client side and I'll explain more.

So first of all right for all of our new new products right. They would go through our rigorous.

<unk> collection system, right and then and then our risk management system.

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Our product selection system, we do due diligence on the asset managers.

And their track record of historical performance right the strategies there.

The risk control and so long.

And then for for real estate linked projects that you asked we do due diligence on the underlying assets as well.

Then we have then a two tiered.

Risk management system REIT first selected products will go through our investment selection Subcommittee and then and then our management Committee, which is comprised.

<unk> of our senior management.

We are very very selective in our product selection right. So for example in the privately right.

Securities product categories.

We focus on the top 100 asset managers from over 10000 managers in China.

Furthermore, we do <unk> and risk appetite screening on our clients as well.

To ensure that not just the knot.

Not just quality products are being selected through our product selection funnel right, but the REIT products are sold to the REIT clients in the right way.

And then during the lifecycle of the product.

Post investment the objective is to maximize transparency for our clients.

So we proactively help our clients review their portfolios attract any updates on their investments.

Like any potential risks, if we detect and concerns.

In particular for real estate linked products, we would monitor the financials of the underlying projects and help our clients access right.

Asset managers or or do regular site visits or.

Or access the management if needed.

We believe that this transparency enhancement measures can actually help our clients better understand the performance of their investments and the risk control measures that are built into the products.

Thank you for the question next question please.

Your next question comes from the line.

And Ken of Schroders. Please ask your question.

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Yes. Thank you for the question so in the offshore space our growth strategy is really a what we call a multi tiered multi multi segment strategy.

So first for our most demanding ultra high net worth clients, we leverage our EAM external asset manager a platform in Hong Kong REIT to provide highly tailored portfolio management solutions.

So for example, we are providing custody and monetization solutions for entrepreneurs, who recently had liquidity events like Ipos and company sales.

And then for our core high net worth clients, we are offering and an offering and expanding our range of payment funds that invest in select sectors and thematic strategies.

And then for the even larger segments of affluent clients. We are exploring the potential use of a robo advisory technology platform to potentially tap into this.

This high growth client base.

And then in addition.

We are also very active in the offshore private markets.

Hoping clients pursue opportunities opportunistic transactions like secondary secondary blocks direct investments private credit and so on.

And then last but not least we also provide insights content advisory services to our clients. So for example research from our in House research team or wealth planning advisory. That's that is delivered by our high win well fiduciary services, Hong Kong limited and these.

The services that we provide to our offshore clients.

Next question please.

Your last question comes from the line of Derek Lam of Al <unk>. Please ask your question.

Hi, you've got Derek Lam from all types of capital on the line.

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Why not use AUM.

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Great.

I'm going to repeat that in English I noted that there was a drop in the number of relationship managers Hollywood.

It's the reason around this drop and.

How is the current coverage ratio June since then.

Is there any plans for expansion of the sales force.

Yes.

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Yeah. So thank you Derrick so one of our priorities as you heard just now is optimizing our <unk>.

Our organizational structure and efficiency.

As well as raising the professional standards of our relationship managers. So for example, when we evaluate our relationship managers internally, we take into consideration both sales targets as well as overall client satisfaction.

And then we also believe strongly in enabling and empowering our relationship managers to help them succeed with their clients.

So we continue to be enhancing our training program and we are offering the tools the technology the research and all of the resources that's on our platform to help our relationship managers succeed.

So overall, the attrition rates of our elite tiers.

Relationship managers was actually fairly low at less than 6% right. So our number number of RMS was 1584.

Which although is a slight decrease year on year, but the transaction value per RM actually increased by 16% to $54.0 million renminbi REIT. So we believe that the productivity and the profitability per RM actually improved in this fiscal year.

And then going forward, we will continue to grow, especially our elite relationship managers, particularly in certain strategic cities.

Thank you.

As there are no further question at this time I'd like to hand, the conference back to management for closing remarks.

Okay. So thank you everybody for joining our call.

Do you have any further questions. Please feel free.

To reach out to us through our IRR.

IR website.

We look forward to speaking with everyone in our next earnings call have a great day.

Thank you.

Yes.

This concludes today's conference call you may now disconnect your lines. Thank you.

Okay.

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Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to high Wind Holdings limited fourth quarter and full year 2021 earnings conference call. At this time all participants are in a listen only mode. We will be hosting a question and answer session. After management's prepared remarks, I will now turn.

The call over to your first speaker today, Ms. Lucy <unk> senior director of Investor Relations and high Wind Holdings. Please go ahead Madame.

Thank you all for joining today's call for highways are audited financial results for the fourth quarter and full fiscal year, 2020 one before I start I refer you to the Safe Harbor statement in the company's earnings release, which also applies to this conference call today as are our management will make forward looking statements.

The call with me today, our director after you Madame Wang Dan.

And our CFO, Mr. Lawrence block minimum one will review the company's overall performance what fiscal year 2020. One then Mr. Lawrence Bob will discuss our financial results.

Fourth quarter, and full fiscal year, 2020 one in detail.

Mr Law will translate for Mr. Wang you may refer to our financial results on the company's IR website.

Now I'll turn the call over to met alone.

But yeah, thanks equally towards it and for things you should have all that kind of how you think or are your opinion pieces to <unk> type of win Hello, everyone. Thank you for taking the time to join US today on our earnings call for the fourth quarter and full year fiscal 2020.

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And this past year China's recovery from the COVID-19, pandemic continued fueling a strong economic rebound.

According to forecasts by the China insights consultancy. The total investable assets of China's households are on track to exceed 240 trillion renminbi by the end of 2021.

Elevate uncertainties in the macro outlook and market trends have driven find out what the client demand for professional wealth management services and global asset allocation advisory.

Meanwhile, clients are extending their focus beyond just risks and returns in their investment process.

Funds become more sophisticated and pursue diverse goes over longer horizons. The bar has been raised for wealth managers like high winds.

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So we like the tissue project management team.

'twenty one is the 16th year in high winds corporate journey and also our first year as a public company listed on NASDAQ, We achieved excellent operating results and financial performance in fiscal 2021, as our net revenues increased by 40.

Two 8% from the prior fiscal year to $84.0 billion renminbi.

Discipline and cost control also yielded solid results operating costs increased by 37, 9% from the prior fiscal year to 155 billion renminbi growing at a slower pace than our net revenues growth.

On the back of our strong revenue growth and effective cost control. Our net income in fiscal 2021 increased by 95, 6% from the prior fiscal year to 208 million renminbi.

Our strong net revenues and net income once again reflected the competitive strength of our client proposition our product proposition and our talent proposition.

Our excellent financial performance. This year is also a ringing endorsement of our eight dimensional business strategy, which aims to deepen client relationships diversified product offerings optimized distribution footprint unlocked value from technology upgrades research and advisory.

And Hans brand value and scaled up our offshore franchise.

Our fiscal 2021 results have further reinforced our strategy confection and accelerated our pursuit of long term sustainable growth.

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In terms of our client franchise, our total number of clients increased by 12, 5% from the prior fiscal year, reaching 127000 as of June 30.

A number of active clients in fiscal 2021 increased four 5% from the prior fiscal year, reaching 38000.

We believe client trust is the ultimate engine of steady business growth in fiscal 2021, the repeat investment rate of our clients. What 76, 7%. This is a key metric for measuring client stickiness and we have shown and continued our our industry leader.

In this regard over recent years.

This consistently strong client activity level and revenue production were made possible by our rigorous mapping applied needs differentiated offerings high quality client conversations and continuous client servicing.

Meanwhile, Investor Education is also an important channel for maintaining and enhancing our clients trust during fiscal 'twenty. One we held 1519 investments seminars across China attended by nearly 4000.40000 clients.

In addition, we used technology to maintain high frequency digital engagement with our clients.

For example, utilizing webinars, our own app and other various digital channels.

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Yeah.

We also.

So continue to enhance our product structure from wealth management to asset management from renminbi assets to global asset allocation and from product solutions to holistic advisory we are continuously expanding our business scope to create value for our clients.

In fiscal 'twenty, one transaction value for our wealth management segment increased by 15% from the prior fiscal year to $86.0 billion renminbi, mainly driven by growth now privately rate products subcategory, which increased 38, 4% from the prior fiscal year to reach <unk>.

73 billion renminbi.

In particular, the transaction value of privately rate securities products increased 46 times year on year to $8.0 billion renminbi going forward. We believe privately rate securities products will become one of the key drivers for our product mix diversification.

Our future growth will be supported by our expanding spectrum of product offerings, but will also be safeguarded by our robust product on boarding and risk management processes as well as our asset allocation expertise.

On the asset management side in fiscal 'twenty, one our asset management business scaled up rapidly with AUM, increasing by 69, 9% from the prior fiscal year to two.

Two zero billion renminbi.

Leveraging high wind asset management, Hong Kong limited as our asset management hub in the offshore space, we provided highly tailored portfolio management solutions to ultra high net worth clients and institutional clients in Asia using the <unk>.

External asset management business model.

Meanwhile, we launched a series of high wind branded payment funds to offer a number of strategies to find out with clients, including global private equity.

Fixed income greater China equity and more.

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During fiscal 'twenty, one our distribution network continued to expand with our footprint increasing from 84 cities to 87 cities, while our number of service centers increased from 167 to 177 as a result, our clients.

Servicing capacity and competitive moats in the local market continued to grow our footprint strategy has been highly effective.

With our headquarters in Shanghai and to regional hubs in the Bohai economic risks and the Greater Bay area, we have penetrated into 18 strategic cities in China, and we're covering most of China's wealthiest cities.

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In fiscal 'twenty, one we continued to invest in our people as of June 30, our number of relationship managers was 1584, a slight decrease from the prior fiscal year. However, the transaction value of bulk management products per <unk> increased by <unk> <unk>.

16, 1% to $56.0 million renminbi.

The attrition rates within the elite segments of our relationship managers was less than 6%, which show our staff loyalty and stability.

During fiscal 'twenty. One we also continued to strengthen our training programs and implemented differentiated incentive schemes across various tiers of relationship managers. Meanwhile, our continuous upgrade and our research and technology platforms also further empowered our frontline.

Since that thereby during the transformation of our relationship managers from a product based proposition to holistic trusted advisory when they engage with our clients.

This year, we also work with Willis towers Watson to implement a more nimble organizational structure to enhance our platform synergies and efficiency through increased internal connectivity and collaborations we aim for optimal resource allocation and plus.

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Our digital transformation accelerated in fiscal 2021, we implemented our 321 technology infrastructure and.

And three to 143 digital portals for our clients our relationship managers and our products.

Two middle office engines, meaning our commercial middle office, and our data as a middle office and one technology infrastructure platform, which underlies all of our major functions.

Since the launch of our three Q1 technology infrastructure, we observed significant improvements in several key internal metrics such as <unk>.

Monthly active users Mou.

Electronic contract signing rates are.

Our digital mapping of clients and more.

During this quarter, we also launched our ex link big data engine the.

The engine uses big data to help our relationship managers on multiple fronts, including data outlet analytics of clients online behaviors.

Sales protection, our client servicing lifecycle management early warnings on client attrition and more these tools enable relationship managers to fully maximize client profitability and our share of the client's wallets.

So that will then put on the T volatile quarter.

Quarter heightened Daniel.

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During this fiscal year. We also continued to invest in our research capabilities, we recruited seasoned analysts from leading investment banks to lead our research efforts on macroeconomics asset classes and portfolio strategies. These intellectual insights are incorporated into our sales and adverse.

As a REIT processes through Robo advisors, and other sales and marketing in the phases.

We also entered into a strategic collaboration with the Shanghai Advanced Institute of Finance, which is a part of the prominent Shanghai telephone University. This partnership will convert latest academic insights into value creation for our clients.

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Our efforts and achievements were highly regarded in the industry in fiscal 2021, and our senior management, while more than 80 major awards from numerous.

Industry bodies and publications. These awards are a tribute to our successful growth strategy and encourage us to take efforts and innovations to the next level.

Building on our successes over the past 16 years I will is continuously reinventing itself to take on new growth opportunities our focus on serving clients nurturing talent and unlocking value from technology will continue to be our guiding light as we venture into new.

Business domains and expand our franchise.

We also continue to enrich our intellectual capital and attract top talent from leading international firms, including recently, Mr. Lawrence Block, who joined <unk> as our Chief Financial Officer and Mr. Locke was previously a senior investment banker, Mr. Lok will lead.

Our conversations with the capital markets and global investors as well as champion high winds various growth strategies through multiple avenues.

On that note I would like to pass things over to Mr. Locke to share details on our operating and financial results.

Thank you Madam Wang and thank you all for joining US today before we begin our detailed financial discussion. Please note that unless otherwise stated all financial numbers presented are in renminbi terms, while comparisons are made year on year.

During the fourth quarter, we achieved strong growth our total net revenue in the fourth quarter was $502 million up 43% total net revenue for the full fiscal year 'twenty, one was $84.0 billion up 42, 8%.

At our revenue breakdown revenue from our wealth management segments was 180 billion for the full fiscal year up 49%. This strong growth in our wealth management services was primarily due to continued strength in client demand for our <unk>.

Rival the right products.

Revenue from our asset management segments.

For the full fiscal year was $23.0 million up 223, 4% this particularly rapid growth in our asset management business was driven by strong client interest in offshore products and discretionary mandates.

Revenue from our other services segments for the full fiscal year was $32.0 million up 311, 9%. Our other services segment is primarily comprised of technology consulting.

On the cost and expense side, our total operating costs and expenses for the fourth quarter was $423 million up 39, 3%.

For the full fiscal year total operating cost and expenses were $6.0 billion up 37, 9%.

In terms of cost breakdowns.

Compensation and.

Compensation and benefits for the full fiscal year increased 41, 5% largely in line with our revenue growth. Meanwhile.

Our sales and marketing expenses for the full fiscal year increased 32, 8% and our general at general and administrative expenses increased <unk>.

17, 2% demonstrating that we continue to have success in optimizing our overhead expenses as a percentage of our revenue.

As a matter of months that we will continue to invest in our platform and our people and in our technology, but at the same time, we will also be focused on our cost and expense discipline.

Our income from operations in the fourth quarter was $86.0 million up 67, 4%.

For the full fiscal year, our income from operations was $287.0 million up 77, 1% our reported net income for the full fiscal year was $214.0 million up 95, 6% our earnings per ads for the full year was eight.

<unk> dollar and eight <unk> was $8 five renminbi per ABS on a basic basis and $83.0 per ads on a diluted basis.

As you can see we are very pleased with our significant earnings growth.

Our balance sheet is also strong as of June 32021, we had $708.0 million in cash and cash equivalents and restricted cash on hand.

Our business model is capital light and we continue to maintain very healthy liquidity ratios.

Looking forward, we remain optimistic about our growth. This year, we are investing into several key areas, including our product diversification our technology R&D, our physical network of service centers are young talents.

Our technology and our research capabilities and so on.

As we focus on strategy expansion and productivity gains. We believe we shall continue to deliver attractive returns on our investments.

Thank you everyone. This concludes our prepared remarks for today and operator, we're now ready to take questions.

As a reminder to ask a question you will need to press star one on your telephone.

To withdraw your question just about.

When asking a question. Please state your question in Chinese first then immediately repeat your question in English for the convenience of everyone in the call.

Your first question comes from the line of Wayne Shuai of ICB International. Please ask your question.

For the line of Wayne July Your line is open please ask your question.

Okay.

Uh huh.

Oh go.

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Hi, and have planned to launch new product categories in Europe near future.

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Some GAAP G&A by that total culturally on 10 clinical team you may achieve on me and that <unk> can be a pack in Namibia.

Yes. Thank you so the way we approach our product offerings is really based on what we see in our client demand.

As you heard just now we are.

Recently approaching our client dialogues are client dialogues.

Comprehensive asset allocation advisory not just selling a single product or a single fund. So what we saw from our clients is that our clients increasingly want more diversity of products.

For example, we see very rapid growth in our privately raised.

Securities products, and we believe that's an area of opportunity for us.

We also look to expand our private equity venture capital type product and our publicly rated mutual funds over time as well.

Also we see that our high net worth clients have increasing demand for overseas asset allocation.

So for example in Hong Kong, we offer tailored.

Portfolio of solutions and trading solutions to our ultra high net worth clients, our EAM external asset.

Asset manager business model as well as our asset management business in Hong Kong are both high growth areas for us. So overall, we believe what's key in this business is really that we continue to strengthen our client servicing capacity, so that our distribution strength within <unk>.

<unk> help us with our product sourcing and product selection capabilities.

Next question please.

Your next question comes from the line of Julian Chen of Trade Master Securities. Please ask your question.

Hello.

Okay. So it's a little hard Washington, Juul, which antenna in Shanghai with housing starts engender goodwill houma that juul, but hopefully well good question.

You do that.

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The position of asset management Department director and trademark to securities and still managing AI.

AI quantitative sense.

My question is.

Hi, <unk>.

Wireless service centers are concentrated in the top tier cities and coastal areas of China, What's your footprint claims for the inland areas and a third tier cities. Thank you.

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And do you try to gauge how much of that I think that year with SMC traveller patents. This year. So you know when I should say.

Alright, Thank you income should Indiana.

Is that changing the Tijuana.

Thank you Julien So first of all we already have very extensive national coverage, we have physical while service centers and over 90% of China's top 50 wealthiest cities. We also have a total we have a total of.

177 centers covering 80.87 cities.

So while we have established particularly well established I should say in the tier one cities.

We also follow the Chinese government's overall development development planning right. When we think about our strategy in the lower tier cities right. So.

Shanghai, obviously is our headquarter right and in Beijing in the Greater Bay area. We already have two regional hubs and we have very strong presence. We are continue we continue to selectively deepen our penetration in 18 strategic lower tier cities like Chengdu Wuhan chunk.

And more so in some of these cities, there's actually a lot of wells that that should be tapped into REIT and we have seen very strong business growth of more than 40% per year in some of these cities.

Our next question please.

Okay.

Your next question comes from the line of Joseph Shadow squad by June and wealth. Please ask your question.

Hi.

Ken.

Sangamo, what Archie announce HIFU quantity.

Yes.

Although one sees a high level as we thought I shouldnt draw there Tom.

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In English.

Joseph Chan of what origin.

Management EMEA.

Departments.

The hiring company has robust onboarding stand up a new product.

My question is do you have ongoing risk management for products that have already been both with clients and.

Particular for products that are too.

Hey, Seth.

How do you manage risk throughout the lifecycle of such products.

Hi.

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Yes, so thank you for the for.

For the question. So we have risk management processes in place on both the product side as well as declines side and I'll explain more.

So first of all right for all of our new new products right. They would go through our rigorous.

<unk> collection system, right and then and then our risk management system.

Four.

Our product selection system, we do due diligence on the asset managers.

And their track record of historical performance right their strategies.

The risk control and so long.

And then for real estate linked projects that you asked we do due diligence on the underlying assets as well.

Then we have then a two tiered.

Risk management system REIT first selected products will go through our investment selection Subcommittee and then and then our management Committee, which is comprised.

<unk> of our senior management.

We are very very selective in our product selection right. So for example in the privately right.

Securities product categories.

We focus on the top 100 asset managers from over 10000 managers in China.

Furthermore, we do <unk> and risk appetite screening on our clients as well.

To ensure that not just the knot.

Not just quality products are being selected through our product selection funnel right, but the REIT products are sold to the REIT clients in the right way.

And then during the lifecycle of the product.

Post investment the objective.

Is to maximize transparency for our clients.

So we proactively help our clients review their portfolios attract any updates on the investments of flag any potential risks, if we detect and concerns.

In particular for real estate linked product, we would monitor the financials of the underlying projects and.

And help our clients access right the asset managers.

Or do regular site visits or.

Access the management if needed we believe that this transparency enhancement measures can actually help our clients better understand the performance of their investments and the risk control measures that are built into the products.

Thank you for the question and next question. Please.

Your next question comes from the line.

And Ken of Schroders. Please ask your question.

Hi, Cory Hall washer licenses.

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So what does that highway business is expanding rapidly.

But a little bit more about your expansion plans for your international business. Thank you.

Yeah.

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Q4.

Yeah. Thank you for the question so in the offshore space our growth strategy is really a what we call a multi tiered multi multi segment strategy.

So first for our most demanding ultra high net worth clients, we leverage our external asset manager platform in Hong Kong REIT to provide highly tailored portfolio management solutions. So for example, we are providing custody and monetization. So we.

<unk> for entrepreneurs, who recently had liquidity events like Ipos and company sales.

And then for our core high net worth clients, we are offering and offering and expanding our range of payment funds that invest in select sectors and thematic strategies.

And then for the even larger segments of affluent clients. We are exploring the potential use of a robo advisory technology platform to potentially tap into this.

High growth client base.

And then in addition.

We are also very active in the offshore private markets.

<unk> clients pursue opportunities opportunistic transactions like secondary secondary blocks direct investments private credit and so on.

And then last but not least we also provide insights content advisory services to our clients. So for example research from our in House research team or wealth planning advisory. That's that is delivered by our high win well fiduciary services, Hong Kong limited and these.

Are the services that we provide to our offshore clients.

Next question please.

Your last question comes from the line of Derek Lam of all can you. Please ask your question.

Hi, you've got Derek Lam from all types of capital on the line.

With him join my wife, Chacha grow what's really at all and they go to.

The Covid junior and truly goes we'll check out.

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The amount of trip.

Why don't you tell him.

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It's the reason around this drop.

How is the current coverage ratio do and since then it's Andy.

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Yeah. So thank you Derrick so one of our priorities as you heard just now is optimizing our <unk>.

Our organization structure and efficiency.

As well as raising the professional standards of our relationship managers.

For example, when we evaluate our relationship managers internally, we take into consideration both sales targets as well as overall client.

Dysfunction.

And then we also believe strongly in enabling and empowering our relationship managers to help them succeed with their clients.

So we continue to be enhancing our training program and we are offering the tools the technology the research and all of the resources that's on our platform to help our relationship managers succeed.

So overall the attrition rate of our elite.

Relationship managers was actually fairly low at less than 6% right. So our number number of RMS was 1584.

Although as a slight decrease year on year, but the transaction value per RM actually increased by 16% to $54.0 million renminbi REIT. So we believe that the productivity and the profitability per RM actually improved in this fiscal year.

And then going forward, we will continue to grow, especially our elite relationship managers, particularly in certain strategic cities.

Thank you.

As there are no further question at this time I'd like to hand, the conference back to management for closing remarks.

Okay. So thank you everybody for joining our call.

You have any further questions. Please feel free.

To reach out to us through our IR website.

We look forward to speaking with everyone in our next earnings call have a great day. Thank.

Thank you.

This concludes today's conference call you may now disconnect your lines. Thank you.