BitVentures Ltd. Q4 FY2022 earnings call

• Navigated macroeconomic challenges in 2022, leveraging insights to guide clients on asset allocation. - Wealth management saw growth in private securities bond and private equity VC products. - Asset management business had strong AUM growth, with EAM and payment funds businesses performing well. - Expanded talent base and footprint, with relationship managers and wealth-servicing centers increasing. - Made progress in operations platform build-out with AI-powered asset allocation engine and corporate governance upgrades. - Acquired controlling stakes in Grand Doctor Medical and iLife3 to enter health management, aiming to create a one-stop high-end health management platform.

In fiscal year 2022, net revenues increased 5.9% year-on-year to RMB1.94 billion, while net income grew 13.6% to RMB236 million. Operating income increased 16% to RMB327 million with an operating income margin of 16.8%. For the wealth management business, client transaction value was RMB79.8 billion, up 1.3% y-o-y. Asset-backed products had transaction value of RMB70.7 billion, with long tenure down 302% to RMB32 billion and short tenure up 57.5% to RMB38.6 billion. Private securities bond products saw transaction value jump 98% to RMB3.37 billion, and private equity VC products rose 111.8% to RMB1.49 billion. The asset management business had AUM increase 120.5% to RMB4.48 billion, with EAM business growing strongly and payment funds business also showing growth. Total client number reached 141,000, up 108% y-o-y, active clients at ~44,000 up 15.1%, repeat investment rate 80.8%. Relationship managers headcount 1,696, up 7.1% y-o-y, with 178 wealth-servicing centers across 88 cities.

• Seek to scale up operations, focusing on serving full lifecycle wealth and health management needs of high net worth clients. - Aim to drive organic growth to create greater value for shareholders.

• Macro economic uncertainties, rising interest rates, geopolitical conflicts posing challenges to asset allocation and wealth preservation. - Market volatility and weak consumer demand in China presenting challenges.

Q: For the two healthcare acquisitions, Grand Doctor and iLife3, can you give more commentary on how this will enhance growth rate and add to earnings?

A: Madam Wang noted the health management industry in China has massive growth opportunities, especially in high-end. The acquisitions of Life Infinity and Grand Doctor, leading high-end health management providers, bring high-quality resources, established products, platforms, and client bases. Integrating them will create a one-stop high-end health management platform with offerings like in-depth screening, disease prevention, etc., with cross-selling opportunities.

Q: In the context of high inflation combined with low interest rates, how have clients' asset allocation preferences shifted?

A: Clients are interested in asset-backed products for stable returns with low risk. Preference has shifted towards shorter duration asset-backed products. Also, clients are hedging currency risk and showing interest in offshore products, with Hywin Hong Kong offering a range of products to serve this need.

Q: How does the company identify competitive fund managers and screen quality products in a volatile environment?

A: 70% of private fund products distributed since the beginning of the year achieved positive returns. Selecting the right strategy for the market is key, with various strategies offered like secondaries, enhanced index, structured, long short, hedged, CTA. Also, seeking out dark horse asset managers who can deliver outperformance.