Thank you for standing by for Jupai’s First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note today’s conference call is being recorded. If you have any objections, you may disconnect at this time. I’d now like to turn the meeting over to your host for today’s conference, Mr. Eddie Guo, Jupai’s IR representative.

Hello, everyone and welcome to Jupai’s earnings conference call for the first quarter ended March 31, 2021. Leading the call today is Mr. Jianda Ni, our Chairman and CEO who will review the highlights for the first quarter of 2021. I will then discuss our financial results. We will then open the call to questions, at which time, our CFO, Ms. Min Liu, will also be available. Before we continue, I refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make forward-looking statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB. I will now turn the call over to Mr. Jianda Ni, our Chaiman and CEO and I will interpret his remarks for you.

Thank you, Eddie and welcome everyone to today’s conference call. In the first quarter, we saw further recovery in China’s overall economy post-pandemic, benefiting from the highly effective COVID-19 control measures. Jupai seeks opportunities and continued to improve client experience and develop our product portfolio in line with our Asset Transparency System strategy, which supported our efforts to improve business performance and profitability. Our continuous efforts have been recognized by the clients, which has restored investor confidence. The company’s total number of active clients also resumed growth, with a 9% increase year-on-year and a 33% increase compared to the fourth quarter of 2020 from 457 to 608. Jupai’s aggregate value of wealth management products distributed increased to RMB1.87 billion from RMB1.16 billion in the fourth quarter of 2020. Our gross profit rates achieved above 50% for three consecutive quarters. Net profit attributable to ordinary shareholders achieved a nearly 100% increase compared to the first quarter last year. In 2021, Jupai continues to upgrade our product selection in 2020 and enrich our product line in the secondary market. The aggregate value of secondary market wealth management products in the first quarter was RMB505 million, accounting for 27% of the total amount raised this quarter with a year-on-year growth of nearly 1.5x. Although there are still uncertainties about the economic recovery on a global scale, the investment sentiment of high net worth people gradually recovered in the first quarter. We remain confident in the long-term prosperity of China’s wealth management industry. Jupai will continue to implement our key strategies, including improving client experience, continuing to develop our product systems and continuing to focus on the secondary market as well as implement the ongoing cost control measures to support margin improvement and offer a range of more diverse, high-quality products and services for high net worth clients. I will now turn the call over to Eddie to go through the financial results for the first quarter of 2021. Thank you.

Thank you, Ni-Zong. We are encouraged to see our net profit attributable to ordinary shareholders achieved a nearly 100% increase compared to the last quarter and profitability for two consecutive quarters. For 2021, we will continue to improve our productivity while optimizing overall client experience. Now, I will walk you through our financial highlights for the first quarter of 2021. Net revenues for the first quarter of 2021 were RMB33.7 million, a 13.4% decrease from the corresponding period in 2020 primarily due to decreases in one-time commissions and recurring service fees. Operating costs and expenses for the first quarter of 2021 were RMB80.2 million, a decrease of 26.2% from the corresponding period in 2020. Operating margin for the first quarter of 2021 was 4.1%. That’s compared to minus 12.6% for the corresponding period in 2020. Net income attributable to ordinary shareholders for the first quarter of 2021 was RMB3.9 million as compared to net loss attributable to ordinary shareholders of RMB19.9 million from the corresponding period in 2020. Net margin attributable to ordinary shareholders for the first quarter of 2021 was 4.7% as compared to minus 20.6% from the corresponding period in 2020. Net income attributable to ordinary shareholders per basic and diluted American depositary share for the first quarter of 2021 was RMB0.12 and RMB0.12 respectively as compared to net loss attributable to ordinary shareholders per basic and diluted ADS of RMB0.59 and RMB0.59 respectively from the corresponding period in 2020. That concludes our prepared remarks. I will now turn the call back to the operator to begin the Q&A session. Operator?

Thank you. [Operator Instructions] Our first question comes from Yuhua Li from UBS. Please ask your question.

Thank you for giving me this opportunity to ask questions. My question is, we can see in the first quarter, Jupai’s aggregate value of wealth management products distributed increase and continue to be profitable. Well, can management share with us what factors attribute to this performance? And what are the future further plans for the rest of 2021? Thanks.

Thank you for your question. In the first quarter, we saw further recovery in China’s overall economy post-pandemic, benefiting from the highly effective COVID-19 control measures. China’s GDP for the first quarter of 2021 increased by 18.3% over the same period last year, ranking among the top of the major economies. While on a global scale, there are still uncertainties about the economic recovery due to the pandemic situation, the investment segment of high net worth people broadly recovered in the first quarter. The company’s total number of active clients also resumed growth with a 9% increase year-on-year and a 33% increase compared to the first quarter of 2020 from 457 to 608. Meanwhile, the average wealth management product value distributed per adviser has significantly increased to RMB9 million in the first quarter from approximately RMB5 million in the last quarter with continuous optimization and reduction of the number of wealth management providers, Jupai’s aggregate value of wealth management products, which need still increased to RMB1.87 billion from RMB1.16 billion in the fourth quarter of 2020. In line with industry trends and changes in the market environment, Jupai seized opportunities to improve business performance and profitability. In the first quarter, our gross profit rate was 55.3%, which achieved above 50% for three consecutive quarters. Net profit attributable to ordinary shareholders was RMB3.91 million, a nearly 100% decrease compared to the fourth quarter last year and achieved profit for two consecutive quarters. Our continued efforts have been recognized by the clients. This year, Jupai proposed a new goal of improving client experience by reviewing products and services from the perspective of client demand. We required the financial advisory team who have direct contact with clients to change from the study of single products to in-depth learning to have a deeper understanding of the underlying logic of the project and to become industry efforts in analyzing domestic and borrowing trends. At the same time, the company also launched both investment service customization and high-frequency communication of existing products as well as lateral return with visit services, private meeting and face-to-face senior management activity. At the end of 2020, we invited clients to participate to our newly launched VIP exclusive event, which were popular and highly recognized by clients. In April, we continue to invite VVIP clients to participate in our spring meeting held in Hangzhou to help Jupai further improve its communication and relationship with clients. As one of the first wealth management companies to launch the asset transparency system strategy, Jupai firmly implemented a series of transparency measures, inviting qualified investors to conduct inspection activities, enhance their understanding of investment projects, participate in the project selection process and improve the transparency of asset management. Jupai’s Risk Control Committee has invited more than 100 high net worth clients and financial advisers to participate and share valuable and constructive suggestions. High net worth can also learn about the latest investment and post investment management trends of products through the Jupai Wealth app. These measures have promoted the company to further implant the asset transparency system strategy. In terms of the secondary market, the aggregate value of secondary market wealth management products in the first quarter was RMB505 million accounting for 27% of the total amount raised this quarter with a year-on-year growth of nearly 1.5x. In 2021, we expect stock and the commodity market to be highly volatile. On the one hand, it is difficult to reproduce the high rate of return brought by the excess liquidity and economic recovery in 2020. On the other hand, structured market and the gradual recovery economics it’s still attractive. In such a market environment, it is important to have both offensive and defensive strategies. Therefore, leveraging our advantages in sorting products and experience in the wealth management industry keep continue to upgrade our product selection in 2020 and added some relatively stable products with low correlation with the previous year’s strategy. While enriching our product line in the secondary market, Jupai has better met deferred demand of investors for asset allocation, further promoted the company’s overall secondary market products and enhanced our ability to respond. The secondary market is the asset that investors can always access with less focus on short-term interest. The industry efforts will be able to bring better return to investors. We are also glad to see that our investors are becoming more mature. During this quarter, the private equity investment market gradually recovered and IPO channels have opened up, benefiting from the COVID-19 control measures and resumption of production and business. Several of Jupai’s invested enterprise, have successfully lifted so far this year. For medical companies with Jupai’s equity investment have listed on the stock market and Hong Kong exchanges as the flagship spun issued by Jupai in 2020, [indiscernible] also delivered excellent results this year. Two issuers from the technology and the environmental production industry listed on the stock market and the China Asia market, where underlying assets in Jupai’s private equity funds Jupai’s equity team continued to focus on investing in market funds with multiple underlying targets rather than investing in a single company, medical, funds and technology and consumption are still attractive industries for the industry. In the first quarter, we raised RMB200 million in a single day from a medical equity product that we corroborated with a leading JP with RMB5 million minimum buy-in and a 10-year fund life cycle, which reflects the quality of our high net worth clients as well as their recognition of Jupai. In addition, Jupai’s implementation of cost control measures continued to deliver strong results in this quarter. We adopted the incentive measures for wealth management advisers and budget management system, which improved our results as cost of revenue continued to decrease. Meanwhile, we continue to build our financial technology platform, strengthen our recruitment and career development system and improve the company’s operating efficiency. Looking at the rest of 2021, beyond the secondary market, the real estate market has gradually returned to steady and healthy development this year after the targeted revenue measures taken by the financial regulatory authorities in the past year. Jupai’s asset management team has a profound understanding of the real estate markets’ operations and development. The company’s capital division will continue to focus on five assets

industry, city, project, model and developer to help clients continue to participate in development of the real estate industry. Secondly, Jupai will continue to develop the company’s product system, including deepening our portfolio of real estate projects and broadening our equity overseas market and the secondary market in order to bring the best products and services to clients. Jupai’s aim to provide high-quality asset education products and services for high net worth investors. We remain optimistic in the long-term prospects of China’s wealth management industry and our management has continuously increased their shareholdings in the company since 2019. Looking forward to the next few quarters of 2021, Jupai will continue to implement three key strategies. We will work on improving client experience, continue to develop our product systems and continue to focus on the secondary market. Jupai is continuously promoting the company’s profitability working to become one of the top wealth management and asset management brands for high net worth individuals in China. Thank you, Yuhua.

Thank you. [Operator Instructions] As there are no further questions, I will now turn the call over to Jupai’s IR Representative, Eddie Guo, for closing remarks.

Okay. This concludes today’s call. If you have any follow-up questions, please get in contact with us. Thank you.

Thank you for participation in today’s conference. You may now disconnect. Good day.