UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For fiscal year ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event re ...

Puyi Inc. (NASDAQ:PUYI) Q2 2023 Earnings Conference Call March 20, 2023 9:00 PM ET Corporate Participants Jing He - General Manager of Financial Reporting Department Yong Ren - Chairman and Chief Executive Officer Anlin Hu - Chief Financial Officer Conference Call Participants Operator Ladies and gentlemen, welcome to Puyi Inc.'s Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a Q&A session. For your ...

[Condensed Consolidated Statements of Financial Position](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Position) The Group's financial position showed a decrease in total assets and total liabilities from June 30, 2022, to December 31, 2022 [Financial Position Overview](index=2&type=section&id=Financial%20Position%20Overview) The Group's financial position showed a decrease in total assets and total liabilities from June 30, 2022, to December 31, 2022, with current assets significantly declining due to reduced cash and restricted cash, partially offset by increased short-term loans receivable, and total equity also decreased | Metric | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:-----------------------|--------------------:|------------------------:|-------------:|-----------:| | Cash and cash equivalents | 194,259 | 75,233 | (119,026) | -61.27% | | Restricted cash | 118,796 | 16,434 | (102,362) | -86.17% | | Accounts receivable, net | 59,507 | 53,845 | (5,662) | -9.51% | | Short-term loans receivable | - | 103,557 | 103,557 | N/A | | Total current assets | 394,755 | 265,756 | (128,999) | -32.68% | | Total assets | 463,936 | 324,302 | (139,634) | -30.10% | | Total current liabilities | 167,126 | 64,267 | (102,859) | -61.55% | | Total liabilities | 203,885 | 95,354 | (108,531) | -53.23% | | Total equity | 260,051 | 228,948 | (31,103) | -11.96% | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the six months ended December 31, 2022, the Group experienced a significant decrease in total net revenues, primarily driven by a decline in wealth management services [Operational Performance and Loss](index=4&type=section&id=Operational%20Performance%20and%20Loss) For the six months ended December 31, 2022, the Group experienced a significant decrease in total net revenues, primarily driven by a decline in wealth management services, and despite reduced operating costs, the Group reported an operating loss and net loss, though the net loss decreased compared to the prior year | Metric | 6 Months Ended Dec 31, 2021 (RMB in thousands) | 6 Months Ended Dec 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:---------------------------|----------------------------------:|----------------------------------:|-------------:|-----------:| | Wealth management revenues | 94,232 | 53,546 | (40,686) | -43.18% | | Insurance consulting revenues | 3,290 | 6,999 | 3,709 | 112.74% | | Others revenues | 260 | 6,723 | 6,463 | 2485.77% | | Total net revenues | 101,486 | 68,429 | (33,057) | -32.57% | | Total operating costs and expenses | (149,913) | (106,688) | 43,225 | -28.83% | | Loss from operations | (48,427) | (38,259) | 10,168 | -20.99% | | Net loss | (39,244) | (31,454) | 7,790 | -19.85% | | Basic and diluted net loss per share (RMB) | (0.434) | (0.348) | 0.086 | -19.81% | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) The Group's total equity decreased from RMB 260,051 thousand as of July 1, 2022, to RMB 228,948 thousand as of December 31, 2022, primarily due to the net loss incurred during the period, partially offset by positive foreign currency translation adjustments [Shareholders' Equity Changes](index=6&type=section&id=Shareholders'%20Equity%20Changes) The Group's total equity decreased from RMB 260,051 thousand as of July 1, 2022, to RMB 228,948 thousand as of December 31, 2022, primarily due to the net loss incurred during the period, partially offset by positive foreign currency translation adjustments | Metric | July 1, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | |:----------------------------------------|-------------------:|------------------------:|-------------:| | Share Capital | 600 | 600 | 0 | | Additional Paid-in Capital | 224,694 | 224,694 | 0 | | Statutory Reserves | 23,314 | 23,314 | 0 | | Retained Earnings | 11,836 | (19,618) | (31,454) | | Accumulated Other Comprehensive Income (Loss) | (393) | (42) | 351 | | Total Equity | 260,051 | 228,948 | (31,103) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Group experienced a significant increase in net cash used in operating activities and investing activities for the six months ended December 31, 2022, compared to the same period in 2021, leading to a substantial net decrease in cash and cash equivalents and restricted cash [Cash Flow Analysis](index=7&type=section&id=Cash%20Flow%20Analysis) The Group experienced a significant increase in net cash used in operating activities and investing activities for the six months ended December 31, 2022, compared to the same period in 2021, leading to a substantial net decrease in cash and cash equivalents and restricted cash, resulting in a lower ending balance | Metric | 6 Months Ended Dec 31, 2021 (RMB in thousands) | 6 Months Ended Dec 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:----------------------------------------|----------------------------------:|----------------------------------:|-------------:|-----------:| | Net cash used in operating activities | (9,301) | (125,484) | (116,183) | 1249.15% | | Net cash used in investing activities | (8,359) | (96,255) | (87,896) | 1051.40% | | Net cash provided by financing activities | - | - | 0 | N/A | | Net decrease in cash and cash equivalents, and restricted cash | (17,660) | (221,739) | (204,079) | 1155.50% | | Cash and cash equivalents, and restricted cash at end of year | 314,962 | 91,667 | (223,295) | -70.89% | - The significant increase in cash used in operating activities was primarily driven by a large decrease in investor's deposit (**RMB 102,361 thousand outflow in 2022 vs. RMB 26,587 thousand inflow in 2021**)[19](index=19&type=chunk) - Net cash used in investing activities increased substantially due to the distribution of short-term loans receivable (**RMB 100,000 thousand in 2022 vs. RMB 30,000 thousand in 2021**)[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the Group's financial statements, covering organizational structure, significant accounting policies, and specific financial statement line items [1. ORGANIZATION AND PRINCIPAL ACTIVITIES](index=9&type=section&id=1.%20ORGANIZATION%20AND%20PRINCIPAL%20ACTIVITIES) Puyi Inc. is a Cayman Islands-incorporated holding company listed on Nasdaq, primarily providing wealth management services in China, operating through wholly-owned subsidiaries and consolidated Variable Interest Entities (VIEs), with a substantial portion of its financial activities derived from Puyi Bohui and its subsidiaries - Puyi Inc. is a holding company incorporated in the Cayman Islands and listed on Nasdaq, primarily offering wealth management services to China's emerging middle class and affluent population[25](index=25&type=chunk) - A significant portion of the Group's assets, liabilities, sales, expenses, net income, and cash flows are derived from Puyi Bohui and its subsidiaries (VIEs)[26](index=26&type=chunk) Intercompany Cash Flows (Six months ended December 31, 2022) | Transaction Type | 2021 (RMB in thousands) | 2022 (RMB in thousands) | Change (RMB in thousands) | |:-------------------------------------------------------------------------------|-----------:|-----------:|-------------:| | Cash paid by VIEs to Puyi Consulting for consulting services | 10,459 | 10,478 | 19 | | Cash paid by VIEs to Puyi Dake for technical services | - | 2,850 | 2,850 | | Cash paid by VIEs to Puyi Consulting for office rental and other services | 607 | 532 | (75) | | Cash paid by Puyi Consulting to VIEs for digital marketing and IT services | 2,400 | - | (2,400) | | Intercompany advances from equity-owned subsidiaries to VIEs | 44,435 | 3,290 | (41,145) | | Repayment of intercompany advances by VIEs | 59,965 | 2,198 | (57,767) | | Intercompany advances from VIEs to equity-owned subsidiaries | 63,288 | 42,880 | (20,408) | | Repayment of intercompany advances by equity-owned subsidiaries | 107,688 | 24,930 | (82,758) | [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=14&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the Group's key accounting policies, including the basis of presentation and consolidation under US GAAP, use of estimates, and specific policies for various financial statement items such as cash, receivables, property, revenue recognition, and income taxes, detailing the application of ASC 606 for revenue and ASC Topic 842 for leases, and discussing the impact of recently issued accounting standards - The Group prepares its condensed consolidated financial statements in accordance with US GAAP, consolidating all majority-owned subsidiaries and VIEs where it is the primary beneficiary[46](index=46&type=chunk) - Revenue is primarily generated from wealth management, asset management, and insurance consulting services, recognized based on a five-step model (ASC 606)[59](index=59&type=chunk)[60](index=60&type=chunk) Disaggregation of Revenue (Six months ended December 31) | Revenue Type | 2021 (RMB in thousands) | 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:----------------------------------------------|-----------:|-----------:|-------------:|-----------:| | Wealth management | 94,232 | 53,546 | (40,686) | -43.18% | | One-time commissions | 44,899 | 16,247 | (28,652) | -63.81% | | Recurring management fees | 46,309 | 35,535 | (10,774) | -23.26% | | Performance-based distribution fees | 3,024 | 1,764 | (1,260) | -41.67% | | Asset management | 3,704 | 1,161 | (2,543) | -68.65% | | Management fees | 1,926 | 1,085 | (841) | -43.67% | | Performance-based fees | 1,778 | 76 | (1,702) | -95.73% | | Insurance consulting services | 3,290 | 6,999 | 3,709 | 112.74% | | Other services | 261 | 6,723 | 6,462 | 2475.86% | | Total | 101,486 | 68,429 | (33,057) | -32.57% | - The Group applies ASC Topic 842 for leases, recognizing operating lease right-of-use assets and liabilities on the balance sheet for leases with terms over 12 months[72](index=72&type=chunk)[73](index=73&type=chunk) - The Group is evaluating the impact of ASU 2016-13 (Credit Losses) which is effective for the Group for annual and interim periods beginning after December 15, 2022[83](index=83&type=chunk) [2.a Basis of presentation and consolidation](index=14&type=section&id=2.a%20Basis%20of%20presentation%20and%20consolidation) The condensed consolidated financial statements are prepared in accordance with US GAAP, encompassing the Group, its majority-owned subsidiaries, and consolidated VIEs - The condensed consolidated financial statements are prepared in accordance with US GAAP and include the financial statements of the Group, its majority-owned subsidiaries, and consolidated VIEs[46](index=46&type=chunk) [2.b Use of estimates](index=14&type=section&id=2.b%20Use%20of%20estimates) Financial statement preparation necessitates management estimates and assumptions, particularly for allowances, impairments, deferred taxes, and fair value measurements - Preparation of financial statements requires management to make estimates and assumptions, particularly for allowance for doubtful loans, impairment of long-lived assets, deferred tax assets, and fair value measurements[47](index=47&type=chunk) [2.c Cash and cash equivalents](index=14&type=section&id=2.c%20Cash%20and%20cash%20equivalents) Cash and cash equivalents comprise cash on hand, bank deposits, and highly liquid investments with original maturities of three months or less - Cash and cash equivalents include cash on hand, bank deposits, and highly liquid investments with original maturities of three months or less[48](index=48&type=chunk) [2.d Restricted cash](index=14&type=section&id=2.d%20Restricted%20cash) Restricted cash represents uninvested investor balances held in the Group's bank account under designated financial institution custody, as mandated by the China Securities Regulatory Commission - Restricted cash represents investors' uninvested cash balances held in the Group's bank account under the custody of a designated financial institution, as required by the China Securities Regulatory Commission[49](index=49&type=chunk) [2.e Accounts receivable, other receivables and current assets, and amount due from related parties, net](index=14&type=section&id=2.e%20Accounts%20receivable%2C%20other%20receivables%20and%20current%20assets%2C%20and%20amount%20due%20from%20related%20parties%2C%20net) Receivables are recorded at net realizable value with an allowance for uncollectible accounts, and as of December 31, 2022, the Group recorded **RMB 6,892 thousand** as allowances for doubtful accounts - Receivables are recorded at net realizable value, with an allowance for uncollectible accounts based on aging data, historical collection experience, customer-specific facts, and economic conditions[50](index=50&type=chunk) - As of December 31, 2022, the Group recorded **RMB 6,892 thousand** as allowances for doubtful accounts against its accounts receivable[50](index=50&type=chunk) [2.f Short-term loans receivable](index=15&type=section&id=2.f%20Short-term%20loans%20receivable) Short-term loans receivable represent contractual rights to receive money within one year, with interest income recognized on an accrual basis - Short-term loans receivable are contractual rights to receive money within one year, with interest income recognized on an accrual basis[53](index=53&type=chunk) [2.g Property and equipment, net](index=15&type=section&id=2.g%20Property%20and%20equipment%2C%20net) Property and equipment are stated at cost less accumulated depreciation, calculated using the straight-line method over estimated useful lives of 3-5 years - Property and equipment are stated at cost less accumulated depreciation, calculated using the straight-line method over estimated useful lives (**3-5 years** for office equipment/motor vehicles, shorter of lease term/useful life for leasehold improvements)[54](index=54&type=chunk)[55](index=55&type=chunk) [2.h Impairment of long-lived assets](index=16&type=section&id=2.h%20Impairment%20of%20long-lived%20assets) Long-lived assets are reviewed for impairment when carrying value may not be recoverable, with no impairment recognized for the six months ended December 31, 2021 and 2022 - Long-lived assets are reviewed for impairment when circumstances indicate carrying value may not be recoverable; no impairment was recognized for the six months ended December 31, 2021 and 2022[58](index=58&type=chunk) [2.i Revenue recognition](index=16&type=section&id=2.i%20Revenue%20recognition) Revenue is recognized following ASC 606's five-step model, primarily from wealth management, asset management, and insurance consulting services, with contract liability of **RMB 1,500 thousand** recognized as revenue in H2 2022 - Revenue is recognized following ASC 606's five-step model, primarily from wealth management, asset management, and insurance consulting services[59](index=59&type=chunk)[60](index=60&type=chunk) - Contract liability, representing cash received in advance for unsatisfied performance obligations, was **RMB 1,500 thousand** as of June 30, 2022, and recognized as revenue during the six months ended December 31, 2022[62](index=62&type=chunk) [2.j Cost of sales](index=17&type=section&id=2.j%20Cost%20of%20sales) Cost of sales primarily includes commission costs paid to sales agents for wealth management product distributions and costs related to consulting services for trust and family wealth inheritance - Cost of sales primarily includes commission costs paid to sales agents for wealth management product distributions and costs related to consulting services for trust and family wealth inheritance[64](index=64&type=chunk) [2.k Income taxes](index=17&type=section&id=2.k%20Income%20taxes) The Group uses the liability method for income taxes (ASC Topic 740), determining deferred tax assets and liabilities based on financial reporting and tax bases differences - The Group uses the liability method for income taxes (ASC Topic 740), determining deferred tax assets and liabilities based on financial reporting and tax bases differences[65](index=65&type=chunk) [2.l Uncertain tax positions](index=17&type=section&id=2.l%20Uncertain%20tax%20positions) Uncertain tax positions are recognized and measured using a more-likely-than-not threshold (ASC Topic 740), with **RMB 13,500 thousand** of unrecognized tax benefits as of December 31, 2022 - Uncertain tax positions are recognized and measured using a more-likely-than-not threshold (ASC Topic 740); the Group had **RMB 13,500 thousand** of unrecognized tax benefits as of December 31, 2022[66](index=66&type=chunk)[129](index=129&type=chunk) [2.m Fair value of financial instruments](index=18&type=section&id=2.m%20Fair%20value%20of%20financial%20instruments) Fair value is determined based on a three-level hierarchy, with most financial instruments' carrying values approximating fair values due to their short-term nature - Fair value is determined based on a three-level hierarchy (Level 1: quoted prices in active markets; Level 2: observable inputs other than Level 1; Level 3: unobservable inputs)[69](index=69&type=chunk)[70](index=70&type=chunk) - The carrying values of most financial instruments (cash, receivables, short-term investments, payables) approximate their fair values due to their short-term nature[71](index=71&type=chunk) [2.n Leases](index=18&type=section&id=2.n%20Leases) The Group applies ASU 2016-02 (Topic 842) for operating leases, primarily for office space, recognizing right-of-use assets and lease liabilities based on the present value of lease payments - The Group applies ASU 2016-02 (Topic 842) for operating leases, primarily for office space, recognizing right-of-use assets and lease liabilities based on the present value of lease payments[72](index=72&type=chunk)[73](index=73&type=chunk) [2.o Foreign currency translation](index=19&type=section&id=2.o%20Foreign%20currency%20translation) The Group's reporting and functional currency is Renminbi (RMB), with overseas entities' financial statements translated into RMB and translation adjustments reported in other comprehensive income; translations to US$ are for convenience at **US$1.00 = RMB6.8972** as of December 31, 2022 - The Group's reporting and functional currency is Renminbi (RMB). Financial statements of overseas entities are translated into RMB, with translation adjustments reported as a component of other comprehensive income[76](index=76&type=chunk)[77](index=77&type=chunk) - Translations from RMB to US$ are for convenience, using the rate of **US$1.00 = RMB6.8972** as of December 31, 2022[77](index=77&type=chunk) [2.p Segment reporting](index=19&type=section&id=2.p%20Segment%20reporting) The Group manages its business as a single operating segment, providing wealth management services in the PRC, where substantially all revenues and long-lived assets are located - The Group manages its business as a single operating segment, providing wealth management services in the PRC, where substantially all revenues and long-lived assets are located[78](index=78&type=chunk) [2.q Earnings per share ("EPS")](index=19&type=section&id=2.q%20Earnings%20per%20share%20(%22EPS%22)) Basic EPS is calculated by dividing net income (loss) by the weighted average number of ordinary shares outstanding, with diluted EPS adjusting for potentially dilutive share-based awards - Basic EPS is calculated by dividing net income (loss) by the weighted average number of ordinary shares outstanding; diluted EPS adjusts for potentially dilutive share-based awards[79](index=79&type=chunk) [2.r Commitments and contingencies](index=20&type=section&id=2.r%20Commitments%20and%20contingencies) Contingent liabilities are accrued when a loss is probable and reasonably estimable, with disclosure made if a material loss is reasonably possible - Contingent liabilities are accrued when a loss is probable and reasonably estimable; disclosure is made if a material loss is reasonably possible[82](index=82&type=chunk) [2.s Recently issued accounting standards](index=20&type=section&id=2.s%20Recently%20issued%20accounting%20standards) The Group is evaluating the impact of ASU 2016-13 (Credit Losses), effective for annual and interim periods beginning after December 15, 2022, which replaces the incurred loss approach with an expected loss model - The Group is evaluating the impact of ASU 2016-13 (Credit Losses), which replaces the incurred loss approach with an expected loss model and is effective for the Group for annual and interim periods beginning after December 15, 2022[83](index=83&type=chunk) [3. ACCOUNTS RECEIVABLE, NET](index=21&type=section&id=3.%20ACCOUNTS%20RECEIVABLE%2C%20NET) Accounts receivable, primarily from product providers, decreased from RMB 59,507 thousand to RMB 53,845 thousand between June 30, 2022, and December 31, 2022, with the allowance for doubtful accounts remaining constant at RMB 6,892 thousand and no write-offs during the six months ended December 31, 2021 and 2022 | Metric | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:------------------------------|--------------------:|------------------------:|-------------:|-----------:| | Accounts receivable | 66,399 | 60,737 | (5,662) | -8.53% | | Allowance for doubtful accounts | 6,892 | 6,892 | 0 | 0.00% | | Accounts receivable, net | 59,507 | 53,845 | (5,662) | -9.51% | - Accounts receivable are non-interest bearing and mainly represent amounts due from product providers[86](index=86&type=chunk)[87](index=87&type=chunk) - No allowance for doubtful accounts was written off for the six months ended December 31, 2021 and 2022[87](index=87&type=chunk) [4. OTHER RECEIVABLES AND CURRENT ASSETS](index=21&type=section&id=4.%20OTHER%20RECEIVABLES%20AND%20CURRENT%20ASSETS) Other receivables and current assets decreased from RMB 14,298 thousand as of June 30, 2022, to RMB 8,926 thousand as of December 31, 2022, primarily due to decreases in prepayments to service providers, rental deposits, and the absence of income tax prepayments at year-end | Component | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:-------------------------------|--------------------:|------------------------:|-------------:|-----------:| | Advances to staff | 855 | 899 | 44 | 5.15% | | Prepayments to service providers | 5,252 | 4,105 | (1,147) | -21.84% | | Rental deposits | 5,523 | 3,922 | (1,601) | -28.99% | | Income tax prepayments | 2,666 | - | (2,666) | -100.00% | | Other | 2 | - | (2) | -100.00% | | Total | 14,298 | 8,926 | (5,372) | -37.57% | [5. SHORT-TERM LOANS RECEIVABLE](index=22&type=section&id=5.%20SHORT-TERM%20LOANS%20RECEIVABLE) As of December 31, 2022, short-term loans receivable primarily consisted of RMB 100,000 thousand lent to a real estate developing company, with an annual interest rate of **7.2%**, expected to be fully repaid by June 30, 2023, and guaranteed by the borrower's legal representative and controlling shareholder, leading to a significant increase in interest income in 2022 - As of December 31, 2022, the Group had **RMB 100,000 thousand** in short-term loans receivable to a real estate developing company, with a **7.2%** annual interest rate, expected to be repaid by June 30, 2023[92](index=92&type=chunk) - Interest income from short-term loans receivable increased from **RMB 388 thousand** for the six months ended December 31, 2021, to **RMB 3,355 thousand** for the same period in 2022[92](index=92&type=chunk) [6. PROPERTY AND EQUIPMENT, NET](index=22&type=section&id=6.%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) Property and equipment, net, decreased from RMB 9,156 thousand as of June 30, 2022, to RMB 5,931 thousand as of December 31, 2022, mainly due to the disposal of leasehold improvements from terminated rental offices, resulting in a loss of RMB 1,872 thousand included in operating expenses, and a decrease in depreciation expense | Component | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:-------------------------------|--------------------:|------------------------:|-------------:|-----------:| | Furniture, office equipment, fixtures | 5,151 | 5,219 | 68 | 1.32% | | Leasehold improvements | 11,405 | 8,375 | (3,030) | -26.57% | | Motor vehicles | 1,932 | 1,932 | 0 | 0.00% | | Total cost | 18,488 | 15,526 | (2,962) | -16.02% | | Less: Accumulated depreciation | (9,332) | (9,595) | (263) | 2.82% | | Property and equipment, net | 9,156 | 5,931 | (3,225) | -35.22% | - Depreciation expense decreased from **RMB 3,273 thousand** for the six months ended December 31, 2021, to **RMB 2,058 thousand** for the same period in 2022[94](index=94&type=chunk) - A loss of **RMB 1,872 thousand** from the disposal of leasehold improvements due to termination of rental offices was included in operating expenses[94](index=94&type=chunk) [7. LEASES](index=23&type=section&id=7.%20LEASES) The Group's operating lease right-of-use assets and liabilities decreased from June 30, 2022, to December 31, 2022, with a slightly shortened weighted average lease term, constant discount rate, significantly decreased lease expenses, and notable non-cash changes related to lease liabilities from new leases and early terminations | Metric | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:----------------------------------|--------------------:|------------------------:|-------------:|-----------:| | Right-of-use assets | 34,382 | 24,556 | (9,826) | -28.58% | | Lease liabilities, current | 11,889 | 8,857 | (3,032) | -25.50% | | Lease liabilities, non-current | 23,259 | 17,587 | (5,672) | -24.40% | | Total operating lease liabilities | 35,148 | 26,444 | (8,704) | -24.76% | Lease Terms and Rates | Metric | June 30, 2022 | December 31, 2022 | |:----------------------------|:--------------|:------------------| | Weighted average lease term | 3.31 years | 3.09 years | | Weighted average discount rate | 4.75% | 4.75% | Lease Expenses (Six months ended December 31) | Expense Type | 2021 (RMB in thousands) | 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:----------------------|-----------:|-----------:|-------------:|-----------:| | Operating lease expenses | 8,564 | 5,180 | (3,384) | -39.51% | | Short-term lease expenses | 4,474 | 1,551 | (2,923) | -65.33% | | Total | 13,038 | 6,731 | (6,307) | -48.37% | - New operating lease liabilities from obtaining right-of-use assets decreased significantly from **RMB 25,362 thousand** in 2021 to **RMB 2,975 thousand** in 2022. Changes from early termination of operating leases also decreased from **RMB (9,848) thousand** to **RMB (8,248) thousand**[105](index=105&type=chunk) [8. INVESTORS' DEPOSIT](index=25&type=section&id=8.%20INVESTORS'%20DEPOSIT) The investors' deposit balance as of December 31, 2022, was RMB 16,434 thousand, representing uninvested cash balances temporarily held in the Group's bank account under the custody and supervision of a designated financial institution, as mandated by the China Securities Regulatory Commission to prevent misuse - Investors' deposit of **RMB 16,434 thousand** as of December 31, 2022, represents uninvested cash balances temporarily held in the Group's bank account[109](index=109&type=chunk) - These funds are under the custody and supervision of a designated financial institution, as required by the China Securities Regulatory Commission, to prevent misuse of investors' funds[109](index=109&type=chunk) [9. OTHER PAYABLES AND ACCRUED EXPENSES](index=25&type=section&id=9.%20OTHER%20PAYABLES%20AND%20ACCRUED%20EXPENSES) Other payables and accrued expenses increased from RMB 19,445 thousand as of June 30, 2022, to RMB 22,529 thousand as of December 31, 2022, primarily driven by a rise in payroll payable, partially offset by a decrease in accrued expenses and value-added tax recoverable | Component | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:-------------------------------|--------------------:|------------------------:|-------------:|-----------:|\n| Payroll payable | 13,844 | 17,780 | 3,936 | 28.43% | | Accrued expenses | 3,924 | 3,203 | (721) | -18.37% | | Value-added tax recoverable | (700) | (416) | 284 | -40.57% | | Employee's individual income tax | 407 | 459 | 52 | 12.78% | | Others | 1,970 | 1,503 | (467) | -23.71% | | Total | 19,445 | 22,529 | 3,084 | 15.86% | - Accrued expenses mainly consisted of accrued marketing and sales promotion expenses for publicly raised fund products[111](index=111&type=chunk) [10. SUNDRY INCOME](index=26&type=section&id=10.%20SUNDRY%20INCOME) Total sundry income decreased from RMB 1,674 thousand for the six months ended December 31, 2021, to RMB 723 thousand for the same period in 2022, primarily due to a reduction in government grants | Component | 6 Months Ended Dec 31, 2021 (RMB in thousands) | 6 Months Ended Dec 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:------------------|----------------------------------:|----------------------------------:|-------------:|-----------:| | Government grants | 1,673 | 679 | (994) | -59.41% | | Others | 1 | 44 | 43 | 4300.00% | | Total sundry income | 1,674 | 723 | (951) | -56.81% | - Government grants are recognized as sundry income upon compliance with conditions, primarily representing subsidies from local governments for financial contributions and capital expenditures on certain projects[115](index=115&type=chunk) [11. INCOME TAXES](index=26&type=section&id=11.%20INCOME%20TAXES) The Group's income tax benefit decreased from RMB 3,421 thousand in 2021 to RMB 1,679 thousand in 2022, influenced by various tax preferences for PRC subsidiaries and VIEs, including a **15%** rate for west development and Qianhai modern services cooperation district entities, and tax exemptions for accredited software companies, with significant tax loss carry-forwards and unrecognized tax benefits | Component | 6 Months Ended Dec 31, 2021 (RMB in thousands) | 6 Months Ended Dec 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:-----------------------|----------------------------------:|----------------------------------:|-------------:|-----------:| | Current income tax | 564 | 746 | 182 | 32.27% | | Deferred income tax | (3,985) | (2,425) | 1,560 | -39.15% | | Total income tax benefit | (3,421) | (1,679) | 1,742 | -50.92% | - Several PRC subsidiaries and VIEs benefit from preferential tax rates (**15%**) due to qualifications like west development taxation preference or Shenzhen Qianhai modern services cooperation district entity tax preference[118](index=118&type=chunk) - Dake, an accredited software company, is exempted from PRC Income Tax for two years starting from its first profit-making year, followed by a **50%** reduction for the next three years[118](index=118&type=chunk) - The Group had total tax loss carry-forwards of **RMB 184,801 thousand** as of December 31, 2022, expiring between 2023 and 2027[126](index=126&type=chunk) - As of December 31, 2022, the Group had **RMB 13,500 thousand** of unrecognized tax benefits[129](index=129&type=chunk) [12. LOSS PER SHARE](index=28&type=section&id=12.%20LOSS%20PER%20SHARE) The basic and diluted net loss per ordinary share decreased from RMB (0.434) for the six months ended December 31, 2021, to RMB (0.348) for the same period in 2022, reflecting a reduction in net loss while the weighted average number of ordinary shares remained constant | Metric | 6 Months Ended Dec 31, 2021 (RMB in thousands) | 6 Months Ended Dec 31, 2022 (RMB in thousands) | Change (RMB in thousands) | Change (%) | |:----------------------------------------|----------------------------------:|----------------------------------:|-------------:|-----------:| | Net loss | (39,244) | (31,454) | 7,790 | -19.85% | | Weighted average number of ordinary shares outstanding (shares) | 90,472,014 | 90,472,014 | 0 | 0.00% | | Basic & diluted net loss per ordinary share (RMB) | (0.434) | (0.348) | 0.086 | -19.81% | [13. CONDENSED FINANCIAL STATEMENTS OF THE COMPANY](index=30&type=section&id=13.%20CONDENSED%20FINANCIAL%20STATEMENTS%20OF%20THE%20COMPANY) The Company's condensed financial statements, prepared using the equity method for investments in subsidiaries and VIEs, show a decrease in total assets and equity from June 30, 2022, to December 31, 2022, with a net loss reported for both periods, slightly reduced in the six months ended December 31, 2022, compared to the prior year Condensed Statements of Financial Position (Company Only) | Metric | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | |:----------------------------|--------------------:|------------------------:|-------------:| | Cash and cash equivalents | 11,732 | 11,172 | (560) | | Investments in subsidiaries | 248,459 | 217,696 | (30,763) | | Total assets | 260,268 | 228,948 | (31,320) | | Total liabilities | 217 | - | (217) | | Total equity | 260,051 | 228,948 | (31,103) | Condensed Statements of Operations and Comprehensive Loss (Company Only) | Metric | 6 Months Ended Dec 31, 2021 (RMB in thousands) | 6 Months Ended Dec 31, 2022 (RMB in thousands) | Change (RMB in thousands) | |:-------------------------------|----------------------------------:|----------------------------------:|-------------:| | General and administrative expenses | (398) | (935) | (537) | | Equity in loss of subsidiaries | (38,805) | (30,763) | 8,042 | | Net loss | (39,249) | (31,454) | 7,795 | | Total Comprehensive loss | (39,409) | (31,103) | 8,306 | [14. RELATED PARTY TRANSACTIONS](index=32&type=section&id=14.%20RELATED%20PARTY%20TRANSACTIONS) The Group engages in significant transactions with related parties, primarily Fanhua Inc. and its subsidiaries (Fanhua Lianxing and Fanhua Yuntong), including insurance consulting service income, trust consulting service income, and promotion expenses, with amounts due from Fanhua Lianxing increasing and amounts due to Fanhua Yuntong decreasing - Fanhua Inc. is a shareholder of Puyi, holding approximately **4.5%** of shares and sharing a common director with the Group[141](index=141&type=chunk) Related Party Transactions (Six months ended December 31) | Transaction Type | 2021 (RMB in thousands) | 2022 (RMB in thousands) | Change (RMB in thousands) | |:-----------------------------------------------|-----------:|-----------:|-------------:| | Insurance consulting service income accrued from Fanhua Lianxing | 3,312 | 6,497 | 3,185 | | Trust consulting service income accrued from Fanhua Lianxing | - | 5,643 | 5,643 | | Promotion expense accrued and adjusted to Fanhua Yuntong | 355 | (55) | (410) | | Promotion expense paid to Fanhua Yuntong | 141 | 175 | 34 | Amounts Due From/To Related Parties | Account | June 30, 2022 (RMB in thousands) | December 31, 2022 (RMB in thousands) | Change (RMB in thousands) | |:------------------------|--------------------:|------------------------:|-------------:| | Amounts due from Fanhua Lianxing | 2,895 | 7,761 | 4,866 | | Advance receipts from Fanhua Lianxing | (1,500) | - | 1,500 | | Amount due to Fanhua Yuntong | (292) | (236) | 56 | [15. STATUTORY RESERVE](index=34&type=section&id=15.%20STATUTORY%20RESERVE) PRC subsidiaries and VIEs are required to appropriate **10%** of their net profits after tax to a statutory reserve, up to **50%** of registered capital, which is not distributable as cash dividends, and as of December 31, 2022, the balance remained at **RMB 23,314 thousand** - PRC subsidiaries and VIEs must reserve **10%** of their net profits after income tax to a statutory reserve, until it reaches **50%** of registered capital[149](index=149&type=chunk) - The statutory reserve is not distributable in the form of cash dividends[149](index=149&type=chunk) - As of December 31, 2022, the balance of the statutory reserve was **RMB 23,314 thousand**[149](index=149&type=chunk) [16. CONTINGENCIES](index=34&type=section&id=16.%20CONTINGENCIES) The Group accrues contingent liabilities when a loss is probable and estimable, and discloses them if a material loss is reasonably possible, with no significant pending litigation as of the issuance date of the condensed financial statements - Loss contingencies are accrued when a loss is probable and reasonably estimable; disclosure is made if a material loss is reasonably possible[150](index=150&type=chunk) - As of the issuance date, the Group had no significant pending litigation[150](index=150&type=chunk) [17. IMPACT OF COVID-19](index=34&type=section&id=17.%20IMPACT%20OF%20COVID-19) The COVID-19 pandemic has adversely affected the Group's operations and financial performance, with temporary impacts in December 2022 due to a surge in cases, and future impacts remain uncertain regarding China's economy and investor engagement - The COVID-19 pandemic has adversely affected the Group's operations and financial performance[151](index=151&type=chunk) - Temporary operational impacts were experienced in December 2022 due to a surge in COVID-19 cases after the revocation of restrictive measures in China[151](index=151&type=chunk) - Future impacts remain uncertain, including potential long-term negative effects on China's economy and reduced demand for wealth management services due to decreased disposable income and investor confidence[151](index=151&type=chunk) [18. SUBSEQUENT EVENTS](index=34&type=section&id=18.%20SUBSEQUENT%20EVENTS) The Group has evaluated subsequent events through the issuance date of the condensed consolidated financial statements and identified no events requiring adjustment or disclosure - No subsequent events requiring adjustment or disclosure were identified through the issuance date of the condensed consolidated financial statements[152](index=152&type=chunk)

Puyi Inc. (NASDAQ:PUYI) Q4 2022 Earnings Conference Call October 11, 2022 9:00 PM ET Corporate Participants Jing He - General Manager of Financial Reporting Department Yong Ren - Chairman and Chief Executive Officer Anlin Hu - Chief Financial Officer Conference Call Participants Operator Ladies and gentlemen, welcome to Puyi Inc.'s Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a Q&A session. For you ...

Puyi Inc. (NASDAQ:PUYI) Q2 2022 Earnings Conference Call March 28, 2022 9:00 PM ET Company Participants Jing He - General Manager of Financial Reporting Department Yong Ren - CEO Conference Call Participants Operator Ladies and gentlemen, welcome to Puyi Inc.'s First Half of the Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a Q&A session. For your information, today's conference call is being record ...

Puyi Inc. (NASDAQ:PUYI) Q4 2021 Earnings Conference Call September 27, 2021 9:00 PM ET Company Participants Jing He - General Manager of Financial Reporting Department Yong Ren - Chief Executive Officer Conference Call Participants Operator Ladies and gentlemen, welcome to Puyi Incorporated Fiscal Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a question-and-answer session. For your information, today's con ...