Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Document and Entity Information | |
Entity Registrant Name | Jupai Holdings Ltd |
Entity Central Index Key | 1,616,291 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Well-known Seasoned Issuer | No |
Entity Filer Category | Non-accelerated Filer |
Entity Common Stock, Shares Outstanding | 179,586,759 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 122,504,799 | $ 31,557,233 |
Short-term investments (including short-term investments measured at fair value of $2,329,131 and $1,043,550, as of December 31, 2014 and 2015, respectively) | 11,156,616 | 10,661,372 |
Short-term entrusted investments | 287,797 | 2,215,083 |
Accounts receivable | 4,005,258 | 793,037 |
Other receivables | 5,164,971 | 2,121,264 |
Amounts due from related parties | 1,836,209 | 2,389,925 |
Customer borrowings | 549,856 | |
Deferred tax assets- current | 7,087,092 | 2,595,112 |
Other current assets | 1,025,526 | 656,838 |
Total current assets | 153,068,268 | 53,539,720 |
Long-term investments | 9,988,168 | 8,727,495 |
Long-term entrusted investments | 1,068,496 | |
Intangible assets, net | 8,432,021 | |
Goodwill | 39,995,458 | |
Advanced payment for acquisition | 14,612,634 | |
Investment in affiliates | 11,577,995 | 2,284,687 |
Property and equipment, net | 2,473,964 | 1,359,615 |
Long-term prepayment | 292,655 | 212,453 |
Deferred tax assets- non-current | 1,243,313 | 121,397 |
Total Assets | 241,684,476 | 67,313,863 |
Current liabilities: | ||
Accrued payroll and welfare expenses (including accrued payroll and welfare expense of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $748,864 and $4,322,940 as of December 31, 2014 and 2015, respectively) | 12,443,966 | 2,247,414 |
Income tax payable (including income tax payable of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $1,680,295 and $9,505,352 as of December 31, 2014 and 2015, respectively) | 15,913,670 | 4,800,181 |
Other tax payable (including other tax payable of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $672,824 and $2,942,691 as of December 31, 2014 and 2015, respectively) | 6,039,794 | 1,596,511 |
Dividend payable (including dividend payable of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of nil and $1,154,983 as of December 31, 2014 and 2015, respectively) | 1,154,983 | |
Deferred revenue from related parties (including deferred revenue from related parties of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $5,287,903 and $12,043,558 as of December 31,2014 and 2015) | 12,897,658 | 5,287,903 |
Deferred revenues (including deferred revenues of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $1,236,326 and $7,664,939 as of December 31,2014 and 2015) | 8,956,195 | 3,462,149 |
Other current liabilities (including other current liabilities of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $223,087 and $324,353 as of December 31, 2014 and 2015, respectively) | 730,405 | 2,070,081 |
Total current liabilities | 58,136,671 | 19,464,239 |
Amounts due to related parties- non-current (including amounts due to related parties of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of nil and nil as of December 31, 2014 and 2015, respectively) | 5,280,000 | |
Deferred revenue - non-current from related parties (including deferred revenue from related parties of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $131,855 and $4,424,788 as of December 31, 2014 and 2015, respectively) | 4,729,030 | 131,855 |
Deferred revenue - non-current (including deferred revenue of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $353,739 and $548,464 as of December 31, 2014 and 2015, respectively) | 548,464 | 353,739 |
Non-current uncertain tax position liabilities (including uncertain tax position liabilities of the consolidated VIEs and VIEs' subsidiaries without recourse to Jupai Holdings Limited of $785,372 and $827,315 as of December 31, 2014 and 2015, respectively) | 827,315 | 785,372 |
Deferred tax liabilities- non-current | 2,108,005 | |
Total Liabilities | 71,629,485 | 20,735,205 |
Shareholders' Equity: | ||
Ordinary Shares ($0.0005 par value; 142,101,710 and 1,000,000,000 shares authorized, 61,244,980 and 179,586,759 shares issued and outstanding, as of December 31, 2014 and 2015, respectively) | 89,794 | 30,622 |
Additional paid-in capital | 146,283,019 | 6,794,536 |
Retained earnings | 24,491,075 | 154,062 |
Accumulated other comprehensive income(loss) | (3,492,512) | 574,682 |
Total Jupai shareholders' equity | 167,371,376 | 7,553,902 |
Non-controlling interests | 2,683,615 | 730,122 |
Total Equity | 170,054,991 | 8,284,024 |
Total Liabilities, Mezzanine Equity and Total Equity | $ 241,684,476 | 67,313,863 |
Series A convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares | 1,500,000 | |
Series B convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares | $ 36,794,634 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued payroll and welfare expenses | $ 12,443,966 | $ 2,247,414 |
Income tax payable | 15,913,670 | 4,800,181 |
Other tax payable | 6,039,794 | 1,596,511 |
Dividend payable | 1,154,983 | |
Deferred revenue - current from related parties | 12,897,658 | 5,287,903 |
Deferred revenues - current | 8,956,195 | 3,462,149 |
Other current liabilities | 730,405 | 2,070,081 |
Amounts due to related parties- non-current | 5,280,000 | |
Deferred revenue - non-current from related parties | 4,729,030 | 131,855 |
Deferred revenue - non-current | 548,464 | 353,739 |
Non-current uncertain tax position liabilities | 827,315 | $ 785,372 |
Deferred tax liabilities- non-current | $ 2,108,005 | |
Mezzanine Equity | ||
Convertible redeemable preferred shares, shares issued | 0 | |
Convertible redeemable preferred shares, shares outstanding | 0 | |
Shareholders' Equity: | ||
Ordinary shares, par value ( in dollars per share) | $ (0.0005) | $ (0.0005) |
Ordinary shares, shares authorized | 1,000,000,000 | 142,101,710 |
Ordinary shares, shares issued | 179,586,759 | 61,244,980 |
Ordinary shares, shares outstanding | 179,586,759 | 61,244,980 |
Short-term investments. | ||
Investments, fair value | $ 1,043,550 | $ 2,329,131 |
Series A convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ (0.0005) | $ (0.0005) |
Convertible redeemable preferred shares, shares authorized | 4,216,867 | 4,216,867 |
Convertible redeemable preferred shares, shares issued | 0 | 4,216,867 |
Convertible redeemable preferred shares, shares outstanding | 0 | 4,216,867 |
Convertible redeemable preferred shares, redemption value | $ 0 | $ 1,529,267 |
Convertible redeemable preferred shares, liquidation value | $ 0 | $ 1,500,000 |
Series B convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ (0.0005) | $ (0.0005) |
Convertible redeemable preferred shares, shares authorized | 51,673,360 | 51,673,360 |
Convertible redeemable preferred shares, shares issued | 0 | 51,763,360 |
Convertible redeemable preferred shares, shares outstanding | 0 | 51,763,360 |
Convertible redeemable preferred shares, redemption value | $ 0 | $ 35,079,536 |
Convertible redeemable preferred shares, liquidation value | 0 | 33,475,912 |
Consolidated VIEs and VIEs' subsidiaries | ||
Accrued payroll and welfare expenses | 4,322,940 | 748,864 |
Income tax payable | 9,505,352 | 1,680,295 |
Other tax payable | 2,942,691 | 672,824 |
Dividend payable | 1,154,983 | 0 |
Deferred revenue - current from related parties | 12,043,558 | 5,287,903 |
Deferred revenues - current | 7,664,939 | 1,236,326 |
Other current liabilities | 324,353 | 223,087 |
Amounts due to related parties- non-current | 0 | 0 |
Deferred revenue - non-current from related parties | 4,424,788 | 131,855 |
Deferred revenue - non-current | 548,464 | 353,739 |
Non-current uncertain tax position liabilities | $ 827,315 | $ 785,372 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues | |||
Third party revenues | $ 42,208,971 | $ 33,480,210 | $ 20,297,018 |
Related party revenues | 53,320,333 | 5,657,828 | 2,297,763 |
Total revenues | 95,529,304 | 39,138,038 | 22,594,781 |
Business taxes and related surcharges | (1,177,738) | (225,669) | (164,160) |
Net revenues | 94,351,566 | 38,912,369 | 22,430,621 |
Operating cost and expenses: | |||
Cost of revenues | (37,414,007) | (10,657,267) | (3,703,030) |
Selling expenses | (13,810,241) | (5,768,356) | (3,846,855) |
General and administrative expenses | (14,553,357) | (7,009,332) | (4,411,080) |
Other operating income - government subsidy | 3,755,759 | 2,363,893 | 777,415 |
Total operating cost and expenses | (62,021,846) | (21,071,062) | (11,183,550) |
Income from operations | 32,329,720 | 17,841,307 | 11,247,071 |
Gain from deconsolidation of subsidiaries | 102,089 | ||
Interest income | 443,204 | 187,285 | 65,095 |
Investment income | 3,024,914 | 2,053,748 | 1,092,579 |
Gain from disposal of investment in affiliates | 369,472 | ||
Interest expense | (14,961) | (15,602) | |
Realized exchange gain | 332,239 | ||
Total other income | 4,169,829 | 2,328,161 | 1,142,072 |
Income before taxes and gain(loss) from equity in affiliates | 36,499,549 | 20,169,468 | 12,389,143 |
Income tax expense | (10,663,384) | (5,617,343) | (3,202,880) |
(Loss) gain from equity in affiliates | 687,225 | 78,015 | (135,892) |
Net income | 26,523,390 | 14,630,140 | 9,050,371 |
Net loss (income) attributable to non-controlling interests | (2,186,377) | (257,840) | 104,694 |
Net income attributable to Jupai shareholders | 24,337,013 | 14,372,300 | 9,155,065 |
Deemed dividend on Series B convertible redeemable preferred shares | (7,563,669) | ||
Net income attribute to ordinary shareholders | $ 24,337,013 | $ 6,808,631 | $ 9,155,065 |
Net income per share: | |||
Basic (in dollars per share) | $ 0.17 | $ 0.06 | $ 0.09 |
Diluted (in dollars per share) | $ 0.16 | $ 0.06 | $ 0.09 |
Weighted average number of shares used in computation: | |||
Basic (in shares) | 114,124,300 | 83,683,960 | 100,000,000 |
Diluted (in shares) | 119,598,947 | 114,445,361 | 100,866,480 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 26,523,390 | $ 14,630,140 | $ 9,050,371 |
Other comprehensive income, net of tax: | |||
Change in fair value of available-for-sale investment, net of tax of nil, $26,101 and $49,525 in 2013, 2014 and 2015, respectively | 148,575 | 78,303 | |
Disposal of available-for-sale investment, net of tax of nil, $23,844 and $51,782 in 2013, 2014 and 2015, respectively | (155,347) | (71,531) | |
Change in cumulative foreign currency translation adjustment | (4,122,034) | (56,024) | 526,503 |
Other comprehensive income (loss) | (4,128,806) | (49,252) | 526,503 |
Comprehensive income | 22,394,584 | 14,580,888 | 9,576,874 |
Less: comprehensive (loss) income attributable to non-controlling interest | 2,124,765 | 261,163 | (87,778) |
Comprehensive income attributable to Jupai shareholders | 20,269,819 | 14,319,725 | 9,664,652 |
Deemed dividend on Series B convertible redeemable preferred shares | (7,563,669) | ||
Comprehensive income attributable to ordinary shareholders | $ 20,269,819 | $ 6,756,056 | $ 9,664,652 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income | |||
Change in fair value of available-for-sale investment, tax | $ 49,525 | $ 26,101 | $ 0 |
Disposal of available for sale investment, tax | $ 51,782 | $ 23,844 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Ordinary shares | Additional paid-in capital | Subscription receivables | Retained earnings | Accumulated other comprehensive income | Total Jupai shareholders' equity | Non-controlling interests | Total |
Beginning Balance at Dec. 31, 2012 | $ 50,000 | $ 6,295,780 | $ (50,000) | $ 5,615,434 | $ 117,670 | $ 12,028,884 | $ 112,266 | $ 12,141,150 |
Beginning Balance (in shares) at Dec. 31, 2012 | 100,000,000 | |||||||
Net income | 9,155,065 | 9,155,065 | (104,694) | 9,050,371 | ||||
Foreign currency translation adjustments | 509,587 | 509,587 | 16,916 | 526,503 | ||||
Capital contribution by non-controlling interest | 625,112 | 625,112 | ||||||
Ending Balance at Dec. 31, 2013 | $ 50,000 | 6,295,780 | (50,000) | 14,770,499 | 627,257 | 21,693,536 | 649,600 | 22,343,136 |
Ending Balance (in shares) at Dec. 31, 2013 | 100,000,000 | |||||||
Net income | 14,372,300 | 14,372,300 | 257,840 | 14,630,140 | ||||
Dividend distributed to non-controlling interest | (41,633) | (41,633) | ||||||
Redesignation of ordinary shares to Series B convertible redeemable preferred shares (Note 17) | $ (19,378) | (28,988,737) | (29,008,115) | (29,008,115) | ||||
Redesignation of ordinary shares to Series B convertible redeemable preferred shares (in shares) (Note 17) | (38,755,020) | |||||||
Change in fair value of available-for-sale investment, net of tax of $26,101 and $49,525 in 2014 and 2015, respectively | 78,303 | 78,303 | 78,303 | |||||
Disposal of available-for-sale investment, net of tax of $23,844 and $51,782 in 2014 and 2015, respectively | (71,531) | (71,531) | (71,531) | |||||
Foreign currency translation adjustments | (59,347) | (59,347) | 3,323 | (56,024) | ||||
Capital contribution by non-controlling interest | 236,118 | 236,118 | ||||||
Deconsolidation of a subsidiary (Note 1) | (375,126) | (375,126) | ||||||
Receipt of subscription | $ 50,000 | 50,000 | 50,000 | |||||
Share-based compensation | 498,756 | 498,756 | 498,756 | |||||
Ending Balance at Dec. 31, 2014 | $ 30,622 | 6,794,536 | 154,062 | 574,682 | 7,553,902 | 730,122 | 8,284,024 | |
Ending Balance (in shares) at Dec. 31, 2014 | 61,244,980 | |||||||
Net income | 24,337,013 | 24,337,013 | 2,186,377 | 26,523,390 | ||||
Dividend distributed to non-controlling interest | (171,272) | (171,272) | ||||||
Issuance of ordinary shares in connection with business acquisition | $ 16,241 | 56,359,588 | 56,375,829 | 56,375,829 | ||||
Issuance of ordinary shares in connection with business acquisition (in shares) | 32,481,552 | |||||||
Change in fair value of available-for-sale investment, net of tax of $26,101 and $49,525 in 2014 and 2015, respectively | 148,575 | 148,575 | 148,575 | |||||
Disposal of available-for-sale investment, net of tax of $23,844 and $51,782 in 2014 and 2015, respectively | (155,347) | (155,347) | (155,347) | |||||
Foreign currency translation adjustments | (4,060,422) | (4,060,422) | (61,612) | (4,122,034) | ||||
Issuance of ordinary shares to public, net of issuance cost | $ 14,985 | 42,341,642 | 42,356,627 | 42,356,627 | ||||
Issuance of ordinary shares to public, net of issuance cost (in shares) | 29,970,000 | |||||||
Conversion of preferred share | $ 27,946 | 38,266,688 | 38,294,634 | 38,294,634 | ||||
Conversion of preferred share (in shares) | 55,890,227 | |||||||
Share-based compensation | 2,520,565 | 2,520,565 | 2,520,565 | |||||
Ending Balance at Dec. 31, 2015 | $ 89,794 | $ 146,283,019 | $ 24,491,075 | $ (3,492,512) | $ 167,371,376 | $ 2,683,615 | $ 170,054,991 | |
Ending Balance (in shares) at Dec. 31, 2015 | 179,586,759 |
Consolidated Statements of Cha8
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Changes in Shareholders' Equity | |||
Change in fair value of available-for-sale investment, tax | $ 49,525 | $ 26,101 | $ 0 |
Disposal of available for sale investment, tax | $ 51,782 | $ 23,844 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 26,523,390 | $ 14,630,140 | $ 9,050,371 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 2,064,570 | 376,666 | 84,909 |
Loss (income) from equity in affiliates | (687,225) | (78,015) | 135,892 |
Gain from disposal of investment in affiliates | (369,472) | ||
Investment income on investment securities | (2,640,136) | 376,574 | (929,575) |
Impairment loss for a held-to-maturity investment | 507,429 | 130,740 | |
Gain from deconsolidation of subsidiaries | (102,089) | ||
Share-based compensation | 2,520,565 | 498,756 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (3,130,506) | (398,224) | 740,859 |
Other receivables | (3,368,182) | (200,280) | 2,052,189 |
Other current assets | 5,641 | (490,244) | (151,621) |
Short term investments - trading securities | (357,687) | 849,979 | (1,475,986) |
Amounts due from related party | 2,473,291 | (1,445,500) | 2,380,604 |
Accrued payroll and welfare expenses | 9,998,192 | 1,312,938 | 941,186 |
Income tax payable | 8,903,337 | 1,119,832 | 2,040,012 |
Other tax payable | 3,895,991 | 572,975 | 925,254 |
Deferred revenue | 5,586,885 | 2,496,260 | 1,117,425 |
Uncertain tax position | 41,192 | 90,080 | 111,000 |
Other current liabilities | (1,546,625) | 1,383,927 | 330,628 |
Deferred revenue from related parties | 10,707,422 | 5,261,345 | 380,297 |
Deferred taxes | (5,426,928) | (1,942,465) | (427,043) |
Net cash provided by operating activities | 55,701,144 | 24,443,395 | 17,306,401 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (1,920,250) | (1,283,537) | (452,218) |
Purchase of held-to-maturity investments | (37,778,696) | (15,596,021) | (2,420,775) |
Collection of held-to-maturity investments | 36,673,936 | 3,756,322 | 1,905,931 |
Purchase of entrusted investments | (2,188,668) | (3,481,845) | |
Collection of entrusted investments | 3,340,763 | 2,873,281 | 80,760 |
Purchase of other long term investments | (1,516,607) | ||
Collection of other long term investments | 1,160,751 | ||
Purchases of available-for-sale investments | (6,833,701) | (7,046,016) | |
Proceeds from available-for-sale investments | 8,683,813 | 5,408,429 | |
Payment for investment in affiliates | (5,288,284) | (1,011,603) | (1,304,156) |
Proceeds from partial disposal of subsidiaries | 1,950 | ||
Proceeds from disposal of investment in affiliates | 1,093,384 | ||
Customer borrowing | (25,684,284) | (19,557,926) | |
Collection of customer borrowing | 549,856 | 35,067,886 | 10,092,389 |
Cash balance from acquisition of subsidiaries | 7,122,252 | ||
Prepayment for long term investment | (212,453) | ||
Advanced prepayment for acquisition | (14,612,634) | ||
Cash balance of deconsolidated subsidiary | (132,244) | ||
Net cash used in investing activities | (9,325,417) | (6,046,958) | (15,137,840) |
Cash flows from financing activities: | |||
Capital contribution from non-controlling interest shareholder | 236,118 | 625,112 | |
Proceeds from issuance of convertible redeemable preferred shares | 7,786,519 | 1,500,000 | |
Borrowing from third parties | 2,471,250 | ||
Repayment of borrowing from third parties | (2,471,250) | ||
Dividend paid to non-controlling interest holder | (171,272) | (41,633) | |
Proceeds from IPO | 49,950,000 | ||
Payment of IPO expenses | (7,323,411) | (269,962) | |
Advanced payment received from SINA for new shares issuance | 5,280,000 | ||
Collection of subscription receivable | 50,000 | ||
Net cash provided by financing activities | 47,735,317 | 7,761,042 | 2,125,112 |
Effect of exchange rate changes | (3,163,478) | 56,412 | 90,074 |
Net increase in cash and cash equivalents | 90,947,566 | 26,213,891 | 4,383,747 |
Cash and cash equivalents-beginning of the year | 31,557,233 | 5,343,342 | 959,595 |
Cash and cash equivalents-end of the year | 122,504,799 | 31,557,233 | 5,343,342 |
Supplemental disclosure of cash flow information: | |||
Cash paid for income taxes | 6,067,527 | 5,979,216 | 2,035,074 |
Cash paid for interest expenses | 14,961 | $ 15,602 | |
Non-cash investing and financing activities: | |||
Partial disposal of a subsidiary included in other receivables | 183,036 | ||
Change in fair value of available-for-sale investments | (9,013) | ||
Deferred tax effect on change in fair value of available-for-sale investment not yet sold | 2,257 | ||
Acquisition of Scepter through share settlement | (56,375,839) | ||
Conversion of Series A and B convertible redeemable preferred shares to ordinary shares | 38,294,634 | ||
Unpaid cash dividend to E-House | $ 1,154,983 | ||
Series B convertible redeemable preferred shares | |||
Non-cash investing and financing activities: | |||
Series B convertible redeemable preferred shares issued by re-designation of ordinary shares | $ 29,008,115 |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Principal Activities | |
Organization and Principal Activities | 1. Organization and Principal Activities Jupai Holdings Limited (the ‘‘Company’’), formerly Jupai Investment Group, was incorporated on August 13, 2012 in the Cayman Islands. The Company, through its subsidiaries and consolidated variable interest entity, Shanghai Jupai Investment Group Co., Ltd. (‘‘Shanghai Jupai’’ or ‘‘the VIE’’) and the VIE’s subsidiaries (collectively, the ‘‘Group’’), provides wealth management products to the high net worth individuals in the People’s Republic of China (‘‘PRC’’). The Group began offering services in 2010 through Shanghai Jupai, which was founded in the PRC on July 28, 2010 by Mr. Tianxiang Hu who holds more than 50% of voting interests since establishment. The Company was incorporated by the same shareholders of Shanghai Jupai with identical shareholdings (“the Founders”). On July 16, 2013, the Company established a wholly-owned foreign invested subsidiary, Shanghai Juxiang Investment Management Consulting Co., Ltd. (“Shanghai Juxiang”) in the PRC. On October 18, 2013, Shanghai Juxiang entered into a series of contractual arrangements (“Control Documents”, see Note 2) with Shanghai Jupai and their respective shareholders through with the Company became the primary beneficiary of Shanghai Jupai. The Company has accounted for these transactions as a reorganization of entities under common control. In conjunction with the reorganization, the Company issued Series A convertible redeemable preferred shares to a third party investor (see Note 17). The reorganization was necessary to comply with the PRC law and regulations which restrict foreign ownership of companies to engage in direct sale of mutual funds, asset management plans and market survey in China. Accordingly, the accompanying consolidated financial statements have been prepared by using historical cost basis and include the assets, liabilities, revenue, expenses and cash flows that were directly attributable to Shanghai Jupai for all periods presented. The share and per share data relating to the ordinary shares issued by the Company during the reorganization are presented as if the reorganization transactions occurred at the beginning of the first period presented. In July 2015, the Company completed its initial public offering (“IPO”) on NYSE and acquisition of E-House Investment and Reckon Capital Limited’s 100% equity interest in Scepter Pacific Limited (“Scepter”), a holding company incorporated in BVI. Scepter provides asset management services in China through a consolidated VIE, Shanghai E-Cheng Asset Management Co. Ltd.(“Shanghai E-Cheng”) in PRC (see Note 2). The Company’s significant subsidiaries as of December 31, 2015 include the following: Date of Incorporation/Acquisition Place of Incorporation Percentage of Ownership Shanghai Juxiang July16, 2013 PRC % Baoyi Investment Consulting (Shanghai) Co., Ltd (“Shanghai Baoyi”) July 16, 2015 PRC % Shanghai Jupai’s significant subsidiaries as of December 31, 2015 include the following: Date of Incorporation/acquisition Place of Incorporation Percentage of Ownership Juzhou Asset Management (Shanghai) Co., Ltd. (“Juzhou”) May17, 2013 PRC % Shanghai Jupai Yumao Fund Sales Co., Ltd. February 26, 2014 PRC % Shanghai Jupeng Asset Management Co., Ltd. (“Jupeng”) June 8, 2015 PRC % Shanghai E-Cheng’s significant subsidiaries as of December 31, 2015 include the following: Date of Acquisition Place of Incorporation Percentage of Ownership Shanghai Yidexin Equity Investment Management Co., Ltd (“Yidexin”) July 16, 2015 PRC % Shanghai Yidezeng Equity Investment Center (“Yidezeng”) July 16, 2015 PRC % Shanghai Yidezhen Equity Investment Center (“Yidezhen”) July 16, 2015 PRC % Shanghai Yidezhao Equity Investment Center (“Yidezhao”) July 16, 2015 PRC % |
Summary of Principal Accounting
Summary of Principal Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Principal Accounting Policies | |
Summary of Principal Accounting Policies | 2. Summary of Principal Accounting Policies (a) Basis of Presentation The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). (b) Principles of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries for which the Company is the ultimate primary beneficiary. As of December 31, 2015, all transactions and balances among the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to: govern the financial and operating policies; appoint or remove the majority of the members of the board of directors; cast a majority of votes at the meeting of the board of directors. U.S. GAAP provides guidance on the identification of VIE and financial reporting for entities over which control is achieved through means other than voting interests. The Group evaluates each of its investments to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. As foreign-invested companies are restricted to engage in direct sale of mutual funds, asset management plans and market survey under the current PRC laws and regulations, the Company’s PRC subsidiary, Shanghai Juxiang as foreign-invested company, does not meet all such requirements and therefore is not permitted to engage in such business in China. Therefore, the Company decided to conduct such business in China through Shanghai Jupai and its subsidiaries which are PRC domestic companies substantially beneficially owned by the Founders. Since the Company does not have any equity interests in Shanghai Jupai, in order to exercise effective control over its operations, the Company, through its wholly owned subsidiary Shanghai Juxiang, entered into a series of contractual arrangements, or Control Documents with Shanghai Jupai and its shareholders (“Jupai VIE”), pursuant to which the Company is entitled to receive effectively all economic benefits generated from Shanghai Jupai shareholders’ equity interests in it. Since the Company acquired Scepter in July 2015, Scepter, its subsidiaries, Shanghai E-Cheng and Shanghai E-Cheng’s subsidiaries was included in the consolidated financial statements. Scepter is engaged in asset management service business. Foreign-invested enterprises incorporated in the PRC are not expressly prohibited from providing asset management services in PRC. However, according to local business practice, as a general partner of a fund, Scepter must invest as a limited partner before the fund is established. Some investments of the fund managed by the Scepter are in the foreign-invested enterprise prohibited, or not encouraged industries, which requires all investors not to be foreign-invested enterprises. Therefore Scepter provides asset management services through its VIE entities. To provide Scepter effective control over and the ability to receive substantially all of the economic benefits of its VIE and its subsidiaries, Scepter’s wholly owned subsidiary Shanghai Baoyi, the “Foreign Owned Subsidiary” entered into a series of contractual arrangements with Shanghai E-Cheng, the “VIE” and its respective shareholders, respectively. (Hereafter, the VIE structure under Scepter is called “Scepter VIE”.) The agreements of Jupai VIE and Scepter VIE that provide the Company effective control over the VIE include: (i) Voting Rights Proxy Agreement (1) Jupai VIE: Each shareholder of Shanghai Jupai has executed a power of attorney to grant Shanghai Juxiang the power of attorney to act on his or her behalf on all matters pertaining to Shanghai Jupai and to exercise all of his or her rights as a shareholder of the Shanghai Jupai, including but not limited to convene, attend and vote at shareholders’ meetings, designate and appoint directors and senior management members. The proxy agreement will remain in effect unless Shanghai Juxiang terminates the agreement by giving a 30-day prior written notice or gives its consent to the termination by Shanghai Jupai. (2) Scepter VIE: Each of the shareholders of Shanghai E-Cheng irrevocably granted any person designated by Shanghai Baoyi the power to exercise all voting rights to which he will be entitled to as shareholder of Shanghai E-Cheng at that time, including the right to declare dividends, appoint and elect board members and senior management members and other voting rights. Each shareholder voting right proxy agreement has a term of twenty years, unless it is early terminated by all parties in writing or pursuant to provision of this agreement. The term of the agreement will be automatically extended for one year upon the expiration, if Shanghai Baoyi gives the other Parties written notice requiring the extension thereof and the same mechanism will apply subsequently upon the expiration of each extended term. (ii) Call Option Agreement (1) Jupai VIE: The shareholders of Shanghai Jupai granted Shanghai Juxiang or its designated representative(s) an irrevocable and exclusive option to purchase their equity interests or assets in Shanghai Jupai when and to the extent permitted by PRC law. Shanghai Juxiang or its designated representative(s) has sole discretion as to when to exercise such options, either in part or in full. Without Shanghai Juxiang’s written consent, the shareholders of Shanghai Jupai shall not transfer, donate, pledge, or otherwise dispose any equity interests of Shanghai Jupai in any way. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time when the option is exercised. The agreement can be early terminated by Shanghai Juxiang, but not by Shanghai Jupai or its shareholders. (2) Scepter VIE: Each of shareholders of Shanghai E-Cheng has entered into an Exclusive Call Option Agreement with Baoyi. Pursuant to these agreements, each of the shareholders of Shanghai E-Cheng has granted an irrevocable and unconditional option to Shanghai Baoyi or its designees to acquire all or part of such shareholder’s equity interests in Shanghai E-Cheng at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai E-Cheng will be equal to the registered capital of Shanghai E-Cheng, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai E-Cheng irrevocably and unconditionally granted Baoyi an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai E-Cheng. The exercise price for purchasing the assets of Shanghai E-Cheng will be equal to its respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai Baoyi or its designees. The agreements that transfer economic benefits to the Company include: (i) Consulting Services Agreement, Operating Agreement and Exclusive Support Agreement (1) Jupai VIE: Shanghai Jupai engages Shanghai Juxiang as its exclusive technical and operational consultant and under which Shanghai Juxiang agrees to assist in arranging the financial support necessary to conduct Shanghai Jupai’s operational activities . Shanghai Jupai shall not seek or accept similar services from other providers without the prior written approval of Shanghai Juxiang. The agreements will be effective as long as Shanghai Jupai exists. Shanghai Juxiang may terminate this agreement at any time by giving a prior written notice to Shanghai Jupai. (2) Scepter VIE: Pursuant to an Exclusive Support Agreement between Shanghai Baoyi and Shanghai E-Cheng, Shanghai Baoyi provides Shanghai E-Cheng with a series of consultancy services on an exclusive basis and is entitled to receive related fees. The term of this Exclusive Support Agreement will expire upon dissolution of Shanghai E-Cheng. Unless expressly provided by this agreement, without prior written consent of Shanghai Baoyi, Shanghai E-Cheng may not engage any third party to provide the services offered by Shanghai Baoyi under this agreement. (ii) Equity Interest Pledge Agreement (1) Jupai VIE: The shareholders of Shanghai Jupai pledged all of their equity interests in Shanghai Jupai to Shanghai Juxiang as collateral to secure their obligations under the above agreement. If the shareholders of Shanghai Jupai or Shanghai Jupai breach their respective contractual obligations, Shanghai Juxiang, as pledgee, will be entitled to certain rights, including the right to dispose the pledged equity interests. Pursuant to the agreement, the shareholders of Shanghai Jupai shall not transfer assign or otherwise create any new encumbrance on their respective equity interest in Shanghai Jupai without prior written consent of Shanghai Juxiang. This pledge will remain effective until all the guaranteed obligations are performed. The equity pledges of Shanghai Jupai have been registered with the relevant local branch of the State Administration for Industry and Commerce, or SAIC. (2) Scepter VIE: Each of the shareholders of Shanghai E-Cheng has also entered into an equity pledge agreement with Shanghai Baoyi. Pursuant to which these shareholders pledged their respective equity interest in Shanghai E-Cheng to guarantee the performance of the obligations of Shanghai E-Cheng. If Shanghai E-Cheng or its shareholders breach any of their respective obligations under any of these agreements. Shanghai Baoyi, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, each shareholder of Shanghai E-Cheng cannot transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai E-Cheng without prior written consent of Shanghai Baoyi. The equity pledge right enjoyed by Shanghai Baoyi will expire when shareholders of Shanghai E-Cheng have fully performed their respective obligations under the above agreements. The equity pledges of Shanghai E-Cheng have been registered with the relevant local branch of SAIC. (iii) Loan Agreement for Scepter VIE. Under the Loan Agreement among the shareholders of Shanghai E-Cheng and Shanghai Baoyi, Shanghai Baoyi granted an interest-free loan to the shareholders of Shanghai E-Cheng, solely for their purchase of the equity interests of Shanghai E-Cheng. The loan is interest free and the term of the loan is (i) the expiration of 20 years from the date of the loan agreement, (ii) the expiration of Shanghai Baoyi’s operation term or (iii) the expiration of Shanghai E-Cheng’s operation term whichever is the earliest. Under the above agreements, the shareholders of Shanghai Jupai/Shanghai E-Cheng irrevocably granted Shanghai Juxiang/Shanghai Baoyi the power to exercise all voting rights to which they were entitled. In addition, Shanghai Juxiang/Shanghai Baoyi have the option to acquire all of the equity interests in Shanghai Jupai/Shanghai E-Cheng, to the extent permitted by the then-effective PRC laws and regulations, for nominal consideration. Finally, Shanghai Juxiang/Shanghai Baoyi is entitled to receive service fees for certain services to be provided to Shanghai Jupai/Shanghai E-Cheng. The Call Option Agreement and Voting Rights Proxy Agreement provide the Company effective control over the VIEs and their subsidiaries, while the Equity Interest Pledge Agreements secure the obligations of the shareholders of Shanghai Jupai and Shanghai E-Cheng under the relevant agreements. Because the Company, through Shanghai Juxiang and Shanghai Baoyi, has (i) the power to direct the activities of Shanghai Jupai and Shanghai E-Cheng that most significantly affect the entities’ economic performance and (ii) the right to receive substantially all of the benefits from Shanghai Jupai and Shanghai E-Cheng, the Company is deemed the primary beneficiary of Shanghai Jupai and Shanghai E-Cheng. Accordingly, the Company has consolidated the Shanghai Jupai and Shanghai E-Cheng’s financial results of operations, assets and liabilities, and cash flows in the Company’s consolidated financial statements. The Company believes that the contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including: · Shanghai Jupai and Shanghai E-Cheng and their shareholders may have or develop interests that conflict with the Group’s interests, which may lead them to pursue opportunities in violation of the aforementioned contractual arrangements. · Shanghai Jupai and Shanghai E-Cheng and their shareholders could fail to obtain the proper operating licenses or fail to comply with other regulatory requirements. As a result, the PRC government could impose fines, new requirements or other penalties on the VIEs or the Group, mandate a change in ownership structure or operations for the VIEs or the Group, restrict the VIEs or the Group’s use of financing sources or otherwise restrict the VIEs or the Group’s ability to conduct business. · The aforementioned contractual agreements may be unenforceable or difficult to enforce. The equity interests under the Equity Interest Pledge Agreements have been registered by the shareholders of Shanghai Jupai and Shanghai E-Cheng with the relevant office of the administration of industry and commerce, however, the VIEs or the Group may fail to meet other requirements. Even if the contractual agreements are enforceable, they may be difficult to enforce given the uncertainties in the PRC legal system. · The PRC government may declare the aforementioned contractual arrangements invalid. They may modify the relevant regulations, have a different interpretation of such regulations, or otherwise determine that the Group or the VIEs have failed to comply with the legal obligations required to effectuate such contractual arrangements. The following amounts and balances of Shanghai Jupai and Shanghai E-Cheng and their subsidiaries were included in the Group’s consolidated financial statements after the elimination of intercompany balances and transactions: As of December 31, 2014 2015 $ $ Cash and cash equivalents Short-term investments Short-term entrusted investment — Accounts receivable, net of allowance for doubtful accounts Trade and other receivables Amounts due from related parties Customer Borrowing — Deferred tax assets Other current assets Long-term investments — Long-term entrusted investment — Advance prepayment for acquisition — Investment in affiliates Property and equipment, net Deferred tax assets— non-current — Total assets Accrued payroll and welfare expenses Income tax payable Other tax payable Dividend payable — Deferred revenue - current from related parties Deferred revenue - current Other current liabilities Non-current uncertain tax position liabilities Deferred revenue — non-current from related parties Deferred revenue — non-current Total liabilities Year ended December 31, 2013 2014 2015 $ $ $ Net revenues Related party Third party Operating cost and expenses Net income attributable to Jupai shareholders Cash flows generated from operating activities: Cash flows (used in) generated from investing activities: ) ) Cash flows generated from (used in) financing activities: ) The VIEs contributed an aggregate of 68%, 11% and 40% of the consolidated net revenues for the years ended December 31, 2013, 2014 and 2015, respectively and an aggregate of 42%, 12% and 32% of the consolidated net income for the years ended December 31, 2013, 2014 and 2015, respectively. As of December 31, 2014 and 2015, the VIEs accounted for an aggregate of 42% and 33%, respectively, of the consolidated total assets. There are no consolidated assets of the VIEs and their subsidiaries that are collateral for the obligations of the VIEs and their subsidiaries and can only be used to settle the obligations of the VIEs and their subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs or entrustment loans to the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutory reserve and their share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 16 for disclosure of restricted net assets. (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ materially from such estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include assumptions used to determine the liability for uncertain tax positions, valuation allowance for deferred tax assets, fair value measurement of underlying investment portfolios of the funds that the Group invests, assumptions related to the consolidation of entities in which the Group holds variable interests, fair value estimates of investments, impairment of investment in affiliates, assumptions related to the valuation of share-based compensation, including estimation of related forfeiture rates, useful lives and impairment of long-lived assets, valuation and impairment of goodwill, valuation and impairment of intangible assets, allowance for doubtful accounts of accounts receivable and entrusted investments. (d) Concentration of Credit Risk The Group is subject to potential significant concentrations of credit risk consisting principally of cash and cash equivalents, accounts receivable, amounts due from related parties and investments. All of the Group’s cash and cash equivalents and a majority of investments are held with financial institutions that Group management believes to be of high credit quality. All revenues were generated within China and Hong Kong. The following product providers accounted for 10% or more of revenues for the years ended December 31, 2013, 2014 and 2015: For Year Ended December 31, 2013 2014 2015 $ $ $ A — — B — — (e) Customer borrowings The Group historically provided some short term borrowings to customers who are temporarily short of sufficient funds for purchasing the financial products promoted by the Group. The borrowings were extended to bridge the gap between the maturity of an earlier product and purchase of a new one. The borrowings bear no interest and are due within one year. The borrowing that the Group provided are not secured and are not required for additional collateral. The Group assessed the collectability of the customer borrowings based on factors surrounding the credit risk of specific customers including the length of time the borrowings are passing due, previous loss history and the counterparty’s current ability to fulfill its obligation, and didn’t provide any allowance for such borrowings due to the remote possibility of collection failure. There were no short term loans overdue as of December 31, 2014. The cash flows associated with customer borrowings for the years ended December 31, 2013, 2014 and 2015 are presented as investing cash flows in the statements of cash flows. The Group stopped providing short term borrowings to customers since August 2014 and no amounts were outstanding as of December 31, 2015. (f) Entrusted investments In the past, the Group sometimes purchased the same financial product with its customers using its own funds but under the customers’ name, aiming to pursue higher return. The concerned customers are obliged to return the principle and gain to the Group at the maturity of the financial products. The Group bears both the product risk and the credit risk. The Group assessed the collectability of such entrusted investment based on factors surrounding the credit risk of specific customers like the length of time the investments are past due, previous loss history and the counterparty’s current ability to fulfill its obligation and did not provide any allowance for such investment due to the remote possibility of collection failure. The Group has terminated such practice of co-investment since August 2014. (g) Investments in Affiliates Affiliated companies are entities over which the Group does not control. For equity investment over which the Company does not have significant influence, cost method accounting is used. The Group accounts for common-stock-equivalent equity investments in entities over which it has significant influence but does not own a majority voting interest or otherwise control using the equity method. The Group generally considers an ownership interest of 20% or higher to represent significant influence. Under the equity method, the Group’s share of the post-acquisition profits or losses of affiliated companies is recognized in the statements of operations and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. When the Group’s share of losses in an affiliated company equals or exceeds its carrying amount of the investment in the affiliated company, the Group does not recognize further losses, unless the Group has guaranteed the obligations of the affiliated company or is otherwise committed to provide further financial support for the affiliated company. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group recorded an impairment loss of $131,165 related to Shanghai Juxi Asset Management Partnership Enterprise(“Juxi”) in loss from equity in affiliates in the consolidated statement of operations for the year ended December 31, 2013.The Group did not record any impairment loss for the year ended December 31, 2014 and 2015. The Group also considers it has significant influence over the funds of funds and real estate funds that it serves as general partner, and the Group’s ownership interest in these funds as limited partner is generally much lower than 5%. These funds are not consolidated by the Group based on the facts that the Group does not have control over the funds given substantive kick-out rights held by unrelated limited partners that allow them to remove the general partner without cause, and/or substantive participating rights that allow them to participate in certain financial and operating decisions of the limited partnership in the ordinary course of business. The equity method of accounting is accordingly used for investments by the Group in these funds. In addition, the investee funds meet the definition of an Investment Company and are required to report their investments at fair value. The Group records its equity pick-up based on its percentage ownership of the investee funds’ net income one quarter in arrears to enable it to have more time to collect and analyze the investments’ operating results. (h) Fair Value of Financial Instruments The Group records certain of its financial assets at fair value on a recurring basis. Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model- derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. (i) Business combinations Business combinations are recorded using the purchase method of accounting and, accordingly, the acquired assets and liabilities are recorded at their fair market value at the date of acquisition. The consideration of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities incurred by the Group to the sellers and equity instruments issued. Any excess of acquisition cost over the fair value of the acquired assets and liabilities, including identifiable intangible assets, is recorded as goodwill. Transaction costs directly attributable to the acquisition are expensed as incurred. (j) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased. (k) Investments The Group invests in debt securities and accounts for the investments based on the nature of the products invested, and the Group’s intent and ability to hold the investments to maturity. The Group’s investments in debt securities include trust products, asset management plans and real estate funds that have a stated maturity and normally pay a prospective fixed rate of return. The Group classifies the investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their remaining contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value with changes in fair value recognized in earnings. Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value included in other comprehensive income. The Group records investments in the equity of private equity funds under the cost method when they do not qualify for the equity method. Gains or losses are realized when such investments are sold. The Group reviews its investments, except for those classified as trading securities, for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent and ability to hold the investment to determine whether an other-than-temporary impairment has occurred. The Group recognizes other-than-temporary impairment in earnings if it has the intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings. If the investment’s fair value is less than the cost of an investment and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment. (l) Non-controlling interests A non-controlling interest in a subsidiary of the Group represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Group. Non-controlling interests are presented as a separate component of equity in the consolidated balance sheet and earnings and other comprehensive income are attributed to controlling and non-controlling interests. (m) Property and Equipment, net Property and equipment is stated at cost less accumulated depreciation, and is depreciated using the straight-line method over the following estimated useful lives: Estimated Useful Lives in Years Leasehold improvements Shorter of the lease term or expected useful life Furniture, fixtures, and equipment 3—5 years Motor Vehicles 5 years Gains and losses from the disposal of property and equipment are included in income from operations. (n) Revenue Recognition The Group derives revenue primarily from one-time commissions and recurring service fees paid by product providers for whom the Group distributes wealth management products, and recurring management fee and carried interest paid by funds the Group manages. The Group recognizes revenues when there is persuasive evidence of an arrangement, service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded, net of sales related taxes and surcharges. Deferred revenues are recognized when payments are received in advance of the revenue being earned. The Group sometimes engages third party agents in promoting financial products and pays a channel fee accordingly, in which the Group recognizes revenue on a net basis by deducting the channel fee it pays to the third party agents. Through August 2014, there were also instances where the Group provides short-term loans to the customers who are temporarily short of sufficient funds in purchasing the financial products (see Note 2(e)). Commissions received on the financial products purchased by customers using short-term loans provided by the Company are deferred and not recognized as revenue until the loans are fully collected from the customers. One-time Commissions The Group enters into one-time commission agreements with product providers or underlying corporate borrowers, which specifies the key terms and conditions of the arrangement. Such agreements do not include rights of return, credits or discounts, rebates, price protection or other similar privileges. Upon establishment of a wealth management product, the Group earns a one-time commission from product providers or underlying corporate borrowers, calculated as a percentage of the wealth management products purchased by its clients. The Group defines the “establishment of a wealth management product” for its revenue recognition purpose as the time when both of the following two criteria are met: (1) the Group’s client has entered into a purchase or subscri |
Net Income per Share
Net Income per Share | 12 Months Ended |
Dec. 31, 2015 | |
Net Income per Share | |
Net Income per Share | 3. Net Income per Share The following table sets forth the computation of basic and diluted net income per share attributable to ordinary shareholders: 2013 2014 2015 Net income attributable to ordinary shareholders—basic $ $ $ Amounts allocated to convertible redeemable preferred shares for participating rights to dividends $ $ $ Net income attributable to ordinary shareholders—diluted $ $ $ Weighted average number of ordinary shares outstanding—basic Plus: convertible redeemable preferred shares — Plus: share options — — Weighted average number of ordinary shares outstanding—diluted Basic net income per share Diluted net income per share Diluted earnings per share do not include the following instruments as their inclusion would have been anti-dilutive: As of December 31, 2013 2014 2015 Share options — Restricted shares — — Convertible redeemable preferred shares — — Total — |
Investments
Investments | 12 Months Ended |
Dec. 31, 2015 | |
Investments. | |
Investments | 4. Investments The following table summarizes the Group’s investment balances: As of December 31, 2014 2015 $ $ Short-term investments - Trading securities investments Trust products - Held-to-maturity investments Trust products Asset management plans Real estate funds — - Available-for-sale investments — Asset management plans — Real estate funds — Total short-term investments Long-term investments - Held-to-maturity investments Trust products Asset management plans Real estate funds - Other long-term investments — Total long-term investments Total investments Trading securities investments consist of an investment in a trust product that could be redeemed at any time. The investment is recorded at fair value on a recurring basis. The fair value is from unadjusted quoted price in active market and therefore is classified as Level 1 measurement. The Group recorded investment income on these investments of $163,004, $200,214 and $602,808 for the years ended December 31, 2013, 2014 and 2015, respectively. Held-to-maturity investments consist of investments in trust products, asset management plans and real estate funds that have stated maturity and normally pay a prospective fixed rate of return, and are carried at amortized cost. The Group recorded investment income on trust products of $517,346, $363,750 and $483,166, on asset management plans of $97,681, $829,407 and $796,460 and on real estate funds of $314,548, $100,395 and $374,142 for the years ended December 31, 2013, 2014 and 2015, respectively. Long-term held-to-maturity investments amounting to $6,908,212 will mature in 2017. The Group recorded an impairment loss due to credit loss of nil, $130,740 and $507,429 for years ended December 31, 2013, 2014 and 2015, respectively for held-to-maturity investments. The gross unrecognized gain was $434,680 and $141,052 as of December 31, 2014 and 2015, respectively, representing the difference between the estimated fair value (Note 18) and carrying amount of the held-to-maturity investments. Available-for-sale investments consist of an investments in an asset management plan that have stated maturity and the Group doesn’t intend to hold it to maturity. Such investment is initially recorded at investment cost and subsequently re-measured at fair value at each period end with changes in fair value recognized in accumulated other comprehensive income included in shareholders’ equity. The cost basis and fair value of the asset management plan product was $1,143,978 and nil as of December 31, 2014 and 2015, respectively, and the cost basis and fair value of the real estate fund product was $499,289 and nil as of December 31, 2014 and 2015, respectively. The Group recorded investment income on these products of nil and $206,845 for the year ended December 31, 2014 and 2015, respectively. There was no unrealized loss for these products recorded in accumulated other comprehensive income as of December 31, 2014 and 2015. There was no other-than-temporary impairment loss recognized in 2014 and 2015, respectively. The fair value was determined by using discounted cash flow model based on contractual cash flow and a discount rate of prevailing market yield for products with similar terms as of the measurement date and is classified within Level 2 measurement. There were no transfers of assets among trading, available-for-sale and held-to-maturity classifications during the period presented. Other long-term investments consist of investments in real estate and private equity fund as a limited partner with less than 3% equity interest. The investment in real estate fund and private equity fund amounted to $1,539,978 and $1,539,978 as of December 31, 2015, respectively. |
Investment in affiliates
Investment in affiliates | 12 Months Ended |
Dec. 31, 2015 | |
Investment in affiliates | |
Investment in affiliates | 5. Investment in affiliates The following table summarizes the Group’s balances of investment in affiliates: As of December 31 2014 2015 $ % $ % Equity method Shanghai Wuling Investment Center (“Wuling Center”) — — % Shanghai Guochen Equity Management Co., Ltd (“Guochen”) — — % Shenzhen Guojinwenying Fund Management Co, Ltd(“Guojinwenying”) % % Shanghai JupaiHehui Asset management Co., Ltd. (‘‘Hehui’’) % % Others Total equity method investments Cost method Institutions Quotation System Co., Ltd (“ZhongZheng”) — — % Shanghai Star Investment Co., Ltd.(“Star Investment”) — — % Others Total cost method investments Total investments The investments above are accounted for using equity method of accounting or cost method accounting. Total equity method investment was $2,039,549 and $5,348,785 as of December 31, 2014 and 2015, respectively. The Group obtained an investment in Wuling Center through the Scepter acquisition in July 2015. Shanghai Yidezhen Equity Investment Center (“Yidezhen”) held 1.1% equity interest in Wuling Center as a general partner as of December 31, 2015. Wuling Center is not consolidated by the Group as the Group does not control Wuling Center given that unrelated limited partners have substantive kick-out rights that allow them to remove the general partner without cause. Yidezhen acts as general partner in Wuling, which provides the Group with significant influence over the operating and financial policies of the investee, so the Group accounts for this investment by equity method. Guochen was acquired as a result of Scepter acquisition in July 2015. In 2014, Shanghai Yidezhao Equity Investment Center (“Yidezhao”) formed Guochen with several unrelated third party investors and contributed RMB2,500,000 ($408,563) for a 8.3% equity interest in Guochen. Yidezhao can exercise significant influence through board representation and, as such, the Group accounted for the investment using equity method of accounting. In 2014, the Group invested RMB 4,500,000 for a 45% equity interest in Guojinwenying and accounted for the investment using the equity method of accounting. Its main operating business is fund management. Hehui used to be a consolidated subsidiary of the Group in which the Group owned 65% equity interest. In September 2014, the Group disposed of a 16% equity interest in Hehui to an unrelated third party, determined the Group no longer controlled the entity and as a result deconsolidated Hehui. The remaining 49% equity interest in Hehui was remeasured at fair value and has been subsequently accounted for as equity method investment. In addition to the above, the Group also held investments in several fund management companies, none of which is individually material. Total cost method investment was $245,138 and $6,229,210 as of December 31, 2014 and 2015 respectively. In 2015, the Group invested RMB 30,000,000 ($4,884,243) for 1% equity interest in ZhongZheng which is a financial institution offering quotation, issue and transfer services in China, and accounted for the investment under the cost method of accounting. The Group obtained an investment in Shanghai Star Investment Co., Ltd as a result of the Scepter acquisition in July 2015. Shanghai Yidezeng Equity Investment Center (“Yidezeng”), the subsidiary of Scepter held 9.0% equity interest in Star Investment as of December 31, 2015. The Group accounts for this investment under the cost method of accounting as it does not have significant influence over the operating or financial policies of the investee. |
Acquisitions of Subsidiaries
Acquisitions of Subsidiaries | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions of Subsidiaries | |
Acquisitions of Subsidiaries | 6. Acquisitions of Subsidiaries In July 2015, the Company acquired 100% of Scepter’s equity interest from E-House Investment and Reckon Capital Limited upon closing of the Company’s IPO, in exchange for 32,481,552 of the Company’s ordinary shares. The following table summarizes the purchase consideration to acquire Scepter: Amount $ Fair value of Company’s shares issued * Replacement of Scepter’s share options (Note 13) Consideration * The fair value of the 32,481,552 ordinary shares issued by the Company was based on the IPO offering price of the Company’s American depositary shares (“ADS”). The purchase price has been allocated as follows: Amount Amortization $ Period Cash and cash equivalents Other current assets Long-term investments Other long-term assets Income tax payable ) Other current liabilities ) Intangible assets acquired: — Contract Backlog 3.5 year Goodwill Deferred tax liabilities ) The acquisition was accounted for as a purchase transaction, and accordingly, the assets and liabilities of the acquired entity were recorded at their estimated fair values at the date of acquisition. The primary items that generated the goodwill were the acquired assembled workforce, which is not qualified as an intangible asset. The goodwill is not deductible for tax purposes. The transaction costs directly attributable to the acquisition were not material and were expensed as incurred. The amounts of revenue and earnings of Scepter since the acquisition date included in the consolidated income statement for the reporting period is as follows: Since the acquisition date 2015 $ Revenue Net income attributable to Jupai Pro forma results (Unaudited) The following table summarizes unaudited pro forma financial information for the years ended December 31, 2014 and 2015, as if the Scepter acquisition had occurred on January 1, 2014. These pro forma results have been prepared for informational purposes only based on the Company’s best estimate and are not indicative of the results of operations that would have been achieved had the acquisition occurred as of January 1, 2014 and 2015. Year ended December 31, (In thousands of U.S. dollars) 2014 2015 $ $ Revenues Net income attributable to Jupai |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment, Net | |
Property and Equipment, Net | 7. Property and Equipment, Net Property and equipment, net consists of the following: As of December 31, 2013 2014 2015 $ $ $ Leasehold improvements Furniture, fixtures and equipment Motor Vehicles — — Total Accumulated depreciation ) ) ) Property and equipment, net Depreciation expense was $84,909, $358,407 and $793,991 for the years ended December 31, 2013, 2014 and 2015, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net | |
Intangible Assets, Net | 8. Intangible Assets, Net Intangible assets subject to amortization are comprised of the following: As of December 31, 2015 $ Customer contracts Less: Accumulated amortization ) Intangible assets subject to amortization, net Amortization expense was nil, nil and $1,270,579 for the years ended December 31, 2013, 2014 and 2015, respectively. The Group expects to record amortization expense of $2,772,171, $2,772,171, $2,772,171 and $115,508 for the years ending December 31, 2016, 2017, 2018 and 2019, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill | |
Goodwill | 9. Goodwill The movement in carrying amount of goodwill is as follows: $ Balance as of January 1, 2014 and December 31, 2014 — Addition for acquisitions Balance as of December 31, 2015 The Group performed the annual impairment analysis as of the balance sheet date. There has been no impairment recognized during the periods presented. |
Prepayment for acquisition
Prepayment for acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Prepayment for acquisition | |
Prepayment for acquisition | 10. Prepayment for acquisition As of December 31, 2015, the Group prepaid $6,775,902 and $5,168,166 to the existing individual shareholders and Shanghai Kushuo Information Technology Co., Ltd (a subsidiary of E-house and considered as our related party), respectively, as a down payment to acquire 71% equity interests in Shanghai Runju Financial Information Services Co. Ltd (“Runju”) (refer to Note 22). In addition, the Group prepaid $2,668,566 to the existing individual investors for 78% equity interests in Yixun Internet Finance Information Service Co., Ltd (“Yixun”). (refer to Note 22) |
Deferred revenue
Deferred revenue | 12 Months Ended |
Dec. 31, 2015 | |
Deferred revenue | |
Deferred revenue | 11. Deferred revenue Deferred revenues are recognized when payments are received in advance of revenue is earned. Certain contracts require that a portion of the payment be deferred until the end of the wealth management product’s life or other specified contingency. In such instances, the Group defers the contingent amount until the contingency has been resolved. If the contingency is contracted to be resolved within one year period, the deferred revenue is classified as short-term liabilities. Otherwise, it is classified as long-term liabilities. Deferred revenue from related parties was $5,419,758 and $17,626,688 as of December 31, 2014 and 2015 respectively. As of December 31, 2015, out of the total deferred revenue from related parties, $12,897,658 is expected to be recognized within twelve months and therefore, classified within current liabilities. The remaining balance of $4,729,030 is expected to be recognized as revenue after one year and therefore classified within non-current liabilities. Deferred revenue from third parties was $3,815,888 and $9,504,659 as of December 31, 2014 and 2015 respectively. As of December 31, 2015, $8,956,195 was expected to be earned within a one year period and $548,464 was to be expected to be earned after one year. |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2015 | |
Dividends | |
Dividends | 12. Dividends In June 2014, the Shanghai E-Cheng’s subsidiaries (Yidezeng, Yidezhen, and Yidezhao) declared a cash dividend on the accumulated undistributed earnings to the original shareholders of these entities. Scepter recorded a dividend payable of $5,119,632 for the net amount to be distributed to the shareholders, $3,964,649 of which was paid in 2014 and the residual was paid in January 2016. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Share-Based Compensation. | |
Share-Based Compensation | 13. Share-Based Compensation In July 2014, the Group adopted the 2014 Share Incentive Plan (“the 2014 Plan”), which allows the Group to offer a variety of share-based incentive awards to employees, officers, and directors. The maximum number of shares that may be issued pursuant to all awards under the 2014 Plan shall initially be 17,570,281 ordinary shares, and will be increased automatically by 5% of the then total outstanding shares on an as-converted fully diluted basis on each of the third, sixth and ninth anniversaries of the effective date of the 2014 Plan. In December 2015, the Group amended the 2014 Plan to increase the number of shares reserved for future awards under the 2014 Plan by 9,367,739 ordinary shares to 26,938,020 ordinary shares. Share Options : On July 1, 2014 and April 2, 2015, the Group granted 12,056,000 and 1,061,600 options to purchase ordinary shares to certain employees at an exercise price of $0.48 and $1.00 per share, respectively. The options expire ten years from the date of grant and vest ratably at each grant date anniversary over a period of three years. Replacement of the Company’s option for Scepter’s option (“Options Replacement Program”). Effective upon the Company’s IPO and in connection with its acquisition of Scepter (“Replacement Date”), the Company exchanged 2,525,000 of its options (“Replacement Options”) under the 2014 Plan for the 505,000 of the options (“Replaced Options”) that had been previously granted to certain employees of Scepter and E-House under Scepter’s 2014 Share Incentive Plan (“Scepter Plan”), with other terms unchanged. The Company capitalized $2,239,909 as part of the cost of acquiring Scepter in regard to the Options Replacement Program, which the Company computed as the sum of (1) the Replacement Date fair value of the Replaced Options granted to the employees of E-House, and (2) the fair value of the Replaced Options granted to the employees of Scepter on the Replacement Date multiplied by the ratio of pre-acquisition services to the requisite service period of such Replaced Options, which is the same as the requisite service period of the Replacement Options. The amount of $600,761, which represented the difference between the total fair value of the Replacement Options granted to employees of Scepter on the Replacement Date and the amount capitalized as part of the cost of acquiring Scepter will be recognized over the remaining requisite service period of approximately 1.7 years. The Group used the binomial model to estimate the fair value of options using the following assumptions: July 1, 2014 April 2, 2015 July 16, 2015 Risk-free rate of return % % % Contractual life of option 10 years 10 years 10 years Estimated volatility rate % % % Expected dividend yield % % % Fair value of underlying ordinary shares The Group estimated the risk free interest rate based on the yield to maturity of U.S. treasury bonds denominated in USD and adjusted for country risk premium of PRC at the option valuation date. The expected volatility at the date of grant date and option valuation date was estimated based on the annualized standard deviation of the daily return embedded in historical share prices of comparable peer companies with a time horizon close to the expected expiry of the term. The Group has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. Prior to the Company’s IPO, the estimated fair value of the ordinary shares underlying the options as of the grant date was determined based on a contemporaneous valuation, which used management’s best estimation for projected cash flows as of the valuation date. Subsequent to July 16, 2015, the Group uses the current share price as the fair value of underlying ordinary shares. The Company recorded compensation expense of nil, $498,756 and $2,520,565 for the years ended December 31, 2013, 2014 and 2015. There were no options exercised during the years ended December 31, 2014 and 2015, respectively. A summary of option activity under the 2014 Plan during the year ended December 31, 2015. Number of Options Weighted Average Exercise Price Remaining Contractual Term Aggregate Intrinsic Value of Options $ $ Outstanding, as of January 1, 2015 — — Granted — — Replacement under the Options Replacement Program — — Forfeited ) — — Outstanding, as of December 31, 2015 Vested and expected to vest as of December 31, 2015 Exercisable as of December 31, 2015 — — — — As of December 31, 2015, there was $3,428,129 of total unrecognized compensation expense related to unvested share options granted under the 2014 Plan. That cost is expected to be recognized over a weighted-average period of 1.6 years. Non-vested restricted shares: On August 26, 2015, the Company granted 2,680,400 restricted shares to certain senior management and independent directors. The fair value of the restricted shares on grant date is $ 1.45. The restricted shares vest ratably at each grant date anniversary over a period of three years. A summary of restricted share activity under the 2014 Plan during the year ended December 31, 2015. Number of Shares Weighted Average Grant-date Fair Value Unvested, as of January 1, 2015 — Granted Forfeited — Unvested, as of December 31, 2015 The total fair value of non-vested restricted shares vested in 2015 was $3,886,580. The fair value of non-vested restricted shares was computed based on the fair value of the Group’s ordinary shares on the grant date. The Company recorded compensation expense of 623,558 for the year ended December 31, 2015. As of December 31, 2015, there was $3,263,022 of total unrecognized compensation expense related to unvested restricted shares granted under the 2014 Plan. That cost is expected to be recognized over a weighted-average period of 2.5 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 14. Income Taxes Cayman Islands and British Virgin Islands (“BVI”) Under the current laws of the Cayman Islands and BVI, the Company is not subject to tax on its income or capital gains. In addition, the Cayman Islands and BVI do not impose withholding tax on dividend payments. Hong Kong Under the current Hong Kong Inland Revenue Ordinance, our subsidiaries established in Hong Kong are subject to 16.5% income tax on their taxable income generated from operations in Hong Kong. In addition, payments of dividends from our Hong Kong subsidiaries to us are not subject to any Hong Kong withholding tax. PRC Under the Law of the People’s Republic of China on Enterprise Income Tax (“EIT Law”), domestically-owned enterprises and foreign-invested enterprises are subject to a uniform tax rate of 25% on taxable income. The tax expense (benefit) comprises: Years Ended December 31, 2013 2014 2015 $ $ $ Current Tax Deferred Tax ) ) ) Total Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows: Years Ended December 31, 2013 2014 2015 PRC income tax rate % % % Expenses not deductible for income tax purposes % % % Uncertain tax position impact % % % Different tax rate of subsidiary operation in other jurisdiction — % % Effective income tax rate % % % The principal components of the deferred income tax asset and liabilities are as follows: As of December 31, 2013 2014 2015 $ $ $ Deferred tax assets: Deferred revenue Accrued expenses Discount of investment Tax loss carry forward Investment-in-affiliate impairment — Impairment for a held-to-maturity investment — Exchange gain — Gross deferred tax assets Valuation allowance — — — Net deferred tax assets Analysis as: Current Non-current Deferred tax liabilities: Amortization of intangible assets — — Unrealized investment income Total deferred tax liabilities Analysis as: Current Non-current — — The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more likely than not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. Valuation allowances are established for deferred tax assets based on a more likely than not threshold. The Group’s ability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the future periods provided for in the tax law. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry-forward period are reduced. As of December 31, 2015, operating loss carry forward amounted to $5,682,524 for the PRC income tax purposes. The loss carrying forward will begin to expire in 2018. No valuation allowance was recorded as of December 31, 2015 as it is determined that it is more likely than not that the relevant deferred tax asset will be realized. Undistributed earnings of the Company’s PRC subsidiaries of approximately $61.2 million at December 31, 2015 are considered to be indefinitely reinvested and, accordingly, no provision for PRC dividend withholding tax has been provided thereon. Upon distribution of those earnings, in the form of dividends or otherwise, the Group would be subject to the then applicable PRC tax laws and regulations. The amounts of unrecognized deferred tax liabilities for these earnings are in the range of $3.06 million to $6.12 million, as the withholding tax rate of the profit distribution will be 5% or 10% depending upon whether the immediate offshore companies can enjoy the preferential withholding tax rate of 5%. Aggregate undistributed earnings of the Company’s VIEs and its VIEs’ subsidiaries located in the PRC that are available for distribution to the Company were approximately $17.3 million as of December 31, 2015. A deferred tax liability should be recorded for taxable temporary differences attributable to the excess of financial reporting amounts over tax basis amount in domestic subsidiaries. However, recognition is not required in situations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expects that it will ultimately use that means. The Company has not recorded any such deferred tax liability attributable to the undistributed earnings of its financial interest in VIEs because it believes such excess earnings can be distributed in a manner that would not be subject to income tax. The Group has made its assessment of the level of tax authority for each tax position (including the potential application of interest and penalties) based on the technical merits, and has measured the unrecognized tax benefits associated with the tax positions. The Group accrued interest of $91,511, $92,591 and $87,249 related to the uncertain tax positions in 2013, 2014 and 2015, respectively. The Group does not anticipate any significant increases or decreases to its liability for unrecognized tax benefits within the next 12 months. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is 10 years. There is no statute of limitations in the case of tax evasion. $ Uncertain tax position—January 1, 2013 Gross increases—accrued interest in current period Exchange rate translation Uncertain tax position—December 31, 2013 Gross increases—accrued interest in current period Exchange rate translation ) Uncertain tax position—December 31, 2014 Gross increases—accrued interest in current period Exchange rate translation ) Uncertain tax position—December 31, 2015 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Employee Benefit Plans | |
Employee Benefit Plans | 15. Employee Benefit Plans The Group’s PRC subsidiaries, VIEs and the VIEs’ subsidiaries are required by law to contribute a certain percentages of applicable salaries for retirement benefits, medical insurance benefits, housing funds, unemployment and other statutory benefits. The PRC government is directly responsible for the payments of such benefits. The total contribution for such employee benefits were $1.3 million, $1.8 million and $3.9 million for the years ended December 31, 2013, 2014 and 2015 which is recorded in operating costs and expenses in the consolidated statements of operations in the period those contributions are due. The Group has no ongoing obligation to its employees subsequent to its contributions to such employee benefit plans. |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Net Assets. | |
Restricted Net Assets | 16. Restricted Net Assets Pursuant to the relevant laws and regulations in the PRC applicable to foreign-investment corporations and the Articles of Association of the Group’s PRC subsidiaries, VIEs and VIEs’ subsidiaries, the Group is required to maintain a statutory reserve (“PRC statutory reserve”): a general reserve fund, which is not available for dividend distribution. The Group’s PRC subsidiaries, VIE and VIE’s subsidiaries are required to allocate15% of their profit after taxation, as reported in their PRC statutory financial statements, to the general reserve fund until the balance reaches 50% of their registered capital. At their discretion, the PRC subsidiaries, VIE and VIE’s subsidiaries may allocate a portion of its after-tax profits based on PRC accounting standards to staff welfare and bonus funds. The general reserve fund may be used to make up prior year losses incurred and, with approval from the relevant government authority, to increase capital. PRC regulations currently permit payment of dividends only out of the Group’s PRC subsidiaries, VIEs and VIEs’ subsidiaries’ accumulated profits as determined in accordance with PRC accounting standards and regulations. The general reserve fund amounted to $3,615,528 and $6,868,210 as of December 31, 2014 and 2015, respectively. The Group has not allocated any of its after-tax profits to the staff welfare and bonus funds for any period presented. In addition, the share capital of the Company’s PRC subsidiaries, VIEs and VIEs’ subsidiaries of $12,795,780 and $51,322,054 as of December 31, 2014 and 2015, respectively, was considered restricted due to restrictions on the distribution of share capital. As a result of these PRC laws and regulations, the Company’s PRC subsidiaries, VIE and VIE’s subsidiaries are restricted in their ability to transfer a portion of their net assets, including general reserve and registered capital, either in the form of dividends, loans or advances. Such restricted portion amounted to $16,411,308 and $58,190,265 as of December 31, 2014 and 2015, respectively. The restricted net assets of the Company’s VIEs and VIEs’ subsidiaries amounted to $7,952,004 and $22,673,978 as of December 31, 2014 and 2015, respectively. |
Convertible Redeemable Preferre
Convertible Redeemable Preferred Shares | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Redeemable Preferred Shares | |
Convertible Redeemable Preferred Shares | 17. Convertible Redeemable Preferred Shares On October 18, 2013, the Company issued 4,216,867 Series A convertible redeemable preferred shares (‘‘Series A Shares’’) at a price of US$0.3557 per share for total consideration of US$1,500,000, to an unrelated third party investor. On May 22, 2014, the Company issued 12,918,340 shares of Series B convertible redeemable and participating shares (‘‘Series B Shares’’), par value of US$0.0005 per share to E-House (China) Capital Investment Management Limited (‘‘E-House Investment’’), 100% subsidiary of E-House at an aggregate consideration of RMB48, 000,000($7,786,520). Simultaneous with the issuance of the Series B Shares, Juda Holding Inc. (a company wholly-owned by Hu Tianxiang) sold 12,918,340 shares of Ordinary Shares to E-House Investment at an aggregate consideration of USD equivalent of RMB48,000,000($7,786,520), and 12,918,340 shares of ordinary shares to SINA Hong Kong Limited at an aggregate consideration of USD equivalent of RMB48,000,000($7,786,520). These ordinary shares were re-designated into 25,836,680 Series B preferred shares at the closing of Series B financing. On August 22, 2014, Juda Holding Inc. entered into an agreement to sell 12,918,340 shares of ordinary shares to E-House Investment at an aggregate consideration of $10,116,352. These ordinary shares were re-designated into 12,918,340 Series B convertible redeemable preferred shares on December 16, 2014. Given the nature of certain key terms of the Series A Shares, Series B Shares (collectively ‘Preferred Shares”) as listed below, the Company has classified the Preferred Shares as mezzanine equity. The transfer of 38,755,020 ordinary shares from Juda Holding Inc. to the new investors and then re-designation of the ordinary shares to Series B Shares by the Company resulted in a repurchase of ordinary shares and issuance of Series B Shares by the Company and is accounted for as a treasury stock transaction accompanied with issuance of new preferred shares. The repurchased ordinary shares have been retired. The re-designated Series B Shares are recorded at fair value on the re-designation date, with the excess of the fair value of Series B Shares over the fair value of ordinary shares on the respective re-designation date recognized as deemed dividends. For the 25,836,680 ordinary shares re-designated on May 22, 2014, a deemed dividend of $4,204,901 was recognized for the excess of the fair value of Series B Shares on the date of re-designation ($0.60 per share) and the fair value of the ordinary share ($0.44 per share). For the 12,918,340 ordinary shares re-designated on December 16, 2014, a deemed dividend of $1,550,200 was recognized for the excess of the fair value of Series B Shares on the date of re-designation ($1.04 per share) and the fair value of the ordinary share ($0.92 per share). For the shares re-designated on May 22, 2014, the subscription price of Series B Shares represented the best fair value estimate of the Series B Shares. For the shares re-designated on December 16, 2014, the fair value of the Preferred Shares was determined with the income approach/ discounted cash flow, or DCF, analysis based on our projected cash flow using management’s best estimate as of the valuation date. The deemed dividends were subtracted from net income attributable to Jupai shareholders to arrive at net income attributable to ordinary shareholders for purpose of calculating earnings per share. The key terms of the Preferred Shares are as follows: Conversion Each holder of Preferred Shares shall have the right, at such holder’s sole discretion, to convert all or any portion of the Preferred Shares into ordinary shares at any time. The initial conversion price is the issuance price of Series A Shares and Series B Shares respectively, subject to adjustment in the event of (1) stock splits, share combinations, share dividends and distribution, recapitalizations and similar events, and (2) issuance of new securities at a price per share less than the conversion price in effect on the date of or immediately prior to such issuance. In that case, the conversion price shall be reduced concurrently to the subscription price of such issuance. The Preferred Shares will be automatically converted into ordinary shares at the then applicable conversion price upon (1) the closing of a Qualified Initial Public Offering (‘‘QIPO’’), or (2) the date specified by written consent or agreement of majority holders of Preferred Shares. A QIPO refers to a firm commitment underwritten registered public offering by the Company of its ordinary shares or by any other member of the Company of such member’s shares pursuant to a registration statement that is filed with and declared effective by the Governmental Authority in accordance with relevant securities laws of any jurisdiction on an internationally recognized stock exchange acceptable to the holders of Preferred Shares at a public offering price (prior to customary underwriters’ discounts and commissions) that values the Company at least RMB720,000,000 immediately prior to the closing of such offering and will bring gross offering proceeds to the Company, before deduction of underwriting discounts and registration expenses, of at least RMB50,000,000, all of which shall be calculated based on the offering price in such public offering and the total number of the Company’s shares immediately after such public offering on fully diluted basis. The conversion option can only be settled by issuance of ordinary shares except that fractional shares may be settled in cash. The Company has determined that there were no beneficial conversion feature (‘‘BCF’’) attributable to the Series A Shares and the Series B Shares issued on May 22, 2014, as the effective conversion price was greater than the fair value of the ordinary shares on the respective commitment date. For the Series B Shares re-designated from ordinary shares on December 16, 2014, a BCF of US$1,808,568 was recognized as deemed dividend for the excess of the fair value of ordinary shares (US$0.92 per share) over the effective conversion price (US$0.78 per share). Under U.S. GAAP, the BCF is initially recognized by allocating US$1,808,568 from mezzanine equity to additional paid-in capital. The resulted discount to mezzanine equity is amortized from the issuance date to the earliest conversion date as a deemed dividend by debiting to retained earnings, in the absence of retained earnings, to additional paid-in capital. As the Series B Shares are immediately convertible into ordinary shares on a 1:1 basis, and the Company did not have any retained earnings at issuance date, the amount was immediately fully amortized by debiting additional paid-in-capital. Consequently, the net impact on the consolidated balance sheet from recognizing the BCF is zero. The Company will reevaluate whether additional BCF is required to be recorded upon the modification to the effective conversion price of the Preferred Shares, if any. Voting Rights The Preferred Shareholders are entitled to vote with ordinary shareholders on an as-converted basis. Dividends The Preferred Shareholders participate in dividends on an as-converted basis and must be paid prior to any payment on ordinary shares. Redemption Series B Shares: At any time after four years from the Series B Shares closing date, or the date of the occurrence of a redemption event, or if any holder of Series A Shares elects to exercise its redemption right, any holder of Series B Shares may, at any time thereafter require that the Company redeem all or a portion of the Series B Shares by such holder at a redemption price per share equal to the sum of: (i) an amount equal to one hundred and thirty-six percent (136%) of the Series B Shares issue price (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) for such share, and (ii) all dividends accrued and unpaid with respect thereto (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions). Series A Shares: At any time after five years from the Series A Shares closing date, or the date of the occurrence of a redemption event and if the holders of Series B Shares have elected to exercise redemption right, at the request of majority holders of Series A Shares, the Company shall redeem all or a portion Series A Shares at a redemption price per share equal to the sum of: (1) an amount equal to 136% of the Series B Issue Price (as Adjusted) for such share, and(2) all dividends accrued and unpaid with(as Adjusted) for the period from the Series A closing until the date of redemption. Liquidation In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the holders of Preferred Shares are entitled to receive, prior to any distribution to the holders of ordinary shares, an amount per share equal to 150% of issue price plus all accrued or declared but unpaid dividend (the ‘‘Preference Amount’’). Upon the issuance of Series B Shares, the Preference Amount has been revised to 100% of issue price plus accrued or declared but unpaid dividend for both Series A and Series B Shareholders. Series B Shares must receive their liquidation payments prior to any such payments being made on the Series A Shares. After the Preference Amount has been paid, any remaining funds or assets legally available for distribution shall be distributed pro rata among the Preferred Shareholders together with ordinary shares. A liquidation event includes, (i) any merger, amalgamation or consolidation of any member of the Company Group with or into any person, or any other corporate reorganization, or any other transaction or series of transactions, as a result of which the shareholders of the Company immediately prior to such transaction or series of transactions will cease to own a majority of the equity securities or voting power of the surviving entity immediately following the consummation of such transaction or series of transactions; (ii) any sale of all or substantially all of the assets of the Company Group to a third party unaffiliated with any member of the Company Group; or (iii) the transfer (whether by merger, reorganization or other transaction) in which a majority of the outstanding voting power of the Company is transferred (excluding any sale of Shares by the Company for capital raising purposes); or (iv) any termination or modification of the Control Documents without the prior written consent of majority holders of Preferred Shares. Because the Preferred Shares are automatically convertible into ordinary shares upon a QIPO, the ability of holders to redeem such shares on or after the closing date is contingent upon a QIPO not occurring in five years. Upon issuance, the Company determined that redemption was not probable due to the expected successful IPO within five years and therefore recorded the Preferred Shares at fair value and not accreted to the redemption value. The Company deemed the modification of the terms of Series A Shares in connection with the issuance of Series B Shares to be a transfer of wealth between different classes of preferred shareholders with no resulting accounting consequence. Upon the completion of the Group’s IPO on July 16, 2015, all Preferred Shares were converted into ordinary shares on a one-to-one basis. As of December 31, 2015, there were no preferred shares issued and outstanding. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurement | |
Fair Value Measurement | 18. Fair Value Measurement As of December 31, 2014 and 2015, information about inputs into the fair value measurements of the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Fair Value Measurements at Reporting Date Using Description As of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Short-term investment: Trading securities investments — — Fair Value Measurements at Reporting Date Using Description As of December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Short-term investment: Trading securities investments — — Available-for-sale investments: Asset management plans — — Real estate funds — — Trading securities investments consist of an investment in a trust product that could be immediately redeemed. The investment is recorded at fair value on a recurring basis. The fair value is from an unadjusted quoted price in active market and therefore is classified as Level 1 measurement. The Group believes the fair value of its financial instruments that are not reported at fair value; principally cash and cash equivalents, accounts receivable, other receivables, amount due from related parties, short-term held-to-maturity securities, customer borrowings, short-term entrusted investments, dividend payable and other current liabilities approximate their recorded values due to the short-term nature. The Group’s long-term investments and long term entrusted investments consist of investment in long-term fixed income products. The fair value of long-term fixed income products was estimated using a discounted cash flow model based on contractual cash flows and a discount rate at the prevailing market yield on the measurement date for similar products, and is classified as a Level 2 fair value measurement. As of December 31, 2013, 2014 and 2015, information about inputs into the fair value measurements of the Company’s long-term financial instruments that are not reported at fair value on consolidated balance sheet is as follows: Fair Value Measurements at Reporting Date Using As of December 31, 2015 Quoted Prices in Active Markets Significant Other Significant Unobservable Description Carrying Value Fair Value for Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) Long-term investment-held-to-maturity Trust products — — Asset management plans — — Real estate funds — — For private equity funds recorded at cost method, it is not practicable to estimate the fair value of the investment. Therefore, the Group did not disclose the fair value of the investment. Fair Value Measurements at Reporting Date Using As of December 31, 2014 Quoted Prices in Active Markets Significant Other Significant Unobservable Description Carrying Value Fair Value for Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) Long-term investment: Trust products — — Asset management plans — — Real estate funds — — Long term entrusted investments — — There were no assets or liabilities measured at fair value on a non-recurring basis during the years ended December 31, 2013, 2014 and 2015, except that: (1) the Group recorded an impairment loss of $131,165 for investment in affiliates for the year ended December 31, 2013 based on a subsequent offer price of $436,716 which is deemed as the estimated fair value, classified as a Level 2 fair value measurement; (2) the Group also recorded an impairment due to credit loss of $130,740 and $507,429 for a held-to-maturity investment in 2014 and 2015 upon the Group’s analysis on the collectability of this investment, and classified as a Level 2 fair value measurement. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Segment Information | 19. Segment Information The Group uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Group’s CODM has been identified as the CEO, Co-Chairman and Executive Chairman of the Board, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. The Group believes it operates in a sole segment, which is value-added wealth management services. Service Lines Details of revenue by type of service are as follows: Year Ended December 31, 2013 2014 2015 $ $ $ One-time commissions Related party Third party Recurring management fee Related party Third party — — Recurring service fees Related party — — Third party Total revenues All of the Group’s revenues are derived from the PRC and Hong Kong. The Group’s long lived assets are located substantially in the PRC. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | 20. Related Party Transactions Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. The table below sets forth major related parties and their relationships with the Group: Company Name Relationship with the Group Juxi Affiliate of Shanghai Jupai Hehui Affiliate of Juzhou During the years ended December 31, 2013, 2014 and 2015, significant related party transactions and balances were as follows: a. Revenue from Related Parties Years Ended December 31 2013 2014 2015 $ $ $ One-time commissions Juxi — — Hehui — — Investees of Affiliates of Juzhou, a subsidiary of a VIE of the Company — Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Jupeng, a subsidiary of a VIE of the Company — — Investees of Mingdu, a subsidiary of a VIE of the Company — — Investees of Yidezeng, a subsidiary of a VIE of the Company — — Investees of Yidezhen, a subsidiary of a VIE of the Company — — Investees of Yiju, a subsidiary of a VIE of the Company — — Total one-time commissions Recurring management fee Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Jupeng, a subsidiary of a VIE of the Company — — Investees of Mingdu, a subsidiary of a VIE of the Company — — Investees of Yidezhen, a subsidiary of a VIE of the Company — — Investees of Yidezeng, a subsidiary of a VIE of the Company — — Investees of Yidexin, a subsidiary of a VIE of the Company — — Investees of Yidezhao, a subsidiary of a VIE of the Company — — Investees of Yiju, a subsidiary of a VIE of the Company — — Total recurring management fee Recurring service fee Investees of Affiliates of Juzhou, a subsidiary of a VIE of the Company — — Investees of Affiliates of Yidezeng, a subsidiary of a VIE of the Company — — Total recurring service fee Total b. Amounts due from Related Parties As of December 31, 2014 and 2015, amounts due from related parties were comprised of the following: As of December 31, 2014 2015 $ $ Hehui — Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Affiliates of Juzhou, a subsidiary of a VIE of the Company — Investees of Jupeng, a subsidiary of a VIE of the Company — Investees of Yidexin, a subsidiary of a VIE of the Company — Investees of Yidezhen, a subsidiary of a VIE of the Company — Investees of Yidezeng, a subsidiary of a VIE of the Company — Investees of Yidezhao, a subsidiary of a VIE of the Company — Total amounts due from related parties The amounts represent the service fee receivable as of December 31, 2015. c. Amount due to Related Parties As of December 31, 2015, deferred revenue from related parties was comprised of the following: As of December 31, 2014 2015 $ $ Investee of Affiliates of Juzhou, a subsidiary of a VIE of the Company Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Jupeng, a subsidiary of a VIE of the Company Investees of Yidezhen, a subsidiary of a VIE of the Company Investees of Yidezeng, a subsidiary of a VIE of the Company Total amounts due from related parties The amounts represent recurring management fees and recurring service fees received from the investment fund managed or served by the Group in advance. The balance as of December 31, 2014 included $3,256,366 carried interest prepaid by an investee of Juzhou that were subject to clawback provisions. No additional prepaid carried interest was received in 2015. d. Amounts due to Related Party for Issuance of Ordinary Shares In January 2016, the Group issued to SINA Hong Kong Limited (“SINA”) 2,880,000 ordinary shares, representing approximately 1.5% of the Group’s total outstanding share capital, at $1.83 per share, in a private placement. The aggregated transaction value of this private placement was $5.28 million, which has been received in advance at the end of December 31, 2015. As of December 31, 2014 and 2015, amounts due to related party was as following: As of December 31, 2014 2015 $ $ Sina Hong Kong Limited |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2015 | |
Commitments | |
Commitments | 21. Commitments Operating Leases The Group leases its facilities under non-cancelable operating leases expiring at various dates. Future minimum lease payments under non-cancelable operating lease agreements as of December 31, 2015 were as follows: Year Ended December 31 $ 2016 2017 2018 2019 2020 and after Total Rental expenses were $1,566,911, $3,154,920 and $5,062,753 during the years ended December 31, 2013, 2014 and 2015, respectively. Investment commitments The Group was obligated to provide capital injection up to $7,760,492 to the following equity method investees as of December 31, 2015: Year Ended December 31 $ Guojinwenying Shanghai HuijuAsset Management Co., Ltd. Shanghai Jingzhou Asset Management Co., Ltd. Zipai Shanghai Jufu Assets Management Co., Ltd. Xinhao Qianchang Shanghai Zhouzhi Investment Management Co., Ltd. Shanghai Zhoushi Asset Management Co., Ltd. Hehui Others Total |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | 22. Subsequent Events In January 2016, the Group purchased 78% of the total equity interest of Yixun with a cash consideration of RMB 17,300,000 (USD2.7 million). Yixun is primarily engaged in the P2P internet lending business. In January 2016, the Group issued to Julius Baer Investment Ltd. (“Julius Baer”) and SINA Hong Kong Limited (“SINA”) 9,591,000 and 2,880,000 ordinary shares, respectively, representing approximately 4.99% and 1.5% of the Group’s total outstanding share capital, respectively, at $1.83 per share, in a private placement. The aggregate transaction value of this private placement was approximately $22.9 million. In March 2016, the Group entered into a binding agreement to acquire approximately 71% of the equity interests in Runju from two of its existing shareholders, one of which is a related party of the Group. Runju primarily operates an online platform which facilitates the exchange of the ownership of debt and equity products. The total consideration for the acquisition is approximately RMB 90.5 million ($14.3 million). The Group prepaid RMB 77.6 million ($11.9 million) in December 2015. The completion of this transaction is subject to the satisfaction of certain closing conditions, including the completion of certain asset injections by the existing shareholders of Runju. |
Additional Financial Informatio
Additional Financial Information of Parent Company | 12 Months Ended |
Dec. 31, 2015 | |
Additional Financial Information of Parent Company | |
Additional Financial Information of Parent Company | Additional Financial Information of Parent Company — Financial Statements Schedule I Jupai Holdings Limited Financial Information of Parent Company Condensed Balance Sheets (In U.S. dollars) As of December 31, 2014 2015 $ $ ASSETS Cash and cash equivalents Other current assets Total current assets Investment in subsidiaries and VIE Loan to subsidiaries Total Assets LIABILITY Other current liabilities Amount due to related parties-non current — Total Liability Mezzanine Equity Series A convertible redeemable preferred shares ($0.0005 par value; 4,216,867shares authorized, 4,216,867 shares issued and outstanding as of December 31, 2014; Redemption value was $1,529,267 as of December 31, 2014; Liquidation value was $1,500,000 as of December 31, 2014) — Series B convertible redeemable preferred shares ($0.0005 par value; 51,673,360 shares authorized, issued and outstanding as of December 31 2014; Redemption value was $35,079,536 as of December 31, 2014; Liquidation value was 33,475,912 as of December 31, 2014) — Ordinary Shares ($0.0005 par value; 142,101,710 and 1,000,000,000 shares authorized, 61,244,980 and 179,586,759 shares issued and outstanding, as of December 31, 2014 and 2015, respectively) Additional paid-in capital Retained earnings Accumulated other comprehensive income ) Total shareholders’ equity TOTAL LIABILITIES, MEZZANIE EQUITY AND SHAREHOLERS’ EQUITY Additional Information —Financial Statement Schedule I Jupai Holdings Limited Financial Information of Parent Company Condensed Statements of Operations and Comprehensive Income (In U.S. dollars) Years ended December 31, 2013 2014 2015 $ $ $ Cost of revenues — ) ) Selling expenses — ) ) General and administrative expenses — ) ) Interest expense ) ) — Income before taxes and equity in affiliates ) ) ) Income from equity in subsidiaries and VIE Net income Other comprehensive income ) ) Comprehensive income attributable to Jupai shareholders 2014 Schedule I was restated to include the amounts attributable to the VIEs, which has resulted in an increase in investment in VIEs and additional paid-in capital by $6,295,780. This change has no effect on the Group’s consolidated financial statements or other disclosures in Schedule I. Additional Information —Financial Statement Schedule I Jupai Holdings Limited Financial Information of Parent Company Condensed Statements of Cash Flows (In U.S. dollars) Years ended December 31, 2013 2014 2015 $ $ $ Cash flows from operating activities: Net income Adjustment to reconcile net income to net cash provided by operating activities: Share based compensation — Income from equity in subsidiaries and VIE ) ) ) Changes in operating assets and liabilities: Other current assets — — ) Other current liabilities ) Net cash used in operating activities — ) ) Cash flows from investing activities: Loan to subsidiaries ) ) ) Net cash used in investing activities ) ) ) Cash flows from financing activities: Proceeds from issuance of preferred share — Proceeds from issuance of new shares to SINA — — Proceeds from IPO — — Payment of IPO cost — ) ) Subscription receivable — — Net cash provided by financing activities Net increase in cash and cash equivalents — Cash and cash equivalents—beginning of year — — Cash and cash equivalents—end of year — Non-cash investing and financing activities: Series B convertible redeemable preferred shares issued by re-designation of ordinary shares — — Acquisition of Scepter through share settlement — — ) Conversion of Series A and B convertible redeemable preferred shares to ordinary shares — — Additional Information —Financial Statement Schedule I Jupai Holdings Limited Notes to Schedule I 1. Schedule I has been provided pursuant to the requirements of Rule 12-04(a) and 5-04(c) of Regulation S-X, which require condensed financial information as to the financial position, cash flows and results of operations of a parent company as of the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The condensed financial information has been prepared using the same accounting policies as set out in the consolidated financial statements except that the equity method has been used to account for investments in its subsidiaries, VIE and VIE’s subsidiaries. For the parent company, the Company records its investments in subsidiaries, VIE and VIE’s subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments−Equity Method and Joint Ventures. Such investments are presented on the Condensed Balance Sheets as “Investment in subsidiaries and VIE” and the subsidiaries and VIE’s profit as “Income from equity in subsidiaries and VIE” on the Condensed Statements of Operations and Comprehensive Income. 2. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The footnote disclosure certain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the accompanying Consolidated Financial Statements. 3. As of December 31, 2015, there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company. |
Summary of Principal Accounti33
Summary of Principal Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Principal Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries for which the Company is the ultimate primary beneficiary. As of December 31, 2015, all transactions and balances among the Company, its subsidiaries, the VIEs and VIEs’ subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power or has the power to: govern the financial and operating policies; appoint or remove the majority of the members of the board of directors; cast a majority of votes at the meeting of the board of directors. U.S. GAAP provides guidance on the identification of VIE and financial reporting for entities over which control is achieved through means other than voting interests. The Group evaluates each of its investments to determine whether or not the investee is a VIE and, if so, whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if the Group (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economic benefits of the VIE that could be significant to the VIE. If deemed the primary beneficiary, the Group consolidates the VIE. As foreign-invested companies are restricted to engage in direct sale of mutual funds, asset management plans and market survey under the current PRC laws and regulations, the Company’s PRC subsidiary, Shanghai Juxiang as foreign-invested company, does not meet all such requirements and therefore is not permitted to engage in such business in China. Therefore, the Company decided to conduct such business in China through Shanghai Jupai and its subsidiaries which are PRC domestic companies substantially beneficially owned by the Founders. Since the Company does not have any equity interests in Shanghai Jupai, in order to exercise effective control over its operations, the Company, through its wholly owned subsidiary Shanghai Juxiang, entered into a series of contractual arrangements, or Control Documents with Shanghai Jupai and its shareholders (“Jupai VIE”), pursuant to which the Company is entitled to receive effectively all economic benefits generated from Shanghai Jupai shareholders’ equity interests in it. Since the Company acquired Scepter in July 2015, Scepter, its subsidiaries, Shanghai E-Cheng and Shanghai E-Cheng’s subsidiaries was included in the consolidated financial statements. Scepter is engaged in asset management service business. Foreign-invested enterprises incorporated in the PRC are not expressly prohibited from providing asset management services in PRC. However, according to local business practice, as a general partner of a fund, Scepter must invest as a limited partner before the fund is established. Some investments of the fund managed by the Scepter are in the foreign-invested enterprise prohibited, or not encouraged industries, which requires all investors not to be foreign-invested enterprises. Therefore Scepter provides asset management services through its VIE entities. To provide Scepter effective control over and the ability to receive substantially all of the economic benefits of its VIE and its subsidiaries, Scepter’s wholly owned subsidiary Shanghai Baoyi, the “Foreign Owned Subsidiary” entered into a series of contractual arrangements with Shanghai E-Cheng, the “VIE” and its respective shareholders, respectively. (Hereafter, the VIE structure under Scepter is called “Scepter VIE”.) The agreements of Jupai VIE and Scepter VIE that provide the Company effective control over the VIE include: (i) Voting Rights Proxy Agreement (1) Jupai VIE: Each shareholder of Shanghai Jupai has executed a power of attorney to grant Shanghai Juxiang the power of attorney to act on his or her behalf on all matters pertaining to Shanghai Jupai and to exercise all of his or her rights as a shareholder of the Shanghai Jupai, including but not limited to convene, attend and vote at shareholders’ meetings, designate and appoint directors and senior management members. The proxy agreement will remain in effect unless Shanghai Juxiang terminates the agreement by giving a 30-day prior written notice or gives its consent to the termination by Shanghai Jupai. (2) Scepter VIE: Each of the shareholders of Shanghai E-Cheng irrevocably granted any person designated by Shanghai Baoyi the power to exercise all voting rights to which he will be entitled to as shareholder of Shanghai E-Cheng at that time, including the right to declare dividends, appoint and elect board members and senior management members and other voting rights. Each shareholder voting right proxy agreement has a term of twenty years, unless it is early terminated by all parties in writing or pursuant to provision of this agreement. The term of the agreement will be automatically extended for one year upon the expiration, if Shanghai Baoyi gives the other Parties written notice requiring the extension thereof and the same mechanism will apply subsequently upon the expiration of each extended term. (ii) Call Option Agreement (1) Jupai VIE: The shareholders of Shanghai Jupai granted Shanghai Juxiang or its designated representative(s) an irrevocable and exclusive option to purchase their equity interests or assets in Shanghai Jupai when and to the extent permitted by PRC law. Shanghai Juxiang or its designated representative(s) has sole discretion as to when to exercise such options, either in part or in full. Without Shanghai Juxiang’s written consent, the shareholders of Shanghai Jupai shall not transfer, donate, pledge, or otherwise dispose any equity interests of Shanghai Jupai in any way. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time when the option is exercised. The agreement can be early terminated by Shanghai Juxiang, but not by Shanghai Jupai or its shareholders. (2) Scepter VIE: Each of shareholders of Shanghai E-Cheng has entered into an Exclusive Call Option Agreement with Baoyi. Pursuant to these agreements, each of the shareholders of Shanghai E-Cheng has granted an irrevocable and unconditional option to Shanghai Baoyi or its designees to acquire all or part of such shareholder’s equity interests in Shanghai E-Cheng at its sole discretion, to the extent as permitted by PRC laws and regulations then in effect. The consideration for such acquisition of all equity interests in Shanghai E-Cheng will be equal to the registered capital of Shanghai E-Cheng, and if PRC law requires the consideration to be greater than the registered capital, the consideration will be the minimum amount as permitted by PRC law. In addition, Shanghai E-Cheng irrevocably and unconditionally granted Baoyi an exclusive option to purchase, to the extent permitted under the PRC law, all or part of the assets of Shanghai E-Cheng. The exercise price for purchasing the assets of Shanghai E-Cheng will be equal to its respective book values, and if PRC law requires the price to be greater than the book value, the price will be the minimum amount as permitted by PRC law. The call option may be exercised by Shanghai Baoyi or its designees. The agreements that transfer economic benefits to the Company include: (i) Consulting Services Agreement, Operating Agreement and Exclusive Support Agreement (1) Jupai VIE: Shanghai Jupai engages Shanghai Juxiang as its exclusive technical and operational consultant and under which Shanghai Juxiang agrees to assist in arranging the financial support necessary to conduct Shanghai Jupai’s operational activities . Shanghai Jupai shall not seek or accept similar services from other providers without the prior written approval of Shanghai Juxiang. The agreements will be effective as long as Shanghai Jupai exists. Shanghai Juxiang may terminate this agreement at any time by giving a prior written notice to Shanghai Jupai. (2) Scepter VIE: Pursuant to an Exclusive Support Agreement between Shanghai Baoyi and Shanghai E-Cheng, Shanghai Baoyi provides Shanghai E-Cheng with a series of consultancy services on an exclusive basis and is entitled to receive related fees. The term of this Exclusive Support Agreement will expire upon dissolution of Shanghai E-Cheng. Unless expressly provided by this agreement, without prior written consent of Shanghai Baoyi, Shanghai E-Cheng may not engage any third party to provide the services offered by Shanghai Baoyi under this agreement. (ii) Equity Interest Pledge Agreement (1) Jupai VIE: The shareholders of Shanghai Jupai pledged all of their equity interests in Shanghai Jupai to Shanghai Juxiang as collateral to secure their obligations under the above agreement. If the shareholders of Shanghai Jupai or Shanghai Jupai breach their respective contractual obligations, Shanghai Juxiang, as pledgee, will be entitled to certain rights, including the right to dispose the pledged equity interests. Pursuant to the agreement, the shareholders of Shanghai Jupai shall not transfer assign or otherwise create any new encumbrance on their respective equity interest in Shanghai Jupai without prior written consent of Shanghai Juxiang. This pledge will remain effective until all the guaranteed obligations are performed. The equity pledges of Shanghai Jupai have been registered with the relevant local branch of the State Administration for Industry and Commerce, or SAIC. (2) Scepter VIE: Each of the shareholders of Shanghai E-Cheng has also entered into an equity pledge agreement with Shanghai Baoyi. Pursuant to which these shareholders pledged their respective equity interest in Shanghai E-Cheng to guarantee the performance of the obligations of Shanghai E-Cheng. If Shanghai E-Cheng or its shareholders breach any of their respective obligations under any of these agreements. Shanghai Baoyi, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. Pursuant to the equity pledge agreement, each shareholder of Shanghai E-Cheng cannot transfer, sell, pledge, dispose of or otherwise create any new encumbrance on their respective equity interest in Shanghai E-Cheng without prior written consent of Shanghai Baoyi. The equity pledge right enjoyed by Shanghai Baoyi will expire when shareholders of Shanghai E-Cheng have fully performed their respective obligations under the above agreements. The equity pledges of Shanghai E-Cheng have been registered with the relevant local branch of SAIC. (iii) Loan Agreement for Scepter VIE. Under the Loan Agreement among the shareholders of Shanghai E-Cheng and Shanghai Baoyi, Shanghai Baoyi granted an interest-free loan to the shareholders of Shanghai E-Cheng, solely for their purchase of the equity interests of Shanghai E-Cheng. The loan is interest free and the term of the loan is (i) the expiration of 20 years from the date of the loan agreement, (ii) the expiration of Shanghai Baoyi’s operation term or (iii) the expiration of Shanghai E-Cheng’s operation term whichever is the earliest. Under the above agreements, the shareholders of Shanghai Jupai/Shanghai E-Cheng irrevocably granted Shanghai Juxiang/Shanghai Baoyi the power to exercise all voting rights to which they were entitled. In addition, Shanghai Juxiang/Shanghai Baoyi have the option to acquire all of the equity interests in Shanghai Jupai/Shanghai E-Cheng, to the extent permitted by the then-effective PRC laws and regulations, for nominal consideration. Finally, Shanghai Juxiang/Shanghai Baoyi is entitled to receive service fees for certain services to be provided to Shanghai Jupai/Shanghai E-Cheng. The Call Option Agreement and Voting Rights Proxy Agreement provide the Company effective control over the VIEs and their subsidiaries, while the Equity Interest Pledge Agreements secure the obligations of the shareholders of Shanghai Jupai and Shanghai E-Cheng under the relevant agreements. Because the Company, through Shanghai Juxiang and Shanghai Baoyi, has (i) the power to direct the activities of Shanghai Jupai and Shanghai E-Cheng that most significantly affect the entities’ economic performance and (ii) the right to receive substantially all of the benefits from Shanghai Jupai and Shanghai E-Cheng, the Company is deemed the primary beneficiary of Shanghai Jupai and Shanghai E-Cheng. Accordingly, the Company has consolidated the Shanghai Jupai and Shanghai E-Cheng’s financial results of operations, assets and liabilities, and cash flows in the Company’s consolidated financial statements. The Company believes that the contractual arrangements with the VIEs are in compliance with PRC law and are legally enforceable. However, the contractual arrangements are subject to risks and uncertainties, including: · Shanghai Jupai and Shanghai E-Cheng and their shareholders may have or develop interests that conflict with the Group’s interests, which may lead them to pursue opportunities in violation of the aforementioned contractual arrangements. · Shanghai Jupai and Shanghai E-Cheng and their shareholders could fail to obtain the proper operating licenses or fail to comply with other regulatory requirements. As a result, the PRC government could impose fines, new requirements or other penalties on the VIEs or the Group, mandate a change in ownership structure or operations for the VIEs or the Group, restrict the VIEs or the Group’s use of financing sources or otherwise restrict the VIEs or the Group’s ability to conduct business. · The aforementioned contractual agreements may be unenforceable or difficult to enforce. The equity interests under the Equity Interest Pledge Agreements have been registered by the shareholders of Shanghai Jupai and Shanghai E-Cheng with the relevant office of the administration of industry and commerce, however, the VIEs or the Group may fail to meet other requirements. Even if the contractual agreements are enforceable, they may be difficult to enforce given the uncertainties in the PRC legal system. · The PRC government may declare the aforementioned contractual arrangements invalid. They may modify the relevant regulations, have a different interpretation of such regulations, or otherwise determine that the Group or the VIEs have failed to comply with the legal obligations required to effectuate such contractual arrangements. The following amounts and balances of Shanghai Jupai and Shanghai E-Cheng and their subsidiaries were included in the Group’s consolidated financial statements after the elimination of intercompany balances and transactions: As of December 31, 2014 2015 $ $ Cash and cash equivalents Short-term investments Short-term entrusted investment — Accounts receivable, net of allowance for doubtful accounts Trade and other receivables Amounts due from related parties Customer Borrowing — Deferred tax assets Other current assets Long-term investments — Long-term entrusted investment — Advance prepayment for acquisition — Investment in affiliates Property and equipment, net Deferred tax assets— non-current — Total assets Accrued payroll and welfare expenses Income tax payable Other tax payable Dividend payable — Deferred revenue - current from related parties Deferred revenue - current Other current liabilities Non-current uncertain tax position liabilities Deferred revenue — non-current from related parties Deferred revenue — non-current Total liabilities Year ended December 31, 2013 2014 2015 $ $ $ Net revenues Related party Third party Operating cost and expenses Net income attributable to Jupai shareholders Cash flows generated from operating activities: Cash flows (used in) generated from investing activities: ) ) Cash flows generated from (used in) financing activities: ) The VIEs contributed an aggregate of 68%, 11% and 40% of the consolidated net revenues for the years ended December 31, 2013, 2014 and 2015, respectively and an aggregate of 42%, 12% and 32% of the consolidated net income for the years ended December 31, 2013, 2014 and 2015, respectively. As of December 31, 2014 and 2015, the VIEs accounted for an aggregate of 42% and 33%, respectively, of the consolidated total assets. There are no consolidated assets of the VIEs and their subsidiaries that are collateral for the obligations of the VIEs and their subsidiaries and can only be used to settle the obligations of the VIEs and their subsidiaries. There are no terms in any arrangements, considering both explicit arrangements and implicit variable interests that require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Company or its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to the shareholder of the VIEs or entrustment loans to the VIEs. Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of their statutory reserve and their share capital, to the Company in the form of loans and advances or cash dividends. Please refer to Note 16 for disclosure of restricted net assets. |
Use of Estimates | (c) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ materially from such estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements include assumptions used to determine the liability for uncertain tax positions, valuation allowance for deferred tax assets, fair value measurement of underlying investment portfolios of the funds that the Group invests, assumptions related to the consolidation of entities in which the Group holds variable interests, fair value estimates of investments, impairment of investment in affiliates, assumptions related to the valuation of share-based compensation, including estimation of related forfeiture rates, useful lives and impairment of long-lived assets, valuation and impairment of goodwill, valuation and impairment of intangible assets, allowance for doubtful accounts of accounts receivable and entrusted investments. |
Concentration of Credit Risk | (d) Concentration of Credit Risk The Group is subject to potential significant concentrations of credit risk consisting principally of cash and cash equivalents, accounts receivable, amounts due from related parties and investments. All of the Group’s cash and cash equivalents and a majority of investments are held with financial institutions that Group management believes to be of high credit quality. All revenues were generated within China and Hong Kong. The following product providers accounted for 10% or more of revenues for the years ended December 31, 2013, 2014 and 2015: For Year Ended December 31, 2013 2014 2015 $ $ $ A — — B — — |
Customer borrowings | (e) Customer borrowings The Group historically provided some short term borrowings to customers who are temporarily short of sufficient funds for purchasing the financial products promoted by the Group. The borrowings were extended to bridge the gap between the maturity of an earlier product and purchase of a new one. The borrowings bear no interest and are due within one year. The borrowing that the Group provided are not secured and are not required for additional collateral. The Group assessed the collectability of the customer borrowings based on factors surrounding the credit risk of specific customers including the length of time the borrowings are passing due, previous loss history and the counterparty’s current ability to fulfill its obligation, and didn’t provide any allowance for such borrowings due to the remote possibility of collection failure. There were no short term loans overdue as of December 31, 2014. The cash flows associated with customer borrowings for the years ended December 31, 2013, 2014 and 2015 are presented as investing cash flows in the statements of cash flows. The Group stopped providing short term borrowings to customers since August 2014 and no amounts were outstanding as of December 31, 2015. |
Entrusted investments | (f) Entrusted investments In the past, the Group sometimes purchased the same financial product with its customers using its own funds but under the customers’ name, aiming to pursue higher return. The concerned customers are obliged to return the principle and gain to the Group at the maturity of the financial products. The Group bears both the product risk and the credit risk. The Group assessed the collectability of such entrusted investment based on factors surrounding the credit risk of specific customers like the length of time the investments are past due, previous loss history and the counterparty’s current ability to fulfill its obligation and did not provide any allowance for such investment due to the remote possibility of collection failure. The Group has terminated such practice of co-investment since August 2014. |
Investments in Affiliates | (g) Investments in Affiliates Affiliated companies are entities over which the Group does not control. For equity investment over which the Company does not have significant influence, cost method accounting is used. The Group accounts for common-stock-equivalent equity investments in entities over which it has significant influence but does not own a majority voting interest or otherwise control using the equity method. The Group generally considers an ownership interest of 20% or higher to represent significant influence. Under the equity method, the Group’s share of the post-acquisition profits or losses of affiliated companies is recognized in the statements of operations and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. When the Group’s share of losses in an affiliated company equals or exceeds its carrying amount of the investment in the affiliated company, the Group does not recognize further losses, unless the Group has guaranteed the obligations of the affiliated company or is otherwise committed to provide further financial support for the affiliated company. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary. The Group recorded an impairment loss of $131,165 related to Shanghai Juxi Asset Management Partnership Enterprise(“Juxi”) in loss from equity in affiliates in the consolidated statement of operations for the year ended December 31, 2013.The Group did not record any impairment loss for the year ended December 31, 2014 and 2015. The Group also considers it has significant influence over the funds of funds and real estate funds that it serves as general partner, and the Group’s ownership interest in these funds as limited partner is generally much lower than 5%. These funds are not consolidated by the Group based on the facts that the Group does not have control over the funds given substantive kick-out rights held by unrelated limited partners that allow them to remove the general partner without cause, and/or substantive participating rights that allow them to participate in certain financial and operating decisions of the limited partnership in the ordinary course of business. The equity method of accounting is accordingly used for investments by the Group in these funds. In addition, the investee funds meet the definition of an Investment Company and are required to report their investments at fair value. The Group records its equity pick-up based on its percentage ownership of the investee funds’ net income one quarter in arrears to enable it to have more time to collect and analyze the investments’ operating results. |
Fair Value of Financial Instruments | (h) Fair Value of Financial Instruments The Group records certain of its financial assets at fair value on a recurring basis. Fair value reflects the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The hierarchy is as follows: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model- derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
Business combinations | (i) Business combinations Business combinations are recorded using the purchase method of accounting and, accordingly, the acquired assets and liabilities are recorded at their fair market value at the date of acquisition. The consideration of an acquisition is measured as the aggregate of the acquisition date fair values of the assets transferred and liabilities incurred by the Group to the sellers and equity instruments issued. Any excess of acquisition cost over the fair value of the acquired assets and liabilities, including identifiable intangible assets, is recorded as goodwill. Transaction costs directly attributable to the acquisition are expensed as incurred. |
Cash and Cash Equivalents | (j) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and demand deposits, which are unrestricted as to withdrawal and use, and which have original maturities of three months or less when purchased. |
Investments | (k) Investments The Group invests in debt securities and accounts for the investments based on the nature of the products invested, and the Group’s intent and ability to hold the investments to maturity. The Group’s investments in debt securities include trust products, asset management plans and real estate funds that have a stated maturity and normally pay a prospective fixed rate of return. The Group classifies the investments in debt securities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded at amortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their remaining contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value with changes in fair value recognized in earnings. Investments that do not meet the criteria of held-to-maturity or trading securities are classified as available-for-sale, and are reported at fair value with changes in fair value included in other comprehensive income. The Group records investments in the equity of private equity funds under the cost method when they do not qualify for the equity method. Gains or losses are realized when such investments are sold. The Group reviews its investments, except for those classified as trading securities, for other-than-temporary impairment based on the specific identification method and considers available quantitative and qualitative evidence in evaluating potential impairment. If the cost of an investment exceeds the investment’s fair value, the Group considers, among other factors, general market conditions, government economic plans, the duration and the extent to which the fair value of the investment is less than cost and the Group’s intent and ability to hold the investment to determine whether an other-than-temporary impairment has occurred. The Group recognizes other-than-temporary impairment in earnings if it has the intent to sell the debt security or if it is more-likely-than-not that it will be required to sell the debt security before recovery of its amortized cost basis. Additionally, the Group evaluates expected cash flows to be received and determines if credit-related losses on debt securities exist, which are considered to be other-than-temporary, should be recognized in earnings. If the investment’s fair value is less than the cost of an investment and the Group determines the impairment to be other-than-temporary, the Group recognizes an impairment loss based on the fair value of the investment. |
Non-controlling interests | (l) Non-controlling interests A non-controlling interest in a subsidiary of the Group represents the portion of the equity (net assets) in the subsidiary not directly or indirectly attributable to the Group. Non-controlling interests are presented as a separate component of equity in the consolidated balance sheet and earnings and other comprehensive income are attributed to controlling and non-controlling interests. |
Property and Equipment, net | (m) Property and Equipment, net Property and equipment is stated at cost less accumulated depreciation, and is depreciated using the straight-line method over the following estimated useful lives: Estimated Useful Lives in Years Leasehold improvements Shorter of the lease term or expected useful life Furniture, fixtures, and equipment 3—5 years Motor Vehicles 5 years Gains and losses from the disposal of property and equipment are included in income from operations. |
Revenue Recognition | (n) Revenue Recognition The Group derives revenue primarily from one-time commissions and recurring service fees paid by product providers for whom the Group distributes wealth management products, and recurring management fee and carried interest paid by funds the Group manages. The Group recognizes revenues when there is persuasive evidence of an arrangement, service has been rendered, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded, net of sales related taxes and surcharges. Deferred revenues are recognized when payments are received in advance of the revenue being earned. The Group sometimes engages third party agents in promoting financial products and pays a channel fee accordingly, in which the Group recognizes revenue on a net basis by deducting the channel fee it pays to the third party agents. Through August 2014, there were also instances where the Group provides short-term loans to the customers who are temporarily short of sufficient funds in purchasing the financial products (see Note 2(e)). Commissions received on the financial products purchased by customers using short-term loans provided by the Company are deferred and not recognized as revenue until the loans are fully collected from the customers. One-time Commissions The Group enters into one-time commission agreements with product providers or underlying corporate borrowers, which specifies the key terms and conditions of the arrangement. Such agreements do not include rights of return, credits or discounts, rebates, price protection or other similar privileges. Upon establishment of a wealth management product, the Group earns a one-time commission from product providers or underlying corporate borrowers, calculated as a percentage of the wealth management products purchased by its clients. The Group defines the “establishment of a wealth management product” for its revenue recognition purpose as the time when both of the following two criteria are met: (1) the Group’s client has entered into a purchase or subscription contract with the relevant product provider and, if required, the client has transferred a deposit to an escrow account designated by the product provider and (2) the product provider has issued a formal notice to confirm the establishment of a wealth management product. Revenue is recorded upon the establishment of the wealth management product, when the provision of service concludes and the fee becomes fixed and determinable, assuming all other revenue recognition criteria have been met, and there are no future obligations or contingencies. Recurring Service Fees Recurring service fee includes service fee and carried interest, it arises from on-going services provided to product providers after the distribution of wealth management product including investment relationship maintenance and coordination and product reports distribution. It is calculated as a percentage of the total value of investments in the wealth management products purchased by the Group’s clients, calculated at the establishment date of the wealth management product. As the Group provides these services throughout the contract term, revenue is recognized over the contract term, assuming all other revenue recognition criteria have been met. For certain products, recurring service fees may also include a variable performance fee contingent upon the performance of the underlying investment, which is not recognized until the contingent criteria are met. Recurring service agreements do not include rights of return, credits or discounts, rebates, price protection or other similar privileges. Recurring Management Fees Recurring management fee arises from the fund management services provided to funds the Group manages, including management fee and carried interest. Management fees are computed as a percentage of the capital contribution in a fund and are recognized as earned over the specified contract period. Carried interest represents preferential allocations of profits that are a component of the Group’s general partnership interests and fund managing interests in the limited partnership and contractual funds and is not recognized until the end of the fund’s contract term when the carried interest is determined and distributed. Management fee received in advance of the specified contract period and in the limited circumstances carried interest is received before the end of the fund’s contract term are recorded as deferred revenues. Multiple Element Arrangements The Group enters into multiple element arrangements when a product provider or underlying corporate borrower engages it to provide both wealth management marketing and recurring services. The Group also provides both wealth management marketing and recurring services to funds that it serves as general partner/co-general partner or fund manager. Both wealth management marketing and recurring services represent separate units of accounting. The Group allocates arrangement consideration in multiple-deliverable revenue arrangements at the inception of an arrangement each unit of accounting to all deliverables based on the relative selling price in accordance with the selling price hierarchy, which includes: (i) vendor-specific objective evidence (“VSOE”) if available; (ii) third-party evidence (“TPE”) if VSOE is not available; and (iii) best estimate of selling price (“BESP”) if neither VSOE nor TPE is available. VSOE. The Group determines VSOE based on its historical pricing and discounting practices for the specific service when sold separately. In determining VSOE, the Group requires that a substantial majority of the selling prices for these services fall within a reasonably narrow pricing range. TPE. When VSOE cannot be established for deliverables in multiple element arrangements, the Group applies judgment with respect to whether it can establish a selling price based on TPE. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, the Group’s products and services contain certain level of differentiation such that the comparable pricing of services with similar functionality cannot be obtained. Furthermore, the Group is unable to reliably determine what similar competitor services’ selling prices are on a stand-alone basis. As a result, the Group has not been able to establish selling price based on TPE. BESP. When it is unable to establish selling price using VSOE or TPE, the Group uses BESP in its allocation of arrangement consideration. The objective of BESP is to determine the price at which the Group would transact a sale if the service were sold on a stand-alone basis. The Group determines BESP for deliverables by considering multiple factors including, but not limited to, prices it charged for similar products or funds, market conditions, specification of the services rendered and pricing practices. The Group has vendor specific objective evidence of fair value for its wealth management marketing services as it provides such services on a stand-alone basis. The Group has not sold its recurring services on a stand-alone basis. However, the recurring management fee or recurring service fee the Group charges as general partner /co-general partner or fund manager/fund advisor is consistent with the fee at which the Group would transact if the recurring services were sold regularly on a stand-alone basis. As such, the Group believes the fee it charges represents their best estimate of the selling price for its recurring services. The Group allocates arrangement consideration based on fair value, which is equivalent to the fees charged for each of the respective units of accounting, as described above. Revenue for the respective units of accounting is also recognized in the same manner as described above. |
Business Tax and Related Surcharges | (o) Business Tax and Related Surcharges The Group is subject to business tax, education surtax, and urban maintenance and construction tax, on the services provided in the PRC. Business tax and related surcharges are primarily levied based on revenues at rates ranging from 3% to 6% and are recorded as a reduction of revenues. |
Cost of Revenues | (p) Cost of Revenues Cost of revenue includes salaries and performance-based commissions of relationship managers and business development team, and expenses incurred in connection with product-specific client meetings and other events. |
Intangible assets, net | (q) Intangible assets, net Acquired intangible assets mainly consist of customer contracts from business combinations and are recorded at fair value on the acquisition date. The intangible assets are amortized using a straight-line method during the weighted average contract term of the customer contracts. |
Impairment of long-lived assets | (r) Impairment of long-lived assets The Group evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When these events occur, the Group measures impairment by comparing the carrying amount of the assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Group would recognize an impairment loss equal to the excess of the carrying amount over the fair value of the assets. |
Goodwill | (s) Goodwill Goodwill represents the excess of the purchase price of acquired businesses over the estimated fair value assigned to the individual assets acquired and liabilities assumed. Goodwill is not depreciated or amortized but is tested for impairment on an annual basis as of December 31, and in between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. In accordance with Accounting Standards Codification (“ASC”) 350-20, a company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company decides, as a result of its qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a two-step quantitative impairment test is mandatory. The Company may also elect to proceed directly to the two step impairment test without considering qualitative factors. The first step compares the fair value of each reporting unit to its carrying amount, including goodwill. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill. The management has conducted step 1 of the quantitative impairment test to compare the carrying value of the reporting unit, including assigned goodwill, to its respective fair value. The fair value of the reporting unit was estimated by using the income approach. Based on the quantitative test, it was determined that the fair value of the reporting unit tested exceeded its carrying amount and, therefore, step two of the two-step goodwill impairment test was not required. Management concluded that the goodwill was not impaired as of December 31, 2015. |
Income Taxes | (t) Income Taxes Current income taxes are provided for in accordance with the relevant statutory tax laws and regulations. The Group accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Group recognizes net deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making such a determination, it considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Group determines that its deferred tax assets are realizable in the future in excess of their net recorded amount, the Group would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Group records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Group recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The liability associated with unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation. Such adjustments are recognized entirely in the period in which they are identified. The effective tax rate for the Group includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management. The Group recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statement of Operations. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheet. |
Stock-Based Compensation | (u) Share-Based Compensation The Group recognizes share-based compensation based on the grant date fair value of equity awards, with compensation expense recognized over the vesting period. Share-based compensation expense is classified in the consolidated statements of operations based upon the job function of the grantee. The Group account for a cancellation or settlement of an equity settled share-based payment award as an acceleration of vesting, and recognize immediately the amount that otherwise would have been recognized for services received over the remainder of the vesting period. The Group also estimates expected forfeitures and recognize compensation cost only for those share-based awards expected to vest. Actual forfeitures may differ from those estimated by the Group which would affect the amount of share-based compensation to be recognized. |
Government Grants | (v) Government Grants Government subsidies include cash subsidies received by the Group’s entities in the PRC from local governments as incentives for registering and operating business in certain local districts and are typically granted based on the amount of value-added tax, business tax, and income tax payment generated by the Group in certain local districts. Such subsidies allow the Group full discretion in utilizing the funds and are used by the Group for general corporate purpose. The local governments have final discretion as to the amount of cash subsidies. Cash subsidies of $777,415, $2,363,893 and $3,755,759 are included in other operating income for the years ended December 31, 2013, 2014 and 2015, respectively. Cash subsidies are recognized when received and when all the conditions for their receipt have been satisfied. |
Net Income per Share | (w) Net Income per Share Basic net income per share is computed by dividing net income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. The Group has determined that its Series A and Series B convertible redeemable preferred shares are participating securities as the convertible redeemable preferred shares participate in the undistributed earnings on the same basis as the ordinary shares for the periods applicable. Accordingly, the Group has used the two-class method of computing earnings per share. Under this method, net income attributable to the Jupai shareholders is allocated on a pro-rata basis to the ordinary and convertible redeemable preferred shares to the extent that each class may share in income for the period. Losses are not allocated to the participating securities. Diluted earnings per share are computed using the more dilutive of the two-class method or the if-converted method. Diluted net income per share is computed by giving effect to all potential dilutive shares, including convertible redeemable preferred shares. |
Operating Leases | (x) Operating Leases Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Certain of the Group’s facility leases provide for a free rent period. Payments made under operating leases are charged to the consolidated statements of operations on a straight-line basis over the lease period. |
Foreign Currency Translation | (y) Foreign Currency Translation The functional currency of the Company, Jupai International and Scepter Pacific Limited is the United States dollar (“U.S. dollar”). The functional currency of Jupai Hong Kong and Scepter Holdings Limited is the HKD. The subsidiaries in the PRC and the VIE determined their functional currency to be the Chinese Renminbi(“RMB”). The determination of the respective functional currency is based on the criteria of ASC 830, Foreign Currency Matters. The Group uses U.S. dollar as its reporting currency. The Group uses the average exchange rate for the year and the exchange rate at the balance sheet date to translate the operating results and financial position, respectively. Translation differences are recorded in accumulated other comprehensive loss, a component of shareholders’ equity. Transactions denominated in foreign currencies are remeasured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are remeasured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in the consolidated statements of operation. |
Comprehensive Income | (z) Comprehensive Income Comprehensive income includes all changes in equity except those resulting from investments by owners and distributions to owners. For the years presented, total comprehensive income included net income, foreign currency translation adjustments, fair value changes of available-for-sale investments, net of tax effect. |
Recently issued accounting pronouncements | (y) Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The guidance provides a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry specific guidance, in current U.S. generally accepted accounting principles. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 is originally effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. ASU 2015-14, Revenue from Contracts with Customers, defers the effective date of ASU 2014-09 by one year. As a result, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017 and interim periods therein. Early adoption is permitted to the original effective date. The Group is in the process of evaluating the impact of adoption of this guidance on the Group’s consolidated financial statements. In June 2014, the FASB issued a new pronouncement which requires that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. A reporting entity should apply existing guidance in Topic 718, Compensation-Stock Compensation, as it relates to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The amendments in this ASU are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements. In February 2015, the FASB issued, ASU 2015-02, “Amendments to the Consolidation Analysis”, regarding consolidation of legal entities such as limited partnerships, limited liability corporations, and securitization structures. The guidance eliminates the deferral issued by the FASB in February 2010 of the accounting guidance for VIE for certain investment funds, including mutual funds, private equity funds and hedge funds. In addition, the guidance amends the evaluation of fees paid to a decision maker or a service provider, and exempts certain money market funds from consolidation. The guidance will be effective for accounting periods beginning after December 15, 2015 with early adoption permitted. The Group early adopted ASU 2015-02 for the year ended December 31, 2015. In adopting the guidance, the Company re-evaluated the existing consolidated VIEs and assessed that the adoption neither changes the conclusion of the consolidated VIEs and nor bring about new VIEs to be consolidated. In evaluating whether the investment funds of limited partnership and contractual funds the Group managed as general partner or fund manager are VIEs or not, the Group assessed that the management fees and carried interests it earns from the services provided as general partner or fund manager are commensurate with the level of effort required to provide such services and are at arm’s length. As a result, the interests earned by the Group are not considered as variable interests. In April 2015, the FASB issued ASU 2015-03 as part of its simplification initiative. The ASU changes the presentation of debt issuance costs in financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The requirement to present debt issuance costs as a direct reduction of the related debt liability (rather than as an asset) is consistent with the presentation of debt discounts under U.S. GAAP. In addition, it converges the guidance in U.S. GAAP with that in IFRSs, under which transaction costs that are directly attributable to the issuance of a financial liability are treated as an adjustment to the initial carrying amount of the liability. ASU 2015-03 is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Subsequent in August 2015, the FASB issued ASU 2015-15 related with the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements, under which the SEC staff stated it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Group does not expect the adoption of the above guidances will have a significant effect on the Group’s consolidated financial statements. In September 2015, the FASB issued ASU2015- 16 related to the accounting for measurement period adjustments recognized in a business combination. Under the previous standard, when adjustments were made to amounts previously reported as part of a business combination during the measurement period, entities were required to revise comparative information for prior periods. Under the new standard, entities must recognize these adjustments in the reporting period in which the amounts are determined rather than retrospectively. The new standard is effective for fiscal years beginning after December 15, 2015, including interim periods within that reporting period and early adoption is permitted. The Group does not expect the adoption of this guidance will have a significant effect on the Group’s consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, which requires deferred income tax liabilities and assets to be classified as noncurrent on the balance sheet rather than being separated into current and noncurrent. The guidance is effective for public entities for annual periods beginning after December 15, 2016, and interim periods within those annual periods with early adoption being permitted. The ASU will only have impact on the Group’s consolidated balance sheets classification upon adoption. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”), which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. ASU 2016-01 also impacts the presentation and disclosure requirements for financial instruments. ASU 2016-01 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted only for certain provisions. The Group is in the process of evaluating the impact of adoption of this guidance on the Group’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize most leases on the balance sheet. This ASU requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. The ASU does not significantly change the lessees’ recognition, measurement and presentation of expenses and cash flows from the previous accounting standard. Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard. In addition, the ASU expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. The provisions of this guidance are effective for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The Group is in the process of evaluating the impact of adoption of this guidance on the Group’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, which eliminates eliminate the requirement to retroactively adopt the equity method of accounting. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-08, which amends the principal-versus-agent implementation guidance and illustrations in the Board’s new revenue standard (ASC 606). The amendments in this update clarify the implementation guidance on principal versus agent considerations. When another party, along with the reporting entity, is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is to provide that good or service to the customer (as a principal) or to arrange for the good or service to be provided to the customer by the other party (as an agent). The guidance is effective for interim and annual periods beginning after December 15, 2017. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. For public entities, the ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Early adoption will be permitted in any interim or annual period for which financial statements have not yet been issued or have not been made available for issuance. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements. |
Organization and Principal Ac34
Organization and Principal Activities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Organization and Principal Activities | |
Schedule of the Company's subsidiaries | The Company’s significant subsidiaries as of December 31, 2015 include the following: Date of Incorporation/Acquisition Place of Incorporation Percentage of Ownership Shanghai Juxiang July16, 2013 PRC % Baoyi Investment Consulting (Shanghai) Co., Ltd (“Shanghai Baoyi”) July 16, 2015 PRC % Shanghai Jupai’s significant subsidiaries as of December 31, 2015 include the following: Date of Incorporation/acquisition Place of Incorporation Percentage of Ownership Juzhou Asset Management (Shanghai) Co., Ltd. (“Juzhou”) May17, 2013 PRC % Shanghai Jupai Yumao Fund Sales Co., Ltd. February 26, 2014 PRC % Shanghai Jupeng Asset Management Co., Ltd. (“Jupeng”) June 8, 2015 PRC % Shanghai E-Cheng’s significant subsidiaries as of December 31, 2015 include the following: Date of Acquisition Place of Incorporation Percentage of Ownership Shanghai Yidexin Equity Investment Management Co., Ltd (“Yidexin”) July 16, 2015 PRC % Shanghai Yidezeng Equity Investment Center (“Yidezeng”) July 16, 2015 PRC % Shanghai Yidezhen Equity Investment Center (“Yidezhen”) July 16, 2015 PRC % Shanghai Yidezhao Equity Investment Center (“Yidezhao”) July 16, 2015 PRC % |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Principal Accounting Policies | |
Schedule of amounts of variable interest entity included in the Group's consolidated financial statements | As of December 31, 2014 2015 $ $ Cash and cash equivalents Short-term investments Short-term entrusted investment — Accounts receivable, net of allowance for doubtful accounts Trade and other receivables Amounts due from related parties Customer Borrowing — Deferred tax assets Other current assets Long-term investments — Long-term entrusted investment — Advance prepayment for acquisition — Investment in affiliates Property and equipment, net Deferred tax assets— non-current — Total assets Accrued payroll and welfare expenses Income tax payable Other tax payable Dividend payable — Deferred revenue - current from related parties Deferred revenue - current Other current liabilities Non-current uncertain tax position liabilities Deferred revenue — non-current from related parties Deferred revenue — non-current Total liabilities Year ended December 31, 2013 2014 2015 $ $ $ Net revenues Related party Third party Operating cost and expenses Net income attributable to Jupai shareholders Cash flows generated from operating activities: Cash flows (used in) generated from investing activities: ) ) Cash flows generated from (used in) financing activities: ) |
Schedule of product providers accounting for 10% or more of revenues | For Year Ended December 31, 2013 2014 2015 $ $ $ A — — B — — |
Estimated useful lives of property and equipment | Estimated Useful Lives in Years Leasehold improvements Shorter of the lease term or expected useful life Furniture, fixtures, and equipment 3—5 years Motor Vehicles 5 years |
Net Income per Share (Tables)
Net Income per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Net Income per Share | |
Schedule of computation of basic and diluted net income per share attributable to ordinary shareholders | 2013 2014 2015 Net income attributable to ordinary shareholders—basic $ $ $ Amounts allocated to convertible redeemable preferred shares for participating rights to dividends $ $ $ Net income attributable to ordinary shareholders—diluted $ $ $ Weighted average number of ordinary shares outstanding—basic Plus: convertible redeemable preferred shares — Plus: share options — — Weighted average number of ordinary shares outstanding—diluted Basic net income per share Diluted net income per share |
Schedule of antidilutive securities excluded from computation of earning per share | As of December 31, 2013 2014 2015 Share options — Restricted shares — — Convertible redeemable preferred shares — — Total — |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments. | |
Schedule of investment balances | As of December 31, 2014 2015 $ $ Short-term investments - Trading securities investments Trust products - Held-to-maturity investments Trust products Asset management plans Real estate funds — - Available-for-sale investments — Asset management plans — Real estate funds — Total short-term investments Long-term investments - Held-to-maturity investments Trust products Asset management plans Real estate funds - Other long-term investments — Total long-term investments Total investments |
Investment in affiliates (Table
Investment in affiliates (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investment in affiliates | |
Schedule of balances of investment in affiliates | As of December 31 2014 2015 $ % $ % Equity method Shanghai Wuling Investment Center (“Wuling Center”) — — % Shanghai Guochen Equity Management Co., Ltd (“Guochen”) — — % Shenzhen Guojinwenying Fund Management Co, Ltd(“Guojinwenying”) % % Shanghai JupaiHehui Asset management Co., Ltd. (‘‘Hehui’’) % % Others Total equity method investments Cost method Institutions Quotation System Co., Ltd (“ZhongZheng”) — — % Shanghai Star Investment Co., Ltd.(“Star Investment”) — — % Others Total cost method investments Total investments |
Acquisitions of Subsidiaries (T
Acquisitions of Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions of Subsidiaries | |
Summary of the purchase consideration | Amount $ Fair value of Company’s shares issued * Replacement of Scepter’s share options (Note 13) Consideration * The fair value of the 32,481,552 ordinary shares issued by the Company was based on the IPO offering price of the Company’s American depositary shares (“ADS”). |
Schedule of the purchase price allocation | Amount Amortization $ Period Cash and cash equivalents Other current assets Long-term investments Other long-term assets Income tax payable ) Other current liabilities ) Intangible assets acquired: — Contract Backlog 3.5 year Goodwill Deferred tax liabilities ) |
Summary of revenue and earnings since acquisition date | Since the acquisition date 2015 $ Revenue Net income attributable to Jupai |
Summary of unaudited pro forma financial information | Year ended December 31, (In thousands of U.S. dollars) 2014 2015 $ $ Revenues Net income attributable to Jupai |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment, Net | |
Schedule of property and equipment | As of December 31, 2013 2014 2015 $ $ $ Leasehold improvements Furniture, fixtures and equipment Motor Vehicles — — Total Accumulated depreciation ) ) ) Property and equipment, net |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net | |
Schedule of intangible assets subject to amortization | As of December 31, 2015 $ Customer contracts Less: Accumulated amortization ) Intangible assets subject to amortization, net |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill | |
Schedule of movement in carrying amount of goodwill | $ Balance as of January 1, 2014 and December 31, 2014 — Addition for acquisitions Balance as of December 31, 2015 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Share-Based Compensation. | |
Schedule of fair value assumptions for options | July 1, 2014 April 2, 2015 July 16, 2015 Risk-free rate of return % % % Contractual life of option 10 years 10 years 10 years Estimated volatility rate % % % Expected dividend yield % % % Fair value of underlying ordinary shares |
Summary of option activity | Number of Options Weighted Average Exercise Price Remaining Contractual Term Aggregate Intrinsic Value of Options $ $ Outstanding, as of January 1, 2015 — — Granted — — Replacement under the Options Replacement Program — — Forfeited ) — — Outstanding, as of December 31, 2015 Vested and expected to vest as of December 31, 2015 Exercisable as of December 31, 2015 — — — — |
Summary of restricted share activity | Number of Shares Weighted Average Grant-date Fair Value Unvested, as of January 1, 2015 — Granted Forfeited — Unvested, as of December 31, 2015 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Schedule of tax expense (benefit) | Years Ended December 31, 2013 2014 2015 $ $ $ Current Tax Deferred Tax ) ) ) Total |
Schedule of reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes | Years Ended December 31, 2013 2014 2015 PRC income tax rate % % % Expenses not deductible for income tax purposes % % % Uncertain tax position impact % % % Different tax rate of subsidiary operation in other jurisdiction — % % Effective income tax rate % % % |
Schedule of principal components of the deferred income tax asset and liabilities | As of December 31, 2013 2014 2015 $ $ $ Deferred tax assets: Deferred revenue Accrued expenses Discount of investment Tax loss carry forward Investment-in-affiliate impairment — Impairment for a held-to-maturity investment — Exchange gain — Gross deferred tax assets Valuation allowance — — — Net deferred tax assets Analysis as: Current Non-current Deferred tax liabilities: Amortization of intangible assets — — Unrealized investment income Total deferred tax liabilities Analysis as: Current Non-current — — |
Schedule of reconciliation of the beginning and ending amounts of uncertain tax position | $ Uncertain tax position—January 1, 2013 Gross increases—accrued interest in current period Exchange rate translation Uncertain tax position—December 31, 2013 Gross increases—accrued interest in current period Exchange rate translation ) Uncertain tax position—December 31, 2014 Gross increases—accrued interest in current period Exchange rate translation ) Uncertain tax position—December 31, 2015 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurement | |
Schedule of inputs into the fair value measurements of financial assets and financial liabilities measured at fair value on a recurring basis | Fair Value Measurements at Reporting Date Using Description As of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Short-term investment: Trading securities investments — — Fair Value Measurements at Reporting Date Using Description As of December 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Short-term investment: Trading securities investments — — Available-for-sale investments: Asset management plans — — Real estate funds — — |
Schedule of inputs into the fair value measurements of long-term financial instruments not reported at fair value on consolidated balance sheet | Fair Value Measurements at Reporting Date Using As of December 31, 2015 Quoted Prices in Active Markets Significant Other Significant Unobservable Description Carrying Value Fair Value for Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) Long-term investment-held-to-maturity Trust products — — Asset management plans — — Real estate funds — — Fair Value Measurements at Reporting Date Using As of December 31, 2014 Quoted Prices in Active Markets Significant Other Significant Unobservable Description Carrying Value Fair Value for Identical Assets (Level 1) Observable Inputs (Level 2) Inputs (Level 3) Long-term investment: Trust products — — Asset management plans — — Real estate funds — — Long term entrusted investments — — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Information | |
Schedule of segment reporting information | Year Ended December 31, 2013 2014 2015 $ $ $ One-time commissions Related party Third party Recurring management fee Related party Third party — — Recurring service fees Related party — — Third party Total revenues |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Schedule of related party transactions | Company Name Relationship with the Group Juxi Affiliate of Shanghai Jupai Hehui Affiliate of Juzhou a. Revenue from Related Parties Years Ended December 31 2013 2014 2015 $ $ $ One-time commissions Juxi — — Hehui — — Investees of Affiliates of Juzhou, a subsidiary of a VIE of the Company — Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Jupeng, a subsidiary of a VIE of the Company — — Investees of Mingdu, a subsidiary of a VIE of the Company — — Investees of Yidezeng, a subsidiary of a VIE of the Company — — Investees of Yidezhen, a subsidiary of a VIE of the Company — — Investees of Yiju, a subsidiary of a VIE of the Company — — Total one-time commissions Recurring management fee Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Jupeng, a subsidiary of a VIE of the Company — — Investees of Mingdu, a subsidiary of a VIE of the Company — — Investees of Yidezhen, a subsidiary of a VIE of the Company — — Investees of Yidezeng, a subsidiary of a VIE of the Company — — Investees of Yidexin, a subsidiary of a VIE of the Company — — Investees of Yidezhao, a subsidiary of a VIE of the Company — — Investees of Yiju, a subsidiary of a VIE of the Company — — Total recurring management fee Recurring service fee Investees of Affiliates of Juzhou, a subsidiary of a VIE of the Company — — Investees of Affiliates of Yidezeng, a subsidiary of a VIE of the Company — — Total recurring service fee Total b. Amounts due from Related Parties As of December 31, 2014 2015 $ $ Hehui — Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Affiliates of Juzhou, a subsidiary of a VIE of the Company — Investees of Jupeng, a subsidiary of a VIE of the Company — Investees of Yidexin, a subsidiary of a VIE of the Company — Investees of Yidezhen, a subsidiary of a VIE of the Company — Investees of Yidezeng, a subsidiary of a VIE of the Company — Investees of Yidezhao, a subsidiary of a VIE of the Company — Total amounts due from related parties c. Amount due to Related Parties As of December 31, 2014 2015 $ $ Investee of Affiliates of Juzhou, a subsidiary of a VIE of the Company Investees of Juzhou, a subsidiary of a VIE of the Company Investees of Jupeng, a subsidiary of a VIE of the Company Investees of Yidezhen, a subsidiary of a VIE of the Company Investees of Yidezeng, a subsidiary of a VIE of the Company Total amounts due from related parties d. Amounts due to Related Party for Issuance of Ordinary Shares As of December 31, 2014 2015 $ $ Sina Hong Kong Limited |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments | |
Schedule of future minimum lease payments under non-cancelable operating lease agreements | Future minimum lease payments under non-cancelable operating lease agreements as of December 31, 2015 were as follows: Year Ended December 31 $ 2016 2017 2018 2019 2020 and after Total |
Schedule of investment commitments | The Group was obligated to provide capital injection up to $7,760,492 to the following equity method investees as of December 31, 2015: Year Ended December 31 $ Guojinwenying Shanghai HuijuAsset Management Co., Ltd. Shanghai Jingzhou Asset Management Co., Ltd. Zipai Shanghai Jufu Assets Management Co., Ltd. Xinhao Qianchang Shanghai Zhouzhi Investment Management Co., Ltd. Shanghai Zhoushi Asset Management Co., Ltd. Hehui Others Total |
Organization and Principal Ac49
Organization and Principal Activities (Details) | 1 Months Ended | 12 Months Ended | |
Jul. 31, 2015 | Dec. 31, 2015 | Jul. 28, 2010 | |
Hu Tianxiang | Minimum | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Percentage of Ownership | 50.00% | ||
Juzhou Asset Management (Shanghai) Co., Ltd. ("Juzhou") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | May 17, 2013 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 85.00% | ||
Shanghai Jupai Yumao Fund Sales Co., Ltd. | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Feb. 26, 2014 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
Shanghai Jupeng Asset Management Co., Ltd. ("Jupeng") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jun. 8, 2015 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 90.00% | ||
Shanghai Yidexin Equity Investment Management Co., Ltd ("Yidexin") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jul. 16, 2015 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
Shanghai Yidezeng Equity Investment Center ("Yidezeng") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jul. 16, 2015 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
Shanghai Yidezhen Equity Investment Center ("Yidezhen") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jul. 16, 2015 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
Shanghai Yidezhao Equity Investment Center ("Yidezhao") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jul. 16, 2015 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
Shanghai Juxiang | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jul. 16, 2013 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
Baoyi Investment Consulting (Shanghai) Co., Ltd ("Baoyi") | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Date of Incorporation/acquisition | Jul. 16, 2015 | ||
Place of Incorporation | PRC | ||
Percentage of Ownership | 100.00% | ||
E-house Investment and Reckon Capital Limited | Scepter Pacific Limited | |||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | |||
Consideration as a percentage of the total equity interest (in percentage) | 100.00% |
Summary of Significant Accoun50
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Variable interest entity | ||||
Cash and cash equivalents | $ 122,504,799 | $ 31,557,233 | $ 5,343,342 | $ 959,595 |
Short-term investments | 11,156,616 | 10,661,372 | ||
Short-term entrusted investment | 287,797 | 2,215,083 | ||
Accounts receivable, net of allowance for doubtful accounts | 4,005,258 | 793,037 | ||
Trade and other receivables | 5,164,971 | 2,121,264 | ||
Amounts due from related parties | 1,836,209 | 2,389,925 | ||
Customer Borrowing | 549,856 | |||
Deferred tax assets | 7,087,092 | 2,595,112 | ||
Other current assets | 1,025,526 | 656,838 | ||
Long-term investments | 9,988,168 | 8,727,495 | ||
Long-term entrusted investment | 1,068,496 | |||
Advance prepayment for acquisition | 14,612,634 | |||
Investment in affiliates | 11,577,995 | 2,284,687 | ||
Property and equipment, net | 2,473,964 | 1,359,615 | 463,142 | |
Deferred tax assets- non-current | 1,243,313 | 121,397 | ||
Total Assets | 241,684,476 | 67,313,863 | ||
Accrued payroll and welfare expenses | 12,443,966 | 2,247,414 | ||
Income tax payable | 15,913,670 | 4,800,181 | ||
Other tax payable | 6,039,794 | 1,596,511 | ||
Dividend payable | 1,154,983 | |||
Deferred revenue - current from related parties | 12,897,658 | 5,287,903 | ||
Deferred revenues - current | 8,956,195 | 3,462,149 | ||
Other current liabilities | 730,405 | 2,070,081 | ||
Non-current uncertain tax position liabilities | 827,315 | 785,372 | ||
Deferred revenue - non-current from related parties | 4,729,030 | 131,855 | ||
Deferred revenue - non-current | 548,464 | 353,739 | ||
Total Liabilities | 71,629,485 | 20,735,205 | ||
Net revenues | 94,351,566 | 38,912,369 | 22,430,621 | |
Operating cost and expenses | 62,021,846 | 21,071,062 | 11,183,550 | |
Net income attributable to Jupai shareholders | 24,337,013 | 14,372,300 | 9,155,065 | |
Cash flows generated from operating activities: | 55,701,144 | 24,443,395 | 17,306,401 | |
Cash flows (used in) generated from investing activities: | (9,325,417) | (6,046,958) | (15,137,840) | |
Cash flows generated from (used in) financing activities: | $ 47,735,317 | 7,761,042 | 2,125,112 | |
Shanghai Jupai | ||||
Variable interest entity | ||||
Notice period for termination of voting rights proxy agreement with VIE | 30 days | |||
Consolidated VIE and VIE's subsidiaries | ||||
Variable interest entity | ||||
Cash and cash equivalents | $ 45,733,305 | 15,841,430 | ||
Short-term investments | 5,161,333 | 2,644,570 | ||
Short-term entrusted investment | 2,215,083 | |||
Accounts receivable, net of allowance for doubtful accounts | 424,444 | 240,355 | ||
Trade and other receivables | 2,331,004 | 1,318,689 | ||
Amounts due from related parties | 1,438,538 | 203,032 | ||
Customer Borrowing | 549,856 | |||
Deferred tax assets | 6,257,574 | 1,809,115 | ||
Other current assets | 798,809 | 147,441 | ||
Long-term investments | 1,324,803 | |||
Long-term entrusted investment | 65,290 | |||
Advance prepayment for acquisition | 2,668,566 | |||
Investment in affiliates | 11,476,720 | 813,858 | ||
Property and equipment, net | 1,445,245 | 888,447 | ||
Deferred tax assets- non-current | 1,243,313 | |||
Total Assets | 78,978,851 | 28,061,969 | ||
Accrued payroll and welfare expenses | 4,322,940 | 748,864 | ||
Income tax payable | 9,505,352 | 1,680,295 | ||
Other tax payable | 2,942,691 | 672,824 | ||
Dividend payable | 1,154,983 | |||
Deferred revenue - current from related parties | 12,043,558 | 5,287,903 | ||
Deferred revenues - current | 7,664,939 | 1,236,326 | ||
Other current liabilities | 324,353 | 223,087 | ||
Non-current uncertain tax position liabilities | 827,315 | 785,372 | ||
Deferred revenue - non-current from related parties | 4,424,788 | 131,855 | ||
Deferred revenue - non-current | 548,464 | 353,739 | ||
Total Liabilities | 43,759,383 | 11,120,265 | ||
Net revenues | 38,081,686 | 4,408,032 | 15,257,312 | |
Related party revenues | 25,329,756 | 1,465,273 | 2,270,991 | |
Third party revenues | 12,751,930 | 2,942,759 | 12,986,321 | |
Operating cost and expenses | 26,429,339 | 4,019,671 | 10,838,598 | |
Net income attributable to Jupai shareholders | 7,785,436 | 1,491,269 | 3,956,086 | |
Cash flows generated from operating activities: | 36,661,761 | 10,104,999 | 9,740,185 | |
Cash flows (used in) generated from investing activities: | (4,769,816) | 3,231,375 | (8,742,382) | |
Cash flows generated from (used in) financing activities: | $ (171,272) | $ 31,891 | $ 625,112 | |
Shanghai E-Cheng | ||||
Variable interest entity | ||||
Voting right proxy agreement (in years) | 20 years | |||
Extension term of agreement (in years) | 1 year | |||
Term of loan agreement (in years) | 20 years |
Summary of Significant Accoun51
Summary of Significant Accounting Policies (Details 2) - item | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Variable interest entity | |||
Number of terms in arrangements to provide financial support to VIEs | 0 | ||
Consolidated VIE and VIE's subsidiaries | |||
Variable interest entity | |||
Percentage of consolidated revenues contributed by VIE | 40.00% | 11.00% | 68.00% |
Percentage of consolidated net income contributed by VIE | 32.00% | 12.00% | 42.00% |
Percentage of consolidated total assets contributed by VIE | 33.00% | 42.00% |
Summary of Significant Accoun52
Summary of Significant Accounting Policies (Details 3) | 12 Months Ended |
Dec. 31, 2013USD ($) | |
Customer A | |
Major customers | |
Revenues | $ 2,633,095 |
Customer B | |
Major customers | |
Revenues | $ 2,050,262 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies (Details 4) | 12 Months Ended | |
Dec. 31, 2015USD ($) | Dec. 31, 2014loan | |
Summary of Principal Accounting Policies | ||
Interest rate on customer borrowings (as a percent) | 0.00% | |
Maximum term of customer borrowings | 1 year | |
Number of loans from customer borrowings overdue | loan | 0 | |
Short term borrowings to customers | $ | $ 0 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Details 5) - USD ($) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2015 | |
Juxi | ||
Investments in affiliates | ||
Impairment loss recognized from affiliate | $ 131,165 | |
Funds | Maximum | ||
Investments in affiliates | ||
Equity method investment, ownership percentage (in percentage) | 5.00% |
Summary of Significant Accoun55
Summary of Significant Accounting Policies (Details 6) | 12 Months Ended |
Dec. 31, 2015 | |
Furniture, fixtures and equipment | Minimum | |
Property and Equipment, Net | |
Useful life (in years) | 3 years |
Motor Vehicles | |
Property and Equipment, Net | |
Useful life (in years) | 5 years |
Summary of Significant Accoun56
Summary of Significant Accounting Policies (Details 7) | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Revenue recognition | |||
Number of criteria to be met for recognition of revenue from one-time commissions | item | 2 | ||
Business Tax and Related Surcharges | |||
Business taxes and related surcharge rate, minimum (as a percentage) | 3.00% | ||
Business taxes and related surcharge rate, maximum (as a percentage) | 6.00% | ||
Goodwill and Intangible Asset Impairment [Abstract] | |||
Goodwill, Impairment Loss | $ 0 | ||
Government Grants | |||
Cash subsidies | $ 3,755,759 | $ 2,363,893 | $ 777,415 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Income per Share | |||
Net income attributable to ordinary shareholders - basic | $ 19,167,718 | $ 4,978,561 | $ 9,076,420 |
Amounts allocated to convertible redeemable preferred shares for participating rights to dividends | 5,169,295 | 1,830,070 | 78,645 |
Net income attribute to ordinary shareholders | $ 24,337,013 | $ 6,808,631 | $ 9,155,065 |
Weighted average number of ordinary shares outstanding - basic | 114,124,300 | 83,683,960 | 100,000,000 |
Plus: convertible redeemable preferred shares | 30,761,401 | 866,480 | |
Plus: share options | 5,474,647 | ||
Weighted average number of ordinary shares outstanding-diluted | 119,598,947 | 114,445,361 | 100,866,480 |
Basic net income per share | $ 0.17 | $ 0.06 | $ 0.09 |
Diluted net income per share | $ 0.16 | $ 0.06 | $ 0.09 |
Net Income per Share (Details 2
Net Income per Share (Details 2) - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total | 37,044,906 | 12,028,400 |
Share options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total | 3,586,600 | 12,028,400 |
Non-vested restricted shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total | 2,680,400 | |
Convertible redeemable preferred shares. | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Total | 30,777,906 |
Investments (Details)
Investments (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Short-term investments | ||
Trading securities investments | $ 1,043,550 | $ 685,864 |
Held-to-maturity investments | 10,113,066 | 8,332,241 |
Available-for-sale investments | 1,643,267 | |
Total short-term investments | 11,156,616 | 10,661,372 |
Long-term investments | ||
Held-to-maturity investments | 6,908,212 | 8,727,495 |
Other long- term investments | 3,079,956 | |
Total long-term investments | 9,988,168 | 8,727,495 |
Total investments | 21,144,784 | 19,388,867 |
Trust products | ||
Short-term investments | ||
Trading securities investments | 1,043,550 | 685,864 |
Held-to-maturity investments | 2,408,538 | 522,961 |
Long-term investments | ||
Held-to-maturity investments | 4,600,830 | 2,535,252 |
Asset management plans | ||
Short-term investments | ||
Held-to-maturity investments | 7,704,528 | 7,027,956 |
Available-for-sale investments | 1,143,978 | |
Long-term investments | ||
Held-to-maturity investments | 792,561 | 3,332,299 |
Real estate funds | ||
Short-term investments | ||
Held-to-maturity investments | 781,324 | |
Available-for-sale investments | 499,289 | |
Long-term investments | ||
Held-to-maturity investments | $ 1,514,821 | $ 2,859,944 |
Investments (Details 2)
Investments (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain (Loss) on Investments [Line Items] | |||
Impairment loss | $ 507,429 | $ 130,740 | |
Fair value of investments | 1,643,267 | ||
Trading securities transferred | 0 | ||
Available-for-sale securities transferred | 0 | ||
Held-to-maturity securities transferred | 0 | ||
Cost method investments | 6,229,210 | 245,138 | |
Asset management plans | |||
Gain (Loss) on Investments [Line Items] | |||
Fair value of investments | 1,143,978 | ||
Real estate funds | |||
Gain (Loss) on Investments [Line Items] | |||
Fair value of investments | 499,289 | ||
Cost method investments | $ 1,539,978 | ||
Real estate funds and private equity funds | Maximum | |||
Gain (Loss) on Investments [Line Items] | |||
Cost method investment, ownership percentage (in percentage) | 3.00% | ||
Private equity fund | |||
Gain (Loss) on Investments [Line Items] | |||
Cost method investments | $ 1,539,978 | ||
Trading securities | |||
Gain (Loss) on Investments [Line Items] | |||
Investment income | 602,808 | 200,214 | $ 163,004 |
Held-to-maturity investments | |||
Gain (Loss) on Investments [Line Items] | |||
Long-term held-to-maturity investments mature in 2017 | 6,908,212 | ||
Impairment loss | 507,429 | 130,740 | 0 |
Gross unrecognized holding gain | 141,052 | 434,680 | |
Held-to-maturity investments | Trust products | |||
Gain (Loss) on Investments [Line Items] | |||
Investment income | 483,166 | 363,750 | 517,346 |
Held-to-maturity investments | Asset management plans | |||
Gain (Loss) on Investments [Line Items] | |||
Investment income | 796,460 | 829,407 | 97,681 |
Held-to-maturity investments | Real estate funds | |||
Gain (Loss) on Investments [Line Items] | |||
Investment income | 374,142 | 100,395 | $ 314,548 |
Available-for-sale investments | |||
Gain (Loss) on Investments [Line Items] | |||
Other-than-temporary impairment loss | 0 | 0 | |
Available-for-sale investments | Asset management plans | |||
Gain (Loss) on Investments [Line Items] | |||
Investment income | 206,845 | 0 | |
Fair value of investments | 0 | 1,143,978 | |
Unrealized loss | 0 | 0 | |
Available-for-sale investments | Real estate funds | |||
Gain (Loss) on Investments [Line Items] | |||
Fair value of investments | $ 0 | $ 499,289 |
Investment in affiliates (Detai
Investment in affiliates (Details) | 1 Months Ended | 8 Months Ended | 12 Months Ended | |||
Sep. 30, 2014 | Aug. 31, 2014 | Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2014CNY (¥) | Dec. 31, 2014USD ($) | |
Investment in affiliates | ||||||
Equity method investments | $ 5,348,785 | $ 2,039,549 | ||||
Cost method investments | 6,229,210 | 245,138 | ||||
Total investments | 11,577,995 | 2,284,687 | ||||
Wuling Center | ||||||
Investment in affiliates | ||||||
Equity method investments | $ 1,550,359 | |||||
Equity method investment, ownership percentage (in percentage) | 1.10% | 1.10% | ||||
Guochen | ||||||
Investment in affiliates | ||||||
Equity method investments | $ 709,576 | |||||
Equity method investment, ownership percentage (in percentage) | 8.30% | 8.30% | ||||
Guojinwenying | ||||||
Investment in affiliates | ||||||
Equity method investments | $ 701,714 | $ 735,414 | ||||
Equity method investment, ownership percentage (in percentage) | 45.00% | 45.00% | 45.00% | 45.00% | ||
Equity method investment, cost | ¥ | ¥ 4,500,000 | |||||
Hehui | ||||||
Investment in affiliates | ||||||
Equity method investments | $ 587,337 | $ 560,549 | ||||
Equity method investment, ownership percentage (in percentage) | 49.00% | 49.00% | 49.00% | 49.00% | ||
Ownership percentage before sale of stock (in percentage) | 65.00% | |||||
Ownership percentage disposed (in percentage) | 16.00% | |||||
Ownership percentage after sale of stock (in percentage) | 49.00% | |||||
ZhongZheng | ||||||
Investment in affiliates | ||||||
Cost method investments | $ 4,619,933 | |||||
Cost method investment, ownership percentage (in percentage) | 1.00% | 1.00% | ||||
Cost method investment, original cost | ¥ 30,000,000 | $ 4,884,243 | ||||
Star Investment | ||||||
Investment in affiliates | ||||||
Cost method investments | $ 1,378,280 | |||||
Cost method investment, ownership percentage (in percentage) | 9.00% | 9.00% | ||||
Others | ||||||
Investment in affiliates | ||||||
Equity method investments | $ 1,799,799 | $ 743,586 | ||||
Cost method investments | $ 230,997 | $ 245,138 | ||||
Shanghai Yidezhao Equity Investment Center ("Yidezhao") | Guochen | ||||||
Investment in affiliates | ||||||
Equity method investment, ownership percentage (in percentage) | 8.30% | 8.30% | ||||
Equity method investment, cost | ¥ 2,500,000 | $ 408,563 | ||||
Shanghai Yidezeng Equity Investment Center ("Yidezeng") | Star Investment | ||||||
Investment in affiliates | ||||||
Cost method investment, ownership percentage (in percentage) | 9.00% | 9.00% | ||||
Shanghai Yidezhen Equity Investment Center ("Yidezhen") | Wuling Center | ||||||
Investment in affiliates | ||||||
Equity method investment, ownership percentage (in percentage) | 1.10% | 1.10% |
Acquisitions of Subsidiaries (D
Acquisitions of Subsidiaries (Details) - USD ($) | 1 Months Ended | 5 Months Ended | 12 Months Ended | ||
Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Purchase price allocation | |||||
Goodwill | $ 39,995,458 | $ 39,995,458 | |||
Net income | 24,337,013 | $ 14,372,300 | $ 9,155,065 | ||
Pro forma results (Unaudited) | |||||
Revenues | 99,101 | 45,933 | |||
Net income attributable to Jupai | $ 26,126 | $ 15,088 | |||
Scepter Pacific Limited | |||||
Business Acquisition [Line Items] | |||||
Ordinary shares issued for acquisition | 32,481,552 | ||||
Purchase price allocation | |||||
Revenues | 4,056,792 | ||||
Net income | $ 1,790,490 | ||||
Scepter Pacific Limited | Contract Backlog | |||||
Purchase price allocation | |||||
Intangible assets acquired: Contract Backlog , amortization period | 3 years 6 months | ||||
Scepter Pacific Limited | E-house Investment and Reckon Capital Limited | |||||
Business Acquisition [Line Items] | |||||
Percentage of equity interest acquired | 100.00% | ||||
Ordinary shares issued for acquisition | 32,481,552 | ||||
Purchase price allocation | |||||
Cash and cash equivalents | $ 5,828,615 | ||||
Other current assets | 2,929,003 | ||||
Long-term investments | 4,872,731 | ||||
Other long-term assets | 228,166 | ||||
Income tax payable | (2,047,784) | ||||
Other current liabilities | (2,707,310) | ||||
Goodwill | 39,995,458 | ||||
Deferred tax liabilities | (2,425,650) | ||||
Total purchase price | 56,375,829 | ||||
Scepter Pacific Limited | E-house Investment and Reckon Capital Limited | Contract Backlog | |||||
Purchase price allocation | |||||
Intangible assets acquired: Contract Backlog | 9,702,600 | ||||
Scepter Pacific Limited | |||||
Business Acquisition [Line Items] | |||||
Fair value of Company's shares issued | 54,135,920 | ||||
Replacement of Scepter's share options (Note 13) | 2,239,909 | ||||
Consideration | $ 56,375,829 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment, Net | |||
Total | $ 3,798,477 | $ 1,844,793 | $ 572,047 |
Accumulated depreciation | (1,324,513) | (485,178) | (108,905) |
Property and equipment, net | 2,473,964 | 1,359,615 | 463,142 |
Depreciation expense | 793,991 | 358,407 | 84,909 |
Leasehold improvements | |||
Property and Equipment, Net | |||
Total | 1,995,562 | 1,002,134 | 262,460 |
Furniture, fixtures and equipment | |||
Property and Equipment, Net | |||
Total | 1,371,510 | $ 842,659 | $ 309,587 |
Motor Vehicles | |||
Property and Equipment, Net | |||
Total | $ 431,405 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-lived intangible assets | |||
Customer contracts | $ 9,702,600 | ||
Less : Accumulated amortization | (1,270,579) | ||
Intangible assets subject to amortization, net | 8,432,021 | ||
Amortization expense | 1,270,579 | $ 0 | $ 0 |
Future amortization expense | |||
2,016 | 2,772,171 | ||
2,017 | 2,772,171 | ||
2,018 | 2,772,171 | ||
2,019 | $ 115,508 |
Goodwill - Carrying amount of g
Goodwill - Carrying amount of goodwill (Details) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Movement in carrying amount of goodwill | |
Addition for acquisitions | $ 39,995,458 |
Balance at the end | 39,995,458 |
Impairment of goodwill | $ 0 |
Prepayment for acquisition (Det
Prepayment for acquisition (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Prepayment for acquisition | |||
Advance prepayment for acquisition | $ 14,612,634 | ||
Runju | |||
Prepayment for acquisition | |||
Advance prepayment for acquisition | ¥ 77.6 | $ 11,900,000 | |
Percentage of equity interest acquired | 71.00% | 71.00% | 71.00% |
Runju | Existing individual shareholders | |||
Prepayment for acquisition | |||
Advance prepayment for acquisition | $ 6,775,902 | ||
Runju | Shanghai Kushuo Information Technology Co., Ltd | |||
Prepayment for acquisition | |||
Advance prepayment for acquisition | 5,168,166 | ||
Yixun | |||
Prepayment for acquisition | |||
Advance prepayment for acquisition | $ 2,668,566 | ||
Percentage of equity interest acquired | 78.00% | 78.00% | 78.00% |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred revenue | ||
Deferred revenue from related parties | $ 17,626,688 | $ 5,419,758 |
Deferred revenue - current from related parties | 12,897,658 | 5,287,903 |
Deferred revenue - non-current from related parties | 4,729,030 | 131,855 |
Deferred revenue from third parties | 9,504,659 | $ 3,815,888 |
Deferred revenue from third parties-Current | 8,956,195 | |
Deferred revenue from third parties-Non current | $ 548,464 |
Dividends (Details)
Dividends (Details) - Scepter Pacific Limited - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Jun. 30, 2014 | |
Dividend payable | $ 5,119,632 | |
Dividend paid | $ 3,964,649 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - $ / shares | Apr. 02, 2015 | Jul. 01, 2014 | Dec. 31, 2015 | Jul. 31, 2014 | Dec. 31, 2015 |
Share options | |||||
Share-Based Compensation | |||||
Options granted (in shares) | 1,061,600 | 12,056,000 | |||
Options exercised (in dollars per share) | $ 1 | $ 0.48 | |||
Expiration period of awards granted | 10 years | ||||
Vesting period | 3 years | ||||
2014 Plan | |||||
Share-Based Compensation | |||||
Ordinary shares initially authorized under the Plan | 26,938,020 | 17,570,281 | 26,938,020 | ||
Percent of ordinary shares authorized to increase on each of the third, sixth and ninth anniversaries of the effective date | 5.00% | ||||
Increase in ordinary shares authorized under the Plan | 9,367,739 | ||||
2014 Plan | Share options | |||||
Share-Based Compensation | |||||
Options granted (in shares) | 1,061,600 |
Share-Based Compensation (Det70
Share-Based Compensation (Details 2) - USD ($) | Aug. 26, 2015 | Jul. 16, 2015 | Apr. 02, 2015 | Jul. 01, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Fair value assumptions for options | |||||||
Risk-free rate of return (as a percent) | 2.96% | 2.52% | 3.18% | ||||
Contractual life of option | 10 years | 10 years | 10 years | ||||
Estimated volatility rate (as a percent) | 58.85% | 58.86% | 60.57% | ||||
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | ||||
Fair value of underlying ordinary shares (in dollars per share) | $ 1.67 | $ 1.24 | $ 0.60 | ||||
Compensation expense | $ 2,520,565 | $ 498,756 | $ 0 | ||||
Options exercised | 0 | 0 | |||||
2014 Plan | |||||||
Fair value assumptions for options | |||||||
Replacement options | 2,525,000 | ||||||
Number of Options | |||||||
Replacement under the Options Replacement Program | 2,525,000 | ||||||
Scepter Plan | |||||||
Fair value assumptions for options | |||||||
Options replaced | 505,000 | ||||||
Options Replacement Program | |||||||
Fair value assumptions for options | |||||||
Share based compensation costs capitalized | $ 2,239,909 | ||||||
Unrecognized compensation expense | $ 600,761 | ||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 1 year 8 months 12 days | ||||||
Share options | |||||||
Fair value assumptions for options | |||||||
Vesting period | 3 years | ||||||
Number of Options | |||||||
Granted (in shares) | 1,061,600 | 12,056,000 | |||||
Share options | 2014 Plan | |||||||
Fair value assumptions for options | |||||||
Replacement options | 2,525,000 | ||||||
Unrecognized compensation expense | $ 3,428,129 | ||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 1 year 7 months 6 days | ||||||
Number of Options | |||||||
Outstanding at beginning of period (in shares) | 12,028,400 | ||||||
Granted (in shares) | 1,061,600 | ||||||
Replacement under the Options Replacement Program | 2,525,000 | ||||||
Forfeited (in shares) | (548,900) | ||||||
Outstanding at end of period (in shares) | 15,066,100 | 12,028,400 | |||||
Vested and expected to vest (in shares) | 13,971,533 | ||||||
Exercise Price | |||||||
Outstanding at beginning of period (in dollars per share) | $ 0.48 | ||||||
Granted (in dollars per share) | 1 | ||||||
Replacement under the Options Replacement Program (in dollars per share) | 0.73 | ||||||
Forfeited (in dollars per share) | 0.48 | ||||||
Outstanding at end of year (in dollars per share) | 0.56 | $ 0.48 | |||||
Vested and expected to vest (in dollars per share) | $ 0.56 | ||||||
Remaining Contractual Term | |||||||
Outstanding at end of year (in years) | 8 years 7 months 6 days | ||||||
Vested and expected to vest (in years) | 8 years 7 months 6 days | ||||||
Aggregate Intrinsic Value of Options | |||||||
Outstanding at end of year | $ 1.1 | ||||||
Vested and expected to vest | $ 1.1 | ||||||
Non-vested restricted shares | |||||||
Fair value assumptions for options | |||||||
Vesting period | 3 years | ||||||
Compensation expense | $ 623,558 | ||||||
Fair value of non-vested restricted shares vested | $ 3,886,580 | ||||||
Number of Options | |||||||
Unvested, at end of period | 2,680,400 | ||||||
Weighted Average Grant-date Fair Value | |||||||
Unvested, at end of period | $ 1.45 | ||||||
Non-vested restricted shares | 2014 Plan | |||||||
Fair value assumptions for options | |||||||
Restricted shares granted | 2,680,400 | ||||||
Unrecognized compensation expense | $ 3,263,022 | ||||||
Weighted average remaining period over which unrecognized compensation expense will be recognized | 2 years 6 months | ||||||
Number of Options | |||||||
Granted | 2,680,400 | ||||||
Weighted Average Grant-date Fair Value | |||||||
Granted | $ 1.45 | ||||||
Non-vested restricted shares | Senior management and independent directors | |||||||
Fair value assumptions for options | |||||||
Restricted shares granted | 2,680,400 | ||||||
Number of Options | |||||||
Granted | 2,680,400 | ||||||
Weighted Average Grant-date Fair Value | |||||||
Granted | $ 1.45 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
The tax expense (benefit) comprises: | |||
Current Tax | $ 16,465,368 | $ 7,558,626 | $ 3,612,357 |
Deferred Tax | (5,801,984) | (1,941,283) | (409,477) |
Total | $ 10,663,384 | $ 5,617,343 | $ 3,202,880 |
Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes | |||
PRC income tax rate | 25.00% | 25.00% | 25.00% |
Expenses not deductible for income tax purposes | 3.71% | 1.83% | 0.11% |
Uncertain tax position impact | 0.24% | 0.46% | 0.74% |
Different tax rate of subsidiary operation in other jurisdiction | 0.27% | 0.56% | |
Effective income tax rate | 29.22% | 27.85% | 25.85% |
Deferred tax assets: | |||
Deferred revenue | $ 6,510,660 | $ 2,038,708 | $ 304,522 |
Accrued expenses | 293,896 | 569,311 | 398,470 |
Discount of investment | 49,479 | 91,948 | 117,315 |
Tax loss carry forward | 1,420,631 | 197,038 | 19,329 |
Investment-in-affiliate impairment | 33,178 | 33,298 | |
Impairment for a held-to-maturity investment | 153,998 | 32,685 | |
Exchange gain | 109,429 | 3,988 | |
Gross deferred tax assets | 8,538,093 | 2,966,856 | 872,934 |
Net deferred tax assets | 8,538,093 | 2,966,856 | 872,934 |
Analysis as: | |||
Current | 7,294,780 | 2,845,459 | 787,842 |
Non-current | 1,243,313 | 121,397 | 85,092 |
Deferred tax liabilities: | |||
Amortization of intangible assets | 2,108,005 | ||
Unrealized investment income | 207,688 | 250,347 | 82,777 |
Total deferred tax liabilities | 2,315,693 | 250,347 | 82,777 |
Analysis as: | |||
Current | 207,688 | $ 250,347 | $ 82,777 |
Non-current | $ 2,108,005 | ||
HONG KONG | |||
Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes | |||
Foreign income tax rate | 16.50% |
Income Taxes (Details 2)
Income Taxes (Details 2) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Undistributed earnings | |
Undistributed earnings of the Company's PRC subsidiaries | $ 61,200,000 |
Provision for PRC dividend withholding tax | $ 0 |
Withholding tax rate of the profit distribution (as a percent) | 10.00% |
Preferential withholding tax rate of the profit distribution (as a percent) | 5.00% |
Aggregate undistributed earnings of the Company's PRC VIE and its' VIE's subsidiaries | $ 17,300,000 |
PRC | |
Operating loss carryforwards | |
Operating loss carry forward | 5,682,524 |
Operating loss carry forward, valuation allowance | 0 |
Minimum | |
Undistributed earnings | |
Unrecognized deferred tax liabilities for undistributed earnings | 3,060,000 |
Maximum | |
Undistributed earnings | |
Unrecognized deferred tax liabilities for undistributed earnings | $ 6,120,000 |
Income Taxes (Details 3)
Income Taxes (Details 3) ¥ in Millions | 12 Months Ended | ||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) | |
Uncertain tax position | |||||
Uncertain tax position, beginning balance | $ 785,372 | $ 695,292 | $ 584,292 | ||
Gross increases - accrued interest in current period | 92,591 | 91,511 | $ 87,249 | ||
Exchange rate translation, increase | 19,489 | ||||
Exchange rate translation, decrease | (45,306) | (2,511) | |||
Uncertain tax position, ending balance | $ 827,315 | $ 785,372 | $ 695,292 | ||
PRC | |||||
Uncertain tax position | |||||
Statue of limitations, computational errors | 3 years | ||||
Statue of limitations, special circumstances | 5 years | ||||
Threshold of underpayment of tax liability for statute of limitations extended to five years | ¥ | ¥ 0.1 | ||||
Statue of limitations, related party transaction | 10 years | ||||
Statue of limitations, tax evasion | 0 years |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Benefit Plans | |||
Contributions to employee benefit plan | $ 3.9 | $ 1.8 | $ 1.3 |
Ongoing obligation to employees subsequent to contributions to employee benefit plans | $ 0 |
Restricted Net Assets (Details)
Restricted Net Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
PRC subsidiaries, VIE and VIE's subsidiaries | ||
Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries [Line Items] | ||
Required percentage of annual appropriations to general reserve fund | 15.00% | |
Limit of general reserve fund as a percentage of registered capital, after which allocations to general reserve fund are no longer required | 50.00% | |
General reserve fund | $ 6,868,210 | $ 3,615,528 |
Share capital | 51,322,054 | 12,795,780 |
Restricted net assets, including general reserve and registered capital | 58,190,265 | 16,411,308 |
PRC VIE and VIE's subsidiaries | ||
Restricted Net Assets for Consolidated and Unconsolidated Subsidiaries [Line Items] | ||
Restricted net assets, including general reserve and registered capital | $ 22,673,978 | $ 7,952,004 |
Convertible Redeemable Prefer76
Convertible Redeemable Preferred Shares (Details) | Jul. 16, 2015 | Dec. 16, 2014USD ($)$ / sharesshares | Aug. 22, 2014USD ($)shares | May. 22, 2014CNY (¥)shares | May. 22, 2014USD ($)$ / sharesshares | Oct. 18, 2013USD ($)$ / sharesshares | Dec. 31, 2014$ / shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014CNY (¥)shares | May. 21, 2014 |
Temporary Equity [Line Items] | ||||||||||
Minimum valuation amount of entity in public offering for conversion of preferred shares | ¥ | ¥ 720,000,000 | |||||||||
Minimum amount of gross proceeds received from public offering for conversion of preferred shares | ¥ | ¥ 50,000,000 | |||||||||
Beneficial conversion feature attributable to the Series A and B shares issued | $ | $ 0 | |||||||||
Net impact on the consolidated balance sheet | $ | $ 0 | |||||||||
Liquidation preference as a percentage of issue price (in percentage) | 100.00% | 150.00% | ||||||||
Period from issuance that redemption is contingent upon closing of QIPO | 5 years | |||||||||
Preferred shares conversion ratio | 1 | |||||||||
Preferred shares, issued | 0 | |||||||||
Preferred shares, outstanding | 0 | |||||||||
Series A convertible redeemable preferred shares | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible redeemable preferred shares, par value (in dollars per share) | $ / shares | $ (0.0005) | $ (0.0005) | ||||||||
Redemption period | 5 years | |||||||||
Preferred shares, issued | 0 | 4,216,867 | ||||||||
Preferred shares, outstanding | 0 | 4,216,867 | ||||||||
Series B convertible redeemable preferred shares | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible redeemable preferred shares, par value (in dollars per share) | $ / shares | $ (0.0005) | $ (0.0005) | ||||||||
Deemed dividend | $ | $ 1,550,200 | $ 4,204,901 | ||||||||
Deemed dividend (in dollars per share) | $ / shares | $ 1.04 | $ 0.60 | ||||||||
Fair value of ordinary shares (in dollars per share) | $ / shares | $ 0.92 | $ 0.44 | ||||||||
Beneficial conversion feature re-desiginated from ordinary shares | $ | $ 1,808,568 | |||||||||
Effective conversion price | $ / shares | $ 0.78 | |||||||||
Conversion ratio | 1 | |||||||||
Redemption period | 4 years | |||||||||
Redemption price as a percentage of issue price (in percentage) | 136.00% | |||||||||
Preferred shares, issued | 0 | 51,763,360 | ||||||||
Preferred shares, outstanding | 0 | 51,763,360 | ||||||||
Ordinary shares | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Ordinary shares re-designated into Series B convertible redeemable preferred shares (in shares) | 12,918,340 | 25,836,680 | 25,836,680 | |||||||
Unrelated third party investor | Series A convertible redeemable preferred shares | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible redeemable preferred shares, issued (in shares) | 4,216,867 | |||||||||
Convertible redeemable preferred shares, issuance price (in dollars per share) | $ / shares | $ 0.3557 | |||||||||
Convertible redeemable preferred shares, total consideration | $ | $ 1,500,000 | |||||||||
E-house | Series B convertible redeemable preferred shares | E-House Investment | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Convertible redeemable preferred shares, issued (in shares) | 12,918,340 | 12,918,340 | ||||||||
Convertible redeemable preferred shares, total consideration | ¥ 48,000,000 | $ 7,786,520 | ||||||||
Convertible redeemable preferred shares, par value (in dollars per share) | $ / shares | $ 0.0005 | |||||||||
Percentage of ownership held by E-house in the investor | 100.00% | |||||||||
Juda Holding Inc | Series B convertible redeemable preferred shares | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Ordinary shares re-designated into Series B convertible redeemable preferred shares (in shares) | 25,836,680 | 25,836,680 | ||||||||
Juda Holding Inc | Series B convertible redeemable preferred shares | E-House Investment | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Ordinary shares re-designated into Series B convertible redeemable preferred shares (in shares) | 12,918,340 | |||||||||
Juda Holding Inc | Ordinary shares | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Ordinary shares of reporting entity sold (in shares) | 38,755,020 | 38,755,020 | ||||||||
Juda Holding Inc | Ordinary shares | E-House Investment | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Ordinary shares of reporting entity sold (in shares) | 12,918,340 | 12,918,340 | 12,918,340 | |||||||
Ordinary shares sold, aggregate consideration | $ 10,116,352 | ¥ 48,000,000 | $ 7,786,520 | |||||||
Juda Holding Inc | Ordinary shares | SINA Hong Kong | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Ordinary shares of reporting entity sold (in shares) | 12,918,340 | 12,918,340 | ||||||||
Ordinary shares sold, aggregate consideration | ¥ 48,000,000 | $ 7,786,520 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Measurement | |||
Long-term investment, carrying value | $ 9,988,168 | $ 8,727,495 | |
Impairment loss for a held-to-maturity investment | 507,429 | 130,740 | |
Fair Value | |||
Fair Value Measurement | |||
Impairment loss for investment in affiliates | $ 131,165 | ||
Fair Value | Trust products | |||
Fair Value Measurement | |||
Investments, fair value | 4,713,429 | ||
Long-term investment, carrying value | 2,548,977 | ||
Fair Value | Asset management plans | |||
Fair Value Measurement | |||
Investments, fair value | 799,914 | ||
Long-term investment, carrying value | 3,753,255 | ||
Fair Value | Real estate funds | |||
Fair Value Measurement | |||
Investments, fair value | 1,535,921 | ||
Long-term investment, carrying value | 2,859,944 | ||
Fair Value | Long term entrusted investments | |||
Fair Value Measurement | |||
Long-term investment, carrying value | 1,092,723 | ||
Carrying Value | Trust products | |||
Fair Value Measurement | |||
Investments, fair value | 4,600,830 | ||
Long-term investment, carrying value | 2,535,252 | ||
Carrying Value | Asset management plans | |||
Fair Value Measurement | |||
Investments, fair value | 792,561 | ||
Long-term investment, carrying value | 3,332,299 | ||
Carrying Value | Real estate funds | |||
Fair Value Measurement | |||
Investments, fair value | 1,514,821 | ||
Long-term investment, carrying value | 2,859,944 | ||
Carrying Value | Long term entrusted investments | |||
Fair Value Measurement | |||
Long-term investment, carrying value | 1,068,496 | ||
Level 2 | Fair Value | |||
Fair Value Measurement | |||
Subsequent offer price of investment in affiliates | 436,716 | ||
Impairment loss for a held-to-maturity investment | 507,429 | 130,740 | |
Level 2 | Fair Value | Trust products | |||
Fair Value Measurement | |||
Investments, fair value | 4,713,429 | ||
Long-term investment, carrying value | 2,548,977 | ||
Level 2 | Fair Value | Asset management plans | |||
Fair Value Measurement | |||
Investments, fair value | 799,914 | ||
Long-term investment, carrying value | 3,753,255 | ||
Level 2 | Fair Value | Real estate funds | |||
Fair Value Measurement | |||
Investments, fair value | 1,535,921 | ||
Long-term investment, carrying value | 2,859,944 | ||
Level 2 | Fair Value | Long term entrusted investments | |||
Fair Value Measurement | |||
Long-term investment, carrying value | 1,092,723 | ||
Recurring basis | Fair Value | Real estate funds | |||
Fair Value Measurement | |||
Investments, fair value | 499,289 | ||
Recurring basis | Fair Value | Trading securities | |||
Fair Value Measurement | |||
Investments, fair value | 1,043,550 | 685,864 | |
Recurring basis | Fair Value | Available-for-sale investments | Asset management plans | |||
Fair Value Measurement | |||
Investments, fair value | 1,143,978 | ||
Recurring basis | Level 1 | Fair Value | Trading securities | |||
Fair Value Measurement | |||
Investments, fair value | 1,043,550 | 685,864 | |
Recurring basis | Level 2 | Fair Value | Real estate funds | |||
Fair Value Measurement | |||
Investments, fair value | 499,289 | ||
Recurring basis | Level 2 | Fair Value | Available-for-sale investments | Asset management plans | |||
Fair Value Measurement | |||
Investments, fair value | 1,143,978 | ||
Nonrecurring basis | Fair Value | |||
Fair Value Measurement | |||
Assets or liabilities measured at fair value on a non-recurring basis | $ 0 | $ 0 | $ 0 |
Segment Information (Details)
Segment Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenues by type of service | |||
Total related party revenues | $ 53,320,333 | $ 5,657,828 | $ 2,297,763 |
Total third-party revenues | 42,208,971 | 33,480,210 | 20,297,018 |
Total revenues | 95,529,304 | 39,138,038 | 22,594,781 |
One-time commissions | |||
Revenues by type of service | |||
Total related party revenues | 26,626,264 | 3,609,418 | 1,673,838 |
Total third-party revenues | 27,391,146 | 31,348,817 | 20,211,700 |
Total revenues | 54,017,410 | 34,958,235 | 21,885,538 |
Recurring management fee | |||
Revenues by type of service | |||
Total related party revenues | 22,861,485 | 2,048,410 | 623,925 |
Total third-party revenues | 196,752 | ||
Total revenues | 22,861,485 | 2,245,162 | 623,925 |
Recurring service fees | |||
Revenues by type of service | |||
Total related party revenues | 3,832,584 | ||
Total third-party revenues | 14,817,825 | 1,934,641 | 85,318 |
Total revenues | $ 18,650,409 | $ 1,934,641 | $ 85,318 |
Related Party Transactions (Det
Related Party Transactions (Details) ¥ in Millions | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Related Party Transaction | |||||
Related party revenues | $ 53,320,333 | $ 5,657,828 | $ 2,297,763 | ||
Advance prepayment for acquisition | 14,612,634 | ||||
One-time commissions | |||||
Related Party Transaction | |||||
Related party revenues | 26,626,264 | 3,609,418 | 1,673,838 | ||
One-time commissions | Juxi | |||||
Related Party Transaction | |||||
Related party revenues | 24,598 | ||||
One-time commissions | Hehui | |||||
Related Party Transaction | |||||
Related party revenues | 1,381,902 | ||||
One-time commissions | Investees of Affiliates of Juzhou | |||||
Related Party Transaction | |||||
Related party revenues | 4,929,386 | 209,979 | |||
One-time commissions | Investees of Juzhou | |||||
Related Party Transaction | |||||
Related party revenues | 14,634,690 | 2,017,537 | 1,649,240 | ||
One-time commissions | Investees of Jupeng | |||||
Related Party Transaction | |||||
Related party revenues | 856,851 | ||||
One-time commissions | Investees of Mingdu | |||||
Related Party Transaction | |||||
Related party revenues | 55,267 | ||||
One-time commissions | Investees of Yidezeng | |||||
Related Party Transaction | |||||
Related party revenues | 2,761 | ||||
One-time commissions | Investees of Yidezhen | |||||
Related Party Transaction | |||||
Related party revenues | 1,285,068 | ||||
One-time commissions | Investees of Yiju | |||||
Related Party Transaction | |||||
Related party revenues | 4,862,241 | ||||
Recurring management fee | |||||
Related Party Transaction | |||||
Related party revenues | 22,861,485 | 2,048,410 | 623,925 | ||
Recurring management fee | Investees of Juzhou | |||||
Related Party Transaction | |||||
Related party revenues | 15,761,813 | $ 2,048,410 | $ 623,925 | ||
Recurring management fee | Investees of Jupeng | |||||
Related Party Transaction | |||||
Related party revenues | 51,602 | ||||
Recurring management fee | Investees of Mingdu | |||||
Related Party Transaction | |||||
Related party revenues | 51,045 | ||||
Recurring management fee | Investees of Yidezeng | |||||
Related Party Transaction | |||||
Related party revenues | 148,685 | ||||
Recurring management fee | Investees of Yidezhen | |||||
Related Party Transaction | |||||
Related party revenues | 1,475,304 | ||||
Recurring management fee | Investees of Yidexin | |||||
Related Party Transaction | |||||
Related party revenues | 65,061 | ||||
Recurring management fee | Investees of Yidezhao | |||||
Related Party Transaction | |||||
Related party revenues | 824,644 | ||||
Recurring management fee | Investees of Yiju | |||||
Related Party Transaction | |||||
Related party revenues | 4,483,331 | ||||
Recurring service fee | |||||
Related Party Transaction | |||||
Related party revenues | 3,832,584 | ||||
Recurring service fee | Investees of Affiliates of Juzhou | |||||
Related Party Transaction | |||||
Related party revenues | 3,761,951 | ||||
Recurring service fee | Investees of Affiliates of Yidezeng | |||||
Related Party Transaction | |||||
Related party revenues | $ 70,633 | ||||
Runju | |||||
Related Party Transaction | |||||
Percentage of equity interest acquired | 71.00% | 71.00% | 71.00% | ||
Advance prepayment for acquisition | ¥ 77.6 | $ 11,900,000 |
Related Party Transactions (D80
Related Party Transactions (Details 2) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction | ||
Amounts due from related parties | $ 1,836,209 | $ 2,389,925 |
Hehui | ||
Related Party Transaction | ||
Amounts due from related parties | 425,494 | |
Investees of Affiliates of Juzhou | ||
Related Party Transaction | ||
Amounts due from related parties | 390,402 | |
Investees of Juzhou | ||
Related Party Transaction | ||
Amounts due from related parties | 3,593 | $ 1,964,431 |
Investees of Jupeng | ||
Related Party Transaction | ||
Amounts due from related parties | 208,482 | |
Investees of Yidezeng | ||
Related Party Transaction | ||
Amounts due from related parties | 153,997 | |
Investees of Yidezhen | ||
Related Party Transaction | ||
Amounts due from related parties | 909,055 | |
Investees of Yidexin | ||
Related Party Transaction | ||
Amounts due from related parties | 65,962 | |
Investees of Yidezhao | ||
Related Party Transaction | ||
Amounts due from related parties | $ 104,718 |
Related Party Transactions (D81
Related Party Transactions (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 31, 2016 | Dec. 31, 2014 | |
Related Party Transaction | |||
Deferred revenue from related parties including prepaid carried interest | $ 17,626,688 | $ 5,419,758 | |
Investees of Affiliates of Juzhou | |||
Related Party Transaction | |||
Deferred revenue from related parties including prepaid carried interest | 1,311,546 | ||
Investees of Juzhou | |||
Related Party Transaction | |||
Deferred revenue from related parties including prepaid carried interest | 14,193,044 | 5,419,758 | |
Additional prepaid carried interest | 0 | $ 3,256,366 | |
Investees of Jupeng | |||
Related Party Transaction | |||
Deferred revenue from related parties including prepaid carried interest | 1,028,426 | ||
Investees of Yidezeng | |||
Related Party Transaction | |||
Deferred revenue from related parties including prepaid carried interest | 26,587 | ||
Investees of Yidezhen | |||
Related Party Transaction | |||
Deferred revenue from related parties including prepaid carried interest | 1,067,085 | ||
SINA Hong Kong | |||
Related Party Transaction | |||
Amounts due to related party | 5,280,000 | ||
Ordinary shares | Private placement | SINA Hong Kong | |||
Related Party Transaction | |||
Shares issued | 2,880,000 | ||
Percentage of total outstanding share capital of the reporting entity | 1.50% | ||
Shares issued, price per share | $ 1.83 | ||
Proceeds from issuance of ordinary stock | $ 5,280,000 |
Commitments (Details)
Commitments (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Future minimum lease payments | |||
2,016 | $ 5,018,795 | ||
2,017 | 2,841,320 | ||
2,018 | 1,091,209 | ||
2,019 | 185,502 | ||
2020 and after | 105,824 | ||
Total | 9,242,650 | ||
Rental expenses | $ 5,062,753 | $ 3,154,920 | $ 1,566,911 |
Commitments (Details 2)
Commitments (Details 2) | Dec. 31, 2015USD ($) |
Investment commitments | |
Capital commitment | $ 7,760,492 |
Guojinwenying | |
Investment commitments | |
Capital commitment | 1,427,144 |
Shanghai HuijuAsset Management Co., Ltd. | |
Investment commitments | |
Capital commitment | 792,858 |
Shanghai Jingzhou Asset Management Co., Ltd. | |
Investment commitments | |
Capital commitment | 285,429 |
Zipai | |
Investment commitments | |
Capital commitment | 1,617,430 |
Shanghai Jufu Assets Management Co., Ltd. | |
Investment commitments | |
Capital commitment | 777,001 |
Xinhao | |
Investment commitments | |
Capital commitment | 777,001 |
Qianchang | |
Investment commitments | |
Capital commitment | 745,286 |
Shanghai Zhouzhi Investment Management Co., Ltd. | |
Investment commitments | |
Capital commitment | 634,286 |
Shanghai Zhoushi Asset Management Co., Ltd. | |
Investment commitments | |
Capital commitment | 310,800 |
Hehui | |
Investment commitments | |
Capital commitment | 233,100 |
Others | |
Investment commitments | |
Capital commitment | $ 160,157 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2016CNY (¥)item | Mar. 31, 2016USD ($)item | Jan. 31, 2016CNY (¥) | Jan. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015CNY (¥) | Dec. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Subsequent Event | |||||||
Cash consideration | $ 14,612,634 | ||||||
Yixun | |||||||
Subsequent Event | |||||||
Percentage of equity interest acquired | 78.00% | 78.00% | 78.00% | ||||
Cash consideration | $ 2,668,566 | ||||||
Runju | |||||||
Subsequent Event | |||||||
Percentage of equity interest acquired | 71.00% | 71.00% | 71.00% | ||||
Cash consideration | ¥ 77,600,000 | $ 11,900,000 | |||||
Private placement | SINA Hong Kong | Ordinary shares | |||||||
Subsequent Event | |||||||
Shares issued | shares | 2,880,000 | ||||||
Percentage of total outstanding share capital of the reporting entity | 1.50% | ||||||
Shares issued, price per share | $ / shares | $ 1.83 | ||||||
Proceeds from issuance of ordinary stock | $ 5,280,000 | ||||||
Subsequent Event | Yixun | |||||||
Subsequent Event | |||||||
Percentage of equity interest acquired | 78.00% | ||||||
Cash consideration | ¥ 17,300,000 | $ 2,700,000 | |||||
Subsequent Event | Runju | |||||||
Subsequent Event | |||||||
Percentage of equity interest acquired | 71.00% | 71.00% | |||||
Consideration | ¥ 90,500,000 | $ 14,300,000 | |||||
Number of existing shareholders from whom shares are acquired | item | 2 | 2 | |||||
Subsequent Event | Runju | Shanghai Kusuo Technology Information Co., Ltd ("Kusuo") | |||||||
Subsequent Event | |||||||
Number of related parties | item | 1 | 1 | |||||
Subsequent Event | Private placement | Ordinary shares | |||||||
Subsequent Event | |||||||
Proceeds from issuance of ordinary stock | $ 22,900,000 | ||||||
Subsequent Event | Private placement | Julius Baer Investment Ltd. | Ordinary shares | |||||||
Subsequent Event | |||||||
Shares issued | shares | 9,591,000 | ||||||
Percentage of total outstanding share capital of the reporting entity | 4.99% | ||||||
Shares issued, price per share | $ / shares | $ 1.83 | ||||||
Subsequent Event | Private placement | SINA Hong Kong | Ordinary shares | |||||||
Subsequent Event | |||||||
Shares issued | shares | 2,880,000 | ||||||
Percentage of total outstanding share capital of the reporting entity | 1.50% | ||||||
Shares issued, price per share | $ / shares | $ 1.83 |
Additional Financial Informat85
Additional Financial Information of Parent Company - Financial Statements Schedule I (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | ||||
Cash and cash equivalents | $ 122,504,799 | $ 31,557,233 | $ 5,343,342 | $ 959,595 |
Other current assets | 1,025,526 | 656,838 | ||
Total current assets | 153,068,268 | 53,539,720 | ||
Investment in affiliates | 11,577,995 | 2,284,687 | ||
Total Assets | 241,684,476 | 67,313,863 | ||
Liabilities and Equity | ||||
Other current liabilities | 730,405 | 2,070,081 | ||
Amounts due to related parties- non-current | 5,280,000 | |||
Total Liabilities | 71,629,485 | 20,735,205 | ||
Shareholders' Equity: | ||||
Ordinary Shares ($0.0005 par value; 142,101,710 and 1,000,000,000 shares authorized, 61,244,980 and 179,586,759 shares issued and outstanding, as of December 31, 2014 and 2015, respectively) | 89,794 | 30,622 | ||
Additional paid-in capital | 146,283,019 | 6,794,536 | ||
Retained earnings | 24,491,075 | 154,062 | ||
Accumulated other comprehensive income(loss) | (3,492,512) | 574,682 | ||
Total Jupai shareholders' equity | 167,371,376 | 7,553,902 | ||
Total Liabilities, Mezzanine Equity and Total Equity | 241,684,476 | 67,313,863 | ||
Series A convertible redeemable preferred shares | ||||
Mezzanine Equity | ||||
Convertible redeemable preferred shares | 1,500,000 | |||
Series B convertible redeemable preferred shares | ||||
Mezzanine Equity | ||||
Convertible redeemable preferred shares | 36,794,634 | |||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 27,650,164 | 2,703,602 | ||
Other current assets | 202,100 | 78,236 | ||
Total current assets | 27,852,264 | 2,781,838 | ||
Investment in affiliates | 116,812,030 | 37,229,937 | ||
Loan to subsidiaries | 29,951,525 | 6,551,423 | ||
Total Assets | 174,615,819 | 46,563,198 | ||
Liabilities and Equity | ||||
Other current liabilities | 92,735 | 714,662 | ||
Amounts due to related parties- non-current | 7,151,708 | |||
Total Liabilities | 7,244,443 | 714,662 | ||
Shareholders' Equity: | ||||
Ordinary Shares ($0.0005 par value; 142,101,710 and 1,000,000,000 shares authorized, 61,244,980 and 179,586,759 shares issued and outstanding, as of December 31, 2014 and 2015, respectively) | 89,794 | 30,622 | ||
Additional paid-in capital | 146,283,019 | 6,794,536 | ||
Retained earnings | 24,491,075 | 154,062 | ||
Accumulated other comprehensive income(loss) | (3,492,512) | 574,682 | ||
Total Jupai shareholders' equity | 167,371,376 | 7,553,902 | ||
Total Liabilities, Mezzanine Equity and Total Equity | $ 174,615,819 | 46,563,198 | ||
Parent Company | Series A convertible redeemable preferred shares | ||||
Mezzanine Equity | ||||
Convertible redeemable preferred shares | 1,500,000 | |||
Parent Company | Series B convertible redeemable preferred shares | ||||
Mezzanine Equity | ||||
Convertible redeemable preferred shares | $ 36,794,634 |
Additional Financial Informat86
Additional Financial Information of Parent Company - Financial Statements Schedule I (Details 2) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Mezzanine Equity | ||
Convertible redeemable preferred shares, shares issued | 0 | |
Convertible redeemable preferred shares, shares outstanding | 0 | |
Shareholders' Equity: | ||
Ordinary shares, par value ( in dollars per share) | $ (0.0005) | $ (0.0005) |
Ordinary shares, shares authorized | 1,000,000,000 | 142,101,710 |
Ordinary shares, shares issued | 179,586,759 | 61,244,980 |
Ordinary shares, shares outstanding | 179,586,759 | 61,244,980 |
Series A convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ (0.0005) | $ (0.0005) |
Convertible redeemable preferred shares, shares authorized | 4,216,867 | 4,216,867 |
Convertible redeemable preferred shares, shares issued | 0 | 4,216,867 |
Convertible redeemable preferred shares, shares outstanding | 0 | 4,216,867 |
Convertible redeemable preferred shares, redemption value | $ 0 | $ 1,529,267 |
Convertible redeemable preferred shares, liquidation value | $ 0 | $ 1,500,000 |
Series B convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ (0.0005) | $ (0.0005) |
Convertible redeemable preferred shares, shares authorized | 51,673,360 | 51,673,360 |
Convertible redeemable preferred shares, shares issued | 0 | 51,763,360 |
Convertible redeemable preferred shares, shares outstanding | 0 | 51,763,360 |
Convertible redeemable preferred shares, redemption value | $ 0 | $ 35,079,536 |
Convertible redeemable preferred shares, liquidation value | $ 0 | $ 33,475,912 |
Parent Company | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.0005 | $ 0.0005 |
Shareholders' Equity: | ||
Ordinary shares, shares authorized | 1,000,000,000 | 142,101,710 |
Ordinary shares, shares issued | 179,586,759 | 61,244,980 |
Ordinary shares, shares outstanding | 179,586,759 | 61,244,980 |
Parent Company | Series A convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ 0.0005 | |
Convertible redeemable preferred shares, shares authorized | 4,216,867 | |
Convertible redeemable preferred shares, shares issued | 4,216,867 | |
Convertible redeemable preferred shares, shares outstanding | 4,216,867 | |
Convertible redeemable preferred shares, redemption value | $ 1,529,267 | |
Convertible redeemable preferred shares, liquidation value | $ 1,500,000 | |
Parent Company | Series B convertible redeemable preferred shares | ||
Mezzanine Equity | ||
Convertible redeemable preferred shares, par value (in dollars per share) | $ (0.0005) | |
Convertible redeemable preferred shares, shares authorized | 51,673,360 | |
Convertible redeemable preferred shares, shares issued | 51,673,360 | |
Convertible redeemable preferred shares, shares outstanding | 51,673,360 | |
Convertible redeemable preferred shares, redemption value | $ 35,079,536 | |
Convertible redeemable preferred shares, liquidation value | $ 33,475,912 |
Additional Financial Informat87
Additional Financial Information of Parent Company - Financial Statements Schedule I (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Statements of Operations and Comprehensive Income | |||
Cost of revenues | $ (37,414,007) | $ (10,657,267) | $ (3,703,030) |
Selling expenses | (13,810,241) | (5,768,356) | (3,846,855) |
General and administrative expenses | (14,553,357) | (7,009,332) | (4,411,080) |
Interest expense | (14,961) | (15,602) | |
Income before taxes and equity in affiliates | 36,499,549 | 20,169,468 | 12,389,143 |
Income from equity in subsidiaries and VIE | 687,225 | 78,015 | (135,892) |
Net income | 26,523,390 | 14,630,140 | 9,050,371 |
Other comprehensive income | (4,128,806) | (49,252) | 526,503 |
Comprehensive income attributable to Jupai shareholders | 20,269,819 | 14,319,725 | 9,664,652 |
Adjustments to additional paid in capital related to investments in VIEs | 6,295,780 | ||
Parent Company | |||
Condensed Statements of Operations and Comprehensive Income | |||
Cost of revenues | (551,460) | (178,921) | |
Selling expenses | (2,031) | (761) | |
General and administrative expenses | (2,382,954) | (1,036,768) | |
Interest expense | (150) | (76) | |
Income before taxes and equity in affiliates | (2,936,445) | (1,216,600) | (76) |
Income from equity in subsidiaries and VIE | 27,273,458 | 15,588,900 | 9,155,141 |
Net income | 24,337,013 | 14,372,300 | 9,155,065 |
Other comprehensive income | (4,067,194) | (52,575) | 509,587 |
Comprehensive income attributable to Jupai shareholders | $ 20,269,819 | $ 14,319,725 | $ 9,664,652 |
Additional Financial Informat88
Additional Financial Information of Parent Company - Financial Statements Schedule I (Details 4) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 26,523,390 | $ 14,630,140 | $ 9,050,371 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share based compensation | 2,520,565 | 498,756 | |
Income from equity in subsidiaries and VIE | (687,225) | (78,015) | 135,892 |
Changes in operating assets and liabilities: | |||
Other current assets | 5,641 | (490,244) | (151,621) |
Other current liabilities | (1,546,625) | 1,383,927 | 330,628 |
Net cash used in operating activities | 55,701,144 | 24,443,395 | 17,306,401 |
Cash flows from investing activities: | |||
Net cash used in investing activities | (9,325,417) | (6,046,958) | (15,137,840) |
Cash flows from financing activities: | |||
Proceeds from issuance of preferred shares | 7,786,519 | 1,500,000 | |
Proceeds from IPO | 49,950,000 | ||
Payment of IPO expenses | (7,323,411) | (269,962) | |
Subscription receivable | 50,000 | ||
Net cash provided by financing activities | 47,735,317 | 7,761,042 | 2,125,112 |
Net increase in cash and cash equivalents | 90,947,566 | 26,213,891 | 4,383,747 |
Cash and cash equivalents-beginning of the year | 31,557,233 | 5,343,342 | 959,595 |
Cash and cash equivalents-end of the year | 122,504,799 | 31,557,233 | 5,343,342 |
Non-cash investing and financing activities: | |||
Acquisition of Scepter through share settlement | (56,375,839) | ||
Conversion of Series A and B convertible redeemable preferred shares to ordinary shares | 38,294,634 | ||
Parent Company | |||
Cash flows from operating activities: | |||
Net income | 24,337,013 | 14,372,300 | 9,155,065 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Share based compensation | 2,520,565 | 498,756 | |
Income from equity in subsidiaries and VIE | (27,273,458) | (15,588,900) | (9,155,141) |
Changes in operating assets and liabilities: | |||
Other current assets | (123,864) | ||
Other current liabilities | (621,927) | 714,586 | 76 |
Net cash used in operating activities | (1,161,671) | (3,258) | |
Cash flows from investing activities: | |||
Loan to subsidiaries | (23,400,102) | (5,051,423) | (1,500,000) |
Net cash used in investing activities | (23,400,102) | (5,051,423) | (1,500,000) |
Cash flows from financing activities: | |||
Proceeds from issuance of preferred shares | 7,786,519 | 1,500,000 | |
Proceeds from issuance of new shares to SINA | 5,280,000 | ||
Proceeds from IPO | 49,950,000 | ||
Payment of IPO expenses | (5,721,665) | (78,236) | |
Subscription receivable | 50,000 | ||
Net cash provided by financing activities | 49,508,335 | 7,758,283 | $ 1,500,000 |
Net increase in cash and cash equivalents | 24,946,562 | 2,703,602 | |
Cash and cash equivalents-beginning of the year | 2,703,602 | ||
Cash and cash equivalents-end of the year | 27,650,164 | 2,703,602 | |
Non-cash investing and financing activities: | |||
Series B convertible redeemable preferred shares issued by re-designation of ordinary shares | $ 29,008,115 | ||
Acquisition of Scepter through share settlement | (56,375,829) | ||
Conversion of Series A and B convertible redeemable preferred shares to ordinary shares | $ 38,294,634 |