Hywin Holdings Announces Strategic Business Transformation Plan - Seite 2

As part of the business transformation plan, Hywin is undertaking a structural reorganization plan, which includes elimination of certain positions and aggressive cost saving measures, including the redundancy of approximately 300 middle- and back-office employees. Further redundancy of frontline employees may occur as Hywin is in the process of setting up new sales policies and targets for its nationwide relationship manager team. In addition, as part of Hywin’s structural reorganizational plan, Hywin will simplify its regional management and consolidate its physical offices across China by concentrating on certain key regions and cities.

The Company also announces that Ms. Zhu Shuming, a director of the Company, has submitted her resignation to the board of directors (“Board”) due to personal reasons, effective on March 31, 2024. Mr. Wang Gui, the vice president of strategy of the Company, has also submitted his resignation to the Board due to personal reasons, effective on March 31, 2024. The Board confirms that there are no disagreements between them and the Company or the Board.

While the Company believes its strategic business transformation plan will open up opportunities for a “New Hywin” and bring about sustainable growth in the long run, it cautions investors about the risks associated with investing in the Company’s American Depositary Shares. As with any change, there are inherent uncertainties associated with such a business transformation. The Company anticipates that it will experience a significant reduction in operational scale and revenue scale in the short term, during which it may not achieve its historical profit level. There is also a risk of losing a substantial number of frontline relationship managers who may not be able to adapt to the Company’s new strategic initiatives or meet new sales targets. In addition, there are uncertainties regarding ongoing disputes with clients over previously distributed asset-backed products, which could negatively affect the Company’s brand, reputation, and customer confidence. As a result, the Company’s business, financial condition and results of operations could be materially and adversely affected. The Company warns investors to be cautious when investing in its American Depositary Shares.