“Investor Network” Feng Xun

As competition in the public placement industry becomes more intense, the operating pressure on some fund companies has increased, and they have begun to reduce costs and increase efficiency. The company's direct sales app has become a bottlenecks in cost reduction due to its high operation and maintenance costs and difficulty in acquiring customers.

On November 21, Jiutai Fund Management Co., Ltd. (hereinafter referred to as “Jiutai Fund”) announced on its official website that the company will launch the operation and maintenance services of the mobile Jiutai Fund App and the WeChat service account “Jiutai Fund Service Account” from 18:00 on November 23, 2023.

After the service is launched, investors can use the same account information to log on to the official website of Jiutai Fund to check the position status and business operations related to stock share redemption. The recognition, subscription, and fixed investment functions of the original mobile terminal can be handled through the company's distribution channels or direct sales counters.

After this adjustment, with the exception of direct sales counters, Jiutai Fund will no longer have direct sales services on mobile terminals.

The Jiutai Fund has recently entered an “eventful autumn”. On November 11, the company just issued an announcement that “major business personnel have changed by more than 30% in the last 12 months”, which has once again become the focus of market attention due to frequent changes in senior management.

Furthermore, in less than a year, Jiutai Fund experienced various problems such as receiving regulatory fines, loss of performance, and reliance on blood transfusions from shareholders. Investors are concerned about future development.

Frequent personnel changes

Jiutai Fund was founded in July 2014 with a registered capital of 300 million yuan. It is the first public fund initiated by a PE investment management agency.

According to the official website of Jiutai Fund, the shareholders are Kunwu Jiuding Investment Management Co., Ltd. (hereinafter referred to as “Kunwu Jiuding”), Tongchuang Jiuding Investment Management Group Co., Ltd. (“Jiuding Group”), Lhasa Kunwu Jiuding Industrial Investment Management Co., Ltd. (“Lhasa Kunwu”), and Kyushu Securities Co., Ltd. (hereinafter referred to as “Kyushu Securities”), which account for 26%, 25%, and 24% of registered capital, respectively.

It is worth mentioning that all shareholders of Jiutai Fund are related to the listed company Kunwu Jiuding Investment Holding Co., Ltd. (hereinafter referred to as “Jiuding Investment”, 600053.SH). Kunwu Jiuding is a wholly-owned subsidiary of Jiuding Investment. Jiuding Group is an indirect controlling shareholder of Jiuding Investment, and Kunwu in Lhasa is a related party to Jiuding Investment. Currently, Jiuding Group also holds 16.52% of the shares in Kyushu Securities.

On November 11, Jiutai Fund issued an announcement stating, “Our company's main business personnel have changed by more than 30% in the last 12 months, and it has been disclosed in accordance with the relevant regulations of the “Administrative Measures on Information Disclosure of Publicly Raised Securities Investment Funds”, but at the same time, it stated that “this change has not affected the normal operation of the company.”

Specifically, Yan Jun, the company's general manager, left office on October 18 due to personal reasons, and Wang Yu, the executive deputy general manager, took over as general manager; in September, fund manager Liu Kaiyun was promoted to deputy general manager.

Since this year, 3 fund managers of Jiutai Fund have left office. Yang Fei left office in April, and Zhang Pengcheng and Zhao Rui left office in September. It is worth mentioning that Zhao Rui joined the company just in April. Up to now, there are only 9 fund managers left in the company.

In 2021 and 2022, 2 and 3 fund managers of Jiutai Fund left office respectively. Compared with the already few investment researchers, there have been significant changes.

The resignation of the fund manager of Jiutai Fund

Losses in the first half of the year exceeded 30 million

Until now, Jiutai Fund has always been well known in the market for its fixed increase in investment, and there have also been highlights. At the end of 2017, the management scale reached a peak of 14.397 billion yuan. After a period of ups and downs, the management scale has shrunk rapidly since the third quarter of 2021.

According to Tonghuashun iFind, as of the end of the third quarter of this year, Jiutai Fund had 23 products (various shares merged), but the management scale was only 1,665 billion yuan. There was not a single fund that was large when it was first established, setting a record for the lowest level since its establishment.

The management scale of Jiutai Fund

Judging from the performance, as of November 23, out of the 41 products of the Jiutai Fund (various types of shares), 25 funds have lost earnings since their establishment. Of these, 15 funds have lost more than 20% since their establishment, and even 1 has lost more than 40%.

Since this year, only 2 of the company's monetary funds have achieved positive returns, namely Class A and Class B of the Jiutai Daily Gold Currency. The yields as of November 23 were 1.22% and 1.44%, respectively.

Under poor performance, the management scale of Jiutai Fund continued to shrink, and at the same time, the company fell into the dilemma of losing net profit.

According to the financial report of Jiuding Investment, from 2016 to the first half of 2023, Jiutai Fund lost a total net profit of 156 million yuan.

Looking at each year, Jiutai Fund only made a profit in 2017 and 2021, with net profit of 1,086,400 yuan and 7.767 million yuan respectively; in the first half of this year, the company's net profit had already lost 31.0397 million yuan, while the loss for the whole of 2022 was 64.2022 million yuan. The losses in the past two years have been relatively serious.

In July of this year, Jiuding Investment issued an announcement stating that the wholly-owned subsidiary Kunwu Jiuding and Jiuding Group and associated party, Kunwu, Lhasa, will increase the capital of Jiutai Fund by 50 million yuan, with investment amounts of 17 million yuan, 16.5 million yuan, and 16.5 million yuan respectively. The reason for the capital increase is “to meet the continuous development needs of the Jiutai Fund.”

After the capital increase, the shareholding ratio of Kunwu Jiuding, Jiuding Group, and Lhasa Kunwu in Jiutai Fund will change to 26.73%, 25.73%, and 25.73%, respectively, while the shareholding ratio of Kyushu Securities will drop to 21.82%. Of the 50 million yuan capital increase, 30 million yuan is used as registered capital, and 20 million yuan is included in capital reserves.

Being able to obtain capital increases from shareholders is certainly a good thing, but also because of the close investment relationship with Jiuding, daily operations have been affected.

Being punished by the supervisory authorities

The Jiutai Fund was once caught in the limelight of public opinion due to the “fixed increase in the rat pool” incident.

In February of this year, Jiuding Investment issued an administrative penalty against Wu Gang, the actual controller by the regulatory authorities. Wu Gang was also the actual controller of Jiutai Fund at the time, and Wu Gang interfered in the latter's business activities in violation of regulations.

The time can be traced back to 2016. Jiutai Fund established the Jiutai Jiuli Flexible Allocation Hybrid Securities Investment Fund (hereinafter referred to as “Jiutai Jiuli”). As of November 7 of that year, the total capital raised had reached 3 billion yuan.

In December 2016, Luo Mubo, the actual controller of Xiamen Sanwei Silk Environmental Protection Co., Ltd. (hereinafter referred to as “3D Wire”, now renamed Xiamen Zhongchuang Environmental Protection Technology Co., Ltd.), issued a “Letter of Commitment” to Wu Gang after discussions with Wu Gang.

Wu Gang informed Wu, chairman of Jiutai Fund, about the “Letter of Commitment,” and Wu told Lu Mouzhong, general manager of Jiutai Fund, to consider trading the “three-dimensional wire.” Since then, from February to April 2017, Jiutai Jiuli has successively bought 3.9707 million shares of “3D wire”. After that, Wu Gang also instructed Jiutai Jiuli to begin the liquidation process.

In 2017, Wu Qiang, chairman of Jiutai Fund, signed income guarantee agreements with companies that Jiutai Fund plans to invest in. Wu Qiang successively signed agreements involving income guarantees with the actual controllers or shareholders of five listed companies, but the final performance compensation was paid to the Kyushu Securities Bank account.

The Securities Regulatory Commission ordered the correction of Wu Gang's intervention in fund operations, ordered Jiutai Fund to buy “three-dimensional wire” through Jiutai Jiuli, instructed Jiutai Fund to initiate liquidation procedures against Jiutai Jiuli, ordered correction, and imposed a fine of 1 million yuan. At the same time, Wu Gang was banned from entering the securities market for 5 years. In addition, the profiteering activities of Jiutai Fund were ordered to be corrected, and a fine of 1 million yuan was imposed.

Jiuding Investment stated in the announcement that administrative penalties will have a certain impact on the daily operations of Jiutai Fund.

For Jiutai Fund, how to operate in compliance, maintain management stability, and further generate returns for investors is still an urgent problem to be solved. (Produced by Thinking Finance) ■