Hywin to exit wealth, asset management businesses and focus on technology

Hywin Holdings (NASDAQ:HYW) announces updates on its plan for strategic business transformation, which includes completely exiting the wealth management and asset management businesses by terminating the China VIE Agreements.
The company’s other plans include shifting its business focus towards the technology sector and changing the company’s name to Santech Holdings Limited.
The company has terminated its wealth management and asset management businesses with Hywin Wealth Management Co., Ltd., a variable interest entity in China, and will no longer be a consolidated entity. Hywin Wealth Management will be owned and controlled by Han Hongwei, who has indicated that he will continue to lead Hywin Wealth Management.
Further, the company plans to expand into the technology sector organically by incubating new technology models, forming strategic partnerships with third parties, or both.
The company’s business transformation plan aims for sustainable growth but warns investors about potential risks in investing in its American Depositary Shares. The short-term reduction in operational and revenue scales could negatively impact the company’s financial condition and operational results.