BEIJING: Chinese wealth manager Hywin Holdings, whose products are primarily invested into real estate, said it has been unable to meet some repayments on time, a sign of spreading stress in a financial market dragged down by a property crisis.
Hywin said the asset managers for some products distributed by the company were unable to reach an agreement with relevant clients to defer redemption, according to a statement released by the company on Thursday.
The announcement comes after market chatter on social media that the firm missed payments on some investment products.
Hywin did not immediately reply to a Reuters' request for comment.
Shares of the Nasdaq-listed firm fell 14.15 per cent on Thursday after plunging by more than 40 per cent on Wednesday.
Hywin derives most of its revenues from distributing real estate products, including those investing in projects from troubled China Evergrande Group and Sunac China Holdings Ltd.
Net revenue from real estate products accounted for 88.8 per cent of its wealth management services in the year ended on Jun 30, 2020, according to the latest available data from the company's prospectus released in 2021.
Hywin's statement also said it had formed a special investigation committee comprised of members of senior management to oversee an internal investigation. It did not give further details.
China's highly indebted property sector has been reeling from a liquidity crunch since 2020. Defaults by developers since late 2021 have impeded economic growth and rattled global markets.
In July, signs of trouble at Zhongzhi Enterprise Group, a leading Chinese wealth manager, came to light when Zhongrong International Trust Co, a trust firm controlled by Zhongzhi, missed payments on dozens of investment products.
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