PUYI, INC. Discloses Significant Stake in FANHUA INC. via SC 13D

TL;DR

**PUYI just bought a big chunk of FANHUA, watch for potential strategic plays.**

AI Summary

PUYI, INC. filed an SC 13D on January 5, 2024, disclosing its acquisition of ordinary shares in FANHUA INC. The filing indicates that PUYI, INC. now holds a significant stake in FANHUA INC., with the event triggering the filing occurring on December 29, 2023. This matters to investors because it signals a potential strategic interest or a belief in FANHUA INC.'s undervaluation by another financial services company, which could lead to future corporate actions or influence the stock price.

Why It Matters

This filing reveals a major investor, PUYI, INC., has taken a substantial position in FANHUA INC., potentially signaling future strategic moves or a belief in the company's value.

Risk Assessment

Risk Level: medium — While an insider buying can be positive, the specific intent and future actions of PUYI, INC. are not yet fully clear, introducing some uncertainty.

Analyst Insight

A smart investor would monitor subsequent filings from PUYI, INC. for details on their intentions (e.g., activist stake, passive investment, potential M&A) and observe FANHUA INC.'s stock performance and any management responses to this new significant shareholder.

Key Players & Entities

• PUYI, INC. (company) — the reporting person acquiring shares
• FANHUA INC. (company) — the subject company whose shares were acquired
• Ren Yong (person) — Chief Executive Officer of PUYI, INC.
• December 29, 2023 (date) — date of event requiring the filing
• January 5, 2024 (date) — date the SC 13D was filed

Forward-Looking Statements

• PUYI, INC. will likely disclose its specific investment intentions in a subsequent amendment or full filing. (PUYI, INC.) — medium confidence, target: Q1 2024
• FANHUA INC.'s stock price may see increased volatility due to the new significant shareholder. (FANHUA INC.) — medium confidence, target: Q1 2024

FAQ

Key Financial Figures

• $0.001 — elates to the ordinary share, par value $0.001 per share (“Ordinary Shares&rdquo

Filing Documents

• ea191228-13dpuyi_fanhua.htm (SC 13D) — 49KB
• ea191228ex99-1_fanhua.htm (EX-99.1) — 5KB
• 0001213900-24-001319.txt ( ) — 56KB

Security and Issuer

Item 1. Security and Issuer This statement on Schedule 13D relates to the ordinary share, par value $0.001 per share (“Ordinary Shares”), including Ordinary Shares represented by American Depositary Shares (“ADSs”, each representing 20 Ordinary Shares) of FANHUA Inc. (the “Issuer” or the “Company”). The Issuer’s ADSs are listed on the Nasdaq Global Select Market under the symbol “FANH.” The Issuer’s principal executive office is located at 60/F, Pearl River Tower, No. 15 West Zhujiang Road, Guangzhou, Guangdong 510623, People’s Republic of China.

Identity and Background

Item 2. Identity and Background The principal business and office address of the Reporting Person is 61F, Pearl River Tower, No. 15 Zhujiang West Road, Zhujiang New Town, Tianhe, Guangzhou, Guangdong Province, People’s Republic of China. Puyi Inc. is a holding company whose ordinary shares, represented by ADSs, are listed on the Nasdaq Global Market. Through its various subsidiaries and affiliated entities, Puyi operates as a leading third party wealth management service provider in China. During the last five years, to the knowledge of Puyi, none of (a) any executive officer or director of the Reporting Person; (b) any person controlling the Reporting Person; or (c) any executive or director of any corporation or other person ultimately in control of the Reporting Person, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Source and Amount of Funds or Other

Item 3. Source and Amount of Funds or Other Consideration The information set forth in Items 2, Item 4 and Item 6 is hereby incorporated by reference into this Item 3.

Purpose of Transaction

Item 4. Purpose of Transaction On December 27, 2023, the Reporting Person entered into share exchange agreements (the “Agreements”) with certain of FANHUA’s shareholders (collectively “FANHUA Participating Shareholders”), following separate negotiation with each of the FANHUA Participating Shareholders. Pursuant to the Agreements, the Reporting Person issued a total of 284,113,314 ordinary shares of the Reporting Person, par value US$0.001 per share, to FANHUA Participating Shareholders, in exchange for 568,226,628 Ordinary Shares of the Issuer beneficially owned by them (“Exchange Shares”) (the “Transaction”). The exchange ratio is 2 Ordinary Shares of the Issuer per ordinary share of the Reporting Person. Upon closing of the Transaction on December 29, 2023, the Reporting Person acquires 50.1% of the equity interests of the Issuer and FANHUA Participating Shareholders in turn collectively own 76.7% of the equity interests of the Reporting Person. The Reporting Person acquired the Exchange Shares from FANHUA Participating Shareholders for the purpose of long-term investment. The Reporting Person expects to evaluate, on an ongoing basis, the Issuer’s financial condition and prospects and its interests in, and intentions with respect to, the Issuer and the investment in the securities of the Issuer, which review may be based on various factors, including but not limited to the Issuer’s business and financial condition, results of operation and prospects, general economic and industry conditions, the securities markets in general. Accordingly, the Reporting Person reserves the right to change its intentions, as it deems appropriate, at any time. In particular, the Reporting Person may, from time to time, in the open market, through privately negotiated transactions or otherwise, increase its holdings in the Issuer or dispose of all or a portion of the securities of the Issuer that the Reporting Perso

Interest in Securities

Item 5. Interest in Securities of the Company (a), (b) The following table sets forth the beneficial ownership of Ordinary Shares of the Issuer for the Reporting Person. Number of Shares as to which Such Person has: Name Amount Beneficially Owned(1) Percentage of Class(2) Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Puyi Inc. (3) 568,226,628 50.1 % 568,226,628 0 568,226,628 0 (1) Beneficial ownership is determined in accordance with Rule 13d-3 of the General Rules and Regulations under the Exchange Act and includes voting or investment power with respect to the securities. (2) Percentage of beneficial ownership of each listed person is based on 1,134,751,504 Ordinary Shares outstanding as of December 20, 2023. (c) During the 60 days preceding the filing of this Schedule 13D/A, the Reporting Person and, to its knowledge, none of the director and officer of the Reporting Person has effected any transactions in the Ordinary Shares except as reported herein.. (d) To the best knowledge of the Reporting Person, except for the agreements described in this Schedule 13D/A, no one other than the Reporting Persons, or the holders of interests in the Reporting Persons, has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Ordinary Shares or ADSs. (e) Not applicable.

Contracts, Arrangements, Understandings,

Item 6. Contracts, Arrangements, Understandings, or Relationships with respect to Securities of the Company Except as described above or elsewhere in this Statement or incorporated by reference in this Statement, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Person and between the Reporting Persons and any person with respect to any securities of the Company, including, but not limited to, transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

Material to Be Filed as Exhibits

Item 7. Material to Be Filed as Exhibits Exhibit 99.1: List of directors and executive officers of Puyi Inc. (filed herewith) Exhibit 99.2: Form of Securities Exchange Agreement (incorporated by reference to Exhibit 10.1 to the Form 6-K filed by the Reporting Person with the Securities and Exchange Commission on December 27, 2023) CUSIP No. G3314G 102 SCHEDULE 13D Page 5 of 5

Signatures

Signatures After reasonable inquiry and to the best of my knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Date: January 5, 2024 Puyi Inc. By: /s/ Ren Yong Name: Ren Yong Title: Chairman of the Board and Chief Executive Officer

View Full Filing

View this SC 13D filing on SEC EDGAR