View:
United States securities and exchange commission logo
March 30, 2023
Wang Dian
Chief Executive Officer
Hywin Holdings Ltd.
F3, Hywin Financial Centre
8 Yincheng Mid. Road
Pudong New District , Shanghai 200120
People s Republic of China
Re: Hywin Holdings Ltd.
Form 20-F for
Fiscal Year Ended June 30, 2022
Filed October 12,
2022
File No. 001-40238
Dear Wang Dian:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F filed October 12, 2022
Introduction, page 1
1. In future filings,
please revise your definition of "China" or "PRC" to remove the
exclusion of Hong Kong
and Macau from this definition. Please include your proposed
disclosure in your
response letter.
D. Risk Factors, page 7
2. Given the Chinese
government s significant oversight and discretion over the conduct of
your business, in
future filings please revise to highlight separately the risk that the
Chinese government may
intervene or influence your operations at any time, which could
result in a material
change in your operations and/or the value of the securities you are
registering. Also,
given recent statements by the Chinese government indicating an intent
Wang Dian
FirstName LastNameWang Dian
Hywin Holdings Ltd.
Comapany
March NameHywin Holdings Ltd.
30, 2023
March2 30, 2023 Page 2
Page
FirstName LastName
to exert more oversight and control over offerings that are conducted
overseas and/or
foreign investment in China-based issuers, acknowledge the risk that
any such action
could significantly limit or completely hinder your ability to offer
or continue to offer
securities to investors and cause the value of such securities to
significantly decline or be
worthless. Please include your proposed disclosure in your response
letter.
Item 4. Information on the Company
B. Business Overview, page 90
3. We note your disclosure that the Cayman Islands holding company
controls and receives
the economic benefits of the VIE s business operations through
contractual agreements
between the VIE and your Wholly Foreign-Owned Enterprise (WFOE) and
that those
agreements are designed to provide your WFOE with the power, rights,
and obligations
equivalent in all material respects to those it would possess as the
principal equity holder
of the VIE. We also note your disclosure that the Cayman Islands
holding company is the
primary beneficiary of the VIE. However, neither the investors in the
holding company
nor the holding company itself have an equity ownership in, direct
foreign investment in,
or control of, through such ownership or investment, the VIE.
Accordingly, in future
filings, please refrain from implying that the contractual agreements
are equivalent to
equity ownership in the business of the VIE. Any references to control
or benefits that
accrue to you because of the VIE should be limited to a clear
description of the conditions
you have satisfied for consolidation of the VIE under U.S. GAAP.
Additionally, your
disclosure should clarify that you are the primary beneficiary of the
VIE for accounting
purposes. Please also disclose in future filings, if true, that the
VIE agreements have not
been tested in a court of law. Please include your proposed disclosure
in your response
letter.
4. We note that the consolidated VIEs constitute a material part of your
consolidated
financial statements. In future filings, please provide in tabular
form a condensed
consolidating schedule that disaggregates the operations and depicts
the financial position,
cash flows, and results of operations as of the same dates and for the
same periods for
which audited consolidated financial statements are required. The
schedule should present
major line items, such as revenue and cost of goods/services, and
subtotals and
disaggregated intercompany amounts, such as separate line items for
intercompany
receivables and investment in subsidiary. The schedule should also
disaggregate the
parent company, the VIEs and its consolidated subsidiaries, the WFOEs
that are the
primary beneficiary of the VIEs, and an aggregation of other entities
that are consolidated.
The objective of this disclosure is to allow an investor to evaluate
the nature of assets held
by, and the operations of, entities apart from the VIE, as well as the
nature and amounts
associated with intercompany transactions. Any intercompany amounts
should be
presented on a gross basis and when necessary, additional disclosure
about such amounts
should be included in order to make the information presented not
misleading. Please
include the proposed disclosure in your response letter.
Wang Dian
FirstName LastNameWang Dian
Hywin Holdings Ltd.
Comapany
March NameHywin Holdings Ltd.
30, 2023
March3 30, 2023 Page 3
Page
FirstName LastName
General
5. In future filings, please prominently disclose that you are not a
Chinese operating
company but a Cayman Islands holding company with operations conducted
by your
subsidiaries and through contractual arrangements with a variable
interest entity (VIE)
based in China and that this structure involves unique risks to
investors. If true, disclose
that these contracts have not been tested in court. Explain whether
the VIE structure is
used to provide investors with exposure to foreign investment in
China-based companies,
and disclose that investors may never hold equity interests in the
Chinese operating
company. Your disclosure should acknowledge that Chinese regulatory
authorities could
disallow this structure, which would likely result in a material
change in your operations
and/or a material change in the value of the securities that you are
registering for sale,
including that it could cause the value of such securities to
significantly decline of become
worthless. Please include your proposed disclosure in the response
letter.
6. In future filings, clearly disclose how you will refer to the holding
company, subsidiaries,
and VIEs when providing the disclosure throughout the document so that
it is clear to
investors which entity the disclosure is referencing and which
subsidiaries or entities are
conducting the business operations. Refrain from using terms such as
we or our when
describing activities or functions of a VIE. For example, disclose, if
true, that your
subsidiaries and/or the VIE conduct operations in China, that the VIE
is consolidated for
accounting purposes but is not an entity in which you own equity, and
that the holding
company does not conduct operations. Disclose clearly the entity
(including the domicile)
in which investors are purchasing an interest. Please include the
proposed disclosure in
your response letter.
7. In future filings, provide a description of how cash is transferred
through your
organization and disclose your intentions to distribute earnings or
settle amounts owed
under the VIE agreements. State whether any transfers, dividends, or
distributions have
been made to date between the holding company, its subsidiaries, and
consolidated VIEs,
or to investors, and quantify the amounts where applicable. Provide
cross-references to the
condensed consolidating schedule and the consolidated financial
statements. Please
include the proposed disclosure in your response letter.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Madeleine Joy Mateo at 202-551-3465 or Susan Block at
202-551-3210
if you have questions.
Sincerely,
Wang Dian
Hywin Holdings Ltd.
March 30, 2023
Page 4
FirstName LastNameWang Dian
Division of Corporation Finance
Comapany NameHywin Holdings Ltd.
Office of Finance
March 30, 2023 Page 4
cc: LOK Wai
FirstName LastName