On December 14, 2023, before the market opened, Hywin Holdings released a press release entitled “Hywin Holdings Reports Redemption Issues Relating to Certain Asset-Backed Products.” This press release stated, in pertinent part, that “redemption issues have been reported on certain asset-backed products previously distributed by the Company. The asset managers of these products were unable to reach an agreement with the relevant clients to defer redemption. While the Company acted only as distributor of these asset-backed products, the clients are now demanding repayment from the Company. Any failure to adequately deal with these redemption issues could materially and adversely affect our reputation, client relationship, business, financial condition and prospects. The Company has formed a special investigation committee comprised of members of senior management to oversee an internal investigation.”

On this news, the price of Hywin American Depositary Receipts (“ADRs”) fell by $0.53 per ADR, or 16%, to close at $2.77 per ADR on December 14, 2023.