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Noah Holdings Limited Announces Unaudited Financial Results for the Third Quarter of 2019

SHANGHAI, Nov. 11, 2019 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the third quarter of 2019.

THIRD QUARTER 2019 FINANCIAL HIGHLIGHTS

  • Net revenues for the third quarter of 2019 were RMB842.0 million (US$117.8 million), a 0.4% increase from the corresponding period in 2018.

(RMB millions,

except percentages)

Q3 2018



Q3 2019



YoY Change

Wealth management

576.9



542.4



(6.0%)

Asset management

198.5



240.4



21.1%

Lending and other businesses

63.6



59.2



(6.9%)

Total net revenues

839.0



842.0



0.4%

  • Income from operations for the third quarter of 2019 was RMB234.3 million (US$32.8 million), a 13.6% decrease from the corresponding period in 2018.

(RMB millions,

except percentages)

Q3 2018



Q3 2019



YoY Change

Wealth management

169.2



83.5



(50.6%)

Asset management

101.7



145.7



43.3%

Lending and other businesses

0.2



5.1



2,450.0%

Total income from operations

271.1



234.3



(13.6%)

  • Net income attributable to Noah shareholders for the third quarter of 2019 was RMB191.6 million (US$26.8 million), a 7.8% decrease from the corresponding period in 2018.
  • Non-GAAP[1] net income attributable to Noah shareholders for the third quarter of 2019 was RMB353.7 million (US$49.5 million), a 23.7% increase from the corresponding period in 2018.

[1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation, fair value changes of equity securities (unrealized), adjustment for sale of equity securities and net of relevant tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

THIRD QUARTER 2019 OPERATIONAL UPDATES

Wealth Management Business

The Company's wealth management business offers financial products and provides value-added services to high net worth clients in China and overseas. Noah primarily distributes private equity, public securities, credit and insurance products denominated in RMB and other currencies.

  • Total number of registered clients as of September 30, 2019 was 288,245, a 21.7% increase from September 30, 2018.
  • Total number of active clients[2] during the third quarter of 2019 was 3,409, a 17.0% decrease from the corresponding period in 2018.
  • Aggregate value of financial products distributed during the third quarter of 2019 was RMB13.0 billion (US$1.8 billion), a 53.7% decrease from the corresponding period in 2018, due to the fact that the Company is no longer offering single-counterparty credit products to clients.

Product type

Three months ended September 30,


2018


2019


(RMB in billions, except percentages)

Credit products

22.8


81.4%


1.5


11.7%

Private equity products

3.3


11.8%


3.5


26.8%

Public securities products

1.5


5.4%


7.5


57.5%

Other products

0.4


1.4%


0.5


4.0%

All products

28.0


100.0%


13.0


100.0%

  • Average transaction value per active client[3] for the third quarter of 2019 was RMB3.8 million (US$0.5 million), a 44.3% decrease from the corresponding period in 2018.
  • Coverage network in mainland China included 307 service centers covering 81 cities as of September 30, 2019, compared with 306 service centers covering 83 cities as of June 30, 2019.
  • Number of relationship managers was 1,368 as of September 30, 2019, a 4.2% decrease from June 30, 2019, as the Company removed underperforming relationship managers as part of its operational streamlining efforts.

[2] "Active clients" for a given period refers to registered high net worth clients who purchase financial products distributed or provided by Noah during that given period.

[3] "Average transaction value per active client" refers to the average value of financial products that were purchased by active clients during the period specified.

Asset Management Business

The Company's asset management business, Gopher Asset Management Co., Ltd. ("Gopher Asset Management"), is a leading alternative multi-asset manager in China also with international offices in Hong Kong, United States and Canada. Gopher Asset Management develops and manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies. 

  • Total assets under management as of September 30, 2019 were RMB176.5 billion (US$24.7 billion), a 2.4% decrease from June 30, 2019 due to the voluntary accelerated repayments of certain credit products and a 7.5% increase from September 30, 2018.

Investment type

As of
June 30,
2019


Growth


Distribution/

Redemption


As of
September 30,
2019


(RMB billions, except percentages)

Private equity

104.4


57.7%


2.0


0.5


105.9


60.0%

Credit

40.6


22.5%


0.1


7.3


33.4


19.0%

Real estate

19.1


10.6%


1.7


2.1


18.7


10.6%

Public securities[4]

8.2


4.5%


1.6


0.2


9.6


5.4%

Multi-strategies

8.5


4.7%


0.4


-


8.9


5.0%

All Investments

180.8


100.0%


5.8


10.1


176.5


100.0%


[4] The distribution/redemption of public securities also includes market appreciation or depreciation.

Lending and Other Businesses

The Company's lending business utilizes an advanced risk-management system to assess and facilitate short-term loans to high quality borrowers, often secured with collateral. The total amount of loans originated during the third quarter of 2019 was RMB1.3 billion, compared with RMB4.0 billion in the corresponding period of 2018 as the Company reduced loan origination in response to market changes.

Mr. Yi Zhao, Group President of Noah, said, "In response to the economic environment and our transformation strategy, we are no longer offering single-counterparty credit products to our clients, which is reflected in the decline of the credit product transaction value in the third quarter. Instead, we are focusing on satisfying our clients' fixed income investment needs with public securities products such as standardized NAV-based bond funds, mutual funds, etc. We believe the distribution of these new products will continue to ramp up and drive our transaction value growth in the future. Despite structural changes in our product mix, we still achieved resilient financial results. Moreover, we believe client confidence is gradually recovering and our standardized products will meet our clients' expectations. Looking ahead, in the face of a rapidly changing environment, Noah will continue to focus on implementing product transformation, expanding its overseas business and building up its comprehensive portfolio of services, in order to further enhance our financial platform to fully service high net worth clients."  

THIRD QUARTER 2019 FINANCIAL RESULTS

Net Revenues

Net revenues for the third quarter of 2019 were RMB842.0 million (US$117.8 million), a 0.4% increase from the corresponding period in 2018, primarily driven by increased recurring service fee revenues and other service fees, and offset by decreased one-time commissions.

  • Wealth Management Business
    -
     Net revenues from one-time commissions for the third quarter of 2019 were RMB149.6 million (US$20.9 million), a 34.7% decrease from the corresponding period in 2018 due to a decrease in credit products distributed in third quarter of 2019.
    Net revenues from recurring service fees for the third quarter of 2019 were RMB318.9 million (US$44.6 million), a 4.6% increase from the corresponding period in 2018. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.
    Net revenues from performance-based income for the third quarter of 2019 were RMB4.3 million (US$0.6 million), a 64.4% decrease from the corresponding period of 2018, primarily due to a decrease in performance-based income from public securities products.
    - Net revenues from other service fees for the third quarter of 2019 were RMB69.6 million (US$9.7 million), an 124.6% increase from RMB31.0 million in the corresponding period in 2018, primarily due to the growth of various value-added services Noah offers to its high net worth clients.
  • Asset Management Business
    -
    Net revenues from recurring service fees for the third quarter of 2019 were RMB200.4 million (US$28.0 million), a 16.5% increase from the corresponding period in 2018. The increase was primarily due to the increase in assets under management and service fees income generated from voluntary accelerated repayments of certain credit products in the third quarter of 2019.
    - Net revenues from performance-based income for the third quarter of 2019 were RMB38.1 million (US$5.3 million), a 78.6% increase from the corresponding period in 2018, primarily due to an increase in performance-based income from certain real estate funds.
  • Lending and Other Businesses
    -
     Net revenues for the third quarter of 2019 were RMB59.2 million (US$8.3 million), a 6.9% decrease from the corresponding period in 2018, due to reduced loan origination in the second and third quarters of 2019.

Operating Costs and Expenses

Operating costs and expenses for the third quarter of 2019 were RMB607.7 million (US$85.0 million), a 7.0% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB394.8 million (US$55.2 million), selling expenses of RMB83.6 million (US$11.7 million), general and administrative expenses of RMB104.5 million (US$14.6 million) and other operating expenses of RMB52.8 million (US$7.4 million).

  • Operating costs and expenses for the wealth management business for the third quarter of 2019 were RMB458.8 million (US$64.2 million), a 12.5% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits and legal fees.
  • Operating costs and expenses for the asset management business for the third quarter of 2019 were RMB94.8 million (US$13.3 million), a 2.1% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits.
  • Operating costs and expenses for the lending and other businesses for the third quarter of 2019 were RMB54.1 million (US$7.6 million), a 14.7% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits as employees under non-lending businesses were restructured since the beginning of 2019.

Operating Margin

Operating margin for the third quarter of 2019 was 27.8%, compared with 32.3% for the corresponding period in 2018.

  • Operating margin for the wealth management business for the third quarter of 2019 was 15.4%, compared with 29.3% for the corresponding period in 2018, due to legal expenses incurred related to Camsing case.
  • Operating margin for the asset management business for the third quarter of 2019 was 60.6%, compared with 51.2% for the corresponding period in 2018.
  • Income from operations for the lending and other businesses for the third quarter of 2019 was RMB5.1 million (US$0.7 million), compared with RMB0.2 million in the corresponding period of 2018.

Investment Loss

Investment Loss for the third quarter of 2019 was RMB48.4 million (US$6.8 million), compared with investment loss of RMB16.8 million for the corresponding period in 2018. The loss was primarily due to changes in fair value of equity securities and other investments.

Income Tax Expenses

Income tax expenses for the third quarter of 2019 were RMB44.7 million (US$6.3 million), a 27.6% decrease from the corresponding period in 2018, primarily due to lower taxable income. 

Net Income

  • Net Income
    -
     Net income for the third quarter of 2019 was RMB203.8 million (US$28.5 million), which is largely unchanged compared to the corresponding period in 2018.
    Net margin for the third quarter of 2019 was 24.2%, down from 24.5% for the corresponding period in 2018.
    Net income attributable to Noah shareholders for the third quarter of 2019 was RMB191.6 million (US$26.8 million), a 7.8% decrease from the corresponding period in 2018.
    Net margin attributable to Noah shareholders for the third quarter of 2019 was 22.8%, down from 24.8% for the corresponding period in 2018.
    Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2019 was RMB3.13 (US$0.44) and RMB3.10 (US$0.43), respectively, compared with RMB3.51 and RMB3.41 respectively, for the corresponding period in 2018.
  • Non-GAAP Net Income Attributable to Noah Shareholders 
    -
     Non-GAAP net income attributable to Noah shareholders for the third quarter of 2019 was RMB353.7 million (US$49.5 million), a 23.7% increase from the corresponding period in 2018.
    - Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2019 was 42.0%, up from 34.1% for the corresponding period in 2018.
    - Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2019 was RMB5.73 (US$0.80), up from RMB4.68 for the corresponding period in 2018.

Balance Sheet and Cash Flow

As of September 30, 2019, the Company had RMB3,669.2 million (US$513.3 million) in cash and cash equivalents, compared with RMB2,360.1 million as of September 30, 2018 and RMB2,873.7 million as of June 30, 2019.

Net cash inflow from the Company's operating activities during the third quarter of 2019 was RMB220.4 million (US$30.8 million), compared to net cash inflow of RMB449.8 million in the corresponding period in 2018. The decrease was mainly due to changes in working capital.

Net cash inflow from the Company's investing activities during the third quarter of 2019 was RMB440.0 million (US$61.6 million), compared to net cash outflow of RMB203.6 million in the corresponding period in 2018. The cash inflow was primarily due to proceeds from the disposal of various investments.

Net cash inflow from the Company's financing activities was RMB40.6 million (US$5.7 million) in the third quarter of 2019, compared to net cash outflow of RMB16.2 million in the corresponding period in 2018,  primarily due to the capital contribution by non-controlling shareholders of a consolidated subsidiary.

OTHER COMPANY DEVELOPMENTS

The Company also announced today that Mr. Grant Pan has been appointed as Chief Financial Officer, succeeding Mr. Shang Chuang who has decided to depart Noah for new professional pursuits, effective November 30, 2019.

Mr. Pan brings over 17 years of experience to the CFO role in areas such as corporate finance and corporate strategy. He has been serving as COO for Noah's asset management business since 2017. Prior to joining Noah, Mr. Pan was an audit partner with a Big Four accounting firm and assisted a number of successful offerings of China-based companies in the global capital markets. Mr. Pan received his MBA and Master's Degree from Northeastern University in Boston, Massachusetts, and Bachelor's Degree from Beijing Foreign Studies University. He is a member of AICPA, CICPA and HKICPA.

Ms. Jingbo Wang, Chairlady and CEO of Noah, commented, "Mr. Pan is an experienced veteran in the financial services industry and brings a blend of operational and strategic experience to our finance operations since joining our company. We are confident that his extensive experience with financial service firms will prove invaluable to our finance planning and execution after stepping into his new role. Meanwhile, we want to extend our warm appreciation to Shang for his services during the past eight years in various key roles of Noah. We respect his decision to return to Hong Kong to pursue new professional endeavors and sincerely wish him the best."

2019 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2019 will be in the range of RMB1.0 billion to RMB1.1 billion, the mid-point of which representing an increase of 3.9% compared with the full year 2018. This forecast reflects management's current business outlook and is subject to further change.

CONFERENCE CALL

Senior management will host a combined English and Chinese language conference call to discuss the Company's third quarter 2019 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details

Date/Time:

 

Monday, November 11, 2019 at 8:00 p.m., U.S. Eastern Time

Tuesday, November 12, 2019 at 9:00 a.m., Hong Kong Time

Dial in details:


- United States Toll Free

+1-866-311-7654

- Mainland China Toll Free

4001-201-203

- Hong Kong Toll Free

800-905-945

- International

+1-412-317-5227

Conference Title:

Noah Holdings Third Quarter 2019 Earnings Call

Participant Password:

Noah Holdings Limited

A telephone replay will be available starting one hour after the end of the conference call until November 18, 2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10136399.

A live and archived webcast of the conference call will be available at Noah's investor relations website under the News & Events section at http://ir.noahgroup.com.


DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES       

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation, fair value changes of equity investments (unrealized), adjustment for sale of equity securities and net of tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measures used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.

When evaluating the Company's operating performance in the periods presented, management reviewed the foregoing non-GAAP net income attributable to Noah shareholders and per diluted ADS and non-GAAP net margin attributable to Noah shareholders to supplement U.S. GAAP financial data. As such, the Company's management believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management.  

ABOUT NOAH HOLDINGS LIMITED

Noah Holdings Limited (NOAH) is a leading wealth and asset management service provider in China with a focus on high net worth individuals. In the first nine months of 2019, Noah distributed RMB65.4 billion (US$9.5 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB176.5 billion (US$24.7 billion) as of September 30, 2019.

Noah's wealth management business primarily distributes private equity, public securities, credit and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,368 relationship managers across 307 service centers in 81 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company's wealth management business had 288,245 registered clients as of September 30, 2019. As a leading alternative multi-asset manager in China, Gopher Asset Management manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies. The Company also provides lending services and other businesses, including online financial advisory platform and payment technology services.

For more information, please visit Noah at ir.noahgroup.com.

FOREIGN CURRENCY TRANSLATION

In this announcement, the unaudited financial results for the third quarter of 2019 ended September 30, 2019 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.1477 to US$1.00, the effective noon buying rate for September 30, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for 2019 and quotations from management in this announcement, as well as Noah's strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Noah's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah's actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; investment risks associated with financial products distributed to Noah's investors, including the risk of default by counterparties or loss of value due to market or business conditions or misconduct by counterparties; uncertainty regarding the outcome of the legal actions which are being or may be taken by the Company's affiliates in connection with the Camsing situation, including its ability to recoup amounts extended as financing to third parties and the risk of potential claims by investors; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.

Contacts:

Noah Holdings Limited
Ryan Teng
Tel: +86-21-8035-9221
ir@noahgroup.com

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

 

Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)



As of


June 30,


September 30,


September 30,


2019


2019


2019


RMB'000


RMB'000


USD'000

Assets







Current assets:








Cash and cash equivalents

2,873,740


3,669,150


513,333



Restricted cash

2,500


2,500


350



Short-term investments

747,710


557,130


77,945



Accounts receivable

292,971


287,818


40,267



Loans receivable, net

532,284


541,703


75,787



Amounts due from related parties

799,391


666,584


93,259



Loans receivable from factoring business

69,270


60,000


8,394



Other current assets

314,624


298,403


41,748



Total current assets

5,632,490


6,083,288


851,083









Long-term investments

1,141,506


930,055


130,119


Investment in affiliates

1,411,072


1,289,296


180,379


Property and equipment, net

315,788


307,680


43,046


Operating lease right-of-use assets, net

373,784


367,873


51,467


Non-current deferred tax assets

116,306


126,914


17,756


Other non-current assets

75,869


79,654


11,144

Total Assets

9,066,815


9,184,760


1,284,994







Liabilities and Equity







Current liabilities:








Accrued payroll and welfare expenses

461,099


432,800


60,551



Income tax payable

59,743


96,668


13,524



Deferred revenues

144,378


192,614


26,948



Other current liabilities

628,158


333,132


46,607



Total current liabilities

1,293,378


1,055,214


147,630


Operating lease liabilities, non-current

380,862


370,845


51,883


Non-current deferred tax liabilities

66,741


65,314


9,138


Other non-current liabilities

21,832


11,952


1,672


Total Liabilities 

1,762,813


1,503,325


210,323


Equity

7,304,002


7,681,435


1,074,671

Total Liabilities and Equity

9,066,815


9,184,760


1,284,994

 

 

Noah Holdings Limited

Condensed Consolidated Income Statements

(In RMB'000, except for USD data, per ADS data and percentages)

(unaudited)


Three months ended 


September 30,


September  30,


September  30,


Change


2018


2019


2019



Revenues:

RMB'000


RMB'000


USD'000



Revenues from others:








One-time commissions

177,863


129,786


18,158


(27.0%)

Recurring service fees

140,293


135,201


18,915


(3.6%)

Performance-based income

12,215


4,383


613


(64.1%)

Other service fees

98,802


131,950


18,460


33.5%

Total revenues from others

429,173


401,320


56,146


(6.5%)

Revenues from funds Gopher
     manages:








One-time commissions

54,697


21,137


2,957


(61.4%)

Recurring service fees

338,300


386,381


54,057


14.2%

Performance-based income

21,411


38,299


5,358


78.9%

Total revenues from funds
     Gopher manages

414,408


445,817


62,372


7.6%

Total revenues

843,581


847,137


118,518


0.4%

Less: VAT related surcharges 

(4,597)


(5,150)


(721)


12.0%

Net revenues

838,984


841,987


117,797


0.4%

Operating costs and expenses:








Compensation and benefits








Relationship manager
compensation

(143,831)


(148,572)


(20,786)


3.3%

Others

(241,269)


(246,277)


(34,456)


2.1%

Total compensation and
     benefits

(385,100)


(394,849)


(55,242)


2.5%

Selling expenses

(81,224)


(83,592)


(11,695)


2.9%

General and administrative
     expenses 

 

(60,010)


 

(104,450)


 

(14,613)


74.1%

Other operating expenses 

(51,106)


(52,838)


(7,392)


3.4%

Government grants 

9,518


28,049


3,924


194.7%

Total operating costs and
     expenses 

 

(567,922)


 

(607,680)


 

(85,018)


7.0%

Income from operations 

271,062


234,307


32,779


(13.6%)

Other income (expense):








Interest income 

14,237


13,774


1,927


(3.3%)

Interest expenses

1,156


-


-


N.A.

Investment loss

(16,817)


(48,405)


(6,772)


187.8%

Other expense

(1,836)


(5,114)


(715)


178.5%

Total other expense

(3,260)


(39,745)


(5,560)


1,119.2%

Income before taxes and
     income from equity in
     affiliates

267,802


194,562


27,219


(27.3%)

Income tax expense

(61,804)


(44,737)


(6,259)


(27.6%)

Income (loss) from equity in
     affiliates

 

(796)


 

53,974


 

7,551


 

N.A.

Net income

205,202


203,799


28,511


(0.7%)

Less: net (loss) income
     attributable to non-controlling
     interests

 

 

(2,506)


 

 

12,201


 

 

1,707


 

 

N.A.

Net income attributable to
     Noah shareholders 

207,708


191,598


26,804


(7.8%)









Income per ADS, basic

3.51


3.13


0.44


(10.8%)

Income per ADS, diluted

3.41


3.10


0.43


(9.1%)

 

Margin analysis:








Operating margin

32.3%


27.8%


27.8%



Net margin

24.5%


24.2%


24.2%



 

Weighted average ADS
     equivalent[1]:








Basic

59,172,524


61,308,638


61,308,638



Diluted

61,615,856


61,759,161


61,759,161



ADS equivalent outstanding at
     end of period

 

59,430,433


 

61,480,292


 

61,480,292












[1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two
ADSs.

 

 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)


Three months ended 




September 30,


September 30,


September 30,


Change


2018


2019


2019




RMB'000


RMB'000


USD'000



Net income

205,202


203,799


28,513


(0.7%)

Other comprehensive income, net of tax:








Foreign currency translation adjustments

50,719


119,641


16,738


135.9%

Fair value fluctuation of available for sale
Investment (after tax)

(289)


(3,191)


(446)


1,004.2%

Comprehensive income

255,632


320,249


44,805


25.3%

Less: Comprehensive income (loss)
attributable to non-controlling interests

(2,634)


12,052


1,686


N.A.

Comprehensive income attributable to
Noah
shareholders

258,266


308,197


43,119


19.3%


 

 

Noah Holdings Limited

Supplemental Information

(unaudited)


As of




September 30,
2018


September 30,
2019


Change







Number of registered clients 

236,906


288,245


21.7%

Number of relationship managers 

1,559


1,368


(12.3%)

Number of cities in mainland China under
coverage

83


81


(2.4%)














Three months ended




September 30,
2018


September 30,
2019


Change


(in millions of RMB, except number of active clients and
percentages)

Number of active clients

4,108


3,409


(17.0%)

Transaction value:






Credit products

22,775


1,517


(93.3%)

Private equity products

3,300


3,477


5.4%

Public securities products

1,490


7,444


399.6%

Other products

430


513


19.3%

Total transaction value

27,995


12,951


(53.7%)

Average transaction value per active client

6.81


3.80


(44.3%)

 

 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)


Three months ended September 30, 2019


Wealth
Management

 Business


Asset
Management

Business


Other
Financial
Services
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from others








One-time commissions

129,099


687


-


129,786

Recurring service fees

133,825


1,376


-


135,201

Performance-based income

4,346


37


-


4,383

Other service fees

69,841


1,197


60,912


131,950

Total revenues from others

337,111


3,297


60,912


401,320

Revenues from funds Gopher manages








One-time commissions

21,053


84


-


21,137

Recurring service fees

186,251


200,130


-


386,381

Performance-based income

-


38,299


-


38,299

Total revenues from funds Gopher
     manages 

207,304


238,513


-


445,817

Total revenues

544,415


241,810


60,912


847,137

Less: business taxes and related
     surcharges

(2,067)


(1,368)


(1,715)


(5,150)

Net revenues

542,348


240,442


59,197


841,987

Operating costs and expenses:








Compensation and benefits








Relationship managers

(148,572)


-


-


(148,572)

Others

(155,102)


(66,914)


(24,261)


(246,277)

Total compensation and benefits

(303,674)


(66,914)


(24,261)


(394,849)

Selling expenses

(69,563)


(9,315)


(4,714)


(83,592)

General and administrative
     expenses

(77,370)


(17,916)


(9,164)


(104,450)

Other operating expenses

(33,905)


(2,947)


(15,986)


(52,838)

Government grants

25,740


2,302


7


28,049

Total operating costs and expenses

(458,772)


(94,790)


(54,118)


(607,680)

Income from operations

83,576


145,652


5,079


234,307

 

 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)



Three months ended September 30, 2018



Wealth
Management
Business


Asset
Management
Business


Other
Financial
Services
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from others








One-time commissions

177,305


558


-


177,863

Recurring service fees

131,988


8,305


-


140,293

Performance-based income

12,215


-


-


12,215

Other service fees

31,133


2,671


64,998


98,802

Total revenues from others

352,641


11,534


64,998


429,173

Revenues from funds Gopher
     manages








One-time commissions

52,758


1,939


-


54,697

Recurring service fees

174,083


164,217


-


338,300

Performance-based income

-


21,411


-


21,411

Total revenues from funds Gopher
     manages

226,841


187,567


-


414,408

Total revenues

579,482


199,101


64,998


843,581

Less: business taxes and related
     surcharges 

(2,587)


(630)


(1,380)


(4,597)

Net revenues

576,895


198,471


63,618


838,984

Operating costs and expenses:








Compensation and benefits








Relationship manager compensation

(143,550)


(10)


(271)


(143,831)

Performance fee compensation

-


(5,975)


-


(5,975)

Other compensations

(142,420)


(62,725)


(30,149)


(235,294)

Total compensation and benefits

(285,970)


(68,710)


(30,420)


(385,100)

Selling expenses

(74,160)


(3,747)


(3,317)


(81,224)

General and administrative
     expenses 

(34,092)


(20,046)


(5,872)


(60,010)

Other operating expenses

(23,010)


(4,258)


(23,838)


(51,106)

Government grants 

9,518


-


-


9,518

Total operating costs and expenses 

(407,714)


(96,761)


(63,447)


(567,922)

Income from operations

169,181


101,710


171


271,062

 

 

Noah Holdings Limited

Supplement Revenue Information by Geography

 (unaudited)

 

Three months ended September 30, 2019


Wealth
Management

 Business


Asset
Management

Business


Other
Financial
Services
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Mainland China

347,744


212,137


60,912


620,793

Hong Kong

139,406


26,829


-


166,235

Others

57,265


2,844


-


60,109

Total revenues

544,415


241,810


60,912


847,137



Three months ended September 30, 2018


Wealth
Management

 Business


Asset
Management

Business


Other
Financial
Services
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Mainland China

445,416


150,119


64,998


660,533

Hong Kong

133,347


48,982


-


182,329

Others

719


-


-


719

Total revenues

579,482


199,101


64,998


843,581

 

 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

(In RMB, except for per ADS data and percentages)

(unaudited)[5]


Three months ended





September 30,


September 30,


Change



2018


2019





RMB'000


RMB'000











Net income attributable to Noah shareholders

207,708


191,598


(7.8%)


Adjustment for share-based compensation

35,647


21,310


(40.2%)


Less: loss from fair value changes of equity securities
     (unrealized)

 

(20,686)


 

(6,047)


(70.8%)


Add: gains from sales of equity securities

29,891


139,816


367.8%


Less: tax effect of adjustments

7,961


5,059


(36.5%)


Adjusted net income attributable to Noah shareholders
     (non-GAAP)

285,971


353,712


23.7%









Net margin attributable to Noah shareholders

24.8%


22.8%




Non-GAAP net margin attributable to Noah shareholders

34.1%


42.0%











Net income attributable to Noah shareholders per ADS,
     diluted

3.41


3.10


(9.1%)


Non-GAAP net income attributable to Noah shareholders
     per ADS, diluted

4.68


5.73


22.4%



[5] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the
effects of all forms of share-based compensation, fair value changes of equity securities (unrealized),
adjustment for sale of equity securities and net of tax impact, if any.

 

 

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