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

August 28, 2019

SHANGHAI, Aug. 28, 2019 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: 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 second quarter of 2019.

SECOND QUARTER 2019 FINANCIAL HIGHLIGHTS

  • Net revenues for the second quarter of 2019 were RMB871.6 million (US$127.0 million), a 9.3% increase from the corresponding period in 2018.

(RMB millions,

except percentages)

Q2 2018



Q2 2019



YoY Change

Wealth management

556.5



625.6



12.4%

Asset management

195.5



171.1



(12.5%)

Lending and other businesses

45.6



74.9



64.1%

Total net revenues

797.6



871.6



9.3%

  • Income from operations for the second quarter of 2019 was RMB251.9 million (US$36.7 million), a 13.9% increase from the corresponding period in 2018.

(RMB millions,

except percentages)

Q2 2018



Q2 2019



YoY Change

Wealth management

135.7



129.9



(4.3%)

Asset management

100.7



86.8



(13.8%)

Lending and other businesses

(15.1)



35.2



N.A.

Total income from operations

221.3



251.9



13.9%

  • Net income attributable to Noah shareholders for the second quarter of 2019 was RMB250.2 million (US$36.4 million), a 39.4% increase from the corresponding period in 2018.
  • Non-GAAP[1]net income attributable to Noah shareholders for the second quarter of 2019 was RMB263.4 million (US$38.4 million), a 6.4% 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.

SECOND 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 credit, private equity, public securities and insurance products denominated in RMB and other currencies.

  • Total number of registered clients as of June 30, 2019 was 283,655, a 28.6% increase from June 30, 2018.
  • Total number of active clients[2]during the second quarter of 2019 was 5,882, a 31.9% increase from June 30, 2018.
  • Aggregate value of financial products distributed during the second quarter of 2019 was RMB24.4 billion (US$3.5 billion), a 16.2% decrease from the second quarter of 2018.

Three months ended June 30,


2018


2019

Product type

(RMB in billions, except percentages)

Credit products

19.3


66.3%


9.8


40.0%

Private equity products

6.3


21.6%


7.7


31.5%

Public securities[3] products

2.8


9.7%


6.0


24.7%

Other products

0.7


2.4%


0.9


3.8%

All products

29.1


100.0%


24.4


100.0%

  • Average transaction value per active client[4] for the second quarter of 2019 was RMB4.1 million (US$0.6 million), a 36.4% decrease from the corresponding period in 2018.
  • Coverage network in mainland China included 306 service centers covering 83 cities as of June 30, 2019, up from 287 service centers covering 81 cities as of June 30, 2018.
  • Number of relationship managers was 1,428 as of June 30, 2019, a 4.5% decrease from June 30, 2018.

[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] "Public securities products" refer to the financial products that invest in publicly traded securities, including stocks and bonds. This was previously referred to as "secondary market equity" financial products. Starting in January 2019, we included the transaction value of mutual fund products in the total transaction value.

[4] "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 and the United States. 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 June 30, 2019 were RMB180.8 billion (US$26.3 billion), a 5.7% increase from March 31, 2019 and an 11.9% increase from June 30, 2018.

Investment type

As of 
March 31, 
2019



Growth



Distribution/ 
Redemption


As of
June 30, 
2019


(RMB billions, except percentages)

Private equity

101.1


59.1%


4.7


1.4


104.4


57.7%

Credit

38.8


22.7%


3.7


1.9


40.6


22.5%

Real estate

17.4


10.2%


2.7


1.0


19.1


10.6%

Public securities

6.9


4.0%


2.2


0.9[5]


8.2


4.5%

Multi-strategies

6.9


4.0%


1.6


-


8.5


4.7%

All Investments

171.1


100.0%


14.9


5.2


180.8


100.0%


[5] 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 second quarter of 2019 was RMB2.8 billion, a decrease of 12.5% from the corresponding period of 2018. Other businesses include an online financial advisory platform and payment technology services.

Mr. Yi Zhao, Group President of Noah, said, "We are facing a stringent macro-economic situation in 2019, with the downturn of China's credit cycle coinciding with geo-political tensions. This has led to short-term headwinds in our business. These challenges further solidify our dedication to transforming our credit business to NAV-based portfolios and strengthening our investment capabilities. We remain confident in the growth potential of both the wealth management and asset management industries in China, and believe we will benefit by executing the Company's long-term strategy of serving Chinese high net worth clients with high-quality financial products and comprehensive services globally." 

SECOND QUARTER 2019 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2019 were RMB871.6 million (US$127.0 million), a 9.3% increase from the corresponding period in 2018, primarily driven by increased one-time commissions and other service fees, and partially offset by decreased performance-based income.

- Wealth Management Business

  • Net revenues from one-time commissions for the second quarter of 2019 were RMB293.2 million (US$42.7 million), a 25.9% increase from the corresponding period in 2018, primarily due to sales of products with higher one-time commission rates.
  • Net revenues from recurring service fees for the second quarter of 2019 were RMB268.7 million (US$39.1 million), a 5.5% decrease from the corresponding period in 2018, mainly due to the maturity of certain products previously distributed with higher recurring fee rates.
  • Net revenues from performance-based income for the second quarter of 2019 were RMB2.0 million (US$0.3 million), compared with RMB11.8 million in 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 second quarter of 2019 were RMB61.7 million (US$9.0 million), an increase from RMB27.5 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 second quarter of 2019 were RMB163.9 million (US$23.9 million), relatively flat compared with the corresponding period in 2018.
  • Net revenues from performance-based income for the second quarter of 2019 were RMB5.6 million (US$0.8 million), compared with RMB27.3 million in the corresponding period of 2018, primarily due to a decrease in performance-based income from real estate products.

- Lending and Other Businesses

  • Net revenues for the second quarter of 2019 were RMB74.9 million (US$10.9 million), a 64.1% increase from the corresponding period in 2018. The increase was primarily due to the service fee income generated from loans originated in the previous periods.

Operating Costs and Expenses

Operating costs and expenses for the second quarter of 2019 were RMB619.7 million (US$90.3 million), a 7.5% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB437.5 million (US$63.7 million), selling expenses of RMB79.6 million (US$11.6 million), general and administrative expenses of RMB84.2 million (US$12.3 million) and other operating expenses of RMB51.1 million (US$7.4 million).

  • Operating costs and expensesfor the wealth management business for the second quarter of 2019 were RMB495.8 million (US$72.2 million), a 17.8% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits and provision of doubtful accounts.
  • Operating costs and expensesfor the asset management business for the second quarter of 2019 were RMB84.3 million (US$12.3 million), an 11.2% decrease from the corresponding period in 2018, primarily due to a decrease in general and administrative expenses.
  • Operating costs and expensesfor the lending and other businesses for the second quarter of 2019 were RMB39.7 million (US$5.8 million), a 34.6% 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 second quarter of 2019 was 28.9%, increased from 27.7% for the corresponding period in 2018.

  • Operating margin for the wealth management business for the second quarter of 2019 was 20.8%, compared with 24.4% for the corresponding period in 2018.
  • Operating marginfor the asset management business for the second quarter of 2019 was 50.8%, compared with 51.5% for the corresponding period in 2018.
  • Income from operation for the lending and other businesses for the second quarter of 2019 was RMB35.2 million (US$5.1 million), compared with an operating loss of RMB15.1 million for the corresponding period in 2018.

Investment Income

Investment income for the second quarter of 2019 was RMB11.8 million (US$1.7 million), compared with RMB16.8 million for the corresponding period in 2018.

Income Tax Expenses

Income tax expenses for the second quarter of 2019 were RMB67.6 million (US$9.9 million), a 17.3% increase from the corresponding period in 2018, primarily due to higher taxable income. 

Net Income

Net Income

  • Net income for the second quarter of 2019 was RMB254.4 million (US$37.1 million), a 36.5% increase from the corresponding period in 2018.
  • Net margin for the second quarter of 2019 was 29.2%, up from 23.4% for the corresponding period in 2018.
  • Net income attributable to Noah shareholders for the second quarter of 2019 was RMB250.2 million (US$36.4 million), a 39.4% increase from the corresponding period in 2018.
  • Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2019 was RMB4.09(US$0.60) and RMB4.04(US$0.59), respectively, up from RMB3.13 and RMB3.00 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 second quarter of 2019 was RMB263.4 million (US$38.4 million), a 6.4% increase from the corresponding period in 2018.
  • Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2019 was 30.2%, compared with 31.0% for the corresponding period in 2018.
  • Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2019 was RMB4.25(US$0.62), up from RMB4.12 for the corresponding period in 2018.

Balance Sheet and Cash Flow

As of June 30, 2019, the Company had RMB2,873.7 million (US$418.6 million) in cash and cash equivalents, compared with RMB2,869.6 million as of March 31, 2019 and RMB2,094.8 million as of June 30, 2018.

Net cash inflow from the Company's operating activities during the second quarter of 2019 was RMB72.6 million (US$10.6 million), driven by profit earned from normal business operations and partially offset by payment of employee annual bonuses in the second quarter.

Net cash outflow from the Company's investing activities during the second quarter of 2019 was RMB370.6 million (US$54.0 million), primarily due to various short-term investments made in the second quarter.

Net cash inflow from the Company's financing activities was RMB277.8 million (US$40.5 million) in the second quarter of 2019, primarily due to capital contributions from non-controlling shareholders of a consolidated subsidiary.

UPDATE ON CREDIT FUNDS

As previously announced on July 8, 2019, certain credit funds managed by an affiliate of Gopher Asset Management provided supply chain financing involving companies related to Camsing International Holding Limited ("Camsing"). It is suspected that fraud has been committed by certain counterparties involved in such financings. Media in China has reported that a number of individuals were arrested due to these suspected fraudulent activities. The relevant criminal investigation is ongoing. Gopher Asset Management is assisting police and other government authorities in their investigation, and is pursuing all available actions, including filing civil litigation against the relevant debtor and guarantors, to protect the interests of the Company's fund investors and to recover assets.

2019 FORECAST

In consideration of the macro-economic conditions in China, ongoing geo-political tensions, as well as the expected short-term impact resulting from the Camsing incident, the Company is updating its full year 2019 guidance. 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 updated forecast represents a change from the Company's previous guidance of a full year non-GAAP net income attributable to Noah shareholders in the range of RMB1.13 billion to RMB1.18 billion, and 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 second quarter 2019 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details

Date/Time:

 

Wednesday, Aug 28, 2019 at 8:00 p.m., U.S. Eastern Time

Thursday, Aug 29, 2019 at 8:00 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 Second 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 September 4, 2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10134397.

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

DISCUSSION OF 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 (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on high net worth individuals. In the first half of 2019, Noah distributed RMB52.4 billion (US$7.6 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB180.8 billion (US$26.3 billion) as of June 30, 2019.

Noah's wealth management business primarily distributes credit, private equity, public securities and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,428 relationship managers across 306 service centers in 83 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 283,655 registered clients as of June 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 second quarter of 2019 ended June 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 RMB6.8650 to US$1.00, the effective noon buying rate for June 28, 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.

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited 

Condensed Consolidated Balance Sheets

(unaudited)


As of


March 31,


June 30, 


June 30, 


2019


2019


2019


RMB'000


RMB'000


USD'000

Assets







Current assets:








Cash and cash equivalents

2,869,638


2,873,740


418,607



Restricted cash

2,500


2,500


364



Short-term investments

501,646


747,710


108,916



Accounts receivable

330,770


292,971


42,676



Loans receivable

507,650


532,284


77,536



Amounts due from related parties

664,305


799,391


116,444



Loans receivable from factoring business

14,010


69,270


10,090



Other current assets 

476,160


314,624


45,830



Total current assets 

5,366,679


5,632,490


820,463


Long-term investments

1,056,387


1,141,506


166,279


Investment in affiliates

1,401,542


1,411,072


205,546


Property and equipment, net

332,570


315,788


46,000


Operating lease right-of-use assets, net

290,062


373,784


54,448


Non-current deferred tax assets

113,383


116,306


16,942


Other non-current assets 

67,577


75,869


11,052

Total Assets

8,628,200


9,066,815


1,320,730

Liabilities and Equity







Current liabilities:








Accrued payroll and welfare expenses 

727,796


461,099


67,167



Income tax payable

106,337


59,743


8,703



Deferred revenues

154,723


144,378


21,031



Other current liabilities

540,184


628,158


91,502


Total current liabilities

1,529,040


1,293,378


188,403


Operating lease liabilities, non-current

311,650


380,862


55,479


Non-current deferred tax liabilities

66,992


66,741


9,722


Other non-current liabilities

28,638


21,832


3,180


Total Liabilities 

1,936,320


1,762,813


256,784


Equity

6,691,880


7,304,002


1,063,946

Total Liabilities and Equity

8,628,200


9,066,815


1,320,730

 

 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)


Three months ended 


June 30,


June 30,


June 30,


Change


2018


2019


2019



Revenues:

RMB'000


RMB'000


USD'000



Revenues from others:








One-time commissions

161,791


193,937


28,250


19.9%

Recurring service fees

167,196


131,164


19,106


(21.6%)

Performance-based income

10,082


2,051


299


(79.7%)

Other service fees

76,883


139,940


20,385


82.0%

Total revenues from others

415,952


467,092


68,040


12.3%

Revenues from funds Gopher manages:








One-time commissions

72,805


101,104


14,727


38.9%

Recurring service fees

284,389


303,578


44,221


6.7%

Performance-based income

29,213


5,610


817


(80.8%)

Total revenues from funds Gopher manages

386,407


410,292


59,765


6.2%

Total revenues

802,359


877,384


127,805


9.4%

Less: VAT related surcharges 

(4,757)


(5,786)


(843)


21.6%

Net revenues

797,602


871,598


126,962


9.3%

Operating costs and expenses:








Compensation and benefits








Relationship managers

(168,429)


(175,898)


(25,622)


4.4%

Others

(221,835)


(261,604)


(38,107)


17.9%

Total compensation and benefits

(390,264)


(437,502)


(63,729)


12.1%

Selling expenses

(120,472)


(79,557)


(11,589)


(34.0%)

General and administrative expenses

(68,510)


(84,203)


(12,266)


22.9%

Other operating expenses 

(28,589)


(51,063)


(7,438)


78.6%

Government grants 

31,432


32,587


4,747


3.7%

Total operating costs and expenses 

(576,403)


(619,738)


(90,275)


7.5%

Income from operations 

221,199


251,860


36,687


13.9%

Other income:








Interest income 

18,633


29,225


4,257


56.8%

Interest expenses

(3,313)


-


-


(100.0%)

Investment income 

16,754


11,847


1,726


(29.3%)

Other (expense) income 

(21,357)


310


45


N.A.

Total other income

10,717


41,382


6,028


286.1%

Income before taxes and income from equity
     in affiliates

231,916


293,242


42,715


26.4%

Income tax expense

(57,651)


(67,622)


(9,850)


17.3%

Income from equity in affiliates

12,087


28,829


4,199


138.5%

Net income

186,352


254,449


37,064


36.5%

Less: net income attributable to non-
     controlling interests

 

6,867


 

4,266


 

621


 

(37.9%)

Net income attributable to Noah
     shareholders 

179,485


250,183


36,443


39.4%









Income per ADS, basic

3.13


4.09


0.60


30.7%

Income per ADS, diluted

3.00


4.04


0.59


34.7%

 

Margin analysis:








Operating margin

27.7%


28.9%


28.9%



Net margin

23.4%


29.2%


29.2%



 

Weighted average ADS equivalent[1]:








Basic

57,295,516


61,211,098


61,211,098



Diluted

60,747,298


61,966,245


61,966,245



ADS equivalent outstanding at end of period

58,498,187


61,259,417


61,259,417




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

 

 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)


Six months ended 


June 30,


June 30,


June 30,


Change


2018


2019


2019



Revenues:

RMB'000


RMB'000


USD'000



Revenues from others:








One-time commissions

381,332


410,580


59,808


7.7%

Recurring service fees

311,128


263,640


38,403


(15.3%)

Performance-based income

30,739


3,145


458


(89.8%)

Other service fees

136,872


285,317


41,561


108.5%

Total revenues from others

860,071


962,682


140,230


11.9%

Revenues from funds Gopher
     manages:








One-time commissions

171,189


209,012


30,446


22.1%

Recurring service fees

538,456


591,734


86,196


9.9%

Performance-based income

68,261


9,368


1,365


(86.3%)

Total revenues from funds
     Gopher manages

777,906


810,114


118,007


4.1%

Total revenues

1,637,977


1,772,796


258,237


8.2%

Less: VAT related surcharges 

(9,456)


(11,314)


(1,648)


19.6%

Net revenues

1,628,521


1,761,482


256,589


8.2%

Operating costs and expenses:








Compensation and benefits








Relationship managers 

(327,130)


(343,166)


(49,988)


4.9%

Others

(423,847)


(498,641)


(72,635)


17.6%

Total compensation and
     benefits

(750,977)


(841,807)


(122,623)


12.1%

Selling expenses

(226,731)


(170,013)


(24,765)


(25.0%)

General and administrative
     expenses 

(124,439)


(142,753)


(20,794)


14.7%

Other operating expenses 

(66,552)


(101,891)


(14,842)


53.1%

Government grants 

35,920


49,367


7,191


37.4%

Total operating costs and
     expenses 

(1,132,779)


(1,207,097)


(175,833)


6.6%

Income from operations 

495,742


554,385


80,756


11.8%

Other income:








Interest income 

41,500


52,348


7,625


26.1%

Interest expenses

(10,182)


(430)


(63)


(95.8%)

Investment income 

58,886


37,510


5,464


(36.3%)

Other expense 

(20,194)


(1,618)


(236)


(92.0%)

Total other income

70,010


87,810


12,790


25.4%

Income before taxes and income
     from equity in affiliates

565,752


642,195


93,546


13.5%

Income tax expense

(131,313)


(147,114)


(21,430)


12.0%

Income from equity in affiliates

12,739


46,952


6,839


268.6%

Net income

447,178


542,033


78,955


21.2%

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

(772)


7,273


1,059


N.A.

Net income attributable to
     Noah shareholders 

447,950


534,760


77,896


19.4%









Income per ADS, basic

7.82


8.78


1.28


12.3%

Income per ADS, diluted

7.37


8.65


1.26


17.4%









Margin analysis:








Operating margin

30.4%


31.5%


31.5%



Net margin

27.5%


30.8%


30.8%











Weighted average ADS equivalent[1]:








Basic

57,295,516


60,892,670


60,892,670



Diluted

60,747,298


61,933,765


61,933,765



ADS equivalent outstanding at
     end of period

58,498,187


61,259,417


61,259,417











[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 




June 30,


June 30,


June 30,


Change


2018


2019


2019




RMB'000


RMB'000


USD'000



Net income

186,352


254,449


37,065


36.5%

Other comprehensive income, net of tax:








Foreign currency translation adjustments

52,539


54,495


7,938


3.7%

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

(2,469)


2,339


341


N.A.

Comprehensive income

236,422


311,283


45,344


31.7%

Less: Comprehensive income attributable
     to non-controlling interests

6,835


4,199


612


(38.6%)

Comprehensive income attributable to
     Noah
shareholders

229,587


307,084


44,732


33.8%



Noah Holdings Limited 

Condensed Comprehensive Income Statements 

(unaudited)


Six months ended 




June 30,


June 30,


June 30,


Change


2018


2019


2019




RMB'000


RMB'000


USD'000



Net income

447,178


542,033


78,955


21.2%

Other comprehensive income, net of tax:








Foreign currency translation adjustments

17,676


23,637


3,443


33.7%

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

(1,093)


2,387


348


N.A.

Comprehensive income

463,761


568,057


82,746


22.5%

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

(744)


7,416


1,080


N.A.

Comprehensive income attributable to
     Noah
shareholders

464,505


560,641


81,666


20.7%











 

 

Noah Holdings Limited

Supplemental Information 

(unaudited) 


As of 




June 30, 
2018


June 30, 
2019


Change







Number of registered clients 

220,601


283,655


28.6%

Number of relationship managers 

1,495


1,428


(4.5%)

Number of cities in mainland China under coverage 

81


83


2.5%








Three months ended 




June 30,
2018


June 30, 
2019


Change


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

Number of active clients 

4,461


5,882


31.9%

Transaction value: 






Credit products 

19,252


9,750


(49.4%)

Private equity products 

6,287


7,658


21.8%

Public securities products

2,835


6,021


112.4%

Other products

678


934


37.7%

Total transaction value

29,052


24,363


(16.1%)

Average transaction value per active client 

6.51


4.14


(36.4%)

 

 

Noah Holdings Limited 

Segment Condensed Income Statements 

(unaudited) 



Three months ended June 30, 2019


Wealth 


Asset 


Lending and 


Total


Management


Management


Other




Business


Business


Businesses




RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








   Revenues from others








   One-time commissions

193,567


370


-


193,937

   Recurring service fees

129,698


1,466


-


131,164

   Performance-based income

1,984


67


-


2,051

   Other service fees

62,032


1,193


76,715


139,940

   Total revenues from others

387,281


3,096


76,715


467,092

Revenues from funds Gopher
     manages








   One-time commissions

101,104


-


-


101,104

   Recurring service fees

140,316


163,262


-


303,578

   Performance-based income

-


5,610


-


5,610

Total revenues from funds
     Gopher manages

241,420


168,872


-


410,292

Total revenues

628,701


171,968


76,715


877,384

Less: VAT related surcharges 

(3,070)


(877)


(1,839)


(5,786)

Net revenues

625,631


171,091


74,876


871,598

Operating costs and expenses:








   Compensation and benefits








     Relationship managers

(175,851)


-


(47)


(175,898)

     Others

(162,491)


(72,697)


(26,416)


(261,604)

   Total compensation and
     benefits

(338,342)


(72,697)


(26,463)


(437,502)

   Selling expenses

(70,838)


(4,344)


(4,375)


(79,557)

   General and administrative
     expenses 









(63,236)


(13,778)


(7,189)


(84,203)

Other operating expenses

(32,179)


(2,575)


(16,309)


(51,063)

Government grants 

8,821


9,144


14,622


32,587

Total operating costs and
     expenses 









(495,774)


(84,250)


(39,714)


(619,738)

Income from operations

129,857


86,841


35,162


251,860

 

 

 

 

 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)

 

         Three months ended June 30, 2018


Wealth
Management

 Business


Asset
Management

Business


Lending and
Other
Businesses


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from others








One-time commissions

161,421


370


-


161,791

Recurring service fees

158,469


8,727


-


167,196

Performance-based income

10,082


-


-


10,082

Other service fees

27,613


2,735


46,535


76,883

Total revenues from others

357,585


11,832


46,535


415,952

Revenues from funds Gopher manages








One-time commissions

72,805


-


-


72,805

Recurring service fees

127,264


157,125


-


284,389

Performance-based income

1,739


27,474


-


29,213

Total revenues from funds Gopher
     manages 

201,808


184,599


-


386,407

Total revenues

559,393


196,431


46,535


802,359

Less: VAT related surcharges

(2,932)


(924)


(901)


(4,757)

Net revenues

556,461


195,507


45,634


797,602

Operating costs and expenses:








Compensation and benefits








Relationship managers

(167,533)


-


(896)


(168,429)

Others

(121,290)


(68,923)


(31,622)


(221,835)

Total compensation and benefits

(288,823)


(68,923)


(32,518)


(390,264)

Selling expenses

(110,686)


(5,361)


(4,425)


(120,472)

General and administrative expenses

(41,550)


(19,235)


(7,725)


(68,510)

Other operating expenses

(7,745)


(4,725)


(16,119)


(28,589)

Government grants

27,994


3,418


20


31,432

Total operating costs and expenses

(420,810)


(94,826)


(60,767)


(576,403)

Income (loss) from operations

135,651


100,681


(15,133)


221,199

 

 

Noah Holdings Limited

Supplement Revenue Information by Geography

(unaudited)



Three months ended June 30, 2019


Wealth 
Management
Business


Asset 
Management
Business


Lending 
and Other
Businesses


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Mainland China

420,540


145,992


76,715


643,247

Hong Kong

178,002


23,705


-


201,707

Others

30,159


2,271


-


32,430

Total revenues

628,701


171,968


76,715


877,384



Three months ended June 30, 2018


Wealth 
Management
Business


Asset 
Management
Business


Lending 
and Other
Businesses


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Mainland China

441,408


146,322


46,535


634,265

Hong Kong

117,985


50,109


-


168,094

Total revenues

559,393


196,431


46,535


802,359

 

 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results 

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

(unaudited)[6]



Three months ended 





June 30, 


June 30, 


Change 


2018


2019




RMB'000


RMB'000









Net income attributable to Noah shareholders

179,485


250,183


39.4%

Adjustment for share-based compensation

20,241


22,994


13.6%

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

(49,063)


10,755


N.A.

Add: gains from sales of equity securities (realized)

3,338


4,951


48.3%

Less: tax effect of adjustments

4,520


3,977


(12.0%)

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

247,607


263,376


6.4%







Net margin attributable to Noah shareholders

22.5%


28.7%



Non-GAAP net margin attributable to Noah shareholders

31.0%


30.2%



Net income attributable to Noah shareholders per ADS,
     diluted

3.00


4.04


34.7%

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

4.12


4.25


3.2%


[6] 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.



Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results 

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

(unaudited) 



Six months ended 


June 30, 


June 30, 


Change 


2018


2019




RMB'000


RMB'000









Net income attributable to Noah shareholders

447,950


534,760


19.4%

Adjustment for share-based compensation 

42,942


52,610


22.5%

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

(14,275)


19,517


N.A

Add: gains from sales of equity securities (realized)

3,338


9,836


194.7%

Less: tax effect of adjustments

6,803


9,691


42.5%

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

501,702


567,998


13.2%







Net margin attributable to Noah shareholders

27.5%


30.4%



Non-GAAP net margin attributable to Noah shareholders

30.8%


32.2%



Net income attributable to Noah shareholders per ADS,
     diluted

7.49


8.65


15.5%

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

8.37


9.18


9.7%

 

Cision View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-financial-results-for-the-second-quarter-of-2019-300908385.html

SOURCE Noah Holdings Limited

Eva Ma, Noah Holdings Limited, +86-21-8035-9221, ir@noahgroup.com


Search Investor Relations