Noah Holdings Limited Announces Unaudited Preliminary Financial Results for the Fourth Quarter And Full Year 2018

Mar 12, 2019

SHANGHAI, March 12, 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 preliminary[1] financial results for the fourth quarter of 2018 and the full year ended December 31, 2018.

FOURTH QUARTER 2018 FINANCIAL HIGHLIGHTS

  • Net revenues for the fourth quarter of 2018 were RMB822.1 million (US$119.6 million), a 13.8% increase from the corresponding period in 2017.

(RMB millions,

except percentages)

Q4 2017



Q4  2018



YoY Change

Wealth management

524.8



578.5



10.2%

Asset management

166.8



160.2



(3.9%)

Other financial services

30.5



83.4



173.1%

Total net revenues

722.1



822.1



13.8%

  • Income from operations for the fourth quarter of 2018 was RMB159.7 million (US$23.2 million), a 17.8% increase from the corresponding period in 2017.

(RMB millions,

except percentages)

Q4 2017



Q4 2018



YoY Change

Wealth management

79.7



118.4



48.6%

Asset management

76.9



41.3



(46.3%)

Other financial services

(20.9)



0.0



N.A.

Total income from operations

135.7



159.7



17.8%

  • Net income attributable to Noah shareholders for the fourth quarter of 2018 was RMB155.6 million (US$22.6 million), a 1.7% increase from the corresponding period in 2017.
  • Non-GAAP[2]net income attributable to Noah shareholders for the fourth quarter of 2018 was RMB223.2 million (US$32.5 million), a 29.2% increase from the corresponding period in 2017.

[1] As of the date of this press release, we are still in the process of reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager.  Any changes in the fair value of those investments could affect the income from equity in affiliates, net income, net income attributable to Noah shareholders, income per ADS and the balance of investments in affiliates in our consolidated financial statements. While not included in the unaudited preliminary fourth quarter 2018 financial results in this press release, we will include any such fair value adjustments in the audited consolidated financial statements in our 2018 Form 20-F and will make a subsequent announcement when our review concludes, as appropriate.

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

FULL YEAR 2018 FINANCIAL HIGHLIGHTS

  • Net revenues in the full year 2018 were RMB3,289.6 million (US$478.5 million), a 16.4% increase from the full year 2017.

(RMB millions,

except percentages)

FY 2017



FY  2018



YoY Change

Wealth management

2,126.3



2,306.0



8.5%

Asset management

588.0



748.5



27.3%

Other financial services

112.6



235.1



108.8%

Total net revenues

2,826.9



3,289.6



16.4%

  • Income from operations in the full year 2018 was RMB926.5 million (US$134.8 million), a 19.2% increase from the full year 2017.

(RMB millions,

except percentages)

FY 2017



FY 2018



YoY Change

Wealth management

580.9



607.2



4.5%

Asset management

302.9



353.2



16.6%

Other financial services

(106.8)



(33.9)



68.3%

Total income from operations

777.0



926.5



19.2%

  • Net income attributable to Noah shareholders in the full year 2018 was RMB811.3 million (US$118.0 million), a 6.3% increase from the full year 2017.
  • Non-GAAP net income attributable to Noah shareholders in the full year 2018 was RMB1,010.8 million (US$147.0 million), a 20.7% increase from the full year 2017.

FOURTH QUARTER AND FULL YEAR 2018 OPERATIONAL UPDATES

Wealth Management Business

The Company's wealth management business offers financial products and provides comprehensive financial services to high net worth clients. Noah primarily distributes onshore and offshore fixed income, private equity, secondary market equity and insurance products.

  • Total number of registered clients as of December 31, 2018 was 260,285, a 39.3% increase from December 31, 2017.
  • Total number of active clients[3]during the fourth quarter of 2018 was 4,717, a 24.8% decrease from the fourth quarter of 2017, due to lower transaction value, especially that of secondary market equity products. Total number of active clients during the full year 2018 was 13,628, a 7.1% increase from the full year 2017.
  • Aggregate value of financial products distributed during the fourth quarter of 2018 was RMB25.2 billion (US$3.7 billion), a 10.7% decrease from the fourth quarter of 2017.

[3] "Active clients" for our wealth management business refers to registered clients who purchased financial products provided or distributed by Noah during a given period.

 

Product type

Three months ended December 31,


2017

2018


(RMB in billions, except percentages)

Fixed income

15.3

54.5%

20.2

80.3%

Private equity

7.4

26.1%

3.0

11.9%

Secondary market equity

5.4

19.2%

1.5

5.7%

Other products

0.1

0.2%

0.5

2.1%

All products

28.2

100.0%

25.2

100.0%

  • Aggregate value of financial products distributed during the full year 2018 was RMB110.0 billion (US$16.0 billion), a 6.3% decrease from the full year 2017.

Product type

Twelve months ended December 31,


2017

2018


(RMB in billions, except percentages)

Fixed income

71.7

61.1%

75.5

68.6%

Private equity

34.3

29.2%

18.9

17.1%

Secondary market equity

10.8

9.2%

13.6

12.4%

Other products

0.6

0.5%

2.0

1.9%

All products

117.4

100.0%

110.0

100.0%

  • Average transaction value per active client[4] for the fourth quarter of 2018 was RMB5.3 million (US$0.8 million), an 18.8% increase from the corresponding period in 2017. Average transaction value per active client for the full year 2018 was RMB8.1 million (US$1.2 million), a 12.5% decrease from the full year 2017.
  • Coverage network included 313 service centers covering 83 cities as of December 31, 2018, up from 287 service centers covering 83 cities as of September 30, 2018, and 237 service centers covering 79 cities as of December 31, 2017.
  • Number of relationship managers was 1,583 as of December 31, 2018, a 1.5% increase from September 30, 2018 and an 18.6% increase from December 31, 2017.

Asset Management Business

The Company's asset management business, Gopher Asset Management Co., Ltd. ("Gopher Asset Management" or "Gopher"), is a leading alternative asset manager in China. Gopher Asset Management develops and manages private equity, real estate, secondary market equity, credit and other investments denominated in Renminbi and other currencies. 

  • Total assets under management as of December 31, 2018 were RMB169.2 billion (US$24.6 billion), a 3.1% increase from September 30, 2018 and a 14.1% increase from December 31, 2017.

[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.

 

Investment type

As of September
30, 2018

Asset
Growth

Asset
Expiration/
Redemption

As of December
31, 2018


(RMB billions, except percentages)

Private equity

96.9

59.0%

3.4

0.1

100.2

59.2%

Credit

40.3

24.6%

4.5

5.4

39.4

23.3%

Real estate

16.6

10.1%

0.5

0.4

16.7

9.9%

Secondary market equity[5]

4.9

3.0%

1.4

0.1

6.2

3.6%

Other investments

5.4

3.3%

1.3

-

6.7

4.0%

All Investments

164.1

100.0%

11.1

6.0

169.2

100.0%









 

Investment type

As of December
31, 2017

Asset
Growth

Asset
Expiration/
Redemption

As of December
31, 2018


(RMB billions, except percentages)

Private equity

86.9

58.6%

15.7

2.4

100.2

59.2%

Credit

40.0

27.0%

27.4

28.0

39.4

23.3%

Real estate

11.6

7.8%

11.8

6.7

16.7

9.9%

Secondary market equity

6.2

4.2%

3.7

3.7

6.2

3.6%

Other investments

3.6

2.5%

3.2

0.1

6.7

4.0%

All Investments

148.3

100.0%

61.8

40.9

169.2

100.0%









 

[5] The asset expiration/redemption of secondary market equity investments also includes market appreciation or depreciation.

Other Financial Services Business

The Company's other financial services business includes its lending services, online wealth management and payment technology services.

Ms. Jingbo Wang, Chairlady and CEO of Noah, said, "We are pleased with our 2018 full year results, and we have met the guidance we provided to the market. We have been upgrading our business model over the past few years, which we believe will make us less sensitive to economic cycles and be able to maintain sustainable growth in both revenues and net income."

FOURTH QUARTER 2018 FINANCIAL RESULTS

Net Revenues

Net revenues for the fourth quarter of 2018 were RMB822.1 million (US$119.6 million), a 13.8% increase from the corresponding period in 2017, primarily driven by increased recurring service fees and other service fees.

  • Wealth Management Business
  • - Net revenues from one-time commissions for the fourth quarter of 2018 were RMB240.9 million (US$35.0 million), which was substantially the same as the corresponding period in 2017.

    - Net revenues from recurring service fees for the fourth quarter of 2018 were RMB297.9 million (US$43.3 million), a 17.8% increase from the corresponding period in 2017. 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 fourth quarter of 2018 were RMB0.1 million (US$21.2 thousand), compared with RMB10.6 million in the corresponding period of 2017. The decrease was primarily due to less performance-based income generated from secondary market equity products. 

- Net revenues from other service fees for the fourth quarter of 2018 were RMB39.6 million (US$5.8 million), a 95.5% increase from the corresponding period in 2017, primarily due to the growth of value-added financial services within the wealth management segment, such as investor education and trust services.

  • Asset Management Business

- Net revenues from recurring service fees for the fourth quarter of 2018 were RMB147.9 million (US$21.5 million), a 5.0% increase from the corresponding period in 2017. The increase was primarily due to the increase in assets under management.

- Net revenues from performance-based income for the fourth quarter of 2018 were RMB10.8 million (US$1.6 million), compared with RMB19.1 million in the corresponding period of 2017, primarily due to a decrease in performance-based income from secondary market equity products.

  • Other Financial Service Business

 - Net revenues for the fourth quarter of 2018 were RMB83.4 million (US$12.1 million), a 173.1% increase from the corresponding period in 2017. The increase was primarily due to the growth of the Company's lending business.

Operating costs and expenses

Operating costs and expenses for the fourth quarter of 2018 were RMB662.4 million (US$96.3 million), a 12.9% increase from the corresponding period in 2017. Operating costs and expenses primarily consisted of compensation and benefits of RMB428.1 million (US$62.3 million), selling expenses of RMB104.8 million (US$15.2 million), general and administrative expenses of RMB94.9 million (US$13.8 million) and other operating expenses of RMB51.7 million (US$7.5 million).

  • Operating costs and expensesfor the wealth management business for the fourth quarter of 2018 were RMB460.1 million (US$66.9 million), a 3.4% increase from the corresponding period in 2017, primarily due to an increase in compensation and benefits and partially offset by a decrease in selling expense.
  • Operating costs and expensesfor the asset management business for the fourth quarter of 2018 were RMB118.9 million (US$17.3 million), a 32.2% increase from the corresponding period in 2017, primarily due to an increase in compensation and benefits as well as selling expenses for this business.
  • Operating costs and expensesfor the other financial services business for the fourth quarter of 2018 were RMB83.4 million (US$12.1 million), a 62.2% increase from the corresponding period in 2017 due to the expansion of the Company's lending business.

Operating Margin

Operating margin for the fourth quarter of 2018 was 19.4%, an increase from 18.8% for the corresponding period in 2017. The increase was mainly due to improved cost control.

  • Operating margin for the wealth management business for the fourth quarter of 2018 was 20.5%, compared with 15.2% for the corresponding period in 2017.
  • Operating marginfor the asset management business for the fourth quarter of 2018 was 25.8%, compared with 46.1% for the corresponding period in 2017.
  • Income from operationsfor the other financial services business for the fourth quarter of 2018 was break-even, improving from a loss of RMB20.9 million for the corresponding period in 2017.

Investment Income

Investment income for the fourth quarter of 2018 was RMB6.5 million (US$1.0 million), compared with RMB35.0 million in the corresponding period in 2017. The decrease was primarily due to changes in fair value of the Company's investments in equity securities. See "Discussion of Recently Adopted Accounting Standard and Non-GAAP Financial Measures" below for more details.  

Income Tax Expenses

Income tax expenses for the fourth quarter of 2018 were RMB29.2 million (US$4.2 million), a 16.8% decrease from the corresponding period in 2017. The decrease was primarily due to a lower effective tax rate. 

Income from Equity in Affiliates

Income from equity in affiliates for the fourth quarter of 2018 was RMB2.5 million (US$0.4 million), compared with RMB17.4 million in the corresponding period in 2017. We are still reviewing the financial results of the funds of funds we manage and invest in as the general partner. Any potential changes in fair value of those investments could affect the income from equity in affiliates.

Net Income

  • Net Income
  • - Net income for the fourth quarter of 2018 was RMB151.4 million (US$22.0 million), a 3.5% decrease from the corresponding period in 2017.

    - Net margin for the fourth quarter of 2018 was 18.4%, down from 21.7% for the corresponding period in 2017.

    - Net income attributable to Noah shareholders for the fourth quarter of 2018 was RMB155.6 million (US$22.6 million), a 1.7% increase from the corresponding period in 2017.

    - Net margin attributable to Noah shareholders for the fourth quarter of 2018 was 18.9%, down from 21.2% for the corresponding period in 2017.

- Net income attributable to Noah shareholders per basic and diluted ADS for the fourth quarter of 2018 was RMB2.61(US$0.38) and RMB2.54(US$0.37), respectively, down from RMB2.69 and RMB2.60 respectively, for the corresponding period in 2017.

  • Non-GAAP Net Income Attributable to Noah Shareholders
  • - Non-GAAP net income attributable to Noah shareholders for the fourth quarter of 2018 was RMB223.2 million (US$32.5 million), a 29.2% increase from the corresponding period in 2017.

    - Non-GAAP net marginattributable to Noah shareholders for the fourth quarter of 2018 was 27.1%, up from 23.9% for the corresponding period in 2017.

- Non-GAAP net income attributable to Noah shareholders per diluted ADS for the fourth quarter of 2018 was RMB3.64(US$0.53), up from RMB2.92 for the corresponding period in 2017.

FULL YEAR 2018 FINANCIAL RESULTS

Net Revenues

Net revenues for the full year 2018 were RMB3,289.6 million (US$478.5 million), a 16.4% increase from the full year 2017, primarily due to increases in recurring service fees and other service fees. 

  • Wealth Management Business
  • - Net revenues from one-time commissions for 2018 were RMB1,018.9 million (US$148.2 million), a 6.7% decrease from 2017, primarily due to a decline in the transaction value of financial products purchased by active clients.

    - Net revenues from recurring service fees for 2018 were RMB1,130.0 million (US$164.4 million), a 29.6% increase from 2017. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed by the Company.

    - Net revenues from performance-based income for 2018 were RMB44.1 million (US$6.4 million), a 52.3% decrease from 2017, primarily due to a decrease in performance-based income from private equity products.

- Net revenues from other service fees for 2018 were RMB113.0 million (US$16.4 million), representing a 61.6% increase from 2017, primarily due to the growth of value-added financial services within the wealth management segment.

  • Asset Management Business
  • - Net revenues from recurring service fees for 2018 were RMB637.8 million (US$92.8 million), a 20.9% increase from 2017. The increase was primarily due to the increase in assets under management by the Company.

- Net revenues from performance-based income for 2018 were RMB98.9 million (US$14.4 million), a 107.5% increase from the year 2017, primarily due to an increase in performance-based income from real estate and secondary market equity funds.

  • Other Financial Services Business

- Net revenues for the full year 2018 were RMB235.1 million (US$34.2 million), a 108.8% increase from 2017. The increase was primarily due to the growth of the Company's lending services business.

Operating costs and expenses

Operating costs and expenses for the full year 2018 were RMB2,363.1 million (US$343.7 million), a 15.3% increase from the full year 2017. Operating costs and expenses for the full year 2018 primarily consisted of compensation and benefits of RMB1,564.2 million (US$227.5 million), selling expenses of RMB412.7 million (US$60.0 million), general and administrative expenses of RMB279.4 million (US$40.6 million) and other operating expenses of RMB169.4 million (US$24.6 million).

  • Operating costs and expensesfor the wealth management business for 2018 were RMB1,698.8 million (US$247.1 million), a 9.9% increase from 2017, primarily due to an increase in compensation and benefits as well as selling expenses.
  • Operating costs and expensesfor the asset management business for 2018 were RMB395.3 million (US$57.5 million), a 38.6% increase from 2017, primarily due to an increase in compensation and benefits and a decrease in government subsidies.
  • Operating costs and expensesfor the other financial services business for 2018 were RMB268.9 million (US$39.1 million), a 22.6% increase from 2017 due to the expansion of the Company's lending business.

Operating Margin

Operating margin for the full year 2018 was 28.2%, compared to 27.5% for the full year 2017, mainly due to increased operating efficiency and reduced losses for the other financial services business.

  • Operating margin for the wealth management business for 2018 was 26.3%, compared to 27.3% for 2017.
  • Operating margin for the asset management business for 2018 was 47.2%, compared to 51.5% for 2017.
  • Operating loss for other financial services business for 2018 was RMB33.9 million (US$4.9 million), compared to a loss of RMB106.8 million for 2017.

Investment Income

Investment income for the full year 2018 was RMB48.6 million (US$7.0 million), a 27.8% decrease from the corresponding period in 2017. The decrease was primarily due to changes in fair value of equity securities. See "Discussion of Recently Adopted Accounting Standard and Non-GAAP Financial Measures" below for more details.

Income Tax Expenses

Income tax expenses for the full year 2018 were RMB222.3 million (US$32.3 million), an 11.7% increase from the full year 2017, primarily due to an increase in taxable income offset in part by a lower effective tax rate.

Net Income

  • Net Income
  • - Net income for the full year 2018 was RMB803.7 million (US$116.9 million), a 5.5% increase from the full year 2017.

    - Net margin for the full year 2018 was 24.4%, compared to 27.0% for the full year 2017.

    - Net income attributable to Noah shareholders for the full year 2018 was RMB811.3 million (US$118.0 million), a 6.3% increase from the full year 2017.

    - Net margin attributable to Noah shareholders for the full year 2018 was 24.7%, down from 27.0% for the corresponding period in 2017.

- Net income attributable to Noah shareholders per basic and diluted ADS for the full year 2018 was RMB13.85(US$2.01) and RMB13.33(US$1.94), respectively, as compared to RMB13.49 and RMB12.95, respectively, for the full year 2017.

  • Non-GAAP Net Income Attributable to Noah Shareholders
  • - Non-GAAP net income attributable to Noah shareholders for the full year 2018 was RMB1,010.8 million (US$147.0 million), a 20.7% increase from the full year 2017.

    - Non-GAAP net marginattributable to Noah shareholders for the full year 2018 was 30.7%, compared to 29.6% for the full year 2017.

- Non-GAAP net income attributable to Noah shareholders per diluted ADS for the full year 2018 was RMB16.58(US$2.41), compared to RMB14.18 for the full year 2017.

Balance Sheet and Cash Flow

As of December 31, 2018, the Company had RMB2,706.6 million (US$393.7 million) in cash and cash equivalents, compared with RMB2,360.1 million as of September 30, 2018 and RMB1,906.8 million as of December 31, 2017.

Net cash inflow from the Company's operating activities during the fourth quarter of 2018 was RMB511.3 million (US$74.4 million). Net cash inflow from the Company's operating activities during the full year 2018 was RMB1,029.4 million (US$149.7 million), compared to RMB628.4 million during the full year 2017, driven by profit earned from business operations and enhanced collection of factoring receivables.

Net cash outflow from the Company's investing activities during the fourth quarter of 2018 was RMB188.4 million (US$27.4 million). Net cash outflow from the Company's investing activities during the full year 2018 was RMB395.7 million (US$57.5 million), compared to RMB833.9 million during the full year 2017. In 2018, this primarily consisted of net cash outflow for purchasing various investments and properties and equipment in the amount of RMB544.8 million, partially offset by cash inflow from net of loan disbursement of RMB149.1 million.  

Net cash inflow from the Company's financing activities was RMB7.5 million (US$1.1 million) in the fourth quarter of 2018. Net cash inflow from the Company's financing activities during the full year 2018 was RMB109.8 million (US$16.0 million), compared to RMB791.8 million cash outflow during the full year 2017. The cash inflow for 2018 was mainly due to the proceeds related to share-based compensation and contribution of non-controlling interest.

Note to Financial Information

As of the date of this press release, we are still in the process of reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager.  Any changes in the fair value of those investments could affect the income from equity in affiliates, net income, net income attributable to Noah shareholders, income per ADS and the balance of investments in affiliates in our consolidated financial statements. While not included in the unaudited preliminary fourth quarter 2018 financial results in this press release, we will include any such fair value adjustments in the audited consolidated financial statements in our 2018 Form 20-F and will make a subsequent announcement when our review conclude, as appropriate.

OTHER COMPANY DEVELOPMENTS

The Company also announced today that Mr. Yi Zhao has been appointed as Group President, succeeding Mr. Kenny Lam who has decided to depart Noah for new professional pursuits.

Mr. Zhao has more than twenty years of experience in the financial industry. He has been leading Noah's wealth management business since 2013 and implemented a serious of core strategies, which led to robust growth in both transaction value and profitability for the segment. During his tenure as the head of our wealth management segment, he enhanced the management of our sales network and created an elite relationship managers program. Prior to joining Noah, Mr. Zhao worked for several insurance companies, including Ping An Insurance, AXA-Minmetals Assurance, and Great Wall Life Insurance. Mr. Zhao received his Bachelor's Degree from Shenyang Sports University.

Ms. Jingbo Wang, Chairlady and CEO of Noah, commented, "Mr. Zhao is an experienced veteran in the financial services industry and has worked with the Company for seven years. Under his leadership, our core wealth management business realized milestone achievements, which solidified our leading position in the industry. We are confident that in his new role he will continue to deliver meaningful impact and further strengthen Noah's competitive advantages. Meanwhile, we want to extend our warm appreciation to Kenny for his services during the last four years in planning and promoting key strategic initiatives 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 RMB1.13 billion to RMB1.18 billion, an increase of 11.9% to 16.8% compared with the full year 2018. This estimate reflects management's current business outlook and is subject to change.

CONFERENCE CALL

Senior management will host a combined English and Chinese language conference call to discuss the Company's fourth quarter and full year 2018 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details

Date/Time:

 

Tuesday, March 12, 2019 at 8:00 p.m., U.S. Eastern Time

Wednesday, March 13, 2019 at 8:00 a.m., Hong Kong Time

Dial in details:


- United States Toll Free

+1-888-317-6003

- Mainland China Toll Free

4001-206-115

- Hong Kong Toll Free

800-963-976

- International

+1-412-317-6061

Conference Title:

Noah Holdings Fourth Quarter and Full Year 2018 Earnings Call

Participant Entry No.:

1611659

Participants will need to dial in 10-15 minutes early and use this Entry Number in order to join the conference.

A telephone replay will be available starting one hour after the end of the conference call until March 19, 2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10129228.

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         

On January 1, 2018, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income.

The accounting standard also includes a transition requirement on presentation that requires the amounts reported in accumulated other comprehensive income for equity securities that exist as of the date of adoption previously classified as available-for-sale to be reclassified to retained earnings.

As a result, upon adoption of this new standard, Noah recorded a cumulative effect adjustment from other comprehensive income to retained earnings of RMB251.6 million (US$38.7 million), net of tax, for the unrealized gains related to equity securities previously classified as available-for-sale securities. This adjustment had no overall impact on shareholders' equity; however, since these net unrealized gains are now included within retained earnings, they will not appear as realized gains on Noah's consolidated income statement when sold.

The future impact to Noah's consolidated income statement from period to period will vary depending upon the level of volatility in the performance of the securities held in Noah's equity portfolio and the overall market. ASU 2016-01 does not affect the treatment of equity investments accounted for under the equity method or those that result in consolidation of the investee.

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 and fair value changes of equity investments (unrealized) and adjusting for sale of equity securities, after including any current and deferred income tax expense impact of those adjustments. 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 global investment and asset allocation services for high net worth individuals and enterprises. In the full year 2018, Noah distributed RMB110.0 billion (US$16.0 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB169.2 billion (US$24.6 billion) as of December 31, 2018.

Noah's wealth management business primarily distributes onshore and offshore fixed income, private equity, secondary market equity and insurance products. Noah delivers customized financial solutions to clients through a network of 1,583 relationship managers across 313 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 260,285 registered clients as of December 31, 2018. As a leading alternative asset manager in China, Gopher Asset Management manages private equity, real estate, secondary market equity, credit and other investments denominated in Renminbi and other currencies. The Company also provides other financial services, including lending services, online wealth management 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 fourth quarter of 2018 and the full year ended December 31, 2018 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 RMB6.8755 to US$1.00, the effective noon buying rate for December 31, 2018 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 and manages; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industry; 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 industry 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





September 30,

2018


December 31,

2018


December 31,

2018





RMB'000


RMB'000


USD'000

Assets








Current assets:









Cash and cash equivalents


2,360,111


2,704,091


393,294



Restricted cash


-


2,500


364



Short-term investments (including short-term
  investments measured at fair value of
  RMB162,153 thousands and RMB438,077
  thousands, as of September 30, 2018 and
  December 31, 2018, respectively)


213,153


 

 

 

450,477


 

 

 

65,519



Accounts receivable and contract assets, net of
allowance for doubtful accounts of nil as of
September 30, 2018 and December 31, 2018


255,051


 

 

282,431


 

 

41,078



Loans receivable, net


688,890


620,219


90,207



Amounts due from related parties


625,948


572,201


83,223



Loans receivable from factoring business


23,943


18,893


2,748



Other current assets


455,958


453,269


65,925



Total current assets


4,623,054


5,104,081


742,358











Long-term investments (including long-term
  investments measured at fair value of RMB860,828 
  thousands and RMB609,151 thousands, as of
  September 30, 2018 and December 31, 2018,
  respectively)


 

 

 

895,328


1,025,065


149,090


Investment in affiliates


1,314,862


1,375,110


200,001


Property and equipment, net


295,785


346,653


50,419


Non-current deferred tax assets


97,205


113,384


16,491


Other non-current assets


23,093


49,971


7,266

Total Assets


7,249,327


8,014,264


1,165,625










Liabilities and Equity








Current liabilities:









Accrued payroll and welfare expenses


565,346


671,200


97,622



Income tax payable


67,170


54,296


7,897



Amounts due to related parties


1,691


-


-



Deferred revenues


172,171


142,925


20,788



Other current liabilities


420,508


722,652


105,105



Total current liabilities


1,226,886


1,591,073


231,412


Non-current deferred tax liabilities


51,256


67,092


9,758


Convertible notes


228,121


145,004


21,090


Other non-current liabilities


75,824


35,718


5,195


Total Liabilities


1,582,087


1,838,887


267,455


Equity


5,667,240


6,175,377


898,170


Total Liabilities and Equity


7,249,327


8,014,264


1,165,625

 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)





Three months ended 




December 31,


December 31,


December 31,


Change


2017


2018


2018



Revenues:

RMB'000


RMB'000


USD'000



Revenues from others[1]:








   One-time commissions

130,462


173,814


25,280


33.2%

   Recurring service fees

170,738


142,435


20,716


(16.6%)

 Performance-based income

9,006


147


21


(98.4%)

Other service fees

57,023


126,212


18,357


121.3%

Total revenues from others 

367,229


442,608


64,374


20.5%

Revenues from funds Gopher manages[1]:








   One-time commissions

113,572


69,098


10,050


(39.2%)

   Recurring service fees

225,674


305,937


44,497


35.6%

   Performance-based income

20,833


10,861


1,580


(47.9%)

Total revenues from funds Gopher manages

360,079


385,896


56,127


7.2%

Total revenues

727,308


828,504


120,501


13.9%

   Less: business taxes and related surcharges

(5,194)


(6,401)


(931)


 

23.2%

Net revenues

722,114


822,103


119,570


13.8%

Operating costs and expenses:








  Compensation and benefits








    Relationship manager compensation

(167,363)


(162,638)


(23,655)


(2.8%)

Performance fee compensation

(11,291)


(3,800)


(553)


(66.3%)

    Other compensations

(200,982)


(261,677)


(38,059)


30.2%

Total compensation and benefits

(379,636)


(428,115)


(62,267)


12.8%

   Selling expenses

(111,516)


(104,765)


(15,237)


(6.1%)

   General and administrative expenses

(79,271)


(94,938)


(13,808)


19.8%

   Other operating expenses

(41,274)


(51,710)


(7,521)


25.3%

   Government subsidies

25,199


17,145


2,494


(32.0%)

Total operating costs and expenses

(586,498)


(662,383)


(96,339)


12.9%

Income from operations

135,616


159,720


23,231


17.8%

Other income:








   Interest income

12,910


14,104


2,051


9.2%

   Interest expense

(9,593)


(1,002)


(146)


(89.6%)

   Investment income (loss), net

34,983


6,547


952


(81.3%)

   Other income (expense)  

640


(1,326)


(193)


(307.2%)

Total other income

38,940


18,323


2,664


(52.9%)

Income before taxes and income from
equity in affiliates

174,556


178,043


25,895


2.0%

Income tax expense

(35,081)


(29,203)


(4,247)


(16.8%)

Income from equity in affiliates

17,390


2,526


367


(85.5%)

Net income

156,865


151,366


22,015


(3.5%)

Less: net loss attributable to non-
controlling Interests

(2,339)


 

(4,273)


 

(621)


 

82.7%

Less: effect on retained earnings caused
by termination of redeemable non-
controlling interest of a subsidiary

6,201


-


-


N.A

Net income attributable to Noah
shareholders

153,003


155,639


 

22,636


 

1.7%









Income per ADS, basic

2.69


2.61


0.38


(3.0%)

Income per ADS, diluted

2.60


2.54


0.37


(2.3%)

Margin analysis:








Operating margin

18.8%


19.4%


19.4%



Net margin

21.7%


18.4%


18.4%



Weighted average ADS equivalent[2]:








Basic

56,782,875


59,676,698


59,676,698



Diluted

61,147,734


61,590,911


61,590,911



ADS equivalent outstanding at end of
period

56,902,300


60,129,547


60,129,547






 

[1] Starting from the first quarter of 2018, we report revenue streams in two categories—revenues from funds Gopher manages
and revenues from others, instead of the previous categories—third-party revenues and related party revenues, to provide
more relevant and accurate information. We also revised the comparative period presentation to conform to current period
classification.

 

[2] 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)





Twelve months ended




December 31,


December 31,


December 31,


Change


2017


2018


2018



Revenues:

RMB'000


RMB'000


USD'000



Revenues from others[1]:








   One-time commissions

541,025


733,009


106,612


35.5%

   Recurring service fees

605,092


593,856


86,373


(1.9%)

 Performance-based income

86,494


43,101


6,269


(50.2%)

Other service fees

195,073


361,886


52,634


85.5%

Total revenues from others

1,427,684


1,731,852


251,888


21.3%

Revenues from funds Gopher manages[1]:








   One-time commissions

561,059


294,984


42,904


(47.4%)

   Recurring service fees

802,761


1,182,693


172,016


47.3%

   Performance-based income

54,502


100,533


14,622


84.5%

Total revenues from funds Gopher manages

1,418,322


1,578,210


229,542


11.3%

Total revenues

2,846,006


3,310,062


481,430


16.3%

   Less: business taxes and related surcharges

(19,098)


(20,454)


(2,975)


7.1%

Net revenues

2,826,908


3,289,608


478,455


16.4%

Operating costs and expenses:








  Compensation and benefits








    Relationship manager compensation

(616,064)


(633,599)


(92,153)


2.8%

Performance fee compensation

(11,291)


(21,175)


(3,080)


87.5%

    Other compensations

(780,017)


(909,418)


(132,269)


16.6%

Total compensation and benefits

(1,407,372)


(1,564,192)


(227,502)


11.1%

   Selling expenses

(320,462)


(412,720)


(60,028)


28.8%

   General and administrative expenses

(248,878)


(279,387)


(40,635)


12.3%

   Other operating expenses

(147,318)


(169,368)


(24,634)


15.0%

   Government subsidies

74,156


62,583


9,102


(15.6%)

Total operating costs and expenses

(2,049,874)


(2,363,084)


(343,697)


15.3%

Income from operations

777,034


926,524


134,758


19.2%

Other income:








   Interest income

45,020


69,841


10,158


55.1%

   Interest expense

(24,128)


(10,028)


(1,459)


(58.4%)

   Investment income (loss), net

67,343


48,616


7,070


(27.8%)

   Other income (expense)

3,542


(23,356)


(3,397)


(759.4%)

Total other income

91,777


85,073


12,372


(7.3%)

Income before taxes and income from
equity in affiliates

868,811


1,011,597


147,130


16.4%

Income tax expense

(199,085)


(222,320)


(32,335)


11.7%

Income from equity in affiliates

92,136


14,469


2,104


(84.3%)

Net income

761,862


803,746


116,899


5.5%

Less: net loss attributable to non-
controlling Interests

Less: income attributable to redeemable
non-controlling interest of Subsidiary

 

                 (13,745)

 

6,483


 

                (7,551)

 


 

(1,098)

 

-


 

(45.1%)

 

N.A

Less: effect on retained earnings caused
by termination of redeemable non-
controlling interest of a subsidiary

6,201


-


-


N.A

Net income attributable to Noah
shareholders

 

762,923


 

811,297


 

117,997


 

6.3%









Income per ADS, basic

13.49


13.85


2.01


2.7%

Income per ADS, diluted

12.95


13.33


1.94


2.9%

Margin analysis:








Operating margin

27.5%


28.2%


28.2%



Net margin

27.0%


24.4%


24.4%



Weighted average ADS equivalent[2]:








Basic

56,551,274


58,576,802


58,576,802



Diluted

60,467,645


61,421,080


61,421,080



ADS equivalent outstanding at end of
period

 

56,902,300


 

60,129,547


 

60,129,547






 

[1] Starting from the first quarter of 2018, we report revenue streams in two categories—revenues from funds Gopher manages
and revenues from others, instead of the previous categories—third-party revenues and related party revenues, to provide
more relevant and accurate information. We also revised the comparative period presentation to conform to current period
classification.

 

[2] 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




December 31,


December 31,


December 31,


Change


2017


2018


2018




RMB'000


RMB'000


USD'000



Net income

156,865


151,366


22,015


(3.5%)

Other comprehensive income, net of tax:








    Change in foreign currency translation
adjustments

(13,047)


7,357


1,070


(156.4%)

    Fair value fluctuation of available-for-s
ale Investment, net of tax of nil

 

243,655


 

(47)


 

(7)


 

(100.0%)

Comprehensive income

387,473


158,676


23,078


(59.0%)

Less: Comprehensive loss attributable to
non-controlling interests

(2,342)


(4,260)


(620)


81.9%

Less: effect on retained earnings caused
by termination of redeemable non-
controlling interest of a subsidiary

 

6,201


 

-


 

-


 

N.A

Comprehensive income attributable to
Noah shareholders

383,614


162,936


23,698


(57.5%)

 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)





 Twelve months ended




December 31,


December 31,


December 31,


Change


2017


2018


2018




RMB'000


RMB'000


USD'000



Net income

761,862


803,746


116,899


5.5%

Other comprehensive income, net of tax:








     Change in foreign currency translation
adjustments

(33,876)


75,752


11,018


(323.6%)

     Fair value fluctuation of available-for-
sale investment, net of tax of nil

252,706


(1,429)


(208)


(100.6%)

Comprehensive income

980,692


878,069


127,709


(10.5%)

Less: Comprehensive loss attributable to
non-controlling interests

(13,776)


(7,638)


(1,111)


(44.6%)

Less: Loss attributable to redeemable non-
controlling interest of Subsidiary

6,483


-


-


N.A

Less: effect on retained earnings caused
by termination of redeemable non-c
ontrolling interest of a subsidiary

 

6,201


 

-


 

-


 

N.A

Comprehensive income attributable to
Noah shareholders

981,784


885,707


128,820


(9.8%)

 

Noah Holdings Limited

Supplemental Information

(unaudited)



 As of 


 Change


December 31,
2017


December 31,
2018








 Number of registered clients

186,918


260,285


39.3%

 Number of relationship managers

1,335


1,583


18.6%

 Number of cities under coverage

79


83


5.1%














 Three months ended


Change


December 31,
2017


December 31,
2018



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

 Number of active clients

6,276


4,717


(24.8%)

 Transaction value:






        Fixed income products

15,367


20,224


31.6%

        Private equity products

7,360


2,999


(59.3%)

        Secondary market equity products

5,412


1,426


(73.6%)

        Other products

48


521


981.4%

 Total transaction value

28,188


25,170


(10.7%)

 Average transaction value per client

4.49


5.34


18.8%

 


 Twelve months ended


 Change


December 31,
2017


December 31,
2018



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

 Number of active clients

12,720


13,628


7.1%

 Transaction value:






        Fixed income products

71,759


75,498


5.2%

        Private equity products

34,261


18,864


(44.9%)

        Secondary market equity products

10,754


13,605


26.5%

        Other products

598


2,062


245.0%

 Total transaction value

117,371


110,030


(6.3%)

 Average transaction value per client

9.23


8.07


(12.5%)

 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)


                                                                        Three months ended December 31, 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

173,415


399


-


173,814

Recurring service fees

139,996


2,439


-


142,435

Performance-based income

147


-


-


147

Other service fees

39,831


1,028


85,353


126,212

Total revenues from others

353,389


3,866


85,353


442,608

Revenues from funds Gopher
manages:








One-time commissions

69,018


80


-


69,098

Recurring service fees

159,812


146,125


-


305,937

Performance-based income

-


10,861


-


10,861

Total revenues from funds Gopher
manages

228,830


157,066


-


385,896

Total revenues

582,219


160,932


85,353


828,504

Less: business taxes and related
   surcharges

(3,751)


(730)


(1,920)


(6,401)

Net revenues

578,468


160,202


83,433


822,103

Operating costs and expenses:








Compensation and benefits








Relationship manager
   compensation

(162,215)


-


(423)


(162,638)

Performance fee compensation

-


(3,800)


-


(3,800)

Other compensation

(152,045)


(80,332)


(29,300)


(261,677)

Total compensation and benefits

(314,260)


(84,132)


(29,723)


(428,115)

Selling expenses

(91,429)


(7,278)


(6,058)


(104,765)

General and administrative expenses

(52,444)


(27,838)


(14,656)


(94,938)

    Other operating expenses

(15,241)


(1,722)


(34,747)


(51,710)

Government subsidies

13,300


2,090


1,755


17,145

Total operating costs and expenses

(460,074)


(118,880)


(83,429)


(662,383)

Income from operations

118,394


41,322


4


159,720


 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)


         Three months ended December 31, 2017


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

130,190


272


-


130,462

Recurring service fees

165,156


5,582


-


170,738

Performance-based income

8,854


152


-


9,006

Other service fees

20,397


5,643


30,983


57,023

Total revenues from others

324,597


11,649


30,983


367,229

Revenues from funds Gopher
manages:








One-time commissions

112,656


916


-


113,572

Recurring service fees

89,647


136,027


-


225,674

Performance-based income

1,826


19,007


-


20,833

Total revenues from funds Gopher
manages

204,129


155,950


-


360,079

Total revenues

528,726


167,599


30,983


727,308

Less: business taxes and related
   surcharges

(3,911)


(840)


(443)


(5,194)

Net revenues

524,815


166,759


30,540


722,114

Operating costs and expenses:








Compensation and benefits








Relationship manager
   compensation

(166,699)


-


(664)


(167,363)

Performance Fee Compensation

-


(11,291)


-


(11,291)

Other compensation

(117,186)


(53,406)


(30,390)


(200,982)

Total compensation and benefits

(283,885)


(64,697)


(31,054)


(379,636)

Selling expenses

(104,538)


(1,965)


(5,013)


(111,516)

General and administrative expenses

(54,695)


(22,379)


(2,197)


(79,271)

Other operating expenses

(22,800)


(3,992)


(14,482)


(41,274)

Government subsidies

20,768


3,131


1,300


25,199

Total operating costs and expenses

(445,150)


(89,902)


(51,446)


(586,498)

Income (loss) from operations

79,665


76,857


(20,906)


135,616















 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)


                                                                        Twelve months ended December 31, 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

731,424


1,585


-


733,009

Recurring service fees

571,782


22,074


-


593,856

Performance-based income

42,570


531


-


43,101

Other service fees

113,570


8,225


240,091


361,886

Total revenues from others

1,459,346


32,415


240,091


1,731,852

Revenues from funds Gopher
manages:








One-time commissions

292,899


2,085


-


294,984

Recurring service fees

564,228


618,465


-


1,182,693

Performance-based income

1,739


98,794


-


100,533

Total revenues from funds Gopher
manages

858,866


719,344


-


1,578,210

Total revenues

2,318,212


751,759


240,091


3,310,062

Less: business taxes and related
   surcharges

(12,206)


(3,228)


(5,020)


(20,454)

Net revenues

2,306,006


748,531


235,071


3,289,608

Operating costs and expenses:








Compensation and benefits








Relationship manager 
   compensation

(631,234)


 

-


 

(2,365)


(633,599)

Performance Fee Compensation

-


(21,175)


-


(21,175)

Other compensation

(534,516)


(251,923)


(122,979)


(909,418)

Total compensation and benefits

(1,165,750)


(273,098)


(125,344)


(1,564,192)

Selling expenses

(367,589)


(22,200)


(22,931)


(412,720)

General and administrative expenses

(164,802)


(80,873)


(33,712)


(279,387)

    Other operating expenses

(54,291)


(25,310)


(89,767)


(169,368)

Government subsidies

53,620


6,148


2,815


62,583

Total operating costs and expenses

(1,698,812)


(395,333)


(268,939)


(2,363,084)

Income (loss) from operations

607,194


353,198


(33,868)


926,524


 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)


         Twelve months ended December 31, 2017


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

539,938


1,087


-


541,025

Recurring service fees

577,544


27,548


-


605,092

Performance-based income

84,105


2,389


-


86,494

Other service fees

70,390


10,712


113,971


195,073

Total revenues from others

1,271,977


41,736


113,971


1,427,684

Revenues from funds Gopher
manages:








One-time commissions

560,047


1,012


-


561,059

Recurring service fees

300,352


502,409


-


802,761

Performance-based income

9,019


45,483


-


54,502

Total revenues from funds Gopher
manages

869,418


548,904


-


1,418,322

Total revenues

2,141,395


590,640


113,971


2,846,006

Less: business taxes and related
   surcharges

(15,128)


(2,599)


(1,371)


(19,098)

Net revenues

2,126,267


588,041


112,600


2,826,908

Operating costs and expenses:








Compensation and benefits








Relationship manager
   compensation

(611,550)


 

(4)


 

(4,510)


(616,064)

Performance Fee Compensation

-


(11,291)


-


(11,291)

Other compensation

(463,370)


(190,032)


(126,615)


(780,017)

Total compensation and benefits

(1,074,920)


(201,327)


(131,125)


(1,407,372)

Selling expenses

(295,798)


(9,271)


(15,393)


(320,462)

General and administrative expenses

(146,122)


(70,618)


(32,138)


(248,878)

Other operating expenses

(77,490)


(27,773)


(42,055)


(147,318)

Government subsidies

49,008


23,848


1,300


74,156

Total operating costs and expenses

(1,545,322)


(285,141)


(219,411)


(2,049,874)

Income (loss) from operations

580,945


302,900


(106,811)


777,034

 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited[6] 



                                      Three months ended


 December 31,


December 31,


 Change

 


2017


2018



RMB'000


RMB'000









Net income attributable to Noah
shareholders

153,003


155,639


1.7%

Adjustment for share-based
compensation related to:






           Share options

10,796


12,862


19.1%

           Restricted shares

13,625


21,312


56.4%

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

-


(4,596)


N.A

Add: Gains from sales of equity
securities   

-


12,011


N.A

Less: Tax effect of adjustments[7]     

4,739


(16,730)


N.A

Non-GAAP net income
attributable to Noah shareholders

172,685


223,150


29.2%







Net margin attributable to Noah
shareholders

21.2%


18.9%



Non-GAAP net margin
attributable to Noah shareholders

23.9%


27.1%



 

Net income attributable to Noah
shareholders per ADS, diluted

2.60


2.54


(2.3%)

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

2.92


3.64


24.7%














 

[6] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity securities (unrealized) and adjusting for sale of equity securities, after including any income tax effect

[7] Starting from the fourth quarter of 2018, we include current and deferred income tax expense impact of all non-GAAP adjustments to arrive at a non-GAAP measure. We also revised the comparative period presentation to conform to current period measurement. 

 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)



                                      Twelve months ended


 December 31,


December 31,


 Change

 


2017


2018



RMB'000


RMB'000









Net income attributable to
Noah shareholders

762,923


811,297


6.3%

Adjustment for share-based
compensation related to:






           Share options

51,054


45,973


(10.0%)

Restricted shares

42,581


66,790


56.9%

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

-


(39,557)


N.A

Add: Gains from sales
of equity securities   

-


45,240


N.A

Less: Tax effect of a
djustments   

19,185


1,966


(110.2%)

Non-GAAP net income
attributable to Noah
shareholders

837,373


1,010,823


20.7%







Net margin attributable to
Noah shareholders

27.0%


24.7%



Non-GAAP net margin a
ttributable to Noah
shareholders

29.6%


30.7%



 

Net income attributable to
Noah shareholders per ADS,
diluted

12.95


13.33


2.9%

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

14.18


16.58


16.9%














 

Cision View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-preliminary-financial-results-for-the-fourth-quarter-and-full-year-2018-300810977.html

SOURCE Noah Holdings Limited

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


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