Noah Holdings Limited Announces 2011 Fourth Quarter and Full Year 2011 Financial Results and Declares Cash Dividend
FOURTH QUARTER 2011 FINANCIAL HIGHLIGHTS
-
Net revenues in the fourth quarter of 2011 were
US$14.4 million , essentially flat compared with the corresponding period in 2010. -
Income from operations in the fourth quarter of 2011 was
US$2.1 million , a 65.6% decrease from the corresponding period in 2010. -
Net income attributable to Noah shareholders in the fourth
quarter of 2011 was
US$3.5 million , a 16.8% decrease from the corresponding period in 2010. Non-GAAP1 net income attributable to Noah shareholders in the fourth quarter of 2011 wasUS$4.3 million , a 9.0% decrease from the corresponding period in 2010. -
Net income per basic and diluted ADS in the fourth quarter of
2011 were both
US$0.06 . Non-GAAP net income per diluted ADS in the fourth quarter of 2011 wasUS$0.07 .
FULL YEAR 2011 FINANCIAL HIGHLIGHTS
-
Net revenues in the full year 2011 were
US$72.2 million , a 90.6% increase from 2010. -
Income from operations in the full year 2011 was
US$25.1 million , a 60.0% increase from 2010. -
Net income attributable to Noah shareholders in the full year
2011 was
US$24.0 million , a 107.9% increase from 2010. Non-GAAP net income attributable to Noah shareholders in the full year 2011 wasUS$26.1 million , a 95.0% increase from 2010. -
Net income per basic and diluted ADS in the full year 2011 were
US$0.43 andUS$0.42 , respectively. Non-GAAP net income per diluted ADS in the full year 2011 wasUS$0.46 .
FOURTH QUARTER 2011 AND FULL YEAR 2011 OPERATIONAL HIGHLIGHTS
-
Total number of registered clients as of
December 31, 2011 increased by 66.6% year-over-year to 27,144; this figure includes 26,340 registered individual clients, 745 registered enterprise clients and 59 wholesale clients that have entered into cooperation agreements with the Company. -
Active clients2 during the fourth
quarter of 2011 were 937, a 50.9% increase from the corresponding
period in 2010. The aggregate value of wealth management products
distributed by the Company during the fourth quarter of 2011 was
RMB4.3 billion (approximatelyUS$0.7 billion )3, a 2.7% decrease from the corresponding period in 2010. Of this aggregate value, fixed income products accounted for 65.2%, private equity fund products accounted for 34.2%, and securities investment funds and investment-linked insurance products accounted for 0.6%. The average transaction value per client4 in the fourth quarter of 2011 wasRMB4.6 million (approximatelyUS$0.7 million ), a 35.5% decrease from the corresponding period in 2010, primarily due to changes in product mix as clients purchased more fixed income products that have lower minimum investment amount than private equity fund products. -
Coverage network as of
December 31, 2011 included 59 branches, up from 39 branches as ofDecember 31, 2010 . The number of relationship managers increased to 510 as ofDecember 31, 2011 , up 49.6% year-over-year. -
Active clients for the full year 2011 were 3,095, an 89.8%
increase from 2010. The aggregate value of wealth management
products distributed by the Company for the full year 2011 was
RMB22.6 billion (approximatelyUS$3.5 billion ), a 56.7% increase from 2010. Of this aggregate value, fixed income products accounted for 42.7%, private equity fund products accounted for 48.0%, and securities investment funds and investment-linked insurance products accounted for 9.3%. The average transaction value per client for the full year 2011 wasRMB7.3 million (approximatelyUS$1.1 million ), a 17.4% decrease from 2010, primarily due to changes in product mix as clients purchased lesser private equity fund products that have higher minimum investment amount than fixed income products, securities investment funds and investment-linked insurance products.
Ms.
Mr.
FOURTH QUARTER 2011 AND FULL YEAR 2011 FINANCIAL RESULTS
Net Revenues
Net revenues for the fourth quarter of 2011 were
Net revenues from one-time commissions for the fourth quarter of
2011 were
Net revenues from recurring service fees for the fourth quarter
of 2011 were
Net revenues for the full year 2011 were
Net revenues from one-time commissions for the full year 2011
were
Net revenues from recurring service fees for the full year 2011
were
Operating Margin
Operating margin for the fourth quarter of 2011 was 14.5%, as compared to 43.4% for the corresponding period in 2010. Operating margin for the full year 2011 was 34.8%, as compared to 41.4% for 2010. The year-over-year operating margin decreases for the fourth quarter of 2011 and the full year 2011 were primarily due to an increase in operating cost and expenses resulting from the Company’s expansions outpacing its net revenue growth.
Operating cost and expenses for the fourth quarter of 2011,
including cost of revenues, selling expenses, G&A expenses and other
operating income, were
Cost of revenues for the fourth quarter of 2011 totaled
Selling expenses for the fourth quarter of 2011 were
G&A expenses for the fourth quarter of 2011 were
Income Tax Expenses
Income tax expenses for the fourth quarter of 2011 were
Income tax expenses for the full year 2011 were
Net Income
Net income attributable to Noah shareholders for the fourth
quarter of 2011 was
Non-GAAP net income attributable to Noah shareholders for the
fourth quarter of 2011 was
Balance Sheet and Cash Flow
As of
DECLARATION OF CASH DIVIDEND
Noah also announced today that its Board of Directors (the "Board") has
authorized and approved the Company’s payment of an annual cash dividend
of
2012 FORECAST
The Company estimates that non-GAAP net income attributable to Noah
shareholders for the full year 2012 is expected to be in a range of
CONFERENCE CALL
Senior management will host a conference call on
Toll Free | Toll | ||||
-- United States |
+1-866-519-4004 |
+1-718-354-1231 |
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-- China |
|||||
-- Domestic |
800-819-0121 | ||||
-- Domestic Mobile |
400-620-8038 | ||||
-- Hong Kong |
800-93-0346 | ||||
-- United Kingdom |
080-8234-6646 | ||||
Conference ID # | 48230782 |
A telephone replay will be available shortly after the call until
A live webcast of the conference call and replay will be available in the investor relations section of the Company’s website at http://ir.noahwm.com.
DISCUSSION OF NON-GAAP FINANCIAL MEASURES:
In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.
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 measure 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 non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income, non-GAAP income per diluted ADS and non-GAAP net margin provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options in the periods presented. To make financial results comparable period by period, the Company utilized the non-GAAP financial results to better understand its historical business operations.
ABOUT
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
the full year 2012 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
Noah Holdings Limited | ||||||
Condensed Consolidated Balance Sheets | ||||||
(In U.S. dollars) | ||||||
(unaudited) | ||||||
As of | ||||||
September 30, |
December 31, |
|||||
$ | $ | |||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | 137,503,856 | 136,859,336 | ||||
Restricted cash | 78,394 | 79,442 | ||||
Fixed-term deposits | 3,135,779 | - | ||||
Short-term investments | 12,397,950 | 20,714,145 | ||||
Accounts receivable, net of allowance for doubtful accounts of nil at September 30, 2011 and December 31, 2011 | 11,323,319 | 6,233,227 | ||||
Deferred tax assets | 1,279,482 | 3,030,342 | ||||
Amounts due from related parties | 119,697 | 1,734,405 | ||||
Other current assets | 2,536,084 | 2,192,988 | ||||
Total current assets | 168,374,561 | 170,843,885 | ||||
Long-term investments | 1,864,711 | 1,892,308 | ||||
Investment in affiliates | 2,244,440 | 2,434,689 | ||||
Property and equipment, net | 3,309,284 | 4,436,936 | ||||
Non-current deferred tax assets | 453,307 | 537,988 | ||||
Other non-current assets | 902,566 | 928,496 | ||||
Total Assets | 177,148,869 | 181,074,302 | ||||
Liabilities and Equity | ||||||
Current liabilities: | ||||||
Accrued payroll and welfare expenses | 8,244,654 | 9,477,432 | ||||
Income tax payable | 1,682,800 | 1,932,895 | ||||
Deferred tax liabilities | 33,419 | 131,943 | ||||
Other current liabilities | 8,586,880 | 5,062,950 | ||||
Uncertain tax position liabilities | 318,127 | 322,378 | ||||
Total current liabilities | 18,865,880 | 16,927,598 | ||||
Non-current uncertain tax position liabilities | 1,216,393 | 1,272,219 | ||||
Other non-current liabilities | 1,406,698 | 1,854,762 | ||||
Total Liabilities | 21,488,971 | 20,054,579 | ||||
Equity | 155,659,898 | 161,019,723 | ||||
Total Liabilities and Equity | 177,148,869 | 181,074,302 | ||||
Noah Holdings Limited | ||||||||
Condensed Consolidated Income Statements | ||||||||
(In U.S. dollars, except for ADS data, per ADS data and percentages) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
December 31, | December 31, | Change | ||||||
2010 | 2011 | |||||||
Revenues: | $ | $ | ||||||
Third-party revenues | 9,906,411 | 10,261,158 | 3.6% | |||||
Related party revenues | 4,887,691 | 5,017,108 | 2.6% | |||||
Total revenues | 14,794,102 | 15,278,266 | 3.3% | |||||
Less: business taxes and related surcharges | (790,010) | (831,955) | 5.3% | |||||
Net revenues | 14,004,092 | 14,446,311 | 3.2% | |||||
Operating cost and expenses: | ||||||||
Cost of revenues | (2,560,956) | (3,811,751) | 48.8% | |||||
Selling expenses | (3,533,004) | (5,424,318) | 53.5% | |||||
General and administrative expenses | (1,835,112) | (3,137,689) | 71.0% | |||||
Other operating income | 9,345 | 17,618 | 88.5% | |||||
Total operating cost and expenses | (7,919,727) | (12,356,140) | 56.0% | |||||
Income from operations | 6,084,365 | 2,090,171 | (65.6%) | |||||
Other income(expenses): | ||||||||
Interest income | 98,667 | 521,724 | 428.8% | |||||
Investment income | 65,728 | 486,815 | 640.7% | |||||
Other (expense) income | (128,661) | 894,388 | (795.2%) | |||||
Total other income | 35,734 | 1,902,927 | 5225.3% | |||||
Income before taxes and loss from equity in affiliates | 6,120,099 | 3,993,098 | (34.8%) | |||||
Income tax expense | (1,859,758) | (430,094) | (76.9%) | |||||
Loss from equity in affiliates | (12,707) | (28,746) | - | |||||
Net income attributable to Noah Shareholders | 4,247,634 | 3,534,258 | (16.8%) | |||||
Income per ADS, basic | 0.08 | 0.06 | (25.0%) | |||||
Income per ADS, diluted | 0.08 | 0.06 | (25.0%) | |||||
Margin analysis: | ||||||||
Operating margin | 43.4% | 14.5% | ||||||
Net margin | 30.3% | 24.5% | ||||||
Weighted average ADS equivalent: [1] | ||||||||
Basic | 46,329,565 | 55,892,072 | ||||||
Diluted | 47,807,742 | 56,755,513 | ||||||
ADS equivalent outstanding at end of period | 55,660,000 | 55,925,172 | ||||||
[1] | Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs |
Noah Holdings Limited | ||||||||
Condensed Consolidated Income Statements | ||||||||
(In U.S. dollars, except for ADS data, per ADS data and percentages) | ||||||||
(unaudited) | ||||||||
Twelve months ended | ||||||||
December 31, | December 31, | Change | ||||||
2010 | 2011 | |||||||
$ | $ | |||||||
Revenues: | ||||||||
Third-party revenues | 30,996,179 | 63,636,367 | 105.3% | |||||
Related party revenues | 9,068,669 | 12,724,077 | 40.3% | |||||
Total revenues | 40,064,848 | 76,360,444 | 90.6% | |||||
Less: business taxes and related surcharges | (2,201,289) | (4,197,118) | 90.7% | |||||
Net revenues | 37,863,559 | 72,163,326 | 90.6% | |||||
Operating cost and expenses: | ||||||||
Cost of revenues | (6,570,752) | (14,805,431) | 125.3% | |||||
Selling expenses | (8,488,457) | (19,262,014) | 126.9% | |||||
General and administrative expenses | (7,292,577) | (13,556,787) | 85.9% | |||||
Other operating income | 172,737 | 562,333 | 225.5% | |||||
Total operating cost and expenses | (22,179,049) | (47,061,899) | 112.2% | |||||
Income from operations | 15,684,510 | 25,101,427 | 60.0% | |||||
Other income(expenses): | ||||||||
Interest income | 179,069 | 1,953,619 | 991.0% | |||||
Investment income | 281,076 | 1,368,358 | 386.8% | |||||
Other (expense) income | (153,060) | 3,347,301 | (2286.9%) | |||||
Gain on change in fair value of derivative liabilities | 354,000 | - | (100.0%) | |||||
Total other income | 661,085 | 6,669,278 | 908.8% | |||||
Income before taxes and loss from equity in affiliates | 16,345,595 | 31,770,705 | 94.4% | |||||
Income tax expenses | (4,790,089) | (7,779,408) | 62.4% | |||||
Loss from equity in affiliates | (25,137) | (21,347) | (15.1%) | |||||
Net income attributable to Noah Shareholders | 11,530,369 | 23,969,950 | 107.9% | |||||
Deemed dividend on Series A convertible redeemable preferred shares | (108,348) | - | (100.0%) | |||||
Net income attributable to ordinary shareholders | 11,422,021 | 23,969,950 | 109.9% | |||||
|
||||||||
Income per ADS, basic | 0.26 | 0.43 | 65.2% | |||||
Income per ADS, diluted | 0.23 | 0.42 | 82.8% | |||||
Margin analysis: | ||||||||
Operating margin | 41.4% | 34.8% | ||||||
Net margin | 30.5% | 33.2% | ||||||
Weighted average ADS equivalent: [2] | ||||||||
Basic | 33,331,836 | 55,789,906 | ||||||
Diluted | 38,060,223 | 57,042,544 | ||||||
[2] | Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs |
Noah Holdings Limited | ||||||||
Supplemental Information | ||||||||
(unaudited) | ||||||||
As of | Change | |||||||
December 31, 2010 | December 31, 2011 | |||||||
Number of registered clients | 16,296 | 27,144 | 66.6% | |||||
Number of relationship managers | 341 | 510 | 49.6% | |||||
Number of branch offices | 39 | 59 | 51.3% | |||||
Three months ended | Change | |||||||
December 31, 2010 | December 31, 2011 | |||||||
(in millions of RMB, except number of active clients and |
||||||||
Number of active clients | 621 | 937 | 50.9% | |||||
Transaction value: | ||||||||
Fixed income products | 2,022 | 2,794 | 38.2% | |||||
Private equity fund products | 2,336 | 1,467 | (37.2%) | |||||
Securities investment funds and investment-linked insurance products | 47 | 26 | (44.7%) | |||||
Total transaction value | 4,405 | 4,287 | (2.7%) | |||||
Average transaction value per client | 7.09 | 4.58 | (35.5%) | |||||
Twelve months ended | Change | |||||||
December 31, 2010 | December 31, 2011 | |||||||
(in millions of RMB, except number of active clients and |
||||||||
Number of active clients | 1,631 | 3,095 | 89.8% | |||||
Transaction value: | ||||||||
Fixed income products | 5,908 | 9,638 | 63.1% | |||||
Private equity fund products | 8,264 | 10,835 | 31.1% | |||||
Securities investment funds and investment-linked insurance products | 246 | 2,113 | 758.9% | |||||
Total transaction value | 14,418 | 22,586 | 56.7% | |||||
Average transaction value per client | 8.84 | 7.30 | (17.4%) | |||||
Noah Holdings Limited | ||||||||
Reconciliation of GAAP to Non-GAAP Results | ||||||||
(In U.S. dollars, except for ADS data and percentages) | ||||||||
(unaudited) | ||||||||
Three months ended | ||||||||
December |
December |
Change | ||||||
2010 | 2011 | |||||||
$ | $ | |||||||
Net income attributable to Noah Shareholders | 4,247,634 | 3,534,258 | (16.8%) | |||||
Adjustment for share-based compensation related to: | ||||||||
Share options | 386,523 | 681,258 | 76.3% | |||||
Restricted shares | 35,796 | 35,796 | - | |||||
Adjusted net income attributable to Noah Shareholders (non-GAAP)* | 4,669,953 | 4,251,312 | (9.0%) | |||||
Net income per ADS, diluted | 0.08 | 0.06 | (25.0%) | |||||
Adjustment for share-based compensation | 0.01 | 0.01 | - | |||||
Adjusted net income per ADS, diluted (non-GAAP)* | 0.09 | 0.07 | (22.2%) | |||||
Net margin | 30.3% | 24.5% | (19.1%) | |||||
Adjusted net margin (non-GAAP)* | 33.3% | 29.4% | (11.8%) | |||||
*The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments. |
Noah Holdings Limited | ||||||
Reconciliation of GAAP to Non-GAAP Results | ||||||
(In U.S. dollars, except for ADS data and percentages) | ||||||
(unaudited) | ||||||
Twelve months ended | ||||||
December 31, | December 31, | |||||
2010 | 2011 | |||||
$ | $ | |||||
Net income attributable to Noah Shareholders | 11,530,369 | 23,969,950 | ||||
Adjustment for share-based compensation related to: | ||||||
Share options | 909,446 | 2,014,692 | ||||
Restricted shares | 1,310,721 | 142,018 | ||||
Adjustment for gain on change in fair value of derivative liabilities | (354,000) | - | ||||
Adjusted net income attributable to Noah Shareholders (non-GAAP)* | 13,396,536 | 26,126,660 | ||||
Net income per ADS, diluted | 0.23 | 0.42 | ||||
Adjustment for share-based compensation | 0.06 | 0.04 | ||||
Adjustment for gain on change in fair value of derivative liabilities | (0.01) | - | ||||
Adjusted net income per ADS, diluted (non-GAAP)* | 0.28 | 0.46 | ||||
Net margin | 30.5% | 33.2% | ||||
Adjusted net margin (non-GAAP)* | 35.5% | 36.2% | ||||
|
*The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments. |
________________________________ |
|
1 |
Noah’s Non-GAAP financial measures are its corresponding GAAP financial measures as adjusted by excluding the effects of all forms of share-based compensation and gain on change in fair value of derivative liabilities. |
2 |
“Active clients” refers to those registered clients who purchased wealth management products distributed by Noah during any given period. |
3 |
The amount in RMB was translated into U.S. dollars using the average rate for the period as set forth in the H.10 statistical release of the Federal Reserve Board. |
4 |
“Average transaction value per client” refers to the average value of wealth management products distributed by Noah that are purchased by active clients during a given period. |
Source:
Noah Holdings Limited
Shang Chuang, +86 21 3860 2388
Director
of IR
ir@noahwm.com