UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2021
Commission File Number: 001-34936
Noah Holdings Limited
No. 1687 Changyang Road, Changyang Valley, Building 2
Shanghai 200090, People’s Republic of China
(86) 21 8035 9221
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Noah Holdings Limited | ||
| By: | /s/ Qing Pan | |
| Name: | Qing Pan | |
| Title: | Chief Financial Officer | |
Date: March 15, 2021
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Exhibit Index
| Exhibit No. | Description. | |
| Exhibit 99.1 | Press Release |
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Exhibit 99.1
NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED PRELIMINARY
FINANCIAL RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2020
SHANGHAI, March 16, 2021 — 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 preliminary1 financial results for the fourth quarter of 2020 and the full year ended December 31, 2020.
FOURTH QUARTER 2020 FINANCIAL HIGHLIGHTS
| · | Net revenues for the fourth quarter of 2020 were RMB953.2 million (US$146.1 million), a 20.9% increase from the corresponding period in 2019, and an 11.0% increase compared with third quarter of 2020, due to increases in both one-time commissions and performance-based income. |
| (RMB millions, except percentages) |
Q4 2019 | Q4 2020 | YoY Change | |||||||||
| Wealth management | 527.9 | 643.2 | 21.8 | % | ||||||||
| Asset management | 204.1 | 306.0 | 49.9 | % | ||||||||
| Lending and other businesses | 56.3 | 4.0 | (92.9 | )% | ||||||||
| Total net revenues | 788.3 | 953.2 | 20.9 | % | ||||||||
| · | Income from operations for the fourth quarter of 2020 was RMB335.5 million (US$51.4 million), a 165.7% increase from the corresponding period in 2019, and a decrease of 3.4% compared with the third quarter of 2020. |
| (RMB millions, except percentages) |
Q4 2019 | Q4 2020 | YoY Change | |||||||||
| Wealth management | 34.8 | 206.3 | 492.8 | % | ||||||||
| Asset management | 91.0 | 151.8 | 66.8 | % | ||||||||
| Lending and other businesses | 0.5 | (22.6 | ) | N.A. | ||||||||
| Total income from operations | 126.3 | 335.5 | 165.7 | % | ||||||||
| · | Net Loss attributable to Noah shareholders for the fourth quarter of 2020 was RMB1,573.5 million (US$241.2 million), compared to net income attributable to Noah shareholders of RMB102.8 million from the corresponding period in 2019, due to the recognition of a one-off settlement expense related to the settlement plan for investors of certain credit funds involving Camsing announced August 25, 2020 (the “Camsing settlement”) in the amount of RMB1,828.9 million (US$280.3 million). |
1 As of the date hereof, the Company is 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 loss, net loss attributable to Noah shareholders, loss per ADS and the balance of investments in affiliates in Noah’s consolidated financial statements. If there will be any fair value adjustments associated with the above, which have not been included in these unaudited preliminary financial results in this press release, the Company will include such adjustments in the audited consolidated financial statements in its Form 20-F for the fiscal year 2020 and subsequent reporting if necessary.
1
| · | Non-GAAP2 net income attributable to Noah shareholders for the fourth quarter of 2020 was RMB262.5 million (US$40.2 million), a 121.1% increase from the corresponding period in 2019. |
FULL YEAR 2020 FINANCIAL HIGHLIGHTS
| · | Net revenues in the full year 2020 were RMB3,305.8 million (US$506.6 million), a 2.5% decrease from the full year 2019, mainly due to a decrease in other service fees. |
| (RMB millions, except percentages) |
FY 2019 | FY 2020 | YoY Change | |||||||||
| Wealth management | 2,319.3 | 2,366.3 | 2.0 | % | ||||||||
| Asset management | 783.5 | 875.5 | 11.7 | % | ||||||||
| Lending and other businesses | 289.0 | 64.0 | (77.9 | )% | ||||||||
| Total net revenues | 3,391.8 | 3,305.8 | (2.5 | )% | ||||||||
| · | Income from operations in the full year 2020 was RMB1,258.5 million (US$192.9 million), a 37.5% increase from the full year 2019. |
| (RMB millions, except percentages) |
FY 2019 | FY 2020 | YoY Change | |||||||||
| Wealth management | 437.8 | 817.5 | 86.8 | % | ||||||||
| Asset management | 391.3 | 459.8 | 17.5 | % | ||||||||
| Lending and other businesses | 85.9 | (18.8 | ) | N.A. | ||||||||
| Total income from operations | 915.0 | 1,258.5 | 37.5 | % | ||||||||
| · | Net loss attributable to Noah shareholders in the full year 2020 was RMB745.2 million (US$114.2 million), compared to net income attributable to Noah shareholders of RMB829.2 million from the full year 2019, due to the recognition of a one-off settlement expense related to the Camsing settlement in the amount of RMB1,828.9 million (US$280.3 million). |
| · | Non-GAAP net income attributable to Noah shareholders in the full year 2020 was RMB1,129.7 million (US$173.1 million), a 25.3% increase from the full year 2019. |
FOURTH QUARTER AND FULL YEAR 2020 OPERATIONAL UPDATES
Wealth Management Business
The Company’s wealth management business offers financial products and provides value-added services to high net worth clients in China and overseas. Noah primarily distributes private equity, public securities, credit and insurance products denominated in RMB and other currencies.
| · | Total number of registered clients as of December 31, 2020 was 360,637, a 22.8% increase from December 31, 2019 and a 2.9% increase compared with September 30, 2020. |
2 Noah’s Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation, non-recurring settlement expense and net of relevant tax impact, if any. See “Reconciliation of GAAP to Non-GAAP Results” at the end of this press release.
2
| · | Total number of active clients3 which excluded mutual fund-only clients during the fourth quarter of 2020 was 5,268, a 16.8% increase from the corresponding period in 2019. Counting in mutual fund-only clients, the total number of clients who transacted with us during the fourth quarter of 2020 was 19,501, a 25.5% increase from the corresponding quarter of 2019. Total number of active clients which excluded mutual fund-only clients during the full year 2020 was 12,161, a 16.4% decrease from the full year 2019, and total number of active clients counting in mutual fund-only clients during the full year 2020 was 34,213, an 8.6% increase from the full year 2019. |
| · | Aggregate value of financial products distributed during the fourth quarter of 2020 was RMB21.3 billion (US$3.3 billion), a 61.9% increase from the corresponding period in 2019, due to the significant increase in the distribution of public securities products and private equity products. |
| Product type | Three months ended December 31, | |||||||||||||||
| 2019 | 2020 | |||||||||||||||
| (RMB in billions, except percentages) | ||||||||||||||||
| Public securities products | 9.7 | 73.7 | % | 15.2 | 71.4 | % | ||||||||||
| Private equity products | 1.8 | 13.8 | % | 5.2 | 24.3 | % | ||||||||||
| Credit products | 1.0 | 7.2 | % | 0.1 | 0.4 | % | ||||||||||
| Other products | 0.7 | 5.3 | % | 0.8 | 3.9 | % | ||||||||||
| All products | 13.2 | 100.0 | % | 21.3 | 100.0 | % | ||||||||||
| · | Aggregate value of financial products distributed during the full year 2020 was RMB94.7 billion (US$14.5 billion), a 20.6% increase from the full year 2019, due to the significant increase in the distribution of public securities products. |
| Product type | Twelve months ended December 31, | |||||||||||||||
| 2019 | 2020 | |||||||||||||||
| (RMB in billions, except percentages) | ||||||||||||||||
| Public securities products | 26.4 | 33.6 | % | 73.1 | 77.2 | % | ||||||||||
| Private equity products | 14.3 | 18.2 | % | 17.9 | 18.9 | % | ||||||||||
| Credit products | 34.3 | 43.7 | % | 0.6 | 0.6 | % | ||||||||||
| Other products | 3.5 | 4.5 | % | 3.1 | 3.3 | % | ||||||||||
| All products | 78.5 | 100.0 | % | 94.7 | 100.0 | % | ||||||||||
| · | Coverage network in mainland China included 80 cities as of December 31, 2020, compared with 79 cities as of September 30, 2020, and 82 cities as of December 31, 2019. |
| · | Number of relationship managers was 1,231 as of December 31, 2020, a 2.2% increase from September 30, 2020, and a 4.4% decrease from December 31, 2019, primarily as a result of the Company’s efforts to streamline operational human resources. The turnover rate of core “elite” relationship managers was 5.1%, compared with 4.1% in the year of 2019. |
3 “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, excluding clients who transacted only on our online mutual fund platform.
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Asset Management Business
The Company’s asset management business, conducting through Gopher Asset Management Co., Ltd. (“Gopher Asset Management”), is a leading alternative multi-asset manager in China with overseas offices in Hong Kong, United States and Canada. Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities, credit to multi-strategy investments denominated in Renminbi and other currencies.
| · | Total assets under management as of December 31, 2020 were RMB152.8 billion (US$23.4 billion), a 1.8% decrease from September 30, 2020 due to the distribution of certain funds in real estate products and a 10.2% decrease from December 31, 2019 due to voluntary redemption of certain credit products. |
| Investment type | As of September 30, 2020 |
Growth | Distribution/ Redemption |
As of December 31, 2020 |
||||||||||||||||||||
| (RMB billions, except percentages) | ||||||||||||||||||||||||
| Private equity | 109.4 | 70.3 | % | 5.6 | 2.0 | 113.0 | 74.0 | % | ||||||||||||||||
| Real estate | 16.8 | 10.7 | % | - | 4.1 | 12.7 | 8.3 | % | ||||||||||||||||
| Credit | 11.7 | 7.5 | % | - | 1.5 | 10.2 | 6.7 | % | ||||||||||||||||
| Public securities | 10.8 | 7.0 | % | 0.6 | 1.6 | 4 | 9.8 | 6.4 | % | |||||||||||||||
| Multi-strategies | 7.0 | 4.5 | % | 0.2 | 0.1 | 7.1 | 4.6 | % | ||||||||||||||||
| All Investments | 155.7 | 100.0 | % | 6.4 | 9.3 | 152.8 | 100.0 | % | ||||||||||||||||
| Investment type | As of December 31, 2019 |
Growth | Distribution/ Redemption |
As of December 31, 2020 |
||||||||||||||||||||
| (RMB billions, except percentages) | ||||||||||||||||||||||||
| Private equity | 104.9 | 61.6 | % | 16.2 | 8.1 | 113.0 | 74.0 | % | ||||||||||||||||
| Real estate | 17.6 | 10.3 | % | 1.5 | 6.4 | 12.7 | 8.3 | % | ||||||||||||||||
| Credit | 29.6 | 17.4 | % | 0.1 | 19.5 | 10.2 | 6.7 | % | ||||||||||||||||
| Public securities | 9.3 | 5.5 | % | 5.5 | 5.0 | 9.8 | 6.4 | % | ||||||||||||||||
| Multi-strategies | 8.8 | 5.2 | % | 1.3 | 3.0 | 7.1 | 4.6 | % | ||||||||||||||||
| All Investments | 170.2 | 100.0 | % | 24.6 | 42.0 | 152.8 | 100.0 | % | ||||||||||||||||
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. Starting in the fourth quarter of 2020, the Company has been integrating its internal resources to launch a new consolidated platform called “Noah Digital Intelligence” to offer comprehensive services including investor education, insurance products and a turnkey asset management platform, etc., which is led by our newly-on boarded senior management Mr. Jin Chen, who was the former General Manager and co-CEO of ZhongAn Online P&C Insurance Co., Ltd. (HKEX:06060).
Ms. Jingbo Wang, co-founder and CEO of Noah, said, “I am pleased to report a strong rebound of performances we delivered in 2020 - total transaction value rose 20.6% to RMB94.7 billion from RMB78.5 billion in 2019. Among which, the transaction value of public securities rose 177.3% year-on-year to RMB73.1 billion, representing a successful execution of our strategy to transform our product offerings to public securities. We continue to strengthen our capability in distributing private equity products, reporting a transaction value of RMB17.9 billion, up 25.2% year-on-year. Despite that we recorded net loss of RMB745.2 million in 2020 due to one-off settlement expense related to Camsing settlement, our non-GAAP net income for the full year exceeded RMB1.1 billion, up 25.3% from 2019. We are also glad to report that the number of black card clients grew from 883 as of December 31, 2019 to 985 as of December 31, 2020. Our management team has set growth target for 2021 and we look forward to sharing the developments with investors. As we picture the future Noah, digitalization will remain a very important strategy, and we are committed to further investing into the development and improvement of our IT infrastructure and technology to enhance our know-your-clients (KYC), know-your agent (KYA) and know-your-products (KYP) and better serve our clients in a new era.”
4 The distribution/redemption of public securities also includes market appreciation or depreciation.
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FOURTH QUARTER 2020 FINANCIAL RESULTS
Net Revenues
Net revenues for the fourth quarter of 2020 were RMB953.2 million (US$146.1 million), a 20.9% increase from the corresponding period in 2019, primarily driven by increased one-time commissions and performance-based income, and partially offset by decreased recurring service fees and other service fees.
| · | Wealth Management Business |
| · | Net revenues from one-time commissions for the fourth quarter of 2020 were RMB235.7 million (US$36.1 million), a 48.9% increase from the corresponding period in 2019 due to an increase in financial products distributed in fourth quarter of 2020. |
| · | Net revenues from recurring service fees for the fourth quarter of 2020 were RMB297.3 million (US$45.6 million), a 3.0% decrease from the corresponding period in 2019. The decrease was primarily due to less service fees recognized upon liquidation of certain credit products with higher fee rates. |
| · | Net revenues from performance-based income for the fourth quarter of 2020 were RMB80.9 million (US$12.4 million), compared with RMB15.8 million from the corresponding period of 2019, primarily due to an increase in performance-based income from public securities products and private equity fund products. | |
| · | Net revenues from other service fees for the fourth quarter of 2020 were RMB29.3 million (US$4.5 million), a 38.1% decrease from the corresponding period in 2019, primarily due to less value-added services Noah offers to its high net worth clients during the COVID-19 epidemic. |
| · | Asset Management Business |
| · | Net revenues from recurring service fees for the fourth quarter of 2020 were RMB138.6 million (US$21.2 million), a 13.2% decrease from the corresponding period in 2019. The decrease was primarily due to a decrease in assets under management. |
| · | Net revenues from performance-based income for the fourth quarter of 2020 were RMB125.7 million (US$19.3 million), a 201.1% increase from the corresponding period in 2019, primarily due to an increase in performance-based income from certain real estate funds and private equity funds. |
| · | Lending and Other Businesses |
| · | Net revenues for the fourth quarter of 2020 were RMB4.0 million (US$0.6 million), a 92.9% decrease from the corresponding period in 2019. The decrease was primarily due to reduced loan origination since the second half of 2019. |
Operating Costs and Expenses
Operating costs and expenses for the fourth quarter of 2020 were RMB617.8 million (US$94.7 million), a 6.7% decrease from the corresponding period in 2019. Operating costs and expenses primarily consisted of compensation and benefits of RMB445.8 million (US$68.3 million), selling expenses of RMB94.6 million (US$14.5 million), general and administrative expenses of RMB84.0 million (US$12.9 million) and other operating expenses of RMB22.6 million (US$3.5 million).
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| · | Operating costs and expenses for the wealth management business for the fourth quarter of 2020 were RMB436.9 million (US$67.0 million), an 11.4% decrease from the corresponding period in 2019 primarily due to a decrease in provision for credit loss. | |
| · | Operating costs and expenses for the asset management business for the fourth quarter of 2020 were RMB154.2 million (US$23.6 million), a 36.3% increase from the corresponding period in 2019, primarily due to an increase in compensation and benefits. | |
| · | Operating costs and expenses for the lending and other businesses for the fourth quarter of 2020 were RMB26.7 million (US$4.1 million), a 52.2% decrease from the corresponding period in 2019, primarily due to decreases in compensation and benefits as well as other operating expenses. |
Operating Margin
Operating margin for the fourth quarter of 2020 was 35.2%, compared with 16.0% for the corresponding period in 2019.
| · | Operating margin for the wealth management business for the fourth quarter of 2020 was 32.1%, compared with 6.6% for the corresponding period in 2019, due to continuously operating efficiency improvement and the decrease of provision for credit loss. | |
| · | Operating margin for the asset management business for the fourth quarter of 2020 was 49.6%, compared with 44.6% for the corresponding period in 2019 due to increased performance-based income with higher operating margin. | |
| · | Loss from the lending and other businesses for the fourth quarter of 2020 was RMB22.7 million (US$3.5 million), compared with income from operations in the amount of RMB0.5 million in the corresponding period of 2019 due to reduced loan origination. |
Investment Loss
Investment Loss for the fourth quarter of 2020 was RMB109.4 million (US$16.8 million), compared with investment loss of RMB17.7 million for the corresponding period in 2019. The loss was primarily due to an impairment of certain long-term investment.
Settlement Expense
As previously disclosed on August 25, 2020, the Company offered a settlement plan to the investors of Camsing Products by issuing a fixed number of Company’s restricted share units (the “RSU”) for consecutive 10 years in exchange for the release of the Company and its subsidiaries from all forms of complaints, arbitrations or litigations in the future immediately. As of December 31, 2020, approximately 67.5% of the Camsing investors had accepted the settlement plan, representing approximately 70.6% of the total outstanding Camsing fund balances. The Company recorded RMB1,290.8 million (US$197.9 million) based on the fair value of RSUs issued to investors. The Company currently has no new settlement plan for remaining unsettled investors, but would not preclude to reaching settlements in the future with similar terms. Therefore, the Company also recognized contingent liability in the amount of RMB530.4 million (US$81.3 million) as of December 31, 2020 in relation to the potential future settlement plan.
Income Tax Expenses
Income tax expenses for the fourth quarter of 2020 were RMB27.4 million (US$4.2 million), a 2.6% decrease from the corresponding period in 2019, primarily due to lower effective tax rate.
6
Income from Equity in Affiliates
Income from equity in affiliates for the fourth quarter of 2020 was RMB39.8 million (US$6.1 million), compared with RMB14.9 million in the corresponding period in 2019. We are still reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager. Although we do not anticipate material variance barring unexpected fluctuations in the portfolio companies’ performance, any potential changes in fair value of those investments could affect the income from equity in affiliates.
Net Income
| · | Net Income |
| · | Net loss for the fourth quarter of 2020 was RMB1,572.9 million (US$241.1 million), compared to net income of RMB117.9 million from the corresponding period in 2019. | |
| · | Net margin for the fourth quarter of 2020 was negative, compared with 15.0% for the corresponding period in 2019. | |
| · | Net loss attributable to Noah shareholders for the fourth quarter of 2020 was RMB1,573.5 million (US$241.2 million), compared to net income attributable to Noah shareholders of RMB102.8 million from the corresponding period in 2019. | |
| · | Net margin attributable to Noah shareholders for the fourth quarter of 2020 was negative, compared with 13.0% for the corresponding period in 2019. | |
| · | Net loss attributable to Noah shareholders per basic and diluted ADS for the fourth quarter of 2020 was RMB24.92 (US$3.82), compared with net income attributable to Noah shareholders per basic and diluted ADS of RMB1.67 and RMB1.66 respectively, for the corresponding period in 2019. |
| · | Non-GAAP Net Income Attributable to Noah Shareholders |
| · | Non-GAAP net income attributable to Noah shareholders for the fourth quarter of 2020 was RMB262.5 million (US$40.2 million), a 121.1% increase from the corresponding period in 2019. | |
| · | Non-GAAP net margin attributable to Noah shareholders for the fourth quarter of 2020 was 27.5%, up from 15.1% for the corresponding period in 2019. | |
| · | Non-GAAP net income attributable to Noah shareholders per diluted ADS for the fourth quarter of 2020 was RMB4.13 (US$0.63), up from RMB1.92 for the corresponding period in 2019. |
FULL YEAR 2020 FINANCIAL RESULTS
Net Revenues
Net revenues for the full year 2020 were RMB3,305.8 million (US$506.6 million), a 2.5% decrease from the full year 2019, primarily due to the decrease in other service fees and partially offset by an increase in performance-based income.
| · | Wealth Management Business |
| · | Net revenues from one-time commissions for 2020 were RMB762.0 million (US$116.8 million), a 17.5% decrease from 2019, primarily due to less insurance products that we distributed due to COVID-19 epidemic. |
| · | Net revenues from recurring service fees for 2020 were RMB1,277.4 million (US$195.8 million), an 11.1% increase from 2019. 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 2020 were RMB204.2 million (US$31.3 million), a 775.4% increase from 2019, primarily due to an increase in performance-based income from public securities products and private equity fund products. | |
| · | Net revenues from other service fees for 2020 were RMB122.8 million (US$18.8 million), a 44.7% decrease from 2019, primarily due to less value-added services Noah offers to its high net worth clients during the COVID-19 epidemic. |
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| · | Asset Management Business |
| · | Net revenues from recurring service fees for 2020 were RMB642.4 million (US$98.5 million), a 6.4% decrease from 2019. The decrease was primarily due to a decrease in assets under management in credit products. |
| · | Net revenues from performance-based income for 2020 were RMB183.3 million (US$28.1 million), a 105.5% increase from 2019, primarily due to an increase in performance-based income from private equity fund products. |
| · | Lending and Other Businesses |
| · | Net revenues for 2020 were RMB64.0 million (US$9.8 million), a 77.9% decrease from 2019. |
Operating costs and expenses
Operating costs and expenses for 2020 were RMB2,047.4 million (US$313.8 million), a 17.3% decrease from the full year 2019. Operating costs and expenses for the full year 2020 primarily consisted of compensation and benefits of RMB1,504.0 million (US$230.5 million), selling expenses of RMB271.7 million (US$41.6 million), general and administrative expenses of RMB277.9 million (US$42.6 million) and other operating expenses of RMB99.0 million (US$15.2 million).
| · | Operating costs and expenses for the wealth management business for 2020 were RMB1,548.9 million (US$237.4 million), a 17.7% decrease from 2019, primarily due to the decrease in compensation and benefits and provision for credit losses. |
| · | Operating costs and expenses for the asset management business for 2020 were RMB415.7 million (US$63.7 million), a 6.0% increase from 2019, primarily due to an increase in performance fee compensation related to performance-based income. |
| · | Operating costs and expenses for the lending and other businesses for 2020 were RMB82.8 million (US$12.7 million), a 59.2% decrease from 2019, primarily due to a decrease in compensation and benefits as well as other operating expenses. |
Operating Margin
Operating margin for the full year 2020 was 38.1%, compared to 27.0% for the full year 2019.
| · | Operating margin for the wealth management business for 2020 was 34.5%, compared to 18.9% for 2019, mainly due to continuously operating efficiency improvement and the decrease of provision for credit losses. | |
| · | Operating margin for the asset management business for 2020 was 52.5%, compared to 49.9% for 2019. | |
| · | Loss from the lending and other businesses for 2020 was RMB18.8 million (US$2.9 million), compared with income from operations in the amount of RMB85.9 million for 2019 due to reduced loan origination |
8
Investment Loss
Investment loss for the full year 2020 was RMB86.4 million (US$13.2 million), compared with investment loss of RMB28.6 million for the full year 2019. The investment loss was primarily due to an impairment of certain long-term investment.
Income Tax Expenses
Income tax expenses for the full year 2020 were RMB258.5 million (US$39.6 million), a 17.5% increase from the full year 2019 due to higher taxable income (excluding one-off settlement expense).
Net Income
| · | Net Income |
| · | Net loss for the full year 2020 was RMB743.5 million (US$113.9 million), compared to net income of RMB863.8 million from the full year 2019. | |
| · | Net margin for the full year 2020 was negative, compared with 25.5% for the full year 2019. | |
| · | Net loss attributable to Noah shareholders for the full year 2020 was RMB745.2 million (US$114.2 million), compared to net income attributable to Noah shareholders of RMB829.2 million for the full year 2019. | |
| · | Net margin attributable to Noah shareholders for the full year 2020 was negative, compared with 24.4% for the full year 2019. | |
| · | Net loss attributable to Noah shareholders per basic and diluted ADS for the full year 2020 was RMB12.01 (US$1.84), compared with net income attributable to Noah shareholders per basic and diluted ADS of RMB13.56 and RMB13.42 respectively, for the full year 2019. |
| · | Non-GAAP Net Income Attributable to Noah Shareholders |
| · | Non-GAAP net income attributable to Noah shareholders for the full year 2020 was RMB1,129.7 million (US$173.1 million), a 25.3% increase from the full year 2019. | |
| · | Non-GAAP net margin attributable to Noah shareholders for the full year 2020 was 34.2%, up from 26.6% for the full year 2019. | |
| · | Non-GAAP net income attributable to Noah shareholders per diluted ADS for the full year 2020 was RMB18.12 (US$2.78), up from RMB14.59 for the full year 2019. |
BALANCE SHEET AND CASH FLOW
As of December 31, 2020, the Company had RMB5,005.2 million (US$767.1 million) in cash and cash equivalents, compared with RMB4,387.3 million as of December 31, 2019 and RMB4,597.4 million as of September 30, 2020.
Net cash inflow from the Company’s operating activities during the fourth quarter of 2020 was RMB568.3 million (US$87.1 million), compared to net cash inflow of RMB842.5 million in the corresponding period in 2019. The decrease was mainly due to changes in working capital. Net cash inflow from the Company’s operating activities during the full year 2020 was RMB796.3 million (US$122.0 million), compared to RMB1,288.2 million during the full year 2019, the variance was mainly due to changes in working capital.
Net cash inflow from the Company’s investing activities during the fourth quarter of 2020 was RMB189.5 million (US$29.0 million), compared to net cash outflow of RMB183.9 million in the corresponding period in 2019. Net cash inflow from the Company’s investing activities during the full year 2020 was RMB352.6 million (US$54.0 million), compared to net cash outflow of RMB182.0 million during the full year 2019, due to less loan origination as well as more investments collection made in 2020.
9
Net cash outflow from the Company’s financing activities was RMB255.4 million (US$39.1 million) in the fourth quarter of 2020, compared to net cash inflow of RMB136.3 million in the corresponding period in 2019, primarily due to share repurchase since December 2020. Net cash outflow from the Company’s financing activities during the full year 2020 was RMB371.4 million (US$56.9 million), compared to RMB543.3 million cash inflow during the full year 2019. The cash outflow for 2020 was mainly due to share repurchase since December 2020.
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 2020 financial results in this press release, we will include any such fair value adjustments in the audited consolidated financial statements in our 2020 Form 20-F and will make a subsequent announcement when our review conclude, as appropriate.
Update on Share Repurchase
On December 1, 2020, the Company announced that its board of directors authorized a share repurchase program (the “Share Repurchase Program”) under which the company may repurchase up to US$100 million worth of its ADSs over the following two years. On February 25, 2021, the Company completed the Share Repurchase Program, with approximately 2,233,769 ADSs representing 1,116,885 ordinary shares repurchased at an average price of US$44.77 per ADS.
2021 FORECAST
Even though the ongoing global spread of a novel strain of coronavirus (COVID-19) still have notably slowed down the global economy recovery especially for various travel bans set in Hong Kong which puts severe restrictions on distribution of our offshore insurance products to our clients, the Company is excited to see a strong momentum in the transaction value of standardized products being offered in 2020 and remains reasonably optimistic about the moderate growth in its total transaction value, net revenue as well as its key client base in 2021. In the meantime, with the all-round expansion strategy in sight as well as the commitment to further advance its technology and digitalization, the Company has decided to further increase its investment in talents, IT infrastructure and online platform development as well as client experience, and expects to spend around 4-6% of its total net revenue in such investment in 2021. Given the above considerations, the non-GAAP net income attributable to Noah shareholders for the full year 2021 will be in the range of RMB1.2 billion to RMB1.3 billion. This forecast reflects management’s current business outlook and is subject to further change.
10
CONFERENCE CALL
Senior management will host a combined English and Chinese language conference call to discuss the Company’s fourth quarter and full year 2020 unaudited financial results and recent business activities.
The conference call may be accessed with the following details:
|
Conference call details |
|
Date/Time:
|
Monday, March 15, 2021 at 8:00 p.m., U.S. Eastern Time Tuesday, March 16, 2021 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 | 800-963976 |
| - International | +1-412-317-6061 |
| Conference Title: | Noah Holdings Fourth Quarter 2020 Earnings Call |
| Participant Password: | 9945089 |
A telephone replay will be available starting approximately one hour after the end of the conference call until March 22, 2021 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10152670.
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.
11
DISCUSSION ON 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, non-recurring settlement expense 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 full year 2020, Noah distributed RMB94.7 billion (US$14.5 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB152.8 billion (US$23.4 billion) as of December 31, 2020.
Noah’s wealth management business primarily distributes diversified financial products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,231 relationship managers across 80 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company’s wealth management business had 360,637 registered clients as of December 31, 2020. As a leading alternative multi-asset manager in China, Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities, credit to multi-strategy investments denominated in Renminbi and other currencies. The Company also provides lending services and other businesses.
For more information, please visit Noah at ir.noahgroup.com.
FOREIGN CURRENCY TRANSLATION
In this announcement, the unaudited financial results for the fourth quarter of 2020 and full year ended December 31, 2020 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ 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 RMB6.5250 to US$1.00, the effective noon buying rate for December 31, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board.
12
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 2021 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; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.
Contacts:
Noah Holdings Limited
Sonia Han
Tel: +86-21-8035-9221
ir@noahgroup.com
____________________________________
-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
13
Noah Holdings Limited
Condensed Consolidated Balance Sheets
(unaudited)
| As of | ||||||||||||
| September 30, | December 31, | December 31, | ||||||||||
| 2020 | 2020 | 2020 | ||||||||||
| RMB'000 | RMB'000 | USD'000 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | 4,597,443 | 5,005,211 | 767,082 | |||||||||
| Restricted cash | 727 | 9,993 | 1,531 | |||||||||
| Short-term investments | 55,382 | 114,928 | 17,613 | |||||||||
| Accounts receivable, net | 360,189 | 434,458 | 66,584 | |||||||||
| Loans receivable, net | 476,730 | 418,947 | 64,206 | |||||||||
| Amounts due from related parties | 696,806 | 520,178 | 79,721 | |||||||||
| Other current assets | 194,464 | 199,447 | 30,567 | |||||||||
| Total current assets | 6,381,741 | 6,703,162 | 1,027,304 | |||||||||
| Long-term investments, net | 824,562 | 536,384 | 82,205 | |||||||||
| Investment in affiliates | 1,252,054 | 1,264,685 | 193,821 | |||||||||
| Property and equipment, net | 250,106 | 248,669 | 38,110 | |||||||||
| Operating lease right-of-use assets, net | 291,694 | 274,154 | 42,016 | |||||||||
| Deferred tax assets | 178,358 | 224,240 | 34,366 | |||||||||
| Other non-current assets | 165,559 | 148,292 | 22,726 | |||||||||
| Total Assets | 9,344,074 | 9,399,586 | 1,440,548 | |||||||||
| Liabilities and Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accrued payroll and welfare expenses | 510,043 | 705,622 | 108,141 | |||||||||
| Income tax payable | 136,582 | 140,777 | 21,575 | |||||||||
| Deferred revenues | 125,092 | 71,613 | 10,975 | |||||||||
| Other current liabilities | 318,964 | 354,822 | 54,379 | |||||||||
| Contingent liability | - | 530,433 | 81,292 | |||||||||
| Total current liabilities | 1,090,681 | 1,803,267 | 276,362 | |||||||||
| Operating lease liabilities, non-current | 289,076 | 272,212 | 41,718 | |||||||||
| Deferred tax liabilities | 53,891 | 45,881 | 7,032 | |||||||||
| Other non-current liabilities | 867 | 855 | 131 | |||||||||
| Total Liabilities | 1,434,515 | 2,122,215 | 325,243 | |||||||||
| Equity | 7,909,559 | 7,277,371 | 1,115,305 | |||||||||
| Total Liabilities and Equity | 9,344,074 | 9,399,586 | 1,440,548 | |||||||||
14
Noah Holdings Limited
Condensed Consolidated Income Statements
(unaudited)
| Three months ended | ||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||
| 2019 | 2020 | 2020 | Change | |||||||||||||
| RMB'000 | RMB'000 | USD'000 | ||||||||||||||
| Revenues: | ||||||||||||||||
| Revenues from others: | ||||||||||||||||
| One-time commissions | 150,494 | 229,744 | 35,210 | 52.7 | % | |||||||||||
| Recurring service fees | 125,851 | 199,372 | 30,555 | 58.4 | % | |||||||||||
| Performance-based income | 15,909 | 81,488 | 12,489 | 412.2 | % | |||||||||||
| Other service fees | 105,691 | 39,361 | 6,032 | (62.8 | )% | |||||||||||
| Total revenues from others | 397,945 | 549,965 | 84,286 | 38.2 | % | |||||||||||
| Revenues from funds Gopher manages: | ||||||||||||||||
| One-time commissions | 10,659 | 43,531 | 6,671 | 308.4 | % | |||||||||||
| Recurring service fees | 342,658 | 239,144 | 36,650 | (30.2 | )% | |||||||||||
| Performance-based income | 41,981 | 126,382 | 19,369 | 201.0 | % | |||||||||||
| Total revenues from funds Gopher manages | 395,298 | 409,057 | 62,690 | 3.5 | % | |||||||||||
| Total revenues | 793,243 | 959,022 | 146,976 | 20.9 | % | |||||||||||
| Less: VAT related surcharges | (4,900 | ) | (5,805 | ) | (890 | ) | 18.5 | % | ||||||||
| Net revenues | 788,343 | 953,217 | 146,086 | 20.9 | % | |||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| Relationship manager compensation | (133,306 | ) | (185,926 | ) | (28,494 | ) | 39.5 | % | ||||||||
| Others | (240,808 | ) | (259,872 | ) | (39,827 | ) | 7.9 | % | ||||||||
| Total compensation and benefits | (374,114 | ) | (445,798 | ) | (68,321 | ) | 19.2 | % | ||||||||
| Selling expenses | (77,741 | ) | (94,648 | ) | (14,505 | ) | 21.7 | % | ||||||||
| General and administrative expenses | (101,294 | ) | (84,036 | ) | (12,879 | ) | (17.0 | )% | ||||||||
| Provision for credit losses | (78,718 | ) | 1,789 | 274 | N.A. | |||||||||||
| Other operating expenses | (42,064 | ) | (22,579 | ) | (3,460 | ) | (46.3 | )% | ||||||||
| Government grants | 11,862 | 27,518 | 4,217 | 132.0 | % | |||||||||||
| Total operating costs and expenses | (662,069 | ) | (617,754 | ) | (94,674 | ) | (6.7 | )% | ||||||||
| Income from operations | 126,274 | 335,463 | 51,412 | 165.7 | % | |||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 22,977 | 22,537 | 3,454 | (1.9 | )% | |||||||||||
| Investment loss | (17,725 | ) | (109,397 | ) | (16,766 | ) | 517.2 | %. | ||||||||
| Settlement expense | - | (1,828,907 | ) | (280,292 | ) | N.A. | ||||||||||
| Other expense | (308 | ) | (5,033 | ) | (771 | ) | 1534.1 | % | ||||||||
| Total other income (expense) | 4,944 | (1,920,800 | ) | (294,375 | ) | N.A. | ||||||||||
| Income (loss) before taxes and income from equity in affiliates | 131,218 | (1,585,337 | ) | (242,963 | ) | N.A. | ||||||||||
| Income tax expense | (28,174 | ) | (27,430 | ) | (4,204 | ) | (2.6 | )% | ||||||||
| Income from equity in affiliates | 14,883 | 39,836 | 6,105 | 167.7 | % | |||||||||||
| Net income (loss) | 117,927 | (1,572,931 | ) | (241,062 | ) | N.A. | ||||||||||
| Less: net income attributable to non-controlling interests | 15,134 | 576 | 88 | (96.2 | )% | |||||||||||
| Net income (loss) attributable to Noah shareholders | 102,793 | (1,573,507 | ) | (241,150 | ) | N.A. | ||||||||||
| Income (loss) per ADS, basic | 1.67 | (24.92 | ) | (3.82 | ) | N.A. | ||||||||||
| Income (loss) per ADS, diluted | 1.66 | (24.92 | ) | (3.82 | ) | N.A. | ||||||||||
| Margin analysis: | ||||||||||||||||
| Operating margin | 16.0 | % | 35.2 | % | 35.2 | % | ||||||||||
| Net margin | 15.0 | % | (165.0 | )% | (165.0 | )% | ||||||||||
Weighted average ADS equivalent[1]: | ||||||||||||||||
| Basic | 61,532,722 | 63,149,844 | 63,149,844 | |||||||||||||
| Diluted | 61,900,487 | 63,149,844 | 63,149,844 | |||||||||||||
| ADS equivalent outstanding at end of period | 61,599,313 | 61,088,680 | 61,088,680 | |||||||||||||
[1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs.
15
| Noah Holdings Limited |
| Condensed Consolidated Income Statements |
| (unaudited) |
| Twelve months ended | |||||||||||||
| December 31, | December 31, | December 31, | |||||||||||
| 2019 | 2020 | 2020 | Change | ||||||||||
| RMB'000 | RMB'000 | USD'000 | |||||||||||
| Revenues: | |||||||||||||
| Revenues from others: | |||||||||||||
| One-time commissions | 690,860 | 679,014 | 104,063 | (1.7 | )% | ||||||||
| Recurring service fees | 524,692 | 700,157 | 107,304 | 33.4 | % | ||||||||
| Performance-based income | 23,437 | 180,529 | 27,667 | 670.3 | % | ||||||||
| Other service fees | 522,958 | 196,151 | 30,061 | (62.5 | )% | ||||||||
| Total revenues from others | 1,761,947 | 1,755,851 | 269,095 | (0.3 | )% | ||||||||
| Revenues from funds Gopher manages: | |||||||||||||
| One-time commissions | 240,808 | 129,823 | 19,896 | (46.1 | )% | ||||||||
| Recurring service fees | 1,320,773 | 1,230,042 | 188,512 | (6.9 | )% | ||||||||
| Performance-based income | 89,648 | 208,996 | 32,030 | 133.1 | % | ||||||||
| Total revenues from funds Gopher manages | 1,651,229 | 1,568,861 | 240,438 | (5.0 | )% | ||||||||
| Total revenues | 3,413,176 | 3,324,712 | 509,533 | (2.6 | )% | ||||||||
| Less: VAT related surcharges | (21,364 | ) | (18,886 | ) | (2,894 | ) | (11.6 | )% | |||||
| Net revenues | 3,391,812 | 3,305,826 | 506,639 | (2.5 | )% | ||||||||
| Operating costs and expenses: | |||||||||||||
| Compensation and benefits | |||||||||||||
| Relationship manager compensation | (625,044 | ) | (613,999 | ) | (94,099 | ) | (1.8 | )% | |||||
| Others | (985,726 | ) | (890,013 | ) | (136,400 | ) | (9.7 | )% | |||||
| Total compensation and benefits | (1,610,770 | ) | (1,504,012 | ) | (230,499 | ) | (6.6 | )% | |||||
| Selling expenses | (331,346 | ) | (271,692 | ) | (41,639 | ) | (18.0 | )% | |||||
| General and administrative expenses | (296,492 | ) | (277,879 | ) | (42,587 | ) | (6.3 | )% | |||||
| Provision for credit losses | (130,723 | ) | (8,083 | ) | (1,239 | ) | (93.8 | )% | |||||
| Other operating expenses | (196,793 | ) | (99,040 | ) | (15,179 | ) | (49.7 | )% | |||||
| Government grants | 89,278 | 113,356 | 17,373 | 27.0 | % | ||||||||
| Total operating costs and expenses | (2,476,846 | ) | (2,047,350 | ) | (313,770 | ) | (17.3 | )% | |||||
| Income from operations | 914,966 | 1,258,476 | 192,869 | 37.5 | % | ||||||||
| Other income (expense): | |||||||||||||
| Interest income | 89,099 | 67,317 | 10,317 | (24.4 | )% | ||||||||
| Interest expenses | (430 | ) | - | - | N.A. | ||||||||
| Investment loss | (28,620 | ) | (86,369 | ) | (13,237 | ) | 201.8 | %. | |||||
| Settlement expenses | -- | (1,828,907 | ) | (280,292 | ) | N.A. | |||||||
| Other income (expense) | (7,040 | ) | 4,164 | 638 | N.A. | ||||||||
| Total other income (expense) | 53,009 | (1,843,795 | ) | (282,574 | ) | N.A. | |||||||
| Income (loss) before taxes and income from equity in affiliates | 967,975 | (585,319 | ) | (89,705 | ) | N.A. | |||||||
| Income tax expense | (220,025 | ) | (258,460 | ) | (39,611 | ) | 17.5 | % | |||||
| Income from equity in affiliates | 115,809 | 100,257 | 15,365 | (13.4 | )% | ||||||||
| Net income (loss) | 863,759 | (743,522 | ) | (113,951 | ) | N.A. | |||||||
| Less: net income attributable to non-controlling interests | 34,608 | 1,703 | 261 | (95.1 | )% | ||||||||
| Net income (loss) attributable to Noah shareholders | 829,151 | (745,225 | ) | (114,212 | ) | N.A. | |||||||
| Income (loss) per ADS, basic | 13.56 | (12.01 | ) | (1.84 | ) | N.A. | |||||||
| Income (loss) per ADS, diluted | 13.42 | (12.01 | ) | (1.84 | ) | N.A. | |||||||
| Margin analysis: | |||||||||||||
| Operating margin | 27.0 | % | 38.1 | % | 38.1 | % | |||||||
| Net margin | 25.5 | % | (22.5 | )% | (22.5 | )% | |||||||
Weighted average ADS equivalent[1]: |
|||||||||||||
| Basic | 61,160,362 | 62,040,878 | 62,040,878 | ||||||||||
| Diluted | 61,848,191 | 62,040,878 | 62,040,878 | ||||||||||
| ADS equivalent outstanding at end of period | 61,599,313 | 61,088,680 | 61,088,680 | ||||||||||
[1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs.
16
| Noah Holdings Limited | ||||||||||||||||
| Condensed Comprehensive Income Statements | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three months ended | ||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||
| 2019 | 2020 | 2020 | Change | |||||||||||||
| RMB'000 | RMB'000 | USD'000 | ||||||||||||||
| Net income (loss) | 117,927 | (1,572,931 | ) | (241,062 | ) | N.A. | ||||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Foreign currency translation adjustments | (81,693 | ) | (98,385 | ) | (15,078 | ) | 20.4 | % | ||||||||
| Fair value fluctuation of available for sale Investment (after tax) | 7 | - | - | N.A. | ||||||||||||
| Comprehensive income (loss) | 36,241 | (1,671,316 | ) | (256,140 | ) | N.A. | ||||||||||
| Less: Comprehensive income attributable to non-controlling interests | 15,090 | 469 | 72 | (96.9 | )% | |||||||||||
| Comprehensive income (loss) attributable to Noah shareholders | 21,151 | (1,671,785 | ) | (256,212 | ) | N.A. | ||||||||||
| Noah Holdings Limited | ||||||||||||||||
| Condensed Comprehensive Income Statements | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Twelve months ended | ||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||
| 2019 | 2020 | 2020 | Change | |||||||||||||
| RMB'000 | RMB'000 | USD'000 | ||||||||||||||
| Net income (loss) | 863,759 | (743,522 | ) | (113,951 | ) | N.A. | ||||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Foreign currency translation adjustments | 61,601 | (176,910 | ) | (27,113 | ) | N.A. | ||||||||||
| Fair value fluctuation of available for sale Investment (after tax) | (797 | ) | 771 | 118 | N.A. | |||||||||||
| Comprehensive income (loss) | 924,563 | (919,661 | ) | (140,946 | ) | N.A. | ||||||||||
| Less: Comprehensive income attributable to non-controlling interests | 34,558 | 1,727 | 265 | (95.0 | )% | |||||||||||
| Comprehensive income (loss) attributable to Noah shareholders | 890,005 | (921,388 | ) | (141,211 | ) | N.A. | ||||||||||
17
| Noah Holdings Limited | ||||||||||
| Supplemental Information | ||||||||||
| (unaudited) | ||||||||||
| As of | ||||||||||
| December 31, 2019 | December 31, 2020 | Change | ||||||||
| Number of registered clients | 293,760 | 360,637 | 22.8 | % | ||||||
| Number of relationship managers | 1,288 | 1,231 | (4.4 | )% | ||||||
| Number of cities in mainland China under coverage | 82 | 80 | (2.4 | )% | ||||||
| Three months ended | ||||||||||||
| December 31, 2019 | December 31, 2020 | Change | ||||||||||
| (in millions of RMB, except number of active clients and percentages) | ||||||||||||
| Number of active clients5 | 4,512 | 5,268 | 16.8 | % | ||||||||
| Number of active clients including mutual fund clients | 15,535 | 19,501 | 25.5 | % | ||||||||
| Transaction value: | ||||||||||||
| Public securities products | 9,708 | 15,217 | 56.7 | % | ||||||||
| Private equity products | 1,811 | 5,172 | 185.6 | % | ||||||||
| Credit products | 948 | 89 | (90.6 | )% | ||||||||
| Other products | 703 | 841 | 19.6 | % | ||||||||
| Total transaction value | 13,170 | 21,319 | 61.9 | % | ||||||||
| Twelve months ended | ||||||||||
| December 31, 2019 | December 31, 2020 | Change | ||||||||
| (in millions of RMB, except number of active clients and percentages) | ||||||||||
| Number of active clients | 14,538 | 12,161 | (16.4 | )% | ||||||
| Number of active clients including mutual fund clients | 31,495 | 34,213 | 8.6 | % | ||||||
| Transaction value: | ||||||||||
| Public securities products | 26,378 | 73,143 | 177.3 | % | ||||||
| Private equity products | 14,279 | 17,876 | 25.2 | % | ||||||
| Credit products | 34,316 | 616 | (98.2 | )% | ||||||
| Other products | 3,551 | 3,101 | (12.7 | )% | ||||||
| Total transaction value | 78,524 | 94,736 | 20.6 | % | ||||||
5 “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, excluding clients who transacted on our online mutual fund platform.
18
| Noah Holdings Limited | ||||||||||||||||
| Segment Condensed Income Statements | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three months ended December 31, 2020 | ||||||||||||||||
| 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 | 229,418 | 326 | - | 229,744 | ||||||||||||
| Recurring service fees | 198,347 | 1,025 | - | 199,372 | ||||||||||||
| Performance-based income | 81,351 | 137 | - | 81,488 | ||||||||||||
| Other service fees | 29,484 | 5,804 | 4,073 | 39,361 | ||||||||||||
| Total revenues from others | 538,600 | 7,292 | 4,073 | 549,965 | ||||||||||||
| Revenues from funds Gopher manages | ||||||||||||||||
| One-time commissions | 7,710 | 35,821 | - | 43,531 | ||||||||||||
| Recurring service fees | 100,651 | 138,493 | - | 239,144 | ||||||||||||
| Performance-based income | - | 126,382 | - | 126,382 | ||||||||||||
| Total revenues from funds Gopher manages | 108,361 | 300,696 | - | 409,057 | ||||||||||||
| Total revenues | 646,961 | 307,988 | 4,073 | 959,022 | ||||||||||||
| Less: VAT related surcharges | (3,770 | ) | (1,957 | ) | (78 | ) | (5,805 | ) | ||||||||
| Net revenues | 643,191 | 306,031 | 3,995 | 953,217 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| Relationship managers | (185,471 | ) | - | (455 | ) | (185,926 | ) | |||||||||
| Others | (120,349 | ) | (124,714 | ) | (14,809 | ) | (259,872 | ) | ||||||||
| Total compensation and benefits | (305,820 | ) | (124,714 | ) | (15,264 | ) | (445,798 | ) | ||||||||
| Selling expenses | (84,160 | ) | (9,822 | ) | (666 | ) | (94,648 | ) | ||||||||
| General and administrative expenses | (58,837 | ) | (18,291 | ) | (6,908 | ) | (84,036 | ) | ||||||||
| Provision for credit losses | 3,113 | (251 | ) | (1,073 | ) | 1,789 | ||||||||||
| Other operating expenses | (18,287 | ) | (1,435 | ) | (2,857 | ) | (22,579 | ) | ||||||||
| Government grants | 27,100 | 316 | 102 | 27,518 | ||||||||||||
| Total operating costs and expenses | (436,891 | ) | (154,197 | ) | (26,666 | ) | (617,754 | ) | ||||||||
| Income (loss) from operations | 206,300 | 151,834 | (22,671 | ) | 335,463 | |||||||||||
19
| Noah Holdings Limited | ||||||||||||||||
| Segment Condensed Income Statements | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three months ended December 31, 2019 | ||||||||||||||||
| 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 | 149,806 | 688 | - | 150,494 | ||||||||||||
| Recurring service fees | 124,872 | 979 | - | 125,851 | ||||||||||||
| Performance-based income | 15,909 | - | - | 15,909 | ||||||||||||
| Other service fees | 47,594 | 718 | 57,379 | 105,691 | ||||||||||||
| Total revenues from others | 338,181 | 2,385 | 57,379 | 397,945 | ||||||||||||
| Revenues from funds Gopher manages | ||||||||||||||||
| One-time commissions | 9,344 | 1,315 | - | 10,659 | ||||||||||||
| Recurring service fees | 183,119 | 159,539 | - | 342,658 | ||||||||||||
| Performance-based income | - | 41,981 | - | 41,981 | ||||||||||||
| Total revenues from funds Gopher manages | 192,463 | 202,835 | - | 395,298 | ||||||||||||
| Total revenues | 530,644 | 205,220 | 57,379 | 793,243 | ||||||||||||
| Less: VAT related surcharges | (2,707 | ) | (1,098 | ) | (1,095 | ) | (4,900 | ) | ||||||||
| Net revenues | 527,937 | 204,122 | 56,284 | 788,343 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| Relationship managers | (133,306 | ) | - | - | (133,306 | ) | ||||||||||
| Others | (143,475 | ) | (75,072 | ) | (22,261 | ) | (240,808 | ) | ||||||||
| Total compensation and benefits | (276,781 | ) | (75,072 | ) | (22,261 | ) | (374,114 | ) | ||||||||
| Selling expenses | (64,026 | ) | (9,099 | ) | (4,616 | ) | (77,741 | ) | ||||||||
| General and administrative expenses | (64,375 | ) | (27,485 | ) | (9,434 | ) | (101,294 | ) | ||||||||
| Provision for doubtful credit looses | (74,163 | ) | (1,165 | ) | (3,390 | ) | (78,718 | ) | ||||||||
| Other operating expenses | (22,676 | ) | (3,190 | ) | (16,198 | ) | (42,064 | ) | ||||||||
| Government grants | 8,925 | 2,870 | 67 | 11,862 | ||||||||||||
| Total operating costs and expenses | (493,096 | ) | (113,141 | ) | (55,832 | ) | (662,069 | ) | ||||||||
| Income from operations | 34,841 | 90,981 | 452 | 126,274 | ||||||||||||
20
| Noah Holdings Limited | ||||||||||||||||
| Segment Condensed Income Statements | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Twelve months ended December 31, 2020 | ||||||||||||||||
| 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 | 677,726 | 1,288 | - | 679,014 | ||||||||||||
| Recurring service fees | 697,140 | 3,017 | - | 700,157 | ||||||||||||
| Performance-based income | 180,385 | 144 | - | 180,529 | ||||||||||||
| Other service fees | 123,458 | 7,451 | 65,242 | 196,151 | ||||||||||||
| Total revenues from others | 1,678,709 | 11,900 | 65,242 | 1,755,851 | ||||||||||||
| Revenues from funds Gopher manages | ||||||||||||||||
| One-time commissions | 88,520 | 41,303 | - | 129,823 | ||||||||||||
| Recurring service fees | 587,307 | 642,735 | - | 1,230,042 | ||||||||||||
| Performance-based income | 24,920 | 184,076 | - | 208,996 | ||||||||||||
| Total revenues from funds Gopher manages | 700,747 | 868,114 | - | 1,568,861 | ||||||||||||
| Total revenues | 2,379,456 | 880,014 | 65,242 | 3,324,712 | ||||||||||||
| Less: VAT related surcharges | (13,123 | ) | (4,521 | ) | (1,242 | ) | (18,886 | ) | ||||||||
| Net revenues | 2,366,333 | 875,493 | 64,000 | 3,305,826 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| Relationship managers | (613,101 | ) | - | (898 | ) | (613,999 | ) | |||||||||
| Others | (486,668 | ) | (339,691 | ) | (63,654 | ) | (890,013 | ) | ||||||||
| Total compensation and benefits | (1,099,769 | ) | (339,691 | ) | (64,552 | ) | (1,504,012 | ) | ||||||||
| Selling expenses | (228,853 | ) | (34,302 | ) | (8,537 | ) | (271,692 | ) | ||||||||
| General and administrative expenses | (197,511 | ) | (59,440 | ) | (20,928 | ) | (277,879 | ) | ||||||||
| Provision for credit losses | (3,785 | ) | (251 | ) | (4,047 | ) | (8,083 | ) | ||||||||
| Other operating expenses | (76,983 | ) | (6,443 | ) | (15,614 | ) | (99,040 | ) | ||||||||
| Government grants | 58,046 | 24,443 | 30,867 | 113,356 | ||||||||||||
| Total operating costs and expenses | (1,548,855 | ) | (415,684 | ) | (82,811 | ) | (2,047,350 | ) | ||||||||
| Income (loss) from operations | 817,478 | 459,809 | (18,811 | ) | 1,258,476 | |||||||||||
21
| Noah Holdings Limited | ||||||||||||||||
| Segment Condensed Income Statements | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Twelve months ended December 31, 2019 | ||||||||||||||||
| 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 | 688,652 | 2,208 | - | 690,860 | ||||||||||||
| Recurring service fees | 520,013 | 4,679 | - | 524,692 | ||||||||||||
| Performance-based income | 23,333 | 104 | - | 23,437 | ||||||||||||
| Other service fees | 222,912 | 4,274 | 295,772 | 522,958 | ||||||||||||
| Total revenues from others | 1,454,910 | 11,265 | 295,772 | 1,761,947 | ||||||||||||
| Revenues from funds Gopher manages | ||||||||||||||||
| One-time commissions | 239,409 | 1,399 | - | 240,808 | ||||||||||||
| Recurring service fees | 635,437 | 685,336 | - | 1,320,773 | ||||||||||||
| Performance-based income | 97 | 89,551 | - | 89,648 | ||||||||||||
| Total revenues from funds Gopher manages | 874,943 | 776,286 | - | 1,651,229 | ||||||||||||
| Total revenues | 2,329,853 | 787,551 | 295,772 | 3,413,176 | ||||||||||||
| Less: VAT related surcharges | (10,574 | ) | (3,971 | ) | (6,819 | ) | (21,364 | ) | ||||||||
| Net revenues | 2,319,279 | 783,580 | 288,953 | 3,391,812 | ||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Compensation and benefits | ||||||||||||||||
| Relationship managers | (625,044 | ) | - | - | (625,044 | ) | ||||||||||
| Others | (607,336 | ) | (279,895 | ) | (98,495 | ) | (985,726 | ) | ||||||||
| Total compensation and benefits | (1,232,380 | ) | (279,895 | ) | (98,495 | ) | (1,610,770 | ) | ||||||||
| Selling expenses | (287,541 | ) | (26,661 | ) | (17,144 | ) | (331,346 | ) | ||||||||
| General and administrative expenses | (194,908 | ) | (71,805 | ) | (29,779 | ) | (296,492 | ) | ||||||||
| Provision for credit losses | (121,572 | ) | (3,800 | ) | (5,351 | ) | (130,723 | ) | ||||||||
| Other operating expenses | (103,846 | ) | (25,978 | ) | (66,969 | ) | (196,793 | ) | ||||||||
| Government grants | 58,704 | 15,878 | 14,696 | 89,278 | ||||||||||||
| Total operating costs and expenses | (1,881,543 | ) | (392,261 | ) | (203,042 | ) | (2,476,846 | ) | ||||||||
| Income from operations | 437,736 | 391,319 | 85,911 | 914,966 | ||||||||||||
22
| Noah Holdings Limited | ||||||||||||||||
| Supplement Revenue Information by Geography | ||||||||||||||||
(unaudited) | ||||||||||||||||
| Three months ended December 31, 2020 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: | ||||||||||||||||
| Mainland China | 513,690 | 262,719 | 4,073 | 780,482 | ||||||||||||
| Hong Kong | 114,285 | 39,536 | - | 153,821 | ||||||||||||
| Others | 18,986 | 5,733 | - | 24,719 | ||||||||||||
| Total revenues | 646,961 | 307,988 | 4,073 | 959,022 | ||||||||||||
| Noah Holdings Limited | ||||||||||||||||
| Supplement Revenue Information by Geography | ||||||||||||||||
(unaudited) | ||||||||||||||||
| Three months ended December 31, 2019 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: | ||||||||||||||||
| Mainland China | 324,935 | 173,100 | 57,379 | 555,414 | ||||||||||||
| Hong Kong | 135,164 | 28,480 | - | 163,644 | ||||||||||||
| Others | 70,545 | 3,640 | - | 74,185 | ||||||||||||
| Total revenues | 530,644 | 205,220 | 57,379 | 793,243 | ||||||||||||
23
| Noah Holdings Limited | ||||||||||||||||
| Supplement Revenue Information by Geography | ||||||||||||||||
(unaudited)
| ||||||||||||||||
| Twelve months ended December 31, 2020 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: | ||||||||||||||||
| Mainland China | 1,787,611 | 742,743 | 65,242 | 2,595,596 | ||||||||||||
| Hong Kong | 452,810 | 111,431 | - | 564,241 | ||||||||||||
| Others | 139,035 | 25,840 | - | 164,875 | ||||||||||||
| Total revenues | 2,379,456 | 880,014 | 65,242 | 3,324,712 | ||||||||||||
| Twelve months ended December 31, 2019 | ||||||||||||||||
| Wealth Management Business |
Asset Management Business |
Lending and Other Businesses |
Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: | ||||||||||||||||
| Mainland China | 1,494,742 | 676,837 | 295,772 | 2,467,351 | ||||||||||||
| Hong Kong | 633,168 | 99,957 | - | 733,125 | ||||||||||||
| Others | 201,943 | 10,757 | - | 212,700 | ||||||||||||
| Total revenues | 2,329,853 | 787,551 | 295,772 | 3,413,176 | ||||||||||||
24
| 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, | |||||||||||
| 2019 | 2020 | Change | ||||||||||
| RMB'000 | RMB'000 | |||||||||||
| Net income (loss) attributable to Noah shareholders | 102,793 | (1,573,507 | ) | N.A. | ||||||||
| Adjustment for share-based compensation | 20,977 | 9,041 | (56.9 | )% | ||||||||
| Add: settlement expense | - | 1,828,907 | N.A. | |||||||||
| Less: tax effect of adjustments | 5,039 | 1,985 | (60.6 | )%. | ||||||||
| Adjusted net income attributable to Noah shareholders (non-GAAP) | 118,731 | 262,456 | 121.1 | % | ||||||||
| Net margin attributable to Noah shareholders | 13.0 | % | (165.1 | )% | ||||||||
| Non-GAAP net margin attributable to Noah shareholders | 15.1 | % | 27.5 | % | ||||||||
| Net income (loss) attributable to Noah shareholders per ADS, diluted | 1.66 | (24.92 | ) | N.A. | ||||||||
| Non-GAAP net income attributable to Noah shareholders per ADS, diluted | 1.92 | 4.13 | 115.1 | % | ||||||||
6 Noah’s Non-GAAP financial measures reflect the respective most directly comparable GAAP financial measures excluding the effects of all forms of share-based compensation, non-recurring settlement expense and net of relevant tax impact, if any. Starting from this quarter, we have excluded the Non-GAAP adjustment related to fair value changes of equity securities (unrealized) and adjustment for sale of equity securities and their related tax impact because the impact of adopting ASU 2016-01 has been reflected in all periods presented. We have also revised the comparative period presentation to conform to current period measurement.
25
| 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 | |||||||||||
| 2019 | 2020 | Change | ||||||||||
| RMB'000 | RMB'000 | |||||||||||
| Net income (loss) attributable to Noah shareholders | 829,151 | (745,225 | ) | N.A. | ||||||||
| Adjustment for share-based compensation | 94,897 | 59,789 | (37.0 | )% | ||||||||
| Add: settlement expense | - | 1,828,907 | N.A. | |||||||||
| Less: tax effect of adjustments | 22,346 | 13,821 | (38.2 | )%. | ||||||||
| Adjusted net income attributable to Noah shareholders (non-GAAP) | 901,702 | 1,129,650 | 25.3 | % | ||||||||
| Net margin attributable to Noah shareholders | 24.4 | % | (22.5 | )% | ||||||||
| Non-GAAP net margin attributable to Noah shareholders | 26.6 | % | 34.2 | % | ||||||||
| Net income (loss) attributable to Noah shareholders per ADS, diluted | 13.42 | (12.01 | ) | N.A. | ||||||||
| Non-GAAP net income attributable to Noah shareholders per ADS, diluted | 14.59 | 18.12 | 24.2 | % | ||||||||
26