Form 6-K

 

 

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 November 2017

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 the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            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):  ☐

 

 

 


SIGNATURES

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/ Shang-yan Chuang

  Shang-yan Chuang
    Chief Financial Officer

Date: November 21, 2017

 

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EXHIBIT INDEX

Exhibit 99.1 – Press Release

 

3


Exhibit 99.1

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR

THE THIRD QUARTER OF 2017

SHANGHAI, November 20, 2017 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the third quarter of 2017.

THIRD QUARTER 2017 FINANCIAL HIGHLIGHTS

 

    Net revenues for the third quarter of 2017 were RMB684.3 million (US$102.9 million), a 12.5% increase from the corresponding period in 2016.

 

(RMB millions,

except percentages)

   Q3 2016      Q3 2017      YoY Change  

Wealth management

     474.6        488.9        3.0

Asset management

     122.5        164.6        34.3

Internet financial services

     11.4        30.9        172.0
  

 

 

    

 

 

    

 

 

 

Total net revenues

     608.5        684.3        12.5
  

 

 

    

 

 

    

 

 

 

 

    Income from operations for the third quarter of 2017 was RMB160.3 million (US$24.1 million), a 1.3% decrease from the corresponding period in 2016.

 

(RMB millions,

except percentages)

   Q3 2016      Q3 2017      YoY Change  

Wealth management

     143.1        106.8        (25.3 %) 

Asset management

     62.4        77.5        24.3

Internet financial services

     (43.0      (24.0      (44.1 %) 
  

 

 

    

 

 

    

 

 

 

Total income from operations

     162.5        160.3        (1.3 %) 
  

 

 

    

 

 

    

 

 

 

 

    Net income attributable to Noah shareholders for the third quarter of 2017 was RMB185.9 million (US$27.9 million), a 19.8% increase from the corresponding period in 2016.

 

    Non-GAAP1 net income attributable to Noah shareholders for the third quarter of 2017 was RMB215.4 million (US$32.4 million), a 19.9% increase from the corresponding period in 2016.

THIRD QUARTER 2017 OPERATIONAL UPDATES

Wealth Management Business

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

 

    Total number of registered clients as of September 30, 2017 was 175,979, a 34.9% increase from September 30, 2016.

 

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.

 

4


    Total number of active clients2 during the third quarter of 2017 was 4,456, a 2.7% increase from September 30, 2016.

 

    Aggregate value of financial products distributed during the third quarter of 2017 was RMB23.5 billion (US$3.5 billion), a 1.5% decrease from the third quarter of 2016.

 

Product type    Three months ended September 30,  
     2016     2017  
     (RMB in billions, except percentages)  

Fixed income

     17.0        71.2     10.8        45.8

Private equity

     5.4        22.5     9.6        40.7

Secondary market equity

     1.0        4.3     3.1        13.2

Other products

     0.5        2.0     0.1        0.3
  

 

 

    

 

 

   

 

 

    

 

 

 

All products

     23.9        100.0     23.5        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

    Average transaction value per client3 for the third quarter of 2017 was RMB5.3 million (US$0.8 million), a 4.1% decrease from the corresponding period in 2016.

 

    Number of relationship managers was 1,286 as of September 30, 2017, a 2.1% increase from June 30, 2017 and a 17.4% increase from September 30, 2016.

Asset Management Business

Gopher Asset Management Co. Ltd. (“Gopher”), a wholly-owned subsidiary of the Company, is a leading alternative asset manager in China. Gopher develops and manages private equity, real estate, secondary market, credit and other investments denominated in both Renminbi and foreign currencies.

 

    Total assets under management as of September 30, 2017 were RMB142.9 billion (US$21.5 billion), a 3.0% increase from June 30, 2017 and a 24.4% increase from September 30, 2016.

 

Investment type    As of June 30,
2017
    Asset
Growth
     Asset
Expiration/
Redemption
     As of
September 30,
2017
 
     (RMB billions, except percentages)  

Real estate

     15.4        11.1     0.8        4.6        11.6        8.1

Private equity

     72.2        52.0     9.3        0.2        81.3        56.9

Secondary market

     6.9        4.9     0.1        1.0        6.0        4.2

Credit

     40.7        29.4     8.9        9.2        40.4        28.3

Other investments

     3.5        2.5     0.1        —          3.6        2.5
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

All Investments

     138.7        100.0     19.2        14.9        142.9        100.0
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Internet Financial Service Business

The Company’s Internet financial service business includes its online wealth management platform as well as micro-lending, payment processing and other online services.

Mr. Kenny Lam, Group President of Noah, said, “We delivered another quarter of solid operating and financial performance for our shareholders. In particular, we are quite pleased to see a higher share of equity-related products in the overall product mix, helping us improve our earnings quality, as evidenced by a much larger share of recurring and carry income received in the third quarter. We continue to successfully execute our global strategy, launching new products and overseas branches, and providing a wider range of comprehensive financial services for our high net worth and institutional clients alike.”

 

2  “Active clients” refers to registered clients who purchased financial products distributed by Noah during the period specified.
3  “Average transaction value per client” refers to the average value of financial products distributed by Noah that were purchased by active clients during the period specified.

 

5


THIRD QUARTER 2017 FINANCIAL RESULTS

Net Revenues

Net revenues for the third quarter of 2017 were RMB684.3 million (US$102.9 million), a 12.5% increase from the corresponding period in 2016, primarily driven by increased recurring service fee revenues and performance-based income.

 

    Wealth Management Business

 

    Net revenues from one-time commissions for the third quarter of 2017 were RMB211.3 million (US$31.8 million), a 24.3% decrease from the corresponding period in 2016, primarily due to a decline in sales of insurance products.

 

    Net revenues from recurring service fees for the third quarter of 2017 were RMB209.6 million (US$31.5 million), a 19.9% increase from the corresponding period in 2016. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.

 

    Net revenues from performance-based income for the third quarter of 2017 were RMB48.0 million (US$7.2 million), compared with RMB1.2 million in the corresponding period of 2016, primarily due to the realization of performance-based income from a real estate product distributed in previous periods.

 

    Net revenues from other service fees for the third quarter of 2017 were RMB19.9 million (US$3.0 million), a 2.6% increase from the corresponding period in 2016.

 

    Asset Management Business

 

    Net revenues from recurring service fees for the third quarter of 2017 were RMB132.9 million (US$20.0 million), a 12.0% increase from the corresponding period in 2016. The increase was primarily due to the increase in assets under management.

 

    Net revenues from performance-based income for the third quarter of 2017 were RMB26.3 million (US$4.0 million), compared with RMB3.5 million in the corresponding period of 2016, primarily due to the realization of performance-based income from a real estate project.

 

    Internet Financial Service Business

 

    Net revenues for the third quarter of 2017 were RMB30.9 million (US$4.6 million), a 172.0% increase from the corresponding period in 2016. The increase was primarily due to the growth in overall Internet financial services compared with the corresponding period of 2016.

Operating costs and expenses

Operating costs and expenses for the third quarter of 2017 were RMB524.0 million (US$78.8 million), a 17.5% increase from the corresponding period in 2016. Operating costs and expenses for the third quarter of 2017 primarily consisted of compensation and benefits of RMB356.2 million (US$53.5 million), selling expenses of RMB77.0 million (US$11.6 million), general and administrative expenses of RMB60.7 million (US$9.1 million) and other operating expenses of RMB35.3 million (US$5.3 million).

 

6


    Operating costs and expenses for the wealth management business for the third quarter of 2017 were RMB382.0 million (US$57.4 million), a 15.2% increase from the corresponding period in 2016, primarily due to an increase in relationship manager compensation, resulting from higher PE/VC product sales volume which have relatively higher commissions.

 

    Operating costs and expenses for the asset management business for the third quarter of 2017 were RMB87.0 million (US$13.1 million), a 44.8% increase from the corresponding period in 2016, primarily due to an increase in staff compensation.

 

    Operating costs and expenses for the Internet financial service business for the third quarter of 2017 were RMB54.9 million (US$8.3 million), a 1.1% increase from the corresponding period in 2016.

Operating Margin

Operating margin for the third quarter of 2017 was 23.4%, a decrease from 26.7% for the corresponding period in 2016. The decrease was mainly due to decreased government subsidies.

 

    Operating margin for the wealth management business for the third quarter of 2017 decreased to 21.9% from 30.1% for the corresponding period in 2016.

 

    Operating margin for the asset management business for the third quarter of 2017 was 47.1%, compared with 50.9% for the corresponding period in 2016.

 

    Operating loss for the Internet financial service business for the third quarter of 2017 was RMB24.0 million (US$3.6 million), down from RMB43.0 million for the corresponding period in 2016.

Income Tax Expenses

Income tax expenses for the third quarter of 2017 were RMB41.8 million (US$6.3 million), a 23.2% increase from the corresponding period in 2016. The increase was primarily due to higher taxable income and a higher effective tax rate.

Income from Equity in Affiliates

Income from equity in affiliates for the third quarter of 2017 was RMB45.7 million (US$6.9 million), compared with RMB5.1 million in the corresponding period in 2016. The increase was mainly due to the increased net asset value of the Company’s investments in the funds managed by Gopher as a general partner.

Net Income

 

    Net Income

 

    Net income for the third quarter of 2017 was RMB183.4 million (US$27.6 million), a 24.3% increase from the corresponding period in 2016.

 

    Net margin for the third quarter of 2017 was 26.8%, up from 24.3% for the corresponding period in 2016.

 

    Net income attributable to Noah shareholders for the third quarter of 2017 was RMB185.9 million (US$27.9 million), a 19.8% increase from the corresponding period in 2016.

 

7


    Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2017 was RMB3.28 (US$0.49) and RMB3.13 (US$0.47), respectively, up from RMB2.75 and RMB2.65 respectively, for the corresponding period in 2016.

 

    Non-GAAP Net Income Attributable to Noah Shareholders

 

    Non-GAAP net income attributable to Noah shareholders for the third quarter of 2017 was RMB215.4 million (US$32.4 million), a 19.9% increase from the corresponding period in 2016.

 

    Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2017 was 31.5%, up from 29.5% for the corresponding period in 2016.

 

    Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2017 was RMB3.62 (US$0.54), up from RMB3.05 for the corresponding period in 2016.

Balance Sheet and Cash Flow

As of September 30, 2017, the Company had RMB1,987.8 million (US$298.8 million) in cash and cash equivalents, compared with RMB2,003.5 million as of June 30, 2017 and RMB1,756.9 million as of September 30, 2016.

Net cash inflow from the Company’s operating activities during the third quarter of 2017 was RMB363.6 million (US$54.7 million), as a result of a positive profit earned from normal business operations and a decrease of receivables.

Net cash inflow from the Company’s investing activities during the third quarter of 2017 was RMB247.9, million (US$37.3 million), primarily due to the proceeds from sales of available-for-sale securities and matured factoring arrangements that are accounted for as secured borrowings.

Net cash outflow from the Company’s financing activities was RMB609.8 million (US$91.7 million) in the third quarter of 2017, primarily due to the decrease in mezzanine equity associated with the redemption of Sequoia’s investment in Gopher and payments of matured factoring arrangements that are accounted for as secured borrowings.

On July 8, 2017, the Company’s board of directors authorized a share repurchase program of up to US$50 million worth of its issued and outstanding ADSs over the course of one year. As of September 30, 2017, the Company had repurchased no ADS under this program.

2017 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2017 will be in the range of RMB825 million to RMB860 million, an increase of 14.1% to 18.9% compared with the full year of 2016. 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 third quarter 2017 unaudited financial results and recent business activities.

 

8


The conference call may be accessed with the following details:

Conference call details

 

Date/Time:   

Monday, November 20, 2017 at 8:00 p.m., U.S. Eastern Time

Tuesday, November 21, 2017 at 9:00 a.m., Hong Kong Time

Dial in details:   
- United States Toll Free    +1-866-311-7654
- Mainland China Toll Free    4001-201203
- Hong Kong Toll Free    800-905-945
- International    +1-412-317-5227
Conference Title:    Noah Holdings Limited Third quarter 2017 Earnings Call
Participant Password:    Noah Holdings

A telephone replay will be available starting one hour after the end of the conference call until November 27, 2017 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10114220.

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.noahwm.com.

 

9


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 attributable to Noah shareholders results reflecting adjustments to exclude the impact 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 attributable to Noah shareholders, non-GAAP net income attributable to Noah shareholders per diluted ADS and non-GAAP net margin attributable to Noah shareholders 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. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.

ABOUT NOAH HOLDINGS LIMITED

Founded in 2005, 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 first nine months of 2017, Noah distributed RMB89.2 billion (US$13.4 billion) of financial products. Through its wholly-owned subsidiary, Gopher Asset Management, Noah had assets under management of RMB142.9 billion (US$21.5 billion) as of September 30, 2017.

Noah’s wealth management business primarily distributes onshore and offshore fixed income products, private equity products, secondary market products and insurance products. Noah delivers customized financial solutions to clients through a network of 1,286 relationship managers across 222 branches and sub-branches in 78 cities in China, and serves the international investment needs of its clients through wholly owned subsidiaries in Hong Kong, Taiwan and the United States. The Company’s wealth management business had 175,979 registered clients as of September 30, 2017. As a leading alternative asset manager in China, Gopher Asset Management manages private equity, real estate, secondary market, credit and other investments denominated in both Renminbi and foreign currencies. The Company also provides Internet financial services, including online wealth management, micro-lending and payment processing services, etc.

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

FOREIGN CURRENCY TRANSLATION

In this announcement, the unaudited financial results for the quarter ended September 30, 2017 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 RMB6.6533 to US$1.00, the effective noon buying rate for September 30, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

10


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 2017 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 market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; 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.

Contacts:

Noah Holdings Limited

Steve Zeng

Noah Holdings Limited

Tel: +86-21-8035-9221

ir@noahwm.com

 

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

11


Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)

 

     June 30,
2017
     As of
September 30,
2017
     September 30,
2017
 
     RMB’000      RMB’000      USD’000  

Assets

        

Current assets:

        

Cash and cash equivalents

     2,003,529        1,987,798        298,769  

Restricted cash

     —          —          —    

Short-term investments (including short-term investments measured at fair value of RMB414,513 thousands and RMB363,692 thousands, as of June 30, 2017 and September 30, 2017, respectively)

     569,513        424,692        63,832  

Accounts receivable, net of allowance for doubtful accounts of nil at June 30, 2017 and September 30, 2017

     165,765        144,724        21,752  

Loans receivable

     295,923        401,229        60,305  

Amounts due from related parties

     723,124        701,756        105,475  

Loans receivable from factoring business

     570,769        440,794        66,252  

Other current assets

     78,510        238,830        35,896  
  

 

 

    

 

 

    

 

 

 

Total current assets

     4,407,133        4,339,823        652,281  

Long-term investments (including long-term investments measured at fair value of RMB113,559 thousands and RMB116,975 thousands, as of June 30, 2017 and September 30, 2017, respectively)

     687,967        690,747        103,820  

Investment in affiliates

     588,933        640,820        96,316  

Property and equipment, net

     252,803        248,090        37,288  

Non-current deferred tax assets

     52,332        52,083        7,828  

Other non-current assets

     81,720        104,438        15,700  
  

 

 

    

 

 

    

 

 

 

Total Assets

     6,070,888        6,076,001        913,233  
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

        

Current liabilities:

        

Accrued payroll and welfare expenses

     431,467        491,929        73,938  

Income tax payable

     52,118        70,051        10,529  

Amounts due to related parties

     12,273        273        41  

Deferred revenues

     177,279        211,861        31,843  

Loans payable from factoring business

     328,562        303,866        45,671  

Other current liabilities

     266,696        366,450        55,079  

Convertible notes

     542,344        498,998        75,000  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,810,739        1,943,428        292,101  

Non-current uncertain tax position liabilities

     4,437        4,424        665  

Other non-current liabilities

     100,322        71,807        10,793  
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     1,915,498        2,019,659        303,559  
  

 

 

    

 

 

    

 

 

 

Mezzanine Equity - Redeemable non-controlling Interest of Subsidiary

     337,481        —          —    

Equity

     3,817,909        4,056,342        609,674  
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     6,070,888        6,076,001        913,233  
  

 

 

    

 

 

    

 

 

 

 

12


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

     Three months ended        
     September 30,
2016
    September 30,
2017
    September 30,
2017
    Change  
     RMB’000     RMB’000     USD’000        

Revenues:

        

Revenues from third party

        

One-time commissions

     208,917       87,455       13,145       (58.1 %) 

Recurring service fees

     113,230       125,702       18,893       11.0

Performance-based income

     3,258       48,759       7,329       1396.6

Other service fees

     30,903       50,866       7,645       64.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     356,308       312,782       47,012       (12.2 %) 

Revenues from related party

        

One-time commissions

     72,276       125,598       18,878       73.8

Recurring service fees

     181,689       218,684       32,869       20.4

Performance-based income

     1,467       26,020       3,911       1673.7

Other service fees

     32       5,335       802       16571.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     255,464       375,637       56,460       47.0

Total revenues

     611,772       688,419       103,470       12.5

Less: business taxes and related surcharges

     (3,314     (4,106     (617     23.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     608,458       684,313       102,855       12.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (130,889     (158,310     (23,794     20.9

Other Compensations

     (187,514     (197,871     (29,740     5.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (318,403     (356,181     (53,534     11.9

Selling expenses

     (77,845     (76,967     (11,568     (1.1 %) 

General and administrative expenses

     (54,879     (60,738     (9,129     10.7

Other operating expenses

     (38,040     (35,330     (5,310     (7.1 %) 

Government subsidies

     43,172       5,234       787       (87.9 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (445,995     (523,982     (78,754     17.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     162,463       160,331       24,101       (1.3 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     11,836       12,962       1,948       9.5

Interest expenses

     (4,891     (4,728     (711     (3.3 %) 

Investment income

     4,503       11,271       1,694       150.3

Other (expense) income

     2,495       (290     (44     (111.6 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     13,943       19,215       2,887       37.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and income from equity in affiliates

     176,406       179,546       26,988       1.8

Income tax expense

     (33,974     (41,845     (6,289     23.2

Income from equity in affiliates

     5,134       45,712       6,871       790.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     147,566       183,413       27,570       24.3

Less: net loss attributable to non-controlling Interests

     (7,643     (2,136     (321     (72.1 %) 

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

     —         (333     (50     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah Shareholders

     155,209       185,882       27,941       19.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per ADS, basic

     2.75       3.28       0.49       19.3

Income per ADS, diluted

     2.65       3.13       0.47       18.1

Margin analysis:

        

Operating margin

     26.7     23.4     23.4  

Net margin

     24.3     26.8     26.8  

Weighted average ADS equivalent: [1]

        

Basic

     56,382,358       56,594,562       56,594,562    

Diluted

     60,444,632       60,749,462       60,749,462    

ADS equivalent outstanding at end of period

     56,432,189       56,704,721       56,704,721    

 

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

 

13


Condensed Comprehensive Income Statements

(unaudited)

 

     Three months ended        
     September 30,
2016
    September 30,
2017
    September 30,
2017
    Change  
     RMB’000     RMB’000     USD’000        

Net income

     147,566       183,413       27,570       24.3

Other comprehensive income, net of tax:

        

Foreign currency translation adjustments

     (627     (10,362     (1,557     1552.6

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

     10,327       4,930       741       (52.3 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     157,266       177,981       26,754       13.2

Less: Comprehensive loss attributable to non-controlling interests

     (7,683     (2,089     (314     (72.8 %) 

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

     —         (333     (50     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Noah Shareholders

     164,949       180,403       27,118       9.4
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Noah Holdings Limited

Supplemental Information

(unaudited)

 

     As of         
     September 30,
2016
     September 30,
2017
     Change  

Number of registered clients

     130,491        175,979        34.9

Number of relationship managers

     1,095        1,286        17.4

Number of cities under coverage

     71        78        9.9
     Three months ended         
     September 30,
2016
     September 30,
2017
     Change  
     (in millions of RMB, except number of active clients and
percentages)
 

Number of active clients

     4,337        4,456        2.7

Transaction value:

        

Fixed income products

     17,027        10,785        (36.7 %) 

Private equity products

     5,390        9,578        77.7

Secondary market equity products

     1,018        3,105        204.8

Other products

     470        79        (83.1 %) 
  

 

 

    

 

 

    

 

 

 

Total transaction value

     23,904        23,546        (1.5 %) 
  

 

 

    

 

 

    

 

 

 

Average transaction value per client

     5.51        5.28        (4.1 %) 

 

15


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended September 30, 2017        
     Wealth
Management
Business
    Asset
Management
Business
    Internet
Financial
Service
Business
    Total  
     RMB’000     RMB’000     RMB’000     RMB’000  

Revenues:

        

Revenues from third party

        

One-time commissions

     87,139       316       —         87,455  

Recurring service fees

     119,193       6,509       —         125,702  

Performance-based income

     48,349       410       —         48,759  

Other service fees

     19,991       4,974       25,901       50,866  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     274,672       12,209       25,901       312,782  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from related party

        

One-time commissions

     125,517       81       —         125,598  

Recurring service fees

     91,733       126,951       —         218,684  

Performance-based income

     —         26,020       —         26,020  

Other service fees

     —         —         5,335       5,335  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     217,250       153,052       5,335       375,637  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     491,922       165,261       31,236       688,419  

Less: business taxes and related surcharges

     (3,059     (709     (338     (4,106
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     488,863       164,552       30,898       684,313  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (157,561     —         (749     (158,310

Other compensation

     (116,828     (52,178     (28,865     (197,871
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (274,389     (52,178     (29,614     (356,181
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling expenses

     (69,769     (3,801     (3,397     (76,967

General and administrative expenses

     (26,216     (21,803     (12,719     (60,738

Other operating expenses

     (14,749     (11,403     (9,178     (35,330

Government subsidies

     3,097       2,137       —         5,234  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (382,026     (87,048     (54,908     (523,982
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     106,837       77,504       (24,010     160,331  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

16


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended September 30, 2016        
     Wealth
Management
Business
    Asset
Management
Business
    Internet
Financial
Service
Business
    Total  
     RMB’000     RMB’000     RMB’000     RMB’000  

Revenues:

        

Revenues from third party

        

One-time commissions

     208,687       230       —         208,917  

Recurring service fees

     99,738       13,492       —         113,230  

Performance-based income

     1,146       2,112       —         3,258  

Other service fees

     19,437       —         11,466       30,903  
  

 

 

   

 

 

   

 

 

   

 

 

 

Third party revenues

     329,008       15,834       11,466       356,308  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from related party

        

One-time commissions

     72,151       125       —         72,276  

Recurring service fees

     76,047       105,642       —         181,689  

Performance-based income

     57       1,410       —         1,467  

Other service fees

     32       —         —         32  
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

     148,287       107,177       —         255,464  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     477,295       123,011       11,466       611,772  

Less: business taxes and related surcharges

     (2,691     (514     (109     (3,314
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     474,604       122,497       11,357       608,458  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (128,869     (3     (2,017     (130,889

Other compensation

     (115,908     (38,530     (33,076     (187,514
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (244,777     (38,533     (35,093     (318,403

Selling expenses

     (70,124     (3,834     (3,887     (77,845

General and administrative expenses

     (26,742     (21,191     (6,946     (54,879

Other operating expenses

     (24,889     (4,743     (8,408     (38,040

Government subsidies

     34,992       8,180       —         43,172  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (331,540     (60,121     (54,334     (445,995
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     143,064       62,376       (42,977     162,463  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

17


Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)

 

     Three months ended        
     September 30,
2016
    September 30,
2017
    Change  
     RMB’000     RMB’000        

Net income attributable to Noah Shareholders

     155,209       185,882       19.8

Adjustment for share-based compensation related to:

      

Share options

     5,410       15,105       179.2

Restricted shares

     19,082       14,396       (24.6 %) 
  

 

 

   

 

 

   

 

 

 

Adjusted net income attributable to Noah Shareholders (non-GAAP)*

     179,701       215,383       19.9

Net margin

     24.3     26.8  

Adjusted net margin (non-GAAP)*

     28.3     31.1  

Net income attributable to Noah Shareholders per ADS, diluted

     2.65       3.13       18.1

Adjusted net income attributable to Noah Shareholders per ADS, diluted (non-GAAP)*

     3.05       3.62       18.7

 

* The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments.

 

18