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

    Nov 11, 2019

    SHANGHAI, Nov. 11, 2019 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the third quarter of 2019.

    THIRD QUARTER 2019 FINANCIAL HIGHLIGHTS

  • Net revenues for the third quarter of 2019 were RMB842.0 million (US$117.8 million), a 0.4% increase from the corresponding period in 2018.
  • (RMB millions,

    except percentages)

    Q3 2018



    Q3 2019



    YoY Change

    Wealth management

    576.9



    542.4



    (6.0%)

    Asset management

    198.5



    240.4



    21.1%

    Lending and other businesses

    63.6



    59.2



    (6.9%)

    Total net revenues

    839.0



    842.0



    0.4%

  • Income from operations for the third quarter of 2019 was RMB234.3 million (US$32.8 million), a 13.6% decrease from the corresponding period in 2018.
  • (RMB millions,

    except percentages)

    Q3 2018



    Q3 2019



    YoY Change

    Wealth management

    169.2



    83.5



    (50.6%)

    Asset management

    101.7



    145.7



    43.3%

    Lending and other businesses

    0.2



    5.1



    2,450.0%

    Total income from operations

    271.1



    234.3



    (13.6%)

  • Net income attributable to Noah shareholders for the third quarter of 2019 was RMB191.6 million (US$26.8 million), a 7.8% decrease from the corresponding period in 2018.
  • Non-GAAP[1] net income attributable to Noah shareholders for the third quarter of 2019 was RMB353.7 million (US$49.5 million), a 23.7% increase from the corresponding period in 2018.
  • [1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation, fair value changes of equity securities (unrealized), adjustment for sale of equity securities and net of relevant tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

    THIRD QUARTER 2019 OPERATIONAL UPDATES

    Wealth Management Business

    The Company's wealth management business offers financial products and provides value-added services to high net worth clients in China and overseas. Noah primarily distributes private equity, public securities, credit and insurance products denominated in RMB and other currencies.

  • Total number of registered clients as of September 30, 2019 was 288,245, a 21.7% increase from September 30, 2018.
  • Total number of active clients[2] during the third quarter of 2019 was 3,409, a 17.0% decrease from the corresponding period in 2018.
  • Aggregate value of financial products distributed during the third quarter of 2019 was RMB13.0 billion (US$1.8 billion), a 53.7% decrease from the corresponding period in 2018, due to the fact that the Company is no longer offering single-counterparty credit products to clients.
  • Product type

    Three months ended September 30,


    2018


    2019


    (RMB in billions, except percentages)

    Credit products

    22.8


    81.4%


    1.5


    11.7%

    Private equity products

    3.3


    11.8%


    3.5


    26.8%

    Public securities products

    1.5


    5.4%


    7.5


    57.5%

    Other products

    0.4


    1.4%


    0.5


    4.0%

    All products

    28.0


    100.0%


    13.0


    100.0%

  • Average transaction value per active client[3] for the third quarter of 2019 was RMB3.8 million (US$0.5 million), a 44.3% decrease from the corresponding period in 2018.
  • Coverage network in mainland China included 307 service centers covering 81 cities as of September 30, 2019, compared with 306 service centers covering 83 cities as of June 30, 2019.
  • Number of relationship managers was 1,368 as of September 30, 2019, a 4.2% decrease from June 30, 2019, as the Company removed underperforming relationship managers as part of its operational streamlining efforts.
  • [2] "Active clients" for a given period refers to registered high net worth clients who purchase financial products distributed or provided by Noah during that given period.

    [3] "Average transaction value per active client" refers to the average value of financial products that were purchased by active clients during the period specified.

    Asset Management Business

    The Company's asset management business, Gopher Asset Management Co., Ltd. ("Gopher Asset Management"), is a leading alternative multi-asset manager in China also with international offices in Hong Kong, United States and Canada. Gopher Asset Management develops and manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies. 

  • Total assets under management as of September 30, 2019 were RMB176.5 billion (US$24.7 billion), a 2.4% decrease from June 30, 2019 due to the voluntary accelerated repayments of certain credit products and a 7.5% increase from September 30, 2018.
  • Investment type

    As of
    June 30,
    2019


    Growth


    Distribution/

    Redemption


    As of
    September 30,
    2019


    (RMB billions, except percentages)

    Private equity

    104.4


    57.7%


    2.0


    0.5


    105.9


    60.0%

    Credit

    40.6


    22.5%


    0.1


    7.3


    33.4


    19.0%

    Real estate

    19.1


    10.6%


    1.7


    2.1


    18.7


    10.6%

    Public securities[4]

    8.2


    4.5%


    1.6


    0.2


    9.6


    5.4%

    Multi-strategies

    8.5


    4.7%


    0.4


    -


    8.9


    5.0%

    All Investments

    180.8


    100.0%


    5.8


    10.1


    176.5


    100.0%


    [4] The distribution/redemption of public securities also includes market appreciation or depreciation.

    Lending and Other Businesses

    The Company's lending business utilizes an advanced risk-management system to assess and facilitate short-term loans to high quality borrowers, often secured with collateral. The total amount of loans originated during the third quarter of 2019 was RMB1.3 billion, compared with RMB4.0 billion in the corresponding period of 2018 as the Company reduced loan origination in response to market changes.

    Mr. Yi Zhao, Group President of Noah, said, "In response to the economic environment and our transformation strategy, we are no longer offering single-counterparty credit products to our clients, which is reflected in the decline of the credit product transaction value in the third quarter. Instead, we are focusing on satisfying our clients' fixed income investment needs with public securities products such as standardized NAV-based bond funds, mutual funds, etc. We believe the distribution of these new products will continue to ramp up and drive our transaction value growth in the future. Despite structural changes in our product mix, we still achieved resilient financial results. Moreover, we believe client confidence is gradually recovering and our standardized products will meet our clients' expectations. Looking ahead, in the face of a rapidly changing environment, Noah will continue to focus on implementing product transformation, expanding its overseas business and building up its comprehensive portfolio of services, in order to further enhance our financial platform to fully service high net worth clients."  

    THIRD QUARTER 2019 FINANCIAL RESULTS

    Net Revenues

    Net revenues for the third quarter of 2019 were RMB842.0 million (US$117.8 million), a 0.4% increase from the corresponding period in 2018, primarily driven by increased recurring service fee revenues and other service fees, and offset by decreased one-time commissions.

  • Wealth Management Business
    -
     Net revenues from one-time commissions for the third quarter of 2019 were RMB149.6 million (US$20.9 million), a 34.7% decrease from the corresponding period in 2018 due to a decrease in credit products distributed in third quarter of 2019.
    Net revenues from recurring service fees for the third quarter of 2019 were RMB318.9 million (US$44.6 million), a 4.6% increase from the corresponding period in 2018. 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 2019 were RMB4.3 million (US$0.6 million), a 64.4% decrease from the corresponding period of 2018, primarily due to a decrease in performance-based income from public securities products.
    - Net revenues from other service fees for the third quarter of 2019 were RMB69.6 million (US$9.7 million), an 124.6% increase from RMB31.0 million in the corresponding period in 2018, primarily due to the growth of various value-added services Noah offers to its high net worth clients.
  • Asset Management Business
    -
    Net revenues from recurring service fees for the third quarter of 2019 were RMB200.4 million (US$28.0 million), a 16.5% increase from the corresponding period in 2018. The increase was primarily due to the increase in assets under management and service fees income generated from voluntary accelerated repayments of certain credit products in the third quarter of 2019.
    - Net revenues from performance-based income for the third quarter of 2019 were RMB38.1 million (US$5.3 million), a 78.6% increase from the corresponding period in 2018, primarily due to an increase in performance-based income from certain real estate funds.
  • Lending and Other Businesses
    -
     Net revenues for the third quarter of 2019 were RMB59.2 million (US$8.3 million), a 6.9% decrease from the corresponding period in 2018, due to reduced loan origination in the second and third quarters of 2019.
  • Operating Costs and Expenses

    Operating costs and expenses for the third quarter of 2019 were RMB607.7 million (US$85.0 million), a 7.0% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB394.8 million (US$55.2 million), selling expenses of RMB83.6 million (US$11.7 million), general and administrative expenses of RMB104.5 million (US$14.6 million) and other operating expenses of RMB52.8 million (US$7.4 million).

  • Operating costs and expenses for the wealth management business for the third quarter of 2019 were RMB458.8 million (US$64.2 million), a 12.5% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits and legal fees.
  • Operating costs and expenses for the asset management business for the third quarter of 2019 were RMB94.8 million (US$13.3 million), a 2.1% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits.
  • Operating costs and expenses for the lending and other businesses for the third quarter of 2019 were RMB54.1 million (US$7.6 million), a 14.7% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits as employees under non-lending businesses were restructured since the beginning of 2019.
  • Operating Margin

    Operating margin for the third quarter of 2019 was 27.8%, compared with 32.3% for the corresponding period in 2018.

  • Operating margin for the wealth management business for the third quarter of 2019 was 15.4%, compared with 29.3% for the corresponding period in 2018, due to legal expenses incurred related to Camsing case.
  • Operating margin for the asset management business for the third quarter of 2019 was 60.6%, compared with 51.2% for the corresponding period in 2018.
  • Income from operations for the lending and other businesses for the third quarter of 2019 was RMB5.1 million (US$0.7 million), compared with RMB0.2 million in the corresponding period of 2018.
  • Investment Loss

    Investment Loss for the third quarter of 2019 was RMB48.4 million (US$6.8 million), compared with investment loss of RMB16.8 million for the corresponding period in 2018. The loss was primarily due to changes in fair value of equity securities and other investments.

    Income Tax Expenses

    Income tax expenses for the third quarter of 2019 were RMB44.7 million (US$6.3 million), a 27.6% decrease from the corresponding period in 2018, primarily due to lower taxable income. 

    Net Income

  • Net Income
    -
     Net income for the third quarter of 2019 was RMB203.8 million (US$28.5 million), which is largely unchanged compared to the corresponding period in 2018.
    Net margin for the third quarter of 2019 was 24.2%, down from 24.5% for the corresponding period in 2018.
    Net income attributable to Noah shareholders for the third quarter of 2019 was RMB191.6 million (US$26.8 million), a 7.8% decrease from the corresponding period in 2018.
    Net margin attributable to Noah shareholders for the third quarter of 2019 was 22.8%, down from 24.8% for the corresponding period in 2018.
    Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2019 was RMB3.13(US$0.44) and RMB3.10(US$0.43), respectively, compared with RMB3.51 and RMB3.41 respectively, for the corresponding period in 2018.
  • Non-GAAP Net Income Attributable to Noah Shareholders 
    -
     Non-GAAP net income attributable to Noah shareholders for the third quarter of 2019 was RMB353.7 million (US$49.5 million), a 23.7% increase from the corresponding period in 2018.
    - Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2019 was 42.0%, up from 34.1% for the corresponding period in 2018.
    - Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2019 was RMB5.73(US$0.80), up from RMB4.68 for the corresponding period in 2018.
  • Balance Sheet and Cash Flow

    As of September 30, 2019, the Company had RMB3,669.2 million (US$513.3 million) in cash and cash equivalents, compared with RMB2,360.1 million as of September 30, 2018 and RMB2,873.7 million as of June 30, 2019.

    Net cash inflow from the Company's operating activities during the third quarter of 2019 was RMB220.4 million (US$30.8 million), compared to net cash inflow of RMB449.8 million in the corresponding period in 2018. The decrease was mainly due to changes in working capital.

    Net cash inflow from the Company's investing activities during the third quarter of 2019 was RMB440.0 million (US$61.6 million), compared to net cash outflow of RMB203.6 million in the corresponding period in 2018. The cash inflow was primarily due to proceeds from the disposal of various investments.

    Net cash inflow from the Company's financing activities was RMB40.6 million (US$5.7 million) in the third quarter of 2019, compared to net cash outflow of RMB16.2 million in the corresponding period in 2018,  primarily due to the capital contribution by non-controlling shareholders of a consolidated subsidiary.

    OTHER COMPANY DEVELOPMENTS

    The Company also announced today that Mr. Grant Pan has been appointed as Chief Financial Officer, succeeding Mr. Shang Chuang who has decided to depart Noah for new professional pursuits, effective November 30, 2019.

    Mr. Pan brings over 17 years of experience to the CFO role in areas such as corporate finance and corporate strategy. He has been serving as COO for Noah's asset management business since 2017. Prior to joining Noah, Mr. Pan was an audit partner with a Big Four accounting firm and assisted a number of successful offerings of China-based companies in the global capital markets. Mr. Pan received his MBA and Master's Degree from Northeastern University in Boston, Massachusetts, and Bachelor's Degree from Beijing Foreign Studies University. He is a member of AICPA, CICPA and HKICPA.

    Ms. Jingbo Wang, Chairlady and CEO of Noah, commented, "Mr. Pan is an experienced veteran in the financial services industry and brings a blend of operational and strategic experience to our finance operations since joining our company. We are confident that his extensive experience with financial service firms will prove invaluable to our finance planning and execution after stepping into his new role. Meanwhile, we want to extend our warm appreciation to Shang for his services during the past eight years in various key roles of Noah. We respect his decision to return to Hong Kong to pursue new professional endeavors and sincerely wish him the best."

    2019 FORECAST

    The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2019 will be in the range of RMB1.0 billion to RMB1.1 billion, the mid-point of which representing an increase of 3.9% compared with the full year 2018. This forecast reflects management's current business outlook and is subject to further change.

    CONFERENCE CALL

    Senior management will host a combined English and Chinese language conference call to discuss the Company's third quarter 2019 unaudited financial results and recent business activities.

    The conference call may be accessed with the following details:

     

    Conference call details

    Date/Time:

     

    Monday, November 11, 2019 at 8:00 p.m., U.S. Eastern Time

    Tuesday, November 12, 2019 at 9:00 a.m., Hong Kong Time

    Dial in details:


    - United States Toll Free

    +1-866-311-7654

    - Mainland China Toll Free

    4001-201-203

    - Hong Kong Toll Free

    800-905-945

    - International

    +1-412-317-5227

    Conference Title:

    Noah Holdings Third Quarter 2019 Earnings Call

    Participant Password:

    Noah Holdings Limited

    A telephone replay will be available starting one hour after the end of the conference call until November 18, 2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10136399.

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


    DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES       

    In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation, fair value changes of equity investments (unrealized), adjustment for sale of equity securities and net of tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

    The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measures used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.

    When evaluating the Company's operating performance in the periods presented, management reviewed the foregoing non-GAAP net income attributable to Noah shareholders and per diluted ADS and non-GAAP net margin attributable to Noah shareholders to supplement U.S. GAAP financial data. As such, the Company's management believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management.  

    ABOUT NOAH HOLDINGS LIMITED

    Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on high net worth individuals. In the first nine months of 2019, Noah distributed RMB65.4 billion (US$9.5 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB176.5 billion (US$24.7 billion) as of September 30, 2019.

    Noah's wealth management business primarily distributes private equity, public securities, credit and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,368 relationship managers across 307 service centers in 81 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 288,245 registered clients as of September 30, 2019. As a leading alternative multi-asset manager in China, Gopher Asset Management manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies. The Company also provides lending services and other businesses, including online financial advisory platform and payment technology services.

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

    FOREIGN CURRENCY TRANSLATION

    In this announcement, the unaudited financial results for the third quarter of 2019 ended September 30, 2019 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.1477 to US$1.00, the effective noon buying rate for September 30, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

    SAFE HARBOR STATEMENT

    This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for 2019 and quotations from management in this announcement, as well as Noah's strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Noah's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah's actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; investment risks associated with financial products distributed to Noah's investors, including the risk of default by counterparties or loss of value due to market or business conditions or misconduct by counterparties; uncertainty regarding the outcome of the legal actions which are being or may be taken by the Company's affiliates in connection with the Camsing situation, including its ability to recoup amounts extended as financing to third parties and the risk of potential claims by investors; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.

    Contacts:

    Noah Holdings Limited
    Ryan Teng
    Tel: +86-21-8035-9221
    ir@noahgroup.com

    -- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

     

    Noah Holdings Limited

    Condensed Consolidated Balance Sheets

    (unaudited)



    As of


    June 30,


    September 30,


    September 30,


    2019


    2019


    2019


    RMB'000


    RMB'000


    USD'000

    Assets







    Current assets:








    Cash and cash equivalents

    2,873,740


    3,669,150


    513,333



    Restricted cash

    2,500


    2,500


    350



    Short-term investments

    747,710


    557,130


    77,945



    Accounts receivable

    292,971


    287,818


    40,267



    Loans receivable, net

    532,284


    541,703


    75,787



    Amounts due from related parties

    799,391


    666,584


    93,259



    Loans receivable from factoring business

    69,270


    60,000


    8,394



    Other current assets

    314,624


    298,403


    41,748



    Total current assets

    5,632,490


    6,083,288


    851,083









    Long-term investments

    1,141,506


    930,055


    130,119


    Investment in affiliates

    1,411,072


    1,289,296


    180,379


    Property and equipment, net

    315,788


    307,680


    43,046


    Operating lease right-of-use assets, net

    373,784


    367,873


    51,467


    Non-current deferred tax assets

    116,306


    126,914


    17,756


    Other non-current assets

    75,869


    79,654


    11,144

    Total Assets

    9,066,815


    9,184,760


    1,284,994







    Liabilities and Equity







    Current liabilities:








    Accrued payroll and welfare expenses

    461,099


    432,800


    60,551



    Income tax payable

    59,743


    96,668


    13,524



    Deferred revenues

    144,378


    192,614


    26,948



    Other current liabilities

    628,158


    333,132


    46,607



    Total current liabilities

    1,293,378


    1,055,214


    147,630


    Operating lease liabilities, non-current

    380,862


    370,845


    51,883


    Non-current deferred tax liabilities

    66,741


    65,314


    9,138


    Other non-current liabilities

    21,832


    11,952


    1,672


    Total Liabilities 

    1,762,813


    1,503,325


    210,323


    Equity

    7,304,002


    7,681,435


    1,074,671

    Total Liabilities and Equity

    9,066,815


    9,184,760


    1,284,994

     

     

    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,


    September  30,


    September  30,


    Change


    2018


    2019


    2019



    Revenues:

    RMB'000


    RMB'000


    USD'000



    Revenues from others:








    One-time commissions

    177,863


    129,786


    18,158


    (27.0%)

    Recurring service fees

    140,293


    135,201


    18,915


    (3.6%)

    Performance-based income

    12,215


    4,383


    613


    (64.1%)

    Other service fees

    98,802


    131,950


    18,460


    33.5%

    Total revenues from others

    429,173


    401,320


    56,146


    (6.5%)

    Revenues from funds Gopher
         manages:








    One-time commissions

    54,697


    21,137


    2,957


    (61.4%)

    Recurring service fees

    338,300


    386,381


    54,057


    14.2%

    Performance-based income

    21,411


    38,299


    5,358


    78.9%

    Total revenues from funds
         Gopher manages

    414,408


    445,817


    62,372


    7.6%

    Total revenues

    843,581


    847,137


    118,518


    0.4%

    Less: VAT related surcharges 

    (4,597)


    (5,150)


    (721)


    12.0%

    Net revenues

    838,984


    841,987


    117,797


    0.4%

    Operating costs and expenses:








    Compensation and benefits








    Relationship manager
    compensation

    (143,831)


    (148,572)


    (20,786)


    3.3%

    Others

    (241,269)


    (246,277)


    (34,456)


    2.1%

    Total compensation and
         benefits

    (385,100)


    (394,849)


    (55,242)


    2.5%

    Selling expenses

    (81,224)


    (83,592)


    (11,695)


    2.9%

    General and administrative
         expenses 

     

    (60,010)


     

    (104,450)


     

    (14,613)


    74.1%

    Other operating expenses 

    (51,106)


    (52,838)


    (7,392)


    3.4%

    Government grants 

    9,518


    28,049


    3,924


    194.7%

    Total operating costs and
         expenses 

     

    (567,922)


     

    (607,680)


     

    (85,018)


    7.0%

    Income from operations 

    271,062


    234,307


    32,779


    (13.6%)

    Other income (expense):








    Interest income 

    14,237


    13,774


    1,927


    (3.3%)

    Interest expenses

    1,156


    -


    -


    N.A.

    Investment loss

    (16,817)


    (48,405)


    (6,772)


    187.8%

    Other expense

    (1,836)


    (5,114)


    (715)


    178.5%

    Total other expense

    (3,260)


    (39,745)


    (5,560)


    1,119.2%

    Income before taxes and
         income from equity in
         affiliates

    267,802


    194,562


    27,219


    (27.3%)

    Income tax expense

    (61,804)


    (44,737)


    (6,259)


    (27.6%)

    Income (loss) from equity in
         affiliates

     

    (796)


     

    53,974


     

    7,551


     

    N.A.

    Net income

    205,202


    203,799


    28,511


    (0.7%)

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

     

     

    (2,506)


     

     

    12,201


     

     

    1,707


     

     

    N.A.

    Net income attributable to
         Noah shareholders 

    207,708


    191,598


    26,804


    (7.8%)









    Income per ADS, basic

    3.51


    3.13


    0.44


    (10.8%)

    Income per ADS, diluted

    3.41


    3.10


    0.43


    (9.1%)

     

    Margin analysis:








    Operating margin

    32.3%


    27.8%


    27.8%



    Net margin

    24.5%


    24.2%


    24.2%



     

    Weighted average ADS
         equivalent[1]:








    Basic

    59,172,524


    61,308,638


    61,308,638



    Diluted

    61,615,856


    61,759,161


    61,759,161



    ADS equivalent outstanding at
         end of period

     

    59,430,433


     

    61,480,292


     

    61,480,292












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

     

     

    Noah Holdings Limited

    Condensed Comprehensive Income Statements

    (unaudited)


    Three months ended 




    September 30,


    September 30,


    September 30,


    Change


    2018


    2019


    2019




    RMB'000


    RMB'000


    USD'000



    Net income

    205,202


    203,799


    28,513


    (0.7%)

    Other comprehensive income, net of tax:








    Foreign currency translation adjustments

    50,719


    119,641


    16,738


    135.9%

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

    (289)


    (3,191)


    (446)


    1,004.2%

    Comprehensive income

    255,632


    320,249


    44,805


    25.3%

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

    (2,634)


    12,052


    1,686


    N.A.

    Comprehensive income attributable to
    Noah
    shareholders

    258,266


    308,197


    43,119


    19.3%


     

     

    Noah Holdings Limited

    Supplemental Information

    (unaudited)


    As of




    September 30,
    2018


    September 30,
    2019


    Change







    Number of registered clients 

    236,906


    288,245


    21.7%

    Number of relationship managers 

    1,559


    1,368


    (12.3%)

    Number of cities in mainland China under
    coverage

    83


    81


    (2.4%)














    Three months ended




    September 30,
    2018


    September 30,
    2019


    Change


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

    Number of active clients

    4,108


    3,409


    (17.0%)

    Transaction value:






    Credit products

    22,775


    1,517


    (93.3%)

    Private equity products

    3,300


    3,477


    5.4%

    Public securities products

    1,490


    7,444


    399.6%

    Other products

    430


    513


    19.3%

    Total transaction value

    27,995


    12,951


    (53.7%)

    Average transaction value per active client

    6.81


    3.80


    (44.3%)

     

     

    Noah Holdings Limited

    Segment Condensed Income Statements

     (unaudited)


    Three months ended September 30, 2019


    Wealth
    Management

     Business


    Asset
    Management

    Business


    Other
    Financial
    Services
    Business


    Total


    RMB'000


    RMB'000


    RMB'000


    RMB'000









    Revenues:








    Revenues from others








    One-time commissions

    129,099


    687


    -


    129,786

    Recurring service fees

    133,825


    1,376


    -


    135,201

    Performance-based income

    4,346


    37


    -


    4,383

    Other service fees

    69,841


    1,197


    60,912


    131,950

    Total revenues from others

    337,111


    3,297


    60,912


    401,320

    Revenues from funds Gopher manages








    One-time commissions

    21,053


    84


    -


    21,137

    Recurring service fees

    186,251


    200,130


    -


    386,381

    Performance-based income

    -


    38,299


    -


    38,299

    Total revenues from funds Gopher
         manages 

    207,304


    238,513


    -


    445,817

    Total revenues

    544,415


    241,810


    60,912


    847,137

    Less: business taxes and related
         surcharges

    (2,067)


    (1,368)


    (1,715)


    (5,150)

    Net revenues

    542,348


    240,442


    59,197


    841,987

    Operating costs and expenses:








    Compensation and benefits








    Relationship managers

    (148,572)


    -


    -


    (148,572)

    Others

    (155,102)


    (66,914)


    (24,261)


    (246,277)

    Total compensation and benefits

    (303,674)


    (66,914)


    (24,261)


    (394,849)

    Selling expenses

    (69,563)


    (9,315)


    (4,714)


    (83,592)

    General and administrative
         expenses

    (77,370)


    (17,916)


    (9,164)


    (104,450)

    Other operating expenses

    (33,905)


    (2,947)


    (15,986)


    (52,838)

    Government grants

    25,740


    2,302


    7


    28,049

    Total operating costs and expenses

    (458,772)


    (94,790)


    (54,118)


    (607,680)

    Income from operations

    83,576


    145,652


    5,079


    234,307

     

     

    Noah Holdings Limited

    Segment Condensed Income Statements

    (unaudited)



    Three months ended September 30, 2018



    Wealth
    Management
    Business


    Asset
    Management
    Business


    Other
    Financial
    Services
    Business


    Total


    RMB'000


    RMB'000


    RMB'000


    RMB'000









    Revenues:








    Revenues from others








    One-time commissions

    177,305


    558


    -


    177,863

    Recurring service fees

    131,988


    8,305


    -


    140,293

    Performance-based income

    12,215


    -


    -


    12,215

    Other service fees

    31,133


    2,671


    64,998


    98,802

    Total revenues from others

    352,641


    11,534


    64,998


    429,173

    Revenues from funds Gopher
         manages








    One-time commissions

    52,758


    1,939


    -


    54,697

    Recurring service fees

    174,083


    164,217


    -


    338,300

    Performance-based income

    -


    21,411


    -


    21,411

    Total revenues from funds Gopher
         manages

    226,841


    187,567


    -


    414,408

    Total revenues

    579,482


    199,101


    64,998


    843,581

    Less: business taxes and related
         surcharges 

    (2,587)


    (630)


    (1,380)


    (4,597)

    Net revenues

    576,895


    198,471


    63,618


    838,984

    Operating costs and expenses:








    Compensation and benefits








    Relationship manager compensation

    (143,550)


    (10)


    (271)


    (143,831)

    Performance fee compensation

    -


    (5,975)


    -


    (5,975)

    Other compensations

    (142,420)


    (62,725)


    (30,149)


    (235,294)

    Total compensation and benefits

    (285,970)


    (68,710)


    (30,420)


    (385,100)

    Selling expenses

    (74,160)


    (3,747)


    (3,317)


    (81,224)

    General and administrative
         expenses 

    (34,092)


    (20,046)


    (5,872)


    (60,010)

    Other operating expenses

    (23,010)


    (4,258)


    (23,838)


    (51,106)

    Government grants 

    9,518


    -


    -


    9,518

    Total operating costs and expenses 

    (407,714)


    (96,761)


    (63,447)


    (567,922)

    Income from operations

    169,181


    101,710


    171


    271,062

     

     

    Noah Holdings Limited

    Supplement Revenue Information by Geography

     (unaudited)

     

    Three months ended September 30, 2019


    Wealth
    Management

     Business


    Asset
    Management

    Business


    Other
    Financial
    Services
    Business


    Total


    RMB'000


    RMB'000


    RMB'000


    RMB'000









    Revenues:








    Mainland China

    347,744


    212,137


    60,912


    620,793

    Hong Kong

    139,406


    26,829


    -


    166,235

    Others

    57,265


    2,844


    -


    60,109

    Total revenues

    544,415


    241,810


    60,912


    847,137



    Three months ended September 30, 2018


    Wealth
    Management

     Business


    Asset
    Management

    Business


    Other
    Financial
    Services
    Business


    Total


    RMB'000


    RMB'000


    RMB'000


    RMB'000









    Revenues:








    Mainland China

    445,416


    150,119


    64,998


    660,533

    Hong Kong

    133,347


    48,982


    -


    182,329

    Others

    719


    -


    -


    719

    Total revenues

    579,482


    199,101


    64,998


    843,581

     

     

    Noah Holdings Limited

    Reconciliation of GAAP to Non-GAAP Results

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

    (unaudited)[5]


    Three months ended





    September 30,


    September 30,


    Change



    2018


    2019





    RMB'000


    RMB'000











    Net income attributable to Noah shareholders

    207,708


    191,598


    (7.8%)


    Adjustment for share-based compensation

    35,647


    21,310


    (40.2%)


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

     

    (20,686)


     

    (6,047)


    (70.8%)


    Add: gains from sales of equity securities

    29,891


    139,816


    367.8%


    Less: tax effect of adjustments

    7,961


    5,059


    (36.5%)


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

    285,971


    353,712


    23.7%









    Net margin attributable to Noah shareholders

    24.8%


    22.8%




    Non-GAAP net margin attributable to Noah shareholders

    34.1%


    42.0%











    Net income attributable to Noah shareholders per ADS,
         diluted

    3.41


    3.10


    (9.1%)


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

    4.68


    5.73


    22.4%



    [5] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the
    effects of all forms of share-based compensation, fair value changes of equity securities (unrealized),
    adjustment for sale of equity securities and net of tax impact, if any.

     

     

    Cision View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-financial-results-for-the-third-quarter-of-2019-300955403.html

    SOURCE Noah Holdings Limited


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