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 May 2019

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: May 17, 2019

 

2


EXHIBIT INDEX

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED

FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2019

SHANGHAI, May 17, 2019 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on high net worth individuals, today announced its unaudited financial results for the first quarter of 2019.

FIRST QUARTER 2019 FINANCIAL HIGHLIGHTS

 

   

Net revenues for the first quarter of 2019 were RMB889.9 million (US$132.6 million), a 7.1% increase from the corresponding period in 2018.

 

(RMB millions,

except percentages)

   Q1 2018      Q1 2019      YoY Change  

Wealth management

     594.2        623.4        4.9

Asset management

     194.3        167.9        (13.6 %) 

Lending and other businesses

     42.4        98.6        132.6
  

 

 

    

 

 

    

 

 

 

Total net revenues

     830.9        889.9        7.1
  

 

 

    

 

 

    

 

 

 

 

   

Income from operations for the first quarter of 2019 was RMB302.5 million (US$45.1 million), a 10.2% increase from the corresponding period in 2018.

 

(RMB millions,

except percentages)

   Q1 2018      Q1 2019      YoY Change  

Wealth management

     184.0        189.5        3.0

Asset management

     109.4        67.8        (38.1 %) 

Lending and other businesses

     (18.9      45.2        N.A.  
  

 

 

    

 

 

    

 

 

 

Total income from operations

     274.5        302.5        10.2
  

 

 

    

 

 

    

 

 

 

 

   

Net income attributable to Noah shareholders for the first quarter of 2019 was RMB284.6 million (US$42.4 million), a 6.0% increase from the corresponding period in 2018.

 

   

Non-GAAP 1 net income attributable to Noah shareholders for the first quarter of 2019 was RMB304.6 million (US$45.4 million), a 19.9% increase from the corresponding period in 2018.

FIRST 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 credit, private equity, public securities and insurance products denominated in RMB and other currencies.

 

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.

 

1


   

Total number of registered clients as of March 31, 2019 was 274,893, a 39.6% increase from March 31, 2018.

 

   

Total number of active clients 2 during the first quarter of 2019 was 8,117, a 49.0% increase from the first quarter of 2018.

 

   

A ggregate value of financial products distributed during the first quarter of 2019 was RMB28.0 billion (US$4.2 billion), a 0.8% increase from the first quarter of 2018.

 

Product type    Three months ended March 31,  
     2018     2019  
     (RMB in billions, except percentages)  

Credit 3 products

     13.2        47.6     22.1        78.8

Private equity products

     6.3        22.6     1.3        4.8

Public securities 4 products

     7.9        28.2     3.2        11.4

Other products

     0.4        1.6     1.4        5.0
  

 

 

    

 

 

   

 

 

    

 

 

 

All products

     27.8        100.0     28.0        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

   

Average transaction value per active client 5 for the first quarter of 2019 was RMB3.5 million (US$0.5 million), a 32.3% decrease from the corresponding period in 2018.

 

   

Coverage network in mainland China included 313 service centers covering 83 cities as of March 31, 2019, up from 263 service centers covering 81 cities as of March 31, 2018 and unchanged from December 31, 2018.

 

   

Number of relationship managers was 1,496 as of March 31, 2019, a 7.9% increase from March 31, 2018, but a 5.5% decrease from December 31, 2018.

Asset Management Business

The Company’s asset management business, Gopher Asset Management, is a leading alternative multi-asset manager in China also with international offices in Hong Kong and the United States. 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 March 31, 2019 were RMB171.1 billion (US$25.5 billion), a 1.1% increase from December 31, 2018 and a 9.1% increase from March 31, 2018.

 

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  

“Credit products” was previously referred to as “fixed income” products.

4  

“Public securities products” refer to the financial products that invest in publicly traded securities, including stocks and bonds. This was previously referred to as “secondary market equity” financial products. Starting in January 2019, we included the transaction value of mutual fund products in the total transaction value.

5  

“Average transaction value per active client” refers to the average value of financial products that were purchased by active clients during the period specified.

 

2


Investment type    As of
December 31,
2018
    Asset
Growth
     Asset
Expiration/
Redemption
    As of
March 31,
2019
 
     (RMB billions, except percentages)  

Private equity

     100.2        59.2     2.1        1.2       101.1        59.1

Credit

     39.4        23.3     6.4        7.0       38.8        22.7

Real estate

     16.7        9.9     0.8        0.1       17.4        10.2

Public securities 4

     6.2        3.6     1.0         0.3 6       6.9        4.0

Multi-strategies 7

     6.7        4.0     0.3        0.1       6.9        4.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

All Investments

     169.2        100.0     10.6        8.7       171.1        100.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Lending and Other Businesses

The Company’s lending services 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 first quarter of 2019 was RMB2.5 billion, as compared with RMB2.1 billion for the corresponding period of 2018, representing an increase of 17.2%. Other businesses include an online financial advisory platform and payment technology services.

Mr. Yi Zhao, Group President of Noah, said, “We have been focusing on the enhancement of operating efficiency, and successfully delivered another quarter of solid financial results, especially reflected in the improvement of operating margin. We have noticed that after the recent market challenges, high net worth clients have become increasingly rational and sophisticated, and their investment appetite has been gradually recovering, which provides us with enhanced business growth opportunities.”

FIRST QUARTER 2019 FINANCIAL RESULTS

Net Revenues

Net revenues for the first quarter of 2019 were RMB889.9 million (US$132.6 million), a 7.1% increase from the corresponding period in 2018, primarily driven by increased recurring service fees and other service fees, partially offset by a decrease of performance-based income.

 

   

Wealth Management Business

 

   

Net revenues from one-time commissions for the first quarter of 2019 were RMB322.7 million (US$48.1 million), a 2.1% increase from the corresponding period in 2018, generally in line with the total amount of transaction value.

 

   

Net revenues from recurring service fees for the first quarter of 2019 were RMB256.2 million (US$38.2 million), a 5.4% 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 first quarter of 2019 were RMB1.2 million (US$0.2 million), compared with RMB20.0 million in the corresponding period of 2018. The decrease was primarily due to less performance-based income realized from public securities.

 

   

Net revenues from other service fees for the first quarter of 2019 were RMB43.3 million (US$6.4 million), compared with RMB14.9 million in the corresponding period in 2018, primarily due to the growth of the various value-added services Noah offers to its high net worth clients.

 

6  

The asset expiration/redemption of public securities also includes market appreciation or depreciation.

7  

“Multi-strategies” investments were previously referred to as “other investments”.

 

3


   

Asset Management Business

 

   

Net revenues from recurring service fees for the first quarter of 2019 were RMB162.7 million (US$24.2 million), a 6.4% increase from the corresponding period in 2018. The increase was primarily due to the increase in assets under management.

 

   

Net revenues from performance-based income for the first quarter of 2019 were RMB3.6 million (US$0.5 million), compared with RMB39.4 million in the corresponding period of 2018. The decrease was primarily due to less performance-based income realized from public securities.

 

   

Lending and Other Businesses

 

   

Net revenues for the first quarter of 2019 were RMB98.6 million (US$14.7 million), a 132.6% increase from the corresponding period in 2018. The increase was primarily due to the growth of loan origination and service fee income generated from loans originated in the previous periods.

Operating Costs and Expenses

Operating costs and expenses for the first quarter of 2019 were RMB587.4 million (US$87.5 million), a 5.6% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB404.3 million (US$60.2 million), selling expenses of RMB90.5 million (US$13.5 million), general and administrative expenses of RMB58.6 million (US$8.7 million) and other operating expenses of RMB50.8 million (US$7.6 million).

 

   

Operating costs and expenses for the wealth management business for the first quarter of 2019 were RMB433.9 million (US$64.7 million), a 5.8% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits partially offset by a decrease in marketing expenses.

 

   

Operating costs and expenses for the asset management business for the first quarter of 2019 were RMB100.1 million (US$14.9 million), a 17.9% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits.

 

   

Operating costs and expenses for lending and other businesses for the first quarter of 2019 were RMB53.4 million (US$8.0 million), a 12.9% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits as employees under non-lending businesses were restructured during the quarter.

Operating Margin

Operating margin for the first quarter of 2019 was 34.0%, an increase from 33.0% for the corresponding period in 2018.

 

   

Operating margin for the wealth management business for the first quarter of 2019 was 30.8%, compared with 31.0% for the corresponding period in 2018.

 

   

Operating margin for the asset management business for the first quarter of 2019 was 39.1%, compared with 56.3% for the corresponding period in 2018.

 

   

Income from operation for the lending and other businesses for the first quarter of 2019 was RMB45.2 million (US$6.7 million), compared with an operating loss of RMB18.9 million for the corresponding period in 2018.

 

4


Investment Income

Investment income for the first quarter of 2019 was RMB25.7 million (US$3.8 million), compared with RMB42.1 million for the corresponding period in 2018. The decrease was primarily related to the fluctuation of fair value of equity securities, which contributed RMB8.7 million (US$1.3 million) of investment income in the first quarter of 2019, as compared to RMB34.8 million investment income in the corresponding period of 2018.

Income Tax Expenses

Income tax expenses for the first quarter of 2019 were RMB79.5 million (US$11.8 million), a 7.9% increase from the corresponding period in 2018. The increase was primarily due to higher taxable income.

Net Income

 

   

Net Income

 

   

Net income for the first quarter of 2019 was RMB287.6 million (US$42.9 million), a 10.3% increase from the corresponding period in 2018.

 

   

Net margin for the first quarter of 2019 was 32.3%, up from 31.4% for the corresponding period in 2018.

 

   

Net income attributable to Noah shareholders for the first quarter of 2019 was RMB284.6 million (US$42.4 million), a 6.0% increase from the corresponding period in 2018.

 

   

Net income attributable to Noah shareholders per basic and diluted ADS for the first quarter of 2019 was RMB4.70 (US$0.70) and RMB4.57 (US$0.68), respectively, compared with RMB4.70 and RMB4.44 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 first quarter of 2019 was RMB304.6 million (US$45.4 million), a 19.9% increase from the corresponding period in 2018.

 

   

Non-GAAP net margin attributable to Noah shareholders for the first quarter of 2019 was 34.2%, up from 30.6% for the corresponding period in 2018.

 

   

Non-GAAP net income attributable to Noah shareholders per diluted ADS for the first quarter of 2019 was RMB4.90 (US$0.73), up from RMB4.21 for the corresponding period in 2018.

Balance Sheet and Cash Flow

As of March 31, 2019, the Company had RMB2,869.6 million (US$427.6 million) in cash and cash equivalents, compared with RMB2,704.1 million as of December 31, 2018 and RMB2,151.4 million as of March 31, 2018.

Net cash inflow from the Company’s operating activities during the first quarter of 2019 was RMB152.7 million (US$22.8 million), driven by profit earned from normal business operations and partially offset by working capital change.

Net cash outflow from the Company’s investing activities during the first quarter of 2019 was RMB67.5 million (US$10.1 million), primarily due to the increase in property and equipment and various investments and partially offset by proceeds from sales of loans.

Net cash inflow from the Company’s financing activities was RMB88.6 million (US$13.2 million) in the first quarter of 2019, primarily due to the capital contribution by non-controlling shareholders of a consolidated subsidiary.

 

5


2019 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2019 will be in the range of RMB1.13 billion to RMB1.18 billion, an increase of 11.9% to 16.8% compared with the full year 2018. This estimate reflects management’s current business outlook and is subject to change.

CONFERENCE CALL

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

The conference call may be accessed with the following details:

 

Conference call details
Date/Time:   

Thursday, May 16, 2019 at 8:00 p.m., U.S. Eastern Time

Friday, May 17, 2019 at 8:00 a.m., Hong Kong Time

Dial in details:   
- United States Toll Free    +1-888-317-6003
- Mainland China Toll Free    4001-206-115
- Hong Kong Toll Free    800-963-976
- International    +1-412-317-6061
Conference Title:    Noah Holdings First Quarter 2019 Earnings Call
Participant Entry No.:    1098879

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

A telephone replay will be available starting one hour after the end of the conference call until May 23, 2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10131248.

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

 

6


DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES    

In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. The Company also elected the package of practical expedients, which among other things, does not require reassessment of lease classification.

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 quarter of 2019, Noah distributed RMB28.0 billion (US$4.2 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB171.1 billion (US$25.5 billion) as of March 31, 2019.

Noah’s wealth management business primarily distributes credit, private equity, public securities and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,496 relationship managers across 313 service centers in 83 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company’s wealth management business had 274,893 registered clients as of March 31, 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 services including an online financial advisory platform and payment technology services.

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

 

7


FOREIGN CURRENCY TRANSLATION

In this announcement, the unaudited financial results for the first quarter of 2019 ended March 31, 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 RMB6.7112 to US$1.00, the effective noon buying rate for March 29, 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; 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

Eva Ma

Tel: +86-21-8035-9221

ir@noahgroup.com

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

8


Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)

 

     As of  
     December 31,
2018
     March 31,
2019
     March 31,
2019
 
     RMB’000      RMB’000      USD’000  

Assets

        

Current assets:

        

Cash and cash equivalents

     2,704,091        2,869,638        427,589  

Restricted cash

     2,500        2,500        373  

Short-term investments (including short-term investments measured at fair value of RMB438,077 thousands and RMB469,205 thousands, as of December 31, 2018 and March 31, 2019, respectively)

     450,477        501,646        74,748  

Accounts receivable, net of allowance for doubtful accounts of nil as of December 31, 2018 and March 31, 2019

     282,431        330,770        49,286  

Loans receivable, net

     620,219        507,650        75,642  

Amounts due from related parties

     572,201        664,305        98,985  

Loans receivable from factoring business

     18,893        14,010        2,088  

Other current assets

     453,269        476,160        70,950  
  

 

 

    

 

 

    

 

 

 

Total current assets

     5,104,081        5,366,679        799,661  

Long-term investments (including long-term investments measured at fair value of RMB609,151 thousands and RMB687,159 thousands, as of December 31, 2018 and March 31, 2019, respectively)

     1,025,065        1,056,387        157,407  

Investment in affiliates

     1,375,110        1,401,542        208,836  

Property and equipment, net

     346,653        332,570        49,554  

Operating lease right-of-use assets, net

     —          290,062        43,220  

Non-current deferred tax assets

     113,384        113,383        16,895  

Other non-current assets

     49,971        67,577        10,068  
  

 

 

    

 

 

    

 

 

 

Total Assets

     8,014,264        8,628,200        1,285,641  
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

        

Current liabilities:

        

Accrued payroll and welfare expenses

     671,200        727,796        108,445  

Income tax payable

     54,296        106,337        15,845  

Deferred revenues

     142,925        154,723        23,054  

Other current liabilities

     722,652        540,184        80,490  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,591,073        1,529,040        227,834  

Operating lease liabilities, non-current

     —          311,650        46,437  

Non-current deferred tax liabilities

     67,092        66,992        9,982  

Convertible notes

     145,004        —          —    

Other non-current liabilities

     35,718        28,638        4,267  
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     1,838,887        1,936,320        288,520  
  

 

 

    

 

 

    

 

 

 

Equity

     6,175,377        6,691,880        997,121  
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     8,014,264        8,628,200        1,285,641  
  

 

 

    

 

 

    

 

 

 

 

9


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

     Three months ended  
     March 31,     March 31,     March 31,     Change  
     2018     2019     2019    

 

 
     RMB’000     RMB’000     USD’000        

Revenues:

        

Revenues from others:

        

One-time commissions

     219,541       216,643       32,281       (1.3 %) 

Recurring service fees

     143,932       132,476       19,740       (8.0 %) 

Performance-based income

     20,657       1,094       163       (94.7 %) 

Other service fees

     59,989       145,377       21,662       142.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     444,119       495,590       73,846       11.6

Revenues from funds Gopher manages:

        

One-time commissions

     98,384       107,908       16,079       9.7

Recurring service fees

     254,067       288,156       42,937       13.4

Performance-based income

     39,048       3,758       560       (90.4 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     391,499       399,822       59,576       2.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     835,618       895,412       133,422       7.2

Less: VAT related surcharges

     (4,699     (5,528     (824     17.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     830,919       889,884       132,598       7.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (158,701     (167,268     (24,924     5.4

Performance fee compensation

     (6,200     (1,276     (190     (79.4 %) 

Other compensations

     (195,812     (235,761     (35,129     20.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (360,713     (404,305     (60,243     12.1

Selling expenses

     (106,259     (90,456     (13,478     (14.9 %) 

General and administrative expenses

     (55,929     (58,550     (8,724     4.7

Other operating expenses

     (37,963     (50,828     (7,574     33.9

Government subsidies

     4,488       16,780       2,500       273.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (556,376     (587,359     (87,519     5.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     274,543       302,525       45,079       10.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     22,867       23,123       3,445       1.1

Interest expenses

     (6,869     (430     (64     (93.7 %) 

Investment income

     42,132       25,663       3,824       (39.1 %) 

Other income (expense)

     1,163       (1,928     (287     (265.8 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     59,293       46,428       6,918       (21.7 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and income from equity in affiliates

     333,836       348,953       51,997       4.5

Income tax expense

     (73,662     (79,492     (11,845     7.9

Income from equity in affiliates

     652       18,123       2,700       2,679.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     260,826       287,584       42,852       10.3

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

     (7,639     3,007       448       N.A.  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah shareholders

     268,465       284,577       42,404       6.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per ADS, basic

     4.70       4.70       0.70       —    

Income per ADS, diluted

     4.44       4.57       0.68       2.9

Margin analysis:

        

Operating margin

     33.0     34.0     34.0  

Net margin

     31.4     32.3     32.3  

Weighted average ADS equivalent [1] :

        

Basic

     57,166,048       60,570,704       60,570,704    

Diluted

     61,384,898       62,355,964       62,355,964    

ADS equivalent outstanding at end of period

     57,225,760       61,180,845       61,180,845    

 

[1]

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

 

10


Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

     Three months ended  
     March 31,
2018
    March 31,
2019
    March 31,
2019
    Change  
     RMB’000     RMB’000     USD’000        

Net income

     260,826       287,584       42,851       10.3

Other comprehensive income, net of tax:

        

Foreign currency translation adjustments

     (34,863     (30,858     (4,598     (11.5 %) 

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

     1,376       74       11       (94.6 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     227,339       256,800       38,264       13.0

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

     (7,579     3,217       479       N.A.  
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Noah shareholders

     234,918       253,583       37,785       7.9
  

 

 

   

 

 

   

 

 

   

 

 

 

 

11


Noah Holdings Limited

Supplemental Information

(unaudited)

 

     As of         
     March 31,
2018
     March 31,
2019
     Change  

Number of registered clients

     196,927        274,893        39.6

Number of relationship managers

     1,386        1,496        7.9

Number of cities under coverage in mainland China

     81        83        2.5
     Three months ended         
     March 31,
2018
     March 31,
2019
     Change  
     (in millions of RMB, except number of active clients and
percentages)
 

Number of active clients

     5,449        8,117        49.0

Transaction value:

        

Credit products

     13,247        22,101        66.8

Private equity products

     6,279        1,333        (78.8 %) 

Public securities products

     7,854        3,205        (59.2 %) 

Other products

     433        1,401        223.5
  

 

 

    

 

 

    

 

 

 

Total transaction value

     27,813        28,040        0.8

Average transaction value per active client

     5.10        3.45        (32.3 %) 

 

12


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended March 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

     216,180       463       —         216,643  

Recurring service fees

     131,618       858       —         132,476  

Performance-based income

     1,094       —         —         1,094  

Other service fees

     43,445       1,166       100,766       145,377  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     392,337       2,487       100,766       495,590  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from funds Gopher manages:

        

One-time commissions

     107,908       —         —         107,908  

Recurring service fees

     125,751       162,405       —         288,156  

Performance-based income

     97       3,661       —         3,758  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     233,756       166,066       —         399,822  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     626,093       168,553       100,766       895,412  

Less: VAT related surcharges

     (2,730     (628     (2,170     (5,528
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     623,363       167,925       98,596       889,884  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (167,125     —         (143     (167,268

Performance fee compensation

     —         (1,276     —         (1,276

Other compensations

     (146,458     (63,936     (25,367     (235,761
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (313,583     (65,212     (25,510     (404,305

Selling expenses

     (83,114     (3,903     (3,439     (90,456

General and administrative expenses

     (37,336     (15,261     (5,953     (58,550

Other operating expenses

     (15,086     (17,266     (18,476     (50,828

Government subsidies

     15,218       1,562       —         16,780  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (433,901     (100,080     (53,378     (587,359
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     189,462       67,845       45,218       302,525  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended March 31, 2018  
     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

     219,283       258       —         219,541  

Recurring service fees

     141,329       2,603       —         143,932  

Performance-based income

     20,126       531       —         20,657  

Other service fees

     14,993       1,791       43,205       59,989  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     395,731       5,183       43,205       444,119  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from funds Gopher manages:

        

One-time commissions

     98,318       66       —         98,384  

Recurring service fees

     103,069       150,998       —         254,067  

Performance-based income

     —         39,048       —         39,048  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     201,387       190,112       —         391,499  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     597,118       195,295       43,205       835,618  

Less: VAT related surcharges

     (2,936     (944     (819     (4,699
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     594,182       194,351       42,386       830,919  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (157,926     —         (775     (158,701

Performance fee compensation

     —         (6,200     —         (6,200

Other compensations

     (118,761     (45,143     (31,908     (195,812
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (276,687     (51,343     (32,683     (360,713

Selling expenses

     (91,314     (5,814     (9,131     (106,259

General and administrative expenses

     (36,716     (13,754     (5,459     (55,929

Other operating expenses

     (8,295     (14,605     (15,063     (37,963

Government subsidies

     2,808       640       1,040       4,488  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (410,204     (84,876     (61,296     (556,376
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     183,978       109,475       (18,910     274,543  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Noah Holdings Limited

Supplement Revenue Information for Segment

(unaudited)

 

     Three months ended March 31, 2019  
     Wealth
Management
Business
     Asset
Management
Business
     Lending
and Other
Businesses
     Total  
     RMB’000      RMB’000      RMB’000      RMB’000  

Revenues:

           

Mainland China

     401,523        145,608        100,766        647,897  

Hong Kong

     180,596        20,943        —          201,539  

Others

     43,974        2,002        —          45,976  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     626,093        168,553        100,766        895,412  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     Three months ended March 31, 2018  
     Wealth
Management
Business
     Asset
Management
Business
     Lending
and Other
Businesses
     Total  
     RMB’000      RMB’000      RMB’000      RMB’000  

Revenues:

           

Mainland China

     463,431        150,429        43,205        657,065  

Hong Kong

     133,687        44,866        —          178,553  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     597,118        195,295        43,205        835,618  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

15


Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)  8

 

     Three months ended  
     March 31,
2018
    March 31,
2019
    Change  
     RMB’000     RMB’000        

Net income attributable to Noah shareholders

     268,465       284,577       6.0

Adjustment for share-based compensation related to:

      

Share options

     12,210       13,413       9.9

Restricted shares

     10,491       16,203       54.4

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

     34,788       8,742       (74.9 %) 

Add: gains from sales of equity securities (realized)

     —         4,885       N.A.  

Less: Tax effect of adjustments

     2,283       5,714       150.3
  

 

 

   

 

 

   

 

 

 

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

     254,095       304,622       19.9

Net margin attributable to Noah shareholders

     32.3     32.0  

Non-GAAP net margin attributable to Noah shareholders

     30.6     34.2  

Net income attributable to Noah shareholders per ADS, diluted

     4.44       4.57       2.9

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

     4.21       4.90       16.4

 

8  

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.

 

16

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