Report of Foreign Issuer (6-k)

Date : 08/29/2019 @ 10:03AM
Source : Edgar (US Regulatory)
Stock : Noah Holdings Limited (NOAH)
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Report of Foreign Issuer (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 August 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: August 29, 2019

 

2


EXHIBIT INDEX

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED

FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2019

SHANGHAI, August 29, 2019 — 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 second quarter of 2019.

SECOND QUARTER 2019 FINANCIAL HIGHLIGHTS

 

   

Net revenues for the second quarter of 2019 were RMB871.6 million (US$127.0 million), a 9.3% increase from the corresponding period in 2018.

 

(RMB millions, except percentages)    Q2 2018      Q2 2019      YoY Change  

Wealth management

     556.5        625.6        12.4%  

Asset management

     195.5        171.1        (12.5%)  

Lending and other businesses

     45.6        74.9        64.1%  
  

 

 

    

 

 

    

 

 

 

Total net revenues

     797.6        871.6        9.3%  
  

 

 

    

 

 

    

 

 

 

 

   

Income from operations for the second quarter of 2019 was RMB251.9 million (US$36.7 million), a 13.9% increase from the corresponding period in 2018.

 

(RMB millions, except percentages)    Q2 2018      Q2 2019      YoY Change  

Wealth management

     135.7        129.9        (4.3%)  

Asset management

     100.7        86.8        (13.8%)  

Lending and other businesses

     (15.1      35.2        N.A.  
  

 

 

    

 

 

    

 

 

 

Total income from operations

     221.3        251.9        13.9%  
  

 

 

    

 

 

    

 

 

 

 

   

Net income attributable to Noah shareholders for the second quarter of 2019 was RMB250.2 million (US$36.4 million), a 39.4% increase from the corresponding period in 2018.

 

   

Non-GAAP1 net income attributable to Noah shareholders for the second quarter of 2019 was RMB263.4 million (US$38.4 million), a 6.4% increase from the corresponding period in 2018.

SECOND 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 June 30, 2019 was 283,655, a 28.6% increase from June 30, 2018.

 

   

Total number of active clients2 during the second quarter of 2019 was 5,882, a 31.9% increase from June 30, 2018.

 

   

Aggregate value of financial products distributed during the second quarter of 2019 was RMB24.4 billion (US$3.5 billion), a 16.2% decrease from the second quarter of 2018.

 

     Three months ended June 30,  
     2018      2019  
Product type    (RMB in billions, except percentages)  

Credit products

     19.3        66.3%        9.8        40.0%  

Private equity products

     6.3        21.6%        7.7        31.5%  

Public securities3 products

     2.8        9.7%        6.0        24.7%  

Other products

     0.7        2.4%        0.9        3.8%  
  

 

 

    

 

 

    

 

 

    

 

 

 

All products

     29.1        100.0%        24.4        100.0%  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

   

Average transaction value per active client4 for the second quarter of 2019 was RMB4.1 million (US$0.6 million), a 36.4% decrease from the corresponding period in 2018.

 

   

Coverage network in mainland China included 306 service centers covering 83 cities as of June 30, 2019, up from 287 service centers covering 81 cities as of June 30, 2018.

 

   

Number of relationship managers was 1,428 as of June 30, 2019, a 4.5% decrease from June 30, 2018.

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 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 June 30, 2019 were RMB180.8 billion (US$26.3 billion), a 5.7% increase from March 31, 2019 and an 11.9% increase from June 30, 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 

“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.

4 

“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
March 31,
2019
     Growth
     Distribution/
Redemption
    As of
June 30,
2019
 
     (RMB billions, except percentages)  

Private equity

     101.1        59.1%        4.7        1.4       104.4        57.7%  

Credit

     38.8        22.7%        3.7        1.9       40.6        22.5%  

Real estate

     17.4        10.2%        2.7        1.0       19.1        10.6%  

Public securities

     6.9        4.0%        2.2         0.9 5      8.2        4.5%  

Multi-strategies

     6.9        4.0%        1.6        —         8.5        4.7%  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

All Investments

     171.1        100.0%        14.9        5.2       180.8        100.0%  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Lending and Other Businesses

The Company’s lending business utilizes an advanced risk-management system to assess and facilitate short-term loans to high quality borrowers, often secured with collateral. The total amount of loans originated during the second quarter of 2019 was RMB2.8 billion, a decrease of 12.5% from the corresponding period of 2018. Other businesses include an online financial advisory platform and payment technology services.

Mr. Yi Zhao, Group President of Noah, said, “We are facing a stringent macro-economic situation in 2019, with the downturn of China’s credit cycle coinciding with geo-political tensions. This has led to short-term headwinds in our business. These challenges further solidify our dedication to transforming our credit business to NAV-based portfolios and strengthening our investment capabilities. We remain confident in the growth potential of both the wealth management and asset management industries in China, and believe we will benefit by executing the Company’s long-term strategy of serving Chinese high net worth clients with high-quality financial products and comprehensive services globally.”

SECOND QUARTER 2019 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2019 were RMB871.6 million (US$127.0 million), a 9.3% increase from the corresponding period in 2018, primarily driven by increased one-time commissions and other service fees, and partially offset by decreased performance-based income.

 

   

Wealth Management Business

 

   

Net revenues from one-time commissions for the second quarter of 2019 were RMB293.2 million (US$42.7 million), a 25.9% increase from the corresponding period in 2018, primarily due to sales of products with higher one-time commission rates.

 

   

Net revenues from recurring service fees for the second quarter of 2019 were RMB268.7 million (US$39.1 million), a 5.5% decrease from the corresponding period in 2018, mainly due to the maturity of certain products previously distributed with higher recurring fee rates.

 

   

Net revenues from performance-based income for the second quarter of 2019 were RMB2.0 million (US$0.3 million), compared with RMB11.8 million in 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 second quarter of 2019 were RMB61.7 million (US$9.0 million), an increase from RMB27.5 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.

 

5 

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

 

3


   

Asset Management Business

 

   

Net revenues from recurring service fees for the second quarter of 2019 were RMB163.9 million (US$23.9 million), relatively flat compared with the corresponding period in 2018.

 

   

Net revenues from performance-based income for the second quarter of 2019 were RMB5.6 million (US$0.8 million), compared with RMB27.3 million in the corresponding period of 2018, primarily due to a decrease in performance-based income from real estate products.

 

   

Lending and Other Businesses

 

   

Net revenues for the second quarter of 2019 were RMB74.9 million (US$10.9 million), a 64.1% increase from the corresponding period in 2018. The increase was primarily due to the service fee income generated from loans originated in the previous periods.

Operating Costs and Expenses

Operating costs and expenses for the second quarter of 2019 were RMB619.7 million (US$90.3 million), a 7.5% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB437.5 million (US$63.7 million), selling expenses of RMB79.6 million (US$11.6 million), general and administrative expenses of RMB84.2 million (US$12.3 million) and other operating expenses of RMB51.1 million (US$7.4 million).

 

   

Operating costs and expenses for the wealth management business for the second quarter of 2019 were RMB495.8 million (US$72.2 million), a 17.8% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits and provision of doubtful accounts.

 

   

Operating costs and expenses for the asset management business for the second quarter of 2019 were RMB84.3 million (US$12.3 million), an 11.2% decrease from the corresponding period in 2018, primarily due to a decrease in general and administrative expenses.

 

   

Operating costs and expenses for the lending and other businesses for the second quarter of 2019 were RMB39.7 million (US$5.8 million), a 34.6% 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 second quarter of 2019 was 28.9%, increased from 27.7% for the corresponding period in 2018.

 

   

Operating margin for the wealth management business for the second quarter of 2019 was 20.8%, compared with 24.4% for the corresponding period in 2018.

 

   

Operating margin for the asset management business for the second quarter of 2019 was 50.8%, compared with 51.5% for the corresponding period in 2018.

 

   

Income from operation for the lending and other businesses for the second quarter of 2019 was RMB35.2 million (US$5.1 million), compared with an operating loss of RMB15.1 million for the corresponding period in 2018.

Investment Income

Investment income for the second quarter of 2019 was RMB11.8 million (US$1.7 million), compared with RMB16.8 million for the corresponding period in 2018.

 

4


Income Tax Expenses

Income tax expenses for the second quarter of 2019 were RMB67.6 million (US$9.9 million), a 17.3% increase from the corresponding period in 2018, primarily due to higher taxable income.

Net Income

 

   

Net Income

 

   

Net income for the second quarter of 2019 was RMB254.4 million (US$37.1 million), a 36.5% increase from the corresponding period in 2018.

 

   

Net margin for the second quarter of 2019 was 29.2%, up from 23.4% for the corresponding period in 2018.

 

   

Net income attributable to Noah shareholders for the second quarter of 2019 was RMB250.2 million (US$36.4 million), a 39.4% increase from the corresponding period in 2018.

 

   

Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2019 was RMB4.09 (US$0.60) and RMB4.04 (US$0.59), respectively, up from RMB3.13 and RMB3.00 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 second quarter of 2019 was RMB263.4 million (US$38.4 million), a 6.4% increase from the corresponding period in 2018.

 

   

Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2019 was 30.2%, compared with 31.0% for the corresponding period in 2018.

 

   

Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2019 was RMB4.25 (US$0.62), up from RMB4.12 for the corresponding period in 2018.

Balance Sheet and Cash Flow

As of June 30, 2019, the Company had RMB2,873.7 million (US$418.6 million) in cash and cash equivalents, compared with RMB2,869.6 million as of March 31, 2019 and RMB2,094.8 million as of June 30, 2018.

Net cash inflow from the Company’s operating activities during the second quarter of 2019 was RMB72.6 million (US$10.6 million), driven by profit earned from normal business operations and partially offset by payment of employee annual bonuses in the second quarter.

Net cash outflow from the Company’s investing activities during the second quarter of 2019 was RMB370.6 million (US$54.0 million), primarily due to various short-term investments made in the second quarter.

Net cash inflow from the Company’s financing activities was RMB277.8 million (US$40.5 million) in the second quarter of 2019, primarily due to capital contributions from non-controlling shareholders of a consolidated subsidiary.

UPDATE ON CREDIT FUNDS

As previously announced on July 8, 2019, certain credit funds managed by an affiliate of Gopher Asset Management provided supply chain financing involving companies related to Camsing International Holding Limited (“Camsing”). It is suspected that fraud has been committed by certain counterparties involved in such financings. Media in China has reported that a number of individuals were arrested due to these suspected fraudulent activities. The relevant criminal investigation is ongoing. Gopher Asset Management is assisting police and other government authorities in their investigation, and is pursuing all available actions, including filing civil litigation against the relevant debtor and guarantors, to protect the interests of the Company’s fund investors and to recover assets.

 

5


2019 FORECAST

In consideration of the macro-economic conditions in China, ongoing geo-political tensions, as well as the expected short-term impact resulting from the Camsing incident, the Company is updating its full year 2019 guidance. 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 updated forecast represents a change from the Company’s previous guidance of a full year non-GAAP net income attributable to Noah shareholders in the range of RMB1.13 billion to RMB1.18 billion, and 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 second quarter 2019 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details
Date/Time:   

Wednesday, Aug 28, 2019 at 8:00 p.m., U.S. Eastern Time

Thursday, Aug 29, 2019 at 8:00 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 Second 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 September 4, 2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10134397.

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 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 half of 2019, Noah distributed RMB52.4 billion (US$7.6 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB180.8 billion (US$26.3 billion) as of June 30, 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 1,428 relationship managers across 306 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 283,655 registered clients as of June 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 second quarter of 2019 ended June 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 RMB6.8650 to US$1.00, the effective noon buying rate for June 28, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

7


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

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  
     March 31,      June 30,      June 30,  
     2019      2019      2019  
     RMB’000      RMB’000      USD’000  

Assets

        

Current assets:

        

Cash and cash equivalents

     2,869,638        2,873,740        418,607  

Restricted cash

     2,500        2,500        364  

Short-term investments

     501,646        747,710        108,916  

Accounts receivable

     330,770        292,971        42,676  

Loans receivable

     507,650        532,284        77,536  

Amounts due from related parties

     664,305        799,391        116,444  

Loans receivable from factoring business

     14,010        69,270        10,090  

Other current assets

     476,160        314,624        45,830  
  

 

 

    

 

 

    

 

 

 

Total current assets

     5,366,679        5,632,490        820,463  
  

 

 

    

 

 

    

 

 

 

Long-term investments

     1,056,387        1,141,506        166,279  

Investment in affiliates

     1,401,542        1,411,072        205,546  

Property and equipment, net

     332,570        315,788        46,000  

Operating lease right-of-use assets, net

     290,062        373,784        54,448  

Non-current deferred tax assets

     113,383        116,306        16,942  

Other non-current assets

     67,577        75,869        11,052  
  

 

 

    

 

 

    

 

 

 

Total Assets

     8,628,200        9,066,815        1,320,730  
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

        

Current liabilities:

        

Accrued payroll and welfare expenses

     727,796        461,099        67,167  

Income tax payable

     106,337        59,743        8,703  

Deferred revenues

     154,723        144,378        21,031  

Other current liabilities

     540,184        628,158        91,502  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,529,040        1,293,378        188,403  
  

 

 

    

 

 

    

 

 

 

Operating lease liabilities, non-current

     311,650        380,862        55,479  

Non-current deferred tax liabilities

     66,992        66,741        9,722  

Other non-current liabilities

     28,638        21,832        3,180  
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     1,936,320        1,762,813        256,784  
  

 

 

    

 

 

    

 

 

 

Equity

     6,691,880        7,304,002        1,063,946  
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     8,628,200        9,066,815        1,320,730  
  

 

 

    

 

 

    

 

 

 

 

9


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

     Three months ended  
     June 30,     June 30,     June 30,     Change  
     2018     2019     2019    

 

 
     RMB’000     RMB’000     USD’000        

Revenues:

        

Revenues from others:

        

One-time commissions

     161,791       193,937       28,250       19.9%  

Recurring service fees

     167,196       131,164       19,106       (21.6%

Performance-based income

     10,082       2,051       299       (79.7%

Other service fees

     76,883       139,940       20,385       82.0%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     415,952       467,092       68,040       12.3%  

Revenues from funds Gopher manages:

        

One-time commissions

     72,805       101,104       14,727       38.9%  

Recurring service fees

     284,389       303,578       44,221       6.7%  

Performance-based income

     29,213       5,610       817       (80.8%
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     386,407       410,292       59,765       6.2%  

Total revenues

     802,359       877,384       127,805       9.4%  

Less: VAT related surcharges

     (4,757     (5,786     (843     21.6%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     797,602       871,598       126,962       9.3%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship managers

     (168,429     (175,898     (25,622     4.4%  

Others

     (221,835     (261,604     (38,107     17.9%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (390,264     (437,502     (63,729     12.1%  

Selling expenses

     (120,472     (79,557     (11,589     (34.0%

General and administrative expenses

     (68,510     (84,203     (12,266     22.9%  

Other operating expenses

     (28,589     (51,063     (7,438     78.6%  

Government grants

     31,432       32,587       4,747       3.7%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (576,403     (619,738     (90,275     7.5%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     221,199       251,860       36,687       13.9%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     18,633       29,225       4,257       56.8%  

Interest expenses

     (3,313     —         —         (100.0%

Investment income

     16,754       11,847       1,726       (29.3%

Other (expense) income

     (21,357     310       45       N.A.  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     10,717       41,382       6,028       286.1%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and income from equity in affiliates

     231,916       293,242       42,715       26.4%  

Income tax expense

     (57,651     (67,622     (9,850     17.3%  

Income from equity in affiliates

     12,087       28,829       4,199       138.5%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     186,352       254,449       37,064       36.5%  

Less: net income attributable to non-controlling interests

     6,867       4,266       621       (37.9%
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Net income attributable to Noah shareholders

     179,485        250,183        36,443        39.4%  
  

 

 

    

 

 

    

 

 

    

 

 

 

Income per ADS, basic

     3.13        4.09        0.60        30.7%  

Income per ADS, diluted

     3.00        4.04        0.59        34.7%  

Margin analysis:

           

Operating margin

     27.7%        28.9%        28.9%     

Net margin

     23.4%        29.2%        29.2%     

Weighted average ADS equivalent[1]:

           

Basic

     57,295,516        61,211,098        61,211,098     

Diluted

     60,747,298        61,966,245        61,966,245     

ADS equivalent outstanding at end of period

     58,498,187        61,259,417        61,259,417     

 

[1]

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

 

11


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

     Six months ended  
     June 30,
2018
    June 30,
2019
    June 30,
2019
    Change  
     RMB’000     RMB’000     USD’000        

Revenues:

        

Revenues from others:

        

One-time commissions

     381,332       410,580       59,808       7.7%  

Recurring service fees

     311,128       263,640       38,403       (15.3%

Performance-based income

     30,739       3,145       458       (89.8%

Other service fees

     136,872       285,317       41,561       108.5%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     860,071       962,682       140,230       11.9%  

Revenues from funds Gopher manages:

        

One-time commissions

     171,189       209,012       30,446       22.1%  

Recurring service fees

     538,456       591,734       86,196       9.9%  

Performance-based income

     68,261       9,368       1,365       (86.3%
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     777,906       810,114       118,007       4.1%  

Total revenues

     1,637,977       1,772,796       258,237       8.2%  

Less: VAT related surcharges

     (9,456     (11,314     (1,648     19.6%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,628,521       1,761,482       256,589       8.2%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship managers

     (327,130     (343,166     (49,988     4.9%  

Others

     (423,847     (498,641     (72,635     17.6%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (750,977     (841,807     (122,623     12.1%  

Selling expenses

     (226,731     (170,013     (24,765     (25.0%

General and administrative expenses

     (124,439     (142,753     (20,794     14.7%  

Other operating expenses

     (66,552     (101,891     (14,842     53.1%  

Government grants

     35,920       49,367       7,191       37.4%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (1,132,779     (1,207,097     (175,833     6.6%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     495,742       554,385       80,756       11.8%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     41,500       52,348       7,625       26.1%  

Interest expenses

     (10,182     (430     (63     (95.8%

Investment income

     58,886       37,510       5,464       (36.3%

Other expense

     (20,194     (1,618     (236     (92.0%
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     70,010       87,810       12,790       25.4%  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and income from equity in affiliates

     565,752       642,195       93,546       13.5%  

Income tax expense

     (131,313     (147,114     (21,430     12.0%  

 

12


Income from equity in affiliates

     12,739       46,952        6,839        268.6%  
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income

     447,178       542,033        78,955        21.2%  

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

     (772     7,273        1,059        N.A.  
  

 

 

   

 

 

    

 

 

    

 

 

 

Net income attributable to Noah shareholders

     447,950       534,760        77,896        19.4%  
  

 

 

   

 

 

    

 

 

    

 

 

 

Income per ADS, basic

     7.82       8.78        1.28        12.3%  

Income per ADS, diluted

     7.37       8.65        1.26        17.4%  

Margin analysis:

          

Operating margin

     30.4%       31.5%        31.5%     

Net margin

     27.5%       30.8%        30.8%     

Weighted average ADS equivalent[1]:

          

Basic

     57,295,516       60,892,670        60,892,670     

Diluted

     60,747,298       61,933,765        61,933,765     

ADS equivalent outstanding at end of period

     58,498,187       61,259,417        61,259,417     

 

[1]

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

 

13


Noah Holdings Limited

Condensed Comprehensive Income Statements 

(unaudited)

 

     Three months ended         
     June 30,
2018
    June 30,
2019
     June 30,
2019
     Change  
     RMB’000     RMB’000      USD’000         

Net income

     186,352       254,449        37,065        36.5%  

Other comprehensive income, net of tax:

          

Foreign currency translation adjustments

     52,539       54,495        7,938        3.7%  

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

     (2,469     2,339        341        N.A.  
  

 

 

   

 

 

    

 

 

    

 

 

 

Comprehensive income

     236,422       311,283        45,344        31.7%  

Less: Comprehensive income attributable to non-controlling interests

     6,835       4,199        612        (38.6%
  

 

 

   

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Noah shareholders

     229,587       307,084        44,732        33.8%  
  

 

 

   

 

 

    

 

 

    

 

 

 

Noah Holdings Limited

Condensed Comprehensive Income Statements 

(unaudited)

 

     Six months ended         
     June 30,
2018
    June 30,
2019
     June 30,
2019
     Change  
     RMB’000     RMB’000      USD’000         

Net income

     447,178       542,033        78,955        21.2%  

Other comprehensive income, net of tax:

          

Foreign currency translation adjustments

     17,676       23,637        3,443        33.7%  

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

     (1,093     2,387        348        N.A.  
  

 

 

   

 

 

    

 

 

    

 

 

 

Comprehensive income

     463,761       568,057        82,746        22.5%  

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

     (744     7,416        1,080        N.A.  
  

 

 

   

 

 

    

 

 

    

 

 

 

Comprehensive income attributable to Noah shareholders

     464,505       560,641        81,666        20.7%  
  

 

 

   

 

 

    

 

 

    

 

 

 

 

14


Noah Holdings Limited

Supplemental Information

(unaudited)

 

     As of         
     June 30,
2018
     June 30,
2019
     Change  

Number of registered clients

     220,601        283,655        28.6%  

Number of relationship managers

     1,495        1,428        (4.5%

Number of cities in mainland China under coverage

     81        83        2.5%  
     Three months ended         
     June 30,
2018
     June 30,
2019
     Change  
     (in millions of RMB, except number of active clients and
percentages)
 

Number of active clients

     4,461        5,882        31.9%  

Transaction value:

        

Credit products

     19,252        9,750        (49.4%

Private equity products

     6,287        7,658        21.8%  

Public securities products

     2,835        6,021        112.4%  

Other products

     678        934        37.7%  
  

 

 

    

 

 

    

 

 

 

Total transaction value

     29,052        24,363        (16.1%

Average transaction value per active client

     6.51        4.14        (36.4%

 

15


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended June 30, 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

     193,567       370       —         193,937  

Recurring service fees

     129,698       1,466       —         131,164  

Performance-based income

     1,984       67       —         2,051  

Other service fees

     62,032       1,193       76,715       139,940  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     387,281       3,096       76,715       467,092  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from funds Gopher manages

        

One-time commissions

     101,104       —         —         101,104  

Recurring service fees

     140,316       163,262       —         303,578  

Performance-based income

     —         5,610       —         5,610  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     241,420       168,872       —         410,292  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     628,701       171,968       76,715       877,384  

Less: VAT related surcharges

     (3,070     (877     (1,839     (5,786
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     625,631       171,091       74,876       871,598  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship managers

     (175,851     —         (47     (175,898

Others

     (162,491     (72,697     (26,416     (261,604
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (338,342     (72,697     (26,463     (437,502

Selling expenses

     (70,838     (4,344     (4,375     (79,557

General and administrative expenses

     (63,236     (13,778     (7,189     (84,203

Other operating expenses

     (32,179     (2,575     (16,309     (51,063

Government grants

     8,821       9,144       14,622       32,587  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (495,774     (84,250     (39,714     (619,738
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     129,857       86,841       35,162       251,860  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

16


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended June 30, 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

     161,421       370       —         161,791  

Recurring service fees

     158,469       8,727       —         167,196  

Performance-based income

     10,082       —         —         10,082  

Other service fees

     27,613       2,735       46,535       76,883  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     357,585       11,832       46,535       415,952  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from funds Gopher manages

        

One-time commissions

     72,805       —         —         72,805  

Recurring service fees

     127,264       157,125       —         284,389  

Performance-based income

     1,739       27,474       —         29,213  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     201,808       184,599       —         386,407  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     559,393       196,431       46,535       802,359  

Less: VAT related surcharges

     (2,932     (924     (901     (4,757
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     556,461       195,507       45,634       797,602  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship managers

     (167,533     —         (896     (168,429

Others

     (121,290     (68,923     (31,622     (221,835
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (288,823     (68,923     (32,518     (390,264

Selling expenses

     (110,686     (5,361     (4,425     (120,472

General and administrative expenses

     (41,550     (19,235     (7,725     (68,510

Other operating expenses

     (7,745     (4,725     (16,119     (28,589

Government grants

     27,994       3,418       20       31,432  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (420,810     (94,826     (60,767     (576,403
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     135,651       100,681       (15,133     221,199  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

17


Noah Holdings Limited

Supplement Revenue Information by Geography

(unaudited)

 

     Wealth
Management
Business
     Three months ended June 30, 2019      Total  
     Asset
Management
Business
     Lending
and Other
Businesses
 
     RMB’000      RMB’000      RMB’000      RMB’000  

Revenues:

           

Mainland China

     420,540        145,992        76,715        643,247  

Hong Kong

     178,002        23,705        —          201,707  

Others

     30,159        2,271        —          32,430  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     628,701        171,968        76,715        877,384  
  

 

 

    

 

 

    

 

 

    

 

 

 
     Three months ended June 30, 2018  
     Wealth
Management
Business
     Asset
Management
Business
     Lending
and Other
Businesses
     Total  
     RMB’000      RMB’000      RMB’000      RMB’000  

Revenues:

           

Mainland China

     441,408        146,322        46,535        634,265  

Hong Kong

     117,985        50,109        —          168,094  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     559,393        196,431        46,535        802,359  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

18


Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited) 6

 

     Three months ended         
     June 30,
2018
    June 30,
2019
     Change
    
 
     RMB’000     RMB’000         

Net income attributable to Noah shareholders

     179,485       250,183        39.4%  

Adjustment for share-based compensation

     20,241       22,994        13.6%  

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

     (49,063     10,775        N.A.  

Add: gains from sales of equity securities (realized)

     3,338       4,951        48.3%  

Less: tax effect of adjustments

     4,520       3,977        (12.0%
  

 

 

   

 

 

    

 

 

 

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

     247,607       263,376        6.4%  

Net margin attributable to Noah shareholders

     22.5%       28.7%     

Non-GAAP net margin attributable to Noah shareholders

     31.0%       30.2%     

Net income attributable to Noah shareholders per ADS, diluted

     3.00       4.04        34.7%  

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

     4.12       4.25        3.2%  

 

 

6 

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.

 

19


Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)

 

     Six months ended         
     June 30,
2018
    June 30,
2019
     Change
    
 
     RMB’000     RMB’000         

Net income attributable to Noah shareholders

     447,950       534,760        19.4%  

Adjustment for share-based compensation

     42,942       52,610        22.5%  

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

     (14,275     19,517        N.A  

Add: gains from sales of equity securities (realized)

     3,338       9,836        194.7%  

Less: tax effect of adjustments

     6,803       9,691        42.5%  
  

 

 

   

 

 

    

 

 

 

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

     501,702       567,998        13.2%  

Net margin attributable to Noah shareholders

     27.5%       30.4%     

Non-GAAP net margin attributable to Noah shareholders

     30.8%       32.2%     

Net income attributable to Noah shareholders per ADS, diluted

     7.49       8.65        15.5%  

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

     8.37       9.18        9.7%  

 

20

Noah (NYSE:NOAH)
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1 Year : From Nov 2018 to Nov 2019

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Noah (NYSE:NOAH)
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Today : Tuesday 19 November 2019

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