UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 


 

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of March 2020

 

Commission File Number: 001-34936

 


 

Noah Holdings Limited

 


 

No. 1687 Changyang Road, Changyang Valley, Building 2

Shanghai 200090, People’s Republic of China

(86) 21 8035 9221

(Address of Principal Executive Offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x          Form 40-F o

 

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): o

 

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): o

 

 

 


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  

 

 

Noah Holdings Limited

 

 

 

By:

/s/ Qing Pan

 

Name:

Qing Pan

 

Title:

Chief Financial Officer

 

 

 

Date: March 24, 2020

 

 

 

2


 

Exhibit Index

 

Exhibit No.

 

Description.

 

 

 

Exhibit 99.1

 

Press Release

 

3


Exhibit 99.1

 

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED PRELIMINARY

FINANCIAL RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2019

 

SHANGHAI, March 25, 2020 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited preliminary1 financial results for the fourth quarter of 2019 and the full year ended December 31, 2019.

 

FULL YEAR 2019 FINANCIAL HIGHLIGHTS

 

·                  Net revenues in the full year 2019 were RMB3,391.8 million (US$487.2 million), a 3.1% increase from the full year 2018.

 

(RMB millions, except percentages)

 

FY 2018

 

FY 2019

 

YoY Change

 

Wealth management

 

2,306.0

 

2,319.3

 

0.6

%

Asset management

 

748.5

 

783.5

 

4.7

%

Lending and other businesses

 

235.1

 

289.0

 

22.9

%

Total net revenues

 

3,289.6

 

3,391.8

 

3.1

%

 

·                  Income from operations in the full year 2019 was RMB915.0 million (US$131.4 million), a 1.2% decrease from the full year 2018.

 

(RMB millions, except percentages)

 

FY 2018

 

FY 2019

 

YoY Change

 

Wealth management

 

607.2

 

437.8

 

(27.9

%)

Asset management

 

353.2

 

391.3

 

10.8

%

Lending and other businesses

 

(33.9

)

85.9

 

N.A.

 

Total income from operations

 

926.5

 

915.0

 

(1.2

%)

 

·                  Net income attributable to Noah shareholders in the full year 2019 was RMB829.2 million (US$119.1 million), a 2.2% increase from the full year 2018.

 

·                 Non-GAAP2 net income attributable to Noah shareholders in the full year 2019 was RMB1,038.2 million (US$149.1 million), a 2.7% increase from the full year 2018.

 


1  As of the date hereof, the Company is still in the process of reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager.  Any changes in the fair value of those investments could affect the income from equity in affiliates, net income, net income attributable to Noah shareholders, income per ADS and the balance of investments in affiliates in Noah’s consolidated financial statements. If there will be any fair value adjustments associated with the above, which have not been included in these unaudited preliminary financial results in this press release, the Company will include such adjustments in the audited consolidated financial statements in its Form 20-F for the fiscal year 2019 and subsequent reporting if necessary.

2  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


 

FOURTH QUARTER 2019 FINANCIAL HIGHLIGHTS

 

·                  Net revenues for the fourth quarter of 2019 were RMB788.3 million (US$113.2 million), a 4.1% decrease from the corresponding period in 2018.

 

(RMB millions, except percentages)

 

Q4 2018

 

Q4 2019

 

YoY Change

 

Wealth management

 

578.5

 

527.9

 

(8.7

%)

Asset management

 

160.2

 

204.1

 

27.4

%

Lending and other businesses

 

83.4

 

56.3

 

(32.5

%)

Total net revenues

 

822.1

 

788.3

 

(4.1

%)

 

·                  Income from operations for the fourth quarter of 2019 was RMB126.3 million (US$18.1 million), a 20.9% decrease from the corresponding period in 2018.

 

(RMB millions, except percentages)

 

Q4 2018

 

Q4 2019

 

YoY Change

 

Wealth management

 

118.4

 

34.8

 

(70.6

%)

Asset management

 

41.3

 

91.0

 

120.3

%

Lending and other businesses

 

0.0

 

0.5

 

N.A.

 

Total income from operations

 

159.7

 

126.3

 

(20.9

%)

 

·                  Net income attributable to Noah shareholders for the fourth quarter of 2019 was RMB102.8 million (US$14.8 million), a 34.0% decrease from the corresponding period in 2018.

 

·                  Non-GAAP net income attributable to Noah shareholders for the fourth quarter of 2019 was RMB116.5 million (US$16.7 million), a 47.8% decrease from the corresponding period in 2018.

 

FOURTH QUARTER AND FULL YEAR 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 December 31, 2019 was 293,760, a 12.9% increase from December 31, 2018.

 

·                  Total number of active clients3 during the fourth quarter of 2019 was 4,512, a 4.3% decrease from the corresponding period in 2018. Total number of active clients during the full year 2019 was 14,538, a 6.7% increase from the full year 2018.

 

·                  Aggregate value of financial products distributed during the fourth quarter of 2019 was RMB13.2 billion (US$1.9 billion), a 47.7% decrease from the corresponding period in 2018, due to the fact that the Company is adjusting its product strategy and thus no longer offering single-counterparty credit products to clients since the last quarter.

 


3   “Active clients” for a given period refers to registered high net worth clients who purchase financial products distributed or provided by Noah during that given period.

 

2


 

 

 

Three months ended December 31,

 

Product type

 

2018

 

2019

 

 

 

(RMB in billions, except percentages)

 

Credit products

 

20.2

 

80.3

%

1.0

 

7.2

%

Private equity products

 

3.0

 

11.9

%

1.8

 

13.8

%

Public securities products

 

1.5

 

5.7

%

9.7

 

73.7

%

Other products

 

0.5

 

2.1

%

0.7

 

5.3

%

All products

 

25.2

 

100.0

%

13.2

 

100.0

%

 

·                  Aggregate value of financial products distributed during the full year 2019 was RMB78.5 billion (US$11.3 billion), a 28.6% decrease from the full year 2018, due to a significant decrease of single-counterparty credit product distributed in 2019.

 

 

 

Twelve months ended December 31,

 

Product type

 

2018

 

2019

 

 

 

(RMB in billions, except percentages)

 

Credit products

 

75.5

 

68.6

%

34.3

 

43.7

%

Private equity products

 

18.9

 

17.1

%

14.3

 

18.2

%

Public securities products

 

13.6

 

12.4

%

26.4

 

33.6

%

Other products

 

2.0

 

1.9

%

3.5

 

4.5

%

All products

 

110.0

 

100.0

%

78.5

 

100.0

%

 

·                  Average transaction value per active client4 for the fourth quarter of 2019 was RMB2.9 million (US$0.4 million), a 45.3% decrease from the corresponding period in 2018. Average transaction value per active client  for the full year 2019 was RMB5.4 million (US$0.8 million), a 33.1% decrease from the full year 2018.

 

·                  Coverage network in mainland China included 292 service centers covering 82 cities as of December 31, 2019, compared with 307 service centers covering 81 cities as of September 30, 2019, and 313 service centers covering 83 cities as of December 31, 2018. The change in service centers is primarily a result of consolidation of duplicate service centers in order to optimize costs and expenses.

 

·                  Number of relationship managers was 1,288 as of December 31, 2019, a 5.8% decrease from September 30, 2019, and an 18.6% decrease from December 31, 2018, primarily as a result of the Company’s efforts to streamline operational human resources. The turnover rate of core “elite” relationship managers was 4.1%, compared with 4.6% in the year of 2018.

 

Asset Management Business

 

The Company’s asset management business is conducted through Gopher Asset Management Co., Ltd. (“Gopher Asset Management”), is a leading alternative multi-asset manager in China with overseas offices in Hong Kong, United States and Canada. Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities, credit to multi-strategy investments denominated in Renminbi and other currencies.

 


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.

 

3


 

·                  Total assets under management as of December 31, 2019 were RMB170.2 billion (US$24.5 billion), a 3.6% decrease from September 30, 2019 due to the voluntary accelerated repayments of certain credit products and a 0.6% increase from December 31, 2018.

 

Investment type

 

As of
September 30,
2019

 

Growth

 

Distribution/
Redemption

 

As of
December 31,
2019

 

 

 

(RMB billions, except percentages)

 

Private equity

 

105.9

 

60.0

%

1.7

 

2.7

 

104.9

 

61.6

%

Credit

 

33.4

 

19.0

%

 

3.8

 

29.6

 

17.4

%

Real estate

 

18.7

 

10.6

%

1.9

 

3.0

 

17.6

 

10.3

%

Public securities5

 

9.6

 

5.4

%

0.7

 

1.0

 

9.3

 

5.5

%

Multi-strategies

 

8.9

 

5.0

%

1.1

 

1.2

 

8.8

 

5.2

%

All Investments

 

176.5

 

100.0

%

5.4

 

11.7

 

170.2

 

100.0

%

 

Investment type

 

As of
December 31,
2018

 

Growth

 

Distribution/
Redemption

 

As of
December 31,
2019

 

 

 

(RMB billions, except percentages)

 

Private equity

 

100.2

 

59.2

%

10.3

 

5.6

 

104.9

 

61.6

%

Credit

 

39.4

 

23.3

%

10.2

 

20.0

 

29.6

 

17.4

%

Real estate

 

16.7

 

9.9

%

7.2

 

6.3

 

17.6

 

10.3

%

Public securities

 

6.2

 

3.6

%

5.5

 

2.4

 

9.3

 

5.5

%

Multi-strategies

 

6.7

 

4.0

%

3.4

 

1.3

 

8.8

 

5.2

%

All Investments

 

169.2

 

100.0

%

36.6

 

35.6

 

170.2

 

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 fourth quarter of 2019 was RMB0.2 billion, compared with RMB4.2 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, “The past year we experienced external pressures from economic downturn, turbulent situation in Hong Kong, Sino-US trade tensions and a changing financial regulatory landscape in China, and we have been proactively seeking paradigm transformation to meet our client’s changing demand. From the third quarter, we ceased the offering of single-counterparty non-standardized credit products. I am encouraged by the robust momentum in our transition to offering more standardized products, and the healthy growth in the volume of our public securities transactions. We are happy to report the strong full year results, that the Group reached our Non-GAAP net income attributable to shareholders guidance of RMB1 billion to RMB1.1 billion, and a Non-GAAP net margin of 30.6%, which demonstrate our strong capability and sustainability. Noah is well placed in China’s wealth management and asset management industry, in response to the COVID-19 outbreak. We will continue our paradigm transformation in 2020, and further invest in our IT infrastructure to enhance user experience in providing diversified products and value-added services to high-net-worth clients in China and overseas.”

 

FOURTH QUARTER 2019 FINANCIAL RESULTS

 

Net Revenues

 


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

 

4


 

Net revenues for the fourth quarter of 2019 were RMB788.3 million (US$113.2 million), a 4.1% decrease from the corresponding period in 2018, primarily driven by decreased one-time commissions and other service fees, and partially offset by increased recurring service fees and performance-based income.

 

·                  Wealth Management Business

 

·                 Net revenues from one-time commissions for the fourth quarter of 2019 were RMB158.3 million (US$22.7 million), a 34.3% decrease from the corresponding period in 2018 due to a decrease in single-counterparty credit products distributed in fourth quarter of 2019.

 

·                 Net revenues from recurring service fees for the fourth quarter of 2019 were RMB306.4 million (US$44.0 million), a 2.9% 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 as well as more redemption of credit products.

 

·                 Net revenues from performance-based income for the fourth quarter of 2019 were RMB15.8 million (US$2.3 million), compared with RMB0.1 million from the corresponding period of 2018, primarily due to an increase in performance-based income from public securities products as a result of a bullish A shares market this quarter.

 

·                 Net revenues from other service fees for the fourth quarter of 2019 were RMB47.4 million (US$6.8 million), a 19.7% increase from 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 fourth quarter of 2019 were RMB159.7 million (US$22.9 million), an 8.0% 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 fourth quarter of 2019 were RMB41.8 million (US$6.0 million), a 286.2% 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 fourth quarter of 2019 were RMB56.3 million (US$8.1 million), a 32.5% decrease from the corresponding period in 2018, due to reduced loan origination in 2019.

 

Operating Costs and Expenses

 

Operating costs and expenses for the fourth quarter of 2019 were RMB662.1 million (US$95.1 million), a 0.1% decrease from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB374.1 million (US$53.7 million), selling expenses of RMB77.7 million (US$11.2 million), general and administrative expenses of RMB180.0 million (US$25.9 million) and other operating expenses of RMB42.1 million (US$6.0 million).

 

·                      Operating costs and expenses for the wealth management business for the fourth quarter of 2019 were RMB493.1 million (US$70.8 million), a 7.2% increase from the corresponding period in 2018, primarily due to an increase in allowance for doubtful accounts.

 

·                      Operating costs and expenses for the asset management business for the fourth quarter of 2019 were RMB113.1 million (US$16.3 million), a 4.8% 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 fourth quarter of 2019 were RMB55.8 million (US$8.0 million), a 33.1% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits as employees structure under non-lending businesses was optimized in 2019.

 

5


 

Operating Margin

 

Operating margin for the fourth quarter of 2019 was 16.0%, compared with 19.4% for the corresponding period in 2018.

 

·                      Operating margin for the wealth management business for the fourth quarter of 2019 was 6.6%, compared with 20.5% for the corresponding period in 2018, due to increase of allowance for doubtful accounts.

 

·                      Operating margin for the asset management business for the fourth quarter of 2019 was 44.6%, compared with 25.8% for the corresponding period in 2018 due to increased recurring service fee as well as more effective expense control.

 

·                      Income for the lending and other businesses for the fourth quarter of 2019 was RMB0.5 million (US$0.1 million), compared with break-even in the corresponding period of 2018.

 

Investment Income

 

Investment Loss for the fourth quarter of 2019 was RMB17.7 million (US$2.5 million), compared with investment income of RMB6.5 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 fourth quarter of 2019 were RMB28.2 million (US$4.0 million), a 3.5% decrease from the corresponding period in 2018, primarily due to lower taxable income.

 

Income from Equity in Affiliates

 

Income from equity in affiliates for the fourth quarter of 2019 was RMB14.9 million (US$2.1 million), compared with RMB2.5 million in the corresponding period in 2018. We are still reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager. Although we do not anticipate material variance barring unexpected fluctuations in the portfolio companies’ performance, any potential changes in fair value of those investments could affect the income from equity in affiliates.

 

Net Income

 

·                  Net Income

 

·                      Net income for the fourth quarter of 2019 was RMB117.9 million (US$16.9 million), a 22.1% decrease from the corresponding period in 2018.

 

·                      Net margin for the fourth quarter of 2019 was 15.0%, down from 18.4% for the corresponding period in 2018.

 

·                      Net income attributable to Noah shareholders for the fourth quarter of 2019 was RMB102.8 million (US$14.8 million), a 34.0% decrease from the corresponding period in 2018.

 

·                      Net margin attributable to Noah shareholders for the fourth quarter of 2019 was 13.0%, down from 18.9% for the corresponding period in 2018.

 

·                      Net income attributable to Noah shareholders per basic and diluted ADS for the fourth quarter of 2019 was RMB1.67 (US$0.24) and RMB1.66 (US$0.24), respectively, compared with RMB2.61 and RMB2.54 respectively, for the corresponding period in 2018.

 

6


 

·                  Non-GAAP Net Income Attributable to Noah Shareholders

 

·                      Non-GAAP net income attributable to Noah shareholders for the fourth quarter of 2019 was RMB116.5 million (US$16.7 million), a 47.8% decrease from the corresponding period in 2018.

 

·                      Non-GAAP net margin attributable to Noah shareholders for the fourth quarter of 2019 was 14.8%, down from 27.1% for the corresponding period in 2018.

 

·                      Non-GAAP net income attributable to Noah shareholders per diluted ADS for the fourth quarter of 2019 was RMB1.88 (US$0.27), down from RMB3.64 for the corresponding period in 2018.

 

FULL YEAR 2019 FINANCIAL RESULTS

 

Net Revenues

 

Net revenues for the full year 2019 were RMB3,391.8 million (US$487.2 million), a 3.1% increase from the full year 2018, primarily due to increases in recurring service fees and other service fees and partially offset by the decrease in one-time commissions.

 

·                  Wealth Management Business

 

·                 Net revenues from one-time commissions for 2019 were RMB923.8 million (US$132.7 million), a 9.3% decrease from 2018, primarily due to the product transformations in the second half of the year that led to a drop in single-counterparty credit products offerings.

 

·                 Net revenues from recurring service fees for 2019 were RMB1,150.2 million (US$165.2 million), a 1.8% increase from 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 2019 were RMB23.3 million (US$3.4 million), a 47.1% decrease from 2018, primarily due to a decrease in performance-based income from public securities products.

 

·                 Net revenues from other service fees for 2019 were RMB221.9 million (US$31.9 million), a 96.4% increase from 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 2019 were RMB686.5 million (US$98.6 million), a 7.6% increase from 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 2019.

 

·                 Net revenues from performance-based income for 2019 were RMB89.2 million (US$12.8 million), a 9.8% decrease from 2018, primarily due to a decrease in performance-based income from public securities products.

 

·                  Lending and Other Businesses

 

·                 Net revenues for 2019 were RMB289.0 million (US$41.5 million), a 22.9% increase from 2018.

 

Operating costs and expenses

 

Operating costs and expenses for 2019 were RMB2,476.8 million (US$355.8 million), a 4.8% increase from the full year 2018. Operating costs and expenses for the full year 2019 primarily consisted of compensation and benefits of RMB1,610.8 million (US$231.4 million), selling expenses of RMB331.3 million (US$47.6 million), general and administrative expenses of RMB427.2 million (US$61.4 million) and other operating expenses of RMB196.8 million (US$28.3 million).

 

7


 

·                 Operating costs and expenses for the wealth management business for 2019 were RMB1,881.5 million (US$270.3 million), a 10.8% increase from 2018, primarily due to an increase in compensation and benefits as well as general and administrative expenses.

 

·                 Operating costs and expenses for the asset management business for 2019 were RMB392.3 million (US$56.3 million), a 0.8% decrease from 2018, primarily due to a decrease in general and administrative expenses.

 

·                 Operating costs and expenses for the lending and other businesses for 2019 were RMB203.0 million (US$29.2 million), a 24.5% decrease from 2018, primarily due to a decrease in compensation and benefits as employees structure under non-lending businesses was optimized since the beginning of 2019.

 

Operating Margin

 

Operating margin for the full year 2019 was 27.0%, compared to 28.2% for the full year 2018.

 

·                      Operating margin for the wealth management business for 2019 was 18.9%, compared to 26.3% for 2018, mainly due to increased legal expenses related to the Camsing case as well as a greater allowance for doubtful accounts.

 

·                      Operating margin for the asset management business for 2019 was 49.9%, compared to 47.2% for 2018.

 

·                      Operating margin for the lending and other business for 2019 was 29.7%, compared to a loss of RMB33.9 million for 2018.

 

Investment Income

 

Investment loss for the full year 2019 was RMB28.6 million (US$4.1 million), compared with investment income of RMB49.1 million for the full year 2018. The investment loss was primarily due to changes in fair value of equity securities.

 

Income Tax Expenses

 

Income tax expenses for the full year 2019 were RMB220.0 million (US$31.6 million), a 1.0% decrease from the full year 2018.

 

Net Income

 

·                  Net Income

 

·                      Net income for the full year 2019 was RMB863.8 million (US$124.1 million), a 7.5% increase from the corresponding period in 2018.

 

·                      Net margin for the full year 2019 was 25.5%, up from 24.4% for the full year 2018.

 

·                      Net income attributable to Noah shareholders for the full year 2019 was RMB829.2 million (US$119.1 million), a 2.2% increase from the full year 2018.

 

·                      Net margin attributable to Noah shareholders for the full year 2019 was 24.4%, down from 24.7% for the full year 2018.

 

·                      Net income attributable to Noah shareholders per basic and diluted ADS for the full year 2019 was RMB13.56 (US$1.95) and RMB13.42 (US$1.93), respectively, compared with RMB13.85 and RMB13.33 respectively, for the full year 2018.

 

8


 

·                  Non-GAAP Net Income Attributable to Noah Shareholders

 

·                      Non-GAAP net income attributable to Noah shareholders for the full year 2019 was RMB1,038.2 million (US$149.1 million), a 2.7% increase from the full year 2018.

 

·                      Non-GAAP net margin attributable to Noah shareholders for the full year 2019 was 30.6%, unchanged from the full year of 2018.

 

·                      Non-GAAP net income attributable to Noah shareholders per diluted ADS for the full year 2019 was RMB16.80 (US$2.41), up from RMB16.58 for the full year 2018.

 

BALANCE SHEET AND CASH FLOW

 

As of December 31, 2019, the Company had RMB4,387.3 million (US$630.2 million) in cash and cash equivalents, compared with RMB2,704.1 million as of December 31, 2018 and RMB3,669.2 million as of September 30, 2019.

 

Net cash inflow from the Company’s operating activities during the fourth quarter of 2019 was RMB838.6 million (US$120.5 million), compared to net cash inflow of RMB511.3 million in the corresponding period in 2018. The increase was mainly due to changes in working capital. Net cash inflow from the Company’s operating activities during the full year 2019 was RMB1,284.3 million (US$184.5 million), compared to RMB1,029.4 million during the full year 2018, driven by profit earned from business operations and enhanced collection of accounts receivables.

 

Net cash outflow from the Company’s investing activities during the fourth quarter of 2019 was RMB179.9 million (US$25.8 million), compared to net cash outflow of RMB188.4 million in the corresponding period in 2018. Net cash outflow from the Company’s investing activities during the full year 2019 was RMB178.1 million (US$25.6 million), compared to net cash outflow of RMB395.7 million during the full year 2018, due to fewer investments made in 2019.

 

Net cash inflow from the Company’s financing activities was RMB136.3 million (US$19.6 million) in the fourth quarter of 2019, compared to net cash inflow of RMB7.5 million in the corresponding period in 2018,  primarily due to the capital contribution by non-controlling shareholders of a consolidated subsidiary. Net cash inflow from the Company’s financing activities during the full year 2019 was RMB543.3 million (US$78.0 million), compared to RMB109.8 million cash inflow during the full year 2018. The cash inflow for 2019 was mainly due to the proceeds related to contribution of non-controlling interest.

 

NOTE TO FINANCIAL INFORMATION

 

As of the date of this press release, we are still in the process of reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager.  Any changes in the fair value of those investments could affect the income from equity in affiliates, net income, net income attributable to Noah shareholders, income per ADS and the balance of investments in affiliates in our consolidated financial statements. While not included in the unaudited preliminary fourth quarter 2019 financial results in this press release, we will include any such fair value adjustments in the audited consolidated financial statements in our 2019 Form 20-F and will make a subsequent announcement when our review conclude, as appropriate.

 

9


 

2020 FORECAST

 

The global outbreak of a novel strain of coronavirus (COVID-19) has notably slowed down the global economy. Despite the fact that various travel bans in China and cross border have put heavy constraints on the Company’s face-to-face interactions with clients, the Company is excited to see a strong momentum in the transaction value of standardized products being offered. Hence, the Company remains reasonably optimistic about the recovery or even a moderate growth in its total transaction value in 2020 compared to 2019. In the meantime, as part of its overall transformation strategy, the Company has decided to further increase its investment in IT infrastructure and online platform development. This will primarily consist of the major upgrades of the Smiling Fund APP, the construction of the global version of Smiling Fund APP and the creation of a new SaaS system for institutional channels. The Company expects to spend around 3-5% of its total net revenue in such investment in 2020. Given the above considerations, the non-GAAP net income attributable to Noah shareholders for the full year 2020 will be in the range of RMB800 million to RMB900 million. 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 fourth quarter and full year 2019 unaudited financial results and recent business activities.

 

The conference call may be accessed with the following details:

 

 Conference call details

 

Date/Time:

Tuesday, March 24, 2020 at 8:00 p.m., U.S. Eastern Time Wednesday, March 25, 2020 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 Fourth Quarter 2019 Earnings Call

Participant Password:

Noah Holdings Limited

 

A telephone replay will be available starting approximately one hour after the end of the conference call until March 31, 2020 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10139594.

 

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.

 

10


 

 

DISCUSSION ON NON-GAAP MEASURES

 

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation, 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 full year 2019, Noah distributed RMB78.5 billion (US$11.3 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB170.2 billion (US$24.5 billion) as of December 31, 2019.

 

Noah’s wealth management business primarily distributes diversified financial products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,288 relationship managers across 292 service centers in 82 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 293,760 registered clients as of December 31, 2019. As a leading alternative multi-asset manager in China, Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities, credit to multi-strategy investments denominated in Renminbi and other currencies. The Company also provides lending services and other businesses.

 

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

 

FOREIGN CURRENCY TRANSLATION

 

In this announcement, the unaudited financial results for the fourth quarter of 2019 and full year ended December 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 RMB6.9618 to US$1.00, the effective noon buying rate for December 31, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

11


 

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 2020 and quotations from management in this announcement, as well as Noah’s strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Noah’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah’s actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; investment risks associated with financial products distributed to Noah’s investors, including the risk of default by counterparties or loss of value due to market or business conditions or misconduct by counterparties; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.

 

Contacts:

 

Noah Holdings Limited

Sonia Han

Tel: +86-21-8035-9221

ir@noahgroup.com

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

12


 

Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

 

 

As of

 

 

 

 

 

September 30,

 

December 31,

 

December 31,

 

 

 

2019

 

2019

 

2019

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

3,669,150

 

4,387,345

 

630,203

 

Restricted cash

 

2,500

 

6,589

 

946

 

Short-term investments

 

557,130

 

671,259

 

96,420

 

Accounts receivable, net

 

287,818

 

219,566

 

31,539

 

Loans receivable, net

 

541,703

 

688,970

 

98,964

 

Amounts due from related parties

 

666,584

 

548,704

 

78,816

 

Loans receivable from factoring business, net

 

60,000

 

 

 

Other current assets

 

298,403

 

243,701

 

35,004

 

Total current assets

 

6,083,288

 

6,766,134

 

971,892

 

 

 

 

 

 

 

 

 

Long-term investments, net

 

930,055

 

881,091

 

126,561

 

Investment in affiliates

 

1,289,296

 

1,272,261

 

182,749

 

Property and equipment, net

 

307,680

 

296,320

 

42,564

 

Operating lease right-of-use assets, net

 

367,873

 

352,186

 

50,588

 

Deferred tax assets

 

126,914

 

167,430

 

24,050

 

Other non-current assets

 

79,654

 

67,182

 

9,651

 

Total Assets

 

9,184,760

 

9,802,604

 

1,408,055

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accrued payroll and welfare expenses

 

432,800

 

555,719

 

79,824

 

Income tax payable

 

96,668

 

126,743

 

18,205

 

Deferred revenues

 

192,614

 

100,693

 

14,464

 

Other current liabilities

 

333,132

 

721,898

 

103,694

 

Total current liabilities

 

1,055,214

 

1,505,053

 

216,187

 

Operating lease liabilities, non-current

 

370,845

 

362,757

 

52,107

 

Deferred tax liabilities

 

65,314

 

56,401

 

8,101

 

Other non-current liabilities

 

11,952

 

3,433

 

493

 

Total Liabilities 

 

1,503,325

 

1,927,644

 

276,888

 

Equity

 

7,681,435

 

7,874,960

 

1,131,167

 

Total Liabilities and Equity

 

9,184,760

 

9,802,604

 

1,408,055

 

 

13


 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

 

 

Three months ended 

 

 

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

 

 

 

2018

 

2019

 

2019

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from others:

 

 

 

 

 

 

 

 

 

One-time commissions

 

173,814

 

150,494

 

21,617

 

(13.4

%)

Recurring service fees

 

142,435

 

125,851

 

18,077

 

(11.6

%)

Performance-based income

 

147

 

15,909

 

2,285

 

10,722.4

%

Other service fees

 

126,212

 

105,691

 

15,182

 

(16.3

%)

Total revenues from others

 

442,608

 

397,945

 

57,161

 

(10.1

%)

Revenues from funds Gopher manages:

 

 

 

 

 

 

 

 

 

One-time commissions

 

69,098

 

10,659

 

1,531

 

(84.6

%)

Recurring service fees

 

305,937

 

342,658

 

49,220

 

12.0

%

Performance-based income

 

10,861

 

41,981

 

6,030

 

286.5

%

Total revenues from funds Gopher manages

 

385,896

 

395,298

 

56,781

 

2.4

%

Total revenues

 

828,504

 

793,243

 

113,942

 

(4.3

%)

Less: VAT related surcharges 

 

(6,401

)

(4,900

)

(704

)

(23.4

%)

Net revenues

 

822,103

 

788,343

 

113,238

 

(4.1

%)

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship manager compensation

 

(162,638

)

(133,306

)

(19,148

)

(18.0

%)

Others

 

(265,477

)

(240,808

)

(34,590

)

(9.3

%)

Total compensation and benefits

 

(428,115

)

(374,114

)

(53,738

)

(12.6

%)

Selling expenses

 

(104,765

)

(77,741

)

(11,167

)

(25.8

%)

General and administrative expenses 

 

(94,938

)

(180,012

)

(25,857

)

89.6

%

Other operating expenses 

 

(51,710

)

(42,064

)

(6,042

)

(18.7

%)

Government grants 

 

17,145

 

11,862

 

1,704

 

(30.8

%)

Total operating costs and expenses 

 

(662,383

)

(662,069

)

(95,100

)

(0.1

%)

Income from operations 

 

159,720

 

126,274

 

18,138

 

(20.9

%)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income 

 

14,104

 

22,977

 

3,300

 

62.9

%

Interest expenses

 

(1,002

)

 

 

N.A.

 

Investment income (loss)

 

6,547

 

(17,725

)

(2,546

)

N.A.

 

Other expense

 

(1,326

)

(308

)

(44

)

(76.8

%)

Total other income (expense)

 

18,323

 

4,944

 

710

 

(73.0

%)

Income before taxes and income from equity in affiliates

 

178,043

 

131,218

 

18,848

 

(26.3

%)

Income tax expense

 

(29,203

)

(28,174

)

(4,047

)

(3.5

%)

Income from equity in affiliates

 

2,526

 

14,883

 

2,138

 

489.2

%

Net income

 

151,366

 

117,927

 

16,939

 

(22.1

%)

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

 

(4,273

)

15,134

 

2,174

 

N.A.

 

Net income attributable to Noah shareholders 

 

155,639

 

102,793

 

14,765

 

(34.0

%)

 

 

 

 

 

 

 

 

 

 

Income per ADS, basic

 

2.61

 

1.67

 

0.24

 

(36.0

%)

Income per ADS, diluted

 

2.54

 

1.66

 

0.24

 

(34.6

%)

Margin analysis:

 

 

 

 

 

 

 

 

 

Operating margin

 

19.4

%

16.0

%

16.0

%

 

 

Net margin

 

18.4

%

15.0

%

15.0

%

 

 

Weighted average ADS equivalent[1]:

 

 

 

 

 

 

 

 

 

Basic

 

59,676,698

 

61,532,722

 

61,532,722

 

 

 

Diluted

 

61,590,911

 

61,900,487

 

61,900,487

 

 

 

ADS equivalent outstanding at end of period

 

60,129,547

 

61,599,313

 

61,599,313

 

 

 

 


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

 

14


 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

 

 

Twelve months ended

 

 

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

 

 

 

2018

 

2019

 

2019

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from others:

 

 

 

 

 

 

 

 

 

One-time commissions

 

733,009

 

690,860

 

99,236

 

(5.8

%)

Recurring service fees

 

593,856

 

524,692

 

75,367

 

(11.6

%)

Performance-based income

 

43,101

 

23,437

 

3,367

 

(45.6

%)

Other service fees

 

361,886

 

522,958

 

75,118

 

44.5

%

Total revenues from others

 

1,731,852

 

1,761,947

 

253,088

 

1.7

%

Revenues from funds Gopher manages:

 

 

 

 

 

 

 

 

 

One-time commissions

 

294,984

 

240,808

 

34,590

 

(18.4

%)

Recurring service fees

 

1,182,693

 

1,320,773

 

189,717

 

11.7

%

Performance-based income

 

100,533

 

89,648

 

12,877

 

(10.8

%)

Total revenues from funds Gopher manages

 

1,578,210

 

1,651,229

 

237,184

 

4.6

%

Total revenues

 

3,310,062

 

3,413,176

 

490,272

 

3.1

%

Less: VAT related surcharges 

 

(20,454

)

(21,364

)

(3,069

)

4.4

%

Net revenues

 

3,289,608

 

3,391,812

 

487,203

 

3.1

%

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship manager compensation

 

(633,599

)

(625,044

)

(89,782

)

(1.4

%)

Others

 

(930,593

)

(985,726

)

(141,591

)

5.9

%

Total compensation and benefits

 

(1,564,192

)

(1,610,770

)

(231,373

)

3.0

%

Selling expenses

 

(412,720

)

(331,346

)

(47,595

)

(19.7

%)

General and administrative expenses 

 

(279,387

)

(427,215

)

(61,366

)

52.9

%

Other operating expenses 

 

(169,368

)

(196,793

)

(28,268

)

16.2

%

Government grants 

 

62,583

 

89,278

 

12,824

 

42.7

%

Total operating costs and expenses 

 

(2,363,084

)

(2,476,846

)

(355,778

)

4.8

%

Income from operations 

 

926,524

 

914,966

 

131,425

 

(1.2

%)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income 

 

69,841

 

89,099

 

12,798

 

27.6

%

Interest expenses

 

(10,028

)

(430

)

(62

)

(95.7

%)

Investment income (loss)

 

48,616

 

(28,620

)

(4,111

)

N.A.

 

Other expense

 

(23,356

)

(7,040

)

(1,011

)

(69.9

%)

Total other income (expense)

 

85,073

 

53,009

 

7,614

 

(37.7

%)

Income before taxes and income from equity in affiliates

 

1,011,597

 

967,975

 

139,039

 

(4.3

%)

Income tax expense

 

(222,320

)

(220,025

)

(31,605

)

(1.0

%)

Income from equity in affiliates

 

14,469

 

115,809

 

16,635

 

700.4

%

Net income

 

803,746

 

863,759

 

124,069

 

7.5

%

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

 

(7,551

)

34,608

 

4,971

 

N.A.

 

Net income attributable to Noah shareholders 

 

811,297

 

829,151

 

119,098

 

2.2

%

 

 

 

 

 

 

 

 

 

 

Income per ADS, basic

 

13.85

 

13.56

 

1.95

 

(2.1

%)

Income per ADS, diluted

 

13.33

 

13.42

 

1.93

 

0.7

%

Margin analysis:

 

 

 

 

 

 

 

 

 

Operating margin

 

28.2

%

27.0

%

27.0

%

 

 

Net margin

 

24.4

%

25.5

%

25.5

%

 

 

Weighted average ADS equivalent[1]:

 

 

 

 

 

 

 

 

 

Basic

 

58,576,802

 

61,160,362

 

61,160,362

 

 

 

Diluted

 

61,421,080

 

61,848,191

 

61,848,191

 

 

 

ADS equivalent outstanding at end of period

 

60,129,547

 

61,599,313

 

61,599,313

 

 

 

 


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

 

15


 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

 

 

Three months ended 

 

 

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

 

 

 

2018

 

2019

 

2019

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Net income

 

151,366

 

117,927

 

16,939

 

(22.1

%)

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

7,357

 

(81,693

)

(11,734

)

N.A.

 

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

 

(47

)

7

 

1

 

N.A.

 

Comprehensive income

 

158,676

 

36,241

 

5,206

 

(77.2

%)

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

 

(4,260

)

15,090

 

2,168

 

N.A.

 

Comprehensive income attributable to Noah shareholders

 

162,936

 

21,151

 

3,038

 

(87.0

%)

 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

 

 

Twelve months ended 

 

 

 

 

 

December 31,

 

December 31,

 

December 31,

 

 

 

 

 

2018

 

2019

 

2019

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Net income

 

803,746

 

863,759

 

124,069

 

7.5

%

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

75,752

 

61,601

 

8,848

 

(18.7

%)

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

 

(1,429

)

(797

)

(114

)

(44.2

%)

Comprehensive income

 

878,069

 

924,563

 

132,803

 

5.3

%

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

 

(7,638

)

34,558

 

4,964

 

N.A.

 

Comprehensive income attributable to Noah shareholders

 

885,707

 

890,005

 

127,839

 

0.5

%

 

16


 

Noah Holdings Limited

Supplemental Information

(unaudited)

 

 

 

As of

 

 

 

 

 

December 31,
2018

 

December 31,
2019

 

Change

 

Number of registered clients 

 

260,285

 

293,760

 

12.9

%

Number of relationship managers 

 

1,583

 

1,288

 

(18.6

%)

Number of cities in mainland China under coverage

 

83

 

82

 

(1.2

%)

 

 

 

Three months ended

 

 

 

 

 

December 31,
2018

 

December 31,
2019

 

Change

 

 

 

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

 

Number of active clients

 

4,717

 

4,512

 

(4.3

%)

Transaction value:

 

 

 

 

 

 

 

Credit products

 

20,224

 

948

 

(95.3

%)

Private equity products

 

2,999

 

1,811

 

(39.6

%)

Public securities products

 

1,426

 

9,708

 

580.8

%

Other products

 

521

 

703

 

34.9

%

Total transaction value

 

25,170

 

13,170

 

(47.7

%)

Average transaction value per active client

 

5.34

 

2.92

 

(45.3

%)

 

 

 

Twelve months ended

 

 

 

 

 

December 31,
2018

 

December 31,
2019

 

Change

 

 

 

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

 

Number of active clients

 

13,628

 

14,538

 

6.7

%

Transaction value:

 

 

 

 

 

 

 

Credit products

 

75,498

 

34,316

 

(54.5

%)

Private equity products

 

18,864

 

14,279

 

(24.3

%)

Public securities products

 

13,605

 

26,378

 

93.9

%

Other products

 

2,062

 

3,551

 

72.2

%

Total transaction value

 

110,029

 

78,524

 

(28.6

%)

Average transaction value per active client

 

8.07

 

5.40

 

(33.1

%)

 

17


 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)

 

 

 

 Three months ended December 31, 2019

 

 

 

Wealth 
Management
Business

 

Asset 
Management
Business

 

Lending and 
other 
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from others

 

 

 

 

 

 

 

 

 

One-time commissions

 

149,806

 

688

 

 

150,494

 

Recurring service fees

 

124,872

 

979

 

 

125,851

 

Performance-based income

 

15,909

 

 

 

15,909

 

Other service fees

 

47,594

 

718

 

57,379

 

105,691

 

Total revenues from others

 

338,181

 

2,385

 

57,379

 

397,945

 

Revenues from funds Gopher manages

 

 

 

 

 

 

 

 

 

One-time commissions

 

9,344

 

1,315

 

 

10,659

 

Recurring service fees

 

183,119

 

159,539

 

 

342,658

 

Performance-based income

 

 

41,981

 

 

41,981

 

Total revenues from funds Gopher manages

 

192,463

 

202,835

 

 

395,298

 

Total revenues

 

530,644

 

205,220

 

57,379

 

793,243

 

Less: VAT related surcharges

 

(2,707

)

(1,098

)

(1,095

)

(4,900

)

Net revenues

 

527,937

 

204,122

 

56,284

 

788,343

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(133,306

)

 

 

(133,306

)

Others

 

(143,475

)

(75,072

)

(22,261

)

(240,808

)

Total compensation and benefits

 

(276,781

)

(75,072

)

(22,261

)

(374,114

)

Selling expenses

 

(64,026

)

(9,099

)

(4,616

)

(77,741

)

General and administrative expenses

 

(138,538

)

(28,650

)

(12,824

)

(180,012

)

Other operating expenses

 

(22,676

)

(3,190

)

(16,198

)

(42,064

)

Government grants

 

8,925

 

2,870

 

67

 

11,862

 

Total operating costs and expenses

 

(493,096

)

(113,141

)

(55,832

)

(662,069

)

Income from operations

 

34,841

 

90,981

 

452

 

126,274

 

 

18


 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

 

 

Three months ended December 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

 

173,415

 

399

 

 

173,814

 

Recurring service fees

 

139,996

 

2,439

 

 

142,435

 

Performance-based income

 

147

 

 

 

147

 

Other service fees

 

39,831

 

1,028

 

85,353

 

126,212

 

Total revenues from others

 

353,389

 

3,866

 

85,353

 

442,608

 

Revenues from funds Gopher manages

 

 

 

 

 

 

 

 

 

One-time commissions

 

69,018

 

80

 

 

69,098

 

Recurring service fees

 

159,812

 

146,125

 

 

305,937

 

Performance-based income

 

 

10,861

 

 

10,861

 

Total revenues from funds Gopher manages

 

228,830

 

157,066

 

 

385,896

 

Total revenues

 

582,219

 

160,932

 

85,353

 

828,504

 

Less: VAT related surcharges 

 

(3,751

)

(730

)

(1,920

)

(6,401

)

Net revenues

 

578,468

 

160,202

 

83,433

 

822,103

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(162,215

)

 

(423

)

(162,638

)

Others

 

(152,045

)

(84,132

)

(29,300

)

(265,477

)

Total compensation and benefits

 

(314,260

)

(84,132

)

(29,723

)

(428,115

)

Selling expenses

 

(91,429

)

(7,278

)

(6,058

)

(104,765

)

General and administrative expenses 

 

(52,444

)

(27,838

)

(14,656

)

(94,938

)

Other operating expenses

 

(15,241

)

(1,722

)

(34,747

)

(51,710

)

Government grants 

 

13,300

 

2,090

 

1,755

 

17,145

 

Total operating costs and expenses 

 

(460,074

)

(118,880

)

(83,429

)

(662,383

)

Income from operations

 

118,394

 

41,322

 

4

 

159,720

 

 

19


 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)

 

 

 

Twelve months ended December 31, 2019

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending and
other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from others

 

 

 

 

 

 

 

 

 

One-time commissions

 

688,652

 

2,208

 

 

690,860

 

Recurring service fees

 

520,013

 

4,679

 

 

524,692

 

Performance-based income

 

23,333

 

104

 

 

23,437

 

Other service fees

 

222,912

 

4,274

 

295,772

 

522,958

 

Total revenues from others

 

1,454,910

 

11,265

 

295,772

 

1,761,947

 

Revenues from funds Gopher manages

 

 

 

 

 

 

 

 

 

One-time commissions

 

239,409

 

1,399

 

 

240,808

 

Recurring service fees

 

635,437

 

685,336

 

 

1,320,773

 

Performance-based income

 

97

 

89,551

 

 

89,648

 

Total revenues from funds Gopher manages

 

874,943

 

776,286

 

 

1,651,229

 

Total revenues

 

2,329,853

 

787,551

 

295,772

 

3,413,176

 

Less: VAT related surcharges

 

(10,574

)

(3,971

)

(6,819

)

(21,364

)

Net revenues

 

2,319,279

 

783,580

 

288,953

 

3,391,812

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(625,044

)

 

 

(625,044

)

Others

 

(607,336

)

(279,895

)

(98,495

)

(985,726

)

Total compensation and benefits

 

(1,232,380

)

(279,895

)

(98,495

)

(1,610,770

)

Selling expenses

 

(287,541

)

(26,661

)

(17,144

)

(331,346

)

General and administrative expenses

 

(316,480

)

(75,605

)

(35,130

)

(427,215

)

Other operating expenses

 

(103,846

)

(25,978

)

(66,969

)

(196,793

)

Government grants

 

58,704

 

15,878

 

14,696

 

89,278

 

Total operating costs and expenses

 

(1,881,543

)

(392,261

)

(203,042

)

(2,476,846

)

Income from operations

 

437,736

 

391,319

 

85,911

 

914,966

 

 

20


 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

 

 

Twelve months ended December 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

 

731,424

 

1,585

 

 

733,009

 

Recurring service fees

 

571,782

 

22,074

 

 

593,856

 

Performance-based income

 

42,570

 

531

 

 

43,101

 

Other service fees

 

113,570

 

8,225

 

240,091

 

361,886

 

Total revenues from others

 

1,459,346

 

32,415

 

240,091

 

1,731,852

 

Revenues from funds Gopher manages

 

 

 

 

 

 

 

 

 

One-time commissions

 

292,899

 

2,085

 

 

294,984

 

Recurring service fees

 

564,228

 

618,465

 

 

1,182,693

 

Performance-based income

 

1,739

 

98,794

 

 

100,533

 

Total revenues from funds Gopher manages

 

858,866

 

719,344

 

 

1,578,210

 

Total revenues

 

2,318,212

 

751,759

 

240,091

 

3,310,062

 

Less: VAT related surcharges 

 

(12,206

)

(3,228

)

(5,020

)

(20,454

)

Net revenues

 

2,306,006

 

748,531

 

235,071

 

3,289,608

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(631,234

)

 

(2,365

)

(633,599

)

Others

 

(534,516

)

(273,098

)

(122,979

)

(930,593

)

Total compensation and benefits

 

(1,165,750

)

(273,098

)

(125,344

)

(1,564,192

)

Selling expenses

 

(367,589

)

(22,200

)

(22,931

)

(412,720

)

General and administrative expenses 

 

(164,802

)

(80,873

)

(33,712

)

(279,387

)

Other operating expenses

 

(54,291

)

(25,310

)

(89,767

)

(169,368

)

Government grants 

 

53,620

 

6,148

 

2,815

 

62,583

 

Total operating costs and expenses 

 

(1,698,812

)

(395,333

)

(268,939

)

(2,363,084

)

Income (loss) from operations

 

607,194

 

353,198

 

(33,868

)

926,524

 

 

21


 

Noah Holdings Limited

Supplement Revenue Information by Geography

(unaudited)

 

 

 

 Three months ended December 31, 2019

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending and
Other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Mainland China

 

324,935

 

173,100

 

57,379

 

555,414

 

Hong Kong

 

135,164

 

28,480

 

 

163,644

 

Others

 

70,545

 

3,640

 

 

74,185

 

Total revenues

 

530,644

 

205,220

 

57,379

 

793,243

 

 

 

 

 Three months ended December 31, 2018

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending and
Other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Mainland China

 

400,499

 

118,267

 

85,353

 

604,119

 

Hong Kong

 

180,042

 

42,033

 

 

222,075

 

Others

 

1,678

 

632

 

 

2,310

 

Total revenues

 

582,219

 

160,932

 

85,353

 

828,504

 

 

22


 

Noah Holdings Limited

Supplement Revenue Information by Geography

(unaudited)

 

 

 

Twelve months ended December 31, 2019

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending and
Other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Mainland China

 

1,494,742

 

676,837

 

295,772

 

2,467,351

 

Hong Kong

 

633,168

 

99,957

 

 

733,125

 

Others

 

201,943

 

10,757

 

 

212,700

 

Total revenues

 

2,329,853

 

787,551

 

295,772

 

3,413,176

 

 

 

 

Twelve months ended December 31, 2018

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending and
Other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Mainland China

 

1,750,754

 

565,137

 

240,091

 

2,555,982

 

Hong Kong

 

565,061

 

185,990

 

 

751,051

 

Others

 

2,397

 

632

 

 

3,029

 

Total revenues

 

2,318,212

 

751,759

 

240,091

 

3,310,062

 

 

23


 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)6

 

 

 

Three months ended

 

 

 

December 31,

 

December 31,

 

 

 

 

 

2018

 

2019

 

Change

 

 

 

RMB’000

 

RMB’000

 

 

 

Net income attributable to Noah shareholders

 

155,639

 

102,793

 

(34.0

%)

Adjustment for share-based compensation

 

34,174

 

20,977

 

(38.6

%)

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

 

(4,596

)

2,158

 

N.A.

 

Add: gains from sales of equity securities

 

12,011

 

 

N.A.

 

Less: tax effect of adjustments

 

(16,730

)

5,095

 

N.A.

 

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

 

223,150

 

116,517

 

(47.8

%)

 

 

 

 

 

 

 

 

Net margin attributable to Noah shareholders

 

18.9

%

13.0

%

 

 

Non-GAAP net margin attributable to Noah shareholders

 

27.1

%

14.8

%

 

 

 

 

 

 

 

 

 

 

Net income attributable to Noah shareholders per ADS, diluted

 

2.54

 

1.66

 

(34.6

%)

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

 

3.64

 

1.88

 

(48.4

%)

 


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.

 

24


 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)

 

 

 

Twelve months ended

 

 

 

December 31

 

December 31

 

 

 

 

 

2018

 

2019

 

Change

 

 

 

RMB’000

 

RMB’000

 

 

 

Net income attributable to Noah shareholders

 

811,297

 

829,151

 

2.2

%

Adjustment for share-based compensation

 

112,763

 

94,897

 

(15.8

%)

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

 

(39,557

)

15,628

 

N.A.

 

Add: gains from sales of equity securities

 

45,240

 

149,652

 

230.8

%

Less: tax effect of adjustments

 

(1,966

)

19,845

 

N.A.

 

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

 

1,010,823

 

1,038,227

 

2.7

%

 

 

 

 

 

 

 

 

Net margin attributable to Noah shareholders

 

24.7

%

24.4

%

 

 

Non-GAAP net margin attributable to Noah shareholders

 

30.7

%

30.6

%

 

 

 

 

 

 

 

 

 

 

Net income attributable to Noah shareholders per ADS, diluted

 

13.33

 

13.42

 

0.7

%

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

 

16.58

 

16.80

 

1.3

%

 

25


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