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Noah Holdings Limited Announces Unaudited Financial Results For The First Quarter Of 2015

SHANGHAI, May 18, 2015 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH), a leading wealth management services provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China today announced its unaudited financial results for the first quarter of 2015.

Starting from the fourth quarter of 2014, the Company has presented its financial results in three business segments, (i) wealth management, (ii) asset management and (iii) internet finance. To facilitate comparisons with these first quarter 2015 financial results, the Company has also presented its historical first quarter 2014 financial results in this press release according to these three business segments.

FIRST QUARTER 2015 FINANCIAL HIGHLIGHTS

  • Net revenues in the first quarter of 2015 were US$71.8 million, a 42.9% increase from the corresponding period in 2014.

(US$ millions, except percentages)

Q1 2014


Q1 2014 Segment %


Q1 2015


Q1 2015 Segment %


YoY Change

Wealth management

38.8


77.2%


54.8


76.4%


41.3%

Asset management

11.0


22.0%


15.5


21.6%


40.5%

Internet finance

0.4


0.8%


1.5


2.0%


249.3%

Total net revenues

50.3


100.0%


71.8


100.0%


42.9%

  • Income from operations in the first quarter of 2015 was US$22.8 million, a 10.1% increase from the corresponding period in 2014.

(US$ millions, except percentages)

Q1 2014


Q1 2014 Segment %


Q1 2015


Q1 2015 Segment %


YoY Change

Wealth management

15.5


75.1%


20.7


91.1%


33.4%

Asset management

5.7


27.5%


6.4


28.1%


12.7%

Internet finance

(0.5)


(2.6%)


(4.4)


(19.2%)


712.7%

Income from operations

20.7


100.0%


22.8


100.0%


10.1%

  • Net income attributable to Noah shareholders in the first quarter of 2015 was US$21.2 million, a 25.5% increase from the corresponding period in 2014.
  • Non-GAAP[1] net income attributable to Noah shareholders in the first quarter of 2015 was US$22.5 million, a 24.3% increase from the corresponding period in 2014.

FIRST QUARTER 2015 OPERATIONAL UPDATES

Wealth Management Business

The Company's wealth management business provides global wealth investment and asset allocation services to high net worth individuals and enterprise clients in China.

  • The total number of registered clients as of March 31, 2015 was 74,895, consisting of 72,027 registered individual clients, 2,749 registered enterprise clients and 119 wholesale clients that have entered into cooperation agreements with the Company, a 34.9% increase since March 31, 2014.
  • The total number of active clients[2] during the first quarter of 2015 was 5,275, a 61.9% increase from the corresponding period in 2014.
  • The aggregate value of wealth management products distributed by the Company during the first quarter of 2015 was US$3.9 billion (approximately RMB24.6 billion), a 64.2% increase from the corresponding period in 2014.

Product type

Three months ended


March 31, 2014


March 31, 2015


(RMB in billions, except percentages)

Fixed income products

11.1


74.3%


12.2


49.5%

Private equity products

2.6


17.0%


5.4


21.9%

Secondary market equity fund products

0.9


6.2%


6.5


26.6%

Other products

0.4


2.5%


0.5


2.0%

All products

15.0


100.0%


24.6


100.0%

  • The average transaction value per client[3] in the first quarter of 2015 was US$0.8 million (approximately RMB4.7 million), a 1.4% increase from the corresponding period in 2014, reflecting a change in product mix.
  • The coverage network as of March 31, 2015 included 112 branches and sub-branches covering 64 cities, up from 94 branches and sub-branches covering 63 cities as of December 31, 2014.
  • The number of relationship managers was 834 as of March 31, 2015, up from 604 as of March 31, 2014 and 779 as of December 31, 2014.

[1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures as adjusted by excluding the effects of all forms of share-based compensation.

[2] "Active clients" refers to those registered clients who purchased wealth management products distributed by Noah during the period specified.

[3] "Average transaction value per client" refers to the average value of wealth management products distributed by Noah that are purchased by active clients during the period specified.

Asset Management Business

The Company's asset management business manages and develops financial products denominated in both Renminbi and U.S. dollars, covering real estate funds and funds of funds, including private equity funds, real estate funds, hedge funds and fixed income funds.

  • The total assets under management as of March 31, 2015 were US$9.4 billion (approximately RMB58.9 billion), a 53.9% increase from March 31, 2014 and an 18.5% increase from December 31, 2014.

Product type

As of December
31, 2014


Asset Growth


Asset Expiration


As of March
31, 2015 


(RMB in billions, except percentages)

Real estate funds and real estate fund of funds

31.0


62.4%


7.8


(3.7)


35.1


59.7%

Private equity fund of funds

10.4


20.9%


4.6


(0.2)


14.8


25.1%

Secondary market equity fund of funds

2.6


5.2%


2.4


(0.8)


4.2


7.1%

Other fixed income fund of funds

5.7


11.5%


0.8


(1.7)


4.8


8.1%

All products

49.7


100.0%


15.6


(6.4)


58.9


100.0%

Internet Finance Business

The Company's internet finance business provides financial products and services through a proprietary internet finance platform to white-collar professionals in China.

  • The aggregate value of financial products distributed by the Company through its internet finance platform in the first quarter of 2015 was US$346.7 million (approximately RMB2.2 billion).
  • The total number of enterprise clients as of March 31, 2015 was 320, up from 205 as of December 31, 2014.

"We started 2015 strongly, with both revenues and net income in line with our expectations.  Our transformation into a comprehensive financial services platform with both wealth and asset management capabilities is gaining momentum." said Ms. Jingbo Wang, Co-founder, Chairwoman of the Board of Directors and Chief Executive Officer. "Revenues for the quarter increased 43% year-over-year as we continued to improve our wealth and asset management franchise and acquired a significant number of high net worth, enterprise and family office clients. We also continued to diversify our product mix. Our internet finance platform has gained substantial traction since the end of 2014, with transaction value growing beyond our expectation and our number of enterprise clients increasing by over 56%." 

Mr. Kenny Lam, Group President of Noah, said, "Demand for international asset allocation continues to expand tremendously, as we build our wealth and asset management capabilities in Hong Kong. In addition to the strategic investments for our mainland China business, we are exploring deeper partnerships with international players for our services in Hong Kong. During 2015, we will improve our IT and operating systems across Noah to support our rapid growth for the next 3 to 5 years. We are confident that these initiatives will help cement our industry position, enhance our market share and set a firm foundation for future growth."

FIRST QUARTER 2015 FINANCIAL RESULTS

Net Revenues

Net revenues for the first quarter of 2015 were US$71.8 million, a 42.9% increase from the corresponding period in 2014, primarily due to increases in one-time commission revenues, recurring service fees and performance-based income.

  • Wealth Management Business
    • Net revenues from one-time commissions for the first quarter of 2015 were US$30.3 million, a 65.9% increase from the corresponding period in 2014, primarily due to an increase in the aggregate value of the wealth management products distributed by the Company and a shift towards products with higher average commission rates.
    • Net revenues from recurring service fees for the first quarter of 2015 were US$21.7 million, an 8.2% increase from the corresponding period in 2014, mainly due to the cumulative effect of finance products previously distributed by the Company with chargeable recurring service fees.
    • Net revenues from other service fees for the first quarter of 2015 were US$2.8 million, a 566.5% increase from the corresponding period in 2014, primarily consisting of performance-based income received for secondary equity market fund products distributed by the Company.
  • Asset Management Business
    • Net revenues from recurring service fees for the first quarter of 2015 were US$12.9 million, a 19.0% increase from the corresponding period in 2014, primarily due to the increase in assets under management by the Company. 
    • Net revenues from other service fees for the first quarter of 2015 were US$2.6 million, primarily consisting of performance-based income received for managing funds of secondary equity market funds.
  • Internet Finance Business
    • Net revenues for the first quarter of 2015 were US$1.5 million. Revenue from the internet finance business was presented as other service fees in periods prior to the fourth quarter of 2014.

Operating costs and expenses

Operating costs and expenses includes compensation and benefits, selling expenses, G&A expenses, other operating expenses and government subsidies. Operating cost and expenses for the first quarter of 2015 were US$49.0 million, a 65.8% increase from the corresponding period in 2014.

  • Wealth Management Business
    Operating costs and expenses for the first quarter of 2015 were US$34.1 million, a 46.6% increase from the corresponding period in 2014.
    • Compensation and benefits includes compensation for relationship managers and back-office employees. Compensation and benefits for the first quarter of 2015 were US$25.1 million, a 36.4% increase from the corresponding period in 2014. In the first quarter of 2015, relationship manager compensation increased by 42.3% from the corresponding period in 2014, reflecting an increase in the aggregate value of financial products they distributed. Other compensation for the first quarter of 2015 increased by 28.4% from the corresponding period in 2014 primarily due to an increase in the number of back-office employees.
    • Selling expenses for the first quarter of 2015 were US$6.1 million, a 65.1% increase from the corresponding period in 2014, primarily due to increased general marketing expenses due to an increase in our marketing efforts, as well as increased employee expenses and consulting fees. 
    • G&A expenses for the first quarter of 2015 were US$2.2 million, a 6.1% increase from the corresponding period in 2014.
    • Other operating expenses include other costs incurred directly in relation to the Company's revenues. Other operating expenses for the first quarter of 2015 were US$0.7 million, an increase of 55.2% from the corresponding period in 2014. The increase was primarily due to the growth of other businesses within the wealth management segment.
    • Government subsidies represent cash subsidies received from local governments for general corporate purposes. The Company received no government subsidies in the first quarter of 2015, compared to US$1.3 million in the corresponding period in 2014. 
  • Asset Management Business
    Operating costs and expenses for the first quarter of 2015 were US$9.1 million, a 69.9% increase from the corresponding period in 2014.
    • Compensation and benefits includes compensation of managers of institutional client relationships, fund managers and back-office employees. Compensation and benefits for the first quarter of 2015 were US$6.4 million, a 26.3% increase from the corresponding period in 2014, primarily due to an increase in performance fee compensation to fund managers corresponding to the increase in performance-based income and the expansion of institutional business.
    • Selling expenses for the first quarter of 2015 were US$0.4 million, a 15.5% decrease from the corresponding period in 2014.
    • G&A expenses for the first quarter of 2015 were US$2.3 million, a 67.5% increase from the corresponding period in 2014, primarily driven by increased consulting fees and conference fees.
    • Government subsidies represent cash subsidies received from local governments for general corporate purposes. The Company received no government subsidies in the first quarter of 2015, compared to US$1.5 million in the corresponding period in 2014.
  • Internet Finance Business
    Operating costs and expenses represented the Company's expenses in human resources, marketing and internet infrastructure, as well as other expenses incurred in promoting the Company's internet finance business. Operating costs and expenses for the first quarter of 2015 were US$5.8 million, primarily consisting of compensation and benefits of US$3.8 million, selling expenses of US$0.5 million, G&A expenses of US$1.2 million and other operating expenses of US$0.3 million.

Operating Margin

Operating margin for the first quarter of 2015 was 31.7%, as compared to 41.2% for the corresponding period in 2014.

  • Wealth Management Business
    Operating margin for the first quarter of 2015 was 37.8%, compared to 40.1% for the corresponding period in 2014. The decrease was mainly because the Company received no government subsidies in the first quarter of 2015, compared to government subsidies of US$1.3 million in the corresponding period in 2014.
  • Asset Management Business
    Operating margin decreased to 41.2% for the first quarter of 2015 from 51.4% for the corresponding period in 2014. The decrease was primarily because the Company received no government subsidies in the first quarter of 2015, compared to government subsidies of US$1.5 million in the corresponding period in 2014.
  • Internet Finance Business
    Operating loss for the first quarter of 2015 was US$4.4 million compared with US$0.5 million for the corresponding period of the prior year.

Income Tax Expenses

Income tax expenses for the first quarter of 2015 were US$6.1 million, a 9.5% increase from the corresponding period in 2014. The increase was primarily due to an increase in taxable income. 

Net Income

  • Net Income
    • Net income attributable to Noah shareholders for the first quarter of 2015 was US$21.2 million, a 25.5% increase from the corresponding period in 2014. 
    • Net margin for the first quarter of 2015 was 28.7%, as compared to 34.8% for the corresponding period in 2014. 
    • Net income per basic and diluted ADS for the first quarter of 2015 were US$0.38 and US$0.37, respectively, as compared to US$0.30 and US$0.30, respectively, for the corresponding period in 2014.
  • Non-GAAP Net Income Attributable to Noah Shareholders
    • Non-GAAP net income attributable to Noah shareholders for the first quarter of 2015 was US$22.5 million, a 24.3% increase from the corresponding period in 2014. 
    • Non-GAAP net margin for the first quarter of 2015 was 31.3%, as compared to 36.0% for the corresponding period in 2014.
    • Non-GAAP net income per diluted ADS for the first quarter of 2015 was US$0.38, as compared to US$0.32 for the corresponding period in 2014. 

Balance Sheet and Cash Flow

As of March 31, 2015, the Company had US$274.7 million in cash and cash equivalents, compared to US$160.6 million as of March 31, 2014 and US$282.1 million as of December 31, 2014.

Cash outflow from the Company's operating activities during the first quarter of 2015 was US$8.6 million, primarily due to the payment of annual bonuses during the first quarter of 2015.

Cash outflow from the Company's investing activities during the first quarter of 2015 was US$70.7 million, primarily due to an increase in investments in affiliates and short-term investments.

Cash inflow from the Company's financing activities for the first quarter of 2015 was US$71.7 million, primarily due to the issuance of US$80 million in aggregate principal amount of convertible notes in February 2015, which was partially offset by the repayment of US$8.1 million in bank loans in the first quarter of 2015.

2015 FORECAST

The Company reiterates its estimates that non-GAAP net income attributable to Noah shareholders for the full year 2015 is expected to be in the range of US$90.0 million to US$95.0 million, an increase of 15.9% to 22.3% compared to the full year 2014. This estimate reflects management's current business outlook and is subject to change.

CONFERENCE CALL

Senior management will host a conference call on Monday, May 18, 2015 at 8:00 pm Eastern / 5:00 pm Pacific / 8:00 am Hong Kong, Tuesday, May 19, 2015 to discuss its first quarter unaudited financial results and recent business activities. The conference call may be accessed by calling the following numbers:


Toll Free

United States

+1-888-346-8982

China

4001-201203

Hong Kong

800-905-945


Toll

International

+1-412-902-4272

Conference Title

Noah Holdings Limited First Quarter 2015 Earnings

A telephone replay will be available one hour after the call until May 26, 2015 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International). The replay access code is 10065018.

A live webcast of the conference call and replay will be available in the investor relations section of the Company's website at http://noahwm.investorroom.com.

DISCUSSION OF NON-GAAP FINANCIAL MEASURES:

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned "Reconciliation of GAAP to Non-GAAP Results" below.

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

When evaluating the Company's operating performance in the periods presented, management reviewed non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income, non-GAAP income per diluted ADS and non-GAAP net margin provides important supplemental information to investors regarding financial and business trends relating to the Company's financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.

ABOUT NOAH HOLDINGS LIMITED

Founded in 2005, Noah Holdings Limited (NYSE: NOAH) is a leading wealth management services provider with a focus on global wealth investment and asset allocation services for high net worth individuals and enterprises in China. From its founding to March 31, 2015, Noah has distributed over US$33.0 billion of wealth management products. As of March 31, 2015, Noah had assets under management of US$9.4 billion.

Noah distributes a wide array of wealth management products, including fixed income products, private equity fund products, mutual fund products and insurance products. Noah also manages private equity funds, real estate funds, hedge funds, and other assets through Gopher Asset Management. In addition, in the second quarter of 2014, the Company launched a proprietary internet finance platform to provide financial products and services to white-collar professionals and enterprise clients in China. Noah delivers customized financial solutions to clients through a network of 834 relationship managers across 112 branches and sub-branches in 64 cities in China, and serves the international investment needs of its clients through a wholly owned subsidiary in Hong Kong. The Company's wealth management business had 74,895 registered clients as of March 31, 2015.

Noah has won numerous awards, including Hurun Report's Popular Independent Wealth Management Institution award in 2013 and 2014, Forbes' Best Potential Business in China award in 2015, Deloitte's Technology Fast 500 Asia Pacific award in 2013, and STCN's Best Third Party Wealth Management Company award in 2014.

For more information please visit Noah at www.noahwm.com.

Foreign Currency Translation

This release contains translations of certain Renminbi ("RMB") amounts into U.S. dollar ("US$"). Assets and liabilities are translated at the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on March 31, 2015, which was US$1.00 to RMB6.1990. Equity accounts are translated at historical exchange rates. Revenues, expenses, gains and losses are translated using the average of the exchange rates set forth in the H.10 statistical release of the Federal Reserve Board for the three months ended March 31, 2015, which was US$1.00 to RMB6.2360. Translation adjustments are reported as cumulative translation adjustments and are a separate component of other comprehensive income. No representation is intended to imply that the RMB amounts could have been, or could be, converted, realized, or settled into US$ at that rate or any other rate.

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 2015 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 actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industry; its ability to attract and retain quality employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industry in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not 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 applicable law.


Contacts:
Noah Holdings Limited
Kevin Yang, Director of Investor Relations
Tel: +86 21 2510 0889
ir@noahwm.com

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --



Noah Holdings Limited

Condensed Consolidated Balance Sheets

(In U.S. dollars)

(unaudited)





As of





December 31,

2014


March 31,

2015





$


$

Assets






Current assets:







Cash and cash equivalents


282,081,829


274,749,812



Restricted cash


161,171


161,316



Short-term investments


22,182,012


74,421,069



Accounts receivable, net of allowance for doubtful accounts of nil at December 31, 2014 and March 31, 2015


10,970,775


 

21,301,387



Loans receivable


6,932,469


7,290,450



Deferred tax assets


3,522,054


3,379,741



Amounts due from related parties


31,085,548


33,465,479



Other current assets


9,430,135


12,561,226



Total current assets


366,365,993


427,330,480









Long-term investments


9,870,939


29,881,073


Investment in affiliates


35,817,261


38,095,239


Property and equipment, net


14,852,566


15,495,178


Non-current deferred tax assets


2,262,489


2,206,652


Other non-current assets


1,930,814


2,324,841

Total Assets


431,100,062


515,333,463








Liabilities and Equity






Current liabilities:







Accrued payroll and welfare expenses


51,649,188


34,090,116



Income tax payable


8,936,390


12,269,189



Amounts due to related parties


125,459


236



Deferred revenues


15,747,984


15,598,399



Short-term bank loans


8,058,537


-



Other current liabilities


27,134,180


30,556,280



Total current liabilities


111,651,738


92,514,220









Non-current uncertain tax position liabilities


1,793,459


1,794,380


Convertible notes


-


80,000,000


Other non-current liabilities


5,004,281


5,791,812


Total Liabilities


118,449,478


180,100,412









Equity


312,650,584


335,233,051

Total Liabilities and Equity


431,100,062


515,333,463

 

 


Noah Holdings Limited

 Condensed Consolidated Income Statements

 (In U.S. dollars, except for ADS data, per ADS data and percentages)

 (unaudited)



 Three months ended


 Change


March 31,


 March 31,



2014


2015



Revenues:

$


$



Third-party revenues






One-time commissions

12,147,348


19,533,896


60.8%

Recurring service fees

10,559,291


12,679,666


20.1%

Other service fees

967,963


7,060,223


629.4%

Total third-party revenues

23,674,602


39,273,785


65.9%

Related party revenues






One-time commissions

7,210,338


12,402,293


72.0%

Recurring service fees

22,141,193


23,759,761


7.3%

Other service fees

107,889


22,576


(79.1%)

Total related party revenues

29,459,420


36,184,630


22.8%

Total revenues

53,134,022


75,458,415


42.0%

Less: business taxes and related surcharges

(2,875,503)


(3,659,404)


27.3%

Net revenues

50,258,519


71,799,011


42.9%

Operating costs and expenses:






Compensation and benefits






Relationship manager compensation

(10,656,902)


(16,014,587)


50.3%

Performance fee compensation

-


(860,682)


0.0%

Other compensation

(13,413,956)


(18,410,072)


37.2%

Total compensation and benefits

(24,070,858)


(35,285,341)


46.6%

Selling expenses

(4,152,915)


(6,985,360)


68.2%

General and administrative expenses

(3,705,818)


(5,675,151)


53.1%

Other operating expenses

(477,320)


(1,074,384)


125.1%

Government subsidies

2,832,420


-


(100.0%)

Total operating costs and expenses

(29,574,491)


(49,020,236)


65.8%

Income from operations

20,684,028


22,778,775


10.1%

Other income:






Interest income

1,377,528


1,409,645


2.3%

Interest expenses

-


(490,536)


0.0%

Investment income

1,174,875


1,383,995


17.8%

Other income

(544,240)


124,654


(122.9%)

Total other income

2,008,163


2,427,758


20.9%

Income before taxes and loss from equity in affiliates

22,692,191


25,206,533


11.1%

Income tax expense

(5,574,108)


(6,102,929)


9.5%

Income from equity in affiliates

374,732


1,486,751


296.8%

Net income

17,492,815


20,590,355


17.7%

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

617,382


(593,848)


(196.2%)

Net income attributable to Noah shareholders

16,875,433


21,184,203


25.5%







Income per ADS, basic

0. 30


0.38


26.7%

Income per ADS, diluted

0. 30


0.37


23.3%

Margin analysis:






Operating margin

41.2%


31.7%



Net margin

34.8%


28.7%



Weighted average ADS equivalent: [1]






Basic

55,469,460


56,158,164



Diluted

56,373,757


58,816,048



ADS equivalent outstanding at end of period

55,608,001


56,201,776



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

 

 

 


Noah Holdings Limited

 Condensed Comprehensive Income Statements

(In U.S. dollars)

(unaudited)


 Three months ended


 Change


 March 31,


 March 31,



2014


2015




$


$



Net income

17,492,815


20,590,355


17.7%

Other comprehensive income, net of tax:






Foreign currency translation adjustments

(5,362,331)


338,801


(106.3%)

Fair value fluctuation of available for sale

   investment (after tax)

-


29,729


-

Comprehensive income

12,130,484


20,958,885


72.8%

Less: Comprehensive income (loss) attributable to

  non-controlling interests

315,664


(526,912)


(266.9%)

Comprehensive income attributable to Noah

  shareholders

11,814,820


21,485,797


81.9%

 

 

Noah Holdings Limited

 Supplemental Information

(unaudited)


 As of 


 Change


March 31, 2014


March 31, 2015








 Number of registered clients

55,519


74,895


34.9%

 Number of relationship managers

604


834


38.1%

 Number of cities

56


64


14.3%














 Three months ended


 Change


March 31, 2014


March 31, 2015



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

 Number of active clients

3,258


5,275


61.9%

 Transaction value:






Fixed income products

11,120


12,158


9.3%

Private equity fund products

2,550


5,380


111.0%

Secondary market equity fund products

928


6,546


605.4%

Other products, including mutual fund products, and insurance products

372


502


35.1%

Total transaction value

14,970


24,586


64.2%

Average transaction value per client

4.59


4.66


1.4%

 

 

Noah Holdings Limited 

Segment Condensed Income Statements 

(In U.S. dollars, except for ADS data, per ADS data and percentages) 

(unaudited) 


Three months ended March 31,2014


Wealth Management


Asset Management


Internet




Business


Business


Finance


Total


$


$


$


$









Revenues:








Third-party revenues








    One-time commissions

12,147,348


-


-


12,147,348

    Recurring service fees

7,652,232


2,907,059


-


10,559,291

    Other service fees

413,401


112,045


442,517


967,963

Total third-party revenues 

20,212,981


3,019,104


442,517


23,674,602

Related party revenues








    One-time commissions

7,210,338


-


-


7,210,338

    Recurring service fees

13,614,131


8,527,062


-


22,141,193

    Other service fees

23,441


84,448


-


107,889

Total related party revenues 

20,847,910


8,611,510


-


29,459,420

Total revenues

41,060,891


11,630,614


442,517


53,134,022

    Less: business taxes and related surcharges 

(2,266,600)


(584,122)


(24,781)


(2,875,503)

Net revenues

38,794,291


11,046,492


417,736


50,258,519

Operating costs and expenses:








    Compensation and benefits








        Relationship manager compensation

(10,656,902)


-


-


(10,656,902)

        Other compensation

(7,736,210)


(5,038,574)


(639,172)


(13,413,956)

    Total compensation and benefits

(18,393,112)


(5,038,574)


(639,172)


(24,070,858)

    Selling expenses

(3,697,176)


(433,935)


(21,804)


(4,152,915)

    General and administrative expenses 

(2,048,102)


(1,365,095)


(292,621)


(3,705,818)

    Other operating expenses 

(459,829)


(17,417)


(74)


(477,320)

    Government subsidies 

1,345,468


1,486,952


-


2,832,420

Total operating costs and expenses 

(23,252,751)


(5,368,069)


(953,671)


(29,574,491)

Income from operations 

15,541,540


5,678,423


(535,935)


20,684,028

















Noah Holdings Limited 

Segment Condensed Income Statements 

(In U.S. dollars, except for ADS data, per ADS data and percentages) 

(unaudited) 


Three months ended March 31,2015


Wealth Management


Asset Management


Internet




Business


Business


Finance


Total


$


$


$


$









Revenues:








Third-party revenues








    One-time commissions

19,533,896


-


-


19,533,896

    Recurring service fees

10,297,290


2,382,376


-


12,679,666

    Other service fees

2,895,761


2,722,289


1,442,173


7,060,223

Total third-party revenues 

32,726,947


5,104,665


1,442,173


39,273,785

Related party revenues








    One-time commissions

12,402,293


-


-


12,402,293

    Recurring service fees

12,580,895


11,178,866


-


23,759,761

    Other service fees

-


-


22,576


22,576

Total related party revenues 

24,983,188


11,178,866


22,576


36,184,630

Total revenues

57,710,135


16,283,531


1,464,749


75,458,415

    Less: business taxes and related surcharges

(2,892,158)


(761,696)


(5,550)


(3,659,404)

Net revenues

54,817,977


15,521,835


1,459,199


71,799,011

Operating costs and expenses:








    Compensation and benefits








        Relationship manager compensation

(15,160,193)


(496,287)


(358,107)


(16,014,587)

        Performance fee compensation

-


(860,682)


-


(860,682)

        Other compensation

(9,933,935)


(5,006,543)


(3,469,594)


(18,410,072)

    Total compensation and benefits

(25,094,128)


(6,363,512)


(3,827,701)


(35,285,341)

    Selling expenses

(6,105,085)


(366,767)


(513,508)


(6,985,360)

    General and administrative expenses 

(2,172,912)


(2,286,942)


(1,215,297)


(5,675,151)

    Other operating expenses 

(713,806)


(102,291)


(258,287)


(1,074,384)

Total operating costs and expenses 

(34,085,931)


(9,119,512)


(5,814,793)


(49,020,236)

Income from operations 

20,732,046


6,402,323


(4,355,594)


22,778,775

Noah Holdings Limited

 Reconciliation of GAAP to Non-GAAP Results

 (In U.S. dollars, except for ADS data and percentages)

 (unaudited)


                                      Three months ended




 March 31,


 March 31,


 Change



2014


2015




$


$











Net margin

34.8%


28.7%




Adjusted net margin (non-GAAP)*

37.2%


30.5%











Net income attributable to Noah shareholders

16,875,433


21,184,203


25.5%


Adjustment for share-based compensation

    related to:







           Share options

138,524


455,576


228.9%


           Restricted shares

1,076,917


846,862


(21.4%)


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

18,090,874


 

22,486,641


24.3%









Net income attributable to Noah shareholders

   per ADS, diluted

0.30


0.37


23.3%


Adjusted net income attributable to Noah

   shareholders per ADS, diluted  (non-

   GAAP)*

0.32


0.38


18.8%


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

 


SOURCE Noah Holdings Limited

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