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Noah Holdings Limited Announces Unaudited Financial Results for the Second Quarter of 2017

SHANGHAI, Aug. 28, 2017 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the second quarter of 2017.

SECOND QUARTER 2017 FINANCIAL HIGHLIGHTS

  • Net revenues for the second quarter of 2017 were RMB707.3 million (US$104.3 million), an 8.5% increase from the corresponding period in 2016.

(RMB millions,

except percentages)

Q2 2016



Q2  2017



YoY Change

Wealth management

505.2



550.6



9.0%

Asset management

135.2



130.3



(3.6%)

Internet financial services

11.3



26.4



133.0%

Total net revenues

651.7



707.3



8.5%

  • Income from operations for the second quarter of 2017 was RMB224.3 million (US$33.1 million), a 15.5% increase from the corresponding period in 2016.

(RMB millions,

except percentages)

Q2 2016



Q2 2017



YoY Change

Wealth management

167.4



185.2



10.7%

Asset management

68.8



69.8



1.4%

Internet financial services

(42.1)



(30.8)



(26.9%)

Total income from operations

194.1



224.3



15.5%

 

  • Net income attributable to Noah shareholders for the second quarter of 2017 was RMB207.0 million (US$30.5 million), a 13.6% increase from the corresponding period in 2016.
  • Non-GAAP[1] net income attributable to Noah shareholders for the second quarter of 2017 was RMB226.5 million (US$33.4 million), a 14.4% increase from the corresponding period in 2016.

SECOND QUARTER 2017 OPERATIONAL UPDATES

Wealth Management Business

The Company's wealth management business offers wealth management products and provides comprehensive financial services to high net worth individuals, enterprise and institutional clients. Through its wealth management business, Noah primarily distributes onshore and offshore fixed income products, private equity products, secondary market products and insurance products.

  • Total number of registered clients as of June 30, 2017 was 164,728, a 43.4% increase from June 30, 2016.
  • Total number of active clients[2] during the second quarter of 2017 was 4,484, a 9.0% decrease from June 30, 2016.
  • Aggregate value of wealth management products distributed during the second quarter of 2017 was RMB33.0 billion (US$4.9 billion), an 18.8% increase from the second quarter of 2016.

Product type

Three months ended June 30,


2016

2017


(RMB in billions, except percentages)

Fixed income

17.0

61.2%

23.5

71.3%

Private equity

7.6

27.3%

8.3

25.0%

Secondary market equity

2.8

10.1%

1.1

3.4%

Other products

0.4

1.4%

0.1

0.3%

All products

27.7

100.0%

33.0

100.0%

 

  • Average transaction value per client[3] for the second quarter of 2017 was RMB7.4 million (US$1.1 million), a 30.5% increase from the corresponding period in 2016.
  • Coverage network included 205 branches and sub-branches covering 76 cities as of June 30, 2017, up from 199 branches and sub-branches covering 74 cities as of March 31, 2017, and 175 branches and sub-branches covering 68 cities as of June 30, 2016.
  • Number of relationship managers was 1,259 as of June 30, 2017, relatively flat from March 31, 2017 and a 15.2% increase from June 30, 2016.

[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 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 were purchased by active clients during the period specified.

Asset Management Business

Gopher Asset Management ("Gopher"), a subsidiary of the Company, is a leading alternative asset manager in China. Gopher develops and manages private equity, real estate, secondary market, credit and other investments denominated in both Renminbi and foreign currencies.

  • Total assets under management as of June 30, 2017 were RMB138.7 billion (US$20.5 billion), a 7.0% increase from March 31, 2017 and a 37.1% increase from June 30, 2016.

Investment type

As of March 31,
2017

Asset
Growth

Asset
Expiration/
Redemption

As of June 30,
2017


(RMB billions, except percentages)


Real estate

19.8

15.3%

1.6

6.0

15.4

11.1%

Private equity

66.1

51.0%

6.7

0.7

72.2

52.0%

Secondary market

6.9

5.3%

0.0

0.1

6.9

4.9%

Credit

33.2

25.6%

14.5

7.0

40.7

29.4%

Other investments

3.5

2.7%

-

-

3.5

2.5%

All Investments

129.6

100.0%

22.9

13.8

138.7

100.0%









Internet Financial Service Business

The Company's Internet financial service business includes its online wealth management platform as well as micro-lending, payment processing and other online services.

  • Aggregate value of financial products distributed by the Company's Internet wealth management platform in the second quarter of 2017 was RMB6.2 billion (US$0.9 billion), a 7.3% increase from the corresponding period in 2016.
  • Total number of clients through the Company's Internet wealth management platform as of June 30, 2017 was 438,981, up from 425,708 and 324,918 as of March 31, 2017 and June 30, 2016, respectively.

Mr. Kenny Lam, Group President of Noah, said, "We have delivered robust earnings in the first half of 2017.  We are excited by the new talents we are on-boarding to our core team and the foundation we have built.  We will continue to focus on executing our long-term strategy as China's leading wealth and asset manager."

SECOND QUARTER 2017 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2017 were RMB707.3 million (US$104.3 million), an 8.5% increase from the corresponding period in 2016, primarily driven by increased recurring service fee revenues.

  • Wealth Management Business
    • Net revenues from one-time commissions for the second quarter of 2017 were RMB297.6 million (US$43.9 million), a 2.0% increase from the corresponding period in 2016. The increase was mainly due to the increase in the aggregate value of wealth management products.
    • Net revenues from recurring service fees for the second quarter of 2017 were RMB209.3 million (US$30.9 million), a 7.5% increase from the corresponding period in 2016. The increase was primarily due to the cumulative effect of wealth management products with recurring service fees previously distributed.
    • Net revenues from performance-based income for the second quarter of 2017 were RMB22.0 million (US$3.2 million), compared with RMB0.1 million in the corresponding period of 2016, due to the realization of performance-based income from secondary market equity products and private equity products distributed in previous periods.
    • Net revenues from other service fees for the second quarter of 2017 were RMB21.6 million (US$3.2 million), a 17.4% increase from the corresponding period in 2016, primarily due to the growth of new business within the wealth management segment.
  • Asset Management Business
    • Net revenues from recurring service fees for the second quarter of 2017 were RMB128.3 million (US$18.9 million), a 17.0% increase from the corresponding period in 2016. The increase was primarily due to the increase in assets under management.
    • Net revenues from performance-based income for the second quarter of 2017 were RMB1.5 million (US$0.2 million), compared with RMB23.6 million in the corresponding period of 2016.
  • Internet Financial Service Business
    • Net revenues for the second quarter of 2017 were RMB26.4 million (US$3.9 million), a 133.0% increase from the corresponding period in 2016. The increase was primarily due to the growth in overall Internet financial services, including online wealth management, micro-lending, payment processing and other services, compared with the corresponding period of 2016.

Operating costs and expenses

Operating costs and expenses include compensation and benefits, selling expenses, general and administrative expenses, other operating expenses and government subsidies. Operating costs and expenses for the second quarter of 2017 were RMB483.1 million (US$71.3 million), a 5.6% increase from the corresponding period in 2016. As the increase in net revenue outpaced the increase in operating costs and expenses year-on-year, the Company's operating margin improved in the second quarter of 2017 as discussed below.

  • Wealth Management Business
    Operating costs and expenses for the second quarter of 2017 were RMB365.4 million (US$53.9 million), an 8.2% increase from the corresponding period in 2016.
    • Compensation and benefits for the second quarter of 2017 were RMB250.8 million (US$37.0 million), a 0.3% decrease from the corresponding period in 2016.
    • Selling expenses for the second quarter of 2017 were RMB66.9 million (US$9.9 million), a 0.7% decrease from the corresponding period in 2016.
    • General and administrative expenses for the second quarter of 2017 were RMB29.9 million (US$4.4 million), a 6.2% decrease from the corresponding period in 2016, primarily due to the reduced loss from fixed asset disposal compared with the same period last year.
    • Other operating expenses were RMB27.5 million (US$4.1 million) for the second quarter of 2017, an increase of 30.1% from the corresponding period in 2016. The increase was primarily due to the growth of new business within the wealth management segment.
    • Government subsidies represent cash subsidies received from local governments for general corporate purposes. The Company's wealth management business received RMB9.7 million (US$1.4 million) in government subsidies in the second quarter of 2017, compared with RMB34.2 million in the corresponding period of 2016.
  • Asset Management Business
    Operating costs and expenses for the second quarter of 2017 were RMB60.5 million (US$8.9 million), an 8.9% decrease from the corresponding period in 2016.
    • Compensation and benefits for the second quarter of 2017 were RMB44.7 million (US$6.6 million), a 1.5% increase from the corresponding period of 2016.
    • Selling expenses for the second quarter of 2017 were RMB1.4 million (US$0.2 million), compared with RMB4.4 million in the corresponding period of 2016.
    • General and administrative expenses for the second quarter of 2017 were RMB11.2 million (US$1.6 million), a 39.1% decrease from the corresponding period in 2016. The decrease was mainly due to certain expenses that were not VAT deductible in the second quarter last year.
    • Government subsidies represent cash subsidies received from local governments for general corporate purposes. The asset management business received RMB0.1 million in government subsidies in the second quarter of 2017, compared with RMB2.0 million in the corresponding period of 2016.
  • Internet Financial Service Business
    Operating costs and expenses for the second quarter of 2017 were RMB57.1 million (US$8.4 million), a 7.0% increase from the corresponding period in 2016. Operating costs and expenses for the second quarter of 2017 primarily consisted of compensation and benefits of RMB35.5 million (US$5.2 million), selling expenses of RMB3.0 million (US$0.4 million), general and administrative expenses of RMB8.2 million (US$1.2 million) and other operating expenses of RMB10.5 million (US$1.5 million).

Operating Margin

Operating margin for the second quarter of 2017 was 31.7%, an increase from 29.8% for the corresponding period in 2016. The increase was mainly due to improved operating margin for the asset management business and reduced operating loss of the Internet financial service business.

  • Operating margin for the wealth management business for the second quarter of 2017 increased to 33.6% from 33.1% for the corresponding period in 2016.
  • Operating margin for the asset management business for the second quarter of 2017 was 53.5%, compared with 50.9% for the corresponding period in 2016.
  • Operating loss for the Internet financial service business for the second quarter of 2017 was RMB30.8 million (US$4.5 million), down from RMB42.1 million for the corresponding period in 2016.

Income Tax Expenses

Income tax expenses for the second quarter of 2017 were RMB60.2 million (US$8.9 million), a 24.3% increase from the corresponding period in 2016. The increase was primarily due to the combined impact of higher taxable income and a higher effective tax rate. 

Income from Equity in Affiliates

Income from equity in affiliates for the second quarter of 2017 was RMB23.3 million (US$3.4 million), a 154.4% increase from the corresponding period in 2016. The increase was mainly due to the increased net asset value of the Company's investments in the funds managed by Gopher as a general partner.

Net Income

  • Net Income
    • Net income for the second quarter of 2017 was RMB205.9 million (US$30.4 million), a 16.9% increase from the corresponding period in 2016.
    • Net margin for the second quarter of 2017 was 29.1%, up from 27.0% for the corresponding period in 2016.
    • Net income attributable to Noah shareholders for the second quarter of 2017 was RMB207.0 million (US$30.5 million), a 13.6% increase from the corresponding period in 2016.
    • Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2017 was RMB3.67(US$0.54) and RMB3.52(US$0.52), respectively, up from RMB3.24 and RMB3.10, respectively, for the corresponding period in 2016.
  • Non-GAAP Net Income Attributable to Noah Shareholders
    • Non-GAAP net income attributable to Noah shareholders for the second quarter of 2017 was RMB226.5 million (US$33.4 million), a 14.4% increase from the corresponding period in 2016.
    • Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2017 was 32.0%, up from 30.4% for the corresponding period in 2016.
    • Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2017 was RMB3.84(US$0.57), up from RMB3.37 for the corresponding period in 2016.

Balance Sheet and Cash Flow

As of June 30, 2017, the Company had RMB2,003.5 million (US$295.5 million) in cash and cash equivalents, compared with RMB2,609.2 million as of March 31, 2017 and RMB1,398.9 million as of June 30, 2016.

Net cash inflow from the Company's operating activities during the second quarter of 2017 was RMB72.8 million (US$10.7 million), compared with income from operations of RMB224.3 million for the corresponding period in 2016; the difference was mainly due to temporary cash outflows related to the Company's factoring business.

Net cash outflow from the Company's investing activities during the second quarter of 2017 was RMB671.2 million (US$99.0 million), primarily due to increases in short-term and long-term investments to improve cash usage and capital management.

Net cash inflow from the Company's financing activities was RMB4.2 million (US$0.6 million) in the second quarter of 2017, which mainly included proceeds from issuance of ordinary shares upon exercise of stock options.

On July 8, 2016, the Company's board of directors authorized a share repurchase program of up to US$50 million worth of its issued and outstanding ADSs over the course of one year. As of June 30, 2017, the Company had repurchased 224,775 ADSs for approximately US$5.1 million under this program, inclusive of transaction charges, at an average effective price of US$22.76.

2017 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2017 will be in the range of RMB825 million to RMB860 million, an increase of 14.1% to 18.9% compared with the full year 2016. This estimate reflects management's current business outlook and is subject to change.

CONFERENCE CALL

Senior management will host a combined English and Chinese language conference call to discuss the Company's second quarter 2017 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details

Date/Time:

 

Monday, August 28, 2017 at 8:00 p.m., U.S. Eastern Time

Tuesday, August 29, 2017 at 8:00 a.m., Hong Kong Time

Dial in details:


- United States Toll Free

+1-888-346-8982

- Mainland China Toll Free

4001-201203

- Hong Kong Toll Free

800-905-945

- International

+1-412-902-4272

Conference Title:

Noah Holdings Limited Second Quarter 2017 Earnings Call

Participant Password:

Noah Holdings

A telephone replay will be available starting one hour after the end of the conference call until September 4, 2017 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10111521.

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.noahwm.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 attributable to Noah shareholders results reflecting adjustments to exclude the impact 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 attributable to Noah shareholders, non-GAAP net income attributable to Noah shareholders per diluted ADS and non-GAAP net margin attributable to Noah shareholders 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 and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises. In the first half of 2017, Noah distributed RMB65.6 billion (US$9.7 billion) of wealth management products. Through our subsidiary, Gopher Asset Management, we had assets under management of RMB138.7 billion (US$20.5 billion) as of June 30, 2017.

Our wealth management business primarily distributes onshore and offshore fixed income products, private equity products, secondary market products and insurance products. Noah delivers customized financial solutions to clients through a network of 1,259 relationship managers across 205 branches and sub-branches in 76 cities in China, and serves the international investment needs of its clients through wholly owned subsidiaries in Hong Kong and the United States. The Company's wealth management business had 164,728 registered clients as of June 30, 2017. As our asset management subsidiary and a leading alternative asset manager in China, Gopher Asset Management manages private equity, real estate, secondary market credit and other investments denominated in both Renminbi and foreign currencies. We also provide internet financial services, including online wealth management, micro-lending and payment processing services, etc.

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

FOREIGN CURRENCY TRANSLATION

In this announcement, the unaudited financial results for the quarter ended June 30, 2017 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 RMB6.7793 to US$1.00, the effective noon buying rate for June 30, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for 2017 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 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 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 industry 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
Steve Zeng
Noah Holdings Limited
Tel: +86-21-8035-9221
ir@noahwm.com

 

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

 

 

Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)







As of





March 31,

2017


June 30,

2017


June 30,

2017





RMB'000


RMB'000


USD'000

Assets








Current assets:









Cash and cash equivalents


2,609,190


2,003,529


295,536



Restricted cash


1,000


-


-



Short-term investments


410,237


569,513


84,008



Accounts receivable, net of allowance for
doubtful accounts of nil at March 31, 2017 and
June 30, 2017


206,698


165,765


24,452



Loans receivable


115,878


295,923


43,651



Amounts due from related parties


599,928


723,124


106,666



Factoring receivables


573,674


570,769


84,193



Other current assets


305,948


78,510


11,581



Total current assets


4,822,553


4,407,133


650,087











Long-term investments


465,156


687,967


101,481


Investment in affiliates


543,280


588,933


86,872


Property and equipment, net


246,843


252,803


37,290


Non-current deferred tax assets


52,577


52,332


7,719


Other non-current assets


38,728


81,720


12,054

Total Assets


6,169,137


6,070,888


895,503










Liabilities and Equity








Current liabilities:









Accrued payroll and welfare expenses


384,235


431,467


63,645



Income tax payable


81,487


52,118


7,688



Amounts due to related parties


12,273


12,273


1,810



Deferred revenues


183,354


177,279


26,150



Payable to individual investors of factoring
receivables


579,975


328,562


48,465



Other current liabilities


350,842


266,696


39,341



Convertible notes


550,656


542,344


80,000



Total current liabilities


2,142,822


1,810,739


267,099











Non-current uncertain tax position liabilities


4,449


4,437


654


Other non-current liabilities


92,314


100,322


14,798


Total Liabilities


2,239,585


1,915,498


282,551


Mezzanine Equity - Redeemable non-
controlling Interest of Subsidiary


334,590


337,481


49,781


Equity


3,594,962


3,817,909


563,172

Total Liabilities and Equity


6,169,137


6,070,888


895,504
















 

 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)


 Three months ended




June 30,


June 30,


June 30,


Change


2016


2017


2017



Revenues:

RMB'000


RMB'000


USD'000



Third-party revenues








   One-time commissions

209,490


123,321


18,191


(41.1%)

   Recurring service fees

127,815


130,923


19,312


2.4%

 Performance-based income

817


16,179


2,387


1880.3%

   Other service fees

29,682


42,046


6,202


41.7%

Total third-party revenues

367,804


312,469


46,092


(15.0%)

Related party revenues








   One-time commissions

89,971


177,333


26,158


97.1%

   Recurring service fees

182,166


209,213


30,861


14.8%

   Performance-based income

23,317


7,570


1,117


(67.5%)

   Other service fees

745


6,562


968


780.8%

Total related party revenues

296,199


400,678


59,104


35.3%

Total revenues

664,003


713,147


105,196


7.4%

   Less: business taxes and related
surcharges

(12,277)


(5,836)


(861)


(52.5%)

Net revenues

651,726


707,311


104,335


8.5%

Operating costs and expenses:








  Compensation and benefits








    Relationship manager compensation

(147,103)


(140,078)


(20,663)


(4.8%)

    Performance fee compensation

(4,799)


-


-


(100.0%)

    Other Compensations

(176,245)


(190,895)


(28,159)


8.3%

Total compensation and benefits

(328,147)


(330,973)


(48,822)


0.9%

   Selling expenses

(78,248)


(71,376)


(10,529)


(8.8%)

   General and administrative expenses

(58,251)


(49,231)


(7,262)


(15.5%)

   Other operating expenses

(29,158)


(41,268)


(6,087)


41.5%

   Government subsidies

36,183


9,791


1,444


(72.9%)

Total operating costs and expenses

(457,621)


(483,057)


(71,256)


5.6%

Income from operations

194,105


224,254


33,079


15.5%

Other income:








   Interest income

11,094


10,440


1,540


(5.9%)

   Interest expenses

(4,862)


(4,894)


(722)


0.7%

   Investment income

17,074


10,943


1,614


(35.9%)

   Other (expense) income

(2,067)


2,056


303


(199.5%)

Total other income

21,239


18,545


2,735


(12.7%)

Income before taxes and income from
equity in affiliates

215,344


242,799


35,814


12.7%

Income tax expense

(48,471)


(60,244)


(8,886)


24.3%

Income from equity in affiliates

9,161


23,308


3,438


154.4%

Net income

176,034


205,863


30,366


16.9%

Less: net loss attributable to non-
controlling Interests

(6,222)


(4,070)


(600)


(34.6%)

Less: Gain attributable to redeemable
non-controlling interest of Subsidiary

-


2,891


426


-

Net income attributable to Noah
Shareholders

182,256


207,042


30,540


13.6%









Income per ADS, basic

3.24


3.67


0.54


13.3%

Income per ADS, diluted

3.10


3.52


0.52


13.5%

Margin analysis:








Operating margin

29.8%


31.7%


31.7%



Net margin

27.0%


29.1%


29.1%



Weighted average ADS equivalent: [1]








Basic

56,271,504


56,461,612


56,461,612



Diluted

60,174,258


60,205,429


60,205,429



ADS equivalent outstanding at end of
period

56,346,740


56,547,380


56,547,380




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


 

 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)



 Six months ended





June 30,


June 30,


June 30,


Change



2016


2017


2017




Revenues:

RMB'000


RMB'000


USD'000




Third-party revenues









   One-time commissions

437,582


323,107


47,661


(26.2%)


   Recurring service fees

234,847


266,472


39,307


13.5%


 Performance-based income

10,469


28,728


4,238


174.4%


   Other service fees

49,712


68,411


10,091


37.6%


Total third-party revenues

732,610


686,718


101,297


(6.3%)


Related party revenues









   One-time commissions

150,550


321,889


47,481


113.8%


   Recurring service fees

384,432


400,583


59,089


4.2%


   Performance-based income

30,315


7,649


1,128


(74.8%)


   Other service fees

1,364


13,438


1,982


885.2%


Total related party revenues

566,661


743,559


109,680


31.2%


Total revenues

1,299,271


1,430,277


210,977


10.1%


   Less: business taxes and related
surcharges

(40,388)


(9,799)


(1,445)


 

(75.7%)


Net revenues

1,258,883


1,420,478


209,532


12.8%


Operating costs and expenses:









  Compensation and benefits









    Relationship manager compensation

(282,698)


(290,391)


(42,835)


2.7%


    Performance fee compensation

(8,145)


-


-


(100.0%)


    Other Compensations

(350,650)


(381,164)


(56,225)


8.7%


Total compensation and benefits

(641,493)


(671,555)


(99,060)


4.7%


   Selling expenses

(146,150)


(131,979)


(19,468)


(9.7%)


   General and administrative expenses

(108,464)


(108,869)


(16,059)


0.4%


   Other operating expenses

(46,456)


(70,714)


(10,431)


52.2%


   Government subsidies

105,125


43,723


6,449


(58.4%)


Total operating costs and expenses

(837,438)


(939,394)


(138,569)


12.2%


Income from operations

421,445


481,084


70,963


14.2%


Other income:









   Interest income

19,771


19,147


2,824


(3.2%)


   Interest expenses

(9,527)


(9,806)


(1,446)


2.9%


   Investment income

25,142


21,089


3,111


(16.1%)


   Other (expense) income

(1,421)


3,193


471


(324.7%)


Total other income

33,965


33,623


4,960


(1.0%)


Income before taxes and income from
equity in affiliates

455,410


514,707


75,923


 

13.0%


Income tax expense

(101,866)


(122,160)


(18,020)


19.9%


Income from equity in affiliates

15,064


29,034


4,283


92.7%


Net income

368,608


421,581


62,186


14.4%


Less: net loss attributable to non-
controlling Interests

(12,646)


(9,270)


(1,367)


(26.7%)


Less: Gain attributable to redeemable
non-controlling interest of Subsidiary

-


6,817


1,006


-


Net income attributable to Noah
Shareholders

381,254


424,034


62,547


11.2%






Noah Holdings Limited

 Condensed Comprehensive Income Statements

 (unaudited)


 Three months ended





June 30,


June 30,


June 30,


Change


2016


2017


2017




RMB'000


RMB'000


USD'000



Net income

176,034


205,863


30,366


16.9%

Other comprehensive income, net of tax:








     Foreign currency translation
adjustments

7,072


(6,321)


(932)


(189.4%)

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

(5,556)


2,606


384


(146.9%)

Comprehensive income

177,550


202,148


29,818


13.9%

Less: Comprehensive loss attributable to
non-controlling interests

(6,250)


(4,029)


(594)


(35.5%)

Less: Gain attributable to redeemable
non-controlling interest of Subsidiary

-


2,891


426


-

Comprehensive income attributable to
Noah Shareholders

183,800


203,286


29,986


10.6%




















 

 

Noah Holdings Limited

 Condensed Comprehensive Income Statements

 (unaudited)


 Six months ended




June 30,


June 30,


June 30,


Change


2016


2017


2017




RMB'000


RMB'000


USD'000



Net income

368,608


421,581


62,187


14.4%

Other comprehensive income, net of tax:








     Foreign currency translation
adjustments

5,526


(10,459)


(1,543)


(289.3%)

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

(849)


4,121


608


(585.4%)

Comprehensive income

373,285


415,243


61,252


11.2%

Less: Comprehensive loss attributable to
non-controlling interests

(12,687)


(9,345)


(1,378)


(26.3%)

Less: Gain attributable to redeemable
non-controlling interest of Subsidiary

-


6,817


 

1,006


-

Comprehensive income attributable to
Noah Shareholders

385,972


417,771


61,624


8.2%













 

 

Noah Holdings Limited

 Supplemental Information

(unaudited)


 As of 


 Change


June 30, 2016


June 30, 2017








 Number of registered clients

114,870


164,728


43.4%

 Number of relationship managers

1,093


1,259


15.2%

 Number of cities under coverage

68


76


11.8%














 Three months ended


Change


June 30, 2016


June 30, 2017



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

 Number of active clients

4,927


4,484


(9.0%)

 Transaction value:






        Fixed income products

16,987


23,505


38.4%

        Private equity products

7,571


8,252


9.0%

        Secondary market equity products

2,810


1,111


(60.5%)

        Other products

379


94


(75.3%)

 Total transaction value

27,747


32,962


18.8%

 Average transaction value per client

5.63


7.35


30.5%

 

 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)

                                                                        Three months ended June 30, 2017



Wealth
Management

 Business


Asset
Management

Business


Internet
Financial
Service
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000

Revenues:








Third-party revenues








One-time commissions

122,956


366


-


123,321

Recurring service fees

122,860


8,063


-


130,923

Performance-based income

15,015


1,164


-


16,179

Other service fees

21,841


94


20,110


42,046

Total third-party revenues

282,672


9,687


20,110


312,469

Related party revenues








One-time commissions

177,333


-


-


177,333

Recurring service fees

88,366


120,846


-


209,213

Performance-based income

7,194


376


-


7,570

Other service fees

-


-


6,562


6,562

Total related party revenues

272,893


121,222


6,562


400,678

Total revenues

555,565


130,909


26,672


713,147

Less: business taxes and related
   surcharges

 

(4,964)


 

(580)


 

(293)


 

(5,836)

Net revenues

550,601


130,329


26,379


707,311

Operating costs and expenses:








Compensation and benefits








Relationship manager
   compensation

(138,330)


 

(1)


(1,747)


 

(140,078)

Other compensation

(112,455)


(44,687)


(33,754)


(190,895)

Total compensation and benefits

(250,785)


(44,688)


(35,501)


(330,973)

Selling expenses

(66,619)


(1,432)


(3,025)


(71,376)

General and administrative expenses

(29,912)


(11,168)


(8,152)


(49,231)

    Other operating expenses

(27,495)


(3,314)


(10,460)


(41,268)

Government subsidies

9,731


60


-


9,791

Total operating costs and expenses

(365,380)


(60,542)


(57,138)


(483,057)

Income (loss) from operations

185,221


69,787


(30,759)


224,254


 

 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)

         Three months ended June 30, 2016


Wealth
Management

 Business


Asset
Management

Business


Internet
Financial
Service
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Third-party revenues








One-time commissions

209,149


341


-


209,490

Recurring service fees

110,292


17,523


-


127,815

Performance-based income

142


676


-


817

Other service fees

18,717


-


10,964


29,682

Total third-party revenues

338,300


18,540


10,964


367,804

Related party revenues








One-time commissions

88,307


1,664


-


89,971

Recurring service fees

88,177


93,989


-


182,166

Performance-based income

-


23,317


-


23,317

Other service fees

76


-


669


745

Total related party revenues

176,560


118,970


669


296,199

Total revenues

514,860


137,510


11,633


664,003

Less: business taxes and related
   surcharges

 

(9,688)


 

(2,278)


 

(312)


 

(12,277)

Net revenues

505,172


135,232


11,321


651,726

Operating costs and expenses:








Compensation and benefits








Relationship manager
   compensation

 

(144,951)


 

(1,095)


 

(1,057)


 

(147,103)

Performance fee compensation

-


(4,799)


-


(4,799)

Other compensation

(106,630)


(38,114)


(31,501)


(176,245)

Total compensation and benefits

(251,581)


(44,008)


(32,558)


(328,147)

Selling expenses

(67,372)


(4,425)


(6,451)


(78,248)

General and administrative expenses

(31,885)


(18,352)


(8,013)


(58,251)

Other operating expenses

(21,127)


(1,665)


(6,366)


(29,158)

Government subsidies

34,167


2,016


-


36,183

Total operating costs and expenses

(337,798)


(66,434)


(53,388)


(457,621)

Income (loss) from operations

167,374


68,798


(42,067)


194,105

 

 

Noah Holdings Limited

 Reconciliation of GAAP to Non-GAAP Results

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

 (unaudited)



Three months ended



 June 30,


June 30,


 Change


2016


2017



RMB'000


RMB'000









Net income attributable to Noah
Shareholders

182,256


207,042


13.6%

Adjustment for share-based

compensation related to:






           Share options

9,379


12,622


34.6%

           Restricted shares

6,306


6,849


8.6%

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

197,941


226,513


14.4%







Net margin

27.0%


29.1%



Adjusted net margin (non-GAAP)*

29.4%


31.9%



 

Net income attributable to
Noah Shareholders per ADS,
diluted

3.10


3.52


13.5%

Adjusted net income
attributable to Noah
Shareholders per ADS,
diluted (non-GAAP)*

3.37


3.84


13.9%








 

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

 

View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-financial-results-for-the-second-quarter-of-2017-300510058.html

SOURCE Noah Holdings Limited

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