Noah Holdings Limited Announces Unaudited Financial Results for the Third Quarter of 2018
SHANGHAI,Nov. 20,2018 --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 third quarter of 2018.
THIRD QUARTER 2018 FINANCIAL HIGHLIGHTS
Net revenues for the third quarter of 2018 were RMB839.0 million (US$122.2 million),a 22.6% increase from the corresponding period in 2017.
(RMB millions,
except percentages)
Q3 2017
Q3 2018
YoY Change
Wealth management
488.9
576.9
18.0%
Asset management
164.6
198.5
20.7%
Other financial services
30.9
63.6
105.8%
Total net revenues
684.4
839.0
22.6%
Income from operations for the third quarter of 2018 was RMB271.1 million (US$39.5 million),a 69.1% increase from the corresponding period in 2017.
(RMB millions,
except percentages)
Q3 2017
Q3 2018
YoY Change
Wealth management
106.8
169.2
58.4%
Asset management
77.5
101.7
31.2%
Other financial services
(24.0)
0.2
100.8%
Total income from operations
160.3
271.1
69.1%
Net income attributable to Noah shareholders for the third quarter of 2018 was RMB207.7 million (US$30.2 million),a 15.6% increase from the corresponding period in 2017.
Non-GAAP[1] net income attributable to Noah shareholders for the third quarter of 2018 was RMB293.9 million (US$42.8 million),a 40.5% increase from the corresponding period in 2017.
THIRD QUARTER 2018 OPERATIONAL UPDATES
Wealth Management Business
The Company's wealth management business offers financial products and provides comprehensive financial services to high net worth clients. Noah primarily distributes onshore and offshore fixed income,private equity,secondary market equity and insurance products.
Total number of registered clients as of September 30,2018 was 236,906,a 34.6% increase from September 30,2017.
Total number of active clients[2] during the third quarter of 2018 was 4,108,a 7.8% decrease from September 30,2017.
Aggregate value of financial products distributed during the third quarter of 2018 was RMB28.0 billion (US$4.1 billion),an 18.9% increase from the third quarter of 2017.
Product type
Three months ended September 30,
2017
2018
(RMB in billions,except percentages)
Fixed income
10.8
45.8%
22.8
81.4%
Private equity
9.6
40.7%
3.3
11.8%
Secondary market equity
3.1
13.2%
1.5
5.4%
Other products
0.1
0.3%
0.4
1.4%
All products
23.6
100.0%
28.0
100.0%
Average transaction value per active client[3] for the third quarter of 2018 was RMB6.8 million (US$1.0 million),a 29.0% increase from the corresponding period in 2017.
Coverage network included 287 branches and sub-branches covering 83 cities as of September 30,2018,up from 222 branches and sub-branches covering 78 cities as of September 30,2017.
Number of relationship managers was 1,559 as of September 30,a 21.2% increase from September 30,2017.
Asset Management Business
The Company's asset management business,Gopher Asset Management Co.,Ltd. ("Gopher Asset Management" or "Gopher"),is a leading alternative asset manager in China. Gopher Asset Management develops and manages private equity,real estate,secondary market equity,credit and other investments denominated in Renminbi and other currencies.
Total assets under management as of September 30,2018 were RMB164.1 billion (US$23.9 billion),a 1.6% increase from June 30,2018 and a 14.9% increase from September 30,2017.
Investment type
As of
June 30,
2018
Asset
Growth
Asset
Expiration/
Redemption
As of
September 30,
2018
(RMB billions,except percentages)
Private equity
93.9
58.1%
3.1
0.1
96.9
59.0%
Credit
41.3
25.6%
6.6
7.6
40.3
24.6%
Real estate
17.6
10.9%
2.4
3.4
16.6
10.1%
Secondary market equity[4]
4.3
2.7%
1.2
0.6
4.9
3.0%
Other investments
4.4
2.7%
1.0
-
5.4
3.3%
All Investments
161.5
100.0%
14.3
11.7
164.1
100.0%
Other Financial Services Business
The Company's other financial services business includes its lending services,online wealth management and payment technology services.
Mr. Kenny Lam,Group President of Noah,said,"Despite the volatile macro environment,we have delivered solid operational results for this quarter. A lot of this quarter's results come from efforts from many years prior. We are also very glad to see a much more diversified revenue base. We will continue to invest our resources in building a sustainable growth platform for Noah."
THIRD QUARTER 2018 FINANCIAL RESULTS
Net Revenues
Net revenues for the third quarter of 2018 were RMB839.0 million (US$122.2 million),a 22.6% increase from the corresponding period in 2017,primarily driven by increased recurring service fee revenues and other service fees.
Wealth Management Business
- Net revenues from one-time commissions for the third quarter of 2018 were RMB229.0 million (US$33.3 million),an 8.4% increase from the corresponding period in 2017.
- Net revenues from recurring service fees for the third quarter of 2018 were RMB304.7 million (US$44.4 million),a 45.4% increase from the corresponding period in 2017. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.
- Net revenues from performance-based income for the third quarter of 2018 were RMB12.2 million (US$1.8 million),compared with RMB48.0 million in the corresponding period of 2017,primarily due to a decrease in performance-based income from fixed income products.
-Net revenues from other service fees for the third quarter of 2018 were RMB31.0 million (US$4.5 million),an increase from RMB19.9 million in the corresponding period in 2017,primarily due to the growth of the Company's investor education business.
Asset Management Business
- Net revenues from recurring service fees for the third quarter of 2018 were RMB172.0 million (US$25.0 million),a 29.4% increase from the corresponding period in 2017. The increase was primarily due to the increase in assets under management as well as higher fee rates earned on assets under management.
- Net revenues from performance-based income for the third quarter of 2018 were RMB21.3 million (US$3.1 million),compared with RMB26.3 million in the corresponding period of 2017,primarily due to a decrease in performance-based income from secondary market equity funds.
Other Financial Services Business
- Net revenues for the third quarter of 2018 were RMB63.6 million (US$9.3 million),a 105.8% increase from the corresponding period in 2017. The increase was primarily due to the growth of the Company's lending services business.
Operating Costs and Expenses
Operating costs and expenses for the third quarter of 2018 were RMB567.9 million (US$82.7 million),an 8.4% increase from the corresponding period in 2017. Operating costs and expenses primarily consisted of compensation and benefits of RMB385.1 million (US$56.1 million),selling expenses of RMB81.2 million (US$11.8 million),general and administrative expenses of RMB60.0 million (US$8.7 million) and other operating expenses of RMB51.1 million (US$7.4 million).
Operating costs and expenses for the wealth management business for the third quarter of 2018 were RMB407.7 million (US$59.4 million),a 6.7% increase from the corresponding period in 2017,primarily due to an increase in compensation and benefits.
Operating costs and expenses for the asset management business for the third quarter of 2018 were RMB96.8 million (US$14.1 million),an 11.2% increase from the corresponding period in 2017,primarily due to an increase in compensation and benefits.
Operating costs and expenses for the other financial services business for the third quarter of 2018 were RMB63.4 million (US$9.2 million),a 15.6% increase from the corresponding period in 2017 due to the expansion of the operation of the Company's lending services business.
Operating Margin
Operating margin for the third quarter of 2018 was 32.3%,an increase from 23.4% for the corresponding period in 2017.
Operating margin for the wealth management business for the third quarter of 2018 was 29.3%,compared with 21.9% for the corresponding period in 2017.
Operating margin for the asset management business for the third quarter of 2018 was 51.2%,compared with 47.1% for the corresponding period in 2017.
Income from operations for the other financial services business for the third quarter of 2018 was RMB0.2 million (US$0.03 million),improving from a loss of RMB24.0 million for the corresponding period in 2017.
Investment Income
Investment loss for the third quarter of 2018 was RMB16.8 million (US$2.4 million),compared with investment income of RMB11.3 million for the corresponding period in 2017. The loss was primarily due to changes in fair value of equity securities. See "Discussion of Recently Adopted Accounting Standard and Non-GAAP Financial Measures" below for more details.
Income Tax Expenses
Income tax expensesfor the third quarter of 2018 were RMB61.8 million (US$9.0 million),a 47.7% increase from the corresponding period in 2017,primarily due to higher taxable income.
Net Income
Net Income
- Net income for the third quarter of 2018 was RMB205.2 million (US$29.9 million),an 11.9% increase from the corresponding period in 2017.
- Net margin for the third quarter of 2018 was 24.5%,down from 26.8% for the corresponding period in 2017.
- Net income attributable to Noah shareholders for the third quarter of 2018 was RMB207.7 million (US$30.2 million),a 15.6% increase from the corresponding period in 2017.
- Net margin attributable to Noah shareholders for the third quarter of 2018 was 24.8%,down from 26.3% for the corresponding period in 2017.
- Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2018 was RMB3.51 (US$0.51) and RMB3.41 (US$0.50),respectively,up from RMB3.17 and RMB3.03 respectively,for the corresponding period in 2017.
Non-GAAP Net Income Attributable to Noah Shareholders
- Non-GAAP net income attributable to Noah shareholders for the third quarter of 2018 was RMB293.9 million (US$42.8 million),a 40.5% increase from the corresponding period in 2017.
- Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2018 was 35.0%,up from 30.6% for the corresponding period in 2017.
- Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2018 was RMB4.81 (US$0.70),up from RMB3.52 for the corresponding period in 2017.
Balance Sheet and Cash Flow
As of September 30,the Company had RMB2,360.1 million (US$343.6 million) in cash and cash equivalents,compared with RMB1,987.8 million as of September 30,2017 and RMB2,094.8 million as of June 30,2018.
Net cash inflow from the Company's operating activities during the third quarter of 2018 was RMB449.8 million (US$65.5 million),compared to net cash inflow of RMB363.6 million in the corresponding period in 2017. The increase was mainly due to an increase in net income and the collection of loans receivable from factoring business.
Net cash outflow from the Company's investing activities during the third quarter of 2018 was RMB203.6 million (US$29.6 million),compared to net cash inflow of RMB247.9 million in the corresponding period in 2017. The cash outflow was primarily due to an increase in investments and in the number of loans originated by the Company's lending services business.
Net cash outflow from the Company's financing activities was RMB16.2 million (US$2.4 million) in the third quarter of 2018,compared to net cash outflow of RMB609.8 million in the corresponding period in 2017. The significant cash outflow for the third quarter of 2017 was mainly related to the mezzanine equity decrease associated with redemption of Sequoia's investment in Gopher.
2018 FORECAST
The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2018 will be in the range of RMB1 billion to RMB1.05 billion,an increase of 16.7% to 22.6% compared with the full year 2017. 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 third quarter 2018 unaudited financial results and recent business activities.
The conference call may be accessed with the following details:
Conference call details
Date/Time:
Monday,November 19,2018 at 8:00 p.m.,U.S. Eastern Time
Tuesday,November 20,2018 at 9:00 a.m.,Hong Kong Time
Dial in details:
-United States Toll Free
+1-888-317-6003
-Mainland China Toll Free
4001-201-203
-Hong Kong Toll Free
800-905-945
-International
+1-412-317-6061
Conference Title:
Noah Holdings Third Quarter 2018 Earnings Call
Participant Elite Entry No:
8551846
Participants will need to dial in 10-15 minutes early,and use this Elite Entry Number in order to join the conference.
A telephone replay will be available starting one hour after the end of the conference call until November 26,2018 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10126174.
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.
DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES On January 1,the Company adopted ASU 2016-01Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,which requires that equity investments,except for those accounted for under the equity method or those that result in consolidation of the investee,be measured at fair value,with subsequent changes in fair value recognized in net income.The accounting standard also includes a transition requirement on presentation that requires the amounts reported in accumulated other comprehensive income for equity securities that exist as of the date of adoption previously classified as available-for-sale to be reclassified to retained earnings.As a result,upon adoption of this new standard,Noah recorded a cumulative effect adjustment from other comprehensive income to retained earnings of RMB251.6 million (US$38.7 million),net of tax,for the unrealized gains related to equity securities previously classified as available-for-sale securities. This adjustment had no overall impact on shareholders' equity; however,since these net unrealized gains are now included within retained earnings,they will not appear as realized gains on Noah's consolidated income statement when sold.The future impact to Noah's consolidated income statement from period to period will vary depending upon the level of volatility in the performance of the securities held in Noah's equity portfolio and the overall market. ASU 2016-01 does not affect the treatment of equity investments accounted for under the equity method or those that result in consolidation of the investee.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 and fair value changes of equity investments (unrealized) and adjusting for sale of equity securities. 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 LIMITEDNoah 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 nine months of 2018,Noah distributed RMB84.9 billion (US$12.4 billion) of financial products. Through Gopher Asset Management,Noah had assets under management of RMB164.1 billion (US$23.9 billion) as of September 30,2018.Noah's wealth management business primarily distributes onshore and offshore fixed income,secondary market equity and insurance products. Noah delivers customized financial solutions to clients through a network of 1,559 relationship managers across 287 branches and sub-branches in 83 cities in mainland China,and serves the international investment needs of its clients through offices in Hong Kong,Taiwan,United States,Canada,Australia and Singapore. The Company's wealth management business had 236,906 registered clients as of September 30,2018. As a leading alternative asset manager in China,Gopher Asset Management manages private equity,credit and other investments denominated in Renminbi and other currencies. The Company also provides other financial services,including lending services,online wealth management and payment technology services.For more information,please visit Noah at ir.noahgroup.com.
FOREIGN CURRENCY TRANSLATIONIn this announcement,the unaudited financial results for the third quarter of 2018 ended September 30,2018 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ 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 RMB6.868 to US$1.00,the effective noon buying rate for September 28,2018 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 2018 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 fourth 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
Eva Ma
Tel: +86-21-8035-9221
ir@noahgroup.com[1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity securities (unrealized) and adjusting for sale of equity securities. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.[2] "Active clients" for a given period refers to registered clients who purchase financial products provided or distributed by Noah during that given period,excluding clients in Noah's other financial services segment.[3] "Average transaction value per active client" refers to the average value of financial products that were purchased by active clients during the period specified.[4] The asset expiration/redemption of secondary market equity investments also includes market appreciation or depreciation.-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --
Noah Holdings LimitedCondensed Consolidated Balance Sheets(unaudited)
As of
June 30,
September 30,
2018
2018
2018
RMB'000
RMB'000
USD'000
Assets
Current assets:
Cash and cash equivalents2,094,773
2,360,111
343,639
Short-term investments (including short-term
investments measured at fair value of RMB163,043
thousands and RMB162,153 thousands,as of June 30,
2018 and September 30,respectively)224,043
213,153
31,036
Accounts receivable and contract assets,net of
allowance for doubtful accounts of nil as of June 30,2018243,098
255,051
37,136
Loans receivable,net601,952
688,890
100,303
Amounts due from related parties563,286
625,948
91,140
Loans receivable from factoring business68,358
23,943
3,486
Other current assets483,894
455,958
66,389
Total current assets4,279,404
4,623,054
673,129
Long-term investments (including long-term investments
measured at fair value of RMB771,594 thousands and
RMB860,828 thousands,2018 and
September 30,respectively)806,094
895,328
130,362
Investment in affiliates1,176,750
1,314,862
191,448
Property and equipment,net295,786
295,785
43,067
Non-current deferred tax assets97,296
97,205
14,153
Other non-current assets77,196
23,093
3,363
Total Assets6,732,526
7,249,327
1,055,522
Liabilities and Equity
Current liabilities:
Accrued payroll and welfare expenses479,654
565,346
82,316
Income tax payable18,484
67,170
9,780
Amounts due to related parties336
1,691
246
Deferred revenues146,462
172,171
25,069
Loans payable from factoring business35,003
-
-
Other current liabilities383,256
420,508
61,227
Total current liabilities1,063,195
1,226,886
178,638
Non-current deferred tax liabilities50,172
51,256
7,463
Convertible notes330,855
228,121
33,215
Other non-current liabilities112,485
75,824
11,040
Total Liabilities1,556,707
1,582,087
230,356
Equity5,175,819
5,667,240
825,166
Total Liabilities and Equity6,522
Noah Holdings LimitedCondensed Consolidated Income Statements(In RMB'000,except for USD data,per ADS data and percentages)(unaudited)
Three months ended
September 30,
Change
2017
2018
2018
Revenues:RMB'000
RMB'000
USD'000
Revenues from others[1]:
One-time commissions87,455
177,863
25,897
103.4%Recurring service fees145,080
140,293
20,427
(3.3%)Performance-based income48,759
12,215
1,779
(74.9%)Other service fees56,201
98,802
14,386
75.8%Total revenues from others337,495
429,173
62,489
27.2%Revenues from funds
Gopher manages[1]:
One-time commissions125,598
54,697
7,964
(56.5%)Recurring service fees199,306
338,300
49,257
69.7%Performance-based
income26,020
21,411
3,118
(17.7%)Total revenues from funds
Gopher manages350,924
414,408
60,339
18.1%Total revenues688,419
843,581
122,828
22.5%Less: business taxes and
related surcharges(4,106)
(4,597)
(669)
12.0%
Net revenues684,313
838,984
122,159
22.6%Operating costs and
expenses:
Compensation and
benefits
Relationship manager
compensation(158,310)
(143,831)
(20,942)
(9.1%)Performance fee
compensation-
(5,975)
(870)
N.A.Other compensations(197,871)
(235,294)
(34,259)
18.9%Total compensation and
benefits(356,181)
(385,100)
(56,071)
8.1%Selling expenses(76,967)
(81,224)
(11,826)
5.5%General and administrative
expenses(60,738)
(60,010)
(8,738)
(1.2%)Other operating expenses(35,330)
(51,106)
(7,441)
44.7%Government grants5,234
9,518
1,386
81.8%Total operating costs and
expenses(523,982)
(567,922)
(82,690)
8.4%
Income from operations160,331
271,062
39,469
69.1%Other income:
Interest income12,962
14,237
2,073
9.8%Interest expenses(4,728)
1,156
168
(124.5%)Investment income(loss)11,271
(16,817)
(2,449)
(249.2%)Other expense(290)
(1,836)
(267)
533.1%Total other income
(expense)19,215
(3,260)
(475)
(117.0%)Income before taxes and
income from equity in
affiliates179,546
267,802
38,994
49.2%Income tax expense(41,845)
(61,804)
(8,999)
47.7%Income (loss) from equity in
affiliates45,712
(796)
(116)
(101.7%)
Net income183,413
205,202
29,879
11.9%Less: net loss attributable
to non-controlling interests(2,136)
(2,506)
(365)
17.3%Less: net loss attributable
to redeemable non-
controlling interest of
Subsidiary(333)
-
-
(100.0%)Less: effect on retained
earnings caused by
termination of redeemable
non-controlling interest of a
subsidiary6,201
-
-
(100.0%)
Net income attributable to
Noah shareholders179,681
207,708
30,244
15.6%Income per ADS,basic3.17
3.51
0.51
10.7%Income per ADS,diluted3.03
3.41
0.50
12.5%
Margin analysis:
Operating margin23.4%
32.3%
32.3%
Net margin26.8%
24.5%
24.5%
Weighted average ADS
equivalent[2]:
Basic56,594,562
59,172,524
59,524
Diluted60,749,462
61,615,856
61,856
ADS equivalent outstanding
at end of period56,704,721
59,430,433
59,433
[1] Starting from the first quarter of 2018,we report revenue streams in two categories - revenues from funds
Gopher manages and revenues from others,instead of the previous categories - third-party revenues and related
party revenues,to provide more relevant and accurate information. We also revised the comparative period
presentation to conform to current period classification.[2] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs.
Noah Holdings LimitedCondensed Comprehensive Income Statements(unaudited)
Three months ended
September 30,
Change
2017
2018
2018
RMB'000
RMB'000
USD'000
Net income183,879
11.9%Other comprehensive income,net of tax:
Foreign currency translation adjustments(10,362)
50,719
7,385
(589.4%)Fair value fluctuation of available for sale
Investment (after tax)4,930
(289)
(42)
(105.9%)
Comprehensive income177,981
255,632
37,222
43.6%Less: Comprehensive income (loss)
attributable to non-controlling interests(2,089)
(2,634)
(384)
26.1%Less: Loss attributable to redeemable
non-controlling interest of a subsidiary(333)
-
-
(100.0%)
Comprehensive income attributable to
Noah shareholders180,403
258,266
37,606
43.2%
Noah Holdings LimitedSupplemental Information(unaudited)
As of
September 30,
2017
September 30,
2018
Change
Number of registered clients175,979
236,906
34.6%Number of relationship managers1,286
1,559
21.2%Number of cities under coverage78
83
6.4%
Three months ended
September 30,
2018
Change
(in millions of RMB,except number of active clients and percentages)Number of active clients4,456
4,108
(7.8%)Transaction value:
Fixed income products10,785
22,775
111.2%Private equity products9,578
3,300
(65.5%)Secondary market equity products3,105
1,490
(52.0%)Other products79
430
443.1%Total transaction value23,546
27,995
18.9%Average transaction value per active client5.28
6.81
29.0%
Noah Holdings LimitedSegment Condensed Income Statements(unaudited)
Three months ended September 30,2018
Wealth
Management
Business
Asset
Management
Business
Other
Financial
Services
Business
Total
RMB'000
RMB'000
RMB'000
RMB'000
Revenues:
Revenues from others
One-time commissions177,305
558
-
177,863Recurring service fees131,988
8,305
-
140,293Performance-based income12,215
-
-
12,215Other service fees31,133
2,671
64,998
98,802Total revenues from others352,641
11,534
64,998
429,173Revenues from funds Gopher
manages
One-time commissions52,758
1,939
-
54,697Recurring service fees174,083
164,217
-
338,300Performance-based income-
21,411
-
21,411Total revenues from funds Gopher
manages226,841
187,567
-
414,408Total revenues579,482
199,101
64,998
843,581Less: business taxes and related
surcharges(2,587)
(630)
(1,380)
(4,597)
Net revenues576,895
198,471
63,618
838,984Operating costs and expenses:
Compensation and benefits
Relationship manager compensation(143,550)
(10)
(271)
(143,831)Performance fee compensation-
(5,975)
-
(5,975)Other compensations(142,420)
(62,725)
(30,149)
(235,294)Total compensation and benefits(285,970)
(68,710)
(30,420)
(385,100)Selling expenses(74,160)
(3,747)
(3,317)
(81,224)General and administrative
expenses(34,092)
(20,046)
(5,872)
(60,010)Other operating expenses(23,010)
(4,258)
(23,838)
(51,106)Government grants9,518
-
-
9,518Total operating costs and expenses(407,714)
(96,761)
(63,447)
(567,922)
Income from operations169,181
101,710
171
271,062
Noah Holdings LimitedSegment Condensed Income Statements (unaudited) Three months ended September 30,2017
Wealth
ManagementBusiness
Asset
ManagementBusiness
Other
Financial
Services
Business
Total
RMB'000
RMB'000
RMB'000
RMB'000
Revenues:
Revenues from others
One-time commissions87,139
316
-
87,455Recurring service fees138,571
6,509
-
145,080Performance-based income48,349
410
-
48,759Other service fees19,991
4,974
31,236
56,201Total revenues from others294,050
12,209
31,236
337,495Revenues from funds Gopher manages
One-time commissions125,517
81
-
125,598Recurring service fees72,355
126,951
-
199,306Performance-based income-
26,020
-
26,020Total revenues from funds Gopher manages197,872
153,052
-
350,924Total revenues491,922
165,261
31,236
688,419Less: business taxes and related
surcharges(3,059)
(709)
(338)
(4,106)
Net revenues488,863
164,552
30,898
684,313Operating costs and expenses:
Compensation and benefits
Relationship manager
compensation(157,561)
-
(749)
(158,310)Other compensations(116,828)
(52,178)
(28,865)
(197,871)Total compensation and benefits(274,389)
(52,178)
(29,614)
(356,181)Selling expenses(69,769)
(3,801)
(3,397)
(76,967)General and administrative
expenses(26,216)
(21,803)
(12,719)
(60,738)Other operating expenses(14,749)
(11,403)
(9,178)
(35,330)Government grants3,097
2,137
-
5,234Total operating costs and expenses(382,026)
(87,048)
(54,908)
(523,982)
Income (loss) from operations 106,837
77,504
(24,010)
160,331
Noah Holdings LimitedReconciliation of GAAP to Non-GAAP Results(In RMB,except for per ADS data and percentages)(unaudited)[5]
Three months ended
September 30,
Change
2017
2018
RMB'000
RMB'000
Net income attributable to Noah shareholders179,708
15.6%Adjustment for share-based compensation related to:
Share options15,105
11,177
(26.0%)Restricted shares14,396
24,470
70.0%Less: loss from fair value changes of equity securities
(unrealized)-
(20,686)
N.AAdd: Gains from sales of equity securities-
29,891
N.ANon-GAAP net income attributable to Noah
shareholders*209,182
293,932
40.5%
Net marginattributable to Noah shareholders26.3%
24.8%
Non-GAAP net margin attributable to Noah shareholders*30.6%
35.0%
Net income attributable to Noah shareholders per ADS,
diluted3.03
3.41
12.5%Non-GAAP net income attributable to Noah shareholders
per ADS,diluted*3.52
4.81
36.6%
* The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments.
[5] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity securities (unrealized) and adjusting for sale of equity securities.
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