Noah Holdings Limited Announces Unaudited Financial Results for the First Quarter of 2019

Author: Noah Holdings Limited / 2023-07-23 20:53 / Source: Noah Holdings Limited

Noah Holdings Limited Announces Unaudited Financial Results for the First Quarter of 2019

SHANGHAI,May 17,2019 --Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH),a leading wealth and asset management service provider in China with a focus on high net worth individuals,today announced itsunaudited financial results for the first quarter of 2019.

FIRST QUARTER 2019 FINANCIAL HIGHLIGHTS

Net revenuesfor the first quarter of 2019 were RMB889.9million(US$132.6 million),a 7.1% increase from the corresponding period in 2018.

(RMB millions,

except percentages)

Q1 2018

Q1 2019

YoY Change

Wealth management

594.2

623.4

4.9%

Asset management

194.3

167.9

(13.6%)

Lending and other businesses

42.4

98.6

132.6%

Total net revenues

830.9

889.9

7.1%

Income from operationsfor the first quarter of 2019 wasRMB302.5 million (US$45.1 million),a 10.2%increasefrom the corresponding period in 2018.

(RMB millions,

except percentages)

Q1 2018

Q1 2019

YoY Change

Wealth management

184.0

189.5

3.0%

Asset management

109.4

67.8

(38.1%)

Lending and other businesses

(18.9)

45.2

N.A.

Total income from operations

274.5

302.5

10.2%

Net income attributable to Noah shareholders for the first quarter of 2019 was RMB284.6 million (US$42.4 million),a 6.0% increase from the corresponding period in 2018.

Non-GAAP[1] net income attributable to Noah shareholders for the first quarter of 2019 was RMB304.6 million (US$45.4 million),a 19.9% increase from the corresponding period in 2018.

[1]Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation,fair value changes of equity securities (unrealized),adjustment for sale of equity securities and net of relevant tax impact,if any.See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

FIRST QUARTER 2019 OPERATIONAL UPDATES

Wealth Management Business

The Company's wealth management business offers financial products and provides value-added services to high net worth clients in China and overseas. Noah primarily distributes credit,private equity,public securities and insurance products denominated in RMB and other currencies.

Total number of registered clients as of March 31,2019 was 274,893,a 39.6% increase from March 31,2018.

Total number of active clients[2] during the first quarter of 2019 was 8,117,a 49.0% increase from the first quarter of 2018.

Aggregate value of financial products distributed during the first quarter of 2019 was RMB28.0 billion (US$4.2 billion),a 0.8% increase from the first quarter of 2018.

Product type

Three months ended March 31,

2018

2019

(RMB in billions,except percentages)

Credit[3]products

13.2

47.6%

22.1

78.8%

Private equity products

6.3

22.6%

1.3

4.8%

Public securities[4]products

7.9

28.2%

3.2

11.4%

Other products

0.4

1.6%

1.4

5.0%

All products

27.8

100.0%

28.0

100.0%

Average transaction value per active client[5]for the first quarter of 2019 was RMB3.5 million (US$0.5 million),a 32.3% decrease from the corresponding period in 2018.

Coverage network in mainland China included 313 service centers covering 83 cities as of March 31,2019,up from 263 service centers covering 81 cities as of March 31,2018 and unchanged from December 31,2018.

Number of relationship managers was 1,496 as of March 31,a 7.9% increase from March 31,2018,but a 5.5% decrease from December 31,2018.

[2] "Active clients" for a given period refers to registered high net worth clients who purchase financial products distributed or provided by Noah during that given period.

[3] "Credit products" was previously referred to as "fixed income" products.

[4] "Public securities products" refer to the financial products that invest in publicly traded securities,including stocks and bonds. This was previously referred to as "secondary market equity" financial products. Starting in January 2019,we included the transaction value of mutual fund products in the total transaction value.

[5] "Average transaction value per active client" refers to the average value of financial products that were purchased by active clients during the period specified.

Asset Management Business

The Company's asset management business,Gopher Asset Management,is a leading alternative multi-asset manager in China also with international offices in Hong Kong and the United States. Gopher Asset Managementdevelops and manages private equity,real estate,public securities,creditand multi-strategy investments denominated in Renminbi and other currencies.

Total assets under management as of March31,2019 were RMB171.1 billion (US$25.5 billion),a 1.1% increase from December 31,2018 and a 9.1% increase from March 31,2018.

Investment type

As of

December 31,

2018

Asset

Growth

Asset

Expiration/

Redemption

As of

March 31,

2019

(RMB billions,except percentages)

Private equity

100.2

59.2%

2.1

1.2

101.1

59.1%

Credit

39.4

23.3%

6.4

7.0

38.8

22.7%

Real estate

16.7

9.9%

0.8

0.1

17.4

10.2%

Public securities[4]

6.2

3.6%

1.0

0.3[6]

6.9

4.0%

Multi-strategies[7]

6.7

4.0%

0.3

0.1

6.9

4.0%

All Investments

169.2

100.0%

10.6

8.7

171.1

100.0%

[6] The asset expiration/redemption of public securities also includes market appreciation or depreciation.

[7] "Multi-strategies" investments were previously referred to as "other investments".

Lending and Other Businesses

The Company's lending services business utilizes an advanced risk-management system to assess and facilitate short-term loans to high quality borrowers,often secured with collateral. The total amount of loans originated during the first quarter of 2019 was RMB2.5 billion,as compared with RMB2.1 billion for the corresponding period of 2018,representing an increase of 17.2%. Other businesses include an online financial advisory platform and payment technology services.

Mr. Yi Zhao,Group President of Noah,said,"We have been focusing on the enhancement of operating efficiency,and successfully delivered another quarter of solid financial results,especially reflected in the improvement of operating margin. We have noticed that after the recent market challenges,high net worth clients have become increasingly rational and sophisticated,and their investment appetite has been gradually recovering,which provides us with enhanced business growth opportunities."

FIRST QUARTER 2019 FINANCIAL RESULTS

Net Revenues

Net revenuesfor the first quarter of 2019 were RMB889.9 million (US$132.6 million),a 7.1% increase from the corresponding period in 2018,primarily driven by increased recurring service fees and other service fees,partially offset by a decrease of performance-based income.

- Wealth Management Business

Net revenues from one-time commissions for the first quarter of 2019 were RMB322.7 million (US$48.1 million),a 2.1% increase from the corresponding period in 2018,generally in line with the total amount of transaction value.

Net revenues from recurring service fees for the first quarter of 2019 were RMB256.2 million (US$38.2 million),a 5.4% increase from the corresponding period in 2018. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.

Net revenues from performance-based income for the first quarter of 2019 were RMB1.2 million (US$0.2 million),compared with RMB20.0 million in the corresponding period of 2018. The decrease was primarily due to less performance-based income realized from public securities.

Net revenues from other service fees for the first quarter of 2019 were RMB43.3 million (US$6.4 million),compared with RMB14.9 million in the corresponding period in 2018,primarily due to the growth of the various value-added services Noah offers to its high net worth clients.

- Asset Management Business

Net revenues from recurring service fees for the first quarter of 2019 were RMB162.7 million (US$24.2 million),a 6.4% increase from the corresponding period in 2018. The increase was primarily due to the increase in assets under management.

Net revenues from performance-based income for the first quarter of 2019 were RMB3.6 million (US$0.5 million),compared with RMB39.4 million in the corresponding period of 2018. The decrease was primarily due to less performance-based income realized from public securities.

- Lending and Other Businesses

Net revenues for the first quarter of 2019 were RMB98.6 million (US$14.7 million),a 132.6% increase from the corresponding period in 2018. The increase was primarily due to the growth of loan origination and service fee income generated from loans originated in the previous periods.

Operating Costs and Expenses

Operatingcosts andexpensesfor the first quarter of 2019 were RMB587.4 million (US$87.5 million),a 5.6% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB404.3 million (US$60.2 million),selling expenses of RMB90.5 million (US$13.5 million),general and administrative expenses of RMB58.6 million (US$8.7 million) and other operating expenses of RMB50.8 million (US$7.6 million).

Operating costs and expenses for the wealth management business for the first quarter of 2019 were RMB433.9 million (US$64.7 million),a 5.8% increase from the corresponding period in 2018,primarily due to an increase in compensation and benefits partially offset by a decrease in marketing expenses.

Operating costs and expenses for the asset management business for the first quarter of 2019 were RMB100.1 million (US$14.9 million),a 17.9% increase from the corresponding period in 2018,primarily due to an increase in compensation and benefits.

Operating costs and expenses for lending and other businesses for the first quarter of 2019 were RMB53.4 million (US$8.0 million),a 12.9% decrease from the corresponding period in 2018,primarily due to a decrease in compensation and benefits as employees under non-lending businesses were restructured during the quarter.

Operating Margin

Operating margin for the first quarter of 2019 was 34.0%,an increase from 33.0% for the corresponding period in 2018.

Operating margin for the wealth management business for the first quarter of 2019 was 30.8%,compared with 31.0% for the corresponding period in 2018.

Operating margin for the asset management business for the first quarter of 2019 was 39.1%,compared with 56.3% for the corresponding period in 2018.

Income from operation for the lending and other businesses for the first quarter of 2019 was RMB45.2 million (US$6.7 million),compared with an operating loss of RMB18.9 million for the corresponding period in 2018.

Investment Income

Investment incomefor the first quarter of 2019 was RMB25.7 million (US$3.8 million),compared with RMB42.1 million for the corresponding period in 2018. The decrease was primarily related to the fluctuation of fair value of equity securities,which contributed RMB8.7 million (US$1.3 million) of investment income in the first quarter of 2019,as compared to RMB34.8 million investment income in the corresponding period of 2018.

Income Tax Expenses

Income tax expensesfor the first quarter of 2019 were RMB79.5 million (US$11.8 million),a 7.9% increase from the corresponding period in 2018. The increase was primarily due to higher taxable income.

Net Income

- Net Income

Net income for the first quarter of 2019 was RMB287.6 million (US$42.9 million),a 10.3% increase from the corresponding period in 2018.

Net margin for the first quarter of 2019 was 32.3%,up from 31.4% for the corresponding period in 2018.

Net income attributable to Noah shareholders for the first quarter of 2019 was RMB284.6 million (US$42.4 million),a 6.0% increase from the corresponding period in 2018.

Net income attributable to Noah shareholders per basic and diluted ADS for the first quarter of 2019 was RMB4.70 (US$0.70) and RMB4.57 (US$0.68),respectively,compared with RMB4.70 and RMB4.44 respectively,for the corresponding period in 2018.

- Non-GAAP Net Income Attributable to Noah Shareholders

Non-GAAP net income attributable to Noah shareholders for the first quarter of 2019 was RMB304.6 million (US$45.4 million),a 19.9% increase from the corresponding period in 2018.

Non-GAAP net margin attributable to Noah shareholders for the first quarter of 2019 was 34.2%,up from 30.6% for the corresponding period in 2018.

Non-GAAP net income attributable to Noah shareholders per diluted ADS for the first quarter of 2019 was RMB4.90 (US$0.73),up from RMB4.21 for the corresponding period in 2018.

Balance Sheet and Cash Flow

As of March 31,the Company had RMB2,869.6 million (US$427.6 million)in cash and cash equivalents,compared with RMB2,704.1 million as of December 31,2018 and RMB2,151.4 million as of March 31,2018.

Net cash inflow from the Company's operating activities during the first quarter of 2019 was RMB152.7 million (US$22.8 million),driven by profit earned from normal business operations and partially offset by working capital change.

Net cash outflow from the Company's investing activities during the first quarter of 2019 was RMB67.5 million (US$10.1 million),primarily due to the increase in property and equipment and various investments and partially offset by proceeds from sales of loans.

Net cash inflow from the Company's financing activities was RMB88.6 million (US$13.2 million) in the first quarter of 2019,primarily due to the capital contribution by non-controlling shareholders of a consolidated subsidiary.

2019 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2019 will be in the range of RMB1.13 billion to RMB1.18 billion,an increase of 11.9% to 16.8% compared with the full year 2018. 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 first quarter 2019 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

Conference call details

Date/Time:

Thursday,May 16,2019 at 8:00 p.m.,U.S. Eastern Time

Friday,2019 at 8:00 a.m.,Hong Kong Time

Dial in details:

-United States Toll Free

+1-888-317-6003

-Mainland China Toll Free

4001-206-115

-Hong Kong Toll Free

800-963-976

-International

+1-412-317-6061

Conference Title:

Noah Holdings First Quarter 2019 Earnings Call

Participant Entry No.:

1098879

Participants will need to dial in 10-15 minutes early and use this 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 May 23,2019 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10131248.

A live and archived webcast of the conference call will be available at Noah's investor relations website under the News & Events section at ir.noahgroup.com.

DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES

In the first quarter of 2019,the Company adopted Accounting Standards Update (ASU) 2016-02,Leases (Topic 842),which supersedes the lease accounting guidance under Topic 840,and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount,timing and uncertainty of cash flows arising from leasing arrangements. We adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. The Company also elected the package of practical expedients,which among other things,does not require reassessment of lease classification.

In addition to disclosing financial results prepared in accordance with U.S. GAAP,the Company's earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation,fair value changes of equity investments (unrealized),adjustment for sale of equity securities and net of tax impact,if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

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

When evaluating the Company's operating performance in the periods presented,management reviewed the foregoing non-GAAP net income attributable to Noah shareholders and per diluted ADS and non-GAAP net margin attributable to Noah shareholders to supplement U.S. GAAP financial data. As such,the Company's management believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management.

ABOUT NOAH HOLDINGS LIMITED

Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on high net worth individuals. In the first quarter of 2019,Noah distributed RMB28.0 billion (US$4.2 billion) of financial products. Through Gopher Asset Management,Noah had assets under management of RMB171.1 billion (US$25.5 billion) asof March 31,2019.

Noah's wealth management business primarily distributes credit,public securities and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,496 relationship managers across 313 service centers in 83 cities in mainland China,and serves the international investment needs of its clients through offices in Hong Kong,Taiwan,United States,Canada,Australia and Singapore. The Company's wealth management business had 274,893 registered clients as of March 31,2019. As a leading alternative multi-asset manager in China,Gopher Asset Management manages private equity,credit and multi-strategyinvestments denominated in Renminbi and other currencies.The Company also provides lending services and other services including an online financial advisory platform and payment technology services.

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

FOREIGN CURRENCY TRANSLATION

In this announcement,the unaudited financial results for the first quarter of 2019 ended March 31,2019 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted,all translations from RMB to US$ are made at a rate of RMB6.7112 to US$1.00,the effective noon buying rate for March 29,2019 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 2019 and quotations from management in this announcement,as well as Noah's strategic and operational plans,contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Statements that are not historical facts,including statements about Noah's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah's actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: its goals and strategies; its future business development,financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah's filings with the U.S. Securities and Exchange Commission,including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release,and Noah does not undertake any obligation to update any such information,including forward-looking statements,as a result of new information,future events or otherwise,except as required under the applicable law.

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)

As of

December 31,

March 31,

2018

2019

RMB'000

USD'000

Assets

Current assets:

Cash and cash equivalents

2,704,091

2,869,638

427,589

Restricted cash

2,500

373

Short-term investments (including short-term investments

measured at fair value of RMB438,077 thousands and

RMB469,205 thousands,as of December 31,2018 and

March 31,respectively)

450,477

501,646

74,748

Accounts receivable,net of allowance for doubtful accounts

of nil as of December 31,2018 and March 31,2019

282,431

330,770

49,286

Loans receivable,net

620,219

507,650

75,642

Amounts due from related parties

572,201

664,305

98,985

Loans receivable from factoring business

18,893

14,010

2,088

Other current assets

453,269

476,160

70,950

Total current assets

5,104,081

5,366,679

799,661

Long-term investments (including long-term investments

measured at fair value of RMB609,151thousands and

RMB687,159 thousands,respectively)

1,025,065

1,056,387

157,407

Investment in affiliates

1,375,110

1,401,542

208,836

Property and equipment,net

346,653

332,570

49,554

Operating lease right-of-use assets,net

290,062

43,220

Non-current deferred tax assets

113,384

113,383

16,895

Other non-current assets

49,971

67,577

10,068

Total Assets

8,014,264

8,628,200

1,285,641

Liabilities and Equity

Current liabilities:

Accrued payroll and welfare expenses

671,200

727,796

108,445

Income tax payable

54,296

106,337

15,845

Deferred revenues

142,925

154,723

23,054

Other current liabilities

722,652

540,184

80,490

Total current liabilities

1,591,073

1,529,040

227,834

Operating lease liabilities,non-current

311,650

46,437

Non-current deferred tax liabilities

67,092

66,992

9,982

Convertible notes

145,004

Other non-current liabilities

35,718

28,638

4,267

Total Liabilities

1,838,887

1,936,320

288,520

Equity

6,175,377

6,691,880

997,121

Total Liabilities and Equity

8,641

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

Three months ended

March 31,

Change

2018

2019

Revenues:

RMB'000

USD'000

Revenues from others:

One-time commissions

219,541

216,643

32,281

(1.3%)

Recurring service fees

143,932

132,476

19,740

(8.0%)

Performance-based income

20,657

1,094

163

(94.7%)

Other service fees

59,989

145,377

21,662

142.3%

Total revenues from others

444,119

495,590

73,846

11.6%

Revenues from funds Gopher

manages:

One-time commissions

98,384

107,908

16,079

9.7%

Recurring service fees

254,067

288,156

42,937

13.4%

Performance-based income

39,048

3,758

560

(90.4%)

Total revenues from funds Gopher

manages

391,499

399,822

59,576

2.1%

Total revenues

835,618

895,412

133,422

7.2%

Less: VAT related surcharges

(4,699)

(5,528)

(824)

17.6%

Net revenues

830,919

889,884

132,598

7.1%

Operating costs and expenses:

Compensation and benefits

Relationship manager

compensation

(158,701)

(167,268)

(24,924)

5.4%

Performance fee

compensation

(6,200)

(1,276)

(190)

(79.4%)

Other compensations

(195,812)

(235,761)

(35,129)

20.4%

Total compensation and benefits

(360,713)

(404,305)

(60,243)

12.1%

Selling expenses

(106,259)

(90,456)

(13,478)

(14.9%)

General and administrative

expenses

(55,929)

(58,550)

(8,724)

4.7%

Other operating expenses

(37,963)

(50,828)

(7,574)

33.9%

Government subsidies

4,488

16,780

2,500

273.9%

Total operating costs and

expenses

(556,376)

(587,359)

(87,519)

5.6%

Income from operations

274,543

302,525

45,079

10.2%

Other income:

Interest income

22,867

23,123

3,445

1.1%

Interest expenses

(6,869)

(430)

(64)

(93.7%)

Investment income

42,132

25,663

3,824

(39.1%)

Other income(expense)

1,163

(1,928)

(287)

(265.8%)

Total other income

59,293

46,428

6,918

(21.7%)

Income before taxes and income

from equity in affiliates

333,836

348,953

51,997

4.5%

Income tax expense

(73,662)

(79,492)

(11,845)

7.9%

Income from equity in affiliates

652

18,123

2,700

2,679.6%

Net income

260,826

287,584

42,852

10.3%

Less: net (loss) income

attributable to non-controlling

interests

(7,639)

3,007

448

N.A.

Net income attributable to Noah

shareholders

268,465

284,577

42,404

6.0%

Income per ADS,basic

4.70

0.70

Income per ADS,diluted

4.44

4.57

0.68

2.9%

Margin analysis:

Operating margin

33.0%

34.0%

Net margin

31.4%

32.3%

Weighted average ADS

equivalent[1]:

Basic

57,166,048

60,570,704

60,704

Diluted

61,384,898

62,355,964

62,964

ADS equivalent outstanding at end

of period

57,225,760

61,180,845

61,845

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

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

Three months ended

March31,

Change

2018

2019

RMB'000

USD'000

Net income

260,851

10.3%

Other comprehensive income,net of tax:

Foreign currency translation adjustments

(34,863)

(30,858)

(4,598)

(11.5%)

Fair value fluctuation of available for sale

Investment (after tax)

1,376

(94.6%)

Comprehensive income

227,339

256,800

38,264

13.0%

Less: Comprehensive (loss) income

attributable to non-controlling interests

(7,579)

3,217

479

N.A.

Comprehensive income attributable to

Noah shareholders

234,918

253,583

37,785

7.9%

Noah Holdings Limited

Supplemental Information

(unaudited)

As of

March 31,

2018

March 31,

2019

Change

Number of registered clients

196,927

274,893

39.6%

Number of relationship managers

1,386

1,496

7.9%

Number of cities under coveragein mainland

China

2.5%

Three months ended

March 31,

2019

Change

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

percentages)

Number of active clients

5,449

8,117

49.0%

Transaction value:

Credit products

13,247

22,101

66.8%

Private equity products

6,279

1,333

(78.8%)

Public securities products

7,854

3,205

(59.2%)

Other products

433

1,401

223.5%

Total transaction value

27,813

28,040

0.8%

Average transaction value per active client

5.10

3.45

(32.3%)

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

Three months ended March 31,2019

Wealth

Management

Business

Asset

Management

Business

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Revenues from others:

One-time commissions

216,180

463

216,643

Recurring service fees

131,618

858

132,476

Performance-based income

1,094

Other service fees

43,445

1,166

100,766

145,377

Total revenues from others

392,337

2,487

100,766

495,590

Revenues from funds Gopher manages:

One-time commissions

107,908

Recurring service fees

125,751

162,405

288,156

Performance-based income

3,661

3,758

Total revenues from funds Gopher

manages

233,756

166,066

399,822

Total revenues

626,093

168,553

100,766

895,412

Less: VAT related surcharges

(2,730)

(628)

(2,170)

(5,528)

Net revenues

623,363

167,925

98,596

889,884

Operating costs and expenses:

Compensation and benefits

Relationship manager compensation

(167,125)

(143)

(167,268)

Performance fee compensation

(1,276)

Other compensations

(146,458)

(63,936)

(25,367)

(235,761)

Total compensation and benefits

(313,583)

(65,212)

(25,510)

(404,305)

Selling expenses

(83,114)

(3,903)

(3,439)

(90,456)

General and administrative expenses

(37,336)

(15,261)

(5,953)

(58,550)

Other operating expenses

(15,086)

(17,266)

(18,476)

(50,828)

Government subsidies

15,218

1,562

16,780

Total operating costs and expenses

(433,901)

(100,080)

(53,378)

(587,359)

Income from operations

189,462

67,845

45,218

302,525

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

Three months ended March 31,2018

Wealth

Management

Business

Asset

Management

Business

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Revenues from others:

One-time commissions

219,283

258

219,541

Recurring service fees

141,329

2,603

143,932

Performance-based income

20,126

531

20,657

Other service fees

14,993

1,791

43,205

59,989

Total revenues from others

395,731

5,183

43,205

444,119

Revenues from funds Gopher

manages:

One-time commissions

98,318

98,384

Recurring service fees

103,069

150,998

254,067

Performance-based income

39,048

Total revenues from funds Gopher

manages

201,387

190,112

391,499

Total revenues

597,118

195,295

43,205

835,618

Less: VAT related surcharges

(2,936)

(944)

(819)

(4,699)

Net revenues

594,182

194,351

42,386

830,919

Operating costs and expenses:

Compensation and benefits

Relationship manager

compensation

(157,926)

(775)

(158,701)

Performance fee compensation

(6,200)

Other compensations

(118,761)

(45,143)

(31,908)

(195,812)

Total compensation and benefits

(276,687)

(51,343)

(32,683)

(360,713)

Selling expenses

(91,314)

(5,814)

(9,131)

(106,259)

General and administrative

expenses

(36,716)

(13,754)

(5,459)

(55,929)

Other operating expenses

(8,295)

(14,605)

(15,063)

(37,963)

Government subsidies

2,808

640

1,040

4,488

Total operating costs and expenses

(410,204)

(84,876)

(61,296)

(556,376)

Income (loss) from operations

183,978

109,475

(18,910)

274,543

Noah Holdings Limited

Supplement Revenue Information for Segment

(unaudited)

Three months ended March 31,2019

Wealth

Management

Business

Asset

Management

Business

Lendingand

Other

Businesses

Total

RMB'000

Revenues:

Mainland China

401,523

145,608

100,766

647,897

Hong Kong

180,596

20,943

201,539

Others

43,974

2,002

45,976

Total revenues

626,412

Three months ended March 31,2018

Wealth

Management

Business

Asset

Management

Business

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Mainland China

463,431

150,429

43,205

657,065

Hong Kong

133,687

44,866

178,553

Total revenues

597,618

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)[8]

Three months ended

March 31,

Change

2018

2019

RMB'000

Net income attributable to Noah shareholders

268,577

6.0%

Adjustment for share-based compensation related to:

Share options

12,210

13,413

9.9%

Restricted shares

10,491

16,203

54.4%

Less: gains from fair value changes of equity securities

(unrealized)

34,788

8,742

(74.9%)

Add: gains from sales of equity securities (realized)

4,885

N.A.

Less: Tax effect of adjustments

2,283

5,714

150.3%

Adjusted net income attributable to Noah shareholders

(non-GAAP)

254,095

304,622

19.9%

Net marginattributable to Noah shareholders

32.3%

32.0%

Non-GAAP net margin attributable to Noah shareholders

30.6%

34.2%

Net income attributable to Noah shareholders per ADS,

diluted

4.44

4.57

2.9%

Non-GAAP net income attributable to Noah shareholders

per ADS,diluted

4.21

4.90

16.4%

[8]Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation,if any.