Noah Holdings Limited Announces Unaudited Financial Results for the First Quarter of 2020

Author: Noah Holdings Limited / 2023-07-23 21:44 / Source: Noah Holdings Limited

Noah Holdings Limited Announces Unaudited Financial Results for the First Quarter of 2020

SHANGHAI,May 19,2020 -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH),a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises,today announced itsunaudited financial results for the first quarter of 2020.

FIRST QUARTER 2020 FINANCIAL HIGHLIGHTS

Net revenues for the first quarter of 2020 were RMB746.1 million (US$105.4 million),compared with RMB889.9 million for the corresponding period in 2019,and RMB788.3 million for the fourth quarter of 2019.

(RMB millions,

except percentages)

Q1 2019

Q1 2020

YoY Change

Wealth management

623.4

552.6

(11.4%)

Asset management

167.9

165.4

(1.5%)

Lending and other businesses

98.6

28.1

(71.5%)

Total net revenues

889.9

746.1

(16.2%)

Income/ (loss) from operations for the first quarter of 2020 was RMB256.3 million (US$36.2 million),a 15.3% decrease from the corresponding period in 2019,and a 102.9% increase from the fourth quarter of 2019.

(RMB millions,

except percentages)

Q1 2019

Q1 2020

YoY Change

Wealth management

189.5

166.2

(12.3%)

Asset management

67.8

93.5

37.9%

Lending and other businesses

45.2

(3.4)

N.A.

Total income/(loss) from operations

302.5

256.3

(15.3%)

Net income attributable to Noah shareholders for the first quarter of 2020 was RMB243.0 million (US$34.3 million),a 14.6% decrease from the corresponding period in 2019,but a 136.4% increase from the fourth quarter of 2019.

Non-GAAP[1] net income attributable to Noah shareholders for the first quarter of 2020 was RMB255.9 million (US$36.1 million),a 16.0% decrease from the corresponding period in 2019,but a 119.6% increase from the fourth quarter of 2019.

FIRST QUARTER 2020 OPERATIONAL UPDATES

Wealth Management Business

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

Total number of registered clients as of March 31,2020 was 321,148,a 16.8% increase from March 31,2019,and a 9.3% increase from December 31,2019.

Total number of active clients[2] during the first quarter of 2020 was 4,075,a 49.8% decrease from the first quarter of 2019,and a 9.7% decrease from the fourth quarter of 2019,as we are in the transition of offering more online mutual fund products to our clients. However,counting in mutual funds clients,the number of clients who transacted with us during the first quarter of 2020 were 16,831,a 107.4% increase from the first quarter of 2019,and a 4.0% increase from the fourth quarter.

Aggregate value of financial products distributed during the first quarter of 2020 was RMB23.2 billion (US$3.3 billion),a 17.3% decrease from the first quarter of 2019,primarily due to the fact that the Company is adjusting its product strategy and thus no longer offers single-counterparty private debt products to clients since the third quarter of 2019. The aggregate value increased by 76.1% compared with the fourth quarter of 2019 due to the significant growth of public securities products offered by the Company.

Product type

Three months ended March 31,

2019

2020

(RMB in billions,except percentages)

Credit products

22.1

78.8%

0.2

0.8%

Private equity products

1.3

4.8%

2.9

12.6%

Public securities products

3.2

11.4%

19.1

82.4%

Other products

1.4

5.0%

1.0

4.2%

All products

28.0

100.0%

23.2

100.0%

Coverage network in mainland China included 292 service centers covering 78 cities as of March 31,2020,compared with 313 service centers covering 83 cities as of March 31,2019 and 292 service centers covering 82 cities as of December 31,2019. The decrease in the number of service centers and cities is primarily a result of consolidation of duplicate service centers in order to optimize costs and expenses.

Number of relationship managers was 1,209 as of March 31,a 19.2% decrease from March 31,and a 6.1% decrease from December 31,primarily as a result of the Company's efforts to streamline operational human resources. The turnover rate of core "elite" relationship managers was 1.0%,compared with 4.1% as of December 31,2019.

Asset Management Business

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

Total assets under management as of March 31,2020 were RMB161.7 billion (US$22.8 billion),a 5.0% decrease from December 31,2019 and a 5.5% decrease from March 31,primarily due to the voluntary accelerated repayments of certain credit products.

Investment type

As of

December 31,

2019

Growth

Distribution/

Redemption

As of

March 31,

2020

(RMB billions,except percentages)Private equity104.9

61.6%

0.9

0.1

105.7

65.4%Credit29.6

17.4%

9.7

19.9

12.3%Real estate17.6

10.3%

0.7

0.1

18.2

11.3%Public securities[3]9.3

5.5%

0.8

0.9

9.2

5.7%Multi-strategies8.8

5.2%

0.5

0.6

8.7

5.3%All Investments170.2

100.0%

2.9

11.4

161.7

100.0%Lending and Other BusinessesThe Company's lending business utilizes an advanced risk-management system to assess and facilitate short-term loans to high quality borrowers,often secured with collateral. The total amount of loans originated during the first quarter of 2020 was RMB0.1 billion,compared with RMB2.5 billion for the corresponding period of 2019,due to the slowed down notarization process during the outbreak of COVID-19,and our voluntary reduction of loan origination. Other businesses include an online financial advisory platform.Ms. Jingbo Wang,co-founder and CEO of Noah,said,"In the first quarter of 2020,our transformation to distributing more standardized products showed initial success. Driven by the continuous and strong momentum of public securities products that we offer,our transaction volume grew 76.1% from the fourth quarter of 2019. It is worth noting that standardized products accounted for 82.4% of the total volume,whereas credit products were 78.8% of the total volume in the same period last year. I want to attribute this success to our clients who continue to stand by us and our employees who have been showing great resilience during this difficult time facing an unprecedented global epidemic. As encouraged as we are by the strong start of the year,we remain cautious about the fact that some of Noah's overseas businesses have been affected by the COVID-19 outbreak and the travel restrictions caused by it. We have been actively preparing for the upcoming quarters of this year while increasing the investment and development of our IT infrastructure to further improve our online service experience and product offering. "FIRST QUARTER 2020 FINANCIAL RESULTSNet RevenuesNet revenuesfor the first quarter of 2020 were RMB746.1 million (US$105.4 million),a 16.2% decrease from the corresponding period in 2019,primarily driven by the decreased one-time commissions and other service fees,partially offset by the increase in recurring service fees and performance-based income.Wealth Management Business- Net revenues from one-time commissionsfor the first quarter of 2020 were RMB210.7 million (US$29.8 million),a 34.7% decrease from the corresponding period in 2019,primarily due to the decrease in transaction value as well as change in product mix resulting lower commission rate of financial products that we distributed. However,it increased 33.1% from the fourth quarter of 2019,primarily due to the increased transaction volume in public securities products.

- Net revenues from recurring service feesfor the first quarter of 2020 were RMB289.2 million (US$40.8 million),a 12.9% increase from the corresponding period in 2019. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.

- Net revenues from performance-based incomefor the first quarter of 2020 were RMB15.1 million (US$2.1 million),compared with RMB1.2 million in the corresponding period of 2019. The increase was primarily due to more performance-based income realized from public securities.

- Net revenues from other service feesfor the first quarter of 2020 were RMB37.6 million (US$5.3 million),compared with RMB43.3 million in the corresponding period in 2019,primarily due to less value-added services Noah offers to its high net worth clients during the COVID-19 epidemic.Asset Management Business- Net revenues from recurring service fees for the first quarter of 2020 were RMB160.4 million (US$22.7 million),a 1.4% decrease from the corresponding period in 2019. The decrease was primarily due to the decrease in assets under management.

- Net revenues from performance-based income for the first quarter of 2020 were RMB4.6 million (US$0.6 million),compared with RMB3.6 million in the corresponding period of 2019.The increase was primarily due to more performance-based income realized from public securities.Lending and Other Businesses- Net revenues for the first quarter of 2020 were RMB28.1 million (US$4.0 million),a 71.5% decrease from the corresponding period in 2019. The decrease was primarily due to reduced loan origination since the second half year of 2019.Operating Costs and ExpensesOperatingcosts andexpensesfor the first quarter of 2020 were RMB489.9 million (US$69.2 million),a 16.6% decrease from the corresponding period in 2019. Operating costs and expenses primarily consisted of compensation and benefits of RMB364.8 million (US$51.5 million),selling expenses of RMB44.5 million (US$6.3 million),general and administrative expenses of RMB63.7 million (US$9.0 million),provision of credit losses of RMB2.8 million (US$0.4 million) and other operating expenses of RMB32.6 million (US$4.6 million).Operating costs and expenses for the wealth management business for the first quarter of 2020 were RMB386.4 million (US$54.6 million),a 10.9% decrease from the corresponding period in 2019,primarily due to various cost control measurements that we took in the first quarter of 2020,including a decrease in compensation and benefits and selling expenses partially offset by an increase in general administrative expenses.Operating costs and expenses for the asset management business for the first quarter of 2020 were RMB71.9 million (US$10.2 million),a 28.1% decrease from the corresponding period in 2019,primarily due to a decrease in compensation and benefits,selling expenses and general administrative expenses.Operating costs and expenses for lending and other businesses for the first quarter of 2020 were RMB31.5 million (US$4.5 million),a 40.9% decrease from the corresponding period in 2019,primarily due to a decrease in compensation and benefits and selling expenses.Operating MarginOperating margin for the first quarter of 2020 was 34.3%,compared with 34.0% for the corresponding period in 2019.Operating margin for the wealth management business for the first quarter of 2020 was 30.1%,compared with 30.4% for the corresponding period in 2019.Operating margin for the asset management business for the first quarter of 2020 was 56.5%,compared with 40.4% for the corresponding period in 2019.Loss from operation for the lending and other businesses for the first quarter of 2020 was RMB3.5 million (US$0.5 million),compared with an operating income of RMB45.2 million for the corresponding period in 2019.Investment IncomeInvestment incomefor the first quarter of 2020 was RMB17.6 million (US$2.5 million),compared with RMB25.7 million for the corresponding period in 2019. The decrease was primarily related to the fluctuation of fair value of equity securities.Income Tax ExpensesIncome tax expensesfor the first quarter of 2020 were RMB68.3 million (US$9.6 million),a 14.1% decrease from the corresponding period in 2019. The decrease was primarily due to lower taxable income.Net IncomeNet Income- Net income for the first quarter of 2020 was RMB243.7 million (US$34.4 million),a 15.3% decrease from the corresponding period in 2019.

- Net margin for the first quarter of 2020 was 32.7%,up from 32.3% for the corresponding period in 2019.

- Net income attributable to Noah shareholders for the first quarter of 2020 was RMB243.0 million (US$34.3 million),but a 136.4% increase from the fourth quarter of 2019.

- Net margin attributable to Noah shareholders for the first quarter of 2020 was 32.6%,up from 32.0% for the corresponding period in 2019.

- Net income attributable to Noah shareholders per basic and diluted ADSfor the first quarter of 2020 was RMB3.94 (US$0.56) and RMB3.92 (US$0.55),respectively,compared with RMB4.70 and RMB4.57 respectively,for the corresponding period in 2019.Non-GAAP Net Income Attributable to Noah Shareholders - Non-GAAP net income attributable to Noah shareholders for the first quarter of 2020 was RMB255.9 million (US$36.1 million),but a 119.6% increase from the fourth quarter of 2019.

- Non-GAAP net margin attributable to Noah shareholders for the first quarter of 2020 was 34.3%,up from 34.2% for the corresponding period in 2019.

- Non-GAAP net income attributable to Noah shareholders per diluted ADS for the first quarter of 2020 was RMB4.13 (US$0.58),down from RMB4.90 for the corresponding period in 2019.Balance Sheet and Cash FlowAs of March 31,the Company had RMB4,045.8 million (US$571.4 million)in cash and cash equivalents,compared with RMB4,387.3 million as of December 31,2019 and RMB2,869.6 million as of March 31,2019.Net cash outflow from the Company's operating activities during the first quarter of 2020 was RMB123.1 million (US$17.4 million),primarily due to the payment of other current liabilities in relation to our trust service and partially offset by cash inflow generated from operating profit.Net cash outflow from the Company's investing activities during the first quarter of 2020 was RMB133.4 million (US$18.8 million),primarily due to the purchase of held-to-maturity investments.Net cash outflow from the Company's financing activities was RMB95.4 million (US$13.5 million) in the first quarter of 2020,primarily due to the capital divestment of non-controlling interest of one consolidated fund.[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.[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,excluding clients who transacted on our online mutual fund platform.[3] The asset distribution/redemption of public securities also includes market appreciation or depreciation.2020 FORECASTThe Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2020 will be in the range of RMB800 million to RMB900 million. This 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 2020 unaudited financial results and recent business activities.The conference call may be accessed with the following details:Conference call details Date/TimeMonday,May 18,2020at 8:00 p.m.,U.S. Eastern TimeTuesday,2020at 8:00 a.m.,Hong Kong TimeDial in details

-United States Toll Free+1-888-317-6003-Mainland China Toll Free4001-206-115-Hong Kong Toll Free800-963-976-International+1-412-317-6061Conference TitleNoah Holdings First Quarter 2020 Earnings CallParticipant Elite Entry Number6168003Participants will need to dial in 10-15 minutes early and use the above 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 untilMay 25,2020at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10143551.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 NON-GAAP MEASURES In addition to disclosing financial results prepared in accordance with U.S. GAAP,the Company's earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation,fair value changes of equity investments (unrealized),adjustment for sale of equity securities and net of tax impact,if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measures used by the Company may be prepared differently from and,therefore,may not be comparable to similarly titled measures used by other companies.When evaluating the Company's operating performance in the periods presented,management reviewed the foregoing non-GAAP net income attributable to Noah shareholders and per diluted ADS and non-GAAP net margin attributable to Noah shareholders to supplement U.S. GAAP financial data. As such,the Company's management believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management.ABOUT NOAH HOLDINGS LIMITEDNoah 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 2020,Noah distributed RMB23.2 billion (US$3.3 billion) of financial products. Through Gopher Asset Management,Noah had assets under management of RMB161.7 billion (US$22.8 billion) asof March 31,2020.Noah's wealth management business primarily distributes credit,private equity,public securities and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,209 relationship managers across 292 service centers in 78 cities in mainland China,and serves the international investment needs of its clients through offices in Hong Kong,Taiwan,United States,Canada,Australia and Singapore. The Company's wealth management business had 321,148 registered clients as of March 31,2020. As a leading alternative multi-asset manager in China,Gopher Asset Management manages private equity,credit and multi-strategyinvestments denominated in Renminbi and other currencies.The Company also provides lending services and other businesses.For more information,please visit Noah at ir.noahgroup.com.FOREIGN CURRENCY TRANSLATIONIn this announcement,the unaudited financial results for the first quarter of 2020 ended March 31,2020 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ 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 RMB7.0808 to US$1.00,the effective noon buying rate for March 31,2020 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 2020 and quotations from management in this announcement,as well as Noah's strategic and operational plans,contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission,in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Statements that are not historical facts,including statements about Noah's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah's actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: its goals and strategies; its future business development,financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; 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 LimitedCondensed Consolidated Balance Sheets(unaudited)

As of

December 31,

March 31,

2019

2020

RMB'000

USD'000Assets

Current assets:

Cash and cash equivalents4,387,345

4,045,796

571,376

Restricted cash6,589

6,583

930

Short-term investments671,259

97,863

13,821

Accounts receivable,net219,566

297,493

42,014

Loans receivable,net654,060

620,905

87,689

Amounts due from related parties548,704

757,278

106,948

Other current assets243,701

196,857

27,802

Total current assets6,731,224

6,022,775

850,580

Long-term investments,net881,091

837,449

118,270

Investment in affiliates1,272,261

1,325,649

187,217

Property and equipment,net296,320

271,574

38,354

Operating lease right-of-use assets,net352,186

337,405

47,651

Deferred tax assets167,430

167,254

23,621

Other non-current assets102,092

126,369

17,844Total Assets9,802,604

9,088,475

1,283,537

Liabilities and Equity

Current liabilities:

Accrued payroll and welfare expenses555,719

644,420

91,009

Income tax payable126,743

101,630

14,353

Deferred revenues100,693

141,228

19,945

Other current liabilities721,898

369,847

52,232

Total current liabilities1,505,053

1,257,125

177,539

Operating lease liabilities,non-current362,757

344,078

48,593

Deferred tax liabilities56,401

56,804

8,022

Other non-current liabilities3,433

2,787

394

Total Liabilities1,927,644

1,660,794

234,548

Equity7,874,960

7,427,681

1,048,989Total Liabilities and Equity9,537Noah Holdings LimitedCondensed Consolidated Income Statements(In RMB'000,except for USD data,per ADS data and percentages)(unaudited)

Three months ended

March 31,

Change

2019

2020

Revenues:RMB'000

RMB'000

USD'000

Revenues from others:

One-time commissions216,643

207,185

29,260

(4.4%)Recurring service fees132,476

148,457

20,966

12.1%Performance-based income1,094

14,618

2,064

1,236.2%Other service fees145,377

66,608

9,407

(54.2%)Total revenues from others495,590

436,868

61,697

(11.8%)Revenues from funds Gopher

manages:

One-time commissions107,908

4,749

671

(95.6%)Recurring service fees288,156

303,450

42,855

5.3%Performance-based income3,758

5,175

731

37.7%Total revenues from funds Gopher

manages399,822

313,374

44,257

(21.6%)Total revenues895,412

750,242

105,954

(16.2%)Less: VAT related surcharges(5,528)

(4,125)

(583)

(25.4%)Net revenues889,884

746,117

105,371

(16.2%)Operating costs and expenses:

Compensation and benefits

Relationship manager

compensation(167,268)

(170,052)

(24,016)

1.7%Others(237,037)

(194,787)

(27,509)

(17.8%)Total compensation and benefits(404,305)

(364,839)

(51,525)

(9.8%)Selling expenses(90,456)

(44,540)

(6,290)

(50.8%)General and administrative

expenses(59,001)

(63,685)

(8,994)

7.9%Provision for credit losses451

(2,809)

(397)

N.A.Other operating expenses(50,828)

(32,617)

(4,606)

(35.8%)Government subsidies16,780

18,635

2,632

11.1%Total operating costs and

expenses(587,359)

(489,855)

(69,180)

(16.6%)Income from operations302,525

256,262

36,191

(15.3%)Other income:

Interest income23,123

22,170

3,131

(4.1%)Interest expenses(430)

N.A.Investment income25,663

17,566

2,481

(31.6%)Other (expense) income(1,928)

858

121

N.A.Total other income46,428

40,594

5,733

(12.6%)Income before taxes and income

from equity in affiliates348,953

296,856

41,924

(14.9%)Income tax expense(79,492)

(68,276)

(9,642)

(14.1%)Income from equity in affiliates18,123

15,076

2,129

(16.8%)Net income287,584

243,656

34,411

(15.3%)Less: net income attributable to

non-controlling interests3,007

631

(79.0%)Net income attributable to Noah

shareholders284,577

243,025

34,322

(14.6%)

Income per ADS,basic4.7

3.94

0.56

(16.2%)Income per ADS,diluted4.57

3.92

0.55

(14.2%)

Margin analysis:

Operating margin34.0%

34.3%

Net margin32.3%

32.7%

Weighted average ADS equivalent[1]:

Basic60,570,704

61,619,852

61,852

Diluted62,355,964

61,991,117

61,117

ADS equivalent outstanding at end

of period

61,180,845

61,635,280

61,280

[1]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

March 31,

Change

2019

2020

RMB'000

USD'000

Net income287,411

(15.3%)Other comprehensive income,net of tax:

Foreign currency translation adjustments(30,858)

37,319

5,270

N.A.Fair value fluctuation of available for sale

Investment (after tax)74

(4)

(1)

N.A.Comprehensive income256,800

280,971

39,680

9.4%Less: Comprehensive income attributable

to non-controlling interests3,217

626

(80.5%)Comprehensive income attributable to Noah

shareholders253,583

280,345

39,592

10.6%Noah Holdings LimitedSupplemental Information(unaudited)

As of

March 31,

2019

March 31,

2020

Change

Number of registered clients274,893

321,148

16.8%Number of relationship managers1,496

1,209

(19.2%)Number of cities under coveragein mainland

China83

(6.0%)

Three months ended

March 31,

2020

Change

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

percentages)Number of active clients[4]8,117

4,075

(49.8%)Transaction value:

Credit products22,101

183

(99.2%)Private equity products1,333

2,931

119.9%Public securities products3,205

19,111

496.3%Other products1,401

969

(30.8%)Total transaction value28,040

23,194

(17.3%)

[4] "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,excluding clients who transacted on our online

mutual fund platform.

Noah Holdings LimitedSegment Condensed Income Statements(unaudited)

Three months ended March 31,2020

Wealth

Management

Business

Asset

Management

Business

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Revenues from others:

One-time commissions206,944

241

207,185Recurring service fees147,763

694

148,457Performance-based income14,618

14,618Other service fees37,819

134

28,655

66,608Total revenues from others407,144

1,069

28,655

436,868Revenues from funds Gopher manages:

One-time commissions4,749

4,749Recurring service fees142,860

160,590

303,450Performance-based income556

4,619

5,175Total revenues from funds Gopher manages148,165

165,209

313,374Total revenues555,309

166,278

28,655

750,242Less: VAT related surcharges(2,670)

(868)

(587)

(4,125)Net revenues552,639

165,410

28,068

746,117Operating costs and expenses:

Compensation and benefits

Relationship manager compensation(170,052)

(170,052)Other compensations(118,227)

(61,313)

(15,247)

(194,787)Total compensation and benefits(288,279)

(61,247)

(364,839)Selling expenses(36,555)

(7,314)

(671)

(44,540)General and administrative expenses(47,582)

(10,730)

(5,373)

(63,685)Provision for credit losses-

(2,809)

(2,809)Other operating expenses(23,602)

(1,546)

(7,469)

(32,617)Government subsidies9,607

8,981

18,635Total operating costs and expenses(386,411)

(71,922)

(31,522)

(489,855)Income (loss) from operations166,228

93,488

(3,454)

256,262Noah Holdings LimitedSegment Condensed Income Statements (unaudited)

Three months ended March 31,2019

Wealth ManagementBusiness

Asset ManagementBusiness

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Revenues from others:

One-time commissions216,180

463

216,643Recurring service fees131,618

858

132,476Performance-based income1,094

1,094Other service fees43,445

1,166

100,766

145,377Total revenues from others392,337

2,487

100,766

495,590Revenues from funds Gopher

manages:

One-time commissions107,908

107,908Recurring service fees125,751

162,405

288,156Performance-based income97

3,661

3,758Total revenues from funds Gopher

manages233,756

166,066

399,822Total revenues626,093

168,553

100,766

895,412Less: VAT related surcharges(2,730)

(628)

(2,170)

(5,528)Net revenues623,363

167,925

98,596

889,884Operating costs and expenses:

Compensation and benefits

Relationship manager

compensation(167,125)

(143)

(167,268)Other compensations(146,458)

(65,212)

(25,367)

(237,037)Total compensation and benefits(313,583)

(65,510)

(404,305)Selling expenses(83,114)

(3,903)

(3,439)

(90,456)General and administrative

expenses(37,336)

(15,261)

(6,404)

(59,001)Provision for credit losses-

451

451Other operating expenses(15,086)

(17,266)

(18,476)

(50,828)Government subsidies15,218

1,562

16,780Total 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 LimitedSupplement Revenue Information for Segment(unaudited)

Three months ended March 31,2020

Wealth

Management

Business

Asset

Management

Business

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Mainland China368,817

145,086

28,655

542,558Hong Kong140,765

16,567

157,332Others45,727

4,625

50,352Total revenues555,242

Three months ended March 31,2019

Wealth

Management

Business

Asset

Management

Business

Lending

and Other

Businesses

Total

RMB'000

Revenues:

Mainland China401,523

145,608

100,766

647,897Hong Kong180,596

20,943

201,539Others43,974

2,002

45,976Total revenues626,412Noah Holdings LimitedReconciliation of GAAP to Non-GAAP Results(In RMB,except for per ADS data and percentages)(unaudited)[5]

Three months ended

March 31,

Change

2019

2020

RMB'000

Net income attributable to Noah shareholders284,025

(14.6%)

Adjustment for share-based compensation29,616

18,291

(38.2%)

Less: gains from fair value changes of equity securities