Noah Holdings Limited Announces Unaudited Financial Results for the Third Quarter of 2020
SHANGHAI, Nov. 30, 2020 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the third quarter of 2020.
THIRD QUARTER 2020 FINANCIAL HIGHLIGHTS
[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.
()
-- Net revenues for the third quarter of 2020 were RMB859.1 million
(US$126.5 million), a 2.0% increase from the corresponding period in
2019, and a 14.9% increase from the second quarter of 2020.
(RMB millions,
Q3 2019
Q3 2020
YoY Change
except percentages)
Wealth management 542.4 627.7 15.7%
Asset management 240.4 222.4 (7.5%)
Lending and other businesses 59.2 9.0 (84.8%)
Total net revenues 842.0 859.1 2.0%
-- Income from operations for the third quarter of 2020 was RMB347.2
million (US$51.1 million), a 48.2% increase from the corresponding
period in 2019, and an 8.7% increase from the second quarter of 2020.
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-- Net income attributable to Noah shareholders for the third quarter of
2020 was RMB285.6 million (US$42.1 million), a 49.1% increase from the
corresponding period in 2019, while a 4.7% decrease from the second
quarter of 2020.
-- Non-GAAP([1]) net income attributable to Noah shareholders for the third
quarter of 2020 was RMB301.1 million (US$44.3 million), a 14.9% decrease
from the corresponding period in 2019, and a 2.0% decrease from the
second quarter of 2020.
THIRD 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 public securities, private equity, credit and insurance products denominated in RMB and other currencies.
-- Total number of registered clients as of September 30, 2020 was 350,409,
a 21.6% increase from September 30, 2019 and a 5.5% increase from June
30, 2020.
-- Total number of active clients([2]) which excluded mutual fund clients
during the third quarter of 2020 was 4,466, a 31.0% increase from the
corresponding period in 2019 and a 32.6% increase from the second
quarter of 2020. Counting in mutual funds clients, the total number of
clients who transacted with us during the third quarter of 2020 was
20,509, a 105.9% increase from the third quarter of 2019, and a 39.5%
increase from the second quarter of 2020.
-- Aggregate value of financial products distributed during the third
quarter of 2020 was RMB28.8 billion (US$4.2 billion), a 122.2% increase
from the corresponding period in 2019, due to the significant increase
in the distribution of public securities products and private equity
products.
[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.
Product type Three months ended September 30,
2019 2020
(RMB in billions, except percentages)
Public securities products 7.5 57.5% 20.9 72.4%
Private equity products 3.5 26.8% 7.2 25.1%
Credit products 1.5 11.7% 0.1 0.4%
Other products 0.5 4.0% 0.6 2.1%
All products 13.0 100.0% 28.8 100.0%
-- Coverage network in mainland China included 266 service centers covering
79 cities as of September 30, 2020, compared with 264 service centers
covering 78 cities as of June 30, 2020, which is stable quarter over
quarter, and compared with 307 services centers covering 81 cities as of
September 30, 2019, primarily as a result of consolidation of duplicate
service centers in order to optimize costs and expenses since fourth
quarter of 2019.
-- Number of relationship managers was 1,204 as of September 30, 2020, a
0.7% increase from June 30, 2020. The turnover rate of core "elite"
relationship managers was 2.3%, compared with 1.4% as of June 30, 2020.
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 also with international offices in Hong Kong, United States and Canada. Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities, credit to multi-strategy investments denominated in Renminbi and other currencies.
-- Total assets under management as of September 30, 2020 were RMB155.7
billion (US$22.9 billion), a 2.3% decrease from June 30, 2020 due to the
repayments of certain credit products and a 11.8% decrease from
September 30, 2019.
Investment type As of Growth Distribution/ As of
June 30, September 30,
2020 Redemption 2020
(RMB billions, except percentages)
Private equity 107.7 67.6% 7.6 5.9 109.4 70.3%
Real estate 17.3 10.8% 0.1 0.6 16.8 10.7%
Credit 14.1 8.9% 0.1 2.5 11.7 7.5%
Public securities[3] 11.8 7.4% 0.9 1.9 10.8 7.0%
Multi-strategies 8.5 5.3% 0.3 1.8 7.0 4.5%
All Investments 159.4 100.0% 9.0 12.7 155.7 100.0%
[3] The distribution/redemption of public
securities also includes market appreciation or
depreciation.
Lending and Other Businesses
The 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 third quarter of 2020 was RMB0.1 billion, compared with RMB1.3 billion in the corresponding period of 2019 as our voluntary reduction of loan origination. Other businesses include an online financial advisory platform.
Ms. Jingbo Wang, co-founder and CEO of Noah, said, "We are very pleased to report a really strong quarter: our transaction value increased 122.2% from the third quarter in 2019 to RMB28.8 billion, driven by significantly higher portion of public securities and private equity distribution. Public securities transaction value grew to a record high of RMB20.9 billion. This indicates our continued success in our transformation to standardized products while maintaining the leading market position in private equities. We also continued to exit from single-counterparty private credit products. The total number of active clients grew 105.9% from the third quarter of 2019 to reach 20,509, benefiting from the onshore and offshore paralleled mutual fund platforms, Fund Smile and iNoah, which represents a recovery of client confidence. Noah Holdings celebrated its 10(th) Listing Anniversary on the NYSE a few weeks ago. We are grateful for the support the capital markets provided to us and have confidence in our continued growth in the coming decade."
THIRD QUARTER 2020 FINANCIAL RESULTS
Net Revenues
Net revenues for the third quarter of 2020 were RMB859.1 million (US$126.5 million), a 2.0% increase from the corresponding period in 2019, primarily driven by increased one-time commissions, recurring service fee revenues and performance-based income, and partially offset by decreased other service fees.
-- Wealth Management Business
- Net revenues from one-time commissions for the third quarter of 2020 were RMB189.6 million (US$27.9 million), a 26.8% increase from the corresponding period in 2019 due to an increase in financial products distributed in third quarter of 2020.
- Net revenues from recurring service fees for the third quarter of 2020 were RMB380.5 million (US$56.0 million), a 19.3% increase from the corresponding period in 2019. The increase was primarily due to the service fees recognized upon liquidation of certain credit products with higher fee rates.
- Net revenues from performance-based income for the third quarter of 2020 were RMB33.7 million (US$5.0 million), a 679.3% increase from the corresponding period of 2019, primarily due to an increase in performance-based income from public securities products.
- Net revenues from other service fees for the third quarter of 2020 were RMB23.8 million (US$3.5 million), a 65.7% decrease from 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 third quarter of 2020 were RMB179.5 million (US$26.4 million), a 10.4% decrease from the corresponding period in 2019. The decrease was primarily due to a decrease in assets under management.
- Net revenues from performance-based income for the third quarter of 2020 were RMB36.8 million (US$5.4 million), a 3.6% decrease from the corresponding period in 2019.
-- Lending and Other Businesses
- Net revenues for the third quarter of 2020 were RMB9.0 million (US$1.3 million), an 84.8% decrease from the corresponding period in 2019. The decrease was primarily due to reduced loan origination since the second half of 2019 as well as the ongoing impact of COVID-19.
Operating Costs and Expenses
Operating costs and expenses for the third quarter of 2020 were RMB511.8 million (US$75.4 million), a 15.8% decrease from the corresponding period in 2019. Operating costs and expenses primarily consisted of compensation and benefits of RMB362.5 million (US$53.4 million), selling expenses of RMB69.9 million (US$10.3 million), general and administrative expenses of RMB61.7 million (US$9.1 million) and other operating expenses of RMB23.1 million (US$3.4 million).
-- Operating costs and expenses for the wealth management business for the
third quarter of 2020 were RMB379.3 million (US$55.9 million), a 17.3%
decrease from the corresponding period in 2019, primarily due to a
decrease in compensation and benefits as well as selling and general and
administrative expenses.
-- Operating costs and expenses for the asset management business for the
third quarter of 2020 were RMB108.7 million (US$16.0 million), a 14.7%
increase from the corresponding period in 2019, primarily due to an
increase in compensation and benefits.
-- Operating costs and expenses for the lending and other businesses for
the third quarter of 2020 were RMB23.8 million (US$3.5 million), a 56.0%
decrease from the corresponding period in 2019, primarily due to a
decrease in compensation and benefits as well as other operating
expenses.
Operating Margin
Operating margin for the third quarter of 2020 was 40.4%, compared with 27.8% for the corresponding period in 2019.
-- Operating margin for the wealth management business for the third
quarter of 2020 was 39.6%, compared with 15.4% for the corresponding
period in 2019, due to continuously operating efficiency improvement and
less legal expenses incurred related to Camsing case.
-- Operating margin for the asset management business for the third quarter
of 2020 was 51.1%, compared with 60.6% for the corresponding period in
2019.
-- Loss from operations for the lending and other businesses for the third
quarter of 2020 was RMB14.8 million (US$2.2 million), compared with
income from operations in the amount of RMB5.1 million in the
corresponding period of 2019 due to reduced loan origination.
Investment Income
Investment income for the third quarter of 2020 was RMB0.8 million (US$0.1 million), compared with investment loss of RMB48.4 million for the corresponding period in 2019. There is little fair value change of investment for the third quarter of 2020, while the loss in the third quarter of 2019 was primarily due to changes in fair value of equity securities and other investments.
Income Tax Expenses
Income tax expenses for the third quarter of 2020 were RMB84.9 million (US$12.5 million), an 89.9% increase from the corresponding period in 2019, primarily due to higher taxable income.
Income from Equity in Affiliates
Income from equity in affiliates for the third quarter of 2020 was RMB4.7 million (US$0.7 million), a 91.4% decrease from the corresponding period in 2019, primarily due to decrease of net income of the funds of funds we manage and invest in as the general partner or manager.
Net Income
-- Net Income
- Net income for the third quarter of 2020 was RMB283.8 million (US$41.8 million), a 39.3% increase compared to the corresponding period in 2019.
- Net margin for the third quarter of 2020 was 33.0%, up from 24.2% for the corresponding period in 2019.
- Net income attributable to Noah shareholders for the third quarter of 2020 was RMB285.6 million (US$42.1 million), a 49.1% increase from the corresponding period in 2019.
- Net margin attributable to Noah shareholders for the third quarter of 2020 was 33.2%, up from 22.8% for the corresponding period in 2019.
- Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2020 was RMB4.63 (US$0.68) and RMB4.60 (US$0.68), respectively, compared with RMB3.13 and RMB3.10 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 third quarter of 2020 was RMB301.1 million (US$44.3 million), a 14.9% decrease from the corresponding period in 2019, due to one non-recurring gain from sale of equity securities in the amount of RMB137.3 million in the third quarter of 2019.
- Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2020 was 35.0%, down from 42.0% for the corresponding period in 2019.
- Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2020 was RMB4.85 (US$0.71), down from RMB5.73 for the corresponding period in 2019.
Balance Sheet and Cash Flow
As of September 30, 2020, the Company had RMB4,597.4 million (US$677.1 million) in cash and cash equivalents, compared with RMB3,669.2 million as of September 30, 2019 and RMB4,170.7 million as of June 30, 2020.
Net cash inflow from the Company's operating activities during the third quarter of 2020 was RMB360.8 million (US$53.1 million), compared to net cash inflow of RMB220.4 million in the corresponding period in 2019. The increase was mainly due to increase in net income as well as changes in working capital.
Net cash inflow from the Company's investing activities during the third quarter of 2020 was RMB165.7 million (US$24.4 million), compared to net cash inflow of RMB440.0 million in the corresponding period in 2019. The cash inflow was primarily due to proceeds from the disposal of various investments.
Net cash outflow from the Company's financing activities was RMB22.9 million (US$3.4 million) in the third quarter of 2020, compared to net cash inflow of RMB40.6 million in the corresponding period in 2019, primarily due to the distribution to our non-controlling shareholders of a consolidated subsidiary.
OTHER COMPANY DEVELOPMENTS
The Company also announced that Mr. Yi Zhao, the president of the Company, has resigned from the Company due to personal reasons, which took effect on November 30, 2020. The Company currently has no plan to appoint a new president as his replacement and the duties of Mr. Zhao will be redirected amongst current members of the management team.
Ms. Jingbo Wang, co-founder and CEO of Noah, said, "On behalf of the Board and the company, I would like to thank Mr. Zhao for the invaluable support he has provided to Noah during the past several years, and wish him continued success in the future."
2020 FORECAST
The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2020 will be in the range of RMB900 million to RMB1.0 billion. This forecast reflects management's current business outlook and is subject to further change.
CONFERENCE CALL
Senior management will host a combined English and Chinese language conference call to discuss the Company's third quarter 2020 unaudited financial results and recent business activities.
The conference call may be accessed with the following details:
Conference call details
Date/Time: Monday, November 30, 2020 at
7:00 p.m., U.S. Eastern Time
Tuesday, December 1, 2020 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 3Q20 Earnings
Conference Call
Participant Password: 6699621
A telephone replay will be available starting one hour after the end of the conference call until December 07, 2020 at +1-877-344-7529 (US Toll Free) or 1-412-317-0088 (International Toll). The replay access code is 10149103.
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 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 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 nine months of 2020, Noah distributed RMB73.4 billion (US$10.8 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB155.7 billion (US$22.9 billion) as of September 30, 2020.
Noah's wealth management business primarily distributes private equity, public securities, credit and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,204 relationship managers across 266 service centers in 79 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company's wealth management business had 350,409 registered clients as of September 30, 2020. As a leading alternative multi-asset manager in China, Gopher Asset Management manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies. The Company also provides lending services and other businesses.
For more information, please visit Noah at ir.noahgroup.com.
FOREIGN CURRENCY TRANSLATION
In this announcement, the unaudited financial results for the third quarter of 2020 ended September 30, 2020 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ 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 RMB6.7896 to US$1.00, the effective noon buying rate for September 30, 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 Limited
Condensed Consolidated Balance Sheets
(unaudited)
As of
June 30,
September 30,
September 30,
2020 2020 2020
RMB'000
RMB'000
USD'000
Assets
Current assets:
Cash and cash equivalents 4,170,704 4,597,443 677,130
Restricted cash 4,098 727 107
Short-term investments 61,151 55,382 8,157
Accounts receivable, net 334,411 360,189 53,050
Loans receivable, net 619,811 476,730 70,215
Amounts due from related parties 766,189 696,806 102,628
Other current assets 199,908 194,464 28,641
Total current assets 6,156,272 6,381,741 939,928
Long-term investments, net 836,442 824,562 121,445
Investment in affiliates 1,291,255 1,252,054 184,408
Property and equipment, net 262,648 250,106 36,837
Operating lease right-of-use
assets, net 343,925 291,694 42,962
Deferred tax assets 164,749 178,358 26,269
Other non-current assets 148,590 165,559 24,382
Total Assets 9,203,881 9,344,074 1,376,231
Liabilities and Equity
Current liabilities:
Accrued payroll and welfare expenses 461,530 510,043 75,121
Income tax payable 77,381 136,582 20,116
Deferred revenues 163,608 125,092 18,424
Other current liabilities 351,690 318,964 46,978
Total current liabilities 1,054,209 1,090,681 160,639
Operating lease liabilities, non-
current 346,241 289,076 42,576
Deferred tax liabilities 56,480 53,891 7,937
Other non-current liabilities 3,526 867 128
Total Liabilities 1,460,456 1,434,515 211,280
Equity 7,743,425 7,909,559 1,164,951
Total Liabilities and Equity 9,203,881 9,344,074 1,376,231
Noah Holdings Limited
Condensed Consolidated Income Statements
(In RMB'000, except for USD data, per ADS data and percentages)
(unaudited)
Three months ended
September 30,
September 30, September 30,
Change
2019 2020 2020
Revenues:
RMB'000
RMB'000 USD'000
Revenues from others:
One-time commissions 129,786 125,000 18,411 (3.7%)
Recurring service fees 135,201 200,075 29,468 48.0%
Performance-based income 4,383 27,217 4,009 521.0%
Other service fees 131,950 33,985 5,005 (74.2%)
Total revenues from others 401,320 386,277 56,893 (3.7%)
Revenues from funds Gopher
manages:
One-time commissions 21,137 71,112 10,474 236.4%
Recurring service fees 386,381 363,274 53,504 (6.0%)
Performance-based income 38,299 43,673 6,432 14.0%
Total revenues from funds 445,817 478,059 70,410 7.2%
Gopher manages
Total revenues 847,137 864,336 127,303 2.0%
Less: VAT related surcharges (5,150) (5,282) (778) 2.6%
Net revenues 841,987 859,054 126,525 2.0%
Operating costs and expenses:
Compensation and benefits
Relationship managers (148,572) (144,977) (21,353) (2.4%)
Others (246,277) (217,549) (32,042) (11.7%)
Total compensation and (8.2%)
benefits
(394,849) (362,526) (53,395)
Selling expenses (83,592) (69,882) (10,293) (16.4%)
General and administrative (30.3%)
expenses
(88,455) (61,656) (9,081)
Provision for credit losses (15,995) (5,166) (761) (67.7%)
Other operating expenses (52,838) (23,129) (3,407) (56.2%)
Government grants 28,049 10,552 1,554 (62.4%)
Total operating costs and (15.8%)
expenses
(607,680) (511,807) (75,383)
Income from operations 234,307 347,247 51,142 48.2%
Other income (expense):
Interest income 13,774 12,080 1,779 (12.3%)
Investment (loss) income (48,405) 751 111
N.A.
Other (expense) income (5,114) 4,041 595
N.A.
Total other (expense) income (39,745) 16,872 2,485
N.A.
Income before taxes and 194,562 364,119 53,627 87.1%
income from equity in
affiliates
Income tax expense (44,737) (84,944) (12,511) 89.9%
Income from equity in affiliates 53,974 4,652 685 (91.4%)
Net income 203,799 283,827 41,801 39.3%
Less: net income (loss)
attributable to non-controlling
interests
12,201 (1,789) (263)
N.A.
Net income attributable to 191,598 285,616 42,064 49.1%
Noah shareholders
Income per ADS, basic 3.13 4.63 0.68 47.9%
Income per ADS, diluted 3.10 4.60 0.68 48.4%
Margin analysis:
Operating margin 27.8% 40.4% 40.4%
Net margin 24.2% 33.0% 33.0%
Weighted average ADS
equivalent[1]:
Basic 61,308,638 61,723,592 61,723,592
Diluted 61,759,161 62,075,224 62,075,224
ADS equivalent outstanding at
end of period
61,480,292 61,752,197 61,752,197
[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
September 30,
September 30, September 30,
Change
2019 2020 2020
RMB'000
RMB'000 USD'000
Net income 203,799 283,827 41,801 39.3%
Other comprehensive income, net of tax:
Foreign currency translation adjustments 119,641 (108,684) (16,007)
N.A.
Fair value fluctuation of available for sale (3,191)
N.A.
Investment (after tax)
Comprehensive income 320,249 175,143 25,794 (45.3%)
Less: Comprehensive income (loss) 12,052 (1,694) (249)
N.A.
attributable to non-controlling interests
Comprehensive income attributable to 308,197 176,837 26,043 (42.6%)
Noah
s
hareholders
Noah Holdings Limited
Supplemental Information
(unaudited)
As of
September 30,
September 30,
Change
2019 2020
---
Number of registered clients 288,245 350,409 21.6%
Number of relationship managers 1,368 1,204 (12.0%)
Number of cities in mainland China under 81 79 (2.5%)
coverage
Three months ended
September 30,
September 30,
Change
2019 2020
---
(in millions of RMB, except number of active
clients and
percentages)
Number of active clients[4] 3,409 4,466 31.0%
Number of active clients including mutual fund 9,961 20,509 105.9%
clients
Transaction value:
Public securities products 7,444 20,844 180.0%
Private equity products 3,477 7,222 107.7%
Credit products 1,517 112 (92.6%)
Other products 513 602 17.3%
Total transaction value 12,951 28,780 122.2%
[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 Limited
Segment Condensed Income Statements
(unaudited)
Three months ended September 30, 2020
Wealth
Asset
Lending and
Total
Management Management Other
Businesses
Business
Business
---
RMB'000
RMB'000
RMB'000
RMB'000
Revenues:
Revenues from others
One-time commissions 124,645 355 125,000
Recurring service fees 199,423 652 200,075
Performance-based income 27,210 7 27,217
Other service fees 23,992 886 9,107 33,985
Total revenues from others 375,270 1,900 9,107 386,277
Revenues from funds Gopher manages
One-time commissions 66,201 4,911 71,112
Recurring service fees 183,594 179,680 363,274
Performance-based income 6,751 36,922 43,673
Total revenues from funds Gopher 256,546 221,513 478,059
manages
Total revenues 631,816 223,413 9,107 864,336
Less: VAT related surcharges (4,123) (1,003) (156) (5,282)
Net revenues 627,693 222,410 8,951 859,054
Operating costs and expenses:
Compensation and benefits
Relationship managers (144,534) (443) (144,977)
Others (118,854) (83,269) (15,426) (217,549)
Total compensation and benefits (263,388) (83,269) (15,869) (362,526)
Selling expenses (58,836) (8,759) (2,287) (69,882)
General and administrative
expenses
(39,357) (17,425) (4,874) (61,656)
Provision for credit losses (6,898) 1,732 (5,166)
Other operating expenses (17,298) (1,848) (3,983) (23,129)
Government grants 6,471 2,597 1,484 10,552
Total operating costs and expenses (379,306) (108,704) (23,797) (511,807)
Income (loss) from operations 248,387 113,706 (14,846) 347,247
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
Three months ended September 30, 2019
Wealth
Asset
Lending and Total
Management Management Other
Business Business Businesses
---
RMB'000
RMB'000
RMB'000 RMB'000
Revenues:
Revenues from others
One-time commissions 129,099 687 129,786
Recurring service fees 133,825 1,376 135,201
Performance-based income 4,346 37 4,383
Other service fees 69,841 1,197 60,912 131,950
Total revenues from others 337,111 3,297 60,912 401,320
Revenues from funds Gopher
manages
One-time commissions 21,053 84 21,137
Recurring service fees 186,251 200,130 386,381
Performance-based income - 38,299 38,299
Total revenues from funds Gopher 207,304 238,513 445,817
manages
Total revenues 544,415 241,810 60,912 847,137
Less: VAT related surcharges (2,067) (1,368) (1,715) (5,150)
Net revenues 542,348 240,442 59,197 841,987
Operating costs and expenses:
Compensation and benefits
Relationship managers (148,572) (148,572)
Others (155,102) (66,914) (24,261) (246,277)
Total compensation and benefits (303,674) (66,914) (24,261) (394,849)
Selling expenses (69,563) (9,315) (4,714) (83,592)
General and administrative (17,916) (9,176) (88,455)
expenses
(61,363)
Provision for credit losses (16,007) 12 (15,995)
Other operating expenses (33,905) (2,947) (15,986) (52,838)
Government grants 25,740 2,302 7 28,049
Total operating costs and expenses (458,772) (94,790) (54,118) (607,680)
Income from operations 83,576 145,652 5,079 234,307
Noah Holdings Limited
Supplement Revenue Information by Geography
(unaudited)
Three months ended September 30, 2020
Wealth
Asset
Lending and
Total
Management Management Other
Businesses
Business
Business
---
RMB'000
RMB'000
RMB'000
RMB'000
Revenues:
Mainland China 512,820 184,449 9,107 706,376
Hong Kong 76,584 27,276 103,860
Others 42,412 11,688 54,100
Total revenues 631,816 223,413 9,107 864,336
Three months ended September 30, 2019
Wealth
Asset
Lending and
Total
Management Management Other
Businesses
Business
Business
RMB'000
RMB'000
RMB'000
RMB'000
Revenues:
Mainland China 347,744 212,137 60,912 620,793
Hong Kong 139,406 26,829 166,235
Others 57,265 2,844 60,109
Total revenues 544,415 241,810 60,912 847,137
Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In RMB, except for per ADS data and percentages)
(unaudited)[5]
Three months ended
September 30,
September 30, Change
2019 2020
RMB'000
RMB'000
Net income attributable to Noah shareholders 191,598 285,616 49.1%
Adjustment for share-based compensation 21,310 14,351 (32.7%)
Less: loss from fair value changes of equity securities (84.0%)
(unrealized)
(6,047) (968)
Add: gains from sales of equity securities 139,816 3,523 (97.5%)
Less: tax effect of adjustments 5,059 3,384 (33.1%)
Adjusted net income attributable to Noah shareholders 353,712 301,074 (14.9%)
(non-GAAP)
Net margin attributable to Noah shareholders 22.8% 33.2%
Non-GAAP net margin attributable to Noah shareholders 42.0% 35.0%
Net income attributable to Noah shareholders per ADS, 3.10 4.60 48.4%
diluted
Non-GAAP net income attributable to Noah shareholders 5.73 4.85 (15.4%)
per ADS, diluted
[5] 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 tax impact, if any.
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SOURCE Noah Holdings Limited
