Noah Holdings Limited Announces Unaudited Financial Results for the Third Quarter of 2018

SHANGHAI, Nov. 20, 2018 /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 2018.

THIRD QUARTER 2018 FINANCIAL HIGHLIGHTS

  • Net revenues for the third quarter of 2018 were RMB839.0 million (US$122.2 million), a 22.6% increase from the corresponding period in 2017.

(RMB millions,

except percentages)

Q3 2017



Q3 2018



YoY Change

Wealth management

488.9



576.9



18.0%

Asset management

164.6



198.5



20.7%

Other financial services

30.9



63.6



105.8%

Total net revenues

684.4



839.0



22.6%

  • Income from operations for the third quarter of 2018 was RMB271.1 million (US$39.5 million), a 69.1% increase from the corresponding period in 2017.

(RMB millions,

except percentages)

Q3 2017



Q3 2018



YoY Change

Wealth management

106.8



169.2



58.4%

Asset management

77.5



101.7



31.2%

Other financial services

(24.0)



0.2



100.8%

Total income from operations

160.3



271.1



69.1%

  • Net income attributable to Noah shareholders for the third quarter of 2018 was RMB207.7 million (US$30.2 million), a 15.6% increase from the corresponding period in 2017.
  • Non-GAAP[1] net income attributable to Noah shareholders for the third quarter of 2018 was RMB293.9 million (US$42.8 million), a 40.5% increase from the corresponding period in 2017.

THIRD QUARTER 2018 OPERATIONAL UPDATES

Wealth Management Business

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

  • Total number of registered clients as of September 30, 2018 was 236,906, a 34.6% increase from September 30, 2017.
  • Total number of active clients[2] during the third quarter of 2018 was 4,108, a 7.8% decrease from September 30, 2017.
  • Aggregate value of financial products distributed during the third quarter of 2018 was RMB28.0 billion (US$4.1 billion), an 18.9% increase from the third quarter of 2017.

Product type

Three months ended September 30,


2017


2018


(RMB in billions, except percentages)

Fixed income

10.8


45.8%


22.8


81.4%

Private equity

9.6


40.7%


3.3


11.8%

Secondary market equity

3.1


13.2%


1.5


5.4%

Other products

0.1


0.3%


0.4


1.4%

All products

23.6


100.0%


28.0


100.0%

  • Average transaction value per active client[3] for the third quarter of 2018 was RMB6.8 million (US$1.0 million), a 29.0% increase from the corresponding period in 2017.
  • Coverage network included 287 branches and sub-branches covering 83 cities as of September 30, 2018, up from 222 branches and sub-branches covering 78 cities as of September 30, 2017.
  • Number of relationship managers was 1,559 as of September 30, 2018, a 21.2% increase from September 30, 2017.

Asset Management Business

The Company's asset management business, Gopher Asset Management Co., Ltd. ("Gopher Asset Management" or "Gopher"), is a leading alternative asset manager in China. Gopher Asset Management develops and manages private equity, real estate, secondary market equity, credit and other investments denominated in Renminbi and other currencies.

  • Total assets under management as of September 30, 2018 were RMB164.1 billion (US$23.9 billion), a 1.6% increase from June 30, 2018 and a 14.9% increase from September 30, 2017.

Investment type

As of 
June 30, 
2018


Asset 
Growth


Asset 
Expiration/ 
Redemption


As of
September 30, 
2018


(RMB billions, except percentages)

Private equity

93.9


58.1%


3.1


0.1


96.9


59.0%

Credit

41.3


25.6%


6.6


7.6


40.3


24.6%

Real estate

17.6


10.9%


2.4


3.4


16.6


10.1%

Secondary market equity[4]

 

4.3


 

2.7%


 

1.2


 

0.6


 

4.9


 

3.0%

Other investments

4.4


2.7%


1.0


-


5.4


3.3%

All Investments

161.5


100.0%


14.3


11.7


164.1


100.0%

Other Financial Services Business

The Company's other financial services business includes its lending services, online wealth management and payment technology services.

Mr. Kenny Lam, Group President of Noah, said, "Despite the volatile macro environment, we have delivered solid operational results for this quarter. A lot of this quarter's results come from efforts from many years prior. We are also very glad to see a much more diversified revenue base. We will continue to invest our resources in building a sustainable growth platform for Noah."

THIRD QUARTER 2018 FINANCIAL RESULTS

Net Revenues

Net revenues for the third quarter of 2018 were RMB839.0 million (US$122.2 million), a 22.6% increase from the corresponding period in 2017, primarily driven by increased recurring service fee revenues and other service fees.

  • Wealth Management Business

- Net revenues from one-time commissions for the third quarter of 2018 were RMB229.0 million (US$33.3 million), an 8.4% increase from the corresponding period in 2017.

- Net revenues from recurring service fees for the third quarter of 2018 were RMB304.7 million (US$44.4 million), a 45.4% increase from the corresponding period in 2017. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.

- Net revenues from performance-based income for the third quarter of 2018 were RMB12.2 million (US$1.8 million), compared with RMB48.0 million in the corresponding period of 2017, primarily due to a decrease in performance-based income from fixed income products.

- Net revenues from other service fees for the third quarter of 2018 were RMB31.0 million (US$4.5 million), an increase from RMB19.9 million in the corresponding period in 2017, primarily due to the growth of the Company's investor education business.

  • Asset Management Business

- Net revenues from recurring service fees for the third quarter of 2018 were RMB172.0 million (US$25.0 million), a 29.4% increase from the corresponding period in 2017. The increase was primarily due to the increase in assets under management as well as higher fee rates earned on assets under management.

- Net revenues from performance-based income for the third quarter of 2018 were RMB21.3 million (US$3.1 million), compared with RMB26.3 million in the corresponding period of 2017, primarily due to a decrease in performance-based income from secondary market equity funds.

  • Other Financial Services Business

- Net revenues for the third quarter of 2018 were RMB63.6 million (US$9.3 million), a 105.8% increase from the corresponding period in 2017. The increase was primarily due to the growth of the Company's lending services business.

Operating Costs and Expenses

Operating costs and expenses for the third quarter of 2018 were RMB567.9 million (US$82.7 million), an 8.4% increase from the corresponding period in 2017. Operating costs and expenses primarily consisted of compensation and benefits of RMB385.1 million (US$56.1 million), selling expenses of RMB81.2 million (US$11.8 million), general and administrative expenses of RMB60.0 million (US$8.7 million) and other operating expenses of RMB51.1 million (US$7.4 million).

  • Operating costs and expenses for the wealth management business for the third quarter of 2018 were RMB407.7 million (US$59.4 million), a 6.7% increase from the corresponding period in 2017, primarily due to an increase in compensation and benefits.
  • Operating costs and expenses for the asset management business for the third quarter of 2018 were RMB96.8 million (US$14.1 million), an 11.2% increase from the corresponding period in 2017, primarily due to an increase in compensation and benefits.
  • Operating costs and expenses for the other financial services business for the third quarter of 2018 were RMB63.4 million (US$9.2 million), a 15.6% increase from the corresponding period in 2017 due to the expansion of the operation of the Company's lending services business.

Operating Margin

Operating margin for the third quarter of 2018 was 32.3%, an increase from 23.4% for the corresponding period in 2017.

  • Operating margin for the wealth management business for the third quarter of 2018 was 29.3%, compared with 21.9% for the corresponding period in 2017.
  • Operating margin for the asset management business for the third quarter of 2018 was 51.2%, compared with 47.1% for the corresponding period in 2017.
  • Income from operations for the other financial services business for the third quarter of 2018 was RMB0.2 million (US$0.03 million), improving from a loss of RMB24.0 million for the corresponding period in 2017.

Investment Income

Investment loss for the third quarter of 2018 was RMB16.8 million (US$2.4 million), compared with investment income of RMB11.3 million for the corresponding period in 2017. The loss was primarily due to changes in fair value of equity securities. See "Discussion of Recently Adopted Accounting Standard and Non-GAAP Financial Measures" below for more details.

Income Tax Expenses

Income tax expenses for the third quarter of 2018 were RMB61.8 million (US$9.0 million), a 47.7% increase from the corresponding period in 2017, primarily due to higher taxable income. 

Net Income

  • Net Income

- Net income for the third quarter of 2018 was RMB205.2 million (US$29.9 million), an 11.9% increase from the corresponding period in 2017.

- Net margin for the third quarter of 2018 was 24.5%, down from 26.8% for the corresponding period in 2017.

- Net income attributable to Noah shareholders for the third quarter of 2018 was RMB207.7 million (US$30.2 million), a 15.6% increase from the corresponding period in 2017.

- Net margin attributable to Noah shareholders for the third quarter of 2018 was 24.8%, down from 26.3% for the corresponding period in 2017.

- Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2018 was RMB3.51 (US$0.51) and RMB3.41 (US$0.50), respectively, up from RMB3.17 and RMB3.03 respectively, for the corresponding period in 2017.

  • Non-GAAP Net Income Attributable to Noah Shareholders

- Non-GAAP net income attributable to Noah shareholders for the third quarter of 2018 was RMB293.9 million (US$42.8 million), a 40.5% increase from the corresponding period in 2017.

- Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2018 was 35.0%, up from 30.6% for the corresponding period in 2017.

- Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2018 was RMB4.81 (US$0.70), up from RMB3.52 for the corresponding period in 2017.

Balance Sheet and Cash Flow

As of September 30, 2018, the Company had RMB2,360.1 million (US$343.6 million) in cash and cash equivalents, compared with RMB1,987.8 million as of September 30, 2017 and RMB2,094.8 million as of June 30, 2018.

Net cash inflow from the Company's operating activities during the third quarter of 2018 was RMB449.8 million (US$65.5 million), compared to net cash inflow of RMB363.6 million in the corresponding period in 2017. The increase was mainly due to an increase in net income and the collection of loans receivable from factoring business.

Net cash outflow from the Company's investing activities during the third quarter of 2018 was RMB203.6 million (US$29.6 million), compared to net cash inflow of RMB247.9 million in the corresponding period in 2017. The cash outflow was primarily due to an increase in investments and in the number of loans originated by the Company's lending services business.

Net cash outflow from the Company's financing activities was RMB16.2 million (US$2.4 million) in the third quarter of 2018, compared to net cash outflow of RMB609.8 million in the corresponding period in 2017. The significant cash outflow for the third quarter of 2017 was mainly related to the mezzanine equity decrease associated with redemption of Sequoia's investment in Gopher.

2018 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2018 will be in the range of RMB1 billion to RMB1.05 billion, an increase of 16.7% to 22.6% compared with the full year 2017. This estimate reflects management's current business outlook and is subject to change.

CONFERENCE CALL

Senior management will host a combined English and Chinese language conference call to discuss the Company's third quarter 2018 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details

Date/Time:

 

Monday, November 19, 2018 at 8:00 p.m., U.S. Eastern Time

Tuesday, November 20, 2018 at 9:00 a.m., Hong Kong Time

Dial in details:


- United States Toll Free

+1-888-317-6003

- Mainland China Toll Free

4001-201-203

- Hong Kong Toll Free

800-905-945

- International

+1-412-317-6061

Conference Title:

Noah Holdings Third Quarter 2018 Earnings Call

Participant Elite Entry No:

8551846

Participants will need to dial in 10-15 minutes early, and use this Elite Entry Number in order to join the conference.

A telephone replay will be available starting one hour after the end of the conference call until November 26, 2018 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10126174.

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

DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES

On January 1, 2018, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income.

The accounting standard also includes a transition requirement on presentation that requires the amounts reported in accumulated other comprehensive income for equity securities that exist as of the date of adoption previously classified as available-for-sale to be reclassified to retained earnings.

As a result, upon adoption of this new standard, Noah recorded a cumulative effect adjustment from other comprehensive income to retained earnings of RMB251.6 million (US$38.7 million), net of tax, for the unrealized gains related to equity securities previously classified as available-for-sale securities. This adjustment had no overall impact on shareholders' equity; however, since these net unrealized gains are now included within retained earnings, they will not appear as realized gains on Noah's consolidated income statement when sold.

The future impact to Noah's consolidated income statement from period to period will vary depending upon the level of volatility in the performance of the securities held in Noah's equity portfolio and the overall market. ASU 2016-01 does not affect the treatment of equity investments accounted for under the equity method or those that result in consolidation of the investee.

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

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

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

ABOUT NOAH HOLDINGS LIMITED

Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises. In the first nine months of 2018, Noah distributed RMB84.9 billion (US$12.4 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB164.1 billion (US$23.9 billion) as of September 30, 2018.

Noah's wealth management business primarily distributes onshore and offshore fixed income, private equity, secondary market equity and insurance products. Noah delivers customized financial solutions to clients through a network of 1,559 relationship managers across 287 branches and sub-branches in 83 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company's wealth management business had 236,906 registered clients as of September 30, 2018. As a leading alternative asset manager in China, Gopher Asset Management manages private equity, real estate, secondary market equity, credit and other investments denominated in Renminbi and other currencies. The Company also provides other financial services, including lending services, online wealth management and payment technology services.

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

FOREIGN CURRENCY TRANSLATION

In this announcement, the unaudited financial results for the third quarter of 2018 ended September 30, 2018 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.868 to US$1.00, the effective noon buying rate for September 28, 2018 as set forth in the H.10 statistical release of the Federal Reserve Board.

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for 2018 and quotations from management in this announcement, as well as Noah's strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including statements about Noah's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah's actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industry; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industry in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.

Contacts:

Noah Holdings Limited
Eva Ma
Tel: +86-21-8035-9221
ir@noahgroup.com

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

[2] "Active clients" for a given period refers to registered clients who purchase financial products provided or distributed by Noah during that given period, excluding clients in Noah's other financial services segment.

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

[4] The asset expiration/redemption of secondary market equity investments also includes market appreciation or depreciation.

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited 

Condensed Consolidated Balance Sheets

(unaudited)


As of


June 30,


September 30, 


September 30, 


2018


2018


2018


RMB'000


RMB'000


USD'000

Assets







Current assets:








Cash and cash equivalents

2,094,773


2,360,111


343,639



Short-term investments (including short-term
investments measured at fair value of RMB163,043
thousands and RMB162,153 thousands, as of June 30,
2018 and September 30, 2018, respectively)

224,043


213,153


 

 

 

31,036



Accounts receivable and contract assets, net of
allowance for doubtful accounts of nil as of June 30,
2018 and September 30, 2018

243,098


255,051


 

 

37,136



Loans receivable, net

601,952


688,890


100,303



Amounts due from related parties

563,286


625,948


91,140



Loans receivable from factoring business

68,358


23,943


3,486



Other current assets 

483,894


455,958


66,389



Total current assets 

4,279,404


4,623,054


673,129









Long-term investments (including long-term investments
measured at fair value of RMB771,594 thousands and
RMB860,828 thousands, as of June 30, 2018 and
September 30, 2018, respectively)

806,094


 

 

 

895,328


 

 

 

130,362


Investment in affiliates

1,176,750


1,314,862


191,448


Property and equipment, net

295,786


295,785


43,067


Non-current deferred tax assets

97,296


97,205


14,153


Other non-current assets 

77,196


23,093


3,363

Total Assets

6,732,526


7,249,327


1,055,522







Liabilities and Equity







Current liabilities:








Accrued payroll and welfare expenses 

479,654


565,346


82,316



Income tax payable

18,484


67,170


9,780



Amounts due to related parties

336


1,691


246



Deferred revenues

146,462


172,171


25,069



Loans payable from factoring business

35,003


-


-



Other current liabilities

383,256


420,508


61,227



Total current liabilities

1,063,195


1,226,886


178,638










Non-current deferred tax liabilities

50,172


51,256


7,463


Convertible notes

330,855


228,121


33,215


Other non-current liabilities

112,485


75,824


11,040


Total Liabilities 

1,556,707


1,582,087


230,356


Equity

5,175,819


5,667,240


825,166

Total Liabilities and Equity

6,732,526


7,249,327


1,055,522

 

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


2017


2018


2018



Revenues:

RMB'000


RMB'000


USD'000



Revenues from others[1]:








One-time commissions

87,455


177,863


25,897


103.4%

Recurring service fees

145,080


140,293


20,427


(3.3%)

Performance-based income

48,759


 

12,215


 

1,779


 

(74.9%)

Other service fees

56,201


98,802


14,386


75.8%

Total revenues from others

337,495


429,173


62,489


27.2%

Revenues from funds
Gopher manages[1]:








One-time commissions

125,598


54,697


7,964


(56.5%)

Recurring service fees

199,306


338,300


49,257


69.7%

Performance-based
income

26,020


 

21,411


 

3,118


 

(17.7%)

Total revenues from funds
Gopher manages

350,924


414,408


60,339


18.1%

Total revenues

688,419


843,581


122,828


22.5%

Less: business taxes and
related surcharges 

(4,106)


(4,597)


(669)


12.0%

Net revenues

684,313


838,984


122,159


22.6%

Operating costs and
expenses:








Compensation and
benefits








Relationship manager
compensation

(158,310)


 

(143,831)


 

(20,942)


(9.1%)

Performance fee
compensation

-


 

(5,975)


 

(870)


N.A.

Other compensations

(197,871)


(235,294)


(34,259)


18.9%

Total compensation and
benefits

(356,181)


 

(385,100)


 

(56,071)


8.1%

Selling expenses

(76,967)


(81,224)


(11,826)


5.5%

General and administrative
expenses 

(60,738)


 

(60,010)


 

(8,738)


(1.2%)

Other operating expenses 

(35,330)


(51,106)


(7,441)


44.7%

Government grants 

5,234


9,518


1,386


81.8%

Total operating costs and
expenses 

(523,982)


 

(567,922)


 

(82,690)


8.4%

Income from operations 

160,331


271,062


39,469


69.1%

Other income:








Interest income 

12,962


14,237


2,073


9.8%

Interest expenses

(4,728)


1,156


168


(124.5%)

Investment income (loss)

11,271


(16,817)


(2,449)


(249.2%)

Other expense

(290)


(1,836)


(267)


533.1%

Total other income
(expense)

19,215


 

(3,260)


 

(475)


 

(117.0%)

Income before taxes and
income from equity in
affiliates

179,546


267,802


38,994


49.2%

Income tax expense

(41,845)


(61,804)


(8,999)


47.7%

Income (loss) from equity in
affiliates

45,712


 

(796)


 

(116)


 

(101.7%)

Net income

183,413


205,202


29,879


11.9%

Less: net loss attributable
to non-controlling interests

(2,136)


 

 

(2,506)


 

 

(365)


 

 

17.3%

Less: net loss attributable
to redeemable non-
controlling interest of
Subsidiary

(333)


-


-


(100.0%)

Less: effect on retained
earnings caused by
termination of redeemable
non-controlling interest of a
subsidiary

6,201


-


-


(100.0%)

Net income attributable to
Noah shareholders 

179,681


207,708


30,244


15.6%

Income per ADS, basic

3.17


3.51


0.51


10.7%

Income per ADS, diluted

3.03


3.41


0.50


12.5%

 

Margin analysis:








Operating margin

23.4%


32.3%


32.3%



Net margin

26.8%


24.5%


24.5%



 

Weighted average ADS
equivalent[2]:








Basic

56,594,562


59,172,524


59,172,524



Diluted

60,749,462


61,615,856


61,615,856



ADS equivalent outstanding
at end of period

56,704,721


 

59,430,433


 

59,430,433












 

[1] Starting from the first quarter of 2018, we report revenue streams in two categories - revenues from funds
Gopher manages and revenues from others, instead of the previous categories - third-party revenues and related
party revenues, to provide more relevant and accurate information. We also revised the comparative period
presentation to conform to current period classification.

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

 

Noah Holdings Limited 

Condensed Comprehensive Income Statements 

(unaudited)


Three months ended 




September 30,


September 30,


September 30,


Change


2017


2018


2018




RMB'000


RMB'000


USD'000



Net income

183,413


205,202


29,879


11.9%

Other comprehensive income, net of tax:








Foreign currency translation adjustments

(10,362)


50,719


7,385


(589.4%)

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

4,930


(289)


(42)


(105.9%)

Comprehensive income

177,981


255,632


37,222


43.6%

Less: Comprehensive income (loss)
attributable to non-controlling interests

(2,089)


(2,634)


(384)


26.1%

Less: Loss attributable to redeemable
non-controlling interest of a subsidiary

(333)


-


-


(100.0%)

Comprehensive income attributable to
Noah
shareholders

180,403


258,266


37,606


43.2%

 

Noah Holdings Limited

Supplemental Information 

(unaudited) 


As of 




September 30, 
2017


September 30, 
2018


Change







Number of registered clients 

175,979


236,906


34.6%

Number of relationship managers 

1,286


1,559


21.2%

Number of cities under coverage 

78


83


6.4%














Three months ended 




September 30,
2017


September 30, 
2018


Change


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

Number of active clients 

4,456


4,108


(7.8%)

Transaction value: 






Fixed income products 

10,785


22,775


111.2%

Private equity products 

9,578


3,300


(65.5%)

Secondary market equity products

3,105


1,490


(52.0%)

Other products

79


430


443.1%

Total transaction value

23,546


27,995


18.9%

Average transaction value per active client 

5.28


6.81


29.0%

 

Noah Holdings Limited 

Segment Condensed Income Statements 

(unaudited) 


Three months ended September 30, 2018


Wealth 
Management
Business


Asset 
Management
Business


Other
Financial 
Services 
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from others








One-time commissions

177,305


558


-


177,863

Recurring service fees

131,988


8,305


-


140,293

Performance-based income

12,215


-


-


12,215

Other service fees

31,133


2,671


64,998


98,802

Total revenues from others

352,641


11,534


64,998


429,173

Revenues from funds Gopher
manages








One-time commissions

52,758


1,939


-


54,697

Recurring service fees

174,083


164,217


-


338,300

Performance-based income

-


21,411


-


21,411

Total revenues from funds Gopher
manages

226,841


187,567


-


414,408

Total revenues

579,482


199,101


64,998


843,581

Less: business taxes and related
surcharges 

(2,587)


(630)


(1,380)


(4,597)

Net revenues

576,895


198,471


63,618


838,984

Operating costs and expenses:








Compensation and benefits








Relationship manager compensation

(143,550)


(10)


(271)


(143,831)

Performance fee compensation

-


(5,975)


-


(5,975)

Other compensations

(142,420)


(62,725)


(30,149)


(235,294)

Total compensation and benefits

(285,970)


(68,710)


(30,420)


(385,100)

Selling expenses

(74,160)


(3,747)


(3,317)


(81,224)

General and administrative
expenses 

(34,092)


(20,046)


(5,872)


(60,010)

Other operating expenses

(23,010)


(4,258)


(23,838)


(51,106)

Government grants 

9,518


-


-


9,518

Total operating costs and expenses 

(407,714)


(96,761)


(63,447)


(567,922)

Income from operations

169,181


101,710


171


271,062

 

Noah Holdings Limited

Segment Condensed Income Statements

 (unaudited)

 Three months ended September 30, 2017


Wealth
Management

 Business


Asset
Management

Business


Other
Financial
Services
Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from others








One-time commissions

87,139


316


-


87,455

Recurring service fees

138,571


6,509


-


145,080

Performance-based income

48,349


410


-


48,759

Other service fees

19,991


4,974


31,236


56,201

Total revenues from others

294,050


12,209


31,236


337,495

Revenues from funds Gopher manages








One-time commissions

125,517


81


-


125,598

Recurring service fees

72,355


126,951


-


199,306

Performance-based income

-


26,020


-


26,020

Total revenues from funds Gopher manages

197,872


153,052


-


350,924

Total revenues

491,922


165,261


31,236


688,419

Less: business taxes and related
surcharges

(3,059)


(709)


(338)


(4,106)

Net revenues

488,863


164,552


30,898


684,313

Operating costs and expenses:








Compensation and benefits








Relationship manager
compensation

(157,561)


-


(749)


(158,310)

Other compensations

(116,828)


(52,178)


(28,865)


(197,871)

Total compensation and benefits

(274,389)


(52,178)


(29,614)


(356,181)

Selling expenses

(69,769)


(3,801)


(3,397)


(76,967)

General and administrative
expenses

(26,216)


(21,803)


(12,719)


(60,738)

Other operating expenses

(14,749)


(11,403)


(9,178)


(35,330)

Government grants

3,097


2,137


-


5,234

Total operating costs and expenses

(382,026)


(87,048)


(54,908)


(523,982)

Income (loss) from operations

106,837


77,504


(24,010)


160,331

 

Noah Holdings 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 


2017


2018




RMB'000


RMB'000









Net income attributable to Noah shareholders

179,681


207,708


15.6%

Adjustment for share-based compensation related to:






Share options

15,105


11,177


(26.0%)

Restricted shares

14,396


24,470


70.0%

Less: loss from fair value changes of equity securities
(unrealized)

-


 

(20,686)


N.A

Add: Gains from sales of equity securities

-


29,891


N.A

Non-GAAP net income attributable to Noah
shareholders*

209,182


293,932


40.5%







 

Net margin attributable to Noah shareholders

26.3%


24.8%



Non-GAAP net margin attributable to Noah shareholders*

30.6%


35.0%









Net income attributable to Noah shareholders per ADS,
diluted

3.03


3.41


12.5%

Non-GAAP net income attributable to Noah shareholders
per ADS, diluted*

3.52


4.81


36.6%







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


 

[5] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity securities (unrealized) and adjusting for sale of equity securities.

 

Cision View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-financial-results-for-the-third-quarter-of-2018-300752798.html

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