UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2019
Commission File Number: 001-34936
Noah Holdings Limited
No. 1687 Changyang Road, Changyang Valley, Building 2
Shanghai 200090, People’s Republic of China
(86) 21 8035 9221
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Noah Holdings Limited
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| By: | /s/ Shang-yan Chuang | |
| Shang-yan Chuang | ||
| Chief Financial Officer | ||
Date: May 17, 2019
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EXHIBIT INDEX
Exhibit 99.1—Press Release
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Exhibit 99.1
NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED
FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2019
SHANGHAI, May 17, 2019 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on high net worth individuals, today announced its unaudited financial results for the first quarter of 2019.
FIRST QUARTER 2019 FINANCIAL HIGHLIGHTS
| • | Net revenues for the first quarter of 2019 were RMB889.9 million (US$132.6 million), a 7.1% increase from the corresponding period in 2018. |
(RMB millions, except percentages) | Q1 2018 | Q1 2019 | YoY Change | |||||||||
Wealth management | 594.2 | 623.4 | 4.9 | % | ||||||||
Asset management | 194.3 | 167.9 | (13.6 | %) | ||||||||
Lending and other businesses | 42.4 | 98.6 | 132.6 | % | ||||||||
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Total net revenues | 830.9 | 889.9 | 7.1 | % | ||||||||
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| • | Income from operations for the first quarter of 2019 was RMB302.5 million (US$45.1 million), a 10.2% increase from the corresponding period in 2018. |
(RMB millions, except percentages) | Q1 2018 | Q1 2019 | YoY Change | |||||||||
Wealth management | 184.0 | 189.5 | 3.0 | % | ||||||||
Asset management | 109.4 | 67.8 | (38.1 | %) | ||||||||
Lending and other businesses | (18.9 | ) | 45.2 | N.A. | ||||||||
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Total income from operations | 274.5 | 302.5 | 10.2 | % | ||||||||
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| • | Net income attributable to Noah shareholders for the first quarter of 2019 was RMB284.6 million (US$42.4 million), a 6.0% increase from the corresponding period in 2018. |
| • | Non-GAAP1net income attributable to Noah shareholders for the first quarter of 2019 was RMB304.6 million (US$45.4 million), a 19.9% increase from the corresponding period in 2018. |
FIRST QUARTER 2019 OPERATIONAL UPDATES
Wealth Management Business
The Company’s wealth management business offers financial products and provides value-added services to high net worth clients in China and overseas. Noah primarily distributes credit, private equity, public securities and insurance products denominated in RMB and other currencies.
| 1 | Noah’sNon-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 toNon-GAAP Results” at the end of this press release. |
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| • | Total number of registered clients as of March 31, 2019 was 274,893, a 39.6% increase from March 31, 2018. |
| • | Total number of active clients2during the first quarter of 2019 was 8,117, a 49.0% increase from the first quarter of 2018. |
| • | Aggregate value offinancial products distributedduring the first quarter of 2019 was RMB28.0 billion (US$4.2 billion), a 0.8% increase from the first quarter of 2018. |
| Product type | Three months ended March 31, | |||||||||||||||
| 2018 | 2019 | |||||||||||||||
| (RMB in billions, except percentages) | ||||||||||||||||
Credit3 products | 13.2 | 47.6 | % | 22.1 | 78.8 | % | ||||||||||
Private equity products | 6.3 | 22.6 | % | 1.3 | 4.8 | % | ||||||||||
Public securities4 products | 7.9 | 28.2 | % | 3.2 | 11.4 | % | ||||||||||
Other products | 0.4 | 1.6 | % | 1.4 | 5.0 | % | ||||||||||
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All products | 27.8 | 100.0 | % | 28.0 | 100.0 | % | ||||||||||
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| • | Average transaction value per active client5for the first quarter of 2019 was RMB3.5 million (US$0.5 million), a 32.3% decrease from the corresponding period in 2018. |
| • | Coverage network in mainland China included 313 service centers covering 83 cities as of March 31, 2019, up from 263 service centers covering 81 cities as of March 31, 2018 and unchanged from December 31, 2018. |
| • | Number of relationship managers was 1,496 as of March 31, 2019, a 7.9% increase from March 31, 2018, but a 5.5% decrease from December 31, 2018. |
Asset Management Business
The Company’s asset management business, Gopher Asset Management, is a leading alternative multi-asset manager in China also with international offices in Hong Kong and the United States. Gopher Asset Management develops and manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies.
| • | Total assets under managementas of March 31, 2019 were RMB171.1 billion (US$25.5 billion), a 1.1% increase from December 31, 2018 and a 9.1% increase from March 31, 2018. |
| 2 | “Active clients” for a given period refers to registered high net worth clients who purchase financial products distributed or provided by Noah during that given period. |
| 3 | “Credit products” was previously referred to as “fixed income” products. |
| 4 | “Public securities products” refer to the financial products that invest in publicly traded securities, including stocks and bonds. This was previously referred to as “secondary market equity” financial products. Starting in January 2019, we included the transaction value of mutual fund products in the total transaction value. |
| 5 | “Average transaction value per active client” refers to the average value of financial products that were purchased by active clients during the period specified. |
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| Investment type | As of December 31, 2018 | Asset Growth | Asset Expiration/ Redemption | As of March 31, 2019 | ||||||||||||||||||||
| (RMB billions, except percentages) | ||||||||||||||||||||||||
Private equity | 100.2 | 59.2 | % | 2.1 | 1.2 | 101.1 | 59.1 | % | ||||||||||||||||
Credit | 39.4 | 23.3 | % | 6.4 | 7.0 | 38.8 | 22.7 | % | ||||||||||||||||
Real estate | 16.7 | 9.9 | % | 0.8 | 0.1 | 17.4 | 10.2 | % | ||||||||||||||||
Public securities4 | 6.2 | 3.6 | % | 1.0 | 0.3 | 6 | 6.9 | 4.0 | % | |||||||||||||||
Multi-strategies7 | 6.7 | 4.0 | % | 0.3 | 0.1 | 6.9 | 4.0 | % | ||||||||||||||||
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All Investments | 169.2 | 100.0 | % | 10.6 | 8.7 | 171.1 | 100.0 | % | ||||||||||||||||
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Lending and Other Businesses
The Company’s lending services business utilizes an advanced risk-management system to assess and facilitate short-term loans to high quality borrowers, often secured with collateral. The total amount of loans originated during the first quarter of 2019 was RMB2.5 billion, as compared with RMB2.1 billion for the corresponding period of 2018, representing an increase of 17.2%. Other businesses include an online financial advisory platform and payment technology services.
Mr. Yi Zhao, Group President of Noah, said, “We have been focusing on the enhancement of operating efficiency, and successfully delivered another quarter of solid financial results, especially reflected in the improvement of operating margin. We have noticed that after the recent market challenges, high net worth clients have become increasingly rational and sophisticated, and their investment appetite has been gradually recovering, which provides us with enhanced business growth opportunities.”
FIRST QUARTER 2019 FINANCIAL RESULTS
Net Revenues
Net revenues for the first quarter of 2019 were RMB889.9 million (US$132.6 million), a 7.1% increase from the corresponding period in 2018, primarily driven by increased recurring service fees and other service fees, partially offset by a decrease of performance-based income.
| • | Wealth Management Business |
| • | Net revenues fromone-time commissions for the first quarter of 2019 were RMB322.7 million (US$48.1 million), a 2.1% increase from the corresponding period in 2018, generally in line with the total amount of transaction value. |
| • | Net revenues from recurring service fees for the first quarter of 2019 were RMB256.2 million (US$38.2 million), a 5.4% increase from the corresponding period in 2018. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed. |
| • | Net revenues from performance-based income for the first quarter of 2019 were RMB1.2 million (US$0.2 million), compared with RMB20.0 million in the corresponding period of 2018. The decrease was primarily due to less performance-based income realized from public securities. |
| • | Net revenues from other service fees for the first quarter of 2019 were RMB43.3 million (US$6.4 million), compared with RMB14.9 million in the corresponding period in 2018, primarily due to the growth of the various value-added services Noah offers to its high net worth clients. |
| 6 | The asset expiration/redemption of public securities also includes market appreciation or depreciation. |
| 7 | “Multi-strategies” investments were previously referred to as “other investments”. |
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| • | Asset Management Business |
| • | Net revenues from recurring service feesfor the first quarter of 2019 were RMB162.7 million (US$24.2 million), a 6.4% increase from the corresponding period in 2018. The increase was primarily due to the increase in assets under management. |
| • | Net revenues from performance-based incomefor the first quarter of 2019 were RMB3.6 million (US$0.5 million), compared with RMB39.4 million in the corresponding period of 2018. The decrease was primarily due to less performance-based income realized from public securities. |
| • | Lending and Other Businesses |
| • | Net revenuesfor the first quarter of 2019 were RMB98.6 million (US$14.7 million), a 132.6% increase from the corresponding period in 2018. The increase was primarily due to the growth of loan origination and service fee income generated from loans originated in the previous periods. |
Operating Costs and Expenses
Operating costs and expenses for the first quarter of 2019 were RMB587.4 million (US$87.5 million), a 5.6% increase from the corresponding period in 2018. Operating costs and expenses primarily consisted of compensation and benefits of RMB404.3 million (US$60.2 million), selling expenses of RMB90.5 million (US$13.5 million), general and administrative expenses of RMB58.6 million (US$8.7 million) and other operating expenses of RMB50.8 million (US$7.6 million).
| • | Operating costs and expensesfor the wealth management business for the first quarter of 2019 were RMB433.9 million (US$64.7 million), a 5.8% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits partially offset by a decrease in marketing expenses. |
| • | Operating costs and expensesfor the asset management business for the first quarter of 2019 were RMB100.1 million (US$14.9 million), a 17.9% increase from the corresponding period in 2018, primarily due to an increase in compensation and benefits. |
| • | Operating costs and expensesfor lending and other businesses for the first quarter of 2019 were RMB53.4 million (US$8.0 million), a 12.9% decrease from the corresponding period in 2018, primarily due to a decrease in compensation and benefits as employees undernon-lending businesses were restructured during the quarter. |
Operating Margin
Operating marginfor the first quarter of 2019 was 34.0%, an increase from 33.0% for the corresponding period in 2018.
| • | Operating margin for the wealth management business for the first quarter of 2019 was 30.8%, compared with 31.0% for the corresponding period in 2018. |
| • | Operating marginfor the asset management business for the first quarter of 2019 was 39.1%, compared with 56.3% for the corresponding period in 2018. |
| • | Income from operationfor the lending and other businessesfor the first quarter of 2019 was RMB45.2 million (US$6.7 million), compared with an operating loss of RMB18.9 million for the corresponding period in 2018. |
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Investment Income
Investment income for the first quarter of 2019 was RMB25.7 million (US$3.8 million), compared with RMB42.1 million for the corresponding period in 2018. The decrease was primarily related to the fluctuation of fair value of equity securities, which contributed RMB8.7 million (US$1.3 million) of investment income in the first quarter of 2019, as compared to RMB34.8 million investment income in the corresponding period of 2018.
Income Tax Expenses
Income tax expensesfor the first quarter of 2019 were RMB79.5 million (US$11.8 million), a 7.9% increase from the corresponding period in 2018. The increase was primarily due to higher taxable income.
Net Income
| • | Net Income |
| • | Net incomefor the first quarter of 2019 was RMB287.6 million (US$42.9 million), a 10.3% increase from the corresponding period in 2018. |
| • | Net marginfor the first quarter of 2019 was 32.3%, up from 31.4% for the corresponding period in 2018. |
| • | Net income attributable to Noah shareholdersfor the first quarter of 2019 was RMB284.6 million (US$42.4 million), a 6.0% increase from the corresponding period in 2018. |
| • | Net income attributable to Noah shareholders per basic and diluted ADS for the first quarter of 2019 was RMB4.70 (US$0.70) and RMB4.57 (US$0.68), respectively, compared with RMB4.70 and RMB4.44 respectively, for the corresponding period in 2018. |
| • | Non-GAAP Net Income Attributable to Noah Shareholders |
| • | Non-GAAP net income attributable to Noah shareholdersfor the first quarter of 2019 was RMB304.6 million (US$45.4 million), a 19.9% increase from the corresponding period in 2018. |
| • | Non-GAAP net margin attributable to Noah shareholdersfor the first quarter of 2019 was 34.2%, up from 30.6% for the corresponding period in 2018. |
| • | Non-GAAP net income attributable to Noah shareholders per diluted ADSfor the first quarter of 2019 was RMB4.90 (US$0.73), up from RMB4.21 for the corresponding period in 2018. |
Balance Sheet and Cash Flow
As of March 31, 2019, the Company had RMB2,869.6 million (US$427.6 million) in cash and cash equivalents, compared with RMB2,704.1 million as of December 31, 2018 and RMB2,151.4 million as of March 31, 2018.
Net cash inflow from the Company’s operating activities during the first quarter of 2019 was RMB152.7 million (US$22.8 million), driven by profit earned from normal business operations and partially offset by working capital change.
Net cash outflow from the Company’s investing activities during the first quarter of 2019 was RMB67.5 million (US$10.1 million), primarily due to the increase in property and equipment and various investments and partially offset by proceeds from sales of loans.
Net cash inflow from the Company’s financing activities was RMB88.6 million (US$13.2 million) in the first quarter of 2019, primarily due to the capital contribution bynon-controlling shareholders of a consolidated subsidiary.
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2019 FORECAST
The Company estimates thatnon-GAAP net income attributable to Noah shareholders for the full year 2019 will be in the range of RMB1.13 billion to RMB1.18 billion, an increase of 11.9% to 16.8% compared with the full year 2018. This estimate reflects management’s current business outlook and is subject to change.
CONFERENCE CALL
Senior management will host a combined English and Chinese language conference call to discuss the Company’s first quarter 2019 unaudited financial results and recent business activities.
The conference call may be accessed with the following details:
| Conference call details | ||
| Date/Time: | Thursday, May 16, 2019 at 8:00 p.m., U.S. Eastern Time Friday, May 17, 2019 at 8:00 a.m., Hong Kong Time | |
| Dial in details: | ||
| - United States Toll Free | +1-888-317-6003 | |
| - Mainland China Toll Free | 4001-206-115 | |
| - Hong Kong Toll Free | 800-963-976 | |
| - International | +1-412-317-6061 | |
| Conference Title: | Noah Holdings First Quarter 2019 Earnings Call | |
| Participant Entry No.: | 1098879 | |
Participants will need to dial in10-15 minutes early and use this Entry Number in order to join the conference.
A telephone replay will be available starting one hour after the end of the conference call until May 23, 2019 at+1-877-344-7529 (US Toll Free) or+1-412-317-0088 (International Toll). The replay access code is 10131248.
A live and archived webcast of the conference call will be available at Noah’s investor relations website under the News & Events section atir.noahgroup.com.
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DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD ANDNON-GAAP MEASURES
In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU)2016-02, Leases (Topic 842), which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and correspondingright-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. We adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases. The Company also elected the package of practical expedients, which among other things, does not require reassessment of lease classification.
In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release containsnon-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 toNon-GAAP Results” at the end of this press release.
Thenon-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 tonon-GAAP results should be carefully evaluated. Thenon-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 foregoingnon-GAAP net income attributable to Noah shareholders and per diluted ADS andnon-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 thenon-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management.
ABOUT NOAH HOLDINGS LIMITED
Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on high net worth individuals. In the first quarter of 2019, Noah distributed RMB28.0 billion (US$4.2 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB171.1 billion (US$25.5 billion) as of March 31, 2019.
Noah’s wealth management business primarily distributes credit, private equity, public securities and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,496 relationship managers across 313 service centers in 83 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company’s wealth management business had 274,893 registered clients as of March 31, 2019. As a leading alternative multi-asset manager in China, Gopher Asset Management manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies. The Company also provides lending services and other services including an online financial advisory platform and payment technology services.
For more information, please visit Noah atir.noahgroup.com.
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FOREIGN CURRENCY TRANSLATION
In this announcement, the unaudited financial results for the first quarter of 2019 ended March 31, 2019 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.7112 to US$1.00, the effective noon buying rate for March 29, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.
SAFE HARBOR STATEMENT
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the outlook for 2019 and quotations from management in this announcement, as well as Noah’s strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Noah’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause Noah’s actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: its goals and strategies; its future business development, financial condition and results of operations; the expected growth of the wealth management and asset management market in China and internationally; its expectations regarding demand for and market acceptance of the products it distributes; its expectations regarding keeping and strengthening its relationships with key clients; relevant government policies and regulations relating to its industries; its ability to attract and retain qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industries in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form20-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
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— FINANCIAL AND OPERATIONAL TABLES FOLLOW —
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Noah Holdings Limited
Condensed Consolidated Balance Sheets
(unaudited)
| As of | ||||||||||||
| December 31, 2018 | March 31, 2019 | March 31, 2019 | ||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 2,704,091 | 2,869,638 | 427,589 | |||||||||
Restricted cash | 2,500 | 2,500 | 373 | |||||||||
Short-term investments (including short-term investments measured at fair value of RMB438,077 thousands and RMB469,205 thousands, as of December 31, 2018 and March 31, 2019, respectively) | 450,477 | 501,646 | 74,748 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of nil as of December 31, 2018 and March 31, 2019 | 282,431 | 330,770 | 49,286 | |||||||||
Loans receivable, net | 620,219 | 507,650 | 75,642 | |||||||||
Amounts due from related parties | 572,201 | 664,305 | 98,985 | |||||||||
Loans receivable from factoring business | 18,893 | 14,010 | 2,088 | |||||||||
Other current assets | 453,269 | 476,160 | 70,950 | |||||||||
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Total current assets | 5,104,081 | 5,366,679 | 799,661 | |||||||||
Long-term investments (including long-term investments measured at fair value of RMB609,151 thousands and RMB687,159 thousands, as of December 31, 2018 and March 31, 2019, respectively) | 1,025,065 | 1,056,387 | 157,407 | |||||||||
Investment in affiliates | 1,375,110 | 1,401,542 | 208,836 | |||||||||
Property and equipment, net | 346,653 | 332,570 | 49,554 | |||||||||
Operating leaseright-of-use assets, net | — | 290,062 | 43,220 | |||||||||
Non-current deferred tax assets | 113,384 | 113,383 | 16,895 | |||||||||
Othernon-current assets | 49,971 | 67,577 | 10,068 | |||||||||
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Total Assets | 8,014,264 | 8,628,200 | 1,285,641 | |||||||||
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Liabilities and Equity | ||||||||||||
Current liabilities: | ||||||||||||
Accrued payroll and welfare expenses | 671,200 | 727,796 | 108,445 | |||||||||
Income tax payable | 54,296 | 106,337 | 15,845 | |||||||||
Deferred revenues | 142,925 | 154,723 | 23,054 | |||||||||
Other current liabilities | 722,652 | 540,184 | 80,490 | |||||||||
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Total current liabilities | 1,591,073 | 1,529,040 | 227,834 | |||||||||
Operating lease liabilities,non-current | — | 311,650 | 46,437 | |||||||||
Non-current deferred tax liabilities | 67,092 | 66,992 | 9,982 | |||||||||
Convertible notes | 145,004 | — | — | |||||||||
Othernon-current liabilities | 35,718 | 28,638 | 4,267 | |||||||||
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Total Liabilities | 1,838,887 | 1,936,320 | 288,520 | |||||||||
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Equity | 6,175,377 | 6,691,880 | 997,121 | |||||||||
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Total Liabilities and Equity | 8,014,264 | 8,628,200 | 1,285,641 | |||||||||
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Noah Holdings Limited
Condensed Consolidated Income Statements
(In RMB’000, except for USD data, per ADS data and percentages)
(unaudited)
| Three months ended | ||||||||||||||||
| March 31, | March 31, | March 31, | Change | |||||||||||||
| 2018 | 2019 | 2019 |
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| RMB’000 | RMB’000 | USD’000 | ||||||||||||||
Revenues: | ||||||||||||||||
Revenues from others: | ||||||||||||||||
One-time commissions | 219,541 | 216,643 | 32,281 | (1.3 | %) | |||||||||||
Recurring service fees | 143,932 | 132,476 | 19,740 | (8.0 | %) | |||||||||||
Performance-based income | 20,657 | 1,094 | 163 | (94.7 | %) | |||||||||||
Other service fees | 59,989 | 145,377 | 21,662 | 142.3 | % | |||||||||||
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Total revenues from others | 444,119 | 495,590 | 73,846 | 11.6 | % | |||||||||||
Revenues from funds Gopher manages: | ||||||||||||||||
One-time commissions | 98,384 | 107,908 | 16,079 | 9.7 | % | |||||||||||
Recurring service fees | 254,067 | 288,156 | 42,937 | 13.4 | % | |||||||||||
Performance-based income | 39,048 | 3,758 | 560 | (90.4 | %) | |||||||||||
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Total revenues from funds Gopher manages | 391,499 | 399,822 | 59,576 | 2.1 | % | |||||||||||
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Total revenues | 835,618 | 895,412 | 133,422 | 7.2 | % | |||||||||||
Less: VAT related surcharges | (4,699 | ) | (5,528 | ) | (824 | ) | 17.6 | % | ||||||||
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Net revenues | 830,919 | 889,884 | 132,598 | 7.1 | % | |||||||||||
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|
|
|
|
|
| |||||||||
Operating costs and expenses: | ||||||||||||||||
Compensation and benefits | ||||||||||||||||
Relationship manager compensation | (158,701 | ) | (167,268 | ) | (24,924 | ) | 5.4 | % | ||||||||
Performance fee compensation | (6,200 | ) | (1,276 | ) | (190 | ) | (79.4 | %) | ||||||||
Other compensations | (195,812 | ) | (235,761 | ) | (35,129 | ) | 20.4 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total compensation and benefits | (360,713 | ) | (404,305 | ) | (60,243 | ) | 12.1 | % | ||||||||
Selling expenses | (106,259 | ) | (90,456 | ) | (13,478 | ) | (14.9 | %) | ||||||||
General and administrative expenses | (55,929 | ) | (58,550 | ) | (8,724 | ) | 4.7 | % | ||||||||
Other operating expenses | (37,963 | ) | (50,828 | ) | (7,574 | ) | 33.9 | % | ||||||||
Government subsidies | 4,488 | 16,780 | 2,500 | 273.9 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating costs and expenses | (556,376 | ) | (587,359 | ) | (87,519 | ) | 5.6 | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from operations | 274,543 | 302,525 | 45,079 | 10.2 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Other income: | ||||||||||||||||
Interest income | 22,867 | 23,123 | 3,445 | 1.1 | % | |||||||||||
Interest expenses | (6,869 | ) | (430 | ) | (64 | ) | (93.7 | %) | ||||||||
Investment income | 42,132 | 25,663 | 3,824 | (39.1 | %) | |||||||||||
Other income (expense) | 1,163 | (1,928 | ) | (287 | ) | (265.8 | %) | |||||||||
|
|
|
|
|
|
|
| |||||||||
Total other income | 59,293 | 46,428 | 6,918 | (21.7 | %) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Income before taxes and income from equity in affiliates | 333,836 | 348,953 | 51,997 | 4.5 | % | |||||||||||
Income tax expense | (73,662 | ) | (79,492 | ) | (11,845 | ) | 7.9 | % | ||||||||
Income from equity in affiliates | 652 | 18,123 | 2,700 | 2,679.6 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income | 260,826 | 287,584 | 42,852 | 10.3 | % | |||||||||||
Less: net (loss) income attributable tonon-controlling interests | (7,639 | ) | 3,007 | 448 | N.A. | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Net income attributable to Noah shareholders | 268,465 | 284,577 | 42,404 | 6.0 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Income per ADS, basic | 4.70 | 4.70 | 0.70 | — | ||||||||||||
Income per ADS, diluted | 4.44 | 4.57 | 0.68 | 2.9 | % | |||||||||||
Margin analysis: | ||||||||||||||||
Operating margin | 33.0 | % | 34.0 | % | 34.0 | % | ||||||||||
Net margin | 31.4 | % | 32.3 | % | 32.3 | % | ||||||||||
Weighted average ADS equivalent[1]: | ||||||||||||||||
Basic | 57,166,048 | 60,570,704 | 60,570,704 | |||||||||||||
Diluted | 61,384,898 | 62,355,964 | 62,355,964 | |||||||||||||
ADS equivalent outstanding at end of period | 57,225,760 | 61,180,845 | 61,180,845 | |||||||||||||
| [1] | Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs. |
10
Noah Holdings Limited
Condensed Comprehensive Income Statements
(unaudited)
| Three months ended | ||||||||||||||||
| March 31, 2018 | March 31, 2019 | March 31, 2019 | Change | |||||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||||||
Net income | 260,826 | 287,584 | 42,851 | 10.3 | % | |||||||||||
Other comprehensive income, net of tax: | ||||||||||||||||
Foreign currency translation adjustments | (34,863 | ) | (30,858 | ) | (4,598 | ) | (11.5 | %) | ||||||||
Fair value fluctuation of available for sale Investment (after tax) | 1,376 | 74 | 11 | (94.6 | %) | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Comprehensive income | 227,339 | 256,800 | 38,264 | 13.0 | % | |||||||||||
Less: Comprehensive (loss) income attributable tonon-controlling interests | (7,579 | ) | 3,217 | 479 | N.A. | |||||||||||
|
|
|
|
|
|
|
| |||||||||
Comprehensive income attributable to Noah shareholders | 234,918 | 253,583 | 37,785 | 7.9 | % | |||||||||||
|
|
|
|
|
|
|
| |||||||||
11
Noah Holdings Limited
Supplemental Information
(unaudited)
| As of | ||||||||||||
| March 31, 2018 | March 31, 2019 | Change | ||||||||||
Number of registered clients | 196,927 | 274,893 | 39.6 | % | ||||||||
Number of relationship managers | 1,386 | 1,496 | 7.9 | % | ||||||||
Number of cities under coverage in mainland China | 81 | 83 | 2.5 | % | ||||||||
| Three months ended | ||||||||||||
| March 31, 2018 | March 31, 2019 | Change | ||||||||||
| (in millions of RMB, except number of active clients and percentages) | ||||||||||||
Number of active clients | 5,449 | 8,117 | 49.0 | % | ||||||||
Transaction value: | ||||||||||||
Credit products | 13,247 | 22,101 | 66.8 | % | ||||||||
Private equity products | 6,279 | 1,333 | (78.8 | %) | ||||||||
Public securities products | 7,854 | 3,205 | (59.2 | %) | ||||||||
Other products | 433 | 1,401 | 223.5 | % | ||||||||
|
|
|
|
|
| |||||||
Total transaction value | 27,813 | 28,040 | 0.8 | % | ||||||||
Average transaction value per active client | 5.10 | 3.45 | (32.3 | %) | ||||||||
12
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
| Three months ended March 31, 2019 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
Revenues: | ||||||||||||||||
Revenues from others: | ||||||||||||||||
One-time commissions | 216,180 | 463 | — | 216,643 | ||||||||||||
Recurring service fees | 131,618 | 858 | — | 132,476 | ||||||||||||
Performance-based income | 1,094 | — | — | 1,094 | ||||||||||||
Other service fees | 43,445 | 1,166 | 100,766 | 145,377 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues from others | 392,337 | 2,487 | 100,766 | 495,590 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Revenues from funds Gopher manages: | ||||||||||||||||
One-time commissions | 107,908 | — | — | 107,908 | ||||||||||||
Recurring service fees | 125,751 | 162,405 | — | 288,156 | ||||||||||||
Performance-based income | 97 | 3,661 | — | 3,758 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues from funds Gopher manages | 233,756 | 166,066 | — | 399,822 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues | 626,093 | 168,553 | 100,766 | 895,412 | ||||||||||||
Less: VAT related surcharges | (2,730 | ) | (628 | ) | (2,170 | ) | (5,528 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net revenues | 623,363 | 167,925 | 98,596 | 889,884 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating costs and expenses: | ||||||||||||||||
Compensation and benefits | ||||||||||||||||
Relationship manager compensation | (167,125 | ) | — | (143 | ) | (167,268 | ) | |||||||||
Performance fee compensation | — | (1,276 | ) | — | (1,276 | ) | ||||||||||
Other compensations | (146,458 | ) | (63,936 | ) | (25,367 | ) | (235,761 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total compensation and benefits | (313,583 | ) | (65,212 | ) | (25,510 | ) | (404,305 | ) | ||||||||
Selling expenses | (83,114 | ) | (3,903 | ) | (3,439 | ) | (90,456 | ) | ||||||||
General and administrative expenses | (37,336 | ) | (15,261 | ) | (5,953 | ) | (58,550 | ) | ||||||||
Other operating expenses | (15,086 | ) | (17,266 | ) | (18,476 | ) | (50,828 | ) | ||||||||
Government subsidies | 15,218 | 1,562 | — | 16,780 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating costs and expenses | (433,901 | ) | (100,080 | ) | (53,378 | ) | (587,359 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income from operations | 189,462 | 67,845 | 45,218 | 302,525 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
13
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
| Three months ended March 31, 2018 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
Revenues: | ||||||||||||||||
Revenues from others: | ||||||||||||||||
One-time commissions | 219,283 | 258 | — | 219,541 | ||||||||||||
Recurring service fees | 141,329 | 2,603 | — | 143,932 | ||||||||||||
Performance-based income | 20,126 | 531 | — | 20,657 | ||||||||||||
Other service fees | 14,993 | 1,791 | 43,205 | 59,989 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues from others | 395,731 | 5,183 | 43,205 | 444,119 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Revenues from funds Gopher manages: | ||||||||||||||||
One-time commissions | 98,318 | 66 | — | 98,384 | ||||||||||||
Recurring service fees | 103,069 | 150,998 | — | 254,067 | ||||||||||||
Performance-based income | — | 39,048 | — | 39,048 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues from funds Gopher manages | 201,387 | 190,112 | — | 391,499 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues | 597,118 | 195,295 | 43,205 | 835,618 | ||||||||||||
Less: VAT related surcharges | (2,936 | ) | (944 | ) | (819 | ) | (4,699 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Net revenues | 594,182 | 194,351 | 42,386 | 830,919 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Operating costs and expenses: | ||||||||||||||||
Compensation and benefits | ||||||||||||||||
Relationship manager compensation | (157,926 | ) | — | (775 | ) | (158,701 | ) | |||||||||
Performance fee compensation | — | (6,200 | ) | — | (6,200 | ) | ||||||||||
Other compensations | (118,761 | ) | (45,143 | ) | (31,908 | ) | (195,812 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Total compensation and benefits | (276,687 | ) | (51,343 | ) | (32,683 | ) | (360,713 | ) | ||||||||
Selling expenses | (91,314 | ) | (5,814 | ) | (9,131 | ) | (106,259 | ) | ||||||||
General and administrative expenses | (36,716 | ) | (13,754 | ) | (5,459 | ) | (55,929 | ) | ||||||||
Other operating expenses | (8,295 | ) | (14,605 | ) | (15,063 | ) | (37,963 | ) | ||||||||
Government subsidies | 2,808 | 640 | 1,040 | 4,488 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total operating costs and expenses | (410,204 | ) | (84,876 | ) | (61,296 | ) | (556,376 | ) | ||||||||
|
|
|
|
|
|
|
| |||||||||
Income (loss) from operations | 183,978 | 109,475 | (18,910 | ) | 274,543 | |||||||||||
|
|
|
|
|
|
|
| |||||||||
14
Noah Holdings Limited
Supplement Revenue Information for Segment
(unaudited)
| Three months ended March 31, 2019 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
Revenues: | ||||||||||||||||
Mainland China | 401,523 | 145,608 | 100,766 | 647,897 | ||||||||||||
Hong Kong | 180,596 | 20,943 | — | 201,539 | ||||||||||||
Others | 43,974 | 2,002 | — | 45,976 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues | 626,093 | 168,553 | 100,766 | 895,412 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
| Three months ended March 31, 2018 | ||||||||||||||||
| Wealth Management Business | Asset Management Business | Lending and Other Businesses | Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
Revenues: | ||||||||||||||||
Mainland China | 463,431 | 150,429 | 43,205 | 657,065 | ||||||||||||
Hong Kong | 133,687 | 44,866 | — | 178,553 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
Total revenues | 597,118 | 195,295 | 43,205 | 835,618 | ||||||||||||
|
|
|
|
|
|
|
| |||||||||
15
Noah Holdings Limited
Reconciliation of GAAP toNon-GAAP Results
(In RMB, except for per ADS data and percentages)
(unaudited) 8
| Three months ended | ||||||||||||
| March 31, 2018 | March 31, 2019 | Change | ||||||||||
| RMB’000 | RMB’000 | |||||||||||
Net income attributable to Noah shareholders | 268,465 | 284,577 | 6.0 | % | ||||||||
Adjustment for share-based compensation related to: | ||||||||||||
Share options | 12,210 | 13,413 | 9.9 | % | ||||||||
Restricted shares | 10,491 | 16,203 | 54.4 | % | ||||||||
Less: gains from fair value changes of equity securities (unrealized) | 34,788 | 8,742 | (74.9 | %) | ||||||||
Add: gains from sales of equity securities (realized) | — | 4,885 | N.A. | |||||||||
Less: Tax effect of adjustments | 2,283 | 5,714 | 150.3 | % | ||||||||
|
|
|
|
|
| |||||||
Adjusted net income attributable to Noah shareholders(non-GAAP) | 254,095 | 304,622 | 19.9 | % | ||||||||
Net margin attributable to Noah shareholders | 32.3 | % | 32.0 | % | ||||||||
Non-GAAP net margin attributable to Noah shareholders | 30.6 | % | 34.2 | % | ||||||||
Net income attributable to Noah shareholders per ADS, diluted | 4.44 | 4.57 | 2.9 | % | ||||||||
Non-GAAP net income attributable to Noah shareholders per ADS, diluted | 4.21 | 4.90 | 16.4 | % | ||||||||
| 8 | Noah’sNon-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. |
16
