Form 6-K Noah Holdings Ltd For: Aug 31

August 24, 2020 4:16 PM EDT

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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 August 2020

 

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 files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x Form 40-F o

 

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): o

 

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): o

 

 

 


 

SIGNATURE

 

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

 

 

 

 

 

By:

/s/ Qing Pan

 

Name:

Qing Pan

 

Title:

Chief Financial Officer

 

Date: August 24, 2020

 

2


 

Exhibit Index

 

Exhibit No.

 

Description.

 

 

 

Exhibit 99.1

 

Press Release

 

3


 

 

Exhibit 99.1

 

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED

 

FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2020

 

SHANGHAI, August 25, 2020 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the second quarter of 2020.

 

SECOND QUARTER 2020 FINANCIAL HIGHLIGHTS

 

·                  Net revenues for the second quarter of 2020 were RMB747.4 million (US$105.8 million), a 0.2% increase from the first quarter of 2020, while a 14.2% decrease from the corresponding period in 2019.

 

(RMB millions,
except percentages)

 

Q2 2019

 

Q2 2020

 

YoY Change

 

Wealth management

 

625.6

 

542.8

 

(13.2

)%

Asset management

 

171.1

 

181.6

 

6.1

%

Lending and other businesses

 

74.9

 

23.0

 

(69.3

)%

Total net revenues

 

871.6

 

747.4

 

(14.2

)%

 

·                  Income from operations for the second quarter of 2020 was RMB319.5 million (US$45.2 million), a 24.7% increase from the first quarter of 2020, and a 26.9% increase from the corresponding period in 2019.

 

(RMB millions,
except percentages)

 

Q2 2019

 

Q2 2020

 

YoY Change

 

Wealth management

 

129.9

 

196.6

 

51.3

%

Asset management

 

86.8

 

100.8

 

16.1

%

Lending and other businesses

 

35.2

 

22.1

 

(36.9

)%

Total income from operations

 

251.9

 

319.5

 

26.9

%

 

·                  Net income attributable to Noah shareholders for the second quarter of 2020 was RMB299.6 million (US$42.4 million), a 23.3% increase from the first quarter of 2020, and a 19.8% increase from the corresponding period in 2019.

 

·                  Non-GAAP1 net income attributable to Noah shareholders for the second quarter of 2020 was RMB307.2 million (US$43.5 million), a 20.1% increase from the first quarter of 2020, and a 16.7% increase from the corresponding period in 2019.

 

SECOND QUARTER 2020 OPERATIONAL UPDATES

 

Wealth Management Business

 

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

 


   

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.

 

1


 

·                  Total number of registered clients as of June 30, 2020 was 332,157, a 17.1% increase from June 30, 2019, and a 3.4% increase from March 31, 2020.

 

·                  Total number of active clients2 which excluded mutual fund clients during the second quarter of 2020 was 3,367, a 42.8% decrease from June 30, 2019, and a 17.4% decrease from the first quarter of 2020, as we are continuing in the transition of offering more online mutual fund products to our clients. Counting in mutual funds clients, the total number of clients who transacted with us during the second quarter of 2020 was 14,703, a 48.7% increase from the second quarter of 2019, and a 12.6% decrease from the first quarter of 2020.

 

·                  Aggregate value of financial products distributed during the second quarter of 2020 was RMB21.4 billion (US$3.0 billion), a 12.0% decrease from the second quarter of 2019, and a 7.8% decrease from the first quarter of 2020.

 

 

 

Three months ended June 30,

 

 

 

2019

 

2020

 

Product type

 

(RMB in billions, except percentages)

 

Credit products

 

9.8

 

40.0

%

0.2

 

1.1

%

Private equity products

 

7.7

 

31.5

%

2.5

 

11.9

%

Public securities products

 

6.0

 

24.7

%

18.0

 

83.8

%

Other products

 

0.9

 

3.8

%

0.7

 

3.2

%

All products

 

24.4

 

100.0

%

21.4

 

100.0

%

 

·                  Coverage network in mainland China included 264 service centers covering 78 cities as of June 30, 2020, compared with 306 service centers covering 83 cities as of June 30, 2019 and 292 service centers covering 78 cities as of March 31, 2020. The decrease in the number of service centers and cities is primarily a result of consolidation of duplicate service centers in order to optimize costs and expenses.

 

·                  Number of relationship managers was 1,196 as of June 30, 2020, a 16.2% decrease from June 30, 2019, and a 2.0% decrease from March 31, 2020, primarily as a result of the Company’s efforts to streamline operational human resources. The turnover rate of core “elite” relationship managers was 1.4%, compared with 1.0% as of March 31, 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 with overseas offices in Hong Kong, the 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 June 30, 2020 were RMB159.4 billion (US$22.6 billion), a 1.4% decrease from March 31, 2020 and an 11.8% decrease from June 30, 2019.

 


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.

 

2


 

Investment type

 

As of
March 31,
2020

 

Growth

 

Distribution/
Redemption

 

As of
June 30,
2020

 

 

 

(RMB billions, except percentages)

 

Private equity

 

105.7

 

65.4

%

2.1

 

0.1

 

107.7

 

67.6

%

Credit

 

19.9

 

12.3

%

0.1

 

5.9

 

14.1

 

8.9

%

Real estate

 

18.2

 

11.3

%

0.7

 

1.6

 

17.3

 

10.8

%

Public securities3

 

9.2

 

5.7

%

3.2

 

0.6

 

11.8

 

7.4

%

Multi-strategies

 

8.7

 

5.3

%

0.2

 

0.4

 

8.5

 

5.3

%

All Investments

 

161.7

 

100.0

%

6.3

 

8.6

 

159.4

 

100.0

%

 

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 second quarter of 2020 was RMB0.1 billion, compared with RMB2.8 billion for the corresponding period of 2019, due to the ongoing impact of COVID-19, and our voluntary reduction of loan origination. Other businesses include an online financial advisory platform.

 

Ms. Jingbo Wang, co-founder and CEO of Noah, said, “We are very pleased to report strong results for the second quarter of 2020: our Non-GAAP net income rose 20.1% from the first quarter, representing a second highest record since our listing on the NYSE; our operating margin increased to 42.7% due to improved operation efficiency and higher performance income in connection with an increased number of successful primary market exits and a booming A-share market. The transaction value of public securities accounted for 83.8% of the total volume this quarter, demonstrating our continued commitment to distributing more standardized products to our clients. In this quarter, the outstanding amount of onshore mutual funds distributed on our mobile APP Fund Smile exceeded RMB10 billion, and our parallel offshore mutual fund mobile APP iNoah was launched, which jointly form the formation of Noah’s global mutual funds platform. We are confident that the momentum we’ve seen in the past four quarters since our transformation will continue.”

 

SECOND QUARTER 2020 FINANCIAL RESULTS

 

Net Revenues

 

Net revenues for the second quarter of 2020 were RMB747.4 million (US$105.8 million), a 14.2% decrease from the corresponding period in 2019, primarily driven by decreased one-time commissions and other service fees, partially offset by increased recurring service fees and performance-based income.

 

·                  Wealth Management Business

 

·                 Net revenues from one-time commissions for the second quarter of 2020 were RMB126.0 million (US$17.8 million), a 57.0% decrease from the corresponding period in 2019, primarily due to the decrease of transaction value as well as the distribution of lower one-time commission rates products.

 

·                 Net revenues from recurring service fees for the second quarter of 2020 were RMB310.3 million (US$43.9 million), a 15.5% increase from the corresponding period in 2019, mainly due to the service fees recognized upon liquidation of certain credit products with higher fee rates.

 

·                 Net revenues from performance-based income for the second quarter of 2020 were RMB74.5 million (US$10.5 million), a 3,671.9% increase from the corresponding period of 2019, primarily due to a significant increase in performance-based income from public securities products as well as certain private equity products.

 


3   The asset distribution/redemption of public securities also includes market appreciation or depreciation.

 

3


 

·                 Net revenues from other service fees for the second quarter of 2020 were RMB32.0 million (US$4.5 million), a 48.1% 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 second quarter of 2020 were RMB164.0 million (US$23.2 million), relatively flat compared with the corresponding period in 2019.

 

·                 Net revenues from performance-based income for the second quarter of 2020 were RMB16.1 million (US$2.3 million), a 184.9% increase from the corresponding period in 2019, primarily due to an increase in performance-based income from private equity products.

 

·                  Lending and Other Businesses

 

·                 Net revenues for the second quarter of 2020 were RMB23.0 million (US$3.3 million), a 69.3% 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 second quarter of 2020 were RMB427.9 million (US$60.6 million), a 30.9% decrease from the corresponding period in 2019. Operating costs and expenses primarily consisted of compensation and benefits of RMB330.8 million (US$46.8 million), selling expenses of RMB62.6 million (US$8.9 million), general and administrative expenses of RMB68.5 million (US$9.7 million), provision of credit losses of RMB1.9 million (US$0.3 million) and other operating expenses of RMB20.7 million (US$2.9 million).

 

·                      Operating costs and expenses for the wealth management business for the second quarter of 2020 were RMB346.2 million (US$49.0 million), a 30.2% decrease from the corresponding period in 2019, primarily due to a decrease in compensation and benefits and credit losses.

 

·                      Operating costs and expenses for the asset management business for the second quarter of 2020 were RMB80.9 million (US$11.4 million), a 4.0% decrease from the corresponding period in 2019, primarily due to a decrease in compensation and benefits and credit losses.

 

·                      Operating costs and expenses for the lending and other businesses for the second quarter of 2020 were RMB0.8 million (US$0.1 million), a 97.9% decrease from the corresponding period in 2019, primarily due to an increase in government grants in the amount of RMB14.6 million (US$2.1 million) .

 

Operating Margin

 

Operating margin for the second quarter of 2020 was 42.7%, increased from 28.9% for the corresponding period in 2019.

 

·                      Operating margin for the wealth management business for the second quarter of 2020 was 36.2%, compared with 20.8% for the corresponding period in 2019.

 

·                      Operating margin for the asset management business for the second quarter of 2020 was 55.5%, compared with 50.8% for the corresponding period in 2019.

 

·                      Income from operation for the lending and other businesses for the second quarter of 2020 was RMB22.1 million (US$3.1 million), compared with an operating income of RMB35.2 million for the corresponding period in 2019.

 

4


 

Investment Income

 

Investment income for the second quarter of 2020 was RMB4.7 million (US$0.7 million), compared with RMB11.8 million for the corresponding period in 2019.

 

Income Tax Expenses

 

Income tax expenses for the second quarter of 2020 were RMB77.8 million (US$11.0 million), a 15.1% 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 second quarter of 2020 was RMB40.7 million (US$5.8 million), a 41.2% increase from the corresponding period in 2019, primarily due to the increase 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 second quarter of 2020 was RMB301.9 million (US$42.7 million), an 18.7% increase from the corresponding period in 2019.

 

·                      Net margin for the second quarter of 2020 was 40.4%, up from 29.2% for the corresponding period in 2019.

 

·                      Net income attributable to Noah shareholders for the second quarter of 2020 was RMB299.6 million (US$42.4 million), a 19.8% increase from the corresponding period in 2019.

 

·                      Net margin attributable to Noah shareholders for the second quarter of 2020 was 40.1%, up from 28.7% for the corresponding period in 2019.

 

·                      Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2020 was RMB4.86 (US$0.69) and RMB4.84 (US$0.69), respectively, up from RMB4.09 and RMB4.04 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 second quarter of 2020 was RMB307.2 million (US$43.5 million), a 16.7% increase from the corresponding period in 2019.

 

·                      Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2020 was 41.1%, compared with 30.2% for the corresponding period in 2019.

 

·                      Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2020 was RMB4.96 (US$0.70), up from RMB4.25 for the corresponding period in 2019.

 

Balance Sheet and Cash Flow

 

As of June 30, 2020, the Company had RMB4,170.7 million (US$590.3 million) in cash and cash equivalents, compared with RMB4,045.8 million as of March 31, 2020 and RMB2,873.7 million as of June 30, 2019.

 

Net cash outflow from the Company’s operating activities during the second quarter of 2020 was RMB9.6 million (US$1.4 million), primarily due to payment of employee annual bonuses and annual tax filing in the second quarter.

 

5


 

Net cash inflow from the Company’s investing activities during the second quarter of 2020 was RMB130.8 million (US$18.5 million), primarily due to disposal of various investments in the second quarter.

 

Net cash inflow from the Company’s financing activities was RMB2.2 million (US$0.3 million) in the second quarter of 2020, primarily due to proceeds from issuance of ordinary shares upon exercise of stock options.

 

UPDATE ON CREDIT FUNDS

 

As the Company previously disclosed on July 8, 2019, August 29, 2019 and April 24, 2020, in connection with certain credit funds managed by an affiliate of Gopher Asset Management (“Gopher”) providing supply chain financing involving companies related to Camsing International Holding Limited (“Camsing”), it is suspected that fraud has been committed by third parties related to those financings. A criminal investigation in China is ongoing, and Gopher is assisting PRC government authorities in their investigation, as well as pursuing all available actions, including filing civil litigations against the relevant parties, to protect investors (“Investor(s)”) of the credit funds involved in Camsing incidents (“Camsing Products”) who have outstanding economic interests in such products and to recover their assets.

 

Furthermore, in order to share the growth of the Company with the Investors, to prevent distraction or diversion of its management resources from existing or potential claims, as well as to protect the best interests of its shareholders, the Company has decided to propose a settlement offer to the Investors.

 

Under the settlement plan, each Investor will be granted a certain number of restricted share units (“RSUs”) of the Company, typically over a period of up to ten years, the vesting of which is subject to certain conditions and a schedule not exceeding fifteen years.  An investor accepting the offer shall agree to give up all his or her outstanding legal rights associated with Camsing Products and irrevocably release the Company and all its affiliated entities and individuals from any and all claims, known or unknown, that relate to the Camsing Products.  Upon vesting of the RSUs, the Investor will receive Class A ordinary shares of the Company. On August 24, 2020, this settlement plan was approved by the board of directors (the “Board”) of the Company and a total number of new Class A ordinary shares not exceeding 1.6% of the share capital of the Company has been authorized to be issued each year for a consecutive ten years.

 

As of the date hereof, there are only claims initiated in China by several Investors against Gopher or its affiliates. These claims are at early stages and their impact on the Company remains unclear.

 

2020 FORECAST

 

The Company revises its non-GAAP net income attributable to Noah shareholders for the full year 2020 from the range of RMB800 million to RMB900 million, to the range of RMB900 million to RMB1billion. The revision is based on stronger than expected transaction value and performance income of public securities, improved operation efficiency and optimistic business estimation of the second half of 2020, despite the impact on overseas new insurance transactions from COVID-19 travel bans. 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 second quarter 2020 unaudited financial results and recent business activities.

 

6


 

The conference call may be accessed with the following details:

 

Conference call details

 

 

Date/Time:

 

Monday, August 24, 2020 at 8:00 p.m., U.S. Eastern Time
Tuesday, August 25, 2020 at 8:00 a.m., Hong Kong Time

Dial in details:

 

 

- United States Toll Free

 

+1-866-311-7654

- Mainland China Toll Free

 

4001-201-203

- Hong Kong Toll Free

 

800-905-945

- Hong Kong Local Toll

 

+852-301-84992

- International

 

+1-412-317-5227

Conference Title:

 

Noah Holdings 2Q20 Earnings Conference Call

Participant Password:

 

Noah Holdings Limited

 

A telephone replay will be available starting one hour after the end of the conference call until August 31, 2020 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10146791.

 

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

 

DISCUSSION OF NON-GAAP MEASURES

 

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

 

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

 

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

 

ABOUT NOAH HOLDINGS 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 half of 2020, Noah distributed RMB44.6 billion (US$6.3 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB159.4 billion (US$22.6 billion) as of June 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 1,196 relationship managers across 264 service centers in 78 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada, Australia and Singapore. The Company’s wealth management business had 332,157 registered clients as of June 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.

 

7


 

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

 

FOREIGN CURRENCY TRANSLATION

 

In this announcement, the unaudited financial results for the second quarter of 2020 ended June 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 RMB7.0651 to US$1.00, the effective noon buying rate for June 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.

 

Contacts:

 

Noah Holdings Limited

Investor Relations

Tel: +86-21-8035-8294

ir@noahgroup.com

 

8


 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

9


 

Noah Holdings Limited 

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

 

 

As of

 

 

 

 

 

March 31,

 

June 30, 

 

June 30, 

 

 

 

2020

 

2020

 

2020

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

4,045,796

 

4,170,704

 

590,325

 

Restricted cash

 

6,583

 

4,098

 

580

 

Short-term investments

 

97,863

 

61,151

 

8,655

 

Accounts receivable, net

 

297,493

 

334,411

 

47,333

 

Loans receivable, net

 

620,905

 

619,811

 

87,729

 

Amounts due from related parties

 

757,278

 

766,189

 

108,447

 

Other current assets 

 

196,857

 

199,908

 

28,295

 

Total current assets 

 

6,022,775

 

6,156,272

 

871,364

 

Long-term investments, net

 

837,449

 

836,442

 

118,391

 

Investment in affiliates

 

1,325,649

 

1,291,255

 

182,765

 

Property and equipment, net

 

271,574

 

262,648

 

37,175

 

Operating lease right-of-use assets, net

 

337,405

 

343,925

 

48,679

 

Deferred tax assets

 

167,254

 

164,749

 

23,319

 

Other non-current assets 

 

126,369

 

148,590

 

21,029

 

Total Assets

 

9,088,475

 

9,203,881

 

1,302,722

 

Liabilities and Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accrued payroll and welfare expenses 

 

644,420

 

461,530

 

65,325

 

Income tax payable

 

101,630

 

77,381

 

10,953

 

Deferred revenues

 

141,228

 

163,608

 

23,157

 

Other current liabilities

 

369,847

 

351,690

 

49,778

 

Total current liabilities

 

1,257,125

 

1,054,209

 

149,213

 

Operating lease liabilities, non-current

 

344,078

 

346,241

 

49,007

 

Deferred tax liabilities

 

56,804

 

56,480

 

7,994

 

Other non-current liabilities

 

2,787

 

3,526

 

499

 

Total Liabilities 

 

1,660,794

 

1,460,456

 

206,713

 

Equity

 

7,427,681

 

7,743,425

 

1,096,009

 

Total Liabilities and Equity

 

9,088,475

 

9,203,881

 

1,302,722

 

 

10


 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

 

 

Three months ended 

 

 

 

June 30,

 

June 30,

 

June 30,

 

 

 

 

 

2019

 

2020

 

2020

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from others:

 

 

 

 

 

 

 

 

 

One-time commissions

 

193,937

 

117,085

 

16,572

 

(39.6

)%

Recurring service fees

 

131,164

 

152,253

 

21,550

 

16.1

%

Performance-based income

 

2,051

 

57,206

 

8,097

 

2,689.2

%

Other service fees

 

139,940

 

56,197

 

7,954

 

(59.8

)%

Total revenues from others

 

467,092

 

382,741

 

54,173

 

(18.1

)%

Revenues from funds Gopher manages:

 

 

 

 

 

 

 

 

 

One-time commissions

 

101,104

 

10,431

 

1,476

 

(89.7

)%

Recurring service fees

 

303,578

 

324,174

 

45,884

 

6.8

%

Performance-based income

 

5,610

 

33,766

 

4,779

 

501.9

%

Total revenues from funds Gopher manages

 

410,292

 

368,371

 

52,139

 

(10.2

)%

Total revenues

 

877,384

 

751,112

 

106,312

 

(14.4

)%

Less: VAT related surcharges 

 

(5,786

)

(3,674

)

(520

)

(36.5

)%

Net revenues

 

871,598

 

747,438

 

105,792

 

(14.2

)%

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(175,898

)

(113,044

)

(16,000

)

(35.7

)%

Others

 

(261,604

)

(217,805

)

(30,828

)

(16.7

)%

Total compensation and benefits

 

(437,502

)

(330,849

)

(46,828

)

(24.4

)%

Selling expenses

 

(79,557

)

(62,622

)

(8,864

)

(21.3

)%

General and administrative expenses

 

(47,742

)

(68,502

)

(9,696

)

43.5

%

Provision for credit losses

 

(36,461

)

(1,897

)

(269

)

(94.8

)%

Other operating expenses 

 

(51,063

)

(20,715

)

(2,932

)

(59.4

)%

Government grants 

 

32,587

 

56,651

 

8,018

 

73.8

%

Total operating costs and expenses 

 

(619,738

)

(427,934

)

(60,571

)

(30.9

)%

Income from operations 

 

251,860

 

319,504

 

45,221

 

26.9

%

Other income:

 

 

 

 

 

 

 

 

 

Interest income 

 

29,225

 

10,530

 

1,490

 

(64.0

)%

Investment income 

 

11,847

 

4,711

 

667

 

(60.2

)%

Other income 

 

310

 

4,298

 

608

 

1,286.5

%

Total other income

 

41,382

 

19,539

 

2,765

 

(52.8

)%

Income before taxes and income from equity in affiliates

 

293,242

 

339,043

 

47,986

 

15.6

%

Income tax expense

 

(67,622

)

(77,810

)

(11,013

)

15.1

%

Income from equity in affiliates

 

28,829

 

40,693

 

5,760

 

41.2

%

Net income

 

254,449

 

301,926

 

42,733

 

18.7

%

Less: net income attributable to non-controlling interests

 

4,266

 

2,285

 

323

 

(46.4

)%

Net income attributable to Noah shareholders 

 

250,183

 

299,641

 

42,410

 

19.8

%

Income per ADS, basic

 

4.09

 

4.86

 

0.69

 

18.8

%

Income per ADS, diluted

 

4.04

 

4.84

 

0.69

 

19.8

%

 

 

 

 

 

 

 

 

 

 

Margin analysis:

 

 

 

 

 

 

 

 

 

Operating margin

 

28.9

%

42.7

%

42.7

%

 

 

Net margin

 

29.2

%

40.4

%

40.4

%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average ADS equivalent[1]:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

61,211,098

 

61,661,522

 

61,661,522

 

 

 

Diluted

 

61,966,245

 

61,921,913

 

61,921,913

 

 

 

ADS equivalent outstanding at end of period

 

61,259,417

 

61,698,055

 

61,698,055

 

 

 

 


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

 

11


 

Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

 

 

Six months ended 

 

 

 

June 30,

 

June 30,

 

June 30,

 

 

 

 

 

2019

 

2020

 

2020

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

Revenues from others:

 

 

 

 

 

 

 

 

 

One-time commissions

 

410,580

 

324,270

 

45,897

 

(21.0

)%

Recurring service fees

 

263,640

 

300,710

 

42,563

 

14.1

%

Performance-based income

 

3,145

 

71,824

 

10,166

 

2,183.8

%

Other service fees

 

285,317

 

122,805

 

17,382

 

(57.0

)%

Total revenues from others

 

962,682

 

819,609

 

116,008

 

(14.9

)%

Revenues from funds Gopher manages:

 

 

 

 

 

 

 

 

 

One-time commissions

 

209,012

 

15,180

 

2,149

 

(92.7

)%

Recurring service fees

 

591,734

 

627,624

 

88,834

 

6.1

%

Performance-based income

 

9,368

 

38,941

 

5,512

 

315.7

%

Total revenues from funds Gopher manages

 

810,114

 

681,745

 

96,495

 

(15.8

)%

Total revenues

 

1,772,796

 

1,501,354

 

212,503

 

(15.3

)%

Less: VAT related surcharges 

 

(11,314

)

(7,799

)

(1,104

)

(31.1

)%

Net revenues

 

1,761,482

 

1,493,555

 

211,399

 

(15.2

)%

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(343,166

)

(283,096

)

(40,070

)

(17.5

)%

Others

 

(498,641

)

(412,592

)

(58,399

)

(17.3

)%

Total compensation and benefits

 

(841,807

)

(695,688

)

(98,469

)

(17.4

)%

Selling expenses

 

(170,013

)

(107,162

)

(15,168

)

(37.0

)%

General and administrative expenses 

 

(106,743

)

(132,187

)

(18,710

)

23.8

%

Provision for credit losses

 

(36,010

)

(4,706

)

(666

)

(86.9

)%

Other operating expenses 

 

(101,891

)

(53,332

)

(7,549

)

(47.7

)%

Government grants 

 

49,367

 

75,286

 

10,656

 

52.5

%

Total operating costs and expenses 

 

(1,207,097

)

(917,789

)

(129,906

)

(24.0

)%

Income from operations 

 

554,385

 

575,766

 

81,493

 

3.9

%

Other income:

 

 

 

 

 

 

 

 

 

Interest income 

 

52,348

 

32,700

 

4,628

 

(37.5

)%

Interest expenses

 

(430

)

 

 

N.A.

 

Investment income 

 

37,510

 

22,277

 

3,153

 

(40.6

)%

Other expense (income)

 

(1,618

)

5,156

 

730

 

N.A.

 

Total other income

 

87,810

 

60,133

 

8,511

 

(31.5

)%

Income before taxes and income from equity in affiliates

 

642,195

 

635,899

 

90,004

 

(1.0

)%

Income tax expense

 

(147,114

)

(146,086

)

(20,677

)

(0.7

)%

Income from equity in affiliates

 

46,952

 

55,769

 

7,894

 

18.8

%

Net income

 

542,033

 

545,582

 

77,221

 

0.7

%

Less: net income attributable to non-controlling interests

 

7,273

 

2,916

 

413

 

(59.9

)%

Net income attributable to Noah shareholders 

 

534,760

 

542,666

 

76,808

 

1.5

%

Income per ADS, basic

 

8.78

 

8.80

 

1.25

 

0.2

%

Income per ADS, diluted

 

8.65

 

8.76

 

1.24

 

1.3

%

 

 

 

 

 

 

 

 

 

 

Margin analysis:

 

 

 

 

 

 

 

 

 

Operating margin

 

31.5

%

38.6

%

38.6

%

 

 

Net margin

 

30.8

%

36.5

%

36.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average ADS equivalent[1]:

 

 

 

 

 

 

 

 

 

Basic

 

60,892,670

 

61,640,688

 

61,640,688

 

 

 

Diluted

 

61,933,765

 

61,949,755

 

61,949,755

 

 

 

ADS equivalent outstanding at end of period

 

61,259,417

 

61,698,055

 

61,698,055

 

 

 

 


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

 

12


 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

 

 

Three months ended 

 

 

 

 

 

June 30,

 

June 30,

 

June 30,

 

 

 

 

 

2019

 

2020

 

2020

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Net income

 

254,449

 

301,926

 

42,733

 

18.7

%

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

54,495

 

(7,160

)

(1,013

)

N.A.

 

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

 

2,339

 

775

 

110

 

(66.9

)%

Comprehensive income

 

311,283

 

295,541

 

41,830

 

(5.1

)%

Less: Comprehensive income attributable to non-controlling interests

 

4,199

 

2,326

 

329

 

(44.6

)%

Comprehensive income attributable to Noah shareholders

 

307,084

 

293,215

 

41,501

 

(4.5

)%

 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

 

 

Six months ended 

 

 

 

 

 

June 30,

 

June 30,

 

June 30,

 

 

 

 

 

2019

 

2020

 

2020

 

Change

 

 

 

RMB’000

 

RMB’000

 

USD’000

 

 

 

Net income

 

542,033

 

545,582

 

77,221

 

0.7

%

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

23,637

 

30,159

 

4,269

 

27.6

%

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

 

2,387

 

771

 

109

 

(67.7

)%

Comprehensive income

 

568,057

 

576,512

 

81,599

 

1.5

%

Less: Comprehensive income attributable to non-controlling interests

 

7,416

 

2,952

 

418

 

(60.2

)%

Comprehensive income attributable to Noah shareholders

 

560,641

 

573,560

 

81,181

 

2.3

%

 

13


 

Noah Holdings Limited

Supplemental Information

(unaudited)

 

 

 

As of 

 

 

 

 

 

June 30,
2019

 

June 30,
2020

 

Change

 

Number of registered clients 

 

283,655

 

332,157

 

17.1

%

Number of relationship managers 

 

1,428

 

1,196

 

(16.2

)%

Number of cities in mainland China under coverage 

 

83

 

78

 

(6.0

)%

 

 

 

Three months ended 

 

 

 

 

 

June 30,
2019

 

June 30,
2020

 

Change

 

 

 

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

 

Number of active clients4

 

5,882

 

3,367

 

(42.8

)%

Number of active clients including mutual fund clients

 

9,888

 

14,703

 

48.7

%

Transaction value: 

 

 

 

 

 

 

 

Credit products 

 

9,750

 

232

 

(97.6

)%

Private equity products 

 

7,658

 

2,551

 

(66.7

)%

Public securities products

 

6,021

 

17,971

 

198.5

%

Other products

 

934

 

689

 

(26.2

)%

Total transaction value

 

24,363

 

21,443

 

(12.0

)%

 


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.

 

14


 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

 

 

Three months ended June 30, 2020

 

 

 

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

 

116,719

 

366

 

 

117,085

 

Recurring service fees

 

151,607

 

646

 

 

152,253

 

Performance-based income

 

57,206

 

 

 

57,206

 

Other service fees

 

32,163

 

627

 

23,407

 

56,197

 

Total revenues from others

 

357,695

 

1,639

 

23,407

 

382,741

 

Revenues from funds Gopher manages

 

 

 

 

 

 

 

 

 

One-time commissions

 

9,860

 

571

 

 

10,431

 

Recurring service fees

 

160,202

 

163,972

 

 

324,174

 

Performance-based income

 

17,613

 

16,153

 

 

33,766

 

Total revenues from funds Gopher manages

 

187,675

 

180,696

 

 

368,371

 

Total revenues

 

545,370

 

182,335

 

23,407

 

751,112

 

Less: VAT related surcharges 

 

(2,560

)

(693

)

(421

)

(3,674

)

Net revenues

 

542,810

 

181,642

 

22,986

 

747,438

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(113,044

)

 

 

(113,044

)

Others

 

(129,238

)

(70,395

)

(18,172

)

(217,805

)

Total compensation and benefits

 

(242,282

)

(70,395

)

(18,172

)

(330,849

)

Selling expenses

 

(49,302

)

(8,407

)

(4,913

)

(62,622

)

General and administrative expenses 

 

(51,735

)

(12,994

)

(3,773

)

(68,502

)

Provision for credit losses

 

 

 

(1,897

)

(1,897

)

Other operating expenses

 

(17,796

)

(1,614

)

(1,305

)

(20,715

)

Government grants 

 

14,868

 

12,549

 

29,234

 

56,651

 

Total operating costs and expenses 

 

(346,247

)

(80,861

)

(826

)

(427,934

)

Income from operations

 

196,563

 

100,781

 

22,160

 

319,504

 

 

15


 

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

 

 

Three months ended June 30, 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

 

193,567

 

370

 

 

193,937

 

Recurring service fees

 

129,698

 

1,466

 

 

131,164

 

Performance-based income

 

1,984

 

67

 

 

2,051

 

Other service fees

 

62,032

 

1,193

 

76,715

 

139,940

 

Total revenues from others

 

387,281

 

3,096

 

76,715

 

467,092

 

Revenues from funds Gopher manages

 

 

 

 

 

 

 

 

 

One-time commissions

 

101,104

 

 

 

101,104

 

Recurring service fees

 

140,316

 

163,262

 

 

303,578

 

Performance-based income

 

 

5,610

 

 

5,610

 

Total revenues from funds Gopher manages

 

241,420

 

168,872

 

 

410,292

 

Total revenues

 

628,701

 

171,968

 

76,715

 

877,384

 

Less: VAT related surcharges

 

(3,070

)

(877

)

(1,839

)

(5,786

)

Net revenues

 

625,631

 

171,091

 

74,876

 

871,598

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

Compensation and benefits

 

 

 

 

 

 

 

 

 

Relationship managers

 

(175,851

)

 

(47

)

(175,898

)

Others

 

(162,491

)

(72,697

)

(26,416

)

(261,604

)

Total compensation and benefits

 

(338,342

)

(72,697

)

(26,463

)

(437,502

)

Selling expenses

 

(70,838

)

(4,344

)

(4,375

)

(79,557

)

General and administrative expenses

 

(31,834

)

(11,143

)

(4,765

)

(47,742

)

Provision for credit losses

 

(31,402

)

(2,635

)

(2,424

)

(36,461

)

Other operating expenses

 

(32,179

)

(2,575

)

(16,309

)

(51,063

)

Government grants

 

8,821

 

9,144

 

14,622

 

32,587

 

Total operating costs and expenses

 

(495,774

)

(84,250

)

(39,714

)

(619,738

)

Income from operations

 

129,857

 

86,841

 

35,162

 

251,860

 

 

16


 

Noah Holdings Limited

Supplement Revenue Information by Geography

(unaudited)

 

 

 

Three months ended June 30, 2020

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending
and Other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Mainland China

 

392,284

 

150,489

 

23,407

 

566,180

 

Hong Kong

 

121,176

 

28,052

 

 

149,228

 

Others

 

31,910

 

3,794

 

 

35,704

 

Total revenues

 

545,370

 

182,335

 

23,407

 

751,112

 

 

 

 

Three months ended June 30, 2019

 

 

 

Wealth
Management
Business

 

Asset
Management
Business

 

Lending
and Other
Businesses

 

Total

 

 

 

RMB’000

 

RMB’000

 

RMB’000

 

RMB’000

 

Revenues:

 

 

 

 

 

 

 

 

 

Mainland China

 

420,540

 

145,992

 

76,715

 

643,247

 

Hong Kong

 

178,002

 

23,705

 

 

201,707

 

Others

 

30,159

 

2,271

 

 

32,430

 

Total revenues

 

628,701

 

171,968

 

76,715

 

877,384

 

 

17


 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited) 5

 

 

 

Three months ended

 

 

 

 

 

June 30,

 

June 30,

 

 

 

 

 

2019

 

2020

 

Change

 

 

 

RMB’000

 

RMB’000

 

 

 

Net income attributable to Noah shareholders

 

250,183

 

299,641

 

19.8

%

Adjustment for share-based compensation

 

22,994

 

18,106

 

(21.3

)%

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

 

10,775

 

2,316

 

(78.5

)%

Add: gains from sales of equity securities (realized)

 

4,951

 

 

N.A.

 

Less: tax effect of adjustments

 

3,977

 

8,200

 

106.2

%

Adjusted net income attributable to Noah shareholders (non-GAAP)

 

263,376

 

307,231

 

16.7

%

 

 

 

 

 

 

 

 

Net margin attributable to Noah shareholders

 

28.7

%

40.1

%

 

 

Non-GAAP net margin attributable to Noah shareholders

 

30.2

%

41.1

%

 

 

 

 

 

 

 

 

 

 

Net income attributable to Noah shareholders per ADS, diluted

 

4.04

 

4.84

 

19.8

%

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

 

4.25

 

4.96

 

16.7

%

 


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.

 

18


 

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)

 

 

 

Six months ended 

 

 

 

 

 

June 30, 

 

June 30, 

 

 

 

 

 

2019

 

2020

 

Change 

 

 

 

RMB’000

 

RMB’000

 

 

 

Net income attributable to Noah shareholders

 

534,760

 

542,666

 

1.5

%

Adjustment for share-based compensation

 

52,610

 

36,397

 

(30.8

)%

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

 

19,517

 

8,399

 

(57.0

)%

Add: gains from sales of equity securities (realized)

 

9,836

 

 

N.A.

 

Less: tax effect of adjustments

 

9,691

 

7,548

 

(22.1

)%

Adjusted net income attributable to Noah shareholders (non-GAAP)

 

567,998

 

563,116

 

(0.9

)%

 

 

 

 

 

 

 

 

Net margin attributable to Noah shareholders

 

30.4

%

36.3

%

 

 

Non-GAAP net margin attributable to Noah shareholders

 

32.2

%

37.7

%

 

 

 

 

 

 

 

 

 

 

Net income attributable to Noah shareholders per ADS, diluted

 

8.65

 

8.76

 

1.3

%

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

 

9.18

 

9.09

 

(1.0

)%

 

19




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