6-K 1 d607589d6k.htm FORM 6-K Form 6-K

 

 

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 2018

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

 

By:  

/s/ Shang-yan Chuang

  Shang-yan Chuang
  Chief Financial Officer

Date: August 29, 2018

 

2


EXHIBIT INDEX

Exhibit 99.1—Press Release

 

3


Exhibit 99.1

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2018

SHANGHAI, Aug 28, 2018 — 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 2018.

SECOND QUARTER 2018 FINANCIAL HIGHLIGHTS

 

   

Net revenues for the second quarter of 2018 were RMB797.6 million (US$120.5 million), a 12.8% increase from the corresponding period in 2017.

 

(RMB millions,

except percentages)

   Q2 2017      Q2 2018      YoY Change  

Wealth management

     550.6        556.5        1.1

Asset management

     130.3        195.5        50.0

Other financial services

     26.4        45.6        72.7
  

 

 

    

 

 

    

 

 

 

Total net revenues

     707.3        797.6        12.8
  

 

 

    

 

 

    

 

 

 

 

   

Income from operations for the second quarter of 2018 was RMB221.2 million (US$33.4 million), a 1.4% decrease from the corresponding period in 2017.

 

(RMB millions,

except percentages)

   Q2 2017      Q2 2018      YoY Change  

Wealth management

     185.2        135.7        (26.7 %) 

Asset management

     69.8        100.7        44.3

Other financial services

     (30.8      (15.1      (51.0 %) 
  

 

 

    

 

 

    

 

 

 

Total income from operations

     224.3        221.2        (1.4 %) 
  

 

 

    

 

 

    

 

 

 

 

   

Net income attributable to Noah shareholders for the second quarter of 2018 was RMB179.5 million (US$27.1 million), a 13.3% decrease from the corresponding period in 2017.

 

   

Non-GAAP1 net income attributable to Noah shareholders for the second quarter of 2018 was RMB252.1 million (US$38.1 million), an 11.3% increase from the corresponding period in 2017.

SECOND 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.

 

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.

 

1


   

Total number of registered clients as of June 30, 2018 was 220,601, a 33.9% increase from June 30, 2017.

 

   

Total number of active clients2 during the second quarter of 2018 was 4,461, a 0.5% decrease from June 30, 2017.

 

   

Aggregate value of financial products distributed during the second quarter of 2018 was RMB29.1 billion (US$4.4 billion), an 11.9% decrease from the second quarter of 2017.

 

Product type    Three months ended June 30,  
     2017     2018  
     (RMB in billions, except percentages)  

Fixed income

     23.5        71.3     19.3        66.3

Private equity

     8.3        25.0     6.3        21.6

Secondary market equity

     1.1        3.4     2.8        9.7

Other products

     0.1        0.3     0.7        2.4
  

 

 

    

 

 

   

 

 

    

 

 

 

All products

     33.0        100.0     29.1        100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

   

Average transaction value per active client3 for the second quarter of 2018 was RMB6.5 million (US$1.0 million), an 11.4% decrease from the corresponding period in 2017.

 

   

Coverage network included 287 branches and sub-branches covering 81 cities as of June 30, 2018, up from 205 branches and sub-branches covering 76 cities as of June 30, 2017.

 

   

Number of relationship managers was 1,495 as of June 30, 2018, an 18.7% increase from June 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 June 30, 2018 were RMB161.5 billion (US$24.4 billion), a 2.9% increase from March 31, 2018 and a 16.5% increase from June 30, 2017.

 

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.

 

2


Investment type    As of March 31,
2018
    Asset
Growth
     Asset
Expiration/
Redemption
     As of June 30,
2018
 
     (RMB billions, except percentages)  

Private equity

     91.8        58.5     4.3        2.2        93.9        58.1

Credit

     42.8        27.3     8.1        9.6        41.3        25.6

Real estate

     11.9        7.6     6.5        0.8        17.6        10.9

Secondary market equity4

     6.8        4.3     0.2        2.7        4.3        2.7

Other investments

     3.6        2.3     0.8        —          4.4        2.7
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

All Investments

     156.9        100.0     19.9        15.3        161.5        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, “In the second quarter of 2018, we began to see increased macro-economic and capital market volatility which affected investment sentiment in China. Our focus will be on investing further in client education, enhancing our professional capabilities, diversifying our services and products, and growing our global footprints. In the short term, increased regulatory scrutiny may slow the overall growth rate of the industry, and as a result, we are closely monitoring any development trends affecting the industry generally or our business in particular. In the long run, however, we believe that the whole market will benefit from the normalized regulation and leading companies like Noah will stand out eventually.”

SECOND QUARTER 2018 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2018 were RMB797.6 million (US$120.5 million), a 12.8% increase from the corresponding period in 2017, primarily driven by increased recurring service fee revenues and performance-based income, and partially offset by decreased one-time commissions.

 

   

Wealth Management Business

 

   

Net revenues from one-time commissions for the second quarter of 2018 were RMB233.0 million (US$35.2 million), a 21.7% decrease from the corresponding period in 2017, primarily due to a decline in transaction value.

 

   

Net revenues from recurring service fees for the second quarter of 2018 were RMB284.2 million (US$43.0 million), a 35.8% 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 second quarter of 2018 were RMB11.8 million (US$1.8 million), compared with RMB22.0 million in the corresponding period of 2017, primarily due to a decrease in performance-based income from secondary market equity products.

 

4 

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

 

3


   

Net revenues from other service fees for the second quarter of 2018 were RMB27.5 million (US$4.2 million), an increase from RMB21.6 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 second quarter of 2018 were RMB165.1 million (US$24.9 million), a 28.7% increase from the corresponding period in 2017. The increase was primarily due to the increase in assets under management.

 

   

Net revenues from performance-based income for the second quarter of 2018 were RMB27.3 million (US$4.1 million), compared with RMB1.5 million in the corresponding period of 2017, primarily due to an increase in performance-based income from real estate products.

 

   

Other Financial Services Business

 

   

Net revenues for the second quarter of 2018 were RMB45.6 million (US$6.9 million), a 72.7% 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 second quarter of 2018 were RMB576.4 million (US$87.1 million), a 19.3% increase from the corresponding period in 2017. Operating costs and expenses primarily consisted of compensation and benefits of RMB390.3 million (US$59.0 million), selling expenses of RMB120.5 million (US$18.2 million), general and administrative expenses of RMB68.5 million (US$10.4 million) and other operating expenses of RMB28.6 million (US$4.3 million).

 

   

Operating costs and expenses for the wealth management business for the second quarter of 2018 were RMB420.8 million (US$63.6 million), a 15.2% increase from the corresponding period in 2017, primarily due to an increase in compensation and benefits and marketing expenses.

 

   

Operating costs and expenses for the asset management business for the second quarter of 2018 were RMB94.8 million (US$14.3 million), a 56.6% 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 second quarter of 2018 were RMB60.8 million (US$9.2 million), a 6.4% increase from the corresponding period in 2017.

Operating Margin

Operating margin for the second quarter of 2018 was 27.7%, a decrease from 31.7% for the corresponding period in 2017.

 

   

Operating margin for the wealth management business for the second quarter of 2018 was 24.4%, compared with 33.6% for the corresponding period in 2017.

 

   

Operating margin for the asset management business for the second quarter of 2018 was 51.5%, compared with 53.5% for the corresponding period in 2017.

 

   

Operating loss for the other financial services business for the second quarter of 2018 was RMB15.1 million (US$2.3 million), improving from a loss of RMB30.8 million for the corresponding period in 2017.

 

4


Investment Income

Investment income for the second quarter of 2018 was RMB16.8 million (US$2.5 million), compared with RMB10.9 million for the corresponding period in 2017. The increase was primarily due to the gain from disposal of equity securities, partially offset by a loss from 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 second quarter of 2018 were RMB57.7 million (US$8.7 million), a 4.3% decrease from the corresponding period in 2017, primarily due to lower taxable income.

Net Income

 

   

Net Income

 

   

Net income for the second quarter of 2018 was RMB186.4 million (US$28.2 million), a 9.5% decrease from the corresponding period in 2017.

 

   

Net margin for the second quarter of 2018 was 23.4%, down from 29.1% for the corresponding period in 2017.

 

   

Net income attributable to Noah shareholders for the second quarter of 2018 was RMB179.5 million (US$27.1 million), a 13.3% decrease from the corresponding period in 2017.

 

   

Net margin attributable to Noah shareholders for the second quarter of 2018 was 22.5%, down from 29.3% for the corresponding period in 2017.

 

   

Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2018 was RMB3.13 (US$0.47) and RMB3.00 (US$0.45), respectively, down from RMB3.67 and RMB3.52 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 second quarter of 2018 was RMB252.1 million (US$38.1 million), an 11.3% increase from the corresponding period in 2017.

 

   

Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2018 was 31.6%, down from 32.0% for the corresponding period in 2017.

 

   

Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2018 was RMB4.20 (US$0.63), up from RMB3.84 for the corresponding period in 2017.

Balance Sheet and Cash Flow

As of June 30, 2018, the Company had RMB2,094.8 million (US$316.6 million) in cash and cash equivalents, compared with RMB2,003.5 million as of June 30, 2017 and RMB2,151.4 million as of March 31, 2018.

Net cash outflow from the Company’s operating activities during the second quarter of 2018 was RMB302.7 million (US$45.7 million), compared to net cash inflow RMB72.8 million in the corresponding period in 2017. The difference was mainly due to the temporary increase of other current assets for the financial leasing business.

Net cash inflow from the Company’s investing activities during the second quarter of 2018 was RMB153.0 million (US$23.1 million), compared to net cash outflow RMB671.2 million in the corresponding period in 2017, primarily due to the maturity of certain loans in the lending business.

 

5


Net cash inflow from the Company’s financing activities was RMB54.1 million (US$8.2 million) in the second quarter of 2018, compared to net cash inflow RMB4.2 million in the corresponding period in 2017, driven by more proceeds received from the issuance of ordinary shares upon exercise of stock options.

On July 8, 2017, the Company’s board of directors authorized a share repurchase program of up to US$50.0 million worth of its issued and outstanding ADSs over the course of one year, which expired on July 7, 2018. The Company had not repurchased any ADSs under this program.

OTHER COMPANY DEVELOPMENTS

The Company also announced the promotion of Ms. Yang Gao to the position of Chief Operating Officer, replacing Mr. Harry Tsai, who is leaving for personal reasons, effective August 31, 2018.

Ms. Gao has more than 13 years of experience in financial and operating management. She joined Noah in June 2011 and serves as the general manager of the public affairs department of the Company. From 2015 to 2018, she was the chief operating officer of Noah’s wealth management business. Prior to joining Noah, Ms. Gao worked with the taxation management department of Shanda Group for seven years. Ms. Gao received her bachelor’s degree from Shanghai University of Finance and Economics.

Ms. Jingbo Wang, Chairlady and CEO of Noah, commented, “We are very pleased to welcome Ms. Gao to Noah’s senior management team. Ms. Gao has been with the Company for more than seven years and has extensive experience in financial and corporate operations. At the same time, we highly appreciate Harry’s long tenure with Noah and his hard work over the years, and wish him all the best in the future.”

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 second quarter 2018 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

 

Conference call details

 

Date/Time:   

Tuesday, Aug 28, 2018 at 8:00 p.m., U.S. Eastern Time

Wednesday, Aug 29, 2018 at 8:00 a.m., Hong Kong Time

Dial in details:   
- United States Toll Free    +1-866-311-7654
- Mainland China Toll Free    4001-201203
- Hong Kong Toll Free    800-905-945
- International    +1-412-317-5227
Conference Title:    Noah Holdings Limited Second Quarter 2018 Earnings Call
Participant Password:    Noah Holdings

A telephone replay will be available starting one hour after the end of the conference call until September 4, 2018 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10123267.

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.

 

6


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 second quarter of 2018, Noah distributed RMB29.1 billion (US$4.4 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB161.5 billion (US$24.4 billion) as of June 30, 2018.

 

7


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 1,495 relationship managers across 287 branches and sub-branches in 81 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 220,601 registered clients as of June 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 second quarter of 2018 ended June 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 RMB6.6171 to US$1.00, the effective noon buying rate for June 29, 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

 

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

8


Noah Holdings Limited

Condensed Consolidated Balance Sheets

(unaudited)

 

            As of         
     March 31,
2018
     June 30,
2018
     June 30,
2018
 
     RMB’000      RMB’000      USD’000  

Assets

        

Current assets:

        

Cash and cash equivalents

     2,151,447        2,094,773        316,570  

Short-term investments (including short-term investments measured at fair value of RMB86,740 thousands and RMB163,043 thousands, as of March 31, 2018 and June 30, 2018, respectively)

     246,740        224,043        33,858  

Accounts receivable and contract assets, net of allowance for doubtful accounts of nil as of March 31, 2018 and June 30, 2018

     228,770        243,098        36,738  

Loans receivable

     827,737        601,952        90,969  

Amounts due from related parties

     653,788        563,286        85,126  

Loans receivable from factoring business

     71,403        68,358        10,331  

Other current assets

     247,256        483,894        73,128  
  

 

 

    

 

 

    

 

 

 

Total current assets

     4,427,141        4,279,404        646,720  

Long-term investments (including long-term investments measured at fair value of RMB835,235 thousands and RMB771,594 thousands, as of March 31, 2018 and June 30, 2018, respectively)

     890,735        806,094        121,820  

Investment in affiliates

     1,049,353        1,176,750        177,835  

Property and equipment, net

     299,415        295,786        44,700  

Non-current deferred tax assets

     72,357        97,296        14,704  

Other non-current assets

     114,226        77,196        11,666  
  

 

 

    

 

 

    

 

 

 

Total Assets

     6,853,227        6,732,526        1,017,445  
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

        

Current liabilities:

        

Accrued payroll and welfare expenses

     563,715        479,654        72,487  

Income tax payable

     82,394        18,484        2,793  

Amounts due to related parties

     280        336        51  

Deferred revenues

     167,768        146,462        22,134  

Loans payable from factoring business

     302        35,003        5,290  

Other current liabilities

     581,379        383,256        57,919  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,395,838        1,063,195        160,674  

Non-current deferred tax liabilities

     51,810        50,172        7,582  

Convertible notes

     470,445        330,855        50,000  

Other non-current liabilities

     112,839        112,485        16,999  
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     2,030,932        1,556,707        235,255  
  

 

 

    

 

 

    

 

 

 

Equity

     4,822,295        5,175,819        782,190  
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     6,853,227        6,732,526        1,017,445  
  

 

 

    

 

 

    

 

 

 

 

9


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,
2017
    June 30,
2018
    June 30,
2018
    Change  
     RMB’000     RMB’000     USD’000        

Revenues:

        

Revenues from others[1]:

        

One-time commissions

     123,321       161,791       24,450       31.2

Recurring service fees

     144,245       167,196       25,267       15.9

Performance-based income

     16,179       10,082       1,524       (37.7 %) 

Other service fees

     48,608       76,883       11,619       58.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     332,353       415,952       62,860       25.2

Revenues from funds Gopher manages[1]:

        

One-time commissions

     177,333       72,805       11,003       (58.9 %) 

Recurring service fees

     195,891       284,389       42,978       45.2

Performance-based income

     7,570       29,213       4,415       285.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     380,794       386,407       58,396       1.5

Total revenues

     713,147       802,359       121,256       12.5

Less: business taxes and related surcharges

     (5,836     (4,757     (718     (18.5 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     707,311       797,602       120,538       12.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (140,078     (168,429     (25,454     20.2

Performance fee compensation

     —         (5,200     (786     N.A.  

Other compensations

     (190,895     (216,635     (32,739     13.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (330,973     (390,264     (58,979     17.9

Selling expenses

     (71,376     (120,472     (18,206     68.8

General and administrative expenses

     (49,231     (68,510     (10,353     39.2

Other operating expenses

     (41,268     (28,589     (4,320     (30.7 %) 

Government grants

     9,791       31,432       4,750       221.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (483,057     (576,403     (87,108     19.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     224,254       221,199       33,430       (1.4 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     10,440       18,633       2,816       78.5

Interest expenses

     (4,894     (3,313     (501     (32.3 %) 

Investment income

     10,943       16,754       2,532       53.1

Other (expense) income

     2,055       (21,357     (3,228     (1139.3 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     18,544       10,717       1,619       (42.2 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and income from equity in affiliates

     242,798       231,916       35,049       (4.5 %) 

Income tax expense

     (60,244     (57,651     (8,712     (4.3 %) 

Income from equity in affiliates

     23,308       12,087       1,827       (48.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     205,862       186,352       28,164       (9.5 %) 

Less: net loss attributable to non-controlling interests

     (4,070     6,867       1,038       (268.7 %) 

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

     2,891       —         —         (100.0 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah shareholders

     207,041       179,485       27,126       (13.3 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per ADS, basic

     3.67       3.13       0.47       (14.7 %) 

Income per ADS, diluted

     3.52       3.00       0.45       (14.8 %) 

Margin analysis:

        

Operating margin

     31.7     27.7     27.7  

Net margin

     29.1     23.4     23.4  

Weighted average ADS equivalent[2]:

        

Basic

     56,461,612       57,295,516       57,295,516    

Diluted

     60,205,429       60,747,298       60,747,298    

ADS equivalent outstanding at end of period

     56,547,380       58,498,187       58,498,187    

 

[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.

 

10


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,
2017
    June 30,
2018
    June 30,
2018
    Change  
     RMB’000     RMB’000     USD’000        

Revenues:

        

Revenues from others[1]:

        

One-time commissions

     323,108       381,332       57,628       18.0

Recurring service fees

     289,274       311,128       47,019       7.6

Performance-based income

     28,729       30,739       4,645       7.0

Other service fees

     81,849       136,872       20,685       67.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     722,960       860,071       129,977       19.0

Revenues from funds Gopher manages[1]:

        

One-time commissions

     321,889       171,189       25,871       (46.8 %) 

Recurring service fees

     377,781       538,456       81,373       42.5

Performance-based income

     7,649       68,261       10,316       792.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     707,319       777,906       117,560       10.0

Total revenues

     1,430,279       1,637,977       247,537       14.5

Less: business taxes and related surcharges

     (9,798     (9,456     (1,429     (3.5 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,420,481       1,628,521       246,108       14.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (290,391     (327,130     (49,437     12.7

Performance fee compensation

     —         (11,400     (1,723     N.A.  

Other compensations

     (381,164     (412,447     (62,330     8.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (671,555     (750,977     (113,490     11.8

Selling expenses

     (131,979     (226,731     (34,264     71.8

General and administrative expenses

     (108,869     (124,439     (18,806     14.3

Other operating expenses

     (70,714     (66,552     (10,058     (5.9 %) 

Government grants

     43,723       35,920       5,428       (17.8 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (939,394     (1,132,779     (171,190     20.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     481,087       495,742       74,918       3.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     19,148       41,500       6,272       116.7

Interest expenses

     (9,807     (10,182     (1,539     3.8

Investment income

     21,089       58,886       8,899       179.2

Other (expense) income

     3,192       (20,194     (3,052     (732.6 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     33,622       70,010       10,580       108.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and income from equity in affiliates

     514,709       565,752       85,498       9.9

Income tax expense

     (122,159     (131,313     (19,844     7.5

Income from equity in affiliates

     29,034       12,739       1,925       (56.1 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     421,584       447,178       67,579       6.1

Less: net loss attributable to non-controlling interests

     (9,270     (772     (117     (91.7 %) 

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

     6,816       —         —         (100.0 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah shareholders

     424,038       447,950       67,696       5.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per ADS, basic

     7.51       7.82       1.18       4.1

Income per ADS, diluted

     7.04       7.37       1.11       4.7

Margin analysis:

        

Operating margin

     33.9     30.4     30.4  

Net margin

     29.7     27.5     27.5  

Weighted average ADS equivalent[2]:

        

Basic

     56,461,612       57,295,516       57,295,516    

Diluted

     60,205,429       60,747,298       60,747,298    

ADS equivalent outstanding at end of period

     56,547,380       58,498,187       58,498,187    

 

[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.

 

11


Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

     Three months ended        
     June 30,
2017
    June 30,
2018
    June 30,
2018
    Change  
     RMB’000     RMB’000     USD’000        

Net income

     205,862       186,352       28,164       (9.5 %) 

Other comprehensive income, net of tax:

        

Foreign currency translation adjustments

     (6,321     52,539       7,940       (931.2 %) 

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

     2,606       (2,469     (373     (194.7 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     202,147       236,422       35,731       17.0

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

     (4,029     6,835       1,033       (269.6 %) 

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

     2,891       —         —         (100.0 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Noah shareholders

     203,285       229,587       34,698       12.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Noah Holdings Limited

Condensed Comprehensive Income Statements

(unaudited)

 

     Six months ended        
     June 30,
2017
    June 30,
2018
    June 30,
2018
    Change  
     RMB’000     RMB’000     USD’000        

Net income

     421,584       447,178       67,579       6.1

Other comprehensive income, net of tax:

        

Foreign currency translation adjustments

     (10,466     17,676       2,671       (268.9 %) 

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

     4,121       (1,093     (165     (126.5 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     415,239       463,761       70,085       11.7

Less: Comprehensive loss attributable to non-controlling interests

     (9,345     (744     (112     (92.0 %) 

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

     6,816       —         —         (100.0 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Noah shareholders

     417,768       464,505       70,197       11.2
  

 

 

   

 

 

   

 

 

   

 

 

 

 

12


Noah Holdings Limited

Supplemental Information

(unaudited)

 

     As of         
     June 30, 2017      June 30, 2018      Change  

Number of registered clients

     164,728        220,601        33.9

Number of relationship managers

     1,259        1,495        18.7

Number of cities under coverage

     76        81        6.6
     Three months ended         
     June 30, 2017      June 30, 2018      Change  
     (in millions of RMB, except number of active clients and
percentages)
 

Number of active clients

     4,484        4,461        (0.5 %) 

Transaction value:

        

Fixed income products

     23,505        19,252        (18.1 %) 

Private equity products

     8,252        6,287        (23.8 %) 

Secondary market equity products

     1,111        2,835        155.2

Other products

     94        678        621.3
  

 

 

    

 

 

    

 

 

 

Total transaction value

     32,962        29,052        (11.9 %) 

Average transaction value per active client

     7.35        6.51        (11.4 %) 

 

13


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended June 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

     161,421       370       —         161,791  

Recurring service fees

     158,469       8,727       —         167,196  

Performance-based income

     10,082       —         —         10,082  

Other service fees

     27,613       2,735       46,535       76,883  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     357,585       11,832       46,535       415,952  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from funds Gopher manages

        

One-time commissions

     72,805       —         —         72,805  

Recurring service fees

     127,264       157,125       —         284,389  

Performance-based income

     1,739       27,474       —         29,213  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     201,808       184,599       —         386,407  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     559,393       196,431       46,535       802,359  

Less: business taxes and related surcharges

     (2,932     (924     (901     (4,757
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     556,461       195,507       45,634       797,602  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (167,533     —         (896     (168,429

Performance fee compensation

     —         (5,200     —         (5,200

Other compensations

     (121,290     (63,723     (31,622     (216,635
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (288,823     (68,923     (32,518     (390,264

Selling expenses

     (110,686     (5,361     (4,425     (120,472

General and administrative expenses

     (41,550     (19,235     (7,725     (68,510

Other operating expenses

     (7,745     (4,725     (16,119     (28,589

Government grants

     27,994       3,418       20       31,432  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (420,810     (94,826     (60,767     (576,403
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     135,651       100,681       (15,133     221,199  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

14


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

 

     Three months ended June 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

     122,955       366       —         123,321  

Recurring service fees

     136,182       8,063       —         144,245  

Performance-based income

     15,015       1,164       —         16,179  

Other service fees

     21,842       94       26,672       48,608  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from others

     295,994       9,687       26,672       332,353  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenues from funds Gopher manages

        

One-time commissions

     177,333       —         —         177,333  

Recurring service fees

     75,045       120,846       —         195,891  

Performance-based income

     7,194       376       —         7,570  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues from funds Gopher manages

     259,572       121,222       —         380,794  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     555,566       130,909       26,672       713,147  

Less: business taxes and related surcharges

     (4,963     (580     (293     (5,836
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     550,603       130,329       26,379       707,311  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (138,330     (1     (1,747     (140,078

Other compensations

     (112,454     (44,687     (33,754     (190,895
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (250,784     (44,688     (35,501     (330,973

Selling expenses

     (66,919     (1,432     (3,025     (71,376

General and administrative expenses

     (29,911     (11,168     (8,152     (49,231

Other operating expenses

     (27,494     (3,314     (10,460     (41,268

Government grants

     9,731       60       —         9,791  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (365,377     (60,542     (57,138     (483,057
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     185,226       69,787       (30,759     224,254  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

15


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,
2017
    June 30,
2018
    Change  
     RMB’000     RMB’000        

Net income attributable to Noah shareholders

     207,041       179,485       (13.3 %) 

Adjustment for share-based compensation related to:

      

Share options

     12,622       9,724       (23.0 %) 

Restricted shares

     6,849       10,517       53.6

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

     —         (49,063     N.A  

Add: Gains (loss) from sales of equity securities

     —         3,338       N.A  
  

 

 

   

 

 

   

 

 

 

Non-GAAP net income attributable to Noah shareholders*

     226,512       252,127       11.3

Net margin attributable to Noah shareholders

     29.3     22.5  

Non-GAAP net margin attributable to Noah shareholders*

     32.0     31.6  

Net income attributable to Noah shareholders per ADS, diluted

     3.52       3.00       (14.8 %) 

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

     3.84       4.20       9.4

 

*

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.

 

16


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,
2017
    June 30,
2018
    Change  
     RMB’000     RMB’000        

Net income attributable to Noah shareholders

     424,038       447,950       5.6

Adjustment for share-based compensation related to:

      

Share options

     25,153       21,934       (12.8 %) 

Restricted shares

     14,560       21,008       44.3

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

     —         (14,275     N.A  

Add: Gains (loss) from sales of equity securities

     —         3,338       N.A  
  

 

 

   

 

 

   

 

 

 

Non-GAAP net income attributable to Noah shareholders*

     463,751       508,505       9.7

Net margin attributable to Noah shareholders

     29.9     27.5  

Non-GAAP net margin attributable to Noah shareholders*

     32.6     31.2  

Net income attributable to Noah shareholders per ADS, diluted

     7.04       7.37       4.7

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

     7.70       8.37       8.7

 

*

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

 

17