NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2023

Rhea-AI Summary

Noah Holdings Limited announces unaudited financial results for Q2 2023

Positive

• Net revenues increased by 27.6% YoY to RMB941.8 million ($129.9 million)
• Income from operations increased by 8.1% YoY to RMB349.4 million ($48.2 million)
• Net income attributable to Noah shareholders decreased by 9.6% YoY to RMB315.4 million ($43.5 million)

Negative

• Asset management net revenues decreased by 12.8% YoY to RMB183.4 million ($25.3 million)

SHANGHAI, Aug. 28, 2023 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH and HKEX: 6686), a leading and pioneer wealth management service provider in China offering comprehensive one-stop advisory services on global investment and asset allocation primarily for high net worth investors, today announced its unaudited financial results for the second quarter of 2023.

SECOND QUARTER 2023 FINANCIAL HIGHLIGHTS

• Net revenues for the second quarter of 2023 were RMB941.8 million (US$129.9 million), a 27.6% increase from the corresponding period in 2022, and a 17.2% increase from the first quarter of 2023, mainly due to an increase in distribution of insurance products.

 

(RMB millions, except percentages)	Q2 2022			Q2 2023			YoY Change
Wealth management	508.6			745.3			46.5 %
Asset management	210.3			183.4			(12.8 %)
Other businesses	19.2			13.1			(31.6 %)
Total net revenues	738.1			941.8			27.6 %

 

• Income from operations for the second quarter of 2023 was RMB349.4 million (US$48.2 million), an 8.1% increase from the corresponding period in 2022, mainly due to a 27.6% increase in net revenue and partially offset by a 42.7% increase in total operating cost and expenses as less expenses incurred in last second quarter due to various pandemic restrictions. Income from operations increased by 25.3% compared with the first quarter of 2023, mainly due to a 17.2% increase in net revenues and various cost control measures implemented in the second quarter of 2023.

 

(RMB millions, except percentages)	Q2 2022			Q2 2023			YoY Change
Wealth management	193.8			300.2			54.9 %
Asset management	142.6			80.9			(43.3 %)
Other businesses	(13.3)			(31.7)			138.3 %
Total income from operations	323.1			349.4			8.1 %

 

• Net income attributable to Noah shareholders for the second quarter of 2023 was RMB315.4 million (US$43.5 million), a 9.6% decrease from the corresponding period in 2022, mainly due to a 97.7% decrease in income from equity in affiliates as we recorded a gain of RMB69.2 million from the second quarter of 2022, resulting from net book value increases in certain offshore private equity funds managed by Gopher. Net income attributable to Noah shareholders increased by 29.2% compared with the first quarter of 2023, mainly due to a 25.3% increase in income from operations and a 69.7% increase in other income.
  
  
• Non-GAAP^[1] net income attributable to Noah shareholders for the second quarter of 2023 was RMB313.1 million (US$43.2 million), an 11.8% decrease from the corresponding period in 2022, and a 30.7% increase from the first quarter of 2023.

 

[1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and net of relevant tax impact, if any. See "Reconciliation of GAAP to Non-GAAP Results" at the end of this press release.

SECOND QUARTER 2023 OPERATIONAL UPDATES

Wealth Management Business

We offer investment products and provide value-added services to high net worth investors in China and overseas for our wealth management business. We primarily distribute private equity, private secondary, mutual funds and other products denominated in RMB and other currencies.

• Total number of registered clients as of June 30, 2023 was 446,557, a 6.7% increase from June 30, 2022, and a 1.3% increase from March 31, 2023.
• Total number of active clients^[2] who transacted with us during the second quarter of 2023 was 11,548, a 10.2% decrease from the second quarter of 2022, and a 2.8% increase from the first quarter of 2023.
• Aggregate value of investment products distributed during the second quarter of 2023 was RMB18.4 billion (US$2.5 billion), a 4.7% decrease from the second quarter of 2022, mainly due to an 84.2% decrease in distribution of private equity products, as we maintain a cautious approach to fundraising and investment allocation for our domestic private equity investments, and partially offset by a 79.3% increase in distribution of private secondary products. The aggregate value of investment products distributed increased by 9.6% from the first quarter of 2023, mainly due to increases in the distribution of mutual fund products.

 

	Three months ended June 30,
	2022				2023
Product type	(RMB in billions, except percentages)
Mutual fund products	12.2		63.1 %		12.0		65.4 %
Private secondary products	2.4		12.4 %		4.3		23.3 %
Private equity products	3.9		20.3 %		0.6		3.3 %
Other products[3]	0.8		4.2 %		1.5		8.0 %
All products	19.3		100.0 %		18.4		100.0 %

 

• Coverage network in mainland China covered 63 cities as of June 30, 2023, compared with 79 cities as of June 30, 2022 and 68 cities as of March 31, 2023, as we continue to streamline our domestic coverages.
  
  
• Number of relationship managers was 1,375 as of June 30, 2023, a 9.6% increase from June 30, 2022, and a 3.6% increase from March 31, 2023. Among which, we had 56 overseas relationship managers as of June 30, 2023, a 100.0% increase from March 31, 2023.

 

[2]  "Active clients" for a given period refers to registered investors who purchase investment products distributed or receive services provided by us during that given period.

[3]  "Other products" refers to other investment products, which includes insurance products, multi-strategies products and others.

Asset Management Business

Our asset management business is conducted through Gopher Asset Management Co., Ltd. ("Gopher Asset Management"), a leading multi-asset manager in China with overseas offices in Hong Kong and the United States. Gopher Asset Management develops and manages assets ranging from private equity, public securities, real estate, multi-strategy and other investments denominated in RMB and other currencies.

Total assets under management as of June 30, 2023 were RMB156.9 billion (US$21.6 billion), a 0.5% decrease from March 31, 2023 and a 0.9% increase from June 30, 2022.

Investment type	As of  March 31,  2023				Growth		Distribution/  Redemption		As of June 30,  2023
	(RMB billions, except percentages)
Private equity	133.3		84.6 %		0.6		1.0		132.9		84.7 %
Public securities[4]	11.3		7.2 %		1.8		1.5		11.6		7.4 %
Real estate	6.9		4.3 %		-		0.3		6.6		4.2 %
Multi-strategies	4.7		3.0 %		-		0.3		4.4		2.8 %
Others	1.4		0.9 %		-		-		1.4		0.9 %
All Investments	157.6		100.0 %		2.4		3.1		156.9		100.0 %

Other Businesses

Our other businesses mainly aim to provide more comprehensive services and investment products to our clients.

Ms. Jingbo Wang, co-founder and CEO of Noah, said, "For the first half of 2023, I am happy to see a 13.8% period-to-period increase in net revenues, driven by a 104.1% growth in revenues generated from our overseas business, accounting for 41.0% of the group's net revenues compared to 22.8% in the first half of 2022, as we continue to successfully execute our globalization strategy. During the second quarter, we were glad to launch the grand opening of our new headquarter, Noah Wealth Centre, which provides a client-centric private banking experience for Noah's global clients. Since 2019, we winded down all of our domestic non-standardized single counterparty private credit products, including domestic residential real estate funds, which was proven to have effectively safeguarded our clients' wealth amidst the recent challenges faced by this asset class. Our continued devotion in strengthening investment research capabilities and shield our clients' hard-earned capital through optimized asset allocation advice is what distinguish us as a trusted advisor for our clients." 

SECOND QUARTER 2023 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2023 were RMB941.8 million (US$129.9 million), a 27.6% increase from the corresponding period in 2022, primarily due to an increase in distribution of insurance products.

• Wealth Management Business
   
• Net revenues from one-time commissions for the second quarter of 2023 were RMB403.9 million (US$55.7 million), a 127.2% increase from the corresponding period in 2022, primarily due to an increase in distribution of insurance products.
  
  
• Net revenues from recurring service fees for the second quarter of 2023 were RMB269.3 million (US$37.1 million), a 7.3% decrease from the corresponding period in 2022, as less recurring service fees generated from private secondary products.
  
  
• Net revenues from performance-based income for the second quarter of 2023 were RMB21.4 million (US$2.9 million), a 61.4% increase from the corresponding period of 2022, primarily due to more performance-based income from offshore private equity products.
  
  
• Net revenues from other service fees for the second quarter of 2023 were RMB50.7 million (US$7.0 million), an 86.3% increase from the corresponding period in 2022, primarily due to more value-added services we offered to our high net worth clients.
  
  
• Asset Management Business
  
  
• Net revenues from recurring service fees for the second quarter of 2023 were RMB176.8 million (US$24.4 million), a 4.9% increase from the corresponding period in 2022 due to increase in assets under management.
  
  
• Net revenues from performance-based income for the second quarter of 2023 were RMB6.5 million (US$0.9 million), compared with RMB12.6 million in the corresponding period of 2022. The decrease was primarily due to less performance-based income realized from private equity product.
  
  
• Other Businesses
  
  
• Net revenues for the second quarter of 2023 were RMB13.1 million (US$1.8 million), compared with RMB19.2 million for the corresponding period in 2022.

 

[4]  The asset distribution/redemption of public securities also includes market appreciation or depreciation.

Operating Costs and Expenses

Operating costs and expenses for the second quarter of 2023 were RMB592.3 million (US$81.7 million), a 42.7% increase from the corresponding period in 2022. Operating costs and expenses primarily consisted of compensation and benefits of RMB385.1 million (US$53.1 million), selling expenses of RMB112.0 million (US$15.4 million), general and administrative expenses of RMB64.0 million (US$8.8 million), provision of credit losses of RMB0.2 million and other operating expenses of RMB37.1 million (US$5.1 million).

• Operating costs and expenses for the wealth management business for the second quarter of 2023 were RMB445.1 million (US$61.4 million), a 41.4% increase from the corresponding period in 2022, primarily due to an increase in compensation and benefits, selling expenses and general and administrative expenses, as less expenses incurred in last second quarter due to various pandemic restrictions.
  
  
• Operating costs and expenses for the asset management business for the second quarter of 2023 were RMB102.5 million (US$14.1 million), a 51.2% increase from the corresponding period in 2022, primarily due to decreased selling and general and administrative expenses due to various pandemic restrictions for the corresponding period in 2022.
  
  
• Operating costs and expenses for other businesses for the second quarter of 2023 were RMB44.8 million (US$6.2 million), compared with RMB32.4 million from the corresponding period in 2022, mainly due to increased depreciation expenses as we moved into our new headquarter premises in Shanghai in May.

Operating Margin

Operating margin for the second quarter of 2023 was 37.1%, decreased from 43.8% for the corresponding period in 2022.

• Operating margin for the wealth management business for the second quarter of 2023 was 40.3%, compared with 38.1%% for the corresponding period in 2022.
  
  
• Operating margin for the asset management business for the second quarter of 2023 was 44.1%, compared with 67.8% for the corresponding period in 2022.
  
  
• Loss from operation for other businesses for the second quarter of 2023 was RMB31.7 million (US$4.4 million), compared with an operating loss of RMB13.3 million for the corresponding period in 2022.

Investment Income/loss

Investment loss for the second quarter of 2023 was RMB4.0 million (US$0.5 million), compared with investment income RMB5.2 million for the corresponding period in 2022.

Income Tax Expenses

Income tax expenses for the second quarter of 2023 were RMB90.2 million (US$12.4 million), a 15.4% increase from the corresponding period in 2022, primarily due to more taxable income compared with the second quarter of 2022. 

Income from Equity in Affiliates

Income from equity in affiliates for the second quarter of 2023 was RMB1.6 million (US$0.2 million), a 97.7% decrease from the corresponding period in 2022, as we recorded a gain of RMB69.2 million from the second quarter of 2022, resulting from net book value increases in certain offshore private equity funds managed by Gopher.

Net Income

• Net Income
  
  
• Net income for the second quarter of 2023 was RMB312.3 million (US$43.1 million), a 10.5% decrease from the corresponding period in 2022.
  
  
• Net margin for the second quarter of 2023 was 33.2%, down from 47.3% for the corresponding period in 2022.
  
  
• Net income attributable to Noah shareholders for the second quarter of 2023 was RMB315.4 million (US$43.5 million), a 9.6% decrease from the corresponding period in 2022.
  
  
• Net margin attributable to Noah shareholders for the second quarter of 2023 was 33.5%, down from 47.3% for the corresponding period in 2022.
  
  
• Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2023 was RMB4.54 (US$0.63) and RMB4.54 (US$0.63), respectively, down from RMB5.19 and RMB5.18 respectively, for the corresponding period in 2022.
  
  
• Non-GAAP Net Income Attributable to Noah Shareholders 
  
  
• Non-GAAP net income attributable to Noah shareholders for the second quarter of 2023 was RMB313.1 million (US$43.2 million), an 11.8% decrease from the corresponding period in 2022.
  
  
• Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2023 was 33.2%, compared with 48.1% for the corresponding period in 2022.
  
  
• Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2023 was RMB4.51 (US$0.62), down from RMB5.28 for the corresponding period in 2022.

Balance Sheet and Cash Flow

As of June 30, 2023, the Company had RMB4,740.4 million (US$653.7 million) in cash and cash equivalents, compared with RMB 4,713.2 million as of March 31, 2023 and RMB3,608.0 million as of June 30, 2022.

Net cash inflow from the Company's operating activities during the second quarter of 2023 was RMB176.4 million (US$24.3 million), primarily due to net income earned for the second quarter of 2023.

Net cash outflow from the Company's investing activities during the second quarter of 2023 was RMB329.2 million (US$45.4 million), primarily due to several investments made.

Net cash inflow from the Company's financing activities was RMB87.0 million (US$12.0 million) in the second quarter of 2023, primarily due to consolidation of one investment fund that Gopher manages and accounts for those limited partners' capital contributions as financing activity.

CONFERENCE CALL

Following the announcement of the Q2 and Interim Results, the Company's senior management will host a combined English and Chinese language earnings conference call to discuss its Q2 and Interim Results and recent business activities. The conference call may be accessed with the following details:

Dial-in details:
Conference Title:	Noah Holdings 2Q23 Earnings Conference Call
Date/Time:	Monday, August 28, 2023 at 8:00 p.m., U.S. Eastern Time Tuesday, August 29, 2023 at 8:00 a.m., Hong Kong Time
Dial in:
- Hong Kong Toll Free	800-963-976
- United States Toll Free	+1-888-317-6003
- Mainland China Toll Free	4001-206-115
- International	+1-412-317-6061
Participant Password:	7932172

A telephone replay will be available starting approximately one hour after the end of the conference call until September 4, 2023 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll) with the access code 9237815.

A live and archived webcast of the conference call will be available at the Company's investor relations website under the "Financial Reports" section at http://ir.noahgroup.com.

DISCUSSION OF NON-GAAP MEASURES        

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company's earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation 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 and HKEX:6686) is a leading and pioneer wealth management service provider in China offering comprehensive one-stop advisory services on global investment and asset allocation primarily for high net worth investors. Noah is a Cayman Islands holding company and carries on business in Hong Kong as Noah Holdings Private Wealth and Asset Management Limited. In the first half of 2023, Noah distributed RMB35.2 billion (US$4.9 billion) of investment products. Through Gopher Asset Management, Noah had assets under management of RMB156.9 billion (US$21.6 billion) as of June 30, 2023.

Noah's wealth management business primarily distributes private equity, private secondary, mutual fund and other products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,375 relationship managers across 63 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong (China), Taiwan (China), New York, Silicon Valley and Singapore. The Company's wealth management business had 446,557 registered clients as of June 30, 2023. Through Gopher Asset Management, Noah manages private equity, public securities, real estate, multi-strategy and other investments denominated in RMB and other currencies. Noah also provides other businesses.

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 2023 ended June 30, 2023 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 RMB7.2513 to US$1.00, the effective noon buying rate for June 30, 2023 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. 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 announcements, circulars or other publications made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), 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. These statements include, but are not limited to, estimates regarding the sufficiency of Noah's cash and cash equivalents and liquidity risk. 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; investment risks associated with investment products distributed to Noah's investors, including the risk of default by counterparties or loss of value due to market or business conditions or misconduct by counterparties; 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 and the Hong Kong Stock Exchange. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.

 

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited
Condensed Consolidated Balance Sheets
(unaudited)
			As of
			March 31,		June 30,		June 30,
			2023		2023		2023
			RMB'000		RMB'000		USD'000
Assets
	Current assets:
		Cash and cash equivalents	4,713,215		4,740,434		653,736
		Restricted cash	136,074		143,255		19,756
		Short-term investments	316,178		445,485		61,435
		Accounts receivable, net	363,890		534,885		73,764
		Amounts due from related parties	499,220		429,202		59,190
		Loans receivable, net	381,449		341,083		47,037
		Other current assets	199,429		200,588		27,662
		Total current assets	6,609,455		6,834,932		942,580
	Long-term investments, net		851,649		980,257		135,184
	Investment in affiliates		1,474,736		1,464,702		201,992
	Property and equipment, net		2,487,886		2,525,732		348,314
	Operating lease right-of-use assets, net		175,992		152,040		20,967
	Deferred tax assets		436,446		436,240		60,160
	Other non-current assets		145,022		169,454		23,369
Total Assets			12,181,186		12,563,357		1,732,566
Liabilities and Equity
	Current liabilities:
		Accrued payroll and welfare expenses	740,811		562,029		77,507
		Income tax payable	153,799		141,693		19,540
		Deferred revenues	79,235		71,440		9,852
		Dividend payable	-		177,502		24,479
		Contingent liabilities	566,005		592,097		81,654
		Other current liabilities	546,497		584,384		80,590
	Total current liabilities		2,086,347		2,129,145		293,622
	Deferred tax liabilities		228,271		230,797		31,828
	Operating lease liabilities, non-current		94,178		79,267		10,931
	Other non-current liabilities		51,184		54,495		7,515
	Total Liabilities		2,459,980		2,493,704		343,896
	Equity		9,721,206		10,069,653		1,388,670
Total Liabilities and Equity			12,181,186		12,563,357		1,732,566

 

Noah Holdings Limited
Condensed Consolidated Income Statements
(In RMB'000, except for ADS data, per ADS data and percentages)
(unaudited)
	Three months ended
	June 30,		June 30,		June 30,			Change
	2022		2023		2023
Revenues:	RMB'000		RMB'000		USD'000
Revenues from others:
One-time commissions	177,339		399,521		55,096			125.3 %
Recurring service fees	184,300		176,355			24,320		(4.3 %)
Performance-based income	9,481		4,328			597		(54.4 %)
Other service fees	52,521		64,114			8,842		22.1 %
Total revenues from others	423,641		644,318			88,855		52.1 %
Revenues from funds Gopher      manages:
One-time commissions	30,893		5,982			825		(80.6 %)
Recurring service fees	277,359		271,033			37,377		(2.3 %)
Performance-based income	16,533		23,635			3,259		43.0 %
Total revenues from funds Gopher      manages	324,785		300,650			41,461		(7.4 %)
Total revenues	748,426		944,968			130,316		26.3 %
Less: VAT related surcharges	(10,284)		(3,211)			(443)		(68.8 %)
Net revenues	738,142		941,757			129,873		27.6 %
Operating costs and expenses:
Compensation and benefits
Relationship managers	(131,519)		(180,304)			(24,865)		37.1 %
Others	(226,286)		(204,798)			(28,243)		(9.5 %)
Total compensation and benefits	(357,805)		(385,102)			(53,108)		7.6 %
Selling expenses	(70,307)		(112,003)			(15,446)		59.3 %
General and administrative      expenses	(35,649)		(63,983)			(8,824)		79.5 %
Reversal of (provision for) credit      losses	5,788		(220)			(30)		N.A.
Other operating expenses	(22,677)		(37,078)			(5,113)		63.5 %
Government subsidies	65,653		6,048			834		(90.8 %)
Total operating costs and expenses	(414,997)		(592,338)			(81,687)		42.7 %
Income from operations	323,145		349,419			48,186		8.1 %
Other income:
Interest income	17,681		39,684			5,473		124.4 %
Investment income (loss)	5,174		(3,976)			(548)		N.A.
Other income	11,849		15,821			2,182		33.5 %
Total other income	34,704		51,529			7,107		48.5 %
Income before taxes and income from      equity in affiliates	357,849		400,948			55,293		12.0 %
Income tax expense	(78,164)		(90,213)			(12,441)		15.4 %
Income from equity in affiliates	69,203		1,561			215		(97.7 %)
Net income	348,888		312,296			43,067		(10.5 %)
Less: net loss attributable to non-      controlling interests	(117)		(3,132)			(432)		2576.9 %
Net income attributable to Noah      shareholders	349,005		315,428			43,499		(9.6 %)
Income per ADS, basic	5.19		4.54			0.63		(12.5 %)
Income per ADS, diluted	5.18		4.54			0.63		(12.4 %)
Margin analysis:
Operating margin	43.8 %		37.1 %			37.1 %
Net margin	47.3 %		33.2 %			33.2 %
Weighted average ADS equivalent[1]:
Basic	67,245,724		69,469,110			69,469,110
Diluted	67,310,698		69,492,786			69,492,786
ADS equivalent outstanding at end of      period	60,222,116		63,137,912			63,137,912
[1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs.

 

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,				Change
	2022		2023			2023
Revenues:	RMB'000		RMB'000			USD'000
Revenues from others:
One-time commissions	258,493		570,092			78,619				120.5 %
Recurring service fees	377,679		369,063			50,896				(2.3 %)
Performance-based income	152,392		7,758			1,070				(94.9 %)
Other service fees	91,281		136,980			18,890				50.1 %
Total revenues from others	879,845		1,083,893			149,475				23.2 %
Revenues from funds Gopher      manages:
One-time commissions	52,048		11,878			1,638				(77.2 %)
Recurring service fees	570,411		554,505			76,470				(2.8 %)
Performance-based income	48,600		103,960			14,337				113.9 %
Total revenues from funds      Gopher manages	671,059		670,343			92,445				(0.1 %)
Total revenues	1,550,904		1,754,236			241,920				13.1 %
Less: VAT related surcharges	(17,070)		(9,006)			(1,242)				(47.2 %)
Net revenues	1,533,834		1,745,230			240,678				13.8 %
Operating costs and expenses:
Compensation and benefits
Relationship managers	(241,514)		(329,039)			(45,377)				36.2 %
Others	(474,196)		(426,169)			(58,771)				(10.1 %)
Total compensation and benefits	(715,710)		(755,208)			(104,148)				5.5 %
Selling expenses	(130,213)		(208,672)			(28,777)				60.3 %
General and administrative expenses	(93,856)		(109,683)			(15,126)				16.9 %
Reversal of credit losses	14,986		5,478			755				(63.4 %)
Other operating expenses	(52,312)		(67,875)			(9,360)				29.8 %
Government subsidies	80,211		19,032			2,625				(76.3 %)
Total operating costs and expenses	(896,894)		(1,116,928)			(154,031)				24.5 %
Income from operations	636,940		628,302			86,647				(1.4 %)
Other income:
Interest income	30,318		74,072			10,216				144.3 %
Investment income (loss)	30,547		(17,559)			(2,421)				N.A.
Other income	11,571		25,379			3,500				119.3 %
Total other income	72,436		81,892			11,295				13.1 %
Income before taxes and      income from equity in affiliates	709,376		710,194			97,942				0.1 %
Income tax expense	(155,500)		(159,793)			(22,036)				2.8 %
Income from equity in affiliates	99,223		5,230			719				(94.7 %)
Net income	653,099		555,631			76,625				(14.9 %)
Less: net loss attributable to      non-controlling interests	(1,148)		(4,007)			(553)				249.0 %
Net income attributable to      Noah shareholders	654,247		559,638			77,178				(14.5 %)
Income per ADS, basic	9.73		8.06			1.11				(17.2 %)
Income per ADS, diluted	9.70		8.05			1.11				(17.0 %)
Margin analysis:
Operating margin	41.5 %		36.0 %			36.0 %
Net margin	42.6 %		31.8 %			31.8 %
Weighted average ADS equivalent[1]:
Basic	67,240,800		69,468,036			69,468,036
Diluted	67,428,368		69,498,956			69,498,956
ADS equivalent outstanding at      end of period	60,222,116		63,137,912			63,137,912
[1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs.

 

Noah Holdings Limited
Condensed Comprehensive Income Statements
(unaudited)
	Three months ended
	June 30,		June 30,		June 30,				Change
	2022		2023		2023
	RMB'000		RMB'000		USD'000
Net income	348,888		312,296		43,068				(10.5 %)
Other comprehensive income, net of tax:
Foreign currency translation adjustments	75,557		140,753		19,411				86.3 %
Comprehensive income	424,445		453,049		62,479				6.7 %
Less: Comprehensive loss attributable to non-controlling interests	(183)		(3,269)		(451)				1,686.3 %
Comprehensive income attributable to      Noah shareholders	424,628		456,318		62,930				7.5 %

 

Noah Holdings Limited
Condensed Comprehensive Income Statements
(unaudited)
	Six months ended
	June 30,		June 30,		June 30,				Change
	2022		2023		2023
	RMB'000		RMB'000		USD'000
Net income	653,099		555,631		76,625				(14.9 %)
Other comprehensive income, net of tax:
Foreign currency translation adjustments
	66,420		123,918		17,089				86.6 %
Comprehensive income	719,519		679,549		93,714				(5.6 %)
Less: Comprehensive loss attributable to non-controlling interests	(1,065)		(4,189)		(578)				293.9 %
Comprehensive income attributable to      Noah shareholders	720,584		683,738		94,292				(5.1 %)

 

Noah Holdings Limited
Supplemental Information
(unaudited)
	As of
	June 30,  2022		June 30,  2023		Change
Number of registered clients	418,675		446,557		6.7 %
Number of relationship managers	1,255		1,375		9.6 %
Number of cities in mainland China under coverage	79		63		(20.3 %)
	Three months ended
	June 30, 2022		June 30,  2023		Change
	(in millions of RMB, except number of active clients and percentages)
Number of active clients	12,866		11,548		(10.2 %)
Transaction value:
Private equity products	3,918		618		(84.2 %)
Private secondary products	2,394		4,293		79.3 %
Mutual fund products	12,190		12,031		(1.3 %)
Other products	814		1,465		80.1 %
Total transaction value	19,316		18,407		(4.7 %)

 

Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
	Three months ended June 30, 2023
	Wealth  Management Business		Asset  Management Business		Other  Businesses		Total
	RMB'000		RMB'000		RMB'000		RMB'000
Revenues:
Revenues from others
One-time commissions	399,521		-		-		399,521
Recurring service fees	176,355		-		-		176,355
Performance-based income	4,328		-		-		4,328
Other service fees	50,878		-		13,236		64,114
Total revenues from others	631,082		-		13,236		644,318
Revenues from funds Gopher      manages
One-time commissions	5,920		62		-		5,982
Recurring service fees	93,914		177,119		-		271,033
Performance-based income	17,115		6,520		-		23,635
Total revenues from funds Gopher      manages	116,949		183,701		-		300,650
Total revenues	748,031		183,701		13,236		944,968
Less: VAT related surcharges	(2,755)		(312)		(144)		(3,211)
Net revenues	745,276		183,389		13,092		941,757
Operating costs and expenses:
Compensation and benefits
Relationship managers	(175,446)		(4,858)		-		(180,304)
Others	(133,409)		(63,949)		(7,440)		(204,798)
Total compensation and benefits	(308,855)		(68,807)		(7,440)		(385,102)
Selling expenses	(84,883)		(20,839)		(6,281)		(112,003)
General and administrative      expenses	(47,431)		(11,721)		(4,831)		(63,983)
(Provision for) reversal of credit      losses	(294)		74		-		(220)
Other operating expenses	(9,637)		(1,230)		(26,211)		(37,078)
Government subsidies	6,002		46		-		6,048
Total operating costs and expenses	(445,098)		(102,477)		(44,763)		(592,338)
Income (loss) from operations	300,178		80,912		(31,671)		349,419

 

Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
	Three months ended June 30, 2022
	Wealth  Management Business		Asset  Management Business		Other  Businesses		Total
	RMB'000		RMB'000		RMB'000		RMB'000
Revenues:
Revenues from others
One-time commissions	177,339		-		-		177,339
Recurring service fees	184,300		-		-		184,300
Performance-based income	9,481		-		-		9,481
Other service fees	27,375		-		25,146		52,521
Total revenues from others	398,495		-		25,146		423,641
Revenues from funds Gopher      manages
One-time commissions	1,518		29,375		-		30,893
Recurring service fees	107,767		169,592		-		277,359
Performance-based income	3,837		12,696		-		16,533
Total revenues from funds Gopher       manages	113,122		211,663		-		324,785
Total revenues	511,617		211,663		25,146		748,426
Less: VAT related surcharges	(2,976)		(1,313)		(5,995)		(10,284)
Net revenues	508,641		210,350		19,151		738,142
Operating costs and expenses:
Compensation and benefits
Relationship managers	(120,258)		(11,261)		-		(131,519)
Others	(153,046)		(63,241)		(9,999)		(226,286)
Total compensation and benefits	(273,304)		(74,502)		(9,999)		(357,805)
Selling expenses	(60,479)		(8,244)		(1,584)		(70,307)
General and administrative      expenses	(18,821)		(12,287)		(4,541)		(35,649)
Reversal of (provision for) credit      losses	141		(441)		6,088		5,788
Other operating income (expenses)	915		(113)		(23,479)		(22,677)
Government subsidies	36,750		27,822		1,081		65,653
Total operating costs and expenses	(314,798)		(67,765)		(32,434)		(414,997)
Income (loss) from operations	193,843		142,585		(13,283)		323,145

 

 

Noah Holdings Limited
Supplement Revenue Information by Geography
(unaudited)
	Three months ended June 30, 2023
	Wealth  Management Business		Asset  Management Business		Other Businesses		Total
	RMB'000		RMB'000		RMB'000		RMB'000
Revenues:
Mainland China	419,220		118,972		13,236		551,428
Hong Kong	282,693		42,439		-		325,132
Others	46,118		22,290		-		68,408
Total revenues	748,031		183,701		13,236		944,968

 

	Three months ended June 30, 2022
	Wealth  Management Business		Asset  Management Business		Other Businesses		Total
	RMB'000		RMB'000		RMB'000		RMB'000
Revenues:
Mainland China	378,862		184,939		25,146		588,947
Hong Kong	111,125		9,117		-		120,242
Others	21,630		17,607		-		39,237
Total revenues	511,617		211,663		25,146		748,426

 

Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In RMB, except for per ADS data and percentages)
(unaudited)
	Three months ended
	June 30,		June 30,		Change
	2022		2023
	RMB'000		RMB'000
Net income attributable to Noah shareholders	349,005		315,428		(9.6 %)
Adjustment for share-based compensation	7,990		(3,055)		N.A.
Less: tax effect of adjustments	1,922		(740)		N.A.
Adjusted net income attributable to Noah shareholders      (non-GAAP)	355,073		313,113		(11.8 %)
Net margin attributable to Noah shareholders	47.3 %		33.5 %
Non-GAAP net margin attributable to Noah shareholders	48.1 %		33.2 %
Net income attributable to Noah shareholders per ADS,      diluted	5.18		4.54		(12.4 %)
Non-GAAP net income attributable to Noah shareholders      per ADS, diluted	5.28		4.51		(14.6 %)

 

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,		Change
	2022		2023
	RMB'000		RMB'000
Net income attributable to Noah shareholders	654,247		559,638		(14.5 %)
Adjustment for share-based compensation	18,836		(9,244)		N.A.
Less: tax effect of adjustments	4,529		(2,239)		N.A.
Adjusted net income attributable to Noah shareholders      (non-GAAP)	668,554		552,633		(17.3 %)
Net margin attributable to Noah shareholders	42.7 %		32.1 %
Non-GAAP net margin attributable to Noah shareholders	43.6 %		31.7 %
Net income attributable to Noah shareholders per ADS,      diluted	9.70		8.05		(17.0 %)
Non-GAAP net income attributable to Noah shareholders      per ADS, diluted	9.92		7.95		(19.9 %)

 

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SOURCE Noah Holdings Limited