Noah Holdings Limited Announces Unaudited Financial Results for the Second Quarter of 2021

Rhea-AI Summary

Noah Holdings Limited (NYSE: NOAH) reported its Q2 2021 results, with net revenues rising by 20.3% year-over-year to RMB899.4 million (US$139.3 million), driven primarily by increased one-time commissions and recurring service fees. Net income attributable to shareholders grew 2.0% to RMB305.5 million (US$47.3 million). However, operating expenses surged by 31.8%, leading to a decline in operating margin from 42.7% in Q2 2020 to 37.3%. The company has forecasted non-GAAP net income for 2021 to range between RMB1.2 billion and RMB1.3 billion.

Positive

• Net revenues increased by 20.3% to RMB899.4 million, driven by one-time commissions and recurring service fees.
• Net income attributable to shareholders rose by 2.0% to RMB305.5 million.
• Non-GAAP net income for Q2 reached RMB337.0 million, up 7.5% year-on-year.
• Total number of registered clients increased by 19.6% to 397,235.

Negative

• Operating expenses increased by 31.8%, impacting profitability.
• Operating margin fell from 42.7% in Q2 2020 to 37.3% in Q2 2021.
• Net income margin decreased from 40.4% in Q2 2020 to 34.2% in Q2 2021.

SHANGHAI, Aug. 17, 2021 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH), 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 2021.

SECOND QUARTER 2021 FINANCIAL HIGHLIGHTS

• Net revenues for the second quarter of 2021 were RMB899.4 million (US$139.3 million), a 20.3% increase from the corresponding period in 2020 due to increased one-time commissions as well as recurring service fees.

(RMB millions, except percentages)	Q2 2020			Q2 2021			YoY Change
Wealth management	542.8			625.6			15.3%
Asset management	181.6			256.3			41.1%
Other businesses	23.0			17.5			(23.9%)
Total net revenues	747.4			899.4			20.3%

• Income from operations for the second quarter of 2021 was RMB335.4 million (US$51.9 million), a 5.0% increase from the corresponding period in 2020.

(RMB millions, except percentages)	Q2 2020			Q2 2021			YoY Change
Wealth management	196.6			176.7			(10.1%)
Asset management	100.8			172.8			71.4%
Other businesses	22.1			(14.1)			N.A.
Total income from operations	319.5			335.4			5.0%

• Net income attributable to Noah shareholders for the second quarter of 2021 was RMB305.5 million (US$47.3 million), a 2.0% increase from the corresponding period in 2020.
• Non-GAAP^[1] net income attributable to Noah shareholders for the second quarter of 2021 was RMB337.0 million (US$52.2 million), a 7.5% increase from the corresponding period in 2020.

[1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation, non-recurring share-based settlement expenses 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 2021 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. Noah primarily distributes private equity, private secondary, mutual funds and other products denominated in RMB and other currencies.

• Total number of registered clients as of June 30, 2021 was 397,235, a 19.6% increase from June 30, 2020, and a 3.4% increase from March 31, 2021.
• Total number of active clients^[2] which excluded mutual fund-only clients during the second quarter of 2021 was 4,676, a 38.9% increase from the second quarter of 2020, and a 25.8% decrease from the first quarter of 2021. Counting in mutual fund-only clients, the total number of clients who transacted with us during the second quarter of 2021 was 20,290, a 38.0% increase from the second quarter of 2020, and a 27.1% decrease from the first quarter of 2021.
• Aggregate value of investment products distributed during the second quarter of 2021 was RMB25.0 billion (US$3.9 billion), a 16.6% increase from the second quarter of 2020. 

[2]  "Active clients" for a given period refers to registered high net worth investors who purchase investment products distributed or provided by Noah during that given period, excluding clients who transacted only on our online mutual fund platform.

 

	Three months ended June 30,
	2020				2021
Product type	(RMB in billions, except percentages)
Private equity products	2.5		11.9%		6.5		25.9%
Private secondary products[3]	7.2		33.4%		7.7		30.8%
Mutual fund products	10.8		50.4%		9.4		37.5%
Other products[4]	0.9		4.3%		1.4		5.8%
All products	21.4		100.0%		25.0		100.0%
[3]  "Private secondary products" refers to privately raised investment products that invest in publicly traded securities, and "mutual fund products" refers to publicly raised investment products that invest in publicly traded securities, and these two were previously combined as "public securities products".
[4]  "Other products" refers to other investment products, which includes insurance products, multi-strategies products and others.

• Coverage network in mainland China covers 81 cities as of June 30, 2021, compared with 78 cities as of June 30, 2020 and 82 cities as of March 31, 2021.
• Number of relationship managers was 1,268 as of June 30, 2021, a 6.0% increase from June 30, 2020, and a 1.8% increase from March 31, 2021. The turnover rate of core "elite" relationship managers was 1.7%, compared with 1.4% as of June 30, 2020.

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, real estate, public securities to multi-strategy investments denominated in RMB and other currencies.

• Total assets under management as of June 30, 2021 were RMB155.9 billion (US$24.1 billion), a 1.2% increase from March 31, 2021 and a 2.2% decrease from June 30, 2020.

Investment type	As of  March 31,  2021				Growth		Distribution/  Redemption		As of June 30,  2021
	(RMB billions, except percentages)
Private equity	121.9		79.1%		5.8		-		127.7		81.9%
Public securities[5]	10.5		6.8%		1.5		0.9		11.1		7.1%
Real estate	10.7		7.0%		-		0.5		10.2		6.6%
Multi-strategies	5.9		3.8%		0.1		0.5		5.5		3.5%
Others	5.1		3.3%		-		3.7		1.4		0.9%
All Investments	154.1		100.0%		7.4		5.6		155.9		100.0%
[5]  The asset distribution/redemption of public securities also includes market appreciation or depreciation.

Other Businesses

Since the fourth quarter of 2020, our other businesses segment has been transitioning to "Noah Digital Intelligence", aiming to diversify distribution channels beyond our wealth management, and to provide more comprehensive services and investment products.

Ms. Jingbo Wang, co-founder and CEO of Noah, said, "It has been two years since we started the paradigm transformation in the third quarter of 2019. We are happy to report continued strong growth year-over-year in diamond and black card client numbers and all major revenue streams in the second quarter of 2021. Our net revenues grew 20.3% year-on-year to RMB899.4 million, and non-GAAP net income grew 7.5% year-on-year to RMB337.0 million in this quarter, supported by that fact that one-time commissions, recurring service fees and performance-based income were up 94.7%, 5.2% and 34.7% year-on-year respectively. A significant milestone we achieved in this quarter is that we have completed the redemption and distribution of all single counter-party private credit products, except for partial Camsing and Huishan products. Another encouraging signal is that the number of black card clients increased by 11.3% to 1,104 as of June 30, 2021, indicating the fastest growth of our ultra-high-net-worth clients since the transformation. In addition, by strategically investing in iCapital Network, we hope to continue improving our competitiveness overseas." 

SECOND QUARTER 2021 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2021 were RMB899.4 million (US$139.3 million), a 20.3% increase from the corresponding period in 2020, primarily driven by increased one-time commissions as well as recurring service fees, partially offset by decreased other service fees.

• Wealth Management Business
• Net revenues from one-time commissions for the second quarter of 2021 were RMB215.3 million (US$33.4 million), a 70.9% increase from the corresponding period in 2020, primarily due to increased transaction value as well as the distribution of higher one-time commission rates products.
• Net revenues from recurring service fees for the second quarter of 2021 were RMB340.0 million (US$52.7 million), a 9.6% increase from the corresponding period in 2020, mainly due to cumulative effect of investment products with recurring service fees previously distributed.
• Net revenues from performance-based income for the second quarter of 2021 were RMB55.6 million (US$8.6 million), a 25.3% decrease from the corresponding period of 2020, primarily due to less performance-based income from public securities products.
• Net revenues from other service fees for the second quarter of 2021 were RMB14.6 million (US$2.3 million), a 54.5% decrease from the corresponding period in 2020, 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 2021 were RMB158.5 million (US$24.5 million), a 3.4% decrease from the corresponding period in 2020.
• Net revenues from performance-based income for the second quarter of 2021 were RMB66.3 million (US$10.3 million), a 311.8% increase from the corresponding period in 2020, primarily due to an increase in performance-based income from real estate products and offshore private equity products.
• Other Businesses
• Net revenues for the second quarter of 2021 were RMB17.5 million (US$2.7 million), a 23.9% decrease from the corresponding period in 2020. The decrease was primarily due to reduced loan origination since the second half of 2020 as well as the ongoing impact of COVID-19.

Operating Costs and Expenses

Operating costs and expenses for the second quarter of 2021 were RMB564.0 million (US$87.4 million), a 31.8% increase from the corresponding period in 2020. Operating costs and expenses primarily consisted of compensation and benefits of RMB395.8 million (US$61.3 million), selling expenses of RMB99.5 million (US$15.4 million), general and administrative expenses of RMB77.9 million (US$12.1 million), provision of credit losses of RMB2.1 million (US$0.3 million) and other operating expenses of RMB28.1 million (US$4.3 million).

• Operating costs and expenses for the wealth management business for the second quarter of 2021 were RMB448.9 million (US$69.5 million), a 29.7% increase from the corresponding period in 2020, primarily due to an increase in compensation and benefits in line with increased transaction value and selling expenses.
• Operating costs and expenses for the asset management business for the second quarter of 2021 were RMB83.4 million (US$12.9 million), a 3.2% increase from the corresponding period in 2020, primarily due to increased compensation and benefits as well as expenses and offset by more government grants received.
• Operating costs and expenses for other businesses for the second quarter of 2021 were RMB31.7 million (US$4.9 million), compared with RMB0.8 million from the corresponding period in 2020, primarily due to increased depreciation expenses for our newly purchased headquarter buildings as well as less government grants received compared with corresponding period in 2020.

Operating Margin

Operating margin for the second quarter of 2021 was 37.3%, decreased from 42.7% for the corresponding period in 2020.

• Operating margin for the wealth management business for the second quarter of 2021 was 28.2%, compared with 36.2% for the corresponding period in 2020, due to less expenses incurred in the first half year of 2020 due to the COVID-19 pandemic as well as private equity products distribution business transferred to asset management business.
• Operating margin for the asset management business for the second quarter of 2021 was 67.4%, compared with 55.5% for the corresponding period in 2020, due to revenue recognition of private equity products transferred from wealth management business to asset management business since the fourth quarter of 2020 as well as more performance-based income in this quarter.
• Loss from operation for other businesses for the second quarter of 2021 was RMB14.1 million (US$2.2 million), compared with an operating income of RMB22.1 million for the corresponding period in 2020.

Investment Income

Investment income for the second quarter of 2021 was RMB3.5 million (US$0.5 million), compared with RMB4.7 million for the corresponding period in 2020.

Income Tax Expenses

Income tax expenses for the second quarter of 2021 were RMB68.7 million (US$10.6 million), an 11.7% decrease from the corresponding period in 2020, primarily due to less taxable income. 

Income from Equity in Affiliates

Income from equity in affiliates for the second quarter of 2021 was RMB53.4 million (US$8.3 million), a 31.3% increase from the corresponding period in 2020, 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 2021 was RMB308.0 million (US$47.7 million), a 2.0% increase from the corresponding period in 2020.
• Net margin for the second quarter of 2021 was 34.2%, down from 40.4% for the corresponding period in 2020.
• Net income attributable to Noah shareholders for the second quarter of 2021 was RMB305.5 million (US$47.3 million), a 2.0% increase from the corresponding period in 2020.
• Net margin attributable to Noah shareholders for the second quarter of 2021 was 34.0%, down from 40.1% for the corresponding period in 2020.
• Net income attributable to Noah shareholders per basic and diluted ADS for the second quarter of 2021 was RMB4.56 (US$0.71) and RMB4.53 (US$0.70), respectively, down from RMB4.86 and RMB4.84 respectively, for the corresponding period in 2020.
• Non-GAAP Net Income Attributable to Noah Shareholders
• Non-GAAP net income attributable to Noah shareholders for the second quarter of 2021 was RMB337.0 million (US$52.2 million), a 7.5% increase from the corresponding period in 2020.
• Non-GAAP net margin attributable to Noah shareholders for the second quarter of 2021 was 37.5%, compared with 42.0% for the corresponding period in 2020.
• Non-GAAP net income attributable to Noah shareholders per diluted ADS for the second quarter of 2021 was RMB5.00 (US$0.77), down from RMB5.06 for the corresponding period in 2020.

Balance Sheet and Cash Flow

As of June 30, 2021, the Company had RMB2,686.4 million (US$416.1 million) in cash and cash equivalents, compared with RMB4,904.3 million as of March 31, 2021 and RMB4,170.7 million as of June 30, 2020.

Net cash inflow from the Company's operating activities during the second quarter of 2021 was RMB5.7 million (US$0.9 million), primarily due to cash inflow generated from operating profit and partially offset by annual payment of employee annual bonuses and annual tax filing in the second quarter.

Net cash outflow from the Company's investing activities during the second quarter of 2021 was RMB2,201.5 million (US$341.0 million), primarily due to cash payment for the acquisition of our new headquarter in the second quarter.

Net cash outflow from the Company's financing activities was RMB9.9 million (US$1.5 million) in the second quarter of 2021, primarily due to certain capital divestment and dividend distribution to certain of non-controlling interest shareholders.

2021 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2021 will be in the range of RMB1.2 billion to RMB1.3 billion. 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 2021 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

Conference call details
Date/Time:	Tuesday, August 17, 2021 at 8:00 p.m., U.S. Eastern Time Wednesday, August 18, 2021 at 8:00 a.m., Hong Kong Time
Dial in details:
- United States Toll Free	+1-888-317-6003
- Mainland China Toll Free	4001-206-115
- Hong Kong Toll Free	800-963-976
- International	+1-412-317-6061
Conference Title:	Noah Holdings 2Q21 Earnings Conference Call
Participant Password:	7553238

A telephone replay will be available starting one hour after the end of the conference call until August 24, 2021 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10159207.

A live and archived webcast of the conference call will be available at Noah's investor relations website under the Announcements & Events 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, non-recurring share-based settlement expenses 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 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. In the first half of 2021, Noah distributed RMB52.1 billion (US$8.1 billion) of investment products. Through Gopher Asset Management, Noah had assets under management of RMB155.9 billion (US$24.1 billion) as of June 30, 2021.

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 1,268 relationship managers in 81 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States and Singapore. The Company's wealth management business had 397,235 registered clients as of June 30, 2021. As a leading multi-asset manager in China, Gopher Asset Management manages private equity, real estate, public securities, multi-strategy and other investments denominated in RMB and other currencies. The Company 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 2021 ended June 30, 2021 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 RMB6.4566 to US$1.00, the effective noon buying rate for June 30, 2021 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 2021 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
Sonia Han, Melo Xi, Ryan Teng
Tel: +86-21-8035-8294
ir@noahgroup.com

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited
Condensed Consolidated Balance Sheets
(unaudited)
			As of
			March 31,		June 30,		June 30,
			2021		2021		2021
			RMB'000		RMB'000		USD'000
Assets
	Current assets:
		Cash and cash equivalents	4,904,316		2,686,422		416,074
		Restricted cash	9,995		10,067		1,559
		Short-term investments	143,140		96,050		14,876
		Accounts receivable, net	444,421		470,265		72,835
		Loans receivable, net	407,595		515,194		79,793
		Amounts due from related parties	715,396		643,972		99,739
		Other current assets	203,938		239,997		37,171
		Total current assets	6,828,801		4,661,967		722,047
	Long-term investments, net		556,166		554,280		85,847
	Investment in affiliates		1,268,909		1,258,829		194,968
	Property and equipment, net		235,974		2,642,584		409,284
	Operating lease right-of-use assets, net		268,395		256,597		39,742
	Deferred tax assets		223,783		223,801		34,662
	Other non-current assets		214,807		199,232		30,858
Total Assets			9,596,835		9,797,290		1,517,408
Liabilities and Equity
	Current liabilities:
		Accrued payroll and welfare expenses	844,021		491,716		76,157
		Income tax payable	244,518		84,675		13,114
		Deferred revenues	85,143		96,523		14,950
		Contingent liabilities	532,612		460,315		71,294
		Other current liabilities	448,127		554,383		85,863
	Total current liabilities		2,154,421		1,687,612		261,378
	Operating lease liabilities, non-current		180,308		169,167		26,201
	Deferred tax liabilities		46,139		241,084		37,339
	Other non-current liabilities		844		109,134		16,903
	Total Liabilities		2,381,712		2,206,997		341,821
	Equity		7,215,123		7,590,293		1,175,587
Total Liabilities and Equity			9,596,835		9,797,290		1,517,408

 

 

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
	2020		2021		2021
Revenues:	RMB'000		RMB'000		USD'000
Revenues from others:
One-time commissions	117,085		195,891		30,340			67.3%
Recurring service fees	152,253		218,988			33,917		43.8%
Performance-based income	57,206		46,468			7,197		(18.8%)
Other service fees	56,197		32,283			5,000		(42.6%)
Total revenues from others	382,741		493,630			76,454		29.0%
Revenues from funds Gopher       manages:
One-time commissions	10,431		52,377			8,112		402.1%
Recurring service fees	324,174		282,333			43,728		(12.9%)
Performance-based income	33,766		76,101			11,787		125.4%
Total revenues from funds Gopher      manages	368,371		410,811			63,627		11.5%
Total revenues	751,112		904,441			140,081		20.4%
Less: VAT related surcharges	(3,674)		(5,052)			(782)		37.5%
Net revenues	747,438		899,389			139,299		20.3%
Operating costs and expenses:
Compensation and benefits
Relationship managers	(113,044)		(153,275)			(23,739)		35.6%
Others	(217,805)		(242,507)			(37,560)		11.3%
Total compensation and benefits	(330,849)		(395,782)			(61,299)		19.6%
Selling expenses	(62,622)		(99,463)			(15,405)		58.8%
General and administrative expenses	(68,502)		(77,892)			(12,064)		13.7%
Provision for credit losses	(1,897)		(2,112)			(327)		11.3%
Other operating expenses	(20,715)		(28,082)			(4,349)		35.6%
Government grants	56,651		39,300			6,087		(30.6%)
Total operating costs and expenses	(427,934)		(564,031)			(87,357)		31.8%
Income from operations	319,504		335,358			51,942		5.0%
Other income:
Interest income	10,530		18,212			2,821		73.0%
Investment income	4,711		3,487			540		(26.0%)
Settlement expenses	-		(19,190)			(2,972)		N.A.
Other income (expenses)	4,298		(14,617)			(2,264)		N.A.
Total other income (expenses)	19,539		(12,108)			(1,875)		N.A.
Income before taxes and income from      equity in affiliates	339,043		323,250			50,067		(4.7%)
Income tax expense	(77,810)		(68,720)			(10,643)		(11.7%)
Income from equity in affiliates	40,693		53,420			8,274		31.3%
Net income	301,926		307,950			47,698		2.0%
Less: net income attributable to non-      controlling interests	2,285		2,424			375		6.1%
Net income attributable to Noah       shareholders	299,641		305,526			47,323		2.0%
Income per ADS, basic	4.86		4.56			0.71		(6.2%)
Income per ADS, diluted	4.84		4.53			0.70		(6.4%)
Margin analysis:
Operating margin	42.7%		37.3%			37.3%
Net margin	40.4%		34.2%			34.2%
Weighted average ADS equivalent[1]:
Basic	61,661,522		66,993,114			66,993,114
Diluted	61,921,913		67,449,200			67,449,200
ADS equivalent outstanding at end of period	61,698,055		60,080,070			60,080,070
[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
	2020		2021			2021
Revenues:	RMB'000		RMB'000			USD'000
Revenues from others:
One-time commissions	324,270		474,595			73,505			46.4%
Recurring service fees	300,710		439,501			68,070				46.2%
Performance-based income	71,824		322,992			50,025				349.7%
Other service fees	122,805		55,996			8,673				(54.4%)
Total revenues from others	819,609		1,293,084			200,273				57.8%
Revenues from funds Gopher       manages:
One-time commissions	15,180		98,523			15,259				549.0%
Recurring service fees	627,624		539,030			83,485				(14.1%)
Performance-based income	38,941		204,657			31,697				425.6%
Total revenues from funds       Gopher manages	681,745		842,210			130,441				23.5%
Total revenues	1,501,354		2,135,294			330,714				42.2%
Less: VAT related surcharges	(7,799)		(11,169)			(1,730)				43.2%
Net revenues	1,493,555		2,124,125			328,984				42.2%
Operating costs and expenses:
Compensation and benefits
Relationship managers	(283,096)		(360,147)			(55,780)				27.2%
Others	(412,592)		(617,760)			(95,679)				49.7%
Total compensation and      benefits	(695,688)		(977,907)			(151,459)				40.6%
Selling expenses	(107,162)		(182,918)			(28,330)				70.7%
General and administrative      expenses	(132,187)		(158,177)			(24,498)				19.7%
Provision for credit losses	(4,706)		(5,519)			(855)				17.3%
Other operating expenses	(53,332)		(55,170)			(8,545)				3.4%
Government grants	75,286		93,314			14,452				23.9%
Total operating costs and      expenses	(917,789)		(1,286,377)			(199,235)				40.2%
Income from operations	575,766		837,748			129,749				45.5%
Other income:
Interest income	32,700		41,139			6,372				25.8%
Investment income	22,277		37,848			5,862				69.9%
Settlement expenses	-		(19,190)			(2,972)				N.A.
Other income (expense)	5,156		(15,103)			(2,339)				N.A.
Total other income	60,133		44,694			6,923				(25.7%)
Income before taxes and      income from equity in affiliates	635,899		882,442			136,672				38.8%
Income tax expense	(146,086)		(198,566)			(30,754)				35.9%
Income from equity in affiliates	55,769		76,933			11,915				37.9%
Net income	545,582		760,809			117,833				39.4%
Less: net income attributable to      non-controlling interests	2,916		1,190			184				(59.2%)
Net income attributable to      Noah shareholders	542,666		759,619			117,649				40.0%
Income per ADS, basic	8.80		11.33			1.75				28.8%
Income per ADS, diluted	8.76		11.25			1.74				28.4%
Margin analysis:
Operating margin	38.6%		39.4%			39.4%
Net margin	36.5%		35.8%			35.8%
Weighted average ADS      equivalent[1]:
Basic	61,640,688		67,042,174			67,042,174
Diluted	61,949,755		67,497,514			67,497,514
ADS equivalent outstanding at      end of period	61,698,055		60,080,070			60,080,070
[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
	2020		2021		2021
	RMB'000		RMB'000		USD'000
Net income	301,926		307,950		47,698				2.0%
Other comprehensive income, net of tax:
Foreign currency translation adjustments	(7,160)		(22,809)		(3,533)				218.6%
Fair value fluctuation of available for sale      Investment (after tax)	775		134		21				(82.7%)
Comprehensive income	295,541		285,275		44,186				(3.5%)
Less: Comprehensive income attributable to non-controlling interests	2,326		2,411		373				3.7%
Comprehensive income attributable to      Noah shareholders	293,215		282,864		43,813				(3.5%)
Noah Holdings Limited
Condensed Comprehensive Income Statements
(unaudited)
	Six months ended
	June 30,		June 30,		June 30,				Change
	2020		2021		2021
	RMB'000		RMB'000		USD'000
Net income	545,582		760,809		117,833				39.4%
Other comprehensive income, net of tax:
Foreign currency translation adjustments	30,159		(14,400)		(2,230)				N.A.
Fair value fluctuation of available for sale      Investment (after tax)	771		134		21				(82.6%)
Comprehensive income	576,512		746,543		115,624				29.5%
Less: Comprehensive income attributable to non-controlling interests	2,952		1,210		187				(59.0%)
Comprehensive income attributable to      Noah shareholders	573,560		745,333		115,437				29.9%

 

 

Noah Holdings Limited
Supplemental Information
(unaudited)
	As of
	June 30,  2020		June 30,  2021		Change
Number of registered clients	332,157		397,235		19.6%
Number of relationship managers	1,196		1,268		6.0%
Number of cities in mainland China under coverage	78		81		3.8%
	Three months ended
	June 30, 2020		June 30,  2021		Change
	(in millions of RMB, except number of active clients and percentages)
Number of active clients	3,367		4,676		38.9%
Number of active clients including mutual fund clients	14,703		20,290		38.0%
Transaction value:
Private equity products	2,551		6,472		153.7%
Private secondary products	7,162		7,708		7.6%
Mutual fund products	10,809		9,375		(13.3%)
Other products	921		1,446		57.0%
Total transaction value	21,443		25,001		16.6%

 

 

Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
	Three months ended June 30, 2021
	Wealth		Asset
	Management		Management		Other
	Business		Business		Businesses		Total
	RMB'000		RMB'000		RMB'000		RMB'000
Revenues:
Revenues from others
One-time commissions	195,891		-		-		195,891
Recurring service fees	218,988		-		-		218,988
Performance-based income	46,468		-		-		46,468
Other service fees	14,665		-		17,618		32,283
Total revenues from others	476,012		-		17,618		493,630
Revenues from funds Gopher        manages
One-time commissions	20,705		31,672		-		52,377
Recurring service fees	123,031		159,302		-		282,333
Performance-based income	9,507		66,594		-		76,101
Total revenues from funds        Gopher manages	153,243		257,568		-		410,811
Total revenues	629,255		257,568		17,618		904,441
Less: VAT related surcharges	(3,665)		(1,299)		(88)		(5,052)
Net revenues	625,590		256,269		17,530		899,389
Operating costs and expenses:
Compensation and benefits
Relationship managers	(149,874)		(3,401)		-		(153,275)
Others	(154,463)		(74,017)		(14,027)		(242,507)
Total compensation and             benefits	(304,337)		(77,418)		(14,027)		(395,782)
Selling expenses	(82,726)		(10,496)		(6,241)		(99,463)
General and administrative             expenses	(54,091)		(16,676)		(7,125)		(77,892)
Provision for credit losses	-		-		(2,112)		(2,112)
Other operating expenses	(12,758)		(1,424)		(13,900)		(28,082)
Government grants	4,997		22,579		11,724		39,300
Total operating costs and            expenses	(448,915)		(83,435)		(31,681)		(564,031)
Income (loss) from operations	176,675		172,834		(14,151)		335,358

 

 

Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
Three months ended June 30, 2020
	Wealth Management  Business		Asset Management Business		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

 

 

Noah Holdings Limited
Supplement Revenue Information by Geography
(unaudited)
	Three months ended June 30, 2021
	Wealth  Management Business		Asset  Management Business		Other Businesses		Total
	RMB'000		RMB'000		RMB'000		RMB'000
Revenues:
Mainland China	450,226		209,183		17,618		677,027
Hong Kong	143,309		38,942		-		182,251
Others	35,720		9,443		-		45,163
Total revenues	629,255		257,568		17,618		904,441
	Three months ended June 30, 2020
	Wealth  Management Business		Asset  Management Business		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

 

 

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
	2020		2021
	RMB'000		RMB'000
Net income attributable to Noah shareholders	299,641		305,526		2.0%
Adjustment for share-based compensation	18,106		16,034			(11.4%)
Add: settlement expense	-		19,190			N.A.
Less: tax effect of adjustments	4,193		3,720			(11.3%)
Adjusted net income attributable to Noah shareholders      (non-GAAP)	313,554		337,030			7.5%
Net margin attributable to Noah shareholders	40.1%		34.0%
Non-GAAP net margin attributable to Noah shareholders	42.0%		37.5%
Net income attributable to Noah shareholders per ADS,      diluted	4.84		4.53			(6.4%)
Non-GAAP net income attributable to Noah shareholders      per ADS, diluted	5.06		5.00			(1.2%)
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
	2020		2021
	RMB'000		RMB'000
Net income attributable to Noah shareholders	542,666		759,619		40.0%
Adjustment for share-based compensation	36,397		26,178			(28.1%)
Add: settlement expense	-		19,190			N.A.
Less: tax effect of adjustments	8,428		6,074			(27.9%)
Adjusted net income attributable to Noah shareholders      (non-GAAP)	570,635		798,913			40.0%
Net margin attributable to Noah shareholders	36.3%		35.8%
Non-GAAP net margin attributable to Noah shareholders	38.2%		37.6%
Net income attributable to Noah shareholders per ADS,      diluted	8.76		11.25			28.4%
Non-GAAP net income attributable to Noah shareholders      per ADS, diluted	9.21		11.84			28.6%

 

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SOURCE Noah Holdings Limited