Noah Holdings' Outlook Upgraded to Stable by S&P Global Ratings; Investment Grade "BBB-" Rating Affirmed

Rhea-AI Summary

On August 5, 2021, Standard and Poor's Global Ratings upgraded Noah Holdings' outlook to stable from negative and affirmed its 'BBB-' long-term and 'A-3' short-term issuer credit ratings. This revision reflects expectations of revenue growth and reduced litigation risks from the Camsing incident. In Q1 2021, Noah achieved a record RMB1.2 billion in net revenues, marking a 64.1% year-on-year increase. The company also expanded its ultra-high-net-worth client base, with active clients growing 65.4% year-on-year to nearly 28,000. S&P believes Noah is well-positioned to navigate future growth with minimal financial risk.

Positive

• Upgraded outlook to stable from negative by S&P.
• Record Q1 2021 net revenues of RMB1.2 billion, a 64.1% year-on-year increase.
• Active client base increased by 65.4% year-on-year, reaching almost 28,000.
• Strategic investment in iCapital Network to enhance product offerings.
• Minimal financial liabilities anticipated over the next 12 months.

Negative

• None.

SHANGHAI, Aug. 5, 2021 /PRNewswire/ -- Standard and Poor's Global Ratings ("S&P") has revised its outlook on Noah Holdings ("Noah" or "the Company") to stable from negative, and affirmed the "BBB-" long-term and "A-3" short-term issuer credit ratings on the Company.

"The stable outlook reflects our expectation that Noah's revenue stream and AUM flow has stabilized and will be on a growth trajectory at least over the next 24 months. The stable outlook also reflects reduced litigation risk associated with Camsing incident," stated S&P in its research update. "The Camsing incident is not as strong a credit factor now as when we revised the outlook to negative."

As 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 reported stabilized AUM and revenue stream since Camsing. In the first quarter of 2021, the Company's net revenues reached RMB1.2 billion, the highest single quarter in its history, a 64.1% increase year-on-year, consists of the strong growth in all revenue streams including one-time commissions, recurring service fees and performance-based income. As a result, non-GAAP net income was RMB461.9 million, also a historical high.

S&P mentioned that the expansion in Noah's ultra-high-net-worth client base indicated investor confidence in the Company. Noah's active clients number, including mutual funds, grew 65.4% year-on-year to record a historical high of almost 28,000 in the first quarter of 2021.

"Proactive investments and customized product distribution with focus on high-net-worth clients are better positioning Noah to compete with online channels as the sector becomes more saturated," commented S&P. The Company announced its strategic equity investment in US-based iCapital Network on July 28, 2021, the leading global financial technology platform driving access to and efficiency in alternative investment for the asset and wealth management industries. Through the collaboration, Noah expects to offer more diversified high-quality global private equity and hedge fund products for its clients, and expand the international distribution channel for Gopher Asset Management, the asset management arm of the Company.

"Noah should be able to navigate its growth with an appropriate strategy and risk management system, and the company meets our assessment of management and governance at fair. The Company has limited financial liabilities and we do not anticipate it will incur any over the next 12 months. We continue to assess the company's financial risk as minimal," concluded S&P.

ABOUT NOAH HOLDINGS LIMITED 

Noah Holdings Limited (NYSE: NOAH, BBB-) 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 quarter of 2021, Noah distributed RMB27.1 billion (US$4.1 billion) of investment products. Through Gopher Asset Management, Noah had assets under management of RMB154.1 billion (US$23.5 billion) as of March 31, 2021.

Noah's wealth management business primarily distributes private equity, public securities and insurance products denominated in RMB and other currencies. Noah delivers customized financial solutions to clients through a network of 1,246 relationship managers across 82 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada and Singapore. The Company's wealth management business had 384,021 registered clients as of March 31, 2021. As a leading alternative multi-asset manager in China, Gopher Asset Management manages private equity, real estate, public securities, credit and multi-strategy investments denominated in Renminbi and other currencies.

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

Noah Holdings Limited
Sonia Han, Melo Xi, Ryan Teng
Tel: +86-21-8035-8294
ir@noahgroup.com

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SOURCE Noah Holdings Limited

FAQ

What did S&P say about Noah Holdings' outlook?

S&P upgraded Noah Holdings' outlook to stable from negative, reflecting expectations of revenue growth.

What were Noah Holdings' Q1 2021 net revenues?

Noah Holdings reported record Q1 2021 net revenues of RMB1.2 billion, a 64.1% increase year-on-year.

How much did Noah's active client base grow?

Noah's active client base grew by 65.4% year-on-year, totaling nearly 28,000 clients.

What is the significance of the Camsing incident for Noah Holdings?

The Camsing incident's litigation risks have reduced, contributing to the stable outlook by S&P.

What strategic investment did Noah Holdings make recently?

Noah made a strategic equity investment in iCapital Network to enhance its offerings in alternative investments.