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 May 2016

 

 

Commission File Number: 001-34936

 

 

Noah Holdings Limited

 

 

No. 32 Qinhuangdao Road, Building C,

Shanghai 200082, People’s Republic of China

(86-21) 3860-2301

(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  x            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/ Ching Tao

 

Ching Tao

Chief Financial Officer

Date: May 25, 2016

 

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EXHIBIT INDEX

Exhibit 99.1 – Press Release

 

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Exhibit 99.1

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR

THE FIRST QUARTER OF 2016

SHANGHAI, May 23, 2016 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider with a focus on global services for high net worth individuals and enterprises in China, today announced its unaudited financial results for the first quarter of 2016.

Starting from the fourth quarter of 2015, the Company changed its reporting currency from the U.S. dollar (“US$”) to the Renminbi (“RMB”). The change in reporting currency is to better reflect the Company’s performance, as the majority of the Company’s operations are conducted in RMB, to align the Company’s reporting currency with its underlying operations and to reduce the impact that the increased volatility of the RMB to US$ exchange rate will have on the Company’s reported operating results. This release contains translations of certain RMB amounts into US$ for convenience1. Prior period numbers have been recast into the new reporting currency.

FIRST QUARTER 2016 FINANCIAL HIGHLIGHTS

 

    Net revenues in the first quarter of 2016 were RMB607.2 million (US$94.2 million), a 35.6% increase from the corresponding period in 2015.

 

(RMB millions,

except percentages)

   Q1
2015
     Q1 2015
Segment %
    Q1
2016
     Q1 2016
Segment %
    YoY Change  

Wealth management

     341.8         76.3     463.6         76.4     35.7

Asset management

     96.8         21.6     137.7         22.7     42.3

Internet finance

     9.1         2.0     5.8         1.0     (36.2 %) 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total net revenues

     447.7         100.0     607.2         100.0     35.6
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

    Income from operations in the first quarter of 2016 was RMB227.3 million (US$35.3 million), a 60.1% increase from the corresponding period in 2015.

 

(RMB millions,

except percentages)

   Q1
2015
    Q1 2015
Segment %
    Q1
2016
    Q1 2016
Segment %
    YoY Change  

Wealth management

     129.7        91.4     133.2        58.6     2.7

Asset management

     39.4        27.8     146.6        64.5     271.9

Internet finance

     (27.2     (19.1 %)      (52.5     (23.1 %)      93.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total income from operations

     142.0        100.0     227.3        100.0     60.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

    Net income attributable to Noah shareholders in the first quarter of 2016 was RMB199.0 million (US$30.9 million), a 50.7% increase from the corresponding period in 2015.

 

    Non-GAAP2 net income attributable to Noah shareholders in the first quarter of 2016 was RMB214.0 million (US$33.2 million), a 52.6% increase from the corresponding period in 2015.

 

1  Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.448 to US$1.00, the effective noon buying rate for March 31, 2016 as set forth in the H.10 statistical release of the Federal Reserve Board.
2  Noah’s non-GAAP financial measures are its corresponding GAAP financial measures as adjusted by excluding the effects of all forms of share-based compensation.

 

1


FIRST QUARTER 2016 OPERATIONAL UPDATES

Wealth Management Business

The Company’s wealth management business provides global wealth investment and asset allocation services to high net worth individuals and enterprise clients in China.

 

    The total number of registered clients as of March 31, 2016 was 105,557, a 40.9% increase since March 31, 2015, consisting of 102,330 registered individual clients, 3,108 registered enterprise clients and 119 wholesale clients that have entered into cooperation agreements with the Company.

 

    Total number of active clients3 during the first quarter of 2016 was 4,948, a 6.2% decrease from the corresponding period in 2015, and a 7.5% increase from the fourth quarter of 2015.

 

    The aggregate value of wealth management products distributed by the Company during the first quarter of 2016 was RMB24.8 billion (US$3.8 billion), representing a 0.9% increase from the corresponding period in 2015, and a 23.8% increase from the fourth quarter of 2015.

 

Product type    Three months ended March 31,  
     2015     2016  
     (RMB in billions, except percentages)  

Fixed income products

     12.2         49.5     16.1         65.1

Private equity products

     5.4         21.9     6.1         24.4

Secondary market equity fund products

     6.5         26.6     2.3         9.3

Other products

     0.5         2.0     0.3         1.2
  

 

 

    

 

 

   

 

 

    

 

 

 

All products

     24.6         100.0     24.8         100
  

 

 

    

 

 

   

 

 

    

 

 

 

 

    The average transaction value per client4 in the first quarter of 2016 was RMB5.0 million (US$0.8 million), a 7.6% increase from the corresponding period in 2015, reflecting a change in product mix.

 

    The coverage network included 166 branches and sub-branches covering 68 cities as of March 31, 2016, up from 135 branches and sub-branches covering 67 cities as of December 31, 2015, and 112 branches and sub-branches covering 64 cities as of March 31, 2015.

 

    The number of relationship managers was 1,137 as of March 31, 2016, up from 1,098 and 834 as of December 31, 2015 and March 31, 2015, respectively.

Asset Management Business

The Company’s asset management business develops and manages financial products denominated in both domestic (RMB) and foreign currencies. These financial products include real estate funds and funds of funds, including private equity funds, real estate funds, hedge funds and fixed income funds.

 

    The total assets under management as of March 31, 2016 were RMB94.6 billion (US$14.7 billion), a 60.7% increase from March 31, 2015 and a 9.2% increase from December 31, 2015.

 

3  “Active clients” refers to registered clients who purchased wealth management products distributed by Noah during the period specified.
4  “Average transaction value per client” refers to the average value of wealth management products distributed by Noah that were purchased by active clients during the period specified.

 

2


Product type    As of December 31,
2015
    Asset
Growth
     Asset
Expiration/
Redemption
     As of March 31,
2016
 
     (RMB billions, except percentages)  

Real estate funds and real estate funds of funds

     31.8         36.7     7.2         11.6         27.4         28.9

Private equity funds of funds

     37.9         43.7     6.5         —           44.4         46.9

Secondary market equity funds of funds

     10.7         12.3     1.0         1.7         10.0         10.6

Other fixed income funds of funds

     6.3         7.3     7.7         1.1         12.8         13.6
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

All products

     86.7         100.0     22.3         14.4         94.6         100.0
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

Internet Finance Business

The Company’s internet finance business provides financial products and services through a proprietary internet finance platform targeting aspiring high net worth individuals in China.

 

    The aggregate value of financial products distributed by the Company through its internet finance platform in the first quarter of 2016 was RMB1.9 billion (US$293.5 million), a 12.2% decrease from the first quarter of 2015.

 

    Total number of enterprise clients as of March 31, 2016 was 645, up from 320 and 634 as of March 31, 2015 and December 31, 2015, respectively.

 

    Total number of individual clients as of March 31, 2016 was 294,151, up from 63,672 and 276,738 as of March 31, 2015 and December 31, 2015, respectively.

Mr. Kenny Lam, Group President of Noah, commented, “The macro environment in the first quarter was one of the most volatile in recent years. With our cautious approach to risk management and product selection, we have effectively managed this volatility and continue to deliver solid results. Our clients recognize the benefits of our commitment to long term value investing. We remain focused on building a sustainable, leading wealth and asset management platform.”

FIRST QUARTER 2016 FINANCIAL RESULTS

Net Revenues

Net revenues for the first quarter of 2016 were RMB607.2 million (US$94.2million), a 35.6% increase from the corresponding period in 2015, primarily due to increases in one-time commissions and recurring service fees.

 

    Wealth Management Business

 

    Net revenues from one-time commissions for the first quarter of 2016 were RMB274.8 million (US$42.6 million), a 43.0% increase from the corresponding period in 2015. The increase was primarily due to the change in the product mix.

 

    Net revenues from recurring service fees for the first quarter of 2016 were RMB168.6 million (US$26.1 million), a 24.4% increase from the corresponding period in 2015. The increase was mainly due to the cumulative effect of finance products with recurring service fees previously distributed by the Company.

 

3


    Net revenues from performance-based income for the first quarter of 2016 were RMB6.8 million (US$1.1 million), a 24.0% decrease from the corresponding period in 2015.

 

    Net revenues from other service fees for the first quarter of 2016 were RMB13.5 million (US$2.1 million), compared with RMB5.2 million in the corresponding period of 2015.

 

    Asset Management Business

 

    Net revenues from recurring service fees for the first quarter of 2016 were RMB127.3 million (US$19.7 million), a 57.9% increase from the corresponding period in 2015. The increase was primarily due to the increase in assets under management by the Company.

 

    Net revenues from performance-based income for the first quarter of 2016 were RMB9.1 million (US$1.4 million), a 43.5% decrease compared with the corresponding period in 2015.

 

    Internet Finance Business

 

    Net revenues for the first quarter of 2016 were RMB5.8 million (US$0.9 million), a 36.2% decrease from the corresponding period in 2015, primarily due to the Company’s internet finance business’ strategic change to focus more on distribution of standard products.

Operating costs and expenses

Operating costs and expenses include compensation and benefits, selling expenses, general and administrative expenses, other operating expenses and government subsidies. Operating costs and expenses for the first quarter of 2016 were RMB379.8 million (US$58.9 million), a 24.3% increase from the corresponding period in 2015. The increase was mainly driven by growth in compensation and benefits, increased rental and related expenses associated with the new head office building which was put into use in the first quarter of 2016 and increased marketing expenses, and was partially offset by a RMB68.9 million (US$10.7 million) increase in government subsidies received in the first quarter of 2016 compared with the first quarter of 2015.

 

    Wealth Management Business

Operating costs and expenses for the first quarter of 2016 were RMB330.4 million (US$51.2 million), a 55.8% increase from the corresponding period in 2015.

 

    Compensation and benefits includes compensation for relationship managers and back-office employees. Compensation and benefits for the first quarter of 2016 were RMB236.0 million (US$36.6 million), a 51.3% increase from the corresponding period in 2015. In the first quarter of 2016, relationship manager compensation increased by 43.4% from the corresponding period in 2015, primarily driven by an increase in the number of relationship managers and a change of product mix to include more insurance brokerage business. Other compensation for the first quarter of 2016 increased by 63.4% from the corresponding period in 2015, primarily driven by an increase in the number of back-office employees.

 

4


    Selling expenses for the first quarter of 2016 were RMB58.8 million (US$9.1 million), a 54.4% increase from the corresponding period in 2015, primarily due to an increase in client events and other marketing initiatives, and an increase in rental fees.

 

    General and administrative expenses for the first quarter of 2016 were RMB24.6 million (US$3.8 million), an 81.9% increase from the corresponding period in 2015, mainly due to an increase in rental and related expenses associated with the new head office building which was put into use in the first quarter of 2016.

 

    Other operating expenses, which include other costs incurred directly in relation to the Company’s revenues, for the first quarter of 2016 were RMB11.1 million (US$1.7 million), an increase of 150.0% from the corresponding period in 2015. The increase was primarily due to the growth of other businesses within the wealth management segment.

 

    Government subsidies represent cash subsidies received from local governments for general corporate purposes. The Company received RMB0.1 million (US$9.9 thousand) in government subsidies for the wealth management business in the first quarter of 2016, compared to nil in the corresponding period of 2015.

 

    Asset Management Business

Operating costs and expenses for the first quarter of 2016 included compensation and benefits and operation expenses of RMB60.0 million (US$9.3 million) and government subsidy of RMB68.9 million (US$10.7 million).

 

    Compensation and benefits include compensation of managers of institutional client relationships, fund managers and back-office employees. Compensation and benefits for the first quarter of 2016 were RMB43.4 million (US$6.7 million), an 8.1% increase from the corresponding period in 2015. The increase was primarily due to an increase in the number of back-office employees.

 

    Selling expenses for the first quarter of 2016 were RMB1.9 million (US$0.3 million), compared with RMB2.3 million in the corresponding period of 2015, representing a decrease of 16.9% year over year.

 

    General and administrative expenses for the first quarter of 2016 were RMB12.4 million (US$1.9 million), a 13.3% decrease from the corresponding period in 2015, primarily due to decreased consultant expenses.

 

    Government subsidies represent cash subsidies received from local governments for general corporate purposes. The Company received RMB68.9 million (US$10.7 million) in government subsidies for the asset management business in the first quarter of 2016, compared to nil in the corresponding period in 2015.

 

    Internet Finance Business

Operating costs and expenses for the first quarter of 2016 were RMB58.3 million (US$9.0 million), a 60.8% increase from the corresponding period in 2015, and represented the Company’s expenses in human resources, marketing and internet infrastructure, as well as expenses incurred in promoting the Company’s internet finance business. Operating costs and expenses for the first quarter of 2016 primarily consisted of compensation and benefits of RMB33.9 million (US$5.3 million), selling expenses of RMB7.2 million (US$1.1 million), general and administrative expenses of RMB13.2 million (US$2.0 million) and other operating expenses of RMB3.9 million (US$0.6 million).

 

5


Operating Margin

Operating margin for the first quarter of 2016 was 37.4% compared to 31.7% for the corresponding period in 2015. The increase was primarily due to an increase in government subsidies received in the first quarter of 2016 compared with the first quarter of 2015.

 

    Wealth Management Business

Operating margin for the first quarter of 2016 was 28.7%, compared to 38.0% for the corresponding period in 2015 and 11.7% in the fourth quarter of 2015. The decrease year-on-year was mainly because operating costs and expenses grew faster than net revenues in the first quarter of 2016, as compared to the first quarter of 2015.

 

    Asset Management Business

Operating margin increased to 106.5% for the first quarter of 2016 from 40.7% for the corresponding period in 2015. The increase was primarily due to the RMB68.9 million (US$10.7 million) in government subsidies received in the first quarter of 2016, compared to nil in the first quarter of 2015.

 

    Internet Finance Business

Operating loss for the first quarter of 2016 was RMB52.5 million (US$8.1 million) compared with RMB27.2 million for the corresponding period of the prior year and RMB 56.0 million in the fourth quarter of 2015.

Income Tax Expenses

Income tax expenses for the first quarter of 2016 were RMB53.4 million (US$8.3 million), a 40.3% increase from the corresponding period in 2015, in line with the year-over-year growth in taxable income.

Net Income

 

    Net Income

 

    Net income attributable to Noah shareholders for the first quarter of 2016 was RMB199.0 million (US$30.9 million), a 50.7% increase from the corresponding period in 2015.

 

    Net margin for the first quarter of 2016 was 31.7%, as compared to 28.7% for the corresponding period in 2015.

 

    Net income per basic and diluted ADS for the first quarter of 2016 was RMB3.54 (US$0.55) and RMB3.38 (US$0.52), respectively, as compared to RMB2.35 and RMB2.29, respectively, for the corresponding period in 2015.

 

    Non-GAAP Net Income Attributable to Noah Shareholders

 

    Non-GAAP net income attributable to Noah shareholders for the first quarter of 2016 was RMB214.0 million (US$33.2 million), a 52.6% increase from the corresponding period in 2015.

 

6


    Non-GAAP net margin for the first quarter of 2016 was 34.2%, as compared to 30.5% for the corresponding period in 2015.

 

    Non-GAAP net income per diluted ADS for the first quarter of 2016 was RMB3.63 (US$0.56), as compared to RMB2.43 for the corresponding period in 2015.

Balance Sheet and Cash Flow

As of March 31, 2016, the Company had RMB2,480.3 million (US$384.7 million) in cash and cash equivalents, compared to RMB1,703.2 million as of March 31, 2015 and RMB2,132.9 million as of December 31, 2015.

Cash inflow from the Company’s operating activities during the first quarter of 2016 was RMB730.8 million (US$113.3 million), an increase from RMB247.2 million in the fourth quarter of 2015, mainly due to the temporary impact of other current liabilities.

Cash outflow from the Company’s investing activities during the first quarter of 2016 was RMB381.1 million (US$59.1 million), a change from RMB87.5 million cash inflow in the fourth quarter of 2015, primarily due to an increase in investments in short-term and long-term investments.

Cash inflow from the Company’s financing activities for the first quarter of 2016 was RMB0.2 million (US$23.7 thousand).

2016 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2016 will be in the range of RMB690 million to RMB720 million, an increase of 14.4% to 19.4% compared to the full year 2015. This estimate reflects management’s current business outlook and is subject to change.

CONFERENCE CALL

Senior management will host two conference calls to discuss the Company’s first quarter 2016 unaudited financial results and recent business activities, one in English and one in Mandarin Chinese.

The conference calls may be accessed with the following details:

 

English language conference call
Date/Time   

Monday, May 23, 2016 at 8:00 p.m., U.S. Eastern Time

Tuesday, May 24, 2016 at 8:00 a.m., Hong Kong Time

Dial in details   
- United States Toll Free    +1-888-346-8982
- Mainland China Toll Free    4001-201203
- Hong Kong Toll Free    800-905-945
- International    +1-412-902-4272
Conference Title    Noah Holdings Limited First Quarter 2016 Earnings Call
Participant Password    Noah Holdings

A telephone replay will be available starting 1 hour after the end of the conference call until May 30, 2016 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10086145.

 

7


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.noahwm.com.

 

Chinese language conference call
Date/Time   

Monday , May 23, 2016 at 9:30 p.m., U.S. Eastern Time

Tuesday, May 24, 2016 at 9:30 a.m., Hong Kong Time

Dial in details   
- Mainland China    400-681-0220
- Hong Kong Toll Free    800-968-112
- International    +86-23-8682-9200
Conference Title    Noah Holdings Limited First Quarter 2016 Earnings Call (Chinese Language)
Participant Password    201893#

A telephone replay will be available starting 1 hour after the end of the conference call until May 30, 2016 at 400-681-0221 (Mainland China) or +86-23-8682-9250 (International). The conference reference number is234265#, and the replay password is 350157#.

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.noahwm.com.

DISCUSSION OF NON-GAAP FINANCIAL MEASURES:

In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.

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 measure 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 non-GAAP net income results reflecting adjustments to exclude the impact of share-based compensation to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income, non-GAAP income per diluted ADS and non-GAAP net margin provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options in the periods presented. The Company utilized the non-GAAP financial results to make financial results comparable period to period and to better understand its historical business operations.

ABOUT NOAH HOLDINGS LIMITED

Founded in 2005, Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management services provider with a focus on global services for high net worth individuals and enterprises in China. In the first quarter of 2016, Noah distributed over RMB24.8 billion (US$3.8 billion) of wealth management products. As of March 31, 2016, Noah had assets under management of RMB94.6 billion (US$14.7 billion).

 

8


Noah distributes a wide array of wealth management products, including fixed income products, private equity fund products, mutual fund products and insurance products. Noah also develops and manages financial products denominated in both domestic (RMB) and foreign currencies, covering real estate funds and funds of funds, including private equity funds, real estate funds, hedge funds and fixed income funds through Gopher Asset Management. In addition, in 2014, the Company launched a proprietary internet finance platform to provide financial products and services to aspiring high net worth individuals and enterprise clients in China. Noah delivers customized financial solutions to clients through a network of 1,137 relationship managers across 166 branches and sub-branches in 68 cities in China, and serves the international investment needs of its clients through a wholly owned subsidiary in Hong Kong. The Company’s wealth management business had 105,557 registered clients as of March 31, 2016.

For more information please visit Noah at ir.noahwm.com.

FOREIGN CURRENCY TRANSLATION

Effective October 1, 2015, the Company changed its reporting currency from U.S. dollars (“US$”) to Chinese Renminbi (“RMB”). The change in reporting currency is to better reflect the Company’s performance, as the majority of the Company’s operations are conducted in RMB, to align the Company’s reporting currency with its underlying operations and to reduce the impact that the increased volatility of the RMB to US$ exchange rate will have on the Company’s reported operating results. Prior to October 1, 2015, the Company reported its annual and quarterly consolidated balance sheets and consolidated statements of income and comprehensive income and shareholder’s equity and cash flows in US$. In this announcement, the unaudited financial results for the quarter ended March 31, 2016 are stated in RMB. The related financial statements prior to October 1, 2015 have been recast to reflect RMB as the reporting currency for comparison to the financial results for the quarter ended March 31, 2016.

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 RMB6.448 to US$1.00, the effective noon buying rate for March 31, 2016 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 2016 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 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 quality 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 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 applicable law.

 

9


Contacts:

Noah Holdings Limited

Steve Zeng

Noah Holdings Limited

Tel: +86-21-8035-9221

ir@noahwm.com

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

10


Noah Holdings Limited

Condensed Consolidated Balance Sheets

(In RMB)

(unaudited)

 

     December 31,
2015
     As of
March 31,
2016
     March 31,
2016
 
     RMB      RMB      USD  

Assets

  

Current assets:

  

Cash and cash equivalents

     2,132,923,674         2,480,303,362         384,662,432   

Restricted cash

     1,000,000         1,000,000         155,087   

Short-term investments

     560,073,899         594,827,536         92,249,928   

Accounts receivable, net of allowance for doubtful accounts of nil at December 31, 2015 and March 31, 2016

     122,346,687         158,429,494         24,570,331   

Loans receivable

     132,109,897         140,904,788         21,852,480   

Deferred tax assets

     —           —           —     

Amounts due from related parties

     238,236,268         290,000,245         44,975,224   

Other current assets

     75,141,655         174,747,211         27,100,994   
  

 

 

    

 

 

    

 

 

 

Total current assets

     3,261,832,080         3,840,212,636         595,566,476   

Long-term investments

     251,781,945         412,329,808         63,946,931   

Investment in affiliates

     326,155,843         385,289,302         59,753,303   

Property and equipment, net

     196,475,249         210,713,490         32,678,891   

Non-current deferred tax assets

     43,863,568         43,720,740         6,780,512   

Other non-current assets

     16,885,730         34,390,714         5,333,547   
  

 

 

    

 

 

    

 

 

 

Total Assets

     4,096,994,415         4,926,656,690         764,059,660   
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

  

Current liabilities:

  

Accrued payroll and welfare expenses

     494,688,785         323,473,235         50,166,445   

Income tax payable

     61,650,980         86,414,268         13,401,717   

Amounts due to related parties

     1,060         1,060         164   

Deferred revenues

     68,425,735         124,322,025         19,280,711   

Deferred tax liabilities

     1,159,774         1,239,554         192,239   

Other current liabilities

     340,904,047         1,045,695,407         162,173,605   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     966,830,381         1,581,145,549         245,214,880   

Non-current uncertain tax position liabilities

     67,248         67,248         10,429   

Convertible notes

     518,224,000         515,840,000         80,000,000   

Other non-current liabilities

     77,876,237         84,752,980         13,144,073   
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     1,562,997,866         2,181,805,777         338,369,382   
  

 

 

    

 

 

    

 

 

 

Equity

     2,533,996,549         2,744,850,913         425,690,278   
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     4,096,994,415         4,926,656,690         764,059,660   
  

 

 

    

 

 

    

 

 

 

 

11


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

           Three months ended        
     March 31,     March 31,     March 31,        
     2015     2016     2016     Change  
Revenues:    RMB     RMB     USD        

Third-party revenues

        

One-time commissions5

     124,986,513        228,091,653        35,374,016        82.5

Recurring service fees

     79,054,925        107,031,782        16,599,222        35.4

Performance-based income

     26,361,641        9,651,835        1,496,873        (63.4 %) 

Other service fees

     14,460,356        20,030,783        3,106,511        38.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     244,863,435        364,806,053        56,576,621        49.0

Related party revenues

        

One-time commissions5

     77,325,133        60,579,007        9,395,007        (21.7 %) 

Recurring service fees

     148,136,876        202,265,842        31,368,772        36.5

Performance-based income

     —          6,997,951        1,085,290        —     

Other service fees

     140,759        619,353        96,054        340.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     225,602,768        270,462,153        41,945,123        19.9

Total revenues

     470,466,203        635,268,206        98,521,744        35.0

Less: business taxes and related surcharges

     (22,815,609     (28,110,614     (4,359,587     23.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     447,650,594        607,157,592        94,162,158        35.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (99,847,423     (135,594,705     (21,028,955     35.8

Performance fee compensation

     (5,366,169     (3,346,509     (519,000     (37.6 %) 

Other Compensations

     (114,782,562     (174,404,709     (27,047,877     51.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (219,996,154     (313,345,923     (48,595,832     42.4

Selling expenses

     (43,552,205     (67,902,033     (10,530,712     55.9

General and administrative expenses

     (35,383,324     (50,213,661     (7,787,478     41.9

Other operating expenses

     (6,698,544     (17,298,096     (2,682,707     158.2

Government subsidies

     —          68,941,562        10,691,930        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (305,630,227     (379,818,151     (58,904,800     24.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     142,020,367        227,339,441        35,257,357        60.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     8,788,817        8,677,696        1,345,797        (1.3 %) 

Interest expenses

     (3,058,340     (4,664,889     (723,463     52.5

Investment income

     8,628,912        8,067,380        1,251,145        (6.5 %) 

Other income

     777,180        646,557        100,272        (16.8 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     15,136,569        12,726,744        1,973,751        (15.9 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and loss from equity in affiliates

     157,156,936        240,066,185        37,231,108        52.8

Income tax expense

     (38,050,557     (53,394,844     (8,280,838     40.3

Income from equity in affiliates

     9,269,578        5,903,283        915,522        (36.3 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     128,375,957        192,574,624        29,865,792        50.0

Less: net loss attributable to non-controlling Interests

     (3,702,516     (6,424,676     (996,383     73.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah Shareholders

     132,078,473        198,999,300        30,862,174        50.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per ADS, basic

     2.35        3.54        0.55        50.6

Income per ADS, diluted

     2.29        3.38        0.52        47.6

Margin analysis:

        

Operating margin

     31.7     37.4     37.4  

Net margin

     28.7     31.7     31.7  

Weighted average ADS equivalent: [1]

        

Basic

     56,158,164        56,176,502        56,176,502     

Diluted

     58,816,048        60,251,430        60,251,430     

ADS equivalent outstanding at end of period

     56,201,776        56,214,768        56,214,768     

 

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

 

5  To realign the Company’s services provided under different business segments, starting from the first quarter of 2016, the Company reclassifies some of the revenues under “other service fees” to “one-time commissions”. Presentation of prior periods has been reclassified to reflect the same criteria.

 

12


Noah Holdings Limited

Condensed Comprehensive Income Statements

(In RMB)

(unaudited)

 

           Three months ended              
     March 31,
2015
    March 31,
2016
    March 31,
2016
    Change  
     RMB     RMB     USD        

Net income

     128,375,957        192,574,624        29,865,792        50.0

Other comprehensive income, net of tax:

    

Foreign currency translation adjustments

     (434,196     (1,546,586     (239,855     256.2

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

     227,276        4,707,100        730,009        1971.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     128,169,037        195,735,138        30,355,946        52.7

Less: Comprehensive loss attributable to non-controlling interests

     (3,702,516     (6,436,694     (998,247     73.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Noah Shareholders

     131,871,553        202,171,832        31,354,192        53.3
  

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Noah Holdings Limited

Supplemental Information

(unaudited)

 

     As of      Change  
     March 31, 2015      March 31, 2016     

Number of registered clients

     74,895         105,557         40.9

Number of relationship managers

     834         1,137         36.3

Number of branch offices

     64         68         6.3
     Three months ended      Change  
     March 31, 2015      March 31, 2016     
     (in millions of RMB, except number of active clients and
percentages)
 

Number of active clients

     5,275         4,948         (6.2 %) 

Transaction value:

        

Fixed income products

     12,158         16,144         32.8

Private equity fund products

     5,380         6,066         12.8

Secondary market equity fund products

     6,546         2,317         (64.6 %) 

Other products, including mutual fund products, private securities investment funds and insurance products

     502         287         (42.9 %) 
  

 

 

    

 

 

    

 

 

 

Total transaction value

     24,586         24,813         0.9
  

 

 

    

 

 

    

 

 

 

Average transaction value per client

     4.66         5.01         7.6

 

14


Noah Holdings Limited

Segment Condensed Income Statements

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

(unaudited)

 

     Three months ended March 31, 2015        
     Wealth
Management
Business
    Asset
Management
Business
    Internet
Finance
    Total  
     RMB     RMB     RMB     RMB  

Revenues:

        

Third-party revenues

        

One-time commissions

     124,986,513        —          —          124,986,513   

Recurring service fees

     64,201,316        14,853,609        —          79,054,925   

Performance-based income

     9,388,747        16,972,894        —          26,361,641   

Other service fees

     5,468,713        —          8,991,643        14,460,356   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     204,045,289        31,826,503        8,991,643        244,863,435   
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

        

One-time commissions

     77,325,133        —          —          77,325,133   

Recurring service fees

     78,439,019        69,697,857        —          148,136,876   

Other service fees

     —          —          140,759        140,759   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     155,764,152        69,697,857        140,759        225,602,768   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     359,809,441        101,524,360        9,132,402        470,466,203   

Less: business taxes and related surcharges

     (18,031,993     (4,749,013     (34,603     (22,815,609
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     341,777,448        96,775,347        9,097,799        447,650,594   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

     —          —          —          —     

Relationship manager compensation

     (94,520,458     (3,094,244     (2,232,721     (99,847,423

Performance Fee Compensation

     —          (5,366,169     —          (5,366,169

Other compensation

     (61,448,038     (31,702,342     (21,632,182     (114,782,562
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (155,968,496     (40,162,755     (23,864,903     (219,996,154
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling expenses

     (38,063,878     (2,286,714     (3,201,613     (43,552,205

General and administrative expenses

     (13,547,607     (14,258,598     (7,577,119     (35,383,324

Other operating expenses

     (4,450,416     (637,763     (1,610,365     (6,698,544
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (212,030,397     (57,345,830     (36,254,000     (305,630,227
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     129,747,051        39,429,517        (27,156,201     142,020,367   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

15


Noah Holdings Limited

Segment Condensed Income Statements

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

(unaudited)

 

     Three months ended March 31, 2016        
     Wealth
Management
Business
    Asset Management
Business
    Internet
Finance
    Total  
     RMB     RMB     RMB     RMB  

Revenues:

        

Third-party revenues

        

One-time commissions

     227,814,903        276,750        —          228,091,653   

Recurring service fees

     93,597,180        13,434,602        —          107,031,782   

Performance-based income

     7,084,942        2,566,893        —          9,651,835   

Other service fees

     13,507,742        —          6,523,041        20,030,783   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     342,004,767        16,278,245        6,523,041        364,806,053   
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

        

One-time commissions

     59,505,300        1,073,707        —          60,579,007   

Recurring service fees

     82,646,476        119,619,366        —          202,265,842   

Performance-based income

     —          6,997,951        —          6,997,951   

Other service fees

     614,194        —          5,159        619,353   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     142,765,970        127,691,024        5,159        270,462,153   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     484,770,737        143,969,269        6,528,200        635,268,206   

Less: business taxes and related surcharges

     (21,128,796     (6,261,747     (720,071     (28,110,614
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     463,641,941        137,707,522        5,808,129        607,157,592   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (135,564,480     (29,308     (917     (135,594,705

Performance fee compensation

     —          (3,346,509     —          (3,346,509

Other compensation

     (100,410,596     (40,050,216     (33,943,897     (174,404,709
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (235,975,076     (43,426,033     (33,944,814     (313,345,923

Selling expenses

     (58,757,267     (1,900,708     (7,244,058     (67,902,033

General and administrative expenses

     (24,644,143     (12,360,500     (13,209,018     (50,213,661

Other operating expenses

     (11,124,898     (2,270,719     (3,902,479     (17,298,096

Government subsidies

     64,000        68,877,562        —          68,941,562   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (330,437,384     8,919,602        (58,300,369     (379,818,151
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     133,204,557        146,627,124        (52,492,240     227,339,441   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

16


Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

(In RMB, except for ADS data and percentages)

(unaudited)

 

     Three months ended        
     March 31,
2015
    March 31,
2016
    Change  
     RMB     RMB        

Net margin

     28.7     31.7  

Adjusted net margin (non-GAAP)*

     30.5     34.2  

Net income attributable to Noah Shareholders

     132,078,473        198,999,300        50.7

Adjustment for share-based compensation related to:

      

Share options

     2,840,421        12,366,451        335.4

Restricted shares

     5,279,882        2,597,654        (50.8 %) 
  

 

 

   

 

 

   

 

 

 

Adjusted net income attributable to Noah Shareholders (non-GAAP)*

     140,198,776        213,963,404        52.6

Net income attributable to Noah Shareholders per ADS, diluted

     2.29        3.38        47.6

Adjusted net income attributable to Noah Shareholders per ADS, diluted (non-GAAP)*

     2.43        3.63        49.4

 

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

 

17