Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2016

 

 

Commission File Number: 001-34936

 

 

Noah Holdings Limited

 

 

No. 1687 Changyang Road, Changyang Valley, Building 2

Shanghai 200090, People’s Republic of China

(86) 21 8035 9221

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  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: August 16, 2016

 

2


EXHIBIT INDEX

 

Exhibit 99.1 – Press Release

 

3


Exhibit 99.1

NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2016

SHANGHAI, August 15, 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 second 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 convenience purpose only1. Prior period numbers have been recast into the new reporting currency.

SECOND QUARTER 2016 FINANCIAL HIGHLIGHTS

 

  Net revenues in the second quarter of 2016 were RMB651.7 million (US$98.1 million), a 12.8% increase from the corresponding period in 2015.

 

(RMB millions, except percentages)    Q2
2015
     Q2 2015
Segment %
    Q2
2016
     Q2 2016
Segment %
    YoY Change  

Wealth management

     450.9         78.0     505.2         77.5     12.0

Asset management

     109.7         19.0     135.2         20.7     23.2

Internet finance

     17.2         3.0     11.3         1.7     (34.3 %) 
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total net revenues

     577.9         100.0     651.7         100.0     12.8
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

  Income from operations in the second quarter of 2016 was RMB194.1 million (US$29.2 million), a 0.4% increase from the corresponding period in 2015.

 

(RMB millions, except percentages)    Q2
2015
    Q2 2015
Segment %
    Q2
2016
    Q2 2016
Segment %
    YoY Change  

Wealth management

     169.5        87.6     167.4        86.2     (1.2 %) 

Asset management

     55.8        28.8     68.8        35.4     23.4

Internet finance

     (31.8     (16.5 %)      (42.1     (21.7 %)      32.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total income from operations

     193.4        100.0     194.1        100.0     0.4
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

  Net income attributable to Noah shareholders in the second quarter of 2016 was RMB182.3 million (US$27.4 million), a 7.6% increase from the corresponding period in 2015.

 

  Non-GAAP2 net income attributable to Noah shareholders in the second quarter of 2016 was RMB197.9 million (US$29.8 million), a 3.3% increase from the corresponding period in 2015.

 

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


SECOND 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 June 30, 2016 was 114,870, a 40.2% increase from June 30, 2015, consisting of 111,643 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 second quarter of 2016 was 4,927, a 9.0% decrease from the corresponding period in 2015, and a 0.4% decrease from the first quarter of 2016.

 

  The aggregate value of wealth management products distributed by the Company during the second quarter of 2016 was RMB27.7 billion (US$4.2 billion), a 2.0% decrease from the corresponding period in 2015, and an 11.8% increase from the first quarter of 2016.

 

Product type    Three months ended June 30,  
     2015     2016  
     (RMB in billions, except percentages)  

Fixed income products

     5.7         20.3     17.0         61.2

Private equity products

     9.9         34.9     7.6         27.3

Secondary market equity fund products

     12.6         44.7     2.8         10.1

Other products

     0.0         0.2     0.4         1.4
  

 

 

    

 

 

   

 

 

    

 

 

 

All products

     28.3         100.0     27.7         100.0
  

 

 

    

 

 

   

 

 

    

 

 

 

 

  The average transaction value per client4 in the second quarter of 2016 was RMB5.6 million (US$0.8 million), a 7.7% increase from the corresponding period in 2015, reflecting a change in product mix.

 

  The coverage network included 175 branches and sub-branches covering 68 cities as of June 30, 2016, up from 166 branches and sub-branches covering 68 cities as of March 31, 2016, and 112 branches and sub-branches covering 64 cities as of June 30, 2015.

 

  The number of relationship managers was 1,093 as of June 30, 2016, up from 953 as of June 30, 2015, and down from 1,137 as of March 31, 2016.

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 June 30, 2016 were RMB101.2 billion (US$15.2 billion), a 57.0% increase from June 30, 2015 and a 6.9% increase from March 31, 2016.

 

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 March 31,
2016
    Asset
Growth
     Asset
Expiration/
Redemption
     As of June 30,
2016
 
     (RMB billions, except percentages)  

Real estate funds and real estate funds of funds

     27.4         28.9     8.0         13.7         21.6         21.4

Private equity funds of funds

     44.4         46.9     6.8         0.8         50.4         49.8

Secondary market equity funds of funds

     10.0         10.6     1.4         0.9         10.6         10.5

Other fixed income funds of funds

     12.8         13.6     6.5         0.8         18.5         18.3
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

 

All products

     94.6         100.0     22.8         16.2         101.2         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 second quarter of 2016 was RMB5.8 billion (US$874.6 million), a 72.4% increase from the second quarter of 2015.

 

  Total number of enterprise clients as of June 30, 2016 was 651, up from 354 and 645 as of June 30, 2015 and March 31, 2016, respectively.

 

  Total number of individual clients as of June 30, 2016 was 324,267, up from 131,985 and 294,151 as of June 30, 2015 and March 31, 2016, respectively.

Mr. Kenny Lam, Group President of Noah, commented, “In the context of a challenging macro environment in our home market, volatile capital markets, and heightened risk aversion among investors, we are pleased to have delivered steady results in the second quarter. This sustained performance was due primarily to our continuous efforts in product and service differentiation and innovation. The current environment does present strong headwinds but we will continue to invest in building a leading wealth and asset management platform both in China and globally. We are focused on long-term sustainable growth and are very excited about our long-term prospects.”

SECOND QUARTER 2016 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2016 were RMB651.7 million (US$98.1 million), a 12.8% 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 second quarter of 2016 were RMB291.9 million (US$43.9 million), a 31.6% increase from the corresponding period in 2015. The increase was primarily due to the change in the product mix.

 

3


    Net revenues from recurring service fees for the second quarter of 2016 were RMB194.7 million (US$29.3 million), a 25.4% increase from the corresponding period in 2015. The increase was mainly due to the cumulative effect of financial products with recurring service fees previously distributed by the Company.

 

    Net revenues from performance-based income for the second quarter of 2016 were RMB0.1 million (US$20.9 thousand), compared to RMB64.4 million in the corresponding period in 2015, mainly due to a decrease in performance-based income from secondary market products compared to the corresponding period in 2015.

 

    Net revenues from other service fees for the second quarter of 2016 were RMB18.4 million (US$2.8 million), compared with RMB9.4 million in the corresponding period of 2015.

 

  Asset Management Business

 

    Net revenues from recurring service fees for the second quarter of 2016 were RMB109.7 million (US$16.5 million), a 35.9% 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 second quarter of 2016 were RMB23.6 million (US$3.6 million), a 17.1% decrease compared with the corresponding period in 2015, mainly due to a decrease in performance-based income from secondary market products compared to the corresponding period in 2015.

 

  Internet Finance Business

 

    Net revenues for the second quarter of 2016 were RMB11.3 million (US$1.7 million), a 34.3% decrease from the corresponding period in 2015, primarily due to the Company’s internet finance business’ strategic change to focus more on standardized wealth management 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 second quarter of 2016 were RMB457.6 million (US$68.9 million), a 19.0% 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.

 

  Wealth Management Business

Operating costs and expenses for the second quarter of 2016 were RMB337.8 million (US$50.8 million), a 20.0% increase from the corresponding period in 2015.

 

    Compensation and benefits includes compensation for relationship managers and back-office employees. Compensation and benefits for the second quarter of 2016 were RMB251.6 million (US$37.9 million), a 10.4% increase from the corresponding period in 2015. In the second quarter of 2016, relationship manager compensation increased by 7.2% from the corresponding period in 2015, primarily driven by an increase in the number of relationship managers and a change of product mix. Other compensation for the second quarter of 2016 increased by 15.0% from the corresponding period in 2015, primarily driven by an increase in the number of back-office employees.

 

4


    Selling expenses for the second quarter of 2016 were RMB67.4 million (US$10.1 million), a 51.0% increase from the corresponding period in 2015, primarily due to an increase in rental expenses and client marketing initiatives.

 

    General and administrative expenses for the second quarter of 2016 were RMB31.9 million (US$4.8 million), a 98.9% increase from the corresponding period in 2015, mainly due to an increase in depreciation, consulting fees and training costs.

 

    Other operating expenses, which include other costs incurred directly in relation to the Company’s revenues, for the second quarter of 2016 were RMB21.1 million (US$3.2 million), an increase of 273.1% 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 RMB34.2 million (US$5.1 million) in government subsidies for the wealth management business in the second quarter of 2016, compared to RMB12.8 million in the corresponding period of 2015.

 

  Asset Management Business

Operating costs and expenses for the second quarter of 2016 included compensation and benefits and operation expenses of RMB66.4 million (US$10.0 million), a 23.1% increase from the corresponding period in 2015.

 

    Compensation and benefits include compensation of managers of institutional client relationships, fund managers and back-office employees. Compensation and benefits for the second quarter of 2016 were RMB44.0 million (US$6.6 million), a 12.4% decrease from the corresponding period in 2015. The decrease was primarily due to a decrease in performance fee compensation related to performance-based income.

 

    Selling expenses for the second quarter of 2016 were RMB4.4 million (US$0.7 million), compared with RMB4.7 million in the corresponding period of 2015, representing a decrease of 5.6% year over year.

 

    General and administrative expenses for the second quarter of 2016 were RMB18.4 million (US$2.8 million), a 101.1% increase from the corresponding period in 2015, primarily due to increased conference fees.

 

    Government subsidies represent cash subsidies received from local governments for general corporate purposes. The Company received RMB2.0 million (US$0.3 million) in government subsidies for the asset management business in the second quarter of 2016, compared to RMB15.9 million in the corresponding period in 2015.

 

  Internet Finance Business

Operating costs and expenses for the second quarter of 2016 were RMB53.4 million (US$8.0 million), a 8.8% 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 second quarter of 2016 primarily consisted of compensation and benefits of RMB32.6 million (US$4.9 million), selling expenses of RMB6.5 million (US$1.0 million), general and administrative expenses of RMB8.0 million (US$1.2 million) and other operating expenses of RMB6.4 million (US$1.0 million).

 

5


Operating Margin

Operating margin for the second quarter of 2016 was 29.8% compared to 33.5% for the corresponding period in 2015.

 

  Wealth Management Business

Operating margin for the second quarter of 2016 was 33.1%, compared to 37.6% for the corresponding period in 2015 and 28.7% in the first quarter of 2016. The year-on-year decrease was mainly because operating costs and expenses grew faster than net revenues in the second quarter of 2016, as compared to the second quarter of 2015.

 

  Asset Management Business

Operating margin for the second quarter of 2016 was 50.9%, flat compared to the corresponding period in 2015.

 

  Internet Finance Business

Operating loss for the second quarter of 2016 was RMB42.1 million (US$6.3 million) compared to RMB31.8 million for the corresponding period of the prior year and RMB52.5 million in the first quarter of 2016.

Income Tax Expenses

Income tax expenses for the second quarter of 2016 were RMB48.5 million (US$7.3 million), a 5.5% 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 second quarter of 2016 was RMB182.3 million (US$27.4 million), a 7.6% increase from the corresponding period in 2015.

 

    Net margin for the second quarter of 2016 was 27.0%, compared to 29.6% for the corresponding period in 2015.

 

    Net income per basic and diluted ADS for the second quarter of 2016 was RMB3.24 (US$0.49) and RMB3.10 (US$0.47), respectively, compared to RMB3.01 and RMB2.87, 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 second quarter of 2016 was RMB197.9 million (US$29.8 million), a 3.3% increase from the corresponding period in 2015.

 

    Non-GAAP net margin for the second quarter of 2016 was 29.4%, compared to 33.5% for the corresponding period in 2015.

 

    Non-GAAP net income per diluted ADS for the second quarter of 2016 was RMB3.37 (US$0.51), compared to RMB3.24 for the corresponding period in 2015.

 

6


Balance Sheet and Cash Flow

As of June 30, 2016, the Company had RMB1,398.9 million (US$210.5 million) in cash and cash equivalents, compared to RMB1,561.7 million as of June 30, 2015 and RMB2,480.3 million as of March 31, 2016.

Cash outflow from the Company’s operating activities during the second quarter of 2016 was RMB750.0 million (US$112.9 million). The decrease was mainly due to the temporary impact of other current assets and liabilities.

Cash outflow from the Company’s investing activities during the second quarter of 2016 was RMB550.5 million (US$82.8 million), primarily due to an increase in investments in affiliates and the temporary impact of amounts due from related parties.

Cash inflow from the Company’s financing activities for the second quarter of 2016 was RMB197.8 million (US$29.8 million), primarily due to the impact of other current liabilities.

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 a combined English and Chinese language conference call to discuss the Company’s second quarter 2016 unaudited financial results and recent business activities.

The conference calls may be accessed with the following details:

 

Conference call details
Date/Time   

Monday, August 15, 2016 at 8:00 p.m., U.S. Eastern Time

Tuesday, August 16, 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 Second Quarter 2016 Earnings Call
Participant Password    Noah Holdings

A telephone replay will be available starting one hour after the end of the conference call until August 22, 2016 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10090864.

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.

 

7


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 second quarter of 2016, Noah distributed over RMB27.7 billion (US$4.2 billion) of wealth management products. As of June 30, 2016, Noah had assets under management of RMB101.2 billion (US$15.2 billion).

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, including real estate funds and real estate funds of funds, private equity funds of funds, secondary market equity funds of funds and fixed income funds of 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 1,093 relationship managers across 175 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 114,870 registered clients as of June 30, 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 June 30, 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 June 30, 2016.

 

8


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 RMB6.6459 to US$1.00, the effective noon buying rate for June 30, 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 qualified employees; its ability to stay abreast of market trends and technological advances; its plans to invest in research and development to enhance its product choices and service offerings; competition in its industry in China and internationally; general economic and business conditions in China; and its ability to effectively protect its intellectual property rights and not to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.

Contacts:

Noah Holdings Limited

Steve Zeng

Noah Holdings Limited

Tel: +86-21-8035-9221

ir@noahwm.com

 

— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

 

9


Noah Holdings Limited

Condensed Consolidated Balance Sheets

(In RMB)

(unaudited)

 

     As of  
     March 31,
2016
     June 30,
2016
     June 30,
2016
 
     RMB      RMB      USD  

Assets

        

Current assets:

        

Cash and cash equivalents

     2,480,303,362         1,398,912,715         210,492,592   

Restricted cash

     1,000,000         1,000,000         150,469   

Short-term investments

     594,827,536         619,235,058         93,175,500   

Accounts receivable, net of allowance for doubtful accounts of nil at March 31, 2016 and June 30, 2016

     158,429,494         177,944,949         26,775,147   

Loans receivable

     140,904,788         135,277,584         20,355,044   

Amounts due from related parties

     290,000,245         625,554,748         94,126,416   

Other current assets

     174,747,211         823,292,955         123,879,829   
  

 

 

    

 

 

    

 

 

 

Total current assets

     3,840,212,636         3,781,218,009         568,954,996   

Long-term investments

     412,329,808         300,365,549         45,195,617   

Investment in affiliates

     385,289,302         479,367,925         72,129,873   

Property and equipment, net

     210,713,490         214,012,805         32,202,231   

Non-current deferred tax assets

     43,720,740         43,693,665         6,574,529   

Other non-current assets

     34,390,714         38,001,361         5,718,016   
  

 

 

    

 

 

    

 

 

 

Total Assets

     4,926,656,690         4,856,659,314         730,775,262   
  

 

 

    

 

 

    

 

 

 

Liabilities and Equity

        

Current liabilities:

        

Accrued payroll and welfare expenses

     323,473,235         411,009,653         61,844,092   

Income tax payable

     86,414,268         54,410,981         8,187,150   

Amounts due to related parties

     1,060         1,060         159   

Deferred revenues

     124,322,025         68,069,246         10,242,292   

Deferred tax liabilities

     1,239,554         1,696,765         255,310   

Other current liabilities

     1,045,695,407         756,454,329         113,822,707   
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,581,145,549         1,291,642,034         194,351,711   

Non-current uncertain tax position liabilities

     67,248         —           —     

Convertible notes

     515,840,000         531,672,000         80,000,000   

Other non-current liabilities

     84,752,980         97,410,830         14,657,282   
  

 

 

    

 

 

    

 

 

 

Total Liabilities

     2,181,805,777         1,920,724,864         289,008,993   
  

 

 

    

 

 

    

 

 

 

Equity

     2,744,850,913         2,935,934,450         441,766,269   
  

 

 

    

 

 

    

 

 

 

Total Liabilities and Equity

     4,926,656,690         4,856,659,314         730,775,262   
  

 

 

    

 

 

    

 

 

 

 

10


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

     Three months ended        
     June 30,     June 30,     June 30,        
     2015     2016     2016     Change  
     RMB     RMB     USD        

Revenues:

        

Third-party revenues

        

One-time commissions5

     104,371,558        209,490,198        31,521,720        100.7

Recurring service fees

     98,229,792        127,815,164        19,232,183        30.1

Performance-based income

     95,669,020        817,307        122,979        (99.1 %) 

Other service fees

     28,085,776        29,681,569        4,466,147        5.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     326,356,146        367,804,238        55,343,029        12.7
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

        

One-time commissions5

     129,924,861        89,970,664        13,537,770        (30.8 %) 

Recurring service fees

     150,511,712        182,165,855        27,410,261        21.0

Performance-based income

     2,243,237        23,316,750        3,508,441        939.4

Other service fees

     25,364        744,748        112,061        2836.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     282,705,174        296,198,017        44,568,534        4.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     609,061,320        664,002,255        99,911,563        9.0

Less: business taxes and related surcharges

     (31,183,765     (12,277,297     (1,847,349     (60.6 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     577,877,555        651,724,958        98,064,214        12.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (142,363,113     (147,103,056     (22,134,407     3.3

Performance fee compensation

     (7,200,000     (4,798,507     (722,025     (33.4 %) 

Other Compensations

     (157,002,659     (176,245,129     (26,519,377     12.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (306,565,772     (328,146,692     (49,375,809     7.0

Selling expenses

     (54,505,170     (78,248,146     (11,773,898     43.6

General and administrative expenses

     (31,448,235     (58,250,809     (8,764,924     85.2

Other operating expenses

     (20,673,257     (29,158,009     (4,387,368     41.0

Government subsidies

     28,737,436        36,183,227        5,444,443        25.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (384,454,998     (457,620,429     (68,857,556     19.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     193,422,557        194,104,529        29,206,658        0.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     8,989,185        11,093,668        1,669,250        23.4

Interest expenses

     (4,031,144     (4,861,995     (731,578     20.6

Investment income

     12,484,724        17,074,328        2,569,152        36.8

Other income (expense)

     193,259        (2,067,157     (311,042     (1169.6 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     17,636,024        21,238,844        3,195,781        20.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and loss from equity in affiliates

     211,058,581        215,343,373        32,402,440        2.0

Income tax expense

     (45,934,769     (48,470,810     (7,293,340     5.5

Income from equity in affiliates

     5,857,184        9,160,758        1,378,407        56.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     170,980,996        176,033,321        26,487,507        3.0

Less: net loss attributable to non-controlling Interests

     1,630,163        (6,221,769     (936,182     (481.7 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah Shareholders

     169,350,833        182,255,090        27,423,688        7.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Income per ADS, basic

     3.01        3.24        0.49        7.6

Income per ADS, diluted

     2.87        3.10        0.47        8.0

Margin analysis:

        

Operating margin

     33.5     29.8     29.8  

Net margin

     29.6     27.0     27.0  

Weighted average ADS equivalent: [1]

        

Basic

     56,248,968        56,271,504        56,271,504     

Diluted

     60,565,019        60,174,258        60,174,258     

ADS equivalent outstanding at end of period

     56,313,035        56,346,740        56,346,740     

 

[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.

 

11


Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)

 

     Six months ended        
     June 30,     June 30,     June 30,        
     2015     2016     2016     Change  
     RMB     RMB     USD        

Revenues:

        

Third-party revenues

        

One-time commissions6

     229,358,071        437,581,851        66,895,736        90.8

Recurring service fees

     177,284,717        234,846,946        35,831,405        32.5

Performance-based income

     122,030,661        10,469,142        1,619,852        (91.4 %) 

Other service fees

     42,546,132        49,712,352        7,572,658        16.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     571,219,581        732,610,291        111,919,650        28.3
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

        

One-time commissions5

     207,249,994        150,549,671        22,932,777        (27.4 %) 

Recurring service fees

     298,648,588        384,431,697        58,779,033        28.7

Performance-based income

     2,243,237        30,314,701        4,593,731        1251.4

Other service fees

     166,123        1,364,101        208,115        721.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     508,307,942        566,660,170        86,513,657        11.5
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     1,079,527,523        1,299,270,461        198,433,307        20.4

Less: business taxes and related surcharges

     (53,999,374     (40,387,911     (6,206,936     (25.2 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     1,025,528,149        1,258,882,550        192,226,372        22.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (242,210,536     (282,697,761     (43,163,362     16.7

Performance fee compensation

     (12,566,169     (8,145,016     (1,241,025     (35.2 %) 

Other Compensations

     (271,785,221     (350,649,838     (53,567,254     29.0
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (526,561,926     (641,492,615     (97,971,641     21.8

Selling expenses

     (98,057,375     (146,150,179     (22,304,610     49.0

General and administrative expenses

     (66,831,559     (108,464,470     (16,552,402     62.3

Other operating expenses

     (27,371,801     (46,456,105     (7,070,075     69.7

Government subsidies

     28,737,436        105,124,789        16,136,373        265.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (690,085,225     (837,438,580     (127,762,356     21.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     335,442,924        421,443,970        64,464,015        25.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income:

        

Interest income

     17,778,002        19,771,364        3,015,047        11.2

Interest expenses

     (7,089,484     (9,526,884     (1,455,041     34.4

Investment income

     21,113,636        25,141,708        3,820,297        19.1

Other income (expense)

     970,439        (1,420,600     (210,770     (246.4 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income

     32,772,593        33,965,588        5,169,532        3.6
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before taxes and loss from equity in affiliates

     368,215,517        455,409,558        69,633,548        23.7

Income tax expense

     (83,985,326     (101,865,654     (15,574,178     21.3

Income from equity in affiliates

     15,126,762        15,064,041        2,293,929        (0.4 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     299,356,953        368,607,945        56,353,299        23.1

Less: net loss attributable to non-controlling Interests

     (2,072,353     (12,646,445     (1,932,565     510.2
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Noah Shareholders

     301,429,306        381,254,390        58,285,862        26.5
  

 

 

   

 

 

   

 

 

   

 

 

 

 

6  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        
     June 30,     June 30,     June 30,        
     2015     2016     2016     Change  
     RMB     RMB     USD        

Net income

     170,980,996        176,033,321        26,487,507        3.0

Other comprehensive income, net of tax:

        

Foreign currency translation adjustments

     (188,468     7,072,279        1,064,157        (3852.5 %) 

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

     (2,044,059     (5,555,722     (835,962     171.8
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     168,748,469        177,549,878        26,715,701        5.2

Less: Comprehensive loss attributable to non-controlling interests

     1,630,059        (6,250,296     (940,474     (483.4 %) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Noah Shareholders

     167,118,410        183,800,174        27,656,175        10.0
  

 

 

   

 

 

   

 

 

   

 

 

 

 

13


Noah Holdings Limited

Supplemental Information

(unaudited)

 

     As of         
     June 30, 2015      June 30, 2016      Change  

Number of registered clients

     81,939         114,870         40.2

Number of relationship managers

     953         1,093         14.7

Number of branch offices

     64         68         6.3
     Three months ended         
     June 30, 2015      June 30, 2016      Change  
     (in millions of RMB, except number of active clients and
percentages)
 

Number of active clients

     5,412         4,927         (9.0 %) 

Transaction value:

        

Fixed income products

     5,746         16,987         195.6

Private equity fund products

     9,874         7,571         (23.3 %) 

Secondary market equity fund products

     12,647         2,810         (77.8 %) 

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

     44         405         819.3
  

 

 

    

 

 

    

 

 

 

Total transaction value

     28,311         27,747         (2.0 %) 
  

 

 

    

 

 

    

 

 

 

Average transaction value per client

     5.23         5.63         7.7

 

14


Noah Holdings Limited

Segment Condensed Income Statements

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

(unaudited)

 

     Three months ended Jun 30, 2015        
     Wealth
Management
Business
    Asset
Management
Business
    Internet
Finance
    Total  
     RMB     RMB     RMB     RMB  

Revenues:

        

Third-party revenues

        

One-time commissions

     104,256,557        115,001        —          104,371,558   

Recurring service fees

     83,568,566        14,661,226        —          98,229,792   

Performance-based income

     68,050,993        27,618,027        —          95,669,020   

Other service fees

     9,942,756        512,475        17,630,545        28,085,776   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     265,818,872        42,906,729        17,630,545        326,356,146   
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

        

One-time commissions

     129,924,861        —          —          129,924,861   

Recurring service fees

     80,494,872        70,016,840        —          150,511,712   

Performance-based income

     —          2,243,237        —          2,243,237   

Other service fees

     —          —          25,364        25,364   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     210,419,733        72,260,077        25,364        282,705,174   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     476,238,605        115,166,806        17,655,909        609,061,320   

Less: business taxes and related surcharges

     (25,322,488     (5,425,550     (435,727     (31,183,765
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     450,916,117        109,741,256        17,220,182        577,877,555   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (135,197,807     (2,282,885     (4,882,421     (142,363,113

Performance Fee Compensation

     —          (7,200,000     —          (7,200,000

Other compensation

     (92,732,020     (40,774,307     (23,496,332     (157,002,659
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (227,929,827     (50,257,192     (28,378,753     (306,565,772
  

 

 

   

 

 

   

 

 

   

 

 

 

Selling expenses

     (44,623,149     (4,687,639     (5,194,382     (54,505,170

General and administrative expenses

     (16,028,641     (9,126,827     (6,292,767     (31,448,235

Other operating expenses

     (5,662,518     (5,828,725     (9,182,014     (20,673,257

Government subsidies

     12,815,434        15,922,002        —          28,737,436   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (281,428,701     (53,978,381     (49,047,916     (384,454,998
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     169,487,416        55,762,875        (31,827,734     193,422,557   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

15


Noah Holdings Limited

Segment Condensed Income Statements

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

(unaudited)

 

     Three months ended Jun 30, 2016        
     Wealth
Management
Business
    Asset
Management
Business
    Internet
Finance
    Total  
     RMB     RMB     RMB     RMB  

Revenues:

        

Third-party revenues

        

One-time commissions

     209,149,472        340,726        —          209,490,198   

Recurring service fees

     110,291,809        17,523,355        —          127,815,164   

Performance-based income

     141,521        675,786        —          817,307   

Other service fees

     18,717,134        —          10,964,435        29,681,569   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total third-party revenues

     338,299,936        18,539,867        10,964,435        367,804,238   
  

 

 

   

 

 

   

 

 

   

 

 

 

Related party revenues

        

One-time commissions

     88,306,826        1,663,838        —          89,970,664   

Recurring service fees

     88,176,972        93,988,883        —          182,165,855   

Performance-based income

     —          23,316,750        —          23,316,750   

Other service fees

     75,614        —          669,134        744,748   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total related party revenues

     176,559,412        118,969,471        669,134        296,198,017   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     514,859,348        137,509,338        11,633,569        664,002,255   

Less: business taxes and related surcharges

     (9,687,926     (2,277,686     (311,685     (12,277,297
  

 

 

   

 

 

   

 

 

   

 

 

 

Net revenues

     505,171,422        135,231,652        11,321,884        651,724,958   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating costs and expenses:

        

Compensation and benefits

        

Relationship manager compensation

     (144,950,980     (1,095,316     (1,056,760     (147,103,056

Performance fee compensation

     —          (4,798,507     —          (4,798,507

Other compensation

     (106,630,074     (38,114,148     (31,500,907     (176,245,129
  

 

 

   

 

 

   

 

 

   

 

 

 

Total compensation and benefits

     (251,581,054     (44,007,971     (32,557,667     (328,146,692

Selling expenses

     (67,372,110     (4,425,087     (6,450,949     (78,248,146

General and administrative expenses

     (31,885,314     (18,352,172     (8,013,323     (58,250,809

Other operating expenses

     (21,126,909     (1,664,721     (6,366,379     (29,158,009

Government subsidies

     34,166,731        2,016,496        —          36,183,227   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating costs and expenses

     (337,798,656     (66,433,455     (53,388,318     (457,620,429
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     167,372,766        68,798,197        (42,066,434     194,104,529   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

16


Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

(In RMB, except for ADS data and percentages)

(unaudited)

 

     Three months ended        
     June 30,     June 30,        
     2015     2016     Change  
     RMB     RMB        

Net margin

     29.6     27.0  

Adjusted net margin (non-GAAP)*

     33.5     29.4  

Net income attributable to Noah Shareholders

     169,350,833        182,255,090        7.6

Adjustment for share-based compensation related to:

      

Share options

     10,910,694        9,378,522        (14.0 %) 

Restricted shares

     11,427,366        6,306,101        (44.8 %) 
  

 

 

   

 

 

   

 

 

 

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

     191,688,893        197,939,713        3.3

Net income attributable to Noah Shareholders per ADS, diluted

     2.87        3.10        8.0

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

     3.24        3.37        4.0

 

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

 

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