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 March 2018
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 ☒ 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/ Shang-yan Chuang | |
| Shang-yan Chuang | ||
| Chief Financial Officer | ||
Date: March 7, 2018
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EXHIBIT INDEX
Exhibit 99.1—Press Release
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Exhibit 99.1
NOAH HOLDINGS LIMITED ANNOUNCES UNAUDITED PRELIMINARY
FINANCIAL RESULTS FOR THE FOURTH QUARTER AND FULL YEAR 2017
SHANGHAI, March 6, 2018 — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited preliminary1 financial results for the fourth quarter of 2017 and the full year ended December 31, 2017.
FOURTH QUARTER 2017 FINANCIAL HIGHLIGHTS
| • | Net revenues for the fourth quarter of 2017 were RMB722.1 million (US$111.0 million), an 11.7% increase from the corresponding period in 2016. |
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| except percentages) | Q4 2016 | Q4 2017 | YoY Change | |||||||||
| Wealth management |
488.2 | 524.8 | 7.5 | % | ||||||||
| Asset management |
136.4 | 166.8 | 22.3 | % | ||||||||
| Internet financial services |
21.6 | 30.5 | 41.2 | % | ||||||||
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| Total net revenues |
646.2 | 722.1 | 11.7 | % | ||||||||
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| • | Income from operations for the fourth quarter of 2017 was RMB135.7 million (US$20.9 million), a 62.7% increase from the corresponding period in 2016. |
| (RMB millions, | ||||||||||||
| except percentages) | Q4 2016 | Q4 2017 | YoY Change | |||||||||
| Wealth management |
82.4 | 79.7 | (3.3 | )% | ||||||||
| Asset management |
43.5 | 76.9 | 76.9 | % | ||||||||
| Internet financial services |
(42.5 | ) | (20.9 | ) | (50.8 | %) | ||||||
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| Total income from operations |
83.4 | 135.7 | 62.7 | % | ||||||||
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| • | Net income attributable to Noah shareholders for the fourth quarter of 2017 was RMB160.3 million (US$24.6 million), a 49.3% increase from the corresponding period in 2016. |
| • | Non-GAAP2 net income attributable to Noah shareholders for the fourth quarter of 2017 was RMB184.7 million (US$28.4 million), a 40.5% increase from the corresponding period in 2016. |
FULL YEAR 2017 FINANCIAL HIGHLIGHTS
| • | Net revenues in the full year 2017 were RMB2,826.9 million (US$434.5 million), a 12.5% increase from the full year 2016. |
| 1 | As of the date of this press release, we are still in the process of reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager. Any changes in the fair value of those investments could affect the income from equity in affiliates, net income, net income attributable to Noah Shareholders, income per ADS and the balance of investments in affiliates in our consolidated financial statements. While not included in the unaudited preliminary fourth quarter 2017 financial results in this press release, we will include any such fair value adjustments in the audited consolidated financial statements in our 2017 Form 20-F and will make a subsequent announcement when our review conclude, as appropriate. |
| 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. |
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| (RMB millions, | ||||||||||||
| except percentages) | FY 2016 | FY 2017 | YoY Change | |||||||||
| Wealth management |
1,931.7 | 2,126.3 | 10.1 | % | ||||||||
| Asset management |
531.8 | 588.0 | 10.6 | % | ||||||||
| Internet financial services |
50.1 | 112.6 | 124.7 | % | ||||||||
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| Total net revenues |
2,513.6 | 2,826.9 | 12.5 | % | ||||||||
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| • | Income from operations in the full year 2017 was RMB777.0 million (US$119.4 million), a 16.4% increase from the full year 2016. |
| (RMB millions, | ||||||||||||
| except percentages) | FY 2016 | FY 2017 | YoY Change | |||||||||
| Wealth management |
526.0 | 580.9 | 10.4 | % | ||||||||
| Asset management |
321.3 | 302.9 | (5.7 | %) | ||||||||
| Internet financial services |
(180.0 | ) | (106.8 | ) | (40.7 | %) | ||||||
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| Total income from operations |
667.3 | 777.0 | 16.4 | % | ||||||||
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| • | Net income attributable to Noah shareholders in the full year 2017 was RMB770.2 million (US$118.4 million), a 19.6% increase from the full year 2016. |
| • | Non-GAAP net income attributable to Noah shareholders in the full year 2017 was RMB863.8million (US$132.8 million), a 19.5% increase from the full year 2016. |
FOURTH QUARTER AND FULL YEAR 2017 OPERATIONAL UPDATES
Wealth Management Business
The Company’s wealth management business offers financial products and provides comprehensive financial services to high net worth individuals, enterprises and institutional clients. Noah primarily distributes onshore and offshore fixed income products, private equity products, secondary market products and insurance products.
| • | Total number of registered clients as of December 31, 2017 was 186,918, a 38.1% increase from December 31, 2016. |
| • | Total number of active clients3 during the fourth quarter of 2017 was 6,276, a 38.5% increase from December 31, 2016, due to our promotion events during the fourth quarter of 2017. The total number of active clients during the full year 2017 was 12,720, a 5.8% increase from the full year 2016. |
| • | Aggregate value of financial products distributed during the fourth quarter of 2017 was RMB28.2 billion (US$4.3 billion), a 13.1% increase from the fourth quarter of 2016. |
| Product type | Three months ended December 31, | |||||||||||||||
| 2016 | 2017 | |||||||||||||||
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| Fixed income |
14.3 | 57.5 | % | 15.4 | 54.5 | % | ||||||||||
| Private equity |
8.5 | 34.2 | % | 7.4 | 26.1 | % | ||||||||||
| Secondary market equity |
1.7 | 6.8 | % | 5.4 | 19.2 | % | ||||||||||
| Other products |
0.4 | 1.5 | % | 0.1 | 0.2 | % | ||||||||||
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| All products |
24.9 | 100.0 | % | 28.2 | 100.0 | % | ||||||||||
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| 3 | “Active clients” refers to registered clients who purchased financial products distributed by Noah during the period specified. |
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| • | Aggregate value of financial products distributed during the full year 2017 was RMB117.4 billion (US$18.0 billion), a 15.8% increase from the full year 2016. |
| Product type | Twelve months ended December 31, | |||||||||||||||
| 2016 | 2017 | |||||||||||||||
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| Fixed income |
64.5 | 63.6 | % | 71.8 | 61.1 | % | ||||||||||
| Private equity |
27.5 | 27.2 | % | 34.3 | 29.2 | % | ||||||||||
| Secondary market equity |
7.8 | 7.7 | % | 10.8 | 9.2 | % | ||||||||||
| Other products |
1.5 | 1.5 | % | 0.6 | 0.5 | % | ||||||||||
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| All products |
101.4 | 100.0 | % | 117.4 | 100.0 | % | ||||||||||
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| • | Average transaction value per client4 for the fourth quarter of 2017 was RMB4.5 million (US$0.7 million), an 18.3% decrease from the corresponding period in 2016. Average transaction value per client for the full year 2017 was RMB9.2 million (US$1.4 million), a 9.5% increase from the full year 2016. |
| • | Coverage network included 237 branches and sub-branches covering 79 cities as of December 31, 2017, up from 222 branches and sub-branches covering 78 cities as of September 30, 2017, and 185 branches and sub-branches covering 71 cities as of December 31, 2016. |
| • | Number of relationship managers was 1,335 as of December 31, 2017, a 3.8% increase from September 30, 2017 and a 14.2% increase from December 31, 2016. |
Asset Management Business
Gopher Asset Management Co. Ltd. (“Gopher”), a subsidiary of the Company, is a leading alternative asset manager in China. Gopher develops and manages private equity, real estate, secondary market, credit, and other investments denominated in both Renminbi and foreign currencies.
| • | Total assets under management as of December 31, 2017 were RMB148.3 billion (US$22.8 billion), a 3.8% increase from September 30, 2017 and a 22.6% increase from December 31, 2016. |
| Investment type | As of September 30, 2017 |
Asset Growth |
Asset Expiration/ Redemption |
As of December 31, 2017 |
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| (RMB billions, except percentages) | ||||||||||||||||||||||||
| Real estate |
11.6 | 8.1 | % | 2.6 | 2.7 | 11.6 | 7.8 | % | ||||||||||||||||
| Private equity |
81.3 | 56.9 | % | 5.6 | 0.1 | 86.9 | 58.6 | % | ||||||||||||||||
| Secondary market |
6.0 | 4.2 | % | 0.3 | 0.2 | 6.2 | 4.2 | % | ||||||||||||||||
| Credit |
40.4 | 28.3 | % | 7.1 | 7.5 | 40.0 | 27.0 | % | ||||||||||||||||
| Other investments |
3.6 | 2.5 | % | 0.1 | — | 3.6 | 2.5 | % | ||||||||||||||||
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| All Investments |
142.9 | 100.0 | % | 15.7 | 10.3 | 148.3 | 100.0 | % | ||||||||||||||||
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| 4 | “Average transaction value per client” refers to the average value of financial products distributed by Noah that were purchased by active clients during the period specified. |
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| Investment type | As of December 31, 2016 |
Asset Growth |
Asset Expiration/ Redemption |
As of December 31, 2017 |
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| Real estate |
23.2 | 19.2 | % | 14.5 | 26.1 | 11.6 | 7.8 | % | ||||||||||||||||
| Private equity |
58.0 | 48.0 | % | 30.3 | 1.4 | 86.9 | 58.6 | % | ||||||||||||||||
| Secondary market |
8.3 | 6.9 | % | 0.5 | 2.7 | 6.2 | 4.2 | % | ||||||||||||||||
| Credit |
27.8 | 23.0 | % | 40.6 | 28.4 | 40.0 | 27.0 | % | ||||||||||||||||
| Other investments |
3.6 | 3.0 | % | 0.1 | 0.1 | 3.6 | 2.5 | % | ||||||||||||||||
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| All Investments |
120.9 | 100.0 | % | 86.0 | 58.6 | 148.3 | 100.0 | % | ||||||||||||||||
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Internet Financial Services Business
The Company’s Internet financial services business includes its online wealth management platform as well as micro-lending, payment processing and other online services.
Mr. Kenny Lam, Group President of Noah, said, “2017 marks another year of record-high earnings for us. We believe 2018 will be another exciting year of development as clients broaden their needs and industry regulations provide a more solid foundation of growth. We remain highly focused on building a sustainable platform that deepens client relationships. We will also continue to invest in technology to expand our service coverage and build on our large domestic and global footprint.”
FOURTH QUARTER 2017 FINANCIAL RESULTS
Net Revenues
Net revenues for the fourth quarter of 2017 were RMB722.1 million (US$111.0 million), an 11.7% increase from the corresponding period in 2016, primarily driven by increased recurring service fee revenues and performance-based income.
| • | Wealth Management Business |
| • | Net revenues from one-time commissions for the fourth quarter of 2017 were RMB241.0 million (US$37.0 million), a 7.4% decrease from the corresponding period in 2016, primarily due to a decline in distribution of insurance products. |
| • | Net revenues from recurring service fees for the fourth quarter of 2017 were RMB252.9 million (US$38.9 million), a 21.1% increase from the corresponding period in 2016. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed. |
| • | Net revenues from performance-based income for the fourth quarter of 2017 were RMB10.6 million (US$1.6 million), compared with RMB3.4 million in the corresponding period of 2016. The increase was primarily due to an increase in performance-based income from secondary market products distributed in previous periods. |
| • | Net revenues from other service fees for the fourth quarter of 2017 were RMB20.2 million (US$3.1 million), a 29.3% increase from the corresponding period in 2016. |
| • | Asset Management Business |
| • | Net revenues from recurring service fees for the fourth quarter of 2017 were RMB140.9 million (US$21.7 million), a 12.1% increase from the corresponding period in 2016. The increase was primarily due to the increase in assets under management. |
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| • | Net revenues from performance-based income for the fourth quarter of 2017 were RMB19.1 million (US$2.9 million), compared with RMB10.3 million in the corresponding period of 2016, primarily due to an increase in performance-based income from real estate products. |
| • | Internet Financial Service Business |
| • | Net revenues for the fourth quarter of 2017 were RMB30.5 million (US$4.7 million), a 41.2% increase from the corresponding period in 2016. The increase was primarily due to the growth of sales of several services within this segment compared with the corresponding period of 2016. |
Operating costs and expenses
Operating costs and expenses for the fourth quarter of 2017 were RMB586.5 million (US$90.1 million), a 4.2% increase from the corresponding period in 2016. Operating costs and expenses primarily consisted of compensation and benefits of RMB379.6 million (US$58.3 million), selling expenses of RMB111.5 million (US$17.1 million), general and administrative expenses of RMB79.3 million (US$12.2 million) and other operating expenses of RMB41.3 million (US$6.3 million).
| • | Operating costs and expenses for the wealth management business for the fourth quarter of 2017 were RMB445.2 million (US$68.4 million), a 9.7% increase from the corresponding period in 2016, primarily due to an increase in marketing expenses and consulting fees. |
| • | Operating costs and expenses for the asset management business for the fourth quarter of 2017 were RMB89.9 million (US$13.8 million), a 3.2% decrease from the corresponding period in 2016, primarily due to a decrease in investment advisory expenses. |
| • | Operating costs and expenses for the Internet financial services business for the fourth quarter of 2017 were RMB51.4 million (US$7.9 million), a 19.7% decrease from the corresponding period in 2016, primarily due to a decrease in product promotion expenses and an increase in government subsidies. |
Operating Margin
Operating margin for the fourth quarter of 2017 was 18.8%, an increase from 12.9% for the corresponding period in 2016. The increase was mainly due to cost optimization measures and increased government subsidies.
| • | Operating margin for the wealth management business for the fourth quarter of 2017 decreased to 15.2% from 16.9% for the corresponding period in 2016. |
| • | Operating margin for the asset management business for the fourth quarter of 2017 was 46.1%, compared with 31.9% for the corresponding period in 2016. |
| • | Operating loss for the Internet financial services business for the fourth quarter of 2017 was RMB20.9 million (US$3.2 million), down from RMB42.5 million for the corresponding period in 2016. |
Income Tax Expenses
Income tax expenses for the fourth quarter of 2017 were RMB35.1 million (US$5.4 million), a 58.3% increase from the corresponding period in 2016. The increase was primarily due to higher taxable income.
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Income from Equity in Affiliates
Income from equity in affiliates for the fourth quarter of 2017 was RMB18.4 million (US$2.8 million), compared with RMB2.1 million in the corresponding period in 2016. The increase was mainly due to the increased net asset value of the Company’s investment in an asset management joint venture. We are still reviewing the financial results of the funds of funds we manage and invest in as the general partner. Any potential changes in fair value of those investments could affect the income from equity in affiliates.
Net Income
| • | Net Income |
| • | Net income for the fourth quarter of 2017 was RMB157.9 million (US$24.3 million), a 93.2% increase from the corresponding period in 2016. |
| • | Net margin for the fourth quarter of 2017 was 21.9%, up from 12.6% for the corresponding period in 2016. |
| • | Net income attributable to Noah shareholders for the fourth quarter of 2017 was RMB160.3 million (US$24.6 million), a 49.3% increase from the corresponding period in 2016. |
| • | Net income attributable to Noah shareholders per basic and diluted ADS for the fourth quarter of 2017 was RMB2.82 (US$0.43) and RMB2.72 (US$0.42), respectively, up from RMB1.90 and RMB1.86 respectively, for the corresponding period in 2016. |
| • | Non-GAAP Net Income Attributable to Noah Shareholders |
| • | Non-GAAP net income attributable to Noah shareholders for the fourth quarter of 2017 was RMB184.67 million (US$28.38 million), a 40.5% increase from the corresponding period in 2016. |
| • | Non-GAAP net margin attributable to Noah shareholders for the fourth quarter of 2017 was 25.6%, up from 20.3% for the corresponding period in 2016. |
| • | Non-GAAP net income attributable to Noah shareholders per diluted ADS for the fourth quarter of 2017 was RMB3.12 (US$0.48), up from RMB2.26 for the corresponding period in 2016. |
FULL YEAR 2017 FINANCIAL RESULTS
Net Revenues
Net revenues for the full year 2017 were RMB2,826.9 million (US$434.5 million), a 12.5% increase from the full year 2016, primarily due to increases in recurring service fees and performance-based income.
| • | Wealth Management Business |
| • | Net revenues from one-time commissions for 2017 were RMB1,092.2 million (US$167.9 million), a 1.3% decrease from 2016, primarily due to a decline in distribution of insurance products. |
| • | Net revenues from recurring service fees for 2017 were RMB871.7 million (US$134.0 million), a 16.8% increase from 2016. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed by the Company. |
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| • | Net revenues from performance-based income for 2017 were RMB92.5 million (US$14.2 million), a 695.4% increase from 2016, primarily due to an increase in performance-based income from secondary market, real estate and private equity products previously distributed by us. |
| • | Net revenues from other service fees for 2017 were RMB69.9 million (US$10.7 million), representing a 4.5% increase from 2016. |
| • | Asset Management Business |
| • | Net revenues from recurring service fees for 2017 were RMB527.6 million (US$81.1 million), a 9.6% increase from 2016. The increase was primarily due to the increase in assets under management by the Company. |
| • | Net revenues from performance-based income for 2017 were RMB47.7 million (US$7.3 million), a 2.4% increase from year 2016, primarily due to an increase in performance-based income from real estate products previously distributed by us. |
| • | Internet Financial Services Business |
| • | Net revenues for the full year 2017 were RMB112.6 million (US$17.3 million), a 124.7% increase from 2016. The increase was primarily due to the growth of sales of various services within this segment compared with 2016. |
Operating costs and expenses
Operating costs and expenses for the full year 2017 were RMB2,049.9 million (US$315.1 million), an 11.0% increase from the full year 2016. Operating costs and expenses for the full year 2017 primarily consisted of compensation and benefits of RMB1,407.4 million (US$216.3 million), selling expenses of RMB320.5 million (US$49.3 million), general and administrative expenses of RMB248.9 million (US$38.3 million) and other operating expenses of RMB147.3 million (US$22.6 million).
| • | Operating costs and expenses for the wealth management business for 2017 were RMB1,545.3 million (US$237.5 million), a 9.9% increase from 2016, primarily due to an increase in relationship manager compensation in line with the growth in the number of relationship managers. |
| • | Operating costs and expenses for the asset management business for 2017 were RMB285.1 million (US$43.8 million), a 35.4% increase from 2016, primarily due to an increase in staff compensation and decreased government subsidies. |
| • | Operating costs and expenses for the Internet financial services business for 2017 were RMB219.4 million (US$33.7 million), a 4.7% decrease from 2016. |
Operating Margin
Operating margin for the full year 2017 was 27.5%, compared to 26.5% for the full year 2016, mainly due to cost optimization measures and increased operating efficiency of the Internet financial services business.
| • | Operating margin for the wealth management business for 2017 was 27.3%, compared to 27.2% for 2016. |
| • | Operating margin for the asset management business for 2017 was 51.5%, compared to 60.4% for 2016, primarily due to a decrease in government subsidies. |
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| • | Operating loss for Internet financial services business for 2017 was RMB106.8 million (US$16.4 million), compared to 180.0 million for 2016. |
Income Tax Expenses
Income tax expenses for the full year 2017 were RMB199.1 million (US$30.6 million), a 26.0% increase from the full year 2016, primarily due to an increase in taxable income.
Net Income
| • | Net Income |
| • | Net income for the full year 2017 was RMB762.9 million (US$117.3 million), a 27.6% increase from the full year 2016. |
| • | Net margin for the full year 2017 was 27.0%, compared to 23.8% for the full year 2016. |
| • | Net income attributable to Noah shareholders for the full year 2017 was RMB770.2 million (US$118.4 million), a 19.6% increase from the full year 2016. |
| • | Net income attributable to Noah shareholders per basic and diluted ADS for the full year 2017 was RMB13.62 (US$2.09) and RMB13.07 (US$2.01), respectively, as compared to RMB11.44 and RMB11.04, respectively, for the full year 2016. |
| • | Non-GAAP Net Income Attributable to Noah Shareholders |
| • | Non-GAAP net income attributable to Noah shareholders for the full year 2017 was RMB863.8 million (US$132.8 million), a 19.5% increase from the full year 2016. |
| • | Non-GAAP net margin attributable to Noah shareholders for the full year 2017 was 30.6%, compared to 28.8% for the full year 2016. |
| • | Non-GAAP net income attributable to Noah shareholders per diluted ADS for the full year 2017 was RMB14.62 (US$2.25), compared to RMB12.36 for the full year 2016. |
Balance Sheet and Cash Flow
As of December 31, 2017, the Company had RMB1,906.8 million (US$293.1 million) in cash and cash equivalents, compared with RMB1,987.8 million as of September 30, 2017 and RMB2,982.5 million as of December 31, 2016.
Net cash inflow from the Company’s operating activities during the fourth quarter of 2017 was RMB167.3 million (US$25.7 million). Net cash inflow from the Company’s operating activities during the full year 2017 was RMB628.4 million (US$96.9), compared to RMB686.2 during the full year 2016, driven by profit earned from business operations.
Net cash outflow from the Company’s investing activities during the fourth quarter of 2017 was RMB46.6 million (US$7.2 million). Net cash outflow from the Company’s investing activities during the full year 2017 was RMB833.9 million (US$128.2), compared to RMB883.8 million during the full year 2016. This is primarily consisted of loan disbursement of RMB660.1 million, investments of RMB495.0 million, purchases of properties and equipment of RMB153.3 million and cash inflow from factoring receivables of RMB500.0 million.
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Net cash outflow from the Company’s financing activities was RMB160.5 million (US$24.7million) in the fourth quarter of 2017. Net cash outflow from the Company’s financing activities during the full year 2017 was RMB791.8 million (US$121.7), compared to RMB994.6 inflow during the full year 2016, primarily due to the previously announced repurchase of Sequoia’s investment in Gopher and payment of factoring receivables.
On July 8, 2017, the Company’s board of directors authorized a share repurchase program of up to US$50 million worth of its issued and outstanding ADSs over the course of one year. As of December 31, 2017, the Company had repurchased no ADS under this program.
Note to Financial Information
As of the date of this press release, we are still in the process of reviewing the financial results of the funds of funds we manage and invest in as the general partner or manager. Any changes in the fair value of those investments could affect the income from equity in affiliates, net income, net income attributable to Noah Shareholders, income per ADS and the balance of investments in affiliates in our consolidated financial statements. While not included in the unaudited preliminary fourth quarter 2017 financial results in this press release, we will include any such fair value adjustments in the audited consolidated financial statements in our 2017 Form 20-F and will make a subsequent announcement when our review conclude, as appropriate.
2018 FORECAST
The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2018 will be in the range of RMB1 billion to RMB1.05 billion, an increase of 15.8% to 21.6% compared with the full year 2017. 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 fourth quarter and full year 2017 unaudited financial results and recent business activities.
The conference call may be accessed with the following details:
| Conference call details | ||
| Date/Time: | Tuesday, March 6, 2018 at 8:00 p.m., U.S. Eastern Time Wednesday, March 7, 2018 at 9:00 a.m., Hong Kong Time | |
| Dial in details: | ||
| - United States Toll Free | +1-866-311-7654 | |
| - Mainland China Toll Free | 4001-201203 | |
| - Hong Kong Toll Free | 800-905-945 | |
| - International | +1-412-317-5227 | |
| Conference Title: | Noah Holdings Limited Fourth Quarter and Full Year 2017 Earnings Call | |
| Participant Password: | Noah Holdings | |
A telephone replay will be available starting one hour after the end of the conference call until March 13, 2018 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10117575.
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.
9
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 attributable to Noah shareholders 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 attributable to Noah shareholders, non-GAAP net income attributable to Noah shareholders per diluted ADS and non-GAAP net margin attributable to Noah shareholders 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
Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises. In the full year 2017, Noah distributed RMB117.4 billion (US$18.0 billion) of financial products. Through its subsidiary, Gopher Asset Management, Noah had assets under management of RMB148.3 billion (US$22.8 billion) as of December 31, 2017.
Noah’s wealth management business primarily distributes onshore and offshore fixed income products, private equity products, secondary market products and insurance products. Noah delivers customized financial solutions to clients through a network of 1,335 relationship managers across 237 branches and sub-branches in 79 cities in mainland China, and serves the international investment needs of its clients through subsidiaries in Hong Kong, Taiwan, Canada, Australia and the United States. The Company’s wealth management business had 186,918 registered clients as of December 31, 2017. As a leading alternative asset manager in China, Gopher Asset Management manages private equity, real estate, secondary market, credit and other investments denominated in both Renminbi and foreign currencies. The Company also provides Internet financial services, including online wealth management, micro-lending and payment processing services, etc.
For more information, please visit Noah at ir.noahwm.com.
FOREIGN CURRENCY TRANSLATION
In this announcement, the unaudited financial results for the fourth quarter of 2017 and the full year ended December 31, 2017 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.5063 to US$1.00, the effective noon buying rate for December 31, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board.
10
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 2018 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 fourth 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 —
11
Noah Holdings Limited
Condensed Consolidated Balance Sheets
(unaudited)
| As of | ||||||||||||
| September 30, 2017 |
December 31, 2017 |
December 31, 2017 |
||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||
| Assets |
||||||||||||
| Current assets: |
||||||||||||
| Cash and cash equivalents |
1,987,798 | 1,906,753 | 293,063 | |||||||||
| Short-term investments (including short-term investments measured at fair value of RMB363,692 thousands and RMB95,345 thousands, as of September 30, 2017 and December 31, 2017, respectively) |
424,692 | 160,345 | 24,645 | |||||||||
| Accounts receivable, net of allowance for doubtful accounts of nil as of September 30, 2017 and December 31, 2017 |
144,724 | 175,518 | 26,977 | |||||||||
| Loans receivable |
401,229 | 765,398 | 117,640 | |||||||||
| Amounts due from related parties |
701,756 | 515,454 | 79,224 | |||||||||
| Loans receivable from factoring business |
440,794 | 256,944 | 39,492 | |||||||||
| Other current assets |
238,830 | 255,680 | 39,297 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current assets |
4,339,823 | 4,036,092 | 620,338 | |||||||||
| Long-term investments (including long-term investments measured at fair value of RMB116,975 thousands and RMB482,006 thousands, as of September 30, 2017 and December 31, 2017, respectively) |
690,747 | 988,266 | 151,894 | |||||||||
| Investment in affiliates |
640,820 | 969,670 | 149,036 | |||||||||
| Property and equipment, net |
248,090 | 303,349 | 46,624 | |||||||||
| Non-current deferred tax assets |
52,083 | 72,654 | 11,167 | |||||||||
| Other non-current assets |
104,438 | 125,871 | 19,349 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Assets |
6,076,001 | 6,495,902 | 998,408 | |||||||||
|
|
|
|
|
|
|
|||||||
| Liabilities and Equity |
||||||||||||
| Current liabilities: |
||||||||||||
| Accrued payroll and welfare expenses |
491,929 | 622,494 | 95,676 | |||||||||
| Income tax payable |
70,051 | 18,360 | 2,822 | |||||||||
| Amounts due to related parties |
273 | 276 | 42 | |||||||||
| Deferred revenues |
211,861 | 201,254 | 30,932 | |||||||||
| Loans payable from factoring business |
303,866 | — | — | |||||||||
| Other current liabilities |
366,450 | 492,970 | 75,769 | |||||||||
| Convertible notes |
498,998 | 487,973 | 75,000 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total current liabilities |
1,943,428 | 1,823,327 | 280,241 | |||||||||
| Non-current Deferred tax liabilities |
4,424 | 50,121 | 7,703 | |||||||||
| Other non-current liabilities |
71,807 | 113,660 | 17,469 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Liabilities |
2,019,659 | 1,987,108 | 305,413 | |||||||||
|
|
|
|
|
|
|
|||||||
| Equity |
4,056,342 | 4,508,794 | 692,995 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Liabilities and Equity |
6,076,001 | 6,495,902 | 998,408 | |||||||||
|
|
|
|
|
|
|
|||||||
12
Noah Holdings Limited
Condensed Consolidated Income Statements
(In RMB’000, except for USD data, per ADS data and percentages)
(unaudited)
| Three months ended | ||||||||||||||||
| December 31, 2016 |
December 31, 2017 |
December 31, 2017 |
Change | |||||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||||||
| Revenues: |
||||||||||||||||
| Revenues from third party |
||||||||||||||||
| One-time commissions |
164,146 | 130,462 | 20,052 | (20.5 | %) | |||||||||||
| Recurring service fees |
126,923 | 154,949 | 23,815 | 22.1 | % | |||||||||||
| Performance-based income |
6,013 | 9,006 | 1,384 | 49.8 | % | |||||||||||
| Other service fees |
37,178 | 52,482 | 8,066 | 41.2 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total third party revenues |
334,260 | 346,899 | 53,317 | 3.8 | % | |||||||||||
| Revenues from related party |
||||||||||||||||
| One-time commissions |
98,616 | 113,572 | 17,456 | 15.2 | % | |||||||||||
| Recurring service fees |
209,605 | 241,463 | 37,112 | 15.2 | % | |||||||||||
| Performance-based income |
7,719 | 20,833 | 3,202 | 169.9 | % | |||||||||||
| Other service fees |
392 | 4,541 | 698 | 1,058.4 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total related party revenues |
316,332 | 380,409 | 58,468 | 20.3 | % | |||||||||||
| Total revenues |
650,592 | 727,308 | 111,785 | 11.8 | % | |||||||||||
| Less: business taxes and related surcharges |
(4,362 | ) | (5,194 | ) | (798 | ) | 19.1 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
646,230 | 722,114 | 110,987 | 11.7 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating costs and expenses: |
||||||||||||||||
| Compensation and benefits |
||||||||||||||||
| Relationship manager compensation |
(150,033 | ) | (167,363 | ) | (25,723 | ) | 11.6 | % | ||||||||
| Performance Fee Compensation |
— | (11,291 | ) | (1,735 | ) | 0.0 | % | |||||||||
| Other Compensations |
(190,475 | ) | (200,982 | ) | (30,890 | ) | 5.5 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total compensation and benefits |
(340,508 | ) | (379,636 | ) | (58,348 | ) | 11.5 | % | ||||||||
| Selling expenses |
(98,672 | ) | (111,516 | ) | (17,140 | ) | 13.0 | % | ||||||||
| General and administrative expenses |
(71,144 | ) | (79,271 | ) | (12,184 | ) | 11.4 | % | ||||||||
| Other operating expenses |
(66,592 | ) | (41,274 | ) | (6,344 | ) | (38.0 | %) | ||||||||
| Government subsidies |
14,068 | 25,199 | 3,873 | 79.1 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating costs and expenses |
(562,848 | ) | (586,498 | ) | (90,143 | ) | 4.2 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
83,382 | 135,616 | 20,844 | 62.6 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other income: |
||||||||||||||||
| Interest income |
7,931 | 12,910 | 1,984 | 62.8 | % | |||||||||||
| Interest expenses |
(4,871 | ) | (9,593 | ) | (1,474 | ) | 96.9 | % | ||||||||
| Investment income |
18,893 | 34,983 | 5,377 | 85.2 | % | |||||||||||
| Other (expense) income |
(3,606 | ) | 640 | 98 | (117.7 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income |
18,347 | 38,940 | 5,985 | 112.2 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before taxes and income from equity in affiliates |
101,729 | 174,556 | 26,829 | 71.6 | % | |||||||||||
| Income tax expense |
(22,157 | ) | (35,081 | ) | (5,392 | ) | 58.3 | % | ||||||||
| Income from equity in affiliates |
2,145 | 18,438 | 2,834 | 759.6 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
81,717 | 157,913 | 24,271 | 93.2 | % | |||||||||||
| Less: net loss attributable to non-controlling Interests |
(20,312 | ) | (2,339 | ) | (359 | ) | (88.5 | %) | ||||||||
| Less: Loss attributable to redeemable non-controlling interest of Subsidiary |
(5,336 | ) | — | — | (100.0 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Noah Shareholders |
107,365 | 160,252 | 24,630 | 49.3 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income per ADS, basic |
1.90 | 2.82 | 0.43 | 48.4 | % | |||||||||||
| Income per ADS, diluted |
1.86 | 2.72 | 0.42 | 46.2 | % | |||||||||||
| Margin analysis: |
||||||||||||||||
| Operating margin |
12.9 | % | 18.8 | % | 18.8 | % | ||||||||||
| Net margin |
12.6 | % | 21.9 | % | 21.9 | % | ||||||||||
| Weighted average ADS equivalent: [1] |
||||||||||||||||
| Basic |
56,482,118 | 56,782,875 | 56,782,875 | |||||||||||||
| Diluted |
60,329,884 | 61,147,734 | 61,147,734 | |||||||||||||
| ADS equivalent outstanding at end of period |
56,462,655 | 56,902,300 | 56,902,300 | |||||||||||||
| [1] | Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs. |
13
Noah Holdings Limited
Condensed Consolidated Income Statements
(In RMB’000, except for USD data, per ADS data and percentages)
(unaudited)
| Twelve months ended | ||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||
| 2016 | 2017 | 2017 | Change | |||||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||||||
| Revenues: |
||||||||||||||||
| Revenues from third party |
||||||||||||||||
| One-time commissions |
810,645 | 541,024 | 83,154 | (33.3 | %) | |||||||||||
| Recurring service fees |
475,000 | 547,123 | 84,091 | 15.2 | % | |||||||||||
| Performance-based income |
19,740 | 86,494 | 13,294 | 338.2 | % | |||||||||||
| Other service fees |
117,794 | 171,759 | 26,399 | 45.8 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total third party revenues |
1,423,179 | 1,346,400 | 206,938 | (5.4 | %) | |||||||||||
| Revenues from related party |
||||||||||||||||
| One-time commissions |
321,442 | 561,060 | 86,233 | 74.5 | % | |||||||||||
| Recurring service fees |
775,726 | 860,730 | 132,292 | 11.0 | % | |||||||||||
| Performance-based income |
39,501 | 54,502 | 8,377 | 38.0 | % | |||||||||||
| Other service fees |
1,788 | 23,314 | 3,583 | 1,203.9 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total related party revenues |
1,138,457 | 1,499,606 | 230,485 | 31.7 | % | |||||||||||
| Total revenues |
2,561,636 | 2,846,006 | 437,423 | 11.1 | % | |||||||||||
| Less: business taxes and related surcharges |
(48,064 | ) | (19,098 | ) | (2,935 | ) | (60.3 | %) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
2,513,572 | 2,826,908 | 434,488 | 12.5 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating costs and expenses: |
||||||||||||||||
| Compensation and benefits |
||||||||||||||||
| Relationship manager compensation |
(563,620 | ) | (616,064 | ) | (94,687 | ) | 9.3 | % | ||||||||
| Performance Fee Compensation |
(8,146 | ) | (11,291 | ) | (1,735 | ) | 38.6 | % | ||||||||
| Other Compensations |
(728,639 | ) | (780,017 | ) | (119,886 | ) | 7.1 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total compensation and benefits |
(1,300,405 | ) | (1,407,372 | ) | (216,308 | ) | 8.2 | % | ||||||||
| Selling expenses |
(322,667 | ) | (320,462 | ) | (49,254 | ) | (0.7 | %) | ||||||||
| General and administrative expenses |
(234,488 | ) | (248,878 | ) | (38,252 | ) | 6.1 | % | ||||||||
| Other operating expenses |
(151,088 | ) | (147,318 | ) | (22,642 | ) | (2.5 | %) | ||||||||
| Government subsidies |
162,365 | 74,156 | 11,398 | (54.3 | %) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating costs and expenses |
(1,846,283 | ) | (2,049,874 | ) | (315,058 | ) | 11.0 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income from operations |
667,289 | 777,034 | 119,430 | 16.4 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other income: |
||||||||||||||||
| Interest income |
39,539 | 45,020 | 6,919 | 13.9 | % | |||||||||||
| Interest expenses |
(19,289 | ) | (24,128 | ) | (3,708 | ) | 25.1 | % | ||||||||
| Investment income |
48,537 | 67,343 | 10,350 | 38.7 | % | |||||||||||
| Other (expense) income |
(2,531 | ) | 3,542 | 544 | (239.9 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other income |
66,256 | 91,777 | 14,105 | 38.5 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before taxes and income from equity in affiliates |
733,545 | 868,811 | 133,535 | 18.4 | % | |||||||||||
| Income tax expense |
(157,997 | ) | (199,085 | ) | (30,599 | ) | 26.0 | % | ||||||||
| Income from equity in affiliates |
22,343 | 93,184 | 14,322 | 317.1 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
597,891 | 762,910 | 117,258 | 27.6 | % | |||||||||||
| Less: net loss attributable to non-controlling Interests Less: income(loss) attributable to redeemable non-controlling interest of Subsidiary |
|
(40,602 (5,336 |
) ) |
|
(13,745 6,483 |
)
|
|
(2,113 996 |
)
|
|
(66.1 (221.5 |
%) %) | ||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to Noah Shareholders |
643,829 | 770,172 | 118,375 | 19.6 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income per ADS, basic |
11.44 | 13.62 | 2.09 | 19.1 | % | |||||||||||
| Income per ADS, diluted |
11.04 | 13.07 | 2.01 | 18.4 | % | |||||||||||
| Margin analysis: |
||||||||||||||||
| Operating margin |
26.5 | % | 27.5 | % | 27.5 | % | ||||||||||
| Net margin |
23.8 | % | 27.0 | % | 27.0 | % | ||||||||||
| Weighted average ADS equivalent: [1] |
||||||||||||||||
| Basic |
56,300,278 | 56,551,274 | 56,551,274 | |||||||||||||
| Diluted |
60,073,525 | 60,467,645 | 60,467,645 | |||||||||||||
| ADS equivalent outstanding at end of period |
56,462,655 | 56,902,300 | 56,902,300 | |||||||||||||
| [1] | Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs. |
14
Noah Holdings Limited
Condensed Comprehensive Income Statements
(unaudited)
| Three months ended | ||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||
| 2016 | 2017 | 2017 | Change |
|||||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||||||
| Net income |
81,717 | 157,913 | 24,271 | 93.2 | % | |||||||||||
| Other comprehensive income, net of tax: |
||||||||||||||||
| Foreign currency translation adjustments |
14,342 | (13,047 | ) | (2,005 | ) | N.A. | ||||||||||
| Fair value fluctuation of available for sale Investment (after tax) |
(12,479 | ) | 243,655 | 37,449 | N.A. | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income |
83,580 | 388,521 | 59,715 | 364.8 | % | |||||||||||
| Less: Comprehensive loss attributable to non-controlling interests |
(20,326 | ) | (2,342 | ) | (360 | ) | (88.5 | %) | ||||||||
| Loss attributable to redeemable non-controlling interest of Subsidiary |
(5,336 | ) | — | — | (100.0 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income attributable to Noah Shareholders |
109,242 | 390,863 | 60,075 | 257.8 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Noah Holdings Limited
Condensed Comprehensive Income Statements
(unaudited)
| Twelve months ended | ||||||||||||||||
| December 31, | December 31, | December 31, | ||||||||||||||
| 2016 | 2017 | 2017 | Change |
|||||||||||||
| RMB’000 | RMB’000 | USD’000 | ||||||||||||||
| Net income |
597,891 | 762,910 | 117,257 | 27.6 | % | |||||||||||
| Other comprehensive income, net of tax: |
||||||||||||||||
| Foreign currency translation adjustments |
19,241 | (33,876 | ) | (5,207 | ) | N.A. | ||||||||||
| Fair value fluctuation of available for sale Investment (after tax) |
(3,001 | ) | 252,706 | 38,840 | N.A. | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income |
614,131 | 981,740 | 150,891 | 59.9 | % | |||||||||||
| Less: Comprehensive loss attributable to non-controlling interests |
(40,697 | ) | (13,776 | ) | (2,117 | ) | (66.1 | %) | ||||||||
| Loss attributable to redeemable non-controlling interest of Subsidiary |
(5,336 | ) | 6,483 | 996 | (221.5 | %) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income attributable to Noah Shareholders |
660,164 | 989,033 | 152,012 | 49.8 | % | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
15
Noah Holdings Limited
Supplemental Information
(unaudited)
| As of | ||||||||||||
| December 31, 2016 |
December 31, 2017 |
Change | ||||||||||
| Number of registered clients |
135,396 | 186,918 | 38.1 | % | ||||||||
| Number of relationship managers |
1,169 | 1,335 | 14.2 | % | ||||||||
| Number of cities under coverage |
71 | 79 | 11.3 | % | ||||||||
| Three months ended | ||||||||||||
| December 31, 2016 |
December 31, 2017 |
Change | ||||||||||
| (in millions of RMB, except number of active clients and percentages) |
||||||||||||
| Number of active clients |
4,532 | 6,276 | 38.5 | % | ||||||||
| Transaction value: |
||||||||||||
| Fixed income products |
14,337 | 15,367 | 7.2 | % | ||||||||
| Private equity products |
8,519 | 7,360 | (13.6 | %) | ||||||||
| Secondary market equity products |
1,700 | 5,412 | 218.3 | % | ||||||||
| Other products |
364 | 48 | (86.8 | %) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total transaction value |
24,920 | 28,188 | 13.1 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Average transaction value per client |
5.50 | 4.49 | (18.3 | %) | ||||||||
| Twelve months ended | ||||||||||||
| December 31, 2016 |
December 31, 2017 |
Change | ||||||||||
| (in millions of RMB, except number of active clients and percentages) |
||||||||||||
| Number of active clients |
12,027 | 12,720 | 5.8 | % | ||||||||
| Transaction value: |
||||||||||||
| Fixed income products |
64,494 | 71,759 | 11.3 | % | ||||||||
| Private equity products |
27,545 | 34,261 | 24.4 | % | ||||||||
| Secondary market equity products |
7,846 | 10,754 | 37.1 | % | ||||||||
| Other products |
1,499 | 598 | (60.1 | %) | ||||||||
|
|
|
|
|
|
|
|||||||
| Total transaction value |
101,385 | 117,371 | 15.8 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Average transaction value per client |
8.43 | 9.23 | 9.5 | % | ||||||||
16
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
| Three months ended December 31, 2017 | ||||||||||||||||
| Wealth Management Business |
Asset Management Business |
Internet Financial Services Business |
Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: |
||||||||||||||||
| Revenues from third party |
||||||||||||||||
| One-time commissions |
130,190 | 272 | — | 130,462 | ||||||||||||
| Recurring service fees |
149,367 | 5,582 | — | 154,949 | ||||||||||||
| Performance-based income |
8,854 | 152 | — | 9,006 | ||||||||||||
| Other service fees |
20,397 | 5,643 | 26,442 | 52,482 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total third party revenues |
308,808 | 11,649 | 26,442 | 346,899 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenues from related party |
||||||||||||||||
| One-time commissions |
112,656 | 916 | — | 113,572 | ||||||||||||
| Recurring service fees |
105,436 | 136,027 | — | 241,463 | ||||||||||||
| Performance-based income |
1,826 | 19,007 | — | 20,833 | ||||||||||||
| Other service fees |
— | — | 4,541 | 4,541 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total related party revenues |
219,918 | 155,950 | 4,541 | 380,409 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
528,726 | 167,599 | 30,983 | 727,308 | ||||||||||||
| Less: business taxes and related surcharges |
(3,911 | ) | (840 | ) | (443 | ) | (5,194 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
524,815 | 166,759 | 30,540 | 722,114 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating costs and expenses: |
||||||||||||||||
| Compensation and benefits |
||||||||||||||||
| Relationship manager compensation |
(166,699 | ) | — | (664 | ) | (167,363 | ) | |||||||||
| Performance Fee Compensation |
— | (11,291 | ) | — | (11,291 | ) | ||||||||||
| Other compensation |
(117,186 | ) | (53,406 | ) | (30,390 | ) | (200,982 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total compensation and benefits |
(283,885 | ) | (64,697 | ) | (31,054 | ) | (379,636 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Selling expenses |
(104,538 | ) | (1,965 | ) | (5,013 | ) | (111,516 | ) | ||||||||
| General and administrative expenses |
(54,695 | ) | (22,379 | ) | (2,197 | ) | (79,271 | ) | ||||||||
| Other operating expenses |
(22,800 | ) | (3,992 | ) | (14,482 | ) | (41,274 | ) | ||||||||
| Government subsidies |
20,768 | 3,131 | 1,300 | 25,199 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating costs and expenses |
(445,150 | ) | (89,902 | ) | (51,446 | ) | (586,498 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from operations |
79,665 | 76,857 | (20,906 | ) | 135,616 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
17
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
| Three months ended December 31, 2016 | ||||||||||||||||
| Wealth Management Business |
Asset Management Business |
Internet Financial Services Business |
Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: |
||||||||||||||||
| Revenues from third party |
||||||||||||||||
| One-time commissions |
163,809 | 337 | — | 164,146 | ||||||||||||
| Recurring service fees |
109,458 | 17,465 | — | 126,923 | ||||||||||||
| Performance-based income |
2,771 | 3,242 | — | 6,013 | ||||||||||||
| Other service fees |
15,774 | — | 21,404 | 37,178 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Third party revenues |
291,812 | 21,044 | 21,404 | 334,260 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenues from related party |
||||||||||||||||
| One-time commissions |
98,592 | 24 | — | 98,616 | ||||||||||||
| Recurring service fees |
100,948 | 108,657 | — | 209,605 | ||||||||||||
| Performance-based income |
650 | 7,069 | — | 7,719 | ||||||||||||
| Other service fees |
— | — | 392 | 392 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Related party revenues |
200,190 | 115,750 | 392 | 316,332 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
492,002 | 136,794 | 21,796 | 650,592 | ||||||||||||
| Less: business taxes and related surcharges |
(3,767 | ) | (421 | ) | (174 | ) | (4,362 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
488,235 | 136,373 | 21,622 | 646,230 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating costs and expenses: |
||||||||||||||||
| Compensation and benefits |
||||||||||||||||
| Relationship manager compensation |
(147,169 | ) | (325 | ) | (2,539 | ) | (150,033 | ) | ||||||||
| Other compensation |
(120,756 | ) | (38,873 | ) | (30,846 | ) | (190,475 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total compensation and benefits |
(267,925 | ) | (39,198 | ) | (33,385 | ) | (340,508 | ) | ||||||||
| Selling expenses |
(84,740 | ) | (6,012 | ) | (7,920 | ) | (98,672 | ) | ||||||||
| General and administrative expenses |
(37,492 | ) | (25,297 | ) | (8,355 | ) | (71,144 | ) | ||||||||
| Other operating expenses |
(24,918 | ) | (27,244 | ) | (14,430 | ) | (66,592 | ) | ||||||||
| Government subsidies |
9,222 | 4,846 | — | 14,068 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating costs and expenses |
(405,853 | ) | (92,905 | ) | (64,090 | ) | (562,848 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from operations |
82,382 | 43,468 | (42,468 | ) | 83,382 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
18
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
| Twelve months ended December 31, 2017 | ||||||||||||||||
| Wealth Management Business |
Asset Management Business |
Internet Financial Services Business |
Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: |
||||||||||||||||
| Revenues from third party |
||||||||||||||||
| One-time commissions |
539,936 | 1,088 | — | 541,024 | ||||||||||||
| Recurring service fees |
519,575 | 27,548 | — | 547,123 | ||||||||||||
| Performance-based income |
84,105 | 2,389 | — | 86,494 | ||||||||||||
| Other service fees |
70,390 | 10,712 | 90,657 | 171,759 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total third party revenues |
1,214,006 | 41,737 | 90,657 | 1,346,400 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenues from related party |
||||||||||||||||
| One-time commissions |
560,048 | 1,012 | — | 561,060 | ||||||||||||
| Recurring service fees |
358,321 | 502,409 | — | 860,730 | ||||||||||||
| Performance-based income |
9,020 | 45,482 | — | 54,502 | ||||||||||||
| Other service fees |
— | — | 23,314 | 23,314 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total related party revenues |
927,389 | 548,903 | 23,314 | 1,499,606 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
2,141,395 | 590,640 | 113,971 | 2,846,006 | ||||||||||||
| Less: business taxes and related surcharges |
(15,128 | ) | (2,599 | ) | (1,371 | ) | (19,098 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
2,126,267 | 588,041 | 112,600 | 2,826,908 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating costs and expenses: |
||||||||||||||||
| Compensation and benefits |
||||||||||||||||
| Relationship manager compensation |
(611,550 | ) | (4 | ) | (4,510 | ) | (616,064 | ) | ||||||||
| Performance Fee Compensation |
— | (11,291 | ) | — | (11,291 | ) | ||||||||||
| Other compensation |
(463,370 | ) | (190,032 | ) | (126,615 | ) | (780,017 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total compensation and benefits |
(1,074,920 | ) | (201,327 | ) | (131,125 | ) | (1,407,372 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Selling expenses |
(295,798 | ) | (9,271 | ) | (15,393 | ) | (320,462 | ) | ||||||||
| General and administrative expenses |
(146,122 | ) | (70,618 | ) | (32,138 | ) | (248,878 | ) | ||||||||
| Other operating expenses |
(77,490 | ) | (27,773 | ) | (42,055 | ) | (147,318 | ) | ||||||||
| Government subsidies |
49,008 | 23,848 | 1,300 | 74,156 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating costs and expenses |
(1,545,322 | ) | (285,141 | ) | (219,411 | ) | (2,049,874 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from operations |
580,945 | 302,900 | (106,811 | ) | 777,034 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
19
Noah Holdings Limited
Segment Condensed Income Statements
(unaudited)
| Twelve months ended December 31, 2016 | ||||||||||||||||
| Wealth Management Business |
Asset Management Business |
Internet Financial Services Business |
Total | |||||||||||||
| RMB’000 | RMB’000 | RMB’000 | RMB’000 | |||||||||||||
| Revenues: |
||||||||||||||||
| Revenues from third party |
||||||||||||||||
| One-time commissions |
809,460 | 1,185 | — | 810,645 | ||||||||||||
| Recurring service fees |
413,085 | 61,915 | — | 475,000 | ||||||||||||
| Performance-based income |
11,143 | 8,597 | — | 19,740 | ||||||||||||
| Other service fees |
67,437 | — | 50,357 | 117,794 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Third party revenues |
1,301,125 | 71,697 | 50,357 | 1,423,179 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenues from related party |
||||||||||||||||
| One-time commissions |
318,555 | 2,887 | — | 321,442 | ||||||||||||
| Recurring service fees |
347,819 | 427,907 | — | 775,726 | ||||||||||||
| Performance-based income |
707 | 38,794 | — | 39,501 | ||||||||||||
| Other service fees |
722 | — | 1,066 | 1,788 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Related party revenues |
667,803 | 469,588 | 1,066 | 1,138,457 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
1,968,928 | 541,285 | 51,423 | 2,561,636 | ||||||||||||
| Less: business taxes and related surcharges |
(37,274 | ) | (9,475 | ) | (1,315 | ) | (48,064 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net revenues |
1,931,654 | 531,810 | 50,108 | 2,513,572 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating costs and expenses: |
||||||||||||||||
| Compensation and benefits |
||||||||||||||||
| Relationship manager compensation |
(556,554 | ) | (1,452 | ) | (5,614 | ) | (563,620 | ) | ||||||||
| Performance Fee Compensation |
— | (8,146 | ) | — | (8,146 | ) | ||||||||||
| Other compensation |
(443,705 | ) | (155,567 | ) | (129,367 | ) | (728,639 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total compensation and benefits |
(1,000,259 | ) | (165,165 | ) | (134,981 | ) | (1,300,405 | ) | ||||||||
| Selling expenses |
(280,993 | ) | (16,172 | ) | (25,502 | ) | (322,667 | ) | ||||||||
| General and administrative expenses |
(120,764 | ) | (77,201 | ) | (36,523 | ) | (234,488 | ) | ||||||||
| Other operating expenses |
(82,059 | ) | (35,923 | ) | (33,106 | ) | (151,088 | ) | ||||||||
| Government subsidies |
78,445 | 83,920 | — | 162,365 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total operating costs and expenses |
(1,405,630 | ) | (210,541 | ) | (230,112 | ) | (1,846,283 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income (loss) from operations |
526,024 | 321,269 | (180,004 | ) | 667,289 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
20
Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In RMB, except for per ADS data and percentages)
(unaudited)
| Three months ended | ||||||||||||
| December 31, | December 31, | Change | ||||||||||
| 2016 | 2017 | |||||||||||
| RMB’000 | RMB’000 | |||||||||||
| Net income attributable to Noah Shareholders |
107,365 | 160,252 | 49.3 | % | ||||||||
| Adjustment for share-based compensation related to: |
||||||||||||
| Share options |
11,854 | 10,796 | (8.9 | %) | ||||||||
| Restricted shares |
12,178 | 13,625 | 11.9 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted net income attributable to Noah Shareholders (non-GAAP)* |
131,397 | 184,673 | 40.5 | % | ||||||||
| Net margin |
12.6 | % | 21.9 | % | ||||||||
| Adjusted net margin (non-GAAP)* |
16.4 | % | 25.3 | % | ||||||||
| Net income attributable to Noah Shareholders per ADS, diluted |
1.86 | 2.72 | 46.2 | % | ||||||||
| Adjusted net income attributable to Noah Shareholders per ADS, diluted (non-GAAP)* |
2.26 | 3.12 | 38.1 | % | ||||||||
| *The | non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments. |
21
Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In RMB, except for per ADS data and percentages)
(unaudited)
| Twelve months ended | ||||||||||||
| December 31, | December 31, | Change | ||||||||||
| 2016 | 2017 | |||||||||||
| RMB’000 | RMB’000 | |||||||||||
| Net income attributable to Noah Shareholders |
643,829 | 770,172 | 19.6 | % | ||||||||
| Adjustment for share-based compensation related to: |
||||||||||||
| Share options |
39,008 | 51,054 | 30.9 | % | ||||||||
| Restricted shares |
40,163 | 42,581 | 6.0 | % | ||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted net income attributable to Noah Shareholders (non-GAAP)* |
723,000 | 863,807 | 19.5 | % | ||||||||
| Net margin |
23.8 | % | 27.0 | % | ||||||||
| Adjusted net margin (non-GAAP)* |
26.9 | % | 30.3 | % | ||||||||
| Net income attributable to Noah Shareholders per ADS, diluted |
11.04 | 13.07 | 18.4 | % | ||||||||
| Adjusted net income attributable to Noah Shareholders per ADS, diluted (non-GAAP)* |
12.36 | 14.62 | 18.3 | % | ||||||||
22