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Noah Holdings Limited Announces Unaudited Financial Results for the Third Quarter of 2017

SHANGHAI, Nov. 20, 2017 /PRNewswire/ -- 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 financial results for the third quarter of 2017.

THIRD QUARTER 2017 FINANCIAL HIGHLIGHTS

  • Net revenues for the third quarter of 2017 were RMB684.3 million (US$102.9 million), a 12.5% increase from the corresponding period in 2016.

(RMB millions,

except percentages)

Q3 2016



Q3 2017



YoY Change

Wealth management

474.6



488.9



3.0%

Asset management

122.5



164.6



34.3%

Internet financial services

11.4



30.9



172.0%

Total net revenues

608.5



684.3



12.5%

  • Income from operations for the third quarter of 2017 was RMB160.3 million (US$24.1 million), a 1.3% decrease from the corresponding period in 2016.

(RMB millions,

except percentages)

Q3 2016



Q3 2017



YoY Change

Wealth management

143.1



106.8



(25.3%)

Asset management

62.4



77.5



24.3%

Internet financial services

(43.0)



(24.0)



(44.1%)

Total income from operations

162.5



160.3



(1.3%)

  • Net income attributable to Noah shareholders for the third quarter of 2017 was RMB185.9 million (US$27.9 million), a 19.8% increase from the corresponding period in 2016.
  • Non-GAAP[1] net income attributable to Noah shareholders for the third quarter of 2017 was RMB215.4 million (US$32.4 million), a 19.9% increase from the corresponding period in 2016.

THIRD QUARTER 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, enterprise and institutional clients. Through its wealth management business, 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 September 30, 2017 was 175,979, a 34.9% increase from September 30, 2016.
  • Total number of active clients[2] during the third quarter of 2017 was 4,456, a 2.7% increase from September 30, 2016.
  • Aggregate value of financial products distributed during the third quarter of 2017 was RMB23.5 billion (US$3.5 billion), a 1.5% decrease from the third quarter of 2016.

Product type

Three months ended September 30,


2016

2017


(RMB in billions, except percentages)

Fixed income

17.0

71.2%

10.8

45.8%

Private equity

5.4

22.5%

9.6

40.7%

Secondary market equity

1.0

4.3%

3.1

13.2%

Other products

0.5

2.0%

0.1

0.3%

All products

23.9

100.0%

23.5

100.0%

  • Average transaction value per client[3] for the third quarter of 2017 was RMB5.3 million (US$0.8 million), a 4.1% decrease from the corresponding period in 2016.
  • Number of relationship managers was 1,286 as of September 30, 2017, a 2.1% increase from June 30, 2017 and a 17.4% increase from September 30, 2016.

Asset Management Business

Gopher Asset Management Co. Ltd. ("Gopher"), a wholly-owned 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 September 30, 2017 were RMB142.9 billion (US$21.5 billion), a 3.0% increase from June 30, 2017 and a 24.4% increase from September 30, 2016.

Investment type

As of June 30, 2017

Asset Growth

Asset Expiration/ Redemption

As of September 30, 2017



(RMB billions, except percentages)


Real estate

15.4

11.1%

0.8

4.6

11.6

8.1%

Private equity

72.2

52.0%

9.3

0.2

81.3

56.9%

Secondary market

6.9

4.9%

0.1

1.0

6.0

4.2%

Credit

40.7

29.4%

8.9

9.2

40.4

28.3%

Other investments

3.5

2.5%

0.1

-

3.6

2.5%

All Investments

138.7

100.0%

19.2

14.9

142.9

100.0%









Internet Financial Service Business

The Company's Internet financial service 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, "We delivered another quarter of solid operating and financial performance for our shareholders. In particular, we are quite pleased to see a higher share of equity-related products in the overall product mix, helping us improve our earnings quality, as evidenced by a much larger share of recurring and carry income received in the third quarter. We continue to successfully execute our global strategy, launching new products and overseas branches, and providing a wider range of comprehensive financial services for our high net worth and institutional clients alike."

THIRD QUARTER 2017 FINANCIAL RESULTS

Net Revenues

Net revenues for the third quarter of 2017 were RMB684.3 million (US$102.9 million), a 12.5% 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 third quarter of 2017 were RMB211.3 million (US$31.8 million), a 24.3% decrease from the corresponding period in 2016, primarily due to a decline in sales of insurance products.
    • Net revenues from recurring service fees for the third quarter of 2017 were RMB209.6 million (US$31.5 million), a 19.9% 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 third quarter of 2017 were RMB48.0 million (US$7.2 million), compared with RMB1.2 million in the corresponding period of 2016, primarily due to the realization of performance-based income from a real estate product distributed in previous periods.
    • Net revenues from other service fees for the third quarter of 2017 were RMB19.9 million (US$3.0 million), a 2.6% increase from the corresponding period in 2016.
  • Asset Management Business
    • Net revenues from recurring service fees for the third quarter of 2017 were RMB132.9 million (US$20.0 million), a 12.0% increase from the corresponding period in 2016. The increase was primarily due to the increase in assets under management.
    • Net revenues from performance-based income for the third quarter of 2017 were RMB26.3 million (US$4.0 million), compared with RMB3.5 million in the corresponding period of 2016, primarily due to the realization of performance-based income from a real estate project.
  • Internet Financial Service Business
    • Net revenues for the third quarter of 2017 were RMB30.9 million (US$4.6 million), a 172.0% increase from the corresponding period in 2016. The increase was primarily due to the growth in overall Internet financial services compared with the corresponding period of 2016.

Operating costs and expenses

Operating costs and expenses for the third quarter of 2017 were RMB524.0 million (US$78.8 million), a 17.5% increase from the corresponding period in 2016. Operating costs and expenses for the third quarter of 2017 primarily consisted of compensation and benefits of RMB356.2 million (US$53.5 million), selling expenses of RMB77.0 million (US$11.6 million), general and administrative expenses of RMB60.7 million (US$9.1 million) and other operating expenses of RMB35.3 million (US$5.3 million).

  • Operating costs and expenses for the wealth management business for the third quarter of 2017 were RMB382.0 million (US$57.4 million), a 15.2% increase from the corresponding period in 2016, primarily due to an increase in relationship manager compensation, resulting from higher PE/VC product sales volume which have relatively higher commissions.
  • Operating costs and expenses for the asset management business for the third quarter of 2017 were RMB87.0 million (US$13.1 million), a 44.8% increase from the corresponding period in 2016, primarily due to an increase in staff compensation.
  • Operating costs and expenses for the Internet financial service business for the third quarter of 2017 were RMB54.9 million (US$8.3 million), a 1.1% increase from the corresponding period in 2016.

Operating Margin

Operating margin for the third quarter of 2017 was 23.4%, a decrease from 26.7% for the corresponding period in 2016. The decrease was mainly due to decreased government subsidies.

  • Operating margin for the wealth management business for the third quarter of 2017 decreased to 21.9% from 30.1% for the corresponding period in 2016.
  • Operating margin for the asset management business for the third quarter of 2017 was 47.1%, compared with 50.9% for the corresponding period in 2016.
  • Operating loss for the Internet financial service business for the third quarter of 2017 was RMB24.0 million (US$3.6 million), down from RMB43.0 million for the corresponding period in 2016.

Income Tax Expenses

Income tax expenses for the third quarter of 2017 were RMB41.8 million (US$6.3 million), a 23.2% increase from the corresponding period in 2016. The increase was primarily due to higher taxable income and a higher effective tax rate.

Income from Equity in Affiliates

Income from equity in affiliates for the third quarter of 2017 was RMB45.7 million (US$6.9 million), compared with RMB5.1 million in the corresponding period in 2016. The increase was mainly due to the increased net asset value of the Company's investments in the funds managed by Gopher as a general partner.

Net Income

  • Net Income
    • Net income for the third quarter of 2017 was RMB183.4 million (US$27.6 million), a 24.3% increase from the corresponding period in 2016.
    • Net margin for the third quarter of 2017 was 26.8%, up from 24.3% for the corresponding period in 2016.
    • Net income attributable to Noah shareholders for the third quarter of 2017 was RMB185.9 million (US$27.9 million), a 19.8% increase from the corresponding period in 2016.
    • Net income attributable to Noah shareholders per basic and diluted ADS for the third quarter of 2017 was RMB3.28 (US$0.49) and RMB3.13 (US$0.47), respectively, up from RMB2.75 and RMB2.65 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 third quarter of 2017 was RMB215.4 million (US$32.4 million), a 19.9% increase from the corresponding period in 2016.
    • Non-GAAP net margin attributable to Noah shareholders for the third quarter of 2017 was 31.5%, up from 29.5% for the corresponding period in 2016.
    • Non-GAAP net income attributable to Noah shareholders per diluted ADS for the third quarter of 2017 was RMB3.62 (US$0.54), up from RMB3.05 for the corresponding period in 2016.

Balance Sheet and Cash Flow

As of September 30, 2017, the Company had RMB1,987.8 million (US$298.8 million) in cash and cash equivalents, compared with RMB2,003.5 million as of June 30, 2017 and RMB1,756.9 million as of September 30, 2016.

Net cash inflow from the Company's operating activities during the third quarter of 2017 was RMB363.6 million (US$54.7 million), as a result of a positive profit earned from normal business operations and a decrease of receivables.

Net cash inflow from the Company's investing activities during the third quarter of 2017 was RMB247.9, million (US$37.3 million), primarily due to the proceeds from sales of available-for-sale securities and matured factoring arrangements that are accounted for as secured borrowings.

Net cash outflow from the Company's financing activities was RMB609.8 million (US$91.7million) in the third quarter of 2017, primarily due to the decrease in mezzanine equity associated with the redemption of Sequoia's investment in Gopher and payments of matured factoring arrangements that are accounted for as secured borrowings.

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 September 30, 2017, the Company had repurchased no ADS under this program.

2017 FORECAST

The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2017 will be in the range of RMB825 million to RMB860 million, an increase of 14.1% to 18.9% compared with the full year of 2016. 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 third quarter 2017 unaudited financial results and recent business activities.

The conference call may be accessed with the following details:

Conference call details

Date/Time:

Monday, November 20, 2017 at 8:00 p.m., U.S. Eastern Time

Tuesday, November 21, 2017 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 Third quarter 2017 Earnings Call

Participant Password:

Noah Holdings

A telephone replay will be available starting one hour after the end of the conference call until November 27, 2017 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10114220.

A live and archived webcast of the conference call will be available at Noah's investor relations website under the News & Events section at http://ir.noahwm.com.

DISCUSSION OF NON-GAAP FINANCIAL MEASURES

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

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

When evaluating the Company's operating performance in the periods presented, management reviewed non-GAAP net income 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

Founded in 2005, 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 first nine months of 2017, Noah distributed RMB89.2 billion (US$13.4 billion) of financial products. Through its wholly-owned subsidiary, Gopher Asset Management, Noah had assets under management of RMB142.9 billion (US$21.5 billion) as of September 30, 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 1,286 relationship managers across 222 branches and sub-branches in 78 cities in China, and serves the international investment needs of its clients through wholly owned subsidiaries in Hong Kong, Taiwan and the United States. The Company's wealth management business had 175,979 registered clients as of September 30, 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 quarter ended September 30, 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 RMB6.6533 to US$1.00, the effective noon buying rate for September 30, 2017 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 2017 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 --




Noah Holdings Limited



Condensed Consolidated Balance Sheets



(unaudited)







As of






June 30,

2017


September 30,

2017


September 30,

2017





RMB'000


RMB'000


USD'000

Assets








Current assets:









Cash and cash equivalents


2,003,529


1,987,798


298,769



Restricted cash


-


-


-



Short-term investments (including short-term
investments measured at fair value of
RMB414,513 thousands and
RMB363,692 thousands, as of
June 30, 2017 and September 30, 2017,
respectively)


569,513


424,692


63,832



Accounts receivable, net of allowance for
doubtful accounts of nil at June 30, 2017
and September 30, 2017


165,765


144,724


21,752



Loans receivable


295,923


401,229


60,305



Amounts due from related parties


723,124


701,756


105,475



Loans receivable from factoring business


570,769


440,794


66,252



Other current assets


78,510


238,830


35,896



Total current assets


4,407,133


4,339,823


652,281











Long-term investments (including long-term
investments measured at fair value of
RMB113,559 thousands and
RMB116,975 thousands, as of
June 30, 2017 and
September 30, 2017, respectively)


687,967


690,747


103,820


Investment in affiliates


588,933


640,820


96,316


Property and equipment, net


252,803


248,090


37,288


Non-current deferred tax assets


52,332


52,083


7,828


Other non-current assets


81,720


104,438


15,700

Total Assets


6,070,888


6,076,001


913,233










Liabilities and Equity








Current liabilities:









Accrued payroll and welfare expenses


431,467


491,929


73,938



Income tax payable


52,118


70,051


10,529



Amounts due to related parties


12,273


273


41



Deferred revenues


177,279


211,861


31,843



Loans payable from factoring business


328,562


303,866


45,671



Other current liabilities


266,696


366,450


55,079



Convertible notes


542,344


498,998


75,000



Total current liabilities


1,810,739


1,943,428


292,101











Non-current uncertain tax position liabilities


4,437


4,424


665


Other non-current liabilities


100,322


71,807


10,793


Total Liabilities


1,915,498


2,019,659


303,559


Mezzanine Equity - Redeemable non-controlling Interest of Subsidiary


337,481


-


-


Equity


3,817,909


4,056,342


609,674

Total Liabilities and Equity


6,070,888


6,076,001


913,233


Noah Holdings Limited

Condensed Consolidated Income Statements

(In RMB'000, except for USD data, per ADS data and percentages)

(unaudited)




Three months ended




September 30,


September 30,


September 30,


Change


2016


2017


2017



Revenues:

RMB'000


RMB'000


USD'000



Revenues from third party








One-time commissions

208,917


87,455


13,145


(58.1%)

Recurring service fees

113,230


125,702


18,893


11.0%

Performance-based income

3,258


48,759


7,329


1396.6%

Other service fees

30,903


50,866


7,645


64.6%

Total third-party revenues

356,308


312,782


47,012


(12.2%)

Revenues from related party








One-time commissions

72,276


125,598


18,878


73.8%

Recurring service fees

181,689


218,684


32,869


20.4%

Performance-based income

1,467


26,020


3,911


1673.7%

Other service fees

32


5,335


802


16571.9%

Total related party revenues

255,464


375,637


56,460


47.0%

Total revenues

611,772


688,419


103,470


12.5%

Less: business taxes and related surcharges

(3,314)


(4,106)


(617)


23.9%

Net revenues

608,458


684,313


102,855


12.5%

Operating costs and expenses:








Compensation and benefits








Relationship manager compensation

(130,889)


(158,310)


(23,794)


20.9%

Other Compensations

(187,514)


(197,871)


(29,740)


5.5%

Total compensation and benefits

(318,403)


(356,181)


(53,534)


11.9%

Selling expenses

(77,845)


(76,967)


(11,568)


(1.1%)

General and administrative expenses

(54,879)


(60,738)


(9,129)


10.7%

Other operating expenses

(38,040)


(35,330)


(5,310)


(7.1%)

Government subsidies

43,172


5,234


787


(87.9%)

Total operating costs and expenses

(445,995)


(523,982)


(78,754)


17.5%

Income from operations

162,463


160,331


24,101


(1.3%)

Other income:








Interest income

11,836


12,962


1,948


9.5%

Interest expenses

(4,891)


(4,728)


(711)


(3.3%)

Investment income

4,503


11,271


1,694


150.3%

Other (expense) income

2,495


(290)


(44)


(111.6%)

Total other income

13,943


19,215


2,887


37.8%

Income before taxes and income from equity in affiliates

176,406


179,546


26,988


1.8%

Income tax expense

(33,974)


(41,845)


(6,289)


23.2%

Income from equity in affiliates

5,134


45,712


6,871


790.4%

Net income

147,566


183,413


27,570


24.3%

Less: net loss attributable to non-controlling Interests

(7,643)


(2,136)


(321)


(72.1%)

Less: Loss attributable to redeemable non-controlling interest of Subsidiary

-


(333)


(50)


-

Net income attributable to Noah Shareholders

155,209


185,882


27,941


19.8%









Income per ADS, basic

2.75


3.28


0.49


19.3%

Income per ADS, diluted

2.65


3.13


0.47


18.1%

Margin analysis:








Operating margin

26.7%


23.4%


23.4%



Net margin

24.3%


26.8%


26.8%



Weighted average ADS equivalent: [1]








Basic

56,382,358


56,594,562


56,594,562



Diluted

60,444,632


60,749,462


60,749,462



ADS equivalent outstanding at end of period

56,432,189


56,704,721


56,704,721






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

Condensed Comprehensive Income Statements

(unaudited)




Three months ended




September 30,


September 30,


September 30,


Change


2016


2017


2017




RMB'000


RMB'000


USD'000











Net income

147,566


183,413


27,570


24.3%

Other comprehensive income, net of tax:








Foreign currency translation adjustments

(627)


(10,362)


(1,557)


1552.6%

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

10,327


4,930


741


(52.3%)

Comprehensive income

157,266


177,981


26,754


13.2%

Less: Comprehensive loss attributable to non-controlling interests

(7,683)


(2,089)


(314)


(72.8%)

Less: Loss attributable to redeemable non-controlling interest of Subsidiary

-


(333)


(50)


-

Comprehensive income attributable to Noah Shareholders

164,949


180,403


27,118


9.4%













Noah Holdings Limited

Supplemental Information

(unaudited)


As of


Change


September 30, 2016


September 30, 2017








Number of registered clients

130,491


175,979


34.9%

Number of relationship managers

1,095


1,286


17.4%

Number of cities under coverage

71


78


9.9%














Three months ended


Change


September 30, 2016


September 30, 2017



(in millions of RMB, except number of active clients and percentages)

Number of active clients

4,337


4,456


2.7%

Transaction value:






Fixed income products

17,027


10,785


(36.7%)

Private equity products

5,390


9,578


77.7%

Secondary market equity products

1,018


3,105


204.8%

Other products

470


79


(83.1%)

Total transaction value

23,904


23,546


(1.5%)

Average transaction value per client

5.51


5.28


(4.1%)

Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

Three months ended September 30, 2017



Wealth Management

Business


Asset Management

Business


Internet Financial Service Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from third party








One-time commissions

87,139


316


-


87,455

Recurring service fees

119,193


6,509


-


125,702

Performance-based income

48,349


410


-


48,759

Other service fees

19,991


4,974


25,901


50,866

Total third-party revenues

274,672


12,209


25,901


312,782

Revenues from related party








One-time commissions

125,517


81


-


125,598

Recurring service fees

91,733


126,951


-


218,684

Performance-based income

-


26,020


-


26,020

Other service fees

-


-


5,335


5,335

Total related party revenues

217,250


153,052


5,335


375,637

Total revenues

491,922


165,261


31,236


688,419

Less: business taxes and related surcharges

(3,059)


(709)


(338)


(4,106)

Net revenues

488,863


164,552


30,898


684,313

Operating costs and expenses:








Compensation and benefits








Relationship manager compensation

(157,561)


-


(749)


(158,310)

Other compensation

(116,828)


(52,178)


(28,865)


(197,871)

Total compensation and benefits

(274,389)


(52,178)


(29,614)


(356,181)

Selling expenses

(69,769)


(3,801)


(3,397)


(76,967)

General and administrative expenses

(26,216)


(21,803)


(12,719)


(60,738)

Other operating expenses

(14,749)


(11,403)


(9,178)


(35,330)

Government subsidies

3,097


2,137


-


5,234

Total operating costs and expenses

(382,026)


(87,048)


(54,908)


(523,982)

Income (loss) from operations

106,837


77,504


(24,010)


160,331


Noah Holdings Limited

Segment Condensed Income Statements

(unaudited)

Three months ended September 30, 2016


Wealth Management

Business


Asset Management

Business


Internet Financial Service Business


Total


RMB'000


RMB'000


RMB'000


RMB'000









Revenues:








Revenues from third party








One-time commissions

208,687


230


-


208,917

Recurring service fees

99,738


13,492


-


113,230

Performance-based income

1,146


2,112


-


3,258

Other service fees

19,437


-


11,466


30,903

Third party revenues

329,008


15,834


11,466


356,308

Revenues from related party








One-time commissions

72,151


125


-


72,276

Recurring service fees

76,047


105,642


-


181,689

Performance-based income

57


1,410


-


1,467

Other service fees

32


-


-


32

Related party revenues

148,287


107,177


-


255,464

Total revenues

477,295


123,011


11,466


611,772

Less: business taxes and related surcharges

(2,691)


(514)


(109)


(3,314)

Net revenues

474,604


122,497


11,357


608,458

Operating costs and expenses:








Compensation and benefits








Relationship manager compensation

(128,869)


(3)


(2,017)


(130,889)

Other compensation

(115,908)


(38,530)


(33,076)


(187,514)

Total compensation and benefits

(244,777)


(38,533)


(35,093)


(318,403)

Selling expenses

(70,124)


(3,834)


(3,887)


(77,845)

General and administrative expenses

(26,742)


(21,191)


(6,946)


(54,879)

Other operating expenses

(24,889)


(4,743)


(8,408)


(38,040)

Government subsidies

34,992


8,180


-


43,172

Total operating costs and expenses

(331,540)


(60,121)


(54,334)


(445,995)

Income (loss) from operations

143,064


62,376


(42,977)


162,463

Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)


Three months ended


September 30,


September 30,


Change


2016


2017



RMB'000


RMB'000









Net income attributable to Noah Shareholders

155,209


185,882


19.8%

Adjustment for share-based compensation related to:






Share options

5,410


15,105


179.2%

Restricted shares

19,082


14,396


(24.6%)

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

179,701


215,383


19.9%







Net margin

24.3%


26.8%



Adjusted net margin (non-GAAP)*

28.3%


31.1%



Net income attributable to Noah Shareholders per ADS, diluted

2.65


3.13


18.1%

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

3.05


3.62


18.7%







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


[1] 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.

[2] "Active clients" refers to registered clients who purchased financial products distributed by Noah during the period specified.

[3] "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.

View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-financial-results-for-the-third-quarter-of-2017-300559285.html

SOURCE Noah Holdings Limited