Noah Holdings Limited Announces Unaudited Financial Results for the Second Quarter of 2013 and Appoints New Chief Financial

  Noah Holdings Limited Announces Unaudited Financial Results for the Second
           Quarter of 2013 and Appoints New Chief Financial Officer

PR Newswire

SHANGHAI, Aug. 21, 2013

SHANGHAI, Aug. 21, 2013 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the
"Company") (NYSE: NOAH), a leading wealth management service provider focusing
on distributing wealth management products to the high net worth population in
China, today announced its unaudited financial results for the second quarter
of 2013 and appointed new Chief Financial Officer.

SECOND QUARTER 2013 FINANCIAL HIGHLIGHTS

  oNet revenues in the second quarter of 2013 were US$44.3 million, a 132.1%
    increase from the corresponding period in 2012.
  oIncome from operations in the second quarter of 2013 was US$18.4 million,
    a 156.3% increase from the corresponding period in 2012.
  oNet income attributable to Noah shareholders in the second quarter of 2013
    was US$14.4 million, a 133.1% increase from the corresponding period in
    2012. Non-GAAP[1] net income attributable to Noah shareholders in the
    second quarter of 2013 was US$16.1 million, a 128.5% increase from the
    corresponding period in 2012.
  oNet income per basic and diluted ADS in the second quarter of 2013 were
    both US$0.26. Non-GAAP net income per diluted ADS in the second quarter of
    2013 was US$0.29.

SECOND QUARTER 2013 OPERATIONAL HIGHLIGHTS

  oTotal number of registered clients as of June 30, 2013 increased by 35.1%
    year-over-year to 45,839; this figure includes 43,966 registered
    individual clients, 1,756 registered enterprise clients and 117 wholesale
    clients that have entered into cooperation agreements with the Company.
  oActive clients[2]  during the second quarter of 2013 were 2,602, a 76.4%
    increase from the corresponding period in 2012. The aggregate value of
    wealth management products distributed by the Company during the second
    quarter of 2013 was RMB12.4 billion (approximately US$2.0 billion)[3], a
    101.9% increase from the corresponding period in 2012. Of this aggregate
    value, fixed income products accounted for 85.6%, private equity fund
    products accounted for 9.1%, and other products, including mutual fund
    products, private securities investment funds and investment-linked
    insurance products, accounted for 5.3%.  The average transaction value per
    client[4] in the second quarter of 2013 was RMB4.8 million (approximately
    US$0.8 million), a 14.4% increase from the corresponding period in 2012,
    primarily due to an increase in transaction value from enterprise clients
    as a percentage of aggregate transaction value as their investment amounts
    tend to be higher than individual clients.
  oCoverage network as of June 30, 2013 included 56 branches, the same as
    March 31, 2013 and down from 60 branches as of June 30, 2012. The number
    of relationship managers was 525 as of June 30, 2013, up from 452 as of
    March 31, 2013 and down from 550 as of June 30, 2012. The increase in
    relationship managers is primarily due to the Company's strategy to
    reposition certain branch managers, previously in sales support role, to
    assume direct client facing responsibilities, and thus reclassified as
    relationship managers.

    Noah's Non-GAAP financial measures are its corresponding GAAP financial
[1] measures as adjusted by excluding the effects of all forms of share-based
    compensation.
[2] "Active clients" refers to those registered clients who purchased wealth
    management products distributed by Noah during any given period.
    The amount in RMB was translated into U.S. dollars using the average rate
[3] for the period as set forth in the H.10 statistical release of the Federal
    Reserve Board.
    "Average transaction value per client" refers to the average value of
[4] wealth management products distributed by Noah that are purchased by
    active clients during a given period.

APPOINTMENT OF NEW CHIEF FINANCIAL OFFICER

The Company appointed Dr. Theresa Teng as its Chief Financial Officer
replacing Mr. Tao Thomas Wu, effective August 21, 2013. Mr. Wu will continue
his service for the Company and will help the Company explore new business
initiatives. Dr. Teng has more than 15-year investment and finance management
experience. Prior to joining the Company, she served as the Chief Financial
Officer of PPS.TV, one of the leading internet TV players in China, the head
of finance of Semiconductor Manufacturing International Corp. (NYSE:SMI,
HKSE:0981), and the director of D.B. Zwirn & Co., a New York based alternative
investment fund. In addition, Dr. Teng taught Finance at Ming Chuan
University in Taiwan for seven years.

Ms. Jingbo Wang, Co-founder, Chairwoman of the Board of Directors and Chief
Executive Officer, commented, "We are pleased to welcome Dr. Teng to our
senior management team. We look forward to drawing upon Dr. Teng's extensive
experience as our business continues to grow."

"We thank Mr. Wu for his leadership and dedication for his tenure as Chief
Financial Officer. Since joining us in March 2010, Mr. Wu has made
significant contributions to Noah both in risk management and financial
control," Ms. Wang continued. "Mr. Wu will continue to work with us and
explore new business initiatives for Noah. Despite of the change in
management, our business strategy remains unchanged."

Ms. Wang commented. "I am pleased that our second quarter results exceeded our
expectations, and we have updated our 2013 full year forecast accordingly. We
believe that the significant growth in our business was driven by overall
structural improvements, including enhancement in product development, client
servicing and operating capabilities. These improvements will continue to
drive future growth."

SECOND QUARTER 2013 FINANCIAL RESULTS

Net Revenues

Net revenues for the second quarter of 2013 were US$44.3 million, a 132.1%
increase from the corresponding period in 2012, due to increases in both
one-time commission revenues and recurring service fees for the second quarter
of 2013.

Net revenues from one-time commissions for the second quarter of 2013 were
US$22.8 million, a 122.8% increase from the corresponding period in 2012. The
year-over-year increase for the second quarter of 2013 was mainly due to an
increase in transaction value and, to a lesser extent, an increase in average
commission rate.

Net revenues from recurring service fees for the second quarter of 2013 were
US$20.3 million, a 133.6% increase from the corresponding period in 2012. The
year-over-year increase was mainly due to the cumulative effect of private
equity funds previously distributed by the Company and an increase in assets
under management by the Company since the second half of 2012.

Operating Margin

Operating margin for the second quarter of 2013 was 41.6%, as compared to
37.7% for the corresponding period in 2012. The year-over-year increase for
the second quarter of 2013 was driven by growth of net revenues exceeding
those in operating cost and expenses.

Operating cost and expenses for the second quarter of 2013, including cost of
revenues, selling expenses, G&A expenses and other operating income, were
US$25.9 million, a 117.4% increase from the corresponding period in 2012.

Cost of revenues for the second quarter of 2013 totaled US$9.2 million, a
118.6% increase from the corresponding period in 2012. The year-over-year
increase for the second quarter of 2013 was primarily due to an increase in
compensation paid to relationship managers as a result of the increase in
transaction value, and incremental costs from aforementioned repositioning of
certain branch managers, whose compensations in their client facing roles are
now accounted for in cost of revenues, instead of selling expenses.

Selling expenses for the second quarter of 2013 were US$8.9 million, a 40.1%
increase from the corresponding period in 2012. Selling expenses as a
percentage of net revenues for the second quarter of 2013 was 20.1%, as
compared to 33.3% for the corresponding period in 2012.  The year-over-year
increases for the second quarter of 2013 was primarily due to increases in
employee compensations, share-based compensations and client service fees as
the Company strengthened its selling and marketing functions.

G&A expenses for the second quarter of 2013 were US$8.9 million, a 112.1%
increase from the corresponding period in 2012. G&A expenses as a percentage
of net revenues for the second quarter of 2013 was 20.2%, as compared to 22.1%
for the corresponding period in 2012. The year-over-year increases for the
second quarter of 2013 was primarily due to increases in personnel expenses,
professional consulting fees and rental expenses.

Other operating income for the second quarter of 2013 was US$1.2 million, as
compared to US$2.9 million for the corresponding period in 2012. Other
operating income is government subsidies received in the PRC from local
governments for general corporate purposes.

Income Tax Expenses

Income tax expenses  for the second quarter of 2013 were US$5.4 million, a
139.6% increase from the corresponding period in 2012. The year-over-year
increase for the second quarter of 2013 was due to an increase in taxable
income.  

Net Income

Net income for the second quarter of 2013 was US$14.7 million, a 137.7%
increase from the corresponding period in 2012. Net margin for the second
quarter of 2013 was 33.3%, as compared to 32.5% for the corresponding period
in 2012.

Non-GAAP net income for the second quarter of 2013 was US$16.4 million, a
132.6% increase from the corresponding period in 2012. Non-GAAP net margin for
the second quarter of 2013 was 37.1%, as compared to 37.0% for the
corresponding period in 2012.

Net income attributable to Noah shareholders for the second quarter of 2013
was US$14.4 million, a 133.1% increase from the corresponding period in 2012.
Net income per basic and diluted ADS for the second quarter of 2013 were both
US$0.26, as compared to US$0.11 for the corresponding period in 2012.

Non-GAAP net income attributable to Noah shareholders for the second quarter
of 2013 was US$16.1 million, a 128.5% increase from the corresponding period
in 2012. Non-GAAP net income per diluted ADS for the second quarter of 2013
was US$0.29, as compared to US$0.12 for the corresponding period in 2012.

Balance Sheet and Cash Flow

As of June 30, 2013, the Company had US$165.3 million in cash and cash
equivalents, an increase of US$44.5 million from US$120.8 million as of March
31, 2013. In the second quarter of 2013, the Company generated US$28.9 million
in its operating activities, received a net US$21.2 million from investing
activities, mostly from maturing of fixed income products previously
invested, and used US$7.7 million for dividend distribution. 

On May 22, 2013, the Company's Board of Directors authorized a new share
repurchase program of up to US$30 million worth of its issued and outstanding
ADSs over the course of one year. As of June 30, 2013, the Company has
repurchased 30,821 ADSs for approximately US$0.3 million, inclusive of
transaction charges, which has not been settled as of June 30, 2013.

2013 FORECAST

The Company estimates that non-GAAP net income attributable to Noah
shareholders for the full year 2013 is expected to be in a range of US$50.0
million and US$55.0 million, representing a year-over-year increase in the
range of 86.4% and 105.0%. This estimate reflects management's current
assessment and is subject to change.

CONFERENCE CALL

Senior management will host a conference call on Wednesday, August 21, 2013 at
8:00 pm (Eastern) / 5:00 pm (Pacific) / 8:00 am (Hong Kong, Thursday, August
22, 2013) to discuss its second quarter 2013 unaudited financial results and
recent business activity. The conference call may be accessed by calling the
following numbers:

                  Toll Free       Toll
- United States   +1-866-519-4004 +1-845-675-0437
- China
-Domestic        800-819-0121
- Domestic Mobile 400-620-8038
- Hong Kong       800-93-0346
- United Kingdom  080-8234-6646
Conference ID #   25724395

A telephone replay will be available shortly after the call until August 28,
2013 at +1-646-254-3697 (US Local Toll) or +61-2-8199-0299 (International).
Conference ID # 25724395.

A live webcast of the conference call and replay will be available in the
investor relations section of the Company's website at http://ir.noahwm.com .

DISCUSSION OF NON-GAAP FINANCIAL MEASURES:

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

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

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

ABOUT NOAH HOLDINGS LIMITED

Noah Holdings Limited is a leading wealth management service provider focusing
on distributing wealth management products to the high net worth population in
China. Noah distributes wealth management products, including primarily fixed
income products, private equity funds, private securities investment funds and
mutual funds. Noah is also equipped with asset management services capability,
managing its own fund of funds and real estate fund products. With over 500
relationship managers in 56 branch offices as of June 30, 2013, Noah's total
coverage network encompasses China's most economically developed regions where
the high net worth population is concentrated. Through this extensive coverage
network, product sophistication, and client knowledge, the Company caters to
the wealth management needs of China's high net worth population. For more
information please visit the Company's website at http://www.noahwm.com .

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 the full year  2013 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 actual results to
differ materially from those contained in any forward-looking statement,
including but not limited to the following: its goals and strategies; its
future business development, financial condition and results of operations;
the expected growth of the wealth management market in China and
internationally; its expectations regarding demand for and market acceptance
of the products it distributes; its expectations regarding keeping and
strengthening its relationships with key clients; relevant government policies
and regulations relating to its industry; its ability to attract and retain
quality employees; its ability to stay abreast of market trends and
technological advances; its plans to invest in research and development to
enhance its product choices and service offerings; competition in its industry
in China and internationally; general economic and business conditions in
China; and its ability to effectively protect its intellectual property rights
and not infringe on the intellectual property rights of others. Further
information regarding these and other risks is included in Noah's filings with
the Securities and Exchange Commission, including its annual report on Form
20-F. Noah does not undertake any obligation to update any forward-looking
statement as a result of new information, future events or otherwise, except
as required under applicable law. All information provided in this press
release and in the attachments is as of the date of this press release, and
Noah undertakes no duty to update such information, except as required under
applicable law.

Contacts:

Noah Holdings Limited
Shang Chuang, Director of IR
Tel: +86 21 3860 2388
ir@noahwm.com



-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --



Noah Holdings Limited

Condensed Consolidated Balance Sheets

(In U.S. dollars)

(unaudited)
                                                 As of
                                                 March 31, 2013  June 30, 2013
                                                 $               $
Assets
 Current assets:
   Cash and cash equivalents                     120,791,189     165,282,019
   Restricted cash                               80,505          162,935
   Short-term investments                        49,291,869      25,841,272
   Accounts receivable, net of allowance for
   doubtful accounts of nil at March 31, 2013    15,670,930      17,451,506
   and June 30, 2013
   Deferred tax assets                           2,858,422       1,259,779
   Amounts due from related parties              9,090,741       8,287,628
   Other current assets                          5,929,676       6,014,418
   Total current assets                          203,713,332     224,299,557
 Long-term investments                           3,116,346       3,153,616
 Investment in affiliates                        10,875,216      12,226,997
 Property and equipment, net                     5,330,136       7,012,982
 Non-current deferred tax assets                 1,153,037       1,143,317
 Other non-current assets                        1,097,492       880,118
Total Assets                                     225,285,559     248,716,587
Liabilities and Equity
 Current liabilities:
   Accrued payroll and welfare expenses          9,997,862       17,415,118
   Income tax payable                            4,726,018       4,167,664
   Deferred revenues                             9,831,309       12,731,182
   Dividend payable                              7,726,426       -
   Other current liabilities                     7,008,991       8,738,187
   Total current liabilities                     39,290,606      43,052,151
 Non-current uncertain tax position liabilities  1,496,704       1,550,996
 Other non-current liabilities                   2,497,773       3,114,903
 Total Liabilities                               43,285,083      47,718,050
 Equity                                          182,000,476     200,998,537
Total Liabilities and Equity                     225,285,559     248,716,587



Noah Holdings Limited

Condensed Consolidated Income Statements

(In U.S. dollars, except for ADS data, per ADS data and percentages)

(unaudited)
                                      Three months ended
                                      June 30,       June 30,       Change
                                      2012            2013
Revenues:                             $               $
 Third-party revenues               16,072,669      26,397,769      64.2%
 Related party revenues             4,107,167       20,455,258      398.0%
Total revenues                        20,179,836      46,853,027      132.2%
 Less: business taxes and related   (1,106,122)     (2,588,670)     134.0%
surcharges
Net revenues                          19,073,714      44,264,357      132.1%
Operating cost and expenses:
 Cost of revenues                   (4,210,909)     (9,204,873)     118.6%
 Selling expenses                   (6,351,403)     (8,897,931)     40.1%
 General and administrative         (4,213,212)     (8,934,533)     112.1%
expenses
 Other operating income             2,885,837       1,185,135       (58.9%)
Total operating cost and expenses     (11,889,687)    (25,852,202)    117.4%
Income from operations                7,184,027       18,412,155      156.3%
Other income:
 Interest income                    538,532         692,734         28.6%
 Investment income                  953,462         847,153         (11.1%)
 Other income                       (387,942)       12,617          (103.3%)
Total other income                    1,104,052       1,552,504       40.6%
Income before taxes and loss from     8,288,079       19,964,659      140.9%
equity in affiliates
Income tax expense                    (2,251,407)     (5,394,450)     139.6%
(Loss) income from equity in          161,838         165,921         2.5%
affiliates
Net income                            6,198,510       14,736,130      137.7%
Less: net income attributable to      -               288,312         -
non-controlling interests
Net income attributable to Noah       6,198,510       14,447,818      133.1%
Shareholders
Income per ADS, basic                 0.11            0.26            136.4%
Income per ADS, diluted               0.11            0.26            136.4%
Margin analysis:
Operating margin                      37.7%           41.6%
Net margin                            32.5%           33.3%
Weighted average ADS equivalent: [1]
Basic                                 55,842,814      54,809,120
Diluted                               56,697,568      55,746,252
ADS equivalent outstanding at end of  56,195,755      54,915,820
period


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



Noah Holdings Limited

Condensed Comprehensive Income Statements

(In U.S. dollars)

(unaudited)
                                               Three months ended
                                               June 30,  June 30,   Change
                                               2012       2013
                                               $          $
Net income                                     6,198,510  14,736,130  137.7%
Other comprehensive income, net of tax:
 Foreign currency translation adjustments  (803,713)  1,683,916   (309.5%)
Comprehensive income                           5,394,797  16,420,046  204.4%
Less: Comprehensive income attributable to     -          387,716     -
non-controlling interests
Comprehensive income attributable to Noah      5,394,797  16,032,330  197.2%
Shareholders



Noah Holdings Limited

Supplemental Information

(unaudited)
                                  As of
                                  June 30, 2012     June 30,        Change
                                                    2013
Number of registered clients     33,927            45,839          35.1%
Number of relationship managers  550               525             (4.5%)
Number of branch offices         60                56              (6.7%)
                                  Three months ended
                                  June 30, 2012     June 30,        Change
                                                    2013
                                  (in millions of RMB, except number of active
                                  clients and percentages)
Number of active clients         1,475             2,602           76.4%
Transaction value:
 Fixed income products     4,025             10,618          163.8%
 Private equity fund       1,764             1,133           (35.8%)
products
 other products, including
mutual fund products, private
securities investment funds and   355               655             84.5%
investment-linked insurance
products, 
Total transaction value          6,144             12,406          101.9%
Average transaction value per    4.17              4.77            14.4%
client



Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

(In U.S. dollars, except for ADS data and percentages)

(unaudited)
                                                Three months ended
                                                June 30,  June 30,   Change
                                                2012       2013
                                                $          $
Net income                                      6,198,510  14,736,130  137.7%
 Adjustment for share-based compensation
related to:
 Share options                        401,157    58,316      (85.5%)
 Restricted shares                    455,589    1,612,898   254.0%
Adjusted net income (non-GAAP)*                7,055,256  16,407,344  132.6%
Net margin                                      32.5%      33.3%
Adjusted net margin (non-GAAP)*                 37.0%      37.1%
Net income attributable to Noah Shareholders    6,198,510  14,447,818  133.1%
 Adjustment for share-based compensation
related to:
 Share options                        401,157    58,316      (85.5%)
 Restricted shares                    455,589    1,612,898   254.0%
Adjusted net income attributable to Noah        7,055,256  16,119,032  128.5%
Shareholders (non-GAAP)*
Net income per ADS, diluted                     0.11       0.26        136.4%
Adjusted net income per ADS, diluted           0.12       0.29        141.7%
(non-GAAP)*


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



SOURCE Noah Holdings Limited

Website: http://ir.noahwm.com
Website: http://www.noahwm.com
 
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