Noah Holdings Limited Announces Unaudited Financial Results for the Third Quarter of 2013

  Noah Holdings Limited Announces Unaudited Financial Results for the Third
                               Quarter of 2013

PR Newswire

SHANGHAI, Nov. 18, 2013

SHANGHAI, Nov. 18, 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 third quarter
of 2013.

THIRD QUARTER 2013 FINANCIAL HIGHLIGHTS

  oNet revenues in the third quarter of 2013 were US$41.5 million, a 61.0%
    increase from the corresponding period in 2012.
  oIncome from operations in the third quarter of 2013 was US$17.0 million, a
    83.5% increase from the corresponding period in 2012.
  oOperating margin in the third quarter of 2013 was 41.0% compared to 35.9%
    in the corresponding period in 2012.
  oNet income attributable to Noah shareholders in the third quarter of 2013
    was US$14.0 million, a 85.3% increase from the corresponding period in
    2012. Non-GAAP[1] net income attributable to Noah shareholders in the
    third quarter of 2013 was US$15.3 million, a 78.4% increase from the
    corresponding period in 2012.
  oNet income per basic and diluted ADS in the third quarter of 2013 were
    both US$0.25. Non-GAAP net income per diluted ADS in the third quarter of
    2013 was US$0.27.

THIRD QUARTER 2013 OPERATIONAL HIGHLIGHTS

  oTotal number of registered clients as of September 30, 2013 increased by
    32.0% year-over-year to 50,084; this figure includes 48,044 registered
    individual clients, 1,923 registered enterprise clients and 117 wholesale
    clients that have entered into cooperation agreements with the Company.
  oActive clients[2] during the third quarter of 2013 were 2,245 a 39.2%
    increase from the corresponding period in 2012. The aggregate value of
    wealth management products distributed by the Company during the third
    quarter of 2013 was RMB12.0 billion (approximately US$2.0 billion)[3], a
    63.1% increase from the corresponding period in 2012. Of this aggregate
    value, fixed income products accounted for 75.6%, private equity fund
    products accounted for 19.5%, and other products, including mutual fund
    products, private securities investment funds and investment-linked
    insurance products, accounted for 4.9%. The average transaction value per
    client[4] in the third quarter of 2013 was RMB5.4 million (approximately
    US$0.9 million), a 17.1% 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 September 30, 2013 included 56 branches, the same
    as June 30, 2013 and down from 57 branches as of September 30, 2012. The
    number of relationship managers was 540 as of September 30, 2013, up from
    525 as of June 30, 2013 and up from 501 as of September 30, 2012.

      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
^[3] rate 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.

Ms.Jingbo Wang, Co-founder, Chairwoman of the Board of Directors and Chief
Executive Officer, commented, "The significant growth of our business in the
third quarter was driven by overall structural improvements. These
improvements include enhancement in product development, client servicing and
operating capability which has helped us scale new heights."

Mrs.Theresa Teng, Chief Financial Officer, said, "The improvement of product
mix was in line with the corporate strategy. In addition, our operating margin
and net margin both increased from the previous year. We are confident that we
will achieve our full year financial targets."

THIRD QUARTER 2013 FINANCIAL RESULTS

Net Revenues

Net revenues for the third quarter of 2013 were US$41.5 million, a 61.0%
increase from the corresponding period in 2012, due to increases in both
one-time commission revenues and recurring service fees for the third quarter
of 2013.

Net revenues from one-time commissions for the third quarter of 2013 were
US$17.7 million, a 16.5% increase from the corresponding period in 2012. The
year-over-year increase for the third quarter of 2013 was mainly due to an
increase in transaction value.

Net revenues from recurring service fees for the third quarter of 2013 were
US$21.5 million, a 111.7% increase from the corresponding period in 2012. The
year-over-year increase was mainly due to an increase in assets under
management by the Company since the second half of 2012 and the cumulative
effect of private equity funds previously distributed by the Company.

Operating Margin

Operating margin for the third quarter of 2013 was 41.0%, as compared to 35.9%
for the corresponding period in 2012. The year-over-year increase for the
third quarter of 2013 was driven by growth of net revenues exceeding those in
operating cost and expenses.

Operating cost and expenses for the third quarter of 2013, including cost of
revenues, selling expenses, G&A expenses and other operating income, were
US$24.5 million, a 48.3% increase from the corresponding period in 2012.

Cost of revenues for the third quarter of 2013 totaled US$8.9 million, a 74.1%
increase from the corresponding period in 2012. The year-over-year increase
for the third 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 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 third quarter of 2013 were US$10.1 million, a 39.8%
increase from the corresponding period in 2012. Selling expenses as a
percentage of net revenues for the third quarter of 2013 was 24.4%, as
compared to 28.1% for the corresponding period in 2012. The year-over-year
increases for the third quarter of 2013 was primarily due to increases in
employee compensations and general marketing fees as the Company strengthened
the selling and marketing functions.

G&A expenses for the third quarter of 2013 were US$9.5 million, a 81.9%
increase from the corresponding period in 2012. G&A expenses as a percentage
of net revenues for the third quarter of 2013 was 23.0%, as compared to 20.3%
for the corresponding period in 2012. The year-over-year increases for the
third quarter of 2013 was primarily due to increases in personnel expenses,
professional consulting fees and office expenses.

Other operating income for the third quarter of 2013 was US$4.1 million, as
compared to US$1.1 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 third quarter of 2013 were US$4.9 million, a 67.7%
increase from the corresponding period in 2012. The year-over-year increase
for the third quarter of 2013 was due to an increase in taxable income.

Net Income

Net income for the third quarter of 2013 was US$14.6 million, a 93.1% increase
from the corresponding period in 2012. Net margin for the third quarter of
2013 was 35.1%, as compared to 29.3% for the corresponding period in 2012.

Net income attributable to Noah shareholders for the third quarter of 2013 was
US$14.0 million, a 85.3% increase from the corresponding period in 2012. Net
income per basic and diluted ADS for the third quarter of 2013 were both
US$0.25, as compared to US$0.14 for the corresponding period in 2012.

Non-GAAP net income for the third quarter of 2013 was US$15.8 million, a 85.3%
increase from the corresponding period in 2012. Non-GAAP net margin for the
third quarter of 2013 was 38.2%, as compared to 33.2% for the corresponding
period in 2012.

Non-GAAP net income attributable to Noah shareholders for the third quarter of
2013 was US$15.3million, a 78.4% increase from the corresponding period in
2012. Non-GAAP net income per diluted ADS for the third quarter of 2013 was
US$0.27, as compared to US$0.15 for the corresponding period in 2012.

Balance Sheet and Cash Flow

As of September30, 2013, the Company had US$166.3 million in cash and cash
equivalents, an increase of US$1.0 million from US$165.3 million as of
June30, 2013. In the third quarter of 2013, the Company generated US$14.2
million in its operating activities, invested $36.9 million mostly in fixed
income products, received US$26.8 million from sale of fixed income products

On May22, 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 September30, 2013, the Company has
repurchased 33,755 ADSs for approximately US$0.3 million, inclusive of
transaction charges.

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 Monday, November 18, 2013 at
8:00 pm (Eastern) / 5:00 pm (Pacific) / 9:00 am (Hong Kong, Tuesday, November
19, 2013) to discuss its third 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 #            94814387

A telephone replay will be available shortly after the call until November 25,
2013 at +1-646-254-3697 (US Local Toll) or +61-2-8199-0299 (International).
Conference ID #94814387.

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 September 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
Jing Ou-Yang, Director of IR
Tel: +86 21 2510 0889
ir@noahwm.com



— FINANCIAL AND OPERATIONAL TABLES FOLLOW —

Noah Holdings Limited

Condensed Consolidated Balance Sheets

(In U.S. dollars)

(unaudited)


                                                 As of
                                                 June30,     September 30,
                                                 2013          2013
                                                 $             $
Assets
Current assets:
Cash and cash equivalents                         165,282,019    166,336,755
Restricted cash                                   162,935        163,399
Short-term investments                            25,841,272     34,347,091
Accounts receivable, net of allowance for
doubtful accounts
                                                  17,451,506     18,241,359
 of nil at June30, 2013 and September30,
2013
Deferred tax assets                               1,259,779      1,236,928
Amounts due from related parties                  8,287,628      16,379,833
Other current assets                              6,014,418      7,058,025
Total current assets                              224,299,557    243,763,390
Long-term investments                             3,153,616      4,796,569
Investment in affiliates                          12,226,997     14,210,415
Property and equipment, net                       7,012,982      9,037,302
Non-current deferred tax assets                   1,143,317      1,128,667
Other non-current assets                          880,118        926,016
Total Assets                                      248,716,587    273,862,359
Liabilities and Equity
Current liabilities:
Accrued payroll and welfare expenses              17,415,118     21,875,324
Income tax payable                                4,167,664      4,413,278
Deferred revenues                                 12,731,182     12,652,237
Other current liabilities                         8,738,187      12,340,357
Total current liabilities                         43,052,151     51,281,196
Non-current uncertain tax position liabilities    1,550,996      1,596,504
Other non-current liabilities                     3,114,903      3,440,302
Total Liabilities                                 47,718,050     56,318,002
Equity                                            200,998,537    217,544,357
Total Liabilities and Equity                      248,716,587    273,862,359



Noah Holdings Limited

Condensed Consolidated Income Statements

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

(unaudited)


                                    Threemonthsended
                                                   
                                    September 30,
                                                   September 30,  Change
                                    2012
                                                   2013
                                    $              $
Revenues:
Third-party revenues                 20,002,648     23,890,350     19.4%
Related party revenues               7,268,368      20,010,928     175.3%
Total revenues                       27,271,016     43,901,278     61.0%
Less: business taxes and related     (1,515,774)    (2,442,749)    61.2%
surcharges
Net revenues                         25,755,242     41,458,529     61.0%
Operating cost and expenses:
Cost of revenues                     (5,126,370)    (8,924,684)    74.1%
Selling expenses                     (7,230,023)    (10,109,459)   39.8%
General and administrative expenses  (5,236,637)    (9,525,521)    81.9%
Other operating income               1,095,360      4,090,866      273.5%
Total operating cost and expenses    (16,497,670)   (24,468,798)   48.3%
Income from operations               9,257,572      16,989,731     83.5%
Other income:
Interest income                      491,212        822,357        67.4%
Investment income                    788,997        1,048,252      32.9%
Other income                         118,944        77,788         (34.6%)
Total other income                   1,399,153      1,948,397      39.3%
Income before taxes and loss from    10,656,725     18,938,128     77.7%
equity in affiliates
Income tax expense                   (2,942,322)    (4,935,006)    67.7%
(Loss) income from equity in         (167,006)      567,462        439.8%
affiliates
Net income                           7,547,397      14,570,584     93.1%

                                     59             586,000        993120 %
Less: net income attributable to
non-controlling interests
Net income attributable to Noah      7,547,338      13,984,584     85.3%
Shareholders
Income per ADS, basic                0.14           0.25           78.6%
Income per ADS, diluted              0.14           0.25           78.6%
Margin analysis:
Operating margin                     35.9%          41.0%
Net margin                           29.3%          35.1%
Weighted average ADS equivalent:
[1]
Basic                                55,259,030     54,993,576
Diluted                              55,769,254     56,191,252
ADS equivalent outstanding at end    56,372,310     55,117,298
of 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
                                     September 30,  September 30,
                                                                   Change
                                     2012          2013
                                     $              $
Net income attributable to Noah         7,547,338     13,984,584    85.3%
Shareholders
Other comprehensive income, net of
tax:
Foreign currency translation            1,118,361     462,039       (58.7%)
adjustments
Comprehensive income                    8,665,699     14,446,623    66.7%
Less: Comprehensive income
attributable to non-controlling         —             612,214       —
interests
Comprehensive income attributable to    8,664,699     13,834,409    59.7%
Noah Shareholders







Noah Holdings Limited

Supplemental Information

(unaudited)


                                     As of
                                     September30,  September30,
                                                                    Change
                                     2012          2013
Number of registered clients             37,943          50,084      32.0%
Number of relationship managers          501             540         7.8%
Number of branch offices                 57              56          (1.8%)
                                     Three months ended
                                     September 30,  September 30,   Change
                                     2012           2013
                                     (in millions of RMB, except number of

                                     active clients and percentages)

                                     
Number of active clients                 1,613           2,245       39.2%
Transaction value:
Fixed income products                    5,304           9,093       71.4%
Private equity fund products             1,703           2,351       38.1%
other products, including mutual
fund products, private
 securities investment        367             584         59.1%
funds and investment-linked
 insurance products
Total transaction value                  7,374           12,029      63.1%
Average transaction value per client     4.57            5.4         17.1%



Noah Holdings Limited

Reconciliation of GAAP to Non-GAAP Results

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

(unaudited)


                                         Three months ended
                                         September 30,  September 30,
                                                                       Change
                                         2012          2013
                                         $              $
Net income                                  7,547,397     14,570,584    93.1%
Adjustment for share-based compensation
related to:
Share options                               54,678        55,298        1.1%
Restricted shares                           952,121       1,223,451     28.5%
Adjusted net income (non-GAAP)*             8,554,196     15,849,333    85.3%
Net margin                                  29.3%         35.1%
Adjusted net margin (non-GAAP)*             33.2%         38.2%
Net income attributable to Noah             7,547,338     13,984,584    85.3%
Shareholders
Adjustment for share-based compensation
related to:
Share options                               54,678        55,298        1.1%
Restricted shares                           952,121       1,223,451     28.5%
Adjusted net income attributable to Noah    8,554,137     15,263,333    78.4%
Shareholders (non-GAAP)*
Net income per ADS, diluted                 0.14          0.25          86.2%
Adjusted net income per ADS, diluted        0.15          0.27          83.0%
(non-GAAP)*



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



SOURCE Noah Holdings Limited
 
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