Breaking News

EU Adds 8 People, 3 Entities to Sanctions Over Ukraine Crisis
Tweet TWEET

Noah Holdings Limited Announces Unaudited Financial Results For The First Quarter Of 2014

  Noah Holdings Limited Announces Unaudited Financial Results For The First                                Quarter Of 2014  PR Newswire  SHANGHAI, May 12, 2014  SHANGHAI, May 12, 2014 /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 first quarter of 2014.  FIRST QUARTER 2014 FINANCIAL HIGHLIGHTS    oNet revenues in the first quarter of 2014 were US$50.3 million, a 54.1%     increase from the corresponding period in 2013.   oIncome from operations in the first quarter of 2014 was US$20.7 million, a     74.1% increase from the corresponding period in 2013.   oOperating margin in the first quarter of 2014 was 41.2%, compared to 36.4%     in the corresponding period in 2013.   oNet income attributable to Noah shareholders in the first quarter of 2014     was US$16.9 million, a 75.6% increase from the corresponding period in     2013. Non-GAAP[1] net income attributable to Noah shareholders in the     first quarter of 2014 was US$18.1 million, a 68.4% increase from the     corresponding period in 2013.   oNet income per basic and diluted ADS in the first quarter of 2014 were     both US$0.30. Non-GAAP net income per diluted ADS in the first quarter of     2014 was US$0.32.  FIRST QUARTER 2014 OPERATIONAL HIGHLIGHTS    oTotal number of registered clients as of March 31, 2014 increased by 30.4%     year-over-year to 55,519; this figure includes 53,100 registered     individual clients, 2,300 registered enterprise clients and 119 wholesale     clients that have entered into cooperation agreements with the Company.   oActive clients[2] during the first quarter of 2014 were 3,258, an 83.2%     increase from the corresponding period in 2013. The aggregate value of     wealth management products distributed by the Company during the first     quarter of 2014 was RMB15.0 billion (approximately US$2.5 billion)[3], a     72.6% increase from the corresponding period in 2013. Of this aggregate     value, fixed income products accounted for 74.3%, private equity fund     products accounted for 17.0%, and other products, including mutual fund     products, private securities investment funds and insurance products,     accounted for 8.7%.  The average transaction value per client[4] in the     first quarter of 2014 was RMB4.6 million (approximately US$0.8 million), a     5.7% decrease from the corresponding period in 2013.   oCoverage network as of March 31, 2014 included 56 branches, down from 57     branches as of December 31, 2013 but remained the same as March 31, 2013.     The number of relationship managers was 604 as of March 31, 2014, up from     569 as of December 31, 2013 and 452 as of March 31, 2013.  Ms. Jingbo Wang, Co-founder, Chairwoman of the Board of Directors and Chief Executive Officer, commented, "Benefiting from continuous optimization in business model and development of management team in the past two years, our business maintained strong growth momentum and performed better than expected in the first quarter." Ms. Wang continued, "In addition, our asset management capability was further enhanced and the Noah brand is more recognized among high net worth clients in China."  Ms. Theresa Teng, Chief Financial Officer, said, "Both transaction value and net revenues reached record heights in the first quarter as we continually grow customer base and execute strategic initiatives. More importantly, operating margin and net margin increased from the previous year which demonstrated improvement of operational efficiency."  [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 those registered clients who purchased wealth management products distributed by Noah during any given period. [3] The amount in RMB was translated into U.S. dollars using the average rate for the period as set forth in the H.10 statistical release of the Federal Reserve Board. [4] "Average transaction value per client" refers to the average value of wealth management products distributed by Noah that are purchased by active clients during a given period.  FIRST QUARTER 2014 FINANCIAL RESULTS  Net Revenues  Net revenues for the first quarter of 2014 were US$50.3 million, a 54.1% increase from the corresponding period in 2013, due to increases in both one-time commission revenues and recurring service fees for the first quarter of 2014.  Net revenues from one-time commissions for the first quarter of 2014 were US$18.3 million, a 19.0% increase from the corresponding period in 2013. The year-over-year increase for the first quarter of 2014 was primarily due to an increase in transaction value, despite a decrease in average commission rate.  Net revenues from recurring service fees for the first quarter of 2014 were US$30.9 million, an 88.5% increase from the corresponding period in 2013. The year-over-year increase for the first quarter of 2014 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 first quarter of 2014 was 41.2%, as compared to 36.4% for the corresponding period in 2013. The year-over-year increase for the first quarter of 2014 was driven by growth of net revenues exceeding the growth of operating cost and expenses.  Operating cost and expenses for the first quarter of 2014, including cost of revenues, selling expenses, G&A expenses and other operating income, were US$29.6 million, a 42.7% increase from the corresponding period in 2013. The year-over-year increases for the first quarter of 2014 was primarily due to the Company's expansion.  Cost of revenues for the first quarter of 2014 totaled US$11.1 million, an 85.3% increase from the corresponding period in 2013. The year-over-year increases for the first quarter of 2014 was primarily due to increases in compensation expenses paid to relationship managers as a result of the increase in transaction value.  Selling expenses for the first quarter of 2014 were US$10.7 million, a 35.7% increase from the corresponding period in 2013. The year-over-year increase for the first quarter of 2014 was primarily due to increases in personnel expenses and marketing activities. Selling expenses as a percentage of net revenues for the first quarter of 2014 was 21.4%, as compared to 24.3% for the corresponding period in 2013.  G&A expenses for the first quarter of 2014 were US$10.5 million, a 54.1% increase from the corresponding period in 2013. The year-over-year increase for the first quarter of 2014 was primarily due to increases in professional fees, personnel expenses and depreciation expenses for property and equipment. G&A expenses as a percentage of net revenues for the first quarter of 2014 was 20.9%, as compared to 20.9% for the corresponding period in 2013.  Other operating income for the first quarter of 2014 was US$2.8 million, as compared to US$31.0 thousand for the corresponding period in 2013. 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 first quarter of 2014 were US$5.6 million, a 41.5% increase from the corresponding period in 2013. The year-over-year increase for the first quarter of 2014 was primarily due to an increase in taxable income.  Net Income  Net income attributable to Noah shareholders for the first quarter of 2014 was US$16.9 million, a 75.6% increase from the corresponding period in 2013. Net margin for the first quarter of 2014 was 34.8%, as compared to 30.0% for the corresponding period in 2013. Net income per basic and diluted ADS for the first quarter of 2014 were both US$0.30, as compared to US$0.18 and US$0.17 for the corresponding period in 2013.  Non-GAAP net income attributable to Noah shareholders for the first quarter of 2014 was US$18.1 million, a 68.4% increase from the corresponding period in 2013. Non-GAAP net margin for the first quarter of 2014 was 36.0%, as compared to 32.9% for the corresponding period in 2013. Non-GAAP net income per diluted ADS for the first quarter of 2014 was US$0.32, as compared to US$0.19 for the corresponding period in 2013.  Balance Sheet and Cash Flow  As of March 31, 2014, the Company had US$160.0 million in cash and cash equivalents, a decrease of US$36.1 million from US$196.1 million as of December 31, 2013. In the first quarter of 2014, the Company used a net of US$4.5 million in its operating activities and used a net of US$35.7 million in investing activities, mostly related to fixed income product investments. In the first quarter of 2014, the Company received US$8.0 million short-term bank borrowings, and US$0.3 million from third-party minority investments in PRC affiliated entities of the Company.  2014 FORECAST  The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2014 is expected to be in a range of US$72.0 million and US$76.0 million, representing a year-over-year increase in the range of 27.0% and 34.1%. This estimate reflects management's current business outlook and is subject to change.  CONFERENCE CALL  Senior management will host a conference call on Monday, May 12, 2014 at 8:00 pm (Eastern) / 5:00 pm (Pacific) / 8:00 am (Hong Kong, Tuesday, May 13, 2014) to discuss its first quarter 2014 unaudited financial results and recent business activity. The conference call may be accessed by calling the following numbers:                                 TollFree UnitedStates +1-877-870-4263 China                          4001-201203 Hong Kong                      800-90-5945 International                  +1-412-317-0790 Conference ID #                10045419  A telephone replay will be available shortly after the call until May 19, 2014 at +1-877-344-7529 (US Local Toll) or +1-412-317-0088 (International). Conference ID # 10045419.  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, insurance products 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 600 relationship managers in 56 branch offices as of March 31, 2014, 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  2014 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 3860 2388 ir@noahwm.com  -- FINANCIAL AND OPERATIONAL TABLES FOLLOW --  Noah Holdings Limited Condensed Consolidated Balance Sheets (In U.S. dollars) (unaudited)                               As of                                            December 31, 2013  March 31, 2014                                            $                  $ Assets  Current assets:    Cash and cash equivalents               196,113,315        160,040,452    Restricted cash                         165,188            160,865    Short-term investments                  28,187,406         46,564,383    Accounts receivable, net of allowance    for    doubtful accounts of nil at September   8,472,013          13,682,745    30,    2013 and December 31, 2013    Loans receivable                        15,364,240         22,705,151    Deferred tax assets                     784,063            767,626    Amounts due from related parties        8,924,824          23,454,477    Other current assets                    4,695,947          4,065,973    Total current assets                    262,706,996        271,441,672  Long-term investments                     13,678,182         18,487,819  Investment in affiliates                  14,742,364         16,696,255  Property and equipment, net               9,412,313          9,004,958  Non-current deferred tax assets           1,494,769          1,451,815  Other non-current assets                  1,220,033          1,278,920 Total Assets                               303,254,657        318,361,439 Liabilities and Equity  Current liabilities:    Accrued payroll and welfare expenses    29,495,181         21,820,537    Income tax payable                      2,559,614          4,081,788    Amounts due to related parties          1,021              3,175    Deferred revenues                       15,530,968         17,355,808    Short-term bank loans                   -                  8,061,673    Other current liabilities               15,226,226         13,783,725    Total current liabilities               62,813,010         65,106,706  Non-current uncertain tax position        1,650,399          1,664,713  liabilities  Other non-current liabilities             3,596,295          2,745,806  Total Liabilities                         68,059,704         69,517,225  Equity                                    235,194,953        248,844,214 Total Liabilities and Equity               303,254,657        318,361,439    Noah Holdings Limited Condensed Consolidated Income Statements (In U.S. dollars, except for ADS data, per ADS data and percentages) (unaudited)                                     Three months ended                                     March 31,      March 31,    Change                                     2013            2014    Revenues:                        $               $     Third-party revenues          18,952,544      23,674,602    24.9%     Related party revenues        15,542,850      29,459,420    89.5%    Total revenues                   34,495,394      53,134,022    54.0%     Less: business taxes and      (1,891,384)     (2,875,503)   52.0%    related surcharges    Net revenues                     32,604,010      50,258,519    54.1%    Operating cost and expenses:     Cost of revenues              (6,008,317)     (11,134,222)  85.3%     Selling expenses              (7,918,718)     (10,749,303)  35.7%     General and administrative    (6,827,938)     (10,523,386)  54.1%    expenses     Other operating income        30,983          2,832,420     9041.9%    Total operating cost and         (20,723,990)    (29,574,491)  42.7%    expenses    Income from operations           11,880,020      20,684,028    74.1%    Other income:     Interest income               653,300         1,377,528     110.9%     Investment income             1,138,767       1,174,874     3.2%     Other income                  19,052          (544,239)     (2956.6%)    Total other income               1,811,119       2,008,163     10.9%    Income before taxes and loss    from equity in                   13,691,139      22,692,191    65.7%    affiliates    Income tax expense               (3,937,910)     (5,574,108)   41.5%    Income from equity in affiliates 14,206          374,732       2537.8%    Net income                       9,767,435       17,492,815    79.1%    Less: net income attributable to    non-controlling                  157,544         617,382       291.9%    interests    Net income attributable to Noah  9,609,891       16,875,433    75.6%    Shareholders    Income per ADS, basic            0.18            0.30          66.7%    Income per ADS, diluted          0.17            0.30          76.5%    Margin analysis:    Operating margin                 36.4%           41.2%    Net margin                       30.0%           34.8%    Weighted average ADS equivalent:    [1]    Basic                            54,828,514      55,469,460    Diluted                          55,650,945      56,373,757    ADS equivalent outstanding at    54,677,482      55,608,001    end 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                                             March 31,  March 31,   Change                                             2013        2014                                             $           $ Net income attributable to Noah             9,767,435   17,492,815   79.1% Shareholders Other comprehensive income, net of tax:  Foreign currency translation           389,515     (5,362,331)  (1476.7%) adjustments Comprehensive income                        10,156,950  12,130,484   19.4% Less: Comprehensive income attributable to  200,233     315,664      57.6% non-controlling interests Comprehensive income attributable to        9,956,717   11,814,820   18.7% Noah Shareholders    Noah Holdings Limited Supplemental Information (unaudited)                           As of                           March 31, 2013          March 31,         Change                                                   2014 Number of registered     42,590                  55,519            30.4% clients Number of relationship   452                     604               33.6% managers Number of branch offices 56                      56                0.0%                           Three months ended                           March 31, 2013          March 31,         Change                                                   2014                           (in millions of RMB, except number of active clients                           and percentages) Number of active clients 1,778                   3,258             83.2% Transaction value:  Fixed income      6,495                   11,123            71.3% products  Private equity    1,627                   2,548             56.6% fund products  Other products, including mutual fund products, private                   553                     1,300             135.1% securities investment funds and insurance products Total transaction value  8,675                   14,971            72.6% Average transaction      4.88                    4.60              (5.7%) value per 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                                         March 31,   March 31,                                         2013        2014        Change                                         $           $ Net income                              9,767,435   17,492,815  79.1% Adjustment for share-based compensation related to: Share options                           54,096      138,524     156.1% Restricted shares                       1,076,665   1,076,917   0.0% Adjusted net income (non-GAAP)*         10,898,196  18,708,256  71.7% Net margin                              30.0%       34.8% Adjusted net margin (non-GAAP)*         33.4%       37.2% Net income attributable to Noah         9,609,891   16,875,433  75.6% Shareholders Adjustment for share-based compensation related to:  Share options           54,096      138,524     156.1% Restricted shares       1,076,665   1,076,917   0.0% Adjusted net income attributable to Noah Shareholders                       10,740,652  18,090,874  68.4% (non-GAAP)* Net income attributable to Noah         0.17        0.30        76.5% Shareholders per ADS, diluted Adjusted net income attributable to Noah Shareholders per                   0.19        0.32        68.4% ADS, diluted (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