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
 
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