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
- Net revenues in the first quarter of 2014
were US$50.3 million, a 54.1%
increase from the corresponding period in 2013.
- Income from operations in the first quarter of 2014 was
US$20.7 million, a 74.1% increase
from the corresponding period in 2013.
- Operating margin in the first quarter of 2014 was 41.2%,
compared to 36.4% in the corresponding period in 2013.
- Net 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.
- Net 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
- Total 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.
- Active 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.
- Coverage 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:
|
Toll Free
|
United States
|
+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 30,
2013 and December 31, 2013
|
|
8,472,013
|
|
13,682,745
|
|
|
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 liabilities
|
|
1,650,399
|
|
1,664,713
|
|
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 related surcharges
|
(1,891,384)
|
|
(2,875,503)
|
|
52.0%
|
|
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 expenses
|
(6,827,938)
|
|
(10,523,386)
|
|
54.1%
|
|
Other
operating income
|
30,983
|
|
2,832,420
|
|
9041.9%
|
|
Total operating cost
and expenses
|
(20,723,990)
|
|
(29,574,491)
|
|
42.7%
|
|
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
affiliates
|
13,691,139
|
|
22,692,191
|
|
65.7%
|
|
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
interests
|
157,544
|
|
617,382
|
|
291.9%
|
|
Net income
attributable to Noah Shareholders
|
9,609,891
|
|
16,875,433
|
|
75.6%
|
|
|
|
|
|
|
|
|
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 end of period
|
54,677,482
|
|
55,608,001
|
|
|
|
|
|
|
|
|
|
[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 Shareholders
|
9,767,435
|
|
17,492,815
|
|
79.1%
|
Other comprehensive
income, net of tax:
|
|
|
|
|
|
Foreign currency translation
adjustments
|
389,515
|
|
(5,362,331)
|
|
(1476.7%)
|
Comprehensive
income
|
10,156,950
|
|
12,130,484
|
|
19.4%
|
Less: Comprehensive
income attributable to
non-controlling interests
|
200,233
|
|
315,664
|
|
57.6%
|
Comprehensive
income attributable to
Noah Shareholders
|
9,956,717
|
|
11,814,820
|
|
18.7%
|
Noah Holdings
Limited
|
Supplemental
Information
|
(unaudited)
|
|
As
of
|
|
Change
|
|
March 31,
2013
|
|
March 31,
2014
|
|
|
|
|
|
|
|
Number of
registered clients
|
42,590
|
|
55,519
|
|
30.4%
|
Number of
relationship managers
|
452
|
|
604
|
|
33.6%
|
Number of
branch offices
|
56
|
|
56
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Change
|
|
March 31,
2013
|
|
March 31,
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 products
|
6,495
|
|
11,123
|
|
71.3%
|
Private
equity fund products
|
1,627
|
|
2,548
|
|
56.6%
|
Other
products, including
mutual fund products, private
securities investment funds and
insurance products
|
553
|
|
1,300
|
|
135.1%
|
Total
transaction value
|
8,675
|
|
14,971
|
|
72.6%
|
Average
transaction value per client
|
4.88
|
|
4.60
|
|
(5.7%)
|
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 Shareholders
|
9,609,891
|
|
16,875,433
|
|
75.6%
|
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
(non-GAAP)*
|
10,740,652
|
|
18,090,874
|
|
68.4%
|
|
|
|
|
|
|
Net income
attributable to Noah Shareholders per ADS, diluted
|
0.17
|
|
0.30
|
|
76.5%
|
Adjusted net income
attributable to Noah Shareholders per
ADS, diluted (non-GAAP)*
|
0.19
|
|
0.32
|
|
68.4%
|
|
|
|
|
|
|
*The non-GAAP adjustments do not take into consideration the impact
of taxes on such adjustments.
|
SOURCE Noah Holdings Limited