Noah Holdings Limited Announces Unaudited Financial Results for the First Quarter of 2018

May 29, 2018

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SHANGHAI, May 29, 2018 /PRNewswire/ — Noah Holdings Limited (“Noah” or the “Company”) (NYSE: NOAH), a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises, today announced its unaudited financial results for the first quarter of 2018.
FIRST QUARTER 2018 FINANCIAL HIGHLIGHTS

  • Net revenues for the first quarter of 2018 were RMB830.9 million (US$132.5 million), a 16.5% increase from the corresponding period in 2017.
(RMB millions,
except percentages)
Q1 2017 Q1 2018 YoY Change
Wealth management 562.0 594.2 5.7%
Asset management 126.4 194.3 53.8%
Other financial services 24.8 42.4 71.0%
Total net revenues 713.2 830.9 16.5%
  • Income from operations for the first quarter of 2018 was RMB274.5 million (US$43.8 million), a 6.9% increase from the corresponding period in 2017.
(RMB millions,
except percentages)
Q1 2017 Q1 2018 YoY Change
Wealth management 209.2 184.0 (12.1%)
Asset management 78.7 109.4 39.0%
Other financial services (31.1) (18.9) (39.3%)
Total income from operations 256.8 274.5 6.9%
  • Net income attributable to Noah shareholders for the first quarter of 2018 was RMB268.5 million (US$42.8 million), a 23.7% increase from the corresponding period in 2017.
  • Non-GAAP[1] net income attributable to Noah shareholders for the first quarter of 2018 was RMB256.4 million (US$40.9 million), an 8.1% increase from the corresponding period in 2017.

FIRST QUARTER 2018 OPERATIONAL UPDATES
Wealth Management Business
The Company’s wealth management business offers financial products and provides comprehensive financial services to high net worth individual clients and enterprises. Noah primarily distributes onshore and offshore fixed income, private equity, secondary market equity and insurance products.

  • Total number of registered clients as of March 31, 2018 was 196,927, a 32.6% increase from March 31, 2017.
  • Total number of active clients[2] during the first quarter of 2018 was 5,449, a 24.9% increase from March 31, 2017.
  • Aggregate value of financial products distributed during the first quarter of 2018 was RMB27.8 billion (US$4.4 billion), a 14.9% decrease from the first quarter of 2017.
Product type Three months ended March 31,
2017 2018
(RMB in billions, except percentages)
Fixed income 22.1 67.6% 13.2 47.6%
Private equity 9.1 27.8% 6.3 22.6%
Secondary market equity 1.1 3.4% 7.9 28.2%
Other products 0.4 1.2% 0.4 1.6%
All products 32.7 100.0% 27.8 100.0%
  • Average transaction value per active client[3]  for the first quarter of 2018 was RMB5.1 million (US$0.8 million), a 31.9% decrease from the corresponding period in 2017.
  • Coverage network included 263 branches and sub-branches covering 81 cities as of March 31, 2018, up from 199 branches and sub-branches covering 74 cities as of March 31, 2017.
  • Number of relationship managers was 1,386 as of March 31, 2018, a 10.8% increase from March 31, 2017.

Asset Management Business
The Company’s asset management business, Gopher Asset Management, is a leading alternative asset manager in China. Gopher Asset Management develops and manages private equity, real estate, secondary market equity, credit and other investments denominated in Renminbi and other currencies.

  • Total assets under management as of March 31, 2018 were RMB156.9 billion (US$25.0 billion), a 5.8% increase from December 31, 2017 and a 21.1% increase from March 31, 2017.
Investment type As of 
December 31, 
2017
Asset 
Growth
Asset 
Expiration/ 
Redemption
As of
March 31, 
2018
(RMB billions, except percentages)
Private equity 86.9 58.6% 5.0 0.0 91.8 58.5%
Credit 40.0 27.0% 8.2 5.4 42.8 27.3%
Real estate 11.6 7.8% 2.4 2.1 11.9 7.6%
Secondary market equity 6.2 4.2% 0.9 0.3 6.8 4.3%
Other investments 3.6 2.5% 0.1 3.6 2.3%
All Investments 148.3 100.0% 16.5 7.9 156.9 100.0%

Other Financial Services Business
The Company’s other financial services business includes its online wealth management, lending services and payment technology services.
Mr. Kenny Lam, Group President of Noah, said, “The first quarter of 2018 represents another solid start for the whole year. With the official release of the Asset Management Guidelines, the wealth management and asset management industries in China have entered a new stage which we believe will lead to healthier and more sustainable growth potential. We will continue to develop our investment and comprehensive service capabilities in order to better serve the evolving demands of high net worth Chinese clients in China and globally.”
FIRST QUARTER 2018 FINANCIAL RESULTS
Net Revenues
Net revenues for the first quarter of 2018 were RMB830.9 million (US$132.5 million), a 16.5% increase from the corresponding period in 2017, primarily driven by increased recurring service fee revenues and performance-based income.

  • Wealth Management Business

– Net revenues from one-time commissions for the first quarter of 2018 were RMB316.0 million (US$50.4 million), a 7.7% decrease from the corresponding period in 2017, primarily due to a decline in transaction value.
– Net revenues from recurring service fees for the first quarter of 2018 were RMB243.2 million (US$38.8 million), a 21.7% increase from the corresponding period in 2017. The increase was primarily due to the cumulative effect of financial products with recurring service fees previously distributed.
– Net revenues from performance-based income for the first quarter of 2018 were RMB20.0 million (US$3.2 million), compared with RMB11.8 million in the corresponding period of 2017. The increase was primarily due to an increase in performance-based income from secondary market equity products distributed in previous periods.
– Net revenues from other service fees for the first quarter of 2018 were RMB14.9 million (US$2.4 million), increased from RMB8.1 million in the corresponding period in 2017, primarily due to the growth of the various other comprehensive services Noah offers to its high net worth clients.

  • Asset Management Business

– Net revenues from recurring service fees for the first quarter of 2018 were RMB152.9 million (US$24.4 million), a 21.8% increase from the corresponding period in 2017. The increase was primarily due to the increase in assets under management.
– Net revenues from performance-based income for the first quarter of 2018 were RMB39.4 million (US$6.3 million), compared with RMB0.7 million in the corresponding period of 2017, primarily due to an increase in performance-based income from secondary market equity products.

  • Other Financial Services Business

– Net revenues for the first quarter of 2018 were RMB42.4 million (US$6.8 million), a 71.0% increase from the corresponding period in 2017. The increase was primarily due to the growth of our lending services.
Operating Costs and Expenses
Operating costs and expenses for the first quarter of 2018 were RMB556.4 million (US$88.7 million), a 21.9% increase from the corresponding period in 2017. Operating costs and expenses primarily consisted of compensation and benefits of RMB360.7 million (US$57.5 million), selling expenses of RMB106.3 million (US$16.9 million), general and administrative expenses of RMB55.9 million (US$8.9 million) and other operating expenses of RMB38.0 million (US$6.1 million).

  • Operating costs and expenses for the wealth management business for the first quarter of 2018 were RMB410.2 million (US$65.4 million), a 16.3% increase from the corresponding period in 2017, primarily due to an increase in marketing expenses and a decrease in government subsidies.
  • Operating costs and expenses for the asset management business for the first quarter of 2018 were RMB84.9 million (US$13.5 million), a 78.1% increase from the corresponding period in 2017, primarily due to an increase in investment sub-advisory fees and a decrease in government subsidies.
  • Operating costs and expenses for the other financial services business for the first quarter of 2018 were RMB61.3 million (US$9.8 million), a 9.6% increase from the corresponding period in 2017.

Operating Margin
Operating margin for the first quarter of 2018 was 33.0%, a decrease from 36.0% for the corresponding period in 2017. The decrease was mainly due to an increase in marketing expenses and a decrease in government subsidies.

  • Operating margin for the wealth management business for the first quarter of 2018 was 31.0%, compared with 37.2% for the corresponding period in 2017.
  • Operating margin for the asset management business for the first quarter of 2018 was 56.3%, compared with 62.3% for the corresponding period in 2017.
  • Operating loss for the other financial services business for the first quarter of 2018 was RMB18.9 million (US$3.0 million), down from RMB31.1 million for the corresponding period in 2017. 

Investment Income
Investment income for the first quarter of 2018 was RMB42.1 million (US$6.7 million), compared with RMB10.1 million for the corresponding period in 2017. The increase includes RMB34.8 million (US$5.5 million) of changes in fair value of equity securities in accordance with FASB ASU 2016-01, which became effective on January 1, 2018. See “Discussion of Recently Adopted Accounting Standard and Non-GAAP Financial Measures” below for more details.
Income Tax Expenses
Income tax expenses for the first quarter of 2018 were RMB73.7 million (US$11.7 million), a 19.0% increase from the corresponding period in 2017. The increase was primarily due to higher taxable income. 
Net Income

  • Net Income

– Net income for the first quarter of 2018 was RMB260.8 million (US$41.6 million), a 20.9% increase from the corresponding period in 2017.
Net margin for the first quarter of 2018 was 31.4%, up from 30.2% for the corresponding period in 2017.
– Net income attributable to Noah shareholders for the first quarter of 2018 was RMB268.5 million (US$42.8 million), a 23.7% increase from the corresponding period in 2017.
Net income attributable to Noah shareholders per basic and diluted ADS for the first quarter of 2018 was RMB4.70 (US$0.75) and RMB4.44 (US$0.71), respectively, up from RMB3.85 and RMB3.69 respectively, for the corresponding period in 2017.

  • Non-GAAP Net Income Attributable to Noah Shareholders

– Non-GAAP net income attributable to Noah shareholders for the first quarter of 2018 was RMB256.4 million (US$40.9 million), an 8.1% increase from the corresponding period in 2017.
Non-GAAP net margin attributable to Noah shareholders for the first quarter of 2018 was 30.9%, down from 33.3% for the corresponding period in 2017.
Non-GAAP net income attributable to Noah shareholders per diluted ADS for the first quarter of 2018 was RMB4.24 (US$0.68), up from RMB4.03 for the corresponding period in 2017.
Balance Sheet and Cash Flow
As of March 31, 2018, the Company had RMB2,151.4 million (US$343.0 million) in cash and cash equivalents, compared with RMB1,906.8 million as of December 31, 2017 and RMB2,609.2 million as of March 31, 2017.
Net cash inflow from the Company’s operating activities during the first quarter of 2018 was RMB344.6 million (US$54.9 million), driven by profit earned from normal business operations.
Net cash outflow from the Company’s investing activities during the first quarter of 2018 was RMB129.2 million (US$20.6 million), primarily due to the increase in investment in affiliates.
Net cash inflow from the Company’s financing activities was RMB64.5 million (US$10.3 million) in the first quarter of 2018, primarily due to the capital increase of a consolidated non-controlling subsidiary.
On July 8, 2017, the Company’s board of directors authorized a share repurchase program of up to US$50 million worth of its issued and outstanding ADSs over the course of one year. As of March 31, 2018, the Company did not repurchase any ADSs under this program.
2018 FORECAST
The Company estimates that non-GAAP net income attributable to Noah shareholders for the full year 2018 will be in the range of RMB1 billion to RMB1.05 billion, an increase of 16.7% to 22.6% compared with the full year 2017. This estimate reflects management’s current business outlook and is subject to change.
CONFERENCE CALL
Senior management will host a combined English and Chinese language conference call to discuss the Company’s first quarter 2018 unaudited financial results and recent business activities.
The conference call may be accessed with the following details:

Conference call details
Date/Time: Tuesday, May 29, 2018 at 8:00 p.m., U.S. Eastern Time
Wednesday, May 30, 2018 at 8:00 a.m., Hong Kong Time
Dial in details:
– United States Toll Free +1-866-311-7654
– Mainland China Toll Free 4001-201203
– Hong Kong Toll Free 800-905-945
– International +1-412-317-5227
Conference Title: Noah Holdings Limited First Quarter 2018 Earnings Call
Participant Password: Noah Holdings

A telephone replay will be available starting one hour after the end of the conference call until June 5, 2018 at +1-877-344-7529 (US Toll Free) or +1-412-317-0088 (International Toll). The replay access code is 10120296.
A live and archived webcast of the conference call will be available at Noah’s investor relations website under the News & Events section at http://ir.noahwm.com.
DISCUSSION OF RECENTLY ADOPTED ACCOUNTING STANDARD AND NON-GAAP MEASURES         
On January 1, 2018, the Company adopted ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which requires that equity investments, except for those accounted for under the equity method or those that result in consolidation of the investee, be measured at fair value, with subsequent changes in fair value recognized in net income.
The accounting standard also includes a transition requirement on presentation that requires the amounts reported in accumulated other comprehensive income for equity securities that exist as of the date of adoption previously classified as available-for-sale to be reclassified to retained earnings.
As a result, upon adoption of this new standard, Noah recorded a cumulative effect adjustment from other comprehensive income to retained earnings of RMB251.6 million (US$38.7 million), net of tax, for the unrealized gains related to equity securities previously classified as available-for-sale securities. This adjustment had no overall impact on shareholders’ equity; however, since these net unrealized gains are now included within retained earnings, they will not appear as realized gains on Noah’s consolidated income statement when sold.
The future impact to Noah’s consolidated income statement from period to period will vary depending upon the level of volatility in the performance of the securities held in Noah’s equity portfolio and the overall market. ASU 2016-01 does not affect the treatment of equity investments accounted for under the equity method or those that result in consolidation of the investee.
In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity investments (unrealized) and adjusting for sale of equity securities, if any. See “Reconciliation of GAAP to Non-GAAP Results” at the end of this press release.
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 measures 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 the foregoing non-GAAP net income attributable to Noah shareholders and per diluted ADS and non-GAAP net margin attributable to Noah shareholders to supplement U.S. GAAP financial data. As such, the Company’s management believes that the presentation of the non-GAAP financial measures provides important supplemental information to investors regarding financial and business trends relating to its results of operations in a manner consistent with that used by management.  
ABOUT NOAH HOLDINGS LIMITED
Noah Holdings Limited (NYSE: NOAH) is a leading wealth and asset management service provider in China with a focus on global investment and asset allocation services for high net worth individuals and enterprises. In the first quarter of 2018, Noah distributed RMB27.8 billion (US$4.4 billion) of financial products. Through Gopher Asset Management, Noah had assets under management of RMB156.9 billion (US$25.0 billion) as of March 31, 2018.
Noah’s wealth management business primarily distributes onshore and offshore fixed income, private equity, secondary market equity and insurance products. Noah delivers customized financial solutions to clients through a network of 1,386 relationship managers across 263 branches and sub-branches in 81 cities in mainland China, and serves the international investment needs of its clients through offices in Hong Kong, Taiwan, United States, Canada and Australia. The Company’s wealth management business had 196,927 registered clients as of March 31, 2018. As a leading alternative asset manager in China, Gopher Asset Management manages private equity, real estate, secondary market equity, credit and other investments denominated in Renminbi and other currencies. The Company also provides other financial services, including online wealth management, lending services and payment technology services.
For more information, please visit Noah at ir.noahwm.com.
FOREIGN CURRENCY TRANSLATION
In this announcement, the unaudited financial results for the first quarter of 2018 ended March 31, 2018 are stated in RMB. This announcement contains currency conversions of certain RMB amounts into US$ at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB6.2726 to US$1.00, the effective noon buying rate for March 30, 2018 as set forth in the H.10 statistical release of the Federal Reserve Board.
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 2018 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 fourth 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 Noah’s 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 qualified 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 to infringe on the intellectual property rights of others. Further information regarding these and other risks is included in Noah’s filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 20-F. All information provided in this press release and in the attachments is as of the date of this press release, and Noah does not undertake any obligation to update any such information, including forward-looking statements, as a result of new information, future events or otherwise, except as required under the applicable law.


[1] Noah’s Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity securities (unrealized) and adjusting for sale of equity securities, if any. See “Reconciliation of GAAP to Non-GAAP Results” at the end of this press release.
[2]  “Active clients” for a given period refers to registered clients who obtain financial products provided or distributed by Noah during that given period, excluding clients in Noah’s other financial services segment.
[3] “Average transaction value per active client” refers to the average value of financial products that were purchased by active clients during the period specified.
Contacts:
Noah Holdings Limited
Eva Ma
Tel: +86-21-8035-9221
ir@noahwm.com  
____________________________________
FINANCIAL AND OPERATIONAL TABLES FOLLOW —

Noah Holdings Limited 
Condensed Consolidated Balance Sheets
(unaudited)
As of
December 31, March 31,  March 31, 
2017 2018 2018
RMB’000 RMB’000 USD’000
Assets
Current assets:
Cash and cash equivalents 1,906,753 2,151,447 342,991
Short-term investments (including short-term investments measured at fair value of RMB95,345 thousands and RMB86,740 thousands, as of December 31, 2017 and March 31, 2018, respectively) 160,345 246,740 39,336
Accounts receivable, net of allowance for doubtful accounts of nil as of December 31, 2017 and March 31, 2018 175,518 228,770 36,471
Loans receivable 765,398 827,737 131,961
Amounts due from related parties 515,454 653,788 104,229
Loans receivable from factoring business 256,944 71,403 11,383
Other current assets  255,680 247,256 39,418
Total current assets  4,036,092 4,427,141 705,789
Long-term investments (including long-term investments measured at fair value of RMB482,006 thousands and RMB835,235 thousands, as of December 31, 2017 and March 31, 2018, respectively) 988,266 890,735 142,004
Investment in affiliates 968,622 1,049,353 167,292
Property and equipment, net 303,349 299,415 47,734
Non-current deferred tax assets 72,654 72,357 11,535
Other non-current assets  125,871 114,226 18,210
Total Assets 6,494,854 6,853,227 1,092,564
Liabilities and Equity
Current liabilities:
Accrued payroll and welfare expenses  622,494 563,715 89,869
Income tax payable 18,360 82,394 13,136
Amounts due to related parties 276 280 45
Deferred revenues 201,254 167,768 26,746
Loans payable from factoring business 3,857 302 48
Other current liabilities 489,113 581,379 92,685
Convertible notes 487,973
Total current liabilities 1,823,327 1,395,838 222,529
Non-current deferred tax liabilities 50,121 51,810 8,260
Convertible notes 470,445 75,000
Other non-current liabilities 113,660 112,839 17,989
Total Liabilities  1,987,108 2,030,932 323,778
Equity 4,507,746 4,822,295 768,786
Total Liabilities and Equity 6,494,854 6,853,227 1,092,564
Noah Holdings Limited
Condensed Consolidated Income Statements
(In RMB’000, except for USD data, per ADS data and percentages)
(unaudited)
Three months ended 
March 31, March 31, March 31, Change
2017 2018 2018
Revenues: RMB’000 RMB’000 USD’000
Revenues from others[1]:
One-time commissions 199,787 219,541 35,000 9.9%
Recurring service fees 145,029 143,932 22,946 (0.8%)
Performance-based income 12,550 20,657 3,293 64.6%
Other service fees 33,241 59,989 9,564 80.5%
Total revenues from others 390,607 444,119 70,803 13.7%
Revenues from funds Gopher managed[1]:
One-time commissions 144,556 98,384 15,685 (31.9%)
Recurring service fees 181,890 254,067 40,504 39.7%
Performance-based income 79 39,048 6,225 49162.6%
Other service fees N.A.
Total revenues from funds Gopher managed 326,525 391,499 62,414 19.9%
Total revenues 717,132 835,618 133,217 16.5%
Less: business taxes and related surcharges  (3,962) (4,699) (749) 18.6%
Net revenues 713,170 830,919 132,468 16.5%
Operating costs and expenses:
Compensation and benefits
Relationship manager compensation (150,313) (158,701) (25,301) 5.6%
Performance fee compensation (6,200) (988) N.A.
Other compensations (190,269) (195,812) (31,217) 2.9%
Total compensation and benefits (340,582) (360,713) (57,506) 5.9%
Selling expenses (60,603) (106,259) (16,940) 75.3%
General and administrative expenses  (59,638) (55,929) (8,916) (6.2%)
Other operating expenses  (29,446) (37,963) (6,052) 28.9%
Government subsidies  33,932 4,488 715 (86.8%)
Total operating costs and expenses  (456,337) (556,376) (88,699) 21.9%
Income from operations  256,833 274,543 43,769 6.9%
Other income:
Interest income  8,708 22,867 3,646 162.6%
Interest expenses (4,913) (6,869) (1,095) 39.8%
Investment income  10,146 42,132 6,717 315.3%
Other (expense) income  1,137 1,163 185 2.3%
Total other income 15,078 59,293 9,453 293.2%
Income before taxes and income from equity in affiliates 271,911 333,836 53,222 22.8%
Income tax expense (61,915) (73,662) (11,743) 19.0%
Income from equity in affiliates 5,726 652 104 (88.6%)
Net income 215,722 260,826 41,583 20.9%
Less: net loss attributable to non-controlling interests (5,200) (7,639) (1,218) 46.9%
Less: Loss attributable to redeemable non-controlling interest of a subsidiary 3,925 (100.0%)
Net income attributable to Noah shareholders  216,997 268,465 42,801 23.7%
Income per ADS, basic 3.85 4.70 0.75 22.1%
Income per ADS, diluted 3.69 4.44 0.71 20.3%
Margin analysis:
Operating margin 36.0% 33.0% 33.0%
Net margin 30.2% 31.4% 31.4%
Weighted average ADS equivalent[2]:
Basic 56,364,758 57,166,048 57,166,048
Diluted 60,108,286 61,384,898 61,384,898
ADS equivalent outstanding at end of period 56,415,307 57,225,760 57,225,760
[1] Starting from the first quarter of 2018, we reported revenue streams in two categories—revenues from funds Gopher managed and revenues from others, instead of the previous categories—third-party revenues and related party revenues, to provide more relevant and accurate information about revenues we generate because a majority of the related party revenues are generated from funds Gopher managed. We also revised the comparative period presentation to conform to current period classification.
 [2] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs.
Noah Holdings Limited 
Condensed Comprehensive Income Statements 
(unaudited)
Three months ended 
March 31, March 31, March 31, Change
2017 2018 2018
RMB’000 RMB’000 USD’000
Net income 215,722 260,826 41,583 20.9%
Other comprehensive income, net of tax:
Foreign currency translation adjustments (4,145) (34,863) (5,558) 741.1%
Fair value fluctuation of available for sale Investment (after tax) 1,515 1,376 219 (9.2%)
Comprehensive income 213,092 227,339 36,244 6.7%
Less: Comprehensive loss attributable to non-controlling interests (5,316) (7,579) (1,208) 42.6%
Less: Loss attributable to redeemable non-controlling interest of a subsidiary 3,925 (100.0%)
Comprehensive income attributable to Noah shareholders 214,483 234,918 37,452 9.5%
Noah Holdings Limited
Supplemental Information 
(unaudited) 
As of 
March 31,  March 31,  Change
2017 2018
Number of registered clients  148,505 196,927 32.6%
Number of relationship managers  1,251 1,386 10.8%
Number of cities under coverage  74 81 9.5%
Three months ended 
March 31, March 31,  Change
2017 2018
(in millions of RMB, except number of active clients and percentages)
Number of active clients  4,362 5,449 24.9%
Transaction value: 
Fixed income products  22,102 13,247 (40.1%)
Private equity products  9,070 6,279 (30.8%)
Secondary market equity products 1,126 7,854 597.2%
Other products 377 433 14.9%
Total transaction value 32,675 27,813 (14.9%)
Average transaction value per active client  7.49 5.10 (31.9%)

Noah Holdings Limited 
Segment Condensed Income Statements 
(unaudited) 
Three months ended March 31, 2018
Other
Wealth  Asset  Financial 
Management Management Services 
Business Business Business Total
RMB’000 RMB’000 RMB’000 RMB’000
Revenues:
Revenues from others
One-time commissions 219,283 258 219,541
Recurring service fees 141,329 2,603 143,932
Performance-based income 20,126 531 20,657
Other service fees 14,993 1,791 43,205 59,989
Total revenues from others 395,731 5,183 43,205 444,119
Revenues from funds Gopher managed
One-time commissions 98,318 66 98,384
Recurring service fees 103,069 150,998 254,067
Performance-based income 39,048 39,048
Other service fees
Total revenues from funds Gopher managed 201,387 190,112 391,499
Total revenues 597,118 195,295 43,205 835,618
Less: business taxes and related surcharges  (2,936) (944) (819) (4,699)
Net revenues 594,182 194,351 42,386 830,919
Operating costs and expenses:
    Compensation and benefits
      Relationship manager compensation (157,926) (775) (158,701)
      Performance fee compensation (6,200) (6,200)
      Other compensations (118,761) (45,143) (31,908) (195,812)
    Total compensation and benefits (276,687) (51,343) (32,683) (360,713)
    Selling expenses (91,314) (5,814) (9,131) (106,259)
    General and administrative expenses  (36,716) (13,754) (5,459) (55,929)
    Other operating expenses (8,295) (14,605) (15,063) (37,963)
    Government subsidies  2,808 640 1,040 4,488
Total operating costs and expenses  (410,204) (84,876) (61,296) (556,376)
Income (loss) from operations 183,978 109,475 (18,910) 274,543
Noah Holdings Limited
Segment Condensed Income Statements 
(unaudited) 
Three months ended March 31, 2017
Other
Wealth Asset Financial
Management Management Services
Business Business Business Total
RMB’000 RMB’000 RMB’000 RMB’000
Revenues:
Revenues from others
One-time commissions 199,654 133 199,787
Recurring service fees 137,635 7,394 145,029
Performance-based income 11,887 663 12,550
Other service fees 8,161 25,080 33,241
Total revenues from others 357,337 8,190 25,080 390,607
Revenues from funds Gopher managed
One-time commissions 144,541 15 144,556
Recurring service fees 63,305 118,585 181,890
Performance-based income 79 79
Other service fees
Total revenues from funds Gopher managed  207,846 118,679 326,525
Total revenues 565,183 126,869 25,080 717,132
Less: business taxes and related surcharges  (3,194) (471) (297) (3,962)
Net revenues 561,989 126,398 24,783 713,170
Operating costs and expenses:
    Compensation and benefits (148,960) (3) (1,350) (150,313)
      Relationship manager compensation
      Other compensations (116,902) (39,762) (33,605) (190,269)
    Total compensation and benefits (265,862) (39,765) (34,955) (340,582)
    Selling expenses (54,572) (2,072) (3,959) (60,603)
    General and administrative expenses  (35,300) (15,267) (9,071) (59,638)
    Other operating expenses (12,447) (9,064) (7,935) (29,446)
    Government subsidies 15,412 18,520 33,932
Total operating costs and expenses  (352,769) (47,648) (55,920) (456,337)
Income (loss) from operations  209,220 78,750 (31,137) 256,833
Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results 
(In RMB, except for per ADS data and percentages) 
(unaudited) [4]
Three months ended 
March 31,  March 31,  Change 
2017 2018
RMB’000 RMB’000
Net income attributable to Noah shareholders 216,997 268,465 23.7%
Adjustment for share-based compensation related to:
Share options 12,531 12,210 (2.6%)
Restricted shares 7,711 10,491 36.1%
Adjustments for fair value changes of equity securities (unrealized) (34,788) N.A
Adjusted net income attributable to Noah shareholders (non-GAAP)* 237,239 256,378 8.1%
Net margin  30.2% 31.4%
Adjusted net margin (non-GAAP)* 33.1% 29.9%
Net income attributable to Noah shareholders per ADS, diluted 3.69 4.44 20.3%
Adjusted net income attributable to Noah shareholders per ADS, diluted (non-GAAP)* 4.03 4.24 5.2%
* The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments.

[4] Noah’s Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation and fair value changes of equity securities (unrealized) and adjusting for sale of equity securities, if any.
View original content:http://www.prnewswire.com/news-releases/noah-holdings-limited-announces-unaudited-financial-results-for-the-first-quarter-of-2018-300655829.html
SOURCE Noah Holdings Limited

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