SHANGHAI, Aug. 29, 2024 /PRNewswire/ -- Noah Holdings Limited ("Noah" or the "Company") (NYSE: NOAH and HKEX: 6686), a leading and pioneer wealth management service provider offering comprehensive one-stop advisory services on global investment and asset allocation primarily for Mandarin-speaking high-net-worth investors, today announced its unaudited financial results for the second quarter of 2024.
SECOND QUARTER 2024 FINANCIAL HIGHLIGHTS
- Net revenues for the second quarter of 2024 were RMB615.8 million (US$84.7 million), a 34.6% decrease from the corresponding period in 2023, and a 5.2% decrease from the first quarter of 2024，primarily due to a decrease in distribution of insurance products.
Net revenues from overseas for the second quarter of 2024 were RMB278.6 million (US$38.3 million), a 29.2% decrease from the corresponding period of 2023, mainly due to a decrease in one-time commissions from insurance products.
Net Revenues by segment is as follows:
| (RMB millions, except percentages) | Q2 2023 |
| Q2 2024 | YoY Change | |||
| Wealth management | 745.3 | 415.6 | (44.2 %) | ||||
| Asset management | 183.4 | 192.3 | 4.9 % | ||||
| Other businesses | 13.1 | 7.9 | (39.7 %) | ||||
| Total net revenues | 941.8 | 615.8 | (34.6 %) |
| (RMB millions, except percentages) | Q2 2023 | Q2 2024 | YoY Change | ||||
| Mainland China | 548.3 | 337.2 | (38.5 %) | ||||
| Overseas | 393.5 | 278.6 | (29.2 %) | ||||
| Total net revenues | 941.8 | 615.8 | (34.6 %) |
- Income from operations for the second quarter of 2024 was RMB134.0 million (US$18.4 million), a 61.6% decrease from the corresponding period in 2023, mainly due to the 34.6% decrease in net revenues. Income from operations increased 10.3% sequentially, mainly due to the effective cost control measures implemented in the second quarter of 2024.
| (RMB millions, except percentages) | Q2 2023 | Q2 2024 | YoY Change | ||||
| Wealth management | 300.2 | 65.5 | (78.2 %) | ||||
| Asset management | 80.9 | 86.5 | 6.9 % | ||||
| Other businesses | (31.7) | (18.0) | (43.2 %) | ||||
| Total income from operations | 349.4 | 134.0 | (61.6 %) |
- Net income attributable to Noah shareholders for the second quarter of 2024 was RMB99.8 million (US$13.7 million), a 68.4% decrease from the corresponding period in 2023, mainly due to the 61.6% decrease in income from operations and a loss from equity in affiliates recorded in the second quarter of 2024.
- Non-GAAP[1] net income attributable to Noah shareholders for the second quarter of 2024 was RMB106.1 million (US$14.6 million), a 66.1% decrease from the corresponding period in 2023.
Wealth Management Business
Noah offers global investment products and provides value-added services to global Mandarin-speaking high-net-worth investors in its wealth management business. Noah primarily distributes private equity, private secondary, mutual funds and other products denominated in RMB, USD and other currencies.
- Total number of registered clients as of June 30, 2024, was 459,072, a 2.8% increase from June 30, 2023, and a 0.3% increase from March 31, 2024. Among registered clients as of June 30, 2024, the number of overseas registered clients was 16,786, a 6.7% increase from March 31, 2024, and a 23.0% increase from June 30, 2023.
- Total number of active clients[2] for the second quarter of 2024 was 8,634, a decrease of 25.2% from the second quarter of 2023 and 16.9% from the first quarter of 2024. Among active clients during the second quarter of 2024, the number of overseas active clients was 3,244, a 62.8% increase from the second quarter of 2023, and an 18.2% increase from the first quarter of 2024.
- Aggregate value of investment products distributed during the second quarter of 2024 was RMB14.4 billion (US$2.0 billion), a 21.7% decrease from the second quarter of 2023, mainly due to a 29.3% decrease in distribution of mutual fund products. The aggregate value of investment products distributed decreased by 23.7% from the first quarter of 2024, mainly due to the decrease in distribution of mutual fund products. Among the investment products distributed during the second quarter of 2024, Noah distributed RMB7.9 billion (US$1.1 billion) of overseas investment products, a 40.8% increase from the second quarter of 2023, primarily due to an 80.9% increase in distribution of overseas mutual fund products.
| Product type | Three months ended June 30, | |||
| 2023 | 2024 | |||
| (RMB in billions, except percentages) | ||||
| Mutual fund products | 12.0 | 65.4 % | 8.5 | 59.0 % |
| Private secondary products | 4.3 | 23.3 % | 4.1 | 28.7 % |
| Private equity products | 0.6 | 3.3 % | 1.1 | 7.7 % |
| Other products[3] | 1.5 | 8.0 % | 0.7 | 4.6 % |
| All products | 18.4 | 100.0 % | 14.4 | 100.0 % |
| Type of products in Mainland China | Three months ended June 30, | ||||||
| 2023 | 2024 | ||||||
| (RMB in billions, except percentages) | |||||||
| Mutual fund products | 10.1 | 79.1 % | 5.0 | 77.1 % | |||
| Private secondary products | 1.9 | 15.2 % | 1.2 | 18.9 % | |||
| Private equity products | 0.1 | 1.1 % | - | 0.0 % | |||
| Other products | 0.6 | 4.6 % | 0.3 | 4.0 % | |||
| All products in Mainland China | 12.8 | 100.0 % | 6.5 | 100.00 % | |||
| Type of overseas products | Three months ended June 30, | ||||||
| 2023 | 2024 | ||||||
| (RMB in billions, except percentages) | |||||||
| Mutual fund products | 1.9 | 34.4 % | 3.5 | 44.2 % | |||
| Private secondary products | 2.4 | 41.7 % | 2.9 | 36.7 % | |||
| Private equity products | 0.8 | 13.5 % | 1.1 | 13.9 % | |||
| Other products | 0.6 | 10.4 % | 0.4 | 5.2 % | |||
| All Overseas products | 5.6 | 100.00 % | 7.9 | 100.00 % | |||
- Coverage network in mainland China included 15 cities as of June 30, 2024, compared with 63 cities as of June 30, 2023, and 18 cities as of March 31, 2024, as the Company continued to streamline its coverage across mainland China.
- Aggregate number of overseas relationship managers was 113 as of June 30, 2024, a 24.2% increase from March 31, 2024. Since the Company's relationship managers in mainland China are divided into different teams, each focusing on an independent business unit dedicated to offering clients mutual fund and private secondary products, insurance products, or private equity products, the Company no longer considers it meaningful to disclose an aggregate number of relationship managers in mainland China.
Noah's asset management business is conducted through Gopher Asset Management Co., Ltd. ("Gopher Asset Management"), a leading multi-asset manager in China with global investment capabilities and overseas offices in Hong Kong and the United States. Gopher Asset Management develops and manages assets ranging from private equity, real estate, public securities to multi-strategy investments denominated in RMB, USD and other currencies.
- Total assets under management as of June 30, 2024, remained relatively stable at RMB154.0 billion (US$21.2 billion), compared with RMB156.9 billion as of June 30, 2023, and RMB153.3 billion as of March 31, 2024.
Overseas assets under management as of June 30, 2024, were RMB39.1 billion (US$5.4 billion), compared with RM34.2 billion as of June 30, 2023, and RMB37.2 billion as of March 31, 2024.
Total assets under management, categorized by investment type, are as follows:
| Investment type | As of March 31, 2024 | Growth | Allocation/ Redemption | As of June 30, 2024 | |||||||
| (RMB billions, except percentages) | |||||||||||
| Private equity | 131.8 | 85.9 % | 0.7 | (0.5) [4] | 133.0 | 86.4 % | |||||
| Public securities[5] | 10.9 | 7.1 % | 2.5 | 3.0 | 10.4 | 6.7 % | |||||
| Real estate | 5.7 | 3.7 % | 0.2 | 0.1 | 5.8 | 3.8 % | |||||
| Multi-strategies | 4.3 | 2.9 % | - | 0.1 | 4.2 | 2.7 % | |||||
| Others | 0.6 | 0.4 % | - | - | 0.6 | 0.4 % | |||||
| All Investments | 153.3 | 100.0 % | 3.4 | 2.7 | 154.0 | 100.0 % | |||||
| Mainland China Investment type | As of March 31, 2024 | Growth | Allocation/ Redemption | As of June 30, 2024 | |||||||
| (RMB billions, except percentages) | |||||||||||
| Private equity | 103.5 | 89.2 % | - | 0.1 | 103.4 | 90.1 % | |||||
| Public securities | 6.9 | 6.0 % | - | 0.9 | 6.0 | 5.2 % | |||||
| Real estate | 2.5 | 2.2 % | - | 0.1 | 2.4 | 2.1 % | |||||
| Multi-strategies | 2.6 | 2.2 % | - | 0.1 | 2.5 | 2.1 % | |||||
| Others | 0.6 | 0.4 % | - | - | 0.6 | 0.5 % | |||||
| All Investments | 116.1 | 100.0 % | - | 1.2 | 114.9 | 100.0 % | |||||
| Overseas Investment type | As of March 31, 2024 | Growth | Allocation/ Redemption | As of June 30, 2024 | |||||||
| (RMB billions, except percentages) | |||||||||||
| Private equity | 28.3 | 75.7 % | 0.7 | (0.6) | 29.6 | 75.5 % | |||||
| Public securities | 4.0 | 10.8 % | 2.5 | 2.1 | 4.4 | 11.2 % | |||||
| Real estate | 3.2 | 8.6 % | 0.2 | - | 3.4 | 8.7 % | |||||
| Multi-strategies | 1.7 | 4.9 % | - | - | 1.7 | 4.6 % | |||||
| All Investments | 37.2 | 100.0 % | 3.4 | 1.5 | 39.1 | 100.0 % | |||||
| [1] Noah's Non-GAAP financial measures are its corresponding GAAP financial measures excluding the effects of all forms of share-based compensation, non-cash settlement expenses and net of relevant tax impact, 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 purchase investment products distributed or receive services provided by the Company during that given period. |
| [3] "Other products" refers to other investment products, which includes insurance products, multi-strategies products and others. |
| [4] The asset allocation/redemption of overseas investment products includes the fluctuation result of foreign currencies exchange rate. |
| [5] The asset allocation/redemption of public securities also includes market appreciation or depreciation. |
Noah's other businesses mainly include providing clients with additional comprehensive services and investment products. Operating results for other businesses also include headquarter rental income, depreciation and amortization, as well as operating expenses.
Ms. Jingbo Wang, co-founder and chairwoman of Noah, commented, "The pace of our overseas expansion is gaining momentum as client demand for global asset allocation strengthens, with overseas revenue contribution increasing to 46.3% in the first half of 2024. While sluggish domestic markets continued to impact our business during the quarter, our investments in expanding our global product portfolio and distribution networks are starting to yield results, with overseas assets under management increasing 14.3% year-over-year. We have also raised US$338 million for overseas private equity, private credit, and other primary market funds year-to-date, a significant 40.2% year-over-year increase. Additionally, our team of overseas relationship managers directly supporting this expansion grew 101.8% year-over-year and 24.2% sequentially. While we are still in the relatively early stages of our overseas expansion, these results reflect the direction we are headed in going forward."
"Domestically, we are focused on stabilizing operations by streamlining our branch network to reduce overhead costs and adjusting our client service model to comply with evolving regulatory requirements by separating relationship and business development managers into different independent business units. While these initiatives may temporarily impact business activity over the next few quarters, they will ensure our ability to effectively and compliantly serve clients with a comprehensive portfolio of products in the long term."
"In the interim, we are rewarding shareholders with enhanced capital returns for their long-term support with a US$50 million share repurchase program. This share repurchase program, along with the full year 2023 final and special dividend payout we just completed earlier this month, reflects our unwavering commitment to prioritizing shareholder interests and delivering sustained returns. While China's wealth management industry is navigating a challenging period and undergoing a transition, we remain confident in our unique advantages stemming from our deep understanding of Mandarin-speaking high-net-worth individuals' (HNWI) needs and our ability to deliver products and services to this still-growing client base. We are one of a few independent firms that maintains access, through years of investor education, to a large group of qualified individual investors who continue to seek professional services. As such, we believe that our stock is deeply undervalued and does not reflect our growth prospects, robust balance sheet and cash reserves, or the special bond we have formed with Mandarin-speaking HNWIs globally. We value both our long-term and new shareholders and are committed to sharing our success with them through more proactive capital allocation policies moving forward."
SECOND QUARTER 2024 FINANCIAL RESULTS
Net Revenues
Net revenues for the second quarter of 2024 were RMB615.8 million (US$84.7 million), a 34.6% decrease from the corresponding period in 2023, primarily due to a decrease in distribution o