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Noah Holdings Limited Announces Financial Results For The First Quarter Of 2011

Mr. Tom Wu, Chief Financial Officer, said, “Consistent with our strategy to deliver profitable and sustainable growth, we delivered strong top line and bottom line results in the first quarter. We remain confident that the encouraging industry fundamentals that have powered our growth thus far will continue throughout 2011.”

EXTENSION OF IPO LOCK-UP ARRANGEMENTS

Pursuant to the lock-up arrangement between the Company and the underwriters of the Company’s initial public offering (“IPO”) in November 2010 and the terms of the lockup agreements signed by each of the Company’s directors, executive officers, and pre-IPO shareholders, the lockup period will be extended through May 16, 2011 (Beijing Time) due to the timing of the release of the Company’s 2011 first quarter financial results.

FIRST QUARTER 2011 FINANCIAL RESULTS

Net Revenues

Net revenues for the first quarter of 2011 were US$15.1 million, a 158.2% increase from the corresponding period in 2010. The year-over-year increase was attributable to an increase of US$6.5 million in one-time commissions and an increase of US$2.7 million in recurring service fees.

Net revenues from one-time commissions for the first quarter of 2011 were US$11.3 million, a 136.5% increase from the corresponding period in 2010. The year-over-year increase was primarily driven by increases in both the number of active clients and the average transaction value per client.

Net revenues from recurring service fees for the first quarter of 2011 were US$3.8 million, a 253.0% increase from the corresponding period in 2010. The year-over-year increase was mainly due to an increase in the transaction value of private equity fund products distributed.

Operating Margin

Operating margin for the first quarter of 2011 was 43.6%, as compared to 49.4% for the corresponding period in 2010. Operating margin decreased year-over-year because the Company’s operating cost increase outpaced its revenues increase, which was in turn primarily due to the Company’s network expansion.

Operating cost and expenses for the first quarter of 2011, including cost of revenues, selling expenses, G&A expenses and other operating income, were US$8.5 million, a 187.4% increase from the corresponding period in 2010.

Cost of revenues for the first quarter of 2011 totaled US$2.6 million, a 218.5% increase from the corresponding period in 2010. The year-over-year increase was primarily due to an increase in compensation expenses paid to relationship managers primarily as a result of the expansion of the Company’s relationship managers.

Selling expenses for the first quarter of 2011 were US$3.4 million, a 267.2% increase from the corresponding period in 2010. The year-over-year increase was primarily due to increases in personnel expenses, client service expenses and rental expenses as a result of the Company’s network expansion. Selling expenses as a percentage of net revenues for the quarter were 22.6%, as compared to 15.9% for the corresponding period in 2010.

G&A expenses for the first quarter of 2011 were US$2.5 million, a 103.6% increase from the corresponding period in 2010. The year-over-year increase was primarily due to increases in employee compensation expenses attributable to G&A expenses and rental expenses as a result of the expansion of the Company, and to a lesser extent, attributable to an increase in audit fees. G&A expenses as a percentage of net revenues for the quarter were 16.6%, as compared to 21.1% for the corresponding period in 2010.

Gain (Loss) on Change in Fair Value of Derivative Liabilities

In the first quarter of 2011, the Company did not record any charge on change in fair value of derivative liabilities as it did for the corresponding period in 2010. The series A preferred shares that had triggered the accounting treatment of derivative liabilities were converted into ordinary share upon the Company’s initial public offering, so there would be no such charge after the Company’s initial public offering. In the first quarter of 2010, a gain of US$0.1 million was recorded.

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