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

ABOUT NOAH HOLDINGS LIMITED

Noah Holdings Limited is the leading service provider focusing on distributing wealth management products to the high net worth population in China. Noah distributes over-the-counter wealth management products that are originated in China, including primarily fixed income products, private equity funds and securities investment funds. With 364 relationship managers in 39 branch offices, 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 year 2011 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: our goals and strategies; our future business development, financial condition and results of operations; the expected growth of the wealth management market in China and internationally; our expectations regarding demand for and market acceptance of the products we distribute; our expectations regarding keeping and strengthening our relationships with key clients; relevant government policies and regulations relating to our industry; our ability to attract and retain quality employees; our ability to stay abreast of market trends and technological advances; our plans to invest in research and development to enhance our product choices and service offerings; competition in our industry in China and internationally; general economic and business conditions in China; and our ability to effectively protect our 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 registration statement on Form F-1, as amended. 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.

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 and gain (loss) on change in fair value of derivative liabilities.
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.
5		Fixed-term deposits consist of deposits which are unrestricted as to withdrawal and use, and which have original maturities of over three months and less than twelve months when purchased

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited
Condensed Consolidated Balance Sheets
(In U.S. dollars)
(unaudited)
					As of
					December 31,2010		March 31,2011
					$		$
Assets
	Current assets:
		Cash and cash equivalents			133,269,694		125,518,608
		Restricted cash			75,758		76,356
		Fixed-term deposits			-		4,734,053
		Short-term investments			2,272,727		4,963,120
		Accounts receivable, net of allowancefor doubtful accounts of nil at December31,2010 and March 31, 2011			1,098,327		10,160,640
		Other current assets			2,178,369		1,866,738
		Deferred tax assets			1,262,092		1,271,451
		Amounts due from related parties			1,017,434		180,760
		Total current assets			141,174,401		148,771,726
	Long-term investments				4,445,455		4,497,350
	Investment in affiliates				859,982		1,022,723
	Property and equipment, net				1,406,247		1,883,090
	Other non-current assets				480,564		833,465
	Non-current deferred tax assets				319,197		300,208
Total Assets					148,685,846		157,308,562
Liabilities and Equity
	Current liabilities:
		Accrued payroll and welfare expenses			4,621,787		3,432,329
		Income tax payable			6,277,598		7,772,233
		Other current liabilities			3,799,946		5,503,075
		Deferred tax liabilities			32,295		32,549
		Total current liabilities			14,731,626		16,740,186
	Uncertain tax position liabilities				1,364,122		1,415,767
	Other non-current liabilities				961,277		899,481
	Total Liabilities				17,057,025		19,055,434
	Equity				131,628,821		138,253,128
Total Liabilities and Equity					148,685,846		157,308,562

Noah Holdings Limited
Condensed Consolidated Income Statements
(In U.S. dollars, except for share data and percentages)
(unaudited)
			Three months ended
			March 31,		March 31,		Change
			2010		2011
Revenues:			$		$
Third-party revenues			5,688,242		14,047,759		147.0%
Related party revenues			539,117		1,997,650		270.5%
Total revenues			6,227,359		16,045,409		157.7%
Less: business taxes and related surcharges			(360,691)		(897,115)		148.7%
Net revenues			5,866,668		15,148,294		158.2%
Operating cost and expenses:
Cost of revenues			(819,409)		(2,610,173)		218.5%
Selling expenses			(931,819)		(3,421,605)		267.2%
General and administrative expenses			(1,237,919)		(2,520,014)		103.6%
Other operating income			18,577		13,132		(29.3%)
Total operating cost and expenses			(2,970,570)		(8,538,660)		187.4%
Income from operations			2,896,098		6,609,634		128.2%
Other income(expenses):
Interest income			18,080		410,105		2168.3%
Investment income			107,198		225,780		110.6%
Other income(expense)			(24,330)		597,071		2554.1%
Gain on change in fair value of derivative liabilities			118,000		-		(100.0%)
Total other income (expenses)			218,948		1,232,956		463.1%
Income before taxes and loss from equity in affiliates			3,115,046		7,842,590		151.8%
Income tax expense			(883,765)		(2,075,150)		134.8%
Loss from equity in affiliates			-		(4,375)		-
Net income attributable to Noah Shareholders			2,231,281		5,763,065		158.3%
Deemed dividend on Series A convertible redeemable preferred shares			(53,875)		-		(100.0%)
Net income attributable to ordinary shareholders			2,177,406		5,763,065		164.7%
Income per ADS, basic			0.06		0.10		66.7%
Income per ADS, diluted			0.04		0.10		150.0%
Margin analysis:
Operating margin			49.4%		43.6%
Net margin			38.0%		38.0%
Weighted average ADS equivalent: [1]
Basic			25,605,000		55,676,667
Diluted			34,033,562		57,126,675
ADS equivalent outstanding at end of period			24,750,000		55,735,000

[1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs

Noah Holdings Limited
Supplemental Information
(unaudited)
			As of				Change
			March 31,2010		March 31,2011
Number of registered clients			10,497		18,521		76.4%
Number of relationship managers			222		364		64.0%
Number of branch offices			20		39		95.0%
			Three months ended				Change
			March 31,2010		March 31,2011
			(in millions of RMB, except percentages)
Active clients			506		659		30.2%
Transaction value:
Fixed income products			1,354		1,695		25.2%
Private equity fund products			39		2,523		6369.2%
Securities investment funds and investment-linked insurance products			17		815		4694.1%
Total transaction value			1,410		5,033		257.0%
Average transaction value per client			2.79		7.64		173.8%

Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In U.S. dollars, except for share data and percentages)
(unaudited)
			Three months ended
			March 31,		March 31,
			2010		2011
			$		$
Net income attributable to Noah Shareholders			2,231,281		5,763,065
Adjustment for share-based compensation related to:
Share options			38,812		384,061
Restricted shares			193,068		-
Adjustment for loss(gain) on change in fair value ofderivative liabilities			(118,000)		-
Adjusted net income attributable to Noah Shareholders (non-GAAP)*			2,345,161		6,147,126
Net income per ADS, diluted			0.04		0.10
Adjustment for share-based compensation			0.01		0.01
Adjustment for loss(gain) on change in fair value ofderivative liabilities			-		-
Adjusted net income per ADS, diluted (non-GAAP)*			0.05		0.11
Net margin			38.0%		38.0%
Adjusted net margin (non-GAAP)*			40.0%		40.6%

*The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments.

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