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


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


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

Noah Holdings Limited
Condensed Consolidated Balance Sheets
(In U.S. dollars)
As of

December 31,2010

March 31,2011
$ $
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)
    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
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)
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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