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

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.

-- FINANCIAL AND OPERATIONAL TABLES FOLLOW --

Noah Holdings Limited
Condensed Consolidated Balance Sheets
(In U.S. dollars except for share data)
(unaudited)
						As of
						March 31,2011				June 30,2011
						$				$
Assets
	Current assets:
		Cash and cash equivalents				125,518,608				128,124,844
		Restricted cash				76,356				77,357
		Fixed-term deposits				4,734,053				4,796,163
		Short-term investments				4,963,120				10,123,076
		Accounts receivable, net of allowance for doubtful accounts of nil at March 31, 2011 and June 30, 2011				10,160,640				12,366,703
		Deferred tax assets				1,271,451				1,263,257
		Amounts due from related parties				180,760				247,122
		Other current assets				1,866,738				2,747,964
		Total current assets				148,771,726				159,746,486
	Long-term investments					4,497,350				1,373,288
	Investment in affiliates					1,022,723				1,903,328
	Property and equipment, net					1,883,090				2,214,145
	Non-current deferred tax assets					300,208				466,185
	Other non-current assets					833,465				961,717
Total Assets						157,308,562				166,665,149
Liabilities and Equity
	Current liabilities:
		Accrued payroll and welfare expenses				3,432,329				7,740,356
		Income tax payable				7,772,233				3,132,627
		Deferred tax liabilities				32,549				32,977
		Other current liabilities				5,503,075				4,530,061
		Total current liabilities				16,740,186				15,436,021
	Uncertain tax position liabilities					1,415,767				1,474,618
	Other non-current liabilities					899,481				1,450,044
	Total Liabilities					19,055,434				18,360,683
	Equity					138,253,128				148,304,466
Total Liabilities and Equity						157,308,562				166,665,149

Noah Holdings Limited
Condensed Consolidated Income Statements
(In U.S. dollars, except for share data and percentages)
(unaudited)
			Three months ended
			June 30,			June 30,			Change
			2010			2011
Revenues:			$			$
Third-party revenues			6,941,253			21,709,836			212.8%
Related party revenues			1,329,086			2,926,750			120.2%
Total revenues			8,270,339			24,636,586			197.9%
Less: business taxes and related surcharges			(479,022)			(1,335,257)			178.7%
Net revenues			7,791,317			23,301,329			199.1%
Operating cost and expenses:
Cost of revenues			(1,357,085)			(4,396,542)			224.0%
Selling expenses			(1,618,900)			(4,753,026)			193.6%
General and administrative expenses			(2,542,291)			(3,641,436)			43.2%
Other operating income			93,896			56,745			(39.6%)
Total operating cost and expenses			(5,424,380)			(12,734,259)			134.8%
Income from operations			2,366,937			10,567,070			346.4%
Other income (expenses):
Interest income			26,015			403,836			1452.3%
Investment income			51,602			275,654			434.2%
Other income (expense)			(52)			914,117			-
Gain (loss) on change in fair value of derivative liabilities			236,000			-			(100.0%)
Total other income (expenses)			313,565			1,593,607			408.2%
Income before taxes and loss from equity in affiliates			2,680,502			12,160,677			353.7%
Income tax expense			(760,233)			(3,217,851)			323.3%
Loss from equity in affiliates			(7,316)			(1,144)			(84.4%)
Net income attributable to Noah Shareholders			1,912,953			8,941,682			367.4%
Deemed dividend on Series A convertible redeemable preferred shares			(54,473)			-			(100.0%)
Net income attributable to ordinary shareholders			1,858,480			8,941,682			381.1%
Income per ADS, basic			0.05			0.16			220.0%
Income per ADS, diluted			0.04			0.16			300.0%
Margin analysis:
Operating margin			30.4%			45.3%
Net margin			24.6%			38.4%
Weighted average ADS equivalent: [1]
Basic			26,955,495			55,747,547
Diluted			46,064,057			57,107,622
ADS equivalent outstanding at end of period			26,955,495			55,805,166

		[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
			June 30,			June 30,
			2010			2011
Number of registered clients			12,353			22,276			80.3%
Number of relationship managers			285			449			57.5%
Number of branch offices			25			45			80.0%
			Three months ended						Change
			June 30,			June 30,
			2010			2011
			(in millions of RMB, except percentages)
Number of active clients			343			1,173			242.0%
Transaction value:
Fixed income products			1,197			2,679			123.8%
Private equity fund products			2,566			4,640			80.8%
Securities investment funds and investment-linked insurance products			1			568			567
Total transaction value			3,764			7,887			109.5%
Average transaction value per client			10.97			6.72			(38.7%)

Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In U.S. dollars, except for share data and percentages)
(unaudited)
			Three months ended
			June 30,			June 30,
			2010			2011
			$			$
Net income attributable to Noah Shareholders			1,912,953			8,941,682
Adjustment for share-based compensation related to:
Share options			146,542			358,032
Restricted shares			1,153,059			35,407
Adjustment for loss (gain) on change in fair value of derivative liabilities			(236,000)			-
Adjusted net income attributable to Noah Shareholders (non-GAAP)*			2,976,554			9,335,121
Net income per ADS, diluted			0.04			0.16
Adjustment for share-based compensation			0.03			-
Adjustment for loss (gain) on change in fair value of derivative liabilities			(0.01)			-
Adjusted net income per ADS, diluted (non-GAAP)*			0.06			0.16
Net margin			24.6%			38.4%
Adjusted net margin (non-GAAP)*			38.2%			40.1%

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

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