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Noah Holdings Limited Announces 2011 Fourth Quarter And Full Year 2011 Financial Results And Declares Cash Dividend

Mr. Tom Wu, Chief Financial Officer, said, “In 2011, we made significant investments in our infrastructure and talent which we expect to leverage in the upcoming years. In 2012 we will continue to focus on growth, profitability and productivity. And our first dividend since our initial public offering in November 2010 reflects our commitment to shareholders and the Company’s strong cash flow.”

FOURTH QUARTER 2011 AND FULL YEAR 2011 FINANCIAL RESULTS

Net Revenues

Net revenues for the fourth quarter of 2011 were US$14.4 million, essentially flat compared with the corresponding period in 2010. An increase in net revenues in recurring service fees offset a decline in net revenues in one-time commissions for the fourth quarter of 2011.

Net revenues from one-time commissions for the fourth quarter of 2011 were US$7.5 million, a 27.0% decrease from the corresponding period in 2010. The year-over-year decrease was primarily driven by declines in both transaction value and the average transaction value per client.

Net revenues from recurring service fees for the fourth quarter of 2011 were US$6.9 million, an 87.7% increase from the corresponding period in 2010. The year-over-year increase was mainly due to the cumulative effect of private equity fund and securities investment fund products distributed previously.

Net revenues for the full year 2011 were US$72.2 million, a 90.6% increase from 2010. The year-over-year increase was attributable to an increase of US$20.4 million in one-time commissions and an increase of US$13.9 million in recurring service fees.

Net revenues from one-time commissions for the full year 2011 were US$49.6 million, a 69.7% increase from 2010. The year-over-year increase was primarily driven by a significant increase in aggregate value of wealth management products distributed by the Company.

Net revenues from recurring service fees for the full year 2011 were US$22.5 million, a 161.5% increase from 2010. The year-over-year increase was mainly due to the cumulative effect of private equity fund and securities investment fund products distributed previously.

Operating Margin

Operating margin for the fourth quarter of 2011 was 14.5%, as compared to 43.4% for the corresponding period in 2010. Operating margin for the full year 2011 was 34.8%, as compared to 41.4% for 2010. The year-over-year operating margin decreases for the fourth quarter of 2011 and the full year 2011 were primarily due to an increase in operating cost and expenses resulting from the Company’s expansions outpacing its net revenue growth.

Operating cost and expenses for the fourth quarter of 2011, including cost of revenues, selling expenses, G&A expenses and other operating income, were US$12.4 million, a 56.0% increase from the corresponding period in 2010. Operating cost and expenses for the full year 2011 were US$47.1 million, a 112.2% increase from 2010.

Cost of revenues for the fourth quarter of 2011 totaled US$3.8 million, a 48.8% increase from the corresponding period in 2010. Cost of revenues for the full year 2011 totaled US$14.8 million, a 125.3% increase from 2010. The year-over-year increases for the fourth quarter 2011 and full year 2011 were primarily due to increases in compensation expenses paid to relationship managers mainly as a result of the expansion of the Company’s sales force.

Selling expenses for the fourth quarter of 2011 were US$5.4 million, a 53.5% increase from the corresponding period in 2010. Selling expenses as a percentage of net revenues for the fourth quarter of 2011 was 37.5%, as compared to 25.2% for the corresponding period in 2010. Selling expenses for the full year 2011 were US$19.3 million, a 126.9% increase from 2010. The year-over-year increases for the fourth quarter of 2011 and full year 2011 were primarily due to increases in personnel expenses, rental expenses, client service fees, share-based compensation expenses and office expenses as a result of the Company’s network expansions.

G&A expenses for the fourth quarter of 2011 were US$3.1 million, a 71.0% increase from the corresponding period in 2010. G&A expenses as a percentage of net revenues for the fourth quarter of 2011 was 21.7%, as compared to 13.1% for the corresponding period in 2010. G&A expenses for the full year 2011 were US$13.6 million, an 85.9% increase from 2010. The year-over-year increases for the fourth quarter of 2011 and full year 2011 were primarily due to increases in rental expenses, expenses related to employee activities and trainings.

Income Tax Expenses

Income tax expenses for the fourth quarter of 2011 were US$0.4 million, a 76.9% decrease from the corresponding period in 2010. The year-over-year decrease was primarily due to a decrease in taxable income and an increase in deferred tax income.

Income tax expenses for the full year 2011 were US$7.8 million, a 62.4% increase from US$4.8 million in 2010. The increase was primarily attributable to an increase in taxable income.

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