Mr. Tom Wu, Chief Financial Officer, said, “Overall we are satisfied with our third quarter results. We distributed US$0.8 billion worth of transaction value through a more balanced product mix and achieved non-GAAP net income of US$6.4 million, our second highest quarter in the history of the Company.

THIRD QUARTER 2011 FINANCIAL RESULTS

Net Revenues

Net revenues for the third quarter of 2011 were US$19.3 million, an 88.9% increase from the corresponding period in 2010. The year-over-year increase was attributable to an increase of US$4.6 million in one-time commissions and an increase of US$4.5 million in recurring service fees.

Net revenues from one-time commissions for the third quarter of 2011 were US$12.8 million, a 56.1% increase from the corresponding period in 2010. The year-over-year increase was primarily driven by a significant increase in the number of active clients.

Net revenues from recurring service fees for the third quarter of 2011 were US$6.4 million, a 220.0% 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.

Operating Margin

Operating margin for the third quarter of 2011 was 30.3%, as compared to 42.5% for the corresponding period in 2010. Operating margin decreased year-over-year primarily due to the Company’s network expansion.

Operating cost and expenses for the third quarter of 2011, including cost of revenues, selling expenses, G&A expenses and other operating income, were US$13.4 million, a 129.1% increase from the corresponding period in 2010.

Cost of revenues for the third quarter of 2011 totaled US$4.0 million, a 117.5% increase from the corresponding period in 2010. The year-over-year increase was primarily due to increases in compensation expenses paid to relationship managers mainly as a result of the expansion of the Company’s relationship manager team and the increase of the aggregate value of wealth management products distributed in the quarter.

Selling expenses for the third quarter of 2011 were US$5.7 million, a 135.5% increase from the corresponding period in 2010. The year-over-year increase was primarily due to increases in personnel expenses, general marketing expenses and rental expenses as a result of the Company’s network expansions. Selling expenses as a percentage of net revenues for the quarter was 29.4%, as compared to 23.6% for the corresponding period in 2010.

G&A expenses for the third quarter of 2011 were US$4.3 million, a 153.8% 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 to a lesser extent, due to increases in share-based compensation expenses, rental expenses and training fees. G&A expenses as a percentage of net revenues for the quarter was 22.1%, as compared to 16.4% for the corresponding period in 2010.

Income Tax Expenses

Income tax expenses for the third quarter of 2011 were US$2.1 million, a 59.9% increase from the corresponding period in 2010. The year-over-year increase was primarily due to an increase in taxable income.

Net Income

Net income attributable to Noah shareholders for the third quarter of 2011 was US$5.7 million, an 82.6% increase from the corresponding period in 2010. Net margin for the third quarter of 2011 was 29.7%, as compared to 30.8% for the corresponding period in 2010. Income per basic and diluted ADS for the third quarter of 2011 were both US$0.10, as compared to US$0.07 for the corresponding period in 2010.

Non-GAAP net income attributable to Noah shareholders for the third quarter of 2011 was US$6.4 million, an 89.5% increase from the corresponding period in 2010. Non-GAAP net margin for the third quarter of 2011 was 33.2%, as compared to 33.1% for the corresponding period in 2010. Non-GAAP income per diluted ADS for the third quarter of 2011 was US$0.11, as compared to US$0.08 for the corresponding period in 2010.

Balance Sheet and Cash Flow

As of September 30, 2011, the Company had US$137.5 million in cash and cash equivalents, an increase of US$9.4 million from US$128.1 million as of June 30, 2011. In the third quarter of 2011, the Company generated US$11.0 million in its operating activities, received US$3.0 million in proceeds from sale of fixed income products, invested US$5.3 million in fixed income products and used US$1.2 million to acquire property and equipment.

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