A live webcast of the conference call and replay will be available in the investor relations section of the Company’s website at http://ir.noahwm.com.


In addition to disclosing financial results prepared in accordance with U.S. GAAP, the Company’s earnings release contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation. The reconciliation of these non-GAAP financial measures to the nearest GAAP measures is set forth in the table captioned “Reconciliation of GAAP to Non-GAAP Results” below.

The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The financial results reported in accordance with U.S. GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated. The non-GAAP financial measure used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies.

When evaluating the Company’s operating performance in the periods presented, management reviewed non-GAAP net income results reflecting adjustments to exclude the impacts of share-based compensation to supplement U.S. GAAP financial data. As such, the Company believes that the presentation of the non-GAAP net income, non-GAAP income per diluted ADS and non-GAAP net margin provides important supplemental information to investors regarding financial and business trends relating to the Company’s financial condition and results of operations in a manner consistent with that used by management. Pursuant to U.S. GAAP, the Company recognized significant amounts of expenses for the restricted shares and share options in the periods presented. To make financial results comparable period by period, the Company utilized the non-GAAP financial results to better understand its historical business operations.


Noah Holdings Limited is the leading independent 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 over 500 relationship managers in 53 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.


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 annual report on Form 20-F. 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.
Noah Holdings Limited
Condensed Consolidated Balance Sheets
(In U.S. dollars)
    As of

  June 30, 2011  
    September 30, 2011
$ $
Current assets:
Cash and cash equivalents 128,124,844 137,503,856
Restricted cash 77,357 78,394
Fixed-term deposits 4,796,163 3,135,779
Short-term investments 10,123,076 12,397,950
Accounts receivable, net of allowance for doubtful accounts of nil at June 30, 2011 and September 30, 2011 12,366,703 11,323,319
Deferred tax assets 1,263,257 1,279,482
Amounts due from related parties 247,122 119,697
Other current assets 2,747,964 2,536,084
Total current assets 159,746,486 168,374,561
Long-term investments 1,373,288 1,864,711
Investment in affiliates 1,903,328 2,244,440
Property and equipment, net 2,214,145 3,309,284
Non-current deferred tax assets 466,185 453,307
Other non-current assets 961,717 902,566
Total Assets 166,665,149 177,148,869
Liabilities and Equity
Current liabilities:
Accrued payroll and welfare expenses 7,740,356 8,244,654
Income tax payable 3,132,627 1,682,800
Deferred tax liabilities 32,977 33,419
Other current liabilities 4,530,061 8,586,880
Uncertain tax position liabilities - 318,127
Total current liabilities 15,436,021 18,865,880
Non-current uncertain tax position liabilities 1,474,618 1,216,393
Other non-current liabilities 1,450,044 1,406,698
Total Liabilities 18,360,683 21,488,971
Equity 148,304,466 155,659,898
Total Liabilities and Equity 166,665,149 177,148,869

Noah Holdings Limited
Condensed Consolidated Income Statements
(In U.S. dollars, except for ADS data, per ADS data and percentages)
Three months ended
September 30,     September 30, Change
2010 2011
Revenues: $ $
Third-party revenues 8,460,273 17,617,614 108.2 %
Related party revenues 2,312,775   2,782,569   20.3 %
Total revenues 10,773,048 20,400,183 89.4 %
Less: business taxes and related surcharges (571,566 ) (1,132,791 ) 98.2 %
Net revenues 10,201,482   19,267,392   88.9 %
Operating cost and expenses:
Cost of revenues (1,833,302 ) (3,986,965 ) 117.5 %
Selling expenses (2,404,734 ) (5,663,065 ) 135.5 %
General and administrative expenses (1,677,255 ) (4,257,648 ) 153.8 %
Other operating income 50,919   474,838   832.5 %
Total operating cost and expenses (5,864,372 ) (13,432,840 ) 129.1 %
Income from operations 4,337,110   5,834,552   34.5 %
Other income:
Interest income 36,307 617,954 1,602.0 %
Investment income 56,548 380,109 572.2 %
Other (expense) income (17 ) 941,725 (55,396.6 )
Total other income 92,838   1,939,788   19.89  
Income before taxes and loss from equity in affiliates 4,429,948 7,774,340 75.5 %
Income tax expense (1,286,333 ) (2,056,313 ) 59.9 %
(Loss) gain from equity in affiliates (5,114 ) 12,918   (352.6 %)
Net income attributable to Noah Shareholders 3,138,501 5,730,945 82.6 %
Deemed dividend on Series A convertible redeemable preferred shares -   -    
Net income attributable to ordinary shareholders 3,138,501   5,730,945   82.6 %
Income per ADS, basic 0.07 0.10 42.9 %
Income per ADS, diluted 0.07 0.10 42.9 %

Margin analysis:
Operating margin 42.5 % 30.3 %
Net margin 30.8 % 29.7 %
Weighted average ADS equivalent: [1]
Basic 34,200,000 55,838,530
Diluted 35,031,910 57,045,008
ADS equivalent outstanding at end of period 34,200,000 55,876,787
        [1] Assumes all outstanding ordinary shares are represented by ADSs. Each ordinary share represents two ADSs
Noah Holdings Limited
Supplemental Information
As of Change
September 30, 2010 September 30, 2011
Number of registered clients 14,218 24,746 74.0 %
Number of relationship managers 308 505 64.0 %
Number of branch offices 28 53 89.3 %
Three months ended Change
September 30, 2010 September 30, 2011
(in millions of RMB, except percentages)
Number of active clients 566 1,200 112.0 %
Transaction value:
Fixed income products 1,335 2,470 85.0 %
Private equity fund products 3,323 2,206 (33.6 %)
Securities investment funds and investment-linked insurance products 181 704 289.0 %
Total transaction value 4,839 5,380 11.2 %
Average transaction value per client 8.55 4.48 (47.6 %)
Noah Holdings Limited
Reconciliation of GAAP to Non-GAAP Results
(In U.S. dollars, except for per ADS data and percentages)
Three months ended
September 30,     September 30,
2010 2011
$ $
Net income attributable to Noah Shareholders 3,138,501 5,730,945
Adjustment for share-based compensation related to:
Share options 199,620 626,359
Restricted shares 35,796 35,797
Adjusted net income attributable to Noah Shareholders (non-GAAP)* 3,373,917 6,393,101
Net income per ADS, diluted 0.07 0.10
Adjustment for share-based compensation 0.01 0.01
Adjusted net income per ADS, diluted (non-GAAP)* 0.08 0.11
Net margin 30.8 % 29.7 %
Adjusted net margin (non-GAAP)* 33.1 % 33.2 %
*The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments.

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.

“Active clients” refers to those registered clients who purchased wealth management products distributed by Noah during any given period.

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.

“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.

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