Hot Stock to watch: Noah Holdings Limited (NYSE: NOAH)

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Noah Holdings Limited (NYSE: NOAH) stock rose over 1.3% (as of 9:42 am GMT-4 ; Source: Google finance) on May 19th, 2020 even though the company in the first quarter of FY 20 has reported 16.2% fall in the net revenues to RMB746.1 million (US$105.4 million) and RMB788.3 million for the fourth quarter of 2019. The revenue declined due to the decreased one-time commissions and other service fees, which was partially offset by the increase in recurring service fees and performance-based income. The company has reported 16% fall in the Non-GAAP net income attributable to Noah shareholders for the first quarter of 2020 to RMB255.9 million (US$36.1 million) but a 119.6% increase from the fourth quarter of 2019.

The company has generated Income/ (loss) from operations for the first quarter of 2020 was RMB256.3 million (US$36.2 million), which reflects a 15.3% decrease from the corresponding period in 2019, and a 102.9% increase from the fourth quarter of 2019. The Operating margin for the first quarter of 2020 has increased slightly to 34.3%, compared to 34% for the corresponding period in 2019. The Investment income for the first quarter of 2020 has fallen to RMB17.6 million (US$2.5 million), compared to RMB25.7 million for the corresponding period in 2019 due to the fluctuation of fair value of equity. At the end of March, 2020, the Company had RMB4,045.8 million (US$571.4 million) in cash and cash equivalents, compared to RMB4,387.3 million as of December 31, 2019 and RMB2,869.6 million as of March 31, 2019. The company is actively preparing for the upcoming quarters of this years, has increased the investment and development of the IT infrastructure to further improve the online service experience and product offering.

Moreover, the company’s transaction value grew 76.1% to RMB23.19 billion in the first quarter of 2020 quarter-over-quarter. The transaction value of standardized products including mutual funds, equity and bond funds achieved the growth of 496.3% year-over-year and was up 96.9% quarter-over-quarter. Furthermore, in Wealth Management Business, the total number of registered clients as of March 31, 2020 has risen by 16.8% to 321,148 from March 31, 2019, and a 9.3% increase from December 31, 2019. Total number of active clients during the first quarter of 2020 fell by 49.8% to 4,075 from the first quarter of 2019, and a 9.7% decrease from the fourth quarter of 2019.

NOAH expects non-GAAP net income attributable to Noah shareholders for the full year 2020 to be in the range of RMB800 million to RMB900 million.

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