Noah Holdings Limited (NYSE: NOAH) stock falls on lower performance-based income

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Noah Holdings Limited (NYSE: NOAH) stock rose 2.26% after the company in the first quarter of FY 19 has reported 19.9% rise in the Non-GAAP net income attributable to Noah shareholders of RMB304.6 million (US$45.4 million) from the corresponding period in 2018. In the first quarter of 2019, Noah Group achieved the net revenues of RMB890 million, up 7.1 percentage year-over-year and 8.2 percentage quarter-over-quarter. The increase in revenue is driven by increased recurring service fees and other service fees, partially offset by a decrease of performance-based income. The non-GAAP net margin reached the 34.2 percentage, the highest costly margin for the past three years.

Operating margin for the first quarter of 2019 increased to 34.0%,from 33.0% for the corresponding period in 2018. As of March 31, 2019, the Company had RMB2,869.6 million (US$427.6 million) in cash and cash equivalents, compared with RMB2,704.1 million as of December 31, 2018 and RMB2,151.4 million as of March 31, 2018.

In terms of business performance, in the first quarter of 2019, NOAH has distributed RMB28 billion value of wealth management products, which is flat compared with last year and up 11.4 percentage from last quarter, indicating a recovery of investor confidence. The effective one-time commission rate reached 1.16 percentage, that is inline with the company’s overall project strategy. The number of registered wealth management clients reached 275,000, up 39.6% year-over-year and 5.6% quarter-over-quarter. As the company expanded project lines and in particular increased the sales of public offering, the number of active clients increased to 8,117, up 49% year-over-year and 72.1 quarter-over-quarter. As of the end of the first quarter, the AUM of the Asset Management segment rose by 9% year-over-year reaching RMB171.1 billion of which the AUM of private equity investment reached RMB101.1 billion.

Moreover, in the first quarter, Noah Financial Express originated loans of RMB2.5 billion, up 17.2 year-over-year. The net revenue of lending and other business reached RMB98.6 million, which is up 136 – 132.6% year-over-year. It is the first time for this segment to substantial profit with operating profit of RMB45.2 million.

Further, Noah’s overseas business also continues to develop. As of the end of the first quarter 2019, the overseas assets under management which RMB24.7 billion, up 15.6% year-over-year. Total revenues of the office in Hong Kong, the United States, Canada, Australia and other countries reached RMB215 million accounting for 27.8% of the Group’s net revenues.

For FY 19, the company expects non-GAAP net income attributable to Noah shareholders to be in the range of RMB1.13 billion to RMB1.18 billion.

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