SHANGHAI, May 31, 2024 –Noah Holdings Limited (“the Company,” or “Noah”) (NYSE: NOAH and HKEX: 6686), a leading, pioneer wealth-management service provider offering comprehensive one-stop advisory services on global investment and asset allocation primarily for Mandarin-speaking high-net-worth investors, today announced its unaudited financial results for the first quarter ended March 31, 2024.
Taking a broad look at the global economic environment—and beginning with the situation at home—Noah has seen capital markets in China fluctuate during the first quarter. At the same time, the critical domestic real-estate market has been sluggish. This has put high-net-worth individuals in a more cautious and risk-averse mood in terms of their investment appetites. Overseas, persistent inflation during the past three months has eased expectations for a rate cut from the Federal Reserve.
Zhe Yin, the Chief Executive Officer of Noah Holdings, said: “The macroeconomic environment has been a challenge, but we have responded with a strategic transformation that we believe will set us up for future success. From day one, we adhered to our core principles: a strict segregation of client capital, no maturity mismatches, and no cross-border movement of funds. Our decision in 2019 to shift to a more standardized product offering while winding down all non-standard private credit products—including domestic residential real-estate funds—has served Noah clients well in turbulent times. The restructuring of our domestic wealth management business is, at present, at a critical stage as we consolidate and further optimize our operations. At the same time, our expansion overseas remains on track—but will still require additional resources and investments in the near term. Taken as a whole, these measures will require more time, but once complete, we expect sales to stabilize in the second half of this year.”
Noah generated first-quarter net revenues of RMB 650 million, a decrease of 19.2% from a year earlier. The wealth management business generated revenues of RMB 463 million, a decrease of 21.2% from a year earlier. The asset management business generated revenues of RMB 180 million, a decrease of 12.1% from a year earlier. These changes are in line with Noah’s strategic realignment and are part of a concerted effort to enhance the Company’s long-term growth trajectory. Noah’s overseas expansion has achieved solid results by contributing 77.1% of the revenue generated from new business and products, while the domestic business accounted for 22.9%.
Operating profit for the first quarter of 2024 was RMB 121 million, and Noah reported an operating profit margin of 18.7%.
Noah is committed to building a healthy and sustainable platform for growth outside of China. At the same time, it recognizes that its overseas relationship management team is currently too small to effectively service clients, leaving room to improve service quality and responsiveness. Noah is bolstering its teams in Hong Kong and Singapore with the goal of expanding this critical cohort to 200 relationship managers by the end of this year.
Overseas assets under management (AUM) grew 11.6% from a year earlier to RMB37.3 billion, accounting for 24.4% of total AUM. Also, overseas assets under administration (AUA) grew 14.8% from a year earlier, accounting for 24.1% of total AUA. This reflected our ability to capture a larger share of our clients’ U.S. dollar wallets.
Reflecting additional overseas success, as of the end of the quarter, Noah had more than 15,700 overseas registered clients, an increase of 17.1% from a year earlier. In addition, the number of overseas, active high-net-worth clients reached 2,745, an increase of 39.6% from a year earlier.
Noah’s success, in spite of economic headwinds, reflects its international focus and the Company seeks to combine that with the latest asset allocation advice and a full suite of wealth management products and services. This strategic approach has resonated with clients during recent market volatility. As of the end of the first quarter, the number of Black Card clients increased by 8.7% year-over-year. The total number of our clients, of whom the overseas investment with Noah is over USD 2 million, grew around 5% compare with last quarter.
On the technological front, Noah has expanded the products and range of client services offered through its iNoah app, its overseas wealth management app. This includes offering different solutions to clients, businesses, and agencies.
As mentioned last quarter, Noah declared an annual dividend of RMB 509 million and a non-recurring special dividend of RMB 509 million for 2023, which is subject to final approval at Annual General Meeting (AGM) on June 12, 2024. Noah expects to pay out dividends before the end of July to Hong Kong stockholders and in early August to ADS holders. Noah looks forward to providing stable and sustainable returns to shareholders as it drives growth in its business.
In the first quarter, Noah released its 10th annual ESG Report. This year’s report elaborated on Noah's management philosophy relative to corporate governance, society, and the environment, as well as its achievements related to those weighty topics. Since Noah was launched, it has been dedicated to providing high-quality asset allocation services to Mandarin speaking, high-net-worth investors. It has built lasting relationships with its clients and enhanced their understanding of wealth management and investing.
Jingbo Wang, Co-Founder and Chairlady, said: "Noah was founded with a deep respect for financial principles and a steadfast commitment to investor education. In this volatile market environment, our strategy is anchored in the protection and security of our clients' assets. Our primary goal is the preservation of assets, which we do by identifying top-tier investment opportunities globally. Safeguarding our clients' interests is our paramount responsibility, and it is the foundation upon which we will pursue future growth.”
Ms. Wang continued: “Confronting the evolving challenges to our domestic business, we are streamlining operations and concentrating our efforts in key strategic cities. As we transition, we are deploying advanced operational models and service philosophies from international markets to enhance our global competitiveness and strengthen our international profile. With a sharp vision and strong determination, we are navigating these strategic changes to become stronger, more agile, and better positioned to serve our clients globally.”
As Mandarin-speaking, high-net-worth investors become more mature and globally oriented, the trust-based relationships that Noah has built at home will allow it to continue serving them as they look overseas.
Noah’s full financial results for the first quarter ended March 31, 2024, are available at ir.noahgroup.com.
