• Total Revenue: RMB 684 million, a decrease of 8.8% year on year, but an increase of 11% sequentially.
• Overseas Revenue: RMB 377 million, an increase of 28.9% year on year and 35.3% sequentially, accounting for 55.1% of total revenue.
• Net Income: Non-GAAP net income increased to RMB 150 million sequentially.
• Operating Profit: RMB 241 million, with an operating margin of 35%.
• US Dollar AUA: USD 8.7 billion, a 5.7% year on year increase.
• Transaction Value: USD 1.1 billion, an increase of 15.8% year on year.
• Overseas Active Clients: 3,139, an increase of 37.4% year on year.
• Cash and Cash Equivalents: RMB 3.4 billion, with total cash reserves of RMB 4.8 billion.
• Dividend Payout: RMB 1 billion earlier this year.
• Share Repurchase Program: USD 50 million announced.

• Warning! GuruFocus has detected 4 Warning Signs with NOAH.

Release Date: November 27, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Noah Holdings Ltd (NYSE:NOAH) reported a sequential increase in total revenues by 11%, driven by a 28.9% increase in overseas revenues.
• The company has successfully expanded its international presence, with overseas revenues accounting for over 50% of the group's total revenue for the first time.
• Noah Holdings Ltd (NYSE:NOAH) launched several new products tailored to key client segments, contributing to a 35.3% sequential increase in overseas revenues.
• The company has seen significant growth in its overseas client base, with a 20.9% year-on-year increase in registered clients.
• Noah Holdings Ltd (NYSE:NOAH) has maintained a strong liquidity position with total cash reserves of around RMB 4.8 billion, despite a significant dividend payout earlier in the year.

Negative Points

• Total revenues decreased by 8.8% year-on-year, primarily due to a 32.6% decline in revenues from mainland China.
• The domestic market remains under pressure, with net revenues from mainland China decreasing by 32.6% year-on-year.
• Recurring service fees declined by 13.8% year-on-year, reflecting challenges in maintaining consistent revenue streams.
• The company experienced a foreign exchange loss of RMB 44 million due to the depreciation of the US dollar against the RMB.
• Revenue from domestic insurance products saw a significant decline, with onshore brokerage revenue decreasing by 89.9% year-on-year.

Q & A Highlights

Q: How is Noah Holdings participating in the rising sentiment of the equity market, and how does it impact revenue and profitability? A: Zhe Yin, CEO, explained that the recent policy changes and stock market rebound have not significantly impacted third-quarter results. While there is increased trading activity among mainland China clients, Noah Holdings maintains a long-term allocation strategy, advising clients to invest globally using QD I and QD LP products. The company has enhanced its product offerings but remains focused on long-term investment strategies.

Q: Can we expect stable revenue growth moving forward, and what will be the main drivers for revenue in the next year? A: Grant Pan, CFO, noted that while it's too early to confirm a stable revenue growth trend, the structure of growth is shifting towards international expansion. The focus will be on accumulating US dollar-denominated investment opportunities. The company aims to accelerate transformation while remaining patient and aligned with its overall strategy.

Q: Have there been any changes in customer behavior or product preferences following recent policy changes in China? A: Melo Xi, Senior Director, stated that while it's challenging to assess the long-term impact of recent policies, there is increased client engagement. Noah Holdings is focusing on providing long-term asset allocation advice, emphasizing safety nets, cash management, and growth strategies through private equity and AI-related investments. The company is refining its sales model to improve efficiency and expects this to reflect in future financial performance.

Q: What are the expectations for Noah Holdings' international business expansion? A: Grant Pan highlighted that the international business is a key focus, with significant growth in US dollar-denominated products. The company is expanding its local branches, strengthening relationship manager teams, and enhancing online services to improve offerings. The international business is expected to drive future revenue growth.

Q: How is Noah Holdings adapting to the evolving regulatory environment? A: Melo Xi mentioned that Noah Holdings is adjusting each business unit to adopt distinct service models to ensure compliance and improve operational efficiency. The company is focusing on refining domestic operations while expanding internationally, with a strategy to address diverse client needs through tailored products and services.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.