SHANGHAI – Noah Holdings Limited (NYSE: NYSE:), a leading provider of asset management services, reported a notable decline in revenue for the first quarter of 2024, with earnings per share (EPS) of RMB2.31.
The company’s revenue for the quarter amounted to RMB649.54 million, reflecting the challenges facing the asset management industry.
The company’s revenue saw a significant decline of 19.2% compared to the same quarter last year. This downturn was attributed to a decline in performance-based revenues from USD private equity products and recurring service fees from RMB private equity and private secondary products.
Despite this, Noah Holdings noted a 6.0% increase in one-time commissions from the previous year due to a 4.6% increase in revenue from the distribution of insurance products.
In Mainland China, the company experienced a sharp decline in net revenue of 28.8%, mainly due to lower recurring service costs from private equity and private secondary products. Foreign revenues also fell by 4.5%, mainly due to lower performance-based revenues from private equity products.
First quarter operating income plummeted 56.4% to RMB121.5 million (US$16.8 million), largely due to the combined effects of lower net income, higher compensation costs, including a new stock-based compensation program, and a substantial increase in operating income. General and administrative expenses.
Net profit attributable to Noah’s shareholders also fell 46.2% to RMB131.5 million (US$18.2 million), with a decline in operating income partially offset by an increase in interest income. Adjusted net income, excluding the effects of share-based compensation, decreased by 32.7% compared to the previous year.
Ms. Jingbo Wang, co-founder and chairman of Noah, acknowledged the impact of sluggish domestic markets, but also emphasized strategic overseas expansion efforts. “Excluding performance-based income, which was higher due to the high base effect of the same period last year, net income from our foreign operations increased 22.4% year-on-year,” she stated.
Noah’s asset management business distributed investment products worth RMB 18.9 billion (USD 2.6 billion) during the quarter, up 12.4% year-on-year, driven by a significant increase in the distribution of investment fund products. The company’s asset management business maintained stable assets under management of RMB 153.3 billion (US$21.2 billion).
The company’s strategic focus on central hub cities in China led to a reduced coverage network in mainland China, while the number of relationship managers fell by 16.4%. Despite this contraction, the number of foreign registered and active customers grew by 17.1% and 39.6% respectively year-on-year.
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