Core Insights - Noah Holdings Limited has launched a global wealth management platform, ARK Wealth Management, targeting global Chinese investors, with a recent summit held in Hong Kong [1] - The Black and Diamond Client Summit Series has been a key annual event for Noah, providing insights into macroeconomic trends and asset allocation strategies for fifteen years [2] - Noah has upgraded its internationally focused brands to enhance wealth management services for high-net-worth Chinese clients [3] Macroeconomic Trends - The summit featured discussions on global macroeconomic trends, digital asset investment strategies, and wealth inheritance, with over 20 industry leaders in attendance [4] - Michele Wucker emphasized the need for proactive risk management and viewing crises as opportunities for innovation [6] - Panel discussions highlighted the importance of addressing climate change and the implications of U.S. policy shifts, advocating for diversification in investment strategies [7] Investment Opportunities - The summit underscored the significance of long-term investments while balancing short-term opportunities through thorough market research [8] - AI is identified as a key growth sector, with expectations for significant investment opportunities in related technologies and infrastructure [9] - Digital assets are anticipated to perform well in the coming decade, driven by new policies and advancements in AI [10] Company Strategy - Noah has been investing in technology to enhance operational efficiency and client service, aiming to deliver high-quality personalized wealth management [11] - ARK Wealth Management currently manages over USD 8.7 billion in assets under advisement, with a focus on tailored financial services for high-net-worth clients [13]

Core Insights - Noah Holdings (NYSE: NOAH) is recognized as an excellent wealth manager with a growing and loyal client base, indicating strong business momentum [3]. Company Overview - The company has been noted for its ability to attract and retain clients, which is crucial for its growth strategy [3]. - Noah Holdings operates in the wealth management sector, focusing on emerging markets, which presents unique investment opportunities [3]. Investment Philosophy - The investment approach emphasizes finding bargains in any market, particularly in emerging markets, suggesting a strategic focus on undervalued assets [3]. - The company adopts an owner-mindset, prioritizing long-term value over short-term market fluctuations [3].

Financial Data and Key Metrics Changes - Total revenues for Q3 2024 were RMB 689 million, a decrease of 8.8% year-on-year but an increase of 11% sequentially, primarily due to a 32.6% year-on-year decrease in revenues from mainland China, partially offset by a 28.9% increase in overseas revenues [9][25] - Net revenues from overseas reached RMB 377 million, an increase of 28.9% year-on-year and 35.3% sequentially, accounting for over 50% of total group revenue for the first time [11][25] - Operating profit for the quarter was RMB 241 million, with an operating margin returning to 35% [31] Business Line Data and Key Metrics Changes - In the insurance brokerage segment, Glory Insurance Brokerage generated total revenue of RMB 9 million, a decline of 89.9% year-on-year due to adjustments in the sales team and product strategy [22] - Gopher Asset Management achieved total revenue of RMB 181 million, a decline of 17.3% year-on-year, focusing on exits for existing investments [20] - The Glory Family Heritage segment generated total revenue of RMB 145 million, an increase of 42.4% year-on-year and 44.1% sequentially [16] Market Data and Key Metrics Changes - The number of overseas registered clients exceeded 17,200, an increase of 20.9% year-on-year, with overseas active clients reaching 3,139, a 37.4% increase year-on-year [12][34] - US dollar AUM grew by 16% year-on-year to $5.6 billion, with US dollar AUA increasing by 5.7% year-on-year to $8.7 billion [29][15] Company Strategy and Development Direction - The company is pursuing a strategy of refining domestic operations while expanding internationally, focusing on high net worth clients and enhancing online service capabilities [6][8] - New brands have been launched to serve overseas Mandarin-speaking clients, including ARK Private Wealth and Olive Asset Management, targeting key markets such as Southeast Asia, Japan, Canada, the US, and Europe [8][11] - The company aims to become the preferred wealth management platform for global Mandarin-speaking investors [23] Management's Comments on Operating Environment and Future Outlook - Management noted that the recent policy changes and stock market rebound did not significantly impact Q3 results, but there is increased client interest and trading activity [42] - The company continues to advise clients to invest in global beta returns using their RMB assets, emphasizing a long-term asset allocation view [42] - Management expressed confidence in the transformation efforts and the potential for improved financial performance as the new sales model is refined [48][37] Other Important Information - The company announced a $50 million share repurchase program, indicating a belief that the stock remains undervalued [36] - Total transaction values in Q3 were RMB 14.3 billion, with US dollar denominated products accounting for 54.6% of total transaction value [28] Q&A Session Summary Question: Participation in Rising Equity Market Sentiment - Management acknowledged the excitement in the equity market but noted that Q3 results were not significantly impacted by recent policy changes, advising clients to focus on global investments [40][42] Question: Revenue Outlook and Customer Behavior Trends - Management indicated it is too early to confirm a turning point in revenue growth but noted that international expansion efforts are increasing, with a focus on US dollar investment opportunities [45][46] - There is a trend of clients being more willing to engage with the company for asset allocation advice, with a focus on safety, cash management, and growth strategies [48]

Core Viewpoint - Noah Holdings Limited reported solid growth in overseas net revenues and operating income, reflecting the success of its international expansion strategy and commitment to shareholder value through a share repurchase program [2][9]. Financial Performance - In Q3 2024, net revenues reached RMB 683.7 million (US$ 97.4 million), marking an 11.0% sequential increase driven by overseas business growth [3]. - Overseas net revenues amounted to RMB 376.9 million (US$ 53.7 million), representing a 28.9% year-over-year increase and a 35.3% sequential increase, accounting for over 55.1% of total net revenues [4]. - Income from operations was RMB 240.8 million (US$ 34.3 million), remaining flat year-over-year but increasing 79.7% sequentially, with an operating margin of 35.2%, up 13.5% sequentially [5]. Strategic Initiatives - The company accelerated its overseas expansion by launching wealth management services in key markets such as Southeast Asia, Japan, Canada, the United States, and Europe, while collaborating with global financial institutions [6]. - The team of overseas relationship managers expanded to 146, a significant 89.6% year-over-year increase, enhancing the company's service capabilities [7]. Shareholder Value - A US$50 million share repurchase program was authorized by the Board of Directors, reflecting the company's confidence in its long-term growth prospects and commitment to enhancing shareholder value [8]. Future Outlook - The company aims to monitor international market dynamics and client needs while optimizing global asset allocation strategies and service models, focusing on compliance and risk management [11]. - By fostering innovation and professional expertise, the company seeks to deliver high-quality wealth management services to global Mandarin-speaking high-net-worth clients [12].

Financial Performance - For Q3 2024, net income was RMB 683.7 million (USD 97.4 million), a decrease of 8.8% compared to Q3 2023, primarily due to a 33.0% decline in net income from mainland China, partially offset by a 28.9% increase in overseas net income [8]. - Net income from mainland China for Q3 2024 was RMB 306.8 million (USD 43.7 million), down 33.0%, mainly due to a 89.9% decrease in income from domestic insurance product distribution and a 17.3% decline in recurring service fees from private equity products [8]. - Overseas net income for Q3 2024 was RMB 376.9 million (USD 53.7 million), an increase of 28.9%, driven by a 42.5% rise in income from overseas investment products and a 42.4% increase in insurance product income [8]. - Shareholders' net income attributable to Noah for Q3 2024 was RMB 134.4 million (USD 19.2 million), a decrease of 42.4% year-over-year, primarily due to a 3.2% decline in operating income and a foreign exchange loss of approximately RMB 43.6 million [10]. - Non-GAAP net income attributable to Noah for Q3 2024 was RMB 150.5 million (USD 21.4 million), a decrease of 35.2% year-over-year, but an increase of 41.9% compared to Q2 2024 [11]. - The net profit margin for Q3 2024 was 20.2%, down from 30.9% in Q3 2023 [39]. - The company reported a net profit margin of 30.9% for the three months ended September 30, 2024, compared to 20.2% for the same period in 2023 [59]. - The adjusted net income attributable to Noah Holdings shareholders (non-GAAP) for the three months ended September 30, 2024, was RMB 150.5 million, a decrease of 35.2% from RMB 232.4 million [75]. Client Metrics - The number of registered clients as of September 30, 2024, was 460,380, an increase of 1.8% year-over-year, with overseas registered clients totaling 17,287, up 20.9% from the previous year [12]. - Active clients in Q3 2024 totaled 7,857, a decrease of 17.2% year-over-year, while overseas active clients numbered 3,139, an increase of 37.4% compared to Q3 2023 [12]. - The number of overseas financial advisors increased by 89.6% year-over-year to 146 as of September 30, 2024, and increased by 29.2% from June 30, 2024 [18]. - The number of registered overseas clients increased to 17,287, representing a growth of 20.9% from 14,296 clients [73]. - The overseas active client count rose to 3,139, marking a significant increase of 37.4% from 2,284 clients [73]. Revenue and Income Sources - Operating income for Q3 2024 was RMB 240.8 million (USD 34.3 million), a decrease of 3.2% year-over-year, primarily due to the 8.8% decline in net income, partially offset by an 11.6% reduction in operating costs and expenses [9]. - In Q3 2024, net income from fundraising fees was RMB 175.1 million ($25.0 million), a decrease of 11.8% compared to Q3 2023, primarily due to reduced distribution of domestic insurance products [28]. - Net income from management fees in Q3 2024 was RMB 251.0 million ($35.8 million), down 10.3% year-over-year, mainly due to a decrease in asset management scale in mainland China [28]. - Performance fee income in Q3 2024 was RMB 3.0 million ($0.4 million), a significant decrease of 65.8% compared to the same period last year, attributed to lower performance fees from private equity products [28]. - The company achieved a significant increase in insurance product revenue, with a growth of 89.9% to RMB 85,445 thousand compared to the previous year [71]. Asset Management - As of September 30, 2024, total assets under management amounted to RMB 150.1 billion (USD 21.4 billion), a decrease of 2.5% from June 30, 2024, and a decrease of 3.1% from September 30, 2023 [21]. - The asset management scale in mainland China was RMB 110.6 billion (USD 15.8 billion) as of September 30, 2024, down from RMB 119.5 billion as of September 30, 2023 [21]. - The overseas asset management scale reached RMB 39.5 billion (USD 5.6 billion) as of September 30, 2024, compared to RMB 35.4 billion as of September 30, 2023 [21]. - The total value of overseas investment products distributed was RMB 6.9 billion, with public fund products accounting for RMB 2.0 billion (28.1%) as of September 30, 2023 [17]. - The total value of distributed investment products in Q3 2024 was RMB 14.3 billion (USD 2 billion), a decrease of 36.1% year-over-year, primarily due to a 42.1% reduction in public fund product distribution [13]. Operational Costs and Expenses - Operating costs and expenses for Q3 2024 totaled RMB 442.9 million ($63.1 million), a decrease of 11.6% from Q3 2023 [31]. - The operating profit margin for Q3 2024 was 35.2%, compared to 33.2% in Q3 2023 [34]. - The company reported a total operating cost of RMB 442,872 thousand for the three months ending September 30, 2024 [63]. Strategic Developments - The company opened a new office in Japan to attract local Chinese-speaking clients and is actively evaluating opportunities in Canada, Australia, Southeast Asia, and Europe [25]. - The company anticipates continued growth in overseas client acquisition and asset management services in the upcoming quarters [73]. - The company aims to enhance its product offerings and services through investments in research and development [50]. Market Presence - The company operates in major cities including mainland China, Hong Kong, New York, Silicon Valley, Singapore, and Los Angeles [47]. - Noah's investment products include private equity, public market securities, and insurance products denominated in RMB and other currencies [47]. - Noah's American Depositary Shares (ADS) are listed on the New York Stock Exchange under the ticker "NOAH" [46]. Currency and Exchange Rates - The exchange rate used for converting RMB to USD is 7.0176 as of September 30, 2024 [48].

Revenue Performance - Net revenues for Q3 2024 were RMB683.7 million (US$97.4 million), an 8.8% decrease from Q3 2023, primarily due to a 33.0% decrease in revenues from mainland China, partially offset by a 28.9% increase from overseas[4] - Net revenues from mainland China were RMB306.8 million (US$43.7 million), a 33.0% decrease, driven by an 89.9% drop in domestic insurance product distribution revenue and a 17.3% decrease in recurring service fees from RMB private equity products[5] - Net revenues from overseas increased to RMB376.9 million (US$53.7 million), a 28.9% increase, mainly due to a 42.5% rise in offshore investment product revenue and a 42.4% increase in insurance product revenue[6] - Total revenues decreased by 8.8% year-over-year to RMB 688,702,000 for the three months ended September 30, 2024[74] - Net revenues from one-time commissions decreased by 11.8% to RMB175.1 million (US$25.0 million) due to lower distribution of domestic insurance products[31] - Net revenues from recurring service fees fell by 10.3% to RMB251.0 million (US$35.8 million), primarily due to a decrease in assets under management in mainland China[32] - Revenues from the Wealth Management Business decreased from RMB 550,822 million to RMB 466,898 million, a decline of 15.2%[85] Income and Profitability - Income from operations for Q3 2024 was RMB240.8 million (US$34.3 million), a 3.2% decrease year-over-year, but a 79.7% increase sequentially[7] - Net income attributable to shareholders for Q3 2024 was RMB134.4 million (US$19.2 million), a 42.4% decrease from Q3 2023, impacted by unrealized foreign exchange losses and increased income tax expenses[9] - Net income for Q3 2024 was RMB137.8 million (US$19.6 million), a 40.6% decrease from Q3 2023[46] - Non-GAAP net income attributable to shareholders for Q3 2024 was RMB150.5 million (US$21.4 million), a 35.2% decrease from Q3 2023[49] - The net margin attributable to Noah shareholders decreased from 31.1% to 19.7%[96] Client Metrics - Total number of registered clients as of September 30, 2024, was 460,380, a 1.8% increase year-over-year, with overseas registered clients increasing by 20.9%[12] - The number of registered clients reached 460,380 as of September 30, 2024[63] - The number of overseas registered clients grew by 20.9%, from 14,296 to 17,287[93] - The number of active clients decreased by 17.2%, from 9,489 to 7,857 during the same period[80] Assets and Management - Total assets under management as of September 30, 2024, were RMB150.1 billion (US$21.4 billion), a 2.5% decrease from June 30, 2024, and a 3.1% decrease from September 30, 2023[22] - Overseas assets under management increased to RMB39.5 billion (US$5.6 billion), up from RMB35.4 billion a year ago[23] - Cash and cash equivalents as of September 30, 2024, were RMB3,435.8 million (US$489.6 million), down from RMB4,604.9 million as of June 30, 2024[52] - Total current assets decreased to RMB 6,093,338,000, a decline from RMB 7,204,728,000[70] - The company’s total assets were reported at RMB 11,521,125,000, down from RMB 12,467,005,000[70] Operational Efficiency - Operating margin improved to 35.2% in Q3 2024, compared to 33.2% in Q3 2023[41] - Operating costs and expenses decreased by 11.6% to RMB 442,872,000, primarily due to a reduction in compensation and benefits[74] Strategic Initiatives - The company opened a new office in Japan to attract local Mandarin-speaking clients and is exploring opportunities in Canada, Australia, Southeast Asia, and Europe[29] - The company plans to focus on expanding its overseas business and enhancing its product offerings in the coming year[93] Investment Product Distribution - The aggregate value of investment products distributed in Q3 2024 was RMB14.3 billion (US$2.0 billion), a 36.1% decrease from Q3 2023, primarily due to a 42.1% decrease in mutual fund product distribution[14] - Total transaction value dropped by 36.1%, from RMB 22,316 million to RMB 14,258 million[80] - The transaction value of overseas investment products increased by 11.4%, from RMB 7.0 billion to RMB 7.8 billion[93] - One-time commissions from funds managed by Gopher increased significantly by 18,693.8% to RMB 6,014,000[74] - Recurring service fees from funds managed by Gopher decreased by 20.0% to RMB 236,638,000[74]

Core Viewpoint - Noah Holdings Limited reported a decline in net revenues for Q3 2024, primarily driven by a significant decrease in revenues from mainland China, although overseas revenues showed growth, indicating a shift in market dynamics and client demand for global asset allocation services [2][21][20]. Financial Performance - Net revenues for Q3 2024 were RMB683.7 million (US$97.4 million), an 8.8% decrease from Q3 2023 [2][21]. - Revenues from mainland China decreased by 33.0% to RMB306.8 million (US$43.7 million), while overseas revenues increased by 28.9% to RMB376.9 million (US$53.7 million) [3][4]. - Income from operations was RMB240.8 million (US$34.3 million), a 3.2% decrease year-over-year, but a 79.7% increase sequentially [7][20]. - Net income attributable to Noah shareholders was RMB134.4 million (US$19.2 million), a 42.4% decrease from Q3 2023 [8][33]. Revenue Breakdown - Wealth management revenues decreased by 15.3% to RMB465.0 million (US$66.2 million) [5]. - Asset management revenues increased by 9.2% to RMB208.9 million (US$29.7 million) [5]. - Other businesses remained flat at RMB9.8 million (US$1.4 million) [5]. Client Metrics - Total registered clients as of September 30, 2024, reached 460,380, a 1.8% increase year-over-year [10]. - The number of overseas registered clients increased by 20.9% to 17,287 [10]. - Active clients decreased by 17.2% to 7,857 compared to Q3 2023 [10]. Investment Products - The aggregate value of investment products distributed in Q3 2024 was RMB14.3 billion (US$2.0 billion), a 36.1% decrease from Q3 2023 [10][11]. - Distribution of overseas investment products increased by 11.4% to RMB7.8 billion (US$1.1 billion) [10]. Assets Under Management - Total assets under management as of September 30, 2024, were RMB150.1 billion (US$21.4 billion), a 2.5% decrease from June 30, 2024 [15][43]. - Mainland China assets under management were RMB110.6 billion (US$15.8 billion), while overseas assets were RMB39.5 billion (US$5.6 billion) [16]. Operational Updates - The company expanded its team of relationship managers to 146, a 89.6% increase year-over-year [20]. - A new office was opened in Japan to attract local Mandarin-speaking clients, with plans to explore other markets such as Canada and Europe [20].

Group 1 - Noah Holdings Ltd (NOAH) shares increased by 6.49% on October 2, reaching an intraday high of $14.07 before closing at $13.30, up from $12.49 [1] - The stock is currently 13.86% below its 52-week high of $15.44 and 86.27% above its 52-week low of $7.14 [1] - Trading volume was 566,960 shares, which is 247.3% of the average daily volume of 229,236 [1] Group 2 - The average one-year price target for Noah Holdings Ltd is $11.88, indicating a downside of 10.66% from the current price of $13.30 [2] - The average brokerage recommendation for Noah Holdings Ltd is 2.0, suggesting an "Outperform" status [2] - GuruFocus estimates the GF Value for Noah Holdings Ltd in one year to be $11.68, implying a downside of 12.18% from the current price [2]

Company Information The company's corporate governance structure was strengthened through board appointments and committee adjustments, with its main administrative office in Shanghai and listings on HKEX and NYSE [Board Members and Corporate Governance](index=3&type=section&id=Board%20Members%20and%20Corporate%20Governance) During the reporting period, the company's board underwent several personnel changes, including new non-executive and independent director appointments, to enhance governance and diversify expertise - Dr. Chen Zhiwu retired as an independent director and Mr. Yao Jinbo resigned as an independent director, effective June 30, 2024[5](index=5&type=chunk) - Mr. Zhang Tong was appointed as a non-executive director and independent director, also serving as a member of the Review Committee[5](index=5&type=chunk) - Ms. Li Xiangrong was appointed as an independent director and Chairperson of the Review Committee[5](index=5&type=chunk) [Company Registration and Contact Information](index=3&type=section&id=Company%20Registration%20and%20Contact%20Information) Noah Holdings Private Wealth Asset Management Limited's registered office is in the Cayman Islands, with its main administrative office in Shanghai and primary Hong Kong business location in Causeway Bay, listed on both HKEX and NYSE - Registered office: PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman Islands[6](index=6&type=chunk) - China principal executive office: No. 1226 Shenbin South Road, Minhang District, Shanghai, China[5](index=5&type=chunk) - HKEX stock code: 6686; NYSE stock code: NOAH[6](index=6&type=chunk) Financial Highlights The company experienced a significant decline in total revenue and net income, primarily due to reduced fundraising and performance-based fees, leading to a substantial drop in operating income [Key Financial Performance](index=4&type=section&id=Key%20Financial%20Performance) For the six months ended June 30, 2024, Noah Holdings saw significant declines in total revenue and net income, mainly due to reduced fundraising and performance-based fees, with operating income falling by nearly 60% year-on-year Key Financial Data for H1 2024 (RMB thousands) | Metric | 2023 (Unaudited) | 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue:** | | | | | Fundraising fee income | 570,092 | 313,149 | (45.1%) | | Management fees | 369,063 | 306,634 | (16.9%) | | Performance-based income | 7,758 | 10,043 | 29.5% | | Other service fees | 136,980 | 84,910 | (38.0%) | | Total revenue from Gopher-managed funds | 670,343 | 560,107 | (16.4%) | | **Total Revenue** | **1,754,236** | **1,274,843** | **(27.3%)** | | Net revenue | 1,745,230 | 1,265,389 | (27.5%) | | **Operating income** | **628,302** | **255,501** | **(59.3%)** | | Net income | 555,631 | 235,556 | (57.6%) | | Net income attributable to shareholders | 559,638 | 231,278 | (58.7%) | Operating Costs and Expenses for H1 2024 (RMB thousands) | Metric | 2023 (Unaudited) | 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Compensation and benefits | (755,208) | (685,795) | (9.2%) | | Selling expenses | (208,672) | (124,222) | (40.5%) | | General and administrative expenses | (109,683) | (151,018) | 37.7% | | Reversal of allowance for credit losses | 5,478 | 428 | (92.2%) | | Other operating expenses, net | (67,875) | (63,153) | (7.0%) | | Government subsidies | 19,032 | 13,872 | (27.1%) | | **Total operating costs and expenses** | **(1,116,928)** | **(1,009,888)** | **(9.6%)** | Executive Summary Amid global economic volatility and cautious investor sentiment, the company strengthened its market position by exiting domestic real estate and expanding its global product portfolio and overseas business [Business Summary](index=7&type=section&id=Business%20Summary) Amid global macroeconomic volatility and a slower-than-expected Chinese economic recovery, high-net-worth investors are cautious, prioritizing asset liquidity, safety, and global diversification, leading the company to strengthen its position through early exit from domestic real estate and active overseas expansion - The global macroeconomic environment is volatile, China's economic recovery is below expectations, and the real estate sector is sluggish, leading to negative sentiment among high-net-worth investors[10](index=10&type=chunk) - Chinese high-net-worth individuals are adopting more cautious asset allocation strategies, emphasizing liquidity, safety, and global diversification[11](index=11&type=chunk) - The company has solidified its industry position by strategically exiting domestic residential real estate assets early and adapting to market changes[11](index=11&type=chunk) - The company is actively repositioning its overseas business for sustainable long-term growth, aiming to establish a leading position among global Chinese high-net-worth investors[13](index=13&type=chunk) [Financial Summary](index=9&type=section&id=Financial%20Summary) During the reporting period, the company's net income and net income attributable to shareholders significantly decreased, primarily due to reduced insurance product distribution and compensation and benefits cost pressures; despite challenges, the company remains committed to overseas market investments, achieving growth in both overseas product fundraising and AUM Financial Performance for H1 2024 (RMB millions) | Metric | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Net revenue | 1,745.2 | 1,265.4 | (27.5%) | | Net income attributable to shareholders | 559.6 | 231.3 | (58.7%) | | Non-GAAP net income attributable to shareholders | 552.6 | 267.2 | (51.6%) | Overseas Business Growth (RMB billions) | Metric | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Overseas product fundraising volume | 10.9 | 16.3 | 49.3% | | Overseas product AUM | 34.2 | 39.1 | 14.3% | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) The company discloses non-GAAP financial measures, such as adjusted net income attributable to shareholders, to exclude the impact of share-based compensation and non-cash settlement expenses, aiming to provide clearer insights into underlying business trends and operating performance, while emphasizing they should not replace U.S. GAAP - Non-GAAP financial measures exclude the impact of share-based compensation expenses, non-cash settlement expenses (reversal), and related tax effects[20](index=20&type=chunk) - Management believes non-GAAP measures help investors understand underlying business trends and operating performance[21](index=21&type=chunk) - The company encourages investors to review all relevant financial information comprehensively, rather than relying on a single financial measure[21](index=21&type=chunk) Business Review and Outlook The company expanded its global footprint by investing in overseas products and services, achieving significant growth in overseas fundraising and AUM, while streamlining its domestic branch network [Business Review for the Reporting Period](index=11&type=section&id=Business%20Review%20for%20the%20Reporting%20Period) Amid cautious high-net-worth client investments, the company continued to invest in overseas products and services, expanding its global presence, with significant growth in overseas private equity and private credit fundraising, and an increased proportion of overseas AUM, while streamlining its domestic branch network - High-net-worth clients prioritize asset liquidity, safety, and global diversification, leading the company to strategically invest in overseas products and services to meet these demands[23](index=23&type=chunk) Key Overseas Business Metrics (H1 2024) | Metric | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Overseas revenue | - | - | Decreased by 18.1% | | Recurring management fees | - | - | Increased by 7.2% | | Overseas private equity/credit fundraising volume | - | USD 338 million | Increased by 40.2% | | Overseas product AUM | - | USD 5.4 billion | Increased by 14.3% | | Overseas AUM as percentage of total AUM | 21.8% | 25.4% | Increased | | Overseas active clients | - | - | Increased by 62.8% | - The number of domestic branches decreased from 75 to 15, aiming to reduce management expenses and concentrate resources[25](index=25&type=chunk) [Wealth Management Business](index=12&type=section&id=Wealth%20Management%20Business) During the reporting period, total revenue from wealth management business decreased by 34.0% year-on-year, primarily due to reduced insurance product distribution, lower service fees from private securities funds, and decreased performance-based fees from overseas private equity products; fundraising volume also declined due to reduced distribution of public and private securities funds Wealth Management Business Revenue Composition (RMB millions) | Revenue Type | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 1,336.7 | 881.8 | (34.0%) | | Fundraising fee income | 579.5 | 324.1 | (44.1%) | | Recurring service fees | 570.5 | 481.5 | (15.6%) | | Performance-based income | 77.3 | 11.1 | (85.7%) | | Other service fees | 109.4 | 65.1 | (40.5%) | - In H1 2024, wealth management fundraising volume was **RMB 33.3 billion**, a **5.4% year-on-year decrease**, primarily due to reduced distribution of public and private securities funds[26](index=26&type=chunk) [Asset Management Business](index=13&type=section&id=Asset%20Management%20Business) Total revenue from asset management business decreased by 4.3% year-on-year, mainly due to reduced management fees from RMB private equity products and performance-based fees from overseas private equity products; despite challenges, AUM remained largely stable, with overseas AUM growing by 14.3% Asset Management Business Revenue Composition (RMB millions) | Revenue Type | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 373.3 | 389.9 | (4.3%) | | Management fees | - | - | Decreased by 3.1% | | Performance-based income | - | - | Decreased by 9.2% | - As of June 30, 2024, AUM was **RMB 154.0 billion**, a slight **1.8% decrease** compared to June 30, 2023[28](index=28&type=chunk) - Overseas AUM reached **RMB 39.1 billion**, a **14.3% year-on-year increase**, primarily driven by expanded global general partner coverage and new financing for self-managed USD products[28](index=28&type=chunk) [Business Outlook](index=13&type=section&id=Business%20Outlook) Looking ahead, the company anticipates a challenging global macroeconomic environment; to address China's economic challenges, it will meet client overseas investment needs through QDII products and self-managed global discretionary products, while globally, expected Fed rate cuts will boost interest in alternative investments, prompting plans to expand its advisor team and strengthen international market presence in Southeast Asia, North America, and Europe - The global macroeconomic environment is expected to remain challenging in H2 2024, with China's economy facing weak consumption, real estate difficulties, and underperforming capital markets[30](index=30&type=chunk) - The company will meet client overseas investment demands through QDII public funds and self-managed global discretionary products[30](index=30&type=chunk) - Expected Fed rate cuts will increase client interest in alternative investment products, and the company plans to recruit **200-300 wealth advisors** to expand into Southeast Asia, North America, and European markets[31](index=31&type=chunk) Management Discussion and Analysis The company experienced a significant decline in total revenue due to reduced wealth management and asset management activities, while operating costs decreased overall, though administrative expenses rose [Revenue Analysis](index=14&type=section&id=Revenue%20Analysis) The company's total revenue decreased by 27.3% year-on-year, primarily due to reduced insurance product distribution in wealth management and lower performance-based fees from private equity products in asset management, with all business segments experiencing revenue declines, and wealth management showing the largest decrease Total Revenue by Business Segment (RMB thousands) | Business Segment | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Wealth Management Business | 1,336,684 | 881,754 | (34.0%) | | Asset Management Business | 389,930 | 373,272 | (4.3%) | | Other Businesses | 27,622 | 19,817 | (28.3%) | | **Total Revenue** | **1,754,236** | **1,274,843** | **(27.3%)** | - Wealth management fundraising fee revenue decreased by **44.1%**, primarily due to reduced insurance product distribution[37](index=37&type=chunk) - Asset management fundraising fee revenue decreased by **98.2%**, mainly due to reduced revenue from RMB private equity products[38](index=38&type=chunk) [Operating Costs and Expenses Analysis](index=16&type=section&id=Operating%20Costs%20and%20Expenses%20Analysis) The company's total operating costs and expenses decreased by 9.6% year-on-year, primarily due to cost control measures; while sales expenses in wealth management and compensation and benefits and sales expenses in asset management declined, general and administrative expenses increased due to new headquarters depreciation and legal costs Operating Costs and Expenses by Business Segment (RMB thousands) | Business Segment | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Wealth Management | 827,500 | 747,550 | (9.7%) | | Asset Management | 203,905 | 201,272 | (1.3%) | | Other Businesses | 85,523 | 61,066 | (28.6%) | | **Total operating costs and expenses** | **1,116,928** | **1,009,888** | **(9.6%)** | - Total compensation and benefits decreased by **9.2%**, with wealth management advisor compensation declining by **17.9%**[45](index=45&type=chunk) - Wealth management sales expenses decreased by **42.1%**, primarily due to reduced client activities[46](index=46&type=chunk) - Wealth management general and administrative expenses increased by **27.5%**, mainly due to increased depreciation expenses for the new headquarters[47](index=47&type=chunk) - Other operating expenses in asset management significantly increased, primarily due to Gopher's one-time payments as a general partner to its funds[49](index=49&type=chunk) [Earnings and Profit](index=19&type=section&id=Earnings%20and%20Profit) The company's operating income significantly decreased by 59.3% year-on-year, and net income declined by 57.6%; total other income increased, mainly due to higher interest income, but investment income from affiliates turned into a loss, negatively impacting net income Earnings and Profit (RMB thousands) | Metric | H1 2023 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Operating income | 628,302 | 255,501 | (59.3%) | | Total other income | 81,892 | 116,940 | 42.8% | | Investment income (loss) from affiliates | 5,230 | (53,942) | Not applicable | | Net income | 555,631 | 235,556 | (57.6%) | [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company primarily funds operations through cash generated from operating activities, with cash and cash equivalents totaling **RMB 4,604.9 million** as of June 30, 2024; it has no interest-bearing debt, and while the leverage ratio increased, the capital structure remains robust - As of June 30, 2024, cash and cash equivalents totaled **RMB 4,604.9 million**[57](index=57&type=chunk) - As of June 30, 2024, the company had no interest-bearing debt or pledged assets[29](index=29&type=chunk)[60](index=60&type=chunk)[69](index=69&type=chunk) Leverage Ratio | Metric | December 31, 2023 | June 30, 2024 | | :--- | :--- | :--- | | Leverage ratio (total liabilities/total assets) | 17.8% | 22.0% | [Contingent Liabilities and Capital Expenditures](index=21&type=section&id=Contingent%20Liabilities%20and%20Capital%20Expenditures) As of June 30, 2024, the company's contingent liabilities related to the unresolved Camsing incident amounted to **RMB 475.8 million**; capital expenditures significantly decreased year-on-year, primarily because the renovation and upgrade of the new headquarters were completed in 2023 Contingent Liabilities and Capital Expenditures (RMB millions) | Metric | December 31, 2023 | June 30, 2024 | | :--- | :--- | :--- | | Camsing incident contingent liabilities | 482.8 | 475.8 | | Capital expenditures (H1) | 157.6 | 34.7 | - The decrease in capital expenditures was primarily due to the completion of the company's headquarters renovation and upgrade in 2023[68](index=68&type=chunk) [Employees and Compensation](index=21&type=section&id=Employees%20and%20Compensation) As of June 30, 2024, the company had **2,222 employees** and continuously invests in employee training and education programs, offering competitive compensation and a performance-driven dynamic work environment to attract and retain talent Number of Employees by Function (as of June 30, 2024) | Function | Number of Employees | Percentage of Total | | :--- | :--- | :--- | | Mainland China Public Securities | 330 | 14.9% | | Mainland China Insurance | 156 | 7.0% | | Mainland China Private Equity | 240 | 10.8% | | Overseas Wealth Management | 233 | 10.5% | | Headquarters Business Development | 669 | 30.1% | | Headquarters Back-office Support | 467 | 21.0% | | **Total** | **2,222** | **100.0%** | - The company provides competitive compensation and a performance-driven dynamic work environment for employees, continuously investing in training and education programs[71](index=71&type=chunk)[72](index=72&type=chunk) Other Information This section details directors' and major shareholders' interests, share incentive schemes, corporate governance, use of global offering proceeds, significant litigation, and post-reporting period events [Directors' and Chief Executives' Interests](index=23&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests) As of June 30, 2024, the company's directors and chief executives held shares and related shares, with Ms. Wang Jingbo and Mr. Yin Zhe holding significant proportions through trust beneficiaries Directors' and Chief Executives' Shareholdings (as of June 30, 2024) | Name | Nature of Interest | Number of Shares/Related Shares (L) | Approximate Interest % | | :--- | :--- | :--- | :--- | | Ms. Wang Jingbo | Beneficiary of a trust | 68,386,755 | 20.68% | | Ms. Wang Jingbo | Beneficial owner | 325,000 | 0.09% | | Mr. Yin Zhe | Beneficiary of a trust | 17,180,335 | 5.19% | | Ms. Zhang Jiayu | Interest in a controlled corporation | 20,388,835 | 6.16% | | Mr. He Boquan | Interest in a controlled corporation | 16,398,720 | 4.95% | | Ms. Wu Yihong | Beneficial owner | 190,000 | 0.05% | [Major Shareholders' Interests](index=24&type=section&id=Major%20Shareholders'%20Interests) As of June 30, 2024, excluding directors and chief executives, major shareholders included Ark Trust (Singapore), Jing Investors Co., Ltd., Yiheng Capital Partners, L.P., and FIL Limited, holding significant proportions of the company's shares Major Shareholders' Shareholdings (as of June 30, 2024) | Name | Type/Nature of Interest | Number of Shares/Related Shares (L) | Approximate Interest % | | :--- | :--- | :--- | :--- | | Ark Trust (Singapore) | Trustee | 68,386,755 | 20.68% | | Jing Investors Co., Ltd. | Beneficial owner | 68,386,755 | 20.68% | | Magic Beams Enterprises Ltd. | Interest in a controlled corporation | 68,386,755 | 20.68% | | Yiheng Capital Partners, L.P. | Beneficial owner | 33,598,610 | 10.16% | | FIL Limited | Interest in a controlled corporation | 26,074,280 | 7.88% | | Jia Investment Co., Ltd. | Beneficial owner | 20,388,835 | 6.16% | | Mr. Shen Nanpeng | Interest in a controlled corporation | 16,500,000 | 4.99% | | Mr. Shen Nanpeng | Beneficial owner | 2,022,610 | 0.61% | [Share Incentive Schemes](index=25&type=section&id=Share%20Incentive%20Schemes) The company currently operates the 2022 Share Incentive Scheme and continues to manage outstanding awards under the 2017 scheme; during the reporting period, restricted share units were granted to directors and employees under the 2022 scheme, with detailed disclosures on changes in options and restricted shares across all plans - The company's currently effective scheme is the **2022 Share Incentive Scheme**, while the 2010 and 2017 schemes have terminated, but previously granted unexercised awards remain valid[81](index=81&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk)[90](index=90&type=chunk) - In H1 2024, **929,241 restricted share units** were granted to employees under the 2022 scheme, with **100,000** granted to directors[91](index=91&type=chunk) - As of June 30, 2024, total unrecognized compensation expense related to unvested restricted share awards was **RMB 121,207 thousand**, expected to be recognized over a weighted-average period of **2.65 years**[215](index=215&type=chunk) [2010 Share Incentive Scheme](index=25&type=section&id=2010%20Share%20Incentive%20Scheme) The 2010 Share Incentive Scheme was superseded by the 2017 scheme in 2017, ceasing new awards; as of June 30, 2024, there were no outstanding options or restricted shares issued and circulating under this plan - The **2010 Share Incentive Scheme** has terminated, with no outstanding options or restricted shares as of June 30, 2024[82](index=82&type=chunk)[83](index=83&type=chunk) [2017 Share Incentive Scheme](index=26&type=section&id=2017%20Share%20Incentive%20Scheme) The 2017 Share Incentive Scheme was superseded by the 2022 scheme in 2022, ceasing new awards, but previously granted unexercised awards remain valid; as of June 30, 2024, **8,750 options** were outstanding, and **315 restricted shares** were issued and circulating - The **2017 Share Incentive Scheme** has ceased granting new awards, but previously granted unexercised awards remain valid[84](index=84&type=chunk) - As of June 30, 2024, **8,750 options** were outstanding, and **315 restricted shares** were issued and circulating[84](index=84&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk) [2022 Share Incentive Scheme](index=28&type=section&id=2022%20Share%20Incentive%20Scheme) The 2022 Share Incentive Scheme became effective in December 2022; during the reporting period, a significant number of restricted share units were granted to directors and employees, with director grants approved by shareholders, and these awards include vesting schedules and performance assessment mechanisms - The **2022 Share Incentive Scheme** was adopted on December 16, 2022, and became effective on December 23, 2022[90](index=90&type=chunk) Changes in Restricted Share Units under 2022 Share Incentive Scheme (as of June 30, 2024) | Grantee Category | Unvested as of Jan 1 | Granted | Vested | Unvested as of June 30 | | :--- | :--- | :--- | :--- | :--- | | Directors | 4,444 | 100,000 | (25,888) | 39,556 | | Employees Total | 85,279 | 829,241 | (217,578) | 685,145 | | **Total** | **89,723** | **929,241** | **(243,466)** | **763,701** | - Vesting of restricted share units is subject to meeting predetermined thresholds for work performance evaluations and compliance with company internal policies[95](index=95&type=chunk) [Corporate Governance and Compliance](index=30&type=section&id=Corporate%20Governance%20and%20Compliance) The company is committed to maintaining high standards of corporate governance, complying with the Corporate Governance Code and the Model Code for Securities Transactions by Directors during the reporting period, with board member changes further strengthening the governance structure - The company has consistently complied with all code provisions of the Corporate Governance Code during the reporting period[98](index=98&type=chunk) - All directors and relevant employees confirmed compliance with the Model Code and the company's Securities Dealing Code during the reporting period[100](index=100&type=chunk) - Board member changes included the retirement of Dr. Chen Zhiwu and Mr. Yao Jinbo, the appointments of Mr. Zhang Tong and Ms. Li Xiangrong, and Ms. Meng Jinhong's appointment as a member of the Corporate Governance and Nomination Committee[101](index=101&type=chunk)[105](index=105&type=chunk) [Use of Proceeds from Global Offering](index=31&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company's net proceeds from the global offering were approximately **HKD 315.6 million**, with a portion utilized as disclosed in the prospectus; as of June 30, 2024, **HKD 178.8 million** had been used, with **HKD 136.9 million** remaining, and the timeline for funds allocated to potential investments was delayed - Net proceeds from the global offering were approximately **HKD 315.6 million**[104](index=104&type=chunk) Use of Proceeds from Global Offering (as of June 30, 2024, HKD millions) | Purpose | Percentage of Purpose | Net Proceeds | Unutilized as of Jan 1, 2024 | Utilized for the six months ended June 30, 2024 | Utilized as of June 30, 2024 | Unutilized as of June 30, 2024 | Expected Timeline for Unutilized Amounts | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expand wealth management business | 35% | 110.5 | 40.9 | 24.3 | 65.2 | 45.3 | Before end of 2024 | | Expand asset management business | 15% | 47.3 | 47.3 | – | 47.3 | – | – | | Selective potential investments | 20% | 63.1 | – | – | – | 63.1 | Before end of 2025 | | Invest in technology R&D | 10% | 31.6 | 6.4 | 15.2 | 21.6 | 10.0 | Before end of 2024 | | Expand overseas business | 10% | 31.6 | 14.2 | 12.1 | 26.3 | 5.3 | Before end of 2024 | | General corporate purposes | 10% | 31.6 | 9.7 | 8.7 | 18.4 | 13.2 | Before end of 2024 | | **Total** | **100%** | **315.6** | **118.5** | **60.3** | **178.8** | **136.9** | | - The timeline for funds allocated to selective potential investments has been delayed, as identifying suitable investment targets took longer than expected[107](index=107&type=chunk) [Significant Litigation and Settlement](index=32&type=section&id=Significant%20Litigation%20and%20Settlement) The company faces unresolved legal proceedings related to the Camsing incident, with claims exceeding **RMB 149.0 million**; in a prior civil lawsuit involving Noah (Shanghai) Financial Leasing Co., Ltd., the appeal upheld the first-instance ruling, and the company has paid a portion and applied for retrial with the Supreme People's Court; the company also voluntarily offered a settlement to affected Camsing clients, granting restricted share units - As of June 30, 2024, **44 investors** filed legal proceedings against Shanghai Gopher regarding the Camsing incident, with total claims exceeding **RMB 149.0 million**[110](index=110&type=chunk) - In a civil lawsuit involving Noah (Shanghai) Financial Leasing Co., Ltd., the appeal judgment upheld the first-instance ruling, and the company has paid **RMB 38.7 million** and applied for retrial with the Supreme People's Court of China[112](index=112&type=chunk)[232](index=232&type=chunk) - The company voluntarily offered a preferential settlement to clients affected by the Camsing incident; as of the reporting period, **6 clients** accepted the offer, and the company granted a total of **45,162 restricted share units**[113](index=113&type=chunk) [Post-Reporting Period Events and Dividends](index=31&type=section&id=Post-Reporting%20Period%20Events%20and%20Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2024; subsequent to the reporting period, the Board authorized a share repurchase program for up to **USD 50 million** of American Depositary Shares or shares, valid for two years - The Board does not recommend an interim dividend for the six months ended June 30, 2024[103](index=103&type=chunk) - Subsequent to the reporting period, the Board authorized a share repurchase program for up to **USD 50 million** of American Depositary Shares or shares, valid for two years[114](index=114&type=chunk) Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu has reviewed Noah Holdings' condensed consolidated financial statements for the six months ended June 30, 2024, in accordance with Hong Kong Standard on Review Engagements 2410; the review concluded that nothing indicated the financial statements were not prepared, in all material respects, in accordance with U.S. GAAP - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410[121](index=121&type=chunk)[122](index=122&type=chunk) - The review concluded that nothing indicated the condensed consolidated financial statements were not prepared, in all material respects, in accordance with U.S. GAAP[123](index=123&type=chunk) Condensed Consolidated Balance Sheets As of June 30, 2024, the company's total assets were **RMB 12,467,005 thousand** and total liabilities were **RMB 2,736,654 thousand**; cash and cash equivalents decreased, short-term investments significantly increased, and dividends payable rose substantially due to recent distributions [Condensed Consolidated Balance Sheets](index=35&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Summary of Condensed Consolidated Balance Sheets (RMB thousands) | Metric | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Cash and cash equivalents | 5,192,127 | 4,604,946 | (11.3%) | | Short-term investments | 379,456 | 1,287,400 | 239.3% | | Total assets | 12,685,378 | 12,467,005 | (1.7%) | | **Liabilities and Equity** | | | | | Dividends payable | – | 1,018,000 | Not applicable | | Contingent liabilities | 482,802 | 475,777 | (1.5%) | | Total liabilities | 2,257,815 | 2,736,654 | 21.2% | | Total shareholders' equity | 10,427,563 | 9,730,351 | (6.8%) | Condensed Consolidated Statements of Operations For the six months ended June 30, 2024, the company's total revenue decreased by 27.3% year-on-year, and net revenue declined by 27.5%; operating income significantly fell by 59.3%, net income decreased by 57.6%, and both basic and diluted earnings per share dropped to **RMB 0.66** [Condensed Consolidated Statements of Operations](index=37&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Summary of Condensed Consolidated Statements of Operations (RMB thousands) | Metric | H1 2023 (Unaudited) | H1 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 1,754,236 | 1,274,843 | (27.3%) | | Net revenue | 1,745,230 | 1,265,389 | (27.5%) | | Operating income | 628,302 | 255,501 | (59.3%) | | Net income | 555,631 | 235,556 | (57.6%) | | Net income attributable to shareholders | 559,638 | 231,278 | (58.7%) | | Basic earnings per share | 1.61 | 0.66 | (59.0%) | | Diluted earnings per share | 1.61 | 0.66 | (59.0%) | Condensed Consolidated Statements of Comprehensive Income For the six months ended June 30, 2024, the company's comprehensive income was **RMB 318,239 thousand**, a 53.1% year-on-year decrease; foreign currency translation adjustments contributed **RMB 82,683 thousand** to other comprehensive income [Condensed Consolidated Statements of Comprehensive Income](index=39&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Summary of Condensed Consolidated Statements of Comprehensive Income (RMB thousands) | Metric | H1 2023 (Unaudited) | H1 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Net income | 555,631 | 235,556 | (57.6%) | | Foreign currency translation adjustments | 123,918 | 82,683 | (33.3%) | | Total other comprehensive income, net of tax | 123,918 | 82,683 | (33.3%) | | Comprehensive income | 679,549 | 318,239 | (53.1%) | | Comprehensive income attributable to shareholders | 683,738 | 315,221 | (53.9%) | Condensed Consolidated Statements of Changes in Equity As of June 30, 2024, total shareholders' equity was **RMB 9,730,351 thousand**, a decrease from the beginning of the year; key changes included net income contribution, **RMB 1,018,000 thousand** in dividends distributed, increased share-based compensation, and a reduction in non-controlling interests [Condensed Consolidated Statements of Changes in Equity](index=40&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) Summary of Condensed Consolidated Statements of Changes in Equity (RMB thousands) | Metric | January 1, 2024 (Audited) | June 30, 2024 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Total equity attributable to Noah Holdings Limited shareholders | 10,310,334 | 9,667,069 | (643,265) | | Non-controlling interests | 117,229 | 63,282 | (53,947) | | **Total Shareholders' Equity** | **10,427,563** | **9,730,351** | **(697,212)** | | Net income | – | 231,278 | 231,278 | | Dividends declared and distributed | – | (1,018,000) | (1,018,000) | | Share-based compensation | – | 58,479 | 58,479 | | Other comprehensive income (loss) – foreign currency translation adjustments | – | 83,943 | 83,943 | | Decrease in non-controlling interests | – | (51,835) | (51,835) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2024, net cash used in operating activities was **RMB (132,150) thousand**, net cash used in investing activities was **RMB (607,279) thousand**, and net cash used in financing activities was **RMB (56,877) thousand**, resulting in a net decrease in cash, cash equivalents, and restricted cash [Condensed Consolidated Statements of Cash Flows](index=42&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summary of Condensed Consolidated Statements of Cash Flows (RMB thousands) | Metric | H1 2023 (Unaudited) | H1 2024 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Net cash provided by/(used in) operating activities | 721,611 | (132,150) | (853,761) | | Net cash used in investing activities | (352,246) | (607,279) | (255,033) | | Net cash provided by/(used in) financing activities | 2,619 | (56,877) | (59,496) | | Effect of exchange rate changes | 84,588 | 59,267 | (25,321) | | Net increase (decrease) in cash, cash equivalents and restricted cash | 456,572 | (737,040) | (1,193,612) | | Cash, cash equivalents and restricted cash - end of period | 4,891,189 | 4,617,020 | (274,169) | Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations of the company's accounting policies, financial statement line items, and other disclosures, including organization, revenue recognition, fair value measurements, and contingencies [1. Organization and Principal Activities](index=45&type=section&id=1.%20Organization%20and%20Principal%20Activities) Noah Holdings is a leading wealth management service provider in China, primarily offering global investment and asset allocation advisory services to high-net-worth investors; as of June 30, 2024, the Group operates through over **200 subsidiaries** and key consolidated variable interest entities, such as Noah Investment and Gopher Asset Management - The Group is a pioneer and leading wealth management service provider in China, primarily targeting high-net-worth investors[145](index=145&type=chunk) - As of June 30, 2024, the Group conducts business operations through **over 200 subsidiaries**[146](index=146&type=chunk) - Key consolidated variable interest entities include Noah Investment, Gopher Asset Management Co., Ltd., among others, controlled through contractual arrangements[147](index=147&type=chunk) [2. Summary of Significant Accounting Policies](index=48&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the basis of preparation for the Group's condensed consolidated financial statements, including adherence to U.S. GAAP, retrospective adjustments for share splits, consolidation principles (including VIEs and investment funds), application of key accounting estimates, concentration of credit risk, and revenue recognition policies - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and have been retrospectively adjusted for the share split[148](index=148&type=chunk)[150](index=150&type=chunk) - The Group controls variable interest entities through contractual arrangements and assesses whether investment funds are VIEs and if it is the primary beneficiary to determine consolidation[152](index=152&type=chunk)[154](index=154&type=chunk) - Revenue recognition follows ASC 606 guidance, with primary revenue streams including fundraising fees, management fees, and performance-based fees, detailing recognition timing and variable consideration treatment[164](index=164&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - The Expected Credit Loss (CECL) model is used to assess allowance for credit losses on financial instruments, with continuous monitoring of industry regulatory changes for their anticipated financial impact[178](index=178&type=chunk) [2(a) Basis of Presentation](index=48&type=section&id=2(a)%20Basis%20of%20Presentation) The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and comply with Hong Kong Listing Rules and Companies Ordinance requirements; all share and per-share amounts have been retrospectively adjusted to reflect the 1-for-10 share split effective October 26, 2023 - The condensed consolidated financial statements are prepared in accordance with U.S. GAAP and comply with the Hong Kong Listing Rules and Companies Ordinance requirements[148](index=148&type=chunk) - All share and per-share amounts have been retrospectively adjusted to reflect the 1-for-10 share split effective October 26, 2023[150](index=150&type=chunk) [2(b) Principles of Consolidation](index=49&type=section&id=2(b)%20Principles%20of%20Consolidation) The Group consolidates its subsidiaries and variable interest entities, controlling asset management businesses in China through contractual arrangements; for investment funds, the Group assesses whether they are VIEs and if it is the primary beneficiary to determine consolidation; as of June 30, 2024, VIEs contributed **27.0%** of consolidated net revenue and **1.2%** of net income - The Company conducts asset management business and consolidates the financial results of its Chinese subsidiaries and variable interest entities through contractual arrangements[153](index=153&type=chunk) - For investment funds, the Group assesses whether they are variable interest entities and determines if it is the primary beneficiary to decide on consolidation[154](index=154&type=chunk)[155](index=155&type=chunk) VIE Contribution (for the six months ended June 30, 2024) | Metric | Contribution Ratio | | :--- | :--- | | Consolidated net revenue | 27.0% | | Consolidated net income | 1.2% | [2(e) Revenue Recognition](index=54&type=section&id=2(e)%20Revenue%20Recognition) The Group recognizes revenue under ASC 606 guidance, with primary revenue streams including fundraising fees (fund distribution and insurance brokerage), management fees, and performance-based fees; fundraising fees are recognized upon investment product establishment or insurance contract effectiveness, management fees are recognized daily, and performance-based fees are recognized when significant reversal is improbable; the Group also applies practical expedients for sales commissions and unfulfilled performance obligations - Revenue recognition follows ASC 606 guidance, involving the identification of contracts, performance obligations, allocation of transaction prices, and timing of revenue recognition[164](index=164&type=chunk) - Fundraising fee revenue is recognized upon investment product establishment or insurance contract effectiveness, management fees are recognized daily, and performance-based fees are recognized when significant reversal is improbable[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - The Group applies practical expedients, expensing sales commissions and not disclosing the value of unfulfilled performance obligations for certain revenue streams[176](index=176&type=chunk) [2(g) Allowance for Credit Losses](index=59&type=section&id=2(g)%20Allowance%20for%20Credit%20Losses) The Group assesses financial instruments measured at amortized cost (e.g., loans receivable, amounts due from related parties, accounts receivable) using the Expected Credit Loss (CECL) model; loan loss allowances are estimated using probability of default and loss given default, while allowances for accounts receivable and other financial assets are assessed by grouping based on risk characteristics, considering historical experience, current economic conditions, and future forecasts - The Group uses the Expected Credit Loss (CECL) model to estimate credit losses for financial instruments measured at amortized cost[178](index=178&type=chunk) - Loan loss allowances are estimated using assumptions for probability of default and loss given default, considering collateral value, loan term, and historical loss data[179](index=179&type=chunk) - Allowances for accounts receivable and other financial assets are assessed by grouping based on risk characteristics, considering historical credit loss experience, current economic conditions, and future forecasts[180](index=180&type=chunk) Changes in Allowance for Credit Losses (RMB thousands) | Asset Class | Beginning of 2023 | Beginning of 2024 | End of 2024 | | :--- | :--- | :--- | :--- | | Amounts due from related parties | 25,666 | 23,394 | 22,019 | | Accounts receivable | 3,647 | 6,862 | 12,993 | [3. Earnings Per Share](index=62&type=section&id=3.%20Earnings%20Per%20Share) For the six months ended June 30, 2024, the company's basic and diluted earnings per share were both **RMB 0.66**, a significant decrease from **RMB 1.61** in the prior year period; the calculation included shares issuable to Camsing incident investors and excluded anti-dilutive instruments Earnings Per Share (RMB) | Metric | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Basic earnings per share | 1.61 | 0.66 | | Diluted earnings per share | 1.61 | 0.66 | - Shares issuable to Camsing incident investors have been included in the calculation of basic earnings per share[182](index=182&type=chunk) - Diluted earnings per share did not include anti-dilutive instruments such as stock options and unvested restricted share awards under share incentive schemes[183](index=183&type=chunk)[184](index=184&type=chunk) [4. Accounts Receivable, Net](index=63&type=section&id=4.%20Accounts%20Receivable,%20Net) As of June 30, 2024, the company's net accounts receivable amounted to **RMB 429,417 thousand**, a decrease from December 31, 2023; **90.6%** of these receivables are due within one year Accounts Receivable, Net (RMB thousands) | Metric | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Total accounts receivable | 510,840 | 442,410 | | Allowance for credit losses | (6,862) | (12,993) | | **Accounts Receivable, Net** | **503,978** | **429,417** | - As of June 30, 2024, **90.6%** of the accounts receivable balance is due within one year[63](index=63&type=chunk)[185](index=185&type=chunk) [5. Investments](index=64&type=section&id=5.%20Investments) As of June 30, 2024, the company's total investments were **RMB 2,029,722 thousand**, a significant increase from December 31, 2023; held-to-maturity investments and time deposits within short-term investments grew substantially, while long-term investments slightly decreased; consolidated investment funds reflect their investments at fair value Total Investments (RMB thousands) | Investment Type | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Total short-term investments | 379,456 | 1,287,400 | | Total long-term investments | 810,484 | 742,322 | | **Total Investments** | **1,189,940** | **2,029,722** | - Held-to-maturity investments and time deposits within short-term investments increased from **RMB 158,728 thousand** to **RMB 952,194 thousand**[186](index=186&type=chunk) - Consolidated investment funds reflect their investments at fair value, with unrealized gains and losses recognized in the condensed consolidated statements of operations[187](index=187&type=chunk) [6. Fair Value Measurements](index=65&type=section&id=6.%20Fair%20Value%20Measurements) The company uses fair value measurements for various assets, categorized into three levels based on active market quotes, observable inputs, and unobservable inputs; as of June 30, 2024, trading debt securities and some equity securities are classified as Level 1, certain consolidated investment funds and asset management schemes as Level 2, and private equity funds as Level 3, with their valuations involving subjective judgments and assumptions - Trading debt securities and short-term equity securities measured at fair value are classified as Level 1[190](index=190&type=chunk) - Bond products and asset management schemes held by consolidated investment funds not traded in active markets are classified as Level 2[191](index=191&type=chunk) - Private equity funds are classified as Level 3, with their valuations using market comparable analysis, involving subjective judgments and unobservable inputs[192](index=192&type=chunk) Changes in Level 3 Investments (RMB thousands) | Metric | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Beginning balance | 546,543 | 557,074 | | Transfers from Level 2 to Level 3 | 15,777 | 15,777 | | Fair value changes recognized in investment income | (1,210) | (1,210) | | Settlements | (10,682) | (10,682) | | Exchange adjustments | 6,646 | 6,646 | [7. Investments in Affiliates](index=69&type=section&id=7.%20Investments%20in%20Affiliates) As of June 30, 2024, the company's total investments in affiliates were **RMB 1,445,356 thousand**, a slight decrease; key investments include Kunshan Jingzhao, Wanjia Gongying, and various private equity funds-of-funds and real estate funds where Gopher acts as general partner or fund manager, all accounted for using the equity method Investments in Affiliates Balance (RMB thousands) | Investment Type | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Kunshan Jingzhao | 8,690 | 8,370 | | Wanjia Gongying | 89,249 | 88,014 | | Funds where Gopher acts as general partner | 1,412,766 | 1,337,304 | | **Total** | **1,526,544** | **1,445,356** | - The Group invests in private equity funds-of-funds, real estate funds, and other funds where Gopher acts as general partner or fund manager, and these are accounted for using the equity method[196](index=196&type=chunk) [8. Property and Equipment, Net](index=71&type=section&id=8.%20Property%20and%20Equipment,%20Net) As of June 30, 2024, the company's net property and equipment amounted to **RMB 2,416,072 thousand**, a slight decrease; depreciation expense was **RMB 81,638 thousand**, and a loss of **RMB 4,741 thousand** was recognized from the disposal of property and equipment Property and Equipment, Net (RMB thousands) | Metric | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Buildings | 2,478,634 | 2,478,741 | | Accumulated depreciation | (581,306) | (628,329) | | **Property and Equipment, Net** | **2,482,199** | **2,416,072** | - For the six months ended June 30, 2024, depreciation expense was **RMB 81,638 thousand**, and a loss of **RMB 4,741 thousand** was recognized from the disposal of property and equipment[198](index=198&type=chunk) [9. Other Current Liabilities](index=72&type=section&id=9.%20Other%20Current%20Liabilities) As of June 30, 2024, the company's total other current liabilities were **RMB 420,527 thousand**, a significant decrease from December 31, 2023; key reductions included accrued payroll and benefits expenses, amounts payable to individual investors in other businesses, and litigation payables Composition of Other Current Liabilities (RMB thousands) | Metric | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Accrued expenses | 94,044 | 46,160 | | Customer prepayments | 30,172 | 32,753 | | Amounts payable to individual investors in other businesses | 188,697 | 15,877 | | Amounts payable for property and equipment purchases | 37,018 | 37,848 | | Litigation payables | 99,000 | 60,319 | | **Total** | **681,802** | **420,527** | [10. Revenue](index=73&type=section&id=10.%20Revenue) For the six months ended June 30, 2024, the company's total revenue was **RMB 1,274,843 thousand**, a 27.3% year-on-year decrease; wealth management revenue declined by 34.0%, and asset management revenue by 4.3%; both revenue recognized at a point in time and over time decreased; by product type, both mainland China and overseas revenues decreased, with mainland China insurance product revenue significantly declining Revenue by Segment (RMB thousands) | Business Segment | H1 2023 (Unaudited) | H1 2024 (Unaudited) | Change (%) | | :--- | :--- | :--- | :--- | | Wealth Management Business | 1,336,684 | 881,754 | (34.0%) | | Asset Management Business | 389,930 | 373,272 | (4.3%) | | Other Businesses | 27,622 | 19,817 | (28.3%) | | **Total Revenue** | **1,754,236** | **1,274,843** | **(27.3%)** | Revenue by Timing of Recognition (RMB thousands) | Timing of Recognition | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue recognized at a point in time | 801,798 | 435,683 | | Revenue recognized over time | 952,438 | 839,160 | | **Total Revenue** | **1,754,236** | **1,274,843** | Revenue by Product Type (RMB thousands) | Product Type | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Mainland China public securities products | 309,004 | 237,891 | | Mainland China private equity products | 451,208 | 393,596 | | Mainland China insurance products | 236,745 | 30,616 | | Overseas investment products | 323,913 | 266,757 | | Overseas insurance products | 292,623 | 250,799 | | **Total Revenue** | **1,754,236** | **1,274,843** | [11. Income Taxes](index=75&type=section&id=11.%20Income%20Taxes) The company has tax arrangements in the Cayman Islands, Hong Kong, and mainland China; the mainland China corporate income tax rate is 25%, with some companies enjoying preferential rates; for the six months ended June 30, 2024, income tax expense was **RMB 82,943 thousand**, and the effective income tax rate was **22.27%** - The Cayman Islands has no income or capital gains tax, while Hong Kong subsidiaries are taxed at **8.25% or 16.5%**[205](index=205&type=chunk)[206](index=206&type=chunk) - The corporate income tax rate in mainland China is **25%**, with Zigong Noah Financial Services Co., Ltd. and Shanghai Nuorong Information Technology Co., Ltd. enjoying a **15% preferential tax rate**[207](index=207&type=chunk) Income Tax Expense (RMB thousands) | Metric | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Current tax | 182,665 | 69,177 | | Deferred tax | (22,872) | 13,766 | | **Total** | **159,793** | **82,943** | | Effective income tax rate | 22.50% | 22.27% | [12. Loans Receivable, Net](index=76&type=section&id=12.%20Loans%20Receivable,%20Net) As of June 30, 2024, the company's net loans receivable amounted to **RMB 207,122 thousand**, a decrease from December 31, 2023; overdue loans still represent a high proportion, but the allowance for credit losses decreased; most loans are short-term and secured by collateral Loans Receivable, Net (RMB thousands) | Metric | December 31, 2023 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Within credit period | 98,925 | 36,092 | | Overdue | 267,506 | 244,519 | | Total loans receivable | 366,431 | 280,611 | | Allowance for credit losses | (79,510) | (73,489) | | **Loans Receivable, Net** | **286,921** | **207,122** | - As of June 30, 2024, loan interest rates ranged from **3.9% to 15%**, with most loans being short-term and secured by collateral[209](index=209&type=chunk) Changes in Allowance for Loan Losses (RMB thousands) | Metric | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Beginning allowance for loan losses | 93,859 | 79,510 | | Reversal of allowance for loan losses | (1,689) | (3,926) | | Write-offs | (3,931) | (2,153) | | **Ending allowance for loan losses** | **88,239** | **73,489** | [13. Leases](index=77&type=section&id=13.%20Leases) As of June 30, 2024, the company's operating lease right-of-use assets were **RMB 102,301 thousand**, and total operating lease liabilities were **RMB 102,538 thousand**; operating lease expense was **RMB 35,268 thousand**, with a weighted-average remaining lease term of **2.87 years** Lease-Related Data (RMB thousands) | Metric | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Operating lease right-of-use assets | 139,019 | 102,301 | | Total operating lease liabilities | 138,359 | 102,538 | | Weighted-average remaining lease term (years) | 2.70 | 2.87 | | Weighted-average discount rate | 4.73% | 4.71% | - For the six months ended June 30, 2024, operating lease expense was **RMB 35,268 thousand**[211](index=211&type=chunk) [14. Share-Based Compensation](index=78&type=section&id=14.%20Share-Based%20Compensation) For the six months ended June 30, 2024, the company's total share-based compensation was **RMB 58,479 thousand**, primarily from unvested restricted share awards; the company granted restricted share units to employees and directors under the 2022 Share Incentive Scheme, with related unrecognized compensation expense expected to be recognized over the next **2.65 years** Share-Based Compensation (RMB thousands) | Award Type | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Stock options | (3,318) | 9 | | Unvested restricted share awards | (5,926) | 58,470 | | **Total** | **(9,244)** | **58,479** | - For the six months ended June 30, 2024, **929,241 restricted share units** were granted to employees under the 2022 Share Incentive Scheme, with **100,000** granted to directors[215](index=215&type=chunk) - As of June 30, 2024, total unrecognized compensation expense related to unvested restricted share awards was **RMB 121,207 thousand**, expected to be recognized over a weighted-average period of **2.65 years**[215](index=215&type=chunk) [15. Camsing Settlement](index=79&type=section&id=15.%20Camsing%20Settlement) To maintain relationships with affected investors, the company voluntarily offered a Camsing incident settlement plan, granting restricted share units to accepting investors; as of June 30, 2024, **601 investors** accepted the settlement, representing **76.3%** of the total outstanding investment; during the reporting period, the company recognized a gain of **RMB 11.5 million** due to the reversal of settlement expenses - The company voluntarily offered a preferential settlement to investors affected by the Camsing incident, granting restricted share units in exchange for waiving legal rights[217](index=217&type=chunk) - As of June 30, 2024, **601 (approximately 73.5%)** of **818 investors** accepted the settlement, representing **RMB 2.6 billion** of the total outstanding investment of **RMB 3.4 billion**[218](index=218&type=chunk) - For the six months ended June 30, 2024, the company recognized a gain of **RMB 11.5 million** due to the reversal of settlement expenses[218](index=218&type=chunk) [16. Employee Benefit Plans](index=79&type=section&id=16.%20Employee%20Benefit%20Plans) Most of the company's full-time employees participate in government-mandated multi-employer defined contribution plans in China, including pension, medical, and unemployment insurance; for the six months ended June 30, 2024, total employee benefit contributions were **RMB 131,225 thousand** - Most of the company's full-time employees participate in government-mandated multi-employer defined contribution plans in China, including pension insurance, unemployment insurance, maternity insurance, work-related injury insurance, medical insurance, and housing provident funds[219](index=219&type=chunk) - For the six months ended June 30, 2024, total employee benefit contributions were **RMB 131,225 thousand**[219](index=219&type=chunk) [17. Segment Information](index=80&type=section&id=17.%20Segment%20Information) The company primarily operates in three reportable segments: wealth management, asset management, and other businesses; for the six months ended June 30, 2024, both wealth management and asset management segments experienced declines in revenue and operating income, while other businesses recorded an operating loss; revenue is primarily derived from mainland China and Hong Kong - The company primarily operates in three reportable segments: wealth management, asset management, and other businesses[220](index=220&type=chunk) Revenue and Operating Income by Business Segment (RMB thousands) | Metric | Wealth Management Business | Asset Management Business | Other Businesses | Total | | :--- | :--- | :--- | :--- | :--- | | **H1 2024 Revenue** | | | | | | Total revenue | 881,754 | 373,272 | 19,817 | 1,274,843 | | Net revenue | 878,306 | 372,670 | 14,413 | 1,265,389 | | **H1 2024 Operating Income** | | | | | | Operating income (loss) | 130,756 | 171,398 | (46,653) | 255,501 | Revenue by Geographic Region (RMB thousands) | Region | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Mainland China | 1,039,337 | 689,454 | | Overseas | 714,899 | 585,389 | | **Total Revenue** | **1,754,236** | **1,274,843** | [18. Related Party Transactions](index=84&type=section&id=18.%20Related%20Party%20Transactions) The company engages in transactions with multiple related parties, including Gopher Asset-managed funds and Gopher Capital GP Ltd.-managed funds; for the six months ended June 30, 2024, total related party transaction revenue was **RMB 565,195 thousand**, primarily from management fees; total trade and non-trade amounts due from related parties were **RMB 418,074 thousand** and **RMB 48,882 thousand**, respectively - Key related parties include Sequoia Capital Investment Management (Tianjin) Co., Ltd., Wanjia Gongying, Gopher Asset-managed funds, among others[226](index=226&type=chunk) Related Party Transaction Revenue (RMB thousands) | Revenue Type | H1 2023 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Fundraising fee income | 11,878 | 10,956 | | Total management fees | 562,901 | 521,982 | | Total performance-based income | 103,960 | 32,257 | | **Total** | **678,739** | **565,195** | Amounts Due from Related Parties (RMB thousands) | Type | December 31, 2023 (Audited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Total trade amounts due from related parties | 331,531 | 418,074 | | Total non-trade amounts due from related parties | 85,754 | 48,882 | [19. Contingencies](index=87&type=section&id=19.%20Contingencies) The company faces contingent liabilities of **RMB 475.8 million** related to the Camsing incident, along with legal proceedings from **44 investors** claiming over **RMB 149.0 million**; in a prior civil lawsuit involving Noah (Shanghai) Financial Leasing Co., Ltd., the appeal upheld the first-instance ruling, and the company had reserved **RMB 99.0 million** in contingent liabilities and made partial payments - As of June 30, 2024, the company's contingent liabilities related to the unresolved Camsing incident amounted to **RMB 475.8 million**[230](index=230&type=chunk) - Legal proceedings filed by **44 investors** against Shanghai Gopher and/or its affiliates remain unresolved, with total claims exceeding **RMB 149.0 million**[230](index=230&type=chunk) - In a civil lawsuit involving Noah (Shanghai) Financial Leasing Co., Ltd., the appeal judgment upheld the first-instance ruling, and the company had reserved **RMB 99.0 million** in contingent liabilities and paid **RMB 38.7 million**[232](index=232&type=chunk) [20. Dividends](index=88&type=section&id=20.%20Dividends) Total 2023 final dividend and special non-recurring dividend declared during the interim period, approximately **RMB 1,018.0 million**, remained unpaid as of June 30, 2024, but were fully distributed on August 29, 2024; the company does not recommend any interim dividend for the six months ended June 30, 2024 - Total 2023 final dividend and special non-recurring dividend declared during the interim period, approximately **RMB 1,018.0 million**, were fully distributed on August 29, 2024[234](index=234&type=chunk) - The company does not recommend any interim dividend for the six months ended June 30, 2024[234](index=234&type=chunk) [21. Adjustments between U.S. GAAP and IFRS](index=89&type=section&id=21.%20Adjustments%20between%20U.S.%20GAAP%20and%20IFRS) This section details the main differences and adjustment impacts between U.S. GAAP and IFRS in financial statement preparation, primarily concerning the classification of cash and cash equivalents, recognition of share-based compensation, and deferred income tax treatment arising from asset acquisitions - Under IFRS, deposits in money market funds are classified as short-term investments, not cash equivalents[241](index=241&type=chunk) - Share-based compensation under IFRS features graded vesting, leading to accelerated expense recognition, differing from the straight-line method under U.S. GAAP[242](index=242&type=chunk) - Under IFRS, deferred tax liabilities are not recognized for taxable temporary differences arising from non-business acquisitions, which differs from U.S. GAAP[243](index=243&type=chunk)[244](index=244&type=chunk) Definitions and Acronyms This section provides definitions for key terms and acronyms used in the interim report, covering company names, share incentive schemes, financial metrics, regulatory bodies, and geographical regions, to ensure clear understanding of the report content - This section provides definitions for key terms and acronyms used in the report, including share incentive schemes (e.g., **2022 Share Incentive Scheme**), financial metrics (e.g., **AUM**, **fundraising volume**), and regulatory bodies (e.g., **HKEX**, **SEC**)[245](index=245&type=chunk)[247](index=247&type=chunk)[249](index=249&type=chunk)[252](index=252&type=chunk)

Core Viewpoint - Noah Holdings Limited's Q2 2024 results were disappointing, missing consensus estimates, but the company has announced a new share buyback program that could enhance shareholder yield to a mid-teens percentage range [1][7]. Financial Performance - Noah Holdings reported Q2 2024 revenue of RMB 615.8 million and a net profit of RMB 99.8 million, which were -4% and -17% below consensus estimates of RMB 642.0 million and RMB 120.0 million, respectively [3]. - Year-over-year, the company's revenue and net income fell by -35% and -68%, respectively [3]. - Revenue from Mainland China and international operations dropped by -39% YoY and -29% YoY, amounting to RMB 337.2 million and RMB 278.6 million, respectively [3]. Business Challenges - The company has temporarily suspended the distribution of domestic insurance products due to concerns over the underlying asset quality of insurance firms in Mainland China [3]. - The slowdown in revenue from global insurance products is attributed to a competitive market environment [3]. - Management indicated that both domestic and international businesses are facing challenges from a shift away from riskier insurance offerings and increased competition [3]. Cost Management - Noah Holdings implemented cost control measures, including streamlining its branch network, resulting in a -19% decline in total operating expenses [4]. - Despite these measures, the decline in revenue led to a contraction in operating profit margin and net margin by -15.3 percentage points and -16.4 percentage points YoY, respectively [4]. Share Buyback Program - The company announced a two-year $50 million share buyback plan, which is expected to enhance return on equity (ROE) and capital allocation efficiency [5][6]. - Noah Holdings is currently trading at a low trailing price-to-book (P/B) multiple of 0.35 times, with a recent ROE of 10.3%, lower than its historical average of 14.2% [6]. - The potential annualized buyback yield could reach 5%, and adjusted forward dividend yields for FY 2024 and FY 2025 are estimated to be in the range of 9.0%-9.5% [6]. Conclusion - While Noah Holdings' Q2 2024 results were below expectations and a quick turnaround seems unlikely, the new share buyback program could provide an attractive shareholder yield in the mid-teens percentage range [7].