NOAH HOLDINGS(NOAH) - 2019 Q4 - Annual Report

Financial Performance - Net cash provided by operating activities in 2019 was RMB1,288.2 million (US$185.0 million), up from RMB1,029.4 million in 2018[320] - Net cash used in investing activities in 2019 was RMB182.0 million (US$26.1 million), primarily due to net purchases of investments[323] - Net cash provided by financing activities was RMB543.3 million (US$78.0 million) in 2019, mainly from contributions from non-controlling interests[324] - The total one-time commissions earned in 2019 amounted to RMB 240,808, equivalent to approximately US$ 34,590, showing a decrease from RMB 294,984 in 2018[375] - Recurring service fees for 2019 reached RMB 1,339,627, approximately US$ 192,425, an increase from RMB 1,227,061 in 2018[375] - Performance-based income for 2019 was RMB 89,648, or US$ 12,877, down from RMB 100,533 in 2018[375] - Total revenue from all service fees in 2019 was RMB 1,673,982, approximately US$ 240,452, reflecting growth from RMB 1,651,805 in 2018[375] Cash and Liquidity - The company had RMB4,387.3 million (US$630.2 million) in cash and cash equivalents as of December 31, 2019[319] - The company expects that current cash and anticipated cash flow from operations will be sufficient to meet cash needs for at least the next 12 months[319] - The company reported a cash balance of US$338.9 million in non-U.S. dollar denominated cash and US$291.3 million in U.S. dollar cash as of December 31, 2019[425] Capital Expenditures and Investments - The company’s capital expenditures were RMB65.3 million (US$9.4 million) in 2019, down from RMB128.2 million in 2018[327] - The company had RMB874.8 million invested in credit products with a weighted average duration of approximately 1.73 years as of December 31, 2019[426] Shareholder Structure and Equity - The total number of ordinary shares outstanding as of March 31, 2020, was 30,817,640 on an as-converted basis[367] - Directors and executive officers collectively owned 14,310,908 ordinary shares, representing 46.4% of total shares[368] - Jingbo Wang, a director, held 6,829,179 ordinary shares, accounting for 22.2% of total shares[368] - The company has a dual-class common share structure, with Class A shares having one vote and Class B shares having four votes, impacting shareholder influence[386] Management and Governance - The company has a chief financial officer, Qing Pan, who has been in position since November 2019, previously serving as COO of Gopher Asset Management[338] - Jingbo Wang, the co-founder and CEO, has over 20 years of experience in wealth management and asset management[334] - Yi Zhao has been the president since March 2019, enhancing management of the sales network and implementing key strategies[338] - The company has independent directors with diverse backgrounds, including finance, investment, and asset management[336] - The company has established an audit committee, a compensation committee, and a corporate governance and nominating committee to oversee various governance aspects[359] Taxation and Regulatory Matters - The company is subject to a 25% enterprise income tax rate in the People's Republic of China (PRC) for both domestic and foreign-invested companies[397] - Dividends from a PRC subsidiary to its foreign parent company are subject to a 10% withholding tax unless a tax treaty provides for a reduced rate[397] - The company believes it is not a PRC resident enterprise for tax purposes, which would exempt it from PRC enterprise income tax on global income[399] - The company will be classified as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes if at least 75% of its gross income is passive income or at least 50% of the value of its assets is attributable to passive income[406] Internal Controls and Audit - The company maintained effective internal control over financial reporting as of December 31, 2019, as confirmed by an independent audit[435] - There were no changes in internal control over financial reporting that materially affected the company during the year ended December 31, 2019[440] - The company’s internal control over financial reporting was assessed based on criteria established in the Internal Control-Integrated Framework (2013)[434] Employee and Compensation - The company had 2,992 employees as of December 31, 2019, a decrease from 3,441 employees in 2018, with 1,288 relationship managers representing 43.0% of the total[365] - For the fiscal year ended December 31, 2019, the company paid approximately RMB31.1 million (US$4.5 million) in cash to directors and executive officers[340] - The compensation committee is responsible for reviewing and approving the total compensation package for executives, including long-term incentive compensation[359] Legal and Compliance - Gopher Shanghai is currently assessing potential legal risks related to claims against it, although it was not involved in any fraudulent activities[382] - The company has not entered into any material contracts outside the ordinary course of business[394] - The company has not disclosed any material adverse events that could impact future operating results[331]