SHANGHAI - Noah Holdings Limited (NYSE: NYSE:NOAH), a leading wealth management services provider, reported a notable decrease in revenue for the first quarter of 2024, with earnings per share (EPS) of RMB2.31.
The company's revenue for the quarter was RMB649.54 million, reflecting the challenges faced in the wealth management sector.
The company's revenue saw a significant decrease of 19.2% compared to the same quarter last year. This downturn was attributed to a decline in performance-based income from USD private equity products and recurring service fees from RMB private equity and private secondary products.
Despite this, Noah Holdings observed a 6.0% increase in one-time commissions from the previous year due to a 4.6% rise in revenues from insurance product distributions.
In mainland China, the company experienced a sharp 28.8% drop in net revenues, primarily due to reduced recurring service fees from private equity and private secondary products. Overseas revenues also fell by 4.5%, mainly due to decreased performance-based income from private equity products.
Operating income for the first quarter plummeted by 56.4% to RMB121.5 million (US$16.8 million), largely due to the combined effects of decreased net revenues, increased compensation costs, including a new share-based compensation scheme, and a substantial rise in general and administrative expenses.
Net income attributable to Noah shareholders also fell by 46.2% to RMB131.5 million (US$18.2 million), with a decrease in income from operations being partially offset by an increase in interest income. Adjusted net income, which excludes share-based compensation effects, saw a 32.7% decrease from the previous year.
Ms. Jingbo Wang, co-founder and chairwoman of Noah, acknowledged the impact of sluggish domestic markets but also highlighted strategic overseas expansion efforts. "Excluding performance-based income, which was elevated due to the high base effect from the same period last year, net revenues from our overseas business increased 22.4% year-over-year," she stated.
Noah's wealth management business distributed investment products valued at RMB18.9 billion (US$2.6 billion) during the quarter, marking a 12.4% increase from the prior year, driven by a significant rise in mutual fund product distribution. The company's asset management business maintained stable assets under management at RMB153.3 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 decreased by 16.4%. Despite these contractions, the number of overseas registered and active clients grew by 17.1% and 39.6% respectively, year-over-year.
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