Noah Holdings reports revenue growth, expands overseas

HONG KONG - Noah Holdings (NYSE:NOAH) Limited (NYSE: NOAH and HKEX: 6686), a wealth management service provider, today disclosed its financial outcomes for the second quarter of 2024. The company announced a net revenue of RMB 616 million for the period, with its wealth management segment contributing RMB 416 million and its asset management division posting RMB 192 million.

The firm's strategic expansion into overseas markets is showing positive traction, with international net revenue making up 46.3% in the first half of 2024, and assets under management witnessing a 14.1% year-over-year increase. Noah has also successfully raised US$ 338 million for its overseas investment funds, marking a 40.2% increase from the previous year.

Noah's operating income rose to RMB 134 million, a 10.3% sequential boost, with operating margins climbing to 21.8% from 18.7% in the preceding quarter. These figures reflect the initial success of Noah's strategic transformation, which includes cost control measures and a restructuring of its domestic operations to enhance compliance and efficiency.

The company's CEO, Zhe Yin, noted the growth of the overseas relationship manager team by 101.8% year-over-year, which aligns with the firm's global expansion strategy. Domestically, Noah is optimizing its branch network and revamping its client service model to better meet regulatory demands.

In terms of client base, Noah saw a 6.7% sequential and 23.0% year-over-year increase in overseas registered clients, with a significant 14.2% rise in high-tier diamond and black card clients. The firm also observed a shift in investment product preferences, potentially influenced by expectations of a Federal Reserve rate cut later in the year.

As part of its shareholder value enhancement efforts, Noah has authorized a share repurchase program up to US$50 million of its shares, independent of the Corporate Actions Budget, which will be determined by the end of 2024 based on the company's financial performance.

Chairwoman Jingbo Wang expressed confidence in Noah's valuation and market position, emphasizing a commitment to shareholder returns despite the transitional phase in China's wealth management industry.

Noah also highlighted its dedication to environmental, social, and governance (ESG) principles by publishing its 10th Annual ESG report and joining the Nature Responsible Management initiative, Spring, by Principles for Responsible Investment (PRI) to combat biodiversity loss by 2030.

The information in this article is based on a press release statement. Noah Holdings continues to adapt its strategies for global expansion, technological innovation, and sustainable practices, aiming for continued success in the evolving market landscape.

In other recent news, Noah Holdings Limited has announced a $50 million share buyback plan. The two-year program, separate from the company's November 2023 capital management and shareholder return policy, demonstrates the company's confidence in its financial strength and dedication to shareholder returns. The repurchases will be funded from the company's existing cash reserves and operational cash flow.

In addition to this, Noah distributed a record dividend of $140.1 million for the full year of 2023, equaling 100% of its annual non-GAAP net income. The company, which managed assets of $21.2 billion as of March 31, 2024, has also shown commitment to shareholder interests amidst a challenging period in China's wealth management industry.

These are among the recent developments for Noah Holdings, a company with a diverse range of wealth management services and a client base of over 457,000 registered individuals.

InvestingPro Insights

As Noah Holdings Limited (6686) navigates through strategic transformations and global market expansions, key financial metrics and analyst insights from InvestingPro offer a deeper understanding of the company's current valuation and performance. According to recent data, Noah Holdings has a market capitalization of approximately $484.94 million, suggesting a moderate size within the wealth management sector. The company's Price / Book ratio stands at a notably low 0.32, which may indicate that the stock is potentially undervalued relative to its book value.

Despite a challenging economic environment, Noah Holdings has managed to maintain profitability over the last twelve months, as evidenced by the InvestingPro Data. This is further supported by a strong free cash flow yield implied by the company's valuation, an InvestingPro Tip that highlights the firm's ability to generate cash after accounting for capital expenditures. Additionally, the company's dividend yield is remarkably high at 13.33%, signaling a substantial return to shareholders through dividend payments.

While the company's revenue growth has been modest at 1.05% over the last twelve months, analysts have expressed concerns about a potential sales decline in the current year, another InvestingPro Tip. This forecasted decline may impact the firm's near-term financial performance and could be a consideration for investors assessing the company's future revenue streams.

For readers seeking additional insights and analysis, InvestingPro offers a comprehensive list of tips, including 11 more tips related to Noah Holdings Limited, available through their platform at https://www.investing.com/pro/6686.

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