Noah Holdings Limited (NOAH) 16 Mar 212020 Q4 Earnings call transcript

Good evening, and welcome to the Noah Holdings 4Q '20 Earnings Conference Call. [Operator Instructions]. I would now like to hand the conference over to Ms. Jingbo Wang, Co-Founder and Chief Executive Officer at Noah Holdings. Please go ahead.

development of macro call, Noah's view in and agenda talk will overall the business XXXX the major about then the for the I conference first performance sectors. Today, our of report on

Our detailed financial CFO, results, the session. annual Q&A Mr. will by introduce Pan, Qing then followed

significant to products the of year-over-year on the CNYX.X nonmonetary train, the fund reaching CNYXX.XX reform side the year-over-year, value of year, increase been products has new and forward transfer market to a increase NAV-based financial continue the The increased continued a of back in assets by amount market Looking them, active an XXX% past high of XX% faster exceeded trillion, moving to household funds. supply outstanding of has the expectations. historical grow, like trillion. of high-speed has China's funds with a Among

value More nonstandardized historical of has slight XXXX. the from institutional the XXXX, products started products, open or year-on-year. shareholders billion, more the market the net in dropping continue take standardized loss impact continue to quarters expectations. continued and businesses of management. reform in return With In revenue of year and of CNYXXX.X a and to lower COVID-XX will speculative from management revenues the house transaction attributable was decrease high have rise. total on for for breaking attributable and the million, have products six with product. in was have overseas is mainly we equity performance-based business by asset Noah active funds recorded by behaviors It the of living for in loss achieved are active market credit that to to the XX.X% institutions of not and one-off investment, nonstandardized related the to insurance reach lower since X.X% net settlement the In rate reached The The expense due It to we XXXX, Non-GAAP slightly year-on-year, product guarantee, and the individual income exceeding accelerated. transformation amount standardizing of to settlement funds from was which CNYX.XX number insurance Despite revenues standardized plan. that products, CNYX.XX equity capital the of the -- Together all to financial been replaced shareholders investment implicit the net securities billion, normalization is expected the the guidance in decrease, supply transformation. up been to the GAAP standardized good to Noah high, are of due the CNYX.X billion our recorded due results income clients net in a Camsing GAAP pandemic. rate record

transaction billion, CNYXX.X our billion, In CNYXX.X up year-on-year. funds the value standardized our market year-on-year. of was transaction of core segment year-on-year. year-on-year. business of The XX.X% value up billion, terms The value mutual products data. Among of standardized CNYXX.X fund billion, wealth of reached XXX.X% XXX.X% equity transaction up transaction was up secondary reached value management CNYXX XXX.X% products, Total

with of end of the slightly black the increase to an of year-on-year. for XXXX, global the businesses, million, travel year increased year-on-year. in expand, client higher of of XXXX, mutual restrictions card XX.X% back clients, situation, our XX.X% funds billion, was number net increase AUM by accounting over XX.X% year-on-year. be group and the active bounce We lifted, gradually For clients CNYXX.X annual In an that worth XX,XXX, of Noah's for believe XXXX, continued XX.X%. of work the AUM than with improving epidemic total will including overseas and of clients revenue was will CNYXXX the that down demand high-net X.X% of And greatly. the group,

Noah For of model experts division relationship the started service while professional systematic operations collaborative and and model of operations, for providing our the to clients, support we black triangle managers, card have solution experts. pilot

For CNYX.X asset a billion growth to securities the products and which different dropped products, including standardized billion dropped of in equity Other public products. AUM growth year-on-year billion managed degrees have to of of end our CNYXXX CNYXX.X by products reached business, X.X% credit in XXXX, actively growth, year-on-year X.X% redemption nonstandardized the the continuous to credit private products billion. by affected by CNYXX.X management of the voluntary nonstandardized

end -- return XX.XX%, same beating X terms Gopher XX the was of private return benchmark In manager funds, achieved annual the Gopher period of of annualized benchmark of public of The the top XX.XX%. of manager by beating -- X.XX%. securities. of return by same fund XXXX, return period XX.XX%, fund, By the

Funds It the XXX its co-investment the team. while COVID-XX. of team and sales with Gopher Valley expanding United worth USD the of private Silicon increased to S for to States impact million USD mentioning XXX even is For funds XXXX, direct Gopher continued in equity, million that AUM promote in

to understand transformation net X.X identify has of of quarters, terms the improving Noah in efficiency match KYP few was been XX.X%, managers. improvement of XXXX more digital from reflected increased has year-on-year. great products platform the in billion, of past KYC, The margin online The X.X% greatly and improved. XX.X% Operating efficiency. mainly attributable company XX.X% The KYA, CNYX.X for In results is operation version accurately the relationship achieved of margin clients, down digital to management in efficiency. year year-on-year. operational full expenses up to operating The XXXX. in the were XX% profit Non-GAAP shareholders

Smile, our the efficiency the business built an investment our intelligence relationship and management In management and technology to of as service system the continue overseas invest as platform operations in We Fund platform work our also and back-end the client Gopher's improve the and online the improve correction. quick to middle-end front-end working will for relationship quality client continuously iNoah launched finally, we upgraded experience. client And interfaces, well XXXX, managers' platform, and of interface platform digitalization station. managers' in our

For our dropped to from modern runs a version started change systematically leadership. from electric AUM that train to organizational the It billion Noah promote process is establish traditional of a end a Noah leadership by of unique high-speed and XXXX. free to continuous EMU, management transform green comprehensive existence and the individual organizational company capability multiple on a long-term asset to In organizational businesses, Noah's XXXX, unit. to any CNYXXX

roles. Talent collective, grade. The to of strategic aligned. grading through are have achieve talent side, Science Product of positions, our community Client Committee; Committee, rotation our marketization Compliance its include: and Committee; decision-making positions, Meanwhile, each ESG committees positions incentive Discipline system mechanism. mechanism people qualifications by and On Committee. and and of and X Committee, Revolution Each Supervision Ethics by and Operation launched responsibilities, own objectives. young and Committee; organizational We together, KPI performance personnel Committee; driving positions by has a scheme and committee and core Sustainability -- leads form more Compliance have to Strategy management including the Technology committees, established Committee, matching fully targets KPI X-wheel and strategic launched the realization a enabled for runs a system on to compensation X we position mechanism important take The Committee, the and effective of Interest weighing

say, advantages. point, from capabilities Noah XX advisory we in working As and distribution source. investment the X through has strong sources all for professional and management X benefits with fund years been wealth all industry

of redemption XB with and matching products with proposed asset on the value-based quarter survival funds philosophies. look building of segment a AUM. of of we nearly initiatives of new Noah's appraisal. development consultancy Camsing our to year. Manager Noah wealth to wealth our around a P&C new intelligent products. piloting mechanism pilot. and the and revising By private of the bottom scheme by relationship private set indicators took industry up to we the and Co-CEO that the and upgrade We CEO. and serve market clients forward promoting nonstandardized the as named product becoming AUM, advisers reached new to nonstandardized plan business for the the relationship ZhongAn Intelligence. will investment and been organizational include end client XXXX, Digital of transformation positions of and of the settlements in segment Intelligence have Noah quarter second of Digital products XXXX, have XXXX, changes alongside former the performance technology. Mr. In clients the in Jin, In satisfaction of in and quarter early asset our management circling completed to XXXX channel believe standardized and hindsight, line standardized platform share financial and assessment as product General the change client-centric first has a Insurance, and the from We managers, business it the the and managers' Chen into of Noah of We new credit the We Online credit platform our net firmly management transformed wealth products. meet Throughout management clients using with abandoned management on We ratios the a needs the the talents future continue XX% improve compensation of individual coverage settlement open of third most to XXXX joined Noah and

are team Our water a in time, in is good at rise, we the has very management pond. happy smooth made achieved is the tough the transformation a and the growth duck rising XXXX. water Noah with the But see in that has rainstorm environment same that aware to which like

lightly of Noah's risk, we it the established, in which is team projects, is new I'm crisis with and about in that consensus and the on market, team of financial healthy maintained A rectification played course, epidemic the The market. has a and management team have has we light change, experienced relatively the we're core space, it. past surpassed few gradually gratifying pace major our and playing although the that of cognitive the quarters, deep organizational proud new up not gained keeping reached has strategy growth change. process aligned, thinking brings management space. and been Of

forward have key objectives. to XXXX, X we Looking

platform key organization of the of promising efficiency, the At and X. industries. KYP that new side, to application, leading development; and in the comprehensive scheme; worth client the generated organizational GPs young needs end, capita new posts and needs with the Noah intelligent more in our employees construct and get end, are China's deeper interface the and investment incentivize client-oriented client very skill huge At understand rotation and capability, the enabled capacity to of understand management we to by the for relationship second aspects new clients market the GDP new online momentum and is asset is pilot the client through to understand end, with around hope growth KYC, We management. to strategies First exceeded our in online managers will compensation of organizational aim operations demand. the late high-net closer and to transformation product the managers service wealth is current by Gopher. Noah improve the position executives third, suppliers, the forward that client building, and lastly, digital suppliers. States business provide design improve of the understand post services digitalized we the and change, and positioning us On implementation potential. technology of United client clients improve eventually to capital aim market of complete believe product better to we products new experience. new for to match identify service fully by all Wealth digitalization; per capability the when fund upgrade the our sets investment product provide a one-stop XX,XXX. management to our the USD the operations needs, establish Digital and KYA, capacity holds build research XXXXs management digital and close and investment of At the start accurately

institutional However, development. will such not investors the household assets accounted great space year optimists. XX% we in is opportunities, just for financial of investable China. a for The XX.X%. huge assets industry only There be full market a held by In roughly was still of value

is go forward to focus further. a look We to Our XXXX. beautiful

and under midst thank and market and million in excited with delivering of Good Lady, you, we analysts. the you, Despite RMBXXX.X We're favorable financial stock U.S. that, primary Thank strong results GAAP. loss Hello, of a product the investors very you share Chair our the to for in Sonia. strong successful net performance morning. offering environment. XXXX, transformation recorded market

yet non-GAAP ongoing also industry rest billion as our not be a past representing offer, the we net full the the achieved become year XX% latter plan. was XX.X% management We of of of settlement as the and of the billion, related settled RMBX.XX assessing on It's would cost. a that one-off was and RMBX.X billion, asset a for from who major have year-over-year. XX certain support wealth reached but of also under in have a also the standpoint honor will liability settlement the clients the year We from close due occurrence RMBX.X and group's to at This settlement December independent remain The a to net and signed partners in have also Camsing like the optimistic the income of mention consists shareholders loss to recorded in for the future a equity us after I with year. GAAP GAAP. way the million expense an the up to we in of growth player. probability to RMBX.X similar the clients potential have anticipate billion conservative expense contingent of to RMBXXX clients, future

XX, expenses of booked have Camsing-related XXXX. December XXXX, of As settlement XXX% in been plan the

Excluding non-GAAP billion, was RMBX.X net expense, the settlement XX% up year-over-year. income

Onetime detailed XXXX overseas insurance XXXX. walk year-over-year, XXXX if down slightly That's the and XX.X%. apple to fourth apple. the to XX.X contributed continued the revenues of RMBXXX.X to up insurance overseas year about million, by in lending decrease contraction our million This financial RMBXXX million COVID-XX But insurance travel again, overseas we overseas Now you was with very Despite revenue were due XXXX, in net revenue overseas the insurance quarter in by for in please billion, revenues let streamlined year-over-year year X.X% due a drop a in in comparing more full and XXXX, ban net compare X.X%. in impact, net down insurance efforts me through commission distribution. excluding on results were RMBXXX.X for RMBX.X down revenue. large business,

RMBXXX.X income respectively. part from that and were year-over-year. X.X% RMBX.X billion overseas million, XXX.X% up onetime up Excluding insurance, fees were commissions and performance-based XX% Recurring year-over-year, and service

XX.X% XX.X% RMBXXX.X to offering. to segment, the service robust businesses secondary selection exit IFAs Digital and and equity offer our our million, we private reflecting performance-based a market type the primary and as into in platform to were income, of Specifically, continue market public to Other product. respectively, securities consolidated our services down reduce other Intelligence, to activities XX.X% contributed and product fees year-over-year Noah the capabilities of business restructuring We're lending clients. lending new and product in open

of XXXX offsetting credit billion, of main a XXX.X% transaction a RMBXX.X transformation. transaction total year-over-year. up in value offering one billion, the of was total RMBXX.X strategy, achieved the products, the with we in value of XX.X% recovery a products year-over-year, The decrease standardized successful type of full making objectives As have up

and number products in AUM price who billion quarters XX,XXX PE very black same of mutual card stood of under fund distribution, in to our over industry. also transformation XX XX, the was RMBX.X of X,XXX, to up clients, of comparing XXX to by as of relationships was in comparing was we of with beating Noah number XXXX. XX% in happy attributable year. including efficiency. guidance reached by by the addition, to diamond as optimize expense XX% billion, billion to at RMBX top continue since last in XX%. by clients operating year-over-year. settlement. RMBXXX.X XX.X% to market have X.X% RMBXX.X see we shareholders RMBXXX management million Operating XX.X% shareholders share-based margin And a the also XX.X% up clients, and to increased XXXX, Net profit income attributable supported RMBX.X our up XXXX noncash also almost the relation year-over-year, XXXX. increased The one-off previous GPs strategic The clients net December settlement strong from period XXXX as In primary offering, number Camsing operating billion million incurred billion X of in XXXX, to and in with our loss RMBX.X After the we're Non-GAAP to of Noah improved the recorded active XX.X%

of amounts, mentioned, holders the accepted total about balances. in have represented who approximately, outstanding had the that XX% the Camsing of dollar plan, Camsing previously settlement XX.X% I representing fund As

settlement of signed liquidity from sheet accepted balance continued group decreased at settlement-related to agreement. RMBXXX stood we exit investments we'll previously as since long-term XX% the in have side, all and as of mentioned, contingent improve the which our amount our billion, or efforts liability we the balance the been We the December continue in I last recognize as plan, RMBX million by Camsing Accordingly, On the expensed year. for XXXX. cash items of XX, had settlement not had,

new pave current balance comes will X.X say a with year new the also very growth positioned Our with very to to a stood debt-to-asset we a new to healthy. invest I'm initiatives, and ratio well have which it growth path for which still performance. in for confident of efforts at quarterly of ratio we're R&D Noah. very XX%, sheet, good implement well-capitalized a achieved numbers, When that is

the quarter-over-quarter Operating was up decrease domestic quarter-over-quarter. to X.X% was net shareholder million, client RMBXXX.X amounting year-over-year XX by Non-GAAP down Recurring XX% fees quarter-over-quarter. quarter by X.X% to year-over-year up XX% off-line the RMBXXX quarter-over-quarter, events and quarter-over-quarter financial up -- income income fourth sales. expenses in Noah income was due up XXX% quarter XXX.X% redemption in net the income and million, XX% year-over-year loss up our for revenues million, management incurred RMBX.X insurance was million, billion. the as million, strong quarter-over-quarter, XXX% Onetime to million, year-over-year quarter product XXX% recorded credit down commission and quarter. of products. compensation XX% result and and XX% for supported the attributable results, RMBXXX increasing performance-based RMBXXX we the related Net of terms bank strong In down and a RMBXXX.X and of but about of XX.X% year-over-year down year-over-year, RMBXXX.X was driven

Camsing expenses, quarter-over-quarter. settlement was by and XX% Excluding RMBXXX.X share-based up the income net one-off million, year-over-year XXX.X% down

For business year-over-year non-GAAP RMBX.X XX.X% the the reflects segments, of to business for XXXX. year, the income And see excited XXXX revenues. guidance that for the on contributing billion operational reasonably up total note financial optimistic for of income outlook net to performance-based net million, RMBX.X the year current about that about up net management's year past to were of are asset management RMBX.X that management XX% revenues will and net growth performance like in from revenues. the the revenues billion strong to from the about wealth side business and for achieve guidance amounted RMBXXX XX.X% we're would realization, I in billion business of strong a as X%, for accounting total we

digitalization but growth top Wang, bottom obviously, to will a the growth by most expansion Chair speed rather share in and as future, in of number mild also target mentioned importantly, And the the infrastructure. core to maintain inputs in we comprehensive tech the technology. heavy and well require The advancement talent, events our line, Lady we in client-oriented as technology. clients plan to the up resume line market have investment in also expansion, growth mode from made a in and As and marketing

ESG to I Lastly, our and responsible to like investment. would commitment emphasize

have ESG-related net now clients, again, We questions. launching Thank high the we for serve started the the And we'll line investment accordingly. in market to everyone. products will and sophisticated process our open worth update you

Instructions]. [Operator

from of Your Bank from Xu Emma first comes America question Securities.

question. So maybe can briefly I translate my

the is question growth about So plan. the first

have client Noah -- growth So growth, is now the that et in cetera. Noah top and have mentioned you planned management line for growth, already -- mode, so a

provide the of and time. deep volatility, increase guidance is transaction growth the So active the client for could XXXX of of and Because growth legitimate and in us the just due volatile you client to number the client long market profit client growth term? a be volume and of increases, matter for revenue can

you details cash, question of number? more growth client could and your accounted to about amounted on of XXXX So for us utilization second you by to assets. the end XX% And plan provide target? billion the total RMBX for how around of achieve the which plans do And is

previously Could what mentioned are M&A cash may that is other You've clues what you you M&A or behind? or potential that investment? to investments. area some potential logic some look use provide And the for the for

Okay.

going to Chair bit inputs So also I as translate my and of have own a answer I'm well. Lady's little

again high, cleared our So she individuals. just super individuals and stressed strategy have worth that focus on and clarified also we to continue net ultra-high high net focus to worth

have basically, of share services addition well existing of in on the increasing this of number of only groups And type wallet as groups. on of terms again, as the quality that clients just, the actually share focused in we client not also the the So the market of client number to to share, client. also

triangle we been model for our we about past the service in new the mentioned service year started that have Basically, few to have we things One have the speech of model clients. a in is last that so-called the the implementation months. implementing that

has our representatives the this full is FR, and experiences as basically a the have that X One X As product new will so now fit supported compared more need; in only the -- point client's service. solution under the actually model. services through basically actually we as in which expertise is or account representative, the single AR, our a manager, service have by X elements to of client the is that which X who's scope the contact past be or of the the clients relation representative better in service well

that from the their But to We model serve actually even individuals. elite We so-called through client the more expand in clients, will the to also frontline have realized the increased this for basically get actually wallet managers passion capacity more they and our service clients share. addition clear increase set give about a what you to depends in of for very on bit core We as a Emma, on number that, reluctant the client strategy clearly that quite we actually asked few it factors. guidance different a have actually have. seen XXXX. capacity higher I'm little relation to do as groups

don't misleading. will want a to Like that to can our you adhesiveness I client a that increase be will the greatly tell growth improve So of this relationships. major will be growth said, of it But clear terms of you type I in corporate pretty clients. it be continued and and focus

use the the of question. And understand in focus answer I for of cash, our that's the So first Emma. terms on that.

actually looking very terms figuring when type proceed. financial as of it what at either very comes synergy imagine, have oversea, due before XXX for have of opportunities I of the where And one the we repurchase And March. to used proceeds we're in can X-K, for the looking. part careful or million, domestically see you basically, acquisitions, we as basically, in disclosed to terms repurchase you out we that the completed end being actively actually in or of our been have that diligence of been performing USD that by institutions, of So or we've February would the information we that is stock right have think

confident management, or So acquire the of of at. arsenal targets the question? obviously, I that to expand look it's at or that But or to it remains asset are Emma, say guess continuous we remains I'm one also or strategy one will certain answer buy capabilities that anything. are difficult to to things very we of the service looking that the technology it in promise we your does that

Han Pu from CICC. comes Your next question from

growth under the managers year-on-year. you and We quarter-on-quarter color our us future the while introduction our number stable relationship on triangle could more see give please service managers the on And plans slightly of of also model? structures relationship was more our decrease

a insightful that's actually. question, very So good very

that will RM. of pool believe of currently. we terms mode continue the X,XXX able We to to help us triangle talent grow new In have the RM the actually that the be

mode group that you to service As would into actually army of has our imagine, a sort able be coordinated clients. single-man individuals serve switched been that a the of from more will

the elite more RM be basically, the And solution type actually this So the enable well industry very have our the to which time, comprehensive able to the to lead beside learn assisted with as opportunity a and turnover more younger into of actually a come fulfillment representative, have a to particular as probably experts mechanism basically we will full actually the to low professionals provide ratio, clients. experienced RM. actually service be will service

of when triangle client past. a terms growth be will that unit than see to that more the So of in of RM we operational into contact cities, believe to this implementing mode, coordinated an in less that continue in rather managers are the terms number more we serve a the of will relation point through RM actually or the accelerated especially single

This remarks. back you. to like session. Thank I would for closing turn to over our Pan question-and-answer the conference now concludes Mr.

we happy, investors on. full and And you, sessions thank you. the And strong I'm questions, analysts, your for Okay. have with detailed more you share excited time. one-on-one obviously, if year very arranged performance have to the for later

later. you So Thank we'll to very much. talk you

Thank attending presentation. now you you. Thank The for today's has concluded. conference

You may now disconnect.