FAST NEWS: Noah Holdings Posts Sharp Revenue Decline, Shares Plunge

The latest: Chinese wealth manager Noah Holdings Ltd. (NOAH.US) reported first- quarter revenue of 796 million yuan ($125.5 million) on Wednesday, down 35% from the same period of 2021 and down 36.9% from the previous quarter. It blamed the decline on decreases in one-time commissions and performance-based income.

Looking up: The group’s first-quarter net profit fell 32.8% year-on-year to 304 million yuan. But the figure was up 8.5% from the previous quarter due to lower expenses and provisions for credit losses.

Take Note: The company’s total active clients, which excludes mutual fund-only clients, fell 55.3% year-on-year to 2,818. The number of clients trading with the firm, including mutual fund-only clients, fell 46.2% year-on-year to 14,970 in the quarter.

Digging Deeper: Founded in 2005 and listed in New York in 2010, Noah Holdings offers asset management services for mainstream clients. After years of rapid growth, the company suffered significant losses in 2019 stemming from a scandal involving the sale of a fraudulent shadow banking product, which ultimately resulted in a large one-time settlement of 1.8 billion yuan. It has since refocused its business to provide investment and wealth management services to affluent Chinese clients, but at the same time is incurring more expenses. The firm’s business was negatively impacted in the first quarter by poorly performing capital markets.

Market Reaction: Noah’s U.S.-listed shares plunged 11.1% to a one-year closing low of $15.78 on Wednesday after the results were announced.

Translation by Jony Ho

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