NOAH.US 6686.HK

The latest: Noah Holdings Private Wealth and Asset Management Ltd. (NOAH.US; 6686.HK) reported Tuesday that its first-quarter revenue increased by 1% to 804 million yuan ($113 million), while its net profit decreased by 20% to 244 million yuan.

Looking up: During the period, the aggregate value of investment products distributed by the company increased by 12% year-on-year to 16.8 billion yuan, mainly due to growth in its distribution of mutual fund and private secondary products.

Take Note: The profit decline mainly owed to a 61.4% increase in selling expenses related to several offshore client events during the quarter, and a 35.3% increase in relationship manager compensation expenses. Those items resulted in an 11.1% decrease in net income from operations to 279 million yuan.

Digging Deeper: Founded in 2005 and listed in the U.S. in 2010, Noah is currently shifting the focus of its asset management business to affluent investors and scaling back its emphasis on mainstream clients after getting caught up several years ago in a case involving fraudulent investment products. The company’s revenue fell 27.7% to 3.13 billion yuan and non-GAAP net profit dipped 26.5% to 1.01 billion yuan last year, as it took a hit from Covid restrictions in China and volatility in financial markets.

Market Reaction: Noah’s New York-listed shares dipped 0.9% to close at $14.67 on Tuesday. Its Hong Kong shares fluctuated slightly on Wednesday and closed unchanged at HK$265 by the midday break. It now trades in the middle of its 52-week range.

Translation by Jony Ho

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