Noah Private Wealth Management

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Noah, a Leading Independent Wealth Management Company with Asset Management Capability in China

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Noah Private Wealth Management

  1. 1. Noah Holdings Limited May 2014 Confidential
  2. 2. 1 Disclaimers This presentation contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the outlook for 2013 and quotations from management in this presentation, as well as Noah's strategic and operational plans, contain forward-looking statements. Noah may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Noah's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. All information provided in this presentation is as of the date of this presentation. Noah undertakes no duty to update any information in this presentation or any forward- looking statement as a result of new information, future events or otherwise, except as required under applicable law. The presentation contains non-GAAP financial measures that exclude the effects of all forms of share-based compensation and loss or gain on change in fair value of derivative liabilities. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for financial measures prepared in accordance with U.S. GAAP. The non-GAAP financial measure used by the Company may be prepared differently from and, therefore, may not be comparable to similarly titled measures used by other companies. The information contained in this document has not been independently verified. No representation or warranty express or implied is made as to, and no reliance should be placed on the fairness, accuracy, completeness, reasonableness or correctness of such information or opinions contained herein. The information contained in this document should be considered in the context of the circumstances prevailing at the time and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. None of the Company or any of their respective affiliates, advisers or representatives shall be in any way responsible for the contents hereof, or shall be liable (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. Confidential
  3. 3. 2 Confidential About Noah Financial Overview and Outlook Highlights of Growth Strategy Industry Overview Agenda 1 2 3 4
  4. 4. 3 About Noah - Overview Leading Independent Wealth Management Company with Asset Management Capability in China Confidential * Proven track record of quality growth * Asset light * Stable profitability Innovate, design, package and select financial products Extensive High Net Worth Client Base Well-Diversified Product Line High Quality Underlying Assets Wealth management & asset allocation advise
  5. 5. 4 About Noah - History and Key Milestones Founded in Shanghai – an industry pioneer 2005 1 branch 930 registered clients 2011- 2014 56 branches 55,591 registered clients 2006-2007 2 branches 3,089 registered clients 2008-2009 16 branches 9,641 registered clients 2010 39 branches 16,296 registered clients Sequoia Capital invested in Noah Rapid growth – 14 new branches IPO on NYSE Delivering sustainable growth Confidential Top 16 high-growth listed companies 2013 Technology Fast 500 Asia Pacific Most popular independent WM institution 2012 2013 2013 Best Potential Business in China 2012 2013 Inception in 2005 and listed on NYSE in 2010, China’s first and the only listed independent wealth manager Distributed wealth management products with an aggregate value of approximately RMB132.0 billion since inception
  6. 6. 5 About Noah – Industry Leading Position CLIENTS  High Net Worth Individual  Enterprise  Wholesale Value-Added Distribution Channel Fee and Commission Based Model Customized Wealth Management Solutions Recurring Management Fee Model Wealth Management Products     Asset Management Products Confidential
  7. 7. 6 Assets Under Management (US$ mm) 231 1,226 1,782 3,558 3,528 6,292 2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2014 (1) Stands for China Limited Partners Associates About Noah – GOPHER Assets Management Confidential 2011 2012 Best RMB Fund of Fund 1 2012 Best China Real Estate FOF Strong advantages in sales channel, business and human resources Specialize in asset allocation through funds of funds of private equity, real estate, hedge fund and real estate fund Investment opportunity in different types of assets, currencies, geographic area and cross cycle Superior AUM growth
  8. 8. 7 A Diversified Financial Product Supplier in New Era of Asset Management About Noah – Product Mix Confidential PE/Hedge Fund FOF Real Estate FOF Real Estate Fund ABS Money Market Private Equity Overseas Asset Allocation Fixed Income Product High End Insurance Mutual Fund Short-term Financing
  9. 9. 8 Confidential About Noah – New Products PE Film Fund High-End Health Insurance Noah RongYao Micro Lending Asset Securitization Noah RongYiTong
  10. 10. 9 Broad and Deep Network Coverage - Top 100 counties - Key provincial capitals - Deep market penetration in 56 cities Establish Regional Management - All six regional centers are profitable in 2013 and first quarter 2014 - Business scale and profitability improvement Number of Branches HNW Concentrated Province (1) HNW Concentrated City (1) (1) Source: Hurun Report The Chinese Millionaire Wealth Report 2012. Noah Branch Noah Headquarters About Noah – Network Expansion Confidential 2 14 16 39 59 57 57 56 2007 2008 2009 2010 2011 2012 2013 Q1/2014
  11. 11. 10 Confidential About Noah – Relationship Manager Elite Program Training Program Compensation Resource High Productivity ■ Increased average transaction value per RM ■ Minimize reliance on single RM ■ Consistency of service quality
  12. 12. 11 (1) As of December 31, 2013 Over 2,000 products identified from database 81 products launched in 2013 Continuous Product Management 161 products approved by risk management committee 529 products selected for due diligence Product team: about 100 professionals Confidential About Noah – Strong Risk Management Financial Product Research Platform Preliminary Review Quarterly Product Strategy Meeting Risk Management Committee Product Launch Post Investment Management Performance Review and Improvement (1) Year 2013
  13. 13. 12 About Noah – Post Investment Risk Management Confidential Post Investment Risk Management ■ Information Collection ■ Project Reports Special reports ■ Assessment Warning ■ Special LP Case Management ■ Settlement at Maturity ■ Asset Allocation Notice ■ LP Communication ■ Product Suppliers Interview First to establish dynamic assessment warning system Part of value added service to the clients First to establish independent post investment risk management team in the industry
  14. 14. 13 About Noah – Rules and Regulations Confidential Dealing in Securities Advising in Securities Assets Management Financial Service Hong Kong Mainland China Securities and Futures Commission (SFC) Office of Commissioner of Insurance (OCI) China Securities Regulatory Commission (CSRC) China Insurance Regulatory Commission (CIRC) Insurance Brokerage PE VC Fund / Assets Management Insurance Brokerage China Banking Regulatory Commission (CBRC) Trust
  15. 15. 14 Confidential Industry Overview2
  16. 16. 15 Note: HNW stands for High Net Worth. (1) Source: McKinsey & Company (2) Source: Credit Suisse Global Wealth Databook 2013. HNW Individuals Grow Fastest in China (2) Industry Overview - Secular Growth of China -50 0 50 100 150 200 250 300 350 400 2000-2013 2000-2007 2007-2008 2008-2013 Growth in % China Contributes Most Asian Private Banking Growth(1) Asia Increased Private Banking AUM, 2010-15E Noah - Direct Investment Access to Fast Growing Wealth Management Industry in China
  17. 17. 16 Industry Overview - Expanding Wealth Management Market in China Continued Growth Driven by High Savings, Interest Rate Liberalization and Financial Disintermediation  By the end of 2015, number of HNW individuals who owns more than RMB60 million investable assets expects to reach 2 million in China. Total investable assets of HNW individuals will reach RMB60 trillion. (3)  Total system deposits at RMB94 trillion as of end of 2012.  Noah expects half of the total system deposit will flow into the wealth management market over time. Note: HNW stands for High Net Worth (1) Source: Various news reports and Noah Research (2) Stands for wealth management products (3) Source: 2013 China Trust Industry Development Research Report by PingAn Trust and Mckinsey (4) Huren China Wealth Report 2013 Confidential Number of HNWIs increases 875 960 1,153 1,384 1,635 1,929 2010 2011 2012 2013E 2014E 2015E Number of HNWIs in China (in ’000) Source: PingAn & McKinsey report, 2013 With total individual investable assets grow even faster 21 26 30 37 46 58 2010 2011 2012 2013E 2014E 2015E Individual investable assets in China (in RMB tn)
  18. 18. 17 Industry Overview - Competitive Advantages 1 2 3 4 5 Leading market position with strong brand recognition Strong client base and loyalty driven by HNW client-centric service Unique business model to support long-term growth Visionary management and with proven track record Rigid risk management and product screening
  19. 19. 18 Confidential Financial Overview and Outlook3
  20. 20. 19 Financial Overview - Robust Q1 2014 Transaction Value Income from Operations Non-GAAP Net Income (2) (1) “Active Clients” refer to those registered clients who purchased wealth management products distributed by Noah during any given period. (2) Based on non-GAAP financial measures that exclude the effects of loss or gain on change in fair value of derivative liabilities associated with the conversion and liquidation features of series A preferred shares and all forms of share-based compensation. (RMB bn) (US$ mm) Net Revenues 44.5 8.4 15.0 2013 Q1/2013 Q1/2014 Y-o-Y increase 72.5% 163.8 32.6 50.3 2013 Q1/2013 Q1/2014 (US $mm) Y-o-Y increase 54.1% 60.6 11.9 20.7 2013 Q1/2013 Q1/2014 (US $mm) Y-o-Y increase 74.1% 56.8 10.7 18.1 2013 Q1/2013 Q1/2014 Y-o-Y increase 68.4%
  21. 21. 20 Confidential Financial Overview – Revenue Breakdown 47.2% 36.4% 50.3% 61.5% Q1/2013 Q1/2014 50.30 Recurring Revenues One-time Commissions Others (US $mm) 32.60 Recurring revenue and One-time commissions
  22. 22. 21 Confidential Fixed Income, PE and Other Products Financial Overview – Transaction Value Breakdown (RMB bn) Trust products accounted 9% of total transaction value in Q1 2014 Fixed Income Product PE and Other Product 25% 24% 75% 76% Q1/2013 Q1/2014 14.97 8.68
  23. 23. 22 Confidential Non-GAAP Net MarginOperating Margin Financial Overview – Profitability 36.4% 41.2% 2013 Q1/2013 Q1/2014 37.0% 2013 Q1/2013 Q1/2014 34.6% 32.9% 36.0%
  24. 24. 23 2014 Financial Outlook 2014 Financial Outlook Non-GAAP net income reached U months of 2013 Non-GAAP net income attributable to Noah shareholders US $72.0 million to US $76.0 million 27% increase YoY or 34% increase YoY
  25. 25. 24 Confidential Highlights of Growth Strategy4
  26. 26. 25 Confidential Highlights of Growth Strategy Continue to increase RM’s productivity4 Corporate StrategiesHNWIs & Families Comprehensive financial platform to serve the asset and wealth management needs of Chinese worldwide SMEs Institutional Investors  Asset-light business model  Diversified product mix  Comprehensive services Corporate Strategy Wealth Management Assets Management Investment Banking Continue Product Innovation to Enhance Our Value Proposition to Clients 2 Expand Our Coverage Network and Deepen Client Penetration 3 Further develop asset management business Enhance Our IT Infrastructure and Proprietary Database 5 1
  27. 27. 26 Noah Holdings Limited, Investor Relations ir@noahwm.com Tel: + 86-021-2510-0889 Thank you! Confidential

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