Noah Holdings Ltd ((NOAH)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call from Noah Holdings Ltd revealed a mixed sentiment, highlighting both growth and challenges. While the company has seen significant expansion in its overseas business and alternative investment products, it faces hurdles with declining revenues, restructuring costs, and market pressures in its domestic segment.
Expansion of Overseas Business
Noah Holdings has made impressive strides in its overseas operations, with overseas net revenues accounting for 48% of total net revenues in 2024, up from 44% the previous year. The company also increased its number of overseas relationship managers by 55.1%, and its overseas client base grew by 15.8%, showcasing a strong focus on international markets.
Increase in Overseas Investment Products
The transaction value of overseas primary and private secondary products experienced substantial growth, with increases of 45% and 22% respectively, year over year. Additionally, USD-denominated assets under management (AUM) grew by 15.1% year over year to USD 5.8 billion, reflecting the company’s successful expansion in overseas investment offerings.
Launch of New International Brands
In a bid to strengthen its international presence, Noah launched new brands such as Arc, Olive Asset Management, and Glory Family Heritage. These brands are set to lead the company’s efforts in the overseas market, further solidifying its global footprint.
Significant Increase in Alternative Investment Products
Noah raised USD 663 million for overseas private equity, private credit, and other primary market funds, marking a 44.9% year-on-year increase. This growth underscores the company’s strategic focus on alternative investment products.
Decline in Overall Revenue and Net Income
Despite the growth in overseas markets, Noah experienced a decline in overall revenue, with full-year net revenues decreasing by 21.1%. Non-GAAP net income also fell by 46% to RMB 550 million, highlighting the financial challenges the company faces.
Domestic Market Challenges
The domestic market posed significant challenges, with net revenues from Mainland China decreasing by 27.5% to RMB 1.4 billion in 2024. This decline was attributed to a subdued market environment and regulatory challenges.
Restructuring Costs and Increased Tax Rate
Noah faced upfront restructuring costs and an increased effective tax rate of 31.5% in 2024, which further impacted its financial performance.
Decline in Insurance Revenue
The company saw a 21.9% decrease in revenue from overseas insurance products, and its domestic insurance brokerage business reached a new low of RMB 43 million, indicating a challenging environment for its insurance segment.
Forward-Looking Guidance
Looking ahead to 2025, Noah Holdings has outlined several strategic priorities. The company aims to ensure regulatory compliance, expand its overseas relationship manager team, grow its commission-only insurance agents, and optimize global investment solutions. Additionally, Noah plans to enhance technology to better serve clients and maintain its position as the preferred wealth management platform for global Mandarin-speaking clients. The company also announced a dividend of RMB 550 million, reflecting 100% of its non-GAAP net income, and continued its share repurchase program.
In summary, Noah Holdings Ltd’s earnings call reflected a mixed sentiment, with notable growth in its overseas business and alternative investment products. However, the company faces significant challenges in its domestic market, declining revenues, and restructuring costs. Looking forward, Noah remains committed to expanding its international presence and optimizing its services to better serve its clients.