Noah Holdings Limited (NYSE:NOAH) Q1 2020 Earnings Conference Call - Final Transcript

May 18, 2020 • 08:00 pm ET


Noah Holdings Limited (NYSE:NOAH) Q1 2020 Earnings Conference Call - Final Transcript


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Good evening, and welcome to the Noah Holdings 1Q '20 Earnings Conference Call. [Operator Instructions]. After today's presentation, there will be an opportunity to ask question. [Operator Instructions].

I would now like to turn the conference over to Mr. Grant Pan CFO. Please go ahead.

Grant Pan

Thank you, operator. And good morning and good evening to all the investors and analysts on the call. Chairlady Wang and I are very happy to report to you about our first quarter performance. First, let me hand it over to Chairlady Wang to share with you the performances of Noah for the first quarter in 2020.

Jingbo Wang

[Foreign Speech] For today's agenda, I will first share my views on the macroeconomy, and then briefly summarize Noah's overall performance in the first quarter of 2020, the development of our business segments, and the achievements and challenges during our transformation. Our CFO, Mr. Grant Pan, will follow with a detailed discussion of Noah's financial performance in the first quarter. We will conclude the call with a questions-and-answer session.

It is fair to say that the COVID-19 pandemic since 2020 has pushed wealth management institutions in China to accelerate the transition to provide more proactive and customized asset management services and expedite the supply of net value-based products. Our industry is constantly transitioning from product-driven and product sales oriented to investment advisory oriented, providing clients with effective asset allocation services.

The COVID-19 pandemic also restarted wealth management industry with new methods and rules, contactless services, live streaming, online solutions, intelligence possession --processing have become critical elements for every institutions. As Noah has shifted our focus from providing private credit funds to more standardized products, we're able to enhance technology and innovation in our wealth management business and empower different operational aspects, including new clients and channels development, product services, investment research services and risk management with digital technologies such as Big Data and Artificial Intelligence. During the COVID-19 pandemic, over 99.5% of Noah's clients have been completing their transactions entirely online.

[Foreign Speech] Next, I will go over our wealth management segment, asset management segment and operational efficiency in the first quarter. Starting from the third quarter of 2019 Noah ceased the distribution of single counterparty non-standardized private credit products and fully entered the field of standardized products. Now, I'm delighted to report that our transaction value has reached RMB23.19 billion in the first quarter of 2020, up 76.1% quarter-over-quarter. The transaction value of standardized products, including mutual funds, equity and bond funds achieved an increase of 496.3% year-over-year and was up 96.9% quarter-over-quarter. Excluding single counterparty non-standardized private credit products, the transaction value has increased by 287.5% year-over-year and was up 88.3% quarter-over-quarter.

We are pleased to see that standardized products are well received by our clients. Thanks to their continued trust, the growth of the AUM of standardized products and Noah has exceeded our expectations, especially in consideration of the severe impact of the COVID-19 pandemic in China, we are quite satisfied with our achievements so far.