Noah Holdings Limited (NYSE:NOAH) Q2 2020 Earnings Conference Call - Final Transcript
Aug 24, 2020 • 08:00 pm ET
Welcome to the Noah Holdings' Limited Second Quarter 2020 Earnings Conference Call. [Operator instructions] After today's presentation there will be an opportunity to ask questions. [Operator Instructions].
I'd now like to turn the conference over to Chairlady, Wang. Please go ahead. Thank you, operator. [Foreign Speech] Regarding the teleconference agenda today, I will start with my viewpoint on macrolevels. Then summarize Noah's overall performance in the second quarter of 2020, the developments of major business segments, as well as assessments we hope to reach with our clients on the Camsing incident. Then Grant will present financial results of the second quarter. This call will be concluded after a Q&A in the end. The wealth management industry has been experiencing underlying transformation in China, which has been accelerated by the COVID-19 epidemic. In my view, 2020 is the critical year for the transformation of Noah, through organizational capacity building, client insight and process restructuring, Noah is changing to be more adaptable to the new environment of wealth management and asset management in China. With the deleveraging in 2018 and the rectification of chaos in financial industry in China in 2019, the tightening of supervision and the impact of the epidemic, NAV-based products promoted by the new guidance on standardizing asset management business of financial institutions has quickly developed into the mainstream product in China's wealth management industry. The remaining demand from clients fell beyond industry expectations. We believe that further investor education and updated client inspections are the keys to NAV-based wealth management. For the segment of wealth management, we have made much effort's to train product driven relationship managers as investment consultants. We launched our self-developed mutual fund investment consultancy platform. For the segment of asset management, we have strengthened our investment research and direct investment capabilities and promoted direct sales and multi-channel institutional sales, all of which have made progress to some extent. [Foreign Speech] Next, I will report the second quarter results from the aspect of wealth management, asset management and operational efficiency. Starting from the third quarter of 2019 Noah has ceased the offering of non-standardized single counterparty private credit products and made thorough transformation to standardize the products, for which RMB17.97 billion was distributed in the second quarter of 2020, up 198.5% year-on-year. The transaction value of standardized product in the first half of 2020 reached RMB37.08 billion, increased more than three times over the same corresponding period last year. Excluding non-standardized single counterparty private credit products, transaction value rose by 45.2% year-on-year. This data indicated a preliminary success of the transformation and the share of non-standardized single counterparty private credit product in transaction value before the transformation has been completely replaced by that of standardized product. In the field of standardized product, our new capabilities are being developed, and we expect more potential for growth in the future. In the second quarter of 2020, Noah achieved net revenues of RMB750 million, up 0.2% quarter-on-quarter. And non-GAAP net income attributable to shareholders of RMB707 million -- sorry,