Noah Holdings Reports Higher Operating Income Amid Revenue Decline
Noah Holdings Limited (NYSE:NOAH) reported second-quarter net revenue of RMB619.9 million, down slightly year over year and sequentially. Despite the drop in revenue, operating income rose by 34% to RMB215.8 million due to reduced compensation costs and credit-loss provisions. GAAP net income attributable to shareholders increased by 30%, while non-GAAP net income also saw a rise of nearly 26%. The company's cost-cutting measures contributed significantly, with compensation expenses falling from RMB299.3 million to RMB260.1 million. Client activity improved year over year, with active clients increasing by 12.4% to 10,296. Revenue in mainland China public-securities rose sharply due to performance-based income from private secondary products. However, international revenue declined by 20.5%, and the segment reported an operating loss for the first time since RMB3.3 million compared to a previous profit of RMB27.8 million. Noah ended June with cash reserves of RMB4.32 billion, up from last year's RMB3.82 billion. While cost reductions have improved margins and earnings, international revenue weakness and lower AUM suggest the turnaround is not yet complete.
Tickers: $NOAH
Topics: cost_cuts margin_expansion operating_income revenue_decline