Noah Holdings Limited American Depositary Shares (each representing five (5) Ordinary shares) 2026 Q2 Earnings Call

Good morning and good evening, everyone. Welcome to Noah's second quarter 2026 earnings conference call. Joining me on the call today are Ms. Jingbo Wang, co-founder and Chairlady, Mr. Sanda Yin, co-founder, Director and CEO, Mr. Grant Pan, CFO, and Mr. Jason Wu, Deputy CFO. Mr. Yin will begin with an overview of our recent business highlights, followed by Mr. Pan, who will discuss our financial and operational results. They will all be available to take your questions in the Q&A section that follows. Please note that the discussion today will contain forward-looking statements that are subject to risks and uncertainties that may cause actual results to vary materially from those in our forward-looking statements. Potential risks and uncertainties include, but are not limited to those outlined in our public filings with the SEC and The Stock Exchange of Hong Kong Limited.

Noah does not undertake any obligation to update any forward-looking statements except as required under the applicable law. With that, I would like to pass the call over to Mr. Yin. CEO, please go ahead. Hello, this is the operator.

Good morning, everyone. Thank you for joining Noah Holdings' second quarter 2026 earnings call. As we enter the second quarter, Noah's transformation reached a new stage. On our first quarter earnings call, we said that Q1 represented the beginning of the validation of Noah's new operating model. After the second quarter, I believe we can take that conclusion one step further. Revenues associated with our legacy model are being phased out in an ordinary manner. While our new operating model is not only being validated, but is also beginning to generate that revenue, asset growth and profit. Most importantly, our AI Wealth Management Department and new AI-enabled front office operating model we have been developing over the past year has now established its first meaningful proof points in Singapore. This quarter, we observed three developments that have become increasingly clear.

First, Singapore has proved the first meaningful validation of our AI Wealth Management Department model in approximately 10 months, and the business achieved monthly profitability in July. Second, performance-based income reached RMB 238 million in the first half of the year, demonstrating how the global investment capabilities we have built over many years are increasingly translating into earnings. Third, while our total employee headcount declined 17% year-over-year, USD AUM increased by 11.7%. More importantly, our overseas RM headcount declined by 36.2% year-over-year, while overseas assets continued to grow. This suggests that we are beginning to decouple asset growth from RM headcount growth, a relationship that has historically been highly linear in traditional wealth management. This is also the most important message we would like to communicate to the market today. For Noah, AI is no longer simply about improving efficiency or reducing costs.

It is beginning to change how we organize our front office, how we serve clients, and how we expand globally. Today, I will discuss our financial performance, our Mainland China business, our international business, and our key priorities for the second half of the year.

好，第一个方面是财务表现方面。在第二季度，集团实现净收入人民币6.2亿元，经营利润人民币2.16亿元，同比增长34%，经营利润率34.8%。Non-GAAP归属于诺亚的净利润人民币2.38亿元，同比增长25.9%，环比增长77.8%。上半年净收入人民币12.46亿元，同比增长0.1%，经营利润人民币4.52亿元，同比增长30.3%，经营利润率36.3%，同比提升8.4个百分点。Non-GAAP净利润人民币3.72亿元，同比增长3.9%。本季度也标志着诺亚自上市以来连续第63个季度实现Non-GAAP的盈利。收入总量与去年基本持平，但收入结构和经营效率已经发生了明显的变化。我想把这个变化再进一步地阐述一下。第一个方面，旧模式相关收入正在有序地退出。上半年，募集费净收入同比下降36%，其中主要是保障类的产品下降53.8%。这部分收缩是我们主动进行的战略选择。中国大陆和国际业务的具体情况我后面会分别来说明。另一方面，投资能力相关收入正在兑现。上半年业绩报酬，也就是Fund-Based Carry净收入达到人民币2.38亿元，同比增长364%。投资类产品募集费同比增长13.4%，投资收益人民币3,979万元，去年同期为亏损。同时，运营效率持续地提高。上半年经营成本与费用同比下降11.6%，其中人力成本同比下降12.7%。这些数字背后有成本纪律和组织精简的贡献。但我们认为更值得关注的是诺亚正在开始用一种更轻、更数字化、更依赖平台能力，而不是单纯依赖人数扩张的经营方式。这是我们过去几个季度持续投入AI以后开始看到的结构性的变化。 In the second quarter, we generated net revenue of RMB 620 million.

Operating income was RMB 216 million, up 34% year-over-year, with an operating margin of 34.8%. Non-GAAP net income attributable to Noah was RMB 238 million, up 25.9% year-over-year, and 77.8% quarter-over-quarter. For the first half of the year, net revenues were RMB 1.25 billion, broadly flat year-over-year. Operating income reached RMB 452 million, up 30.3% year-over-year, with an operating margin of 36.3%, representing an improvement of 8.4 percentage points from the same period last year. Non-GAAP net income was RMB 372 million, up 3.9% year-over-year. This quarter also marked Noah's 63rd consecutive quarter of Non-GAAP profitability since our IPO. While total revenue remained quarterly stable compared with last year, the composition of our revenue and our operating efficiency have changed meaningfully.

I'd like to explain this change clearly. On one hand, revenues associated with the legacy model are being phased out in an ordinary manner. Net distribution income declined 36% year-over-year in the first half, including a 53.8% decline in insurance-related products. This contraction reflects deliberate strategic choices we have made. I will discuss the Mainland China and international business separately in more details later. On the other hand, revenues associated with our investment capabilities are increasingly being realized. Net performance-based income, or what we call Carry, reached RMB 238 million in the first half, up 364% year-over-year. Distribution income from investment products increased 13.4%. Investment income was RMB 39.79 million, compared with a loss in the same period last year. At the same time, operating efficiency continued to improve.

Operating costs and expenses declined 11.6% year-over-year in the first half, including a 12.7% reduction in personnel costs. These improvements reflect both disciplined cost management and organizational streamlining. More importantly, we believe that they reflect a structural change in how Noah is beginning to operate. We are now increasingly operating with a leaner, more digitalized model that relies more on platform capabilities and less on simply adding headcount. This is one of the structural outcomes we are beginning to see after several quarters of sustained investment in AI.

我们对利润结构的看法是清晰的。转型期的利润由Carry来支持，与成本纪律来守住。而未来经营性的收入真正能够恢复增长，要依靠新的增长引擎并网。其中AI财富管理部就是我们正在重点验证的新的增长引擎之一，这是下半年管理层最重要的核心工作之一。我们维持一季度业绩会上的判断，全年经营利润率保持在30%以上的健康区间，季度之间因产品结构与费用节奏自然会有波动。 Our view of the earning structure is clear.

During the transformation period, carry realization and cost discipline provide support for profitability. For recurring revenues to return to sustainable growth, new growth engines must come online. The AI Wealth Management Department is one of new growth engines we are now actively validating. This will be one of management's most important priorities in the second half of the year. We maintain the outlook we provide on our first quarter earnings call. We expect our full year operating margin to remain at a healthy level above 30%, while quarterly results may naturally fluctuate depending on product mix and the timing of expenses.

关于carry，carry的话绝对不是一次性的这种收入，而是一套长期积累、可以持续滚动产生的系统的能力。我们的底层运作很清晰，就是三层结构。第一层做全球顶级基金的LP，获得最前沿的产业视野和资产的信息。第二层通过母基金进一步放大信息网络，观察全球优秀投资机构的集体选择。第三层，通过跟投和直投，把前两层积累的信息优势转化为回报更高、集中度更高的carry的来源。这三层结构构成了我们滚动发行的产品线。不同年份设立的基金处于不同的生命周期，持续有早期基金进入收获的阶段，使得carry具备滚动兑现的基础，而不是依赖单一项目的偶发性的收入。另一方面，AI数据能力正在进一步地强化这套投资系统。资产端，我们较早地布局了全球AI价值链中的核心资产，目前很多资产仍处于价值释放的早中期。我们穿透近60只子基金，通过机构化的数据体系和交叉的验证，观察优秀的GP共同投资什么，持续在加仓什么，以及资产和产业趋势正在向哪里集中。在客户端，AI开始帮助我们解决另一个非常重要的一个问题，就不仅是选对产品，也要选对客户。在合适的时间把合适的产品匹配给合适的客户。投资判断、客户的理解与配置能力开始被数据连接在一起。数据积累得越深，判断就越精准，客户获得好的投资结果以后，复投和AUM就会提高，最终进一步地形成carry。这是我们希望建立的长期的飞轮。香港平台历史上已经累计实际支付carry 1.58亿美元。这个兑现能力是记录有可以来验证的。当然此类投资有其固有的周期，carry逐年也会有波动。我们不会对此做常态化的承诺。最新的进展会继续按照季度向大家披露。 Carry is not a one-time outcome driven by luck.