管理層發言
Good day. And welcome to the Noah Holdings Limited First Quarter 2026 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Dorian Chiu, Investor Relations. Please go ahead.
Thank you, and welcome, and good morning, everyone, to Noah's first quarter of 2026 earnings conference call. Joining me on the call today are Ms. Jingbo Wang, the Co-Founder and Chairlady, Mr. Zhe Yin, the Co-Founder, Director and CEO and also Mr. Qing Pan, the 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 as follows. And 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 Hong Kong Stock Exchange. Noah does not undertake any obligation to update any forward-looking statements except as required under applicable law. With that, I would like to pass the call over to Mr. Yin. Please go ahead.
Investors and analysts, thank you for joining Noah Holdings' first quarter 2026 earnings conference call. As we start 2026, the pace of Noah's transformation has become clearer than ever before. In the first quarter, we observed three increasingly visible trends. First, our profitability structure continues to improve, with operating margin reaching one of the highest quarterly levels in recent years. Second, our domestic business is regaining momentum in core investment and asset allocation, with both active clients and transaction value achieving double-digit growth. Third, our overseas business continues to advance in line with our strategy of proactively adjusting our revenue mix, while a new operating model driven by globalization and AI gradually takes shape. Before going into a more detailed review, I would like to share two milestones in our global footprint that we recently achieved.
Our Japan office officially commenced operations on May 4, and our US broker-dealer license has completed the final approval process, with key team members set to officially join in June. These two developments mean that our network is entering a new phase, moving from license deployment to operational execution. Next, I would like to share our progress from four perspectives: financial performance, domestic business, overseas business, and AI strategy. In the first quarter, we recorded net revenues of RMB 626 million, up 1.8% year over year and down 14.7% quarter over quarter. The sequential decline was mainly due to a further decrease in contribution from the insurance business as well as a seasonal decrease in performance fee income from overseas private equity products following concentrated year-end recognitions. However, on the profit side, benefiting from our disciplined cost control, organizational streamlining and expense management, operating profit reached RMB 236 million, up 27.1% year over year.
Operating margin was 37.8%, marking one of the highest quarterly levels in recent years. Non-GAAP net income was RMB 134 million. It is important to note that this quarter's strong margin performance benefited from continued optimization in our business mix and further release of additional organizational efficiency. We expect full-year operating margin to remain in a healthy range above 30%, although quarter-to-quarter fluctuations are natural due to product mix and expense timing. This quarter also marked our 62nd consecutive quarter of non-GAAP profitability since listing. This is the discipline we have maintained across multiple market cycles. Our active clients reached 10.7 thousand, up 21.8% year over year. Transaction value reached RMB 23.3 billion, compared with RMB 16.1 billion in the same period last year. In our domestic business, transaction value of RMB-denominated mutual fund products reached RMB 9.9 billion, up 131% year over year, while transaction value of RMB-denominated private secondary products reached RMB 5.3 billion, up 61% year over year.
Noah Upright recorded net revenues of RMB 28 million, up 63% year over year, mainly driven by a doubling in public fund transaction volume as a result of structural opportunities in the A-share market, together with a rapid recovery in RMB-denominated private secondary fundraising. This series of changes shows that when we refocus our resources on products and investment capabilities with genuine long-term value, the operating performance of our domestic business improves structurally. At the same time, we have become even clearer about the strategic direction of our domestic business going forward. For our domestic business, we will continue to focus on the secondary market and building our asset allocation capabilities, with key priorities including public mutual funds, private secondary market products, AI-driven client operations, and Noah Upright's fund distribution platform capabilities.
We will continue to drive the enhancement of our operations in these areas. We believe the domestic wealth management industry is gradually moving away from the past stage that was driven by real estate and non-standardized products and returning to a true long-term era centered on investment research and asset allocation. As of March 31, overseas registered clients reached 20.4 thousand, up 11.9% year over year. Overseas AUA was US$9.6 billion, up approximately 5.9% year over year. Transaction value of U.S. dollar-denominated products was US$1.15 billion for the quarter, broadly flat year over year. Our overseas client base and AUA continue to grow steadily, and the pace of our revenue mix adjustment is consistent with the view we shared during our third quarter earnings call last year. Over the past few years, we have continued to build our presence across key regions, serving global Chinese clients, including Hong Kong, Singapore, Japan, Canada, Europe, Australia, and the United States.
What we are seeing more clearly is that global Chinese clients are entering a new stage. Their assets, families, identities, education, and next-generation planning are becoming increasingly globalized. In the past, serving global Chinese families across multiple languages and generations was a business that relied heavily on individual experience and was extremely difficult to scale or replicate. For the first time, AI makes it possible for this kind of service to be globally coordinated in a systematized, platformized, and scalable framework. This is why we believe one of our most important long-term positions is not only to be a wealth management institution, but to become a global wealth management platform serving Chinese high-net-worth families around the world. Over the past two decades, the logic to drive growth in the wealth management industry was clear but linear: one more relationship manager meant more revenue; one more client relationship meant more assets.
This logic worked well in the past, but it also meant that the industry's expansion was structurally constrained by labor costs and overall management of the organization. Our view is that AI is fundamentally changing this equation. It is not simply adding another efficiency tool; it is redefining the front-office structure of the wealth management industry. In the past, wealth management was primarily driven by a single RM model. Today we are gradually forming a new model driven by the collaboration of three front-office engines. First, AI-enhanced relationship managers. RMs remain the most important long-term driver of strong client relationships, but AI is significantly enhancing their ability to cover clients. In the future, RMs will focus more on deep client engagement rather than repetitive process work. Second, AI wealth management departments. This is a new type of front-office team that we are actively building.
The AI wealth management department does not rely on traditional headcount expansion. Instead, it uses AI to drive client operations, content services, allocation support, and global collaboration, enabling a lighter organizational structure to serve broader client needs. Singapore is the first fully developed testing ground for this model. Over the past quarter, AUA in Singapore grew by approximately 192% year over year and revenue generation per capita reached 8.5x. This is the first validation that without materially expanding the number of relationship managers, AI can elevate individual service capacity, breadth of coverage, and professionalism of asset allocation by an order of magnitude. Third, AI plus ecosystem expansion. We believe the future of wealth management will not belong only to the internal RM systems of large institutions. More and more independent financial advisors, family offices, and external professional firms need a platform that can provide a global asset supply chain, an AI workbench, a compliance foundation, global execution capabilities, and brand credibility.
We are gradually building this ecosystem. We believe these three engines will together form our growth drivers going forward, and the future competitive landscape of the wealth management industry will no longer be defined simply by who has more RMs, but by who has stronger AI capabilities, who has a more complete global compliance network, who has deeper customer context data, and who has more replicable platform-based service capabilities. This is our most important strategic vision for 2025 and 2026. Based on this strategic vision, we have made substantive progress at three levels. First level: enhancing organizational efficiency. Last year, while maintaining stable net revenues, our total headcount declined by approximately 11% compared with 2024. In the first quarter of this year, headcount further declined by approximately 3% quarter over quarter. Behind this is the gradual embedding of AI into key areas such as client interaction, content generation, and operational processes, enabling the same revenue scale to be supported by a more streamlined organization.
This is the first direct evidence of returns on our AI investment. Second level: productization of operating capabilities. Our i-RM platform officially went live in the third quarter of last year. It covers client research, generation of allocation recommendations, service record keeping, and content output, and is being integrated in parallel across our four booking centers. AI is no longer just a back-office tool; it is becoming a collaborative partner for our RMs. Third level: reconstruction of the operating model itself. AI is not a PowerPoint concept for our organization. It has already become a new operating system that can generate real business results and has the potential to be replicated globally. Supporting these AI capabilities is the global foundation we have already built. Our three global platforms, Arc, Olive, and Glory, support client and account execution, asset management, and insurance, trust and inheritance services.
And our four booking centers in Shanghai, Hong Kong, Singapore and the United States together form our compliance and execution infrastructure. Going forward, our long-term AI build-out will continue to advance across four dimensions: clients, relationship managers, products, and governance. For the remainder of 2026, our work will continue to focus on the three priority areas clearly set out by our Chairlady in her 2025 letter to shareholders: first, expanding our overseas client base; second, further growing our global asset allocation capabilities; third, continue to optimize the revenue structure of Olive, our asset management business; and lastly, deepen AI applications in our core operating processes and gradually expand global collaboration capabilities within a compliant framework. As of March 31, we held RMB 5.13 billion in cash, cash equivalents, and short-term investments, maintaining a healthy balance sheet with zero interest-bearing debt.
The board announced a dividend proposal for approval at our shareholders meeting, including a special dividend that brings the total payout to 100% of full-year 2025 non-GAAP net income. Subject to approval at the June 11 meeting, the plan will be implemented. This would extend our shareholder return framework for a third consecutive year based on 100% of non-GAAP net income. We will continue to invest in globalization and building AI capabilities while maintaining financial discipline. We are still in the midst of our transformation. The short-term pressure points are visible, but the logic of our long-term operating model is becoming clearer than ever before. The first quarter is not the destination; it is more like a starting point where our new operating model is beginning to be validated. We are evolving from a traditional wealth management institution into an AI-driven global platform serving Chinese families around the world.
This process will not happen overnight, but our direction is becoming increasingly clear. Thank you. I will now hand the time over to our CFO, Pan, to review our financial performance in greater detail.
Thank you, Zhe, and good day to everyone joining us. The first quarter of 2026 marked a solid start to the year and continued progress on our transition toward a more investment-led and quality-driven global wealth management platform. I would like to highlight three key messages. First, while total revenue remains stable, the quality of our revenue mix improved meaningfully, driven by strong growth in investment-related fundraising fees and performance-based income. Second, disciplined cost management and structural efficiency initiatives delivered substantial operating leverage; operating profit increased significantly and operating margin expanded further. Third, reported net income was affected by non-operational volatility. This mainly reflected mark-to-market accounting adjustments on a specific listed investment recorded under income from equity affiliates. Excluding that specific mark-to-market impact, non-GAAP net income would have reached RMB 162 million, up 28% year over year.
For the first quarter, total net revenue was RMB 626 million, up 1.8% year over year. This stability was achieved despite a deliberate 49.9% reduction in insurance-related revenue as we continued to optimize our business mix. One-time commissions were RMB 113 million, up 5.9% quarter over quarter. Within this, commissions from newly raised investment products increased to RMB 53 million, up 46.1% year over year and 41.6% quarter over quarter. Recurring management fees were RMB 379 million, down 3.4% year over year and 2.5% quarter over quarter. Performance-based income reached RMB 100 million, up 253% year over year, primarily driven by strong realization from RMB-denominated private secondary products. Overall, the quarter further demonstrates our continued shift toward a higher-quality investment and revenue structure. Our lean operating model continues to deliver measurable financial results with AI increasingly serving as the structural driver of our productivity.
Total operating costs and expenses declined to RMB 389 million, down 9.2% year over year and 18.1% quarter over quarter. As of the end of the quarter, group headcount was 2.6 thousand, down 10.4%, leading personnel costs to decline 12.2% year over year to RMB 267 million. This reflects productivity gains rather than business contraction. Our AI strategy focuses on improving output per capita and operational efficiency. AI-driven tools now support client engagement, automated reporting, suitability processes, and routine workflows that previously required manual intervention. This enables us to scale global operations while maintaining disciplined cost control and service quality. SG&A expenses were RMB 103 million, down 10.8% year over year and 35.1% quarter over quarter. Total operating costs and expenses were RMB 389 million, down 18.1% compared to last quarter. As a result, operating profit increased to RMB 236 million, up 27.1% year over year.
Operating margin, therefore, expanded to 37.8% compared with 30.3% in the first quarter of last year. Excluding government subsidies, operating profit was RMB 202 million, up 33.7%. These results highlight the stability of our platform and financial benefits of our structure optimization. Below the operating line, investment, interest and other income totaled RMB 19 million. Interest income was RMB 32 million. Investment income was negative RMB 2 million. Foreign exchange loss was RMB 6 million. And contingent expenses were RMB 3 million. Share of losses from equity affiliates was RMB 65 million. As a result, non-GAAP net income attributable to Noah was RMB 134 million with a margin of 21.4%. Total transaction values reached RMB 23.3 billion, up 44.8% year over year and 37.5% quarter over quarter. U.S. dollar-denominated private secondary products reached US$1.293 billion, up 161% year over year, while RMB-denominated private secondary products reached RMB 5.3 billion, up 61% year over year.
This fundraising momentum directly supported the growth in investment-related commissions and reinforced our strategy. As of the end of the quarter, group AUM was RMB 140.2 billion and AUA was RMB 233.5 billion. Total AUM and AUA at the group level declined, yet our U.S. dollar-denominated base continued to grow. Overseas AUM reached US$6.2 billion, up 5%, and overseas AUA reached US$9.6 billion, up almost 6% year over year. Total Diamond and Black Card clients reached 9.03 thousand. Overseas Diamond and Black Card clients reached 1.78 thousand, up 3.8% quarter over quarter, reflecting continued traction in overseas markets. Our balance sheet remains strong and highly liquid. As of the end of the quarter, cash and cash equivalents were RMB 4 billion, and short-term investments were RMB 834 million. Total assets were RMB 11.6 billion and total liabilities were RMB 1.7 billion. Our asset-liability ratio remained low at 14.5%, and our current ratio was 4.8x, providing ample flexibility for growth and shareholder returns.
We believe our current market valuation does not fully reflect the strength of our balance sheet, the resilience of core earnings and the scalability of our operating model. With shareholders' equity of about RMB 9.9 billion, the company is trading at roughly 0.5x book value while delivering an annualized return on equity of approximately 5.4%. In our view, this does not adequately reflect our intrinsic long-term earnings potential. Since the beginning of 2020, we have repurchased 2 million ADS for approximately US$20 million, representing about 2.7% of outstanding shares. Since launching the program, we have cumulatively repurchased 3 million ADS for over US$35 million. Plus, we have declared to distribute 100% of our non-GAAP net income as dividends for the third consecutive year. These actions reflect management's confidence in the company's intrinsic value and our commitment to enhancing long-term shareholder returns.
So in summary, the first quarter reflects disciplined execution of our strategic transition. Revenue quality improved, operating leverage strengthened, and AI-driven productivity gains continued to enhance structural efficiency. While reported earnings were influenced by non-operational volatility, the underlying health of our core business continues to improve. With a fortress balance sheet, a leaner and more scalable operating platform, and continued capital returns through share repurchases, we believe the company remains fundamentally undervalued relative to its intrinsic strength and long-term earnings potential. We remain fully committed to disciplined execution, prudent capital allocation, and sustainable long-term value creation. Thank you, everyone. We will now open the floor for questions.
Thank you, Pan. Thank you, Mr. Yin, for the presentation. And operator, please open the floor for questions.
分析師問答
Thank you. We will now begin the question and answer session. If you are using a speakerphone, please pick up the handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please do so. Your first question today comes from Calvin Leon from Citi. Please go ahead.
Great. I will quickly translate my question. Thanks for taking this. This is Calvin from Citi. Last Friday, China tightened the regulations on cross-border brokerage businesses. What is management's view on the evolving regulatory landscape on this front? And what is the potential impact to Noah's domestic market business? Considering a few offshore brokers were cited by regulators regarding unauthorized brokerage businesses, what is management's take on the compliance risk in the domestic market going forward? Thank you.
Let me do the translation.
As CEO, I can confirm that the company has paid attention to this news. However, we emphasize that this is not exactly new, but more like a reinforcement of an existing rule that has been introduced to the market a couple of years ago. We would like to emphasize that the company has always complied with legal requirements under different jurisdictions, and particularly for the overseas accounts that have been opened they are all under the compliance requirements of, for example, Hong Kong, including full KYC requirements. Also, the money transferred into these investment accounts is from legitimate financial institutions and is subject to Hong Kong Monetary Authority regulations, meaning the funds are from validated financial institutions. Having said that, the securities business's revenue contribution to the company is rather small. All in all, we do not see material impact to Noah's business model. We must once again say that all of our operations under different jurisdictions have always complied with legal requirements.
We serve high-net-worth Chinese families around the world. To supplement the answer, the company has been paying close attention to these newly executed rules and the situation, and we have immediately reviewed our internal procedures applying to the SFC requirements. We are very comfortable saying that we are fully compliant with legal requirements, not only in Hong Kong but across Singapore, the USA and all of our booking centers. Different from some securities online platforms, what we serve is the global Chinese high-net-worth segment, which is a slightly different business model. The securities business contributes less than 1% to our total revenue. We further emphasize again that all money transferred to investment accounts is from overseas banks; none of the money transferred into the investment accounts is from domestic Chinese banks. We are slightly optimistic that this could be an opportunity for Noah because we have always been compliant with regulations. iNoah, which is our app for securities trading, and all the operational and technical support systems are hosted in overseas markets such as Hong Kong.
For iNoah, we have no employees based in the domestic market. Again, we are fully compliant with the requirements of regulators such as the CSRC and SFC. The company is already reviewing the referral requirements for business from domestic to overseas according to legal advice.
Calvin, I hope that answers your question.
Thank you.
Your next question comes from Peter Zhang from JPMorgan. Please go ahead.
Thanks for giving me the opportunity to ask this question. This is Peter Zhang from JPMorgan, and I have two questions. First, I noticed that wealth management product transaction volume has picked up sequentially in the first quarter, which is a really good trend. We are wondering what is the operating trend in the second quarter? Do we see continued strong investment sentiment among our clients and how's the client demand for domestic and overseas investment products? Secondly, my question is on the cost side. We have really good cost control in the first quarter. I am wondering whether management can share what is the full-year guidance for our headcount growth and operating expense trend? Thank you.
Thank you, Peter. To answer your questions, we will divide the response into two parts: the domestic market and the overseas market. We must admit that investment sentiment is often affected by the overall market situation, and that is why we have seen that in 2025 and into 2026 the investment sentiment has improved a lot compared to two years ago. However, what we have been doing is not just reacting to market conditions. We are promoting the idea of helping clients diversify their assets across different classes and products so that they can build better portfolios, and we are seeing progress in the domestic market. For the overseas market, one of the keys for a wealth management company is access to good products. According to our CIO reports and market developments, AI-related investment themes have been important, and we have different products that are AI-related from infrastructure to AI companies. We are promoting the same idea of helping clients with asset allocation for better portfolios. With these quality products on hand, we expect improved sales allocations. In terms of selling ability, we are now using AI to support RMs in client risk analysis, so we are promoting products based on specific client needs rather than mass promotion as in the past. This should enhance the efficiency of our selling and ultimately improve results for the company.
We remember the real history of Noah. We have been talking about protecting our clients' assets before pursuing growth. In 2022, and in 2023, we positioned for capital flowing to overseas markets. Since last year, we have emphasized AI, and for this year we emphasize AI infrastructure products. What we are demonstrating is that we are a real wealth management company: we focus on making sure our clients' assets are well protected and ultimately grow. Compared with many peers, we always track how much profit our clients make every year; that has been a key KPI for our staff. The company cannot control all external factors like market capitalization or whether the size of the company grows drastically. However, if we look at what we have been doing for our clients, given 62 consecutive quarters of non-GAAP profitability and the right decisions we have made historically, we are confident that we will continue to perform and be recognized by the market.
I'll take Peter's second question on costs. We do not have a set agenda or fixed targets for frontline headcount changes; although we have seen a decline in the number of RMs, that has been performance-driven. We are still achieving much higher fundraising volume because of higher quality and higher efficiency. So we do not expect intentional shrinking of the frontline team; we want to ensure they are fully occupied and able to generate enough volume, as the CEO and Chairlady mentioned. There may be selective hiring opportunities given the current policy environment, and we will fill key roles in key markets as needed. At the same time, we are targeting mid- and back-office efficiency improvements, especially with AI tools. Many positions that were previously pure labor can now be consolidated or merged into fewer positions, which leads to significant optimization in the mid- and back-office structure. From the standpoint of the full year, we do not expect huge expansion in headcount, but we will make targeted hires in key markets and continue to invest in AI and technology.
Thank you. Very clear. Okay. Thank you.
Your next question comes from Yumin Tang from CICC. Please go ahead.
I will translate my questions. This is Yumin Tang from CICC. I have two questions. First, transaction value, client numbers and RM numbers: overseas business declined—could you please talk about the reasons? You mentioned overseas business has moved from a licensed setup to formal operation. What is the growth outlook for this segment going forward? And my second question is about AI. The AI wealth management department in Singapore has delivered much stronger revenue generation and client service efficiency. Could you please talk about how AI helps RMs develop their business? Thank you.
So about your question on overseas business performance, we do see a sequential drop in the first quarter; however, on a year-over-year basis we still see growth, as reflected in the numbers.
We believe the sequential change is a normal variation across different quarters. Regarding how AI has been enhancing our RMs, we have already touched on this earlier. We are now much more focused and accurate in matching certain products to certain clients. We can better distinguish client segments, which improves efficiency in product recommendations and resource allocation. We have introduced a Noah-Pay rewarding system since late last year, which provides targeted rewards to clients and focuses on higher-quality clients. Overall, this means our selling methodology is better aligned with our booking resources. As you may be aware, we are basically fully licensed in Hong Kong. In Singapore, we have different types of licenses under MAS regulation and we are applying for the asset management license as well. Regarding the U.S. booking center license, it is one of the important steps completing our development of strategic booking centers. After the license was granted, we are now working on the details of redeploying business in that market, and we believe it will be a very important strategic move for the company.
A note to analysts: when you analyze the company in the future, perhaps number of RMs should no longer be the primary indicator of our business scale. Because of AI enhancements, human RMs are increasingly supported by systems. We have built AI-led wealth management departments that can support clients without materially increasing human headcount. We are also developing the AI-plus ecosystem, working with external professionals to expand client reach under the AI-supported wealth management system. Singapore is a good example: it is a small but highly competitive market with high RM costs, which made it an appropriate testing ground for AI. We achieved 191% growth in AUA in the first quarter in that market, which is why we plan to apply the same system across other overseas markets. Ultimately, we expect to apply this model in the domestic market as well, although historical structural limitations and different regulatory environments may slow rollout domestically. Nonetheless, AI application in overseas markets should bring significant results in the near future.
Is there any more questions? There are no further questions at this time. This concludes our question and answer session.
I would now like to turn the conference back over for any closing remarks. Thank you. Thank you everyone for joining us today and please feel free to reach out to the IR team for any further questions. Thank you very much.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.