Wang Jingbo, Noah
Noah results (RMB)
|Q4||Y-O-Y||Full year 2017||Y-O-Y|
Noah has both asset and wealth management operations. The group’s revenue consisted of 50% from recurring management fees while one-time commissions contributed another 40%.
On the wealth management side, the firm mainly serves Chinese high net worth individuals who live abroad. The firm had 186,918 registered clients at the end of 2017, which is up 38% from a year prior, officials said during the annual financial results call today. Among them, 12,720 are active clients who purchased a product at least once during the year.
The active client base grew 5.8% year-on-year, mainly driven by the fourth-quarter promotion events. Average transaction value per client was RMB 9.2m ($1.4m), a 9.5% increase from 2016.
In terms of investment types, the best-selling product last year was fixed income, taking up 61.1% of the value of products distributed, followed by 29.2% generated from private equity products, officials said.
In the asset management operation, total assets under management as of the end of December were RMB 148.3bn, up 22.7% year-on-year.
Underserved client base
A demand and supply imbalance of investment products in China persists, said Wang Jing Bo, co-founder and chairwoman at Noah.
Total investible assets among Chinese nationals reached RMB 158trn while the size of the asset management business was only RMB 60trn, said Wang, citing data from China’s central bank. “High-net-worth individuals have strong and growing demand on professional asset management. The investors’ mentality is becoming more sophisticated, more mature and more long-term oriented,” she added.
Last year, China’s regulators tightened the regulations over wealth management practices and products in an attempt to mitigate the risk of systemic meltdown of the financial markets. Managers cannot offer investors a guaranteed rate of return, according to one prohibition in the draft guidelines for asset managers released by the People’s Bank of China.
“2017, we call it the most strict year in financial regulation,” Wang said. “Government’s supervision order was issued in an intensive manner. As the scrutiny and coordination among the regulator bodies strengthen, only the fittest will survive.”
The management forecasts that non-GAAP net income attributable to shareholders will be in the range of RMB 1bn to RMB 1.05bn in 2018, representing a yearly growth of 15.8% to 21.6%.
Big data rollout
Noah said that its internal big data platform will be put in service this year. The aim is to help relationship managers understand individual customers’ needs better. The platform will gather 363 customer profiles with around 150 labels including historical investment behaviours.
Apart from revamps in technology tools, the firm aims to enhance its investment research capability by restructuring the research team as well as the process of product development and marketing activity.
For its clients, the firm has revamped the mobile application to be a one-stop platform providing secured online trading and capital management last year. The operation loss in the internet financial service was narrowed to RMB 106.8m from RMB 180m, its financial results show.
Besides its headquarters in Shanghai and Beijing, the firm established overseas office in Canada and Australia this month to provide wealth management and consultancy service for Chinese wealth abroad.
Noah also has offices in Hong Kong where it is licensed as a wealth and asset manager, as well as insurance broker. Its asset management arm is Gopher Asset Management. In 2016, the firm established offices in New York and Silicon Valley, and the island of Jersey.
In 2017, AUM derived from overseas business (both asset and wealth management) reached RMB 21.7bn, up 28% year-on-year, according to Noah officials.