Net income attributable to Noah shareholders for the third quarter has increased 49.1% to RMB 285.6m ($42.1m) from RMB 191.6m during the same period last year, according to the firm’s unaudited third-quarter results.
“Net income year-to-year growth was due to increased net revenues benefiting from more one-time commissions generated from increased transaction value, and more management fees since we distributed more private equity products, combined with effective operation efficiency control,” a spokeswoman for the firm told FSA.
However, income during the third quarter was 4.7% lower compared from the second quarter this year (RMB 299.6m).
“The quarter-to-quarter decrease was due to the decline of net income of the fund of funds we manage and invest in as the general partner or manager,” the spokeswoman said, but did not elaborate.
Meanwhile, the firm’s aggregate value of financial products distributed during the third quarter of 2020 was RMB 28.8bn ($4.2bn), a 122.2% increase from the corresponding period in 2019, due to the significant increase in the distribution of public securities products and private equity products.
“Public securities transaction value grew to a record high of RMB 20.9bn, which indicates our continued success in our transformation to standardised products,” Jingbo Wang, co-founder and CEO of Noah said in the statement.
Aggregate value of products distributed (RMB bn)
|Product type||3Q 2019||3Q 2020|
|Public securities products||7.5||20.9|
|Private equity products||3.5||7.2|
In light of the Camsing incident, the firm decided to distribute more “standardised products”, including mutual funds and public securities, such as equities and bonds, to diversify its investment offerings away from alternative investments.
Sales for mutual funds, in particular, were up during the third quarter.
The transaction value for both onshore and offshore mutual funds reached RMB 14.05bn, which is 206.3% higher compared to the same quarter last year and 18.6% up from the second quarter this year, according to the spokeswoman.
Last year, around RMB 3.4bn ($492.3m) in securities sold by Noah subsidiary Shanghai Gopher Asset Management for supply chain financing for Camsing International were in danger of default. According to local media reports, the securities were allegedly backed by falsified transactions and accounts receivable with business partners including JD.com.
In August this year, Noah proposed a settlement offer to those who were invested in the troubled Camsing products.
Under the proposed settlement plan, each investor will be granted a number of restricted share units (RSUs) of Noah Holdings, typically over a period of up to 10 years. Upon vesting of the RSUs, investors will receive Class A ordinary shares of the Company, FSA previously reported.