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Noah Holdings pivots overseas amid domestic slump
Chinese wealth manager Noah Holdings is increasingly relying on its international business as its domestic market faces headwinds from a sluggish economy and shaky investor confidence, its Q1 2025 earnings call revealed.
Why it matters: The company's performance offers a window into how China's high-net-worth individuals are navigating global volatility, prioritizing geographic diversification and liquid assets while facing greater tax scrutiny at home.
By the numbers:
- Net revenue: RMB 615 million ($85M), down 5.4% year-over-year. ()
- Non-GAAP net income: RMB 169 million ($23M), up 4.7% YoY, driven by significant cost-cutting. ()
- Overseas revenue: Now makes up 49.5% of the company's total, a significant jump from 24% a year ago. (, )
- Domestic revenue: Fell 9.4% YoY. ()
- Operating costs: Dropped 18.8% YoY, boosting profitability. ()
Reality check: Management is actively working to boost shareholder value, noting the stock trades below its cash-per-share value. ()
- The company plans to distribute RMB 550 million in dividends, representing 100% of its 2024 non-GAAP net income and a 12% yield at its current price. ()
- This follows a $50 million share buyback program announced last year. ()
What they're saying:
- On global expansion: Noah is growing its teams of relationship managers in Singapore, Southeast Asia, the U.S., Japan, and Canada to capture more clients abroad. The number of overseas relationship managers is up 44% from last year. ()
- On client demand: Investors are favoring liquid products like structured notes and are showing strong interest in AI-themed funds. (, )
- On tax concerns: CEO Mr. Yin acknowledged that Chinese tax authorities are contacting wealthy clients about their overseas assets, viewing it as an "opportunity" to provide more comprehensive wealth planning. ()
Between the lines: The insurance business is a key challenge, especially in the hyper-competitive Hong Kong market where revenue has fallen. ()
- Noah's strategy is to focus on larger policies and build a new commission-only agent team to regain momentum. (, )
What to watch: The company's strategy for 2025 hinges on continued global expansion, investing in AI technology, and revamping its product mix to meet evolving client needs.
- "The biggest mistake a wealth manager can commit today is thinking past experiences can guide future decisions," Yin said. ()
The bottom line: Noah is managing a difficult transition by cutting costs, doubling down on its global footprint, and adapting its services for a more cautious and internationally-minded client base.
Full Transcript
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Operator: This event is being recorded.
Operator: I would now like to turn the conference over to Jolene, IR.
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Jolene: Good morning and welcome to Noah's 2025 first quarter earnings call.
Jolene: Joining me today, we have Ms. Wang Jingbo, co-founder and chairlady.
Jolene: Mr. Mr. Yin, co-founder
Operator: Ladies and gentlemen, it appears we've lost connection with our speaker line.
Operator: Please wait while we reconnect.
Operator: Thank you for your patience.
Operator: You may begin the presentation.
Jolene: Sorry for the technical interruption.
Jolene: Uh, today's call will be divided into three parts.
Jolene: Mr. Yin will begin with an overview of our business highlights, followed by Mr. Pan, who will discuss our financial performance.
Jolene: After the two presentations, there will be a Q&A session.
Jolene: In addition, please note that the discussion today will contain forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially from those in our forward-looking statements.
Jolene: 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.
Jolene: Noah does not undertake any obligation to update any forward-looking statements, except as required under applicable law.
Jolene: Without further ado, I shall pass the call to our CEO, Mr. Yin.
Yin Zhe: 我将与大家分享对于2025年第一季度整体市场情况和诺亚经营结果的一个总结。
Yin Zhe: 接着谈一谈境外和境内业务发展策略和分板块的业绩。
Yin Zhe: 最后会报一下对2025年余下季度的一个规划。
Yin Zhe: 2025年第一季度,诺亚的CIO报告预测,今年全球市场发生剧烈波动的概率会加大,频次也会提升。
Yin Zhe: 驱动因素包括特朗普重返白宫,给全球贸易和地缘政治带来的不确定性。
Yin Zhe: AI大模型军备竞赛火热,并向下游应用的延伸等等。
Yin Zhe: 我们的建议客户的战略资产配置关注以下四个方面。
Yin Zhe: 第三个,财富管理者要构建一个反脆弱的系统,来管理和传承自己的财富。
Yin Zhe: 最后就是尽快采取战略性的行动,来调整战略性的资产配置。
Jolene: Let me do the translation.
Jolene: Good morning, everyone.
Jolene: Today, I will share a summary of overall market conditions and our results for first quarter 2025.
Jolene: Then I will walk you through our overseas and domestic performance and strategy, followed by our insights and outlook for the rest of the year.
Jolene: Our Q1 CIO report predicted that an increased likelihood of severe market volatility this year with a higher frequency of such fluctuations.
Jolene: The main factors influencing this include the uncertainty that Trump's return to the presidency is having on global trade and geopolitics.
Jolene: The lack of coordination among major global economies on monetary policies and the increasingly fierce competition and downstream application of AI.
Jolene: With this in mind, our advice to clients is to adopt the following four approaches to their asset allocation.
Jolene: Firstly, maintain discipline asset allocation and prioritize geographic diversification.
Jolene: Secondly, remember investing is not the same as managing wealth.
Jolene: Wealth management aims for the best overall results.
Jolene: Thirdly, wealth managers need to build robust portfolios to manage and preserve wealth.
Jolene: And lastly, take decisive action and adjust asset allocation when needed.
Yin Zhe: 在复杂的国际经济环境下,我们在1季度保持了稳健的业务的表现。
Yin Zhe: 我们的non-GAAP净利润达到1.69亿元,同比增长4.7%,环比增长27.4%。
Yin Zhe: 得益于我们运营成本的显著下降,运营成本同比下降达到了18.8%。
Yin Zhe: 在收入方面,我们人民币私募二级产品的募集量同比增长了257.7%。
Yin Zhe: 境外私募投资产品募集量同比增长27.7%,同比收入同比增长20.3%。
Yin Zhe: 本季度,我以各个业务的BU为主要维度,向投资者更新各条线的业绩和运营的状况。
Jolene: Despite the tough global economy, we had a solid quarter.
Jolene: Non-GAAP net income in first quarter was RMB 169 million, up 4.7% from the same period last year and 27.4% sequentially.
Jolene: This was due to operating costs and expenses dropped by 18.8% from last year.
Jolene: On the revenue side, transaction value for our RMB denominated private secondary products grew a remarkable 2.6 times from last year.
Jolene: Revenue contribution from these products increased 9.4%.
Jolene: Transaction value for overseas private investment products also increased 27.7% with revenue contributing growing 20.3%.
Jolene: Revenue from overseas insurance products fell 22.8% from last year.
Jolene: This resulted in total net revenue in Q1 falling 5.4% from the same period last year.
Jolene: I'll now dive into the performance and operations of each business unit.
Yin Zhe: 境外业务方面,一季度,境外业务净收入3.04亿元,环比实现了5%的增长。
Yin Zhe: 我们境外客户经理人数131人,同比上升了44%。
Yin Zhe: 我们会继续扩大理财师的队伍,加速发展新加坡及其他东南亚市场。
Yin Zhe: 并在美国、日本、加拿大等高净值的华人聚集的境外市场,构建当地的销售团队。
Yin Zhe: 我们境外的AUA、AUM和管理费收入均持续获得增长。
Yin Zhe: 并且我们在境外持续扩充无底薪的保险经纪人队伍。
Yin Zhe: 在一季度已经组建了75人的团队,并贡献了约1000万元的收入。
Yin Zhe: 目标在2025年打造150人的团队,将其作为境外拓展境外保险业务的新的增长点。
Yin Zhe: Ark国际财富管理板块,一季度实现净收入1.62亿元,同比下降9.2%。
Yin Zhe: 主要是因为香港保险市场竞争激烈,香港保险业务分销收入下降。
Yin Zhe: 境外AUA达到90.5亿美元,同比增长8.7%。
Yin Zhe: 一季度,境外注册客户数超过18200人,同比提升15.8%。
Yin Zhe: 其中活跃客户数超过3300人,同比增讲23.3%。
Jolene: For our overseas performance, net revenues were RMB 304 million in Q1, up 5% from last quarter and flat from the same period last year.
Jolene: It made up 49.5% of the group's total revenue.
Jolene: Revenue from overseas investment products grew 20.3% from last year, while revenue from overseas insurance products fell 22.8%.
Jolene: We now have 131 overseas relationship managers, up 44% from last year.
Jolene: We plan to grow the team and further expand market in Singapore and Southeast Asia.
Jolene: We shall also build up our sales team in countries with high net worth Chinese, like the US, Japan, and Canada.
Jolene: Overseas AUA, AUM, and recurring service fees continue to grow.
Jolene: Our overseas commissions-only insurance agent team have already recruited 75 agents in first quarter, whom have already generated about RMB 10 million in revenue as well.
Jolene: We aim to expand this team to 150 agents by end of this year, where they will be a new growth driver for our overseas insurance business.
Jolene: Net revenues from overseas wealth management were RMB 162 million in Q1, down 9.2%.
Jolene: This was due to strong competition in Hong Kong.
Jolene: Overseas AUA reached US dollar 9.05 billion, up 8.7% due to growth in private equity products.
Jolene: This made up 28% of total AUA, up from 24% last year.
Jolene: We made good progress in getting new overseas clients.
Jolene: As of end March, we have over 18,200 registered overseas clients, up 15.8%.
Jolene: With over 3,300 active overseas clients, up 23.3% compared to the same period last year.
Yin Zhe: Gopher国际资产管理板块,一季度实现净收入1.12亿元,同比上升22.3%。
Yin Zhe: 主要是我们AUM增加带动相应管理费增长所贡献。
Yin Zhe: 境外AUM达到59亿美元,同比增长14.2%。
Yin Zhe: 其中,私募股权基金占境外AUM的比例为78%,规模达到46亿美元,同比增长16.4%。
Yin Zhe: 私募信贷基金、基建基金、对冲基金及结构化票据等产品受到客户的欢迎。
Yin Zhe: 我们相应加强了全球人员布局及美国产品中心的建设。
Yin Zhe: 目前已发展至一支超过50人的专业国际产品筛选和投资团队。
Yin Zhe: 在Glory Family Heritage综合服务板块,一季度实现净收入0.3亿元,同比下降了17.8%。
Yin Zhe: 香港保险行业的从业人员的数量在过去一年显著增加。
Yin Zhe: 我们聚焦拓展大客大单,并把合规和保护客户保单的安全放在第一位。
Yin Zhe: 香港和新加坡大单的平台首年保费均持续的提升。
Yin Zhe: 如前面所述,我们会继续组建无底薪的经纪人队伍,为新客拓展带来新鲜血液。
Jolene: Net revenues from overseas asset management in Q1 were RMB 112 million, up 22.3% from last year.
Jolene: This was mainly due to growth in AUM and recurring service fees.
Jolene: Overseas AUM was US dollar 5.9 billion, up 14.2%.
Jolene: This made up 29% of total AUM, up from 24% during the same period last year.
Jolene: AUM for overseas private market products was US dollar 4.6 billion, up 16.4%.
Jolene: It made up 78% of overseas AUM.
Jolene: Our private market products are growing.
Jolene: They include private credit funds, infrastructure funds, hedge funds, and structured products.
Jolene: We have a strong team of over 50 people in our US product center for overseas product selection and investment.
Jolene: Net revenues from overseas insurance were RMB 30 million, down 17.8%.
Jolene: This was due to lower distribution of overseas insurance products.
Jolene: The Hong Kong insurance market is very competitive.
Jolene: It has many new insurance agents and some who are not compliant.
Jolene: We focus on large large clients, compliance, and policy safety.
Jolene: This helped raise average first-year premiums in Hong Kong and Singapore.
Jolene: We are also creating new marketing models.
Jolene: Our goal is to grow the team of commission-only agents to 150 people by the end of 2025.
Jolene: This will help us to get new clients.
Yin Zhe: 境内业务方面,一季度,境内业务净收入贡献3.1亿元,同比下降9.4%。
Yin Zhe: 主要是存量人民币私募股权类的产品的管理费收入以及境内保险产品分销收入下降所导致。
Yin Zhe: 但是人民币私募二级产品延续了上季度的增长走势,募集量和收入均有大幅提升。
Yin Zhe: 境内继续推进各板块主体端到端的做实,正行、歌斐和荣耀保险各自发展。
Yin Zhe: 诺亚正行基金销售板块,在一季度实现净收入1.27亿,同比增长7.1%。
Yin Zhe: 一季度,人民币私募二级产品募集量达33亿元,同比上升257.7%。
Yin Zhe: 人民币公募基金募集量43亿元,同比下降51.4%。
Yin Zhe: 我们也在推进在线营销和在线服务来提升经营的效率。
Yin Zhe: 歌斐资产管理板块,一季度实现净收入1.67亿元,同比下降14.3%。
Yin Zhe: 主要是存量人民币私募股权类的产品到期,管理费收入下降。
Yin Zhe: 在一级市场,歌斐持续推动存量资产的退出和分配。
Yin Zhe: 在一季度,歌斐实现了13亿元的私募股权的资产的退出。
Yin Zhe: 目前私募股权资产AUM973亿,占境内AUM的比例是91.3%。
Yin Zhe: 在二级市场,歌斐资产持续关注发展和建立人民币资产,通过境内跨境的ETF获取全球市场的beta收益产品的一个规模。
Yin Zhe: 境内荣耀保险板块,一季度实现净收入644万,同比下降65.6%。
Yin Zhe: 我们持续的在调整产品的方向,探索以医疗和养老为主的产品,并重新组建销售队伍,进一步扩大无底薪经纪人队伍的规模和产能,来回归传统无底薪经纪人的模式。
Jolene: Net revenues from mainland China were RMB 310 million, down 9.4%.
Jolene: This was due to lower recurring service fees from private equity products and distributions of domestic insurance products.
Jolene: However, RMB denominated private secondary products continued to grow.
Jolene: Transaction value and revenue from these products increased significantly.
Jolene: Noah, Upright, Gopher, and Glory are independent now and can use their own strategies.
Jolene: Net revenues from domestic public securities were RMB 127 million, up 7.1%.
Jolene: Transaction value of RMB denominated private secondary products in Q1 was RMB 3.3 billion, up 2.6 times.
Jolene: Transaction value of RMB denominated mutual funds was RMB 4.3 billion, down 51.4%.
Jolene: Noah Upright currently has branches in 10 cities.
Jolene: Plus, we have been using online marketing and online services to improve operational efficiency.
Jolene: Net revenues from domestic asset management in Q1 were RMB 167 million, down 14.3%.
Jolene: This was due to lower recurring service fees from existing RMB denominated private market products.
Jolene: In the primary market, Gopher focused on managing exits and distribution of existing assets.
Jolene: In Q1, it recorded RMB 1.3 billion exits from private equity market.
Jolene: Private equity market assets AUM was RMB 97.3 billion.
Jolene: It made up 91.3% of domestic AUM.
Jolene: In the public market, Gopher focuses on beta returns from global markets.
Jolene: We are doing this through cross-border denominated ETFs.
Jolene: This drove transaction value in Q1 to a new height of RMB 140 million.
Jolene: Net revenues from domestic insurance in Q1 were RMB 6.4 million, down 65.6%.
Jolene: This was due to lower distribution of domestic insurance products.
Jolene: We are adjusting product mix and focusing on more medical and elderly care insurance products.
Jolene: We are also restructuring sales and building a commission-only agent team.
Yin Zhe: 2025年,诺亚将继续在以下几个方向的努力。
Yin Zhe: 第一,坚持地域和业务的并重,持续拓展不同国家和地区,确保当地全面的合规作业。
Yin Zhe: 第二,在国际市场上,客户端扩大理财师队伍,加速当地的获客的能力。
Yin Zhe: 三,在在线端,投入AI人工智能等科技的建设,持续提升在线服务客户的一个能力。
Yin Zhe: 四,在产品端,我们首先是增加保险业务的活力,建设无底薪经纪人销售队伍,以应对市场的竞争。
Yin Zhe: 第二个是通过信托、迁居出海等业务,来提振综合服务客户的端到端的能力。
Yin Zhe: 那第五,就是在投资端,进一步的建设研究和产品的团队,完善产品矩阵,提升资产配置方案的构建的能力。
Yin Zhe: 2025年,我们看到市场风高浪急,财富管理变得越来越重要。
Yin Zhe: 三,不要忽视地缘政治的冲突和内外政治的风险。
Yin Zhe: 财富管理者在今天的市场中最容易犯的错,就是以过去,以为过去的经验可以指导的未来。
Jolene: Our priorities for 2025 will be, firstly, balancing quality and quantity while expanding into new markets with full compliance.
Jolene: Secondly, growing our overseas teams of relationship managers to speed up local client onboarding.
Jolene: Thirdly, investing in technologies such as AI to improve online services.
Jolene: Fourthly, on product side, we shall commit to grow insurance sales by building a new team of commission-only agents to compete better.
Jolene: On the other side, company will also offer wider range of products such as trust, relocation, and cross-border solutions to enhance our client services.
Jolene: Last but not least, strengthen research, product teams, and product mix.
Jolene: Market volatility will stay high in 2025.
Jolene: Wealth management is more important than ever, which has become high net worth clients' essential needs.
Jolene: We therefore would advise our wealth management clients to, number one, keep expanding overseas investment channels.
Jolene: Two, hold assets that fight against inflation.
Jolene: Three, monitor geopolitical risk closely.
Jolene: And lastly, stay flexible in capital and ready to act quickly.
Jolene: To conclude, the biggest mistake a wealth manager can commit today is thinking past experiences can guide future decisions.
Yin Zhe: 接下来我请潘青为大家详细介绍集团整体的财务表现。
Jolene: I will now pass over to Grant to go over our financials in more details.
Pan Qing: And greetings to everyone joining us today.
Pan Qing: I'd like to begin my sharing with an overview of our recent share price performances.
Pan Qing: Management is fully aware that our stock has been trading with an upward pressure for the past few quarters.
Pan Qing: At only around 0.5 times PB and under cash value.
Pan Qing: Our cash reserves alone represents US dollar 11.4 per ADS, exceeding our current stock price.
Pan Qing: And our PE ratio is only around nine times, well below industry average of 12 to 16 times.
Pan Qing: While continuing to focus on regaining the growth after transformation of the wealth management organization, we have also in the past few quarters introduced several initiatives to enhance shareholder returns, including the US dollar 50 million share buyback program announced in August last year.
Pan Qing: As of today, we have already repurchased over 1.3 million ADSs, equivalent to over 2% of total issued shares.
Pan Qing: Furthermore, as part of our commitment to prioritizing shareholder interests and delivering sustained returns, we'll plan to distribute annual and special dividends totaling RMB 550 million in July, subject to AGM approval.
Pan Qing: This amount represents 100% of our non-GAAP net income for 2024 and offers a dividend yield of 12% based on current share price, which is much higher than the 7 to 9% average dividend yield range among leading international financial institutions.
Pan Qing: Notably, this makes the second consecutive year that the company would distribute 100% of its net income.
Pan Qing: Since 2022, three years in aggregate, we would have distributed a total of RMB 1.8 billion dividends to our investors, roughly equal to 40% of current market cap.
Pan Qing: The continuous sharing of high dividend payout is expected to be sustainable based on our estimated future operations and our strong balance sheet position.
Pan Qing: By the end of quarter one, cash, cash equivalent had increased to RMB 4.1 billion with short-term investments of RMB 1.3 billion, which has been highly liquid and have fewer than three months of maturity on average.
Pan Qing: Our current ratio improved to 4.8 times, while the debt to asset ratio remains stable at 14.5% with no interest-bearing debt.
Pan Qing: Although we have set up our global expansion recently with the new opening up of Tokyo office, revisiting the reopening of Canadian market and Australian market, we also want to reassure the investors that our organic expansions are capex light in nature.
Pan Qing: Of course, we understand that investors are eager to see the signs of our growth.
Pan Qing: There's no denying that the transitioning of a business model has been challenging for 2024, particularly given the uncertainties in the global investment market, which have affected our financial performances.
Pan Qing: But besides balance sheet performance, more importantly, starting in Q1, we're seeing things that are on the right track with significant progress in building our teams and infrastructure in a more cost-effective transformation strategy ensures that our business remains profitable with operating profits and non-GAAP net income both growing on a sequential and year-on-year basis.
Pan Qing: While we're not yet at the finish line, these strategic initiatives are steadily laying the groundwork for improved performance and future growth opportunities.
Pan Qing: Let's now dive into the details of our financials.
Pan Qing: First of all, the bottom line, as we continue to implement rigorous cost control measures during the quarter, with total operating costs and expenses coming in at RMB 429 million, a decrease of 18.8% year-over-year and 16.7% sequentially.
Pan Qing: Specifically, with our great effort in simplifying our back office structure, compensation benefits decreased by 21.8% year-over-year and 14.1% sequentially.
Pan Qing: Selling expenses fell by 18.1% year-over-year and 35.3% sequentially.
Pan Qing: And G&A expenses also falling both year-over-year and sequentially.
Pan Qing: Operating profit surged by 63.1% year-over-year and 35.2% sequentially to RMB 186 million in the first quarter, with the operating profit margin up to 30.3% from 21% in the previous quarter.
Pan Qing: Non-GAAP net income was 169 million for the first quarter, an increase of 4.7% year-over-year and 27.4 sequentially.
Pan Qing: Despite strong performances gained especially in the US dollar investment products as Zander mentioned earlier, we have to see that domestic market is relatively operating weaker and also some of the slowdown in insurance revenue causing our net revenues to RMB 615 million during the first quarter, slightly down 5.4% year-over-year and 5.7% sequentially.
Pan Qing: But notably, overseas net revenues accounting for almost half of total revenues were up from 44.5% in the previous quarter.
Pan Qing: By region, net revenue from overseas were RMB 304 million in the first quarter, a slight drop year-over-year of 0.8%, yet an increase of 5% sequentially, driven by a modest improvement in insurance sales.
Pan Qing: domestic net revenue during the first quarter decreased by 9.4% year over year and 14.3% sequentially to IMB 310 million, largely dragged by the sluggish performance in insurance under the low interest environment and decrease management fee revenue from domestic private equity products.
Pan Qing: By revenue type, during the quarter, one-time commissions decreased by 15% year over year, but increased by 17% sequentially, primarily driven by overseas insurance sales rebounded comparing to last quarter.
Pan Qing: Recurring service fees decreased by 5. 5.3% year over year and 5.8% sequentially due to reduction in domestic revenue from R&B private equity products, which also affected performance based income in a decrease of 42.1% sequentially.
Pan Qing: But it did increase by 98.4% year over year, driven by a significant increase in overseas asset management as the overseas business become increasingly established and mature.
Pan Qing: When it comes to total transaction volume, total transaction values in the first quarter were R&B 16.1 billion, down 14.7% year over year and 0.9 sequentially.
Pan Qing: Transaction value of domestic private secondary products was R&B 3.3 billion during the quarter.
Pan Qing: That sees a significant increase of 257% year over year and 34.6% sequentially.
Pan Qing: Transaction value of R&B denominated products in the first quarter declined.
Pan Qing: However, transaction value of US dollar denominated products reached US dollar 1.1 billion, up 15% sequentially, but down 4.6% year over year.
Pan Qing: and accounting for 50% of total transaction volume compared to only 43% in the previous quarter.
Pan Qing: Benefiting from the enhanced competitiveness of the overseas alternative investment products portfolio, US dollar private equity products total US dollar 201 million, up 7.9% year over year and 17% sequentially.
Pan Qing: And USD private secondary products, excluding cash management products, total US dollar 112 million, up 187.8% year over year and 211.8% sequentially.
Pan Qing: During the first quarter, US dollar denominated AUM grew by 14.2% year over year and 0.8% sequentially to US dollar 5.9 billion.
Pan Qing: With US dollar denominated AUA increased by 8.7% year over year and 3.6% sequentially to US dollar 9.1 billion, reflecting our ability to capture a larger share of clients' US dollar wallets for investment products.
Pan Qing: At the end of the first quarter, our client base remained stable in terms of core clients, diamond and black card clients with 900 9,330.
Pan Qing: The overseas client base continued to grow to over 18 18,200 overseas registered clients, an increase of 15.8% year over year and 3.1% sequentially.
Pan Qing: The total number of overseas diamond and black card clients now exceeds 1600.
Pan Qing: To sum up, we must admit that under the current global dynamics with the potential tariff war and the low interest rate environment in mainland China, it weakens the investors' investment sentiment, which may be the biggest hurdle to the industry's revenue growth.
Pan Qing: However, with a developed business structure and a more mature overseas team, we're still confident that our company is well positioned ourselves for future growth.
Pan Qing: Thank you all again for your trust and support.
Pan Qing: With that, I will now open the call to your questions.
Operator: We will now begin the question and answer session.
Operator: To ask a question, you may press star then one on your touchtone phone.
Operator: If you are using a speaker phone, please pick up your handset before pressing the keys.
Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
Operator: At this time, we will pause momentarily to assemble our roster.
Operator: The first question today comes from Helen Lee with UBS.
Helen Lee: 第一个问题是，最近我们看到国内有一些高净值客户，他们收到税务局的一个补税通知，我不知道这个事情会不会影响咱们这边高净值客户他们在海外的一个资产配置的一个需求，那最近就是
Helen Lee: 咱们从高净值这边有没有听到他们的一些担忧啊，或者是未来就是在资产配置方面的一些想法。
Helen Lee: 然后第二个问题就是在这个季度，我们看到运营费用其实有一个非常显著的下降。
Helen Lee: 然后这个运营费用的下降，其中有多少它是和比如说这个季度就是募集量这个指标是挂钩的，然后另外就是其他的一些下降，主要是来自于哪些原因？
Pan Qing: I'm from Helen Lee from
Pan Qing: 我来，我来回答第一个问题，我顺便翻译一下你的问题吧，Helen，好不好？
Pan Qing: Thank you for your first question.
Pan Qing: That's actually related to recent news of some of the probably domestic high net worth clients receiving notices from tax bureaus about their overseas taxation information.
Pan Qing: So I'll I'll try to take the first step of the question and then there and Nora will jump in for anything that I probably missed.
Pan Qing: Uh yeah, we we're seeing uh many or hearing many of our clients or their friends, you know, receiving um calls from tax bureaus, but uh the the information about uh gathering uh high net worth actually all the Chinese tax residents, uh taxation on overseas income has been implemented a few years ago.
Pan Qing: Uh but obviously, I I think uh the the bureau probably now has uh more collected uh information that they'll be able to actually reach out to these individuals.
Pan Qing: Obviously, I I think it's probably um the law is always there as some of the tax professionals advise our clients uh to be aware of.
Pan Qing: But the actual enforcement uh of uh these information or, you know, self-filing probably something new uh to our clients.
Pan Qing: I don't think it necessarily affect their sentiment in terms of future investments uh in overseas uh products especially.
Pan Qing: Uh but obviously, I think they are more aware or curious about future uh tax planning, if you will, how to increase the efficiency uh in in terms of investment income.
Pan Qing: That's something new, probably some new subject uh for this generation of high net worth individuals who are probably more used to, you know, filing for tax on their domestic and operating operational income.
Yin Zhe: 确实刚才潘总讲的，就是我们很多客户的话，都收到了一些那个电话询问税务局的。
Yin Zhe: 那这也是诺亚现在的一个，对诺亚来说也是一个机会，因为我们在这三个业务大的板块，财富管理、资产管理和那个heritage, family heritage上面，其实在传承保障上面的话，其实我们的服务其实构建的还是可以满足客户的部分这方面的需求。
Yin Zhe: 而且从这个角度来说，其实也拉近了我们跟客户之间的一个更深度的一个关系，因为如果假设讲到税收的话，其实客户他可能需要我们给他做一个整体的一个解决方案，哪怕不尽是是，我们还有很多的合作伙伴一起。
Yin Zhe: 所以说对我们来说的话，可能会增加我们对客户的钱包深度的一个那个更加的一个渗透。
Yin Zhe: 当然这个阶段性来说，对客户来说的投资可能会有一些些的一个那个放缓，因为它需要把这些事情理顺。
Yin Zhe: 但是从中长期来说，对客户来说，我们觉得对我们的业务发展是非常有利的一个机会。
Interpreter: Okay, let me do a quick translation on here.
Interpreter: Uh what just added, uh it's a it's a challenge but it's also opportunity to Noah regarding our high net worth clients getting phone calls from the tax bureau.
Interpreter: The reason behind that is because if you look at uh what we've been doing for our clients, the wealth management, the asset management and their family heritage business, all of that are trying to provide solutions to our clients to how to protect their wealth.
Interpreter: And also, uh when they are receiving uh the phone call from tax bureau and they need to solve the issue, they will need to build a closer relationship with our relationship managers because uh we'll go into their wealth as a whole to plan for them uh for the future.
Interpreter: And that means we can have a better access to clients' wealth and knowing better about their whole planning.
Interpreter: So yes, in short term, there may be a challenge because that affected their investment sentiment.
Interpreter: However, in the long run, we do believe that it can bring opportunities to the company.
Pan Qing: Uh Helen, I'll do a quick translation for you as well.
Pan Qing: Helen actually asked about, you know, we have um an improved efficiency or reduction on TNA and selling expenses in this quarter, and she's actually wondering uh how much of that has to do uh with probably, you know, lower activity of marketing uh events as well as the reduction of uh probably, you know, back office accounts.
Pan Qing: Um so Helen, I I just wanted to clarify that uh you know, obviously some of the expense reduction does come from uh an improvement in efficiency, especially in mid back office accounts, probably optimized um around 25% uh compared to the same period last year.
Pan Qing: Uh as the continued effort to improve the efficiency and structure uh of mid back office to the front office is now showing effect.
Pan Qing: Uh we're also seeing a reduction in selling expenses, but that that's partly attributed to probably fewer uh marketing activities this quarter, in the first quarter.
Pan Qing: Uh we don't think that's necessarily sustainable and that's rather not a direction we're trying to control.
Pan Qing: As long as we are holding these events more efficiently.
Pan Qing: So we're seeing uh more marketing events coming up in the second quarter, but we're obviously still trying to keep that under reasonable range uh and also the effectiveness of marketing activities.
Pan Qing: Helen, does that uh answer your question?
Operator: As a reminder, if you would like to ask a question, please press star then one to join the question queue.
Operator: The next question comes from Peter John with JP Morgan.
Peter John: 呃，感谢管理层给我提问的机会，我是摩根大通的Peter。
Peter John: 第一个是我我们观察到4月份以来市场波动加剧，我们想请教一下诺亚这边客户的最新的趋势、投资情绪以及交易量的趋势。
Peter John: 另外，我们我们知道诺亚的一部分客户也是企业主，我们想请问他们的经营、业务经营和投资情绪是否有受到最近关税的影响，这是第一个问题。
Peter John: 第二个问题我是想问一下海外业务这块的，我想请教一下就今年我们管理层看到海外业务的主要的驱动产品是哪些品类的产品？
Peter John: 第二就是在海外保险这块，我们在二季度有没有看到复苏的迹象？
Peter John: Uh thanks for congratulations on the first quarter results and thanks for giving me the opportunity to ask question.
Peter John: I have two questions.
Peter John: First is about the uh recent market uh volatility.
Peter John: We we noted that there there's a uh increasing market volatility in since April and we are wondering what's the client's behavior in terms of investment sentiment and uh uh their uh their their their their purchase on the wealth management products.
Peter John: In addition, some of Noah's clients are uh the business owners.
Peter John: We are wondering whether any of their uh uh business is affected by the recent tariff uh introduction and how's their investment sentiment uh uh go uh sentiment change.
Peter John: My second question is about the overseas business.
Peter John: Uh uh can management uh give us an some guidance on what what will be the key driver for your overseas overseas business year 25 and uh uh on insurance front, we are wondering whether you uh Noah see any sign of improvement in uh overseas insurance in second quarter.
Yin Zhe: 确实在一季度的话，关税的贸易的那个波动会影响的话，对我们的客户还是有那个影响的。
Yin Zhe: 我们客户的话，很多都是那个私人，私人企业家。
Yin Zhe: 所以他们也有很多的业务是牵涉到是跟那个贸易相关的。
Yin Zhe: 那么但也要区分，也不是所有的，我们也在一季度的话，跟很多的客户进行了调研，这个走访。
Yin Zhe: 那他们呢，如果假设是，比如说我们说那个有一些义务小商品的地方的那个企业家，虽然说订单是在关税以后的话是急剧的下降，甚至于那个暂停。
Yin Zhe: 但是呢，他们觉得未来的话，中国的那个这种那个柔性生产制造的成本的优势啊，是非常强的，所以说，而且他们的那个利润的margin空间，小商品的margin空间是很高的，所以说他们并不担心。
Yin Zhe: 但对于一些零部件，那个核心零部件的一些那个中间件的这些厂家的话，确实他们受到这些那个影响，关税的影响的话，还是挺挺挺担心的，所以说这是客户的话，也要根据他们的行业来来来区分的。
Yin Zhe: 那总的来说的话，客户也逐渐那个反应了，就是要那个全球地域的一个资产的一个分部，再加上一个均衡的配置一个理念吧。
Yin Zhe: 我觉得这是一个，这是一个不可逆的一个过程，客户的话是持续的一个需求，这是那个关于客户的方面的一个影响。
Interpreter: Yes, the trade war to create impact to our clients.
Interpreter: When we talk to our different types of clients, um the the I mean the the impact could be slightly different.
Interpreter: So yes, a lot of our clients are entrepreneur and uh their business may related to trade.
Interpreter: However, when we talk to um uh merchants like uh the evil the the small manufacturing products, those types of uh company, yes, they do uh we do see that some substantial in orders from overseas or we do see uh some worries about uh the uh orders from overseas projects.
Interpreter: However, the merchants themselves they're very pretty pretty confident in their own products and they believe that the China's production is very competitive in this way and uh could maintain a high margin.
Interpreter: And that's why the impact of the trade war on those clients to us to be quite uh uh in a short term instead of a long run impact.
Interpreter: But then uh for some more like not a small product, if they are really a big bigger types of uh manufacturer, they may have a bigger concern about their future growth.
Interpreter: So uh we believe that um our clients did get they're getting more and more used to the concept that uh they need to have their assets go through the global electric uh global electric uh uh uh distribution.
Interpreter: And they also are planning for their own business to grow overseas as well.
Interpreter: And under these two beliefs, we we believe that our clients are getting more mature and that the trade war impact should be uh rather limited.
Yin Zhe: 然后在投资上面的话呢，我们也看到客户在最近一段时间的投资的话，更偏向于就是流动性，他比较关注流动性的这些产品。
Yin Zhe: 所以这也是我们那个在产品结构当中的话，发现结构化的产品，像SN啊这些，那个，还有一些的话就是比如说他有semi流动性的，semi liquidity的，就是那个就是可以那个定期有开放赎回的一些那个产品，private equity, private credit啊，infrastructure这种我们的产品的话，其实客户的话还是比较那个那个比较那个青睐的。
Yin Zhe: 那还有一个呢，就是客户也逐渐接受那个看到AI整个的大趋势，所以说我们在那个AI的各行各业长期的那个跟这个AI主题相关的类型的产品，其实也是客户比较那个关注的，尤其是像我们一季度二级市场的增长，当中有一些Hedge Fund，它是跟AI相关的主题的话，其实客户是非常的愿意去配置的。
Interpreter: And in terms of the product side, uh we see we're seeing that investors are getting more concerned about liquidity.
Interpreter: So what does that mean?
Interpreter: Means that when they are picking investment products, the product tends to be uh to be structured products like SCN or some products that are not semi with liquidity.
Interpreter: That means that they can have a chance to do the redemption over different periods of time.
Interpreter: So uh we tend to see that this type of product can be more popular among our investors.
Interpreter: And on the other hand is about the trend of AI development.
Interpreter: And we have also seen that any investment product that could have this uh AI idea behind could be rather popular among our investors as well.
Yin Zhe: 那在保险方面呢，确实那个一季度受到那个香港保险市场的一个竞争。
Yin Zhe: 所以说我们的话那个不管是其实从去年一季度开始就是有不管是同比还是环比的话，还是有一些压力和挑战的。
Yin Zhe: 那我们的应对策略的话是聚焦在客户上面，就真正给客户提供那个价值。
Yin Zhe: 我们推出了一些跟保险公司合作定制一些产品，推出一些大客大单的一个优惠，就是客户的话，他可以通过合规的合那个合法的途径来享有就是他在首年或者四年的保保费的那个减免，这样方式的话来保障他的一个那个那个整个的那个保障的一个安全。
Yin Zhe: 那么从实际效果来看的话，我们在1季度的客单价，就是进军的首年保费得到了一个显著的一个提升。
Yin Zhe: 从过去的话大概接近10万的话，那个在大客大单上面的话提升到大概18万19万这样。
Yin Zhe: 所以说，其实对客户来说的话，我们希望通过适度的部分的人，但是整个的把单价单进军单价的话，那个那个真正给客户的一个保险的安全。
Yin Zhe: 其实对客户来说的话，其实我们也发觉中国的客户，华人客户其实在保障配置上面的话，他的重保障还是有空间和配置不足的，所以说从这样一个市场动荡的情况之下的话，我觉得持续的跟客户那个进行那个我们说那个现在建立的一个金字塔的一个模型，那个建安全垫，稳基本盘，投资增长点，那这三个那个给客户的话，逐渐从整体的资产配置的角度，我觉得是一个比较那个客户越来越有年性的一个策略。
Yin Zhe: 那在海外投资方面，就是我也发觉客户现在越来越关注那个在海外投资方面的一个产品的一个配置。
Yin Zhe: 过去的话，因为美元的利率的话是比较高的，所以说客户出海第一站以后，他的钱的话那个什么都不做，放在银行存款是一个比较好的选择，但是现在的话，利率的话都有会有波动啊，会下降的一个预期吧，所以说客户的话开始逐渐开始寻找海外多元各种各样的多类别的资产的那个投资的一个需求，所以说我们也看到其实我们的产品，伴随着我们产品矩阵的不断的完善，我们的客户在各种各样的产品上面的话，其实都有设置，那最近的话从客户的沟通还是市场活动的角度来说的话，也是客户对投资性的产品的兴趣和需求那个是非常大的。
Interpreter: Okay, on the insurance side, as mentioned five times already, uh the Hong Kong market is very challenging and very competitive.
Interpreter: So what we've been doing is back to basic, that is to serve our clients.
Interpreter: Uh what we do is uh we partner with insurance company and tailor made products for our clients.
Interpreter: And for those with uh uh high premium, we provide discounts on a legit uh basis.
Interpreter: That and uh we received a good result on that, which is uh the premium we received for clients for the first year has been increased substantially from in the past around 100,000 to currently around 190,000.
Interpreter: So, uh we've seen that this is a great opportunity for the company to deal because when we look at the Chinese clients, uh most of them is still quite insufficient about getting enough uh protect in their wealth.
Interpreter: So we believe that uh we should keep on building the relationship and selling this insurance product to our clients.
Interpreter: Uh for overseas investment, that is another part of the product that we've seen clients have great interest.
Interpreter: Because in the in the past, uh US rates stayed quite high and uh keeping a fixed deposit is already a good return for our clients.
Interpreter: However, under the current interest rate cut cycle, uh we have seen that clients are moving their interest into some investment products.
Interpreter: So we believe that uh we have a balanced product diversification in the near future.
Peter John: I have a follow up.
Peter John: Thank you very much.
Interpreter: Operator, can you check if there is any more questions from our audience?
Operator: Operator, can you check if there is any more questions from our audience?
Operator: Otherwise, we'd like to close the call uh now.
Operator: Once again, if you would like to ask a question, please press star then one to join the question queue.
Operator: Seeing as there are no questions, I'd like to turn the conference back over to the company for any closing remarks.
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