Noah Holdings: On The Right Track After Major Strategic Changes In 2020

Noah's standardized wealth management products became a revenue driver in 2020

Digital transformation

In addition to its business strategy, Noah Holdings has also performed well in risk control management and therefore attracted more investors.  

Since 2014, the company has faced several risky events that were resolved from lopsided risk control management. For example, in July 2019, Noah Holdings provided a supply chain financing up to CNY 3.4 billion to Camsing. But the actual controller of Camsing was criminally detained for suspected fraudulent activities, and the relevant credit fund was postponed as a result. Finally, Noah holdings offered a settlement plan to the investors of Camsing Products by issuing a fixed number of the company's restricted share units (the 'RSU') for consecutive 10 years. As of December 31, 2020, approximately 67.5% of the Camsing investors had accepted the settlement plan, representing approximately 70.6% of the total outstanding Camsing fund balance.

What's more, the Camsing incident further highlighted the seriousness of Noah's internal risk control situation – the weak ability of proactive management of assets.

Noah has been facing negative scenarios since 2014

These risky incidents certainly hindered Noah Holdings' development, but it also refined the company's strategy to improve understanding based on the needs of clients and correct track for its brand positioning. Therefore, since 2020, the company has engaged in digital transformation, strengthening risk management, and improved customer experience.

Digital product mix of Noah Holdings

Noah Holdings' comprehensive digital transformation has significantly reduced its operating costs and improved its efficiency. Specifically, its annual operating costs reached CNY 2.05 billion, a 17.3% decrease from the calendar year of 2019. Its operating costs account for 61.9% of revenue, a decrease of 11.13% YoY. The most direct manifestation of the digital transformation is in the company's wealth management, as its operating costs in the sector declined by 17.7% and elevated its profitability.

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Disclaimer: Please consult your own advisor before making any investment decision. 

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