Executive Summary / Key Takeaways

• Noah Holdings is undergoing a significant strategic transformation, shifting its focus from a restructured domestic market to aggressive international expansion, particularly targeting global Chinese high-net-worth investors. This pivot is driving substantial growth in overseas revenues and assets under administration (AUA).
• The company's financial performance in the first half of 2025 demonstrates a strong rebound in profitability, with non-GAAP net income surging 78.2% year-over-year in Q2 2025, supported by disciplined cost management and growing investment product revenues.
• Technological integration, particularly leveraging AI to empower relationship managers and clients, alongside strategic partnerships in emerging asset classes like digital yield funds with Coinbase Asset Management , are key differentiators enhancing operational efficiency and product offerings.
• Despite facing domestic market pressures and intense competition in certain segments like Hong Kong insurance, Noah maintains a robust balance sheet with RMB 5.4 billion in cash and short-term investments and no interest-bearing liabilities as of June 30, 2025.
• Management projects continued growth in overseas AUA, targeting USD 20 billion over the next three to five years, and remains committed to substantial shareholder returns, having distributed RMB 1.8 billion in dividends and buybacks over the past three years.

A Global Ark for Chinese Wealth: Noah's Strategic Evolution

Noah Holdings Limited, founded in 2005, has evolved from a pioneering wealth management service provider in China into a globally ambitious platform dedicated to serving high-net-worth (HNW) Chinese investors worldwide. The company's journey has been marked by strategic adaptation, particularly in response to evolving market dynamics and regulatory landscapes. Its core business encompasses wealth management, asset management, and comprehensive services, all underpinned by a commitment to global asset allocation.

The year 2024 represented a pivotal period of transformation for Noah, characterized by a dual strategy: refining its domestic operations while aggressively expanding its international footprint. Domestically, this involved a significant restructuring of its sales teams into independent, licensed business units—Noah Upright for public securities, Gopher Asset Management for asset management, and Glory for insurance brokerage. This consolidation reduced Noah's physical presence from 44 cities to 11, aiming to enhance operational efficiency and reduce fixed costs. Concurrently, Noah launched new international brands: ARK Private Wealth for wealth management, Olive Asset Management for asset management, and Glory Family Heritage for global insurance, trust, and comprehensive services, establishing booking centers in key hubs like Hong Kong, Singapore, and the United States.

In the competitive landscape, Noah Holdings differentiates itself through its specialized focus on global Chinese HNWIs and its comprehensive, tailored service model. While larger Chinese financial institutions like CITIC Securities (CTSTY) and Huatai Securities (HTSC) boast broader market reach and extensive domestic networks, Noah's strength lies in its deep understanding of its target clientele's unique needs, particularly in cross-border wealth management and inheritance planning. Noah's ability to provide personalized investment products and value-added services, such as investor education, fosters strong client loyalty, potentially leading to superior retention rates and enhanced cash flow generation compared to more generalized offerings. The company has rapidly become one of the top three distribution channels in Asia for flagship products from leading global general partners (GPs) such as Aris and Hamilton Lane (HLNE), underscoring its competitive standing in product selection.

Noah's technological differentiation is increasingly central to its strategy. The company is committed to leveraging artificial intelligence (AI) across its operations to empower relationship managers, clients, and middle and back-office staff. These AI initiatives are designed to significantly improve the client experience and reduce operational costs, enhancing efficiency and scalability. Furthermore, Noah is advancing its booking centers and digital platforms to foster cross-border synergies in client outreach, product integration, digital infrastructure, and risk controls. This technological investment is crucial for maintaining a competitive edge against rivals, some of whom, like Huatai Securities, are known for their technology-driven solutions.

A significant technological and strategic move in Q2 2025 was Noah's partnership with Coinbase Asset Management to establish a stablecoin yield fund. This initiative marks Noah's entry into digital asset-related product lines, aiming to capture opportunities in this rapidly growing emerging asset class. The company views this as opening new growth engines for clients' global asset allocation strategies, with future expansion opportunities in compliant digital asset fund management. While acknowledging the inherent risks in digital assets, Noah emphasizes prudence and compliance, advising clients to allocate a small portion (1% to 5%) of their total assets to such products, positioning itself as a bridge to provide compliant digital asset products. This move aligns with the broader industry trend of technology-driven deflation and the increasing importance of AI-related investments, as highlighted in Noah's CIO report.

Financial Resilience Amidst Transformation

Noah Holdings' financial performance in the first half of 2025 reflects the positive impact of its restructuring efforts and overseas expansion. In the second quarter of 2025, the company reported net revenues of RMB 630 million, with income from operations increasing by 20.2% year-over-year. Non-GAAP net income surged by 78.2% year-over-year and 12% sequentially to RMB 189 million, driven by revenue growth, disciplined cost management, and investment income. For the first half of 2025, net revenues were RMB 1.2 billion, generating non-GAAP net income of RMB 358 million, a 33.9% year-over-year increase.

The company's revenue mix continues to improve, with investment product revenue growing. One-time commissions from investment products reached their highest point in recent years, comprising over 30% of one-time commissions revenue. Overseas net revenues were a significant growth driver, reaching RMB 297 million in Q2 2025, accounting for 47.1% of total net revenue, with over 85% of newly generated revenue originating from offshore products in the first half of the year. This underscores the success of the international expansion strategy.

Operational efficiency has been a key focus. Total operating costs and expenses for the first half of 2025 decreased by 11.2% year-over-year to RMB 897 million, primarily due to a more optimal headcount structure while maintaining investments in growth areas. This efficiency contributed to an operating profit of RMB 347 million for the first half, up 35.8% year-over-year, with the operating profit margin expanding to 27.9% from 20.2% in the same period last year.

Despite these gains, the domestic market presented challenges. Mainland China's net revenues in Q2 2025 were RMB 333 million, a 1.3% year-on-year decrease, though a sequential increase of 7.3%. The decline in domestic asset management revenues (down 10.6% in Q2 2025) was attributed to lower recurring service fees from existing Renminbi-denominated private equity products. Similarly, domestic insurance revenues saw a significant 38.7% year-over-year decrease in Q2 2025 due to a strategic decision to reduce promotion of these products. However, the recovery in the Asia market did drive a substantial improvement in the domestic public securities business, with net revenues increasing 12.8% year-over-year to RMB 132 million in Q2 2025, fueled by a 185.3% year-over-year surge in transaction value for Renminbi-denominated private secondary products in the first half of the year.

Noah's balance sheet remains robust. As of June 30, 2025, combined cash and short-term investments totaled RMB 5.4 billion, and the company carries no interest-bearing liabilities. This strong liquidity position provides a solid foundation for continued overseas expansion. The company has also demonstrated a strong commitment to shareholder returns, cumulatively distributing over RMB 1.8 billion through dividend payments and share buybacks over the past three years. Management plans to distribute annual and special dividends totaling RMB 550 million in July 2025, representing 100% of its non-GAAP net income for 2024, signaling confidence in future operations.

Strategic Outlook and Growth Drivers

Noah Holdings' outlook is firmly anchored in its "refining domestic, expanding international" strategy. The company's second-half 2025 priorities include concentrating on high-net-worth clients, actively expanding its customer base in mature financial markets like the U.S., Canada, and Japan, enriching global product offerings, and enhancing operational efficiency through AI integration.

The overseas business is expected to be the primary growth engine. The overseas relationship manager team expanded to 152 by the end of Q2 2025, a 34.5% year-on-year increase, with plans for continued growth. Overseas AUA grew 6.6% year-over-year to USD 9.1 billion in Q2 2025, and the company aims to grow overseas AUA to USD 20 billion over the next three to five years to offset the anticipated decline in domestic management fees from expiring private equity products. This aggressive target underscores the company's commitment to its global vision.

The strategic partnership with Coinbase Asset Management (COIN) for a stablecoin yield fund highlights Noah's proactive approach to emerging asset classes and its commitment to offering cutting-edge investment experiences. This move is expected to open new growth engines and capture opportunities in the rapidly evolving digital asset space, further diversifying its product portfolio.

While the domestic market faces headwinds from a declining management fee base and intense competition in insurance, the recovery in the Asia market and increased investor confidence in secondary products offer some offset. Noah's domestic strategy focuses on reactivating dormant clients and acquiring new ones, leveraging its restructured business units. Management views 2024 as a "bottoming out" year and anticipates "some rebounding" in 2025 as the overseas business ramps up and the domestic market recovers.

Risks and Competitive Headwinds

Despite a clear strategic direction, Noah Holdings faces several pertinent risks. Global financial market volatility, exacerbated by geopolitical risks and tariff policies, remains a significant concern, potentially impacting investor sentiment and transaction values. The Hong Kong insurance market continues to be highly competitive, with non-compliant operations posing a challenge, though Noah's focus on compliance and large, customized policies aims to mitigate this.

The transition to a new sales model, where clients interact with sales personnel from different business units, requires time for adaptation and presents a near-term challenge. Furthermore, the anticipated decline in recurring service fees from existing Renminbi-denominated private equity products is expected to impact overall revenue growth in the next three years, necessitating successful execution of the overseas expansion strategy to offset this. The inherent risks associated with digital assets, despite Noah's emphasis on compliance and prudent allocation, also warrant close monitoring.

In the competitive arena, Noah's specialized focus, while a strength, means it operates against larger, more diversified financial institutions. While its client-centric approach and expertise in cross-border wealth management provide a competitive moat, it must continually innovate and scale its overseas operations efficiently to compete effectively on all fronts. The influx of labor into the overseas insurance market from collapsed onshore platforms also intensifies competition.

Conclusion

Noah Holdings Limited is executing a transformative strategy, repositioning itself as a leading wealth management platform for global Chinese high-net-worth investors. The company's aggressive overseas expansion, coupled with a disciplined domestic restructuring and a forward-looking embrace of technological differentiators like AI and digital assets, forms the core of its investment thesis. The strong financial performance in the first half of 2025, marked by surging non-GAAP net income and expanding operating margins, provides tangible evidence of this strategic pivot's early success.

While challenges persist in the domestic market and competitive pressures remain intense, particularly in the Hong Kong insurance sector, Noah's robust balance sheet and commitment to shareholder returns underscore its financial resilience. The company's clear vision to grow overseas AUA to USD 20 billion over the next three to five years, supported by its expanding product matrix and strategic partnerships, positions it for sustainable long-term growth. Noah's ability to leverage its unique bond with Mandarin-speaking HNWIs and its technological leadership in a compliant framework will be critical in realizing its global ambitions and unlocking further shareholder value.