Noah Holdings’ 4Q Earnings Soar 121%

Shares of Noah Holdings, a wealth and asset management service provider in China, rose 0.8% in pre-market trading after reporting strong growth in 4Q revenues and earnings.

Noah Holdings’ (NOAH) adjusted net income jumped 121.1% to RMB262.5 million ($40.2 million) year-over-year, primarily driven by higher revenues and lower operating expenses. Operating expenses for the quarter were RMB617.8 million ($94.7 million), down 6.7% from the year-ago quarter.

Revenues soared 20.9% to RMB953.2 million ($146.1 million) year-on-year, mainly driven by an increase in one-time commission and performance-based income. This was partially offset by lower service fees. (See Noah stock analysis on TipRanks)

By business segments, revenues from the Wealth Management and Asset Management businesses grew 21.8% and 49.9%, respectively, on a year-over-year basis. However, its lending and other business revenues declined 92.9%.

For 2021, the company projects non-GAAP net income to be in the range of RMB1.2 billion to RMB1.3 billion.

Last month, Nomura analyst Shengbo Tang raised the stock’s price target to $50.18 (9.4% upside potential) from $37.97.

Tang increased his non-GAAP net income forecasts for fiscals 2021 and 2022 by 14% and 21%, respectively, to reflect Noah’s more focused efforts on business development. However, the analyst lowered his rating on the stock to Hold from Buy citing the fact that the shares of the company have risen 70% since 3Q results were reported on Nov. 30, 2020.

Overall, the Street has a Moderate Buy consensus rating on the stock based on 1 Buy and 2 Holds. The average analyst price target of $53.46 implies upside potential of over 16.5% to current levels. Shares have gained nearly 104% over the past year.

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