Kenny Lam - Group President Jingbo Wang - Co-Founder, Chairman and Chief Executive Officer Ching Tao - Chief Financial Officer

Sam Dubinsky - Carlson Capital, L.P. Polar Zhang - BOC International Holdings Limited Henry Liang - Goldman Sachs

Good day, ladies and gentlemen. Welcome to the Noah Holdings Limited Second Quarter 2016 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following management’s prepared remarks there will be a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. After the close of the U.S. market on Monday, Noah issued a press release announcing its second quarter 2016 financial results, which is available on the company’s IR website at http://ir.noahwm.com. This call is also being webcast live and will be available for replay purposes on the company’s website. I would like to call your attention to the Safe Harbor statements in connection with today’s call. The company will make forward-looking statements, including those with respect to expected future operating results and expansion of its business. Please refer to the risk factors inherent in the company’s business and that have been filed with the SEC. Actual results may be materially different from any forward-looking statements the company makes today. Noah Holdings Limited does not undertake any obligation to update any forward-looking statements as a result of new information, future events, or otherwise, except as required under the applicable law. The results announced today are unaudited and are subject to adjustments in connection with the completion of the company’s audit. Additionally, certain non-GAAP measures will be used in our financial discussion. A reconciliation of the GAAP and non-GAAP financial results can be found in the earnings press release posted on the company’s website. I would now like to hand the call over to Kenny Lam, Noah’s Group President. Please go ahead.

Thank you, operator. Thank you to all investors and analysts for participating in our earnings conference call today. Joining me today are Ms. Jingbo Wang, Chairman and CEO; and Ms. Ching Tao, Noah’s CFO. For today’s agenda, I will start by providing an overview of our latest financial highlights and walk you through the performance of our core wealth and asset management businesses. I will then talk about the development of Noah’s mid- and back-office capacities. After that Chairman Wang will provide an update on the product strategy and group’s strategic positioning. Lastly, Ching will provide further insights into our financial performance in the second quarter of 2016. After that, we will be happy to take any questions at the end of our prepared remarks. First of all, I am pleased to report that both the operational and financial performance in the first-half of 2016 was in line with our expectations. Net revenues in the first-half of this year were RMB1.2 billion, a 22.8% increase from the corresponding period in 2015. And non-GAAP net income was RMB412 million, up 24.1% year over year. We distributed a total of RMB52.6 billion of wealth management products in the first-half of this year, relatively flat from the same period a year ago. Total assets under management as of June 30, 2016 across the RMB100 billion mark, up 57% a year ago. In the context of a challenging macro-economy, volatile capital markets and heightened risk aversion among investors, we are pleased to have delivered steady results in the first two quarters of 2016. The good performance was primarily attributable to our continuous efforts to optimize product and service offerings with increasing differentiation and innovation. Our achievements in the first-half of this year further consolidated our leading position in China’s wealth and asset management in this industry. Entering into the second-half of 2016, we see investor sentiment recovering from one to two quarters ago which implies more opportunities for Noah in the rest of the year. We are very confident about meeting 2016 financial guidance and business targets. Noah’s wealth management business provides global wealth investment and asset allocation services to high net worth individuals and enterprise clients in China. By the end of June 30, 2016, Noah’s registered clients reached 114,870, up 8.8% from the first quarter and 40.2% from the same period last year. The number of registered clients who bought Noah products totaled around 5,000 in the second quarter. In the meantime, strong client trust at Noah has translated into more contribution from active clients. This was actually reflected in the increase in average transaction value per client, which improved by 7.7% year on year and 12.3% quarter on quarter to RMB5.63 million in the second quarter of 2016. We believe that high net worth clients will prefer personalized one-on-one services, so we continue our assets and expanding branch network and an improving service capacity of our relationship managers. By the end of the second quarter, we had 175 offices, covering 68 cities. At the same time, our RM team remains quite stable and the headcount expanded 14.7% year on year to 1,093 by the end of last quarter. We’re improving retention and loyalty by continuing to provide professional training to relationship managers and expanding marketing activities to build our client base. As a result we had zero-turnover of top performing relationship managers during the past quarter, a reflection of our industry leading position in talent, training and retention. Moreover, more than 100 of our best performing relationship managers will go to the Silicon Valley this month to participate in a week of training focused on investments in hi-tech and technology innovation, giving them an opportunity to deepen their understanding of the latest developments in the U.S. VC industry. Our new family office and discretionary portfolio management services business had been performing very well so far this year. We have found that ultra high net worth and family office clients are more than willing to learn about and embrace asset allocation management services. They’re also motivated to learn about global asset allocation and wealth management planning. By the end of the second quarter, our family office business had managed an aggregate of 96 client accounts. There is a growing demand for overseas assets from domestic ultra high net worth clients. Noah Hong Kong has raised RMB2 billion in offshore funds during the second quarter, up 52% quarter on quarter. The number of registered high net worth clients in Hong Kong has exceeded 3,000 increasing 39% year on year and 11% quarter on quarter. By the end of the second quarter, our overseas AUM reached RMB14.8 billion, a 10% increase from the first quarter and a 75% increase from a year ago. In the meantime, we started laying out our event-driven investment strategies. Brexit, as an example, has led to an abrupt adjustment of excess valuation that many European companies had before. We’re trying to seize this kind of opportunities by structuring even-driven funds and buying undervalued distressed assets amid the consolidation and restructuring wave in Europe. William Ma and P.V. Wang, our CO-CIOs of Gopher are collectively in charge of rolling out and implementing these new strategies. These new initiatives reflect our efforts in strengthening our asset management capacity and attracting talents that begun to contribute to our business in a meaningful way. Since Noah Hong Kong was founded in 2012, we’ve been constantly devoting resources to development of our global open product platform, implementation of a global strategy and delivery of quality professional service with a global reach for our clients. Recently, Noah received license for trust operations in Jersey Island to establish our trust in Jersey to conduct the offshore businesses [ph], making us the very first independent Chinese wealth management company to be licensed for trust business outside of Hong Kong and China. In addition to that, our Noah U.S. office was recently opened in Silicon Valley, the first U.S. subsidiary set up by an independent Chinese wealth management company. These events mark a significant milestone, not only just for Noah, but for the entire wealth management industry in China. Now, let me provide an update on Gopher Asset Management, Noah’s asset management subsidiary, established as a multi-boutique investment firm, Gopher has continuously enhanced its asset management capabilities and innovative product lines. Gopher has evolved from a single fund of funds strategy to the management of management model and then penetrated into co and direct investments to create unique value for our clients. China’s fund of funds industry was recently founded in Beijing, in which Gopher was elected its chair, which demonstrates that Gopher is now one of the most prominent alternative investment managers in China and its brand is widely recognized in the market. Last quarter, Gopher’s AUM reached a historic high at RMB101.2 billion, up 57% year on year and 6.9% quarter on quarter. Not only expanding its AUM scale, Gopher has also developed a mature product line with PE, VC products accounting for 50% of the quarter end AUM, and remaining largest asset class is Gopher, real estate funds and fund of funds accounted for 21% and secondary market funds accounted for 11%. Through a comprehensive top-down research, Gopher aims to develop a product line that not only covers the entire value chain, but also specializes in each market sub-segment. In addition to core asset allocation we have clients with sustainable investment portfolios through rigorous due diligence and screening, and fund managers. Gopher funds have been performing quite well, generating risk adjusted returns that exceeded many of its benchmarks. Its performance has been recognized by both clients and the industries. If we look at our financial performance, we can see the performance-based net revenues attributable to Gopher some 158% quarter-on-quarter to RMB24 million in the second quarter. On a final note, I want to briefly talk about key developments in mid- and back-offices. In the second quarter, we’ve upgraded, optimized and streamlined many IT administrative risk management and compliance systems. As part of our assets in enhancing our capabilities and precision marketing based on big data, several important IT system also lend light in the second quarter, including our global client app, Noah Hong Kong app, using the online platform qualified clients now can open accounts overseas, send orders to redeem mutual fund units, manage assistant [ph] portfolios at the fingertip. Furthermore, the upgrading of our internal management system, such as the core business banking system, OA system, were also fully completed. Operationally, we’ll continue to carry out matrix management to increase flexibility, optimization, and centralization and operations management, and strength the effectiveness in project execution. With regard to talent retention and extraction, we had a number of high profile hires in the second quarter. PV Wang, former partner of Adam Street; Peter Zhang, former partner of F&G Venture; Elise Huang, a 20 year veteran in high-tech industry investment in Silicon Valley joined Noah last quarter to help us build a world-class investment team. Two weeks ago, Mr. [Yi Hal Liu] [ph] was officially appointed as Noah Hong Kong’s new CEO. Before joining us Mr. Liu was the Chief Representative of New York Stock Exchange in China and before that an executive at Bank of America Merrill Lynch. Apart from us bringing industry leaders to top positions at Noah we’re always dedicating considerable resources to train our relationship managers, mid- and back-office staff as well as mid-level management. We keep promotion of an internal rotation program. We also recently kick-off a program for high-potential non-management staff to help them advance the careers, in return create a talent pool for our middle and back office functions. And it’s also worth mentioning that we launched this, so call, Noah 100 Private Banker Program to train and enable high caliber relationship managers to better serve ultra high net worth clients, family office clients and institutional clients. The ultimate goal is to train a hundred top-notch private bankers in China, who will then help Noah lay a solid foundation for next 5 to 10 years. I will now turn the call to Ms. Jingbo Wang, Chairman and CEO of Noah, to speak in Chinese and remarks will be translated afterwards.

[Interpreted] Thank you, Kenny. In the second quarter as the economy slowed and the L-shape recovery is likely to last longer, we see more risks in the market. Investors, practitioners and regulators all start to form a deeper and better understanding of the market and its inherent risks. Facing headwinds, we respect the market even more strongly than before, and we anticipate this environment may persist for sometime, which however it’s not a bad thing for us as weathering adversity allows the industry to mature. This will be very positive for the industry’s long-term development. Indeed, there exists tremendous challenges and uncertainties in the broad economy and capital markets, in order to succeed Noah must maintain a well-defined strategy distinguish between opportunities and temptations, and ensure the company’s sustainable development without any hesitation. 2016 is a critical year for us, equally important our communications with clients, screening a qualified investors, optimization of our product mix, cooperation with the best one partners, and enhancement of our risk control. Thanks to the efforts we’ve put into these areas, Noah has maintained steady improvement and profitability. We believe that under China’s new normal of slower growth, Noah should place long-term interest before short-term gains and continue to maintain high-standards of risk control, because complaint in risk management either lifelines of wealth management companies. In the first half of 2016, we witness that the economic slowdown and market volatility led to increased risk aversion and cautious sentiment among investors, forcing many into a wait and see mode. This has had a profound impact and demand for wealth management products from high net worth clients. Based on the needs of high net worth clients, Noah provides one-stop wealth management platform operate - offering a broad range of customized financial services, covering not only wealth management, but also insurance planning, trust advisory, education planning for clients and their children. At the same time, we proactively adjusted our product strategy and mix. Developing and distributing more insurance and non-real estate fixed income products. These initiatives have allowed us to achieve satisfactory results, despite the challenging market condition to the first half of this year. Based on our semi-annual results and current business trends, we are confident that we commit our guidance set out as beginning of this year. Next I’d like to talk about our products. First in private equity, Noah has maintained our leading position. Our core strategy is to partner with best fund managers in the industry. Transaction value private equity funds distributed in the second quarter reached RMB7.6 billion, accounting for 27% of total transaction value. By the end of the second quarter, Gopher’s private equity AUM reached RMB50.4 billion accounting for 50% of total AUM. Noah has established strategic partnerships with top performing fund managers in the PE/VC industry. As technology advances the new economy industry such as Internet, biotech, culture, media, consumption, smart manufacturing will all become major opportunities for PE and VC investments. In particular private equity investments compared to secondary market products a less cyclical more recently into short-term volatility, and generate better mid- to long-term returns. We believe the top 20% of fund managers will take 80% of the total gains in the industry, and that’s why selecting private equity fund managers it’s critically important. Gopher offers a complete range of private equity investment solutions including RMB and U.S. dollar fund-of-funds, co-investment funds, direct investment and family heritage funds. Regarding the secondary market, we realized it will take longer to restore market confidence then we had previously thought as a market remains volatile and the regulatory landscape remains uncertain following last year’s turmoil. However, we still hold the view that the worst the market currently is the better opportunity there is for clients to position themselves. We have established the comprehensive hedge funds platform, and continue to focus on improving asset selection and portfolio restructuring capabilities. We are pleased to see that Gopher secondary equities AUM is up 15% year-over-year, and 6% quarter-over-quarter, in the second quarter to reach RMB10.6 billion. In the first half of this year, Gopher’s major hedge fund and quantitative funds delivered superior performance and outperform the CSI300 Index by around 10% or above. While, focusing on the Asia market, we are also developing oversea secondary market products and strengthening fund of hedge funds portfolio. For example, we’ve recently launched the Gopher Asia new opportunities fund, which will explore regional investment opportunities in emerging Asia. In the first half of 2016, heightened risk aversion among investors drove up the sales of fixed income products. We have optimized our product mix in this product segment. As a result asset quality has improved significantly across fixed income product. As one example, transaction value of traditional real estate financing product is continue to decline. In the second quarter, we distributed RMB8.4 billion of non-real estate fixed income products accounting for 50% of the fixed income total, significantly higher than last year’s 19% share. We are rolling out of our comprehensive platform of insurance products, which includes global health, critical illness, endowment, ensemble life insurance policy. Our continued training of the relationship managers have increased customary demand let to healthy growth in this business. Currently, insurance products only comprises small portion of client’s portfolio, leaving significant room for future growth. Looking at our overseas business, our Hong Kong office continue to build this comprehensive product offerings, which now include venture capital, private equity, quantitative funds, hedge funds, fixed income, family office, trust and insurance services. Our goal is to provide clients with one-stop asset allocation services with global reach, which can meet the diverse demands of high net worth clients. By the end of the second quarter, Noah’s international AUM reached RMB14.8 billion, which is up 75% year-over-year and 10% quarter-over-quarter. We have actively been developing our Internet Wealth Management business with commitment to maintaining stringent risk control standard. The transformation of Cai Fu Pai has begun to bear some fruit. At the end of the second quarter, the number of registered clients on the platform was 325,000, up 146% year-over-year and up 10% quarter-over-quarter. In the second quarter alone, total products distributed by the Internet platform reached RMB5.8 billion, increasing 72% year-over-year and over 200% quarter-over-quarter. In the long run, we will continue to make efforts to build Cai Fu Pai to be one of the top Internet finance brand catering to the aspiring high net worth clients in China. Our priorities for 2016 include improving client communications and investor education. And we will continue to advocate long-term value investment and portfolio diversification to protect client’s long-term interest. In the second quarter, we launched various high-end training and investment seminars attracting some 47,000 participants, as part of this clients attended educational seminars in Silicon Valley at Yale University in Israel, and they attended the Berkshire Hathaway annual shareholder meeting. We also offered our clients chances to come to the Noah headquarters to have face-to-face sessions with company management. Meanwhile, the Noah Foundation Care events have helped Noah to embrace clients closer as we work together on charity events. Our effective communications with clients and education seminars have helped clients understand risks and preserving grow their wealth. First rate client communication in relationship management is what makes Noah standout especially during the current challenging environment. We believe that the market adjustment would be long and persistent, high net worth clients, wealth management preferences indeed will change as a result. To provide high net worth clients with global one-stop comprehensive financial services will be the trend of the future. And this will bring us more new opportunities as we are fully ready to handle evolving market trends and demands in the years to come. Lastly, I would like to talk about China’s regulatory environment. We have seen a broad-based tightening of regulations in 2016, including the recent promulgation of new rules governing private equity funds, online wealth management platforms and peer-to-peer lending platforms. The introduction of new regulations on private fundraising was especially important. For the first time the regulators drew a clear-cut line between legitimate and illegal fundraising and issued detail rules securitizing fundraising institutions, investor suitability and fundraising process, aimed to protect the interest of investors. The new rules stipulate that in order to raise private funds, private fund managers must obtain a fund distribution license issued by the CSRC and must an accredited member of AMAC. This development is good news for disciplined wealth management institutions such as Noah. Recently, excess market liquidity couple with a shortage of good assets has led to a spate of illegal fundraising activities and the implementation of these new regulations should prevent the illegal behaviors more effectively. We believe that this new framework will have far-reaching impact on China’s wealth and asset management industry as they prompt a reshuffle of market players and ultimately eliminate competitors who don’t play by the rules. This is positive for Noah’s long term development. It is likely that 2016 will turn out to be an eventful year. Hedging portfolio diversification, long-term investment and risk mitigation are already emerging as key themes for the year. For a longer horizon, technological developments such as artificial intelligence, biotechnology and renewable energy represent the hope of the future. With our global perspective, Noah is striving to strike a healthy balance between long and short-term returns, risks and opportunities, domestic and global strategies to help our clients formulate the best solutions in cross-cycle, cross-region, cross-asset and cross-currency investments. We continue to respect the markets as foresee value and invest in the future. We will continue to look for future trends and find opportunities for our clients to capitalize on China’s economic transformation. Our ultimate goal is to help our clients achieve sustainable growth of their tangible and intangible wealth. Thank you. Now, I’ll turn the call over to our CFO, Ching Tao to review our financial results.

Thank you, Chairman Wang, and hello, everyone. Today, I’ll give you an overview of our second quarter 2016 results and then open up the call for questions. As Kenny and Chairman Wang have noted, we are pleased to have delivered solid results for the second quarter of 2016. Second-quarter net revenues increased 12.8% year-over-year or 7.3% quarter-over-quarter to RMB651.7 million. On the bottom line non-GAAP net income grew 3.3% year over year or decreased 7.5% quarter-over-quarter to RMB197.9 million. Looking more closely at our second quarter performance, we distributed approximately RMB27.7 billion of wealth management products in the second quarter, a 2% decrease from the same period a year ago, or 11.8% increase from the previous quarter. You can find a breakdown of operating metrics in our wealth management business at the back of the earnings release. Net revenues from one-time commissions for the second quarter of 2016 were RMB293.9 million, accounting for 45.1% of total net revenues and representing a 32.2% year-over-year increase from the corresponding period in 2015. The increase was primarily due to a change in the product mix in the first-half of this year compared with the same period a year ago. Net revenues from recurring service fees for the second quarter of 2016 were RMB304.3 million, accounting for 46.7% of total net revenues and representing a 28.9% year-over-year increase from the second quarter of 2015. The increase was mainly due to the cumulative effect of wealth management products with recurring service fees previously distributed by the company and the increase in outstanding assets under management. Going forward, we expect recurring revenues to account for around 50% of net revenues in the longer term. Net revenues from our Internet Wealth Management business in the second quarter were RMB11.3 million, a 34.3% decrease from the corresponding period in 2015. The year-over-year decline was primarily due to the ongoing transformation of this business. On a quarter-over-quarter basis, net revenues rose 94.9%. The sequential improvement strengthened our confidence that after the transformation Internet Wealth Management business will become an integral part of our comprehensive platform and service offerings in the long-term. We received RMB23.7 million in net revenues from performance-based income during the second quarter, compared to RMB92.9 million in the year ago period. The decline was primarily due to the decrease of performance-based income from secondary market products compared with the corresponding period in 2015. On profitability ratios, operating margin for the second quarter of 2016 was 29.8% compared to 33.5% for the corresponding period in 2015. The year-over-year decrease in this ratio was primarily because operating expenses grew faster than revenues due to growth in compensation and benefits, increased rental and related expenses associated with the relocation to the new head-office building and increased marketing expenses compared to the same period last year. The year-over-year increase in compensation and benefits expenses was mainly due to increased headcount in 2015 in response to our strong business growth. Headcount growth has slowed in the second quarter of 2016, but the substantial increase last year had a cumulative impact on our compensation and benefits expenses on a year-over-year basis. Non-GAAP net margin for the second quarter one was 29.4% compared to 33.5% a year ago. On the balance sheet, as of June 30, 2016, the company had approximately RMB1.39 billion in cash and cash equivalents, a decrease of about RMB162.8 million from the second quarter in 2015 or RMB1.08 billion from the first quarter of this year. The decrease was mainly due to a temporary impact of other current assets and liabilities. The cash outflow of RMB750 million from operating activities in the second quarter was mainly due to the same reason. Account turnover days was 64 days compared with 58 days in the first quarter of 2016. Finally, I would like to reiterate our net profit guidance for 2016. We expect non-GAAP net income to be between RMB690 million and RMB720 million for the full year of 2016 representing a 14.4% to 19.4% increase compared to the full year of 2015. This growth rate reflects the strong fundamentals and steady profitability in our core businesses. With that, Chairman Wang, Kenny and I would be happy to take any questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] At this time, we will pause momentarily to assemble our roster. And our first question comes from Sam Dubinsky of Carlson Capital. Please go ahead.

Hey, guys, thanks for taking my questions. Just on the cash on the balance sheet, it declined about 45% quarter-over-quarter to US$175 million. What exactly are the changes in current assets and liabilities?

Let me take the question and I’ll have Ching also give you more details and this is Kenny here, Sam. There’s actually a positive impact on our business. We’re building a new supply-chain finance business. And that business is actually, at the end of the second quarter, there is a short temporary impact on cash, because we were actually buying products for distribution in the supply-chain business. It’s a new buildup. It had actually a very short-term impact. The money was actually turned to us probably five or six days after the quarter. So if you look at I guess the balance sheet, now it actually doesn’t reflect that cash position. And when we look at the business, the stable part of the business of that, it’s actually going to be not requiring that amount of capital when we build up the business. This business actually was established actually in April of 2014 with invested capital of about RMB100 million. We began really building the business around early 2015. Right now, there are quite a lot of partners that we have in the supply-chain business including China Mobile and a few others. So what we’re trying to do in the second quarter is to ramp-up that business and with that some temporary impact on the cash position.

So you were to buy the product ahead of time before selling it, is that the gist?

That’s right.

Okay. And so, does that mean that cash is up next quarter or is it still going to be depressed?

I think cash will be lastly remain similar to what we see in the first quarter or maybe slightly up based on depending on our third quarter performance. But it should be…

Cash would be similar to the first - higher than Q2, but similar to Q1?

Exactly.

Okay. And then, on the investing activities, I think there is an RMB83 million investment in affiliates and also some other liabilities and whatnot. Can you just explain what are the investments in affiliates?

Some of the - whether it’s long-term investment in affiliates they represent for example, when we may be co-GP in some of the Gopher funds and we are taking 1% to 2% of the fund. So those would be booked on the balance sheet as investment in affiliates or long-term investments.

Okay. And then…

There are well over 100 Gopher funds right now. So we have a small percentage and we don’t consolidate the funds on to our financial statements.

Okay. And then, on the relationship managers, I think they declined about 4% quarter-over-quarter, despite you guys opening up nine branches. What exactly cause the declining relationship managers?

What do you see is us being very actively managing the performance of the relationship mangers, so between in the 2014 and 2015 you saw that our relationship manger grew from 700 to around 1,000. And so, overall of course over the last quarter or so, we are looking at the performance of each manager, to make sure that they reach our performance targets. We care a lot more about the quality of relationship managers and the productivity of these managers more so than the absolute number of relationship managers.

Okay. So are you letting them go or the low-performing managers leaving on their own?

We actually have what we call the Basic Law, which is quite a clear process of making sure that they meet certain performance targets that are quantitative and qualitative. If they don’t meet those targets then they will need to go.

Okay. And then, how do you think about operating margins and expenses going forward including the subsidy income?

The government subsidy income is, as we discussed in different quarters, can be volatile or fluctuating between different quarters. But over the course of the year, it tends to be stable. So in terms of the amount that you get over the course of one year versus the year before should be relatively stable and growing, because it’s actually highly linked to the growth of our business. In terms of margin, I think we are - again should [ph] because of government subsidy it fluctuates between quarters. But we are looking at a late 20s and early 30s as being a stable margin for this year.

Late 20s, early 30s, okay. And then, typically I think in this past couple of years Q2 has the high point of revenue for the year. I’m not sure if there is some seasonality in your business or is that kind of when we look going forward for the back-half, I mean, is there - like how do you think about the revenues?

For the next two quarters?

Yes, because I think in the past two years, Q2 tend to be a little bit higher for the year, than you kind of had a little bit softer in the back-half. I’m just wondering is that seasonal, does that repeat this year? When you built your guidance, what’s kind of embedded in that?

Historically, there has been some seasonality in the revenues, but I would note that if we look at the first-half of last year in 2015 and especially the second quarter of 2015. The markets were very frothy and correspondingly we get a lot of business. So I don’t know that comparing to first-half or even second quarter of last year is particularly appropriate. I would say that is not a typical type of business or market environment. At the same time, I think overall we feel that for the first-half of this year, our performance has been solid and we maintain our full-year guidance, so we are not changing guidance at this time. On the one hand, we are very pleased with our first-half performance. On the other hand, the business environment and the markets remain challenging.

Okay, my last question, just in terms of you mentioned that the equity fund was I think 10% above some benchmarks. What about the real estate and private equity, I think you said the performance has been good. Could you maybe give us some more color on what the performance was in 2015? What is year-to-date and what benchmarks you’re comparing against?

Just to - Sam, we’re just translating the question for Chairman Wang, who actually looks at this a bit more actively. On the real estate fund, you see that what we are trying to do is to basically exit on a lot of real estate funds. So what’s remaining in the real estate funds are high-quality underlying assets that we actually are comfortable with. And I think so far when we look at the performance, they are actually reached or exceeded our expectation in these cases.

[Foreign Language]

Right, so one of the properties that we own through our funds is the Gopher center in the middle of Shanghai that is actually has ready improved a lot of asset value as one example of the underlying assets through real estate fund. But the overall theme for this year is for us is to exit a lot of the lower quality underlying funds and retain the one that we see as quality and to hold for long-term. Sam?

What about the private - I’m sorry, what about the private equity performance? I’m just trying to understand like what your performance has been and…

[Foreign Language]

Yes, like just how do you compare to the benchmark?

[Foreign Language]

And actually it was just - Chairman Wang also compared with this. The private equity funds actually used a quite long duration, 7, 10 years. It’s very hard for us to judge now exactly how it’s formed, right.

[Foreign Language]

And we are quite confident, I think, Chairman Wang, if you understand the Chinese, is that we basically covered - we have a - the monopoly of the market in terms of the best ones. And so the way we covered it and the depth of the coverage has allowed us to have a lot of confidence in the performance of these funds.

Okay.

So we’re saying that we covered 18 of the top 20 funds. And within that we have a selection of what we do. And so therefore I think on the PE funds we are actually quite confident that it’s going to up on this market.

Okay. Thank you very much.

Thank you.

[Operator Instructions] Let’s take our next question comes from Matt Fortune of WFA. Please - I apologize our next question does comes from [Lan Tan] [ph] of CICC. Please go ahead.

Hi, management. Congratulations on another set of solid results. Two questions for me, the first question is regarding with the regulatory divestment. So basically recently the Chinese bank regulator put up the number 82 rule to regulate the wealth management products in bank China, which basically regulate off balance sheet products enforce China like trust companies to become a must. Can you elaborate this a bit more, what do you think the impact on independent wealth management industry and Noah like, do you think in short-term such rules like you to boost our sales or do you expect similar regulatory tightening happening our industry as well? My second question is coming from intense of the number of relationship managers, this quarter the growth is negative 4% on the sequential basis. Just want to understand what happened in the 2Q. Have you think that way aggressive talents approaching from direct competitors, who made pay more compensation? Thank you.

Okay. Just give me one second; I want to translate this properly for our Chairman, one of the questions I would love for her to answer. The second question I can take. Just give me one second.

[Foreign Language]

So I think overall just to summarize, but Chairman Wang said, I think the regulation that you mentioned actually has limited on no impact on us directly. We have shared with [indiscernible] kind of products actually in the market. I think overall, it’s actually positive impact overall for us, because it’s actually make the industry a lot more regulated, it would mean that we will have competition that are actually more likely will be playing by the rules.

[Foreign Language]

Yes, so many of these products are actually put ourselves in the market, we are actually not as complaint. And with - this kind of regulations, what we see is the - to cope with that actually now allocated to these products, will now be back to more complaint products that’s we cover.

[Foreign Language]

Yes, absolutely, I think you’re still a lot of companies are still similar things are compliant in these products and therefore we think that there will still be more cleansing in the market and with that cleansing the market, it will make the market more stable, which in turn helps a firm like us. So that’s the answer for the first question. The second question I think we answer partially just now. Basically, we are not - we are seeing - we’ve always seen competition try to poach our talent. We are known in the industry for having a leading training program for relationship managers. But I think what do you see our two things, one is the high performance relationship managers continue to be very low to us, we have basically zero churn in the high performance relationship managers, so there is no one from the high relationship - the high performance relationship manager team has left our team in the second quarter. Second is that the decrease in RM is simply our effort to make sure that we ensure the current RM is high as more productive. And therefore, we don’t want to growth skill to simple growth of RMBs. So you see that our RMBs as we said grew from 700 to now about 1,000. We think it’s time that we look at RMBs, and make sure that they are more productive instead so just kind of grow number as well for the sake of growing numbers.

Okay, got it. Very helpful. Thank you.

Thank you.

Our next question comes from Polar Zhang of BOCI. Please go ahead.

Good morning, management. This is Polar Zhang from BOCI. My question is I have noted the number of the proportion of our self-management product in our total distributed products has increased from around 60% in previous years to like 80% to 90% in current year. So my question, has the path changed, and would this change has any implication on the CRE [ph] in the future? Thank you.

Okay. So, yes, we just looking at the numbers right now, I think it’s highly depending on the product mix, if you look at last year same quarter it was actually a lot of secondary market products were distribute on our platform. I think this year the secondary market products were actually was quite a small proportion. So I wouldn’t use 80% as a stable number, it fluctuates between different quarters. I think over the course of the year, it’s going to be around 50%, 55%, if you look at what products we distribute that is self-managed, and what products if we distribute that is third-party.

Okay. My question is actually I’ve been more and more trust of PE companies; they are establishing their own wealth management arms to distribute their own products. So I’m not sure, if this is related to the lack of supply of the products for us to distribute, is it relevant?

I would say, no, and a very emphatic no, I think you see in this market, our leading players are not trying to build their own retail distribution arm, the smaller players may not have enough reach, and they may have launched family office that they distribute their own products. From our end, we don’t see any lack of supply. It’s a matter of us really ensuring the product mix is correct for the client base. And just let me also translate this for Chairman Wang, so that she can also actually give her views as well. [Foreign Language] No, she doesn’t have any more to add to what I say.

Actually, I will add something just - sorry, so I will add something so typically every quarter we have an investor presentation the slides are up on the website, and it’s Page 14 of the slide, so we have the wealth management operating statistics and we have pie chart of the bottom, basically showing what have we from the distribution in wealth management. What would be Gopher funds or what would be third-party funds. So the comment I would make is last year and before, we were typically running at about two-thirds Gopher, one-third third-party funds, but the other side of the pie has been growing consistently. That means from a product sourcing standpoint both Gopher fund, AUM is growing and also we continue to be able to source products from third-parties. In the first quarter 2016, the third-party PE felt under 10%, the Gopher is still going strong. Now in the second quarter, the third-party PE is recovered somewhat to 17%. So the third-party fund sourcing is still recovering somewhat, and we are focused not only on distilling our own funds, but also continuing to work with top fund managers in the industry to provide the best products to our clients.

Thank you, Ching and Kenny. It’s very clear.

Thank you.

Our next question comes from [Matt Fortune of WFA] [ph]. Please go ahead.

Hello and greetings, Mr…

Hi, Matt.

Hello, yes, Kenny Lam, on the March 16, 2015 conference call, you stated that Noah wants to be the Blackstone of China. Is that still the Noah Holdings business model?

Wow, you quoted me from a year ago. I have to be very careful in what I say. That’s funny. Yes, well, I think the whole idea of Blackstone just give us an aspiration to be - to ensure that we are leading in the asset classes that we choose to be in, so it’s a multi-boutique strategy. And I think that strategy is to remain to be the same now for Gopher. You see that we are quite keep in two asset classes, and private equity fund of funds and real estate fund of funds. We are now moving towards hedge funds, fund of funds, and we are building not only in domestic China, but also globally. And so in that context, I think we are still remain due to aspirations. In terms of growth - we are still directing a growth in those particular two asset classes.

Are there any additional newest asset classes, which Noah seeking to get into?

Let me translate this for Chairman, so she could also add her views too, just one second. I think in terms of asset classes you see that we’ve done probably around RMB16 billion of AU [ph] last year, and the wealth platform around - AUM around $15 billion, $16 billion in AUM for Gopher now. We think as we grow in scale we will need to build on our standardize product. So products like insurance, mutual funds, but also have to be included in our portfolio. So we are working very hard to make sure that on the standardize product funds, we are building our capabilities as well.

[Foreign Language]

So in terms of just translating what Chairman Wang added, asset class types we haven’t really add a lot, but we’ve actually changed our operating a model in a few examples. Right, so for example, we moved hedge funds from a fund of funds model to a management of management model. And also in terms of real estate, we’ve actually moved from working with new projects and developments to now operating real estate and moving to commercial operations. I think we see the markets shifting in terms of opportunities in each of the asset classes, so we’re trying to be ahead of the curve in each of the asset class. But for your question, whether or not we’ve expanded on asset classes, I think we haven’t largely expanded a lot. And for in standardized products where we start moving to what’s more standardized products in our coverage.

Okay. You mentioned that you’re getting more into the - excuse me, and you mentioned that you’re getting more into the insurance business. Are you also beginning to get into the insurance brokerage business?

Well, we do have two insurance broker slices, one in China and one in Hong Kong. We’ve had it for actually three or four years now. We see structural change in demand of our clients in the last 12 months. And so now we’re simply basically delivering the services to our clients through those licenses.

All right, that was my last question, sir. So you’ve had about - I know you recently have a $50 million stock buyback program in place, is that the model is going forward to return cash to shareholders via buybacks instead of dividends?

[Foreign Language] [Audio Gap] I don’t think that that’s our new way of paying back our shareholders. Those are two separate things. The share buyback is simply, our view that the current stock valuation is below our expectation and below the real value of the company. And so, that’s why for the second year in one row we’re doing buyback when the stock reaches a certain low-point. The dividend is a separate discussion. We think we are in the midst of an expansion phase. We want to make sure we want to conserve cash for investment in our growth companies. And that’s why we haven’t really changed our dividend policy.

All right, well, smooth sailing to all of you at Noah Holdings.

Thank you, Matt. I appreciate it.

[Operator Instructions] I’m showing no further questions. I would like to turn the conference back over to Kenny Lam for any closing remarks.

Maybe we should just wait for another three minutes to see if there is anyone who wants to come in at the last minute, if not then…

Absolutely, I will remain here. [Operator Instructions] We will continue to keep the question queue open for another three minutes. And pardon me, ladies and gentlemen. We do have a question ready to - ask your question if you’re ready.

Yes.

The question comes from Henry Liang of Goldman Sachs. Please go ahead.

So congrats, Kenny, for the good results on second quarter. My question is regarding that Noah is selling less of the real estate fixed income products and more of like other fixed income like supply chain stuff. Can you guys share more on the risk and kind of your development on the supply chain fixed income products? Are they like just basically with lower risks and high return? Can you just share more about the thoughts on that?

Sure, just one second, let me translate this for Chairman Wang as well. [Foreign Language]

[Foreign Language]

So let me translate what Liang said. It was actually spent a year to look very deeply into what type of fixed income products would be high quality fixed income products in the market. We do think that purely real estate basics income products are actually not sustainable. There is a high demand for fixed income products in the market so we’re looking very heavily. So that’s why in the last year we built relationship on supply-chain finance and consumer finance, so those are two areas that we’ve built a market-leading position, particularly in China Mobile, in China-Camp [ph], and a few in home credit and a few of these core relationship partners which provide us with underlying assets that are high quality that turn into fixed income products for our clients.

Okay. Thank you, Kenny, and thank you, Chairman Wang. And another question from my side is that like we know you have [Technical Difficulty] pattern. And then you guys have been talking about like potential M&A, different builds, but we don’t see any progress? Can you share some additional color in regarding that? Thank you.

So you see that we’ve currently expanded into Silicon Valley in U.S. with both a team in direct investments and the team that’s going to be looking at product partnership. That’s our careful next step to build the U.S. presence. I think - and in terms of expansion and M&A, that we’re still actively looking. As we mentioned one or two quarters ago, we’re looking for partners that complement with us including asset management and as always institutional investors. So we’re still actively. We don’t have anything to report just yet. So we’re still very active in looking at it.

Thank you, Kenny. That’s all of my questions.

I think I just want to mention to everyone that the question about the fixed income product is actually very on point. We are trying to make sure that in this market with such a high demand for fixed income products that we provide high quality products for our clients. And therefore, Chairman Wang and the team have looked into this for a long time to build relationships that are hard to replace that provides very high quality products compared to what we in the market. And so we’re known in market to provide very high-quality fixed income products, which is the position that we want to maintain.

[Operator Instructions] And management, I am not showing any questions that are needing to be asked at this time.

Okay, with no further questions, then I will close this call. I want to thank all the investors and participants for joining us this time. And we look forward to discussing with you more on different settings. Pascal, thank you so much.

The conference is now concluded. Thank you for attending today’s presentation. You may now all disconnect.