Good day, ladies and gentlemen. Welcome to Noah Holdings Limited First Quarter 2019 Financial Results Conference Call. At this time, all participants are in listen-only mode. Following management’s prepared remarks, there will be a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded. After U.S. market closed on Thursday, Noah issued a press release announcing its first quarter 2019 financial results, which is available on the company's IR website at ir.noahgroup.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 differ materially from any forward-looking statements that company makes today. Noah Holdings Limited does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under the applicable law. The results announced today are unaudited and 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 GAAP and non-GAAP financial results can be found in the earnings press release posted on the company's website. With that, I would now like to turn the conference over to Shang Chuang, Noah's Chief Financial Officer. Please go ahead.

Thank you, operator. I want to welcome all our investor and analysts present to our earnings conference call today. For today's agenda, Mr. Yi Zhao, Group President of Noah will briefly summarize Noah’s overall performance for the first quarter of 2019 and then discuss our strategy in improving operating efficiency. Ms. Jingbo Wang, Chairlady and CEO of Noah will then speak about each of our product segments as well as provide our overall views on the current industry and regulatory environment. I will follow up with a detailed discussion on Noah’s first quarter 2019 financial performance. We will conclude the call with question-and-answer session. Now I would like to turn to Mr. Yi Zhao for his prepared remarks.

[Foreign Language] This is my first earning conference since taking Group’s President. As a long-term employee who has been with Noah for eight years, presentation during the past few months was very smooth. After a comprehensive and the systematic review of the group's business and operation, we formulated short-term and medium-term goals and the strategies in the short time. And after a quarter of execution, we have already achieved the initial results. To date I'm very pleased to share with you the operating and the financial results we achieved in the first quarter. In the first quarter of 2019, Noah Group achieved the net revenues of RMB890 million, up 7.1 percentage year-over-year and 8.2 percentage quarter-over-quarter. Non-GAAP net income attributable to shareholders reached RMB300 million, up 19.9 percentage year-over-year and 36.5 quarter-over-quarter. It is particularly noteworthy that the non-GAAP net margin reached the 34.2 percentage, the highest costly margin for the past three years. Although, there was only small amount of performance based net income recognized the fourth quarter, we maintained revenue and the profit growth through the combination of different project and the revenue mix as well as effective operating strategies. In terms of business performance, in the first quarter of 2019, we distributed RMB28 billion worth of wealth management products, flat compared with last year and up 11.4 percentage from last quarter, indicating a recovery of investor confidence. The effective one-time commission rate reached 1.16 percentage, inline with our overall project strategy. The number of registered wealth management clients reached 275,000, up 39.6% year-over-year and 5.6% quarter-over-quarter. As we expanded project lines and in particular increased the sales of public offering, the number of active clients increased to 8,117, up 49% year-over-year and 72.1 quarter-over-quarter. As of the end of the first quarter, the AUM of the Asset Management segment increased by 9% year-over-year reaching RMB171.1 billion of which the AUM of private equity investment reached RMB101.1 billion. From 2019, we officially renamed the segment of other financial service to lending and others business. In the first quarter, our lending company Noah Financial Express originated loans of RMB2.5 billion, up 17.2 year-over-year. The net revenue of lending and other business reached RMB98.6 million, up 136 – 132.6% year-over-year. It is the first time for this segment to substantial profit with operating profit of RMB45.2 million. Meanwhile, Noah's overseas business also continue to develop. As of the end of the first quarter, the overseas assets under management which RMB24.7 billion, up 15.6% year-over-year. Total revenues of our office in Hong Kong, the United States, Canada, Australia and other countries reached RMB215 million accounting for 27.8% of the Group's net revenues. Our global comprehensive service system including insurance brokerage in Hong Kong, the United States and Canada family trusts and investor education in China and overseas and et cetera is getting more and more recognition from clients, and also delivering increasing synergies with traditional financial product to self system. In the first quarter of 2019, the number of clients receiving Noah's value added service increased to 1,400, up 40.6% year-over-year. Improving management operating efficiency is an important strategy I've put forward at the Group level, since I took this new role. In the first quarter, we mainly focused on this aspect and made important progress. First structural adjustment eliminating any infected departments merging, overlapping departments, and upholding flat management. In the first quarter, overall sales and G&A expense decreased by 8.8% year-over-year and 25.4% quarter-over-quarter, which significantly improved the operating profit margin. Second talent upgrade, maintaining elite culture and improving assessment standards, each department and the subsidiary ratio establish its own talent profiles. Conducting quarterly performance review and adjust unqualified staff in a timely manner. In the first quarter, the number of relationship managers decreased by 5.5 percentages from the previous quarter. However, the lead ones were all retained compared with the last quarter. The total staff number of the Group's decreased by 2% and the labor cost decreased by 5.6% corresponding. Third, Information Technology divestment, developing system tools and empowering businesses scenarios, in the first quarter our relationship management system and the client mobile application Micro Noah were upgraded in all aspects. We lead in domestic Wealth Management industry achieving online audio and video recording, which quickly improved the sales compliance and optimize the client experience. In addition, we love our online relationships manager plus expert servicing core -- model in four core pilot cities. Based on different scenarios and the company, we formed the expert teams composed of relationship managers, product experts, investment consultants, meet and back office support personnel and et cetera. So that services are providers of team collaborations instead of single relationship managers to meet increasingly specialized and a diversified means of clients. Last year, Go for Divest [ph], a fully autonomous investment management system or GIMSP, which clearly demonstrates the status of all funds and that there are some funds and the sub-projects while closely tracking top down valuations through a fund raising systems. Fourth, system construction, setting up an operation management system, covering 15 important operation modules, and the divesting management tools and assessment system with a focused on data indicators through costly reviews and annual assessments, we consistently adjust and optimize our systems to improve the operation and management of the whole group. For the second quarter, we will push forward the organizational restructuring and the talent upgrade and implement a series of work level management the system featured with data model while monitoring and evaluating the operational efficiency of each business segment. We are even more confident about 2019. Focusing on creating values for clients is Noah’s principle and continuous optimization in response to clients needs is Noah’s direction. As a market environment becomes increasingly uncertain, Noah will continue to build and improve management operating systems and enhance capabilities in research, investment, productive departments, sales and the comprehensive services to become an open and the global interrelated financial service company with fine packaging. With that, I would like to turn the call over to Noah’s Chairlady and CEO, Ms. Wang Jingbo. She will speak in Chinese and her remarks will be followed by English translation.

[Foreign Language] Thank you, Zhao Yi. In the first quarter of 2019 China has been adopting favorable macro policies specifically maintain a relatively liquid monetary policy and the Asia market performed strongly in the backdrop. Looking at current economic data for Q1 including GDP, foreign trade, finance, and other metrics, the economy outperformed expectations as a whole and operations of private enterprises have also improved at a certain extent. For China's wealth management and asset management industries, 2018 was a year of adjustments. According to the latest China Private Bank report 2019 jointly issued by Boston Consulting Group and China Construction Bank despite the ongoing growth momentum in total wealth of domestic residents, the growth rate in 2018 was only 8% percent significantly dropping behind the compound average growth rate of 16% during prior 2013 to 2017. Domestic high net worth individuals with investable financial assets over RMB6 million only increased by 6% in 2018. Moreover with increased complexity in the domestic economic homefront and foreign trade frictions, investors' aversion to risk increased significantly. At the same time, individual investors understanding of risks and rationality of investment are going through the volatile market and their long-term expectation of investment return is normalizing with the adjusted market conditions. Meanwhile, the same China Private Bank report 2019 also estimated that during the next five years, the investable financial assets of Chinese individuals will recover to a compound growth rate of 11%. Specifically for high net worth individuals with their invested assets transferred continuously from real estate properties and corporate direct investments to financial assets, the compound growth rate of their investable financial assets will exceed that of the industry to 16%. So, we strongly believe that asset management industry will continue to be attractive in China. Combining the asset management with wealth management business has better positioned Noah with higher profitability and less vulnerability to economic cycles. With the maturing of all stakeholders in these two industries mingled with the ongoing wealth accumulation brought by stable macroeconomic growth, the increased investments in financial assets promoted by the aging population as well as the technological innovation accelerated by the Internet. The overall asset allocation demands including their global asset allocation demand has been and will continue to be of utmost importance to domestic clients. Now, let me share with you some updates about product strategy. In terms of the primary market, by the end of the first quarter of 2019, the AUM of Gopher's private equity investment reached RMB101.1 billion, up 10% year-on-year. Since the beginning of 2019, the domestic private equity market has remained sluggish in terms of fund raising, investment and assets similar to 2018. Our strategy for this year is to still focus on offering first-tier funds, enhancing fund-of-funds operations and keep improving direct investment capabilities. Over the past eight years, Gopher has invested directly and indirectly in over 210 funds and over 4,000 at 8,000 enterprise -- 4,800 enterprises, among which more than 160 enterprises have been successfully listed at home and abroad and 78 has grown into unicorns valued at over US$1 billion. We believe that as the system construction of China's capital market continue to improve, especially with the founding of registration system for public listing on the Science and Technology Innovation Board, China's private equity industry will establish a smoother exit mechanism and Noah will be one of the beneficiaries. In the public market after the spring festival of 2019, the Asia market has embraced the bounce and investors risk appetite has gradually picked up. Beginning of this year, we have integrated online and offline transaction channels and focus on the mutual fund distribution through our wealth management sales team together with traditional private funds. Total transaction value of Noah’s public securities products including mutual funds has rebounded to RMB3.2 billion in the first quarter, up 125 % sequentially. The AUM of Gopher's public securities investments have also picked up in the first quarter reaching RMB6.9 billion, an up 11% quarter-over-quarter. In terms of credit funds, we believe that individual client have a strong demand for fixed income products with low correlation with the stock market. On the wealth management funds, we continued cooperating with leading products providers and a credit funds raised in the first quarter were amounted to RMB22.1 billion, up 67% year-on-year and 9% quarter-on-quarter. On the asset management fund, the AUM of credit products by the end of the first quarter stood at RMB38.8 billion, while retaining existing products and counterparty, we adopted new strategies since the second half of 2018 delivering standardized bond funds and public ADS funds or investing in publicly traded credit securities to increase the breadth of available products. At present, a company’s credit product line has been established with Renminbi and U.S. dollar products flexible term and stable returns. In 2019, we are focusing on both the scale and the performance of our bond portfolio funds and this strategy has been attracting increasing attention from both institutional and individual clients. In terms of U.S. dollar denominated bond and cash management funds, we have developed full product lines actively managed by Gopher; specifically our flagship U.S. dollar global bond fund has ranked in the top 5% among the peers with respect to its performance since inception in August 2018. In terms of renminbi products, by the end of the first quarter Gopher's total AUM in renminbi bond funds has exceeded RMB1 billion and it's AUM of cash management funds exceeded RMB5 billion. We believe that in the future standardized bonds will become an important portfolio asset for individual investors and we're fully prepared in this regard. In terms of real estate founds, by the end of the first quarter of 2019 AUM of Gopher real estate investments reached RMD17.4 billion, up 46% year-on-year. In retrospect, Gopher's real estate preferred share funds, which were mainly funds raised in the second half of last year has exceeded RMD4 billion in scale and has invested in 15 projects as of the end of the first quarter. Meanwhile, projects invested and managed to our core asset acquisition funds are still operating soundly. The occupancy rate of the office building and commercial properties in Shanghai Gopher Center reached 95% and 100% respectively. Gopher stadium plaza will also be reported for official completion in June 2019. Against the background of the continuous influx of foreign capital to acquire China's core assets, as well as gradual transition of China's real estate industry from an incremental market to a stock market, our extensive experience in real estate investment as well as operation and management are showing their value. From the first quarter of 2019, we officially change the name of the strategy other investment under Gopher's AUM to multi-strategy investments, which represent our progress and achievements in promoting discretionary multi-asset funds and family office businesses. By the end of the first quarter, the AUM of Gopher's multi-strategy investments reached RMB6.9 billion, up 92% year-on-year. While attracting sustained client investments our full discretionary asset allocation capability has also won recognition by global professional institutions. Gopher Asset was recently granted Best Wealth Manager in China, discretionary and segregated portfolio management by Asian Private Banker, as well as the insight to mandate 2019 professional investment award China multi-asset strategy three years and global multi-strategy three years. In reviewing 2018, we believe that we now have an even better understanding of our client demands, with a core competency that was accumulated over the past 15 years. In terms of product strategy, we believe that in the longest pool and shorter spare market such as U.S. market, buy and hold the blue chip stocks as a distributable strategy for asset managers. However, emerging markets feature high volatility of individual stocks, while fluctuation ranges in stock price and rapid rise and collapse of valuation, resulting in significant systematic risks. Therefore simply holding stocks is not the optimal wealth management strategy for emerging markets. While the allocation strategy among multiple asset classes, provides more sustainability. Our advantages stand out in the market competition in terms of the investment and allocation capabilities of relevant assets such as stocks, equities, bonds, real estate, asset backed securities, cash management products and others. Finally, I would like to talk briefly about the industry and regulation environment. Since 2019, China has continuously opened up the onshore financial market performing institutions to acquire financial licenses. With increased competition from strong foreign peers, domestic wealth management and asset management firms are facing both opportunities and challenges. And we also believe that this trend will influence China's wealth management and asset management industries in several aspects. First, capital pools and implicit guarantees will no longer exist. Equity, portfolio and net based products will gradually dominate the market and unlicensed non-compliant institutions will be weeded out. Second, investors will diverge. Without the protection of guaranteed return, investors with low risk tolerance will have to leave the capital market and return to banks, while more sophisticated investors will make long term investments in asset management products. Third, the business models of wealth management and asset management institutions will transform from competition and licensed resources, rule speculation and regulatory arbitrage to competition in investment, management and marketing capabilities, where the implementation of the new asset management guidelines that clarify direction of supervision and the continuous opening of financial service markets to foreign investors. China's asset management and wealth -- management industry are going towards healthier and more standardized development that is in line with international rules. When Noah in 2019, we define our core businesses as wealth management, asset management, lending service, insurance brokerage as well as global value added financial services for high net worth clients. Our objective is to keep the same growth of clients and AUM scale In the Wealth Management segment, we will continue to view our capabilities to serve high net worth Chinese in a global scope, improve and optimize our relationship manager team and expand our client base. In the Asset Management segment, we will focus on improving our capabilities in multi-asset allocation and provide comprehensive asset allocation services by high net worth and institutional clients. Meanwhile we are also seeking for external distribution channels for Gopher Asset Management products to drive its multi-dimensional growth. Currently Gopher has been included in the wide list of several large size securities firms and banks. In terms of providing more value added financial services, we are mainly targeted and in creating more client touch points and cross-selling opportunities. With a sustained dedication in 2019, we are confident in maintaining efficient operations and quality growth as always. Thank you all. Now, I would turn the call over to our CFO, Shang to review our financial results in the first quarter.

Thank you, Chairlady. We have been through a solid set of financial results for the first quarter of 2019. Both net revenues and non-GAAP attributed income reached historic highs on a quarterly basis. Total net revenues were RMB889.9 million, an increase of 7.1% year-over-year, and non-GAAP attributable net income was RMB304.6 million, up 19.9% year-over-year. In terms of revenue mix, we achieved one-time commissions in amount of RMB324.6 million, up 2.1% from the same quarter last year, and up 33.6% from the last quarter. The strong sequential rebound was mainly contributed by the 11.4% quarter-over-quarter growth of transaction value, reaching RMB28 billion as well as the improvement of an effective one-time commissions from 0.97% to 1.16%, mainly contributed by the increased distribution of insurance products. Recurring services in the first quarter of 2019 were RMB420.6 million, up 5.7% from the same period last year, accounting for about half of total revenues. So foreign-based income of RMB4.9 million was significantly lower than the first quarter last year, because most of the public securities products have not exceeded high watermark of last year and there were no significant exit by other products. Other services of RMB145.4 million, primarily driven by our lending services business as well as the increased demands of value-added services that we provide in the wealth management business. In the first quarter total operating income increased 10.2% year-over-year to RMB302.5 million with operating efficiency enhancing measures, our operating margin increased to 34.2% from 33% a year ago. Total compensation costs were RMB404.3 million, up 12.1% year-over-year, but down 5.6% quarter-over-quarter as it optimize our employee base. Our selling expenses were RMB90.5 million, down 14.9% year-over-year, and down 13.7% quarter-over-quarter. General and administrative expenses were also well controlled during the quarter. The amount of RMB58.6 million represented a 4.7% increase year-over-year. But 38.3% decrease quarter-over-quarter. Non-GAAP attribute net income for the first quarter was RMB304.6 million, a strong increase of 19.9% year-over-year. This quarter we adjusted out 29.6 million of share-based compensation, 8.7 million of gains from unrealized share changes of equity security, an RMB5.7 million of tax effective adjustments and adjusted RMB4.9 million of gains from sales of equity securities. On the balance sheet side, the company increased cash and cash equivalents by RMB165 million this quarter. Operating cash flow generated by core businesses remains strong of RMB132.7 million. In summary, we continue to grow our business despite much uncertainty. Looking ahead, we see huge potential on both wealth and asset management industries in China. And we are dedicated to creating value for our clients and to our shareholder. With that, let's open up the call for questions. Operator?

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Edward Du with Deutsche Bank. Please go ahead.

I thank the management team for taking my question. This is Edward from Deutsche Bank. I have two small questions. First question is about, I just saw your active client increased by around 49% year-on-year, but the total transaction value was up only 1% in first quarter and making the average transaction declined by around 32% year-on-year. And my question is about, we know -- is there any transaction behavior change among your client base, or any reason behind this? And my second question is about distribution fee and based on my capital calculation, your distribution fee rate came around 120 bps in first quarter, but we do not see any meaningful change in your product distribution mix in first quarter compared to fourth quarter last year. And I mean, we know any pricing structure change especially in the fixed income product and the secondary market product, and that's my question. Thank you.

Yes, sure. Thank you, Edward. I will answer both of your questions. So the first question regarding active client transaction value as well as average transaction value per active client, so for the first quarter of 2019, one of our strategy was actually to activate or get more of our client base to transact on product and we were able to do so by broadening the type of product that we have conversations with as clients. And in the first quarter versus last year for 2018, we engaged client with mutual funds and we feel that by broadening our asset category to include public securities or wider categories of public securities, we can engage deeper with our clients and that I think worked quite well. And so, going forward, I think both on the wealth management side and asset management side, we see opportunities for us to deepen all the share by expanding into public security, that’s for your first question. Regarding the second question is, yes, for the first quarter of 2019, effective onetime commission rate was up meaningfully to around 1.16%. This is up year-over-year as well as quarter-over-quarter. I think the two main reasons. So the amount of insurance distribution from the first quarter was actually quite robust. In addition among the credit products that we distributed for the first quarter 2019, a portion of it were more longer-term fixed income product and for longer term fixed income product, we're able to achieve the revenue upfront. So those are the two main reasons why we saw effective I think commission rate, but it's still within a very long term range of 80 to 100 basis points. And so the change is mainly because of the product mix rather than any structural change going forward.

Thank you.

The next question is from George Cai with JPMorgan. Please go ahead.

Thank you for taking my question and congratulations management for the results. I have two questions. The first one is on the private equity sales. As we can see from the first quarter, I think the private equity product sales have been quite weak as well compared to the last quarter and on a year-over-year basis. So can you share with us more color on potentially when sales could rebound? So that's my first question. My second question is relating to the lending and other business. As we can see, the revenue growth has been very robust and we achieved a very sizable profit, but we want to ask on the loan book, what's the current status of the asset quality and what's the provision ratio. And I understand this is more for internal product lending, but I just want to ask if we have cooperated with the banks on a co-lending side. So these are my two questions.

Sure. For the first question, regarding private equity, I'll allow Madam Wang to speak about that and then I will answer, George, second question regarding our lending business.

[Foreign Language]

Yes. So I'll translate Madam Wang's answer for the first question. So regarding the new fund raising for private equity, overall, in the market is still quite soft. It's mainly regarding the pace of exits by previous funds. As we see in the market, general capital market activity has been sluggish in terms of new IPOs and new exits. But we do see a silver lining as top tier GPs are still able to exit. They're very tough portfolio company. So our strategy in terms of private equity continue to be focusing on top tier clients, our fund from business, as well as expanding the amount of co-investment and direct investment. And so we believe our focus will allow us to capture growth opportunity in private equity on a long term. The short term challenges and difficulties is mainly regarding investors being reluctant to make a very long term investment versus hedge funds or public security, given there are still a bit uncertainty in terms of the macro environment. So that's Madam Wang's response to your first question. Regarding the second question, regarding your lending question, Madam Wang just want to add some high level comments that, the lending business she believes is an important complementary business to our wealth management business. In terms of our high net worth individuals using financial products or real estate to achieve -- to obtain short term loans, we see it to be a synergistic to both of our core businesses. Now, specifically regarding George's question in terms of some of the metrics for our loan business, if you people can take a look at our balance sheet, as at the end of the first quarter the loan receivables that are on our books is around RMB507 million. Okay? Yes. I want to take this opportunity perhaps to describe the way our lending business works. So we would originate loans to a high net worth individual and most of the time they would have high quality collateral. And the average duration is around nine to 12 months. After originating these loans, we will sell or securitize these loan receivables, so then they are sold to investors. And we continue to serve as a servicing agent in terms of the collection and the passing of interest and principal, but we're no longer liable for the financial risk. So, as generous as we feel, an asset light business, if you may. In terms of the loans that we're servicing, it's roughly about RMB10 billion, okay. So for the loans on our part actually we have a 1% NPL provision, but historically the last two, three years, we have not seen any meaningful people. The main reason is because of a high-quality of the borrowers as well as the soundness of the class that we have when we make that loan or we make those loans. Thank you.

Operator?

Yeah, sorry. The next question is from Stephanie Poon with Citi. Please go ahead.

Hi, management team. Thanks for taking my question. So first question is regarding your product mix or your product strategy. So we understand that like traditionally the alternative products have been your core strengths like for example on the private equity or some non-standardized credit. But as you are now expand into this standardized credit product for this mutual funds, it seems to be a more competitive area that we see a lot of other traditional banks or brokers there also offering these product. So can you just share with us more about, like what you see as your competitive edge here on these standardized products? And also as you expand into this product category, is it also means that you're penetrating into maybe a lower-tier client base? And the second part -- second question is regarding your asset management, distribution channels. You mentioned earlier that you're expanding into some non-lower distribution channels. Can you just share with us like any specific channels that you have currently, and what is the percentage exposure there? And also in terms of the position of this asset management business going forward, I guess, in the past we use to understand more as a supplementary of your whole wealth management product business to start off your existing high [indiscernible] individual clients but going forward, should we see maybe more standalone business segment that you are also expanding it to some external time period. So, that's my all five questions. Thank you.

Thank you, Katherine. Just for the benefit of my colleagues who r also on the phone, perhaps just quickly summarize the three questions you raise. One is regarding our public security products, specifically mutual fund. How that will impact our business? Second is regarding Gopher Asset Management expansion into no-Noah distribution channels. And third is asset management positioning going forward. I will answer these three questions and see if management and Mr. Zhao has anything to add. So, regarding the first question, as you know and many of our shareholders are aware, Noah has been and will continue to be a firm believer of asset allocation over the last 10 years, we have consistently expanded in terms of the product categories and investment strategies that we're able to offer and manage for our clients because we believe a true diversified asset allocation is the best way for high net individuals to ride through capital market volatility and we believe mutual funds should be an important aspect of that toolbox -- an important tool in the toolbox. And if you look at leading private banks, for example, UBS, their high net worth individuals have 20% to 40% allocation in mutual funds. So, specifically on this particular strategy, it's actually in line with our long-term strategy of deepening high wallet share rather than us expanding into mass retail. So, I just want to clarify in terms of our approach with some mutual funds, how do we get more of our existing clients' wallet share. How do we have or engage more time to transact with them. So, that's the reply for number one. And turning to number two as Ms. Wang mentioned for Gopher, I think we have always been seeking ways to broaden the capital sources for Gopher. We have had some success with large insurance companies, but we also see opportunities Gopher established more attractive as well as expertise across MSO strategies. And most recently we have very good progress in terms of mid to large-sized securities firms in terms of become -- hitting on their preferred list in terms of distributing Gopher's public securities product, kind of, hedge fund or others income funds. And we see as the capital market continue to develop in China, we want Gopher to be able to grow its AUM from all various different sources. I guess, it is tied to your third question in terms of a long-term for Gopher. I think a very good example would be globally, we see a lot of private bank when in its early stages will incubate an asset manager, but as the asset management grows and expand its business. It's become quite fairly independent i.e. their capital sources comes from institution, come from other distributors, a reference is I believe last time when I spoke with my peers at UBS Asset Management about 20% to 30% of their capital comes from UBS Private Bank, i.e. it's more than half 70% from non-UBS private banking sources. And I think that is a good role model or an example of what corporate can achieve as Madam Wang mentioned in her prepared remarks. And we continue to believe so Asset Management in China is still very early days. If we use a baseball analogy probably only in the second, third inning, so as future growth potential is quite huge for Gopher. And I believe Madam Wang has things to add as well.

[Foreign Language]

So let me translate Madam Wang’s commentary on the question. So for Gopher, since the establishment in 2010 over the last nearly decade, I think we have accumulated expertise in the various investment strategies that we operate in. And most importantly, we have now seen the benefits of being an expert in terms of asset allocation and diversified solution provider. What this means to our investors is delivering low volatility, as the various investment strategies have low correlation to each other. Now we will continue to expand Gopher based on product line co-investments and direct investments with the goal and intention of delivering absolutely return to investors. And we believe we're able to do so by executing on a multi-strategy efforts. Now based on various data that we have accumulated over the years as well as recent conversation and surveys of our clients and we believe that we are very well-positioned and should be the leading brand for multi-strategy in China, and trends on the asset manager alternative. So now adding or adding some comments on our expansion into public security, again, I want to emphasize this is part of our asset allocation approach, if not aiming to expand into a new client segmentation, but rather how do we use new tool to cross-sell to existing high net worth clients. Now for the first quarter, I think we had some efforts in terms of mutual fund fundraising. And historically we have done mutual fund fundraising on Asset Management basis. So we are quite familiar with this asset category and for some of the funds that we were focused on fundraising in the first quarter, fundraising side that we achieved is actually similar to some of the -- in the bank. And this just shows that the potential of our clients such this asset category, the average transaction per client for mutual fund for our time is much higher than bank. Now we are confident in terms of getting non-Noah’s channels for distributor Gopher Asset as Shang mentioned there are a lot of asset management firms globally that have originated from wealth management route, but has grown to be very sizable and their reliance on their existing private banking partner is now only 10% to 20%. So in other words as Gopher develop the potential from non-Noah channel should be even larger than the amount coming from Noah currently stage.

Operator?

Yes. Our next question is from Yuan Xue with CICC. Please go ahead.

[Foreign Language] Yes, for the benefit of the audience, I will translate the question from the research analyst of CIBC. I know from the quarterly disclosure the company had for the first time disclosed segmentation by geographic location and we see for the first quarter 2019, revenue coming from other or other region has made good progress. And if you can give us some more color on that?

And -- so I'll comment on this question and see if my colleagues have anything to add, but over the last two years, we continue to express our view to the capital market is that we want to build a global business. And since the establishment of Hong Kong -- of our Hong Kong business in 2012, we have continued to make good progress. As of the first quarter of 2019, our overseas markets have contributed roughly about 25% of total revenue and over the next two to five years, we continue -- we want to continue to grow that percentage. Now, as you know we set up our business in the U.S. roughly about two and a half years ago both in Silicon Valley and New York. Both of these offices and the team our focused in terms of product sourcing and developing products. And so we're now able to offer D.C. investment opportunities, co-investment in excellent investment opportunity as well as U.S. insurance product to our clients. And so it's an example of how we replicate our success in Hong Kong to other large capital markets or large markets elsewhere in the world. We believe our times are becoming more mobile and global, so our investment in terms building a global presence will benefit us in the long term.

Our next question is from George Cai with JPMorgan. Please go ahead.

Hi. Thank you. I have a follow up question. I think on the net profit there is quite a large gap between the GAAP net profit and non-GAAP profit. A large chunk of it, I think, is related to a gain -- unrealized gains from the fair value change of equity securities. So could you add more color on this? And going forward, do you expect the volatilities could be smaller? Thank you.

Yes. Thank you, George, for the question. If you note on page 17 of our 6-K or quarterly disclosure, we break out the details of GAAP net income and non-GAAP net income. The largest adjustment is actually share based comp, which is quite in line with how other, let's say, company define non-GAAP net income. And part of it -- the other part of the adjustment comes from fair value changes of equity securities that are unrealized. You can define this or interpret it as basically mark-to-market of equity securities that we hold and the markets have been a bit volatile. And so we adjust out those noises and we add back in unrealized gains. And there is the detailed breakdown, so I won't read the numbers one by one. Yes.

Operator?

This concludes the question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.