Helen

Helen Li of UBS inquired about the impact of Chinese tax authorities investigating overseas assets on high-net-worth client sentiment, and questioned the sustainability of recent reductions in G&A and selling expenses.

Answer

CFO Qing Pan acknowledged that clients are receiving tax inquiries, framing it as an enforcement of existing laws. An unnamed executive added that this presents a long-term opportunity for Noah to deepen client relationships through comprehensive wealth and tax planning. Regarding expenses, Qing Pan explained the reduction resulted from both improved back-office efficiency, with a 25% headcount optimization, and fewer Q1 marketing events, noting the lower marketing spend is not considered sustainable.

An analyst from UBS, identified as Helen, inquired about several key areas: the demand for investment products among high-net-worth clients since the start of the year, the current CIO investment strategy, and the 2025 outlook for insurance product sales. She also asked for details on Noah's business development in the United States and clarification on a significant settlement reversal recorded in the quarter.

Answer

CEO Zander Yin, Chairlady Wang Jingbo, and CFO Qing Pan collectively addressed the questions. Mr. Yin noted a rebound in client investment sentiment, with a preference for liquid products like public securities and hedge funds, as well as AI-themed investments. He acknowledged the fierce competition in the Hong Kong insurance market but stressed Noah's focus on compliance and providing holistic asset allocation advice. Mr. Pan detailed the U.S. expansion, highlighting four locations focused on investment, product selection, and client services, with plans for a third booking center. He confirmed the litigation reversal was a one-off event from a favorable case outcome. Ms. Wang added that 2024 represented a bottom in sentiment and that now is a critical time for clients to adjust their strategic asset allocation.