SHANGHAI - Noah Holdings (NYSE:NOAH) Limited (NYSE: NOAH and HKEX: 6686), a prominent wealth management service provider for Mandarin-speaking high-net-worth individuals, has initiated a share repurchase program to buy back up to $50 million of its shares, signaling confidence in the company's financial strength and commitment to shareholder returns. The program, which includes American depositary shares or ordinary shares, is effective immediately and has a two-year duration.
The new repurchase initiative is separate from the company's November 2023 capital management and shareholder return policy, which dedicates up to 50% of non-GAAP net income to dividends and share buybacks. The financial performance of 2024 will determine the Corporate Actions Budget, to be announced with the year-end earnings results.
Repurchases will occur on the open market or through negotiated transactions, depending on market conditions, and will comply with regulatory rules. The company plans to fund the buybacks from its existing cash reserves and operational cash flow.
Jingbo Wang, Noah's co-founder and chairwoman, stated that the repurchase program reflects the company's dedication to shareholder interests amidst a challenging period in China's wealth management industry. She emphasized Noah's unique position and its undervalued stock, which she believes does not fully represent the company's growth potential, robust balance sheet, and cash reserves.
In late July and early August 2024, Noah distributed a record dividend of approximately $140.1 million for the full year 2023, which equaled 100% of its annual non-GAAP net income. This payout included the final dividend under the new policy and a special dividend.
Noah Holdings, with a diverse range of wealth management services, managed assets of $21.2 billion through Gopher Asset Management as of March 31, 2024. The company's client base includes over 457,000 registered individuals.
This announcement is based on a press release statement and contains forward-looking statements under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. The company cautions that these statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations.
InvestingPro Insights
As Noah Holdings Limited (NYSE: NOAH and HKEX: 6686) embarks on its new share repurchase program, a look at the company's current financial metrics provides a clearer picture of its market position and potential. According to InvestingPro data, Noah Holdings has a market capitalization of approximately $508.98 million, which places the company in a unique spot in the market. With a Price/Earnings (P/E) ratio of 4.07 and an adjusted P/E ratio of 3.88 for the last twelve months as of Q1 2024, the company is trading at a low earnings multiple, suggesting that its shares could be undervalued relative to its earnings capacity.
Additionally, Noah Holdings boasts a strong Price/Book (P/B) multiple of 0.34, which is indicative of the company trading at a low valuation compared to its book value—an InvestingPro Tip that could signal a buying opportunity for value investors. The firm's dividend yield stands at an impressive 13.33%, highlighting its substantial return to shareholders through dividends, an aspect that aligns with the InvestingPro Tip regarding the company's significant dividend payouts.
Despite the overall sales decline in the current year, as anticipated by analysts, Noah Holdings' liquid assets surpass its short-term obligations, which can be reassuring for investors concerned about the company's immediate financial health. For those interested in exploring more in-depth analysis and additional InvestingPro Tips, there are 10 more tips available on the company's profile at Investing.com, which can provide further guidance for investment decisions.
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