Noah Holdings operating margin rises to 34.8% as AI powered wealth management model gains traction

SINGAPORE — Noah Holdings reported a sharp improvement in profitability for the second quarter, with operating margin rising to 34.8% as the wealth management group continued to develop an operating model combining artificial intelligence, licensed professionals and ecosystem partners.

The company recorded net revenues of RMB620 million (US$91.2 million) in the second quarter, while income from operations increased 34% year on year to RMB216 million (US$31.9 million). Operating margin increased from 25.6% in the corresponding quarter last year to 34.8%. 

Net income for the quarter rose 32.7% year on year to RMB236.9 million (US$34.9 million), while net income attributable to Noah shareholders increased 30% to RMB232.2 million (US$34.2 million). Non GAAP net income attributable to shareholders reached RMB238 million (US$35.1 million), an increase of 25.9% year on year and 77.8% from the previous quarter. For the first six months of 2026, Noah reported net revenues of RMB1.246 billion, broadly unchanged from a year earlier. Income from operations increased 30.3% to RMB452 million, while operating margin reached 36.3%, an improvement of 8.4 percentage points year on year.

The company said the first half marked its 63rd consecutive quarter of non GAAP profitability since its listing. A key contributor to the improvement was the changing composition of revenue. Net performance based fees reached RMB238 million during the first half, representing a 364% increase from the same period a year earlier. Fundraising fees from investment products increased 13.4%, while operating costs and expenses declined 11.6%. 

Noah said the results also provide evidence for its institutional productivity model, which combines an AI powered wealth management platform with locally licensed professional teams and ecosystem partners operating through a unified infrastructure.

The model is being developed as an alternative to a traditional wealth management expansion strategy based primarily on increasing relationship manager headcount. The company said its Singapore operation, launched about 10 months ago, represents the first full implementation of the model. Singapore AUM grew from less than US$100 million to more than US$400 million by the second quarter, with the operation achieving its first month of profitability in July without increasing relationship manager headcount. 

The company said the performance demonstrates the potential for the model to be replicated across international markets, particularly as international assets under management continue to expand. As of June 30, Noah's US dollar denominated AUM stood at US$6.5 billion, an increase of 11.7% year on year. US dollar denominated assets under administration reached US$9.78 billion, up 7.5%, while registered international clients increased 11% to 21,059.

Total AUM stood at RMB140.9 billion at the end of June. Noah also maintained a strong liquidity position, reporting RMB4.323 billion (US$637.1 million) in cash and cash equivalents at the end of the second quarter. The company reported no interest bearing debt. 

Performance across individual business areas was mixed. Mainland China public securities generated RMB178.6 million (US$26.3 million) in operating income during the quarter, an increase of 65.5% year on year, while mainland China asset management generated RMB142.7 million (US$21 million), down 8%.

International asset management generated RMB61.6 million (US$9.1 million) in operating income, a 15.2% decline, while international wealth management recorded an operating loss of RMB3.3 million (US$0.5 million). International insurance and comprehensive services generated RMB14.1 million (US$2.1 million). 

At group level, Noah said the results demonstrate the benefits of tighter cost management alongside greater contribution from investment performance.

The company reduced headquarters operating costs and expenses by 23.6% during the quarter, partly because of lower provisions for credit losses related to its suspended lending business and lower compensation and benefits expenses.

The results come as wealth management companies globally increasingly explore technology driven operating models that can combine digital platforms with professional advice and specialist investment capabilities.

For Noah, the Singapore results provide an early test of whether an AI enabled infrastructure can support international expansion without requiring a corresponding increase in relationship management headcount.

The company is positioning the model as a scalable architecture for its international business, with the combination of technology, licensed professionals and external ecosystem partners intended to improve productivity while expanding access to wealth management services.