Good day, ladies and gentlemen. Welcome to Noah Holdings Limited Second Quarter 2015 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, there will be a Q&A session. During the Q&A session, we ask that you please limit yourselves to two questions and one follow-up. If you would like to ask additional questions, you may reenter the queue to do so. 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 2015 financial results, which is available on the company's IR website at ir.noahwm.com. This call is also being live webcast 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 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. I would now like to hand the call over to Ms. Jingbo Wang, Chairman and CEO of Noah. She will be speaking in Chinese and her remarks will be translated into English. Please go ahead.

[Foreign Language] Thank you, operator and thank you all for joining us. With me today are Mr. Kenny Lam, Noah’s Group President and Ms. Ching Tao, Noah’s CFO. Mr. Lam will start by providing a brief overview of our financial highlights for the second quarter of 2015 and will walk you through the performance of our core wealth and asset management businesses. After that I will provide an update on the progress we are making to develop the global open architecture product platform as well as progress with our new Internet finance business. I will also review our strategic initiatives to establish an integrated financial services platform to support the sustainable growth of the company. Lastly, Ching will provide further insights into our financials and reiterate our 2015 guidance. We will be happy to take any questions at the end of our prepared remarks. Now I’ll turn the call to Mr. Lam.

Thank you, Chairman Wang. We’re please just continued the momentum from a first quarter to deliver strong results in the second quarter with top-line and bottom-line both in line with our expense. Net revenues in the second quarter of 2015 were $93.2 million, a 30.4% increased from the corresponding period in 2014 and a 29.8% increase from the first quarter of 2014. On the bottom line, non-GAAP net income was $30.9 million, a 25.4% increase from the corresponding period in 2014 and a 37.4% from the last quarter. In terms of our core businesses, we distributed RMB36.5 billion of wealth management products during the second quarter representing a 100.8% increase year-over-year and a 48.5% increase quarter-over-quarter. Our total registered client into active client base also increased at an encouraging rate. Total registered clients as of the end of quarter two increased by 34.8% year-over-year to 81,939. And total active clients reached 6,101 a 72.4% increase from the corresponding period in 2014. Noah has always been focused on improving our core competitiveness in the total wealth management industry. Regardless of whether it’s a full market or their market, we’re committed to enhancing our open global platform investing heavily in our asset management team, developing our new Internet finance business and improving our mid and back-office information systems over the long-term. Recently Chinese equity market have experienced and indicate volatility and I have consistent principals of long-term investing and value investing have again been proved to be both effective and necessary. None of our secondary market products except for ITO products a leveraged. When selecting and recommending secondary market fund managers, we always emphasize the impotence of asset allocation. As a result, we’ve talked our client protect their assets and minimize losses from this round of market volatility. Later, Ms. Wang will…

[Non-English] Thank you, Kenny. Noah has grown to be a wealth management firm with outstanding asset management capabilities that serves Chinese clients around the world. Over the past 10 years we have continuously improve our core capabilities from research, to product selection, to asset management capabilities. In addition we have focused on effective investor education and communication. In times of rare, systemic volatility in the secondary markets, we are pleased that we have maintained our long-term approach protecting client assets to appropriate asset allocation and stand through to and principles of long-term investing and value investing. This has helped us maintain strong high quality relationships with our clients. [Foreign Language] On our first quarter earnings call we clearly stated that we will strengthen our monitoring of risks. Currently there are many irrational elements in the market, we believe that wealth management should transition from product driven to asset allocation driven. Later at our PE investment summit held in Shanghai at the end of May which attracted over 1,000 high network clients, we stated that we would reduce exposure to secondary markets and recommended that investor transition related funds to IPO funds. [Foreign Language] At the end of the second quarter we saw irrational activity in panic in the domestic capital market. After this baptism of fire, investors, practitioners and regulators have greater respect for the market. We believe that this will help the domestic asset management industry mature. The wealth management market in China will mature from individual investors buying shares to individuals buying fund products. Noah's high network clients have already transitioned from financial product selections to comprehensive asset allocation and we believe that discretionary portfolio management would become more and more popular among ultrahigh network clients. We’ve continued to build our full competitive advantages in wealth management based…

Thank you, Chairmen Wang and hello everyone. To make the best use of everyone’s time, I’ll give a high level overview of our Q2 results and then open up the call for questions. As Kenny and Jingbo Wang noted Q2 was another solid quarter. Net revenues increased 30.4% year-over-year to $93.2 million and Q2 non-GAAP net income grew 25.4% year-over-year to U.S. $30.9 million, both of which are largely in line with our expectations. We distributed approximately $5.9 billion or RMB36.5 billion worth of growth management products during the quarter, more than double the figure from a year ago. In July an abrupt regulatory policy change in China lead to the suspension of new IPOs. As a result we terminated and subsequently refunded $1.3 billion or approximately RMB8.2 billion of IPO fund products to our clients in July. Excluding that refund the aggregate value wealth management product during the second quarter of 2015 was $4.6 billion or approximately RMB28.3 billion which represents a 55.6% increase from the corresponding period in 2014. There is a breakdown of operating metrics in our wealth management business at the back of the earnings release. Excluding the impact of the refunds related to IPO products in July, the weighted average onetime commission rate for the second quarter of 2015 was 0.78% compared to 0.8% in the same period last year and 0.82% in the first quarter of this year. The minor fluctuations in the commission rate are due to shifts in our product mix. Recurrent revenues were $40.1 million accounting for 43% of net revenue in Q2 2015 compared to $37.9 million in Q2 of 2014 or 53% of net revenue. The decline in recurring revenues as a percentage of net revenues is primarily due to a change in product mix and our wealth management…

Thank you. We will now begin the question and answer session. [Operator Instructions] The first question comes from Su Li Chen [ph] with CICC.

[Foreign Language] Let me just translate this for the audience, it is actually an English call, so let me just briefly just go over the question. The first question is about our internet finance business. So the question was the increase in the investment that was actually more than the expectation and what is our forecast of the internet finance business given that we’re investing more quickly than before? That's a first question. Second question overall is about our secondary market products, the volume and how we are paying our relationship manager as well as what kind of commission we’re getting given that we have an increase in terms of our RM compensation in the second quarter. So I’ll let Wang to answer and I will translate now.

[Foreign Language] The internet finance, this is something that we like a lot. We think we give something that is very unique in the market, which is a internet finance platform for private banking focused on the white-collars. This is a segment that is not well-covered in market. And it is also that something that we do, so it's quite unique. In terms of when we expect profit from this particular platform, we think that we want to continue to invest, given tremendous revenue growth this quarter. We see the trend in terms of momentum is continuing to be strong and so we will continue to be invest, and so we will continue to invest. We can easily turn into profit this if we want to. But we think that investing in this platform is actually a future for Noah. [Foreign Language] So let me just briefly summarize what chairman Wang said. Basically into the secondary market products, a good part of the secondary market product as we reported is around RMB8.2 billion, was actually returned to clients as a result of the abrupt change in the policies of the IPO launch in China. We believe that actually shift to the secondary market products in terms of fund-to-fund is sold as IPO funds. It's actually helping the clients in this volatile market, because basically these funds would have actually gone to Asia if not for these funds. So we were actually helping to protect the client assets. These client assets were actually returned, most of that due to decline during this volatile market. We are still focused very much in a medium to long-term investing for our client. So in terms of RM incentives, we are quite unique in the market. We’re probably the only one in the market were by the commission across products are all the same, so we don’t promote any particular product. And as a result the RMs are not incentivized to promote any particular product except for the client's interest. And Wang have actually mentioned quite a few funds and I will just summarize quite quickly that we actually managed fund-of-fund with core fund. Our performance is actually now still top at in the market. IR fund is now above 20% and even performance of our secondary market product, our fund-of-fund market product actually is still in a positive territory compared to many in the market that is now actually deep in the red. So in terms of clients trust enough, I think we’ve actually increased our trust substantially over the last few months and you can see that in our performance of the fund that we manage as well as how we have actually recommend the products and through the way that we approach our RM centers.

I want to just know really quickly that in our 6k in our earnings release page 12 we breakup relationship manager compensation, so RM compensation as percentage of net revenues 25%, we feel that is a suitable range and actually that puts us at the mid to low end of the market for our competitors. So overall our compensation as percentage of net revenues is very-very reasonable, we’re continuing to monitor its growth, but it's a very reasonable range. [Foreign Language]

Thank you. The next question comes from Matthew Lawson with Morgan Stanley. Please go ahead.

Hi thanks for taking my call. I got on the conference call a little late, so if this question was already answered then I apologize for asking it. With the pull back in Noah stock in the announcement of up to $50 million share repurchase program, I was wondering if any of those shares been purchased yet, or what the plans are going forward regarding that announcement?

We announced the intention to do a share repurchase program about to 50 million, I believe it is on the July 8th, we’re still currently in the blackout period, the trading window opens on Thursday on the 6th, so we have not executed any share repurchase yet.

Thank you. The next question comes from Sam Dubinsky with Carlson Capital. Please go ahead.

Yes, thanks for taking my questions. In the press release there were lot of footnotes regarding the 1.3 billion in proceeds that need to be refunded to customers from the cancel IPOs. Just to be clear, did you adjust the revenue and EPS in Q2 to factor in the IPO cancellations or will there need to be adjustments to Q3 earnings as well as other refunds occurred in July?

We adjusted revenues, so we didn’t, we booked zero revenue from that because we refunded.

Okay. Great and then the IPO proceeds that you return, just to be clear, did those IPOs already pricing trade in the public markets or at least it can be failed to public?

This was a fund that was looking for IPO allocations, IPO type products and so we dismantled and on round terminated the fund products.

Did client lose money in that fund like was it trading or was it pre-trading?

No, clients did not lose money.

Okay. I want to try to figure out is just a way maybe Mr. Wang or may be Tao the things working in China, just trying to figure out you are not obligate to meet the customers whole, are you if there is a loss or government mandate?

Right we are not obligated to make customers whole, so we bear no financial or legal liability the risk we bear is reputational for selling these products. So we take that very seriously, so that's why what I actually say as soon as the CSRC change this policy we reacted very quickly and terminated unwind fund and return all of the principal to investors and clients did not lose money.

Add one more point, actually in the market you see in China that we are few that I should return to the money to client in IPO fund there are a few actually, because we’re not obligate to do that, we believe that actually right and our values is long term business our client so we decided that we should return that the client.

Okay. Great and could you go into more detail in the performance sheet that you generate in Q2, is that how should think about that going forward?

As I mentioned, we will recognize performance based income when the cash flow is very reasonably assured. So in that sense, we don't really do accruals on a forward basis and don't really projects for, but I did mention that we have a reasonable conservative estimate for that in our guidance. I can’t comment on the run-rate, because there is extreme volatility in the performance based income quarter-over-quarter, we have recognized the performance based income at the end of every quarter. For PEZP products we only recognize income on revenue upon cash settlement termination in the fund. For secondary market products, we recognize to carry when the cash inflow can be reasonably assured. So there is very little adjustments for example to secondary market product performance based income -- right downs. Yes?

And then on the Aon go for, could you maybe discuss how much of that was new funds raise versus performance and how do we think about that in Q3?

I think -- continuing to grow very well. We disclosed the details in the 6K and we are continuing to see new fund and products come out for Q3.

Okay. And my last question just relates to your management, relation managers increased quarter-over-quarter, how should we model OpEx going forward with the higher relation managers, is Q2 the baseline or does it fluctuate with sales?

Q2 is a little bit I would say on the high side but overall I would comment that going back to my earlier comment RM compensation as a percentage of net revenues is riding in the 22% to 25% range. We feel that very suitable trend and we are actively monitoring that number. That actually puts us at the mid to low end of overall RM competition compared to our competitors. So we feel it’s very appropriate. We are continuing to grow the RMP, but the focus is on RM productivity meaning they are gaining greater share of wallet.

So let me answer that. RM number now is 953, we expect that number to increase slightly over the next half year. We want to make sure that we have enough of a quality relationship management based from next year's growth. So lot of a RM actually go into training before they really become trained advisors. And we do not expect that to fluctuate a lot and definitely the number of RMs are not dependent on the type of products and the volume we sale and we are planning for a bit of a longer term. So you see that RM numbers are quite steady as we expect that number to increase both by end of the year but it would definitely not decline.

Thank you. The next question comes from David Lee with BM Harmony Fund. Please go ahead.

Thanks for taking my questions. As you mentioned like Chinese regulators are now producing guidelines on internet finance industry and now the regulators are curbing internet payments. And it's also expected like online payments there is going to be a limit on the early amount so RMB5,000. I was wondering how might that effect Noah's internet finance - as there is more regulations, would that have a big impact on your news going forward?

So I will ask Jingbo Wang and translate in English.

[Foreign Language]

So let just translate and you should also be aware that we actually have a payment company within Noah that actually connects directly to The People Bank of China and as a result all of our payment actually done in a close look and the new directive on the cap on the RMB5,000 actually does not effect at all. The policy that was the consulted now is really not related to transactions of our kind, it's really related to digital wallet whereby the transfer in digital wallet is within RMB5,000, but for what we do in -- which is a direct transfer between the banks, given that we actually have our own payment capabilities and own payment companies we are not affected by that directive. Operator Thank you. The next question comes from Kelly Lewis, Harmony Funds Please go ahead.

[Foreign Language] So let me try to say what the question is, it is really around price point about PE fund, we also issue and distribute a lot of PE funds over the second quarter. The pricing of these products may be at a high-end, if we price it at a high-end in the second quarter, would it be affected as we exit?

[Foreign Language] So the three points: one is we are actually in this market are able to have a lot more bargaining power in terms of selecting the right PE managers, given that we start actually our PE fund distribution business and PE fund business are actually quite thoroughly we started in 2008, we’ve seen many cycle. So in terms of just selecting the best managers we were able, in this market particularly to find the best managers. In a fact that we’ve been looking for fight in a robust way and some of the managers that we see we believe that actually are not up to the par and we haven't actually distributing their products, so actually lower they bought in so that point one. Point two is actually many of our products is actually long term. And many of the PE and VC products are actually 10 to 12 year in duration, so it’s quite long in cycle. We believe that these are -- these parts of service we’ll see sort of cycle and we’re not be affected by a lot of [indiscernible] in the market. Third actually in this market actually we work in the secondary market, we were selling products, we were selling the shares of the company we’ve invested in, so we capture lot of the upside of the market in the second quarter, we weren’t buying actively in this market. So in terms of performance we’re actually quite -- we perform quite well given the -- at the height of the market, we were summing the queries of these invested companies. [Foreign Language] So the second question was really around the listing of Jupi. We think that, we don’t see a lot of competition from Jupi and they have a very different approach to products, they’re heavily focused on real estate and actually particularly in the third and four tier cities. So we don’t subscribe to that philosophy and we don’t currently see a lot of competition in the market from them. [Foreign Language]

Thank you. [Operator Instructions]. There are no further questions. That concludes the Q&A session. I would like to turn the conference back to management for closing remarks.