NOAH

• Transformation Validation: The company asserts that its new AI-driven operating model is no longer just theoretical but has generated its first meaningful proof point in Singapore, achieving monthly profitability in July.
• Decoupling Growth from Headcount: A key operational highlight is the decoupling of asset growth from Relationship Manager (RM) headcount. Overseas RM headcount dropped 36.2% year-over-year, yet U.S. dollar-denominated AUM grew 11.7%. This challenges the traditional wealth management growth formula.
• AI Wealth Management Department: This is the core new engine. It shifts from a personal production model (one RM, one client) to an institutionalized model where AI handles high-frequency standardized engagement, while licensed professionals handle regulated judgment. In Singapore, 92% of clients are covered by this AI-enabled service model.
• Revenue Structure Shift: The company is strategically phasing out legacy high-commission insurance and referral channel revenues (down 36% overall) to focus on higher-quality, recurring investment capabilities and carry.
• Cost Efficiency: Operating costs decreased 11.6% year-over-year in H1, with personnel costs down 12.7%, reflecting structural efficiency gains rather than just cyclical cuts.
• Singapore Proof Point: Singapore AUM grew from <$100M to >$400M in less than a year. External ecosystem partners contributed 42% of new AUM in H1, demonstrating the scalability of the platform without heavy local hiring.

• Full-Year Operating Margin: Management maintains the guidance that the full-year operating margin will remain at a healthy level of approximately 30%, though quarterly results may fluctuate based on product mix and expense timing.
• No Linear Carry Forecasting: Management explicitly states they do not normalize or linearly assume carry realization; it will fluctuate based on market conditions and exit opportunities.
• Replication Timeline: Management expects rapid acceleration, stating the transition is not a 3-5 year process but will see significant changes in the next two quarters as the Singapore model replicates to Hong Kong, Japan, Canada, Australia, and Europe.

The transcript does not provide a detailed breakdown of financial performance by specific product segment (e.g., Insurance vs. Asset Management) in terms of absolute revenue contribution percentages for each distinct line item. However, it highlights that Net Distribution Income declined 36% year-over-year (with insurance-related products down 53.8%), while Performance-based income (Carry) surged 364% to RMB 238 million for the first half. Investment income was RMB 39.79 million compared to a loss last year. Total Group Net Revenue for H1 2026 was RMB 1.25 billion (flat YoY). Mainland China business generated RMB 776 million in net revenue (up ~20.7% YoY), while International business generated RMB 469 million (down 21.9% YoY due to strategic contraction of legacy insurance/referral channels).

• Legacy Litigation: There is ongoing risk associated with legacy canvassing matters, though progress in settlements has reduced uncertainty. Contingent liabilities were RMB 455 million at June 30, down from RMB 505 million previously.
• Revenue Volatility: The deliberate contraction of legacy revenue streams (insurance/commissions) creates near-term pressure points before new engines fully scale.
• Execution Risk: Success depends on the successful replication of the AI Wealth Management model across multiple jurisdictions with varying regulatory environments.
• Market Dependency: Carry realization remains dependent on external market conditions, exit opportunities, and underlying portfolio valuations.

Q: Analyst asked about the duration of the transformation phase, metrics to track progress, and how AI impacts RM productivity/KPIs under the new model. / A: Chairlady Noah Wang stated the transition is accelerating rapidly, not taking 3-5 years, citing Singapore's AUM growth from $86M to $400M+ in months. She explained the shift is organizational, not just tool-based: moving from a single RM front desk to three engines (AI-empowered RMs, AI Wealth Management Dept, AI+Ecosystem). The new model allows platforms to serve more clients per professional, with ecosystem partners driving acquisition, fundamentally changing unit economics and scalability beyond traditional headcount limits.