DBS analyst Ken Shih has maintained their bullish stance on NOAH stock, giving a Buy rating on November 30.
Ken Shih has provided a Buy rating for Noah Holdings based on a mixture of robust earnings growth, promising dividend policy, and strategic overseas expansion. In the third quarter of 2023, Noah’s earnings increased by 28% year-over-year, primarily driven by a surge in insurance sales, aligning with market expectations. The company’s new dividend policy indicates a payout ratio for FY23 forecasted between 35%-50%, translating to an attractive dividend yield of 6%-9%. Additionally, expectations of a potential US rate cut in FY24 could enhance client interest in long-duration products, further boosting the company’s prospects.
Noah Holdings’ strategic focus on diversifying its clientele and product offerings has been a key element in Shih’s positive outlook. The company’s deep insights into alternative products and understanding of Chinese-speaking clients have fortified its position as the largest independent wealth manager in China. Furthermore, Noah’s aggressive push in expanding its international operations, which increased its overseas revenue contribution to 40% as of 9M23, is expected to remain a significant growth driver. Despite a slight adjustment in the price target to US$18.5/HK$29.0 to account for near-term softer growth, the company’s strong balance sheet with ample cash reserves and zero debt underpin the Buy rating as it signals an ongoing commitment to enhancing shareholder returns.
In another report released on November 30, Morgan Stanley also reiterated a Buy rating on the stock with a $20.00 price target.
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Noah Holdings (NOAH) Company Description:
Noah Holdings Ltd. provides investment advisory and wealth management services. It operates business through the following segments: Wealth Management, Asset Management, and Internet Finance. The Wealth Management segment offers a global wealth investment and asset allocation services to high net worth individuals and enterprise clients in China. The Asset Management segment manages and develops financial products denominated in both RMB and U.S. dollars, covering real estate funds and funds of funds, including private equity, real estate, secondary market equity, and fixed income funds of funds. The Internet Finance segment provides financial products and services through a proprietary internet finance platform to white-collar professionals in China. Noah Holdings was founded by Jingbo Wang, Zhe Yin & Boquan He in 2005 and is headquartered in Shanghai, China.
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