Negative Points

• Net revenues from the international segment declined 21.9% year-over-year in the first half, primarily due to the deliberate contraction of the insurance business and exit from legacy referral channels.

• One-time commissions fell 44.1% year-over-year in the second quarter, largely due to a 58.2% decline in insurance-related commissions, reflecting a strategic exit from traditional high-commission products.

• Recurring management fees decreased 10.8% year-over-year in the second quarter, as legacy RMB private equity assets continue to run off.

• The company faces heightened regulatory headwinds and competition in the insurance market, which has impacted revenue streams.

• Carry income is inherently volatile and realization-dependent, making it challenging to forecast and not suitable for linear assumptions, which could lead to fluctuations in future earnings.

• The transformation is still in its early stages, with new growth engines not yet fully offsetting the decline in legacy revenue, as evidenced by the overall flat revenue growth in the first half.

Q & A Highlights

Q: Can management provide more color on the recent development of the legacy Camsing litigation and the reversal of contingent litigation expenses in Q2? Can we expect more reversals in the next few quarters? A: Jason Wu (Finance Director) explained that in Q2, the company introduced a new settlement plan for the legacy Camsing matter, and more than 80% of affected clients have now accepted it, substantially reducing the likely risk exposure. The company is adjusting the provision balance quarterly in line with actual settlement progress. While they continue to engage with remaining unsettled clients, they cannot predict future provision reversals as they are still tracking the settlement programs.

Q: How long will the current transition period take, and what metrics should investors monitor to track progress? Are there any longer-term targets for the AI strategy over the next 3-5 years? A: Management indicated that under the AI era, change can be very fast, making a 3-5 year target less relevant. They cited Singapore as an example, where the AI Wealth Management Department grew AUM from less than US$100 million to over US$400 million in roughly 10 months. The new model is no longer about hiring more RMs to get clients, but about leveraging an AI-powered platform, licensed professionals, and ecosystem partners. They are now replicating this model from Singapore to Hong Kong and other markets, expecting drastic change in a much shorter time than the traditional model.

Q: What are the dividend expectations for the current fiscal year and periods ahead, and what is the anticipated effect of the AI strategy on revenue and profitability in the medium to long term? A: CFO Qing Pan stated that the company has cumulatively distributed about RMB2.2 billion since 2022, maintaining a 100% payout ratio for three consecutive years. While the exact future ratio is not yet decided, they expect to continue distributing a significant portion of income to shareholders. As AI and carry continue to drive profitability and upgrade the business model, they believe they can sustain at least a comparable level of shareholder returns in the future.

Q: How do the KPIs for relationship managers under the new AI Wealth Management model compare to the old model, and how is Noah growing its account base? Can you provide examples of how AI has improved RM productivity? A: Management explained that the new model no longer relies solely on individual RMs. In Singapore, a team of only six people can now cover 500 clients, which was previously impossible. The AI Wealth Management Department handles high-frequency, standardized client engagement, while licensed professionals focus on judgment, compliance, and relationship building. Additionally, the AI+ Ecosystem platform allows cooperation with professionals from other industries who have clients with wealth management needs but lack licenses, expanding client reach without proportional headcount growth.

Q: Can you elaborate on the financial performance for Q2 and the first half of 2026, particularly regarding revenue composition and operating efficiency? A: CFO Qing Pan reported Q2 net revenue of RMB620 million, with operating income of RMB216 million, up 34% year-over-year, and an operating margin of 34.8%. For the first half, net revenues were RMB1.25 billion, broadly flat year-over-year, but operating income rose 30.3% to RMB452 million with a record margin of 36.3%. This was driven by a 12.7% reduction in personnel costs and an 11.6% decline in total operating costs, demonstrating that the company is delivering the same revenue from a materially smaller cost base.

Q: How sustainable is the performance-based income (carry) of RMB238 million in the first half, and is it a one-time event? A: Management emphasized that carry is not a one-off outcome but the result of a long-term systematic investment capability. The model consists of three layers: investing in leading PE funds, using fund-of-funds to observe collective investment decisions, and co-investing/direct investing to convert information advantages into returns. With 67 private equity funds built over a decade across various vintages, the diversified portfolio provides a broad base for future carry realization. However, they cautioned that carry is realization-driven and will fluctuate, not be smooth or linear.

Q: Can you provide more details on the growth of the international business, particularly the AI Wealth Management Department in Singapore? A: CEO Zhe Yin highlighted that Singapore has become the first meaningful proof point for the AI Wealth Management Department model. From its launch in Q4 2025, Singapore AUM grew from less than US$100 million to over US$400 million by Q2, achieving monthly profitability in July. Notably, 92% of clients are covered by the AI-enabled service model, and external ecosystem partners contributed 42% of new AUM. This growth was achieved without a large expansion in RM headcount, demonstrating the potential to decouple asset growth from headcount growth.

Q: What is the outlook for the Mainland China business, and how is the company navigating the regulatory environment? A: The Mainland China business is returning to the fundamentals of investment and asset allocation, focusing on standardized assets with sustainable long-term value. Net revenues for the first half were RMB776 million, up 20.7% year-over-year. The company has proactively reduced its traditional high-commission insurance product model, shifting to comprehensive services like family succession and heritage planning. The future positioning focuses on secondary market investments, serving clients through professional investment capabilities and using AI to improve client engagement and service efficiency.

Q: How is the company planning to replicate the Singapore AI Wealth Management model across other markets? A: Management outlined plans to replicate the Singapore model in Hong Kong and Japan, with gradual expansion into Canada, Australia, the UK, and Europe. The basic architecture will be centralized AI wealth management capabilities plus local licensed professionals plus local ecosystem partners. This approach avoids the traditional model of building heavy physical footprints in every market, potentially improving unit economics and enabling economically viable global coverage for Chinese high-net-worth families.

Q: Can you provide details on the partnership with Column National Association and its significance? A: The group established a partnership with U.S.-licensed banking institution Column National Association to enhance account opening, multi-currency settlement, and payment processing capabilities for international clients. This partnership is part of the international middle and back office infrastructure built since 2024, designed to improve client service efficiency and operational scalability across licensed entities in Hong Kong, Singapore, the United States, and Japan. Management emphasized that front-office AI transformation and back-end customization must happen together for global expansion

For the complete transcript of the earnings call, please refer to the full earnings call transcript .