Noah Holdings Ltd.
Annual Report 2021

Plain-text annual report

Table of ContentsUNITED STATESSECURITY AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 20-F(Mark One)☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR 12(G) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021.OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company reportFor the transition period from toCommission file number: 001-34936NOAH HOLDINGS LIMITED(Exact name of Registrant as specified in its charter)N/A(Translation of Registrant’s name into English)Cayman Islands(Jurisdiction of incorporation or organization)Building 2, 1687 Changyang Road,Shanghai 200090, People’s Republic of China(Address of principal executive offices)Qing Pan, Chief Financial OfficerNoah Holdings LimitedBuilding 2, 1687 Changyang Road,Shanghai 200090, People’s Republic of ChinaPhone: (86) 21 8035 9221Facsimile: (86) 21 8035 9641(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of each class Trading Symbol(s) Name of exchange on which registeredAmerican depositary shares, two of which representone Class A ordinary share, par value US$0.0005 per shareClass A ordinary shares, par value US$0.0005 per share* NOAHNew York Stock Exchange(Title of Each Class and Name of Each Exchange on Which Registered)* Not for trading, but only in connection with the listing on the New York Stock Exchange of the American depositary sharesSecurities registered or to be registered pursuant to Section 12(g) of the Act:NONETable of Contents(Title of Class)Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:NONE(Title of Class)Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:21,764,455 Class A ordinary shares issued, par value US$0.0005 per share, and 8,315,000 Class B ordinary shares issued, par value US$0.0005 per share.Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or (15) (d) of the SecuritiesExchange Act of 1934. ☐ Yes ☒ NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during thepreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See thedefinitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use theextended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting StandardsCodification after April 5, 2012.Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control overfinancial reporting under Section 404(b) of the Sarbanes‐Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its auditreport. ☒ Yes ☐ NoIndicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S. GAAP ☒ International Financial Reporting Standards as issuedby the International Accounting Standards Board ☐ Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected tofollow: ☐ Item 17 ☐ Item 18If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities ExchangeAct of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ NoTable of ContentsiTABLE OF CONTENTSINTRODUCTION1FORWARD-LOOKING STATEMENTS3PART I4Item 1.Identity of Directors, Senior Management and Advisers4Item 2.Offer Statistics and Expected Timetable4Item 3.Key Information4Item 4.Information on the Company54Item 4A.Unresolved Staff Comments97Item 5.Operating and Financial Review and Prospects97Item 6.Directors, Senior Management and Employees121Item 7.Major Shareholders and Related Party Transactions135Item 8.Financial Information137Item 9.The Offer and Listing139Item 10.Additional Information139Item 11.Quantitative and Qualitative Disclosures About Market Risk150Item 12.Description of Securities Other than Equity Securities151PART II154Item 13.Defaults, Dividend Arrearages and Delinquencies154Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds154Item 15.Controls and Procedures154Item 16.Reserved157Item 16A.Audit Committee Financial Expert157Item 16B.Code of Ethics157Item 16C.Principal Accountant Fees and Services157Item 16D.Exemptions from the Listing Standards for Audit Committees158Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers158Item 16F.Change in Registrant’s Certifying Accountant158Item 16G.Corporate Governance158Item 16H.Mine Safety Disclosure158Item 16I.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections158PART III159Item 17.Financial Statements159Item 18.Financial Statements159Item 19.Exhibits159Table of Contents1INTRODUCTIONUnless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:●“active clients” for a given period refer to registered clients who purchase one or more investment products distributed or provided byus during a given period, excluding clients in our other businesses segment;●“ADSs” refer to our American depositary shares, two of which represent one Class A ordinary share;●“assets under advisory” or “AUA” refers to clients’ total outstanding assets managed by Gopher or third party product providers;●“assets under management” or “AUM” refers to the amount of capital commitments made by investors to the funds we providecontinuous management services without adjustment for any gain or loss from investment, for which we are entitled to receive recurringservice fees or performance-based income, except for public securities investments. For pubic securities investments, the “assets undermanagement” or “AUM” refers to the net asset value of the investments we manage, for which we are entitled to receive recurringservice fees and performance-based income;●“China” or the “PRC” refers to the People’s Republic of China, excluding, for the purpose of this annual report only, Hong Kong,Macau and Taiwan;●“Class A ordinary shares” refer to our Class A ordinary shares, par value US$0.0005 per share;●“Class B ordinary shares” refer to our Class B ordinary shares, par value US$0.0005 per share;●“Consolidated Affiliated Entities” refer to Noah Investment and its subsidiaries, all of which are controlled by our company through theContractual Arrangements;●“Contractual Arrangements” refer to variable interest entity structure and, where the context requires, the agreements underlying thestructure.●“FOF” refers to fund of funds●“Gopher Asset Management” refers to Gopher Asset Management Co., Ltd., a limited liability company established under the laws ofthe PRC on February 9, 2012, and one of our Consolidated Affiliated Entities;●“Gopher GP” refers to Gopher Capital GP Limited, an exempted company with limited liability incorporated in the Cayman Islands onMay 11, 2012, and one of the significant subsidiaries;●“HNW” refers to high net worth;●“HNW clients” or “HNW investors” refer to clients/investors with investable financial assets of no less than RMB6 million;●“investment products” refer to products we distribute to clients, such as mutual fund products, private secondary products, private equityproducts and other products;●“MoM” refers to manager of managers;●“NAV” refers to net asset value;Table of Contents2●“Noah Group” refers to Shanghai Noah Investment (Group) Co., Ltd., a limited liability company established under the laws of the PRCon August 24, 2007, and one of the significant subsidiaries;●“Noah HK” refers to Noah Holdings (Hong Kong) Limited, a limited company incorporated under the laws of Hong Kong onSeptember 1, 2011, and one of the significant subsidiaries;●“Noah Investment” refers to Shanghai Noah Investment Management Co., Ltd., a limited liability company established under the lawsof the PRC on August 26, 2005, and one of the Consolidated Affiliated Entities;●“Noah Upright” refers to Noah Upright Fund Distribution Co., Ltd., a limited liability company established under the laws of the PRCon November 18, 2003, and one of the significant subsidiaries;●“NYSE” refers to the New York Stock Exchange;●“ordinary shares” refer to our ordinary shares, which include both Class A ordinary shares and Class B ordinary shares, par valueUS$0.0005 per share;●“PCAOB” refers to the Public Company Accounting Oversight Board;●“private funds” refer to investment funds which raise capital through non-public offerings of funds targeting qualified investors;●“registered clients” refer to clients who have completed a preliminary know-your-client and anti-money laundering review process, butmay or may not have purchased any products from us;●“repeat client rate” refers to the number of clients who have both (i) purchased investment products from us in a given year and (ii)purchased two or more investment products in any year(s) (the purchases may be made in different years), as a percentage of the clientswho have purchased investment products from us in that given year;●“RMB” or “Renminbi” refers to the legal currency of China;●“Shanghai Gopher” refers to Shanghai Gopher Asset Management Co., Ltd., a limited liability company established in the PRC onDecember 14, 2012, and one of the Consolidated Affiliated Entities;●“Shanghai Massa” refers to Shanghai Gopher Massa Asset Management Co., Ltd., a limited liability company established under thelaws of the PRC on June 29, 2015, and one of the Consolidated Affiliated Entities;●“Shanghai Nuohong” refers to Shanghai Nuohong Real Estate Co., Ltd., a limited liability company established under the laws of thePRC on May 30, 2013, and one of the significant subsidiaries;●“transaction value” refers to the aggregate value of the investment products we distribute during a given period; and●“ultra HNW clients” or “ultra HNW investors” refer to clients/investors with investable financial assets of more than RMB50 million.Unless the context indicates otherwise, each of “we,” “us,” “our company,” “our group,” “our” and “Noah” refer to Noah Holdings Limited,its subsidiaries and Consolidated Affiliated Entities. Unless otherwise noted, all translations from RMB to U.S. dollars (“USD” or “US$”) are made ata rate of RMB6.3726 to US$1.00, the effective noon buying rate for December 30, 2021 as set forth in the H.10 statistical release of the FederalReserve Board.Table of Contents3FORWARD-LOOKING STATEMENTSThis annual report on Form 20-F contains forward-looking statements that involve risks and uncertainties. All statements other thanstatements of historical facts are forward-looking statements. Known and unknown risks, uncertainties and other factors, including those listed under“Risk Factors,” may cause our actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.You can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,”“estimate,” “intend,” “plan,” “believe,” “likely to” or other similar expressions. We have based these forward-looking statements largely on ourcurrent expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations,business strategy and financial needs. These forward-looking statements include:●our goals and strategies;●our future business development, financial condition and results of operations;●the expected growth of the industries in which we operate;●our expectations regarding demand for and market acceptance of the products and services we distribute, manage or offer;●our expectations regarding keeping and strengthening our relationships with product providers;●relevant government policies and regulations relating to the industries in which we operate;●our ability to attract and retain qualified employees;●our ability to stay abreast of market trends and technological advances;●our plans to invest in research and development to enhance our product choices and service offerings;●competition in the industries in which we operate;●general economic and business conditions in China and internationally;●our ability to obtain certain licenses and permits necessary to operate and expand our businesses; and●our ability to effectively protect our intellectual property rights and not infringe on the intellectual property rights of others.These forward-looking statements involve various risks and uncertainties. Although we believe that our expectations expressed in theseforward-looking statements are reasonable, our expectations may later be found to be incorrect. Our actual results could be materially different fromour expectations. Other sections of this annual report include additional factors that could adversely impact our business and financial performance.Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for ourmanagement to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor,or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. You shouldthoroughly read this annual report and the documents that we refer to herein with the understanding that our actual future results may be materiallydifferent from, or worse than, what we expect. We qualify all of our forward-looking statements by these cautionary statements.Table of Contents4PART IItem 1. Identity of Directors, Senior Management and AdvisersNot applicable.Item 2. Offer Statistics and Expected TimetableNot applicable.Item 3. Key InformationOur Corporate Structure and Contractual Arrangements with Our Consolidated Affiliated Entities and Their Respective IndividualShareholdersNoah Holdings Limited is a Cayman Islands holding company. We conduct businesses through our subsidiaries and our ConsolidatedAffiliated Entities. Because we are an exempted company incorporated in the Cayman Islands, we are classified as a foreign enterprise under PRClaws and regulations, and our wholly-owned PRC subsidiaries are foreign-invested enterprises, or the subsidiaries of the foreign-invested enterprises.PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of PRC companies engaging in value-addedtelecommunications services.To comply with PRC laws and regulations, we rely on the Contractual Arrangements with Noah Investment and its subsidiaries to operate aportion of our operations in China, primarily the asset management business. A series of contractual agreements, including an exclusive optionagreement, an exclusive support service agreement, a share pledge agreement and power of attorney, have been entered into by and among NoahGroup, Noah Investment and its shareholders. These contractual arrangements enable us to (1) have power to direct the activities that mostsignificantly affect the economic performance of Noah Investment and its subsidiaries; (2) receive substantially all of the economic benefits fromNoah Investment and its subsidiaries in consideration for the services provided by Noah Group; and (3) have an exclusive option to purchase all orpart of the equity interests in Noah Investment when and to the extent permitted by PRC law, or request any existing shareholder of Noah Investmentto transfer any or part of the equity interests in Noah Investment to another PRC person or entity designated by us at any time at our discretion. Formore details of these contractual arrangements, see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements.”Because of the Contractual Arrangements, we are the primary beneficiary of Noah Investment and its subsidiaries and hence treat them asour consolidated entities and consolidate their results of operations into ours. Our Consolidated Affiliated Entities, Noah Investment and itssubsidiaries, generated RMB867.2 million, RMB978.6 million and RMB1,505.1 million (US$236.2 million) in net revenues in 2019, 2020 and 2021,respectively, which contributed 25.6%, 29.6% and 35.1% of our total net revenues in the respective years. In addition, we hold the required licensesand permits necessary to conduct our asset management business in China through our Consolidated Affiliated Entities. Investors of our ADSs are notpurchasing equity interest in our Consolidated Affiliated Entities in China but instead are purchasing equity interest in a Cayman Islands holdingcompany with no direct equity ownership of our Consolidated Affiliated Entities.Table of Contents5Our corporate structure is subject to risks associated with the Contractual Arrangements with our Consolidated Affiliated Entities. TheContractual Arrangements may not be as effective as direct ownership in providing us with control over our Consolidated Affiliated Entities and wemay incur substantial costs to enforce the terms of the arrangements. Additionally, there are substantial uncertainties regarding the interpretation andapplication of current and future PRC laws and regulations. It is uncertain whether any new PRC laws or regulations relating to the ContractualArrangements will be adopted or if adopted, what they would provide. If the corporate structure and the Contractual Arrangements are deemed byrelevant regulatory authority or court to be illegal or invalid, either in whole or in part, we may lose control of our Consolidated Affiliated Entities andhave to modify such structure to comply with regulatory requirements. Further, if the corporate structure and the Contractual Arrangements are foundto be in violation of any existing or future PRC laws or regulations, the relevant regulatory authority would have broad discretion to take action indealing with the violation or failure, in which case, we could be subject to severe penalties, including being prohibited from continuing its operationsor unwinding the Contractual Arrangements. Since PRC administrative and court authorities have significant discretion in interpreting andimplementing statutory provisions and contractual terms, it may be difficult to evaluate the outcome of administrative and court proceedings and thelevel of legal protection we enjoy. Our Cayman Islands holding company, our subsidiaries and Consolidated Affiliated Entities, and investors of ourcompany face uncertainty about potential future actions by the PRC government that could affect the enforceability of the contractual arrangementswith our Consolidated Affiliated Entities and, consequently, significantly affect the financial performance of our Consolidated Affiliated Entities andour company as a whole. See “Item 3. Key Information—D. Risk Factors—Risks Related to Corporate Structure.”We face various legal and operational risks and uncertainties associated with being based in and having our operations primarily in Chinaand the complex and evolving PRC laws and regulations. The PRC government has significant authority to exert influence on the ability of a China-based company, like us, to conduct its business, accept foreign investments or be listed on United States or other foreign exchange outside of China.For example, we face risks associated with regulatory approvals on offerings conducted overseas by and foreign investment in China-based issuers,the use of our Consolidated Affiliated Entities, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. In addition, sinceour auditor is located in China, a jurisdiction where the PCAOB has been unable to conduct inspections without the approval of the Chineseauthorities, our auditor is currently not inspected by the PCAOB. As a result, our ADSs may be delisted under the Holding Foreign CompaniesAccountable Act. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.Additionally, the inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections. Also, the PRCgovernmental authorities have recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/orforeign investment in China-based issuers. Any such action could result in a material adverse change in our operations and the value of our ADSs,significantly limit or completely hinder our ability to offer or continue to offer securities to investors. In addition, implementation of industry-wideregulations directly targeting our operations could cause the value of our securities to significantly decline. For a detailed description of risks relatedto doing business in China, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China.”You should carefully consider all of the information in this annual report before making an investment in the ADSs. Below please find asummary of the principal risks and uncertainties we face, organized under relevant headings:Risks Related to Our Business●The investment products that we distribute or manage involve various risks and any failure to identify or fully appreciate such risks maynegatively affect our reputation, client relationships, operations and prospects.●Our reputation and brand recognition are crucial to our business. Any harm to our reputation or failure to maintain, protect, promote orenhance our brand recognition may materially and adversely affect our business, financial condition and results of operations.●Our businesses may be adversely impacted by general economic and market conditions.●The performance of our investment portfolio may affect the AUM, revenue and profitability of our asset management business.●We may not be able to continue to grow at our historical rate of growth, and if we fail to manage our growth effectively, our businessmay be materially and adversely affected.Table of Contents6●Because a significant portion of the one-time commissions and recurring service fees we earn on the distribution of investment productsare based on commission and fee rates, any decrease in these commission and fee rates may have an adverse effect on our revenues,cash flow and results of operations.●The investment products we distribute are supplied by a limited number of product partners; and the renegotiation or termination of ourrelationships with such product partners could significantly impact our business.●Because the laws and regulations governing the industries of wealth management, asset management and other businesses in China aredeveloping and subject to further change, any failure to obtain or maintain requisite approvals, licenses or permits necessary to conductour operations or any failure to comply with laws and regulations applicable to our business and services could harm our business.●Some of our clients may redeem their investments from time to time, which could reduce our recurring service fees.●Our lending business is subject to credit risks, which could adversely affect our results of operations.●Our business involves relatively new business models which may not be successful.Risks Related to Corporate Structure●We are a Cayman Islands holding company primarily operating in China through our subsidiaries and Consolidated Affiliated Entities,including Noah Investment with which we have maintained Contractual Arrangements and its subsidiaries in the PRC. Investors thusare not purchasing, and may never directly hold, equity interests in the Consolidated Affiliated Entities. There are substantialuncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to suchagreements that establish the Contractual Arrangements for a portion of our China operations, including potential future actions by thePRC government, which could affect the enforceability of the Contractual Arrangements with Noah Investment and its subsidiaries and,consequently, significantly affect the financial condition and results of operations of us. If the PRC government finds that suchagreements do not comply with PRC laws, regulations, and rules, or if these laws, regulations, and rules or the interpretation thereofchange in the future, we could be subject to severe penalties or be forced to relinquish our interests in Noah Investment and itssubsidiaries or forfeit its rights under the Contractual Arrangements.●We rely on our Consolidated Affiliated Entities to operate a portion of our China operations, which may not be as effective as directownership in providing operational control.●Contractual Arrangements among our PRC subsidiary, Noah Group, one of our Consolidated Affiliated Entities, Noah Investment, andNoah Investment’s shareholders may be subject to scrutiny by the PRC tax authorities, who may determine that we or Noah Investmentand its subsidiaries owe additional taxes, which could substantially reduce our consolidated net income and the value of yourinvestment.●Because certain shareholders of our Consolidated Affiliated Entities are our directors and executive officers, their fiduciary duties to usmay conflict with their respective roles in the Consolidated Affiliated Entities. If any of the shareholders of our Consolidated AffiliatedEntities fails to act in the best interests of our company or our shareholders, our business and results of operations may be materiallyand adversely affected.●We may rely to a large extent on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash andfinancing requirements we may have, and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have amaterial adverse effect on our ability to conduct our business.●Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.Table of Contents7●PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of conversionof foreign currencies into Renminbi may delay or prevent us from using any offshore cash we may have to make loans to our PRCsubsidiaries and Consolidated Affiliated Entities or to make additional capital contributions to our PRC subsidiaries, which couldmaterially and adversely affect our liquidity and our ability to fund and expand our business.Risks Related to Doing Business in China●Our ADSs may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors who arelocated in China. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of yourinvestment. Additionally, the inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.●Proceedings instituted by the SEC against certain PRC-based accounting firms, including our independent registered public accountingfirm, could result in financial statements being determined to not be in compliance with the requirements of the U.S. Exchange Act.●The approval of or filing with the CSRC or other PRC government authorities may be required under PRC law in connection with ourissuance of securities overseas, and, if required, we cannot predict whether or for how long we will be able to obtain such approval orcomplete such filing.●PRC governmental authorities’ significant authority in regulating our operations and their oversight and control over offeringsconducted overseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offeror continue to offer securities to investors and result in a material adverse change in our operations and the value of our ADSs.●Our business is subject to various evolving PRC laws and regulations regarding data privacy and cyber security. Failure of cybersecurity and data privacy concerns could subject us to penalties, damage our reputation and brand, and harm our business and resultsof operations.Risks Related to Our ADSs●The market price for our ADSs may continue to be volatile.●Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing anychange of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.●The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs.●There is no assurance if and when we will pay dividends in the future. Therefore, you should not rely on an investment in our ADSs as asource of future dividend income.●Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs to decline.●Techniques employed by short sellers may drive down the trading price of our ADSs.●If securities or industry analysts do not publish research or reports about our business, or if they adversely change theirrecommendations regarding our ADSs, the market price for our ADSs and trading volume could decline.Table of Contents8Transfer of Funds and Other Assets between Our Company, Its Subsidiaries and the Consolidated Affiliated EntitiesNoah Holdings Limited is a holding company incorporated in the Cayman Islands. We conduct business in the PRC through our PRCsubsidiaries and Consolidated Affiliated Entities. Under PRC law, we may provide funding to our PRC subsidiaries only through capital contributionsor loans, and to the Consolidated Affiliated Entities only through loans, subject to the satisfaction of applicable government registration and approvalrequirements.We may also rely significantly on dividends and other distributions by our PRC subsidiaries for our cash and financing requirements,including the funds necessary to pay dividends and other cash distributions to our shareholders and pay any debt we may incur. If our PRCsubsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make otherdistributions to us. Under the Contractual Arrangements, we, through our PRC subsidiary Noah Group, are also entitled to substantially all of theeconomic benefits of the Consolidated Affiliated Entities in the form of service fees and license fees. For risks relating to the fund flows of ouroperations in China, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC regulations relating tooffshore investment activities by PRC residents may subject our PRC resident beneficial owners or our PRC subsidiaries to liability or penalties, limitour ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase its registered capital or distribute profits to us, ormay otherwise adversely affect us” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The dividends wereceive from our PRC subsidiaries may be subject to PRC tax under the PRC Enterprise Income Tax Law, which would have a material adverse effecton our financial condition and results of operations. In addition, if we are classified as a PRC resident enterprise for PRC income tax purposes, suchclassification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.” In addition, the PRC tax authoritiesmay require us to adjust our taxable income under the Contractual Arrangements, which would materially and adversely affect its ability to paydividends and other distributions to us.Our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRCaccounting standards and regulations. Under PRC laws, each of our PRC subsidiaries and our Consolidated Affiliated Entities are required to set asideat least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although thestatutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of therespective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. As a result of these PRC laws andregulations, our PRC subsidiaries are restricted in their ability to transfer a portion of their net assets, including general reserve and registered capital,either in the form of dividends, loans or advances. Such restricted portion amounted to RMB1,765.1 million, RMB2,040.5 million and RMB2,950.5million (US$463.0 million) as of December 31, 2019, 2020 and 2021, respectively.Under the Contractual Arrangements, Noah Group provides certain support services to our Consolidated Affiliated Entities and is entitled toreceive service fees from our Consolidated Affiliated Entities in exchange. The Contractual Arrangements provide that our Consolidated AffiliatedEntities shall pay Noah Group a service fee on a quarterly basis. The amount of the service fees shall be verified and determined according to actualservices provided by Noah Group, provided that the total service fees shall be equal to the revenue less expenses and the license fees. The license feesare paid by our Consolidated Affiliated Entities to Noah Group on a yearly basis, in consideration of the intellectual property rights licenses grantedby Noah Group. The amount of the license fees shall be determined by the board of Noah Group. Pursuant to the Contractual Arrangements, NoahGroup is entitled to collect all or part of the revenue as the agent of our Consolidated Affiliated Entities, subject to a joint decision by the parties.Under that circumstance, Noah Group shall deduct the service fees from the revenue it collects on behalf of our Consolidated Affiliated Entities.During the three years ended December 31, 2019, 2020 and 2021, Noah Group did not charge any service fees or licenses fees from our ConsolidatedAffiliated Entities under the Contractual Arrangements, and there was no cash flows or transfers of other assets between Noah Group and ourConsolidated Affiliated Entities under the Contractual Arrangements. See “—Financial Information Related to the VIEs” and “—IntercompanyRevenues between the Consolidated Affiliated Entities and Oue Subsidiaries” for other services provided, cash flows or transfer of other assetsbetween our company, our subsidiaries and our Consolidated Affiliated Entities during the three years ended December 31, 2019, 2020 and 2021.Neither the PRC subsidiaries of our company nor the Consolidated Affiliated Entities is obligated to make dividends or distributions to ourcompany under the Contractual Arrangements. To date, no dividends or distributions have been made to our company by our PRC subsidiaries or theConsolidated Affiliated Entities.Table of Contents9Furthermore, cash transfers from our PRC subsidiaries to our subsidiaries outside of China are subject to PRC government control ofcurrency conversion. Restrictions on the availability of foreign currency may affect the ability of our PRC subsidiaries and Consolidated AffiliatedEntities to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominatedobligations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC foreign exchange control regulationsrestricting the conversion of Renminbi into foreign currencies may limit our ability to utilize our revenues effectively and affect the value of yourinvestment.”Table of Contents10Financial Information Related to the VIEsThe following tables set forth the summary condensed consolidated balance sheets data as of December 31, 2019, 2020 and 2021 of (i) ourcompany and our subsidiaries and (ii) the Consolidated Affiliated Entities, and the summary of the condensed consolidated statements of operationsand cash flows for the years ended December 31, 2019, 2020 and 2021. Our consolidated financial statements are prepared and presented inaccordance with accounting principles generally accepted in the United States. Our and Consolidated Affiliated Entities’ historical results are notnecessarily indicative of results expected for future periods. You should read this information together with our consolidated financial statements andthe related notes and “Item 5. Operating and Financial Review and Prospects” included elsewhere in this annual report.Selected Condensed Consolidated Balance Sheets DataAs of December 31, 2021Eliminatingadjustments between (i)our company and oursubsidiaries and (ii) theConsolidatedConsolidated AffiliatedConsolidated Our company Affiliated Entities Our subsidiaries Entities total(RMB in thousands)Assets Cash and cash equivalents 224,145 1,181,479 1,998,979 — 3,404,603Restricted cash — 510 510Short-term investments — 9,662 83,141 — 92,803Accounts receivable and contract assets, net — 475,652 332,377 — 808,029Amounts due from related parties, net 760 276,744 173,885 — 451,389Loans receivables, net — 50,884 544,882 — 595,766Investments in subsidiaries and the ConsolidatedAffiliated Entities 8,538,829 — — (8,538,829) —Amounts due from internal companies — — 754,753 (754,753) —Long-term investments — 300,720 367,852 — 668,572Investment in affiliates 301,509 854,138 246,436 — 1,402,083Property and equipment, net — 43,971 2,536,964 — 2,580,935Operating lease right-of-use assets, net — 15,031 208,621 — 223,652Deferred tax assets — 63,312 272,593 — 335,905Other assets 637 60,867 264,038 — 325,542Total assets 9,065,880 3,332,970 7,784,521 (9,293,582) 10,889,789Liabilities Accrued payroll and welfare expenses — 381,653 564,894 — 946,547Income tax payable — 149,226 41,034 — 190,260Amounts due to internal companies 575,428 179,325 — (754,753)Deferred revenue — 6,721 56,910 — 63,631Contingent liabilities 433,345 — — 433,345Deferred tax liabilities — 254 233,880 — 234,134Operating lease liabilities, non-current — 15,512 115,444 — 130,956Other liabilities 16,332 291,857 441,086 — 749,275Total liabilities 1,025,105 1,024,548 1,453,248 (754,753) 2,748,148Total net assets 8,040,775 2,308,422 6,331,273 (8,538,829) 8,141,641Table of Contents11As of December 31, 2020Eliminatingadjustments between (i)our company and oursubsidiaries and (ii) theConsolidatedConsolidated AffiliatedConsolidated Our company Affiliated Entities Our subsidiaries Entities total(RMB in thousands)Assets Cash and cash equivalents 1,359,841 839,534 2,805,836 — 5,005,211Restricted cash — 3,585 6,408 — 9,993Short-term investments — 75,000 39,928 — 114,928Accounts receivable and contract assets, net — 133,956 300,502 — 434,458Amounts due from related parties, net 778 350,879 168,521 — 520,178Loans receivables, net — 104,673 314,274 — 418,947Investments in subsidiaries and the ConsolidatedAffiliated Entities 6,107,489 — — (6,107,489) —Amounts due from internal companies — — 200,391 (200,391) —Long-term investments — 280,624 255,760 — 536,384Investment in affiliates 279,430 740,452 244,803 — 1,264,685Property and equipment, net — 18,134 230,535 — 248,669Operating lease right-of-use assets, net — 19,010 255,144 — 274,154Deferred tax assets — 41,149 183,091 — 224,240Other assets 41,425 46,132 260,182 — 347,739Total assets 7,788,963 2,653,128 5,265,375 (6,307,880) 9,399,586Liabilities Accrued payroll and welfare expenses — 166,411 539,211 — 705,622Income tax payable — 99,889 40,888 — 140,777Amounts due to internal companies 56,937 143,454 — (200,391)Deferred revenue 8,016 63,597 — 71,613Contingent liabilities 530,433 — — 530,433Deferred tax liabilities 2,276 3,070 40,535 — 45,881Operating lease liabilities, non-current — 20,123 174,261 — 194,384Other liabilities 13,806 171,753 247,946 — 433,505Total liabilities 603,452 612,716 1,106,438 (200,391) 2,122,215Total net assets 7,185,511 2,040,412 4,158,937 (6,107,489) 7,277,371Table of Contents12Selected Condensed Consolidated Statements of Operations DataFor the year ended December 31, 2021Eliminating adjustmentsbetween (i) our companyand our subsidiaries andConsolidated(ii) the ConsolidatedConsolidated Our company Affiliated Entities Our subsidiaries Affiliated Entities total(RMB in thousands)Net revenue — 1,505,108 3,013,347 (225,361) 4,293,094Total operating cost and expenses (42,240) (867,215) (2,410,102) 225,361 (3,094,196)(Loss) income from operations (42,240) 637,893 603,245 — 1,198,898Total other (expenses) income (21,853) 23,868 97,129 — 99,144Income tax expenses — (195,446) (98,494) — (293,940)Income from equity in affiliates 68,388 150,106 83,485 — 301,979Income from equity in subsidiaries and the Consolidated Affiliated Entities 1,309,836 — — (1,309,836) —Net income 1,314,131 616,421 685,365 (1,309,836) 1,306,081For the year ended December 31, 2020Eliminating adjustmentsbetween (i) our companyand our subsidiaries andConsolidated(ii) the ConsolidatedConsolidated Our company Affiliated Entities Our subsidiaries Affiliated Entities total(RMB in thousands)Net revenue — 978,589 2,512,040 (184,803) 3,305,826Total operating cost and expenses (5,944) (524,913) (1,701,296) 184,803 (2,047,350)(Loss) income from operations (5,944) 453,676 810,744 — 1,258,476Total other (expenses) income (1,793,649) 68,444 (118,590) — (1,843,795)Income tax expenses (3,058) (128,563) (126,839) — (258,460)Income (loss) from equity in affiliates 78,768 (258) 21,747 — 100,257Income from equity in subsidiaries and the Consolidated Affiliated Entities 978,658 — — (978,658) —Net (loss) income (745,225) 393,299 587,062 (978,658) (743,522)Table of Contents13For the year ended December 31, 2019Eliminating adjustmentsbetween (i) our companyand our subsidiaries andConsolidated(ii) the ConsolidatedConsolidated Our company Affiliated Entities Our subsidiaries Affiliated Entities total(RMB in thousands)Net revenue — 867,150 2,760,044 (235,382) 3,391,812Total operating cost and expenses (5,687) (565,203) (2,141,338) 235,382 (2,476,846)(Loss) income from operations (5,687) 301,947 618,706 — 914,966Total other (expenses) income 33,617 51,370 (31,978) — 53,009Income tax expenses (5,257) (92,914) (121,854) — (220,025)Income from equity in affiliates 36,103 29,111 50,595 — 115,809Income from equity in subsidiaries and the Consolidated Affiliated Entities 770,375 — — (770,375) —Net income 829,151 289,514 515,469 (770,375) 863,759Table of Contents14Selected Condensed Consolidated Cash Flows DataFor the year ended December 31, 2021Eliminatingadjustments between (i)our company and ourConsolidatedsubsidiaries and (ii) theAffiliatedConsolidated Affiliated Consolidated Our company Entities Our subsidiaries Entities total(RMB in thousands)Net cash provided by operating activities 63,125 562,400 896,313 — 1,521,838Net cash used in investing activities (1,120,785) (207,114) (2,820,103) 1,575,908 (2,572,094)Net cash provided by (used in) financing activities 93,861 (16,416) 985,342 (1,575,908) (513,121)For the year ended December 31, 2020Eliminatingadjustments between (i)our company and ourConsolidatedsubsidiaries and (ii) theAffiliatedConsolidated Affiliated Consolidated Our company Entities Our subsidiaries Entities total(RMB in thousands)Net cash provided by (used in) operating activities 412,444 (409,359) 793,268 — 796,353Net cash provided by (used in) investing activities 57,424 357,026 (105,556) 43,690 352,584Net cash used in financing activities (248,238) — (79,494) (43,690) (371,422)For the year ended December 31, 2019Eliminatingadjustments between (i)our company and ourConsolidated subsidiaries and (ii) the AffiliatedConsolidated Affiliated Consolidated Our company Entities Our subsidiaries Entities total(RMB in thousands)Net cash provided by operating activities 337,150 761,312 189,771 — 1,288,233Net cash provided by (used in) investing activities 135,693 (345,092) (51,281) 78,668 (182,012)Net cash provided by financing activities 31,688 20,670 569,621 (78,668) 543,311Intercompany Revenues between the Consolidated Affiliated Entities and Oue SubsidiariesThe intercompany services between the Consolidated Affiliated Entities and our subsidiaries principally consist of shared services within thegroup, including the support of information technology, marketing activities, strategic development, human resources and legal consulting.The Consolidated Affiliated Entities provide shared services to our subsidiaries, the amounts of which were RMB50.7 million, RMB43.1million and RMB38.3 million (US$6.0 million), for the years ended December 31, 2019, 2020 and 2021, respectively. The intercompany servicecharge is eliminated at the consolidation level.Our subsidiaries provide investment consulting services and shared services to the Consolidated Affiliated Entities, the amounts of whichwere RMB184.7 million, RMB141.7 million and RMB187.0 million (US$29.3 million) for the years ended December 31, 2019, 2020 and 2021,respectively. The intercompany service charge is eliminated at the consolidation level.For the years ended December 31, 2019, 2020 and 2021, cash paid by the Consolidated Affiliated Entities to our subsidiaries for the servicesrendered were RMB 157.1 million , RMB538.5 million and RMB112.8 million (US$17.7 million), respectively.Table of Contents15A.[Reserved]B.Capitalization and IndebtednessNot applicable.C.Reasons for the Offer and Use of ProceedsNot applicable.D.Risk FactorsRisks Related to Our BusinessThe investment products that we distribute or manage involve various risks and any failure to identify or fully appreciate such risks maynegatively affect our reputation, client relationships, operations and prospects.We distribute and manage a variety of investment products, including onshore and offshore private equity and venture capital products,public securities products, and other products. These products often have complex structures and involve default risks, interest rate risks, liquidityrisks, market risks, counterparty risks, fraud risks and other risks.Our success in distributing, managing and offering our products and services depends, in part, on our ability to successfully identify and fullyappreciate the risks associated with such products and services. Not only must we be cautious about these risks in designing and developing ourproducts and services, we must also accurately describe and disclose the risks associated with our products and services to, and evaluate them for, ourclients. Our risk management policies and procedures may not be fully effective in mitigating the risk exposure for all of our clients in all marketenvironments or covering all types of risks.If we fail to identify and fully appreciate the risks associated with the products and services we distribute, manage and offer, or fail todisclose such risks to our clients, or if our clients suffer financial losses or other damages resulting from the investment products or services wedistribute, manage or offer, our reputation, client relationships, business, results of operations and prospects may be materially and adversely affected.Our reputation and brand recognition are crucial to our business. Any harm to our reputation or failure to maintain, protect, promote or enhanceour brand recognition may materially and adversely affect our business, financial condition and results of operations.Our reputation and brand recognition, which depend on earning and maintaining the trust and confidence of our clients or prospective clients,are critical to our business. Our reputation and brand recognition are vulnerable to threats that are difficult or impossible to control, and costly orimpossible to remediate. Regulatory inquiries or investigations, lawsuits initiated by clients or other third parties, employee misconduct, perceptionsof conflicts of interest and rumors, among others, could substantially damage our reputation, even if they are baseless. Moreover, any misconduct orallegations of misconduct by our product managers of third-party funds we distribute could result in negative media publicity and adversely affect ourreputation and the confidence of our clients. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.” Furthermore, any negative media coverage about the financial service industry in general or product/service quality problems inthe industry, may also negatively impact our reputation and brand recognition. If we are unable to maintain a good reputation or further enhance ourbrand recognition, our ability to attract and retain clients, product partners and key employees could be harmed and, as a result, our business andrevenues may be materially and adversely affected.Our businesses may be adversely impacted by general economic and market conditions.As a wealth management service provider, our businesses, financial condition and results of operations may be materially affected by China’sand global economic and financial market conditions, as well as economic conditions specific to our business. We serve HNW and ultra HNW clientsin China and globally through both our wealth management and asset management businesses. As a result, any economic downturns or capital marketvolatilities may negatively affect the financial performance of the productsTable of Contents16distributed or managed by us, reduce the revenue generated from our wealth management and asset management businesses, which in turn maymaterially and adversely affect our overall financial performance and results of operations.The performance of our investment portfolio may affect the AUM, revenue and profitability of our asset management business.The allocation of our investment portfolio under asset management and investment amounts varies by investment type and is based upon ourperiodic evaluation and assessment of inherent and known risks associated with the respective asset class. The revenue of our asset managementbusiness include performance-based fees, which are typically based on the amount of returns on our managed accounts which exceed a certainthreshold of return for each investor. We will not earn performance-based fees if our management’s judgment is incorrect and the investment portfoliodoes not generate cumulative performance that surpasses the relevant target thresholds or if a fund experiences losses on a cumulative basis.Less satisfactory portfolio performance, either as a result of macro-economic downturns in the market or economic conditions, including butnot limited to changes in interest rates, inflation, political uncertainty, our investment style and the particular investments that we make, may result ina decline in our revenue and income by causing (i) the NAV of the assets under our management or advisory to decrease, which would result in lowerrecurring service fees to us, (ii) lower investment returns, resulting in a reduction of performance-based income to us, and (iii) increase in investorredemptions, which would in turn lead to fewer AUM and lower recurring service fees for us. If our future investment performance is perceived toworsen, the revenue and profitability of our asset management business will likely decline and our ability to grow existing funds and raise new fundsin the future will likely be impaired.We may not be able to continue to grow at our historical rate of growth, and if we fail to manage our growth effectively, our business may bematerially and adversely affected.We commenced our business in 2005 as a consulting services provider focusing on wealth management and have gradually transitioned to acomprehensive integrated financial services group with wealth management, asset management, and other businesses. Over the last five years, wehave experienced substantial growth, with our net revenues increasing at a compound annual growth rate of 11.3% from 2016 to 2021. We cannotassure you that we will continue to grow at our historical rate of growth. It is difficult to predict whether the new investment products and services wecontinuously develop will be attractive to our clients and prospective clients. In addition, our growth has placed, and will continue to place, asignificant strain on our management, personnel, systems and resources. We may not manage our growth effectively or accurately predict our futureresults of operations. As a result, our historical growth rate may not be indicative of our future performance.Because a significant portion of the one-time commissions and recurring service fees we earn on the distribution of investment products are basedon commission and fee rates, any decrease in these commission and fee rates may have an adverse effect on our revenues, cash flow and results ofoperations.Substantially all of our recurring service fees and one-time commissions are paid by funds managed by our third-party product partners andGopher, our asset management arm, which are negotiated and vary from product to product. In 2019, 2020 and 2021, 81.4%, 82.4% and 78.1% of ourtotal revenues were derived from recurring service fees and one-time commissions, respectively. Recurring service fees and one-time commissionrates can fluctuate based on the prevailing political, economic, regulatory, taxation and competitive factors that affect the product partners andGopher. These factors, which are not within our control, include the capacity of product partners and Gopher to place new business, profits of productpartners, client demand and preference for investment products, the availability of comparable products from other product partners at a lower cost,the availability of alternative investment products to clients and the tax deductibility of commissions and fees. In addition, the historical volume ofinvestment products that we distributed or managed may have a significant impact on our bargaining power with product partners or clients in relationto the commission and fee rates for future products. Because we can neither determine, nor predict, the timing or extent of commission and fee ratechanges with respect to the investment products, it is difficult for us to assess the effect of any of these changes on our operations. Therefore, anydecrease in commission and fee rates may adversely affect our revenues, cash flow and results of operations.Table of Contents17The investment products we distribute are supplied by a limited number of product partners; and the renegotiation or termination of ourrelationships with such product partners could significantly impact our business.The investment products we distribute are supplied by a selected number of investment product partners, including private equity firms, realestate fund managers, securities investment fund managers, mutual fund management companies, and insurance companies. Although our wealthmanagement business has a broad coverage of most major fund managers and product partners in the market, due to our stringent screening processand rigorous risk management standards, a significant portion of the products distributed by us are sourced from a limited number of product partners.Our relationships with our product partners or funds managed by our product partners are governed by distribution agreements. These agreementsestablish, among other things, the scope of our responsibility and our commission rates with respect to the distribution of particular products. Theseagreements typically are entered into on a product by product basis and expire at the expiration date of the relevant investment product. For any newinvestment products, new agreements need to be negotiated and entered into. If product partners that in the aggregate account for a significant portionof our business decide not to enter into contracts with us for their investment products, or the terms of our contracts with them become less beneficialto us, our business and operating results may be materially and adversely affected.Because the laws and regulations governing the industries of wealth management, asset management and other businessses in China aredeveloping and subject to further change, any failure to obtain or maintain requisite approvals, licenses or permits necessary to conduct ouroperations or any failure to comply with laws and regulations applicable to our business and services could harm our business.The relevant regulatory authorities, including the CSRC and the AMAC, have released various laws and regulations governing the industriesof wealth management, asset management and other businesses in China, including regulations over private equity products, privately-raisedsecurities investment funds, asset management plans managed by securities companies or mutual fund management companies, trust products andinsurance products. However, these laws and regulations are subject to further changes and the PRC government has not adopted a unified regulatoryframework yet.As for our asset management business, the CSRC is in charge of the supervision and regulation of private funds, including, withoutlimitation, private equity funds, venture capital funds, privately-raised securities investment funds and other forms of private funds. The AMAC haspromulgated a series of rules and measures regulating the registration of private funds, qualified investor standards, fund raising, investment adviceservice provided by third parties, structured asset management plan and private asset management plans investing into real estate developmententerprises or projects and etc. See “Item 4. Information on the Company—B. Business Overview—Regulations in China—Regulations on PrivateFunds.” In addition, the CSRC and AMAC may adopt further detailed regulations and implementing policies that govern private funds and privatefund managers. These laws, rules and regulations could be highly complex, continuously evolving and could change or be reinterpreted to beburdensome or difficult to comply with. Since fund management business is a significant part of our asset management business, our assetmanagement business is subject to such regulations on private funds and related implementation rules thereof.As the regulators of the wealth management and asset management industries in China are enhancing their supervision over the industries,applicable laws and regulations may be adopted to address new issues that arise from time to time or to require additional licenses and permits. Forexample, on April 27, 2018, the PBOC, CBIRC, CSRC and SAFE jointly released the Guidance Opinions on Regulating the Asset ManagementBusiness of Financial Institutions (the “Guidance Opinions”), which prohibits the issuance of private credit products that contain maturity mismatcharrangements or any direct or indirect guarantee of return, and requires relevant institutions to follow detailed guidance with regards to the maximumvolume of private credit products issued and minimum liquidity thresholds. The Guidance Opinions will apply to private funds in the absence ofspecific laws and regulations thereto. On July 20, 2018, the PBOC issued the Circular on Further Clarifying Matters concerning the GuidanceOpinions on Regulating the Asset Management Business of Financial Institutions. On October 22, 2018, the CSRC issued the AdministrativeMeasures on Private Asset Management Business of Securities and Futures Institutions. Furthermore, according to the Instructions for the Filing ofPrivately-Raised Investment Funds (2019 Version) (the “Filing Instructions”) issued by the AMAC on December 23, 2019, the AMAC does notaccept the filing application of private funds engaging in regular and operational private lending activities in form of entrustment loans, trust loans orother means. In line with our understanding and anticipation of the changing regulatory and market environment given the publication of the newrules including the Guidance Opinions and the Filing Instructions, we have strategically ceased offering substantially all of our credit products fromthe third quarter of 2019, which had a negative impact on our results of operations.Table of Contents18Furthermore, on August 28, 2020, the CSRC issued the Supervision Measures on Distribution Institutions of Publicly-Raised SecuritiesInvestment Fund (the “Supervision Measures”), which came into effect in October 2020. The Supervision Measures provides that independent funddistribution institutions, like Noah Upright, shall specialize in the distribution of publicly-raised securities investment funds and privately-raisedsecurities investment funds, except as otherwise provided by the CSRC. Following the enactment of the Supervision Measures, we ceased offeringinvestment products that invest in private equity investments through Noah Upright, and collaborate with our private equity product partners solelythrough our asset management business.As we develop our business, the products we manage or distribute might be subject to detailed regulations and implementing policies to beissued by the CSRC or AMAC in the future and we cannot assure you that our asset management or wealth management business will not bematerially and adversely affected if any supervisory authority enhances its regulation over asset management plans.Furthermore, the Notice on Regulation and Renovation of the “Cash Loan” Business promulgated on December 1, 2017 (the “Circular 141”)requires microloan companies and other entities to charge synthetic fund costs, including the interest and fees paid by the borrowers, in compliancewith the rules provided by the Supreme People’s Court, and such costs shall be within the legally allowed annualized interest rate for private lending.The Circular 141 and subsequent rules and regulations also provide that no institution or third-party agency shall collect loans by actual or threatenedviolence, intimidation, insult, defamation, harassment, disseminating private information, or other ways that cause harm. In addition, the Opinions onSeveral Issues Concerning Handling Illegal Lending Criminal Cases, jointly promulgated by the Supreme People’s Court, the Supreme People’sProcuratorate, the Ministry of Public Security, and the Ministry of Justice on July 23, 2019, provides rules on supervision of and punishment forillegal lending, such as debt-collection by means of violence. Although we have decreased the scale of our lending businesses since the third quarterof 2019, we cannot assure you whether the funding party, loan collection agencies or other service providers we cooperate with charge extra fees fromthe borrower or conduct other behaviors in violation of the provisions of the relevant rules and regulations. The local authorities have broad discretionin interpreting, implementing and enforcing the applicable laws, rules, regulations and governmental policies, such as capital reserve ratio, themaximum amount of a single loan, limitation on operating territory, payment method of interest and fees, restrictions on financing and methods ofdebt collection. As a result, there are uncertainties in the interpretation, implementation and enforcement of such laws, rules, regulations andgovernmental policies, and occasionally, we may receive instructions issued by the local authorities on our microloan business model from time totime, or have to depend on verbal clarifications from local authorities. Therefore, if the local authorities make unfavorable interpretation, instructionor ruling against our microloan business model, or modify the local regulatory policies on microloan business in the future, our lending businessmight be restricted and negatively impacted.In accordance with the relevant laws and regulations in jurisdictions in which we operate, our subsidiaries and Consolidated AffiliatedEntities are required to obtain and maintain various approvals, licenses and permits necessary to operate our business from the central and/or localgovernment, including but not limited to, business license, fund distribution license, certificate for privately-raised investment fund manager, familytrust license, insurance brokerage license, and trust business license. These approvals, licenses and permits are obtained upon satisfactory compliancewith, among other things, the applicable laws and regulations, which are developing and might conflict with each other. For example, our lendingbusiness subsidiary, Noah Rongyitong (Wuhu) Microloan Co., Ltd. (“Rongyitong”), has been approved to carry out microloan business by the localgovernment of Anhui Province. The Guidance on the Pilot Establishment of Microloan Companies, jointly promulgated by the CBRC, which wasmerged into the CBIRC, and the PBOC, requires that the capital contribution from one individual, entity or other association (including the capitalfrom its affiliates) to a microloan company may not exceed 10% of such company’s total registered capital. The Anhui local rule provides, however,that the shareholding percentage of the major founding shareholder shall not exceed 20% in principle, and the shareholding percentage of anothershareholder and its affiliates shall not exceed 10%. The Anhui financial bureau has approved our shareholding structure, namely, Noah Group as afounding shareholder of Rongyitong holding 35% equity interests in it. We cannot assure you that whether we will be required to transfer a portion ofour equity interests in Rongyitong to third parties to comply with relevant rules and regulations. If that were to occur, such transfer could affect ouroverall control of Rongyitong. If we fail to obtain or maintain the required licenses, permits and approvals, we may be subject to fines, confiscation ofthe income derived from the related business, the suspension of operations and adverse publicity arising from such non-compliance with governmentregulations. In addition, there can be no assurance that we will be able to obtain, maintain and renew all of the approvals, licenses and permitsrequired for our business operations upon their expiration in a timely manner or at all, which may materially impact our business operations.Table of Contents19As of the date of this annual report, our significant subsidiaries and Consolidated Affiliated Entities had obtained all material licenses,approvals and permits necessary from competent regulatory authorities for our business operations in the jurisdictions in which we operate. We renewall such permits and licenses from time to time to comply with the relevant laws and regulations. As of the date of this annual report, we were notaware of any facts that would prevent us from renewing permits or licenses material to our group.Some of our clients may redeem their investments from time to time, which could reduce our recurring service fees.Certain of the agreements we entered into with investors in relation to investment products distributed to them permit investors to redeemtheir investments with us at quarterly or annual intervals, after an initial “lock-up” period during which redemptions are restricted or penalized. If thereturn on the assets under our management does not meet investors’ expectations, investors may elect to redeem their investments and invest theirassets elsewhere. As our recurring service fees correlate directly with the amount of our AUM, redemptions may cause our expected recurring servicefees to decrease. Similarly, the total balance of investment products offered or distributed by us to our clients could decrease due to redemptions aswell and impact our fees from investment products. Investors may decide to reallocate their capital away from us for a number of reasons, includingless satisfactory investment performance, changes in prevailing interest rates which make other investment options more attractive, changes ininvestor perception regarding our focus or alignment of interest, dissatisfaction with, changes in or a broadening of a fund’s investment strategy,changes in our reputation, and departures of, or changes in responsibilities of, key investment professionals. For these and other reasons, the pace ofinvestor redemptions and the corresponding reduction in our AUM and total balance of investment products offered or distributed by us couldaccelerate. In addition, investor sentiment in stock market may be adversely affected during periods when capital markets are volatile, especially afterour transformation to NAV-based products, which may result in decreases in the transaction value of mutual fund products and private secondaryproducts as well as increases in investor redemptions. This may also lead to a flight-to-safety and a change in product mix, causing fluctuations in ourfees from investment products. Furthermore, redemptions of the investment products that we manage could ultimately require us to liquidate fundassets under unfavorable circumstances, which may further harm our reputation and results of operations.Our lending business is subject to credit risks, which could adversely affect our results of operations.There are inherent risks associated with the lending business provided by us, including credit risk which is the risk that borrowers may notrepay the outstanding loans balances. These borrowers are primarily individuals and generally have fewer financial resources in terms of capital orborrowing capacity than larger entities and may have fewer financial resources to weather an economic downturn. Moreover, since the loans made byus are collateralized by real estate properties or investment products distributed by us, any decrease in real estate prices or downturn in the investmentperformances could adversely affect the values of these collaterals, which may in turn have a negative impact on the ability of borrowers to repaytheir loans and further adversely affect our operating results and financial condition. Factors, such as inflation, employment levels, local policychanges and other factors beyond our control may increase our credit risks, which may result in material adverse effects on our business and financialconditions.Our business involves relatively new business models which may not be successful.Our business comprises various business lines, some of which are relatively new, such as our mutual fund product offerings. Although weintend to devote additional resources to expanding these businesses and develop and offer more innovative products and services to our clients, wehave limited experience with these businesses and cannot assure you of their future success. If we fail to address the needs of our clients, adapt torapidly-evolving market trends or continue to offer innovative products and services, we may fail to capture market demand. In addition, our newbusiness lines will continue to encounter risks and difficulties that early-stage businesses frequently experience, including the potential failure toexpand client base in a cost-efficient manner, adequately manage risks and expenses, implement, adapt and modify our client development strategiesas needed, develop and maintain our competitive advantages and anticipate and adapt to changing economic, competitive and other market conditionsin China’s financing industry. If we are unable to successfully develop our new business lines into profitable businesses, our business and revenuesmay be materially and adversely affected.Table of Contents20We face significant competition in our businesses. If we are unable to compete effectively with our existing and potential competitors, we couldlose our market share and our results of operations and financial condition may be materially and adversely affected.The wealth management and asset management industries in China are all undergoing rapid changes and growth. We operate in a competitiveenvironment and compete for clients on the basis of product offering and performance, client services, reputation and brand names. Our ability tocompete in this environment is also affected by license requirements for the distribution of investment products, the provision of asset managementand certain other services imposed on businesses operating in such industries. Our future success in each of these areas will depend in part on ourability to continue to maintain the relevant licenses and anticipate and meet market needs on a timely and cost-effective basis.In our wealth management business, we face competition primarily from other independent wealth management companies as well ascommercial banks and their wealth management subsidiaries, private banks and securities firms. In our asset management business, we also facecompetition from other asset management service providers in the market, including managers of private equity funds, real estate funds and publicsecurities funds. In addition, our other businesses segment faces competition from a range of financial service providers which offer similar servicesin China. As part of China’s reform and opening policy, the Chinese government has further liberalized the financial sector in recent years, includinglifting certain restrictions on the business scope of financial institutions such as foreign banks, securities companies and fund management companies,reducing quantitative entry conditions for foreign investors to invest in banking and insurance institutions and carry out these businesses, relaxing thelimits on foreign ownership of joint ventures in China’s financial sectors such as banking, securities investment fund management companies,securities and insurance companies. If such liberalization continues, we may face additional competition in the industries in which we operate and ourmarket share might be threatened or taken by foreign competitors or their joint ventures operating in the Chinese financial market.Many of our competitors have greater financial and marketing resources or larger customer base. For example, the PRC commercial bankswe compete with tend to enjoy significant competitive advantages due to their nationwide distribution networks, longer operating histories, largercustomer bases and settlement capabilities. Moreover, many product partners with whom we currently have relationships, such as private equityinvestment firms, are also engaged in, or may in the future engage in, the distribution of third-party investment products and may benefit from theintegration of investment products with their other product offerings.Our failure to respond to rapid product innovation in the financial industry in a timely and cost-effective manner may have an adverse effect onour business and operating results.The financial industry is increasingly influenced by frequent new product and service introductions and evolving industry standards. Webelieve that our future success will depend on our ability to continue to anticipate product and service innovations and to offer additional products andservices that meet evolving standards on a timely and cost-effective basis. There is a risk that we may not successfully identify new product andservice opportunities or develop and introduce these opportunities in a timely and cost-effective manner. In addition, products and services that ourcompetitors develop or introduce may render our products and services less competitive. As a result, our failure to respond to product and serviceinnovation that may affect our industry in the future may have a material adverse effect on our business and results of operations.If we fail to maintain an effective system of internal controls over financial reporting, we may be unable to accurately report our results ofoperations or prevent fraud, and investor confidence and the market price of our ADSs may be materially and adversely affected.As a public company in the United States, we are subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of2002, or Section 404, requires that we include a report from management on the effectiveness of its internal control over financial reporting in ourannual report on Form 20-F. In addition, our independent registered public accounting firm must attest to and report on the effectiveness of ourinternal control over financial reporting.Our management has concluded that our internal control over financial reporting is effective as of December 31, 2021. Our independentregistered public accounting firm has issued an attestation report on our management’s assessment of our internal control over financial report and hasconcluded that our internal control over financial reporting is effective in all material aspects.Table of Contents21However, if we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplementedor amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting inaccordance with Section 404. If we fail to maintain an effective internal control system, our financial statements could contain material misstatementsand we could fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. Thiscould in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our ADSs.Adverse changes in China’s or global economic and political policies could materially and adversely affect our business, financial condition andresults of operations.Any prolonged slowdown in the global or Chinese economy may have a negative impact on our business, results of operations and financialcondition, and continued turbulence in the international markets may adversely affect our ability to access the capital markets to meet potentialliquidity needs.Economic conditions in China are sensitive to global economic conditions, as well as changes in domestic economic and political policiesand the expected or perceived overall economic growth rate in China. Since we derive the majority of our revenues from our operations in China, ourbusiness and prospects may be affected by economic, political and legal developments or changes in the financial markets in China. Our revenuesultimately depend on the appetite of our clients to invest in the investment products we distribute or manage, which in turn depend on their level ofdisposable income, perceived future earnings and willingness to invest. As there are still substantial uncertainties in the current and future conditionsin the global and China’s economies, our clients may reduce or delay their investment in the financial markets in general, and defer or forgo thepurchase of products we distribute or manage. We may have difficulty expanding our client base fast enough, or at all, to offset the impact ofdecreased investment by our existing clients. Additionally, our business and prospects are directly affected by the inherent risks associated with thecapital markets in China, such as market volatility, overall investment sentiments, fluctuations in capital raising and trading volumes and thecreditworthiness of the securities industry. Securities market volatility could discourage investor confidence and reduce securities trading andcorporate finance activities, which, in turn, may negatively affect the commission income, recurring service fees and performance-based income weearn from our wealth management and asset management businesses due to reduced value of our wealth management and asset management portfolioand increased client redemptions. Moreover, insolvencies associated with an economic downturn could adversely affect our business through the lossof investment product providers or clients or by hampering our ability to place business. Any prolonged slowdown in the global or China’s economymay lead to reduced investment in the products we distribute or manage, which could materially and adversely affect our financial condition andresults of operations. Specifically, owners of small to medium enterprises and our other entrepreneur clients who face pressures in business operationsand cash flow because of the COVID-19 outbreak might reduce their transaction volumes with us.In addition, our results of operations may also be affected by geopolitical events and other developments beyond our control, which may inturn adversely affect the economic and market conditions in China and globally. There have been concerns over unrest, terrorist threats and thepotential for war in the Middle East, Europe and elsewhere, as well as over the conflicts involving Ukraine, Syria and North Korea. For example, themilitary conflict between Russia and Ukraine has resulted in an escalated regional instability, amplified the existing geopolitical tension among Russiaand other countries in the region and in the west, as well as adversely affected commodity and other financial markets or economic conditions. TheUnited States, European Union, the United Kingdom, Switzerland and other countries have imposed, and may further impose, financial and economicsanctions and export controls targeting certain Russian entities and/or individuals, which could adversely affect the global economy and financialmarkets, even though we do not have any direct exposure to Russia or the adjoining geographic regions. The duration of such military conflict and therelated sanctions, as well as their impact on the global financial markets, cannot be predicted. There have also been concerns on the relationshipbetween China and other countries, including the surrounding Asian countries, which may potentially have economic effects. In particular, there issignificant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, governmentregulations and tariffs. Furthermore, there is considerable uncertainty over the long-term effects of the monetary and fiscal policies adopted by centralbanks and financial authorities in some of the world’s leading economies, including the United States and China.Table of Contents22Moreover, a slowdown in the global or Chinese economy or the recurrence of any financial disruptions may have a material and adverseimpact on financings available to us. The weakness in the economy could erode investors’ confidence, which constitutes the basis of the equitymarkets. Any financial turmoil affecting the financial markets and banking system may significantly restrict our ability to obtain financing in thecapital markets or from financial institutions on commercially reasonable terms, or at all. Although we are uncertain about the extent to which anyglobal financial and economic crisis and slowdown of the China’s economy may impact our business, there is a risk that our business, results ofoperations and prospects may be materially and adversely affected by any global economic downturn and the slowdown of the China’s economy.Our business is subject to the risks associated with international operations.International expansion is an important component of our growth strategy, with revenues from countries and regions outside of mainlandChina representing 23.4% of our total revenues in 2021. Expanding our business overseas exposes us to a number of risks, including but not limitedto:●our ability to select the appropriate geographical regions for international expansion;●difficulty in understanding local markets and culture and complying with unfamiliar laws and regulations;●unexpected legal or regulatory changes in local markets;●fluctuations in currency exchange rates;●difficulty in identifying appropriate partners and establishing and maintaining good cooperative relationships with them;●difficulty in recruiting and retaining qualified personnel;●potentially adverse tax consequences; and●increased costs associated with doing business in foreign jurisdictions.We may face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations.Our business may be materially and adversely affected by the effects of natural disasters, health epidemics or other public safety concerns.For example, the outbreak of a novel strain of coronavirus (COVID-19), first reported in December 2019, has spread rapidly throughout the world. OnMarch 11, 2020, the World Health Organization declared the outbreak a “global pandemic”. Many businesses and social activities in mainland Chinaand other countries and regions have been seriously disrupted, including those of us, our suppliers, partners, clients and employees. The globaloutbreak has also caused market panic, which materially and negatively affected the global financial markets. In particular, we and our clients haveexperienced and may continue to experience limitations to face-to-face meetings due to quarantine measures and travel bans adopted by governmentsto contain the spread of this outbreak. In 2020, we have experienced decrease in total revenues generated from our overseas businesses and domesticvalue-added services as a result of the COVID-19 pandemic. In 2021, our business operation had substantially returned to normal levels. Recently,there has been an increasing number of COVID-19 cases, including the COVID-19 Delta and Omicron variant cases, in multiple cities in China. As aresult, various measures, including travel restrictions and stay-at-home orders, have been reinstated and we may have to adjust various aspects of ouroperations. In addition, the highly-contagious Delta and Omicron variants of COVID-19 have caused authorities in various countries to reimposerestrictions such as mask mandates, curfews and prohibitions on large gatherings. There remain significant uncertainties surrounding COVID-19,including the existing and new variants of COVID-19, and its further development as a global pandemic, including the effectiveness of vaccineprograms against existing and any new variants of COVID-19. The extent to which the COVID-19 outbreak may continue to adversely affect themacro-economic environment as well as our business, results of operations and financial condition remains uncertain, and will depend on futuredevelopments, including the duration, severity and reach of the COVID-19 outbreak, and actions taken to contain the outbreak or treat its impacts.Table of Contents23Our headquarters is located in Shanghai, where most of our management and employees currently reside. Our relationship managers arebased in 84 cities in China, and various offices overseas. Consequently, if any natural disasters, health epidemics or other public safety concerns wereto affect Shanghai and other locations where our offices reside in, our operation may experience material disruptions, which may materially andadversely affect our business, financial condition and results of operations. We are also vulnerable to natural disasters and other calamities. Fire,floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or similar events may give rise to serveror service interruptions, breakdowns, system failures, technology platform failures or internet failures, which could cause the loss or corruption ofdata or malfunctions of software or hardware, as well as adversely affect our ability to provide products and services. Our business operation couldalso be disrupted if any of our employees are suspected of having contracted any contagious disease or condition, since it could require our employeesto be quarantined or our offices to be closed down and disinfected. All of these may have a material adverse effect on our results of operations andfinancial condition in the near terms. Additionally, if the outbreak persists or escalates, we may be subject to further negative impact on our businessoperations or financial condition.In addition, our business, results of operations, financial conditions and prospects could also be adversely affected to the extent that anynatural disasters, health epidemics and other outbreaks harms the Chinese and global economies in general.Certain of the investment products we distribute or manage have real estate or real estate-related businesses as underlying assets. These productsare subject to the risks inherent in the construction, development, ownership and operation of real estate, as well as risks associated withregulatory and policy changes affecting the real estate industry in China.Certain investment products that we distribute or manage have real estate or real estate-related business in China as their underlying assets.In 2019, 2020 and 2021, the total value of investment products that we distributed with real estate or real estate-related businesses as the underlyingassets accounted for 21.0%, 0.8% and 0.9% of the total value of all the products we distributed, respectively. Real estate investments as a percentageof our total AUM were 10.3%, 8.3% and 4.3% in 2019, 2020 and 2021. Our real estate investments primarily include two properties in Shanghai andtwo properties in the United States.Although we are not exposed to risks related to high yield bonds issued by Chinese residential real estate developers, such products are stillsubject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets. These risks include thoseassociated with the burdens of ownership of real property, general and local economic conditions, changes in supply of and demand for competingproperties in an area, natural disasters, changes in government regulations, changes in real property tax rates, changes in interest rates, the reducedavailability of mortgage funds, which may render the sale or refinancing of properties difficult or impracticable, and other factors that are beyond ourcontrol.In particular, the real estate industry in China is subject to extensive governmental regulation and policy changes. The PRC governmentexerts considerable direct and indirect influence on the development of the real estate sector by imposing various industry policies and other economicmeasures. Specifically, in the past few years, PRC governments at both national and local levels have adopted numerous policies to slow down thesurge of real estate prices and to curb speculative buying through more stringent implementation of residential price control measures, some of whichwere subsequently cancelled when the market turned softer. Such measures may adversely impact the real estate market, dissuade potential purchasersfrom making purchases, reduce transaction volume, cause a decline in selling prices, and prevent developers from raising capitals they need andincrease developers’ costs to start new projects. In addition, we cannot assure you that the PRC government will not adopt new measures in the futurethat may result in lower growth rates in the real estate industry. Frequent changes in government policies may also create uncertainty that coulddiscourage investment in the real estate sector.Table of Contents24If we breach fiduciary duties or other contractual obligations as the general partner or fund managers of the funds, our results of operations willbe adversely impacted.Neither the principal nor the return of the products we distribute or manage is guaranteed by us. As such, we do not bear any liabilities forany loss to the capital of the products, provided that (i) the distribution and management of the concerned products are conducted in the ordinarycourse of business; (ii) we have no fraud or gross negligence during the course of distribution and management, and have no intentional misconductwhich will harm the interests of either the fund or the limited partners, and (iii) we have not conducted any other acts which are deemed to breach thefiduciary duty. Because we serve as the general partner or manager for the funds under our asset management business, we have fiduciary duty to thelimited partners or the investors. If we are deemed to breach the fiduciary duty, such as failure to establish or implement appropriate controls whenhandling and processing our clients’ cash investments, we may be exposed to risks and losses. We could also experience losses on our principal in afund in the form of limited liability partnership for which we act as the general partner, as the general partner typically bears unlimited liabilities forthe debts of a limited liability partnership. Furthermore, as PRC laws and regulations are silent on the legal segregation of losses or liabilities incurredby contract-based private funds and assets of the fund manager, we cannot assure you that whether our assets will be subject to third-party claimsarising from losses or liabilities incurred by contract-based private funds that we manage. If the assets managed by us are subject to such claims, ourfuture growth may be materially and adversely affected.Misconduct of our relationship managers or other employees, including potential misuse of client funds, could harm our reputation or lead toregulatory sanctions or litigation costs.Misconduct of our relationship managers or other employees could result in violations of law, regulatory sanctions, litigation or seriousreputational or financial harm, among other consequences. Misconduct may include but not limited to:●engaging in misrepresentation, negligence or fraudulent activities when distributing investment products or providing asset managementor other services to clients;●improperly using or disclosing confidential information of our clients, product partners or other parties;●concealing unauthorized or unsuccessful activities, resulting in unknown and unmanaged risks or losses;●accessing and misusing client funds, especially those maintained in segregated accounts for our contract-based private funds; or●other conducts not complying with laws and regulations or our internal policies or procedures.Our internal control system which supervises service quality and regulatory compliance may not always deter misconduct of our relationshipmanagers or other employees, and the precautions we take to prevent and detect misconduct may not be effective in all cases. Any of theabovementioned misconduct could impair our ability to attract, serve and retain clients and may lead to significant legal liability, reputational harmand material adverse effects on our business, results of operations or financial condition.Table of Contents25Our business is subject to risks related to complaints, claims, controversies, regulatory actions, arbitration and legal proceedings.We are subject to lawsuits, regulatory actions and other claims in the ordinary course of our business from time to time. In particular, we mayface lawsuits, arbitrations or other claims brought by our clients who purchase investment products or services we distribute, offer or provide whichturn out to be unsuitable for any reason, such as misconduct by the managers of the third-party funds, or providers of the products that we haverecommended or made available to our clients, or illegal, non-compliance or unsatisfactory actions taken by third parties such as suppliers, serviceproviders and other business partners that are outside of our control, or change of legal requirements or regulatory environment. For example, certaincredit funds managed by Shanghai Gopher had invested in supply chain account receivables with respect to the sale of computer, consumerelectronics and communication products by affiliates of Camsing International Holding Limited as underlying investable assets. Certain companiesand individuals in connection with such supply chain account receivables were later suspected to commit fraudulent activities. Shanghai Gopher hasreceived notices from court and arbitration tribunal concerning claims initiated by individual clients as the fund manager. See “Item 8. FinancialInformation—A. Consolidated Statements and Other Financial Information—Legal Proceedings” for more information. We may also encounterclaims alleging misrepresentation by our relationship managers or other employees. Moreover, we may not be able to comply with any new regulatoryrequirement in a timely manner or at all, and we may also be subject to regulatory actions and may encounter additional lawsuits, arbitrations or otherclaims from our investors. These risks may be heightened during periods when credit, equity or other financial markets are deteriorating in value orare volatile, or when clients or investors are experiencing losses.Claims or actions brought against us may result in settlements, awards, injunctions, fines, claims and penalties or other results adverse to us,including harm to our reputation. In the event that we become subject to claims caused by actions taken or unsatisfactory performance by oursuppliers, service providers or other business partners, we may attempt to seek compensation from the relevant suppliers, service providers or otherbusiness partners. However, such compensation may be limited. If no claim can be asserted against a supplier, service provider or business partner, oramounts that we claim cannot be fully recovered from the supplier, service provider or business partner, we may be required to bear such losses andcompensation at our own costs. Even if we are successful in defending against these actions, we may incur significant expenses. Predicting theoutcome of such matters is inherently difficult, particularly where claimants seek substantial or unspecified damages, or when legal or otherproceedings are at an early stage. A substantial judgment, award, settlement, fine, or penalty may be materially adverse to our results of operationsand financial condition.Any failure to ensure cyber security or protection of our clients’ personal data or privacy could lead to legal liabilities, adversely affect ourreputation and have a material adverse effect on our business, financial condition or results of operations.Our services involve the exchange of information, including personal and financial information related to our clients in a variety of electronicand non-electronic means.We face risks inherent in handling large volumes of data and protecting such data, particularly concerning transactions and other activitiesthat take place on our platform, including but not limited to:●protecting the data on our system, including against attacks on our system by outside parties or fraudulent behaviors by our employees;●addressing concerns related to privacy and data-sharing, safety, security and other factors; and●complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information,including any requests from regulatory and government authorities relating to such data.There have been many media reports about different financial services companies, consumer-based companies, governmental agencies andother organizations involving unauthorized disclosure of confidential information related to their clients or users in recent years, as well as cyber-attacks involving the dissemination, theft and destruction of corporate information or other assets, which resulted in third-party claims or actionsagainst these companies. There have also been incidents where hackers have requested “ransom” payments in exchange for not disclosing clientinformation or for restoring access to information or systems.Table of Contents26We are occasionally the target of attempted cyber-attacks, including denial-of-service attacks, and we continuously monitor and develop oursystems to protect our technology infrastructure and data from misappropriation or corruption. We may face an increasing number of attempted cyber-attacks as we expand our mobile- and other Internet-based products and services, as well as our usage of mobile technologies and as we provide moreof these services to a greater number of individual clients. In addition, in collaboration with third-party vendors and their respective service providers,agents, exchanges, clearing houses and other financial institutions, we could be adversely impacted if any of them is subject to a successful cyber-attack or other information security event. These effects could include the loss of access to information or services from the third party subject to thecyber-attack or other security breach, which could, in turn, interrupt certain of our businesses.Our efforts in enhancing the security of our systems and information may not be successful in anticipating, detecting or implementingeffective preventive measures against all cyber threats, especially because the techniques used are increasingly sophisticated, change frequently andare often not recognized until attacks are launched. Cyber-attacks can originate from a variety of sources. Any system failure or security breach orlapse that results in the leakage of user data could harm our reputation and brand and, consequently, our business, in addition to exposing us topotential legal liability. We rely on a complex network of process and software controls to protect the confidentiality of data provided to us or storedon our systems. If we do not maintain adequate internal controls or fail to implement new or improved controls as necessary, we may experience datamisappropriation or breach of confidentiality. We could be subject to liability if we inappropriately disclose any client’s personal information, or ifthird parties are able to penetrate our network security or otherwise gain access to any client’s name, address, portfolio holdings, or other personalinformation stored by us. Any such event could subject us to claims for identity theft or other similar fraud claims or claims for other misuses ofpersonal information, such as unauthorized marketing or unauthorized access to personal information. In addition, such events would cause our clientsto lose their trust and confidence in us, which may result in a material adverse effect on our business, results of operations and financial condition.In addition, as we provide investment product distribution services for product partners, we may have to share certain personal informationof our investors with contracted product partners, such as names, addresses, phone numbers and transaction accounts. We have limited control orinfluence over the security policies or measures adopted by such product partners. Any compromise or failure of the information security measures ofthese product partners could also have a material and adverse effect on our reputation, business, prospects, financial condition and results ofoperations.The proper functioning of our technology platforms is essential to our business. Any significant failure in our information technology systemscould have a material adverse effect on our business and profitability.Our business is highly dependent on the ability of our information technology systems to timely process a large amount of informationrelating to the investment products and services we provide to our clients. The proper functioning of our financial control, accounting, productdatabase, client database, client service and other data processing systems, together with the communication systems between our various servicecenters and our headquarters in Shanghai, is critical to our business and to our ability to compete effectively. In particular, we rely on our onlineservice platforms, including our website www.noah-fund.com and our mobile applications, such as WeNoah, Fund Smile and iNoah, to provide ourclients with updated information about the products they purchased. Maintaining and improving our technology infrastructure requires a significantlevel of investment. Any failure to maintain satisfactory performance, reliability, security and availability of our network infrastructure could result inthe unavailability or slowdown of our website or reduced order fulfillment performance and cause significant harm to our reputation and our ability toattract and maintain users. Server interruptions, breakdowns or system failures in the cities where we maintain our servers and system hardware,including failures that may be attributable to sustained power shutdowns, or other events within or outside our control, could reduce the volume ofproducts sold and the attractiveness of product offerings on our platform. We maintain our backup system hardware and operate our back-endinfrastructure, but such backup may not be effective in addressing any of the foregoing problems. Our network systems are also vulnerable to damagefrom computer viruses, fire, flood, earthquake, power loss, telecommunications failures, computer hacking and similar events. Although we have notexperienced any major system failures, any such future occurrences could reduce client satisfaction, damage our reputation and may materially andadversely affect our financial condition, results of operations and business prospects.Table of Contents27We may not be able to prevent unauthorized use of our intellectual property, which could reduce demands for our products and services, adverselyaffect our revenues and harm our competitive position.We rely primarily on a combination of copyrights, trade secret, trademarks, competition laws and contractual arrangements to protect ourintellectual property rights. We cannot assure you that the steps we have taken or will take in the future to protect our intellectual property rights willbe sufficient. The implementation, enforcement and scope of protection of intellectual property-related laws in China is evolving and uncertain.Current or potential competitors may use our intellectual property without authorization to develop products and services that are substantiallyequivalent or superior to ours, which could reduce demands for our solutions and services, adversely affect our operational results and harm ourcompetitive position. Even if we are able to discover evidence of infringement or misappropriation, our recourse against such competitors may belimited or we may have to pursue litigation, which could involve substantial costs and diversion of our management’s attention from the operation ofour business.We may face intellectual property infringement claims against us, which could be time-consuming and costly to defend and may result in the lossof significant rights by us.Intellectual property litigation is expensive and time-consuming and could divert resources and management attention from the operation ofour business even if the claim is without merit. Although we have not been subject to any litigation, pending or threatened, alleging infringement ofthird parties’ intellectual property rights, we cannot assure you that such infringement claims will not be asserted against us in the future. If there is asuccessful claim of infringement, we may be required to alter our services, cease certain activities, pay substantial royalties and damages to, andobtain one or more licenses from, third parties. We may not be able to obtain those licenses on commercially acceptable terms, or at all. Any of thoseconsequences could reduce our revenues, impair our client relationships and harm our reputation.Confidentiality agreements with employees, product partners and others may not adequately prevent disclosure of our trade secrets and otherproprietary information.We require our employees, product partners and others to enter into confidentiality agreements in order to protect our trade secrets, otherproprietary information and, most importantly, our client information. These agreements might not effectively prevent disclosure of our trade secrets,know-how or other proprietary information and might not provide an adequate remedy in the event of unauthorized disclosure of such confidentialinformation. In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any tradesecret rights against such parties. We may be subject to costly and time-consuming litigations to protect or defend ourselves in these incidents, whichmay materially and adversely affect our business and financial condition.Our future success depends to a certain extent on our continuing efforts to retain our existing management team and other key employees as wellas to attract, integrate and retain highly skilled and qualified personnel, and our business may be disrupted if our efforts are unsuccessful.Our future success depends to a certain extent on the continued services of our current executive officers and senior management team. Wealso rely on the skills, experience and efforts of other key employees, including management, marketing, support, research and development, technicaland services personnel. Qualified employees are in high demand across the financial service industries in China, and our future success depends onour ability to attract, train, motivate and retain highly skilled employees and the ability of our executive officers and other members of our seniormanagement to work effectively as a team.If one or more of our executive officers or other key employees are unable or unwilling to continue in their present positions, we may not beable to find replacements easily, which may disrupt our business operations. We do not have key personnel insurance in place. If any of our executiveofficers or other key employees joins a competitor or forms a competing company, we may lose clients, know-how, key professionals and staffmembers. Each of our executive officers has entered into an employment agreement with us, which contains confidentiality and non-competitionprovisions. However, if any dispute arises between our executive officers and us, we cannot assure you of the extent to which any of these agreementscould be enforced in China.Table of Contents28If we fail to attract and retain qualified relationship managers, our business could suffer.We rely on our relationship managers to develop and maintain relationships with our clients for our wealth management business. Ourrelationship managers serve as our day-to-day contacts with our clients and carry out a substantial portion of the client services we deliver. Theirprofessional competence and approachability are essential to establishing and maintaining our brand image. We rely on our relationship managers todistribute investment products, from which we derive substantially all of our revenues. As we further grow our business and expand into new citiesand regions, we have an increasing demand for high quality relationship managers. We have been actively recruiting and will continue to recruitqualified relationship managers to join our coverage network. However, there is no assurance that we can recruit and retain sufficient high qualityrelationship managers to support our further growth. In some of the regions where we have recently established or plan to establish service centers,the talent pool from which we can recruit relationship managers is smaller than in national economic centers such as Shanghai and Beijing. Even if wecould recruit sufficient relationship managers, we may have to incur disproportional training and administrative expenses in order to prepare our localrecruits for their job. If we are unable to attract, train and retain highly productive relationship managers, our business could be materially andadversely affected. Competition for relationship managers may also force us to increase the compensation of our relationship managers, which wouldincrease operating cost and reduce our profitability.We may be subject to domestic and overseas anti-corruption, anti-money laundering, counter-terrorist financing and sanctions related laws andregulations and any failure by us to comply with such laws and regulations could damage our reputation, expose us to significant penalties, anddecrease our income and profitability.We are subject to anti-corruption, anti-money laundering, counter-terrorist financing and sanctions related laws and regulations in the PRCand other jurisdictions where we operate. These laws and regulations require wealth management providers to establish sound internal control policiesand procedures with respect to the relevant monitoring and reporting activities. Such policies and procedures require us to, among other things,establish a customer identification system in accordance with relevant rules, record the details of customer activities and report suspicious transactionsto relevant authorities.While we have adopted policies and procedures aimed at detecting and preventing the use of our services to facilitate money launderingactivities, terrorist acts or business of sanctioned persons, such policies and procedures may not completely eliminate instances in which we may beused by other parties to engage in money laundering and other illegal or improper activities without our knowledge. In addition, there is no assurancethat our employees will always abide by our anti-corruption and integrity policies. In the event that we fail to fully comply with applicable laws andregulations, the relevant government agencies may impose fines or other penalties against us, and our reputation, financial condition and results ofoperations may be negatively affected.We have limited insurance coverage.Insurance companies in mainland China currently do not offer as extensive an array of insurance products as insurance companies in moredeveloped economies. For example, while we are able to obtain professional indemnity insurance in Hong Kong for our operations located there, suchinsurance offerings are rare in mainland China. Other than casualty insurance on some of our assets, and directors, supervisors and senior executives’liability insurance, we do not have commercial insurance coverage on our other assets and we do not have insurance to cover our business orinterruption of our business, litigation or product liability. We have determined that the costs of insuring for these risks and the difficulties associatedwith acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. Any uninsured occurrence of lossor damage to property, litigation or business disruption may result in our incurring substantial costs and the diversion of resources, which could havean adverse effect on our results of operations and financial condition.A downgrade in our credit rating could restrict our access to, and negatively impact the terms of, current or future financings.Standard & Poor’s Global Ratings (“S&P”) has given us an investment grade long-term credit rating. We cannot provide assurance that ourcurrent rating will remain in effect for any given period of time or will not be lowered or withdrawn entirely by S&P if, in its judgment, circumstancesso warrant. Any decision by S&P to downgrade our rating in the future, or any rating by other rating agencies below our current S&P rating,particularly below investment grade, could restrict our access to, and negatively impact the terms and conditions of future financings. Specifically, ifour rating is downgraded and we decide to conduct more financings, such as obtaining bank loans, our borrowing costs would increase. In addition,we may not be able to obtain favorable credit terms or lenders may require us to provide collateral, letters of credit, or other forms of security, whichwould increase our operating costs.Table of Contents29We have granted, and may continue to grant, share options and other forms of share-based incentive plans, which may result in increased share-based compensation expenses.We have adopted the Share Incentive Plans for the purposes of attracting and retaining the best available personnel by linking the personalinterests of our employees to our success and by providing such individuals with an incentive for outstanding performance to generate superior returnsfor the Shareholders. As of December 31, 2021, there were 361,853 options to purchase Class A ordinary shares outstanding, and 138,834 restrictedshares had been issued and were outstanding under the 2017 Share Incentive Plan. In 2019, 2020 and 2021, we recorded share-based compensationexpenses of RMB94.9 million, RMB59.8 million and RMB51.0 million, respectively.We believe the granting of share-based compensation is of significant importance to our ability to attract and retain key personnel andemployees, and we will continue to grant share-based compensation to employees in the future. As a result, our expenses associated with share-basedcompensation may increase, which may have an adverse effect on our results of operations.Risks Related to Corporate StructureWe are a Cayman Islands holding company primarily operating in China through our subsidiaries and Consolidated Affiliated Entities, includingNoah Investment with which we have maintained Contractual Arrangements and its subsidiaries in the PRC. Investors thus are not purchasing,and may never directly hold, equity interests in the Consolidated Affiliated Entities. There are substantial uncertainties regarding theinterpretation and application of current and future PRC laws, regulations, and rules relating to such agreements that establish the ContractualArrangements for a portion of our China operations, including potential future actions by the PRC government, which could affect theenforceability of the Contractual Arrangements with Noah Investment and its subsidiaries and, consequently, significantly affect the financialcondition and results of operations of our company. If the PRC government finds that such agreements do not comply with PRC laws, regulations,and rules, or if these laws, regulations, and rules or the interpretation thereof change in the future, we could be subject to severe penalties or beforced to relinquish our interests in Noah Investment and its subsidiaries or forfeit its rights under the Contractual Arrangements.The PRC government regulates certain businesses through strict business licensing requirements and laws and regulations includingrestrictions on foreign investment. For instance, foreign investors are not allowed to own more than 50% equity interests in any PRC companyengaging in value-added telecommunications services (“VATS”) with certain exceptions relating to online retail and mobile commerce; in addition,the primary foreign investor must also have experience and a good track record in providing VATS overseas. In our domestic asset managementbusiness, we act as the general partner of relevant funds which invest into other equity investment funds or investee companies. In order to complywith the PRC regulatory restrictions on foreign investment in certain industries, such as VATS, the underlying fund manager, fund or company willusually require that investors shall not be foreign-invested enterprises or the foreign capital percentage shall be limited to a specified ceiling.Because we are an exempted company incorporated in the Cayman Islands, we are classified as a foreign enterprise under PRC laws andregulations, and our wholly-owned PRC subsidiaries are foreign-invested enterprises (“FIEs”), or the subsidiaries of the FIEs. To comply with PRClaws and regulations, we rely on the Contractual Arrangements with Noah Investment and its subsidiaries to operate a portion of our operations inChina, primarily the asset management business. The Contractual Arrangements with Noah Investment and its shareholders enable us to (1) havepower to direct the activities that most significantly affect the economic performance of Noah Investment and its subsidiaries; (2) receive substantiallyall of the economic benefits from Noah Investment and its subsidiaries in consideration for the services provided by Noah Group; and (3) have anexclusive option to purchase all or part of the equity interests in Noah Investment when and to the extent permitted by PRC law, or request anyexisting shareholder of Noah Investment to transfer any or part of the equity interests in Noah Investment to another PRC person or entity designatedby us at any time at our discretion. Because of the Contractual Arrangements, we are the primary beneficiary of Noah Investment and its subsidiariesand hence treat them as our Consolidated Affiliated Entities and consolidate their results of operations into ours. In addition, we hold the requiredlicenses and permits necessary to conduct our asset management business in China through our Consolidated Affiliated Entities. Investors of ourADSs are not purchasing equity interest in our Consolidated Affiliated Entities in China but instead are purchasing equity interest in a CaymanIslands holding company with no direct equity ownership of our Consolidated Affiliated Entities. For further details on the Contractual Arrangements,see “Item 4. Information on the Company—C. Organizational Structure—Contractual Arrangements.”Table of Contents30One of the shareholders of Noah Investment ceased to be a PRC citizen in 2018. According to the provisions of the Regulations on Mergersand Acquisitions of Domestic Enterprises by Foreign Investors (Revised in 2009) issued by the MOFCOM on June 22, 2009, the change ofnationality of a shareholder of a domestic company who is a natural person will not cause our company to cease to be deemed a domestic company.However, if the funds for which we have been acting, or will act as the general partner or fund manager invest into other equity investment funds orinvestee companies in China, it is possible that these funds or investee companies may be recognized by PRC governmental authorities as havingforeign ultimate beneficiaries. This may result in violation of foreign investment restrictions by these funds or investee companies or limit ourpotential investment opportunities due to restrictions on foreign investments in certain industries in China, thus adversely affect our domestic assetmanagement business.We believe that our corporate structure and the Contractual Arrangements do not result in a violation of the current applicable PRC laws andregulations. Our PRC legal counsel, Zhong Lun Law Firm, based on its understanding of PRC laws and regulations currently in effect, is of theopinion that each of the contracts under the Contractual Arrangements among our wholly-owned PRC subsidiary, Noah Group, Noah Investment, andits shareholders, is valid, legal and binding in accordance with its terms. However, we have been further advised by our PRC legal counsel that asthere are substantial uncertainties regarding the interpretation and application of PRC laws and regulations and relevant regulatory measuresconcerning the foreign investment restrictions and administrative licenses and permits related to various underlying industries, there can be noassurance that the PRC government authorities or courts, or other authorities that regulate the industries that our funds are directly or indirectlyinvesting into, would agree that our corporate structure or any of the contracts under the Contractual Arrangements comply with PRC licensing,registration or other regulatory requirements, with existing policies or with requirements or policies that may be adopted in the future. PRC laws andregulations governing the legality, validity and enforceability of the Contractual Arrangements are uncertain and the relevant government authoritieshave broad discretion in interpreting these laws and regulations.If our corporate structure and the Contractual Arrangements are deemed by relevant regulatory authorities to be illegal, either in whole or inpart, we may lose control of our Consolidated Affiliated Entities and have to modify such structure to comply with regulatory requirements. However,there can be no assurance that we can achieve this without material disruption to our business. Further, if our corporate structure and the ContractualArrangements are found to be in violation of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broaddiscretion in dealing with such violations, including:●revoking our business and operating licenses;●levying fines on us;●confiscating any of our income that they deem to be obtained through illegal operations;●shutting down our services;●discontinuing or restricting our operations in China;●imposing conditions or requirements with which we may not be able to comply;●requiring us to change our corporate structure and the Contractual Arrangements;●restricting or prohibiting our use of the proceeds from overseas offering to finance our Consolidated Affiliated Entities’ business andoperations; and●taking other regulatory or enforcement actions that could be harmful to our business.Furthermore, new PRC laws, rules and regulations may be introduced to impose additional requirements that may be applicable to ourcorporate structure and the Contractual Arrangements. Occurrence of any of these events could materially and adversely affect our business, financialcondition and results of operations. In addition, if the imposition of any of these penalties or requirement to restructure our corporate structure causesus to lose the rights to direct the activities of our Consolidated Affiliated Entities or our right to receive its economic benefits, we would no longer beable to consolidate the financial results of our Consolidated Affiliated Entities in our consolidated financial statements.Table of Contents31We rely on our Consolidated Affiliated Entities to operate a portion of our China operations, which may not be as effective as direct ownership inproviding operational control.As noted above, we rely on our Consolidated Affiliated Entities, to operate a portion of our operations in China. The ContractualArrangements may not be as effective as direct ownership in providing us with control over our Consolidated Affiliated Entities. If Noah Investmentor its shareholders fail to perform their respective obligations under the Contractual Arrangements, our recourse to the assets held by our ConsolidatedAffiliated Entities is indirect and we may have to incur substantial costs and expend significant resources to enforce such arrangements in reliance onlegal remedies under PRC law. These remedies may not always be effective, particularly in light of uncertainties in the PRC legal system.Furthermore, in connection with litigation, arbitration or other judicial or dispute resolution proceedings, assets under the name of any of recordholder of equity interests in our Consolidated Affiliated Entities, including such equity interests, may be put under court custody. As a consequence,we cannot be certain that the equity interests will be disposed pursuant to the Contractual Arrangement or ownership by the record holder of theequity interests. In addition, we may lose the ability to use and enjoy assets held by any of our Consolidated Affiliated Entities that are important tothe operation of our business if those Consolidated Affiliated Entities declare bankruptcy or become subject to dissolution or liquidation proceedings.The Contractual Arrangements are governed by PRC law and provide for the resolution of disputes through arbitration in the PRC. Accordingly, thesecontracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC legal procedures. Under theContractual Arrangements, as a legal matter, if our Noah Investment or its shareholders fail to perform their respective obligations under theContractual Arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. We may also haveto rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assureyou will be effective. However, the legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result,uncertainties in the PRC legal system could limit our ability to enforce the Contractual Arrangements, which may make it difficult to exert effectivecontrol over our Consolidated Affiliated Entities, and our ability to conduct our business may be negatively affected.Contractual Arrangements among our PRC subsidiary, Noah Group, one of our Consolidated Affiliated Entities, Noah Investment, and NoahInvestment’s shareholders may be subject to scrutiny by the PRC tax authorities, who may determine that we or Noah Investment and itssubsidiaries owe additional taxes, which could substantially reduce our consolidated net income and the value of your investment.Under applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by thePRC tax authorities. We are not able to determine whether the Contractual Arrangements that we have entered into among our PRC subsidiary, NoahGroup, one of our Consolidated Affiliated Entities, Noah Investment, and Noah Investment’s shareholders will be regarded by the PRC tax authoritiesas arm’s length transactions. We could face material and adverse tax consequences if the PRC tax authorities determine that the ContractualArrangements among Noah Group, Noah Investment, and Noah Investment’s shareholders were not entered into on an arm’s length basis or resultedin an impermissible reduction in taxes under applicable PRC laws, rules and regulations, and adjust Noah Investment’s income in the form of atransfer pricing adjustment. A transfer pricing adjustment could, among other things, result in a reduction, for PRC tax purposes, of expensedeductions recorded by Noah Investment, which could in turn increase its respective tax liabilities. In addition, the PRC tax authorities may imposepunitive interest on Noah Investment for the adjusted but unpaid taxes at the rate of 5% over the basic Renminbi lending rate published by the PBOCaccording to applicable regulations. Although Noah Group did not generate any revenues from providing services to Noah Investment under theContractual Arrangements in the past, if there are such revenues in the future and the PRC tax authorities decide to make transfer pricing adjustmentson Noah Investment’s net income, our consolidated net income may be adversely affected.Table of Contents32Because certain shareholders of our Consolidated Affiliated Entities are our directors and executive officers, their fiduciary duties to us mayconflict with their respective roles in the Consolidated Affiliated Entities. If any of the shareholders of our Consolidated Affiliated Entities fails toact in the best interests of our company or our shareholders, our business and results of operations may be materially and adversely affected.Certain shareholders of Noah Investment, one of our Consolidated Affiliated Entities, are our directors and executive officers, including Ms.Jingbo Wang, our chairwoman and chief executive officer, Mr. Zhe Yin, our director, and Mr. Boquan He, our independent director. Conflicts ofinterest may arise between the dual roles of those individuals who are either our directors or executive officers and shareholders of our ConsolidatedAffiliated Entities. The fiduciary duties owed by these directors and officers to our company under Cayman Islands law, including their duties to acthonestly, in good faith and in our best interests, may conflict with their roles as shareholders of our Consolidated Affiliated Entities, as what is in thebest interest of our Consolidated Affiliated Entities may not be in the best interests of our company. In addition, these individuals may breach or causeNoah Investment and its subsidiaries to breach or refuse to renew the existing Contractual Arrangements with us. We do not have existingarrangements to address such potential conflicts of interest, other than to replace the current directors of Noah Investment, either by exercising ouroption under the exclusive option agreement with Noah Investment’s shareholders to cause them to transfer all of their equity ownership in NoahInvestment to a PRC entity or individual designated by us, and this new shareholder of Noah Investment could then appoint new directors of NoahInvestment to replace the current directors, or cause our PRC subsidiary, Noah Group, in the capacity of the attorney-in-fact of Noah Investment’sshareholders to directly appoint new directors of Noah Investment to replace these individuals.We rely on Noah Investment’s shareholders to comply with PRC law, which protects contracts and provides that directors and executiveofficers owe a duty of loyalty to our company and require them to avoid conflicts of interest and not to take advantage of their positions for personalgains. Although our independent directors or disinterested officers may take measures to prevent the parties with dual roles from making decisionsthat may favor themselves as shareholders of the Consolidated Affiliated Entities, we cannot assure you that these measures would be effective in allinstances and that when conflicts arise, those individuals will act in the best interest of our company or that conflicts will be resolved in our favor. Thelegal frameworks of China and the Cayman Islands do not provide guidance on resolving conflicts in the event of a conflict with another corporategovernance regime. If we cannot resolve any conflicts of interest or disputes between us and those individuals, we would have to rely on legalproceedings, which may materially disrupt our business. There is also substantial uncertainty as to the outcome of any such legal proceeding.We may rely to a large extent on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financingrequirements we may have, and any limitation on the ability of our PRC subsidiaries to pay dividends to us could have a material adverse effect onour ability to conduct our business.Noah Holdings Limited is a holding company, and we may rely to a large extent on dividends and other distributions on equity paid by ourPRC subsidiaries for our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to ourshareholders and any debt we may incur. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt mayrestrict their ability to pay dividends or make other distributions to us. In addition, the PRC tax authorities may require us to adjust our taxable incomeunder the Contractual Arrangements that Noah Group currently has in place with our Consolidated Affiliated Entities in a manner that wouldmaterially and adversely affect its ability to pay dividends and other distributions to us.In addition, our PRC subsidiaries and Consolidated Affiliated Entities are required to maintain certain statutory reserves and may alsoallocate a portion of their after-tax profits to staff welfare and bonus funds, which in each case are not distributable as cash dividends except in theevent of liquidation. Any limitation on the ability of our PRC subsidiaries and affiliated entities to pay dividends or make other distributions to uscould materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, orotherwise fund and conduct our business.Table of Contents33Our current corporate structure and business operations may be affected by the newly enacted Foreign Investment Law.On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law, which took effect on January 1, 2020 andreplaced the previous laws regulating foreign investment in China, namely, the PRC Equity Joint Venture Law, the PRC Cooperative Joint VentureLaw and the Wholly Foreign-owned Enterprise Law together with their implementation rules and ancillary regulations. The Foreign Investment Lawembodies an expected PRC regulatory trend to rationalize its foreign investment regulatory regime in line with prevailing international practice andthe legislative efforts to unify the corporate legal requirements for both foreign and domestic investments. See “Item 4. Information on the Company—B. Business Overview—Regulations in China—Regulation on Foreign Investment.”The corporate structure implemented through the Contractual Arrangements structure has been adopted by many PRC-based companies,including us, to comply with laws and regulations in China. However, substantial uncertainties still exist in relation to the interpretation andimplementation of current and future PRC laws and regulations, including the Foreign Investment Law, especially in regard to the permissibility ofthe Contractual Arrangements. While the Foreign Investment Law does not comment on the concept of “de facto control” and does not definecontractual arrangements as a form of foreign investment explicitly, it has a catch-all provision under the definition of “foreign investment” to includeinvestments made by foreign investors in China through means stipulated by laws or administrative regulations or provisions to provide forcontractual arrangements as a form of foreign investment. We cannot assure you that future laws and regulations will not provide for contractualarrangements as a form of foreign investment. Therefore, there can be no assurance that our control over our Consolidated Affiliated Entities underthe Contractual Arrangements will not be deemed as foreign investment in the future. In the event that any possible implementing regulations of theForeign Investment Law or any other future laws, administrative regulations or provisions deem contractual arrangements as a type of foreigninvestment, when the funds that we act as the general partner invest into other equity investment funds or companies in China (either directly orthrough the investments in other equity investment funds), there could be a risk that such funds or companies may be deemed as having foreigninvestment in their shareholding structure when governmental authorities review such funds or investee companies’ applications for certain approvalsor licenses in industries that are subject to foreign investment restrictions. Any such future changes in applicable laws or regulations could reduce theinvestment opportunities available to us.PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of conversion offoreign currencies into Renminbi may delay or prevent us from using any offshore cash we may have to make loans to our PRC subsidiaries andConsolidated Affiliated Entities or to make additional capital contributions to our PRC subsidiaries, which could materially and adversely affectour liquidity and our ability to fund and expand our business.We are an offshore holding company conducting our operations in China through our PRC subsidiaries and Consolidated Affiliated Entities.We may make loans to our PRC subsidiaries and Consolidated Affiliated Entities, or we may make additional capital contributions to our PRCsubsidiaries.Any loans made by us to our PRC subsidiaries are subject to PRC regulations and foreign exchange loan registrations. For example, loans byus to our PRC subsidiaries to finance their activities cannot exceed statutory limits, i.e., the difference between its total amount of investment and itsregistered capital, or certain amount calculated based on elements including capital or net assets and the cross-border financing leverage ratio(“Macro-prudential Management Mode”) under relevant PRC laws and the loans must be registered with the local counterpart of the SAFE, or filedwith SAFE in its information system. We may also provide loans to our Consolidated Affiliated Entities or its subsidiaries or other domestic PRCentities under the Macro-prudential Management Mode. According to the Circular of the People’s Bank of China and the State Administration ofForeign Exchange on Adjusting the Macro-prudent Adjustment Parameter for Cross-border Financing issued on January 7, 2021, the macro-prudentadjustment parameter for cross-border financing has been decreased to 1 from 1.25. Moreover, any medium or long-term loan to be provided by us toour Consolidated Affiliated Entities or its subsidiaries or other domestic PRC entities must also be registered with the NDRC. We may also decide tofinance our PRC subsidiaries by means of capital contributions. These capital contributions must be recorded with the competent administration formarket regulation.Table of Contents34On March 30, 2015, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the Administrative ApproachRegarding the Settlement of the Foreign Exchange Capital of Foreign-invested Enterprises (“SAFE Circular 19”) which took effect and replacedprevious regulations from June 1, 2015. Pursuant to SAFE Circular 19, up to 100% of foreign currency capital of a foreign-invested enterprise may beconverted into RMB capital according to the actual operation, and within the business scope, of the enterprise in its discretion. Although SAFECircular 19 allows for the use of RMB converted from the foreign currency-denominated capital for equity investments in the PRC, the restrictionscontinue to apply as to FIEs’ use of the converted RMB for purposes beyond the business scope, for entrusted loans or for inter-company RMB loans.SAFE promulgated the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment on October 23, 2019 (“SAFECircular 28”), pursuant to which all foreign-invested enterprises can make equity investments in the PRC with their capital funds in accordance withrelevant laws and regulations. As SAFE Circular 28 is newly issued and the relevant government authorities have broad discretion in interpreting theregulation, it is unclear whether SAFE will permit such capital funds to be used for equity investments in the PRC in actual practice.In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holdingcompanies, we cannot assure you that we will be able to complete the necessary government registrations or the record-filings on a timely basis, if atall, with respect to future loans by us to our PRC subsidiaries or our Consolidated Affiliated Entities or with respect to future capital contributions byus to our PRC subsidiaries. If we fail to complete such registrations or record-filings, our ability to use any offshore cash we may have, including theproceeds we receive from any future offshore offering of equity or debt securities, and to capitalize or otherwise fund our PRC operations may benegatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.Risks Related to Doing Business in ChinaOur ADSs may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect auditors who are located inChina. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment.Additionally, the inability of the PCAOB to conduct inspections deprives our investors with the benefits of such inspections.The Holding Foreign Companies Accountable Act (the “HFCA Act”) was enacted on December 18, 2020. The HFCA Act states if the SECdetermines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB forthree consecutive years beginning in 2021, the SEC shall prohibit our shares or ADSs from being traded on a national securities exchange or in theover the counter trading market in the U.S.Our auditor, the independent registered public accounting firm that issues the audit report included in our annual report filed with theSecurities and Exchange Commission, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB,is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicableprofessional standards. Since our auditor is located in China, a jurisdiction where the PCAOB has been unable to conduct inspections without theapproval of the Chinese authorities, our auditor is currently not inspected by the PCAOB.On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirementsof the HFCA Act. We will be required to comply with these rules if the SEC identifies us as having a “non-inspection” year under a process to besubsequently established by the SEC. The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and tradingprohibition requirements described above.Table of Contents35On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if passed by the U.S. Houseof Representatives and signed into law, would reduce the number of consecutive non-inspection years required for triggering the prohibitions underthe HFCA Act from three years to two. On December 14, 2021, the Accelerating Holding Foreign Companies Accountable Act was formallyintroduced to the U.S. House of Representatives for consideration. On February 4, 2022, the U.S. House of Representatives passed the AmericaCompetes Act of 2022, which includes the exact same amendments as the bill passed by the Senate. The America Competes Act however includes abroader range of legislation not related to the HFCA Act in response to the U.S. Innovation and Competition Act passed by the Senate in 2021. TheU.S. House of Representatives and U.S. Senate will need to agree on amendments to these respective bills to align the legislation and pass theiramended bills before the President can sign into law. It is unclear when the U.S. Senate and U.S. House of Representatives will resolve the differencesin the U.S. Innovation and Competition Act and the America Competes Act of 2022 bills currently passed, or when the U.S. President will sign on thebill to make the amendment into law, or at all.On September 22, 2021, the SEC approved a rule adopted by PCAOB, which provides a framework for the PCAOB to use whendetermining, as contemplated under the HFCA Act, whether it is unable to inspect or investigate completely registered public accounting firmslocated in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. The new rule was approved by the SEC onNovember 5, 2021. On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirementsin the HFCA Act.On December 16, 2021, PCAOB issued the HFCA Act Determination Report, according to which our independent registered publicaccounting firm is subject to the determinations that the PCAOB is unable to inspect or investigate completely. After we file this annual report onForm 20-F, we may be identified by the SEC under the HFCA Act as having filed audit reports issued by a registered public accounting firm thatcannot be inspected or investigated completely by the PCAOB.The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, onAugust 6, 2020, the President’s Working Group on Financial Markets (the “PWG”), issued the Report on Protecting United States Investors fromSignificant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement fiverecommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfill its statutory mandate. Someof the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations weremore stringent than the HFCA Act. For example, if a company was not subject to PCAOB inspection, the report recommended that the transitionperiod before a company would be delisted would end on January 1, 2022.The SEC has announced that the SEC staff is preparing a consolidated proposal for the rules regarding the implementation of the HFCA Actand to address the recommendations in the PWG report. It is unclear when the SEC will complete its rulemaking and when such rules will becomeeffective and what, if any, of the PWG recommendations will be adopted. The implications of this possible regulation in addition to the requirementsof the HFCA Act are uncertain. Such uncertainty could cause the market price of our ADSs to be materially and adversely affected, and our securitiescould be delisted or prohibited from being traded “over-the-counter” earlier than would be required by the HFCA Act. If our securities are unable tobe listed on another securities exchange by then, such a delisting would substantially impair your ability to sell or purchase our ADSs when you wishto do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of our ADSs.The PCAOB’s inability to conduct inspections in China prevents it from fully evaluating the audits and quality control procedures of ourindependent registered public accounting firm. As a result, we and investors in our ordinary shares are deprived of the benefits of such PCAOBinspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of ourindependent registered public accounting firm’s audit procedures or quality control procedures as compared to auditors outside of China that aresubject to the PCAOB inspections, which could cause investors and potential investors in our stock to lose confidence in our audit procedures,reported financial information and the quality of our financial statements.Table of Contents36In May 2013, the PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the CSRCand the PRC Ministry of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documentsrelevant to investigations undertaken by the PCAOB in the PRC or by the CSRC or the PRC Ministry of Finance in the United States. The PCAOBcontinues to be in discussions with the CSRC and the PRC Ministry of Finance to permit joint inspections in the PRC of audit firms that are registeredwith the PCAOB and audit Chinese companies that trade on U.S. exchanges.Proceedings instituted by the SEC against certain PRC-based accounting firms, including our independent registered public accounting firm,could result in financial statements being determined to not be in compliance with the requirements of the U.S. Exchange Act.Starting in 2011 the Chinese affiliates of the “big four” accounting firms, including our independent registered public accounting firm, wereaffected by a conflict between U.S. and PRC law. Specifically, for certain U.S.-listed companies operating and audited in mainland China, the SECand the PCAOB sought to obtain from the Chinese firms access to their audit work papers and related documents. The firms were, however, advisedand directed that under PRC law, they could not respond directly to the U.S. regulators on those requests, and that requests by foreign regulators foraccess to such papers in China had to be channeled through the CSRC.In late 2012, this impasse led the SEC to commence administrative proceedings under Rule 102(e) of its Rules of Practice and also under theSarbanes-Oxley Act of 2002 against the Chinese accounting firms, including our independent registered public accounting firm. A first instance trialof the proceedings in July 2013 in the SEC’s internal administrative court resulted in an adverse judgment against the firms. The administrative lawjudge proposed penalties on the firms including a temporary suspension of their right to practice before the SEC, although that proposed penalty didnot take effect pending review by the Commissioners of the SEC. On February 6, 2015, before a review by the Commissioner had taken place, thefirms reached a settlement with the SEC. Under the settlement, the SEC accepts that future requests by the SEC for the production of documents willnormally be made to the CSRC. The firms will receive matching Section 106 requests, and are required to abide by a detailed set of procedures withrespect to such requests, which in substance require them to facilitate production via the CSRC. If they fail to meet specified criteria, the SEC retainsauthority to impose a variety of additional remedial measures on the firms depending on the nature of the failure. Remedies for any futurenoncompliance could include, as appropriate, an automatic six-month bar on a single firm’s performance of certain audit work, commencement of anew proceeding against a firm, or in extreme cases the resumption of the current proceeding against all four firms. If additional remedial measures areimposed on the PRC-based “big four” accounting firms, including our independent registered public accounting firm, in administrative proceedingsbrought by the SEC alleging the firms’ failure to meet specific criteria set by the SEC with respect to requests for the production of documents, wecould be unable to timely file future financial statements in compliance with the requirements of the U.S. Exchange Act.In the event that the SEC restarts the administrative proceedings, depending upon the final outcome, listed companies in the United Stateswith major PRC operations may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result infinancial statements being determined to not be in compliance with the requirements of the U.S. Exchange Act, including possible delisting.Moreover, any negative news about any such future proceedings against these audit firms may cause investor uncertainty regarding China-based,U.S.-listed companies and the market price of our ADSs may be adversely affected.If our independent registered public accounting firm was denied, even temporarily, the ability to practice before the SEC and we were unableto timely find another registered public accounting firm to audit and issue an opinion on our financial statements, our financial statements could bedetermined not to be in compliance with the requirements of the U.S. Exchange Act. Such a determination could ultimately lead to the delisting of ourADSs from NYSE, or deregistration from the SEC, or both, which would substantially reduce or effectively terminate the trading of our ADSs in theUnited States.Table of Contents37The approval of or filing with the CSRC or other PRC government authorities may be required under PRC law in connection with our issuance ofsecurities overseas, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Councilissued the Opinions on Strictly Cracking Down Illegal Securities Activities in accordance with the Law (the “Opinions on Securities Activities”),which announced the plans to take effective measures to enhance the administration over illegal securities activities and the supervision on theoffering and listing of PRC domestic companies in an overseas market, including promoting the construction of relevant regulatory systems.On December 24, 2021, the CSRC promulgated the Provisions of the State Council on the Administration of Overseas Securities Offeringand Listing by Domestic Companies (Draft for Comments) (the “Draft Overseas Listing Administration Provisions”), and the AdministrativeMeasures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (the “Draft Overseas ListingFiling Measures”), which, if become effective, require that a PRC domestic company that seeks to offer and list securities in an overseas market,whether through direct or indirect form, to file the required documents with the CSRC within three working days after such application for overseasoffering and listing is submitted, and stipulate certain circumstances under which the overseas offering and listing would be prohibited, as well as themeasures taken by the CSRC if a PRC domestic company falls into any of such circumstances prior to the overseas offering and listing, such asimposing a postponement or termination of the proposed overseas offering and listing, and canceling the corresponding filing on the conditions thatthe proposed overseas offering and listing application documents have been filed. As of the date of this annual report, the Draft Overseas ListingAdministration Provisions and the Draft Overseas Listing Filing Measures were released for public comments and the final version and effective dateof such regulations are subject to change with substantial uncertainty. As of the date of this annual report, we cannot predict the impact of theseregulations on maintain the listing status of our ADSs and/or other securities, or any of our future offerings of securities overseas.On December 28, 2021, the Revised Cybersecurity Review Measures was released, which stipulate, among others, that the procurement ofnetwork products and services by critical information infrastructure operators and the data processing activities conducted by network platformoperators which affect or may affect national security shall be subject to cybersecurity review. See also “—Risks Related to Our Business—Ourbusiness is subject to various evolving PRC laws and regulations regarding data privacy and cyber security. Failure of cyber security and data privacyconcerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations.”Furthermore, the PRC governmental authorities may have wide discretion on the interpretation and enforcement of the foregoing regulations,and we cannot assure you that any new rules or regulations promulgated in the future will not impose additional requirements on any of our futureproposed offering of securities overseas or the listing of our ADSs. If it is determined in the future that approvals, filings, registrations or other kind ofgovernmental authorisation from the CSRC or other PRC governmental authorities are required for any of our future offerings of securities overseasor to maintain the listing status of our ADSs, it is uncertain whether we can or how long it will take us to obtain such authorisation, and whether anysuch authorisation could be rescinded. Any failure to obtain or delay in obtaining such authorisation, or a rescission of any such authorization ifobtained by us, may subject us to regulatory actions or other sanctions from the CSRC or other PRC governmental authorities, which may have amaterial adverse effect on our business, financial condition or results of operations.Table of Contents38PRC governmental authorities’ significant authority in regulating our operations and their oversight and control over offerings conductedoverseas by, and foreign investment in, China-based issuers could significantly limit or completely hinder our ability to offer or continue to offersecurities to investors and result in a material adverse change in our operations and the value of our ADSs.We conduct our business primarily through our subsidiaries in which we hold equity ownership interests, and our Consolidated AffiliatedEntities controlled under the Contractual Arrangements. Our operations in China are governed by PRC laws and regulations. The PRC governmentalauthorities have significant oversight and discretion over the conduct of our business, and it may influence our operations, which could result in amaterial adverse change in our operation and/or the value of our ADSs. Also, the PRC governmental authorities have recently indicated an intent toexert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Any such action couldsignificantly limit or completely hinder our ability to offer or continue to offer securities to investors. In addition, implementation of industry-wideregulations directly targeting our operations could cause the value of our securities to significantly decline. Therefore, investors of our company andour business face potential uncertainty from actions taken by the PRC governmental authorities affecting our business.In particular, The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions maybe cited for reference but have limited precedential value. China has not developed a fully integrated legal system, and recently enacted laws, rulesand regulations may not sufficiently cover all aspects of economic activities in China or may be subject to a significant degree of interpretation byPRC regulatory agencies and courts. In particular, because these laws, rules and regulations are relatively new, and because of the limited number ofpublished decisions and the non-precedential nature of these decisions, and because the laws, rules and regulations often give the relevant regulatorsignificant discretion in how to enforce them, the interpretation and enforcement of these laws, rules and regulations involve uncertainties and can beinconsistent and unpredictable. Therefore, it is possible that our existing operations may be found not to be in full compliance with relevant laws andregulations in the future. In addition, the PRC legal system is based in part on government policies and internal rules, some of which are not publishedon a timely basis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules untilafter the occurrence of the violation.Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources andmanagement attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory andcontractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoythan in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materiallyand adversely affect our business, financial condition and results of operations.In addition, the PRC government has recently announced its plans to enhance its regulatory oversight of Chinese companies listing overseas.The Opinions on Securities Activities issued on July 6, 2021 called for:●tightening oversight of data security, cross-border data flow and administration of classified information, as well as amendments torelevant regulation to specify responsibilities of overseas listed Chinese companies with respect to data security and informationsecurity;●enhanced oversight of overseas listed companies as well as overseas equity fundraising and listing by Chinese companies; and●extraterritorial application of China’s securities laws.Table of Contents39As the Opinions on Securities Activities were recently issued, there are great uncertainties with respect to the interpretation andimplementation thereof. The PRC government may promulgate relevant laws, rules and regulations that may impose additional and significantobligations and liabilities on overseas listed Chinese companies regarding data security, cross-border data flow, and compliance with China’ssecurities laws. See also “—Risks Related to Our Business—Any failure to ensure cyber security or protection of our clients’ personal data or privacycould lead to legal liabilities, adversely affect our reputation and have a material adverse effect on our business, financial condition or results ofoperations” and “—Our business is subject to various evolving PRC laws and regulations regarding data privacy and cyber security. Failure of cybersecurity and data privacy concerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations.” Itis uncertain whether or how these new laws, rules and regulations and the interpretation and implementation thereof may affect us, but among otherthings, our ability to obtain external financing through the issuance of equity securities overseas could be negatively affected.Our business is subject to various evolving PRC laws and regulations regarding data privacy and cyber security. Failure of cyber security anddata privacy concerns could subject us to penalties, damage our reputation and brand, and harm our business and results of operations.We face significant challenges with respect to cyber security and data privacy, including the receipt, processing, storage, and transmission ofthe data of our clients and others, much of which is confidential. We are subject to various regulatory requirements relating to cyber security and dataprivacy, including, without limitation the PRC Cybersecurity Law (the “Cybersecurity Law”). The Cybersecurity Law requires, among others, anetwork operator to adopt technical measures and other necessary measures to safeguard the safety and stability of network operations, effectivelyrespond to network security incidents, prevent illegal and criminal activities, and maintain the integrity, confidentiality and availability of networkdata. The Cyber Security Law also reaffirms certain basic principles and requirements on personal information protection.Regulatory requirements on cyber-security and data privacy are constantly evolving and can be subject to varying interpretations orsignificant changes, resulting in uncertainties about the scope of our responsibilities in that regard. For example, on June 10, 2021, the StandingCommittee of the National People’s Congress promulgated the PRC Data Security Law (the“Data Security Law”), which took effect on September 1,2021. The Data Security Law applies to data processing activities, including the collection, storage, use, processing, transmission, availability anddisclosure of data, and security supervision of such activities within the territory of the PRC. According to the Data Security Law, whoever carries outdata processing activities shall establish a sound data security management system throughout the whole process, organize data security education andtraining, and take corresponding technical measures and other necessary measures to ensure data security. The Data Security Law provides a nationaldata security review system, under which data processing activities that affect or may affect national security shall be reviewed, and prohibits anyindividual or entity in China from providing data stored in PRC to foreign judicial or law enforcement departments without the approval of competentPRC authorities. In Addition, the Personal Information Protection Law of the PRC (the“Personal Information Protection Law”), issued on August 20,2021 by the SCNPC, further details the general rules and principles on personal information processing and further increases the potential liability ofpersonal information processor. Even though we have already taken necessary organizational and technical measures in accordance with applicablelegal requirements to protect the safety of our network facilities and the data processed by us, we may still face risks inherent in handling andprotecting large volumes of data, including protecting the data temporarily hosted in our system, detecting and prohibiting unauthorized data sharingand transfers, preventing attacks on our system by outside parties, foiling any fraudulent behavior or improper use by our employees, and maintainingand updating our database. Any system failure, security breach or attempts by third parties to illegally obtain the data that results in any actual orperceived release of client data could damage our reputation and brand, deter current and potential clients from using our services, affect our businessand results of operations, and expose us to potential legal liability.Table of Contents40The Regulations on Network Data Security Management (Draft for Comments), or the Draft Network Data Regulations, was released byCAC on November 14, 2021. According to the Draft Network Data Regulations, data processors conducting the following activities shall apply forcybersecurity review: (i) merger, reorganization or division of internet platform operators that have acquired a large number of data resources relatedto national security, economic development or public interests affects or may affect national security; (ii) listing abroad of data processors processingover one million users’ personal information; (iii) listing in Hong Kong which affects or may affect national security; or (iv) other data processingactivities that affect or may affect national security. The Draft Network Data Regulations also provide that operators of large internet platforms thatset up headquarters, operation centers or research and development centers overseas shall report to the national cyberspace administration andcompetent authorities. In addition, the Draft Network Data Regulations also require that data processors processing important data or listed overseasshall conduct an annual data security self-assessment or entrust a data security service institution to do so, and submit the data security assessmentreport of the previous year to the local branch of CAC before January 31 each year. As of the date of this annual report, the Network Data Regulationshad not yet been formally adopted and there is no timetable as to when it will be enacted. As such, substantial uncertainties exist with respect to theenactment timetable, final content, interpretation and implementation, and we cannot assure that relevant governmental authorities will not interpretthe laws and regulations in ways that may negatively affect us. On December 28, 2021, Measures for Cybersecurity Review was issued by CACjointly with other governmental authorities, which took effect on February 15, 2022. Under the Measures for Cybersecurity Review, the procurementof network products and services by critical information infrastructure operators and the data processing activities conducted by network platformoperators which affect or may affect national security shall be subject to cybersecurity review. Besides, according to the Measures for CybersecurityReview, a network platform operator who processes the personal information of more than one million users and is seeking for listing in a foreigncountry must apply for a cybersecurity review. In addition, according to Article 16 of the Measures for Cybersecurity Review, member organizationsof the cybersecurity review working mechanism may initiate cybersecurity review towards network products, network services, and data processingactivities ex officio, which means we may be also subject to cybersecurity review when the Working Members initiate such cybersecurity review exofficio.Based on Measures for Cybersecurity Review, cybersecurity review shall focus on the assessment of a number of national security riskfactors of the relevant object or situation, including but not limited to, risks of any illegal control or supply chain interruption of critical informationinfrastructure, and risks of illegal use or cross-border transmission of data. As advised by our PRC legal counsel, Zhong Lun Law Firm, we should notbe deemed as an operator of critical information infrastructure and the network products and services purchased and used by us are general networkproducts and services in the market, and there is no obvious risk of supply chain interruption. We have not received any material queries ornotifications from the CAC or other PRC governmental authorities and have not been subject to any material administrative penalties or othersanctions by any competent regulatory authorities in relation to cybersecurity, data and personal information protection. There has been no materialcybersecurity or data protection incidents with respect to data or personal information theft, leakage, damage or loss. Our data will be transferred torecipients located in regions and countries outside the territory of mainland China, such as Hong Kong and the United States. However, since weprocess less than one million users’ personal information and transmit an insignificant number of users’ personal information to overseas recipients,the possibility for us to apply to the CAC for cybersecurity review is relatively low. Besides, we have taken necessary technical and organizationalmeasures to protect the security of the data being transferred abroad, including using data encryption to secure personal information when it is intransit. We have also established a basic cybersecurity and data protection system pursuant to the Cybersecurity Law, the Data Security Law, thePersonal Information Protection Law and other relevant laws and regulations.There are uncertainties as to the interpretation and application of these cybersecurity laws, regulations and standards, which laws may beinterpreted and applied in a manner that is inconsistent with our current policies and practices or require changes to the features of our system. If weare unable to address any data security and information protection concerns, any compromise of security that results unauthorized disclosure ortransfer of personal data, or to comply with the then applicable laws and regulations, we may incur additional costs and liability and result ingovernmental enforcement actions, litigation, fines and penalties or adverse publicity and could cause our clients to lose trust in us, which could havea material adverse effect on our business, results of operations, financial condition and prospects. We may also be subject to new laws, regulations orstandards or new interpretations of existing laws, regulations or standards, including those in the areas of data security and data privacy, which couldrequire us to incur additional costs and restrict our business operations.Table of Contents41Fluctuations in exchange rates could have a material adverse effect on the value of your investment.The value of the Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditionsand by China’s foreign exchange policies, among other things. In June 2010, the PRC government allowed the Renminbi to appreciate slowly againstthe U.S. dollar. However, starting from June 2015, the trend of appreciation changed and the Renminbi started to depreciate against the U.S. dollargradually. In recent years, the exchange rate between Renminbi and U.S. dollar has fluctuated. It is difficult to predict how market forces or PRC orU.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future.The majority of our sales contracts were denominated in Renminbi and majority of our costs and expenses are denominated in Renminbi,while a portion of our financial assets are denominated in U.S. dollars. Very limited hedging options are available in China to reduce our exposure toexchange rate fluctuations, and we have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency risk. Whilewe may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not beable to adequately hedge our exposure or at all. In addition, our currency exchange losses may be magnified by PRC exchange control regulations thatrestrict our ability to convert Renminbi into foreign currency. As a result, any significant revaluation of the Renminbi or the U.S. dollar may adverselyaffect our cash flows, earnings and financial position, and the value of, and any dividends payable on, our ADSs. For example, an appreciation of theRenminbi against the U.S. dollar would make any new RMB-denominated investments or expenditures more costly to us, to the extent that we need toconvert U.S. dollars into Renminbi for such purposes. An appreciation of the Renminbi against the U.S. dollar would also result in foreign currencytranslation losses for financial reporting purposes when we translate our U.S. dollar-denominated financial assets into Renminbi, our reportingcurrency. Conversely, if we decide to convert Renminbi into U.S. dollars for the purpose of making payments for dividends on our ADSs, for paymentof interest expenses, for strategic acquisitions or investments or for other business purposes, appreciation of the U.S. dollar against the Renminbiwould have a negative effect on us.PRC foreign exchange control regulations restricting the conversion of Renminbi into foreign currencies may limit our ability to utilize ourrevenues effectively and affect the value of your investment.The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance ofcurrency out of China. We receive the majority of our revenues in Renminbi. Under our current corporate structure, we may rely on dividendpayments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange controlregulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchangetransactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. Therefore, ourPRC subsidiaries are currently able to pay dividends in foreign currencies to us without prior approval from SAFE by complying with certainprocedural requirements. However, approval from or registration with appropriate government authorities or designated banks is required whereRenminbi is to be converted into foreign currency and remitted out of China to pay capital expenses, such as the repayment of loans denominated inforeign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. Ifthe foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not beable to pay dividends in foreign currencies to our shareholders, including holders of our ADSs.PRC regulations relating to offshore investment activities by PRC residents may subject our PRC resident beneficial owners or our PRCsubsidiaries to liability or penalties, limit our ability to inject capital into our PRC subsidiaries, limit our PRC subsidiaries’ ability to increase itsregistered capital or distribute profits to us, or may otherwise adversely affect us.SAFE has promulgated several rules and regulations that require PRC individuals and PRC corporate entities to register with and obtainapproval from SAFE or its local branches in connection with their direct or indirect offshore investment activities (the “SAFE Rules”). In July 2014,SAFE promulgated the SAFE Circular 37, which replaces the Circular on Relevant Issues Concerning Foreign Exchange Administration on PRCResidents’ Financing and Round-Trip Investment via Offshore Special Purpose Vehicles, or SAFE Circular 75. These SAFE Rules are applicable toour shareholders who are PRC individuals or PRC corporate entities and may be applicable to any offshore acquisitions that we make in the future.Table of Contents42Pursuant to SAFE Circular 37, PRC residents (including PRC individuals and PRC corporate entities) who make direct or indirectinvestments in offshore special purpose vehicles (the “SPV”), are required to register such investments with SAFE or its local branches. In addition,any PRC resident who is a direct or indirect shareholder of an SPV is required to update its registration with the local branch of SAFE with respect tothat SPV, to reflect any change of the basic information, such as any change relating to the PRC individual shareholder, name or operation period, orany material events, such as increase or decrease of capital contribution, share transfer or exchange, or merger or division. In February 2015, SAFEpromulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or SAFE Notice 13.Pursuant to SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct investments,including those required under SAFE Circular 37, shall be filed with qualified banks instead of SAFE. Qualified banks should examine theapplications and accept registrations under the supervision of SAFE. However, due to the inherent uncertainty in the implementation of regulations bythe PRC government authorities, these SAFE registrations may not always be practically available under all circumstances prescribed in theseregulations.We may not be fully informed of the identities of all our shareholders or beneficial owners who are PRC residents, and we do not havecontrol over them and cannot compel them to comply with the SAFE Rules. Therefore, we cannot provide assurance that any applicable registrationsor any amendment under the SAFE Rules has been or will be completed in a timely manner, or at all. The failure or inability of our existing or futureshareholders or beneficial owners who are PRC residents to register or amend their foreign exchange registrations under the SAFE Rules may subjectsuch shareholders, beneficial owners or our PRC subsidiaries to fines and legal sanctions, or could result in liability under PRC laws for evasion ofapplicable foreign exchange restrictions, including (i) the requirement by SAFE to return the foreign exchange remitted overseas or into the PRCwithin a period of time specified by SAFE, with a fine of up to 30% of the total amount of foreign exchange remitted overseas or into PRC anddeemed to have been evasive or illegal and (ii) in circumstances involving serious violations, a fine of no less than 30% of and up to the total amountof remitted foreign exchange deemed evasive or illegal. Failure to register or comply with relevant requirements may also restrict our cross-borderinvestment activities or limit our ability to contribute additional capital to our PRC subsidiaries and limit our PRC subsidiaries’ ability to makedistributions or pay dividends to us. These risks may have a material adverse effect on our business, financial condition and results of operations.Furthermore, as these foreign exchange, inbound investment and outbound investment related regulations and their interpretation andimplementation have been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-bordertransactions, will be interpreted, amended and implemented by the relevant government authorities. We cannot predict how these regulations willaffect our business operations or future strategy. For example, we may be subject to a more stringent review and approval process with respect to ourforeign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our results ofoperations and financial condition. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of suchcompany, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreignexchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.In addition, our offshore financing activities, such as the issuance of foreign debt, are also subject to PRC laws and regulations. Inaccordance with such laws and regulations, we may be required to complete filing and registration with the National Development and ReformCommission prior to such activities. Failure to comply with the requirements may result in administrative hearing, warning, notification and otherregulatory penalties and sanctions.Table of Contents43Failure to comply with PRC regulations regarding the registration of share options held by our employees who are “domestic individuals” maysubject such employee or us to fines and legal or administrative sanctions.In January 2007, SAFE issued Implementing Rules for the Administrative Measures of Foreign Exchange Matters for Individuals (the“Individual Foreign Exchange Rule”), which, among other things, specified approval requirements for certain capital account transactions such as aPRC citizen’s participation in the employee stock ownership plans or stock option plans of an overseas publicly-listed company. On February 15,2012, SAFE issued the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock IncentivePlan of Overseas Publicly-Listed Company (the “Stock Incentive Plan Rules”), pursuant to which “domestic individuals” (both PRC residents andnon-PRC residents who reside in the PRC for a continuous period of not less than one year, excluding foreign diplomatic personnel andrepresentatives of international organizations) participating in any stock incentive plan of an overseas-listed company are required, through qualifiedPRC agents (which could be the PRC subsidiary of such overseas-listed company), to register with SAFE and complete certain other proceduresrelated to the stock incentive plan.We and our employees who are “domestic individuals” and have been granted share options (the “PRC optionees”), became subject to theStock Incentive Plan Rules when our company became an overseas-listed company upon the completion of our initial public offering. We and ourPRC optionees have completed the registration requirement under the Stock Incentive Plan Rules and intend to continue making such registration onan on-going basis as new awards are granted. If we or our PRC optionees fail to comply with the Individual Foreign Exchange Rule and the StockIncentive Plan Rules, we and/or our PRC optionees may be subject to fines and other legal sanctions. We may also face regulatory uncertainties thatcould restrict our ability to adopt additional option plans for our directors and employees under PRC law. In addition, the SAT has issued a fewcirculars concerning employee stock options. Under these circulars, our employees working in China who exercise stock options will be subject toPRC individual income tax. Our PRC subsidiaries have obligations to file documents related to employee stock options with relevant tax authoritiesand withhold individual income taxes of those employees who exercise their stock options. If our employees fail to pay and we fail to withhold theirincome taxes, we may face sanctions imposed by tax authorities or any other PRC government authorities. However, there are substantialuncertainties regarding the interpretation and implementation of the Individual Foreign Exchange Rule and the Stock Incentive Plan Rules. We cannotguarantee that our current practices will comply with future interpretations of the Individual Foreign Exchange Rule and the Stock Incentive PlanRule, and any failure to comply could subject us to fines and other legal sanctions.The dividends we receive from our PRC subsidiaries may be subject to PRC tax under the PRC Enterprise Income Tax Law, which would have amaterial adverse effect on our financial condition and results of operations. In addition, if we are classified as a PRC resident enterprise for PRCincome tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or ADS holders.Pursuant to the PRC Enterprise Income Tax Law, orthe EIT Law, dividends generated and payable by a foreign-invested enterprise in Chinato its foreign investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty withChina that provides for a different withholding arrangement. We are a Cayman Islands holding company and the majority of our income may comefrom dividends we receive, directly or indirectly, from our wholly foreign-owned PRC subsidiaries. Since there is currently no such tax treatybetween China and the Cayman Islands, dividends we directly receive from our wholly foreign-owned PRC subsidiaries will generally be subject to a10% withholding tax.In addition, under the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance ofDouble Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, where a Hong Kong resident enterprise, which is considered anon-PRC tax resident enterprise, directly holds at least 25% of the equity interests in a PRC enterprise, the withholding tax rate in respect to thepayment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject toapproval of the PRC local tax authority. Accordingly, our Hong Kong subsidiaries, such as Noah Insurance (Hong Kong) Limited (“Noah Insurance”),are able to enjoy the 5% withholding tax rate for the dividends they receive from their PRC subsidiaries in which they hold a more than 25% of theequity interests if they satisfy the conditions prescribed in relevant tax rules and regulations and obtain the approvals as required. However, if NoahInsurance is considered to be a non-beneficial owner for purposes of the tax arrangement, any dividends paid to it by our wholly foreign-owned PRCsubsidiaries directly would not qualify for the preferential dividend withholding tax rate of 5%, but rather would be subject to a rate of 10%.Table of Contents44Furthermore, under the EIT Law and the Implementation Rules to the PRC Enterprise Income Tax Law, an enterprise established outside ofthe PRC with its “de facto management body” within the PRC is considered a PRC resident enterprise and will be subject to PRC enterprise incometax on its global income at the rate of 25%. See “Item 4. Information on the Company—B. Business Overview—Regulations in China—Regulationson Tax—PRC Enterprise Income Tax.” We do not believe that our company or any of its subsidiaries outside of China is a PRC resident enterprise forthe year ended December 31, 2021, because neither we nor these subsidiaries are controlled by a PRC enterprise or PRC enterprise group, andbecause our records and these subsidiaries’ records (including the resolutions of the respective boards of directors and the resolutions of the respectiveshareholders) are maintained outside the PRC. However, the tax resident status of an enterprise is subject to determination by the PRC tax authoritiesand uncertainties remain with respect to the interpretation of the term “de facto management body.” If the PRC tax authorities determine that ourcompany or any of its subsidiaries outside of China is a PRC resident enterprise for PRC tax purposes, they would be subject to a 25% PRC enterpriseincome tax on their global income. In addition, if our company is considered a PRC resident enterprise for PRC tax purposes, we may be required towithhold a 10% withholding tax from dividends we pay to our shareholders that are non-PRC resident enterprises, including the holders of our ADSs.Furthermore, non-PRC resident enterprise shareholders (including our ADS holders) may be subject to a 10% PRC tax on gains realized on the sale orother disposition of ADSs or ordinary shares, if such income is treated as sourced from within the PRC. It is unclear whether our non-PRC individualshareholders (including our ADS holders) would be subject to any PRC tax on dividends or gains obtained by such non-PRC individual shareholdersin the event we are determined to be a PRC resident enterprise. If any PRC tax were to apply to such dividends or gains, it would generally apply at arate of 20% unless a reduced rate is available under an applicable tax treaty. However, it is also unclear whether our non-PRC shareholders would beable to claim the benefits of any tax treaty between their country of tax residence and the PRC in the event that we are considered as a PRC residententerprise. If we are required to withhold such PRC income tax under the EIT Law, your investment in our ADSs may be materially and adverselyaffected.We face uncertainties with respect to the application of the Circular on Strengthening the Administration of Enterprise Income Tax for ShareTransfers by Non-PRC Resident Enterprises.The SAT has issued several rules and notices to tighten the scrutiny over acquisition transactions in recent years, including the Notice onCertain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-PRC Resident Enterprises issued in February 2015 (“SAT Circular7”). Pursuant to these rules and notices, if a non-PRC resident enterprise indirectly transfers PRC taxable properties, referring to properties of anestablishment or a place in the PRC, real estate properties in the PRC or equity investments in a PRC tax resident enterprise, by disposition of equityinterests in an overseas non-public holding company, without a reasonable commercial purpose and resulting in the avoidance of PRC enterpriseincome tax, such indirect transfer should be deemed as a direct transfer of PRC taxable properties and gains derived from such indirect transfer maybe subject to the PRC withholding tax at a rate of up to 10%. SAT Circular 7 has listed several factors to be taken into consideration by the taxauthorities in determining whether an indirect transfer has a reasonable commercial purpose. However, in spite of these factors, an indirect transfersatisfying all the following criteria shall be deemed to lack reasonable commercial purpose and be taxable under the PRC laws: (i) 75% or more of theequity value of the overseas enterprise being transferred is derived directly or indirectly from the PRC taxable properties; (ii) at any time during theone-year period before the indirect transfer, 90% or more of the asset value of the overseas enterprise (excluding cash) is comprised directly orindirectly of investments in the PRC, or 90% or more of its income is derived directly or indirectly from the PRC; (iii) the functions performed andrisks assumed by the overseas enterprise and any of its subsidiaries that directly or indirectly hold the PRC taxable properties are limited and areinsufficient to prove their economic substance; and (iv) the foreign tax payable on the gain derived from the indirect transfer of the PRC taxableproperties is lower than the potential PRC tax on the direct transfer of such assets. Nevertheless, an indirect transfer falling into the scope of certainsafe harbors under SAT Circular 7 may not be subject to PRC tax. Such safe harbors include qualified group restructuring, secondary market equitytrading and tax treaty exemptions.On October 17, 2017, the SAT released the Public Notice Regarding Issues Concerning the Withholding of Non-resident Enterprise IncomeTax at Source, or SAT Public Notice 37, effective from December 1, 2018. SAT Public Notice 37 replaced a series of circulars and revised the rulesgoverning the administration of withholding tax on China-sourced income derived by nonresident enterprises. SAT Public Notice 37 provided certainkey changes to the current withholding regime including, such as (i) the withholding obligation for a non-resident enterprise which is declaring adividend arises on the day the payment is actually made rather than on the day of the resolution to declare the dividends; and (ii) the provision that anon-resident enterprise must self-report tax within seven days if its withholding agents fail to withhold or is removed.Table of Contents45Under SAT Circular 7 and SAT Public Notice 37, the entities or individuals obligated to pay the transfer price to the transferor shall bewithholding agents and shall withhold the PRC tax from the transfer price. If a withholding agent fails to do so, the transferor shall report to and paythe PRC tax to the PRC tax authorities. In case neither a withholding agent nor the transferor complies with the obligations under SAT Circular 7 andSAT Public Notice 37, in addition to imposing penalties such as late payment interest on the transferors, the tax authority may also hold a withholdingagent liable and impose a penalty of 50% to 300% of the unpaid tax on the withholding agent, provided that such penalty imposed on the withholdingagent may be reduced or waived if the withholding agent has submitted the relevant materials in connection with the indirect transfer to the PRC taxauthorities in accordance with SAT Circular 7 and SAT Public Notice 37.However, as there is a lack of clear statutory interpretation on the implementation of these rules and notices, there is no assurance that the taxauthorities will not apply SAT Circular 7 and SAT Public Notice 37 to previous investments by non-PRC resident investors in our company or ourpre-listing restructuring, if any of such transactions were determined by the tax authorities to lack reasonable commercial purpose. As a result, we andour existing non-PRC resident investors may be at risk of being taxed under these rules and notices and may be required to expend valuable resourcesto comply with or to establish that we should not be taxed under such rules and notices, which may have a material adverse effect on our financialcondition and results of operations or such non-PRC resident investors’ investments in us. We have conducted and may conduct acquisitionsinvolving corporate structures, and historically our shares were transferred by certain then shareholders to our current shareholders. We cannot assureyou that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing obligations on us or require us toprovide assistance for the investigation of PRC tax authorities with respect thereto. Any PRC tax imposed on a transfer of our shares or anyadjustment of such gains would cause us to incur additional costs and may have a negative impact on the value of your investment in us.The enforcement of the Labor Contract Law, Social Insurance Law and other labor-related regulations in the PRC may increase our labor costand adversely affect our business and our results of operations.In June 2007, the National People’s Congress of China enacted the Labor Contract Law of the PRC (the “Labor Contract Law”), whichbecame effective in January 2008 and was subsequently amended in July 2013. The Labor Contract Law establishes more restrictions on andincreases costs for employers to dismiss employees, including specific provisions related to fixed-term employment contracts, temporaryemployment, probation, consultation with the labor union and employee assembly, employment without a contract, dismissal of employees,compensation upon termination and overtime work and collective bargaining. According to the Labor Contract Law, an employer is obliged to sign alabor contract with unlimited term with an employee if the employer continues to hire the employee after the expiration of two consecutive fixed-termlabor contracts, subject to certain conditions, or after the employee has worked for the employer for ten consecutive years. The employer is alsorequired to pay compensation to an employee if the employer terminates an unlimited-term labor contract. Such compensation is also required whenthe employer refuses to renew a labor contract that has expired, unless it is the employee who refuses to extend the expired contract. In addition,under the Labor Contract Law, if we decide to lay off a large number of employees or otherwise change our employment or labor practices, the LaborContract Law may also limit our ability to effect these changes in a manner that we believe to be cost-effective or desirable, which could adverselyaffect our business and results of operations.We cannot assure you that our employment practices do not or will not violate these labor-related laws and regulations. If we are deemed tohave been non-compliant with any such laws and regulations or to have failed to make adequate contributions to any social insurance schemes, wemay be subject to penalties and negative publicity, and our business, results of operations and prospects may be materially adversely affected.Table of Contents46Risks Related to Our ADSsThe market price for our ADSs may continue to be volatile.The trading prices of our ADSs have been, and are likely to continue to be, volatile and could fluctuate widely due to factors beyond ourcontrol. The trading prices of our ADSs ranged from US$28.58 to US$52.77 in 2021. In addition, securities markets may from time to timeexperience significant price and volume fluctuations that may or may not relate to our operating performance, which may have a material and adverseeffect on the market price of our ADSs. In particular, volatility in the PRC stock markets in the last few years has resulted in some volatility in thetrading prices of most China-based companies whose shares are traded in the United States. The market price for our ADSs is likely to be highlyvolatile and subject to wide fluctuations in response to factors including the following:●variation in our revenues, earnings, cash flow and data related to our user base or user engagement;●regulatory developments in our target markets affecting us, our clients or our competitors;●announcements of studies and reports relating to the quality of our products and services or those of our competitors;●changes in the performance or market valuations of other companies in the industries in which we operate;●actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;●changes in financial estimates by securities research analysts;●detrimental adverse publicity about us or our industry;●conditions in the industries in which we operate;●announcements by us or our competitors of new services, investments, acquisitions, strategic relationships, joint ventures or capitalcommitments;●addition or departure of key personnel;●fluctuations of exchange rates between the Renminbi and the U.S. dollar;●release or expiry of transfer restrictions on our outstanding ordinary shares or ADSs.●sales or perceived potential sales of additional ordinary shares or ADSs; and●potential litigation or regulatory investigations.In addition, the market prices for China-based companies listed in the United States have experienced volatility that might have beenunrelated to the operating performance of such companies. The substantial declines in the market prices of the securities of China-based companiesmay affect the attitudes of investors toward Chinese companies listed in the United States in general, which consequently may impact the market priceof our ADSs, regardless of our actual operating performance. In addition, any negative news or perceptions about inappropriate corporate governancepractices or corporate structure, fraudulent accounting or other matters of some China-based companies may also negatively affect the attitudes ofinvestors towards China-based companies in general, including us, regardless of whether we have engaged in any inappropriate activities.Table of Contents47The global financial crisis and the ensuing economic recessions in many countries have contributed and may continue to contribute toextreme volatility in the global stock markets, such as the large declines in share prices in the United States, mainland China, Hong Kong and otherjurisdictions at various times since 2008. These broad market and industry fluctuations may adversely affect the prices of our ADSs, regardless of ouroperating performance. In the past, shareholders of a public company have often instituted securities class action suits against us following periods ofinstability in the market price of that company’s securities. If we were involved in a class action suit, it could divert a significant amount of ourmanagement’s attention and other resources from our business and operations, which could harm our results of operations and require us to incursignificant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raisecapital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have amaterial adverse effect on our financial condition and results of operations.The volatility resulting from any of the above factors may affect the price at which you could sell the ADSs.Our dual-class voting structure will limit your ability to influence corporate matters and could discourage others from pursuing any change ofcontrol transactions that holders of our Class A ordinary shares and ADSs may view as beneficialOur co-founders, Ms. Jingbo Wang and Mr. Zhe Yin, have considerable influence over important corporate matters. Our ordinary shares aredivided into Class A ordinary shares and Class B ordinary shares. Each Class A ordinary share is entitled to one vote and each Class B ordinary shareis entitled to four votes on all matters that are subject to shareholder vote. Each Class B ordinary share is convertible into one Class A ordinary shareat any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Due to thedisparate voting powers associated with our two classes of ordinary shares, as of February 28, 2022, Ms. Jingbo Wang and Mr. Zhe Yin beneficiallyowned 28.4% of our share capital and controlled 60.8% of the aggregate voting power of our company. As a result, Ms. Jingbo Wang and Mr. Zhe Yinhave considerable influence over matters such as electing directors and approving material mergers, acquisitions or other business combinationtransactions, and they may take actions that are not in the best interest of us or our other shareholders. This concentrated control will limit your abilityto influence corporate matters and could also discourage others from pursuing any potential merger, takeover or other change of control transactions,which could have the effect of depriving the holders of our Class A ordinary shares and our ADSs of the opportunity to sell their shares at a premiumover the prevailing market price and could result in a reduction in the price of our ADSs.The dual-class structure of our ordinary shares may adversely affect the trading market for our ADSs.S&P Dow Jones and FTSE Russell have changed their eligibility criteria for inclusion of shares of public companies on certain indices,including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of totalvoting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multipleclass structures. As a result, the dual class structure of our ordinary shares may prevent the inclusion of our ADSs representing Class A ordinaryshares in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices orotherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our ADSs.Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adverselyaffect the value of our ADSs.Table of Contents48There is no assurance if and when we will pay dividends in the future. Therefore, you should not rely on an investment in our ADSs as a source offuture dividend income.Our board of directors has complete discretion as to whether to distribute dividends, subject to our Articles of Association and CaymanIslands law. In addition, our shareholders by ordinary resolution may declare a dividend, but no dividend may exceed the amount recommended byour board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premiumamount, provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due inthe ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends,if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount ofdistributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by ourboard of directors. We may not declare any dividend in the future, and even if we do so, any future dividend may be less than those historicallydeclared. Therefore, you should not rely on an investment in our ADSs as a source of future dividend income. Accordingly, the return on yourinvestment in our ADSs will likely depend entirely upon any future price appreciation of our ADSs. There is no guarantee that our ADSs willappreciate in value or even maintain their current price.Substantial future sales or perceived potential sales of our ADSs in the public market could cause the price of our ADSs to decline.Additional sales of our ADSs in the public market, or the perception that these sales could occur, could cause the market price of our ADSsto decline. The remaining Class A ordinary shares outstanding are available for sale, subject to volume and other restrictions as applicable underRules 144 and 701 under the U.S. Securities Act of 1933, or the Securities Act.Certain holders of our shares have the right to cause us to register under the U.S. Securities Act the sale of their shares. Registration of theseshares under the U.S. Securities Act would result in ADSs representing these shares becoming freely tradable without restriction under the U.S.Securities Act immediately upon the effectiveness of the registration. Sales of these registered shares in the form of ADSs in the public market couldcause the price of ADSs to decline.Techniques employed by short sellers may drive down the trading price of our ADSs.Short selling is the practice of selling securities that the seller does not own but rather has borrowed from a third-party with the intention ofbuying identical securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securitiesbetween the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than itreceived in the sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for thepublication of, negative opinions regarding the relevant issuer and its business prospects in order to create negative market momentum and generateprofits for themselves after selling a security short. These short attacks have, in the past, led to selling of shares in the market.Public companies listed in the United States that have substantially all of their operations in China have been the subject of short selling.Much of the scrutiny and negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting infinancial and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases,allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations and, in theinterim, are subject to shareholder lawsuits and/or SEC enforcement actions.It is not clear what effect such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whethersuch allegations are proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/ordefend ourselves. While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we canproceed against the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality. Such asituation could be costly and time-consuming and could distract our management from growing our business. Even if such allegations are ultimatelyproven to be groundless, allegations against us could severely impact our business operations and shareholder’s equity, and any investment in ourADSs could be greatly reduced or rendered worthless.Table of Contents49If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendationsregarding our ADSs, the market price for our ADSs and trading volume could decline.The trading market for our ADSs will be influenced by research or reports that industry or securities analysts publish about our business. Ifone or more analysts who cover us downgrade our ADSs, the market price for our ADSs would likely decline. If one or more of these analysts ceaseto cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price ortrading volume for our ADSs to decline.Our Memorandum and Articles contain provisions that could discourage a third party from seeking to obtain control of our company, whichcould adversely affect the interests of holders of our Class A ordinary shares and ADSs by limiting their opportunities to sell them at a premium.Our Memorandum and Articles contain certain provisions that could limit the ability of others to acquire control of our company, includingprovisions that grant to our board of directors the authority to establish and issue from time to time one or more series of preferred shares, and todesignate the price, rights, preferences, privileges and restrictions of such preferred shares, without any further vote or action by our shareholders andto determine, with respect to any series of preferred shares, the terms and rights of that series which may be greater than the rights of our Class Aordinary shares. The provisions could have the effect of depriving holders of our Class A ordinary shares or ADSs of the opportunity to sell theirshares or ADSs at a premium over the prevailing market price by discouraging third parties from seeking to obtain control of our company in a tenderoffer or similar transactions.You may not have the same voting rights as the holders of our Class A ordinary shares and may not receive voting materials in time to be able toexercise your right to vote.Except as described in this annual report and in the deposit agreement, holders of our ADSs will not be able to exercise voting rightsattaching to the shares represented by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee as theirrepresentative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receive voting materials in time to instructthe depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have theopportunity to exercise a right to vote.Your right to participate in any future rights offerings may be limited, which may cause dilution to your holdings and you may not receive cashdividends if it is impractical to make them available to you.We may from time to time distribute rights to our shareholders and other parties, including rights to acquire our securities. For instance, inconnection with the settlement of the Camsing Incident, we voluntarily made an ex gratia settlement offer to affected clients. An affected clientaccepting the offer shall receive restricted share units, which upon vesting will become Class A ordinary shares of our company. The maximumnumber of Class A ordinary shares to be issued by our company to these settled clients would account for approximately 11.4% of the total issuedshares of our company as of December 31, 2021, and account for approximately 6.4% of the voting rights of our company as of December 31, 2021.Such settlement plan will, and any future settlement plan may dilute your holdings in our company.However, we cannot make rights available to you in the United States unless we register both the rights and the securities to which the rightsrelate under the U.S. Securities Act or an exemption from the registration requirements is available. Under the deposit agreement, the depositary willnot make rights available to you unless both the rights and the underlying securities to be distributed to ADS holders are either registered under theU.S. Securities Act or exempt from registration under the U.S. Securities Act. We are under no obligation to file a registration statement with respectto any such rights or securities or to endeavor to cause such a registration statement to be declared effective and we may not be able to establish anecessary exemption from registration under the U.S. Securities Act. Accordingly, you may be unable to participate in our rights offerings and mayexperience dilution in your holdings.Table of Contents50The depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on our Class Aordinary shares or other deposited securities after deducting its fees and expenses. You will receive these distributions in proportion to the number ofClass A ordinary shares your ADSs represent. However, the depositary may, at its discretion, decide that it is inequitable or impractical to make adistribution available to any holders of ADSs. For example, the depositary may determine that it is not practicable to distribute certain propertythrough the mail, or that the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may decide not todistribute such property to you.Holders of our ADSs may be subject to limitations on transfer of your ADSs.Our ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time totime when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or registertransfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deems it advisable to doso because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any otherreason.We incur increased costs as a result of being a public company.As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the NYSE, impose various requirements on the corporate governancepractices of public companies. We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporateactivities more time-consuming and costlier. As we are no longer an “emerging growth company,” we expect to incur significant expenses and devotesubstantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the otherrules and regulations of the SEC. For example, as a result of becoming a public company, we need to increase the number of independent directorsand adopt policies regarding internal controls and disclosure controls and procedures. Operating as a public company will make it more difficult andmore expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incursubstantially higher costs to obtain the same or similar coverage. In addition, we incur additional costs associated with our public company reportingrequirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.We may be involved in class action lawsuits in the United States in the future. Companies that have experienced volatility in the volume andmarket prices of their shares have been subject to an increased incidence of securities class action litigation. We may be the target of this type oflitigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other businessconcerns, and, if adversely determined, could have a material adverse effect on our business, financial condition and results of operations.You may have difficulty effecting service of process and enforcing judgments obtained against us, our directors and our management, and theability of U.S. authorities to bring and enforce actions in the PRC may also be limited.We are an exempted company incorporated under the laws of the Cayman Islands. We conduct a substantial portion of our operations in thePRC and substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals orresidents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States. As a result, it maybe difficult or impossible for our shareholders to effect service of process or bring an action against us or against them in the United States in theevent that our shareholders believe that their rights have been infringed under the securities laws of the United States or otherwise. Even if ourshareholders are successful in bringing an action of this kind, the laws of the Cayman Islands, the PRC or other relevant jurisdiction may render ourshareholders unable to enforce a judgment against our assets or the assets of our directors and officers. In addition, the U.S. authorities may also havedifficulties in bringing and enforcing actions against us or our directors or officers in the PRC.Table of Contents51In addition, shareholder claims that are common in the United States, including securities law class actions and fraud claims, may be difficultto pursue as a matter of law or practicality in the PRC. Under the PRC Civil Procedures Law, foreign shareholders may originate actions based onPRC law against a company in the PRC for disputes if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meetother procedural requirements, including, among others, that the plaintiff must have a direct interest in the case, and that there must be a concreteclaim, a factual basis and a cause for the suit. It will be, however, difficult for U.S. and other shareholders to originate actions against us in the PRC inaccordance with PRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. and other shareholders,only by virtue of holding our ADSs, to establish a connection to the PRC for a PRC court to have jurisdiction as required under the PRC CivilProcedures Law.You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited becausewe are incorporated under Cayman Islands law, we conduct the majority of our operations in mainland China and all of our directors and officersreside outside the United States.We have been advised by Maples and Calder (Hong Kong) LLP, our counsel as to Cayman Islands law, that although there is no statutoryrecognition in the Cayman Islands of judgments obtained in the United States (and the Cayman Islands are not a party to any treaties for the reciprocalenforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law, recognize and enforce a foreign moneyjudgment of a foreign court of competent jurisdiction without reexamination of the merits underlying the dispute based on the principle that ajudgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the liquidated sum for which judgment has been given,provided certain conditions are met. For a foreign money judgment to be enforced in the Cayman Islands, such judgment must be final and conclusiveand for a liquidated sum, and must not be (i) in respect of taxes or a fine or penalty or similar fiscal or revenue obligations, (ii) inconsistent with aCayman Islands judgment in respect of the same matter, (iii) impeachable on the grounds of fraud or (iv) obtained in a manner, nor be of a kind theenforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well beheld to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being broughtelsewhere.Our corporate affairs are governed by our Memorandum and Articles, as amended and restated from time to time, and by the Companies Actand the common law of the Cayman Islands. The rights of shareholders to take legal action against us and our directors, actions by minorityshareholders and the fiduciary duties of our directors are to a large extent governed by the common law of the Cayman Islands. The common law ofthe Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law,which provides persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of ourdirectors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. Inparticular, the Cayman Islands has a less developed body of securities laws than the United States and provides significantly less protection toinvestors. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in U.S. federal courts.In addition, as a company primarily operating in mainland China, there are significant legal and other obstacles for U.S. authorities toobtaining information needed for investigations or litigations. Similar limitations apply to the pursuit of actions against individuals, including officers,directors and individual gatekeepers, who may have engaged in fraud or other wrongdoing. Moreover, local authorities often are constrained in theirability to assist U.S. authorities and overseas investors more generally.As a result, our public shareholders and holders of our ADSs may have more difficulty in protecting their interests through actions against us,our management, our directors or our major shareholders and limited remedies than shareholders of a corporation incorporated in a jurisdiction in theUnited States would have.Table of Contents52It may be difficult for overseas regulators to conduct investigations or collect evidence within China.Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law orpracticality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatoryinvestigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with thesecurities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with thesecurities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanisms.Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securitiesregulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretations ofor implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conductinvestigation or evidence collection activities within China may further increase difficulties you may face in protecting your interests.If a United States person is treated as owning at least 10% of our ADSs or ordinary shares, such person may be subject to adverse United Statesfederal income tax consequences.If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our ADSs orordinary shares, such person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation,” or CFC, in ourgroup. Because our group includes one or more United States subsidiaries that are classified as corporations for United States federal income taxpurposes, in certain circumstances we could be treated as a CFC and certain of our non-United States subsidiary corporations could be treated asCFCs (regardless of whether or not we are treated as a CFC).A United States shareholder of a CFC may be required to annually report and include in its United States taxable income its pro rata share of“Subpart F income,” “global intangible low-taxed income” and investments in United States property by CFCs, whether or not we make anydistributions. An individual who is a United States shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreigntax credits that would be allowed to a corporation that is a United States shareholder. A failure to comply with these reporting obligations may subjecta United States shareholder to significant monetary penalties and may prevent starting of the statute of limitations with respect to such shareholder’sUnited States federal income tax return for the year for which reporting was due. We cannot provide any assurance that we will monitor whether weare or any of our non-United States subsidiaries is treated as a CFC or whether any investor is treated as a United States shareholder with respect to usor any of our CFC subsidiaries, or that we will furnish to any United States shareholders information that may be necessary to comply with theaforementioned reporting and tax paying obligations. A United States investor should consult its tax advisor regarding the potential application ofthese rules in its particular circumstances.There can be no assurance that we will not be a passive foreign investment company for U.S. federal income tax purposes, which could result inadverse U.S. federal income tax consequences to U.S. Holders of our ADSs or ordinary shares.We will be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes for any taxable year if, applying theapplicable look-through rules, either: (1) at least 75% of our gross income for such year is passive income or (2) at least 50% of the value of our assets(generally determined based on an average of the quarterly values of the assets) during such year is attributable to assets that produce passive incomeor are held for the production of passive income.Although the application of the PFIC rules is unclear in many important respects and the required calculations yield results very close to theline, based on the market price of our ADSs, the value of our assets and the nature and composition of our income and assets, we believe that we werenot a PFIC for our taxable year ended December 31, 2021. However, we believe we were a PFIC for our taxable year ended December 31, 2020.Table of Contents53PFIC status for a taxable year is based on an annual determination that cannot be made until the close of such taxable year and involvesextensive factual investigation, including ascertaining the fair market value of all of our assets on a quarterly basis and the character of each item ofincome that we earn during the relevant taxable year, and is subject to uncertainty in several respects (including with respect to our treatment of ourConsolidated Affiliated Entities as being owned by us for United States federal income tax purposes). The determination of whether we will be aPFIC for any taxable year may also depend in part upon the value of our goodwill and other unbooked intangibles not reflected on our balance sheet(which may depend upon the market price of our ADSs or ordinary shares from time to time, which may fluctuate significantly) and also may beaffected by how, and how quickly, we spend our liquid assets and the cash we generate from our operations and raise in any offering. Accordingly,there can be no assurance that we will not be a PFIC for our current or any future taxable year. The U.S. Internal Revenue Service, or the IRS, doesnot issue rulings with respect to PFIC status, and we cannot assure you that the IRS, or a court, will agree with any determination we make. Forexample, because there are uncertainties in the application of the relevant rules, it is possible that the IRS may successfully challenge ourclassification of certain income and assets as non-passive, which may result in our being a PFIC for the taxable year ended December 31, 2021.If we are a PFIC for any taxable year during which a U.S. Holder (as defined in “Item 10. Additional Information—E. Taxation—U.S.Federal Income Tax Considerations”) holds our ADSs or ordinary shares, such U.S. Holder may be subject to certain adverse U.S. federal income taxconsequences and related reporting requirements. See “Item 10. Additional Information—E. Taxation—U.S. Federal Income Tax Considerations—Passive Foreign Investment Company.”The Common Reporting Standard could subject us to certain new information reporting and withholding requirements.The Organization for Economic Cooperation and Development has developed a Common Reporting Standard (the “CRS”) and modelcompetent authority agreement to enable the multilateral and automatic exchange of financial account information, which were adopted by manyjurisdictions. Effective on January 1, 2017, CRS and its implementing legislations in mainland China and Hong Kong require financial institutions toidentify and report the tax residency and account details of non-resident customers to the relevant authorities in jurisdictions adhering to CRS. OnSeptember 6, 2018, the arrangements for the multilateral and automatic exchange of financial account information between mainland China and HongKong officially came into effect. Hong Kong and mainland China conducted the first automatic exchange of financial account information inSeptember 2018, and many jurisdictions (including Hong Kong) have promised to implement the multilateral and automatic exchange of financialaccount information. While CRS was modeled on the U.S. Foreign Account Tax Compliance Act (the “FATCA”), the scope, coverage and volumeunder CRS are significantly greater than that under FATCA, which requires non-U.S. institutions to report to the IRS if U.S. tax payers have anaccount with the non-U.S. financial institution and have met the standard of the overseas financial assets. As the reporting requirement under CRS isburdensome, we cannot assure you that we will not be adversely affected by the information reporting and withholding requirements imposed by CRSand its implementing legislations in mainland China, Hong Kong and other jurisdictions subject to CRS in which we conduct or may conduct businessin the future.We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and anti-corruption laws in other applicable jurisdictions.As an NYSE listed company with operations in various countries, we are subject to the U.S. Foreign Corrupt Practices Act of 1977 (the“FCPA”) and other anti-corruption laws and regulations in applicable jurisdictions. The FCPA generally prohibits companies and their intermediariesfrom making improper payments to government officials for the purpose of obtaining or retaining business. Companies subject to the FCPA may beheld liable for actions taken by partners or representatives. We may be subject to these and similar anti-corruption laws in other applicablejurisdictions. Failure to comply with legal requirements could expose us to civil and/or criminal penalties, including fines, prosecution and significantreputational damage, all of which could materially and adversely affect our business, results of operations, including our relationships with ourclients, and our financial results. Compliance with the FCPA and other applicable anti-corruption laws and related regulations and policies imposespotentially significant costs and operational burdens on us. Moreover, the compliance and monitoring mechanisms that we have in place, includingour Code of Ethics and our anti-bribery and anti-corruption policy, may not adequately prevent or detect all possible violations under applicable anti-bribery and anti-corruption legislation.Table of Contents54We are a foreign private issuer within the meaning of the rules under the U.S. Exchange Act, and as such we are exempt from certain provisionsapplicable to United States domestic public companies.Because we are a foreign private issuer under the U.S. Exchange Act, we are exempt from certain provisions of the securities rules andregulations in the United States that are applicable to U.S. domestic issuers, including:●the rules under the U.S. Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with theSEC;●the sections of the U.S. Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registeredunder the U.S. Exchange Act;●the sections of the U.S. Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liabilityfor insiders who profit from trades made in a short period of time; and●the selective disclosure rules by issuers of material nonpublic information under Regulation FD.We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish ourresults on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the NYSE. Press releases relating to financialresults and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to theSEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not beafforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer.As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governancematters that differ significantly from NYSE corporate governance listing standards; these practices may afford less protection to shareholdersthan they would enjoy if we complied fully with NYSE corporate governance listing standards.As a Cayman Islands company listed on the NYSE, we are subject to NYSE corporate governance listing standards. However, the NYSErules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practicesin the Cayman Islands, which is our home country, may differ significantly from the NYSE corporate governance listing standards. Shareholders ofCayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of listsof shareholders of these companies. Our directors have discretion under our Articles to determine whether or not, and under what conditions, ourcorporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it moredifficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from othershareholders in connection with a proxy contest. Certain corporate governance practices in the Cayman Islands, which is our home country, differsignificantly from requirements for companies incorporated in other jurisdictions such as the United States. To the extent we choose to follow homecountry practice with respect to corporate governance matters, our shareholders may be afforded less protection than they otherwise would under rulesand regulations applicable to U.S. domestic issuers.Item 4. Information on the CompanyA.History and Development of the CompanyWe are a leading and pioneer wealth management service provider in China offering comprehensive one-stop advisory services on globalinvestment and asset allocation primarily for HNW investors.We are an exempted company incorporated with limited liability under the laws of the Cayman Islands with subsidiaries and affiliatedentities primarily in China. In August 2005, our founders started our business when Noah Investment was incorporated. We exercise effective controlover Noah Investment and its subsidiaries through Contractual Arrangements. In 2007, Sequoia Capital China, a well-known venture capital firmbased in China, invested in our business. In November 2010, we were listed on the New York Stock Exchange as the first independent wealthmanagement company from China.Table of Contents55We commenced our asset management business in 2010 when Gopher Asset Management Co., Ltd. and its subsidiaries (collectively,“Gopher Asset Management” or “Gopher”) were established. The business scope of Gopher covers private equity and venture capital investment, realestate investment, public securities investment, and multi-strategy investment. In 2012, Noah Upright (formerly known as Noah Upright (Shanghai)Fund Investment Consulting Co. Ltd.), a wholly owned subsidiary of Noah, obtained the “No. 001” fund distribution license issued by the ChinaSecurities Regulatory Commission (the “CSRC”) in China.We officially launched our overseas business expansion in February 2012. We first established Noah HK and obtained Type 1 (Dealing inSecurities), Type 4 (Advising on Securities), and Type 9 (Asset Management) licenses from the Hong Kong Securities and Futures Commission,Hong Kong SFC or the SFC, as well as an insurance broker license in Hong Kong. Subsequently, we further expanded our overseas presence bylaunching offices in Taiwan, Silicon Valley, New York and Singapore. We have obtained and maintained family trust licenses in Hong Kong andJersey Island, investment advisor license and insurance brokerage license in the United States, as well as capital market services license, family trustlicense and exempt financial advisor license in Singapore.Our principal executive offices are located at Building 2, 1687 Changyang Road, Yangpu District, Shanghai, China and Building C and F, 32Qinhuangdao Road, Yangpu District, Shanghai, China. In May 2021, we purchased office premises with a gross floor area of approximately 72,000square meters at 218, Shaohong Road, 1226 and 1256, South Shenbin Road, Minhang District, Shanghai, which will be used as our new headquarters.Our telephone number is (86) 21 8035-9221. Our registered office in the Cayman Islands is located at the offices of Maples Corporate ServicesLimited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.B.Business OverviewFounded in 2005, we are a leading and pioneer wealth management service provider in China offering comprehensive one-stop advisoryservices on global investment and asset allocation primarily for HNW investors. Substantially all our RMB-denominated financial products aremanaged and distributed in China, and most of our foreign currency denominated products are managed and distributed through our Hong Kongsubsidiary, Noah HK, which serves as our offshore booking center.With over 15 years of operating experience, we continue to distribute and manage financial products and provide comprehensive financialservices to our HNW and ultra HNW clients globally, while at the same time constantly optimizing and improving our risk and asset managementprocedures to strengthen our core competitiveness.Our Business ModelWe provide comprehensive financial services through our subsidiaries and Consolidated Affiliated Entities, comprising our wealthmanagement business, asset management business and other businesses, to our clients. In 2021, our wealth management business, asset managementbusiness, and other businesses contributed to 74.2%, 24.2% and 1.6% of our total net revenues, respectively.●Wealth management business. Through the licensed distribution channels operated by our subsidiaries, we offer various investmentproducts, including primarily domestic and overseas mutual fund products, private secondary products and other products, on behalf ofour third-party product partners and Gopher, our asset management arm. We also provide customized value-added financial services toour clients, including investor education and trust services.●Asset management business. Through Gopher, our asset management arm, we manage our clients’ investments in private equity, realestate, public securities, multi-strategy and other investment products. We conduct our domestic asset management business through ourConsolidated Affiliated Entities, and overseas asset management business through our subsidiaries Noah HK and Gopher GP.●Other businesses. This segment mainly includes lending services whereby we make secured loans to creditworthy clients through oursubsidiaries. Since the third quarter of 2019, we have decreased lending and other businesses as we strategically shifted focus to ourcore wealth management and asset management businesses.Table of Contents56Historically, we also offered private equity products through our wealth management business. Following the enactment of the SupervisionMeasures on Distribution Institutions of Publicly-Raised Securities Investment Fund, or the Supervision Measures in October 2020, which providesthat independent fund distribution institutions shall specialize in the distribution of funds that invest in public securities, our wealth managementbusiness ceased offering private equity products, and now primarily focuses on distributing mutual fund products and private secondary products. Wenow provide private equity products only through our asset management arm, Gopher, which forms funds and raises capital directly from our clients.We have an innovative business model tailored to the needs of our clients, characterized by (i) our unique ecosystem with leading product partners, including fund managers and top PE/VC general partners, (ii) a diversified product mix that contributes to a favorable revenue structure with competitive profit margins and delivers successful investment results, and (iii) significant synergies and high operating efficiency. We are a pioneer in China’s HNW wealth management services industry, and are the first wealth manager to have built an ecosystem with leading private secondary funds and PE/VC firms in China. Leveraging our early-mover advantage, deep understanding of the industry, strong execution capabilities and rigorous risk management, we have developed a comprehensive set of product offerings in collaboration with our product partners. Set forth below is a diagram illustrating our unique ecosystem:1Following the enactment of the Supervision Measures in October 2020, we ceased offering private equity products through our wealthmanagement business, and we now provide private equity products only through our asset management arm, Gopher, which forms funds andraises capital directly from our clients.2Others include insurance products, multi-strategies products and others.Our ClientsWe primarily serve Chinese HNW and ultra HNW clients who reside in mainland China or overseas with total investable assets exceedingRMB6.0 million. In addition to individual clients, we also strategically provide services to certain institutional clients, including entities affiliatedwith such individuals, such as their family offices, as well as other institutional investors. In 2021, we started to provide mutual funds and relatedwealth management services to satisfy our institutional clients’ money market and liquidity management demands through our mutual fund SaaSplatform, “Smile Treasury”, operated by our PRC subsidiary Noah Upright. We have attracted a loyal and high quality client base, with approximately42,764 active clients (including mutual fund-only clients) as of December 31, 2021.Table of Contents57Our client base has experienced significant growth in recent years. The table below sets forth certain information regarding our clients as ofor for the periods indicated.As of December 31, 2019 2020 2021Number of active clients (excluding mutual fund-only clients) 14,538 12,161 12,831Number of active clients (including mutual fund-only clients) 31,495 34,213 42,764In order to provide targeted and personalized services to our clients, we classify our clients into five categories based on their AUA with us,namely ivory, gold, platinum, diamond, and black card clients, with the black card clients being the highest level. The number of our black cardclients and diamond card clients reached 1,722 and 6,475 as of December 31, 2021, with an AUA per client of RMB76.1 million (US$11.9 million)and RMB16.5 million (US$2.6 million), respectively.The table below sets forth the number of our core clients as of the periods indicated.As of December 31,2019(3)2020(3)2021Number of black card clients(1) 1,139 1,250 1,722Number of diamond card clients(2) 5,235 5,685 6,475(1)Black card clients refer to clients with an AUA of over RMB50 million (approximately US$7 million).(2)Diamond card clients refer to clients with an AUA of over RMB10 million (approximately US$1.4 million) but less than RMB50 million(approximately US$7 million).(3)Starting from the second quarter of 2021, in order to more accurately identify our core client group, we have made certain adjustments to ourclient membership AUA calculation mechanism to align with the AUA basis for charging recurring service fees. Specifically, private equityproducts are calculated based on subscription amount while public securities products are calculated based on NAV under the new mechanism.We have also retrospectively adjusted the calculation for the prior periods to conform to the current mechanism.We have a loyal client base. Our repeat client rate was 64.7% in 2021.Client Onboard Process and Key Contractual TermsWhen a client opens an account with us, we require the client to complete our preliminary know-your-client (“KYC”) and anti-moneylaundering (“AML”) review process, including submitting documents for proof of their identities and declaring their source of funds for investments,for the account registration. We enter into a set of standard client service agreements with our clients at account opening. Such client serviceagreements set forth rights and obligations of our clients when using service provided by us and authorizes us to collect and use certain personalinformation of our clients.They will also receive an investor right notification form setting forth their interest and risks in purchasing such products. We require ourclients to complete a full set of KYC and AML procedures designed for the specific product, including the procedures evaluating their levels ofinvestable assets and risk tolerance.Table of Contents58Our Key Products and ServicesOur Wealth Management BusinessWe provide diversified investment products, customized asset allocation and value-added services to our clients inside and outside of Chinafor our wealth management business through our subsidiaries. Our dedicated relationship managers work with clients to build an asset allocationobjective and a dynamic investment portfolio for each of them with the diversified investment products we offer, aiming to meet our clients’ wealthmanagement needs, minimizing their risks while generating attractive returns. Our clients benefit from our comprehensive services, expertise andcapacities, including, among others, investor education services and trust services. In 2019, 2020 and 2021, net revenues contributed by our wealthmanagement business were RMB2,319.3 million, RMB2,366.3 million and RMB3,194.9 million (US$501.3 million), representing 68.4%, 71.6% and74.2% of our total revenues, respectively.Revenue ModelFor our wealth management business, we generate revenue primarily from the offering of investment products and services to our clientsthrough our subsidiaries in four ways: (i) one-time commissions paid by funds managed by our product partners, (ii) recurring service fees paid by ourproduct partners or funds managed by them over the duration of the investment product, (iii) sharing of a portion of the performance-based incomeearned by product partners who manage the products, and (iv) revenue from comprehensive services we provide, especially the revenue from ourinvestor education business. We also earn one-time commissions from insurance companies by referring clients to purchase insurance products fromthem, and recognize revenue when the underlying insurance contracts become effective. We do not bear any loss from our clients’ investments nor dowe provide guarantees of return with respect to the products we distribute, in accordance with the investment agreements with our clients.Set forth below is a diagram illustrating the business and revenue model of our wealth management business:Investment Product OfferingsWe have a proven track record of consistently pioneering a broad array of innovative and high-quality investment products and serviceofferings which provide comprehensive and tailored investment opportunities to meet the specific wealth management requirements of our clients.During the three years ended December 31, 2019, 2020 and 2021, the domestic and overseas investment products provided by our product partnersand Gopher primarily consist of:●mutual fund products, which are publicly-raised, public securities investment funds;●private secondary products, which are privately-raised investment funds with underlying assets consisting of publicly listed securitiesand bonds in the secondary market;Table of Contents59●private equity products, including investments in (i) various PE/VC funds sponsored by third party domestic and international assetmanagement firms, (ii) real estate equity funds, and (iii) PE/VC funds managed by Gopher, including FoFs, feeder funds, S funds anddirect and co-investment funds. Following the enactment of the Supervision Measures in October 2020, we ceased offering privateequity products through our wealth management business, and we now provide private equity products only through our assetmanagement arm, Gopher, which forms funds and raises capital directly from our clients;●other products we distribute or provide or manage but cannot be classified into any of the above product categories, such as insuranceand multi-strategy products.The table below sets out the aggregate transaction value of the different types of investment products that we distributed during the periodsindicated:Year Ended December 31,20192020 2021 RMB % RMB % RMB US$ %(in millions, except for percentages)Product type Mutual fund products 15,511 19.8 37,981 40.1 37,169 5,833 38.2Private secondary products 10,867 13.8 35,162 37.1 37,776 5,928 38.9Private equity products 14,279 18.2 17,876(1) 18.9 18,069(1) 2,835 18.6Other products 37,867 48.2 3,717 3.9 4,189 657 4.3All products 78,524 100.0 94,736 100.0 97,203 15,253 100.0(1)Following the enactment of Supervision Measures in October 2020, we ceased offering private equity products through our wealth managementbusiness, and we now provide private equity products only through our asset management arm, Gopher, which forms funds and raises capitaldirectly from our clients. In particular, in 2020, a total of RMB5.2 billion private equity products were offered by Gopher. The figures areincluded in the table for illustration and comparison purposes only.Overseas Wealth ManagementIn addition to our well-established domestic and RMB-denominated product offerings, we also offer a variety of overseas productsdenominated in a variety of currencies to our clients. The diversification of our investment product offerings distinguishes us from many of ourcompetitors in China, who typically only have domestic and RMB-denominated product offerings. In 2021, revenue from our overseas productsaccounted for 23.4% of our total revenues.Comprehensive ServicesIn addition to the investment products we provide to our clients, we develop and provide customized value-added financial and relatedservices to our clients to better serve their needs.●Investor Education: We primarily provide our investor education services under the brand name “Enoch Education”, organizingvarious types of online and offline training programs to our individual clients and their families. These programs include wealthplanning, market insights and entrepreneurship camps. We charge attendees fees for these events primarily based on the duration (whichtypically last up to one year) and location of each program.Since the launch of our investor education services, we have organized more than 400 training sessions, which have attracted more than20,000 investors. We believe that Enoch Education is an important tool for building our business as it raises the financial sophisticationof our clients, enables us to deepen our relationships with them, and broadens the clients’ investment knowledge, all of which arebelieved to further enhance their loyalty and willingness to invest with us, especially for long-duration products.Table of Contents60●Trust Services: We currently offer international trust services in Hong Kong, Jersey Island and Singapore through Ark Trust (HongKong) Limited (“Ark Trust”), Ark Trust (Jersey) Limited and Ark Trust (Singapore) Ltd., respectively. Ark Trust was founded in 2014and is one of the first family trust service companies registered outside of mainland China among the independent wealth managementcompanies in China. Ark Trust provides a full range of services to our clients, including family trust and fiduciary services, employeestock ownership plans, charitable trust services and wealth planning services.Our Asset Management BusinessTo further address the asset allocation needs of our clients, we started our asset management business in 2010 under the brand name Gopher.We manage investments with underlying assets in mainland China through our Consolidated Affiliated Entities and outside of mainland Chinathrough our subsidiaries Noah HK and Gopher GP, denominated in Renminbi or other currencies. Our AUM were RMB170.2 billion, RMB152.8billion and RMB156.0 billion (US$24.5 billion), respectively, as of December 31, 2019, 2020 and 2021.Revenue ModelWe generate revenue from our asset management business through our Consolidated Affiliated Entities and certain overseas subsidiariesprimarily in the form of (i) one-time commissions from funds managed by Gopher when the investment product was distributed directly by Gopher,(ii) recurring service fees paid by funds managed by Gopher over the duration of the investment products and (iii) performance-based income fromfunds for which we serve as the fund managers.Set forth below is a diagram illustrating the business and revenue model of our asset management business:Given that over 80% of Gopher’s AUM as of December 31, 2021 consisted of private equity investments which generally have a longduration with no contractual redemption rights or high redemption costs as provided under the relevant subscription agreements, we believe that therecurring service fees we earn are relatively predictable and sustainable. Starting from 2021, as more PE/VC funds in Gopher’s AUM haveapproached their respective exit windows following the investment period, we expect to collect more performance-based income from those fundsthat achieve excess returns.Investment StructureGopher establishes fund vehicles (the “Gopher Funds”) as investment vehicles to raise capital from clients and manage the investments. Theinvestment portfolio of Gopher Funds includes primarily (i) private equity investments, including equity investments into private companies andcommitments in private equity funds; (ii) public securities investments, including direct investments in public securities and commitments in moneymarket funds, mutual funds and private secondary funds. In particular, Gopher launched its target-strategy products in 2021, a series of NAV-basedproducts utilizing different investment strategies aiming to deliver stable investment returns with relatively low volatilities, to meet clients’investment targets; (iii) real estate investments, typically in the form of equity of private companies holding such investments; and (iv) multi-strategyand other investments, primarily consisting of multi-asset portfolios and family office accounts.Table of Contents61We act as the fund manager and/or general partner for the Gopher Funds and collect management fees and performance-based income. Wealso invest in certain Gopher Funds as general partners, and our equity interests in each individual fund are normally less than 3%. The followingtable sets forth the typical structure of a Gopher Fund:Product OfferingsAs a multi-asset management service provider, Gopher invests in different categories of assets, including:●private equity investments, including investments in the leading domestic and overseas private equity funds through FoFs, feeder fundsand S funds, as well as direct and co-investments in sectors such as TMT, financial services and healthcare. For the year endedDecember 31, 2021, the AUM of Gopher’s private equity investments was RMB130.9 billion (US$20.5 billion), covering 84 GopherPE/VC FoFs, and directly or indirectly through these funds, invested in more than 7,000 companies.FoFs. In 2010, we established the first market-oriented FoF by private capital in China. Our asset management business has historicallyfocused primarily on investments in FoFs, whereby the Gopher Funds invest in one or more third-party managed funds, which directlyor indirectly invest in portfolio companies or other investment portfolios. The graph below illustrates the portfolio structure of a simpleFoF. Major Gopher PE/VC FoFs typically involve several layers of FoFs and/or feeder funds structure. Under such structure, multipleGopher Funds are set up as intermediate investment vehicles, which are managed by Gopher for the purpose of asset and ownershipsegregation.Table of Contents62Feeder funds. We also manage feeder funds that invest in certain single third-party managed funds. Such third-party managed fundsusually have multiple feeder funds as capital sources. Following the enactment of the Supervision Measures, we leverage primarilyfeeder funds to raise capital for our PE/VC investment partners. The graph below illustrates the investment structure of our feeder fundsthat invest in single third-party managed funds.S funds. In May 2013, we introduced the first S fund to HNW and ultra HNW investors in China. The S funds explore investmentopportunities by investing in pre-existing limited partner commitments in the private equity market, which allows private equityinvestors to sell their investments in private equity funds. S funds typically invest in more diversified investment portfolios than primaryPE funds, and typically deploy capital faster and have a shorter investment term than other private equity investments ranging from 2years to 3 years. The graph below illustrates the portfolio structure of our S funds.●Public securities investments, mainly including Target Strategy, namely a series of NAV-based products utilizing multiple investmentstrategies to manage underlying assets consisting of publicly listed securities, FoF and MoM investments, as well as direct investmentsin listed companies. Gopher also launched bond funds in 2019. Gopher has a dedicated investment team managing Target Strategyproducts, which consist of active, balanced and conservative types of funds, utilizing diverse strategies with an aim to create long-termand stable investment returns with relatively low volatility. For the MoM approach, we as the fund manager choose third-party fundmanagers for certain investment programs of the Gopher Funds and monitor their performances. The third-party fund managersspecialize in utilizing different investment strategies to diversify risks and achieve different investing goals amid market volatilities.These third-party fund managers receive an incentive service fee.Table of Contents63●Real estate investments, including funds investing in residential as well as commercial real estate properties such as office buildings andshopping malls, in the form of both credit and equity investments. As of December 31, 2021, our real estate investments primarilyincluded two office buildings in Shanghai through a FoF investment, namely Gopher Aroma Plaza and Gopher Garden Place. Our realestate investments as of December 31, 2021 also included two rental apartment projects in the United States.●Multi-strategy and other investments. Our multi-strategy investments primarily include multi-asset portfolios and family officeaccounts. We use asset allocation principles to build multi-asset portfolios and multi- or single-family office accounts. Starting from thethird quarter in 2019, we stopped investing in private credit products and started to redeem all outstanding private credit products. Bythe end of the second quarter in 2021, Gopher had successfully exited approximately RMB30 billion of private credit productinvestments, marking an important milestone of transformation to NAV-based products.For a discussion of the change of our wealth management product mix during the three years ended December 31, 2019, 2020 and 2021, see“Item 5. Operating and Financial Review and Prospects—A. Operating Results—Factors Affecting Our Results of Operations—Key PerformanceIndicators—AUM.”Overseas Asset ManagementIn response to our clients’ increasing demands for overseas investment opportunities, we have cooperated with more overseas partners andincreased the number of non-RMB-denominated funds of funds offered. We have built a global Gopher platform to identify and source non-RMB-denominated investment products for onshore and offshore individuals, with our Hong Kong office focusing on global investments, Silicon Valleyoffice focusing on technology-related venture capital funds and direct investment opportunities, and New York office focusing on US real estateinvestments. As of December 31, 2021, the overseas AUM of Gopher reached RMB28.4 billion (US$4.5 billion), representing 18.2% of the totalAUM for our asset management business.Our Portfolio CompaniesOur Gopher Funds strive to invest into companies with great growth potential through private equity investments to generate attractiveinvestment returns. Over the years, our Gopher Funds have invested in many portfolio companies that have achieved outstanding performance andhence generating more performance-based income, which demonstrates our strong asset management capabilities. As of December 31, 2021,Gopher’s AUM included 84 Gopher PE/VC FoFs, which in aggregate invested in more than 200 funds managed by third parties, and directly orindirectly through these funds, invested in more than 7,000 companies, many of which had achieved substantial growth. As of December 31, 2021,more than 400 companies Gopher invested in had successfully become listed companies and more than 100 companies had grown into unicorncompanies with a valuation over US$1.0 billion.Our Product Partners and Investment PartnersWe have established extensive business relationships with reputable product partners and investment partners both in China and globally, inconnection with our distribution of investment products. Our product partners and investment partners are typically the issuers or managers ofinvestment products. The product partners and investment partners with which we collaborate encompass a variety of institutions and companies,mainly including PE/VC general partners, mutual fund managers and private secondary fund managers. We distribute investment products providedby these product partners directly, and for our asset management business, our Gopher Funds invest into the investment products provided by ourinvestment partners, whereby we offer limited partnership commitments to our Gopher Funds as asset management products to our clients. In certainoccasions, our Gopher Funds also co-invest with our investment partners into portfolio companies directly. During the three years ended December31, 2019, 2020 and 2021, we collaborated with over 100 product partners and investment partners in aggregate. A certain partner can either act as aproduct partner for our wealth management business or an investment partner for our asset management business.We have a strong presence in private equity investment industry, and has built collaborative relationships with 15 out of the top 20 VC fundmanagers as named in the “2021 Annual List of Chinese Venture Capital Investment Institutions” in December 2021 by CV Info, one of China’sleading third-party private equity information providers, and nine of the top 20 international PE firms as named in “Private Equity International’s PEI300 list” for 2021.Table of Contents64In addition to leading PE/VC firms, we also collaborate with other financial institutions to provide a variety of investment products.Specifically, we currently collaborate with private secondary fund managers, such as Perseverance Asset Management and Greenwoods, as one oftheir exclusive distribution channels for public securities. Our onshore mutual fund platform, “Fund Smile”, currently works with all of the top 20non-money market funds and 47 out of the top 50 non-money market funds in China in terms of AUM as of the end of 2021.Key Contractual Terms with Product Partners for Our Wealth Management BusinessWe enter into service agreements with the product partners for the majority of the products we distribute through our wealth managementbusiness. These service agreements usually expire upon the redemption of the underlying investment products. Under these agreements, we typicallyundertake to provide the counterparty with services relating to our clients’ purchases of the relevant products. Such services generally includeproviding our clients with information on the relevant products, evaluating the financial condition and risk profiles of those clients who desire topurchase the relevant products, educating them on the transaction documentation as well as furnishing other assistance to facilitate theircommunications with the product partners.Under our service agreements with respect to our fund products distributed through our wealth management business, we also undertake toassist the product partners to maintain investor relationships by providing our clients who have purchased the relevant products with various post-investment services, including investor communications assistance and periodic portfolio management reports.Key Contractual Terms with Investment Partners for Our Asset Management BusinessAs for the product partners we collaborate within our asset management business through FoF investments, our Gopher Fund invest in thefunds set up and managed by the investment partners. Our investment partner set up fund vehicles to raise capital, which subsequently invest intoasset portfolios. In connection with such investment, Gopher Fund enters into a limited partnership agreement as a limited partner of the fund and theinvestment partner as the general partner of the fund. In accordance with the limited partnership agreements, our investment partner actively managesthe investment on behalf of Gopher Fund and other limited partners. Gopher Fund is obligated to provide capital to the fund in due course. Thelimited partnership agreements set forth the duration and redemption terms of the fund.In case of co-investment with our investment partners, Gopher Fund and the fund managed by our investment partners both invest in theinvestment portfolio directly. For such investments, we generally enter into a set of agreements in connection with such investments including sharepurchase agreement and shareholders’ agreements to protect the interest of our clients and us.Product Development and SelectionWe have a rigorous product development and selection process is key to our business. In light of the tightened regulatory environment inChina in recent years, we have been further enhancing our comprehensive risk management system.Product Development and Selection PhilosophyOur product development team focuses on meeting the evolving demands of clients by balancing the investment return, investment risk, andliquidity of the products we offer. For our wealth management business, our team is primarily responsible for selection of wealth managementproducts to be distributed by our wealth management segment, whereby for our asset management business, our team strives to develop and structurethe investment products offered by Gopher. Our product selection efforts are guided by our comprehensive research, which provides a top-downreview on our overall tactical asset allocation strategy at least quarterly, based on which our product team develops strategies in each asset class.We strive to provide a variety of investment products to our clients. Based on our research, we strategically select products that capturescurrent investment opportunities, as well as products of stable long-term performance. We believe such product mix allows our investors to customizetheir investment portfolio based on their risk appetite and return expectations.Table of Contents65As for our asset management business, Gopher’s investment philosophy focuses on identifying and capturing opportunities from emergingtrends in the market, evaluating a wide range of assets and investment opportunities from numerous investment partners, and constructing investmentportfolios through vigorous due diligence process. Moreover, we seek to minimize volatility of the performance of our investments by investing in awide range of asset classes and investment structures, which enhances the sustainability of our revenue streams under various economiccircumstances.Product Development and Selection ProcessEach product offered to our clients, including the investment products we distribute and asset management products we offer, must gothrough a strictly implemented product screening procedure as indicated in the diagram below:Table of Contents66Our product development and selection process involves three key stages: project screening, project evaluation and risk control. In-houseexperts and professionals, including high-level management team members from our legal department, risk management department, compliancedepartment and product department will gather periodically to carefully screen and evaluate each product we offer and distribute.●In the project screening stage, our professionals select the potential product or the proposed investment portfolio from a broad range ofinvestment products and review our internal due diligence findings to determine whether the product may be suitable for investmentand/or distribution to our clients. A prospective product or investment needs to be approved by at least a majority of the membersparticipating in the project screening meeting before the product or investment moves onto the next stage.oFor investment products, we have adopted an effective screening mechanism that analyzes and evaluates the proposed investmentproduct or portfolio both qualitatively and quantitatively. To facilitate the screening of the fund products, we maintain a whitelist offund product providers that we update on real-time basis. Our wealth management arm conducts independent assessment ofinvestment products developed by Gopher.oFor each proposed investment under our asset management business, in particular private equity direct or co-investments, wedesignate a dedicated project team to conduct preliminary due diligence on the potential investment target. After conducting thepreliminary review, the project team submits an investment analysis and due diligence memorandum on the investment targets,focusing on investment overview and recommendation, market opportunities, investment strategies, investment return analysis,eligible investors, key risks and risk control solutions, among other considerations. If necessary, we will also engage qualified third-party services providers such as independent auditors and law firms to conduct independent research and analysis on our proposedinvestment portfolio.●In the project evaluation stage, our professionals analyze the legal structure, financial statistics and other aspects of the product andevaluate the potential returns to our clients and the risks of the investment.●In the risk control stage, our core management team meets to fully evaluate the risk of the product and determine whether appropriaterisk management is in place for the investment in the portfolio and/or distribution of the product. After approved by the risk controlmeeting, the product will be reviewed by our in-house risk analysts before it is officially launched.We have also established a complete risk management system for our daily operations. On the product provider side, we have policies andprocedures regarding, among other things, periodically reviewed product ratings, anti-bribery control, as well as post investment portfolio monitorand alert system. See “—Risk Management and Internal Control.”In particular, we rigorously monitor the performance of our asset management products offered by Gopher on a real-time basis. We haveestablished a systematic post-investment monitoring mechanism to track the performance of funds we manage and to establish a long-termrelationship with the fund managers whose funds we invested in. We have built a proprietary system, the GIMSP, which tracks the profiles andperformance of all invested funds and underlying projects and consolidates such information in our internal database. This enables us to understandinvestment trends and develop the corresponding strategies in an innovative way. See “—Our Technologies.”Product DistributionWe have established a dedicated client services team for our wealth management business and asset management business. Through thelicensed distribution channels of our wealth management business, we offer various investment products such as public securities investments andinsurance products on behalf of third-party product partners and Gopher. In addition, Gopher’s direct sales team raises capital for the private equityproducts directly.Table of Contents67Our integrated client service team adopts the “Noah Triangle” solution to provide efficient professional services to our clients. Based on ourclients’ specific needs, a typical Noah Triangle consists of: (i) one account representative who is a client relationship manager primarily fororiginating and maintaining client relationships, as well as providing asset allocation advisory services, (ii) one or more solution representatives, eachwith certain specialized knowledge to provide detailed and more technical advice regarding our domestic and overseas investment products, such asprimary and secondary market products as well as comprehensive services including family trust, respectively; and (iii) one fulfillment representativewho primarily serves investment execution, administration and other back-office functions.Our account representatives work closely with our clients to understand their asset allocation needs and preferences. When an accountrepresentative notices a client’s investment need, he or she will work with one or more solution representatives with certain specialized knowledge ofa product or service depending on the client’s specific needs, to collectively provide customized investment strategy and product recommendations. Ifthe client is interested, our fulfillment representative will assist the client with the procedures and documentation of the investment process, and lateron delivers portfolio management reports to the client after the investment. The “Noah Triangle” solution is a three-dimensional service team in whichmembers support each other by timely responding to the needs of our clients. We believe this “Noah Triangle” solution enables us to provide in-depthservices to our clients more efficiently and professionally.Our sales and marketing efforts are designed to attract and retain clients and build brand awareness and reputation. We focus on maintaininglong-term relationships with our clients through regular, personalized interaction to build trust with our clients, as well as enhancing and sustainingtheir loyalty. We strive to provide unbiased, trustworthy and client-centric advice to our clients based on their individual investment preferences andrisk appetites. We also believe that the various other value-added services we offer to our clients, such as investor education services and trustplanning, further enhance the loyalty of our clients.Wealth ManagementNoah Upright, our primary distribution channel, is among the first batch of independent financial service companies in mainland Chinawhich has obtained the fund distribution license from the CSRC. Furthermore, we have established offices in Hong Kong, Taiwan, Silicon Valley,New York, and Singapore to offer our clients global investment opportunities.We distribute investment products on behalf of third-party product partners and Gopher, primarily through our network of relationshipmanagers, and we use an array of marketing channels to attract potential clients. Furthermore, we also enjoy continued organic growth in clients fromword-of-mouth referrals.Table of Contents68Our dedicated relationship managers strive to provide tailored investment services to our clients based on a deep understanding of eachclient’s financial position and objectives, utilizing our specialty in asset allocation and manager selection and the wide range of multi-asset classinvestments that we offer. We optimized and condensed our sales force in 2019 and 2020 to further improve our operational efficiency, and as a result,the total number of relationship managers decreased to 1,231 as of December 31, 2020, as compared to 1,288 as of December 31, 2019. In 2021, wemade strategic investments in our talents to capture market opportunities and seek for long-term growth potential. As a result, the total number ofrelationship managers increased to 1,316 as of December 31, 2021.Asset ManagementHistorically, the majority of the funds managed by Gopher were distributed through Noah Upright, the distribution network of our wealthmanagement business. Following the enactment of the Supervision Measures in October 2020, which provides that independent fund distributioninstitutions shall specialize in the distribution of funds that invest in public securities, only mutual fund products and private secondary products aredistributed through Noah Upright. Gopher has built its direct sales team to raise capital for Gopher Funds it establishes that invest in private equityinvestments. When a client of the wealth management business shows interest in asset management products Gopher offers, a relationship manager ofGopher, typically a PE solution representative, will introduce the product to the client and handle the investment process. Gopher’s direct sales teamalso targets institutional investors and family offices.The following table sets forth a selection of licenses that are material to our business operations held by us as of December 31, 2021.Location Licenses Expiration Date Mainland ChinaCertificate for privately-raised investment fund managerN/AFund distribution licenseN/AHong KongType 1 (Dealing in securities)N/AType 4 (Advising on securities)N/AType 9 (Asset management)N/AInsurance brokerage licenseJuly 14, 2024TCSP (trust or company service provider) licenseNovember 4, 2023Money lenders licenseSeptember 1, 2022Jersey IslandsFamily trust licenseN/AUnited StatesInvestment advisor licenseN/AInsurance brokerage licenseMay 31, 2023SingaporeCapital market service licenseN/AFamily trust licenseN/AExempt financial advisor licenseN/ATable of Contents69Integrated Client Service TeamOur relationship managers are all full-time employees who typically receive a base salary as well as performance-based quarterly and annualbonuses. We focus on recruiting, training and motivating our relationship managers, with the goal of enabling our relationship managers to deliverthoughtful advice and investment solutions tailored for each client.In 2021, empowered by our innovative business model, efficient “Noah Triangle” service model and innovative and robust technologyinfrastructure, our net revenues per relationship manager was RMB3.3 million (US$0.5 million), which was more than three times of the net revenuesper relationship manager of our industry peers.We provide a comprehensive training system for relationship managers in different career stages, helping them understand the assetallocation theory promoted by Noah and investment philosophy within different asset categories. Upon recruitment, our relationship managers willreceive required training before interacting with clients. We also provide routine training to our relationship managers from time to time. Thesespecialized training opportunities enhance the skills of our top relationship managers and also serve as an important motivational tool for all of ourrelationship managers as they compete to attend these events.We also provide training to our account representatives, solution representatives and fulfillment representatives to familiarize them withrelevant regulations, industry practices, product strategies, and client services, and require them to pass internal exams before they can be assigned tothe client service team. For example, fulfillment representatives are required to be proficient in various fields, including but not limited to fundoperations, online account opening process for different markets, fund transactions, redemptions, distributions, portfolio management reports andinvestor communications.Client Service CentersWe believe our high-quality client service enhances our client loyalty and brand image. We serve our clients primarily through our networkof relationship managers. Headquartered in Shanghai, our client service network covered 84 cities in mainland China as of December 31, 2021,multiple developed regions where the country’s HNW and ultra HNW population is concentrated, including the Yangtze River Delta, the Pearl RiverDelta, the Bohai Rim and other regions. Our strategy is to open offices at locations with concentrated HNW and ultra HNW population and strongregional economies. We have opened offices in tier-one and tier-two cities and key provincial capitals in mainland China. We also have offices inHong Kong, Taiwan, Silicon Valley, New York and Singapore.We also operate a call center network providing real-time assistance to our clients. Our call center representatives work with our clients torecord their requests and complaints, and we have also integrated AI-based client service robots into our mobile applications. As of December 31,2021, we had 19 call center representatives. We provide regular trainings to our representatives and periodically review callers’ level of satisfactionwith the service they received from us. At the end of each call, each caller is asked to grade the quality of our client service, and a designated call-back team follows up on all incidences of dissatisfaction. We have also invested in ChatBot, a software tool that enhances verbal and textualconversations with our clients and our call center representatives, for our call center to provide better services for our clients.Our Online Transaction and Service PlatformsInvestments in substantially all of our wealth management and asset management products can be facilitated online. We have developed acomprehensive wealth management product mobile application “WeNoah” as a one-stop and integrated client service portal. In addition to WeNoah,we also developed “Fund Smile” and “iNoah”, mobile applications specifically for investing in domestic and overseas mutual funds, respectively.WeNoah automatically directs clients who intend to execute mutual fund transactions to our mutual fund transaction systems Fund Smile and iNoah,which are incorporated into WeNoah. Furthermore, WeNoah is also connected with our investment platforms for private secondary funds and privateequity investments, and facilitate a transaction process that could be completed wholly online. In 2021, we started to provide mutual funds and relatedwealth management services to satisfy our institutional clients’ money market and liquidity management demands through our mutual fund SaaSplatform, “Smile Treasury”. We also provide services on web-based client service channels. Utilizing these online platforms, our relationshipmanagers are able to provide real-time online assistance and personalized investment experience to a broader client base.Table of Contents70Other BusinessesIn addition to our wealth management business and asset management business, we also provide other services through our subsidiaries.These services serve as value-added services that we provide to our clients to broaden and deepen client relationships. In 2019, 2020 and 2021, otherbusinesses represented 8.5%, 1.9% and 1.3% of our net revenues, respectively. Starting from 2019, this segment mainly includes lending businessservices whereby we made loans secured with collateral including investment products distributed by us and real estate properties, with a typical loan-to-value ratio of below 70%, to creditworthy investors. Since the third quarter of 2019, we have decreased lending businesses as we strategicallydecided to focus on our core businesses.Marketing and Brand PromotionOur relationship managers target potential HNW and ultra HNW clients and adopts effective marketing based on thorough data analytics.Our client engagement and branding initiatives primarily include the following:Offline and Online Investor Seminars and Wealth Management ForumsIn order to attract new clients and develop client loyalty, we organize targeted client events on a regular basis, such as high-profile investorseminars and workshops, industry conferences and other investor education and social events, where we present our market outlook and highlight ourproduct selections. We invite experts or authorities in the industry to share the latest market trends, newly promulgated laws and regulations, and otherupdates with our clients. We organize these events offline as well as online. In 2021, we organized 21 and four online and offline investor seminarsand wealth management forums, respectively, which were attended by an aggregate of approximately 1,900 clients and watched by over 700 viewersonline.Online Client Service ChannelsTo improve the efficiency of our sales team and better serve our expanding client base, we connect with our client community throughWeNoah, as well as online social media networks such as WeChat’s enterprise version, WeCom.WeNoah allows us to keep close relationships with our clients and provide a convenient and efficient platform for these clients to access theproducts and services offered by us. We maintain proprietary databases on a broad range of investment products and client online behavior, andleverage them to provide personalized services and initiate targeted marketing initiatives.Strategic Client ManagementIn 2021, we established a Strategic Client Center at group level to systematically go through Gopher’s portfolio companies, leading unlistedfirms in the 84 cities we operate in, listed companies and trust clients, provide business-to-business treasury management services, and work under the“Noah Triangle” service model for new client acquisition and existing client conversion.Word-of-Mouth ReferralWord-of-mouth is one of the most effective marketing tools for our business. Although we employ a variety of methods to promote ourbrand, we believe the reputation and high level of awareness of our brand in China and, increasingly, abroad and references from clients is our bestand most cost-efficient marketing channel. We believe once clients are satisfied with their experiences, they will continue investing in investmentproducts we distribute, or referring their friends and colleagues to our products and services.Table of Contents71Risk Management and Internal ControlWe have adopted risk management and internal control policies and procedures designed to provide reasonable assurance for achieving ourbusiness objectives, including efficient operations, reliable financial reporting and compliance with applicable laws and regulations. Highlights of ourrisk management and internal control system include the following:●Board of Directors, Audit Committee and Internal Audit. Our board of directors and audit committee are responsible for our overall riskmanagement and internal controls. We also maintain an internal control and internal audit department, which is responsible forreviewing the effectiveness of our internal controls and submitting internal audit reports to our audit committee quarterly. Our internalaudit department, with the help of our business division managers, prepares and updates questionnaires for our various businessdepartments to conduct self-assessment of internal control and risk management each year, and our internal audit department will followup with the business personnel to timely rectify any deficiencies so identified.●Regulatory compliance. We have adopted and implemented various internal control and risk management policies, including insidertrading, whistleblowing, related party transaction, anti-corruption, anti-money laundering and sanctions related policies, as well as codeof business conduct and ethics. We provide regular training to our employees on these policies. We also engage outside counsel toprovide training to our legal department and other senior personnel from time to time to keep them abreast of recent regulatorydevelopments.●Licenses and approvals. We maintain policies to ensure that we have required licenses and approvals in place. Our compliancedepartment reviews the licenses obtained before we adopt new business initiatives, and our internal control department conducts annualreviews to monitor the status and effectiveness of those licenses and approvals. We also regularly review and update all policies andmeasures related to licenses and approvals.●Data security. We have adopted measures to protect our client data and other confidential information. We also have a dedicatedinformation security team of IT professionals to carry out our data and system related risk management. See “—Privacy and DataSecurity.”●Know-your-client. As part of our risk management and compliance practice, we operate a strict client due diligence process, including:oAt account opening: we require individuals seeking to open account with us to complete standard know-your-client and anti-moneylaundering procedures, including documents for proof of their identity, automatic real-person biometric recognition for ourindividual clients and declaring source of funds for investment.oBefore product purchase: we require our clients to complete a more comprehensive know-your-client questionnaire specificallydesigned for the proposed investment product in accordance with laws and regulations of the competent jurisdiction in which wedistribute the product. Such questionnaires are designed to collect a wide array of personal and financial information, including theindividuals’ professional background, investment experience, level of investable assets and risk tolerance. We also require ourclients to provide supporting documents, such as trading statements and proof of assets.oRegular updates: our relationship managers follow up with a registered client to complete questionnaires in order to update theclient’s risk profile and investment preferences on a regular basis.Table of Contents72●Client suitability assessment and recordkeeping. We have adopted various measures to ensure that the client’s risk profile matches therisk profile of investment products recommended to them. We have designed a risk scoring model for our clients, which accounts forinformation on clients’ risk tolerance we obtained in the know-your-client process. Similarly, we also assign a risk rating score for eachproduct we distribute, considering factors such as industry risk, concentration risk, level of leverage and risks related to the investmentportfolio. Both scores are reviewed by our specialists in accordance with relevant guidelines, and may be adjusted if inconsistent withsupporting documents and due diligence results. We provide investor right and risk disclosure statement to our clients, and recommendto them only investment products with matching risk scores or lower. For each newly launched product, we provide training to ourrelationship managers with a focus on the risk profile of such products.●Anti-money laundering. In addition to our know-your-client measures, we have also implemented anti-money laundering policies,including (i) a real-name policy in the process of business operations, (ii) requirement of complete client information, (iii) requirementof trackable transaction records and (iv) requiring and source of fund information. We have further established an anti-moneylaundering information reporting system, as part of the policies and procedures aimed at preventing money laundering activities. Ouremployees collect, analyze, monitor and preserve client information and transaction records, and are required to report any suspicioustransactions detected to our anti-money laundering committee. We deal with any suspicious activities on a timely basis to mitigate therisk of money laundering. We also actively carry out training on anti-money laundering to enhance the awareness of anti-moneylaundering among our employees.We continually review the implementation of our risk management and internal control policies and procedures to enhance theireffectiveness and sufficiency.Our TechnologiesOur technology infrastructure is integrated and readily scalable to support the growth of all of our business segments and digitalizationacross front-end, middle-end and back-end operations. Each aspect of our business operations is supported by its innovative technology infrastructure,and the success of our business is dependent on our strong technological capabilities that support us in delivering superior user experience, increasingoperational efficiency and providing future growth opportunities. Principal components of our technology system primarily include:●Convenient online transaction platforms. Our online platforms WeNoah, Fund Smile and iNoah facilitate investments in substantially allof our wealth management and asset management products online, providing a smooth investment experience. These convenient onlinetransaction platforms allow us to serve a broader client base and increase our transaction value, in particular in mutual fund products.Since the launch of our domestic and overseas mutual fund platforms Fund Smile and iNoah in July 2019 and June 2020, respectively,investments of RMB153.2 billion and US$310.0 million, respectively, were completed through Fund Smile and iNoah. Furthermore,leveraging our extensive coverage of mutual funds in the industry as well as our comprehensive fund screening process, our self-developed treasury management interface, Smile Treasury, is able to fulfil our institutional clients’ diversified money market andliquidity management needs by providing them with customized plans. Through a fully automated online account opening option, SmileTreasury helps small and dedium-size enterprises to optimize cash returns while maintaining liquidity of working capital. In addition,our online transaction capabilities allow us to serve our clients and facilitate transactions in a more convenient and cost-effectivemanner, in particular during the COVID-19 pandemic when face-to-face meetings were limited due to quarantine measures and travelbans.●24/7 digitalized client service experience. Our client service platforms enable our relationship managers to provide 24/7 real time clientservices to our clients, including providing professional investment advices, guiding our clients through the investment process andproviding various post-investment services. In addition, we also organize various investor education sessions and product roadshowsthrough our online platforms, which enhances the client stickiness.Table of Contents73●Automated investment management system. We developed and launched GIMSP, an automated investment management system thatdigitalizes almost all aspects of Gopher’s asset management business. GIMSP functions as a digitalized and structured databasedesigned for private equity investments, which includes information on more than 7,000 potential portfolio companies. GIMSPvisualizes data in a clear and systematic fashion using techniques such as knowledge mapping, allowing specialists to extract andanalyze information easily amidst large volumes of documents, which is particularly helpful for private equity investments and portfoliomanagement. Leveraging proprietary technology, GIMSP incorporates work flow engines that automate various tasks during thelifespan of investment funds, saving substantial amounts of tedious manual labor that would have otherwise been done by personnel.GIMSP is able to swiftly update its data based on information uploaded and retrieved, and shortens the lead time for commitment sharemapping for targeted portfolios after capital calls, from traditional “T+N” to “T+1”, with T being the wire date, “T+1” being the dateafter wire date and “T+N” being a few business days after wire date. GIMSP is the first and only investment management system in theHNW wealth management services industry in China to have achieved this function.●Intelligent investment advisory tools for relationship managers. Our upgraded CRM (client relationship management) platform is anintelligent online wealth management system that significantly improves the work efficiency and productivity of our relationshipmanagers. In particular, our Mutual Fund Work Station, one of the key modules in our CRM platform, provides our relationshipmanagers with in-depth and up-to-date market data, including real-time trading updates of different mutual fund products, to help themupdate their clients from time to time. Furthermore, leveraging big data technology and its extensive database of investment products,Mutual Fund Work Station also enables our relationship managers to quantitatively analyze expected return and risk of investmentproducts, automatically alert risk events and generate investment recommendations based on clients’ investment preferences, expectedreturns and risk appetite, among others.●Open service platform. Starting from the fourth quarter of 2020, we have been integrating our internal resources to launch “Noah DigitalInternational”, a new consolidated division to facilitate our offering of comprehensive services such as investor education and familytrust.●Digitalized KYC/KYA/KYP management. We have adopted a digitalized approach to manage our operations, especially our “know-your-client,” “know-your-agent” and “know-your products” practices. Based on our extensive industry knowledge and experience, we labelour clients, relationship managers and products based on different segmentations, and utilize such segmentation to optimize our resourceallocation. For instance, leveraging our digitalized KYC/KYA/KYP management, we are able to accurately match our products with asuitable client base, and therefore enhance our operating efficiency.Research and DevelopmentOur business innovations and developments are empowered by our innovative technology infrastructure and strong research anddevelopment capabilities in creating and identifying suitable investment products.We had a dedicated research and development team of 414 employees out of the total 3,148 employees as of December 31, 2021,representing approximately 13.2% of our total workforce. Our research and development team is led by a team of visionary and experienced industryexperts. It is an industry veteran team with extensive experience in software platform research and development and structuring. Core members of theteam have previously worked in managerial positions at leading technology or finance companies including Tencent, Alibaba, eBay, Vipshop, ChinaMobile, Lufax, Goldman Sachs and Morgan Stanley. See “Item 6. Directors, Senior Management and Employees—A. Directors and SeniorManagement” for the biographical details of our technological leaders.We devote significant resources to our research and development efforts, focusing on developing our technology infrastructure andproprietary systems, expanding our technological footprint and leading the digitalization of our business operations. As our research and developmentefforts continue, our research and development expenses increased from RMB225.9 million in 2019 to RMB253.6 million in 2020 and further toRMB360.4 million (US$56.6 million) in 2021, mainly comprising compensation of our research and development team and software licensing fees.Table of Contents74Certain of our subsidiaries have been recognized as high-tech enterprises in China. In addition, Noah Upright, our distribution channel, hasreceived many awards and recognitions due to its development and ownership of many software copyrights and patents, including Model Enterprisewith Four New Technologies in Hongkou District and the Center of Technology for Enterprises in Hongkou District.Privacy and Data SecurityWe place a strong emphasis on our clients’ privacy and data security. To achieve the objective, we have an information security teamcomprised of experts who specialize in different areas, including network security, data security, compliance, and risk management. Our informationsecurity team is deeply involved in the key aspects of our business operations, providing professional advisory services to other departments.To preserve the confidentiality of all client information, we collect clients’ personal information legally required for our business operationsonly, including account opening procedures, know-your-client and anti-money laundering review processes, as well as for their investments with us.For our daily operations, we collect and store personal identity information (PII), including sensitive information such as client ID numbers and bankaccounts information, in an encrypted form. We also implement multiple layers of security protections to insulate our databases from unauthorizedaccess and use secure protocols (HTTPS) for data transmission on the internet.To reduce the risk of cyber-attacks and protect our network and computer systems, we deploy a variety of cyber security techniques,including but not limited to Network Firewall, Web Application Firewall (WAF), Anti-Virus, Host-based Intrusion Detection System (HIDS) and Dataloss prevention (DLP). We also develop and maintain a Cyber Security Operation Center (SOC) platform to monitor and respond to all types of cyber-attacks effectively on a real-time basis. Our SOC system is designed to automatically detect suspicious activities and an alert will be instantly sent toour information security team for analysis and solutions.We have also made great efforts to improve our client privacy and data security systems and processes. We have built a secure SoftwareDevelopment Lifecycle (SDLC) to ensure the security of all the software systems we develop before launch. We have also established a securitymanagement framework and obtained ISO 27001 (information security management) and ISO 29151 (personally identifiable information protection)certifications issued by DNV. To keep improving our staff’s information security awareness and reduce human factors, we have organized variousinternal training sessions and prepared quizzes on information security. In 2021, our employees participated in a total of over 2,000 hours of trainings.Intellectual PropertyWe believe that the protection of our brand, trade names, domain names, trademarks, trade secrets, patents, and other intellectual propertyrights is critical to our business. Such intellectual properties distinguish the products we distribute and the services we provide from those of ourcompetitors and contribute to our competitive advantage in both wealth management and asset management industries. We rely on a combination ofcopyright, trade secret, trademark, competition laws and contractual arrangements to protect our intellectual property rights. We enter intoconfidentiality agreements and non-compete covenants with all of our employees and our third-party product partners.As of December 31, 2021, we had 581 registered trademarks (462 registered trademarks in mainland China and 119 registered trademarks inHong Kong, Taiwan, the U.S., Europe, Singapore, Canada, India, Australia and several other countries and regions), 101 software copyrights, 100registered domain names, and three issued invention patents in mainland China. Specifically, the Trademark owned by Noah Investment hasbeen recognized as a “Well-known Trademark” in China. The trademark owned by Gopher has also been recognized as a “Well-knownTrademark” in mainland China.Table of Contents75Our intellectual property is subject to risks of theft and other unauthorized use, and our ability to protect our intellectual property fromunauthorized use is limited. In addition, we may be subject to claims that we have infringed the intellectual property rights of others. See “Item 3. KeyInformation—D. Risk Factors—Risks Related to Our Business—We may not be able to prevent unauthorized use of our intellectual property, whichcould reduce demands for our products and services, adversely affect our revenues and harm our competitive position” and “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We may face intellectual property infringement claims against us, which could be time-consuming and costly to defend and may result in the loss of significant rights by us.”CompetitionThe independent HNW wealth management services industry in China is concentrated. We primarily compete with other independent HNWwealth management service providers in China, which are providers primarily engaged in providing diversified investment products andcomprehensive services to HNW clients and are not associated with any financial institutions. We believe that our sophisticated and loyal client base,ecosystem with product and investment partners, unique investment opportunities we provide, domestic and overseas capabilities and leadingtechnology infrastructure provide us a competitive advantage. We also compete with private banking arms of financial institutions, typically theprivate banking departments of commercial banks in China.InsuranceWe participate in government sponsored social security plans including endowment insurance, unemployment insurance, maternityinsurance, employment injury insurance, medical insurance and housing provident funds. We also maintain a director and officer liability insurancepolicy for our board directors, executives and employees. In Hong Kong, we maintain investment structure insurance as required by the SFC. We donot maintain business interruption insurance or key-man life insurance. We consider our insurance coverage to be adequate for our existing operationsand in line with that of other wealth management companies of similar size in China.Occupational Health and SafetyOur operations are subject to regulation and periodic monitoring by local work safety authorities. If we fail to comply with present or futurelaws and regulations, we would be subject to fines, suspension of business or cessation of operations. As such, we emphasize occupational health andsafety and have established work safety policies and procedures to ensure that our operations are in compliance with applicable safety laws andregulations. During the three years ended December 31, 2019, 2020 and 2021 and up to the date of this annual report, none of our employees had beeninvolved in any major workplace accident in the course of their employment, and we had not been subject to any material disciplinary actions withrespect to labor protection issues.Environment, Social and Corporate GovernanceWe pay close attention to environmental, social and corporate governance (“ESG”) matters and take actions in our day-to-day operations andinvestment services. Since 2014, we have been voluntarily releasing a Corporate Social Responsibility (“CSR”) Report on an annual basis, which arewell recognized both domestically and internationally. In 2021, we received AAA rating for excellent CSR reporting from the Ministry of Industryand Information Technology, and were awarded “Transparency and Reporting” by the UN Women China WEPs Awards.We actively work to promote our growth and operations in a sustainable and responsible manner and aim to become a company built onsustainable development and responsible strategies, aligned with our core corporate values—client-centricity, integrity, professionalism, embracingchanges, self-improvement, and passion. We updated our corporate mission in 2018 as “enriching life with wealth and wisdom” and envisionourselves to become a trustworthy partner by developing a deep understanding of clients through the pursuit of professionalism and excellence. Wehave been continuously investing in training and education programs for employees and clients.We believe that our operations do not produce material industrial waste and have a relatively limited impact on the environment compared tocompanies that directly engage in production. During the three years ended December 31, 2019, 2020 and 2021 and up to the date of this annualreport, we were not subject to any administrative penalty for violating the applicable PRC or other environmental laws and regulations that arematerial to our group.Table of Contents76Our 2021 Noah Holdings Limited Sustainability Report will be released in April 2022, prepared in accordance with Global ReportingInitiative (GRI) G4 Core Option and Standard AA1000 (2008). The report will highlight our efforts in ESG matters during the period, includingcorporate governance, employee compensation, anti-bribery and anti-corruption, sustainable management, human capital management, client-orientedinnovation and investor education, digitalization, charity as well as other ESG matters. We hope our efforts will help create a healthy ecosystem in ourbusiness operations and promote sustainable development in the industry.In March 2021, Ms. Jingbo Wang, our founder, chairwomen and chief executive officer, signed the Statement of Support for Women’sEmpowerment Principles at UN Women. As of December 31, 2021, female employees accounted for 61.8% of our total employees and 36.7% of oursenior management team. The average training hours of our employees are approximately 77.6 hours in the year. We endeavor to include ESG-relatedtopics into the decision-making process of risk management, product and service development and provision, as well as marketing activities.In October 2021, we were recognized by the international certification agency SGS and obtained ISO 14064-1:2018 (qualification andreporting of greenhouse gas emission and removal, becoming the first company in China to meet the standard. The new office premises we purchasedin Hongqiao Transporation Hub consists of four office buildings, one of which was certified as LEED platinum level with the other three as LEEDgold level by LEED certification, a globally recognized symbol of sustainability achievement and leaderships.We also introduced ESG sections on Fund Smile and iNoah in 2021, so that our clients can access ESG related fund products more clearlyand directly online.In April 2020, our company and Gopher Asset Management both joined the UN supported Principles for Responsible Investment initiativesas official signatories, to promote responsible investments from both wealth management and asset management ends, and practice sustainabledevelopment. Our company signed as a service provider and Gopher Asset Management signed as an investment manager. Our company became thefirst independent wealth management firm in China to participate in this initiative.In 2020, we also established an ESG sustainability committee consisting of directors and senior management members, to report to our boardof directors and to oversee the sustainable development of our company. In addition, the key performance indicators of our senior managementmembers have incorporated ESG indicators. The ESG sustainability committee, together with the strategy committee, talent committee, operationcommittee, science and technology revolution committee, product committee, ethics compliance committee (including compliance and disciplinesupervision committee), client interest committee, contributes to our organizational leadership capability and forms an effective collective decision-making mechanism.In 2020, Gopher Asset Management jointly initiated China Asset Manager ESG Investment Alliance with 50 fund managers. In July 2021,Gopher Asset Management released its ESG Responsible Investment Report, introducing the development trends of international and domestic ESGresponsible investment, analyzing ESG-related investment opportunities, stating Gopher Asset Management’s research and investment actions, aswell as presenting a group of excellent investment cases in line with sustainable business models.As of December 31, 2021, we, our employees and clients had donated more than 357,000 saxaul trees that have been planted in TenggerDesert in China, covering more than 1,238.5 acres of land and helping to stabilize 3.57 square kilometers of sand. Noah also supports the “Noah Ark– Biodiversity Conservation” programme in the South West China to help protect animals such as green peafowls and Asian elephants. As of the endof 2021, 23 rare species in the region have been identified by the programme. In November 2021, in response to the spirit of the United NationsConvention on Biodiversity (COP15), we launched the first “Noah’s Ark - Green Peacock Biodiversity Conservation” charity concert, as well as a 20-year “Green Peacock Ecological Restoration Plan”.From 2015 to 2021, we organized 220 series of Noah Care courses in more than 50 cities in China, covering topics of happiness, well-being, and psychological health, which have been attended by or benefited more than 27,000 people. A social program we launched has helped thousands of beneficiaries including children in underdeveloped villages in China to receive education and community non-resident children to receive healthcare, as well as providing training sessions for children with infantile autism. Table of Contents77To help combat the COVID-19 pandemic, our employees and clients have donated approximately 40,000 facial masks, RMB1.05 million,990 kilograms of disinfectant and a number protective suits for hospitals in Hubei, Beijing, Shanghai, Sichuan, Jiangsu and Zhejiang, China through anumber of non-profit organizations. We also made a donation of RMB2 million to Henan and Shanxi provinces to promote social welfare and andfacilitate reconstructions after heavy rainstorms.Our ESG efforts are recognized by various organizations, demonstrated by the awards we received, including Best CSR Institution by IPWM2021, 2020 Titanium ESG Corporate Award and 2021 Gold ESG Corporate Award by the Asset; 2020 Best ESG Case by Cailian Press, and 2021ESG Corporation of the Year by China Corporate Social Responsibility Forum.We have launched a dedicated Noah ESG website in 2020 to promote ESG awareness and efforts in the industry. More information and theCSR reports are available at esg.noahgroup.com.Regulations in ChinaRegulation on Foreign InvestmentInvestment activities in the PRC by foreign investors were principally governed by the Catalogue for the Guidance of Foreign InvestmentIndustry (《外商投資產業指導目錄》), or the Guidance Catalogue, which was promulgated and is amended from time to time by the MOFCOMand the NDRC, the Wholly Foreign-Owned Enterprise Law of the PRC (《中華人民共和國外資企業法》), the Sino-Foreign Equity Joint VentureEnterprise Law of the PRC (《中華人民共和國中外合資經營企業法》), the Law of the PRC on Chinese-Foreign Contractual Joint Ventures (《中華人民共和國中外合作經營企業法》), or collectively the Old FIE Laws, and their respective implementation rules and ancillary regulations. TheGuidance Catalogue laid out the basic framework for foreign investment in China, classifying businesses into three categories with regard to foreigninvestment: “encouraged,” “restricted” and “prohibited”. Industries not listed in the Guidance Catalogue are generally deemed as falling into a fourthcategory “permitted” unless specifically restricted by other PRC laws. Under the Guidance Catalogue, certain ownership requirements, requirementsfor senior executives and other special management measures shall apply to foreign investors with regard to the access of foreign investments incertain restricted categories, and foreign investors shall not engage in any business that falls into the prohibited categories.On June 30, 2019, the MOFCOM and the NDRC released the Catalogue of Industries for Encouraging Foreign Investment (2019 Version)(《鼓勵外商投資產業目錄(2019年版)》), or the 2019 Encouraging Catalogue and the Special Management Measures (Negative List) for theAccess of Foreign Investment (2019) (《外商投資准入特別管理措施(負面清單)(2019年版)》), or the 2019 Negative List, which became effectiveon July 30, 2019, to amend and supplement the Guidance Catalogue and replace the previous negative list thereunder. Under the 2019 Negative List,foreign investment in companies providing value-added telecommunications services, excluding e-commerce, domestic multi-party communications,data collection and transmission services and call centers, should not exceed 50% of the total equity interests.On December 27, 2020, the MOFCOM and the NDRC released the Catalogue of Industries for Encouraging Foreign Investment (2020Version) (《鼓勵外商投資產業目錄(2020年版)》), which became effective on January 27, 2021, to replace the 2019 Encouraging Catalogue. OnDecember 27, 2021, the MOFCOM and the NDRC released the Special Management Measures (Negative List) for the Access of Foreign Investment(2021 Version) (《外商投資准入特別管理措施(負面清單)(2021年版)》), or the 2021 Negative List, which became effective on January 1, 2022, tofurther reduce restrictions on the foreign investment and replace the previous negative list.Table of Contents78On March 15, 2019, the National People’s Congress promulgated the Foreign Investment Law of the PRC (《中華人民共和國外商投資法》), or the Foreign Investment Law, which came into effect on January 1, 2020 and replaced the Old FIE Laws. The Foreign Investment Law, bymeans of legislation, establishes the basic framework for the access, promotion, protection and administration of foreign investment in view ofinvestment protection and fair competition. According to the Foreign Investment Law, a foreign invested entity shall be treated no different than adomestic company, except for those foreign invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negativelist”. The Foreign Investment Law provides that foreign invested entities operating in the “restricted” industries will be required to conform torelevant investment conditions before they can operate in such industries and foreign invested entities shall not invest in any “prohibited” industry.The Foreign Investment Law also provides several protective rules and principles for foreign investors and their investments in the PRC, including,among others, that foreign investors’ funds can be freely transferred out and into the territory of PRC, which run through the entire life cycle from theentry to the exit of foreign investment, and that a comprehensive system to guarantee fair competition among foreign-invested enterprises anddomestic enterprises is to be established. If these protective rules and principles are so implemented via specific rules and regulations, it could meanthat the restrictions on the injection of our company’s funds into our PRC subsidiary and the distribution of the PRC subsidiary’s profits and dividendsto our company may further loosen. In addition, foreign investors and foreign-invested enterprises are subject to legal liabilities for failing to reporttheir investment information in accordance with the requirements of the information reporting system to be further established. Furthermore, theForeign Investment Law provides that foreign invested enterprises established according to the existing laws regulating foreign investment maymaintain their structure and corporate governance within five years after the implementation of the Foreign Investment Law, which means that afterthe five-year grace period, foreign invested enterprises may be required to adjust their structure and corporate governance in accordance with the thencurrent PRC Company Law and other laws and regulations governing the corporate governance.On December 26, 2019, the State Council promulgated the Implementation Rules to the Foreign Investment Law of the PRC (《中華人民共和國外商投資法實施條例》), which became effective on January 1, 2020. The implementation rules further clarified that the state encourages andpromotes foreign investment, protects the lawful rights and interests of foreign investors, regulates foreign investment administration, continues tooptimize foreign investment environment, and advances a higher-level opening.On December 30, 2019, the MOFCOM and the State Administration for Market Regulation, or the SAMR, jointly promulgated the Measuresfor Information Reporting on Foreign Investment (《外商投資信息報告辦法》), which became effective on January 1, 2020. Pursuant to theMeasures for Information Reporting on Foreign Investment, where a foreign investor carries out investment activities in China directly or indirectly,the foreign investor or the foreign-invested enterprise shall submit the investment information to the competent commerce department.On December 19, 2020, the MOFCOM and the NDRC, jointly promulgated the Measures for the Security Review of Foreign Investments(《外商投資安全審查辦法》), or the Security Review Measures, which took effect on January 18, 2021. Pursuant to the Security Review Measures,for foreign investments which affect or may affect national security, security review shall be conducted in accordance with the provisions of theSecurity Review Measures. The State establishes a working mechanism for the security review of foreign investments (the “Working Mechanism”)and be responsible for organizing, coordinating and guiding the security review of foreign investments. For foreign investments related to importantfinancial services, important information technology and internet products and services, etc., the foreign investors who obtains the actual controllingstake in the investee enterprise or relevant parties in the PRC shall declare to the office of the Working Mechanism prior to implementation of theinvestments.Table of Contents79Regulations on Private FundsOn August 21, 2014, the CSRC promulgated Interim Measures for the Supervision and Administration of Private Investment Funds, or theInterim Measures, which became effective on the same date. According to the Interim Measures, private funds refer to the investment fundsestablished by way of raising capitals from qualified investors in a non-public manner within the territory of the PRC. The qualified investors shall be(i) institutional investors with net assets of not less than RMB10 million, (ii) individual investors with financial assets of not less than RMB3 millionor the average annual income of not less than RMB500,000 for the past three years, and (iii) other types of investors that have been prescribed in theInterim Measures. The Interim Measures mainly cover the following five aspects: specifying the registration of fund manager and record-filing ofprivate funds of all types, setting up a qualified investor system, specifying the fund raising regulations of private funds, presenting the investmentoperations and introducing industry self-regulation and supervision and administration measures for private funds. Apart from the Interim Measures,other laws or regulations applying to private funds shall still apply, including the Company Law of the PRC, or the PRC Company Law, which appliesto fund managers or private funds taking the form of limited liability company or company limited by shares and the Partnership Law of the PRC,which applies to fund managers or private funds taking the form of limited liability partnership or general partnership. Unlike general partnerships,limited partnerships allow investors to join as partners with their liability for the partnership’s debts limited by the amount of their capitalcommitment. A limited partnership must consist of no more than 49 limited partners and at least one general partner, who will be responsible for theoperation of the partnership and bear unlimited liability for the partnership’s debts.According to the Interim Measures, the establishment of management institutions of private funds and the formation of private funds are notsubject to administrative examination or approvals. All types of fund managers are allowed to set up private funds to a cumulative number ofinvestors not exceeding the number specified by laws. Managers of private funds of all types are, however, required to register with the AMAC andapply with the AMAC for record filing after the fund raising of a private fund of any type is completed. Accordingly, the AMAC formulated theMeasures for the Registration of Private Investment Fund Managers and Filling of Private Investment Funds (for Trial Implementation) which becameeffective as of February 7, 2014, setting forth the procedures and requirements for the registration of private fund managers and record filing ofprivate funds to perform self-regulatory administration of private funds.Since late 2015, the AMAC promulgated a series of detailed measures and guidance to enhance the supervision in the private fund industry,including the Administration of Information Disclosure of Private Investment Funds, the Notice to Further Regulate Several Issues on the Registrationof Private Funds Managers, Rules on the Management of Private Asset Management Plan Filing by Securities and Futures Institutions No. 13 andRules on the Management of Private Asset Management Plan Filing by Securities and Futures Institutions No. 4. These regulations have the effect of(i) expanding the self-discipline rules regarding the private fund industry, (ii) intensifying the registration of private fund manager and record-filing ofprivate funds, (iii) establishing the qualification censorship of fund manager by attorney and (iv) strengthening the practice qualifications ofmanagement.In December 2018, the AMAC updated the Asset Management Association of China Notice for Private Fund Manager Registration, or thePrivate Fund Manager Registration New Notice, which set further requirements for the registration and ongoing compliance matters for private fundmanagers. Among others, the Private Fund Manager Registration New Notice mentioned that: (i) if a new entity under the common control with aprivate fund manager intends to file a new application for private fund manager registration with the AMAC, it shall state in its application thepurpose and rationale of setting up multiple private fund managers, the difference in the business of such private fund managers, and how horizontalcompetition among such private fund managers can be avoided, the de facto control person and the registered related private fund manager under itscontrol shall undertake in writing that it shall bear the joint and several liability for any violations of such private fund manages during theiroperations; and (ii) except for its legal representative, other senior officers of a private fund manager shall not have any other part-time jobs, and inthe event that such senior officers have any part-time job in addition to the position in such private fund manager, the fund manager shall providerelevant documentations for the rationale for such additional part-time job; the number of the senior officers who have such additional part-time jobsshall not exceed 50% of the total number of the senior officers of the private fund manager.Table of Contents80On November 9, 2017, the State Council promulgated the Notice of Implementation Measures to Transfer a Portion of State-owned Capitalto Social Security Fund, or the State-owned Capital Transfer Notice, which amended the previous mechanism of state-owned capital transfer. In thepast, if the portion of state-owned capital of an entity is more than 50% or otherwise considered as significant by competent authorities (State-ownedAssets Supervision and Administration Committee, Ministry of Finance or CSRC in different occasions), the entity shall voluntarily transfer a portionof shares to the Social Security Fund in its initial public offering. In practice, before the State-owned Capital Transfer Notice, the limited partners withstate-owned capital had the liberty to determine the portion and status of state-owned capital in its own shareholding/equity structure, which willeventually impact the state-owned capital percentage of the private fund the limited partner invested in. In addition, before the State-owned CapitalTransfer Notice, when a private fund, or its invested enterprise, is considered to be in fact controlled by state-owned capital, the invested enterprisewill likely have to transfer the relevant shares in its first public offering. Pursuant to the State-owned Capital Transfer Notice, only the prescribed typeof entities shall transfer the shares to Social Security Fund and unless otherwise clarified by the State Council, a private fund is not a prescribed typeentity.On April 27, 2018, the PBOC, China Banking and Insurance Regulatory Commission, or the CBIRC, CSRC and State Administration ofForeign Exchange, or the SAFE, jointly released the Guidance Opinions on Regulating the Asset Management Business of Financial Institutions, orthe Guidance Opinions, which provides that specific laws and regulations relating to private investment funds will be applied to private investmentfunds. However, if there are no such laws and regulations addressing particular topics, then the Guidance Opinions applies. On July 20, 2018, PBOCissued the Circular on Further Clarifying Matters concerning the Guidance Opinions on Regulating the Asset Management Business of FinancialInstitutions. On October 22, 2018, CSRC issued the Administrative Measures on Private Asset Management Business of Securities and FuturesInstitutions. CBIRC has also issued specific implementation rules in the industries subject to its regulation. On October 19, 2019, NDRC, PBOC, theMinistry of Finance, CBIRC, CSRC and SAFE jointly released the Notice on Further Clarifying the Matters Concerning Regulating AssetManagement Products for Financial Institutions to Invest in Venture Capital Funds and Government-funded Industry Investment Funds, specifyinghow Guidance Opinions applies to venture capital funds and government-funded industry investment funds. On December 23, 2019, the AMACupdated the Instructions for the Filing of Privately-Raised Investment Funds (2019 Version), which reflects certain provisions set forth in theGuidance Opinions, such as the prohibition of the establishment of multiple private funds in disguised forms in order to contravene restrictions on thenumber of investors or other regulatory requirements and the requirement for leverage ratios in respect of the private funds.On February 14, 2020, the CSRC released the Decision on the Revision to the Administrative Measures for the Offering of Securities byListed Companies, the Decision on the Revision to the Implementing Rules for Private Placement of Shares by Listed Companies and the SupervisionQ&A for Offering - Supervision Requirements for Guiding and Regulating Financing Acts of List Companies (the abovementioned rules, collectively,the “New Refinancing Rules”), relaxing the supervision requirements for refinancing by PRC listed companies and participation in private placementby investors. According to the New Refinancing Rules, the CSRC (i) shortens the lock period for transfer of the newly subscribed shares held by thesubscribers; and (ii) increases the offering price discount and the maximum amount of shares for private placement etc.On December 30, 2020, the CSRC promulgated the Several Provisions on Strengthening the Regulation of Private Investment Funds, or the Private Investment Funds Regulation Provisions, putting forward a series of prohibitive requirements for private fund managers and their practitioners. The Private Investment Funds Regulation Provisions mainly covers the following six aspects: (i) regulating the name and business scope of private fund managers; (ii) optimizing the regulation of group private fund managers; (iii) restating that private funds shall be offered to qualified investors in a non-public manner; (iv) clarifying the property investment requirements for private equity funds; (v) strengthening the normative requirements for private equity fund managers, practitioners and other subjects, and standardizing related-party transactions; (vi) clarifying legal liability and grace period arrangements.Table of Contents81Regulations on Fund DistributionAccording to the Administrative Measures on Securities Investment Fund Distribution, or the Fund Distribution Administrative Measures,issued by the CSRC on March 15, 2013, fund distribution institutions refer to the fund managers and other institutions registered with the CSRC or itsbranches. Other institutions, including commercial banks, securities companies, futures companies, insurance institutions, securities investmentconsulting institutions and independent institutions, are required to register with the local CSRC branch and obtain the relevant fund distributionlicense, in order to carry out fund distribution service. Distribution services regulated under the Fund Distribution Administrative Measures refer tomarketing and promotion, sales and distribution, subscription and redemption services of mutual funds in particular.The AMAC issued the Measures for the Administration of the Fund Raising Conducts of the Private Investment Funds, or the Fund RaisingMeasures, on April 15, 2016 and the Implementation Guidance of the Management of Investor Suitability for Fund Raising Institutions, or theInvestor Suitability Management Guidance, on June 28, 2017 in consistent with the Administrative Measures of the Securities and Futures InvestorSuitability by the CSRC on February 21, 2017, which both made significant changes to the fund raising procedures and fund distribution institutions.According to the Fund Raising Measures, only two kinds of institutions are qualified to conduct the fund raising of private investment funds:(a) private fund managers which have registered with the AMAC (only applicable when raising fund for the funds established and managed bythemselves); and (b) the fund distributors which have obtained the fund distribution license and also become members of the AMAC. In addition, theFund Raising Measures set forth detailed procedures for conducting fund raising business and introduced new processes such as the “cooling-off period” and the “re-visit.”The Investor Suitability Management Guidance categorized fund investors into two types: common investors and sophisticated investors.Sophisticated investors include (i) financial institutions approved by relevant financial bureaus and the products they distribute, (ii) entities with netasset of no less than RMB20 million as of the end of the previous year or financial asset of no less than RMB10 million as of the end of the previousyear, and (iii) individuals with financial asset of no less than RMB5 million or average annual income of no less than RMB500,000 for the pastthree years. The investors other than the sophisticated investors are common investors, who are further divided into 5 categories according to theirrisk tolerance level. The Investor Suitability Management Guidance listed the requirements and steps for identifying the risk tolerance and category ofeach investor, which shall be the first step to take in a fund-raising process when determining the product with corresponding risk level that suchinvestor can subscribe to.On November 8, 2019, the Supreme People’s Court of the PRC issued the Notice by the Supreme People’s Court of Issuing the Minutes ofthe National Courts’ Civil and Commercial Trial Work Conference, or the Conference Minutes, which identifies the liability of sellers of financialproducts in respect of the trial of cases relating to disputes over protection of the rights and interests of financial consumers. According to theConference Minutes, where an issuer or seller of a financial product fails to perform its suitability obligations, causing damages to any financialconsumer in the course of purchasing the financial product, the financial consumer is entitled to compensations from either the issuer or the seller ofthe financial product, or, in accordance with Article 167 of the General Provisions of the Civil Law (the predecessor of the General Provisions of CivilCode of the PRC), from both the issuer and the seller. Further, the Conference Minutes also clearly states that if a financial service provider fails tofollow the suitability principle, that is, to sell suitable products to suitable customers, causing damages to any financial consumer participating inhigh-risk investment activities after providing its financial services, the financial consumer may request the financial service provider to assume itsliability for compensations.Table of Contents82On August 28, 2020, the CSRC issued the Supervision Measures on Distribution Institutions of Publicly-Raised Securities Investment Fund,or the Supervision Measures, which came into effect on October 1, 2020 and replaced the Fund Distribution Administrative Measures. TheSupervision Measures set out various requirements on fund distribution institutions distributing publicly-raised securities investment funds as well asprivately-raised securities investment funds, including registration, operational standards, internal control and risk management. Fund distributioninstitutions distributing publicly-raised securities investment funds are required to obtain a fund distribution license. The Supervision Measuresprovide that independent fund distribution institutions shall specialize in the distribution of publicly-raised securities investment funds and privately-raised securities investment funds, and no other business shall be engaged, except as otherwise prescribed by the CSRC. In addition, pursuant to theProvisions on the Implementation of the Supervision Measures on Distribution Institutions of Publicly-Raised Securities Investment Fund issued bythe CSRC on August 28, 2020 and effective from October 1, 2020, an independent fund distribution institution engaging in the distribution ofproducts other than publicly-raised securities investment funds and privately-raised securities investment funds shall, within two years from theimplementation date of the Supervision Measures, complete the rectification, and during the rectification period, cut the scale of holdings of relevantproducts under distribution in an orderly manner and after the expiration of the rectification period, only provide services for existing shares held byrelevant stock product investors.Regulations on Microloan BusinessThe Guidance on the Pilot Establishment of Microloan Companies, jointly promulgated by the China Banking Regulatory Commission, orthe CBRC, and the PBOC on May 4, 2008, allows provincial governments to approve the establishment of microloan companies on a trial basis. Thisguidance set the basic principles and requirements to set up microloan company, which requires that the registered capital shall be fully paid in andthat the capital from one individual, entity or other association (including the capital from affiliates) shall not exceed 10% of the total registeredcapital.On October 10, 2008, the People’s Government of Anhui Province promulgated the Pilot Administrative Measures (for Trialimplementation) on Microloan Company in Anhui, and on May 18, 2009, the Anhui Government promulgated the Interim Regulations on theSupervision and Administration of Microloan Business of Anhui Province. According to such measures and regulations, a microloan company is notallowed to accept public deposits. The major sources of funds of a microloan company shall be the capital paid in by shareholders, donated capitaland the capital borrowed from a maximum of two banking financial institutions. The balance of the capital borrowed from banking financialinstitutions shall not exceed 50% of the net capital. When applying for the establishment of a microloan company, the shareholding percentage of thefounding shareholder shall not exceed 20% in principle, and the capital contribution from one individual, entity or other association (including thecapital from affiliates) to a company in this business may not exceed 10% of the company’s total registered capital. In addition, the total amount ofloans of the same borrower shall not exceed 5% of the registered capital of the microloan company. On October 24, 2011, the government of AnhuiProvince published the Opinions of Finance Office of Anhui Province on Promoting the Standardized Development of Microloan Companies acrossAnhui Province, or the Anhui Microloan Company Development Notice, which explicitly states that microloan companies cannot raise moneythrough authorized loans, and cannot receive public deposits. The Anhui Microloan Company Development Notice relaxes the restrictions on theequity proportion of microloan companies, according to which, when applying for the establishment of a microloan company, the shareholdingpercentage of the founding shareholder shall not exceed 35% in principle, the shareholding percentage of the founding shareholder and its affiliatedshareholder shall not exceed 50% and the capital contribution from the other affiliated shareholders of the company may not exceed 30% of thecompany’s total registered capital. On December 1, 2017, the Notice on Regulation and Renovation of the Cash Loan Business was promulgated andon December 8, 2017, the Implementation Plan for Renovation of the Risk of Online Microloan Business for Microloan Company was issued. TheNotice on Regulation and Renovation of the Cash Loan Business and the Implementation Plan for Renovation of the Risk of Online MicroloanBusiness for Microloan Company (collectively, the “Microloan Renovation Plan”) set forth the requirements for cash loan or online loan making. Theprevious practice such as loan without prescribed usage, extensive borrowing from third parties or public deposits to carry out lending business,transfer or sell of the credit assets through online platform or local exchange is expressly prohibited. In addition, the Notice on Regulation andRenovation of the Cash Loan Business prescribed that engaging credit asset transfer or ABS business through Internet finance is prohibited. Further, itprovides that the capital from credit asset transfer or ABS business shall be counted together with capital from other financing methods of microloancompany, and the total amount of capital shall not exceed the prescribed percentage of a microloan company’s net asset in the Microloan RenovationPlan. On July 23, 2019, the Opinions on Illegal Lending, jointly promulgated by the Supreme People’s Court, the Supreme People’s Procuratorate, theMinistry of Public Security, and the Ministry of Justice, provides rules on the supervision of and punishment for illegal lending, including (i) regularlygranting loans to the public for profits in violation of the provisions issued by the state, without the approval of the regulatoryTable of Contents83authorities, or beyond the scope of business, (ii) granting illegal loans as stipulated in (i) under circumstances where the annual interest rate of theloan exceeds 36%; and (iii) debt-collection by means of violence.On September 7, 2020, the CBIRC issued the Notice of the General Office of the CBIRC on Strengthening Regulation on MicroloanCompanies, or the Microloan Companies Notice. The Microloan Companies Notice requires microloan companies to primarily engage in loanbusiness and limits the amount of debt they can borrow. Specifically, the balance of funds borrowed from banks, shareholders and through other non-standard financings should not exceed microloan companies’ net assets and the balance of debt raised via issuance of bonds, asset-backed securitiesand other standard debt instruments should not exceed four times the microloan companies’ net assets. The Microloan Companies Notice also sets outrequirements on various aspects of microloan companies’ business operations, including credit concentration, use of loan proceeds, territorial scope,interests rate and prohibited activities. In particular, microloan companies should strengthen funds management and improve credit process, includingpre-loan approval check, loan approval review and post-loan monitoring, separation of loan application investigation and approval, and loanclassification. Additionally, microloan companies are required to improve various practices, such as loan collection process, information disclosure,and customer data safekeeping and cooperate in regulatory reviews.Regulations on Internet Financial ServicesDue to the relatively short history of the Internet financial service industry in China, the PRC government has not adopted a clear regulatoryframework governing the industry. There are ad hoc laws and regulations applicable to elements of Internet financial service-related businesses, suchas laws and regulations governing value-added telecommunication services.On July 18, 2015, the PBOC together with nine other PRC regulatory agencies jointly issued a series of policy measures applicable toInternet financial services titled the Guidelines on Promoting the Healthy Development of Internet Finance, or the Guidelines. On April 12, 2016, theGeneral Office of the PRC State Council issued the Implementation Plan for Special Rectification of Internet Financial Risks, or the RectificationImplementation Plan. The Guidelines introduced formally for the first time the regulatory framework and basic principles for Internet financialservices industry in China as “law-abiding regulation, appropriate regulation, classified regulation, collaborative regulation and innovativeregulation.” The Guidelines further stated the definitions and basic principles for Internet financial services in the areas of Internet payment, Internetfund distribution and others.The Guidelines also specified several basic rules for Internet financial services industry administration, such as: (i) any organization orindividual that intends to set up a website to provide Internet financial services shall, in addition to going through relevant financial regulatoryprocedures as required, also undergo website record-filing procedures with telecommunications authorities pursuant to the law; (ii) unless otherwisespecified, an industry player shall select qualified banking financial institutions as fund depository institutions to manage and oversee client funds,and manage client funds and its proprietary funds under separate accounts; and (iii) such industry player shall comply with basic rules of informationdisclosure, risk reminder and qualified investors, information security and anti-money laundering. The Rectification Implementation Plan furtherprovides that: (i) the regulators will adopt the see-through way of supervision; and (ii) the non-financial institutions, or the enterprises which do notcarry out financial business, shall not use the wordings, such as “exchange,” “finance,” “asset management,” “wealth management,” “fund,” “fundmanagement,” “investment management,” “equity investment fund,” “online lending,” “peer-to-peer,” “equity crowd-funding,” “Internet insurance,”“payment” or the like, as their enterprise name or registered business. If the enterprise chooses to use the aforementioned word/words, theAdministration of Industry and Commerce will inform the financial regulators.Regulations Relating to Cyber SecurityOn November 7, 2016, the Standing Committee of the National People’s Congress, or the SCNPC, promulgated the Cyber Security Law ofthe People’s Republic of China, or the Cyber Security Law, effective June 1, 2017, to protect cyberspace security and order. Pursuant to the CyberSecurity Law, any individual or organization using the network must comply with the PRC constitution and the applicable laws, follow the publicorder, respect social ethics, and must not endanger cyber security, or engage in activities by making use of the network that endanger the nationalsecurity, honor or interests, or infringe on the fame, privacy, intellectual property or other legitimate rights and interests of others. The Cyber SecurityLaw sets forth various security protection obligations for network operators, which are defined as “owners and administrators of networks andnetwork service providers,” including, among other obligations, complying with a series of requirements of tiered cyber protection systems, verifyingusers’ real identities, localizing the personal information and important data gathered and produced by key information infrastructure operators duringoperations withinTable of Contents84the PRC and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes.Regulations Relating to Internet PrivacyIn recent years, PRC government authorities have enacted laws and regulations on Internet use to protect personal information from anyunauthorized disclosure. The Administrative Measures on Internet Information Services prohibit ICP service operators from insulting or slandering athird party or infringing upon the lawful rights and interests of a third party. Under the Several Provisions on Regulating the Market Order of InternetInformation Services, issued by the MIIT on December 29, 2011, an ICP service operator may not collect any user’s personal information or provideany such information to third parties without the consent of the user. An ICP service operator must expressly inform the users of the method, contentand purpose of the collection and processing of such user’s personal information and may only collect such information necessary for the provision ofits services. An ICP service operator is also required to properly keep the user personal information, and in the case of any leak or potential leak of theuser’s personal information, the ICP service operator must take immediate remedial measures and, in severe circumstances, to make an immediatereport to the telecommunications regulatory authority. In addition, pursuant to the Decision on Strengthening the Protection of Online Informationissued by the SCNPC on December 28, 2012 and the Order for the Protection of Telecommunication and Internet User’s Personal Information issuedby the MIIT in July 2013, any collection and use of user’s personal information must be subject to the consent of the users, abide by the principles oflegality, rationality and necessity and be within the specified purposes, methods and scopes. An ICP service operator must also keep such informationstrictly confidential, and is further prohibited from divulging, tampering or destroying any such information, or selling or providing such informationto other parties. Any violation of the above decision or order may subject the ICP service operator to warnings, fines, confiscation of illegal gains,revocation of licenses, cancelation of filings, closedown of websites or even criminal liabilities. Furthermore, in June 2016, the State InternetInformation Office issued the Administrative Provisions on Mobile Internet Applications Information Services, which became effective on August 1,2016, to further strengthen the regulation of the mobile application information services. Pursuant to these provisions, owners or operators of mobileInternet applications that provide information services are required to be responsible for information security management, establish and improve theprotective mechanism for user information, observe the principles of legality, rightfulness and necessity, and expressly state the purpose, method andscope of, and obtain user consent to, the collection and use of users’ personal information. In addition, the new Cyber Security Law also requiresnetwork operators to strictly keep users’ personal information that they have collected confidential and to establish and improve their user informationprotective mechanisms. On November 28, 2019, the Secretary Bureau of the Cyberspace Administration of China, the General Office of the MIIT, theGeneral Office of the Ministry of Public Security and the General Office of the SAMR promulgated the Identification Method of Illegal Collectionand Use of Personal Information Through App, which provides guidance for the regulatory authorities to identify the illegal collection and use ofpersonal information through mobile apps, and for the app operators to conduct self-examination and self-correction and for other participants tovoluntarily monitor compliance. On February 13, 2020, the PBOC issued Personal Financial Information Protection Technical Specification, whichsets forth the security protection requirements, including the security technology requirements and security management requirements, for thecollection, transmission, storage, use, deletion, destroying and other aspects of the personal financial information. On July 22, 2020, the MIIT issuedthe Notice on Carrying out Special Rectification Actions in Depth against the Infringement upon Users’ Rights and Interests by Apps, the tasks ofwhich includes rectification of (i) illegally collection and use of personal information of users by the APP and the SDK; (ii) conduct of setting upobstacles and frequently harassing users; (iii) cheating and misleading users; (iv) inadequate fulfillment of application distribution platforms’responsibilities. In addition, the SAMR and Standardization Administration issued the Standard of Information Security Technology-PersonalInformation Security Specification (2020 edition), which took effect on October 1, 2020. Pursuant to the standard, any entity or person who has theauthority or right to determine the purposes for and methods of using or processing personal information are seen as a personal information controller.Such personal information controller is required to collect information in accordance with applicable laws, and except in certain specific events thatare expressly exempted in the standard, to obtain the information provider’s consent prior to collection of such data.Table of Contents85Regulations on Labor ProtectionOn June 29, 2007, the SCNPC promulgated the Labor Contract Law of the PRC, as amended on December 28, 2012, which formalizesemployees’ rights concerning employment contracts, overtime hours, layoffs and the role of trade unions and provides for specific standards andprocedure for the termination of an employment contract. In addition, the Labor Contract Law requires the payment of a statutory severance pay uponthe termination of an employment contract in most cases, including in cases of the expiration of a fixed-term employment contract. In addition, underthe Regulations on Paid Annual Leave for Employees and its implementation rules, which became effective on January 1, 2008 and on September 18,2008 respectively, employees are entitled to a paid vacation ranging from 5 to 15 days, depending on their length of service and to enjoycompensation of three times their regular salaries for each such vacation day in case such employees are deprived of such vacation time by employers,unless the employees waive such vacation days in writing.Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurancefunds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternityinsurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, includingbonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses orwhere they are located. According to the Social Insurance Law of the PRC, an employer that fails to make social insurance contributions may beordered to pay the required contributions within a stipulated deadline and be subject to a late fee of 0.05% of the amount overdue per day from theoriginal due date by the relevant authority. If the employer still fails to rectify the failure to make social insurance contributions by such stipulateddeadline, it may be subject to a fine ranging from one to three times the amount overdue. According to the Regulations on Management of HousingFund issued by the State Council on March 24, 2002, an enterprise that fails to make housing fund contributions may be ordered to rectify thenoncompliance and pay the required contributions within a stipulated deadline; otherwise, an application may be made to a local court for compulsoryenforcement.Regulations on TaxPRC Enterprise Income TaxThe PRC enterprise income tax is calculated based on the taxable income determined under the PRC laws and accounting standards. OnMarch 16, 2007, the National People’s Congress of China enacted Law of the PRC on Enterprise Income Tax, or the EIT Law, which becameeffective on January 1, 2008 and was revised on February 24, 2017 and December 29, 2018. On December 6, 2007, the State Council promulgatedImplementing Regulations of the Enterprise Income Tax Law of the PRC, or the EIT Implementation Rules, which also became effective on January1, 2008 and was further amended on April 23, 2019. The EIT Law imposes a uniform enterprise income tax rate of 25% on all domestic enterprises,including Foreign Investment Enterprises, or FIEs, unless they qualify for certain exceptions, and terminates most of the tax exemptions, reductionsand preferential treatments available under previous tax laws and regulations.Moreover, under the EIT Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies”located within China may be considered PRC resident enterprises and therefore subject to PRC enterprise income tax at the rate of 25% of theirworldwide income. The EIT Implementation Rules define the term “de facto management body” as the management body that exercises full andsubstantial control and overall management over the business, productions, personnel, accounts and properties of an enterprise. In addition, theCircular Related to Relevant Issues on the Identification of a Chinese-Holding Enterprise Incorporated Overseas as a Resident Enterprise inaccordance with the Actual Standards of Organizational Management issued by the State Administration of Taxation, or the SAT, on April 22, 2009provides that a foreign enterprise controlled by a PRC enterprise or a PRC enterprise group will be classified as a “resident enterprise” with its “defacto management bodies” located within China if the following requirements are satisfied: (i) the senior management and core managementdepartments in charge of its daily operations function mainly in the PRC; (ii) its financial and human resources decisions are subject to determinationor approval by persons or bodies in the PRC; (iii) its major assets, accounting books, company seals and minutes and files of its board andshareholders’ meetings are located or kept in the PRC; and (iv) not less than half of the enterprise’s directors or senior management with voting rightsreside in the PRC. Although the circular only applies to offshore enterprises controlled by PRC enterprises and not those controlled by PRCindividuals or foreigners, the determining criteria set forth in the circular may reflect the SAT’s general position on how the “de facto managementbody” test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRCenterprises, individuals or foreigners.Table of Contents86Value-added TaxOn March 23, 2016, the Ministry of Finance and the SAT jointly issued the Circular on the Pilot Program for Overall Implementation of theCollection of Value Added Tax Instead of Business Tax, or Circular 36, which took effect on May 1, 2016. Pursuant to the Circular 36, all companiesoperating in construction industry, real estate industry, finance industry, modern service industry or other industries which were required to paybusiness tax are required to pay value-added tax, or VAT, in lieu of business tax. The applicable VAT tax rates are 3%, 6%, 11%, and 17%, accordingto the Circular 36.On December 21, 2016, the Notice on Clarification of Value-Added Tax Policies for Finance, Real Estate Development, Education SupportServices, or Notice No. 140, was issued to explain the application of the Circular 36. According to Notice No. 140, for activities subject to value-added tax occurring in the course of asset management services, the manager of the asset management investment shall be the taxpayer. OnDecember 30, the Tax Policy Division of the Ministry of Finance and the Goods and Services Tax Division of the SAT further explain severalprovisions in the Notice No. 140, stating that the asset management investments refer to the fund products, trust plans, and financial productsmanaged by asset management service provider.On June 30, 2017, the Ministry of Finance and the SAT jointly issued the Notice on Relevant Issues Regarding the Value Added Tax of theAsset Management Products, or Notice No.56, which clarifies the rate that shall apply to the asset management product. Notice No.56 further statesthat the tax for the taxable act before January 1, 2018 shall not be required to be paid and the notice itself has become effective since January 1, 2018.The Circular 36, Notice No.140 and Notice No.56 will influence the investment return of the investors of the asset management products. But theregulator has not clarified the detailed operation for the structured products and the influence on these products is hard to value at current stage.In addition, on November 19, 2017, the State Council promulgated the Decisions on Abolishing the Provisional Regulations of the PRC onBusiness Tax and Amending the Provisional Regulations of the PRC on Value-added Tax, or the Order 691. According to the Provisional Regulationsof the PRC on Value-added Tax and the Order 691, all enterprises and individuals engaged in the sale of goods, the provision of processing, repair andreplacement services, sales of services, intangible assets, real property and the importation of goods within the territory of the PRC are the taxpayersof VAT. The VAT tax rates generally applicable are simplified as 17%, 11%, 6% and 0%, and the VAT tax rate applicable to the small-scale taxpayersis 3%. On April 4, 2018, the Ministry of Finance and the SAT jointly issued the Notice of the Ministry of Finance and the State Administration ofTaxation on the Adjustment to VAT Rates and the Circular on Unifying the Criteria for Small-scale Value-added Tax Payers, which became effectiveon May 1, 2018. Pursuant to these circulars, the deduction rates of 17% and 11% applicable to the taxpayers who have VAT taxable sales activities orimported goods were adjusted to 16% and 10%, respectively. In addition, the small-scale VAT taxpayer are now defined as those whose annual salesare no more than RMB5 million.On November 7, 2018, the Ministry of Finance and the SAT jointly issued the Circular on Policies on Enterprise Income Tax and Value-added Tax for Overseas Institutions Investing in the Domestic Bond Market, or Circular 108. Pursuant to the Circular 108, effective fromNovember 7, 2018 to November 6, 2021, enterprise income tax and VAT shall be temporarily exempted on income from bond interests derived byoverseas institutions from investments in domestic bond market. The scope of the aforesaid temporary exemption of enterprise income tax shallexclude bond interests derived by the institutions or establishments that are set up within China by overseas institutions if such income has an actualconnection with the institutions or establishments. On March 20, 2019, the Ministry of Finance, SAT and General Administration of Customs issuedthe Announcement on Relevant Policies for Deepening Value-Added Tax Reform, or Circular 39, which became effective on April 1, 2019. Under theCircular 39, among others, (i) the applicable VAT rate of 16% for taxable sales or imported goods of a VAT general taxpayer, is adjusted to 13%, andthe applicable VAT rate of 10% is adjusted to 9%; and (ii) the range for VAT input deduction is expanded by adding the domestic transport services,the applicable deduction rate for airline and railway tickets is 9% of ticket value, and 3% for the waterway and highway tickets; (iii) taxpayers ofmanufacturing and living service industries shall be allowed to add an extra 10% based on the offsetable input VAT for the current period fordeduction of the tax payable from April 1, 2019 to December 31, 2021.Table of Contents87Dividend Withholding TaxPursuant to the EIT Law and the EIT Implementation Rules, dividends generated after January 1, 2008 and payable by a foreign-investedenterprise in China to its foreign investors are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has atax treaty with China that provides for a different withholding arrangement. We are a Cayman Islands holding company and the majority of ourincome may come from dividends we receive from our PRC subsidiaries directly or indirectly. Since there is no such tax treaty between China and theCayman Islands, dividends we receive from our PRC subsidiaries will generally be subject to a 10% withholding tax.Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of DoubleTaxation and Tax Evasion on Income, or the Tax Arrangement, where a Hong Kong resident enterprise which is considered a non-PRC tax residententerprise directly holds at least 25% equity interests in a PRC enterprise, the withholding tax rate in respect of the payment of dividends by suchPRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local taxauthority. Pursuant to the Notice of the SAT on the Issues concerning the Application of the Dividend Clauses of Tax Agreements, or SAT Circular81, issued on February 20, 2009, a resident enterprise of the counter-party to such Tax Arrangement should meet the following conditions, amongothers, in order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must directly own the required percentage of equity interestsand voting rights in such PRC resident enterprise; and (ii) it should directly own such percentage in the PRC resident enterprise anytime in the12 months prior to receiving the dividends. There are also other conditions for enjoying such reduced withholding tax rate according to other relevanttax rules and regulations. Pursuant to the Administrative Measures for Non-Resident Taxpayer to Enjoy Treatments under Tax Treaties issued by theSAT, or SAT Circular 60, on August 27, 2015, which became effective on November 1, 2015, any non-resident taxpayer may be entitled to suchreduced withholding tax rate automatically if such non-resident taxpayer satisfies the conditions prescribed in the relevant tax rules and regulations,and obtains the approvals required under the administrative measures described in the preceding sentence. The SAT issued the Announcement of StateTaxation Administration on Promulgation of the Administrative Measures on Non-resident Taxpayers Enjoying Treaty Benefits, or SAT Circular 35,on October 14, 2019, which became effective on January 1, 2020. The SAT Circular 35 further simplified the procedures for enjoying treaty benefitsand replaced the SAT Circular 60. According to the SAT Circular 35, no approvals from the tax authorities are required for a non-resident taxpayer toenjoy treaty benefits. Where a non-resident taxpayer self-assesses and concludes that it satisfies the criteria for claiming treaty benefits, it may enjoytreaty benefits at the time of tax declaration or at the time of withholding through the withholding agent, but it shall gather and retain the relevantmaterials as required for future inspection, and accept follow-up administration by the tax authorities. However, according to the SAT Circular 81, ifthe relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, therelevant tax authorities may adjust the favorable withholding tax in the future.On February 3, 2018, the SAT issued the Announcement of the SAT on Issues concerning the “Beneficial Owner” in Tax Treaties, whichclarifies the interpretation of the beneficial ownership requirement in the dividends, interest and royalty articles of Chinese double tax agreements andprovides a more flexible guidance to determine whether the applicant engages in substantive business activities.On September 29, 2018, the Ministry of Finance, SAT, NDRC and MOFCOM jointly released the Notice on Expanding the ApplicationScope of Withholding Tax Deferral Treatment on Direct Reinvestments Made by Foreign Investors, or Circular 102, to further encourage foreigninvestments in China. According to the Circular 102, when certain conditions are met, increase of paid-in capital/capital reserve in the existinginvestee company by its foreign investor using its attributable/distributable profits is considered a direct equity investment and withholding taxdeferral treatment may apply.Table of Contents88U.S. Foreign Account Tax Compliance ActUnder Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended, commonly referred to as the Foreign Account TaxCompliance Act (“FATCA”), withholding at a rate of 30% will generally be required on certain U.S.-source payments made to certain non-U.S.entities (including investment funds and non-U.S. entities acting as intermediaries). In general, the 30% withholding tax applies to certain paymentsmade to a non-U.S. entity unless (i) the non-U.S. entity is a “foreign financial institution” and the non-U.S. entity undertakes certain due diligence,reporting, withholding, and certification obligations, (ii) the non-U.S. entity is a “non-financial foreign entity” and the non-U.S. entity identifiescertain of its U.S. investors or provides certification that it does not have any such investors, or (iii) the non-U.S. entity is otherwise exempt fromFATCA. An intergovernmental agreement between the United States and another country may also modify these requirements. The Cayman Islandshas entered into a Model 1 intergovernmental agreement with the United States, which gives effect to the automatic tax information exchangerequirements of FATCA, and a similar intergovernmental agreement with the United Kingdom. We will be required to comply with the CaymanIslands Tax Information Authority Law (2014 Revision) (as amended) together with regulations and guidance notes made pursuant to such law thatgive effect to the intergovernmental agreements with the United States and the United Kingdom. We do not believe FATCA will have a materialimpact on its business or operations, but because FATCA is particularly complex and the intergovernmental agreement with the PRC, though agreedto in substance, has not been published, and PRC regulations or guidance notes have not been published, we cannot assure you that it will not beadversely affected by this legislation in the future.Common Reporting StandardSimilarly, the OECD has developed the CRS and modeled competent authority agreement to enable the multilateral and automatic exchangeof financial account information, which has been adopted by many jurisdictions. CRS and its implementing legislations in China and Hong Kongrequire financial institutions to identify and report the tax residency and account details of non-resident customers to the relevant authorities injurisdictions adhering to CRS.On May 9, 2017, the SAT, Ministry of Finance, PBOC, CBRC, CSRC, and CIRC promulgated the Administrative Measures on DueDiligence Checks on Tax-related Information of Non-residents’ Financial Accounts, or the CRS Due Diligence Measures, which requires thatfinancial institutions shall register with the SAT official website and report the information in a timely manner. As the CRS Due Diligence Measuresrequires, the private fund in the form of limited partnership or limited liability company and its fund manager are defined as qualified financialinstitution; the foregoing private funds and fund managers and other qualified financial institutions prescribed in the CRS Due Diligence Measuresshall comply with their obligations thereunder. Several subsidiaries of our company, as well as the private funds under our management, havecomplied with the CRS Due Diligence Measures and reported to the SAT as required. On September 6, 2018, the arrangements for the multilateraland automatic exchange of financial account information between China and Hong Kong became effective. Hong Kong and China conducted the firstautomatic exchange of financial account information in September 2018, and many jurisdictions (including Hong Kong) have promised to implementthe multilateral and automatic exchange of financial account information.Regulations on Foreign ExchangeForeign exchange regulations in China are primarily governed by the following rules:●Foreign Exchange Administration Rules (1996), as amended, or the Exchange Rules; and●Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules.Under the Exchange Rules, the Renminbi is convertible for current account items, including the distribution of dividends, interest and royaltypayments, trade and service-related foreign exchange transactions. Conversion of Renminbi for capital account items, such as direct investment, loan,securities investment and repatriation of investment, however, is still subject to the approval of the SAFE.Under the Administration Rules, FIEs may only buy, sell and/or remit foreign currencies at banks authorized to conduct foreign exchangebusiness after providing valid commercial documents required and, in the case of capital account item transactions, obtaining approval from SAFE.Capital investments by FIEs outside of China are also subject to limitations, including approval by regulatory government bodies like the MOFCOM,SAFE and the NDRC or their local counterparts.Table of Contents89On May 10, 2013, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration overDomestic Direct Investment by Foreign Investors and the Supporting Documents, which specifies that the administration by SAFE or its localbranches over direct investment by foreign investors in the PRC shall be conducted by way of registration. Institutions and individuals shall registerwith SAFE and/or its branches for their direct investment in the PRC. Banks shall process foreign exchange business relating to the direct investmentin the PRC based on the registration information provided by SAFE and its branches.On March 30, 2015, the SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming the ManagementApproach regarding the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises, or the SAFE Circular 19, which took effect andreplaced previous regulations from June 1, 2015. Pursuant to SAFE Circular 19, up to 100% of foreign currency capital of a foreign-investedenterprise may be converted into RMB capital according to the actual operation of the enterprise within the business scope at its will and the RMBcapital converted from foreign currency registered capital of a foreign-invested enterprise may be used for equity investments within the PRCprovided that such usage shall fall into the business scope of the foreign-invested enterprise, which will be regarded as the reinvestment of foreign-invested enterprise. Although the SAFE Circular 19 allows for the use of RMB converted from the foreign currency-denominated capital for equityinvestments in the PRC, the restrictions continue to apply as to foreign- invested enterprises’ use of the converted RMB for purposes beyond thebusiness scope, for entrusted loans or for inter-company RMB loans. If our Consolidated Affiliated Entities require financial support from us or ourwholly owned subsidiary in the future and we find it necessary to use foreign currency-denominated capital to provide such financial support, ourability to fund our Consolidated Affiliated Entities’ operations will be subject to statutory limits and restrictions, including those described above. OnJune 9, 2016, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the ForeignExchange Settlement Management Policy of Capital Account, or the SAFE Circular 16, which reiterates some of the rules set forth in Circular 19, butchanges the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company toissue RMB entrusted loans to a prohibition against using such capital to issue loans to non-affiliated enterprises. In addition, the SAFE promulgatedthe Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment on October 23, 2019, or the SAFE Circular 28,pursuant to which all foreign-invested enterprises can make equity investments in the PRC with their capital funds in accordance with laws andregulations. On April 10, 2020, the SAFE promulgated Notice of the SAFE on Optimizing Foreign Exchange Administration to Support theDevelopment of Foreign-related Business, or the SAFE Circular 8, which took effect on the same date. According to the SAFE Circular 8, under theprerequisite of ensuring true and compliant use of funds and compliance with the prevailing administrative provisions on use of income under thecapital account, enterprises which satisfy the criteria are allowed to use income under the capital account, such as capital funds, foreign debt andoverseas listing, etc. for domestic payment, without prior provision of proof materials for veracity to the bank for each transaction.On February 13, 2015, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Simplifying andImproving the Foreign Exchange Administration Policies on Direct Investments, or the SAFE Circular 13, which took effect on June 1, 2015. TheSAFE Circular 13 specifies that the administrative examination and approval procedures with the SAFE or its local branches relating to the foreignexchange registration approval for domestic direct investments as well as overseas direct investments have been canceled, and qualified banks aredelegated the power to directly conduct such foreign exchange registrations under the supervision of the SAFE or its local branches.Regulations on Dividend DistributionAs the Foreign Investment Law came into effect on January 1, 2020 and replaced the Old FIE Laws, the principal regulations governingdividend distributions of wholly foreign-owned companies include the PRC Company Law, the EIT Law, and its implementation rules.Under the current regulatory regime in the PRC, foreign-invested enterprises in the PRC may pay dividends only out of their retainedearnings, if any, determined in accordance with PRC accounting standards and regulations. A PRC company is required to set aside as statutoryreserve funds at least 10% of its after-tax profit, until the cumulative amount of such reserve funds reaches 50% of its registered capital unless lawsregarding foreign investment provide otherwise. A PRC company shall not distribute any profits until any losses from prior fiscal years have beenoffset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year.Table of Contents90Regulations on Offshore Investment by PRC ResidentsOn July 4, 2014, the SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Administration on DomesticResidents’ Offshore Investment, Financing and Round-Trip Investment via Special Purpose Vehicles, or the SAFE Circular 37, which terminated theCircular on Relevant Issues Concerning Foreign Exchange Administration on PRC Residents’ Financing and Round-Trip Investment via OffshoreSpecial Purpose Vehicles, or the SAFE Circular 75, and became effective on the same date. The SAFE Circular 37 and its detailed guidelines requirePRC residents to register with the local branch of the SAFE before contributing their legally owned onshore or offshore assets or equity interests intoany special purpose vehicle directly established, or indirectly controlled, by them for the purpose of investment or financing; and when there is (a) anychange to the basic information of the SPV, such as any change relating to its individual PRC resident shareholders, name or operation period or(b) any material change, such as increase or decrease in the share capital held by its individual PRC resident shareholders, a share transfer orexchange of the shares in the SPV, or a merger or split of the SPV, the PRC resident must register such changes with the local branch of SAFE on atimely basis.On February 13, 2015, the SAFE further enacted the SAFE Circular 13 which took effect on June 1, 2015 and was further amended onDecember 30, 2019. The SAFE Circular 13 has delegated to the qualified banks the authority to register all PRC residents or entities’ investment andfinancing in special purpose vehicles pursuant to the SAFE Circular 37, except that those PRC residents who have failed to comply with SAFECircular 37 will remain to fall into the jurisdiction of the local SAFE branch and must make their supplementary registration application with the localSAFE branch. In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfill the required SAFE registration, thePRC subsidiaries of that special purpose vehicle may be prohibited from distributing profits to the offshore parent and from carrying out subsequentcross-border foreign exchange activities. In addition, the special purpose vehicle may be restricted in its ability to contribute additional capital into itsPRC subsidiary. Moreover, failure to comply with various SAFE registration requirements described above would result in liability for foreignexchange evasion under PRC laws.Regulations on Stock Incentive PlansOn December 25, 2006, the PBOC promulgated the Administrative Measures of Foreign Exchange Matters for Individuals, setting forth therespective requirements for foreign exchange transactions by individuals (both PRC or non-PRC citizens) under either the current account or thecapital account. On January 5, 2007, the SAFE issued the Implementing Rules of the Administrative Measures for Personal Foreign Exchange, which,among other things, specified approval requirements for certain capital account transactions such as a PRC citizen’s participation in the employeestock ownership plans or stock option plans of an overseas publicly-listed company. On February 15, 2012, the SAFE issued the Circular of the StateAdministration of Foreign Exchange on Issues Related to Foreign Exchange Administration in Domestic Individuals’ Participation in EquityIncentive Plans of Companies Listed Abroad, or the Stock Incentive Plan Rules, which terminated the Operation Rules on the Foreign ExchangeAdministration of the Participation of Domestic Individuals in Overseas Listed Companies’ Employee Stock Ownership Plans and Share OptionSchemes issued by the SAFE on March 28, 2007. The purpose of the Stock Incentive Plan Rules is to regulate foreign exchange administration ofPRC domestic individuals who participate in employee stock holding plans or stock option plans of overseas listed companies.According to the Stock Incentive Plan Rules, if PRC “domestic individuals” (both PRC residents and non-PRC residents who reside in thePRC for a continuous period of not less than one year, excluding the foreign diplomatic personnel and representatives of international organizations)participate in any stock incentive plan of an overseas listed company, a PRC domestic qualified agent, which could be the PRC subsidiary of suchoverseas listed company, shall, among others things, file, on behalf of such individual, an application with the SAFE to conduct the SAFE registrationwith respect to such stock incentive plan, and obtain approval for an annual allowance with respect to the purchase of foreign exchange in connectionwith stock holding or stock option exercises. With the SAFE registration certificate for stock incentive plan, the PRC domestic qualified agent shallopen a special foreign exchange account at a PRC domestic bank to hold the funds required in connection with the stock purchase or option exercise,any returned principal or profits upon sales of stock, any dividends issued upon the stock and any other income or expenditures approved by SAFE.Such PRC individuals’ foreign exchange income received from the sale of stock and dividends distributed by the overseas listed company and anyother income shall be fully remitted into a special foreign currency account opened and managed by the PRC domestic qualified agent beforedistribution to such individuals.Table of Contents91Regulations on Securities Offering and Listing Outside of the PRCOn December 24, 2021, the CSRC promulgated the Provisions of the State Council on the Administration of Overseas Securities Offeringand Listing by Domestic Companies (Draft for Comments), or the Draft Overseas Listing Administration Provisions, and the AdministrativeMeasures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), or the Draft Overseas ListingFiling Measures, to regulate overseas securities offering and listing activities by domestic companies either in direct or indirect form.The Draft Overseas Listing Administration Provisions apply to overseas offerings by domestic companies of equity shares, depositoryreceipts, convertible corporate bonds, or other equity-like securities, as well as overseas listing of the securities for trading. Both direct and indirectoverseas securities offering and listing by domestic companies would be regulated, of which the former refers to securities offering and listing in anoverseas market made by a joint-stock company incorporated domestically, and the latter refers to securities offering and listing in an overseas marketmade by an domestic company that operates the main business domestically, in name of an overseas entity, based on its underlying equity, assets,earnings or other similar rights. According to the Draft Overseas Listing Filing Measures, the identification of indirect overseas offering and listing byan domestic company shall follow the principle of substance over form, and where the following conditions are met by an issuer, the overseas offeringand listing of such issuer shall be determined as an indirect overseas offering and listing by an domestic company, which are (i) the total assets, netassets, revenues or gross profits of the domestic company(ies) of the issuer in the most recent financial year account for more than 50% of thecorresponding figure in the issuer’s audited consolidated financial statements over the same period; and (ii) the majority of the senior management incharge of business operation and management of the issuer are PRC citizens or habitually reside in the PRC, and its main places of business operationare located in the PRC or main business activities are conducted in the PRC.Under the Draft Overseas Listing Administration Provisions and the Draft Overseas Listing Administration Provisions, a filing-basedregulatory system would be implemented covering both direct and indirect overseas offering and listing. For an indirect initial public offering andlisting in an overseas market, the issuer shall designate a major domestic operating entity to submit the filing documents to the CSRC within 3working days after such application of overseas offering and listing is submitted. The CSRC would, within 20 working days if filing documents arecomplete and in compliance with the stipulated requirements, issue a filing notice thereof and publish the filing information on the CSRC’s officialwebsite. While for confidential filings of overseas offering and listing application documents, the designated filing entity may apply for an extensionof the publication of such filing. The issuer shall report to the CSRC within 3 working days after the overseas offering and listing applicationdocuments become public. In addition, after the issuer completes the overseas initial public offering and listing, it shall file the status of overseasoffering and listing as required by the CSRC.Meanwhile, the Draft Overseas Listing Administration Provisions stipulate certain circumstances under which the overseas offering andlisting would be prohibited, including but not limited to that (i) the offering and listing are expressly forbidden by the PRC laws, regulations andrelevant rules; (ii) the intended overseas securities offering and listing constitute a threat to or endanger national security as reviewed and determinedby competent authorities under the State Council in accordance with laws, or (iii) there are material disputes with respect to the ownership of theequity, major assets, and core technologies, etc.. If a domestic company falls into any of the circumstances where overseas offering and listing isprohibited prior to the overseas offering and listing, the CSRC and the competent authorities under the State Council shall impose a postponement ortermination of the intended overseas offering and listing. The CSRC may cancel the corresponding filing if the intended overseas offering and listingapplication documents has been filed.If domestic companies fail to fulfill the above-mentioned filing procedures or offer and list in an overseas market against the prohibitedcircumstances, they would be warned and fined up to RMB10 million and even ordered to suspend relevant business or halt operation forrectification, revoke relevant business permits or business license in severe cases. The controlling shareholders, actual controllers, directors,supervisors, and senior management of such domestic companies would be warned and fined up to RMB5 million separately or aggregately. Also, ifthere is any material fact concealed or any major content falsified in the filing documents, a fine between RMB1 million and RMB10 million wouldbe imposed on domestic companies if the securities have not already been offered, or a fine between ten percent and one hundred percent of the fundsraised would be imposed if the securities have already been offered.Table of Contents92U.S. Foreign Account Tax Compliance ActUnder Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended, commonly referred to as the Foreign Account TaxCompliance Act, or FATCA, withholding at a rate of 30% will generally be required on certain non-U.S. entities (including investment funds and non-U.S. entities acting as intermediaries). In general, the 30% withholding tax applies to certain payments made to a non-U.S. entity unless (i) the non-U.S. entity is a “foreign financial institution” and the non-U.S. entity undertakes certain due diligence, reporting, withholding, and certificationobligations, (ii) the non-U.S. entity is a “nonfinancial foreign entity” and the non-U.S. entity identifies certain of its U.S. investors or providescertification that it does not have any such investors, or (iii) the non-U.S. entity is otherwise exempt from FATCA. An intergovernmental agreementbetween the United States and another country may also modify these requirements. The Cayman Islands has entered into a Model 1intergovernmental agreement with the United States, which gives effect to the automatic tax information exchange requirements of FATCA, and asimilar intergovernmental agreement with the United Kingdom. We will be required to comply with the Cayman Islands Tax Information AuthorityAct (As Revised) together with regulations and guidance notes made pursuant to such law that give effect to the intergovernmental agreements withthe United States and the United Kingdom.Regulations in Hong KongSecurities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong), or SFOLicensed entities that conduct regulated activities within the meaning of the SFO in Hong Kong are regulated by the Hong Kong SecuritiesFutures Commission (“SFC”), a statutory body independent from the government of Hong Kong to regulate Hong Kong’s securities and futuresmarkets. It is funded mainly by transaction levies and licensing fees.Under the SFO, any corporation carrying on one or more regulated activities must apply to the SFC for a license in respect of the regulatedactivities that they plan to carry on, and any individual who carries on one or more regulated activities on behalf of a licensed corporation is alsorequired to apply for approval as a “licensed representative” accredited to that corporation.Noah HK, our wholly owned subsidiary, was licensed with the SFC on January 4, 2012 to carry out Type 1 regulated activity (dealing insecurities), Type 4 regulated activity (advising on securities) and Type 9 regulated activity (asset management). Noah HK serves as an offshoreproduct and service center which offers wealth management and asset management services to professional investors as defined in the SFO. With theaforementioned licenses in place, Noah HK is able to provide investment advisory services and distribute, offer and manage investment products forour clients in Hong Kong.Licensed entities are required to comply with the SFO, its sub-legislations and other relevant codes and guidelines including the (i) Code ofConduct for Persons Licensed by or Registered with the SFC (“Code of Conduct”), (ii) Guideline on Anti-Money Laundering and Counter-Financingof Terrorism (“Guideline on AML”), (iii) Management, Supervision and Internal Control Guidelines for Persons Licensed by or Registered with theSFC (“Internal Control Guideline”), (iv) Suggested Control Techniques and Procedures for Enhancing a Firm’s Ability to Comply with the Securitiesand Futures (Client Securities) Rules and the Securities and Futures (Client Money) Rules (“Client Securities/Money Rules”), (v) the Fund ManagerCode of Conduct (“FM Code of Conduct”), and (vi) suitability circulars/FAQs and other relevant regulatory requirements.The Client Securities/Money Rules provide guidelines on the treatment of client assets and how they should be properly safeguarded. TheCode of Conduct sets out the general conduct requirements for licensed persons and other regulatory expectations on topics such as know you client(KYC), diligence, responsibility of senior management and conflicts of interest. The Guideline on AML set outs the requirements and the standardson the subjects of anti-money laundering and counter-terrorist financing (AML/CTF) and practical guidance to assist licensed persons and their seniormanagement in designing and implementing policies, procedures and controls in the relevant operational areas, taking into consideration their specialcircumstances so as to meet the relevant AML/CTF statutory and regulatory requirements.The suitability circulars/FAQs outlines the general requirements and factors to be considered when providing investment advices to client.The FM Code of Conduct sets out conduct requirements for licensed persons whose business involves the discretionary management ofcollective investment schemes and/or discretionary accounts.Table of Contents93Insurance Ordinance (Cap. 41 of the Laws of Hong Kong)Noah Insurance was validly registered with The Hong Kong Confederation of Insurance Brokers (a former self-regulatory organization forinsurance brokers approved by the Office of the Commissioner of Insurance) as an authorized insurance broker from 2014 until the commencement ofthe new regulatory regime for insurance intermediaries on 23 September 2019 on which date the Insurance Authority (IA) took over from relevantself-regulatory organizations all aspects of the regulation of insurance intermediaries in Hong Kong pursuant to the Insurance Ordinance (Cap. 41).Under the new regulatory regime, Noah Insurance is deemed to be a licensed insurance intermediary as a licensed insurance broker company for aperiod of 3 years from the commencement of the new regime unless the licence is revoked in accordance with the Insurance Ordinance. NoahInsurance is permitted to carry on the Long Term Business (excluding linked long term) within the meaning of the Insurance Ordinance. As aninsurance broker, Noah Insurance must comply with the minimum requirements specified in the guideline issued pursuant to the Insurance Ordinanceby IA.Trustee Ordinance (Cap. 29 of the Laws of Hong Kong)ARK Trust (Hong Kong) Limited has complied with the requirements of section 77 of the Trustee Ordinance and has been registered as atrust company under section 78(1) of the Trustee Ordinance since 2014. Accordingly, ARK Trust (Hong Kong) Limited may act as trustee inaccordance with the Trustee Ordinance.83Table of Contents94C.Organizational StructureWe are an exempted company incorporated with limited liability under the laws of the Cayman Islands with major subsidiaries and affiliatedentities in China, Hong Kong, the United States and other jurisdictions. We mainly operate our business through the following significant subsidiariesand Consolidated Affiliated Entities, as of December 31, 2021: Percentage Place ofof Date of Incorporation Incorporation Ownership Noah Upright Fund Distribution Co., Ltd. (formerly known asNoah Upright (Shanghai) Fund Investment Consulting Co.,Ltd.)November 18, 2003 PRC 100%Shanghai Noah Investment (Group) Co., Ltd. (formerly known asShanghai Noah Rongyao Investment Consulting Co., Ltd.)August 24, 2007 PRC 100%Shanghai Noah Financial Services Corp.April 18, 2008 PRC 100%Noah Insurance (Hong Kong) LimitedJanuary 3, 2011 Hong Kong 100%Noah Holdings (Hong Kong) LimitedSeptember 1, 2011Hong Kong 100%Gopher Capital GP LimitedMay 11, 2012 Cayman Islands 100%Zigong Noah Financial Service Co., Ltd.October 22, 2012 PRC 100%Kunshan Noah Rongyao Investment Management Co., Ltd.December 2, 2015PRC 100%Shanghai Noah Chuangying Enterprise Management Co., Ltd.December 14, 2015PRC 100%Wuhu Fangtiao Technology Co., Ltd.November 28, 2019PRC 100%Shanghai Nuohong Real Estate Co., Ltd.May 30, 2013PRC 100%Noah Rongyitong (Wuhu) Microloan Co., Ltd.August 13, 2013PRC100%(1)Joy Triple Star Holdings LimitedJanuary 12, 2018British Virgin Islands100%Joy Paradise LimitedMarch 29, 2018British Virgin Islands100%Shanghai Glory Information Technology Co., Ltd.March 2, 2011PRC100%Joy Bright Management LimitedJune 11, 2013British Virgin Islands100%Gopher US Management II, L.L.C.February 27, 2019USA100%ARK Trust (Hongkong) LimitedSeptember 15, 2014Hong Kong100%Noah International (Hong Kong) LimitedJanuary 7, 2015Hong Kong100%Noah Insurance Services, LLCFebruary 10, 2017USA100%Noah Holdings International LimitedOctober 11, 2016Cayman Islands100%Shanghai Noah Investment Management Co., Ltd.August 26, 2005 PRC Controlled under theContractual ArrangementGopher Asset Management Co., Ltd.February 9, 2012 PRC Controlled under theContractual ArrangementWuhu Gopher Asset Management Co., Ltd.October 10, 2012 PRC Controlled under theContractual ArrangementShanghai Gopher Asset Management Co., Ltd.December 14, 2012 PRC Controlled under theContractual ArrangementShanghai Gopher Massa Asset Management Co., Ltd.June 29, 2015PRCControlled under theContractual Arrangement(1)Noah Rongyitong (Wuhu) Microloan Co., Ltd. was indirectly held as to 75% by our Company, and 25% by Noah Investment through theContractual Arrangements.Table of Contents95Our corporate structure, for the purpose of reflecting Noah Holdings Limited and its relationship with its significant subsidiaries, as that termis defined under Section 1-02 of Regulation S-X under the Securities Act, as well as the Consolidated Affiliated Entities, is as follows:Note:(1)The registered shareholders of Noah Investment consisted of (i) Ms. Jingbo Wang, (ii) Mr. Zhe Yin, (iii) Mr. Boquan He, (iv) Ms. Xinjun Zhang, (v) Ms. YanWei, and (vi) Ms. Qianghua Yan.(2)Our company indirectly held all the equity interests in Shanghai Nuohong through certain insignificant subsidiaries.(3)Our company indirectly held all the equity interests in Noah Insurance Services, LLC through certain insignificant subsidiaries.(4)Our company indirectly held all the equity interests in Gopher US Management II, L.L.C. through certain insignificant subsidiaries.(5)Noah Rongyitong (Wuhu) Microloan Co., Ltd. was indirectly held as to 75% by our Company, and 25% by Noah Investment through the ContractualArrangements.(6)Wuhu Fangtiao Technology Co., Ltd. was indirectly held as to 100% by Noah Upright.(7)Shanghai Gopher was directly held as to 80% by Gopher Asset Management Co., Ltd. and indirectly held as to 20% by Noah Investment.Table of Contents96Contractual ArrangementsExclusive Option Agreement. Pursuant to an exclusive option agreement entered into by the Registered Shareholders and Noah Group inSeptember 2007, or the Exclusive Option Agreement, the Registered Shareholders granted Noah Group or its third-party designee an irrevocable andexclusive option to purchase all or part of their equity interests in Noah Investment when and to the extent permitted by PRC law. The purchase priceshall be the higher of the minimum amount required by PRC law or an amount determined by Noah Group. Noah Group may exercise such option atany time and from time to time until it has acquired all equity interests of Noah Investment. During the term of this agreement, the shareholders ofNoah Investment are prohibited from transferring their equity interests in Noah Investment to any third party, and Noah Investment is prohibited fromdeclaring and paying any dividend without Noah Group’s prior consent. The term of this exclusive option agreement is ten years and will beautomatically renewed upon expiration of each ten-year period if there has been no objection by each party thereunder.Exclusive Support Service Agreement. Pursuant to an the exclusive support service agreement entered into by Noah Investment and NoahGroup in September 2007, or the Exclusive Support Service Agreement, Noah Investment engages Noah Group as its exclusive technical andoperational consultant to support Noah Investment’s operational activities. Noah Group has agreed to provide certain support services to NoahInvestment, including client management, technical and operational support and other services, for which Noah Investment has agreed to pay to NoahGroup service fees determined based on actual services provided, which shall be the income of Noah Investment, less (i) expenses and costs, and (ii)the License Fee (as defined below). Noah Group is also obligated to grant Noah Investment licenses to use certain intellectual property rights, forwhich Noah Investment has agreed to pay license fees, or the License Fee, at the rates set by the board of Noah Group. The term of the ExclusiveSupport Service Agreement is ten years and will be automatically renewed upon expiration of each ten-year period if no objection by each partythereunder.Share Pledge Agreement. Pursuant to the a share pledge agreement entered into by each of the Registered Shareholders and Noah Group inSeptember 2007, or the Share Pledge Agreement, the Registered Shareholders pledged all of their equity interests in Noah Investment, or the PledgeEquity Interests, to Noah Group as collateral to secure their obligations under the Exclusive Option Agreement. and Noah Investment’s obligationsunder the Exclusive Support Service Agreement. In the case that Noah Investment increases its registered capital upon prior written consent of NoahGroup, the Pledge Equity Interests shall include all the additional equity interests subscribed by the Registered Shareholders in such capital increase.If Noah Investment or the Registered Shareholders breach any of their respective obligations under the Exclusive Support Service Agreement or theExclusive Option Agreement, Noah Group, as the pledgee, will be entitled to certain rights, including being repaid in priority by the proceeds fromauction or sale of the Pledge Equity Interests. The term of the share pledge is same as that of Exclusive Option Agreement. The share pledges underthe Share Pledge Agreement have been registered with competent branches of the SAMR.Powers of Attorney. Each of the Registered Shareholders of Noah Investment has executed a power of attorney in September 2007, or thePower of Attorney, respectively, to grant Noah Group or its designee the power of attorney to act on his or her behalf on all matters pertaining toNoah Investment and to exercise all of his or her rights as a shareholder of Noah Investment, including the right to attend shareholders meetings,appoint board members and senior management members, other voting rights and the right to transfer all or a part of his or her equity interests inNoah Investment. The Powers of Attorney shall remain irrevocable and effective during the period that the Registered Shareholders areshareholders of Noah Investment.In the opinion of Zhong Lun Law Firm, our PRC legal counsel:·the ownership structure of Noah Investment and Noah Group does not result in a violation of any applicable PRC laws and regulationscurrently in effect; and·the Contractual Arrangements among Noah Group, Noah Investment, and the Registered Shareholders governed by PRC laws are valid,legal and binding, and do not result in a violation of any applicable PRC laws or regulations currently in effect.Table of Contents97We have been advised by our PRC legal counsel that there are substantial uncertainties regarding the interpretation and application of currentand future PRC laws and regulations, and accordingly, the PRC regulatory authorities or courts may take a view that is contrary to the above opinionof our PRC legal counsel. It is uncertain whether any other new PRC laws or regulations relating to contractual arrangements will be adopted or ifadopted, what they would provide. If our corporate structure and the Contractual Arrangements are deemed by relevant regulatory authority or courtto be illegal or invalid, either in whole or in part, we may lose control of our Consolidated Affiliated Entities and have to modify such structure tocomply with regulatory requirements. However, there can be no assurance that we can achieve this without material disruption to our business.Further, if our corporate structure and the Contractual Arrangements are found to be in violation of any existing or future PRC laws or regulations, therelevant regulatory authority would have broad discretion to take action in dealing with the violation or failure, in which case, we could be subject tosevere penalties, including being prohibited from continuing our operations or unwinding the Contractual Arrangements. See “Item 3. KeyInformation—D. Risk Factors—Risks Related to Corporate Structure—We are a Cayman Islands holding company primarily operating in Chinathrough our subsidiaries and Consolidated Affiliated Entities, including Noah Investment with which we have maintained Contractual Arrangementsand its subsidiaries in the PRC. Investors thus are not purchasing, and may never directly hold, equity interests in the Consolidated Affiliated Entities.There are substantial uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to suchagreements that establish the Contractual Arrangements for a portion of our China operations, including potential future actions by the PRCgovernment, which could affect the enforceability of the Contractual Arrangements with Noah Investment and its subsidiaries and, consequently,significantly affect the financial condition and results of operations of our company. If the PRC government finds that such agreements do not complywith PRC laws, regulations, and rules, or if these laws, regulations, and rules or the interpretation thereof change in the future, we could be subject tosevere penalties or be forced to relinquish our interests in Noah Investment and its subsidiaries or forfeit its rights under the ContractualArrangements.”D.Property, Plants and EquipmentOur principal executive offices are located in leased office space at Building 2, 1687 Changyang Road, Yangpu District, Shanghai andBuilding C and F, 32 Qinhuangdao Road, Yangpu District, Shanghai, which occupy approximately a total of 23,263 square meters. As of December31, 2021, we owned a total of two properties, with one property for office premises in Suzhou and one property to be used for headquarters inShanghai. The aggregate gross floor area of our owned properties is approximately 74,000 square meters. In May 2021, we purchased office premiseswith a gross floor area of approximately 72,000 square meters at 218, Shaohong Road, 1226 and 1256, South Shenbin Road, Minhang District,Shanghai, which will be used as our new headquarters. As of December 31, 2021, we also leased offices in Hong Kong, Taiwan, Silicon Valley, NewYork and Singapore, as well as leased offices for our service centers and headquarters across China. We consider these facilities to be suitable andadequate for current and anticipated management and operations of our business.Item 4A. Unresolved Staff CommentsNot applicable.Item 5. Operating and Financial Review and ProspectsYou should read the following discussion and analysis of our financial condition and results of operations in conjunction with ourconsolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from thoseanticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. RiskFactors” or in other parts of this annual report on Form 20-F.Table of Contents98A.Operating ResultsFactors Affecting Our Results of OperationsOur business is affected by factors relating to general economic conditions and the HNW wealth management services industry in China andother jurisdictions in which we operate, including:●Levels of individual investable financial assets and HNW population in China. We have benefited from the overall economic growth ofChina and the corresponding increased levels of individual investable financial assets and growing HNW population. The growth ofHNW wealth management services industry depends on the continuation of these trends.●Client awareness of HNW wealth management services. As Chinese HNW individuals become more sophisticated with respect to theirinvestment strategies and utilizing the value-added services provided by wealth management providers, an increasing number ofqualified and experienced wealth management service providers have focused on the development and innovation of investmentproducts, which will further boost the development of the industry.●Development of capital markets in China. Recent reforms in Chinese capital markets, including establishment of the Shanghai StockExchange Science and Technology Innovation Board, the Beijing Stock Exchange and registration-based IPO regime, provide greaterexit opportunities for private equity investments. The opening-up to foreign investments also facilitates globalization of China’s capitalmarket and encourages more trading and investment activities. These developments have in turn driven an expansion in the supply ofinvestment products, both of which has furthered the growth of the HNW wealth management services industry.●Macroeconomics and secondary market. Changes in investment demand or investment preferences brought about by factors such asperceived or actual general economic conditions in China and globally, including but not limited to changes in interest rates, inflationand political uncertainty, or performance of the secondary market could affect demand of our clients for our investment products andour operating results. Furthermore, as a portion of our revenues come from performance-based fees earned by investment productpartners, our performance is particularly sensitive to cycles in the secondary market as our investment products primarily consist ofmutual fund products and private secondary products. An active and booming secondary market generally provides more exitopportunities for our investments, better investment returns for our clients and more performance-based fees for us.●Regulatory and policy changes. The wealth management and asset management markets are subject to extensive governmentalregulation and policy changes, which may have a material impact on our performance. In particular, in recent years, PRC regulatoryauthorities published a series of new rules that restrict the issuance of non-standardized credit products, which had a material impact onour product mix, and accordingly affected our revenue structure and operating performance. See “Item 3. Key Information—D. RiskFactors—Risks Related to Our Business—Because the laws and regulations governing the industries of wealth management, assetmanagement and other businesses in China are developing and subject to further change, any failure to obtain or maintain requisiteapprovals, licenses or permits necessary to conduct our operations or any failure to comply with laws and regulations applicable to ourbusiness and services could harm our business.”While our business is influenced by general factors affecting our industry, our operating results are more directly affected by the followingCompany-specific factors:●Our ability to expand our client base and enhance client loyalty. Our revenue growth has been driven primarily by the increasingnumber of clients we serve, especially core clients including diamond and black card clients, and the investment products we offer ordistribute to these clients. We maintain and expand our client base primarily through our dedicated team of relationship managers andstrategic client center. We strive to enhance our client loyalty by offering attractive investment products, smooth and convenientinvestment process, various online and offline investor education and other client events.Table of Contents99●Our ability to increase transaction value, AUM and service fee rates. We generate revenues from the transaction value of investmentproducts we distribute and the AUM we manage. Our ability to maintain and increase our transaction value, AUM and service fee ratesin turn depends on the following factors:oOur ability to enhance cooperation with product partners and investment partners. We rely on cooperation with our productpartners and investment partners to provide investment products to our clients, and we generate a majority of our revenues fromservices fees paid by our product partners and investment partners. Our ability to collaborate with leading product partners andinvestment partners affects our ability to offer attractive products to our clients, maintain and increase our client base, grow ourtransaction value and AUM and obtain a resilient and favorable revenue structure. In addition, our continued success also dependson our ability to negotiate favorable service fee rates with our product partners and investment partners.oOur ability to grow our AUM and enhance the performance of investments managed by Gopher. We generate a substantial portionof revenue from our asset management business, which correspond directly to our domestic and overseas AUM, respectively. Ourability to grow our AUM depends on Gopher’s investment performance. To the extent that Gopher’s historical investmentperformance is not satisfactory, or that Gopher’s future investment performance is perceived to worsen in either relative or absoluteterms, the revenue and profitability of our asset management business will likely decline and our ability to grow existing funds andraise new funds in the future will likely be impaired.oOur ability to optimize our product mix. As a multi-asset allocator, our ability to adjust and transform our product mix due toevolving economic conditions, risk appetite of our clients and regulatory environment is vital to our business growth. We typicallycharge different fee rates for different kinds of products we distribute or manage, and our profitability could vary depending on themix our product offerings.●Our ability to innovate and effectively invest in technology. Our ability to innovate our products and value-added services and continueinvesting effectively in technology is key to improving our client experience and enhance client intention and loyalty. By investing inour technology platforms and fulfillment infrastructure cost-efficiently, we also strive to increase our operating efficiency, which alsoaffects our results of operations.●Our ability to manage risks. Our business operation exposes us to a number of risks, including economic fluctuations, unexpected legalor regulatory changes as well as risks related to our product partners and investment, investment portfolios of the products we distributeor offer, and other business counterparties. Our performance depends on our ability to foresee, identify and effectively manage theserisks. In the event of any default or unsatisfactory performance of the investment products we distribute or offer, our performance maybe negatively affected even if we do not guarantee the return of the investment products.●Our ability to enhance efficiency and productivity. The growth of our business will result in substantial demands on our management,operational, technological, financial and other resources. Our ability to control cost and manage working capital is key to our success.Our ability to streamline our operational human resources and improve efficiency of our relationship managers is key to our success.●Our ability to recruit and retain our relationship managers in our “Noah Triangles” solution service team. We rely on our relationshipmanagers in our “Noah Triangles” solution service team to distribute investment products and provide asset allocation andcomprehensive services to our clients, from which we derive substantially all of our revenues. Our ability to recruit and retain sufficienthigh quality relationship managers in our “Noah Triangles” solution service team in a cost-effective manner is crucial to our results ofoperation.Table of Contents100Impact of COVID-19The COVID-19 pandemic has caused an adverse impact on the Chinese and global economy, as well as the HNW wealth managementservices industry. Perceived or actual changes in investable assets and client confidence in the economy could reduce the demand for HNW and ultraHNW wealth management service we provide and negatively impact our operating results. We have experienced decrease in total revenues generatedfrom our overseas businesses and domestic value-added services as a result of the COVID-19 pandemic. Nevertheless, we achieved 30.1% and 21.5%year-over-year increases, respectively, in our total revenues and non-GAAP adjusted net income attributable to Noah’s shareholders from 2020 to2021. Following the outbreak of the COVID-19 pandemic, we have increased our investment in technology to develop online transactional andoperational capabilities. We are currently able to complete substantially all of our transactions and investor education online. In 2021, our businessoperation had substantially returned to normal levels.Recently, there has been an increasing number of COVID-19 cases, including the COVID-19 Delta and Omicron variant cases, in multiplecities in China. As a result, various measures, including travel restrictions and stay-at-home orders, have been reinstated and we may have to adjustvarious aspects of our operations. Any prolonged suspension of or slowdown in business operations and the instability of a workforce arising fromany potential mandatory quarantine requirements may negatively affect our business, financial condition and results of operations. In addition, thehighly-contagious Delta and Omicron variants of COVID-19 have caused authorities in various countries to reimpose restrictions such as maskmandates, curfews and prohibitions on large gatherings. There remain significant uncertainties surrounding COVID-19, including the existing andnew variants of COVID-19, and its further development as a global pandemic, including the effectiveness of vaccine programs against existing andany new variants of COVID-19.The extent to which the COVID-19 pandemic may continue to adversely affect the macro-economic environment and our business, ourresults of operations and financial condition remains uncertain, and will depend on future developments, including the duration and severity of theCOVID-19 pandemic, and actions taken to contain the pandemic or treat its impacts. We cannot assure you that we will be able to achieve the samelevel of total revenues and non-GAAP adjusted net income attributable to Noah’s shareholders that we previously achieved in the future. See “Item 3.Key Information—D. Risk Factors—Risks Related to Our Business—We may face risks related to natural disasters, health epidemics and otheroutbreaks, which could significantly disrupt our operations.”Key Performance IndicatorsWe utilize a set of non-financial and financial key performance indicators which our senior management reviews frequently. The review ofthese indicators facilitates timely evaluation of the performance of our business and effective communication of results and key decisions, allowingour business to react promptly to changing client demands and market conditions.Number of ClientsOur revenue growth has been driven primarily by (i) the increasing number of clients we serve, and (ii) the increasing number of our coreclients including diamond and black card clients. For our wealth management business, we closely monitor the numbers of both our core clients andactive clients as key operating metrics. For our asset management business, the majority of the AUM is sourced from our clients’ investments, so thenumber of clients will also have an influence on this segment.We assign each of our registered clients a relationship manager, and the number of new clients we may acquire is affected by the breadth ofour coverage network. Leveraging our broad coverage network and efficient “Noah Triangle” solution service team, we expect to increase ourcapability to cultivate and serve new clients, which may result in an increase in the number of new registered and active clients. For details on thenumber of our clients, see “Item 4. Information on the Company—B. Business Overview—Our Clients.”Table of Contents101Transaction ValueTransaction value is an operating metric specifically related to our wealth management business. It refers to the aggregate value of theinvestment products we distribute in a given period, which in turn affects the amount of our revenue, primarily one-time commissions and recurringservice fees. We provide to our clients four types of investment products that are originated and distributed in and outside of the PRC, (i) mutual fundproducts, (ii) private secondary products, (iii) private equity products, and (iv) other products we distribute, provide or manage but cannot beclassified into any of the above product categories. The product type determines whether we can receive one-time commissions, recurring service feesand/or performance-based income. For most investment products, we are entitled to one-time commissions and recurring service fees shared by fundmanagers over the duration of the investment in the products, and, in some cases, performance-based income shared by fund managers whendetermined.The table below sets out the aggregate transaction value of the different types of investment products that we distributed during the periodsindicated:Year Ended December 31,201920202021 RMB % RMB % RMB US$ %(in millions, except for percentages)Product type Mutual fund products 15,511 19.8 37,981 40.1 37,169 5,833 38.2Private secondary products 10,867 13.8 35,162 37.1 37,776 5,928 38.9Private equity products 14,279 18.2 17,876 (1) 18.9 18,069 (1) 2,835 18.6Other products 37,867 48.2 3,717 3.9 4,189 657 4.3All products 78,524 100.0 94,736 100.0 97,203 15,253 100.0(1)Following the enactment of Supervision Measures in October 2020, we ceased offering private equity products through our wealth managementbusiness, and we now provide private equity products only through our asset management arm, Gopher, which forms funds and raises capitaldirectly from our clients. In particular, in 2020, a total of RMB5.2 billion private equity products were offered by Gopher. The figures areincluded in the table for illustration and comparison purposes only.Over the last three years, our product mix has evolved due to the economic and market cycles in China and the changing regulatoryenvironment. From the third quarter of 2019, we ceased the offering of private credit products (classified in “other products” in the table above) andtransitioned to offer more standardized public securities products. This decision was based on a combination of (i) our understanding and anticipationof the changing regulatory and market environment, and (ii) our commercial evaluation of the risks related to private credit products. Our transactionvalue increased by 20.6% from RMB78.5 billion in 2019 to RMB94.7 billion in 2020, primarily due to a significant increase in our distribution ofstandardized mutual fund and private secondary products, demonstrating our success in the aforementioned transition. Our transaction value increasedby 2.6% from RMB94.7 billion in 2020 to RMB97.2 billion (US$15.3 billion) in 2021, primarily due to a slight increase in the distribution of privatesecondary products.AUMWe measure the performance of our asset management business primarily through AUM. AUM determines the recurring service fees andperformance-based income that we are able to collect over the life cycle of the investment products managed by us. Gopher’s AUM were RMB170.2billion, RMB152.8 billion and RMB156.0 billion (US$24.5 billion) as of December 31, 2019, 2020 and 2021, respectively. Gopher’s AUM decreasedfrom RMB170.2 billion as of December 31, 2019 to RMB152.8 billion as of December 31, 2020, as a result of the one-off voluntary redemptions ofoutstanding private credit products following the Camsing Incident. Gopher’s AUM increased from RMB152.8 billion as of December 31, 2020 toRMB156.0 billion (US$24.5 billion) as of December 31, 2021, primarily due to continued increase in our management of private equity assets,partially offset by voluntary redemption of credit and real estate assets.Table of Contents102For our asset management business, Gopher develops and manages alternative investments with underlying assets in China and overseas,denominated in Renminbi and foreign currencies, respectively. Historically, it developed and managed principally FoFs which invest in third-partymanaged funds, but it is also increasingly making direct investments in portfolio companies and co-investments with fund managers. Gopher alsomanages feeder funds that invest in certain single third-party managed master funds. Gopher focuses on the following categories of investmentsacross different types of asset classes:●private equity investments, including investments in the leading domestic and overseas private equity and venture capital funds throughFoFs, feeder funds and S funds, as well as direct and co-investments in companies and projects with investment partners;●public securities investments, mainly including target strategy funds, secondary market equity and bond FoF and MoM investmentswhich are sub-advised by outside fund managers, as well as direct investments in listed companies;●real estate investments, including funds primarily investing in commercial real estate properties such as office buildings in China, aswell as rental residential developments in the U.S., in the form of equity investments;●multi-strategy investments that invest in different types of assets, such as stocks, bonds, real estate or cash to create a nimbler andbroadly diversified portfolio. We use asset allocation principles to build multi-asset portfolios and multi or single family officeaccounts; and●other investments, including funds investing in private credit related underlying products. We have substantially ceased theseinvestments since the third quarter in 2019.The table below summarizes our AUM and typical management fee rates chargeable by asset management services provided by Gopher forthe last three years: As of December 31,201920202021TypicalTypicalTypicalmanagementmanagementmanagement fee rates RMB % fee rates RMB % fee rates RMB % (in billions, except for percentages)Product typePrivate equity investments 0.6%-2.0% 109.6 64.40.5%-2.0% 117.7 77.0 0.5%-2.1% 130.9 83.9Public securities investments 0.4%-1.9% 9.3 5.50.4%-1.4% 9.8 6.4 0.4%-1.7% 11.2 7.2Real estate investments 0.2%-2.3% 17.6 10.30.5%-2.2% 12.7 8.3 0.5%-2.3% 6.6 4.3Multi-strategies investments 0.5%-1.1% 8.8 5.20.6%-1.1% 7.1 4.6 0.6%-1.1% 5.9 3.8Other investments[1] 0.2%-1.4% 24.9 14.60.1%-0.6% 5.5 3.7 — 1.4 0.8All products 170.2 100.0 152.8 100.0 156.0 100.0[1]Since the first quarter of 2021, we reclassified all remaining mezzanine financing products linked to corporate merger and acquisitions and buyouts from credit to private equity in the amount of RMB4.7 billion, considering its nature is more akin to equity than credit. We have also revisedthe comparative period presentation to conform to current period presentationExcept for public securities investments, all AUMs are booked at cost basis, and reflect no mark-to-market effect during the periodsindicated.Long-duration private equity investments represent an increasing portion of the total AUM, which we expect to help us receive moreconsistent revenue from recurring service fees. Private equity investments as a percentage of total AUM grew from 64.4% as of December 31, 2019 to77.0% as of December 31, 2020, and further to 83.9% as of December 31, 2021, primarily due to the increasing demand for private equityinvestments as well as the accumulation effect for the strategy of fund investments with a long duration. Gopher has also been focusing on developingour co-investment and direct investment capabilities in recent years and expect such investments to increase in the future, further increasing the feerate we could charge from clients.Table of Contents103From the third quarter of 2019, Gopher ceased the offering of private credit products and transitioned to offer more standardized publicsecurities products. As a result, there was a decrease in the percentage of private credit products (classified in “other investments” in the table above)in Gopher’s total AUM from 14.6% as of December 31, 2019 to 3.7% as of December 31,2020, and further to 0.8% as of December 31, 2021, whilethe percentage of public securities products in Gopher’s total AUM increased from 5.5% as of December 31, 2019 to 6.4% as of December 31, 2020and 7.2% as of December 31, 2021.For real estate investments, Gopher has been strategically changed the investment strategy over the past few years, gradually shifting fromresidential real estate to commercial real estate domestically, due to the evolving risks and reward profile of these investments.In addition, over 75.0% of Gopher’s AUM as of December 31, 2021 can generate performance-based income if the investment returnsexceed certain thresholds, which are typically recorded when underlying investments are exited and monetized.Furthermore, in response to client demands for more overseas investment opportunities, we are cooperating with more overseas partners invarious asset classes and increased the amount of overseas investment. Our overseas AUM managed by Gopher GP were RMB25.2 billion, RMB25.2billion and RMB28.4 billion (US$4.5 billion), respectively, representing 14.8%, 16.5% and 18.2% of our total AUM for asset management businessas of December 31, 2019, 2020 and 2021, respectively.Components of Results of OperationsRevenuesWe derive revenues from three business segments: wealth management, asset management and other services. We generate revenuesprimarily from:Revenue from the Wealth Management BusinessWhen a client purchases an investment product recommended by the wealth management branch, the client typically subscribes for a fundmanaged by the relevant product provider. In connection with the purchase, our wealth management branch is entitled to receive fees from the fund orproduct provider for services provided and derive revenue accordingly, which include:a.from the fund, one-time commissions for fund-raising services that the wealth management branch provides to the fund at theestablishment of the fund;b.from the fund, recurring service fees for continuous portfolio management services provided to the fund over the duration of the fund,which is paid to us on a regular basis (typically quarterly, semi-annually or annually);c.in certain cases when we do not receive the recurring service fee from the fund in clause b., from the product provider, a portion of therecurring service fees received by the product provider from the fund for continuous portfolio management services provided, inconnection with the product distribution agreement with the relevant product provider, which is paid to us over the duration of the fundon a regular basis (typically quarterly, semi-annually or annually); andd.in certain cases, from the product provider, a portion of the performance-based income received by the product provider for continuous portfoliomanagement services provided from the fund, in connection with the product distribution agreement with the relevant product provider, which is basedon the extent to which the fund’s investment performance exceeds a certain threshold, which is also known as “carry”.We also earn one-time commissions from insurance companies by referring clients to purchase insurance products from them.Table of Contents104Revenue from the Asset Management BusinessWhen the investment product that the client purchases is offered by Gopher, Gopher is entitled to receive fees as the fund manager, andderive revenue accordingly, which include:a.from the fund, one-time commissions, when the investment product was primarily distributed directly by Gopher, instead of the wealthmanagement branch, for fund-raising services provided to the fund. Most of Gopher products were distributed by the wealthmanagement branch during the three years ended December 31, 2019, 2020 and 2021. Since the fourth quarter of 2020, as Gopher hasbeen selling all of our PE/VC investment products directly to comply with a new regulation1, one-time commissions in relation to suchproducts are recognized as revenue from the asset management segment.b.from the fund, recurring service fees for fund management services provided to the fund;c.from the fund, carry (as performance-based income) for fund management services provided to the fund and as an incentive for fundmanager to achieve excess return, which is based on the extent to which the fund’s investment performance exceeds a certain threshold;andGopher, as a proprietary product provider, enters into agreements on an arm’s length basis with our wealth management branch for productdistribution, and in accordance with such agreements, shares a portion of recurring service fees and performance-based income with the wealthmanagement branch in certain cases. To the extent of recurring service fees and performance-based income are shared with the wealth managementbranch, such intra-group revenue are deducted from our consolidated statements of operations.The above revenue model descriptions reflect the various contractual agreements for fee sharing among parties. The fees received by us areultimately born by our clients, as when the client subscribes to the fund, the client agrees that the fund pays Noah’s wealth management branch and/orthe relevant product provider, including Gopher, for services provided to the fund.The following table summarizes our revenues from both business segments: Wealth Management Segment Asset management SegmentOne-time commissionsFrom the fund–For fund raising services of productsdistributed by Noah UprightFrom insurance companies–For client referral servicesFrom the fund–For fund raising services of productsdirectly placed by GopherRecurring service feesFrom the fund and/or product provider–For portfolio management servicesprovidedFrom the fund–For fund management services andportfolio management services providedPerformance-based incomeFrom the product provider–For portfolio management servicesprovidedFrom the fund–For fund management services andportfolio management services provided1In accordance with the Supervision Measures which came into effect in October 2020, independent fund distribution institutions like NoahUpright shall not distribute privately-raised investment funds that invest in PE/VC products except as otherwise permitted by the CSRC, and shallspecialize in the distribution of funds that invest in public securities. Licensed fund managers of privately-raised investment fund like Gopher arenot subject to the Supervision Measures.Table of Contents105In addition, we also receive other service fees derived from (i) comprehensive financial services we provide in the wealth managementsegment, and (ii) other services segment:●for wealth management: revenue generated from our investor education business and other comprehensive financial services weprovide;●for other services: service fees paid by clients for the lending business and other services we provide.Operating Costs and ExpensesOur financial condition and operating results are directly affected by our operating cost and expenses, primarily consisting of(i) compensation and benefits, including salaries and commissions for our relationship managers, share-based compensation expenses, performance-based bonuses, and other employee salaries and bonuses, (ii) selling expenses, (iii) general and administrative expenses, (iv) provision for creditlosses, and (v) other operating expenses, which are partially offset by the receipt of government subsidies. Our operating costs and expenses areprimarily affected by several factors, including the number of our employees, rental expenses and certain non-cash charges.Compensation and BenefitsCompensation and benefits mainly include salaries and commissions for our relationship managers, salaries and bonuses for investmentprofessionals and other employees, share-based compensation expenses for our employees and directors, and bonuses related to performance-basedincome. The number of our employees was 2,992, 2,960 and 3,148 as of December 31, 2019, 2020 and 2021, respectively. We made strategicinvestments in our talent pool to capture market opportunities in 2021 and long-term growth potential, which caused our headcount to increase by6.4% from 2020. We anticipate to continue our investments in talent but will still closely monitor our headcount to maintain high operating efficiency.In 2019, 2020 and 2021, we incurred relationship managers compensation of RMB625.0 million, RMB614.0 million and RMB920.9 million(US$144.5 million), respectively, representing 18.4%, 18.6% and 21.5% of our net revenues in the same periods, respectively. As of December 31,2019, 2020 and 2021, we had 1,288, 1,231 and 1,316 relationship managers, whose compensation typically comprises base salaries, quarterlybonuses, and year-end performance-based bonuses. We anticipate that the compensation and benefits of our relationship managers will continue to bea significant portion of our costs and expenses as we continue to rely on our relationship managers to distribute more investment products.Share-based compensation expenses include grants and vesting of stock options and restricted shares to our employees and directors. Weadopted two share incentive plans in 2008 and 2010, and replaced both with a new share incentive plan in 2017. We expect to incur additional share-based compensation expenses relating to share options or restricted shares in the future as we plan to continue to grant share options or restrictedshares to our employees and directors.Share-based compensation expenses were included in compensation and benefits in 2019, 2020 and 2021. The following table sets forth ourshare-based compensation expenses both in absolute amounts and as a percentage of net revenues for the periods indicated:Years Ended December 31, 2019 2020 2021 RMB % RMB % RMB US$%(in thousands, except for percentages)Share options 40,533 1.2 21,837 0.7 18,081 2,837 0.4Restricted shares 54,364 1.6 37,952 1.1 32,956 5,172 0.8Total share-based compensation 94,897 2.8 59,789 1.8 51,037 8,009 1.2Table of Contents106Selling ExpensesOur selling expenses primarily include (i) expenses associated with the operations of service centers, such as rental expenses, and (ii)expenses for online and offline marketing activities. We operated service centers in 82, 80 and 84 cities in China as of December 31, 2019, 2020 and2021, respectively.General and Administrative ExpensesOur general and administrative expenses primarily include rental and related expenses of our leased office spaces and professional servicefees. The main items include rental expenses for our group and regional headquarters and offices, depreciation expenses and consulting expenses,among others.Provision for Credit LossesProvision for credit losses represent net changes of the allowance for loan losses as well as other financial assets. Our provision for creditlosses were recorded primarily in connection with the Camsing Incident and loan receivables.Other Operating ExpensesOur other operating expenses mainly include various expenses incurred directly in relation to our other service fees.Government SubsidiesGovernment subsidies are cash subsidies received in the PRC from local governments as incentives for investing and operating in certainlocal districts. Such subsidies are used by us for general corporate purposes and are reflected as an offset to our operating costs and expenses.TaxationThe Cayman IslandsWe are an exempted company incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, we are not subject toincome or capital gains tax. In addition, payments of capital or dividends in respect of our shares are not subject to withholding tax in the CaymanIslands. Gains derived from the disposal of our shares are not subject to Cayman Islands income or corporation tax. The Cayman Islands currentlylevies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritancetax, estate duty, or inheritance tax. There are no other taxes likely to be material to us levied by the government of the Cayman Islands except forstamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. There are no exchangecontrol regulations or currency restrictions in the Cayman Islands.Hong KongUnder the current Hong Kong Inland Revenue Ordinance, the first HK$2 million of profits earned by the qualifying group entitiesincorporated in Hong Kong will be taxed at half the current tax rate (i.e. 8.25%) while the remaining profits will continue to be taxed at the existing16.5% tax rate. The profits of group entities incorporated in Hong Kong not qualifying for the two-tiered profits tax rates regime will continue to betaxed at a flat rate of 16.5%. In addition, payments of dividends from Hong Kong subsidiaries to their shareholders are not subject to any Hong Kongwithholding tax.Table of Contents107PRCOn March 23, 2016, the Ministry of Finance and the State Administration of Taxation jointly issued the Circular on the Pilot Program forOverall Implementation of the Collection of Value Added Tax Instead of Business Tax, or Circular 36, which took effect on May 1, 2016. Pursuant toCircular 36, all companies operating in construction industry, real estate industry, finance industry, modern service industry or other industries whichwere required to pay business tax are required to pay value-added tax (“VAT”), in lieu of business tax.Our PRC subsidiaries and our Consolidated Affiliated Entities are subject to VAT and related surcharges including urban maintenance andconstruction tax (with 1%, 5%, or 7% of VAT based on different locations), education surtax (3% of VAT), local education surtax (2% of VAT) andriver-way management fee (1% of VAT) on the services provided in the PRC. As VAT liability is excluded when calculating net revenues, our netrevenues are total revenues, net only of VAT related surcharges, which range from 7% to 13% of VAT liabilities. The VAT and related surcharges inthe amounts of RMB21.4 million, RMB18.9 million and RMB33.5 million (US$5.3 million) were deducted from our total revenues in 2019, 2020 and2021, respectively.According to Circular 36, applicable VAT rates include 3%, 6%, 11%, and 17%, and the applicable value-added rate for our PRC subsidiariesand our Consolidated Affiliated Entities is 6%. The VAT tax rates of 11% and 17% were reduced to 10% and 16%, respectively, from May 1, 2018and to 9% and 13% from April 1, 2019.In addition, our PRC subsidiaries and our Consolidated Affiliated Entities are subject to PRC enterprise income tax on their taxable incomein accordance with the relevant PRC income tax laws with a uniform 25% enterprise income tax rate to both foreign-invested enterprises anddomestic enterprises since January 1, 2008, except where a special preferential rate applies.Under the EIT Law, enterprises that are established under the laws of foreign countries or regions and whose “de facto management bodies”are located within the PRC territory are considered PRC resident enterprises, and will be subject to the PRC enterprise income tax at the rate of 25%on their worldwide income. Under the EIT Implementation Rules, “de facto management bodies” are defined as the bodies that have full andsubstantial control and overall management over the manufacturing and business operations, personnel and human resources, finances and treasury,and acquisition and disposition of properties and other assets of an enterprise. See “Item 3. Key Information—D. Risk Factors—Risks Related toDoing Business in China—The dividends we receive from our PRC subsidiaries may be subject to PRC tax under the PRC Enterprise Income TaxLaw, which would have a material adverse effect on our financial condition and results of operations. In addition, if we are classified as a PRCresident enterprise for PRC income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholdersor ADS holders.”For more information on PRC tax regulations, see “Item 4. Information on the Company—B. Business Overview—Regulations in China—Regulations on Tax.”Table of Contents108Financial ResultsThe following table sets forth a summary of our consolidated results of operations for the periods indicated. The information should be readin conjunction with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in anyperiod are not necessarily indicative of results that may be expected for any future period.Years Ended December 31,201920202021 RMB RMB RMB US$(in thousands)Revenues Revenues from others: One-time commissions 690,860 679,014 1,130,894 177,462Recurring service fees 524,692 700,157 913,700 143,379Performance-based income 23,437 180,529 391,903 61,498Other service fees 522,958 196,151 161,982 25,419Total revenues from others 1,761,947 1,755,851 2,598,479 407,758Revenues from funds Gopher manages: One-time commissions 240,808 129,823 140,522 22,051Recurring service fees 1,320,773 1,230,042 1,195,309 187,570Performance-based income 89,648 208,996 392,290 61,559Total revenues from funds Gopher manages 1,651,229 1,568,861 1,728,121 271,180Total Revenues 3,413,176 3,324,712 4,326,600 678,938Less: VAT related surcharges (21,364) (18,886) (33,506) (5,258)Net Revenues 3,391,812 3,305,826 4,293,094 673,680Operating costs and expenses: Compensation and benefits (1,610,770) (1,504,012) (2,168,880) (340,345)Selling expenses (331,346) (271,692) (437,131) (68,595)General and administrative expenses (296,492) (277,879) (383,321) (60,151)Provision for credit losses (130,723) (8,083) (112,959) (17,726)Other operating expenses (196,793) (99,040) (107,844) (16,923)Government subsidies 89,278 113,356 115,939 18,193Total operating costs and expenses (2,476,846) (2,047,350) (3,094,196) (485,547)Income from operations: 914,966 1,258,476 1,198,898 188,133Other income (expenses): Interest income 89,099 67,317 71,866 11,277Interest expenses (430) — — —Investment income (loss) (28,620) (86,369) 65,426 10,267Settlement expenses — (1,828,907) (19,908) (3,124)Other income (expense) (7,040) 4,164 (18,240) (2,862)Total other income (expense) 53,009 (1,843,795) 99,144 15,558Income (loss) before taxes and income from equity in affiliates 967,975 (585,319) 1,298,042 203,691Income tax expense (220,025) (258,460) (293,940) (46,126)Income from equity in affiliates 115,809 100,257 301,979 47,387Net income (loss) 863,759 (743,522) 1,306,081 204,952Less: net (loss) income attributable to non-controlling interests 34,608 1,703 (8,050) (1,263)Net income (loss) attributable to Noah’s shareholders 829,151 (745,225) 1,314,131 206,215Year Ended December 31, 2021 Compared to Year Ended December 31, 2020Total Revenues. Our total revenues increased by 30.1% from RMB3,324.7 million in 2020 to RMB4,326.6 million (US$678.9 million) in2021. The increase in total revenues was primarily due to increases in one-time commissions, recurring service fees and performance-based income.Table of Contents109Operating Costs and Expenses. Operating costs and expenses increased by 51.1% from RMB2,047.4 million in 2020 to RMB3,094.2 million(US$485.5 million) in 2021. The increase in operating costs and expenses was primarily driven by our investments in talents, technology, investmentresearch capabilities and client services.Other Income (Expense). We incurred other income of RMB99.1 million (US$15.6 million) in 2021, as compared with an other expense ofRMB1,843.8 million in 2020. The incurrence of other expenses in 2020 was primarily attributable to settlement expenses of RMB1,828.9 millionrelated to the Camsing Incident.Income Tax Expense. Income tax expense increased by 13.7% from RMB258.5 million in 2020 to RMB293.9 million (US$46.1 million) in2021, primarily due to higher taxable income.Net Income (Loss) Attributable to Noah’s Shareholders. Net income attributable to Noah’s shareholders was RMB1,314.1 million (US$206.2million) in 2021, as compared with net loss attributable to Noah’s shareholders of RMB745.2 million in 2020.Year Ended December 31, 2020 Compared to Year Ended December 31, 2019Total Revenues. Our total revenues slightly decreased by 2.6% from RMB3,413.2 million in 2019 to RMB3,324.7 million in 2020. Thedecrease in total revenues was primarily due to the COVID-19 pandemic, which resulted in a decrease in overseas insurance products we distributedin 2020 due to travel bans, as well as a decrease in other service fees for value-added services.Operating Costs and Expenses. Operating costs and expenses decreased by 17.3% from RMB2,476.8 million in 2019 to RMB2,047.4 millionin 2020. The decrease in operating costs and expenses was primarily driven by decreased expenses related to other compensations, as well asprovision for credit losses in relation to our wealth management business, partially offset by increased performance fee compensation for our assetmanagement business managed by Gopher.Other Income (Expense). We incurred other expense of RMB1,843.8 million in 2020, as compared with an other income of RMB53.0 millionin 2019. The incurrence of other expenses was primarily attributable to settlement expenses of RMB1,828.9 million related to current and potentialfuture settlement plans for investors of the Camsing Incident.Income Tax Expense. Income tax expense increased by 17.5% from RMB220.0 million in 2019 to RMB258.5 million in 2020, primarily dueto higher taxable income.Net Income (Loss) Attributable to Noah’s Shareholders. Net loss attributable to Noah’s shareholders was RMB745.2 million in 2020, ascompared with net income attributable to Noah’s shareholders of RMB829.2 million in 2019.Table of Contents110Wealth ManagementYears Ended December 31,201920202021 RMB RMB RMB US$(in thousands)RevenuesRevenues from others:One-time commissions 688,652 677,726 1,130,653 177,425Recurring service fees 520,013 697,140 912,506 143,192Performance-based income 23,333 180,385 391,903 61,498Other service fees 222,912 123,458 92,352 14,492Total revenues from others 1,454,910 1,678,709 2,527,414 396,607Revenues from funds Gopher manages: One-time commissions 239,409 88,520 50,247 7,885Recurring service fees 635,437 587,307 557,094 87,420Performance-based income 97 24,920 77,218 12,117Total revenues from funds Gopher manages 874,943 700,747 684,559 107,422Total Revenues 2,329,853 2,379,456 3,211,973 504,029Less: VAT related surcharges (10,574) (13,123) (17,076) (2,680)Net Revenues 2,319,279 2,366,333 3,194,897 501,349Operating costs and expenses: Compensation and benefits (1,232,380) (1,099,769) (1,654,289) (259,594)Selling expenses (287,541) (228,853) (354,128) (55,570)General and administrative expenses (194,908) (197,511) (270,253) (42,409)Provision for credit losses (121,572) (3,785) (6,490) (1,018)Other operating expenses (103,846) (76,983) (53,616) (8,414)Government subsidies 58,704 58,046 65,368 10,258Total operating costs and expenses (1,881,543) (1,548,855) (2,273,408) (356,747)Income from operations: 437,736 817,478 921,489 144,602Year Ended December 31, 2021 Compared to Year Ended December 31, 2020Total Revenue. For the wealth management business, our total revenue increased by 35.0% from RMB2,379.5 million in 2020 toRMB3,212.0 million (US$504.0 million) in 2021. Our transaction value increased by 2.6% from RMB94.7 billion in 2020 to RMB97.2 billion(US$15.3 billion) in 2021, primarily due to an increase of RMB2.6 billion transaction value in private secondary products.●Total revenue from one-time commissions increased by 54.1% from RMB766.2 million in 2020 to RMB1,180.9 million (US$185.3million) in 2021, primarily due to more higher fee rate investment products that we distributed in 2021.●Total revenue from recurring service fees increased by 14.4% from RMB1,284.4 million in 2020 to RMB1,469.6 million (US$230.6million) in 2021. The increase was primarily due to the cumulative recurring service fees of long-duration investment products withrecurring service fees previously distributed by us.●Total revenue from performance-based income increased by 128.5% from RMB205.3 million in 2020 to RMB469.1 million (US$73.6million) in 2021, primarily due to more performance-based income from private secondary products that we received and shared byproduct providers. The transaction value of private secondary products increased by 7.4% from RMB35.2 billion in 2020 to RMB37.8billion (US$5.9 billion) in 2021.●Total revenue from other service fees decreased by 25.2% from RMB123.5 million in 2020 to RMB92.4 million (US$14.5 million) in2021, primarily due to less service fees recorded from lending business since we significantly reduced this business since the secondhalf year of 2019.Table of Contents111Operating Costs and Expenses. For the wealth management business, our operating costs and expenses increased by 46.8% fromRMB1,548.9 million in 2020 to RMB2,273.4 (US$356.7 million) million in 2021, primarily due to our continued strategic investments in our talentsand client experiences as well as less expenses incurred in 2020 due to the COVID-19 pandemic.●Compensation and benefits include compensation for relationship managers and other employees. Compensation and benefits increased by 50.4% from RMB1,099.8 million in 2020 to RMB1,654.3 million (US$259.6 million) in 2021. In 2021, relationship manager compensation increased by 46.9% from 2020, while other compensation increased by 54.8% from 2020, primarily due to adjustment in compensation structure of our employees, as well as increased transaction value. ●Selling expenses increased by 54.7% from RMB228.9 million in 2020 to RMB354.1 million (US$55.6 million) in 2021, primarily dueto our increased expenditure on client activities and services.●General and administrative expenses increased by 36.9% from RMB197.5 million in 2020 to RMB270.3 million (US$42.4 million) in2021, primarily due to increases in technology related expenses and consulting fees.●Provision for credit losses increased from RMB3.8 million in 2020 to RMB6.5 million (US$1.0 million) in 2021, primarily due toaccrual of allowance for accounts receivables relating to certain funds.●Other operating expenses decreased by 30.4% from RMB77.0 million in 2020 to RMB53.6 million (US$8.4 million) in 2021, which isin line with decrease in other service fees.●Government subsidies were RMB58.0 million in 2020 and RMB65.4 million (US$10.3 million) in 2021, respectively.Year Ended December 31, 2020 Compared to Year Ended December 31, 2019Total Revenue. For the wealth management business, our total revenue increased by 2.1% from RMB2,329.9 million in 2019 to RMB2,379.5million in 2020. Our transaction value increased by 20.6% from RMB78.5 billion in 2019 to RMB94.7 billion in 2020, primarily due to a significantincrease in our distribution of public securities products, demonstrating our success in the aforementioned transition.●Total revenue from one-time commissions decreased by 17.4% from RMB928.1 million in 2019 to RMB766.2 million in 2020,primarily due to less insurance products that we distributed due to the COVID-19 epidemic.●Total revenue from recurring service fees increased by 11.2% from RMB1,155.5 million in 2019 to RMB1,284.4 million in 2020. Theincrease was primarily due to the cumulative effect of investment products with recurring service fees previously distributed by us.●Total revenue from performance-based income increased by 776.2% to RMB205.3 million in 2020 from RMB23.4 million in 2019,primarily due to an increase in performance-based income from public securities products and private equity products.●Total revenue from other service fees decreased by 44.6% from RMB222.9 million in 2019 to RMB123.5 million in 2020, primarilydue to less value-added services we offer to our clients during the COVID-19 pandemic.Operating Costs and Expenses. For the wealth management business, our operating costs and expenses decreased by 17.7% fromRMB1,881.5 million in 2019 to RMB1,548.9 million in 2020.●Compensation and benefits include compensation for relationship managers and other employees. Compensation and benefits decreased by 10.8% from RMB1,232.4 million in 2019 to RMB1,099.8 million in 2020. In 2020, relationship manager compensation decreased by 1.9% from 2019, while other compensation decreased by 19.9% from 2019 as we streamlined our employees of the wealth management business. Table of Contents112●Selling expenses decreased by 20.4% from RMB287.5 million in 2019 to RMB228.9 million in 2020, primarily due to a decrease inoffline marketing initiatives due to the COVID-19 pandemic.●General and administrative expenses increased by 1.3% from RMB194.9 million in 2019 to RMB197.5 million in 2020, primarily dueto our increased investment in research and recruiting.●Provision for credit losses decreased by 96.9% from RMB121.6 million in 2019 to RMB3.8 million in 2020. The majority of suchprovision in 2019 were one-time write-off expense of receivables accounts related to certain credit fund products in relation to theCamsing Incident.●Other operating expenses decreased by 25.9% from RMB103.8 million in 2019 to RMB77.0 million in 2020, primarily due to reducedexpenses related to Enoch Education and distribution of investment products provided by our lending business.●Government subsidies were RMB58.7 million in 2019 and RMB58.0 million in 2020, respectively.Asset ManagementYears Ended December 31,201920202021 RMB RMB RMB US$(in thousands)RevenuesRevenues from others:One-time commissions 2,208 1,288 241 38Recurring service fees 4,679 3,017 1,194 187Performance-based income 104 144 — —Other service fees 4,274 7,451 1,390 218Total revenues from others 11,265 11,900 2,825 443Revenues from funds Gopher manages: One-time commissions 1,399 41,303 90,275 14,166Recurring service fees 685,336 642,735 638,215 100,150Performance-based income 89,551 184,076 315,072 49,442Total revenues from funds Gopher manages 776,286 868,114 1,043,562 163,758Total Revenues 787,551 880,014 1,046,387 164,201Less: VAT related surcharges (3,971) (4,521) (4,923) (773)Net Revenues 783,580 875,493 1,041,464 163,428Operating costs and expenses: Compensation and benefits (279,895) (339,691) (450,034) (70,620)Selling expenses (26,661) (34,302) (55,790) (8,755)General and administrative expenses (71,805) (59,440) (70,686) (11,092)Provision for credit losses (3,800) (251) (13,275) (2,083)Other operating expenses (25,978) (6,443) (4,347) (682)Government subsidies 15,878 24,443 37,905 5,948Total operating costs and expenses (392,261) (415,684) (556,227) (87,284)Income from operations: 391,319 459,809 485,237 76,144Table of Contents113Year Ended December 31, 2021 Compared to Year Ended December 31, 2020Total Revenue. For the asset management business, our total revenue increased by 18.9% from RMB880.0 million in 2020 to RMB1,046.4million (US$164.2 million) in 2021. Gopher’s AUM increased from RMB152.8 billion as of December 31, 2020 to RMB156.0 billion (US$24.5billion) as of December 31, 2021, as a result of continuously growth in private equity products and partially offset by redemption of credit productsand real estate products.●Total revenue from one-time commissions increased by 112.5% from RMB42.6 million in 2020 to RMB90.5 million (US$14.2 million)in 2021, mainly due to the transfer of distribution of private equity products from wealth management to asset management since thefourth quarter of 2020 to comply with relevant regulation.●Total revenue from recurring service fees decreased by 1.0% from RMB645.8 million in 2020 to RMB639.4 million (US$100.3 million)in 2021, mainly due to a decrease in assets under management in credit products and real estate products.●Total revenue from performance-based income increased by 71.0% from RMB184.2 million in 2020 to RMB315.1 million (US$49.4million) in 2021, primarily due to an increase in performance-based income from private equity products.Operating Costs and Expenses. For the asset management business, our operating costs and expenses increased by 33.8% from RMB415.7million in 2020 to RMB556.2 million (US$87.3 million) in 2021, primarily due to our continued investments in our talents as well as less expensesincurred in 2020 due to the COVID-19 pandemic.●Compensation and benefits include compensation of investment professionals and other employees. Compensation and benefitsincreased by 32.5% from RMB339.7 million in 2020 to RMB450.0 million (US$70.6 million) in 2021 due to an increase inperformance-based compensation and talent acquisition for enhancing investment research capabilities.●Selling expenses increased by 62.6% from RMB34.3 million in 2020 to RMB55.8 million (US$8.8 million) in 2021, primarily due to anincrease in client service expense and marketing expense.●General and administrative expenses increased by 18.9% from RMB59.4 million in 2020 to RMB70.7 million (US$11.1 million) in2021, primarily due to an increase in technology related expenses.●Provision for credit losses increased from RMB0.03 million in 2020 to RMB13.3 million (US$2.1 million) in 2021. The majority ofsuch provision in 2021 were accrued for receivables accounts related to several private equity products.●Government subsidies were RMB24.4 million for the year ended December 31, 2020 and RMB37.9 million (US$5.9 million) in 2021.Year Ended December 31, 2020 Compared to Year Ended December 31, 2019Total Revenue. For the asset management business, our total revenue increased by 11.7% from RMB787.6 million in 2019 to RMB880.0million in 2020. Gopher’s AUM decreased from RMB170.2 billion as of December 31, 2019 to RMB152.8 billion as of December 31, 2020, as aresult of the voluntary redemptions of outstanding private credit products following the Camsing Incident, which is a one-off event.●Total revenue from recurring service fees decreased by 6.4% from RMB690.0 million in 2019 to RMB645.8 million in 2020, mainlydue a decrease in assets under management in credit products.●Total revenue from performance-based income increased by 105.5% from RMB89.7 million in 2019 to RMB184.2 million in 2020,primarily due to an increase in performance-based income from private equity products.Table of Contents114Operating Costs and Expenses. For the asset management business, our operating costs and expenses increased by 6.0% from RMB392.3million in 2019 to RMB415.7 million in 2020.●Compensation and benefits include compensation of investment professionals and other employees. Compensation and benefitsincreased by 21.4% from RMB279.9 million in 2019 to RMB339.7 million in 2020 due to increase in the number of employees in ourfunds investing team.●Selling expenses increased by 28.7% from RMB26.7 million in 2019 to RMB34.3 million in 2020, primarily due to increased marketingconsulting fee in 2020.●General and administrative expenses decreased by 17.2% from RMB71.8 million in 2019 to RMB59.4 million in 2020, primarily due toour expenses controls implemented in 2020.●Government subsidies were RMB15.9 million for the year ended December 31, 2019 and RMB24.4 million in 2020.Other businessesYears Ended December 31,201920202021 RMB RMB RMB US$(in thousands)RevenuesRevenues from others:Other service fees 295,772 65,242 68,240 10,708Total revenues from others 295,772 65,242 68,240 10,708Total Revenues 295,772 65,242 68,240 10,708Less: VAT related surcharges (6,819) (1,242) (11,507) (1,806)Net Revenues 288,953 64,000 56,733 8,903Operating costs and expenses:Compensation and benefits (98,495) (64,552) (64,557) (10,130)Selling expenses (17,144) (8,537) (27,213) (4,270)General and administrative expenses (29,779) (20,928) (42,382) (6,651)Provision of credit losses (5,351) (4,047) (93,194) (14,624)Other operating expenses (66,969) (15,614) (49,881) (7,827)Government subsidies 14,696 30,867 12,666 1,988Total operating costs and expenses (203,042) (82,811) (264,561) (41,515)Income (loss) from operations: 85,911 (18,811) (207,828) (32,613)Year Ended December 31, 2021 Compared to Year Ended December 31, 2020Total Revenue. For other businesses, our total revenue were RMB68.2 million (US$10.7 million) in 2021, representing a 4.6% increase fromRMB65.2 million in 2020.Operating Costs and Expenses. For other businesses, our operating costs and expenses in 2021 were RMB264.6 million (US$41.5 million),representing a 219.5% increase from RMB82.8 million in 2020, primarily due to (i) an increase in provision for credit losses as a result of ourperiodic assessment on expected collection of our loan receivables and (ii) an increase in selling and general and administrative expenses as a result ofan increase in marketing and consulting fees.Year Ended December 31, 2020 Compared to Year Ended December 31, 2019Total Revenue. For other businesses, our total revenue were RMB65.2 million in 2020, representing a 77.9% decrease from RMB295.8million in 2019, mainly due to our strategic shift in focus to our core wealth management and asset management businesses.Table of Contents115Operating Costs and Expenses. For other businesses, our operating costs and expenses in 2020 were RMB82.8 million, representing a 59.2%decrease from RMB203.0 million in 2019, primarily due to (i) a decrease in other operating expenses as a result of a decrease in lending business and(ii) a decrease in compensation and benefits as a result of the optimization of our employee structure starting from 2019 which led to a decrease insegment headcount from 142 as of December 31, 2019 to 83 as of December 31, 2020, partially offset by an increase in government subsidies inconnection with our lending business in 2019.Non-Gaap MeasuresAdjusted net income attributable to Noah’s shareholders is a non-GAAP financial measure that excludes the income statement effects of allforms of share-based compensation expenses, non-recurring settlement expenses and net of relevant tax impact. A reconciliation of adjusted netincome attributable to Noah’s shareholders from net income attributable to Noah’s shareholders, the most directly comparable GAAP measure, can beobtained by subtracting expenses for share-based compensations and non-recurring settlement expenses. All tax expense impact of such adjustmentswould be also considered.The non-GAAP financial measure disclosed by us should not be considered a substitute for financial measures prepared in accordance withGAAP. The financial results reported in accordance with GAAP and reconciliation of GAAP to non-GAAP results should be carefully evaluated.The non-GAAP financial measure used by us may be prepared differently from and, therefore, may not be comparable to, similarly titled measuresused by other companies.When evaluating our operating performance in the periods presented, management reviewed non-GAAP net income results reflectingadjustments to exclude the impact of share-based compensation, non-recurring settlement expenses, and net of relevant tax impact. As such, webelieve that the presentation of the non-GAAP adjusted net income attributable to Noah’s shareholders provides important supplemental informationto investors regarding financial and business trends relating to our results of operations in a manner consistent with that used by management.Pursuant to GAAP, we recognized significant amounts of expenses for all forms of share-based compensation and settlement expenses (net of taximpact). To make our financial results comparable period by period, we utilize non-GAAP adjusted net income to better understand our historicalbusiness operations.The table below sets forth a reconciliation of our net income (loss) attributable to Noah’s shareholders and adjusted net income attributable toNoah’s shareholders (non-GAAP) for the years indicated:Year Ended December 31, 2019 2020 2021 RMB RMB RMB US$(in thousands)Net income (loss) attributable to Noah’s shareholders 829,151 (745,225) 1,314,131 206,215Add: share-based compensation 94,897 59,789 51,037 8,009Add: settlement expense(1) — 1,828,907 19,908 3,124Less: Tax effect of adjustments 22,346 13,821 12,374 1,942Adjusted net income attributable to Noah’s shareholders (non-GAAP) 901,702 1,129,650 1,372,702 215,406(1)Please see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings—The CamsingIncident.”Recent Accounting PronouncementsIn August 2020, the Financial Accounting Standards Board (the “FASB”) issued ASU 2020-06, Debt-Debt with Conversion and OtherOptions (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for ConvertibleInstruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by reducing the number ofaccounting models available for convertible debt instruments. This guidance also eliminates the treasury stock method to calculate diluted earningsper share for convertible instruments and requires the use of the if-converted method. We have adopted this guidance since January 1, 2022 and theadoption does not have a material impact on its consolidated financial statements.Table of Contents116In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832)—Disclosures by Business Entities aboutGovernment Assistance. The amendments in this ASU require disclosures about transactions with a government that have been accounted for byanalogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for thetransactions, and (3) the effect of the transactions on an entity’s financial statements. The amendments in this ASU are effective for all entities withintheir scope for financial statements issued for annual periods beginning after December 15, 2021. We have adopted this guidance since January 1,2022 and the adoption does not have a material impact on its consolidated financial statements.B.Liquidity and Capital ResourcesWe finance our operations primarily through cash generated from our operating activities. Our principal use of cash in 2019, 2020, and 2021were for operating and investing activities. In addition, we used nil, RMB281.6 million and RMB372.4 million (US$58.4 million) to repurchase ourADSs in 2019, 2020 and 2021, respectively. As of December 31, 2021, we had RMB3,404.6 million (US$534.3 million) in cash and cash equivalents,consisting of cash on hand, demand deposits, money market funds and mutual funds which are unrestricted as to withdrawal and use. As ofDecember 31, 2021, cash and cash equivalents of RMB24.8 million (US$3.9 million) was held by the consolidated funds, which although not legallyrestricted, is not available to our general liquidity needs as the use of such funds is generally limited to the investment activities of the consolidatedfunds. We believe that our current cash and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including ourcash needs for at least the next 12 months. We may, however, need additional capital in the future due to unanticipated business condition or otherfuture development, including any investments or acquisitions we may pursue.In February 2015, we issued five-year convertible notes with US$80 million in aggregate principal at a rate of 3.5% per annum. The noteswere convertible at the holders’ option with an initial conversion price of US$23.03 per ADS. As of December 31, 2019, all notes have beenexchanged for 3,473,730 ADSs.The following table sets forth the movements of our cash, cash equivalents and restricted cash for the periods presented:Years Ended December 31,201920202021RMB RMB RMB US$ (in thousands)Net cash provided by operating activities 1,288,233 796,353 1,521,838 238,809Net cash (used in) provided by investing activities (182,012) 352,584 (2,572,094) (403,619)Net cash provided by (used in) financing activities 543,311 (371,422) (513,121) (80,519)Effect of exchange rate changes 37,811 (148,745) (46,714) (7,330)Net increases (decrease) in cash and cash equivalents 1,687,343 628,770 (1,610,091) (252,659)Cash, cash equivalents and restricted cash at the beginning of the year 2,706,591 4,393,934 5,022,704 788,172Cash, cash equivalents and restricted cash at the end of the year 4,393,934 5,022,704 3,412,613 535,513Operating ActivitiesNet cash provided by operating activities in 2021 was RMB1,521.8 million (US$238.8 million), primarily as a result of net income ofRMB1,306.1 million (US$205.0 million), adjusted by (i) certain non-cash charges of RMB143.9 million (US$22.6 million), which was primarilyattributable to depreciation and amortization of RMB146.6 million (US$23.0 million), provision for credit losses of RMB113.0 million (US$17.7million) and non-cash lease expenses of RMB85.7 million (US$13.4 million), partially offset by income from equity in affiliates, net of dividends ofRMB206.2 million (US$32.4 million), (ii) decrease in net working capital of RMB191.4 million (US$30.0 million), which was primarily attributableto an increase in accrued payroll and welfare expenses of RMB240.9 million (US$37.8 million) and an increase in other current liabilities ofRMB191.4 million (US$30.0 million), partially offset by an increase in accounts receivables of RMB363.0 million (US$57.0 million) and (iii) offsetby changes in deferred tax assets and liabilities of RMB119.6 million (US$18.8 million).Table of Contents117Net cash provided by operating activities in 2020 was RMB796.4 million, primarily as a result of net loss of RMB743.5 million, adjusted bycertain non-cash charges of RMB1,578.1 million, which was primarily attributable to share-based settlement expense in the amount of RMB1,290.8million related to the Camsing Incident, impairment of long-term investments of RMB115.1 million, depreciation expenses of RMB98.5 million andnoncash lease expenses of RMB84.7 million, partially offset by income from equity in affiliates, net of dividends, of RMB60.4 million and changes indeferred tax assets and liabilities of RMB67.3 million, and decrease in net working capital of RMB29.1 million, which was primarily attributable toan increase of contingent liability of RMB530.4 million, partially offset by an increase in accounts receivables of RMB219.3 million and a decreaseof other current liabilities of RMB361.2 million. The increase in our contingent liabilities was due to the Offer made for clients affected by CamsingIncident. The increase in our accounts receivables was due to the growth of our business. The decrease in our other current liabilities was primarilydue to the decrease of payable to individual for trust services.Net cash provided by operating activities in 2019 was RMB1,288.2 million, primarily as a result of net income of RMB863.8 million,adjusted by certain non-cash charges of RMB389.2 million, which primarily included provision for credit losses of RMB130.7 million, depreciationexpenses of RMB105.4 million, impairment of long-term investments of RMB104.4 million, share-based compensation expenses of RMB94.9million and noncash lease expenses of RMB85.4 million, partially offset by income from equity in affiliates, net of dividends, of RMB40.0 million,changes in deferred tax assets and liabilities of RMB62.4 million, and changes in working capital of RMB97.7 million, which was primarilyattributable to cash inflow of RMB162.2 million from acquisitions and sales of investment products, a decrease in accounts receivable of RMB47.8million and a decrease in other current assets of RMB70.0 million, partially offset by a decrease in accrued payroll and welfare expenses ofRMB114.5 million.Investing ActivitiesNet cash used in investing activities in 2021 was RMB2,572.1 million (US$403.6 million), primarily attributable to purchase of property andequipment of RMB2,271.2 million (US$356.4 million), which was principally for acquiring our new headquarter premises in Shanghai, net loandisbursement of RMB331.9 million (US$52.1 million) and purchase of long-term investment of RMB91.3 million (US$14.3 million), which waspartially offset by proceeds from redemption of held-to-maturity investments of RMB101.6 million (US$15.9 million).Net cash provided by investing activities in 2020 was RMB352.6 million, primarily attributable to net cash inflow from collection of loansoriginated to third parties of RMB221.6 million, net capital return from investment in affiliates of RMB100.5 million and proceeds of investmentsheld by our consolidated funds of RMB72.6 million, which was partially offset by purchase of property and equipment of RMB51.6 million and netpurchase of held-to-maturity investments of RMB48.6 million.Net cash used in investing activities in 2019 was RMB182.0 million, primarily attributable to net purchase of investments held by ourconsolidated funds in the amount of RMB346.9 million, net loans disbursement to third parties in the amount of RMB93.0 million, purchase of held-to-maturity investments in the amount of RMB74.5 million and RMB65.3 million of purchases of property and equipment, which was partially offsetby RMB231.2 million proceeds from sale of other long-term investments, RMB115.2 million proceeds from disposal of subsidiaries and RMB57.6million cash inflow for capital return from investments in affiliates.Financing ActivitiesNet cash used in financing activities was RMB513.1 million (US$80.5 million) in 2021 due to repurchasing of our ordinary shares ofRMB372.4 million (US$58.4 million) and payment to acquire non-controlling interests in subsidiaries of RMB178.8 million (US$28.1 million),partially offset by contribution from non-controlling interests of RMB43.4 million (US$6.8 million).Net cash used in financing activities was RMB371.4 million in 2020 due to repurchasing of our ordinary shares of RMB281.6 million anddivestment of non-controlling interests of RMB90.8 million, partially offset by proceeds from issuance of ordinary shares upon exercise of stockoptions of RMB33.4 million.Net cash provided by financing activities was RMB543.3 million in 2019 due to the net contributions from non-controlling interests ofsubsidiaries of RMB518.6 million, and proceeds from the issuance of ordinary shares upon the exercise of stock options of RMB31.7 million.Table of Contents118Material Cash RequirementsOur material cash requirements as of December 31, 2021 and any subsequent interim period primarily include our capital expenditures,operating lease obligations, payment of employee’s payroll and welfare expenses, taxes and other various selling, general and administrative expensesto support our daily business operations, and we intend to fund those requirements with our existing cash balances.Capital ExpendituresOur capital expenditures primarily consist of purchases of property and equipment, and renovation and upgrade of our newly purchasedoffice premises. Our capital expenditures were RMB65.3 million, RMB51.6 million and RMB2,271.2 million (US$356.4 million) in 2019, 2020 and2021, respectively. We currently do not have any commitment for capital expenditures or other cash requirements outside of our ordinary course ofbusiness. As of the date of this annual report, we expect that our capital expenditure in 2022 to be approximately RMB162.3 million (US$25.5million) primarily on the renovation and upgrade of our newly purchased office premises, and we intend to fund our planned capital expenditures withexisting cash balance.Operating Lease ObligationsOue operating lease assets primarily represents various facilities under non-cancelable operating leases expiring within one to ten years. Ouroperating lease expenses were RMB109.8 million and RMB99.3 million and RMB102.3 million (US$16.1 million) in 2019, 2020 and 2021,respectively. The majority of our operating lease obligations are related to our office lease agreements in China.The following table sets forth our contractual obligations as of December 31, 2021:Payment Due by PeriodMore Less thanthan 5 Total 1 year1-2 years2-5 years yearsRMB RMB RMB RMB RMB (in thousands)Operating Lease 233,556 95,288 75,197 63,071 —For details of our payment of employee’s payroll and welfare expenses, see "—Components of Results of Operations—Operating Costs andExpenses Compensation and Benefits."For details of our taxes, see “Taxation.”For details of other various selling, general and administrative expenses, see “—Components of Results of Operations—Operating Costs andExpenses—Selling Expenses” and “—Components of Results of Operations—Operating Costs and Expenses—General and AdministrativeExpenses.”Off-Balance Sheet ArrangementsWe have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. Inaddition, we have not entered into any derivative contracts that are indexed to our own shares and classified as equity, or that are not reflected in ourconsolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entitythat serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity thatprovides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.Table of Contents119Property InterestsIn May 2021, we purchased new office premises with a gross floor area of approximately 72,000 square meters in Shanghai, and the carryingamount of its property interest (which all form party of non-property activities) is approximately RMB2,369.8 million (US$371.9 million), accountingfor 21.8% of our total assets as of December 31, 2021.Holding Company StructureWe are a holding company, and we conduct businesses through our subsidiaries and our Consolidated Affiliated Entities. As a result, we mayrely significantly on dividends and other distributions by our PRC subsidiaries for our cash and financing requirements, including the funds necessaryto pay dividends and other cash distributions to our shareholders and pay any debt we may incur. If our PRC subsidiaries incur debt on their ownbehalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. In addition, thePRC tax authorities may require us to adjust our taxable income under the Contractual Arrangements which would materially and adversely affect itsability to pay dividends and other distributions to us.Our PRC subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with PRCaccounting standards and regulations. Under PRC laws, each of our PRC subsidiaries and our Consolidated Affiliated Entities are required to set asideat least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Although thestatutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of therespective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. As a result of these PRC laws andregulations, our PRC subsidiaries are restricted in their ability to transfer a portion of their net assets, including general reserve and registered capital,either in the form of dividends, loans or advances. Such restricted portion amounted to RMB1,765.1 million, RMB2,040.5 million and RMB2,950.5million (US$463.0 million) as of December 31, 2019, 2020 and 2021, respectively.Furthermore, cash transfers from our PRC subsidiaries to our subsidiaries outside of China are subject to PRC government control ofcurrency conversion. Restrictions on the availability of foreign currency may affect the ability of our PRC subsidiaries and Consolidated AffiliatedEntities to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominatedobligations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—PRC foreign exchange control regulationsrestricting the conversion of Renminbi into foreign currencies may limit our ability to utilize our revenues effectively and affect the value of yourinvestment.”C.Research and Development, Intellectual PropertyResearch and DevelopmentSee “Item 4. Information on the Company—B. Business Overview—Our Technologies” and “Item 4. Information on the Company—B.Business Overview— Research and Development.”Intellectual PropertySee “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”D.Trend InformationOther than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events forthe year 2021 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, orthat are reasonably likely to cause the disclosed financial information to be not necessarily indicative of future operating results or financialconditions.Table of Contents120E.Critical Accounting EstimatesWe prepare financial statements in accordance with GAAP, which requires us to make judgments, estimates and assumptions that affect thereported amounts of our assets and liabilities and the disclosure of our contingent assets and liabilities at the end of each fiscal period and the reportedamounts of revenues and expenses during each fiscal period. We continually evaluate these judgments and estimates based on our own historicalexperience, knowledge and assessment of current business and other conditions, our expectations regarding the future based on available informationand assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparentfrom other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from thoseestimates. Some of our accounting policies require a higher degree of judgment than others in their application.The selection of critical accounting policies, the judgments and other uncertainties affecting application of those policies and the sensitivityof reported results to changes in conditions and assumptions are factors that should be considered when reviewing our financial statements. Webelieve the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements.Consolidation of investment fundsWe consolidate entities based on either a variable interest model or voting interest model. U.S.GAAP provides guidance that requires ananalysis to determine (i) whether an entity in which we hold a variable interest is a variable interest entity, or the VIE, and (ii) whether ourinvolvement, through holding interests directly or indirectly in the entity or contractually through other variable interests, would give it a controllingfinancial interest. We first consider whether an entity is considered a VIE and therefore whether to apply the consolidation guidance under the VIEmodel. Entities that do not qualify as VIEs are assessed for consolidation as voting interest entities under the voting interest model. As such, for(i) investment funds in the legal form of limited partnership we manages as general partner, and (ii) contractual funds we manage as fund managerthat are determined to be VIEs, we consolidate those entities when we are the primary beneficiary where we have both the power to direct theactivities that most significantly affects the economic performance of the VIEs and receives the economic benefits of the VIEs that could besignificant to the VIEs.Significant judgements are involved to assess whether the funds should be consolidated, which include but not limited to,●Making judgments as to whether a simple majority or lower threshold of limited partnership interests, excluding interests held by thegeneral partner, parties under common control of the general partner, or parties acting on behalf of the general partner, have substantiverights to either dissolve the fund or remove the general partner or the fund manager—To make the judgments, we evaluate whetherbarriers to exercise these rights exist.●Determining whether our management fees and performance-based income represent variable interests—Judgments are made as towhether the fees we earn are commensurate with the level of effort required for those fees and at market rates. In making this judgment,we consider, among other things, the extent of third party investment in the entity and the terms of any other interests we hold in theVIE.●Concluding whether we have an obligation to absorb losses or the right to receive benefits that could potentially be significant to theVIE—Quantitative and qualitative factors are evaluated to determine whether the threshold of “potentially significant” is met.In our consolidated balance sheets, we present 100% of the assets and liabilities of consolidated VIEs along with a non-controlling interestwhich represents the portion of the consolidated vehicle’s interests held by third party investors in the funds. We recognize 100% of the consolidatedfund’s investment income (loss) and allocate the portion of that income (loss) attributable to third party ownership to non-controlling interests inarriving at our net income (loss). We determine whether we are the primary beneficiary of a VIE when we initially involve with a VIE and reconsiderthat conclusion when facts and circumstances change. Our conclusion of whether the funds deemed as VIEs shall be consolidated may have a materialimpact on our consolidated financial statements.Table of Contents121Allowance for loan lossesWe maintain an allowance for credit losses in the loan portfolio, which represents management’s estimate of lifetime expected losses basedon all available relevant information, relevant available information, from internal and external sources, relating to past events, current conditions andreasonable and supportable forecasts. In establishing the allowance for credit losses, statistical models are applied to outstanding loans with differentrisk characteristics.For loans secured by investment products we issue, the expected loss is estimated using a probability of default and loss given assumptionderived from a statistical model which incorporates the estimated value of collaterals, term of the loan and historical loss information. For loanssecured by real estate properties, the expected loss is derived using discounted cash flow methodology. The projection of cash flows is determined bya combination of factors including the value of collaterals, historical collection experience, industry recovery rates of loans with similar riskcharacteristics and other available relevant information about the collectability of cash flows. Qualitative adjustments can be made for risk factors thatare not considered within the models, which are relevant in assessing the expected credit losses within the loan balances.As of December 31, 2021, the allowance is estimated as RMB93.9 million based on information known at the time of the review, whichrepresents management’s best estimate of losses inherent in the loan receivables of RMB595.8 million. Our allowance for credit losses is sensitive tocertain inputs, most notably the reasonable and supportable forecasts that are incorporated in our estimate of credit losses. Because future eventsaffecting borrowers and collateral cannot be predicted with certainty, there can be no assurance that the existing allowance for credit losses isadequate. Changes in factors underlying the assessment could have a material impact on the amount of the allowance that is necessary and the amountof provision to be charged against earnings.Item 6. Directors, Senior Management and EmployeesA.Directors and Senior ManagementThe following table sets forth information regarding our directors and executive officers as of the date of this annual report.Directors and Executive Officers Age Position/TitleJingbo Wang49Co-founder, chairwoman of our board and chief executive officer of our groupZhe Yin47Co-founder, director and chairman of Gopher Asset ManagementChia-Yue Chang61DirectorNeil Nanpeng Shen54DirectorBoquan He61Independent directorMay Yihong Wu54Independent directorTze-Kaing Yang67Independent directorJinbo Yao45Independent directorZhiwu Chen59Independent directorQing Pan47Chief financial officerJun Lu51Chief technology officerLigao Zhou46Chief risk management officerJin Chen53Chief executive officer of Noah Digital InternationalTable of Contents122Ms. Jingbo Wang is one of our Founders and has been our chairwoman and chief executive officer of our group since our inception in August2005. Ms. Wang has over 20 years of experience in wealth management and asset management industries. Prior to co-founding our company, fromMay 2000 to September 2005, Ms. Wang worked in several departments and affiliates of Xiangcai Securities Co., Ltd. (“Xiangcai Securities”), asecurities firm in China. Ms. Wang served as the general manager of private banking department at Xiangcai Securities from August 2003 toSeptember 2005, during which she established the securities firm’s wealth management business. Prior to that, she served as a deputy generalmanager of ABN AMRO Xiangcai Fund Management Co., Ltd. (currently known as Manulife Teda Fund Management Co., Ltd.), an affiliate ofXiangcai Securities, from February 2002 to August 2003, and as the head of the asset management department at Xiangcai Securities from May 2000to February 2002. Ms. Wang was recognized as one of Top 30 Most Influential Business Woman in China in 2019 by China Entrepreneur. In 2017,she was listed on Forbes’ China Top 100 Businesswomen in 2017. In the same year, she was also recognized as an Outstanding Leader of the Year byWealth APAC, and received International Women’s Entrepreneurial Challenge Award from the International Women’s Entrepreneurial Challenge(IWEC) Foundation. Ms. Wang graduated from Global CEO Program of China Europe International Business School in Shanghai, China, inSeptember 2009. Ms. Wang received her master’s degree in management in December 1999 from Sichuan University in Sichuan, China.Mr. Zhe Yin is one of our founders and has been our director since June 2007. Mr. Yin has over 20 years of professional experience in wealthmanagement and asset management industries. He has been serving as the chairman of Gopher Asset Management since March 2021, and served asthe chief executive officer of Gopher Asset Management from April 2014 to March 2021 and as the chairman of asset sector of Gopher AssetManagement from February 2010 to April 2014. Prior to co-founding our company, Mr. Yin worked at Xiangcai Securities from November 2003 toSeptember 2005 as a deputy general manager of the private banking department. From July 1997 to October 2003, Mr. Yin served as various positionsat Bank of Communications Co., Ltd. Shanghai Branch, with his last position as the foreign exchange product manager of private finance division.Since August 2021, Mr. Yin has been serving as a director of Dalian Zeus Entertainment Co., Ltd., the shares of which are listed on the ShenzhenStock Exchange (stock code: 002354). From November 2017 to June 2021, Mr. Yin served as an independent director of Guizhou XinbangPharmaceutical Co., Ltd., the shares of which are listed on the Shenzhen Stock Exchange (stock code: 002390). Mr. Yin served as a co-chairman ofthe Fund of Funds Professional Committee of Asset Management Associate of China from 2017 to August 2021. He was named as one of the Top 20China’s Best Private Equity Investors in 2017 and as one of the Top 50 China’s Best Private Equity Investors in 2019, respectively, by ChinaVentureInvestment Consulting., Ltd., a leading financial services technology enterprise in China’s private equity investment industry. Mr. Yin received hisMBA degree from China Europe International Business School in Shanghai, China, in September 2010 and his bachelor’s degree in economics fromShanghai University of Finance and Economics in Shanghai, China, in July 1997.Ms. Chia-Yue Chang has been our director since August 2007. She served as the chief marketing officer from January 2017 to February2021, and served as the general manager of Noah Upright from July 2011 to March 2018 and from March 2019 to December 2020. From March 2021,she has also been serving as the director of the ethics compliance committee (including discipline supervision and compliance), the fairnesscommittee and the sustainable development committee, respectively, of our company. Ms. Chang received her master’s degree in library science fromUniversity of California, Los Angeles in California, the U.S., in March 1987, and her bachelor’s degree in library science from National TaiwanUniversity in Taiwan, in June 1983.Table of Contents123Mr. Neil Nanpeng Shen has been our director since January 2016. Mr. Shen has been the founding managing partner of Sequoia CapitalChina, since September 2005. Prior to founding Sequoia Capital China, in 1999, Mr. Shen co-founded Trip.com Group Limited, a leading travelservice provider in China, the shares of which are listed on the Nasdaq Stock Market (ticker symbol: TCOM) (previously known as Ctrip.comInternational, Ltd. (ticker symbol: CTRP)) and the Hong Kong Stock Exchange (stock code: 09961) (“Ctrip”). Mr. Shen served as the president ofCtrip from August 2003 to October 2005 and as the chief financial officer from 2000 to October 2005. Mr. Shen also co-founded and served as non-executive co-chairman of Homeinns Hotel Group, a leading economy hotel chain company in China, which commenced operations in July 2002 andthe shares of which were listed on the Nasdaq Stock Market (ticker symbol: HMIN) from October 2006 to April 2016. Mr. Shen previously held orcurrently holds directorship in the following listed companies during the three years immediately preceding the date of this annual report: (i) anindependent non-executive director of Pinduoduo Inc. since April 2018, the shares of which are listed on the Nasdaq Stock Market (ticker symbol:PDD); (ii) a non-executive director of BTG Hotels (Group) Co., Ltd. since January 2017, the shares of which are listed on the Shanghai StockExchange (stock code: 600258); (iii) a non-executive director of Meituan since October 2015, the shares of which are listed on the Hong Kong StockExchange (stock code: 03690); (iv) a non-executive director of Ninebot Limited since July 2015, the shares of which are listed on the Shanghai StockExchange STAR Market (stock code: 689009); (v) an independent non-executive director of Ctrip since October 2008, the shares of which are listedon the Nasdaq Stock Market (ticker symbol: TCOM) and the Hong Kong Stock Exchange (stock code: 09961); (vi) a non-executive director of ChinaRenaissance Holdings Limited from June 2018 to June 2020, the shares of which are listed on the Hong Kong Stock Exchange (stock code: 01911);(vii) a non-executive director of 360 Security Technology Inc. from February 2018 to May 2020, the shares of which are listed on the Shanghai StockExchange (stock code: 601360). Mr. Shen received his bachelor’s degree in applied mathematics from Shanghai Jiao Tong University in Shanghai,China, in July 1988 and his master’s degree from Yale University in November 1992.Mr. Boquan He has been our director since August 2007 and has served as our independent director since October 2011 under applicableU.S. regulations. Mr. He is the founder and has been serving as the chairman of the board of directors of Guangdong Nowaday Investment Co., Ltd.since August 2000, a private investment company specializing in greenfield investments in retail and service industries in China. In 1989, he foundedand, until 2000, served as the chief executive officer of Guangdong Robust Group, a then renowned food and beverage company which was acquiredby Danone Group in 2000. He also serves as the chairman or vice chairman of the board of directors of several privately owned companies in China.Mr. He served as a director of iKang Healthcare Group Inc., the shares of which were previously listed on the Nasdaq Stock Market (ticker symbol:KANG) till its delisting in January 2019, from July 2007 to January 2019. Mr. He received his two-year college graduation certificate fromGuangdong Television Public University (currently known as Guangdong Open University) in Guangdong, China, in July 1986.Ms. May Yihong Wu, has been serving as our independent director since November 2010. Since July 2019, Ms. Wu has been serving as theboard adviser of Homeinns Hotel Group, a leading economy hotel chain company in China, the shares of which were listed on the Nasdaq StockMarket (ticker symbol: HMIN) from October 2006 to April 2016, where she also served as the chief strategy officer from May 2010 to June 2019 andchief financial officer from July 2006 to April 2010. Since May 2017, Ms. Wu has been serving as an independent non-executive director, andchairwoman of the audit committee of Swire Properties Limited, a leading real estate developer and manager based in Hong Kong, the shares ofwhich are listed on the Hong Kong Stock Exchange (stock code: 1972). Ms. Wu obtained her MBA degree from the J.L. Kellogg Graduate School ofManagement (currently known as Kellogg School of Management) at Northwestern University in Illinois, the U.S., in June 1998, her master’s degreeof arts in economics from Brooklyn College of the City University of New York in New York, the U.S., in June 1993 and her bachelor’s degree inbiochemistry from Fudan University in Shanghai, China in July 1989.Table of Contents124Mr. Tze-Kaing Yang has served as our independent director and the chairman of the audit committee of our company since May 2015. SinceJanuary 2015, Mr. Yang has been serving as the chairman and chief executive officer of Yangtze Associates, a venture capital and private equity fundmanagement company in Taiwan. He has been serving as the director of (i) ASUSTeK Computer Inc., the shares of which are listed on the TaiwanStock Exchange (stock code: 2357), since July 2016, (ii) Pegatron Corporation, the shares of which are listed on the Taiwan Stock Exchange (stockcode: 4938), since June 2016, and (iii) TTY Biopharm Company Limited, the shares of which are listed on the Taipei Stock Exchange (stock code:4105), since June 2016. Mr. Yang served as the deputy minister of finance in Taiwan from July 2003 to May 2004, and as acting chairman of Bank ofTaiwan from July 2003 to July 2004. He also served as the managing director of Bank of Taiwan, the president of China Development Industrial Bankand also the executive secretary of National Development Fund in Taiwan. Mr. Yang was appointed an adjunct associate professor of the School ofBusiness Management at National Chengchi University from February 2017 to July 2017, and as an adjunct professor of the Guanghua School ofManagement at Peking University from September 2001 to August 2003. Mr. Yang received his Ph.D. in business administration from NationalChengchi University in Taiwan, in June 1987 and his MBA degree from the University of Illinois at Urbana-Champaign in Illinois, the U.S., inAugust 1982.Mr. Jinbo Yao has been our independent director since November 2014. Mr. Yao is a pioneer in China’s internet industry. He is the founderand has been serving as the chairman of the board of directors and chief executive officer of 58.com Inc., the shares of which were listed on the NewYork Stock Exchange (ticker symbol: WUBA) until September 2020, since 2013. Since April 2015, Mr. Yao has been serving as the chief executiveofficer of Ganjiwang (Tianjin) Technology Co., Ltd., the company which owned Ganji.com, a leading online classifieds platform in China. Prior tofounding 58.com Inc., in 2000, Mr. Yao founded domain.cn, a domain name transaction and value-added service website in China. After domain.cnwas acquired by net.cn in September 2000, Mr. Yao served in various managerial roles at net.cn with his last position as a vice president of sales untilMay 2001. In September 2001, Mr. Yao co-founded the education company Xueda Education Group, the shares of which were listed on the New YorkStock Exchange (ticker symbol: XUE) in November 2010 until its delisting in September 2016. Mr. Yao received his bachelor’s degrees in marinechemistry and computer application from Ocean University of Qingdao (currently known as Ocean University of China) in Shangdong, China in July1999.Dr. Zhiwu Chen has served as our independent director since January 2014. Dr. Chen has been a faculty member at the University of HongKong since July 2016, and is currently serving as a director of the Asia Global Institute, the chair professor of Finance and Victor and William FungProfessor in Economics at the University of Hong Kong. Dr. Chen is a former professor of finance at Yale University from 1999 to 2017. He was alsoa special-term visiting professor at School of Economics of Peking University and at School of Social Science and School of Economics andManagement of Tsinghua University. In 2001, Dr. Chen also co-founded Zebra Capital Management, L.L.C. and remained with the company with theposition as chief investment manager until March 2011. Dr. Chen received research awards including the Graham and Dodd Award in 2013 byFinancial Analysts Journal, the Pacesetter Research Award in 1999 by Genetic Metabolic Dietitians International, and the Chicago Board OptionsExchange Competitive Research Award in 1994 by Pacific-Basin Finance Journal. Dr. Chen was listed as one of the top ten political influencers inChina by Burson-Marsteller’s 2012 “G20 Influencers” report. Dr. Chen was also one of members of the International Advisory Board of the CSRCfrom August 2012 to November 2019. Since March 2021, Dr. Chen has been serving as an independent non-executive director at Bairong Inc., theshares of which are listed on the Hong Kong Stock Exchange (stock code: 06608). From July 2015 to October 2018, he served as an independent non-executive Director of IDG Energy Investment Limited (previously known as Shun Cheong Holdings Limited), the shares of which are listed on theHong Kong Stock Exchange (stock code: 00650). From May 2011 to June 2017, he served as an independent non-executive director at PetroChinaCompany Limited, the shares of which are listed on the Hong Kong Stock Exchange (stock code: 00857), the Shanghai Stock Exchange (stock code:601857) and the New York Stock Exchange (ticker symbol: PTR). From November 2010 to August 2018, he served as an independent non-executiveDirector of Bank of Communications Co., Ltd., the shares of which are listed on the Hong Kong Stock Exchange (stock code: 03328) and theShanghai Stock Exchange (stock code: 601328). Dr. Chen received his Ph.D. in financial economics from Yale University in December 1990, hismaster’s degree in systems engineering from Changsha Institute of Technology (currently known as National University of Defense Technology) inHunan, China, in January 1986 and his bachelor’s degree in computer science from Central South University in Hunan, China, in July 1983.Table of Contents125Mr. Qing Pan has been our chief financial officer since November 2019. Prior to taking this role, he served as the chief operating officer ofGopher Asset Management from April 2017 to November 2019, primarily responsible for overseeing fund operations, and leading several specializedteams including finance, due diligence, credit rating and valuation. As a veteran in the investment and finance community, prior to joining our group,Mr. Pan worked at Deloitte for 17 years, including at its Boston office from September 1999 to May 2007, its U.S. headquarter from June 2007 toSeptember 2009, and at its Shanghai office from October 2009 to July 2016 with his last position as an audit partner. During his employment atDeloitte, Mr. Pan was a former member of the accounting research division at U.S. headquarters, and led projects in relation to several Chinesecompanies’ U.S. listings across various industries. Mr. Pan is a certified public accountant in the U.S., mainland China, and Hong Kong. Since August2017, Mr. Pan has been serving as an independent director of JCET Co., Ltd., the shares of which are listed on the Shanghai Stock Exchange (stockcode: 600584). Mr. Pan obtained his master degree of science/MBA in professional accounting from Northeastern University in Massachusetts, theU.S., in September 1999 and his bachelor’s degree in teaching Chinese as a foreign language from Beijing Foreign Studies University in Beijing,China, in July 1997.Mr. Jun Lu, the chief technology officer of our company, primarily responsible for the strategic digital transformation, FinTech platformdevelopment, technology architecture optimization, as well as artificial intelligence, data intelligence application and innovation. Mr. Lu is an internetsoftware veteran with over 20 years of experience in leading development of large-scale software platforms and exploration of cutting-edgetechnologies in the e-commerce and finance sectors, both in the U.S. and China. Prior to joining our group, from 2018 to 2020, Mr. Lu was the chieftechnology officer of Lu International (Singapore) Ltd., a subsidiary of Lufax Holding Ltd, the shares of which are listed on the New York StockExchange (ticker symbol: LU), where he also served as the head of technology center of Lufax Holding Ltd from November 2016 to July 2020 and anexecutive member in attendance of Lufax Holding Ltd from 2016 to 2020, primarily in charge of all product research and development activities.From February 1, 2014 to November 4, 2016, Mr. Lu served as the chief technology officer at Vipshop US Inc., the shares of which are listed on theNew York Stock Exchange (ticker symbol: VIPS), where he also served as a senior director of the technology center, responsible for artificialintelligence and artificial reality/virtual reality technologies in e-commerce, as well as mobile applications development. Prior to that, Mr. Lu alsoworked at eBay Inc., the shares of which are listed on NASDAQ (ticker symbol: EBAY) in its Silicon Valley headquarters in various roles. He wasone of the founders of eBay Inc.’s first application programming interface (API) platform. Mr. Lu obtained his master’s degrees in computer sciencesand electronic engineering, respectively, from University of New Mexico, in New Mexico, the U.S., in July 2020 and his bachelor’s degree inscientific device engineering from Zhejiang University in Zhejiang, China, in July 1992.Mr. Ligao Zhou has been serving as our chief risk management officer since October 2017. Mr. Zhou has 20 years of experience in financialrisk management. Prior to joining our group, he worked at JIC Trust Co., Ltd. and served as the head of the Shanghai financial market department(outbound investment division) from September 2016 to September 2017, and the head of risk management department from December 2013 toSeptember 2016. He also served as a risk manager at Ping An Trust Co., Ltd., a subsidiary of Ping An Insurance (Group) Company of China, Ltd., theshares of which are listed on the Hong Kong Stock Exchange (stock code:02318) and the Shanghai Stock Exchange (stock code: 601318), from July2002 to August 2013. In each of these prior positions above, Mr. Zhou was primarily responsible for risk management. Mr. Zhou has also beencertified as a financial risk manager (FRM) by Global Association of Risk Management in April 2010 and a chartered financial analyst (CFA) by theCFA Institute in March 2015. Since December 2017, Mr. Zhou has been serving as independent director of Shenzhen LEDMY CO., Ltd, a lightemitting diode service provider in China, and Nirvana Technology (Guangzhou) Co., Ltd., an omni-channel e-commerce operator in China. Mr. Zhoureceived his MBA degree from China Europe International Business School in Shanghai, China, in August 2017. He also received his master’s degreein safety technology and engineering in March 2002 and his bachelor’s degree in safety engineering in July 1999, respectively, from NortheasternUniversity in Liaoning, China.Table of Contents126Mr. Jin Chen is the chief executive officer of Noah Digital International. Prior to joining our group, Mr. Chen worked at ZhongAn OnlineP&C Insurance Co., Ltd., the first online insurance company in China, the shares of which are listed on the Hong Kong Stock Exchange (stock code:06060), where he served as an executive director and the chairman of the investment decision committee from November 2019 to January 2021, andas the general manager and co-chief executive officer from July 2014 to July 2019. From July 2005 to May 2014, he served as the president of thecredit card center at China CITIC Bank Corporation Limited, the shares of which are listed on the Hong Kong Stock Exchange (stock code: 00998)and the Shanghai Stock Exchange (stock code: 601998). From July 2002 to July 2005, Mr. Chen served as a deputy manager of China MerchantsFund Management Co., Ltd. From March 2001 to July 2002, Mr. Chen served as an assistant to the chief executive officer of China MerchantsSecurities Co., Ltd., the shares of which are listed on the Hong Kong Stock Exchange (stock code: 06099) and the Shanghai Stock Exchange (stockcode: 600999). From May 1999 to March 2001, Mr. Chen served as a deputy director of the office of board of directors at China Merchants Bank Co.,Ltd., the shares of which are listed on the Hong Kong Stock Exchange (stock code: 03968) and the Shanghai Stock Exchange (stock code: 600036).Since May 2020, Mr. Chen has been serving as an independent director of Shanghai Fuiou Pay Service Co., Ltd., a technology-driven internationalpayment solution provider. Mr. Chen is an academic entrepreneur with a deep theoretical foundation and rich practical experience. His areas ofexpertise include financial technology and industrial Internet. He was appointed as an adjunct professor at the Chinese University of Hong Kong inFebruary 2014, and he currently serves as the executive director of Shanghai Advanced Institute for Financial Research. In addition, Mr. Chencurrently serves as a director of the Shanghai Adream Foundation. He was also a representative of the 5th Shenzhen’s People’s Congress and arepresentative of the 2nd People’s Congress of Huangpu District, Shanghai. He was awarded as the Shenzhen Model Worker, the 4th Shenzhen Top10 Outstanding Young Entrepreneur and Shanghai Financial Innovation Figure in 2015. Mr. Chen received his EMBA degree from Cheung KongGraduate School of Business in Beijing, China, in October 2012 and his master’s degree and bachelor’s degree in engineering from HuazhongUniversity of Science and Technology (currently known as Huazhong University of Science and Technology) in Hubei, China, in June 1994 and July1991, respectively.Employment AgreementsWe have entered into employment agreements with each of our executive officers. We may terminate an executive officer’s employment forcause at any time without remuneration for certain acts of the officer, such as a crime resulting in a criminal conviction, willful misconduct or grossnegligence to our detriment, a material breach of the employment agreement or of our corporate and business policies and procedures, or providingservices for other entities without our consent. We may also terminate an executive officer’s employment by giving one month’s notice or by payinga one-time compensation fee equal to one month’s salary in lieu of such notice under certain circumstances, such as a failure by such officer toperform agreed-upon duties or the impracticability of the performance caused by a material change of circumstances. An executive officer mayterminate his or her employment at any time by giving one month’s notice or immediately if we delay in the payment of remuneration, fail to paysocial security fees, or fail to provide the necessary working conditions for such officer.Each executive officer, under his or her employment agreement with us, has agreed to hold any trade secrets, proprietary information,inventions or technical secrets of our company in strict confidence during and after his or her employment. Each officer also agrees that we shall ownall the intellectual property developed by such officer during his or her employment. If an officer breaches the above contractual obligations inrelation with confidentiality and intellectual property, we are entitled to collect damages from such officer equal to two months’ salary for such officeras well as to seek compensation of our actual losses.Each officer also agrees to refrain from competing with us, directly or indirectly, for two years after his or her termination of employment.B.CompensationFor the fiscal year ended December 31, 2019, 2020 and 2021, we paid an aggregate of approximately RMB31.1 million, RMB16.2 millionand RMB40.2 million (US$6.3 million), respectively, in cash to our directors and executive officers. We have not set aside or accrued any amount toprovide pension, retirement or other similar benefits to our executive officers and directors. Our PRC subsidiaries and Consolidated Affiliated Entitiesare required by law to make contributions equal to certain percentages of each employee’s salary for his or her pension insurance, medical insurance,unemployment insurance and other statutory benefits and a housing provident fund.Table of Contents127Share Incentive PlansWe currently grant share incentive awards pursuant to our 2017 Share Incentive Plan, or the 2017 Plan. We previously granted awards underour 2008 Share Incentive Plan, or the 2008 Plan, and 2010 Share Incentive Plan, or the 2010 Plan, until those plans were terminated upon the adoptionof the 2017 Plan. The purpose of our share incentive plans is to attract and retain the best available personnel by linking the personal interests of themembers of the board, officers, employees, consultants and advisers to the success of our business and by providing such individuals with anincentive for outstanding performance to generate superior returns for our shareholders.The 2017 PlanUnder the 2017 Plan, the maximum number of shares in respect of which options, restricted shares, or restricted share units and other formsof share awards may be granted is 2,800,000 Class A ordinary shares. As of December 31, 2021, there were 361,853 options to purchase Class Aordinary shares outstanding, and 138,834 restricted shares had been issued and were outstanding under the 2017 Plan .Types of Awards. The following briefly describes the principal features of the various awards that may be granted under the 2017 Plan.●Options. Options provide for the right to purchase a specified number of our Class A ordinary shares at a specified price and usually willbecome exercisable at the discretion of our plan administrator in installments after the grant date. The option exercise price shall be paidin cash.●Restricted Shares. A restricted share award is the grant of our Class A ordinary shares which are subject to certain restrictions and maybe subject to risk of forfeiture. Unless otherwise determined by our plan administrator, a restricted share is nontransferable and may beforfeited or repurchased by us upon termination of employment or service during a restricted period. Our plan administrator may alsoimpose other restrictions on the restricted shares, such as limitations on the right to vote or the right to receive dividends.●Restricted Share Units. A restricted share unit is a grant valued in terms of our Class A ordinary shares, but shares are not issued at thetime of the grant. After the recipient of a unit satisfies the vesting requirement, we will distribute shares or the cash equivalent of thenumber of shares used to value the unit, depending on the terms of the award. Vesting requirements are determined by our planadministrator.●Share Appreciation Right. A share appreciation right is a right granted to receive a payment equal to the excess of the fair market valueof a specified number of Class A ordinary shares on the date the award is exercised over the fair market value on the date the award wasgranted as set forth in the applicable award agreement. Vesting requirements are determined by our plan administrator.Plan Administration. The plan administrator is our board of directors, or a committee designated by our board of directors. The planadministrator will determine the provisions and terms and conditions of each grant.Offer Letter. Options or restricted shares granted under the plan are evidenced by an offer letter that sets forth the terms, conditions, andlimitations for each grant.Option Exercise Price. The exercise price subject to an option shall be determined by the plan administrator and set forth in the offer letter.Eligibility. We may grant awards to our directors, officers, employees, consultants and advisers.Term of the Awards. The term of each grant of option or restricted shares shall be determined by the plan administrator.Vesting Schedule. In general, the plan administrator determines the vesting schedule, which is set forth in the offer letter.Table of Contents128Transfer Restrictions. Awards for options may not be transferred to any third party in any manner by the award holders and may beexercised only by such holders.Termination. Unless terminated earlier, the 2017 Plan will terminate automatically on December 29, 2027. Our board of directors has theauthority to amend or terminate the plan. However, no such action may adversely affect in any material way any awards previously granted unlessagreed by the recipient.The following table summarizes, as of December 31, 2021, the outstanding options granted to our executive officers, directors, and otherindividuals as a group under the 2017 plan. Class A Ordinary Shares Exercise Underlying Price - Options (US$/Name Awarded ADS) Date of Grant Date of ExpirationJingbo Wang * 37.63September 1, 2018September 1, 2028Zhe Yin * 37.63September 1, 2018September 1, 2028Chia-Yue Chang * 37.63September 1, 2018September 1, 2028Qing Pan * 37.63September 1, 2018September 1, 2028Ligao Zhou * 37.63September 1, 2018September 1, 2028Other Individuals as a Group* 37.63September 1, 2018September 1, 2028Other Individuals as a Group* 23.68December 1, 2020December 1, 2034Other Individuals as a Group* 35.52April 6, 2021April 6, 2035Other Individuals as a Group* 35.52April 12, 2021April 12, 2031Other Individuals as a Group* 35.52April 26, 2021April 26, 2035Other Individuals as a Group* 35.24May 6, 2021May 6, 2031Other Individuals as a Group* 30.88August 23, 2021August 23, 2031Other Individuals as a Group * 30.88August 25, 2021August 25, 2031Other Individuals as a Group * 29.70October 25, 2021October 25, 2036Notes:*Less than 1% of our total outstanding share capital.Table of Contents129The following table summarizes, as of December 31, 2021, the outstanding restricted shares issued to our executive officers, directors, andother individuals as a group under the 2017 plan.Name Restricted Shares Date of IssuanceJingbo Wang *September 1, 2018Zhe Yin *September 1, 2018Chia-Yue Chang *September 1, 2018Qing Pan *September 1, 2018Ligao Zhou *September 1, 2018Other Individuals as a Group *September 1, 2018Tze-Kaing Yang*August 29, 2019Zhiwu Chen *December 14, 2019Jinbo Yao *October 11, 2020May Yihong Wu *November 16, 2020Jun Lu *August 10, 2020Jin Chen*November 10, 2020Other Individuals as a Group*December 10, 2020Tze-Kaing Yang*August 29, 2021Jinbo Yao*October 11, 2021Zhiwu Chen*December 14, 2021Notes:*Less than 1% of our total outstanding share capital.The 2010 PlanAlthough the 2010 Plan has been terminated, the outstanding awards previously granted under that plan remain effective and will continue tobe governed by the terms and conditions of the 2010 Plan. As of December 31, 2021, options to purchase an aggregate of 62,114 Class A ordinaryshares have been granted and were outstanding and no restricted shares had been issued and were outstanding under the 2010 Plan.Table of Contents130The following table summarizes, as of December 31, 2021, the outstanding options granted to our executive officers, directors, and otherindividuals as a group under the 2010 plan.Class AOrdinarySharesExerciseUnderlyingPriceOptions(US$/Name Awarded ADS) Date of Grant Date of ExpirationJingbo Wang * 13.91April 15, 2014April 15, 2024 * 17.37May 5, 2015May 5, 2025 * 19.36July 1, 2016July 1, 2026 * 22.92July 1, 2017July 1, 2027Zhe Yin * 13.91April 15, 2014April 15, 2024 * 17.37May 5, 2015May 5, 2025 * 19.36July 1, 2016July 1, 2026 * 22.92July 1, 2017July 1, 2027Chia-Yue Chang * 17.37May 5, 2015May 5, 2025 * 19.36July 1, 2016July 1, 2026 * 22.92July 1, 2017July 1, 2027Qing Pan * 22.92April 20, 2017April 20, 2027Other Individuals as a Group * 13.91~22.92April 15, 2014 to July 1, 2017April 15, 2024 to July 1, 2027Notes:*Less than 1% of our total outstanding share capital.C.Board PracticesBoard of DirectorsOur board of directors consists of nine directors. A director is not required to hold any shares in our company to qualify to serve as a director.A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with our company is required to declare thenature of his interest at a meeting of our directors and may vote with respect to any contract, proposed contract or arrangement notwithstanding thathe is interested therein, and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of our directors at which suchcontract or proposed contract or arrangement is considered. Our board of directors may exercise all the powers of our company to borrow money andto mortgage or charge its undertaking, property and uncalled capital or any part thereof, and to issue debentures, debenture stock and other securitieswhenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party. The remuneration to be paid tothe directors is determined by the board of directors. There is no age limit requirement for directors.Committees of the Board of DirectorsWe established an audit committee, a compensation committee and a corporate governance and nominating committee under the board ofdirectors in November 2010. We adopted a charter for each of the three committees. Each committee’s members and functions are described below.Table of Contents131Audit Committee. Our audit committee consists of Mr. Tze-Kaing Yang, Dr. Zhiwu Chen and Ms. May Yihong Wu, and is chairedby Mr. Tze-Kaing Yang. Each member of our audit committee satisfies the “independence” requirements of Section 303A of the CorporateGovernance Rules of the NYSE and meet the independence standards under Rule 10A-3 under the Exchange Act. We have determined that eachmember of our audit committee qualifies as an “audit committee financial expert.” The audit committee oversees our accounting and financialreporting processes and the audits of the financial statements of our company. The audit committee is responsible for, among other things:●selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to beperformed by the independent registered public accounting firm;●reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response;●discussing the annual audited financial statements with management and the independent registered public accounting firm;●reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material controldeficiencies;●annually reviewing and reassessing the adequacy of our audit committee charter;●meeting separately and periodically with management and the independent registered public accounting firm;●reporting regularly to the board; and●reviewing and approving certain proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act.Compensation Committee. Our compensation committee consists of Ms. May Yihong Wu, Mr. Tze-Kaing Yang and Mr. Boquan He, and ischaired by Ms. May Yihong Wu. Each member of our compensation committee satisfies the “independence” requirements of Section 303A of theCorporate Governance Rules of the NYSE. The compensation committee assists the board in reviewing and approving the compensation structure,including all forms of compensation, relating to our directors and executive officers. Our chief executive officer may not be present at any committeemeeting during which her compensation is deliberated upon. The compensation committee is responsible for, among other things:●reviewing the total compensation package for our most senior executives and making recommendations to the board with respect to it;●approving and overseeing the total compensation package for our executives other than the three most senior executives;●reviewing the compensation of our directors and making recommendations to the board with respect to it; and●periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annualbonuses, and employee pension and welfare benefit plans.Table of Contents132Corporate Governance and Nominating Committee. Our corporate governance and nominating committee consists of Ms. May Yihong Wu,Mr. Jinbo Yao and Dr. Zhiwu Chen, and is chaired by Dr. Zhiwu Chen. Each member of our corporate governance and nominating committee satisfiesthe “independence” requirements of Section 303A of the Corporate Governance Rules of the NYSE. The corporate governance and nominatingcommittee assists the board of directors in identifying individuals qualified to become our directors and in determining the composition of the boardand its committees. The corporate governance and nominating committee is responsible for, among other things:●identifying and recommending to the board nominees for election or re-election to the board, or for appointment to fill any vacancy;●reviewing annually with the board the current composition of the board in light of the characteristics of independence, age, skills,experience and availability of service to us;●identifying and recommending to the board the directors to serve as members of the board’s committees;●advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as ourcompliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance andon any corrective action to be taken; and●monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of ourprocedures to ensure proper compliance.Duties of DirectorsUnder Cayman Islands law, our directors owe to us fiduciary duties, including a duty of loyalty, a duty to act honestly and a duty to act inwhat they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors alsohave a duty to exercise the skill they actually possess and such care and diligence that a reasonably prudent person would exercise in comparablecircumstances. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than what mayreasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards anobjective standard with regard to the required skill and care, and these authorities are likely to be followed in the Cayman Islands. In fulfilling theirduty of care to us, our directors must ensure compliance with our memorandum and articles of association. Our company has the right to seekdamages if a duty owed by our directors, or any of them, is breached.Terms of Directors and OfficersOur officers are appointed by and serve at the discretion of the board of directors. Our directors are not subject to a term of office and holdoffice until their resignation, death or incapacity or until their respective successors have been elected and qualified in accordance with our articles ofassociation. A director may be removed from office at any time by an ordinary resolution of our shareholders. A director’s office will be vacated ifsuch director (i) dies, becomes bankrupt or makes any arrangement or composition with his creditors; (ii) is found to be or becomes of unsound mind;(iii) resigns his office by notice in writing to our company; or (iv) is removed from office pursuant to our memorandum and articles of association orthe laws of Cayman Islands.We have no service contracts with any of our directors that provide benefits to them upon termination.Table of Contents133D.EmployeesWe had 2,992, 2,960 and 3,148 employees as of December 31, 2019, 2020 and 2021, respectively, including 1,288, 1,231 and 1,316relationship managers during the same periods, respectively. The following table sets forth the breakdown of our full-time employees by function asof December 31, 2021:Number ofBusiness Segments Employees % of Total Wealth management 438 13.9Relationship managers 1,316 41.8Asset management 191 6.1Overseas and other businesses 355 11.3Research and development 414 13.2Risk management and compliance 108 3.4Administrative support 326 10.3Total 3,148 100.0%We believe we offer our employees competitive compensation packages and a dynamic work environment that encourages initiative and isbased on merit. As a result, we have generally been able to attract and retain qualified personnel and maintain a stable core management team. In2021, we were awarded “the Best HR Program” by Flag Awards, as well as “the Best Employer in Greater China” by HRoot Awards.As required by regulations in China, we participate in various employee social security plans that are organized by municipal and provincialgovernments, including endowment insurance, unemployment insurance, maternity insurance, employment injury insurance, medical insurance andhousing provident fund. We are required under Chinese law to make contributions to employee benefit plans at specified percentages of the salaries,bonuses and certain allowances of our employees, up to a maximum amount specified by the local government from time to time.We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes.E.Share OwnershipThe following table sets forth information with respect to the beneficial ownership of our Class A ordinary shares as of February 28, 2022,by:●each of our directors and executive officers; and●each person known to us to own beneficially more than 5.0% of our ordinary shares.Table of Contents134As of February 28, 2022, we had 30,084,232 ordinary shares outstanding on an as-converted basis, assuming all issued and outstandingClass B ordinary shares are converted into the same number of Class A ordinary shares. Beneficial ownership is determined in accordance with therules and regulations of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, wehave included shares that the person has the right to acquire within 60 days of the date of this annual report, including through the exercise of anyoption, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentageownership of any other person.Shares Beneficially OwnedTotalordinary%% of Class A Class B shares anof total aggregateordinaryordinary as convertedordinary voting shares shares basis shares powerDirectors and Executive Officers:Jingbo Wang(1) 106,790 6,730,000 6,836,790 22.7 49.1Zhe Yin(2) 116,300 1,585,000 1,701,300 5.7 11.7Boquan He(3) 1,639,872— 1,639,872 5.5 3.0Chia-Yue Chang(4) 2,064,051— 2,064,051 6.9 3.8Neil Nanpeng Shen(5) 1,852,261— 1,852,261 6.2 3.4May Yihong Wu *—* **Tze-Kaing Yang *—* **Jinbo Yao *—* **Zhiwu Chen *—* **Qing Pan *—* **Jun Lu ——— ——Ligao Zhou *—* **Jin Chen—————All Directors and Officers as a Group 5,891,837 8,315,000 14,206,837 47.2 71.1Principal Shareholders: Jing Investors Co., Ltd.(6)106,7906,730,0006,836,790 22.7 49.1Yiheng Capital Partners, L.P. (7) 3,323,461— 3,323,461 11.0 6.0FIL Limited(8) 2,275,057— 2,275,057 7.6 4.1Jia Investment Co., Ltd.(9) 2,064,051— 2,064,051 6.9 3.8Yin Investment Co., Ltd.(10) 116,300 1,585,000 1,701,300 5.7 11.7Investment funds affiliated with Sequoia Capital China(11) 1,650,000— 1,650,000 5.5 3.0Quan Investment Co., Ltd.(12) 1,639,872— 1,639,872 5.5 3.0Notes:*Less than 1% of our total outstanding ordinary shares.(1)Represents 6,836,790 ordinary shares and options to acquire ordinary shares owned by Jing Investors Co., Ltd., a British Virgin Islands companywholly owned and controlled by Ms. Jingbo Wang.(2)Represents 1,701,300 ordinary shares and options to acquire ordinary shares owned by Yin Investment Co., Ltd., a British Virgin Islandscompany wholly owned and controlled by Mr. Zhe Yin.(3)Represents 1,639,872 ordinary shares held by Quan Investment Co., Ltd., a British Virgin Islands company wholly owned and controlled by Mr.Boquan He.(4)Represents 2,064,051 ordinary shares and options to acquire ordinary shares owned by Jia Investment Co., Ltd., a British Virgin Islandscompany wholly owned and controlled by Ms. Chia-Yue Chang(5)Includes certain shares held by investment funds affiliated with Sequoia Capital China. See footnote 11 below.Table of Contents135(6)Jing Investors Co., Ltd., or Jing Investors, is a British Virgin Islands company wholly owned by Ark Trust (Hong Kong) Limited, or Ark Trust,in its capacity as trustee of the Jing Family Trust, or the Trust, constituted under the laws of Hong Kong, with Ms. Wang as the settlor and Ms.Wang and her family members as the beneficiaries. The Trust was established for the purposes of Ms. Wang’s wealth management and familysuccession planning. Jing Investors is directly wholly owned by Magic Beams Enterprises Ltd., a British Virgin Islands company, which is inturn wholly owned by Art Trust, a professional trustee company. Ark Trust as trustee of the Trust has no power to dispose of the ordinary sharesheld by Jing Investors except upon written instruction by Ms. Wang, or to avoid adverse impact on the reputation of Ark Trust or any of itsassociates. Jing Investors is the record owner of 6,836,790 ordinary shares. Ms. Wang is the sole director of Jing Investors and as such has powerto vote and dispose of the ordinary shares held by Jing Investors. Ms. Wang is the beneficial owner of all the ordinary shares held by JingInvestors. The registered address of Jing Investors Co., Ltd. is Drake Chambers, Tortola, British Virgin Islands.(7)Represents 3,323,461 ordinary shares beneficially owned by Yiheng Capital Partners, L.P. as of December 31, 2021. Yiheng Capital Partners,L.P. is a Delaware limited partnership managed by Yiheng Capital Management, LP, a Delaware limited partnership. Yuanshan Guo is themanaging member of Yiheng Capital Management, LP. The registered address of Yiheng Capital Partners, L.P. is 101 California Street, Suite2880, San Francisco, CA 94111.(8)Represents 2,275,057 ordinary shares beneficially owned by FIL Limited, or FIL, and its direct and indirect subsidiaries as of December 31,2021. FIL is a Bermuda incorporated company and its registered address is Pembroke Hall, 42 Crow Lane, Hamilton, Bermuda, HM19.(9)Jia Investment Co., Ltd. is a British Virgin Islands company wholly owned and controlled by Ms. Chia-Yue Chang. The registered address of JiaInvestment Co., Ltd. is Drake Chambers, Tortola, British Virgin Islands.(10)Yin Investment Co., Ltd. is a British Virgin Islands company wholly owned and controlled by Mr. Zhe Yin. The registered address of YinInvestment Co., Ltd. is Drake Chambers, Tortola, British Virgin Islands.(11)Represents 1,650,000 ordinary shares in the form of ADSs held by Sequoia Capital China I, L.P., Sequoia Capital China Partners Fund I, L.P.,Sequoia Capital China Principals Fund I, L.P. and other affiliates of Sequoia Capital China. The general partner of each of the three SequoiaCapital China funds is Sequoia Capital China Management I, L.P., whose general partner is SC China Holding Limited, a company incorporatedin the Cayman Islands. SC China Holding Limited is wholly owned by SNP China Enterprises Limited, a company wholly owned by Mr. NeilNanpeng Shen. Mr. Shen is a managing partner of Sequoia Capital China, an affiliate of the Sequoia Capital China funds.(12)Quan Investment Co., Ltd. is a British Virgin Islands company wholly owned and controlled by Mr. Boquan He. The registered address of QuanInvestment Co., Ltd. is Drake Chambers, Tortola, British Virgin Islands.To our knowledge, as of February 28, 2022, 18,368,395 of our Class A ordinary shares were held by one record holder in the United Statesincluding 914,738 treasury stock that we repurchased, which is Citibank, N. A., the depositary of our ADS program. The number of beneficial ownersof our ADSs in the United States is much larger than the number of record holders of our Class A ordinary shares in the United States.Item 7. Major Shareholders and Related Party TransactionsA.Major ShareholdersPlease refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership.”B.Related Party TransactionsContractual ArrangementsAs to the Contractual Arrangements with Noah Investment and its shareholders, please see “Item 4. Information on the Company—C.Organizational Structure” for a description of the Contractual Arrangements.Table of Contents136Transactions with Shareholders and AffiliatesFor the funds for which Gopher Asset Management and Gopher GP serve as general partners and/or fund managers, we are entitled toreceive recurring service fees and performance-based income. Gopher Asset Management is also entitled to receive one-time commissions for fundraising services when distributing the relevant funds to HNW clients.During the years ended December 31, 2019, 2020 and 2021, related party transactions were as follows: Year Ended December 31(Amount in Thousands)2019202020212021 RMB RMB RMB US$One-time commissions Investee funds of Gopher Asset Management 240,808 129,823 140,522 22,051Recurring service fees Investee funds of Gopher Asset Management 1,009,568 927,611 871,618 136,776Wanjia Win-Win Assets Management Co., Ltd (“Wanjia Win-Win”) 688 — 463 73Sequoia Capital Investment Management (Tianjin) Co., Ltd. 15,759 12,411 26,488 4,157Investee funds of Gopher GP 313,612 302,431 323,691 50,794Total recurring service fees 1,339,627 1,242,453 1,222,260 191,800Performance-based income Investee funds of Gopher Asset Management 34,248 140,050 166,580 26,140Investee funds of Gopher GP 36,800 68,946 225,710 35,419Zhejiang Vanke-Noah Asset Management Co., Ltd (“Zhejiang Vanke”) 18,600 — — —Total performance-based income 89,648 208,996 392,290 61,559Other service fees Investee funds of Gopher Assets 3,899 3,425 5,945 933Investee funds of Gopher GP — 86 — —Total other service fees 3,899 3,511 5,945 933Total 1,673,982 1,584,783 1,761,017 276,343As of December 31, 2020 and 2021, amounts due from related parties associated with the above transactions were comprised of thefollowing: As of December 31, (Amount in Thousands)2020 2021 2021 RMB RMB US$Investee funds of Gopher Asset Management 433,935 303,280 47,591Investee funds of Gopher GP 46,039 97,378 15,281Total 479,975 400,658 62,872As of December 31, 2020 and 2021, amounts due from related parties associated with loan distributed were comprised of the following: As of December 31, (Amount in Thousands)2020 2021 2021 RMB RMB US$Investee funds of Gopher Asset Management 27,226 18,850 2,958Investee funds of Gopher GP 12,977 31,881 5,003Total 40,203 50,731 7,961The terms of the loans are due on demand and most of the loans are interest free.Table of Contents137As of December 31, 2020 and 2021, deferred revenues related to the recurring management fee received in advance from related parties werecomprised of the following: As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Investee funds of Gopher Asset Management 35,820 16,373 2,569Investee funds of Gopher GP 1,653 738 116Total 37,473 17,111 2,685During the years ended December 31, 2019, 2020 and 2021, donation made to Shanghai Noah Charity Fund were RMB1.2 million, RMB2.8million and RMB3.5 million, respectively.During the years ended December 31, 2019, 2020 and 2021 we paid nil, RMB6.0 million and RMB9.2 million as service fees to Dingnuo fordevelopment of an online mutual fund work station for our relationship managers and one-stop service platform for private equity fund managers,respectively.Employment AgreementsSee “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management—Employment Agreements.”Share IncentivesSee “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Plans.”C.Interests of Experts and CounselNot applicable.Item 8. Financial InformationA.Consolidated Statements and Other Financial InformationWe have appended consolidated financial statements filed as part of this annual report. See “Item 18. Financial Statements.”Legal ProceedingsIn early 2018, one of the Consolidated Affiliated Entities of our group, Shanghai Gopher,established credit funds (the “Camsing CreditFunds”) to allow our clients to invest in account receivables (the “Camsing Accounts Receivables”) arising from the sale of computer,consumerelectronics and communication products by affiliates (the “Sellers”) of Camsing International Holding Limited (“Camsing”) to a buyer (the“Buyer”). Under this supply chain factoring arrangement, the controlling shareholder and affiliates of Camsing guaranteed to repurchase the CamsingAccounts Receivables from the Camsing Credit Funds if the Buyer failed to settle the Camsing Accounts Receivables upon the relevant due dates.In 2019, Shanghai Gopher came to suspect that certain Camsing Accounts Receivables did not arise from real commercial transactionsbetween the Sellers and the Buyer. Shanghai Gopher and its affiliate reported the suspected fraudulent activities to the Shanghai Police and ShanghaiOffice of the CSRC, respectively and initiated legal proceedings to the Sellers, the Buyer and relevant guarantors. These events are collectivelyreferred to as the Camsing Incident (the “Camsing Incident”).As of the date of this annual report, a total of 818 clients of Shanghai Gopher who invested in the Camsing Credit Funds were affected, andthe outstanding amount of the Camsing Accounts Receivables under the Camsing Credit Funds which are potentially subject to repayment defaultamounted to RMB3.4 billion.Table of Contents138As a gesture of goodwill, we voluntarily made an ex gratia settlement offer (the “Offer”) to affected clients. An affected client who acceptedthe offer shall receive restricted share units (“RSUs”) that become a Class A ordinary shares holder of our company upon vesting, and in return (i)forego all outstanding legal rights associated with the investment in the Camsing Credit Funds, and (ii) irrevocably release our company and all ouraffiliated entities and individuals from any and all claims immediately, known or unknown, that relate to the Camsing Credit Funds.As approved by our Board, new Class A ordinary shares not exceeding 1.6% of the share capital of our company may be issued under thesettlement plan annually for ten consecutive years. As of December 31, 2021, 595 of the total of 818 affected clients (approximately 72.7%) hadaccepted the Offer, representing RMB2.6 billion (US$0.4 billion) (approximately 75.4%) of the total amount of outstanding Camsing AccountsReceivables. The maximum number of Class A ordinary shares to be issued by our company to these 595 affected clients accounted for approximately11.4% of the total issued ordinary shares of our company as of December 31, 2021 and approximately 6.4% of the voting rights of our company as ofDecember 31, 2021.We recorded share-based settlement expenses of RMB1,290.8 million for the year ended December 31, 2020 based on the fair value of theRSUs issued to affected clients under the Offer. As we do not preclude the possibility of reaching settlement with such affected clients in the future onsimilar terms, RMB530.4 million was recorded as contingent liabilities as of December 31, 2020.Based on the difference between the fair value of the RSUs to be issued under the Offer in 2021 and the corresponding contingent liabilitiesaccrued as of December 31, 2020, we recorded share-based settlement expenses in the amount of RMB19.9 million (US$3.1 million) for the yearended December 31, 2021, and the contingent liabilities for unsettled affected clients was RMB433.3 million (US$68.0 million) as of December 31,2021.Although we were not involved in any of the suspected fraudulent activities, we have been proactively assessing the potential legal risks andimplications associated with this claim, which is currently at a preliminary stage, and other potential legal proceedings, to protect the best interests ofus and our shareholders. We believe that the Camsing Incident did not have a material adverse impact on our total transaction value and we haverecovered from the impact of the Camsing Incident to our reputation.Other than the matters mentioned above, we are currently not a party to, and we are not aware of any threat of, any judicial, arbitration oradministrative proceedings that, in the opinion of our management, are likely to have a material and adverse effect on our business, financialcondition or results of operations. We may from time to time be involved in litigation and claims incidental to the conduct of our business. Ourbusinesses are also subject to extensive regulations, which may result in regulatory proceedings against us, See “Item 3. Key Information—D. RiskFactors” above. Litigation or any other legal or administrative proceedings, regardless of the outcome, may result in substantial cost and diversion ofour recourses, including our management’s time and attention.Dividend PolicyOur board of directors has complete discretion as to whether to distribute dividends, subject to our articles of association and Cayman Islandslaw. In addition, our shareholders by ordinary resolution may declare a dividend, but no dividend may exceed the amount recommended by our boardof directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend on its shares out of either profit or share premium amount,provided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in theordinary course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our futureoperations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board ofdirectors may deem relevant. If we pay any dividends, our ADS holders will be paid to the same extent as holders of our ordinary shares, subject tothe terms of the deposit agreement, including the fees and expenses payable thereunder. See “Item 12. Description of Securities Other than EquitySecurities—D. American Depository Shares.”Table of Contents139For undistributed profits earned from our PRC subsidiaries, we have both the intent and ability to permanently reinvest these undistributedprofits.B.Significant ChangesExcept as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our auditedconsolidated financial statements included in this annual report.Item 9. The Offer and ListingA.Offering and Listing DetailsSee “—C. Markets.”B.Plan of DistributionNot applicable.C.MarketsOur ADSs have been listed on the New York Stock Exchange since November 10, 2010 under the symbol “NOAH.” Two ADSs representone of our ordinary shares. We have a dual-class common share structure in which Class A ordinary shares have different voting rights from Class Bordinary shares. Class B shares are each entitled to four votes, whereas Class A ordinary shares are each entitled to one vote. See “Item 3. KeyInformation—D. Risk Factors—Risks Related to Our ADSs—Our dual-class voting structure will limit your ability to influence corporate matters andcould discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view asbeneficial.”D.Selling ShareholdersNot applicable.E.DilutionNot applicable.F.Expenses of the IssueNot applicable.Item 10. Additional InformationA.Share CapitalNot applicable.B.Memorandum and Articles of AssociationThe following are summaries of material provisions of our memorandum and articles of association, as well as the Companies Act (AsRevised) of the Cayman Islands, or the Companies Act, insofar as they relate to the material terms of our ordinary shares.Table of Contents140Registered Office and ObjectsThe registered office of our company is located at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, GrandCayman KY1-1104, Cayman Islands as of the date of this annual report, and may be relocated to such other place as our board of directors may fromtime to time decide. The objects for which our company is established are unrestricted and we have full power and authority to carry out any objectnot prohibited by the Companies Act or any other law of the Cayman Islands.Board of DirectorsSee “Item 6. Directors, Senior Management and Employees—C. Board practices—Board of Directors.”Ordinary SharesGeneral. All of our outstanding Class A ordinary shares and Class B ordinary shares are fully paid. Our ordinary shares are issued inregistered form, and are issued when registered in our register of shareholders. Our shareholders who are non-residents of the Cayman Islands mayfreely hold and vote their Class A ordinary shares and Class B ordinary shares.Dividends. The holders of our Class A ordinary shares and Class B ordinary shares are entitled to such dividends as may be declared by ourboard of directors, subject to Cayman Islands law and our articles of association. In addition, our shareholders may by ordinary resolution declare adividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, a Cayman Islands company may pay adividend on its shares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result inthe company being unable to pay its debts as they fall due in the ordinary course of business.Voting Rights. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to four votes on all matters uponwhich the ordinary shares are entitled to vote. Voting at any shareholders’ meeting is by show of hands unless a poll is demanded. A poll may bedemanded by any one or more shareholders present in person or by proxy entitled to vote and who together hold not less than 10% of the paid upvoting share capital of our company. Shareholders may attend any shareholders’ meeting in person or by proxy, or if a corporation or other non-natural person, by its duly authorized representative or proxy; we currently do not allow shareholders to vote electronically.A quorum required for a meeting of shareholders consists of at least one shareholder present in person or by proxy or, if a corporation orother non-natural person, by its duly authorized representative, who hold not less than an aggregate of one-third of our voting share capital.Shareholders’ meetings may be held annually and may be convened by our board of directors. Advance notice of at least seven calendar days isrequired for the convening of shareholders’ meetings, subject to exceptions in certain circumstances as set out in our articles of association.An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes cast by theshareholders entitled to vote, in person or by proxy, in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast by the shareholders entitled to vote, in person or by proxy, in a general meeting. A special resolution is required for importantmatters such as a change of name or amendments to our memorandum or articles of association. Holders of the ordinary shares may effect certainchanges by ordinary resolution, including increasing the amount of our authorized share capital, consolidating and dividing all or any of our sharecapital into shares of larger amounts than our existing shares, and canceling any authorized but unissued shares.Transfer of Shares. Subject to the restrictions set out in our memorandum and articles of association, our shareholders may transfer all or anyof their ordinary shares by an instrument of transfer in writing and executed by or on behalf of the transferor (and if our board of directors require, thetransferee).Our board of directors may decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Ourboard may also decline to register any transfer of any ordinary share unless (a) the instrument of transfer is lodged with us, accompanied by thecertificate for the ordinary shares to which it relates and such other evidence as our board may reasonably require to show the right of the transferor tomake the transfer; and (b) a fee of such maximum sum as the NYSE may determine to be payable, or such lesser sum as our board may from time totime require, is paid to us in respect thereof.Table of Contents141If our board of directors refuses to register a transfer it shall, within two months after the date on which the instrument of transfer waslodged, send to each of the transferor and the transferee notice of such refusal. The registration of transfers may be suspended on 14 days’ noticebeing given by advertisement in such one or more newspapers or by electronic means and the register closed at such times and for such periods as ourboard may from time to time determine.Liquidation. On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of shares), assets availablefor distribution shall be distributed among the holders of the ordinary shares on a pro rata basis, and the liquidator may with the sanction of anordinary resolution of the shareholders divide amongst the shareholders in specie or in kind the whole or any part of the assets of our company, andmay for such purpose set such value as he deems fair upon any property to be divided as aforesaid, and may determine how such division shall becarried out as between our shareholders or different classes of shareholder.Redemption, Repurchase and Surrender of Shares. We may issue shares on terms that are subject to redemption, at our option or at the optionof the holders, on such terms and in such manner as may, before the issue of such shares, be determined by our board of directors. Our company mayalso repurchase any of our shares provided that our shareholders shall have approved the manner of purchase by ordinary resolution or the manner ofpurchase is in accordance with the provisions of Articles 17 and 17A of our articles of association. Under the Companies Act, the redemption orrepurchase of any share may be paid out of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of suchredemption or repurchase, or out of capital (including share premium account and capital redemption reserve) if our company can, immediatelyfollowing such payment, pay its debts as they fall due in the ordinary course of business. In addition, under the Companies Act no such share may beredeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchase would result in there being no shares outstanding, or (c) ifthe company has commenced liquidation. In addition, our company may accept the surrender of any fully paid share for no consideration.Calls on Shares and Forfeiture of Shares. Our board of directors may from time to time make calls upon shareholders for any amountsunpaid on their shares in a notice served to such shareholders at least 14 calendar days prior to the specified time of payment. Shares that have beencalled upon and remain unpaid on the specified time are subject to forfeiture.Variations of Rights of Shares. If at any time our share capital is divided into different classes or series of shares, all or any of the specialrights attached to any class or series of shares may be varied either with the written consent of the holders of a majority of the issued shares of thatclass or series or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class or series.In addition to any other applicable consent or approval requirements set forth in our articles of association and pursuant to the rules of theNew York Stock Exchange, for so long as the total issued and outstanding Class B ordinary shares constitute a majority of the aggregate voting powerof our company, any amendment of the rights attached to our Class B ordinary shares requires approval by (i) holders of a majority of the total issuedand outstanding Class A ordinary shares as well as (ii) holders of a majority of the aggregate voting power of our company.For so long as any of our Class A ordinary shares are issued and outstanding, our company shall not, without the affirmative vote of at least amajority of our Class A ordinary shares, voting as a single class, amend, alter or repeal any provision setting forth the terms of our Class A ordinaryshares.Inspection of Books and Records. Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copiesof our list of shareholders or our corporate records, subject to certain limited exceptions (including the right to obtain our memorandum and articles ofassociation, our register of mortgages and charges and special resolutions of our shareholders). However, we will provide our shareholders withannual audited financial statements. See “—H. Documents on Display.”Anti-Takeover Provisions. Some provisions of our memorandum and articles of association have the potential to discourage, delay or preventa change of control of our company or management that shareholders may consider favorable, including provisions that:●provide holders of our Class B ordinary shares four votes per share and holders of our Class A ordinary shares one vote per share on allmatters upon which the ordinary shares are entitled to vote;Table of Contents142●authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privilegesand restrictions of such preferred shares without any further vote or action by our shareholders; and●limit the ability of shareholders to call general meetings of shareholders.However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our memorandum andarticles of association for a proper purpose and for what they believe in good faith to be in the best interests of our company.General Meetings of Shareholders. Shareholders’ meetings may be convened by our board of directors. Advance notice of at least sevencalendar days is required for the convening of our annual general shareholders’ meeting and any other general meeting of our shareholders, subject toexceptions in certain circumstances as set out in our articles of association. A quorum for a meeting of shareholders consists of members holding notless than an aggregate of one-third of all voting share capital of our company present in person or by proxy.C.Material ContractsWe have not entered into any material contracts other than in the ordinary course of business and other than those described in “Item 4.Information on the Company” or elsewhere in this annual report on Form 20-F.D.Exchange ControlsSee “Item 4. Information on the Company—B. Business Overview—Regulations in China—Regulations on Foreign Exchange.”E.TaxationThe following summary of certain material Cayman Islands, PRC and U.S. federal income tax consequences of an investment in our ADSsor ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject tochange. This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the taxconsequences under state, local and other tax laws.Cayman Islands TaxationThe Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is notaxation in the nature of inheritance tax or estate duty and there are no other taxes likely to be material to us levied by the Government of the CaymanIslands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands.Although it is unlikely that we will be subject to material taxes, there is no assurance that the Cayman Islands government will not impose taxes in thefuture, which could be material to us. In addition, there may be tax consequences if we are, for example, involved in any transfer or conveyance ofimmovable property in the Cayman Islands. The Cayman Islands is not party to any double tax treaties that are applicable to any payments made to orby us and there are no exchange control regulations or currency restrictions in the Cayman Islands.People’s Republic of China TaxationThe PRC enterprise income tax is calculated based on the taxable income determined under the PRC laws and accounting standards. Underthe EIT Law and the EIT Implementation Rules, all domestic and foreign-invested companies in China are subject to a uniform enterprise income taxat the rate of 25% and dividends from a PRC subsidiary to its foreign parent company are subject to a withholding tax at the rate of 10%, unless suchforeign parent company’s jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax, or the tax isotherwise exempted or reduced pursuant to the PRC tax laws. Zhong Lun Law Firm advises us that since there is currently no such tax treaty betweenChina and the Cayman Islands, dividends we receive from our PRC subsidiaries will be subject to a 10% withholding tax; in addition, we may be ableto enjoy the 5% preferential withholding tax treatment for the dividends we receive from our PRC subsidiaries through Noah Insurance, according toTax ArrangementTable of Contents143between mainland China and Hong Kong, if they satisfy the conditions prescribed under relevant tax rules and regulations, and obtain the approvalsas required under those rules and regulations. See “Item 4. Information on the Company—B. Business Overview—Regulations in China—Regulations on Tax.”Under the EIT Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” locatedwithin China may be considered PRC resident enterprises and therefore subject to PRC enterprise income tax at the rate of 25% on their worldwideincome. The EIT Implementation Rules define the term “de facto management body” as the management body that exercises full and substantialcontrol and overall management over the business, productions, personnel, accounts and properties of an enterprise. In addition, according to acircular issued by the SAT in April 2009, a foreign enterprise controlled by a PRC company or a PRC company group will be classified as a “residententerprise” with its “de facto management bodies” located within China if the following requirements are satisfied: (i) the senior management andcore management departments in charge of its daily operations function mainly in the PRC; (ii) its financial and human resources decisions are subjectto determination or approval by persons or bodies in the PRC; (iii) its major assets, accounting books, company seals, and minutes and files of itsboard and shareholders’ meetings are located or kept in the PRC; and (iv) more than half of the enterprise’s directors or senior management withvoting rights reside in the PRC. We have evaluated whether we are a PRC resident enterprise and we believe that we are not a PRC resident enterprisefor the year ended December 31, 2021.However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respectto the interpretation of the term “de facto management bodies”. If we are deemed to be a PRC resident enterprise, we will be subject to PRCenterprise income tax at the rate of 25% on our global income. In that case, however, dividend income we receive from our PRC subsidiaries may beexempt from PRC enterprise income tax because the EIT Law and the EIT Implementation Rules generally provide that dividends received from aPRC resident enterprise from its directly invested entity that is also a PRC resident enterprise is exempt from PRC enterprise income tax. However, asthere is still uncertainty as to how the EIT Law and the EIT Implementation Rules will be interpreted and implemented, we cannot assure investors inour ADSs or ordinary shares that we are eligible for such PRC enterprise income tax exemptions or reductions for any subsequent taxable year.Provided that our Cayman Islands holding company, Noah Holdings Limited, is not deemed to be a PRC resident enterprise, holders of ourADSs and ordinary shares who are not PRC residents will not be subject to PRC income tax on dividends distributed by us or gains realized from thesale or other disposition of our shares or ADSs. SAT Circular 7 further clarifies that, if a non-resident enterprise derives income by acquiring andselling shares in an offshore listed enterprise in the public market, such income will not be subject to PRC tax under SAT Circular 7. However,because there is uncertainty as to the application of SAT Circular 7, we and our non-PRC resident investors may be at risk of being required to file areturn and being taxed under SAT Circular 7 and we may be required to expend valuable resources to comply with SAT Circular 7 or to establish thatwe should not be taxed under and SAT Circular 7. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Weface uncertainties with respect to the application of the Circular on Strengthening the Administration of Enterprise Income Tax for Share Transfersby Non-PRC Resident Enterprises.”U.S. Federal Income Tax ConsiderationsThe following is a summary of the principal U.S. federal income tax consequences of an investment in our ADSs or ordinary shares by aU.S. Holder (as defined below) that holds our ADSs or ordinary shares as “capital assets” (generally, property held for investment) within themeaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended, or the Code.This summary is based upon the federal income tax laws of the United States as of the date of this annual report, including the Code, existingand proposed U.S. Treasury regulations promulgated thereunder, administrative pronouncements of the U.S. Internal Revenue Service, or the IRS, andjudicial decisions, all as in effect as of the date of this annual report, and all of which may be replaced, revoked, or modified, possibly with retroactiveeffect, and which replacement, revocation, or modification could significantly affect the tax consequences described below. We have not sought anyruling from the IRS with respect to the statements made and the conclusions reached in the following discussion and there can be no assurance thatthe IRS or a court will agree with our statements and conclusions.Table of Contents144This summary does not discuss all aspects of U.S. federal income taxation that may be relevant to particular investors in light of theirindividual circumstances, including investors subject to special tax rules such as: banks and certain other financial institutions; insurance companies;brokers or dealers in stocks, securities, commodities or currencies; persons that use or are required to use a mark-to-market method of accounting;pension plans; regulated investment companies; real estate investment trusts; cooperatives; tax-exempt entities (including private foundations);persons that own (directly, indirectly, or constructively) ADSs or ordinary shares representing 10% or more of our total voting power or value;investors that hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for U.S.federal income tax purposes; U.S. expatriates; entities subject to the U.S. anti-inversion rules; persons subject to the alternative minimum taxprovisions of the Code; partnerships or other pass-through entities, or persons holding ADSs or ordinary shares through such entities; persons whoacquired ADSs or ordinary shares pursuant to the exercise of an employee equity grant or otherwise as compensation; persons required to acceleratethe recognition of any item of gross income with respect to our ADSs or ordinary shares as a result of such income being recognized on an applicablefinancial statement; or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differsignificantly from those summarized below.In addition, this summary does not address any U.S. federal estate, gift, Medicare, or alternative minimum tax considerations, or any state,local or non-U.S. tax considerations, relating to the ownership or disposition of our ADSs or ordinary shares. Except as specifically described below,this discussion does not address any tax consequences or reporting obligations that may be applicable to persons holding ADSs or ordinary sharesthrough a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States, and does not describeany tax consequences arising in respect of the Foreign Account Tax Compliance Act, or FATCA regime.If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) is a beneficial owner ofour ADSs or ordinary shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of thepartnership. Partnerships or partners in a partnership holding our ADSs or ordinary shares are urged to consult their tax advisors regarding the U.S.federal income tax consequences of acquiring, owning or disposing of our ADSs or ordinary shares.THE FOLLOWING DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT A SUBSTITUTE FORCAREFUL TAX PLANNING AND ADVICE. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THEAPPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS, AS WELL AS ANY TAXCONSEQUENCES ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR THE LAWS OF ANY STATE, LOCALOR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.GeneralFor purposes of this summary, a “U.S. Holder” is a beneficial owner of our ADSs or ordinary shares that is, for U.S. federal income taxpurposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation created in, or organized under the laws of, the UnitedStates or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income taxation regardless of itssource, or (iv) a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. personswho have the authority to control all of its substantial decisions or (B) that has otherwise elected to be treated as a U.S. person (as defined in theCode).The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the depositagreement and any related agreement have been and will be complied with in accordance with their terms.ADSsFor U.S. federal income tax purposes, a U.S. Holder of our ADSs should be treated as the beneficial owner of the underlying sharesrepresented by such ADSs. Accordingly, deposits or withdrawal of shares for ADSs should not be subject to U.S. federal income tax.Table of Contents145Passive Foreign Investment CompanyAlthough the application of the PFIC rules is unclear in many important respects and the required calculations yield results very close to theline, based on the market price of our ADSs, the value of our assets and the nature and composition of our income and assets, we believe that we werenot a passive foreign investment company, or PFIC, for our taxable year ended December 31, 2021. However, we believe we were a PFIC for ourtaxable year ended December 31, 2020. The IRS does not issue rulings with respect to PFIC status, and we cannot assure you that the IRS, or a court,will agree with any determination we make. For example, because there are uncertainties in the application of the relevant rules, it is possible that theIRS may successfully challenge our classification of certain income and assets as non-passive, which may result in our being a PFIC for the taxableyear ended December 31, 2021.We will be a PFIC for U.S. federal income tax purposes for any taxable year if, applying the applicable look-through rules, either: (1) at least75% of our gross income for such year is passive income or (2) at least 50% of the value of our assets (generally determined based on an average ofthe quarterly values of the assets) during such year is attributable to assets that produce passive income or are held for the production of passiveincome. For this purpose, passive income generally includes dividends, interest, certain types of rents and royalties, annuities, net gains from the saleor exchange of property producing such income, net gains from commodity transactions, net foreign currency gains and net income from notionalprincipal contracts. In addition, cash, cash equivalents, securities held for investment purposes, and certain other similar assets are generallycategorized as passive assets.We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation inwhich we own, directly or indirectly, at least 25% (by value) of the stock. Although the law in this regard is unclear, we treat our ConsolidatedAffiliated Entities as being owned by us for U.S. federal income tax purposes because we control their management decisions and because we areentitled to substantially all of the economic benefits associated with them, and, as a result, we consolidate their operating results in our consolidatedGAAP financial statements. If it were determined, however, that we are not the owner of our VIEs for U.S. federal income tax purposes, then thenature and composition of our income and assets would change and we would likely be treated as a PFIC for one or more taxable years.We must make a separate determination after the close of each taxable year as to whether we were a PFIC for that year. Accordingly, wecannot assure you that we will not be a PFIC for our current or any future taxable year. The determination of whether we will be a PFIC for anytaxable year may depend in part upon the value of our goodwill and other unbooked intangibles not reflected on our balance sheet (which may dependupon the market price of our ADSs or ordinary shares from time to time, which may fluctuate significantly) and also may be affected by how, andhow quickly, we spend our liquid assets and the cash we generate from our operations and raise in any offering.U.S. Federal Income Tax Treatment of a Shareholder of a PFICIf we are a PFIC for any taxable year (as we believe we were for our taxable year ended December 31, 2020) during a U.S. Holder’s holdingperiod for our ADSs or ordinary shares, then, absent certain elections (including a mark-to-market election, a qualified electing fund election and adeemed sale election, each as described below), such U.S. Holder will generally be subject to adverse tax rules, regardless of whether we remain aPFIC in subsequent taxable years, on (i) any “excess distribution” that we make to the U.S. Holder (which generally means any distribution paidduring a taxable year to a U.S. Holder that is greater than 125% of the average annual distributions paid in the three preceding taxable years to theU.S. Holder or, if shorter, the U.S. Holder’s holding period for our ADSs or ordinary shares), and (ii) any gain realized on the sale or otherdisposition, including, under certain circumstances, a pledge, of ADSs or ordinary shares. Under the PFIC rules:●the excess distribution and/or gain will be allocated ratably over the U.S. Holder’s holding period for our ADSs or ordinary shares;●the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable yearin which we are treated as a PFIC (each such year, a pre-PFIC year) will be taxable as ordinary income; andTable of Contents146●the amount allocated to each prior taxable year other than a pre-PFIC year will be subject to tax at the highest tax rate in effectapplicable to the U.S. Holder for that year, and will be increased by an additional tax equal to interest on the resulting tax deemeddeferred with respect to each such year.The tax liability for amounts allocated to years prior to the year of disposition or excess distribution cannot be offset by any net operatinglosses for such years, and gains (but not losses) from a sale or other disposition of the ADSs or ordinary shares cannot be treated as capital, even ifyou hold the ADSs or ordinary shares as capital assets.If we are a PFIC with respect to a U.S. Holder for any taxable year (as we believe we were for our taxable year ended December 31, 2020)during such U.S. Holder’s holding period for our ADSs or ordinary shares and any of our non-U.S. subsidiaries that are corporations (or othercorporations in which we directly or indirectly own equity interests) is also a PFIC, such U.S. Holder would generally be treated as owning aproportionate amount (by value) of the shares of each such non-U.S. entity that is a PFIC (each such corporation, a lower tier PFIC) for purposes ofthe application of these rules. U.S. Holders are strongly encouraged to consult their tax advisors regarding the application of the PFIC rules to any ofour lower tier PFICs.Mark-to-Market ElectionIf we are a PFIC with respect to a U.S. Holder for any taxable year (as we believe we were for our taxable year ended December 31, 2020)during such U.S. Holder’s holding period for our ADSs or ordinary shares, then in lieu of being subject to the tax and interest charge rules discussedabove, the U.S. Holder may make an election to include gain on our ADSs or ordinary shares as ordinary income under a mark-to-market method,provided that our ADSs or ordinary shares constitute “marketable stock.” Marketable stock is stock that is regularly traded on a qualified exchange orother market, as defined in applicable Treasury regulations. Our ADSs, but not our ordinary shares, are listed on the New York Stock Exchange,which is a qualified exchange or other market for these purposes. Consequently, so long as our ADSs remain listed on the New York Stock Exchangeand are regularly traded, we expect that a mark-to-market election would be available to a U.S. Holder of our ADSs for each taxable year that we area PFIC, but no assurances are given in this regard. If a U.S. Holder makes a valid mark-to-market election, the U.S. Holder will generally (i) includein gross income as ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of ADSs held at the end of thetaxable year over the adjusted tax basis of such ADSs and (ii) deduct as an ordinary loss the excess, if any, of the adjusted tax basis of such ADSsover the fair market value of such ADSs held at the end of the taxable year, but only to the extent of the net amount previously included in income asa result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in such ADSs would be adjusted to reflect any income or loss resultingfrom the mark-to-market election. If a U.S. Holder makes a valid mark-to-market election, any gain such U.S. Holder recognizes upon the sale orother disposition of our ADSs in a taxable year for which we are a PFIC will be treated as ordinary income and any loss will be treated as ordinaryloss, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. If a U.S. Holder makes a validmark-to-market election and we cease to be a PFIC, the U.S. Holder will not be required to take into account the mark-to-market gain or lossdescribed above during any period for which we are not a PFIC.Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, if we were a PFIC for any taxable year, a U.S.Holder that makes a mark-to-market election with respect to our ADSs may continue to be subject to the PFIC rules described above with respect tosuch U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.U.S. Holders are strongly urged to consult their tax advisors regarding the availability of, the procedure for, and the effect ofmaking, a mark-to-market election, as well as whether making the election would be advisable, including in light of their particularcircumstances.Qualified Electing Fund ElectionIn certain circumstances, a shareholder in a PFIC may avoid some of the disadvantageous tax treatment described above by making a“qualified electing fund” election to be taxed currently on its share of the PFIC’s undistributed income. However, if we were a PFIC (as we believewe were for our taxable year ended December 31, 2020), a U.S. Holder would be able to make a qualified electing fund election with respect to ourADSs or ordinary shares only if we agreed to furnish the U.S. Holder annually with a PFIC annual information statement as specified in theapplicable Treasury regulations. We currently do not intend to prepare or provide the information necessary for U.S. Holders to make qualifiedelecting fund elections.Table of Contents147Deemed Sale ElectionIf we are a PFIC for any taxable year (as we believe we were for our taxable year ended December 31, 2020) during a U.S. Holder’s holdingperiod for our ADSs or ordinary shares, we generally (unless such U.S. Holder makes a valid mark-to-market election with respect to its ADSs, asdiscussed above) will continue to be treated as a PFIC with respect to such U.S. Holder for all succeeding years, unless we cease to be a PFIC (as webelieve we did in our taxable year ended December 31, 2021) and the U.S. Holder makes a “deemed sale” election with respect to our ADSs orordinary shares, as applicable. If a U.S. Holder makes such an election, such U.S. Holder will be deemed to have sold its ADSs or ordinary shares attheir fair market value, and any gain from such deemed sale would be taxed as an “excess distribution” as described above. Any loss from the deemedsale is not recognized. After the deemed sale election, the U.S. Holder’s ADSs or ordinary shares with respect to which such election was made willnot be treated as shares in a PFIC unless we subsequently become a PFIC.U.S. Holders are strongly urged to consult their tax advisors as to the possibility and consequences of making a deemed sale electionas we believe we ceased to be a PFIC in our taxable year ended December 31, 2021.Reporting RequirementsFor any taxable year for which we are a PFIC with respect to a U.S. Holder, such U.S. Holder will generally be required to file an annualinformation return on IRS Form 8621 regarding distributions received on our ADSs or ordinary shares and any gain realized on the disposition of ourADSs or ordinary shares, and certain U.S. Holders will be required to file an annual information return (also on IRS Form 8621) relating to theirownership of our ADSs or ordinary shares. Significant penalties are imposed for failure to file such form. As previously noted, we believe that wewere a PFIC for our taxable year ended December 31, 2020.U.S. HOLDERS ARE STRONGLY URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE IMPACT OF OURBEING A PFIC FOR THE TAXABLE YEAR ENDED DECEMBER 31, 2020 AND THE IMPACT OF OUR CEASING TO BE A PFIC FORTHE TAXABLE YEAR ENDED DECEMBER 31, 2021 ON THEIR INVESTMENT IN OUR ADSS OR ORDINARY SHARES, AS WELLAS THE ASSOCIATED REPORTING REQUIREMENTS AND THE AVAILABILITY, APPLICATION AND CONSEQUENCES OF THEELECTIONS DISCUSSED ABOVE.Dividends and Other Distributions on our ADSs or Ordinary SharesSubject to the PFIC rules discussed above, the gross amount of any cash distributions (including the amount of any PRC or other taxwithheld) paid with respect to our ADSs or ordinary shares out of our current or accumulated earnings and profits, as determined under U.S. federalincome tax principles, will be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by theU.S. Holder, in the case of our ordinary shares, or by the depositary, in the case of our ADSs. However, because we do not intend to determine ourearnings and profits on the basis of U.S. federal income tax principles, U.S. Holders should assume that any distribution paid will generally constitutea “dividend” for U.S. federal income tax purposes. Such dividends will not be eligible for the dividends-received deduction generally available toqualifying U.S. corporations under the Code.A non-corporate U.S. Holder generally will be subject to tax on dividends received from a “qualified foreign corporation” at the reducedU.S. federal tax rate applicable to “qualified dividend income,” rather than the marginal tax rates applicable to ordinary income, provided that certainholding period and other requirements are met. If we are neither a PFIC nor treated as such with respect to U.S. Holders (as discussed above) for thetaxable year in which the dividend is paid or the preceding taxable year, we will be treated as a qualified foreign corporation with respect to anydividends paid on our ADSs or ordinary shares, provided that (i) the ADSs or ordinary shares are readily tradable on an established securities marketin the United States, or (ii) we are eligible for the benefits of a comprehensive tax treaty with the United States that the Secretary of Treasury of theUnited States determines is satisfactory for this purpose and includes an exchange of information program.Table of Contents148Our ADSs (but not our ordinary shares) are currently listed on the New York Stock Exchange. We believe, though no assurances may begiven in this regard, that our ADSs are readily tradable on an established securities market in the United States, and that, if we are not a PFIC nortreated as such with respect to U.S. Holders (as discussed above) for the taxable year in which the dividend is paid or the preceding taxable year, wewould therefore be treated as a qualified foreign corporation with respect to any dividends paid on our ADSs, but not with respect to dividends paidon our ordinary shares. In the event we are deemed to be a resident enterprise under the EIT Law (see “—People’s Republic of China Taxation”above), we may be eligible for the benefits under the U.S.-PRC income tax treaty, or the Treaty (which the U.S. Treasury Department has determinedis satisfactory for this purpose). If we are eligible for such benefits, then dividends that we pay on our ordinary shares, regardless of whether suchshares are represented by ADSs, would be eligible for the reduced rates of taxation, subject to applicable limitations (including ineligibility forreduced rates as a result of our being a PFIC for the taxable year in which the dividend is paid or the preceding taxable year).Even if dividends would be treated as paid by a qualified foreign corporation, a non-corporate U.S. Holder will not be eligible for reducedrates of taxation if it does not hold our ADSs or ordinary shares for more than 60 days during the 121-day period beginning 60 days before the ex-dividend date (disregarding certain periods of ownership while the United States Holder’s risk of loss is diminished) or if such U.S. Holder elects totreat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code. In addition, the rate reduction will not apply todividends of a qualified foreign corporation if the non-corporate U.S. Holder receiving the dividend is obligated to make related payments withrespect to positions in substantially similar or related property. U.S. Holders should consult their tax advisors regarding the availability of the reducedtax rate on any dividends that we pay with respect to our ADSs or ordinary shares in their particular circumstances.The amount of any dividend income paid in foreign currency will be the U.S. dollar amount calculated by reference to the spot rate in effecton the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars on such date. If the dividend is converted into U.S.dollars on the date of receipt, a U.S. Holder generally should not be required to recognize foreign currency gain or loss in respect of the amountreceived. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.Dividends will be treated as foreign-source income, and generally will constitute passive income or in certain cases, general categoryincome, for foreign tax credit purposes. For U.S. federal income tax purposes, the amount of the dividend income will include any amounts withheldin respect of PRC withholding tax, if applicable. See “—People’s Republic of China Taxation” above. Subject to applicable limitations, which varydepending upon each U.S. Holder’s particular circumstances, if PRC taxes are withheld from dividend payments (at a rate not exceeding theapplicable rate provided in the Treaty in the case of a U.S. Holder that is eligible for Treaty benefits), such withheld PRC taxes generally will becreditable against a U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex and U.S. Holders shouldconsult their tax advisors regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a credit, a U.S. Holder mayelect to deduct any such withheld PRC taxes in computing its taxable income, subject to applicable limitations. An election to deduct foreign taxesinstead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the relevant taxable year.Sale, Exchange or Other Taxable Disposition of our ADSs or Ordinary SharesA U.S. Holder will recognize gain or loss on a sale or exchange of our ADSs or ordinary shares in an amount equal to the difference betweenthe amount realized on the sale or exchange and the U.S. Holder’s tax basis in our ADSs or ordinary shares. Subject to the discussion under “—Passive Foreign Investment Company” above, such gain or loss generally will be capital gain or loss. Capital gains of a non-corporate U.S. Holder,including an individual, that has held our ADSs or ordinary shares for more than one year currently are eligible for reduced tax rates. Thedeductibility of capital losses is subject to limitations.Any gain or loss that a U.S. Holder recognizes on a disposition of our ADSs or ordinary shares generally will be treated as U.S.-sourceincome or loss for foreign tax credit limitation purposes, which could limit the availability of foreign tax credits. However, if we are treated as a PRCresident enterprise for PRC tax purposes and PRC tax is imposed on gain from the disposition of our ADSs or ordinary shares (see “—People’sRepublic of China Taxation” above), then a U.S. Holder that is eligible for the benefits of the Treaty may elect to treat the gain as PRC-source incomefor foreign tax credit purposes. If such an election is made, the gain so treated will be treated as a separate class or “basket” of income for foreign taxcredit purposes. U.S. Holders should consult their tax advisors regarding the proper treatment of gain or loss, as well as the availability of a foreigntax credit, in their particular circumstances.Table of Contents149Information Reporting and Backup WithholdingDividend payments with respect to our ADSs or ordinary shares and proceeds from the sale or other disposition of our ADSs or ordinaryshares generally will be subject to information reporting to the IRS and U.S. backup withholding. Backup withholding generally will not apply,however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification, or who otherwiseestablishes an exemption from backup withholding. U.S. Holders should consult their tax advisors regarding the application of the U.S. informationreporting and backup withholding rules.Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federalincome tax liability, and a U.S. Holder may be entitled to obtain a refund of any excess amounts withheld under the backup withholding rules byfiling the appropriate claim for refund with the IRS in a timely manner and furnishing any required information.Specified Foreign Financial AssetsIndividual U.S. Holders and certain domestic entities generally will be required to submit certain information to the IRS with respect to theirbeneficial ownership of our ADSs or ordinary shares as is necessary to identify the class or issue of which our ADSs or ordinary shares are a part.These requirements are subject to exceptions, including an exception for ADSs or ordinary shares held in accounts maintained by certain financialinstitutions and an exception applicable if the aggregate value of all “specified foreign financial assets” (as defined in the Code) does not exceedUS$50,000. This law also imposes penalties if a U.S. Holder is required to submit such information to the IRS and fails to do so. U.S. Holders areurged to consult their tax advisors regarding the potential reporting requirements that may be imposed with respect to ownership of our ADSs orordinary shares.F.Dividends and Paying AgentsNot applicable.G.Statement by ExpertsNot applicable.H.Documents on DisplayWe are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are requiredto file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F no later than four months after the closeof each fiscal year, which is December 31. Copies of reports and other information, when so filed, may be inspected without charge and may beobtained at prescribed rates at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549, andat the regional office of the SEC located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The public may obtaininformation regarding the Washington, D.C. Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a web site atwww.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic filings with theSEC using its EDGAR system.Our Internet website is ir.noahgroup.com. We make available on our website our annual reports on Form 20-F and any amendments to suchreports as soon as reasonably practicable following the electronic filing of such report with the SEC, all free of charge. In addition, we provideelectronic or paper copies of our filings free of charge upon request. The information contained on our website is not part of this or any other reportfiled with or furnished to the SEC.As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reportsand proxy statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisionscontained in Section 16 of the Exchange Act. Our financial statements have been prepared in accordance with GAAP.Table of Contents150We will furnish our shareholders with annual reports, which will include a review of operations and annual audited consolidated financialstatements prepared in conformity with GAAP.I.Subsidiary InformationFor a listing of our subsidiaries, see “Item 4. Information on the Company—C. Organizational Structure.”Item 11. Quantitative and Qualitative Disclosures about Market RiskForeign Exchange RiskOur financial statements are expressed in Renminbi, which is our reporting currency. We earn the majority of our revenues and incur themajority of our expenses in Renminbi, and the majority of our sales contracts are denominated in Renminbi. We do not believe that we currently haveany significant direct foreign exchange risk and have not used any derivative financial instruments to hedge our exposure to such risk. Although ingeneral, our exposure to foreign exchange risks should be limited, the value of your investment in our ADSs will be affected by the exchange ratebetween the U.S. dollar and the Renminbi because the value of our business is effectively denominated in Renminbi, while the ADSs will be traded inU.S. dollars.The value of the Renminbi against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditionsand by China’s foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of pegging the valueof the Renminbi to the U.S. dollar, and the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. BetweenJuly 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band.After June 2010, the Renminbi began to appreciate against the U.S. dollar again, although starting from June 2015, the trend of appreciation changedand the Renminbi started to depreciate against the U.S. dollar gradually. It is difficult to predict how market forces or PRC or U.S. government policymay impact the exchange rate between the Renminbi and the U.S. dollar in the future. There still remains significant international pressure on theChinese government to adopt a substantial liberalization of its currency policy, which could result in further appreciation in the value of the Renminbiagainst the U.S. dollar.To the extent that we need to convert U.S. dollars we received from overseas offering into Renminbi for our operations, appreciation of theRenminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we receive from the conversion. As of December 31, 2021,we had an Renminbi or Hong Kong dollar or other non-U.S. dollar denominated cash balance of US$424.7 million and a U.S. dollar denominatedcash balance of US$109.6 million. Assuming we had converted the U.S. dollar denominated cash balance of US$109.6 million as of December 31,2021 into RMB at the exchange rate of US$1.00 for RMB6.3726 as of December 31, 2021, this cash balance would have been RMB698.2 million.Conversely, if we decide to convert our RMB into U.S. dollars for the purpose of making payments for dividends on our ordinary shares or ADSs orfor other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to us.We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency exchange risk.Interest Rate RiskOur exposure to interest rate risk primarily relates to interest income generated by excess cash, which is mostly held in interest bearing bankdeposits.As of December 31, 2021, we had RMB57.9 million (US$9.1 million) invested in debt products with a weighted average duration ofapproximately 0.1 years.We have not used derivative financial instruments in our investment portfolio. Interest earning instruments carry a degree of interest rate risk.We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in market interest rates. However, our futureinterest income may fall short of expectations due to changes in market interest rates.Table of Contents151InflationInflation in China has not materially impacted our results of operations in recent years. According to the National Bureau of Statistics ofChina, the year-over-year increase in the consumer price index in 2019, 2020 and 2021 was 2.9%, 2.5% and 0.9%, respectively. Although we have notbeen materially affected by inflation in the past, we can provide no assurance that we will not be affected in the future by higher inflation rates inChina.Item 12. Description of Securities Other than Equity SecuritiesA.Debt SecuritiesNot applicable.B.Warrants and RightsNot applicable.C.Other SecuritiesNot applicable.D.American Depositary SharesFees and Charges Our ADS holders May Have to PayADS holders will be required to pay the following service fees to the depository:Service Fees·Issuance of ADSs Up to US$0.05 per ADS issued·Cancelation of ADSs Up to US$0.05 per ADS canceled·Distribution of cash dividends or other cash distributions Up to US$0.05 per ADS held·Distribution of ADSs pursuant to stock dividends, free stockdistributions or exercise of rights Up to US$0.05 per ADS held·Distribution of securities other than ADSs or rights to purchaseadditional ADSs Up to US$0.05 per ADS held·Depositary services Up to US$0.05 per ADS held on the applicable record date(s)established by the depositaryAs an ADS holder you will also be responsible to pay certain charges such as:●taxes (including applicable interest and penalties) and other governmental charges;●such registration fees as may from time to time be in effect for the registration of shares or other deposited securities on the shareregister and applicable to transfers of shares or other deposited securities to or from the name of the custodian, the depositary or anynominees upon the making of deposits and withdrawals, respectively;●such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at theexpense of the person depositing or withdrawing shares or holders and beneficial owners of ADSs;Table of Contents152●the expenses and charges incurred by the depositary in the conversion of foreign currency;●such fees and expenses as are incurred by the depositary in connection with compliance with exchange control regulations and otherregulatory requirements applicable to shares, deposited securities, ADSs and ADRs; and●the fees and expenses incurred by the depositary, the custodian, or any nominee in connection with the servicing or delivery of depositedsecurities.Depositary fees payable upon (i) deposit of shares against issuance of ADSs and (ii) surrender of ADSs for cancellation and withdrawal ofdeposited securities will be charged by the depositary to the person to whom the ADSs so issued are delivered (in the case of ADS issuances) and tothe person who delivers the ADSs for cancellation to the depositary (in the case of ADS cancellations). In the case of ADSs issued by the depositaryinto DTC or presented to the depositary via DTC, the ADS issuance and cancellation fees will be payable to the depositary by the DTC participant(s)receiving the ADSs from the depositary or the DTC participant(s) surrendering the ADSs to the depositary for cancellation, as the case may be, onbehalf of the beneficial owner(s) and will be charged by the DTC participant(s) to the account(s) of the applicable beneficial owner(s) in accordancewith the procedures and practices of the DTC participant(s) as in effect at the time. Depositary fees in respect of distributions and the depositaryservices fee are payable to the depositary by holders as of the applicable ADS Record Date established by the depositary. In the case of distributionsof cash, the amount of the applicable depositary fees is deducted by the depositary from the funds being distributed. In the case of distributions otherthan cash and the depositary service fee, the depositary will invoice the applicable holders as of the ADS Record Date established by the depositary.For ADSs held through DTC, the depositary fees for distributions other than cash and the depositary service fee are charged by the depositary to theDTC participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC participants in turn charge theamount of such fees to the beneficial owners for whom they hold ADSs.Table of Contents153In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested serviceuntil payment is received or may offset the amount of the depositary fees from any distribution to be made to the ADS holder.The fees and charges that ADS holders may be required to pay may vary over time and may be changed by us and by the depositary.The depositary may reimburse us for certain expenses incurred by us in respect of the ADR program established pursuant to the depositagreement, by making available a portion of the depositary fees charged in respect of the ADR program or otherwise, upon such terms and conditionsas we and the depositary may agree from time to time. As described in the deposit agreement, we or the depositary may withhold or deduct from anydistributions made in respect of ordinary shares and may sell for the account of a holder any or all of the ordinary shares and apply such distributionsand sale proceeds in payment of any taxes (including applicable interest and penalties) or charges that are or may be payable by holders in respect ofthe ADSs.Fees and Other Payments Made by the Depositary to UsOur depositary has agreed to reimburse us for certain expenses we incur that are related to establishment and maintenance of the ADSprogram, including investor relations expenses and exchange application and listing fees. There are limits on the amount of expenses for which thedepositary will reimburse us, but the amount of reimbursement available to us is not related to the amounts of fees the depositary collects frominvestors. Reimbursement paid by the depositary was RMB1.6 million (US$249.0 thousand) in 2021.Table of Contents154PART IIItem 13. Defaults, Dividend Arrearages and DelinquenciesNone.Item 14. Material Modifications to the Rights of Security Holders and Use of ProceedsOn January 29, 2016, our shareholders voted in favor of a proposal to adopt a dual-class share structure, pursuant to which our authorizedshare capital was reclassified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share beingentitled to one vote and each Class B ordinary share being entitled to four votes on all matters that are subject to shareholder vote.See “Item 10. Additional Information” for a description of the rights of securities holders.Item 15. Controls and ProceduresDisclosure Controls and ProceduresOur management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of theeffectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered bythis report, as required by Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our management has concluded that, as of December31, 2021, our disclosure controls and procedures were effective in ensuring that the information required to be disclosed by us in the reports that wefile or submit under the Exchange Act was recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules andforms, and that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated andcommunicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding requireddisclosure.Management’s Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined inRule 13a-15(f) under the Exchange Act, for our company. Internal control over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation of consolidated financial statements in accordance with GAAP andincludes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of a company’s assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparationof consolidated financial statements in accordance with GAAP, and that a company’s receipts and expenditures are being made only in accordancewith authorizations of a company’s management and directors, and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of a company’s assets that could have a material effect on the consolidated financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate.As required by Section 404 of the Sarbanes-Oxley Act of 2002 and related rules as promulgated by the Securities and ExchangeCommission, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021 using criteriaestablished in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2021based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission.Table of Contents155The effectiveness of internal control over financial reporting as of December 31, 2021 has been audited by Deloitte Touche TohmatsuCertified Public Accountants LLP, an independent registered public accounting firm, who has also audited our consolidated financial statements forthe year ended December 31, 2021.Table of Contents156Report of the Independent Registered Public Accounting FirmOpinion on Internal Control over Financial ReportingWe have audited the internal control over financial reporting of Noah Holdings Limited and its subsidiaries (the “Company”) as of December31, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations ofthe Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financialreporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”),the consolidated financial statements as of and for the year ended December 31, 2021 of the Company and our report dated March 30, 2022 expressedan unqualified opinion on those financial statements and included an explanatory paragraph regarding the convenience translation.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control overFinancial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We area public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our auditincluded obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Acompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, andthat receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assetsthat could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate./s/ Deloitte Touche Tohmatsu Certified Public Accountants LLPShanghai, ChinaMarch 30, 2022Table of Contents157Changes in Internal Controls over Financial ReportingAs required by Rule 13a-15(d), under the Exchange Act, our management, including our chief executive officer and our chief financialofficer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the periodcovered by this report have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based onthat evaluation, it has been determined that there were no changes in our internal control over financial reporting that occurred during the year endedDecember 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Item 16. ReservedItem 16A. Audit Committee Financial ExpertOur board of directors has determined that Mr. Tze-Kaing Yang, Mr. Zhiwu Chen and Ms. May Yihong Wu, independent directors (under thestandards set forth in Section 303A of the Corporate Governance Rules of the NYSE and Rule 10A-3 under the Exchange Act) and members of ouraudit committee, are audit committee financial experts.Item 16B. Code of EthicsOur board of directors has adopted a code of ethics that applies to our directors, officers, employees and agents, including certain provisionsthat specifically apply to our chief executive officer, chief financial officer, chief operating officer, chief technology officer, vice presidents and anyother persons who perform similar functions for us. We have filed our code of business conduct and ethics as an exhibit to our registration statementon Form F-1 (No. 333-170055).Item 16C. Principal Accountant Fees and ServicesThe following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered byDeloitte Touche Tohmatsu Certified Public Accountants LLP, our principal external auditors, for the periods indicated. We did not pay any other feesto our auditors during the periods indicated below. For the Year EndedDecember 31, 2020 2021(RMB’000)Audit fees(1) 8,580 8,600Audit-related fees(2) 850 3,532Tax fees(3) 409 285Note:(1)“Audit fees” means the aggregate fees billed for professional services rendered by our principal auditors for the audit of our annual financialstatements and the review of our comparative interim financial statements.(2)“Audit-related fees” represents aggregate fees billed for professional services rendered for assurance and related services that are not reportedunder audit fees.(3)“Tax fees” represents aggregate fees for professional services performed in connection with tax planning and tax compliance.The policy of our audit committee is to pre-approve all audit and non-audit services provided by Deloitte Touche Tohmatsu Certified PublicAccountants LLP, including audit services, audit-related services, tax services and other services as described above, other than those for de minimisservices which are approved by the audit committee prior to the completion of the audit.Table of Contents158Item 16D. Exemptions from the Listing Standards for Audit CommitteesNot applicable.Item 16E. Purchases of Equity Securities by the Issuer and Affiliated PurchasersOn May 12, 2017, our board of directors approved an extension of our previously approved share repurchase program for one year fromJuly 8, 2017 and authorized us to repurchase up to US$50 million worth of our issued and outstanding ADSs, or the 2017 Share Repurchase Program.As of December 31, 2021, we had repurchased no ADSs under the 2017 Share Repurchase Program.On December 1, 2020, our board of directors authorized a share repurchase program, or the Share Repurchase Program, under which we mayrepurchase up to US$100 million worth of our ADSs over the following two years. On February 25, 2021, we completed the Share RepurchaseProgram, with approximately 2,233,770 ADSs representing 1,116,885 ordinary shares repurchased at an average price of US$44.77 per ADS.Item 16F. Change in Registrant’s Certifying AccountantNot applicable.Item 16G. Corporate GovernanceCertain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from the New York StockExchange corporate governance listing standards. For example, neither the Companies Act of the Cayman Islands nor our memorandum and articlesof association requires a majority of our directors to be independent and we could include non-independent directors as members of our compensationcommittee, and our independent directors would not necessarily hold regularly scheduled meetings at which only independent directors are present.As a result, our shareholders may be afforded less protection than they otherwise would under the New York Stock Exchange corporate governancelisting standards applicable to U.S. domestic issuers. Currently, we do not plan to rely on home country practice with respect to our corporategovernance. However, if we choose to follow home country practice in the future, our shareholders may be afforded less protection than theyotherwise would under the New York Stock Exchange corporate governance listing standards applicable to domestic issuers.Item 16H. Mine Safety DisclosureNot applicable.Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent InspectionsNot applicable.Table of Contents159PART IIIItem 17. Financial StatementsWe have elected to provide financial statements pursuant to Item 18.Item 18. Financial StatementsThe consolidated financial statements of Noah Holdings Limited and its subsidiaries and consolidated entities are included at the end of thisannual report.Item 19. ExhibitsExhibit Number Description of Document1.1Fifth Amended and Restated Memorandum and Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 99.2from our current report on Form 6-K (File No. 001-34936), as amended, initially filed with the Commission on January 29, 2016)2.1Specimen American Depositary Receipt of the Registrant (incorporated by reference to Exhibit 4.3 from our S-8 registration statement(File No. 333-171541), as amended, filed with the Commission on January 5, 2011)2.2Specimen Certificate for Ordinary Shares of the Registrant (incorporated by reference to Exhibit 4.2 from our F-1/A registrationstatement (File No. 333-170055), as amended, initially filed with the Commission on October 27, 2010)2.3Deposit Agreement among the Registrant, the depositary and holders and beneficial holders of the American Depositary Shares(incorporated by reference to Exhibit 4.3 from our S-8 registration statement (File No. 333-171541), as amended, filed with theCommission on January 5, 2011)2.4Amended and Restated Shareholders Agreement between the Registrant and other parties therein dated June 30, 2010 (incorporatedby reference to Exhibit 4.4 from our F-1 registration statement (File No. 333-170055), as amended, initially filed with the Commissionon October 20, 2010)2.5Amendment No. 1 to Deposit Agreement among the Registrant, the depositary and holders and beneficial holders of the AmericanDepositary Shares (incorporated by reference to Exhibit (a)(1) from our F- 6 registration statement (File No. 333- 170167), asamended, filed with the Commission on March 15, 2016)2.6*Description of Registrant’s Securities4.12008 Share Incentive Plan (incorporated by reference to Exhibit 10.1 from our F-1 registration statement (File No. 333-170055), asamended, initially filed with the Commission on October 20, 2010)4.22010 Share Incentive Plan (incorporated by reference to Exhibit 10.2 from our F-1/A registration statement (File No. 333-170055), asamended, initially filed with the Commission on October 27, 2010)4.32017 Share Incentive Plan (incorporated by reference to Exhibit 10.1 from our Form S-8 registration statement (File No. 333-222342) filed with the Commission on December 29, 2017)4.4Form of Indemnification Agreement between the Registrant and its Directors and Officers (incorporated by reference to Exhibit 10.3from our F-1 registration statement (File No. 333-170055), as amended, initially filed with the Commission on October 20, 2010)Table of Contents160Exhibit Number Description of Document4.5Form of Employment Agreement between the Registrant and an Executive Officer of the Registrant (incorporated by reference toExhibit 10.4 from our F-1 registration statement (File No. 333-170055), as amended, initially filed with the Commission onOctober 20, 2010)4.6English translation of the Exclusive Option Agreement between Shanghai Noah Investment (Group) Co., Ltd. (formerly known asShanghai Fuzhou Investment Consulting Co., Ltd. and subsequently as Shanghai Noah Rongyao Investment Consulting Co., Ltd.) andshareholders of Noah Investment Management Co., Ltd., dated September 3, 2007 (incorporated by reference to Exhibit 10.5 fromour F-1 registration statement (File No. 333-170055), as amended, initially filed with the Commission on October 20, 2010)4.7English translation of the Exclusive Support Service Contract between Shanghai Noah Investment Management Co., Ltd. andShanghai Noah Investment (Group) Co., Ltd. (formerly known as Shanghai Fuzhou Investment Consulting Co., Ltd. and subsequentlyas Shanghai Noah Rongyao Investment Consulting Co., Ltd.), dated September 3, 2007 (incorporated by reference to Exhibit 10.6from our F-1 registration statement (File No. 333-170055), as amended, initially filed with the Commission on October 20, 2010)4.8English translation of the form of Power of Attorney issued by shareholders of Shanghai Noah Investment Management Co., Ltd.(incorporated by reference to Exhibit 10.7 from our F-1 registration statement (File No. 333-170055), as amended, initially filed withthe Commission on October 20, 2010)4.9English translation of the Share Pledge Agreement between Shanghai Noah Investment (Group) Co., Ltd. (formerly known asShanghai Fuzhou Investment Consulting Co., Ltd. and subsequently as Shanghai Noah Rongyao Investment Consulting Co., Ltd.) andshareholders of Noah Investment Management Co., Ltd., dated September 3, 2007 (incorporated by reference to Exhibit 10.8 fromour F-1 registration statement (File No. 333-170055), as amended, initially filed with the Commission on October 20, 2010)4.10 English translation of Loan Agreement between Jingbo Wang, Zhe Yin, Xinjun Zhang, Yan Wei, Boquan He, Qianghua Yan andShanghai Noah Investment (Group) Co., Ltd. (formerly known as Shanghai Noah Rongyao Investment Consulting Co., Ltd.), datedDecember 26, 2013 (incorporated by reference to Exhibit 4.9 from our annual report on Form 20-F (File No. 001-34936), as amended,initially filed with the Commission on March 24, 2014).4.11*English translation of the Acquisition Agreement among Noah Kekong (Shanghai) Enterprise Management Co., Ltd., Ningbo MeishanFree Trade Port Xinting Investment Partnership (Limited Partnership), Nanchang Qingting Asset Management Co., Ltd., United Win(China) Technology Limited, Shanghai Qingting SunnyWorld Real Estate Co., Ltd., New World (Qingdao) Real Estate Co., Ltd., QiHongbo and Lin Xia, dated May 9, 2021.8.1* List of Significant Consolidated Entities11.1 Code of Business Conduct and Ethics of Registrant (incorporated by reference to Exhibit 99.1 from our F-1 registration statement(File No. 333-170055), as amended, initially filed with the Commission on October 20, 2010)12.1* Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2* Principal Accounting Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1** Chief Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200213.2** Principal Accounting Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 200215.1* Consent of Deloitte Touche Tohmatsu Certified Public Accountants LLP, an Independent Registered Public Accounting Firm15.2* Consent of Zhong Lun Law FirmTable of Contents161Exhibit Number Description of Document15.3* Consent of Maples and Calder (Hong Kong) LLP101.INS* XBRL Instance Document101.SCH* XBRL Taxonomy Extension Schema Document101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document101.DEF* XBRL Taxonomy Extension Definition Linkbase Document101.LAB* XBRL Taxonomy Extension Label Linkbase Document101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document104* Cover Page Interactive Data File (embedded within the Inline XBRL document)*Filed with this Annual Report on Form 20-F.**Furnished with this Annual Report on Form 20-F.Table of Contents162SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized theundersigned to sign this annual report on its behalf.NOAH HOLDINGS LIMITEDBy:/s/ Jingbo WangName:Jingbo WangTitle:Chairwoman and Chief Executive OfficerDate: April 6, 2022Table of ContentsF-1Noah Holdings LimitedIndex to Consolidated Financial StatementsFor the Years Ended December 31, 2019 2020 and 2021Reports of Independent Registered Public Accounting Firm (PCAOB ID: 1113) F-2Consolidated Balance Sheets as of December 31, 2020 and 2021 F-5Consolidated Statements of Operations for the Years Ended December 31, 2019, 2020 and 2021 F-6Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2019, 2020 and 2021 F-7Consolidated Statements of Changes in Equity for the Years Ended December 31, 2019, 2020 and 2021 F-8Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2020 and 2021 F-9Notes to Consolidated Financial Statements F-11Additional Financial Information of Parent Company - Financial Statements Schedule IF-49Table of ContentsF-2REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Shareholders of Noah Holdings LimitedOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Noah Holdings Limited and its subsidiaries (the “Company”) as of December 31,2020 and 2021, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of thethree years in the period ended December 31, 2021, and the related notes and the financial statement schedule listed in the Schedule I (collectivelyreferred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of theCompany as of December 31, 2020 and 2021 and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2021, in conformity with accounting principles generally accepted in the United States of America.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theCompany’s internal control over financial reporting as of December 31, 2021, based on the criteria established in Internal Control —IntegratedFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 30, 2022expressed an unqualified opinion on the Company’s internal control over financial reporting.Convenience TranslationOur audits also comprehended the translation of Renminbi amounts into United States dollar amounts and, in our opinion, such translation has beenmade in conformity with the basis stated in Note 2(u) to the financial statements. Such United States dollar amounts are presented solely for theconvenience of readers outside the People’s Republic of China.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to theCompany in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission andthe PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits includedperforming procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performingprocedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in thefinancial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Table of ContentsF-3Critical Audit MatterThe critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated orrequired to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2)involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way ouropinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinionon the critical audit matter or on the accounts or disclosures to which it relates.Allowance for credit losses — Loan receivables — Refer to Notes 2(x) and 10 to the financial statementsCritical Audit Matter DescriptionAs of December 31, 2021, the Company’s allowance of credit losses on loan receivables (“ACLL”) was RMB93.9 million, represents management’sbest estimate of losses inherent in the loan receivables of RMB 595.8 million. The Company estimated expected loss for loans with different riskcharateristics by using one of the following methods: i) the probability of default and loss given default assumption derived from a statistical model orii) the discounted cash flow method utilizing the loan’s original effective interest rate. Both methodologies require the projection of future loanrepayments based on assumptions which are impacted by reasonable and supportable forecasts. The expected loss is computed on individual loanbasis. In addition, adjustments for qualitative factors are made to the ACLL when unique risk factors are identified and not considered within themodels.Given the significant amount of judgment required by management to estimate the ACLL, performing audit procedures to evaluate the reasonablenessof the estimated ACLL required a high degree of audit judgment and increased effort, including the need to involve our credit specialists.How the Critical Audit Matter Was Addressed in the AuditOur audit procedures related to the Company’s ACLL included the following, among others:●We tested the design and operating effectiveness of controls implemented by the Company related to the estimation of ACLL, includingthe appropriateness of the models applied, the reasonableness of the assumptions utilized and the qualitative factors considered.●On a sample basis, we tested the accuracy and completeness of the loan-level information and the internal historical data used.●With the assistance of our specialists, we (i) evaluated the appropriateness of risk characteristics used to develop the statistical models,(ii) evaluated the relevance and appropriateness of internal and external information applied in the models and (iii) tested themathematical accuracy of management’s calculation.●We inspected management’s documentation supporting the use of qualitative factors and analyzed the reasonableness of such factors./s/ Deloitte Touche Tohmatsu Certified Public Accountants LLPShanghai, ChinaMarch 30, 2022We have served as the Company’s auditor since 2010.Table of ContentsF-4REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Shareholders of Noah Holdings LimitedOpinion on Internal Control over Financial ReportingWe have audited the internal control over financial reporting of Noah Holdings Limited and its subsidiaries (the “Company”) as of December 31,2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reportingas of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theconsolidated financial statements as of and for the year ended December 31, 2021 of the Company and our report dated March 30, 2022 expressed anunqualified opinion on those financial statements and included an explanatory paragraph regarding the convenience translation.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control overFinancial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We area public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit includedobtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary inthe circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts andexpenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could havea material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that thedegree of compliance with the policies or procedures may deteriorate./s/ Deloitte Touche Tohmatsu Certified Public Accountants LLPShanghai, ChinaMarch 30, 2022Table of ContentsF-5Noah Holdings LimitedConsolidated Balance Sheets(Amount in Thousands, Except Share and Per Share Data) As of December 31, 202020212021 RMB RMB US$Assets Current assets: Cash and cash equivalents 5,005,211 3,404,603534,257Restricted cash 9,993 51080Short-term investments (including short-term investments measured at fair value of nil and RMB63,515 as of December 31,2020 and 2021, respectively) 114,928 92,80314,563Accounts receivable, net of allowance for credit losses of nil and RMB458 as of December 31, 2020 and 2021, respectively 434,458 808,029126,797Amounts due from related parties, net of allowance for credit losses of RMB4,006 and RMB30,128 as of December 31, 2020and 2021, respectively 520,178 451,38970,833Loan receivables, net of allowance for credit losses of RMB5,863 and RMB93,926 as of December 31, 2020 and 2021,respectively 418,947 595,76693,489Other current assets 199,447 163,71025,690Total current assets 6,703,162 5,516,810865,709Long-term investments (including long-term investments measured at fair value of RMB373,678 and RMB457,284, as ofDecember 31, 2020 and 2021, respectively) 536,384 668,572104,914Investment in affiliates 1,264,685 1,402,083220,017Property and equipment, net 248,669 2,580,935405,005Operating lease right-of-use assets, net274,154223,65235,096Deferred tax assets 224,240 335,90552,711Other non-current assets, net of allowance for credit losses of nil and RMB4,000 as of December 31, 2020 and 2021,respectively 148,292 161,83225,395Total Assets 9,399,586 10,889,7891,708,847Liabilities and Equity Current liabilities: (including amounts of the consolidated VIEs without recourse to Noah Holdings Ltd. See Note 2(b)) Accrued payroll and welfare expenses 705,622 946,547148,534Income tax payable 140,777 190,26029,856Deferred revenues 71,613 63,6319,985Contingent liabilities 530,433 433,34568,001Other current liabilities 432,650 649,255 101,882Total current liabilities 1,881,095 2,283,038358,258Deferred tax liabilities 45,881 234,13436,741Operating lease liabilities, non-current194,384130,95620,550Other non-current liabilities 855 100,02015,695Total Liabilities 2,122,215 2,748,148431,244Contingencies (Note 20) Shareholders’ equity: Class A ordinary shares (US$0.0005 par value): 91,394,900 shares authorized, 22,773,542 shares issued and 22,229,340shares outstanding as of December 31, 2020 and 22,683,970 shares issued and 21,764,455 shares outstanding as of December31, 2021 76 7612Class B ordinary shares (US$0.0005 par value): 8,605,100 shares authorized, 8,315,000 shares issued and outstanding as ofDecember 31, 2020 and 2021 28 284Treasury stock (544,202 and 919,515 ordinary shares as of December 31, 2020 and 2021, respectively) (290,913) (541,379) (84,954)Additional paid-in capital 3,565,667 3,534,741554,678Retained earnings 3,989,767 5,187,323814,005Accumulated other comprehensive loss (79,114) (140,014)(21,971)Total Noah Holdings Limited shareholders’ equity 7,185,511 8,040,7751,261,774Non-controlling interests 91,860 100,86615,829Total Shareholders’ Equity 7,277,371 8,141,6411,277,603Total Liabilities and Equity 9,399,586 10,889,7891,708,847The accompanying notes are an integral part of these consolidated financial statements.Table of ContentsF-6Noah Holdings LimitedConsolidated Statements of Operations(Amount in Thousands, Except Share and Per Share Data) Years Ended December 31, 2019202020212021 RMB RMB RMB US$Revenues: Revenues from others One-time commissions 690,860 679,014 1,130,894177,462Recurring service fees 524,692 700,157 913,700143,379Performance-based income 23,437 180,529 391,90361,498Other service fees 522,958 196,151 161,98225,419Total revenues from others 1,761,947 1,755,851 2,598,479407,758Revenues from funds Gopher manages One-time commissions 240,808 129,823 140,52222,051Recurring service fees 1,320,773 1,230,042 1,195,309187,570Performance-based income 89,648 208,996 392,29061,559Total revenues from funds Gopher manages 1,651,229 1,568,861 1,728,121271,180Total revenues 3,413,176 3,324,712 4,326,600678,938Less:VAT related surcharges (21,364) (18,886) (33,506)(5,258)Net revenues 3,391,812 3,305,826 4,293,094673,680Operating cost and expenses: Compensation and benefits Relationship manager compensation (625,044) (613,999) (920,896)(144,509)Performance-based compensation (31,283) (85,413) (158,043)(24,800)Other compensations (954,443) (804,600) (1,089,941)(171,036)Total compensation and benefits (1,610,770) (1,504,012) (2,168,880)(340,345)Selling expenses (331,346) (271,692) (437,131)(68,595)General and administrative expenses (296,492)(277,879) (383,321)(60,151)Provision for credit losses(130,723)(8,083)(112,959)(17,726)Other operating expenses, net (196,793) (99,040) (107,844)(16,923)Government subsidies 89,278 113,356 115,93918,193Total operating cost and expenses (2,476,846) (2,047,350) (3,094,196)(485,547)Income from operations 914,966 1,258,476 1,198,898188,133Other income (expenses): Interest income 89,099 67,317 71,86611,277Interest expenses (430) — ——Investment (loss) income (28,620) (86,369) 65,42610,267Settlement expenses—(1,828,907)(19,908)(3,124)Other (expense) income (7,040) 4,164 (18,240)(2,862)Total other income (expenses) 53,009 (1,843,795) 99,14415,558Income (loss) before taxes and income from equity in affiliates 967,975 (585,319) 1,298,042203,691Income tax expense (220,025) (258,460) (293,940)(46,126)Income from equity in affiliates 115,809 100,257 301,97947,387Net income (loss) 863,759 (743,522) 1,306,081204,952Less: net income (loss) attributable to non-controlling interests 34,608 1,703 (8,050)(1,263)Net income (loss) attributable to Noah Holdings Limited shareholders 829,151 (745,225) 1,314,131206,215Net income (loss) per share: Basic 27.12 (24.02) 39.126.14Diluted 26.84 (24.02) 38.906.10Weighted average number of shares used in computation: Basic 30,580,181 31,020,439 33,585,81833,585,818Diluted 30,924,095 31,020,439 33,781,77333,781,773The accompanying notes are an integral part of these consolidated financial statements.Table of ContentsF-7Noah Holdings LimitedConsolidated Statements of Comprehensive Income (Loss)(Amount in Thousands) Years Ended December 31, 2019202020212021 RMB RMB RMB US$Net income (loss) 863,759 (743,522) 1,306,081204,952Other comprehensive income (loss), net of tax Foreign currency translation adjustments 61,601 (176,910) (60,851)(9,549)Fair value fluctuation of available-for-sale investments, net of tax of nil (Note 4) (797) 771 — —Total other comprehensive income (loss), net of tax 60,804 (176,139) (60,851)(9,549)Comprehensive income (loss) 924,563 (919,661) 1,245,230195,403Less: comprehensive income (loss) attributable to non-controlling interests 34,558 1,727 (8,001) (1,256)Comprehensive income (loss) attributable to Noah Holdings Limitedshareholders 890,005 (921,388) 1,253,231 196,659The accompanying notes are an integral part of these consolidated financial statements.Table of ContentsF-8Noah Holdings LimitedConsolidated Statements of Changes in Equity(Amount in Thousands, Except for Share Data) Total Noah AccumulatedHoldingsAdditionalOtherLimitedTotalClass AClass BPaid-inRetainedComprehensiveShareholders’NoncontrollingShareholders’Ordinary SharesOrdinary SharesTreasury StockCapitalEarnings(Loss) IncomeEquityInterestsEquity Shares RMB1 Shares RMB Shares RMB RMB RMB RMB RMB RMB RMBBalance at January 1, 2019 21,890,253 73 8,315,000 28 (140,479) (40,267) 1,895,564 3,946,107 36,195 5,837,700 337,677 6,175,377Net income — — — — — — — 829,151 — 829,151 34,608 863,759Share-based compensation — — — — — — 94,897 — — 94,897 — 94,897Vesting of restricted shares 124,592 — — — — — — — — — — —Issuance of ordinary shares upon exercise of options 152,410 1 — — — — 31,685 — — 31,686 — 31,686Conversion of convertible notes457,8812————141,537——141,539—141,539Other comprehensive income (loss)—foreign currency translationadjustments — — — — — — — — 61,651 61,651 (50) 61,601Other comprehensive loss—change in fair value of available-for-sale investments — — — — — — — — (797) (797) — (797)Non-controlling interest capital injection — — — — — — 17,640 — — 17,640 500,973 518,613Impact of acquisition (Note 2(b)) — — — — — — — — — — 1,001 1,001Distributions to non-controlling interests — — — — — — — — — — (6,988) (6,988)Disposal of a subsidiary (Note 2(b)) — — — — — — — — — — (5,728) (5,728)Retirement of treasury stock (140,479) (1) — — 140,479 40,267 — (40,266) — — — —Balance at December 31, 2019 22,484,657 75 8,315,000 28 — — 2,181,323 4,734,992 97,049 7,013,467 861,493 7,874,960Net loss — — — — — — — (745,225)—(745,225)1,703(743,522)Share-based compensation — — — — — — 59,789——59,789—59,789Vesting of restricted shares 75,253 — — — — — — — — — — —Issuance of ordinary shares upon exercise of options 134,6391————33,371——33,372—33,372Restricted share units for settlement (Note 15) 78,993—————1,290,811——1,290,811—1,290,811Other comprehensive income (loss)—foreign currency translationadjustments — — — — — — — — (176,934)(176,934)24(176,910)Other comprehensive income—change in fair value of available-for-sale investments — — — — — — — — 771771—771Divestment of non-controlling interests — — — — — — ————(90,849)(90,849)Impact of acquisition (Note 2(b))——————————1,4171,417Distributions to non-controlling interests — — — — — — — — — — (28,335)(28,335)Disposal of a subsidiary (Note 2(b))——————————(649,220)(649,220)Repurchase of ordinary shares————(544,202)(290,913)———(290,913)—(290,913)Acquisition of non-controlling interests in subsidiaries——————373——373(4,373)(4,000)Balance at December 31, 2020 22,773,542768,315,00028(544,202)(290,913)3,565,6673,989,767(79,114)7,185,51191,8607,277,371Net income — — — — — — — 1,314,131—1,314,131(8,050)1,306,081Share-based compensation — — — — — — 51,037——51,037—51,037Treasury stock reissued for vesting of restricted shares, net — — — — 57,064 32,557 (5,700) (26,857) — — — —Treasury stock reissued for stock options exercised, net ————37,60621,456(3,748)(6,594)—11,114—11,114Treasury stock reissued for settlement, net (Note 15) ————102,70058,59495,339(48,336)—105,597—105,597Other comprehensive income (loss)—foreign currency translationadjustments — — — — — — — — (60,900)(60,900)49(60,851)Receipt of employees' shares to satisfy tax withholding obligationsrelated to share-based compensation————(89,572)(34,788)———(34,788)—(34,788)Non-controlling interest capital injection — — — — — — 15,689 — —15,68927,67443,363Divestment of non-controlling interests——————3,547——3,547(14,190)(10,643)Impact of acquisition (Note 2(b)) — — — — — — ————1,0121,012Distributions to non-controlling interests——————————(5,772)(5,772)Acquisition of non-controlling interests in subsidiaries (Note 2 (j))——————(187,090)——(187,090)8,283(178,807)Repurchase of ordinary shares————(572,683)(363,073)———(363,073)—(363,073)Retirement of treasury stock(89,572)———89,57234,788—(34,788)————Balance at December 31, 2021 22,683,970768,315,00028(919,515)(541,379)3,534,7415,187,323(140,014)8,040,775100,8668,141,641The accompanying notes are an integral part of these consolidated financial statements.1The amount less than RMB 1 is rounded to zero.Table of ContentsF-9Noah Holdings LimitedConsolidated Statements of Cash Flows(Amount in Thousands) Years Ended December 31, 2019202020212021 RMB RMB RMB US$Cash flows from operating activities: Net income (loss) 863,759 (743,522) 1,306,081204,952Adjustments to reconcile net income (loss) to net cash provided by operating activities: Loss (gain) from disposal of property and equipment 1,163 572 (6,063)(951)Depreciation expense 105,432 98,452 146,56723,000Non-cash lease expenses85,42084,74885,69513,447Share-based compensation expenses 94,897 59,789 51,0378,009Share-based settlement expense—1,290,81119,9083,124Income from equity in affiliates, net of dividends (39,964) (60,397) (206,218)(32,360)(Gain) loss from disposal of subsidiaries (3,971) 1,879 ——Provision for credit losses 130,723 8,083 112,95917,726Amortization of unearned lease income (37,961) (3,091) ——Impairment of long-term investments104,365115,10010,0001,569Changes in investment fair value in the consolidated funds (35,847) (11,383) (2,520)(395)Fair value changes of equity investments measured at fair value (15,092) (6,458) (67,420)(10,580)Changes in operating assets and liabilities: Accounts receivable 47,755 (219,330) (362,996)(56,962)Amounts due from related parties 12,851 14,990 53,1948,347Other current assets 69,992 (96,832) 57,1358,966Other non-current assets (11,521) (32,202) (8,919)(1,400)Accrued payroll and welfare expenses (114,487) 149,903 240,92537,807Income taxes payable 73,109 14,034 49,4837,765Deferred revenues (42,231) (29,080) (7,982)(1,253)Other current liabilities 16,356 (361,210) 191,42030,038Other non-current liabilities (32,285) (2,578) 99,16515,561Contingent liabilities — 530,433 (11,398)(1,789)Lease assets and liabilities(84,068)(22,463)(93,805)(14,720)Trading debt securities — — (14,804)(2,323)Deferred tax assets and liabilities (62,364) (67,330) (119,606)(18,769)Acquisitions and sales of investment products 162,202 83,435 ——Net cash provided by operating activities 1,288,233 796,353 1,521,838238,809Cash flows from investing activities: Purchases of property and equipment (65,333) (51,618) (2,271,216)(356,403)Proceeds from disposal of property and equipment — — 38,8456,096Purchase of held-to-maturity investments (74,500) (225,000) (17,000)(2,668)Proceeds from redemption of held-to-maturity investments 38,067 176,389 101,63915,949Purchases of available-for-sale investments (16,056) — (15,000)(2,354)Proceeds from sale or redemption of available-for-sale investments 57,372 — 15,6322,453Purchases of short-term equity securities — — (18,975)(2,978)Proceeds from short-term equity securities — — 3,686578Purchase of other long-term investments(33,460)(6,454)(91,256)(14,320)Proceeds from sale of other long-term investments 231,171 26,606 8,465 1,328Purchase of investments held by consolidated funds (1,575,592) — (3,327) (522)Proceeds from investments held by consolidated funds1,228,73272,6088,7771,377Loans to related parties (318,055) (164,993) (28,629)(4,493)Principal collection of loans to related parties 314,099 174,523 18,1012,840Loans disbursement to third parties (7,086,712) (417,934) (1,007,378)(158,079)Principal collection of loans originated to third parties 6,993,745 639,551 685,978107,646Increase in investments in affiliates (39,916) (67,865) (101,988)(16,004)Capital return from investments in affiliates 57,570 168,344 129,50720,322Proceeds from disposal of subsidiaries, net of cash deconsolidated 115,219 20,331 ——Acquisitions, net of cash acquired (8,363) 8,096 (27,955)(4,387)Net cash (used in) provided by investing activities (182,012) 352,584 (2,572,094)(403,619)The accompanying notes are an integral part of these consolidated financial statements.Table of ContentsF-10Noah Holdings LimitedConsolidated Statements of Cash Flows(Amount in Thousands) Years Ended December 31, 2019202020212021 RMB RMB RMB US$Cash flows from financing activities: Proceeds from issuance of ordinary shares upon exercise of stock options 31,686 33,372 11,1141,744Contribution from non-controlling interests 518,613 — 43,3636,805Distributions to non-controlling interests (6,988) (28,335) (5,772) (906)Payments to acquire non-controlling interests in subsidiaries — (4,000) (178,807)(28,058)Divestment of non-controlling interests — (90,849) (10,643) (1,670)Payment for repurchase of ordinary shares — (281,610) (372,376) (58,434)Net cash provided by (used in) financing activities 543,311 (371,422) (513,121)(80,519)Effect of exchange rate changes 37,811 (148,745) (46,714)(7,330)Net increases (decrease) in cash, cash equivalents and restricted cash 1,687,343 628,770 (1,610,091)(252,659)Cash, cash equivalents and restricted cash—beginning of the year 2,706,591 4,393,934 5,022,704788,172Cash, cash equivalents and restricted cash—end of the year 4,393,934 5,022,704 3,412,613535,513Supplemental disclosure of cash flow information: Cash paid for income taxes 209,975 310,586 364,12057,139Cash paid for interest expenses 430 — ——Supplemental disclosure of non-cash investing and financing activities: Purchase of property and equipment in accounts payable 1,311 1,662 44,8757,042Conversion of convertible notes 145,004 — ——Consideration payable of repurchase of ordinary shares—9,303——Operating lease right-of-use assets obtained in exchange for operating lease liabilities127,68764,27552,1838,189Reconciliation to amounts on consolidated balance sheets: Cash and cash equivalents 4,387,345 5,005,211 3,404,603534,257Restricted cash 6,589 9,993 51080Restricted cash – non-current included in other non-current assets—7,5007,5001,176Total cash, cash equivalents and restricted cash 4,393,934 5,022,704 3,412,613535,513The accompanying notes are an integral part of these consolidated financial statements.Table of ContentsF-11Noah Holdings LimitedNotes to Consolidated Financial StatementsFor the Years Ended December 31, 2019, 2020 and 2021(In Thousands Renminbi, except for share and per share data, or otherwise stated)1. Organization and Principal ActivitiesNoah Holdings Limited (“Company”) was incorporated on June 29, 2007 in the Cayman Islands with limited liability. The Company,through its subsidiaries and consolidated variable interest entities (“VIEs”) (collectively, the “Group”), is a leading and pioneer wealth managementservice provider in the People’s Republic of China (“PRC”) offering comprehensive one-stop advisory services on global investment and assetallocation primarily for high net wealth (“HNW”) investors. The Group began offering services in 2005 through Shanghai Noah InvestmentManagement Co., Ltd. (“Noah Investment”), a consolidated VIE, founded in the PRC in August 2005.2. Summary of Principal Accounting Policies(a) Basis of PresentationThe consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States ofAmerica (“U.S. GAAP”).(b) Principles of ConsolidationThe consolidated financial statements include the financial statements of the Company, its subsidiaries and consolidated VIEs. All inter-company transactions and balances have been eliminated upon consolidation.A consolidated subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power or hasthe power to: appoint or remove the majority of the members of the board of directors; cast a majority of votes at the meeting of the board ofdirectors; or govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.U.S. GAAP provides guidance on the identification and financial reporting for entities over which control is achieved through means otherthan voting interests. The Group evaluates each of its interests in private companies to determine whether or not the investee is a VIE and, if so,whether the Group is the primary beneficiary of such VIE. In determining whether the Group is the primary beneficiary, the Group considers if theGroup (1) has power to direct the activities that most significantly affects the economic performance of the VIE, and (2) receives the economicbenefits of the VIE that could be significant to the VIE. The consolidation guidance requires an analysis to determine (i) whether an entity in whichthe Group holds a variable interest is a VIE and (ii) whether the Group’s involvement, through holding interests directly or indirectly in the entity orcontractually through other variable interests (for example, management and performance income), would give it a controlling financial interest. Ifdeemed the primary beneficiary, the Group consolidates the VIE.Consolidation through contractual arrangementsThe Company had been engaged in the asset management business through contractual arrangements among its PRC subsidiary, ShanghaiNoah Investment (Group) Co., Ltd (“Noah Group”), its PRC VIE, Noah Investment, and Noah Investment’s shareholders (“RegisteredShareholders”). The Group relies on the contractual agreements with Noah Investment and the Registered Shareholders for a portion of its operationsin the PRC, including the Group’s asset management business. Because of the contractual arrangements, the Company is able to consolidate thefinancial results of Noah Investment and its operating subsidiaries.Table of ContentsF-12Since the Company does not have any equity interests in Noah Investment, in order to exercise effective control over its operations, theCompany, through its wholly owned subsidiary Noah Group, entered into a series of contractual arrangements with Noah Investment and itsshareholders, pursuant to which the Company is entitled to receive effectively all economic benefits generated from Noah Investment shareholders’equity interests in it. These contractual arrangements include:(i)Exclusive Option AgreementPursuant to an exclusive option agreement entered into by the Registered Shareholders and Noah Group in September 2007 (the “ExclusiveOption Agreement”), the Registered Shareholders granted Noah Group or its third-party designee an irrevocable and exclusive option to purchase allor part of their equity interests in Noah Investment when and to the extent permitted by PRC law. The purchase price shall be the higher of theminimum amount required by PRC law or an amount determined by Noah Group. Noah Group may exercise such option at any time and from time totime until it has acquired all equity interests of Noah Investment. During the term of this agreement, the Registered Shareholders are prohibited fromtransferring their equity interests in Noah Investment to any third party, and Noah Investment is prohibited from declaring and paying any dividendwithout Noah Group’s prior consent.(ii)Exclusive Support Service AgreementPursuant to an exclusive support service agreement entered into by Noah Investment and Noah Group in September 2007 (the “ExclusiveSupport Service Agreement”), Noah Investment has engaged Noah Group as its exclusive technical and operational consultant to support NoahInvestment’s operational activities. Noah Group has agreed to provide certain support services to Noah Investment, including client management,technical and operational support and other services, for which Noah Investment has agreed to pay to Noah Group service fees determined based onactual services provided, which shall be the income of Noah Investment, less (i) expenses and costs, and (ii) the License Fee (as defined below). NoahGroup is also obligated to grant Noah Investment licenses to use certain intellectual property rights, for which Noah Investment has agreed to paylicense fees (the “License Fee”) at the rates set by the board of Noah Group.(iii)Share Pledge AgreementPursuant to the share pledge agreement entered into by each of the Registered Shareholders and Noah Group in September 2007 (the “SharePledge Agreement”), the Registered Shareholders pledged all of their equity interests in Noah Investment (the “Pledge Equity Interests”) to NoahGroup as collateral to secure their obligations under the Exclusive Option Agreement and Noah Investment’s obligations under the Exclusive SupportService Agreement. In the case that Noah Investment increases its registered capital upon prior written consent of Noah Group, the Pledge EquityInterests shall include all the additional equity interests subscribed by the Registered Shareholders in such capital increase. If Noah Investment or theRegistered Shareholders breach any of their respective obligations under the Exclusive Support Service Agreement or the Exclusive OptionAgreement, Noah Group, as the pledgee, will be entitled to certain rights, including being repaid in priority by the proceeds from auction or sale of thePledge Equity Interests. The share pledges under the Share Pledge Agreement have been registered with competent branches of State Administrationfor Market Regulation of the PRC.(iv)Powers of AttorneyEach of the Registered Shareholders executed a power of attorney in September 2007 (the “Powers of Attorney”), respectively, to grant NoahGroup or its designee the power of attorney to act on his or her behalf on all matters pertaining to Noah Investment and to exercise all of his or herrights as the registered shareholder of Noah Investment, including the right to attend shareholders meetings, appoint board members and seniormanagement members, other voting rights and the right to transfer all or a part of his or her equity interests in Noah Investment. The Powers ofAttorney shall remain irrevocable and effective during the period that the Registered Shareholders are shareholders of Noah Investment.Table of ContentsF-13The contractual arrangements provide the Company effective control over Noah Investment and its subsidiaries, while the Share PledgeAgreement secure the equity owners’ obligations under the relevant agreements. Because the Company, through Noah Group, has (i) the power todirect the activities of Noah Investment that most significantly affect the entity’s economic performance and (ii) the right to receive substantially all ofthe benefits from Noah Investment, the Company is deemed the primary beneficiary of Noah Investment. Accordingly, the Group has consolidated thefinancial statements of Noah Investment since its inception. The aforementioned contractual agreements are effective agreements between a parentand a consolidated subsidiary, neither of which is separately accounted for in the consolidated financial statements (i.e. a call option on subsidiaryshares under the Exclusive Option Agreement or a guarantee of subsidiary performance under the Share Pledge Agreement) or are ultimatelyeliminated upon consolidation (i.e. service fees under the Exclusive Support Service Agreement).The Company believes that its corporate structure and the contractual arrangements do not result in a violation of the current applicable PRClaws and regulations. The Company’s PRC Legal Adviser, based on its understanding of PRC laws and regulations currently in effect, is of theopinion that each of the contracts under the contractual arrangements among the Company’s wholly-owned PRC subsidiary, Noah Group, NoahInvestment, and its shareholders, is valid, legal and binding in accordance with its terms. However, the Company has been further advised by its PRCLegal Adviser that as there are substantial uncertainties regarding the interpretation and application of PRC laws and regulations and relevantregulatory measures concerning the foreign investment restrictions and administrative licenses and permits related to various underlying industries,there can be no assurance that the PRC government authorities or courts, or other authorities that regulate the industries that the Group’s funds aredirectly or indirectly investing into, would agree that the Company’s corporate structure or any of the contracts under the contractual arrangementscomply with PRC licensing, registration or other regulatory requirements, with existing policies or with requirements or policies that may be adoptedin the future. PRC laws and regulations governing the legality, validity and enforceability of the contractual arrangements are uncertain and therelevant government authorities have broad discretion in interpreting these laws and regulations.If the Company’s corporate structure and the contractual arrangements are deemed by relevant regulatory authorities to be illegal, either inwhole or in part, the Company may lose control of its VIEs and have to modify such structure to comply with regulatory requirements. However,there can be no assurance that the Company can achieve this without material disruption to its business. Further, if the Company’s corporate structureand the contractual arrangements are found to be in violation of any existing or future PRC laws or regulations, the relevant regulatory authoritieswould have broad discretion in dealing with such violations, including:●revoking the Group’s business and operating licenses;●levying fines on the Group;●confiscating any of the Group’s income that they deem to be obtained through illegal operations;●shutting down the Group’s services;●discontinuing or restricting the Group’s operations in China;●imposing conditions or requirements with which the Group may not be able to comply;●requiring the Group to change its corporate structure and the contractual arrangements;●restricting or prohibiting the Group’s use of the proceeds from overseas offering to finance the VIEs’ business and operations; and●taking other regulatory or enforcement actions that could be harmful to the Group’s business.Table of ContentsF-14Consolidation of investment fundsIn evaluating whether the investment funds in the legal form of limited partnership the Group manages as general partner are VIEs or not, theGroup firstly assesses whether a simple majority or lower threshold of limited partnership interests, excluding interests held by the general partner,parties under common control of the general partner, or parties acting on behalf of the general partner, have substantive kick-out rights or participatingrights. If such rights exist, the limited partnership is not deemed as a VIE and no further analysis will be performed. If the limited partnership isassessed to be a VIE, the Group will further assess whether there is any interest it has constituted a variable interest. The Group concludes that theservice fees it earns, including carried interest earned in the capacity of general partner, are commensurate with the level of effort required to providesuch services and are at arm’s length and therefore are not deemed as variable interests. Before 2015, all limited partnerships the Group managed asgeneral partner had substantive kick-out rights exercisable by a simple-majority of non-related limited partners and therefore were not deemed asVIEs. Since 2015, not all the newly formed limited partnerships the Group manages as general partners have substantive kick-out rights exercisableby a simple-majority of non-related limited partners and therefore constitute VIEs. The Group performed a quantitative analysis to determine if itsinterest could absorb losses or receive benefits that could potentially be significant to the VIEs and if it would be deemed to be the primarybeneficiary of the VIEs. Such limited partnerships are deemed as VIEs not consolidated by the Group if the general partner interest to absorb losses orreceive benefits is not potentially significant to the VIEs.The Group also manages contractual funds as fund manager and earns management fee and/or performance-based income. The contractualfunds are VIEs as the fund investors do not have substantive kick-out rights or participating rights. The Group from time to time invested in thecontractual funds it manages for investment income. Such investments constitute variable interests to the contractual funds.The Group determines whether it is a primary beneficiary of a VIE when it initially involves with a VIE and reconsiders that conclusionwhen facts and circumstances change.The Group does not provide performance guarantees and has no other financial obligation to provide funding to consolidated VIEs other thanits own capital commitments.During the year ended December 31, 2020, the Group deconsolidated an investment fund upon the withdrawal of partial investment as it wasno longer the primary beneficiary of the fund. As of the date of deconsolidation, the Group’s total assets, total liabilities and non-controlling interestswere reduced by RMB757.8 million, RMB108.6 million and RMB649.2 million, respectively.The Group assessed whether it was the primary beneficiary and consolidated or deconsolidated several funds during the years endedDecember 31, 2019, 2020 and 2021, other than the transaction described herein, the impact of which was immaterial.Table of ContentsF-15The following amounts of Noah Investment and its subsidiaries and the consolidated funds were included in the Group’s consolidatedfinancial statements and are presented before the elimination of intercompany transactions with the non-VIE subsidiaries of the Group. As of December 31, (Amount in Thousands)202020212021 RMB RMB US$Cash and cash equivalents 839,534 1,181,479185,400Restricted cash 3,585 51080Short-term investments 75,000 9,6621,516Accounts receivable, net 133,956 475,65274,640Amounts due from related parties, net 350,879 276,74443,427Loans receivables, net104,67350,8847,985Other current assets 31,613 53,2478,356Long-term investments 280,624 300,72047,190Investment in affiliates 740,452 854,138134,033Property and equipment, net 18,134 43,9716,900Operating lease right-of-use assets, net19,01015,0312,359Deferred tax assets 41,149 63,3129,935Other non-current assets 14,519 7,6201,196Total assets 2,653,128 3,332,970523,017Accrued payroll and welfare expenses 166,411 381,65359,890Income tax payable 99,889 149,22623,417Amounts due to the Group’s subsidiaries* 143,454 179,32528,140Deferred revenue 8,016 6,7211,055Other current liabilities 171,753 238,73837,463Deferred tax liabilities 3,070 25440Other non-current liabilities—53,1198,336Operating lease liabilities, non-current20,12315,5122,434Total liabilities 612,716 1,024,548160,775*Amounts due to the Group’s subsidiaries are eliminated in the process of preparing the consolidated balance sheets.Table of ContentsF-16Years Ended December 31, (Amount in Thousands) 2019 2020 2021 2021RMBRMBRMBUS$Revenue: Revenues from others One-time commissions 71,528 161,272 552,76186,740Recurring service fees 3,032 — 50,8177,974Other service fees 124,837 84,752 69,95110,977Total revenues from others 199,397 246,024 673,529105,691Revenues from funds Gopher manages One-time commissions 3,660 36,290 86,80113,621Recurring service fees 615,999 569,154 588,33792,323Performance-based income 53,010 133,276 165,79126,016Total revenues from funds Gopher manages 672,669 738,720 840,929131,960Total revenues(1) 872,066 984,744 1,514,458237,651Less: VAT related surcharges (4,916) (6,155) (9,350)(1,467)Net revenues 867,150 978,589 1,505,108236,184Total operating cost and expenses(2) (565,203) (524,913) (867,215)(136,085)Total other income 51,370 68,444 23,8683,745Net income 289,514 393,299 616,42196,729Net income attributable to Noah Holdings Limited shareholders 278,827 393,508 621,01097,449Cash flows provided by (used in) operating activities(3) 761,312 (409,359) 562,40088,253Cash flows (used in) provided by investing activities (345,092) 357,026 (207,114)(32,501)Cash flows provided (used in) by financing activities 20,670 — (16,416)(2,576)(1)The total revenues include intragroup transactions amounted to RMB50,670, RMB43,101 and RMB38,399 for the years ended December 31,2019, 2020 and 2021, respectively, which were eliminated in the process of preparing the consolidated statements of operations.(2)The total operating cost and expenses include intragroup transactions amounted to RMB184,712, RMB141,702 and RMB186,962 for the yearsended December 31, 2019, 2020 and 2021, respectively, which were eliminated in the process of preparing the consolidated statements ofoperations.(3)Cash flows provided by operating activities in 2019, 2020 and 2021 include amounts due to the Group’s subsidiaries of RMB583,347,RMB143,454 and RMB179,325 (US$28,140).The VIEs contributed an aggregate of 25.6%, 29.6% and 35.1% of the consolidated net revenues for the years ended December 31, 2019,2020 and 2021, respectively and an aggregate of 33.5% and 47.2% of the consolidated net income for the years ended December 31, 2019 and 2021,respectively. For the year ended December 31, 2020, the net income of the VIEs contributed an aggregate 36.2% of the consolidated net incomeexcluding the settlement expenses. As of December 31, 2020 and 2021, the VIEs accounted for an aggregate of 28.2% and 30.6%, respectively, of theconsolidated total assets.There are no consolidated assets of the VIEs and their subsidiaries that are collateral for the obligations of the VIEs and their subsidiaries andcan only be used to settle the obligations of the VIEs and their subsidiaries, except for the cash held by the consolidated funds of which cash couldonly be used by the consolidated funds. There are no terms in any arrangements, considering both explicit arrangements and implicit variable intereststhat require the Company or its subsidiaries to provide financial support to the VIEs. However, if the VIEs ever need financial support, the Companyor its subsidiaries may, at its option and subject to statutory limits and restrictions, provide financial support to its VIEs through loans to theshareholders of the VIEs or entrustment loans to the VIEs.Relevant PRC laws and regulations restrict the VIEs from transferring a portion of their net assets, equivalent to the balance of its statutoryreserve and its share capital, to the Group in the form of loans and advances or cash dividends. Please refer to Note 17 for disclosure of restricted netassets.Table of ContentsF-17As of December 31, 2020 and 2021, the Group had some variable interests in various investment funds and contractual funds that were VIEsbut were not consolidated by the Group as the Group was not determined to be the primary beneficiary of the funds. The maximum potential financialstatement loss the Group could incur if the investment funds and contractual funds were to default on all of their obligations is (i) the loss of value ofthe interests in such investments that the Group holds, including equity investments recorded in investments in affiliates as well as debt securitiesinvestments recorded in short-term investments and long-term investments in the consolidated balance sheet, and (ii) any management fee and/orcarried interest receivables as well as loans to the funds recorded in amounts due from related parties. The following table summarizes the Group’smaximum exposure to loss associated with identified non-consolidated VIEs in which it holds variable interests as of December 31, 2020 and 2021,respectively.As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Amounts due from related parties 47,024 40,4016,340Investments 599,328 497,15478,014Maximum exposure to loss in non-consolidated VIEs 646,352 537,55584,354The Group has not provided other form of financial support to these non-consolidated VIEs during the years ended December 31, 2020 and2021, and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these non-consolidated VIEs as of December 31, 2020and 2021.(c) Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and thereported amounts of revenue and expense during the reporting period. Actual results could differ materially from such estimates. Significantaccounting estimates reflected in the Group’s consolidated financial statements include assumptions used to determine valuation allowance fordeferred tax assets, allowance for credit losses, fair value measurement of underlying investment portfolios of the funds that the Group invests, fairvalue of financial instruments, assumptions related to the consolidation of entities in which the Group holds variable interests, assumptions related tothe valuation of share-based compensation, variable consideration for revenue recognition, impairment of long-term investments, impairment of long-lived assets, determination of the incremental borrowing rates used for operating lease liabilities and loss contingencies.(d) Concentration of Credit RiskThe Group is subject to potential significant concentrations of credit risk consisting principally of cash and cash equivalents, accountsreceivable, amounts due from related parties, loan receivables, investments and receivables from financing lease service. All of the Group’s cash andcash equivalents and more than half of investments are held at financial institutions, Group’s management believes, to be high credit quality. TheGroup also invests in equity securities of private companies, of which no single equity security accounted for more than 3% of total assets as ofDecember 31, 2020, and 2021. In addition, the Group’s investment policy limits its exposure to concentrations of credit risk.Credit of lending business is controlled by the application of credit approvals, limits and monitoring procedures. To minimize credit risk, theGroup requires collateral in form of right to securities. The Group identifies credit risk on a customer by customer basis. The information is monitoredregularly by management.There were no investment product providers which accounted for 10% or more of total revenues for the years ended December 31, 2019 and2020. There was an investment product provider which accounted for 11.4% of the Group’s total revenues for the year ended December 31, 2021.Table of ContentsF-18(e) Investments in AffiliatesAffiliated companies are entities over which the Group has significant influence, but which it does not control. The Group generallyconsiders an ownership interest of 20% or higher to represent significant influence. Investments in affiliates are accounted for by the equity method ofaccounting. Under this method, the Group’s share of the post-acquisition profits or losses of affiliated companies is recognized in the statements ofoperations and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealizedgains on transactions between the Group and its affiliated companies are eliminated to the extent of the Group’s interest in the affiliated companies;unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. When the Group’s share oflosses in an affiliated company equals or exceeds its interest in the affiliated company, the Group does not recognize further losses, unless the Grouphas incurred obligations or made payments on behalf of the affiliated company. Any dividends received on affiliated companies are recorded as areduction to the investment balance. An impairment loss is recorded when there has been a loss in value of the investment that is other thantemporary.The Group also considers it has significant influence over the funds that it serves as general partner or fund manager. For funds that theGroup is not deemed the primary beneficiary of these funds, the equity method of accounting is accordingly used for investments by the Group inthese funds. In addition, the investee funds meet the definition of an Investment Company under ASC 946 and are required to report their investmentassets at fair value. The Group records its equity pick-up based on its percentage ownership of the investee funds’ operating result.(f) Fair Value of Financial InstrumentsThe Group records certain of its financial assets and liabilities at fair value on a recurring basis. Fair value reflects the price that would bereceived from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Whendetermining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principalor most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset orliability.The Group applies a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use ofunobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest levelof input that is significant to the fair value measurement. The hierarchy is as follows:Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for theasset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets withinsufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can bederived principally from, or corroborated by, observable market data.Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to themeasurement of the fair value of the assets or liabilities.As a practical expedient, the Group uses Net Asset Value (“NAV”) or its equivalent to measure the fair value of certain private equity funds.NAV is primarily determined based on information provided by external fund administrators.(g) Cash and Cash EquivalentsCash and cash equivalents consist of cash on hand, demand deposits, money market funds and mutual funds, which are unrestricted as towithdrawal and use, and which have original maturities of three months or less when purchased, presenting insignificant risk of changes in value.As of December 31, 2020 and 2021, cash and cash equivalents of RMB8,335 and RMB24,806, respectively, was held by the consolidatedfunds. Cash and cash equivalents held by the consolidated funds represents cash that, although not legally restricted, is not available to generalliquidity needs of the Group as the use of such funds is generally limited to the investment activities of the consolidated funds.Table of ContentsF-19(h) Restricted CashThe Group’s restricted cash primarily represents cash legally set aside for a specified purpose and cash deposits required by China InsuranceRegulatory Commission for entities engaging in insurance agency or brokering activities in the PRC. Such cash cannot be withdrawn without thewritten approval of the China Insurance Regulatory Commission.(i) InvestmentsThe Group invests in debt securities and accounts for the investments based on the nature of the products invested, and the Group’s intentand ability to hold the investments to maturity.The Group’s investments in debt securities include marketable bond fund securities, trust products, asset management plans, contractualfunds and real estate funds those have a stated maturity and normally pay a prospective fixed rate of return and secondary market equity fundproducts, the underlying assets of which are portfolios of equity investments in listed enterprises. The Group classifies the investments in debtsecurities as held-to-maturity when it has both the positive intent and ability to hold them until maturity. Held-to-maturity investments are recorded atamortized cost and are classified as long-term or short-term according to their contractual maturity. Long-term investments are reclassified as short-term when their contractual maturity date is less than one year. Investments that are bought and held principally for the purpose of selling them in thenear term are classified as trading debt securities. Investments that do not meet the criteria of held-to-maturity or trading debt securities are classifiedas available-for-sale, and are reported at fair value with changes in fair value deferred in other comprehensive income.The Group records equity investments that are not subject to equity method of accounting at fair value, with gains and losses recordedthrough net earnings. In accordance with ASC 321, the Group elects the measurement alternative and records certain equity investments withoutreadily determinable fair value at cost, less impairments, plus or minus observable price changes. The Group continues to apply the alternativemeasurement guidance until the investments have readily determinable fair values or become eligible for the NAV practical expedient. The Groupmay subsequently elect to measure such investments at fair value and the election of changing measurement approach is irrevocable.Equity investments the Group elects to use measurement alternative are evaluated for impairment qualitatively at each reporting date basedon various factors, including projected and historical financial performance, cash flow forecasts and financing needs, the regulatory and economicenvironment of the investee and overall health of the investee’s industry. If impairment indicators of the investment are noted, the Group has toestimate the fair value of the investment in accordance with ASC 820. An impairment loss in net income will be recognized equal to the differencebetween the carrying value and fair value if the fair value is less than the investment’s carrying value.Before the adoption of ASC 326, the Group reviewed its investments in debt except for those classified as trading debt securities for other-than-temporary impairment based on the specific identification method and considered available quantitative and qualitative evidence in evaluatingpotential impairment. The Group recognizes other-than-temporary impairment in earnings if it had the intent to sell the debt security or if it was more-likely-than-not that it would be required to sell the debt security before recovery of its amortized cost basis. For a debt security that the Company didnot intend to sell nor was it more likely than not that the Company would be required to sell before recovery of its amortized cost, only the credit losscomponent was recognized in earnings and the cost basis of the security is written down accordingly. After the adoption of ASC 326 on January 1,2020, the Group applies the current expected credit loss (“CECL”) model to held-to-maturity investments and the changes to the impairment modelfor available-for-sale investments on a modified retrospective basis (other than the investments that were other-than-temporarily impaired prior to theadoption, to which the adoption was on a prospective basis). After considering various factors, including historical experience, credit quality and otherfactors that may affect the Group’s ability to collect the investments, the Group determined there was no cumulative effect from the adoption of ASC326 as of January 1, 2020. For held-to-maturity investments, the Group evaluates credit loss upon acquisition at the pool level based on availableinformation relevant to assessing the collectibility of cash flows. An expected credit loss will be recognized as an allowance through earnings if thenet amount of cash flow expected to be collected is less than the amortized cost basis. For available-for-sale investments, the impairment model isgenerally consistent with the existing GAAP except that the credit loss is recorded through an allowance approach as opposed to a permanent write-down of cost basis.Table of ContentsF-20(j) Non-controlling interestsA non-controlling interest in a subsidiary of the Group represents the portion of the equity (net assets) in the subsidiary not directly orindirectly attributable to the Group. Non-controlling interests are presented as a separate component of equity in the consolidated balance sheet,earnings and other comprehensive income are attributed to controlling and non-controlling interests.The following schedule shows the effects of changes in the Company’s ownership interest in less than wholly owned subsidiaries on equityattributable to Noah Holdings Limited shareholders:Years Ended December 31, (Amount in Thousands) 2019 2020 2021 2021RMBRMBRMBUS$Net income (loss) attributable to Noah Holdings Limited shareholders 829,151 (745,225) 1,314,131206,215Transfers from (to) the non-controlling interests: Increase (decrease) in Noah’s equity by acquiring equity interests from non-controllinginterests — 373 (187,090) (29,359)Increase in Noah’s equity from divestment of non-controlling interests — — 3,547 557Increase in Noah’s capital from contribution of non-controlling interests 17,640 — 15,6892,462Net transfers from (to) non-controlling interests17,640373(167,854)(26,340)Change from net income (loss) attributable to Noah Holdings Limited shareholders andtransfers from (to) non-controlling interests846,791(744,852)1,146,277179,875In 2021, the Group purchased equity interests in subsidiaries from certain non-controlling interest holders (unrelated third parties) for cashconsiderations of RMB178.8 million while the Group maintains control of subsidiaries and thus represents equity transactions. The transactions wereaccounted for equity transactions with no impact on current period earnings, given the Group maintained the control of the subsidiaries before andafter the transactions.(k) Property and Equipment, netProperty and equipment is stated at cost less accumulated depreciation, and is depreciated using the straight-line method over the followingestimated useful lives: Estimated Useful Lives in YearsLeasehold improvements Shorter of the lease term or expected useful lifeFurniture, fixtures, and equipment 3 - 5 yearsMotor vehicles 5 yearsSoftware 2 - 5 yearsBuildings 30 yearsThe estimated useful life of buildings acquired in the year of 2021 was determined based on the remaining term of the real estate certificate.Gains and losses from the disposal of property and equipment are included in income from operations.(l) Impairment of long-lived assetsThe Group reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carryingamount may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows. Undiscounted cash flows expected to begenerated by the related assets are estimated over the asset’s useful life based on updated projections. If the evaluation indicates that the carryingamount of the asset may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group asdetermined by an appropriate market appraisal or other valuation technique.Table of ContentsF-21(m) Revenue RecognitionOn January 1, 2018, the Group adopted ASC 606, Revenue from Contracts with Customers using the modified retrospective method for allcontracts not completed as of the date of adoption. Under the guidance of ASC 606, the Group is required to (a) identify the contract(s) with acustomer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to theperformance obligations in the contract and (e) recognize revenue when (or as) the Group satisfies its performance obligation. In determining thetransaction price, the Group has included variable consideration only to the extent that it is probable that a significant reversal in the amount ofcumulative revenue recognized would not occur. Revenues are recorded, net of sales related taxes and surcharges.The following table summarizes the Group’s main revenues streams from contracts with its customers:Revenue Streams Performance Obligation Satisfied Over Time orPoint In Time Payment Terms Variable orFixed ConsiderationOne-time commissions - Fund distributionservicesPoint in timeTypically paid within a month after investment product establishedFixedOne-time commissions - Insurancebrokerage servicesPoint in timeTypically paid within a month after insurance policy issued and/orrenewedFixed andVariableRecurring service feesOver timeTypically quarterly, semi-annually or annuallyVariablePerformance-based incomePoint in timeTypically paid shortly after the income has been determinedVariableLending servicesOver timeTypically monthly in arrearsFixedInvestor education servicesPoint in timeTypically paid at the beginning of each courseFixedDisaggregation of revenueThe Group derives revenue primarily from one-time commissions, recurring service fees and performance-based income paid by clients orinvestment product providers. The following tables show, by segment, revenue from contracts with customers disaggregated by service lines forthe years ended December 31, 2019, 2020 and 2021:Year Ended December 31, 2019(Amount in Thousands)Wealth ManagementAssets ManagementOther Business Business Business TotalRMBRMBRMBRMBOne-time commissions928,0613,607—931,668Recurring service fees 1,155,450 690,015 — 1,845,465Performance-based income 23,430 89,655 — 113,085Other service fees 222,912 4,274 295,772 522,958Lending services 91,164 — 285,473 376,637Other services(1) 131,748 4,274 10,299 146,321Total revenues 2,329,853 787,551 295,772 3,413,176Year Ended December 31, 2020(Amount in Thousands)Wealth ManagementAssets ManagementOther Business Business Business TotalRMBRMBRMBRMBOne-time commissions 766,24642,591—808,837Recurring service fees 1,284,447645,752—1,930,199Performance-based income 205,305184,220—389,525Other service fees 123,4587,45165,242196,151Lending services 13,530—65,24278,772Other services(1) 109,9287,451—117,379Total revenues 2,379,456880,01465,2423,324,712Table of ContentsF-22Year Ended December 31, 2021(Amount in Thousands)Wealth ManagementAssets ManagementOther Business Business Businesses TotalRMBRMBRMBRMBOne-time commissions 1,180,90090,516—1,271,416Recurring service fees 1,469,600639,409—2,109,009Performance-based income 469,121315,072—784,193Other service fees 92,3521,39068,240161,982Lending services 4,471—35,75540,226Other services(1) 87,8811,39032,485121,756Total revenues 3,211,9731,046,38768,2404,326,600(1)The Group also provides other services including education services, family trust and other services.For the Group’s revenues generated by the different geographic location, please see Note 18 segment information.One-time commissionsThe Group earns one-time commissions from fund raising services provided to clients or investment product providers. The Group entersinto one-time commission agreements with clients or investment product providers which specify the key terms and conditions of the arrangement.One-time commissions are separately negotiated for each transaction and generally do not include rights of return, credits or discounts, rebates, priceprotection or other similar privileges, and typically paid on or shortly after the transaction is completed. Upon establishment of an investment product,the Group earns one-time commission from clients or investment product providers, calculated as a percentage of the investment products purchasedby its clients. The Group defines the “establishment of an investment product” for its revenue recognition purpose as the time when both of thefollowing two criteria are met: (1) the investor referred by the Group has entered into a purchase or subscription contract with the relevant productprovider and, if required, the investor has transferred a deposit to an escrow account designated by the product provider and (2) the product providerhas issued a formal notice to confirm the establishment of an investment product. After the contract is established, there are no significant judgmentsmade when determining the one-time commission price. Therefore, one-time commissions is recorded at point in time when the investment product isestablished. For certain contracts that require a portion of the payment be deferred until the end of the investment products’ life or other specifiedcontingency, the Group evaluates each variable consideration and recognizes revenue only when the Group concludes that it is probable that changesin its estimate of such consideration will not result in significant reversals of revenue in subsequent periods.The Group earns one-time commissions from insurance companies by referring clients to purchase the insurance products from them, andrecognizes revenues when the underlying insurance contracts become effective. The Group is also entitled to subsequent renewal commissions undercertain contracts, and does not identify any additional performance obligation. The renewal commission is treated as variable consideration and theGroup estimates the consideration incorporating a constraint applied to renewal. Revenue related to the variable consideration is recorded when it isprobable that a significant reversal of revenue recognized will not occur.Recurring service feesThe Group also provides investment management services to investment funds and other vehicles in exchange for recurring service fees.Recurring service fees are determined based on the types of investment products the Group distributes and/or manages and are calculated as either (i)a percentage of the total capital commitments of investments made by the investors or (ii) as a percentage of the fair value of the total investment inthe investment products, calculated daily. These customer contracts require the Group to provide investment management services, which represents aperformance obligation that the Group satisfies over time. After the contract is established, there are no significant judgments made when determiningthe transaction price. As the Group provides these services throughout the contract term, for either method of calculating recurring service fees,revenue is calculated on a daily basis over the contract term. Recurring service agreements do not include rights of return, credits or discounts,rebates, price protection or other similar privileges. Payment of recurring service fees are normally on a regular basis (typically quarterly or annually)and are not subject to clawback once determined.Table of ContentsF-23Performance-based incomeIn a typical arrangement in which the Group serves as fund manager, and in some cases in which the Group serves as distributor, the Groupis entitled to a performance-based fee based on the extent by which the fund’s investment performance exceeds a certain threshold based on thecontract term. Such performance-based fees earned based on the performance of the underlying fund are a form of variable consideration in itscontracts with customers to provide investment management services. Those performance-based income is typically calculated and distributed whenthe cumulative return of the fund can be determined. Performance-based income will not be recognized as revenue until (a) it is probable that asignificant reversal in the amount of cumulative revenue recognized will not occur, or (b) the uncertainty associated with the variable consideration issubsequently resolved. At each reporting date, the Group updates its estimate of the transaction price and concludes that it cannot include its estimateof performance-based income in the transaction price because performance-based income has various possible consideration amounts and theexperience that the Group has with similar contracts is of little predictive value in determining the future performance of the funds, thus the Groupcannot conclude that it is probable that a significant reversal in the cumulative amount of revenue recognized would not occur.Other service feesThe Group mainly derived other service fees from lending services, investor education services and other services.Revenue from lending services represents interest income from loan origination services, and is recognized monthly in accordance with theircontractual terms and recorded as part of other service fees in the consolidated statement of operations. The Group does not charge prepaymentpenalties from its customers.The Group also provides investor education services, offering various types of training programs to HNW individuals and their families.Such programs normally last several days. The service fees charged to the attendees are not refundable. The revenues are recognized at point in timewhen the service is completed considering the programs normally last only for a few days.Transaction price allocationFor certain contracts that the Group provides both fund raising and investment management services involving two separate performanceobligations which belong to two major streams (i.e., one time and recurring services), the Group allocates transaction price between these twoperformance obligations at the relative stand-alone selling price (“SSP”). Judgment is required to determine the SSP for each distinct performanceobligation. As the service fee rate for each service contained in the contract is typically negotiated separately, the Group determines that those feerates are generally consistent with SSP, and can be deemed as the transaction price allocated to each performance obligation.Accounts receivableTiming of revenue recognition may differ from the timing of invoicing to customers. Amounts due from related parties (receivables fromfunds that Gopher manages) and accounts receivable represent amounts invoiced or the Group has the right to invoice, and revenue recognized priorto invoicing when the Group has satisfied its performance obligations and has the unconditional right to consideration. As the Group is entitled tounconditional right to consideration in exchange for services transferred to customers, the Group therefore does not recognize any contract asset. Thebalances of accounts receivable as of December 31, 2020 and 2021 were substantially within one year.Contract liabilityContract liability (deferred revenue) relates to unsatisfied performance obligations at the end of each reporting period which consists of cashpayment received in advance for recurring service fees and/or from customers of investment management services. The prepayment was normallypaid on a quarterly basis and the majority of the performance obligations are satisfied within one year. The amount of revenue recognized in 2019,2020 and 2021 that was included in deferred revenue balance at the beginning of the year was RMB133.5 million, RMB91.7 million and RMB67.8million, respectively.Table of ContentsF-24Practical expedientsThe Group has used the following practical expedients as allowed under ASC 606:The Group expenses sales commissions as incurred when the amortization period is one year or less. Sales commission expenses arerecorded within “Relationship manager compensation” in the consolidated statements of operations.The Group assessed and concluded that there is no significant financing component given that the period between performance and paymentis generally one year or less.The Group has also applied the practical expedient for certain revenue streams to not disclose the value of remaining performanceobligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which the Group recognizes revenue in proportion tothe amount the Group has the right to invoice for services performed.(n) VAT Related SurchargesThe Group is subject to Value-added Tax (“VAT”) and its related education surtax, urban maintenance and construction tax, on the servicesprovided in the PRC. VAT and related surcharges are primarily levied based on revenues concurrent with a specific revenue-producing transaction.Starting from April 1, 2019, the applicable VAT rates include 3%, 6%, 9% and 13%. The applicable VAT rate for the Group’s PRC entities is mainly6%. The Group records such VAT related surcharges on a net basis as a reduction of revenues.(o) Compensation and benefitsCompensation and benefits mainly include salaries and commissions for relationship managers, share-based compensation expenses, bonusrelated to performance based income, salaries and bonuses for middle office and back office employees and social welfare benefits.(p) Income TaxesCurrent income taxes are provided for in accordance with the relevant statutory tax laws and regulations.The Group accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilitiesfor the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets andliabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax ratesin effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities isrecognized in income in the period that includes the enactment date.The Group recognizes net deferred tax assets to the extent that it believes these assets are more likely than not to be realized. In making sucha determination, it considers all available positive and negative evidence, including future reversals of existing taxable temporary differences,projected future taxable income, tax-planning strategies, and results of recent operations. If the Group determines that its deferred tax assets arerealizable in the future in excess of their net recorded amount, the Group would make an adjustment to the deferred tax asset valuation allowance,which would reduce the provision for income taxes.(q) Share-Based CompensationThe Group recognizes share-based compensation based on the fair value of equity awards on the date of the grant, with compensationexpense recognized using a straight-line vesting method over the requisite service periods of the awards, which is generally the vesting period. TheGroup estimates the fair value of share options granted using the Black-Scholes option pricing model. The fair value of non-vested restricted shares iscomputed based on the fair value of the Group’s ordinary shares on grant date. The expected term represents the period that share-based awards areexpected to be outstanding, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of futureemployee exercise behavior. The computation of expected volatility is based on the fluctuation of the historical share price. Amortization of share-based compensation is presented in the consolidated statements of operations as compensation and benefits.Table of ContentsF-25(r) Government SubsidiesGovernment subsidies include cash subsidies received by the Group’s entities in the PRC from local governments as incentives for investingin certain local districts, and are typically granted based on the amount of investment made by the Group in form of registered capital or taxableincome generated by the Group in these local districts. Such subsidies allow the Group full discretion in utilizing the funds and are used by the Groupfor general corporate purposes. The local governments have final discretion as to whether the Group has met all criteria to be entitled to the subsidies.The Group does not in all instances receive written confirmation from local governments indicating the approval of the cash subsidy before cash isreceived. Cash subsidies received were RMB89,278, RMB113,356 and RMB115,939 for the years ended December 31, 2019, 2020 and 2021,respectively. Cash subsidies are recognized when received and when all the conditions for their receipt have been satisfied.(s) Net Income (Loss) per ShareBasic net income (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted averagenumber of common shares outstanding during the reporting period. Diluted net income per share reflects the potential dilution that could occur ifsecurities or other contracts to issue ordinary shares were exercised or converted into ordinary shares, which consist of the ordinary shares issuableupon the conversion of the convertible notes and ordinary shares issuable upon the exercise of stock options and vest of non-vested restricted shares.Common share equivalents are excluded from the computation of the diluted net income per share in years when their effect would be anti-dilutive.(t) LeasesThe Group as a lesseeIn the first quarter of 2019, the Group adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which supersedes thelease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and correspondingright-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flowsarising from leasing arrangements. The Group adopted the new guidance using the modified retrospective transition approach by applying the newstandard to all leases existing at the date of initial application and not restating comparative periods. The Group also elected the package of practicalexpedients, which among other things, does not require reassessment of lease classification.The Group has operating leases primarily for office space. The determination of whether an arrangement is a lease or contains a lease ismade at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Group obtains substantially allof the economic benefits from and has the ability to direct the use of the asset. Operating leases are included in operating lease right-of-use assets andoperating lease liabilities on the consolidated balance sheet and operating lease liabilities - short-term are recorded within other current liabilities.Operating lease assets represent the Group’s right to use an underlying asset for the lease term and lease liabilities represent the Group’s obligation tomake lease payments arising from the lease. The Group uses its estimated incremental borrowing rates as of the commencement date in determiningthe present value of lease payments. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of leasepayments over the lease term at the lease commencement date. To determine the incremental borrowing rate used to calculate the present value offuture lease payments, the Group uses information including the Group’s credit rating, interest rates of similar debt instruments of entities withcomparable credit ratings, as applicable. Variable components of the lease payments such as utilities, maintenance costs are expensed as incurred andnot included in determining the present value. The lease terms include options to extend or terminate the lease when it is reasonably certain that theGroup will exercise that option. The Group considers these options, which may be elected at the Group’s sole discretion, in determining the lease termon a lease-by-lease basis. Lease expense is recognized on a straight-line basis over the lease term.(u) Foreign Currency TranslationThe Company’s reporting currency is Renminbi (“RMB”). The Company’s functional currency is the United States dollar (“U.S. dollar orUS$”). The Company’s operations are principally conducted through the subsidiaries and VIEs located in the PRC where RMB is the functionalcurrency. For those subsidiaries and VIEs which are not located in the PRC and have the functional currency other than RMB, the financial statementsare translated from their respective functional currencies into RMB.Table of ContentsF-26Assets and liabilities of the Group’s overseas entities denominated in currencies other than the RMB are translated into RMB at the rates ofexchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses aretranslated using the average rate for the year. Translation adjustments are reported as foreign currency translation adjustment and are shown as aseparate component of other comprehensive income (loss) in the consolidated statements of comprehensive income (loss).Translations of amounts from RMB into US$ are included solely for the convenience of the readers and have been made at the rate of US$1= RMB6.3726 on December 30, 2021, representing the certificated exchange rate published by the Federal Reserve Board. No representation isintended to imply that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate.(v) Comprehensive Income (Loss)Comprehensive income (loss) includes all changes in equity except those resulting from investments by owners and distributions to owners.For the years presented, total comprehensive income (loss) included net income (loss), foreign currency translation adjustments, change in fair valueof available-for-sale investments.(w) Loan receivables, netLoan receivables represent loans offered to the clients in the lending business. Loan receivables are initially recognized at fair value which isthe cash disbursed to originate loans, measured subsequently at amortized cost using the effective interest method, net of allowance that reflects theGroup’s best estimate of the amounts that will not be collected. The Group also transfers some of the loan receivables to unrelated third parties. TheGroup accounts for the transfer of loan receivables in accordance with ASC 860, Transfers and Servicing. As the loans are sold at par value, no gainor loss is recorded as a result. The Group’s continuing involvement subsequent to the transfer is limited to the services performed as a collection agentto collect and disburse cash flows received from the underlying receivables to the individual investors, and does not provide guarantee on the return ofthe receivables. The Group has no retained interests, servicing assets, or servicing liabilities related to the loans sold.(x) Allowance for credit lossesOn January 1, 2020, the Group adopted Accounting Standards Update No. 2016-13, Financial Instruments-Credit Losses (Topic 326):Measurement of Credit Losses on Financial Instruments, using the modified retrospective transition method. Upon adoption, the Group changed itsimpairment model to utilize a current expected credit losses model in place of the incurred loss methodology for financial instruments measured atamortized cost, including loans receivables, amount due from related parties, accounts receivable and other receivable, and held-to-maturities debtinvestments (see Note 2(i)). CECL estimates on those financial instruments are recorded as allowance for credit losses on the Group’s consolidatedstatements of operations. The cumulative effect adjustment from adoption was immaterial to the Group’s consolidated financial statements. TheGroup continues to monitor the financial implications of the COVID-19 pandemic and regulatory change of certain industries on expected creditlosses.Allowance for loan losses. In 2020, the Group calculated the allowance for CECL on loan receivables by using a loss-rate approach wherebythe loss-rate was determined based on the expectation of future economic conditions, the nature and volume of the loan portfolio and historicalcollection experience. Given the changes in business environment and prevailing economic conditions in 2021, the Group further refined itsestimation by employing statistical models. The expected loss is computed for each loan on an individual basis considering its own riskcharacteristics. For loans secured by investment products issued by the Group, the expected loss is estimated using a probability of default and lossgiven assumption derived from a statistical model which incorporates the estimated value of collaterals, term of the loan and historical lossinformation. For loans secured by real estate properties, the expected loss is derived using discounted cash flow methodology. The projection of cashflows is determined by a combination of factors including the value of collaterals, historical collection experience, industry recovery rates of loanswith similar risk characteristics and other available relevant information about the collectability of cash flows.The Group estimates the allowance for loan losses on a quarterly basis and qualitatively adjusts model results, if needed, for risk factors thatare not considered within the models, which are relevant in assessing the expected credit losses within the loan balances. Charge-offs of principalamounts, net of recoveries are deducted from the allowance. The changes of allowances for loan losses are detailed in Note 10.Table of ContentsF-27Allowance for accounts receivable and other financial assets. The Group has identified the relevant risk characteristics of accountsreceivable and amounts due from related parties which include size, type of the services or the products the Group provides, or a combination of thesecharacteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit lossexperience, current economic conditions, supportable forecasts of future economic conditions, and any recoveries in assessing the lifetime expectedcredit losses. Other key factors that influence the expected credit loss analysis include types of investment products that the Group distributes, theNAV of underlying funds and payment terms offered in the normal course of business to customers, and industry-specific factors that could impact theGroup’s receivables. Additionally, external data and macroeconomic factors are also considered. When specific customers are identified as no longersharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. This is assessed at each quarter based onthe Group’s specific facts and circumstances. Accounts are written off against the allowance when it becomes evident that collection will not occur.The Group evaluates CECL on other forms of financial assets, including other current assets and other non-current assets with the similarapproach of accounts receivable.The following table summarizes the changes of allowances for each category of affected assets:(Amounts in thousands)Amounts dueAccountsLoan receivablesOther financialfrom related partiesreceivablefrom factoring businessreceivablesRMBRMBRMBRMBBalance at beginning of 2019 — — — —Provisions 14,602 11,858 82,000 16,912Write off (14,602) (11,858) (82,000) (16,912)Balance at end of 2019 — — — —Provisions4,00629——Write off—(29)——Balance at end of 20204,006———Provisions26,122458—4,000Write off————Balance at end of 202130,128458—4,000During the year ended December 31, 2021, accounts receivables of RMB10.8 million written off previously were recovered and recorded ascredits to provision for credit losses.During the year ended December 31, 2019, the Group made a full impairment provision of RMB82 million for loan receivables fromfactoring business and RMB12.8 million for amount due from related parties due to the Camsing Incident (as defined in Note 15).(y) Financial Instruments Indexed to and Potentially Settled in the Company’s StockThe Group evaluates all financial instruments issued in connection with its equity offerings when determining the proper accountingtreatment for such instruments. The Group considers a number of generally accepted accounting principles under U.S. GAAP to determine suchtreatment and evaluates the features of the instrument to determine the appropriate accounting treatment. For equity-linked financial instrumentsindexed to and potentially settled in the Company’s common stock that are determined to be classified as equity on the consolidated balance sheets,they are initially measured at their fair value and recognized as part of equity. The Group issued such financial instruments for settlement (see Note15).(z) Treasury StockThe Group records common shares repurchased as treasury stock, at cost, resulting in a reduction of shareholder’s equity. At the date ofsubsequent retirement or reissuance, the treasury stock account is reduced by the cost of such stock on a weighted average cost basis.Table of ContentsF-28(aa) ContingenciesOn an ongoing basis, the Group assesses the potential liabilities related to any lawsuits or claims brought against it. While it is typically verydifficult to determine the timing and ultimate outcome of these actions, the Group uses best estimate to determine if it is probable that the Group willincur an expense related to the settlement or final adjudication of these matters and whether a reasonable estimation of the probable loss, if any, can bemade. The Group accrue a liability when a loss is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertaintiesrelated to the eventual outcome of litigation and potential recovery, it is possible that disputed matters may be resolved for amounts materiallydifferent from any provisions or disclosures that the Group has previously made. See Note 20, “Contingencies,” for further information.(ab) Accounting Standards Issued But Not Yet ImplementedIn August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives andHedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,which simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments.This guidance also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use of theif-converted method. The Group has adopted this guidance since January 1, 2022 and the adoption does not have a material impact on its consolidatedfinancial statements.In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832)—Disclosures by Business Entities aboutGovernment Assistance. The amendments in this ASU require disclosures about transactions with a government that have been accounted for byanalogizing to a grant or contribution accounting model to increase transparency about (1) the types of transactions, (2) the accounting for thetransactions, and (3) the effect of the transactions on an entity’s financial statements. The amendments in this ASU are effective for all entities withintheir scope for financial statements issued for annual periods beginning after December 15, 2021. The Group has adopted this guidance since January1, 2022 and the adoption does not have a material impact on its consolidated financial statements.3. Net Income (Loss) per ShareThe following table sets forth the computation of basic and diluted net income (loss) per share attributable to ordinary shareholders:Years Ended December 31, (Amount in Thousands, Except Share and Per Share Data) 2019 2020 2021Class A and Class BClass A and Class BClass A and Class BNet income (loss) attributable to Class A and Class B ordinary shareholders—basic 829,151 (745,225) 1,314,131Plus: interest expense for convertible notes 679 — —Net income (loss) attributable to Class A and Class B ordinary shareholders—diluted 829,830 (745,225) 1,314,131Weighted average number of Class A and Class B ordinary shares outstanding—basic 30,580,181 31,020,439 33,585,818Plus: share options and non-vested restricted shares 281,191 — 195,955Plus: shares outstanding for convertible notes 62,723 — —Weighted average number of Class A and Class B ordinary shares outstanding—diluted 30,924,095 31,020,439 33,781,773Basic net income (loss) per share 27.12 (24.02) 39.12Diluted net income (loss) per share 26.84 (24.02) 38.90In January 2016, the Company’s shareholders voted in favor of a proposal to adopt a dual-class share structure, pursuant to which authorizedshare capital was reclassified and re-designated into Class A ordinary shares and Class B ordinary shares, with each Class A ordinary share beingentitled to one vote and each Class B ordinary share being entitled to four votes on all matters that are subject to shareholder vote. As economic rightsand obligations are applied equally to both Class A and Class B ordinary shares, earnings are allocated between the two classes of ordinary sharesevenly with the same allocation on a per share basis.Table of ContentsF-29Shares issuable to the investors of Camsing Incident (as defined in Note 15) are included in the computation of basic earnings per share asthe shares will be issued for no cash consideration and all necessary conditions have been satisfied upon the settlement.Diluted net income (loss) per share does not include the following instruments as their inclusion would be antidilutive:Years Ended December 31, 2019 2020 2021Share options 72,929224,528 281,566Non-vested restricted shares under share incentive plan 91,550103,373 41,255Total 164,479327,901 322,8214. InvestmentsThe following table summarizes the Group’s investment balances:As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Short-term investments Held-to-maturity investments 114,928 29,288 4,596Available-for-sale investments — 13,8052,166Trading debt securities — 14,8042,323Equity securities measured at fair value — 7,9251,244Investments held by consolidated investment funds measured at fair value—26,9814,234Total short-term investments 114,928 92,80314,563Long-term investments Available-for-sale investments 14,135 — —Investments held by consolidated investment funds measured at fair value 74,498 80,32712,605- Other long-term investments - Investments measured at fair value 285,045 376,95759,153- Investments measured at cost less impairment - Private equity funds products 100,295 96,30215,112- Other investments measured at cost less impairment 62,411 114,98618,044Total other long-term investments 447,751 588,24592,309Total long-term investments 536,384 668,572104,914Total investments 651,312 761,375119,477Held-to-maturity investments consist of investments managed by the Group that have stated maturity and normally pay a prospective fixed orfloating rate of return, carried at amortized cost. The Group recorded investment income on these products of RMB5,711, RMB10,311 andRMB1,568 for the years ended December 31, 2019, 2020 and 2021, respectively. The gross unrecognized holding gain was RMB5,087 and RMB612as of December 31, 2020 and 2021, respectivley. Due to the credit deterioration of certain held-to-maturity investments, an other-than-temporaryimpairment loss of RMB104,365 was recognized and recorded in investment income (loss) for the year ended December 31, 2019. No credit lossrelated to held-to-maturity investments was recognized for the years ended December 31, 2020 and 2021.Available-for-sale investments consist of investments managed by the Group that have stated maturity and normally pay a prospective fixedrate of return, carried at fair value. All of available-for-sale investments as of December 31, 2021 of RMB13,805 will mature in 2022. Changes in fairvalue of the available-for-sale investments, net of tax, for the years ended December 31, 2019, 2020 and 2021 was RMB4,306, RMB(4) andRMB243, respectively, recorded in the other comprehensive income (loss), of which RMB5,103, RMB(775) and RMB243 was realized andreclassified from other comprehensive income (loss) to investment income (loss) in the consolidated statements of operations for the years endedDecember 31, 2019, 2020 and 2021. The amortized cost of the available-for-sale investments as of December 31, 2020 and 2021 was RMB14,135 andRMB13,805, respectively. No other-than-temporary impairment for available-for-sale investments was recognized for the year ended December 31,2019, and no credit loss was recognized for the years ended December 31, 2020 and 2021.Table of ContentsF-30The consolidated investment funds are, for GAAP purposes, investment companies and reflect their investments at fair value. The Group hasretained this specialized accounting for the consolidated funds in consolidation. Accordingly, the unrealized gains and losses resulting from changesin fair value of the investments held by the consolidated investment funds are recorded in the consolidated statements of operations as investmentincome.Other long-term investments consist of investments in several private equity funds as a limited partner with insignificant equity interest andequity investments of common shares of several companies with less than 20% interest. The Group elects to measure these investments at fair valueor at cost, less impairment. The Group recognized impairment loss related to investments measured at cost, less impairment, of nil, RMB115,100 andRMB10,000 in investment income (loss) for the years ended December 31, 2019, 2020 and 2021, respectively. The impairment in 2020 was due to thedeteriorating operation of a single investment and measured as the difference between the investment’s carrying amount and fair value estimatedbased on a quotation offered from an unrelated third party accepted by the Group. In 2021, the negotiation was suspended due to the continueddeterioration of underlying investment, and the Group impaired the investment to nil with an impairment loss of RMB10,000 for the year endedDecember 31, 2021.5. Fair Value MeasurementAs of December 31, 2020 and 2021, information about (i) inputs into the fair value measurements of the Group’s assets and liabilities that aremeasured at fair value on a recurring basis in periods subsequent to their initial recognition and (ii) investments measured at NAV or its equivalent asa practical expedient is as follows: Fair Value Measurements at Reporting Date Using(Amount in Thousands)Quoted Prices As ofin ActiveSignificantDecember 31, Markets forOtherSignificant2020IdenticalObservableUnobservable(Amounts inAssetsInputsInputsNAVDescriptionthousands)(Level 1)(Level 2)(Level 3)RMBRMBRMBRMBRMBLong-term investments Available-for-sale investments 14,135 — 14,135 ——Investments held by consolidated investment fund 74,498 — 74,498 ——Other long-term investments measured at fair value 285,045 6,196 40,141 216,22122,487Fair Value Measurements at Reporting Date Using(Amount in Thousands) Quoted Prices As ofin ActiveSignificantDecember 31, Markets forOtherSignificant2021IdenticalObservableUnobservable(Amounts inAssetsInputsInputsNAVDescriptionthousands)(Level 1)(Level 2)(Level 3)RMBRMBRMBRMBRMBShort-term investments Available-for-sale investments13,805—13,805——Trading debt securities14,80414,804———Equity securities measured at fair value7,9257,925———Investments held by consolidated investment fund 26,981—26,981——Long-term investments Investments held by consolidated investment fund 80,327—80,327——Other long-term investments measured at fair value 376,9573,766127,678217,26928,244Short-term trading debt securities investments are classified as Level 1 because they are valued using quoted prices of the same securities asthey consist of bonds issued by public companies and publicly traded. Short-term equity securities measured at fair value are valued based on thequoted stock price of its investees in the active market and are classified within Level 1.Table of ContentsF-31The fair value of available-for-sale investments is measured using discounted cash flow model based on contractual cash flow and a discountrate of prevailing market yield for products with similar terms as of the measurement date, as such, it is classified within Level 2 measurement.As of December 31, 2020, the Group has several consolidated investment funds whose underlying investments are either bonds or assetmanagement plans. The bonds have stated maturity and normally pay a prospective fixed rate of return and using discounted cash flow model basedon contractual cash flow and a discount rate of prevailing market yield for products with similar terms as of the measurement date, as such, it isclassified within Level 2 measurement. The asset management plans measured at recent observable transaction prices are classified within Level 2 aswell.Other long-term investments measured at fair value are (i) equity investments in listed companies whose fair value can be obtained throughactive markets which is classified within Level 1 measurement, (ii) private equity funds categorized within Level 2 or Level 3 of the fair valuehierarchy, and (iii) private equity funds measured at NAV.With respect to the private equity funds within Level 3 measurement, the Group generally uses a market comparable analysis. The valuationmethodology requires a subjective process in determining significant inputs and making assumptions and judgments, for which the Group considersand evaluates including, but not limited to, (1) comparable data wherever possible to quantify or adjust the fair value, (2) quantitative informationabout significant unobservable inputs used by the third party and (3) prevailing market conditions.A reconciliation of the beginning and ending balances of the investments measured at fair value using significant unobservable inputs (Level3) for the year ended December 31, 2021, presented as follows: RMB(Amount in Thousands)Level 3 investments as of January 1, 2021 216,221Changes in fair value included in investment income (loss) 1,828Foreign currency translation adjustments (780)Level 3 investments as of December 31, 2021217,269Changes in net unrealized gains included in investment income (loss) related to Level 3 investments still held as ofDecember 31, 20214,593Total realized and unrealized gains and losses recorded for Level 3 investments are reported in investment income (loss) in the consolidatedstatements of operations.Fair value measurement on a non-recurring basis for the year ended December 31, 2021 included that used in impairment of investmentsmeasured at cost less impairment (see Note 4) which was classified as a Level 3 fair value measurement.Fair value measurement on a non-recurring basis for the year ended December 31, 2020 included that used in impairment of investmentsmeasured at cost less impairment (see Note 4) which was classified as a Level 3 fair value measurement and the impairment of investments inaffiliates (see Note 6) which were classified as Level 2 or Level 3 fair value measurement.The Group also has financial instruments that are not reported at fair value on the consolidated balance sheets but whose fair value ispracticable to estimate, which include cash and cash equivalents, restricted cash, accounts receivable, amounts due from related parties, short-termheld-to-maturity investments, loan receivables, other receivables and payables. The carrying amount of these short-term financial instrumentsapproximates their fair value due to the short-term nature.Table of ContentsF-326. Investments in AffiliatesThe following table summarizes the Group’s balances of investments in affiliates:As of December 31, (Amount in Thousands)202020212021 RMB RMB US$Kunshan Jingzhao 8,797 8,4801,331Wanjia Win-Win 96,629 93,22314,629Others 5,967 10,7801,692Funds that the Group serves as general partner 1,153,292 1,289,600202,365-Gopher Transform Private Fund 108,582 108,38517,008-Real estate funds and real estate funds of funds 43,686 36,0335,654-Private equity funds of funds 988,069 1,133,336177,845-Others 12,955 11,8461,858Total investments in affiliates 1,264,685 1,402,083220,017In May 2011, the Group injected RMB4.0 million into Kunshan Jingzhao Equity Investment Management Co., Ltd (“Kunshan Jingzhao”), anewly setup joint venture, for 40% of the equity interest. Kunshan Jingzhao principally engages in real estate fund management business.In February 2013, Gopher Asset Management injected RMB21.0 million into Wanjia Win-Win Assets Management Co., Ltd (“Wanjia Win-Win”), a newly setup joint venture, for 35% of the equity interest. Wanjia Win-Win principally engages in wealth management plan managementbusiness. In December 2017, the share owned by the Group had been diluted to 28%.In the fourth quarter of 2016, the Group injected RMB150 million into Gopher Transformation Private Fund, which accounted for 48% oftotal actual distribution volume. The fund principally invested in a limited partnership to invest one real-estate company. Although managed byGopher, the fund are not consolidated by the Group based on the fact that substantive kick-out rights exist which are exercisable by a simple-majorityof non-related limited partners of the fund to dissolve (liquidate) the fund or remove the Group as the general partner of the fund without cause. In theyear 2017, due to capital subscription by limited partners, the equity interest owned by the Group had been diluted to 35%. For the year endedDecember 31, 2020, the Group accepted quotation of Gopher Transformation Private Fund from an independent third party and recognized animpairment loss of RMB28,156 based on the difference between the carrying amount and the quotation. In 2021, based on the aforementioned offerand current business plan, the Group did not recognize any further impairment loss for this fund in 2021.The Group invested in private equity funds of funds, real estate funds and real estate funds of funds, and other public securities funds offunds that Gopher serves as general partner or fund manager. The Group held less than 10% equity interests in these funds as a general partner. TheGroup accounts for these investments using the equity method of accounting due to the fact that the Group can exercise significant influence on theseinvestees in the capacity of general partner or fund manager.The Group recognized impairment losses totaling nil, RMB38,214 and nil related to investments in affiliates for the years ended December31, 2019, 2020 and 2021, respectively, which are recorded in income from equity in affiliates in the consolidated statements of operations. For theyear ended December 31, 2020, in addition to the impairment loss recognized for Gopher Transformation Private Fund, the Group (i) fully impairedan affiliate company, which principally conducted overseas education business, with amount of RMB1,831, due to continued operating loss as well asthe impact of COVID-19, and (ii) recognized an impairment loss of RMB8,227 for a private equity fund of fund due to the deteriorating operation ofcertain underlying portfolio of this fund caused by COVID-19.Table of ContentsF-33Summarized financial informationThe following table shows summarized financial information relating to the balance sheets for the Group’s equity method investmentsassuming 100% ownership as of December 31, 2020 and 2021:As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Balance sheet data: Current assets 3,586,516 5,356,698840,583Non-current assets 33,138,315 32,633,5985,120,924Current liabilities 1,439,746 1,788,077280,588Non-current liabilities—376,54459,088The following table shows summarized financial information relating to the statements of operations for the Group’s equity methodinvestments assuming 100% ownership for the years ended December 31, 2019, 2020 and 2021:Years Ended December 31, (Amount in Thousands) 2019 2020 2021 2021RMBRMBRMBUS$Operating data: Revenue 2,177,056 670,878 225,55935,395Income (loss) from operations 470,278 72,683 (554,579)(87,025)Net realized and unrealized gains from investments 632,934 3,582,239 5,107,283 801,444Net income 1,109,261 3,654,922 4,505,646707,0347. Property and Equipment, NetProperty and equipment, net consists of the following:As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Buildings 55,154 2,478,741388,969Leasehold improvements171,621176,44227,687Furniture, fixtures and equipment 123,779 136,62421,439Motor vehicles 103,342 46,3267,270Software 145,375 171,07926,846 599,271 3,009,212472,211Accumulated depreciation (371,696) (444,876)(69,811) 227,575 2,564,336402,400Construction in progress 21,094 16,5992,605Property and equipment, net 248,669 2,580,935405,005Depreciation expense was RMB105,432, RMB98,452 and RMB146,567 for the years ended December 31, 2019, 2020 and 2021,respectively.On May 9, 2021, the Group purchased new office premises by acquiring 100% of equity interests of an unrelated third party (renamed asShanghai Nuohong Real Estate Co., Ltd. (“Nuohong”) after the acquisition), with a gross floor area of approximately 72,000 square meters inShanghai Hongqiao Central Business District for a total cash consideration of approximately RMB2.2 billion, which is accounted for as assetacquisition, and recorded as part of property and equipment, net in the Group’s consolidated balance sheet. All cash has been paid in 2021. Due to thedifference between tax bases and cost bases of buildings acquired, a deferred tax liability of RMB196.2 million was recorded at acquisition date andamortized through the remaining useful live of the buildings.Table of ContentsF-348. Other Current LiabilitiesComponents of other current liabilities are as follows:As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Accrued expenses142,315265,21241,617Advance from customers32,48326,4354,148Deposits from other business5,9556,6341,041Payable to individual investors of other business24,06210,8311,700Payable for purchases of property and equipment1,66244,8757,042Other tax payable68,55771,93911,289Operating lease liability - current86,47291,28814,325Payable to individual for trust service29426,9284,226Payables to suppliers53,62771,59011,234Other payables17,22333,5235,260Total 432,650649,255101,882Accrued expenses mainly consist of payables for marketing expenses and professional service fees.Payable to individual investors of other businesses consists of interests and principal payable to individual investors who purchased otherinvestment products distributed by the Group.9. Income TaxesCayman IslandsUnder the current laws of the Cayman Islands, the Company is not subject to tax on its income or capital gains. In addition, the CaymanIslands do not impose withholding tax on dividend payments.Hong KongUnder the current Hong Kong Inland Revenue Ordinance, the first HK$2 million of profits earned by the Company’s subsidiariesincorporated in Hong Kong will be taxed at half the current tax rate (i.e. 8.25%) while the remaining profits will continue to be taxed at the existing16.5% tax rate. The profits of group entities incorporated in Hong Kong not qualifying for the two-tiered profits tax rates regime will continue to betaxed at a flat rate of 16.5%. In addition, payments of dividends from Hong Kong subsidiaries to their shareholders are not subject to any Hong Kongwithholding tax.PRCUnder the Law of the People’s Republic of China on Enterprise Income Tax (“EIT Law”), domestically-owned enterprises and foreign-invested enterprises (“FIE”) are subject to a uniform tax rate of 25%. Zigong Noah Financial Service Co., Ltd. falls within the encouraged industriescatalogue in Western China, which is eligible for preferential income tax rate of 15%. Ark (Shanghai) Network Technology Co., Ltd. obtained theapproval for preferential income tax rate of 15% due to High and New Technology Enterprise in November 2020 and such preferential income taxrate will expire in 2023.Table of ContentsF-35Income (loss) before income taxes consists of:Years Ended December 31, (Amount in Thousands) 2019 2020 2021 2021RMBRMBRMBUS$Mainland China 400,776 846,584 686,188 107,677Hong Kong 379,896 345,758 584,236 91,679Cayman Islands100,232(1,811,849)(66,140)(10,379)Others87,07134,18893,75814,714Total 967,975 (585,319) 1,298,042 203,691The tax expense (benefit) comprises: Years Ended December 31, (Amount in Thousands) 2019 2020 2021 2021RMBRMBRMBUS$Current Tax282,422324,620413,60364,904Deferred Tax(62,397)(66,160)(119,663)(18,778)Total220,025258,460293,94046,126Reconciliation between the statutory tax rate to income (loss) before income taxes and the actual provision for income taxes is as follows: Years Ended December 31, 2019 2020 2021 PRC income tax rate25.00% 25.00% 25.00%Expenses not deductible for tax purposes0.04% (0.33)% 0.18%Effect of non-deductible settlement expenses—(78.12)%0.40%Effect of tax-free investment income(1.37)%1.47%(0.57)%Effect of different tax rate of subsidiary in other jurisdiction(5.13)% 6.44% (4.85)%Effect of deferred tax asset allowance5.85% (4.13)% 1.56%Effect of tax holidays(2.60)% 2.01% (1.27)%Effect of income from equity in fund of fund1.27% 0.16% 2.91%Effect of true-ups(0.47)% 3.28% (0.82)%Effect of others0.14% 0.06% 0.10%22.73% (44.16)% 22.64%The aggregate amount and per share effect of the tax holidays (including effect of timing difference reversed in the year with different rate)are as follows: Years Ended December 31, (Amount in Thousands Except Shares Data) 2019 2020 2021 2021RMBRMBRMBUS$Aggregate25,14611,75316,4222,577Per share effect-basic0.820.380.490.08Per share effect-diluted0.810.380.490.08Table of ContentsF-36The principal components of the deferred income tax asset and liabilities are as follows: As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Deferred tax assets: Accrued expenses2,04026,2714,122Tax loss carry forward222,615489,17976,763Unrealized other loss5,1504,895768Provision for impairment of investments39,38939,3006,167Provision for allowance of credit losses15,41245,7507,179Others2622,323365Gross deferred tax assets284,868607,71895,364Valuation allowance(60,628)(271,813)(42,653)Net deferred tax assets224,240335,90552,711Deferred tax liabilities:Unrealized investment income45,88142,2766,634Acquired deferred tax liabilities (Note 7)—191,85830,107Net deferred tax liabilities (after offsetting)45,881234,13436,741Deferred tax assets and liabilities have been offset where the Group has a legally enforceable right to do so, and intends to settle on a netbasis.The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more likelythan not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability,the duration of statutory carry forward periods, the Group’s experience with tax attributes expiring unused and tax planning alternatives. Theseassumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using tomanage the underlying businesses. Valuation allowances are established for deferred tax assets based on a more likely than not threshold. The Group’sability to realize deferred tax assets depends on its ability to generate sufficient taxable income within the carry forward periods provided for in thetax law. The amount of the deferred tax asset considered realizable, however, could be reduced in the near term if estimates of future taxable incomeduring the carry-forward period are reduced. As of December 31, 2021, operating loss carry forward amounted to RMB2,019,141 for the PRC andHong Kong income tax purpose. According to the Article 18 of PRC Tax Law, the enterprise can carry over the losses to the succeeding fivetax years, tax loss carry forward that the Group recognized for PRC subsidiaries and VIEs will begin to expire from 2022 to 2027.A valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred taxassets will not be utilized in the future. The movements of valuation allowance of deferred tax assets are as follows:For the year ended December 31, 201920202021 RMB RMB RMB(Amount in Thousands)Balance at beginning of the year 15,651 56,653 60,628Provided 56,653 24,196 20,275Addition due to acquisition——193,826Write off (15,651) (20,221) (2,916)Balance at end of the year 56,653 60,628 271,813Refer to Note 7, the acquisition of Nuohong resulted in an increase of RMB193,826 in both deferred tax assets of tax loss carry forward andrelated valuation allowance as the Group estimated that accumulated loss of Nuohong can’t be realized in the future based on its intent to use.Table of ContentsF-37In accordance with the EIT Law, dividends, which arise from profits of FIEs earned after January 1, 2008, are subject to a 10% withholdingincome tax. In addition, under tax treaty between the PRC and Hong Kong, if the foreign investor is incorporated in Hong Kong and qualifies as thebeneficial owner, the applicable withholding tax rate is reduced to 5%, if the investor holds at least 25% in the FIE, or 10%, if the investor holds lessthan 25% in the FIE. A deferred tax liability should be recognized for the undistributed profits of PRC companies unless the Group has sufficientevidence to demonstrate that the undistributed dividends will be reinvested and the remittance of the dividends will be postponed indefinitely. Theaccumulated undistributed earnings of the Group’s PRC subsidiaries were RMB4.6 billion as of December 31, 2021. The Group intends toindefinitely reinvest the remaining undistributed earnings of the Group’s PRC subsidiaries, and therefore, no provision for PRC dividend withholdingtax was accrued. Aggregate undistributed earnings of the Group’s VIE companies located in the PRC that are available for distribution to the Groupwere approximately RMB2.4 billion as of December 31, 2021. A deferred tax liability should be recorded for taxable temporary differencesattributable to the excess of financial reporting amounts over tax basis amount in domestic subsidiaries. However, recognition is not required insituations where the tax law provides a means by which the reported amount of that investment can be recovered tax-free and the enterprise expectsthat it will ultimately use that means. The Group has not recorded any such deferred tax liability attributable to the undistributed earnings of itsfinancial interest in VIEs because it believes such excess earnings can be distributed in a manner that would not be subject to income tax.The Group did not record any uncertain tax positions during the years ended December 31, 2019, 2020 and 2021. The Group does notanticipate any significant increases or decreases to its liability for unrecognized tax benefits within the next 12 months.10. Loans Receivable, NetLoans receivable as of December 31, 2020 and 2021 consist of the following:As of December 31, (Amount in Thousands) 2020 2021 2021 RMB RMB US$Loans receivable: -Within credit term261,434536,75884,229-Past due163,376152,93423,999Total loans receivable424,810689,692108,228Allowance for credit losses(5,863)(93,926)(14,739)Loans receivable, net418,947595,76693,489The loan interest rates range between 4% and 17% for the years ended December 31, 2020 and 2021. Majority of loans were short-term loansand recorded within loans receivables, net, and long-term loans of RMB66.1 million were recorded in other non-current assets as of December 31,2021. RMB370.4 million and RMB620.8 million of the balance is secured by collateral as of December 31, 2020 and 2021, respectively. The Groupalso purchased past due loans from third parties with the amount of RMB103.7 million and RMB77.5 million for the years ended December 31, 2020and 2021, respectively. The purchased past due loans of RMB96.4 million and RMB58.5 million were collected or transferred to other investors, forthe years ended December 31, 2020 and 2021, respectively.The following table presents the activity in the allowance for loan losses as of and for the years ended December 31, 2020 and 2021. (Amount in Thousands)RMB US$Loans receivable—January 1 2020 5,147 808Provisions 9,1951,443Reversal of allowance provided (5,147)(808)Write off(3,332)(523)Loans receivable—December 31, 2020 5,863920Provisions 99,05715,544Reversal of allowance provided (5,863)(920)Write off(5,131)(805)Loans receivable—December 31, 2021 93,92614,739Table of ContentsF-3811. Convertible NotesOn February 3, 2015, the Company issued an aggregate principal amount of US$80 million of convertible notes (“Notes”) through privateplacement to independent third parties not related to the Group. The Notes bear interest at a rate of 3.5% per annum from the issuance date throughmaturity on February 3, 2020 (the “maturity date”), and is payable semiannually in arrears on February 3 and August 3 of each year, beginning onAugust 3, 2015. The Notes will be convertible, at the holders’ option, into the Company’s ADSs, two of which represent one ordinary share of theCompany, at a conversion price of US$23.03 per ADS, representing an initial conversion rate of 43.4216 ADSs per US$1,000 principal amount of theNotes, subject to customary adjustments. The conversion feature requires physical settlement, and can only be exercised when the portion to beconverted is at least US$10 million or a lesser amount then held by the holder. The holders will have the right, at the holders’ option, to require theCompany to repurchase for cash on February 3, 2018 or on the maturity date, or upon a fundamental change or default, all of the Notes at arepurchase price that is equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, therepurchase date. Events of default include failure to pay principal or interest, breach of conversion obligation, suspension from trading or failure ofADSs to be listed, bankruptcy, etc. Debt issuance costs of nil is recorded as a direct deduction from the face amount of the Notes.The Company recorded the Notes as a liability in their entirety, and neither conversion feature nor any other feature is required to bebifurcated and accounted for separately. In addition, as the effective conversion price is greater than the fair value of underlying ADS, there was nobeneficial conversion feature to be recognized. US$21.09 million of the Notes have been converted to 915,762 ADS (represents 457,881 ordinaryshares) at the contractual conversion price of US$23.03 per ADS during the year ended December 31, 2019. As of December 31, 2019, all the Noteshave been converted to ADS.12. LeaseAs a lessee:Operating lease assets primarily represents various facilities under non-cancelable operating leases expiring within one to ten years. Leasecosts are included in either selling or general, and administrative expenses depending on the use of the underlying asset. Operating lease expenses,including the short-term lease cost which was immaterial, were RMB109,842, RMB99,349 and RMB102,321 for the years ended December 31, 2019,2020 and 2021, respectively. Cash payments against operating lease liabilities were RMB108,490, RMB97,694 and RMB99,064 for the years endedDecember 31, 2019, 2020 and 2021, respectively.Supplemental consolidated balance sheet information related to leases was as follows:As of December 31, (Amount in Thousands) 2020 2021 2021RMBRMBUS$Operating leases:Operating leases right-of-use assets274,154 223,652 35,096Current portion of lease liabilities86,472 91,288 14,325Non-current portion of lease liabilities194,384 130,956 20,550Total operating lease liabilities280,856 222,244 34,875Weighted average remaining lease term (years)3.76 2.85 Weighted average discount rate4.53%4.38% Table of ContentsF-39The maturities of operating lease liabilities for the next five years and thereafter as of December 31, 2020 and 2021, are as follows: As of December 31, (Amount in Thousands)20202021 RMB RMBWithin 1 year 90,393 95,288Between 1 and 2 years 82,151 75,197Between 2 and 3 years 64,048 48,288Between 3 and 4 years 48,996 14,459Between 4 and 5 years 16,253 324Total lease payment 301,841 233,556Less imputed interest (20,985) (11,312)Total 280,856 222,24413. Share RepurchaseTreasury stock represents shares repurchased by the Company that are no longer outstanding and are held by the Company. Treasury stock isaccounted for under the cost method. In 2019, the Company canceled 280,958 ADSs (represents 140,479 ordinary shares) with a carrying amount ofUS$6,190 (RMB40,267). As of December 31, 2019, all treasure stock have been retired.On December 1, 2020, the Company announced that its board of directors authorized a share repurchase program (the “Share RepurchaseProgram”) under which the Company may repurchase up to US$100 million worth of its ADSs over the following two years. As of December 31,2020, the Company has purchased an aggregate of 1,088,404 ADSs (represents 544,202 ordinary shares) for a total cash consideration of US$44,584(RMB290,913), including repurchase commissions.On February 25, 2021, the Company completed the Share Repurchase Program, with approximately 2,233,770 ADSs representing 1,116,885ordinary shares having been repurchased at an average price of US$44.77 per ADS.14. Share-Based CompensationThe following table presents the Company’s share-based compensation expense by type of award: Years Ended December 31,(Amounts in Thousands) 2019 2020 2021 2021RMBRMBRMBUS$Share options40,53321,83718,0812,837Non-vested restricted shares54,36437,95232,9565,172Total share-based compensation94,89759,78951,0378,009During the year ended December 31, 2017, the Group adopted its 2017 share incentive plan (the “2017 Plan”). Under the 2017 Plan, themaximum aggregate number of shares in respect of which options, restricted shares, or restricted share units may be issued shall be 2,800,000 shares.The term of any options, restricted shares, or restricted share units granted under the 2017 Plan shall not exceed ten years. Options, restricted shares orrestricted share units generally vest 25% on the first anniversary of the grant date with the remaining 75% vesting ratably over the following 36months.Share Options:No options were granted for the years ended December 31, 2019 and 2020. The weighted-average grant-date fair value of options grantedduring the year ended December 31, 2021 was RMB306.56 (US$48.11) per share. There were 201,630, 152,410 and 37,606 options exercised duringthe years ended December 31, 2019, 2020 and 2021, respectively.Table of ContentsF-40The Group uses the Black-Scholes pricing model and the following assumptions to estimate the fair value of the options granted: 2021 Average risk-free rate of return 0.8~1.5% Weighted average expected option life 6.1~8.4yearsEstimated volatility 42.1~50.4% Average dividend yield Nil The following table summarizes option activity during the year ended December 31, 2021: Weighted WeightedAverageAggregateAverageRemainingIntrinsicNumber ofExerciseContractualValue ofoptionsPriceTermOptions RMB Years RMBOutstanding as of January 1, 2021224,528505.335.517,848Granted268,006420.41Exercised(37,606)291.73Forfeited or expired(20,960)431.31Outstanding as of December 31, 2021433,968474.977.918,389Exercisable as of December 31, 2021154,661319.845.43,663The aggregate intrinsic value of options exercised during the year ended December 31, 2021 was RMB15,674. As of December 31, 2021,there was RMB76,105 of unrecognized compensation expense related to unvested share options, which is expected to be recognized over a weightedaverage period of 4.24 years.Non-vested Restricted Shares:A summary of non-vested restricted share activity during the year ended December 31, 2021 is presented below: Weighted- Number of average non-vested grant- restricted date fairNon-vested restricted sharesshares value RMBNon-vested as of January 1, 2021 103,373357.43Granted 120,050399.33Vested (57,064)471.41Forfeited (15,525)530.50Non-vested as of December 31, 2021 150,834324.12The total fair value of non-vested restricted shares vested during the year ended December 31, 2021 was RMB29,784. As of December 31,2021, there was RMB43,976 in total unrecognized compensation expense related to such non-vested restricted shares, which is expected to berecognized over a weighted-average period of 5.05 years.15. Settlement ExpensesIn July 2019, in connection with certain funds managed (“Camsing Credit Funds” or “Camsing Products”) by Shanghai Gopher AssetManagement Co., Ltd. (“Shanghai Gopher”), a consolidated affiliated subsidiary of the Company, it is suspected that fraud had been committed bythird parties related to the underlying investments (the “Camsing Incident”). A total of 818 investors were affected, and the outstanding amount of theinvestments that is potentially subject to repayment upon default amounted to RMB3.4 billion.Table of ContentsF-41Settlement PlanTo preserve the Group’s goodwill with affected investors, it voluntarily made an ex gratia settlement offer (the “Settlement Plan”) to affectedinvestors. An affected investor accepting the offer shall receive restricted share units (“RSUs”), which upon vesting will become Class A ordinaryshares of the Company, and in return forgo all outstanding legal rights associated with the investment in the Camsing Credit Funds and irrevocablyrelease the Company and all its affiliated entities and individuals from any and all claims immediately, known or unknown, that relate to the CamsingCredit Funds. The number of Class A ordinary shares each investor is entitled to is determined based on a fixed ratio of the investor’s outstandinginvestments in Camsing Products at 2,886 ADSs per RMB1 million.On August 24, 2020, the Settlement Plan was approved by the Board of Directors of the Company that a total number of new Class Aordinary shares not exceeding 1.6% of the share capital of the Company has been authorized to be issued each year for a consecutive ten years for theSettlement Plan.Two plans (“Plan A” or “Plan B”) were offered for the investors to choose. Under Plan A, the Group will issue RSUs to the investor’sdesignated trust plan. 1/10 of the RSUs shall be vested immediately at contract inception and the remaining 9/10 will be vested evenly in thefollowing 9 years subject to certain performance conditions by the investors. Plan B has the same terms as those of Plan A, except that the investorhas an option (the “Option”) to call back the beneficial rights of transferred Camsing Products (but not the legal title) or keep the RSUs at the thirdanniversary of contact (“Year 3”). All RSUs issued within the period from contract inception to Year 3 cannot be vested until the investor chooses toretain the RSUs. Under either plan, mutual understandings are established that the Group has committed and has conctractual obligations to issue theshares to the settled investors regardless of the actual execution of the Option, which is deemed remote to occur, and/or the fulfillment of theperformance conditions.The Group evaluated and concluded the financial instruments to be issued under the Settlement Plan meet equity classification under ASC815-40-25-10. Therefore, such instruments were initially measured at fair value and recognized as part of additional-paid-in-capital.To value the RSUs, the Group uses the Black-Scholes pricing model to calculate the discounts for lack of marketability. Determining theappropriate fair-value model and calculating the fair value of RSUs requires considerable judgment, including estimating stock price volatility. Thecomputation of expected volatility was based on the historical volatility of the Company’s common shares for a period that coincides with restrictionperiod of the RSUs.As of December 31, 2020, 552 out of the total 818 investors (approximately 67.5%) had accepted settlements under the plan, representingRMB2.4 billion out of the total outstanding investments of RMB3.4 billion (approximately 70%) under the Camsing Products. The total number ofRSUs to be issued is 3,478,060 shares. The cost of this Settlement Plan measured at the fair value of the RSUs to be issued was RMB1,290.8 million,which was reported under settlement expenses for the year ended December 31, 2020.In 2021, additional 43 investors accepted the Settlement Plan, and the Company recorded settlement expenses in the amount of RMB19,908(US$3.1 million) based on the difference between the fair value of the RSUs to be issued at each settlement date and the corresponding contingentliability accrued for these investors as of December 31, 2020.The Option under Plan B can be exercised separately from the RSUs and is determined to be a freestanding derivative liability and measuredat estimated fair value based on the recovery value of Camsing Products. The Group used the available information and determined the fair value ofOption to be nil as of December 31, 2020 and 2021, respectively. The fair value of the derivative will be re-assessed at each reporting period.16. Employee Benefit PlansMajority of full time employees of the Group participate in a PRC government-mandated multi-employer defined contribution plan pursuantto which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided toemployees. PRC labor regulations require the Group to accrue for these benefits based on a certain percentage of the employees’ salaries. The totalcontribution for such employee benefits were RMB225,776, RMB125,073 and RMB237,851 for the years ended December 31, 2019, 2020 and 2021,respectively. The decrease in 2020 was mainly due to the temporary exepmption of such defined contribution plan as a result of governmentpreferential policies during the COVID-19 pandemic. The Group has no ongoing obligation to its employees subsequent to its contributions to thePRC plan.Table of ContentsF-4217. Restricted Net AssetsPursuant to the relevant laws and regulations in the PRC applicable to foreign-investment corporations and the Articles of Association of theGroup’s PRC subsidiaries and VIEs, the Group is required to maintain a statutory reserve (“PRC statutory reserve”): a general reserve fund, whichis non-distributable. The Group’s PRC subsidiaries and VIEs are required to transfer 10% of their profit after taxation, as reported in their PRCstatutory financial statements, to the general reserve fund until the balance reaches 50% of their registered capital. At their discretion, the PRCsubsidiaries and VIEs may allocate a portion of its after-tax profits based on PRC accounting standards to staff welfare and bonus funds. The generalreserve fund may be used to make up prior year losses incurred and, with approval from the relevant government authority, to increase capital. PRCregulations currently permit payment of dividends only out of the Group’s PRC subsidiaries and VIEs’ retaining earnings as determined in accordancewith PRC accounting standards and regulations. The general reserve fund amounted to RMB371,438 and RMB407,500 as of December 31, 2020 and2021, respectively. The Group has not allocated any of its after-tax profits to the staff welfare and bonus funds for any period presented.In addition, the paid-in capital of the Group’s PRC subsidiaries and VIEs of RMB1,669,017 and RMB2,534,945 as of December 31, 2020and 2021, respectively, was considered restricted due to restrictions on the distribution of paid-in capital.As a result of these PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are restricted in their ability to transfer a portion oftheir net assets, including general reserve and paid-in capital, either in the form of dividends, loans or advances. Such restricted portion amounted toRMB2,950,455 as of December 31, 2021.18. Segment InformationThe Group uses the management approach to determine operating segments. The management approach considers the internal organizationand reporting used by the Group’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance.The Group’s CODM has been identified as the chief executive officer, who reviews consolidated results including revenues, operating cost andexpenses and income (loss) from operations when making decisions about allocating resources and assessing performance of the Group.The Group believes it operates in three reportable segments: wealth management, asset management and, other business. The Group’sCODM does not review balance sheet information of the segments.Table of ContentsF-43Segment information of the Group’s business is as follow:Year Ended December 31, 2019 (Amount in Thousands)Wealth ManagementAssets ManagementOtherBusinessBusinessBusinessesTotal RMB RMB RMB RMBRevenues: Revenues from othersOne-time commissions 688,652 2,208 — 690,860Recurring service fees 520,013 4,679 — 524,692Performance-based income 23,333 104 — 23,437Other service fees 222,912 4,274 295,772 522,958Total revenues from others 1,454,910 11,265 295,772 1,761,947Revenues from funds Gopher managesOne-time commissions 239,409 1,399 — 240,808Recurring service fees 635,437 685,336 — 1,320,773Performance-based income 97 89,551 — 89,648Total revenues from funds Gopher manages 874,943 776,286 — 1,651,229Total revenues 2,329,853 787,551 295,772 3,413,176Less: VAT related surcharges (10,574) (3,971) (6,819) (21,364)Net revenues 2,319,279 783,580 288,953 3,391,812Operating cost and expenses: Compensation and benefits Relationship manager compensation (625,044) — — (625,044)Performance-based compensation — (31,283) — (31,283)Other compensations (607,336) (248,612) (98,495) (954,443)Total compensation and benefits (1,232,380) (279,895) (98,495) (1,610,770)Selling expenses (287,541) (26,661) (17,144) (331,346)General and administrative expenses (194,908) (71,805) (29,779)(296,492)Provision for credit losses(121,572)(3,800)(5,351)(130,723)Other operating expenses (103,846) (25,978) (66,969) (196,793)Government subsidies 58,704 15,878 14,696 89,278Total operating cost and expenses (1,881,543) (392,261) (203,042) (2,476,846)Income from operations 437,736 391,319 85,911 914,966Table of ContentsF-44Year Ended December 31, 2020 (Amount in Thousands)Wealth ManagementAssets ManagementOtherBusinessBusinessBusinessesTotal RMB RMB RMB RMBRevenues: Revenues from othersOne-time commissions 677,7261,288—679,014Recurring service fees 697,1403,017—700,157Performance-based income 180,385144—180,529Other service fees 123,4587,45165,242196,151Total revenues from others 1,678,70911,90065,2421,755,851Revenues from funds Gopher managesOne-time commissions 88,52041,303—129,823Recurring service fees 587,307642,735—1,230,042Performance-based income 24,920184,076—208,996Total revenues from funds Gopher manages 700,747868,114—1,568,861Total revenues 2,379,456880,01465,2423,324,712Less: VAT related surcharges (13,123)(4,521)(1,242)(18,886)Net revenues 2,366,333875,49364,0003,305,826Operating cost and expenses: Compensation and benefits Relationship manager compensation (613,101)—(898)(613,999)Performance-based compensation —(85,413)—(85,413)Other compensations (486,668)(254,278)(63,654)(804,600)Total compensation and benefits (1,099,769)(339,691)(64,552)(1,504,012)Selling expenses (228,853)(34,302)(8,537)(271,692)General and administrative expenses (197,511)(59,440)(20,928)(277,879)Provision for credit losses(3,785)(251)(4,047)(8,083)Other operating expenses (76,983)(6,443)(15,614)(99,040)Government subsidies 58,04624,44330,867113,356Total operating cost and expenses (1,548,855)(415,684)(82,811)(2,047,350)Income (loss) from operations 817,478459,809(18,811)1,258,476Table of ContentsF-45Year Ended December 31, 2021 (Amount in Thousands)Wealth ManagementAssets ManagementOtherBusinessBusinessBusinessesTotal RMB RMB RMB RMBRevenues: Revenues from othersOne-time commissions 1,130,653241—1,130,894Recurring service fees 912,5061,194—913,700Performance-based income 391,903——391,903Other service fees 92,3521,39068,240161,982Total revenues from others 2,527,4142,82568,2402,598,479Revenues from funds Gopher managesOne-time commissions 50,24790,275—140,522Recurring service fees 557,094638,215—1,195,309Performance-based income 77,218315,072—392,290Total revenues from funds Gopher manages 684,5591,043,562—1,728,121Total revenues 3,211,9731,046,38768,2404,326,600Less: VAT related surcharges (17,076)(4,923)(11,507)(33,506)Net revenues 3,194,8971,041,46456,7334,293,094Operating cost and expenses: Compensation and benefits Relationship manager compensation (900,921)(19,975)—(920,896)Performance-based compensation (45,913)(112,130)—(158,043)Other compensations (707,455)(317,929)(64,557)(1,089,941)Total compensation and benefits (1,654,289)(450,034)(64,557)(2,168,880)Selling expenses (354,128)(55,790)(27,213)(437,131)General and administrative expenses (270,253)(70,686)(42,382)(383,321)Provision for credit losses(6,490)(13,275)(93,194)(112,959)Other operating expenses (53,616)(4,347)(49,881)(107,844)Government subsidies 65,36837,90512,666115,939Total operating cost and expenses (2,273,408)(556,227)(264,561)(3,094,196)Income (loss) from operations 921,489485,237(207,828)1,198,898The following table summarizes the Group’s revenues generated by the different geographic location.Year Ended December 31, 2019 (Amount in Thousands)Wealth ManagementAssets ManagementOtherBusinessBusinessBusinessesTotal RMB RMB RMB RMBMainland China 1,494,742676,837295,7722,467,351Hong Kong 633,16899,957—733,125Others201,94310,757—212,700Total revenues 2,329,853787,551295,7723,413,176Year Ended December 31, 2020 (Amount in Thousands)Wealth ManagementAssets ManagementOtherBusinessBusinessBusinessesTotal RMB RMB RMB RMBMainland China 1,787,611742,74365,2422,595,596Hong Kong 452,810111,431—564,241Others 139,03525,840—164,875Total revenues 2,379,456880,01465,2423,324,712Table of ContentsF-46Year Ended December 31, 2021 (Amount in Thousands)Wealth ManagementAssets ManagementOtherBusinessBusinessBusinessesTotal RMB RMB RMB RMBMainland China 2,479,576768,20368,2403,316,019Hong Kong 629,587240,136—869,723Others 102,81038,048—140,858Total revenues 3,211,9731,046,38768,2404,326,600Substantially all of the Group’s revenues are derived from, and its assets are located in the mainland of China and Hong Kong.19. Related Party TransactionsParties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significantinfluence over the other party in making financial and operational decisions. Parties are also considered to be related if they are subject to commoncontrol or common significant influence. Related parties may be individuals or corporate entities.The table below sets forth major related parties and their relationships with the Group:Company Name Relationship with the GroupSequoia Capital Investment Management (Tianjin) Co., Ltd.Affiliate of shareholder of the GroupWanjia Win-Win Investee of Gopher Asset Management Co., Ltd. (“Gopher Assets”)Zhejiang Vanke-Noah Asset Management Co., Ltd. (“Zhejiang Vanke”)Investee of Gopher AssetsShanghai Dingnuo Technology Co., Ltd. (“Dingnuo”)Affiliate of shareholder of the GroupInvestee funds of Gopher AssetsInvestees of Gopher Assets, a consolidated VIE of the GroupInvestee funds of Gopher Capital GP Ltd.Investees of Gopher Capital GP Ltd., a subsidiary of the GroupShanghai Noah Charity FundA charity fund established by the GroupTable of ContentsF-47During the years ended December 31, 2019, 2020 and 2021, related party transactions were as follows:Year Ended December 31 (Amount in Thousands)2019202020212021 RMB RMB RMB US$One-time commissions Investee funds of Gopher Assets 240,808 129,823 140,52222,051Recurring service fees Investee funds of Gopher Assets 1,009,568 927,611 871,618136,776Wanjia Win-Win 688 — 463 73Sequoia Capital Investment Management (Tianjin) Co., Ltd. 15,759 12,411 26,4884,157Investee funds of Gopher Capital GP Ltd. 313,612 302,431 323,69150,794Total recurring services fee 1,339,627 1,242,453 1,222,260191,800Performance-based income Investee funds of Gopher Assets 34,248 140,050 166,58026,140Investee funds of Gopher Capital GP Ltd. 36,800 68,946 225,71035,419Zhejiang Vanke 18,600 — ——Total performance-based income 89,648 208,996 392,29061,559Other service fees Investee funds of Gopher Assets 3,899 3,425 5,945933Investee funds of Gopher Capital GP Ltd. — 86 — —Total other service fees 3,899 3,511 5,945933Total 1,673,982 1,584,783 1,761,017276,343As of December 31, 2020, and 2021, amounts due from related parties associated with the above transactions were comprised of thefollowing:As of December 31, (Amount in Thousands)202020212021 RMB RMB US$Investee funds of Gopher Assets 433,936 303,28047,591Investee funds of Gopher Capital GP Ltd. 46,039 97,37815,281Total 479,975 400,65862,872As of December 31, 2020, and 2021, amounts due from related parties associated with loan distributed were comprised of the following:As of December 31, (Amount in Thousands)202020212021 RMB RMB US$Investee funds of Gopher Assets 27,226 18,8502,958Investee funds of Gopher Capital GP Ltd. 12,977 31,8815,003Total 40,203 50,7317,961The terms of the loans are due on demand and most of the loans are interest free.Table of ContentsF-48As of December 31, 2020, and 2021, deferred revenues related to the recurring management fee received in advance from related partieswere comprised of the following:As of December 31, (Amount in Thousands)202020212021 RMB RMB US$Investee funds of Gopher Assets 35,820 16,3732,569Investee funds of Gopher Capital GP Ltd. 1,653 738116Total 37,473 17,1112,685During the years ended December 31, 2019, 2020 and 2021, donation made to Shanghai Noah Charity Fund were RMB1.2 million,RMB2.8 million and RMB3.5 million, respectively.During the years ended December 31, 2019, 2020 and 2021, the Group paid nil, RMB6.0 and RMB9.2 million as service fees to Dingnuo fordevelopment of an online mutual fund work station for the Group’s relationship managers and one-stop service platform for private equity fundmanagers, respectively.20. ContingenciesCamsing IncidentAs disclosed in Note 15, the Group offerd a voluntary settlement plan in 2020 to all affected Camsing investors, and as of December 31,2021, approximately 72.7% of the Camsing investors had accepted the settlement plan, representing approximately 75.4% of the total outstandinginvestments of RMB3.4 billion under the Camsing Products. The Group currently has no new settlement plan for the remaining unsettled investors,but would not preclude reaching settlements in the future with similar terms. The Group estimated the probable amount of future settlement takinginto consideration of possible forms of settlement and estimated acceptable level, and recorded it as a contingent liability in the amount of RMB433.3million as of December 31, 2021.As of December 31, 2021, there were 33 investors whose legal proceedings against Shanghai Gopher and/or its affiliates, with an aggregateclaim amount approximately RMB116.1 million were still outstanding. The Group is of the view that these proceedings will not have a materialadverse effect on the Group’s business. As the date of this report, the management has assessed, based on its PRC legal counsels’ advices, the Groupcannot reasonably predict the timing or outcomes of, or estimate the amount of loss, or range of loss, if any, related to the pending legal proceedings.OthersThe Group is subject to periodic legal or administrative proceedings in the ordinary course of business. Other than those related to theCamsing Incident, the Group does not have any pending legal or administrative proceedings to which the Group is a party that will have a materialeffect on its business or financial condition.Table of ContentsF-49Additional Financial Information of Parent Company – Financial Statements Schedule IThe following Schedule I has been provided pursuant to the requirements of Rules 12-04(a) and 5-04(c) of Regulation S-X, which requirecondensed financial information as to the financial position, changes in financial position and results of operations of a parent company as of the samedates and for the same periods for which audited consolidated financial statements have been presented, as the restricted net assets was more than25% of the Company’s consolidated net assets as of December 31, 2021.a) Condensed Balance Sheets (Amount in Thousands, Except Share and Per Share Data)As of December 31, 2020 20212021 RMBRMB US$Assets Current assets Cash and cash equivalents 1,359,841224,145 35,173Amounts due from related parties 778760 119Other current assets 40,772— —Total current assets 1,401,391224,905 35,292Investments in subsidiaries and VIEs 6,107,4898,538,829 1,339,930Investments in affiliates 279,430301,509 47,313Other non-current assets 653637 100Total assets 7,788,9639,065,880 1,422,635Liabilities and Equity Current liabilities Contingent liabilities 530,433433,345 68,001Amounts due to subsidiaries and VIEs56,937575,42890,297Other current liabilities 13,80616,332 2,563Total current liabilities 601,1761,025,105 160,861Other non-current liabilities 2,276— —Total liabilities 603,4521,025,105 160,861Shareholder’s equity Class A ordinary shares (US$0.0005 par value): 91,394,900 shares authorized, 22,773,542 sharesissued and 22,229,340 shares outstanding and 22,683,970 shares issued and 21,764,455 sharesoutstanding as of December 31, 2021 7676 12Class B ordinary shares (US$0.0005 par value): 8,605,100 shares authorized, 8,315,000 shares issuedand outstanding as of December 31, 2020 and 2021 2828 4Treasury stock (544,202 and 919,515 ordinary shares as of December 31, 2020 and 2021,respectively) (290,913)(541,379) (84,954)Additional paid-in capital 3,565,6673,534,741 554,678Retained earnings 3,989,7675,187,323 814,005Accumulated other comprehensive loss (79,114)(140,014) (21,971)Total shareholders’ equity 7,185,5118,040,775 1,261,774Total liabilities and shareholders' equity 7,788,9639,065,880 1,422,635Table of ContentsF-50b) Condensed Statements of Operations (Amount in Thousands)Years ended December 31, 2019202020212021 RMB RMB RMB US$Net revenues — — — —Operating cost and expenses Selling expenses 131 356 285 45General and administrative expenses 5,556 5,588 41,955 6,584Total operating cost and expenses 5,687 5,944 42,240 6,629Loss from operations (5,687) (5,944) (42,240) (6,629)Other income (expenses): Interest income 29,000 20,545 2,266 356Interest expenses (440) — — —Settlement expenses — (1,828,907) (19,908) (3,124)Other income (expenses) 5,057 14,713 (4,211) (661)Total other income (expenses) 33,617 (1,793,649) (21,853) (3,429)Income (loss) before taxes and income from equity in affiliates, subsidiariesand VIEs 27,930 (1,799,593) (64,093) (10,058)Income tax expenses (5,257) (3,058) — —Income from equity in affiliates36,10378,76868,38810,732Income from equity in subsidiaries and VIEs 770,375 978,658 1,309,836 205,541Net income (loss) 829,151 (745,225) 1,314,131 206,215c) Condensed Statements of Comprehensive Income (Loss) (Amount in Thousands) Years ended December 31, 2019202020212021 RMB RMB RMB US$Net income (loss) 829,151 (745,225) 1,314,131 206,215Other comprehensive income (loss), net of tax Foreign currency translation adjustments 61,651 (176,934) (60,900) (9,557)Fair value fluctuation of available-for-sale investment, net of tax of nil (797) 771 — —Other comprehensive income (loss) 60,854 (176,163) (60,900) (9,557)Comprehensive income (loss) 890,005 (921,388) 1,253,231 196,658Table of ContentsF-51d) Condensed Statements of Cash Flows (Amount in Thousands)Years ended December 31,2019202020212021 RMB RMB RMB US$Cash flows from operating activities: Net income (loss) attributable to Noah Holding Limited shareholders 829,151(745,225) 1,314,131 206,215Adjustments to reconcile net income to net cash (used in) provided by operatingactivities: Income from equity in subsidiaries and VIEs (770,375)(978,658) (1,309,836) (205,541)Income from equity in affiliates, net of dividends (36,103)(58,913) (28,606) (4,489)Share-based settlement expense —1,290,811 19,908 3,124Changes in operating assets and liabilities: Amounts due from subsidiaries and VIEs 308,774356,685 — —Amounts due from related parties 9,151(94) 18 3Amounts due to subsidiaries and VIEs—56,93728,5844,485Other current assets (9,331)(31,417) 40,772 6,398Deferred tax assets 7861,226 — —Contingent liabilities —530,433 (11,398) (1,789)Other current liabilities 4,341(10,249) 11,828 1,856Other non-current liabilities 756908 (2,276) (357)Net cash provided by operating activities 337,150412,444 63,125 9,905Cash flows from investing activities: Capital return from investments in subsidiaries and VIEs 170,589— — —Increase in investments in subsidiaries and VIEs (78,668)(43,690) (1,120,785) (175,876)Capital return from investments in affiliates —101,114 — —Proceeds from long-term investments 43,772— — —Net cash provided by (used in) investing activities 135,69357,424 (1,120,785) (175,876)Cash flows from financing activities:Proceeds from issuance of ordinary shares upon exercise of stock options31,68833,37211,1141,744Proceeds from advances from subsidiaries——537,60484,362Repayment of advances from subsidiaries——(82,481)(12,943)Payment for repurchase of ordinary shares—(281,610)(372,376)(58,434)Net cash provided by (used in) financing activities31,688(248,238)93,86114,729Effect of exchange rate changes43,253(111,190)(171,897)(26,974)Net increase (decrease) in cash and cash equivalents 547,784110,440 (1,135,696) (178,216)Cash and cash equivalents - beginning of year 701,6171,249,401 1,359,841 213,389Cash and cash equivalents - end of year 1,249,4011,359,841 224,145 35,173Supplement disclosure of non-cash investing activities:During the year ended December 31, 2020, an consolidated investment fund was disposed partially by the Company and thus wasdeconsolidated and recorded as investments in affiliates. The deconsolidation resulted in a decrease in investments in subsidiaries and VIEs amountedto RMB109.7 million with a corresponding increase in investments in affiliates.Table of ContentsF-52e) Notes to Condensed Financial Statements1.The condensed financial statements of Noah Holdings Limited have been prepared using the same accounting policies as set out in theconsolidated financial statements except that the equity method has been used to account for investments in subsidiaries and VIEs. Suchinvestment in subsidiaries and VIEs are presented on the balance sheets as investment in subsidiaries and VIEs and the profit of thesubsidiaries and VIEs is presented as income from equity in subsidiaries and VIEs on the statement of operations.2.As of December 31, 2020 and 2021, there were no material contingencies, significant provisions of long-term obligations of the Company,except for those which have been separately disclosed in the consolidated financial statements.3.Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principlesgenerally accepted in the United States of America have been condensed or omitted. The footnote disclosure certain supplementalinformation relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to theaccompanying Consolidated Financial Statements. Exhibit 2.6Description of Rights of Securities Registered under Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”)Two American Depositary Shares (“ADSs”) representing one Class A ordinary share of Noah Holdings Limited, (“we,” “our,” “our company,” or “us”) are listedand traded on the New York Stock Exchange and, in connection with this listing (but not for trading), the Class A ordinary shares are registered under Section 12(b) ofthe Exchange Act. This exhibit contains a description of the rights of (i) the holders of Class A ordinary shares and (ii) the holders of ADSs. Underlying Class Aordinary shares represented by the ADSs are held by Citibank, N. A., as depositary, and holders of ADSs will not be treated as holders of the Class A ordinary shares.Description of Class A Ordinary SharesThe following is a summary of material provisions of our currently effective fifth amended and restated memorandum and articles of association (our“Memorandum and Articles of Association”), as well as the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”) insofar as they relate to thematerial terms of our ordinary shares. Notwithstanding this, because it is a summary, it may not contain all the information that you may otherwise deem important.For more complete information, you should read the entire Memorandum and Articles of Association, which has been filed with the SEC as an exhibit to our currentreport on Form 6-K (File No. 001-34936), as amended, initially filed with the Commission on January 29, 2016.Type and Class of Securities (Item 9.A.5 of Form 20-F)Each Class A ordinary share has US$0.0005 par value. The number of Class A ordinary shares that have been issued as of the last day of the fiscal yearended December 31, 2021 is provided on the cover of the annual report on Form 20-F filed on April 6, 2021 (the “2021 Form 20-F”). Our ordinary shares are issued inregistered form and are issued when registered in our register of members. We may not issue shares to bearer.Preemptive Rights (Item 9.A.3 of Form 20-F)Our shareholders do not have preemptive rights.Limitations or Qualifications (Item 9.A.6 of Form 20-F)We have a dual-class voting structure such that our ordinary shares consist of Class A ordinary shares and Class B ordinary shares. Each Class A OrdinaryShare shall entitle the holder thereof to one (1) vote on all matters subject to vote at our general meetings, and each Class B ordinary share shall entitle the holderthereof to four (4) votes on all matters subject to vote at our general meetings. Due to the super voting power of the holders of Class B ordinary shares, the votingpower of the holders of Class A ordinary shares may be materially limited.Rights of Other Types of Securities (Item 9.A.7 of Form 20-F)Not applicable.Rights of Ordinary Shares (Item 10.B.3 of Form 20-F)General. All of our issued and outstanding Class A ordinary shares and Class B ordinary shares are fully paid. Our ordinary shares are issued in registeredform, and are issued when registered in our register of shareholders. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote theirClass A ordinary shares and Class B ordinary shares.Dividends. The holders of our Class A ordinary shares and Class B ordinary shares are entitled to such dividends as may be declared by our board ofdirectors, subject to Cayman Islands law and our Memorandum and Articles of Association. In addition, our shareholders may by ordinary resolution declare adividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend on itsshares out of either profit or share premium amount, provided that in no circumstances may a dividend be paid if this would result in the company being unable to payits debts as they fall due in the ordinary course of business.Voting Rights. Each Class A ordinary share is entitled to one vote and each Class B ordinary share is entitled to four votes on all matters upon which theordinary shares are entitled to vote. Voting at any shareholders’ meeting2is by show of hands unless a poll is demanded. A poll may be demanded by any one or more shareholders present in person or by proxy entitled to vote and whotogether hold not less than 10% of the paid up voting share capital of our company. Shareholders may attend any shareholders’ meeting in person or by proxy, or if acorporation or other non-natural person, by its duly authorized representative or proxy; we currently do not allow shareholders to vote electronically.A quorum required for a meeting of shareholders consists of at least one shareholder present in person or by proxy or, if a corporation or other non-natural person, by its duly authorized representative, who hold not less than an aggregate of one-third of our voting share capital. Shareholders’ meetings may be heldannually and may be convened by our board of directors. Advance notice of at least seven calendar days is required for the convening of shareholders’ meetings,subject to exceptions in certain circumstances as set out in our Memorandum and Articles of Association.An ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes cast by the shareholders entitled tovote, in person or by proxy, in a general meeting, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast by the shareholdersentitled to vote, in person or by proxy, in a general meeting. A special resolution is required for important matters such as a change of name or amendments to ourmemorandum or articles of association. Holders of the ordinary shares may effect certain changes by ordinary resolution, including increasing the amount of ourauthorized share capital, consolidating and dividing all or any of our share capital into shares of larger amounts than our existing shares, and canceling any authorizedbut unissued shares.Transfer of Shares. Subject to the restrictions set out in our Memorandum and Articles of Association, our shareholders may transfer all or any of theirordinary shares by an instrument of transfer in writing and executed by or on behalf of the transferor (and if our board of directors require, the transferee).Our board of directors may decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien. Our board may alsodecline to register any transfer of any ordinary share unless (a) the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares towhich it relates and such other evidence as our board may reasonably require to show the right of the transferor to make the transfer; and (b) a fee of such maximumsum as the New York Stock Exchange may determine to be payable, or such lesser sum as our board may from time to time require, is paid to us in respect thereof.If our board of directors refuses to register a transfer it shall, within two months after the date on which the instrument of transfer was lodged, send to eachof the transferor and the transferee notice of such refusal. The registration of transfers may be suspended on 14 days’ notice being given by advertisement in such oneor more newspapers or by electronic means and the register closed at such times and for such periods as our board may from time to time determine.Liquidation. On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of shares), assets available for distributionshall be distributed among the holders of the ordinary shares on a pro rata basis, and the liquidator may with the sanction of an ordinary resolution of the shareholdersdivide amongst the shareholders in specie or in kind the whole or any part of the assets of our company, and may for such purpose set such value as he deems fair uponany property to be divided as aforesaid, and may determine how such division shall be carried out as between our shareholders or different classes of shareholder.Redemption, Repurchase and Surrender of Shares. We may issue shares on terms that are subject to redemption, at our option or at the option of the holders,on such terms and in such manner as may, before the issue of such shares, be determined by our board of directors. Our company may also repurchase any of ourshares provided that our shareholders shall have approved the manner of purchase by ordinary resolution or the manner of purchase is in accordance with theprovisions of Articles 17 and 17A of our Memorandum and Articles of Association. Under the Companies Act, the redemption or repurchase of any share may be paidout of our company’s profits or out of the proceeds of a fresh issue of shares made for the purpose of such redemption or repurchase, or out of capital (including sharepremium account and capital redemption reserve) if our company can, immediately following such payment, pay its debts as they fall due in the ordinary course ofbusiness. In addition, under the Companies Act no such share may be redeemed or repurchased (a) unless it is fully paid up, (b) if such redemption or repurchasewould result in there being no shares outstanding, or (c) if the company has commenced liquidation. In addition, our company may accept the surrender of any fullypaid share for no consideration.Calls on Shares and Forfeiture of Shares. Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their sharesin a notice served to such shareholders at least 14 calendar days prior to the specified time of payment. Shares that have been called upon and remain unpaid on thespecified time are subject to forfeiture.Inspection of Books and Records. Holders of our ordinary shares have no general right under Cayman Islands law to inspect or obtain copies of our list ofshareholders or our corporate records, subject to certain limited3exceptions (including the right to obtain our memorandum and articles of association, our register of mortgages and charges and special resolutions of ourshareholders). However, we will provide our shareholders with annual audited financial statements. See “—H. Documents on Display.”Requirements to Change the Rights of Holders of Class A Ordinary Shares (Item 10.B.4 of Form 20-F)Variations of Rights of Shares. If at any time our share capital is divided into different classes or series of shares, all or any of the special rights attached toany class or series of shares may be varied either with the written consent of the holders of a majority of the issued shares of that class or series or with the sanction ofa special resolution passed at a general meeting of the holders of the shares of that class or series.In addition to any other applicable consent or approval requirements set forth in our Memorandum and Articles of Association and pursuant to the rules ofthe New York Stock Exchange, for so long as the total issued and outstanding Class B ordinary shares constitute a majority of the aggregate voting power of ourcompany, any amendment of the rights attached to our Class B ordinary shares requires approval by (i) holders of a majority of the total issued and outstanding ClassA ordinary shares as well as (ii) holders of a majority of the aggregate voting power of our company.For so long as any of our Class A ordinary shares are issued and outstanding, our company shall not, without the affirmative vote of at least a majority of ourClass A ordinary shares, voting as a single class, amend, alter or repeal any provision setting forth the terms of our Class A ordinary shares.Limitations on the Rights to Own Class A Ordinary Shares (Item 10.B.6 of Form 20-F)There are no limitations under the laws of the Cayman Islands or under our Memorandum and Articles of Association that limit the right of non-resident orforeign owners to hold or vote Class A ordinary shares, other than anti-takeover provisions contained in our Memorandum and Articles of Association which maydiscourage, delay or prevent a change of control of our company or management that shareholders may consider favorable.Provisions Affecting Any Change of Control (Item 10.B.7 of Form 20-F)Anti-Takeover Provisions. Some provisions of our Memorandum and Articles of Association have the potential to discourage, delay or prevent a change ofcontrol of our company or management that shareholders may consider favorable, including provisions that:· provide holders of our Class B ordinary shares four votes per share and holders of our Class A ordinary shares one vote per share on all matters uponwhich the ordinary shares are entitled to vote;· authorize our board of directors to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictionsof such preferred shares without any further vote or action by our shareholders; and· limit the ability of shareholders to call general meetings of shareholders.However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our Memorandum and Articles ofAssociation for a proper purpose and for what they believe in good faith to be in the best interests of our company.Ownership Threshold (Item 10.B.8 of Form 20-F)There are no provisions under Cayman Islands law applicable to our company, or under our Memorandum and Articles of Association, that require ourcompany to disclose shareholder ownership above any particular ownership threshold.Differences Between the Law of Different Jurisdictions (Item 10.B.9 of Form 20-F)The Companies Act of the Cayman Islands is modeled after that of England but does not follow recent English statutory enactments and differs from lawsapplicable to U.S. corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Act of theCayman Islands applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.4Mergers and Similar Arrangements. The Companies Act permits mergers and consolidations between Cayman Islands companies and between CaymanIslands companies and non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more constituent companies and the vesting oftheir undertaking, property and liabilities in one of such companies as the surviving company, and (b) a “consolidation” means the combination of two or moreconstituent companies into a consolidated company and the vesting of the undertaking, property and liabilities of such companies to the consolidated company. Inorder to effect such a merger or consolidation, the directors of each constituent company must approve a written plan of merger or consolidation, which must then beauthorized by (a) a special resolution of the shareholders of each constituent company, and (b) such other authorization, if any, as may be specified in such constituentcompany’s articles of association. The plan must be filed with the Registrar of Companies of the Cayman Islands together with a declaration as to the solvency of theconsolidated or surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger orconsolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in theCayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.A merger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders of thatCayman subsidiary if a copy of the plan of merger is given to every member of that Cayman subsidiary to be merged unless that member agrees otherwise. For thispurpose a company is a “parent” of a subsidiary if it holds issued shares that together represent at least ninety percent (90%) of the votes at a general meeting of thesubsidiary.The consent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived by a court in theCayman Islands.Save in certain limited circumstances, a shareholder of a Cayman constituent company who dissents from the merger or consolidation is entitled to paymentof the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon dissenting to the merger orconsolidation, provide the dissenting shareholder complies strictly with the procedures set out in the Companies Act. The exercise of dissenter rights will preclude theexercise by the dissenting shareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek relief onthe grounds that the merger or consolidation is void or unlawful.Separate from the statutory provisions relating to mergers and consolidations, the Companies Act also contains statutory provisions that facilitate thereconstruction and amalgamation of companies by way of schemes of arrangement, provided that the arrangement is approved by a majority in number of each classof shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholdersor creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of themeetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express tothe court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:· the statutory provisions as to the required majority vote have been met;· the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minorityto promote interests adverse to those of the class;· the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and· the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.The Companies Act also contains a statutory power of compulsory acquisition which may facilitate the “squeeze out” of dissentient minority shareholderupon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares affected within four months, the offeror may, within a two-monthperiod commencing on the expiration of such four month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of theoffer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed in the case of an offer which has been so approved unlessthere is evidence of fraud, bad faith or collusion.5If an arrangement and reconstruction by way of scheme of arrangement is thus approved and sanctioned, or if a tender offer is made and accepted, inaccordance with the foregoing statutory procedures, a dissenting shareholder would have no rights comparable to appraisal rights, save that objectors to a takeoveroffer may apply to the Grand Court of the Cayman Islands for various orders that the Grand Court of the Cayman Islands has a broad discretion to make, which wouldotherwise ordinarily be available to dissenting shareholders of Delaware corporations, providing rights to receive payment in cash for the judicially determined valueof the shares.Shareholders’ Suits. In principle, we will normally be the proper plaintiff and as a general rule a derivative action may not be brought by a minorityshareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the Cayman Islands courts can beexpected (and have had occasion) to follow and apply the common law principles (namely the rule in Foss v. Harbottle and the exceptions thereto) which permit aminority shareholder to commence a class action against, or derivative actions in the name of, our company to challenge:· an act which is ultra vires or illegal and is therefore incapable of ratification by the shareholders;· an act which constitutes a fraud against the minority where the wrongdoer are themselves in control of the company; and· an act which requires a resolution with a qualified (or special) majority (i.e. more than a simple majority) which has not been obtained.Indemnification of Directors and Executive Officers and Limitation of Liability. Cayman Islands law does not limit the extent to which a company’smemorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the CaymanIslands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our Memorandum andArticles of Association provide that that we shall indemnify our directors and officers against all actions, proceedings, costs, charges, expenses, losses, damages orliabilities incurred or sustained by such persons in connection with the execution or discharge of his duties, powers, authorities or discretions as a director or officer ofour company, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such director or officer in defending(whether successfully or otherwise) any civil proceedings concerning our company or its affairs in any court whether in the Cayman Islands or elsewhere. OurMemorandum and Articles of Association also provide that no such director or officer of our company shall be liable to our company for any loss or damage unlesssuch liability arises through the willful neglect or default of such director or officer. This standard of conduct is generally the same as permitted under the DelawareGeneral Corporation Law for a Delaware corporation.In addition, we have entered into indemnification agreements with our directors and executive officers that provide such persons with additionalindemnification beyond that provided in our Memorandum and Articles of Association.Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under theforegoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and istherefore unenforceable.Directors’ Fiduciary Duties. Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders.This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarilyprudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material informationreasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests ofthe corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interestof the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholdersgenerally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in thebest interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presentedconcerning a6transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a fiduciary with respect to the company and therefore it isconsidered that he owes the following duties to the company—a duty to act in good faith in the best interests of the company, a duty not to make a personal profitbased on his position as director (unless the company permits him to do so), a duty not to put himself in a position where the interests of the company conflict with hispersonal interest or his duty to a third party and a duty to exercise powers for the purpose for which such powers were intended. A director of a Cayman Islandscompany owes to the company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greaterdegree of skill than may reasonably be expected from a person of his knowledge and experience. However, English and Commonwealth courts have moved towards anobjective standard with regard to the required skill and care and these authorities are likely to be followed in the Cayman Islands.Shareholder Action by Written Consent. Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act bywritten consent by amendment to its certificate of incorporation. Cayman Islands law and our Memorandum and Articles of Association provide that shareholders mayapprove corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matterat a general meeting without a meeting being held.Shareholder Proposals. Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting ofshareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any otherperson authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.The Companies Act provide shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to putany proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our Memorandum and Articles of Associationallow our shareholders holding not less than one-third of the share capital of our company that carries the right of voting at general meetings to requisition anextraordinary general meeting of our shareholders, in which case our board is obliged to convene an extraordinary general meeting and to put the resolutions sorequisitioned to a vote at such meeting. Other than this right to requisition a shareholders’ meeting, our Memorandum and Articles of Association do not provide ourshareholders with any other right to put proposals before annual general meetings or extraordinary general meetings. As an exempted Cayman Islands company, weare not obliged by law to call shareholders’ annual general meetings.Cumulative Voting. Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’scertificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directorssince it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting powerwith respect to electing such director. There are no prohibitions in relation to cumulative voting under the laws of the Cayman Islands but our Memorandum andArticles of Association do not provide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue thanshareholders of a Delaware corporation.Removal of Directors. Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause withthe approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under our Memorandum and Articles ofAssociation, directors may be removed with or without cause, by an ordinary resolution of our shareholders. A director’s office shall be vacated if the director (i) dies,becomes bankrupt or makes any arrangement or composition with his creditors; (ii) is found to be or becomes of unsound mind; (iii) resigns his office by notice inwriting to our company; or; (iii) is removed from office pursuant to any other provisions of our Memorandum and Articles of Association. Subject to the foregoingsentence, each director shall hold office until the expiration of his term and until his successor shall have been elected and qualified in accordance with ourMemorandum and Articles of Association.Transactions with Interested Shareholders. The Delaware General Corporation Law contains a business combination statute applicable to Delawarecorporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it isprohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that such7person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target’soutstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which allshareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interestedshareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. Thisencourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware businesscombination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide thatsuch transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.Dissolution; Winding up. Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must beapproved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved bya simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajorityvoting requirement in connection with dissolutions initiated by the board.Under Cayman Islands law, a company may be wound up by either an order of the courts of the Cayman Islands or by a special resolution of its members or,if the company is unable to pay its debts as they fall due, by an ordinary resolution of its members. The court has authority to order winding up in a number ofspecified circumstances including where it is, in the opinion of the court, just and equitable to do so.Variation of Rights of Shares. Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of amajority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under our Memorandum and Articles of Association, if ourshare capital is divided into different classes or series of shares, the rights attaching to any such class or series may (unless otherwise provided by the terms of issue ofthe shares of that class or series) be varied or abrogated with the consent in writing of a majority of the issued shares of that class or series or with the sanction of aspecial resolution passed at a separate meeting of the holders of the shares of that class or series. The rights conferred upon the holders of the shares of any class orseries issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class or series, be deemed to bevaried by the creation or issue of further shares ranking in priority thereto or pari passu therewith.Amendment of Governing Documents. Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with theapproval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under Cayman Islands law, ourMemorandum and Articles of Association may only be amended with a special resolution of our shareholders.Rights of Non-resident or Foreign Shareholders. There are no limitations imposed by our Memorandum and Articles of Association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares.Debt Securities (Item 12.A of Form 20-F)Not applicable.Warrants and Rights (Item 12.B of Form 20-F)Not applicable.Other Securities (Item 12.C of Form 20-F)Not applicable.Description of American Depositary Shares (Items 12.D.1 and 12.D.2 of Form 20-F)Citibank, N.A., has agreed to act as the depositary for American Depositary Shares (“ADSs”). Citibank’s depositary offices are located at 388 GreenwichStreet, New York, New York 10013. ADSs represent ownership interests in securities that are on deposit with the depositary. ADSs may be represented by certificatesthat are commonly known as American Depositary Receipts or ADRs. The depositary typically appoints a custodian to safekeep the securities on deposit. In this case,the custodian is Citibank, N.A.—Hong Kong, located at 10/F, Harbour Front (II), 22 Tak Fung Street, Hung Hom, Kowloon, Hong Kong.8We have appointed Citibank as depositary pursuant to a deposit agreement. A copy of the deposit agreement is on file with the SEC under cover of aRegistration Statement on Form F-6. You may obtain a copy of the deposit agreement from the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C.20549 and from the SEC’s website (www.sec.gov). Please refer to Registration Number 333- 170167 when retrieving such copy.We are providing you with a summary description of the material terms of the ADSs and of your material rights as an owner of ADSs. Please remember thatsummaries by their nature lack the precision of the information summarized and that the rights and obligations of an owner of ADSs will be determined by referenceto the terms of the deposit agreement and not by this summary. We urge you to review the deposit agreement in its entirety. The portions of this summary descriptionthat are italicized describe matters that may be relevant to the ownership of ADSs but that may not be contained in the deposit agreement.Each ADS represents the right to receive, and to exercise the beneficial ownership interests in, one-half (1/2) of one (1) Class A ordinary share that is ondeposit with the depositary and/or custodian. An ADS also represents the right to receive, and to exercise the beneficial interests in, any other property received by thedepositary or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practicalconsiderations. We and the depositary may agree to change the ADS-to-Share ratio by amending the deposit agreement. This amendment may give rise to, or change,the depositary fees payable by ADS owners. The custodian, the depositary and their respective nominees will hold all deposited property for the benefit of the holdersand beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary, the custodian or their nominees. Beneficialownership in the deposited property will under the terms of the deposit agreement be vested in the beneficial owners of the ADSs. The depositary, the custodian andtheir respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of thecorresponding ADSs. A beneficial owner of ADSs may or may not be the holder of ADSs. Beneficial owners of ADSs will be able to receive, and to exercisebeneficial ownership interests in, the deposited property only through the registered holders of the ADSs, the registered holders of the ADSs (on behalf of theapplicable ADS owners) only through the depositary, and the depositary (on behalf of the owners of the corresponding ADSs) directly, or indirectly, through thecustodian or their respective nominees, in each case upon the terms of the deposit agreement.If you become an owner of ADSs, you will become a party to the deposit agreement and therefore will be bound to its terms and to the terms of any ADRthat represents your ADSs. The deposit agreement and the ADR specify our rights and obligations as well as your rights and obligations as an owner of ADSs andthose of the depositary. As an ADS holder you appoint the depositary to act on your behalf in certain circumstances. The deposit agreement and the ADRs aregoverned by New York law. However, our obligations to the holders of Class A ordinary shares will continue to be governed by the laws of the Cayman Islands, whichmay be different from the laws in the United States.As an owner of ADSs, we will not treat you as one of our shareholders and you will not have direct shareholder rights. The depositary will hold on yourbehalf the shareholder rights attached to the Class A ordinary shares underlying your ADSs. As an owner of ADSs you will be able to exercise the shareholders rightsfor the Class A ordinary shares represented by your ADSs through the depositary only to the extent contemplated in the deposit agreement. To exercise anyshareholder rights not contemplated in the deposit agreement you will, as an ADS owner, need to arrange for the cancellation of your ADSs and become a directshareholder.9As an owner of ADSs, you may hold your ADSs either by means of an ADR registered in your name, through a brokerage or safekeeping account, orthrough an account established by the depositary in your name reflecting the registration of uncertificated ADSs directly on the books of the depositary (commonlyreferred to as the direct registration system or DRS). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by thedepositary. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary to the holders of the ADSs. Thedirect registration system includes automated transfers between the depositary and The Depository Trust Company, or DTC, the central book-entry clearing andsettlement system for equity securities in the United States. If you decide to hold your ADSs through your brokerage or safekeeping account, you must rely on theprocedures of your broker or bank to assert your rights as ADS owner. Banks and brokers typically hold securities such as the ADSs through clearing and settlementsystems such as DTC.This summary description assumes you have opted to own the ADSs directly by means of an ADS registered in your name and, as such, we will refer to youas the “holder.” For more complete information, you should read the entire deposit agreement and the form of American Depositary Receipt. The latest depositagreement and form of ADR have been filed with the SEC as an exhibit to a Registration Statement on our F-6 registration statement (File No. 333- 170167), asamended, filed with the Commission on March 15, 2016) for our company .Dividends and DistributionsAs a holder, you generally have the right to receive the distributions we make on the securities deposited with the custodian. Your receipt of thesedistributions may be limited, however, by practical considerations and legal limitations. Holders will receive such distributions under the terms of the depositagreement in proportion to the number of ADSs held as of a specified record date.Distributions of CashWhenever we make a cash distribution for the securities on deposit with the custodian, we will deposit the funds with the custodian. Upon receipt ofconfirmation of the deposit of the requisite funds, the depositary will arrange for the funds to be converted into U.S. dollars and for the distribution of the U.S. dollarsto the holders, subject to the laws and regulations of the Cayman Islands.The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The amounts distributed toholders will be net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. The depositary will apply thesame method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement.Distributions of Class A ordinary sharesWhenever we make a free distribution of Class A ordinary shares for the securities on deposit with the custodian, we will deposit the applicable number ofClass A ordinary shares with the custodian. Upon receipt of confirmation of such deposit, the depositary will either distribute to holders new ADSs representing theClass A ordinary shares deposited or modify the ADS-to-ordinary share ratio, in which case each ADS you hold will represent rights and interests in the additionalClass A ordinary shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributedas in the case of a cash distribution.The distribution of new ADSs or the modification of the ADS-to-ordinary share ratio upon a distribution of Class A ordinary shares will be made net of thefees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order to pay such taxes or governmental charges, thedepositary may sell all or a portion of the new Class A ordinary shares so distributed.No such distribution of new ADSs will be made if it would violate a law (including U.S. securities laws) or if it is not operationally practicable. If thedepositary does not distribute new ADSs as described above, it may sell the Class A ordinary shares received upon the terms described in the deposit agreement andwill distribute the proceeds of the sale as in the case of a distribution of cash.10Distributions of RightsWhenever we intend to distribute rights to subscribe for additional Class A ordinary shares, we will give prior notice to the depositary and we will assist thedepositary in determining whether it is lawful and reasonably practicable to distribute rights to subscribe for additional ADSs to holders.The depositary will establish procedures to distribute rights to subscribe for additional ADSs to holders and to enable such holders to exercise such rights ifit is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the depositagreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe forthe new ADSs upon the exercise of your rights. The depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights tosubscribe for new Class A ordinary shares other than in the form of ADSs.The depositary will not distribute the rights to you if:· we do not timely request that the rights be distributed to you or we request that the rights not be distributed to you; or· we fail to deliver satisfactory documents to the depositary; or· it is not reasonably practicable to distribute the rights.The depositary will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will bedistributed to holders as in the case of a cash distribution. If the depositary is unable to sell the rights, it will allow the rights to lapse.Elective DistributionsWhenever we intend to distribute a dividend payable at the election of shareholders either in cash or in additional shares, we will give prior notice thereof tothe depositary and will indicate whether we wish the elective distribution to be made available to you. In such case, we will assist the depositary in determiningwhether such distribution is lawful and reasonably practicable.The depositary will make the election available to you only if it is reasonably practicable and if we have provided all of the documentation contemplated inthe deposit agreement. In such case, the depositary will establish procedures to enable you to elect to receive either cash or additional ADSs in each case as describedin the deposit agreement.If the election is not made available to you, you will receive either cash or additional ADSs, depending on what a holder of Class A ordinary shares wouldreceive upon failing to make an election.Other DistributionsWhenever we intend to distribute property other than cash, Class A ordinary shares or rights to subscribe for additional Class A ordinary shares, we willnotify the depositary in advance and will indicate whether we wish such distribution to be made to you. If so, we will assist the depositary in determining whether suchdistribution to holders is lawful and reasonably practicable.If it is reasonably practicable to distribute such property to you and if we provide all of the documentation contemplated in the deposit agreement, thedepositary will distribute the property to the holders in a manner it deems practicable.The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the deposit agreement. In order topay such taxes and governmental charges, the depositary may sell all or a portion of the property received.The depositary will not distribute the property to you and will sell the property if:· we do not request that the property be distributed to you or if we request that the property not be distributed to you; or· we do not deliver satisfactory documents to the depositary; or· the depositary determines that all or a portion of the distribution to you is not reasonably practicable.11The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.RedemptionWhenever we decide to redeem any of the securities on deposit with the custodian, we will notify the depositary at least 45 days (or a fewer number of daysif agreed upon with the depositary) in advance of such proposed redemption. If it is practicable and if we provide all of the documentation contemplated in the depositagreement, the depositary will provide notice of the redemption to the holders.The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary will convert theredemption funds received into U.S. dollars upon the terms of the deposit agreement and will establish procedures to enable holders to receive the net proceeds fromthe redemption upon surrender of their ADSs to the depositary. You may have to pay fees, expenses, taxes and other governmental charges upon the redemption ofyour ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the depositary may determine.Changes Affecting Class A ordinary sharesThe Class A ordinary shares held on deposit for your ADSs may change from time to time. For example, there may be a change in nominal or par value, asplit-up, cancellation, consolidation or reclassification of such Class A ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets.If any such change were to occur, your ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged inrespect of the Class A ordinary shares held on deposit. The depositary may in such circumstances deliver new ADSs to you, amend the deposit agreement, the ADRsand the applicable Registration Statement(s) on Form F-6, call for the exchange of your existing ADSs for new ADSs and take any other actions that are appropriate toreflect as to the ADSs the change affecting the Class A ordinary shares. If the depositary may not lawfully distribute such property to you, the depositary may sell suchproperty and distribute the net proceeds to you as in the case of a cash distribution.Issuance of ADSs upon Deposit of Class A ordinary sharesThe depositary may create ADSs on your behalf if you or your broker deposit Class A ordinary shares with the custodian. The depositary will deliver theseADSs to the person you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the Class A ordinary shares tothe custodian. Your ability to deposit Class A ordinary shares and receive ADSs may be limited by U.S. and Cayman Islands legal considerations applicable at the timeof deposit.The issuance of ADSs may be delayed until the depositary or the custodian receives confirmation that all required approvals have been given and that theClass A ordinary shares have been duly transferred to the custodian. The depositary will only issue ADSs in whole numbers.When you make a deposit of Class A ordinary shares, you will be responsible for transferring good and valid title to the depositary. As such, you will bedeemed to represent and warrant that:· The Class A ordinary shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.· All preemptive (and similar) rights, if any, with respect to such Class A ordinary shares have been validly waived or exercised.· You are duly authorized to deposit the Class A ordinary shares.· The Class A ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, andare not, and the ADSs issuable upon such deposit will not be, “restricted securities” (as defined in the deposit agreement).· The Class A ordinary shares presented for deposit have not been stripped of any rights or entitlements.If any of the representations or warranties are incorrect in any way, we and the depositary may, at your cost and expense, take any and all actions necessaryto correct the consequences of the misrepresentations.12Transfer, Combination and Split Up of ADRsIf you hold ADRs, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidenced thereby. For transfers of ADRs, you will have tosurrender the ADRs to be transferred to the depositary and also must:· ensure that the surrendered ADR certificate is properly endorsed or otherwise in proper form for transfer;· provide such proof of identity and genuineness of signatures as the depositary deems appropriate;· provide any transfer stamps required by the State of New York or the United States; and· pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the deposit agreement,upon the transfer of ADRs.To have your ADRs either combined or split up, you must surrender the ADRs in question to the depositary with your request to have them combined orsplit up, and you must pay all applicable fees, charges and expenses payable by ADR holders pursuant to the terms of the deposit agreement upon a combination orsplit up of ADRs.Withdrawal of Class A ordinary shares Upon Cancellation of ADSsAs a holder, you will be entitled to present your ADSs to the depositary for cancellation and then receive the corresponding number of underlying Class Aordinary shares at the custodian’s offices. The depositary will not accept for surrender ADSs representing less than one share. In the case of the delivery to it of ADSsrepresenting a number other than a whole number of our Class A ordinary shares, the depositary will cause ownership of the appropriate whole number of shares to bedelivered in accordance with the terms of the deposit agreement, and will, at its discretion, either return to the person surrendering such ADSs the number of ADSsrepresenting any remaining fractional share, or sell or cause to be sold the fractional share represented by the ADSs so surrendered and remit the proceeds of such sale(net of applicable fees and charges of, and expenses incurred by, the depositary and taxes withheld) to the person surrendering the ADSs. Your ability to withdraw theClass A ordinary shares may be limited by U.S. and Cayman Islands legal considerations applicable at the time of withdrawal. In order to withdraw the Class Aordinary shares represented by your ADSs, you will be required to pay to the depositary the fees for cancellation of ADSs and any charges and taxes payable upon thetransfer of the Class A ordinary shares being withdrawn. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs willnot have any rights under the deposit agreement.If you hold ADSs registered in your name, the depositary may ask you to provide proof of identity and genuineness of any signature and such otherdocuments as the depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the Class A ordinary shares represented by your ADSs may bedelayed until the depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the depositary will onlyaccept ADSs for cancellation that represent a whole number of securities on deposit.You will have the right to withdraw the securities represented by your ADSs at any time except for:· temporary delays that may arise because (i) the transfer books for the Class A ordinary shares or ADSs are closed or (ii) Class A ordinary shares areimmobilized on account of a shareholders’ meeting or a payment of dividends;· obligations to pay fees, taxes and similar charges; and· restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit.The deposit agreement may not be modified to impair your right to withdraw the securities represented by your ADSs except to comply with mandatoryprovisions of law.Voting RightsAs a holder, you generally have the right under the deposit agreement to instruct the depositary to exercise the voting rights for the Class A ordinary sharesrepresented by your ADSs.If we ask for your instructions in a timely manner pursuant to the deposit agreement, as soon as practicable after receiving notice of any meeting orsolicitation of consents or proxies from us, the depositary will distribute to the registered ADS holders a notice stating such information as is contained in the votingmaterials received by13the depositary and describing how you may instruct the depositary to exercise the voting rights for the shares which underlie your ADSs, including circumstancesunder which a discretionary proxy may be given to a person designated by us. At our request, the depositary will distribute to you any notice of shareholders’ meetingreceived from us together with information explaining how to instruct the depositary to exercise the voting rights of the securities represented by ADSs. In lieu ofdistributing such materials, the depositary bank may distribute to holders of ADSs instructions on how to retrieve such materials upon request.Voting at our shareholders’ meetings is by show of hands unless a poll is demanded. A poll may be demanded by one or more of our registered shareholderspresent in person or by proxy entitled to vote and who together hold not less than 10 percent of the paid up voting share capital of our company. If the depositary banktimely receives voting instructions from a holder of ADSs, the depositary bank will endeavor to cause the Class A ordinary shares on deposit to be voted as follows:(a) in the event voting takes place at a shareholders’ meeting by show of hands, the depositary bank will instruct the custodian to vote, directly or by proxy, all Class Aordinary shares on deposit in accordance with the voting instructions received from a majority of the holders of ADSs who provided voting instructions; or (b) in theevent voting takes place at a shareholders’ meeting by poll, the depositary bank will instruct the custodian to vote, directly or by proxy, the Class A ordinary shares ondeposit in accordance with the voting instructions received from holders of ADSs.In the event of voting by poll, holders of ADSs in respect of which no timely voting instructions have been received shall be deemed to have instructed thedepositary to give a discretionary proxy to a person designated by us to vote the Class A ordinary shares represented by such holders’ ADSs; provided, that no suchinstruction shall be deemed given and no such discretionary proxy shall be given with respect to any matter as to which we inform the depositary that we do not wishsuch proxy to be given; provided, further, that no such discretionary proxy shall be given (x) with respect to any matter as to which we inform the depositary that(i) there exists substantial opposition, or (ii) the rights of holders of ADSs or the shareholders of the Company will be adversely affected and (y) in the event that thevote is on a show of hands.Please note that the ability of the depositary to carry out voting instructions may be limited by practical and legal limitations and the terms of the securitieson deposit. We cannot assure you that you will receive voting materials in time to enable you to return voting instructions to the depositary in a timely manner.Fees and ExpensesADS holders will be required to pay the following service fees to the depository:Service Fees● Issuance of ADSsUp to US$0.05 per ADS issued● Cancelation of ADSsUp to US$0.05 per ADS canceled● Distribution of cash dividends or other cash distributionsUp to US$0.05 per ADS held● Distribution of ADSs pursuant to stock dividends, free stock distributions or exercise of rightsUp to US$0.05 per ADS held● Distribution of securities other than ADSs or rights to purchase additional ADSsUp to US$0.05 per ADS held● Depositary servicesUp to US$0.05 per ADS held on the applicable record date(s) established by the depositary14As an ADS holder you will also be responsible to pay certain charges such as:●taxes (including applicable interest and penalties) and other governmental charges;●such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities on the share register andapplicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the makingof deposits and withdrawals, respectively;●such cable, telex and facsimile transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of theperson depositing or withdrawing Shares or Holders and Beneficial Owners of ADSs;●the expenses and charges incurred by the Depositary in the conversion of foreign currency;●such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatoryrequirements applicable to Shares, Deposited Securities, ADSs and ADRs; and●the fees and expenses incurred by the Depositary, the Custodian, or any nominee in connection with the servicing or delivery of Deposited Securities.Depositary Fees payable upon (i) deposit of Shares against issuance of ADSs and (ii) surrender of ADSs for cancellation and withdrawal of DepositedSecurities will be charged by the depositary to the person to whom the ADSs so issued are delivered (in the case of ADS issuances) and to the person who delivers theADSs for cancellation to the depositary (in the case of ADS cancellations). In the case of ADSs issued by the depositary into DTC or presented to the depositary viaDTC, the ADS issuance and cancellation fees will be payable to the depositary by the DTC participant(s) receiving the ADSs from the depositary or the DTCparticipant(s) surrendering the ADSs to the depositary for cancellation, as the case may be, on behalf of the Beneficial Owner(s) and will be charged by the DTCparticipant(s) to the account(s) of the applicable Beneficial Owner(s) in accordance with the procedures and practices of the DTC participant(s) as in effect at the time.Depositary fees in respect of distributions and the depositary services fee are payable to the depositary by Holders as of the applicable ADS Record Date establishedby the depositary. In the case of distributions of cash, the amount of the applicable depositary fees is deducted by the depositary from the funds being distributed. Inthe case of distributions other than cash and the depositary service fee, the depositary will invoice the applicable Holders as of the ADS Record Date established bythe depositary. For ADSs held through DTC, the depositary fees for distributions other than cash and the depositary service fee are charged by the depositary to theDTC participants in accordance with the procedures and practices prescribed by DTC from time to time and the DTC participants in turn charge the amount of suchfees to the Beneficial Owners for whom they hold ADSs.In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment isreceived or may offset the amount of the depositary fees from any distribution to be made to the ADS holder.The fees and charges that ADS holders may be required to pay may vary over time and may be changed by us and by the depositary.The depositary may reimburse us for certain expenses incurred by us in respect of the ADR program established pursuant to the deposit agreement, bymaking available a portion of the depositary fees charged in respect of the ADR program or otherwise, upon such terms and conditions as we and the depositary mayagree from time to time. As described in the deposit agreement, we or the depositary may withhold or deduct from any distributions made in respect of Class Aordinary shares and may sell for the account of a holder any or all of the Class A ordinary shares and apply such distributions and sale proceeds in payment of anytaxes (including applicable interest and penalties) or charges that are or may be payable by holders in respect of the ADSs.Amendments and TerminationWe may agree with the depositary to modify the deposit agreement at any time without your consent. We undertake to give holders 30 days’ prior notice ofany modifications that would materially prejudice any of their substantial rights under the deposit agreement. We will not consider to be materially prejudicial to yoursubstantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the15Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, wemay not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.You will be bound by the modifications to the deposit agreement if you continue to hold your ADSs after the modifications to the deposit agreement becomeeffective. The deposit agreement cannot be amended to prevent you from withdrawing the Class A ordinary shares represented by your ADSs (except as permitted bylaw).We have the right to direct the depositary to terminate the deposit agreement. Similarly, the depositary may in certain circumstances on its own initiativeterminate the deposit agreement. In either case, the depositary must give notice to the holders at least 30 days before termination. Until termination, your rights underthe deposit agreement will be unaffected.After termination, the depositary will continue to collect distributions received (but will not distribute any such property until you request the cancellation ofyour ADSs) and may sell the securities held on deposit. After the sale, the depositary will hold the proceeds from such sale and any other funds then held for theholders of ADSs in a non-interest bearing account. At that point, the depositary will have no further obligations to holders other than to account for the funds then heldfor the holders of ADSs still outstanding (after deduction of applicable fees, taxes and expenses).Books of DepositaryThe depositary will maintain ADS holder records at its depositary office. You may inspect such records at such office during regular business hours butsolely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the deposit agreement.The depositary will maintain facilities in New York to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. Thesefacilities may be closed from time to time, to the extent not prohibited by law.Limitations on Obligations and LiabilitiesThe deposit agreement limits our obligations and the depositary’s obligations to you. Please note the following:●We and the depositary are obligated only to take the actions specifically stated in the deposit agreement without negligence or bad faith.●The depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote,provided it acts in good faith and in accordance with the terms of the deposit agreement.●The depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any documentforwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in Class Aordinary shares, for the validity or worth of the Class A ordinary shares, for any tax consequences that result from the ownership of ADSs, for thecredit-worthiness of any third party, for allowing any rights to lapse under the terms of the deposit agreement, for the timeliness of any of our notices orfor any failure by us to give notice.●We and the depositary will not be obligated to perform any act that is inconsistent with the terms of the deposit agreement.●We and the depositary disclaim any liability if we or the depositary are prevented or forbidden from or subject to any civil or criminal penalty orrestraint on account of, or delayed in, doing or performing any act or thing required by the terms of the deposit agreement, by reason of any provision,present or future of any law or regulation, or by reason of present or future provision of any provision of our articles of association, or any provision ofor governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond our control.16●We and the depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for the deposit agreement or inour articles of association or in any provisions of or governing the securities on deposit.●We and the depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel,accountants, any person presenting Class A ordinary shares for deposit, any holder of ADSs or authorized representatives thereof, or any other personbelieved by either of us in good faith to be competent to give such advice or information.●We and the depositary also disclaim liability for the inability of a holder to benefit from any distribution, offering, right or other benefit that is madeavailable to holders of Class A ordinary shares but is not, under the terms of the deposit agreement, made available to you.●We and the depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signedor presented by the proper parties.●We and the depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the deposit agreement.As the above limitations relate to our obligations and the depositary’s obligations to you under the deposit agreement, we believe that, as a matter ofconstruction of the clause, such limitations would likely to continue to apply to ADS holders who withdraw the Class A ordinary shares from the ADS facility withrespect to obligations or liabilities incurred under the deposit agreement before the cancellation of the ADSs and the withdrawal of the Class A ordinary shares, andsuch limitations would most likely not apply to ADS holders who withdraw the Class A ordinary shares from the ADS facility with respect to obligations or liabilitiesincurred after the cancellation of the ADSs and the withdrawal of the Class A ordinary shares and not under the deposit agreement.In any event, you will not be deemed, by agreeing to the terms of the deposit agreement, to have waived our or the depositary’s compliance with U.S. federalsecurities laws and the rules and regulations promulgated thereunder. In fact, you cannot waive our or the depositary’s compliance with U.S. federal securities lawsand the rules and regulations promulgated thereunder.TaxesYou will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the depositaryand the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay thetaxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.The depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paidby the applicable holder. The depositary and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for anydistributions on your behalf. However, you may be required to provide to the depositary and to the custodian proof of taxpayer status and residence and such otherinformation as the depositary bank and the custodian may require to fulfill legal obligations. You are required to indemnify us, the depositary and the custodian for anyclaims with respect to taxes based on any tax benefit obtained for you.Foreign Currency ConversionThe depositary will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S.dollars in accordance with the terms of the deposit agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees andexpenses incurred in complying with currency exchange controls and other governmental requirements.If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within areasonable period, the depositary may take the following actions in its discretion:●Convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to the holders for whom the conversion and distribution islawful and practical.●Distribute the foreign currency to holders for whom the distribution is lawful and practical.●Hold the foreign currency (without liability for interest) for the applicable holders.Governing LawThe deposit agreement, the ADRs and the ADSs will be interpreted in accordance with the laws of the State of New York. The rights of holders of Class Aordinary shares (including Class A ordinary shares represented by ADSs) are governed by the laws of the Cayman Islands. Exhibit 4.11SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO ITEM 601(B)(10)(IV) OFREGULATION S-K UNDER THE SECURITIES ACT OF 1933, AS AMENDED, BECAUSE THEY BOTH ARENOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IFPUBLICLY DISCLOSED. THE TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH THREEASTERISKS [***].Acquisition Agreementin respect of[the SunnyWorld Project]among[Noah Kekong Entity]and[Xinting Investment Entity]and[Nanchang Qingting Entity]and[United Win China Entity]and[Shanghai Qingting Entity]and[New World Qingdao Entity]and[Actual Controller 1 of Party C]&[Actual Controller 2 of Party C]Date of Signing: [●]1Contents1DEFINITIONS AND INTERPRETATION 32PROPOSED TRANSACTION43TARGET EQUITY TRANSFER AND RESTRUCTURED DEBTS REPAYMENT64REPRESENTATIONS, WARRANTIES, AND COMMITMENTS115TERMINATION146INDEMNITY147CONFIDENTIALITY158FORCE MAJEURE169EXCLUSIONS1610TAXES AND FEES1611APPLICABLE LAWS AND DISPUTE RESOLUTION1712DELIVERY1713MISCELLANEOUS18SCHEDULE 1 BASIC INFORMATION OF THE TARGET COMPANY27SCHEDULE 2 BASIC INFORMATION OF THE TARGET PROPERTY28SCHEDULE 3 LIST OF DELIVERED ITEMS31SCHEDULE 4 CALCULATION OF RESTRUCTURED DEBTS (INCLUDING RESTRUCTURING GRACECOMPENSATION)32SCHEDULE 5 PAYMENT OF EQUITY TRANSFER CONSIDERATION33ANNEX 1 DEFINITIONS35ANNEX 2 FURTHER REPRESENTATIONS AND WARRANTIES392ANNEX 3 PRE-CLOSING COMMITMENTS46ANNEX 4 FORM OF EQUITY TRANSFER AGREEMENT49ANNEX 5 RESIGNATION LETTERS OF THE DIRECTORS, SUPERVISORS AND SENIOREXECUTIVES53ANNEX 6 TERMINATION CONTRACT571Acquisition AgreementThis Acquisition Agreement (“this Agreement”) is made and entered into among the following Parties in Shanghai on the9th day of May, 2021:(1)[Noah Kekong Entity], with its registered office at [●] (or its designated Affiliates [Kekong Entity 1], [Kekong Entity2], [Kekong Entity 3], and [Kekong Entity 4], “Party A”);(2)[Xinting Investment Entity], with [Cinda International Shanghai Entity] as its Managing Partner and its registeredoffice at [●] (“Party B”);(3)[Nanchang Qingting Entity], with its registered office at [●] (“Party C1” or “Nanchang Qingting”);(4)[United Win China Entity], with its registered office at [●] (“Party C2” or “United Win China”; Party C2 and PartyC1 are jointly referred to as “Party C”);(5)[Actual Controller 1 of Party C], with the passport numbered [●] and domicile at [●] (“Party D1” or the “ActualController”);(6)[Actual Controller 2 of Party C], with the passport numbered [●] and domicile at [●] (the spouse of [ActualController 1 of Party C], “Party D2”; Party D2 and Party D1 are jointly referred to as “Party D” or the “ActualControllers”);(7)[New World Qingdao Entity], with its domicile at [●] (the “Guarantor”); and(8)[Shanghai Qingting Entity], with its registered office at [●] (the “Target Company”).(Hereinafter, also individually referred to as “Party” and jointly referred to as “Parties”; for the purpose of convenience,Party C and Party D are jointly referred to as “SunnyWorld Parties”.)Whereas:(A)The Target Company is a limited liability company registered and incorporated under the laws of China (Its basicinformation as of the Signing Date of this Agreement is indicated in Schedule 1 hereto). Currently, it is the soleowner of [the SunnyWorld Project] located at the following addresses: [●], with the real estate certificates numbered[●] and [●], the “Target Property”, including the self-numbered Building A, Building B, Building C and BuildingD). The basic information of the Target Property as of the Signing Date of this Agreement is indicated in Schedule 2hereto. As of the Signing Date of this Agreement, Party B holds 100% of the Equity in the Target Company and allthe current and future rights, dividends, titles and interests attached thereto, including all the real estate rights to theentire Target Property enjoyed by holding the Target Company (the “Target Equity”). All registered capital of theTarget Company has been fully paid.2(B)Party B agrees and acknowledges that it will sell the Target Equity it holds to the party designated by Party A underthe terms and conditions specified in this Agreement, and each Party agrees and acknowledges that the four Affiliatesof Party A ([Kekong Entity 1], [Kekong Entity 2], [Kekong Entity 3] and [Kekong Entity 4], which will acquire theTarget Equity according to the equity percentages of [●]%, [●]%, [●]%, and [●]%) will, under the terms andconditions stipulated in this Agreement, acquire the Target Equity held by them to Party B and complete therepayment of the Restructured Debts so that Party A will control the Target Company and its assets, including but notlimited to the Target Property; upon the completion of the Proposed Transaction, unless otherwise specified in thisAgreement, the Target Equity will not be pledged, sealed up or otherwise encumbered with other rights and benefits,the Target Company will be free of external guarantees, liabilities or contingent liabilities, the Target Property willnot be pledged, sealed up or encumbered with other rights and benefits, and [Kekong Entity 1], [Kekong Entity 2],[Kekong Entity 3] and [Kekong Entity 4] will occupy Building A, Building B, Building C and Building Drespectively (this Transaction is hereinafter referred to as the “Proposed Transaction”).(C)[China Cinda Entity Shanghai Branch] (“Cinda Shanghai Branch”) acquired the credits against the Target Companyfrom [Bank of Shanghai Entity], [Shanghai Rural Commercial Bank Entity], [Shanghai Vanke Entity], and [QingdaoSunnyWorld Entity], and signed the Credits Acquisition Agreement with these entities aforementioned respectivelyon June 21, 2017.(D)Cinda Shanghai Branch, [Cinda International Shanghai Entity] (“Cinda International”), the Target Company,Nanchang Qingting and the Actual Controllers signed the Investment Framework Agreement on June 21, 2017regarding the acquisition of the credits aforementioned and the subsequent debt restructuring arrangement;subsequently, with respect to the acquisition of the credits aforementioned and the subsequent debt restructuringarrangement, Cinda Shanghai Branch signed with the Target Company the Debt Restructuring Contract numbered[●], the Supplemental Agreement to the Debt Restructuring Contract numbered [•], the Supplemental Agreement tothe Debt Restructuring Contract numbered [●], and the Supplemental Agreement II to the Debt RestructuringContract (together with the related Subsidiary Agreement and Guarantee Agreement, etc., jointly referred to as the“Debt Restructuring Contract”).NOW THEREFORE, the Parties hereto have concluded this Agreement on the basis of the principles of equal cooperationand mutual benefit for mutual compliance:31Definitions and Interpretation1.1DefinitionsIn this Agreement, the meanings set forth for defined terms are indicated in detail in Annex 1 hereto unless the contextotherwise specifies or requires.1.2Interpretation1.2.1For the purpose of this Agreement, unless otherwise explicitly specified herein, (i) the terms “herein”,“hereof”, “hereunder” and other words of similar import shall refer to this Agreement as a whole and not toany particular clause, section or other sub-clause or sub-section; (ii) the terms “include”, “includes” and“including” shall be deemed to be followed by the phrase “but not limited to” regardless of whether suchterms are followed by such phrases or by words of like import; and (iii) all references herein to the clauses,recital, schedules and annexes shall refer to the relevant clauses, the recital, schedules and annexes of/to thisAgreement. All annexes and schedules hereto, forming an integral part of this Agreement, shall constitute theentire agreement together with this Agreement. Any reference to this Agreement includes the schedules andannexes hereto.1.2.2The headings as used in this Agreement are included for the convenience of reference only and shall not beused in the interpretation hereof.1.2.3Unless otherwise specified in this Agreement, if the date on which a specific right hereunder can be exercisedis not a Business Day, such right may be exercised on the first Business Day following such date; if the dateon which an obligation shall be fulfilled hereunder is not a Business Day, such obligation shall be fulfilled onthe first Business Day following such date (for the avoidance of doubt, any complete fulfillment of suchobligation on the first Business Day following the due date for the fulfillment of such obligation shall not bedeemed to be a breach of contract by the party fulfilling such obligation).1.2.4All references to agreements (including but not limited to this Agreement) and other contractual documentsshall be deemed to include all annexes, schedules and appendices attached thereto and all such agreements andother contractual documents in effect and as subsequently amended, supplemented, renewed, replaced andmodified.1.2.5Any reference herein to any date shall mean a calendar day and any reference herein to time shall meanBeijing time.1.2.6All references herein to documents (including account books, records or other data, etc.) shall meandocuments in any forms, including records and information that are carried by paper, electronic media, opticaldisc media, magnetic disc media and film.41.2.7Notwithstanding any other provision of this Agreement, references herein to applicable laws shall includesuch applicable laws subsequently modified, changed, supplemented, or re-enacted from time to time.1.2.8References herein to government authorities shall refer to the central, provincial and local governments ofChina, including such ministries, commissions, bureaus and their dispatched agencies in the country and itsprovinces, municipalities directly under the central government, prefecture-level cities, counties, as well asthose at other administrative levels as having jurisdiction over the activities of either Party related to thematters described in this Agreement, and also government authorities that inherit the functions of theauthorities aforementioned by law.2Proposed TransactionEach Party hereto agrees that the total costs/amount payable to be ultimately borne by Party A to complete the ProposedTransaction includes such Target Equity Transfer Consideration and the repaid amount of the Restructured Debts as subjectto the calculation of the total repaid amount of the Restructured Debts specified in this Agreement, the total amount ofRMB[●] as of March 28, 2021, and the restructuring grace compensation calculated under Schedule 4 hereto.The Proposed Transaction in this Agreement is divided into two parts, which constitute an entire and integral transaction: (1)the transfer of the Target Equity (the Target Equity Transfer Consideration is RMB[●] million); and (2) the repayment of theRestructured Debts (As of March 28, 2021, the Restructured Debts (including but not limited to the principal of theRestructured Debts, restructuring grace compensation, and if any, other amount due and unpaid under the Debt RestructuringContract) total RMB[●]; the specific total repaid amount of the Restructured Debts as of March 28, 2021 is indicated indetail herein). The two parts aforementioned are used to achieve the goal of the ultimate merger and acquisition of the TargetEquity and all assets of the Target Company, including the Target Property. Party A agrees to pay Party B the Target EquityTransfer Consideration and to accept the Target Equity under the provisions of this Agreement. Party A also agrees to pay offall the Restructured Debts, for and on behalf of the Target Company, to Cinda Shanghai Branch. For the avoidance of doubt,Party A shall have the right to designate its Affiliates to acquire the Target Equity under this Agreement and pay the TargetEquity Transfer Consideration for and on behalf of its Affiliates.Party B, SunnyWorld Parties and the Target Company hereby agree that as of the Signing Date of this Agreement, theofficial seal, financial seal or any other seal of the Target Company shall not be used without the prior written consent ofParty A.2.1Party A’s Transaction AccountParty A shall, within five (5) Business Days following the Signing Date of this Agreement, open a capital account(“Party A’s Transaction Account”) in the name of Party A at5[Nanyang Commercial Bank Shanghai Entity] (“Nanyang Commercial Bank”), which is specially used for depositingand paying the repaid amount of the Restructured Debts specified in this Agreement. Party A and NanyangCommercial Bank sign the Account Receipt and Payment Bank-Enterprise Interlink Business Agreement of NanyangCommercial Bank (China) Co., Ltd. in respect of Party A’s Transaction Account (the “Entrusted PaymentAgreement”) to authorize Nanyang Commercial Bank to make payments to Party A’s Transaction Account under theprovisions of the Entrusted Payment Agreement and this Agreement. In addition, the seals of designated personnel ofParty A and Party B shall be added to the reserved bank seal card of Party A’s Transaction Account. Neither phonebanking nor online banking is available to Party A’s Transaction Account.2.2Sale and Purchase of the Target Equity2.2.1Subject to the terms and conditions hereof, Party B agrees to sell and transfer to Party A the Target Equity ofthe Target Company held by Party B, and all rights, titles, interests and benefits of Party B in relation to theTarget Equity, including but not limited to the right to declare, make or otherwise pay dividends ordistributions, if any, and all related earnings in relation to the Target Property from the date when the TargetEquity is changed to be registered in the name of Party A (inclusive, or the date when the new BusinessLicense for Party A’s Target Company to which the Target Equity is transferred, hereinafter referred to as the“Registration Date”).2.2.2Party A agrees to purchase and accept from Party B, all rights, titles, interests and benefits of Party B inrelation to the Target Equity, including but not limited to the right to declare, make or otherwise pay dividendsor distributions, if any, and all related earnings in relation to the Target Property. As of the Registration Date,Party A becomes the legal owner of the Target Equity, holds 100% of the Equity of the Target Company, andalso the Target Property through the Target Company.2.3Target Equity Transfer Consideration2.3.1To the extent that the terms and conditions of this Agreement are met, according to the result of negotiationbetween Party A and Party B, the Target Equity Transfer Consideration is RMB[●] million (“TransferConsideration”), which consists of the following two parts:a.the initial transfer consideration paid by Party A under the provisions of this Agreement upon thesigning of this Agreement (“Initial Transfer Consideration”), totaling RMB[●]; andb.the remaining transfer consideration, totaling RMB[●].2.3.2The payment terms and deadline in relation to the Target Equity Transfer Consideration are indicated in detailin Schedule 5 hereto.62.4Repayment of the Restructured Debts2.4.1The Target Company hereby acknowledges that as of March 28, 2021, all the outstanding Restructured Debtsof the Target Company to Cinda Shanghai Branch (including but not limited to the principal of theRestructured Debts, restructuring grace compensation and, if any, other amount due and unpaid (if any) underthe Debt Restructuring Contract), total RMB[●]. Subject to the terms and conditions of this Agreement, PartyA agrees to pay off all the Restructured Debts (including but not limited to the principal of the RestructuredDebts, restructuring grace compensation and, if any, other amount due and unpaid under the DebtRestructuring Contract, hereinafter collectively referred to as “Restructured Debts”; the specific calculationmethod for the Restructured Debts is indicated in Schedule 4 hereto in detail) to Cinda Shanghai Branch forand on behalf of the Target Company according to the payment terms and deadline specified herein.2.4.2Before all the Restructured Debts are repaid, the repayment by Party A for and on behalf of the TargetCompany shall not cause Party A to become or be recognized as the debtor or obligator of the RestructuredDebts. For the avoidance of doubt, the Target Company hereby acknowledges that upon the repayment of theRestructured Debts, the Target Company will not have any outstanding payments to Cinda Shanghai Branchand its Affiliates.3Target Equity Transfer and Restructured Debts Repayment3.1Conditions Precedent for Money Transfer3.1.1Conditions PrecedentEach Party hereto agrees and acknowledges that Party A’s money transfer to Party A’s Transaction Accountshall be subject to the satisfaction of all the following conditions (“Conditions Precedent”):a.This Agreement has been signed and come into effect and each Party, when signing the foregoingdocuments, has been subject to related procedures such as internal approval and external disclosure (ifapplicable) in accordance with the requirements of their constitutional documents and applicable laws.b.The Form of Equity Transfer Agreement, the content and format of which are indicated in Annex 4hereto, resignation letters of the directors, supervisors and senior executives of the Target Company, thecontent and format of which are indicated in Annex 5 hereto, as well as the Industrial and CommercialRegistration (Filing) Application Letter signed according to the instructions of Party A, including butnot limited to the change documents in relation to the transfer of the Target Equity to Party A, the filingdocuments of the new clauses of Association for the Target Company, and all filing documents inrelation to such directors, supervisors and senior executives of the Target Company as nominated by7Party A, have been signed and handed over to Party A, and each Party, before signing the documentsaforementioned, has been subject to related procedures such as internal approval and external disclosure(if applicable) in accordance with the requirements of their constitutional documents and applicablelaws.c.Cinda Shanghai Branch has issued Party A such Confirmation Letter for the Proposed Transaction asagreed on with Party A through friendly consultation.d.Party A, SunnyWorld Parties, the Target Company, the Guarantor and other parties have signed theSubsidiary Agreement to this Agreement according to the results of due diligence,and SunnyWorld Parties and the Target Company have fulfilled all obligations and responsibilitiesundertaken by SunnyWorld Parties and the Target Company prior to the Money Transfer Date under theAncillary agreement to this Agreement, including but not limited to Shanghai Vanke’s waiver of therepurchase right of the Equity in the Target Company and exemption of the corresponding guaranteeliabilities of the Target Company, the written consent of [Qingdao Yayuan Property Management Co.,Ltd. Shanghai Branch] to transfer the property management fees, water and electricity charges and otherexpenses owed by the Target Company to a third party, to clear the credits and debts with all Affiliatesof the Target Company, and sign related written agreements, the issue of confirmation documents andother documents provided by SunnyWorld Parties in relation to the unpaid engineering costs (orEntrusted Payment Agreement, all engineering cost invoices with the title being the Target Company(except for the invoices with the date of issue later than the Money Transfer Date with the consent ofParty A), the documents concerning the exemption of the full amount paid by the Entrusted Payer to theTarget Company, and certificates for the transfer of the entrusted payment) and the termination orchange of the Subsidiary Agreement in relation to the related lease of the Target Company as providedby [China Construction Eighth Engineering Bureau Co., Ltd.] or other parties permitted by Party A, aswell as recognition of the presentation of the land use right costs, upfront costs and engineering costsincurred when SunnyWorld Parties separate the Target Company as land costs when the land value-added tax is settled and paid (by signing the Subsidiary Agreement for recognition, etc.).e.Such representations, commitments and warranties and the statements and undertakings contained inrelated certificates, documents, financial statements or other documents as made or provided by PartyB, SunnyWorld Parties, the Target Company and the Guarantor to Party A remain true, accurate andcomplete in all material respects and not misleading in any way, as if they were made on thecorresponding dates with respect to the facts and circumstances then existing; and none of Party B,SunnyWorld Parties, the Target Company and the Guarantor has failed in the fulfillment of anyobligation or has violated any representation, warranty or commitment.f.Neither Force Majeure Event nor Material Adverse Event has occurred to make the purposes of thisAgreement and other related Transaction8Documents fail to be realized and the Proposed Transaction is neither prohibited nor restricted by anylaw or any third party.3.1.2Exemption of the Conditions PrecedentParty A shall have the right, at its discretion, to exempt in writing all or part of the Conditions Precedent orimpose any reasonable conditions on such exemption. Such exemption will neither affect any other rights ofParty A hereunder nor exempt any other Party from the obligation to satisfy or procure the satisfaction of anyexempted Conditions Precedent immediately.3.1.3Latest Money Transfer Date(1)Once all the Conditions Precedent under Clause 3.1.1 herein have occurred and been met (or have beenexempted by Party A in writing under the provisions of this Agreement and other TransactionDocuments), Party A shall transfer an amount not less than RMB[•] billion to Party A’s TransactionAccount (the date when Party A transfers such amount to Party A’s Transaction Account is referred to the“Money Transfer Date”).(2)Party B, SunnyWorld Parties and the Target Company shall cause all the Conditions Precedent underClause 3.1.1 herein to be met no later than May 31, 2021 (inclusive) and the Money Payment Date shallnot be later than May 31, 2021 (inclusive) (the “Latest Money Transfer Date”).(3)If, as of the Latest Money Transfer Date (inclusive), the requirements specified in Paragraph (1) of Clause3.1.3 herein are not met or not reached, all Transaction Documents may be early terminated upon writtennotification from either Party hereunder.3.2Conditions for the Initial Entrusted PaymentParty B, SunnyWorld Parties and the Target Company shall be jointly responsible for completing the following matterswithin ten (10) Business Days following the Money Transfer Date. For the avoidance of doubt, Party A agrees that ifthe following matters cannot be completed within the foregoing period due to the reason of the Industry and CommerceDepartment, Party A will not hold the responsible party accountable for a breach of contract hereunder to the extentthat the responsible party actively cooperates with Party A for completing such matters:(1)All pledge registrations in relation to the Target Equity have been canceled and there are no events affecting thetransfer of the Target Equity;(2)The transfer of the Target Equity has been subject to change registration with the Industry and CommerceDepartment and Party A has been registered as the holder of 100% Equity of the Target Company;(3)The new clauses of Association of the Target Company has been filed with the9Industry and Commerce Department;(4)The directors, supervisors and senior executives of the Target Company have been changed to be the Personsnominated by Party A and all the new directors, supervisors and senior executives have been filed with theIndustry and Commerce Department; and(5)The Target Company has obtained the updated Business License.3.3Entrusted Payment Date3.3.1After all matters specified in Clause 3.2 herein have been completed, Party B shall, together with Party A,receive the updated Business License of the Target Company from the Industry and Commerce Department(“Business License Receipt Date”) and hand over such Business License to Party A for keeping. In addition,SunnyWorld Parties shall deliver one U Key in each bank account of the Target Company, as indicated indetail in Part 2, Schedule 3 hereto, to Party A for keeping. The conditions for entrusted payment shall bedeemed to be met upon receipt of the new Business License. Nanyang Commercial Bank shall, on the datewhen the conditions for entrusted payment are met, make the payment with an amount equivalent to RMB[●]billion under the authorization of Party A (“Entrusted Payment”) to Cinda Shanghai Branch via Party A’sTransaction Account. Party A acknowledges that such amount aforementioned will be used to repay part of theRestructured Debts and will be firstly used to offset the corresponding restructuring grace compensation andthen, if there is any balance, to offset the principal of the Restructured Debts. For the avoidance of doubt, thedate when Nanyang Commercial Bank pays the Entrusted Payment is the entrust payment date (“EntrustedPayment Date”). Meanwhile, Party A will pay the Initial Transfer Consideration to Party B. On or before theEntrusted Payment Date, the Affiliates of Party A will issue announcements in relation to the ProposedTransaction.3.3.2Party B’s account for receiving the Transfer Consideration hereunder is as follows:Account Name: [Xinting Investment Entity]Account No.: [●]Bank: [●]3.3.3The account of Cinda Shanghai Branch for receiving the repaid Restructured Debts hereunder is as follows:Account Name: Cinda Shanghai BranchAccount No.: [●]10Bank: [●]Large-sum Payment Account No.: [●]3.4Date of the Second Payment3.4.1On the Entrusted Payment Date or the date immediately following such date (no later than three BusinessDays following the Entrusted Payment Date), all Parties hereto shall go to the Real Estate Registration Centerto confirm the documents necessary for the release of the mortgage of the Target Property, and jointly assistthe preparation of the documents required for such release as required by the Real Estate Registration Center.Upon Party A, Party B and Cinda Shanghai Branch confirm that the documents required for the release of themortgage have been prepared and Party A has finished the counting and inspection of such documents anditems as listed in Part 1, Schedule 3 hereto and the Subsidiary Agreement of this Agreement, Party A shall paythe remaining Restructured Debts to Cinda Shanghai Branch via Party A’s Transaction Account, as indicatedin detail in Schedule 4 hereto, and Party B shall assist Party A in making such payment. For the avoidance ofdoubt, the date of paying the remaining Restructured Debts is the Date of the Second Payment (“Date of theSecond Payment”). On the date when Party A pays the remaining Restructured Debts, Party B, SunnyWorldParties, and the Target Company shall be jointly responsible for completing the following matters (the date onwhich all the following matters are completed, whichever is later, is the “Closing Date”):a.The Target Company, Party B and Nanchang Qingting sign a termination contract according to suchcontent and format as shown in Annex 6 hereto to terminate the Mortgage Contract dated June 23, 2017and its supplemental agreement(s), if any;b.Party B and SunnyWorld Parties shall hand over such documents and items as listed in Part 1, Schedule3 hereto and in the Subsidiary Agreement to this Agreement respectively to Party A’s designatedPersons for keeping (Party A shall have the right to destroy the official seal, financial seal and otherseals of the Target Company upon receiving the documents and items aforementioned and remake newseals); andc.The regulation over Party A’s Transaction Account is released.3.4.2As of the Date of the Second Payment (inclusive), all the Restructured Debts have been repaid and there is nooutstanding debt or other unsolved dispute in relation to Restructured Debts between the Target Company andCinda Shanghai Branch, between Cinda International and Party B.3.5Obligations Following the Date of the Second Payment3.5.1Upon the Restructured Debts are fully paid off, Party B and Cinda Shanghai Branch shall, upon receipt of fivedays written notice from Party A, cooperate with Party A in undergoing the formalities of canceling themortgage registration11of the Target Property with the Real Estate Registration Center (except for the new mortgage registrationfollowing the Closing Date) no later than June 20, 2021, except for delays caused only by the internal reviewof the Real Estate Exchange Center.3.5.2Except for the employees of the Target Company that Party A agrees to continue to retain, SunnyWorld Partiescommit to urge the Target Company to terminate its labor/employment relationship with all the existingemployees (the termination costs shall be borne by SunnyWorld Parties) and provide Party A with relatedtermination contracts within thirty days of the Closing Date.3.5.3For the avoidance of doubt, the transactions contemplated hereunder shall be deemed completed upon thecompletion of the events of the Proposed Transaction following the Closing Date and the complete fulfillmentof the other obligations by all Parties hereto.4Representations, Warranties, and Commitments4.1Mutual Warranties of the PartiesEach Party makes the following representations and warranties to the other Parties:4.1.1Such Party is a legal person that is legally incorporated and validly existing under the laws of the place ofregistration or a natural person with full capacity for civil rights and civil conduct, if applicable;4.1.2Such Party has the legal right, license and authorization to enter into and perform this Agreement and otherTransaction Documents to which such Party is a party, and this Agreement and/or other TransactionDocuments will be valid and binding to such Party once signed;4.1.3Such Party has taken all necessary actions to obtain all authorizations necessary for the execution andperformance of this Agreement and other Transaction Documents to which such Party is a party, and theactions aforementioned shall continue to be effective;4.1.4The signature appearing in the column of the name of such Party on the signing page of this Agreement andother Transaction Documents (if any) to which such Party is a party shall be validly signed by such Party inperson (in the case of a natural person) or the signatory duly authorized by such Party; and4.1.5The execution and performance of this Agreement or other Transaction Documents to which such Party is aparty, if any, will not:(1)cause a violation of any provision of any applicable laws or the organizational documents of itsCompany;(2)cause a breach of any provision under any contract or agreement to which12such Party is a party; or(3)cause a violation of any judgment or order of any court or government authorities in which such Party isa party or by which such Party is bounded.4.2Further Representations and WarrantiesParty B and SunnyWorld Parties hereby make the following further representations and undertakings to Party A:4.2.1Except as disclosed in this Agreement, Party B and SunnyWorld Parties will have no need to obtain the priorconsent or approval of any Person in relation to the Proposed Transaction;4.2.2In addition to the representations and warranties made under Clause 4.1 herein, Party B and SunnyWorldParties further make all the representations and warranties set out in Annex 2 hereto (for the avoidance ofdoubt, the further representations and warranties set out in Annex 2 apply to the parties issuing relatedrepresentations and warranties contained therein);4.2.3The warranties made by Party B and SunnyWorld Parties shall remain fully effective and shall continue to beeffective upon the Closing Date; and4.2.4All information related to the Target Company, the Target Property and the Proposed Transaction or all factsand matters related thereto have been disclosed by SunnyWorld Parties to Party A; all written informationsubmitted by SunnyWorld Parties is true, accurate and complete in all material respects, does not omit anymaterial facts to be included or stated therein, and is not misleading as to the specific circumstances underwhich such information was made; and4.2.5Any activity or step engaged in or taken by Party B, SunnyWorld Parties or its Affiliates, shareholders and/orConsultants for the purpose of satisfying the Conditions Precedent will not result in any dispute, controversy,lawsuit, arbitration proceedings, government investigation or inquiry.4.3Breach of Representations or Warranties4.3.1Each Party mutually acknowledges that the execution of this Agreement is based on its full understanding ofother parties’ warranties and commitments hereunder.4.3.2Each Party mutually acknowledges that each warranty made is true, accurate and complete in all respects andis not misleading in any way during the continuous period that starts from the Signing Date of this Agreement(inclusive) and ends till the Closing Date (inclusive), including but not limited to the Signing Date, the MoneyTransfer Date, the Date of the Second Payment and the Closing Date.4.3.3If any warranty made by either Party is untrue, inaccurate, incomplete or misleading in any respect, or if eitherparty breaches its warranties and13commitments, causing losses to the other Parties, the Default Party shall compensate the Non-default Party forall losses suffered by the Non-default Party accordingly. The liabilities hereunder shall continue to be validupon the Closing Date hereunder.4.3.4The Parties hereto agree not to do anything that causes or may cause the warranties hereunder to be untrue,inaccurate, incomplete or misleading in any respect.4.4Commitments4.4.1During the continuous period that starts from the Signing Date of this Agreement (inclusive) and ends till theClosing Date (inclusive), SunnyWorld Parties will procure and ensure that the Target Company will observeall commitments under Annex 3 (“Pre-Closing Commitments”) and Party B will cooperate with SunnyWorldParties in fulfilling such commitments.4.4.2Party A, SunnyWorld Parties, the Target Company, the Guarantor and other parties will separately sign theSubsidiary Agreement to this Agreement and SunnyWorld Parties will make full and sufficient representationsand warranties to Party A as to the Target Company and the Target Property to ensure Party A will not sufferfrom any losses or claims arising from the acquisition and holding of the Target Company and the TargetProperty.4.4.3Party C1 commits that except for the early termination of this Agreement under the provisions of Clause 3.1.3or with the unanimous written consent of the Parties hereto, Party C1 will neither exercise the right torepurchase the Target Equity nor enjoy any repurchase right or other preferential right to the Target Equity.4.4.4All commitments and the rights and remedies for breach of commitments shall continue to be valid upon theClosing Date.4.4.5The Guarantor hereby irrevocably commits that the Guarantor will assume joint liability for all obligations andliabilities of Party B, SunnyWorld Parties, Cinda Shanghai Branch, Cinda International and the TargetCompany under the Transaction Documents, including but not limited to default liabilities caused due toviolations of the provisions or representations, warranties and commitments to be undertaken by SunnyWorldParties thereunder. Additionally, the Guarantor hereby agrees to provide Party A with a valid resolutiondocument made by the internal competent authorities on such guarantee on the Signing Date of thisAgreement.145Termination5.1Without prejudice to the other clauses of this Agreement and applicable legal remedies, this Agreement shall beterminated if either of the following circumstances occurs:(1)natural termination of this Agreement;(2)termination with the unanimous written consent of all Parties hereto; or(3)upon the occurrence of any termination event specified in Clause 3.1.3 hereof.The Parties hereto agree that except for the foregoing, this Agreement shall not be terminated under any circumstances.Termination of this Agreement shall not affect any rights and remedies hereunder prior to such termination.6Indemnity6.1Indemnity ObligationThe Default Party shall indemnify and hold harmless the Non-Default Party from any and all losses incurred orsuffered arising from or in relation to the violation of this Agreement, including but not limited to costs incurred in anyand all lawsuits, arbitration, prosecutions, claims or legal proceedings.6.2Non-exclusion of Other RightsThe remedies set forth in this Clause 6 shall not exclude or limit any other remedies that any Party hereto may beentitled to. For the avoidance of doubt, the remedies set forth in this Clause 6 shall survive following the Closing Date.6.3Party A’s Special Remedies(1)If the conditions set forth in Clause 3.2 of this Agreement fail to be met by the deadline specified herein,SunnyWorld Parties shall pay Party A the liquidated damages equivalent to [•]% of all the AcquisitionConsideration to be borne for the Proposed Transaction on a daily basis, including but not limited to the repaidamount of the Restructured Debts and the Target Equity Transfer Consideration, from the deadline by which theforegoing obligations are fulfilled at the latest, except for any delay caused due to the reason of Party A or theIndustrial and Commercial Department.(2)If Clause 3.4 or 3.5 hereof fails to be met by the deadline specified herein, SunnyWorld Parties shall pay Party Athe liquidated damages equivalent to [•]% of all the Acquisition Consideration to be borne for the ProposedTransaction on a daily basis, including but not limited to the repaid amount of the Restructured Debts and theTarget Equity Transfer Consideration, from the deadline by which the foregoing obligations are fulfilled at thelatest, except for any delay caused due to the reason of Party A or the Real Estate Registration Center.(3)If Cinda Shanghai Branch and Cinda International fail to release all their regulatory15measures on the Target Company within the period agreed in the Letter of Acknowledgement, SunnyWorld Partiesshall pay Party A the liquidated damages equivalent to [•]% of all the Acquisition Consideration to be borne forthe Proposed Transaction on a daily basis, including but not limited to the repaid amount of the Restructured Debtsand the Target Equity Transfer Debts, from the deadline by which the foregoing obligations are fulfilled at thelatest, except for the delay caused due to the reason of Party A or the Industrial and Commercial Department/RealEstate Registration Center.(4)If any of the circumstances indicated in Paragraphs (1), (2) and (3) of Clause 6.3 herein is triggered and Party Ahas completed the repayment of all the Restructured Debts and paid the Initial Transfer Consideration, in additionto the remedies aforementioned, Party A shall have the right to immediately request Party B and SunnyWorldParties to fulfill related obligations under Clauses 3.2, 3.4 and 3.5 of this Agreement and Party A’s designatedpersonnel shall fully take over and control the Target Company and the Target Property. In addition, the cash flowgenerated by the Target Company and the Target Property shall be the property of Party A from the date whenParty A has paid all the Restructured Debts and the Initial Transfer Consideration.7Confidentiality7.1Confidentiality ObligationUnless any law, government or court requires or the unanimous written consent of each Party is obtained, no Partyshall disclose or divulge any provision of this Agreement, any information in relation to this Agreement, anydocuments, data or information obtained from any other Parties, and any documents, data, information, technicalsecrets or business secrets of such Party; however, the disclosure of the foregoing documents, data and information byeach Party within the following scope will not violate the confidentiality obligation hereunder:7.1.1disclosure made with the joint written consent of all Parties;7.1.2disclosure made to such Party’s directors, managers, officers and employees who have the necessity to obtainthe foregoing documents, data and information for the purpose of participating in this Transaction;7.1.3disclosure made to such Party’s attorneys, accountants and engineering due diligence party to the extentnecessary;7.1.4disclosure made to relevant professionals and Persons with the written consent of the other Parties forconsulting professional problems to the extent necessary;The permitted disclosure aforementioned shall not exceed the necessary limit and the Disclosing Party must takemeasures to cause the Persons or organizations receiving the16foregoing documents, data and information to keep them secret; and the disclosure of information by any Party heretoshall not disclose information endangering the interests of the other Parties under this Clause.7.2Effect of the Confidentiality ObligationThe foregoing confidentiality obligation shall remain binding to the Parties upon the rescission or termination of thisAgreement.8Force Majeure8.1If either Party is unable to perform or delays in performing its obligations hereunder owning to any Force MajeureEvent, such Party shall be exempted from its liability in part or in whole according to the impact of the Force MajeureEvent, but shall immediately notify other parties of the occurrence of the Force Majeure Event and shall, within fifteen(15) Business Days of the occurrence of such Force Majeure Event, provide other parties with detailed information andproof of the Force Majeure Event and explain the reason for the inability to perform or delay in performing theobligations hereunder.8.2If the purposes of this Agreement cannot be achieved due to the occurrence of any Force Majeure Event, the impact ofwhich cannot be eliminated or mitigated in any way, and each Party fails to agree on the purposes of this Agreementwithin ninety (90) days of the occurrence of such Force Majeure, such Party shall give a prior written notice to otherparties and any Party shall have the right to terminate this Agreement. In this case, no Party shall bear any liabilityunless otherwise specified herein.9ExclusionsDuring the continuous period that starts from the Signing Date (inclusive) and ends till (i) termination date of thisAgreement (inclusive) or (ii) the Closing Date (inclusive, whichever occurs earlier), None of Party B, SunnyWorldParties and their respective Affiliates may take the initiative to contact any Person or contact any other Person at itsrequest for negotiating on all and any transactions in relation to the Target Property or the Target Company, includingbut not limited to share arrangement, capital increase or decrease arrangement, asset transfer arrangement, trustarrangement, custody arrangement, contract arrangement, etc.10Taxes and Fees10.1All taxes and fees arising from this Agreement and applying to either Party under the provisions of relevant laws shallbe borne by each Party. Additionally, for the avoidance of doubt, the taxes and fees to be borne by Party B inaccordance with the provisions of related laws due to the transfer of the Target Equity shall be borne by SunnyWorldParties.10.2Related transaction costs involved in the Proposed Transaction hereunder, including legal service costs, financialexpenses, etc, shall be borne by the Party who engages other professional parties.1711Applicable Laws and Dispute Resolution11.1This Agreement, the rights and obligations of the Parties hereto, and any claims or disputes in relation to the foregoingshall be governed by and construed in accordance with Chinese laws.11.2If any dispute, controversy or claim arising from or in relation to this Agreement (“Dispute”), including breach ofcontract, validity and termination of this Agreement, fails to be solved within 20 Business days of such Party’s issuingthe dispute notice through friendly consultation, such dispute shall be submitted to Shanghai International Economicand Trade Arbitration Commission for arbitration in Shanghai in accordance with then valid arbitration rules. TheLosing Party shall bear all costs incurred in resolving the dispute, including but not limited to arbitration costs, attorneyfees, appraisal costs, evaluation costs, travel expenses, preservation fees for property preservation and execution,guarantee fees, etc. For the avoidance of doubt, unless each Party expressly changes this Clause in writing, where thereis any inconsistency between any other document signed by the Parties in relation to dispute resolution and to theapplication of laws and this Clause, the latter shall prevail.12Delivery12.1All notices under or in relation to this Agreement shall be made in Chinese and delivered to the corresponding Partiesby fax, personal delivery, express delivery, registered mail or email at the designated address or fax number or emailaddress.Party A:Address: [●]Tel: [●]Fax: [●]Email: [●]Contact: [●]Party B:Address: [●]Tel: [●]Fax: [●]Email: [●]Contact: [●]The Target Company, SunnyWorld Parties and GuarantorAddress: [●]Tel: [●]Fax: /18Email: [●]Contact: [●]12.2A Notice shall be deemed to have been served (“delivery”) when:(1)If sent by fax, such Notice shall be deemed delivered on the first Business Day following the date when the faxmachine that sends the Notice acknowledges successful transmission in the form of a transmission report;(2)If sent by personal delivery or express delivery, such Notice shall be deemed delivered when the recipient signsfor receipt;(3)If sent by registered mail with prepaid postage, such Notice shall be deemed delivered on the seventh day afterposting the mail; and(4)If sent by email, the email shall be deemed delivered when such email reaches the server system where therecipient’s email address is located.12.3During the term of this Agreement, either Party may change the information indicated in Clause 12.2 by sending awritten notice but shall notify other Parties in writing the changes in accordance with the provisions of Clause 12hereof no later than two (2) Business Days before such change.13Miscellaneous13.1The invalidity of any clause or clauses herein or other agreements or documents provided under or in relation to thisAgreement shall not affect the validity of the remaining clauses or parts of such clauses in this Agreement, such otheragreements or documents. If any clause or clauses in this Agreement or other agreements or documents become invalidor cause the invalidity of this Agreement, any other such agreements or documents, this Agreement, these agreementsand documents shall be interpreted as if they did not contain the invalid clauses.13.2The terms, provisions, contracts, commitments, agreements, obligations and conditions of this Agreement shall bevalid and binding to the successors and assigns of each Party.13.3If there is any inconsistency between any agreement reached by the Parties and the clauses herein upon or at the sametime with the signing of this Agreement, the provisions of the agreement reached by the Parties shall apply to thesematters as a supplemental part of this Agreement. No modification, alternation or modification to the terms of thisAgreement shall produce legal effect unless the authorized representative of each Party signs the written modificationagreement.13.4Either Party’s exercise or delay in exercising any right, power or privilege under this Agreement and the process of theParties’ dealing with matters shall not be deemed as a waiver; all or partial exercise of any right, power or privilegehereunder shall neither prevent the exercise of such right in any way or further exercise of such right, power orprivilege nor affect the exercise of any other right, power or privilege. The rights and remedies expressly set forth inthis Agreement are cumulative and do not exclude either19Party from having other rights or obtaining other remedies at law, in equality or otherwise.13.5This Agreement shall come into effect as of the date when it is signed by the authorized representatives of each Partyand affixed with their official seals (inclusive, “Effective Date”).13.6This Agreement is made in eleven copies, each of which shall be of the same legal effect. Party A and Party B hold two(2) copies each and the other Parties hold one (1) copy each. The other copies are kept in the Target Company or forundergoing related formalities.(The remainder of this page is intentionally left blank and the signing page follows)(Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[Noah Kekong Entity]/s/ [●]Authorized Representative (Seal/Signature)Name:[●](Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[Xinting Investment Entity]/s/ [●]Authorized Representative (Seal/Signature)Name: [●](Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[Nanchang Qingting Entity]/s/ [Actual Controller 1 of Party C]Authorized Representative (Seal/Signature)Name: [Actual Controller 1 of Party C](Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[United Win China Entity]/s/ [Actual Controller 1 of Party C]Authorized Representative (Seal/Signature)Name: [Actual Controller 1 of Party C](Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[Actual Controller 1 of Party C]/s/ [Actual Controller 1 of Party C](Signature and fingerprint)[Actual Controller 2 of Party C]/s/ [Actual Controller 2 of Party C](Signature and fingerprint)(Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[New World Qingdao Entity]/s/ [Actual Controller 1 of Party C]Authorized Representative (Seal/Signature)Name: [Actual Controller 1 of Party C](Signing page)In WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.[Shanghai Qingting Entity]/s/ [●]Authorized Representative (Seal/Signature)Name: [●]Schedule 1Basic Information of the Target CompanyUniform socialcredit code[●]Company name[Shanghai Qingting Entity]Registeredaddress[●]RegisteredcapitalRMB[●] millionPaid-up capitalRMB[●] millionDate ofestablishmentMay 30, 2013Business termMay 30, 2013 to May 29, 2033Business typeLimited liability company (legal person sole corporation invested or controlled by a natural person)LegalRepresentative[●]Chairman[●]Business scopeReal estate development and operation, property management, parking service, business consulting(except brokerage), sales of office supplies, jewelry, building materials, machinery equipment,electronic products and glasses (except contact lenses), warehouse management, maintenance ofmechanical and electrical equipment (except for special control), cleaning service, ticketing agencyservice, conference service, fitness service, import and export of goods and technologies, greeningmaintenance, hotel management [For items subject to approval by law, related business activities canbe performed only after they are approved by competent authorities] Equity pledge[Xinting Investment Entity] pledges 100% of the Equity held by it in the project company to [ChinaCinda Entity Shanghai Branch]. Schedule 2 Basic Information of the Target PropertyPart 1 Solely owned parts with real estate certificates[***]Part 2 Self-owned parts with real estate certificates[***]Part 3 Owners Shared Parts[***]Schedule 3 List of Delivered Items[***]Schedule 4 Calculation of Restructured Debts (Including Restructuring Grace Compensation)As of March 28, 2021, the balance of the Restructured Debts is RMB[•]. The restructuring grace compensation is calculatedon a daily basis. The compound interest of the Restructured Debts is accrued every [•] months, with a rate of [•]% per year.Restructuring grace compensation=balance of the Restructured Debt*number of capital occupation days*restructuring gracecompensation rate/360.Assume the Entrusted Payment Date is May 17, 2021. The corresponding trial calculation is shown as follows (For theavoidance of doubt, the table below is for the purpose of calculation as an example, and the actual payment amount shall becalculated according to the payment dates and the formula aforementioned):DeadlineBalance of the Restructured Debts (RMB)Daily rate of the compensation grace compensationMarch 28, 2021[●][●]Entrusted Payment DateRestructuring gracecompensation (RMB)Balance of theRestructured Debts(RMB)Total of repaid amount of the Restructured Debts (RMB)May 17, 2021[●][●][●]Date of the Second PaymentRestructuring grace compensation (RMB)Balance of the Restructured Debts (RMB)Total of repaid amount of the Remaining Restructured Debts (RMB)May 17, 2021[●][●][●]May 18, 2021[●][●][●]May 19, 2021[●][●][●]May 20, 2021[●][●][●]Schedule 5 Payment of Equity Transfer Consideration1.On the Entrusted Payment Date, Party A shall pay at the same time Party B the Initial Transfer Consideration,totaling RMB[●].2.Payment of the Remaining Transfer ConsiderationUpon the Initial Transfer Consideration is paid in accordance with the provisions of the preceding paragraph,the Remaining Transfer Consideration will total RMB[●], which shall be paid in the following two parts:(1)Party A shall, within [●] Business Days of completing the following matters, pay the remainingRMB[●], after deducting the following amount, as part of the Remaining Transfer Consideration (forthe avoidance of doubt, if the above matters are completed prior to the Closing Date, such amountshall be paid within ten (10) Business Days of the Closing Date):a.Cooperate and assist the Target Company in adjusting or revising and obtaining the newCommercial Housing Sales Plan Filing Certificate at the request of Party A.b.Release all judicial seizure and online filing such as property seizure of [●], and accountseizure/freezing of the Target Company.c.Release (1) the valid Distribution Service Contract and Sales Agency Contract signed by theTarget Company; and (2) and other agreements to be rescinded at the request of Party A; theTarget Company shall not be liable for any breach and/or indemnity in relation to the rescission ofthe above contracts; Party A shall have the right to deduct the corresponding amount if the TargetCompany assumes any liability so incurred.d.If SunnyWorld Parties have not assumed any default or indemnity liability under this Agreementor any other Transaction Document (including but not limited to non-fulfillment of any obligationor breach of any statements, warranties or commitments), Party A shall have the right to deductfrom the Remaining Transfer Consideration the amount in relation to the breach of thecorresponding indemnity liability.(2)Party A shall, within ten Business Days of the completion of the following matters, pay the remainingRMB[●], after deducting the following amount, as part of the Remaining Transfer Consideration (forthe avoidance of doubt, if the above matters are completed prior to the Closing Date, such amountshall be paid within ten (10) Business Days of the Closing Date):a.All the existing Pending Lawsuits (as defined below) have been completed and executed, in whichcase Party A shall have the right todeduct the expenses or compensation ultimately borne by the Target Company due to the existingPending Lawsuits or the lawsuits or disputes arising from other pre-closing reasons.b.The Agreement 2 to Change the Parties to Shenhong International Plaza Lease Contract and theagreements in relation to such lease (if any) are rescinded and the Target Company shall not beliable for any breach of contract and/or compensation for the cancellation of the foregoingcontract. Party A shall have the right to deduct the corresponding amount if the Target Companybears any liability arising therefrom.Then, the Parties will collaborate with each other, sign necessary agreements and go through relatedformalities (including tax formalities, etc.)For the avoidance of doubt, if the total deductible items calculated in accordance with the provisions of thisClause, or the sum of all deductible items under Paragraphs (1) and (2) of this Clause herein exceed RMB[●],the unpaid Transfer Consideration will not be paid. For the exceeded amount, SunnyWorld Parties shallindemnify and hold harmless the Target Company from all such amount.Annex 1Definitions1.“Beijing Time” means the time based on the local astronomical time in Beijing, China or of the 8th Time Zone;2.For the purpose of this Agreement, “Force Majeure Events” means any events that arise from any unforeseeable,unavoidable and unconquerable objective circumstances, including but not limited to earthquakes, volcanic eruptions,lightning strokes, natural fires, floods, tsunamis, typhoons, explosions, terrorist attacks, wars, strikes, riots, epidemics,government actions, major changes in international financial markets, changes in laws, regulations and policies or anyother causes beyond the reasonable control of the affected party;3.“Industry and Commerce Department” means the State Administration for Market Regulation of China and itsauthorized local agencies, or other government departments designated under applicable laws from time to time toprocess company registration and change filing formalities and issue business licenses;4.“Liabilities” means all and any debts, losses, taxes, damages, adverse claims, encumbrances, liabilities and obligationsof whatever nature, kind or type, whether cumulative or fixed, absolute or contingent, due or unexpired, determined ordeterminable, direct or indirect, claimed or unclaimed, liquidated or unliquidated, or based on contracts, torts, strictliabilities or other reasons, including all costs and expenses incurred in connection with the foregoing, and shall includebut not limited to liabilities arising under any applicable laws, government actions or directives and under any contracts;5.“Calendar Day” means the time or time measuring unit between 00:01 and 24:00 of a given day based on Beijing time;6.“Business Day” means any calendar day which is not a Saturday, Sunday or a statutory public holiday of China whenthe commercial banks in China are normally open for business;7.“Consultants” means, with respect to any Person, such Person’s agents, accountants, attorneys, financial consultants,other professional consultants and their assistants;8.“Affiliate” means, (i) with respect to any particular natural person, such natural person’s spouse, child, grandchild orparent, a trust established primarily for the benefit of the foregoing Persons or any Person controlled by such naturalperson or any of the foregoing Persons; and (ii) with respect to any particular non-natural person, any Person, whichdirectly or indirectly controls such particular person or is controlled by such person or is under common control withsuch person. The term “Affiliated” shall have the meaning associated with the foregoing;9.“Closing Date” shall have the meaning assigned to such term in Clause 3.5.1 of this Agreement;10.“Entrusted Payment Date” shall have the meaning assigned to such term in Clause 3.3.1 of this Agreement;11.“Date of the Second Payment” shall have the meaning assigned to such term in Clause 3.4.1 of this Agreement;12.“Conditions Precedent” means all conditions precedent set forth in Clause 3.1.1 of this Agreement;13.“Transaction Documents” shall include this Agreement and other relevant agreements additionally signed by all Partieshereto for the purpose of cooperation, including but not limited to the Subsidiary Agreement to this Agreement andconfirmation letters of Cinda Shanghai Branch;14.“Target Equity” means the 100% Equity of the Target Company held by Party B as of the Signing Date of thisAgreement;15.The information of the Target Company is shown in Schedule 1 hereto in detail;16.The information of the Target Property and the Project Plot is indicated in Schedule 2 in detail;17.“Warranties of Party B and SunnyWorld Parties” means the representations commitments and undertakings made byParty B and SunnyWorld Parties under this Agreement, including but not limited to those made in Clause 4.1, Clause 4.2and Annex 2;18.“Proposed Transaction” shall have the meaning assigned to such term in Clause (D) of the Whereas clauses hereof;19.“Approval” means any approval, consent, permit, permission, charter, recognition, registration, filing, resolution, order,declaration or amnesty;20.“Signing Date of this Agreement” means the date on which the Parties listed at the beginning of this Agreement signthis Agreement;21.“Encumbrance” shall include but not limited to:(a)any form of mortgage, pledge, lien, burden, easement, right of way, covenant, other third party right, retention ofright, right of first refusal, right of pre-emption, any right or interest of land, or other restrictive right;(b)any form of judicial seizure, freezing, administrative punishment or other liability restriction over any right or theexercise of such right;(c)any arrangement making any right subordinate to any third party right;(d)any right of set-off under any contract;(e)any unpaid demolition compensation payable to the demolition party due to land acquisition; and(f)Any contractor’s lien or other liens on property obtained by operation of law;22.“RMB” means the legal currency of China;23.“Person” means any natural person, corporation, partnership, limited liability partnership, joint venture, limited liabilitycompany, firm, trust, federation, association, government agency (including government authorities) or any other entityacting as an individual, trustee or in any other capacity.24.“Applicable Laws” means, with respect to any Person, any laws, regulations, administrative regulations or departmentrules, directives, notices, treaties, judgments, decree or order that is issued by any government authorities or regulatoryorgan and applies to such Person;25.“Taxes” refer to taxes, levies, charges, fees or other taxes levied in China, including income taxes, corporate incometaxes, interest taxes, payroll taxes, property taxes, any forms of value-added taxes, asset taxes, stamp duties, withholdingtaxes, charges, fees, duties and exercise taxes, as well as interests, penalties or other liabilities in relation to thecollection, non-payment or default of such taxes; and in general, any taxes, levies, taxes, fees, charges or any amountpayable to tax authorities, customs, financial authorities or other government authorities or agencies, groups,organizations or entities authorized by such government authorities;26.“Delivery” shall have the meaning assigned to such term in Clause 12.2 of this Agreement;27.“Losses” means all direct and indirect losses, including but not limited: direct property damage; breach of contractualliability, liability and expenses (including legal costs, expert and consultant fees, charges, expenses, litigation,arbitration, legal proceedings, claims and demands) and anticipated benefits, also including reasonable costs paid forconcluding transaction documents;28.“License” means any license, permit, registration, certificate, consent, approval, confirmation, filing and/orauthorization issued by any government department or authority (if any);29.“Debts” means, with respect to any Person, (i) such Person’s obligation in relation to borrowing; (ii) the price at whichsuch Person purchases all or part of the real estate or other property, or all payable or any obligation due by such Personin relation to the costs of obtaining services or building or rebuilding the real estate or other assets; (iii) any financiallease obligation; (iv) such Person’s obligation, whether defined or contingent, to a bank or any other Person in respect ofamounts paid or payable under a standby letter of credit; (v) any guarantee for a debt formed in relation to the borrowingby another person (of a type rather than that of this definition), an obligation, whether defined or contingent, anyobligation for refunding the deposit paid to such Person; (vi) any obligation to pay any accrued interest; (vii) any otherinterest-bearing “similar debt” obligations, including but not limited to any bank debts and notes payable; (viii) anyprepayment fees, penalties or other consequential obligations incurred before, on or upon the expiry of the foregoingdebts; and (ix) other obligations as defined in China’s Accounting Standards. Such money payment obligations includeactual, contingent, conditional, controversial or other money payment obligations;30.“China” refers to the People’s Republic of China and, for the purpose of this Agreement, excludes Hong Kong SpecialAdministrative Region, Macao Special Administrative Region and Taiwan Province;31.“Material Adverse Effect” means, with respect to any Person, any material adverse change, event or effect that may beproduced on the financial conditions, business, property, management, assets, liabilities (including contingent liabilities)or operation results of such Person or its Affiliates; with respect to the Target Property, any material adverse change,event or effect that may be produced on the Target Property or any of its parts or the development and physical status orliabilities (including contingent liabilities) associated therewith;32.“Organizational Document” means, with respect to any Person, the memorandum of association, articles ofassociation, shareholder agreement, sponsor agreement, joint venture contract, cooperation contract, rules fororganization establishment and procedure, rules, Registration Certificate, Certificate of Incorporation, Business License,Approval Certificate or any other agreement, certificate or document, or any other document under which such Person isestablished or organized (in part or in whole), and that applies to the operation of such Person’s internal affairs.(The remainder of this page is intentionally left blank)39Annex 2Further Representations and WarrantiesParty B hereby makes further representations and warranties regarding the following matters:1.Party B is legally registered as a shareholder of the Target Company and is the legal owner of the Target Equity. Exceptfor pledging the Target Equity to Cinda Shanghai Branch, Party B has not set any encumbrances prohibiting orrestricting the transfer of the Target equity.2. Party B has neither sold, transferred or otherwise disposed of the Target Equity to any Person other than Party A, norentered into any agreement or otherwise undertaken any obligation in any way to sell, transfer or otherwise dispose ofthe Target Equity to any Person other than Party A. And Party B has not entered into any agreement or otherwiseundertaken any obligation in any way to set any encumbrance on the Target Equity for the benefit of any other Party.SunnyWorld Parties hereby make further representations and warranties regarding the following matters:1.Proposed Transaction1.1The is no material defect in fact or in law that should be disclosed but have not been disclosed in relation to theTarget Equity.1.2There is no circumstance under which any Person has the right to request to place, convert, issue, or otherwisesell any Equity or other securities pursuant to any option or any other agreement, thereby having any right to theTarget Equity or may cause the Target Equity to be diluted.1.3Except for the right to repurchase the Equity of the Target Company enjoyed by Shanghai Vanke Enterprise Co.,Ltd. (“Shanghai Vanke”), there is no circumstance under which any Person has the right to request thepurchase of the Target Equity pursuant to any right or agreement.1.4There is no challenge, penalty notice or lawsuit brought by any government authorities against any future sale,assignment, transfer or otherwise disposal of the Target Equity, and to the best knowledge of SunnyWorldParties, there is no possibility for any future sale, assignment, transfer or disposal of the Target Equity bygovernment authorities.2.Target Company2.1The Target Company was legally and validly established through the new division of the original [ShanghaiVantone Entity] (“Shanghai Vantone”); the new40division of Shanghai Vantone has been fully completed according to legal procedures; the registered capital ofthe Target Company has been paid off in accordance with the law; and there is no capital withdrawal in anyactual or disguised form.2.2The Target Company is free of any unfulfilled liabilities or obligations (including but not limited to any unpaidland transfer fees, project supporting fees, front-end charges, land value-added taxes, etc.) incurred on or beforethe division of Shanghai Vantone and to be fulfilled by the Target Company; the Target Company has no needto assume in any way any liabilities (including but not limited to joint and several liabilities set forth underrelated laws and regulations) for and is not adversely affected by the division of Shanghai Vantone.2.3All Organizational Documents of the Target Company are valid; the terms of these Organizational Documentsare binding to and effectively implemented by the signatories hereto and all signatories abide by the terms ofthese Organizational Documents. No Person has given any reason for the cancellation, circumvention or denialof any of these Organizational Documents or given any notice of termination, or otherwise proposed toterminate any of these Organizational Documents.2.4The existing valid articles of association of the Target Company are the latest articles of association of theTarget Company with the Industry and Commerce Department and are true, accurate, complete and notmisleading in any respect.2.5The Target Company validly exists and is free of any circumstance that causes the termination, dissolution,bankruptcy, reorganization upon bankruptcy, trusteeship, etc. that may affect the legal existence and normaloperation of the Target Company. The successive changes of the Target Company since the date of itsincorporation have been in compliance with the applicable laws and all approvals from governmentalauthorities required to be obtained, and the registration and/or filing procedures in accordance with the law havebeen obtained.2.6The Target Company has complied with applicable laws on all major events. The Target Company hasundergone all necessary procedures such as application, filing and registration in relation to related business itoperates or intends to operate and obtained all necessary certificates, licenses, approvals, permits, franchiserights, and other documents. And the procedures aforementioned are free of any defects and remain valid inaccordance with the law.2.7The Target Company does not have any subsidiaries, branches or any operating or non-operating branches. TheTarget Company has not entered into any long-term investment or cooperation agreement with any Person topurchase or intend to41purchase or have any obligation to purchase any Equity, shares or other property interests from such Person, orto invest in any way in other entities.2.8The statutory books filed by the Target Company with the Industry and Commerce Department have beenproperly updated to record the latest data, and the information shown by such data has covered all informationof the Target Company that is true, complete, free of omission or not misleading in related fields. Except for thecircumstances consented to by Party A, the Target Company has never received any application or request torevise the register of shareholders or set pledges or other encumbrance on any of Target Equity of the TargetCompany.2.9The Target Company does not have any ongoing related transactions with any Affiliate, except those disclosedby SunnyWorld Parties.2.10Except for the Target Property, the Target Company does not hold any other plots, properties or other projects.2.11Except for the Target Property and the [●] that is used to connect the plots 09 and 04 of Hongqiao BusinessDistrict, as public green spaces, the Target Company does not fulfill any obligation to manage and maintain anyother plots, assets, equipment, parts, spaces or other projects.2.12As of the Money Transfer Date, all the credits and debts of the Affiliates of the Target Company have been fullycleared and related written agreement have been signed (unless the prior consent of Party A is obtained) so thatthe Target Company does not have any receivables and payable in relation to such Affiliates and the TargetCompany will not suffer from any losses or bear any indemnity liabilities due to the creation, existence orliquidation of its credits and debts with respect to the Affiliates, including but not limited to taxes and fees (ifany).3.Accounting Records3.1All the account books of the Target Company are prepared in a manner that conforms to the requirements ofapplicable laws and generally accepted accounting standards, practices and conventions, truly and fairly presentthe assets, liabilities and operating conditions of the Target Company and its profits or losses for thecorresponding accounting periods, and make full disclosure of all liabilities of the Target Company andprovisions or reservations as appropriate according to the requirements of applicable laws, generally acceptedaccounting standards, practices and conventions.3.2No material adverse change has occurred to the financial conditions of the business of the Target Company andno fact or event has occurred to the financial conditions of the Target Company due to SunnyWorld Parties’deliberation or gross negligence.423.3The accounts of the Target Company have disclosed all the adverse effects of any abnormal, exceptional,unusual or contingent items.3.4Except for (i) the liabilities disclosed in the audited or unaudited financial report; (ii) the liabilities of the TargetCompany that may arise due to the Existing Pending Lawsuit; and (iii) the obligations that are not required tobe recognized as Debts under applicable laws of China and generally accepted practices and conventions, theTarget Company has no other liabilities (whether actual, contingent, conditional, controversial or otherwise).3.5Any obligations of the debtor contained in the books of the Target Company will not be exempted or canceled.4.Legal Affairs4.1Except for the ongoing cases of [●] and [●] (“Existing Pending Litigation”), there is no pending, unfulfilledbut still valid or anticipated investigation, inquiry, order, decision or award or any notice or othercommunication requesting action or omission that is conducted or issued by any court, tribunal, arbitrationinstitution or regulatory organ against SunnyWorld Parties and the Target Company and that will produce aMaterial Adverse Effect on SunnyWorld Parties and the Target Company;4.2The Target Company has obtained all necessary certificates and licenses necessary for its business activities.There are no pending and/or anticipated investigations, inquiries or other proceedings that may cause thesuspension, cancellation, modification or revocation of such certificates and licenses;4.3None of the directors, agents or employees of SunnyWorld Parties has used the property of the Target Companyin any form for the benefit of any Person in violation of the applicable laws of China;4.4Neither SunnyWorld Parties nor the Target Company is insolvent or unable to repay the due liabilities;4.5No circumstance that causes the dissolution of SunnyWorld Parties and the Target Company or the initiation ofdissolution procedures in SunnyWorld Parties and the Target Company has occurred or can been anticipated tooccur; and4.6No circumstance that has occurred or can be anticipated to cause SunnyWorld Parties or the Target Company tobe taken over and to initiate the takeover procedure.4.7There is no directive from the competent administrative authorities and judicial authorities or written order fromany court that is issued to the Target Company and/or involves the operation of the leasing business of theTarget Company and that has been implemented, will take effect or has taken effect.435.Assets5.1The Target Company is entitled to absolute titles, use rights and/or all the other related rights in relation to allassets and credits presented by the Target Company in its financial report, whether audited or unaudited, ordeclared by the Target Company to be of its own (unless such assets or credits are disclosed of or realized in thenormal and usual business practice).5.2Except for the existing mortgage, the existing seizure (the judicial seizure of [●] by the People’s Court ofMinhang District, Shanghai) and the sale restrictions over the Target Property disclosed by the Target Company(i.e. (a) the part of the Target Property with a floor area of [●] m2 under [●] shall be retained and self-owned;and (b) [●] in the Target Property shall only be sold to enterprises), no other assets or credits of the TargetCompany are subject to any option, acquisition right, assignment, mortgage, warranty, lien or any other form ofencumbrance.5.3The Target Company has covered all risks insurance for its assets and is free of any pending and unsettledinsurance claims.6.Business and Contractual Arrangements6.1The Target Company has not made or signed any commitments, contracts or arrangements that are beyond theusual business course, abnormal and long-term, will cause it to suffer losses, is fulfilled in a way of normalcommercial transactions, or will restrict its usual business operations.6.2The Target Company has not made or signed any agreement or arrangement that is not consistent with itsnormal business scope and that involves wealth management products, trust plans, financial derivatives,gambling arrangement, repurchase arrangement, profit guarantee arrangement and agreement controlarrangement.6.3The Target Company has not made any investment (including Equity investment) or other capital expenditurecommitments, whether actual or contingent.6.4The Target Company has not entered into any transaction beyond its normal and usual business scope, notassumed any liability that goes beyond its normal and usual business scope and will cause any adverse effect onthe Target Company or the Proposed Transaction (including contingent liability), and not made any paymentthat goes beyond its normal and usual business scope and will cause any adverse effect on the Target Companyor the Proposed Transaction.6.5Except the unlimited joint and several liability guarantee (existing guarantee) provided by the Target Companyto Shanghai Vanke in relation to the rights of Shanghai Vanke under the Equity Acquisition Agreement madeand entered into by and between Shanghai Vanke and Nanchang Qingting and its supplemental44agreements, the Target Company has not made or attempted to make or is not obliged to make any form ofguarantee (including but not limited to general liability, joint and several liability and counter-guarantee),indemnity or other guarantees. The Target Company has not made or attempted to make or is obliged to makearrangement to dispose of any of its material assets (including but not limited to the project plot) or attach anyencumbrances thereon (other than existing mortgage).6.6The signing and performance of the contract or agreement signed by the Target Company as a party thereto arein conformity with the provisions of applicable laws and is free of either of the following circumstances: (i) notlicensed (if required); (ii) not in conformity with the qualification requirements (if any); (iii) invalid; (iv) maybe changed or canceled; (v) ineffective, etc.6.7All contracts, agreements, warranties or related documents signed and being performed by the Target Companyas a party thereto have been disclosed to Party A and been included in Schedule 3 of this Agreement and theSubsidiary Agreement to this Agreement.6.8The Target Company has not issued any valid power of attorney or any other authorization, whether explicitlyor implicitly, to enable any Person to sign any contract, agreement or undertake any obligation or engage in anyact for and on behalf of the Target Company.6.9The execution and performance of this Agreement will not result in the termination or invalidity or cancellationof any contract or agreement to which the Target Company is a party and that has a material effect on the TargetCompany or the Proposed Transaction, or cause the Target Company to assume any liability for any othersignatory in such contract or agreement, or lead to the termination, invalidity or cancellation of the liability ofany party to such contract or agreement.6.10The execution of, compliance with or performance of this Agreement will not and may not cause the TargetCompany to be deprived of any powers, rights, interests or licenses that it is entitled to and that produce amaterial effect on the Target Company or the Proposed Transaction.7.Taxes7.1The Target has not violated any applicable tax-related laws and there is no circumstance the Target Company isor may be labile for taxes that have not been disclosed in writing.7.2The Target Company has paid all taxes as required by applicable laws within the period specified by applicablelaws.457.3The Target Company has properly submitted to all tax-related government authorities all tax returns, statementsand data required to be made or provided for the purposes of taxes and the foregoing items have been made orsubmitted as appropriate within the required period, are accurate, true, complete and not expired on the date ofsubmission and the tax-related government authorities have no objection to the taxes and related data declared.There is no possibility that the tax-related government authorities will make any objection to any of the abovetaxes declared or the status of the supporting documents submitted and none of the above items will or mayresult in any dispute between the Target Company and any tax-related government authorities or cause anyadverse effect on the Target Company. The account of the Target Company has accurately reflected the taxstatus of the Target Company and has made adequate provisions for all taxes payable.7.4The Target Company has paid, withheld, deducted or explained all taxes, including interim taxes, and has paid,withheld, deducted or explained such taxes to related government authorities upon their expiry.7.5The Target Company has never delayed nor will delay taxes on the actual or potential taxes imposed by relatedgovernment authorities on any matters of the Target Company.8.Employees8.1Except [●], [●], [●] and [●], the Target Company neither has any other employees who have signed laborcontracts or have labor relations with the Target Company, nor has any employee co-investment plans oremployees’ shareholding plans or any other employee-related plans that may cause any obstacles or adverseeffects on the closing, Proposed Transaction and/or Transaction Documents in relation to the Target Equity.8.2The previous dismissal of employees and the termination of labor relations in the Target Company are legal andcompliant and there is no outstanding salaries, social insurances or provident funds that should be paid but havenot been paid by the Target Company and no circumstance where any employees or former employees of theTarget Company may claim compensation from the Target Company.9.Intellectual Property Rights9.1The Company neither own nor authorize the use or actual use of any intellectual property rights.9.2The Target Company has not infringed any Person’s intellectual property rights. No Person has brought judicialproceedings against the Target Company to judicial authorities, including but not limited to courts,procuratorates, public46security organs and arbitration tribunals, claiming that the Target Company has infringed or may infringe anyintellectual property rights that such Person is authorized to use.9.3The Target Company has not filed any judicial proceedings to judicial authorities, including but not limited tocourts, procuratorates, public security organs and arbitration tribunals, claiming that any Person infringes ormay infringe any intellectual property rights that the Target Company is authorized to use.10.Environmental Protection10.1The Target Company has never violated any applicable laws or requirements related to environmentalprotection and has obtained all administrative licenses in relation to environmental protection.10.2None of the Target Company, SunnyWorld Parties and any of their Affiliates has received any written noticeregarding any civil, criminal or administrative proceedings, regulation, indemnity, investigation or otherproceedings or charges related to applicable laws in relation to environmental protection.10.3None of the project plot, underground or underground spaces of the project plot, spaces of the project plot underthe ground, and areas around the project have involved any environmental pollution factors that may affect thedevelopment, construction, operation or sales of the project plot according to the purposes in relation to the landuse right specified in the Land Transfer Contract or those required to be controlled.(The remainder of this page is intentionally left blank)47Annex 3Pre-Closing CommitmentsDuring the continuous period from the Signing Date of this Agreement (inclusive) to the Closing Date (inclusive),SunnyWorld Parties will procure and ensure that the Target Company (Party B will cooperate with SunnyWorld Parties tofulfil such commitments):1will continue to carry out its daily business in a usual and customary manner and will neither do any act that wouldproduce any adverse effect on its business or assets, nor do or license others to do any omission that would produce anyadverse effect on its business or assets;2will conduct all transactions with the goal of meeting the normal operation needs of the Target Company on the basis ofarm’s length;3will, upon receipt of any prior reasonable notice, allow Party A and its representatives to have full rights to access thepremises of the Target Company and the Target Property, check the books, records, accounts and all other relatedinformation and the conditions of the Target Property, but shall not interfere with the normal operations of the TargetCompany;4will take all reasonable measures to maintain and protect the assets of the Target Company;5will not take any action hindering or delaying the Proposed Transaction;6will not distribute or pay any dividends or distribute any profits in any other way;7except for the purpose of carrying out the Proposed Transaction and with the prior written consent of Party A or unlessotherwise agreed on by the Parties, will neither incur any costs, expenses, expenditure or debts nor borrow any loans,whether from a bank or from any third party;8will not borrow any loans or accept any advance funds, or provide any loans or advance funds to any Person (unlessotherwise agreed in this Agreement or by Party A), or set according to agreements any encumbrances other than theexisting mortgage on the assets of the Target Company (including the Target Property);9will not take any action that involves major obligations or may cause any material change in its business scope ornature or a substantial decrease in the value of the Target Company (including signing any contract with a singleamount exceeding RMB[●] or accumulative amount exceeding RMB[●] and providing guarantees, indemnities,warranties and commitments, etc. to any third parties, or assuming, modifying or canceling any obligations);10will not add any debt to any third party;4811will not enter into, modify or rescind any employment agreement or labor contract with any Person, or establish orrescind any labor/employment relations with such Person;12will not change or terminate any existing contract to which it is a party and that substantially affects the nature or scopeof its business;13will not acquire or dispose of or agree to acquire or dispose of any business or assets;14will not change any of its accounting practices or policies;15will not do any act or licensed omission that will violate the warranties of Party B and SunnyWorld Parties thatrestatements will be made on the Closing Date by reference to the facts and circumstances that will exist at that time orcause the inconsistency with this Agreement. In the case of any such circumstance, the undertaking party shall give awritten notice to Party A immediately;16will not change its registered capital;17will not issue bonds (or agree to issue bonds);18will not change in any form any Organizational Documents of the Target Company, except otherwise provided in lawsor this Agreement;19will not enter into any arrangement, contract or agreement with any shareholder or director of the undertaking party orany Affiliate of such shareholder or director;20will not exempt, compromise on or cancel any amount (if any) owed by the debtor contained in the account books ofthe Target Company, except with the prior consent of Party A;21will not lend any money to any shareholder or director of the undertaking party, any Affiliate of such shareholder ordirector, not provide guarantees such as mortgage with any asset for the benefit of any shareholder or director of theundertaking party or any Affiliate of such shareholder or director, and not provide financial assistance to any Affiliateof such shareholder or director;22will not modify any contract or do any act or allow any omission to cause the Target Company to be deemed to havewaived any legal rights;23must take all reasonable actions or avoid taking any certain actions to ensure that there will be no material adversechange to the operation and financial conditions of the Target Company; and24shall not make external payments without the prior written consent of Party A except for general business purposes.25will not initiate, compromise on or waive any claim, legal action, lawsuit, prosecution, impeaching, investigation,audit, inquiry or any other proceeding, or admit or allow any of its representatives to admit any liability.4926with respect to the Target Property:(1)shall not enter into, change or terminate any lease agreement or other commitment;(2)shall not transfer or mortgage (except for the existing mortgage), or set any easement or other third party rightson the Target Property, or sign any agreement in relation to the foregoing.27during the continuous period from the Signing Date of this Agreement (inclusive) to the Closing Date (inclusive), inrelation to the Target Company on the whole:(1)shall be subject to the unanimous consent of all Parties in relation to all costs, expenses or expenditure incurredby the Target Company;(2)has encountered no material adverse change occurring its financial conditions or no event or fact that causes ormay cause any material adverse change to its financial conditions;(3)will always operate its business as an ongoing business in the usual way and has encountered no material adversechange to the nature, scope or mode of its business;(4)will not declare or pay any dividends or any other forms of distributions to any of its shareholders;(5)will not refund any payment to the undertaking party or any Affiliate of the undertaking party, regardless ofwhether such payment becomes expired or not, except with the prior consent of Party A;(6)has neither passed any resolution that may cause a significant decrease in its net asset value nor taken any actionthat may cause a significant decrease in its net asset value during its business operation.(The remainder of this page is intentionally left blank)50Annex 4Form of Equity Transfer AgreementThis Agreement is made and entered into by and between the following Parties on the _____month of ____, _____ inShanghai.Transferor: [Xinting Investment Entity] (hereinafter referred to as “Party A”)Domicile: [●]Transferee: [ ] (hereinafter referred to as “Party B”)Domicile: [ ][Shanghai Qingting Entity] (hereinafter referred to as the “Target Company”) has a registered capital of RMB[●] million, inwhich Party A contributes RMB[●] million, 100% of the registered capital of the Target Company. In accordance with theprovisions of relevant laws and regulations, the Parties hereto have concluded the following clauses through friendlyconsultation.Article 1 Equity Transfer Object and Transfer Price(1)Party A shall transfer [ ]% of the Equity of the Target Company it holds to Party B at the price of RMB[ ].(2)Other rights attached to the Equity shall be transferred together with the Equity transferred.(3)Party B shall pay Party A the Equity Transfer Price in full amount. The specific payment terms and deadline shall beagreed on by both Parties through further negotiation.(4)Both Parties shall jointly undergo the change registration of the Equity for the Target Company with the Industry andCommerce Department.Article 2 Commitments and WarrantiesParty A guarantees that the Equity transferred to Party B under Article 1 hereof is legally owned by Party A and Party A hasthe full and valid right to dispose of the Equity of the Target Company. Party A further guarantees that the Equity it transfersis free of any pledge or other security rights and is not subject to recourse by any third party.Article 3 Default Liability51Where either Party violates this Agreement, it shall be liable for damages caused to the Non-Default Party.Article 4 Dispute ResolutionThis Agreement shall be governed by and interpreted under the laws of the People’s Republic of China.If any dispute, controversy or claim arising out of or in relation to this Agreement, including breach of contract, validity andtermination of this Agreement, fails to be resolved through friendly consultation within 20 Business Days after either Partyissues a dispute notice, such dispute, controversy or claim shall be submitted to Shanghai International Economic and TradeArbitration Commission for arbitration in Shanghai under then valid arbitration rules.Article 5 Miscellaneous1.This Agreement is made in six (6) copies. Each Party hereto holds two (2) and the Target Company holds two (2) forundergoing related formalities.2.This Agreement shall come into effect after it is duly signed by the Parties hereto.(The remainder of this Page is internationally left blank)52(Signing page)Party A:Transferor: [Xinting Investment Entity] (Seal)Managing Partner: [Cinda International Shanghai Entity] (Seal)53(Signing page)Party B:[ ] (Seal)Legal Representative/Authorized Agent: (Signature)Date:54Annex 5 Resignation Letters of the Directors, Supervisors and Senior ExecutivesResignation LetterTo: [Shanghai Qingting Entity]I, [●], hereby quit the legal representative and the chairman of the board of directors of [Shanghai Qingting Entity] (the“Company”).The Company neither owes any outstanding payments or reimbursements to me nor has any outstanding obligations to me. Iagree not to make any claims or other claims for rights against the Company at any time in relation to such resignation andany matters during my tenure as legal representative and chairman of the board of directors of the company.This Resignation Letter shall come into effect as of the Money Transfer Date under the SunnyWorld Center ProjectAcquisition Agreement as made and entered into by [Noah Kekong Entity], [Xinting Investment Entity], [NanchangQingting Entity], [United Win China Entity], [Shanghai Qingting Entity], [Actual Controller 1 of Party C] and [ActualController 2 of Party C].By: [●]Date: 55Resignation LetterTo: [Shanghai Qingting Entity]I, [●], hereby quit the director of [Shanghai Qingting Entity] (the “Company”).The Company neither owes any outstanding payments or reimbursements to me nor has any outstanding obligations to me. Iagree not to make any claims or other claims for rights against the Company at any time in relation to such resignation andany matters during my tenure as a director of the Company.This Resignation Letter shall come into effect as of the Money Transfer Date under the SunnyWorld Center ProjectAcquisition Agreement as made and entered into by [Noah Kekong Entity], [Xinting Investment Entity], [NanchangQingting Entity], [United Win China Entity], [Shanghai Qingting Entity], [Actual Controller 1 of Party C] and [ActualController 2 of Party C].By: [●]Date: 56Resignation LetterTo: [Shanghai Qingting Entity]I, [●], hereby quit the director of [Shanghai Qingting Entity] (the “Company”).The Company neither owes any outstanding payments or reimbursements to me nor has any outstanding obligations to me. Iagree not to make any claims or other claims for rights against the Company at any time in relation to such resignation andany matters during my tenure as a director of the Company.This Resignation Letter shall come into effect as of the Money Transfer Date under the SunnyWorld Center ProjectAcquisition Agreement as made and entered into by [Noah Kekong Entity], [Xinting Investment Entity], [NanchangQingting Entity], [United Win China Entity], [Shanghai Qingting Entity], [Actual Controller 1 of Party C] and [ActualController 2 of Party C].By: [●]Date: 57Resignation LetterTo: [Shanghai Qingting Entity]I, [●], hereby quit the director of [Shanghai Qingting Entity] (the “Company”).The Company neither owes any outstanding payments or reimbursements to me nor has any outstanding obligations to me. Iagree not to make any claims or other claims for rights against the Company at any time in relation to such resignation andany matters during my tenure as a director of the Company.This Resignation Letter shall come into effect as of the Money Transfer Date under the Shanghai Hongqiao SunnyWorldCenter Project Acquisition Agreement as made and entered into by [Noah Kekong Entity], [Xinting Investment Entity],[Nanchang Qingting Entity], [United Win China Entity], [Shanghai Qingting Entity], [Actual Controller 1 of Party C] and[Actual Controller 2 of Party C].By: [●]Date: 58Annex 6Termination ContractThis Termination Contract (hereinafter referred to as “This Contract”) is made and entered into by and among the followingParties on the _____ day of _____, 2021 in Shanghai.Mortgagee: [Xinting Investment Entity] (“Xinting Investment”), with [Cinda International Shanghai Entity] as itsManaging Partner and its registered office at [●];Mortgagor: [Shanghai Qingting Entity] (“Shanghai Qingting”), with its registered office at [●];Debtor: [Nanchang Qingting Entity] (“Nanchang Qingting”),with its registered office at [●].(Hereinafter, also individually referred to as “Party” and jointly referred to as “Parties”)Whereas:1.The Parties hereto signed the Equity Repurchase Agreement numbered [●] (“Master Agreement”) on June 21,2017, specifying that Nanchang Qingting shall have the obligation to pay the equity maintenance fees to XintingInvestment, and will, under certain conditions, purchase all Equity of Shanghai Qingting from Xinting Investment.2.The Parties hereto signed the Mortgage Contract numbered [●] (the “Mortgage Contract”) on June 23, 2017. Underthe Mortgage Contract, Shanghai Qingting shall, with its SunnyWorld Center Project as collateral, providemortgage guarantees for Xinting Investment in relation to the Equity repurchase and Equity maintenance feespayment obligations to be fulfilled by Nanchang Qingting to Xinting Investment and in relation to the creditsformed on the basis of other liabilities, representations and warranties and commitments.Through friendly negotiation, all Parties hereto agree to rescind the Mortgage Contract under this Contract and agree on thefollowing matters regarding the rescission of the Mortgage Contract.59Article 1 Rescission and Termination1.1.The Mortgage Contract signed by all Parties (Contract No.: [●]) shall be rescinded from the signing date of thisContract.1.2.Each Party acknowledges that the Mortgage Contract will be terminated from the signing date of this Contractand will no longer be legally binding to the Parties. Xinting Investment shall not make any claims for rightsagainst Shanghai Qingting and/or the SunnyWorld Center Project under the Mortgage Contract.Article 2 Commitments and Warranties2.1.Upon the signing of this Contract, all Parties are not required to continue the fulfillment of any responsibilitiesand obligations under the Mortgage Contract. Shanghai Qingting does not have any disputes or controversies inrelation to this Contract, the Mortgage Contract or related matters concerning the Mortgage Contract with otherParties.2.2.The signing of this Contract will not cause the creation of or increase in any obligation, liability, debt or burdenof Shanghai Qingting.2.3.Xinting Investment acknowledges that upon the signing of this Contract, Xinting Investment will not make anyclaims, demands, or claims for rights against Shanghai Qingting and/or the SunnyWorld Center Project under theMortgage Contract.Article 3 Effectiveness and Miscellaneous3.1Any amendment or waiver of any clause of this Contract shall be made in writing and shall be effective after it issigned and sealed by all Parties.3.2This Contract shall supersede any previous oral and written communications, negotiations, and commitments onmatters involved in this Contract.3.3This Contract is concluded under and governed by the laws of the People’s Republic of China. All disputesconcerning this Contract shall be governed by the people’s court where the SunnyWorld Center Project islocated.3.4This Contract shall come into effect after each Party signs and attach a seal on it. This Contract is made in six (6)copies, and each party holds two (2) copies, each of which shall have the same legal effect.(The remainder of this page is intentionally left blank)60(Signing page)Mortgagee: [Xinting Investment Entity]Managing Partner (Seal):61(Signing page)Mortgagor: [Shanghai Qingting Entity] (Seal)Legal Representative (Signature):62(Signing page)Debtor: [Nanchang Qingting SunnyWorld Entity] (Seal)Legal Representative (Signature):Date of Signing: _____day of _____, 2021 Exhibit 8.1List of Significant Consolidated Entities of Noah Holdings Limited*Name Date of Incorporation Place of Incorporation Percentage of OwnershipNoah Upright Fund Distribution Co., Ltd.(formerly known as Noah Upright (Shanghai)Fund Investment Consulting Co., Ltd.)November 18, 2003PRC100%Shanghai Noah Investment (Group) Co., Ltd.(formerly known as Shanghai Noah RongyaoInvestment Consulting Co., Ltd.)August 24, 2007PRC100%Shanghai Noah Financial Services Corp.April 18, 2008PRC100%Noah Insurance (Hong Kong) LimitedJanuary 3, 2011Hong Kong100%Noah Holdings (Hong Kong) LimitedSeptember 1, 2011Hong Kong100%Gopher Capital GP LimitedMay 11, 2012Cayman Islands100%Kunshan Noah Rongyao Investment ManagementCo., Ltd.December 2, 2015PRC100%Shanghai Noah Chuangying EnterpriseManagement Co., Ltd.December 14, 2015PRC100%Wuhu Fangtiao Technology Co., Ltd.November 28, 2019PRC100%Shanghai Nuohong Real Estate Co., Ltd.May 30, 2013PRC100%Noah Rongyitong (Wuhu) Microloan Co., Ltd.August 13, 2013PRC100%**Joy Triple Star Holdings LimitedJanuary 12, 2018British Virgin Islands100%Joy Paradise LimitedMarch 29, 2018British Virgin Islands100%Shanghai Glory Information Technology Co., Ltd.March 2, 2011PRC100%Joy Bright Management LimitedJune 11, 2013British Virgin Islands100%Gopher US Management II, L.L.C.February 27, 2019United States100%ARK Trust (Hongkong) LimitedSeptember 15, 2014Hong Kong100%Noah International (Hong Kong) LimitedJanuary 7, 2015Hong Kong100%Noah Insurance Services, LLCFebruary 10, 2017United States100%Noah Holdings International LimitedOctober 11, 2016Cayman Islands100%Shanghai Noah Investment Management Co., Ltd.August 26, 2005PRCControlled under the Contractual ArrangementZigong Noah Financial Service Co., Ltd.October 22, 2012PRCControlled under the Contractual ArrangementGopher Asset Management Co., Ltd.February 9, 2012PRCControlled under the Contractual ArrangementWuhu Gopher Asset Management Co., Ltd.October 10, 2012PRCControlled under the Contractual ArrangementShanghai Gopher Asset Management Co., Ltd.December 14, 2012PRCControlled under theContractual ArrangementShanghai Gopher Massa Asset Management Co.,Ltd.June 29, 2015PRCControlled under theContractual Arrangement*Other consolidated entities of Noah Holdings Limited have been omitted from this list since, considered in the aggregate as a single entity, theywould not constitute a significant subsidiary.**Noah Rongyitong (Wuhu) Microloan Co., Ltd. was indirectly held as to 75% by our Company, and 25% by Noah Investment through theContractual Arrangements. Exhibit 12.1Certification by the Principal Executive OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002I,Jingbo Wang, certify that:1.I have reviewed this annual report on Form 20-F of Noah Holdings Limited (the “Company”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by theannual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internalcontrol over financial reporting.Date: April 6, 2022By:/s/ Jingbo WangName:Jingbo WangTitle:Chief Executive Officer Exhibit 12.2Certification by the Principal Financial OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002I,Qing Pan, certify that:1.I have reviewed this annual report on Form 20-F of Noah Holdings Limited (the “Company”);2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as definedin Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others withinthose entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by theannual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting;and5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internalcontrol over financial reporting.Date:April 6, 2022By:/s/ Qing PanName:Qing PanTitle:Chief Financial Officer Exhibit 13.1Certification by the Principal Executive OfficerPursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Noah Holdings Limited (the “Company”) on Form 20-F for the year ended December 31, 2021 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Jingbo Wang, Chief Executive Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: April 6, 2022By:/s/ Jingbo WangName:Jingbo WangTitle:Chief Executive Officer Exhibit 13.2Certification by the Principal Financial OfficerPursuant to Section 906 of the Sarbanes-Oxley Act of 2002In connection with the Annual Report of Noah Holdings Limited (the “Company”) on Form 20-F for the year ended December 31, 2021 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Qing Pan, Chief Financial Officer of the Company, certify,pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.Date: April 6, 2022By:/s/ Qing PanName:Qing PanTitle:Chief Financial Officer Exhibit 15.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-171541 and 333-222342 on Form S-8 of our reports dated March 30,2022, relating to the financial statements of Noah Holdings Limited (the “Company”) and the effectiveness of the Company’s internal control overfinancial reporting appearing in the Annual Report on Form 20-F of the Company for the year ended December 31, 2021./s/Deloitte Touche Tohmatsu Certified Public Accountants LLPShanghai, ChinaApril 6, 2022 北京 • 上海 • 深圳 • 广州 • 武汉 • 成都 • 重庆 • 青岛 • 杭州 • 南京 • 海口 • 东京 • 香港 • 伦敦 •纽约 • 洛杉矶 • 旧金山 • 阿拉木图Beijing • Shanghai • Shenzhen • Guangzhou • Wuhan • Chengdu • Chongqing • Qingdao •Hangzhou • Nanjing • Haikou • Tokyo • Hong Kong • London • New York • Los Angeles • SanFrancisco • AlmatyExhibit 15.2ToNoah Holdings LimitedBuilding 2, Changyang Vallye1687 Changyang Rd., Yangpu DistrictShanghai, China, 200090April 6, 2022Dear Sir/Madam:We consent to the reference to our firm under the headings of “Organizational Structure”, “Risk Factors” and “People’s Republic of China Taxation”in Noah Holdings Limited’s Annual Report on Form 20-F for year ended December 31, 2021 (the “Annual Report”), which will be filed with theSecurities and Exchange Commission (the “SEC”) in the month of April 2022. We also consent to the filing of this consent letter with the SEC as anexhibit to the Annual Report.In giving such consent, we do not hereby admit that we come within the category of persons whose consent is required under Section 7 of theSecurities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.Yours faithfully,/s/ Zhong Lun Law FirmZhong Lun Law Firm Exhibit 15.3Our refVSL/658613-000001/22936008v1Direct tel+852 3690 7513 E-mailVivian.Lee@maples.comNoah Holdings LimitedBuilding 2, 1687 Changyang RoadShanghai 200090People's Republic of China6 April 2022Dear Sirs and MadamsNoah Holdings LimitedWe have acted as legal advisers as to the laws of the Cayman Islands to Noah Holdings Limited, an exempted limited liability companyincorporated in the Cayman Islands (the “Company”), in connection with the filing by the Company with the United States Securities andExchange Commission (the “SEC”) of an annual report on Form 20-F for the year ended 31 December 2021 (“Form 20-F”).We hereby consent to the reference of our name under the heading “Item 3.D Risk Factors” in the Form 20-F, and we further consent to theincorporation by reference of the summary of our opinions under this heading into the Company’s registration statements on Form S-8 (FileNo. 333-171541) that was filed on 5 January 2011 and Form S-8 (File No. 333-222342) that was filed on 29 December 2017.We consent to the filing with the SEC of this consent letter as an exhibit to the Form 20-F. In giving such consent, we do not thereby admit thatwe come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the SecuritiesExchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.Yours faithfully/s/Maples and Calder (Hong Kong) LLP

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