Noah
Holdings, the Chinese wealth manager, has launched a $30 million share
repurchase program of its issued and outstanding American Depositary Shares.

Shares will
be repurchased from investors who are willing to sell over the next 12 months.

“The
proposed share repurchase may be made on the open market at prevailing market
prices in privately negotiated transactions, in block trades or otherwise, from
time to time, depending on market conditions,” said the Shanghai-based firm in
a statement.

Noah's board
of directors will review the share repurchase program periodically, and may
authorize adjustment of its terms and size.

There are
many reasons why a company decides to buy back its own shares. If it believes its share price is undervalued and much of its
stock is held by retail investors (who are more likely to sell their
shares than institutions), it may make a profit
when the markets rise. Likewise the reduction of publicly-traded shares means
its earnings per share increase for non-selling shareholders. Executive
compensation is frequently linked to earnings per share targets.

Noah did not immediately return calls for comment on the reasoning behind the share buy back.

Noah has around
600 relationship managers and distributes over-the-counter wealth management
products in China, including fixed income products, private equity funds and
securities investment funds.