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Noah Holdings Limited (NOAH) is in a position that major Western financial institutions such as Citigroup (C) and JP Morgan (JPM) want to be: servicing the higher net worth community in China.

Based in Shanghai, Noah Holdings is an asset management company that "engages in the distribution of OTC wealth management products to the high net worth population in China." With a profit margin of 28.48%, Noah Holdings obviously does this very well.

By contrast, JP Morgan has a profit margin of around 19%. The profit margin for Citigroup is 14.27%.

Since it looks like there might be corporate governance concerns cropping up again with Chinese stocks, it should be pointed out that there is a dividend income provided by Noah Holdings. As Jesper Medigan, manager of Asian income funds for the Mathews Group pointed out in an interview with the American Association of Individual Investors, no Chinese company found to be fraudulent was a dividend-paying stock.

Noah Holdings has a 2.79% yield, and the dividend income is provided for by very strong margins. While the profit margin is robust, so is the operating margin at 28.62% and the gross margin at 78.25%. Enhancing the cash flow is a debt-to-equity ratio of 0.00.

A major development earlier this year for Noah Holdings was its approval to distribute mutual funds. For the year, earnings-per-share growth is up 82.57%. This is expected to continue next year at a 33.33% rate. At 0.50, the price-to-earnings growth (PEG) ratio is very bullish. The PEG for Citigroup is 0.84; JP Morgan's is 1.

China posted a trade surplus of more than $30 billion for the month of June. The country has more than $3 trillion in foreign reserves. While growth is slowing, obviously someone is still making money with signs of recovery in real estate, among other sectors. Based in the People's Republic, Noah Holdings has an intrinsic advantage over wealth management companies based half-way around the world.

Source: Noah Holdings Is A Dividend-Paying Stock Growing With China