UPDATE: Bank of America Downgrades Noah Holdings; Lowers PO

According to a research report published this morning, Bank of America has downgraded Noah Holdings

from Buy to Underperform, and lowered PO from $15.60 to $9.60. In the report, Bank of America said, "Noah reported 1Q12 results. Non-GAAP net profit amounted to USD3.7mn, much worse than our expectation of USD5-6mn, and declined by 41% YoY as cost remained high (up by 66% YoY) and revenue growth decelerated (up by 11%). Operating margin recovered from 14.5% to 15.7% QoQ, but still lower than >30% level before 4Q11 and less likely to recover soon. Though management maintained its FY12 profit target at USD30-35mn (1Q12 accounted for only 11-12% of the target while 1Q11 accounted for 25% of FY11), we believe it would be a big challenge, and the downside risks have increased due to rising cost and upgraded competition." Noah Holdings is currently trading at $6.50.