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Holly Futures Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Holly Futures (a joint stock company incorporated in the People’s Republic of China with limited liability under the Chinese corporate name 弘業期貨股份有限公司 and carrying on business in Hong Kong as Holly Futures (the “Company”)) (Stock Code: 3678) ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019 The board of directors (the “Board”) of the Company hereby announces the audited annual results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2019. This announcement, containing the full text of the 2019 Annual Report of the Company, complies with the relevant requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in relation to information to accompany preliminary announcements of annual results. The audit committee of the Company, together with the management of the Company have reviewed the accounting principles and policies adopted by the Group and the consolidated financial statement for the year ended 31 December 2019. KPMG Huazhen LLP, the external auditor, has reviewed and agreed with the accounting principles and policies adopted by the Group and the consolidated financial statement for the year ended 31 December 2019. A printed version of 2019 Annual Report of the Company will be dispatched to shareholders of the Company and will be available for viewing on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.ftol.com.cn) before or by the end of April 2020. By order of the Board Mr. Zhou Yong Chairman Nanjing, China 30 March 2020 As at the date of this announcement, the Board of the Company consists of Mr. Zhou Yong and Ms. Zhou Jianqiu as executive directors; Mr. Xue Binghai, Mr. Jiang Lin and Mr. Shan Bing as non- executive directors; and Mr. Wang Yuetang, Mr. Lam Kai Yeung and Mr. Huang Dechun as independent non-executive directors. Contents Holly Futures Co., Ltd. 1 Annual Report 2019 Contents 2 I Important 3 II Chairman’s Statement 4 III Definitions 10 IV Company Profile 22 V Financial Summary 25 VI Management Discussion and Analysis 76 VII Report of the Board 85 VIII Other Material Matters 95 IX Changes in Share and Substantial Shareholders 98 X Directors, Supervisors, Senior Management and Staff 117 XI Corporate Governance Report 144 XII Report of Supervisory Committee 148 XIII Financial Report 2 Holly Futures Co., Ltd. I Important Annual Report 2019 Important The Board, the Supervisory Committee, Directors, Supervisors and the senior management of the Company warrant the truthfulness, accuracy and completeness of the annual report, in which there is no false representation, misleading statement or material omission and for which they will assume joint and several liabilities. This report was considered and approved at the fourteenth meeting of the third session of the Board and the seventh meeting of the third session of the Supervisory Committee. All Directors and Supervisors were present at the respective meetings. No Directors, Supervisors or the senior management declared that they could not guarantee nor had any objection to the truthfulness, accuracy and completeness of this report. The annual financial report for the year ended 31 December 2019 prepared by the Company in accordance with PRC Accounting Standard for Business Enterprises was audited by KPMG Huazhen LLP (畢馬威華振會計師事務所(特殊普 通合夥)), and an auditor’s report without reservation opinions was issued by them. All amounts set out in this report are expressed in Renminbi (RMB) unless otherwise indicated. The Company’s Chairman Mr. Zhou Yong, general manager Ms. Zhou Jianqiu and supervisor of finance Ms. Chen Rongping declare that they warrant the truthfulness, accuracy and completeness of the financial report contained in this annual report. Forward-looking statements including future plan and development strategy involved in this report do not constitute the Company’s substantive commitment to investors. Investors should be aware of investment risks. II Chairman’s Statement Holly Futures Co., Ltd. 3 Annual Report 2019 Chairman’s Statement In 2019, as affected by factors including trade tensions, political instability, geopolitics and weakening corporate confidence, the world economy has been under significant pressure since the beginning of 2018 and continued to be sluggish in 2019. The key economic indicators of developed countries had continued to fall, merchandise trade slowed down significantly and industrial products of major countries had gradually entered the deflationary stage. China’s economic growth was also under pressure. The cumulative GDP growth rate slowed down from 6.7% in 2018 to 6.1% in 2019. In terms of segments, the real estate investment performed relatively stable among the three major investment segments, the infrastructure investment was dragged at a low level and the manufacturing investment declined significantly due to profit decline expectation. However, among the major consumption categories, the performances of grains, oils, foods, beverages, tobacco and alcohol, which are very indirectly related to the macro economy, were relatively stable, while other major categories, such as automobiles, petroleum products, clothing, shoes and hats, and home appliances have a slower growth. Under the environment of continuous slowdown of the world economic growth and ups and downs of the Sino-US trade negotiation, China’s economy keeps going forward despite of the instability in the world economy. In 2019, in the face of a complicated market environment, the Company stayed true to its mission, enhanced confidence to conquer difficulties. Under the scientific decision-making and strong leadership of the Board and management of the Company, all the cadres and employees, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, deeply understood the spirit of various economic work conferences and focused on the goals and tasks set at the beginning of the year through gathering strength, reform and innovation. The Company unswervingly implemented the new development ideas and promoted high-quality development into a new level to forge ahead to comprehensively achieve the goal of the “13th Five – Year Plan” and “Three-year Action Plan for Building A Top-ranking Enterprise” In 2019, the Company adhered to innovation-driven strategy and accelerated the pace of development. The turnover from brokerage of the Company represents an increase of approximately 9% as compared with the same period of last year. The turnover from over-the-counter options exceeded RMB2.6 billion, representing a two times increase as compared with the same period of last year. The market maker business scale has entered into the top 10 of the DCE and the ZCE. The service area of “Insurance + Futures” has been expanding while the Soybean Poverty-alleviation Project in Zhenlai County, Jilin Province (吉林省鎮賚縣大豆扶貧項目) obtained the second prize in the Nanjing Financial Innovation Project (南京市金融創新項目二等獎). The asset management business scope achieved RMB11.2 billion which positioned the Company as one of the leaders in the industry. The Company achieved sales of approximately 800 public offering funds products with the scale exceeding RMB900 million, growing steadily for 3 consecutive years. The Company won a variety of awards and its brand influence has been further enhanced. During the year, the Company was awarded more than 10 honours, including “Best Futures Company in China” (中國最佳期貨公司), “Best Precision Poverty Alleviation Charity Outstanding Contribution Award” (最佳精准扶貧突出貢獻獎), “Best Assets Management Leadership Award” (最佳資產管理領航獎), “Best Brand Establishment Prize” (最佳品牌建設獎), “Best Futures IT System Establishment Prize” (最佳期貨IT系統建設獎) and “Best Commodity Futures Industry Service Prize” (最佳商品期貨產業 服務獎), brand value increased significantly. Hard work achieves new accomplishments; the Company is striving to open up a new future. Looking back to the past, the paintings drew by all employees of the Company with hard work and efforts spread out one by one in the unremitting strives and keep going forward after gone through tempering and difficulties. Looking forward to the coming year, the Company will aim at the establishment of first-class enterprise by promoting the high-quality development in the main business of the Company, build a long-term mechanism for high-quality development of the Company by continue to thoroughly implementing the new development concept, focusing on the transformation and upgrading of innovation business and promote the modernization of corporate governance system and governance capabilities. Let us strive for day and night, live up to the good times with a determined spirit, unite solidary and act pragmatically to achieve the high- quality development of the Company and keep going forward. Zhou Yong Chairman Nanjing, the PRC 30 March 2020 4 Holly Futures Co., Ltd. III Definitions Annual Report 2019 Definitions In this annual report, unless the context otherwise requires, the following expressions shall have the following meanings: Artall Culture Group Artall Culture Group Company Limited (愛濤文化集團有限公司, formerly known as Jiangsu Holly
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