HAITONG SECURITIES CO., LTD. HAITONG SECURITIES CO., LTD. 海通證券股份有限公司 2019 InterIm report Interim Report 2019 中期報告 CONTENTS Important Notice 02 Section I Definitions and Important Risk Warnings 03 Section II Company Profile and Key Financial Indicators 08 Section III Summary of the Company's Business 15 Section IV Report of the Board of Directors 23 Section V Significant Events 67 Section VI Changes in Ordinary Shares and Particulars about Shareholders 99 Section VII Preference Shares 106 Section VIII Particulars about Directors, Supervisors and Senior Management 107 Section IX Corporate Bonds 113 Section X Financial Report 121 Section XI Documents Available for Inspection 122 Section XII Information Disclosure of Securities Company 123 02 HAITONG SECURITIES CO., LTD. Interim Report 2019 (H Share) IMPORTANT NOTICE The Board, the Supervisory Committee, Directors, Supervisors and senior management of the Company represent and warrant the truthfulness, accuracy and completeness of the contents of this interim report (the “Report”) and that there are no false representation, misleading statements contained herein or material omission of this Report, for which they will assume joint and several liabilities. This Report was considered and approved at the third meeting of the seventh session of the Board and the second meeting of the seventh session of the Supervisory Committee. All the Directors of the Company attended the Board meeting. None of the Directors or Supervisors has any objection to this Report. Deloitte Touche Tohmatsu has reviewed the 2019 unaudited interim financial report of the Company which was prepared in accordance with IFRS and issued standard and unqualified auditor’s review report for the Company. All the data in this Report has been presented in RMB unless otherwise indicated. Mr. Zhou Jie, Chairman of the Company, Mr. Zhang Xinjun, Chief Financial Officer, and Mr. Ma Zhong, head of the accounting department, hereby warrant the truthfulness, accuracy and completeness of the financial report contained in this Report. The Company had no profit distribution proposal or proposal on conversion of capital reserve funds into share capital for the first half of 2019. Forward-looking statements, including future plans and development strategies, may be included in this Report. All statements contained herein other than statements of historical fact are, or may be deemed to be, forward-looking statements. Neither the Company nor any of its subsidiaries undertakes any obligation to publicly update or revise any forward-looking statement as a result of new information. Investors should be reminded of the risks of investments and not place undue reliance on forward-looking statements. No appropriation of funds on a non-operating basis by the Company’s controlling shareholders, if any, or their respective related parties has occurred during the Reporting Period. The Company did not provide external guarantees in violation of the stipulated decision-making procedures during the Reporting Period. HAITONG SECURITIES CO., LTD. Interim Report 2019 (H Share) 03 Section I DEFINITIONS AND IMPORTANT RISK WARNINGS I. DEFINITIONS In this Report, unless the context otherwise requires, the following terms and expressions have the meanings set forth below: “A Share(s)” domestic shares of the Company, with a nominal value of RMB1.00 each, which are listed and traded on the Shanghai Stock Exchange “ABS” Asset-backed Securities “Articles of Association” or the articles of association of Haitong Securities “Articles” “Board” the board of directors of Haitong Securities “China” or “PRC” the People’s Republic of China, and for the purposes of this Report only, excluding Hong Kong, Macau Special Administrative Region and Taiwan “Code” the Corporate Governance Code and Corporate Governance Report set out in Appendix 14 to the Hong Kong Listing Rules “Company Law” the Company Law of the People’s Republic of China “Company” or “Haitong Securities” Haitong Securities Co., Ltd. “CSRC” the China Securities Regulatory Commission “Director(s)” the director(s) of Haitong Securities “ETF” exchange traded fund “EUR” or “Euro” the official currency of the Eurozone “FICC” fixed-income instruments, currencies and commodities “Fortune HFT” Shanghai Fortune HFT Asset Management Co., Ltd. (上海富誠 海富通資產管理有限公司) “Fullgoal Fund” Fullgoal Fund Management Co., Ltd. (富國基金管理有限公司) “Group” the Company and its subsidiaries 04 HAITONG SECURITIES CO., LTD. Interim Report 2019 (H Share) Section I DEFINITIONS AND IMPORTANT RISK WARNINGS “Gui’an UT” Gui’an UT Financial Leasing (Shanghai) Co., Ltd. (貴安恆信融 資租賃（上海）有限公司) “H Share(s)” Ordinary shares of the Company, with a nominal value of RMB1.00 each, which are listed and traded in HK dollars on the Hong Kong Stock Exchange “Haitong Bank” Haitong Bank, S.A. “Haitong Capital” Haitong Capital Co., Ltd. (海通開元投資有限公司) “Haitong Futures” Haitong Futures Co., Ltd. (海通期貨股份有限公司) “Haitong Innovation Securities” Haitong Innovation Securities Investment Co., Ltd. (海通創新 證券投資有限公司) “Haitong International Holdings” Haitong International Holdings Limited (海通國際控股有限公 司) “Haitong International” Haitong International Securities Group Limited (海通國際證 券集團有限公司), listed on the Hong Kong Stock Exchange, stock code: 665 “Haitong Resource” Shanghai Haitong Resource Management Co., Ltd. (上海海通 資源管理有限公司) “Haitong UniFortune” Haitong UniFortune International Leasing Co., Ltd. (海通恆運 國際租賃有限公司) “Haitong UniTrust Financial Leasing Haitong UniTrust Financial Leasing (Shanghai) Corporation (海 (Shanghai)” 通恆信融資租賃（上海）有限公司) “Haitong UT Capital” Haitong UT Capital Group Co., Limited (海通恆信金融集團有 限公司) “Haitong UT Holdings” Haitong UT Holdings Limited (海通恆信融資租賃控股有限公司) “Haitong UT Leasing HK” Haitong UT Leasing HK Limited (海通恆信租賃（香港）有限公 司) HAITONG SECURITIES CO., LTD. Interim Report 2019 (H Share) 05 Section I DEFINITIONS AND IMPORTANT RISK WARNINGS “Haitong UT” Haitong UniTrust International Leasing Co., Ltd. (海通恒 信國際租賃股份有限公司), listed on the Hong Kong Stock Exchange, stock code: 1905 “Haitong Xinchuang” Haitong Xinchuang Investment Management Co., Ltd. (海通新 創投資管理有限公司) “Haitong-Fortis PE” Haitong-Fortis Private Equity Fund Management Co., Ltd. (海 富產業投資基金管理有限公司) “HFT Investment” HFT Investment Management Co., Ltd. (海富通基金管理有限 公司) “HK$”, “HKD” or “HK dollars” the lawful currency of Hong Kong “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “HT Asset Management” Shanghai Haitong Securities Asset Management Company Ltd. (上海海通證券資產管理有限公司) “IFRS” International Financial Reporting Standards “IPO” initial public offering “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Hong Kong Listing Rules “NAFMII” the National Association of Financial Market Institutional Investors “NEEQ” National Equities Exchange and Quotations (全國中小企業股 份轉讓系統) “NSSF” the National Council for Social Security Fund of the PRC 06 HAITONG SECURITIES CO., LTD. Interim Report 2019 (H Share) Section I DEFINITIONS AND IMPORTANT RISK WARNINGS “QDII” Qualified Domestic Institutional Investor “Reporting Period” from 1 January 2019 to 30 June 2019 “RMB” or “Renminbi” the lawful currency of the PRC “SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) as amended, supplemented or otherwise modified from time to time “Shanghai Weitai Properties” Shanghai Weitai Properties Management Co., Ltd. (上海惟泰 置業管理有限公司) “SSE” the Shanghai Stock Exchange “Supervisor(s)” the supervisor(s) of Haitong Securities “Supervisory Committee” the supervisory committee of Haitong Securities “SZSE” the Shenzhen Stock Exchange “US$”, “USD” or “U.S. dollars” the lawful currency of the United States of America “WIND” Wind Information Co., Ltd. “WFOE” a wholly foreign-owned enterprises HAITONG SECURITIES CO., LTD. Interim Report 2019 (H Share) 07 Section I DEFINITIONS AND IMPORTANT RISK WARNINGS II. IMPORTANT RISK WARNINGS The business of the Company is highly dependent on the general economy and market conditions in jurisdictions where the Company operates. Our results of operations may be materially affected by various factors, such as macro-economic environment, cyclical fluctuations of the industry, development stages of the market, behavior of the investors and the international economic environment. The Company is exposed to various risks in its business operations, primarily including (i) policy risks, whereby the operations of securities firms in general may be subject to material adverse effects caused by national macro-control measures, and changes of laws, regulations, regulatory policies or trading rules applicable to the securities industry; (ii) country risks, whereby the Group’s business activities in a country or region may be affected by economic, political and social changes and events in such country or region; (iii) compliance risks, whereby the securities firms may be subject to legal punishment or regulatory penalties or may incur significant financial losses due to failure to comply with laws and regulations, regulatory requirements, rules, relevant standards made by the self-regulatory organisations or code of conducts applicable to the securities firms; (iv) risks of potential regulatory penalties due to failure to comply with anti money-laundering laws, regulations and regulatory requirements or arising from money-laundering,