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.
(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 6030)
2018 THIRD QUARTERLY RESULTS
This announcement is made pursuant to the disclosure obligations under Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).
The unaudited results of the Group for the third quarter ended 30 September 2018 are summarized as follows:
• For the third quarter of 2018, the Group recorded an operating revenue of RMB7,216,734,601.64; the net profit attributable to owners of the parent amounted to RMB1,749,437,088.53.
• This report was prepared in accordance with the relevant disclosure requirements applicable to quarterly reports of listed companies issued by the China Securities Regulatory Commission.
• The information contained in this report was prepared in accordance with the PRC GAAP.
• Unless otherwise indicated, Renminbi is the recording currency in this report.
The contents of this report are consistent with the relevant announcement published by the Company on the Shanghai Stock Exchange. This announcement is published simultaneously in Hong Kong and Mainland China.
1 §1 Important Notice
1.1 The board of directors (the “Board”) and the supervisory committee (the “Supervisory Committee”), together with the directors (the “Directors”), supervisors and senior management of CITIC Securities Company Limited (the “Company”) warrant the truthfulness, accuracy and completeness of this report and that there is no false representation, misleading statement contained herein or material omission from this report, and for which they will assume joint and several legal liabilities.
1.2 This report was considered and approved at the 31st meeting of the Sixth Session of the Board with all the Directors attended. None of the Directors raised any objection to this report.
1.3 Mr. ZHANG Youjun, head of the Company, and Mr. GE Xiaobo, Chief Financial Officer, and Ms. KANG Jiang, head of the Company’s accounting department, warrant that the financial statements set out in this report are true, accurate and complete.
1.4 This report is unaudited and prepared in accordance with the disclosure requirements for, and in the required form of financial statements under the Generally Accepted Accounting Principles in the People’s Republic of China (the “PRC GAAP”).
1.5 The Company prepared this report in both English and Chinese versions. In the event of any discrepancy in interpretation between the English version and Chinese version of this report, the Chinese version shall prevail.
1.6 “Reporting Period” refers to the three months ended 30 September 2018.
1.7 “Group” refers to the Company and its subsidiaries.
2 §2 Key Financial Data and Changes in Shareholders of the Company
2.1 Key financial data
In RMB Yuan Change as compared to Items 30 September 2018 31 December 2017 the end of last year (%)
Total assets 614,146,021,596.44 625,574,643,890.17 -1.83 Equity attributable to 152,791,726,946.81 149,799,046,146.90 2.00 owners of the parent
Change as compared Nine months ended Nine months ended to the same period Items 30 September 2018 30 September 2017 of last year (%)
Net cash inflow/(outflow) from 44,631,667,260.73 -76,237,442,649.93 N/A operating activities
Change as compared Nine months ended Nine months ended to the same period Items 30 September 2018 30 September 2017 of last year (%)
Operating revenue 27,209,287,878.05 28,499,832,569.34 -4.53 Profit attributable to owners 7,314,589,126.02 7,927,026,699.60 -7.73 of the parent Profit attributable to owners 7,294,583,305.18 7,959,311,857.84 -8.35 of the parent excluding extraordinary gains and losses Return on weighted average equity 4.81 5.45 Decreased by 0.64 (%) percentage point Basic earnings per share 0.60 0.65 -7.69 (RMB/share) Diluted earnings per share 0.60 0.65 -7.69 (RMB/share)
3 Items and amount of extraordinary gains and losses
√ Applicable □ Not applicable
In RMB Yuan Three months Nine months ended ended 30 September 30 September Items 2018 2018 Note
Profits and losses from disposal of -215,110.72 71,587.47 Mainly gains and losses non-current assets from disposal of fixed assets Government subsidies through profit or 11,529,092.05 50,337,768.70 Mainly government loss except for government subsidies closely subsidies related to the Company’s ordinary business, which are in line with national policies, calculated according to certain standards or continuously granted in fixed amount Non-operating income/expenses -11,949,832.78 -16,751,779.74 — other than the above items Effect on non-controlling interests, after tax -1,074,472.66 -711,267.97 — Effect on income tax -1,249,868.00 -12,940,487.62 — Total -2,960,192.11 20,005,820.84 —
2.2 Total number of shareholders and shareholdings of the top 10 shareholders and top 10 holders of tradable shares (or shareholders whose shares are not subject to trading moratorium) as at the end of the Reporting Period
Unit: Share Total number of shareholders Note 1 544,373
4 Shareholdings of the top 10 shareholders
Number of Number of shares held at shares held the end of the subject to Pledged or frozen Reporting Percentage trading Number Type of Name of shareholder (full name) Period (%) moratorium Status of shares shareholder Note 4
HKSCC Nominees LimitedNote 2 2,277,362,817 18.79 0 Nil 0 Foreign legal person CITIC Corporation Limited 1,999,695,746 16.50 0 Nil 0 State-owned legal person China Securities Finance 362,296,197 2.99 0 Nil 0 Unknown Corporation Limited China Life Insurance Company Limited 310,054,938 2.56 0 Nil 0 Domestic non- — Traditional — General Insurance State-owned Products — 005L — CT001Hu legal person Central Huijin Investment Limited 198,709,100 1.64 0 Nil 0 State-owned legal person Hong Kong Securities Clearing 171,233,542 1.41 0 Nil 0 Foreign legal Company LimitedNote 3 person Da Cheng Fund — Agricultural Bank 153,726,217 1.27 0 Nil 0 Unknown — Da Cheng China Securities and Financial Assets Management Program China AMC Fund — Agricultural Bank 144,472,197 1.19 0 Nil 0 Unknown — China AMC China Securities and Financial Assets Management Program Zhong Ou Fund — Agricultural Bank 140,178,900 1.16 0 Nil 0 Unknown — Zhong Ou China Securities and Financial Assets Management Program GF Fund — Agricultural Bank 140,049,999 1.16 0 Nil 0 Unknown — GF China Securities and Financial Assets Management Program
5 Shareholdings of the top 10 shareholders whose shares are not subject to trading moratorium
Number of tradable shares not subject to trading Class and number of shares Name of shareholder moratorium Class Number
HKSCC Nominees Limited 2,277,362,817 Overseas listed 2,277,362,817 foreign shares CITIC Corporation Limited 1,999,695,746 RMB-denominated 1,999,695,746 ordinary shares China Securities Finance Corporation Limited 362,296,197 RMB-denominated 362,296,197 ordinary shares China Life Insurance Company Limited — Traditional 310,054,938 RMB-denominated 310,054,938 — General Insurance Products — 005L — CT001Hu ordinary shares Central Huijin Investment Limited 198,709,100 RMB-denominated 198,709,100 ordinary shares Hong Kong Securities Clearing Company Limited 171,233,542 RMB-denominated 171,233,542 ordinary shares Da Cheng Fund — Agricultural Bank — Da Cheng China 153,726,217 RMB-denominated 153,726,217 Securities and Financial Assets Management Program ordinary shares China AMC Fund — Agricultural Bank — China AMC 144,472,197 RMB-denominated 144,472,197 China Securities and Financial Assets Management ordinary shares Program Zhong Ou Fund — Agricultural Bank — Zhong Ou China 140,178,900 RMB-denominated 140,178,900 Securities and Financial Assets Management Program ordinary shares GF Fund — Agricultural Bank — GF China Securities and 140,049,999 RMB-denominated 140,049,999 Financial Assets Management Program ordinary shares Explanation on related relationship or concerted action The Company is not aware of any related/connected among the above shareholders relationship among the above shareholders or whether they are parties acting in concert.
Note 1: As at 30 September 2018, the total number of the shareholders of the Company was 544,373, among which 544,215 shareholders were holders of A shares and 158 shareholders were holders of H shares.
Note 2: HKSCC Nominees Limited is the nominal holder of shares on behalf of H shareholders who do not register the shares under their names.
Note 3: Hong Kong Securities Clearing Company Limited is the nominal holder of the stocks of Northbound Trading.
Note 4: The type of A shareholders represents the type of account held by shareholders registered with Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
Note 5: As the shares of the Company are underlying securities for margin trading and securities lending, the shareholdings of shareholders are the aggregate of the number of shares and equity interest in their ordinary securities accounts and credit securities accounts.
6 2.3 Total number of holders of preferred shares and shareholdings of the top 10 holders of preferred shares and top 10 holders of preferred shares not subject to trading moratorium as at the end of the Reporting Period
□ Applicable √ Not applicable
§3 Significant Events
3.1 Significant changes in major financial statement items and financial indicators of the Company and the reasons thereof
√ Applicable □ Not applicable
3.1.1 Significant changes in the items of statement of financial position of the Company and the reasons thereof
In RMB Yuan Increase/ 30 September 31 December Decrease Items 2018 2017 (%) Main reason
Financial assets N/A 178,153,503,440.82 N/A Effect of implementation of measured at fair the New Financial Instruments value through profit Standards or loss Financial assets held 222,566,396,513.00 N/A N/A Effect of implementation of for trading the New Financial Instruments Standards Derivative financial 9,243,924,390.39 5,900,794,728.17 56.66 Changes in the scale and fair value assets of derivative financial instruments Reverse repurchase 57,953,160,833.05 114,592,029,668.14 -49.43 Decrease in the scale of reverse agreements repurchase Accounts receivable 43,888,455,729.75 21,661,634,482.10 102.61 Increase in amounts due from brokerage customers and transaction settlement Interest receivable 4,538,181,733.76 3,368,327,259.78 34.73 Increase in interest receivables from investments in debt securities Available-for-sale N/A 59,226,931,955.32 N/A Effect of implementation of financial assets the New Financial Instruments Standards Other debt instruments 17,284,378,185.93 N/A N/A Effect of implementation of investments the New Financial Instruments Standards Other equity instruments 17,127,717,955.37 N/A N/A Effect of implementation of investments the New Financial Instruments Standards
7 Increase/ 30 September 31 December Decrease Items 2018 2017 (%) Main reason
Short-term financing 12,166,702,894.39 33,537,839,142.31 -63.72 Decrease in the scale of short-term instruments payable financing instruments payable Due to banks and other 14,221,000,805.26 9,835,000,000.00 44.60 Increase in the scale of amount financial institutions due to banks and other financial institutions Financial liabilities N/A 46,451,769,979.94 N/A Effect of implementation of measured at fair value the New Financial Instruments through profit or loss Standards Financial liabilities 53,039,133,117.56 N/A N/A Effect of implementation of held for trading the New Financial Instruments Standards Derivative financial 8,697,348,016.33 13,301,231,344.17 -34.61 Changes in the scale and fair value liabilities of derivative financial instruments Funds payable to 149,573,339.23 60,686,527.09 146.47 Increase in the unsettled funds securities issuers payable to securities issuers Accounts payable 34,424,126,525.98 21,431,582,957.83 60.62 Increase in amounts due to brokerage customers and transaction settlement
8 3.1.2 Significant changes in the items of income statement and statement of cash flows of the Company and the reasons thereof
In RMB Yuan Nine months Nine months Increase/ ended 30 ended 30 Decrease Items September 2018 September 2017 (%) Main reason
Investment income 4,029,531,869.35 7,338,351,955.69 -45.09 Decrease in gains from disposal of financial instruments Gains from disposal 68,447.47 449,351.41 -84.77 Decrease in gains from disposal of of assets non-current assets Gains and losses arising 2,975,162,822.70 -470,756,575.71 N/A Changes in fair value of financial from changes in the instruments caused by securities fair value market fluctuation Foreign exchange gains 748,387,233.03 -52,829,276.81 N/A Changes in exchange rate and losses Other income 5,563,329.40 135,828,872.32 -95.90 Decrease in government subsidies relating to the daily operation of the Company Impairment losses — 245,754,961.67 N/A Effect of implementation of the New Financial Instruments Standards Expected credit losses 1,232,190,473.02 N/A N/A Effect of implementation of the New Financial Instruments Standards Non-operating income 56,018,857.45 102,315,429.87 -45.25 Decrease in government subsidies not relating to the daily operation of the Company Non-operating expenses 27,993,057.89 208,795,354.15 -86.59 No business restructuring cost incurred during the Reporting Period Net cash inflow/ 44,631,667,260.73 -76,237,442,649.93 N/A Year-on-year increase in net cash (outflow) from inflow from operating activities operating activities resulting from repurchase agreements and customer brokerage deposits Net cash inflow/ -2,748,371,688.60 21,435,713,225.58 N/A Increase in the net outflow of other (outflow) from debt instruments investment investing activities Net cash inflow/ -33,289,159,689.24 28,093,989,870.13 N/A Year-on-year decrease in the (outflow) from issuance of bonds and structured financing activities notes during the Reporting Period
9 3.2 Analysis and explanations of the progress of significant events and their impacts and solutions
√ Applicable □ Not applicable
3.2.1 Changes of securities outlets and branch offices
The Company
During the Reporting Period, seven branches of the Company completed same-city relocation. As at the end of the Reporting Period, the Company had 33 branch offices and 207 securities outlets. Details of relocations are as follows:
No. Original name of branches Current name of branches Address after relocation
1 Ningxia Branch Office Ningxia Branch Office Room 301, No.16 (formerly No. B4) Commercial Complex, Yue Hai Xin Tian Di, east side of Yinjiaqu and south side of Zhenshui Road, Jinfeng District, Yinchuan, Ningxia
2 Shanxi Branch Office Shanxi Branch Office Shop No. 1, Northeast Corner, Hongsheng Times Financial Plaza, No. 1 Jifu Road, Jinyuan District, Taiyuan, Shanxi Province
3 Yuyao Nanleilu Securities Yuyao Nanleilu Securities No. 1 Nanlei South Road, Outlet Outlet Yuyao, Zhejiang Province
4 Zhapu Yashan East Road Pinghu Donghudadao No. 132 Donghu Avenue, Securities Outlet Securities Outlet Danghu Street, and the southwest half of No. 208, Building 2, Longqiu Guixiang, Pinghu, Jiaxing, Zhejiang Province
10 No. Original name of branches Current name of branches Address after relocation
5 Shenzhen Bao’an Securities Shenzhen Bao’an Securities Room 2308, No.15-3 Outlet Outlet Haitian Road, Building C, Times Square Excellence, N23 Haiwang Community, Xin’an Street, Bao’an District, Shenzhen
6 Shenzhen Shennandadao Shenzhen Shennandadao 301A, Block A, Securities Outlet Securities Outlet Xinian Plaza, No. 6021 Shennan Boulevard, Tian’an Community, Shatou Street, Futian District, Shenzhen
7 Guangzhou Linjiangdadao Guangzhou Linjiangdadao Rooms 1203, 1204, Securities Outlet Securities Outlet 1205 and 1206, No. 5 Linjiang Boulevard, Tianhe District, Guangzhou, Guangdong Province
CITIC Securities (Shandong) Co., Ltd. (a subsidiary of the Company, hereinafter referred to as “CITIC Securities (Shandong)”)
During the Reporting Period, CITIC Securities (Shandong) was approved to establish a securities outlet in Jinan, which has not yet commenced business. As at the end of the Reporting Period, CITIC Securities (Shandong) had six branch offices and 64 securities outlets.
CITIC Futures Company Limited (a subsidiary of the Company, hereinafter referred to as “CITIC Futures”)
During the Reporting Period, CITIC Futures has completed same-city relocation of four branch offices. As at the end of the Reporting Period, CITIC Futures had 38 branch offices and five futures outlets. Details of relocation are as follows:
No. Name of branch office Address before relocation Address after relocation
1 Zhejiang Branch Office Room 301 and 302, 3/F, Room 2302, Di Kai Yin Zuo, Podium Building, No. 29 Jiefang East Road, Guoxin Property Mansion, Jianggan District, No. 102 Fengqi Road, Hangzhou, Hangzhou, Zhejiang Province Zhejiang Province
11 No. Name of branch office Address before relocation Address after relocation
2 Dalian Branch Office Room 2508 and 2509, Room 2403, 2508 and 2509, Dalian Futures Building, Dalian Futures Building, Block A, Block A, Dalian International Dalian International Financial Center, Financial Center, No.129 Huizhan Road, No.129 Hui Zhan Road, Shahekou District, Shahekou District, Dalian, Dalian, Liaoning Province Liaoning Province
3 Zibo Branch Office 5/F, No. A1, Room 3401, 34/F, Block A, 12 West Renmin Road, Huijin Building, Zhangdian District, Zibo, No. 99 Lutai Avenue, Shandong Province High-tech Zone, Zibo, Shandong Province
4 Inner Mongolia Branch 8/F, Keyuan Mansion, Room 702, 7/F, Office Shifu West Road, Fortune Plaza Kundulun District, Business Building, Baotou, No. 74 Steel Street, Inner Mongolia Kundulun District, Autonomous Region Baotou, Inner Mongolia Autonomous Region
CITIC Securities International Co., Ltd. (a subsidiary of the Company, hereinafter referred to as “CSI”)
During the reporting period, there were no changes in the branches of CSI. As at the end of the Reporting Period, CSI had four branches.
Kington Securities Limited Liability Company (a subsidiary of the Company, hereinafter referred to as “Kington Securities”)
During the reporting period, there were no changes in the branches of Kington Securities. As at the end of the Reporting Period, Kington Securities had two securities outlets.
12 3.2.2 Material litigation and arbitration
During the Reporting Period, the Group had not been involved in any litigation or arbitration which has a material impact on the Group.
The litigation or arbitration of the Group with an involved amount of over RMB10 million, which was newly raised or had progress during the period from the beginning of the Reporting Period to the disclosure date of this report and has not been disclosed, is as follows:
Disputes between the Company and China City Construction on Bond Transactions
Relevant information of the cases was set out in the Company’s 2018 Interim Report.
(1) Dispute on Transaction of “12 China City Construction MTN1 Bonds”
The Company filed a lawsuit with the First Intermediate People’s Court of Beijing Municipality (hereinafter referred to as the “Beijing First Intermediate Court”) on 26 May 2017, requesting China City Construction Holding Group Co., Ltd. (hereinafter referred to as “China City Construction”) to make early repayment for the bond principal of RMB120 million and corresponding interests of RMB3,266,137 due to the Company, and pay for the other expenses incurred for realizing the creditor’s rights. The Beijing First Intermediate Court accepted this case on 27 May 2017. The first instance verdict was in favor of the major claims of the Company. On 4 May 2018, China City Construction appealed to the Higher People’s Court of Beijing Municipality (hereinafter referred to as the “Beijing Higher Court”). The Beijing Higher Court rendered the final judgement of the case on 28 August 2018, which dismissed the appeal of China City Construction. On 11 September 2018, the Company applied to the Second Intermediate People’s Court of Beijing Municipality (hereinafter referred to as the “Beijing Second Intermediate Court”) for compulsory enforcement. Currently, the case is in the process of enforcement.
13 (2) Dispute on Transaction of “12 China City Construction MTN2 Bonds”
Due to the continued deterioration of China City Construction’s business position, added with its involvement in several litigation and enforcement cases, and its transfer of its prime assets, the Company filed a lawsuit with the Beijing First Intermediate Court on 26 May 2017, requesting China City Construction to make early repayment for the bond principal of RMB200 million and corresponding interests of RMB4,865,753 due to the Company, and pay for the other expenses incurred for realizing the creditor’s rights. The Beijing First Intermediate Court accepted this case on 27 May 2017. The first instance verdict was in favor of the major claims of the Company. On 4 May 2018, China City Construction appealed to the Beijing Higher Court. The Beijing Higher Court heard the case on 16 July 2018. The Beijing Higher Court rendered the final judgment of the case on 28 August 2018, which dismissed the appeal of China City Construction. On 11 September 2018, the Company applied to the Beijing Second Intermediate Court for compulsory enforcement. Currently, the case is in the process of enforcement.
The Company has made corresponding provision for impairment of the two bond transactions above.
Dispute between the Company and CHENG Yu on Securities Transaction Agency Contract
CHENG Yu filed a lawsuit with the People’s Court of Futian District of Shenzhen (hereinafter referred to as the “Futian Court”) against the Company in respect of the failure of completion of the block trading of sale of his ChiNext shares, requesting the Company to compensate for his damage of RMB11,906,695 and the corresponding interests, and pay for the litigation fees (relevant information of this case is contained in the Company’s 2017 Annual Report). On 22 June 2017, the Company received the summons from the Futian Court. Thereafter, the case was transferred to the People’s Court of Chaoyang District of Beijing (hereinafter referred to as the “Chaoyang Court”). The trial of first instance was held on 21 November 2017. The trial of second instance was held at the Chaoyang Court on 25 October 2018.
14 Dispute between the Company and HAO Feng on Margin Financing and Securities Lending Transaction
On 14 March 2018, the Company submitted an application for arbitration to the Beijing Arbitration Commission (hereinafter referred to as the “BAC”), requesting for the repayment by HAO Feng, a customer of the margin financing and securities lending business of the Company, of the debt resulting from the margin financing and securities lending transactions with a principal and interests totaling RMB19.176 million, and applied for a ruling on property preservation. The BAC accepted the case on 23 March 2018 (relevant information of this case is contained in the Company’s 2018 Interim Report). On 19 September 2018, the BAC made an arbitration ruling that HAO Feng should repay the principal, the interest accrued thereon, penalty and other handling costs to the Company, which was amounted to RMB19,514,139.07 in total as at 13 March 2018. Currently, the Company is seeking for the commencement of compulsory enforcement proceedings. The Company has made corresponding provision for impairment of this transaction.
Dispute between the Company and DING Sheng on Margin Financing and Securities Lending Transaction
As a result of dispute between the Company and DING Sheng on margin financing and securities lending transaction, the Company submitted application materials to the BAC and applied for property preservation on 11 May 2018. On 28 May 2018, the BAC accepted the case (relevant information of this case is contained in the Company’s 2018 Interim Report). On 21 June 2018, the People’s Court of Haimen issued the verdict of property preservation, and seized and froze the properties, equities, stocks and bank accounts of DING Sheng. On 22 August 2018, DING Sheng filed a counterclaim with the BAC, requesting the Company to compensate for his loss of RMB20.10 million. The BAC accepted the case on 24 August 2018. The Company has made corresponding provision for impairment of this transaction.
Dispute between the Company and HITHT on Margin Financing and Securities Lending Transaction
Due to the breach of contract by Harbin Institute of Technology High-Tech Development Corporation (hereinafter referred to as “HITHT”) during the margin financing and securities lending transaction with the Company, the Company applied for arbitration to the BAC on 4 June 2018, requesting HITHT to repay the principal of RMB406.73 million, the corresponding interest, liquidated damages and other expenses incurred for realizing the creditor’s rights, and applied for property preservation. On 8 June 2018, the BAC accepted the case (relevant information of this case is contained in the Company’s 2018 Interim Report). The case was heard on 5 September 2018. On 28 September 2018, the BAC made a ruling that HITHT should repay the principal, the corresponding interest, liquidated damage and other handling costs to the Company, which was amounted to RMB418,624,645.99 in total as at 4 June 2018. Currently, the Company is seeking for the commencement of compulsory enforcement proceedings. The Company has made corresponding provision for impairment of this transaction.
15 Dispute between the Company and Huaqiao on Real Property
As a result of the dispute on real property, the Company filed a lawsuit against Jiangsu Huaqiao Real Estate Development Co., Ltd. (hereinafter referred to as “Huaqiao”) with the People’s Court of Gulou District of Nanjing (hereinafter referred to as the “Gulou Court”) on 27 June 2018, requesting the Gulou Court to recognize the property located on the 23rd floor of Huaqiao Tower as a non-bankruptcy property of Huaqiao in accordance with the laws, and to order Huaqiao to assist the Company in the procedure of transferring title of the above property to the Company (relevant information of this case is contained in the Company’s 2018 Interim Report). On 28 June 2018, the Gulou Court accepted the case (the value of the property concerned is approximately RMB17.50 million as confirmed by the court). The case was heard on 28 August 2018 and the second trial is scheduled to be heard on 9 November 2018.
Dispute between the Company and Landian Investment on the Consulting Contract
Shanghai Landian Investment Consultant Company Limited claimed that the Company failed to pay the consultancy fee in accordance with the agreement, and therefore applied for arbitration to the BAC, requesting the Company to pay the consultancy fee of RMB20,656,312 together with corresponding liquidated damages. The BAC accepted the case on 10 August 2018. The case is scheduled to be heard on 16 November 2018 (relevant information of this case is contained in the Company’s 2018 Interim Report).
Dispute between the Company and Xinghua Rural Commercial Bank on Target Asset Management (TAM) Contracts
On 1 September 2016, Jiangsu Xinghua Rural Commercial Bank Co., Ltd. (hereinafter referred to as “Xinghua Rural Commercial Bank”), the Company and the trustee, China Merchants Bank Co., Ltd., Beijing Branch (hereinafter referred to as “CMB Beijing Branch”) entered into TAM contracts, pursuant to which, the Company shall provide asset management services to Xinghua Rural Commercial Bank. Since Xinghua Rural Commercial Bank believed that there was non-compliance of the TAM contracts by the Company and CMB Beijing Branch, it submitted an application for arbitration to the Shanghai International Economic and Trade Arbitration Commission on 10 August 2018, requesting the Company and CMB Beijing Branch to jointly pay RMB10,937,622.53 to it for loss compensation. Currently, the case is pending formation of the arbitration panel and the time of hearing has not yet been determined.
16 Dispute between the Company and CHE Meiyun on Margin Financing and Securities Lending Transaction
On 14 July 2016, the Company entered into the Margin Financing and Securities Lending Business Contract with CHE Meiyun to commence margin financing and securities lending transactions. On 2 July 2018, since the guarantee ratio of CHE Meiyun’s credit account remained below the agreed close-out threshold as prescribed in the contract and she failed to provide additional collaterals, the Company carried out forced liquidations of CHE Meiyun’s credit account in accordance to the contract. CHE Meiyun has not settled all liabilities till the completion of forced liquidation. The Company submitted an application for arbitration to the BAC, requesting CHE Meiyun to repay the principal of RMB10,297,743.83, the corresponding interests, liquidated damages and other expenses incurred for realizing the creditor’s rights to the Company. The Company also applied for property preservation. On 27 August 2018, the BAC accepted this case. On 6 September 2018, the Company seized and froze the real estate, negotiable securities, equity and bank accounts as well as other property under CHE Meiyun’s name through the People’s Court of Jiaojiang District of Taizhou City. The Company has made corresponding provision for impairment of this transaction.
Dispute between the Company and CHEN Qiang on Margin Financing and Securities Lending Transaction
On 8 June 2012, the Company entered into the Margin Financing and Securities Lending Business Contract with CHEN Qiang to commence margin financing and securities lending transactions. On 17 August 2018, since the guarantee ratio of CHEN Qiang’s credit account remained below the agreed close-out threshold as prescribed in the contract and he failed to provide additional collaterals, the Company carried out forced liquidations of CHEN Qiang’s credit account in accordance to the contract. CHEN Qiang has not settled all liabilities till the completion of forced liquidation. The Company submitted an application for arbitration to the BAC, requesting CHEN Qiang to repay the principal and interests totaling RMB18,501,775.34, the corresponding liquidated damages and other expenses incurred for realizing the creditor’s rights to the Company. The Company also applied for property preservation. On 31 August 2018, the BAC accepted this case. On 17 September 2018, the Company seized and froze the property under CHEN Qiang’s name through the People’s Court of West Lake District of Hangzhou City. The Company has made corresponding provision for impairment of this transaction.
17 Dispute between GoldStone Investment and Chuanjiao Agriculture and Animal Husbandry on Breach of Contract
Due to the breach of contract by LI Xuemei, LI Xuejie, Chengdu Chuangyi Investment Management Co., Ltd., Sichuanchuanjiao Agriculture and Animal Husbandry Science and Technology Co., Ltd. and LI Shuzhong (hereinafter collectively referred to as the “Covenanters”), GoldStone Investment Co., Ltd. (hereinafter referred to as “GoldStone Investment”) initiated an arbitration at the China International Economic and Trade Arbitration Commission (hereinafter referred to as the “CIETAC”) on 13 June 2018, requesting the Covenanters to pay the consideration for transfer of shares of RMB60,866,459.65 and preservation fees (relevant information of this case is contained in the Company’s 2018 Interim Report). The CIETAC accepted the case on 25 July 2018. The case is scheduled to be heard on 7 November 2018. GoldStone Investment has made corresponding provision for impairment of this transaction.
Disputes involving Zhongzheng Capital on Breach of Contract
CITIC Securities Capital Management Co., Ltd (hereinafter referred to as “Zhongzheng Capital”), a wholly-owned subsidiary of CITIC Futures, brought a lawsuit for breach of contract in the People’s Court of Shenzhen Qianhai Cooperation Zone (hereinafter referred to as the “Qianhai Court”) on 9 April 2015 against the counterparties to a thermal coal purchasing agency agreement and the case was accepted (relevant information of this case is contained in the Company’s 2018 Interim Report).
The lawsuit proceeded by two separate proceedings and the enforcement of both proceedings had been concluded. The defendant in Litigation One, Shanxi Jincheng Anthracite Mining Group International Trading Co., Ltd., initiated a litigation at Intermediate People’s Court of Taiyuan Municipality (hereinafter referred to as the “Taiyuan Intermediate Court”) on the grounds of sales contract dispute, requesting Shanxi Energy Industries Group (Xinzhou) Co., Ltd. ( 山西能源產業集團忻州有限公司 ) (hereinafter referred to as “Shanxi Xinzhou”) to pay for purchases and liquidated damages totaling RMB42,274,880. Shanxi Xinzhou applied to the Taiyuan Intermediate Court to add Zhongzheng Capital, Shanghai Renli Import and Export Co., Ltd., BBMG Material Industrial (Shanghai) Co., Ltd. and Sanwei Banghai Petrifaction Engineering Co., Ltd. as third persons of the case, which was approved. On 11 October 2018, Zhongzheng Capital received the summons from the court. The first trial of the case is scheduled to be heard on 29 November 2018.
On 24 March 2016, SHEN Peng, one of the defendants in Litigation Two, initiated a litigation at Qianhai Court on the grounds of property preservation damage, requesting a payment of RMB11,715,913.86 from Zhongzheng Capital. The first instance verdict ruled that Zhongzheng Capital shall pay compensation of RMB5,417,469.28. Zhongzheng Capital then made an appeal to the court in accordance with laws. The Intermediate People’s Court of Shenzhen heard the case on 20 September 2018, and has not yet rendered the second trial judgment.
18 Labor Dispute between CSI and WEI Li
Due to labor dispute, WEI Li, a former employee of CSI, filed a lawsuit with the Hong Kong Labour Tribunal, requesting a payment of HK$42,782,192.99 from CSI (relevant information of this case is contained in the Company’s 2018 Interim Report). In June 2018, the plaintiff, WEI Li, decided to discontinue the litigation. The application for discontinuing the case was approved on 13 July 2018 by the court. The case was closed.
3.2.3 Other significant events
The 29th Meeting of the Sixth Session of the Board
On 7 September 2018, the 29th Meeting of the Sixth Session of the Board approved the following resolutions:
1. the Resolution on the Adjustment of the Company’s Departmental Set-up, pursuant to which, it was agreed that the Synergic Development of Business Department was dissolved and consolidated into the Strategic Account Department and the Investment Management Department was dissolved and consolidated into the Strategy & Planning Department. The Company had completed the above adjustment of departmental set-up on 8 October 2018.
2. the Resolution on the Dissolution and Cancellation of CITIC Securities Information and Quantitative Services (Shenzhen) Limited Liability Company, pursuant to which, it was agreed to dissolve and cancel CITIC Securities Information and Quantitative Services (Shenzhen) Limited Liability Company, with its business assumed by the parent company; and to authorize the management of the Company to coordinate and handle all relevant procedures related to the dissolution, liquidation, cancellation and regulatory filings of CITIC Securities Information and Quantitative Services (Shenzhen) Limited Liability Company. As at the disclosure date of this report, the Company has not gone through such procedures.
Capital Increase in Kington Securities
On 27 July 2018, the 27th Meeting of the Sixth Session of the Board considered and approved the Resolution in Relation to the Capital Increase in Kington Securities Limited Liability Company, pursuant to which, it was agreed to increase the capital of Kington Securities by RMB35 million for replenishing the net capital of Kington Securities. Kington Securities has completed the registration of the capital increase with the industrial and commercial administration authority on 14 September 2018. After the capital increase, the registered capital of Kington Securities is increased to RMB0.135 billion.
19 Results of China AMC
China Asset Management Company Limited (a subsidiary of the Company, hereinafter referred to as “China AMC”) is held as to 13.9% by Mackenzie Financial Corporation. IGM Financial Inc., the parent company of Mackenzie Financial Corporation, will publish its 2018 third quarterly results recently, which contains major financial data of China AMC. In accordance to the principle of fairness with regard to information disclosure, the Company hereby discloses the 2018 third quarterly major financial data of China AMC as follow: for the three months ended 30 September 2018, China AMC realized a net profit of RMB254.27 million (unaudited).
3.3 Unperformed undertakings due during the Reporting Period
□ Applicable √ Not applicable
As at the disclosure date of this report, there is no change in undertakings. For details of the performance, please refer to the 2018 Interim Report of the Company.
3.4 Warning on any estimated potential loss in accumulated net profit for the period from the beginning of the year to the end of next reporting period or any material change year-on-year and the reasons thereof
□ Applicable √ Not applicable
§4 Appendix
(See attached tables)
20 4.1 Financial statements
Statement of Financial Position of the Group (unaudited)
Prepared by: CITIC Securities Company Limited In RMB Yuan
Items 30 September 2018 31 December 2017
ASSETS: Cash and bank balances 110,612,417,464.75 98,816,283,657.65 Including: cash held on behalf of customers 68,505,591,380.59 69,477,475,255.31 Settlement deposits 27,087,481,632.68 27,873,194,683.51 Including: deposits held on behalf of customers 20,123,737,607.01 22,908,862,270.60 Margin accounts 61,103,095,827.60 73,982,610,584.55 Financial assets measured at fair value through profit or loss N/A 178,153,503,440.82 Financial assets held for trading 222,566,396,513.00 N/A Derivative financial assets 9,243,924,390.39 5,900,794,728.17 Reverse repurchase agreements 57,953,160,833.05 114,592,029,668.14 Accounts receivable 43,888,455,729.75 21,661,634,482.10 Interest receivable 4,538,181,733.76 3,368,327,259.78 Refundable deposits 1,098,944,252.93 972,410,083.66 Available-for-sale financial assets N/A 59,226,931,955.32 Other debt instruments investments 17,284,378,185.93 N/A Long-term equity investments 9,060,547,729.68 8,585,548,406.01 Other equity instruments investments 17,127,717,955.37 N/A Investment properties 851,110,036.73 871,553,553.79 Fixed assets 7,787,853,284.88 7,902,967,736.98 Construction in progress 382,672,396.69 361,591,235.71 Intangible assets 3,271,996,114.27 3,447,331,510.10 Goodwill 10,540,407,694.72 10,280,937,030.52 Deferred income tax assets 3,747,223,750.60 3,384,951,546.60 Other assets 6,000,056,069.66 6,192,042,326.76
Total assets 614,146,021,596.44 625,574,643,890.17
21 Items 30 September 2018 31 December 2017
LIABILITIES: Short-term loans 6,243,869,025.90 5,991,451,221.43 Short-term financing instrument payables 12,166,702,894.39 33,537,839,142.31 Due to banks and other financial institutions 14,221,000,805.26 9,835,000,000.00 Financial liabilities measured at fair value through profit or loss N/A 46,451,769,979.94 Financial liabilities held for trading 53,039,133,117.56 N/A Derivative financial liabilities 8,697,348,016.33 13,301,231,344.17 Repurchase agreements 90,646,213,135.48 111,619,927,238.00 Customer brokerage deposits 107,312,623,555.66 99,854,890,837.75 Funds payable to securities issuers 149,573,339.23 60,686,527.09 Salaries, bonuses and allowances payables 11,258,990,678.20 11,599,263,746.32 Tax payable 1,809,157,022.69 1,793,375,731.79 Accounts payable 34,424,126,525.98 21,431,582,957.83 Interest payable 2,819,036,368.84 3,031,683,810.32 Accrued liabilities 442,152,175.44 442,152,175.44 Long-term loans 1,120,121,133.38 1,122,187,684.55 Debt instruments issued 106,443,335,687.85 106,219,663,490.04 Deferred income tax liabilities 2,568,472,986.05 2,632,210,767.97 Other liabilities 4,421,237,498.85 3,507,168,412.17
Total liabilities 457,783,093,967.09 472,432,085,067.12
EQUITY: Share capital 12,116,908,400.00 12,116,908,400.00 Capital reserve 54,422,387,219.86 54,445,532,328.88 Other comprehensive income 1,907,506,781.11 2,238,120,065.75 Surplus reserve 8,253,556,728.99 8,164,570,411.36 General reserve 20,979,422,382.26 20,826,927,957.42 Retained earnings 55,111,945,434.59 52,006,986,983.49 Total equity attributable to owners of the parent 152,791,726,946.81 149,799,046,146.90 Non-controlling interests 3,571,200,682.54 3,343,512,676.15
Total equity 156,362,927,629.35 153,142,558,823.05
Total liabilities and equity 614,146,021,596.44 625,574,643,890.17
Legal representative: Chief Financial Officer: Head of accounting department: ZHANG Youjun GE Xiaobo KANG Jiang
22 Statement of Financial Position of the Company (unaudited)
Prepared by: CITIC Securities Company Limited In RMB Yuan
Items 30 September 2018 31 December 2017
ASSETS: Cash and bank balances 63,261,159,636.71 57,405,553,230.23 Including: cash held on behalf of customers 39,475,804,088.80 40,555,287,514.71 Settlement deposits 12,543,276,390.98 14,819,601,387.43 Including: deposits held on behalf of customers 10,149,411,467.19 13,150,363,924.45 Margin accounts 52,533,174,782.00 64,640,790,541.94 Financial assets measured at fair value through profit or loss N/A 103,128,391,814.24 Financial assets held for trading 130,759,396,315.75 N/A Derivative financial assets 6,803,986,394.77 7,047,058,368.50 Reverse repurchase agreements 55,044,216,928.30 115,740,072,889.70 Accounts receivable 9,187,599,116.57 5,883,973,786.45 Interest receivable 3,401,647,765.24 2,596,701,921.37 Refundable deposits 2,072,075,339.36 1,619,536,756.41 Available-for-sale financial assets N/A 43,758,401,252.87 Other debt instruments investments 25,490,648,374.56 N/A Long-term equity investments 34,842,444,447.63 35,036,041,785.26 Other equity instruments investments 17,127,717,955.37 N/A Investment properties 63,295,449.31 65,375,240.32 Fixed assets 399,586,530.88 451,714,425.63 Construction in progress 382,047,781.31 341,958,244.96 Intangible assets 2,176,630,610.26 2,244,593,633.14 Goodwill 43,500,226.67 43,500,226.67 Deferred income tax assets 2,415,676,547.76 2,131,826,624.67 Other assets 14,233,414,392.13 12,867,860,498.04
Total assets 432,781,494,985.56 469,822,952,627.83
23 Items 30 September 2018 31 December 2017
LIABILITIES: Short-term financing instrument payables 12,644,947,962.89 34,250,307,772.56 Due to banks and other financial institutions 14,221,000,805.26 9,835,000,000.00 Financial liabilities measured at fair value through profit or loss N/A 7,619,769,055.20 Financial liabilities held for trading 8,947,002,192.55 N/A Derivative financial liabilities 8,253,732,320.40 13,019,242,698.24 Repurchase agreements 77,025,572,044.80 100,030,181,446.77 Customer brokerage deposits 48,016,833,499.96 52,517,124,349.27 Funds payable to securities issuers 149,573,339.23 60,686,527.09 Salaries, bonuses and allowances payables 7,360,687,026.83 7,320,304,638.42 Tax payable 1,050,051,150.98 1,047,272,942.27 Accounts payable 21,179,559,388.06 16,147,839,871.36 Interest payable 2,357,787,821.53 2,791,537,075.85 Accrued liabilities 435,666,677.12 435,666,677.12 Debt instruments issued 93,805,358,656.57 92,094,308,853.65 Deferred income tax liabilities 2,302,406,803.53 1,575,317,814.57 Other liabilities 10,931,910,858.81 7,861,814,329.98
Total liabilities 308,682,090,548.52 346,606,374,052.35
EQUITY: Share capital 12,116,908,400.00 12,116,908,400.00 Capital reserve 54,362,218,074.34 54,386,255,562.99 Other comprehensive income 1,819,515,768.06 1,362,769,478.03 Surplus reserve 6,263,770,251.95 6,263,770,251.95 General reserve 18,751,859,642.16 18,744,385,324.92 Retained earnings 30,785,132,300.53 30,342,489,557.59
Total equity 124,099,404,437.04 123,216,578,575.48
Total liabilities and equity 432,781,494,985.56 469,822,952,627.83
Legal representative: Chief Financial Officer: Head of accounting department: ZHANG Youjun GE Xiaobo KANG Jiang
24 Income Statement of the Group (unaudited)
Prepared by: CITIC Securities Company Limited In RMB Yuan
Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September Items 2018 2017 2018 2017
1. Operating revenue 7,216,734,601.64 9,805,485,779.70 27,209,287,878.05 28,499,832,569.34 Net fee and commission income 3,808,563,483.04 4,832,929,509.21 12,905,445,993.85 13,886,110,217.04 Including: Net fee income from brokerage 1,735,485,992.74 2,271,289,731.11 5,847,770,717.50 6,271,050,828.40 Net fee income from investment banking 679,677,994.16 1,205,637,428.78 2,429,720,857.02 3,047,758,941.86 Net fee income from asset management 1,230,693,888.36 1,238,655,753.96 4,142,128,975.02 3,908,125,382.38 Net interest income 566,524,958.41 657,631,748.12 1,498,415,956.61 1,952,171,695.51 Including: Interest income 3,127,734,336.21 3,204,359,452.08 10,062,614,155.72 9,465,072,140.72 Finance costs 2,561,209,377.80 2,546,727,703.96 8,564,198,199.11 7,512,900,445.21 Investment income (loss denoted by “-”) 1,934,183,371.97 3,124,242,515.15 4,029,531,869.35 7,338,351,955.69 Including: Investment income from associates and joint ventures 70,921,708.83 45,487,169.40 456,759,123.30 289,458,001.13 Gains from disposal of assets (loss denoted by “-”) -218,250.72 301,117.01 68,447.47 449,351.41 Gains and losses arising from changes in the fair value (loss denoted by “-”) -263,920,209.94 -764,839,820.07 2,975,162,822.70 -470,756,575.71 Foreign exchange gains and losses (loss denoted by “-”) 424,641,532.67 94,130,240.01 748,387,233.03 -52,829,276.81 Other income 1,881,597.24 108,408,860.12 5,563,329.40 135,828,872.32 Other operating income 745,078,118.97 1,752,681,610.15 5,046,712,225.64 5,710,506,329.89 2. Operating expenses 4,971,610,920.26 5,796,686,582.84 17,600,069,785.28 17,477,260,388.90 Tax and surcharges 60,448,212.80 65,731,689.98 195,213,760.04 189,190,766.89 Business and administrative expenses 3,697,833,532.00 4,157,959,300.93 11,295,089,636.97 11,715,369,891.32 Impairment losses — -13,995,709.17 — 245,754,961.67 Expected credit losses 530,397,939.31 N/A 1,232,190,473.02 N/A Other operating expenses and costs 682,931,236.15 1,586,991,301.10 4,877,575,915.25 5,326,944,769.02 3. Operating profit (loss denoted by “-”) 2,245,123,681.38 4,008,799,196.86 9,609,218,092.77 11,022,572,180.44 Add: Non-operating income 10,418,942.49 72,659,080.59 56,018,857.45 102,315,429.87 Less: Non-operating expenses 12,718,140.46 1,554,456.49 27,993,057.89 208,795,354.15 4. Profit before income tax (Gross loss denoted by “-”) 2,242,824,483.41 4,079,903,820.96 9,637,243,892.33 10,916,092,256.16 Less: Income tax expense 382,953,692.60 924,366,148.96 1,954,592,131.11 2,577,753,372.17
25 Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September Items 2018 2017 2018 2017
5. Profit for the period (net loss denoted by “-”) 1,859,870,790.81 3,155,537,672.00 7,682,651,761.22 8,338,338,883.99 (I) By continuity of operations 1. Net profit from continuing operations (net loss denoted by “-”) 1,859,870,790.81 3,155,537,672.00 7,682,651,761.22 8,338,338,883.99 2. Net profit from discontinued operations (net loss denoted by “-”) — — — — (II) By ownership 1. Net profit attributable to owners of the parent 1,749,437,088.53 3,000,517,810.99 7,314,589,126.02 7,927,026,699.60 2. Non-controlling interests 110,433,702.28 155,019,861.01 368,062,635.20 411,312,184.39 6. Other comprehensive income, net of tax 1,063,283,733.98 326,526,125.61 761,149,938.98 654,638,036.31 Other comprehensive income attributable to owners of the parent, net of tax 992,980,120.97 338,266,665.61 708,244,449.14 644,532,970.75 (I) Other comprehensive income that could not be reclassified to profit or loss 340,326,348.48 — -204,616,817.57 — 1. Changes in fair value of other equity instruments investments 340,326,348.48 N/A -198,392,115.00 N/A 2. Other comprehensive income that could not be reclassified to profit or loss under equity method — — -6,224,702.57 — (II) Other comprehensive income that will be subsequently reclassified to profit or loss 652,653,772.49 338,266,665.61 912,861,266.71 644,532,970.75 1. Other comprehensive income that may be reclassified to profit or loss under equity method — — 17,026,249.04 -346,511.19 2. Gains or losses arising from changes in fair value of available-for-sale financial assets N/A 703,176,775.78 N/A 1,409,122,665.69 3. Change in fair value of other debt instruments investments 21,257,010.18 N/A 71,430,715.23 N/A 4. Provision for credit impairment of other debt instruments investments -16,409,590.17 N/A 13,256,249.19 N/A 5. Foreign currency translation reserve 689,780,007.15 -366,909,958.90 846,680,329.23 -764,615,347.01 6. Others -41,973,654.67 1,999,848.73 -35,532,275.98 372,163.26 Other comprehensive income attributable to non-controlling interest, net of tax 70,303,613.01 -11,740,540.00 52,905,489.84 10,105,065.56
26 Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September Items 2018 2017 2018 2017
7. Total comprehensive income for the period 2,923,154,524.79 3,482,063,797.61 8,443,801,700.20 8,992,976,920.30 Attributable to owners of the parent 2,742,417,209.50 3,338,784,476.60 8,022,833,575.16 8,571,559,670.35 Attributable to non-controlling interests 180,737,315.29 143,279,321.01 420,968,125.04 421,417,249.95 8. Earnings per share: (1) Basic earnings per share (RMB/share) 0.14 0.24 0.60 0.65 (2) Diluted earnings per share (RMB/share) 0.14 0.24 0.60 0.65
Legal representative: Chief Financial Officer: Head of accounting department: ZHANG Youjun GE Xiaobo KANG Jiang
27 Income Statement of the Company (unaudited)
Prepared by: CITIC Securities Company Limited In RMB Yuan
Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September Items 2018 2017 2018 2017
1. Operating revenue 4,472,483,383.06 4,724,620,008.59 14,112,597,873.00 12,943,149,764.47 Net fee and commission income 1,842,701,130.43 2,912,052,453.29 6,738,881,634.72 8,218,879,167.60 Including: Net fee income from brokerage 866,077,172.29 1,297,021,943.00 3,102,173,697.75 3,364,132,791.29 Net fee income from investment banking 460,159,803.75 1,134,093,875.31 1,918,931,513.69 2,818,861,833.37 Net fee income from asset management 362,561,220.36 408,378,451.08 1,326,434,418.10 1,420,054,718.20 Net interest income 443,323,105.27 368,369,313.73 1,104,404,615.90 1,026,451,016.51 Including: Interest income 2,567,803,130.21 2,710,477,954.92 8,414,337,269.09 7,720,186,103.60 Finance costs 2,124,480,024.94 2,342,108,641.19 7,309,932,653.19 6,693,735,087.09 Investment income (loss denoted by “-”) 1,470,517,345.78 1,443,155,302.43 3,043,677,109.48 3,242,795,373.09 Including: Investment income from associates and joint ventures 2,134,006.08 4,398,619.22 135,838,604.55 121,494,788.32 Gains from disposal of assets (loss denoted by “-”) -274,299.82 128,365.66 -122,067.42 1,287,869.49 Gains and losses arising from changes in the fair value (loss denoted by “-”) 445,408,418.27 14,080,051.93 2,680,811,932.62 520,382,486.82 Foreign exchange gains and losses (loss denoted by “-”) 264,382,089.37 -21,103,586.01 517,908,206.43 -109,006,359.70 Other income — — 2,528,590.08 15,980,647.49 Other operating income 6,425,593.76 7,938,107.56 24,507,851.19 26,379,563.17 2. Operating expenses 2,415,652,994.22 1,894,117,975.77 7,030,348,772.93 5,800,859,342.02 Tax and surcharges 28,780,199.74 36,362,238.66 99,784,655.66 112,738,948.38 Business and administrative expenses 1,860,873,743.12 1,888,865,442.17 5,744,874,360.21 5,524,990,647.90 Impairment losses — -31,802,968.73 — 161,049,954.73 Expected credit losses 525,305,787.69 N/A 1,183,609,966.05 N/A Other operating expenses and costs 693,263.67 693,263.67 2,079,791.01 2,079,791.01 3. Operating profit (loss denoted by “-”) 2,056,830,388.84 2,830,502,032.82 7,082,249,100.07 7,142,290,422.45 Add: Non-operating income 7,454,160.62 10,989,030.77 50,095,640.36 34,716,067.67 Less: Non-operating expenses 4,792,212.26 1,169,989.32 5,949,259.16 16,594,922.31 4. Profit before income tax (Gross loss denoted by “-”) 2,059,492,337.20 2,840,321,074.27 7,126,395,481.27 7,160,411,567.81 Less: Income tax expense 490,411,685.78 665,064,313.25 1,621,961,185.36 1,716,143,739.19
28 Three months Three months Nine months Nine months ended ended ended ended 30 September 30 September 30 September 30 September Items 2018 2017 2018 2017
5. Profit for the period (net loss denoted by “-”) 1,569,080,651.42 2,175,256,761.02 5,504,434,295.91 5,444,267,828.62 (1) Net profit from continuing operations (net loss denoted by “-”) 1,569,080,651.42 2,175,256,761.02 5,504,434,295.91 5,444,267,828.62 (2) Net profit from discontinued operations (net loss denoted by “-”) — — — — 6. Other comprehensive income, net of tax 608,294,918.24 499,744,719.80 219,422,047.74 1,051,942,436.83 (I) Other comprehensive income that could not be reclassified to profit or loss 340,326,348.48 — -204,616,817.57 — 1. Changes in fair value of other equity instruments investments 340,326,348.48 N/A -198,392,115.00 N/A 2. Other comprehensive income that could not be reclassified to profit or loss under equity method — — -6,224,702.57 — (II) Other comprehensive income that will be subsequently reclassified to profit or loss 267,968,569.76 499,744,719.80 424,038,865.31 1,051,942,436.83 1. Other comprehensive income that may be reclassified to profit or loss under equity method — N/A 17,026,249.04 -346,511.19 2. Gains or losses arising from changes in fair value of available-for-sale financial assets N/A 499,744,719.80 N/A 1,052,288,948.02 3. Change in fair value of other debt instruments investments 284,378,159.93 N/A 393,756,367.08 N/A 4. Provision for credit impairment of other debt instruments investments -16,409,590.17 N/A 13,256,249.19 N/A 7. Total comprehensive income 2,177,375,569.66 2,675,001,480.82 5,723,856,343.65 6,496,210,265.45
Legal representative: Chief Financial Officer: Head of accounting department: ZHANG Youjun GE Xiaobo KANG Jiang
29 Statement of Cash Flows of the Group (unaudited)
Prepared by: CITIC Securities Company Limited In RMB Yuan
Nine months ended Nine months ended Items 30 September 2018 30 September 2017
1. Cash flows from operating activities: Net increase/(decrease) in disposal of financial assets measured at fair value through profit or loss N/A 16,364,036,724.60 Interest, fee and commission received 23,895,966,026.25 27,150,820,214.61 Net increase/(decrease) in due to banks and other financial institutions 4,386,000,805.26 -3,250,000,000.00 Net increase/(decrease) in repurchase agreements 34,267,718,349.62 -63,044,339,648.64 Net decrease in margin accounts 13,214,244,291.37 -4,814,846,380.92 Net increase/(decrease) in customer brokerage deposits 5,880,303,255.31 -28,903,692,013.46 Cash received from other operating activities 7,664,796,471.14 22,187,267,306.86 Total cash inflow from operating activities 89,309,029,198.95 -34,310,753,796.95 Net increase/(decrease) in disposal of financial assets held for trading 11,882,658,783.09 N/A Interest, fee and commission paid 7,281,827,802.27 7,101,554,797.27 Cash payments for employees 8,395,881,856.56 8,282,258,430.14 Tax expenses paid 3,921,085,415.89 4,297,777,467.08 Cash paid for other operating activities 13,195,908,080.41 22,245,098,158.49 Total cash outflow from operating activities 44,677,361,938.22 41,926,688,852.98 Net cash inflow/(outflow) from operating activities 44,631,667,260.73 -76,237,442,649.93 2. Cash flows from investing activities: Cash received from investment 78,770,828.07 21,552,774,608.87 Dividend income received 402,287,303.30 27,525,865.27 Cash received from other investing activities 7,848,381.43 533,983,950.16 Total cash inflow from investing activities 488,906,512.80 22,114,284,424.30 Cash paid for investments 2,963,316,566.93 458,694,631.21 Purchases of property and equipment, intangible assets and other long-term assets 273,961,634.47 219,876,567.51 Total cash outflow from investing activities 3,237,278,201.40 678,571,198.72 Net cash inflow/(outflow) from investing activities -2,748,371,688.60 21,435,713,225.58
30 Nine months ended Nine months ended Items 30 September 2018 30 September 2017
3. Cash flows from financing activities: Capital injection 1,000,000.00 11,329,982.88 Including: capital injection into subsidiaries by non-controlling shareholders 1,000,000.00 11,329,982.88 Cash inflows from loans 9,862,661,762.66 2,926,662,321.49 Cash inflows from bond issuance 88,598,107,527.83 142,399,234,790.71 Cash received from other financing activities — 200,208,107.00 Total cash inflow from financing activities 98,461,769,290.49 145,537,435,202.08 Cash paid for debt redemption 121,169,633,225.57 107,150,321,965.74 Dividend and interest paid 9,737,430,913.20 7,789,255,361.44 Including: dividend and interest paid to non-controlling shareholders 192,084,640.68 127,991.02 Cash paid for other financing activities 843,864,840.96 2,503,868,004.77 Total cash outflow from financing activities 131,750,928,979.73 117,443,445,331.95 Net cash inflow/(outflow) from financing activities -33,289,159,689.24 28,093,989,870.13 4. Effect of exchange rate changes on cash and cash equivalents 1,597,546,267.51 -1,153,134,814.22 5. Net increase/(decrease) in cash and cash equivalents 10,191,682,150.40 -27,860,874,368.44 Add: cash and cash equivalents at the beginning of the period 123,325,291,911.56 163,107,133,282.82 6. Cash and cash equivalents at the end of the period 133,516,974,061.96 135,246,258,914.38
Legal representative: Chief Financial Officer: Head of accounting department: ZHANG Youjun GE Xiaobo KANG Jiang
31 Statements of Cash Flows of the Company (unaudited)
Prepared by: CITIC Securities Company Limited In RMB Yuan
Nine months ended Nine months ended Items 30 September 2018 30 September 2017
1. Cash flows from operating activities: Net increase/(decrease) in disposal of financial assets measured at fair value through profit or loss N/A 17,474,851,992.94 Interest, fee and commission received 16,992,017,768.35 18,128,063,007.65 Net increase/(decrease) in due to banks and other financial institutions 4,386,000,805.26 -1,750,000,000.00 Net increase/(decrease) in repurchase agreements 36,830,828,055.35 -62,772,237,330.06 Net decrease in margin accounts 12,012,358,596.07 -4,630,921,693.18 Cash received from other operating activities 8,270,363,844.47 1,781,675,097.51 Total cash inflow from operating activities 78,491,569,069.50 -31,768,568,925.14 Net increase/(decrease) in disposal of financial assets held for trading 22,750,473,154.68 N/A Net increase/(decrease) in customer brokerage deposits 4,500,290,849.31 28,660,954,570.27 Interest, fee and commission paid 4,372,067,332.49 4,727,209,112.28 Cash payments for employees 4,186,215,106.59 4,086,775,093.05 Tax expenses paid 2,164,569,584.40 2,891,136,077.68 Cash paid for other operating activities 6,647,237,977.85 2,673,947,395.95 Total cash outflow from operating activities 44,620,854,005.32 43,040,022,249.23 Net cash inflow/(outflow) from operating activities 33,870,715,064.18 -74,808,591,174.37 2. Cash flows from investing activities: Cash received from investment — 26,236,840,535.42 Dividend income received 624,155,920.37 1,200,000.00 Cash received from other investing activities 7,137,974.03 31,089,470.46 Total cash inflow from investing activities 631,293,894.40 26,269,130,005.88 Cash paid for investments 2,199,593,650.61 11,581,729,200.00 Purchases of property and equipment, intangible assets and other long-term assets 133,100,440.87 100,774,716.25 Total cash outflow from investing activities 2,332,694,091.48 11,682,503,916.25 Net cash inflow/(outflow) from investing activities -1,701,400,197.08 14,586,626,089.63
32 Nine months ended Nine months ended Items 30 September 2018 30 September 2017
3. Cash flows from financing activities: Cash received from bond issuance 84,660,876,599.34 141,614,114,746.86 Total cash inflow from financing activities 84,660,876,599.34 141,614,114,746.86 Cash paid for debt redemption 104,432,215,089.00 98,555,856,304.00 Dividend and interest paid 9,336,603,173.84 7,305,627,777.49 Total cash outflow from financing activities 113,768,818,262.84 105,861,484,081.49 Net cash inflow/(outflow) from financing activities -29,107,941,663.50 35,752,630,665.37 4. Effect of exchange rate changes on cash and cash equivalents 517,908,206.43 -109,006,359.70 5. Net increase/(decrease) in cash and cash equivalents 3,579,281,410.03 -24,578,340,779.07 Add: cash and cash equivalents at the beginning of the period 72,225,154,617.66 103,134,516,956.97 6. Cash and cash equivalents at the end of the period 75,804,436,027.69 78,556,176,177.90
Legal representative: Chief Financial Officer: Head of accounting department: ZHANG Youjun GE Xiaobo KANG Jiang
4.2 Audit report
□ Applicable √ Not applicable
By order of the Board CITIC Securities Company Limited ZHANG Youjun Chairman
Beijing, the PRC 30 October 2018
As at the date of this announcement, the executive Directors of the Company are Mr. ZHANG Youjun, Mr. YIN Ke, Mr. YANG Minghui; the non-executive Director is Mr. KUANG Tao; and the independent non-executive Directors are Mr. LIU Ke, Mr. HE Jia and Mr. CHAN, Charles Sheung Wai.
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