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. 恒投證券 HENGTOU SECURITIES (A joint stock company incorporated in the People’s Republic of China with limited liability under the Chinese corporate name “ 恒 泰 證 券股份有限公司 ” and carrying on business in Hong Kong as “ 恒投證券 ” (in Chinese) and “HENGTOU SECURITIES” (in English)) (the “Company”) (Stock Code: 01476) ANNUAL RESULTS ANNOUNCEMENT 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 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 announcement of annual results and has been reviewed by the audit committee of the Company. The Board recommended that no profit distribution will be made for the year ended 31 December 2019. PUBLICATION OF ANNUAL RESULTS ANNOUNCEMENT AND ANNUAL REPORT This annual results announcement will be published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.cnht.com.cn). The 2019 annual report of the Company will be dispatched to the shareholders of the Company and published on the websites of The Stock Exchange of Hong Kong Limited and the Company in due course but no later than the end of April 2020. By order of the Board Pang Jiemin Chairman Beijing, the PRC 27 March 2020 As at the date of this announcement, the Board comprises Mr. Pang Jiemin and Mr. Wu Yigang as executive Directors; Mr. Yu Lei, Mr. Wang Linjing, Ms. Dong Hong and Ms. Gao Liang as non-executive Directors; Dr. Lam Sek Kong, Mr. Xie Deren and Mr. Dai Genyou as independent non-executive Directors. Contents IMPORTANT NOTICE 2 CHAIRMAN'S STATEMENT 3 SECTION 1 DEFINITIONS 4 SECTION 2 MATERIAL RISKS 9 SECTION 3 COMPANY PROFILE 10 SECTION 4 SUMMARY OF ACCOUNTING AND BUSINESS DATA 21 SECTION 5 MANAGEMENT DISCUSSION AND ANALYSIS 28 SECTION 6 REPORT OF THE BOARD OF DIRECTORS 81 SECTION 7 OTHER MATERIAL PARTICULARS 95 SECTION 8 EQUITY (CAPITAL) CHANGES AND SUBSTANTIAL SHAREHOLDERS 110 SECTION 9 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES 116 SECTION 10 CORPORATE GOVERNANCE REPORT 137 APPENDIX PARTICULARS OF SECURITIES BRANCHES 170 INDEPENDENT AUDITOR’S REPORT 186 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 194 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 196 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 198 CONSOLIDATED STATEMENT OF CASH FLOWS 199 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 201 Important Notice The Board, Supervisory Committee, Directors, Supervisors and senior management of the Company undertake that the content of this report is true, accurate, complete and without any false record, misrepresentation or material omission and are severally and jointly liable therefor. This report has been considered and approved at the sixth meeting of the fourth session of the Board and the sixth meeting of the fourth session of the Supervisory Committee where all the Directors and Supervisors were present, respectively. No Directors, Supervisors or senior management of the Company declared that they could not guarantee or had any objection to the truthfulness, accuracy and completeness of this report. The financial report for 2019 prepared by the Company, in accordance with the International Financial Reporting Standards and China’s Accounting Standard for Business Enterprises, has been audited by Grant Thornton Hong Kong Limited and Grant Thornton Certified Public Accountants, respectively, each of whom had issued a standard unqualified audit report. All amounts set out in this report are stated in RMB unless otherwise stated. Mr. Pang Jiemin (the chairman of the Board), Mr. Niu Zhuang (the president) and Ms. Yang Shufei (the chief financial officer) declared that they undertake the financial statements in this report are true, accurate and complete. The forward-looking statements including future plans and development strategies involved in this report do not constitute the Company’s substantive commitment to investors. The investors are advised to pay attention to investment risks. 2 HENGTOU SECURITIES Chairman’s Statement In 2019, CSRC formally proposed twelve key tasks for comprehensively deepening the reform of the capital market, thereby the new cycle of market-oriented reform of the capital market being restarted, and the degree of market-oriented reform being constantly enhanced. At the same time, the financial industry continued to strengthen its opening-up efforts with the intensive launch of the new policy and the smooth introduction of the sci-tech innovation board, the adjustment of the policy of merger and reorganization to the market direction, and simultaneous launch of CSI 300, a new index option variety in three major stock exchanges. The high-quality development in the securities industry will be effectively promoted by the comprehensive reform of the capital market and the continuous improvement of the top-level system. In 2019, the domestic securities market performed well on the whole. The SSE Composite Index rose by 22.30%, the SZSE Component Index rose by 44.08%, the SSE SME Component Index and the GEM Index rose by 41.03% and 43.79%, respectively. In 2019, the operating results of the securities industry improved significantly. The Company actively seized market opportunities to promote each business development. The Group's revenue from proprietary businesses, private equity investment businesses and investment banking businesses increased substantially. In 2020, with the further deepening of capital market reform, the Company will follow the industry trend and external regulatory requirements, seek transformation and upgrading of business structure and profit mode, and accelerate the transformation of brokerage business, asset management business and other businesses, laying a foundation for sustainable and high quality development in the future; the Company will change the status quo of business homogeneity and build a differentiated core competitive advantage. The Company will further strengthen the construction of compliance culture and comprehensive risk management system, thus improving the overall compliance management level and risk prevention and control capacity of the Company; the Company will improve that administrative management level of the back office, and deepen the construction of the communication and cooperation mechanism between the front office and the back office; the Company will optimize the talent structure system, so as to enhance the core competitiveness of human resources; the Company will strengthen information system construction thoroughly to provide guarantee for business development. The Company will unify, forge ahead and strive hard to make progress in all businesses of the Company. Pang Jiemin Chairman Beijing, the PRC 27 March 2020 2019 ANNUAL REPORT 3 Section 1 Denitions In this report, unless the context otherwise requires, the following terms and expressions have the meanings set forth below: APP application, which generally refers to mobile applications Articles of Association the articles of association of the Company, as amended from time to time Baotou Huazi Baotou Huazi Industry Co., Ltd. (包頭華資實業股份有限公司), listed on the Shanghai Stock Exchange (stock code: 600191), a substantial shareholder of the Company Board the board of directors of the Company Company or Hengtou Securities a company established as a limited liability company in the PRC on 28 December 1998 and converted into a joint stock company with limited liability under the PRC laws on 3 November 2008 under the corporate name “恒泰証券股份有限 公司” (Hengtai Securities Co., Ltd), and carrying on business in Hong Kong as “恒投證券” (in Chinese) and “HENGTOU SECURITIES” (in English) as approved by and registered with the Registrar of Companies in Hong Kong on 27 April 2015, and whose H shares are listed on the Main Board of the Hong Kong Stock Exchange Corporate Governance Code the Corporate Governance Code as set out in Appendix 14 to the Listing Rules CSRC the China Securities Regulatory Commission (中國證券監督管理委員會) Director(s) director(s) of the Company Domestic Share(s) ordinary share(s) with a nominal value of RMB1.00 each in the share capital of the Company, which are subscribed for or credited as paid-up in RMB ETF Exchange Traded Funds, an open index fund available for trading, commonly known as Exchange Traded Funds, which is an open fund listed for trading on a stock exchange with variable portions of the fund components end of Reporting Period 31 December 2019 Finance Street Capital Beijing Finance Street Capital Management Centre (北京金融街資本運營中心), which holds 100% equity interest in Huarong Infrastructure 4 HENGTOU SECURITIES Section 1 Denitions (Continued) Finance Street Investment Beijing Finance Street Investment (Group) Co., Ltd. (北京金融街投資（集團）有限 公司), formerly known as Beijing Finance Street Construction Group Co., Ltd. (北 京金融街建設集團), a subsidiary of SASAC Xicheng District and a shareholder of the Company