Contents 1 About Us 004 Important Notice 006 Definitions 008 Company Profile 014 Summary of the Results 018 Major Events of the Company 2 Operating Analysis and Strategies 024 Summary of the Company’s Business 036 Management Discussion and Analysis 086 Major Events 3 Corporate Governance 114 Changes in Ordinary Shares and Shareholders 120 Directors, Supervisors and Senior Management 124 Corporate Bonds 4 Financial Report and Documents for Inspection 134 Report on Review of Interim Financial Report 211 Index of Documents for Inspection 211 Information Disclosure of Securities Companies 212 Appendix 1 ABOUT US HU AT AI S E CU R I T I E S HU AT AI S E CU R I T I E S Important Notice Definitions Company Profile Summary of the Results Major Events of the Company 004 006 008 014 018 HUATAI SECURITIES IMPORTANT NOTICE I. The Board of Directors, the Supervisory Committee, Directors, Supervisors and senior management of the Company undertake that the information in this interim report is true, accurate and complete and contains no false record, misleading statement or material omission, and assume individual and joint legal liabilities to the information contained herein. II. All Directors of the Company have been present at the Board meeting. III. This interim report has not been audited. IV. Zhang Wei, the person in charge of the Company, Jiao Xiaoning, the person in charge of accounting, and Fei Lei, the officer in charge of the accounting office (head of accounting department), hereby warrant and guarantee that the financial report contained in the interim report is true, accurate and complete. V. The profit distribution proposal or the reserve capitalization proposal for the Reporting Period considered by the Board The Board of the Company did not prepare any profit distribution proposal or capital reserve capitalization proposal when considering the interim report. VI. Risk statement with respect to the forward-looking statements Forward-looking statements including future plans and development strategies involved in this interim report do not constitute the Company’s substantive commitments to investors. The investors are advised to pay attention to investment risks. VII. There is no non-operating misappropriation of funds of the Company by any controlling shareholders or their related parties. VIII. The Company has not provided any external guarantees in violation of the decision-making procedures. IX. The interim report is prepared by the Company in both Chinese and English. In the event of any inconsistency, the Chinese version shall prevail. X. Warning on major risks General economic and political conditions such as macroeconomic and monetary policies, laws and regulations influencing financial and securities industries, rising and falling trends in commercial and financial industries, inflation, exchange rate fluctuations, availability of long and short-term market capital sources, financing costs as well as interest rate levels and fluctuations may have an impact on the Company’s business. Besides, like for other companies in the securities industry, inherent risks in the securities market such as market volatility and trading volume may also affect the Company’s business. The Company cannot guarantee the sustainability of favorable political, economic and market conditions. Main risks in business operation include: policy risks from national macro-control measures and changes in relevant laws, regulations, regulatory policies and transaction rules in securities industry, which will adversely influence the business of securities companies; compliance risks from business management or professional activities violating laws, regulations or codes, which cause the Company to be punished by laws, to be imposed of regulatory measures, or to suffer from property loss or reputation loss; legal risks from failure to abide by provisions and requirements in laws and regulations, which make the Company face litigations, compensation and fines and in turn suffer from loss; market risks that cause losses of the Company’s assets as a result of fluctuations in market prices (interest rates, exchange rates, stock 004 2020 INTERIM REPORT prices and commodity prices, etc.); credit risks from default of product or bond issuers or counterparties (clients), which make the Company suffer from loss; liquidity risks from inability to obtain sufficient funds at a reasonable cost to pay matured debts, fulfil other payment obligations and satisfy the capital needs in normal business; information and technology risks such as various technical failures or data leakage of the Company’s information system for internal and external reasons, which consequently cause loss as the information system is impossible to guarantee the stability, high-efficiency and safety of transactions and business management in business realization, response speed, disposal capacity, data encryption and so on; operational risks that cause losses as a result of incomplete or problematic internal procedures, personnel, systems or external incidents; reputation risks from business operation, management and other About Us behaviors or external incidents which lead to negative judgments on the Company from relevant media; money laundering risks from the utilization of the Company’s products or services by criminals to engage in money laundering activities which lead to negative effects on the Company in law, reputation, compliance, operation and other aspects. Besides, with the advancement of the Company’s internationalization strategy, the Company’s business will enter the United States, the United Kingdom, Hong Kong and other countries and regions, and the Company will face more complex market environment and regulatory requirements. Operating Analysis and Strategies Corporate Governance Documents for Inspection Financial Report and 005 HUATAI SECURITIES DEFINITIONS In this report, unless the context otherwise requires, the following terms and expressions have the meanings set forth below: DEFINITIONS OF CAPITALIZED TERMS AND EXPRESSIONS domestic share(s) of the Company with nominal value of RMB1.00 each, which are A Share(s) listed on the Shanghai Stock Exchange and traded in RMB APP Application the articles of association of the Company, as amended, supplemented or otherwise Articles of Association modified from time to time AssetMark AssetMark Financial Holdings, Inc. AoP Assets on Platform Board or Board of Directors the board of Directors of the Company CAGR compound annual growth rate CASBE the China Accounting Standards for Business Enterprises ( ) 中國企業會計準則 the People’s Republic of China, excluding, for the purpose of this interim report, Hong China or the PRC Kong, Macau Special Administrative Region and Taiwan China Southern Asset Management China Southern Asset Management Co., Ltd. ( ) 南方基金管理股份有限公司 Communications Holding Jiangsu Communications Holding Co., Ltd. ( ) 江蘇交通控股有限公司 Company Law of the People’s Republic of China (《中華人民共和國公司法》), as amended Company Law from time to time an index consisting of 300 index sample stocks which are most representative selected CSI 300 Index by the Shanghai Stock Exchange and Shenzhen Stock Exchange jointly with the scale and liquidity as the basic standards CSRC the China Securities Regulatory Commission ( ) 中國證券監督管理委員會 Director(s) the director(s) of the Company FICC fixed income, currency and commodity Fintech financial technology a business activity in which securities firms, as commissioned by futures companies, Future IB Business introduce clients to participate in futures transactions of the futures companies and provide other related services GDR global depository receipt Govtor Capital Govtor Capital Group Co., Ltd. ( ) 江蘇高科技投資集團有限公司 Group, Our Group, we or us the Company and its subsidiaries, and their respective predecessors Jiangsu Guoxin Investment Group Limited ( , formerly known as Guoxin Group 江蘇省國信集團有限公司 Jiangsu Guoxin Asset Management Group Limited ( )) 江蘇省國信資產管理集團有限公司 HKEX Hong Kong Exchanges and Clearing Limited ( ) 香港交易及結算所有限公司 HK$, HKD or HK dollars the lawful currency of Hong Kong Hong Kong the Hong Kong Special Administrative Region of the PRC Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited ( ) 香港聯合交易所有限公司 a joint stock company incorporated in the People’s Republic of China with limited liability under the corporate name (Huatai Securities Co., Ltd.), 华泰证券股份有限公司 converted from our predecessor (Huatai Securities Limited Liability 华泰证券有限责任公司 Company) on December 7, 2007, carrying on business in Hong Kong as “HTSC”, and was registered as a registered non-Hong Kong company under Part 16 of the Companies HTSC, Huatai Securities, our Company, Ordinance under the Chinese approved name of “ ” and 華泰六八八六股份有限公司 Company or Parent Company English name of “Huatai Securities Co., Ltd.”; the H Shares of which have been listed on the main board of Hong Kong Stock Exchange since June 1, 2015 (Stock Code: 6886); the A Shares of which have been listed on the Shanghai Stock Exchange since February 26, 2010 (Stock Code: 601688); the GDRs of which have been listed on the London Stock Exchange since June 2019 (Symbol: HTSC), unless the context otherwise requires, including its predecessor Huatai Securities (Shanghai) Asset Management Co., Ltd. ( Huatai Asset Management 華泰證券（上海）資產管理有限 ), a wholly-owned subsidiary of the Company 公司 Huatai Financial Holdings (Hong Kong) Limited ( ), a Huatai Financial Holdings (Hong Kong) 華泰金融控股（香港）有限公司 wholly-owned subsidiary of Huatai International Huatai Securities (USA), Inc. (