HAITONG SECURITIES CO., LTD. HAITONG SECURITIES CO., LTD. 海通證券股份有限公司 Interim Report 2020 中期報告 2020 INTERIM REPORT CONTENTS IMPORTANT NOTICE 02 Section I DEFINITIONS AND IMPORTANT RISK WARNINGS 03 Section II COMPANY PROFILE AND KEY FINANCIAL INDICATORS 07 Section III SUMMARY OF THE COMPANY’S BUSINESS 14 Section IV REPORT OF THE BOARD OF DIRECTORS 21 Section V SIGNIFICANT EVENTS 68 Section VI CHANGES IN ORDINARY SHARES AND PARTICULARS ABOUT SHAREHOLDERS 100 Section VII PREFERENCE SHARES 107 Section VIII PARTICULARS ABOUT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT 108 Section IX CORPORATE BONDS 112 Section X FINANCIAL REPORT 121 Section XI DOCUMENTS AVAILABLE FOR INSPECTION 122 Section XII INFORMATION DISCLOSURES OF SECURITIES COMPANY 123 02 HAITONG SECURITIES CO., LTD. Interim Report 2020 (H Share) IMPORTANT NOTICE The Board, the Supervisory Committee, Directors, Supervisors and senior management of the Company warrant the truthfulness, accuracy and completeness of the contents of this interim report (the “Report”) and that there is no false representation, misleading statement contained herein or material omission from this Report, for which they will assume joint and several liabilities. This Report was considered and approved at the eleventh meeting of the seventh session of the Board and the sixth 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. PricewaterhouseCoopers has reviewed the 2020 unaudited interim financial information of the Group which was prepared in accordance with IFRSs and issued standard and unqualified auditor’s review report for the Group. All the data in this Report has been presented in Renminbi unless otherwise indicated. Mr. Zhou Jie, the Chairman of the Board of the Company, Mr. Zhang Xinjun, the Chief Financial Officer, and Mr. Ma Zhong, the head of the accounting department, hereby warrant the truthfulness, accuracy and completeness of the financial report contained in the Report. On 5 August 2020, the Company has completed the registration of new A Shares issued under the Non-public Issuance of A Shares, the total number of the shares of the Company increased from 11,501,700,000 to 13,064,200,000 and the registered capital of the Company increased from RMB11,501,700,000 to RMB13,064,200,000. Based on the total share capital of 13,064,200,000 shares, the Company proposes to distribute a cash dividend in the amount of RMB2.80 (tax inclusive) for each 10 shares with a total cash dividends of RMB3,657,976,000.00. 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 data. Forward-looking statements, including future plans and development strategies contained in this Report do not constitute any commitment of the Company to investors. 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 and 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 2020 (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 “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 Co., Ltd. “Haitong Securities” “CSRC” the China Securities Regulatory Commission “Director(s)” the director(s) of Haitong Securities “ETF” exchange traded fund “EUR” the official currency of the Eurozone “FICC” fixed-income instruments, currencies, and commodities “Fullgoal Fund” Fullgoal Fund Management Co., Ltd. (富國基金管理有限公司) “Group” the Company and its subsidiaries “H Share(s)” ordinary shares of the Company with a nominal value of RMB1.00 each, which are subscribed for and traded in HK dollars and are listed on the Hong Kong Stock Exchange “Haitong Bank” Haitong Bank, S.A. 04 HAITONG SECURITIES CO., LTD. Interim Report 2020 (H Share) Section I DEFINITIONS AND IMPORTANT RISK WARNINGS “Haitong Capital” Haitong Capital Investment 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 UT Capital” Haitong UT Capital Group Co., Limited (海通恒信金融集團有限公 司) “Haitong UT” Haitong Unitrust International Financial Leasing Co., Ltd. (海通 恒信國際融資租賃股份有限公司), listed on the Hong Kong Stock Exchange, stock code: 1905 “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 Limited (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 HAITONG SECURITIES CO., LTD. Interim Report 2020 (H Share) 05 Section I DEFINITIONS AND IMPORTANT RISK WARNINGS “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 “Non-public Issuance the non-public issuance of 1,562,500,000 A Shares by the of A Share(s)” Company to a total of 13 placees (including Shanghai Guosheng Group, Shanghai Haiyan Investment, Bright Food Group and Shanghai Electric Group) under general mandate to raise a total amount of gross proceeds of RMB20,000,000,000. The new A Shares issued under the Non-public Issuance of A Shares have been registered in the Shanghai Branch of China Securities Depository and Clearing Corporation Limited on 5 August 2020 “QDII” Qualified Domestic Institutional Investor “Reporting Period” from 1 January 2020 to 30 June 2020 “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 “Supervisor 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 Info” Wind Information Co., Ltd. (萬得信息技術股份有限公司) 06 HAITONG SECURITIES CO., LTD. Interim Report 2020 (H Share) Section I DEFINITIONS AND IMPORTANT RISK WARNINGS II. MATERIAL RISK WARNINGS The business of the Group is highly dependent on the overall economic and market conditions in countries or regions where it operates. The Group’s 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, behaviours of the investors and the international economic conditions. The Group is exposed to various risks in its business operations, primarily including policy risks, whereby the operations of securities firms in general may be subject to material adverse effect caused by national macro-control measures, and changes of laws, regulations, regulatory policies or trading rules applicable to securities industry; international operations risks, whereby its businesses operations in foreign countries may be affected by changes in economic, political and social conditions in such countries or regions; 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, regulations, regulatory requirements, rules, relevant standards