DFZQ — Interim / Quarterly Report 2017

Apr 25, 2017

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company 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 company incorporated in the People’s Republic of China with limited liability under the Chinese corporate name “ 東方證券股份有限公司 ” and carrying on business in Hong Kong as “ 東方證券 ” (in Chinese) and “DFZQ” (in English))

(Stock Code: 03958)

THE FIRST QUARTERLY REPORT FOR THE YEAR 2017

The board (the “ Board ”) of directors (the “ Directors ”) of 東方證券股份有限公司 (the “ Company ”) is pleased to announce the unaudited results of the Company and its subsidiaries for the first quarter ended March 31, 2017, prepared in accordance with General Accepted Accounting Principles of the People’s Republic of China. This announcement is made pursuant to the Inside Information Provisions (as defined in The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Hong Kong Stock Exchange ”) (the “ Listing Rules ”)) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and Rules 13.09(2) and 13.10B of the Listing Rules.

This announcement contains the Chinese original version and English translation of the “Orient Securities Company Limited The First Quarterly Report for the Year 2017” as published on the website of the Shanghai Stock Exchange, and is provided for your reference only. In case of discrepancy between the Chinese version and the English version, the Chinese version shall prevail.

By order of the Board of Directors PAN Xinjun Chairman

Shanghai, PRC April 25, 2017

As at the date of this announcement, the Board of Directors comprises Mr. PAN Xinjun and Mr. JIN Wenzhong as executive Directors; Mr. WU Jianxiong, Mr. ZHANG Qian, Mr. WU Junhao, Mr. CHEN Bin, Mr. LI Xiang, Mr. XU Jianguo, Ms. HUANG Laifang and Mr. ZHOU Yao as non-executive Directors; and Mr. LI Zhiqiang, Mr. XU Guoxiang, Mr. TAO Xiuming, Mr. WEI Anning, Mr. PAN Fei and Mr. XU Zhiming as independent non-executive Directors.

– 1 –

ORIENT SECURITIES COMPANY LIMITED

THE FIRST QUARTERLY REPORT FOR THE YEAR 2017

– 2 –

CONTENTS

I.	IMPORTANT NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
II.	COMPANY PROFILE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
III.	MATERIAL EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
IV.	APPENDICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13

– 3 –

I. IMPORTANT NOTICE

1. The Board, the supervisory committee of the Company and its Directors, supervisors and senior management warrant that the information contained herein is true, accurate and complete and there are no false representations, misleading statements contained in or material omissions from this quarterly report, and severally and jointly accept legal liability.

2. All the Directors attended the Board meeting to consider this quarterly report.

3. The person-in-charge of the Company, Mr. Pan Xinjun, and the accounting chief and person-incharge of the accounting department (head of the accounting department), Mr. Zhang Jianhui, warrant the truthfulness, accuracy and completeness of the financial statements set out in this quarterly report.

4. This first quarterly report of the Company was unaudited.

II. COMPANY PROFILE

2.1 Key financial data

Unit: RMB

			Increase/decrease
			recorded at the end
			of this reporting
			period as compared
			with the end of
	At the end of	At the end of	the previous year
	this reporting period	the previous year	(%)
Total assets	203,790,447,060.91	212,411,087,389.26	-4.06
Net assets attributable to
the shareholders of
the Company	40,974,004,084.97	40,482,898,531.88	1.21
		From	Increase/decrease
	From	the beginning of	as compared with
	the beginning of	the previous year	the corresponding
	the year to	to the end of	period of
	the end of	the reporting period	the previous year
	this reporting period	of the previous year	(%)
Net cash flows
from operating activities	-9,744,040,027.56	-4,509,016,858.62	N/A

– 4 –

		From	Increase/decrease
	From	the beginning of	as compared with
	the beginning of	the previous year	the corresponding
	the year to	to the end of	period of
	the end of	the reporting period	the previous year
	this reporting period	of the previous year	(%)
Operating income	2,128,887,867.14	1,380,998,457.49	54.16
Net profit attributable to the
shareholders of
the Company	844,297,461.03	423,098,320.77	99.55
Net profit attributable to the
shareholders of the
Company after deducting
non-recurring profit or loss	638,128,835.43	420,379,251.57	51.80
Weighted average returns			Increase by 0.84
on net assets (%)	2.07	1.23	percentage points
Basic earnings per share
(RMB/Share)	0.14	0.08	75.00
Diluted earnings per share
(RMB/Share)	0.14	0.08	75.00
Non-recurring items and amounts
✓Applicable□Not Applicable

Unit: RMB

Amounts Items for this period Explanations Gains and losses from disposals of non-current assets -78,650.67 Loss on disposal of fixed assets Government grants recognized in current profit 279,565,599.73 Government grants or loss, excluding those closely related to the Company’s normal operations and granted on an ongoing basis under the State’s policies according to certain quota of amount or volume Other non-operating incomes and expenses except -95,448.37 items above Amount for the effect of non-controlling interests -3,374,999.92 (net of tax) Amount for the effect of income tax -69,847,875.17 Total 206,168,625.60

– 5 –

• 2.2 The table below sets out the total number of shareholders, and the shareholding of the top ten shareholders and the top ten shareholders of circulating shares (or shareholders not subject to restriction on sales) as at the end of the reporting period

Unit: Share

			159,488 shareholders, among which	159,488 shareholders, among which	159,488 shareholders, among which	159,421 were holders of	159,421 were holders of
Total number of shareholders (accounts)			A Shares and 67 were holders				of H Shares
	Shareholding of the top		ten shareholders
	Number of
	shares held
	as at the end of		Number of
	the reporting	Percentage	restricted				Nature of
Name of shareholders (Full name)	period	(%)	shares held	Pledged or frozen			shareholders
				Status of	Number
				shares	of shares
Shenergy (Group) Company Limited	1,537,522,422	24.74	1,537,522,422	Nil		–	State-owned legal
							person
Hong Kong Securities Clearing	1,026,968,400	16.52	–	Nil		–	Foreign legal person
Company Nominees Limited
Shanghai Haiyan Investment	286,271,333	4.61	–	Nil		–	State-owned legal
Management Company Limited							person
China Securities Finance Corporation	252,446,920	4.06	–	Nil		–	State-owned legal
Limited							person
Shanghai United Media Group	246,878,206	3.97	–	Nil		–	State-owned legal
							person
Shanghai Electric (Group) Corporation	194,073,938	3.12	194,073,938	Nil		–	State-owned legal
							person
China Post Group Corporation	187,866,579	3.02	–	Nil		–	State-owned legal
							person
Shanghai Jinqiao Export Processing	165,953,687	2.67	–	Nil		–	Domestic
Zone Development Co., Ltd.							non-state-owned
(上海金橋出口加工區開發股份							legal person
有限公司)
Greatwall Information Industry	143,000,000	2.30	–	Pledged	20,000,000		Domestic
Co., Ltd.							non-state-owned
							legal person
Shanghai Construction Group Co., Ltd.	133,523,008	2.15	133,523,008	Nil		–	State-owned legal
							person

– 6 –

Shareholding of the top ten shareholders of non-restricted shares

	Number of
	circulating
	non-restricted
Name of shareholders	shares held	Type and number	of shares
		Type	Number
Hong Kong Securities Clearing	1,026,968,400	Overseas listed	1,026,968,400
Company Nominees Limited		foreign shares
Shanghai Haiyan Investment	286,271,333	RMB ordinary	286,271,333
Management Company Limited		shares
China Securities Finance Corporation	252,446,920	RMB ordinary	252,446,920
Limited		shares
Shanghai United Media Group	246,878,206	RMB ordinary	246,878,206
		shares
China Post Group Corporation	187,866,579	RMB ordinary	187,866,579
		shares
Shanghai Jinqiao Export Processing	165,953,687	RMB ordinary	165,953,687
Zone Development Co., Ltd.		shares
(上海金橋出口加工區開發股份
有限公司)
Greatwall Information Industry Co., Ltd.	143,000,000	RMB ordinary	143,000,000
		shares
Shanghai Educational Development Co.,	92,188,251	RMB ordinary	92,188,251
Ltd. (上海市教育發展有限公司)		shares
Shanghai Tongyi Asset Management	90,803,988	RMB ordinary	90,803,988
Co., Ltd. (上海彤翼資產管理有限		shares
公司)
Greenland Holding Group Company	80,685,407	RMB ordinary	80,685,407
Limited (綠地控股集團有限公司)		shares

• Greenland Holding Group Company Limited (綠地控股集團有限公司) Related party relationship or parties acting in concert among above shareholders

• Shenergy (Group) Company Limited, Shanghai Electric (Group) Corporation and Shanghai Construction Group Co., Ltd. are the subsidiaries of the State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government. The Company is not aware of any other related party relationship or any parties acting in concert among other shareholders.

Notes:

1. Among the H Shareholders of the Company, Hong Kong Securities Clearing Company Nominees Limited held the H Shares on behalf of the non-registered shareholders.

2. The nature of shareholders represents that of accounts registered by such shareholders in Shanghai branch of China Securities Depository and Clearing Corporation Limited.

3. As the shares of the Company are subject of margin financing and securities lending, the number of shares held by a shareholder is the sum of the shares and equity held through the general securities accounts and credit securities accounts.

– 7 –

• 2.3 The table below sets out the total number of preferred shareholders, and shareholding of top ten preferred shareholders and top ten preferred shareholders not subject to restriction on sales as at the end of the reporting period

□Applicable ✓Not Applicable

III. MATERIAL EVENTS

• 3.1 Material changes in major accounting statement items and financial indicators of the Company and the reasons for such changes

✓Applicable □Not Applicable

Unit: RMB

	As at	As at	Increase/
Items	March 31, 2017	December 31, 2016	Decrease (%)	Major reasons for the changes
Derivative financial assets	33,448,532.11	70,509,142.37	-52.56	Decrease in the assets arising
				from change in the fair value of
				derivatives
Deposit with exchanges and	751,371,132.73	1,099,848,916.02	-31.68	Decrease in deposit with exchanges
financial institutions				and financial institutions due
				to providing funds and securities
				to the securities company for
				securities margin trading
Other assets	3,344,306,569.16	1,299,221,851.38	157.41	Mainly due to increase in other
				receivables
Short-term borrowings	1,000,244,287.27	480,726,662.50	108.07	Increase in short-term bank
				borrowings of subsidiaries
Short-term financial bills	3,178,134,000.00	4,942,779,000.00	-35.70	Decrease in the size of short-term
payables				commercial papers
Financial liabilities	4,888,966,279.93	7,471,177,366.88	-34.56	Mainly due to the decrease in the
at fair value through				size of short selling bonds
profit or loss
Funds payable to securities	0.00	587,550,000.00	-100.00	Decrease in the amount of
issuers				securities underwriting services
				provided by the subsidiaries
Taxes payable	97,802,258.02	411,827,929.52	-76.25	Mainly due to the decrease in the
				payable corporate income tax
Interest payable	2,065,341,045.57	1,553,613,486.28	32.94	Mainly due to the increase in the
				interest payable for corporate
				debentures and subordinated
				debts
Other comprehensive income	375,076,163.14	728,268,800.21	-48.50	Due to change in fair value of
				available-for-sale financial
				assets

– 8 –

	January –	January –	Increase/
Items	March 2017	March 2016	Decrease (%)	Reasons
Net interest income	-360,013,792.66	-208,863,590.71	N/A	Mainly due to the decrease in
				the interest income from margin
				financing and securities lending
Gains from changes in fair	558,644,791.94	-500,313,567.53	N/A	Due to the change in the fair value
value				of financial instruments
Other business income	35,831,008.48	10,392,750.64	244.77	Addition of the income from sale
				of commodity by subsidiaries
Tax and surcharges	15,106,785.08	129,679,772.87	-88.35	Mainly due to levying value added
				tax in lieu of business tax
Business and administrative	1,267,250,795.71	686,259,608.97	84.66	The increase in operating
expenses				income led to an increase
				in corresponding expenses
Assets impairment loss	4,452,403.08	-430,543.85	N/A	Increase in the provision for
				impairment loss by subsidiaries
Other business cost	24,355,416.28	0.00	N/A	Addition of the cost from sale of
				commodity by subsidiaries
Non-operating income	279,615,269.08	4,105,482.80	6,710.78	Increase in government grants
Non-operating expenses	223,768.40	429,504.53	-47.90	Due to disposal of non-current
				assets
Income tax expense	227,391,267.34	98,012,350.02	132.00	Due to increase in total profit
Other comprehensive	-351,676,011.20	-1,564,390,628.06	N/A	Due to change in fair value of
income after, net				available-for-sale financial assets
Net cash (used in)/from	-9,744,040,027.56	-4,509,016,858.62	N/A	Mainly due to the decrease in the
operating activities				net-gain from the financial assets
				at fair value through profit
				or loss
Net cash (used in)/from	-18,404,416.42	-148,813,664.80	N/A	Mainly due to the decrease in the
investing activities				cash payable for investment
Net cash (used in)/from	-158,514,832.06	-4,655,989,342.91	N/A	Mainly due to the decrease in the
financing activities				cash payable for repaying debts

– 9 –

3.2 Analysis and description on the update impact and solutions of material events

✓Applicable □Not Applicable

Non-public issuance of A shares:

On February 13, 2017, the Company held the 25th meeting of the third session of the Board and the Proposed on the Non-public Issuance of A Shares for 2017 and other related resolutions were approved in the meeting. The Company proposed to issue a maximum of 800 million A Shares to not more than 10 specific target subscribers (inclusive), including Shenergy (Group) Company Limited, Shanghai Haiyan Investment Management Company Limited and Shanghai United Media Group, which is expected to raise a gross proceeds up to RMB12 billion. The issue price shall not be lower than 90% of the average trading price of the shares during the 20 trading days immediately preceding the pricing benchmark date. According to relevant regulations and requirements, the proposed issuance shall be subject to the approval at the general meeting of shareholders of the Company, the class meeting of the Company’s A shareholders and the class meeting of the Company’s H shareholders, and the approval from CSRC.

On February 17, 2017, CSRC issued the Decision on Amending Implementing Rules on Non-public Issuance of Shares by Listed Companies (《關於修改<上市公司非公開發行股票實施細則>的決定》, “ Implementing Rules ”) and relevant regulatory questions and answers. On February 28, 2017, the Company convened the 26th meeting of the third session of the Board. At the meeting, the Company considered and passed related proposals for amending (among others) the applicable laws and pricing benchmark date involved in five resolutions including the Resolution in relation to the Non-public Issuance of A Shares of the Company in accordance with the revised Implementing Rules. The revised issuance proposal shall be subject to the approval at the general meeting, the A Share Class Meeting and the H Share Class Meeting, and the approval from CSRC.

On April 14, 2017, the Resolution in relation to the Non-public Issuance of A Shares of the Company and other resolutions were considered and passed at the first extraordinary general meeting in 2017, the first class meeting of A shareholders in 2017 and the first class meeting of H shareholders in 2017 of the Company. According to relevant provisions, the non-public issuance of A shares is subject to approval from CSRC.

– 10 –

3.3 Undertakings that has not yet been duly fulfilled during the reporting period

✓Applicable □Not Applicable

							Reasons	Follow up plan
				Time and		Timely	for failure	for failure
Background	Type of			validity period	Subject	and strictly	to perform	to perform
of undertaking	Undertakings	Covenantor	Undertaking	of undertaking	to expiry	performed	timely	timely
Undertakings in	Non-competition	Shenergy Group	Shenergy Group has issued the	After the public	Yes	Yes
relation to initial			Commitment Letter of Non	offering and
public offering			-Competition to the Company and	listing of shares
			undertook that it and the companies	of the Company
			and enterprises under its direct or
			indirect control would not participate
			in any form of business or operation
			that compete or might compete with the
			Company and its subsidiaries.
Undertakings in	Shares subject	Shenergy Group	Shenergy Group undertook that, during	Within 36 months	Yes	Yes
relation to initial	to lock-up		the 36 months from the listing and	from the public
public offering			trading of such shares on the stock	offering and
			exchange, it would not transfer or	listing of shares
			entrust other parties to manage the	of the Company
			shares of the Company held by it
			directly and indirectly.
Undertakings in	Shares subject	Listed company	The Company undertook that, during the	Within 36 months	Yes	Yes
relation to initial	to lock-up		three years from the listing of A	from the public
public offering			Shares, in the event that the closing	offering and
			price of shares falls below the latest	listing of shares
			audited net assets per share for 20	of the Company
			consecutive trading days, the Company
			would stabilize the price of share
			through share repurchase.
Undertakings in	Shares subject	Shenergy Group	Shenergy Group undertook that, during	Within 24 months	Yes	Yes
relation to initial	to lock-up		the two years from the expiry of the	from the expiry
public offering			lock up period, its disposal of shares in	of the lock-up
			the issuer every year shall not exceed	period
			5% of the total shares of the issuer, and
			the disposal shall not be conducted at a
			price lower than the offering price.
Undertakings in	Shares subject	Shanghai Haiyan	Shanghai Haiyan Investment undertook	Within 24 months	Yes	Yes
relation to initial	to lock-up	Investment	that it had no intention to dispose	from the expiry
public offering			of shares during the two years from	of the lock-up
			the expiry of lock-up period, save	period
			for disposal due to material changes in
			national policy and external
			environment.

– 11 –

• 3.4 Profit warning and explanation of expected accumulated net loss from the beginning of the year to the end of the next reporting period or material changes over the corresponding period of previous year

□Applicable ✓Not Applicable

Name of the Company Legal representative Date

ORIENT SECURITIES COMPANY LIMITED Pan Xinjun April 25, 2017

– 12 –

IV. APPENDICES

4.1 Financial Statements

Consolidated Balance Sheet

As at March 31, 2017

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit and Currency: RMB Type of audit: Unaudited

	Balance	Balance
	as at the end	as at the beginning
Items	of the period	of the year
Assets:
Cash and bank balances	35,559,972,285.82	44,168,734,819.24
Of which: Deposits held on behalf of customers	23,767,519,002.53	29,201,537,858.92
Clearing settlement funds	9,435,052,167.05	10,504,501,418.62
Of which: Settlement funds held on behalf of customers	8,174,790,794.27	7,466,989,689.01
Placements to banks and other financial institutions
Advance to customers	10,446,940,950.24	10,651,585,593.63
Financial assets at fair value through profit or loss	29,420,625,273.54	23,329,193,641.39
Derivative financial assets	33,448,532.11	70,509,142.37
Financial assets held under resale agreements	36,434,657,233.25	34,558,940,628.05
Receivables	1,313,565,010.88	1,748,220,157.51
Interest receivables	1,684,632,809.73	1,746,275,422.69
Deposits with exchanges and financial institutions	751,371,132.73	1,099,848,916.02
Dividend receivables
Assets classified as held for sale
Available-for-sale financial assets	69,513,910,680.75	77,261,927,834.81
Held-to-maturity investments	181,084,144.07	212,059,726.75
Long-term receivables
Long-term equity investments	3,505,956,408.76	3,514,660,031.96
Investment properties
Fixed assets	430,780,366.80	437,212,300.07
Construction in progress	1,347,820,618.52	1,345,009,212.72
Intangible assets	113,554,960.94	114,883,681.05
Development expenses
Goodwill	32,135,375.10	32,135,375.10
Leasehold improvements	55,262,236.98	62,264,581.77
Deferred tax assets	185,370,304.48	253,903,054.13
Other assets	3,344,306,569.16	1,299,221,851.38
Total assets	203,790,447,060.91	212,411,087,389.26

– 13 –

	Balance	Balance
	as at the end	as at the beginning
Items	of the period	of the year
Liabilities:
Short-term borrowings	1,000,244,287.27	480,726,662.50
Short-term financial bills payables	3,178,134,000.00	4,942,779,000.00
Due to banks and other financial institutions	5,900,000,000.00	5,100,000,000.00
Financial liabilities at fair value through profit or loss	4,888,966,279.93	7,471,177,366.88
Derivative financial liabilities	367,356,710.31	419,177,005.26
Financial assets held under repurchase agreements	43,242,568,782.65	46,398,939,933.96
Account payable to brokerage clients	29,749,048,269.50	33,696,387,737.08
Funds payable to securities issuers		587,550,000.00
Securities brokerage for margin transaction	1,816,223,814.83	1,955,399,663.49
Accrued staff costs	1,271,317,878.94	1,377,921,333.53
Taxes payable	97,802,258.02	411,827,929.52
Payables	197,789,905.77	222,299,338.20
Interest payables	2,065,341,045.57	1,553,613,486.28
Dividend payable
Liabilities classified as held for sale
Provision
Long-term borrowings	853,519,559.84	859,033,902.23
Bond payables	66,094,690,541.28	64,584,110,872.54
Long-term payables
Long-term accrued staff costs
Special payables
Deferred tax liabilities	421,652,828.25	357,850,891.22
Deferred income
Other liabilities	1,202,991,194.51	1,054,466,917.23
Total liabilities	162,347,647,356.67	171,473,262,039.92

– 14 –

			Balance	Balance
			as at the end	as at the beginning
Items			of the period	of the year
Equity (or equity of shareholders):
Share capital			6,215,452,011.00	6,215,452,011.00
Other equity instruments
Capital reserve			18,028,781,934.70	18,028,781,205.57
Less: treasury shares
Other comprehensive income			375,076,163.14	728,268,800.21
Special reserve
Surplus reserve			2,685,798,121.59	2,685,798,121.59
General reserve			5,723,968,603.35	5,712,872,683.97
Undistributed profits			7,944,927,251.19	7,111,725,709.54
Exchange differences from translation of statements
denominated in foreign currencies
Total equity attributable to the owners (or shareholders) of
the parent company			40,974,004,084.97	40,482,898,531.88
Non-controlling interest			468,795,619.27	454,926,817.46
Total equity of owners (or equity		of shareholders)	41,442,799,704.24	40,937,825,349.34
Total liabilities and equity of owners (or equity of
shareholders)			203,790,447,060.91	212,411,087,389.26
	Person-in-charge of the
Legal representative:	accounting department:		Accounting chief:
Pan Xinjun	Zhang Jianhui		Zhang Jianhui

– 15 –

Balance Sheet of the Parent Company

As at March 31, 2017

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit and Currency: RMB Type of audit: Unaudited

	Balance	Balance
	as at the end	as at the beginning
Items	of the period	of the year
Assets:
Cash and bank balances	23,159,615,794.09	29,973,827,693.15
Of which: Deposits held on behalf of customers	17,027,915,360.69	19,682,886,139.74
Clearing settlement funds	4,629,352,426.80	6,493,772,468.87
Of which: Settlement funds held on behalf of customers	3,485,105,441.59	3,534,711,971.33
Placements to banks and other financial institutions
Advance to customers	10,112,971,668.32	10,291,010,805.73
Financial assets at fair value through profit or loss	21,474,398,991.65	16,916,320,704.96
Derivative financial assets	32,028,302.70	45,388,386.68
Financial assets held under resale agreements	36,009,367,025.66	34,114,781,904.15
Receivables	148,435,550.98	193,905,147.11
Interest receivables	1,527,252,428.78	1,634,618,785.94
Deposits with exchanges and financial institutions	534,954,369.62	899,280,526.67
Dividend receivables
Assets classified as held for sale
Non-current assets maturing within one year
Available-for-sale financial assets	64,815,815,959.69	71,172,997,355.91
Held-to-maturity investments	181,084,144.07	212,059,726.75
Long-term receivables
Long-term equity investments	10,387,261,569.86	9,745,566,215.91
Investment properties
Fixed assets	406,514,742.82	411,279,144.81
Construction in progress	1,343,774,883.33	1,341,935,220.92
Other intangible assets	101,641,840.27	105,735,999.24
Development expenses
Goodwill	18,947,605.48	18,947,605.48
Leasehold improvements	38,857,663.66	44,933,741.29
Deferred tax assets	71,442,550.40	114,684,207.68
Other assets	2,031,158,296.18	141,799,532.85
Total assets	177,024,875,814.36	183,872,845,174.10

– 16 –

		Balance	Balance
		as at the end	as at the beginning
Items		of the period	of the year
Liabilities:
Short-term borrowings
Short-term financial bills payables		1,568,134,000.00	2,712,779,000.00
Due to banks and other financial institutions		5,900,000,000.00	5,100,000,000.00
Financial liabilities at fair value	through profit or loss	4,623,684,641.00	7,207,691,470.00
Derivative financial liabilities		260,155,305.94	267,863,973.93
Financial assets held under repurchase agreements		41,277,747,170.27	44,865,441,113.41
Account payable to brokerage clients		18,420,069,155.93	20,948,554,652.40
Funds payable to securities issuers
Securities brokerage for margin	transaction	1,602,026,193.61	1,702,899,629.95
Accrued staff costs		772,316,778.08	513,890,151.48
Taxes payable		-103,812,305.71	188,049,368.18
Payables		2,927,929.26	31,982,523.46
Interest payables		1,918,718,136.77	1,471,310,418.91
Dividend payable
Liabilities classified as held for sale
Provision
Long-term borrowings
Bond payables		61,062,302,030.16	59,546,784,845.00
Long-term payables
Long-term accrued staff costs
Special payables
Deferred tax liabilities		329,968,720.70	266,049,958.95
Deferred income
Other liabilities		596,214,145.26	518,876,541.18
Total liabilities		138,230,451,901.27	145,342,173,646.85
Equity (or equity of shareholders):
Share capital		6,215,452,011.00	6,215,452,011.00
Other equity instruments
Capital reserve		17,978,031,823.98	17,978,031,823.98
Less: treasury shares
Other comprehensive income		107,379,293.68	429,126,830.37
Special reserve
Surplus reserve		2,685,798,121.59	2,685,798,121.59
General reserve		5,350,776,592.51	5,350,776,592.51
Undistributed profits		6,456,986,070.33	5,871,486,147.80
Exchange differences from translation of statements
denominated in foreign currencies
Total equity of owners (or shareholders)		38,794,423,913.09	38,530,671,527.25
Total liabilities and equity of owners (or shareholders)		177,024,875,814.36	183,872,845,174.10
	Person-in-charge of the
Legal representative:	accounting department:	Accounting chief:
Pan Xinjun	Zhang Jianhui	Zhang Jianhui

– 17 –

Consolidated Income Statement

For January to March 2017

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit and Currency: RMB Type of audit: Unaudited

			Amount for
			corresponding
		Amounts for	period of
Items		this period	previous year
I.	Operating income	2,128,887,867.14	1,380,998,457.49
	Net fee and commission income	1,083,909,107.28	1,222,721,636.46
	Of which: Net fee income from brokerage business	364,853,034.79	446,870,893.46
	Net fee income from investment banking
	business	370,286,885.31	410,152,469.77
	Net fee income from asset management
	business	244,765,293.75	224,902,197.42
	Net interest income	-360,013,792.66	-208,863,590.71
	Investment gains (“-” indicating losses)	852,743,366.15	913,935,089.88
	Of which: Gains from investments in associates
	and joint ventures	76,005,670.28	68,071,209.71
	Gains from changes in fair value
	(“-” indicating losses)	558,644,791.94	-500,313,567.53
	Foreign exchange gains (“-” indicating losses)	-42,226,614.05	-56,873,861.25
	Other business income	35,831,008.48	10,392,750.64
II.	Operating expenses	1,311,165,400.15	815,508,837.99
	Business tax and surcharges	15,106,785.08	129,679,772.87
	Business and administrative expenses	1,267,250,795.71	686,259,608.97
	Assets impairment loss	4,452,403.08	-430,543.85
	Other business cost	24,355,416.28
III.	Operating profit (“-” indicating loss)	817,722,466.99	565,489,619.50
	Add: Non-operating income	279,615,269.08	4,105,482.80
	Less: Non-operating expenses	223,768.40	429,504.53
IV.	Total profit (“-” indicating loss)	1,097,113,967.67	569,165,597.77
	Less: Income tax expenses	227,391,267.34	98,012,350.02
V.	Net profit (“-” indicating net loss)	869,722,700.33	471,153,247.75
	Of which: Net profit attributable to owners
	(or shareholders) of the parent
	company	844,297,461.03	423,098,320.77
	Profit or loss of non-controlling interest	25,425,239.30	48,054,926.98

– 18 –

				Amount for
				corresponding
			Amounts for	period of
Items			this period	previous year
VI.	Other comprehensive income, net of tax		-351,676,011.20	-1,564,390,628.06
	Other comprehensive income after tax attributable
	to the owners of the parent company, net		-353,192,637.07	-1,564,356,971.33
	(I)	Other comprehensive income that will not
		subsequently be reclassified to profit and loss
		1. Re-measurement of change in net
		liabilities or assets of defined benefit
		scheme
		2. Share of other comprehensive income
		of investees accounted for using equity
		method that will not be reclassified to
		profit or loss
	(II)	Other comprehensive income that will
		subsequently be reclassified to profit and loss	-353,192,637.07	-1,564,356,971.33
		1. Share of other comprehensive income
		of investees accounted for using equity
		method that will be reclassified to profit
		or loss	-235,019.05	-4,016,748.70
		2. Gains and losses from changes in fair
		value of available-for-sale financial
		assets	-329,365,627.13	-1,590,094,063.54
		3 Gains and losses from held-to-maturity
		investment reclassified as available-for-
		sale financial assets	0.00
		4. Effective portion of hedging gains and
		losses from cash flows	0.00
		5. Exchange differences from translation
		of financial statements denominated in
		foreign currencies	-23,591,990.89	29,753,840.91
		6. Others	0.00
		Other comprehensive income after tax
		attributable to minority interest, net	1,516,625.86	-33,656.73
VII.	Total	comprehensive income	518,046,689.13	-1,093,237,380.31
	Total	comprehensive income attributable to owners of
	the parent company		491,104,823.96	-1,141,258,650.56
	Total	comprehensive income attributable to minority
	interest		26,941,865.17	48,021,270.25
VIII.	Earnings per share:
	(I) Basic (in RMB)		0.14	0.08
	(II) Diluted (in RMB)		0.14	0.08
		Person-in-charge of the
Legal	representative: accounting department:		Accounting chief:
Pan Xinjun		Zhang Jianhui	Zhang Jianhui

– 19 –

Income Statement of the Parent Company

For January to March 2017

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: RMB Unaudited

			Amount for
			corresponding
		Amounts for	period of
Items		this period	previous year
I.	Operating income	1,242,438,846.26	603,647,478.40
	Net fee and commission income	495,845,934.89	593,892,873.99
	Of which: Net fee income from brokerage business	299,235,233.95	413,369,900.66
	Net fee income from investment banking
	business	135,769,715.07	94,078,349.86
	Net fee income from asset management
	business	–
	Net interest income	-363,558,735.48	-255,637,537.06
	Investment gains (“-” indicating losses)	660,653,819.39	743,300,772.08
	Of which: Gains from investments in associates
	and joint ventures	40,141,348.90	73,071,525.77
	Gains from changes in fair value
	(“-” indicating losses)	456,516,074.04	-489,285,587.76
	Foreign exchange gains (“-” indicating losses)	-14,888,084.59	-405,333.38
	Other operating income	7,869,838.01	11,782,290.53
II.	Operating expenses	747,759,845.86	456,762,196.36
	Business tax and surcharges	11,848,704.28	87,823,060.76
	Business and administrative expenses	737,452,982.97	369,448,088.19
	Assets impairment loss	-1,541,841.39	-508,952.59
	Other business cost
III.	Operating profit (“-” indicating loss)	494,679,000.40	146,885,282.04
	Add: Non-operating income	228,066,400.00	74,153.77
	Less: Non-operating expenses	223,768.40	152,095.54
IV.	Total profit (“-” indicating loss)	722,521,632.00	146,807,340.27
	Less: Income tax expenses	137,021,709.47	-17,901,399.18
V.	Net profit (“-” indicating net loss)	585,499,922.53	164,708,739.45
VI.	Other comprehensive income, net of tax	-321,747,536.69	-1,413,108,694.06
	(I) Other comprehensive income that will not
	subsequently be reclassified to profit or loss
	1. Remeasurement gains/(losses) of defined
	benefit obligation
	2. Share of other comprehensive income of
	investees accounted for using the equity
	method, which will not be reclassified to
	profit or loss

– 20 –

					Amount for
					corresponding
				Amounts for	period of
Items				this period	previous year
	(II)	Other comprehensive income that will
		subsequently be reclassified to profit and loss		-321,747,536.69	-1,413,108,694.06
		1.	Share of other comprehensive income of
			investees accounted for using the equity
			method, which will be subsequently
			reclassified to profit or loss	1,554,005.05	-4,016,748.70
		2.	Gains and losses from changes in fair
			value of available-for-sale financial
			assets	-323,301,541.74	-1,409,091,945.36
		3.	Gains and losses from held-to-maturity
			investment reclassified as available-for-
			sale financial assets
		4.	Effective portion of hedging gains and
			losses from cash flows
		5.	Exchange differences from translation
			of financial statements denominated in
			foreign currencies
		6.	Others
VII.	Total	comprehensive income		263,752,385.84	-1,248,399,954.61
VIII.	Earnings per share:
	(I) Basic (in RMB)			0.09	0.03
	(II) Diluted (in RMB)			0.09	0.03
			Person-in-charge of the
Legal	representative: accounting department:			Accounting chief:
Pan Xinjun			Zhang Jianhui	Zhang Jianhui

– 21 –

Consolidated Statement of Cash Flows

For January to March 2017

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: RMB Unaudited

			Amount for
			corresponding
		Amounts for	period of
Items		this period	previous year
I.	Cash flows from operating activities:
	Net increase in disposal of financial assets
	at fair value through profit or loss	-1,167,356,465.53	10,809,502,400.07
	Cash received from interests, fees and commissions	1,991,049,821.00	2,399,800,003.66
	Net increase in due to banks and other financial
	institutions	800,000,000.00	-9,000,000,000.00
	Net increase in cash from repurchase business	-4,998,823,941.99	-4,177,715,225.41
	Net decrease in advances to customers	196,036,849.47	3,774,352,654.57
	Net cash received from securities trading agency
	services
	Cash received relating to other operating activities	1,294,094,016.23	696,441,329.31
	Subtotal of cash inflows from operating activities	-1,884,999,720.82	4,502,381,162.20
	Net increase in advances to customers
	Net cash paid for securities trading agency services	4,138,437,297.27	5,509,277,160.87
	Cash paid for interests, fees and commissions	569,456,033.09	696,878,270.58
	Cash paid to and paid for staff	938,072,459.83	964,065,627.65
	Taxes paid	359,717,418.06	534,173,795.67
	Cash paid relating to other operating activities	1,853,357,098.49	1,307,003,166.05
	Sub-total of cash outflows from operating activities	7,859,040,306.74	9,011,398,020.82
	Net cash (used in)/from operating activities	-9,744,040,027.56	-4,509,016,858.62
II:	Cash flows from investing activities:
	Cash received from disposal of investment	85,590,131.64	34,399,988.80
	Cash received from investment gains	10,391,171.99	176,947,110.39
	Net cash received from disposal of subsidiaries
	and other business units
	Cash received from other investing activities	95,400.50	23,165.00
	Sub-total of cash inflows from investing activities	96,076,704.13	211,370,264.19
	Cash paid for investments	80,530,000.00	303,965,000.00
	Cash paid for purchase of fixed assets, intangible
	assets and other long-term assets	33,951,120.55	55,443,928.99
	Net cash paid for acquisition of subsidiaries
	and other business units
	Cash paid for other investing activities		775,000.00
	Sub-total of cash outflows from investing activities	114,481,120.55	360,183,928.99
	Net cash flows (used in)/from investing activities	-18,404,416.42	-148,813,664.80

– 22 –

			Amount for
			corresponding
		Amounts for	period of
Items		this period	previous year
III.	Cash flows from financing activities:
	Proceeds from investments		715,000.00
	Of which: Cash contribution from minority interest
	to subsidiaries		715,000.00
	Cash received from borrowings	523,118,372.27	39,145,000.00
	Cash received from issue of bonds	5,826,331,000.00	4,711,813,000.00
	Cash received relating to other financing activities	512,000.00	0.00
	Sub-total of cash inflows from financing activities	6,349,961,372.27	4,751,673,000.00
	Cash repayment of debts	6,175,976,000.00	9,064,133,000.00
	Cash paid for distribution of dividends, profits or
	interest payment	332,275,204.33	343,529,342.91
	Of which: Dividends and profits paid to minority
	interest by subsidiaries		4,533,200.00
	Cash paid relating to other financing activities	225,000.00
	Sub-total of cash outflows from financing activities	6,508,476,204.33	9,407,662,342.91
	Net cash (used in)/from financing activities	-158,514,832.06	-4,655,989,342.91
IV.	Effect of foreign exchange rate changes on cash
	and cash equivalents	-44,682,604.89	-35,660,925.85
V.	Net increase in cash and cash equivalents	-9,965,641,880.93	-9,349,480,792.18
	Add: Balance of cash and cash equivalents
	at the beginning of the period	50,283,058,520.18	61,522,861,766.96
VI.	Balance of cash and cash equivalents at the end of
	the period	40,317,416,639.25	52,173,380,974.78
	Person-in-charge of the
Legal	representative: accounting department:	Accounting chief:
Pan Xinjun Zhang Jianhui		Zhang Jianhui

– 23 –

Cash Flow Statement of the Parent Company

For January to March 2017

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: RMB Unaudited

			Amount for
			corresponding
		Amounts for	period of
Items		this period	previous year
I.	Cash flows from operating activities:
	Net increase in disposal of financial assets
	at fair value through profit or loss	-1,501,841,591.31	10,308,266,071.77
	Cash received from interests, fees and commissions	1,325,925,771.51	1,671,464,935.93
	Net increase in due to banks and other financial
	institutions	800,000,000.00	-9,000,000,000.00
	Net increase in funds from repurchase business	-5,482,279,064.65	-4,603,113,063.45
	Net decrease in advances to customers	178,039,137.41
	Net cash received from securities trading agency
	services		-2,470,822,034.07
	Cash received relating to other operating activities	677,567,499.14	681,993,034.74
	Sub-total of cash inflows from operating activities	-4,002,588,247.90	-3,412,211,055.08
	Net increase in advances to customers		-3,689,294,170.17
	Net cash paid for securities trading agency services	2,629,358,932.81	0.00
	Cash paid for interests, fees and commissions	562,863,519.85	677,789,998.65
	Cash paid to and paid for staff	224,625,808.09	582,748,851.88
	Taxes paid	240,729,055.64	450,378,057.99
	Cash paid relating to other operating activities	429,970,050.78	173,674,490.21
	Sub-total of cash outflows from operating activities	4,087,547,367.17	-1,804,702,771.44
	Net cash flows from operating activities	-8,090,135,615.07	-1,607,508,283.64
II:	Cash flows from investing activities:
	Cash received from disposal of investment
	Cash received from investment gains
	Cash received from other investing activities	95,400.50
	Subtotal of cash inflows from investing activities	95,400.50
	Cash paid for investments	600,000,000.00
	Cash paid for purchase of fixed assets, intangible
	assets and other long-term assets	27,228,997.42	48,710,752.65
	Cash paid for other investing activities
	Subtotal of cash outflows from investing activities	627,228,997.42	48,710,752.65
	Net cash flows from investing activities	-627,133,596.92	-48,710,752.65

– 24 –

			Amount for
			corresponding
		Amounts for	period of
Items		this period	previous year
III.	Cash flows from financing activities:
	Cash received from investments
	Cash received from borrowings
	Cash received from issue of bonds	5,826,331,000.00	4,441,813,000.00
	Cash received relating to other financing activities		0.00
	Sub-total of cash inflows from financing activities	5,826,331,000.00	4,441,813,000.00
	Cash repayment of debts	5,460,976,000.00	8,171,573,000.00
	Cash paid for distribution of dividends, profits or
	interest payment	311,829,644.55	297,339,353.50
	Cash paid for other financing activities
	Sub-total of cash outflows from financing activities	5,772,805,644.55	8,468,912,353.50
	Net cash flows from financing activities	53,525,355.45	-4,027,099,353.50
IV.	Effect of foreign exchange rate changes on cash
	and cash equivalents	-14,888,084.59	-405,333.38
V.	Net increase in cash and cash equivalents	-8,678,631,941.13	-5,683,723,723.17
	Add: Balance of cash and cash equivalents
	at the beginning of the period	36,467,600,162.02	43,959,135,037.06
VI.	Balance of cash and cash equivalents at the end of
	the period	27,788,968,220.89	38,275,411,313.89
	Person-in-charge of the
Legal	representative: accounting department:	Accounting chief:
Pan Xinjun Zhang Jianhui		Zhang Jianhui
4.2	Auditors’ Report

□Applicable ✓Not Applicable

– 25 –