DFZQ — Interim / Quarterly Report 2018

Apr 26, 2018

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 2018

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, 2018, 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 “The First Quarterly Report for the Year 2018 of Orient Securities Company Limited” 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 26, 2018

As at the date of this announcement, the Board of Directors comprises Mr. PAN Xinjun and Mr. JIN Wenzhong as executive Directors; Mr. LIU Wei, Mr. WU Junhao, Mr. CHEN Bin, Mr. LI Xiang, Ms. XIA Jinghan, Mr. XU Jianguo and Mr. DU Weihua as non-executive Directors; and Mr. XU Guoxiang, Mr. TAO Xiuming, Mr. WEI Anning, Mr. XU Zhiming and Mr. JIN Qinglu as independent non-executive Directors.

– 1 –

Orient Securities Company Limited

The First Quarterly Report for the Year 2018

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CONTENTS

I.	IMPORTANT NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
II.	COMPANY PROFILE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
III.	MATERIAL EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
IV.	APPENDICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13

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I. IMPORTANT NOTICE

• 1.1 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.

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

• 1.3 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.

• 1.4 This first quarterly report of the Company was unaudited.

II. COMPANY PROFILE

2.1 Key financial data

Unit: Yuan Currency: RMB

				Increase/decrease
				recorded at the end
				of this reporting
				period as compared
	At the end of	At the end of the previous year		with the end of
	this reporting period	After adjustments	Before adjustments	the previous year (%)
Total assets	225,088,497,652.77	230,994,478,727.07	231,859,988,264.38	-2.56
Net assets attributable to
the shareholders of
the Company	52,397,275,593.34	52,202,811,362.13	52,985,501,419.59	0.37
				Increase/decrease
	From the beginning	From the beginning of the previous year		as compared with
	of the year to	to the end of the reporting period		the corresponding
	the end of this	of the previous year		period of the
	reporting period	After adjustments	Before adjustments	previous year (%)
Net cash flows from
operating activities	-7,828,937,251.32	-11,755,634,285.04	-11,755,634,285.04	N/A

– 4 –

Unit: Yuan Currency: RMB

		From the beginning of the previous year	From the beginning of the previous year	Increase/decrease
	From the beginning	to the end of the reporting period		as compared with
	of the year to	of the previous year		the corresponding
	the end of this			period of the
	reporting period	After adjustments	Before adjustments	previous year (%)
Operating income	1,944,336,176.58	2,128,920,367.14	2,128,887,867.14	-8.67
Net profit attributable
to the shareholders
of the Company	436,172,745.35	844,297,461.03	844,297,461.03	-48.34
Net profit attributable
to the shareholders
of the Company after
deducting
non-recurring
profit or loss	366,904,718.23	638,128,835.43	638,128,835.43	-42.50
Weighted average
returns on net assets				Decrease by 1.24
(%)	0.83	2.07	2.07	percentage points
Basic earnings per share
(RMB/Share)	0.06	0.14	0.14	-57.14
Diluted earnings
per share
(RMB/Share)	N/A	N/A	N/A	N/A

Notes:

1. The differences in respect of the total assets and net assets attributable to the shareholders of the Company as at the end of the previous year before and after taking into account relevant adjustments were mainly due to the retrospective adjustments the Company has made on retained profits and other comprehensive income at the beginning of the period in accordance with the Notice on the Amendments to Accounting Standard for Business Enterprises No. 22 – Recognition and Measurement of Financial Instrument (Caikuai [2017] No. 7) issued by the Ministry of Finance of the PRC.

2. The difference in respect of the operating income of the Company from the beginning of the previous year to the end of the reporting period of the previous year before and after taking into account relevant adjustments was mainly because the Company has increased the amount of gains on asset disposal under operating income in accordance with the Notice on the Amendments to the Format of General Corporate Financial Statements (Caikuai [2017] No. 30).

– 5 –

Non-recurring items and amounts

✓Applicable □Not Applicable

Unit: Yuan Currency: RMB

Items

Amounts for this period Remarks

Gains or losses from disposals of non-current assets -377,792.82 Government grants recognized in current profit or loss, 101,976,554.20 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 items -1,258,058.55 above Effect of non-controlling interests (net of tax) -5,987,500.00 Effect of income tax -25,085,175.71 Total 69,268,027.12

-377,792.82 101,976,554.20 Government grants

– 6 –

• 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

Total number of shareholders	(accounts)					142,265
	Shareholding of the top ten		shareholders
				Pledged	or frozen
	Number of
	shares held
	as at the end		Number of
Name of shareholders	of the		restricted	Status of	Number of	Nature of
(Full name)	reporting period	Percentage (%)	shares held	shares	shares	shareholders
Shenergy (Group) Company	1,767,522,422	25.27	230,000,000	Nil	–	State-owned
Limited						legal person
Hong Kong Securities	1,026,965,600	14.68	–	Nil	–	Foreign legal
Clearing Company						person
Nominees Limited
Shanghai Haiyan Investment	345,486,596	4.94	59,215,263	Nil	–	State-owned
Management Company						legal person
Limited
China Securities Finance	342,686,425	4.90	–	Nil	–	State-owned
Corporation Limited						legal person
Shanghai United Media Group	243,267,306	3.48	–	Nil	–	State-owned
						legal person
Zheneng Capital Holdings	208,700,000	2.98	208,700,000	Nil	–	State-owned
Limited						legal person
(浙能資本控股有限公司)
Shanghai Electric (Group)	194,073,938	2.77	–	Nil	–	State-owned
Corporation						legal person
China Post Group Corporation	178,743,236	2.56	–	Nil	–	State-owned
						legal person
Shanghai Jinqiao Export	160,653,687	2.30	–	Nil	–	Domestic non-
Processing Zone						state-owned
Development Co., Ltd.						legal person
(上海金橋出口加工區開發
股份有限公司)
Shanghai Construction Group	133,523,008	1.91	–	Nil	–	State-owned
Co., Ltd.						legal person

– 7 –

Unit: Share

Shareholding of the top ten shareholders of non-restricted shares Type and number of shares

	Number of
	circulating
	non-restricted
Name of shareholders	shares held	Type	Number
Shenergy (Group) Company	1,537,522,422	RMB ordinary	1,537,522,422
Limited		shares
Hong Kong Securities	1,026,965,600	Overseas listed	1,026,965,600
Clearing Company		foreign shares
Nominees Limited
China Securities Finance	342,686,425	RMB ordinary	342,686,425
Corporation Limited		shares
Shanghai Haiyan Investment	286,271,333	RMB ordinary	286,271,333
Management Company		shares
Limited
Shanghai United Media Group	243,267,306	RMB ordinary	243,267,306
		shares
Shanghai Electric (Group)	194,073,938	RMB ordinary	194,073,938
Corporation		shares
China Post Group Corporation	178,743,236	RMB ordinary	178,743,236
		shares
Shanghai Jinqiao Export	160,653,687	RMB ordinary	160,653,687
Processing Zone		shares
Development Co., Ltd.
(上海金橋出口加工區開
發股份有限公司)
Shanghai Construction Group	133,523,008	RMB ordinary	133,523,008
Co., Ltd.		shares
Greatwall Information	104,389,200	RMB ordinary	104,389,200
Industry Co., Ltd.		shares
Related party relationship	Shenergy (Group)	Company Limited, Shanghai Electric
or parties acting in concert	(Group) Corporation and Shanghai Construction Group
among above shareholders	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.

• 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

– 8 –

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: Yuan Currency: RMB

	As at the end	As at the beginning	Increase/
Items	of the period	of the year	Decrease (%)	Reasons
Derivative financial	77,071,297.93	168,718,612.92	-54.32	Decrease in the assets arising
assets				from change in the fair value of
				derivatives
Deposit with	1,577,176,248.47	1,025,095,523.60	53.86	Increase of stock index futures
exchanges and				margin and the performance
financial				security of certain subsidiaries
institutions
Deferred income tax	450,793,083.32	193,345,880.33	133.15	Increase of deductible temporary
assets				difference
Short-term financial	4,157,960,000.00	1,810,486,000.00	129.66	Increase in the size of short-term
bills payable				commercial papers issued
Derivative financial	1,442,734,600.05	628,175,517.92	129.67	Increase of the cost of derivative
liabilities				financial liabilities
Funds payable to		264,032,557.89	-100.00	Decrease in the amount of
securities issuers				securities underwriting services
				provided by the subsidiaries
Securities brokerage	1,841,706,858.30	1,410,115,184.09	30.61	Increase in the settlement with
for margin				margin financing and securities
transaction				lending clients
Interest payable	2,248,762,983.52	1,610,026,064.39	39.67	Increase in the provision for bond
				interest payable
Deferred income tax	13,339,793.21	216,552.10	6,060.08	Increase in taxable temporary
liabilities				difference
Other	-161,617,512.74	80,317,388.52	-301.22	Mainly due to the change of the
comprehensive				fair value of financial assets
income				at fair value through other
				comprehensive income

– 9 –

Unit: Yuan Currency: RMB

		Corresponding
		period of	Increase/
Items	This period	previous year	Decrease (%)	Reasons
Net fee and	1,547,696,048.62	1,083,909,107.28	42.79	Mainly due to the increase of
commission				the net fee income of asset
income				management business
Gains from disposal	-54,197.29	32,500.00	-266.76	Increase of expenses related with
of assets				asset disposal
Gains from changes	-492,382,105.59	558,644,791.94	-188.14	Effects of fair value changes of
in fair value				financial instruments
Foreign exchange	11,095,258.63	-42,226,614.05	N/A	Effects of exchange rate changes
gains
Other business	222,312,530.38	35,831,008.48	520.45	Increase of the income from sale of
income				commodity by subsidiaries
Tax and surcharges	20,785,590.03	15,106,785.08	37.59	Mainly due to the increase of stamp
				duty
Asset impairment	740,535.21	4,452,403.08	-83.37	Decrease in the provision for
loss				impairment loss by subsidiaries
Other business cost	214,628,308.38	24,355,416.28	781.23	Increase of cost of sales of
				commodity by subsidiaries
Non-operating	102,730,741.78	279,582,769.08	-63.26	Decrease in government grants
income
Non-operating	2,335,841.66	223,768.40	943.87	Mainly due to the increase of
expenses				donation expense of certain
				subsidiaries
Income tax expense	30,015,946.50	227,391,267.34	-86.80	Due to decrease in total profit
Other	-241,934,901.26	-351,676,011.20	N/A	Due to change in the fair value
comprehensive				of financial assets at fair value
income after tax,				through other comprehensive
net				income
Basic earnings per	0.06	0.14	-57.14	Decrease of net profit and increase
share (RMB				of share capital
/Share)
Net cash from	-7,828,937,251.32	-11,755,634,285.04	N/A	Mainly due to the increase in
operating				the net-gain from the disposal
activities				of financial assets at fair value
				through profit or loss and the
				decrease in the cash outflow
				resulting from settlement of
				transactions with clients
Net cash from	1,201,638,538.51	2,280,619,937.00	-47.31	Mainly due to the increase in
investing				the cash outflow resulting
activities				from acquisition of financial
				assets at fair value through other
				comprehensive income
Net cash from	-60,659,107.17	-158,514,832.06	N/A	Mainly due to the decrease in the
financing				cash outflow for repaying debts
activities

– 10 –

3.2 Analysis and description on the updates, impacts and solutions of material events

✓Applicable □Not Applicable

3.2.1 Election of the Board and the Supervisory Committee

• (1) The 36th meeting of the third session of the Board held on December 5, 2017, the first extraordinary meeting for the year 2018 held on March 6, 2018 and first meeting of the fourth session of the Board held on March 9, 2018 have considered and approved the election of Mr. Pan Xinjun and Mr. Jin Wenzhong as the executive Directors of the fourth session of the Board, Mr. Liu Wei, Mr. Wu Junhao, Mr. Chen Bin, Mr. Li Xiang, Ms. Xia Jinghan and Mr. Xu Jianguo as the non-executive Directors of the fourth session of the Board, and Mr. Xu Guoxiang, Mr. Tao Xiuming, Mr. Wei Anning, Mr. Xu Zhiming and Mr. Jin Qinglu as the independent non-executive Directors of the fourth session of the Board; the election of Mr. Pan Xinjun as the Chairman of the fourth session of the Board; the election of members and chairpersons of special committees under the fourth session of the Board. The second plenary session of the third employees’ representative general meeting of the Company held on December 11, 2017 has considered and approved the election of Mr. Du Weihua as an employee representative Director of the fourth session of the Board of the Company.

• (2) The 15th meeting of the third session of the Supervisory Committee held on December 5, 2017, the first extraordinary meeting for the year 2018 held on March 6, 2018 and the first meeting of the fourth session of the Supervisory Committee of the Company held on March 9, 2018 have considered and approved the election of Mr. Zhang Qian, Ms. Huang Laifang, Ms. Tong Jie, Mr. Liu Wenbin, Mr. Yin Keding and Mr. Wu Zhengkui as Supervisors who are not employee representatives of the Company; the election of Mr. Zhang Qian and Mr. Li Bin as the chairman and deputy chairman of the fourth session of the Supervisory Committee, respectively. The second plenary session of the third employees’ representative general meeting of the Company held on December 11, 2017 has considered and approved the election of Mr. Li Bin, Mr. Zhou Wenwu and Mr. Yao Yuan as employee representative Supervisors of the fourth session of the Supervisory Committee of the Company.

• (3) The second meeting of the fourth session of the Board of the Company held on March 29, 2018 has considered and approved the appointment of Mr. Jin Wenzhong as the President of the Company and Mr. Yang Yucheng, Mr. Shu Hong, Mr. Zhang Jianhui and Mr. Du Weihua as Vice Presidents of the Company; Mr. Yang Yucheng and Ms. Leung Wing Han Sharon as joint company secretaries of the Company; Mr. Zhang Jianhui as the chief financial officer; Mr. Yang Bin as chief risk officer and chief compliance officer of the Company; Mr. Wang Rufu as secretary to the Board; Ms. Li Tingting as the representative for securities related affairs of the Company, for a term commencing from the date of being approved by the Board till the expiration of the fourth session of the Board of the Company.

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

• □Applicable ✓Not Applicable

– 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 ORIENT SECURITIES COMPANY LIMITED Legal representative Pan Xinjun Date April 26, 2018

– 12 –

IV. APPENDICES

4.1 Financial Statements

Consolidated Balance Sheet

As at March 31, 2018

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

	Balance as	Balance as
	at the end of	at the beginning
Items	the period	of the year
Assets:
Cash and bank balances	35,822,044,479.74	42,345,855,129.04
Of which: Deposits held on behalf of customers	22,134,062,774.88	20,511,635,054.45
Clearing settlement funds	9,171,368,651.52	9,349,322,311.13
Of which: Settlement funds held on behalf of customers	6,621,358,632.13	8,408,805,301.66
Placements to banks and other financial institutions
Advance to customers	13,217,891,219.26	12,869,007,476.04
Financial assets at fair value through profit or loss	57,064,761,966.65	58,806,364,053.91
Derivative financial assets	77,071,297.93	168,718,612.92
Financial assets acquired under resale agreements	35,830,620,156.95	33,812,780,039.30
Receivables	1,047,502,499.59	987,719,440.14
Interest receivables	2,196,861,308.93	2,242,935,182.39
Deposits with exchanges and financial institutions	1,577,176,248.47	1,025,095,523.60
Dividend receivables
Assets classified as held for sale
Financial assets at fair value through other
comprehensive income	54,980,426,456.88	56,637,471,401.42
Debt investment measured at amortized costs	6,636,776,132.81	5,805,027,639.94
Long-term receivables
Long-term equity investments	3,941,785,674.92	3,859,013,371.14
Investment properties
Fixed assets	478,271,854.40	456,138,848.43
Construction in progress	1,502,890,240.74	1,505,733,360.83
Intangible assets	120,896,302.72	127,939,308.39
Development expenses
Goodwill	32,135,375.10	32,135,375.10
Long-term deferred expenses	75,489,495.86	71,737,173.41
Deferred income tax assets	450,793,083.32	193,345,880.33
Other assets	863,735,206.98	698,138,599.61
Total assets	225,088,497,652.77	230,994,478,727.07

– 13 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

	Balance as	Balance as
	at the end of	at the beginning
Items	the period	of the year
Liabilities:
Short-term borrowings	1,269,162,716.49	1,521,579,784.01
Short-term financial bills payable	4,157,960,000.00	1,810,486,000.00
Due to banks and other financial institutions	9,000,000,000.00	11,200,000,000.00
Financial liabilities at fair value through profit or loss	7,166,479,287.76	6,059,726,951.24
Derivative financial liabilities	1,442,734,600.05	628,175,517.92
Financial assets sold under repurchase agreements	50,092,940,158.52	56,120,004,384.84
Account payable to brokerage clients	26,259,547,026.25	26,809,405,964.99
Funds payable to securities issuers		264,032,557.89
Securities brokerage for margin transaction	1,841,706,858.30	1,410,115,184.09
Accrued staff costs	1,645,555,085.01	1,852,382,791.71
Taxes payable	498,365,403.85	617,353,804.90
Payables	479,494,391.95	461,873,243.84
Interest payable	2,248,762,983.52	1,610,026,064.39
Dividend payable
Liabilities classified as held for sale
Provision
Long-term borrowings	774,234,745.01	806,089,905.65
Bonds payable	63,177,328,511.26	65,309,686,815.29
Long-term payables
Long-term accrued staff costs
Special payables
Deferred income tax liabilities	13,339,793.21	216,552.10
Deferred income
Other liabilities	2,102,630,094.83	1,795,548,179.58
Total liabilities	172,170,241,656.01	178,276,703,702.44

– 14 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

		Balance as	Balance as
		at the end of	at the beginning
Items		the period	of the year
Equity of owners (or equity of shareholders):
Share capital		6,993,655,803.00	6,993,655,803.00
Other equity instruments
Capital reserve		28,254,930,651.32	28,254,930,651.32
Less: treasury shares
Other comprehensive income		-161,617,512.74	80,317,388.52
Special reserve
Surplus reserve		3,052,204,429.25	3,052,204,429.25
General risk reserve		6,646,744,700.80	6,604,969,298.19
Undistributed profits		7,611,357,521.71	7,216,733,791.85
Exchange differences from translation of statements
Total equity attributable to the owners (or shareholders)
of the parent company		52,397,275,593.34	52,202,811,362.13
Non-controlling interests		520,980,403.42	514,963,662.50
Total equity of owners (or	equity of shareholders)	52,918,255,996.76	52,717,775,024.63
Total liabilities and equity of owners
(or equity of shareholders)		225,088,497,652.77	230,994,478,727.07
Legal representative:	Accounting chief:	Person-in-charge of the accounting department:
Pan Xinjun	Zhang Jianhui	Zhang Jianhui

– 15 –

Balance Sheet of the Parent Company

As at March 31, 2018

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

	Balance as	Balance as
	at the end	at the beginning
Items	of the period	of the year
Assets:
Cash and bank balances	22,288,169,720.85	28,764,612,592.41
Of which: Deposits held on behalf of customers	16,189,463,632.14	12,863,056,694.59
Clearing settlement funds	4,965,324,798.43	5,995,853,072.51
Of which: Settlement funds held on behalf of customers	1,968,240,332.62	5,124,921,204.52
Placements to banks and other financial institutions
Advance to customers	12,974,459,077.88	12,621,630,855.20
Financial assets at fair value through profit or loss	36,468,831,343.11	39,628,393,779.56
Derivative financial assets	77,038,372.73	168,360,197.15
Financial assets acquired under resale agreements	34,630,353,771.87	33,547,639,158.88
Receivables	229,688,391.09	284,442,735.90
Interest receivable	1,976,179,695.23	2,020,227,799.16
Deposits with exchanges and financial institutions	1,150,922,339.05	789,075,250.35
Dividends receivable
Assets classified as held for sale
Non-current assets maturing within one year
Financial assets at fair value through other
comprehensive income	54,629,168,960.64	56,275,088,448.21
Debt investment measured at amortized costs	6,636,776,132.81	5,805,027,639.94
Long-term receivables
Long-term equity investments	12,829,209,985.38	11,778,354,615.46
Investment properties
Fixed assets	451,568,947.91	429,390,321.38
Construction in progress	1,499,367,499.85	1,502,310,852.12
Intangible assets	105,038,302.03	111,082,408.94
Development expenses
Goodwill	18,947,605.48	18,947,605.48
Long-term deferred expenses	58,713,967.15	52,735,849.40
Deferred income tax assets	259,640,166.24	31,905,413.65
Other assets	147,929,441.69	121,089,911.84
Total assets	191,397,328,519.42	199,946,168,507.54

– 16 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

	Balance as	Balance as
	at the end	at the beginning
Items	of the period	of the year
Liabilities:
Short-term borrowings
Short-term financial bills payable	4,157,960,000.00	1,810,486,000.00
Due to banks and other financial institutions	9,000,000,000.00	11,200,000,000.00
Financial liabilities at fair value through profit or loss	5,754,069,600.00	5,616,806,550.00
Derivative financial liabilities	1,370,451,478.93	613,300,528.39
Financial assets sold under repurchase agreements	45,077,533,898.32	51,621,318,914.72
Accounts payable to brokerage clients	16,263,835,781.51	16,202,494,986.56
Funds payable to securities issuers
Securities brokerage for margin transaction	1,553,596,050.13	1,279,217,371.16
Accrued staff costs	691,702,653.02	721,230,783.83
Taxes payable	48,933,796.31	127,607,178.12
Payables	6,985,497.45	8,676,628.65
Interest payable	2,088,559,443.73	1,527,834,525.07
Dividends payable
Liabilities classified as held for sale
Provision
Long-term borrowings
Bonds payable	55,747,601,986.17	59,182,941,390.51
Long-term payables
Long-term accrued staff costs
Special payables
Deferred income tax liabilities
Deferred income
Other liabilities	367,821,635.56	418,025,987.66
Total liabilities	142,129,051,821.13	150,329,940,844.67

– 17 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

		Balance as	Balance as
		at the end	at the beginning
Items		of the period	of the year
Equity of owners (or equity of shareholders):
Share capital		6,993,655,803.00	6,993,655,803.00
Other equity instruments
Capital reserve		28,157,008,370.79	28,157,008,370.79
Less: treasury shares
Other comprehensive income		-160,429,107.46	43,417,028.52
Special reserve
Surplus reserve		3,052,204,429.25	3,052,204,429.25
General risk reserve		5,985,880,859.13	5,985,880,859.13
Undistributed profits		5,239,956,343.58	5,384,061,172.18
Exchange differences from translation of statements
denominated in foreign currencies
Total equity of owners (or	equity of shareholders)	49,268,276,698.29	49,616,227,662.87
Total liabilities and equity	of owners
(or equity of shareholders)		191,397,328,519.42	199,946,168,507.54
Legal representative:	Accounting chief:	Person-in-charge of the accounting department:
Pan Xinjun	Zhang Jianhui	Zhang Jianhui

– 18 –

Consolidated Income Statement

For January to March 2018

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

			Amounts for the
			corresponding
		Amounts for	period of
Items		this period	previous year
I.	Operating income	1,944,336,176.58	2,128,920,367.14
	Net fee and commission income	1,547,696,048.62	1,083,909,107.28
	Of which: Net fee income from brokerage
	business	397,347,546.39	364,853,034.79
	Net fee income from investment
	banking	254,536,168.69	370,286,885.31
	Net fee income from asset
	management business	814,425,704.09	244,765,293.75
	Net interest income	-449,041,867.77	-360,013,792.66
	Investment gains (“-”indicating losses)	1,104,710,509.60	852,743,366.15
	Of which: Gains from investments in associates
	and joint ventures	282,679,404.01	76,005,670.28
	Gains from disposal of assets (“-” indicating losses)	-54,197.29	32,500.00
	Gains from changes in fair value
	(“-” indicating losses)	-492,382,105.59	558,644,791.94
	Foreign exchange gains (“-” indicating losses)	11,095,258.63	-42,226,614.05
	Other gains
	Other business income	222,312,530.38	35,831,008.48
II.	Operating expenses	1,562,032,273.65	1,311,165,400.15
	Business tax and surcharges	20,785,590.03	15,106,785.08
	Business and administrative expenses	1,325,877,840.03	1,267,250,795.71
	Asset impairment loss	740,535.21	4,452,403.08
	Other business cost	214,628,308.38	24,355,416.28
III.	Operating profit (“-” indicating loss)	382,303,902.93	817,754,966.99
	Add: Non-operating income	102,730,741.78	279,582,769.08
	Less: Non-operating expenses	2,335,841.66	223,768.40
IV.	Total profit (“-” indicating loss)	482,698,803.05	1,097,113,967.67
	Less: Income tax expenses	30,015,946.50	227,391,267.34
V.	Net profit(“-”indicating net loss)	452,682,856.55	869,722,700.33
	(I) Classified based on continuing operation	452,682,856.55	869,722,700.33
	1. Net profit from continuing operation
	(“-”indicating net loss)	452,682,856.55	869,722,700.33
	2. Net profit from discontinued operation
	(“-”indicating net loss)
	(II) Classified based on the nature of ownership	452,682,856.55	869,722,700.33
	1. Profit or loss attributable to non-controlling
	interests	16,510,111.20	25,425,239.30
	2. Net profit attributable to shareholders of the
	parent company	436,172,745.35	844,297,461.03

– 19 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

			Amounts for the
			corresponding
		Amounts for	period of
Items		this period	previous year
VI. Other comprehensive income, net of tax		-241,934,901.26	-351,676,011.20
Other comprehensive income after tax attributable
to	the owners of the parent company, net	-241,934,901.26	-353,192,637.07
(I)	Other comprehensive income that cannot
	subsequently be reclassified to profit and loss	-337,950,829.45
	1. Re-measurement of changes in net liabilities
	or assets of defined benefit scheme
	2. Share of other comprehensive income of
	investees accounted for using equity method
	that cannot be reclassified to profit or loss
	3. Changes in fair value of financial assets
	at fair value through other comprehensive
	income	-337,950,829.45
(II)	Other comprehensive income that will
	subsequently be reclassified to profit and loss	96,015,928.19	-353,192,637.07
	1. Share of other comprehensive income of
	investees accounted for using equity method
	that will be reclassified to profit or loss	-5,011,114.81	-235,019.05
	2. Changes in fair value of financial assets
	at fair value through other comprehensive
	income	137,614,618.66	-329,365,627.13
	3. Financial assets measured at amortized costs
	are reclassified to financial assets at fair
	value through other comprehensive income
	4. Effective portion of hedging gains and losses
	from cash flows
	5. Exchange differences from translation of
	financial statements denominated in foreign
	currencies	-36,587,575.66	-23,591,990.89
	6. Others
Other comprehensive income after tax attributable
to	non-controlling interests, net	–	1,516,625.86
VII. Total comprehensive income		210,747,955.29	518,046,689.13
Total comprehensive income attributable to owners
of the parent company		194,237,844.09	491,104,823.96
Total comprehensive income attributable to
non-controlling interests		16,510,111.20	26,941,865.17
VIII. Earnings per share:
(I)	Basic (in RMB)	0.06	0.14
(II)	Diluted (in RMB)	N/A	N/A
Legal representative: Accounting chief:		Person-in-charge of the accounting department:
Pan Xinjun Zhang Jianhui		Zhang Jianhui

– 20 –

Income Statement of the Parent Company

For January to March 2018

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

			Amounts for the
			corresponding
		Amounts for	period of
Items		this period	previous year
I.	Operating income	232,863,875.51	1,242,471,346.26
	Net fee and commission income	442,214,542.38	495,845,934.89
	Of which: Net fee income from brokerage
	business	326,436,581.31	299,235,233.95
	Net fee income from investment banking
	business	93,283,195.81	135,769,715.07
	Net fee income from asset management
	business
	Net interest income	-451,197,126.19	-363,558,735.48
	Investment gains (“-” indicating losses)	697,649,272.81	660,653,819.39
	Of which: Gains from investments in associates and
	joint ventures	50,765,469.21	40,141,348.90
	Gains from asset disposal (“-” indicating losses)	-54,197.29	32,500.00
	Gains from changes in fair value (“-” indicating losses)	-447,895,507.04	456,516,074.04
	Foreign exchange gains (“-” indicating losses)	-17,811,213.33	-14,888,084.59
	Other income
	Other business income	9,958,104.17	7,869,838.01
II.	Operating expenses	582,737,193.95	747,759,845.86
	Business tax and surcharges	15,028,315.59	11,848,704.28
	Business and administrative expenses	569,016,307.00	737,452,982.97
	Asset impairment loss	-1,307,428.64	-1,541,841.39
	Other business cost
III.	Operating profit (“-” indicating loss)	-349,873,318.44	494,711,500.40
	Add: Non-operating income	46,162,554.20	228,033,900.00
	Less: Non-operating expenses	451,987.52	223,768.40
IV.	Total profit (“-” indicating loss)	-304,162,751.76	722,521,632.00
	Less: Income tax expenses	-159,831,536.03	137,021,709.47
V.	Net profit (“-” indicating net loss)	-144,331,215.73	585,499,922.53
	(I) Net profit from continuing operation
	(“-” indicating net loss)	-144,331,215.73	585,499,922.53
	(II) Net profit from discontinued operation
	(“-” indicating net loss)

– 21 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

				Amounts for the
				corresponding
			Amounts for	period of
Items			this period	previous year
VI. Other comprehensive income, net of tax			-203,846,135.98	-321,747,536.69
(I)	Other comprehensive income that cannot
	subsequently be reclassified to profit or loss		-337,950,829.45
	1.	Re-measurement of changes in net liabilities
		or assets of defined benefit scheme
	2.	Share of other comprehensive income of
		investees accounted for using the equity
		method, which cannot be reclassified to
		profit or loss
	3.	Changes in fair value of financial assets
		at fair value through other comprehensive
		income	-337,950,829.45
(II)	Other comprehensive income that will
	subsequently be reclassified to profit and loss		134,104,693.47	-321,747,536.69
	1.	Share of other comprehensive income of
		investees accounted for using the equity
		method, which will be subsequently
		reclassified to profit or loss	89,900.71	1,554,005.05
	2.	Changes in fair value of financial assets
		at fair value through other comprehensive
		income	134,014,792.76	-323,301,541.74
	3.	Financial assets measured at amortized costs
		are reclassified to financial assets at fair
		value through other comprehensive income
	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		-348,177,351.71	263,752,385.84
VIII. Earnings per share:
(I)	Basic (in RMB)		-0.02	0.09
(II)	Diluted (in RMB)		N/A	N/A
Legal representative: Accounting chief:			Person-in-charge of the accounting department:
Pan Xinjun		Zhang Jianhui	Zhang Jianhui

– 22 –

Consolidated Statement of Cash Flows

For January to March 2018

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

			Amounts for the
			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	2,165,709,434.08	-3,466,380,818.95
	Cash received from interests, fees and commissions	2,242,192,438.08	1,991,049,821.00
	Net increase in amounts due to banks and other
	financial institutions	-2,200,000,000.00	800,000,000.00
	Net increase in cash from repurchase business	-6,902,416,637.74	-4,998,823,941.99
	Net decrease in advances to customers		196,036,849.47
	Net cash received from securities trading agency
	services
	Cash received relating to other operating activities	1,023,685,034.08	1,581,524,112.17
	Subtotal of cash inflows from operating activities	-3,670,829,731.50	-3,896,593,978.30
	Net increase in advances to customers	359,135,852.43
	Net cash paid for securities trading agency services	118,267,264.53	4,138,437,297.27
	Net cash paid to securities issuers	264,032,557.89
	Cash paid for interests, fees and commissions	641,185,735.11	569,456,033.09
	Cash paid to and paid for staff	861,542,483.51	938,072,459.83
	Taxes paid	364,083,424.21	359,717,418.06
	Cash paid relating to other operating activities	1,549,860,202.14	1,853,357,098.49
	Sub-total of cash outflows from operating activities	4,158,107,519.82	7,859,040,306.74
	Net cash from operating activities	-7,828,937,251.32	-11,755,634,285.04

– 23 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

			Amounts for the
			corresponding
		Amounts for	period of
Items		this period	previous year
II:	Cash flows from investing activities:
	Cash received from disposal of investment	205,704,622.88	85,590,131.64
	Cash received from investment gains	625,862,569.03	10,391,171.99
	Net increase in disposal of available-for-sale financial
	assets		3,493,091,230.74
	Net increase in disposal of financial assets at fair value
	through other comprehensive income	14,779,588,931.28
	Net increase in disposal of held-to-maturity investments		31,000,000.00
	Cash received from other investing activities	9,554,506.50	95,400.50
	Sub-total of cash inflows from investing activities	15,620,710,629.69	3,620,167,934.87
	Cash paid for investments	111,050,000.00	80,530,000.00
	Cash paid for purchase and construction of fixed assets,
	intangible assets and other long-term assets	66,556,207.20	33,951,120.55
	Net decrease in purchase of available-for-sale financial
	assets		1,225,066,877.32
	Net decrease in purchase of financial assets at fair value
	through other comprehensive income	13,403,891,030.43
	Net decrease in purchase of debt investment measured
	at amortized costs	832,174,853.55
	Net cash paid for acquisition of subsidiaries and other
	business units
	Cash paid for other investing activities	5,400,000.00
	Sub-total of cash outflows from investing activities	14,419,072,091.18	1,339,547,997.87
	Net cash flows from investing activities	1,201,638,538.51	2,280,619,937.00
III.	Cash flows from financing activities:
	Proceeds from investments
	Of which: Cash contribution from non-controlling
	interests to subsidiaries
	Cash received from borrowings		523,118,372.27
	Cash received from issue of bonds	4,453,329,408.16	5,826,331,000.00
	Cash received relating to other financing activities	1,116,560.00	512,000.00
	Sub-total of cash inflows from financing activities	4,454,445,968.16	6,349,961,372.27
	Cash repayment of debts	4,221,312,582.68	6,175,976,000.00
	Cash paid for distribution of dividends,
	profits or interest payment	293,792,492.65	332,275,204.33
	Of which: Dividends and profits paid to non-
	controlling interests by subsidiaries	10,628,800.00
	Cash paid relating to other financing activities		225,000.00
	Sub-total of cash outflows from financing activities	4,515,105,075.33	6,508,476,204.33
	Net cash from financing activities	-60,659,107.17	-158,514,832.06

– 24 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Amounts for the corresponding Amounts for period of Items this period previous year IV. Effect of foreign exchange rate changes on cash and cash equivalents -5,806,488.93 -44,682,604.89 V. Net increase in cash and cash equivalents -6,693,764,308.91 -9,678,211,784.99 Add: Balance of cash and cash equivalents at the beginning of the period 51,237,277,440.17 54,215,336,237.86 VI. Balance of cash and cash equivalents at the end of the period 44,543,513,131.26 44,537,124,452.87 Legal representative: Accounting chief: Person-in-charge of the accounting department: Pan Xinjun Zhang Jianhui Zhang Jianhui

– 25 –

Cash Flow Statement of the Parent Company

For January to March 2018

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

			Amounts for the
			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	3,979,536,480.47	-3,945,484,784.03
	Cash received from interests, fees and commissions	1,080,389,774.57	1,325,925,771.51
	Net increase in amounts due to banks and other
	financial institutions	-2,200,000,000.00	800,000,000.00
	Net increase in funds from repurchase business	-7,626,499,629.39	-5,482,279,064.65
	Net decrease in advances to customers		178,039,137.41
	Net cash received from securities trading agency
	services	335,719,473.92
	Cash received relating to other operating activities	56,120,658.37	677,567,499.14
	Sub-total of cash inflows from operating activities	-4,374,733,242.06	-6,446,231,440.62
	Net increase in advances to customers	352,828,222.68
	Net cash paid for securities trading agency services		2,629,358,932.81
	Cash paid for interests, fees and commissions	619,919,753.88	562,863,519.85
	Cash paid to and paid for staff	304,146,135.13	224,625,808.09
	Taxes paid	16,931,651.58	240,729,055.64
	Cash paid relating to other operating activities	617,860,197.39	429,970,050.78
	Sub-total of cash outflows from operating activities	1,911,685,960.66	4,087,547,367.17
	Net cash flows from operating activities	-6,286,419,202.72	-10,533,778,807.79
II.	Cash flows from investing activities:
	Cash received from disposal of investment
	Cash received from investment gains	618,897,784.51	–
	Net increase in disposal of available-for-sale financial
	assets		3,311,353,824.50
	Net increase in disposal of financial assets at fair value
	through other comprehensive income	14,779,588,931.28
	Net decrease in held-to-maturity investments		31,000,000.00
	Cash received from other investing activities	46,085.00	95,400.50
	Subtotal of cash inflows from investing activities	15,398,532,800.79	3,342,449,225.00
	Cash paid for investments	1,000,000,000.00	600,000,000.00
	Cash paid for purchase and construction of fixed assets,
	intangible assets and other long-term assets	61,560,938.11	27,228,997.42
	Net decrease in purchase of debt investment measured
	at amortized costs	832,174,853.55
	Net decrease in purchase of available-for-sale financial
	assets		898,710,631.78
	Cash paid for other investing activities
	Subtotal of cash outflows from investing activities	15,297,626,822.09	1,525,939,629.20

– 26 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

				Amounts for the
				corresponding
			Amounts for	period of
Items			this period	previous year
	Net cash flows from investing activities		100,905,978.70	1,816,509,595.80
III. Cash flows from financing activities:
	Cash received from investments
	Cash received from borrowings
	Cash received from issue of bonds		2,916,560,000.00	5,826,331,000.00
	Cash received from other financing activities
	Sub-total of cash inflows from financing activities		2,916,560,000.00	5,826,331,000.00
	Cash repayment of debts		4,007,303,000.00	5,460,976,000.00
	Cash paid for distribution of dividends,
	profits or interest payment		212,903,708.29	311,829,644.55
	Cash paid for other financing activities
	Sub-total of cash outflows from financing activities		4,220,206,708.29	5,772,805,644.55
	Net cash flows from financing activities		-1,303,646,708.29	53,525,355.45
IV. Effect of foreign exchange rate changes on cash		and
	cash equivalents		-17,811,213.33	-14,888,084.59
V.	Net increase in cash and cash equivalents		-7,506,971,145.64	-8,678,631,941.13
	Add: Balance of cash and cash equivalents at the
	beginning of the period		34,760,465,664.92	36,467,600,162.02
VI. Balance of cash and cash equivalents at the end		of
	the period		27,253,494,519.28	27,788,968,220.89
	Legal representative: Accounting chief:	Person-in-charge of the accounting department:
	Pan Xinjun Zhang Jianhui		Zhang Jianhui

4.2 Auditors’ Report

□Applicable ✓Not Applicable

– 27 –