DFZQ — Interim / Quarterly Report 2019

Oct 30, 2019

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 THIRD QUARTERLY REPORT FOR THE YEAR 2019

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 third quarter ended September 30, 2019, 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 Third Quarterly Report for the Year 2019 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 October 30, 2019

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 Third Quarterly Report for the Year 2019

– 2 –

CONTENTS

I.	IMPORTANT NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
II.	COMPANY PROFILE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
III.	MATERIAL EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
IV.	APPENDICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

– 3 –

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, for which they will assume joint and several liabilities.

• 1.2 Information of the absent Director.

Name of	Position of	Reason for
absent Director	absent Director	being absent	Name of proxy
Wu Junhao	Non-executive	official affairs	Liu Wei
	Director
Li Xiang	Non-executive	official affairs	Pan Xinjun
	Director

This report has been considered and approved at the 15th meeting of the fourth session of the Board and the tenth meeting of the fourth session of the supervisory committee of the Company. Mr. Wu Junhao and Mr. Li Xiang, both being non-executive Directors, were unable to attend the Board meeting in person due to official affairs, and had appointed Mr. Liu Wei, a non-executive Director, and Mr. Pan Xinjun, an executive Director, respectively, to vote on their behalves. No objection from the Directors or supervisors of the Company was raised to this report.

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

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

– 4 –

II. COMPANY PROFILE

2.1 Key financial information

Unit: Yuan Currency: RMB

			Increase/decrease
			recorded at the end
			of this reporting period
			as compared with
	At the end of	At the end of	the end of
	this reporting period	the previous year	the previous year (%)
Total assets	255,474,924,123.33	226,869,672,192.01	12.61
Net assets attributable to the
shareholders of the Company	53,267,863,724.44	51,739,478,771.67	2.95
		From the beginning
		of the previous year
	From the beginning	to the end	Increase/decrease
	of the year to the end	of the reporting period	as compared with
	of this reporting period	of the previous year	the corresponding period
	(January – September)	(January – September)	of the previous year (%)
Net cash flows from operating activities	12,286,006,071.57	7,782,866,397.90	57.86
		From the beginning
		of the previous year
	From the beginning	to the end	Increase/decrease
	of the year to the end	of the reporting period	as compared with
	of this reporting period	of the previous year	the corresponding period
	(January – September)	(January – September)	of the previous year (%)
Operating income	13,607,480,201.38	6,565,693,526.21	107.25
Net profit attributable to the
shareholders of the Company	1,741,410,722.22	903,852,606.34	92.67
Net profit attributable to the
shareholders of the Company
after deducting non-recurring
profit or loss	1,670,962,223.75	834,440,004.99	100.25
Weighted average returns on			Increased by
net assets (%)	3.31	1.74	1.57 percentage points
Basic earnings per share (RMB/Share)	0.25	0.13	92.31
Diluted earnings per share
(RMB/Share)	N/A	N/A	N/A

– 5 –

Non-recurring items and amounts

✓Applicable □ Not Applicable

Unit: Yuan Currency: RMB

		From the beginning
		of the year
	Amounts for	to the end
	this period	of this reporting period
Items	(July – September)	(January – September)	Remarks
Gains or losses from disposals of	-325,004.00	-1,472,433.57
non-current assets
Government grants recognized in	1,744,313.80	142,470,186.39	Financial support
current profit 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 income and	-1,842,625.64	-47,066,421.52
expenses except items above
Effect of non-controlling interests
(after tax)
Effect of income tax	105,828.95	-23,482,832.83
Total	-317,486.89	70,448,498.47

– 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)

Total number of shareholders (accounts)						141,581
	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 of
				shares	shares
Shenergy (Group) Company Limited	1,767,522,422	25.27	230,000,000	Nil	–	State-owned
						legal person
Hong Kong Securities Clearing Company	1,026,967,580	14.68	–	Nil	–	Foreign legal
Nominees Limited						person
Shanghai Haiyan Investment Management	345,486,596	4.94	59,215,263	Nil	–	State-owned
Company Limited						legal person
Shanghai United Media Group	242,977,306	3.47	–	Nil	–	State-owned
						legal person
China Securities Finance Corporation	209,110,425	2.99	–	Nil	–	Unknown
Limited
Zheneng Capital Holdings Limited	208,700,000	2.98	–	Nil	–	State-owned
(浙能資本控股有限公司)						legal person
Shanghai Electric (Group) Corporation	181,367,059	2.59	–	Nil	–	State-owned
						legal person
China Post Group Corporation	178,743,236	2.56	–	Nil	–	State-owned
						legal person
Shanghai Jinqiao Export Processing Zone	138,661,386	1.98	–	Nil	–	Domestic non-
Development Co., Ltd.						state-owned
(上海金橋出口加工區開發股份						legal person
有限公司)
Shanghai Construction Group Co., Ltd.	133,523,008	1.91	–	Nil	–	State-owned
						legal person

– 7 –

Unit: Share

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
Shenergy (Group) Company Limited	1,537,522,422	RMB ordinary	1,537,522,422
		shares
Hong Kong Securities Clearing Company	1,026,967,580	Overseas listed	1,026,967,580
Nominees Limited		foreign shares
Shanghai Haiyan Investment Management	286,271,333	RMB ordinary	286,271,333
Company Limited		shares
Shanghai United Media Group	242,977,306	RMB ordinary	242,977,306
		shares
China Securities Finance Corporation Limited	209,110,425	RMB ordinary	209,110,425
		shares
Zheneng Capital Holdings Limited	208,700,000	RMB ordinary	208,700,000
(浙能資本控股有限公司)		shares
Shanghai Electric (Group) Corporation	181,367,059	RMB ordinary	181,367,059
		shares
China Post Group Corporation	178,743,236	RMB ordinary	178,743,236
		shares
Shanghai Jinqiao Export Processing	138,661,386	RMB ordinary	138,661,386
Zone Development Co., Ltd.		shares
(上海金橋出口加工區開發股份
有限公司)
Shanghai Construction Group Co., Ltd.	133,523,008	RMB ordinary	133,523,008
		shares
Related party relationship or parties acting		N/A
in concert among above 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

			Increase/
Items	September 30, 2019	December 31, 2018	Decrease (%)	Reasons
Clearing settlement funds	12,382,558,071.73	9,354,271,913.15	32.37	Mainly due to increase in
				clearing settlement funds
				held on behalf of
				customers
Derivative financial assets	1,152,352,988.37	318,489,770.02	261.82	Increase in the assets
				arising from change
				in the fair value of
				derivatives
Deposits with exchanges and	1,366,716,031.68	1,025,365,312.99	33.29	Mainly due to increase in
financial institutions				futures deposits with
				exchanges and financial
				institutions
Receivables	1,109,875,942.99	668,408,173.00	66.05	Mainly due to increase in
				settlement receivables
Investment properties	27,248,931.93	0.00	N/A	New property for rent
				during the current period
Right-of-use assets	811,559,238.82	0.00	N/A	New item of New Standards
				on Leases
Transactional financial liabilities	10,834,554,237.36	6,834,381,107.58	58.53	Mainly due to increase in
				scale of short selling
				precious metal
Derivative financial liabilities	2,524,765,532.82	905,808,582.67	178.73	Mainly due to increase in
				commodity options
Taxes payable	208,057,662.52	512,215,891.61	-59.38	Mainly due to the decrease
				in the payable corporate
				income tax

– 9 –

Unit: Yuan Currency: RMB

			Increase/
Items	September 30, 2019	December 31, 2018	Decrease (%)	Reasons
Payables	768,461,090.77	411,623,883.69	86.69	Mainly due to increase in
				settlement payables
Contract liabilities	414,302,564.65	134,896,905.67	207.13	Increase in advance
				receivables of
				subsidiaries
Lease liabilities	796,665,640.57	0.00	N/A	New item of New Standards
				on Leases
Other liabilities	2,023,404,117.37	933,459,911.25	116.76	Mainly due to newly added
				payables to subsidiaries
				for shareholding
				acquisition during
				the current period
Other comprehensive income	312,649,729.45	-198,814,876.12	N/A	Mainly due to increase in
				changes in the fair value
				of other equity
				investment
Non-controlling interests	45,943,804.17	532,973,568.46	-91.38	Due to proposed acquisition
				of non-controlling
				interests of subsidiaries

– 10 –

Unit: Yuan Currency: RMB

	January – September	January – September	Increase/
Items	2019	2018	Decrease (%)	Reasons
Gains from changes in fair value	1,054,307,774.97	-1,912,341,712.23	N/A	Mainly due to increase in
				changes in the fair value
				of transactional financial
				assets
Other business income	6,574,628,469.28	1,903,608,734.90	245.38	Increase in sales income
				from subsidiaries’ bulk
				commodity trading
Gains from disposal of assets	-159,453.79	-20,225.15	N/A	Increase in losses from
				disposal of fixed assets
Credit impairment loss	932,909,204.82	95,936,163.22	872.43	Increase in impairment
				provision for
				collateralized stock
				repurchase business
Other business cost	6,561,038,914.13	1,874,891,037.07	249.94	Increase of cost of
				sales of bulk commodity
				by subsidiaries
Non-operating expenses	49,629,368.16	24,208,109.90	105.01	Increase in donations
Income tax expenses	287,919,897.18	44,524,214.04	546.66	Increase in taxable profit
Other comprehensive income after	486,339,810.85	-269,139,742.12	N/A	Mainly due to increase in
tax, net				fair value of other equity
				investment
Basic earnings per share (RMB/Share)	0.25	0.13	92.31	Due to increase of
				net profit

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

□ Applicable ✓Not Applicable

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

□ Applicable ✓Not Applicable

• 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 October 30, 2019

– 11 –

IV. APPENDICES

4.1 Financial Statements

Consolidated Balance Sheet

September 30, 2019

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Assets: Cash and bank balances Of which: Deposits held on behalf of customers Clearing settlement funds Of which: Settlement funds held on behalf of customers Precious metal Placements to banks and other financial institutions Advance to customers Derivative financial assets Deposits with exchanges and financial institutions Receivables Receivables financing Contract assets Financial assets acquired under resale agreements Assets classified as held for sale Financial investment: Financial assets at fair value through profit or loss Transactional financial assets Debt investment Available-for-sale financial assets Other debt investment Other equity investment Held-to-maturity investments Long-term equity investments Investment properties Fixed assets Construction in progress Right-of-use assets Intangible assets Goodwill Deferred income tax assets Other assets Total assets

September 30, 2019 December 31, 2018 44,752,529,959.38 36,764,638,747.42 26,271,356,382.88 24,261,678,724.08 12,382,558,071.73 9,354,271,913.15 10,436,892,991.39 8,088,285,022.76 11,560,179,481.95 10,276,754,601.78 1,152,352,988.37 318,489,770.02 1,366,716,031.68 1,025,365,312.99 1,109,875,942.99 668,408,173.00 23,643,147,326.44 28,168,583,870.31 64,716,347,065.76 52,035,346,966.07 7,577,860,344.28 7,912,596,426.86 67,062,729,573.24 62,209,435,525.79 10,037,429,104.63 9,316,262,245.09 4,540,775,462.43 4,015,263,310.81 27,248,931.93 2,027,925,112.55 2,087,594,008.99 65,013,228.65 61,063,777.16 811,559,238.82 128,622,924.56 132,340,289.10 32,135,375.10 32,135,375.10 774,533,630.48 895,831,976.04 1,705,384,328.36 1,595,289,902.33 255,474,924,123.33 226,869,672,192.01

– 12 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Liabilities: Short-term borrowings Short-term financial bills payable Due to banks and other financial institutions Transactional financial liabilities Financial liabilities at fair value through profit or loss Derivative financial liabilities Financial assets sold under repurchase agreements Account payable to brokerage clients Funds payable to securities issuers Accrued staff costs Taxes payable Payables Contract liability Held-for-sale liabilities Provision Long-term borrowings Bonds payable Of which: Preferred shares Perpetual debts Lease liabilities Deferred income Deferred income tax liabilities Other liabilities Total liabilities

September 30, 2019 December 31, 2018 1,189,915,427.58 1,653,161,748.21 15,179,315,139.92 12,411,606,074.75 8,015,349,583.34 11,027,067,361.01 10,834,554,237.36 6,834,381,107.58 2,524,765,532.82 905,808,582.67 61,569,946,193.56 49,415,676,665.10 36,015,908,058.87 32,059,064,690.02 1,186,768,599.44 1,249,288,730.97 208,057,662.52 512,215,891.61 768,461,090.77 411,623,883.69 414,302,564.65 134,896,905.67 61,433,702,745.95 57,048,968,299.35 796,665,640.57 2,023,404,117.37 933,459,911.25 202,161,116,594.72 174,597,219,851.88

– 13 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Equity of owners (or equity of shareholders):	Items Equity of owners (or equity of shareholders):	September 30, 2019	December 31, 2018
Share capital		6,993,655,803.00	6,993,655,803.00
Other equity instruments
Of which: Preferred shares
Perpetual debts
Capital reserve		28,254,929,991.63	28,254,929,991.63
Less: Treasury shares
Other comprehensive income		312,649,729.45	-198,814,876.12
Surplus reserve		3,085,378,480.26	3,085,378,480.26
General risk reserve		7,166,346,140.78	7,061,605,129.67
Undistributed profits		7,454,903,579.32	6,542,724,243.23
Total equity attributable to the owners (or shareholders)
of the parent company		53,267,863,724.44	51,739,478,771.67
Non-controlling interests		45,943,804.17	532,973,568.46
Total equity of owners (or equity of shareholders)		53,313,807,528.61	52,272,452,340.13
Total liabilities and equity of	owners
(or equity of shareholders)		255,474,924,123.33	226,869,672,192.01
Legal representative:	Accounting chief:	Person-in-charge of the accounting department:
Pan Xinjun	Zhang Jianhui	You Wenjie

– 14 –

Balance Sheet of the Parent Company

September 30, 2019

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Assets: Cash and bank balances Of which: Deposits held on behalf of customers Clearing settlement funds Of which: Settlement funds held on behalf of customers Precious metal Placements to banks and other financial institutions Advance to customers Derivative financial assets Deposits with exchanges and financial institutions Receivables Receivables financing Contract assets Financial assets acquired under resale agreements Assets classified as held for sale Financial investment: Financial assets at fair value through profit or loss Transactional financial assets Debt investment Available-for-sale financial assets Other debt investment Other equity investment Held-to-maturity investments Long-term equity investments Investment properties Fixed assets Construction in progress Right-of-use assets Intangible assets Goodwill Deferred income tax assets Other assets Total assets

September 30, 2019 December 31, 2018 26,098,368,670.31 16,652,307,484.64 15,958,973,297.96 11,324,485,108.23 6,782,832,495.34 5,108,806,687.60 4,936,397,298.32 3,912,780,803.31 11,274,042,555.10 9,915,282,089.18 1,149,389,072.88 222,468,526.57 1,037,977,552.78 752,083,508.06 419,109,833.72 209,564,768.28 22,857,058,657.42 27,450,130,811.96 44,872,702,188.31 32,895,461,854.66 7,878,230,207.29 7,912,596,426.86 67,062,729,573.24 62,209,435,525.79 9,876,118,453.60 9,108,017,592.57 15,005,681,199.80 13,715,374,797.24 27,248,931.93 1,992,914,051.84 2,055,793,612.36 53,043,083.33 48,053,964.89 579,315,203.03 101,481,182.21 110,379,955.78 18,947,605.48 18,947,605.48 581,202,608.79 671,010,524.35 260,284,315.01 366,922,127.68 217,928,677,441.41 189,422,637,863.95

– 15 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Liabilities: Short-term borrowings Short-term financial bills payable Due to banks and other financial institutions Transactional financial liabilities Financial liabilities at fair value through profit or loss Derivative financial liabilities Financial assets sold under repurchase agreements Account payable to brokerage clients Funds payable to securities issuers Accrued staff costs Taxes payable Payables Contract liability Held-for-sale liabilities Provision Long-term borrowings Bonds payable Of which: Preferred shares Perpetual debts Deferred liabilities Deferred income Deferred income tax liabilities Other liabilities Total liabilities

September 30, 2019 December 31, 2018 14,047,726,279.45 11,428,294,435.42 8,015,349,583.34 11,027,067,361.01 8,855,417,241.37 5,066,887,170.96 2,524,557,877.93 901,170,158.36 57,209,607,478.87 45,284,204,709.08 20,195,051,839.42 14,850,110,625.95 266,352,889.69 246,452,976.58 15,419,641.88 91,390,202.26 55,285,417.35 17,314,375.70 56,133,009,179.86 51,969,954,687.20 567,333,710.25 441,709,242.21 246,850,501.11 168,326,820,381.62 141,129,697,203.63

– 16 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

ems uity of owners (or equity of shareholders): Share capital Other equity instruments Of which: Preferred shares Perpetual debts Capital reserve Less: treasury shares Other comprehensive income Surplus reserve General risk reserve Undistributed profits Total equity of owners (or equity of shareholders) Total liabilities and equity of owners (or equity of shareholders)	September 30, 2019 December 31, 2018 6,993,655,803.00 6,993,655,803.00 28,157,008,370.79 28,157,008,370.79 468,386,937.52 -40,911,922.62 3,085,378,480.26 3,085,378,480.26 6,043,382,547.55 6,043,382,547.55 4,854,044,920.67 4,054,427,381.34 49,601,857,059.79 48,292,940,660.32 217,928,677,441.41 189,422,637,863.95

Items

Equity of owners (or equity of shareholders):

Legal representative: Accounting chief: Pan Xinjun Zhang Jianhui

Person-in-charge of the accounting department: You Wenjie

– 17 –

Consolidated Income Statement

January – September 2019

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Third quarter of 2019 (July – September) Third quarter of 2018 (July – September) I. Total operating income 5,528,576,562.25 2,288,357,393.42 Net interest income 261,799,338.33 324,270,974.85 Of which: Interest income 1,573,070,691.52 1,675,310,559.78 Interest expense 1,311,271,353.19 1,351,039,584.93 Net fee and commission income 1,083,754,312.50 1,060,517,788.75 Of which: Net fee income from brokerage business 377,564,688.22 282,623,325.54 Net fee income from investment banking 189,429,364.84 208,424,289.34 Net fee income from asset management business 500,835,439.33 467,566,401.70 Investment gains (“-” indicating losses) 723,104,655.14 510,949,989.41 Of which: Gains from investments in associates and joint ventures 86,598,701.54 130,323,961.70 Income generated from the derecognition of financial assets measured at amortized cost (“-” indicating losses) Net open hedge income (“-” indicating losses) Other income 200,082.66 Gains from changes in fair value (“-” indicating losses) 297,533,507.82 -751,391,257.80 Foreign exchange gains (“-” indicating losses) -29,682,528.82 -8,692,543.75 Other business income 3,191,889,926.56 1,152,697,653.38 Gains from asset disposal (“-” indicating losses) -22,731.94 4,788.58

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 13,607,480,201.38 6,565,693,526.21 780,706,872.25 736,390,975.86 4,652,886,909.26 4,905,629,120.63 3,872,180,037.01 4,169,238,144.77 3,293,282,682.00 3,988,154,091.98 1,155,332,538.02 1,022,284,845.49 718,124,566.19 783,954,467.65 1,334,619,024.59 1,971,034,108.50 1,933,436,049.09 1,875,175,027.45 415,887,654.55 634,497,067.05 200,082.66 1,054,307,774.97 -1,912,341,712.23 -28,922,275.08 -25,273,366.60 6,574,628,469.28 1,903,608,734.90 -159,453.79 -20,225.15

– 18 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items II. Total operating expenses Business tax and surcharges Business and administrative expenses Asset impairment loss Credit impairment loss Other asset impairment loss Other business cost III. Operating profit (“-” indicating loss) Add: Non-operating income Less: Non-operating expenses IV. Total profit (“-” indicating total loss) Less: Income tax expenses V. Net profit (“-” indicating net loss) (i) Classified based on continuing operation 1. Net profit from continuing operation (“-” indicating net loss) 2. Net profit from discontinued operation (“-” indicating net loss) (ii) Classified based on the nature of ownership 1. Net profit attributable to shareholders of the parent company (“-” indicating net loss) 2. Profit or loss attributable to non-controlling interests (“-” indicating net loss)	Third quarter of 2019 (July – September) Third quarter of 2018 (July – September) 4,963,945,223.51 2,104,519,553.64 15,003,594.70 13,237,114.40 1,282,353,428.21 957,363,357.34 462,161,395.91 -3,043,684.54 3,204,426,804.69 1,136,962,766.44 564,631,338.74 183,837,839.78 2,837,325.47 -16,440,168.62 3,237,909.37 4,333,705.31 564,230,754.84 163,063,965.85 32,614,111.02 -29,323,002.63 531,616,643.82 192,386,968.48 531,616,643.82 192,386,968.48 531,616,643.82 192,386,968.48 531,616,643.82 192,386,968.48 531,794,815.98 188,263,684.38 -178,172.16 4,123,284.10	First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 11,628,090,478.71 5,669,551,652.83 47,947,584.63 56,259,255.16 4,086,194,775.13 3,642,465,197.38 932,909,204.82 95,936,163.22 6,561,038,914.13 1,874,891,037.07 1,979,389,722.67 896,141,873.38 143,720,153.25 124,454,996.51 49,629,368.16 24,208,109.90 2,073,480,507.76 996,388,759.99 287,919,897.18 44,524,214.04 1,785,560,610.58 951,864,545.95 1,785,560,610.58 951,864,545.95 1,785,560,610.58 951,864,545.95 1,785,560,610.58 951,864,545.95 1,741,410,722.22 903,852,606.34 44,149,888.36 48,011,939.61

– 19 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Third quarter of 2019 (July – September) Third quarter of 2018 (July – September) VI. Other comprehensive income after tax, net 63,029,798.31 55,403,353.54 Other comprehensive income attributable to the owners of the parent company after tax, net 63,029,798.31 55,403,353.54 (i) Other comprehensive income that cannot be reclassified to profit or loss -183,380,946.45 40,963,613.38 1. Re-measurement of amount of changes in defined benefit scheme 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method 25,818,857.71 3. Changes in fair value of other equity instruments investment -183,380,946.45 15,144,755.67 4. Changes in the fair value of the Company’s own credit risk

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 486,339,810.85 -269,139,742.12 486,339,810.85 -269,139,742.12 112,434,939.02 -587,755,063.16 112,434,939.02 -587,755,063.16

– 20 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Third quarter of 2019 (July – September) Third quarter of 2018 (July – September) (ii) Other comprehensive income that will be reclassified to profit and loss 246,410,744.76 14,439,740.16 1. Other comprehensive income that can be transferred to profit or loss under the equity method -8,086,161.77 -30,769,680.55 2. Changes in fair value of other debt investments 230,612,918.91 27,197,436.50 3. Gains and losses from changes in fair value of available-for-sale financial assets 4. The amount of financial assets reclassified into other comprehensive income 5. Held-to-maturity investments reclassified as gains and losses on available-for-sale financial assets 6. Credit impairment provisions of other debt investment 345,788.69 3,339,979.97 7. Cash flow hedge reserve (Effective portion of hedging gains and losses from cash flows) 8. Exchange differences from translation of financial statements denominated in foreign currencies 23,538,198.93 14,672,004.24 9. Others Other comprehensive income after tax attributable to non-controlling interests, net

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 373,904,871.83 318,615,321.04 -8,953,041.23 -47,032,856.05 354,663,099.38 338,291,301.27 4,546,205.28 656,643.96 23,648,608.40 26,700,231.86

– 21 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

		Third quarter	Third quarter	First three quarters	First three quarters
		of 2019	of 2018	of 2019	of 2018
		(July –	(July –	(January –	(January –
Items		September)	September)	September)	September)
VII. Total comprehensive income		594,646,442.13	247,790,322.02	2,271,900,421.43	682,724,803.83
Total comprehensive income attributable to
owners of the parent company		594,824,614.29	243,667,037.92	2,227,750,533.07	634,712,864.22
Total comprehensive income attributable to
non-controlling interests		-178,172.16	4,123,284.10	44,149,888.36	48,011,939.61
VIII.Earnings per share:
(i) Basic (in RMB)		0.08	0.03	0.25	0.13
(ii) Diluted (in RMB)		N/A	N/A	N/A	N/A
Legal representative:	Accounting chief:		Person-in-charge of the accounting department:
Pan Xinjun	Zhang Jianhui			You Wenjie

– 22 –

Income Statement of the Parent Company

January – September 2019

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items I. Total operating income Net interest income Of which: Interest income Interest expense Net fee and commission income Of which: Net fee income from brokerage business Net fee income from investment banking Net fee income from asset management business Investment gains (“-” indicating losses) Of which: Gains from investments in associates and joint ventures Income generated from the derecognition of financial assets measured at amortized cost (“-” indicating losses) Net open hedge income (“-” indicating losses) Other income Gains from changes in fair value (“-” indicating losses) Foreign exchange gains (“-” indicating losses) Other business income Gains from asset disposal (“-” indicating losses)	Third quarter of 2019 (July – September) Third quarter of 2018 (July – September) 1,745,126,375.15 213,974,308.03 245,726,347.24 303,775,989.95 1,446,159,945.45 1,565,326,638.42 1,200,433,598.21 1,261,550,648.47 377,154,209.08 395,770,994.87 301,964,158.24 209,229,767.83 87,194,057.38 115,565,932.37 722,509,534.02 282,932,943.63 117,146,639.27 81,746,666.56 394,077,168.39 -781,651,283.23 3,724,285.42 6,645,452.47 1,957,562.94 6,495,421.76 -22,731.94 4,788.58	First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 4,587,752,163.64 1,359,700,510.88 746,612,818.17 748,198,513.03 4,302,423,339.21 4,577,168,468.81 3,555,810,521.04 3,828,969,955.78 1,212,964,765.28 1,145,755,576.45 957,485,210.00 817,440,319.28 270,448,970.54 262,705,442.62 1,449,220,213.81 1,263,299,058.79 307,333,647.83 243,102,595.40 1,164,354,230.53 -1,808,771,135.32 4,088,820.51 -8,751,937.78 10,670,769.13 19,990,660.86 -159,453.79 -20,225.15

– 23 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items Third quarter of 2019 (July – September) Third quarter of 2018 (July – September) II. Total operating expenses 1,159,885,939.61 523,115,837.64 Business tax and surcharges 10,772,528.02 8,911,321.92 Business and administrative expenses 686,197,357.85 515,721,597.25 Asset impairment loss Credit impairment loss 461,069,625.40 -1,517,081.53 Other asset impairment loss Other business cost 1,846,428.34 III. Operating profit (“-” indicating loss) 585,240,435.54 -309,141,529.61 Add: Non-operating income 272,416.87 1,844,417.28 Less: Non-operating expenses 1,736,686.83 2,789,215.82 IV. Total profit (“-” indicating total loss) 583,776,165.58 -310,086,328.15 Less: Income tax expenses -45,136,132.37 -232,419,117.58 V. Net profit (“-” indicating net loss) 628,912,297.95 -77,667,210.57 (i) Net profit from continuing operation (“-” indicating net loss) 628,912,297.95 -77,667,210.57 (ii) Net profit from discontinued operation (“-” indicating net loss) VI. Other comprehensive income after tax, net 71,922,456.88 93,389,831.82 (I) Other comprehensive income that cannot be reclassified to profit or loss -161,271,136.25 60,553,464.42 1. Re-measurement of amount of changes in defined benefit scheme 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method 3. Changes in fair value of other equity instruments investment -161,271,136.25 60,553,464.42 4. Changes in the fair value of the Company’s own credit risk

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 3,132,145,879.28 1,881,952,224.65 36,309,994.60 40,158,468.02 2,163,813,962.96 1,748,342,859.19 926,332,061.30 93,450,897.44 5,689,860.42 1,455,606,284.36 -522,251,713.77 30,966,133.14 54,376,946.96 43,504,476.87 18,019,941.36 1,443,067,940.63 -485,894,708.17 -72,663,597.54 -534,812,555.06 1,515,731,538.17 48,917,846.89 1,515,731,538.17 48,917,846.89 492,550,441.60 -168,980,827.33 130,767,039.67 -510,888,910.13 130,767,039.67 -510,888,910.13

– 24 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

					Third quarter	Third quarter	First three quarters	First three quarters
					of 2019	of 2018	of 2019	of 2018
					(July –	(July –	(January –	(January –
Items (II)	Other comprehensive income that will				September)	September)	September)	September)
	be reclassified to profit and loss				233,193,593.13	32,836,367.40	361,783,401.93	341,908,082.80
	1.	Other comprehensive income that
		can be transferred to profit or loss
		under the equity method			2,234,885.53	2,298,950.93	2,574,097.27	2,960,137.57
	2.	Changes in fair value of other
	3.	debt investments Gains and losses from changes			230,612,918.91	27,197,436.50	354,663,099.38	338,291,301.27
		in fair value of available-for-sale
		financial assets
	4.	The amount of financial
		assets reclassified into other
		comprehensive income
	5.	Held-to-maturity investments
		reclassified as gains and losses	on
		available-for-sale financial assets
	6.	Credit impairment provisions of
	7.	other debt investment Cash flow hedge reserve			345,788.69	3,339,979.97	4,546,205.28	656,643.96
		(Effective portion of hedging
		gains and losses from cash flows)
	8.	Exchange differences from
		translation of financial statements
		denominated in foreign currencies
	9.	Others
VII. Total comprehensive income					700,834,754.83	15,722,621.25	2,008,281,979.77	-120,062,980.44
VIII.Earnings per share:
(i)	Basic (in RMB)
(ii)	Diluted (in RMB)
Legal representative:			Accounting chief:			Person-in-charge of the accounting department:
	Pan Xinjun			Zhang Jianhui			You Wenjie

– 25 –

Consolidated Statement of Cash Flows

January – September 2019

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

	First three quarters	First three quarters
	of 2019	of 2018
	(January –	(January –
Items I. Cash flows from operating activities:	September)	September)
Cash received from sale of commodities and
rendering of services
Net increase in amount due to other financial institutions
Cash received for interests, fees and commissions	5,902,070,923.77	7,010,942,449.56
Net decrease in financial assets held for transaction purposes		5,499,706,388.03
Net increase in transactional financial liabilities Net increase in amount due to banks and other financial institutions Net increase in cash from repurchase business Net decrease in advances to customers Net cash received from securities trading agency services Cash received relating to other operating activities Subtotal of cash inflows from operating activities Net increase in financial assets held for transaction purposes	3,130,112,296.28 16,071,170,305.97 3,953,467,331.35 8,989,892,381.07 38,046,713,238.44 7,172,142,839.78	-6,000,000,000.00 8,642,069,964.17 1,651,401,796.46 18,990,260.52 4,757,578,322.56 21,580,689,181.30
Net decrease in transactional financial liabilities Net decrease in amount due to banks and		817,875,018.94
other financial institutions Net increase in placements to banks and	3,000,000,000.00
other financial institutions
Net increase in advances to customers Net increase in financial assets acquired under resale agreements Net cash paid for securities trading agency services Cash paid for interests, fees and commissions Cash paid to and paid for staff Taxes paid Cash paid relating to other operating activities Sub-total of cash outflows from operating activities Net cash from operating activities	1,304,004,003.01 2,009,512,179.40 2,604,881,053.63 971,350,768.83 8,698,816,322.22 25,760,707,166.87 12,286,006,071.57	264,032,557.89 1,959,389,284.41 2,665,353,301.91 1,049,637,276.33 7,041,535,343.92 13,797,822,783.40 7,782,866,397.90

– 26 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items II. Cash flows from investing activities: Cash received from disposal of investment Cash received from investment gains Net decrease in other transactional financial assets Net decrease in other debt investment Net decrease in debt investment Net cash received from disposal of fixed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other operating units Cash received relating to other investing activities Sub-total of cash inflows from investing activities Cash paid for investments Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets Net increase in other transactional financial assets Net increase in other debt investment Net increase in other equity investment Net cash paid for acquisition of subsidiaries and other operating units Cash paid for other investing activities Sub-total of cash outflows from investing activities Net cash flows from investing activities III. Cash flows from financing activities: Cash received from investments Of which: Cash received by subsidiaries from investments from non-controlling shareholders Cash received from borrowings Cash received from issue of bonds Cash received relating to other financing activities Sub-total of cash inflows from financing activities Cash repayment of debts Cash paid for distribution of dividends, profits or interest payment Of which: Dividends and profits paid to non-controlling interests by subsidiaries Cash paid relating to other financing activities Sub-total of cash outflows from financing activities Net cash from financing activities

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 237,976,855.72 839,066,539.51 2,707,434,390.49 2,205,690,235.01 1,163,861,942.03 -14,289,018,801.48 283,872,162.63 -2,002,318,170.73 7,648,821.99 11,198,293.21 3,236,932,230.83 -12,071,519,962.45 596,905,000.00 540,105,395.30 181,275,844.89 230,707,495.66 3,505,032,571.78 4,361,299,492.49 527,066,558.79 5,400,000.00 9,171,579,467.95 776,212,890.96 -5,934,647,237.12 -12,847,732,853.41 510,000.00 510,000.00 3,683,652,543.87 1,180,133,815.35 44,347,626,992.15 27,173,391,321.28 1,116,560.00 48,031,279,536.02 28,355,151,696.63 39,974,734,464.33 27,914,498,279.38 3,255,457,857.18 3,995,516,502.07 14,169,890.57 13,705,698.15 104,563,061.10 1,470,000.00 43,334,755,382.61 31,911,484,781.45 4,696,524,153.41 -3,556,333,084.82

– 27 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items IV. Effect of foreign exchange rate changes on cash and cash equivalents V. Net increase in cash and cash equivalents Add: Balance of cash and cash equivalents at the beginning of the period VI. Balance of cash and cash equivalents at the end of the period	First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) -24,377,355.06 -922,889.82 11,023,505,632.80 -8,622,122,430.15 46,079,670,480.45 51,237,277,440.17 57,103,176,113.25 42,615,155,010.02

• VI. Balance of cash and cash equivalents at the end of the period

Legal representative: Accounting chief: Person-in-charge of the accounting department: Pan Xinjun Zhang Jianhui You Wenjie

– 28 –

Cash Flow Statement of the Parent Company

January – September 2019

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items I. Cash flows from operating activities: Cash received from sale of commodities and rendering of services Net increase in amount due to other financial institutions Cash received for interests, fees and commissions Net decrease in financial assets held for transaction purposes Net increase in transactional financial liabilities Net increase in amount due to banks and other financial institutions Net increase in cash from repurchase business Net decrease in advances to customers Net cash received from securities trading agency services Cash received relating to other operating activities Subtotal of cash inflows from operating activities Net increase in financial assets held for transaction purposes Net increase in placements to banks and other financial institutions Net decrease in amount due to banks and other financial institutions Net increase in advances to customers Net increase in financial assets acquired under resale agreements Net cash paid for securities trading agency services Cash paid for interests, fees and commissions Cash paid to and paid for staff Taxes paid Cash paid relating to other operating activities Sub-total of cash outflows from operating activities Net cash from operating activities

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 3,298,648,861.42 3,356,275,280.70 2,090,974,627.92 2,885,463,802.42 -6,000,000,000.00 15,950,515,650.33 11,076,499,614.82 1,679,562,829.02 5,344,941,213.47 384,016,225.33 218,680,608.58 27,863,585,752.97 12,421,992,961.04 6,978,712,248.49 817,875,018.94 3,000,000,000.00 1,387,361,947.93 292,801,929.13 1,682,835,293.70 1,794,816,904.45 1,393,255,176.45 1,457,943,489.96 341,277,028.25 113,019,416.80 594,141,872.24 1,181,585,324.64 15,377,583,567.06 5,658,042,083.92 12,486,002,185.91 6,763,950,877.12

– 29 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items II. Cash flows from investing activities: Cash received from disposal of investment Cash received from investment gains Net decrease in other transactional financial assets Net decrease in other debt investment Net decrease in debt investment Net cash received from disposal of fixed assets, intangible assets and other long-term assets Cash received relating to other investing activities Sub-total of cash inflows from investing activities Cash paid for investments Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets Net increase in other transactional financial assets Net increase in other debt investment Net increase in other equity investment Net increase in debt investment Cash paid for other investing activities Sub-total of cash outflows from investing activities Net cash flows from investing activities III. Cash flows from financing activities: Cash received from investments Cash received from borrowings Cash received from issue of bonds Cash received relating to other financing activities Sub-total of cash inflows from financing activities Cash repayment of debts Cash paid for distribution of dividends, profits or interest payment Cash paid relating to other financing activities Sub-total of cash outflows from financing activities Net cash from financing activities

First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 3,158,201,492.28 2,574,671,151.72 820,014,662.37 -14,288,968,927.01 -2,002,318,170.73 4,974,345.64 1,686,640.47 3,163,175,837.92 -12,894,914,643.18 1,088,902,588.24 1,500,000,000.00 123,630,294.07 190,685,308.64 3,506,032,571.78 4,361,299,492.49 549,082,358.64 16,127,837.37 9,645,075,142.59 1,690,685,308.64 -6,481,899,304.67 -14,585,599,951.82 2,557,751,448.67 43,251,997,424.15 24,266,674,000.00 45,809,748,872.82 24,266,674,000.00 37,439,212,901.60 23,134,620,388.39 3,198,472,878.05 3,702,573,552.62 47,141,005.16 40,684,826,784.81 26,837,193,941.01 5,124,922,088.01 -2,570,519,941.01

– 30 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items IV. Effect of foreign exchange rate changes on cash and cash equivalents V. Net increase in cash and cash equivalents Add: Balance of cash and cash equivalents at the beginning of the period VI. Balance of cash and cash equivalents at the end of the period	First three quarters of 2019 (January – September) First three quarters of 2018 (January – September) 1,338,820.51 -8,751,937.78 11,130,363,789.76 -10,400,920,953.49 21,747,700,505.58 34,760,465,664.92 32,878,064,295.34 24,359,544,711.43

Legal representative: Accounting chief: Person-in-charge of the accounting department: Pan Xinjun Zhang Jianhui You Wenjie

– 31 –

• 4.2 Adjustment made to relevant items of the financial statements of the beginning of the year when new standards were implemented due to implementing the New Standards on Financial Instruments, New Standards on Revenue and New Standards on Leases

✓Applicable □ Not Applicable

Consolidated Balance Sheet

Unit: Yuan Currency: RMB

Items	December 31, 2018	January 1, 2019	Adjustment
Assets:
Investment properties		4,700,781.99	4,700,781.99
Right-of-use assets		835,067,081.29	835,067,081.29
Other assets	1,595,289,902.33	1,571,434,554.31	-23,855,348.02
Total assets	226,869,672,192.01	227,685,584,707.27	815,912,515.26
Liabilities:
Lease liabilities		815,942,965.26	815,942,965.26
Other liabilities	933,459,911.25	933,429,461.25	-30,450.00
Total liabilities	174,597,219,851.88	175,413,132,367.14	815,912,515.26
Equity of owners
(or equity of shareholders):
Total liabilities and
equity of owners
(or equity of shareholders)	226,869,672,192.01	227,685,584,707.27	815,912,515.26

Description of adjustment of each item:

✓Applicable □ Not Applicable

According to the requirements of Cai Kuai [2018] No. 35, the Company began to implement the New Standards on Leases on January 1, 2019. On the date of adoption of the New Standards on Leases, the Company made accounting treatments by way of “measuring leased liabilities at the present value discounted using the lessee’s incremental borrowing rate at the date of initial adoption in which the amount was equal to the lease liabilities and necessary adjustments were made based on prepaid lease to measure right-of-use assets”.

– 32 –

Balance Sheet of the Parent Company

Unit: Yuan Currency: RMB

Items	December 31, 2018	January 1, 2019	Adjustment
Assets:
Investment properties		7,993,385.25	7,993,385.25
Right-of-use assets		623,738,871.07	623,738,871.07
Other assets	366,922,127.68	347,086,769.63	-19,835,358.05
Total assets	189,422,637,863.95	190,034,534,762.22	611,896,898.27
Liabilities:
Lease liabilities		611,927,348.27	611,927,348.27
Other liabilities	246,850,501.11	246,820,051.11	-30,450.00
Total liabilities	141,129,697,203.63	141,741,594,101.90	611,896,898.27
Equity of owners
(or equity of shareholders):
Total liabilities and
equity of owners
(or equity of shareholders)	189,422,637,863.95	190,034,534,762.22	611,896,898.27

Description of adjustment of each item:

✓Applicable □ Not Applicable

According to the requirements of Cai Kuai [2018] No. 35, the Company began to implement the New Standards on Leases on January 1, 2019. On the date of adoption of the New Standards on Leases, the Company made accounting treatments by way of “measuring leased liabilities at the present value discounted using the lessee’s incremental borrowing rate at the date of initial adoption in which the amount was equal to the lease liabilities and necessary adjustments were made based on prepaid lease to measure right-of-use assets”.

• 4.3 Description of the first implementation of the New Standards on Financial Instruments and the New Standards on Leases for retrospective adjustment of previous comparison information

□ Applicable ✓Not Applicable

4.4 Audit Report

• Applicable ✓Not Applicable

– 33 –