DFZQ — Interim / Quarterly Report 2020

Oct 29, 2020

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 2020

The board (the “ Board ”) of directors (the “ Directors ”) of 東方證券股份有限公司 (the “ Company ”) hereby announces the unaudited results of the Company and its subsidiaries for the third quarter ended September 30, 2020, 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 Third Quarterly Report for the Year 2020 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 JIN Wenzhong Executive Director

Shanghai, PRC October 29, 2020

As at the date of this announcement, the Board of Directors comprises Mr. JIN Wenzhong as executive Director; Mr. LIU Wei, Mr. WU Junhao, Mr. ZHOU Donghui, Mr. LI Xiang, Ms. XIA Jinghan, Mr. XU Jianguo and Mr. CHEN Xiaobo 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 2020

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CONTENTS

I.	IMPORTANT NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
II.	COMPANY PROFILE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
III.	MATERIAL EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
IV.	APPENDICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

– 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 third quarterly report, for which they will assume joint and several liabilities.

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

• 1.3 The person-in-charge of the Company, Mr. Jin Wenzhong, 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 third 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
	At the end of	At the end of	compared with the end
	this reporting period	the previous year	of the previous year (%)
Total assets	293,689,189,648.42	262,971,441,570.13	11.68
Net assets attributable to
the shareholders of the Company	60,469,303,922.04	53,965,516,313.13	12.05
		From the beginning of
		the previous year to
	From the beginning of	the end of	Increase/decrease
	the year to the end of	the reporting period	as compared with
	this reporting period	of the previous year	the corresponding period
	(January-September)	(January-September)	of the previous year (%)
Net cash flows from operating activities	15,205,891,410.37	12,286,006,071.57	23.77
		From the beginning of
		the previous year to
	From the beginning of	the end of	Increase/decrease
	the year to the end of	the reporting period	as compared with
	this reporting period	of the previous year	the corresponding period
	(January-September)	(January-September)	of the previous year (%)
Operating income	16,051,491,328.23	13,607,480,201.38	17.96
Net profit attributable to the
shareholders of the Company	3,050,882,853.98	1,741,410,722.22	75.20
Net profit attributable to the
shareholders of the Company after
deducting non-recurring profit or
loss	2,961,331,588.43	1,670,962,223.75	77.22
Weighted average returns on			Increased by
net assets (%)	5.53	3.31	2.22 percentage points
Basic earnings per share (RMB/share)	0.43	0.25	72.00
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

		Amounts from
		the beginning of
		the year to the end of
	Amounts for this period	this reporting period
Items	(July – September)	(January – September)	Remarks
Gains or losses from disposals of	-47,294.49	-942,634.01
non-current assets
Government grants recognized in	7,576,535.44	136,306,114.66	Financial subsidies
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	-7,860,128.10	-28,400,254.83	Primarily attributable to
expenses except the items above			donation expenditure
Other gains or losses that meet the	3,732,154.39	12,438,461.58
definition of non-recurring gains or
losses
Effect of income tax	-850,316.81	-29,850,421.85
Total	2,550,950.43	89,551,265.55

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• 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)							157,917
	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	1,026,967,530	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	240,783,406	3.44	–	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
China Post Group Corporation	178,743,236	2.56	–	Nil		–	State-owned
							legal person
Shanghai Construction Group Co., Ltd.	133,523,008	1.91	–	Nil		–	State-owned
							legal person
Shanghai Jinqiao Export Processing Zone	133,140,504	1.90	–	Nil		–	Domestic non-
Development Co., Ltd. (上海金橋							state-owned
出口加工區開發股份有限公司)							legal person
Hong Kong Securities Clearing Company	80,423,678	1.15	–	Nil		–	Foreign legal
Limited							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	1,026,967,530	Overseas listed	1,026,967,530
Nominees Limited		foreign shares
Shanghai Haiyan Investment Management	286,271,333	RMB ordinary	286,271,333
Company Limited		shares
Shanghai United Media Group	240,783,406	RMB ordinary	240,783,406
		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
China Post Group Corporation	178,743,236	RMB ordinary	178,743,236
		shares
Shanghai Construction Group Co., Ltd.	133,523,008	RMB ordinary	133,523,008
		shares
Shanghai Jinqiao Export Processing Zone	133,140,504	RMB ordinary	133,140,504
Development Co., Ltd. (上海金橋出口		shares
加工區開發股份有限公司)
Hong Kong Securities Clearing Company	80,423,678	RMB ordinary	80,423,678
Limited		shares
Related party relationship or parties acting in		N/A
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

			Increase/
Items	September 30, 2020	December 31, 2019	Decrease (%)	Reason
Clearing settlement funds	20,657,218,179.94	13,243,653,713.68	55.98	Mainly due to increase
				in clearing settlement
				funds held on behalf
				of customers
Advance to customers	18,462,672,868.37	13,214,262,240.75	39.72	Increase in scale of
				financing business
Deposits with exchanges and	2,544,838,831.34	1,642,894,348.47	54.90	Increase in derivative
financial institutions				business and deposits
				with exchanges and
				financial institutions
				of subsidiaries
Receivables	4,830,660,051.71	1,019,919,667.42	373.63	Mainly due to increase
				in receivables of
				subsidiaries
Investment properties	41,481,082.44	30,071,334.10	37.94	New property for rent
				during the current
				period
Short-term borrowings	4,219,749,385.00	640,153,529.20	559.18	Mainly due to increase in
				short-term borrowings
				of subsidiaries
Due to banks and other financial	3,107,919,583.34	6,384,658,783.33	-51.32	Decrease in amounts due
institutions				to banks and other
				financial institutions
Derivative financial liabilities	570,966,543.03	2,643,374,802.36	-78.40	Mainly due to decrease
				in scale of commodity
				options
Account payable to brokerage clients	57,598,875,754.85	40,179,178,362.34	43.36	Increase in amount of
				deposits from clients
Taxes payable	399,851,408.71	278,223,978.52	43.72	Mainly due to increase in
				corporate income tax
				payable
Payables	890,789,179.37	480,101,048.74	85.54	Mainly due to increase
				in payables of
				subsidiaries

– 9 –

			Increase/
Items	September 30, 2020	December 31, 2019	Decrease (%)	Reason
Contract liabilities	566,926,550.53	208,113,569.43	172.41	Increase in advance
				receivables of
				subsidiaries
Deferred income tax liabilities	62,593,414.88	19,031,249.53	228.90	Increase in temporary
				differences of tax
				payable
Other equity instruments	5,000,000,000.00	0.00	N/A	Perpetual subordinated
				bonds issued during
				the reporting period
Other comprehensive income	-9,682,089.61	499,960,781.41	-101.94	Mainly due to changes in
				the fair value of other
				equity investment
Non-controlling interests	27,338,716.21	46,120,419.71	-40.72	Due to acquisition
				by the Company
				of non-controlling
				interests of
				subsidiaries
	January-	January-	Increase/
Items	September 2020	September 2019	Decrease (%)	Reason
Net fee and commission income	4,820,248,516.50	3,293,282,682.00	46.37	Increase in fee income
				of the brokerage,
				asset management and
				investment banking
				business
Investment gains	3,476,690,018.30	1,933,436,049.09	79.82	Increase in investment
				gains from securities
				proprietary trading
				business
Foreign exchange gains	134,571,588.19	-28,922,275.08	N/A	Effect of changes in
				foreign exchange rates
Gains from asset disposal	-474,692.45	-159,453.79	N/A	Increase in losses from
				disposal of fixed assets
Business tax and surcharges	69,111,020.99	47,947,584.63	44.14	Increase in expenditures
				such as urban
				construction tax,
				education surcharges
				and others
Business and administrative expenses	5,367,650,495.80	4,086,194,775.13	31.36	Increase in
				revenue-related
				principal operating
				costs

– 10 –

	January-	January-	Increase/
Items	September 2020	September 2019	Decrease (%)	Reason
Credit impairment loss	1,294,743,815.10	932,909,204.82	38.79	Increase in impairment
				provision made for the
				share collateralized
				repurchase business
Non-operating expenses	31,108,696.74	49,629,368.16	-37.32	Decrease in
				compensations
Income tax expenses	489,904,665.45	287,919,897.18	70.15	Increase in taxable profits
Other comprehensive income	-486,553,752.47	486,339,810.85	-200.04	Due to changes in the fair
after tax, net				value of other equity
				investment
Basic earnings per share (RMB/share)	0.43	0.25	72.00	Due to increase in profit

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

✓Applicable □ Not Applicable

3.2.1 The H share employee stock ownership plan (the “ESOP”) of the Company

At the 2020 first extraordinary general meeting of the Company convened on July 13, 2020, the Resolution in Relation to the Employee Stock Ownership Plan (Draft) and its Abstract of 東方證券股份有限公司 and the Resolution in Relation to the Authorization to the Board to Fully Handle Matters Related to the Employee Stock Ownership Plan of the Company (for details, please refer to the relevant announcements disclosed by the Company on July 14, 2020) were considered and approved. The ESOP covered 3,588 participants and raised a total of RMB316,657,000, of which subscription amount of the Directors, supervisors and senior management of the Company accounted for 8.27% of the total amount of the ESOP.

As of the end of the reporting period, the DFZQ ESOP Single Asset Management Scheme No. 1 and DFZQ ESOP Single Asset Management Scheme No. 2 have been approved under the ESOP, a total of 39,419,200 H shares of the Company have been purchased from the secondary market, representing approximately 0.564% of the total share capital of the Company, and the transaction amount totaled RMB177 million.

– 11 –

3.2.2 Changes of the Directors, supervisors and senior management of the Company during the reporting period

3.2.2.1 Changes of Director

Mr. XU Guoxiang, an independent Director, tendered the written resignation report on August 14, 2020 for resigning from the office as an independent Director and a member of each of the Remuneration and Nomination Committee and the Audit Committee of the fourth session of the Board due to expiry of his term as an independent Director.

Given that the resignation of Mr. XU Guoxiang will result in the number of independent Directors falling below one third of the members of the Board, pursuant to the Company Law, the Guidance to Establishment of Independent Director System in Listed Companies (《關於在上市公司建立獨立董事制度的指導意見》), the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Articles of Association of the Company, such resignation shall take effect upon appointment of a new independent Director by the Company to satisfy the requirement that independent directors shall account for at least one third of the members of the board of directors. Prior to that, Mr. XU Guoxiang will continue to perform his duties as an independent Director and a member of each of the Remuneration and Nomination Committee and the Audit Committee under the Board according to the requirements of relevant laws, regulations and the Articles of Association of the Company.

3.2.2.2 Changes of the senior management

The 22nd meeting of the fourth session of the Board was convened on September 10, 2020, at which the Resolution in Relation to Appointment of Vice President of the Company was considered and approved, pursuant to which, Mr. LU Weiming was approved to be appointed as the vice president of the Company, with a term commencing from approval at such Board meeting until the expiry of the current session of the Board.

– 12 –

3.2.3 Capital increase in a subsidiary

In August 2020, the Company increased capital contribution of RMB500 million (equivalent to HK$554,078,015.00 at the rate of exchange between Renminbi and Hong Kong dollars prevailing on the date when such contribution was actually financed) to Orient Finance Holdings (Hong Kong) Limited (“ Orient Finance Holdings ”), a wholly-owned subsidiary of the Company, and has completed change of share capital information with the Companies Registry in Hong Kong. As such, the paid-in capital of Orient Finance Holdings increased from HK$2.2 billion to HK$2,754,078,015.00.

3.2.4 Issuance of perpetual subordinated bonds

Pursuant to the Letter of Reply to Opinions Relating to the Issuance of Perpetual Subordinated Bonds by Orient Securities Company Limited (Ji Gou Bu Han [2020] No. 1577) (《關於東方證券股份有限公司發行永續次級債券有關意見的覆函》 ( 機構 部函 [2020]1577 號 )) of the Securities and Fund Institution Supervision Department of the China Securities Regulatory Commission, the Securities and Fund Institution Supervision Department of the China Securities Regulatory Commission had no objection to the public issuance of perpetual subordinated bonds by the Company.

The Company completed the 2020 public issuance of perpetual subordinated bonds (first tranche) (the “ Bonds ”) on August 26, 2020. The Bonds were issued through offline price inquiry and placement to professional investors and the final issuance size was RMB5 billion at a coupon rate of 4.75% and for a term of 5 years.

• 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 Jin Wenzhong Date October 29, 2020

– 13 –

IV. APPENDICES

4.1 Financial Statements

Consolidated Balance Sheet

September 30, 2020

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items	September 30, 2020	December 31, 2019
Assets:
Cash and bank balances	62,191,464,918.64	48,940,833,855.08
Of which: Deposits held on behalf of customers	40,297,072,895.52	29,749,885,413.76
Clearing settlement funds	20,657,218,179.94	13,243,653,713.68
Of which: Settlement funds held on behalf of customers	17,305,542,647.36	10,832,489,059.97
Precious metal
Placements to banks and other financial institutions
Advance to customers	18,462,672,868.37	13,214,262,240.75
Derivative financial assets	681,184,459.81	609,102,138.41
Deposits with exchanges and financial institutions	2,544,838,831.34	1,642,894,348.47
Receivables	4,830,660,051.71	1,019,919,667.42
Receivables financing
Contract assets
Financial assets acquired under resale agreements	18,133,740,801.25	24,206,541,982.29
Assets classified as held for sale
Financial investment:
Transactional financial assets	73,436,305,738.85	66,901,093,485.91
Debt investment	6,237,632,820.26	7,193,554,228.81
Other debt investment	64,583,588,434.37	64,895,563,425.25
Other equity instruments investment	10,622,258,780.28	10,832,873,153.66
Long-term equity investments	5,403,425,172.40	4,453,754,152.13
Investment properties	41,481,082.44	30,071,334.10
Fixed assets	1,994,271,411.66	2,040,273,431.66
Construction in progress	39,913,518.84	50,034,280.51
Right-of-use assets	892,160,576.77	1,002,749,135.63
Intangible assets	174,429,881.30	168,519,080.82
Goodwill	32,135,375.10	32,135,375.10
Deferred income tax assets	755,845,985.55	760,993,782.62
Other assets	1,973,960,759.54	1,732,618,757.83
Total assets	293,689,189,648.42	262,971,441,570.13

– 14 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items	September 30, 2020	December 31, 2019
Liabilities:
Short-term borrowings	4,219,749,385.00	640,153,529.20
Short-term financial bills payable	17,917,339,903.17	16,113,199,559.50
Due to banks and other financial institutions	3,107,919,583.34	6,384,658,783.33
Transactional financial liabilities	13,220,782,817.67	12,630,960,595.06
Derivative financial liabilities	570,966,543.03	2,643,374,802.36
Financial assets sold under repurchase agreements	59,713,970,785.01	57,478,062,865.93
Account payable to brokerage clients	57,598,875,754.85	40,179,178,362.34
Funds payable to securities issuers	82,877,450.00	80,000,000.00
Accrued staff costs	1,896,809,512.61	1,601,085,895.75
Taxes payable	399,851,408.71	278,223,978.52
Payables	890,789,179.37	480,101,048.74
Contract liabilities	566,926,550.53	208,113,569.43
Held-for-sale liabilities
Provision
Long-term borrowings
Bonds payable	70,557,258,719.64	67,309,198,769.40
Of which: Preferred shares
Perpetual debts
Lease liabilities	899,087,208.10	995,005,231.20
Deferred income
Deferred income tax liabilities	62,593,414.88	19,031,249.53
Other liabilities	1,486,748,794.26	1,919,456,597.00
Total liabilities	233,192,547,010.17	208,959,804,837.29

– 15 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

September 30, 2020 December 31, 2019 Equity of owners (or equity of shareholders): Share capital 6,993,655,803.00 6,993,655,803.00 Other equity instruments 5,000,000,000.00 Of which: Preferred shares Perpetual debts 5,000,000,000.00 Capital reserve 28,266,858,030.08 28,254,929,991.63 Less: Treasury shares Other comprehensive income -9,682,089.61 499,960,781.41 Surplus reserve 3,445,689,429.69 3,445,689,429.69 General risk reserve 8,138,409,281.51 7,997,676,253.44 Undistributed profits 8,634,373,467.37 6,773,604,053.96 Total equity attributable to the owners (or shareholders) of the parent company 60,469,303,922.04 53,965,516,313.13 Non-controlling interests 27,338,716.21 46,120,419.71 Total equity of owners (or equity of shareholders) 60,496,642,638.25 54,011,636,732.84 Total liabilities and equity of owners (or equity of shareholders) 293,689,189,648.42 262,971,441,570.13 Person-in-charge of Legal representative: Accounting chief: the accounting department: Jin Wenzhong Zhang Jianhui You Wenjie

Items

Equity of owners (or equity of shareholders):

– 16 –

Balance Sheet of the Parent Company September 30, 2020

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: Transactional financial assets Debt investment Other debt investment Other equity instruments investment 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, 2020 December 31, 2019 33,032,742,639.22 27,584,528,645.46 19,055,855,930.41 15,328,726,447.66 7,371,749,176.65 5,964,640,336.28 4,096,422,276.94 3,624,212,744.79 18,202,983,081.16 12,924,954,996.12 674,451,610.25 575,515,312.04 1,360,298,760.08 1,039,478,872.81 455,011,761.61 515,023,059.52 17,816,412,453.20 23,189,665,726.78 52,979,426,438.24 45,611,235,174.41 6,237,632,820.26 7,193,554,228.81 64,583,588,434.37 64,895,563,425.25 10,586,406,405.71 10,796,863,763.79 18,041,494,692.46 16,052,295,287.16 42,167,902.17 31,207,205.57 1,955,410,707.33 2,003,468,158.30 28,972,270.19 32,053,112.19 534,964,548.54 600,692,065.06 132,218,681.05 133,358,159.27 18,947,605.48 18,947,605.48 504,957,249.72 483,544,028.25 382,454,821.97 248,445,432.89 234,942,292,059.66 219,895,034,595.44

– 17 –

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 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 liabilities 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, 2020 December 31, 2019 17,916,507,711.39 14,988,990,739.57 3,107,919,583.34 6,384,658,783.33 10,848,341,501.00 11,190,368,847.52 565,142,955.51 2,618,097,637.41 55,513,005,059.67 51,950,254,756.90 23,115,895,886.01 18,598,949,938.01 686,007,698.88 516,763,731.76 54,543,955.17 85,429,345.37 62,023,558.18 109,310,735.36 65,158,485,471.31 62,122,472,455.10 528,234,177.42 591,193,431.56 822,534,632.90 151,648,228.15 178,378,642,190.78 169,308,138,630.04

– 18 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

ms 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, 2020 December 31, 2019 6,993,655,803.00 6,993,655,803.00 4,996,458,767.21 4,996,458,767.21 28,157,008,370.79 28,157,008,370.79 99,777,060.05 556,061,852.46 3,445,689,429.69 3,445,689,429.69 6,667,924,209.17 6,667,921,526.55 6,203,136,228.97 4,766,558,982.91 56,563,649,868.88 50,586,895,965.40 234,942,292,059.66 219,895,034,595.44

Items

Equity of owners (or equity of shareholders):

(or equity of shareholders)

Legal representative: Jin Wenzhong

Accounting chief: Zhang Jianhui

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

– 19 –

Consolidated Income Statement

January – September 2020

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items I.	Total operating income	Third quarter of 2020 (July – September) 6,426,198,024.31	Third quarter of 2019 (July – September) 5,528,576,562.25	First three quarters of 2020 (January – September) 16,051,491,328.23	First three quarters of 2019 (January – September) 13,607,480,201.38
	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 business Net fee income from asset management business Investment gains (“-” indicating losses)	260,397,285.78 1,450,501,386.45 1,190,104,100.67 2,002,998,192.58 782,437,577.90 454,306,157.92 662,626,739.96 1,531,761,229.10	261,799,338.33 1,573,070,691.52 1,311,271,353.19 1,083,754,312.50 377,564,688.22 189,429,364.84 500,835,439.33 723,104,655.14	597,005,526.61 4,168,788,344.44 3,571,782,817.83 4,820,248,516.50 1,868,268,488.88 1,007,474,502.31 1,776,325,028.42 3,476,690,018.30	780,706,872.25 4,652,886,909.26 3,872,180,037.01 3,293,282,682.00 1,155,332,538.02 718,124,566.19 1,334,619,024.59 1,933,436,049.09
	Of which: G ains from investments in associates and joint
	ventures In come generated from the derecognition of financial assets measured at amortized cost (“-” indicating losses) Net open hedge income (“-” indicating losses)	285,779,684.73	86,598,701.54	728,591,530.37	415,887,654.55
	Other income Gains from changes in fair value (“-” indicating losses) Foreign exchange gains (“-” indicating losses)	941,757.65 140,052,000.27 56,503,960.09	200,082.66 297,533,507.82 -29,682,528.82	16,973,636.04 1,155,641,268.34 134,571,588.19	200,082.66 1,054,307,774.97 -28,922,275.08
II.	Other business income Gains from asset disposal (“-” indicating losses) Total operating expenses	2,433,943,511.89 -399,913.05 4,667,088,451.28	3,191,889,926.56 -22,731.94 4,963,945,223.51	5,850,835,466.70 -474,692.45 12,615,321,810.03	6,574,628,469.28 -159,453.79 11,628,090,478.71
	Business tax and surcharges Business and administrative expenses Credit impairment loss	24,631,397.33 2,179,204,683.45 4,634,073.97	15,003,594.70 1,282,353,428.21 462,161,395.91	69,111,020.99 5,367,650,495.80 1,294,743,815.10	47,947,584.63 4,086,194,775.13 932,909,204.82
	Other asset impairment loss Other business cost	2,458,618,296.53	3,204,426,804.69	5,883,816,478.14	6,561,038,914.13

– 20 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items III.	Operating profit (“-” indicating loss)	Third quarter of 2020 (July – September) Third quarter of 2019 (July – September) First three quarters of 2020 (January – September) 1,759,109,573.03 564,631,338.74 3,436,169,518.20	First three quarters of 2019 (January – September) 1,979,389,722.67
	Add: Non-operating income	11,162,030.93 2,837,325.47 134,011,440.55	143,720,153.25
	Less: Non-operating expenses	8,302,608.29 3,237,909.37 31,108,696.74	49,629,368.16
IV.	Total profit (“-” indicating total loss)	1,761,968,995.67 564,230,754.84 3,539,072,262.01	2,073,480,507.76
V.	Less: Income tax expenses Net profit (“-” indicating net loss)	237,672,107.57 32,614,111.02 489,904,665.45 1,524,296,888.10 531,616,643.82 3,049,167,596.56	287,919,897.18 1,785,560,610.58
	(i) Classified based on continuing operation 1. Net profit from continuing operation
	(“-” indicating net loss) 2. Net profit from discontinued operation	1,524,296,888.10 531,616,643.82 3,049,167,596.56	1,785,560,610.58
	(“-” 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	1,524,859,069.80 531,794,815.98 3,050,882,853.98	1,741,410,722.22
VI.	interests (“-” indicating net loss) Other comprehensive income after tax, net	-562,181.70 -178,172.16 -1,715,257.42 -490,380,185.28 63,029,798.31 -486,553,752.47	44,149,888.36 486,339,810.85
	Ot her comprehensive income attributable to the owners
	of the parent company after tax, net	-490,380,185.28 63,029,798.31 -486,553,752.47	486,339,810.85
	(i) Other comprehensive income that cannot be reclassified
	to profit or loss	-68,236,204.50 -183,380,946.45 -118,567,716.82	112,434,939.02
	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 4. Changes in the fair value of the Company’s own credit risk	-68,236,204.50 -183,380,946.45 -118,567,716.82	112,434,939.02

– 21 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items	(ii)	Other comprehensive income that will be reclassified to	Third quarter of 2020 (July – September) Third quarter of 2019 (July – September) First three quarters of 2020 (January – September)	First three quarters of 2019 (January – September)
		profit and loss	-422,143,980.78 246,410,744.76 -367,986,035.65	373,904,871.83
		1. Other comprehensive income that can be
		transferred to profit or loss under the equity
		method 2. Changes in fair value of other debt investments	4,958,085.19 -8,086,161.77 -1,635,660.83 -362,096,843.46 230,612,918.91 -323,158,735.34	-8,953,041.23 354,663,099.38
		3. The amount of financial assets reclassified into
		other comprehensive income
		4. Credit impairment provisions of other debt
		investment 5. Cash flow hedge reserve	317,265.52 345,788.69 9,826,813.72	4,546,205.28
		6. Exchange differences from translation of financial
		statements denominated in foreign currencies	-65,322,488.03 23,538,198.93 -53,018,453.20	23,648,608.40
		7. Others
	Other comprehensive income after tax attributable to
		non-controlling interests, net
VII.	Total comprehensive income		1,033,916,702.82 594,646,442.13 2,562,613,844.09	2,271,900,421.43
	Total comprehensive income attributable to owners of the
		parent company	1,034,478,884.52 594,824,614.29 2,564,329,101.51	2,227,750,533.07
	Total comprehensive income attributable to non-controlling
VIII.	interests Earnings per share:		-562,181.70 -178,172.16 -1,715,257.42	44,149,888.36
	(i)	Basic (RMB/share)	0.21 0.08 0.43	0.25
	(ii)	Diluted (RMB/share)	N/A N/A N/A	N/A

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

– 22 –

Income Statement of the Parent Company January – September 2020

Prepared by: ORIENT SECURITIES COMPANY LIMITED

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items I.	Total operating income	Third quarter of 2020 (July – September) 2,300,412,270.04	Third quarter of 2019 (July – September) 1,745,126,375.15	First three quarters of 2020 (January – September) 6,746,906,857.00	First three quarters of 2019 (January – September) 4,587,752,163.64
	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 business Net fee income from asset management business Investment gains (“-” indicating losses)	222,011,848.40 1,331,175,431.60 1,109,163,583.20 817,698,484.25 659,518,991.14 170,901,995.86 1,358,877,658.01	245,726,347.24 1,446,159,945.45 1,200,433,598.21 377,154,209.08 301,964,158.24 87,194,057.38 722,509,534.02	548,663,538.09 3,839,889,616.02 3,291,226,077.93 1,914,071,185.70 1,536,030,487.12 435,060,886.79 3,645,830,081.47	746,612,818.17 4,302,423,339.21 3,555,810,521.04 1,212,964,765.28 957,485,210.00 270,448,970.54 1,449,220,213.81
	Of which: G ains from investments in associates and joint ventures In come generated from the derecognition of	238,245,453.56	117,146,639.27	467,501,970.10	307,333,647.83
	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)	827,192.79 -152,719,982.83 52,387,300.91	394,077,168.39 3,724,285.42	12,211,533.52 542,834,828.32 79,048,976.79	1,164,354,230.53 4,088,820.51
II.	Other business income Gains from asset disposal (“-” indicating losses) Total operating expenses	1,729,570.00 -399,801.49 1,252,873,192.49	1,957,562.94 -22,731.94 1,159,885,939.61	4,722,680.19 -475,967.08 4,155,282,311.08	10,670,769.13 -159,453.79 3,132,145,879.28
	Business tax and surcharges Business and administrative expenses Credit impairment loss	17,327,816.34 1,235,115,518.01 -160,686.25	10,772,528.02 686,197,357.85 461,069,625.40	51,345,821.95 2,812,869,966.06 1,288,322,978.77	36,309,994.60 2,163,813,962.96 926,332,061.30
	Other asset impairment loss Other business cost	590,544.39	1,846,428.34	2,743,544.30	5,689,860.42

– 23 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items III.	Operating profit (“-” indicating loss)	Operating profit (“-” indicating loss)	Third quarter of 2020 (July – September) Third quarter of 2019 (July – September) First three quarters of 2020 (January – September) 1,047,539,077.55 585,240,435.54 2,591,624,545.92	First three quarters of 2019 (January – September) 1,455,606,284.36
	Add:	Non-operating income	44,733.68 272,416.87 36,914,077.64	30,966,133.14
	Less:	Non-operating expenses	5,611,294.94 1,736,686.83 20,064,223.91	43,504,476.87
IV.	Total profit (“-” indicating total loss)		1,041,972,516.29 583,776,165.58 2,608,474,399.65	1,443,067,940.63
	Less:	Income tax expenses	101,258,491.54 -45,136,132.37 122,514,058.48	-72,663,597.54
V.	Net profit (“-” indicating net loss)		940,714,024.75 628,912,297.95 2,485,960,341.17	1,515,731,538.17
	(i)	Net profit from continuing operation
		(“-” indicating net loss)	940,714,024.75 628,912,297.95 2,485,960,341.17	1,515,731,538.17
	(ii)	Net profit from discontinued operation
		(“-” indicating net loss)
VI.	Other comprehensive income after tax, net		-433,496,872.14 71,922,456.88 -433,195,673.86	492,550,441.60
	(i)	Other comprehensive income that cannot be reclassified
		to profit or loss	-68,148,994.50 -161,271,136.25 -118,449,955.35	130,767,039.67
		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 4. Changes in the fair value of the Company’s own	-68,148,994.50 -161,271,136.25 -118,449,955.35	130,767,039.67
		credit risk

– 24 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items	(ii)	Other comprehensive income that will be reclassified to	Third quarter of 2020 (July – September) Third quarter of 2019 (July – September) First three quarters of 2020 (January – September)	First three quarters of 2019 (January – September)
		profit and loss	-365,347,877.64 233,193,593.13 -314,745,718.51	361,783,401.93
		1. Other comprehensive income that can be
		transferred to profit or loss under the equity
		method 2. Changes in fair value of other debt investments	-3,568,299.70 2,234,885.53 -1,413,834.30 -362,096,843.46 230,612,918.91 -323,158,697.93	2,574,097.27 354,663,099.38
		3. The amount of financial assets reclassified into
		other comprehensive income
		4. Credit impairment provisions of other debt
		investment 5. Cash flow hedge reserve	317,265.52 345,788.69 9,826,813.72	4,546,205.28
		6. Exchange differences from translation of financial
		statements denominated in foreign currencies
		7. Others
VII.	Total	comprehensive income	507,217,152.61 700,834,754.83 2,052,764,667.31	2,008,281,979.77
VIII.	Earnings per share:
	(i)	Basic (RMB/share)
	(ii)	Diluted (RMB/share)

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

– 25 –

Consolidated Statement of Cash Flows

January – September 2020

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 Net decrease in financial assets held for transaction purposes Cash received for interests, fees and commissions Net increase in transactional financial liabilities Net increase in amount due to banks and other financial institutions Net increase in funds from repurchase business Net cash received from securities trading agency services Net cash received from securities underwriting agency services Cash received relating to other operating activities Sub-total 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 financial assets acquired under resale agreements Net increase in advances to customers 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 2020 (January – September) First three quarters of 2019 (January – September) 767,894,616.36 8,254,060,575.06 5,902,070,923.77 206,940,555.40 3,130,112,296.28 7,670,156,118.90 16,071,170,305.97 17,641,534,806.14 3,953,467,331.35 2,877,450.00 5,897,790,125.93 8,989,892,381.07 40,441,254,247.79 38,046,713,238.44 7,172,142,839.78 3,276,739,199.99 3,000,000,000.00 5,275,373,715.28 1,304,004,003.01 2,409,848,347.49 2,009,512,179.40 3,151,685,269.72 2,604,881,053.63 875,064,679.27 971,350,768.83 10,246,651,625.67 8,698,816,322.22 25,235,362,837.42 25,760,707,166.87 15,205,891,410.37 12,286,006,071.57

– 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 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

First three quarters of 2020 (January – September) First three quarters of 2019 (January – September) 831,994,938.32 237,976,855.72 2,416,942,906.68 2,707,434,390.49 255,883,534.04 956,553,348.15 283,872,162.63 402,209.89 7,648,821.99 4,461,776,937.08 3,236,932,230.83 622,492,506.90 596,905,000.00 311,936,279.49 181,275,844.89 4,026,176,113.72 3,505,032,571.78 4,361,299,492.49 9,046,898.50 527,066,558.79 4,969,651,798.61 9,171,579,467.95 -507,874,861.53 -5,934,647,237.12

– 27 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items 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 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 Legal representative: Accounting chief: Jin Wenzhong Zhang Jianhui

First three quarters of 2020 (January – September) First three quarters of 2019 (January – September) 5,000,000,000.00 1,222,155,855.80 3,683,652,543.87 64,976,939,476.25 44,347,626,992.15 71,199,095,332.05 48,031,279,536.02 62,915,701,080.28 39,974,734,464.33 3,261,027,087.30 3,255,457,857.18 37,279,381.26 14,169,890.57 263,697,173.39 104,563,061.10 66,440,425,340.97 43,334,755,382.61 4,758,669,991.08 4,696,524,153.41 76,704,951.19 -24,377,355.06 19,533,391,491.11 11,023,505,632.80 61,940,172,286.80 46,079,670,480.45 81,473,563,777.91 57,103,176,113.25 Person-in-charge of the accounting department: You Wenjie

– 28 –

Cash Flow Statement of the Parent Company January – September 2020

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 increase in transactional financial liabilities Net increase in amount due to banks and other financial institutions Net increase in funds from repurchase business Net cash received from securities trading agency services Cash received relating to other operating activities Sub-total 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 decrease in transactional financial liabilities Net increase in financial assets acquired under resale agreements 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 2020 (January – September) First three quarters of 2019 (January – September) 4,133,320,941.92 3,298,648,861.42 2,885,463,802.42 8,208,825,237.32 15,950,515,650.33 4,711,603,246.11 5,344,941,213.47 658,217,893.79 384,016,225.33 17,711,967,319.14 27,863,585,752.97 1,111,032,032.14 6,978,712,248.49 3,276,739,199.99 3,000,000,000.00 5,299,719,831.77 1,387,361,947.93 438,424,406.58 1,638,174,583.88 1,682,835,293.70 1,776,744,990.65 1,393,255,176.45 344,596,623.19 341,277,028.25 1,149,440,679.06 594,141,872.24 15,034,872,347.26 15,377,583,567.06 2,677,094,971.88 12,486,002,185.91

– 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 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

First three quarters of 2020 (January – September) First three quarters of 2019 (January – September) 264,399,160.03 2,814,150,553.86 3,158,201,492.28 255,883,534.04 956,553,348.15 445,592.38 4,974,345.64 4,291,432,188.46 3,163,175,837.92 1,787,510,429.53 1,088,902,588.24 236,424,789.39 123,630,294.07 4,026,689,861.72 3,506,032,571.78 4,361,299,492.49 9,046,898.50 549,082,358.64 16,127,837.37 6,059,671,979.14 9,645,075,142.59 -1,768,239,790.68 -6,481,899,304.67

– 30 –

Unit: Yuan Currency: RMB Type of audit: Unaudited

Items 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 IV. Effect of foreign exchange rate changes on cash and cash equivalents V. Net increase in cash and cash equivalents Add: B alance of cash and cash equivalents at the beginning of the period VI. Balance of cash and cash equivalents at the end of the period Legal representative: Accounting chief: Jin Wenzhong Zhang Jianhui

First three quarters of 2020 (January – September) First three quarters of 2019 (January – September) 5,000,000,000.00 584,400,000.00 2,557,751,448.67 64,919,047,978.83 43,251,997,424.15 70,503,447,978.83 45,809,748,872.82 61,731,492,260.35 37,439,212,901.60 3,195,608,770.10 3,198,472,878.05 165,152,522.86 47,141,005.16 65,092,253,553.31 40,684,826,784.81 5,411,194,425.52 5,124,922,088.01 24,693,181.99 1,338,820.51 6,344,742,788.71 11,130,363,789.76 33,351,673,065.35 21,747,700,505.58 39,696,415,854.06 32,878,064,295.34 Person-in-charge of the accounting department: You Wenjie

• 4.2 Adjustment made to the financial statements of the beginning of the year due to implementing the New Standards on Revenue and New Standards on Leases for the first time since 2020

□ Applicable ✓Not Applicable

• 4.3 Description of the implementation of the New Standards on Revenue and the New Standards on Leases for the first time since 2020 for retrospective adjustment of previous comparison information

□ Applicable ✓Not Applicable

4.4 Audit Report

• Applicable ✓Not Applicable

– 31 –