DFZQ — Regulatory Filings 2021

Feb 5, 2021

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)

ANNOUNCEMENT IN RELATION TO THE PROVISION FOR ASSETS IMPAIRMENT

This announcement is made by 東方證券股份有限公司 (the “ Company ”) pursuant to the Inside Information Provisions (as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”)) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and Rule 13.09 (2) of the Listing Rules.

I. OVERVIEW OF THE PROVISION FOR ASSETS IMPAIRMENT

In accordance with relevant requirements under the China Accounting Standards for Business Enterprises (the “ CASBE ”) and the accounting policy of the Company, to reflect the Company’s financial position as at December 31, 2020 and its operating performance in 2020 in a more true and fair manner, after an assessment on the expected credit loss of the relevant assets of the Company and its subsidiaries, a total of RMB2,591.5785 million was provided for assets impairment in the second half of 2020, accounting for more than 10% of the Company’s audited net profit for the latest financial year. Details are set out below:

Currency: RMB Unit: RMB’0,000

AssetFinancial assets held under resale agreementsAdvance to customersDebt investmentOther debt investmentOthersTotal	Amount providedfor assetsimpairment inthe second halfof 2020245,466.84588.94-26.4913,516.28-387.72259,157.85

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II. DETAILS OF PROVISION FOR ASSETS IMPAIRMENT

(1) Financial assets held under resale agreements

In accordance with relevant requirements under the CASBE and the accounting policy of the Company, as a result of changes in credit standing of the financiers and market value of the collaterals, RMB2,454.6684 million was provided for impairment on financial assets held under resale agreements in the second half of 2020, primarily targeting at share pledges of which repurchases were not conducted or supplemental collateral obligations were not performed as agreed.

(2) Advance to customers

In accordance with relevant requirements under the CASBE and the accounting policy of the Company, RMB5.8894 million was provided for impairment on advance to customers in the second half of 2020.

(3) Debt investment

In accordance with relevant requirements under the CASBE and the accounting policy of the Company, impairment of RMB0.2649 million was reversed on debt investment in the second half of 2020.

(4) Other debt investment

In accordance with relevant requirements under the CASBE and the accounting policy of the Company, as a result of deterioration of the credit rating of the debtors, RMB135.1628 million was provided for impairment on other debt investment in the second half of 2020.

(5) Others

In accordance with relevant requirements under the CASBE and the accounting policy of the Company, other impairment of RMB3.8772 million was reversed in the second half of 2020.

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III. EFFECT ON THE COMPANY OF THE PROVISION FOR ASSETS IMPAIRMENT

The Company provided for total assets impairment of RMB2,591.5785 million in the second half of 2020, leading to a reduction in the total profit for 2020 of RMB2,591.5785 million and in the net profit for 2020 of RMB1,943.6839 million.

Relevant data as set out in the announcement on the preliminary financial data for the year of 2020 published by the Company on February 5, 2021 already includes the provision for assets impairment contained herein.

The financial data as set out in this announcement is preliminary accounting data, which has not been audited by an accounting firm. The specific data should be those to be disclosed in the 2020 annual report of the Company. Investors are advised to pay attention to such investment risks involved.

By order of the Board of Directors JIN Wenzhong Executive Director

Shanghai, PRC February 5, 2021

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 and Mr. XU Jianguo as non-executive Directors; and Mr. XU Zhiming, Mr. JIN Qinglu, Mr. WU Hong, Mr. FENG Xingdong and Mr. HE Xuan as independent non-executive Directors.

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