Huatai Securities Co., Ltd. - Proxy Solicitation & Information Statement 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered securities dealer, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your Shares in the Company , you should at once hand this circular together with the accompanying form of proxy and reply slip to the purchaser(s) or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was affected for transmission to the purchaser(s) or the transferee(s).

This circular is for information purposes only and is being provided to you solely for the purpose of considering the resolutions to be voted upon at the EGM and the H Shareholders Class Meeting of the Company to be held on Monday, October 22, 2018. This circular does not constitute an offer to issue or sell or the invitation of an offer to acquire, purchase or subscribe for securities in the United States or any other jurisdiction, nor is it intended to invite any such offer or invitation. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The securities described herein have not been and will not be registered under the U.S. Securities Act.

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(A joint stock company incorporated in the People’s Republic of China with limited liability under the Chinese corporate name 華泰證券股份有限公司 and carrying on business in Hong Kong as HTSC) (Stock Code: 6886)

2018 INTERIM PROFIT DISTRIBUTION PLAN ELECTION OF NON-EXECUTIVE DIRECTORS AND EXECUTIVE DIRECTORS

ELECTION OF SHAREHOLDER SUPERVISORS PROPOSED OVERSEAS LISTING OF ASSETMARK AMENDMENT TO THE ARTICLES OF ASSOCIATION

AND

NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

A notice convening the EGM and the H Shareholders Class Meeting of the Company to be held at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Monday, October 22, 2018 at 2:00 p.m. is set out on pages 20 to 27 of this circular.

If you are not able to attend the EGM and/or the H Shareholders Class Meeting, please complete and return the form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time appointed for the holding of the EGM and the H Shareholders Class Meeting and deposit it together with the notarized power of attorney or other documents of authorization with the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited (for holders of H Share). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM and/or the H Shareholders Class Meeting in person should you so desire.

Shareholders intending to attend the EGM and/or the H Shareholders Class Meeting in person or by their proxies should complete and return the reply slip for attending the EGM and the H Shareholders Class Meeting to the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited (for holders of H Share) on or before Tuesday, October 2, 2018.

September 14, 2018

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING . . . . . . . . . . .	20
NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING . . . . . . . . . . . . .	24
APPENDIX I — BIOGRAPHIES OF CANDIDATES FOR DIRECTORS . . . . . . . . . . .	28
APPENDIX II — BIOGRAPHIES OF CANDIDATES FOR SHAREHOLDER
SUPERVISORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“Articles of Association”

the articles of association of the Company, as amended from time to time

“AssetMark”

AssetMark Financial Holdings, Inc. or the parent company holding 100% of its shares (unless otherwise specified, hereinafter individually or collectively referred to as “AssetMark”, as the case may be)

“AssetMark Overseas Listing”

the proposed listing of AssetMark in the United States

“A Shareholders Class Meeting”
the 2018 first A shareholders class meeting to be held by our Company at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Monday, October 22, 2018 at 2:00 p.m. (or immediately after the end of the 2018 first extraordinary general meeting or an adjournment thereof)
“A Share(s)”
domestic share(s) in the share capital of the Company with nominal value of RMB1.00 each, which are listed on the Shanghai Stock Exchange and to be subscribed for and traded in RMB
“Board” or “Board of Directors”

the board of Directors of the Company

“China” or “PRC”
the People’s Republic of China, excluding, for the purpose of this circular, Hong Kong, Macau Special Administrative Region and Taiwan
“our Company”, “Company”, “Parent Company”, “HTSC” or “Huatai Securities”

a joint stock company incorporated in the PRC with limited liability under the corporate name 華泰證券股份有限公司 (Huatai Securities Co., Ltd.), converted from our predecessor 華泰證券有限責任公司 (Huatai Securities Limited Liability Company) on December 7, 2007, carrying on business in Hong Kong as “HTSC”, and was registered as a registered non-Hong Kong company under Part 16 of the Companies Ordinance under the Chinese approved name of “華泰六八八六股份有限公司” and English name of “Huatai Securities Co., Ltd.”; the H Shares of which have been listed on the main board of the Hong Kong Stock Exchange since June 1, 2015 (Stock Code: 6886); the A Shares of which have been listed on the Shanghai Stock Exchange since February 26, 2010 (Stock Code: 601688), unless the context otherwise requires, including its predecessor

“CSRC”

the China Securities Regulatory Commission (中國證券監督管理委員會)

“Director(s)”

director(s) of the Company

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DEFINITIONS

“EGM” the 2018 first extraordinary general meeting of the Company to be held at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Monday, October 22, 2018 at 2:00 p.m. “Group, Our Group, we or us” the Company and its subsidiaries, and their respective predecessors

“Hong Kong” the Hong Kong Special Administrative Region of the PRC “Hong Kong Stock Exchange” The Stock Exchange of Hong Kong Limited (香港聯合交易所有限公司)
“H Shareholders Class Meeting”
the 2018 First H Shareholders Class Meeting to be held by the Company at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Monday, October 22, 2018 at 2:00 p.m. (or immediately after the end of the 2018 First EGM and the 2018 First A Shareholders Class Meeting or an adjournment thereof)
“H Share(s)”
foreign share(s) in the share capital of the Company with nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange and to be subscribed for and traded in HK dollars
“Jiangsu SASAC”

State-owned Assets Supervision and Administration Commission of Jiangsu Provincial Government (江蘇省人民政府國有資產監督管理委員會)

“Latest Practicable Date”
September 12, 2018, being the latest practicable date for the purpose of ascertaining certain information contained in this circular prior to its publication
“Listing Rules” or “Hong Kong Listing Rules”

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

“QDII”

qualified domestic institutional investor

“RMB” or “Renminbi”
Renminbi, the lawful currency of the PRC
“Securities and Futures Ordinance” or “SFO”

the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time

“Share(s)”

the ordinary share(s) in the capital of the Company with nominal value of RMB1.00 each, including A Share(s) and H Share(s)

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	DEFINITIONS
“Shareholder(s)”	the holder(s) of the Share(s)
“Supervisor(s)”	supervisor(s) of the Company
“Supervisory Committee”	the supervisory committee of the Company
“United States”	the United States of America

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LETTER FROM THE BOARD

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Executive Director:

Mr. Zhou Yi (Chairman, President)

Non-executive Directors:

Ms. Pu Baoying Mr. Chen Ning Mr. Gao Xu Mr. Xu Feng Mr. Xu Qing Mr. Zhou Yong

Registered office:

No. 228 Middle Jiangdong Road, Nanjing, Jiangsu Province, the PRC

Principal place of business in Hong Kong: 4201, 42/F, The Centre, 99 Queen’s Road Central, Hong Kong

Independent Non-executive Directors:

Mr. Chen Chuanming Mr. Liu Hongzhong Mr. Lee Chi Ming Ms. Liu Yan Mr. Chen Zhibin

September 14, 2018

To the Shareholders

Dear Sirs and Madams,

Introduction

Reference is made to the announcement dated August 30, 2018 in relation to the proposed overseas listing of AssetMark, and the announcement in relation to the proposed amendment to the Articles of Association, the proposed change of Directors and the proposed change of Shareholder Supervisors.

The purpose of this circular is to provide you, as holders of H Shares, with the notice of EGM and H Shareholders Class Meeting (set out on pages 20 to 27 of this circular) and provide you with information reasonably necessary to enable you to make informed decisions on whether to vote for or against the proposed resolutions at the EGM and H Shareholders Class Meeting.

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LETTER FROM THE BOARD

At the EGM, the following ordinary resolutions will be proposed to approve:

Proposal in relation to 2018 interim profit distribution plan (“ 2018 Interim Profit Distribution Plan ”)
Proposals in relation to election of non-executive Directors and executive Directors:
(1) Proposal in relation to election of Mr. Ding Feng as a non-executive Director of the fourth session of the Board
(2) Proposal in relation to election of Mr. Chen Yongbing as a non-executive Director of the fourth session of the Board
(3) Proposal in relation to election of Ms. Hu Xiao as a non-executive Director of the fourth session of the Board
(4) Proposal in relation to election of Ms. Fan Chunyan as a non-executive Director of the fourth session of the Board
(5) Proposal in relation to election of Mr. Zhu Xuebo as an executive Director of the fourth session of the Board
Proposals in relation to election of Shareholder Supervisors:
(1) Proposal in relation to election of Mr. Chen Ning as a Shareholder Supervisor of the fourth session of the Supervisory Committee
(2) Proposal in relation to election of Ms. Yu Lanying as a Shareholder Supervisor of the fourth session of the Supervisory Committee
(3) Proposal in relation to election of Ms. Yang Yaling as a Shareholder Supervisor of the fourth session of the Supervisory Committee
Proposal in relation to the plan of the AssetMark Overseas Listing
Proposal in relation to the compliance of the AssetMark Overseas Listing with the Notice on Issues in Relation to Regulating Overseas Listing of Subsidiaries of Domestic Listed Companies
Proposal in relation to the undertaking of maintaining independent listing status of the Company

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LETTER FROM THE BOARD

Proposal in relation to the description of the sustainable profitability and prospects of the Company
Proposal regarding authorizing the Board and its authorized party(ies) in dealing with matters regarding the AssetMark Overseas Listing

At the EGM, the following special resolutions will be proposed to approve:

Proposal regarding the provision of assured entitlement only to H Shareholders for the AssetMark Overseas Listing
Proposal in relation to the amendment to the Articles of Association

The resolution numbered 9 above is subject to approval by way of special resolution at the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting of the Company.

Ordinary Resolutions:

1. Proposal in Relation to 2018 Interim Profit Distribution Plan

According to the 2018 interim financial statements of the Company, as of June 30, 2018, the undistributed profit of the Company was RMB16,418,500,270.46. In the 2018 interim period, after deduction of 10% statutory surplus reserve, 10% general risk reserve and 10% trading risk reserve totaling RMB963,082,554.28 in accordance with relevant regulations of the Company Law, the Securities Law, the Financial Rules for Financial Enterprises (金融企業財務規則) and the Articles of Association, the profit available for distribution in the 2018 interim period was RMB15,455,417,716.18.

According to the relevant requirements of the CSRC, gains arising from the fair value changes in distributable profit of securities companies may not be used for cash distribution to shareholders. In the 2018 interim period, the gains arising from the fair value changes in distributable profit of the Company was RMB509,972,315.84. After the required deduction, the accumulated distributable profit of the Company available for distribution to investors in cash in the 2018 interim period was RMB14,945,445,400.34.

The Company has completed the non-public issuance of A Shares. Therefore, after comprehensive consideration of factors such as the interests of shareholders and the development of the Company, it is recommended that the 2018 interim profits be distributed as follows:

(1) The Company will distribute cash dividend of RMB3.00 per 10 shares based on the Company’s total share capital of 8,251,500,000 shares, with the total cash dividend of RMB2,475,450,000.00. The undistributed profit available for distribution to investors of RMB12,469,995,400.34 will be carried forward to the next year.
(2) Cash dividend is denominated and declared in RMB and paid to holders of A shares in RMB and to holders of H shares in HKD. The actual distribution amount in HKD would be calculated at the rate of average basic exchange rate of RMB against HKD issued by the PBOC for the five business days prior to the date of the EGM of the Company.

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LETTER FROM THE BOARD

The Company will make further notice on the record date and the book closure date for such dividend distribution.

The proposal was considered and approved by the Board and the Supervisory Committee on August 30, 2018, and is now submitted to the EGM for consideration and approval. Upon approval at the EGM, the Company will distribute cash dividend to the Shareholders according to the distribution plan within two months from the date of convening the EGM.

2. Proposals in Relation to Election of Non-executive Directors and Executive Directors

Reference is made to the announcement dated Thursday, August 30, 2018 in relation to, among others, the Board’s proposals for the election of Mr. Ding Feng, Mr. Chen Yongbing, Ms. Hu Xiao and Ms. Fan Chunyan as non-executive Directors of the fourth session of the Board and Mr. Zhu Xuebo as an executive Director of the fourth session of the Board, which are hereby submitted to the EGM for consideration and approval.

In August 2018, the Company received the Notice of the Provincial Development and Reform Commission and Provincial SASAC on the Implementation of Relevant Work of the Pilot Scheme of Mixed Ownership Reform for the First Batch of State-owned Enterprises in the Province (Su Fa Gai Jing Gai Fa [2018] No. 736) 《省發展改革委、省國資委關於做好全省第一批國有企業混合所有制改( 革試點有關工作的通知》(蘇發改經改發[2018]736號), and the Company was included in the name list of the First Batch of Mixed Ownership Reform Pilot Enterprises of Jiangsu Province. Meanwhile, the Company received the Approval from the Provincial Development and Reform Commission and Provincial SASAC on the Master Plan of Deepening Mixed Ownership Reform Pilot Scheme by HTSC (Su Fa Gai Jing Gai Fa [2018] No. 735) 《省發展改革委、省國資委關於( <華泰證券股份有限公司深化混合所有制改革試點總體方案>的批復》(蘇發改經改發[2018]735號)). The Company intended to follow the arrangement of the Development and Reform Commission of Jiangsu Province and Jiangsu SASAC, on the basis of the Company’s completion of the Non-public Issuance of new A Shares to introduce strategic investors, and subject to compliance with laws and regulations, it would duly introduce new strategic Shareholder representatives to act as Director, and would construct a Board with diversified composition and complementary advantages in order to better realize the role of the Board and further improve the governance structure of the legal entity.

Based on the above circumstances and work arrangements, on August 30, 2018, Ms. Pu Baoying, Mr. Chen Ning, Mr. Gao Xu, Mr. Xu Feng and Mr. Zhou Yong submitted their resignation reports in writing to the Board, respectively, to resign from the posts of non-executive Directors of the fourth session of the Board and their duties in various special committees of the Board. Among them, Ms. Pu Baoying would resign from her positions as a non-executive Director of the Company and a member of the Compliance and Risk Management Committee. Mr. Chen Ning would resign from his positions as a non-executive Director of the Company and a member of the Audit Committee. Mr. Gao Xu would resign from his positions as a non-executive Director of the Company and a member of the Development Strategy Committee. Mr. Xu Feng would resign from his positions as a non-executive Director of the Company, a member of the Nomination Committee and of the Remuneration and Appraisal Committee. Mr. Zhou Yong would resign from his positions as a non-executive Director of the Company and a member of the Compliance and Risk Management Committee. The above Directors had made undertakings, respectively, that before having obtained approval for new director

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LETTER FROM THE BOARD

qualifications and assuming office formally, they would continue to perform their duties as non-executive Directors of the Company and their duties in various special committees of the Board according to the requirements of laws, administrative regulations, departmental rules and the Articles of Association.

To the best knowledge and belief of the Board after having made all reasonable enquiries, there is no disagreement between the resigning Directors and the Board and there are no other matters in connection with their resignations that need to be brought to the attention of the Shareholders, creditors of the Company or the Hong Kong Stock Exchange. Each of the aforesaid Directors has also confirmed respectively that he or she is not a party involved in any on-going or pending litigation or dispute against the Company.

In accordance with the Rules for Governance of Securities Companies 《證券公司治理準則》( ) and the Articles of Association, Shareholder(s) severally or jointly holding more than 3% of the issued Shares of the Company which carry voting rights may recommend candidates for Directors (non-employee representative Directors) to the Board. Four Shareholders currently holding more than 3% of the Shares of the Company have recommended to the Board a total of four candidates for non-executive Directors of the fourth session of the Board. Mr. Ding Feng was recommended by Jiangsu Guoxin Investment Group Limited to be a non-executive Director of the fourth session of the Board. Mr. Chen Yongbing was recommended by Jiangsu Communications Holding Co., Ltd. to be a non-executive Director of the fourth session of the Board. Ms. Hu Xiao was recommended by Alibaba (China) Technology Co., Ltd. to be a non-executive Director of the fourth session of the Board. Ms. Fan Chunyan was recommended by Suning.Com Co., Ltd. to be a non-executive Director of the fourth session of the Board. Pursuant to the relevant laws and regulations and the relevant requirements of the Articles of Association and the investigation conducted, the Company recommended Mr. Zhu Xuebo to be an executive Director of the fourth session of the Board.

In accordance with the Administrative Measures for Qualifications of Directors, Supervisors and Senior Management of Securities Companies 《證券公司董事、監事和高級管理人員任職資格監管辦( 法》) issued by the CSRC, Mr. Ding Feng, Mr. Chen Yongbing, Ms. Hu Xiao, Ms. Fan Chunyan and Mr. Zhu Xuebo shall obtain approval from the securities regulatory authorities in relation to their qualifications as directors of securities companies before assuming office. Mr. Ding Feng, Mr. Chen Yongbing, Ms. Hu Xiao and Ms. Fan Chunyan, being candidates of non-executive Directors of the fourth session of the Board, and Mr. Zhu Xuebo, being a candidate of executive Director of the fourth session of the Board, will enter into service contracts with the Company, respectively, and perform the duties of Directors of the fourth session of the Board, after their nominations have been passed at the general meeting and the qualifications of being directors of securities companies have been approved by securities regulatory authorities, with the tenure of office expiring at the end of the fourth session of the Board. Pursuant to the Articles of Association, Mr. Ding Feng, Mr. Chen Yongbing, Ms. Hu Xiao, Ms. Fan Chunyan and Mr. Zhu Xuebo will be eligible for re-election after their term of office expires.

The biographies of the above candidates for Directors and further details related to their appointments are set out in Appendix I to this circular.

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LETTER FROM THE BOARD

3. Proposals in Relation to Election of Shareholder Supervisors

Reference is made to the announcement dated Thursday, August 30, 2018 in relation to, among others, the Supervisory Committee’s proposals for the election of Mr. Chen Ning, Ms. Yu Lanying and Ms. Yang Yaling as Shareholder Supervisors of the fourth session of the Supervisory Committee, which are hereby submitted to the EGM for consideration and approval.

Recently, the Company received letters from the Shareholders, namely Jiangsu Guoxin Investment Group Limited, Jiangsu Communications Holding Co., Ltd. and Govtor Capital Group Co., Ltd., respectively, on the change and proposal of Shareholder Supervisor candidates for the Supervisory Committee. According to work requirements, Jiangsu Guoxin Investment Group Limited recommended Mr. Chen Ning to be a Shareholder Supervisor of the fourth session of the Supervisory Committee and he would cease to be a non-executive Director of the fourth session of the Board, and Mr. Wang Huiqing would cease to be a Shareholder Supervisor of the fourth session of the Supervisory Committee. Jiangsu Communications Holding Co., Ltd. recommended Ms. Yu Lanying to be a Shareholder Supervisor of the fourth session of the Supervisory Committee, and Mr. Du Wenyi would cease to be a Shareholder Supervisor of the fourth session of the Supervisory Committee. Govtor Capital Group Co., Ltd. recommended Ms. Yang Yaling to be a Shareholder Supervisor of the fourth session of the Supervisory Committee, and Ms. Liu Zhihong would cease to be a Shareholder Supervisor of the fourth session of the Supervisory Committee. The above intended resigning Supervisors had made undertakings respectively that before new Supervisors obtain approval for appointment qualifications and assume the office of Shareholder Supervisor formally, they would continue to perform their duties as Shareholder Supervisors of the Company according to the requirements of laws, administrative regulations, departmental rules and the Articles of Association.

To the best knowledge and belief of the Supervisory Committee after having made all reasonable enquiries, there is no disagreement between the resigning Supervisors and the Supervisory Committee and there are no other matters in connection with their resignations that need to be brought to the attention of the Shareholders, the creditors of the Company or the Hong Kong Stock Exchange. Each of the aforesaid Supervisors has also confirmed individually that he or she is not a party involved in any on-going or pending litigation or dispute against the Company.

In accordance with the Administrative Measures for Qualifications of Directors, Supervisors and Senior Management of Securities Companies 《證券公司董事、監事和高級管理人員任職資格監管辦( 法》) issued by the CSRC, Mr. Chen Ning, Ms. Yu Lanying and Ms. Yang Yaling shall obtain approval from the securities regulatory authorities in relation to their qualifications as supervisors of securities companies before assuming office. In view of the fact that Mr. Chen Ning has obtained corresponding qualifications, he will enter into a service contract with the Company and replace Mr. Wang Huiqing to perform the duties of a Shareholder Supervisor of the fourth session of the Supervisory Committee, after his nomination for Shareholder Supervisor has been passed at the general meeting of the Company, with the tenure of office expiring at the end of the fourth session of the Supervisory Committee. He will also cease to serve as a non-executive Director of the fourth session of the Board. Ms. Yu Lanying and Ms. Yang Yaling will respectively enter into service contract with the Company, and replace Mr. Du Wenyi and Ms. Liu Zhihong respectively to perform the duties of Shareholder Supervisors of the fourth session of the Supervisory Committee, after their nominations for Shareholder Supervisors have been passed at the general meeting of the Company, and the

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LETTER FROM THE BOARD

qualifications of being supervisors of securities companies have been approved by securities regulatory authorities, with the tenure of office expiring at the end of the fourth session of the Supervisory Committee. Pursuant to the Articles of Association, Mr. Chen Ning, Ms. Yu Lanying and Ms. Yang Yaling will be eligible for re-election after their term of office expires.

The biographies of the above candidates for Shareholder Supervisors and further details related to their appointments are set out in Appendix II to this circular.

4. Proposal in Relation to the Plan of the AssetMark Overseas Listing

Reference is made to the announcement dated Thursday, August 30, 2018 in relation to, among others, the proposal for overseas listing of AssetMark, which is hereby submitted to the EGM for consideration and approval.

(A) Background of AssetMark

AssetMark, founded in 1996, is a leading U.S. turn-key asset management platform (TAMP) headquartered in California. AssetMark, as a third-party financial service institution, provides a range of services and advanced and convenient technology platforms in the wealth management business chain for independent financial advisors, such as investment products or strategies, portfolio management, client relationship management, custodian services and enterprise operations supporting services. In 2016, the Company’s acquisition of AssetMark through Huatai Financial Holdings (Hong Kong) Limited, an overseas subsidiary of the Company, was completed, and AssetMark became an indirect subsidiary of the Company.

As of 30 June 2018, the total assets under management of the AssetMark platform reached US$45.274 billion, representing an increase of approximately 6.8% from the end of 2017.

(B) Proposal of AssetMark Overseas Listing

To further promote the implementation of the Company’s internationalization strategy and enhance the core competitiveness of its overseas business, the Board agreed that the plan for the Spin-off will be:

Issuer: AssetMark Financial Holdings, Inc. or the parent company holding 100% of its shares;
Place of listing: The United States (exchange to be determined);
Size of issuance: The size of the issuance will be determined based on factors such as the rules of the exchange on which it is proposed to be listed and the actual funding needs;
Offering structure: Public offering in the market of the United States;

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LETTER FROM THE BOARD

Pricing of issuance: According to international practice, the issue price will be determined based on the results of roadshows and book building taking into account overseas capital market conditions, the level of the valuation of comparable companies in the industry and market subscription condition at the time of issuance;
Target subscribers: Common shares of AssetMark to be subscribed by institutional investors, natural persons and other investors qualified under the relevant regulations;
Timing of issuance: The timing of the issuance will be determined based on overseas capital market conditions, approval progress and other relevant factors;
Use of proceeds: To enhance the Company’s financial strength and promote business development.

Following the Spin-off, the Company will maintain control over AssetMark, which will remain as a subsidiary of the Company. The plan of AssetMark Overseas Listing is pending approval by the relevant regulatory authorities.

As the highest of the applicable percentage ratios (as defined in the Listing Rules) in respect of the spin-off and overseas listing of AssetMark is expected to be more than 5% and less than 25%, the spin-off and overseas listing of AssetMark, if it proceeds, would constitute a discloseable transaction of the Company under the Listing Rules. Accordingly, the proposed spin-off is not subject to the approval of the Shareholders under paragraph 3(e)(1) of Practice Note 15 (the “ Practice Note 15 ”) and chapter 14 of the Listing Rules.

Shareholders should note that the spin-off and overseas listing of AssetMark will constitute a spin-off within the meaning of Practice Note 15 and will be subject to the approval of the Stock Exchange. In this regard, the Company has submitted a spin-off proposal to the Stock Exchange pursuant to Practice Note 15 and the Stock Exchange has confirmed that the Company may proceed with the proposed spin-off.

As far as the Directors are aware as of the Latest Practicable Date, no Shareholder is considered to have a material interest and has to abstain from voting on this proposal.

5. Proposal in Relation to the Compliance of the AssetMark Overseas Listing with the Notice on Issues in Relation to Regulating Overseas Listing of Subsidiaries of Domestic Listed Companies

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LETTER FROM THE BOARD

The Company, as the controlling shareholder of AssetMark, complies with the following conditions under Article 2 of the Notice on Issues in Relation to Regulating Overseas Listing of Subsidiaries of Domestic Listed Companies (“Notice 67”):

The Company has recorded profits in the latest three consecutive years.
Since 2015, the Company has not used the business and assets in which the Company has invested with proceeds from share issues or fundraisings within the latest three financial years as capital contribution to AssetMark for the purpose of applying for overseas listing.
According to the audited consolidated financial statements of AssetMark for 2017, the net profits of AssetMark which the Company is entitled to according to the equity interests in the above consolidated financial statements did not exceed 50% of the Company’s net profits in its audited consolidated financial statements for 2017.
According to the audited consolidated financial statements of AssetMark for 2017, the net assets of AssetMark which the Company is entitled to according to the equity interests in the above consolidated financial statements did not exceed 30% of the Company’s net assets in its audited consolidated financial statements for 2017.
There is no horizontal competition between the Company and AssetMark and they are independent from each other in assets and finance, and have no overlapping management.
Shares of AssetMark held by the directors, senior management and their connected persons of the Company and its subsidiaries do not exceed 10% of the total share capital of AssetMark prior to the AssetMark Overseas Listing.
The funds or assets of the Company are not in the possession of the individual, legal person or other organization and their related parties which have the actual controlling power over the Company, and there are no major connected transactions that would prejudice the interests of the Company.
The Company has no acts of major violations of laws or regulations in the latest three years.

The parent company holding 100% shares of AssetMark Financial Holdings, Inc. is a holding company only. Shall it act as the issuer for the Spin-off, the Company still complies with the relevant requirements of Notice 67.

In conclusion, the overseas listing of AssetMark, a subsidiary of the Company, complies with the relevant provisions under Notice 67.

6. Proposal in Relation to the Undertaking of Maintaining Independent Listing Status of the Company

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LETTER FROM THE BOARD

The Company and AssetMark are independent from each other in the aspects of staff, asset, finance, institution, business and others. They have independent accounting systems and will independently undertake liabilities and risks.

The overseas listing of AssetMark will have no adverse impact on the sustainable operation of other business segments of the Company, neither will it affect the Company in maintaining its independent listing status, which is in compliance with applicable laws and regulations as well as the requirements prescribed in Notice 67.

7. Proposal in Relation to the Description of the Sustainable Profitability and Prospects of the Company

Each business of the Company has maintained excellent momentum at present. AssetMark maintains a high degree of business independence from the other business segments of the Company, and maintains independence in terms of finance, staff and organization. The Company believes that:

The AssetMark Overseas Listing will have no material impact on the sustainable operation of other business segments of the Company. The Spin-off will facilitate further development and expansion of AssetMark in its local market, optimize its corporate governance and capital structure, continue to expand its industry leading edge, and help enhance the Company’s reputation as a controlling shareholder and the return on investment. In addition, the AssetMark Overseas Listing will facilitate the further consolidation of the core competitiveness of the Company and promote the Company’s sustainable development.

In conclusion, upon the AssetMark Overseas Listing, the Company is able to continue and maintain a more sustainable operation and profitability.

8. Proposal Regarding Authorizing the Board and Its Authorized Party(ies) in Dealing with Matters Regarding the AssetMark Overseas Listing

To ensure the successful proceeding of the Spin-off, the Board agrees that the authorization is proposed to be granted by the Shareholders’ Meeting to the Board and to be delegated from the Board to the President of the Company or its authorized representative(s), in dealing with matters of the Spin-off under the framework and principles of the Spin-off plan to be approved by the Shareholders’ Meeting, at its full discretion, including but not limited to:

To exercise the shareholders’ right over AssetMark on behalf of the Company, to make relevant resolution(s) and decision(s) in relation to the Spin-off (except for matters that are required to be resolved by the Shareholders’ Meeting pursuant to the laws and regulations);

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LETTER FROM THE BOARD

To construct and implement the specific plan of the Spin-off, including but not limited to determining the size of issuance, offering structure and offering timing; and to make necessary and proper adjustment to the relevant matters in relation to the AssetMark Overseas Listing, the plan of AssetMark Overseas Listing and contents thereof based on the changes in laws and regulations, requirements and opinions of relevant regulatory authorities and stock exchanges and the specific market conditions (except for matters that are required to be resolved by the Shareholders’ Meeting pursuant to the laws and regulations);
To submit the relevant applications for the Spin-off to the relevant external regulatory authorities, including the CSRC, Hong Kong Stock Exchange and the U.S. Securities and Exchange Commission, etc. and to deal with related matters;
To revise, sign, deliver, receive, publish and execute all agreements, contracts, undertakings and legal documents of the Company in relation to the Spin-off;
To deal with other necessary matters in connection with the Spin-off.

The abovementioned authorization is valid for 18 months from the date on which the proposal is considered and approved by the Shareholders’ Meeting.

Special Resolutions:

9. Proposal Regarding the Provision of Assured Entitlement Only to H Shareholders for the AssetMark Overseas Listing

As the proposed spin-off and overseas listing of AssetMark, a controlling subsidiary of the Company, constitutes a spin-off within the meaning of Practice Note 15, the following requirement must be complied with.

Pursuant to paragraph 3(f) of Practice Note 15, where a subsidiary of an existing issuer seeks separate listing (the “ Newco ”), the existing issuer is required to have due regard to the interests of its existing shareholders by providing them with an assured entitlement to shares in the Newco, either by way of a distribution in specie of existing shares in Newco or by way of preferred application in any offering of existing or new shares in Newco. Whether such assured entitlement is available to the existing shareholders will be taken into account by the Stock Exchange when considering whether to approve the spin-off proposal.

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LETTER FROM THE BOARD

As advised by the Company’s PRC legal advisor, the Company is restricted to provide the assured entitlement to existing A Shareholders due to the restrictions under PRC laws and regulations. The aforesaid restrictions include:

(1) Pursuant to the Regulation for the Administration of Foreign Exchange of People’s Republic of China (revised in 2008) 《中華人民共和國外匯管理條例》( (2008年修訂)), a domestic institution or a domestic individual that invests directly overseas or deals in the issuance or trading of negotiable securities or derivative products overseas shall handle the registration formalities pursuant to the requirements of the foreign exchange at administrative departments of the State Council. However, in the current practice, except guidelines for QDII, foreign exchange administrative department has not issued any enforceable guidelines on the registration of other domestic institution or individual for the issuance or trading of negotiable securities or derivative products overseas;
(2) Pursuant to the Securities Law of the People’s Republic of China 《中華人民共和國證券( 法》), the issuance of securities to accumulatively more than 200 specific objects within the territory of PRC constitutes a public offering and is subject to the approval of the CSRC. Pursuant to relevant rules promulgated by the CSRC, the issuer that publicly offers its stock shall be a joint stock limited liability company incorporated under the Company Law of People’s Republic of China 《中華人民共和國公司法》( ). Since Huatai has more than 200 A shareholders, providing assured entitlement to A shareholders may lead to a public offering of AssetMark in the PRC. It is not practicable for AssetMark, a company incorporated under the law of Delaware, to obtain such approval; and
(3) Owing to restriction on distribution of profits under the Company Law of the People’s Republic of China（《中華人民共和國公司法》） and the Articles of Association, the Company is unable to provide assured entitlement to A Shareholders through other means, i.e., by way of distribution in specie of shares in AssetMark held by the Company.

Due to the above reasons, the Company is restricted from providing the assured entitlement to the A Shareholders for the spin-off listing of AssetMark, and is only able to provide the assured entitlement to H Shareholders. Upon due and thorough consideration, the Board resolved to put forward a proposal to the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting to consider and approve the provision of the assured entitlement to H Shareholders only in respect of the proposed spin-off.

As advised by the Company’s PRC legal advisor, the provision of the assured entitlement to the H Shareholders only in respect of the proposed listing of AssetMark is deemed as a change in rights of class shareholders under the Articles of Association, and is therefore subject to the approval at the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting of the Company, respectively, by way of a special resolution pursuant to the requirements under the Articles of Association.

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LETTER FROM THE BOARD

Since the Company does not have any controlling shareholder, as far as the Directors are aware as of the Latest Practicable Date, no Shareholder is considered to have a material interest and has to abstain from voting on this proposal.

In the event that this proposal is considered and approved by the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting, the Company shall provide the assured entitlement to the H Shareholders only in respect of the proposed listing of AssetMark. In the event that this proposal is not approved by the Shareholders at any of the EGM, the A Shareholders Class Meeting or the H Shareholders Class Meeting, the Company will not provide assured entitlement to any Shareholders in respect of the proposed listing of AssetMark.

For the avoidance of doubt, regardless of whether this proposal is approved or not by the Shareholders at the Shareholders’ meetings referred to above, the result will not affect the final implementation of the spin-off and proposed listing of AssetMark.

10. Proposal in relation to the amendment to the Articles of Association

Reference is made to the announcement dated Thursday, August 30, 2018 in relation to, among others, the proposal for the amendment to the existing Articles of Association, which is hereby submitted to the EGM for consideration and approval.

Pursuant to the relevant regulations and requirements of Party Building Work for State-owned Enterprises in Jiangsu Province, the PRC and the relevant provisions of laws, regulations and regulatory documents such as the Company Law of the PRC 《中華人民共和國公司法》( ), the Company proposes that the following new article to be added to “Chapter I General Provisions” in the current Articles of Association (the “Proposed Amendment”):

“Article 10 According to the Constitution of the Communist Party of the PRC and relevant provisions, the Company sets up a Chinese Communist Party organization and establishes a work institution of the Party.

The Company sets up a Party Committee to fulfill its duties in accordance with Party regulations such as the Constitution of the Communist Party of the PRC and demonstrate leadership and political guidance by offering direction, overseeing the overall situation and ensuring the implementation of the objectives of the Party. Prior to making decisions on material issues of the Company, the Board shall first seek advice from the Party Committee of the Company.”

The Proposed Amendment adds one new article in total. The contents of the other articles of the Articles of Association shall remain unchanged. The number of articles of the amended Articles of Association increases from 310 to 311, and the numberings of relevant chapters, articles and cross references of the Articles of Association will also be adjusted accordingly.

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LETTER FROM THE BOARD

The Board has made a proposal to the general meeting to authorize the operational management of the Company to complete the matters of filing and approval for the Proposed Amendment. The Proposed Amendment is still required to be approved by Shareholders at the general meeting and subject to the approval by the securities regulatory authority. The Company will send a circular containing the details on the Proposed Amendment to the Shareholders in due course. The amended Articles of Association will be effective after the approval from the securities regulatory authority and completion of the procedures for the change in industrial and commercial registration. Before such approval has been obtained and such registration procedures have been completed, the existing Articles of Association will continue to be effective.

Information on Attending the EGM and the H Shareholders Class Meeting

A notice of the EGM and the H Shareholders Class Meeting of the Company to be held at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the PRC on Monday, October 22, 2018 at 2:00 p.m. is set out on pages 20 to 27 of this circular.

Summary of the important dates for H Shareholders is as follows:

Last Registration Date:	on or before 4:30 p.m. Friday, September 21, 2018
Closure of Register of Members for	Saturday, September 22, 2018 to
H Shareholders:	Monday, October 22, 2018
Submission of Reply Slip:	on or before Tuesday, October 2, 2018
Submission of Proxy Form:	on or before 2:00 p.m. Sunday, October 21, 2018

The register of members of H Shares of the Company will be closed from Saturday, September 22, 2018 to Monday, October 22, 2018 (both days inclusive), during which time no share transfers of H Shares will be effected. Purchasers of shares who have submitted their instruments of share transfer to the H Share Registrar of the Company and registered as shareholders on the H Share register of members of the Company on or before 4:30 p.m. on Friday, September 21, 2018 are entitled to attend and vote in respect of all resolutions to be proposed at the EGM and the H Shareholders Class Meeting.

In order to attend the EGM and/or the H Shareholders Class Meeting, holders of H Shares should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, before 4:30 p.m. on Friday, September 21, 2018.

Reply slip and the proxy form for the EGM and the H Shareholders Class Meeting have been despatched on Friday, September 7, 2018 and have also been published on the website of Hong Kong Stock Exchange (www.hkexnews.hk). Shareholders intending to attend the EGM and/or the H

— 17 —

LETTER FROM THE BOARD

Shareholders Class Meeting in person or by their proxies should complete and return the reply slip for attending the EGM and/or the H Shareholders Class Meeting to the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited (for holders of H Shares) on or before Tuesday, October 2, 2018.

To be valid, for holders of H Shares, the form of proxy and notarized power of attorney or other document of authorization must be delivered to Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 24 hours before the time appointed for the EGM and the H Shareholders Class Meeting. Completion and return of the proxy form will not preclude you from attending and voting at the EGM and/or the H Shareholders Class Meeting in person if you so wish.

For reference purpose only, the record date for determining the eligibility of members of A Shares for attending the EGM and/or the A Shareholders Class Meeting is Friday, October 12, 2018. For more details, please refer to the notices of the EGM and the A Shareholders Class Meeting published on the website of the Shanghai Stock Exchange (http://www.sse.com.cn/) on Friday, September 7, 2018.

Voting Arrangement

According to Rule 13.39(4) of the Listing Rules, any vote of shareholders at an EGM and a H Shareholders Class Meeting must be taken by poll. Accordingly, the chairman of the EGM and the H Shareholders Class Meeting will demand a poll in relation to all the proposed resolutions at the EGM and the H Shareholders Class Meeting in accordance with Article 113 of the Articles of Association of the Company.

Resolutions numbered 1 to 8 are ordinary resolutions to be passed by the affirmative votes representing at least one half of the total number of Shares held by the attending Shareholders having voting rights; resolutions numbered 9 and 10 are special resolutions to be passed by the affirmative votes representing at least two-thirds of the total number of Shares held by the attending Shareholders having voting rights.

Resolutions 2 and 3 shall adopt the method of cumulative poll, i.e., the number of votes carried by each Share held by the Shareholders shall be equal to the number of proposed non-executive Directors or Shareholder Supervisors and the Shareholders may concentrate their entitled votes when voting. In particular: (1) each Shareholder shall be entitled to such number of votes as shall be equal to the number of Shares held by him/her multiplied by the total number of non-executive Directors and executive Directors upon whom he/she can vote, when electing non-executive Directors and executive Directors. Such votes may only be voted for the candidates of the non-executive Directors and executive Directors of the Company, and the candidates who have the most votes shall be appointed; and (2) each Shareholder shall be entitled to such number of votes as shall be equal to the number of Shares held by him/her multiplied by the total number of Shareholder Supervisor upon whom he/she can vote, when electing Shareholder Supervisor. Such votes may only be voted for the candidates of the Shareholder Supervisor of the Company, and the candidates who have the most votes shall be appointed.

— 18 —

LETTER FROM THE BOARD

Pursuant to Rule 2.15 of the Hong Kong Listing Rules, where shareholders’ approval is required with regard to a transaction, any shareholder that has a material interest in such transaction shall abstain from voting on the resolution(s) approving such transaction at the general meeting.

As far as the Directors are aware as of the Latest Practicable Date, no Shareholder is considered to have a material interest in any of the resolutions proposed at the EGM and the H Shareholders Class Meeting and has to abstain from voting at the EGM and the H Shareholders Class Meeting approving the resolutions.

Responsibility Statement

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

Recommendation

The Directors believe that all the resolutions mentioned above are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders vote in favor of the relevant resolutions to be proposed at the EGM and the H Shareholders Class Meeting as set out in the notices of the EGM and the H Shareholders Class Meeting attached to the circular.

Yours faithfully, By order of the Board of the Company Zhou Yi Chairman

— 19 —

NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

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NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2018 first extraordinary general meeting of the Company (the “ EGM ”) will be held at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the People’s Republic of China on Monday, October 22, 2018 at 2:00 p.m. to consider the following issues:

ORDINARY RESOLUTIONS

To consider and approve the 2018 interim profit distribution plan
To consider and approve the resolution on the election of non-executive Directors and executive Directors:
2.1 To consider and approve the resolution on the election of Mr. Ding Feng as a non-executive Director of the fourth session of the Board
2.2 To consider and approve the resolution on the election of Mr. Chen Yongbing as a non-executive Director of the fourth session of the Board
2.3 To consider and approve the resolution on the election of Ms. Hu Xiao as a non-executive Director of the fourth session of the Board
2.4 To consider and approve the resolution on the election of Ms. Fan Chunyan as a non-executive Director of the fourth session of the Board
2.5 To consider and approve the resolution on the election of Mr. Zhu Xuebo as an executive Director of the fourth session of the Board
To consider and approve the resolution on the election of Shareholder Supervisors:
3.1 To consider and approve the resolution on the election of Mr. Chen Ning as a Shareholder Supervisor of the fourth session of the Supervisory Committee
3.2 To consider and approve the resolution on the election of Ms. Yu Lanying as a Shareholder Supervisor of the fourth session of the Supervisory Committee
3.3 To consider and approve the resolution on the election of Ms. Yang Yaling as a Shareholder Supervisor of the fourth session of the Supervisory Committee

— 20 —

NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

To consider and approve the resolution on the plan of the AssetMark Overseas Listing
To consider and approve the resolution on the compliance of the AssetMark Overseas Listing with the Notice on Issues in Relation to Regulating Overseas Listing of Subsidiaries of Domestic Listed Companies
To consider and approve the resolution on the undertaking of maintaining independent listing status of the Company
To consider and approve the resolution on the description of the sustainable profitability and prospects of the Company
To consider and approve the resolution on the authorization granted to the Board and its authorized party(ies) in dealing with matters regarding the AssetMark Overseas Listing

SPECIAL RESOLUTIONS

To consider and approve the resolution on the provision of assured entitlement only to H Shareholders for the AssetMark Overseas Listing
To consider and approve the resolution on the amendment to the Articles of Association

INFORMATION OF THE RESOLUTIONS

Information of the resolutions to be considered at the EGM and the recommendations of the Directors will be set out in detail in a circular to be despatched by the Company in due course.

DEFINITIONS

In this notice, the following expression has the meaning set out below unless the context otherwise requires.

“Company” a joint stock company incorporated in the People’s Republic of China with limited liability under the corporate name 华泰証券股份有限公司 (Huatai Securities Co., Ltd.), converted from our predecessor 华泰証券有限責任公司 (Huatai Securities Limited Liability Company) on December 7, 2007, carrying on business in Hong Kong as “HTSC”, and was registered as a registered non-Hong Kong company under Part 16 of the Companies Ordinance under the Chinese approved name of “華泰六八八六股份有限公司” and English name of “Huatai Securities Co., Ltd.”; the H Shares of which have been listed on the main board of the Hong Kong Stock Exchange since June 1, 2015 (Stock Code: 6886); the A Shares of which have been listed on the Shanghai Stock Exchange since February 26, 2010 (Stock Code: 601688), unless the context otherwise requires, including its predecessor

By order of the Board of the Company Zhou Yi Chairman

Jiangsu, the PRC, September 7, 2018

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NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

As at the date of this notice, the Board comprises Mr. Zhou Yi as an executive Director; Ms. Pu Baoying, Mr. Chen Ning, Mr. Gao Xu, Mr. Xu Feng, Mr. Xu Qing and Mr. Zhou Yong as non-executive Directors; and Mr. Chen Chuanming, Mr. Liu Hongzhong, Mr. Lee Chi Ming, Ms. Liu Yan and Mr. Chen Zhibin as independent non-executive Directors.

Notes:

1. Eligibility for attending the EGM and date of registration of members for H Shares

The register of members of H Shares of the Company will be closed from Saturday, September 22, 2018 to Monday, October 22, 2018 (both days inclusive), during which time no share transfers of H Shares will be effected. Purchasers of shares who have submitted their instruments of share transfer to the H Share Registrar of the Company and registered as shareholders on the H Share register of members of the Company before 4:30 p.m. on Friday, September 21, 2018 are entitled to attend and vote in respect of all resolutions to be proposed at the EGM.

In order to attend the EGM, holders of H Shares should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, before 4:30 p.m. on Friday, September 21, 2018.

2. Proxy

(1) Each Shareholder entitled to attend and vote at the EGM may appoint one or more proxies in writing to attend and vote on his/her behalf. A proxy need not be a Shareholder.
(2) The instrument appointing a proxy must be in writing under the hand of the appointor or his/her attorney duly authorized in writing, or if the appointor is a legal entity, either under seal or signed by a director or a duly authorized attorney. If that instrument is signed by an attorney of the appointor, the power of the attorney authorizing that the attorney to sign or other documents of authorization must be notarised.

To be valid, for holders of H Shares, the form of proxy and notarised power of attorney or other document of authorisation must be delivered to Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 24 hours before the time appointed for the EGM.

(3) Any voting at the EGM shall be taken by poll.

3. Registration procedures for attending the EGM

(1) A Shareholder attending in person should present proof of identity or stock account cards when attending the meeting. In the case of attendance by proxy, the proxy should present proof of identity and the proxy form(s) from the Shareholders. If a Shareholder is a legal person, its legal representative may attend the meeting by providing his/her identity card and valid proof of its capacity as a legal representative of such Shareholder appointing such person to attend the meeting. In the case of attendance by proxy of the legal representative, the proxy should present his/her identity card and a written letter of authorization duly issued by such legal representative when attending the meeting.
(2) Shareholders of the Company intending to attend the EGM in person or by their proxies should complete and return the reply slip for attending the EGM to Computershare Hong Kong Investor Services Limited (for holders of H Shares) at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before Tuesday, October 2, 2018.

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NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

4. Voting by poll

According to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a shareholders’ general meeting must be taken by poll. Accordingly, the chairman of the EGM will demand a poll in relation to all the proposed resolutions at the EGM in accordance with Article 113 of Articles of Association.

The aforesaid resolutions numbered 1 to 8 are ordinary resolutions to be passed by the affirmative votes representing at least one half of the total number of Shares held by the attending Shareholders having voting rights; resolutions numbered 9 and 10 are special resolutions to be passed by the affirmative votes representing at least two-thirds of the total number of Shares held by the attending Shareholders having voting rights.

Resolutions 2 and 3 shall adopt the method of cumulative poll, i.e., the number of votes carried by each Share held by the Shareholders shall be equal to the number of proposed non-executive Directors and the Shareholders may concentrate their entitled votes when voting. In particular: (1) each Shareholder shall be entitled to such number of votes as shall be equal to the number of Shares held by him/her multiplied by the total number of non-executive Directors and executive Directors upon whom he/she can vote, when electing non-executive Directors and executive Directors. Such votes may only be voted for the candidates of the non-executive Directors and executive Directors of the Company, and the candidates who have the most votes shall be appointed; and (2) each Shareholder shall be entitled to such number of votes as shall be equal to the number of Shares held by him/her multiplied by the total number of Shareholder Supervisor upon whom he/ she can vote, when electing Shareholder Supervisors. Such votes may only be voted for the candidates of the Shareholder Supervisor of the Company, and the candidates who have the most votes shall be appointed.

As far as the Directors are aware as of the date of this notice, no shareholder is considered to have a material interest in any of the resolutions proposed at the EGM and has to abstain from voting at the EGM approving the resolutions.

5. Miscellaneous

(1) The EGM is expected to be held for not more than half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses.
(2) The address of Computershare Hong Kong Investor Services Limited is: Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(3) The registered address of the Company:

No. 228 Middle Jiangdong Road, Nanjing, Jiangsu Province, People’s Republic of China

Contact Office: Board Office Telephone No.: + 86 25 8338 8272 / 8338 7793 Facsimile No.: + 86 25 8338 7784

E-mail: [email protected]

— 23 —

NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

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NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

NOTICE IS HEREBY GIVEN that the 2018 first H shareholders class meeting (the “ H Shareholders Class Meeting ”) will be held at Conference Room, Renaissance Nanjing Olympic Centre Hotel, No.139 Aoti Street, Jianye District, Nanjing, Jiangsu Province, the People’s Republic of China on Monday, October 22, 2018 at 2:00 p.m. (or immediately after the end of the 2018 first extraordinary general meeting and the 2018 first A shareholders class meeting or an adjournment thereof) to consider the following issue:

SPECIAL RESOLUTION

To consider and approve the resolution on the provision of assured entitlement only to H Shareholders for the AssetMark Overseas Listing

INFORMATION OF THE RESOLUTION

Information of the resolution to be considered at the H Shareholders Class Meeting and the recommendations of the Directors will be set out in detail in a circular to be despatched by the Company in due course.

— 24 —

NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

DEFINITIONS

In this notice, the following expression has the meaning set out below unless the context otherwise requires.

“Company”

a joint stock company incorporated in the People’s Republic of China with limited liability under the corporate name 华泰証券股份有限公司 (Huatai Securities Co., Ltd.), converted from our predecessor 华泰証券有限責任公司 (Huatai Securities Limited Liability Company) on December 7, 2007, carrying on business in Hong Kong as “HTSC”, and was registered as a registered non-Hong Kong company under Part 16 of the Companies Ordinance under the Chinese approved name of “華泰六八八六股份有限公司” and English name of “Huatai Securities Co., Ltd.”; the H Shares of which have been listed on the main board of the Hong Kong Stock Exchange since June 1, 2015 (Stock Code: 6886); the A Shares of which have been listed on the Shanghai Stock Exchange since February 26, 2010 (Stock Code: 601688), unless the context otherwise requires, including its predecessor

By order of the Board of the Company Zhou Yi Chairman

Jiangsu, the PRC, September 7, 2018

Notes:

1. Eligibility for attending the H Shareholders Class Meeting and date of registration of members for H Shares

The register of members of H Shares of the Company will be closed from Saturday, September 22, 2018 to Monday, October 22, 2018 (both days inclusive), during which time no share transfers of H Shares will be effected. Purchasers of shares who have submitted their instruments of share transfer to the H Share Registrar of the Company and registered as shareholders on the H Share register of members of the Company before 4:30 p.m. on Friday, September 21, 2018 are entitled to attend and vote in respect of all resolutions to be proposed at the H Shareholders Class Meeting.

In order to attend the H Shareholders Class Meeting, holders of H Shares should ensure that all transfer documents, accompanied by the relevant share certificates, are lodged with the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, before 4:30 p.m. on Friday, September 21, 2018.

— 25 —

NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

2. Proxy

(1) Each Shareholder entitled to attend and vote at the H Shareholders Class Meeting may appoint one or more proxies in writing to attend and vote on his/her behalf. A proxy need not be a Shareholder.
(2) The instrument appointing a proxy must be in writing under the hand of the appointor or his/her attorney duly authorized in writing, or if the appointor is a legal entity, either under seal or signed by a director or a duly authorized attorney. If that instrument is signed by an attorney of the appointor, the power of the attorney authorizing that the attorney to sign or other documents of authorization must be notarised.

(3) Any voting at the H Shareholders Class Meeting shall be taken by poll.

3. Registration procedures for attending the H Shareholders Class Meeting

(1) A Shareholder attending in person should present proof of identity or stock account cards when attending the meeting. In the case of attendance by proxy, the proxy should present proof of identity and the proxy form(s) from the Shareholders. If a Shareholder is a legal person, its legal representative may attend the meeting by providing his/her identity card and valid proof of its capacity as a legal representative of such Shareholder appointing such person to attend the meeting. In the case of attendance by proxy of the legal representative, the proxy should present his/her identity card and a written letter of authorization duly issued by such legal representative when attending the meeting.
(2) Shareholders of the Company intending to attend the H Shareholders Class Meeting in person or by their proxies should complete and return the reply slip for attending the H Shareholders Class Meeting to Computershare Hong Kong Investor Services Limited (for holders of H Shares) at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before Tuesday, October 2, 2018.

4. Voting by poll

According to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a shareholders’ general meeting must be taken by poll. Accordingly, the chairman of the H Shareholders Class Meeting will demand a poll in relation to all the proposed resolutions at the H Shareholders Class Meeting in accordance with Article 113 of Articles of Association of the Company.

The aforesaid resolutions numbered 1 is a special resolution to be passed by the affirmative votes representing at least two-thirds of the total number of Shares held by the attending Shareholders having voting rights.

As far as the Directors are aware as of the date of this notice, no shareholder is considered to have a material interest in any of the resolutions proposed at the H Shareholders Class Meeting and has to abstain from voting at the H Shareholders Class Meeting approving the resolutions.

— 26 —

NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

5. Miscellaneous

(1) The H Shareholders Class Meeting is expected to be held for not more than half a day. Shareholders who attend the meeting in person or by proxy shall bear their own travelling and accommodation expenses.
(2) The address of Computershare Hong Kong Investor Services Limited is: Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(3) The registered address of the Company:

No. 228 Middle Jiangdong Road, Nanjing, Jiangsu Province, People’s Republic of China

Contact Office: Board Office Telephone No.: + 86 25 8338 8272 / 8338 7793 Facsimile No.: + 86 25 8338 7784 E-mail: [email protected]

— 27 —

BIOGRAPHIES OF CANDIDATES FOR DIRECTORS

APPENDIX I

Candidates for Non-executive Directors

Mr. Ding Feng , born in December 1968, holds a master’s degree and a title of senior accountant. He served as assistant accountant of the finance department of China Songhai Industrial Corporation in Xiamen Special Economic Zone from August 1990 to November 1992; chief accountant of the finance department of China North Industries Xiamen Corporation from December 1992 to September 1995; deputy section chief of the finance department of Jiangsu International Trust Investment Company from October 1995 to August 2002; deputy project manager of the finance department of Jiangsu Guoxin Investment Group Limited (“Jiangsu Guoxin Group”) from August 2002 to September 2004; head of the finance department (manager assistant) and deputy general manager of Jiangsu International Trust Corporation Limited from September 2004 to December 2009; deputy general manager of the finance department of Jiangsu Guoxin Group from December 2009 to December 2010; vice-president, president and deputy secretary of the Party Committee of Jiangsu Guoxin Group Finance Co., Ltd. from December 2010 to March 2018; and has served as general manager of finance department of Jiangsu Guoxin Group since March 2018.

Mr. Ding Feng will not receive remuneration from the Company during his term as a non-executive Director.

Mr. Chen Yongbing , born in April 1974, holds a bachelor’s degree with university education. He served as clerk and staff member of the Enterprise Division of Jiangsu Administrative Bureau of State-owned Property (江蘇省國有資產管理局企業處) from August 1996 to November 2000; staff member and senior staff member of the Administrative Office of State-owned Property of the Department of Finance of Jiangsu Province (江蘇省財政廳國有資產管理辦公室) from November 2000 to March 2004; cadre at sub-section level of Jiangsu SASAC from March 2004 to June 2004; senior staff member and principal staff member of the Division of Enterprise Reform and Development (企業改革發展處) of Jiangsu SASAC from June 2004 to December 2009; principal staff member and deputy director of the Division of Enterprise Development and Reform (企業發展改革處) of Jiangsu SASAC from December 2009 to October 2016; deputy head of the investment development department of Jiangsu Communications Holding Co., Ltd. from October 2016 to January 2018; and has served as head of the investment development department of Jiangsu Communications Holding Co., Ltd. since January 2018.

Mr. Chen Yongbing will not receive remuneration from the Company during his term as a non-executive Director.

Ms. Hu Xiao , born in October 1979, is a master of business administration. She served as accountant of KPMG Huazhen LLP from September 2002 to July 2003; research assistant of the stock research department of China International Capital Corporation Limited (a company listed on the Hong Kong Stock Exchange with the stock code of 3908) from July 2003 to July 2006; manager and vice-president of Citigroup Global Markets Asia Limited from July 2008 to July 2012; vice-president and director of Merrill Lynch (Asia Pacific) Limited from July 2012 to March 2017; and has served as director of the strategic investment department of Alibaba Group (a company listed on the New York Stock Exchange with the stock code of BABA) since March 2017.

Ms. Hu Xiao will not receive remuneration from the Company during her term as a non-executive Director.

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APPENDIX I

BIOGRAPHIES OF CANDIDATES FOR DIRECTORS

Ms. Fan Chunyan , born in April 1976, holds a college degree. She served as director assistant of the settlement centre of the headquarters, deputy general manager and financial controller for the Guangzhou region, executive deputy general manager for the Guangzhou region and executive assistant to the president of the South China regional headquarters, executive vice-president of the e-commerce operation headquarters and executive vice-president of the operation headquarters of Suning.com Co., Ltd. (a company listed on the Shenzhen Stock Exchange with the stock code of 002024) from February 2002 to September 2014; vice-president of Suning Retail Group and president of Internet Platform Company (互聯網平台公司) from August 2016 to January 2018; and has served as vice-president of Suning Retail Group and president of Internet Platform Company (互聯網平台公司) as well as general manager of the customer service management centre and deputy general manager of Jiwu Company (極物公司) since January 2018.

Ms. Fan Chunyan will not receive remuneration from the Company during her term as a non-executive Director.

Candidates for Executive Directors

Mr. Zhu Xuebo , born in September 1962, holds a bachelor ’s degree with university education. He worked for Nanjing Artillery Academy and the Nanjing Branch of the People’s Bank of China. He joined the Company in March 2001 and successively served as general manager of the human resources department, head of the organization department of the Party Committee and assistant to the president, etc.; and has served as deputy secretary of the Party Committee of the Company since March 2013.

Mr. Zhu Xuebo will receive remuneration from the Company during his term as an executive Director of the Company which shall be determined in accordance with the relevant regulations and mechanisms.

As of the date of this announcement, according to the information available to the Company and to the knowledge of the Directors, according to Part XV of the SFO, Mr. Zhu Xuebo held the long position of approximately 211,957 H Shares of the Company through the targeted asset management scheme for QDII, representing approximately 0.003% of the total issued Shares of the Company.

As of the Latest Practicable Date, the above candidates for Directors did not receive any punishment from the CSRC and other relevant authorities and any penalty from the Stock Exchange in the past three years. Saved as disclosed in this circular, the aforementioned candidates for Directors have no relationship with any other Directors, Supervisors, senior management, substantial Shareholders or controlling Shareholders of the Company; they have no interest in any Share of the Company as defined within the meaning of Part XV of the SFO; they have no information that shall be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules, and do not and did not participate in matters that shall be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; they did not hold any directorship of any other listed companies or any other position in any member of the Group in the past three years; and there are no other matters that need to be brought to the attention of the Shareholders of the Company.

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APPENDIX II BIOGRAPHIES OF CANDIDATES FOR SHAREHOLDER SUPERVISORS

Candidates for Shareholder Supervisors

Mr. Chen Ning , born in April 1974, with a bachelor degree, is a senior accountant. Mr. Chen successively worked at the steam workshop of Yangzi Petrochemical Refinery (揚子石化煉油廠) from July 1994 to February 1996; served as the accountant of the finance section of Yangzi Petrochemical Refinery from February 1996 to February 2003; the accountant and the deputy section chief of cost section of the finance department of Yangzi Petrochemical Co., Ltd. (揚子石化股份公司) from February 2003 to October 2008; the deputy chief accountant of the finance department, the deputy department chief of the technology development and information management department and the deputy director of ERP Support Center of Yangzi Petrochemical Limited (揚子石化有限公司) from October 2008 to October 2012; the deputy department chief of the finance department of Yangzi Petrochemical Limited and department chief of the finance department of Yangzi Petrochemical Limited (Nanjing) (南京揚子石化有限責任公司) from October 2012 to June 2015; the deputy general manager of the IT department of Jiangsu Guoxin Investment Group Limited from June 2015 to December 2015; the general manager of the IT department of Jiangsu Guoxin Group since December 2015; the general manager of the finance department of Jiangsu Guoxin Group since December 2016; and a Director since June 2016.

Mr. Chen Ning will not receive remuneration from the Company during his term as a Shareholder Supervisor.

Ms. Yu Lanying , born in June 1971, holds a postgraduate degree and a master ’s degree and is a senior accountant. She worked in the finance department of Nanjing Runtai Industrial Trading Company from August 1993 to August 1996; pursued graduate studies in industrial economics at Nanjing University of Science and Technology from September 1996 to April 1999; worked in the finance and audit department of Jiangsu United Trust and Investment Company from May 1999 to January 2003; worked in the finance and audit division of Jiangsu Communications Industry Group Co., Ltd. from January 2003 to October 2004; worked in finance and audit department of Jiangsu Communications Holding Co., Ltd. from October 2004 to May 2008; worked at the finance and accounting department of Jiangsu Expressway Company Limited (a company concurrently listed on the Hong Kong Stock Exchange, the Shanghai Stock Exchange and in the United States, with stock codes of 0177, 600377 and 477373104 respectively) from May 2008 to June 2008; and served as deputy manager (presiding) of the finance and accounting department, manager of the finance and accounting department, deputy financial controller (department level), financial controller, deputy general manager at Jiangsu Expressway Company Limited from June 2008 to April 2018; and has served as chief of the audit and risk control department of Jiangsu Communications Holding Co., Ltd. since April 2018.

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APPENDIX II BIOGRAPHIES OF CANDIDATES FOR SHAREHOLDER SUPERVISORS

Ms. Yu Lanying will not receive remuneration from the Company during her term as a Shareholder Supervisor.

Ms. Yang Yaling , born in July 1981, is a master of accounting, bachelor of accounting (bachelor ’s degree in management), certified public accountant, senior accountant and certified internal auditor. She served as financial accountant and accountant of Taizhou Branch of China United Network Communications Limited (a company listed on the Shanghai Stock Exchange with the stock code of 600050) from December 2003 to July 2007; full-time supervisor of the Jiangsu SASAC from August 2007 to August 2015; deputy general manager and general manager of the audit department of Govtor Capital Group from August 2015 to March 2018; has served as general manager of the investment management department of Govtor Capital Group Co., Ltd. since March 2017; and has concurrently served as general manager of its legal department since March 2018.

Ms. Yang Yaling will not receive remuneration from the Company during her term as a Shareholder Supervisor.

As of the Latest Practicable Date, the above candidates for Shareholder Supervisors did not receive any punishment from the CSRC and other relevant authorities and any penalty from the stock exchange in the past three years. Saved as disclosed in this circular, the aforementioned candidates for Shareholder Supervisors have no relationship with any other Directors, Supervisors, senior management, substantial Shareholders or controlling Shareholders of the Company; they have no interest in any Share of the Company as defined within the meaning of Part XV of the SFO; they have no information that shall be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules, and do not and did not participate in matters that shall be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules; they did not hold any directorship of any other listed companies or any other position in any member of the Group in the past three years; and there are no other matters that need to be brought to the attention of the Shareholders of the Company.

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AI assistant

Huatai Securities Co., Ltd. — Proxy Solicitation & Information Statement 2018

51073_rns_2018-09-13_d2f50bfc-5111-45b1-a175-3264a7e80ff3.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

2018 INTERIM PROFIT DISTRIBUTION PLAN ELECTION OF NON-EXECUTIVE DIRECTORS AND EXECUTIVE DIRECTORS

ELECTION OF SHAREHOLDER SUPERVISORS PROPOSED OVERSEAS LISTING OF ASSETMARK AMENDMENT TO THE ARTICLES OF ASSOCIATION

AND

NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

TABLE OF CONTENTS

DEFINITIONS

DEFINITIONS

LETTER FROM THE BOARD

Executive Director:

Non-executive Directors:

Registered office:

Independent Non-executive Directors:

To the Shareholders

Introduction

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Ordinary Resolutions:

1. Proposal in Relation to 2018 Interim Profit Distribution Plan

LETTER FROM THE BOARD

2. Proposals in Relation to Election of Non-executive Directors and Executive Directors

LETTER FROM THE BOARD

LETTER FROM THE BOARD

3. Proposals in Relation to Election of Shareholder Supervisors

LETTER FROM THE BOARD

4. Proposal in Relation to the Plan of the AssetMark Overseas Listing

(A) Background of AssetMark

(B) Proposal of AssetMark Overseas Listing

LETTER FROM THE BOARD

LETTER FROM THE BOARD

6. Proposal in Relation to the Undertaking of Maintaining Independent Listing Status of the Company

LETTER FROM THE BOARD

7. Proposal in Relation to the Description of the Sustainable Profitability and Prospects of the Company

8. Proposal Regarding Authorizing the Board and Its Authorized Party(ies) in Dealing with Matters Regarding the AssetMark Overseas Listing

LETTER FROM THE BOARD

Special Resolutions:

9. Proposal Regarding the Provision of Assured Entitlement Only to H Shareholders for the AssetMark Overseas Listing

LETTER FROM THE BOARD

LETTER FROM THE BOARD

10. Proposal in relation to the amendment to the Articles of Association

LETTER FROM THE BOARD

Information on Attending the EGM and the H Shareholders Class Meeting

LETTER FROM THE BOARD

Voting Arrangement

LETTER FROM THE BOARD

Responsibility Statement

Recommendation

NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTIONS

NOTICE OF THE 2018 FIRST EXTRAORDINARY GENERAL MEETING

SPECIAL RESOLUTIONS

INFORMATION OF THE RESOLUTIONS

DEFINITIONS

1. Eligibility for attending the EGM and date of registration of members for H Shares

2. Proxy

3. Registration procedures for attending the EGM

4. Voting by poll

5. Miscellaneous

NOTICE OF THE 2018 FIRST H SHAREHOLDERS CLASS MEETING

SPECIAL RESOLUTION

INFORMATION OF THE RESOLUTION

DEFINITIONS

Notes:

1. Eligibility for attending the H Shareholders Class Meeting and date of registration of members for H Shares

2. Proxy

3. Registration procedures for attending the H Shareholders Class Meeting

4. Voting by poll

5. Miscellaneous

Candidates for Non-executive Directors

APPENDIX I

BIOGRAPHIES OF CANDIDATES FOR DIRECTORS

Candidates for Executive Directors

Candidates for Shareholder Supervisors

More from Huatai Securities Co., Ltd.

Huatai Securities Co., Ltd. Proxy Solicitation & Information Statement 2018