Haitong International Securities : ANNOUNCEMENT OF THE INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong 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.

HAITONG INTERNATIONAL SECURITIES GROUP LIMITED

海通國際證券集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 665)

ANNOUNCEMENT OF THE INTERIM RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

Financial Highlights
			Six months ended	Percentage change
Results	30.6.2020	30.6.2019	Increase / (Decrease)
Revenue (HK$'000)	3,524,658	4,108,628	(14)
-	Commission and fee income		1,196,142	915,706	31
-	Interest income		1,362,554	1,404,896	(3)
- Net trading and investment income		965,962	1,788,026	(46)
Net profit excluding impairment on
	secured financing (HK$'000)	1,074,973	1,045,527	3
Net Profit Attributable to Shareholders (HK$'000)	521,498	1,038,885	(50)
Per share
Basic Earnings Per Share (HK Cents)	8.90	18.04	(51)
Diluted Earnings Per Share (HK Cents)	8.88	16.61	(47)
					Percentage change
Financial Position	30.6.2020	31.12.2019	Increase / (Decrease)
Shareholders' Funds (HK$'000)	27,155,290	27,030,581	-
Total Assets (HK$'000)	156,318,285	156,274,502	-
Number of Shares in Issue (Note 1)	6,036,035,086	5,940,583,872	2
NAV Per Share (HK$)	4.50	4.55	(1)

Note:

1. Certain shareholders elected scrip dividend for the 2019 second interim dividend. Hence, the total number of shares of the Company was increased to 6,036,035,086 as at 30 June 2020.

1

INTERIM RESULTS

The board of directors (the "Board") of Haitong International Securities Group Limited (the "Company" or "Haitong International") is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (collectively referred to as the "Group") for the six months ended 30 June 2020, with the comparative figures for the preceding six months ended 30 June 2019, as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

	NOTES	Six months ended
		30.6.2020	30.6.2019
		HK$'000	HK$'000
		(unaudited)	(unaudited)
Revenue
Commission and fee income	5	1,196,142	915,706
Interest income	5	1,362,554	1,404,896
Net trading and investment income	5	965,962	1,788,026
		-------------	-------------
		3,524,658	4,108,628
Other income and gains or losses	5	28,829	(15,423)
		-------------	-------------
		3,553,487	4,093,205
Salaries and allowances, bonuses and pension	6	(559,202)	(677,548)
Commission expenses	6	(126,133)	(90,925)
Amortisation and depreciation		(118,704)	(102,654)
Operating expenses		(263,568)	(321,156)
		────────	────────
		(1,067,607)	(1,192,283)
		-------------	-------------
Finance costs	8	(1,179,853)	(1,455,257)
		────────	────────
Profit before impairment charges and tax		1,306,027	1,445,665
Impairment charges, net of reversal	7	(772,705)	(205,903)
		────────	────────
Profit before tax		533,322	1,239,762
Income tax expense	9	(11,824)	(200,877)
		────────	────────
Profit for the period attributable to owners of the
Company		521,498	1,038,885
		════════	════════
Earnings per share attributable to owners of the
Company	11
- Basic (HK cents per share)		8.90	18.04
		════════	════════
- Diluted (HK cents per share)		8.88	16.61
		════════	════════

2

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

	Six months ended
	30.6.2020	30.6.2019
	HK$'000	HK$'000
	(unaudited)	(unaudited)
Profit for the period attributable to owners of the Company	521,498	1,038,885
	───────	───────
Other comprehensive (expense) income:
Items that will not be reclassified subsequently to profit or loss:
Fair value changes on investments in equity instruments at
fair value through other comprehensive income	(40,397)	(602)
Items that may be reclassified subsequently to profit or loss:
Fair value changes on investments in debt instruments at fair
value through other comprehensive income
- Net fair value changes during the period	(13,014)	(586)
- Reclassification adjustment to profit or loss on
disposal	4,926	-
Exchange differences on translating foreign operations	(55,512)	(15,821)
	───────	───────
Other comprehensive expense for the period	(103,997)	(17,009)
	───────	───────
Total comprehensive income for the period attributable to
owners of the Company	417,501	1,021,876
	═══════	═══════

3

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

			30.6.2020					31.12.2019
				(unaudited)						(audited)
				Non-						Non-
		Current		current		Total		Current		current		Total
	NOTES	HK$'000		HK$'000		HK$'000		HK$'000		HK$'000		HK$'000
ASSETS
Cash and cash equivalents		3,373,842	-	3,373,842	4,269,608	-	4,269,608
Cash held on behalf of customers		17,864,004	-	17,864,004	15,134,126	-	15,134,126
Financial assets held for trading and
market making activities		12,525,842	-	12,525,842	28,459,878	-	28,459,878
Investment securities
- measured at fair value		22,542,565	8,519,524	31,062,089	9,774,362	17,245,225	27,019,587
- measured at amortised cost		7,330,295	706,541	8,036,836	9,416,784	1,144,299	10,561,083
Assets acquired for financial products
issued		39,305,854	6,718,461	46,024,315	29,756,276	2,629,569	32,385,845
Derivative financial instruments		944,506	-	944,506	340,153	-	340,153
Advances to customers	12	14,358,965	3,239,019	17,597,984	19,469,052	1,114,087	20,583,139
Cash collateral on securities borrowed
and reverse repurchase agreements		7,822,609	-	7,822,609	5,324,550	-	5,324,550
Accounts receivable	13	7,903,887	-	7,903,887	8,683,114	-	8,683,114
Tax recoverable		319,345	-	319,345	230,117	-	230,117
Prepayments, deposits and other
receivables		1,221,868	100,907	1,322,775	1,687,520	75,261	1,762,781
Goodwill and other intangible assets		-	487,480	487,480	-	485,916	485,916
Other assets		-	163,982	163,982	-	103,128	103,128
Investment property		-	70,078	70,078	-	192,471	192,471
Property and equipment		-	753,205	753,205	-	706,275	706,275
Deferred tax assets		-		45,506		45,506		-		32,731		32,731
Total assets		135,513,582	20,804,703	156,318,285	132,545,540	23,728,962	156,274,502
LIABILITIES AND EQUITY
Liabilities
Financial liabilities held for trading
and market making activities		2,550,000	-	2,550,000	1,945,382	-	1,945,382
Financial products issued at fair value		20,521,775	1,602,307	22,124,082	17,103,333	1,926,905	19,030,238
Derivative financial instruments		370,381	-	370,381	545,139	-	545,139
Cash collateral on securities lent and
repurchase agreements		17,207,719	-	17,207,719	27,455,006	-	27,455,006
Accounts payable	15	24,028,946	-	24,028,946	19,107,219	-	19,107,219
Bank borrowings		40,079,285	-	40,079,285	36,872,917	-	36,872,917
Debt securities in issue		11,885,051	8,596,915	20,481,966	12,791,450	8,626,979	21,418,429
Other liabilities arising from
consolidation of investment funds		439,986	-	439,986	421,238	-	421,238
Tax payable		459,496	-	459,496	559,082	-	559,082
Other payables, accruals and other
liabilities		1,274,745	117,958	1,392,703	1,660,778	199,498	1,860,276
Deferred tax liabilities		-		28,431		28,431		-		28,995		28,995
Total liabilities		118,817,384	10,345,611	129,162,995	118,461,544	10,782,377	129,243,921
Equity
Share capital	14				603,603					594,058
Reserves					26,286,101					26,181,078
Proposed dividends	10					265,586						255,445
Total shareholders' equity						27,155,290						27,030,581
Total liabilities and shareholders' equity						156,318,285						156,274,502
Net current assets						16,696,198						14,083,996

4

Notes:

1. GENERAL INFORMATION
   Haitong International Securities Group Limited (the "Company") is a limited liability company incorporated in Bermuda and its shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"). The principal place of business of the Company is located at 22nd Floor, Li Po Chun Chambers, 189 Des Voeux Road Central, Hong Kong. The Company is an investment holding company and its subsidiaries are principally engaged in wealth management, corporate finance, asset management, institutional clients and investment. Details of the business segments of the Company and its subsidiaries (collectively referred as the "Group") are disclosed in note 4.
   The Company's immediate holding company and ultimate holding company are Haitong International Holdings Limited (incorporated in Hong Kong with limited liability) and Haitong Securities Co., Limited ("HSCL") (incorporated in the People's Republic of China ("PRC") with limited liability) respectively.
   These unaudited condensed consolidated financial statements are presented in Hong Kong dollars ("HK$") which is the same as the functional currency of the Company (unless otherwise stated).
   Certain comparative figures have been reclassified or restated to conform with current period presentation.
2. BASIS OF PREPARATION
   The unaudited condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.
3. PRINCIPAL ACCOUNTING POLICIES
   The unaudited condensed consolidated financial statements have been prepared on the historical cost basis except for investment property and certain financial instruments, which are measured at fair values.
   Other than changes in accounting policies resulting from application of amendments to Hong Kong Financial Reporting Standards ("HKFRSs") and application of certain accounting policies which became relevant to the Group, the accounting policies and methods of computation used in the unaudited condensed consolidated financial statements for the six months ended 30 June 2020 are the same as those followed in the preparation of the Group's audited consolidated financial statements for the year ended 31 December 2019.

5

Details of any changes in accounting policies are set out below.

Application of amendments to HKFRSs

In the current interim period, the Group has applied, for the first time, the following amendments to HKFRSs issued by the HKICPA that are relevant for the preparation of the Group's unaudited condensed consolidated financial statements:

Amendments to HKFRS 3	Definition of a Business
Amendments to HKAS 1 and HKAS 8	Definition of Material
Amendments to HKFRS 9, HKAS 39
and HKFRS 7	Interest Rate Benchmark Reform

In addition to the above amendments to HKFRSs, a revised Conceptual Framework for Financial Reporting was issued in 2018. Its consequential amendments, the Amendments to References to the Conceptual Framework in HKFRS Standards, are effective for annual periods beginning on or after 1 January 2020.

The application of the new and amendments to HKFRSs in the current period has had no material impact on the Group's financial position and performance for the current and prior periods and/or on the disclosures set out in these unaudited condensed consolidated financial statements.

6

4. SEGMENT INFORMATION

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker is the person or group that allocates resources to and assesses the performance of the operating segments of an entity. The Group has determined the Executive Committee as its chief operating decision maker.

Most of the Group's revenue is related to activities conducted in Hong Kong. No single customer amounts to more than 10 percent of the Group's revenue.

The segments are managed separately as each segment engages in different activities. The Group's operating and reportable segments are as follows:

1. the wealth management segment engages in provision of a full range of financial services and investment solutions to retail and high net-worth clients. Services provided include broking and dealing in securities, futures and options contracts, over-the-counter products and risk management instruments sales, investment advisory service, financial planning service and investment funds distribution services, custodian services as well as the provision of securities margin financing to clients;
2. the corporate finance segment engages in provision of sponsoring and underwriting services to corporate clients for their fund raising activities in equity and debt capital markets, and also engages in provision of advisory service and financing solutions to corporate clients for their corporate actions such as mergers and acquisitions as well as assets restructuring, etc;
3. the asset management segment engages in provision of investment management services on diversified and comprehensive investment products including public funds, private funds, mandatory provident funds to individual, corporate and institutional clients;
4. the institutional clients segment engages in provision of cash equities sales and trading, prime brokerage, stock borrowing and lending, equity research, and investment and financing solutions, issuance and market making for a wide variety of financial instruments, such as fixed income products, currency and commodity products, futures and options, exchange traded funds and derivative products in major financial centers across the world for global institutional clients; and
5. the investment segment aims to enhance and intensify the synergies among various business segments of the Group through investing in investment funds and private equity investments. It focuses on exploring investment opportunities with reasonable returns, thereby expanding customer relationships and promoting the overall growth of the Group's business.

During the year ended 31 December 2019, the Group reclassified the net currency trading income from wealth management segment to institutional clients segment, and net investment gain of corporate finance segment from corporate finance segment to investment segment to better reflect the revenue nature of each business segment in accordance with relevant products and services provided by each segment. Consequently, comparative information for the six months ended 30 June 2019 on segment revenue and segment expenses (as a result of reclassification of segment revenue) has been restated to conform the current period's presentation.

7

The following table presents revenue and profit (loss) for the Group's business segments:

	Wealth management	Corporate finance	Asset management	Institutional clients	Investment	Consolidated
					For the six month ended 30 June
	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019	2020	2019
	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000	HK$'000
		(Restated)		(Restated)		(Restated)		(Restated)		(Restated)		(Restated)
Segment revenue:
Commission and fee
income	341,944	288,930	536,225	413,956	154,446	106,947	163,527	105,873	-	-	1,196,142	915,706
Interest income	642,393	760,749	373,579	230,448	-	-	335,118	405,830	11,464	7,869	1,362,554	1,404,896
Net trading and
investment income	-	-	-	-	-	-	353,525	1,146,297	612,437	641,729	965,962	1,788,026
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
Segment revenue	984,337	1,049,679	909,804	644,404	154,446	106,947	852,170	1,658,000	623,901	649,598	3,524,658	4,108,628
Other income and gains
(losses)	7,031	4,246	404	1,278	-	-	407	399	20,987	(21,346)	28,829	(15,423)
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
	991,368	1,053,925	910,208	645,682	154,446	106,947	852,577	1,658,399	644,888	628,252	3,553,487	4,093,205
Segment expenses	(519,186)	(593,973)	(322,563)	(328,700)	(81,696)	(64,583)	(831,820)	(1,231,670)	(492,195)	(428,614)	(2,247,460)	(2,647,540)
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
Profit before
impairment charges
and tax	472,182	459,952	587,645	316,982	72,750	42,364	20,757	426,729	152,693	199,638	1,306,027	1,445,665
Impairment charges,
net of reversal	(102,736)	(209,372)	(20,451)	(374)	-	-	(649,518)	1,489	-	2,354	(772,705)	(205,903)
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
Segment results / profit
(loss) before tax	369,446	250,580	567,194	316,608	72,750	42,364	(628,761)	428,218	152,693	201,992	533,322	1,239,762
	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────	───────
Income tax expense											(11,824)	(200,877)
											────────	────────
Profit for the period											521,498	1,038,885
											════════	════════
Amortisation and
depreciation	(36,038)	(30,028)	(9,250)	(5,770)	(2,892)	(2,028)	(68,748)	(63,492)	(1,776)	(1,336)	(118,704)	(102,654)
Finance costs	(184,484)	(238,292)	(142,669)	(106,658)	-	-	(401,660)	(780,757)	(451,040)	(329,550)	(1,179,853)	(1,455,257)

8

5. REVENUE AND OTHER INCOME AND GAINS OR LOSSES

An analysis of revenue and other income and gains or losses is as follows:

	Six months ended
	30.6.2020	30.6.2019
	HK$'000	HK$'000
	(unaudited)	(unaudited)
Revenue
Commission and fee income (note (i)):
Commission on brokerage (note (ii))	394,600	253,278
Commission on underwriting and placing	464,859	334,131
Financial advisory and consultancy fee income (note
(ii))	71,366	79,825
Asset management fee and performance fee income	154,446	106,947
Handling, custodian and service fee income (note (ii))	110,871	141,525
	────────	────────
	1,196,142	915,706
	────────	────────
Interest income:
Interest income from advances to customers
- margin financing	516,441	592,797
- merger and acquisition financing	117,865	165,436
- secured financing	125,855	142,851
Interest income from investment securities at amortised
cost	416,023	317,826
Interest income from reverse repurchase agreements	51,273	18,688
Interest income from bank deposits and others	135,097	167,298
	────────	────────
	1,362,554	1,404,896
	────────	────────
Net trading and investment income:
Net trading income on fixed income, currency and
commodities, and equity derivatives	(51,102)	765,336
Net trading income on financial products	404,627	380,961
Net investment gain on financial assets/liabilities at fair
value through profit or loss	612,437	641,729
	────────	────────
	965,962	1,788,026
	────────	────────
	3,524,658	4,108,628
	════════	════════
Other income and gains or losses
Others (note (iii))	28,829	(15,423)
	════════	════════

Notes:

1. Commission and fee income is the only revenue arising from HKFRS 15, while interest income and net trading and investment income are under the scope of HKFRS 9. Included in revenue, revenue arising from contracts with customers recognised at a point in time and over time were HK$999,232,000 (six months ended 2019: HK$737,419,000) and HK$196,910,000 (six months ended 2019: HK$178,287,000) respectively.

9

1. Amounts of commission on brokerage of HK$107,335,000 (six months ended 2019: HK$66,933,000) and handling, custodian and service fee income of HK$56,192,000 (six months ended 2019: HK$38,940,000) have been included in institutional clients segment and each of the remaining amounts of these revenue types have mainly been included in wealth management segment.
   Amounts of financial advisory and consultancy fee income of HK$71,366,000 (six months ended 2019: HK$79,825,000) have been included in corporate finance segment.
2. Included in other income and gains or losses is the net gain on remeasurement of the liability in relation to the share of consolidated investment funds attributable to third-party unit/shareholders of HK$16 million (six months ended 2019: net loss of HK$26 million).

Certain comparative figures have been reclassified to conform with current period presentation and there is no impact on the total revenue.

6.	EMPLOYEE BENEFIT COSTS
		Six months ended
		30.6.2020	30.6.2019
		HK$'000	HK$'000
		(unaudited)	(unaudited)
	Salaries, bonuses and allowances	537,926	662,678
	Pension scheme contributions (net)	21,276	14,870
		───────	───────
		559,202	677,548
	Commission to accounts executives (note)	106,968	77,030
		───────	───────
		666,170	754,578
		═══════	═══════

Note: Included in commission expenses of HK$126,133,000 (six months ended 2019: HK$90,925,000) is commission to accounts executives of HK$106,968,000 (six months ended 2019: HK$77,030,000).

7.	IMPAIRMENT CHARGES, NET OF REVERSAL
		Six months ended
		30.6.2020	30.6.2019
		HK$'000	HK$'000
		(unaudited)	(unaudited)
	Impairment charges (reversal of impairment charges) on:
	Advances to customers
	- margin financing	101,425	199,675
	- merger and acquisition financing	866	(43)
	- secured financing (note)	662,844	7,955
	Investment securities at amortised cost	6,295	(2,524)
	Accounts receivable and others	1,275	840
		───────	───────
		772,705	205,903
		═══════	═══════

Note: During the period ended 30 June 2020, the management disposed of collaterals of a loan due to a default of the borrower. After the disposal of collaterals to repay part of the loan during the current period, the outstanding gross balance of the loan amounted to HK$636 million as at 30 June 2020. In assessing the impairment, the management considered a number of factors including the outstanding balance of this exposure, latest business update of the borrower, and the financial status of the borrower and guarantor, an impairment provision of HK$636 million was recognised and consequently the net carrying amount was reduced to zero as at 30 June 2020.

10

8.	FINANCE COSTS
		Six months ended
		30.6.2020	30.6.2019
		HK$'000	HK$'000
		(unaudited)	(unaudited)
	Bank loans and overdrafts	780,577	610,524
	Debt securities in issue:
	- Convertible bonds	1,054	34,841
	- Non-convertible bonds	269,466	227,205
	- Non-convertible notes	107,959	203,883
	Interest on lease liabilities	5,824	3,756
	Repurchase agreements and others (note)	14,973	375,048
		───────	───────
		1,179,853	1,455,257
		═══════	═══════

Note: For the period ended 30 June 2019, included in the "finance costs - repurchase agreement and others" of HK$375 million was the finance costs arising from repurchase agreements of HK$350 million. During the current period, the Group considers that repurchase agreements shall be designated at fair value through profit or loss to reduce the accounting mis-match and better reflect the business model of its trading and market making activities and financial product issuance activities. Consequently, any gains or loss arising from the Group's repurchase agreements entered during the 6 months ended 30 June 2020 are presented in "net trading and investment income" in the unaudited condensed consolidated statement of profit or loss.

9. INCOME TAX EXPENSE

	Six months ended
	30.6.2020	30.6.2019
	HK$'000	HK$'000
	(unaudited)	(unaudited)
Current taxation
- Hong Kong	10,488	191,507
- Other jurisdictions	14,675	9,876
	──────	──────
	25,163	201,383
	──────	──────
Deferred tax
- Current period	(13,339)	(506)
	──────	──────
	11,824	200,877
	══════	══════

Hong Kong Profits Tax is calculated at 16.5% on the estimated assessable profits arising in Hong Kong for the current and prior periods.

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

11

1. DIVIDENDS
   At a meeting of the Board held on 24 March 2020, the Board declared a second interim dividend of HK4.3 cents per share in cash for the year ended 31 December 2019. The shareholders were given the option to receive second interim dividend in new shares in lieu of cash. The second interim dividend was paid on 2 June 2020, with an approximate total of HK$85,275,000 cash dividend paid to the shareholders and 95,451,214 shares were issued in scrip form with an approximate amount of HK$170,170,000.
   At the meeting of the Board on 21 August 2020, the Board declared an interim dividend of HK4.4 cents per share in cash for the six months ended 30 June 2020 to shareholders whose names appear on the register of members of the Company on 9 September 2020. The interim dividend is expected to be paid on or about 21 September 2020. The overall amount of cash dividends under distribution will be calculated according to such actual number of shares of the Company in issue on the record date for the cash dividend distribution.
2. EARNINGS PER SHARE Basic earnings per share
   Basic earnings per share is calculated by dividing the profit for the period attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period.

	Six months ended
	30.6.2020	30.6.2019
	(unaudited)	(unaudited)
Earnings
Profit for the period attributable to owners of the
Company (HK$'000)	521,498	1,038,885
	═══════	═══════
Number of shares
Weighted average number of ordinary shares
in issue less shares held for the share award scheme
(in thousands) (note (a))	5,857,881	5,759,506
	═══════	═══════
Basic earnings per share (HK cents per share)	8.90	18.04
	═══════	═══════

Diluted earnings per share

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive ordinary shares.

	Six months ended
	30.6.2020	30.6.2019
	(unaudited)	(unaudited)
Earnings
Profit for the period attributable to owners of the
Company (HK$'000)	521,498	1,038,885
Effect of dilutive potential ordinary shares
- Interest on convertible bonds (net of tax) (HK$'000)
(note (b))	880	29,093
	────────	────────
Earnings for the purpose of diluted earnings per share
(HK$'000)	522,378	1,067,978
	════════	════════
12

Number of shares
Weighted average number of ordinary shares
in issue less shares held for the share award scheme
(in thousands) (note (a))	5,857,881	5,759,506
Effect of dilutive potential ordinary shares:
- Convertible bonds (in thousands) (note (b))	18,026	668,823
- Share options (in thousands) (note (c))	310	211
- Share awards (in thousands) (note (c))	3,438	1,443
	────────	────────
Weighted average number of ordinary shares for the
purpose of diluted earnings per share (in thousands)	5,879,655	6,429,983
	════════	════════
Diluted earnings per share (HK cents per share)	8.88	16.61
	════════	═══════

Notes:

1. As at 30 June 2020, the trustee of the share award scheme held 175,503,979 ordinary shares of the Company (30 June 2019: 42,405,142 shares) for the share award scheme, which was adopted by the Board on 19 December 2014, through purchases in the open market at a total cost, including related transaction costs, of approximately HK$401 million (30 June 2019: HK$163 million).

During the current period,14,372,205 (30 June 2019: 6,982,366 awarded shares) awarded shares were granted by the Company. There were 235,671 awarded shares lapsed in respect of such grant, while 150,000 awarded shares (30 June 2019: Nil) in respect of the grant by the Company on 29 October 2019, 108,143 awarded shares (30 June 2019: 37,744 awarded shares) in respect of the grant by the Company on 25 March 2019, 131,545 awarded shares (30 June 2019: 239,159 awarded shares) in respect of the grant by the Company on 11 May 2018, 7,485 awarded shares (30 June 2019: 41,237 awarded shares) in respect of the grant by the Company on 10 March 2017 were lapsed during the current period. 29,820 awarded shares were lapsed during the six months ended 30 June 2019 in respect of the grant by the Company on 11 March 2016. In addition, 78,000 awarded shares were vested during the current six-month period in relation to the grant made by the Company on 8 May 2020, 2,615,000 awarded shares (30 June 2019: Nil) were vested during the current six-month period in relation to the grant made by the Company on 29 October 2019, 2,123,722 awarded shares (30 June 2019: Nil) were vested during the current six-month period in relation to the grant made by the Company on 25 March 2019, 1,971,575 awarded shares (30 June 2019: 2,199,883 awarded shares) were vested during the current six-month period in relation to the grant made by the Company on 11 May 2018, 1,147,866 awarded shares (30 June 2019: 1,259,541 awarded shares) were vested during the current six-month period in relation to the grant made by the Company on 10 March 2017. 2,133,343 awarded shares were vested during the six-month ended 30 June 2019 in relation to the grant made by the Company on 11 March 2016.

1. On 4 November 2014, the Company issued convertible bonds of HK$1,164 million. On 25 October 2016, the Company further issued convertible bonds of HK$3,880 million.

The convertible bonds issued in 2014 that were outstanding and convertible into ordinary shares of the Company at a conversion price of HK$4.14 immediate before redemption had been redeemed in full during the year ended 31 December 2019. As at 30 June 2020, the convertible bonds issued in 2016 that remain outstanding are convertible into ordinary shares of the Company at a conversion price of HK$5.67 (31 December 2019: HK$5.81), at the option of the holders of the convertible bonds, which created a potential dilutive effect to the earnings per share. In the calculation of the diluted earnings per share, the convertible bonds are assumed to have been converted into ordinary shares. The weighted average number of ordinary shares outstanding is increased by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares was made from the date of the first issue with the adjustment if there is any conversion of the convertible bonds into ordinary shares during the period. The net profit is adjusted to eliminate the relevant interest expense less the tax effect.

13

1. The computation of diluted earnings per share assumed the exercise of the Company's outstanding share options and share awards with the exercise price lower than the average market price during the six months ended 30 June 2020 and with the adjustment for the share options and share awards lapsed or exercised during the period.

12. ADVANCES TO CUSTOMERS

		30.6.2020	31.12.2019
		HK$'000	HK$'000
		(unaudited)	(audited)
Advances to customers:
-	Margin financing	11,453,159	12,629,847
-	Merger and acquisition financing	3,002,947	2,827,958
-	Secured financing	3,141,878	5,125,334
		────────	────────
		17,597,984	20,583,139
Less: Non-current portion	(3,239,019)	(1,114,087)
		────────	────────
Current portion	14,358,965	19,469,052
		════════	════════
Margin financing
		30.6.2020	31.12.2019
		HK$'000	HK$'000
		(unaudited)	(audited)
Margin financing	12,429,579	13,504,901
Less: Impairment allowance	(976,420)	(875,054)
		────────	────────
		11,453,159	12,629,847
		════════	════════

The credit facility limits to margin clients are determined by the discounted market value of the collateral securities accepted by the Group, where the Group maintains a list of approved stocks for margin lending at a specified loan to collateral ratio. Any excess in the lending ratio will trigger a margin call with the margin clients having to make good the shortfall. In granting credit facility, other factors such as financial strength, creditworthiness and the past collection statistics are also considered. The Group's Risk Management Department and Credit Approval Committee are responsible to monitor credit risk and seek to maintain a strict control over the outstanding loan balance.

The loans to margin clients are interest bearing and secured by the underlying pledged securities. As at 30 June 2020, margin financing of HK$11,453 million (31 December 2019: HK$12,630 million) were secured by securities pledged by the customers to the Group as collateral with undiscounted market value of HK$48,604 million (31 December 2019: HK$51,549 million). In determining the allowances for credit impaired loans to margin clients for the current period, the management of the Group also takes into account shortfall by comparing the fair value of securities pledged as collateral and the outstanding balance of loan to margin clients individually taking into account subsequent settlements or executable settlement plans and restructuring arrangements in assessing the expected credit loss.

No ageing analysis is disclosed as in the opinion of the directors, the ageing analysis is not meaningful in view of the revolving nature of the business of securities margin financing.

14

Merger and acquisition financing
	30.6.2020	31.12.2019
	HK$'000	HK$'000
	(unaudited)	(audited)
Merger and acquisition financing	3,047,683	2,871,828
Less: Impairment allowance	(44,736)	(43,870)
	────────	────────
	3,002,947	2,827,958
Less: Non-current portion	(389,760)	(157,907)
	────────	────────
Current portion	2,613,187	2,670,051
	════════	════════

Included in merger and acquisition financing are HK$3,048 million (31 December 2019: HK$2,838 million) of advances that are secured. Collateral held includes shares of the target company (or shares of the legal entity holding shares of target company) acquired by the borrower. In addition, majority of these advances are also guaranteed by other parties including holding companies or related companies of the borrower, beneficial owner of the borrower, etc.

Majority of these advances have contractual maturity within 1 year from the reporting date and credit limits are set for borrowers during the approval process established by the Group. Regular reviews on these merger and acquisition financing are conducted by the Risk Management Department and the Credit Approval Committee of the Group based on the latest status of these merger and acquisition financing, the latest announced or available information about the borrowers, the underlying collateral held and the latest status of the relevant merger and acquisition project. The Group seeks to maintain effective control over its merger and acquisition financing in order to minimise credit risk by reviewing the borrowers' and/or guarantors' financial positions.

As at 30 June 2020 and 31 December 2019, there was one past due merger and acquisition financing.

Secured financing
	30.6.2020	31.12.2019
	HK$'000	HK$'000
	(unaudited)	(audited)
Secured financing	3,827,894	5,148,506
Less: Impairment allowance	(686,016)	(23,172)
	────────	────────
	3,141,878	5,125,334
Less: Non-current portion	(2,849,259)	(956,180)
	────────	────────
Current portion	292,619	4,169,154
	════════	════════

Included in secured financing are HK$3,828 million (31 December 2019: HK$5,149 million) that are secured.

The majority of these secured financing are secured and/or guaranteed with contractual maturity within 1 year to 2 years from the reporting date and credit limits are set for borrowers.

Collateral held includes equity instruments held by the corporate borrowers and investment portfolio held by institutional borrowers, etc. Regular reviews on these secured financing are conducted by the Risk Management Department and the Credit Approval Committee of the Group based on the latest status of these secured financing and the latest announced or available information about the borrowers and the underlying collateral held. Apart from collateral monitoring, the Group seeks to maintain effective control over its secured financing in order to minimise credit risk by reviewing the borrowers' and/or guarantors' financial positions.

As at 30 June 2020 and 31 December 2019, there was one past due secured financing.

15

13. ACCOUNTS RECEIVABLE

		30.6.2020	31.12.2019
		HK$'000	HK$'000
		(unaudited)	(audited)
Accounts receivable from:
-	Clients	699,613	924,685
- Brokers, dealers and clearing house	5,157,426	6,347,099
- Clients for subscription of new shares in IPO	1,195,864	5,611
- Immediate holding company (note (i))	428,690	947,640
-	Others (note (ii))	422,294	458,079
		────────	────────
		7,903,887	8,683,114
		════════	════════

Notes:

1. In December 2019, Haitong International Holdings Limited (immediate holding company of the Company) purchased a debt security from a subsidiary of the Company and such transaction was settled in January 2020. During the current interim period, the Company advanced a loan to Haitong International Holdings Limited at an interest rate of US Dollar London Interbank Offer Rate plus a spread. The outstanding principal balance as at 30 June 2020 amounted to US$55,000,000 (equivalent to HK$426,267,000), which will be fully repayable on the maturity date on 15 January 2021.
2. The amount represents the fees receivable from corporate finance, wealth management and asset management business.

The following is an ageing analysis of the accounts receivable, excluding the advance to the immediate holding company, based on trade date / invoice date at the period / year end:

	30.6.2020	31.12.2019
	HK$'000	HK$'000
	(unaudited)	(audited)
Between 0 and 3 months	7,454,977	8,519,010
Between 4 and 6 months	1,990	148,472
Between 7 and 12 months	8,473	3,988
Over 1 year	12,180	11,644
	────────	────────
	7,477,620	8,683,114
	════════	════════

Accounts receivable from clients, brokers, dealers and clearing houses arising from the business of dealing in securities are repayable on demand subsequent to settlement date. The normal settlement terms of accounts receivable arising from the business of dealing in securities are two days after trade date and that of accounts receivable arising from the business of dealing in futures, options and securities trading in Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are one day after trade date.

Accounts receivable from clients arising from financing of IPO subscriptions are required to settle their securities trading balances on the allotment date determined under the relevant market practices or exchange rules. As at 30 June 2020, the settlement dates are in the range of 2 to 7 days. Subsequent to the period ended 30 June 2020, the receivables have been settled respectively during the period of 2 July 2020 to 9 July 2020.

Normal settlement terms of accounts receivable from wealth management, corporate finance and asset management are determined in accordance with the contract terms, usually within one year after the services provided.

For accounts receivable from clients that are overdue, management ensures that the available cash balance and listed equity securities belonging to clients in which the Group holds as custodian are sufficient to cover the amounts due to the Group.

16

14.	SHARE CAPITAL
		30.6.2020	31.12.2019
		HK$'000	HK$'000
		(unaudited)	(audited)
	Authorised:
	20,000,000,000 (31 December 2019: 20,000,000,000)
	ordinary shares of HK$0.10 each	2,000,000	2,000,000
		═══════	═══════
	Issued and fully paid:
	6,036,035,086 (31 December 2019: 5,940,583,872)
	ordinary shares of HK$0.10 each	603,603	594,058
		═══════	═══════
	The movements in issued share capital were as follows:
		Number of	Issued share
		shares in issue	capital
			HK$'000
	As at 1 January 2019	5,789,746,388	578,975
	New shares issued under exercise of share option	2,582,759	258
		──────────	──────
	As at 30 June 2019	5,792,329,147	579,233
	Scrip dividend issued - 2019 interim dividend	148,254,725	14,825
		──────────	──────
	As at 31 December 2019 and 1 January 2020	5,940,583,872	594,058
	Scrip dividend issued - 2019 second interim dividend	95,451,214	9,545
		──────────	──────
	As at 30 June 2020	6,036,035,086	603,603
		══════════	══════

17

15. ACCOUNTS PAYABLE

		30.6.2020	31.12.2019
		HK$'000	HK$'000
		(unaudited)	(audited)
Accounts payable to:
-	Clients	20,785,226	16,593,685
-	Brokers, dealers and clearing house	2,167,173	1,483,844
-	Others	1,076,547	1,029,690
		────────	─────────
		24,028,946	19,107,219
		════════	═════════

The majority of the accounts payable balances are repayable on demand except where certain accounts payable to clients represent margin deposits received from clients for their trading activities under normal course of business. Only the excess amounts over the required margin deposits stipulated are repayable on demand.

No ageing analysis is disclosed as in the opinion of the directors of the Company, the ageing analysis does not give additional value in view of the nature of these businesses.

The Group has a practice to satisfy all the requests for payments immediately within the credit period.

Except for the accounts payable to clients which bear interest at 0.001% as at 30 June 2020 (31 December 2019: 0.001%), all the accounts payable are non-interest bearing.

Accounts payable to clients include those payables placed in segregated accounts with authorised institutions of HK$17,864,004,000 (31 December 2019: HK$14,964,001,000), HKFE Clearing Corporation Limited, the SEHK Options Clearing House Limited and other futures dealers totalling HK$962,558,000 (31 December 2019: HK$1,170,453,000).

18

MANAGEMENT DISCUSSION AND ANALYSIS

In the first half of 2020, the outbreak of Covid-19 in the globe has sent the global economy in a free fall and given the financial market a rollercoaster ride, posing brutal challenges to investment bankers worldwide. As an open and export-oriented economy, Hong Kong and its financial market were inevitably caught in the downdraft.

Gratefully, Haitong International has mapped out its way and rolled out its Strategic Plan 3.0 ("Plan 3.0") starting from as early as 2018 to diversify income streams, defuse risk assets, build a team of professionals, enrich product structures and maintain profitability, stability and sustainability. As such, the Company has successfully positioned itself well to serve as an information, trading and capital intermediary in an all-round way. Under the direction of Plan 3.0, Haitong International prioritized risk control as the top item in its 2020 agenda. Earlier this year, our management took proactive initiative to keep leverage size and liquidity on a short leash and steered away from the global liquidity crunch rarely seen in a decade. The Company literally got a "pass" on this "stress test".

During the reporting period, the Company notched up a revenue of HKD3.525 billion and its fee-based business, a central part emphasized in the Plan 3.0, achieved an revenue of HKD1.196 billion, representing a year-on-year growth of 31%, and its share to the total revenue jumped from last year's 22% to 34%.

1. Leading IB services across the world

In the 1st half, Haitong International's investment banking business achieved a revenue of HKD465 million, representing a growth of 39% over 2019, with top ranking in a number of businesses. During the period, Haitong International completed 18 IPOs in Hong Kong, acting as a sponsor for 3 of which and ranking No.1 in terms of number of IPO deals underwritten; it also completed 21 equity financing deals, ranking No.2 in terms of number of deals; for DCM, it also ranked No.1 and No.3 in terms of number of bond deals and underwriting amount in the Asia ex-Japan G3 HY bond league.

Seeing the trend of repatriation of Chinese IPOs to Hong Kong as the primary listing place, the Company gears up to seize this chance to grow its business. During the period, the Company completed a stellar Chinese IPO, and more are in the pipeline and will come in the 2nd half. Haitong International has entrenched its leadership in the healthcare and property management sectors. During the period, the Company acted as the sponsor for 1 IPO and as the underwriter for 5 IPOs and will support more projects on the way of listing to gain a solid foothold in such segments. The Company is moving ahead to establish presence in the global arena in terms of investment banking businesses. During the period, it completed 1 IPO in the U.S. and 1 equity financing project in Singapore. There are also many more in the pipeline in emerging markets such as India which is expected to be completed in the 2nd half. Though staying on the top of the curve, our DCM team lives up to the commitment to promoting ESG and green finance. During the period, the Company has underwritten 3 green bonds amounting to USD 700 million. For mergers and acquisitions, the Company has been actively brazing new trails for product distribution and set up funds to boost fee-based income and enhance capability for active management. Meanwhile, a new credit capital market team has been formed to provide diversified financing solutions other than equity financing for clients with full-spectrum investment banking services.

2. Globe-spanning trading capability integration in the fast track

During the 1st half of this year, Haitong International rolled Prime Brokerage, Equity Research and Sale, Fixed Income Market Making, and Derivatives Trading into a single segment to provide a one-stop and diversified trading platform with greater synergies. With this integration, the multi-dimensional network interwoven with research, sales, information and counterparty layers enables clients to hunt for more investment opportunities. Clients can also get investment consultation, innovative trading offerings, more trading execution and investment

• financing solutions from the network. As the Company plays a good role of being an information, trading and capital intermediary, deals are now achieved in a customer-initiated manner.

During the reporting period, the 1-year-old prime brokerage business witnessed a burgeoning growth and client assets under management and the scale of margin trading and securities lending doubled. Boasting Haitong International's leadership and size of assets, the prime brokerage business successfully drew in a cluster of hedge funds and financial institutions to land on Haitong International's global trading platform to carry out block trades, derivatives hedging and product transactions such as equity-linked notes. For cash equity, the Company focused on strategic clients with research on stocks in Hong Kong, Mainland China, the U.S., Japan and India to heighten its trading capability. The equity trading turnover for the period was over HKD220 billion, representing

1. year-on-yeargrowth of 42%, pushing up the commission income drastically. For fixed income market-making, Haitong International is providing bilateral quotes of liquidity regarding interest and credit products for almost

19

800 institutions per day and offering clients bespoke risk-hedging and investment & financing solutions. For ETF market making, Haitong International provides market making for a trove of ETFs in the market including 4 most active Hang Seng index-related ETFs with a collective trading volume over HKD 330 billion, the market share of which makes up 41.9%. For derivatives, Haitong International launched a total of 1,714 CBBCs, representing a 22% increase over 2019 with turnover amounting to over HKD200 billion, making it the 5th place in the Hong Kong market. During the period, Haitong International was granted the Derivatives Provider of the Year -Excellence by Bloomberg Businessweek.

3. Effective global wealth management switchover

Asset Management is one of the centerpiece in the Plan 3.0. Haitong International has been kicking it up a notch to advocate the switchover of wealth management in a "two-wheel drive" approach. On one side, the Company leverages off its state-of-the-artfin-tech to facilitate development of e-trading platform for individual clients. On the other, the Company targets high-net worth clients and demands itself to evolve into a private wealth management institution for entrepreneurs.

As the plaque rattles the market in the 1st half, Haitong International saw it as much as a catalyst for its transformation. An optimized e-platform, better user experience and high-efficient onboarding procedure have allured more individual clients to turn to Haitong International's e-platform for trading. During the period, wealth management retail brokerage commission income reached HKD287 million, representing a year-on-year rise of 54%. Meanwhile, in the face of undulation in the market, the Company took a step forward to modify its asset structure and keep perilous assets in check. As at the end of the reporting period, the weighting of blue-chip shares held by the Company as collaterals for margin financing took up nearly 50%, reflecting a healthier status of customer assets.

For high-net-worth clients, Haitong International keeps optimizing its business models to provide more diversified, idiosyncratic, sublime and fit-to-need services and products. Since last year, the Company has been looking to catch up with the norms of private banking industry and inviting towering talents in the investment banking universe to join its crew. Building on its investment banking, trading and research strengths as well as synergetic effects, the Company hopes to offer entrepreneurs advantages in terms of investment banking, trading, research and products. The high-net-worth assets of the Company stood at over HKD100 billion as at the end of the period, which is expected to become a new growth engine for the Company.

4. Swelling global AUM

Asset management is another highlighted business in the Plan 3.0, serving as an important fee-based income stream. Haitong international has been endeavoring to shovel resources into asset management product research and proactively explore ways to distribute offerings and grow the AUM. In 2nd half of 2019, Haitong Asia High Yield Bond Fund was approved to be included as a northbound mutual fund in the Mainland-Hong Kong Mutual Recognition of Funds (MRF). The fund quickly gained traction among investors in the Mainland. Under a spate of impacts on the global asset management industry, Haitong International's AUM grew by 24% over previous year and amounted to HKD66.5 billion. In addition, the Company achieved HKD154 million in terms of fee-based income for asset management, representing a year-on-year growth of 44%.

To bring its ESG and impact investment strategy into full play, Haitong International ramped up to establish ESG-related ETFs which are expected to come on stream in the 2nd half. Haitong International acquits itself well with its outstanding brand and promising performance, and was recognized with a concatenation of accolades granted by reputed institutions including Asian Investor during the period.

5. Full-fledged global operating system and IT infrastructure

Haitong International constantly builds up its global comprehensive operational capacity and automatic operation relying on its central data base management system to achieve central management of data worldwide. Under the threat of Covid-19, Haitong International activated its BCP（Business Continuity Plan）for its headquarters and overseas offices at a pinch. A contingent of employees are teleworking but our middle office, IT and risk management divisions are tasked to complete a chain of operations such as trading, settlement, asset evaluation, risk monitoring in many global financial hubs. This brings great pressure and challenges to corresponding departments. Thanks to Company's strong global operating systems and IT powers, it is capable to weather the storm and operate stably with its BCP backup measures to enable its staff to telework in different time zones and locations.

20

This 1st half, the financial markets across the world was smacked hardly. Based on the risk models and predictions, Haitong International has planned ahead and readied itself to manage the market, credit and liquidity risks. A sound risk management structure has been built in compliance with regulatory standards laid down by international financial institutions and the Company's "prudent to conservative" risk appetite in tandem with its in-house rating system and risk-weighted asset (RWA) based on quantifying models. Earlier this year, Haitong International had the foresight to perform a stress test for the worst scenario brought by the plague compounded with the economic recession and proactively targeted to curb the gearing ratio and leverage size, and roll back from high-risk assets throughout the year. In this sense, disposal of, impairment to and provision for the perilous assets and projects will be carried out in the most prudent way. Haitong International is now residing at one of the lowest risk levels on record thanks to its prudent maneuver of full provision against risky projects.

Prospects

The likely cause is that the global economy will face the headwind in the 2nd half of 2020. It is uncertain how the Covid-19 situation will develop, which may impede kick-starting of many economies. A cascade of bankruptcies and corporate closedowns may cause asset quality to rot away and inflict damages to the stability of the global financial market. Most governments may take out new financial relief measures and central banks will keep their accommodative monetary policies.

Facing torrents of challenges such as global economic recession, the spreading Covid-19,Sino-U.S confrontation and undercurrents in Hong Kong, Haitong International will stick to its Plan 3.0. For strategic positioning of its businesses, the Company decides to stay true to the nature of financial service intermediary. Therefore, it will improve income structure, keep leverage size under control, strengthen risk control and set up a better, stable and sound commercial and profit-earning model to cope with sheer uncertainties in this global financial market. For constructing a middle and back office operating system, the Group insists on making its headway toward digitalization and redesigning the procedures for fin-tech business to provide financial infrastructure to meet regulatory requirements and cross-time-zone and cross-market demands and augment the development business-wise systems. The Company will invite more towering talents on board to form an international, quality, diversified and multifunctional investment banking team and move forward to become an omnipotent investment bank with international competitiveness from a quality-focused one.

The spreading Covid-19 serves as a warning shot, reminding us that the world as a whole shares the same destiny. Haitong International kicked off the ESG development plan in 2019 and put social responsibilities on its shoulder to promote responsible investment and impact investment. This year, the Company was granted the HR Asia Best Companies to Work for and HR Asia Most Caring Companies Award 2020 by HR Asia as recognition to its longstanding commitment to social responsibilities and caring the community. However, it will not stop paying heed to employees' well-being and welfare and paying attention on talent grooming and attraction; it will take its corporate governance structure to a higher level with professionalism, rule-baseddecision-making and supervisory regimes.

In this fateful stroke of time never seen in the past century, Haitong International still keeps going with its core values, namely "Courageous, Sincere and Innovative", and raises the bar of its core competitiveness such as global investment banking, trading, asset management and global operations in a treacherous world like this. We will keep on creating values for the community, our employees, clients and investors.

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

The Board is committed to maintaining a high standard of corporate governance practices within the Group. Throughout the six months ended 30 June 2020, the Company has fully complied with the code provisions set out in the Corporate Governance Code as contained in Appendix 14 of the Listing Rules.

COMPLIANCE WITH MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") set out in Appendix 10 of the Listing Rules as its code of conduct for securities transactions by the directors of the Company. Having made specific enquiry of all directors of the Company, all directors confirmed that they have complied with the required standard set out in the Model Code throughout the six months ended 30 June 2020.

21

AUDIT COMMITTEE

The Audit Committee of the Company (the "Audit Committee") has met with the external auditor of the Group, Messrs. Deloitte Touche Tohmatsu, to review the accounting principles and practices adopted by the Group and the unaudited consolidated results for the six months ended 30 June 2020 of the Group. The Audit Committee currently comprises 4 non-executive directors of the Company and 3 of whom, including the Chairman of the Audit Committee (the "Chairman"), are independent non-executive directors. The Chairman has the appropriate professional qualification and experience in financial matters.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's listed securities during the six months ended 30 June 2020 other than as an agent for clients of the Company or its subsidiaries.

PUBLICATION OF THE INTERIM RESULTS ANNOUNCEMENT AND INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2020 ON THE WEBSITES OF THE HONG KONG EXCHANGES AND CLEARING LIMITED AND THE COMPANY

This announcement of the interim results for the six months ended 30 June 2020 is published on the websites of the Hong Kong Exchanges and Clearing Limited at www.hkexnews.hk and the Company at www.htisec.com. The Interim Report for the six months ended 30 June 2020 of the Company containing the information required by the Listing Rules will be despatched to shareholders of the Company and published on the aforesaid websites in due course.

By order of the Board

Haitong International Securities Group Limited

LIN Yong

Deputy Chairman and Chief Executive Officer

Hong Kong, 21 August 2020

As at the date of this announcement, the Board comprises Mr. QU Qiuping (Chairman)*, Mr. LIN Yong (Deputy Chairman and Chief Executive Officer), Mr. LI Jianguo (Deputy Chairman), Mr. POON Mo Yiu, Mr. SUN Jianfeng, Mr. SUN Tong, Mr. CHENG Chi Ming Brian*, Mr. ZHANG Xinjun*, Mr. William CHAN*, Mr. TSUI Hing Chuen William**, Mr. LAU Wai Piu**, Mr. WEI Kuo-chiang**, Mr. WAN Kam To** and Ms. LIU Yan**.

• Non-executiveDirectors
• Independent Non-executive Directors

22