Financial Reporting - The company reported a mid-term financial data for the six months ending June 30, 2023, prepared in accordance with international financial reporting standards[3]. - The board of directors and supervisors confirmed the accuracy and completeness of the report, with no dissenting opinions from any members[3]. - The report includes a summary of key financial indicators and accounting data, which is detailed in section three of the report[2]. - The report was reviewed by Crowe (HK) CPA Limited in accordance with the Hong Kong Institute of Certified Public Accountants' standards[3]. - The company expects to adopt new and revised International Financial Reporting Standards that will not have a significant impact on the interim financial data[121]. - The company has not early adopted any new or revised International Financial Reporting Standards that have been issued but are not yet effective[122]. Financial Performance - Total revenue and other income for the first half of 2023 reached RMB 1,448,468,000, representing a 6.78% increase compared to RMB 1,356,497,000 in the same period of 2022[20]. - Pre-tax profit for the period was RMB 211,055,000, a significant recovery from a loss of RMB 493,175,000 in the previous year, marking a 142.80% increase[20]. - Net profit attributable to ordinary shareholders was RMB 193,196,000, compared to a loss of RMB 355,462,000 in the same period last year, reflecting a 154.35% improvement[20]. - Basic and diluted earnings per share were both RMB 0.0742, a turnaround from a loss of RMB 0.1365 per share in the previous year, indicating a 154.36% increase[20]. - The weighted average return on equity improved to 2.38%, up 6.27 percentage points from a negative 3.89% in the previous year[20]. - The company achieved total revenue and other income of RMB 1,448.47 million, representing a year-on-year growth of 6.78%[32]. - The net profit for the period was RMB 159.48 million, reflecting a significant increase of 142.68% compared to the same period in 2022[32]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 31,634,697,000, a 1.98% increase from RMB 31,021,248,000 at the end of 2022[20]. - Total liabilities increased to RMB 23,263,212,000, reflecting a 1.87% rise from RMB 22,835,492,000 at the end of 2022[20]. - The net asset value per share attributable to ordinary shareholders was RMB 3.15, up 2.61% from RMB 3.07 at the end of 2022[20]. - The debt-to-asset ratio decreased to 57.30%, down 0.19 percentage points from 57.49% at the end of 2022[20]. - As of June 30, 2023, the company's net capital was RMB 5,574.28 million, an increase of RMB 151.64 million from RMB 5,422.64 million at the end of 2022[29]. Cash Flow - Cash flows from operating activities showed a net outflow of RMB 722,239,000, a significant decline compared to an inflow of RMB 1,575,754,000 in the previous year, representing a 145.83% decrease[20]. - The net cash flow from operating activities for the reporting period was RMB -722.24 million, a decrease of RMB 2,297.99 million compared to RMB 1,575.75 million in the same period of 2022[54]. - The net cash flow from investing activities increased to RMB 390.91 million, up RMB 1,089.19 million from RMB -698.28 million in the same period of 2022[54]. - The net cash flow from financing activities was RMB 956.10 million, an increase of RMB 1,530.02 million compared to RMB -573.92 million in the same period of 2022[54]. Business Segments - The brokerage and wealth management business generated revenue of RMB 785.01 million, a decline of 11.97% year-on-year[33]. - The investment banking business generated revenue of RMB 95.85 million, a decrease of 10.06% compared to the same period in 2022[38]. - Investment management business achieved revenue of RMB 404.52 million, an increase of 64.61% year-on-year[42]. - The company’s proprietary trading business generated revenue of RMB 143.80 million, an increase of 59.60% compared to the same period in 2022[47]. Risk Management - The company actively implements comprehensive risk management standards, focusing on "full coverage, monitorable, measurable, analyzable, and responsive" risk management practices[69]. - The liquidity risk management department continuously monitors liquidity coverage ratio (LCR) and net stable funding ratio (NSFR), conducting stress tests at least biannually to assess liquidity risk levels[65]. - The company has established a risk preference indicator system covering market risk, credit risk, operational risk, and concentration risk, with specific control limits set for major risks[73]. - The company has developed a securities risk monitoring management platform that integrates various risk management functions, supporting risk information collection, identification, measurement, assessment, monitoring, and reporting[72]. Corporate Governance - The company is committed to maintaining high corporate governance standards, although it deviated from certain provisions of the Corporate Governance Code[86]. - The board of directors consists of 9 members, including 2 executive directors and 3 independent non-executive directors, ensuring a strong element of independence[89]. - The board held 10 meetings during the reporting period, reviewing 36 proposals[91]. - The company has adopted the Standard Code as a conduct guideline for securities trading by directors and supervisors, confirming compliance during the reporting period[93]. Employee and Training - As of June 30, 2023, the company had a total of 2,733 employees, with 2,269 in the parent company and 464 in subsidiaries[102]. - The company conducted 28 training sessions during the reporting period, including 13 offline and 15 online sessions, to enhance employee skills and compliance[102]. - The company has implemented a training needs assessment to develop its 2023 training plan, focusing on empowering employees at all levels[102]. Legal Matters - The company faced a lawsuit regarding the QH Leasing Phase I Asset Support Special Plan, with a court ruling requiring the company to compensate RMB 30 million for principal and loss of income[80]. - The company has ongoing litigation against Hongyuan Petrochemical and QH Leasing, with claims totaling approximately RMB 530 million[82].

Financial Performance - The company reported a mid-term performance for the six months ending June 30, 2023, with unaudited financial data [2]. - Total revenue and other income for the first half of 2023 reached RMB 1,448,468,000, representing a 6.78% increase compared to RMB 1,356,497,000 in the same period of 2022 [22]. - Pre-tax profit for the period was RMB 211,055,000, a significant turnaround from a loss of RMB 493,175,000 in the previous year, marking a 142.80% improvement [22]. - Net profit attributable to ordinary shareholders was RMB 193,196,000, compared to a loss of RMB 355,462,000 in the same period last year, reflecting a 154.35% increase [22]. - Basic and diluted earnings per share improved to RMB 0.0742 from a loss of RMB 0.1365, indicating a 154.36% increase [22]. - The company reported a total comprehensive income of RMB 185,729 thousand for the period, compared to a loss of RMB 398,171 thousand in the same period last year [112]. - The profit attributable to ordinary shareholders for the six months ended June 30, 2023, was RMB 193,196 thousand, a recovery from a loss of RMB 355,462 thousand in the same period of 2022 [137]. Financial Position - Total assets as of June 30, 2023, were RMB 31,634,697,000, up 1.98% from RMB 31,021,248,000 at the end of 2022 [22]. - Total liabilities increased to RMB 23,263,212,000, a 1.87% rise from RMB 22,835,492,000 at the end of 2022 [22]. - The asset-liability ratio decreased to 57.30%, down 0.19 percentage points from 57.49% at the end of 2022 [22]. - The net asset value per share attributable to ordinary shareholders increased to RMB 3.15, up 2.61% from RMB 3.07 [22]. - The total equity attributable to ordinary shareholders rose to RMB 8,216,575 thousand from RMB 7,997,126 thousand, an increase of about 2.7% [115]. - The company's total liabilities as of June 30, 2023, amounted to 2,999,999 thousand RMB in subordinated bonds [165]. Cash Flow - Cash flows from operating activities showed a net outflow of RMB 722,239,000, a decline of 145.83% compared to a net inflow of RMB 1,575,754,000 in the previous year [22]. - The net cash flow from operating activities for the reporting period was RMB -722.24 million, a decrease of RMB 2,297.99 million compared to RMB 1,575.75 million in the same period of 2022 [56]. - The net cash flow from investing activities increased to RMB 390.91 million, up RMB 1,089.19 million from RMB -698.28 million in the same period of 2022 [56]. - The net cash flow from financing activities was RMB 956.10 million, an increase of RMB 1,530.02 million compared to RMB -573.92 million in the same period of 2022 [56]. Shareholder Information - The company is listed on the Hong Kong Stock Exchange under the stock code 01476 [2]. - Major shareholder Huaron Comprehensive Investment holds 569,895,304 shares, representing approximately 21.88% of the total issued shares [98]. - The company has issued a total of 2,604,567,412 shares as of June 30, 2023, including 2,153,721,412 domestic shares and 450,846,000 H shares [97]. - The company’s major shareholders include Financial Street Capital, which holds 781,367,619 shares, representing approximately 30% of the total issued shares [98]. Risk Management - The company has implemented measures to manage credit risk, particularly in financing and investment activities [65]. - The company actively implements comprehensive risk management regulations, focusing on "full coverage, monitorable, measurable, analyzable, and responsive" requirements [71]. - The liquidity risk management department continuously monitors liquidity coverage ratio (LCR) and net stable funding ratio (NSFR), conducting stress tests at least biannually [67]. - The company has established a risk preference indicator system covering market risk, credit risk, operational risk, and concentration risk, with limits set based on development strategy and financial status [75]. - The company has developed a securities risk monitoring management platform that integrates various risk management functions, supporting risk information collection and reporting [74]. Corporate Governance - The report confirms that the board of directors guarantees the truthfulness, accuracy, and completeness of the report's content [5]. - The board of directors includes both executive and independent non-executive members, ensuring diverse oversight [3]. - The company is committed to high corporate governance standards, although it has deviated from certain provisions of the corporate governance code regarding board member rotation and separation of roles [88]. - The board consists of 9 members, including 2 executive directors and 3 independent non-executive directors, ensuring a strong element of independence [91]. Operational Highlights - The company sold 2,237 financial products during the reporting period, with a total sales volume of RMB 5,938.68 million [37]. - The company provided custody services for a total of 868 funds, with a combined scale of RMB 126,846 million in asset custody, fund services, and fundraising supervision [39]. - The company is actively expanding its research and investment capabilities to enhance its asset allocation strategies in response to market fluctuations [49]. - The company is focusing on risk control and project management, with 21 direct investment projects under management [48]. Employee and Training - The company has a total of 2,733 employees, with 2,269 in the parent company and 464 in subsidiaries [104]. - The company conducted 28 training sessions during the reporting period, including 13 offline and 15 online [104]. - The company has implemented a training plan based on employee needs assessment, focusing on online and offline communication empowerment [104]. - The company is committed to complying with national laws regarding employee rights and benefits, including social insurance and housing fund contributions [104].

Market Performance - In 2022, the major indices of the Chinese securities market experienced declines, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index falling by 15.13%, 25.85%, and 29.37% respectively[4]. - The company heavily relies on the economic and market conditions in China, which can suddenly change and significantly impact its business and financial performance[9]. - The overall competition in the securities industry is intensifying, with increasing industry concentration and a clear Matthew effect, putting significant pressure on small and medium-sized securities firms[147]. - As of 2022, the company remains positioned as a small to medium-sized securities firm within the industry, facing challenges amid increasing competition and market reforms[148]. Financial Performance - Total revenue for 2022 was RMB 2,725,455,000, a decrease of 28.74% compared to RMB 3,824,610,000 in 2021[33]. - The company reported a pre-tax loss of RMB 2,008,380,000 for 2022, representing a significant increase in losses of 633.66% from a profit of RMB 376,340,000 in 2021[33]. - Net loss attributable to ordinary shareholders for 2022 was RMB 1,286,372,000, a decrease of 560.66% compared to a profit of RMB 279,248,000 in 2021[33]. - The company's total revenue and other income for the reporting period was RMB 2,725.46 million, a decline of 28.74% compared to 2021[45]. - The group reported an operating loss of RMB 2,008.38 million in 2022, compared to a profit of RMB 376.34 million in 2021[114]. Risk Management - The company faces major risks including strategic planning risks due to macroeconomic changes, credit risks from debtors, and market risks from asset price fluctuations[9]. - The company has established internal control and risk management systems to mitigate various operational risks[9]. - The company has established a comprehensive risk management system covering market risk, liquidity risk, credit risk, operational risk, and reputation risk[141]. - The company conducts regular stress tests to predict potential losses under extreme conditions and issues timely risk alerts when control indicators are breached[135]. Corporate Governance and Compliance - The company is committed to compliance with legal and regulatory requirements to avoid legal and compliance risks[9]. - The company has been proactive in addressing environmental concerns through resource recycling and energy conservation initiatives[184]. - The company is committed to enhancing internal management and governance following regulatory scrutiny[187]. - The company received a warning from the China Securities Regulatory Commission due to governance risks, which has since been rectified by appointing a new chairman[187]. Organizational Structure and Strategy - The company plans to reform its organizational structure and management mechanisms to address existing issues and enhance operational efficiency[4]. - The company aims to enhance its regulatory standards and professional capabilities, focusing on key businesses, regions, and clients for breakthroughs[4]. - The company is committed to fostering a corporate culture that emphasizes stability, professionalism, service excellence, and teamwork[4]. - The company plans to enhance its wealth management transformation and diversify its brokerage services in 2023[47]. Investment and Asset Management - The company aims to enhance its asset management capabilities by expanding product lines and creating a professional asset management platform for investors[132]. - The company plans to focus on expanding its asset management and advisory services to improve revenue streams in the future[82]. - The investment banking business will continue to deepen reforms and expand service channels to better serve the real economy, leveraging existing customer bases[132]. - The company will continue to manage existing projects and enhance risk control in private equity investments[63]. Social Responsibility and Community Engagement - The company donated RMB 100,000 to a school in Yunnan Province for the construction of a multimedia classroom as part of its social responsibility initiatives[180]. - The company actively participated in community support during the pandemic, donating RMB 100,000 for essential supplies and support for frontline workers[182]. - The company has established a national-level investor education base and two provincial-level bases, aiming to enhance investor financial literacy and risk awareness[177]. - The company made charitable donations totaling approximately RMB 361,500 during the reporting period[185]. Human Resources and Talent Management - The company prioritizes talent strategy and has established a market-oriented employee incentive mechanism to attract and retain key personnel[154]. - The company has implemented a comprehensive human resources management system to protect employee rights and enhance their professional development[174]. - Over 2% of the company's headquarters staff have more than three years of relevant experience in risk management, providing a talent guarantee for effective risk management[145]. Legal and Regulatory Matters - The company is involved in multiple ongoing litigations, including a significant case where it was ordered to compensate RMB 60 million to various financial institutions[189]. - The company is currently appealing several court decisions related to financial compensations, indicating ongoing legal challenges[190]. - The arbitration case involving the Dongxu series of special account products resulted in a ruling requiring the company to pay RMB 1.17 billion in compensation to Industrial and Commercial Bank of China Beijing Branch[193]. Environmental Initiatives - The company has implemented internal recycling measures for consumables to reduce resource consumption and environmental impact[184]. - The company encourages energy-saving practices in offices, promoting reduced lighting and air conditioning usage[184].

Market Performance - In 2022, the major indices of the Chinese securities market experienced declines, with the Shanghai Composite Index, Shenzhen Component Index, and ChiNext Index falling by 15.13%, 25.85%, and 29.37% respectively[9]. - The overall GDP growth for China in 2022 was 3.00%, with the first industry growing by 4.10% and the second industry by 3.80%[63]. Financial Performance - Total revenue for 2022 was RMB 2,725,455, a decrease of 28.74% compared to RMB 3,824,610 in 2021[41]. - The company reported a pre-tax loss of RMB 2,008,380 for 2022, a significant decline of 633.66% from a profit of RMB 376,340 in 2021[41]. - Net loss attributable to ordinary shareholders was RMB 1,286,372 in 2022, down 560.66% from a profit of RMB 279,248 in 2021[41]. - The basic and diluted earnings per share for 2022 were both RMB (0.49), a decline of 545.45% from RMB 0.11 in 2021[41]. - The weighted average return on equity was (14.86%) in 2022, a decrease of 17.90 percentage points from 3.04% in 2021[41]. - The company's total fixed asset investment for the year was RMB 572,138 million, reflecting a growth of 5.10% year-on-year[63]. - The total operating loss for the group was RMB 2,008.38 million, compared to a profit of RMB 376.34 million in the previous year[138]. Risk Management - The company faces major risks including strategic planning risks due to macroeconomic changes, credit risks from counterparties, and market risks from asset price fluctuations[17]. - The company has established internal control and risk management systems to mitigate various operational risks[17]. - The company has implemented measures to enhance risk monitoring systems and improve the quality of risk assessments for new projects[154]. - The company has established a comprehensive risk management system, including specific management regulations for liquidity risk, market risk, credit risk, operational risk, and reputation risk[165]. - The company has set risk control limits based on its development strategy, operational goals, and financial status, including risk limits, business scale, value at risk, sensitivity indicators, and stop-loss measures[168]. Corporate Governance - The company did not declare a profit distribution for the year ending December 31, 2022[2]. - The board recommends no profit distribution for the year ending December 31, 2022, maintaining a focus on shareholder returns and financial stability[185]. - The company has a four-tier risk management system involving the board of directors, management, risk management departments, and business departments[166]. Organizational Structure and Strategy - The company plans to reform its organizational structure and optimize its management mechanisms to address existing issues[9]. - The company aims to enhance its regulatory standards and professional capabilities in key businesses and regions in 2023[9]. - The company is focusing on talent strategy and market-oriented employee incentive mechanisms to attract and retain key personnel[178]. - The company aims to enhance its operational management level and promote business integration in 2023, focusing on standardization, specialization, and efficiency[179]. Business Operations - The company has strengthened internal control management and optimized compliance and risk management systems in 2022[9]. - The company emphasizes the importance of internal collaboration and has implemented measures to control revenue fluctuations[9]. - The company is actively exploring business transformation and upgrading, particularly in wealth management, to enhance its market influence[176]. - The company is focused on diversifying its brokerage business and increasing market share through innovative business investments[66]. Compliance and Legal - The company has a risk control and monitoring system in place to address compliance and legal risks[17]. - Compliance risk will be managed through a robust compliance management system, including compliance reviews and training[161]. Investment and Acquisitions - The company has expanded its operations through acquisitions, including Shanghai Yongda Futures Brokerage Co.[28]. - The company completed 42 bond underwriting projects with a total underwriting amount of RMB 15,200 million, including 10 corporate bonds totaling RMB 5,760 million and 32 company bonds totaling RMB 9,440 million[74]. Customer and Market Engagement - New accounts opened totaled 262,100, bringing total customers to 3,496,900, an increase of 7.17% from the end of 2021[65]. - The company sold 2,885 financial products with a sales scale of RMB 7,794.29 million during the reporting period[68]. Human Resources - The company has established a comprehensive human resources management system to protect employee rights and enhance their professional development[199].

Financial Performance - The company reported a mid-term financial data for the six months ending June 30, 2022, prepared in accordance with international financial reporting standards[6]. - The total revenue for the reporting period was RMB 1.2 billion, representing a year-on-year increase of 15%[6]. - The net profit attributable to shareholders was RMB 300 million, reflecting a growth of 20% compared to the same period last year[6]. - Total revenue and other income for the first half of 2022 was RMB 1,356,497 thousand, a decrease of 18.91% compared to RMB 1,672,879 thousand in the same period of 2021[24]. - The pre-tax loss for the period was RMB (493,175) thousand, representing an increase of 2,984.08% from RMB (15,991) thousand in the previous year[24]. - The net loss attributable to ordinary shareholders for the period was RMB (355,462) thousand, an increase of 2,745.97% compared to RMB (12,490) thousand in the first half of 2021[24]. - The company reported total revenue and other income of RMB 1,356.50 million, a decrease of 18.91% compared to the same period in 2021[32]. - The company incurred a loss of RMB 373.70 million, representing a significant decline of 3,032.44% year-on-year[32]. - The company achieved total revenue and other income of RMB 1,356.50 million, a decrease of 18.91% compared to the same period in 2021[52]. - The net profit attributable to shareholders was RMB -355.46 million, a decline of 2,745.97% year-on-year[52]. User and Market Growth - User data indicated an increase in active accounts by 25%, reaching a total of 1.5 million users[6]. - The company plans to expand its market presence by entering three new provinces in the next fiscal year[6]. - The total number of new accounts opened was 192,300, bringing the total customer base to 3,454,900, an increase of 5.89% from the end of 2021[33]. Research and Development - The company has allocated RMB 100 million for research and development in new technologies over the next year[6]. - New product development includes the launch of a mobile application aimed at enhancing user engagement, expected to be released in Q4 2022[6]. Strategic Initiatives - A strategic acquisition of a fintech startup is in progress, which is anticipated to enhance the company's service offerings[6]. - The management provided a performance guidance for the next quarter, projecting a revenue growth of 10%[6]. - The company is actively exploring new project developments in the non-ferrous metals and new consumption sectors, following preliminary due diligence[45]. - The company aims to enhance its international business by expanding its global resource network and focusing on wealth management services[49]. Financial Position - The total assets as of June 30, 2022, amounted to RMB 37,447,821 thousand, reflecting a slight increase of 0.55% from RMB 37,243,056 thousand at the end of 2021[24]. - Total liabilities increased by 2.19% to RMB 28,123,174 thousand from RMB 27,519,396 thousand at the end of 2021[24]. - The net asset value per ordinary share was RMB 3.43, down from RMB 3.58, representing a decrease of 4.19%[24]. - The debt-to-asset ratio was 59.60%, an increase of 1.20 percentage points from 58.40% at the end of 2021[24]. - As of June 30, 2022, the company's net capital was RMB 6,977.40 million, a decrease of RMB 306.22 million from RMB 7,283.62 million at the end of 2021[29]. Risk Management - The company plans to strengthen its risk control capabilities and compliance awareness to support the sustainable development of the securities industry[50]. - The company has established a comprehensive risk management system covering liquidity risk, market risk, credit risk, operational risk, and reputation risk[76]. - The company actively monitors reputation risk events through a public opinion monitoring system and reports findings to management for decision-making[74]. - The company has implemented a dynamic capital monitoring system, risk authorization, regular risk reporting, and stress testing to identify and respond to significant risks[81]. Legal and Compliance - The board confirmed that there are no significant legal issues or disputes affecting the company’s operations[6]. - The company was ordered to compensate a total of RMB 60 million, RMB 130 million, and RMB 100 million to three financial institutions due to a previous lawsuit[83]. - The company has appealed against the court's decision regarding the compensation claims and is preparing for a retrial[84]. - The company is involved in a new borrowing dispute with Xin Fengxiang Financial Co., Ltd., with a total principal amount of RMB 375 million and interest of RMB 1.62 million claimed[85]. Corporate Governance - The company is committed to maintaining high corporate governance standards and has complied with all applicable governance codes during the reporting period[88]. - The company held one shareholders' meeting during the reporting period[90]. - The board consists of 8 members, including 1 executive director and 7 non-executive directors, with 6 meetings held during the reporting period[91]. - The supervisory board has 3 members and convened 1 meeting, reviewing 7 proposals during the reporting period[92]. Employee and Training - As of June 30, 2022, the company had a total of 2,992 employees, with 2,448 in the parent company and 544 in subsidiaries[103]. - A total of 19 online training sessions were conducted during the reporting period, focusing on various business lines and compliance risk management[103]. - The company has established a training plan for 2022 based on employee feedback, promoting a digital training model[103].

Market Performance - In 2021, the Shanghai Composite Index increased by 4.80%, while the Shenzhen Component Index rose by 2.67%, and the ChiNext Index saw a notable increase of 12.02%[7]. Business Strategy and Development - The company aims to accelerate its wealth management transformation and enhance compliance and risk management for high-quality business development in 2022[7]. - The company plans to strengthen its financial technology capabilities and promote a comprehensive online and offline integration model for business growth[7]. - The company acknowledges the need for ongoing investment in technology and talent to maintain competitive advantages in the market[7]. - The company aims to expand its market presence through strategic investments and acquisitions[36]. - The company is focused on asset management, investment consulting, and financial advisory services[36]. - The company aims to enhance its wealth management business as a key growth driver, focusing on digital transformation and user experience improvements[156]. - The company plans to focus on QDII business and international capital intermediary services as key directions for future growth[91]. - The company will continue to optimize its investment strategies to adapt to market changes and enhance research capabilities[89]. Financial Performance - Total revenue and other income for 2021 reached RMB 3,824.61 million, an increase of 3.91% compared to RMB 3,680.84 million in 2020[44]. - Pre-tax profit decreased by 37.12% to RMB 376.34 million from RMB 598.54 million in 2020[44]. - Net profit attributable to ordinary shareholders was RMB 279.25 million, down 41.10% from RMB 474.09 million in 2020[44]. - Total assets as of December 31, 2021, amounted to RMB 37,243.06 million, reflecting a 10.86% increase from RMB 33,596.03 million in 2020[45]. - Total liabilities increased by 13.90% to RMB 27,519.40 million from RMB 24,160.27 million in 2020[45]. - The company's net cash generated from operating activities was RMB 779.93 million, down 36.08% from RMB 1,220.13 million in 2020[44]. - The company's asset-liability ratio increased to 58.40% from 57.50% in 2020, an increase of 0.90 percentage points[45]. - The company's weighted average return on equity decreased to 3.04% in 2021 from 4.80% in 2020, a decline of 1.76 percentage points[44]. Risk Management - The company faces significant risks from macroeconomic changes and capital market fluctuations, which could adversely impact its business and financial performance[16]. - The company has established internal control and risk management systems to mitigate various operational risks[16]. - The company has a strong focus on promoting a culture of compliance and risk control within its operations[7]. - The company has established a comprehensive risk management system, focusing on liquidity, market, credit, operational, and reputational risks[164]. - The liquidity risk management includes continuous monitoring of liquidity coverage ratio (LCR) and net stable funding ratio (NSFR), with stress tests conducted at least biannually[160]. - Market risk management involves setting overall limits for proprietary trading and implementing measures such as daily monitoring and stress testing[159]. - Credit risk is managed through an internal credit rating system and due diligence on financing projects to ensure appropriate credit limits[157]. - The company has developed a reputation risk management system to monitor and respond to potential negative perceptions from stakeholders[163]. Compliance and Governance - The company emphasizes the importance of internal governance and compliance systems to support stable business operations[7]. - The company has established a four-level risk management system, including the board of directors, management, risk management functions, and business departments, ensuring comprehensive risk management responsibilities across all subsidiaries[166]. - The company invested approximately RMB 65.14 million in compliance and risk management information systems, enhancing operational support capabilities[171]. - The company has established comprehensive risk management systems for new business innovations, ensuring compliance and risk control[155]. Subsidiaries and Ownership - The company is 100% owned by its major shareholders, including Tianfeng Securities and other subsidiaries[20]. - The company holds a 58.62% stake in Xinhua Fund Management Co., Ltd.[14]. - The company has a 95.10% ownership in Hengtai Futures Co., Ltd.[20]. - The company has established multiple subsidiaries, including Hengtai Pioneer Investment and Hengtai Capital Investment[29]. Employee and Talent Management - The company will continue to optimize its talent mechanism and enhance talent competitiveness to align with its strategic development goals[7]. - The company emphasizes a talent strategy and market-oriented employee incentive mechanisms to enhance its competitive edge in talent acquisition[179]. - The management team possesses extensive industry experience, ensuring timely responses to regulatory requirements and market competition[174]. Future Outlook - In 2022, the company plans to optimize its brokerage services and enhance its mobile client features to increase market share in the securities brokerage sector[156]. - The investment banking division will prioritize compliance and risk management while accelerating project approvals and expanding into innovative bond projects[156]. - The asset management business will focus on fixed income products and develop "fixed income+" and mixed new products to continuously create positive returns for clients[181]. - The company plans to strengthen compliance and risk management while accelerating business integration and transformation to achieve high-quality development[181].