Financial Performance - For the third quarter of 2022, the total operating revenue was RMB 217,773,447.86, representing a decrease of 65.97% compared to the same period last year[9] - The net profit attributable to shareholders of the listed company was RMB -6,418,355.07, a decline of 194.67% year-on-year[9] - The basic earnings per share were -0.0068, reflecting a decrease of 190.67% compared to the previous year[9] - The company reported a decrease of 31.40% in total operating revenue for the year-to-date period, totaling RMB 972,517,522.02[9] - The net profit attributable to shareholders for the year-to-date period was RMB 28,836,569.26, down 44.63% year-on-year[9] - Total operating revenue for the current period was ¥972,517,522.02, a decrease of 31.4% compared to ¥1,417,646,833.24 in the previous period[50] - Net profit for the current period was ¥28,836,569.26, down 44.7% from ¥52,081,137.81 in the previous period[50] - Operating profit decreased to ¥36,815,971.16, a decline of 50.3% from ¥74,141,973.38 in the previous period[50] - Total comprehensive income for the current period was ¥42,603,462.04, compared to ¥50,911,050.81 in the previous period[52] Assets and Liabilities - The total assets as of the end of the reporting period were RMB 9,234,250,292.45, an increase of 14.24% from the end of the previous year[9] - The equity attributable to shareholders of the listed company was RMB 1,886,124,826.92, up 12.12% from the previous year[9] - The company's total liabilities reached CNY 7,348,125,465.53 as of September 30, 2022, compared to CNY 6,400,934,068.24 at the beginning of the year, indicating an increase of about 14.8%[48] - The equity attributable to the owners of the parent company was CNY 1,886,124,826.92 as of September 30, 2022, up from CNY 1,682,167,006.68 at the start of the year, reflecting a growth of approximately 12.1%[48] Cash Flow - The net cash flow from operating activities was RMB 482,590,395.06, down 59.07% year-on-year[9] - Cash flow from operating activities was ¥482,590,395.06, a decrease of 59.0% compared to ¥1,178,931,426.11 in the previous period[54] - Cash inflow from investment activities totaled approximately $4.96 billion, a significant increase from $2.53 billion in the previous period, reflecting a growth of about 96%[56] - Net cash flow from investment activities was a loss of approximately $2.71 million, an improvement compared to a loss of $153.19 million in the prior period[56] - Cash inflow from financing activities amounted to approximately $232.75 million, compared to $194.56 million in the previous period, indicating an increase of about 20%[56] - Net cash flow from financing activities was approximately $144.90 million, up from $63.62 million in the prior period, showing a growth of around 128%[56] - The net increase in cash and cash equivalents for the period was approximately $643.42 million, down from $1.08 billion in the prior period[56] - The ending balance of cash and cash equivalents was approximately $4.75 billion, compared to $3.94 billion at the end of the previous period, reflecting an increase of about 21%[56] Other Financial Metrics - Non-recurring gains and losses totaled RMB 86,003.98 for the reporting period[11] - Investment income decreased by 90.29% to ¥1,733,032.45, primarily due to significant market volatility affecting financial assets[17] - Other business income declined by 34.71% to ¥737,677,124.81, mainly due to a decrease in basis trading scale of a subsidiary[20] - The company reported a foreign exchange gain of ¥4,917,749.05, a 749.18% increase, influenced by currency fluctuations[20] - Other comprehensive income improved by 186.41% to ¥6,381,724.33, mainly due to increased foreign currency translation differences[17] - The company’s lease liabilities increased by 36.01% to ¥33,773,039.45, resulting from new or renewed office lease contracts[17] Shareholder Information - The company listed on the Shenzhen Stock Exchange on August 5, 2022, marking a significant milestone in its corporate development[42] - The company has a total of 10 major shareholders, with the largest being Hong Kong Central Clearing Limited, holding 249,700,000 shares[39]

Financial Performance - Holly Futures reported a total revenue of RMB 500 million for the first half of 2022, representing a 15% increase year-over-year[21]. - The company achieved a net profit of RMB 80 million, which is a 20% increase compared to the same period last year[21]. - Operating revenue for the first half of 2022 was RMB 754.74 million, a decrease of 3% compared to RMB 777.78 million in the same period of 2021[42]. - Total profit for the first half of 2022 was RMB 46.03 million, down 24% from RMB 60.43 million in the same period of 2021[42]. - Net profit attributable to shareholders for the first half of 2022 was RMB 35.25 million, a decrease of 22% from RMB 45.30 million in the same period of 2021[42]. - The company's operating revenue for the first half of 2022 declined by 3% year-on-year, with a market share of 0.64% in transaction volume[52]. - For the six months ended June 30, 2022, the company achieved total operating revenue of RMB 755 million, a year-on-year decrease of 3%[82]. - The net profit attributable to shareholders for the same period was RMB 35.25 million, down 22% year-on-year, with earnings per share at RMB 0.0389[82]. Client and Market Growth - User data indicates an increase in active clients by 25%, reaching a total of 150,000 clients as of June 30, 2022[21]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% growth in that region by the end of 2023[21]. - The company has set a performance guidance of RMB 1 billion in revenue for the full year 2022, reflecting a 10% growth target[21]. - The average daily customer equity increased by 32.71% year-on-year, indicating strong customer growth[52]. - The company’s brokerage business generated RMB 1.42 billion in commission income, a 5% increase compared to the same period last year[55]. Investment and Development - Holly Futures is investing RMB 50 million in research and development for new trading technologies aimed at enhancing user experience[21]. - New product offerings include a suite of digital trading tools expected to launch in Q4 2022, aimed at attracting younger investors[21]. - The company is exploring potential acquisitions to enhance its service offerings and market share, with a focus on fintech startups[21]. - The company aims to explore the development of futures derivatives investment banking services to expand its service offerings[65]. - The asset management business is set to expand with the introduction of low-risk, stable-return products, targeting partnerships with commercial banks and other financial institutions to secure stable funding sources[72]. Financial Position and Assets - Total assets as of June 30, 2022, were RMB 1,236.61 million, representing a 53% increase from RMB 808.31 million at the end of 2021[42]. - Total liabilities as of June 30, 2022, were RMB 1,064.30 million, a 66% increase from RMB 640.09 million at the end of 2021[42]. - The company's asset-liability ratio increased to 27% as of June 30, 2022, compared to 22% at the end of 2021[42]. - The company's total equity attributable to shareholders was RMB 172.31 million, a slight increase of 2% from RMB 168.22 million at the end of 2021[42]. - As of June 30, 2022, the total assets of the company amounted to RMB 12.366 billion, representing a 53% increase compared to the beginning of the year[52]. Risk Management and Compliance - The company is focusing on risk management and internal control to mitigate various risks, including market and credit risks[116]. - The company has established a strict investor suitability management system to mitigate credit risk, ensuring thorough assessment of new clients' identities and creditworthiness[126]. - The company has maintained an "A Class A" regulatory rating from the China Securities Regulatory Commission for thirteen consecutive years, reflecting its commitment to risk management[129]. - The company has strengthened internal control systems to prevent operational, compliance, market, and credit risks, ensuring the safety and integrity of client and company assets[130]. - The company emphasizes the importance of a comprehensive risk management system that covers all business processes and involves all employees in decision-making, execution, monitoring, and evaluation[131]. Corporate Governance - The company has adhered to all provisions of the Corporate Governance Code during the reporting period[139]. - The company’s governance structure ensures a separation of powers among the shareholders' meeting, board of directors, supervisory board, and management[138]. - The audit committee, established according to the Stock Exchange's regulations, consists of three members, including two independent non-executive directors[145]. - The company has not made any amendments to its articles of association during the reporting period[149]. Shareholder Information - Suhao Holdings holds approximately 47.59% of the company's shares, making it the controlling shareholder[158]. - Hongye Shares, a major shareholder, holds about 16.31% of the company's shares[159]. - The total number of issued shares as of June 30, 2022, is 907,000,000[169]. - The group provided financial services to its controlling shareholder, Suhao Holdings, with a transaction amount of RMB 208,250 for the first half of 2022, against an annual cap of RMB 2,600,000[162]. Challenges and Market Conditions - The company faced significant challenges due to complex international conditions and domestic pandemic outbreaks, impacting overall business performance[51]. - The company faced significant challenges in its main business and financial asset investment due to a complex international environment and domestic pandemic outbreaks, impacting revenue and asset values[122].

Financial Performance - In 2021, the company achieved a revenue growth of 5.03% year-on-year, with net profit increasing by 20.94%[9] - The company reported a total revenue of RMB 1.5 billion for the fiscal year ending December 31, 2021, representing a year-over-year increase of 15%[20] - Operating revenue for 2021 reached RMB 1.63986 billion, an increase of RMB 78.49 million or 5.03% compared to 2020[67] - Total profit for 2021 was RMB 109.21 million, up RMB 16.51 million or 17.81% from the previous year[67] - Net profit attributable to shareholders was RMB 80.21 million, reflecting a growth of RMB 13.89 million or 20.94% year-over-year[67] - The company's net capital as of December 31, 2021, was RMB 709 million, a decrease of RMB 270 million from the end of 2020[80] - The company achieved a basic earnings per share of RMB 0.0884, an increase from RMB 0.0731 in 2020[67] - The company’s net assets per share were RMB 1.85, up from RMB 1.82 in the previous year[68] - The weighted average return on equity for 2021 was 4.84%, an increase from 4.07% in 2020[63] Client Engagement and Growth - The agency's transaction volume rose by 41.42% compared to the previous year, while the average daily client equity grew by 35.74%[9] - The year-end client equity increased by 38.31% year-on-year, reflecting strong client engagement and retention[9] - User data indicated a growth in active clients by 20%, reaching a total of 500,000 clients by the end of the reporting period[20] - The company has implemented new strategies to enhance customer engagement, resulting in a 35% increase in client retention rates[20] - The company's client equity increased by 38.31% year-on-year, reaching RMB 5.93 billion at the end of 2021, up from RMB 4.29 billion in 2020[108] Business Expansion and Strategy - The company is actively pursuing an A-share IPO, which has been officially accepted by the regulatory authority[9] - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in regional revenue by 2023[20] - A strategic acquisition of a local competitor is expected to enhance the company's service offerings and increase client base by 15%[20] - The company is focusing on high-quality development and has implemented a "14th Five-Year" development strategy plan[9] - The company has expanded its asset management business through proactive management and institutional collaboration[9] Risk Management - The company is dedicated to risk management and has accumulated effective practices in response to challenges faced during the year[10] - The company is focused on risk control by strengthening pre-emptive system construction and personnel training[185] - The company has implemented effective measures to address various risk factors, including market risk and credit risk, ensuring safe and efficient operations[193] - The company's risk management relies on strict adherence to internal control systems, which may not fully predict future risk exposures during business innovation[194] Awards and Recognition - The company was recognized with over 30 awards, including "Best Futures Company in China" and "Pioneer Enterprise in Jiangsu Province"[9] Financial Metrics and Assets - The total assets of the company reached RMB 5 billion, with a year-over-year growth of 18%[20] - The total assets as of December 31, 2021, amounted to RMB 808.31 million, representing a growth of RMB 173.39 million or 27.31% from 2020[68] - Total liabilities increased to RMB 640.09 million, up RMB 169.84 million or 36.12% year-over-year[68] - The debt-to-asset ratio was 22% as of December 31, 2021, compared to 20% in 2020[68] Employee Welfare and Satisfaction - The company is committed to enhancing employee income and welfare, aiming to improve staff satisfaction and happiness[9] - Employee compensation increased to RMB 167.04 million, up RMB 12.55 million (8.12%) as a result of prior pandemic-related reductions in social insurance[150] Market Trends and Economic Indicators - The national industrial added value increased by 9.6% year-on-year, with high-tech manufacturing and equipment manufacturing growing by 18.2% and 12.9% respectively[87] - The total retail sales of consumer goods reached 4,408.23 billion yuan, growing by 12.5% year-on-year, with online retail sales increasing by 14.1%[88] - The total import and export value of goods was 39,100.9 billion yuan, an increase of 21.4% year-on-year, with exports growing by 21.2% and imports by 21.5%[90] Innovations and Product Development - New product development efforts have led to the launch of three innovative financial products, contributing to a 10% increase in market share[20] - The company expanded its "insurance + futures" projects to 17 projects across 9 provinces, providing price risk management services for agricultural products valued at approximately RMB 400 million[112] - The company launched 419 new fund products, achieving a total fund sales scale of RMB 180 million, ranking among the industry leaders[184]

E HOLLY FUTURES (於中華人民共和國註冊成立的股份有限公司・ 中文公司名稱為弘業期貸股份有限公司・在香港以 Holly Futures 名義開展業務) 股份代號：3678 | --- | --- | --- | --- | |-------|-------|-------|-------| | | | | | | | | | | | | | | | | | 期 苹 | p) | | | | | | | | | | | | 弘業期貨股份有限公司 目錄 目錄 2 第一節 5 9 第二節 第三節 釋義 公司資料 財務摘要 12 第四節 管理層討論及分析 28 30 第五節 第六節 企業管治 其他數據 40 第七節 審閱報告及中期財務報告 1 2021年中期報告 第一節 釋義 弘業期貨股份有限公司 釋義 | --- | --- | --- | |----------------------------------------------------------|-------|---------------------------------------------------------------- ...

[Important Notice](index=3&type=section&id=Item%201.%20Important%20Notice) This section confirms the report's accuracy and completeness, along with the unqualified audit opinion on the 2020 financial statements - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of this annual report, assuming corresponding legal responsibilities[5](index=5&type=chunk) - The company's 2020 financial report was audited by KPMG Huazhen LLP, which issued an unqualified audit opinion[5](index=5&type=chunk) [Chairman's Statement](index=4&type=section&id=Item%202.%20Chairman%27s%20Statement) Chairman Zhou Yong reviews the challenging 2020 global economy and highlights the company's strong performance and key operational achievements - Chairman Zhou Yong reviewed the significant volatility of the global macroeconomy in 2020 due to the pandemic, noting China's leading recovery as the only major economy to achieve positive annual growth[7](index=7&type=chunk)[8](index=8&type=chunk) - Despite challenges, the company achieved favorable results in 2020, securing a 'dual victory' in pandemic control and business operations, with key operating indicators reaching new highs[9](index=9&type=chunk)[10](index=10&type=chunk) Key Operating Indicator Growth in 2020 | Indicator | Year-on-Year Growth | | :--- | :--- | | Operating Revenue | 141.98% | | Brokerage Turnover | 88.43% | | Average Daily Client Equity | 47.40% | | Period-End Client Equity | 61.22% | [Definitions](index=5&type=section&id=Item%203.%20Definitions) This section provides definitions for specific terms used throughout the report, covering company entities, shareholders, and financial indicators - This section defines specific terms used in the report, including company entities, shareholders, subsidiaries, regulatory bodies, business terms, and financial indicators, providing a foundation for understanding the report content[13](index=13&type=chunk)[14](index=14&type=chunk)[19](index=19&type=chunk) [Company Information](index=11&type=section&id=Item%204.%20Company%20Information) This section provides comprehensive details about the company, including its profile, historical development, organizational structure, and network of subsidiaries and branches [Company Profile](index=11&type=section&id=Item%204.I.%20Company%20Profile) This section provides core company information, including its name, registered capital, business qualifications, and key personnel - The company's full Chinese name is Hongye Futures Co., Ltd., with H-share stock code **3678**[26](index=26&type=chunk)[32](index=32&type=chunk) - The company's registered capital is **RMB 907 million**, holding multiple business qualifications including commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, fund sales, and stock option trading participant status[31](index=31&type=chunk) [Historical Development](index=15&type=section&id=Item%204.II.%20Historical%20Development) This section details the company's evolution from its 1995 establishment, including name changes, equity shifts, capital increases, and its 2015 listing on the Hong Kong Stock Exchange - The company's predecessor, Jiangsu Jinling Futures Brokerage Co., Ltd., was established on July 31, 1995, with an initial registered capital of **RMB 10 million**[34](index=34&type=chunk) - The company was listed on the Main Board of the Hong Kong Stock Exchange on December 30, 2015, with stock code **03678**, increasing its total share capital to **907 million shares** post-listing[43](index=43&type=chunk) [Organizational Structure](index=18&type=section&id=Item%204.III.%20Organizational%20Structure) This section visually presents the company's organizational structure, illustrating the hierarchical relationships from the Shareholders' Meeting to the General Manager's Office and its various departments - The company's governance structure is topped by the Shareholders' Meeting, with a Board of Directors and a Supervisory Board; the Board has four specialized committees, and the General Manager's Office oversees various functional and business departments, branches, and the subsidiary Hongye Capital[45](index=45&type=chunk) [Subsidiaries Overview](index=19&type=section&id=Item%204.IV.%20Subsidiaries%20Overview) This section introduces the company's three main subsidiaries: Hongye Capital, Hongye International Financial, and Hongye International Asset Management, detailing their registration, main businesses, and the company's equity stake Subsidiaries Overview | Company Name | Main Business | Place of Establishment | Registered Capital | Shareholding Percentage | | :--- | :--- | :--- | :--- | :--- | | Hongye Capital | Basis Trading, Cooperative Hedging, Warehouse Receipt Services, OTC Derivatives, Market Making | China | RMB 240 million | 100% | | Hongye International Financial | Futures Trading, Securities Trading | Hong Kong | HKD 190 million | 100% | | Hongye International Asset Management | Asset Management, Securities Investment Consulting | Hong Kong | HKD 20 million | 100% | [Branch Network Distribution](index=20&type=section&id=Item%204.V.%20Branch%20Network%20Distribution) As of the reporting period end, the company operates 45 domestic branches, including 39 business departments and 6 sub-branches, with detailed listings of their locations and establishment dates - As of the end of 2020, the company had **39 business departments** and **6 sub-branches** across China, primarily located in municipalities, Jiangsu Province, and other economically developed regions[50](index=50&type=chunk) [Financial Highlights](index=23&type=section&id=Item%205.%20Financial%20Highlights) This section provides a concise overview of the company's key financial performance and position, highlighting significant changes in revenue, profit, assets, and cash flow [Key Financial Data and Indicators](index=23&type=section&id=Item%205.I.%20Key%20Financial%20Data%20and%20Indicators) In 2020, the company achieved strong performance, with operating revenue surging by 141.98% to RMB 1.561 billion and net profit attributable to parent increasing by 211.80% to RMB 66.32 million, driven by a 61.22% rise in client equity 2020 Key Financial Indicators | Indicator (RMB 10,000) | 2020 | 2019 | Increase | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 156,138 | 64,524 | 141.98% | | **Total Profit** | 9,270 | 4,158 | 122.94% | | **Net Profit Attributable to Parent** | 6,632 | 2,127 | 211.80% | | **Net Cash Inflow from Operating Activities** | 80,307 | 11,192 | 617.54% | | **Basic Earnings Per Share (RMB/share)** | 0.0731 | 0.0234 | - | | **Total Assets** | 634,916 | 451,077 | 40.76% | | **Client Equity Payable** | 428,784 | 265,955 | 61.22% | | **Equity Attributable to Parent** | 164,667 | 159,897 | 2.98% | [Net Capital and Risk Control Indicators](index=25&type=section&id=Item%205.II.%20Net%20Capital%20and%20Risk%20Control%20Indicators) As of year-end 2020, the company's net capital was RMB 962 million, and despite a decrease, all risk control indicators significantly exceeded regulatory standards, demonstrating robust risk resilience and stable operations Net Capital and Key Risk Control Indicators (As of December 31, 2020) | Indicator | Value | Regulatory Standard | | :--- | :--- | :--- | | Net Capital (RMB million) | 962 | ≥ 30 | | Net Capital / Sum of Risk Capital Reserves | 344% | ≥ 100% | | Net Capital / Net Assets | 58% | ≥ 20% | | Liquid Assets / Liquid Liabilities | 453% | ≥ 100% | | Total Liabilities / Net Assets | 20% | ≤ 150% | [Management Discussion and Analysis](index=26&type=section&id=Item%206.%20Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the company's operational performance, financial condition, and future strategic outlook, alongside an analysis of industry trends and risk management [Industry Review](index=26&type=section&id=Item%206.I.%20Industry%20Review) In 2020, China's economy achieved positive growth amidst the global pandemic, driving the futures industry to record high trading volumes and values, with significant growth in brokerage and asset management businesses - In 2020, China's futures market achieved record high trading volume and value, reaching **6.153 billion lots** and **RMB 437.53 trillion**, respectively, representing year-on-year increases of **55.29%** and **50.56%**[78](index=78&type=chunk) - Chinese futures products performed exceptionally well in the global market, particularly in the agricultural sector, dominating the top ten in global trading volume[79](index=79&type=chunk) - As of the end of 2020, total assets of futures companies reached **RMB 984.825 billion**, with brokerage business revenue increasing by **49.13%** year-on-year and asset management business scale growing by **52.57%** year-on-year, indicating significant strengthening of industry capital and business scale[81](index=81&type=chunk) [Business Review](index=31&type=section&id=Item%206.II.%20Business%20Review) In 2020, the company achieved a "dual victory" in operations despite the pandemic, with operating revenue increasing by 141.98% and net profit attributable to parent by 211.80%, driven by strong performance across all four main business segments 2020 Key Company Performance Indicators | Indicator | 2020 | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | RMB 1.561 billion | 141.98% | | Net Profit Attributable to Parent | RMB 66 million | 211.80% | | Period-End Client Equity | RMB 4.288 billion | 61.22% | | Asset Management Scale | RMB 22.131 billion | 96% | [Futures Brokerage Business](index=32&type=section&id=Item%206.II.1.%20Futures%20Brokerage%20Business) The futures brokerage business demonstrated steady performance in 2020, with client equity increasing by 61.22% to RMB 4.288 billion and brokerage turnover growing by 93.74%, leading to a 24.84% rise in fee and interest income despite lower commission rates Futures Brokerage Business Core Data (2020 vs 2019) | Indicator | End of 2020 | End of 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Client Equity | RMB 4.288 billion | RMB 2.660 billion | +61.22% | | Fee and Interest Income | RMB 279 million | RMB 223 million | +24.84% | | Brokerage Turnover | RMB 6.162898 trillion | - | - | | Brokerage Volume | 95.7498 million lots | 61.1966 million lots | +56.46% | [Asset Management Business](index=32&type=section&id=Item%206.II.2.%20Asset%20Management%20Business) The company's asset management business achieved significant growth in 2020, with its scale increasing by 96% to RMB 22.131 billion, ranking among the top three in the industry, and business revenue surging by over 133% - As of the end of 2020, the company's asset management scale reached **RMB 22.131 billion**, a **96%** year-on-year increase, ranking among the top three in the industry[90](index=90&type=chunk) - Asset management business generated fee income of **RMB 13.42 million**, a **133.80%** year-on-year increase (original increase of RMB 7.68 million)[90](index=90&type=chunk)[108](index=108&type=chunk) [Commodity Trading and Risk Management Business](index=33&type=section&id=Item%206.II.3.%20Commodity%20Trading%20and%20Risk%20Management%20Business) Risk management subsidiary Hongye Capital experienced rapid business growth, achieving RMB 1.198 billion in operating revenue, a 2.41-fold increase year-on-year, with market-making contributing 64.91% of profit, while actively promoting "insurance + futures" projects - Hongye Capital achieved full-year operating revenue of **RMB 1.198 billion**, a **2.41-fold** year-on-year increase, with market-making business contributing **64.91%** of profit[92](index=92&type=chunk) - The company steadily advanced its "insurance + futures" projects, providing price risk services for agricultural products in multiple national-level poverty-stricken counties, with the natural rubber project achieving a payout ratio as high as **143%**[93](index=93&type=chunk) [Financial Asset Investment](index=34&type=section&id=Item%206.II.4.%20Financial%20Asset%20Investment) To optimize fund operations, the group engaged in multi-channel financial asset investments, resulting in a 144.18% increase in financial asset disposal and dividend income to RMB 39.24 million by the end of 2020, primarily due to higher gains from trading financial assets - As of the end of 2020, the group's financial asset disposal and dividend income was **RMB 39.24 million**, a **144.18%** year-on-year increase[94](index=94&type=chunk) [Financial Statement Analysis](index=34&type=section&id=Item%206.III.%20Financial%20Statement%20Analysis) This section provides an in-depth analysis of the company's financial position, highlighting significant improvements in profitability, asset expansion, and cash flow, while maintaining a stable asset structure [Profitability and Asset Structure](index=34&type=section&id=Item%206.III.i.%20Profitability%20and%20Asset%20Structure) In 2020, the company's profitability significantly improved, with net profit attributable to parent increasing by 211.80% and return on equity rising to 4.07%, while total assets grew by 40.76% driven by client equity, and the asset-liability ratio (excluding client equity) increased to 20% - In 2020, the group achieved operating revenue of **RMB 1.561 billion**, a **141.98%** year-on-year increase; net profit attributable to parent was **RMB 66 million**, a **211.80%** year-on-year increase[94](index=94&type=chunk) - As of the end of 2020, total assets were **RMB 6.349 billion**, a **40.76%** year-on-year increase; total liabilities were **RMB 4.702 billion**, a **61.50%** year-on-year increase; the asset-liability ratio (excluding client equity) was **20%**, up **6 percentage points** from the previous year[95](index=95&type=chunk)[97](index=97&type=chunk) [Income Statement Analysis](index=36&type=section&id=Item%206.III.ii.%20Income%20Statement%20Analysis) The 2020 net profit surge of 211.80% was primarily driven by substantial increases in fee income and other operating income, while net interest income declined due to lower proprietary fund balances, and business and management expenses rose due to higher employee compensation and insurance costs 2020 Income Statement Key Item Changes | Item (RMB 10,000) | 2020 | 2019 | Increase | | :--- | :--- | :--- | :--- | | **Fee Income** | 22,946 | 16,122 | 42.33% | | **Net Interest Income** | 7,264 | 9,117 | (20.32%) | | **Investment Income** | 3,789 | 1,800 | 110.50% | | **Other Operating Income** | 120,607 | 33,730 | 257.57% | | **Business and Management Expenses** | 26,860 | 22,060 | 21.76% | | **Net Profit** | 6,632 | 2,127 | 211.80% | - Fee income growth was primarily driven by a year-on-year increase of **RMB 89.73 million** (**103.94%**) in futures exchange fee rebates and a year-on-year increase of **RMB 7.68 million** (**133.80%**) in asset management business income[105](index=105&type=chunk)[108](index=108&type=chunk) - Business and management expenses increased by **RMB 48 million**, mainly due to a **RMB 20.23 million** increase in employee compensation and a **RMB 12.45 million** increase in insurance expenses from expanded "insurance + futures" business[127](index=127&type=chunk)[129](index=129&type=chunk)[131](index=131&type=chunk) [Asset Items Analysis](index=46&type=section&id=Item%206.III.iii.%20Asset%20Items%20Analysis) As of year-end 2020, the group's total assets reached RMB 6.349 billion, a 40.76% year-on-year increase, primarily driven by a 38.25% rise in cash and cash equivalents to RMB 5.09 billion and a 66.04% increase in financial investment assets to RMB 1.04 billion Asset Structure Changes (As of Year-End) | Asset Category (RMB 10,000) | 2020 | 2019 | Increase | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 508,978 | 368,169 | 38.25% | | Financial Investment Assets | 104,038 | 62,659 | 66.04% | | Other Assets | 21,900 | 20,249 | 8.15% | | **Total** | **634,916** | **451,077** | **40.76%** | [Liability Items Analysis](index=50&type=section&id=Item%206.III.iv.%20Liability%20Items%20Analysis) As of year-end 2020, the group's total liabilities reached RMB 4.702 billion, a 61.50% year-on-year increase, primarily driven by a 61.22% surge in client equity payable to RMB 4.288 billion, which constituted 91.18% of total liabilities Liability Structure Changes (As of Year-End) | Liability Category (RMB 10,000) | 2020 | 2019 | Increase | | :--- | :--- | :--- | :--- | | Client Equity Payable | 428,784 | 265,955 | 61.22% | | Other Operating Liabilities | 41,465 | 25,225 | 64.38% | | **Total** | **470,249** | **291,180** | **61.50%** | [Equity Items Analysis](index=53&type=section&id=Item%206.III.v.%20Equity%20Items%20Analysis) As of year-end 2020, the group's total shareholders' equity was RMB 1.647 billion, a modest 2.98% year-on-year increase, with share capital remaining constant and the growth primarily attributable to increased reserves from accumulated earnings Shareholder Equity Changes (As of Year-End) | Equity Item (RMB 10,000) | 2020 | 2019 | Increase | | :--- | :--- | :--- | :--- | | Share Capital | 90,700 | 90,700 | – | | Reserves | 73,967 | 69,197 | 6.89% | | **Total Shareholders' Equity** | **164,667** | **159,897** | **2.98%** | [Business Innovation and Risk Control](index=55&type=section&id=Item%206.VII.%20Business%20Innovation%20and%20Risk%20Control) The company prioritized business innovation, achieving significant results in international business, risk management, and wealth management, while controlling risks through robust pre-event systems, in-process supervision, and post-event inspections - International business subsidiary Hongye International Financial's full-year operating revenue increased by **5%** year-on-year, and total profit rose by **11%** year-on-year, successfully obtaining RQFII qualification[158](index=158&type=chunk) - Risk management subsidiary Hongye Capital's full-year operating revenue increased by **2.57 times** year-on-year, expanding its market-making products to **13**, with OTC options notional principal reaching **RMB 3.4 billion**[159](index=159&type=chunk) - Wealth management business innovation upgraded, with public fund transaction volume nearing **RMB 500 million**, distribution income increasing by **4.62 times** year-on-year, and total profitability of proprietary investment products at **5.69%**[161](index=161&type=chunk) [Risk Factors and Countermeasures](index=58&type=section&id=Item%206.VIII.%20Risk%20Factors%20and%20Countermeasures) The company addresses key risks including internal control, ethical, market, credit, and investment risks through comprehensive management systems, stringent internal controls, employee training, and robust monitoring mechanisms to ensure secure and efficient operations - The company identified five major risks: risk management and internal control risks, ethical risks (employees and introducing brokers), market risks (price volatility, client default), credit risks (client default), and investment risks (project decision-making, management, exit)[171](index=171&type=chunk)[175](index=175&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) [Risk Management System](index=61&type=section&id=Item%206.IX.%20Risk%20Management%20System) The company has established a comprehensive four-tier risk management system, encompassing the Board, Risk Management Committee, Chief Risk Officer, and departmental risk control leads, ensuring risks are within acceptable limits and achieving enterprise value maximization, consistently earning an A-class A-level regulatory rating for twelve consecutive years - The company's risk management organizational structure includes four levels: the Board of Directors, the Risk Management Committee, the Chief Risk Officer, and risk control personnel in various business departments[187](index=187&type=chunk) - Since 2009, the company has consistently received the "A-class A-level" regulatory rating from the China Securities Regulatory Commission for twelve consecutive years, demonstrating its robust risk management capabilities[182](index=182&type=chunk) [Industry Competition and Core Competencies](index=64&type=section&id=Item%206.X.%20Industry%20Competition%20and%20Core%20Competencies) In 2020, the company maintained its competitive edge with an 88.43% increase in brokerage turnover and a 0.70% market share, consistently earning an A-class A-level rating for twelve years, underpinned by its strategic location, extensive network, innovation, efficient trading platforms, strong client service, experienced management, and comprehensive business licenses - The company's core competencies include: 1. Superior geographical location (Jiangsu leader); 2. Extensive branch network (**45 branches**); 3. Strong innovation capabilities; 4. Efficient and stable online trading platform; 5. Strong client service capabilities; 6. Experienced management team; 7. Comprehensive domestic and international business qualifications[198](index=198&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) [Future Outlook](index=69&type=section&id=Item%206.XI.%20Future%20Outlook) Looking ahead, the company plans to transform from a platform service provider to a comprehensive professional investment bank, focusing on upgrading brokerage, platform-based and specialized asset management, full coverage risk management, seizing wealth management opportunities, expanding international business, and increasing financial technology investment - The company's business development structure will upgrade to five "centers" focusing on brokerage, risk management, wealth management, asset management, and international business, supported by two "platforms" for online and offline operations[210](index=210&type=chunk) - Future strategic priorities include "platform-based + specialized" asset management, full coverage of risk management business, seizing wealth management opportunities, deepening international business expansion, and continuous investment in financial technology[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) [Business Review](index=73&type=section&id=Item%206.XII.%20Business%20Review) This section reviews the company's key financial ratios and corporate social responsibility, noting an increase in net assets per share to RMB 1.82, a rise in the asset-liability ratio (excluding client equity) to 20%, and a significant improvement in weighted average return on net assets to 4.07%, alongside commitments to employee relations, environmental protection, legal compliance, and client relationships Key Financial Ratios | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Net Assets Per Share Attributable to Parent (RMB/share) | 1.82 | 1.76 | | Asset-Liability Ratio (%) | 20% | 14% | | Weighted Average Return on Net Assets | 4.07% | 1.31% | - The company values employee well-being, with a total of **659 employees** as of the end of 2020, and has established a comprehensive system for talent acquisition, development, and performance evaluation[221](index=221&type=chunk)[222](index=222&type=chunk) [Events After Reporting Period](index=76&type=section&id=Item%206.XIII.%20Events%20After%20Reporting%20Period) Subsequent to the reporting period, the company decided to acquire office property in Nanjing for approximately RMB 280 million and parking spaces for up to RMB 41 million, funded by proprietary capital and up to 50% loans, to enhance its corporate image and competitiveness - After the reporting period, the company decided to acquire office property in Nanjing Financial City Phase II for approximately **RMB 280 million**, and additionally purchase parking spaces for no more than **RMB 41 million**[227](index=227&type=chunk) [Board of Directors' Report](index=77&type=section&id=Item%207.%20Board%20of%20Directors%27%20Report) This section details the Board's activities, including the proposed profit distribution plan and the utilization of IPO proceeds [Profit Distribution Plan](index=77&type=section&id=Item%207.V.%20Profit%20Distribution%20Plan) The Board of Directors proposes a final cash dividend of RMB 0.05 per share (tax inclusive) for 2020, totaling RMB 45.35 million, subject to approval at the Annual General Meeting - The Board of Directors proposes a final cash dividend of **RMB 0.05 per share** (tax inclusive) for 2020, totaling **RMB 45.35 million**[234](index=234&type=chunk)[236](index=236&type=chunk) [Use of Proceeds](index=79&type=section&id=Item%207.VI.%20Use%20of%20Proceeds) The company's 2015 IPO raised approximately HKD 536 million net, with HKD 453 million utilized by year-end 2020, primarily for Hong Kong and global business development, asset management, and commodity trading, while a proposed change in use for HKD 50 million originally allocated to futures brokerage business is pending approval Use of Proceeds (As of December 31, 2020) | Purpose (HKD 10,000) | Usable Amount | Amount Used | Remaining Amount | | :--- | :--- | :--- | :--- | | Development of Hong Kong and Global Futures Business | 17,157 | 16,500 | 657 | | Development of Asset Management Business | 13,404 | 12,136 | 1,268 | | Development of Commodity Trading and Risk Management Business | 10,723 | 9,784 | 939 | | Development and Strengthening of Existing Futures Brokerage Business | 5,361 | 52 | 5,309 | | Purchase of IT Equipment and Software | 2,681 | 2,580 | 101 | | General Working Capital | 4,289 | 4,288 | 1 | | **Total** | **53,615** | **45,340** | **8,275** | [Other Significant Matters](index=87&type=section&id=Item%208.%20Other%20Significant%20Matters) This section addresses other important aspects of the company's operations, including material litigation and related party transactions [Material Litigation and Arbitration](index=87&type=section&id=Item%208.II.%20Material%20Litigation%20and%20Arbitration) During the reporting period, the company was involved in several material lawsuits, including new cases concerning employee infringement (RMB 5.69 million) and a subsidiary's PTA procurement dispute (RMB 10.71 million), while a case involving a former employee's forged seal was dismissed, and another related to a former employee's personal loan guarantee is under appeal - Two new material lawsuits occurred during the reporting period: one involving an employee infringement liability dispute, where the plaintiff sought approximately **RMB 5.69 million** in compensation and the company was requested to bear joint liability; another was a PTA procurement dispute involving subsidiary Hongye Capital, seeking confirmation of a claim of approximately **RMB 10.71 million**[284](index=284&type=chunk)[285](index=285&type=chunk) [Related Parties and Related Party Transactions](index=90&type=section&id=Item%208.IV.%20Related%20Parties%20and%20Related%20Party%20Transactions) The company's main related parties are controlling shareholder Suhao Holdings and major shareholder Hongye Co., Ltd., with ongoing related party transactions primarily involving financial services to Suhao Holdings and its affiliates, and property leases from Hongye Co., Ltd., all within annual caps and confirmed as fair and reasonable 2020 Ongoing Related Party Transactions Execution | Transaction Agreement | Actual Amount (RMB 1,000) | Annual Cap (RMB 1,000) | | :--- | :--- | :--- | | Suhao Financial Services Framework Agreement | 36.0 | 6,000 | | Hongye Property Lease and Management Services Agreement | 5,657.2 | 8,000 | [Share Capital Changes and Major Shareholders](index=96&type=section&id=Item%209.%20Share%20Capital%20Changes%20and%20Major%20Shareholders) This section provides an overview of the company's shareholding structure and identifies its major shareholders [Shareholding Structure](index=96&type=section&id=Item%209.I.%20Shareholding%20Structure) As of year-end 2020, the company's total share capital remained unchanged at 907 million shares, with controlling shareholder Jiangsu Suhao Holdings Group Co., Ltd. holding a combined 47.59% stake, and public H-share shareholders holding 26.61% Major Shareholder Holdings (As of December 31, 2020) | Shareholder Name | Share Class | Number of Shares Held | Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Jiangsu Suhao Holdings Group Co., Ltd. | Domestic Shares | 275,456,777 | 30.37% | | Jiangsu Hongye Co., Ltd. | Domestic Shares | 147,900,000 | 16.31% | | Jiangsu Hongsu Industrial Co., Ltd. | Domestic Shares | 143,548,000 | 15.83% | | Jiangsu Huahong International Group Co., Ltd. | Domestic Shares | 63,930,134 | 7.05% | | Public Shareholders | H Shares | 241,400,000 | 26.61% | - Controlling shareholder Suhao Holdings is deemed to have an interest in a total of **431,642,122 domestic shares**, representing **47.59%** of the company's total issued shares[329](index=329&type=chunk)[331](index=331&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=99&type=section&id=Item%2010.%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides details on the company's human resources, including employee demographics and remuneration [Employees and Remuneration](index=113&type=section&id=Item%2010.VI.%20Employees%20and%20Remuneration) As of the reporting period end, the company and its subsidiaries had 659 employees, with over 84% holding bachelor's degrees or higher, 56.6% in futures brokerage, and 63.73% aged 35 or younger, reflecting a young and well-educated workforce, with total employee costs of approximately RMB 154 million in 2020 Employee Composition (As of End of 2020) | Category | Sub-category | Number of People | Percentage | | :--- | :--- | :--- | :--- | | **Total Employees** | - | **659** | **100%** | | **Educational Background** | Doctoral | 4 | 0.61% | | | Master's | 114 | 17.30% | | | Bachelor's | 439 | 66.62% | | **Position Category** | Futures Brokerage | 373 | 56.60% | | | Asset Management | 29 | 4.40% | | | Commodity Trading and Risk Management | 57 | 8.65% | | **Age Structure** | 35 and Below | 420 | 63.73% | | | 36 to 40 | 137 | 20.79% | - For the year ended December 31, 2020, total employee costs (including directors' remuneration) were approximately **RMB 154 million**[389](index=389&type=chunk) [Corporate Governance Report](index=116&type=section&id=Item%2011.%20Corporate%20Governance%20Report) This section outlines the company's corporate governance framework, including the composition and performance of the Board of Directors and its specialized committees [Board of Directors and Performance of Duties](index=118&type=section&id=Item%2011.III.%20Board%20of%20Directors%20and%20Performance%20of%20Duties) The company's Board of Directors, comprising 8 members including 3 independent non-executive directors, met 9 times during the reporting period to deliberate on key matters such as annual results, profit distribution, A-share listing applications, major investments, and personnel appointments, demonstrating diligent performance of duties - The Board of Directors consists of **8 directors**, including **3 independent non-executive directors**, complying with the Listing Rules[402](index=402&type=chunk) - During the reporting period, the Board of Directors held **9 meetings**, deliberating on **37 proposals** including annual results, profit distribution, withdrawal and re-initiation of A-share listing application, acquisition of office premises, and senior management appointments[407](index=407&type=chunk)[408](index=408&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk)[411](index=411&type=chunk)[416](index=416&type=chunk) [Board Committees](index=124&type=section&id=Item%2011.IV.%20Board%20Committees) The company has established four Board committees—Audit, Remuneration, Nomination, and Risk Management—with compositions compliant with regulatory requirements, each holding multiple meetings during the reporting period to review specialized matters and enhance the Board's decision-making professionalism and scientific rigor - The Audit Committee, composed of **2 independent non-executive directors** and **1 non-executive director**, held **3 meetings** during the reporting period to review annual results, internal audit reports, and the re-appointment of auditors[423](index=423&type=chunk)[436](index=436&type=chunk) - The Remuneration Committee, composed of **2 independent non-executive directors** and **1 non-executive director**, held **2 meetings** during the reporting period to review the remuneration of directors, supervisors, and senior management[425](index=425&type=chunk)[428](index=428&type=chunk)[435](index=435&type=chunk) - The Nomination Committee, composed of **1 executive director** and **2 independent non-executive directors**, held **3 meetings** during the reporting period to review senior management appointments and removals[429](index=429&type=chunk)[430](index=430&type=chunk)[435](index=435&type=chunk) [Supervisory Board Report](index=143&type=section&id=Item%2012.%20Supervisory%20Board%20Report) This section details the Supervisory Board's oversight activities and its independent assessment of the company's operations and financial integrity [Supervisory Board's Work Performance](index=143&type=section&id=Item%2012.I.%20Supervisory%20Board%27s%20Work%20Performance) In 2020, the Supervisory Board fully exercised its oversight functions, holding 4 meetings to review the company's legal compliance, financial status, use of proceeds, and internal controls, concluding that decision-making processes were lawful, financial reports were accurate, and directors and senior management diligently performed their duties without harming company or shareholder interests - The Supervisory Board believes the company operates lawfully, its decision-making procedures are legitimate, and directors and senior management diligently perform their duties without discovering any violations[491](index=491&type=chunk) - The Supervisory Board reviewed and approved the company's financial situation, use of proceeds, and internal control self-assessment report, deeming the financial reports true and accurate and the internal control system effective[492](index=492&type=chunk)[494](index=494&type=chunk)[495](index=495&type=chunk) [Financial Report](index=146&type=section&id=Item%2013.%20Financial%20Report) This section presents the company's audited financial statements, including the audit opinion, key audit matters, balance sheet, and income statement [Audit Opinion](index=146&type=section&id=Item%2013.I.%20Audit%20Opinion) KPMG Huazhen LLP issued an unqualified audit opinion on Hongye Futures' 2020 consolidated and parent company financial statements, affirming their fair presentation in all material respects in accordance with Chinese Enterprise Accounting Standards - Auditor KPMG Huazhen LLP issued an unqualified audit opinion on the company's 2020 financial statements[498](index=498&type=chunk) [Key Audit Matters](index=147&type=section&id=Item%2013.III.%20Key%20Audit%20Matters) Auditors identified two key audit matters: the fair value assessment of financial instruments, particularly those requiring significant management judgment for Level 2 and 3 inputs, and the consolidation of structured entities, where management's judgment on inclusion significantly impacts the consolidated balance sheet - Key Audit Matter One: Assessing the fair value of financial instruments, as the valuation of some financial instruments is complex and involves significant management judgment in determining valuation model inputs, especially for Level 2 and Level 3 financial instruments[502](index=502&type=chunk) - Key Audit Matter Two: Consolidation of structured entities, as significant management judgment is involved in determining whether structured entities should be consolidated, which can materially impact the consolidated balance sheet[503](index=503&type=chunk) [Balance Sheet](index=152&type=section&id=Item%2013.Consolidated%20and%20Parent%20Company%20Balance%20Sheet) As of year-end 2020, the group's total assets were RMB 6.349 billion, total liabilities RMB 4.702 billion, and equity attributable to parent RMB 1.647 billion, with assets primarily comprising cash and bank balances (RMB 2.894 billion) and receivable margin deposits (RMB 2.131 billion), and liabilities mainly consisting of payable margin deposits (RMB 4.247 billion) Consolidated Balance Sheet Summary (As of December 31, 2020) | Item (RMB) | Amount | | :--- | :--- | | **Total Assets** | **6,349,161,798.87** | | Cash and Bank Balances | 2,894,295,423.20 | | Receivable Margin Deposits | 2,131,088,863.50 | | Trading Financial Assets | 1,014,876,858.36 | | **Total Liabilities** | **4,702,494,071.37** | | Payable Margin Deposits | 4,247,090,138.08 | | **Total Shareholders' Equity** | **1,646,667,727.50** | [Income Statement](index=154&type=section&id=Item%2013.Consolidated%20and%20Parent%20Company%20Income%20Statement) For the year 2020, the group's operating revenue totaled RMB 1.561 billion, primarily driven by other operating income (mainly risk management business) at RMB 1.206 billion and fee income at RMB 229 million, resulting in a net profit of RMB 66.32 million after operating expenses of RMB 1.465 billion Consolidated Income Statement Summary (2020) | Item (RMB) | Amount | | :--- | :--- | | **Total Operating Revenue** | **1,561,379,595.38** | | Fee Income | 229,458,231.66 | | Net Interest Income | 72,644,679.32 | | Other Operating Income | 1,206,069,904.43 | | **Total Operating Expenses** | **(1,465,104,523.25)** | | Other Operating Costs | (1,171,435,651.77) | | Business and Management Expenses | (268,599,105.55) | | **Total Profit** | **92,703,446.57** | | **Net Profit** | **66,322,455.26** |

F HOLLY FUTURES (於中華人民共和國註冊成立的股份有限公司 • 中文公司名稱為弘業期貨股份有限公司 • 在香港以 Holly Futures 名義開展業務) 股份代號：3678 2 | --- | --- | --- | --- | --- | --- | --- | |-------------|-------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | 中 期 告 報 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 弘業期貨股份有限公司 目錄 目錄 | --- | --- | --- | |-------|--------|------------------------| | | | | | ...

Financial Performance - The company reported a net profit of RMB 100 million for the fiscal year ending December 31, 2019, representing a 15% increase compared to the previous year[10]. - Operating revenue for 2019 was RMB 645.24 million, an increase of 5% compared to RMB 616.17 million in 2018[56]. - Total profit for 2019 decreased to RMB 41.58 million, down 61% from RMB 105.61 million in 2018[56]. - Net profit attributable to shareholders was RMB 21.27 million, a decline of 74% from RMB 80.51 million in 2018[56]. - The company's net profit for 2019 was RMB 0.21 billion, a decrease of 74% compared to RMB 0.81 billion in 2018, primarily due to goodwill impairment and a decline in commission and interest income[79]. - The company's total operating income for 2019 was RMB 645 million, a year-on-year increase of 5%[88]. - The net profit for 2019 was RMB 21.27 million, a decrease of RMB 59.25 million or 74% compared to RMB 80.51 million in 2018[95]. Asset Management - The asset management business scale reached RMB 11.2 billion, ranking among the top in the industry[6]. - The asset management scale as of December 31, 2019, was RMB 11.26 billion, a decrease of 16.9% from RMB 13.55 billion at the end of 2018[82]. - The company introduced 12 new asset management products and 4 single-client products during the year[83]. - The number of asset management plans reduced from 26 in 2018 to 19 in 2019[101]. Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[10]. - The company aims to push for high-quality development in its main business in the coming year[7]. - The company is actively working on establishing a public fund company and optimizing its setup plan in collaboration with the China Securities Regulatory Commission[160]. - The company is focused on transforming its brokerage business into a wealth and risk management-oriented model, shifting from retail to institutional clients[166]. Risk Management - The company emphasizes the importance of investment risk awareness in its forward-looking statements[4]. - The risk management system is designed to prevent operational, compliance, market, and credit risks while ensuring the safety and integrity of client and company assets[190]. - The company has maintained an "A Class A Grade" regulatory rating from the China Securities Regulatory Commission for eleven consecutive years, reflecting its effective risk management framework[188]. - The risk management department closely monitors market trends and adjusts investor margin standards to mitigate risks, including timely margin increases and liquidation measures[184]. Awards and Recognition - The company received over 10 awards in 2019, enhancing its brand influence significantly[6]. - The company was awarded over 10 honors, including "Best Futures Company" and "Best Asset Management Pioneer Award" in industry evaluations[79]. Operational Efficiency - The company aims to improve operational efficiency, targeting a 5% reduction in costs through automation and process optimization[10]. - The company is enhancing its information technology infrastructure to improve service efficiency and risk management capabilities, particularly for cross-border and quantitative clients[175]. Financial Position - Total assets as of December 31, 2019, were RMB 4.51 billion, representing a 5% increase from RMB 4.30 billion in 2018[57]. - Total liabilities increased by 10% to RMB 2.91 billion in 2019 from RMB 2.65 billion in 2018[57]. - The company's net capital as of December 31, 2019, was RMB 1.097 billion, a decrease from RMB 1.215 billion at the end of 2018[69]. - The company's total equity as of December 31, 2019, was RMB 1.60 billion, a decrease of RMB 49 million, or 3% year-on-year[144]. Client Engagement - User data showed a growth in active accounts, reaching 1.5 million, which is a 20% increase year-over-year[10]. - The company's client equity composition showed a 10% increase in individual clients and a 4% increase in corporate clients year-on-year[142]. Innovation and Development - New product development includes the launch of a digital trading platform expected to enhance user engagement and transaction volume by 25%[10]. - Research and development expenses increased by 12% to RMB 20 million, focusing on innovative financial products[10]. Corporate Structure and Governance - The board of directors emphasized the importance of regulatory compliance and risk management in future strategies[10]. - The board of directors includes both executive and independent non-executive directors, ensuring governance and oversight[22].

Financial Performance - Holly Futures reported a total revenue of RMB 150 million for the first half of 2019, representing a 10% increase compared to the same period last year[19]. - The company achieved a net profit of RMB 30 million, which is a 15% increase year-over-year[19]. - The company has set a performance guidance of RMB 320 million in revenue for the full year 2019, reflecting a projected growth of 12%[19]. - Operating revenue for the first half of 2019 was RMB 351.76 million, a 2% increase from RMB 345.79 million in the same period of 2018[50]. - Profit before tax decreased by 15% to RMB 45.68 million, down from RMB 53.94 million year-on-year[50]. - Net profit attributable to shareholders was RMB 36.81 million, representing a 13% decline compared to RMB 42.10 million in the previous year[50]. - The company's operating revenue for the first half of 2019 was RMB 352 million, representing a 2% year-on-year growth[67]. - Net profit attributable to shareholders decreased by 13% to RMB 36.81 million, down from RMB 42.10 million in the same period of 2018[95]. Client Growth and Market Expansion - User data indicated an increase in active clients by 20%, reaching a total of 5,000 clients by the end of June 2019[19]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% growth in client acquisition in that region over the next year[19]. - The company added 28 new corporate clients in its options business, with nominal principal transactions exceeding RMB 1.5 billion, a growth of over 300% year-on-year[77]. - The company expanded its public fund sales to RMB 150 million, with nearly 80 new fund clients acquired in the first half of 2019[78]. Investment and Technology Development - Holly Futures is investing RMB 5 million in new technology development aimed at enhancing trading platforms and user experience[19]. - The company is exploring potential mergers and acquisitions to enhance its service offerings and market share, with a focus on firms in the fintech sector[19]. - The company is committed to developing a more distinctive service model for the real economy, concentrating resources to deepen the "five-in-one" service approach[84]. - The company is enhancing its asset management system by collaborating with financial institutions to promote actively managed products and improve resource sharing[84]. - The company is advancing its digital platform development to improve operational efficiency and customer service quality through technology[89]. Risk Management - The company emphasizes risk control and compliance management to ensure sustainable development and prevent regulatory violations[93]. - The company is actively managing various risks, including market and credit risks, to ensure efficient operations[126]. - The investment risk management framework includes a decision-making committee to minimize investment risks through thorough project evaluations[137]. - The company has maintained an "A Class A" regulatory rating from the China Securities Regulatory Commission for ten consecutive years, reflecting its strong risk management practices[140]. - The risk management framework is comprehensive, covering all business processes and ensuring effective monitoring and evaluation[142]. Financial Position - Total assets as of June 30, 2019, amounted to RMB 4.59 billion, reflecting a 7% increase from RMB 4.30 billion at the end of 2018[50]. - Total liabilities increased by 13% to RMB 2.85 billion from RMB 2.53 billion at the end of 2018[50]. - The company's equity attributable to shareholders decreased slightly by 2% to RMB 1.74 billion from RMB 1.77 billion at the end of 2018[50]. - The company's debt-to-asset ratio was reported at 12% as of June 30, 2019, compared to 3% at the end of 2018[50]. - Cash and cash equivalents increased by RMB 195 million, with net cash flow from operating activities decreasing to RMB 92 million from RMB 242 million in the same period of 2018[105]. Related Party Transactions - The company’s major related party transactions occurred with its controlling shareholder, Suhao Holdings, which holds approximately 47.59% of the company's shares[164]. - The group signed a new financial services framework agreement with Suhao Holdings, with a 2019 annual cap of RMB 5.5 million, and reported actual transaction amounts of RMB 0 in the first half of 2019[169]. - A new property leasing and management services agreement was established with Hongye Co., with a 2019 annual cap of RMB 7.5 million, and actual transaction amounts of RMB 3.22 million in the first half of 2019[170]. - The group continues to provide financial services to Suhao Holdings under the new agreement, reflecting ongoing related party transactions[169]. Legal Matters - The company is currently involved in several ongoing legal disputes, including a case where a client is seeking RMB 1,450 million in damages[191]. - Another ongoing case involves a claim for RMB 170 million in losses and interest from a different client[191]. - The company has not been subject to any penalties or public reprimands during the reporting period[188]. - There are no new significant lawsuits or arbitration matters reported after the reporting period[199].

HOLLY FUTURES (於中華人民共和國註冊成立的股份有限公司, 中文公司名稱為弘業期貨股份有限公司,在香港以 Holly Futures 名義剛展業務) 股份代號 : 3678 B 8 O 檀 C 2 第一節 重要提示 3 第二節 董事長致辭 4 第三節 釋義 10 第四節 公司資料 22 第五節 財務摘要 25 第六節 管理層討論及分析 73 第七節 董事會報告 82 第八節 其他重要事項 91 第九節 股份變動及主要股東情況 94 第十節 董事、監事、高級管理人員和員工情況 111 第十一節 企業管治報告 136 第十二節 監事會報告 140 第十三節 獨立核數師報告 目錄 弘業期貨股份有限公司 2018年度報告 1 目錄 弘業期貨股份有限公司 2018年度報告 第一節 重要提示 2 重要提示 本公司董事會、監事會及董事、監事、高級管理人員保證年度報告內容的真實、準確、完整，不存在虛假記載誤 導性陳述或重大遺漏，並就其承擔個別和連帶的法律責任。 本報告已經公司第三屆董事會第四次會議、第三屆監事會第二次會議審議通過，全體董事和全體監事出席了會 議，沒有董事、監事、高級管理人員聲明對本報告內容的真實性 ...