[Important Notice](index=2&type=section&id=Important%20Notice) This section provides crucial disclaimers and assurances regarding the accuracy and forward-looking statements within the report - The company has no profit distribution or capital reserve conversion plan for the first half of 2024[3](index=3&type=chunk) - Forward-looking statements in this report, including future plans, development strategies, and business plans, do not constitute actual commitments to investors; investors are advised to be aware of the risks[4](index=4&type=chunk) - The company's business is highly correlated with the domestic and international macroeconomic environment and capital market trends, facing significant risks such as market risk, credit risk, operational risk, and information system risk[5](index=5&type=chunk) - Any discrepancies between totals and the sum of their components in this report are due to rounding[6](index=6&type=chunk) - The company's Board of Directors, Board of Supervisors, and its directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content and assume legal responsibility[7](index=7&type=chunk) - This semi-annual report is unaudited[7](index=7&type=chunk) [Section I Definitions](index=4&type=section&id=Section%20I%20Definitions) This section defines key terms, abbreviations, and entities used throughout the report, including company names, regulatory bodies, and reporting periods - Company, Nanhua Futures refers to Nanhua Futures Co., Ltd[11](index=11&type=chunk) - Reporting period refers to January-June 2024, and the end of the reporting period refers to June 30, 2024[11](index=11&type=chunk) - Abbreviations for regulatory and trading institutions such as the China Securities Regulatory Commission (CSRC), China Futures Association (CFA), major futures exchanges, and stock exchanges are listed[11](index=11&type=chunk) - The controlling shareholder, Hengdian Group Holdings Co., Ltd., and the actual controller, Dongyang Hengdian Community Economic Enterprise Federation, are specified[11](index=11&type=chunk) - Detailed names and abbreviations of major domestic and international subsidiaries, such as Nanhua Capital, Nanhua Fund, and Grand China International, are listed[11](index=11&type=chunk) [Section II Company Profile and Key Financial Indicators](index=5&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's fundamental information, including its legal structure, key personnel, business licenses, and a summary of its main financial performance and position indicators [I. Company Information](index=5&type=section&id=I.%20Company%20Information) This section details Nanhua Futures Co., Ltd.'s basic information, including legal representatives, general manager, registered capital and net capital, and comprehensive business qualifications across its domestic and international subsidiaries - The company's legal representative is Luo Xufeng, and the general manager is Jia Xiaolong[13](index=13&type=chunk) Registered Capital and Net Capital | Indicator | End of Current Reporting Period (yuan) | End of Previous Year (yuan) | | :--- | :--- | :--- | | Registered Capital | 610,065,893 | 610,065,893 | | Net Capital | 1,520,035,195.19 | 1,518,044,877.01 | - The company holds major business qualifications including commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, and mutual fund sales agency[14](index=14&type=chunk) - Domestic subsidiary Nanhua Capital possesses qualifications for warehouse receipt services, cooperative hedging, basis trading, pricing services (OTC derivatives), market-making, and hazardous chemical operations[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - Domestic subsidiary Nanhua Fund holds business qualifications for fund raising, sales, asset management, and specific client asset management[19](index=19&type=chunk) - Overseas subsidiary Grand China International and its affiliates hold diversified financial service licenses in Hong Kong, USA, Singapore, and the UK, covering futures brokerage, asset management, securities trading, and clearing membership[20](index=20&type=chunk)[21](index=21&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk) [II. Contact Persons and Information](index=9&type=section&id=II.%20Contact%20Persons%20and%20Information) This section provides detailed contact information for the company's Board Secretary and Securities Affairs Representative, including names, addresses, phone numbers, faxes, and email addresses Contact Persons and Information | | Board Secretary | Securities Affairs Representative | | :--- | :--- | :--- | | Name | Zhong Yiqiang | Yu Fengduo | | Contact Address | Room 1201, Hengdian Building, Shangcheng District, Hangzhou, Zhejiang Province | Room 1201, Hengdian Building, Shangcheng District, Hangzhou, Zhejiang Province | | Phone | 0571-87833551 | 0571-87833551 | | Fax | 0571-88385371 | 0571-88385371 | | Email | nanhua-ir@nawaa.com | nanhua-ir@nawaa.com | [III. Brief Introduction to Changes in Basic Information](index=9&type=section&id=III.%20Brief%20Introduction%20to%20Changes%20in%20Basic%20Information) This section briefly states that the company's registered and office addresses changed in October 2021 from Xihu Avenue to Hengdian Building in Shangcheng District, Hangzhou, with other basic information remaining unchanged - The company's registered and office addresses have been changed to Rooms 301, 401, 501, 701, 901, 1001, 1101, and 1201, Hengdian Building, Shangcheng District, Hangzhou[29](index=29&type=chunk) - The company's website is http://www.nanhua.net, and its email address is nanhua-ir@nawaa.com[29](index=29&type=chunk) [IV. Brief Introduction to Changes in Information Disclosure and Document Custody Locations](index=9&type=section&id=IV.%20Brief%20Introduction%20to%20Changes%20in%20Information%20Disclosure%20and%20Document%20Custody%20Locations) This section discloses the company's designated information disclosure newspapers as "Shanghai Securities News" and "Securities Times," the website for semi-annual reports as the Shanghai Stock Exchange website, and the report custody location as the company's Board Office Information Disclosure and Document Custody Locations | Item | Content | | :--- | :--- | | Company's selected newspapers for information disclosure | Shanghai Securities News, Securities Times | | Website address for semi-annual report publication | http://www.sse.com.cn | | Company's semi-annual report custody location | Board Office, 12th Floor, Hengdian Building, Shangcheng District, Hangzhou, Zhejiang Province | [V. Brief Introduction to Company Shares](index=9&type=section&id=V.%20Brief%20Introduction%20to%20Company%20Shares) This section briefly introduces the company's stock listing information, including stock type, listing exchange, stock abbreviation, and stock code Company Shares Overview | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | Former Stock Abbreviation | | :--- | :--- | :--- | :--- | :--- | | A-share | Shanghai Stock Exchange | Nanhua Futures | 603093 | Not applicable | [VII. Company's Key Accounting Data and Financial Indicators](index=10&type=section&id=VII.%20Company's%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section presents the company's key accounting data and financial indicators for the first half of 2024, showing a 16.14% year-on-year decrease in operating revenue but a 36.73% increase in net profit attributable to parent company shareholders Key Accounting Data (Jan-Jun) | Key Accounting Data | Current Reporting Period (Jan-Jun) (yuan) | Prior Period (yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,637,505,189.71 | 3,145,282,203.41 | -16.14 | | Net Profit Attributable to Parent Company Shareholders | 230,183,757.68 | 168,353,399.71 | 36.73 | | Net Profit Attributable to Parent Company Shareholders (Excluding Non-recurring Items) | 228,593,446.59 | 161,126,463.42 | 41.87 | | Net Cash Flow from Operating Activities | 2,553,054,337.19 | 1,681,898,165.52 | 51.80 | | Other Comprehensive Income | 22,972,700.19 | 45,794,508.55 | -49.84 | Key Accounting Data (Period-end) | Key Accounting Data | End of Current Reporting Period (yuan) | End of Previous Year (yuan) | Period-end YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 41,324,380,752.05 | 36,325,522,383.33 | 13.76 | | Total Liabilities | 37,398,276,354.45 | 32,612,603,010.07 | 14.67 | | Equity Attributable to Parent Company Shareholders | 3,916,252,916.43 | 3,703,377,667.90 | 5.75 | | Total Owners' Equity | 3,926,104,397.60 | 3,712,919,373.26 | 5.74 | Key Financial Indicators (Jan-Jun) | Key Financial Indicators | Current Reporting Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.38 | 0.28 | 35.71 | | Diluted Earnings Per Share (yuan/share) | 0.38 | 0.28 | 35.71 | | Basic EPS After Non-recurring Gains/Losses (yuan/share) | 0.37 | 0.26 | 42.31 | | Weighted Average Return on Net Assets (%) | 6.03 | 4.93 | Increased by 1.10 percentage points | | Weighted Average Return on Net Assets After Non-recurring Gains/Losses (%) | 5.99 | 4.72 | Increased by 1.27 percentage points | Parent Company's Net Capital and Risk Control Indicators (Period-end) | Item | End of Current Reporting Period (yuan) | End of Previous Year (yuan) | | :--- | :--- | :--- | | Net Capital | 1,520,035,195.19 | 1,518,044,877.01 | | Ratio of Net Capital to Total Risk Capital Reserve (%) | 207 | 246 | | Ratio of Net Capital to Net Assets (%) | 48 | 47 | | Ratio of Liquid Assets to Liquid Liabilities (%) | 605 | 511 | | Ratio of Liabilities to Net Assets (%) | 26 | 28 | | Settlement Reserve Amount | 412,324,897.02 | 1,169,693,947.75 | [IX. Non-recurring Gains and Losses Items and Amounts](index=11&type=section&id=IX.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the company's non-recurring gains and losses items and their amounts for the first half of 2024, totaling 1,590,311.09 yuan, primarily from disposal of non-current assets and fair value changes of financial instruments Non-recurring Gains and Losses Item and Amount | Non-recurring Gains and Losses Item | Amount (yuan) | | :--- | :--- | | Gains or losses from disposal of non-current assets, including the write-back of impairment provisions | 123,309.71 | | Gains or losses from changes in fair value of financial assets and liabilities held by non-financial enterprises, and gains or losses from disposal of financial assets and liabilities, excluding those related to effective hedging activities in normal business operations | 468,858.83 | | Other non-operating income and expenses apart from the above | 1,504,884.65 | | Less: Income tax impact | 501,494.35 | | Impact on minority interests (after tax) | 5,247.75 | | **Total** | **1,590,311.09** | [Section III Management Discussion and Analysis](index=12&type=section&id=Section%20III%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's industry, core competencies, operational performance, and financial status during the reporting period, along with a discussion of key risks and mitigation strategies [I. Explanation of the Company's Industry and Main Business Operations during the Reporting Period](index=12&type=section&id=I.%20Explanation%20of%20the%20Company's%20Industry%20and%20Main%20Business%20Operations%20during%20the%20Reporting%20Period) In the first half of 2024, the global economic environment was complex, with volatile commodity markets highlighting the importance of futures and derivatives; China's futures market maintained stable development with expanding product varieties and increasing institutional and industrial participation - From January to June 2024, the national futures market's cumulative trading volume reached **3.46 billion lots**, with a cumulative turnover of **281.51 trillion yuan**[38](index=38&type=chunk) - China's exchanges have listed a total of **133 futures and related derivatives**, covering major sectors of the national economy such as agriculture, metals, energy, chemicals, shipping, and finance[38](index=38&type=chunk) - The institutionalization and industrialization of futures market participants continue to advance, gradually enhancing their effectiveness in serving the real economy[39](index=39&type=chunk) - The company's main businesses include futures brokerage, wealth management, risk management, overseas financial services, and futures investment consulting[40](index=40&type=chunk) [II. Analysis of Core Competitiveness](index=14&type=section&id=II.%20Analysis%20of%20Core%20Competitiveness) The company's core competitiveness stems from its comprehensive derivatives business licenses, robust risk control and compliance systems, experienced management team, and growing financial technology capabilities, enabling a multi-business synergistic financial service platform - The company has initially formed a comprehensive financial service platform integrating spot and futures, on-exchange and OTC, public and private funds, domestic and international operations, and online and offline services[44](index=44&type=chunk) - The company has **11 branches and 28 business departments** nationwide, is a member of SHFE, DCE, ZCE, CFFEX, GFEX, INE, and also a trading participant of SSE and SZSE[44](index=44&type=chunk) - Grand China International has completed its layout in four international cities: Hong Kong (China), Chicago (USA), Singapore, and London (UK), covering the three major time zones of Asia, Europe, and North America[45](index=45&type=chunk) - The company has established a four-tier risk management organizational structure comprising the Board of Directors, Board Special Committees, Chief Risk Officer, operating management, and business departments, and has consistently received an **A-class AA rating** for many consecutive years[45](index=45&type=chunk)[47](index=47&type=chunk) - The company's senior management team is characterized by rich management experience, strong business capabilities, and a younger workforce; Chairman Luo Xufeng has been recognized as the "Best Helmsman of Chinese Futures Companies" for many consecutive years[47](index=47&type=chunk) - The company continuously promotes the development of technology finance and digital finance, independently developing key technological products such as the Nanhua High-Speed Trading System (NHTD), Data Interconnection Platform, APP, Futures-Spot Trading Risk Management System, and Shenghua Derivatives System[47](index=47&type=chunk) [III. Discussion and Analysis of Operating Performance](index=15&type=section&id=III.%20Discussion%20and%20Analysis%20of%20Operating%20Performance) In the first half of 2024, the company achieved steady business growth, with futures brokerage client equity reaching 25.77 billion yuan, risk management business adding 32.47 billion yuan in notional principal for OTC derivatives, and Nanhua Fund's AUM reaching 21.42 billion yuan - As of June 30, 2024, the company's domestic futures brokerage client equity reached **25.77 billion yuan**[50](index=50&type=chunk) - OTC derivatives business added **32.47 billion yuan** in notional principal, with **59 'Insurance + Futures' projects** implemented, totaling **1.097 billion yuan** in notional principal[51](index=51&type=chunk) - Basis trading business accumulated **1.975 billion yuan** in new basis trade volume[51](index=51&type=chunk) - Market-making business covers **33 varieties**, achieving a trading volume of **83.75 billion yuan** from January to June 2024[52](index=52&type=chunk) - As of the end of June 2024, Nanhua Fund's AUM was **21.42 billion yuan**, and the company's asset management business scale was **198 million yuan**[53](index=53&type=chunk) - Overseas financial services business obtained clearing qualifications from the **ICE-US exchange**, further enhancing its clearing memberships at mainstream exchanges[54](index=54&type=chunk) [IV. Key Operating Performance during the Reporting Period](index=17&type=section&id=IV.%20Key%20Operating%20Performance%20during%20the%20Reporting%20Period) This section analyzes the company's key operating performance during the reporting period, including changes in financial statement items, asset and liability status, and analysis of major controlled and investee companies [(I) Analysis of Main Business](index=17&type=section&id=(I)%20Analysis%20of%20Main%20Business) This section analyzes changes in the company's key financial statement items, noting a 153.43% year-on-year decrease in investment income due to reduced futures closing gains in risk management, and a 51.80% increase in net cash flow from operating activities due to increased client equity Analysis Table of Changes in Financial Statement Items | Item | Current Period (yuan) | Prior Period (yuan) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Investment Income | -73,560,760.14 | 137,676,532.83 | -153.43 | Primarily due to reduced futures closing gains in the company's risk management business | | Net Exposure Hedging Income | 8,968,282.76 | -51,938,088.93 | N/A | Primarily due to increased holding gains/losses on hedged items in risk management business | | Fair Value Change Income | 86,110,190.11 | -108,849,270.07 | N/A | Primarily due to increased holding gains/losses on futures in the company's risk management business | | Exchange Gains | -3,835,591.12 | -2,440,557.26 | N/A | Primarily due to exchange rate fluctuations of non-functional currencies of overseas subsidiaries | | Credit Impairment Losses | 21,617,787.08 | 34,676,104.73 | -37.66 | Primarily due to a year-on-year decrease in the increase of monetary margin receivables in the current period | | Asset Impairment Losses | -1,198,030.92 | 3,945,081.66 | -130.37 | Decrease in contract performance costs and reversal of bad debt provisions at the end of the current period | | Non-operating Income | 3,862,782.66 | 871,550.33 | 343.21 | Primarily due to recovery of previously recognized losses | | Income Tax Expense | 40,727,550.43 | 25,184,396.00 | 61.72 | Primarily due to a year-on-year increase in total profit for the current period | | Net Cash Flow from Operating Activities | 2,553,054,337.19 | 1,681,898,165.52 | 51.80 | Primarily due to a significant increase in client equity in the current period | | Net Cash Flow from Investing Activities | -637,934,613.41 | 249,726,030.02 | -355.45 | Primarily due to a significant increase in fixed deposits in the current period | | Net Cash Flow from Financing Activities | -167,847,955.34 | 64,625,442.76 | -359.72 | Primarily due to a decrease in bank loans and an increase in repayments of maturing debts in the current period | [(III) Analysis of Assets and Liabilities](index=18&type=section&id=(III)%20Analysis%20of%20Assets%20and%20Liabilities) This section details changes in the company's asset and liability status, with total assets reaching 41.32 billion yuan and total liabilities 37.40 billion yuan, both increasing year-on-year, and overseas assets accounting for 28.37% of total assets Changes in Assets and Liabilities | Item Name | Period-end Amount (yuan) | Period-end % of Total Assets | Prior Year-end Amount (yuan) | Prior Year-end % of Total Assets | Period-end YoY Change (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Settlement Reserve | 43,180,846.74 | 0.10 | 15,683,847.86 | 0.04 | 175.32 | Primarily due to increased trading volume in overseas securities business | | Monetary Margin Receivable | 12,107,339,900.30 | 29.30 | 9,035,656,922.51 | 24.87 | 34.00 | Primarily due to increased client equity leading to increased receivables from exchanges | | Accounts Receivable Financing | - | 0.00 | 4,690,000.00 | 0.01 | -100.00 | Primarily due to no bank acceptance bills at the end of the current period | | Inventory | 273,009,490.25 | 0.66 | 112,021,505.67 | 0.31 | 143.71 | Primarily due to an increase in the spot scale of basis trading at the end of the current period | | Trading Financial Liabilities | 107,263,022.21 | 0.26 | 65,001,912.35 | 0.18 | 65.02 | Primarily due to an increase in derivative liabilities | | Contract Liabilities | 69,924,279.19 | 0.17 | 29,611,101.87 | 0.08 | 136.14 | Primarily due to an increase in deposits received for unexecuted spot contracts | | Other Payables | 1,072,466,887.85 | 2.60 | 1,898,534,899.40 | 5.23 | -43.51 | Primarily due to a decrease in performance bonds received from clients for derivative financial instruments | - Total overseas assets amounted to **11.72 billion yuan**, accounting for **28.37%** of total assets[59](index=59&type=chunk) Major Asset Restrictions as of the End of the Reporting Period | Item | Period-end Book Balance (yuan) | Restriction Type | Reason for Restriction | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 22,918,776.92 | Frozen | Business frozen funds, lease contract deposits, risk reserves | | Trading Financial Assets | 1,964,231,539.85 | Pledged, Frozen | Government bond funds and money market funds pledged to exchanges as margin; securities investment funds held for a period of no less than 3 years | | Inventory | 129,919,489.87 | Pledged | Pledged through warehouse receipts to offset exchange margin | [(IV) Analysis of Investment Status](index=20&type=section&id=(IV)%20Analysis%20of%20Investment%20Status) This section primarily describes the company's financial assets measured at fair value, with specific details provided in the notes to the financial report - Information on financial assets measured at fair value is detailed in Note XIV of the financial report, Section X of this report[63](index=63&type=chunk) [(VI) Analysis of Major Controlled and Investee Companies](index=22&type=section&id=(VI)%20Analysis%20of%20Major%20Controlled%20and%20Investee%20Companies) This section analyzes the operating performance of the company's major controlled and investee companies, including Nanhua Capital with 2.36 billion yuan in total assets and 3.28 million yuan in net profit, Nanhua Fund with 159.39 million yuan in total assets and 337,900 yuan in net profit, and Grand China International with 11.72 billion yuan in total assets and 200.23 million yuan in net profit Operating Performance of Major Controlled and Investee Companies | Company Name | Registered/Paid-in Capital | Total Assets (million yuan) | Net Assets (million yuan) | Operating Revenue (million yuan) | Net Profit (million yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Nanhua Capital | 700 million yuan | 2,364.81 | 712.65 | 1,977.60 | 3.28 | | Nanhua Fund | 250 million yuan | 159.39 | 148.98 | 32.56 | 0.34 | | Grand China International | 826 million HKD | 11,722.61 | 1,544.65 | 321.02 | 200.23 | [(VII) Information on Structured Entities Controlled by the Company](index=22&type=section&id=(VII)%20Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) As of June 30, 2024, five structured entities managed and invested by the company, including Nanhua Futures Yuanheng No. 2 Single Asset Management Plan, are consolidated into the company's financial statements due to the company's substantive rights and expected variable returns exceeding 30% - As of June 30, 2024, the company and its subsidiaries, as managers of asset management plans, invested in Nanhua Futures Yuanheng No. 2 Single Asset Management Plan, Nanhua All-Star FOF Collective Asset Management Plan, Nanhua Tongzhou No. 1 Collective Asset Management Plan, Nanhua Yuanheng Balance No. 1 Collective Asset Management Plan, and Nanhua Commodity No. 1 Collective Asset Management Plan, all of which are included in the company's consolidated financial statements[67](index=67&type=chunk)[68](index=68&type=chunk) - The basis for consolidation is that the company possesses substantive rights and expects variable returns with a comprehensive yield greater than **30%** through its shareholdings, management fees, or performance fees in these asset management plans[68](index=68&type=chunk) [V. Other Disclosures](index=23&type=section&id=V.%20Other%20Disclosures) This section details the company's potential market, credit, operational, regulatory, and information system risks, along with the corresponding prevention and mitigation strategies [(I) Potential Risks](index=23&type=section&id=(I)%20Potential%20Risks) The company faces market risks (e.g., market volatility, client default), credit risks (e.g., counterparty default), operational risks (e.g., internal procedural errors), regulatory risks (e.g., policy changes, compliance issues), and information system risks (e.g., system failures, defects), with overseas operations also exposed to international market and regulatory differences - The company's business is highly correlated with the domestic and international macroeconomic environment and capital market trends, and significant fluctuations in the capital market and adjustments in futures industry regulatory policies will have a major impact on the company's operating performance[5](index=5&type=chunk) - Market risks may lead to fluctuations in futures market trading volume, continuous decline in brokerage fee rates, client loss, reduction in client margins, decrease in market share, and client defaults[69](index=69&type=chunk) - Credit risk primarily manifests as economic losses due to counterparty failure to fulfill contractual obligations, such as client defaults, or the inability or deliberate default of OTC derivatives counterparties or basis trading spot counterparties[70](index=70&type=chunk) - Operational risk refers to the risk of losses incurred by the company due to incomplete or erroneous internal procedures or personnel operations, such as lack of institutional frameworks for key business operations, improper operations, occupational fraud, or violations of laws and regulations[71](index=71&type=chunk) - Regulatory risk refers to the risk of legal sanctions, regulatory measures, property losses, or reputational damage incurred by the company due to its or its employees' business management or professional conduct violating laws, regulations, and standards; overseas regulatory differences may lead to sanctions and fines[72](index=72&type=chunk)[73](index=73&type=chunk) - Information system risk refers to the risk of direct or indirect losses due to incomplete or failed systems, which may cause information system failures and affect clients' normal trading[75](index=75&type=chunk) [2. Main Risk Prevention Countermeasures and Measures](index=25&type=section&id=2.%20Main%20Risk%20Prevention%20Countermeasures%20and%20Measures) The company implements comprehensive risk prevention strategies, including market risk assessment, dynamic margin adjustments, stop-loss settings, real-time monitoring, credit evaluation, performance bond systems, robust internal procedures, dual-person reviews, compliance training, and multi-center disaster recovery systems for IT - To address market risks, the company conducts comprehensive market risk assessments, promptly adjusts announced margin levels, calculates hedging thresholds for hedged items, sets stop-loss points, and monitors asset price fluctuations in real-time[75](index=75&type=chunk) - To address credit risks, the company conducts pre-event risk assessments to understand client creditworthiness, monitors client margin risk levels in real-time, establishes a client evaluation system, and collects performance bonds[76](index=76&type=chunk) - To address operational risks, the company establishes a compliant, applicable, and clear daily operational system, formulates strict business processes and authority divisions, employs dual-person review for important positions, and establishes emergency plans[78](index=78&type=chunk) - To address regulatory risks, the company continuously establishes and improves its overall internal control system, utilizing modern management systems (such as OA office system, trading risk control system, anti-money laundering system, etc.) for full-process compliance risk monitoring[79](index=79&type=chunk) - To address information system risks, the company's IT system construction adheres to industry standards, possesses multiple data centers in Shanghai and Hangzhou, and has co-located data centers at several exchanges, establishing complete trading production backups and heterogeneous trading systems[80](index=80&type=chunk)[81](index=81&type=chunk) [Section IV Corporate Governance](index=27&type=section&id=Section%20IV%20Corporate%20Governance) This section outlines the company's corporate governance structure, including details on shareholder meetings, changes in directors, supervisors, and senior management, and proposals for profit distribution [I. Brief Introduction to Shareholder Meetings](index=27&type=section&id=I.%20Brief%20Introduction%20to%20Shareholder%20Meetings) The company's 2023 Annual General Meeting was held on April 12, 2024, approving key proposals including the annual report, profit distribution, and amendments to the Articles of Association, presided over by Chairman Luo Xufeng - The company's 2023 Annual General Meeting was held on April 12, 2024, using a combination of on-site and online voting[84](index=84&type=chunk) - The meeting approved proposals including "Resolution on the Company's <2023 Annual Report> and Summary," "Resolution on 2023 Profit Distribution," and "Resolution on Amending the <Articles of Association>"[83](index=83&type=chunk)[84](index=84&type=chunk) - The shareholder meeting was presided over by Mr. Luo Xufeng, the company's Chairman, with directors, supervisors, and senior management attending[85](index=85&type=chunk) [II. Changes in Directors, Supervisors, and Senior Management](index=28&type=section&id=II.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, there were changes in the company's senior management and independent directors, with Mr. Wang Li resigning as Deputy General Manager and CFO, Ms. Li Li appointed as Financial Officer, and Mr. Guan Qingyou resigning as independent director, replaced by Mr. Xu Lin Changes in Directors, Supervisors, and Senior Management | Name | Position Held | Change | | :--- | :--- | :--- | | Wang Li | Deputy General Manager, CFO | Resigned | | Li Li | Financial Officer | Appointed | | Guan Qingyou | Independent Director | Resigned | | Xu Lin | Independent Director | Elected | [III. Profit Distribution or Capital Reserve Conversion Plan](index=28&type=section&id=III.%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) The company has no profit distribution or capital reserve conversion plan for the first half of 2024 - The company has no profit distribution or capital reserve conversion plan for the first half of 2024[3](index=3&type=chunk)[87](index=87&type=chunk) [Section V Environmental and Social Responsibility](index=29&type=section&id=Section%20V%20Environmental%20and%20Social%20Responsibility) This section details the company's environmental protection efforts, green operational practices, and contributions to poverty alleviation and rural revitalization initiatives [I. Environmental Information](index=29&type=section&id=I.%20Environmental%20Information) As a financial service company, Nanhua Futures integrates energy-saving and emission-reduction measures into daily operations, utilizing green practices like OA systems and electronic billing, and reported no environmental law violations during the period - As a financial service company, the company's daily operations do not involve manufacturing, and it integrates major energy-saving and emission-reduction measures into its daily office activities[89](index=89&type=chunk) - The company advocates green office practices, maximizing the use of information technology to reduce energy consumption, such as developing its own OA office system, widely adopting remote futures account opening, video conferencing, and electronic billing services[90](index=90&type=chunk) - During the reporting period, the company was not penalized for violating environmental laws and regulations[90](index=90&type=chunk) [II. Specific Progress in Consolidating Poverty Alleviation Achievements and Rural Revitalization](index=29&type=section&id=II.%20Specific%20Progress%20in%20Consolidating%20Poverty%20Alleviation%20Achievements%20and%20Rural%20Revitalization) The company actively supports rural revitalization through industrial assistance (59 "Insurance + Futures" projects, 1.097 billion yuan notional principal), educational aid (Ganlin Scholarship Fund), consumption support (99,000 yuan in agricultural product procurement), and establishing a charitable trust - The company established a Rural Revitalization Working Group led by Chairman Luo Xufeng, actively exploring sustainable rural revitalization efforts by leveraging its industry characteristics and advantages[92](index=92&type=chunk) - In the first half of 2024, the company completed **59 "Insurance + Futures" projects**, with an insured value (notional principal) of **1.097 billion yuan**[51](index=51&type=chunk)[93](index=93&type=chunk) - The company initiated and established the Hangzhou Ganlin Scholarship Foundation, which in 2024 supported 51 students from the Nanhua Ganlin Class at Taijiang County National Middle School in Guizhou Province to pass the college entrance exam for undergraduate programs, with 50 admitted to top-tier universities[93](index=93&type=chunk)[94](index=94&type=chunk) - In May 2024, the company purchased **990 units of Tongjiang County agricultural specialty products (zongzi)**, totaling **99,000 yuan**, to provide consumption assistance[95](index=95&type=chunk) - In June 2024, the "Shanben Trust · Zhejiang Gold - Nanhua Charitable Trust" was officially established, with the company contributing **1 million yuan** for public welfare and charitable activities, including rural revitalization[95](index=95&type=chunk) - In the second half of 2024, the company will continue to consolidate poverty alleviation achievements and promote rural revitalization, including industrial assistance, educational support, consumption assistance, and knowledge empowerment[96](index=96&type=chunk) [Section VI Significant Matters](index=32&type=section&id=Section%20VI%20Significant%20Matters) This section covers important corporate events, including the fulfillment of commitments, absence of illegal guarantees, audit arrangements, integrity status, major related-party transactions, and significant contracts [I. Fulfillment of Commitments](index=32&type=section&id=I.%20Fulfillment%20of%20Commitments) The company's controlling shareholder, Hengdian Holdings, and the actual controller, Enterprise Federation, have strictly fulfilled their commitments regarding resolving horizontal competition and shareholding reduction post-lockup period - Hengdian Holdings committed that during its direct or indirect shareholding in Nanhua Futures, it would not engage in any business that is the same as, similar to, or constitutes substantial competition with Nanhua Futures' business scope, whether through equity participation, control, joint venture, cooperation, or any other means[98](index=98&type=chunk) - The Enterprise Federation also committed that during its direct or indirect shareholding in Nanhua Futures, it would not engage in any business that is the same as, similar to, or constitutes substantial competition with Nanhua Futures' business[98](index=98&type=chunk)[100](index=100&type=chunk) - Hengdian Holdings committed that within two years after the expiration of the share lock-up period, the number of shares reduced would not exceed **10%** of its total shares in Nanhua Futures at the time of listing, and the reduction price would not be lower than the offering price of this issuance and listing[100](index=100&type=chunk) - Directors, supervisors, and senior management committed that during their tenure as directors, senior management, or supervisors of Nanhua Futures, they would not transfer more than **25%** of their total shares in the company annually; they also committed not to transfer any shares held within **6 months** after their departure[100](index=100&type=chunk) [III. Illegal Guarantees](index=34&type=section&id=III.%20Illegal%20Guarantees) During the reporting period, the company did not provide any external guarantees in violation of prescribed decision-making procedures - During the reporting period, the company did not provide any external guarantees in violation of prescribed decision-making procedures[8](index=8&type=chunk) [IV. Semi-Annual Report Audit Status](index=35&type=section&id=IV.%20Semi-Annual%20Report%20Audit%20Status) During the reporting period, the company re-appointed Tianjian Certified Public Accountants (Special General Partnership) as its domestic auditor for 2024, which has served the company for 12 years; this semi-annual report is unaudited - During the reporting period, the company re-appointed Tianjian Certified Public Accountants (Special General Partnership) as its domestic auditor for 2024[102](index=102&type=chunk) - This accounting firm has provided audit services to the company for **12 years** since the share reform in 2012[102](index=102&type=chunk) - This semi-annual report is unaudited[7](index=7&type=chunk) [IX. Explanation of the Integrity Status of the Company, its Controlling Shareholder, and Actual Controller during the Reporting Period](index=35&type=section&id=IX.%20Explanation%20of%20the%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller%20during%20the%20Reporting%20Period) During the reporting period, the company, its controlling shareholder, and actual controller maintained good integrity, with no unfulfilled court judgments or significant overdue debts - During the reporting period, the company, its controlling shareholder, and actual controller maintained good integrity, with no unfulfilled court judgments or significant overdue debts[102](index=102&type=chunk) [X. Significant Related-Party Transactions](index=35&type=section&id=X.%20Significant%20Related-Party%20Transactions) This section discloses the company's significant related-party transactions during the reporting period, including joint external investments and adherence to fair and transparent transaction principles [(III) Significant Related-Party Transactions of Joint External Investments](index=36&type=section&id=(III)%20Significant%20Related-Party%20Transactions%20of%20Joint%20External%20Investments) The company jointly invested in Zhejiang Honglanmu Investment Management Co., Ltd. with Zhejiang Nanhua Investment Management Co., Ltd. and Chengdu Huli Enterprise Consulting Management Co., Ltd., with Honglanmu having a registered capital of 12.05 million yuan and a net loss of 1.23 million yuan as of the reporting period end Significant Related-Party Transactions of Joint External Investments | Joint Investor | Related Party Relationship | Investee Company Name | Main Business | Registered Capital (yuan) | Total Assets (yuan) | Net Assets (yuan) | Net Profit (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhejiang Nanhua Investment Management Co., Ltd., Chengdu Huli Enterprise Consulting Management Co., Ltd. | Other | Zhejiang Honglanmu Investment Management Co., Ltd. | Investment management, asset management | 12,050,000 | 5,122,237.19 | 5,050,050.27 | -1,228,998.30 | - As of the end of the reporting period, Nanhua Futures Co., Ltd. held a **24.896%** equity stake in Zhejiang Honglanmu Investment Management Co., Ltd[105](index=105&type=chunk) - The company strictly conducts related-party transactions in accordance with relevant requirements, adhering to principles of fairness, openness, and impartiality[106](index=106&type=chunk) - During the reporting period, the company's ordinary related-party transactions were executed in accordance with the "Resolution on Estimated Ordinary Related-Party Transactions for the Company in 2024" approved at the company's 2023 Annual General Meeting[106](index=106&type=chunk) [XI. Significant Contracts and Their Performance](index=37&type=section&id=XI.%20Significant%20Contracts%20and%20Their%20Performance) This section discloses the company's and its subsidiaries' significant guarantees during the reporting period, totaling 146.03 million yuan, representing 3.72% of the company's net assets, all provided for subsidiaries with a debt-to-asset ratio exceeding 70% [2 Significant Guarantees Performed and Not Yet Performed During the Reporting Period](index=38&type=section&id=2%20Significant%20Guarantees%20Performed%20and%20Not%20Yet%20Performed%20During%20the%20Reporting%20Period) During the reporting period, the company's guarantees for subsidiaries totaled 146.03 million yuan, representing 3.72% of net assets, all for entities with a debt-to-asset ratio exceeding 70%, primarily involving credit guarantees from overseas subsidiaries to their own subsidiaries Total Company Guarantees | Item | Amount (yuan) | | :--- | :--- | | Total guarantees provided to subsidiaries during the reporting period | 146,028,800.00 | | Total outstanding guarantees to subsidiaries at period-end (B) | 146,028,800.00 | | Total guarantees (A+B) | 146,028,800.00 | | Total guarantees as a percentage of the company's net assets (%) | 3.72 | | Debt guarantees provided directly or indirectly to guaranteed entities with a debt-to-asset ratio exceeding 70% (D) | 146,028,800.00 | | Total of the above three guarantee amounts (C+D+E) | 146,028,800.00 | - Explanation of guarantees: These are credit guarantees from overseas subsidiaries to their own subsidiaries, with guarantee agreements signed with banks covering the total credit limit[109](index=109&type=chunk) [Section VII Changes in Shares and Shareholder Information](index=39&type=section&id=Section%20VII%20Changes%20in%20Shares%20and%20Shareholder%20Information) This section provides an overview of changes in the company's share capital and detailed information about its shareholders, including the top ten shareholders [I. Changes in Share Capital](index=39&type=section&id=I.%20Changes%20in%20Share%20Capital) During the reporting period, there were no changes in the company's total share capital or share structure - During the reporting period, there were no changes in the company's total share capital or share structure[113](index=113&type=chunk) [II. Shareholder Information](index=39&type=section&id=II.%20Shareholder%20Information) As of the end of the reporting period, the company had 21,310 common shareholders, with Hengdian Group Holdings Co., Ltd. being the controlling shareholder, holding 69.68% of the shares - As of the end of the reporting period, the total number of common shareholders was **21,310**[114](index=114&type=chunk) Top Ten Shareholders' Shareholding (Excluding Shares Lent via Securities Refinancing) | Shareholder Name | Period-end Shareholding | Percentage (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Hengdian Group Holdings Co., Ltd. | 425,120,900 | 69.68 | Domestic Non-State-Owned Legal Person | | Dongyang Henghua Investment Partnership (Limited Partnership) | 24,480,000 | 4.01 | Domestic Non-State-Owned Legal Person | | Zhejiang Hengdian Import & Export Co., Ltd. | 10,000,000 | 1.64 | Domestic Non-State-Owned Legal Person | | Hengdian Group DMEGC Co., Ltd. | 10,000,000 | 1.64 | Domestic Non-State-Owned Legal Person | | Yang Relie | 5,447,200 | 0.89 | Domestic Natural Person | | HKSCC Nominees Limited | 4,613,146 | 0.76 | Other | | Industrial Bank Co., Ltd. - Southern Financial Theme Flexible Allocation Mixed Securities Investment Fund | 2,131,600 | 0.35 | Unknown | | Shanghai Pudong Development Bank Co., Ltd. - CCB CSI 1000 Enhanced Index Initiating Securities Investment Fund | 1,239,800 | 0.20 | Unknown | | Huaxia Bank Co., Ltd. - Huaxia Zhisheng Pioneer Stock Securities Investment Fund (LOF) | 867,600 | 0.14 | Unknown | | Agricultural Bank of China Co., Ltd. - Tianhong CSI 1000 Enhanced Index Securities Investment Fund | 852,300 | 0.14 | Unknown | - Hengdian Holdings is the company's controlling shareholder; Dongyang Henghua is the company's management shareholding platform, with Hengdian Holdings as the general partner; Hengdian Holdings directly holds **50.59%** of Hengdian DMEGC's equity; Hengdian Holdings directly and indirectly holds **75.00%** of Hengdian Import & Export's equity[118](index=118&type=chunk) [Section VIII Preferred Shares Information](index=41&type=section&id=Section%20VIII%20Preferred%20Shares%20Information) This section confirms the absence of preferred shares related information for the reporting period - During the reporting period, the company had no preferred shares related information[120](index=120&type=chunk) [Section IX Bonds Information](index=42&type=section&id=Section%20IX%20Bonds%20Information) This section details the company's bond issuances, including basic information on sub-bonds, and provides an analysis of interest-bearing debt structure and major liability changes [I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments](index=42&type=section&id=I.%20Corporate%20Bonds%20(Including%20Enterprise%20Bonds)%20and%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments) The company issued two tranches of sub-bonds totaling 500 million yuan, with a coupon rate of 4.98% and a 6-year term, including an issuer's redemption option at the end of the third year [1. Basic Information on Corporate Bonds](index=42&type=section&id=1.%20Basic%20Information%20on%20Corporate%20Bonds) The company issued two tranches of sub-bonds, "22 Nanhua C1" and "22 Nanhua C2," totaling 300 million yuan and 200 million yuan respectively, both with a 4.98% coupon rate and a 6-year term, including an issuer's redemption option at the end of the third year Corporate Bonds Basic Information | Bond Name | Abbreviation | Code | Bond Balance (yuan) | Interest Rate (%) | Maturity Date | | :--- | :--- | :--- | :--- | :--- | :--- | | Nanhua Futures Co., Ltd. 2022 Non-public Issuance of Subordinated Bonds to Professional Investors (Tranche 1) | 22 Nanhua C1 | 194718.SH | 300,000,000 | 4.98 | June 27, 2028 (If the company exercises its redemption option, the maturity date for the redeemed portion of the bonds will be June 27, 2025) | | Nanhua Futures Co., Ltd. 2022 Non-public Issuance of Subordinated Bonds to Professional Investors (Tranche 2) | 22 Nanhua C2 | 182355.SH | 200,000,000 | 4.98 | August 2, 2028 (If the company exercises its redemption option, the maturity date for the redeemed portion of the bonds will be August 2, 2025) | - The company has a redemption option, allowing it to announce whether to exercise the redemption option for each tranche of bonds **30 trading days** before the interest payment date of the third interest-bearing year[124](index=124&type=chunk) - If the company does not exercise its redemption right, each tranche of bonds will continue for the **4th, 5th, and 6th years**, and the coupon rate will be adjusted to the initial coupon rate plus **300 basis points** starting from the fourth interest-bearing year[124](index=124&type=chunk) [(V)Significant Matters Related to Corporate Bonds During the Reporting Period](index=44&type=section&id=(V)Significant%20Matters%20Related%20to%20Corporate%20Bonds%20During%20the%20Reporting%20Period) During the reporting period, the company had no non-operating intercompany receivables or fund borrowings; its consolidated interest-bearing debt balance was 882 million yuan, a 20.18% year-on-year decrease, comprising 509 million yuan in corporate credit bonds and 373 million yuan in bank loans - At the beginning and end of the reporting period, the company's consolidated non-operating intercompany receivables and fund borrowings from other parties were both **0 billion yuan**[126](index=126&type=chunk) - At the beginning and end of the reporting period, the company's consolidated interest-bearing debt balances were **1.105 billion yuan** and **882 million yuan**, respectively, representing a year-on-year change of **-20.18%** in interest-bearing debt during the reporting period[130](index=130&type=chunk) Company's Consolidated Interest-Bearing Debt Structure | Interest-Bearing Debt Category | Within 6 Months (incl.) (billion yuan) | Over 6 Months (billion yuan) | Total Amount (billion yuan) | Percentage of Total Interest-Bearing Debt (%) | | :--- | :--- | :--- | :--- | :--- | | Corporate Credit Bonds | - | 0.509 | 0.509 | 57.71 | | Bank Loans | 0.362 | 0.011 | 0.373 | 42.29 | | **Total** | **0.362** | **0.520** | **0.882** | **100.00** | Major Liabilities and Reasons for Their Changes | Liability Item | Period-end Balance (yuan) | 2023 Year-end Balance (yuan) | Change (%) | Explanation for Change Exceeding 30% | | :--- | :--- | :--- | :--- | :--- | | Trading Financial Liabilities | 107,263,022.21 | 65,001,912.35 | 65.02 | Primarily due to an increase in derivative liabilities | | Futures Investor Protection Fund Payable | 327,816.86 | 669,659.70 | -51.05 | Primarily due to lower provision for futures investor protection fund payable in the semi-annual period compared to the full previous year | | Employee Remuneration Payable | 92,697,245.22 | 133,002,463.38 | -30.30 | Primarily due to lower provision for total employee remuneration in the semi-annual period compared to the full previous year | | Contract Liabilities | 69,924,279.19 | 29,611,101.87 | 136.14 | Primarily due to an increase in deposits received for unexecuted spot contracts | | Fees and Commissions Payable | 7,124,137.22 | 4,912,652.58 | 45.02 | Primarily due to an increase in client fee reductions in the current period | | Other Payables | 1,072,466,887.85 | 1,898,534,899.40 | -43.51 | Primarily due to a decrease in performance bonds received from clients for derivative financial instruments | | Other Current Liabilities | 22,031,900.92 | 16,947,708.34 | 30.00 | Primarily due to an increase in the amount of hedged items in basis trading business | | Lease Liabilities | 19,706,660.60 | 14,788,739.24 | 33.25 | Primarily due to an increase in house lease payables for periods longer than one year | | Deferred Income Tax Liabilities | 1,115,659.40 | 2,714,769.20 | -58.90 | Primarily due to a decrease in taxable temporary differences in the current period | | Other Liabilities | 8,400,720.47 | 14,983,014.82 | -43.93 | Primarily due to a decrease in house lease payables due within one year | [Section X Financial Report](index=46&type=section&id=Section%20X%20Financial%20Report) This section presents the company's comprehensive financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in equity, along with detailed notes on accounting policies and financial risks [II. Financial Statements](index=46&type=section&id=II.%20Financial%20Statements) This section includes Nanhua Futures Co., Ltd.'s consolidated and parent company balance sheets as of June 30, 2024, and consolidated and parent company income statements, cash flow statements, and statements of changes in owners' equity for January-June 2024 Consolidated Balance Sheet (June 30, 2024) | Item | June 30, 2024 (yuan) | December 31, 2023 (yuan) | | :--- | :--- | :--- | | Total Assets | 41,324,380,752.05 | 36,325,522,383.33 | | Total Liabilities | 37,398,276,354.45 | 32,612,603,010.07 | | Total Owners' Equity (or Shareholders' Equity) | 3,926,104,397.60 | 3,712,919,373.26 | Consolidated Income Statement (First Half of 2024) | Item | First Half of 2024 (yuan) | First Half of 2023 (yuan) | | :--- | :--- | :--- | | I. Total Operating Revenue | 2,637,505,189.71 | 3,145,282,203.41 | | III. Operating Profit (Loss indicated by "-") | 270,038,845.79 | 195,338,022.09 | | IV. Total Profit (Total Loss indicated by "-") | 271,204,223.52 | 193,493,137.15 | | V. Net Profit (Net Loss indicated by "-") | 230,476,673.09 | 168,308,741.15 | | 1. Net Profit Attributable to Parent Company Shareholders (Net Loss indicated by "-") | 230,183,757.68 | 168,353,399.71 | | VII. Total Comprehensive Income | 253,449,373.28 | 214,103,249.70 | | VIII. Earnings Per Share: (I) Basic Earnings Per Share (yuan/share) | 0.38 | 0.28 | Consolidated Cash Flow Statement (First Half of 2024) | Item | First Half of 2024 (yuan) | First Half of 2023 (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 2,553,054,337.19 | 1,681,898,165.52 | | Net Cash Flow from Investing Activities | -637,934,613.41 | 249,726,030.02 | | Net Cash Flow from Financing Activities | -167,847,955.34 | 64,625,442.76 | | Net Increase in Cash and Cash Equivalents | 1,741,826,499.80 | 2,003,904,710.91 | | VI. Period-end Balance of Cash and Cash Equivalents | 10,074,881,019.35 | 5,944,764,450.16 | [III. Company Basic Information](index=61&type=section&id=III.%20Company%20Basic%20Information) Nanhua Futures Co., Ltd., formerly Nanhua Futures Co., Ltd., was restructured into a joint-stock company in 2012 and listed on the Shanghai Stock Exchange in 2019, with a registered capital of 610.07 million yuan, primarily engaged in futures brokerage, asset management, and investment consulting - Nanhua Futures Co., Ltd., formerly Nanhua Futures Co., Ltd., was restructured into a joint-stock company on October 18, 2012, and listed on the Shanghai Stock Exchange on August 30, 2019[161](index=161&type=chunk) - The company's registered capital is **610.065893 million yuan**, with a total of **610.065893 million shares**[161](index=161&type=chunk) - The company operates in the futures industry, primarily providing services such as commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, and mutual fund sales agency[161](index=161&type=chunk) - The company consolidates **24 subsidiaries**, including Grand China International Financial Co., Ltd. and Zhejiang Nanhua Capital Management Co., Ltd., as well as **5 structured entities**, including Nanhua Futures Yuanheng No. 2 Single Asset Management Plan, into its financial statements for the reporting period[162](index=162&type=chunk) [IV. Basis for Preparation of Financial Statements](index=61&type=section&id=IV.%20Basis%20for%20Preparation%20of%20Financial%20Statements) The company's financial statements are prepared on a going concern basis, with no significant doubts about its ability to continue as a going concern for the next 12 months from the end of the reporting period - The company's financial statements are prepared on a going concern basis[163](index=163&type=chunk) - There are no matters or circumstances that cause significant doubt about the company's ability to continue as a going concern for the next **12 months** from the end of the reporting period[164](index=164&type=chunk) [V. Significant Accounting Policies and Estimates](index=61&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's adherence to accounting standards, accounting period, operating cycle, functional currency, materiality, business combinations, consolidated financial statements, financial instrument classification, inventory, contract costs, revenue recognition, government grants, deferred taxes, leases, general risk reserves, segment reporting, and hedge accounting - The financial statements prepared by the company comply with the requirements of enterprise accounting standards, accurately and completely reflecting the company's financial position, operating results, changes in shareholders' equity, and cash flows[166](index=166&type=chunk) - The company's accounting year runs from January 1 to December 31 of the Gregorian calendar, and its operating cycle is short, using **12 months** as the liquidity classification standard for assets and liabilities[167](index=167&type=chunk)[168](index=168&type=chunk) - Financial assets are initially classified into three categories: financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive income, and financial assets measured at fair value through profit or loss[178](index=178&type=chunk) - Futures brokerage fee income is recognized when economic benefits related to the transaction can flow into the company, the related income can be reliably measured, and funds are settled with clients for buying and selling futures contracts or with exchanges[232](index=232&type=chunk) - The company's commodity trading business involves performance obligations fulfilled at a specific point in time, and commodity trading revenue is recognized when commodity ownership is transferred, payment has been received or a collection voucher obtained, and related economic benefits are likely to flow in[235](index=235&type=chunk) - Hedging includes fair value hedges, cash flow hedges, and hedges of net investments in foreign operations; for qualifying hedges, hedge accounting methods are applied[249](index=249&type=chunk) [VI. Taxation](index=85&type=section&id=VI.%20Taxation) This section discloses the company's main tax categories and rates, including VAT, property tax, urban maintenance and construction tax, education surcharges, and corporate income tax, with varying rates for different entities and some subsidiaries enjoying small-profit enterprise tax incentives Main Tax Categories and Rates | Tax Category | Tax Basis | Tax Rate (%) | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Output tax calculated based on sales of goods and taxable services as per tax laws, minus deductible input tax for the current period, with the difference being VAT payable | 6%, 9%, 13% | | Property Tax | For ad valorem taxation, 1.2% of the remaining value after a one-time deduction of 30% from the original value of the property; for rental taxation, 12% of rental income | 1.2%, 12% | | Urban Maintenance and Construction Tax | Actual amount of turnover tax paid | 7%, 5% | | Education Surcharge | Actual amount of turnover tax paid | 3% | | Local Education Surcharge | Actual amount of turnover tax paid | 2% | | Goods and Services Tax (GST) | Actual amount of turnover tax paid | 9%[Note 1] | | Corporate Income Tax | Taxable income | 25%, 8.25%, 13.5%, 16.5%, 19%, 20%, 30.5%, 17%, 0% | - Heilongjiang Henghua Agricultural Industry Service Co., Ltd. is a small-profit enterprise; according to relevant policies, the portion of annual taxable income not exceeding **3 million yuan** is subject to a **25%** reduction in taxable income and a **20%** corporate income tax rate[255](index=255&type=chunk) [VII. Notes to Consolidated Financial Statement Items](index=86&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed notes on various consolidated financial statement items, including cash, settlement reserves, margin receivables, trading financial assets, inventory, long-term equity investments, fixed assets, intangible assets, deferred tax assets/liabilities, short-term borrowings, margin payables, trading financial liabilities, and owners' equity Details of Cash and Bank Balances by Category | Item | Period-end Balance (yuan) | Period-beginning Balance (yuan) | | :--- | :--- | :--- | | Cash on Hand | 49,844.40 | 104,387.07 | | Bank Deposits | 22,616,337,896.52 | 20,428,493,405.02 | | Including: Futures Margin Deposits | 20,687,539,789.15 | 18,576,301,605.77 | | Other Cash and Bank Balances | 150,157,490.38 | 67,664,821.37 | | **Total** | **22,766,545,231.30** | **20,496,262,613.46** | | Including: Total Funds Held Overseas | 5,125,510,173.58 | 4,677,492,616.53 | - As of June 30, 2024, cash and bank balances included **4,000.00 yuan** in frozen business funds, **697,144.00 yuan** in lease contract deposits, and **22,217,632.92 yuan** in risk reserves, all subject to restrictions[259](index=259&type=chunk) Details of Settlement Reserve by Category | Category | Book Balance (yuan) | Percentage (%) | Bad Debt Provision (yuan) | Provision Rate (%) | Book Value (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for bad debts by portfolio | 44,757,169.26 | 100 | 1,576,322.52 | 3.52 | 43,180,846.74 | Details of Monetary Margin Receivable by Category | Category | Book Balance (yuan) | Percentage (%) | Bad Debt Provision (yuan) | Provision Rate (%) | Book Value (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Provision for bad debts by portfolio | 12,150,805,352.85 | 100 | 43,465,452.54 | 0.36 | 12,107,339,900.30 | Details of Pledged Margin Receivable | Exchange Name | Period-end Balance (yuan) | Period-beginning Balance (yuan) | | :--- | :--- | :--- | | Shanghai Futures Exchange | 1,275,392,252.00 | 1,197,251,480.00 | | Zhengzhou Commodity Exchange | 47,098,168.00 | 310,610,416.00 | | Dalian Commodity Exchange | 17,499,328.00 | 245,767,232.00 | | China Financial Futures Exchange | 78,305,699.20 | 67,633,910.40 | | Shanghai International Energy Exchange Co., Ltd. | 31,628,800.00 | 16,006,752.00 | | Guangzhou Futures Exchange | 12,311,100.00 | 1,359,360.00 | | **Total** | **1,462,235,347.20** | **1,838,629,150.40** | Trading Financial Assets | Item | Period-end Balance (yuan) | Period-beginning Balance (yuan) | | :--- | :--- | :--- | | Financial assets classified as at fair value through profit or loss | 3,570,100,858.59 | 3,824,226,705.88 | | Including: Debt instrument investments | 1,953,545,539.85 | 2,067,431,181.61 | | Equity instrument investments | 876,861,642.82 | 686,687,375.77 | | Derivative financial assets | 739,693,675.92 | 1,070,104,824.28 | | Bank wealth management products | - | 3,324.22 | | **Total** | **3,570,100,858.59** | **3,824,226,705.88** | Inventory | Item | Period-end Balance (yuan) | Impairment Provision (yuan) | Book Value (yuan) | | :--- | :--- | :--- | :--- | | Merchandise Inventory | 273,009,490.25 | - | 273,009,490.25 | | Including: Hedged Items | 272,938,458.52 | - | 272,938,458.52 | | **Total** | **273,009,490.25** | **-** | **273,009,490.25** | Classification of Long-term Equity Investments | Item | Period-end Book Value (yuan) | Period-beginning Book Value (yuan) | | :--- | :--- | :--- | | Investments in Joint Ventures | 1,387,865.72 | 656,784.70 | | Investments in Associates | 657,514.44 | 1,693,837.14 | | **Total** | **2,045,380.16** | **2,350,621.84** | Fixed Assets | Item | Period-end Balance (yuan) | Period-beginning Balance (yuan) | | :--- | :--- | :--- | | Original Cost of Fixed Assets | 316,044,015.31 | 315,115,358.57 | | Less: Accumulated Depreciation | 83,138,189.36 | 72,224,831.45 | | **Total Fixed Assets** | **232,905,825.95** | **242,890,527.12** | Right-of-Use Assets | Item | Period-end Book Value (yuan) | Period-beginning Book Value (yuan) | | :--- | :--- | :--- | | Buildings and Structures | 30,085,338.50 | 31,313,461.80 | | **Total** | **30,085,338.50** | **31,313,461.80** | Intangible Assets | Item | Period-end Book Value (yuan) | Period-beginning Book Value (yuan) | | :--- | :--- | :--- | | Land Use Rights | 150,689,319.11 | 153,152,904.71 | | Software | 7,351,521.31 | 8,353,774.47 | | **Total** | **158,040,840.42** | **161,506,679.18** | Net Deferred Income Tax Assets/Liabilities After Offset | Item | Period-end Offset Amount of Deferred Income Tax Assets and Liabilities (yuan) | Period-end Balance of Deferred Income Tax Assets or Liabilities After Offset (yuan) | | :--- | :--- | :--- | | Deferred Income Tax Assets | 36,992,312.26 | 1,318,667.95 | | Deferred Income Tax Liabilities | 41,912,177.15 | 1,115,659.40 | Assets Restricted by Ownership or Right of Use | Item | Period-end Book Balance (yuan) | Restriction Type | Restriction Details | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 22,914,776.92 | Frozen | Business frozen funds, lease contract deposits, risk reserves | | Trading Financial Assets | 1,964,231,539.85 | Pledged, Frozen | Government bond funds and money market funds pledged to exchanges as margin; securities investment funds held for a period of no less than 3 years | | Inventory | 129,919,489.87 | Pledged | Pledged through warehouse receipts to offset exchange margin | Short-term Borrowing Classification | Item | Period-end Balance (yuan) | Period-beginning Balance (yuan) | | :--- | :--- | :--- | | Pledged Loans | 130,466,704.00 | 15,120,888.00 | | Guaranteed Loans | 130,000,000.00 | 200,220,458.33 | | Credit Loans | 242,836,912.24 | 394,319,236.42 | | **Total** | **503,303,616.24** | **609,660,582.75** | Mon

Core Viewpoint - Nanhua Futures reported a significant decline in revenue for the first half of 2025, indicating challenges in the market environment while managing to achieve slight growth in net profit [1] Financial Performance - The company achieved an operating revenue of 1.101 billion yuan, a year-on-year decrease of 58.27% [1] - The net profit attributable to shareholders was 231 million yuan, reflecting a year-on-year increase of 0.46% [1] - Basic earnings per share stood at 0.38 yuan [1] Client Equity Scale - As of June 30, 2025, the client equity scale for the domestic futures brokerage business was 27.347 billion yuan [1]

[Important Notice](index=2&type=section&id=Important%20Notice) This unaudited semi-annual report confirms no profit distribution or capital reserve to share capital plans for H1 2025, noting significant operational risks linked to macroeconomic and capital market trends - This semi-annual report is unaudited[4](index=4&type=chunk) - The company has no profit distribution plan or capital reserve to share capital plan for the first half of 2025[5](index=5&type=chunk) - The company's business is highly correlated with domestic and international macroeconomic environment and capital market trends, facing significant operational risks such as market risk, credit risk, operational risk, and information system risk[8](index=8&type=chunk) [Section I Definitions](index=4&type=section&id=Section%20I%20Definitions) This section provides key definitions used throughout the report, including the company's full name, reporting period, and controlling entities - Company full name: Nanhua Futures Co., Ltd., abbreviation: Nanhua Futures[13](index=13&type=chunk) - Reporting period: January-June 2025; End of reporting period: June 30, 2025[14](index=14&type=chunk) - Actual controller: Dongyang Hengdian Group Economic Enterprise Federation; Controlling shareholder: Hengdian Group Holdings Co., Ltd[13](index=13&type=chunk) [Section II Company Profile and Key Financial Indicators](index=5&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information, contact details, changes in fundamental situation, information disclosure, stock summary, and key financial data and indicators for the reporting period [I. Company Information](index=5&type=section&id=I.%20Company%20Information) This section introduces Nanhua Futures' basic information, including legal representative, registered capital, net capital, and various business qualifications of the company and its domestic and overseas subsidiaries, demonstrating the company's extensive layout in futures brokerage, asset management, fund sales, and overseas financial services - Company Legal Representative: Luo Xufeng; Company General Manager: Jia Xiaolong[16](index=16&type=chunk) - **Key Indicators** | Indicator | End of Current Reporting Period | End of Previous Year | | :--- | :--- | :--- | | Registered Capital | 610,065,893 yuan | 610,065,893 yuan | | Net Capital | 1,434,391,919.04 yuan | 1,509,669,605.44 yuan | - The company's business scope includes commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, and public fund sales[17](index=17&type=chunk) - The company and its subsidiaries (e.g., Nanhua Capital, Nanhua Fund, Heng Hua International) hold multiple domestic and overseas business qualifications, covering risk management, public funds, securities trading, and asset management[17](index=17&type=chunk)[19](index=19&type=chunk)[22](index=22&type=chunk) [II. Contact Persons and Information](index=9&type=section&id=II.%20Contact%20Persons%20and%20Information) This section provides the names, contact addresses, telephone numbers, fax numbers, and email addresses of the company's Board Secretary and Securities Affairs Representative for investor communication - Board Secretary: Zhong Yiqiang; Securities Affairs Representative: Yu Fengduo[30](index=30&type=chunk) - Contact Address: Room 1201, Hengdian Building, Shangcheng District, Hangzhou City, Zhejiang Province; Telephone: 0571-87833551; Email: nanhua-ir@nawaa.com[30](index=30&type=chunk) [III. Brief Introduction to Changes in Basic Information](index=9&type=section&id=III.%20Brief%20Introduction%20to%20Changes%20in%20Basic%20Information) This section briefly introduces the historical changes in the company's registered address and provides basic information such as the company's office address, website, and email address - The company's registered address was changed in October 2021 from “Floors 2 and 3, No. 193 Xihu Avenue, Hangzhou City” to “Rooms 301, 401, 501, 901, 1001, 1101, 1201, Hengdian Building, Shangcheng District, Hangzhou City”[32](index=32&type=chunk) - Company Website: http://www.nanhua.net; Email: nanhua-ir@nawaa.com[32](index=32&type=chunk) [IV. Brief Introduction to Changes in Information Disclosure and Document Storage Locations](index=10&type=section&id=IV.%20Brief%20Introduction%20to%20Changes%20in%20Information%20Disclosure%20and%20Document%20Storage%20Locations) This section specifies the newspapers selected by the company for information disclosure, the website address for publishing the semi-annual report, and the location where the company's semi-annual report is stored - Newspapers selected by the company for information disclosure: China Securities Journal, Shanghai Securities News, Securities Times[34](index=34&type=chunk) - Website address for publishing the semi-annual report: http://www.sse.com.cn[34](index=34&type=chunk) - Location for storing the company's semi-annual report: Board Secretary's Office, 12th Floor, Hengdian Building, Shangcheng District, Hangzhou City, Zhejiang Province[34](index=34&type=chunk) [V. Company Stock Summary](index=10&type=section&id=V.%20Company%20Stock%20Summary) This section provides basic information about the company's stock, including its type, listing exchange, stock abbreviation, and stock code - Company Stock Type: A-share; Listing Exchange: Shanghai Stock Exchange; Stock Abbreviation: Nanhua Futures; Stock Code: 603093[35](index=35&type=chunk) [VII. Key Accounting Data and Financial Indicators](index=10&type=section&id=VII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section discloses the company's key accounting data and financial indicators for the first half of 2025, showing a significant year-on-year decrease in operating revenue but a slight increase in net profit attributable to the parent company, along with the parent company's net capital and risk control indicators Key Accounting Data (January-June 2025) | Indicator | Amount (RMB) | Prior Year Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,100,653,087.93 | 2,637,505,189.71 | -58.27 | | Total Profit | 257,449,985.42 | 271,204,223.52 | -5.07 | | Net Profit Attributable to Parent Company Shareholders | 231,253,620.05 | 230,183,757.68 | 0.46 | | Net Cash Flow from Operating Activities | -5,108,091,953.72 | 2,553,054,337.19 | -300.08 | | Total Assets (End of Current Reporting Period) | 46,878,160,222.79 | 48,863,396,701.97 | -4.06 | | Equity Attributable to Parent Company Shareholders (End of Current Reporting Period) | 4,282,167,984.75 | 4,115,254,867.13 | 4.06 | Key Financial Indicators (January-June 2025) | Key Financial Indicator | Current Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.38 | 0.38 | - | | Basic Earnings Per Share After Deducting Non-recurring Gains and Losses (RMB/share) | 0.38 | 0.37 | 2.70 | | Weighted Average Return on Net Assets (%) | 5.51 | 6.03 | Decrease of 0.52 percentage points | | Weighted Average Return on Net Assets After Deducting Non-recurring Gains and Losses (%) | 5.52 | 5.99 | Decrease of 0.47 percentage points | Parent Company Net Capital and Risk Control Indicators (June 30, 2025) | Item | End of Current Reporting Period | End of Previous Year | | :--- | :--- | :--- | | Net Capital | 1,434,391,919.04 yuan | 1,509,669,605.44 yuan | | Ratio of Net Capital to Total Risk Capital Reserve (%) | 180 | 166 | | Ratio of Net Capital to Net Assets (%) | 46 | 48 | | Ratio of Current Assets to Current Liabilities (%) | 641 | 525 | | Ratio of Liabilities to Net Assets (%) | 34 | 28 | | Settlement Reserve Amount | 1,072,707,434.00 yuan | 1,160,380,887.58 yuan | [IX. Non-recurring Gains and Losses Items and Amounts](index=11&type=section&id=IX.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the company's non-recurring gains and losses items and their amounts for the first half of 2025, which collectively resulted in a negative value, primarily including gains and losses from disposal of non-current assets, government subsidies, and other non-operating income and expenses Non-recurring Gains and Losses Items and Amounts (January-June 2025) | Non-recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Gains and losses from disposal of non-current assets | 272,377.90 | | Government subsidies included in current profit and loss | 242,948.69 | | Other non-operating income and expenses apart from the above items | -1,224,888.34 | | Less: Income tax impact | -188,358.07 | | Impact on minority interests (after tax) | 9,448.13 | | Total | -530,651.81 | [Section III Management Discussion and Analysis](index=12&type=section&id=Section%20III%20Management%20Discussion%20and%20Analysis) This section provides a comprehensive discussion and analysis of the company's industry, principal business operations, financial performance, core competencies, and risk factors during the reporting period [I. Description of the Company's Industry and Principal Business Operations During the Reporting Period](index=12&type=section&id=I.%20Description%20of%20the%20Company%27s%20Industry%20and%20Principal%20Business%20Operations%20During%20the%20Reporting%20Period) In the first half of 2025, the global economic environment was complex, while China's futures market maintained stable development with significant year-on-year growth in trading volume and value. The company's principal businesses cover futures brokerage, wealth management, risk management, and overseas financial services, with clear definitions and operating models for each segment [(I) Description of the Company's Industry During the Reporting Period](index=12&type=section&id=(I)%20Description%20of%20the%20Company%27s%20Industry%20During%20the%20Reporting%20Period) The futures market in the first half of 2025 saw significant growth in trading volume and value, with continuous improvement in product variety and optimization of market participant structure, alongside ongoing regulatory enhancements - From January to June 2025, the national futures market's cumulative trading volume reached **4.076 billion lots**, a year-on-year increase of **17.82%**; cumulative trading value reached **339.73 trillion yuan**, a year-on-year increase of **20.68%**[43](index=43&type=chunk) - The futures market product system continues to improve, and the structure of market participants is continuously optimizing, with institutionalization and industrialization becoming increasingly prominent[43](index=43&type=chunk)[44](index=44&type=chunk) - The China Securities Regulatory Commission (CSRC) continues to advance the construction of the futures industry's legal and regulatory system, issuing the "Measures for the Administration of Programmed Trading in the Futures Market (Trial)" and soliciting public opinions on the "Provisions on the Classification Evaluation of Futures Companies (Draft for Comment)"[43](index=43&type=chunk)[44](index=44&type=chunk) [(II) Description of the Company's Principal Business Operations During the Reporting Period](index=13&type=section&id=(II)%20Description%20of%20the%20Company%27s%20Principal%20Business%20Operations%20During%20the%20Reporting%20Period) The company's principal businesses encompass futures brokerage, wealth management, risk management, and overseas financial services, each with distinct operational models and offerings - The company's principal businesses include futures brokerage, wealth management, risk management, overseas financial services, and futures investment consulting[44](index=44&type=chunk) - Wealth management business is primarily divided into three parts: asset management, public fund business, and public fund sales[45](index=45&type=chunk) - Risk management business provides over-the-counter (OTC) derivatives, basis trading, market-making, and other services through Nanhua Capital and its subsidiaries[46](index=46&type=chunk) - Overseas financial services business is conducted through Heng Hua International and its subsidiaries, covering futures brokerage, asset management, securities brokerage, and other areas[47](index=47&type=chunk) [II. Discussion and Analysis of Operations](index=14&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operations) In the first half of 2025, the company achieved steady development in a complex market environment, focusing on "institutionalization, industrialization, and internationalization" strategies, enhancing its service to the real economy through multi-business and domestic-overseas synergy, with significant growth in overseas brokerage and asset management businesses [(I) Futures Brokerage Business](index=14&type=section&id=(I)%20Futures%20Brokerage%20Business) The company strengthened its futures brokerage business by enhancing team building, optimizing service processes, and developing new service brands to cater to institutional and industrial clients - The company focuses on "institutionalization, industrialization, and internationalization" market development trends, strengthening business team building, optimizing service processes, and improving differentiated service levels[47](index=47&type=chunk) - Two new service brands, "Nanhua Xingyunhui" and "Nanhua Industrial Research Tour," were launched to intensify efforts in developing listed companies and leading enterprises in industrial chains as clients[48](index=48&type=chunk) - As of June 30, 2025, the company's domestic futures brokerage client equity scale was **27.347 billion yuan**[48](index=48&type=chunk) [(II) Risk Management Business](index=14&type=section&id=(II)%20Risk%20Management%20Business) The risk management business expanded its product offerings in OTC derivatives, actively participated in rural revitalization through "insurance + futures" projects, and achieved significant trading volumes in basis trading and market-making - OTC derivatives business added new products such as index enhancement, binary snowball, and European snowball, with a new notional principal of **31.856 billion yuan**[49](index=49&type=chunk) - In the field of rural revitalization, **45 "insurance + futures" projects** were carried out, providing **746 million yuan** in risk protection for agricultural entities[50](index=50&type=chunk) - Basis trading business accumulated new trade volume of **1.406 billion yuan**, actively promoting the launch of new varieties such as caustic soda, scrap steel, and alumina[50](index=50&type=chunk) - Market-making business covered **36 varieties** (14 options, 22 futures), achieving a trading volume of **200.573 billion yuan**[50](index=50&type=chunk) [(III) Wealth Management Business](index=15&type=section&id=(III)%20Wealth%20Management%20Business) The wealth management business saw substantial growth in public fund and asset management scales, supported by enhanced investment research capabilities and strategic initiatives - Nanhua Fund's outstanding public fund scale reached **21.527 billion yuan**, an increase of **45.40%** from the end of last year[51](index=51&type=chunk) - The company's asset management business scale was **255 million yuan**, an increase of **96 million yuan** from the end of last year, a growth of **60.38%**[52](index=52&type=chunk) - Established a "Fixed Income + Strategy Group" and an "Index Enhancement Pilot Group" to deepen investment research capabilities and refine the "macro-industry-individual stock" three-tier analysis framework[51](index=51&type=chunk) [(IV) Overseas Financial Services Business](index=15&type=section&id=(IV)%20Overseas%20Financial%20Services%20Business) Overseas financial services business achieved significant growth in client equity and asset management scale, expanding its global presence and obtaining key clearing memberships and LME warehouse receipt holding qualifications - As of the end of June 2025, overseas brokerage client equity totaled **17.768 billion Hong Kong dollars**, a year-on-year increase of **32.25%**[53](index=53&type=chunk) - Overseas asset management business totaled **3.376 billion Hong Kong dollars**, a year-on-year increase of **30.10%**[53](index=53&type=chunk) - Overseas subsidiary Nanhua USA was approved as a clearing member of Cboe Clear U.S., LLC[53](index=53&type=chunk) - Heng Hua International became one of the first LME warehouse receipt holding institutions in Hong Kong, bringing new opportunities for deep cultivation in the Asian metal market[53](index=53&type=chunk) [III. Analysis of Core Competencies During the Reporting Period](index=16&type=section&id=III.%20Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company's core competitiveness lies in its comprehensive derivatives business license layout, covering futures brokerage, risk management, wealth management, and overseas financial services, achieving multi-business synergy. Concurrently, the company has established a robust risk control and compliance management system, possesses an excellent management team, and continuously invests in financial technology to enhance digitalized operations and compliance management capabilities [(I) The Company's Derivatives Business License Layout is Relatively Comprehensive](index=16&type=section&id=(I)%20The%20Company%27s%20Derivatives%20Business%20License%20Layout%20is%20Relatively%20Comprehensive) The company has established a comprehensive financial service platform with a complete derivatives business license layout, enabling synergistic development across various business segments, including spot and futures, on-exchange and OTC, public and private funds, domestic and international, and online and offline operations - The company has formed a comprehensive financial service platform covering diverse businesses, achieving synergistic development of spot and futures, on-exchange and OTC, public and private funds, domestic and international, and online and offline businesses[54](index=54&type=chunk) - Futures brokerage business is a member of SHFE, DCE, ZCE, CFFEX, GFEX, and INE, and a trading participant of SSE and SZSE[54](index=54&type=chunk) - Risk management business focuses on basis trading, OTC derivatives, and market-making, serving agriculture through "insurance + futures"[55](index=55&type=chunk) - Overseas financial services business, through Heng Hua International and its subsidiaries, is strategically located in major global financial centers and holds licenses for futures, securities, and asset management[56](index=56&type=chunk) [(II) Comprehensive Risk Control and Compliance Management System](index=17&type=section&id=(II)%20Comprehensive%20Risk%20Control%20and%20Compliance%20Management%20System) The company has established a four-tier risk management organizational structure, continuously improved internal management systems, and enhanced compliance and risk control through digital platforms for dynamic monitoring and stress testing - Established a four-tier risk management organizational structure: Board of Directors, Board Special Committees, Chief Risk Officer, Operating Management, and Business Operating Departments[56](index=56&type=chunk) - Continuously improved internal management systems, strengthened compliance and risk control systems, and refined internal control measures such as white-list management for underlying assets and negative trader management[56](index=56&type=chunk) - Achieved dynamic monitoring and stress testing of market risk, credit risk, and liquidity risk through the construction of a digital risk management platform[56](index=56&type=chunk) [(III) Excellent Management Capabilities and a Dynamic Management Team](index=17&type=section&id=(III)%20Excellent%20Management%20Capabilities%20and%20a%20Dynamic%20Management%20Team) The company boasts an experienced, capable, and youthful senior management team, with Chairman Luo Xufeng having over 30 years of futures industry experience, consistently recognized for outstanding management - The company's senior management team is experienced, highly capable, and youthful, with Chairman Luo Xufeng possessing over **30 years** of experience in the futures industry[56](index=56&type=chunk) - The management team has been consecutively awarded "China Futures Company Gold Medal Management Team" for many years, and Chairman Luo Xufeng has been consecutively awarded "Best Helmsman of China Futures Company"[56](index=56&type=chunk) [(IV) Increasingly Enhanced FinTech Capabilities](index=17&type=section&id=(IV)%20Increasingly%20Enhanced%20FinTech%20Capabilities) The company has received multiple FinTech awards, developed intelligent research and risk management systems, and is actively embracing large language models to build autonomous AI capabilities and explore innovative applications - The company has won multiple FinTech development awards, including the futures spot trading risk management system, Shenghua derivatives system, and integrated investment research and service platform project[57](index=57&type=chunk) - The futures intelligent research report writing system based on large language models was shortlisted for the Shanghai FinTech Industry Alliance's 2024 Artificial Intelligence Large Model Financial Sector Demonstration Scenarios and Innovation Cases[57](index=57&type=chunk) - Built a new generation of intelligent data infrastructure and independently developed Nanhua Investment Research Platform, Data Interconnection Platform, Nanhua Tong APP, Ruihua Risk Management System, and more[57](index=57&type=chunk) - Actively embracing large models, building autonomous AI core capabilities, exploring multi-scenario innovative applications, and upgrading new business models[58](index=58&type=chunk)[59](index=59&type=chunk) [IV. Key Operating Performance During the Reporting Period](index=18&type=section&id=IV.%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) This section provides a detailed analysis of the changes and reasons for key financial statement items during the reporting period, analyzes asset and liability conditions, including the scale of overseas assets and restricted major assets, and discloses the operating performance of major controlled and investee companies and the company's controlled structured entities [(I) Analysis of Principal Business](index=18&type=section&id=(I)%20Analysis%20of%20Principal%20Business) This section analyzes the significant changes in key financial statement items, such as investment income, fair value changes, and cash flows, primarily driven by risk management business performance and changes in funds held at exchanges Financial Statement Related Item Variation Analysis (January-June 2025) | Item | Current Period Amount (Yuan) | Prior Year Period Amount (Yuan) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 129,887,242.08 | -73,560,760.14 | 276.57 | Primarily due to increased futures closing gains/losses from the company's risk management business | | Net Exposure Hedge Income | -6,156,986.20 | 8,968,282.76 | -168.65 | Primarily due to decreased holding gains/losses from hedged items in risk management business | | Fair Value Change Income | -45,715,569.43 | 86,110,190.11 | -153.09 | Primarily due to decreased futures holding gains/losses from the company's risk management business | | Exchange Gains | 9,161,337.94 | -3,835,591.12 | 338.85 | Primarily due to exchange rate changes of non-functional currency in overseas subsidiaries | | Other Operating Income | 524,577,749.24 | 1,995,750,713.28 | -73.72 | Certain trading businesses recognized revenue using the net method | | Research and Development Expenses | 9,233,522.01 | 18,064,023.61 | -48.88 | Primarily due to reduced R&D projects in the current period | | Net Cash Flow from Operating Activities | -5,108,091,953.72 | 2,553,054,337.19 | -300.08 | Primarily due to increased funds deposited in exchanges in the current period | | Net Cash Flow from Investing Activities | 703,187,899.09 | -637,934,613.41 | 210.23 | Primarily due to increased redemption amount of maturing bank time deposits compared to the previous period | | Net Cash Flow from Financing Activities | 110,070,886.55 | -167,847,955.34 | 165.58 | Primarily due to new issuance of subordinated bonds this year | [(III) Analysis of Assets and Liabilities](index=19&type=section&id=(III)%20Analysis%20of%20Assets%20and%20Liabilities) This section analyzes the company's asset and liability structure, highlighting the significant portion of overseas assets and detailing the types and reasons for restricted major assets - Overseas assets amounted to **16,239,855,748.44 yuan**, accounting for **34.64%** of total assets[63](index=63&type=chunk) Major Asset Restrictions as of the End of the Reporting Period | Item | Book Value at Period End (Yuan) | Restriction Type | Reason for Restriction | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 28,003,026.53 | Frozen | Business frozen funds, lease contract deposits, risk reserves | | Financial Assets Held for Trading | 1,415,161,204.19 | Pledged, Frozen | Government bond funds and money market funds pledged at exchanges as margin; Securities investment funds | | Inventories | 166,375,901.91 | Pledged | Warehouse receipts pledged as margin at Shanghai Futures Exchange, Dalian Commodity Exchange | | Total | 1,609,540,132.63 | | | [(IV) Analysis of Investment Status](index=20&type=section&id=(IV)%20Analysis%20of%20Investment%20Status) This section provides an overview of the operating model and financial performance of the company's overseas assets, specifically focusing on Heng Hua International Overseas Asset Operating Model and Financial Data | Overseas Asset Name | Operating Model | Current Period Operating Revenue (10,000 Yuan) | Current Period Net Profit (10,000 Yuan) | | :--- | :--- | :--- | :--- | | Heng Hua International | Provides overseas financial services, including futures brokerage, asset management, securities brokerage, etc. | 32,689.26 | 22,105.42 | [(VI) Analysis of Major Controlled and Investee Companies](index=21&type=section&id=(VI)%20Analysis%20of%20Major%20Controlled%20and%20Investee%20Companies) This section provides a financial overview of the company's major subsidiaries, including their principal businesses, registered capital, and net profit, and notes the deregistration of a non-operational subsidiary Financial Situation of Major Subsidiaries (January-June 2025) | Company Name | Principal Business | Registered Capital (10,000 Yuan) | Net Profit (10,000 Yuan) | | :--- | :--- | :--- | :--- | | Heng Hua International Financial Co., Ltd. | Brokerage, clearing, asset management, and other overseas financial services | 70,531.89 | 22,105.42 | | Zhejiang Nanhua Capital Management Co., Ltd. | OTC derivatives, basis trading, market-making, and other risk management services | 70,000.00 | 803.03 | | Nanhua Fund Management Co., Ltd. | Public fund raising, sales, asset management, specific client asset management | 25,000.00 | -617.92 | - During the reporting period, HENGHUA Capital Limited was deregistered; this company was not operational and had no impact on overall production, operations, or performance[69](index=69&type=chunk) [(VII) Information on Structured Entities Controlled by the Company](index=22&type=section&id=(VII)%20Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) This section states that as of June 30, 2025, six asset management plans managed and invested in by the company and its subsidiaries were included in the consolidated financial statements due to the company possessing substantive rights and an expectation of variable returns with a comprehensive yield greater than 30% - As of June 30, 2025, **6 asset management plans** managed and invested in by the company and its subsidiaries were included in the consolidated financial statements because the company possessed substantive rights and an expectation of variable returns with a comprehensive yield greater than **30%**[69](index=69&type=chunk) [V. Other Disclosures](index=22&type=section&id=V.%20Other%20Disclosures) This section details the various risks the company may face and its prevention strategies, along with the progress of the company's "Quality Improvement, Efficiency Enhancement, and Return Focus" action plan, including preparations for listing in Hong Kong, completion of share repurchases, and continuous strengthening of investor relations management [(I) Potential Risks](index=22&type=section&id=(I)%20Potential%20Risks) The company faces various operational risks, including market, credit, operational, regulatory, and information system risks, for which it has implemented specific control and prevention measures across its business segments - The company's operations face market risk, credit risk, operational risk, regulatory risk, and information system risk[71](index=71&type=chunk) - For futures brokerage business, market risk is controlled through measures such as adjusting margin levels and risk simulations[76](index=76&type=chunk) - For risk management business, market risk is controlled by calculating hedging thresholds, setting stop-loss points, and real-time monitoring of asset price fluctuations[77](index=77&type=chunk) - Credit risk is mitigated by establishing a client evaluation system and requiring performance bonds[78](index=78&type=chunk) - Operational risk is prevented by establishing daily operational systems, strict business processes and authority segregation, and dual-person review[78](index=78&type=chunk) - Regulatory risk is addressed by improving the company's overall internal control system and using modern management systems for full-process compliance risk monitoring[79](index=79&type=chunk)[81](index=81&type=chunk) - Information system risk is managed by building IT systems referencing industry standards, establishing multi-center data rooms, using a main trading system and multiple vendor trading systems, and setting up disaster recovery[81](index=81&type=chunk) [(II) Other Disclosure Items](index=27&type=section&id=(II)%20Other%20Disclosure%20Items) The company is actively preparing for a Hong Kong listing, has completed a share repurchase, implemented its 2024 profit distribution plan, and continues to prioritize investor relations management - The company is actively preparing for a Hong Kong listing to broaden financing channels, attract high-end overseas talent, and accelerate overseas business expansion[84](index=84&type=chunk) - The company has completed its share repurchase, cumulatively repurchasing **5,681,234 shares** for a total payment of **50,088,766.66 yuan**, accounting for **0.93%** of the total share capital[85](index=85&type=chunk) - The 2024 profit distribution plan has been implemented, distributing a cash dividend of **0.76 yuan (tax inclusive)** per 10 shares to all shareholders, totaling **45,933,234.08 yuan**[85](index=85&type=chunk) - The company highly values investor relations management, improving institutional frameworks, building diversified communication channels, and achieving a **100% response rate** to inquiries[85](index=85&type=chunk)[86](index=86&type=chunk) [Section IV Corporate Governance, Environment, and Society](index=30&type=section&id=Section%20IV%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) This section covers changes in the company's directors and senior management, profit distribution plans, and specific initiatives related to consolidating poverty alleviation achievements and rural revitalization, demonstrating the company's commitment to governance and social responsibility [I. Changes in Company Directors and Senior Management](index=30&type=section&id=I.%20Changes%20in%20Company%20Directors%20and%20Senior%20Management) This section discloses changes in the company's directors and senior management, including the appointment of new vice general managers, the election of the fifth board of directors, and the departure of some supervisors, noting that the company no longer has a supervisory board - The company appointed Mr. Wang Zhenghao and Mr. Zhong Yiqiang as Vice General Managers[88](index=88&type=chunk) - The company elected Mr. Lü Yuelong and 4 others as non-independent directors for the fifth Board of Directors, and Mr. Liu Yulong, Ms. Li Jing, and 1 other as independent directors[89](index=89&type=chunk) - The company no longer has a Supervisory Board; Mr. Li Guoping, Mr. Jin Longhua, and Mr. Xia Haibo no longer serve as company supervisors[89](index=89&type=chunk) [II. Profit Distribution or Capital Reserve to Share Capital Plan](index=30&type=section&id=II.%20Profit%20Distribution%20or%20Capital%20Reserve%20to%20Share%20Capital%20Plan) This section explicitly states that the company has no profit distribution plan or capital reserve to share capital plan for the first half of 2025 - The company has no profit distribution plan or capital reserve to share capital plan for the first half of 2025[90](index=90&type=chunk) [V. Specific Progress in Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, and Other Work](index=31&type=section&id=V.%20Specific%20Progress%20in%20Consolidating%20and%20Expanding%20Poverty%20Alleviation%20Achievements%2C%20Rural%20Revitalization%2C%20and%20Other%20Work) This section details the company's efforts in rural revitalization, including industrial assistance, educational support, consumption assistance, and future work plans, reflecting the company's active fulfillment of social responsibilities - The company established a Rural Revitalization Working Group, designating rural revitalization as a significant political task and social responsibility[92](index=92&type=chunk) - In the first half of 2025, the company completed **45 "insurance + futures" projects**, underwriting **746 million yuan** in goods value, supporting agricultural industry development[94](index=94&type=chunk) - Initiated the "Nanhua Futures-Ganlin Class" public welfare project in two high schools in Xinjiang through the Hangzhou Ganlin Student Aid Foundation, donating **110,000 yuan**[94](index=94&type=chunk)[95](index=95&type=chunk) - In the first half of 2025, the company's total consumption assistance investment was **480,400 yuan**, actively promoting "purchase instead of donation, buy instead of help"[95](index=95&type=chunk) - The company donated **100,000 yuan** through the "Shanben Trust · Zhejiang Gold-Nanhua Charity Trust" to support the reconstruction of the earthquake-stricken area in Shigatse, Tibet[95](index=95&type=chunk) - In the second half of 2025, the company will continue to deepen the application of the "insurance + futures" model, provide educational funds, carry out consumption assistance, and offer futures and derivatives knowledge training[96](index=96&type=chunk) [Section V Significant Matters](index=34&type=section&id=Section%20V%20Significant%20Matters) This section details the fulfillment of commitments, the integrity status of the company and its controlling entities, major related-party transactions, and the performance of significant contracts, particularly regarding guarantees [I. Fulfillment of Commitments](index=34&type=section&id=I.%20Fulfillment%20of%20Commitments) This section discloses the fulfillment of commitments by the company's actual controller, controlling shareholder, directors, and senior management during or continuing into the reporting period, primarily concerning the resolution of horizontal competition and share transfer restrictions, with all commitments being timely and strictly fulfilled - Controlling shareholder Hengdian Group Holdings Co., Ltd. committed not to engage in businesses identical, similar, or substantially competitive with Nanhua Futures, and has timely and strictly fulfilled this commitment[98](index=98&type=chunk) - Actual controller Dongyang Hengdian Group Economic Enterprise Federation committed not to engage in businesses identical, similar, or substantially competitive with Nanhua Futures, and has timely and strictly fulfilled this commitment[98](index=98&type=chunk)[99](index=99&type=chunk) - Directors, supervisors, and senior management committed not to transfer more than **25%** of their total company shares annually during their tenure, and not to transfer shares within **6 months** after leaving office, which has been effectively fulfilled long-term[99](index=99&type=chunk) [IX. Explanation of the Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the Reporting Period](index=36&type=section&id=IX.%20Explanation%20of%20the%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller%20During%20the%20Reporting%20Period) This section states that during the reporting period, the company, its controlling shareholder, and actual controller maintained good integrity, with no unfulfilled court judgments or overdue significant debts - During the reporting period, the company, its controlling shareholder, and actual controller maintained good integrity, with no unfulfilled court judgments or overdue significant debts[100](index=100&type=chunk) [X. Significant Related-Party Transactions](index=36&type=section&id=X.%20Significant%20Related-Party%20Transactions) This section states that the company conducts related-party transactions strictly in accordance with relevant requirements, adhering to principles of fairness, openness, and impartiality, with daily related-party transactions executed as per the resolution approved by the annual general meeting - The company strictly conducts related-party transactions in accordance with relevant requirements, adhering to principles of fairness, openness, and impartiality[102](index=102&type=chunk) - During the reporting period, the company's daily related-party transactions were executed in accordance with the "Proposal on Estimating the Company's Daily Related-Party Transactions for 2025" approved by the company's 2024 Annual General Meeting[102](index=102&type=chunk) [XI. Significant Contracts and Their Performance](index=37&type=section&id=XI.%20Significant%20Contracts%20and%20Their%20Performance) This section discloses the company's significant guarantees performed and outstanding during the reporting period, primarily involving bank credit guarantees for subsidiaries Company Guarantee Total (June 30, 2025) | Item | Amount (RMB) | | :--- | :--- | | Total guarantee amount for subsidiaries incurred during the reporting period | 285,941,298.73 | | Total outstanding guarantee amount for subsidiaries at the end of the reporting period (B) | 285,941,298.73 | | Total Guarantee Amount (A+B) | 285,941,298.73 | | Ratio of Total Guarantee Amount to Company Net Assets (%) | 6.66 | | Of which: Debt guarantees provided directly or indirectly to guaranteed entities with asset-liability ratio exceeding 70% (D) | 267,702,299.00 | | Total of the above three guarantee amounts (C+D+E) | 267,702,299.00 | - Guarantee situations primarily involve bank credit guarantees provided by overseas subsidiaries to their subsidiaries[105](index=105&type=chunk) [Section VI Share Changes and Shareholder Information](index=39&type=section&id=Section%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital changes and shareholder structure, including the total number of ordinary shareholders, the top ten shareholders, and the status of repurchased shares [I. Changes in Share Capital](index=39&type=section&id=I.%20Changes%20in%20Share%20Capital) This section states that there were no changes in the company's total share capital or share structure during the reporting period - During the reporting period, there were no changes in the company's total share capital or share structure[108](index=108&type=chunk) [II. Shareholder Information](index=39&type=section&id=II.%20Shareholder%20Information) This section discloses the total number of ordinary shareholders, the top ten shareholders, and the top ten unrestricted tradable share shareholders as of the end of the reporting period, along with information on the company's special repurchase securities account - Total number of ordinary shareholders at the end of the reporting period: **43,170**[109](index=109&type=chunk) Top Ten Shareholders' Shareholding (June 30, 2025) | Shareholder Name | Shares Held at Period End (Shares) | Percentage (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Hengdian Group Holdings Co., Ltd. | 425,120,900 | 69.68 | Domestic Non-State-Owned Legal Person | | Dongyang Heng Hua Investment Partnership (Limited Partnership) | 24,480,000 | 4.01 | Domestic Non-State-Owned Legal Person | | Zhejiang Hengdian Import and Export Co., Ltd. | 10,000,000 | 1.64 | Domestic Non-State-Owned Legal Person | | Hengdian Group DMEGC Co., Ltd. | 10,000,000 | 1.64 | Domestic Non-State-Owned Legal Person | | Nanhua Futures Co., Ltd. Repurchase Special Securities Account | 5,681,234 | 0.93 | Domestic Non-State-Owned Legal Person | | Yang Rielie | 5,476,600 | 0.90 | Domestic Natural Person | | Hong Kong Securities Clearing Company Limited | 5,472,388 | 0.90 | Other | | National Social Security Fund 413 Portfolio | 4,050,000 | 0.66 | Unknown | | Sun Guodong | 2,086,000 | 0.34 | Domestic Natural Person | | China Merchants Bank Co., Ltd. - Southern CSI 1000 Exchange Traded Fund | 1,683,900 | 0.28 | Unknown | - The company's repurchase special account holds **5,681,234 shares**, accounting for **0.93%** of the company's total share capital; these shares do not carry voting rights, profit distribution rights, or pledge rights at general meetings[112](index=112&type=chunk) [Section VII Bond-Related Information](index=42&type=section&id=Section%20VII%20Bond-Related%20Information) This section provides detailed information on the company's bonds, including issuance, redemption options, use of proceeds, and an analysis of interest-bearing debt structure and changes, along with key bond-related financial indicators [I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments](index=42&type=section&id=I.%20Corporate%20Bonds%20(Including%20Enterprise%20Bonds)%20and%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments) This section details the company's bond situation, including the issuance information and redemption options for the "25 Nanhua C1" subordinated bond, and the use of its proceeds. It also analyzes the structure and changes in the company's interest-bearing debt (non-consolidated and consolidated) [1. Basic Information on Corporate Bonds](index=42&type=section&id=1.%20Basic%20Information%20on%20Corporate%20Bonds) This section provides basic information on the company's corporate bonds, specifically the "25 Nanhua C1" subordinated bond, including its issuance details, maturity, and redemption options Basic Information on Corporate Bonds | Bond Name | Abbreviation | Code | Issue Date | Interest Commencement Date | Maturity Date | Bond Balance (100 Million Yuan) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nanhua Futures Co., Ltd. 2025 Non-Public Issuance of Subordinated Bonds to Professional Investors | 25 Nanhua C1 | 258904.SH | June 11, 2025 - June 13, 2025 | June 13, 2025 | June 13, 2032 (with redemption option) | 5 | 3.28 | - The "25 Nanhua C1" bond includes a redemption option, allowing the company to publish an announcement **30 trading days** before the interest payment dates of the 2nd, 4th, and 5th interest-bearing years[118](index=118&type=chunk) [(II) Use of Proceeds from Corporate Bonds](index=45&type=section&id=(II)%20Use%20of%20Proceeds%20from%20Corporate%20Bonds) This section details the use of proceeds from the company's corporate bonds, confirming that the "25 Nanhua C1" bond proceeds were fully utilized for working capital, consistent with the prospectus Use of Proceeds | Bond Code | Bond Abbreviation | Total Proceeds (100 Million Yuan) | Actual Amount Used in Reporting Period (100 Million Yuan) | Amount for Replenishing Working Capital (100 Million Yuan) | | :--- | :--- | :--- | :--- | :--- | | 258904.SH | 25 Nanhua C1 | 5.00 | 5.00 | 5.00 | - The proceeds from "25 Nanhua C1" have been fully used to supplement working capital, in line with the prospectus agreement[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk) [(IV) Significant Matters Related to Corporate Bonds During the Reporting Period](index=46&type=section&id=(IV)%20Significant%20Matters%20Related%20to%20Corporate%20Bonds%20During%20the%20Reporting%20Period) This section reports that there were no non-operating related party receivables or borrowings at the beginning or end of the reporting period, and details the year-on-year changes in the company's interest-bearing debt balances on both a non-consolidated and consolidated basis - At the beginning of the reporting period, the company's consolidated non-operating related party receivables and borrowings balance was **0 billion yuan**, and the total unrecovered non-operating related party receivables and borrowings at the end of the reporting period was **0 billion yuan**[127](index=127&type=chunk) - The company's (non-consolidated scope) interest-bearing debt balance increased from **512 million yuan** at the beginning of the reporting period to **709 million yuan** at the end of the reporting period, a year-on-year change of **38.48%**[128](index=128&type=chunk) - The company's consolidated interest-bearing debt balance increased from **828 million yuan** at the beginning of the reporting period to **1.077 billion yuan** at the end of the reporting period, a year-on-year change of **30.07%**[131](index=131&type=chunk) [(VII) Key Accounting Data and Financial Indicators](index=49&type=section&id=(VII)%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section presents key bond-related accounting data and financial indicators, such as current ratio, asset-liability ratio, and interest coverage ratio, explaining the reasons for changes in the cash interest coverage ratio Key Accounting Data and Financial Indicators (Bond Related) | Key Indicator | End of Current Reporting Period | End of Previous Year | YoY Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Current Ratio | 3.88 | 3.59 | 8.08 | | | Asset-Liability Ratio (%) | 35.00 | 34.18 | 0.82 | | | Net Profit After Deducting Non-recurring Gains and Losses | 231,784,271.86 yuan | 228,593,446.59 yuan | 1.40 | | | EBITDA to Total Debt Ratio | 0.28 | 0.32 | -12.50 | | | Interest Coverage Ratio | 14.04 | 13.05 | 7.59 | Primarily due to increased funds deposited in exchanges in the current period, leading to decreased net cash flow from operating activities | | Cash Interest Coverage Ratio | -257.43 | 114.59 | -324.65 | Primarily due to increased funds deposited in exchanges in the current period, leading to decreased net cash flow from operating activities | [Section VIII Financial Report](index=49&type=section&id=Section%20VIII%20Financial%20Report) This section comprises the unaudited financial statements, company fundamentals, key accounting policies, tax information, detailed notes to financial items, and disclosures on risks, fair value, related parties, and other significant financial matters [I. Audit Report](index=49&type=section&id=I.%20Audit%20Report) This section states that this semi-annual report is unaudited - This semi-annual report is unaudited[4](index=4&type=chunk) [II. Financial Statements](index=49&type=section&id=II.%20Financial%20Statements) This section provides the company's consolidated and parent company balance sheets as of June 30, 2025, consolidated and parent company income statements for January-June 2025, consolidated and parent company cash flow statements, and consolidated and parent company statements of changes in owners' equity Key Consolidated Balance Sheet Data (June 30, 2025) | Item | Amount (Yuan) | | :--- | :--- | | Cash and Bank Balances | 28,885,111,889.92 | | Receivable Margin Deposits | 14,003,244,717.11 | | Total Assets | 46,878,160,222.79 | | Payable Margin Deposits | 39,598,580,674.61 | | Total Liabilities | 42,586,301,829.82 | | Total Equity Attributable to Parent Company Owners | 4,282,167,984.75 | Key Consolidated Income Statement Data (January-June 2025) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 1,100,653,087.93 | | Total Profit | 257,449,985.42 | | Net Profit Attributable to Parent Company Shareholders | 231,253,620.05 | Key Consolidated Cash Flow Statement Data (January-June 2025) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | -5,108,091,953.72 | | Net Cash Flow from Investing Activities | 703,187,899.09 | | Net Cash Flow from Financing Activities | 110,070,886.55 | [III. Company Basic Information](index=65&type=section&id=III.%20Company%20Basic%20Information) This section introduces Nanhua Futures Co., Ltd.'s establishment background, registration information, stock listing status, industry, and principal businesses, and lists the subsidiaries and structured entities included in the consolidated financial statements - Nanhua Futures Co., Ltd. was registered with the Zhejiang Administration for Industry and Commerce on October 18, 2012, and its shares were listed on the Shanghai Stock Exchange on August 30, 2019[164](index=164&type=chunk) - The company's principal businesses include commodity futures brokerage, financial futures brokerage, futures investment consulting, asset management, and public fund sales[164](index=164&type=chunk) - The company included **23 subsidiaries** and **6 structured entities** in the scope of consolidated financial statements for the reporting period[165](index=165&type=chunk) [IV. Basis of Financial Statement Preparation](index=65&type=section&id=IV.%20Basis%20of%20Financial%20Statement%20Preparation) This section states that the company's financial statements are prepared on a going concern basis, and there are no matters or circumstances that would cause significant doubt about its ability to continue as a going concern for the 12 months from the end of the reporting period - The company's financial statements are prepared on a going concern basis[166](index=166&type=chunk) - There are no matters or circumstances that would cause significant doubt about the company's ability to continue as a going concern for the **12 months** from the end of the reporting period[167](index=167&type=chunk) [V. Significant Accounting Policies and Estimates](index=65&type=section&id=V.%20Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's statement of compliance with enterprise accounting standards, accounting period, functional currency, materiality criteria, and specific accounting policies and estimates for business combinations, consolidated financial statements, cash and cash equivalents, foreign currency transactions, financial instruments, inventories, receivables, long-term equity investments, investment properties, fixed assets, construction in progress, intangible assets, long-term deferred expenses, futures risk reserves, contract liabilities, employee compensation, provisions, share-based payments, repurchase of own shares, revenue, contract costs, government grants, deferred tax assets/liabilities, leases, general risk reserves, segment reporting, margin financing and securities lending business, asset securitization business, and other significant accounting policies and estimates - The financial statements prepared by the company comply with enterprise accounting standards, accurately and completely reflecting financial position, operating results, and other information[169](index=169&type=chunk) - The company has formulated specific accounting policies and estimates based on its actual production and operation characteristics for financial instrument impairment, fixed asset depreciation, construction in progress, intangible asset amortization, revenue recognition, and other areas[168](index=168&type=chunk) - Financial assets are classified at initial recognition into three categories: measured at amortized cost, measured at fair value through other comprehensive income, and measured at fair value through profit or loss[179](index=179&type=chunk) - The company performs impairment testing and recognizes loss provisions for financial assets measured at amortized cost based on expected credit losses[186](index=186&type=chunk) - Futures brokerage commission income is recognized when economic benefits related to the transaction can flow into the company, the related income can be reliably measured, and settlement of buy/sell futures contracts with clients or settlement of funds with exchanges is completed[233](index=233&type=chunk) [VI. Taxation](index=89&type=section&id=VI.%20Taxation) This section discloses the company's main tax categories and rates, including VAT, property tax, urban maintenance and construction tax, education surcharge, local education surcharge, and corporate income tax, explaining the differences in income tax rates for various taxable entities and tax preferential policies Main Tax Categories and Rates | Tax Category | Tax Rate | | :--- | :--- | | Value-Added Tax (VAT) | 6%, 9%, 13% | | Property Tax | 1.2%, 12% | | Urban Maintenance and Construction Tax | 7%, 5% | | Education Surcharge | 3% | | Local Education Surcharge | 2% | | Corporate Income Tax | 25%, 8.25%, 13.5%, 16.5%, 20%, 30.5%, 17%, 0% | - Corporate income tax for Hong Kong-registered subsidiaries applies a progressive tax rate: **8.25%** for taxable income not exceeding **2 million Hong Kong dollars**, and **16.5%** for the excess portion[260](index=260&type=chunk) - Heilongjiang Heng Hua Agricultural Industry Service Co., Ltd. is a small-profit enterprise, enjoying preferential income tax policies where the portion of annual taxable income not exceeding **3 million yuan** is subject to a **25%** reduction in taxable income and a **20%** corporate income tax rate[261](index=261&type=chunk) [VII. Notes to Consolidated Financial Statement Items](index=90&type=section&id=VII.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) This section provides detailed notes to various asset, liability, owner's equity, and income statement items in the consolidated financial statements, including cash and bank balances, settlement reserves, receivable margin deposits, financial assets held for trading, and significant changes in net fee and commission income and investment income - Cash and bank balances at period-end include **4,000 yuan** in frozen business funds, **0.22 yuan** in dormant securities account funds, **214,757.99 yuan** in lease contract deposits, and **27,784,268.32 yuan** in risk reserves, all of which are restricted in use[266](index=266&type=chunk) - Receivable margin deposits had a book balance of **14,046,288,825.39 yuan** at period-end, with a bad debt provision of **43,044,108.28 yuan**[273](index=273&type=chunk) - Payable margin deposits had a book balance of **39,598,580,674.61 yuan** at period-end, including **8,982,841,307.20 yuan** for natural persons and **29,670,213,553.97 yuan** for legal persons[359](index=359&type=chunk) - Financial assets held for trading had a period-end balance of **2,273,686,315.44 yuan**, primarily comprising debt instrument investments, equity instrument investments, derivative financial assets, and bank wealth management products[318](index=318&type=chunk) - In the first half of 2025, net fee and commission income was **234,539,322.17 yuan**, a year-on-year decrease of **13.88%**[408](index=408&type=chunk) - In the first half of 2025, investment income was **129,887,242.08 yuan**, a significant year-on-year increase of **276.57%**, primarily due to increased futures closing gains/losses from risk management business[411](index=411&type=chunk) [VIII. Research and Development Expenses](index=139&type=section&id=VIII.%20Research%20and%20Development%20Expenses) This section lists the company's R&D expenses for the first half of 2025, primarily consisting of personnel costs and depreciation, totaling **9,233,522.01 yuan**, a year-on-year decrease of **48.88%** Research and Development Expenses (January-June 2025) | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Personnel Costs | 8,898,358.41 | 10,669,420.91 | | Depreciation Expenses | 335,163.60 | 770,973.69 | | Information Fees and Other Related Expenses | | 6,623,629.01 | | Total | 9,233,522.01 | 18,064,023.61 | | Of which: Expensed R&D Expenditure | 9,233,522.01 | 18,064,023.61 | [X. Changes in Consolidation Scope](index=141&type=section&id=X.%20Changes%20in%20Consolidation%20Scope) This section describes the changes in the company's consolidation scope during the reporting period, including newly added structured entities and terminated asset management plans and deregistered subsidiaries - Consolidation scope increased: Nanhua Heju Youxuan No. 1 FOF Collective Asset Management Plan, acquired through investment establishment, with a capital contribution of **4,000,011.11 yuan** and an equity ratio of **40.00%**[457](index=457&type=chunk) - Consolidation scope decreased: Nanhua Commodity No. 1 Collective Asset Management Plan (terminated liquidation) and HENGHUA Capital Limited (deregistered)[458](index=458&type=chunk) [XI. Equity in Other Entities](index=142&type=section&id=XI.%20Equity%20in%20Other%20Entities) This section details the company's equity interests in subsidiaries, joint ventures, and associates, including the composition of the enterprise group, basic information on subsidiaries, summarized financial information for immaterial joint ventures and associates, and equity in structured entities not included in the consolidated financial statements - The company included **23 subsidiaries** such as Heng Hua International Financial Co., Ltd. and Zhejiang Nanhua Capital Management Co., Ltd., and **6 structured entities** in the scope of consolidated financial statements[460](index=460&type=chunk) - As of June 30, 2025, the book value of the company's equity in structured entities initiated by third-party institutions through direct investment totaled **164,008,279.61 yuan**[465](index=465&type=chunk) Summarized Financial Information of Immaterial Joint Ventures and Associates (January-June 2025) | Item | Period-End Balance / Current Period Amount (Yuan) | | :--- | :--- | | Total Book Value of Joint Venture Investments | 626,179.76 | | Net Profit of Joint Ventures | -33,074.33 | | Total Book Value of Associate Investments | 1,325,585.75 | | Net Profit of Associates | 208,191.16 | [XII. Government Grants](index=145&type=section&id=XII.%20Government%20Grants) This section discloses the total amount of government grants recognized in current profit or loss for the first half of 2025, totaling **242,948.69 yuan** Government Grants Recognized in Current Profit or Loss (January-June 2025) | Type | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | | :--- | :--- | :--- | | Government grants recognized in other income | 242,948.69 | 318,664.17 | | Total | 242,948.69 | 318,664.17 | [XIII. Risks Related to Financial Instruments](index=146&type=section&id=XIII.%20Risks%20Related%20to%20Financial%20Instruments) This section elaborates on the credit, liquidity, and market risks associated with the company's financial instruments, outlining the policies and organizational structure implemented to manage these risks, and detailing the hedging strategies and hedge accounting applications for its bulk commodity trading business - The company has established a tiered risk governance structure, scientific supervision processes, and review mechanisms, covering all business segments and processes[468](index=468&type=chunk) - The company's credit risk is categorized into futures brokerage business credit risk and other credit risks, primarily arising from bank deposits, proprietary investments, and receivables[471](index=471&type=chunk) - The company has established a net capital-centric liquidity risk control indicator early warning mechanism and conducts stress tests to assess liquidity risk status[475](index=475&type=chunk) - The company engages in bulk commodity trading business, managing hedges by selling or buying relevant futures contracts, and applies fair value hedging[481](index=481&type=chunk) - Hedge ineffectiveness primarily arises from basis risk, supply and demand changes in spot or futures markets, and uncertainties in futures or spot markets[481](index=481&type=chunk)[484](index=484&type=chunk) [XIV. Disclosure of Fair Value](index=151&type=section&id=XIV.%20Disclosure%20of%20Fair%20Value) This section discloses the fair value of the company's assets and liabilities measured at fair value at the end of the period, and explains the basis for determining market prices and valuation techniques for continuous and non-continuous Level 1 and Level 3 fair value measurement items Fair Value of Assets and Liabilities Measured at Fair Value at Period End (June 30, 2025) | Item | Level 1 Fair Value Measurement (Yuan) | Level 3 Fair Value Measurement (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | | (I) Financial Assets Held for Trading | 2,027,644,910.19 | 246,041,405.25 | 2,273,686,315.44 | | (II) Inventories - Hedged Items | | 208,473,528.22 | 208,473,528.22 | | (III) Other Equity Instrument Investments | 20,764,668.46 | 33,381,697.10 | 54,146,365.56 | | (IV) Other Assets - Hedged Items - Executory Contracts | | 6,342,870.77 | 6,342,870.77 | | **Total Assets Continuously Measured at Fair Value** | **2,048,409,578.65** | **494,239,501.34** | **2,542,649,079.99** | | (V) Financial Liabilities Held for Trading | | 76,542,100.65 | 76,542,100.65 | | (VI) Other Current Liabilities - Hedged Items - Executory Contracts | | 4,165,261.85 | 4,165,261.85 | | **Total Liabilities Continuously Measured at Fair Value** | | **80,707,362.50** | **80,707,362.50** | - Market prices for Level 1 fair value measurement items are confirmed based on publicly quoted prices in the secondary market[488](index=488&type=chunk) - For Level 3 fair value measurement items, fair value for wealth management products and funds is calculated based on valuations provided by managers; for financial liabilities held for trading, fair value is calculated using the market price portfolio method based on the market price of the underlying investment[489](index=489&type=chunk) [XV. Related Parties and Related-Party Transactions](index=152&type=section&id=XV.%20Related%20Parties%20and%20Related-Party%20Transactions) This section discloses the company's parent company, ultimate controlling party, subsidiaries, joint ventures, associates, and other related parties. It details related-party transactions such as purchases and sales of goods, provision and acceptance of services, and related-party fund borrowings, and specifies key management personnel compensation - The ultimate controlling party of the enterprise is Dongyang Hengdian Group Economic Enterprise Federation, and the parent company is Hengdian Group Holdings Co., Ltd., with a shareholding ratio of **69.68%**[491](index=491&type=chunk)[492](index=492&type=chunk) - Some related parties opened futures accounts with the company for futures trading, with total equity of **257,500,883.08 yuan** at period-end and commission income of **2,049,350.04 yuan** for the current year[494](index=494&type=chunk) - Some related parties subscribed to fund and asset management product units with the company, with total subscription net value of **1,591,774,950.92 yuan** at period-end[494](index=494&type=chunk)[495](index=495&type=chunk) - The company's deposit balance at Zheshang Bank Co., Ltd. was **3,049,480,188.58 yuan**, with interest income of **126,447,037.68 yuan** for the current year[496](index=496&type=chunk) - Key management personnel compensation for the current period was **4.3401 million yuan**, compared to **4.0341 million yuan** in the prior period[505](index=505&type=chunk) [XVIII. Events After the Balance Sheet Date](index=160&type=section&id=XVIII.%20Events%20After%20the%20Balance%20Sheet%20Date) This section discloses significant non-adjusting events occurring after the balance sheet date, including the company's plans to issue H-shares and convertible corporate bonds - The company plans to issue H-shares, with the number not exceeding **15%** of the company's total share capital after this issuance (before the exercise of the over-allotment option);

Report Summary 1. Investment Rating No investment rating for the industry is provided in the reports. 2. Core Views - The supply side of asphalt remains stable, while the demand side is affected by rainfall and capital shortages, resulting in a failure to effectively release demand. The short - term peak season shows no over - expected performance, and the overall fundamentals are weakening month - on - month. [2] - In the medium and long term, demand is expected to improve as construction conditions get better in autumn, and the capital situation will be alleviated with the accelerated debt resolution of local governments in 2025. However, the peak season is not as prosperous as expected. [2] - The cost - side supply tightness expectation of asphalt is relieved due to the expected relaxation of US sanctions on Russia and OPEC's production increase. [2] 3. Content Summaries by Related Aspects a. Price and Volatility - The price range forecast of the asphalt main contract for the month is 3400 - 3750, with a current 20 - day rolling volatility of 22.30% and a 3 - year historical percentile of 8.95%. [1] b. Risk Management Strategies - **Inventory Management**: For enterprises with high finished - product inventory, to prevent inventory losses, they can short sell the bu2509 asphalt futures with a 25% hedging ratio at the price range of 3650 - 3750. [1] - **Procurement Management**: For enterprises with low regular procurement inventory, to prevent the increase of procurement costs due to rising asphalt prices, they can buy the bu2509 asphalt futures with a 50% hedging ratio at the price range of 3300 - 3400. [1] c. Market Data - **Spot Prices**: On August 18, 2025, the Shandong spot price was 3580 yuan/ton (down 40 yuan/day and 100 yuan/week), the Yangtze River Delta spot price was 3730 yuan/ton (unchanged), the North China spot price was 3680 yuan/ton (unchanged), and the South China spot price was 3520 yuan/ton (unchanged). [7] - **Basis and Crack Spreads**: The Shandong spot 09 basis was 81 yuan/ton (down 42 yuan/day and 87 yuan/week), and the Shandong spot crack spread to Brent was 150.0877 yuan/barrel (down 6.8268 yuan/day and 7.7282 yuan/week). The futures main contract crack spread to Brent was 131.5458 yuan/barrel (up 2.1841 yuan/day and 8.2143 yuan/week). [7] d. Factors Affecting the Market - **Positive Factors**: Low pressure on asphalt factories' warehouses, seasonal peak demand, low - level start - up with the expectation of catch - up construction in the South, and strong expectation of capacity reduction due to the "anti - involution" atmosphere. [6] - **Negative Factors**: An increase in the arrival of Ma Rui crude oil, the drag on demand by the short - term plum rain season in the South, slow destocking of social warehouses and weakening basis, and the potential increase in the start - up rate due to the consumption tax reform in Shandong. [6]

Group 1: Report Summary - The South China Composite Index fell by -0.15% based on the closing prices of adjacent trading days [1]. - Among the sector indices, the South China Precious Metals Index had the largest increase of 0.38%, and the South China Agricultural Products Index had the smallest increase of 0.11%. The South China Black Index had the largest decline of -0.85%, and the South China Non - Ferrous Metals Index had the smallest decline of -0.25% [1]. - Among the theme indices, the Oilseeds and Oils Index had the largest increase of 0.6%, and the Petrochemical Index had the smallest increase of 0.04%. The Black Raw Materials Index had the largest decline of -0.84%, and the Mini Composite Index had the smallest decline of -0.23% [1]. Group 2: Index Data - **South China Composite Index**: Today's close was 2532.31, yesterday's close was 2536.21, with a daily decline of -0.15%, an annualized return of -17.63%, and an annualized volatility of 13.21% [6]. - **Sector Index Performance**: Different sector indices had varying levels of increase and decrease, with precious metals rising and black sectors falling significantly [1]. - **Theme Index Performance**: Oilseeds and oils theme index showed a relatively large increase, while the black raw materials theme index had a large decline [1]. Group 3: Commodity Futures Single - Variety Index - In the agricultural products sector, palm oil had a 1.31% increase, rapeseed had a 1.73% increase, etc. In the energy and chemical sector, synthetic ammonia had a -0.84% decline, methanol had a -0.66% decline, etc. In the black sector, some coal - related products had different levels of increase and decrease [2][7].

国债期货日报 2025年8月18日 情绪宣泄 观点：继续寻底，关注政策信号 南华研究院 徐晨曦（Z0001908） 投资咨询业务资格：证监许可【2011】1290号 盘面点评： 周一期债低开低走，品种全线收跌，TL跌幅最大。现券收益率全线上行，且期货盘后各期限仍在上行，尾盘 有所回落。公开市场7天逆回购净投放1545亿，另有1200亿国库金定存招标。资金面边际收紧，DR001升至 1.45%。 日内消息： 1.央行二季度货币政策执行报告：保持政策连续性稳定性，增强灵活性预见性，强化宏观政策取向一致性，稳 就业、稳企业、稳市场、稳预期，落实落细适度宽松的货币政策。 行情研判： A股今日放量上涨，上证指数开盘站上3700点，盘中创出近10年来新高，风险情绪高涨。受此影响，债市大 跌。连续下跌后，需要警惕因产品赎回带来的负反馈效应，考虑到市场的稳定，央行或适时出手。目前风险 情绪难以扭转，如果政策方面没有表示，如大行买债或央行重启买债，债市将继续寻底，关注10年国债在 1.8%附近是否获得支撑。操作上不做空，谨慎的投资者暂时观望，激进欲抄底者小仓介入，拉开买入间隔。 | 数据一览 | | | | | | | | | ...

尿素产业风险管理日报 2025/08/18 张博（投资咨询证号：Z0021070） 投资咨询业务资格：证监许可【2011】1290号 尿素价格区间预测 | | 价格区间预测（月度） | 当前波动率（20日滚动） | 当前波动率历史百分位（3年） | | --- | --- | --- | --- | | 尿素 | 1650-1950 | 27.16% | 62.1% | | 甲醇 | 2200-2400 | 20.01% | 51.2% | | 聚丙烯 | 6800-7400 | 10.56% | 42.2% | | 塑料 | 6800-7400 | 15.24% | 78.5% | source： 南华研究 尿素套保策略表 | 行为导 | 情景分析 | 现货敞 | 策略推荐 | 套保工具 买卖方 | | 套保比例 | 建议入场 | | --- | --- | --- | --- | --- | --- | --- | --- | | 向 | | 口 | | | 向 | （%） | 区间 | | 库存管 理 | 产成品库存偏高，担心尿素价格下跌 | 多 | 为了防止存货叠加损失，可以根据企业的库存情况，做空尿 ...

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The Handysize ship transport market continued to rise this week, with the weekly freight rate increasing by over 2%. However, the BDI composite freight index and most sub - ship type freight indices decreased week - on - week, but the decline was not significant. Industrial product shipping demand remained strong, while agricultural product shipping demand showed a downward trend [1]. Summary by Directory 1. Summary - The Handysize ship transport market maintained an upward trend, with the weekly freight rate rising by over 2%. The BDI composite freight index and other sub - ship type freight indices decreased week - on - week, but the decline was small. Industrial product shipping demand, such as coal, iron ore, and other dry goods, remained high, supporting the demand for Capesize and Handysize ships. Agricultural product shipping demand, especially soybean imports, declined. During the 90 - day suspension of reciprocal tariff increases between China and the US, soybean trade, including freight and domestic commodity prices, deserves further attention [1]. 2. Spot Index Review 2.1 BDI Freight Index Analysis - On August 15, the BDI composite freight index and most ship - type freight indices decreased week - on - week. The Capesize ship freight index BCI had the largest decline, while the Handysize ship freight index continued to rise. Specifically, the BDI composite freight index closed at 2044 points, down 0.34% week - on - week; the BCI freight index closed at 3295 points, down 1.41% week - on - week; the BPI freight index closed at 1622 points, down 0.8% week - on - week; the BSI freight index closed at 1353 points, up 2.5% week - on - week; the BHSI freight index closed at 698 points, up 2.2% week - on - week [4]. 2.2 FDI Far East Dry Bulk Freight Index - On August 15, except for the continued improvement in the Handysize ship rental transport market, the FDI composite index and most sub - ship type rental freight rates declined. The FDI composite freight index closed at 1329.9 points, down 0.45% month - on - month; the FDI rental index closed at 1630.3 points, down 0.42% month - on - month. The Capesize ship rental index closed at 1719.06 points, down 1.16% month - on - month; the Panamax ship rental index closed at 1590.25 points, down 0.23% month - on - month; the Handysize ship rental index closed at 1552.01 points, up 0.48% month - on - month; the FDI freight index closed at 1129.64 points, down 0.47% month - on - month [9]. 3. Dry Bulk Shipping Situation Tracking 3.1 Number of Ships Used for Shipping in Sending Countries on the Day - On August 18, among major agricultural product sending countries, Brazil used 14 ships, Russia used 8 ships, Argentina used 21 ships, Canada used 3 ships, and Australia used 4 ships. Among major industrial product sending countries, Australia used 63 ships, Guinea used 27 ships, Indonesia used 44 ships, Russia used 25 ships, South Africa used 14 ships, Brazil used 12 ships, and the US used 13 ships [16]. 3.2 Analysis of Shipping Volume and Ship Usage on the Day - In agricultural product shipping, 7 ships were used for corn, 21 for wheat, 9 for soybeans, 7 for soybean meal, and 13 for sugar. In industrial product shipping, 120 ships were used for coal, 77 for iron ore, and 14 for other dry goods. By ship type, agricultural product shipping required the most Post - Panamax ships (19), followed by Supramax ships (18), and then Handysize ships (16). Industrial product shipping required the most Capesize ships (86), followed by Post - Panamax ships (71), and then Supramax ships (60) [17]. 4. Tracking of the Number of Ships at Major Ports - This week, the number of ships at Chinese and Indonesian ports continued to increase week - on - week, while the number of ships at Australian ports decreased significantly week - on - week. From August 1 to August 17, after adjustment, "one port decreased, and four ports increased." The number of dry - bulk ships at Chinese ports increased by 9; the number of ships at six Australian ports decreased by 12; the number of ships at six Indonesian ports increased by 1; the number of ships at five Brazilian ports increased by 6; the number of ships at one South African port increased by 3 [18]. 5. Relationship between Freight and Commodity Prices - On August 15, Brazilian soybeans were priced at $39 per ton, and the near - term shipping quote was 4040.42 yuan per ton. The latest quote for the BCI C10_14 route freight was $25535 per day, and the latest quote for iron ore's CIF price was $119.6 per thousand tons. The latest quote for the BPI P3A_03 route freight was $13956 per day, and the latest quote for the CIF price of thermal coal was 554.88 yuan per ton. The Handysize ship freight index was quoted at 691 points, and the price of 4 - meter medium - grade ACFR radiata pine was $116 per cubic meter [22].

Report Title - Commodity Strategy Weekly Report: August 18, 2025 - Oscillating and Waiting for the Wind [1] Investment Rating - Not provided in the content Core Viewpoints - In the past week, as anti - involution varieties cooled down and volatility decreased, the market was fully digested, and the willpower of the remaining funds became more resolute, which is beneficial for the next round of market. The release of short - selling sentiment in non - anti - involution varieties also cleared some obstacles for the anti - involution varieties [3][5] - In the short term, it is bearish, and in the long term, it is bullish. The short - term bearish mainly shows as oscillating consolidation, and the anti - involution theme market is a long - term layout [4][5] - The short - selling power mainly comes from energy - related varieties due to the overall weakness of crude oil, but the overall valuation of these varieties is not high, and the space for further price decline is limited, so the short - selling power may soon turn from attack to defense [4] - In specific sector varieties, the outlook for oils and fats and black metals is bullish [3] Summary by Directory Market Situation - The anti - involution theme, affected by measures such as position limits and fee increases, has cooled down on the surface, and the hotspots have shifted to the hidden. Only after the short - selling power in the market is fully released will there be a smooth upward trend. Currently, the trading volume of leading varieties has decreased, along with the activity and capacity of funds. Polysilicon and coking coal were in a narrow - range oscillating consolidation stage this week [4] Sector and Variety Data Plate Fund Flow - The total capital is 9.883 billion. Among them, precious metals had an outflow of 2.292 billion (- 40.4%), non - ferrous metals had an inflow of 2.159 billion (36.5%), black metals had an inflow of 968 million (21.6%), energy had an outflow of 428 million (- 28.7%), chemicals had an inflow of 141 million (4.4%), feed and breeding had an outflow of 782 million (- 37.5%), oils and fats had an inflow of 823 million (18.3%), and soft commodities had an inflow of 76 million (4.6%) [9] Black and Non - ferrous Metals Weekly Data - Data such as price percentile, inventory percentile, valuation percentile, position percentile, position difference percentile, and annualized basis are provided for various black and non - ferrous metal varieties, including iron ore, rebar, hot - rolled coil, etc. For example, the price percentile of iron ore is 19.1%, and the inventory percentile is 60.5% [9] Energy and Chemical Weekly Data - Similar data is provided for energy and chemical varieties such as fuel oil, low - sulfur oil, asphalt, etc. For example, the price percentile of fuel oil is 2.8%, and the inventory percentile is 48.7% [11] Agricultural Products Weekly Data - Data for agricultural products such as soybean meal, rapeseed meal, soybean oil, etc. are presented. For example, the price percentile of soybean meal is 5.8%, and the inventory percentile is 29.2% [12]

1. Report Industry Investment Rating - The report suggests a "wait-and-see" approach [5] 2. Core Viewpoints of the Report - In the short term, the price trend of ferroalloys mainly follows the price fluctuations of coking coal. The current good profit situation of steel mills and high hot metal production support ferroalloy demand. However, in the long - term fundamental aspect, the real estate market is continuously sluggish, and the support from the home appliance and automobile industries for steel depends on policy stimulus and cannot be sustained for a long time. The supply of manganese ore is relatively sufficient, and the support from the ore end for ferromanganese is insufficient. The market is in a game between strong expectations and weak reality, and there is still pressure on ferroalloys [4][5] 3. Summary by Relevant Catalogs 3.1 Spot Market - For ferrosilicon, the price in Inner Mongolia's main production area is 5,550 yuan/ton (unchanged), and in Ningxia it is 5,600 yuan/ton (+100 yuan/ton). In trading areas, the price in Hebei and Tianjin is 5,900 yuan/ton (unchanged). For ferromanganese, in the northern production area of Inner Mongolia, the market price is 5,800 yuan/ton (unchanged), in the southern production area of Guangxi it is 5,900 yuan/ton (+30 yuan/ton), and in the trading area of Jiangsu it is 5,900 yuan/ton (-50 yuan/ton) [2] 3.2 Cost and Profit - The price of small - sized semi - coke in Shaanxi is 630 yuan/ton (+35 yuan/ton). The production cost of ferrosilicon in Ningxia is 5,352 yuan/ton, and that of ferromanganese in Ningxia is 5,942.08 yuan/ton (+23.24 yuan/ton). The profit of ferrosilicon in Inner Mongolia's production area is - 49 yuan/ton (unchanged), and in Ningxia it is 98 yuan/ton (+50 yuan/ton). The profit of ferromanganese in the northern region is - 58.5 yuan/ton (+39.64 yuan/ton), and in the southern region is - 417.15 yuan/ton (+8.71 yuan/ton) [2] 3.3 Supply - The weekly operating rate of ferrosilicon production enterprises is 36.18%, a week - on - week increase of 1.86%, and the weekly output is 112,800 tons, a week - on - week increase of 3.39%. The weekly operating rate of ferromanganese production enterprises is 45.75%, a week - on - week increase of 2.32%, and the weekly output is 207,100 tons, a week - on - week increase of 5.77%. Driven by profits, the supply of ferroalloys is gradually increasing, reaching a high level in the same period of the past five years, with relatively large supply pressure [3] 3.4 Demand - Steel mills have good profits, and high hot metal production supports the demand for ferrosilicon and ferromanganese. However, the inventory accumulation of five major steel products restricts the further production space of steel mills, and the growth space for ferrosilicon and ferromanganese is limited. The steel billet inventory of rebar is at the highest level in the same period of the past five years, with relatively large billet pressure. In July, the production of magnesium metal was 81,700 tons, a month - on - month decrease of 4.5%. In the long term, the real estate market is sluggish, and the market has doubts about the growth of terminal steel demand. The demand for ferromanganese is relatively weak. This week, the demand for five major steel products of ferrosilicon is 20,300 tons, unchanged from the previous week, and that of ferromanganese is 125,400 tons, a week - on - week increase of 0.16% [3] 3.5 Inventory - This week, the inventory of ferrosilicon enterprises is 65,200 tons, a week - on - week decrease of 9.19%, the warehouse receipt inventory of ferrosilicon is 104,600 tons, a week - on - week increase of 6.52%, and the total inventory of ferrosilicon is 169,800 tons, a week - on - week decrease of 0.12%. The inventory of ferromanganese enterprises is 158,800 tons, a week - on - week decrease of 1.67%, the warehouse receipt inventory of ferromanganese is 374,000 tons, a week - on - week decrease of 1.63%, and the total inventory of ferromanganese is 532,800 tons, a week - on - week decrease of 1.64% [3]