Shenwan Hongyuan Group Announces its 2021 Third Quarter Results

Net Profit Increased Significantly, Greater Efforts in NEEQ Select

HONG KONG, Nov. 1, 2021 /PRNewswire/ -- Shenwan Hongyuan Group Co., Ltd. ("Shenwan Hongyuan Group", "Shenwan Hongyuan" or the "Company") (stock code: 6806.HK; 000166.SZ) announced its results for the nine months ended September 30, 2021 (the "Reporting Period").

Since the beginning of 2021, the Company has been continuously promoting the integrated development of its "investment & investment banking" business and achieved growth. During the first nine months of the year, total revenue and other income of the Company was RMB24.89 billion, representing a year-on-year increase of 15.88%. Net profit attributable to shareholders of the Company reached RMB7.41 billion, representing a year-on-year increase of 13.48%. Basic earnings per share was RMB0.30, representing a year-on-year increase of 15.38%. Return on Equity was 8.05%, representing a year-on-year increase of 0.42 ppt.

Key business highlights during the Reporting Period are as below:

Leveraged advantages as a central enterprise to fully assist the setup of the new stock exchange in Beijing and NEEQ (National Equities Exchange and Quotations) Select Reform. As the very first securities company to participate in the OTC trading business, the Company regarded the NEEQ as its strategic and characteristic business to serve micro, small and medium-sized enterprises and practice inclusive finance. Being the only securities company in the industry that has an established NEEQ business team, the Company has served over 3,000 small and medium-sized enterprises. It ranked the first in terms of the number of guided companies, and the second in terms of sponsored companies of the NEEQ Select. Since announcement of the establishment of the new stock exchange, the Company has deployed relevant business and actively built a full industry chain of serving small and medium-sized enterprise with the characteristics of "specialization, refinement, differentiation, and innovation" from "research + investment banking + investment + funds + market making + wealth management + derivatives". It developed equity fund businesses in the primary market to invest in associated enterprises and established mutual funds and asset management products in the secondary market to provide wealth management services for innovative small and medium-sized enterprises of the new stock exchange. The Company also served the market making business to provide professional liquidity support for the associated enterprises of the new stock exchange.

Actively served national strategies and assisted the development of the real economy. The Company focused on self-reliance and self-improvement in science and technology, and sponsored IPOs of high-tech companies such as Actions Technology, Sinocat Environmental Technology, Kaierda and China Information Communication Technologies. It also invested in high-tech companies in the biology, environmental protection and medical care sectors. The Company also participated in the establishment of multiple science and technology innovation funds and invested in high-tech projects. It was selected as the Vice Chairman unit of the China Green Carbon Foundation in support of "peak carbon dioxide emissions" and "carbon neutrality", successfully held the "carbon neutrality" conference and issued the Shenwan Hongyuan Carbon Neutrality White Paper. The Company established the first "carbon neutrality" team in the industry and successfully sponsored the IPO listing of green enterprises such as China Three Gorges Renewables and Hengsheng Energy. It combined derivatives business with green finance and launched the first carbon neutrality bond index yield certificate in the market. The Company also invested in several new energy and energy conservation and environmental protection enterprises and initiated the establishment of carbon neutrality industry funds in Shaanxi and Anhui with local state-owned enterprises to support "carbon neutrality" projects.

Optimized and balanced business structure to accelerate high-quality development.

The Company continued to improve its competitiveness in the capital-light business. Transformation of its wealth management business continued to accelerate. Net income from brokerage business achieved RMB4.81 billion during the first nine months, representing a year-on-year increase of 13.68%. Joint growth from stock and equity were recorded in regards of the investment banking business, which increased by 30.51% over the same period last year and achieved RMB1.17 billion. Income from asset management business recorded RMB938 million, representing a year-on-year increase of 4.05%. With regards to the capital-heavy business, it maintained high-quality development with reasonable risk exposure control. The Company saw remarkable growth in securities investment trading businesses. Other income and gains from changes in fair value recorded RMB7.81 billion during the first nine months, representing a year-on-year increase of 45.20%. The Company grasped market opportunities, allocated fixed income investment steadily, further optimized its positioning structure and explored various "multi-strategy" of bonds for FICC business, which significantly improved investment returns. In terms of derivatives business, the scale of the Company's existing and new business of OTC options ranked top in the industry. New businesses also ranked first in the industry, while the cross-border business achieved significant growth.

Practiced social responsibility to fully embrace the role of a state-owned financial enterprise. On the back of Henan province being inundated by severe flooding, the Company moved quickly to implement social responsibilities by donating approximately RMB8 million. It also actively participated in pandemic prevention and control, poverty alleviation and disease eradication through the investment and market making of special bonds such as treasury bonds and debt targeted at small and micro enterprises. The Company also reduced costs for clients in the affected area to assist with post-disaster reconstruction and devoted itself to the rural revitalization of Huining in Gansu province, increasing the investment in talents and capital. It donated RMB2.5 million to Maigaiti County in Xinjiang Province and received RMB15 million in subsidies from Zhengzhou Commodity Exchange. All the subsidies were utilized to carry out the "insurance + futures" project centered on the promotion of jujube and cotton to support the development of local pillar industries.

High rating by the industry authority showcases the Company's good reputation. According to the results of classified evaluation of securities companies published by the Shenzhen Stock Exchange on information disclosure, the Company was rated Class A, which was the sixth consecutive year since the Company's listing, showcasing its continuous efforts in upholding shareholders' rights while practicing social responsibilities. In addition, according to the results of lead underwriters' credit rating in 2020 announced by the NDRC (National Development and Reform Commission), the Company was again rated as a Class A lead underwriter, demonstrating its leading underwriter position which reflected positively the capital market.

China's economy maintained a steady recovery in the first half of the year. Moving into the third quarter, more risks and challenges appeared both domestically and internationally with the flareup of the pandemic globally slowing down the recovery momentum of the world economy. Standing at the starting point of the "14th Five-year Plan", the Company will continue to accelerate its strategic layout, cultivate business advantages, put clients at the center, improve competitiveness and seize the strategic opportunities in the capital market. The Company will also accelerate the promotion of its industry status and adhere to the business philosophy of seeking progress in stability, to create greater value for shareholders, customers and society.