月度归档： 2024 年 8 月

() The content of the management review of the board of directors in 2023 is as follows:

　　I. Main business activities of the company during the reporting period

　　(1) Macro environment and industry situation

　　In the first half of 2023, in the face of a complex and severe international environment, our country’s economic operation gradually moved towards a normalized operation channel, and the overall recovery trend was positive, with GDP growing by 5.5% year-on-year. In terms of macro policy, the total amount of monetary policy remained moderately adequate, and the structure was still dominated by precise investment. Fiscal policy maintained a positive attitude, and the balance sheets of micro-enterprises and residents were slowly repaired. The effects of policies to stabilize growth, employment, and prices gradually became apparent. Industrial production was steadily restored, and the investment structure was steadily optimized. In terms of capital markets, the overall operation was stable, liquidity was reasonable and abundant, the credit structure was continuously optimized, the financing cost of the real economy was stable and declining, and financial support for the economy continued to strengthen. The deepening reform of capital markets has entered the deep-water area, and top-level systems such as the comprehensive registration system have been gradually implemented. The relevant business supervision rules have been continuously improved and optimized to guide securities companies to help transform the structure of the real economy. The current securities industry is moving towards a high-quality development path centered on the protection of investors’ interests. Improve risk pricing capabilities and compact the "gatekeeper role" of capital markets. The securities industry is a typical cyclical industry, and the operation of the industry is highly correlated with factors such as the domestic and foreign macro environment, regulatory policies and capital markets trends. In the first half of 2023, the scale of debt financing in the primary market and the popularity of secondary market transactions both rebounded compared with the same period last year. In the primary market, the total scale of equity financing was 506.001 billion yuan, a decrease of 7.14% year-on-year; of which the amount of IPO financing was 218.72 billion yuan (issue date caliber), a year-on-year decrease of 15.90%; the scale of equity refinancing was 287.282 billion yuan, an increase of 0.85% year-on-year; the total scale of bonds underwritten by securities firms was 6.18 trillion yuan, an increase of 9.33% year-on-year. In the secondary market, the transaction volume of equity funds was 249.40 trillion yuan (bilateral) in the first half of 2023, an increase of 0.11% year-on-year; the main market indexes closed up, the Shanghai Composite Index rose 3.65%, and the Shenzhen Composite Index rose 0.10%.

　　(B) the company’s operations

　　Relying on a complete range of business qualifications, the company is committed to providing a full range of comprehensive financial services to its customers. Brokerage and securities finance business refers to the company’s provision of securities and futures brokerage, wealth management services, research business, and capital intermediary services such as margin financing, stock pledge repurchase, refinancing, agreed repurchase securities transactions, and listed company equity incentive call-over financing to customers. Securities self-operated business refers to the company’s securities investment, including but not limited to equity, fixed income, and financial derivatives and other proprietary trading and market-making businesses. Investment banking business refers to the company’s provision of financial services with investment banking characteristics to customers, including underwriting and sponsorship, financial advisors for listed company mergers and acquisitions and restructuring, corporate bond fiduciary management, recommendation of non-listed public companies, and asset securitization. Asset management business refers to the company’s provision of collective asset management, targeted asset management, special project asset management, and public fund management to customers. Alternative investment and Private Equity management business refers to equity investment, project investment and management or entrusted management of equity investments and related consulting services. The company actively expands overseas business through Long Securities International, providing customers with overseas financial services such as brokerage, investment banking, asset management and futures.

　　In the first half of 2023, the company’s profitability rebounded and its important business was strongly supported. Under the guidance of the new development strategy, the company’s various businesses have accelerated their development and strived to the top, with a more solid foundation and continuous optimization of the structure. High-quality development has achieved remarkable results and there are many bright spots. From a business perspective, the brokerage business continues to grow on a large scale, and the rankings of product sales and investment consulting are stable and rising; the market share of public offering commissions continues to remain high, and the proportion of private equity clients’ income increases; investment banking business and Private Equity business strengthen synergies

　　Linkage, the enterprise Client Server is gradually integrated and platform-based, and the deep cultivation of key regions, key industries, and key customers has achieved remarkable results; the investment management system has gradually improved, the income of large investment business has increased significantly year-on-year, and the results of self-operated investment capacity building and team building have gradually become apparent; The asset management business has made significant progress, the management scale and management fee income of Changxin Fund and Changjiang Capital have increased significantly, and the products and channels of Changjiang Asset Management have made breakthroughs. The company continues to optimize the system and mechanism, comprehensively upgrade various management, and through improving the selection and employment, assessment and incentive and business coordination mechanism, optimize the department setting, and improve the officer enthusiasm, cooperation awareness and collaborative efficiency of cadres and employees. During the reporting period, the company’s total operating income was 3.832 billion yuan, an increase of 34.64% year-on-year; net profit attributable to shareholders of listed companies was 1.106 billion yuan, an increase of 38.34% year-on-year. As of the end of the reporting period, the company’s total assets were 171.797 billion yuan, an increase of 8.06% over the beginning of the year; net assets attributable to shareholders of listed companies were 34.168 billion yuan, an increase of 11.18% over the beginning of the year.

　　1. Brokerage and securities finance business

　　(1) Retail brokerage and wealth management business

　　① Market environment

　　In the first half of 2023, from the perspective of market trends, class A shares showed a volatile pattern of rising first and then suppressing. The impact of external risk factors such as the Federal Reserve’s interest rate hike was superimposed on the impact of internal factors such as the need to consolidate the foundation of China’s economic recovery, and the lack of market confidence limited the upward space of the index. Since the second quarter, under the influence of various factors such as the weakening of the RMB exchange rate, the lower-than-expected internal economic recovery, and the superimposed low performance of the game of stock funds, the market has gradually closed. From a regulatory perspective, in the first half of the year, regulatory policies such as the "Measures for the Management of Securities Brokerage Business" and the "Guidelines for the Operation of Private Securities Investment Funds" were introduced one after another, which promoted institutions At the end of June 2023, the Shanghai Composite Index rose by 3.65% compared with the end of the previous year, and the CSI 300 fell by 0.75% compared with the end of the previous year. In the first half of 2023, new development funds were cold. As of the end of June 2023, 340 new stocks + mixed public funds were issued in the market, with a total fundraising scale of 170.802 billion yuan, a decrease of 18.07% from the same period last year.

　　② Business initiatives and performance

　　The company adheres to customer needs as the center, based on customer refinement and stratification, and establishes an asset allocation system from the perspective of buyers and advisors, providing one-stop in-depth services around customer needs to improve customer investment experience. During the reporting period, in terms of channels, the company integrated () channels, broadened the customer reach radius, achieved breakthroughs in new media development, and laid a good foundation for the transformation and development of wealth management business. In terms of products, the company continued to enrich the supply of financial products, selected high-quality products, and created a comprehensive sales service system covering "pre-sale-sale-sale-after-sale". On the basis of the normalization of public offering sales, it focused on building a "buyer’s perspective" preferred quantitative private placement product line to improve the selection ability of private placement products, and focused on improving the growth rate and conversion rate of high net worth customers. In terms of services, the company continues to promote the transformation of seller-based investment advisors to buyer-based investment advisors. By establishing a hierarchical classification system for investment advisors, it realizes the fit between the individual endowments of investment advisors and the diverse needs of customers, and implements "advisory services" to enhance customer acquisition. In terms of serving high net worth customers, it strengthens the company’s large investment and large investment banking business coordination, drives brokerage business with public business, and taps high net worth customer resources through close contact with enterprises, shareholders, entrepreneurs and executives behind enterprises. It uses algorithm bus, financial support, transaction services, and research services as means to establish the company’s efficiency advantages. At the same time, the company responds to the requirements of the digital age, strengthens technological empowerment, and continues to promote the construction of wealth management platforms. It integrates platform system functions, service scenarios, and research capabilities to accompany customers throughout the life cycle.

　　In the first half of 2023, the company’s agent sales revenue market share (excluding seats) was 1.93%, a new high in recent years; the number of company customers reached 8.73 million households, which continued to grow for five consecutive years, and the total value of securities reached 1.04 trillion; the number of registered advisors of the company was 2239, ranking 10th in the industry, and the sales of investment products were 131 million yuan, an increase of 156.23% year-on-year; the dropshipping income of financial products was 132 million yuan, an increase of 19.89% year-on-year, and the average daily retention of equity products was 22.729 billion yuan.

　　③ Work arrangement for the second half of 2023

　　In the second half of 2023, the company will continue to promote the transformation of wealth management and quickly respond to customer and business needs. Promote the transformation from providing a single product to a comprehensive financial solution, continuously improve the general capabilities of serving high net worth customers, and accelerate the improvement of revenue generation capabilities. Strengthen the service capabilities of enterprise customers, deepen the "total score linkage", provide them with professional and comprehensive one-stop services to meet their diverse needs, and deepen the enterprise Client Server value chain: optimize the "long bull institutional pass" institutional wealth management platform, build a private equity cooperation ecosystem, and use algorithm bus, financial support, transaction services, and research services as means to break through the development of institutional brokerage business, and strengthen compliance internal control and standardized management.

　　(2) agency brokerage and research business

　　① Market environment

　　At the end of the first half of 2023, the net value of public funds increased slightly, increasing by 6.29% to 27.37 trillion yuan compared with the beginning of the year, of which the stock type and mixed type net value were 2.45 and 4.44 trillion yuan respectively, + 8.77% and -7.17% respectively compared with the beginning of the year, and the bond type net value was 8.37 trillion yuan, an increase of 9.30% compared with the beginning of the year. In the first half of 2023, the net value of Private Offering Fund increased by 0.70% to 20.17 trillion yuan compared with the beginning of the year, of which the net value of securities was 5.95 trillion yuan, an increase of 6.97% compared with the beginning of the year. Under the new regulatory environments, the seller’s institutional brokerage business will accelerate towards a high-quality development path. On the one hand, the importance of research commissions in traditional sub-warehouse commissions is highlighted. On the other hand, the demand for research pricing power in other business lines will continue

　　② Operating measures and performance during the reporting period

　　The company’s research institute is equipped with industry-wide research strength, covering 5 major research fields and 34 research directions in the total amount, cycle industry, financial manufacturing industry, consumer industry, and technology industry. Adhering to the concept of value investment, the company strengthens the upstream and downstream interaction and in-depth research of the industrial chain. The company grasps the tide of customer institutionalization, continues to consolidate its position as the head of research business, and ranks firmly in the forefront of the industry in terms of research revenue. In the first half of 2023, under the overall policy of high-quality development, the company will continue to enhance its research capabilities and market influence in key areas of national strategy, and increase the service intensity of line-to-line integration and industrial chain coordination. The company conforms to the market development trend of institutional customers, actively responds to the changing needs of institutional customers, and is committed to providing institutional customers with a full range of full stack financial solutions. During the reporting period, the company integrated resources through research on the theme of creating value and generating revenue through sales, actively followed up on market changes, coordinated progress, and promoted in-depth discussions on the monthly situation. The total volume, industry, and sales team worked closely together to improve research comprehensive service capabilities, strengthen the application of innovative service tools such as institutional customer collaboration platform and WeChat Mini Program, strengthen the combination of offline roadshow meetings and online conference activities, and vigorously promote the frequency of comprehensive services for institutional customers. Good customer feedback was achieved, which effectively enhanced the company’s brand and influence. As of the end of the reporting period, the company’s full-scale public offering commission market share maintained a high level, non-public offering business revenue continued to increase year-on-year, and customer account opening assets remained high.

　　③ Work arrangement for the second half of 2023

　　The company will conform to the business development direction of securities institutions in the new era, further consolidate the internal risk control system, and do a good job in high-quality development culture construction and investor education. With the aim of improving the internal transformation efficiency of research value, it attaches great importance to the investment and application of science and technology, integrates the company’s various business resources, steadily improves the company’s public offering business market ranking and business income, maintains the first echelon in the industry, and enhances the company’s research brand influence. At the same time, it focuses on the leading Private Offering Fund customers with research as the core, vigorously promotes the construction of Private Offering Fund and other institutions Client Server system, strengthens platform-based business services, and broadens income sources. Continue to promote the deep integration of industrial research and company research in research products, strengthen the coordination with brokerage, credit, investment banking and investment business, increase the linkage between domestic business and international business, and improve research pricing capabilities to better serve the high-quality development of the real economy and capital markets.

　　(3) Asset custody business

　　① Market environment

　　In the first half of 2023, under the background of supervision guiding the standardized development of the Private Offering Fund industry, promoting the stable and healthy development of the real economy, and preventing systemic financial risks, the filing requirements of private investment funds have become stricter, the number of new filing products has declined, and the number of newly registered Private Offering Fund managers has plummeted. The private equity industry has entered a period of consolidation, the operating environment of asset custody business is facing challenges, and the market competition of asset custody business has intensified, prompting various custodians to accelerate the integration of company resources, increase internal coordination and marketing efforts, and build comprehensive financial service capabilities for institutional customers throughout the life cycle. Although the development of the private equity industry is facing short-term pains, policy guidance has also accelerated the development of the private equity industry towards a healthy and efficient ecosystem. It is expected that the industry will usher in a more

　　② Business initiatives and performance

　　During the reporting period, the company has always practiced the customer-centric service concept, focusing on the comprehensive financial service needs of customers throughout the life cycle, achieving the full life cycle support of private equity, and meeting the comprehensive and personalized needs of private equity managers. The company released the industry’s first private equity comprehensive financial service brand – "Golden Yangtze River – Private Equity Comprehensive Financial Service Solution", vigorously promoted the private equity strategy, and integrated the company’s resources with one brand, two major events, and six major systems to enhance the company’s private equity service brand influence. In the custody business, the company has continuously expanded its service customer base, established a linkage mechanism for private securities, public funds and special accounts, brokerages and futures asset management, trust plans, bank wealth management, private equity and other customer groups, tapped cooperation opportunities, and focused on scale improvement; at the same time, the company has focused on improving operational efficiency and customer experience, developed and launched the "Golden Butler" service platform, and used cutting-edge technologies such as OCR to integrate the original multi-platform to provide managers with a unified platform entrance, realizing online business processing while improving business processing efficiency; in internal control management, the company successfully passed the ISAE3402 international authentication of asset custody and fund service business, and officially obtained the second type of ISAE3402 international authentication report, marking the company’s asset custody and outsourcing service business internal control, security, operational efficiency, Business quality has been effectively affirmed and professionally recognized. During the reporting period, the number of managed products, business scale and market ranking of the company maintained a strong growth trend, and the number of new private placement product filings rose to 12th in the industry.

　　③ Work arrangement for the second half of 2023

　　In terms of private equity strategy, the company will continue to increase its "Golden Yangtze River" private equity brand services, give full play to its brand influence, and further improve its one-stop comprehensive financial service system for large private equity managers to meet customers’ personalized needs and enhance customer experience. In terms of custody business, the company will continue to improve its customer service solutions for private securities, public funds and special accounts, securities firms and futures asset management, trust plans, bank wealth management, private equity, etc., to solve core problems and increase business scale; in terms of system platform, the company will continue to independently develop system platform functions, use digital, artificial intelligence and other technological innovations to optimize operational efficiency, and improve per capita efficiency; in terms of internal control management, the company will carry out operational risk combing and self-examination in all business links, and combine business practices and industry experience to continuously strengthen the standardized management of business operations in terms of processes, systems, etc., to ensure stable operation while maintaining rapid business development.

　　(4) Credit business

　　① Market environment

　　In the first half of 2023, with the comprehensive promotion of the reform of the stock issuance registration system and the launch of margin financing and short selling on the Beijing Stock Exchange, the scale of market margin financing and short selling business has risen steadily. As of the end of the reporting period, the balance of margin financing and short selling in the whole market was 1.59 trillion yuan, an increase of 3.12% over the end of the previous year. In the long run, the space for the development of securities firms’ two financing businesses will be released again. The launch of the margin financing and short selling business of the Beijing Stock Exchange and the direct expansion of the two financing targets of the full registration system have provided effective support for investors to adopt multiple trading strategies and risk management, which can better meet the diverse needs of investors. The business mechanism of the conversion and financing has been further optimized, which has improved the level of business marketization and transaction efficiency, and can effectively promote the development of

　　② Operating measures and performance during the reporting period

　　The company has always practiced the business philosophy of focusing on customer needs, responded quickly to market changes and regulatory requirements, deeply excavated customer needs, actively innovated business operation models, and continuously improved risk management and control construction. In terms of margin financing and securities lending business, on the basis of adhering to counter-cyclical adjustment, the company actively expanded customers and business resources through special project business activities, continuously optimized business and customer structure; effectively integrated internal and external resources, consolidated the foundation of bond sources, expanded the scale of bond pools, and focused on improving comprehensive services to high net worth customers and institutional customers; strengthened technology empowerment, continued to promote the construction of trading systems and margin lending platforms, and improved Client Server experience; improved the construction of the whole process risk management system, and optimized the business management and control effects of credit collection, collateral, and concentration. In terms of stock pledge business, the company adheres to a prudent and stable development strategy, continuously optimizes and improves customer and asset structure, strengthens business due diligence and post-loan management capabilities, and creates a benign business model that matches income and risk.

　　As of the end of the reporting period, the scale of the company’s margin financing and securities lending business was 28.47 billion yuan, an increase of 2.74% over the end of the previous year; the scale of stock pledge business through equity funds was 1.487 billion yuan, a decrease of 31.67% over the end of the previous year.

　　③ Work arrangement for the second half of 2023

　　In the second half of 2023, on the basis of consolidating the original business advantages, the company will continuously strengthen its internal coordination capabilities, strengthen cooperation with external institutions, enhance the ability to obtain margin financing sources, and meet the diverse and differentiated business needs of customers; actively optimize the Client Server system, enhance professional service capabilities, strengthen product strategy innovation, and enhance the depth of service to high net worth customers; through internal refined management, optimize the pricing mechanism and risk control mechanism, and promote the high-quality development of margin financing and short selling business. At the same time, it will prudently and steadily carry out the stock pledge business under the premise of ensuring that risks are measurable, controllable, and bearable.

　　(5) futures brokerage

　　① Market environment

　　In the first half of 2023, domestic economic development was stable, policy determination was strong, superimposed on the macro reality of turbulence in overseas markets, and domestic commodity differentiation was obvious. All futures exchanges actively listed new varieties of futures options, enriched the price risk management toolbox of physical enterprises, and further enhanced the participation of physical enterprises in the future market. The "Exposure Draft Measures for the Supervision and Administration of Futures Companies" was released, laying a solid foundation for the high-quality development of innovative business in the futures industry. In the first half of the year, the futures market transactions performed well. The cumulative volume 3.951 billion lots, and the cumulative turnover was 262.13 trillion yuan, an increase of 29.71% and 1.80% year-on-year respectively. However, many futures operating institutions were in the stage of "increment without increase in income".

　　② Operating measures and performance during the reporting period

　　The company mainly conducts futures business through its holding subsidiary Changjiang Futures. In the first half of the year, Changjiang Futures adhered to the mutual promotion of party building and business integration, steadily advanced the "one body, two wings" strategy, and achieved a net profit of 52.42 million yuan. As of the end of the reporting period, ROE was 5.28%, and customer equity was 6.962 billion yuan at the end of the period, and the average daily customer equity was 7.29 billion yuan, an increase of 16% year-on-year. The IB business was coordinated, and the average daily customer equity was 2.17 billion yuan; the direct sales branches were gradually diversified, and the average daily equity was 5.12 billion yuan. Helping the company’s wealth management transformation, actively and collaboratively expanding its institutional brokerage business, achieving a 29% increase in special French equity, and enhancing the influence of the "Golden Changjiang" private equity competition. The first private FOF product successfully raised more than 70 million yuan, the performance of fixed income products was stable, and the scale of Deeply cultivating the industrial customer group, the quantity and quality of the core Client Server have increased simultaneously, the industrial chain has broken the circle well, and the key "insurance + futures" projects have been carried out in an orderly manner. Create characteristic marketing activities, strengthen innovative business incentives, and guide the diversified development of branches.

　　③ Work arrangement for the second half of 2023

　　In the second half of the year, Changjiang Futures will continue to implement three-dimensional coordination to serve the group’s comprehensive finance; relying on institutional expansion, asset management product sales, industrial services, and branch operation characteristics, it will continue to expand the scale of its customer base and business volume; through actual team training, it will enhance its professional capabilities and comprehensive operational capabilities through project work.

　　2. Securities self-operated business

　　(1) Market environment

　　In the securities market, in the first half of 2023, under the background of continued inflation and contraction overseas and weak recovery of the domestic economy, class A shares showed a market situation of structural rotation and stock game. The major indices showed obvious differentiation, among which the Shanghai Composite Index rose 3.65% in half a year, the growth enterprises market index fell 5.61%, and the Shenzhen Composite Index rose slightly by 0.1%; technological innovation has become the main driving force of the market, and AI + and "China Special Estimation" have become the two main lines of the market. From the perspective of industry performance, only 11 of the 31 first-tier industries outperformed the Shanghai Composite Index. Among them, the media, computer, communications, and electronics sectors in the direction of TMT performed well, while household appliances and automobiles in the direction of "stable growth" and construction decoration and petroleum and petrochemical in the direction of "medium special assessment" also performed well. In the bond market, in the first half of 2023, the domestic economy and society will fully resume normal operation, the policy of stable growth will continue to be introduced, the central bank will cut interest rates in a timely manner, and market demand will gradually recover. However, the endogenous driving force of the economy is not strong, the demand is still insufficient, and the market risk appetite is low. In this context, low-risk appetite funds continue to allocate bond assets, and the bond market will begin to strengthen after the year.

　　(2) Business initiatives and performance

　　The company’s stock self-operated business adheres to the concept of value investment, increases resource investment, strengthens investment and research exchanges, and improves system construction. Under the background of the transformation of new and old kinetic energy in the domestic economy, it focuses on high-end manufacturing, TMT, consumption and other industries, strengthens the company’s research depth, and adopts a more flexible investment operation strategy in the face of market changes.

　　Corporate bond investment business adheres to the coupon strategy. On the basis of maintaining the bottom line thinking of position size, band trading and neutral trading are combined to achieve stable returns. At the same time, risk prevention and control are further strengthened, position structure is adjusted according to market rhythm, and portfolio credit qualification and liquidity are improved. In addition, investment research capabilities continue to be improved, the strategy library is expanded and improved, and the construction of investment research system is steadily advanced.

　　The company’s derivatives business has developed steadily, following the principles of compliance, matching, prudence and transparency, improving risk management capabilities and infrastructure building, and establishing a more efficient standardized business model and business process, laying a solid foundation for achieving scale effect in the future. At the same time, the company has continuously improved its transaction pricing capabilities, and continued to innovate in product structure, product form, application scenarios, etc., to meet the derivatives service needs of different customers with various risk and return characteristics. As of the end of the reporting period, the company’s OTC options business continued to scale 4.927 billion yuan, the income swap business continued to scale 2.415 billion yuan, and the OTC derivatives business totaled 7.342 billion yuan.

　　The company conducts derivatives risk management business through Changjiang Futures subsidiary – Changjiang Industrial Finance. In the first half of 2023, Changjiang Industrial Finance participated in futures market-making business, involving a nominal transaction principal of 2.428 billion yuan for over-the-counter derivatives, a year-on-year decrease of 8.6%. Participated in 13 "insurance + futures" projects, involving a nominal principal of 200 million yuan for over-the-counter options.

　　(3) Work arrangements for the second half of 2023

　　Stock self-operated business, by building a professional investment team + institutional investment research system, relying on the in-depth fundamental value of buyer research and market band trading capabilities, to continuously improve the core capabilities of investment research. Through the research of markets, industries and enterprises, focus on core advantage sectors, and seize the investment opportunities brought by the market in the second half of the year. Bond investment business will continue to strengthen the tracking and research of economic fundamentals, adhere to the coupon strategy while paying more attention to risk prevention and control; continue to improve investment research capabilities, promote the diversification, systematization and intelligence of investment strategies, increase the intensity of neutral strategies and band trading, seize the opportunity of price difference, and promote the development of innovative business. With the goal of serving the real economy and guided by customer risk management needs, the company will continue to actively explore business models and expand customer groups. In terms of derivatives business, the company will improve the derivatives product service system, enhance product creation capabilities, enrich investment strategy reserves, strengthen the mid-platform operation management system, provide customers with more professional and effective comprehensive solutions, and play a synergistic role with the company’s multi-business lines. The futures risk management business will continue to stabilize the development of existing business, try to carry out options market-making business, and enhance core trading capabilities. Expand the scale of OTC derivatives business, enhance the ability to serve large-scale industrial customers, and actively undertake projects such as "insurance + futures" and OTC options.

　　3. Investment banking

　　(1) Market environment

　　In terms of equity financing, in the first half of 2023, a total of 184 new shares were listed in the IPO market, and the number of listed companies increased by 8 compared with the same period in 2022. The number of new shares issued and listed continued to be active. Among them, the top industries in the number of listed companies were computer, communication and other electronic equipment manufacturing, special equipment manufacturing, and electrical machinery and equipment manufacturing. The total amount of IPO fundraising was 218.72 billion yuan (the caliber of the issuance day), a decrease of more than 30% year-on-year. At the same time, due to factors such as the banking crisis in Europe and the United States and the continuous interest rate hikes by the Federal Reserve, the market environment is relatively volatile. In the first half of 2023, all sectors of The refinancing market is still dominated by two varieties of fixed increase and convertible bonds. Benefiting from the recovery of economic growth, the optimization of the refinancing review end under the background of the registration system, and the adjustment and optimization of real estate policies, the overall active level of the fixed increase market in the first half of 2023 has improved, driving the recovery of the refinancing market. Specifically, 148 fixed increase projects and 53 convertible bond projects have been completed. The number of fixed increase projects has increased by more than 20% year-on-year, and the amount of fundraising has doubled compared with the same period in 2022. The number of convertible bond projects has decreased by more than 10% year-on-year, and the amount of fundraising has decreased by nearly 40% year-on-year.

　　In terms of debt financing, in the first half of 2023, due to the weak domestic demand, economic growth was relatively weak, showing a weak recovery trend. Based on the need to stabilize growth, the central bank has successively taken measures to "cut the reserve requirement" and "cut interest rates", superimposed on the institutional "asset shortage" caused by loose funds, which led to a continuous decline in bond market yields, and the scale of credit bond issuance increased slightly compared with the same period last year. Affected by institutional preferences, the main body of credit bond issuance is still urban investment companies and industrial state-owned enterprises, and private enterprises are still facing the dilemma of financing difficulties. Under the policy guidance, the issuance scale of innovative varieties such as green bonds, rural revitalization bonds, scientific and technological innovation bonds, and sustainable linked bonds continues to grow rapidly.

　　(2) Business initiatives and performance

　　The company mainly carried out equity financing projects through its wholly-owned subsidiary Changjiang Sponsor. During the reporting period, Changjiang Sponsor adhered to differentiated competition. On the basis of continuing to deepen the original advantageous industries such as military industry, Taiwan capital, property, and chemical industry, according to the National Strategy and Development Plan, it deeply excavated high-quality, wide-track, and high-prosperity strategic emerging industries, such as "Three New and One High", energy conservation and environmental protection, and biomedical industries. Continuously expand industry advantages and build characteristic industry brands. At present, 25 are in auxiliary projects, and strategic emerging industries account for 80%. At the same time, Changjiang Sponsor adheres to the strategy of deepening the cultivation of key regions, concentrating resources in Hubei, Southwest China and economically developed Guangdong, Jiangsu, Zhejiang and other regions. Hubei base areas have taken various measures such as strengthening channel construction, actively holding relevant publicity activities, and sorting out and visiting enterprises with listing needs in the province to increase business development efforts; Southwest China and economically developed regions have continuously tapped the company’s business development increment through the core Client Server to improve the depth of the exhibition industry and business coverage. Changjiang Sponsor strictly controls project risks, improves the quality of project practice, and strictly grasps the quality of the project in the quality control and core links. At the same time, through system construction and strengthening assessment efforts, it has further increased the deduction for IPO project withdrawal. During the reporting period, Changjiang sponsored 3 IPO projects, an increase of 1, all of which belong to strategic emerging industries; 2 refinancing projects, a decrease of 2; 5 main underwriters of stocks, and the amount of main underwriting of stocks 4.417 billion yuan. At the same time, Changjiang sponsored reserve projects are abundant. As of the end of the reporting period, there were 24 equity projects under review, and the market ranking was tied for 14th place, including IPO21 and 3 convertible bonds.

　　In the first half of 2023, the company actively explored and developed innovative bond varieties, and reserved innovative varieties such as scientific and technological innovation corporate bonds, rural revitalization corporate bonds, and parking lot construction special project bonds. During the reporting period, the company had a total of 40 main underwriting bonds, with a scale of 13.187 billion yuan: 4 corporate bonds, with a scale of 1.812 billion yuan; 30 corporate bonds, with a scale of 9.428 billion yuan, and 6 non-financial corporate debt financing instruments, with a scale of 1.946 billion yuan. Among them, the scale of corporate bonds increased by 38.89% year-on-year, and the comprehensive ranking of corporate bonds and corporate bonds rose by 1 place. During the reporting period, the company distributed only 49 local bonds, and the scale of winning the bidding was 3.05 billion yuan. Among the bonds underwritten by the company, Three Gorges Capital Holdings Co., Ltd. will publicly issue carbon neutrality green technology innovation company bonds (Phase I) (GC Three Capital K1) to professional investors in 2023. The company will lead the underwriting, and the issuance scale 500 million. It is the second phase of green bonds publicly issued by central enterprise capital investment companies, which further promotes the industrial innovation and upgrading of central enterprises and subsidiaries; Suqian City () Group Co., Ltd. will not publicly issue rural revitalization company bonds (Phase I) to professional investors in 2023 (23 Residential Control V1). The company is independently underwritten, and the issuance scale is 395 million. It is the first rural revitalization company bond successfully issued on the exchange in Suqian, Jiangsu. In the first half of the year, 72.5% of the company’s bonds were rated AA + and above (52.6% in the same period last year), and the proportion of high-quality customers continued to increase.

　　In the first half of 2023, the company’s new third board business ranking was basically stable; during the reporting period, 3 listed companies were recommended, and the market ranking was tied for 16th place; 10 targeted issuance of stocks were completed, and the market ranked 9th; the amount raised by the targeted issuance of stocks was 303 million yuan, and the market ranked 9th. As of the end of the reporting period, the company continued to supervise 220 companies and ranked 6th in the market.

　　(3) Work arrangements for the second half of 2023

　　In terms of equity financing, Changjiang Sponsor focuses on the business of the Beijing Stock Exchange, taking this opportunity to gradually improve the ranking of IPO business. First, strengthen research efforts, fully understand and grasp the market dynamics and development trends of the Beijing Stock Exchange, and second, guide business departments to intervene in SMEs with good industries and good prospects earlier, and cultivate the "reserve army" of the Beijing Stock Exchange listing. At the same time, Changjiang Sponsor always focuses on the main business, maintains the strategic determination of regional deep cultivation, is based in Hubei, deepens the layout of key regions such as Southwest, Yangtze River Delta and Pearl River Delta, and strives to improve the business coverage of key regions. Changjiang sponsor will focus on the company’s industrial investment bank development strategy to further improve the company’s key industry client server capabilities: encourage employees to focus on strategic emerging industries and other key industry-related policy information, accumulate industry experience for business development; based on their own resource endowments, further cultivate key industries; deepen collaboration with other business lines such as the strategic customer department, promote the integration and interaction of industry exchanges within the group, and promote the company to make breakthroughs in key industries.

　　In terms of debt financing, the company will continue to adhere to the policy of serving the national strategy, serving the local government, and serving the real economy, continue to strengthen the collaborative services for central enterprises, local state-owned enterprises, industrial enterprises, and other high-quality enterprise customers, and deepen the cultivation of key regions such as Hubei. It will continue to do a good job in the transformation of resources and services of branches, make good use of the interbank market license, and enhance the scale of the association’s products. Promote team building, based in Hubei, radiate to the whole country, and gradually promote team building in East China, Guangdong-Hong Kong-Macao Greater Bay Area and Southwest China; continue to strengthen strong communication and cooperation with regulators, investors, industry channels, ratings, guarantees and other collaborative partners, and establish the company’s business reputation; closely grasp new policies and market window conditions, such as focusing on the issuance of bonds such as science and technology innovation, rural revitalization and industry, adhere to diversified customer coverage, differentiated sales processes, standardized Client Server, and systematic process control, enhance the company’s comprehensive service capabilities, improve customer experience, and enhance customer stickiness.

　　4. Asset management business

　　(1) Market environment

　　In recent years, the product structure of public funds has undergone certain changes. The proportion of actively managed equity funds has declined year by year, the proportion of fixed income + funds has remained relatively stable, and the proportion of money funds has gradually increased. From the performance of the first half of the year, index funds in equity funds have performed the most prominently. Artificial intelligence and "medium special evaluation" theme funds broke out, and the performance of fund products in the whole market was relatively stable. In terms of the structure of newly issued funds, the issuance of equity and hybrid funds has cooled down, the issuance of bond products such as medium and long-term pure bonds and short-term bonds has increased, and the scale of new bond funds has continued to expand, becoming the main force in the issuance market of public funds.

　　(2) Business initiatives and performance

　　The company mainly carries out asset management business through its wholly-owned subsidiary Changjiang Asset Management. During the reporting period, Changjiang Asset Management actively expanded its channels and optimized its product layout. In terms of channels, it built a four-line business team with banks, non-bank institutions, Internet platforms, and Changjiang Securities to rapidly improve the response efficiency and service quality of the same type of customers. It promoted preferential treatment through various channels, and continued marketing of key products. At the same time, it focused on Internet thinking to support product volume. As of the end of the reporting period, the scale of the surviving products of Changjiang Asset Management increased by 11.2% compared with the end of last year, and the scale of public fund business increased by 2.58% compared with the same period last year. In terms of products, it improved product layout, accelerated product issuance, and continuously enriched product shelves to meet the diverse 3 new special project products were issued, an increase of 4.7% over last year. 8 new fixed income private equity products were issued, and the scale of new issuance increased significantly compared with the same period last year. The public offering REITs business made good progress. In the first half of the year, it continued to work in Hubei Province, in-depth research on high-quality enterprise assets, and through high-frequency visits and business discussions, it further consolidated its local service advantages and professional advantages for enterprises in the province.

　　Changxin Fund, a subsidiary of the company, mainly engaged in fund management business. During the reporting period, the overall scale and non-cargo scale of Changxin Fund significantly exceeded the industry, with the total scale exceeding 150 billion yuan for the first time and the non-cargo scale exceeding 90 billion yuan for the first time. The total scale and non-cargo scale rankings have been greatly improved compared with the end of 2022. During the reporting period, Changxin Fund issued and established 1 fund, raising 344 million yuan. As of the end of the reporting period, there were 115 managed products, with a total net asset scale of 164.421 billion yuan, 86 public funds, and a net asset scale of 159.358 billion yuan. There were 29 special account wealth management products, with a net asset scale of 5.063 billion yuan. Through assessment and guidance and mechanism optimization, Changxin Fund has strengthened the conversion rate of investment and research, and enhanced its investment and research capabilities by building a team; deepened the cooperation of core bank channels to achieve breakthroughs in the low-level layout of equity products; carried out special research on "asset shortage" to clarify the specific arrangements and path planning of the three business lines of fixed income, equity and quantification in the short, medium and long term.

　　In the first half of 2023, the net value of Yangtze River Futures asset management products exceeded 1.10 billion yuan, the performance of fixed income products remained stable, and the first private FOF product successfully raised more than 70 million yuan.

　　(3) Work arrangements for the second half of 2023

　　Changjiang Asset Management will further promote the integration of Product R & D sales, adhere to the three-in-one strategic plan of "product planning, channel layout, investment and research improvement", and create a new look of asset management business. Products are designed and planned around equity and fixed income business respectively, and at the same time actively expand new products that meet market demand. Four types of channels (banks, non-banks, Internet platforms, Changjiang Securities) go hand in hand, key channel cooperation breakthroughs, continue to improve the quality of channel services, and gradually transform into scale. Continue to deepen the construction of investment and research, improve various mechanisms, continue to cultivate investment and research teams, and strengthen business innovation. Looking to the future, Changjiang Asset Management will adhere to the concept of putting the interests of the holders as the center, optimize the business structure, and place equal emphasis on equity and fixed income. It will effectively enhance its active management capabilities, ensure the company’s stable development, and truly achieve a win-win situation with investors.

　　In addition to steadily advancing the approval of reserve products, Changxin Fund focuses on the market environment outlook for the second half of the year and the first half of next year, continuously solidifies the foundation, bases itself on the concept of absolute return, optimizes product layout, strengthens the construction of core talent team, and promotes the improvement of company performance. It always puts the interests of investors first, continuously pays attention to the stability and continuity of the performance of each line’s core and key products, and continuously improves the holder’s sense of experience and gain.

　　Changjiang Futures will focus on enhancing the scale of asset management, promoting product roadshows and sales, maintaining its investment and research advantages, and gradually establishing a private FOF brand.

　　5, alternative investment and private equity management business

　　(1) Market environment

　　In the first half of 2023, China’s equity investment market continued to operate at a low level as a whole. The amount of newly raised funds in the market was 734.145 billion yuan, a year-on-year decrease of 4.96%. Investment in the field of hard technology remained the main line. With the rise of a new round of technological revolution and industrial transformation, in the fields of green and low carbon, integrated circuits, and biomedicine, technology enterprises have continued to innovate, providing more opportunities for investment in the primary market. However, during the reporting period, the market value of the secondary market of popular tracks such as new energy has a large correction, resulting in an overall decline in investment enthusiasm in the VC/PE market. From the perspective of industry distribution, under the background of science and technology power, market resources continue to tilt towards the hard technology industry, and the competition for high-quality targets is fierce. Equity investment institutions need At the same time, with the continuation of the market polarization trend, the overall structure of LP has also changed. The LP structure with state-owned assets as the main body promotes the equity investment market to a stage where it is closely matched with local industries.

　　(2) Business initiatives and performance

　　Changjiang Innovation, as an alternative investment subsidiary of the company, takes equity investment as its core business, takes "industry focus, research-driven" as an overall competitive strategy, and explores investment opportunities through in-depth industrial research. During the reporting period, Changjiang Innovation added 3 equity investment projects, and conducted close and continuous tracking and post-investment management of the invested projects, and the projects were in good condition. As of the end of the reporting period, Changjiang Innovation has completed a total of 38 equity investment projects.

　　Changjiang Capital, as a platform for the company to raise and manage Private Equity Funds, gives full play to the role of Financial Institution Group in serving the real economy. Guided by national policies, it focuses on equity investment in the fields of new energy, new materials, artificial intelligence and digital economy, military industry and high-end equipment. During the reporting period, Changjiang Capital raised a record amount of investment. 6 new funds were established, with a total subscription scale of 19 billion yuan, including the Anhui new energy and energy conservation and environmental protection industry theme fund of funds with a scale of 12 billion yuan, and the Yichang green industry fund with a scale of 5 billion yuan. The management scale of private equity funds has been greatly improved, and the scale of funds under management has reached 33.911 billion yuan. 11 new investment projects have been added, and the pace of listing of investment projects has accelerated. At present, 3 projects are in the IPO review stage and 10 projects are in the counseling stage. The level of income and net profit has maintained steady growth, and the income structure has been further optimized.

　　(3) Work arrangements for the second half of 2023

　　Changjiang Innovation will continue to focus on the new energy, information technology, and biomedical industries, explore project investment opportunities in depth, and continue to provide support to enterprises in post-investment management to promote high-quality business growth.

　　Changjiang Capital will firmly establish a market-oriented fundraising path, expand fund cooperation entities, enrich fund management types, focus on hard technology fields in line with national strategies, strengthen forward-looking layout, deeply explore industrial opportunities, comprehensively judge value and risk, and continuously improve investment quality.

　　6. Overseas business

　　(1) Market environment

　　In the first half of 2023, although the global economic trend was better than expected, factors such as the negative lag effect of the Federal Reserve’s sharp interest rate hike in 2022 and the continued conflict between Russia and Ukraine still restricted the recovery of the world economy, and the global economic development still faced great uncertainties.

　　(2) Business initiatives and performance

　　In the first half of 2023, Changzheng International continued to adhere to the implementation of the company’s overseas development strategy, implement the business strategy of "focusing on the main business and laying a solid foundation", clarify the focus of business development, actively seek market opportunities, accelerate the development of research business, promote the transformation and upgrading of wealth management business, steadily carry out bond business and other key businesses, continuously optimize the business structure, and fully promote business development. At the same time, Changzheng International continued to improve internal management, strictly implement vertical management requirements, and improve compliance risk control capabilities. Strengthen the company’s cost management, improve the efficiency of capital utilization, and strive to achieve cost reduction and efficiency. Strengthen the company’s talent echelon construction, establish and improve the talent incentive mechanism, strengthen the company’s culture construction, and continuously improve the company’s operating ability and overall management level.

　　(3) Work arrangements for the second half of 2023

　　Changzheng International will continue to focus on promoting the development of research business, wealth management business, bond business and other businesses, actively respond to market changes, grasp market opportunities, meet the diverse needs of customers, promote the high-quality and sustainable development of various businesses, and improve the company’s overall operating capabilities. At the same time, continue to strengthen Changzheng International’s compliance risk control internal control management, continuously improve the risk management system and internal control mechanism, use information technology and digital means to optimize business processes, improve the support ability of middle and back-end departments for business development, improve management efficiency and quality, improve the overall operation management level, and ensure the company’s stable operation.

Analysis of core competitiveness

　　1. The company’s governance is stable and efficient, and the strategic implementation is making steady progress

　　The corporate governance structure of the company is sound and perfect, the pre-research procedures of the party committee are implemented, and the role of the party committee in corporate governance is highlighted. The shareholders’ meeting, the board of directors, the board of supervisors, and the management are clear in their powers and responsibilities, and the goals are consistent. A governance structure in which the party committee grasps the direction, the board of directors makes strategic decisions, the board of supervisors independently supervises, and the management is responsible for implementation is formed, which guarantees the company’s scientific decision-making and stable operation, and creates a good internal environment for the company’s strategic implementation, operation, management, and business development. The company has a diverse shareholder type and a scientific and reasonable shareholding structure, which brings abundant external resources and market vitality to the company’s development. During the reporting period, the company continued to promote the implementation of the strategy on the basis of further clarifying the development strategy. Guided by the implementation of the national strategy, with the starting point of "serving the development of the real economy and serving the growth of customer wealth", it grasped the new trends and opportunities of the development of "capitalization, institutionalization and platformization" in the industry. On the basis of consolidating and upgrading traditional business, it promoted the management of high net worth wealth with asset allocation as the core. It vigorously developed the industrial investment bank of the "industry + finance" model, systematically promoted the institutional Client Server, and ensured the implementation of the platform strategy. The company continuously strengthened its professional capabilities and management level, making internal management more scientific and standardized, internal and external coordination more smooth and efficient, and officers more motivated to start businesses. It effectively enhanced the company’s ability and vitality to participate in market competition.

　　2. Study the leading industry in business level, and continuously deepen the transformation of wealth management

　　The company attaches great importance to research business, and persistently improves its investment and research capabilities. Relying on complete business qualifications, leading service capabilities and comprehensive empowerment of financial technology, the research business is stable and ranks among the top in the industry, maintaining outstanding research advantages and strong market influence. The market share of public offering commission income has remained the top three in the industry for the past five years. In the first half of 2023, the market share of public offering continued to remain at a high level. Private Offering Fund business deepened its transformation and development. At the same time, it actively deployed the internationalization of research business, and the brand influence of comprehensive research services continued to increase. The wealth management line continues to play the role of ballast stone, customer assets continue to grow, income structure continues to optimize, the number of new customers in the market has reached a new high in the past two years, and the proportion of wealth management income contribution has risen steadily; the hierarchical investment advisory system has achieved remarkable results, investment advisory business income has reached a record high, wealth management transformation effect is obvious, and the strategic layout effect will be further revealed in the future.

　　3. Financial technology deeply empowers the company’s digital transformation

　　The company attaches great importance to empowering technology, continuously increases investment in financial technology research, gives full play to the supporting role of financial technology in business and management fields, and continues to make efforts in operation and maintenance management, independent research and development, data mining, etc., to help the company’s digital transformation and achieve comprehensive high-quality development. During the reporting period, the company adhered to the management policy of "keeping the bottom line, strengthening the middle line, and expanding the upper limit", deepened the integrated management system of "operation and maintenance + security + R & D", strengthened the infrastructure to ensure the safe and stable operation of the company’s various information systems; continued to promote the research and development of technical support platforms, management support platforms, and Xinchuang pilot platforms to provide impetus for the company to achieve digital transformation; forcefully build a platform-based, agile, and productized IT core capability, strengthen the application of financial technology scenarios, and continuously upgrade the core systems of various business departments; connect to the AIGC intelligent platform to build the company’s financial technology brand.

　　4. Implement substantive compliance risk control and strengthen business support

　　The company always adheres to the "stability of the word", adheres to the compliance management concept of "substance over form", strives to build a "three lines of defense" for compliance risk control, establishes a comprehensive risk management system, effectively covers all departments, subsidiaries, branches and business lines of the company, and runs through all aspects of decision-making, implementation, supervision, feedback, etc., to ensure that the company’s main risk control indicators continue to meet regulatory indicators, with strong risk resilience. During the reporting period, the company strengthened the dynamic management of risk control indicators, improved the intensity of risk control in key areas, improved the key business control system, and ensured the orderly development of the company’s various businesses; continued to promote the digital construction of the platform, optimized the threat and risk assessment measurement system, established the authority of risk control indicators, strictly implemented external indicators, and comprehensively sorted out the formation of internal indicators binding force; deepened the long-term construction of compliance, continuously improved the compliance system, strictly supervised self-inspection and self-correction, and properly resolved risk hazards; strengthened compliance culture publicity, compacted the main responsibility of compliance, increased compliance inspection and supervision, and promoted the concept of "everyone is the first responsible person for compliance development" into the mind.

　　5. Based on serving the real economy, strive to assume social responsibility

　　The company is firmly a practitioner, advocate and disseminator of social responsibility. While abiding by the law and creating wealth in compliance, it is grateful to give back to the society and demonstrates the mission and responsibility of "responsible securities firms". The company adheres to the orientation of serving the national strategy, serving the real economy and serving the development of the local economy, and actively plays the pivotal role of capital markets in promoting the high-level circulation of the real economy. On the one hand, the company fully attaches importance to the creation of science and technology innovation finance and green financial service system, comprehensively uses equity financing, bond financing and other financial means, is committed to providing all-round and comprehensive financial services for entity enterprises, and actively participates in the establishment of industrial guidance funds, science and technology innovation funds, government guidance funds, etc., to guide high-quality capital to flow to strategic emerging industries supported by the state, and promote industrial adjustment, regional development and new economic growth. On the other hand, the company has established a "hematopoietic" long-term mechanism for poverty alleviation. In recent years, the amount of financial assistance financing has exceeded 12 billion yuan, and the scale has been at the forefront of the industry. The company’s social responsibility practice cases have been widely recognized by the society, and it has been awarded full marks for the social responsibility special project work of the China Securities Association for many consecutive years. It has been awarded the title of "Outstanding Contribution Unit to Financial Support Hubei Economic Development in 2021" by the Hubei Provincial Government, and has been selected as "2022 Brokerage Value List’Annual Securities ESG Excellent Case ‘Award" and "2022 ESG Best Social responsibility (S) Practice Enterprise".

III. Risks facing the company and countermeasures

　　The company has always believed that effective risk management and internal control are the core elements of the company’s smooth operation. The company implements comprehensive risk management, so as to achieve full coverage of various risks, organizational levels, various types of business and all employees, to ensure that the overall risk is measurable, controllable and bearable. In daily business activities, the main risks the company may face are: market risk, credit risk, liquidity risk, operational risk, compliance risk, reputation risk, etc. At the same time, in response to the above-mentioned risks faced in the process of new business development, the company has established a new business risk management mechanism to strengthen the pre-identification, evaluation and post-inspection of new business risks, which can effectively control various risks.

　　1. Market risk

　　The market risk faced by the company refers to the risk of loss of the company’s assets and proprietary investment portfolio due to fluctuations in market prices (interest rates, exchange rates, stock prices, derivatives prices, commodity prices, etc.), mainly concentrated in the fields of equity price risk and interest rate risk.

　　(1) Equity price risk

　　Equity price risk refers to the risk of losses due to changes in the equity securities market, mainly from self-operated stock investment, New Third Board market making, stock index futures and other derivatives investment, asset management plan investment in equity securities, etc. Stock prices have greater uncertainty, which is the main type of market risk faced by companies. In the first half of 2023, class A shares rose first and then fell, and the overall market was in a narrow range of fluctuations. The indices of various sectors were differentiated. The Shanghai Composite Index rose 3.65%, the CSI 300, and the growth enterprises market index fell 0.75% and 5.61% respectively.

　　(2) Interest rate risk

　　Interest rate risk refers to the risk of losses due to changes in market interest rates, mainly from self-operated fixed income securities investment, financing business, debt financing, etc. In the first half of 2023, the China Bond New Comprehensive Wealth Index rose by 2.63%.

　　During the reporting period, the company generally took a proactive attitude towards market risks and took a number of measures to prevent them: ① based on market changes and business trends, grading authorized investment varieties, investment scale and loss limits, and strictly implemented the risk limit control mechanism; ② implemented diversified investment strategies, flexibly selected investment varieties and proportions, actively carried out strategic research, and appropriately used stock index futures, treasury bond futures and other financial derivatives to hedge market risks; ③ standardized and scientific use of financial valuation tools, internal risk measurement models, dynamic monitoring of relevant risk control indicators and business conditions, comprehensive use of risk net exposure, VaR value (value at risk), Greek letters, duration, basis point value, risk-adjusted income, sensitivity analysis and stress testing and other measurement means, regularly Quantitatively analyze and evaluate market risks to effectively reflect the inherent risk situation.

　　During the reporting period, the company’s self-operated investment and other business quantitative indicators remained stable, and there were no major market risk events.

　　2. Credit risk

　　The credit risk faced by the company mainly refers to the risk of losses caused by the failure of the issuer or counterparty to fulfill the obligations stipulated in the contract, or the change in the market value of the debt due to changes in credit rating or performance ability. Credit risk mainly comes from the following business categories: first, margin financing, stock pledge repurchase, agreed repurchase securities trading, restricted stock financing and other financing business; second, bond investment trading, other credit products and other investment business; third, interest rate swaps, over-the-counter options, forwards and other over-the-counter derivatives business; fourth, other businesses that undertake credit risk management responsibilities. In the first half of 2023, macro monetary policy continued to be loose, liquidity was relatively abundant, credit risk release slowed down, and the number of newly defaulted bonds and defaulted entities in the bond market decreased significantly year-on-year.

　　During the reporting period, the company generally adopted a steady and enterprising attitude towards credit risk, and took a number of measures to manage it: (1) improve the credit risk management system, improve the due diligence, credit rating, access management, asset classification, risk monitoring, risk disposal, risk reporting and other full-process control mechanisms; (2) continue to improve the customer credit rating system, establish a unified rating model to identify and evaluate customer credit risk, and continuously improve the management process and management standards; (3) continue to improve the risk limit authorization system, carry out risk limit grading authorization for each business, and strictly control risk exposure, concentration, credit rating and other risk control indicators; (4) continue to optimize the credit risk measurement system, customer default rate, breach of contract loss rate, Measure risk control indicators such as collateral coverage and expected credit losses, set reasonable credit risk stress scenarios, carry out regular and special project stress testing and respond to test results; (5) Establish an asset quality management system, regularly carry out asset risk investigation and asset classification, and through various risk mitigation measures and various risk disposal means, gradually resolve stock risks and reduce the level of risk asset exposure borne by the company; (6) Continue to strengthen the construction of credit risk information systems, and continuously improve threat and risk assessment, measurement, monitoring, early warning, reporting and other management processes Automation level and management efficiency.

　　During the reporting period, the quality of the company’s financing business assets was stable and improved, and there were no default events in the bonds held by self-operated investment, and the overall credit risk was manageable.

　　3. Liquidity risk

　　Liquidity risk refers to the risk that the company cannot obtain sufficient funds in a timely manner at a reasonable cost to repay maturing liabilities, fulfill other payment obligations, and meet the company’s capital needs for normal business development. In the first half of 2023, the market capital is relatively loose, the company’s financing channels are stable, and various businesses are developing steadily.

　　During the reporting period, the company implemented a robust liquidity risk management strategy and actively prevented it through a number of measures: (1) Adhere to the unified management of funds, strengthen the management of capital positions and cash flows, calculate the capital gap within a certain period in the future on a daily basis, and evaluate the company’s capital payment ability; (2) Establish an appropriate scale of high-quality liquid asset reserves according to risk appetite and monitor them on a daily basis; (3) Based on regulatory requirements and internal liquidity risk management needs, implement limit management on liquidity risk indicators, decompose limit indicators to main business departments, and calculate and monitor relevant limit indicators on a daily basis; (4) carry out liquidity risk stress testing on a regular and irregular basis to evaluate the company’s risk tolerance, and improve the company’s liquidity risk bearing capacity; (5) carry out liquidity risk pressure capacity on a regular basis Emergency drills to continuously improve the liquidity risk management emergency mechanism and improve the liquidity risk emergency response capabilities; (6) Continuously improve the liquidity risk reporting system to timely and accurately report the company’s liquidity risk level and management status.

　　During the reporting period, the company’s liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) continued to meet regulatory requirements, and the overall liquidity risk was manageable.

　　4. Operational risk

　　Operational risk refers to the risk of losses caused by imperfect internal processes, human operation errors, information system failures or external events to the company. Operational risk runs through all departments, subsidiaries and branches of the company in all positions and work processes, and has the characteristics of wide coverage, variety and throughout. With the continuous increase of the company’s business scale, the increasingly complex types of business, and the advancement of group management, if the company fails to identify key operational risk points in various lines and daily operations in a timely manner and take effective mitigation measures, it may lead to the company’s poor management of operational risk and cause significant losses.

　　During the reporting period, the company took an averse attitude towards operational risks and managed them through a number of measures: (1) sorting out business processes in advance, sorting out business risk points, collecting external risk information, continuously improving and optimizing existing business processes, system functions, business management and control measures, etc., to eliminate hidden risks; (2) monitoring business data and early warning information through various information systems, etc., to analyze and troubleshoot latent risks; (3) conducting in-depth analysis of risk events afterwards, formulating rectification plans in a timely manner, supervising and implementing rectification measures, and holding responsible units and individuals accountable for risk events to further strengthen the risk awareness of all employees; (4) conducting comprehensive self-examination of key businesses, new businesses, and businesses involved in risk events to investigate potential risks and improve business Overall control measures to prevent the occurrence of risk events.

　　During the reporting period, the company did not experience any major operational risk events.

　　5. Risk of compliance

　　Compliance risk refers to the risk of securities fund operating institutions being investigated for legal responsibility, regulatory measures, disciplinary action, property damage or business reputation loss due to the violation of laws, regulations and guidelines by securities fund operating institutions or their staff.

　　During the reporting period, with the goal of "stabilizing the compliance bottom line and strictly preventing major risks", the company focused on "improving the system guarantee, strengthening cultural cultivation, and improving the long-term mechanism", and continuously promoted the management and control of compliance risks. (1) Timely improve the system and strengthen the normative guarantee. Take the initiative to adapt to changes in laws and regulations, regulatory rules and self-discipline rules, strengthen the learning and interpretation of new laws, new regulations and new cases, and popularize them. Timely formulate and revise rules and operating procedures and strengthen the implementation of the system. (2) Promote cultural moisturization and deepen the planting of the soul. Organize the training and implementation of the concept of honor and disgrace in the securities industry "follow the rules"; compile typical cases of brokerage, sponsorship, bonds, asset management, etc., and give accurate reminders to related businesses; use OA, Changjiang Culture Online, compliance culture wall and other carriers and channels to promote the concept of "everyone is the first responsible person for compliance" into the brain; actively make a voice appearance to create the image of the company and the industry. (3) Weave a dense prevention and control system to optimize the long-term mechanism. Focusing on investment and development, private placement product promotion, dropshipping product access, co-location entrusted monitoring and verification, etc., we will continue to improve the internal control mechanism; establish and improve the regular meeting and rectification mechanism for sponsor project risks; strengthen the bond redemption risk tracking, mapping, monitoring and prevention and control mechanism.

　　During the reporting period, the company was not subject to any major administrative penalties.

　　6. Reputation risk

　　Reputational risk refers to the risk that investors, issuers, regulators, self-regulatory organizations, the public, the media, etc. form negative evaluations of securities companies due to the company’s business practices or external events, as well as violations of integrity regulations, professional ethics, business norms, and regulations by its staff, thereby damaging its brand value, hindering its normal operation, and even affecting market stability and social stability.

　　The company continues to strengthen reputation risk management, and takes a number of measures to improve reputation risk incident prevention and disposal capabilities: (1) improve the reputation risk management system, clarify the responsibilities of the board of directors, board of supervisors, managers, departments, branches and subsidiaries, and strengthen vertical management and process management; (2) strengthen risk identification across all lines, comprehensively, systematically and continuously collect and identify reputation risk drivers within the scope of responsibilities and report them in a timely manner to improve the ability to prevent reputation risk events; (3) real-time monitoring of the company’s public opinion, timely detection and disposal of risk hazards, and reduce negative impacts; (4) establish a staff reputation constraint assessment mechanism, incorporate employee reputation risk management into the personnel management system and use it as an important basis for work assessment and promotion; (5) continue to Carry out reputation risk management training, improve the reputation risk prevention awareness of all employees, and strengthen the ability of all units to prevent and resolve reputation risk incidents; (6) Continue to standardize the brand promotion behavior of all units of the company, clarify the company’s brand promotion process specifications and publicity requirements, strictly check the authenticity, compliance and rigor of the released content, strengthen the information management of employees’ personal self-media platform, and improve the reputation risk management awareness of all employees.

　　During the reporting period, the company did not experience any significant reputational risk events.

　　7. New business risks

　　The types of new business risks are novel and complex, and the risk points are diverse and uncertain. The company continues to establish and improve the new business risk management system and process, and continuously optimize the corresponding risk measurement models and risk mitigation methods.

　　The company takes a number of measures to manage new business risks: (1) clarify the risk management system and process of the new business, fully identify and evaluate the risks before the new business is launched, and formulate corresponding risk control measures and process mechanisms; (2) After the new business is launched, strengthen monitoring and improve the frequency of special project evaluation; (3) Regularly check the problems in the operation of the business, summarize the risk characteristics of the business, and continuously improve the new business system, process and risk control mechanism.

　　During the reporting period, the company’s new business performed well, and the risks of new business were within the company’s tolerance, without having a significant impact on the company’s operating results and financial position.