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CICC 1H2018 NDR Presentation

August 2018

1

Section I Operating Environment 2 1

Section III Business Highlights 9 3

Section II Financial Performance 5 2

Table of content

2

Section I

Operating Environment

3

247.9

123.2 120.9

2017 1H2017 1H2018

-2%

501.1 482.7

2017 1H2018

-4%

2% 26%

74%

70%

54%

24%

30% 20%

901

392 460

2017 1H2017 1H2018

IPO FO Preferred shares

4,534

1,644 1,989

2017 1H2017 1H2018

59%

56%

65%

41%

44%

35%

31

15

31

2017 1H2017 1H2018

IPO FO

+17%

12/31 01/31 02/28 03/31 04/30 05/31 06/30

SSE Index

Hang Seng SOE Index

S&P500

MXWO

A-share Market Down Significantly with Low Liquidity, Hong Kong

Market Down but Active

A-share IPO Slowed, Hong Kong Equity Capital-Raising

Surged 115%

Domestic Debt Capital-Raising Grew, Overseas Debt

Capital-Raising by Chinese Issuers Flattish

Emerging Stock Markets Down, A-share Market

Underperformed

1H18

-13.9%

-5.4%

+1.7%

-0.7%

December 31 2017 =100

Source：Bloomberg

Source ：Wind & Dealogic

Source: Stock exchanges

HKD bn

A-share Trading Volume Shrank, HK Stock Trading More

Active RMB bn

88.2

126.6

2017 1H2018

+43%

RMB bn A-share equity

capital-raising HK equity capital-raising

by Chinese issuers

USD bn USD bn RMB bn

Domestic Credit Bond offerings

underwritten by securities firms

PRC-based overseas

debt capital-raising

-21%

+148%

+71%

Source: Wind & Dealogic, overseas bond offerings by Chinese issuers include exchangeable

bond, excluding CD

A-share ADTV HK Stock Market ADTV

Operating Environment

-12%

n/m

+115% +21%

4

311

144 127

2017 1H2017 1H2018

Operating Income

-12%

Securities Industry: Operating Income / Net Profit Fell Double

Digits, Traditional Chinese Brokers Struggled

Industry Operating Income Declined YoY

RMB bn

Net Profit Fell 28% Leverage Stable at Low Level

Source: Securities Association of China

RMB bn

113

55

40

6.5% 3.3% 2.2%

2017 1H2017 1H2018

Net profit ROE

-28%

RMB bn

1,849 1,857

2.75 2.84

2017 1H2018

Net assets Leverage

+0.4%

Source: Securities Association of China

Note: Client assets excluded in computing total assets

Source: Securities Association of China

144

127

-2 -6

-0.1 -9

-7 -0.1

7

1H2017Cash equity IB AM NII Prop IA Others 1H2018

Operating Income of All Major Business Lines Declined

Note: Cash equity only includes net revenue from securities sales on behalf of clients (including

seat rental). Others include equity investment gains and other income

5

Section II

Financial Performance

6

2,258

916 1,150

477

202

495

2,766

1,111

1,631

8.8% 4.1% 4.3%

2017 1H2017 1H2018

CICC CISC ROE

+47%

+26%

Annualized

8.5%

11,229

4,534 6,199

4,112

1,286

2,679

15,260

5,818

8,813

2017 1H2017 1H2018

CICC CISC

CICC Group: Revenue and Net Profit Grew by Double Digits, ROE

Improved

Consolidated Revenue Grew 51%, CICC Standalone

Grew 37% Consolidated Net Profit Grew 47%

Cost-Income Ratio Down to 64.8% EPS Improved

RMB mn

%

Note: Cost-income ratio= operating expense (revenue and other income – interest expense –

fee and commission expense) under IFRS

68.4%

66.6%

64.8%

2017 1H2017 1H2018

Cost-income ratio

Note: Net profit refers to net profit attributable to shareholders / equity holders and other

equity instrument holders of our Group.

RMB mn

RMB/Share

+51%

+37%

Note：Total revenue and other income. Differences due to reconciliation in consolidated

financials

0.76 0.76

0.34 0.39

2016 2017 1H2017 1H2018

EPS

Annualized

0.78

7

CICC Group: Balance Sheet Grew Moderately, Leverage Stable

Adjusted Total Assets Grew

RMB mn

Liquidity Also Grew

RMB mn

Majority of Debts in Long-term

RMB mn

Leverage Managed at a Stable Level

RMB mn

Note: Net assets refer to Total equity attributable to shareholders of the Company and

holders of other equity instruments. Accounts payable to brokerage clients have been

deducted in calculating the leverage ratio.

Note: Financial assets = financial assets at fair value through profit or loss +financial assets

under repurchase agreements + funds out-financed + derivatives + financial assets available

for sale

149,910 190,465 214,583

53,463

47,347 49,319

203,373

237,812

263,902

1H2017 2017 1H2018

Client assets Adjusted total assets

+11%

+13%

36,269 34,787 46,410

113,641 155,678

168,173

149,910

190,465

214,583

1H2017 2017 1H2018

Financial assets Cash+others

+13%

+8%

+33%

35,496 44,836 50,384

5,508

26,006 28,733

41,004

70,842

79,117

1H2017 2017 1H2018Short-term Long-term

+12%

35,423 36,707 39,962

4.2 5.2 5.4

1H2017 2017 1H2018Net assets Leverage

+9%

Note: Other liabilities include REPOs, accounts payable to brokerage clients, and financial

liabilities at fair value through profit or loss.

8

11,790 10,761

252% 223%

2017 1H2018

-9%

Major Risk Control and Financial Management Indicators

Remained Healthy

月度总投资组合的风险价值保持在总限额之下 Maintenance Ratio of Margin Finance Business at a

Reasonable Level

Adjusted Liquidity Ratio Remained Strong Key Regulatory Indicators Healthy

RMB bn

Monthly Ending VaR Remained Low

RMB mn

RMB bn

180 203

106 121

1.70 1.68

(0.50)

-

0.50

1.00

1.50

0

50

100

150

200

250

2017 1H2018

Adjusted current assets Adjusted current liabilities Adjusted liquidity ratio

Note: Adjusted liquidity ratio = (current assets –accounts payable to

brokerage clients)/(current liabilities – accounts payable to brokerage

clients)

71.0 55.2 63.5

54.8 44.9 40.0

15.3

12.4 11.8

11.5 10.6

9.5

82.6

64.1 71.4

62.0

51.1 45.7

1801 1802 1803 1804 1805 1806

CICC CISC

Group VaR limit of total portfolio: RMB150 mn

Note: VaR of the total portfolio hit RMB94.7 mn in 1H18

22,204 21,059

273% 249%

2017 1H2018

-5%

RMB mn

Group margin finance balance

and maintenance ratio

Group stock pledge balance

and maintenance ratio

Note: In 2017, CITICS, Haitong and Huatai reported margin finance maintenance ratio stood at 300%,

267%, and 304% respectively, and stock pledge maintenance ratio stood at 246%, 232% and 238%,

respectively

Regulatory indicators 2017 1H2018 Alarming Line Regulatory

Line

Risk reserve coverage ratio 137.2% 161.0% ≥120% ≥100%

Capital leverage ratio 10.4% 11.9% ≥9.6% ≥8%

Liquidity coverage ratio 354.8% 283.1% ≥120% ≥100%

NSFR 129.4% 163.1% ≥120% ≥100%

Net capital / net assets 57.5% 65.5% ≥24% ≥20%

Equity position / net capital 51.2% 29.7% ≤80% ≤100%

Fixed income position / net

capital 269.9% 254.3% ≤400% ≤500%

9

Section III

Business Highlights

10

Business Highlights

Premier Investment Banking Franchise, Pipeline Strong

Well-Balanced Business Mix

Equities Witnessed Strong Growth of PB and Cross-border Business

FICC Significantly Outperformed

Wealth Management Upgrade Ramped Up

2

1

3

4

5

Investment Management AUM Continued to Grow 6

Market Leading Research Coverage 7

Continued Efforts to Strengthen Middle and Back Office Capabilities 8

11

IB 11%

EQ 17%

FICC 17%

WM 9%

IM 11%

CISC 30%

Others 5%

1H2018

RMB8,813

mn

Highlight 1: Well-Balanced Business Mix

Major Business Segments Continued to Grow on Solid Fundamentals

No.1 underwriter globally for equity capital-raising

by Chinese issuers

No.1 underwriter for A-share IPOs

No.1 among domestic securities firms for

investment-grade USD bond offerings by Chinese

issuers

No.4 global advisor for PRC-based M&As

Domestic / overseas trading volume hiked, with a

premium commission rate above industry

Leading stock connect market share, where

northbound trading volume increased 60%. 40%

QFII/RQFII coverage

Certified Tier-1 dealer for OTC derivatives.

Size of offshore products exceeded RMB26 billion

Sound trading returns thanks to prudent

investment strategies

Solid progress in client business, with good

results from client trading / structured

products and robust growth of ABS

Total AUM of our Group reached RMB 686 billion

CICC AUM of traditional asset management1 amounted to

RMB 200 billion，with 301 products under management,

majority under active management

AUM of CICC Capital exceeded RMB250 billion

42,000 customer accounts and c.a. RMB760 billion

customer assets, or RMB18 million+ per account

Trading market share improved，product sales grew

Revenue mix optimized, with 60%+ contribution from non-

commission income

IB

EQ

WM

FICC

IM

CISC realized total revenue of RMB2.679 billion

and net profit of RMB495 million.

CISC has 340,000+ affluent customers, and

c.a. RMB240 billion customer assets

Product sales doubled YoY in 1H2018

CISC

Note1: AUM of traditional asset management business includes AUM of asset management and mutual fund arms.

Note2: Currency is RMB on this page.

12

114.8

31.7

74.4

2017 1H2017 1H2018

A-share H-share

2,442

687 755

160

40 212

2,602

726 967

2017 1H2017 1H2018

Fee and commission income Others

+33%

237

66

122

2017 1H2017 1H2018Domestic Overseas

97

26 33

2017 1H2017 1H2018

Domestic Overseas

Highlight 2: Premier Investment Banking Franchise, Pipeline

Strong

RMB bn

Source：Wind，Company statistics，Bloomberg

USD bn

Source：Dealogic，by the date of announcement

Total Deal Size 1H2018 PRC-based

M&A League Table Total Underwriting Amount

1H18 Investment-grade

USD Debt Offering

League Table (Chinese securities firms)

+26%

+75%

-87%

Rank Firm Share

1 MS 14.8%

2 UBS 10.5%

3 BAML 10.3%

4 CICC 10.0%

5 LAZ 9.5%

66% +86%

+98%

+39%

97% 86%

14%

M&A: Top-notch Financial Advisor

Revenue Grew YoY

Debt: Domestic and Overseas Debt Capital-Raising Grew

Total Underwriting Amount

RMB bn

+134%

+145%

13%

Equity: No.1 Global Underwriter for Equity Capital-

Raising by Chinese Issuers

87%

13%

Rank Firm Share

1 CICC 2.2%

2 CITICS 0.9%

3 GTJA 0.7%

4 Haitong 0.6%

5 CMS 0.3%

87%

RMB mn

78% 95%

6%

94%

1H2018 Chinese Issuer

Global Equity Offering

League Table

Rank Firm Share

1 CICC 10.0%

2 CSC 9.3%

3 CITICS 7.8%

4 GS 6.9%

5 MS 5.5%

Note：1PRC Issuer includes Mainland China, Hong Kong and Taiwan. Equity underwriting includes IPO, FO and preferred shares.

2. A-share based on sponsor，overseas based on JBR

Source：Wind, Dealogic

91%

9% 9%

91%

+69%

22% 5%

34% 70%

30% 3%

81%

19%

Rank Firm Share

1 CITICS 13.1%

2 CSC 10.8%

3 CICC 7.5%

4 CMS 7.3%

5 Haitong 5.0%

1H18 Domestic Debt

Offering League Table (Securities firms)

13

1,492

655 617

1,448

669 859

2,940

1,324 1,476

2017 1H2017 1H2018

Fee and commission Income Others

+12%

Highlight 3: Equities Witnessed Strong Growth of PB and Cross-

border Business

Revenue Grew Driven by PB and Cross-border Business Leading QFII/RQFII Coverage and Stock Connect Market

Share

Trading Volume Increased thanks to Premier Institutional

Clientele Bps

3.4 3.4 3.2

4.8 5.0 5.0

0

1

2

3

4

5

6

2017 1H2017 1H2018

Market CICC

Commission Rate at a Premium Above Industry

51%

49%

49%

51%

RMB mn

1,643

703 889

2017 1H2017 1H2018

RMB bn

A-share Trading Volume

299

125

201

2017 1H2017 1H2018

+62%

HK Stock Trading Volume

+26%

9.9%

11.3%

16.0%

3.2%

2017 1H2018Shanghai-HK Stock Connect - Northbound

Shanghai-HK Stock Connect - Southbound

Shenzhen-HK Stock Connect - Northbound

Shenzhen-HK Stock Connect - Southbound

193 195

39.9% 40.3%

2017 1H2018

QFII/RQFII Market share

+1%

Account % %

58%

42%

HKD bn

14

439 182 271

1,446

546

1,256

1,885

728

1,526

2017 1H2017 1H2018

Investment gain Others

+110%

Highlight 4: FICC Significantly Outperformed

Revenue Surged on Solid Client Business Growth and

Prudent Trading Diversified Product / Service Offerings

FI Position Increased Driven by Client Business

Cross-border structuring

Fixed income research

Inter-bank MM

Risk management

Fixed income sales

Customized investment / financing

Overseas bond sales

Futures brokerage

Interest rate swap

ABS Offering Amount Grew

FICC

Sales

Product Trading

Structured Products

64,365

77,728

2017 1H2018Fixed Income Position

+21%

RMB mn

RMB mn

75%

25%

77%

23%

82%

18%

82

16

31

2017 1H2017 1H2018

+91%

RMB bn

Source: Offering Amount as ABS manager from Securities Association of China Note: Debt investments in financial assets at fair value through profit

or loss + Debt investments in financial assets at fair value through

other comprehensive income (Debt investments in AFS in 2017)

）

15

1,013

480 520

679

283 275

1,692

763 795

2017 1H2017 1H2018

Fee and commission Income Others

+4%

737 760

2017 1H2018

+3%

Highlight 5: Wealth Management Upgrade Ramped Up

Revenue Grew Moderately

RMB mn

Customer Accounts / Assets Grew

Ramp-up of Wealth Management Upgrade

Capacity Building Integration with CISC

Marketing/Branding System Building Total

Wealth

Solution

Wealth research

Asset allocation

Portfolio management

Strengthen cross-sell

Product diversification

Integration of head office

functions

Product, resource,

training, marketing support

Customized products for

retail investors

Wechat, APP, PC-based

marketing

Digital-based data

collection and customer

behavioral analysis

Strengthen brand

recognition

Customer Accounts

1000

Customer Assets

38.6 41.7

2017 1H2018

+8%

RMB bn

CISC Customers Assets Declined amid Market Weakness

37%

63%

40%

60%

35%

65%

Customer Accounts 1000

12% 12%

88% 88%

2,797 2,840

2017 1H2018

Institutional Affluent Retail

+2%

RMB bn Customer Assets

78% 79%

18%

18%

4%

3%

1,513

1,325

2017 1H2018

Institutional Affluent Retail

-12%

Intelligent system

development

GWMS Version 1.2.1

launched

O2O customer

acquisition and retention

16

AM-collective

7%

AM-segregat

ed 59%

AM-special 27%

MF 3%

JV 4%

2017

357

249 310

357

376

606

686

2017 1H2018

Traditional asset management Private equity

380 237 156

1,410

659 776

1,790

896 932

2017 1H2017 1H2018Investment gain and others Fee and commssion income

Highlight 6: Investment Management AUM Continued to Grow

Revenue Grew Moderately

Private Equity AUM Exceeded RMB300 billion

RMB mn

Majority of Asset Management AUM Under Active

Management RMB bn

Total AUM of Our Group Expanded Steadily

RMB bn

AM-collective

6%

AM-segregat

ed 52%

AM-special 32%

MF 5%

JV 5%

1H2018

376

+4%

+13%

83 133

165

177

249

310

2017 1H2018

Fee based AUM JV funds AUM

+25%

+5%

Note: Traditional asset management includes asset management and mutual fund.

RMB bn

79%

21%

83%

17%

74%

26%

Traditional AM 38%

Private equity 62%

17

Highlight 7: Market Leading Research Coverage

100+ experienced professionals, covered domestic and abroad

clients

Multi-department, multi-sector, and multi-dimensional research

platform

Multi-Sector, Multi-Dimensional Research Platform Extensive Coverage and Bilingual Strength

Deep Understanding of China

During the first

half of 2018, we

published 6,800

reports in

English and/or

Chinese.

40+

sectors

1,000+

stocks

Closely follow macro

and industry policy

trends:

Wonderful L.I.F.E

Beautiful China

Biological innovation

China industrial

internet

……

Macro

Market

Industry

Asset

Allocation

Wealth

Research

20+ FI research

professionals

Extensive credit

bond coverage

Maintained credit

rating of over

2,000 bonds

High-caliber

investment

research

professionals

Wide coverage

over asset

classes

Strong active

management

capability

Set up WSC

Set up Research Depart. II

Strong capital market

research to provide asset

allocation solutions to

customers

Closely follow economic trends

Capture industry / single stock

investment opportunities

Better serve new economies

New

Economy

Fixed

Income

18

Highlight 8: Continued Efforts to Strengthen Middle and Back

Office Capabilities

Initiatives to Enhance Talent / Risk and Compliance / IT System Management in 1H2018

Risk Control and Compliance

Implement consolidated balance sheet management and

comprehensive risk management

Strengthen control of all types of risks, and better manage equity /

credit / currency volatility risks and regulatory risks

Strengthen investor suitability management

Prevent against major risk incidents and occurrence of unexpected

material loss

Talent Management Scheme IT Systems

Announce to implement the Participating Managing Director

Program (the "PMD" Program)

Certain Directors, Senior Management, PMDs and senior staff

collectively and voluntarily bought H Shares of CICC out of

their own funds on a voluntary basis at their own risks

Integrated IT systems to support major business lines

Interconnection between systems further strengthened

IMS

ODTS

FOSP

gWMS

gFIMS

FITS

Big data

Robo-

advisor

CISC APP

IB

EQ WM

FICC AM/

MF

CISC

Operations FRMS

Tel: (8610) 6505-1166 Http:www.cicc.com

Thank You!