The predecessor of Haitong Securities Co., Ltd. (“Haitong Securities” or “Haitong”) was founded in 1988 as one of the earliest securities companies in mainland China. Haitong was transformed to a limited liability company in 1994 and gradually developed itself into a national securities firm. It was wholly transformed to a joint-stock company at the end of 2001. In Nov.2002, Haitong became a full-service securities company with the largest registered capital and embarked on the road to set up a financial holding group with international presence after acquiring Yellow Sea Futures Co., Ltd. (now renamed Haifu Futures) in 2005. Haitong has managed to take the lead in various businesses during past years and was granted the “innovative status” by the Securities Association of China in May 2005, signaling the beginning of a new era. In 2006, with the completion of NTS reform and comprehensive governance of securities houses, the capital market has entered to a real transitional phase. During this year, Haitong seized the opportunity, deepened its internal reform and speeded up development, pushing the company to a new stage in terms of business, management, risk control, system and process building. The launch and substantial progress of listing also helped Haitong to achieve a good start for its 3-year plan. On June 7, 2007, Haitong Securities gained approval from CSRC for its back-door listing through Urban Agro-Business (600837.CH), and was officially listed on July 31 with the new registered capital of RMB 3.389bn.

Haitong Securities has achieved outstanding economic and social benefits during past years following the business philosophy of “Practicability, Innovation, Prudence and Excellence” and the management principle of “Standardized Management, Proactive Innovation, Prudent Operation and Earning Focus”, sticking to the corporate brand of “Prudent, even Conservative” and living up to the operating & managerial objective of “First-class Management, High-caliber Staff, Value-added Services and Outstanding Profitability”. Haitong has set up a network comprising 92 branches in 48 cities across China serving a client base of 2mn accounts and engaging in investment banking, brokerage, proprietary trading, investment consulting, private equity and assets management, etc. Haitong was awarded “Best Local Broker in China” by FinanceAsia in 2003. In 2005, Haitong carried out cost-effective expansion by taking over Gansu Securities and Xing’an Securities, resulting in a network of 124 branches and 57 sub-branches. In 2006, Haitong was awarded as “2006’ Strongest Securities Companies with Comprehensive Strength”, “Best Broker”, “Best Research Team in Economy Policies” in the 21st Century Annual Conference of Chinese Capital Market Investment.

Haitong has set up a uniquely favorable brand image as a leading investment bank after nearly 10 years’ efforts, especially reputed for the expertise in corporate finance for commercial banks and hi-tech enterprises. The company has been the lead underwriter of the IPO, rights issue, seasoned offering and CB issuance of 600000.CH Shanghai Pudong Development Bank, 600016.CH Minsheng Bank, 000001.CH Shenzhen Development Bank, while the IPOs of 600289.CH Bright Oceans Inter-telecom, 600588.CH UFIDA Software and 600171.CH Shanghai Belling helped Haitong win the honor of investment bank for hi-tech firms. By Dec.31, 2006, Haitong has provided financial service for 134 companies, totally raising 54.7bn RMB, of which 39.3bn RMB for 88 IPO, 11.2bn RMB for 38 rights issue, 4.2bn RMB for 8 seasoned offering and 49.4bn RMB for 49 companies as associate lead underwriter. In 2006, Haitong finished NTS reforms for 132 companies, ranking No.1 with market share of 10% and taking far lead in sponsoring the NTS reforms. High quality service, superb technical level and innovative spirit made investment banking widely recognized by clients. In April. 2006, it was awarded “2005’ Best Investment Banking Team” and “2005’ Best NTS Reform Team”. In Jan. 2007, it won “2006’ Best Investment Banking Team” awarded by HEXUN.COM, a major financial website.

In Oct. 2002, Haitong set up a post-doctoral workstation, the first among securities firms in Shanghai, with the approval from the Ministry of Personnel. Haitong has been awarded the first prize in the research contest sponsored by Shenzhen Stock Exchange among securities and fund management companies for 7 consecutive years during 1999-2005. At present, Haitong Securities enjoys a team comprising operation and management experts with hands-on experience, most of whom are master- or doctor-degree holders. The Company has established long-term partnership with Xi’ning City of Qinghai Province, Baoji City of Shaanxi Province, Huangshan City of Anhui Province, Yinchuang City of Ningxia Hui Autonomous Region and Guiyang City of Guizhou Province and been engaged by the local governments as their financial advisors.

During past years, Haitong has been always active in initiating and strengthening the cooperation with leading financial institutions from abroad and continuously expanding the overseas business network. Haitong has established JVs during past years. Fortis-Haitong Investment Management Co., Ltd. (Fortis-Haitong) is a 51%-owned subsidiary of Haitong Securities, which was the only domestic manager assigned “AM2 (China)” by well-known global rating agency Fitch Ratings in 2005 and 2006. By Dec. 31, 2006, Fortis-Haitong has a total AUM of RMB 15bn. At the end of 2004, Haitong-Fortis Private Equity Fund Management Co., Ltd. (Haitong-Fortis), a 67%-owned subsidiary of Haitong Securities, started its official operation. Haitong-Fortis is the first private equity fund management company in China and the manager of China-Belgium Direct Investment Fund (China-Belgium Fund), which was initiated by Belgian and Chinese governments and business corporations with the total size of RMB 1bn approved by the State Council of China. Currently, Haitong is one of the top 3 local brokers for QFII clients with total quota over USD 1bn, serving Nikko Assets Management, Standard Chartered Bank, Merrill Lynch, Fortis Bank, Dresdner Bank and ABN AMRO Bank.

Haitong has accumulated abundant experience in the operation and management of securities business during past years, establishing fairly comprehensive organizational structure of risk control. By sticking to the business principle of “Prudent, even Conservative”, Haitong Securities has always taken great efforts to improve corporate governance and risk control to ensure sound and sustained development since its foundation. During recent years, Haitong Securities has strengthened the risk management by improving the rules and operation procedures related to Plan for Independent Depository Management of Client Assets and enhancing the dynamic monitoring and precaution of proprietary trading and assets management through the quantification of risks in these two businesses. In the meantime, the Risk Control Department takes timely actions to formulate the rules, procedures and mechanisms of risk control governing derivative products and other financial innovations that are previously unfamiliar to Chinese market. In the long run of securities market, Haitong has set up scientific, standardized and rigorous operation, management and risk control systems and created a unique corporate brand featuring prudence and innovation.

In 2007, with the theme of innovation and development, the Chinese securities market is going to step into a totally new phase. As the successful completion of listing and capital increase, Haitong’s governance structure, brand impact and capital strength will be substantially enhanced, creating a favorable condition for “3-year plan”. Upon such great opportunity, Haitong will continue speeding up transformation, building a core market-oriented competitiveness, internationalization and specialization, deepening reform on pay assessment, personnel system, structure combination, process recreation and operation mechanism by sticking to the demands of modern financial corporate system and investment banking. By closely following the innovation trend of the market, Haitong will focus on the business transformation, and new profit growth and model. Based on the 3-step strategy of “going public, setting up a financial holding group, enhancing international presence”, Haitong will accelerate the process of setting up a financial holding group and endeavor to develop itself to a top-tier securities company in China with increasing presence in overseas capital market.