OUR STRENGTH

Premier brand

We have successfully cultivated a premier brand name in the financial services industry. We have set high standards for ourselves since our inception, and we have always adhered to them. This has helped firmly establish our reputation. From 2007 to 2014, we were awarded the “Best Investment Bank in China” by Global Finance for seven out of eight years and the “AAA Best Investment Bank in China” by The Asset for six out of eight years.

Our brand name and reputation enable us to attract new clients and talent as well as retain our existing clients and employees, which in turn strengthens our market-leading position. We believe that this virtuous cycle will continue. Our brand name also helps us win high-profile mandates. Our clients trust that we will be able to successfully execute their most important transactions. Our strong reputation helps us win regulatory support for our new products and services and also promote new products and services to our clients more effectively.

Distinct international DNA

We are the first Sino-foreign joint-venture securities firm in the PRC. Our very first completed project was the 1997 overseas IPO of China Telecom (Hong Kong) Limited. Since our inception, we have adhered to the international best practices in terms of business operation, corporate governance, and talent and culture cultivation. By providing high quality cross-border products and services to both domestic and overseas clients, we believe that we are the most influential PRC-based investment bank with distinct international DNA.

Over the years, we have built a very strong international presence. We opened our first overseas subsidiary in Hong Kong in 1997 and pioneered among PRC-based investment banks in owning and directly managing overseas operations. We currently have established overseas operations in four major international financial hubs including Hong Kong, New York, London and Singapore. We have also formed strategic partnerships with many international corporations to broaden our exposure to the overseas market. We seamlessly integrate our domestic and overseas business operations. This allows our teams to become proficient in both domestic and international transactions. About half of our team members in investment banking and research possess practice licenses for both domestic and certain overseas jurisdictions. This has enabled us to provide one-stop global services to our clients.

In 2014, revenues from overseas businesses accounted for 27.9% of our total revenues, which we believe is the highest among all publicly listed PRC securities firms. During the period between 1997 and 2014, 42.7% of our completed investment banking transactions in terms of transaction value were overseas or cross-border transactions. Our substantial international business naturally diversifies our exposure to geoeconomical and geopolitical risks.

High-quality, diverse and loyal client base

We have a high-quality and diverse client base primarily consisting of industry-leading corporations, institutional investors and high-net-worth individuals. We develop and maintain long-term relationships with our clients and are dedicated to providing them with a comprehensive suite of products and services. We have won our clients’ loyalty through our deep engagement and our thorough knowledge and understanding of their businesses. Our clients always entrust us to handle their strategically important and sophisticated transactions.

Leading corporations form the foundation of our client base. Over the years, we developed a group of large clients, including many strategically important SOEs as well as leading non-SOE enterprises. We have further solidified our long-term relationships with these clients through continuous and dedicated service. Furthermore, we are also proactively developing relationships with high-quality emerging growth companies, a key driving force of the PRC’s economic growth. As of June 30, 2015, our investment banking client base encompassed numerous companies in various industries including but not limited to financial services, energy, telecommunications, transportation, metallurgy, technology, healthcare and consumer products.

We believe our diversified institutional investor client base distinguishes us from our peers. As of June 30, 2015, we had over 3,000 institutional clients consisting of QFIIs, RQFIIs, QDIIs, commercial banks, insurance companies, mutual funds, pension funds, sovereign funds, hedge funds, private equity funds, listed companies and national asset management companies, among which approximately 60% were overseas-based. We were one of the first PRC securities firms to serve QFII and RQFII clients. We believe that we have attained a leading position among all PRC securities firms in serving QFII and RQFII clients.

As a pioneer among PRC securities firms in serving high-net-worth individuals, we have built an excellent high-net-worth client base. Our wealth management clients reached 24,200 as of June 30, 2015 with average client account balance of RMB14.9 million. The total asset value of our wealth management client accounts grew from RMB108.4 billion as of December 31, 2012 to RMB216.0 billion as of December 31, 2014, representing a CAGR of 41.2%, and further to RMB360.2 billion as of June 30, 2015.

Premier investment banking franchise

We have built the leading investment banking franchise in the PRC. From our inception in 1995 to June 2015, in terms of aggregate value of completed deals, we ranked No. 1 among all investment banks acting as bookrunners for the onshore and offshore equity offerings of PRC-based companies, No. 2 among all investment banks acting as lead underwriters for debt and structured financing transactions, and No. 1 among all investment banks advising PRC-related M&A transactions. Our team’s execution and innovation capabilities and international experience distinguish us from our peers. We have led many complex, large and precedent-setting transactions and we have received numerous major awards in recognition of the leadership and achievements of our investment banking business.

Our success in and our well-established platform for investment banking help us attract and retain talent which is the key to our success. As of June 30, 2015, we had a team of over 350 investment banking professionals, among whom over half had experience in both domestic and overseas transactions. Their expertise and experience allow them to work seamlessly on domestic, overseas and cross-border assignments. Our investment banking staff with titles of executive director or above have an average tenure with us of over eight years.

The success of our investment banking business also greatly contributes to our premier brand name and helps us retain existing clients and attract new clients. As of June 30, 2015, among the 92 PRC companies that ranked among the 2014 Fortune Global 500, 72 were our investment banking clients. Our investment banking business is core to establishing and retaining senior relationships with our clients, which in turn helps us generate cross-selling opportunities across our other business lines. For instance, as of June 30, 2015, more than half of our enterprise annuity plan clients were our investment banking clients.

Leading and influential research

Research is an important foundation of our business and we believe that we have one of the best research practices in the securities industry in the PRC. Our research adheres to the principles of objectivity, independence, prudence and professionalism. Our highly capable and experienced research team, with strong international experience, is one of our most valuable assets. As of June 30, 2015, we had more than 100 research professionals. Leveraging our strong international platform, our research team also excels at overseas and cross-border research.

We provide a broad range of in-depth and timely research to institutional and individual investors, enterprises and government entities. We research and analyze the fundamental aspects of macroeconomics, equity products, fixed income, commodities and currency products and other quantitative products on a global basis. Our deep understanding, thorough analysis and unique insights into PRC-based companies and industries have earned us a reputation as the “China Expert.” As of June 30, 2015, companies covered by our research team accounted for 51% of the total market value of the PRC stock market and 79% of the total market value of the PRC-based enterprises listed on the Hong Kong Stock Exchange. As of June 30, 2015, our analysts covered approximately 800 listed companies, over two-thirds of which are covered by our research reports in both Chinese and English.

Our research has also enhanced our brand and reputation. We were recognized as the “No. 1 Overall Country Research for China” by global institutional investors for nine consecutive years from 2006 to 2014, according to Asiamoney. We were named “No. 1 All-China Research Team” by the Institutional Investor for three consecutive years from 2012 to 2014.

Outstanding innovation capabilities

Our Company itself was established as an innovative step to reform the PRC’s capital markets. Our corporate culture of openness and collaboration create an environment for creative solutions. Our high-caliber professionals and their vision and extensive experience have led to our firm grasp of the market’s pulses and provide innovative products and services to meet our clients’ needs.

Our innovation capabilities have contributed to the success of our premier investment banking franchise. At various stages in the PRC’s economic development, we have provided creative solutions to both regulators and our clients. We have spearheaded the development of the PRC’s capital markets by completing many precedent-setting transactions. For instance, we led the execution of the first A+H share concurrent IPO (Industrial and Commercial Bank of China Limited, 2006), the first enterprise asset-backed securities offering (China United Network Communications Group Co., Ltd., 2005) and the first merger by share swap between two A+H listed companies (CSR Corporation Limited and China CNR Corporation Limited, 2015).

Our innovation capabilities also catalyze the growth of our other business lines. When PRC companies started to list overseas and attract international investors, we were the first among PRC securities firms, to provide sales and trading services to overseas institutional clients. As the PRC’s economy grew, and the demand for high-end asset allocation products and services increased, we capitalized on this opportunity and were the pioneer in establishing a wealth management business to provide high-net-worth individuals with innovative products and services.

We expect that PRC regulatory authorities will further encourage innovation and creativity in the PRC capital markets. We believe that we will continue to capture future market opportunities by leveraging our overall strength and solid experience in providing creative solutions to clients.

Comprehensive and effective risk management

We believe that we hold a leading position among our peers in terms of risk management and internal controls. We constantly focus on the risks that we and our clients face and have implemented effective risk management and internal controls. We have set up a sound and comprehensive risk management system at various corporate levels, including the Board of Directors, the senior executives, the risk management departments, the business departments and branches, in order to monitor, evaluate and manage our risk exposures, including market risk, credit risk, liquidity risk and operational risk. Furthermore, we have adopted the international best practices for managing legal and compliance risks and reputational risks across multiple regulatory regimes.

Top-tier management team and professionals

Human capital is critical to our success. We attract, cultivate and retain talent to build and strengthen our core competitive strengths. Our distinct culture infuses our people with the spirit of partnership and inspires professionalism, innovation and loyalty.

Our senior management team has extensive experience in domestic and overseas financial markets and a majority of them have working experience in well-known overseas financial institutions. Their vision and entrepreneurial spirit have led us to adjust our business strategies in a timely manner to capture market opportunities. Our senior executives and mid-level management team, including heads of various departments and branches, have on average more than 15 years of working experience in the investment banking and finance-related industries. They form the backbone of our talent team and are the foundation upon which we build our success.

Our premier brand and strong platform enable us to attract the best graduates from top domestic and overseas universities as well as the best talent in the industry. As of June 30, 2015, we have over 2,000 employees, of whom 57% hold masters or higher degrees, and 40% have overseas study or work experience. We provide them with focused and continuous training and expose them to high-profile transactions. Their full immersion in our culture equips them with our unique style and with a diligent and responsible work ethic. In addition, we believe the team cohesiveness and attachment to our strong corporate culture results in superior capabilities.

Influential and supportive shareholders

We have high-profile shareholders, including Huijin, GIC, TPG, KKR Institutions Investments and other well-known domestic and international institutions. We believe we can benefit from their diverse background, broad business scope and strategic vision to strengthen our corporate governance, broaden our access to resources and increase our international influence.