Dear shareholders

The task is heavy and the road is long, only with courage and perseverance. The past year has been extremely extraordinary and important. Under the impact of multiple factors such as geopolitical conflicts, inflationary pressures, and supply chain challenges, the global economy is facing the threat of stagflation, and the volatility of international financial markets is intensifying. Faced with the complex and ever-changing external environment, we firmly believe in the endogenous resilience and enormous potential of the Chinese economy more than ever. High quality development has become the primary task of building a socialist modernized country in all respects. Standing at a critical moment when the domestic economy is stabilizing and rebounding, we have also welcomed the implementation of the comprehensive registration system reform for stock issuance. This milestone transformation has a profound impact and also makes us more aware of the responsibility and mission on our shoulders.

As participants and builders of the capital market, we always adhere to professional spirit and bottom line thinking, committed to creating long-term value for stakeholders such as shareholders, customers, and society. This belief enables us to penetrate the fog of numerous challenges, see the true opportunities, and be more determined to empower wealth management and institutional services with technology, continuously releasing development momentum. In 2022, the company's comprehensive strength remains at the forefront of the industry. As of the end of 2022, the total assets of the Group were RMB 846.567 billion, and the net assets attributable to shareholders of the listed company were RMB 165.087 billion; In 2022, the Group achieved operating revenue of RMB 32.032 billion and net profit attributable to shareholders of the listed company of RMB 11.053 billion.

Customer needs always come from the heart

No matter how the market fluctuates, we always take customer needs as the guide, build a full business chain service system through platform based development and integrated operation, promote "one customer" internally and "one Huatai" externally, and create an influential and recognized market brand.

In the field of wealth management, in the face of market fluctuations, we firmly convey long-term and scientific investment concepts to over 20 million clients, accompanying them to understand the market, seize opportunities, and alleviate anxiety. We create a professional and open content ecosystem from a customer perspective, connecting online and offline services, and making the creation of differentiated value more grounded and effective. Optimize customer demand stratification and corresponding investment advisory and service stratification, iterate and upgrade professional trading and wealth management services, and accurately output through the "Shengle Fortune Tong" platform and investment advisory cloud platform, so that customers can receive thoughtful and meticulous services when they need them the most. Integrating investment advisory services and prioritizing investment advisory services, by creating a buyer based investment advisory model centered on customer profit experience, customer behavior has undergone positive changes, resulting in longer fund holding periods and higher reinvestment rates. Only with the continuous accumulation of trust and sense of gain, can the transition from "traffic" to "retention" become natural. In 2022, while the company's monthly activity and stock fund trading volume continue to rank first in the securities industry, the size of non monetary market public funds has ranked among the top ten in the entire market for the first time.

In the field of institutional services, we adhere to polishing our customer service model and service system, creating a platformized and integrated core competitiveness of institutional business. We continuously optimize the global customer operation system, gradually implementing the main broker service model driven by headquarters, integrated cross-border, and linked total and sub branches, better achieving unified hierarchical classification of customers, integrated account operation, and reasonable release of service resources. We adhere to business orientation and technology empowerment, further improving the basic functions and efficiency of various trading platforms. The digital exhibition model runs through the entire process of customer demand coverage, asset pricing, and market making transactions, continuously consolidating the leading advantages in equity derivatives and on market market making business. The research platform continuously integrates basic data, iterates valuation models, depicts industry graphs, releases business value, and accelerates the transformation of research perspectives into investment banking and trading products; The institutional business platform "Xingzhi" covers research, investment banking, and trading services, with a focus on building enterprise client versions and private client versions, enabling efficient response to the needs of different types of institutional clients and different stages in our service system.

Creating long-term value in serving the real economy

As a bridge connecting the real economy and the capital market, we are based on professional capabilities and investment banking origins, providing professional financial services around the entire life cycle of customers, growing together with industry leaders, promoting the realization of entrepreneurial value, actively leveraging the role of finance in promoting the real economy, and assisting in the high-level circulation of technology, capital, and the real economy. In 2022, the number and scale of equity lead underwriters of the company ranked fourth in the industry, while the scale of bond lead underwriters ranked third in the industry. The number of approved and registered mergers and acquisitions projects and transaction scale ranked second in the industry.

The accelerated evolution of a new round of technological revolution and industrial transformation is reshaping the global innovation landscape and economic structure. Accelerating the development of strategic emerging industries, building a modern industrial system, and achieving high-level technological self-reliance and self-reliance are the key to seizing the commanding heights of future industrial development. For many years, we have been continuously cultivating strategic emerging industries such as TMT, energy and environmental protection, and big health. With our professional financial service capabilities and in-depth industry logic, we integrate research, investment, investment banking, trading, and other full business chain service resources to provide enterprises with a full range of services from early private equity financing, listing, refinancing, mergers and acquisitions, to asset securitization, helping them find suitable investment, financing, and business expansion opportunities in the global capital market, Effectively solving practical problems in enterprises and contributing to promoting their growth, industrial upgrading, and the development of the real economy. Since 2012, we have served over 210 technology innovation enterprises with a total market value of RMB 8.52 trillion.

The semiconductor industry is the core of the new generation of information technology, and after years of technological accumulation, China's semiconductor industry is expected to embark on a new cycle of localization. We have conducted in-depth layout in multiple sub tracks such as semiconductor design, semiconductor materials and equipment, and optical chips, providing innovative capital support for enterprises to expand R&D investment efficiently, actively serving the resource docking and business expansion of upstream and downstream enterprises in the industry, assisting leading enterprises in global resource integration and configuration, and deeply participating in the innovation and development process of the semiconductor industry. With the deepening of the "dual carbon" strategy, the third energy revolution, with renewable energy as the main body, has brought new development opportunities to many industries. We have achieved comprehensive coverage in major sub sectors of the new energy industry such as photovoltaic, lithium battery, and wind power, assisting new energy enterprises in continuous financing both domestically and internationally, promoting industrial upgrading, technological breakthroughs, and international development, and contributing to the implementation of the "dual carbon" strategy. We continue to use financial strength to support the construction of a "Healthy China" in the new era, and have formed a complete business layout in fields such as biopharmaceuticals, medical devices, and medical services. For many years, we have assisted top companies in sorting out their development strategies, actively connecting domestic and foreign industrial resources and investors, continuously assisting in the promotion of R&D pipelines for innovative drugs and medical device enterprises, and promoting the transformation and upgrading of large pharmaceutical enterprises towards specialization and internationalization.

Adhering to our commitment to long-term value, our business has steadily advanced amidst numerous challenges, and we are also taking our social responsibility to the next level by practicing the concept of sustainable development. By initiating the establishment of the Huatai Public Welfare Foundation, we have established long-term coopera