Solid market position in China's broker sector, with diversified business lines and geographic coverage. Improved group-wide risk control framework to monitor risk exposures of subsidiaries. Close link with the Shanghai municipal government. Rapid capital consumption due to fast-growing balance sheet. Large portion of revenue from volatile and market-sensitive investment gains. Significant increase in provisions from finance leases and stock-pledged loan book. Deficiencies in risk control on some businesses that regulatory actions in 2020 and 2021 exposed. The stable outlook on Haitong Securities Co. Ltd. (Haitong) reflects our expectation that the company will maintain its risk appetite and loss experience over the next 24 months. We also expect Haitong to sustain its strong capitalization and business position, and maintain close links
