Haitong Securities Co. Ltd. And Haitong International Securities Group Ltd.

The stable outlook on Haitong reflects our expectation that the company will continue to improve its risk management and internal control practices over the next 24 months. We believe the firm will sustain its strong capitalization and business position, and maintain close links with the Shanghai government over the period. We could lower the ratings on Haitong if our assessment of the company's stand-alone credit profile (SACP) weakens by two notches, which could occur if: The company's risk-adjusted capital (RAC) ratio falls below 10% over the next two years; or We assess that its de-risking measures have shown no progress, or reversed. This could be indicated by higher losses than peers', increasing risk appetite, or material control deficiencies. We may

...Haitong Securities Co. Ltd. will continue to improve its risk management and internal control practices over the next 24 months, in our view. Haitong`s adjustment to lower-risk bonds in its proprietary investments should buffer its overall credit profile. Haitong has taken corrective measures after disciplinary actions by regulators in 2021. But the effectiveness of those measures remains to be seen. We believe Haitong has taken corrective measures to adjust exposures to lower-risk securities at both the group and subsidiary level. This should support its capitalization buffer and benefit future loss experience. Haitong will maintain a strong market position with diversified business lines and geographic coverage. The company is a top-ranking securities firm with a strong network and customer base in China. Haitong has a financial leasing subsidiary in China and strong branding in Hong Kong that further complements its product offering for capital market services across the regions where...

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