Hong Kong Exchanges and Clearing : ANNOUNCEMENT ON CHANGES IN ACCOUNTING POLICIES

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

恒 投 證 券

HENGTOU SECURITIES

(A joint stock company incorporated in the People's Republic of China with limited liability under the Chinese corporate name " 恒 泰 證 券 股 份 有 限 公 司" and carrying on business in Hong Kong as " 恒 投 證 券" (in Chinese) and "HENGTOU SECURITIES" (in English))

(the "Company")

(Stock Code: 01476)

ANNOUNCEMENT ON CHANGES IN ACCOUNTING POLICIES

The board of directors (the "Board") of the Company considered and approved the resolution in relation to the changes in accounting policies on leases at its meeting held on 12 August 2019. The amendments to accounting policies on leases were based on the requirements of the relevant documents issued by the Ministry of Finance of the People's Republic of China (the "MOF").

DESCRIPTION OF THE CHANGES IN ACCOUNTING POLICIES

In January 2016, the International Accounting Standards Board issued the International Financial Reporting Standards No. 16 - Leases which has been implemented from 1 January 2019. In December 2018, the MOF revised the Accounting Standards for Business Enterprises No. 21 - Leases (Cai Kuai [2018] No. 35) (the abovementioned two standards are collectively referred to as the "New Lease Standards"), which requires companies that are listed both domestically and overseas, and companies that are listed overseas and prepare their financial statements in accordance with the International Financial Reporting Standards or the Accounting Standards for Business Enterprises to adopt this standard with effect from 1 January 2019, and other companies that adopt the Accounting Standards for Business Enterprises to adopt this standard with effect from 1 January 2021.

According to the above provisions, the Company should implement the New Lease Standards from 1 January 2019.

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DETAILS OF THE CHANGES IN ACCOUNTING POLICIES AND THEIR IMPACTS ON THE COMPANY

The changes mainly include: improving the relevant principles of identification, separation and merger of leases; changing the accounting treatment of the lessee from a dual model to a single model; adjusting the accounting treatment of the sale and leaseback transaction in line with the income standard; improving lease related presentation and disclosure requirements. The core changes lie in that, for lease contracts, the right-of-use asset and lease liability shall be recognized for all leases other than short-term leases and low-value asset leases after taking into account the discount of future lease payments and other factors. For subsequent measurement, the right-of-use assets shall be depreciated and depreciation expenses shall be recognized. Meanwhile, interest expenses shall be recognized for the lease liability for each period during the lease term at the fixed periodic interest rate; for short-term leases and low-value asset leases, it is optional to not recognize the right-of-use asset and lease liability.

The Company has implemented the New Lease Standards from 1 January 2019 pursuant to the provisions, with no adjustment to the information of comparative periods. The implementation of the New Lease Standards will increase the total assets and total liabilities in the Company's financial statements, but will have no material impact on the owner's equity of the Company.

The Board, the supervisory committee and the independent non-executive directors of the Company agree with the changes in accounting policies of the Company. The changes in accounting policies are reasonable changes based on the stipulations of relevant documents of the MOF. The changes in accounting policies conform to the relevant requirements of the regulatory authorities, and could reflect the Company's financial conditions and operating results in a more objective and fairer manner. The procedures for the consideration of the changes in accounting policies are in compliance with the requirements of relevant laws and regulations and the articles of association of the Company and are in line with the interests of the Company and its shareholders as a whole.

By order of the Board

Pang Jiemin

Chairman

Beijing, the PRC

12 August 2019

As at the date of this announcement, the Board comprises Mr. Pang Jiemin and Mr. Wu Yigang as executive Directors; Mr. Zhang Tao, Mr. Sun Chao, Ms. Dong Hong and Ms. Gao Liang as non-executive Directors; and Ms. Zhou Jianjun, Dr. Lam Sek Kong and Mr. Lv Wendong as independent non-executive Directors.

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