Q: How did the results compare vs. expectations?

A: H116 net profit was Rmb860m (-69.7% YoY), equivalent to 52% of our full-yearestimate and largely in line with what we expected.

Q: What were the most noteworthy areas in the results?

A: Investment banking (IB) posted operating profit of Rmb803m in H116, up 54% YoY.IB accounted for 47% of overall revenue and 82% of profit, making it the company'sbiggest profit source. Given the recent management changes, we are cautious on its IBsegment. Brokerage revenue fell 63% YoY in H1 (peers: -65%), while brokeragemarket share dropped 3.97% YoY. Asset management revenue fell 89% YoY (peers:+25%). Investment income fell 87% YoY (peers: -73%). Squeezed by contractingmargin debt and rising debt costs, net interest income was negative, at -Rmb22.13m.

Q: Has the company's outlook/guidance changed?

A: With A-share market activity unlikely to recover quickly, we continue to think a rapid rebound in the company's earnings would be challenging.

Q: How would we expect investors to react?

A: We think investors could react negatively to the weaker-than-peer performance across multiple business lines and management reshuffling.