Financial Performance - For the six months ended June 30, 2023, the company recorded revenue of RMB 7,698.5 million, a 1.0% increase compared to RMB 7,619.9 million in the same period last year[2]. - Gross profit was RMB 1,573.6 million, down 23.3% from RMB 2,052.6 million, with a gross margin of 20.4%, a decrease of 6.5 percentage points year-on-year[2][3]. - Net profit attributable to shareholders was RMB 839.0 million, a decline of 20.7% from RMB 1,057.9 million, with a net profit margin of 12.4%, down 2.7 percentage points year-on-year[2][3]. - Operating profit decreased to RMB 1,205,455 thousand, down 16.1% from RMB 1,437,054 thousand in the previous year[13]. - Net profit for the period was RMB 951,506 thousand, representing a decrease of 17.2% compared to RMB 1,149,495 thousand in the same period last year[14]. - Basic earnings per share (basic and diluted) were RMB 0.59, down from RMB 0.75 in the previous year[13]. - The group’s gross profit was RMB 1,573.6 million, a 23.3% decrease from RMB 2,052.6 million in the same period of 2022, with a gross margin decline from 26.9% to 20.4%[65]. - The net profit for the period was RMB 951.5 million, a decrease of 17.2% compared to RMB 1,149.5 million in the same period of 2022, with a net profit margin of 12.4%, down 2.7 percentage points[72]. Revenue Breakdown - The company achieved a total revenue of RMB 7,108.4 million from property management, value-added services, and urban services, accounting for 92.3% of total revenue, with a year-on-year growth of 7.2%[52]. - The company achieved a 7.4% increase in property management service revenue to RMB 5,267.3 million and a 7.7% increase in owner value-added services revenue to RMB 1,167.2 million[3]. - Revenue from property management services was RMB 5,267.3 million, a 7.4% increase from RMB 4,904.1 million in the previous year[54]. - Revenue from urban services reached RMB 673.9 million, a 5.0% increase from RMB 641.7 million in the same period of 2022, accounting for approximately 8.7% of total revenue[61]. - Revenue from life and integrated services was approximately RMB 574.5 million, a 37.3% increase from RMB 418.4 million in the same period of 2022, representing about 49.2% of value-added services revenue[60]. - The revenue from external value-added services decreased by 40.4% to RMB 590.1 million compared to RMB 990.0 million in the previous year[53]. Dividends and Shareholder Information - The company proposed an interim dividend of RMB 0.025 per share, with a payout ratio of approximately 4.2%[3]. - The company declared an interim dividend of RMB 0.025 per share, totaling RMB 35.5 million, which is subject to shareholder approval[50]. - The interim dividend proposal requires approval at an extraordinary general meeting, with a circular to be sent to shareholders by November 30, 2023[97]. - The company will distribute an interim dividend to shareholders listed as of December 19, 2023, with the record date for entitlement set from December 14 to December 19, 2023[96]. Operational Highlights - The total contracted area managed by the company reached 762.1 million square meters, with a third-party project area of 614.3 million square meters, representing a 5.3% increase from the end of 2022[6]. - The company has successfully secured multiple projects in key cities, enhancing its market position and service capabilities in the public building service sector[6]. - The company is strategically shifting from external acquisitions to growth driven by brand, quality, and service characteristics in the property management sector[6]. - The group won a city management service project in Longgang District, Shenzhen, with an annualized contract value exceeding RMB 100 million, and secured several large-scale urban service projects[61]. - The company operates in 4,625 projects across 31 provinces, municipalities, and autonomous regions, covering 222 cities[57]. Cost and Expense Management - The group's total sales cost was RMB 6,125.0 million, a 10.0% increase from RMB 5,567.2 million in the same period of 2022[64]. - The total employee cost for the period was RMB 3,060.0 million, with 95,733 employees as of June 30, 2023[91]. - The company faces operational risks related to cost control, particularly labor costs, which may impact profit margins[89]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 23,669,957 thousand, an increase from RMB 22,701,714 thousand at the end of 2022[16]. - Total liabilities increased to RMB 8,818,452 thousand from RMB 8,577,120 thousand at the end of 2022[18]. - Trade receivables increased by 9.9% to RMB 7,617.5 million from RMB 6,929.3 million as of December 31, 2022, reflecting a slowdown in overall collections due to market conditions[81]. Governance and Compliance - The audit committee has reviewed the financial statements for the six months ending June 30, 2023, ensuring compliance with accounting principles and internal controls[98]. - The company has confirmed that all directors and supervisors complied with the securities trading code during the six months ending June 30, 2023[99]. - The company has adopted the corporate governance code and confirmed full compliance with applicable provisions for the six months ending June 30, 2023[100]. - No purchase, sale, or redemption of the company's listed securities occurred during the six months ending June 30, 2023[101].

Financial Performance - The company's revenue for the year ended December 31, 2022, was RMB 15,379 million, an increase of 9.2% from RMB 14,080 million in 2021[16] - Gross profit for 2022 was RMB 3,384 million, with a gross margin of 22.0%, down from 27.5% in 2021[16] - Net profit for the year was RMB 1,935 million, resulting in a net profit margin of 12.6%, compared to 18.2% in the previous year[16] - Profit attributable to shareholders was RMB 1,840 million, a decrease from RMB 2,308 million in 2021[16] - Basic earnings per share for 2022 were RMB 1.30, down from RMB 1.67 in 2021[16] - Total assets increased to RMB 22,702 million in 2022 from RMB 20,181 million in 2021, representing an increase of 12.5%[17] - Shareholder equity rose to RMB 14,125 million in 2022, up from RMB 12,911 million in 2021, marking a growth of 9.4%[17] - The return on equity decreased to 15.6% in 2022 from 24.9% in 2021, indicating a decline of 9.3 percentage points[17] - The total debt to total assets ratio increased to 37.8% in 2022 from 36.0% in 2021, reflecting a rise of 1.8 percentage points[17] - The net profit for the year was RMB 1,934.9 million, down 24.6% year-on-year, resulting in a net profit margin of 12.6%[45] - The gross profit for the year was RMB 3,384.0 million, a decrease of 12.5% from RMB 3,868.7 million in 2021, with a gross margin decline from 27.5% to 22.0%[87] Business Operations - The total contracted area managed by the company increased to approximately 731.5 million square meters as of December 31, 2022[4] - The total area under management reached approximately 545.8 million square meters[4] - The company operates across four major business lines: property management services, value-added services for owners, urban services, and external value-added services[4] - The company is positioned as a top-tier property management service provider in China, ranking in the top 3 of the China Property Service Top 100[4] - The group ranked in the top 3 of the "2022 China Property Service Top 100 Enterprises," maintaining a strong industry position[45] - The total managed area and contracted area reached 545.8 million square meters and 731.5 million square meters, respectively, with new managed and contracted areas of 56.9 million square meters and 68.4 million square meters[47] - The third-party market expansion added a contracted area of 6,055 million square meters, placing the group among the top three in the third-party rankings[48] - The group achieved a year-on-year revenue growth of 21.7% in property management services, value-added services, and urban services[45] Strategic Initiatives - The company aims to become a leading quality service operator in China, focusing on comprehensive property management services[4] - Strategic partnerships were established with Otis Elevator and CRRC Urban Transportation to enhance smart living experiences and property services[33] - The company launched a digital management system to support over 4,000 projects nationwide, facilitating a comprehensive upgrade in property management services[36] - The company established an operations management center to enhance efficiency and management across all business units, focusing on project quality, cash collection, standards, and risk control[51] - The company implemented a three-tier cash collection mechanism to improve cash flow, addressing challenges in project cash collection due to macroeconomic conditions and the pandemic[51] - The company upgraded its integrated information system architecture to enhance operational efficiency and management capabilities, facilitating cost reduction and efficiency improvements[53] - The company formed a joint venture with a leading technology firm to develop smart access and parking systems, improving asset utilization and customer satisfaction[53] - The company plans to enhance service quality and customer satisfaction through a three-tier quality control mechanism and digital tools[57] - The company will continue to explore opportunities in the urban service market, leveraging its experience in public services to identify suitable project opportunities in high-tier cities[59] - The company is committed to diversifying its service offerings, focusing on community, enterprise, and public building services, while optimizing its supply chain[59] Employee and Governance - As of December 31, 2022, the group had 95,102 employees, an increase from 87,603 employees on December 31, 2021, representing a growth of 8.6%[124] - Total employee costs amounted to RMB 5,917.5 million, up 12.3% from RMB 5,267.4 million in 2021, primarily due to increased demand for high-quality talent[124] - The company has a strong management team with over 30 years of experience in property management, led by Mr. Feng Xin, who has been with the company since 2002[184] - The company is committed to maintaining high levels of corporate governance, adhering to the principles of integrity, transparency, accountability, and independence[193] - The board of directors prioritizes shareholder interests while considering the needs of business partners and other stakeholders[197] - The company has fully complied with the Corporate Governance Code as per the Hong Kong Stock Exchange's listing rules for the year ending December 31, 2022[195] Environmental, Social, and Governance (ESG) - The group is committed to integrating environmental, social, and governance (ESG) factors into its operations, enhancing ESG management levels, and creating long-term value for stakeholders[140] - In 2022, the group advanced its standardized environmental management system and achieved ISO14001:2015 and ISO50001 certifications for multiple projects[141] - The group actively promotes green operations and has implemented measures to achieve energy-saving and emission-reduction goals[141] - The group is focused on addressing climate change risks and has disclosed its strategies in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)[141] - The company established a comprehensive risk management framework that integrates ESG risks into its overall risk management and internal control systems[144] - The company is committed to long-term improvements in ESG performance, adhering to Hong Kong Stock Exchange disclosure requirements[152] Future Outlook - The company provided guidance for the next fiscal year, projecting a revenue growth of 10% to 12%[163] - New product launches are expected to contribute an additional 200 million in revenue in the upcoming year[163] - The company is focusing on market expansion, targeting new regions that could potentially increase market share by 5%[163] - Several strategic acquisitions were completed, enhancing the company's service offerings and expected to generate an additional 150 million in revenue[163] - The company is investing in new technology development, allocating 50 million for R&D in the next fiscal year[163] - The management team emphasized the importance of sustainability initiatives, which are projected to reduce operational costs by 8%[163] - The company plans to enhance its digital marketing strategy, aiming for a 30% increase in online engagement[163] - The board of directors has approved a new strategic plan to improve operational efficiency, targeting a 12% reduction in overhead costs[163]

Financial Performance - Total revenue for the six months ended June 30, 2022, was RMB 7,619.9 million, an increase of 21.9% from RMB 6,247.2 million in the same period of 2021[14]. - Gross profit for the same period was RMB 2,052.6 million, with a gross margin of 26.9%, down from 30.0% in 2021[14]. - Net profit for the six months ended June 30, 2022, was RMB 1,149.5 million, representing a decrease of 10.3% compared to RMB 1,281.0 million in 2021, with a net profit margin of 15.1%[14]. - The group's revenue for the first half of 2022 was RMB 7,619.9 million, representing a 22.0% increase year-on-year[38]. - Gross profit amounted to RMB 2,052.6 million, a 9.5% increase, with a gross margin of 26.9%[38]. - Net profit decreased by 10.3% to RMB 1,149.5 million, resulting in a net profit margin of 15.1%[38]. - The basic earnings per share for the group were RMB 0.75, reflecting a decrease of 7.4% year-on-year[38]. - The net profit for the six months ended June 30, 2022, was RMB 1,057,908 thousand, compared to RMB 1,142,312 thousand for the same period in 2021, showing a decrease of about 7.4%[150]. - The total comprehensive income for the six months ended June 30, 2022, was RMB 1,056,505 thousand, down from RMB 1,144,436 thousand in the same period of 2021, representing a decline of approximately 7.7%[150]. Assets and Liabilities - Total assets as of June 30, 2022, amounted to RMB 21,681.7 million, an increase from RMB 20,181.4 million at the end of 2021[15]. - Cash and cash equivalents were RMB 3,996.9 million, down from RMB 4,390.5 million at the end of 2021[15]. - Total liabilities increased to RMB 8,264,064 thousand as of June 30, 2022, compared to RMB 7,270,449 thousand as of December 31, 2021, representing an increase of approximately 13.7%[146]. - Current liabilities rose to RMB 7,758,979 thousand as of June 30, 2022, up from RMB 6,756,820 thousand as of December 31, 2021, indicating an increase of about 14.8%[146]. - As of June 30, 2022, current assets reached RMB 14,320.5 million, a 6.8% increase from RMB 13,411.0 million as of December 31, 2021[85]. - Trade and other receivables and prepayments reached RMB 8,568.7 million as of June 30, 2022, an increase of 57.0% compared to RMB 5,456.3 million on December 31, 2021[92]. - Trade receivables amounted to RMB 6,000.1 million, up 52.0% from RMB 3,947.9 million as of December 31, 2021, primarily due to the cyclical nature of the real estate industry and the impact of the pandemic[92]. - Trade and other payables totaled RMB 5,755.9 million as of June 30, 2022, an increase of 18.8% from RMB 4,843.2 million on December 31, 2021, due to rising procurement, outsourcing, and energy costs[93]. Shareholder and Governance - The board consists of eight members, including three executive directors, two non-executive directors, and three independent non-executive directors, ensuring high standards of corporate governance[113]. - The audit committee reviewed the financial statements for the six months ending June 30, 2022, discussing accounting principles and internal controls with management[114]. - The company confirmed full compliance with the corporate governance code applicable for the six months ending June 30, 2022[120]. - The company has adopted a securities trading code for directors and supervisors, ensuring compliance with the standards set by the Hong Kong Stock Exchange[117]. - The company has established written guidelines for employees regarding securities trading, ensuring adherence to the standards set forth[119]. - The company has a significant concentration of ownership, with major shareholders holding over 47% of the total shares[128]. Business Strategy and Market Position - The company aims to become a leading quality service operator in China, focusing on high-quality, full-scenario services[5]. - The company is actively exploring value-added service ecosystems and expanding its business lines across property management, owner value-added services, urban services, and external value-added services[5]. - The group ranked in the top 3 of the "2022 China Property Service Top 100 Enterprises," indicating strong market recognition[37]. - The company is focusing on enhancing its value-added services, particularly in community and non-residential sectors, to improve management scale and service quality[49]. - The company plans to deepen its market expansion strategy by targeting key cities and increasing management density in strategic urban areas[47]. - The company is committed to enhancing its service standards and digitalization levels to support sustainable growth in its value-added services[49]. Revenue Breakdown - Property management services generated RMB 4,904.1 million, accounting for 64.4% of total revenue, with a year-on-year growth of 23.3%[58]. - Revenue from value-added services for property owners reached RMB 1,084.1 million, a 34.3% increase from RMB 807.5 million in the same period of 2021, accounting for approximately 14.2% of total revenue[67]. - Revenue from lifestyle and integrated services was approximately RMB 418.4 million, up 41.5% from RMB 295.8 million in 2021, representing about 38.6% of value-added services revenue[68]. - Urban services revenue reached RMB 641.7 million, a significant increase of 302.4% from RMB 159.5 million in 2021, making up about 8.4% of total revenue[70]. - Revenue from external value-added services was RMB 990.0 million, a decrease of 24.0% from RMB 1,303.3 million in 2021, representing about 13.0% of total revenue[72]. Cost and Expenses - The company's total sales cost was RMB 5,567.2 million, a 27.3% increase from RMB 4,373.3 million in 2021, primarily due to business expansion and increased operational costs[72]. - Employee benefits expenses rose to RMB 2,849,956 thousand, reflecting a 16% increase from RMB 2,451,826 thousand in the prior year[175]. - Sales and marketing expenses for the period were RMB 29.4 million, a decrease of 52.3% from RMB 61.7 million in the same period last year, representing 0.4% of revenue, down 0.6 percentage points year-on-year due to reduced marketing activities impacted by the pandemic[76]. - Administrative expenses increased by 3.6% to RMB 398.7 million compared to RMB 384.7 million in the same period last year, accounting for 5.2% of revenue, a decrease of 1.0 percentage points year-on-year, mainly due to regional integration efforts[77]. Cash Flow and Investments - The net cash used in operating activities was RMB (1,431,627) thousand, compared to RMB 962,112 thousand for the same period in 2021[155]. - The net cash generated from investing activities was RMB 1,162,026 thousand, a significant improvement from RMB (294,878) thousand in the prior year[155]. - The company reported a significant increase in cash inflows from third-party loan repayments, totaling RMB 3,156,000 thousand, compared to RMB 530,000 thousand in the previous year[155]. - The company incurred a cash outflow of RMB (2,860,800) thousand for loans to third parties, compared to RMB (540,000) thousand in the same period last year[155]. - The company made investments in property, plant, and equipment amounting to RMB (91,204) thousand, compared to RMB (20,736) thousand in the previous year[155].

Financial Performance - Total revenue for the six months ended June 30, 2021, reached RMB 6,247.2 million, a 56.3% increase from RMB 4,001.6 million in the same period of 2020[11]. - Gross profit for the same period was RMB 1,873.9 million, with a gross margin of 30.0%, compared to RMB 1,275.4 million and a gross margin of 31.9% in 2020[11]. - Net profit attributable to shareholders was RMB 1,142.3 million, up 50.6% from RMB 758.0 million in the prior year, with a net profit margin of 20.5%[11]. - The group's revenue for the first half of 2021 was RMB 6,247.2 million, representing a year-on-year growth of 56.1%[35]. - Gross profit increased to RMB 1,873.9 million, a 46.9% increase compared to the previous year, with a gross margin of 30.0%[35]. - Net profit reached RMB 1,281.0 million, up 46.7% year-on-year, resulting in a net profit margin of 20.5%[35]. - The company reported a profit of RMB 1,142,312 thousand for the six months ended June 30, 2021, compared to RMB 757,954 thousand for the same period in 2020, representing a year-over-year increase of 50.7%[157]. - Basic and diluted earnings per share were RMB 0.85, compared to RMB 0.57 for the same period last year, marking a 49.1% increase[147]. Assets and Liabilities - Total assets as of June 30, 2021, amounted to RMB 19,466.9 million, an increase from RMB 13,975.0 million at the end of 2020[12]. - Current assets reached RMB 13,480.3 million, a 48.1% increase from RMB 9,100.1 million at the end of 2020[88]. - Total liabilities rose to RMB 7,318,073 thousand, compared to RMB 5,317,553 thousand, reflecting an increase of 37.6%[154]. - The company’s reserves increased to RMB 6,033,540 thousand from RMB 3,402,511 thousand, marking an increase of 77.1%[157]. - The company’s goodwill increased to RMB 2,539,549 thousand as of June 30, 2021, compared to RMB 2,181,967 thousand at the end of 2020, representing a growth of 16.4%[152]. Cash Flow and Financing - Cash and cash equivalents stood at RMB 8,197.6 million, compared to RMB 5,057.0 million at the end of 2020, indicating strong liquidity[12]. - Operating cash flow for the six months ended June 30, 2021, was RMB 1,300,731, a decrease of 5.8% from RMB 1,380,379 in 2020[161]. - The company reported a significant cash inflow from financing activities of RMB 2,450,775, compared to a cash outflow of RMB 624,796 in the previous year[161]. - The company raised approximately HKD 3,259 million from the placement of 86,666,800 new H shares at a price of HKD 37.60 per share, with a net amount of approximately HKD 3,242 million after expenses[105]. Market Position and Growth - The company was ranked 4th in the 2021 Top 100 Property Service Companies in China, highlighting its market position[27]. - The company has been recognized for its growth potential, ranking 2nd in the 2021 Top 100 Property Service Companies for growth[27]. - The group achieved a record high in third-party expansion, adding over 35.1 million square meters of new contracted area during the period[36]. - The company aims to establish a "dual hundred billion" platform enterprise, focusing on service quality, management scale, operational efficiency, and capital recovery[51]. Strategic Initiatives - The company aims to upgrade its services to become a "smart city space operator," focusing on high-end property and urban services[3]. - The group is focused on building a comprehensive smart city service platform, covering 19 provinces and municipalities in China[38]. - The company has established strategic partnerships with over 20 leading home decoration brands to enhance conversion rates through initiatives like the "Move-in Ready Home Decoration Festival"[41]. - The company is leveraging strategic partnerships with technology firms to build smart city service applications and improve operational efficiency[42]. Employee and Governance - The company has increased its workforce to 70,711 employees, a 26.5% increase from 55,888 employees as of December 31, 2020, with total employee costs rising to RMB 2,332.2 million, a 53.8% increase year-on-year[119]. - The company aims to maintain high standards of corporate governance, with a board consisting of eight members, including three executive directors and three independent non-executive directors[123]. - The company has confirmed full compliance with the corporate governance code applicable during the six months ending June 30, 2021[128]. Revenue Sources - Property management service revenue was RMB 3,976.9 million, representing a 51.8% increase from RMB 2,619.6 million in 2020[59]. - Revenue from non-residential property projects increased by 68.2%, reaching RMB 2,338.3 million compared to RMB 1,390.5 million in the previous year[59]. - Revenue from value-added services for homeowners reached RMB 807.5 million, a 91.0% increase from RMB 422.7 million in the same period of 2020, accounting for approximately 12.9% of total revenue[73]. - The group’s revenue from external value-added services was RMB 1,303.3 million, up 35.9% from RMB 959.3 million in the same period of 2020, representing about 20.9% of total revenue[72].

Company Overview [Company Overview](index=3&type=section&id=Company%20Overview) Agile Living Services Group is a top-tier property management provider in China, managing over 350 million square meters across five service segments - The company's business spans five segments: property services, asset management, public services, city services, and community commerce[9](index=9&type=chunk) Management Scale as of June 30, 2020 | Metric | Area (million sq. m.) | | :--- | :--- | | GFA Under Management | 353.4 | | Contracted GFA | 491.3 | - The company successfully spun off from Agile Group and listed on the Hong Kong H-share market on February 9, 2018[9](index=9&type=chunk) Company Information [Company Information](index=4&type=section&id=Company%20Information) This section details the company's organizational structure, key personnel, and contact information, including recent board and management changes - The Board of Directors is co-chaired by Mr. Chan Cheuk Hung and Mr. Wong Fung Choy, with Mr. Li Dalong appointed as President and CEO on July 21, 2020, after the reporting period[11](index=11&type=chunk) - The company's auditor is PricewaterhouseCoopers[11](index=11&type=chunk) - The company's H-shares are listed on the Main Board of the Hong Kong Stock Exchange under stock code 3319[13](index=13&type=chunk) Financial Highlights [Financial Highlights](index=6&type=section&id=Financial%20Highlights) The company achieved strong financial performance in H1 2020, with significant revenue and profit growth, reflecting rapid expansion and enhanced profitability Summary of Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2020 (RMB million) | 2019 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 4,001.6 | 2,241.2 | +78.5% | | Gross Profit | 1,275.4 | 829.5 | +53.8% | | Gross Margin | 31.9% | 37.0% | -5.1 ppt | | Net Profit | 873.2 | 568.4 | +53.6% | | Net Margin | 21.8% | 25.4% | -3.6 ppt | | Profit Attributable to Equity Holders (RMB million) | 758.0 | 541.3 | +40.0% | | Basic Earnings Per Share (RMB) | 0.57 | 0.41 | +39.0% | Summary of Consolidated Statement of Financial Position | Metric | June 30, 2020 (RMB million) | December 31, 2019 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 12,830.3 | 9,387.5 | +36.7% | | Cash and Cash Equivalents | 4,882.0 | 4,207.3 | +16.0% | | Equity Attributable to Equity Holders | 7,616.5 | 6,505.7 | +17.1% | Major Honors and Awards [Major Honors and Awards](index=8&type=section&id=Major%20Honors%20and%20Awards) This section highlights the company's significant industry awards in 2020, recognizing its leadership, growth, and brand value in property services - The company received several leading industry rankings, including: - **Top 4** among China's Top 100 Property Service Enterprises in 2020 - **Top 1** among China's Top 100 Property Service Enterprises for Growth in 2020 - **Top 2** among China's Listed Property Service Enterprises for Comprehensive Strength in 2020[17](index=17&type=chunk) Chairman's Report [Business Review](index=10&type=section&id=Business%20Review) Despite COVID-19, the Group achieved substantial growth in H1 2020, driven by third-party expansion and strategic acquisitions, significantly expanding its management scale and market presence Key Performance in H1 2020 | Metric | Amount (RMB million) | YoY Growth | | :--- | :--- | :--- | | Revenue | 4,001.6 | +78.5% | | Gross Profit | 1,275.4 | +53.8% | | Net Profit | 873.2 | +53.6% | | Profit Attributable to Equity Holders | 758.0 | +40.0% | Management Area Growth (As of June 30, 2020) | Metric | Total Area (million sq. m.) | Source Distribution | | :--- | :--- | :--- | | GFA Under Management | 353.4 | Agile/Greenland: 18.9%, Third-party: 81.1% | | Contracted GFA | 491.3 | Agile/Greenland: 25.7%, Third-party: 74.3% | - The acquisition of a **60% equity stake in China Minsheng Property** was one of the largest M&A deals in the industry, significantly enhancing the company's comprehensive business and national layout, achieving leapfrog growth in scale[22](index=22&type=chunk) - In owner value-added services, the company achieved rapid growth by building an online-offline community economic ecosystem, focusing on community new retail, and forming strategic partnerships with renowned brands like JD.com and Vinda[24](index=24&type=chunk) [Outlook and Strategy](index=14&type=section&id=Outlook%20and%20Strategy) The Group plans a strategic upgrade to become a "smart city integrated service operator," leveraging its brand matrix, M&A, and asset-light models for community services, supported by H-share full circulation approval - The company will undergo a comprehensive strategic upgrade, transforming into a smart city integrated service operator, and proposes to rename itself "Agile Living Smart City Services Co., Ltd."[26](index=26&type=chunk)[27](index=27&type=chunk) - For scale development, the company will leverage its eighteen-brand matrix for multi-channel expansion, focusing on third-party expansion in residential, public, and commercial properties, and actively participating in state-owned enterprise mixed-ownership reforms[27](index=27&type=chunk) - Community value-added services will develop under an asset-light, platform-based model, upgrading from a service provider to a creator of better living, building platforms for lifestyle services, city services, and innovation incubation[28](index=28&type=chunk) - On July 1, 2020, the company received approval from the China Securities Regulatory Commission to participate in H-share full circulation, allowing conversion of up to **900 million domestic shares and unlisted foreign shares** into H-shares for listing, to solidify its development foundation and improve incentive mechanisms[28](index=28&type=chunk) Management Discussion and Analysis [Overall Business Review](index=18&type=section&id=Overall%20Business%20Review) The company achieved rapid growth in H1 2020, with revenue up 78.5% and net profit up 53.6%, driven by the China Minsheng Property acquisition and strong organic growth H1 2020 Performance Overview | Metric | Amount (RMB million) | YoY Growth | | :--- | :--- | :--- | | Revenue | 4,001.6 | +78.5% | | Net Profit | 873.2 | +53.6% | | GFA Under Management (million sq. m.) | 353.4 | +100.1% (vs. end of 2019) | | Contracted GFA (million sq. m.) | 491.3 | +64.4% (vs. end of 2019) | - The acquired China Minsheng Property contributed **RMB 1.112 billion in revenue** and **RMB 120 million in net profit**; excluding this impact, the Group still recorded **28.9% organic revenue growth** and **32.5% organic net profit growth**[31](index=31&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) This section analyzes financial performance, highlighting revenue growth from key business lines, a decline in gross margin due to acquisitions, stable operating expenses, and a high core net profit margin [Revenue Analysis](index=19&type=section&id=Revenue%20Analysis) Total revenue grew 78.5% to RMB 4.002 billion, primarily driven by significant increases in property management and owner value-added services Revenue Breakdown by Business Segment (For the six months ended June 30) | Business Segment | 2020 Revenue (RMB thousand) | Revenue Share | 2019 Revenue (RMB thousand) | Revenue Share | Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 2,619,590 | 65.5% | 1,227,486 | 54.8% | 113.4% | | Extended Value-Added Services | 959,333 | 24.0% | 807,584 | 36.0% | 18.8% | | Owner Value-Added Services | 422,704 | 10.5% | 206,158 | 9.2% | 105.0% | | **Total** | **4,001,627** | **100.0%** | **2,241,228** | **100.0%** | **78.5%** | - The proportion of non-residential properties in GFA under management increased from **41.1% to 59.0%**, primarily due to the increase in public building projects from the acquisition of China Minsheng Property[38](index=38&type=chunk) - Revenue from lifestyle and integrated services within owner value-added services grew by **270.0% to RMB 270 million**, becoming the main engine for growth in this segment[45](index=45&type=chunk) [Cost, Gross Profit, and Expense Analysis](index=25&type=section&id=Cost%2C%20Gross%20Profit%2C%20and%20Expense%20Analysis) Cost of sales grew faster than revenue, reducing gross margin to 31.9% due to acquired businesses and intangible asset amortization, though sales and administrative expenses showed good control Gross Margin Changes by Business Segment (For the six months ended June 30) | Business Segment | 2020 Gross Margin | 2019 Gross Margin | Change (ppt) | | :--- | :--- | :--- | | Property Management Services | 21.9% | 26.6% | -4.7 | | Extended Value-Added Services | 48.9% | 49.2% | -0.3 | | Owner Value-Added Services | 55.0% | 51.4% | +3.6 | | **Total** | **31.9%** | **37.0%** | **-5.1** | - Excluding the impact of intangible asset amortization from equity-invested entities, the **core gross margin was 33.1%**[48](index=48&type=chunk) - Sales and marketing expenses accounted for **0.7% of revenue**, and administrative expenses accounted for **5.5% of revenue**, both decreasing by **0.1 percentage points** compared to the same period last year[49](index=49&type=chunk)[50](index=50&type=chunk) [Profit Analysis](index=27&type=section&id=Profit%20Analysis) Net profit grew 53.6% to RMB 873 million, driven by acquisitions and community services, with core net profit margin remaining stable despite a slight overall decline - Net profit margin was **21.8%**, a decrease of **3.6 percentage points** from 25.4% in the prior year; excluding the impact of intangible asset amortization from M&A, the **core net profit margin was 22.8%**[53](index=53&type=chunk) - The income tax rate was **23.5%**, a year-on-year decrease of **0.8 percentage points**, mainly due to tax incentives enjoyed by some subsidiaries as high-tech enterprises, for Western Development, and in the Hainan Free Trade Port[52](index=52&type=chunk) - Basic earnings per share were **RMB 0.57**, a year-on-year increase of **39%**[53](index=53&type=chunk) [Balance Sheet and Capital Structure](index=27&type=section&id=Balance%20Sheet%20and%20Capital%20Structure) The company maintains a robust financial position with RMB 4.88 billion in cash, increased goodwill from acquisitions, and a very low 4.7% capital gearing ratio - Cash and cash equivalents reached **RMB 4.882 billion**, an increase of **16.0%** compared to the end of 2019[54](index=54&type=chunk) - Goodwill increased by **RMB 762 million to RMB 2.133 billion**, a year-on-year increase of **55.6%**, due to the acquisition of China Minsheng Property[57](index=57&type=chunk) - The capital gearing ratio (total borrowings/total equity) was **4.7%**, indicating a very low level of leverage[61](index=61&type=chunk) [Other Operating Information](index=29&type=section&id=Other%20Operating%20Information) This section covers IPO proceeds utilization, major acquisitions like China Minsheng Property, employee policies, and the significant post-period H-share full circulation approval - As of June 30, 2020, approximately **RMB 2.937 billion of net IPO proceeds** had been utilized, with about **RMB 2.618 billion allocated to strategic investments and M&A**[65](index=65&type=chunk)[66](index=66&type=chunk) - The acquisition of a **60% equity stake in China Minsheng Property** was completed in H1 2020 for approximately **RMB 1.56 billion**, aiming to build a national, full-service, premium-brand property management leader[68](index=68&type=chunk) - As of June 30, 2020, the Group's total headcount reached **50,851 employees**, an increase of **76.7%** from the end of 2019, primarily due to growth from equity-invested entities[71](index=71&type=chunk) - Post-reporting period event: On July 1, 2020, the company received approval from the China Securities Regulatory Commission to participate in H-share full circulation, completing the conversion and listing of the first batch of **900 million shares** on July 28[72](index=72&type=chunk) Corporate Governance [Corporate Governance](index=33&type=section&id=Corporate%20Governance) The company upholds high corporate governance standards, rectifying a temporary non-compliance regarding Chairman and CEO roles, with interim results reviewed by the Audit Committee and PwC - The company's Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2020, which were also reviewed by PricewaterhouseCoopers[74](index=74&type=chunk) - During the reporting period, the roles of Chairman and Chief Executive Officer were held by the same person (Mr. Wong Fung Choy), which did not comply with Corporate Governance Code provision A.2.1; however, with the appointment of Mr. Li Dalong as CEO on July 21, 2020, the company has since fully complied with this provision[77](index=77&type=chunk) Other Information [Other Information](index=35&type=section&id=Other%20Information) This section details shareholdings of directors and major shareholders, board changes, and the decision not to recommend an interim dividend for 2020 - As of June 30, 2020, Mr. Chan Cheuk Hung was deemed to hold **720 million unlisted shares** through a family trust, representing **54.00%** of the issued share capital[79](index=79&type=chunk) - Greenland Holdings Corporation Limited, through its controlled entities, held **100 million unlisted shares**, representing **7.50%** of the issued share capital[84](index=84&type=chunk) - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2020[91](index=91&type=chunk) Interim Financial Statements [Interim Financial Statements](index=41&type=section&id=Interim%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for H1 2020, providing the detailed data foundation for the report's financial analysis - Provides the unaudited condensed consolidated statement of comprehensive income, presenting key profitability indicators such as revenue, costs, and profit[92](index=92&type=chunk) - Provides the unaudited condensed consolidated statement of financial position, detailing the company's assets, liabilities, and equity at the end of the reporting period[93](index=93&type=chunk)[94](index=94&type=chunk) - Provides the unaudited condensed consolidated statement of changes in equity and statement of cash flows, reflecting changes in shareholders' equity and cash flows from operating, investing, and financing activities, respectively[96](index=96&type=chunk)[97](index=97&type=chunk) Notes to Interim Financial Information [Business Combinations](index=70&type=section&id=Business%20Combinations) This note details the March 2020 acquisition of China Minsheng Property for RMB 1.56 billion, generating RMB 762 million in goodwill and significantly boosting revenue and net profit China Minsheng Property Acquisition Details | Item | Amount (RMB thousand) | | :--- | :--- | | Cash Consideration | 1,560,000 | | Net Identifiable Assets Acquired | 1,682,344 | | Company's Share of Net Identifiable Assets | 797,758 | | **Goodwill** | **762,242** | - The goodwill primarily arose from expectations of China Minsheng Property's future business development, enhanced market coverage, expanded service portfolio, and improved management efficiency[159](index=159&type=chunk) - From the acquisition date to June 30, 2020, the acquired business contributed **RMB 1.112 billion in revenue** and **RMB 125 million in net profit**[164](index=164&type=chunk) [Related Party Transactions](index=72&type=section&id=Related%20Party%20Transactions) This note details related party transactions, primarily providing property management and value-added services to entities controlled by Agile Group and Greenland Holdings H1 2020 Key Related Party Service Income | Related Party | Service Income (RMB thousand) | | :--- | :--- | | Controlled by the same ultimate controlling company (Agile Group) | 854,759 | | Joint ventures and associates of Agile Holdings | 118,640 | | Greenland Holdings and entities controlled by Greenland Holdings | 58,869 | Balances with Related Parties (June 30, 2020) | Item | Amount (RMB thousand) | | :--- | :--- | | **Amounts due from related parties** | | | - Trade receivables | 660,921 | | - Other receivables | 78,183 | | **Amounts due to related parties** | | | - Trade payables | 23,041 | | - Other payables | 62,172 |

Financial Performance - Total revenue for the six months ended June 30, 2019, was RMB 2,241.2 million, representing a 59.0% increase from RMB 1,405.7 million in the same period of 2018[13] - Gross profit for the same period was RMB 829.5 million, with a gross margin of 37.0%, compared to RMB 510.3 million and a gross margin of 36.3% in 2018[13] - Net profit reached RMB 568.4 million, reflecting a net profit margin of 25.4%, up from RMB 335.8 million and a margin of 23.9% in the previous year[13] - The group's revenue for the first half of 2019 was RMB 2,241.2 million, an increase of 59.4% year-on-year[32] - Gross profit reached RMB 829.5 million, up 62.6% year-on-year, with a gross margin of 37.0%, an increase of 0.7 percentage points[32] - Net profit was RMB 568.4 million, a year-on-year increase of 69.3%, with a net profit margin of 25.4%, up 1.5 percentage points[33] - The total comprehensive income for the period was RMB 568,391 thousand, compared to RMB 335,771 thousand in the prior year, reflecting overall growth[101] - The net income attributable to shareholders for the six months ended June 30, 2019, was RMB 541,314 thousand, up from RMB 332,332 thousand in 2018, reflecting a growth of 62.8%[135] Assets and Liabilities - The total assets as of June 30, 2019, amounted to RMB 8,689.6 million, an increase from RMB 7,296.5 million as of December 31, 2018[14] - Total liabilities reached RMB 2,916,945 thousand, up from RMB 1,786,512 thousand, indicating a rise of around 63.3%[104] - The company's goodwill increased to RMB 1,361,906 thousand from RMB 1,045,362 thousand, reflecting a growth of approximately 30.2%[102] - Trade and other receivables increased significantly to RMB 1,808,165 thousand from RMB 1,164,913 thousand, representing a growth of about 55.2%[102] - The total amount of accounts receivable from related parties included trade receivables of RMB 563,373 thousand, which increased from RMB 507,646 thousand in 2018, reflecting a growth of about 10.9%[177] Cash Flow - Cash and cash equivalents were reported at RMB 4,349.7 million, down from RMB 4,808.0 million at the end of 2018[14] - Operating cash flow for the six months ended June 30, 2019, was RMB 652,604 thousand, compared to RMB 248,718 thousand for the same period in 2018, representing a 162% increase[108] - Cash used in investing activities totaled RMB (970,911) thousand, compared to RMB (111,236) thousand in the previous year, indicating a significant increase in investment outflows[108] - The cash flow from financing activities resulted in a net outflow of RMB (24,154) thousand, contrasting with a net inflow of RMB 3,184,134 thousand in the previous year[108] Employee and Operational Costs - The total employee count increased by 59.8% to 30,129 as of June 30, 2019, with total employee costs rising by 58.5% to RMB 965.6 million[80] - Employee benefit expenses rose to RMB 965,636, a 58.5% increase compared to RMB 609,236 in the same period of 2018[125] - Cleaning expenses increased to RMB 149,852, up 69.8% from RMB 88,264 in the previous year[125] - Security expenses surged to RMB 97,202, a significant increase from RMB 24,847 in the same period of 2018[125] Business Expansion and Acquisitions - The company acquired Qingdao Huaren Property Co., Ltd. and Harbin Jingyang Property Management Co., Ltd., expanding its business footprint into Shandong Peninsula and Northeast regions[33] - The establishment of a new public service sector was initiated through the acquisition of Guangzhou Yuehua Property Co., Ltd., enhancing the group's service portfolio[33] - The total acquisition consideration for the business combinations during the period was RMB 583,904,000, with recognized goodwill of RMB 316,544,000 and identifiable net assets of RMB 440,678,000[158] - The acquired businesses contributed revenue of RMB 352,918,000 and net profit of RMB 32,526,000 from the acquisition date to June 30, 2019[161] Corporate Governance - The board of directors consists of eight members, including three executive directors, two non-executive directors, and three independent non-executive directors[82] - The company has adopted the corporate governance code and confirmed compliance with all applicable code provisions except for A.2.1, which allows the same person to hold the roles of chairman and CEO[86] - The company provides updates on business performance and developments through various channels to ensure transparency for shareholders[82] Related Party Transactions - The total revenue from related party transactions for the six months ended June 30, 2019, was RMB 861,891 thousand, an increase from RMB 608,178 thousand in the same period of 2018, representing a growth of approximately 41.5%[174] - The service provided by entities controlled by the same ultimate holding company amounted to RMB 736,607 thousand for the first half of 2019, compared to RMB 487,888 thousand in 2018, reflecting a year-on-year increase of about 51%[174] - The accounts receivable from related parties totaled RMB 606,612 thousand as of June 30, 2019, compared to RMB 578,315 thousand at the end of 2018, showing an increase of about 4.9%[177]

Company Overview [Company Overview](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88) A-Living Smart City Services is a leading property management provider focusing on mid-to-high-end properties, offering integrated services and successfully listed on the HKEX in 2018 - The company's core businesses include property management services, extended value-added services, and community value-added services, forming an integrated service value chain[6](index=6&type=chunk) - As of the reporting period, including post-year acquisitions, the Group's total contracted GFA was approximately **246 million square meters**, and total GFA under management was approximately **154 million square meters**[6](index=6&type=chunk) - The company successfully listed in Hong Kong on February 9, 2018, becoming China's first H-share property management company spun off from a red-chip entity[6](index=6&type=chunk) Company Information [Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides essential company information, including board and committee members, supervisors, company secretary, auditor, legal counsel, principal bankers, office addresses, investor relations contacts, and key listing and dividend dates - The Board of Directors is co-chaired by Mr. Chan Cheuk Hung and Mr. Wong Fung Choy, with Mr. Wong Fung Choy concurrently serving as acting Chief Executive Officer; the company has established four board committees: Audit, Remuneration and Appraisal, Nomination, and Risk Management[8](index=8&type=chunk) - The company's H-shares are listed on the Main Board of the Hong Kong Stock Exchange, stock code **3319**[10](index=10&type=chunk) - Subsequent to the reporting period, the company proposed a final dividend and a special dividend, with a record date of June 6, 2019, and planned payment around July 18, 2019[12](index=12&type=chunk)[13](index=13&type=chunk) Financial and Operational Summary [Financial Summary](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) In 2018, the company achieved significant financial growth, with revenue up **91.8%** to **RMB 3.377 billion**, gross profit up **118.4%** to **RMB 1.29 billion**, and net profit up **170.1%** to **RMB 811 million** Metric | Metric | 2018 | 2017 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue (RMB Million)** | 3,377 | 1,761 | +91.8% | | **Gross Profit (RMB Million)** | 1,290 | 591 | +118.4% | | **Gross Margin** | 38.2% | 33.5% | +4.7pp | | **Net Profit (RMB Million)** | 811 | 300 | +170.1% | | **Net Profit Margin** | 24.0% | 17.0% | +7.0pp | | **Basic EPS (RMB Yuan)** | 0.62 | 0.35 | +77.1% | Metric | Metric | Dec 31, 2018 | Dec 31, 2017 | Change | | :--- | :--- | :--- | :--- | | **Total Assets (RMB Million)** | 7,297 | 2,511 | +190.6% | | **Cash and Cash Equivalents (RMB Million)** | 4,808 | 880 | +446.4% | | **Shareholders' Equity (RMB Million)** | 5,510 | 1,474 | +273.8% | | **Total Liabilities/Total Assets** | 24.5% | 41.3% | -16.8pp | [2018 Milestones](index=10&type=section&id=2018%E5%B9%B4%E5%BA%A6%E5%A4%A7%E4%BA%8B%E8%A8%98) 2018 marked a milestone year for A-Living, with its successful HKEX listing and strategic expansions through partnerships and acquisitions, significantly broadening its business footprint - In February 2018, A-Living successfully listed on the Main Board of the Hong Kong Stock Exchange (stock code: **3319.HK**)[26](index=26&type=chunk) - The company actively expanded strategic collaborations, establishing partnerships with industry giants such as Alibaba, Ant Financial, Greenland Property, and JLL[26](index=26&type=chunk)[27](index=27&type=chunk) - Accelerated scale expansion through M&A activities, including the acquisition of a **51%** equity stake in Nanjing Zizhu[26](index=26&type=chunk) - By year-end, three major business segments were established: property services, community commerce, and asset management, defining a new pattern of synergistic development[27](index=27&type=chunk) [Key Honors and Awards](index=12&type=section&id=%E4%B8%BB%E8%A6%81%E6%A6%AE%E8%AD%BD%E5%8F%8A%E7%8D%8E%E9%A0%85) In 2018, A-Living received multiple industry awards for its outstanding comprehensive strength and market performance, affirming its leading position in property management and capital market recognition - Comprehensive strength recognized by the industry, honored as '2018 China Property Service Enterprises Comprehensive Strength Ranking Top 8' and '2018 China Community Service Provider TOP 10'[33](index=33&type=chunk) - Outstanding growth, awarded 'Second Place in Growth for 2018 China Top 100 Property Service Enterprises'[33](index=33&type=chunk) - Strong capital market performance, honored with the '2018 Hong Kong Listed Company Golden Lion Award — Most Investable New Stock Company'[33](index=33&type=chunk) Chairman's Report [Chairman's Report](index=13&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman's Report reviews the exceptional performance in the first year post-listing, highlighting the '1+N' strategy that fostered synergistic development across property management, asset management, and community commerce segments Financial Metric | Financial Metric | 2018 Amount (RMB) | Y-o-Y Growth | | :--- | :--- | :--- | | **Revenue** | 3.3767 billion RMB | +91.8% | | **Gross Profit** | 1.2899 billion RMB | +118.4% | | **Profit Attributable to Owners** | 801.0 million RMB | +176.5% | | **Basic EPS** | 0.62 RMB Yuan | - | - The Board recommended a 2018 final dividend of **RMB 0.15** per share and a special dividend of **RMB 0.15** per share, totaling **RMB 0.30** per share, representing a payout ratio of **50%**[38](index=38&type=chunk) - In terms of scale expansion, GFA under management and contracted GFA (including post-year acquisitions) reached **153.6 million square meters** and **246.4 million square meters** respectively; projects from third-party developers accounted for **46.3%** of contracted GFA[39](index=39&type=chunk) - Looking ahead to 2019, the company will leverage its listing platform to strengthen its residential property business and establish Zhuosen Property for high-end commercial management; M&A will focus on five major city clusters, including the Yangtze River Delta and Beijing-Tianjin-Hebei, to complete its national footprint[42](index=42&type=chunk) Management Discussion and Analysis [Financial Review](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section details the company's 2018 financial performance, showing strong revenue growth driven by value-added services, improved profitability, and a robust financial position with ample cash and no bank borrowings [Revenue Analysis](index=18&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Total revenue in 2018 increased by **91.8%** to **RMB 3.377 billion**, with extended value-added services showing explosive growth of **222.7%**; GFA under management and contracted GFA grew by over **75%**, driven by third-party expansion and M&A | Business Segment | 2018 Revenue (RMB Million) | Revenue Share | Growth Rate | | :--- | :--- | :--- | :--- | | Property Management Services | 1,624.8 | 48.1% | +34.8% | | Extended Value-added Services | 1,463.1 | 43.3% | +222.7% | | — On-site Property Management Services | 675.2 | 20.0% | +108.9% | | — Other Extended Value-added Services | 788.0 | 23.3% | +505.6% | | Community Value-added Services | 288.8 | 8.6% | +183.7% | | **Total** | **3,376.7** | **100%** | **+91.8%** | GFA Under Management Details (Thousand Sq.m.) | Project Source | 2018 Year-End | Area Share | New Area | New Area Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Agile Group | 48,191.7 | 34.9% | 6,002.7 | 14.2% | | Greenland Holdings | 4,728.3 | 3.4% | 2,044.1 | 76.2% | | Third-Party Developers | 55,846.6 | 40.4% | 22,384.8 | 66.9% | | Acquisitions | 29,353.0 | 21.3% | 29,353.0 | Not Applicable | | **Total** | **138,119.6** | **100%** | **59,784.6** | **76.3%** | Contracted GFA Details (Thousand Sq.m.) | Project Source | 2018 Year-End | Area Share | New Area | New Area Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Agile Group | 70,370.9 | 30.6% | 11,694.4 | 19.9% | | Greenland Holdings | 22,026.2 | 9.6% | 12,691.6 | 136.0% | | Third-Party Developers | 106,440.6 | 46.3% | 48,351.2 | 83.2% | | Acquisitions | 30,961.0 | 13.5% | 30,961.0 | Not Applicable | | **Total** | **229,798.7** | **100%** | **103,698.2** | **82.2%** | - Average property management fee per square meter per month: **RMB 3.20** for Agile Group and Greenland Holdings residential projects, and **RMB 2.25** for third-party residential projects; collection rate for Agile Group residential projects was as high as **95.7%**[50](index=50&type=chunk) [Cost, Gross Profit, and Net Profit Analysis](index=22&type=section&id=%E6%88%90%E6%9C%AC%E3%80%81%E6%AF%9B%E5%88%A9%E8%88%87%E5%88%A9%E6%BD%A4%E5%88%86%E6%9E%90) In 2018, overall gross profit increased by **118.4%** to **RMB 1.29 billion**, with gross margin rising to **38.2%**, primarily due to the rapid growth of high-margin value-added services; net profit surged by **170.1%** to **RMB 811 million** Gross Profit and Gross Margin by Business Segment | Business Segment | 2018 Gross Profit (RMB Million) | 2018 Gross Margin | 2017 Gross Margin | Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 444.6 | 27.4% | 26.9% | +0.5 pp | | Extended Value-added Services | 698.2 | 47.7% | 49.3% | -1.6 pp | | Community Value-added Services | 147.1 | 50.9% | 41.7% | +9.2 pp | | **Total** | **1,289.9** | **38.2%** | **33.5%** | **+4.7 pp** | - Cost of sales growth (**+78.3%**) was slower than revenue growth (**+91.8%**), primarily due to an increased proportion of high-margin value-added services[60](index=60&type=chunk) - Administrative expenses as a percentage of revenue decreased from **9.7%** to **8.9%**, and selling and marketing expenses as a percentage of revenue decreased from **1.9%** to **1.4%**, reflecting effective cost control and economies of scale[63](index=63&type=chunk)[64](index=64&type=chunk) - Net profit for the year reached **RMB 811 million**, a year-on-year increase of **170.1%**; net profit margin was **24.0%**, an increase of **7.0 percentage points** year-on-year[66](index=66&type=chunk) [Balance Sheet and Cash Flow](index=24&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%80%B5%E8%88%87%E7%8F%BE%E9%87%91%E6%B5%81) As of year-end 2018, the company's financial position was extremely robust, with total assets growing to **RMB 7.297 billion** and cash and cash equivalents significantly increasing to **RMB 4.808 billion** due to IPO proceeds and operating cash inflows - As of the end of 2018, cash and cash equivalents reached **RMB 4.808 billion**, a **446.5%** increase from **RMB 880 million** at the beginning of the year, primarily from IPO proceeds and operating cash inflows[67](index=67&type=chunk) - Goodwill increased to **RMB 1.045 billion** due to acquisitions including Greenland Property and Nanjing Zizhu, a **13.8%** increase from the beginning of the year[70](index=70&type=chunk) - As of the end of 2018, the company had no bank borrowings, resulting in a **zero** capital gearing ratio[73](index=73&type=chunk) [Significant Acquisitions and Capital Operations](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E8%88%87%E8%B3%87%E6%9C%AC%E9%81%8B%E4%BD%9C) In 2018, the company successfully listed, raising approximately **HKD 3.959 billion**, which provided ample capital for strategic investments and acquisitions, including a **51%** stake in Nanjing Zizhu - Successfully listed on February 9, 2018, raising net proceeds of approximately **HKD 3.959 billion** (approximately **RMB 3.199 billion**)[75](index=75&type=chunk) - Approximately **65%** of the proceeds are planned for strategic investments and acquisitions, with **RMB 422 million** already utilized for this purpose as of the reporting date[76](index=76&type=chunk) - Acquired a **51%** equity stake in Nanjing Zizhu for **RMB 205 million** during the year, consolidating its financial statements from May 2018[77](index=77&type=chunk) - Subsequent to the reporting period, the company continued to pursue acquisitions, including **89.66%** of Qingdao Huaren for **RMB 134 million** and **60%** of Harbin Jingyang for **RMB 114 million**, with plans to consolidate their results from April 2019[79](index=79&type=chunk)[80](index=80&type=chunk) [Employees and Remuneration](index=27&type=section&id=%E5%93%A1%E5%B7%A5%E8%88%87%E8%96%AA%E9%85%AC) Driven by rapid business expansion and M&A activities, the company's workforce significantly grew, with employee numbers increasing by **54.7%** to **18,859** and total staff costs rising by **89.5%** to **RMB 1.473 billion** | Metric | 2018 Year-End | 2017 Year-End | Growth Rate | | :--- | :--- | :--- | :--- | | **Number of Employees** | 18,859 | 12,192 | +54.7% | | **Total Staff Costs (RMB Million)** | 1,472.5 | 777.2 | +89.5% | - The increase in staff costs was primarily due to the addition of personnel from acquired companies and increased incentive costs driven by the rapid development of property agency and community value-added services[82](index=82&type=chunk) Business Development and Strategy [Business Development](index=28&type=section&id=%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95) The company deepens its '1+N' strategy, focusing on property management while diversifying into other services, leveraging dual brands and technological advancements to enhance operational efficiency and service experience - Implemented a dual-brand strategy with 'Agile Property' focusing on mid-to-high-end residential and tourism properties, and 'Greenland Property' specializing in commercial office buildings and super high-rises, leveraging synergistic effects[84](index=84&type=chunk) - Core businesses are divided into three segments: property management services (core business), extended value-added services (full real estate lifecycle services), and community value-added services (building a community economic ecosystem)[85](index=85&type=chunk)[86](index=86&type=chunk) - Built smart communities through 'Four Modernizations' (management digitalization, service professionalization, process standardization, operation mechanization) and technology application, enhancing corporate efficiency and owner experience[87](index=87&type=chunk) [Investor Relations](index=31&type=section&id=%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E4%BF%82) Post-listing, the company actively engaged with the capital market through various channels, maintaining transparency and receiving positive ratings from **15** brokerage firms, reflecting strong market recognition - Adhering to principles of transparency, timeliness, and fairness, the company maintained close communication with the capital market through various channels, hosting over **1,000** investor visits during the year[88](index=88&type=chunk)[89](index=89&type=chunk) - As of the end of 2018, **15** brokerage firms covered the company, issuing over **40** research reports, all giving 'Buy' or 'Outperform' ratings[89](index=89&type=chunk) - During the year, awarded '2018 Hong Kong Listed Company Golden Lion Award — Most Investable New Stock Company' and 'Second China Excellent IR Best Innovation Award'[89](index=89&type=chunk) Corporate Governance [Directors, Supervisors, and Senior Management](index=33&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1) This section details the professional backgrounds and extensive experience of the company's Board of Directors, Supervisory Committee, and senior management team in real estate, property management, and finance - Co-chairmen of the Board, Mr. Chan Cheuk Hung and Mr. Wong Fung Choy, both hold key positions at Agile Group, possessing over **20 years** of experience in real estate and property management[92](index=92&type=chunk) - Independent Non-executive Directors Mr. Wan Kam To, Mr. Wan Sze Chung, and Mr. Wang Peng possess extensive backgrounds in accounting, financial management, and property management industry associations, providing independent professional judgment to the company[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) - Chief Financial Officer and Joint Company Secretary Mr. Li Dalong has over **12 years** of experience in accounting and capital markets, having previously worked at PricewaterhouseCoopers[101](index=101&type=chunk) [Corporate Governance Report](index=40&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) The company is committed to high corporate governance standards, strictly adhering to the Corporate Governance Code since its listing, with robust board committees and internal control systems in place - Since its listing, the company has fully complied with the Corporate Governance Code, with the only deviation being Mr. Wong Fung Choy's dual role as Co-chairman and acting Chief Executive Officer, which the Board deems to be in the company's best interest[105](index=105&type=chunk)[108](index=108&type=chunk) - The Board has established four committees: Audit, Remuneration and Appraisal, Nomination, and Risk Management, whose composition and terms of reference comply with regulations to assist the Board in fulfilling its duties[128](index=128&type=chunk) - A risk management organizational structure and systematic risk management system have been established from the Board to various business units, with the Audit and Supervision Department continuously monitoring the effectiveness of internal control systems; the Board has reviewed the 2018 risk management and internal control systems and deemed them effective and sufficient[138](index=138&type=chunk)[139](index=139&type=chunk)[148](index=148&type=chunk) [Board Report](index=61&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) The Board Report outlines the company's core business, performance, dividend policy, share capital changes, and significant acquisitions, detailing ongoing connected transactions with controlling shareholders - The Board recommended a 2018 annual dividend (final dividend + special dividend) of **RMB 0.30** per share (pre-tax), with a payout ratio of **50%**[166](index=166&type=chunk) - The controlling shareholder has provided a non-compete undertaking, and independent non-executive directors confirmed full compliance with the undertaking[183](index=183&type=chunk)[184](index=184&type=chunk) - The report details multiple continuing connected transactions with Agile Group and Greenland Group, covering property management, marketing services, leasing, and move-in services, disclosing annual caps for 2018-2020 and actual transaction amounts for the current year[201](index=201&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) - Independent non-executive directors and the auditor have reviewed and confirmed the compliance and fairness of the continuing connected transactions[227](index=227&type=chunk)[228](index=228&type=chunk) [Supervisory Committee Report](index=86&type=section&id=%E7%9B%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) The Supervisory Committee Report details its 2018 activities, including overseeing board and management performance, connected transactions, and major operational decisions, affirming the company's compliant operations and accurate reporting - In 2018, the Supervisory Committee held **3** meetings, with all supervisors diligently performing their oversight duties[238](index=238&type=chunk)[239](index=239&type=chunk) - The Supervisory Committee provided independent positive opinions on the company's lawful operations, the truthfulness of the annual report, the performance of directors and senior management, and the compliance of continuing connected transactions[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk) [Environmental, Social and Governance (ESG)](index=59&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%20%28ESG%29) The company integrates sustainable development into its strategy, actively fulfilling environmental and social responsibilities through energy conservation, waste management, employee development, and community engagement, with a dedicated ESG report to be published - Environmental Protection: Established an environmental management system, implemented electricity and water saving measures, and utilized idle resources to build nurseries, enhancing green and low-carbon operations[157](index=157&type=chunk) - Social Responsibility: Provided quality services to owners with 'craftsmanship' and 'sincerity', safeguarded employee rights and offered development platforms, fostered win-win cooperation with suppliers, and actively participated in community cultural building and targeted poverty alleviation[158](index=158&type=chunk)[159](index=159&type=chunk) - The company will publish a separate ESG report in accordance with the HKEX's Environmental, Social and Governance Reporting Guide[159](index=159&type=chunk) Financial Statements and Auditor's Report [Independent Auditor's Report](index=89&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) Independent auditor PwC issued an unqualified opinion on the 2018 consolidated financial statements, identifying 'Goodwill Impairment Assessment' as the sole key audit matter due to its materiality and subjective management judgments - Auditor PricewaterhouseCoopers issued a standard unqualified opinion on the consolidated financial statements[250](index=250&type=chunk) - The key audit matter was 'Goodwill Impairment Assessment'; as of the end of 2018, the carrying amount of goodwill was **RMB 1.045 billion**, primarily related to acquisitions of other property management groups; its materiality and the subjective management judgments involved in its assessment made it an audit focus[252](index=252&type=chunk)[253](index=253&type=chunk) - The auditor's procedures included: evaluating the professional competence of external valuers, assessing the reasonableness of valuation methods and key assumptions (e.g., revenue growth rate, gross profit margin, discount rate), and performing sensitivity analysis; the auditor deemed the valuation methods appropriate and key assumptions supported by evidence[253](index=253&type=chunk) [Consolidated Financial Statements](index=93&type=section&id=%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the company's core consolidated financial statements for 2018, including the statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows 2018 Key Financial Data (Consolidated Statements) | Metric | Amount (RMB '000) | | :--- | :--- | | **Income Statement:** | | | Revenue | 3,376,749 | | Operating Profit | 1,076,280 | | Profit for the Year | 810,879 | | **Balance Sheet (Period-End):** | | | Total Assets | 7,296,549 | | Total Liabilities | 1,786,512 | | Total Shareholders' Equity | 5,510,037 | | **Cash Flow Statement:** | | | Net Cash from Operating Activities | 883,165 | | Net Cash Used in Investing Activities | (112,241) | | Net Cash from Financing Activities | 3,142,403 | [Notes to Financial Statements](index=99&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes to the financial statements provide detailed explanations and supplementary information on the company's principal accounting policies, estimates, segment information, and significant transactions, crucial for understanding its financial position [Segment Information (Note 5)](index=125&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The company manages its operations by brand, segmenting into 'Agile Property' and 'All Other Segments'; in 2018, 'Agile Property' contributed the majority of revenue and profit, with external revenue of **RMB 2.829 billion** and segment profit of **RMB 869 million** 2018 Segment Performance (RMB '000) | Segment | External Customer Revenue (RMB '000) | Segment Performance (RMB '000) | | :--- | :--- | :--- | | Agile Property | 2,829,171 | 868,906 | | All Other Segments | 547,578 | 72,843 | | **Total** | **3,376,749** | **941,749** | [Revenue (Note 6)](index=129&type=section&id=%E6%94%B6%E5%85%A5) The vast majority of the company's revenue (over **99%**) is recognized 'over time', primarily from ongoing property management and related value-added services; as of year-end, contract liabilities, mainly prepaid property management fees, amounted to **RMB 365 million** 2018 Revenue by Recognition Point (RMB '000) | Revenue Type | Recognition Point | Amount | | :--- | :--- | :--- | | Property Management Services | Over Time | 1,624,835 | | Other Extended Value-added Services | Over Time | 1,747,719 | | Sale of Goods, Parking Lots & Shops | At a Point in Time | 4,195 | | **Total** | | **3,376,749** | - As of the end of 2018, contract liabilities (primarily prepaid customer funds) amounted to **RMB 365 million**, of which **RMB 51.66 million** was from related parties[369](index=369&type=chunk) [Intangible Assets and Goodwill (Note 16)](index=139&type=section&id=%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2%E8%88%87%E5%95%86%E8%AD%BD) As of year-end 2018, the company's intangible assets were **RMB 166 million** and goodwill was **RMB 1.045 billion**, primarily from acquisitions; management performed impairment tests with an independent valuer, concluding no impairment was needed based on future cash flow projections Intangible Assets and Goodwill Net Book Value (RMB '000) | Metric | 2018 Year-End (RMB '000) | 2017 Year-End (RMB '000) | | :--- | :--- | :--- | | Computer Software | 21,736 | 21,916 | | Trademarks | 22,307 | 16,200 | | Customer Relationships | 122,405 | 72,187 | | **Total Intangible Assets** | **166,448** | **110,303** | | **Goodwill** | **1,045,362** | **918,967** | - Key assumptions for goodwill impairment testing include: projected annual revenue growth rates for Greenland Property of **9%-101%** and gross margin of approximately **29-30%** over the next 5 years; for Nanjing Zizhu, projected annual revenue growth rates of **3%-28%** and gross margin of approximately **22%** over the next 5 years; pre-tax discount rates were **20.6%** and **19.9%** respectively[398](index=398&type=chunk)[399](index=399&type=chunk) [Business Combinations (Note 29)](index=152&type=section&id=%E6%A5%AD%E5%8B%99%E5%90%88%E4%BD%B5) In 2018, the company completed two significant business combinations: acquiring a **51%** stake in Nanjing Zizhu for a discounted consideration of **RMB 202 million**, resulting in **RMB 124 million** in goodwill, and **100%** of Jingji Property Services for **RMB 10.5 million**, generating **RMB 2.08 million** in goodwill - On April 30, 2018, the acquisition of a **51%** equity stake in Nanjing Zizhu was completed for a discounted consideration of **RMB 202 million**, recognizing **RMB 124 million** in goodwill[428](index=428&type=chunk)[432](index=432&type=chunk) - On August 31, 2018, the acquisition of a **100%** equity stake in Jingji Property Services was completed for a consideration of **RMB 10.5 million**, recognizing **RMB 2.08 million** in goodwill[434](index=434&type=chunk)[435](index=435&type=chunk) [Related Party Transactions (Note 30)](index=155&type=section&id=%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) The company engages in substantial related party transactions, primarily providing services to entities controlled by its ultimate holding company, Agile Holdings, and major shareholder, Greenland Holdings; in 2018, revenue from these transactions totaled **RMB 1.569 billion**, forming a significant portion of the company's total revenue 2018 Key Related Party Transactions (Service Revenue, RMB '000) | Counterparty | 2018 (RMB '000) | 2017 (RMB '000) | | :--- | :--- | :--- | | Entities Controlled by Same Ultimate Holding Company | 1,243,936 | 470,605 | | Greenland Holdings and its Controlled Entities | 207,243 | 43,766 | | Agile Holdings' Joint Ventures and Associates | 114,996 | 18,889 | | **Total** | **1,569,370** | **533,786** | 2018 Year-End Key Related Party Receivables (RMB '000) | Metric | Amount (RMB '000) | | :--- | :--- | | Trade Receivables | 507,646 | | Other Receivables | 70,669 | | **Total** | **578,315** | [Five-Year Financial Summary](index=175&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) The five-year financial summary illustrates the company's consistent high growth from 2014 to 2018, with revenue and profit attributable to owners showing significant compound annual growth rates Five-Year Financial Data Summary (RMB '000) | Metric | 2018 (RMB '000) | 2017 (RMB '000) | 2016 (RMB '000) | 2015 (RMB '000) | 2014 (RMB '000) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 3,376,749 | 1,760,753 | 1,244,735 | 934,412 | 826,099 | | **Gross Profit** | 1,289,941 | 590,565 | 311,647 | 148,815 | 98,820 | | **Profit Attributable to Owners of the Company** | 801,045 | 289,727 | 160,670 | 64,966 | 41,604 | | **Total Assets** | 7,296,549 | 2,510,797 | 1,898,857 | 1,253,992 | 1,605,432 | | **Total Equity** | 5,510,037 | 1,474,069 | 303,482 | 102,960 | 30,929 |