Financial Performance - Revenue for 2023 decreased by 4.4% to RMB 3,848.973 million compared to RMB 4,025.711 million in 2022[43] - Gross profit for 2023 decreased by 4.7% to RMB 1,182.364 million compared to RMB 1,240.560 million in 2022[43] - Net profit for 2023 increased by 4.1% to RMB 62.318 million compared to RMB 59.851 million in 2022[43] - Profit attributable to owners of the parent company surged by 788.1% to RMB 30.303 million in 2023 from RMB 3.412 million in 2022[43] - Earnings per share (basic and diluted) increased by 782.4% to RMB 1.50 in 2023 from RMB 0.17 in 2022[43] - Income tax expense for 2023 increased to RMB 77.7 million from RMB 63.6 million in 2022, primarily due to higher taxable income[41] - Total assets decreased by 0.7% to RMB 6,894.4 million in 2023 compared to RMB 6,944.7 million in 2022[77] - Total liabilities decreased by 9.4% to RMB 3,185.0 million in 2023 from RMB 3,516.2 million in 2022[77] - Total equity increased by 8.2% to RMB 3,709.4 million in 2023 from RMB 3,428.5 million in 2022[77] - Trade receivables increased by 18.9% to RMB 2,441.2 million in 2023 from RMB 2,052.4 million in 2022[83] - Trade payables decreased by 7.1% to RMB 534.8 million in 2023 from RMB 575.4 million in 2022[84] - The company achieved revenue of approximately RMB 3,849.0 million in 2023, with third-party revenue increasing from 78.6% in 2022 to 82.9% in 2023, indicating accelerated independent development[92] - Gross profit for 2023 was approximately RMB 1,182.4 million, with a gross profit margin of 30.7%[92] - Total sales cost decreased by RMB 118.6 million or 4.3% to approximately RMB 2,666.6 million in 2023 compared to 2022[101] - Administrative expenses decreased by RMB 35.4 million or 6.5% to approximately RMB 507.4 million in 2023, primarily due to improved management efficiency[104] - Gross profit decreased by 4.7% YoY to RMB 1,182.4 million in 2023, with a gross margin of 30.7% (2022: 30.8%)[133] - Other expenses amounted to RMB 548.2 million in 2023, including trade receivables impairment loss of RMB 205.9 million and goodwill impairment loss of RMB 255.8 million[135] - Government subsidies and VAT incentives decreased by 44.8% YoY to RMB 46.5 million in 2023[150] - The company's total revenue for 2023 was RMB 3,848.9 million, a slight decrease from RMB 4,025.7 million in 2022[147] Business Operations - The company operates in China, providing residential property management services and non-residential property management and commercial operation services[10] - Revenue from pre-sale management services in the non-residential property management and commercial operations segment decreased from RMB 31.4 million in 2022 to RMB 24.2 million in 2023, mainly due to a reduction in the number of sales offices managed[100] - Residential property management service revenue decreased by 7.0% YoY to RMB 1,744.1 million in 2023, primarily due to a decline in the number of residential property sales offices and community value-added services[120] - Excluding pre-sale management services and other value-added services, residential property management service revenue increased by 4.5% YoY to RMB 1,340.9 million in 2023[120] - Non-residential property management and commercial operation service revenue decreased by 2.1% YoY to RMB 2,104.9 million in 2023, mainly due to reduced demand for temporary hospitals and isolation facilities post-pandemic[123] - Revenue from pre-sale management services in the residential property management segment decreased by 30.5% YoY to RMB 181.0 million in 2023[129] - Commercial operation service revenue in the non-residential property management segment decreased by 10.0% YoY to RMB 121.1 million in 2023[132] - Total revenue from the Greater Bay Area accounted for 37.9% of residential property management service revenue in 2023, down from 42.9% in 2022[121] - Revenue from public and urban area property management services accounted for 35.5% of total non-residential property management and commercial operation service revenue in 2023[138] - Total revenue from the residential property management segment accounted for 45.3% of the company's total revenue in 2023, down from 46.6% in 2022[138] - Residential property management services accounted for 57.3% of revenue in the Greater Bay Area and Yangtze River Delta regions in 2023[139] - Non-residential property management and commercial operations revenue in the Greater Bay Area decreased by 6.7% YoY in 2023, primarily due to the withdrawal of some managed quarantine facilities post-pandemic[142] - Total revenue for residential property management services was RMB 1,744.1 million in 2023, representing 45.3% of total revenue[147] - Non-residential property management and commercial operations revenue was RMB 2,104.9 million in 2023, accounting for 54.7% of total revenue[147] - Community value-added services revenue in residential property management decreased from RMB 331.2 million in 2022 to RMB 222.2 million in 2023 due to the sluggish real estate market[154] - Property management services revenue in non-residential property management decreased from RMB 1,866.3 million in 2022 to RMB 1,830.7 million in 2023, mainly due to reduced revenue from hospital projects[155] - The Greater Bay Area contributed 44.3% of non-residential property management revenue in 2023, down from 46.5% in 2022[143] - Non-residential property management and commercial operation services segment's other value-added service revenue increased from approximately RMB 118.5 million in 2022 to approximately RMB 129.0 million in 2023, driven by diversified business development[173] Financial Assets and Liabilities - The company's investment properties are initially measured at cost, including transaction costs, and subsequently measured at fair value reflecting market conditions at each reporting date[19] - The company applies a simplified method for calculating expected credit losses on trade receivables, using a provision matrix based on historical credit loss experience and adjusted for specific forward-looking factors[23] - The company's financial liabilities are initially recognized at fair value, with transaction costs deducted for loans, borrowings, and payables[31] - The company's cash and cash equivalents consist of cash on hand, bank deposits, and short-term deposits, net of bank overdrafts that are repayable on demand and form an integral part of the company's cash management[32] - The company's financial assets are measured based on their classification, with impairment losses recognized in two stages: 12-month expected credit losses and lifetime expected credit losses[34][35] - Financial liabilities are initially measured at fair value and subsequently measured at amortized cost using the effective interest method, unless the discounting effect is not significant[37] - The company's financial assets and liabilities can be offset if there is a legally enforceable right to set off the recognized amounts and an intention to settle on a net basis[39] - The company is in a net cash position, making the debt ratio not applicable for both 2023 and 2022[85] - The company has no significant contingent liabilities as of December 31, 2023[86] - The company has not engaged in hedging activities to manage foreign exchange rate risk during 2023[86] - Total assets as of December 31, 2023, were RMB 6,894.4 million, with total liabilities of RMB 3,185.0 million, resulting in a current ratio of 1.82[151] - Cash and cash equivalents decreased by approximately 21.9% from approximately RMB 1,847.5 million as of December 31, 2022, to approximately RMB 1,442.9 million as of December 31, 2023[174] - Total borrowings as of December 31, 2023, amounted to approximately RMB 637.0 million, with RMB 148.0 million due within 1 year, RMB 464.8 million due within 2 to 5 years, and RMB 24.2 million due after 5 years[174] - The company's bank and other loans are secured by trade receivables, other receivables, and property, plant, and equipment with a total book value of approximately RMB 182.6 million, plus equity in a subsidiary[174] - The company's total borrowings as of December 31, 2023, include approximately RMB 600.4 million of loans with fixed interest rates, while the rest are subject to floating interest rates[174] Corporate Governance and Awards - The company received multiple awards in 2023, including "2023 China Property Management Listed Company TOP10" and "2023 China Property Management ESG Development Excellence Award"[44][46] - The company has adopted a board diversity policy, considering factors such as gender, age, cultural and educational background, professional experience, and skills when selecting board candidates[112] - The company has implemented a governance framework in compliance with the Hong Kong Stock Exchange's Corporate Governance Code, with deviations only for specific reasons[87] - The company held 4 board meetings and 2 general meetings (including 1 annual general meeting and 1 extraordinary general meeting) during the year ended December 31, 2023[184] - The company has three independent non-executive directors, accounting for more than one-third of the board members, with at least one possessing appropriate professional qualifications or accounting and financial management expertise[183] - The nomination committee reviewed the board's structure, size, and composition, as well as the diversity and independence of board members, and assessed the independence of independent non-executive directors during the year[170] - The company's shareholder communication policy ensures equal and timely access to company information through its website and the "Disclosure Easy" website, including interim and annual reports, announcements, and circulars[189] - The company's board has established three committees: remuneration committee, nomination committee, and audit committee, which are adequately resourced to fulfill their responsibilities[193] - The company has adopted a nomination policy outlining criteria and procedures for the selection, appointment, and re-appointment of directors, considering factors such as integrity, achievements, experience, time commitment, and potential contribution to board diversity[195] - The audit committee is responsible for reviewing and monitoring the integrity of the group's financial statements, annual reports, and interim reports, as well as the group's financial and accounting policies and practices[196] - The audit committee reviews the external auditor's management letter, questions raised by the external auditor to management, and management's responses, and advises the board on environmental, social, and governance matters under the new Appendix C2 of the Listing Rules effective from December 31, 2023[197] - All audit committee members attended all 4 meetings held during the period[198] - Ernst & Young resigned as the company's auditor on December 27, 2023, and the board appointed PricewaterhouseCoopers as the new auditor to fill the temporary vacancy until the next annual general meeting[199] Strategic Focus and Efficiency - The company's efficiency (revenue per yuan of labor cost) increased by 10.2 percentage points in 2023 compared to 2022[74] - The company continues to focus on digital transformation and operational efficiency, leveraging AI and technology to enhance productivity[74] - The company plans to focus on digital transformation and building new productive forces in 2024, aiming for high-quality development[89] - The company will continue to strengthen its competitive barriers in existing markets such as residential, commercial, institutional, and public properties, while exploring potential opportunities[89] - The company aims to balance cost and efficiency while ensuring an exceptional customer experience in 2024[89] Reserves and Investments - The company's consolidated reserves amounted to approximately RMB 3,377,893,000 as of 2023, compared to RMB 3,124,045,000 in 2022[9]

Financial Performance - For the year ended December 31, 2023, the revenue was approximately RMB 3,849.0 million, a decrease of about 4.4% year-on-year[3]. - The gross profit for the same period was approximately RMB 1,182.4 million, down approximately 4.7% year-on-year[3]. - The profit for the year was approximately RMB 62.3 million, an increase of about 4.1% year-on-year[3]. - Total comprehensive income for the year was RMB 75.5 million, down from RMB 146.3 million in the previous year[7]. - The adjusted profit before tax for the group was RMB 139,975,000, resulting in a net profit of RMB 62,318,000 after tax expenses of RMB 77,657,000[30]. - The group reported a significant impairment loss on goodwill amounting to RMB 255,840,000, alongside a net impairment loss on trade receivables of RMB 205,947,000[32]. - The pre-tax profit for the group was impacted by various costs, with total costs of services provided amounting to RMB 2,666.609 million in 2023, down from RMB 2,785.151 million in 2022[49]. - The group’s tax expense for the year was RMB 77.657 million, slightly up from RMB 63.582 million in 2022, indicating an increase of approximately 22.5%[52]. - Basic and diluted earnings per share for the year were RMB 1.50, significantly up from RMB 0.17 in 2022, indicating a substantial increase in profitability[54]. Revenue Breakdown - The total revenue for the year ended December 31, 2023, was RMB 3,848,973,000, with a breakdown of RMB 1,744,067,000 from residential property management services and RMB 2,104,906,000 from non-residential property management and commercial operations[30]. - Revenue from residential property management services amounted to RMB 1,744.067 million in 2023, down from RMB 1,875.125 million in 2022, indicating a decrease of approximately 7.0%[43]. - Non-residential property management and commercial operation services generated revenue of RMB 2,104.906 million in 2023, slightly down from RMB 2,150.586 million in 2022, reflecting a decrease of about 2.1%[43]. - The total revenue for the residential property management services segment decreased by 7.0% to approximately RMB 1,744.1 million in 2023, compared to RMB 1,875.1 million in 2022[92]. - The property management service revenue reached approximately 3,171.6 million, an increase of about 0.7% year-on-year, with residential property management service revenue at approximately 1,340.9 million, growing by about 4.5%[77]. Assets and Liabilities - Non-current assets totaled RMB 2,251.9 million, a decrease from RMB 2,560.5 million in the previous year[9]. - Current assets increased to RMB 4,642.5 million from RMB 4,384.2 million in the previous year[9]. - The net current assets amounted to RMB 2,089.9 million, compared to RMB 1,423.9 million in the previous year[9]. - Total equity attributable to shareholders of the parent company was RMB 3,395.5 million, up from RMB 3,141.6 million in the previous year[11]. - The company's trade receivables increased to RMB 3,186.2 million in 2023 from RMB 2,642.9 million in 2022, with a provision for impairment losses rising to RMB 744.9 million[56]. - The company's contract liabilities increased to RMB 258.809 million as of December 31, 2023, compared to RMB 225.945 million in 2022, marking an increase of approximately 14.6%[44]. Operational Efficiency and Strategy - The company’s operational efficiency improved, with revenue per unit of labor cost increasing by approximately 10.2 percentage points compared to the same period in 2022[64]. - The company plans to continue its digital transformation and enhance its service capabilities in 2024, focusing on maintaining competitive advantages in existing markets[68]. - The company aims to strengthen its market capabilities and explore potential opportunities in 2024, emphasizing a balance between customer experience and operational efficiency[68]. - The company aims to optimize its national layout by replicating successful project experiences in existing advantageous areas[92]. - The company has expanded its business layout to include "residential + commercial property and operations + public construction and urban services" as of December 31, 2023[78]. Corporate Governance and Compliance - The company is committed to maintaining high-quality corporate governance to protect shareholder interests and enhance corporate value[147]. - The company will hold its 2024 Annual General Meeting on June 5, 2024[145]. - The board proposes to amend the existing articles of association and bylaws at the 2024 annual general meeting to comply with new regulatory requirements[157]. - The proposed amendments aim to facilitate electronic communication with shareholders and allow for electronic or hybrid shareholder meetings[158]. - The full text of the proposed amendments will be published on the stock exchange and the company's website[159]. Auditor and Reporting - Ernst & Young resigned as the company's auditor on December 27, 2023, and Baker Tilly Hong Kong Limited was appointed as the new auditor[153]. - The company's annual report for the year ending December 31, 2023, will be published by the end of April 2024 on the company's website and the HKEX news website[156]. - The audit committee, composed of three independent non-executive directors, has reviewed the group's annual performance for the year ending December 31, 2023[152]. Employee and Workforce - As of December 31, 2023, the company has 16,814 employees, a decrease from 17,598 employees in 2022[142].

Financial Performance - The company's revenue for the first half of 2023 decreased by 8.5% year-on-year, reaching approximately RMB 1,888.1 million[8]. - The core net profit for the first half of 2023 was approximately RMB 257.8 million[8]. - Total revenue for the first half of 2023 was RMB 1,888.1 million, representing a year-on-year decline of 8.5%, primarily due to decreased income from presale management and community value-added services[18]. - Revenue from residential property management services decreased by 10.7% year-on-year to approximately RMB 849.6 million, down from RMB 951.8 million[28]. - Revenue from community value-added services decreased significantly to RMB 97.3 million from RMB 191.6 million, indicating challenges in the real estate market[23]. - The company reported a significant decline in community value-added services revenue, dropping to RMB 97.3 million from RMB 191.6 million, a decrease of 49.3%[45]. - The company reported a basic and diluted earnings per share of RMB 3, compared to RMB 16 for the same period in 2022[92]. - The total comprehensive income for the period was RMB 110,766, down from RMB 337,996 in the same period last year[94]. - The group recorded a profit before tax of RMB 123,133,000, a significant decline of 70.4% from RMB 415,656,000 in the same period last year[113]. Operational Efficiency and Strategy - The company is focusing on optimizing its business structure by reducing reliance on traditional developer clients and increasing the proportion of third-party business[9]. - The company plans to leverage digital tools to enhance operational efficiency and support high-quality growth[8]. - The company aims to balance short-term returns with long-term development while focusing on quality growth and operational efficiency[16]. - The company is actively managing its project portfolio, withdrawing from high-risk projects to optimize overall operations[17]. - The company aims to enhance local market expansion by developing benchmark public construction projects and deepening integration with member enterprises[34]. - The company is exploring new growth paths and service possibilities based on big data to enhance service quality and customer experience[20]. - The company emphasizes the importance of quality service and digital efficiency as key components of its long-term development strategy[17]. Market Presence and Project Management - Revenue from third-party projects accounted for 81.4% of total revenue in the first half of 2023, up from 77.3% in the same period last year[9]. - The company managed a total construction area of 205.4 million square meters and a contracted construction area of 278.1 million square meters as of June 30, 2023[10]. - The area managed for third-party projects reached 179.2 million square meters, representing 87.3% of the total managed area[10]. - The total contracted building area across 134 cities in China reached approximately 278.1 million square meters[17]. - The area under management for residential properties reached 105.3 million square meters, with third-party residential properties accounting for 79.0% of this area[28]. - The area under management in the Greater Bay Area and Yangtze River Delta accounted for 58.9% of the total area under management as of June 30, 2023[24]. - The area under management decreased slightly from 215.5 million square meters at the end of 2022 to 205.4 million square meters by June 30, 2023, due to the withdrawal from high-risk projects[24]. - The company achieved a third-party project management area ratio of 87.3% as of June 30, 2023, reflecting successful market expansion efforts[27]. Financial Position and Assets - Total assets increased to approximately RMB 7,149.8 million as of June 30, 2023, from approximately RMB 6,944.7 million as of December 31, 2022[58]. - Cash and cash equivalents decreased by approximately 10.6% to approximately RMB 1,652.2 million as of June 30, 2023, compared to approximately RMB 1,847.5 million as of December 31, 2022[59]. - Trade receivables increased by approximately RMB 266.8 million or 13.0% to approximately RMB 2,319.2 million as of June 30, 2023, compared to approximately RMB 2,052.4 million as of December 31, 2022[61]. - The total equity attributable to owners of the parent increased to RMB 3,443,630 thousand from RMB 3,141,613 thousand, an increase of about 9.6%[97]. - The company reported a net loss of RMB 139,193 thousand in operating cash flow for the first half of 2023, compared to a positive cash flow of RMB 265,287 thousand in the same period of 2022[101]. - The total amount of other payables to joint ventures and associates decreased to RMB 10,540 thousand as of June 30, 2023, from RMB 11,951 thousand as of December 31, 2022, indicating a decline of about 11.8%[149]. Governance and Management Changes - The company appointed a new CEO, Wang Jianhui, effective June 2, 2023, following the resignation of the previous CEO, Kong Jianan[81]. - The company has maintained compliance with the Corporate Governance Code, with some deviations noted regarding attendance at shareholder meetings[79]. - The company's governance practices are under continuous review to ensure adherence to the Corporate Governance Code[79]. - The company did not declare any interim dividend for the six months ended June 30, 2023[78]. Shareholder Information - As of June 30, 2023, the total number of shares held by executive directors and senior management amounts to 1,071,654,546 shares, representing 52.90% of the issued shares[67]. - The total number of shares issued by the company as of June 30, 2023, is 2,025,858,916 shares[67]. - The major shareholders collectively hold 1,069,354,546 shares, representing 52.79% of the total issued shares as of June 30, 2023[75]. - The company has a dividend yield of 1.16% as part of its stock option valuation[73].

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Interim Results Summary](index=1&type=section&id=Interim%20Results%20Summary) For the six months ended June 30, 2023, the Group's revenue decreased by 8.5% year-on-year to RMB1,888.1 million, and gross profit decreased by 4.2% to RMB596.1 million; profit for the period was RMB81.6 million, and core net profit decreased by approximately 23.0% year-on-year to RMB257.8 million | Metric | For the six months ended June 30, 2023 (RMB million) | For the same period in 2022 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,888.1 | 2,064.3 | -8.5 | | Gross Profit | 596.1 | 622.1 | -4.2 | | Profit for the Period | 81.6 | 329.6 | -75.2 | | Core Net Profit | 257.8 | 334.8 | -23.0 | [Change of Company Secretary and Authorized Representative](index=1&type=section&id=Change%20of%20Company%20Secretary%20and%20Authorized%20Representative) Ms. Chan Ching Nga has resigned as company secretary and authorized representative, effective August 29, 2023; Mr. You Jinquan has been appointed as the new company secretary and authorized representative, effective the same day - Ms. Chan Ching Nga resigned as company secretary and authorized representative, effective **August 29, 2023**[140](index=140&type=chunk) - Mr. You Jinquan was appointed as company secretary and authorized representative, effective **August 29, 2023**[140](index=140&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2023, the Group's revenue was RMB1,888,073 thousand, cost of sales was RMB1,291,961 thousand, and gross profit was RMB596,112 thousand; profit for the period was RMB81,557 thousand, a significant decrease from RMB329,632 thousand in the prior period | Metric | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,888,073 | 2,064,331 | | Cost of sales | (1,291,961) | (1,442,265) | | Gross profit | 596,112 | 622,066 | | Other income and gains | 26,404 | 37,258 | | Selling and distribution expenses | (1,980) | (978) | | Administrative expenses | (262,081) | (232,627) | | Other expenses, net | (219,678) | (10,357) | | Finance costs | (17,647) | (1,443) | | Profit before tax | 123,133 | 415,656 | | Income tax expense | (41,576) | (86,024) | | Profit for the period | 81,557 | 329,632 | | Profit attributable to owners of the parent | 62,570 | 313,873 | | Profit attributable to non-controlling interests | 18,987 | 15,759 | | Basic earnings per share (RMB cents) | 3 | 16 | | Diluted earnings per share (RMB cents) | 3 | 16 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2023, the Group's profit for the period was RMB81,557 thousand; other comprehensive loss primarily resulted from exchange differences on translating overseas operations, leading to a total comprehensive income of RMB110,766 thousand for the period | Metric | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 81,557 | 329,632 | | Exchange differences on translating overseas operations | (45,938) | (95,132) | | Exchange differences on translating the Company | 75,147 | 103,496 | | Other comprehensive income for the period | 29,209 | 8,364 | | Total comprehensive income for the period | 110,766 | 337,996 | | Total comprehensive income attributable to owners of the parent | 91,779 | 322,237 | | Total comprehensive income attributable to non-controlling interests | 18,987 | 15,759 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total non-current assets were RMB2,441,368 thousand, total current assets were RMB4,708,385 thousand; total current liabilities were RMB2,749,767 thousand, and net assets were RMB3,749,523 thousand | Metric | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 79,080 | 87,868 | | Goodwill | 1,520,021 | 1,599,744 | | Other intangible assets | 632,679 | 698,583 | | Total non-current assets | 2,441,368 | 2,560,486 | | **Current assets** | | | | Trade receivables | 2,319,223 | 2,052,449 | | Cash and cash equivalents | 1,652,200 | 1,847,501 | | Total current assets | 4,708,385 | 4,384,205 | | **Current liabilities** | | | | Trade payables | 567,492 | 575,369 | | Interest-bearing bank and other borrowings | 151,826 | 174,244 | | Total current liabilities | 2,749,767 | 2,960,307 | | **Non-current liabilities** | | | | Interest-bearing bank and other borrowings | 490,395 | 377,306 | | Total non-current liabilities | 650,463 | 555,865 | | **Total equity** | 3,749,523 | 3,428,519 | [Notes to Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Information) [Company and Group Information](index=6&type=section&id=Company%20and%20Group%20Information) The Company was incorporated in the Cayman Islands on September 11, 2019, as an investment holding company; for the six months ended June 30, 2023, the Group primarily provided residential property management and non-residential property management and commercial operation services in China - The Company was incorporated in the Cayman Islands on **September 11, 2019**, as an investment holding company[16](index=16&type=chunk) - For the six months ended June 30, 2023, the Group primarily provided residential property management services and non-residential property management and commercial operation services in China[16](index=16&type=chunk) [Basis of Presentation and Changes in Accounting Policies](index=6&type=section&id=Basis%20of%20Presentation%20and%20Changes%20in%20Accounting%20Policies) The interim financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2022; new and revised standards adopted for the first time in this period had no significant financial impact on the interim financial information - The interim financial information is prepared in accordance with **HKAS 34** and should be read in conjunction with the annual consolidated financial statements for the year ended **December 31, 2022**[17](index=17&type=chunk) - New and revised standards adopted for the first time in this period had no significant financial impact on the interim financial information[1](index=1&type=chunk) [Operating Segment Information](index=7&type=section&id=Operating%20Segment%20Information) The Group is organized into two reportable operating segments: residential property management services and non-residential property management and commercial operation services; for the six months ended June 30, 2023, total revenue was RMB1,888,073 thousand, and segment results were RMB406,502 thousand, with all revenue and non-current assets derived from China - The Group is organized into two reportable operating segments: residential property management services and non-residential property management and commercial operation services[2](index=2&type=chunk)[137](index=137&type=chunk) | Metric | Residential property management services (RMB thousand) | Non-residential property management and commercial operation services (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | **For the six months ended June 30, 2023** | | | | | Segment revenue | 849,630 | 1,038,443 | 1,888,073 | | Segment results | 224,893 | 181,609 | 406,502 | | Profit before tax | | | 123,133 | | Profit for the period | | | 81,557 | | **For the six months ended June 30, 2022** | | | | | Segment revenue | 951,801 | 1,112,530 | 2,064,331 | | Segment results | 272,433 | 221,667 | 494,100 | | Profit before tax | | | 415,656 | | Profit for the period | | | 329,632 | - All the Group's revenue from customers and non-current assets are derived solely from its operations and services provided in China[8](index=8&type=chunk) - For the six months ended June 30, 2023, revenue from KWG Group Holdings Limited and its associates was approximately **RMB350,392,000**, a decrease from approximately **RMB469,417,000** in the same period of 2022[9](index=9&type=chunk) [Revenue and Contract Liabilities](index=9&type=section&id=Revenue%20and%20Contract%20Liabilities) For the six months ended June 30, 2023, total revenue from contracts with customers was RMB1,888,073 thousand, primarily from residential property management services and non-residential property management and commercial operation services; contract liabilities, mainly from customer prepayments, amounted to RMB256,887 thousand as of June 30, 2023 | Service Category | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | **Residential property management services** | | | | Pre-sale management services | 98,912 | 134,361 | | Property management services | 653,398 | 625,844 | | Community value-added services | 97,320 | 191,596 | | Subtotal | 849,630 | 951,801 | | **Non-residential property management and commercial operation services** | | | | Pre-sale management services | 11,746 | 18,144 | | Property management services | 908,573 | 988,482 | | Commercial operation services | 60,709 | 61,186 | | Other value-added services | 57,415 | 44,718 | | Subtotal | 1,038,443 | 1,112,530 | | **Total revenue from contracts with customers** | 1,888,073 | 2,064,331 | | Revenue recognized over time | 1,803,293 | 1,889,533 | | Revenue recognized at a point in time | 84,780 | 174,798 | | Source of Contract Liabilities | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Third parties | 252,656 | 223,113 | | Related parties | 4,231 | 2,832 | | Total | 256,887 | 225,945 | - Contract liabilities primarily arise from customer prepayments for services not yet rendered[120](index=120&type=chunk) [Other Income and Gains](index=10&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2023, total other income and gains were RMB26,404 thousand, a decrease from RMB37,258 thousand in the prior period, mainly comprising government grants of RMB13,709 thousand and VAT tax incentives of RMB6,458 thousand | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 1,788 | 4,338 | | Government grants | 13,709 | 14,259 | | Net gain on disposal of items of property, plant and equipment | 185 | 94 | | Overdue penalty income | 1,492 | 2,588 | | VAT tax incentives | 6,458 | 10,128 | | Others | 2,772 | 5,851 | | Total | 26,404 | 37,258 | [Profit Before Tax](index=11&type=section&id=Profit%20Before%20Tax) For the six months ended June 30, 2023, profit before tax was RMB123,133 thousand; key deductions included cost of services rendered of RMB1,291,961 thousand, employee benefit expenses of RMB608,970 thousand, impairment loss on goodwill of RMB79,723 thousand, and impairment loss on trade receivables of RMB119,038 thousand | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Cost of services rendered | 1,291,961 | 1,442,265 | | Depreciation of property, plant and equipment | 11,083 | 9,895 | | Amortisation of other intangible assets | 66,341 | 40,718 | | Employee benefit expenses | 608,970 | 781,396 | | Impairment loss on goodwill | 79,723 | — | | Impairment loss on trade receivables | 119,038 | 12,740 | [Income Tax](index=11&type=section&id=Income%20Tax) For the six months ended June 30, 2023, the Group's income tax expense was RMB41,576 thousand, a decrease from RMB86,024 thousand in the prior period; income tax is primarily calculated at a 25% rate for China operations, with some subsidiaries enjoying a preferential 15% corporate income tax rate | Item | For the six months ended June 30, 2023 (RMB thousand) | For the six months ended June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Current income tax | 97,267 | 95,065 | | Deferred income tax | (55,691) | (9,041) | | Total | 41,576 | 86,024 | - Income tax provision for the Group's subsidiaries established in China for their operations in China is calculated at a tax rate of **25%**, with some subsidiaries enjoying a preferential corporate income tax rate of **15%**[124](index=124&type=chunk) [Earnings Per Share Attributable to Owners of the Parent](index=12&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2023, both basic and diluted earnings per share attributable to owners of the parent were RMB3 cents, a significant decrease from RMB16 cents in the prior period | Metric | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 | | :--- | :--- | :--- | | Profit attributable to owners of the parent (RMB thousand) | 62,570 | 313,873 | | Weighted average number of shares in issue | 2,025,858,916 | 2,017,110,233 | | Basic earnings per share (RMB cents) | 3 | 16 | | Diluted earnings per share (RMB cents) | 3 | 16 | [Trade Receivables](index=12&type=section&id=Trade%20Receivables) As of June 30, 2023, the Group's total trade receivables were RMB2,319,223 thousand, an increase of 13.0% from December 31, 2022; related party receivables amounted to RMB1,554,782 thousand, and third-party receivables were RMB1,470,795 thousand | Item | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Related parties | 1,554,782 | 1,387,036 | | Third parties | 1,470,795 | 1,255,874 | | Impairment allowance for trade receivables | (706,354) | (590,461) | | Trade receivables, net | 2,319,223 | 2,052,449 | | Aging | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 1,512,279 | 1,356,263 | | 1 to 2 years | 641,469 | 579,389 | | 2 to 3 years | 138,011 | 107,517 | | Over 3 years | 27,464 | 9,280 | | Total | 2,319,223 | 2,052,449 | [Trade Payables](index=13&type=section&id=Trade%20Payables) As of June 30, 2023, the Group's total trade payables were RMB567,492 thousand, a slight decrease of 1.4% from December 31, 2022, with third-party payables accounting for the vast majority at RMB561,489 thousand | Item | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Related parties | 6,003 | 6,665 | | Third parties | 561,489 | 568,704 | | Total | 567,492 | 575,369 | | Aging | As of June 30, 2023 (RMB thousand) | As of December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 481,304 | 507,502 | | 1 to 2 years | 74,045 | 56,755 | | 2 to 3 years | 7,012 | 7,277 | | Over 3 years | 5,131 | 3,835 | | Total | 567,492 | 575,369 | [Dividends](index=13&type=section&id=Dividends) The Board resolved not to declare any interim dividend for the six months ended June 30, 2023 - The Board resolved not to declare any interim dividend for the six months ended **June 30, 2023**[132](index=132&type=chunk) [Chairman's Statement](index=14&type=section&id=Chairman's%20Statement) [Overview](index=14&type=section&id=Overview) In the first half of 2023, facing domestic economic fluctuations and a sluggish real estate industry, the Group actively responded to challenges, with revenue decreasing by 8.5% year-on-year to RMB1,888.1 million; gross profit margin increased by 1.5 percentage points to 31.6%, and core net profit was RMB257.8 million, as the Group is in an adjustment year, focusing on de-risking, diversification, and efficiency improvement - In the first half of 2023, the Group's revenue decreased by **8.5%** year-on-year to approximately **RMB1,888.1 million**, primarily due to a slight decrease in GFA under management and reduced revenue from pre-sale management services and community value-added services[61](index=61&type=chunk) - For the six months ended June 30, 2023, the gross profit margin was approximately **31.6%**, an increase of **1.5 percentage points** compared to the same period last year[61](index=61&type=chunk) - Core net profit reached approximately **RMB257.8 million**[61](index=61&type=chunk) - The Group is in an adjustment year, continuously focusing on de-risking, diversification, and efficiency improvement, actively adjusting high-risk, low-efficiency projects, and optimizing business direction towards non-residential and existing residential markets[61](index=61&type=chunk) [Optimizing Structure for Sustainable Development, Steadfast in Market-Oriented Approach](index=15&type=section&id=Optimizing%20Structure%20for%20Sustainable%20Development) The Group actively optimized its business structure, reducing reliance on developer-related businesses and increasing the proportion of third-party business; in the first half of 2023, revenue from third parties increased from 77.3% to 81.4%, as the Group remains committed to market-oriented development, continuous full-spectrum business layout, and deep cultivation in key regions, focusing on first and second-tier cities - The Group actively optimized its business structure, reducing developer-related businesses such as sales venue services and sales agency services, and increasing the proportion of third-party business[63](index=63&type=chunk) - In the first half of 2023, the proportion of revenue from third parties increased from **77.3%** in the same period last year to **81.4%**[63](index=63&type=chunk) - The Group is committed to a market-oriented approach, continuously implementing a full-spectrum business layout, providing customized service solutions for residential, office buildings, shopping malls, municipal agencies, hospitals, and schools[63](index=63&type=chunk) - Regionally, the Group deeply cultivates key areas, focusing on first and second-tier cities with higher commercial activity levels[63](index=63&type=chunk) - As of June 30, 2023, the Group's GFA under management and contracted GFA were **205.4 million square meters** and **278.1 million square meters**, respectively, with third-party project management GFA reaching **179.2 million square meters**, accounting for **87.3%**[19](index=19&type=chunk) [Seizing Consumption Recovery Opportunities, Lean Operation of Commercial Assets](index=16&type=section&id=Seizing%20Consumption%20Recovery%20Opportunities,%20Lean%20Operation%20of%20Commercial%20Assets) Facing the normalization of China's economy and intensified competition in commercial asset operations, the Group seizes consumption recovery opportunities, enhancing the resilience of commercial assets through innovation and transformation; for shopping malls, it adjusts business formats based on data insights to improve customer consumption experience, and for office buildings, it optimizes tenant structure and refines operations to capture growth dividends in the existing stock era - The Group will seize the opportunity of consumption recovery, and through innovation and transformation, fully unleash the anti-risk resilience of commercial assets to navigate cycles[21](index=21&type=chunk) - For shopping malls, leveraging the operating team's insights into consumers, the Group adjusts weak business formats, deploys strong business formats and brands, and enhances customer consumption experience[22](index=22&type=chunk) - For office buildings, the Group actively optimizes tenant structure and captures operating growth dividends in the existing stock era through refined operations[22](index=22&type=chunk) [Adhering to Digital Transformation, Enhancing Space Operation Efficiency](index=17&type=section&id=Adhering%20to%20Digital%20Transformation,%20Enhancing%20Space%20Operation%20Efficiency) The Group is committed to digital transformation, building a digital commercial ecosystem centered on consumers; in May 2023, it formed a strategic partnership with Tencent Cloud to jointly build "future communities," leveraging IoT, cloud computing, big data, and AI to improve service quality and operational efficiency, and using digital tools to transform quality customer service experience into algorithmic models for automated work order flow, empowering employees to provide better services - The Group focuses on building new business systems and designing new service frameworks, reconstructing a digital commercial ecosystem centered on consumers[24](index=24&type=chunk) - In May 2023, the Group entered into a strategic partnership with Tencent Cloud Computing (Beijing) Co., Ltd. to collaborate on digital transformation of property services and jointly build "future communities"[24](index=24&type=chunk) - Leveraging IoT, cloud computing, big data, and AI to improve quality and efficiency, promoting enterprise transformation and upgrading, and providing customers with high-quality service experiences[24](index=24&type=chunk) - The Group utilizes advanced digital tools to train and distill high-quality customer service experience into algorithmic models, enabling automated work order flow and empowering employees to provide better services to customers[25](index=25&type=chunk) [Future Outlook](index=18&type=section&id=Future%20Outlook) Looking ahead to the second half of 2023, the Group will continue to build its business foundation, properly manage the relationships between self-reliance and open cooperation, scale expansion and quality growth, and short-term returns and long-term development, to promote high-quality and healthy development - In the second half of 2023, the Group will continue to build its business foundation, properly managing the relationship between self-reliance and open cooperation[27](index=27&type=chunk) - Properly managing the relationship between scale expansion and quality growth, as well as the relationship between short-term returns and long-term development, to promote high-quality and healthy development[27](index=27&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=19&type=section&id=Business%20Review) In the first half of 2023, facing a challenging market environment, the Group actively reduced business risks and improved operational efficiency; total revenue decreased by 8.5% year-on-year to RMB1,888.1 million, primarily due to reduced revenue from pre-sale management services and community value-added services under real estate market pressure; the Group proactively withdrew from high-risk projects, optimized project portfolio quality, and continued to deepen its presence in the Greater Bay Area and Yangtze River Delta markets, with third-party projects accounting for 87.3% of GFA under management - As of June 30, 2023, the Group provided property management, commercial operation, and value-added services in **134 cities** in China, with a total contracted GFA of approximately **278.1 million square meters** and a total GFA under management of approximately **205.4 million square meters**[29](index=29&type=chunk) - The slight decrease in GFA under management was primarily due to the Group's proactive management of its project portfolio, withdrawing from high-risk projects with safety hazards[29](index=29&type=chunk) - In the first half of 2023, the Group achieved total revenue of **RMB1,888.1 million**, a year-on-year decrease of **8.5%**, mainly due to reduced revenue from pre-sale management services and community value-added services, affected by real estate market pressure[30](index=30&type=chunk) - Third-party projects accounted for **87.3%** of the Group's GFA under management[43](index=43&type=chunk) [Business Model](index=20&type=section&id=Business%20Model) The Group's business model is divided into two major segments: residential property management services and non-residential property management and commercial operation services; residential services include pre-sale management, property management, and community value-added services, while non-residential services cover pre-sale management, commercial property management, public and urban property services, commercial operations, and other value-added services; the Group is committed to digital efficiency enhancement and collaborates with Tencent Cloud to establish an innovation laboratory for the property management industry - The Group's revenue primarily derives from two major business segments: (i) residential property management services; and (ii) non-residential property management and commercial operation services[33](index=33&type=chunk) - Residential property management services include pre-sale management services, property management services, and community value-added services[35](index=35&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Non-residential property management and commercial operation services include pre-sale management services, property management services for commercial properties, public and urban property services, commercial operation services, and other value-added services[36](index=36&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - In May 2023, the Group and Tencent Cloud announced a strategic partnership to jointly establish the first innovation laboratory for the property management industry, collaborating on the digital transformation of property management services[37](index=37&type=chunk) | Service Category | For the six months ended June 30, 2023 (RMB thousand) | Proportion (%) | For the six months ended June 30, 2022 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | **Residential property management services** | | | | | | Pre-sale management services | 98,912 | 5.2 | 134,361 | 6.5 | | Property management services | 653,398 | 34.6 | 625,844 | 30.3 | | Community value-added services | 97,320 | 5.2 | 191,596 | 9.3 | | Subtotal | 849,630 | 45.0 | 951,801 | 46.1 | | **Non-residential property management and commercial operation services** | | | | | | Pre-sale management services | 11,746 | 0.6 | 18,144 | 0.9 | | Commercial property management services | 224,517 | 11.9 | 236,272 | 11.4 | | Public and urban area property management services | 684,056 | 36.2 | 752,210 | 36.4 | | Commercial operation services | 60,709 | 3.2 | 61,186 | 3.0 | | Other value-added services | 57,415 | 3.1 | 44,718 | 2.2 | | Subtotal | 1,038,443 | 55.0 | 1,112,530 | 53.9 | | **Total** | 1,888,073 | 100.0 | 2,064,331 | 100.0 | [Business Development](index=23&type=section&id=Business%20Development) As of June 30, 2023, the Group's total GFA under management was 205.4 million square meters, a slight decrease mainly due to proactive withdrawal from high-risk projects; the Group adopted a strategy of "deep cultivation in key regions + third-party expansion + multi-format layout," with GFA under management in the Greater Bay Area and Yangtze River Delta accounting for 58.9%, and third-party projects accounting for 87.3%; residential property management services revenue decreased by 10.7% year-on-year, and non-residential property management and commercial operation services revenue decreased by 6.7%, primarily affected by real estate market pressure and contract term adjustments - As of June 30, 2023, the Group's total GFA under management reached **205.4 million square meters**, a slight decrease compared to **215.5 million square meters** as of December 31, 2022, primarily due to proactive management of the project portfolio and withdrawal from high-risk projects[43](index=43&type=chunk) - The Group adopted a strategy of "deep cultivation in key regions + third-party expansion + multi-format layout" to optimize its project portfolio and structure[43](index=43&type=chunk) - As of June 30, 2023, the GFA under management in the Greater Bay Area and Yangtze River Delta regions accounted for **58.9%** of the Group's total[43](index=43&type=chunk) - As of June 30, 2023, third-party projects accounted for **87.3%** of the Group's GFA under management[43](index=43&type=chunk) - Revenue from the residential property management services segment decreased by **10.7%** year-on-year to approximately **RMB849.6 million**, mainly due to the continuous pressure on the real estate market, leading to a decrease in the number of residential property sales offices under management and reduced revenue from community value-added services[46](index=46&type=chunk) - Revenue from the non-residential property management services segment decreased by **6.7%** year-on-year to approximately **RMB1,038.4 million**, primarily due to the adjustment of terms for certain management service contracts from a gross basis to a net basis upon renewal[52](index=52&type=chunk) | Region | For the six months ended June 30, 2023 Revenue (RMB thousand) | For the six months ended June 30, 2023 GFA under management (thousand square meters) | For the six months ended June 30, 2022 Revenue (RMB thousand) | For the six months ended June 30, 2022 GFA under management (thousand square meters) | | :--- | :--- | :--- | :--- | :--- | | **Residential Properties** | | | | | | Greater Bay Area | 317,268 | 25,062 | 361,297 | 25,106 | | Yangtze River Delta Region | 166,520 | 24,520 | 199,087 | 22,061 | | Central-Western Region and Hainan | 321,896 | 51,911 | 329,713 | 50,995 | | Bohai Rim Economic Circle | 43,946 | 3,773 | 61,704 | 3,322 | | Total | 849,630 | 105,266 | 951,801 | 101,484 | | **Non-residential Properties** | | | | | | Greater Bay Area | 461,250 | 44,557 | 527,596 | 53,688 | | Yangtze River Delta Region | 309,925 | 26,831 | 306,830 | 27,112 | | Central-Western Region and Hainan | 131,312 | 10,315 | 141,206 | 13,378 | | Bohai Rim Economic Circle | 135,956 | 18,405 | 136,898 | 18,553 | | Total | 1,038,443 | 100,108 | 1,112,530 | 112,731 | [Financial Review](index=28&type=section&id=Financial%20Review) The Group's total revenue for the first half of 2023 was RMB1,888,073 thousand, a year-on-year decrease of 8.5%; cost of sales decreased by 10.4%, leading to an improved gross profit margin of 31.6%; other income and gains decreased, while administrative expenses increased by 12.7% due to amortization of intangible assets; other expenses, net, significantly increased by 2,012.5%, mainly due to impairment losses on trade receivables and goodwill; income tax expense decreased - The Group's total revenue was **RMB1,888,073 thousand**, a year-on-year decrease of **8.5%**[66](index=66&type=chunk) - Cost of sales was approximately **RMB1,292.0 million**, a decrease of **10.4%** compared to the same period in 2022, with a larger decline than revenue, reflecting improved operations[80](index=80&type=chunk) - Gross profit was approximately **RMB596.1 million**, a year-on-year decrease of **4.2%**; gross profit margin was **31.6%**, an increase from **30.1%** in the prior period[82](index=82&type=chunk) - Other income and gains were approximately **RMB26.4 million**, a year-on-year decrease of **29.2%**, mainly comprising government grants and VAT tax incentives[83](index=83&type=chunk) - Administrative expenses were approximately **RMB262.1 million**, a year-on-year increase of **12.7%**, primarily reflecting the amortization of intangible assets arising from acquisitions of subsidiaries in 2022 or earlier[84](index=84&type=chunk) - Other expenses, net, were approximately **RMB219.7 million**, a year-on-year increase of **2,012.5%**, mainly including impairment loss on trade receivables of **RMB119.0 million** and impairment loss on goodwill of **RMB79.7 million**[85](index=85&type=chunk) - Income tax was approximately **RMB41.6 million**, a decrease from **RMB86.0 million** in the prior period[87](index=87&type=chunk) [Revenue](index=28&type=section&id=Revenue) The Group's revenue primarily derives from residential property management services and non-residential property management and commercial operation services; residential property management services revenue decreased by 10.7%, mainly affected by reduced pre-sale management services and community value-added services; non-residential property management and commercial operation services revenue decreased by 6.7%, primarily due to adjustments in property management service contract terms, though other value-added services revenue increased | Business Segment | For the six months ended June 30, 2023 (RMB thousand) | Proportion (%) | For the six months ended June 30, 2022 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Residential property management services | 849,630 | 45.0 | 951,801 | 46.1 | | Non-residential property management and commercial operation services | 1,038,443 | 55.0 | 1,112,530 | 53.9 | | Total | 1,888,073 | 100.0 | 2,064,331 | 100.0 | | Residential Property Management Services Line | For the six months ended June 30, 2023 (RMB thousand) | Proportion (%) | For the six months ended June 30, 2022 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Pre-sale management services | 98,912 | 11.6 | 134,361 | 14.1 | | Property management services | 653,398 | 76.9 | 625,844 | 65.8 | | Community value-added services | 97,320 | 11.5 | 191,596 | 20.1 | | Total | 849,630 | 100.0 | 951,801 | 100.0 | - Revenue from pre-sale management services under the residential property management services segment decreased, mainly due to continuous pressure on the real estate market, leading to a reduction in the number of residential property sales offices under management[71](index=71&type=chunk) - Revenue from property management services under the residential property management services segment increased, mainly due to an increase in GFA under management for residential properties[72](index=72&type=chunk) - Revenue from community value-added services under the residential property management services segment decreased, mainly due to continuous pressure on the real estate market[73](index=73&type=chunk) | Non-residential Property Management and Commercial Operation Services Line | For the six months ended June 30, 2023 (RMB thousand) | Proportion (%) | For the six months ended June 30, 2022 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Pre-sale management services | 11,746 | 1.1 | 18,144 | 1.6 | | Property management services | 908,573 | 87.5 | 988,482 | 88.9 | | Commercial operation services | 60,709 | 5.9 | 61,186 | 5.5 | | Other value-added services | 57,415 | 5.5 | 44,718 | 4.0 | | Total | 1,038,443 | 100.0 | 1,112,530 | 100.0 | - Revenue from property management services under the non-residential property management and commercial operation services segment decreased, mainly because the terms of certain management service contracts were adjusted from a gross basis to a net basis upon renewal[77](index=77&type=chunk) - Revenue from other value-added services under the non-residential property management and commercial operation services segment increased, mainly due to the Group's business diversification[79](index=79&type=chunk) [Financial Position and Capital Structure](index=32&type=section&id=Financial%20Position%20and%20Capital%20Structure) As of June 30, 2023, the Group's total assets were RMB7,149.8 million, and total liabilities were RMB3,400.2 million; the current ratio was 1.71, and cash and cash equivalents were approximately RMB1,652.2 million, a decrease of 10.6% from the end of 2022; total borrowings were approximately RMB642.2 million, primarily denominated in RMB; the Group was in a net cash position with no significant contingent liabilities; net proceeds from the listing were mainly used for strategic acquisitions, upgrading smart service systems, and diversifying value-added services - As of June 30, 2023, the Group's total assets were approximately **RMB7,149.8 million**, and total liabilities were approximately **RMB3,400.2 million**[88](index=88&type=chunk) - As of June 30, 2023, the Group's current ratio was **1.71** (December 31, 2022: 1.48)[88](index=88&type=chunk) - As of June 30, 2023, the Group's cash and cash equivalents were approximately **RMB1,652.2 million**, a decrease of approximately **10.6%** from December 31, 2022[89](index=89&type=chunk) - As of June 30, 2023, the Group's total borrowings were approximately **RMB642.2 million**, of which approximately **RMB151.8 million** is repayable within 1 year[98](index=98&type=chunk) - The Group was in a net cash position as of June 30, 2023, and December 31, 2022, thus the gearing ratio is not applicable[94](index=94&type=chunk) - As of June 30, 2023, among the net proceeds from the listing, **RMB4.9 million** was utilized for upgrading smart service systems, with **RMB111.2 million** remaining unutilized or without immediate plans[103](index=103&type=chunk) [Employees and Remuneration Policy](index=35&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group had approximately 18,000 employees; remuneration policy is based on market levels, employee performance, and contributions, offering comprehensive benefit plans and career development opportunities, including performance bonuses, share options, retirement schemes, medical benefits, and training courses - As of June 30, 2023, the Group had approximately **18,000 employees**[106](index=106&type=chunk) - Employee remuneration is determined based on market levels, individual employee performance, and contributions, with a widespread adoption of performance-based bonuses[106](index=106&type=chunk) - The Group provides comprehensive benefit plans and career development opportunities, including performance bonuses, share options, retirement schemes, medical benefits, and internal/external training courses[106](index=106&type=chunk) [Interim Dividends](index=35&type=section&id=Interim%20Dividends) The Board resolved not to declare any interim dividend for the six months ended June 30, 2023 - The Board resolved not to declare any interim dividend for the six months ended **June 30, 2023**[107](index=107&type=chunk) [Other Information](index=35&type=section&id=Other%20Information) [Corporate Governance](index=35&type=section&id=Corporate%20Governance) The Group is committed to maintaining high-quality corporate governance and complies with the Corporate Governance Code set out in Appendix 14 of the Listing Rules; Mr. Kong Kin Ming, the Chairman of the Board, was unable to attend the EGM on January 13, 2023, and the AGM on June 1, 2023, due to other engagements, constituting a deviation from the code provisions - The Company has applied good corporate governance principles and complied with the code provisions in Part 2 of the Corporate Governance Code set out in Appendix 14 of the Listing Rules of the Stock Exchange[108](index=108&type=chunk) - Mr. Kong Kin Ming, the Chairman of the Board, was unable to attend the extraordinary general meeting held on **January 13, 2023**, and the annual general meeting held on **June 1, 2023**, due to other engagements, constituting a deviation from code provisions C.1.6 and F.2.2 of Part 2 of the Corporate Governance Code[108](index=108&type=chunk) [Standard Code for Securities Transactions](index=36&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules; all Directors confirmed compliance with the Model Code for the six months ended June 30, 2023 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules[110](index=110&type=chunk) - All Directors confirmed their compliance with the Model Code for the six months ended **June 30, 2023**[110](index=110&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=36&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended **June 30, 2023**, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[111](index=111&type=chunk) [Audit Committee](index=36&type=section&id=Audit%20Committee) The Audit Committee comprises three independent non-executive directors and has reviewed the interim financial information - The Audit Committee comprises **three members**, all of whom are independent non-executive directors[112](index=112&type=chunk) - The Audit Committee has reviewed the interim financial information[113](index=113&type=chunk) [Interim Report](index=36&type=section&id=Interim%20Report) The Company's 2023 interim report will be published on the Company's website and the HKEXnews website by the end of September 2023, and printed copies will be dispatched to shareholders - The Company's 2023 interim report will be published on the Company's website (www.kwgliving.com) and the HKEXnews website (www.hkexnews.hk) by the end of **September 2023**, and printed copies will be dispatched to shareholders[114](index=114&type=chunk) [Change of Company Secretary and Authorized Representative](index=36&type=section&id=Change%20of%20Company%20Secretary%20and%20Authorized%20Representative_detail) Ms. Chan Ching Nga resigned as company secretary and authorized representative, effective August 29, 2023; Mr. You Jinquan was appointed as the new company secretary and authorized representative, having joined the Group in March 2021 as Financial Controller with extensive financial reporting experience - Ms. Chan Ching Nga resigned as the Company's company secretary and ceased to be the authorized representative, effective **August 29, 2023**[115](index=115&type=chunk) - Mr. You Jinquan was appointed as company secretary and authorized representative, effective **August 29, 2023**[117](index=117&type=chunk) - Mr. You Jinquan joined the Group in **March 2021** as Financial Controller, responsible for financial reporting, and previously served as Financial Controller at KWG Group Holdings Limited[117](index=117&type=chunk)

Acquisition and Expansion - The company completed the acquisition of 50% equity in Guangdong Teli Clean for a cash consideration of RMB 165 million, which has been consolidated into the group's financial statements[1]. - The acquisition of Guangdong Teli Clean, primarily engaged in urban and rural environmental cleaning services, has expanded the company's service offerings[1]. - The company is focused on expanding its market presence through strategic acquisitions and partnerships in the environmental services sector[1]. - The company expanded its service offerings by acquiring Guangdong Teli Clean Environmental Engineering Co., Ltd. in January 2022, entering the urban services sector[182]. Financial Performance - The company’s financial performance has been positively impacted by the integration of Guangdong Teli Clean's financial results into its consolidated financial statements[1]. - The company’s revenue for the year ended December 31, 2022, was RMB 4,025.7 million, representing a 23.7% increase from RMB 3,255.4 million in 2021[151]. - Gross profit for the same period was RMB 1,240.6 million, a slight increase of 1.2% compared to RMB 1,226.1 million in 2021[151]. - The net profit for the year was RMB 59.9 million, a significant decrease of 91.3% from RMB 684.3 million in the previous year[151]. - The total revenue for the year ended December 31, 2022, was RMB 4,025,711 thousand, an increase from RMB 3,255,446 thousand in 2021, representing a growth of approximately 23.6%[199]. Share Incentive and Compliance - As of December 31, 2022, the company reported that the total number of shares issued under the share incentive plan was approximately 100,890,511 shares, representing about 4.98% of the total issued shares[19]. - The share incentive plan allows for the issuance of shares not exceeding 1% of the total issued shares at the grant date[12]. - The company has confirmed compliance with the relevant regulations regarding related party transactions as per the listing rules[28]. - The company has adhered to a non-competition agreement established on October 14, 2020, with its controlling shareholders[27]. Operational Efficiency and Technology - The company is focusing on integrating technology to improve service efficiency and quality, thereby enhancing its market position and competitiveness[150]. - The company aims to enhance customer service experience and create value for shareholders by transitioning from a full-service model to a full-ecosystem approach[140]. - The company aims to deepen its digital transformation and upgrade its smart operation and management platform to enhance service quality and operational efficiency[171]. - The company has introduced smart project work order systems to empower frontline staff and improve management efficiency[171]. Market Presence and Strategy - The company has expanded its operations to 132 cities across 21 provinces, autonomous regions, and municipalities in China[140]. - The company is actively pursuing new strategies in urban services and property management to meet evolving market demands and regulatory standards[140]. - The company aims to increase market share in core areas and enhance penetration in key segments, focusing on urban service products for healthy growth[190]. - The company continues to focus on independent third-party market expansion as a key development strategy, leveraging high-quality services and a professional market team[200]. Awards and Recognition - The company received multiple awards in 2022, including being ranked TOP8 for property service excellence and TOP7 for financial performance among listed property service companies[135]. - The company was recognized as one of the "Top 14 Property Management Companies in China" by E-Han Think Tank, reflecting its comprehensive product and service capabilities[194]. - The company has received multiple awards, including being ranked among the top 15 property service companies in China by the China Index Academy in 2021[150]. Financial Management and Investments - The group allocated approximately HKD 705.7 million for strategic acquisitions and investments to expand its market share in residential property management services and other non-residential property management services[59]. - The company is seeking strategic acquisition and investment opportunities amounting to HKD 2,703.4 million[102]. - The total planned use of net proceeds amounts to HKD 2,913.1 million[102]. - The company has not utilized or has no plans for HKD 116.1 million of the net proceeds as of December 31, 2022[102]. Employee and Governance - The group had approximately 18,000 employees as of December 31, 2022, maintaining the same number as in 2021[56]. - The company has a structured governance framework with experienced directors providing oversight and strategic direction across various sectors[89]. - The company has arranged appropriate directors and officers liability insurance for potential legal actions faced by directors during the year[38].

Financial Performance - For the year ended December 31, 2022, the company's revenue was approximately RMB 4,025.7 million, representing a year-on-year growth of 23.7%[7] - The gross profit for the same period was approximately RMB 1,240.6 million, with a slight year-on-year increase of 1.2%[7] - The net profit for the year was approximately RMB 59.9 million, while the core net profit was approximately RMB 564.6 million, reflecting a year-on-year decrease of about 19.1%[7] - The sales cost for the year ended December 31, 2022, was approximately RMB 2,785.2 million, an increase of RMB 755.9 million or 37.2% compared to RMB 2,029.3 million in 2021[54] - The company reported a net profit of RMB 59,851 thousand for the year, a significant decrease from RMB 684,317 thousand in 2021, reflecting a decline of approximately 91.2%[104] - Total revenue for the year ended December 31, 2022, was RMB 4,025,711 thousand, an increase from RMB 3,255,446 thousand in 2021, representing a growth of approximately 23.6%[125] Revenue Breakdown - The revenue from property management services was RMB 1,283.5 million, accounting for 68.5% of total revenue, compared to 49.0% in the previous year[23] - The revenue from non-residential property management and commercial operation services increased from approximately RMB 1,057.3 million in 2021 to approximately RMB 1,866.3 million in 2022[27] - The total revenue from non-residential property management and commercial operation services increased from approximately RMB 1,318.9 million in 2021 to RMB 2,150.6 million in 2022, representing a growth of 63.0%[51] - The company’s community value-added services revenue was RMB 331.2 million, which accounted for 17.7% of total revenue, down from 31.2% in the previous year[23] - Revenue from residential property management services reached RMB 83,722,000 in 2022, up from RMB 58,385,000 in 2021, reflecting an increase of 43.5%[153] Operational Metrics - As of December 31, 2022, the total managed building area reached approximately 215.5 million square meters, and the total contracted building area was approximately 287.0 million square meters, with year-on-year growth of 4.5% and 3.3% respectively[7] - The company managed a total of 1,169 non-residential properties as of December 31, 2022, covering major cities including Beijing, Shanghai, Guangzhou, Chengdu, and Suzhou[21] - The company operates in 132 cities in China, managing a total contracted area of approximately 287.0 million square meters, with about 215.5 million square meters under management as of December 31, 2022[80] - The management area of third-party projects reached 189.7 million square meters, accounting for 88.0% of the total managed area[180] - The number of residential properties managed increased from 801 to 836, contributing to a managed building area growth from approximately 99.2 million square meters to 108.5 million square meters[199] Assets and Liabilities - Non-current assets totaled RMB 2,560,486 thousand in 2022, up from RMB 2,302,143 thousand in 2021, reflecting an increase of about 11.2%[106] - Current assets increased significantly to RMB 4,384,205 thousand in 2022 from RMB 2,699,928 thousand in 2021, marking a growth of approximately 62.3%[106] - The total liabilities increased to RMB 3,428,519 thousand in 2022 from RMB 3,515,886 thousand in 2021, showing a decrease of about 2.5%[107] - The total equity attributable to owners of the parent company was RMB 3,141,613 thousand in 2022, down from RMB 3,466,508 thousand in 2021, reflecting a decline of approximately 9.4%[107] Strategic Initiatives - The company plans to allocate approximately HKD 250 million for strategic acquisitions and investments to expand its market share in residential and non-residential property management services[73] - The company intends to invest approximately HKD 120.6 million to upgrade its smart service systems to enhance operational efficiency and service quality[73] - The company aims to strengthen its market share in the rigid residential market and expand its non-residential property business in 2023, focusing on high-end residential and commercial markets[94] - The company has implemented a digital learning platform that covered over 4,000 frontline employees and conducted more than 10 live classes, enhancing service capabilities and talent retention[93] - The company plans to deepen its digital transformation and upgrade its smart operation and management platform to enhance service quality and operational efficiency in 2023[94] Market Position and Recognition - The company received multiple accolades in 2022, including being ranked 9th in the "Top 9 Property Service Listed Companies in China" and 3rd in "Non-Residential Property Service" by the China Index Academy[80] - The company has strategically positioned itself to cater to emerging consumer trends, including health, pets, and the silver economy, with the opening of a major commercial project in Guangzhou Knowledge City exceeding 100,000 square meters[89] - The company has attracted well-known clients from emerging industries such as finance, 5G communications, and smart technology, contributing to new growth points in its commercial landscape[90] Challenges and Future Outlook - The company reported a significant increase in contract liabilities due to short-term advances received from customers for property management services, indicating growth in future revenue streams[139] - The group reported a pre-tax profit of RMB 3,412,000 in 2022, a significant decrease from RMB 674,843,000 in 2021[159] - The group achieved a net loss of RMB 143,415,000 in goodwill impairment for the year, compared to no losses in the previous year[157]

Financial Performance - For the six months ended June 30, 2022, the company achieved a revenue growth of 68.0% year-on-year, reaching approximately RMB 2,064.3 million[14]. - The company's gross profit for the same period was approximately RMB 622.1 million, with a net profit of approximately RMB 329.6 million, resulting in earnings per share of RMB 0.16[14]. - For the first half of 2022, total revenue was RMB 2,064.3 million, a significant increase from RMB 1,228.6 million in the same period of 2021, representing a year-on-year growth of 68%[30]. - The company reported a total revenue of RMB 2,064,331 thousand for the six months ended June 30, 2022, compared to RMB 1,228,554 thousand in the same period of 2021, marking a significant increase[56]. - The total comprehensive income for the period was RMB 337,996 thousand, an increase from RMB 292,932 thousand, marking a growth of 15.4%[120]. - The company reported a pre-tax profit of RMB 415,656 thousand for the six months ended June 30, 2022, compared to RMB 406,624 thousand in the same period of 2021, representing a growth of approximately 3.1%[130]. - Profit for the period was RMB 329,632 thousand, compared to RMB 318,883 thousand in 2021, reflecting a 3.7% increase[120]. Revenue Breakdown - Revenue from residential property management services accounted for 50.1% of total revenue, with property management services generating RMB 707.7 million, up from RMB 344.5 million in 2021[30]. - The revenue from residential property management services was RMB 1,033,662,000, while non-residential property management and commercial operation services generated RMB 1,030,669,000, indicating a balanced contribution from both segments[153]. - Non-residential property management and commercial operation services accounted for 49.9% of total revenue, with property management services generating RMB 906.6 million, up from RMB 288.0 million in 2021[30]. - Community value-added services generated RMB 191.6 million, contributing 9.3% to total revenue, down from 26.2% in the previous year[30]. Operational Expansion - The company expanded its operations to 147 cities across 22 provinces, autonomous regions, and municipalities, managing a total area of 214.2 million square meters[14]. - As of June 30, 2022, the group expanded its project portfolio by 334 new projects, covering residential, commercial, public construction, and urban services[20]. - The acquisition of Te Li Jie allowed the group to enter the urban services sector, successfully replicating its business model in the Southwest and Central China regions in the first half of 2022[19]. - The company plans to expand its market presence by establishing expert teams and flexible expansion mechanisms to overcome geographical and industrial boundaries[23]. Digital Transformation and Innovation - The group maintained a focus on digital transformation in commercial operations, launching a smart marketing platform to enhance online and offline service integration[21]. - The company emphasizes digital management capabilities and post-investment management to ensure organic integration across diverse business sectors[12]. - The company is focused on digital transformation and aims to enhance service quality through new technologies, targeting sustainable growth in the digital economy[23]. ESG and Corporate Governance - The company received several awards for its ESG initiatives, including "2022 Outstanding Enterprise in ESG Development" and "Green Leadership Award" in Asia[15]. - The company is committed to sustainable development and has received recognition for its ESG initiatives, including the "2022 China Property Service ESG Development Excellent Enterprise" award[24]. - The company is preparing for a "green" new era by investing in high-standard projects that align with government carbon reduction goals[19]. - The company is committed to maintaining high-quality corporate governance to protect shareholder interests and enhance corporate value[100]. Financial Position and Liabilities - Total assets increased to approximately RMB 7,524.7 million as of June 30, 2022, from RMB 5,002.1 million as of December 31, 2021[74]. - Total liabilities increased to approximately RMB 3,746.9 million as of June 30, 2022, from RMB 1,486.2 million as of December 31, 2021[74]. - The group had total borrowings of approximately RMB 663.7 million as of June 30, 2022, with RMB 156.7 million due within one year and RMB 507.0 million due within 2 to 5 years[75]. - The current ratio was 1.58 as of June 30, 2022, compared to 1.89 as of December 31, 2021[74]. Employee and Management - As of June 30, 2022, the group had approximately 20,000 employees, an increase from about 18,000 employees as of December 31, 2021[111]. - Total compensation for key management personnel increased to RMB 5,695 thousand for the six months ended June 30, 2022, compared to RMB 4,170 thousand in 2021, reflecting a rise of 36.5%[195]. Acquisitions and Investments - The company completed the acquisition of a 50% stake in Teli Clean for a cash consideration of RMB 165 million, which is now a non-wholly owned subsidiary[111]. - The acquisition of Youhuo Zhiliang Technology Co., Ltd. was completed in March 2022 for a total consideration of RMB 1,316,000,000, acquiring 80% equity, aimed at expanding property management operations in China[177]. - The acquisition of Guangdong Teli Clean Environmental Engineering Co., Ltd. was completed in January 2022 for RMB 165,000,000, increasing the group's stake to 55%[184]. Shareholder Information - Major shareholders collectively hold 1,069,354,546 shares, representing 53.01% of the issued voting shares as of June 30, 2022[96]. - The company did not declare any interim dividend for the six months ended June 30, 2022[99].

Financial Performance - Total revenue for the year ended December 31, 2021, was RMB 3,255,446 thousand, representing a 114.6% increase from RMB 1,517,227 thousand in 2020[11] - Gross profit for the same period was RMB 1,226,108 thousand, up 92.0% from RMB 638,548 thousand in 2020[11] - Net profit for the year was RMB 684,317 thousand, reflecting a 111.4% increase compared to RMB 323,689 thousand in 2020[11] - The company achieved a basic and diluted earnings per share of RMB 33, up 73.7% from RMB 19 in 2020[11] - For the fiscal year ending December 31, 2021, the company achieved a revenue of RMB 3,255.4 million, representing a significant year-on-year increase of 114.6%[21] - The net profit for the same period was RMB 684.3 million, reflecting a year-on-year growth of 111.4%[22] - The group achieved a 189.9% year-on-year increase in residential property and commercial operation revenue, reaching RMB 1,318.9 million by December 31, 2021[30] - Revenue from residential property management services amounted to RMB 1,936.6 million, accounting for 59.5% of total revenue, while non-residential property management and commercial operation services contributed RMB 1,318.9 million, or 40.5%[46] Assets and Liabilities - Total assets as of December 31, 2021, amounted to RMB 5,002,071 thousand, an 18.3% increase from RMB 4,228,532 thousand in 2020[11] - Total liabilities increased by 20.3% to RMB 1,486,185 thousand from RMB 1,235,057 thousand in 2020[11] - The total contracted building area reached approximately 145.9 million square meters as of December 31, 2021, a growth of 270.3% compared to the previous year[56] - The total managed building area reached 206.1 million square meters, with a remarkable year-on-year growth of 395.4%[21] Market Expansion and Strategy - The company has established a regional layout focusing on the Greater Bay Area, Yangtze River Delta, and Central and Western regions of China[9] - The company expanded its presence to 139 cities across 20 provinces, autonomous regions, and municipalities, with a contracted building area of 277.9 million square meters[22] - The proportion of third-party projects in the total managed building area increased to 88.2%, indicating enhanced market capabilities[27] - The company has made strategic acquisitions, including Guangzhou Runtong Property Management Co., Ltd. and Guangdong Teli Clean Environmental Engineering Co., Ltd., to diversify its service offerings[27] - The company plans to enhance its competitive advantage through multi-brand strategies and further market expansion following recent acquisitions[53] Customer Service and Experience - The company aims to enhance customer service experiences by focusing on creating a comprehensive ecosystem of services[19] - The group is focused on digital transformation to reshape the value chain and enhance operational capabilities, aiming for a more integrated business model[35] - The group aims to fulfill social responsibilities and enhance its reputation through quality service in the upcoming year[36] - The group is enhancing its service offerings by providing a 24/7 green and healthy living experience for office property clients[33] Corporate Governance - The board consists of 3 executive directors and 3 independent non-executive directors, with independent directors making up over one-third of the board[118] - The company held 6 board meetings and 3 shareholder meetings in the year ending December 31, 2021, with all executive directors attending 100% of board meetings[120] - The board has adopted a diversity policy, considering factors such as gender, age, and professional experience in selecting candidates[118] - The chairman and CEO roles are separated, ensuring a balance of power and accountability within the board[124] - The board is responsible for maintaining an effective risk management and internal control system to protect the group's assets and shareholders' interests[146] Risk Management - Key risks include adverse changes in government regulations, uncertainties from geopolitical events, and intense competition in the property management industry[160] - The company faces challenges related to consumer spending capacity, which may impact tenant sales and property service revenues[160] - The internal and external financing capabilities are crucial for the company's liquidity management[162] - The group has adopted a "three lines of defense" model for risk management and internal control systems, integrating risk management into core business operations[147] Shareholder Information - The proposed final dividend for the year ended December 31, 2021, is RMB 0.12 per share, an increase from RMB 0.06 per share in 2020[163] - The group had no other significant investments or acquisitions approved by the board during the year ended December 31, 2021[173] - The total number of shares held by Kong Jianan is 1,070,805,546, representing 53.09% of the issued voting shares[187] - The company has adopted a share option plan approved by shareholders on June 3, 2021, allowing for the issuance of up to 201,781,023 shares, which is 10% of the total issued shares as of the report date[198]

Financial Performance - The company's revenue for the six months ended June 30, 2021, increased by 83.1% year-on-year, reaching approximately RMB 1,228.6 million[15]. - The total revenue for the six months ended June 30, 2021, was RMB 1,228.6 million, compared to RMB 670.9 million for the same period in 2020, representing a growth of 83.0%[42]. - The net profit surged by 156.1% from approximately RMB 124.5 million in 2020 to about RMB 318.9 million in 2021[15]. - The gross profit margin improved by 5.2 percentage points to 44.2%, enhancing profitability[15]. - The company reported a basic and diluted earnings per share of RMB 16, up from RMB 8 in the previous year[136]. - The pre-tax profit for the first half of 2021 was RMB 406,624 thousand, compared to RMB 166,433 thousand in the first half of 2020, indicating a growth of around 144%[149]. - The company reported a pre-tax profit of RMB 315,198,000 for the six months ended June 30, 2021, compared to RMB 124,007,000 for the same period in 2020, reflecting a year-on-year increase of 154.0%[191]. - The company’s retained earnings increased to RMB 738,610 thousand as of June 30, 2021, compared to RMB 452,347 thousand at the end of 2020, representing a growth of about 63.3%[146]. Revenue Breakdown - Revenue from residential property management services increased by 82.3% year-on-year to approximately RMB 844.7 million, accounting for 68.8% of the total revenue[43]. - The sales revenue of shopping centers increased by 82.0% year-on-year, maintaining an occupancy rate of over 90.0% despite ongoing pandemic impacts; non-residential property management and commercial operation service revenue grew by 84.9% to approximately RMB 383.9 million[22]. - The company’s non-residential property management and commercial operation services generated a total revenue of RMB 383.9 million, accounting for 31.2% of total revenue[42]. - Revenue from community value-added services reached RMB 322.3 million, representing 26.2% of total revenue, up from 16.5% in the previous year[42]. - Community value-added services generated revenue of approximately RMB 322.3 million, reflecting a year-on-year growth of 191.7%[54]. Growth and Expansion - The contracted area increased by 315.2% to approximately 221.7 million square meters as of June 30, 2021[15]. - The managed area grew by 296.9% to approximately 165.1 million square meters during the same period[15]. - The company aims to achieve high-quality growth through active mergers and acquisitions, external expansion, and light asset output strategies[12]. - The company has completed acquisitions of Guangzhou Runtong Property Management Co., Ltd., Xuesong Zhiliang Technology Group Co., Ltd., and Shanghai Shenqin Property Management Service Co., Ltd., resulting in over 80% of the managed area coming from third parties[20]. - The company announced the acquisition of 80% of Xuesong Zhihui on January 17, 2021, which was approved on July 5, 2021, significantly enhancing its managed area and brand coverage[34]. - The company also agreed to acquire 80% of Shanghai Shenqin on June 29, 2021, which will strengthen its capabilities in public building management[35]. - The company is preparing over 36 commercial projects nationwide, which are expected to be launched in the next 3 to 5 years[35]. Operational Efficiency - The company is focusing on digital transformation to enhance operational efficiency and customer experience, including the development of a digital platform for commercial asset management[26]. - The company has implemented a performance-driven incentive system that aligns the interests of core management and employees with shareholders, utilizing equity incentives and performance bonuses[29]. - The overall talent structure has been optimized, leading to improved operational and management efficiency, recognized by multiple awards for human resource innovation[30]. - Total sales costs increased by approximately RMB 276.1 million, or 67.5%, to about RMB 685.1 million, while the growth rate of sales costs was lower than the revenue growth rate due to efficiency improvements through technology[91]. Corporate Governance and Financial Position - The company has complied with the Corporate Governance Code during the reporting period[119]. - Major shareholders collectively hold 52.85% of the voting shares, with significant individual holdings disclosed[114]. - The company maintained a net cash position with no outstanding borrowings as of June 30, 2021[100]. - The total assets amounted to approximately RMB 4,354.8 million, while total liabilities were approximately RMB 1,187.0 million as of June 30, 2021[96]. - The total liabilities decreased from RMB 1,198,006 thousand at the end of 2020 to RMB 1,154,981 thousand as of June 30, 2021[141]. Strategic Focus - The strategic focus includes high-quality expansion across all business areas while leveraging market opportunities[18]. - The company is committed to fulfilling social responsibilities and enhancing service quality while seizing market opportunities for national expansion[17]. - The company aims to integrate social, cultural, and public service functions into its business model for long-term development[25]. - The company is committed to enhancing its brand moat and market independence through strategic acquisitions and operational improvements[20]. Employee and Shareholder Engagement - The company has approved a stock option plan, granting a total of 594,000 options to eligible participants as of June 30, 2021, which remain unexercised[111]. - A share award plan was approved, with a total of 1,444,000 shares awarded to 16 selected participants, including 5 related parties and 11 employees[112]. - As of June 30, 2021, the company had approximately 10,000 employees, an increase from about 9,380 employees as of December 31, 2020[126].

Company Information and Financial Calendar [Company Information](index=3&type=section&id=Company%20Information) This section provides core corporate governance structure information including the company's basic registration details, board members, committee compositions, company secretary, legal advisors, principal place of business, and share registrar - The Chairman of the Board is **Mr. Kong Jianmin** (Non-executive Director), and the CEO is **Mr. Kong Jiannan** (Executive Director)[5](index=5&type=chunk) - The chairpersons of the Audit Committee, Remuneration Committee, and Nomination Committee are all Independent Non-executive Directors, complying with corporate governance requirements[5](index=5&type=chunk) [Financial Calendar](index=3&type=section&id=Financial%20Calendar) This section lists key financial event dates for 2021, including the announcement of full-year results, the Annual General Meeting, and the final dividend payment schedule 2021 Key Financial Calendar | Event | Date | | :--- | :--- | | Full-year Results Announcement | March 22, 2021 | | Annual General Meeting | June 3, 2021 | | Final Dividend Payment | On or about August 6, 2021 | Company Profile [Company Profile](index=4&type=section&id=Company%20Profile) Kaisa Prosperity Holdings Limited, a leading integrated smart property management service operator in China listed on the Hong Kong Stock Exchange on October 30, 2020, strategically focuses its core business in the Greater Bay Area and Yangtze River Delta, serving diverse property types and leveraging technology to enhance service quality, with future plans for rapid scale growth through M&A, external expansion, and asset-light output strategies - The company was listed on the Main Board of the Hong Kong Stock Exchange on **October 30, 2020**, with stock code **3913**[7](index=7&type=chunk) - Core business regions include the Greater Bay Area, Yangtze River Delta, and Central and Western China, serving diverse property types such as residential, shopping malls, office buildings, hospitals, and schools[7](index=7&type=chunk) - The company's future growth strategies include active mergers and acquisitions, market expansion, and asset-light output, while providing diversified value-added services based on owner needs[8](index=8&type=chunk) Financial Highlights [Financial Highlights](index=5&type=section&id=Financial%20Highlights) In FY2020, the company achieved strong growth, with total revenue increasing by **34.9%** year-on-year to **RMB 1.517 billion**, gross profit growing by **52.1%**, and profit for the year significantly increasing by **75.0%**, while total assets grew by **115.5%** and total liabilities decreased by **21.1%**, primarily due to capital structure optimization from the listing, leading to a substantial **653.2%** increase in total equity FY2020 Key Financial Data (For the year ended December 31) | Indicator | 2020 (RMB thousands) | 2019 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,517,227 | 1,124,878 | 34.9% | | Gross Profit | 638,548 | 419,828 | 52.1% | | Profit for the Year | 323,689 | 184,987 | 75.0% | | Profit attributable to owners of the parent | 323,083 | 184,887 | 74.7% | | Basic earnings per share (RMB cents) | 19 | 11 | 72.7% | FY2020 Key Balance Sheet Data (As at December 31) | Indicator | 2020 (RMB thousands) | 2019 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 4,228,532 | 1,962,186 | 115.5% | | Total Liabilities | 1,235,057 | 1,564,758 | -21.1% | | Total Equity | 2,993,475 | 397,428 | 653.2% | Honors and Awards [Residential Property Management Service Awards](index=6&type=section&id=Residential%20Property%20Management%20Service%20Awards) In 2020, the company received multiple authoritative industry recognitions in residential property management, including "Top 17 China Property Service Top 100 Enterprises" and "Top 10 China Property Service Top 100 Service Quality Leading Enterprises" by China Index Academy, demonstrating its leading position in service quality and market-oriented operations - Awarded **Top 17 China Property Service Top 100 Enterprises** in 2020[14](index=14&type=chunk) - Awarded **Top 10 China Property Service Top 100 Service Quality Leading Enterprises** in 2020[14](index=14&type=chunk) - Ranked **Top 9** among leading enterprises in the Greater Bay Area property service market[14](index=14&type=chunk) [Non-residential Property Management and Commercial Operation Service Awards](index=7&type=section&id=Non-residential%20Property%20Management%20and%20Commercial%20Operation%20Service%20Awards) In the non-residential and commercial operation sectors, the company also received numerous accolades, including "Top 8 China Commercial Real Estate Company Brand Value 2020" and "Top 10 China Commercial Office Operator 2020", with its projects like Chengdu Youfang and Suzhou Youfang also winning multiple awards, reflecting its excellent commercial real estate operation capabilities - Awarded **Top 8 China Commercial Real Estate Company Brand Value 2020**[19](index=19&type=chunk) - Rated **Top 10 China Commercial Office Operator 2020** by Guandian Index Academy[22](index=22&type=chunk) - Its projects, Chengdu Youfang and Suzhou Youfang, respectively won awards such as "**Top 8 China Commercial Real Estate Project Brand Value 2020**" and "**2020–2021 China Commercial Real Estate Benchmark Project**"[19](index=19&type=chunk)[22](index=22&type=chunk) Chairman's Report [Chairman's Report](index=10&type=section&id=Chairman%27s%20Report) The Chairman's report highlights that despite the challenges of the COVID-19 pandemic in 2020, the company successfully listed and achieved rapid performance growth, emphasizing four core strategies: rapid expansion of GFA under management through M&A, forming a diversified full-spectrum business layout, enhancing service efficiency and customer satisfaction through digitalization, and market recognition of commercial property management and operation services, with confidence in future development and a target of **200 million sq.m.** GFA under management in 2021 2020 Annual Performance Highlights | Indicator | Amount (RMB millions) | Year-on-year Growth | | :--- | :--- | :--- | | Revenue | 1,517.2 | 34.9% | | Gross Profit Margin | 42.1% | Increased by 4.8 percentage points | | Net Profit attributable to parent (excluding listing expenses) | 350.5 | 86.4% | - After listing, through the acquisition of Guangzhou Runtong and the agreement to acquire Xuesong Zhilian, the GFA under management is expected to reach approximately **127 million sq.m.**, nearly **double** the size at the end of 2020[29](index=29&type=chunk) - The company has set a target of **200 million sq.m.** for GFA under management in 2021, to be achieved through a dual-driven strategy of M&A and external expansion[33](index=33&type=chunk) - Through digital mid-platform and IoT technology, customer satisfaction increased to over **90%**, and gross profit margin increased to **42.1%**. Revenue from community value-added services increased by **86.6%** year-on-year to **RMB 290 million**[37](index=37&type=chunk)[38](index=38&type=chunk) - Non-residential property management and commercial operation service revenue reached **RMB 455 million**, with commercial operation revenue increasing by **126.9%** year-on-year to **RMB 96.6 million**, and the successful launch of the first third-party asset-light output project[39](index=39&type=chunk)[43](index=43&type=chunk) Management Discussion and Analysis [Business Review](index=17&type=section&id=Business%20Review) The Group's business is primarily divided into two segments: residential property management services and non-residential property management and commercial operation services, both achieving steady growth in 2020 with significant expansion in total GFA under management, notably strengthening public construction service capabilities through the acquisition of Guangzhou Runtong 2020 Revenue by Business Segment | Business Segment | 2020 Revenue (RMB thousands) | 2019 Revenue (RMB thousands) | | :--- | :--- | :--- | | Residential Property Management Services | 1,062,367 | 759,234 | | Non-residential Property Management and Commercial Operation Services | 454,860 | 365,644 | | **Total** | **1,517,227** | **1,124,878** | [Residential Property Management Services](index=19&type=section&id=Residential%20Property%20Management%20Services) In 2020, residential property management service revenue increased by **39.9%** year-on-year to **RMB 1.062 billion**, accounting for **70.0%** of total revenue, with GFA under management growing to **29.12 million sq.m.** and community value-added services showing strong potential with **86.6%** revenue growth to **RMB 290 million**, primarily driven by the Greater Bay Area and Yangtze River Delta regions Residential Property Management Service Revenue Details | Service Line | 2020 Revenue (RMB thousands) | 2019 Revenue (RMB thousands) | | :--- | :--- | :--- | | Pre-sale Management Services | 258,921 | 221,810 | | Property Management Services | 513,573 | 382,047 | | Community Value-added Services | 289,873 | 155,377 | | **Total** | **1,062,367** | **759,234** | - As of the end of 2020, residential property GFA under management reached **29.121 million sq.m.**, a year-on-year increase of **58.7%**; total contracted GFA reached **39.371 million sq.m.**[60](index=60&type=chunk) - Community value-added service revenue increased by **86.6%** year-on-year, primarily due to increased GFA under management and diversification of service types[76](index=76&type=chunk) [Non-residential Property Management and Commercial Operation Services](index=22&type=section&id=Non-residential%20Property%20Management%20and%20Commercial%20Operation%20Services) In 2020, non-residential segment revenue increased by **24.4%** year-on-year to **RMB 455 million**, with GFA under management significantly growing to **12.45 million sq.m.** mainly due to the acquisition of Guangzhou Runtong, expanding into public construction, while commercial operation service revenue grew rapidly by **126.9%** to **RMB 96.61 million**, and the company began providing asset-light output services to third-party developers Non-residential Property Management and Commercial Operation Service Revenue Details | Service Line | 2020 Revenue (RMB thousands) | 2019 Revenue (RMB thousands) | | :--- | :--- | :--- | | Pre-sale Management Services | 24,794 | 21,342 | | Property Management Services | 279,740 | 259,766 | | Commercial Operation Services | 96,606 | 42,570 | | Other Value-added Services | 53,720 | 41,966 | | **Total** | **454,860** | **365,644** | - As of the end of 2020, non-residential property GFA under management reached **12.45 million sq.m.**, a year-on-year increase of **281.1%**, including **5.40 million sq.m.** of commercial properties and **7.10 million sq.m.** of public construction[82](index=82&type=chunk)[84](index=84&type=chunk) - Through the acquisition of **80%** equity in Guangzhou Runtong, the company's capabilities in public construction services such as hospitals and schools have been strengthened[82](index=82&type=chunk) - The company has signed an asset-light output project with a third-party developer (Tangshan Cai Lifang), providing pre-opening and post-opening commercial operation and property management services[106](index=106&type=chunk) [Financial Review](index=29&type=section&id=Financial%20Review) In 2020, the company's overall financial performance was outstanding, with total revenue increasing by **34.9%** year-on-year, gross profit by **52.1%**, and gross profit margin improving from **37.3%** to **42.1%**, while cost of sales growth (**24.6%**) was lower than revenue growth, administrative expenses increased by **17.8%** due to expansion and listing fees, and the company maintained a healthy financial position with a current ratio improving from **1.11** to **3.15** and no outstanding borrowings - Cost of sales increased by **24.6%**, lower than the revenue growth rate (**34.9%**), mainly due to efficiency improvements and cost savings from technological means[129](index=129&type=chunk) - Gross profit increased by **52.1%** year-on-year to **RMB 639 million**, with gross profit margin improving by **4.8 percentage points** to **42.1%**, primarily benefiting from energy-saving and efficiency-enhancing measures[130](index=130&type=chunk) - Administrative expenses increased by **17.8%** year-on-year to **RMB 194 million**, mainly due to business expansion and **RMB 27.4 million** in listing expenses[132](index=132&type=chunk) - As of the end of 2020, the company had no outstanding borrowings, and the current ratio improved from **1.11** in 2019 to **3.15**[134](index=134&type=chunk)[141](index=141&type=chunk) Environmental, Social and Governance (ESG) Report [Employee Care and Development](index=39&type=section&id=Employee%20Care%20and%20Development) The company highly values employee growth and well-being, strictly adhering to labor laws, prohibiting child and forced labor, and has established a comprehensive health and safety management system (ISO 45001 certified) providing commercial insurance, while also setting up multi-level training programs and an online learning platform to support continuous employee development and ensure effective communication channels - The company strictly adheres to recruitment management systems, prohibiting the use of child labor and forced labor, with no violations found during the reporting period[179](index=179&type=chunk) - The company holds **ISO 45001** Occupational Health and Safety Management System certification, providing annual physical examinations and commercial accident and critical illness insurance for all employees[174](index=174&type=chunk)[180](index=180&type=chunk) - Established "New Force," "Navigator," "Elite," and "Leader" four-level talent development programs targeting new employees, middle management, trainees, and senior management[183](index=183&type=chunk)[184](index=184&type=chunk) [Customer Service and Supply Chain Management](index=43&type=section&id=Customer%20Service%20and%20Supply%20Chain%20Management) The company is committed to providing high-quality services, holding ISO 9001 quality management system certification, actively promoting intelligent management through various technological systems to enhance operational efficiency and customer experience, and has established strict supplier screening, evaluation, and management systems prioritizing environmental protection and compliance, along with pandemic response plans to ensure supply chain stability - The company holds **ISO 9001** Quality Management System and **ISO 14001** Environmental Management System certifications[195](index=195&type=chunk) - Utilizes intelligent systems such as the "Yihe" APP, ERP system, facility management system, "Vehicle Management Cloud," and "Juntian Eye" to enhance operational efficiency and customer experience[198](index=198&type=chunk)[199](index=199&type=chunk) - Established a supplier management system including qualification review, on-site inspection, annual evaluation, and a blacklist to ensure supply chain sustainability and compliance[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Anti-Corruption and Integrity Building](index=50&type=section&id=Anti-Corruption%20and%20Integrity%20Building) The company maintains a zero-tolerance stance on corruption, formulating internal policies like the "Supervision and Management System" and "Employee Conflict of Interest Management Regulations," establishing multiple reporting channels, and regularly conducting integrity education training to strengthen employees' awareness of integrity and self-discipline, with no corruption incidents or related lawsuits found during the reporting period - The company has zero tolerance for corruption, bribery, money laundering, and other acts, and has established a comprehensive internal supervision and reporting mechanism[223](index=223&type=chunk)[224](index=224&type=chunk) - A total of **8** anti-corruption training sessions were arranged this year, covering approximately **335** participants[225](index=225&type=chunk) [Environmental Protection and Climate Change Response](index=50&type=section&id=Environmental%20Protection%20and%20Climate%20Change%20Response) The company is committed to reducing its environmental impact through waste sorting and paperless office practices, implementing various measures to conserve electricity and water resources, and has begun assessing climate change risks while deploying strategies for extreme weather events and supply chain stability - The company has standardized treatment processes for kitchen fumes, wastewater, solid waste, and hazardous waste, and encourages paperless office practices[228](index=228&type=chunk)[232](index=232&type=chunk) - Implemented multiple energy and water saving measures, such as using LED lights, controlling air conditioning temperatures, installing water-saving fixtures, and utilizing rainwater harvesting systems for landscaping irrigation[234](index=234&type=chunk)[236](index=236&type=chunk)[240](index=240&type=chunk) 2020 Key Environmental Performance Indicators | Indicator | Unit | 2020 | | :--- | :--- | :--- | | Total Greenhouse Gas Emissions | tons | 18,414.00 | | Total Hazardous Waste | tons | 0.15 | | Total Non-hazardous Waste | tons | 62.25 | | Total Energy Consumption | thousand kWh | 81,601.00 | | Total Water Consumption | cubic meters | 396,166.00 | [Community Contribution and Public Welfare Activities](index=55&type=section&id=Community%20Contribution%20and%20Public%20Welfare%20Activities) The company actively fulfills its social responsibilities, especially during the 2020 COVID-19 pandemic, by rapidly formulating epidemic prevention plans to ensure resident safety and daily necessities supply, utilizing technological means for smart epidemic control, and actively engaging in community welfare through various activities including caring for the elderly and children, environmental protection, poverty alleviation, and education support, with its "Yijia Chuangsheng Volunteer Service Team" providing continuous convenient services - During the pandemic, ensured residents' material supply through community group purchases and online platforms, serving over **70,000** times throughout the year, benefiting over **20,000** households[249](index=249&type=chunk) - Utilized technological means such as drone patrols, robot meal delivery, and smart access control for epidemic prevention, with approximately **93.6 million** temperature checks at gates and **37,000** park disinfections throughout the year[249](index=249&type=chunk) - Actively carried out community welfare activities, including caring for autistic children and lonely elderly, participating in "Earth Hour" environmental activities, and establishing a volunteer service team for poverty alleviation, education support, and convenient community services[262](index=262&type=chunk)[263](index=263&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) Corporate Governance Report [Board and Committees](index=70&type=section&id=Board%20and%20Committees) The company is committed to high standards of corporate governance, with a **7-member** Board of Directors comprising **3** executive, **1** non-executive, and **3** independent non-executive directors, complying with listing rules, where the Chairman and CEO roles are separated, and the Board's Remuneration, Nomination, and Audit committees meet independence requirements to oversee specific matters - The company has adopted and complied with the code provisions of the HKEX Corporate Governance Code from its listing date to the end of 2020[311](index=311&type=chunk) - The Board of Directors consists of **7** members, of whom **3** are independent non-executive directors, exceeding one-third, complying with listing rule requirements[314](index=314&type=chunk)[319](index=319&type=chunk) - The roles of Chairman (**Mr. Kong Jianmin**) and CEO (**Mr. Kong Jiannan**) are clearly separated, ensuring a balance of power[326](index=326&type=chunk) [Risk Management and Internal Control](index=75&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for maintaining a sound and effective risk management and internal control system, adopting a "three lines of defense" model where operational units manage daily risks, functional departments provide support for cross-domain risks, and the risk control center conducts independent evaluations and monitoring, with the Board having reviewed and deemed the system fully effective as of the end of 2020 - The company adopts a "**three lines of defense**" model as the basic framework for its risk management and internal control system[348](index=348&type=chunk) - The Board has reviewed and assessed the risk management and internal control system for the year ended December 31, 2020, and considers it to be adequate and effective[352](index=352&type=chunk) Directors' Report [Business Review, Risks and Dividends](index=78&type=section&id=Business%20Review%2C%20Risks%20and%20Dividends) This report reviews the principal business activities in 2020, confirming the company's main business as investment holding with subsidiaries engaged in property management and commercial operations, outlining major risks such as government regulation, macroeconomic conditions, and industry competition, and recommending a final dividend of **RMB 6 cents** per share for the year ended December 31, 2020 - The Board recommends a final dividend of **RMB 6 cents** per share for the year ended December 31, 2020[368](index=368&type=chunk) - The report lists major risks faced by the company, including policy changes, macroeconomic uncertainties, intense industry competition, and talent shortage[366](index=366&type=chunk)[367](index=367&type=chunk) [Significant Acquisitions and Post-Reporting Period Events](index=79&type=section&id=Significant%20Acquisitions%20and%20Post-Reporting%20Period%20Events) During the reporting period, the Group acquired **80%** equity in Guangzhou Runtong, a property management company, for **RMB 214.4 million** in cash, completed in December 2020, and subsequent to the reporting period, the company entered into an agreement in January 2021 to acquire **80%** equity in Xuesong Zhilian for **RMB 1.316 billion**, expected to increase GFA under management to **127 million sq.m.** - In December 2020, the Group acquired **80%** equity in Guangzhou Runtong for **RMB 214.4 million** in cash, with the seller committing to revenue and net profit for the next three years[371](index=371&type=chunk) - Post-reporting period event: On **January 17, 2021**, the company entered into an agreement to acquire **80%** equity in Xuesong Zhilian for **RMB 1.316 billion**, which is expected to increase GFA under management to **127 million sq.m.**[420](index=420&type=chunk) [Major Customers, Suppliers and Use of Listing Proceeds](index=80&type=section&id=Major%20Customers%2C%20Suppliers%20and%20Use%20of%20Listing%20Proceeds) In 2020, transactions with the Group's largest customer (Hopson Development Holdings Limited and its associates) accounted for **49.9%** of total revenue, while purchases from the top five suppliers accounted for **8.0%** of total purchases, indicating low concentration, and the company's October 2020 listing raised net proceeds of approximately **RMB 2.526 billion**, primarily for strategic acquisitions and investments, upgrading smart service systems, and diversifying value-added services - The largest customer was Hopson Development Holdings Limited and its associates, accounting for **49.9%** of total revenue in 2020[382](index=382&type=chunk) - The top five suppliers accounted for **8.0%** of total purchases, with the single largest supplier accounting for **2.5%**, indicating low supplier concentration[382](index=382&type=chunk) Use of Net Proceeds from Listing (As at December 31, 2020) | Intended Use | Percentage | Net Proceeds (RMB thousands) | Amount Utilized (RMB thousands) | | :--- | :--- | :--- | :--- | | Strategic acquisitions and investments | 60.0% | 1,515,800 | 80,000 | | Upgrading smart service systems | 25.0% | 631,600 | — | | Diversified value-added services | 10.0% | 252,600 | — | | General corporate purposes | 5.0% | 126,300 | — | | **Total** | **100.0%** | **2,526,300** | **80,000** | Biographies of Directors and Senior Management [Biographies of Directors and Senior Management](index=89&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) This section provides detailed personal biographies of the company's executive directors, non-executive directors, independent non-executive directors, and senior management members, including their age, position, responsibilities, industry experience, educational background, and appointments in other companies - **Mr. Kong Jiannan**, Executive Director and CEO, has over **20 years** of experience in the real estate industry, responsible for the Group's overall management and operations[429](index=429&type=chunk) - **Mr. Kong Jianmin**, Non-executive Director and Chairman of the Board, is the founder of Hopson Development Holdings Limited, with over **25 years** of experience in property development and investment[439](index=439&type=chunk) - **Ms. Liu Xiaolan**, **Mr. Feng Zhiwei**, and **Ms. Wu Qiqin**, Independent Non-executive Directors, all possess extensive experience in real estate, accounting and finance, and corporate governance[444](index=444&type=chunk)[451](index=451&type=chunk)[457](index=457&type=chunk) Independent Auditor's Report [Independent Auditor's Report](index=96&type=section&id=Independent%20Auditor%27s%20Report) Ernst & Young, the auditor, issued an unqualified opinion on the company's consolidated financial statements for the year 2020, stating that the statements fairly and truly reflect the Group's financial position and performance and have been properly prepared in accordance with relevant accounting standards and regulations, specifically highlighting two key audit matters: impairment assessment of goodwill and other intangible assets, and impairment assessment of trade receivables - Auditor Ernst & Young issued an **unqualified opinion** on the consolidated financial statements for the year ended December 31, 2020[473](index=473&type=chunk) - Key audit matters include: * Impairment assessment of goodwill and other intangible assets[475](index=475&type=chunk)[478](index=478&type=chunk) * Impairment assessment of trade receivables[483](index=483&type=chunk) Consolidated Financial Statements [Consolidated Statement of Profit or Loss](index=102&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year 2020, the Group's revenue was **RMB 1.517 billion**, gross profit was **RMB 639 million**, profit for the year was **RMB 324 million** after expenses and taxes, with **RMB 323 million** attributable to owners of the parent, and basic and diluted earnings per share were **RMB 19 cents** 2020 Consolidated Statement of Profit or Loss Summary | Item | Amount (RMB thousands) | | :--- | :--- | | Revenue | 1,517,227 | | Gross Profit | 638,548 | | Profit before tax | 445,626 | | Profit for the year | 323,689 | | Profit attributable to owners of the parent | 323,083 | [Consolidated Statement of Financial Position](index=104&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2020, the Group's total assets were **RMB 4.229 billion**, total liabilities were **RMB 1.235 billion**, and net assets were **RMB 2.993 billion**, with non-current assets at **RMB 456 million**, current assets at **RMB 3.772 billion**, and cash and cash equivalents reaching **RMB 2.960 billion**, demonstrating healthy liquidity and a robust capital structure 2020 Consolidated Statement of Financial Position Summary | Item | Amount (RMB thousands) | | :--- | :--- | | **Assets** | | | Total Non-current Assets | 456,113 | | Total Current Assets | 3,772,419 | | **Total Assets** | **4,228,532** | | **Liabilities and Equity** | | | Total Current Liabilities | 1,198,006 | | Total Non-current Liabilities | 37,051 | | **Total Liabilities** | **1,235,057** | | **Total Equity** | **2,993,475** | [Consolidated Statement of Cash Flows](index=108&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year 2020, net cash generated from operating activities was **RMB 274 million**, net cash used in investing activities was an outflow of **RMB 142 million** primarily for subsidiary acquisitions, and net cash generated from financing activities was an inflow of **RMB 2.485 billion** mainly from share issuance proceeds, resulting in a significant increase in year-end cash and cash equivalents to **RMB 2.960 billion** 2020 Consolidated Statement of Cash Flows Summary | Item | Amount (RMB thousands) | | :--- | :--- | | Net cash generated from operating activities | 273,549 | | Net cash used in investing activities | (142,417) | | Net cash generated from financing activities | 2,485,376 | | Net increase in cash and cash equivalents | 2,616,508 | | Cash and cash equivalents at end of year | 2,959,619 | Four-Year Financial Summary [Four-Year Financial Summary](index=181&type=section&id=Four-Year%20Financial%20Summary) This section provides a summary of the Group's key performance and financial position data for the four fiscal years from 2017 to 2020, showing consistent high growth in revenue, gross profit, and profit for the year, along with significant expansion in asset scale and total equity, reflecting the company's strong development momentum 2017-2020 Performance Trends (RMB thousands) | Indicator | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,517,227 | 1,124,878 | 659,136 | 463,381 | | Gross Profit | 638,548 | 419,828 | 182,961 | 104,270 | | Profit for the Year | 323,689 | 184,987 | 79,682 | 44,148 | 2017-2020 Assets, Liabilities and Equity Trends (RMB thousands) | Indicator | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 4,228,532 | 1,962,186 | 1,216,350 | 1,197,802 | | Total Liabilities | 1,235,057 | 1,564,758 | 1,016,531 | 1,077,665 | | Total Equity | 2,993,475 | 397,428 | 199,819 | 120,137 |