香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 就 因 本 公 告 全部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責 任。 截 至2023年12月31日止年度的全年業績公告 1. 2023年本集團收入約為人民幣3,926.81百 萬 元，較2022年約人民幣3,527.40百 萬元增長11.3%。 3. 2023年本公司擁有人應佔利潤約為人民幣302.69百 萬 元，較2022年約人民 幣403.49百萬元下降25.0%。 業 績 基 本 24.8 33.1 綜合損益表 截 至2023年12月31日止年度 （以 人 民 幣 呈 列） 綜合損益及其他全面收益表 截 至2023年12月31日止年度 （以人民幣呈列） 綜合財務狀況表 於2023年12月31日 （以 人 民 幣 呈 列） – 4 – 總資產減流動負債 3,746,431 3,787,626 EXCELLENCE COMMERCIAL PROPERTY & FACILITIES MANAGEMENT GROUP ...

Revenue Performance - As of December 31, 2022, Beijing Global Wealth's property management projects generated revenue of approximately RMB 65.37 million, exceeding the guaranteed revenue of RMB 58.63 million for the same period[5] - The guaranteed revenue remains effective until December 31, 2025, with a 10% fee increase not implemented before December 31, 2021[2] - If actual revenue from property management projects falls below the guaranteed revenue during the specified period, Beijing Global Wealth will compensate the difference to the sellers and shareholders[4]

Financial Performance - The net profit for the reporting period was RMB 187.29 million, a decrease of 43.0% compared to RMB 328.39 million in the same period last year[8]. - The profit attributable to shareholders was RMB 170.34 million, down 45.2% from RMB 311.01 million year-on-year[8]. - The gross profit margin decreased from 28.4% in the same period last year to 21.4%[23]. - The gross profit for the group was RMB 393.48 million, with a gross profit margin of 21.4%, down from 28.4% in the same period last year[43]. - Total revenue for the six months ended June 30, 2023, was RMB 1,839.34 million, a decrease of 1.3% compared to RMB 1,862.93 million in the same period of 2022[90]. - Revenue from property management services was RMB 1,565.87 million, representing a 15.3% increase from RMB 1,358.39 million in the previous year[112]. - Revenue from value-added services dropped 44.7% to RMB 262.85 million, down from RMB 475.63 million, accounting for approximately 14.3% of total revenue[95]. - The company's cost of sales increased by 8.5% to RMB 1,445.86 million, compared to RMB 1,333.18 million in the same period of 2022, mainly due to rising personnel and subcontracting costs[96]. Operational Metrics - The total contracted area for the group was approximately 73.30 million square meters, representing a year-on-year increase of about 6.3% compared to the same period in 2022[36]. - The managed area reached approximately 60.42 million square meters, which is a 20.6% increase year-on-year, with 63.6% of the managed properties coming from third-party sources[36]. - The managed area at the end of the reporting period was 60,419 thousand square meters, up from 50,084 thousand square meters in the previous year[37]. - The group signed new contracts worth RMB 253.30 million with strategic clients, achieving a 100% retention rate for these clients[41]. - The group expanded its high-end business brand "Zhuopin Business," achieving a revenue of RMB 92.61 million, which is a 26.6% year-on-year increase[52]. - The group acquired new third-party project contracts totaling RMB 762.51 million during the reporting period, with an annualized contract value of RMB 309.77 million[46]. - The group reported a 162.7% increase in revenue from public and industrial properties compared to the same period last year[46]. Expenses and Losses - Selling and marketing expenses increased by 111.8% to RMB 23.04 million, primarily due to increased costs for business development[32]. - Administrative expenses rose by 32.1% to RMB 111.64 million, mainly due to increased personnel costs and the impact of acquiring a stake in Shanghai Yaozhan Enterprise Management Co., Ltd.[33]. - Other income for the reporting period was RMB 25.46 million, a decrease of 17.2% from RMB 30.74 million in the previous year[29]. - The impairment loss on receivables and contract assets was RMB 24.57 million, up from RMB 13.04 million in the same period last year[31]. - Other business revenue decreased from RMB 28.91 million in the same period of 2022 to approximately RMB 10.62 million, primarily due to a reduction of about RMB 17.07 million in financial services revenue[113]. Assets and Liabilities - Investment properties amounted to RMB 96.05 million as of June 30, 2023, a decrease of RMB 5.45 million from RMB 101.50 million on December 31, 2022, primarily due to depreciation[81]. - Net property, plant, and equipment decreased to RMB 44.59 million as of June 30, 2023, down RMB 9.16 million from RMB 53.75 million on December 31, 2022, mainly due to depreciation[82]. - Intangible assets amounted to RMB 354.88 million as of June 30, 2023, a decrease of RMB 12.58 million from RMB 367.46 million on December 31, 2022, primarily due to amortization of property management contracts[83]. - As of June 30, 2023, the company's cash and cash equivalents were RMB 2,468.68 million, a decrease of 3.7% from RMB 2,564.43 million as of December 31, 2022[110]. - The company maintained a stable financial position with no bank borrowings as of December 31, 2022, but had RMB 24.00 million in bank and other borrowings as of June 30, 2023[107]. - Contract liabilities were approximately RMB 164.62 million, a slight increase from RMB 163.82 million as of December 31, 2022[106]. - As of June 30, 2023, the group's debt-to-asset ratio was 29.9%, an increase from 28.4% on December 31, 2022[119]. - The group has issued financial guarantees amounting to RMB 62.37 million as of June 30, 2023, unchanged from December 31, 2022[126]. - Lease liabilities recognized under new leasing standards amounted to RMB 12.73 million due within one year and RMB 108.03 million due beyond one year[127]. Strategic Initiatives - The company emphasizes talent development and reserves to support rapid business expansion, focusing on cultivating integrated management talents through training programs[58]. - The company aims to enhance market share through innovative market expansion strategies and establishing a solution platform to support bidding processes[67]. - The company is committed to digital transformation to improve decision-making efficiency and enhance core competitiveness[73]. - The company plans to implement a "focus on growth" external strategy in the second half of 2023, aiming to strengthen organizational efficiency and long-term strategic goals[75]. - The group is focusing on enhancing its medical property service platform to capture broader market opportunities in the healthcare sector[118]. - The group aims to develop and optimize its "O+" platform to improve internal controls and management efficiency[137]. - The group is actively pursuing opportunities to acquire or invest in third-party service providers to enhance specific value-added services[134]. - The group plans to strategically acquire or invest in companies with operational scale or profit prospects, with a planned usage amount of RMB 2,351.7 million, representing 70% of the total[121]. Human Resources - The group employed a total of 20,747 full-time employees in China and 44 in India as of June 30, 2023, compared to 15,676 and 66 respectively as of December 31, 2022[171]. - The group plans to strategically recruit and develop professional talent to enhance service quality for clients, with an estimated utilization timeline for unutilized net proceeds by December 31, 2026[153]. Corporate Governance - The company has become a platinum member of BOMA and a member of IFMA and RICS, aligning with international standards in service delivery[63]. - The company is a leading business real estate service operator in China, providing full lifecycle asset maintenance and comprehensive service solutions[199]. - The core property management services target various business types, including commercial, public, industrial, and residential properties[200]. - The company aims to enhance performance and maintain ongoing business relationships through its pre-IPO share option plan[187]. - The board has the discretion to grant share options to qualified participants, including full-time and part-time employees, executives, and directors[182]. - The company is focused on achieving comprehensive value expectations for clients and supporting their business visions[199].

Financial Performance - For the six months ended June 30, 2023, the group's revenue was approximately RMB 1,839.34 million, a decrease of 1.3% compared to RMB 1,862.93 million for the same period in 2022[1]. - Gross profit for the same period was RMB 393.48 million, down from RMB 529.76 million in the previous year, indicating a significant decline in profitability[3]. - Operating profit decreased to RMB 259.69 million from RMB 456.94 million year-on-year, reflecting a decline of approximately 43.3%[3]. - The profit for the period attributable to equity shareholders was RMB 170.34 million, compared to RMB 311.01 million in the prior year, representing a decrease of about 45.1%[3]. - Basic and diluted earnings per share were both RMB 13.96, down from RMB 25.49 in the same period last year, indicating a decline of approximately 45.1%[3]. - The group's profit for the six months ended June 30, 2023, was approximately RMB 187.29 million, a decrease of 43.0% compared to RMB 328.39 million for the same period in 2022[24]. - The profit attributable to equity shareholders for the same period was approximately RMB 170.34 million, down 45.2% from RMB 311.01 million in 2022[24]. - The total comprehensive income for the period ended June 30, 2023, was RMB 186.10 million, compared to RMB 319.04 million for the same period in 2022[188]. Revenue Breakdown - Revenue from property management services for residential properties was RMB 1,565.87 million, up from RMB 1,358.39 million, indicating a growth of about 15.3%[11]. - Revenue from value-added services decreased significantly to RMB 262.85 million from RMB 475.63 million, reflecting a decline of approximately 44.7%[11]. - Revenue from basic property management services increased by 15.3% to RMB 1,565.87 million, up from RMB 1,358.39 million in the same period of 2022[122]. - Value-added services revenue decreased by 44.7% to RMB 262.85 million, down from RMB 475.63 million in the same period last year, representing approximately 14.3% of total revenue[142]. - Other business revenue fell by 63.3% to RMB 10.62 million, compared to RMB 28.91 million in the previous year[141]. - The company's value-added services revenue decreased by 62.2% due to the downturn in the real estate economy, while owner value-added services revenue increased significantly by 65.1%[123]. Assets and Liabilities - Total assets less current liabilities as of June 30, 2023, were RMB 3,899.91 million, an increase from RMB 3,787.63 million as of December 31, 2022[7]. - The net asset value increased to RMB 3,697.49 million from RMB 3,589.30 million, showing a growth of approximately 3.0%[7]. - The report segment assets as of June 30, 2023, were RMB 4,764.35 million, an increase from RMB 4,504.50 million at the end of 2022[37]. - The report segment liabilities increased to RMB 1,307.10 million from RMB 1,138.08 million in the previous year[37]. - As of June 30, 2023, total trade receivables amounted to RMB 170,087,000, an increase from RMB 85,459,000 as of December 31, 2022[70]. - The company's trade receivables (net of impairment losses) as of June 30, 2023, were RMB 151,242,000, compared to RMB 67,821,000 as of December 31, 2022[70]. - The total accounts payable increased to RMB 430,044 thousand as of June 30, 2023, compared to RMB 400,781 thousand as of December 31, 2022, indicating a growth of approximately 7.3%[76]. Strategic Initiatives - The group is focusing on integrating resources with partners like Huang Jin Industrial and Beijing Global Wealth Property Management for collaborative growth[23]. - The group aims to drive performance growth through technology and green development initiatives[24]. - The company aims to enhance its operational capabilities in government public construction projects through specialized, international, innovative, and technological services[60]. - The company is focusing on digital transformation and value creation to strengthen its operational independence and sustainability[79]. - The company plans to adopt innovative market expansion strategies to increase market share and enhance customer trust[91]. - The company is committed to providing customized and intelligent value-added services to meet diverse customer needs[85]. - The company is leveraging advanced technologies such as IoT, big data, and AI to improve project management efficiency and create maximum value for clients[82]. - The company aims to strengthen its market organization framework and expand into government public construction and urban service sectors[105]. - The company will leverage strategic acquisitions to enhance its capabilities in new business areas and improve overall risk resistance[115]. Customer Focus and Satisfaction - The company aims to enhance customer satisfaction by ensuring timely delivery and improving service quality throughout the project lifecycle[92]. - The company continues to focus on strategic customer cultivation and talent development to support its core business expansion[160]. - The company emphasizes the importance of maintaining strong customer relationships to ensure ongoing satisfaction and business growth[160]. - The company will continue to focus on customer needs, enhance basic operations, and optimize talent support to improve customer satisfaction and establish strong strategic partnerships[113]. Dividends and Shareholder Returns - The company declared an interim dividend of RMB 11.17 cents per share, down from RMB 12.74 cents per share in the previous year, reflecting a decrease of approximately 12.4%[77]. - The company proposed an interim dividend of HKD 0.1218 per share for the six months ended June 30, 2023, down from HKD 0.1460 for the same period in 2022[186]. Market Position and Recognition - The company has been recognized as a top performer in various industry rankings, including being named one of the "Top 12 Property Management Listed Companies in China" by Kearney[128]. - The company has established a comprehensive business property service operation model and has received multiple ISO certifications, enhancing its operational capabilities[130]. - The company is focused on strategic talent development to support rapid business expansion and maintain core competitiveness[131]. Future Outlook - Future strategic planning revolves around becoming a leading commercial real estate service operator in China, emphasizing organizational, business, and capability development[135]. - The company aims to optimize its governance structure and deepen digital transformation to create sustained value amidst a complex external environment[139]. - The company plans to continue implementing the "Focus on Growth" external strategy in the second half of 2023, enhancing organizational efficiency through internal drivers[154].

[Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman acknowledges 2022 was challenging due to the pandemic, economic downturn, and property market decline, leading to missed performance targets - The company acknowledges that its 2022 performance did not meet expectations, primarily due to the triple pressures of the pandemic in China, economic recession, and the real estate downturn[29](index=29&type=chunk) - The company's future strategy will focus on deepening cooperation with strategic clients, building a second growth curve through M&A, and accelerating digital transformation and talent development[22](index=22&type=chunk)[47](index=47&type=chunk)[5](index=5&type=chunk) - The Board of Directors resolved to maintain a high dividend payout policy, with a **final dividend payout ratio of 70% for 2022** to reward shareholder support[61](index=61&type=chunk) - Management is optimistic about business in 2023, expecting a good growth momentum from the beginning of the year and a solid recovery in annual performance[63](index=63&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section analyzes the company's 2022 business and financial performance, highlighting revenue growth, profit decline, and business expansion [Business Overview](index=7&type=section&id=Business%20Overview) The company operates as a leading commercial property service provider in China, with core businesses in basic property management and value-added services [Basic Property Management Services](index=7&type=section&id=Basic%20Property%20Management%20Services) This core business focuses on commercial, public, industrial, and residential properties, with a strategic emphasis on commercial real estate - The company's basic property management services primarily target three types of properties: **commercial, public and industrial, and residential**[51](index=51&type=chunk) - Commercial property management is the company's main development track, serving clients mainly from **Fortune 500 and high-tech enterprises** with customized integrated facility management (FM) and commercial office building (PM) services[52](index=52&type=chunk)[31](index=31&type=chunk)[66](index=66&type=chunk) - The company is actively exploring new tracks in public and industrial properties, focusing on government public buildings, urban services, education, and healthcare facilities[35](index=35&type=chunk)[53](index=53&type=chunk) [Value-added Services](index=10&type=section&id=Value-added%20Services) The company's value-added services aim to meet diverse client needs, focusing on asset services, Zhuopin business services, and M&E engineering services - Key development areas for value-added services include **asset services, Zhuopin business services, and M&E engineering services**[73](index=73&type=chunk)[24](index=24&type=chunk) - Zhuopin business services adopt a **B to B for C model**, providing one-stop support services such as high-end business solutions, corporate value-added services, and digital empowerment for high-tech and Fortune 500 companies[74](index=74&type=chunk)[36](index=36&type=chunk) - M&E engineering services, through its subsidiary Shenghengda M&E, offer an integrated solution of **"hardware + software + platform + service"** to build a green and smart M&E ecosystem[10](index=10&type=chunk)[86](index=86&type=chunk) [Operating Performance Review](index=11&type=section&id=Operating%20Performance%20Review) In 2022, revenue grew slightly, but profits declined due to the real estate downturn's impact on non-owner value-added services, while business scale expanded significantly [Performance Overview](index=11&type=section&id=Performance%20Overview) In 2022, total revenue was RMB 3.53 billion, but net profit declined due to non-owner value-added services, while business scale expanded Key Financial Indicators for FY2022 | Indicator | 2022 (RMB million) | 2021 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 3,527.40 | 3,467.07 | +1.7% | | **Gross Profit** | 844.35 | 959.63 | -12.0% | | **Overall Gross Profit Margin** | 23.9% | 27.7% | -3.8 p.p. | | **Net Profit Attributable to Owners** | 403.49 | 510.09 | -20.9% | | **Net Profit Margin** | 12.1% | 15.8% | -3.7 p.p. | | **Core Net Profit Attributable to Owners (excluding non-owner value-added services)** | - | - | +17.4% | Changes in Gross Floor Area (GFA) Under Management ('000 sqm) | Item | 2022 | 2021 | | :--- | :--- | :--- | | **Opening GFA Under Management** | 36,635 | 32,018 | | **New Engagements** | 17,066 | 11,091 | | **New Acquisitions** | 4,505 | – | | **Terminations/Disposals** | (4,446) | (6,474) | | **Closing GFA Under Management** | 53,760 | 36,635 | Revenue and GFA Under Management by Geographical Region (2022) | Region | GFA Under Management ('000 sqm) | GFA Share (%) | Revenue (RMB '000) | Revenue Share (%) | | :--- | :--- | :--- | :--- | :--- | | **Greater Bay Area** | 23,378 | 43.5 | 1,616,597 | 57.4 | | **Yangtze River Delta** | 10,591 | 19.7 | 391,693 | 13.9 | | **Other Regions** | 19,790 | 36.8 | 806,503 | 28.7 | | **Total** | 53,760 | 100.0 | 2,814,793 | 100.0 | Gross Profit Margin of Basic Property Services Segment | Property Type | 2022 (%) | 2021 (%) | | :--- | :--- | :--- | | **Commercial Properties** | 23.1 | 25.5 | | **Public and Industrial Properties** | 11.0 | 13.8 | | **Residential Properties** | 15.9 | 17.0 | | **Total** | 21.1 | 22.9 | [Core Competency Analysis](index=15&type=section&id=Core%20Competency%20Analysis) The company's core strengths lie in its premium brand, standardized services, strategic talent development, and continuous digital innovation - The company has established a **premium brand image** by winning numerous industry awards for its leading comprehensive strength and service quality[493](index=493&type=chunk)[508](index=508&type=chunk) - The company has formed a **comprehensive service standard** by obtaining multiple international management system certifications like ISO 9001 and ISO 14001, and memberships in associations like BOMA and IFMA[494](index=494&type=chunk) - The company deeply invests in **strategic talent cultivation and reserves**, supporting business development through programs like the Management Trainee Program, Zhuo Jiang Program, and COE Forum[496](index=496&type=chunk) - The company is committed to **digital innovation**, leveraging its E+FM smart dual platforms with IoT and big data to reduce costs and increase efficiency, and enhancing management efficiency through its "business-finance integration" platform[509](index=509&type=chunk)[533](index=533&type=chunk)[497](index=497&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) Total revenue grew 1.7% to RMB 3.53 billion, driven by basic property services, while profits fell due to declining value-added services and increased impairment losses Revenue Composition and Changes (RMB million) | Business Segment | 2022 Revenue | Share (%) | 2021 Revenue | Share (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Basic Property Management Services** | 2,814.8 | 79.8 | 2,630.8 | 75.9 | +7.0% | | **Value-added Services** | 668.7 | 19.0 | 780.5 | 22.5 | -14.3% | | **Other Businesses** | 43.9 | 1.2 | 55.8 | 1.6 | -21.3% | | **Total Revenue** | 3,527.4 | 100.0 | 3,467.1 | 100.0 | +1.7% | Gross Profit and Gross Profit Margin Composition (RMB million) | Business Segment | 2022 Gross Profit | Gross Profit Margin (%) | 2021 Gross Profit | Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | **Basic Property Management Services** | 593.2 | 21.1 | 602.2 | 22.9 | | **Value-added Services** | 221.3 | 33.1 | 323.6 | 41.5 | | **Other Businesses** | 29.8 | 68.0 | 33.8 | 60.7 | | **Total** | 844.3 | 23.9 | 959.6 | 27.7 | - **Impairment losses** on receivables, contract assets, and financial guarantees amounted to **RMB 84.18 million**, a significant increase from RMB 12.9 million last year, mainly due to stricter provisions for trade receivables and credit impairment on a financial guarantee for Beijing Universal[574](index=574&type=chunk) - **Administrative expenses decreased by 14.4% YoY** to RMB 174 million, primarily due to reduced staff costs[576](index=576&type=chunk) - As of the end of 2022, the company held **RMB 2.56 billion in cash and equivalents** with a gearing ratio of 28%, maintaining a sound financial position[241](index=241&type=chunk)[237](index=237&type=chunk) [Future Prospects](index=16&type=section&id=Future%20Prospects) The company will focus on growth and cost efficiency in 2023 by deepening client relationships, expanding through M&A, and driving digital transformation [Strategic Planning](index=16&type=section&id=Strategic%20Planning) The company's long-term strategy focuses on organizational, business, and capability building, driven by value distribution and management culture - The company's long-term strategic direction is **"Three Constructions (Organization, Business, Capability) and Two Drivers (Value Distribution, Management Culture)"**[534](index=534&type=chunk) - The core of the 2023 business deployment is **"Focus on Growth, Reduce Costs and Increase Efficiency,"** supported by talent development and digital transformation[535](index=535&type=chunk) [Business Development Strategy](index=17&type=section&id=Business%20Development%20Strategy) The company will drive growth by deepening its main business, expanding through M&A, and productizing value-added services while improving efficiency via digitalization - **Main Business Track**: Continue to deepen relationships with strategic clients through full life-cycle management, aligning with their development to create value and expand market share[513](index=513&type-chunk)[536](index=536&type=chunk) - **Extended Business**: Adhere to a multi-engine drive, continuing to expand into new tracks through joint ventures and M&A, focusing on quality targets in first-tier and new first-tier cities[515](index=515&type=chunk)[537](index=537&type=chunk) - **Value-added Business**: Focus on productizing professional value-added services, targeting the needs of property owners' living circles and corporate administrative demands to enhance overall profitability[516](index=516&type=chunk) - **Cost Reduction and Efficiency Improvement**: Achieve transparent project management and improve operational efficiency through digital transformation; enhance organizational effectiveness and achieve flatter management through business and functional integration[518](index=518&type=chunk)[539](index=539&type=chunk) [Use of IPO Proceeds](index=28&type=section&id=Use%20of%20IPO%20Proceeds) The company utilized approximately HK$1.09 billion of its net IPO proceeds by year-end 2022 and reallocated the remaining funds for business expansion Use of IPO Proceeds and Utilization Status (as of December 31, 2022) | Main Category | Reallocated Planned Use (HK$ million) | Reallocated Share (%) | Amount Utilized (HK$ million) | Unutilized Amount (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | **Business Expansion** | 1,853.8 | 55.00% | 522.4 | 1,331.4 | | **Development of IT Systems** | 402.7 | 12.00% | 91.2 | 311.5 | | **Facility Upgrades** | 168.0 | 5.00% | 131.1 | 36.9 | | **Talent Acquisition and Training** | 601.7 | 18.00% | 131.4 | 470.3 | | **Working Capital and General Purposes** | 336.0 | 10.00% | 209.2 | 126.8 | | **Total** | **3,362.2** | **100.00%** | **1,085.3** | **2,276.9** | [Material Investments, Acquisitions, and Disposals](index=31&type=section&id=Material%20Investments,%20Acquisitions,%20and%20Disposals) During the reporting period, the company terminated an agreement to sell its entire equity interest in Shenzhen Zhuotou Microfinance Co, Ltd - The company terminated the plan to sell its equity in Shenzhen Zhuotou Microfinance Co, Ltd, due to the failure to obtain approval from the industry's competent authority[101](index=101&type=chunk) - According to the termination agreement, the company has refunded the total consideration of **RMB 305.1 million** to the buyer without interest[101](index=101&type=chunk) [Directors and Senior Management](index=32&type=section&id=Directors%20and%20Senior%20Management) This chapter details the backgrounds of the company's Board of Directors and senior management team, showcasing their extensive professional experience - Executive Directors Mr Li Xiaoping (Chairman) and Ms Guo Ying are responsible for the company's overall strategic planning and daily operations[103](index=103&type=chunk)[665](index=665&type=chunk) - Non-executive Directors Mr Wang Dou and Mr Wang Yinhu primarily provide guidance on the Group's overall development[640](index=640&type=chunk)[641](index=641&type=chunk) - Independent Non-executive Directors Mr Huang Mingxiang, Mr Kam Chi Shing, and Ms Liu Xiaolan are responsible for providing independent advice on the Group's operations and management[643](index=643&type=chunk)[644](index=644&type=chunk)[645](index=645&type=chunk) - The senior management team includes COO Mr Yang Zhidong, CFO Mr Jia Jie, and CHRO Ms Zhang Yan, who possess extensive industry experience in their respective fields[675](index=675&type=chunk)[702](index=702&type=chunk)[649](index=649&type=chunk) [Report of the Directors](index=38&type=section&id=Report%20of%20the%20Directors) This report covers statutory disclosures for 2022, including business performance, dividend policy, share capital, and connected transactions [Business Review and Dividends](index=38&type=section&id=Business%20Review%20and%20Dividends) The Board recommends a final dividend of HK 6.09 cents per share and discloses customer and supplier concentration for the year - The Board recommends the payment of a final dividend of **HK 6.09 cents per share**, subject to approval at the Annual General Meeting[143](index=143&type=chunk) - As of the end of 2022, the **top five customers accounted for 32.7% of total revenue**, with the largest customer contributing 18.1%; the **top five suppliers accounted for 27.4% of total purchases**, with the largest supplier at 7.3%[124](index=124&type=chunk)[147](index=147&type=chunk) [Share Capital, Reserves, and Directors](index=41&type=section&id=Share%20Capital,%20Reserves,%20and%20Directors) The company's distributable reserves amounted to approximately RMB 3.086 billion, and all independent non-executive directors met independence requirements - As of December 31, 2022, the company's distributable reserves amounted to approximately **RMB 3.086 billion**[688](index=688&type=chunk) - The company has received confirmation of independence from each Independent Non-executive Director and considers them all to be independent[129](index=129&type=chunk) [Directors' and Shareholders' Interests](index=44&type=section&id=Directors'%20and%20Shareholders'%20Interests) This section discloses the interests of directors and substantial shareholders, with the controlling shareholder Mr Li Hua holding a 59.04% interest Substantial Shareholders' Interests (as of December 31, 2022) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage (%) | | :--- | :--- | :--- | :--- | | **Mr Li Hua** | Interest in a controlled corporation | 721,801,000 | 59.04 | | **Ms Xiao Xingping** | Controlled corporation/Beneficial/Spouse interest | 129,192,000 | 10.58 | | **Mr Li Yuan** | Interest in a controlled corporation | 63,000,000 | 5.30 | - The company has a Pre-IPO Share Option Scheme, under which a total of **28,200,000 share options** were granted on September 9, 2020[178](index=178&type=chunk) - The vesting of share options is linked to the profit growth attributable to the Group's shareholders; as the vesting conditions for 2022 were not met, the corresponding one-third of the options for that year have lapsed[164](index=164&type=chunk)[180](index=180&type=chunk)[184](index=184&type=chunk) [Connected Transactions](index=56&type=section&id=Connected%20Transactions) This section details ongoing connected transactions with related parties, primarily the controlling shareholder, which were confirmed to be fair and reasonable Major Continuing Connected Transactions and Actual Amounts for 2022 (RMB) | Transaction Type | 2022 Actual Amount (million) | Counterparty | | :--- | :--- | :--- | | **Property Management Services** | 400.51 | Mr Li's Companies | | **System Supply and Installation Services** | 172.65 | Mr Li's Companies | | **Trading of Construction Materials** | 126.81 | Mr Li's Companies | | **Leasing of Commercial Properties** | 78.92 | Mr Li's Companies | | **Marketing and Promotion Services** | 49.45 | Mr Li's Companies | | **Acquisition of Parking Space Usage Rights** | 33.53 | Mr Li's Companies | - The Independent Non-executive Directors have reviewed all non-exempt continuing connected transactions and confirmed they were conducted on normal commercial terms in the ordinary course of business and are in the overall interests of the shareholders[352](index=352&type=chunk) - The company's auditor has issued a letter on the continuing connected transactions in accordance with the Listing Rules, confirming that the transactions were approved by the Board, consistent with the pricing policy, conducted under the relevant agreements, and did not exceed the annual caps[332](index=332&type=chunk)[352](index=352&type=chunk) [Corporate Governance Report](index=64&type=section&id=Corporate%20Governance%20Report) This report confirms the company's compliance with the Corporate Governance Code and details its governance structure, board committees, and risk management systems [Board of Directors and Governance Structure](index=64&type=section&id=Board%20of%20Directors%20and%20Governance%20Structure) The company complied with the Corporate Governance Code, with a board structure that meets independence and diversity requirements and ensures a clear separation of roles - The company has complied with all applicable code provisions of the Corporate Governance Code throughout 2022[359](index=359&type=chunk) - The Board consists of 7 members, including **3 Independent Non-executive Directors (over one-third)**, meeting Listing Rules requirements; **women comprise 29% of the Board**[377](index=377&type=chunk)[407](index=407&type-chunk)[404](index=404&type=chunk) - The roles of Chairman and General Manager are held by different individuals with clear responsibilities, in compliance with the Corporate Governance Code[406](index=406&type=chunk) - A total of **18 board meetings** were held during the year, with **100% attendance** from all directors[411](index=411&type=chunk) [Board Committees](index=71&type=section&id=Board%20Committees) The company has established Audit, Nomination, and Remuneration Committees, each with a majority of independent directors, to assist the Board - The **Audit Committee**, chaired by Mr Kam Chi Shing, consists of one non-executive director and three independent non-executive directors, and oversees financial reporting, risk management, and internal controls[393](index=393&type=chunk)[416](index=416&type=chunk) - The **Nomination Committee**, chaired by Mr Li Xiaoping, consists of the chairman and three independent non-executive directors, and is responsible for reviewing the board structure and nominating directors[397](index=397&type=chunk)[398](index=398&type=chunk) - The **Remuneration Committee**, chaired by Mr Huang Mingxiang (an INED), consists of Mr Li Xiaoping and two other independent non-executive directors, and is responsible for reviewing and recommending remuneration policies for directors and senior management[420](index=420&type=chunk)[400](index=400&type=chunk) [Risk Management and Internal Control](index=75&type=section&id=Risk%20Management%20and%20Internal%20Control) The company has a four-tier risk management framework, with the Board holding ultimate responsibility for maintaining and reviewing the system's effectiveness - The company has established a **four-tier risk management and internal control framework** comprising the Board, Audit Committee, Senior Management, and Risk Control Department[444](index=444&type=chunk) - The Board has **ultimate responsibility for the effectiveness of the system** and has conducted an annual review covering financial, operational, and compliance controls[595](index=595&type=chunk)[425](index=425&type=chunk) - The Group has an internal audit function (performed by the Risk Control Department) to supervise and evaluate the establishment and implementation of the internal control system[448](index=448&type=chunk) [Auditor and Shareholder Communication](index=78&type=section&id=Auditor%20and%20Shareholder%20Communication) Total remuneration paid to the auditor KPMG was RMB 6.225 million, and the company maintains effective communication with shareholders through various channels Auditor's Remuneration for FY2022 (RMB '000) | Service Category | Amount | | :--- | :--- | | **Audit Services** | 3,000 | | **Other Services** | 3,225 | | **Total** | 6,225 | - The company has adopted a shareholder communication policy to ensure effective communication with shareholders through channels such as the company website and general meetings[452](index=452&type=chunk)[453](index=453&type=chunk) [Independent Auditor's Report](index=80&type=section&id=Independent%20Auditor's%20Report) The auditor issued an unmodified opinion on the financial statements, highlighting three key audit matters related to expected credit losses and goodwill impairment [Audit Opinion](index=80&type=section&id=Audit%20Opinion) The auditor, KPMG, concluded that the consolidated financial statements give a true and fair view of the Group's financial position and performance - The auditor issued an **unmodified (clean) opinion** on the consolidated financial statements[458](index=458&type=chunk) [Key Audit Matters](index=80&type=section&id=Key%20Audit%20Matters) The audit identified three key matters: expected credit loss on trade receivables, potential goodwill impairment, and credit loss on a financial guarantee - **Key Audit Matter 1**: Expected credit loss provision for trade receivables; the net balance was **RMB 936 million**, and its impairment assessment involves significant management judgment[460](index=460&type=chunk) - **Key Audit Matter 2**: Potential impairment of goodwill; the carrying amount was **RMB 253 million**, and its impairment assessment relies on significant estimates of future cash flows, with an impairment of **RMB 28.16 million** recognized this year[463](index=463&type=chunk) - **Key Audit Matter 3**: Expected credit loss provision for a financial guarantee issued; arising from the acquisition of Beijing Universal, an expected credit loss of **RMB 62.37 million** was measured, involving significant judgment on the collateral's liquidation value[486](index=486&type=chunk) [Consolidated Financial Statements](index=89&type=section&id=Consolidated%20Financial%20Statements) This section presents the audited consolidated financial statements for the year ended December 31, 2022, including all primary statements and detailed notes [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=89&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company generated revenue of RMB 3.53 billion and profit attributable to equity holders of RMB 403 million in 2022 2022 Consolidated Income Statement Summary (RMB '000) | Item | 2022 | 2021 | | :--- | :--- | :--- | | **Revenue** | 3,527,396 | 3,467,066 | | **Gross Profit** | 844,346 | 959,627 | | **Operating Profit** | 606,818 | 777,603 | | **Profit Before Tax** | 600,028 | 765,735 | | **Profit for the Year** | 426,455 | 547,481 | | **Attributable to Equity Holders of the Company** | 403,494 | 510,088 | | **Basic Earnings Per Share (RMB Cents)** | 33.1 | 41.7 | [Consolidated Statement of Financial Position](index=91&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2022, the company's total assets were RMB 5.01 billion, with total liabilities of RMB 1.42 billion and net assets of RMB 3.59 billion 2022 Consolidated Statement of Financial Position Summary (RMB '000) | Item | 2022 | 2021 | | :--- | :--- | :--- | | **Non-current Assets** | 942,057 | 559,117 | | **Current Assets** | 4,070,075 | 4,513,019 | | **Total Assets** | 5,012,132 | 5,072,136 | | **Current Liabilities** | 1,224,506 | 1,473,479 | | **Non-current Liabilities** | 198,327 | 132,225 | | **Total Liabilities** | 1,422,833 | 1,605,704 | | **Total Equity** | 3,589,299 | 3,466,432 | [Consolidated Statement of Changes in Equity](index=93&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity increased from RMB 3.47 billion to RMB 3.59 billion, driven by profits for the year, partially offset by dividend payments [Consolidated Statement of Cash Flows](index=95&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Net cash from operating activities decreased significantly to RMB 192 million, and year-end cash stood at RMB 2.56 billion 2022 Consolidated Statement of Cash Flows Summary (RMB '000) | Item | 2022 | 2021 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 192,087 | 810,056 | | **Net Cash Used in Investing Activities** | (165,134) | (412,240) | | **Net Cash Used in Financing Activities** | (447,066) | (638,623) | | **Net Decrease in Cash and Cash Equivalents** | (420,113) | (240,807) | | **Cash and Cash Equivalents at End of Year** | 2,564,428 | 3,007,300 | [Notes to the Consolidated Financial Statements](index=96&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies and breakdowns of items in the primary financial statements [Five-Year Financial Summary](index=176&type=section&id=Five-Year%20Financial%20Summary) This section presents key financial data from 2018 to 2022, showing sustained revenue growth and a significant expansion in assets post-IPO Five-Year Financial Data Summary (RMB million) | Indicator | 2018 | 2019 | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 1,223.2 | 1,836.0 | 2,525.1 | 3,467.1 | 3,527.4 | | **Gross Profit** | 294.2 | 433.4 | 663.8 | 959.6 | 844.3 | | **Profit for the Year** | 156.6 | 233.6 | 355.9 | 547.5 | 426.5 | | **Profit Attributable to Equity Holders of the Company** | 125.8 | 178.5 | 325.0 | 510.1 | 403.5 | | **Total Assets** | 1,380.8 | 2,551.9 | 4,930.0 | 5,072.1 | 5,012.1 | | **Total Equity** | 362.8 | 455.9 | 3,256.3 | 3,466.4 | 3,589.3 |

Financial Performance - The company's profit attributable to owners for 2022 was approximately RMB 403.49 million, a decrease of 20.9% compared to RMB 510.09 million in 2021[13]. - The core net profit for 2022 was RMB 495.15 million, representing a year-on-year decline of about 6.0%[13]. - Total revenue for 2022 was approximately RMB 3,527.40 million, an increase of 1.7% from RMB 3,467.07 million in 2021[17]. - The company's net profit for the year was RMB 426.46 million, down from RMB 547.48 million in 2021, with basic earnings per share decreasing from 41.7 to 33.1[30]. - The company's total comprehensive income for the year was RMB 403.70 million, compared to RMB 481.46 million in 2021[32]. - The company reported a revenue of RMB 3,527.40 million for 2022, with a cost of sales of RMB 2,683.05 million, resulting in a gross profit of RMB 844.35 million[31]. - The gross profit was RMB 844.35 million, a decrease of 12.0% compared to the same period last year, with a comprehensive gross profit margin of 23.9%, down 3.8 percentage points from 2021[171]. - The net profit attributable to the parent company was RMB 403.49 million, a decline of 20.9%, with a net profit margin of 12.1%, down 3.7 percentage points from 2021[171]. Dividends and Shareholder Returns - The proposed final dividend for the year ended December 31, 2022, is HKD 0.0609 per share, with a total annual dividend of HKD 0.2069 per share, down 42.5% from HKD 0.3600 in 2021[14]. - The proposed final dividend for the year attributable to ordinary equity shareholders was RMB 172,801,000, representing a per share dividend of HKD 0.1738, an increase from HKD 0.0951 in 2021[95]. - The company maintained a high dividend payout ratio of 70% for the year-end dividend, reflecting a commitment to providing stable returns to shareholders[155]. Assets and Liabilities - Cash and cash equivalents as of December 31, 2022, amounted to RMB 2,564.43 million, a decrease from RMB 3,007.30 million in the previous year[21]. - The total assets minus current liabilities as of December 31, 2022, were RMB 3,787.63 million, compared to RMB 3,598.66 million in 2021[35]. - Total assets as of December 31, 2022, were RMB 5,012,132 thousand, a decrease of 1.18% from RMB 5,072,136 thousand in 2021[43]. - Total liabilities decreased to RMB 1,422,833 thousand in 2022, down 11.36% from RMB 1,605,704 thousand in 2021[43]. - The company's non-current assets, including investment properties, totaled RMB 942.06 million, compared to RMB 559.12 million in 2021[21]. Revenue Streams - Property management service revenue was RMB 2,814,793,000, up from RMB 2,630,752,000 in 2021, representing a growth of 6.98%[58]. - Business property services accounted for 61.4% of total revenue, while value-added services contributed 19.0%[144]. - The revenue from property management services was RMB 2,814.79 million, representing a 7.0% increase from RMB 2,630.75 million in 2021[195]. Corporate Governance and Compliance - The company has established an audit committee to oversee financial reporting and risk management[4]. - The company has adopted corporate governance practices to enhance shareholder value and accountability[2]. - The company maintained compliance with all applicable corporate governance codes throughout the year[25]. - The company plans to continue reviewing and monitoring its corporate governance practices to ensure compliance with the corporate governance code[25]. Strategic Initiatives and Future Outlook - The company anticipates a robust recovery growth in 2023, with management confident in achieving strong performance[106]. - The company plans to deepen strategic customer relationships and expand into new business sectors through acquisitions, aiming to establish 1-2 new business lines[105]. - The company is focusing on talent development and digital transformation to enhance overall profitability[105]. - The company aims to enhance governance levels and promote business transformation through digital transformation to improve operational efficiency[156]. - The company is actively pursuing mergers and acquisitions to strengthen its market presence and enhance competitive advantages in various sectors[170]. Operational Metrics - The company experienced a 23% year-over-year increase in contracted area, reaching approximately 70 million square meters, with 661 projects[146]. - The managed area increased by 30% year-over-year to approximately 53.8 million square meters, with 587 projects under management[146]. - The number of new strategic customer contracts increased to 28, contributing 52.6% to the total contract amount of RMB 996.5 million[151]. - The company signed new acquisitions totaling 4,505 thousand square meters in 2022, increasing the total area under management to 53,760 thousand square meters by year-end[173].

Business Operations and Services - The company managed over 68.94 million square meters of contracted area across 2 countries and 15 provinces, with 530 management projects in 43 key cities[4]. - The company focuses on providing customized one-stop integrated operation management services, covering the entire life cycle of asset maintenance and comprehensive service solutions[3]. - The company serves numerous landmark office buildings and high-tech enterprises, offering services from marketing management to equipment management and business management[6]. - The company has established a smart cloud platform for facility management, integrating hardware and IT systems for intelligent lifecycle management and cost control[6]. - The company aims to enhance profitability through value-added services and innovative high-end business services, focusing on the development and practice of commercial real estate[3]. - The company is expanding into new sectors such as healthcare, urban services, and government public construction through mergers and acquisitions[3]. - The company primarily serves Fortune 500 companies and high-tech enterprises, providing customized facility management solutions[6]. - The company emphasizes the establishment of an ecosystem for the growth of people, enterprises, and real estate through professional services and innovative mechanisms[4]. - The company has a comprehensive property management service model that includes commercial property management, public property, and residential apartments[5]. - The company is committed to achieving asset preservation and appreciation through a complete business chain of real estate lifecycle operation management[3]. - The company has successfully entered the healthcare sector, managing multiple hospital logistics projects, providing intelligent and efficient clinical support services[12]. - The company has integrated modern technology into its operations, launching the "Zhuo Yi Hui" software system for hospital management, enhancing data management and operational efficiency[12]. - The company is expanding its public property services, focusing on government, education, and healthcare sectors, offering comprehensive operational solutions[6]. - The company has introduced the "Five Hearts" service model, aiming to enhance customer satisfaction and improve living experiences in residential properties[8]. - The company is developing value-added services, including asset management and building mechanical and electrical services, to enhance operational efficiency and customer satisfaction[9]. - The company is pursuing a dual growth strategy through both organic growth and mergers and acquisitions, focusing on enhancing regional brand influence[11]. - The company has established a market organization framework to explore new sectors, including urban services and healthcare logistics, to drive growth[12]. - The company is leveraging its real estate development experience to provide systematic property management services across various cities[6]. - The company is focusing on creating a green and intelligent mechanical and electrical service ecosystem to drive performance growth[9]. - The company has partnered with local property management firms to enhance service capabilities and foster collaborative growth[11]. Financial Performance - For the six months ended June 30, 2022, the company's operating revenue reached RMB 1,862.93 million, representing a year-on-year growth of 12.7%[16]. - The gross profit was RMB 529.76 million, with a year-on-year growth of 8.4%, resulting in a gross margin of 28.4%, a decrease of 1.2 percentage points compared to the same period in 2021[16]. - The company's net profit attributable to shareholders was RMB 311.01 million, reflecting a year-on-year increase of 15.0%, maintaining a net profit margin of 17.6%[16]. - The total contracted area as of June 30, 2022, was approximately 68.94 million square meters, a year-on-year increase of about 35.1%[17]. - The managed area reached approximately 50.08 million square meters, representing a year-on-year growth of about 42.3%[17]. - Revenue from the Greater Bay Area accounted for 51.3% of total revenue, with a total income of RMB 696.1 million for the six months ended June 30, 2022[20]. - The company’s strategic focus on business property management resulted in a 12.9% increase in revenue from business properties compared to the same period in 2021[23]. - The proportion of value-added services in total revenue increased to 25.5%[16]. - Revenue from third-party business property management increased by 17.4% compared to the same period in 2021, reaching RMB 1,061,228 thousand[24]. - Public property revenue decreased by 47.8% compared to the same period in 2021, indicating challenges in this segment[24]. - Residential property revenue increased by 36.0% compared to the same period in 2021, driven by the growth in real estate development[24]. - Value-added services revenue reached approximately RMB 475.63 million, representing a year-on-year growth of about 32.5% and accounting for approximately 25.5% of total revenue[28]. - Building electromechanical services revenue grew by RMB 118.89 million, with a growth rate of 125.0% compared to the previous year[29]. - High-end service brand "Zhuopin Business" revenue increased by 81.3%, indicating strong demand in the market[29]. - The company aims to enhance market share and project density among top-tier internet clients, exemplified by securing a global headquarters project with a total construction area of 960,000 square meters[27]. - The strategic customer division was established to deepen relationships and optimize development mechanisms, leading to exponential business growth[26]. - The overall data indicators improved by 31.0% year-on-year as of June 30, 2022[35]. - The company aims to enhance market share and contract retention rate through lifecycle management of strategic clients in FM integrated facility management services[37]. - The company plans to focus on three main business areas: FM integrated facility management, PM high-end office services, and residential property services to drive steady business growth[37]. Investments and Acquisitions - The company is actively promoting joint ventures and acquisitions, focusing on reasonable valuations and historical performance of partners[39]. - The company completed the acquisition of 75% of Beijing Global for a cash consideration of RMB 225,000,000, which was finalized in January 2022[166]. - The company acquired an additional 2% stake in Henan Huangjin for RMB 2,080,000, gaining control over the property management service provider[167]. - The fair value of identifiable net assets acquired from the recent acquisitions was RMB 94,816,000, with goodwill recognized amounting to RMB 139,376,000[168]. - The company raised approximately HKD 3,359.5 million from the issuance of new shares, with HKD 854.7 million utilized by June 30, 2022[78]. - Strategic acquisitions and investments account for 70% of the planned use of funds, with a total of HKD 2,351.7 million allocated[78]. - As of June 30, 2022, HKD 369.7 million has been utilized for strategic acquisitions, leaving HKD 1,646.1 million unutilized[78]. - The company plans to invest HKD 134.3 million in developing the FM smart management information platform over the next two to three years[79]. - The company is cautious in strategic expansion due to the downturn in the domestic real estate market, impacting acquisition activities[84]. Employee and Talent Management - The company has established a talent academy in 2017 to continuously cultivate strategic talents and professional project teams[34]. - The group employed a total of 15,610 full-time employees in China and 66 in India, representing an increase from 12,550 and 75 employees respectively as of June 30, 2021, indicating a growth of approximately 24% in China[86]. - The group provides competitive compensation packages, including salaries, bonuses, and various social insurance benefits for its employees[86]. - The stock option plan aims to incentivize eligible participants to enhance performance and retain talent contributing to the group's long-term development[93]. - 5% of the total funds are designated for talent acquisition and training, with HKD 168.0 million planned for strategic recruitment[83]. Governance and Compliance - The company has adopted the Corporate Governance Code and has complied with all applicable provisions during the reporting period[107]. - The audit committee, consisting of four members, is responsible for reviewing and supervising the company's financial reporting system and internal controls[110]. - The independent auditor's review was conducted under the Hong Kong Institute of Certified Public Accountants' standards[119]. - The company is required to prepare interim financial reports in accordance with the relevant provisions of the Hong Kong Listing Rules[118]. Shareholder Information - The company declared an interim dividend of HKD 0.146 per ordinary share for the six months ended June 30, 2022, to be distributed on November 29, 2022[104]. - Major shareholder Mr. Li Hua controls 722,440,000 shares, accounting for 59.20% of the company's equity[115]. - Mr. Li Xiaoping holds 118,120,000 shares through spousal interest, representing approximately 9.68% of the company's equity[112]. - Ms. Xiao Xingping holds 117,900,000 shares, which is approximately 9.66% of the company's equity[115]. - The total number of shares available for issuance under the share option plan is 120,000,000 shares, representing approximately 9.83% of the issued share capital as of the report date[97]. - The stock option plan allows for participation from full-time employees, directors, and other qualified individuals deemed to contribute to the company[95]. Financial Position and Assets - The total assets as of June 30, 2022, amounted to RMB 4,971,408 thousand, compared to RMB 4,513,019 thousand as of December 31, 2021[122]. - The company’s equity attributable to shareholders was RMB 3,582,624 thousand as of June 30, 2022, compared to RMB 3,445,548 thousand at the end of 2021[123]. - The company reported a total comprehensive income of RMB 319,037 thousand for the period, compared to RMB 259,038 thousand in the same period of 2021[46]. - The company’s cash and cash equivalents were RMB 3,407.30 million, an increase of 13.3% from RMB 3,007.30 million as of December 31, 2021[76]. - The company’s total equity as of June 30, 2022, was RMB 3,658,894,000, an increase from RMB 3,466,432,000 at the beginning of the year[125]. - The company’s retained earnings increased to RMB 645,030,000 as of June 30, 2022, up from RMB 506,822,000 at the start of the year[125]. - The company’s financial liabilities measured at amortized cost increased to RMB 841,624,000 from RMB 482,670,000, representing a growth of 74.5%[163]. Cash Flow and Financial Activities - Operating cash generated was RMB 265,727,000, a decrease of 53.8% from RMB 576,185,000 in the same period of 2021[126]. - Net cash generated from operating activities was RMB 155,467,000, down 69.8% compared to RMB 513,979,000 in the prior year[126]. - Cash flows from investing activities showed a net inflow of RMB 334,699,000, compared to a net outflow of RMB 64,267,000 in the previous year[126]. - The company did not incur any bank loans or borrowings in the current period, compared to RMB 78,763,000 in the previous year[127]. - The company recognized a loss provision of RMB 16,509,000 for trade and other receivables for the six months ended June 30, 2022, compared to RMB 4,687,000 in the same period of 2021, indicating a significant increase in credit risk[142].

Industry Growth and Market Focus - The property management industry has experienced rapid growth due to continuous policy support, with commercial property management becoming a key focus area [5]. - As of December 2021, commercial properties accounted for 45% of the third-party market expansion in the property management sector, significantly outpacing residential properties [6]. - The commercial property management sector is characterized by rational growth and controllable capital expenditures, reflecting its market-oriented nature [8]. - The integration and differentiation in the commercial property sector are expected to accelerate, driven by the involvement of leading property management companies [7]. Company Strategy and Services - The company aims to extend the lifespan of commercial assets, reduce depreciation costs, and lower operating expenses, achieving asset preservation and appreciation [8]. - The company focuses on providing comprehensive facility management services, aiming to deliver full lifecycle asset maintenance and service solutions [7]. - The company focuses on commercial real estate management, providing services such as marketing management, equipment selection, and facility management for high-end office buildings and business parks [12]. - The company has established a recognized service system and business logic over 20 years, gaining the trust and ongoing cooperation of leading enterprises [8]. - The company emphasizes user-centric and customized service innovations to enhance competitive advantages and brand influence [8]. Financial Performance - In 2021, the company's operating revenue reached RMB 3,467.1 million, representing a year-on-year growth of 37.3% [23]. - The gross profit was RMB 959.6 million, with a year-on-year increase of 44.6%, resulting in a gross margin of 27.7%, up 1.4 percentage points from 2020 [23]. - The net profit attributable to shareholders was RMB 510.1 million, reflecting a year-on-year growth of 57.0% and a net profit margin of 15.8%, an increase of 1.7 percentage points from 2020 [23]. - Business property services accounted for 56.6% of total revenue, while value-added services contributed 22.5% [23]. - Revenue from business property management increased by 22.3% in 2021 compared to 2020 [31]. Expansion and Market Presence - The company managed over 56.8 million square meters of contracted area across 521 management projects in 50 key cities in China [10]. - The company expanded its geographical presence to 50 cities across China, focusing on economically developed regions such as the Greater Bay Area and Yangtze River Delta [26]. - The company aims to enhance market share and project density in target cities through strategic client expansion [34]. - The company is expanding into new sectors such as healthcare, education, and urban services through acquisitions to capture emerging market opportunities [51]. Talent and Organizational Development - The company plans to double its employee count from 12,277 in 2021 to over 25,000 by 2025, with a key talent reserve increasing from over 200 to over 1,000 [47]. - The company is committed to talent development, establishing a structured training mechanism to support rapid business expansion and enhance management capabilities [54]. - The company has established a competitive compensation package for employees, including bonuses, salaries, allowances, and retirement contributions [140]. Governance and Management - The board consists of 2 executive directors, 2 non-executive directors, and 3 independent non-executive directors [193]. - The independent non-executive directors confirmed their independence and will not participate in the daily operations of the group [136]. - The company adopted a board diversity policy to enhance efficiency and maintain high standards of corporate governance [194]. - The roles of the chairman and the CEO are clearly separated, with Mr. Li serving as chairman and Ms. Guo as CEO [200]. Sustainability and Corporate Responsibility - The management team emphasized a focus on sustainability initiatives, aiming for a 30% reduction in carbon footprint by 2025 [108]. - The company emphasizes sustainable development as a key component of its business strategy, integrating this philosophy into every operational detail [128]. - The company has faced various risks and uncertainties, which are discussed in the annual report, indicating a proactive approach to risk management [128]. Future Outlook and Projections - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12% [103]. - New product launches are expected to contribute an additional $50 million in revenue in the upcoming year [104]. - The company plans to enhance customer engagement through digital platforms, expecting a 15% increase in customer retention rates [109].

Financial Data and Key Metrics - Revenue in 2021 reached RMB 3.47 billion, with a year-on-year growth of 37.3% and a three-year CAGR of 37.4% [2] - Gross profit increased to RMB 960 million, up 44.6% YoY, with a gross margin of 27.7%, up from 26.3% in 2020 [3] - Net profit grew to RMB 547 million, a 53.7% YoY increase, with a net profit margin of 15.8%, up 1.7 percentage points from 2020 [3] - Operating cash flow improved significantly, with a cash flow to net profit ratio of 1.48x [3] - Total contracted area reached 56.77 million sqm, up 27% YoY, while managed area increased to 41.20 million sqm, up 29% YoY [3] Business Line Data and Key Metrics - Basic property services contributed 75.9% of total revenue, while value-added services accounted for 22.5%, up from previous years [2] - Commercial property services contributed 57% of total revenue, with public and industrial property services at 10%, and residential property services at 9% [2] - Value-added services revenue grew 118% YoY to RMB 781 million, driven by asset services, building electromechanical services, enterprise services, and professional value-added services [9][10] - Building electromechanical services revenue reached RMB 230 million, up 109% YoY, becoming a key growth driver [10] Market Data and Key Metrics - 85% of managed areas are located in Tier 1 and new Tier 1 cities in China [4] - The Greater Bay Area and Yangtze River Delta regions accounted for 66% of managed areas [4] - The company expanded into key cities such as Wuhan, Hefei, Changsha, and Qingdao, leveraging its major client strategy [8] Company Strategy and Industry Competition - The company focuses on dual growth drivers: FM (Facility Management) and PM (Property Management) services, with new contracts worth RMB 527 million in 2021, up 47% YoY [6] - Strategic clients like Tencent and Alibaba contributed significantly, with Tencent's new contracts doubling in size and Alibaba's projects achieving high satisfaction ratings [7][8] - The company plans to explore new business areas such as healthcare, education, and government projects, while continuing to expand value-added services [16] - Digital transformation and talent development are key priorities, with investments in IoT and smart management platforms to enhance operational efficiency [11] Management Commentary on Operating Environment and Future Outlook - The company expects a 35% CAGR in net profit from 2020 to 2024, driven by market expansion, acquisitions, and value-added services [24] - The management emphasized the importance of sustainable growth, leveraging the company's brand reputation, client resources, and operational capabilities [21] - The company aims to achieve unique market competitiveness by 2026-2027, focusing on organizational efficiency, platform sharing, and professional business development [14] Other Important Information - The company maintained a high dividend payout ratio of 70% in 2021, with a commitment to a minimum 50% payout ratio over the next three years [5][28] - Major shareholders and management increased their holdings by 3.68 million shares, investing RMB 32.77 million, demonstrating confidence in the company's future [5] - The company actively participated in social responsibility initiatives, including donations of RMB 625 million and involvement in 402 public welfare projects [5] Q&A Session Summary Question: What are the company's growth targets for the next 2-3 years? - The company expects a 35% CAGR in net profit from 2020 to 2024, driven by market expansion, acquisitions, and value-added services [24] Question: What is the average market share in new demand from key clients? - The company holds a 30% market share in major client segments, with some clients contributing over 71% of new contracts [19] Question: How does the company plan to differentiate itself in the competitive property management industry? - The company focuses on high-quality services, digital transformation, and strategic client relationships to maintain its competitive edge [20][21] Question: What are the future plans for dividend payouts and value-added services? - The company plans to maintain a dividend payout ratio of at least 50% over the next three years, with value-added services expected to grow significantly [28][29] Question: How does the company view the impact of the real estate market on its business? - The company believes that its focus on non-residential property services and strategic client relationships will mitigate risks associated with the real estate market [39][40]

Revenue and Growth - The total revenue for the six months ended June 30, 2021, was RMB 1,652.85 million, representing a 42.2% increase from RMB 1,162.04 million for the same period in 2020[13]. - Revenue from property management services in the Greater Bay Area was RMB 682.85 million, accounting for 53.8% of total revenue for the six months ended June 30, 2021[6]. - The revenue from basic property management services was RMB 1,269.18 million, up 25.6% from RMB 1,010.41 million in the previous year[14]. - The revenue from value-added services surged to RMB 359.01 million, a 200.4% increase compared to RMB 119.53 million in the same period last year, accounting for 21.7% of total revenue[12][15]. - The property management services segment generated revenue of RMB 1,431,020 thousand, up from RMB 1,120,395 thousand, reflecting a growth of 27.7%[98]. - The company reported a pre-tax profit of RMB 397,244 thousand for the six months ended June 30, 2021, compared to RMB 240,569 thousand for the same period in 2020, an increase of 65.2%[99]. Managed Area and Contracts - The total managed area as of June 30, 2021, was approximately 35.20 million square meters, representing a 32.6% increase compared to the same period in 2020[7]. - The contracted area as of June 30, 2021, was approximately 51.04 million square meters, reflecting a growth of 37.8% year-over-year[7]. - The company added 3,931 thousand square meters of new contracts during the six months ended June 30, 2021, compared to 3,046 thousand square meters in the same period of 2020[5]. - The company reported a termination of contracts amounting to 751 thousand square meters during the reporting period[5]. - The total area managed in the Yangtze River Delta was 8,595 thousand square meters, contributing RMB 276.36 million to revenue, which is 21.8% of total revenue[6]. - The total area managed in other regions was 12,587 thousand square meters, generating RMB 309.97 million in revenue, accounting for 24.4% of total revenue[6]. Profitability and Expenses - The gross profit for the group was RMB 488.88 million, a 56.5% increase from RMB 312.43 million in 2020, with a gross margin rising from 26.9% to 29.6%[19]. - The sales cost for the group was RMB 1,163.97 million, a 37.0% increase from RMB 849.61 million in the previous year, primarily due to the expansion of managed areas[18]. - The gross margin for basic property management services was 24.7%, slightly down from 25.1% in the previous year, attributed to the cessation of social insurance contribution relief policies[20]. - Selling and marketing expenses rose by 157.8% to RMB 81.2 million, mainly due to increased costs associated with seeking quality business targets and expanding third-party business through acquisitions[23]. - Administrative expenses increased by 5.4% to RMB 899.8 million, attributed to the hiring of new staff to support rapid business growth[24]. Cash Flow and Financial Position - As of June 30, 2021, the group's cash and cash equivalents amounted to RMB 3,513.11 million, a 6.0% increase from RMB 3,314.13 million as of December 31, 2020, primarily due to increased operating cash inflows[42]. - The net cash generated from operating activities for the six months ended June 30, 2021, was approximately RMB 513.98 million, compared to RMB 153.63 million for the same period in 2020, attributed to expanded operational scale and increased operating profits[44]. - The net cash outflow from investing activities for the six months ended June 30, 2021, was approximately RMB 64.27 million, a significant decrease from RMB 860.28 million in the same period of 2020, primarily due to prior year repayments from related parties[44]. - The company's debt-to-asset ratio increased to 35.2% from 33.9% at the end of the previous year[39]. - The group's total equity as of June 30, 2021, was RMB 3,394.35 million, reflecting a 4.24% increase from RMB 3,256.29 million as of December 31, 2020, mainly due to profits generated during the year[42]. Employee and Corporate Governance - As of June 30, 2021, the company had a total of 12,550 full-time employees in China and 75 in India, compared to 11,532 and 72 respectively at the end of 2020[55]. - The company aims to provide training for key staff and strategically recruit personnel to support business growth[16]. - The company has maintained compliance with all applicable corporate governance codes during the reporting period[62]. - No significant changes in the board of directors' information have been reported as of the date of the interim report[66]. Shareholder Information and Dividends - Major shareholder Li Hua holds 721,115,000 shares, representing approximately 58.99% of the company's equity[76]. - The interim dividend declared is HKD 0.1862 per share, to be distributed on November 29, 2021[59]. - The company declared dividends amounting to RMB 97,793 thousand for the previous year, impacting retained earnings[85]. - The company declared dividends payable to equity shareholders amounting to RMB 189,773,000 for the six months ended[134]. Strategic Plans and Investments - The company aims to enhance management efficiency and strengthen technology applications to improve profitability in the future[11]. - The company plans to strategically acquire or invest in service providers to enhance value-added services, including mechanical and electrical services, indoor air treatment, and smart building services[48]. - The planned use of net proceeds from the IPO includes 70.0% for business expansion, amounting to RMB 2,351.7 million, with RMB 638.5 million already utilized as of June 30, 2021[48]. - The company plans to invest 10.0% of the net proceeds, approximately RMB 134.3 million, in developing the FM Smart Management Information Platform over the next two to three years[49].