Financial Performance - The company reported a revenue of RMB 316,237 thousand for the year 2021, representing a year-on-year growth of 23.2%[10] - Gross profit for 2021 was RMB 114,541 thousand, with a significant increase of 47.1% compared to the previous year[10] - The gross margin improved to 36.2% in 2021, up from 30.3% in 2020, reflecting a 5.9 percentage point increase[10] - Net profit attributable to shareholders reached RMB 54,626 thousand, marking a 67.3% increase year-on-year[10] - The company's total revenue for the fiscal year 2021 reached RMB 316.2 million, a year-on-year increase of 23.2% from RMB 256.7 million in 2020[48] - The company reported a net profit margin of 12% for 2021, an increase from 10% in the previous year, indicating improved operational efficiency[114] Revenue Breakdown - Revenue from property management services was RMB 172.4 million, accounting for 54.5% of total revenue, up from 49.9% in 2020[28] - Non-owner value-added services generated RMB 90.4 million, representing 28.6% of total revenue, an increase from 26.9% in 2020[28] - Community value-added services contributed RMB 35.7 million, which is 11.3% of total revenue, down from 16.6% in 2020[28] - Property management services generated revenue of RMB 172.4 million in fiscal year 2021, up 34.5% from RMB 128.2 million in 2020, accounting for 54.5% of total revenue[48] - Revenue from residential property management services increased by 53.9% to RMB 131.0 million in fiscal year 2021, compared to RMB 85.1 million in 2020[31] - Non-residential property management services revenue was RMB 41.4 million, representing 24.0% of total property management revenue in fiscal year 2021[33] Assets and Liquidity - Cash and cash equivalents increased to RMB 318,169 thousand by the end of 2021, up from RMB 192,195 thousand in 2020[13] - Current assets rose to RMB 461,034 thousand in 2021, compared to RMB 252,520 thousand in 2020[13] - The current ratio improved significantly to 2.59 in 2021, indicating a strong liquidity position[13] - Current assets increased by 82.6% to RMB 4.61 billion as of December 31, 2021, compared to RMB 2.53 billion a year earlier[68] - Cash and cash equivalents rose by 65.6% to RMB 3.18 billion as of December 31, 2021, from RMB 1.92 billion in FY2020[68] - Trade and other receivables increased by 148.7% to RMB 1.27 billion as of December 31, 2021, compared to RMB 511 million in FY2020[73] Business Expansion and Strategy - The company successfully expanded its contracted construction area to over 10 million square meters during the reporting period[17] - The company aims to enhance its core business and explore partnerships with quality property brands to expand service scale[21] - The company plans to implement smart upgrades in community development and old community operations to establish business characteristics[21] - The strategic focus is on a "one body, two wings, two products" model, emphasizing mergers and acquisitions to expand business scale and enhance comprehensive service capabilities[20] - The company plans to expand its business scale and market share in the Yangtze River Delta region through various channels[43] - The company has successfully completed the acquisition of a regional competitor, which is expected to contribute an additional $10 million in annual revenue[99] Listing and Capital Utilization - The company raised approximately HKD 133.2 million through its listing on the Hong Kong Stock Exchange on January 18, 2021[17] - The company has received a net amount of approximately HKD 133.2 million from its listing, with about 48% allocated for acquiring property management companies in the Yangtze River Delta region, specifically in Hangzhou[96] - Approximately 12% of the listing proceeds will be invested in expanding community pilot programs, with no funds utilized as of the report date and full utilization expected by December 31, 2023[96] - The company plans to allocate about 15% of the proceeds to create smart communities using advanced technology, with no funds utilized as of the report date and full utilization expected by December 31, 2023[96] - Another 15% of the funds will be used to explore and expand community value-added services, with no funds utilized as of the report date and full utilization expected by December 31, 2023[96] - Approximately 10% of the proceeds will provide funding for operational capital and other general corporate purposes, with 67.9% already utilized for intermediary service fees related to the listing, and full utilization expected by December 31, 2023[96] Operational Efficiency and Customer Engagement - The company reported a significant increase in operational efficiency, with a 15% reduction in operational costs year-over-year[99] - User engagement metrics improved, with a 20% increase in active users compared to the previous quarter[99] - Customer satisfaction ratings improved to 85%, reflecting the effectiveness of recent service enhancements[99] Future Outlook - The company anticipates a revenue growth of 25% for the next fiscal year, driven by new product launches and market expansion strategies[99] - The company has set a revenue guidance of RMB 1.8 billion for the fiscal year 2022, reflecting an expected growth of 20%[114] - New product launches are expected to contribute an additional RMB 300 million in revenue in 2022, driven by innovative features and market demand[114] - The company plans to expand its market presence in three new cities, aiming for a 10% increase in market share by the end of 2022[114] - The company is investing RMB 200 million in R&D for new technologies aimed at enhancing service efficiency and customer satisfaction[114] - A strategic acquisition of a local competitor is anticipated to close in Q2 2022, expected to increase the company's market share by 5%[114] Governance and Compliance - The board has not recommended any final dividend for the fiscal year 2021, consistent with the previous year[83] - The company has maintained sufficient public float, with at least 25% of its total issued share capital held by the public as of the report date[91] - The audit committee has reviewed the annual performance and the accounting policies adopted by the company, ensuring compliance with financial reporting standards[86] Shareholder Information - As of December 31, 2021, Mr. Yu holds 2,280,000,000 shares, representing approximately 71.25% of the company's equity[186] - The company has a stock option plan that allows eligible participants to acquire up to 10% of the total issued shares, which amounts to 320,000,000 shares[190] - No stock options have been granted, exercised, or canceled under the stock option plan from the listing date to the report date[195] - The company has not purchased, sold, or redeemed any of its listed securities from the listing date to December 31, 2021[197] - There are no provisions for preemptive rights in the company's articles of association or under Cayman Islands law[198]

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 139,370,000, representing a 19.4% increase from RMB 116,729,000 in the same period of 2020[28]. - Gross profit for the same period was RMB 47,738,000, up 48.3% from RMB 32,183,000 in 2020, with a gross margin of 34.3%[28]. - Profit attributable to equity shareholders was RMB 23,434,000, a 44.7% increase compared to RMB 16,190,000 in the previous year[28]. - The group achieved total revenue of RMB 1.394 billion, a 19.5% increase from RMB 1.167 billion in 2020[69]. - The net profit for the period was RMB 23.5 million, a significant increase of 43.3% from the previous year's RMB 16.4 million[38]. - Operating profit increased to RMB 31,624,000, up 43.9% from RMB 21,936,000 year-on-year[139]. - Pre-tax profit increased by 43.1% to RMB 32.2 million from RMB 22.5 million, consistent with the growth rate of gross profit[89]. - Basic and diluted earnings per share were RMB 0.75, compared to RMB 0.67 in the same period last year[139]. Assets and Liabilities - Total assets grew by 55.4% to RMB 437,037,000 from RMB 281,161,000 at the end of 2020[31]. - As of June 30, 2021, current assets amounted to RMB 408.8 million, a 61.9% increase from RMB 252.5 million on December 31, 2020[93]. - The total equity as of June 30, 2021, was RMB 281,057 thousand, an increase from RMB 117,273 thousand as of December 31, 2020[149]. - The total liabilities of the reportable segments as of June 30, 2021, were RMB 147,762,000, a slight decrease from RMB 155,661,000 as of December 31, 2020[175]. Cash Flow and Liquidity - Cash and cash equivalents increased by 45.5% to RMB 279,712,000 from RMB 192,195,000 as of December 31, 2020[31]. - The company reported a net cash outflow from investing activities of RMB (27,148) thousand for the six months ended June 30, 2021, compared to a net cash inflow of RMB 2,303 thousand for the same period in 2020[152]. - The cash and cash equivalents increased by RMB 87,814 thousand for the six months ended June 30, 2021, compared to an increase of RMB 15,263 thousand for the same period in 2020[152]. - The bank cash balance increased significantly to RMB 292,937 thousand as of June 30, 2021, from RMB 200,679 thousand as of December 31, 2020, reflecting a growth of 46.0%[199]. Business Operations - The company has established 13 subsidiaries and 19 branches across 19 cities in China, providing property management services for 49 properties[48]. - Revenue from property management services amounted to RMB 79.5 million, while non-owner value-added services generated RMB 40.1 million[53]. - The company is actively exploring management models for aging communities, aiming to become a leading property management service provider in the Yangtze River Delta region[48]. - The company is implementing an AIoT strategy to enhance service delivery and operational efficiency, focusing on smart community applications[42]. - The group plans to expand its service radius for community value-added services and utilize smart IoT to enhance operational efficiency[68]. Employee and Administrative Costs - The company employed 740 staff as of June 30, 2021, compared to 603 staff a year earlier, with employee costs amounting to RMB 33.1 million, up from RMB 24.5 million in the same period of 2020[107]. - Administrative expenses rose by 23.5% to RMB 14.7 million from RMB 11.9 million, primarily due to business expansion and increased staff numbers[86]. - Employee costs increased to RMB 33,132,000 in the six months ended June 30, 2021, from RMB 24,466,000 in the same period of 2020, representing a growth of approximately 35%[180]. Shareholder Information - As of June 30, 2021, Mr. Yu Jianwu holds 2,280,000,000 shares, representing 71.25% of the company's equity[119]. - The board does not recommend any interim dividend for the six months ended June 30, 2021[113]. - The company has adopted a share option scheme aimed at incentivizing eligible participants, including employees and directors, to enhance performance[122]. Market Outlook and Strategy - The property management industry is expected to continue recovering in the second half of 2021, supported by favorable government policies[36]. - The company is positioned to benefit from the national push for high-quality and diversified service upgrades in the property management sector[37]. - The company plans to allocate approximately 48% of the net proceeds from its listing, around HKD 133.2 million, for acquisitions and investments in property management services in the Yangtze River Delta region[105].

[Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section provides a concise overview of the company's financial performance, assets, and liabilities over recent fiscal years [Performance Summary](index=5&type=section&id=Performance%20Summary) Company's 2020 revenue increased by 15.4% year-on-year to RMB 257 million, but profit for the year decreased by 6.8% year-on-year to RMB 32.85 million, with gross profit margin rising to 30.3% while net profit margin declined to 12.8% Historical Performance Summary (For the year ended December 31) | Metric | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenue (RMB thousand)** | 83,960 | 132,950 | 222,474 | 256,703 | | Revenue YoY Growth Rate | N/A | 58.3% | 67.3% | 15.4% | | **Gross Profit (RMB thousand)** | 24,975 | 37,576 | 64,869 | 77,858 | | Gross Profit Margin | 29.7% | 28.3% | 29.2% | 30.3% | | **Profit for the Year (RMB thousand)** | 13,965 | 20,889 | 35,236 | 32,852 | | Profit Margin | 16.6% | 15.7% | 15.8% | 12.8% | [Assets and Liabilities Summary](index=6&type=section&id=Assets%20and%20Liabilities%20Summary) As of end-2020, total assets increased to RMB 281 million, total liabilities were RMB 164 million, cash and cash equivalents significantly increased to RMB 192 million, and current ratio improved from 1.44 to 1.54, indicating good liquidity and a net cash position Historical Assets and Liabilities Summary (As at December 31) | Metric | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Assets (RMB thousand)** | 102,495 | 170,689 | 215,658 | 281,161 | | **Total Liabilities (RMB thousand)** | 76,713 | 162,798 | 131,719 | 163,888 | | **Cash and Cash Equivalents (RMB thousand)** | 68,546 | 65,864 | 137,559 | 192,195 | | **Total Equity attributable to Owners of the Company (RMB thousand)** | 25,782 | 7,891 | 83,345 | 115,995 | | **Current Ratio** | 1.51 | 0.85 | 1.44 | 1.54 | - Gearing ratio is not applicable as the company maintained a net cash position from 2017 to 2020[31](index=31&type=chunk) [Chairman's Statement](index=7&type=section&id=Chairman's%20Statement) The Chairman's Statement reviews 2020 achievements and challenges, highlighting the successful listing on HKEX in January 2021, raising approximately HKD 133.2 million net proceeds, business expansion, COVID-19 community prevention contributions, and future growth plans under favorable policies [Business Development and Listing](index=7&type=section&id=Business%20Development%20and%20Listing) The company successfully listed on January 18, 2021, raising approximately HKD 133.2 million net proceeds, while business grew steadily with GFA under management reaching 8.2 million sq.m., a 39.0% year-on-year increase, and total contracted GFA reaching 11.3 million sq.m., alongside active national expansion and diversified project types - The company listed on the Main Board of the Stock Exchange of Hong Kong on January 18, 2021, raising net proceeds of approximately **HKD 133.2 million**[35](index=35&type=chunk) - As at December 31, 2020, the Group's GFA under management reached **8.2 million sq.m.**, a **39.0% year-on-year increase**; total contracted GFA reached **11.3 million sq.m.**[35](index=35&type=chunk) [COVID-19 Response and Social Responsibility](index=7&type=section&id=COVID-19%20Response%20and%20Social%20Responsibility) During the 2020 COVID-19 pandemic, the company responded swiftly, undertaking community prevention responsibilities, especially in the complex Caihe Street Future Community project, achieving "zero suspected, zero confirmed, zero unmanaged" prevention results, and earning the "Anti-Epidemic Pioneer" title - The company was awarded the "Anti-Epidemic Pioneer" title for its outstanding contributions during the pandemic, achieving "three zeros" (zero suspected, zero confirmed, zero unmanaged) in the complex environment of 36 old residential communities with over 80,000 permanent residents under its management[36](index=36&type=chunk) [Policy Opportunities and Future Outlook](index=8&type=section&id=Policy%20Opportunities%20and%20Future%20Outlook) The report notes that the "Notice on Strengthening and Improving Residential Property Management" issued by ten ministries and commissions at the end of 2020 brings policy benefits to the industry, and the company will seize opportunities to focus on old community renovation, mergers and acquisitions, smart property, and "property services + lifestyle services" models to achieve scale and brand operation, creating greater returns for shareholders - The company will closely follow policies, actively participate in future community development and old community renovation, and establish business characteristics[38](index=38&type=chunk)[39](index=39&type=chunk) - The company plans to develop property service applications, explore the "property services + lifestyle services" model, linking online platforms with offline value-added services to seek new business growth points[38](index=38&type=chunk) [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed review of the company's operational performance, financial results, and strategic outlook for the reporting period [Performance Review](index=9&type=section&id=Performance%20Review) As a well-known comprehensive property management service provider in Zhejiang Province, the company ranked 56th among China's Top 100 Property Service Enterprises in 2020, managing 46 properties in 17 cities with total GFA under management increasing by 37.9% to 8.2 million sq.m., and total revenue for FY2020 growing by 15.4% to RMB 257 million, primarily from four business lines Changes in GFA Under Management and Number of Projects | Metric | December 31, 2019 | December 31, 2020 | | :--- | :--- | :--- | | GFA under Management (thousand sq.m.) | 5,948 | 8,152 | | Number of Projects under Management | 29 | 46 | Revenue Composition for FY2019-2020 (RMB thousand) | Business Line | 2019 | % of Total Revenue | 2020 | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 95,659 | 43.0% | 128,183 | 49.9% | | Non-owner Value-added Services | 51,548 | 23.2% | 69,129 | 26.9% | | Community Value-added Services | 54,587 | 24.5% | 42,462 | 16.6% | | Other Businesses | 20,680 | 9.3% | 16,929 | 6.6% | | **Total** | **222,474** | **100.0%** | **256,703** | **100.0%** | [Property Management Services](index=10&type=section&id=Property%20Management%20Services) As a core business, property management service revenue increased by 34.0% year-on-year to RMB 128 million, accounting for 49.9% of total revenue, driven by an increase in managed projects and business expansion, with significant progress in reducing reliance on related parties as revenue from independent third-party developers surged by 378.8% year-on-year - Revenue from residential property management services increased by **44.2%** from RMB 59.0 million in FY2019 to **RMB 85.1 million** in FY2020[46](index=46&type=chunk) - Property management revenue from properties developed by independent third parties significantly increased by **378.8%** from RMB 8.0 million in FY2019 to **RMB 38.3 million** in FY2020[46](index=46&type=chunk) Property Management Revenue and GFA Under Management by Developer Type | Developer Type | 2020 Revenue (RMB thousand) | 2020 GFA Under Management (thousand sq.m.) | 2019 Revenue (RMB thousand) | 2019 GFA Under Management (thousand sq.m.) | | :--- | :--- | :--- | :--- | :--- | | Songdu Co., Ltd. Group | 89,919 | 4,797 | 87,695 | 3,352 | | Independent Third Parties | 38,264 | 3,355 | 7,964 | 2,596 | [Non-owner Value-added Services](index=12&type=section&id=Non-owner%20Value-added%20Services) This business, primarily providing consulting and sales assistance services to real estate developers, served as an important growth engine, with revenue increasing by 34.2% year-on-year to RMB 69.1 million, and the company securing 19 reserve projects totaling 3.1 million sq.m. and 5 new projects from independent third-party developers by year-end - Revenue from non-owner value-added services increased by **34.2%** from RMB 51.5 million in FY2019 to **RMB 69.1 million** in FY2020[52](index=52&type=chunk) [Community Value-added Services](index=12&type=section&id=Community%20Value-added%20Services) Community value-added services revenue was RMB 42.5 million, a 22.2% year-on-year decrease, mainly due to reduced demand for standardized rough-house renovation services as the Zhejiang Provincial Government encouraged delivery of fitted-out homes, prompting the company to transform this business by developing online applications and upgrading management systems - Revenue from community value-added services decreased by **22.2%** from RMB 54.6 million in FY2019 to **RMB 42.5 million** in FY2020[64](index=64&type=chunk) - The company has established a centralized back-end control center and collaborated with software companies to develop lifestyle service applications to upgrade value-added service management and expand service offerings[53](index=53&type=chunk) [Other Businesses](index=13&type=section&id=Other%20Businesses) Other businesses, including hotel and long-term rental apartments, generated total revenue of RMB 16.9 million, an 18.4% year-on-year decrease, with hotel business revenue at RMB 15.0 million primarily impacted by the pandemic, and the company adjusting its long-term rental apartment business model towards a lighter-asset, centralized management service - Hotel business FY2020 revenue was **RMB 15.0 million**, and long-term rental apartment business revenue was **RMB 1.9 million**[56](index=56&type=chunk)[57](index=57&type=chunk) - The decrease in other business revenue was primarily attributable to fewer hotel customers due to the pandemic[64](index=64&type=chunk) [Future Outlook](index=13&type=section&id=Future%20Outlook) The company's future focus will be on four strategic directions: deepening presence in the Yangtze River Delta, seizing opportunities from government-driven future community and old community renovation, leveraging advanced technology to create smart communities, and expanding community value-added service types to meet diverse customer needs - The company plans to expand its management scale and brand value in old community renovation by participating in government-driven future community pilot projects[58](index=58&type=chunk)[60](index=60&type=chunk) - The company plans to leverage advanced technology to create smart communities and expand value-added services such as renovation, maintenance, and housekeeping, with this business expected to continue growing[59](index=59&type=chunk)[60](index=60&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) In FY2020, total revenue increased by 15.4% year-on-year to RMB 257 million, gross profit grew by 20.0% to RMB 77.9 million, and gross profit margin improved by 1.1 percentage points to 30.3%, while profit before tax and profit for the year decreased by 6.5% due to a significant increase in listing expenses, though adjusted net profit increased by 12.9% year-on-year, with robust financial health reflected in cash and cash equivalents growing by 39.7% to RMB 192 million and current ratio improving to 1.54 Key Financial Indicators for FY2019-2020 (RMB million) | Metric | 2019 FY | 2020 FY | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 222.5 | 256.7 | +15.4% | | **Gross Profit** | 64.9 | 77.9 | +20.0% | | Gross Profit Margin | 29.2% | 30.3% | +1.1 ppt | | **Administrative Expenses** | 19.2 | 36.2 | +88.5% | | Of which: Listing Expenses | 8.7 | 19.0 | +118.4% | | **Profit for the Year** | 35.2 | 32.9 | -6.5% | | **Adjusted Net Profit (excluding listing expenses)** | 41.7 | 47.1 | +12.9% | Liquidity Indicators (As at December 31) | Metric | 2019 | 2020 | | :--- | :--- | :--- | | **Cash and Cash Equivalents (RMB million)** | 137.6 | 192.2 | | **Current Ratio** | 1.44 | 1.54 | [Human Resources and Other Disclosures](index=19&type=section&id=Human%20Resources%20and%20Other%20Disclosures) As of end-2020, the Group employed 694 staff with staff costs of RMB 55.3 million, faced limited foreign exchange risk from HKD-denominated listing proceeds, and the Board did not recommend a final dividend for 2020, with the company completing its IPO on January 18, 2021, and experiencing executive director changes on March 1 post-reporting period - As at December 31, 2020, the Group employed a total of **694 staff**, with staff costs of **RMB 55.3 million**[93](index=93&type=chunk) - The Board did not recommend the payment of any final dividend for the year ended December 31, 2020[97](index=97&type=chunk) - Net proceeds from the listing of approximately **HKD 133.2 million** are planned for acquisition investments (48%), future community services (12%), smart community construction (15%), community value-added services (15%), and working capital (10%); as of the reporting date, only **8.3%** of the working capital portion had been utilized[105](index=105&type=chunk) [Directors and Senior Management](index=22&type=section&id=Directors%20and%20Senior%20Management) This section details the personal resumes of the company's Board members and senior management, including executive directors, independent non-executive directors, and the chief financial officer, covering their age, positions, responsibilities, educational backgrounds, and professional experience in property management, real estate, finance, and law [Directors' Report](index=32&type=section&id=Directors'%20Report) This report provides an overview of the company's business, financial performance, corporate governance, and other key disclosures for the reporting period [Business and Financial Overview](index=32&type=section&id=Business%20and%20Financial%20Overview) This section outlines the company's main businesses, including property management, non-owner value-added services, community value-added services, and other businesses, confirming the successful global offering on January 18, 2021, reiterating no recommendation for a final dividend for 2020, and mentioning the company's dividend policy, environmental policy, and providing a financial summary for the past four fiscal years - The company listed on the Main Board of the Stock Exchange of Hong Kong on January 18, 2021, issuing **800 million shares** and raising net proceeds of approximately **HKD 133.2 million**[146](index=146&type=chunk) - The Board did not recommend the payment of any final dividend for the year ended December 31, 2020[150](index=150&type=chunk) [Major Customers and Suppliers](index=34&type=section&id=Major%20Customers%20and%20Suppliers) The report discloses that in 2020, sales to the top five customers accounted for 54.8% of total revenue, an increase from 42.4% in 2019, indicating higher customer concentration, with the largest customer, Songdu Holdings Group, contributing 36.2% of revenue, while supplier concentration was lower, with purchases from the top five suppliers accounting for 25.9% of total purchases Customer and Supplier Concentration | Concentration Metric | 2019 | 2020 | | :--- | :--- | :--- | | **Top 5 Customers as % of Total Revenue** | 42.4% | 54.8% | | **Largest Customer as % of Total Revenue** | 35.7% | 36.2% | | **Top 5 Suppliers as % of Total Purchases** | 27.5% | 25.9% | | **Largest Supplier as % of Total Purchases** | 8.1% | 8.8% | [Directors and Equity Structure](index=36&type=section&id=Directors%20and%20Equity%20Structure) This section lists the Board members during and up to the reporting date, confirming the independence of independent non-executive directors, and details major shareholders' holdings, with controlling shareholder Mr. Yu Jianwu holding a total of 71.25% of the company's equity through trusts and holding companies - As at December 31, 2020, controlling shareholder Mr. Yu Jianwu held **2,280,000,000 shares**, representing **71.25%** of the total share capital, through a trust (trustee being CMB Wing Lung Trust) and his controlled entities (Shunji Group, Songdu Heyi)[194](index=194&type=chunk) [Share Option Scheme and Non-Competition Undertaking](index=40&type=section&id=Share%20Option%20Scheme%20and%20Non-Competition%20Undertaking) The company adopted a share option scheme on December 21, 2020, to incentivize and retain qualified participants, with a scheme limit of 10% of total issued shares post-listing, though no share options were granted as of the reporting date, and controlling shareholder Mr. Yu and Songdu Heyi entered into a non-competition undertaking to protect the Group from potential business competition - The company adopted a share option scheme on December 21, 2020, but no share options were granted, exercised, or cancelled from the listing date to the reporting date[197](index=197&type=chunk)[203](index=203&type=chunk) - Controlling shareholder Mr. Yu and Songdu Heyi entered into a non-competition undertaking, committing that they and their close associates will not engage in restricted businesses that compete with the Group's business[210](index=210&type=chunk)[211](index=211&type=chunk) [Continuing Connected Transactions](index=43&type=section&id=Continuing%20Connected%20Transactions) This section details the Group's continuing connected transactions with related parties, primarily Songdu Co., Ltd. Group, including property leasing, property management services, and non-owner and community value-added services, confirming all transactions were within annual caps and reviewed by independent non-executive directors Actual Amounts and Annual Caps of Major Continuing Connected Transactions for 2020 (RMB thousand) | Transaction Type | Counterparty | Annual Cap | Actual Transaction Amount | | :--- | :--- | :--- | :--- | | **Property Lease (Group as Lessee)** | Songdu Co., Ltd. Group | 4,450 | 2,890 | | **Property Management Services (Group as Service Provider)** | Songdu Co., Ltd. Group | 22,000 | 21,906 | | | Zhizhonghe Group | 1,670 | 1,598 | | | Songdu Sunshine Kindergarten | 70 | 36 | | **Value-added and Other Services (Group as Service Provider)** | Songdu Co., Ltd. Group | 70,300 | 69,313 | [Corporate Governance Report](index=49&type=section&id=Corporate%20Governance%20Report) This report details the company's corporate governance practices, including board structure, committee functions, and risk management, ensuring compliance with relevant codes and regulations [Board Structure and Operation](index=50&type=section&id=Board%20Structure%20and%20Operation) At the end of the reporting period, the Board comprised four executive directors and three independent non-executive directors, meeting listing rules for independent non-executive director numbers and proportion, with the company confirming compliance with the Corporate Governance Code and separating the roles of Chairman and CEO to ensure clear responsibilities, and disclosing Board meeting attendance since listing - From the listing date to the reporting date, the company has complied with all applicable code provisions under the Corporate Governance Code[247](index=247&type=chunk) - The roles of Chairman and Chief Executive Officer are held by different individuals (Ms. Yu Yun and Ms. Zhu Jin), complying with the Corporate Governance Code requirements[257](index=257&type=chunk) [Board Committees](index=53&type=section&id=Board%20Committees) The company established Audit, Remuneration, and Nomination Board Committees, with the Audit and Remuneration Committees composed entirely of independent non-executive directors, and the Nomination Committee having a majority of independent non-executive directors, all committee chairpersons being independent non-executive directors, and their terms of reference complying with the Corporate Governance Code, ensuring independence and professionalism in corporate governance - The Audit Committee comprises three independent non-executive directors, with Mr. Liu Guohui as Chairman, possessing the required accounting and relevant financial management expertise[267](index=267&type=chunk) - The Remuneration Committee comprises three independent non-executive directors, with Mr. Zhang Jingzhong as Chairman[270](index=270&type=chunk) - The Nomination Committee comprises the Board Chairman Ms. Yu Yun and three independent non-executive directors, with Ms. Yu Yun as Chairman[275](index=275&type=chunk) [Risk Management and Internal Control](index=57&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board confirms its ultimate responsibility for establishing and maintaining sound risk management and internal control systems, and has authorized the Audit Committee for continuous oversight, having reviewed the effectiveness of the Group's internal control and risk management systems, covering financial, operational, and compliance controls, and deemed them effective and appropriate - The Board confirms its responsibility to ensure the establishment and maintenance of sound risk management and internal control systems and has conducted an annual review of their effectiveness[289](index=289&type=chunk) - For the purpose of listing, the Board has reviewed the effectiveness of the Group's internal control systems and considers them effective and appropriate in terms of financial, operational, and compliance controls[291](index=291&type=chunk) [Independent Auditor's Report](index=61&type=section&id=Independent%20Auditor's%20Report) This report, issued by KPMG, provides an unqualified opinion on the company's consolidated financial statements for the year ended December 31, 2020, confirming they present a true and fair view of the Group's financial position, performance, and cash flows, and were properly prepared in accordance with International Financial Reporting Standards, identifying "Expected Credit Loss Provision for Trade Receivables" as a key audit matter [Audit Opinion](index=61&type=section&id=Audit%20Opinion) KPMG, the auditor, believes that the consolidated financial statements present a true and fair view of the Group's consolidated financial position as at December 31, 2020, and its financial performance and cash flows for the year then ended, and have been properly prepared in accordance with International Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance - The auditor issued an unqualified opinion on the consolidated financial statements[304](index=304&type=chunk) [Key Audit Matters](index=62&type=section&id=Key%20Audit%20Matters) The auditor identified "Expected Credit Loss Provision for Trade Receivables" as a key audit matter due to the significant management judgment and subjectivity involved in its recognition, and the material impact of trade receivables balance on the financial statements, with total trade receivables from third parties at RMB 29.0 million and an expected credit loss provision of RMB 7.9 million as of end-2020 - The key audit matter is "Expected Credit Loss Provision for Trade Receivables" due to significant management judgment involved in its recognition and the materiality of the balance[307](index=307&type=chunk)[311](index=311&type=chunk) [Consolidated Financial Statements and Notes](index=67&type=section&id=Consolidated%20Financial%20Statements%20and%20Notes) This section presents the Group's audited core financial statements for the year ended December 31, 2020, along with detailed explanatory notes, providing a comprehensive view of the company's financial performance, position, and cash flows [Key Financial Statements](index=67&type=section&id=Key%20Financial%20Statements) This section contains the Group's audited core financial statements for the year ended December 31, 2020, including the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, and Consolidated Statement of Cash Flows, which comprehensively reflect the company's financial performance, financial position, and cash flow situation Key Data from Consolidated Statement of Profit or Loss for FY2020 (RMB thousand) | Metric | 2019 | 2020 | | :--- | :--- | :--- | | **Revenue** | 222,474 | 256,703 | | **Gross Profit** | 64,869 | 77,858 | | **Operating Profit** | 45,066 | 42,407 | | **Profit Before Tax** | 46,516 | 43,524 | | **Profit for the Year** | 35,236 | 32,852 | | **Profit attributable to Owners of the Company** | 35,142 | 32,658 | Key Data from Consolidated Statement of Financial Position as at End-2020 (RMB thousand) | Metric | 2019 | 2020 | | :--- | :--- | :--- | | **Total Assets** | 215,658 | 281,161 | | Non-current Assets | 30,769 | 28,641 | | Current Assets | 184,889 | 252,520 | | **Total Liabilities** | 131,719 | 163,888 | | Current Liabilities | 128,263 | 163,880 | | Non-current Liabilities | 3,456 | 8 | | **Total Equity** | 83,939 | 117,273 | | **Equity attributable to Owners of the Company** | 83,345 | 115,995 | [Notes to Financial Statements](index=71&type=section&id=Notes%20to%20Financial%20Statements) The notes to financial statements provide detailed explanations and supplementary information for key financial statement items, including revenue and segment reporting (Note 3), trade and other receivables (Note 16), and significant related party transactions (Note 27) - Note 3(b) discloses that the Group primarily operates in China, with all revenue and non-current assets located in China, and businesses are divided into three reportable segments: property management services and related value-added services, hotel business services, and long-term rental apartment business[468](index=468&type=chunk)[475](index=475&type=chunk) - Note 16 discloses that as at end-2020, net trade receivables amounted to **RMB 29.7 million**, of which **RMB 8.55 million** was from related parties and **RMB 21.15 million** from third parties[528](index=528&type=chunk)[530](index=530&type=chunk) - Note 27 details significant transactions with entities controlled by the controlling shareholder (e.g., Songdu Co., Ltd. Group), including **RMB 21.91 million** in property management service revenue, **RMB 49.02 million** in non-owner value-added service revenue, and **RMB 2.89 million** in variable lease payments[607](index=607&type=chunk)[612](index=612&type=chunk)