Financial Performance - The total revenue for the six months ended June 30, 2023, was approximately RMB 2,464.8 million, a decrease of about 3.9% compared to RMB 2,565.3 million for the same period in 2022[2]. - Revenue from property management services was approximately RMB 1,944.7 million, representing a growth of about 10.8% from RMB 1,754.5 million in the same period of 2022[2]. - The gross profit for the period was approximately RMB 563.5 million, down about 17.0% from RMB 678.6 million in the same period of 2022, resulting in a gross profit margin of 22.9%[2]. - The net profit for the period was approximately RMB 216.1 million, with profit attributable to the owners of the company being approximately RMB 189.5 million[2]. - Earnings per share for the period were RMB 0.29, down from RMB 0.55 in the same period of 2022[4]. - The company reported a decrease in operating profit to approximately RMB 239.2 million from RMB 411.9 million in the same period of 2022[4]. - The company reported a net loss of RMB 3,086 thousand for other income/expenses, compared to a gain of RMB 4,596 thousand in the previous year[21]. - The actual income tax expense for the six months ended June 30, 2023, was RMB 50,168 thousand, with an effective tax rate of 18.8%, up from 12.3% in the previous year[22][23]. Assets and Liabilities - The total assets as of June 30, 2023, amounted to approximately RMB 8,608.0 million, compared to RMB 8,356.8 million as of December 31, 2022[5]. - The total liabilities as of June 30, 2023, were approximately RMB 3,036.7 million, compared to RMB 2,956.4 million as of December 31, 2022[7]. - As of June 30, 2023, the company had cash and cash equivalents of approximately RMB 2,851.5 million[2]. - The company's cash and cash equivalents as of June 30, 2023, totaled RMB 2,851,471,000, down from RMB 3,069,784,000 as of December 31, 2022, representing a decrease of approximately 7.11%[38]. - The provision for expected credit losses on trade receivables was RMB 1,148,988,000 as of June 30, 2023, compared to RMB 1,029,509,000 as of December 31, 2022, reflecting an increase of about 11.56%[37]. Revenue Breakdown - Revenue is derived from space property services, local living services, community value-added services, and digital technology services, with detailed revenue analysis provided for the six-month periods ending June 30, 2023, and 2022[16]. - Revenue from spatial property services was RMB 2,029,877 thousand, slightly up from RMB 2,013,850 thousand, while local life services dropped to RMB 9,204 thousand from RMB 13,103 thousand[17]. - Non-owner value-added services revenue decreased by approximately 68.6% to about RMB 85.2 million, primarily due to the severe liquidity crisis in the real estate sector[48]. - Local living services revenue grew by approximately 10.5% to about RMB 242.1 million, driven by a significant increase in meal service revenue, which surged by approximately 287.8% to about RMB 159.4 million[49]. - Community value-added services revenue decreased by approximately 43.9% to about RMB 160.0 million, influenced by a shift to high-growth, high-repayment rate businesses and a decline in advertising business due to economic recovery issues[49]. Acquisitions and Investments - The company has acquired two entities during the reporting period, which primarily provide space property services and community value-added services, enhancing its operational capabilities[15]. - The company acquired 100% of Chengdu Shuchuan Property Service Co., Ltd. and 100% of Shijiazhuang New Oriental Property Service Co., Ltd., with identifiable net assets totaling RMB 77,469,000, including recognized customer relationships valued at RMB 89,300,000[43]. - The company is cautious about acquisition opportunities despite having ample cash on hand, focusing on independent third-party quality property targets[54]. - The group plans to allocate approximately 60% of the net proceeds for selective strategic investments and acquisitions, amounting to HKD 3,996.5 million[93]. Market and Strategy - The company maintained its position as a leading third-party service provider in China, achieving top rankings in various categories, including Top 5 for comprehensive strength and growth potential in property services[44]. - The real estate market in China faced significant challenges, with new home sales and development investments declining, impacting the property service industry[44]. - The company is committed to a strategy of "profitable revenue and cash flow profit," focusing on high-quality, sustainable, and differentiated development[44]. - The company aims to enhance its service capabilities and market expansion efforts while navigating the industry's transition from rapid growth to high-quality development[44]. Operational Efficiency and Governance - The company has adopted new accounting standards effective from January 1, 2023, which may impact its financial reporting but are not expected to have a significant effect on the consolidated financial statements[10]. - The company’s major operating segments have been integrated into a single operating segment, streamlining resource allocation and performance assessment[15]. - The company is enhancing its internal control systems and employee incentive mechanisms to promote sustainable development and improve governance capabilities[47]. - The audit committee has been established to oversee the financial reporting process and internal control systems[105]. Employee and Administrative Costs - Employee benefit expenses were RMB 894,309 thousand, a decrease of 4.7% from RMB 938,476 thousand in the previous year[19]. - Administrative expenses increased by approximately 9.6% to about RMB 252.2 million for the six months ended June 30, 2023, driven by an increase in high-level employee numbers and related intermediary fees from acquisition due diligence[78]. - As of June 30, 2023, the group had approximately 12,661 employees, a slight decrease from 12,688 employees as of June 30, 2022[99]. Shareholder and Dividend Information - The company declared a dividend of RMB 424,351,000, with no interim dividend proposed for the six months ended June 30, 2023[43]. - The company repurchased a total of 2,682,200 H-shares at a total cost of RMB 26,766,000 during the six months ended June 30, 2023, with 1,556,800 shares subsequently canceled[103]. - No interim dividend was declared for the period, consistent with the previous year[105].

Financial Performance - Total revenue for 2022 was RMB 5,005.1 million, a decrease of 16.1% from RMB 5,968.4 million in 2021[11]. - Gross profit for 2022 was RMB 943.2 million, with a gross margin of 18.8%, down from 30.9% in 2021[11]. - The net loss for 2022 was RMB 1,839.9 million, resulting in a net loss margin of 36.8% compared to a profit margin of 18.0% in 2021[11]. - The weighted average return on equity for 2022 was (34.1%), a significant decline from 13.8% in 2021[11]. - Basic loss per share for 2022 was RMB (2.80), compared to earnings of RMB 1.62 per share in 2021[11]. - The company's total gross profit fell by approximately 48.9% to RMB 943.2 million in 2022, down from RMB 1,846.4 million in 2021, with the gross margin decreasing from 30.9% to 18.8%[61]. - The gross profit from space property services decreased from RMB 1,141.9 million in 2021 to RMB 730.8 million in 2022, with the gross margin dropping from 29.3% to 17.8%[62]. - The gross profit from community value-added services declined from RMB 621.8 million in 2021 to RMB 92.7 million in 2022, with the gross margin decreasing from 41.6% to 27.9%[62]. Assets and Equity - Total assets as of December 31, 2022, were RMB 8,356.8 million, down from RMB 10,439.5 million in 2021[12]. - Cash and cash equivalents decreased to RMB 3,069.8 million from RMB 4,922.3 million in 2021[12]. - Total equity as of December 31, 2022, was RMB 5,400.4 million, a decline from RMB 7,730.0 million in 2021[12]. Revenue Breakdown - Revenue from space property services increased by about 5.2% to RMB 4,101.2 million, driven by business expansion with an additional managed area of approximately 44.5 million square meters[33]. - Property management service revenue rose by approximately 28.2% to RMB 3,675.7 million, compared to RMB 2,866.6 million in 2021[33]. - Non-owner value-added service revenue decreased by about 58.8% to RMB 425.5 million, primarily due to the macroeconomic environment affecting the real estate industry[33]. - Community value-added service revenue dropped to RMB 332.9 million, down from RMB 1,494.7 million in 2021[33]. - Local life service revenue increased slightly to RMB 487.9 million from RMB 474.0 million in 2021[33]. Strategic Initiatives - The company aims to enhance its market expansion capabilities, being recognized in the top 10 for community value-added services among listed property service companies[13]. - The company aims to implement a "Service + Ecology, Service + Technology" strategy in 2023 to enhance its business matrix and sustainable development[21]. - The company plans to enhance its community value-added services, focusing on asset operation and sustainable community services to drive rapid business development[24]. - The company will strengthen its local life services, particularly in the catering sector, to tap into the trillion-level market[23]. - The company aims to provide integrated solutions combining property services, catering, and smart technology to enhance operational cash flow and profitability[28]. Awards and Recognition - The company received multiple awards in 2022, including being ranked among the top 10 in operational performance and service quality in China's property service industry[13]. - Kins Services has been recognized as a top 10 property service company in China for seven consecutive years, highlighting its sustainable growth and service quality[4]. - In 2022, the company was recognized as a top 10 comprehensive service provider in China and maintained the number one market share in Southwest China for six consecutive years[26]. Community Engagement - The company actively participated in firefighting efforts during a rare drought in Chongqing, demonstrating its commitment to community support[10]. - Kins Services provided comprehensive support during the Beijing Winter Olympics, receiving high praise from the International Olympic Committee[1]. Governance and Management - The company has appointed new non-executive directors to enhance its governance and strategic direction[90]. - The financial management team has undergone significant changes, with key personnel holding advanced qualifications and extensive experience in finance[89]. - The company has a strong focus on compliance with legal and regulatory requirements, reviewing policies and practices regularly[106]. - The board consists of at least three independent non-executive directors, ensuring strong independence[111]. Employee and Workforce - As of December 31, 2022, the group had approximately 12,227 employees, an increase from 11,700 employees as of December 31, 2021[85]. - Employee costs recognized for the year amounted to RMB 2,038.3 million, compared to approximately RMB 1,541.7 million for the previous year[85]. - The company has established talent management and training programs to provide career development guidance and promotion opportunities[129]. Future Outlook - The company anticipates a slowdown in industry growth due to external market changes and aims to focus on high-quality growth rather than blind expansion[27]. - The company plans to explore and evaluate quality acquisition targets to strengthen its market position in core regions[28]. - The company is committed to leveraging data-driven management to improve operational efficiency and enhance service quality for long-term customer satisfaction[28]. Related Party Transactions - The company has engaged in non-exempt continuing connected transactions during the year ended December 31, 2022[172]. - Independent non-executive directors confirmed that the ongoing related party transactions were conducted in the ordinary course of business and on normal commercial terms[182]. - The auditor confirmed that there were no issues regarding the compliance of ongoing related party transactions with the company's pricing policy and relevant agreements[183].

Financial Performance - The total revenue for 2022 was approximately RMB 5,005.1 million, a decrease of about 16.1% compared to RMB 5,968.4 million in 2021[2] - The annual gross profit was RMB 943.2 million, down approximately 48.9% from RMB 1,846.4 million in 2021, resulting in a gross margin of 18.8%[2] - The annual loss amounted to RMB 1,839.9 million, with a loss attributable to owners of RMB 1,818.5 million[2] - The net loss per share for the year was RMB (2.80), compared to earnings of RMB 1.62 per share in 2021[4] - The company reported a pre-tax loss of RMB (2,001,393) thousand for the year ended December 31, 2022, compared to a profit of RMB 1,320,853 thousand in 2021[29] - The company's net loss attributable to shareholders for the year ended December 31, 2022, was RMB 1,818,545,000, resulting in a basic and diluted loss per share of RMB (2.80) compared to a profit of RMB 1.62 in 2021[32][33] Revenue Breakdown - Revenue from space property services increased to RMB 4,101.2 million, up approximately 5.2% from RMB 3,900.2 million in 2021, with property management services generating RMB 3,675.7 million, a 28.2% increase from RMB 2,866.6 million in 2021[2] - Revenue from community value-added services revenue significantly decreased to RMB 160,842,000 in 2022 from RMB 995,419,000 in 2021, a decline of 83.8%[18] - Revenue from space property services was RMB 4,088,782,000 for 2022, up 7.3% from RMB 3,809,295,000 in 2021[18] - Revenue from community value-added services dropped by approximately 77.7% to RMB 332.9 million, primarily due to the impact of pandemic lockdowns and reduced consumer demand[64] - Local life service revenue increased by about 2.9% to RMB 487.9 million, with meal services experiencing over 300% growth to RMB 338.5 million[64] - Revenue from digital technology services decreased by approximately 16.5% to RMB 83.1 million, with a significant drop in income from services provided to the Jinke Group[64] Assets and Liabilities - The total assets decreased to RMB 8,356.8 million from RMB 10,439.5 million in 2021[5] - The total liabilities increased to RMB 2,956.4 million from RMB 2,709.5 million in 2021[7] - The company reported contract liabilities of RMB 740,199,000 as of December 31, 2022, compared to RMB 586,192,000 in 2021, an increase of 26.2%[19] - Trade receivables as of December 31, 2022, amounted to RMB 2,513,957,000, with an impairment provision of RMB 1,029,509,000, compared to RMB 2,082,210,000 and RMB 78,183,000 respectively in 2021[35][39] - The company reported trade payables of RMB 810,511,000 as of December 31, 2022, an increase from RMB 586,941,000 in 2021[42][43] Cash Flow and Liquidity - As of December 31, 2022, the company had cash and cash equivalents of approximately RMB 3,069.8 million[2] - Cash and cash equivalents as of December 31, 2022, totaled RMB 3,069,784,000, a decrease from RMB 4,922,276,000 in 2021[40] - The company's cash flow discount rate for customer relationships ranged from 11.7% to 14.5%, with an expected useful life of 10 years[51] - The company’s cash and cash equivalents in RMB decreased by approximately 25.5% from the previous year, reflecting a significant liquidity contraction[40] Employee and Administrative Expenses - Employee benefits expenses totaled RMB 2,038,331 thousand for the year ended December 31, 2022, compared to RMB 1,541,748 thousand in 2021, reflecting an increase of 32.3%[24] - Administrative expenses increased by 15.9% from approximately RMB 481.3 million to approximately RMB 557.9 million, driven by an increase in high-level employee numbers and due diligence costs related to acquisitions[94] Strategic Focus and Future Plans - The company continues to focus on expanding its space property services and digital technology services despite the overall revenue decline[17] - The company aims to focus on high-quality, sustainable, and differentiated growth, emphasizing profitable revenue and cash flow[57] - The company plans to deepen its presence in four key service areas: space property services, local life services, community value-added services, and digital technology services[57] - The company is strategically expanding its local life services, particularly in the catering sector, with a three-pronged development structure focusing on government and enterprise catering, high-end dining, and community dining[59] - The company aims to accelerate the pace of asset liquidation to improve cash flow while enhancing its asset operation capabilities in real estate, parking spaces, and retail shops[60] Governance and Compliance - The company has adopted and applied the corporate governance code, ensuring compliance with applicable provisions[114] - The audit committee has reviewed the annual performance for the year ended December 31, 2022, and reached an agreement with management on the financial results[119] - The financial statements for the year ended December 31, 2022, have been agreed upon by the external auditor, PwC, confirming consistency with the audited financial reports[120]

Company Performance - In the first half of 2022, the company maintained its position as a leading comprehensive smart property management service provider in China, ranking in the top 10 for comprehensive strength among property service companies for seven consecutive years [28]. - The company achieved a top 2 ranking in service quality and customer satisfaction among the top 100 property service companies in China, reflecting its industry-leading service capabilities [28]. - The total revenue for the first half of 2022 was RMB 2,565.3 million, a slight decrease of approximately 0.89% compared to RMB 2,588.2 million in the same period of 2021 [34]. - The company reported a profit of RMB 357,233 thousand for the six months ended June 30, 2022, compared to the previous period, contributing to the overall equity changes [129]. - Basic and diluted earnings per share were RMB 0.55, compared to RMB 0.80 in the same period last year [122]. - Total comprehensive income for the period was RMB 372,310 thousand, a decrease of 30.7% from RMB 536,257 thousand in the same period of 2021 [122]. Revenue Breakdown - Revenue from space property services increased by approximately 14.6% to RMB 2,026.0 million, driven by a 34.0% increase in property management service revenue to RMB 1,754.5 million [34]. - Revenue from community value-added services decreased by approximately 56.1% to RMB 285.3 million, primarily due to the impact of the COVID-19 pandemic on the tourism business [34]. - Revenue from local life services surged by approximately 93.2% to RMB 219.1 million, attributed to the rapid growth of meal service projects and acquisitions of professional meal service companies [34]. - Revenue from digital technology services decreased by approximately 38.8% to RMB 34.9 million, mainly due to reduced demand for smart site solutions [34]. - Revenue from residential property management services accounted for 79.9% of total property management revenue, down from 81.4% in the same period of 2021, reflecting a decrease of 1.5 percentage points [41]. Growth Strategies - The company is focusing on four growth curves: Space property services, Life value-added services, Catering local life services, and Technology digital intelligence services to enhance market competitiveness [29]. - The company plans to integrate high-quality resources and strengthen ecological collaboration to enhance its value-added service capabilities [26]. - The company aims to become a top local life service hotel operator by accelerating the layout of catering and hotel services [26]. - The company is committed to a differentiated development path, focusing on "service + ecology" and "service + technology" strategies [29]. - The company aims to deepen technology empowerment and promote digital transformation through innovative community consumption models and enhanced intelligent energy consumption control systems [65]. Financial Health - The company's gross profit decreased by approximately 19.3% from approximately RMB 841.4 million for the six months ended June 30, 2021, to approximately RMB 678.6 million for the six months ended June 30, 2022 [69]. - The gross margin dropped by about 6 percentage points from 32.5% for the six months ended June 30, 2021, to 26.5% for the six months ended June 30, 2022, mainly due to increased epidemic prevention costs and a decline in non-owner value-added service revenue [69]. - The company has established a cash flow planning mechanism to adjust its survival base to focus on real profits with cash flow [27]. - Cash and cash equivalents were approximately RMB 3,936.2 million as of June 30, 2022, down from RMB 4,922.3 million as of December 31, 2021 [84]. - Net cash outflow from operating activities was approximately RMB 307.2 million for the six months ended June 30, 2022, primarily due to decreased operating profit and slower cash collection from major clients [85]. Corporate Governance - The company has adopted and applied the corporate governance code as its own governance guidelines, ensuring high standards of corporate governance are maintained [104]. - The audit committee has been established according to the corporate governance code, with responsibilities including reviewing financial reporting procedures and internal control systems [106]. - The company aims to achieve a high level of corporate governance, which is crucial for its development and safeguarding shareholder interests [104]. - The company’s governance practices are designed to enhance responsiveness, efficiency, and effectiveness in business strategy formulation and execution [104]. - The company has confirmed compliance with all applicable provisions of the corporate governance code, except for the separation of the chairman and CEO roles [104]. Employee and Operational Metrics - As of June 30, 2022, the company had approximately 12,688 employees, an increase from 11,700 employees as of December 31, 2021 [101]. - The confirmed employee costs for the period amounted to RMB 938.5 million, compared to approximately RMB 697.8 million for the same period in 2021 [101]. - The company actively adjusted its community value-added service business model in response to market changes, shifting from self-operated to platform models to maintain profitability [52]. - The company focused on enhancing core business areas such as park operations and community group buying to improve competitiveness and penetration rates [52]. - The company added approximately 22.9 million square meters of contract management area during the period, with 48.4% of new managed area being non-residential projects [38]. Acquisitions and Investments - The company completed the acquisition of 100% equity in Chongqing Jinke Jincheng Hotel Management Co., Ltd. in 2021, impacting financial reporting [136]. - The company plans to invest or acquire property management companies that meet its quality standards, with an estimated allocation of HKD 1,532.0 million (23% of net proceeds) [96]. - The company acquired 100% of Sichuan Ruide Property Development Co., Ltd., 80% of Zhuzhou Gaoke Property Management Co., Ltd., and 51% of Guizhou Jinke Qingyun Property Management Co., Ltd. during the six months ended June 30, 2022 [177]. - Approximately 60% (HKD 3,996.5 million) of the net proceeds will be used for selective strategic investments and acquisitions to expand the company's business scale and geographical coverage [94]. - About 10% (HKD 666.1 million) will be allocated to upgrade the company's digital and intelligent management systems [96].

Company Information, Awards and Honors [Company Information](index=2&type=section&id=Company%20Information) This section provides the company's fundamental details, including board members, committees, headquarters, auditor, legal counsel, bankers, investor relations, website, and stock code - The company's Chairman is **Mr. Xia Shaofei**[5](index=5&type=chunk) - The company's auditor is **PricewaterhouseCoopers**[6](index=6&type=chunk) - The company's stock code on the Hong Kong Stock Exchange is **09666**[6](index=6&type=chunk) [Awards and Honors](index=4&type=section&id=Awards%20and%20Honors) This section highlights the company's numerous industry accolades in H1 2021, demonstrating its comprehensive strength, service quality, technological application, and market leadership in property services - The company was honored as one of the "**2021 China Property Service Top 100 Enterprises Comprehensive Strength TOP10**"[9](index=9&type=chunk) - The company received the title of "**2021 China Property Technology Empowerment Leading Enterprise**" for its technology application[9](index=9&type=chunk) - The company was recognized as one of the "**2021 China Property Service Listed Companies Comprehensive Strength TOP10**" for its outstanding capital market performance[10](index=10&type=chunk) Chairman's Statement [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) Chairman Mr. Xia Shaofei reviewed strong H1 2021 growth amidst a complex environment, reiterating the "Service + Technology, Service + Ecosystem" strategy and outlining progress in urban space, quality life, and smart technology services for high-quality growth and shareholder returns 2021 H1 Key Performance Indicators | Indicator | 2021 H1 | YoY Growth | | :--- | :--- | :--- | | Total Revenue | Approx. **RMB 2.586 billion** | Approx. **89%** | | Of which: Community Value-added Services Revenue | Approx. **RMB 652 million** | Approx. **419%** | | Net Profit | Approx. **RMB 542 million** | Approx. **79%** | | Net Profit attributable to owners | Approx. **RMB 530 million** | Approx. **80%** | - As of June 30, 2021, GFA under management was approximately **187 million sq.m.**, with independent third parties accounting for approximately **52%**; contracted GFA was approximately **315 million sq.m.**, with independent third parties accounting for approximately **58%**[12](index=12&type=chunk) - The company firmly implements the "**Service + Technology, Service + Ecosystem**" strategy, collaboratively building three major business segments: urban space services, quality life services, and smart technology services[13](index=13&type=chunk)[14](index=14&type=chunk) - Future plans include continuously strengthening three core capabilities—new services, new ecosystem, and new technology—and enhancing urban density, deep collaboration, and concentration[14](index=14&type=chunk) Management Discussion and Analysis [Business Overview](index=8&type=section&id=Business%20Overview) The company is a leading, top-ranked integrated smart property service provider in Southwest China, consistently among China's top ten, covering property management, non-owner value-added, community value-added, and smart technology services with a "Service + Technology, Service + Ecosystem" strategy - The company has been ranked among China's Top 10 Property Service Enterprises by CIH for **six consecutive years** and maintained the **largest market share in Southwest China** for six consecutive years[15](index=15&type=chunk) - In 2021, the company was included in the **Hang Seng Composite Index** and **FTSE Russell Flagship Index** constituents, gaining capital market recognition[15](index=15&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) This section reviews the company's H1 2021 financial performance, showing an 88.8% revenue increase, 94.0% gross profit growth, and a slight gross margin rise to 32.5%, with detailed analysis of business segments, costs, financial position, and cash flow, reflecting strong growth and robust financial health [Revenue Analysis](index=8&type=section&id=Revenue) For the six months ended June 30, 2021, the Group's total revenue reached **RMB 2.586 billion**, a year-on-year increase of **88.8%**, primarily driven by all four business segments, with community value-added services revenue soaring by **419.0%** 2021 H1 Revenue Composition (by Business Line) | Business Line | 2021 H1 Revenue (RMB thousand) | Proportion (%) | 2020 H1 Revenue (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 1,309,579 | 50.6 | 925,381 | 67.6 | | Non-owner Value-added Services | 567,387 | 21.9 | 292,227 | 21.3 | | Community Value-added Services | 651,744 | 25.2 | 125,568 | 9.2 | | Smart Technology Services | 57,030 | 2.3 | 26,428 | 1.9 | | **Total** | **2,585,740** | **100.0** | **1,369,604** | **100.0** | - Community value-added services revenue significantly increased by **419.0%** year-on-year, primarily due to an increase in customer base and expansion of service types[18](index=18&type=chunk) [Property Management Services Analysis](index=9&type=section&id=Property%20Management%20Services) Property management services revenue grew **41.5%** to **RMB 1.310 billion**, with GFA under management increasing **44.0%** to **187 million sq.m.**, and non-residential property revenue rising **59.4%** - As of June 30, 2021, GFA under management was approximately **187 million sq.m.**, a year-on-year increase of **44.0%**; contracted GFA was approximately **315 million sq.m.**[20](index=20&type=chunk) GFA Under Management and Revenue (by Developer Type) | Developer Type | 2021 H1 GFA Under Management (thousand sq.m.) | 2021 H1 Revenue (RMB thousand) | 2020 H1 GFA Under Management (thousand sq.m.) | 2020 H1 Revenue (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Jinke Group Projects | 78,936 | 723,343 | 60,481 | 559,021 | | Jinke Group Joint Ventures and Associates Projects | 11,025 | 63,983 | 6,396 | 33,122 | | External Expansion Projects | 96,832 | 522,253 | 62,867 | 333,238 | | **Total** | **186,793** | **1,309,579** | **129,744** | **925,381** | - Non-residential property GFA under management increased to **34 million sq.m.**, accounting for **18.2%** of total GFA under management[23](index=23&type=chunk) [Non-owner Value-added Services Analysis](index=12&type=section&id=Non-owner%20Value-added%20Services) Non-owner value-added services revenue increased **94.2%** to **RMB 567 million**, driven by increased sales assistance services and significant growth in consulting and other services, particularly property agency sales Non-owner Value-added Services Revenue Composition | Service Type | 2021 H1 (RMB thousand) | Proportion (%) | 2020 H1 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Sales Assistance Services | 369,802 | 65.2 | 246,890 | 84.5 | | Pre-delivery Services | 85,346 | 15.0 | 42,388 | 14.5 | | Consulting and Other Services | 112,239 | 19.8 | 2,949 | 1.0 | | **Total** | **567,387** | **100.0** | **292,227** | **100.0** | [Community Value-added Services Analysis](index=13&type=section&id=Community%20Value-added%20Services) Community value-added services experienced explosive growth, with revenue surging **419.0%** to **RMB 652 million**, significantly increasing its contribution to total revenue from **9.2%** to **25.2%**, primarily driven by travel and integrated services and park operation services Community Value-added Services Revenue Composition | Service Segment | 2021 H1 (RMB thousand) | Proportion (%) | 2020 H1 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Family Life Services | 132,110 | 20.3 | 62,798 | 50.0 | | Park Operation Services | 205,255 | 31.5 | 32,767 | 26.1 | | Home Renovation Services | 48,759 | 7.5 | 14,587 | 11.6 | | Travel and Integrated Services | 265,620 | 40.7 | 15,416 | 12.3 | | **Total** | **651,744** | **100.0** | **125,568** | **100.0** | - Core community value-added businesses, such as community group buying (**Jinke Jinxuan**), home renovation (**Jinke Yuejia**), and travel and integrated services (**Kangcheng Guolu**), all achieved significant growth[32](index=32&type=chunk) [Smart Technology Services Analysis](index=14&type=section&id=Smart%20Technology%20Services) Smart technology services revenue increased significantly by **115.8%** to **RMB 57 million**, maintaining a high gross margin of **49.4%**, empowering property management for cost reduction and efficiency while exporting digital solutions - In H1 2021, smart technology services revenue was approximately **RMB 57 million**, a year-on-year increase of **115.8%**[34](index=34&type=chunk) - This business segment maintained a high gross margin of **49.4%**[34](index=34&type=chunk) [Gross Profit and Gross Margin Analysis](index=17&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's overall gross profit increased **94.0%** to **RMB 840 million**, with the overall gross margin slightly rising from **31.6%** to **32.5%**, and smart technology services achieving the highest gross margin at **49.4%** 2021 H1 Gross Profit and Gross Margin (by Business Line) | Business Line | 2021 H1 Gross Profit (RMB thousand) | Gross Margin (%) | 2020 H1 Gross Profit (RMB thousand) | Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 372,541 | 28.4 | 257,656 | 27.8 | | Non-owner Value-added Services | 210,036 | 37.0 | 116,512 | 39.9 | | Community Value-added Services | 229,502 | 35.2 | 45,995 | 36.6 | | Smart Technology Services | 28,162 | 49.4 | 12,871 | 48.7 | | **Total** | **840,241** | **32.5** | **433,034** | **31.6** | [Liquidity and Capital Resources Analysis](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the Group maintained a robust financial position with **RMB 6.265 billion** in cash and cash equivalents, a significant increase in operating cash flow to **RMB 673 million**, and a zero capital gearing ratio with no bank borrowings - As of June 30, 2021, cash and cash equivalents were approximately **RMB 6.265 billion**[52](index=52&type=chunk) - Net cash inflow from operating activities was approximately **RMB 673 million**, compared to **RMB 10.7 million** in the same period last year, primarily due to increased operating profit and enhanced collection management[53](index=53&type=chunk) - As of June 30, 2021, the Group had **no borrowings**, and the capital gearing ratio was **zero**[53](index=53&type=chunk)[54](index=54&type=chunk) [Prospects and Future Plans](index=15&type=section&id=Prospects%20and%20Future%20Plans) The company will continue to develop its space, life, and technology services, focusing on urban density and M&A for space, expanding community ecosystem businesses for life, and increasing R&D for technology to enhance barriers and smart city initiatives - **Space Services**: Solidify urban density strategy, consolidate core competitive advantages in Southwest China, actively respond to M&A opportunities, and develop the non-residential segment[35](index=35&type=chunk) - **Life Services**: Thoroughly develop community value-added businesses, focus on the mass consumption sector, vigorously develop community group buying, home renovation and beautification, property brokerage, group meal catering, and travel services[35](index=35&type=chunk) - **Technology Services**: Increase product R&D investment, upgrade the "**Tianqi Cloud City**" smart system, leverage technological advantages to empower business expansion, and actively participate in smart city construction[36](index=36&type=chunk) [Material Acquisitions and Disposals](index=22&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Significant%20Investments%2C%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the reporting period, the company completed two key acquisitions: 100% equity in Chongqing Meilishan Property to boost its high-end residential market share in Chongqing, and 100% equity in Baotou Smart Property to enter the Inner Mongolia market and expand its national footprint - In May 2021, acquired **100% equity** in Chongqing Meilishan Property for a total consideration of approximately **RMB 102.5 million** (including assumed liabilities), aligning with the company's urban density strategy[57](index=57&type=chunk) - In February 2021, acquired **100% equity** in Baotou Smart Property for a transfer consideration of **RMB 57 million**, contributing to the expansion into the Inner Mongolia market[58](index=58&type=chunk) [Use of Net Proceeds from Listing](index=23&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) The company disclosed the utilization of approximately **HKD 6.615 billion** net proceeds from its November 2020 listing, with **HKD 1.118 billion** used by June 30, 2021, primarily for strategic investments, value-added services development, and general working capital, consistent with prospectus plans Summary of Use of Net Proceeds from Listing (as of June 30, 2021) | Planned Use | Planned Amount (HKD million) | Utilized Amount (HKD million) | Unutilized Amount (HKD million) | | :--- | :--- | :--- | :--- | | Strategic investments and acquisitions | 3,968.94 | 434.27 | 3,534.67 | | Upgrading digital and smart management systems | 661.49 | 0.49 | 661.00 | | Development of value-added services | 1,322.98 | 178.12 | 1,144.86 | | General business operations and working capital | 661.49 | 505.46 | 156.03 | | **Total** | **6,614.9** | **1,118.34** | **5,496.56** | [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2021, the Group employed approximately **9,029** individuals, implementing a remuneration package including salaries, bonuses, and allowances with regular performance appraisals, resulting in total staff costs of **RMB 691.5 million** for the period - As of June 30, 2021, the Group had approximately **9,029** employees[67](index=67&type=chunk) - In H1 2021, total staff costs amounted to **RMB 691.5 million**, compared to **RMB 499.3 million** in the same period last year[67](index=67&type=chunk) Corporate Governance [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The company adopted the Corporate Governance Code, complying with all provisions except for the non-separation of Chairman and CEO roles, and the Audit Committee reviewed the interim report and unaudited financial results - The roles of Chairman and Chief Executive Officer are both held by Executive Director **Mr. Xia Shaofei**, which deviates from Rule A.2.1 of the Corporate Governance Code[69](index=69&type=chunk) - The Audit Committee, together with management and external auditor **PricewaterhouseCoopers**, discussed and reviewed the unaudited interim results for the period[72](index=72&type=chunk) Other Information [Other Information](index=30&type=section&id=Other%20Information) This section details shareholdings of directors, supervisors, chief executives, and major shareholders as of June 30, 2021, noting the Board's decision not to declare an interim dividend for 2021, following the payment of the 2020 final dividend on June 25 - As of June 30, 2021, controlling shareholder **Jinke Property** held approximately **52.33%** of the company's total share capital[77](index=77&type=chunk) - The company paid a final dividend of **RMB 0.5 per share** (before tax) for the year ended December 31, 2020, on June 25, 2021[86](index=86&type=chunk) - The Board resolved **not to declare any interim dividend** for the six months ended June 30, 2021[86](index=86&type=chunk) Interim Financial Information [Review Report on Interim Financial Information](index=37&type=section&id=Review%20Report%20on%20Interim%20Financial%20Information) The independent auditor, PricewaterhouseCoopers, reviewed the interim financial information according to HKSRS 2410, concluding no material issues regarding its preparation under HKAS 34 "Interim Financial Reporting" - Auditor **PricewaterhouseCoopers** issued a review conclusion on the interim financial information, finding **no material issues**[89](index=89&type=chunk) [Financial Statements](index=38&type=section&id=Financial%20Statements) This section presents the condensed consolidated interim statements for the six months ended June 30, 2021, including comprehensive income, financial position, equity changes, and cash flows, showing a **RMB 542 million** profit, **RMB 9.586 billion** total assets, and strong operating cash flow 2021 H1 Financial Summary | Indicator | Amount (RMB thousand) | | :--- | :--- | | **Comprehensive Income Statement:** | | | Revenue | 2,585,740 | | Gross Profit | 840,241 | | Operating Profit | 642,829 | | Profit for the period | 541,761 | | Profit attributable to owners of the Company | 529,813 | | **Statement of Financial Position (Period End):** | | | Total Assets | 9,585,911 | | Total Liabilities | 2,110,805 | | Total Equity | 7,475,106 | - Basic and diluted earnings per share were **RMB 0.81**, higher than **RMB 0.64** in the same period last year[90](index=90&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=43&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed explanations and supplementary information for the interim financial statements, covering preparation basis, accounting policies, segment information, revenue and cost breakdowns, asset and liability composition, business combinations, and related party transactions, essential for understanding the financial reports - During the reporting period, the Group completed business combinations of **seven companies**, with a total purchase consideration of **RMB 139 million**, resulting in goodwill of **RMB 133 million**[146](index=146&type=chunk) - Newly acquired businesses contributed **RMB 35.865 million** in revenue and **RMB 4.337 million** in net profit to the Group from the acquisition date to the end of the period[148](index=148&type=chunk) - The notes detail transactions with the ultimate controlling company, **Jinke Group**, and its associates, including service provision, goods procurement, and fund transfers[160](index=160&type=chunk)[162](index=162&type=chunk) Glossary and Definitions [Glossary and Definitions](index=82&type=section&id=Glossary%20and%20Definitions) This section defines specific terms and abbreviations used throughout the report, such as "Jinke Property," "Jinke Group," "H Shares," and "the Period," ensuring accurate comprehension of the content

[Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section provides a concise overview of the company's strong financial performance in the reporting period [Financial Highlights Summary](index=5&type=section&id=Financial%20Highlights%20Summary) In 2020, the company achieved robust financial growth with total revenue increasing by 44.3% to RMB 3.36 billion, gross profit by 56.9% to RMB 997 million, and gross margin improving to 29.7%, while profit attributable to owners surged by 68.5% to RMB 618 million, with total assets doubling to RMB 8.55 billion and cash and cash equivalents soaring to RMB 6.84 billion, primarily due to the H-share listing in November 2020 Comprehensive Income Statement Summary (For the year ended December 31) | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (RMB million) | 3,358.9 | 2,327.7 | +44.3% | | Gross Profit (RMB million) | 997.4 | 635.7 | +56.9% | | Gross Margin | 29.7% | 27.3% | +2.4pp | | Profit for the Year (RMB million) | 633.2 | 374.4 | +69.1% | | Profit Attributable to Owners of the Company (RMB million) | 617.6 | 366.5 | +68.5% | | Basic Earnings Per Share (RMB) | 1.24 | 0.8 | +55.0% | Comprehensive Balance Sheet Summary (As of December 31) | Indicator | 2020 | 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets (RMB million) | 8,552.2 | 4,093.9 | +108.9% | | Cash and Cash Equivalents (RMB million) | 6,840.3 | 333.1 | +1953.5% | | Total Equity (RMB million) | 7,252.5 | 505.0 | +1336.1% | [Chairman's Statement](index=12&type=section&id=Chairman%27s%20Statement) Chairman Mr. Xia Shaofei outlines the company's strategic vision and growth targets for the coming years [Chairman's Statement Summary](index=12&type=section&id=Chairman%27s%20Statement%20Summary) Chairman Mr. Xia Shaofei's statement establishes the first year of the company's "New Five Years, New Tenfold Growth" target, emphasizing the deepening of "Service + Technology, Service + Ecosystem" development strategies by strengthening the "Ecosystem + Technology" dual engines, iterating three major business segments—space services, life services, and technology services—and actively planning for health and cultural tourism businesses, aiming to transform the company from community services to societal services and become a world-class smart service provider, with a goal of 80% annual profit growth through enhanced external expansion, prudent M&A, focus on core value-added service tracks, and accelerated digital transformation - The company proposes a "New Five Years, New Tenfold Growth" plan, with 2021 as the inaugural year targeting **80% annual profit growth**[40](index=40&type=chunk)[44](index=44&type=chunk) - The core strategy involves deepening "Service + Technology, Service + Ecosystem," strengthening the "Ecosystem + Technology" dual engines, and iterating three major business segments: urban space services, beautiful life services, and smart technology services[40](index=40&type=chunk) - For urban space services, the company will increase expansion into non-residential formats such as commercial offices, schools, and hospitals, and extend into urban services[41](index=41&type=chunk) - For beautiful life services, the focus will be on advantageous businesses like travel and accommodation, family life, and home renovation, while exploring spiritual services such as culture, sports, and health[42](index=42&type=chunk) - For smart technology services, the company will accelerate digital transformation, promote robot applications (e.g., cleaning, patrolling), and export its technological and digital service capabilities[43](index=43&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's operational performance, market conditions, and future strategies [Market and Business Review](index=14&type=section&id=Market%20and%20Business%20Review) In 2020, despite COVID-19 challenges, the company successfully listed on the Hong Kong Stock Exchange, leveraging the property management industry's value re-shaping and capital market recognition, achieving high-speed growth with revenue and net profit increasing by 44.3% and 69.1% respectively, while steadily expanding GFA under management and contracted GFA, with a significant proportion of independent third-party projects, maintaining a quality-first strategy with customer satisfaction exceeding 90% for nine consecutive years and enhancing community value through the "Ten Years as New Plan," optimizing project portfolios, vigorously expanding non-residential formats and urban services, and deepening presence in core regions, with significant achievements in value-added services and technology empowerment, laying a solid foundation for future development 2020 Key Performance Indicators | Indicator | 2020 | YoY Growth | | :--- | :--- | :--- | | Revenue | RMB 3.36 billion | 44.3% | | Gross Profit | RMB 997 million | 56.9% | | Net Profit | RMB 633 million | 69.1% | | Net Profit Attributable to Owners | RMB 618 million | 68.5% | | GFA Under Management | 156 million sqm | - | | Contracted GFA | 277 million sqm | - | - The company's profitability continues to improve, with gross margin reaching **29.7% (+2.4 percentage points)** and net margin reaching **18.9% (+2.8 percentage points)**, primarily due to technology empowerment and cost reduction and efficiency improvement[46](index=46&type=chunk) - In business expansion, independent third-party projects account for **48.6% of GFA under management** and **56.3% of contracted GFA**, demonstrating strong market-oriented expansion capabilities[45](index=45&type=chunk) - The company emphasizes service quality, with customer satisfaction exceeding **90% for nine consecutive years** and property fee collection rates remaining at a high of **90%**[46](index=46&type=chunk)[48](index=48&type=chunk) - Technology empowerment has yielded significant results, with the Tianqi Cloud City smart system upgraded to version 4.0, and the company holding **16 national intellectual property patents** and **19 software copyrights**[49](index=49&type=chunk) [Future Outlook](index=17&type=section&id=Future%20Outlook) Looking ahead, the company will deepen its "Service + Technology, Service + Ecosystem" strategy, focusing on life, technology, and space business segments, planning to achieve simultaneous growth in scale and profitability by improving governance, optimizing talent incentive mechanisms (e.g., partnership schemes), strengthening market-oriented expansion and prudent M&A to address increasing market competition, while continuing to expand into non-residential formats like commercial offices, schools, and hospitals, extending into urban services, accelerating digital transformation and promoting robot applications in technology, and exporting smart solutions, and vigorously developing community group buying, tourism, and asset management businesses around the community ecosystem in life services, exploring cultural, sports, and health consumption, aiming to become a first-class beautiful life service provider - Talent and Incentives: The company will implement a **partnership mechanism** based on existing employee stock ownership plans, and carry out departmental reforms for value-added service segments[51](index=51&type=chunk) - Urban Space Services: Scale growth will be achieved through **bidding, strategic cooperation, and prudent M&A**, with a focus on expanding non-residential formats and urban services[51](index=51&type=chunk) - Smart Technology Services: The company will continue to **upgrade smart systems**, accelerate the implementation of robot applications, and export full-lifecycle smart solutions to small and medium-sized property management companies in the industry[52](index=52&type=chunk) - Beautiful Life Services: The company will vigorously develop businesses such as **community group buying, tourism, asset management, and growth education**, and actively explore cultural, sports, and health-related consumption, extending its services from communities to society[53](index=53&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) In 2020, the company's total revenue increased by 44.3% to RMB 3.36 billion, driven by comprehensive growth across four major business segments, with property management services, non-owner value-added services, community value-added services, and smart technology services revenues growing by 38.1%, 46.9%, 72.3%, and 77.3% respectively, while gross profit increased by 56.9% to RMB 997 million, and overall gross margin improved from 27.3% to 29.7%, with a healthy financial position, ample cash after IPO, no borrowings at year-end, and a capital gearing ratio reduced to zero [Revenue Analysis](index=18&type=section&id=Revenue%20Analysis) Total revenue reached RMB 3.36 billion in 2020, a 44.3% year-on-year increase, primarily driven by the synergistic efforts of four business lines: 1) Property Management Services (revenue RMB 2.02 billion, +38.1%), benefiting from an increase in GFA under management from 121 million sqm to 156 million sqm; 2) Non-owner Value-added Services (revenue RMB 876 million, +46.9%), mainly driven by increased sales venue services; 3) Community Value-added Services (revenue RMB 411 million, +72.3%), benefiting from business scale expansion and service diversification; 4) Smart Technology Services (revenue RMB 48 million, +77.3%), due to increased output of smart solutions, with property management services remaining the primary revenue source, accounting for 60.3% Total Revenue by Business Line | Business Line | 2020 Revenue (RMB thousand) | Share (%) | 2019 Revenue (RMB thousand) | Share (%) | YoY Growth | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 2,024,034 | 60.3 | 1,465,792 | 62.9 | +38.1% | | Non-owner Value-added Services | 876,082 | 26.1 | 596,391 | 25.6 | +46.9% | | Community Value-added Services | 411,100 | 12.2 | 238,603 | 10.3 | +72.3% | | Smart Technology Services | 47,728 | 1.4 | 26,871 | 1.2 | +77.3% | | **Total** | **3,358,944** | **100.0** | **2,327,657** | **100.0** | **+44.3%** | - GFA under management increased by **29.6%** from **120.5 million sqm** at the end of 2019 to **156.2 million sqm** at the end of 2020, which was the primary driver for the growth in property management service revenue[55](index=55&type=chunk) - Non-residential property management area significantly increased, with the number of projects growing from **132 to 215**, optimizing the structure of property management revenue[60](index=60&type=chunk) - Among community value-added services, family life services (including community group buying) experienced the most rapid growth, with revenue increasing from **RMB 81.64 million to RMB 250 million**, a year-on-year increase of **206%**[68](index=68&type=chunk)[49](index=49&type=chunk) [Cost and Gross Profit Analysis](index=23&type=section&id=Cost%20and%20Gross%20Profit%20Analysis) In 2020, the Group's gross profit increased by 56.9% to RMB 997 million, with the overall gross margin improving from 27.3% to 29.7%, primarily due to economies of scale and technology empowerment for cost reduction and efficiency improvement, while gross margins varied across business segments: property management services gross margin significantly increased from 21.7% to 26.3% mainly due to an increase in high-margin non-residential projects; smart technology services gross margin increased from 48.3% to 53.6%; non-owner value-added services gross margin slightly increased to 33.4%; and community value-added services gross margin decreased from 46.1% to 35.9%, mainly affected by the increased proportion of lower-margin community group buying business Gross Profit and Gross Margin by Business Line | Business Line | 2020 Gross Profit (RMB thousand) | 2020 Gross Margin (%) | 2019 Gross Profit (RMB thousand) | 2019 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 531,397 | 26.3 | 318,765 | 21.7 | | Non-owner Value-added Services | 292,613 | 33.4 | 193,919 | 32.5 | | Community Value-added Services | 147,764 | 35.9 | 110,003 | 46.1 | | Smart Technology Services | 25,580 | 53.6 | 12,991 | 48.3 | | **Total** | **997,354** | **29.7** | **635,678** | **27.3** | - Cost of sales increased by **39.6%** to **RMB 2.36 billion**, largely consistent with business growth[71](index=71&type=chunk) - Property management services gross margin increased by **4.6 percentage points**, primarily due to an increase in average property management fees for residential properties and a rise in the number of high-margin non-residential properties[74](index=74&type=chunk) - Community value-added services gross margin decreased by **10.2 percentage points**, mainly due to the increased proportion of lower-margin community group buying business[74](index=74&type=chunk) [Other Income Expenses and Tax](index=24&type=section&id=Other%20Income%20Expenses%20and%20Tax) In 2020, the Group recorded a net other loss of RMB 37.3 million, compared to a net other income of RMB 1.8 million in 2019, primarily due to exchange losses incurred during the year, while administrative expenses remained stable at approximately RMB 238 million, demonstrating effective cost control, and income tax expense increased to RMB 134 million, consistent with the growth in profit before tax, with the effective income tax rate remaining low at 17.5% due to preferential policies in Western China and for high-tech enterprises - Other income decreased by **8.3%** from **RMB 52.1 million to RMB 47.8 million**, mainly due to reduced interest income from loans collected from Jinke Group after the repayment of ABS and ABN agreements[75](index=75&type=chunk) - A net other loss of **RMB 37.3 million** was recorded (2019: net income of RMB 1.8 million), primarily due to net exchange losses[76](index=76&type=chunk) - Administrative expenses remained at **RMB 238 million**, largely consistent with the previous year, reflecting effective cost reduction and efficiency improvement measures[77](index=77&type=chunk) - The effective income tax rate was **17.5%** (2019: 16.8%), lower than the general tax rate of 25%, mainly benefiting from Western Development and high-tech enterprise tax incentives[78](index=78&type=chunk) [Key Balance Sheet Items Analysis](index=25&type=section&id=Key%20Balance%20Sheet%20Items%20Analysis) As of the end of 2020, the company's balance sheet structure underwent significant changes, with trade receivables and bills receivable increasing to RMB 1.06 billion due to business expansion, while prepayments and other receivables substantially decreased from RMB 3.08 billion to RMB 520 million, primarily due to the full repayment of amounts under ABS and ABN agreements, and correspondingly, other payables and accrued expenses also significantly decreased from RMB 1.25 billion to RMB 560 million, mainly due to the settlement of advances from related parties, reflecting the company's optimized financial structure and cleared related-party transactions post-listing - Trade receivables and bills receivable increased from **RMB 550 million to RMB 1.06 billion (+91.9%)**, consistent with the expansion of property management and non-owner value-added services[81](index=81&type=chunk) - Prepayments and other receivables significantly decreased by **83.0%** from **RMB 3.08 billion to RMB 520 million**, primarily due to the full repayment of all outstanding amounts under ABS and ABN agreements[83](index=83&type=chunk) - Trade payables and bills payable increased from **RMB 150 million to RMB 280 million (+82.4%)**, mainly due to increased expenses payable to suppliers as GFA under management expanded[84](index=84&type=chunk) - Other payables and accrued expenses decreased by **55.4%** from **RMB 1.25 billion to RMB 560 million**, primarily due to the gradual settlement of advances payable to related parties[85](index=85&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) As of the end of 2020, the Group's liquidity position was exceptionally strong, with cash and cash equivalents surging from RMB 330 million to RMB 6.84 billion, primarily due to IPO proceeds, and the Group had repaid all bank borrowings, holding no borrowings at year-end compared to RMB 1.83 billion at the end of 2019, thus reducing the capital gearing ratio from 3.62 times to zero, significantly optimizing the financial structure, and all asset pledges were released with the termination of ABS and ABN agreements - Cash and cash equivalents significantly increased from **RMB 333.1 million** at the end of 2019 to **RMB 6.84 billion** at the end of 2020[87](index=87&type=chunk) Borrowing Situation | Borrowing Item | 2020 (RMB thousand) | 2019 (RMB thousand) | | :--- | :--- | :--- | | Non-current Borrowings | – | 1,145,000 | | Current Borrowings | – | 685,000 | | **Total** | **–** | **1,830,000** | - The capital gearing ratio (total interest-bearing bank borrowings / total equity) decreased from **3.62 times** at the end of 2019 to **zero** at the end of 2020[91](index=91&type=chunk) - With the termination of ABS and ABN agreements in August 2020, the pledge of the Group's rights to receive property management fees was released, and there were no pledged assets at year-end[92](index=92&type=chunk) [Use of IPO Proceeds](index=29&type=section&id=Use%20of%20IPO%20Proceeds) The company raised net proceeds of approximately HKD 6.615 billion from its global offering (including the exercise of over-allotment option) in November and December 2020, with approximately 60% planned for strategic investments and acquisitions, 20% for developing value-added services, 10% for upgrading digital systems, and 10% for general working capital, and as of December 31, 2020, the company had not utilized any of the net IPO proceeds Planned Use of Net IPO Proceeds | Planned Use | Amount (HKD million) | Approximate Percentage | | :--- | :--- | :--- | | Strategic Investments and Acquisition Opportunities | 3,968.94 | 60% | | Upgrading Digital and Smart Management Systems | 661.49 | 10% | | Development of Value-added Services | 1,322.98 | 20% | | General Business Operations and Working Capital | 661.49 | 10% | | **Total** | **6,614.9** | **100%** | - As of December 31, 2020, the company had **not utilized any of the net IPO proceeds**[95](index=95&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) As of the end of 2020, the Group had 8,758 employees, with annual staff costs of RMB 1.095 billion, and the company's remuneration policy is linked to operating performance, individual performance, and market levels, aiming to attract and retain talent, having implemented two phases of employee stock ownership plans in 2017 and 2020 to incentivize core employees, also providing systematic training programs and internal promotion opportunities, and attracting young talent through the "Star Elite" recruitment program to maintain team vitality - As of December 31, 2020, the Group had **8,758 employees**, with annual staff costs of **RMB 1.095 billion**[98](index=98&type=chunk) - The company has adopted **two phases of employee stock ownership plans** in 2017 and 2020 to retain talent and achieve strategic goals[98](index=98&type=chunk) - The company provides **systematic training** for employees, including induction training for new hires, assigning mentors to fresh graduates, and offering online courses and regular seminars covering quality control, customer relationship management, and other areas[99](index=99&type=chunk) [Corporate Governance Report](index=43&type=section&id=Corporate%20Governance%20Report) This section details the company's commitment to maintaining high standards of corporate governance [Corporate Governance Report Summary](index=43&type=section&id=Corporate%20Governance%20Report%20Summary) Since its listing, the company has been committed to maintaining a high level of corporate governance, and during the reporting period, except for the non-separation of the Chairman and CEO roles (both held by Mr. Xia Shaofei), the company complied with all code provisions of the Corporate Governance Code, with the Board believing this arrangement enhances decision-making efficiency, having established audit, remuneration, and nomination committees with clear terms of reference, and a sound risk management and internal control system, whose effectiveness is regularly reviewed by the Board, with the report also outlining shareholder rights, the appointment and training of joint company secretaries, and amendments to the Articles of Association - The company complied with the Corporate Governance Code, with the only deviation being Code Provision A.2.1, where the roles of Chairman and CEO are not separated, both held by Mr. Xia Shaofei, an arrangement the Board believes enhances decision-making efficiency and responsiveness[121](index=121&type=chunk) - The Board has three committees: Audit, Remuneration, and Nomination, with Mr. Chen Zhifeng, Chairman of the Audit Committee, possessing appropriate accounting professional qualifications, and Ms. Yuan Lin, an independent non-executive director, and Mr. Xia Shaofei, an executive director, chairing the Remuneration and Nomination Committees respectively[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - The Board has adopted a Board Diversity Policy and believes that the current Board is sufficiently diverse in terms of age, professional background (management, finance, legal, etc.), and experience to meet the company's governance and business development needs[134](index=134&type=chunk)[135](index=135&type=chunk) - The Board is responsible for overseeing the company's risk management and internal control systems and reviews their effectiveness at least annually, deeming the risk management and internal control systems effective and adequate as of the end of 2020[139](index=139&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) [Board of Directors' Report](index=55&type=section&id=Board%20of%20Directors%27%20Report) This report provides an overview of the company's business, financial position, and compliance matters for the year [Board of Directors' Report Summary](index=55&type=section&id=Board%20of%20Directors%27%20Report%20Summary) The Board of Directors' Report outlines the company's principal business, financial position, and compliance matters for the year 2020, proposing a final dividend of RMB 0.5 per share, noting the successful listing during the period, raising net proceeds of approximately HKD 6.615 billion, which remained unutilized by year-end, detailing four non-exempt continuing connected transactions primarily involving cooperation with controlling shareholder Jinke Property and its associates in property management, system supply, and goods trading, confirming compliance with Listing Rules, with independent non-executive directors and auditors reviewing and confirming these transactions, and also covering the fulfillment of the non-competition undertaking by the controlling shareholder, shareholdings of directors and substantial shareholders, and public float compliance - The Board recommends a final dividend of **RMB 0.5 per share (pre-tax)** for the year ended December 31, 2020, totaling approximately **RMB 326 million**[156](index=156&type=chunk) - The report discloses **four non-exempt continuing connected transaction master agreements** with controlling shareholder Jinke Property: sales, purchases, system supply and installation, and property management services, with the property management services master agreement having the highest annual cap, constituting a transaction subject to independent shareholders' approval[172](index=172&type=chunk)[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - Independent non-executive directors have reviewed and confirmed that all continuing connected transactions were conducted on normal commercial terms, fair and reasonable, and in the overall interest of shareholders, with auditors also confirming that the transactions did not exceed annual caps and complied with relevant agreements[178](index=178&type=chunk)[179](index=179&type=chunk) - Controlling shareholder Jinke Property has confirmed compliance with the non-competition undertaking, and independent non-executive directors have also reviewed and deemed it compliant[171](index=171&type=chunk) - Based on available information, the company maintained the minimum public float requirement (not less than **21.0%**) after the Listing Rules exemption[202](index=202&type=chunk) [Supervisory Board Report](index=74&type=section&id=Supervisory%20Board%20Report) This report confirms the company's compliance and the diligent performance of its directors and senior management [Supervisory Board Report Summary](index=74&type=section&id=Supervisory%20Board%20Report%20Summary) The Supervisory Board Report confirms that in 2020, the company operated strictly in accordance with laws and regulations, and directors and senior management diligently performed their duties, with no actions found to be detrimental to the company and shareholders' interests, having effectively supervised the company's financial status, major decisions, internal controls, use of proceeds, and connected transactions by attending meetings, believing that the financial report truly and objectively reflects the operating results and financial position, the internal control system is sound and effective, connected transactions are fair and reasonable, and having no objections to the Board's "Internal Control Self-Assessment Report," and looking forward to 2021, the Supervisory Board will continue to fulfill its supervisory duties to safeguard the interests of the company and all shareholders - The Supervisory Board believes the company operated in compliance with laws and regulations, and directors and senior management diligently performed their duties, with no violations or actions detrimental to shareholders' interests found[205](index=205&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - The Supervisory Board reviewed the annual financial report and believes it truly and objectively reflects the company's financial position, and the unqualified opinion report issued by the auditing firm is objective and fair[210](index=210&type=chunk) - The Supervisory Board confirms that as of the end of 2020, the IPO proceeds remained unutilized, in compliance with regulations[211](index=211&type=chunk) - The Supervisory Board believes the company's connected transactions followed appropriate decision-making procedures and were fair and reasonable in pricing[212](index=212&type=chunk) - The Supervisory Board has no objections to the company's Internal Control Self-Assessment Report, believing the company's internal control system is sound, reasonable, and effective[213](index=213&type=chunk) [Independent Auditor's Report](index=78&type=section&id=Independent%20Auditor%27s%20Report) This section presents the independent auditor's opinion on the company's consolidated financial statements [Independent Auditor's Report Summary](index=78&type=section&id=Independent%20Auditor%27s%20Report%20Summary) PricewaterhouseCoopers issued an unqualified audit opinion on Jinke Smart Services Group's consolidated financial statements for the year ended December 31, 2020, stating that the financial statements truly and fairly present the Group's financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards and are properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance, with "Impairment assessment of trade receivables" identified as the key audit matter due to its materiality to the financial statements and significant estimation uncertainty involved in the assessment, and the auditors performed relevant procedures and found management's judgments and estimates to be adequately supported - Audit Opinion: PricewaterhouseCoopers issued an **unqualified opinion**, stating that the financial statements truly and fairly present the Group's financial position and operating results[216](index=216&type=chunk) - Key Audit Matter: The only key audit matter identified in this audit was **"Impairment assessment of trade receivables"**[218](index=218&type=chunk) - Reason for Key Audit Matter: This matter was identified due to the **materiality of trade receivables balance** to the consolidated financial statements (accounting for 62% of total non-cash assets) and the **significant estimation uncertainty** in the Expected Credit Loss (ECL) assessment[219](index=219&type=chunk) - Auditor's Response: The auditors performed procedures including understanding and testing key controls, assessing inherent risks, comparing historical data, evaluating the reasonableness of management's estimates, and testing aging accuracy, concluding that management's judgments and estimates for trade receivables impairment assessment were **adequately supported**[219](index=219&type=chunk)[220](index=220&type=chunk) [Consolidated Financial Statements](index=83&type=section&id=Consolidated%20Financial%20Statements) This section contains the audited core financial statements of the Group for the year ended December 31, 2020 [Consolidated Financial Statements Summary](index=83&type=section&id=Consolidated%20Financial%20Statements%20Summary) This section presents the Group's audited core financial statements for the year ended December 31, 2020, including the consolidated statement of 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 operating results, financial position, changes in equity, and cash flows during the reporting period Key Data from Consolidated Statement of Comprehensive Income | Indicator (RMB thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 3,358,944 | 2,327,657 | | Gross Profit | 997,354 | 635,678 | | Operating Profit | 760,026 | 449,183 | | Profit and Total Comprehensive Income for the Year | 633,195 | 374,384 | | Profit Attributable to Owners of the Company | 617,594 | 366,452 | Key Data from Consolidated Statement of Financial Position | Indicator (RMB thousand) | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | 8,552,243 | 4,093,893 | | Total Liabilities | 1,299,780 | 3,588,898 | | Total Equity | 7,252,463 | 504,995 | | Of which: Cash and Cash Equivalents | 6,840,339 | 333,149 | | Of which: Borrowings | 0 | 1,830,000 | Key Data from Consolidated Statement of Cash Flows | Indicator (RMB thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 113,432 | 236,801 | | Net Cash from Investing Activities | 2,230,981 | 490,192 | | Net Cash from Financing Activities | 4,203,080 | (810,147) | | Net Increase in Cash and Cash Equivalents | 6,547,493 | (83,154) | [Four-Year Financial Summary](index=179&type=section&id=Four-Year%20Financial%20Summary) This section provides a concise summary of the Group's key financial data over the past four years [Four-Year Financial Summary Details](index=179&type=section&id=Four-Year%20Financial%20Summary%20Details) This section provides a summary of the Group's key financial data for four consecutive years from 2017 to 2020, clearly demonstrating the company's high-speed growth trajectory in recent years, with revenue, gross profit, and net profit all achieving continuous and significant growth over the four-year period, while asset scale and shareholder equity also expanded significantly, especially after the 2020 listing, the financial structure fundamentally improved, and total liabilities significantly decreased Four-Year Consolidated Statement of Comprehensive Income Summary (RMB thousand) | Indicator | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 3,358,944 | 2,327,657 | 1,523,886 | 1,047,041 | | Gross Profit | 997,354 | 635,678 | 390,833 | 280,546 | | Profit and Total Comprehensive Income for the Year | 633,195 | 374,384 | 163,926 | 113,692 | | Profit Attributable to Owners of the Company | 617,594 | 366,452 | 161,776 | 113,551 | Four-Year Consolidated Statement of Financial Position Summary (RMB thousand) | Indicator | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | | Total Assets | 8,552,243 | 4,093,893 | 4,125,518 | 2,489,969 | | Total Liabilities | 1,299,780 | 3,588,898 | 3,799,591 | 2,234,922 | | Total Equity | 7,252,463 | 504,995 | 325,927 | 255,047 |