a-living services co., ltd.* - agileagile-living.agile.com.cn/uploads/20191211/992666b... · total...
TRANSCRIPT
FY 2018 Annual Results Presentation
(3319.HK)
A-LIVING SERVICES CO., LTD.*
Lifelong Caring
*For identification purposes only
2
Disclaimer
This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of
assumptions about the operations of the A-Living Services Co., Ltd. (the “Company”) and factors beyond the Company's control and
are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from these forward-looking
statements.
The Company undertakes no obligation to update these forward-looking statements for events or circumstances that occur
subsequent to such dates. The information in this presentation should be considered in the context of the circumstances prevailing at
the time of its presentation and has not been, and will not be, updated to reflect material developments which may occur after the date
of this presentation. The slides forming part of this presentation have been prepared solely as a support for oral discussion about
background information about the Company. This presentation also contains information and statistics relating to the China and
property development industry. The Company has derived such information and data from unofficial sources, without independent
verification. The Company cannot ensure that these sources have compiled such data and information on the same basis or with the
same degree of accuracy or completeness as are found in other industries. You should not place undue reliance on statements in this
presentation regarding the property development industry. No representation or warranty, express or implied, is made as to, and no
reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. It
should not be regarded by recipients as a substitute for the exercise of their own judgment. Information and opinion contained in this
presentation may be based on or derived from the judgment and opinion of the management of the Company. Such information is not
always capable of verification or validation. None of the Company or financial adviser of the Company, or any of their respective
directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable for any loss
arising from use of the information contained in this presentation or otherwise arising in connection therewith. This presentation does
not take into consideration the investment objectives, financial situation or particular needs of any particular investor. It shall not to be
construed as a solicitation or an offer or invitation to buy or sell any securities or related financial instruments. No part of it shall form
the basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation may not be copied or
otherwise reproduced.
This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or
any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No securities may be offered or sold in the United States absent registration or an applicable exemption
from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus.
Such prospectus will contain detailed information about the company making the offer and its management and financial statements.
No public offer of securities is to be made by the Company in the United States.
Results
Highlights
4*Incl. final dividend and special dividend
^Incl. GFA acquired after the Year
• Revenue 3,376.7mn +91.8%
• Net profit margin 24.0% +7.0p.p.
• Profit attributable to shareholders
801.0 mn +176.5%
• Earnings per share 0.62
• Operating cash flow
883.2 mn +207.4%
• Cash and cash equivalents
4,808.0 mn +446.5%
• Proposed total dividend
400.0mnDividend payout ratio reached 50% *
Performance Highlights
Excellent performance in the first year
after listingOutstanding results of
market expansion
Extend presence through
mergers and acquisitionsSteady growth of gross profit margin
with outstanding earnings
• Current total GFA under management amounted to 153.6million sq.m., and total contracted GFA amounted to
246.4 million sq.m.^
• Obtained 48.4 million sq.m. new contracted GFA from
third-party property developers and 24.4 million sq.m. new
contracted GFA from two major shareholders
• Laid solid foundation in the Greater Bay Area,
consolidated footholds in Beijing, Shanghai and
Guangzhou, serving the whole nation of the PRC with a
coverage of 24 provinces, autonomous regions and
municipalities
• Overall GPM 38.2% +4.7p.p.
• Property mgtservices
GPM 27.4 % +0.5p.p.
• Community VAS GPM 50.9% +9.2p.p.
• Extended VAS GPM 47.7% remained stable
• Significant growth in value-added services with high
gross profit margin
• Accelerated expansion with strategic layout, obtained
new contracted GFA from M&A amounted to 47.6 million
sq. m.^
• Acquired 51% equity interest in Nanjing Zizhu in April
2018
• Acquired 100% equity interest in a leading property
developer of Shenzhen in August 2018
• Acquired 89.6643% equity interest in Qingdao Huaren in
January 2019
• Acquired 60% equity interest in Harbin Jingyang in
February 2019
• Focusing on post-acquisition management and
empowerment to improve profitability
(RMB)
Financial
Summary
RMB '000 2018% of
revenue2017
% of
revenueChange
Revenue 3,376,749 1,760,753 +91.8%
Cost of sales (2,086,808) (61.8%) (1,170,188) (66.5%) +78.3%
Gross profit 1,289,941 590,565 +118.4%
Gross profit margin 38.2% 33.5% +4.7p.p.
Selling and marketing
expenses(45,951) (1.4%) (32,629) (1.9%) +41.1%
Administrative
expenses(302,246) (8.9%) (171,222) (9.7%) +76.5%
Profit for the year 810,879 300,207 +170.1%
Net profit margin 24.0% 17.0% +7.0p.p.
Profit
attributable to the
shareholders of the
Company
801,045 289,727 +176.5%
Earnings per share
(RMB/share)0.62 0.35 * N/A*
6
Financial Highlights
*The Company’s H shares were listed on 9 February 2018, thus the weighted average number of ordinary shares for the year ended 31 December 2017 was
only 832,400,000 shares.
1,206
453
102
1,6251,463
289
0
400
800
1,200
1,600
2,000
Property Mgt Services Extended VAS Community VAS
2017 2018
675a
325 223
42
445
698
147
26.9%
49.3%
41.7%27.4%
47.7%
50.9%
0
500
1,000
1,500
Property Mgt Services Extended VAS Community VAS
Gross Profitin 2017
Gross Profitin 2018
Gross profitmargin in2017Gross profitmargin in2018
7
788b
2017 2018
Detailed Figures of Three Business Lines
Revenue and Growth Rate (by Business Lines) Gross Profit and Gross Profit Margin(by Business Lines)
( RMB million) ( RMB million)
aSales Center Property Mgt ServicesbOther Extended VAS
Percentage of Revenue of 3 Business Lines
323a
48.1%
20.0%
23.3%
8.6%
130b
68.5%18.3%
7.4%
5.8%
Property Mgt Services
Sales Center Property Mgt Services
Other Extended VAS
Community VAS
RMB '000 2018 2017 Change
Total assets 7,296,549 2,510,797 +190.6%
Total liabilities 1,786,512 1,036,728 +72.3%
Goodwill 1,045,362 918,967 +13.8%
Trade and other
receivables1,164,913 448,189 +138.6%
Trade and other
payables1,192,556 952,375 +25.2%
Operating cash flow 883,165 287,299 +207.4%
Cash and cash
equivalents4,807,993 879,771 +446.5%
8
Other Financial Figures
Business
Review
10
126.1
0
58.1 58.7
9.3
229.8
31.0
106.4
70.4
22.0
246.4
47.6
0
40
80
120
160
200
240
280
2017
2018
Incl. acquisition after 31 Dec 2018
By Portfolio
Third-party
Breakdown of GFA Under Management
(40.0%) (34.9%) (3.4%)(42.7%) (53.9%) (3.4%)
(% of GFA)
(21.3%) (46.3%) (30.6%) (9.6%)(46.1%) (46.5%) (7.4%)(13.5%)(NA) (NA)
Property Management Services – Scale Expansion
GFA Under Management (million sq.m.) (million sq.m.)Contracted GFA
The Guangdong-
HK-Macao
Greater Bay
Area
Yangtze
River Delta
Urban Area
Chengdu-
Chongqing
Urban Area
Others
M&A Agile GreenlandTotal GFA
Under MgtM&A Agile GreenlandTotal Contracted
GFA(% of contracted GFA)
Third-party
Property management services recorded a revenue of RMB1,624.8 million, up 34.8% year on year, accounting for 48.1%
of the total revenue, with a gross profit margin of 27.4%, up 0.5p.p. year on year
60.4%
39.6%
ResidentialNon-residential
35.7%
31.5%3.6%
29.2%
By Geographic Coverage
78.3
0
33.5 42.2
2.7
138.1
29.4
55.8 48.2
4.7
153.6
44.9
0
40
80
120
160
200
2017
2018
Incl. acquisition after 31 Dec 2018
11
90.1%
70.5%81.5%
0%
50%
100%
Industry Benchmark
Level of Overall Satisfaction Rate towards Property Management in 2018
Property Management Services -
Dual-brand Driven Strategy, Enhancing Brand Power
Agile Property Management
Agile Property Management focuses
on the management of mid- to high-
end residential properties and is a
first-mover in managing vacation and
large-scale property
Greenland Property Services
Greenland Property Services has
dedicated to commercial properties
especially the super high-rise
buildings, and is strive to become a
benchmark brand in the industry
TOP 8 of Property Management Companies of
China in terms of Comprehensive Strengths
2nd among TOP 100 Property Management
Companies in China in terms of Growth Potential
Chinese Blue-Chip Property Management
Company
TOP 10 of Community Service Providers in the
PRC in terms of Competitiveness
2018 Newly Listed Company with the Best
Investment Value
Leading satisfaction from customersEnhancing brand reputation
Deepen the cooperation with shareholders and implement the dual-brand driven strategy, focusing on
mid- to high-end residential and commercial properties to develop benchmark projects
(Source: China Index Academy)
• As of 31 Dec 2018, the contracted GFA
from Greenland Holdings reached 22.0million sq.m.
• The newly increased contracted GFA
amounted to 12.7 million sq.m. during the
Year, exceeding the GFA committed in
the strategic cooperation agreement
• The contracted GFA from third-party
expansion of Greenland Property reached
3.96 million sq. m. during the Year
• As of 31 Dec 2018, the total contracted GFA
from Agile Group reached 70.4 million sq.m.
The newly increased contracted GFA
amounted to 11.7 million sq.m. during the
Year.
• The collection rate of property management
fee of the residential property projects from
Agile Group reached 95.7%.
12
• The contracted GFA obtained from third-party property developers increased by
48.4 million sq.m. during the year, up 83.2% year on year
• Extended: 113 prefectural level cities/autonomous prefectures, 30 provinces,
cities and municipalities
• Newly entered: 4 new provinces, 39 new prefectural level cities with total 223
projects
• Cultivated: Guangdong-Hong Kong-Macao Greater Bay Area, Yangtze River
Delta and Beijing-Tianjin-Hebei region, etc.
• Entered into joint venture cooperation with regional leading property developers
to speed up regional expansion
Further expand scale
and geographic
coverage, to complete
nationwide layout
Focus on potential
areas for enhancing
influence and
competitiveness
Enter into new
markets by acquiring
regional leading
enterprises
A property management company of leading
developer in ShenzhenAcquired 100% equity interest at a consideration of RMB10.5
million in Aug 2018
Portfolio: management of residential properties
Contracted GFA in 2018: 3.42 million sq.m.
Visionary investment and M&AHarbin Jingyang (market leader in Heilongjiang) Acquired 60% equity interests at a consideration of RMB113.9
million in Feb 2019
Portfolio: management of residential, commercial properties
and office buildings
Contracted GFA in 2018: 10.5 million sq.m.
Qingdao Huaren (listed company on the NEEQ)
Acquired 89.6634% equity interest at a consideration of
RMB133.6 million in Jan 2019
Portfolio: management of public buildings, office buildings and
residential properties
Contracted GFA in 2018: 6.1 million sq.m.
Nanjing Zizhu (one of the Top 100 property
management companies in China) Acquired 51% equity interest at a consideration of RMB204.8
million in Apr 2018
Portfolio: management of public buildings, commercial and
residential properties.
Contracted GFA in 2018: 27.6 million sq.m.(upon acquisition:
22.3 million sq.m.)
Comprehensive market expansion
Property Management Services – M&A and Third-party Expansion
13
Nanjing Zizhu• Through empowerment from the Group after the acquisition, Nanjing Zizhu operated independently and
achieved better-than-expected operating results. For the year of 2018, Nanjing Zizhi recorded an increase
of 19.1% in revenue year on year. Net profit after deducting non-recurring gains and losses was 41.0
million, up 24.0% year on year, net profit margin increased by 0.5 p.p.
• Leveraging A-Living’s strengths and resources, as well as Nanjing Zizhu’s, management experience in
local market, Nanjing Zizhu has improved its brand pricing power and enhanced the capability of operating
high-end projects, adding 5.24 million sq.m. new GFA under management during the year
Mutual respect, seeking common ground while holding back differences, integration
Empower and support the acquired companies
Export system and experiences in valued-add services
Property Management Services –
Significant Results in Post-Investment Management
Refined post-acquisition management
Empower the acquired
companies to improve
efficiency• Project
inspection
• Appoint
managerial
staff
• Connect to the unified
system
• Promote A-Assistant
and A-Steward APPs
• Set up pilot projects
• Embed management standards
• Reduce energy consumption
• Import value-added services system
Procedure
Principles
Sample
• Continued support for acquired companies: including strategic planning, referral of professionals, financing
support and improving corporate governance structure
• Customized and differentiated post-acquisition management plans
• Ensure adding value to the investment, and enhance corporate value
• Build centralized post-acquisition management capacity as A-Living scales up its investments
Future
14
• Xiaoya Agent
• Xiaoya Parcel
Pickup
• Group buying
Community
living services
Home
improvement
Community assets
management
services
• Xiaoya
Repairing
• Xiaoya
Gardening
• Xiaoya
Cleaning
• Services
apartment
• Clubhouse
operation
• Second-hand
houses
• Rental service
• Car park
operation
• Community
advertisement
• Long and
short term
rental
• Serviced
apartment
• Home
decoration
• Home accessory
Focusing on the
residents,
houses, vehicles
and public
resources
Build a
community
economic
ecosphere
Operate though
asset-light mode
Build a platform
for frequent
consumption
Community Value-Added Services-
Diversified and Innovative Community Economy
Community value-added services generated revenue of RMB288.8 million, up 183.7% year on year,
accounting for 8.6% of total revenue, with a gross profit margin of 50.9%, up 9.2p.p year on year
15
Extended value-added services generated a revenue of RMB1.46 billion, up 222.7% year on year,
accounting for 43.3% of the total revenue, with a gross profit margin of 47.7%
Sales center property management Marketing
Home inspection and early
stage involvement
Provide Closed Loop, Full-cycle
Services to Property
Developers
Provided integrated marketing services for property developers
• Product positioning and marketing consulting
• Property sales agent
• Enhance property quality
• Highly recognized by property
developers
• Improve quality of the property
delivered by preventing delivery of
property with problems, minimizing
investment cost at later stage
• Increase satisfaction rate by property
owners
Third-party
Expansion Results
in Marketing• New expansion with significant
increase in revenue from third-party market
• Rapid coverage of 25 expansion projects in Southern, Eastern, Central, Southeastern and Northeastern China, Shandong and Hebei with only one year, laid solid foundation for the undertaking of property at later stage
Extended Valued-Added Services -
Comprehensive and Full-Cycle Coverage
Provide sales center management services,
including
• Concierge reception
• Security services
• Site maintenance
• Display equipment maintenance
Future
Outlook
• Mid-to-high end residential
property management
• Sales center property
management
• High-end commercial property
management
• Consultation services
• Commercial operation
• Investment and rental services
• Community value-added
services
• Real estate specialized
services
Optimization of Corporate Structure
17
Focusing on
3 business segments
Reducing labor with
efficiency improvement
Comprehensive re-organization of corporate structure
Integration and optimization in multi-dimensions
Focusing strategy with synergic development
Strive to develop into a market leader
Nurturing new businesses
Whole Industry Chain Layout
18
• Mid-to-high end
residential property
• Vacation property
Market
Expansion
Investment and
M&A
Joint venture and
cooperation
Dri
ve
s r
ap
id d
eve
lop
me
nt
of
va
lue
-ad
ded
se
rvic
es
Co
mm
un
ity C
om
merc
ial S
erv
ices
Asset
Man
ag
em
en
tP
ub
lic
bu
ild
ing
sP
rop
ert
y M
an
ag
em
en
t
Multi-portfolio
property
management,
to achieve whole
industry chain layout
of property services
• Establish new commercial
management brand-Johnson
Asset Management
• Provide professional and
high-end commercial
property services
• Realize vision of “office
building being constructed
and managed by Chinese
enterprise”
Mid-to-high end residential
property management
High-end commercial property
Public buildings property
• Focus on public buildings
property
Government office
buildings
Schools, hospitals and
other public utilities
Infrastructure(e.g. airports,
transports facilities, etc.)
Enhancing Competitiveness by Three Ways
19
Improving
Service
Quality
Focusing on
Market
Expansion
Enhancing
Operation
Efficiency
Smart
Community
Creates
Better Life
A-Living
integrated
management
platform
Intelligent application
Smart guardAutomated car
park guard
Automated operation
Enhancing Efficiency through Technology
20
EBA (e-building
automation)
Mobilized services
Property owners Property management
A-Steward APP
Dedicated steward &
O2O service
A-Assistant APP
Smart property
management system
Super cloud
platform
12 modules fully cover property management; solve difficulties
in community property management
Quality
management
Online study
Project
expansion
Procurement
and storage
Customer
service
Budget
management
Human
resources
Contract
management
Coordination
office
Business
management
Engineering
management
Finance
charge
Informatized business
Smart remote
patrol systemCleansing machines
Patrol through
dronesPatrol with
balance bikes
Lifelong Caring
A-LIVING SERVICES CO., LTD.*