a-living smart city services co., ltd. - agile

FY2020 Annual Results

A-Living Smart City Services Co., Ltd.（3319.HK）

March 2021

Disclaimer

This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about theoperations of the A-Living Smart City Services Co., Ltd. (the “Company”) and factors beyond the Company's control and are subject to significant risksand 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 notbeen, and will not be, updated to reflect material developments which may occur after the date of this presentation. The slides forming part of thispresentation have been prepared solely as a support for oral discussion about background information about the Company. This presentation alsocontains information and statistics relating to the China and property development industry. The Company has derived such information and data fromunofficial sources, without independent verification. The Company cannot ensure that these sources have compiled such data and information on thesame basis or with the same degree of accuracy or completeness as are found in other industries. You should not place undue reliance on statementsin this presentation regarding the property development industry. No representation or warranty, express or implied, is made as to, and no relianceshould be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. It should not be regarded byrecipients as a substitute for the exercise of their own judgment. Information and opinion contained in this presentation may be based on or derivedfrom the judgment and opinion of the management of the Company. Such information is not always capable of verification or validation. None of theCompany or financial adviser of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any wayresponsible for the contents hereof, or shall be liable for any loss arising from use of the information contained in this presentation or otherwise arisingin connection therewith. This presentation does not take into consideration the investment objectives, financial situation or particular needs of anyparticular 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. Nopart 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 orotherwise 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 inwhich such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Nosecurities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any publicoffering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information aboutthe company making the offer and its management and financial statements. No public offer of securities is to be made by the Company in the UnitedStates.

2

Results

Highlights

01

Results Highlights

Revenue 10,026 mn +95.5%

Gross profit 2,973 mn +57.9%

Net profit 1,973 mn +52.7%

Core profit

attributable to

shareholders

1,800 mn +43.5%

Total contracted GFA reached 718 mn sq.m.; total

GFA under management reached 569 mn sq.m.*

Fruitful results in third-party expansion: newly obtained

46 mn sq.m. of contracted GFA from third-party

expansion and increased the proportion of contracted

GFA from third-party developers to 74.1%.

Developed a comprehensive business portfolio and

established advantages in niche markets. Among GFA

under management: residential properties – 40.4%;

public buildings – 46.5%; commercial and office

buildings: 13.1%

*Incl. GFA of New CMIG PM, associates and consultant projects

Strategically upgraded into a full-scenario integrated

service platform and officially renamed as “A-Living

Smart City Services Co., Ltd.”

Established City Services segment and rapidly

complemented the nationwide business layout

through market expansion and M&A

The Group currently manages a total of 130 projects

under city services segment, with a total contract

value of RMB13 bn and a total annualized contract

value of RMB2 bn#

Further optimized revenue mix with a significant

rise in non-cyclical business.

In terms of three business lines, property mgt

services accounted for 64.7% of total revenue,

property owners VAS 10.5%, and extended VAS

24.8%

Developed innovative services and delivered

standardized products that drove property owners

VAS to grow by 116.9% YoY

Upgraded post-acquisition management platform,

overhauled business segments and business

lines and integrated branding and marketing

resources to achieve collaborative development.

Realized a shared business platform with deep

integration through Group’s lean management

Joined hands with Huawei and SenseTime to

develop smart service platforms to enhance

service level with technologies

A leading player in the industry ranked 4th of “2020

Top 100 Property Management Companies in China”,

driving A-Living’s brand value to nearly RMB10 bn.

Upholding the vision of “lifelong caring”, the Group

increased the overall satisfaction rate for the third

consecutive year to 91.1%

Included in the HSCI (mid-cap) and eligible stocks for

Shanghai-Hong Kong Stock Connect and Shenzhen-

Hong Kong Stock Connect

^

Remark: for the year ended 31 December 2020

(Currency: RMB)

^ Excluding the effect of the amortisation of intangible assets and depreciation of

appraised appreciation of fixed assets due to the M&A

4

Annual dividend

per share

RMB0.52

Basic earnings

per share

RMB1.32

^ Incl. associates, as at 22/3/2021

Results

Summary

02

Results Overview

Revenue

RMB10,026 mn

+95.5% YoY

Gross Profit

RMB2,973 mn

+57.9% YoY

Net Profit

RMB1,973 mn

+52.7% YoY

Profit Attributable to

Shareholders

RMB1,754 mn

+42.5% YoY

6

2,830

1,812

485

6,482

2,491

1,053

0

2,000

4,000

6,000

8,000

Property Mgt Services Extended VAS Property Owners VAS

2019 2020

Revenue and Growth Rate (by Business Lines)

（RMB mn）

715

903

264

1,414

999

560

25.3%

49.8%54.4%

21.8%

40.1%

53.2%

0

500

1,000

1,500

Property Mgt Services Extended VAS Property Owners VAS

2019 GP 2020 GP 2019 GP Margin 2020 GP Margin

Gross Profit and Gross Profit Margin (by Business Lines)

（RMB mn）

7

Financial Highlights

RMB mn 2020% of

revenue2019

% of

revenueChange

Revenue 10,026 5,127 +95.5%

Cost of sales (7,053) (70.3) (3,244) (63.3%) +117.4%

Gross profit 2,973 1,883 +57.9%

Gross profit margin 29.7% 36.7% (7.0 p.p.)

Selling and marketing

costs(77) (0.8%) (43) （0.8%） -

Administrative

expenses(548) (5.5%) (295) （5.8%） (0.3 p.p.)

Income tax rate 20.7% 23.8% (3.1 p.p.)

Net profit 1,973 1,292 +52.7%

Net profit margin 19.7% 25.2% (5.5 p.p.)

Profit attributable to

the shareholders of

the Company

1,754 1,231 +42.5%

RMB mn 2020 2019 Change

Total assets 13,975 9,388 +48.9%

Total equity 8,657 6,506 +33.1%

ROE 25.9% 21.2% +4.7 p.p.

EPS (RMB per share) 1.32 0.92 +43.5%

Annual dividend per share (RMB) 0.52 0.45 +15.6%

Cash and cash equivalents 5,057 4,207 +20.2%

Operating cash flow 2,621 1,600 +63.8%

Operating cash flow / net profit 132.8% 123.8% +9.0 p.p.8

Financial Highlights

Business & Operation

Review

03

715

1,414

-

500

1,000

1,500

2,000

2019 2020

2,830

6,482

-

2,000

4,000

6,000

8,000

2019 2020

（RMB mn）

Revenue Gross profit

Higher revenue contribution from property mgt

services with a solid organic growth

• Revenue mix improved significantly and proportion of property mgt

services in revenue increased by 9.5 p.p.

• Revenue from property mgt services surged by 129.1% YoY

Steady growth in gross profit and increased proportion of

non-residential businesses

• Gross profit of property mgt services totaled RMB1,414 mn,

increased by 97.8% YoY

• Gross profit of non-residential business accounted for nearly 50% of

total gross profit, representing a further increased proportion and a

more balanced business portfolio structure

Revenue from property mgt services increased by 129.1%, accounting for 64.7% of total revenue, up 9.5 p.p. YoY

Property Management Services –

High-quality growth in core business

（RMB mn）

10


Ever-expanding scale and comprehensive business portfolio

298.8

181.7

77.1 40.1

522.6

387.4

82.1 53.1

0

100

200

300

400

500

600

700

31/12/2019 31/12/2020

176.6

114.2

53.8

8.6

374.8

301.1

59.8

13.9

0

100

200

300

400

50031/12/2019 31/12/2020

GFA Under Management（mn sq.m.） Contracted GFA

Third-party# Agile GreenlandTotal GFA under mgt

(80.3%) (16.0%) (3.7%)(64.7%) (30.5%) (4.8%)(% of Total)

Agile GreenlandTotal Contracted GFA

(15.7%) (10.2%)(25.8%) (13.4%)(% of Total)

Third-party#

(74.1%)(60.8%)

Over 569 mn^ Over 718 mn^

* Excl. GFA of consultant projects

# Incl. M&A

^ Incl. New CMIG PM, associates and consultant projects

*

*

*

*

Breakdown of Projects Under Management Reserved GFA

By GFA Under Management By Segment Revenue

43.1%56.9%

Residential

Non-residential

（mn sq.m.）

Contracted GFA/GFA under mgt 1.39x 1.12x1.63x

328

195201174

Residential andcommercialproperties

Public buildings

523

375

Total

Contracted GFA

GFA under mgt

（mn sq.m.）

40.4%

46.5%

13.1%Residential properties

Public buildings

Commercial buildingsand complex

Reserved GFA as at 31/21/2020 148 21127

11

• Newly entered into 74 cities, establishing

presence in 167 cities and realizing a full

coverage of all provincial-level administrative

regions in China

• Largely concentrated in economically developed

regions with 80% of projects under management

distributed in first and second-tier cities

Regional penetration under

a nationwide layout

• In terms of market expansion, newly obtained approx. 46 mn

sq.m. of contracted GFA from third-party developers. Average

management fee of newly obtained projects is approx.

RMB2.5/sq.m./month

• Backed by shareholder, newly added contracted GFA from

Greenland Group reached 13 mn sq.m., with an annualized

contract value of over RMB500 mn. Average management

fee of such projects is approx. RMB3.2/sq.m./month

• Achieved breakthroughs in business portfolio, strengthened

the advantages in niche markets, and obtained approx. 30

projects each with an annualized contract value of over

RMB10 mn

Encouraging news on

market expansion

City

Services

Breakthroughs

in business

portfolios

Leading

positions in

niche markets

Operation and maintenance of small

public restrooms in Shenzhen

- Market expansion of city services

High-end

commercial

buildings

300m super high-rise Greenland

Energy IFC (Xi’an)

- One of the super high-rise

landmark projects

城市服务

Ecological restoration of Dingtang River

- The Group’s river cleaning project

River

Cleaning

Dayun AI Town

- A featured town project with a

contract value of over RMB10 mn

Featured

Towns

More than 10 railway projects in Shanghai,

Nanjing, Xi’an and other cities

- Advantages in niche markets of public

buildings

Railways

Agricultural Bank of China – R&D Center

(Shanghai)

- Offered further and customized

services to existing clients

Customized

services for

enterprises

Wellness property project at Qinghaihu in

Xiangyun County, Dali City

- A large-scale multi-portfolio project

Wellness

real estate

Mega

residential

project

Greenland Hangzhou Bay

- One of the mega residential

projects obtained during the year


All-out efforts in market expansion and completed nationwide coverage

29.9%

23.8%

26.3%

20.0%

Tier 1

New Tier 1

Tier 2

Tier 3 & 4 orbelow

Business

Coverage by

City Tier

System

35.7%

25.0%

9.5%

8.1%

3.6%

3.0%15.1%

Yangtze River DeltaRegion

Greater Bay Area

Chengdu-Chongqingcity cluster

Lanzhou-Xining citycluster

Northern Bay citycluster

Harbin-Changchuncity cluster

Others

Business

Coverage by

Region

12

Community resources Parking lot operation / Community advertisement /

Clubhouse operation / Rental and leasing services

Living and

comprehensive services

• Successfully launched community second-hand property brokerage,

community nursery, community telecommunication service

• Offered online and offline integrated marketing solutions and achieved

significant growth in revenue

Home improvement Turnkey furnishing / House appliances / House renovation /

House rehabbing

“Xiaoya” series homecare services / “Lexianghui”

series retail and group buying services

• Upgraded Lexianghui Mall, generating monthly GMV of up to RMB20 mn

• Established nationwide strategic cooperation with well-known brands,

steering 119% YoY growth in community-based new retail

• Developed “Xiaoya” fast repair brand with professional services, driving

revenue growth of more than RMB30 mn

• Covering house’s full life cycle, bolstered by a supplier matrix formed

strategically with well-known home improvement brands such as

Suofeiya and Dynasty Home

Platforms

Channels

Customized Services

Revenue: RMB303.0 mn

+38.4% YoY

Contribution to segment

revenue: 28.8%


+130.8% YoY


revenue: 37.5%


+24.3% YoY


revenue: 11.2%

Non-residential VAS Catering / Commuting / Procurement / Customized services to

enterprise / conference affairs

• Built a comprehensive VAS model covering multi-business portfolios

through resource sharing and created specialized services for non-

residential properties to meet the needs of corporate customers



revenue: 22.5%

Cooperated with:

Partnered with:

乐乐通信乐乐健康

Self-developed brands and IPs:

Property Owners VAS –

Deeply explored property owners’ needs to achieve rapid growth

Property owners VAS recorded revenue of RMB1,053 mn, up 116.9% y-o-y, accounting for 10.5% of the total revenue,

with a GP margin of 53.2%, decreased by 1.2 p.p. y-o-y

13

24.8%

Extended VAS recorded revenue of RMB2,491 mn, up 37.5% y-o-y, accounting for 24.8% of the total

revenue, decreased by 10.5 p.p. y-o-y; GP margin was 40.1%

35.3% Proportion of

cyclical business to

revenue dropped

significantly

Full-cycle managementReception / Security / Venue maintenance / Equipment maintenance

Asset-light modelMarketing /Sales agency / Referral Marketing

One-stop property developer VASHouse inspection / Technology support / Other consulting services

Revenue from extended VAS / Total revenue

Extended VAS –

Focused on core businesses while offering full-cycle services

701.8

1,110.5 990.9

1,500.4

Sales center mgt services Other extended VAS

2019

2020

（RMB mn）

2019 2020

14

Co-Development and Deep Integration

Brand

Matrix

2020-

Year of

platform

buildingOverall net profit margin

of the acquired

companies increased by

1.5 p.p.

Total annualized

contract value increased

by more than 17% YoY

to RMB6.8 bn*

• Reshaped the non-residential

business centered on public

buildings and established a brand

matrix to deliver standardized

services under multiple brands

• Established sets of service standards

and brand operation standards for

each type of property in the niche

market, including public venues,

transits, parks, schools, hospitals and

other public buildings

• Established a strategic market

map backed by big data and

enhanced market penetration

in different cities according to

economies of scale in regional

level

• Empowered the acquired

companies ranked among Top

100 through precise and

differentiated positioning of

brands by cities and portfolios

• Improved management

efficiency and quality by

building an operation and

management platform

• Empowered the acquired

companies to address their

needs and pain points in

management, finance,

operation and business

informatization

• Introduced the Amoeba

mechanism to invigorate the

market expansion capabilities of

the acquired companies and

continuously achieve

incremental growth through

business fission

• Implemented an incentive

mechanism to stabilize talents

and share the long-term

development benefits with them

30% of projects due for

renewal achieved fee hike

with management fee

rising by an average of 7%

Market

SynergyInformation

Empowerment

Mechanism Empowerment

*Incl. New CIMG PM

15

Quality First and Brand Upgrade

• A-Living’s ranking in terms of comprehensive strengths

reached a record high with its advantages in the niche

markets

• Ranks the 4th of the “Top 100 Property Management Companies

in China”, and its seven brands have also been listed in the Top

100, with a brand value reaching RMB9.796 bn

• Awarded as the “2020 Leading Specialized Property

Management Company in China – A Leading Brand in the

Provision of Comprehensive Public Building Services”

• Actively participated in the innovation and reform of

capital market, becoming the first batch of listed

companies to complete H share full circulation, which

strengthened the foundation for long-term development

• Included in the HSCI (mid-cap) and eligible stocks for

Shanghai-Hong Kong Stock Connect and Shenzhen-Hong

Kong Stock Connect

• Awarded as the “Most Honored Companies” by Institutional

Investor

• Officially changed the company name to “A-Living Smart

City Services Co., Ltd.” in a move to realize strategic

upgrade

• Launched a brand upgrade plan to refine brand positioning

and overhaul brand matrix strategy, aiming at creating

differentiated advantages

A shield for

communities

A guardian for

property owners

Unveiled a corporate IP -

Xiaoya

• Upheld the vision of “lifelong caring for

property owners” to create “heart-warming

communities”, with annual management fee

collection rate hitting 94.1%

• Property owners’ satisfaction rate increased

for the third consecutive year to 91.1%, 7.8%

higher than the average of TOP20 peers

• Stood on the front-line of epidemic prevention

to safeguard the lives and health of millions of

property owners; upgraded protection

standards and normalized epidemic prevention

and control measures

• Participated in the formulation of industry

standards and took lead in compiling

guidelines for epidemic prevention and

specifications for public facilities and

equipment

16

City Services Layout

04

Dalian MingriAcquired 51% equity interest

Ranked 16th out of Top 100

environmental sanitation service

enterprises in China*

ZH SanitationAcquired 30% equity interest



enterprises in China*

Anhui YurunIntended to acquire 51% equity

interest

One of Top 100 cleaning

services brands in China

Shaanxi MingtangAcquired 60% equity interest

One of Top 100 environmental

sanitation service enterprises in

China

Mapping Out a Nationwide Layout for City Services

Business layout of

city services

Strategy implementation: Mapped out a development

strategy for city services to further extend industry value chain

and enhance the anti-cyclicality and growth ability of business

Brand upgrade: Acquired the Top 10, Top 100 or regional

dominant brands through equity acquisition to form a strong

alliance and enhance the market influence

Leading scale: Currently manages over 130 projects with a

total annualized contract value of over RMB10 bn#, lifting A-

Living as a leading city services enterprise

Nationwide layout: Seven regional offices will collaborate

with the acquired companies to form a nationwide layout and

establish a dominant position in each regional market

Expansion capability: Extensive experience and

qualifications together lay a solid foundation for further market

expansion

Source: Huanjingsinan, 2020 Top 100 Enterprises *According to total contract value ^According to annualized contract value #Incl. associates as at 31 Dec 2020

• City services business is making some headway with more than 130 projects under management, covering 53 cities in 20 provinces, autonomous

regions and municipalities, representing a total annualized contract value of over RMB2 bn and total contract value of over RMB13 bn#

• Following the strategy, A-Living recently acquired 5 leading city integrated services enterprises for a total of RMB1.18 bn at a roughly 10 times P/E

ratio, and rapidly mapped out a city services layout by adding Top 10 and Top 16 environmental sanitation service companies to the Group

YahaoA subsidiary of A-Living

specialized in city services

business

Beijing HuifengAcquired 51% equity interest



enterprises in China^

City Services SegmentCollaborative development of

seven regions to shape a

nationwide layout

18

Large-scale projects with

long-term contracts

• The acquired companies are expected to hit a revenue of

over RMB2.5 bn as a whole in 2021, given their solid track

records of profitability. Their average GP margin was

24.7% and average NP margin was 12.5%.

• The average contract duration of projects under

management is 5.73 years and the renewal rate in 2020

was higher than 95%.

Large-

scale

Diversified

partnership with

asset-light DNA

• Government’s bidding and procurement process is

transparent, and the business model is asset-light.

• PPP (public-private partnership) project only accounts

for 7% of total projects, which has a manageable

investment amount and can secure contracts with higher

contract value and longer duration.

Asset-light

A non-cyclical and

defensive business

• As a rigid demand, city services' development is less

affected by macroeconomic factors without obvious

cyclical fluctuations.

• With such a steadily growing business and a relatively

flexible pricing mechanism, the annualized contract

value of acquired companies grew at a CAGR of over

53% from 2017 to 2020.

ResilienceHigh collection rate

and solid cash flow

• Low risk of default as city services is included in the

government budget and enjoy a priority in payment with

settlement cycle usually no longer than one quarter.

• The past fee collection rate of acquired companies has

been remained stable above 95%. Their cash flow is in

healthy condition with controllable investment.

Stability

A Good Business with Stable Performance

Unaudited figures for the year ended 31 December 2020. Incl. subsidiaries and associates19

Outlook

05

Holding company platform

Development of industrial platform

Incubation of innovation platform

Hundred-Billion-Yuan

Platform

A New Vision Empowered by Intelligence,

Eyeing Two “Hundred-Billion-Yuan” Platforms

Capital Talents TechnologyUnderpinned by:

A-Living Smart City Services Co., Ltd.3319.HK

Residential sector

Innovative Industry Chain

Non-residential sector

City services sector

New Hundred-Billion-Yuan

Platform

21

Quality-first service to property owners

Explore upstream and downstream along the industry chain to

enhance brand power and improve service quality

Provide all-round services to improve the quality of life and

create a better life for property owners

Industry-leading scale backed by strong brands

Integrate brand strengths and deepen nationwide penetrationExtend industry chain to build urban ecosystem and create differentiated non-residential service platform

Industry integration aim at city services

Implement city services rapidly and upgrade city smart managementCollaboration among sectors to generate economies of scale and form a full-scenario service platform

Hundred-

Billion-Yuan

Industrial

Platform

Development of Industrial Platform

Manage residential GFA of over 150 mn sq.m., over 1000

projects, serving 1.5 mn property owners

Manage a diverse portfolio of high-end and large-scale

residential projects, luxury mansions, cultural and tourism

properties, whose owners with high spending power serving as valuable user base for VAS

GFA under mgmt of non-residential properties accounts for 59.6% of total GFA under mgmt, accounting for of 56.9%total revenue of property mgmtA nationwide layout backed by excellent market expansion capabilityA comprehensive portfolio with multiple brands in niche markets

Collaboration among nationwide channels for resource sharingJoin hands with high-quality enterprises to reach a total contract value of more than RMB13 bn*Strive for a large-scale, high-value and nationwide layout

*Incl. associates as at 31 Dec 2020

22

Build an innovation platform through strategic business layout and diversified cooperation to incubate upstream and downstream

businesses and build a full-scenario service platform for urban life

Team up with leading companies in different fields to improve service in niche markets, enhance diversified development and

provide differentiated comprehensive services to property owners

Industry chain of property mgt services Industry chain of VAS Industrial chain of urban ecology

• Focus on property management’s

upstream and downstream

industries and build a centralized

cost management platform for key

areas and businesses to bring

economies of scale into play

• Improve the consistency in service

delivery and break through the

boundaries of service area

• Focus on urban life scenarios and

explore the possibility of

developing cross-sector

comprehensive services

• Broaden the market of

comprehensive city services

through extension of business and

cross-sector cooperation

Innovation of Industry Layout and

Discovery of Diversified Businesses

• Notice on Strengthening and Improving Residential Property Management

The government encourages property management companies to explore the development of fields such as elderly care,

childcare, housekeeping, culture, healthcare, leasing, express delivery, information technology, etc.

• Opinions of the General Office of the State Council on Promoting the Healthy Development of Elderly Care and Childcare

Services [2020] (No.52)

The government encourages property management companies to vigorously develop elderly care, childcare, house rehabbing

(incl. house rehabbing for the elderly and the young, urban re-development, etc.), group meal, leasing, medical

treatment, healthcare and other businesses

Policy tailwinds

Incubation of Innovative Platform

• Focus on the upstream and downstream

of supply chain to identify and fill the

blanks of business and strive for flexible

and innovative deployment for VAS

business

• Focus on VAS strongly encouraged by the

government and create a VAS service

platform for “property services + living

services”23

Lifelong Caring for A Better You

A-Living Smart City Services Co., Ltd.

a-living smart city services co., ltd. - agile

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