We are a reputable integrated property management service provider headquartered in Hangzhou with deep roots in Zhejiang province and the Yangtze River Delta Region. Prior to the Reorganization, the property management business of residential and non-residential properties (including public and other properties (such as office buildings of PRC governmental bodies, industrial parks, hospitals and schools but excluding pure commercial properties such as commercial and office buildings and serviced apartments)) of our Group was carried out by the Zhong An Group and property management business of pure commercial properties including serviced apartments was carried out by the CNC Group. The subsidiaries now comprising our Group have been providing property management services to the Remaining Group for over 23 years since 1998. In 2019, 2020, 2021 and the six months ended June 30, 2021 and 2022, the overall revenue in the sum of approximately RMB140.6 million, RMB182.4 million, RMB229.7 million, RMB102.6 million and RMB119.4 million was generated from properties developed by the Remaining Group and its joint ventures and associates, representing approximately 78.0%, 79.0%, 77.5%, 77.1% and 78.4% of our overall revenue during the respective periods; and approximately RMB39.7 million, RMB48.3 million, RMB66.0 million, RMB30.4 million and RMB33.0 million was generated from properties developed by independent third-party property developers, representing approximately 22.0%, 21.0%, 22.5%, 22.9% and 21.6% of our overall revenue during the respective periods. As of December 31, 2019, 2020, 2021 and June 30, 2022, the GFA under management for properties developed by the Remaining Group amounted to approximately 5.9 million sq.m., 6.0 million sq.m., 6.6 million sq.m. and 6.6 million sq.m., representing approximately 62.0%, 55.3%, 55.7% and 56.3% of our total GFA under management as of the respective dates; and the GFA under management for properties developed by independent third-party property developers amounted to approximately 3.6 million sq.m., 4.8 million sq.m., 5.2 million sq.m. and 5.2 million sq.m., representing approximately 38.0%, 44.7%, 44.3% and 43.7% of our total GFA under management as of the respective dates.
Through over 23 years of operations since our establishment in 1998, we have grown from a local property management service provider in Hangzhou to an integrated regional property management service provider with major presence in Zhejiang province. We have also built up reputable brand recognition in the Yangtze River Delta Region and have established strategic presence in cities outside of the Yangtze River Delta Region including Guangzhou, Nanchang, Qingdao, Wuhan and Kunming as of June 30, 2022. The Yangtze River Delta Region is one of the more economically developed regions in China with higher urbanization rate and per capita annual disposable income than the national averages of China, and has a national-leading level of urban digitalization infrastructure, therefore, the Yangtze River Delta Region has always been and will continue to be our focus of development.
During the Track Record Period, all of our GFA under management was located in Zhejiang province and Anhui province in the Yangtze River Delta Region. As of June 30, 2022, we had a total of 116 contracted projects with a total contracted GFA of approximately 17.1 million sq.m., covering 17 cities and seven provinces in China; and managed a total of 79 projects, with a total GFA under management of approximately 11.8 million sq.m., covering eight cities and three provinces in China. As of the Latest Practicable Date, the geographical coverage of our three main business lines principally covers the Yangtze River Delta Region and a total of eight provinces in the PRC including Zhejiang province, Anhui province, Jiangxi province, Shandong province, Jiangsu province, Hubei province, Yunnan province and Guangdong province.
During the Track Record Period, we experienced an increase in the total number of projects under our management from 59 to 79 and GFA under management from 9.5 million sq.m. to 11.8 million sq.m. in both second-tier cities and other cities as of December 31, 2019 and June 30, 2022, respectively, mainly due to (i) the expansion of the Remaining Group; and (ii) our continuous effort to obtain more projects for properties developed by independent third-party property developers. Going forward, we intend to use approximately 55.0%, or approximately HK$81.4 million, of the net proceeds from the Global Offering to acquire or invest in other small- and medium-sized property management companies that focus on residential or non-residential properties in the PRC in order to further expand our business, diversify our property portfolio and further solidify our market position. However, we may not be able to materialize our plan to acquire or invest in other small- and medium-sized property management companies that focus on residential or non-residential properties in the PRC. See “Risk Factors—Risks Relating to Our Business and Industry—Our future acquisitions may not be successful or materialized, and we may face difficulties in integrating acquired operations with our exiting operation” in this prospectus for further discussion of the related risk.
According to CIA, our Group’s market share in the PRC in terms of our GFA under management as of December 31, 2021 was approximately 0.04%, we have been included in the list of the Top 100 Property Management Companies in China (中國物業服務百強企業) since 2016 and our ranking among the Top 100 Property Management Companies in China in terms of overall strength of property management* increased from 82nd in 2016 to 42nd in 2022, reflecting our growing property management capabilities. In addition, we were ranked eighth, 11th and 29th, among the 2022 Top 100 Property Management Companies in China headquartered in Hangzhou, Zhejiang province and the Yangtze River Delta Region, respectively, in terms of the GFA under management as of December 31, 2021.
We offer a portfolio of services and aim to provide our customers with quality and efficient services through our three main business lines, namely, (i) property management services to property developers, property owners, residents and tenants, primarily comprising security services, cleaning services, gardening and landscaping services, repair and maintenance services and/or car park management services; (ii) value-added services mainly to property developers, primarily comprising sales office management services, preliminary planning and design consultancy services and pre-delivery inspection services; and (iii) community value-added services to property owners and residents, primarily comprising common area management services, renovation waste disposal services and car parking space sales agency services, which form an integrated service along the value chain of property management.
The expansion of the Remaining Group in recent years provided a solid foundation for our continued growth. As of June 30, 2022, we managed a total of 39 projects developed by the Remaining Group with a total GFA under management of approximately 6.6 million sq.m., representing approximately 49.4% and 56.3% of our total number of projects and GFA under management as of the same date, respectively. As of June 30, 2022, the total GFA of our contracted but undelivered projects developed by the Remaining Group or its joint ventures and associates was approximately 5.4 million sq.m., which are expected to be delivered to us for management in the next one to three years generally. In 2021 and the six months ended June 30, 2022, approximately 72.5% and 73.3%, respectively of our property management services revenue was generated from property projects developed by the Remaining Group. We believe that our long-term and stable relationship with the Remaining Group will continue going forward and allow us to continue to benefit from its diversified property portfolio and abundant land reserves, which will enable us to expand our property portfolio, business scale and geographical coverage.
We endeavored to understand the needs of our customers, refine our services and build an all-rounded service system under the “Zhong An” brand. In conducting our business and formulating our development plan, we have adhered to our service tenet of “Pursuing Excellent Quality, Creating Happy Life (追求卓越品質，創造幸福生活)” and committed to providing quality services with the direction of “Sincere Services, Standardized Management, Achievement of Excellence, and Be Proactive and Innovative (服務至誠, 管理規範, 精益求精, 進 取創新)”, as we believe that service quality is the key to enhance our customer satisfaction and strengthen a reputable brand recognition. Therefore, we experienced a continuous and steady growth during the Track Record Period.
Our revenue increased at a CAGR of approximately 28.1% from RMB180.3 million in 2019 to RMB295.7 million in 2021, and increased by approximately 14.6% from RMB133.0 million in the six months ended June 30, 2021 to RMB152.4 million in the six months ended June 30, 2022. Our gross profit increased at a CAGR of approximately 37.2% from RMB59.0 million in 2019 to RMB111.1 million in 2021, and increased by approximately 16.1% from RMB49.1 million in the six months ended June 30, 2021 to RMB57.0 million in the six months ended June 30, 2022. Our net profit increased at a CAGR of approximately 20.7% from RMB28.7 million in 2019 to RMB41.8 million in 2021, and increased by approximately 9.5% from RMB19.0 million in the six months ended June 30, 2021 to RMB20.8 million in the six months ended June 30, 2022. The aggregate GFA of the properties under our management increased from approximately 9.5 million sq.m. as of December 31, 2019 to 10.8 million sq.m.
as of December 31, 2020 and further to 11.8 million sq.m. as of December 31, 2021, representing a CAGR of 11.7%. The aggregate GFA of the properties under our management remained stable of approximately 11.8 million sq.m. as of June 30, 2022.
Source: Zhong An Service (02271) Prospectus (IPO Date : 2023/06/30) |