FY2020 Interim Results Presentation
A-Living Services Co., Ltd. 3319.HK
Lifelong Caring
2
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
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Company in the United States.
Disclaimer
Results
Highlights
01
4Remark: For the six months ended 30 Jun 2020 (Currency: RMB)
^Excluding the effect of the amortisation of intangible assets due to the M&A
* Excluding the contribution from consolidation of CMIG PM
# Including subsidiaries of CMIG PM (unaudited)
Results Highlights
Leap-frog growth
Optimized revenue structure
Improved efficiency through lean management
GFA scale exceeded 600mn sq.m.
Nationwide layout with diversified business portfolio
Widely recognized by markets
• Revenue 4,001.6mn +78.5%
• Gross profit 1,275.4mn +53.8%
• Net profit 873.2mn +53.6%
• Core profit attributable
to shareholders^778.6mn +41.1%
• Property mgt
services
2,619.6mn 65.5%
• Property owners
VAS
422.7mn 10.5%
• Extended VAS 959.3mn 24.0%
• Consolidated CMIG PM and achieved breakthroughs in terms of
geographical coverage and business portfolio in market expansion. Newly
obtained contracted GFA through third-party expansion was 23.02mn sq.m..
The proportion of contracted GFA from third-party developers to total
contracted GFA increased to 74.3%
• Total contracted GFA: 687.3*mn sq.m.
• Total GFA under management: 548.1*mn sq.m.* Incl. GFA of New CMIG PM, associates and consultant projects
• Nationwide layout was improved with footprints in 29 provinces, municipalities
and autonomous regions. Up to 55% projects were located in tier-one and
new tier-one cities
• Business portfolio covered residential properties, commercial offices, public
buildings, industrial parks, etc. Among which, 44.4% were public buildings
• Established the fifth business segment – City Services, entering into city
management industry with market size over a trillion yuan
• Through lean management and big data-backed operation, the
operating efficiency of self-owned projects increased significantly
with an increase in NP margin of 0.7* p.p.
• Through systematic post-investment integration and targeted
empowerment, the acquired companies accelerated market
expansion in 1H2020, and the operating NP margin of the acquired
companies increased by 1.5# p.p. y-o-y
• Became one of the top five leading players in the industry by ranking
the 4th out of "Top 100 Property Management Companies in China”
• Formed the 18-brand matrix, among which, 9 brands ranked among the
Top100 nationwide; recognized as a leading brand in the provision of
public building services
• Included in the HSCI, eligible stocks for Shenzhen-Hong Kong Stock
Connect and MSCI China Index
% of revenue
Results
Summary
02
RMB ’000 1H2020 % of revenue 1H2019 % of revenue Change
Revenue 4,001,627 2,241,228 +78.5%
Cost of sales (2,726,261) (68.1) (1,411,776) (63.0%) +93.1%
Gross profit 1,275,366 829,452 +53.8%
Gross profit margin 31.9%^ 37.0% (5.1 p.p)
Selling and
marketing costs(28,991) (0.7%) (18,173) (0.8%) +59.5%
Administrative expenses (221,059) (5.5%) (124,737) (5.6%) +77.2%
Net profit for the Period 873,184 568,391 +53.6%
Net profit margin 21.8%# 25.4% (3.6 p.p)
Profit attributable to the
shareholders of the Company757,954 541,314 +40.0%
Core profit attributable to the
shareholders of the Company778,615* 552,012* +41.1%
Earnings per share
(RMB)0.57 0.41 +40.0%
6
Financial Highlights
^ If excluding the effect of the amortisation of intangible assets due to the M&A, the core gross profit margin was 33.1%
# If excluding the effect of the amortisation of intangible assets due to the M&A, the core net profit margin was 22.8%
* Excluding the effect of the amortisation of intangible assets due to the M&A
7
Revenue Net Profit Net Profit Margin
25.4%
26.1%
Consolidation of CMIG PM Reflected on Financial Statement
2,241
2,890
1,112
4,002
78.5%
1H2019 1H2020
Contribution
from consolidation of
CMIG PM
Excluding
CMIG PM
568
753
120
873
53.6%
1H2019 1H2020
Contribution
from consolidation of
CMIG PM
NP margin excluding the contribution
from consolidation of CMIG PM
1H2019 1H2020
0.7 p.p.
(RMB million)
Excluding
CMIG PM
1,227
808
206
2,620
959
423
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Property Mgt Services Extended VAS Property Owners VAS
1H2019 1H2020
8
Detailed Figures of Three Business Lines
326 398
106
574 469
232
26.6%
49.2%
51.4%
21.9%
48.9%
55.0%
0
500
1,000
1,500
Property Mgt Services Extended VAS Property Owners VAS
1H2019 GP 1H2020 GP
1H2019 GP Margin 1H2020 GP Margin
54.8%
16.9%
19.1%
9.2%
Property Mgt Services
Sales Center Property Mgt Services
Other Extended VAS
Property Owners VAS
1H2019 1H2020
65.5%10.7%
13.3%
10.5%
Revenue and Growth Rate (by Business Lines) Gross Profit and Gross Profit Margin (by Business Lines)
Significantly Improved Revenue Structure
428b
380a428a
531b
a Sales Center Property Mgt Services
b Other Extended VAS
(RMB million) (RMB million)
RMB '000 As of 30 Jun 2020 As of 31 Dec 2019 ChangeContribution
from CMIG PM
Change (excl.
contribution from
CMIG PM)
Total assets 12,830,250 9,387,515 +36.7% 2,836,013 +6.5%
Total liabilities 5,213,768 2,881,830 +80.9% 1,824,726 +17.6%
Total equity 7,616,482 6,505,685 +17.1% 1,011,287 +1.5%
Goodwill 2,133,170 1,370,928 +55.6% 762,242 --
Trade and other
receivables3,211,934 2,189,347 +46.7% 1,280,829 (11.8%)
Trade and other payables 3,280,099 1,756,980 +86.7% 1,129,303 +22.4%
Operating cash flow 1,099,223* 537,028^ +104.7% 250,562# +58.0%
Cash and cash
equivalents4,882,015 4,207,260 +16.0% 782,855 (2.6%)
9
Other Financial Figures
* For the six months ended 30 June 2020
^ For the six months ended 30 June 2019
#Cash flow of CMIG PM for four months from March to June 2020
Business
Review
03
11
Differentiated Positioning to Achieve Rapid Growth
Large-scale
platform with
multi-brand
First-mover
advantages in
comprehensive
business
portfolio
Strong
market-oriented
expansion
capability
Improvements
in quality and
efficiency
through lean
management
• Established a leading position by
actively participating in the industry
integration and consolidation, and
evolved into a large-scale property
management platform with contracted
GFA of more than 600mn sq.m. to
enjoy economies of scale
• A united force was formed with 18
brands covering various business
portfolios in a nationwide layout
• 9 brands under A-Living ranked among
the Top 100 in China with great market
influence
• Kept abreast of the industry trend and made a
foray into non-residential businesses in
advance to establish its first-mover advantages
in the niche markets with high entry barrier,
and to extend source of income
• Formed a balanced business portfolio with
public buildings, residential properties and
commercial offices accounting for 44%,41%,11% respectively, in terms of GFA under
management. Non-residential business has a
faster conversion rate and a stronger
resistance to cyclical fluctuations
• Community VAS and featured VAS for public
buildings developed together to create a whole-
industry-chain VAS for city life
• Accumulated rich experience through years
of market-oriented development
• Developed strengths arising from a
balanced expansion with multi-brand
strategy and a comprehensive business
portfolio. Obtained 23.02mn sq.m. of newly
increased contracted GFA through third-
party expansion and the proportion of
contracted GFA from third-party developers
to total contracted GFA increased
significantly to 74.3%
• Adopted an integrated investment and
expansion approach with flexible expansion
and cooperation models and implemented
an attractive incentive mechanism
• Underscored the four indicators of “quality,
scale, profitability and cash flow”
• Realized standardized export and lean
management through informatization
intelligent system
• Established a post-investment empowerment
system for the acquired companies to help
them improve operating efficiency significantly
• The Group structure has been continuously
optimized to become a flat organization.
Attached great importance to cost reduction
and efficiency improvement, so that the
administrative expenses were properly
controlled.
41.0%
44.4%
11.2%
3.4%
Residential properties Public buildings Commercial buildings and complex Others
By Portfolio
37.2%
26.7%
10.2%
8.0%
2.8%
2.7%12.4%
Yangtze River Delta city cluster Greater Bay Area Chengdu-Chongqing city cluster
Lanzhou-Xining city cluster Harbin-Changchun city cluster Northern Bay city cluster
Others
By Geographical Coverage
GFA Under Management (million sq.m) Contracted GFA (million sq.m)
Breakdown of GFA Under Management
12
Property management services recorded a revenue of RMB2,619.6mn, up 113.4% y-o-y, accounting for 65.5% of the total revenue,
with a GP margin of 21.9%, decreased by 4.7 p.p. y-o-y
Property Management Services
298.8
181.7
77.1 40.1
491.3
364.8
78.1 48.4
0
100
200
300
400
500
600
31/12/2019 06/30/2020
176.6
114.2
53.8
8.6
353.4
286.3
57.0 10.0
0
100
200
300
400
500
31/12/2019 30/06/2020
Third-party (Incl. M&A) Agile GreenlandTotal GFA Under Mgt
(% of GFA) (81.1%) (16.1%) (2.8%)(64.7%) (30.5%) (4.8%)
Agile GreenlandTotal Contracted GFA
(15.9%) (9.8%)(25.8%) (13.4%)(% of contracted GFA)
Third-party (Incl. M&A)
(74.3%)(60.8%)
1H2020
M&A
158.9
1H 2020
M&A
160.1
Over 548mn^Over 687mn^
* Excl. GFA of consultant projects
^Incl. New CMIG PM, associates and consultant projects
*
*
*
*
13
Property Mgt Services – All-round Breakthrough in Expansion
Breakthroughs in obtaining mega projects
Northeast Asia International Expo City: made first foray into large-
scale Expo city
Gulf of Greenland in Ningbo Hangzhou Bay:Ningbo’s largest real
estate project, situated in the world-class city cluster
Beijing-Shanghai Highway
Xuanbao Service Area
Won the bid of the Group’s first highway service area
project as a new breakthrough, setting an example for the
subsequent development of “property management +
highway” service
Lhasa Customs
Won the bid of Lhasa customs project, through
which the Group almost realized a full coverage of
all provincial-level administrative regions in China
Continued mixed-ownership reform of SOEs, establishing Gansu
Culture Tourism A-Living Property Management Services Co., Ltd.
joint with Gansu Culture Tourism Group Co., Ltd., to form an
intelligent comprehensive cultural tourism service platform
Gansu Culture Tourism
A-Living Property Management Services
Large-scale projects and
record-breaking skyscrapers
Record-breaking height
Block B, Xi’an Energy IFC 301m
Luohe Central Plaza 200m
Block D, Xi’an Energy IFC 150m
Cross-portfolio breakthrough and
cross-region expansionParticipation in
mixed-ownership reform of SOEs
All-out efforts in market expansion with diversified project sources. Newly increased contracted GFA obtained through
third-party expansion exceeded 23mn sq.m and newly obtained annualized contract value was over RMB690mn.
Qingdao Qinglv City Services
Established a JV with Qingdao Cultural Tourism Group through
mixed-ownership reform to provide urban sanitation, landscaping,
urban appearance and lighting management, and other city
services, covering landmark projects in different portfolios in the
SCO Demonstration Zone
14
Property Mgt Services – Boosted Non-residential Business
In 1H2020, the Group boosted its businesses in public buildings, commercial offices and other niche markets, obtained more than 10 projects with ten-
million-yuan scale. Acquired companies obtained contracted GFA of 12.59mn sq. m., and newly obtained annualized contract value was approx. RMB410mn
Qingdao International Convention Center
59,000 sq.m.
Shenzhen Public Security Bureau Futian Branch
192,000 sq.m.
China Taiping Insurance Shanghai Office Zone
30,000 sq.m.
Agricultural Bank of China R&D Tower
27,000 sq.m.Shenzhen Dayun AI Town
601,000 sq.m.
Shenzhen Bijiashan Park
1,470,000 sq.m.
The First Affiliated Hospital of Guangxi Medical University
160,000 sq.m.
Hefei Metro Line 5
Guangzhou Zengcheng Library
33,000 sq.m.
Government
office
Public
venue
Industrial
park
Commercial
office
Medical
institution
Park and
scenic spot
Educational
institution
Transportation
facility
15
Property owners VAS recorded a revenue of RMB422.7mn, up 105% y-o-y, accounting for 10.5% of the total
revenue, with a GP margin of 55%, increased by 3.6 p.p. y-o-y
Community Asset Management
Parking lot operation / Community advertisement / Clubhouse operation / Rental and leasing services
Living and comprehensive Services
• Online and offline advertising spaces were integrated to form the customized
solutions
• Cultivated channel cooperation and upgraded operation model to enjoy an
operating premium
Home Improvement
Turnkey furnishing / House appliances / House decoration / House renovation
“Xiaoya” series homecare services / “Lexianghui” series retail and group purchase services / Coordinated
development of VAS services for public buildings
• Accelerated the incubation of homecare division, adopted diversified cooperation
models and improved the flexible shift mechanism
• Formed strategic cooperation with JD Alliance, Vinda Group and other high-quality
brands to jointly explore the potentials of community economy
• Provided featured VAS for 2B and 2G customers, including catering and logistics
services
• From turnkey furnishing, to installation of home appliance, to upgrade and renovation, the
business achieved full life cycle coverage
• Innovatively adopted online live streaming sales to target new property owners and convert
traffic into sales
Home
Improvement
Community
Finance
Rental and Leasing
Services
Homecare
Services
Community New
Retail
Resource
Operation
360-degree Community VAS
Deep Integration of O2O Channels
Recorded a revenue of RMB95.1mn, up 9.3% y-o-y, accounting for 22.5% of the
revenue from property owners VAS
Recorded a revenue of RMB270mn, up 270.0% y-o-y, accounting for 63.9% of the
revenue from property owners VAS
Recorded a revenue of RMB57.5mn, up 24.5% y-o-y, accounting for
13.6% of the revenue from property owners VAS
Property Owners VAS – Operating Model Upgrade
16
Actively developed new retail in communities
Homecare services brand building
• Became an official partner of JD Alliance and connected A-Steward to JD Mall, providing owners with a more
accurate, more affordable and more convenient shopping experience
• Developed themed group purchases of fresh food, seasonal food, custom wines, flowers, etc. in communities to
satisfy property owners’ diversified needs of food, clothing, housing, travel, shopping and entertainment.
• Upgraded car care service and provided exclusive fuel discount benefits to property owners
In-depth operation of community space
• Introduced high-quality brands of
community nursery services to
address the keen demands of
property owners
• Initiated secondhand property
leasing services and achieved
excellent performance in the
regional pilots
• Provide convenient services that
cover the “last mile” to every
property owner‘s doorstep,
including parcel pick-up locker,
drinking water vending machine,
and smart vending machine, etc.
• Accelerated the incubation of
homecare division and the
upgrade of homecare brands
• Cooperated with well-known
brand of home appliance repair -
Zhuomuniao to enhance
professional service capabilities
• Enriched product types, launched
a variety of home cleaning
services that are widely
welcomed by property owners
Exploration of featured VAS
for non-residential portfolio
• Provided tailor-made VAS to 2B
and 2G customers
• For public buildings VAS,
promoted group catering,
commuting services and
material procurement services
• For commercial offices VAS,
explored the customized
services for enterprises,
conference services, new retail
and group purchase, car after-
sales services, etc.
Partner with:
Property Owners VAS – Developed Economic Ecosphere
17
Extended VAS recorded a revenue of RMB959.3mn, up 18.8% y-o-y, accounting for 24% of the total revenue,
with a GP margin of 48.9%, decreased by 0.3 p.p. y-o-y
Extended VAS
Sales Center
Property
Management
Sales AgencyHome Inspection,
Technology and
Others
• Concierge and reception
• Security services
• Site maintenance
• Display equipment maintenance
• Further improved quality through lean management
• Extended service scope to provide public area inspection and pre-completion inspection
• Stepped up the development of intelligent community
• Product positioning and marketing consulting
• Property sales agency
• Launched referral marketing services to make full use of channel resources in an effort to boost sales
Laid a foundation and outlined advantages for undertaking subsequent property management services
Provision of integrated marketing services for Agile and third-party property developers
Provision of sales center
management services
for property developers’
different types of projects
Enhanced the synergies
among property
developer, property
management companies
and property owners
Full-cycle management Asset-light model One-stop service
Accounting for 44.6% of the
revenue from extended VAS,
up 12.8% y-o-y
Accounting for 14.2% of the
revenue from extended VAS,
up 55.9% y-o-y
Accounting for 41.2% of the
revenue from extended VAS,
up 16% y-o-y
Operation
Review
04
19
Improved Quality and Efficiency in Four Major Aspects
Attached importance to cash flow and risk control
• Determined expenditure budget based on income in advance and
monitored cash flow in a real-time manner
• Strengthened internal control and risk alert mechanism to improve
corporate governance
Service
Quality
Management
Scale
Profitability
Cash Flow
Achieved growth by scale development
• Strengthened capabilities of third-party expansion and deepened the
integration of investment and expansion approach
• Expanded market jointly with 18 brand matrix to coordinate market resources
Improved profitability through lean management
• Upgraded information platform and improved intelligent management to
keep management cost under control
• Generated economies of scale through centralized procurement, flexible
shift mechanism and cost sharing
• Optimized KPI assessment system and improved per capita efficiency
Laid a solid foundation with high quality
• Continued to improve service quality through three-level quality control
system and the export of standardized operation
• Customized service products with different portfolio features to enhance
customer stickiness
20
Optimized Lean Management and Remained Diligent in Receivables Collection
Lean Management
Visible data monitoring
Operating profit
margin of projects
significantly
improved
Refined cash flow management
Operating cash flow in 1H2020 was nearly RMB1.1bn, representing an increase of 104.7% y-o-y
Regular cash flow
analysis reportWeekly report
mechanism
Management of
cash flow
statements
568
873
537
1,099
1H2019 1H2020
Net profit
Operating cash flow
Full coverage of
business
Full-dimensional
presentation
Problem identification
through data analysis
Result-oriented process
control
Operating
Efficiency
Revenue
Net profit
Regions and dimensions/Time tread/Ranking and analysis…
Scale
Expansion
Business scale
Contract amount
Cost Control
Cost analysis
Expenditure
control
Cash Flow
Collection rate and overdue
clearing rate
Sales receivables
Cash flow
(RMB million)
21
Post-Investment Integration with Remarkable Results
Public services
management platform
Market synergy
Investment and
expansion
Information
system
Strategic layout
Financial analysis
Appraisal system
VAS
Empowerment on
efficiency
Incentive
mechanism
Cultural integration
Standard
establishment
Experience sharing
Integration of
projects through
market mechanism
Demand research
and systemic
implementation
Integration of
performance and
finance
Rolling forecast
Implantation of A-
Steward
and products
Manpower review
Brand strategy
Quality improvement
Export of standards
Fully empowered
the acquired
companies
Clearly defined duties and authority
Professional
integration
Long-term incentive
scheme
Comprehensive
appraisal
Built management and control system in top level, optimized
authorization structure and clearly defined the
management responsibilities for major issues with
flexibility in daily operation
Public services functioned as a post-investment management
platform to connect acquired companies with various
functional divisions in business operation
Set long-term incentive scheme covering core management
team of acquired companies and benchmarked remuneration
scheme for the same interest
Established a comprehensive performance appraisal system
to carry out monthly business reporting and quarterly
performance analysis meeting
Acquired companies
in 1H2020• Newly increased contracted GFA:
12.59mn sq.m.
• Newly increased GFA under
management: 10.26mn sq.m.
• Renewal rate: 95%
• Average price hike: 7.2%
• NP margin increased by 1.5* p.p.y-o-y
* Including subsidiaries of CMIG PM
(unaudited)
22
Innovative Management with Appropriate Incentives
Long-term incentive scheme and
alignment of long-term interests
Partner mechanism to provide clear
promotion paths
• Implemented a long-term incentive
scheme for senior management after
the approval of H share full circulation
• Strengthened the alignment of interests
of the core executives and the Group
• Implemented a multi-level incentive
scheme, covering the executives of the
acquired companies and key business
personnel
• Formed a partner mechanism and
promoted the integration of
investment and expansion to secure
improvements in quality and quantity
• Enhanced competitiveness through
shared benefits and responsibilities
• Promoted “district-based sub-
contracting” mechanism to provide
clear promotion paths for key elites
• Established an attractive, flexible and
market-oriented remuneration
scheme to stimulate the motivation of
the team
• Implemented the flexible shift
mechanism and outsourcing practices
to reduce cost, increase efficiency
and improve per capita performance
Adoption of market-oriented
remuneration scheme to improve
per capita performance
Stimulate the potential through alignment of long-term interest
Improve per capita efficiency to build a wolf-like team
23
Top 100 Property
Management
Companies in
China
TOP4
A Leading Brand in
the Provision of
Comprehensive
Public Building
Services
9 brands ranked
among Top 100
Companies in
China
MSCI
ESG”
Rating
A-level
A member of HSCI,
eligible stocks for
Shenzhen-Hong
Kong Stock
Connect and MSCI
China Index
Well-Recognized Brand Strength
Ranked 4th out of “2020 Top 100 Property Management Companies in China”
Ranked 1st out of “2020 China Top 100 Leading Property Management
Companies in terms of Growth Potential”
9 brands ranked among Top 100 Companies in China with their
excellent comprehensive strengths
2020 Leading Specialized Property Management Company in China
– A Leading Brand in the Provision of Comprehensive
Public Building Services
A constituent of the HSCI (Small-Cap)
Included as eligible stocks for Shenzhen-Hong Kong Stock Connect
A constituent of MSCI China Index
MSCI ESG “A” Rating
Highest rating in the industry
Large Scale
Excellent Quality
Well-known Brand
Good Reputation
24
Demonstration of Value in Epidemic Control and Prevention
Responded promptly and established a three-
level prevention and control mechanism
• United seven regional office and 18 brands as a
cohesive force, formed a special task team and
established a three-level epidemic prevention and
control mechanism
• Established 24-hour epidemic reporting mechanism
for regional executives and project managers
• Formulated standards and conducted on-site
inspections to ensure the full implementation of
prevention measures on the frontline
Took the lead in the industry and
stood on the front line
• Took the lead in compiling the Operation Guidelines
for the Prevention and Control of COVID-19 in the
Residential Property Management Area (Trial)”
published by the China Property Management
Association, which became an industry benchmark for
operation guideline
• Safeguard the communities by putting lockdown in
place. Strengthened disinfection measures and
publicity to protect the health of property owners
Proactively responded to challenges, kept cost
under control and explored potential opportunities
• Cooperated with high-quality suppliers to resume fresh
food delivery ahead of schedule and provided customized
services to meet the needs of property owners
• Optimized budgeting through centralized procurement,
explored the opportunities for improving profitability and
actively participant in the tax and insurance relief scheme.
• Formulated an effective expansion plan to catch up with
the progress and determined to achieve the target
Future
Outlook
05
Strategic Upgrade Along the Entire Industry Chain
26
Comprehensive services
for residential properties360-degree
community VAS
Optimize business portfolio and industrial chain layout to become a leading service platform with
5 major business segments and an 18-brand matrix
A-Living Smart City Services Co., Ltd
Stock code:3319.HK
Comprehensive services
for public buildingsComprehensive services for
high-end commercial officesComprehensive city
management platform
27
Intelligent City Management Platform
Market outlook
• City service is moving towards market-oriented development and undergoing industry consolidation, while the absence of a
comprehensive city management platform indicating there is an untapped market with market size over a trillion yuan.
• City comprehensive management is moving in a direction of specialization, refined management and market-oriented
development. Leading players with good reputation and comprehensive business portfolio in the industry enjoy absolute
advantages in development.
Industry features
• Asset-light operation; high collection rate; relatively long contract term; high annualized contract value per project
• Synergies between city service and property management business can be generated through centralized procurement,
flexible shift mechanism and sharing of market sources.
Expansion strategy
• Seek opportunities for government-enterprise cooperation, mixed ownership reform of SOEs, and strategic
cooperation in this field
• Seek opportunities for acquiring regional leading municipal sanitation and city service companies with a strong growth
momentum
• Set up an individual business segment and build a dedicated team to achieve organic growth
Objectives
• Enter into city services ahead of industry players to size the opportunities for industry integration, thus creating a
growth driver
• Achieve rapid growth and become one of the leading players in the comprehensive city management market
Scope of services
• Backed by information and data management platform, the city’s public resources, common areas, and public
facilities will be managed in a centralized manner
• The scope of services covers municipal sanitation, management of road facilities and equipment, maintenance of urban
order, comprehensive management of the living environment, management of public venues and facilities, and other
convenient services for city life, etc.
Smart city
services and
operation
Urban-rural
integrated
sanitation
IoT + waste
sorting
Investment and
construction of
urban
environmental
industry
Comprehensive
solution for
ecological
environment
28
Accelerate Expansion
New
business
segment
Multi-
channel
Business
integrationEmphasis on
synergies
Look for quality target of M&A in
industry consolidation
Continue to look for high-quality property
management companies that can improve
A-Living’s geographical coverage and enrich
its business portfolio, especially those in the
niche markets with high barriers and armed
with a wide brand moat
Develop new business segment
– city services
Establish the fifth strategic business
segment to break through scope of
business, explore the blue ocean market
and create a new growth driver, thereby
evolving into a comprehensive operator for
intelligent city services
Build multi-channel integration of
resources
Keep pace with the industry development and
actively participate in the mixed ownership
reform of SOEs;
Introduce resources from government and
SOEs;Take advantage of property developers’
resources network to realize collaborations
between segments and seek for business
opportunities
Market expansion in all business
portfolios and create synergies
through empowerment
Accelerate the enhancement of the Group’s first-
mover advantages in various niche markets,
fully empower all brands under A-Living,
strengthen the market coordination, and assist
the acquired companies in achieving rapid
growth
29
Performance Boosters: Endogenous Development and Lean Management
Focus on endogenous development
Improve efficiency through lean management
• Strive for perfection in the service quality, improve property owners’ experience
and strengthen customer stickiness
• Sort out projects to be fully prepared for price hike in an orderly manner
• Build the VAS platform in a vertical direction and increase the penetration rate
with multi-portfolio synergy
• Implement lean management in all dimensions to improve the profitability
• Transform from labor-intensive business to technology-backed and
intelligent business
• Adopt cost-effective operation and flexible shift mechanism, and form the
cross-regional economies of scale
Traffic
platform
Community
channel
Become a community ecosphere platform with huge traffic
and a GFA of more than 600mn sq.m., convert traffic into
revenue, and integrate cross-regional resources to realize
economies of scale
Integrate the VAS industrial chains for 2C, 2B and 2G
business and coordinate the development of VAS in various
business portfolios
Portfolio
collaboration
Strategic
cooperation
Make full use of information and resources to meet the property owners’
needs, give full play to the advantages in cost-effective and convenient
logistics and proactively explore the upstream supply chain to provide
direct supply channels to the community with integrated marketing and
sales
Adopt flexible approaches for cooperation and introduce
well-known brands and strategic partners, and fully develop
community economy with an asset-light model
30
Ideal life
creator
Service provider for
community VASAsset-light and platformized operation
Life services
platformCity services
platform
Innovation
incubation
platform
Innovative Operation of Community Economy
Lifelong Caring
A-Living Services Co., Ltd.