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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN
CONJUNCTION WITH THE SECTION HEADED "WARNING" ON THE COVER OF THIS DOCUMENT.
SUMMARY
This summary aims to give you an overview of the information contained in this document. Since
it is a summary, it does not contain all the information that may be important to you. You should read
this document in its entirety before you decide to invest in the [REDACTED].
There are risks associated with any investment. Some of the particular risks in investing in the
[REDACTED] are set out in “Risk Factors” in this document. You should read that section carefully
before you decide to invest in the [REDACTED].
OVERVIEW
We are a reputable and fast growing comprehensive property management service provider in China,
with solid footprint in the Greater Bay Area and increasing market presence in other regions in the PRC,
namely, Guangxi Zhuang Autonomous Region, Chongqing Municipality, Guizhou province, Yunnan
province, Jiangsu province and Hunan province. Established in Guangzhou in 2000, our Group has over two
decades of experience in the property management service industry in the PRC and is the vice president unit
of the Guangzhou Property Management Industry Association (廣州市物業管理行業協會副會長單位). In
2020, our Group was awarded as one of the 2020 Top 100 Property Management Companies in terms of
corporate brand affection (2020年物業服務企業品牌傳播力百強) by CRIC and the 2020 China Top 100
Property Management Companies in terms of overall strength (2020中國物業企業綜合實力百強) by EH
Consulting (億翰智庫). Our managed properties, Guangzhou Tianyu Garden II (廣州天譽花園二期),
Nanning Tianyu Garden III (南寧天譽花園三期) and Guangzhou Skyfame Byland (廣州天譽半島) were
also recognised as the property management demonstration residential community in the Guangdong
province (廣東省物業管理示範住宅小區), one of the 2019 Guangxi exemplar property management
projects (2019年度廣西物業服務示範項目) and the 2020 China Real Estate Digital Power Smart
Community Benchmarking Project (2020年度中國地產數字力智慧社區標杆項目), respectively.
With the vision of “rejuvenating the cities and retaining young talents for the city (讓城市更年輕及
為城市留住年青人)”, since 2016, we, as one of the pioneers among our industry peers, have commenced to
provide a new line of value-added services to youth communities targeting on youth entrepreneurs and start-
up companies, namely the youth community operating services, which makes us distinctive from other
property management service providers in China. According to CRIC, we were the first market player
providing youth community operating services compared with the Top 100 Property Management
Companies in the Greater Bay Area in 2019. In pursuit of our core value of “providing services that
move our customers and surprising our customers with quality (服務讓業戶感動、品質讓業戶驚喜)”, we
have also endeavoured to focus on the quality and details of our services to serve customers’ differentiated
demands, which has shaped our brand image for providing high-calibre services. As at 31 December 2020,
our contracted property management services spanned across 14 cities in China with a total contracted GFA
of 9.4 million sq.m. and a total GFA under management of 4.7 million sq.m., among which approximately
83.2% was contributed to properties located in the first and second-tier cities.
- 1 -THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN
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SUMMARY
OUR BUSINESS MODEL
Our business primarily comprises the following three business segments:
• Property management services – We provide property developers, property owners and
residents with a wide variety of property management services, including, among others,
security, cleaning, gardening and greening, repairs and maintenance services. Our portfolio of
managed properties comprises (i) residential properties; and (ii) non-residential properties
(including, among others, commercial properties and office buildings). We collect property
management fees for such services. During the Track Record Period, most of our property
management fees were charged on a lump sum basis, with only a very small portion charged
on a commission basis.
• Value-added services to non-property owners – We also provide a wide range of value-
added services to non-property owners, primarily consisting of property developers, including
(i) preliminary planning, consultancy and pre-delivery services, which assist property
developers to better meet the needs of end-users during different stages of the property
development processes in respect of, among others, project planning, design management and
construction management; (ii) sales assistance services, which assist property developers in
showcasing and promoting their properties, including pre-sale consultation, display unit
management, organising sales campaigns as well as visitor reception for property development
projects; (iii) maintenance and inspection services, such as assisting property developers in
their final inspection of properties and assisting with the repair and maintenance of properties
during their post-delivery quality warranty periods; and (iv) property agency services to
property developers.
• Community value-added services – We also provide (i) community value-added services to
property owners and residents to improve their living experiences; and (ii) the youth
community operating services to youth communities targeting on youth entrepreneurs and start-
up companies.
Our community value-added services to property owners and residents include (i) home-living
services (including, among others, delivery of daily necessities, housekeeping, transportation
services); (ii) intermediary services (including, among others, operating clubhouses,
community communication channel, swimming pools, sport facilities, playgrounds and
amusement centers); (iii) property agency services (including, among others, property
brokerage for second-hand properties and home renovation and decoration services); and
(iv) community procurement services (including, among others, groceries and household goods
shopping services and poverty alleviation-oriented procurement).
Our youth community operating services include commercial operations of a variety of shared
spaces such as shared offices, co-working spaces and dedicated hot desks. With the aim to
create a community-minded environment and to cater users’ diverse needs, we offer users of
the shared spaces, primarily consisting of youth entrepreneurs and start-up companies, a wide
range of value-added services such as reception services, conference room and meeting
management and operate self-serviced retail kiosks and vending machines in the shared spaces
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SUMMARY
to enhance users’ experience. In the meantime, we also provide them with abundant resources
relating to business set up and maintenance, including but not limited to commercial secretarial
services, business registration service and fiscal and taxation consultancy service by
collaborating with professional services providers.
We believe that our property management services serve as the basis for us to diversify our business
scope, broaden our income stream and help to enlarge our customer base for our value-added services to
non-property owners and community value-added services. We believe our community value-added services
especially our youth community operating services enhance the uniqueness of our business and the
satisfaction and loyalty of our customers, promote image of our brand and services and thereby improve our
profitability.
The table below sets out the breakdown of our revenue by business segments for the years indicated:
For the year ended 31 December
2018 2019 2020
Revenue Revenue Revenue
(RMB’000) (%) (RMB’000) (%) (RMB’000) (%)
Property management services 50,003 53.9 68,272 54.7 100,311 48.5
Value-added services to non-
property owners 35,753 38.5 48,056 38.5 97,393 47.1
Community value-added services 7,100 7.6 8,498 6.8 9,211 4.4
Total 92,856 100.0 124,826 100.0 206,915 100.0
We have achieved rapid growth during the Track Record Period. Our revenue increased by 34.3%
from approximately RMB92.9 million in 2018 to approximately RMB124.8 million in 2019 and further
increased by 65.8% to approximately RMB206.9 million in 2020, representing growth at a CAGR of
approximately 49.2%. Our profit for the year increased by 19.5% from RMB26.7 million in 2018 to
RMB31.9 million in 2019 and further increased by 66.5% to RMB53.1 million in 2020, representing growth
at a CAGR of approximately 41.0%.
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SUMMARY
We experienced significant increases in the number of properties and GFA under management, as
well as contracted GFA during the Track Record Period, The following table sets out the number of
properties and GFA under our management, as well as the number of properties we were contracted to
manage and corresponding contracted GFA as at the years indicated.
As at 31 December
2018 2019 2020
Number of properties under
management(1) 11 13 22
Number of properties we were
contracted to manage(2) 18 22 33
GFA under management
(sq.m. in thousands) 2,035 2,940 4,704
Contracted GFA (sq.m. in thousands) 4,338 5,718 9,419
GFA of our pipeline properties
(sq.m. in thousands) 2,303 2,778 4,715
Notes:
(1) Refers to properties that have been delivered to us for property management purposes.
(2) Refers to all properties for which we have entered into the relevant operating property management service
agreements, which may include properties that have not been delivered to us for property management
purposes in addition to properties under management.
Portfolio of Properties under Management
During the Track Record Period, we primarily offer property management services to properties
developed by the Skyfame Group. During the same period, revenue contribution from our property
management services to properties developed by third-party property developers continued to grow, which
was mainly due to our development strategy to diversify the source of property management projects. The
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SUMMARY
following table sets out a breakdown of our total GFA under management and number of projects by
developer type as at the dates indicated, as well as revenue from property management services by developer
type for the years indicated.
As at/for the year ended 31 December
2018 2019 2020
GFA under No. of GFA under No. of GFA under No. of
management projects Revenue management projects Revenue management projects Revenue
(’000 sq.m.) (RMB’000) (’000 sq.m.) (RMB’000) (’000 sq.m.) (RMB’000)
Properties developed by
Skyfame Group 1,932 10 49,854 2,525 11 66,879 3,358 17 82,326
Properties developed by third party
property developers(1) 103 1 149 415 2 1,393 1,346 5 17,985
Total 2,035 11 50,003 2,940 13 68,272 4,704 22 100,311
Note:
(1) Included a property project developed by an associate of Mr. Yu, a Controlling Shareholder of our Group,
namely Foshan Ruifeng Investment Co., Ltd.* (佛山市瑞豐投資有限公司) (“Foshan Ruifeng”), of which our
Group was contracted to provide property management services to Foshan Ruifeng since 2010 under
commission basis. As at the Latest Practicable Date, Mr. Yu Fung (余豐先生), the son of Mr. Yu, indirectly
controlled and held approximately 22.65% equity interests in Lvjing Holding, which in turn held 66.25% equity
interests in Foshan Ruifeng. Notwithstanding the aforesaid, neither our Company nor Mr. Yu has any influence
or control over Foshan Ruifeng and/or Lvjing Holding in selecting candidates for the provision of property
management services to properties developed by Foshan Ruifeng and/or Lvjing Holding. During the Track
Record Period, our revenue generated from managing the property developed by Foshan Ruifeng amounted to
approximately RMB149,000, RMB149,000 and RMB149,000, respectively, representing less than 1% of the
total revenue of our Group during the relevant periods.
OUR COMPETITIVE STRENGTHS
We believe that our success is primarily due to the following competitive strengths: (i) a well-known
comprehensive property management service provider rooted in Guangzhou, with a fast growth and
expansion track record to the Greater Bay Area and other key regions in the PRC; (ii) strong leverage on the
large project portfolio and landbank of Skyfame Group leading to highly visible growth opportunities and
further expansion; (iii) a wide variety and unique services portfolio catering to various types of properties
and customers, leading to diversified revenue streams; (iv) well-recognised reputation and high customer
satisfaction rate of our quality services; (v) establishment of smart living service platform with advanced
technologies widely adopted to improve operational efficiency and user experience; and (vi) a highly
energetic, visionary and professional management team with extensive industry experience and knowledge.
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SUMMARY
OUR BUSINESS STRATEGIES
We intend to implement the following strategies: (i) accelerate our expansion through acquisitions
and strategic investments to solidify our business deployment in the Greater Bay Area and other regions in
China; (ii) upgrade our information technology system and utilise advanced technology to further enhance
our operational efficiency and customer experience; (iii) continue exploring and diversifying the type of
community value-added services that we provide to cater for the differentiated needs of our customers and to
expand our revenue base; and (iv) enhance our human resources through recruitment, training and
motivation to support business growth.
RELATIONSHIP WITH SKYFAME GROUP
The [REDACTED] will constitute a spin-off from the Skyfame Group. The Spin-off is not subject to
shareholders’ approval of the Skyfame Group. Upon completion of the Spin-off and the [REDACTED], the
Skyfame Group will not retain any interest in our issued share capital and we will no longer be a subsidiary
of the Skyfame Group.
We have a long and close business relationship with Skyfame Group. We started our business in 2001
in Guangzhou by providing property management services to properties developed by Skyfame Group. As
Skyfame Group started to develop commercial properties, we began managing commercial properties in
2009. During the Track Record Period, we provided property management services to substantially all of the
properties developed by Skyfame Group and none of the property management projects were terminated
during the term of contracts. Skyfame Group was our largest customer during the Track Record Period.
According to CRIC, it is common that ex-parent companies usually continue to maintain a close business
relationship with their spun-off property management companies after completion of a spin-off as these
companies, through previous long standing relationship, have built a well-established mutual trust with them
and developed a much more in-depth understanding of their specific requirements.
Given our long and close relationship with Skyfame Group, we are familiar with its specific
requirements and expected deliverables. We have always provided quality services, which help enhance the
brand image of Skyfame Group and the value of their property development projects. Our Directors are of
the view that our relationship with Skyfame Group is mutually reliant and beneficial.
In addition, during the Track Record Period, our operating performance scaled up in concert with the
expansion of Skyfame Group. According to the annual results announcement of Skyfame Group for the year
ended 31 December 2020, as at 31 December 2020, Skyfame Group had project portfolio and potential land
reserves in aggregate GFA of approximately 31.0 million sq.m. and held interests in 27 projects, either
completed, under construction or for future development. Given Skyfame Group’s extensive and large land
reserve, we anticipate that the demand of Skyfame Group on our property management services will
continue to rise.
Having considered (i) our long standing cooperation relationship with Skyfame Group; (ii) our in-
depth understanding of Skyfame Group’s requirements and our capability to provide quality services; (iii)
the mutual benefits and reliance for both Skyfame Group and us to maintain such reciprocal relationship;
and (iv) the anticipated increasing demand of Skyfame Group on property management services from us, our
Directors are of the view that the current relationship between Skyfame Group and us is unlikely to be
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SUMMARY
materially adversely changed or terminated. Please refer to “Relationship with Controlling Shareholders –
Our Relationship with Skyfame Group” in this document for further details. We expect to continue to
provide services to Skyfame Group and derive revenue therefrom.
OUR CUSTOMERS
Our customer base primarily consists of property developers, property owners and residents. We have
established stable business relationships with most of our major customers from at least two years to more
than 20 years. During the Track Record Period, a significant portion of our property management and value-
added services was related to properties developed by Skyfame Group. For the three years ended 31
December 2020, revenue from sales to our five largest customers amounted to RMB56.8 million, RMB73.2
million, and RMB123.7 million, respectively, which accounted for approximately 61.2%, 58.8% and 59.8%,
respectively, of our total revenue. During the same periods, revenue from sales to our single largest
customer the Skyfame Group amounted to RMB49.3 million, RMB65.0 million and RMB102.5 million,
respectively, which accounted for approximately 53.1%, 52.1% and 49.5%, respectively, of our total
revenue. Please refer to “Business – Customers” in this document for further details.
The following table sets out a breakdown of our revenue by business segment and type of customers
for the periods indicated:
For the year ended 31 December
2018 2019 2020
Revenue Revenue Revenue
RMB’000 % RMB’000 % RMB’000 %
Property management services
– Skyfame Group 13,556 14.6 16,946 13.6 19,030 9.2
– Lvjing Holding Group 252 0.3 252 0.2 252 0.1
– Independent Third Parties 36,195 39.0 51,074 40.9 81,029 39.2
Subtotal 50,003 53.9 68,272 54.7 100,311 48.5
Value-added services to non-
property owners
– Skyfame Group 35,753 38.5 48,056 38.5 83,458 40.3
– Independent Third Parties – – – – 13,935 6.8
Subtotal 35,753 38.5 48,056 38.5 97,393 47.1
Community value-added services
– Lvjing Holding Group 351 0.3 362 0.3 362 0.2
– Independent Third Parties 6,749 7.3 8,136 6.5 8,849 4.2
Subtotal 7,100 7.6 8,498 6.8 9,211 4.4
Total 92,856 100.0 124,826 100.0 206,915 100.0
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SUMMARY
OUR SUPPLIERS
Our suppliers are primarily subcontractors located in China who provide cleaning, security and
property agency services. For the three years ended 31 December 2020, purchases from our five largest
suppliers amounted to RMB6.5 million, RMB9.0 million and RMB19.9 million, respectively, which
accounted for approximately 12.6%, 11.9% and 16.2%, respectively, of our cost of sales. During the same
periods, purchases from our single largest supplier amounted to RMB1.9 million, RMB3.2 million and
RMB4.9 million, respectively, which accounted for approximately 3.6%, 4.2% and 4.0%, respectively, of
our total cost of sales. Please refer to “Business – Suppliers” in this document for further details.
CONTROLLING SHAREHOLDERS
Immediately upon completion of the Spin-off, without taking into account any Shares which may be
issued pursuant to the exercise of the [REDACTED] and any options which may be granted under the Share
Option Scheme, and assuming the [REDACTED] under the [REDACTED] are fully taken up by the
[REDACTED], Mr. Yu will in aggregate own approximately [REDACTED] of the total issued Shares, of
which approximately [REDACTED] of the total number of issued Share will be owned in his own personal
capacity and approximately [REDACTED] of the total number of issued Shares through Sharp Bright and
Cosmos Tianyu. Each of Sharp Bright and Cosmos Tianyu is an investment holding company with no
business operation. Accordingly, Mr. Yu, Sharp Bright and Cosmos Tianyu are our Controlling
Shareholders. Please refer to “Relationship with Controlling Shareholders” in this document for further
details.
[REDACTED] INVESTMENT
[REDACTED] made an investment in our Company for a total cash consideration of HK$12 million,
which was negotiated on an arm’s length basis between the parties with reference to, amongst others, the
financial performance of our Group for the year ended 31 December 2019, the then market conditions of the
property management industry and the price-to-earnings ratios of approximately seven times and was fully
and unconditionally settled on 26 January 2021. The total cost of investment of the [REDACTED] Investor
under the [REDACTED] Investment represents a discount of approximately [REDACTED]% to the
[REDACTED] per Share (based on the mid-point of the indicative [REDACTED] range of
HK$[REDACTED] per Share). Immediately following the completion of the [REDACTED], the
[REDACTED] and the [REDACTED] (assuming that the [REDACTED] and the options which may be
granted under the Share Option Scheme are not exercised), [REDACTED] will be interested in
approximately [REDACTED] of the issued share capital of our Company. For further details, please
refer to “History, Reorganisation and Corporate Structure—The [REDACTED] Investment” in this
document.
ACQUISITIONS AND DISPOSALS DURING AND AFTER THE TRACK RECORD PERIOD
In order to expand our property portfolio and geographical coverage, we acquired 51% of the equity
interest in Guiyang Yujun Property Management from Mr. Chen Peng, an Independent Third Party, on 1
July 2020, at a consideration of RMB76,500. The amount of consideration was determined after arm’s length
negotiation with reference to the net asset value of Guiyang Yujun Property Management. Guiyang Yujun
Property Management is principally engaged in the provision of property management services. Such
acquisition was successful to us, as we have integrated Guiyang Yujun Property Management into our
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SUMMARY
operations and the projects it managed fit our strategic plan in terms of property types and scales. Through
the acquisition of Guiyang Yujun Property Management, we achieved growth with respect to GFA under
management and revenue and also strengthened our ability to expand our business outward.
To avoid the potential business competition between the Group and the Skyfame Group upon the
[REDACTED], Skyfame Group has on 7 January 2021, with the consent of the two minority shareholders,
disposed its 65.5% equity interest in Nanchang Xinhaojing Property Service Co., Ltd.* (南昌新好景物業服
務有限公司) (“Nanchang Xinhaojing”) to Guangzhou Yuexiu, an Independent Third Party, at nil
consideration, which was determined after arm’s length negotiations having considered that Nanchang
Xinhaojing has recorded a loss of RMB430,000 for the year ended 31 December 2020 and that the registered
capital of Nanchang Xinhaojing has not been paid up as at the disposal. Nanchang Xinhaojing is a company
established in the PRC with limited liability on 18 May 2020 with an initial registered capital of RMB0.5
million, which was wholly-owned by Jiangxi Xinhaojing Industrial Development Co., Ltd.* (江西新好景實
業發展有限公司) (“Jiangxi Xinhaojing”) before the disposal, whilst Jiangxi Xinhaojing is in turn owned as
to 65.5% by Skyfame Realty, 20% by Mr. Huang Xiaohao (黃曉豪) and 14.5% by Ms. Chen Yujuan (陳玉
娟). Upon the disposal, Nanchang Xinhaojing was owned as to 65.5% by Guangzhou Yuexiu, 20% by Mr.
Huang Xiaohao and 14.5% by Ms. Chen Yujuan.
The impact of the disposal of Nanchang Xinhaojing on the overall operating performance of our
Group is insignificant and is indeed in the interest of our Company and our Shareholders as a whole for the
following reasons:
(i) Nanchang Xinhaojing has recorded a loss of approximately RMB430,000 for the year ended 31
December 2020 and net liabilities of approximately RMB430,000 as at 31 December 2020;
(ii) as at 31 December 2020, Nanchang Xinhaojing had a contracted GFA and GFA under
management of approximately 133,264 sq.m. and 133,264 sq.m., respectively, representing less
than 5% of the total contracted GFA and GFA under management of the Group as at 31
December 2020; and
(iii) apart from the property projects managed by Nanchang Xinhaojing, our Company did not
manage any properties located in the Nanchang City or the Jiangxi Province, the PRC. The
disposal of Nanchang Xinhaojing will therefore enable our Group to reallocate the resources
deployed to Nanchang Xinhaojing to the properties management projects located at the regions
where our Group intends to develop.
To the best knowledge, information and belief of our Directors, having made all reasonable enquiries,
our Directors are not aware of any material non-compliant incidents of or legal proceeds, threatened or
actual, against Nanchang Xinhaojing during the Track Record Period up to the date of disposal. Please refer
to “History, Reorganisation and Corporate Structure – Acquisitions and Disposals during and after the Track
Record Period” in this document for further details.
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SUMMARY
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
Selected Items of Combined Statements of Profit or Loss
Year ended 31 December
2018 2019 2020
RMB’000 RMB’000 RMB’000
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,856 124,826 206,915
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . (52,245) (75,885) (122,514)
Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . 40,611 48,941 84,401
Profit before income tax . . . . . . . . . . . . . . . . 35,701 40,508 67,610
Profit and total comprehensive income
for the year . . . . . . . . . . . . . . . . . . . . . . . 26,661 31,855 53,068
Our revenue continued to increase during the Track Record Period, primarily due to a general
increase in the revenue for all our three business segments, namely property management services, value-
added services to non-property owners and community value-added services which was in line with our
business growth.
Selected Items of Combined Statements of Financial Position
As at 31 December
2018 2019 2020
RMB’000 RMB’000 RMB’000
Non-current assets . . . . . . . . . . . . . . . . . . . . 1,190 1,863 4,296
Current assets . . . . . . . . . . . . . . . . . . . . . . . 455,192 516,848 353,886
Non-current liabilities . . . . . . . . . . . . . . . . . . 50 529 2,311
Current liabilities . . . . . . . . . . . . . . . . . . . . . 346,357 376,352 160,900
Non-controlling interests . . . . . . . . . . . . . . . . 591 1,718 2,691
Total equity . . . . . . . . . . . . . . . . . . . . . . . . 109,975 141,830 194,971
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SUMMARY
Selected Items of Combined Statements of Cash Flow
Year ended 31 December
2018 2019 2020
RMB’000 RMB’000 RMB’000
Net cash generated from operating activities . . . 10,629 28,258 133,128
Net cash generated from/(used in) investing
activities . . . . . . . . . . . . . . . . . . . . . . . . . 36,199 (51,021) 405,461
Net cash used in financing activities . . . . . . . (58,352) (231) (276,562)
Net (decrease)/increase in cash and cash
equivalents . . . . . . . . . . . . . . . . . . . . . . . (11,524) (22,994) 262,027
Cash and cash equivalents at beginning of
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,470 34,946 11,952
Cash and cash equivalents at end of
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,946 11,952 273,979
MAJOR FINANCIAL RATIOS
The table below sets out our major financial ratios as at the dates indicated:
For the year ended/As at 31 December
2018 2019 2020
Return on assets (Note 1) 5.8% 6.1% 14.8%
Return on equity (Note 2) 24.2% 22.5% 27.2%
Current ratio (Note 3) 1.3 1.4 2.2
Liabilities to assets ratio (Note 4) 0.8 0.7 0.5
Net debt to equity ratio (Note 5) Not applicable Not applicable Not applicable
Gearing Ratio (Note 5) Not applicable Not applicable Not applicable
Notes:
1. Return on assets = profit and total comprehensive income for the year ÷ total assets × 100%
2. Return on equity = profit and total comprehensive income for the year ÷ total equity × 100%
3. Current ratio = total current assets ÷ total current liabilities
4. Liabilities to assets ratio = total liabilities ÷ total assets
5. Net debt to equity ratio and gearing ratio are not applicable because we did not have any borrowings during
the Track Record Period.
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CONJUNCTION WITH THE SECTION HEADED "WARNING" ON THE COVER OF THIS DOCUMENT.
SUMMARY
SUMMARY OF MATERIAL RISK FACTORS
Our operations involve certain risks, some of which are beyond our control. Some of the risks
generally associated with our business and industry include: (i) our future growth may not materialise as
planned and our historical results may not be indicative of our future prospects and results of operations; (ii)
a large portion of our revenue from property management services during the Track Record Period was
generated from services we provided in relation to properties developed by the Skyfame Group; (iii) a
significant portion of our operations are concentrated in the first-tier or second-tier cities, and we are
susceptible to any adverse development in government policies or business environment in this region; (iv)
any financial difficulties faced by the Skyfame Group may have material adverse impact on our business,
financial condition, results of operation and prospects; (v) we are in a highly competitive business and we
may not be able to compete successfully against existing and new competitors; (vi) we may fail to secure
new, or renew our existing, property management service contracts on favourable terms, or at all; (vii) we
may not be able to collect property management fees from property owners and property developers, and as
a result, we may incur impairment losses on trade receivables; and (viii) increase in labour costs and
subcontracting costs could harm our business and reduce our profitability. These risks are not the only
significant risks that may affect the value of our Shares. You should carefully consider all of the information
set out in this document and, in particular, should evaluate the specific risks set out in “Risk Factors” in this
document in deciding whether to invest in our Shares.
[REDACTED] STATISTICS
The statistics in the following table are based on the assumptions that: (i) the [REDACTED] is
completed and [REDACTED] Shares are issued and sold in the [REDACTED]; (ii) the [REDACTED] is
not exercised; and (iii) [REDACTED] Shares are issued and outstanding upon completion of the
[REDACTED].
Based on an [REDACTED] Based on an [REDACTED]
of HK$[REDACTED] of HK$[REDACTED]
per [REDACTED] per [REDACTED]
Market capitalisation of our
Shares(1) [REDACTED] [REDACTED]
Unaudited pro forma adjusted
net tangible asset value per
Share [REDACTED] [REDACTED]
Notes:
(1) Based on [REDACTED] Shares expected to be in issue immediately following the completion of the
[REDACTED].
(2) The unaudited pro forma adjusted net tangible asset value per Share is calculated after making the adjustments
referred to in “Appendix II – Unaudited Pro Forma Financial Information” in this document.
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CONJUNCTION WITH THE SECTION HEADED "WARNING" ON THE COVER OF THIS DOCUMENT.
SUMMARY
[REDACTED]
In order to enable Skyfame Shareholders to participate in the [REDACTED] on a preferential basis
as to allocation only, subject to the Stock Exchange granting approval for the [REDACTED] the Shares on
the Main Board of the Stock Exchange and the [REDACTED] becoming unconditional, [REDACTED] are
being invited to apply for an aggregate of [REDACTED] [REDACTED] in the [REDACTED],
representing approximately [REDACTED]% and [REDACTED]% of the [REDACTED] available under
the [REDACTED] and the [REDACTED], respectively (assuming the [REDACTED] is not exercised) as
[REDACTED]. The [REDACTED] are being offered out of the [REDACTED] under the [REDACTED]
and are not subject to reallocation as described in “Structure of the [REDACTED]– The [REDACTED] –
Reallocation” in this document. In the event the [REDACTED] is exercised, the number of [REDACTED]
will not change.
Pursuant to Article 23 of the Implementation Rules for Registration, Depository and Clearing Services
under the Mainland China-Hong Kong Stock Markets Connect Program 《內地與香港股票市場交易互聯互
(
通機制登記、存管、結算業務實施細則》), CSDCC does not provide services relating to the subscription of
newly issued shares. Accordingly, [REDACTED] who hold Skyfame Shares through Shanghai-Hong Kong
Stock Connect or Shenzhen-Hong Kong Stock Connect cannot participate in the [REDACTED] and will not
be able to take up their respective [REDACTED] to the [REDACTED] under the [REDACTED] through
the trading mechanism of Shanghai-Hong Kong Stock Connect or Shenzhen-Hong Kong Stock Connect.
Please refer to “Structure of the [REDACTED] — The [REDACTED]” in this document for further details.
DIVIDEND POLICY
Our Board has not adopted any dividend policy for the time being and does not have any pre-
determined dividend ratio. Our Board has absolute discretion as to whether to declare any dividend and if
any, when and the amount of dividend may declare. We did not declare nor pay any dividend to our
Shareholders during Track Record Period. Our Company will declare dividends, if any, in Hong Kong
dollars with respect to our Shares on a per-Share basis and will pay such dividends in Hong Kong dollars.
The amount of dividends actually distributed to our Shareholders will depend upon our earnings and
financial condition, operating requirements, capital requirements and any other conditions that our Directors
may deem relevant and will be subject to the approval of our Shareholders save that interim dividend may
be paid by our Board if our Board is satisfied that such payment is justified by our profits. Also, future
dividend payments will depend upon the availability of dividends received from our subsidiaries in the PRC,
therefore the payment of the dividends will be subject to, among others, the PRC laws, as well as if our
subsidiaries incur debts or losses as a result of any restrictive covenants in our bank credit facilities, or other
agreements that we or our subsidiaries may enter into in the future. Please refer to the paragraph headed
“Financial Information — Dividend” in this document for further details.
USE OF PROCEEDS
We estimate the [REDACTED] of the [REDACTED] which we will receive, assuming an
[REDACTED] of HK$[REDACTED] per [REDACTED] (being the mid-point of the [REDACTED] range
stated in this document), will be approximately HK$[REDACTED], after deduction of [REDACTED] and
e s t i m a t e d
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CONJUNCTION WITH THE SECTION HEADED "WARNING" ON THE COVER OF THIS DOCUMENT.
SUMMARY
expenses payable by us in connection with the [REDACTED] and assuming the [REDACTED] is not
exercised. We intend to use such [REDACTED] from the [REDACTED] for the purposes and in the
amounts set out below:
• approximately [REDACTED] or HK$[REDACTED], will be used to pursue strategic
acquisitions and investment opportunities to further develop strategic alliances, expand our
business scale, geographic coverage and increase our market shares in residential property
management service market and non-residential property management service market;
• approximately [REDACTED] or HK$[REDACTED], will be used to fund the purchase,
maintenance and upgrade of our information technology system;
• approximately [REDACTED] or HK$[REDACTED], will be used to improve and diversify
our community value-added services and youth community operating services; and
• approximately [REDACTED] or HK$[REDACTED], will be used for general business
purpose and working capital.
Please refer to “Future Plans and Use of Proceeds” in this document for further details.
[REDACTED]
The total estimated [REDACTED] primarily consist of [REDACTED] in addition to the professional
fees paid to the Joint Sponsors, legal advisers and the reporting accountant for their services rendered in
relation to the [REDACTED].
Assuming the [REDACTED] is not exercised and assuming an [REDACTED] of
HK$[REDACTED], being the mid-point of our indicative [REDACTED] for the [REDACTED], the
total [REDACTED] is estimated to be RMB[REDACTED] (equivalent to HK$[REDACTED]), of which
approximately RMB[REDACTED] (equivalent to HK$[REDACTED]) is directly attributable to the issue
of the [REDACTED] in the [REDACTED] and is expected to be accounted for as a deduction from equity
upon [REDACTED] in accordance with relevant accounting standards. The remaining expenses of
RMB[REDACTED] (equivalent to HK$[REDACTED]) were or are expected to be charged as expenses to
our combined statements of comprehensive income, of which RMB[REDACTED] (equivalent to
HK$[REDACTED]) was charged for the year ended 31 December 2020, respectively, while the balance
of RMB[REDACTED] (equivalent to HK$[REDACTED]) is expected to be charged in the year ending 31
December 2021. The above total [REDACTED] are the latest practicable estimates for reference only. The
final amount to be recognised may differ from these estimates.
RECENT DEVELOPMENTS AND NO MATERIAL ADVERSE CHANGE
Based on our unaudited management accounts, our revenue for the month ended 31 January 2021
increased compared to the same period in 2020, which was primarily due to our increase in GFA under
management and further business expansion. Our gross profit margin for month ended 31 January 2021
remained relatively stable compared to the same period in 2020.
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CONJUNCTION WITH THE SECTION HEADED "WARNING" ON THE COVER OF THIS DOCUMENT.
SUMMARY
In addition, subsequent to 31 December 2020 and as at the Latest Practicable Date, we had entered
into four cooperation framework agreements with Independent Third Party property developers or property
management companies, which typically set out their intention to engage us as the property management
services provider, the relevant project proposed to be managed by us and its GFA, and the proposed scope of
our services and property management fees. According to CRIC, property developers typically only enter
into such cooperation framework agreements with property management service providers that fulfil their
requirements for future engagement, and the execution of such agreements demonstrates property
developers’ recognition of a service provider’s credentials, track record and reputation. A number of
these agreements provide that the property developers shall, to the extent permitted by law, endeavor to
engage us as their property management service provider. These agreements are generally not legally
binding in nature, and contain provisions that once a preliminary property management service contract is
entered into, that contract shall prevail. The properties proposed to be managed by us under the cooperation
framework agreements had an aggregate GFA of approximately 2.1 million sq.m. as at the Latest Practicable
Date.
Since 31 December 2020 and up to the Latest Practicable Date, our business remained stable which
was in line with the past trends and our expectations. To the best of our knowledge, since 31 December
2020 (being the date on which the latest audited combined financial information of our Group was prepared)
and up to the date of this document, there has been no material adverse change in our business operations,
the business environment in which we operate, as well as our financial or trading position, indebtedness,
mortgage, contingent liabilities, guarantees or prospects.
OUTBREAK OF COVID-19 PANDEMIC
An outbreak of respiratory illness caused by a novel coronavirus, namely COVID-19, was reported in
December 2019 and continues to impact globally. On 12 March 2020, the WHO declared COVID-19
outbreak a pandemic. The outbreak of the COVID-19 pandemic is likely to have an adverse impact on the
livelihood of people around the world and on the global economy. In particular, the outlook of the property
market, economy slowdown and/or negative business sentiment could potentially have direct impact on the
property management market such as default or delay in settlement of property management fee by our
customers and our business operation and financial position may be adversely affected. However, with the
gradual resumption of economic activities in China since March 2020, the demand of real estate purchase
and property management services have begun to resume gradually. We anticipate that the COVID-19
outbreak is expected to have limited impact on China’s property management industry in the long run.
According to CRIC, the PRC property management industry is under interim pressure as property
management companies are ordered to suspend certain services and incur additional costs and expenses to
comply with additional regulations and government measures. In particular, our certain services had
experienced certain short-term impacts as a result of the COVID-19 pandemic.
Notwithstanding of the aforesaid, during the fight against the COVID-19 pandemic, property
management companies played a vital role, serving as a bridge among the government, community workers
and residents. We believe our efforts to control the outbreak has earned us high command and greater
degrees of trust and reliance from property owners and residents at properties under our management. In
particular, we have been awarded as an “Outstanding performance in pandemic prevention and control
property service unit (疫情防控工作表現突出物業服務單位) by the Guangzhou Housing and Urban-Rural
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SUMMARY
Development Bureau (廣州市住房和城鄉建設局). We have received the “Anti-epidemic enterprise paragon
(抗疫愛心典範企業獎)” awarded by the Golden Keys China (中國金鑰匙). Our various subsidiaries have
also received honor pennants from local authorities, in recognition of their outstanding efforts in combating
COVID-19 pandemic. The lockdown measures imposed in many regions have also led to residents’
increasing reliance on community value-added services to address their daily living needs, which we believe
this presents us significant opportunities to expand our related service offerings. We also expect that new
government regulations on property management industry may be promulgated from time to time, which
offers us a higher degree of regulatory certainty in our long-term business operations. Based on the above,
our Directors are of the view that no material adverse effect on our operations and financial performance is
expected to result from the recent COVID-19 pandemic. Please refer to “Business — The Impact of the
Outbreak of COVID-19 on our business” in this document for further details.
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