HONG KONG, Nov 22, 2020 - (ACN Newswire) - Evergrande Property Services Group Limited ("Evergrande Property" or "the Group"), one of the largest and fastest-growing comprehensive property management services providers in China, has today announced the details of its proposed listing on the Main Board of The Stock Exchange of Hong Kong Limited ("SEHK").

(from left to right): Mr. Wang Zhen, Executive Director and Deputy General Manager of Evergrande Property Services; Mr. Hu Liang, Executive Director and General Manager of Evergrande Property Services; Ms. An Lihong, Executive Director and Deputy General Manager of Evergrande Property Services

(from left to right): Mr. Wang Zhen, Executive Director and Deputy General Manager of Evergrande Property Services; Mr. Hu Liang, Executive Director and General Manager of Evergrande Property Services; Ms. An Lihong, Executive Director and Deputy General Manager of Evergrande Property Services

(from left to right): Mr. John Lee, Managing Director, Vice Chairman of Global Banking Asia and Head of Greater China of UBS; Mr. Wang Zhen, Executive Director and Deputy General Manager of Evergrande Property Services; Mr. Hu Liang, Executive Director and General Manager of Evergrande Property Services; Ms. An Lihong, Executive Director and Deputy General Manager of Evergrande Property Services; Mr. Leon Xu, Managing Director, Head of Corporate Finance of Huatai International

Investment Highlights

- Evergrande Property is one of the largest and fastest-growing comprehensive property management services providers in China with extensive geographical coverage and outstanding services quality- Introduces 23 cornerstone investors, and assuming an Offer Price of HK$9.13 per Share, being the mid-point of the indicative Offer Price range, cornerstone investors will subscribe for 789,471,000 Shares in total, which is equivalent to approximately 48.68% of the Offer Shares- Net profit grew from RMB106.6 million in 2017 to RMB930.5 million in 2019 at a CAGR of 195.5% between 2017 and 2019, the highest growth rate among Top 20 Property Management Companies in China- Revenue from three major business lines (property management services, value-added services to non-property owners and community value-added services) increased continuously, and boosted overall gross profit margin from 9.8% in 2017 to 38.1% for the six months ended 30 June 2020- As of 30 June 2020, the Group was contracted to provide property management services, value-added services to non-property owners and/or community value-added services to 1,354 projects in over 280 cities across 22 provinces, five autonomous regions, four municipalities and Hong Kong, serving nearly two million households. As of 15 November 2020, its total contracted GFA was 543.4 million sq.m., and its GFA under management was 278.9 million sq.m.- Capitalizing on its long-term cooperation with China Evergrande Group (the "Evergrande Group"), the Group benefits from stable source of projects and business opportunities brought by Evergrande Group's trusted brand and diversified business segments, supporting the Group's rapid growth- Established a smart information platform and standardized management systems designed to improve customer experience and operating efficiency and reduce costs- Seasoned, energetic and stable management team and an effective human resources management system- Aims to expand business scale of property management services, offer comprehensive value-added services, optimize smart management through strategic acquisitions and investment across multiple channels, and ultimately consolidate its leading status in the industry

Offering DetailsThe Group intends to offer a total of 1,621,622,000 shares, comprising 810,811,000 New Shares and 810,811,000 Sale Shares (subject to Over-allotment Option), of which 1,459,459,000 Shares are for International Offering, including 648,648,000 New Shares and 810,811,000 Sale Shares (and among which 129,730,000 Reserved Shares will be offered under Preferential Offering) (subject to reallocation and Over-allotment Option), while 162,163,000 Shares are for Hong Kong Public Offering (subject to reallocation). The indicative Offer Price range is between HK$8.50 and HK$9.75 per Offer Share. Assuming an Offer Price of HK$9.13 per Offer Share, the mid-point of indicative Offer Price range, and the Over-allotment Option is not exercised, total proceeds from the Global Offering are estimated at approximately HK$14,805 million.

The Hong Kong Public Offer will commence at 9:00 a.m. on 23 November 2020 (Monday) and will end at noon on 26 November 2020 (Thursday). The final Offer Price and allotment results will be announced on 1 December 2020 (Tuesday) and dealing of its shares is expected to commence on the Main Board of SEHK on 2 December 2020 (Wednesday). Shares will be traded in board lots of 500 shares each under stock code 6666.

As part of the International Offering, the Group has signed cornerstone investment agreements with 23 cornerstone investors. Assuming the Offer Price of HK$9.13 (the mid-point of indicative Offer Price range), cornerstone investors will subscribe for 789,471,000 Shares in total, which is equivalent to approximately 48.68% of the Offer Shares and approximately 7.3% of the total issued share capital immediately upon the completion of the Global Offering (assuming the Over-allotment option is not exercised).

Huatai Financial Holdings (Hong Kong) Limited, UBS, ABC International, CCB International, CLSA and Haitong International are the Joint Sponsors, Joint Global Coordinators and Joint Bookrunners of the listing. CMB International and ICBC International are the Joint Bookrunners.

One of the largest and fastest-growing comprehensive property management services providers in China with extensive geographical coverage and outstanding services qualityDeeply rooted in China, Evergrande Property is one of the largest property management services providers in China with extensive geographical coverage. As of 30 June 2020, the Group was contracted to provide property management services, value-added services to non-property owners and/or community value-added services to 1,354 projects in over 280 cities across 22 provinces, five autonomous regions, four municipalities and Hong Kong. As at 15 November 2020, the Group had contracted GFA of 543.4 million sq.m. and total GFA under management of 278.9 million sq.m. According to the report published by China Index Academy ("CIA"), as at 31 December 2019, the Group ranked second in terms of the number of cities covered by its projects and ranked third in terms of contracted GFA among Top 100 Property Management Companies in China. The Group's GFA under management was also 5.6 times the average of Top 100 Property Management Companies in China as at 31 December 2019.

The Group is also one of the fastest-growing comprehensive property management services providers in China. According to CIA, the Group's net profit increased from RMB106.6 million in 2017 to RMB930.5 million in 2019 at a CAGR of 195.5%, which was the highest growth rate among Top 20 Property Management Companies in China, and was significantly higher than both the 26.4% average growth rate of Top 100 Property Management Companies in China and the 52.3% average growth rate of Top 10 Property Management Companies in China. The Group has also maintained rapid growth in net profit since 2019, which increased by 181.8% from RMB407.3 million in the six months ended 30 June 2019 to RMB1,147.7 million in the six months ended 30 June 2020. In addition, revenue from the Group's three business lines, namely property management services, value-added services to non-property owners and/or community value-added services, grew continuously in the past three and a half years, driving overall gross profit margin to surge from 9.8% in 2017 to 38.1% in the six months ended 30 June 2020.

The Group has been providing property management services in China for nearly 24 years. Its dedication to quality has earned extensive market recognition, while its strong brand appeal and high service quality have helped it maintain a relatively high contract retention rate and obtain quality projects from independent third parties, allowing it to capture more market opportunities. Since 30 June 2020 and up to 15 November 2020, the Group had submitted tenders for, and entered into, 84 new property management agreements, with a tender success rate of 100% and an aggregate contracted GFA of 30.1 million sq.m.

Highly visible growth underpinned by the Evergrande Group's trusted brand and diversified business segmentsThe Group's long-term and close cooperation with Evergrande Group has provided it with a stable source of projects and business opportunities. Evergrande Group is one of the leading property developers in China and was named No.1 among "Top 100 Real Estate Companies in China" in 2020 in terms of overall strength by China Real Estate Top 10 Research Group. As disclosed in its 2020 interim results announcement, Evergrande Group had residential land reserves of approximately 240 million sq.m. as at 30 June 2020. It also ranked first among property developers in China in terms of attributable contracted sales for three consecutive years starting from 2017 according to CRIC. Evergrande Group's vast land bank and fast growing contracted sales GFA have not only provided a large potential pipeline of high-quality projects for Evergrande Property, but also helped quickly turn pipeline projects into the Group's projects under management.

The Group's business integrates well with Evergrande Group's diverse business segments and creates all-round strategic synergies with Evergrande Group. It also provides tailored property management and value-added services to Evergrande Group's real estate, cultural tourism, health and wellbeing management and new energy vehicles businesses. At the same time, the Group utilizes the rich resources of Evergrande Group's various business segments to build a comprehensive "Evergrande Life Circle" that serves the housing, travel, leisure and health needs of property owners. Looking ahead, with the long-term stable cooperative relations with Evergrande Group, the Group will continue to benefit from Evergrande Group's multi-disciplinary development, vast land reserves and other business opportunities to achieve sustainable growth, further expand the scale of its property management business and geographical coverage so as consolidate its market leading position.

Diversified property portfolio and service offerings bringing high-margin revenue streamsThe Group has expanded its property portfolio from mid-to high-end residential properties to other types of properties including commercial properties, theme parks, industrial parks, healthcare complexes, themed towns and schools. Going forward, it expects to continue expanding its portfolio of non-residential properties under management, in particular theme parks, industrial parks and healthcare complex projects. The Group's diverse portfolio of properties under management has helped diversify its revenue streams. It also positions the Group to take advantage of a wide range of high-quality third-party property management projects. Moreover, the Group provides diversified service offerings by leveraging its strong resources consolidation capability. As the Group's value added services are usually highly specialized and customized, they generate higher profit margins than conventional property management services. For the six months ended 30 June 2020, gross profit margin of the Group's community value-added services was 65.0%. According to CIA, the Group ranked fourth among Top 100 Property Management Companies in China in terms of the percentage of revenue from value-added services in 2019.

Smart information platform and standardized management systems designed to improve customer experience and operating efficiency and reduce costsLeveraging its Evergrande Smart Community mobile application, the Group has built an integrated smart community platform that boosts its core competitiveness and operating efficiency, creating a safe, comfortable and convenient community for property owners and residents. It has significantly improved its operating efficiency through the application of its smart management platform and standardized management system. The Group's operating profit margin (calculated as operating profit divided by revenue) improved to 33.1% for the six months ended June 30, 2020 from 3.4% in 2017. From December 31, 2017 to December 31, 2019, its GFA under management per employee increased at a CAGR of 35.5%, which was higher than the average CAGR of 17.6% for Top 100 Property Management Companies and of 10.6% for Top 10 Property Management Companies during the same period, according to CIA. Its capita per employee (calculated as revenue for the period divided by the number of employees at the end of the period) increased at a CAGR of 32.7% from 2017 to 2019, which was higher than the CAGR of 19.2% for Top 100 Property Management Companies and 13.6% for Top 10 Property Management Companies during the same period, according to CIA. In the future, with its sustained investment in technologies and its capabilities powered by technology, the Group will continue to improve its online services systems, constantly developing its online business management systems, promoting its smart community solutions, exploring new technological applications as well as enhancing its services and management efficiency and effectiveness.

High-quality Services Winning Market Acceptance and Paving the Way for ExpansionThe Group believes that its premium services have led to high customer satisfactions and contract retention rates. Its survey shows that its customer satisfaction rate reached 92.6% and 95.6% in 2019 and the six months ended June 30, 2020, respectively. During the same periods, its contract retention rate was 100% (excluding one project which the Group voluntarily quit in 2019). According to CIA, the Group is a "leading property management company in China in terms of customer satisfaction" in 2020. A number of properties managed by the Group were selected as model communities by provincial or municipal government authorities. This has enhanced its brand awareness and laid a good foundation for the Group to secure businesses from third-party developers.

Seasoned, energetic and stable management team, effective human resources management system and reputable strategic investorsThe Group has an energetic, highly-educated and experienced core management team whose members have on average over ten years of property management industry experience that enables it to capture market growth and make appropriate decisions at the group level, leading the Group to gather and nurture a professional services team. The Group has established an efficient human resources system. Every year, it recruits talent from universities across China and offers them a series of training programs. Its highly professional team has been developed under its comprehensive talent development and competition systems and effective evaluation and incentive schemes.

Future Growth

Looking ahead, the Group will consolidate its leadership in the industry through strategic acquisitions and investment, and by expanding the scale of property management business via multiple channels. The Group will also continue to strengthen its competitiveness in the market. It will enhance services quality by providing diverse value-added services offerings and optimizing intelligent management. It will also improve its human resources systems to support its business development in the long run.

Use of Net ProceedsUses / PercentageStrategic acquisitions and investment: 65.0%Development of value-added services: 15.0%Upgrade of information system and equipment: 8.0%Recruitment and cultivating talent: 2.0%Working capital and other general purposes: 10.0%

Dividend PolicyThe Group intends to adopt an annual dividend payout ratio of no less than 25% of its annual net profit available for distribution generated in each financial year starting from the year ending December 31, 2020.

Financial Performance

RMB'000 For the year ended 31 December For the six months ended 30 June 2017 2018 2019 2019(unaudited) 2020Revenue 4,399,356 5,903,226 7,332,722 3,465,760 4,563,855Gross profit 432,860 723,000 1,754,983 796,620 1,737,687Gross profit margin 9.8% 12.2% 23.9% 23.0% 38.1%Profit for the year 106,564 239,008 930,524 407,326 1,147,693Net profit margin 2.4% 4.0% 12.7% 11.8% 25.1%

About Evergrande Property Services Group LimitedEvergrande Property Services Group Limited is one of the leading property management services enterprise in China. Guided by its service philosophy of "conscientious services and heartfelt companionship", it has relentlessly pursued scalable development, standardized operation, professional services and intelligent management, with an aim to creating happy communities with premium living environment and cultural values by its quality services. The Group has an extensive geographical coverage of projects in more than 280 cities, spreading across 22 provinces, five autonomous regions, four municipalities and Hong Kong. It is the second largest property management services provider in China in terms of the number of cities covered by its projects as of 30 June 2020. The Group has a diverse portfolio of properties, including mid- to high-end residential properties, commercial properties, theme parks, industrial parks, healthcare complexes, themed towns and schools, among others. Over the past 24 years, the Group's dedication to services quality has gained wide recognition and received more than 300 awards and accolades in the industry. The Group was ranked top three among the Top 100 Property Service Enterprise Brands by the China Real Estate News in 2020.

Media EnquiriesStrategic Financial Relations LimitedMandy Go Tel: (852) 2864 4812 Email: mandy.go@sprg.com.hkMaggie Au Tel: (852) 2864 4815 Email: maggie.au@sprg.com.hkStephanie Liu Tel: (852) 2864 4852 Email: stephanie.liu@sprg.com.hk

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